Good day ladies and gentlemen and welcome to the Q2 2017 Kite Realty Group Trust Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I'd now like to introduce your host for today's conference Ashley Underwood, Investors Relations. Ashley, you may begin.

Thank you and good afternoon. Welcome to Kite Realty Group's Second Quarter Earnings Call. Some of today's comments contain forward-looking statements that are based on assumptions and are subject to inherent risks and uncertainties. Actual results may differ materially from these statements. For more information about the factors that can adversely affect the company's results, please see our SEC filings, including our most recent 10-K. Today's remarks also include certain non-GAAP financial measures. Please refer to yesterday's earnings press release available on our website for a reconciliation of these non-GAAP performance measures to our GAAP financial results. On the call with me today from the company are Chief Executive Officer, John Kite; Chief Operating Officer, Tom McGowan; and Chief Financial Officer, Dan Sink. And now, I would like to turn the call over to John.

Thanks Ashley, good afternoon everyone. We finished the first half of 2017 strong and continue to make solid progress towards our strategic goals. First, I'd like to highlight some of our operational achievements for the second quarter. We generated FFO as defined by NAREIT $0.54 per share. We grew same-store NOI 3.2% during the quarter, which is just above the top-end of our stated guidance. And if you exclude the impact of our 3R initiative, same-store NOI would have been 3.8%. ABR for the retail operating portfolio and redevelopment assets increased to $16.20 at the end of the second quarter. We're nearing our goal of achieving 90% leased from small shops; we finished the quarter at a new high of 89.2%, which is a 90 basis point increase from the same period in the prior year. Our retail property recovery ratio also hit new high at 93.1% reflecting continued tight expense control and success shifting our tenants to fixed CAM. Our strong leasing activity in the second half of last year, allowed us to open 42 tenants in the second quarter examples include Trader Joe's, Morton's Steakhouse, Party City and T-Mobile. We continue to focus our leasing efforts on perspective tenants that provide consumer services, food offerings or otherwise operate experiential businesses. This emphasis was especially evident in the second quarter, with only 1% of the square footage opened in the apparel category. Our leasing team continues to generate profitable new deals and diversify our tenant mix. Our aggregate cash lease spreads for new and renewal leases was 9.8% for the quarter, excluding one large single tenant anchor lease that was renewed at a flat rate, the blended spread was 10.6%. We executed a 164,000 square feet of new leases with tenants that included Skechers, Pet Supplies Plus and Around…

Thank you. [Operator Instructions] Our first question comes from the line of Alexander Goldfarb of Sandler O'Neill.

Hi, good afternoon out there. Hey, how are you? The first question is just on the leasing environment and your expectations for the retailers, so I get the first thing John, as you mentioned one of your nine Payless is closing, as you look around in -- of all the retailers that have announced store closings, but have yet to execute. Is that the only one that you expect or is your view that you guys will be affected by a number of more closings in the back half of the year or heading into 2018?

Well, as it relates specifically to less tenant, payless, I mean we've obviously --

Not specifically to just that but using that as an example, tenants in [indiscernible] that have announced plans to close but haven't yet executed. What's your anticipation for the impact?

I think tenants in general; I mean obviously, we are only half-way through the year Alex. So, I think there is still probably more to come, but I would say based on our discussions with retailers as we mentioned we have been doing a lot of portfolio reviews. And many of the tenants that you people are talking about has challenged, still have pretty good business models and platforms and we think many of those will continue to survive and thrive eventually. I mean some of these guys obviously have to get a smaller footprint to thrive. But, most of that seems to happen. So, it's hard to say exactly but as we sit here today, it feels like the first quarter and second quarter quite a bit happened and as we're looking into the back half of the year, we are going to continue to be conservative. But, I think it feels like it's lined up a little bit. Tom, you want to add?

Okay.

The only thing I would add is, just give you one example of Sienna. We went out to Philadelphia and spent time with them and we have 34 units and really spent time on 17 and 18 and we are confident that we can work through those. So, I think the key is to get both parties to figure out what's best moving forward. And at this point, we feel like our momentum is strong in terms of decreasing the six closures that we may have expected once before.

And then, how much do you think rent concessions will play into whatever the upcoming plans are, or is your view that where the leases are for these tenants that you have ample ability to back from and therefore anyone asking for rent reduction will be I guess sort of shown the door if you will?

Yes. I think you know Alex that these are always on a deal-by-deal basis. But, if you want to look at it from more of a macro view, I think we still believe that, if we have good spaces and we happen to have a tenant in a good space that is not performing, that's more their issue than our issue. So, we would hold the line in that case, if we felt like there was a space that was challenged for a particular reason. We might be more open to something, but as you kind of see from the results, there hasn't been much of that in the way giving discussions. And in the cases where we've said, we can back till the space certain tenants have left. So that's part of our business, it's always been part of our business and it will always be. But, right now it doesn't feel dramatically different than it ever has.

Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of Christine McElroy of Citi.

Hey, good afternoon, guys. Just following up on Alex's first question, given the second half deceleration inherent in your same-store NOI growth range, just trying to get a sense for the bigger factors that you are closer to the bottom versus the top of that range. It sounds like part of it uncertainty around how many more closures you could see, but it sounds like you are also pretty comfortable on that regard. Just trying to get a sense for how conservative the range is today, and if there is upside potential there?

Christine, its Dan. As we look at the balance of the year, we will be impacting the same-store by the tenant bankruptcies as John discussed. But, we have other factors we have a number of tenant openings that will help offset that. So, therefore that's why we tighten the range at this point. So, again, it is -- we still have six months remaining. We do have about 100 basis points of spread between lease versus occupied in the total resell portfolio. So that's why -- that's what gave us the comfort and to tighten the range and we still feel like we have some upside there.

Yes. The only thing I would add to that Christine is I think you are accurate in saying yes, we are halfway through the year, but that's not like being three quarters of the way through the year. So, we are still leaving room for things that we don't necessarily expect. And frankly, if that turns out to be better than what we think then you would see that outperform not under perform.

I think you previously talked about a 100 basis points of reserve for debt for the year, is that still that rate?

That's generally what we start the year out with in terms of our budge. As I think we exceeded that in this quarter. But, we are still kind of -- so, we have added that to where we are for the year and we're kind of assuming that for the back half of the year, we will still be at that 100 basis points.

Okay. So, and then just --

That also kind of times into your previous question from an earning perspective, obviously, we could do a little bit better if that came in better than expected.

Got it. Okay. And then, just lastly -- you had some dispositions, mortgage positions in the quarter. So, just given what you are seeing in today's transaction market, what's your desire to potentially sell more. And what would cause you to be a buyer today?

Well, I think in terms of selling more, we -- this is kind of going to be part of our overall strategy and slowly, but surely continuing to sell properties that we don't think meet the long-term objectives. And then, in the three properties that we sold, fit that bill pretty square on in the sense that each one of them have their individual stories about why but ultimately we just didn't think these were good-term holds. I think there are -- there is a possibility in the current environment that we could sell more. But, there is obviously, we got to believe that we are getting a fair price. And I think that it depends on what we may get approached on and what's happening in each of these particular markets, as it relates to, so that's possibility, but, hard to say right this second. And then as it relate to being a buyer, again cost of capital is a huge part of that. So, we're going to be very mindful of that and I would say that if there is a chance that we sold some other assets, we might be in a 10.31 position, where we want to do some acquisitions for exchange purposes. But, as we sit here right now today to buy something on our own balance sheet at this current cost of capital in the terms of an asset that we would want and an asset that we think we can grow, we'll see, I mean that's a little tougher, but it's possible.

Okay. Thank you.

Thanks.

Our next question comes from the line of Collin Mings of Raymond James.

Hey good afternoon guys. First question from me just, nice pick up there in the small shop leasing, just can you talk a little bit more about what drove that and maybe along those lines, if anything that you have focused more on in context with just the current environment of go ahead and trying to get the, that occupancy rate up?

Sure, I mean, I think we kind of talked about the tenant that we are targeting and a lot of that is in the small shop category, in terms of what we throw around like FF&E, that which would be Food, Fitness & Entertainment. So, we're very focused on making sure that we're getting these experiential users and there not always, often use our smaller tenants. So, I think in the first half of this year, a lot of the deals that we've done have been in those categories. That's one of the nice things about our platform and the type of properties that we own, is that they are very easy to transition into those type of users, it's not complicated. And those type of users always want good access and they always want good visibility, and we always deliver that. So, in terms of that, I'd say that's, something that we're very focused on and, the fact that we own good real estate, we're able to keep driving growth both in occupancy and in rents. Tom you want to add to that?

The other component is, we're really tried to broaden the realm of the different types of tenants that we look at and John mentioned that over. We're really focusing on mix sustainability how we bring the right people in at the right time to these centers down. I think the fact that we broadened our view of various users as really helped us and that's driving that percentage, it's also driving rate and its creating additional leverage for us as we move to those process.

Okay that's helpful guys. I think one other thing I just wanted to touch on, you touched on it seen already, but just broadly recognizing that you touched on a couple of these, but just as far as watchlist, any particular tenants again that you are thinking about in particular and maybe along those lines in contact environment. John, I'm curious you would take Publix your second largest tenant, just what's your sense of Amazon-Whole Foods transaction?

Well in regards to the first part of your question, I mean we generally try to stay away from naming individual names and projecting their decline or something. But bottom-line, I mean there is a universe of tenants right now; it's probably much more heavily weighted to the apparel side of the business that has had real struggles. One of the great things I've mentioned many times is that's just a small exposure for us. So, in terms of other tenants, we feel pretty decent about our list of tenants and we think that most of them are going to perform well. There will still be some in struggle and there will be some struggle, they were not even facing about it right now, but the reality is there is a demand for our product type, due to the fact that there is very, very low supply and there is even lower supply of a quality real estate that we own. As it relate to Publix and Amazon and I guess your comment regarding Amazon buying or I should say preparing to buy Whole Foods. What I think, I view that has situation maybe a little differently, I think they realize they needed to be, if they are going to be in that business, they have to have a physical presence that business is extremely hard to execute. On the delivery side we're perishable, so they buy a company or they are buying a company that has good real estate, well positioned and I think they kind of have to be there, if they are going to really be in that business. Now reality is, is it very, very low margin business, the challenge, but it has a lot of revenue, so if highlight that part of it. As relate to Publix and the other players, everybody is stepping up their game in that business, I think Wal-Mart is doing phenomenal things and frankly I think Amazon is reacting to Wal-Mart not by sourcing. So it will be interesting as this all plays out, but as it relates to very specifically to Publix what, they have a very, very strong position in Florida and throughout the Southeast and it's just a phenomenal company. So, I think that will continue to be very strong.

Thanks John I appreciate the color.

Thanks.

Our next question comes from the line of Craig Schmidt of Bank of America.

Thank you. My question is, what I have to do with the sort the acceleration and the redevelopment, thinking the Rampart. We've heard the various supermarkets are getting more aggressive in terms of opening new stores. I just wonder what the general merchandise anchors are feeling. Are you seeing more interest in, from them to take part in redevelopment projects?

I think, Craig I think, we are, I think if you look at Rampart is kind of a unique asset in the sense of its location and the tenancy, but the tenancy that we have there is not, kind of off-price driven, it's more almost luxury driven, because it's very, very high quality real estate. With Williams Sonoma and Pottery Barn, and you know the fact that we're bringing in two -- many people may not know this, but the SANParks Restaurant Group is a very hot restaurant group and has a very interesting, restaurants within it and that's very exciting to us. So, I would say that, anytime you have good real estate there is a broad spectrum of retailer that we can go to attract. And, we've been pretty successful with that, when you look at, all of the different deals that we've done, we've had a lot of different tenants within them. So Tom, you want to add to that.

I would say right now, we have several boxes. We're working very specifically with grocery players. And we still maintain our position that's great to have the hybrid approach or if you can bring the food offering. And you get the [indiscernible] traffic that's always -- one Rampart maybe an example of location where we have enough demand that would not make sense as a specific use, because leasing momentum strong, but we're working very aggressively with them on multiple sites.

Okay, great. Thank you.

Thank you.

Our next question comes from the line of Carol Kemple of Hilliard Lyons.

Good afternoon.

Hi Carol.

This is a relatively small number in the grand scheme of things, but your over driven was down quite a bit year-over-year, but in the first quarter it was actually up over the first quarter 2016, is there anything specific going on there?

A lot of its just timing, when we get the tenant sales, because we can't accrue the revenue until we're confident over their sales limit. So, we're constantly working with the tenants to get us timely sales reports and really can't book the revenue until we're comfortable that it exceeded the amount and their lease.

Okay. Thank you.

Thank you.

Our next question comes from the line of Chris Lucas of Capital One Securities

Hey, good afternoon everybody. John, just on the contractual Rampart number you mentioned the 1.7 percentage, I just want to make sure I heard, is that for, does that portfolio widen ours that on recently that's what you've averaged?

That is in our same property pool that I'm referring to.

Okay.

And a big portion of that would be driven by the small shop tenants, because that's where we're getting, the significant annual increases Chris.

Okay.

But that really kind of goes back, now it, when, I mean it's applicable, it will eventually be applicable to all of our properties, but it's in the comparable period. So it's in our same-store pool.

Sure. And then, I guess if we were to ask that same question say two years ago, what would that number been roughly?

I mean it was like 1.1% I think 2 or 3 years ago right now.

That's correct.

So, it's come up quite a bit Chris, and you know part, big part of that is just our focus on it. And I think, you know we started talking about that like 3 years ago that…

Right.

We really need a focus on the small shops, people put a lot of emphasis on the box deals. So, we knew that we upside there and so, we put a plan together to drive that and that's been very successful. And we're not going to stop driving, we want that number to keep getting higher and quite frankly the lower and lower quality inventory levels that are out there, we should be able to drive that number.

Great. And then just curious on the conversations you're having on the portfolio reviews with tenants who have indicated they have store closing interest. As you guys think about, over the years in different dealing with different retailers, are the conversations today any different than you would have had couple of years ago, say the office guys or prior kind of cycled situations where tenants were looking to downsize. Is there something different about today or is it basically the same sort of goal which is they are just looking at eliminating non-profitable stores?

I mean, I would say from our perspective, our opinion, it's not tremendously different, maybe the only difference is, but for whatever reason, its people wants to talk about it. So there is a lot of talking heads in this area, but as it relates to our direct contact and working with our customers, it's something that we've always dealt with and tenants always want to get the best deals they can. Now clearly as I mentioned, I'd say that the apparel business has seem to take the brunt of these problems and that unfortunately for us we have a lot going on and, in the other segments. So that we were much more heavily weighted to apparel and probably be a bigger issue. But, I don't think it's that much different Chris, I mean maybe it's a little more emphasized and perhaps more has come about at the same time in the last 18 months. But generally we've always been doing this, and that's why you have move-ins and you have move outs. We opened 40 stores, we probably closed 20, that's just what we did.

The only other chance that I would see is, seems that the retailers really wanting to pair and work more closely with the landlords if they have an oversize box and let's try to figure out together, we'll put out the TI to potentially demise the space, we could maybe do a store of the future, how could we make this work. So it seems like it's a little more collaborative right now, which I think is positive the two sides trying to work together in the event that occurs or comes up in these meetings. But they are very helpful, just to make sure both sides are on the same page.

Okay, great. And then my last question is a small, just it's a small issue, but just kind of curious. On territory portfolio there is a footnote that talks about your partner wanting some redemption of their interest, is the 8.1 that's referenced to your part of the $30 million or is there, are there two separate interest there in that particular JV?

The 8.1 is we moved that from basically the mez equity section to, up into the accrued liability section. So there is two pieces that make up the payment to the territory JV. So, I'm not sure which reg you referenced on the 30 Chris, but there is contractually they have the ability to be partially redeemed in the document. So, they came to us and said they would like to deem these portions of these units and that's why we kind of set it up for the end of the year. So, if you, I look at the numbers specifically and make sure, I can do the math for you if you like to catch up after.

That would be great, and I appreciate it. Thank you. That's all I have. Appreciate it.

Thank you.

Our next question comes from the line of Todd Thomas of KeyBanc Capital Market.

Hi thanks, good afternoon. Just back to the leasing environment a little bit, I'm just wondering if you think that this level of leasing, the rent increases you're getting the volume in general whether there is a sustainable based on - on what you're seeing in the pipeline here today as you look out over the next couple of quarters?

Well, Todd, I mean again tough to project that very accurately. However, I would say when we look at what we're doing right now and the deals that we have rolling over in the balance of the year feels like the inventory is, our levels are pretty acceptable and there is demand for the spaces that we're trying to fill. So that feels pretty decent. I mean we kind of look at this from the perspective of what can we really control and we would look at our renewals, particularly our non-option renewals that's an area that we control and we continue to get double-digit spreads in those non-option renewals. And that's a good judge for us of the health of our portfolio and our customers, because right there is they can walk away or they can do the deal with us. So, if they are staying and paying double-digit increases half the rents we have that's good. So, I would say its - feels pretty decent. Again, you can't really predict what might happen to an individual retailer. But, in general I feel like it's going to sustain pretty much on track?

Okay. And you mentioned some of the categories that are sort of taking space here and that the demand generally broad-based. I'm just curious maybe what the breakout is between National or Regional credit versus low costs, if you looked at this quarter and say last quarter.

I think it's similar. I don't think we generally always have a good balance between -- when we are looking at big box deals obviously they are much more weighted towards national retailers. When you are looking at shops or spaces below $10,000 feet, we have consistently [curve] [ph] had good spread, average maybe 1/3rd type stuff of local players, there would be mom and pop shops, restaurants, then national deals like Starbucks and Panera and guys like that. And then, also the franchise players who are a combination of national footprints with low local operators. And when you look at what we opened in the quarter, I would say we had -- that almost a third of each of those. So that's been our pace for a longtime with small shops that we have that balance. And I think part of it is, that's how we -- that's what we emphasize. We emphasize the balance; we don't want to get completely loaded up in any one particular shopping center on national only retailers. We are trying to bring something interesting that each of these neighborhoods that we are operating in. So, that people want to come to the shopping center. So, I mean, I think that is a big part of what we do and that's why we have been recently successful as we don't just lease to whoever want the lease. Our job is to find a right player for that space. So, we feel pretty strong that we have done a good job here.

Okay. And then, apologies if I have missed this. The Marsh Supermarket that closed in the quarter at Traders Point. I was just wondering if you could speak to the opportunity there to backfill that whether -- what that opportunity is, and you know whether you have any visibility there on in terms of replacing Marsh and maybe what type of tenant you might look for there.

It's a 65,000 square foot store. So, it's a pretty good size box. We are actively engaged in that right now. I think it's probably more likely that the box gets split up, then the box being one user. That's really frankly our desire that's not always the case in deals like that. But, here in this particular property, we think this is a great opportunity to better merchandise that space because this is the big shopping center and we want to bring more choices here. We have a theater and we have some restaurants and we have some really good boxes. So this is a good opportunity for us to spread that out a little bit. We don't want to comment on any names right now, but we're definitely working on deals in that space.

Where do you think their replacement rents are relative to where Marsh was maybe on a blended basis?

It depends on how we split that up, Todd, probably it would be slightly down, if we only split it into two users, it might be up if we split it into three users. It was a pretty good rent. So we've got our work cut out for us there, but I think we think that will be fine in the overall scheme and frankly if we bring in the right users. We might be able to actually get more rent in the surrounding spaces because this tenant wasn't doing any business for years. So, this wasn't helping the tenants around them. So, we are actually happy to be getting the space back.

Okay, great. Thank you.

Thanks.

Our next question comes from the line of Jeff Donnelly of Wells Fargo.

Good afternoon, guys. Just a handful of questions. Just first, on your tenant watchlist, I'm just curious with regard to this, I mean do you think the watchlist you have for tenants today is bigger or smaller as we move into 2018?

I think we are probably more focused on it, right, then we have been historically in terms of expanding the watchlist to tenants that were just kind of really studying their credits and studying whether their PE own. So, and my guess is, this is probably a little bigger Jeff than historically. But, it's also -- we just have a much greater focus on it trying to cut things half at the path. I mean if we can get in front of somebody that we think may have challenges and go to them and say look, we can work with you to take the space back, we rather do that and wait for someone to file bankruptcy.

Do you think that's causing you to maybe underwrite acquisition prospects a little differently, I know apparel is not a huge part of the open-air shopping center business. But, does exist certainly at the anchor level maybe more so than the inline level, and I guess I'm just wondering for example, if a category or [indiscernible] concerned about you sort to see more heavily represented, does that causing you to -- you maybe a [year] [ph] away from more apparel heavy, open air centers or….

Yes. I think -- look, if you are looking at a center and there as you know there are some large open air centers that have a JC Penney or Sears in them or even a Macy's. You are probably going to look at that differently. Now, if you think it's great real estate and you think you got a chance to getting the space back and the aforementioned tenants might only be paying a couple of bucks a foot. Maybe you are doing a turnaround deal. So, I think that's possible, it would be different with the guys that are apparel that are -- that you generally do find in box centers because that's really more stores specific, so we are going to get into the details of that store. It's more the department store players that are mall based that are more company specific issues.

Yes. Understood. On the -- backing the Whole Foods, Amazon topic, I'm just curious, did you hear anything from other retailers whether their grocery competitors or even online retailers, I mean did they have any kind of reaction in the conversations you had with them or is it nothing substantial?

I mean I don't think, we have had anything -- any concerns or anything like that. I mean we have three centers that have Whole Foods in them. And then, in terms of all of our other centers that have grocery stores, look, I just think the grocery space in general, has always been a very competitive space. It's more competitive today than it was probably less about Whole Foods and more about or I should say Amazon and more about Lidl, Aldi and those guys stepping up their game marks, stepping up their game, Kroger. I mean look -- bottom line is Whole Foods had problems and they just -- they continue to have declining same-store numbers and they ran into an issue where they were kind of bifurcating customers in the sense that only a certain number of people would -- could afford to shop in that store and as the other guys raise their game in the organic sector, didn't have to go to two stores. You could only -- you could do it all at one store. So, I think it changed a lot. And we will see. And the other thing is, I know there is a lot of talk about Amazon bringing in all kinds of different products into this store and making it a mini-distribution facility. It's not that simple. I mean all these shopping centers have generally covenants and restrictions and tenants that have protected uses, and you can't just start selling whatever you want. So, I think it's going to be a very interesting thing to watch.

Yes. I agree. And on Publix, they have been an acquirer of some of the centers they occupied down in Florida. I guess, from much have you seen of that, I mean do they sort of paid in prices, is that an opportunity for you to maybe selectively monetize some of your Publix assets to them?

Yes. I think bottom line is they have -- they are continuing to be a big buyer because they generate a huge amount of cash flow. And so that is a good opportunity for us to reposition assets in certain cases. I would say they are market buyer. They are smart guys. They are not just going to go over pay. Now, generally, they probably like to buy centers where their stores do well, or they think they want to expand the store and they rather be controlling the assets and dealing with us. But, it's nice to have another incremental buyer. I mean no doubt about that.

And just one last one. On the financing side, I'm just curious, any sense and how the financing market might have changed in the last six to nine months in terms of its attitude towards power center really kind of SIP center that's non-anchor my grocery is really what I'm thinking versus one that is grocery anchor. Have you seen pricing on that more power center format change in any material way or it's been pretty steady?

I think there was a period of time where -- on the CMBS side of the world there was concerns around some power center deals and loans. But, I would say was probably -- it was really in the CMBS part of the world, meaning, look we just -- on the last three quarters we have sold several assets, four assets I guess in the last three quarters. And we had power centers in there and we had grocery centers in there and those were privately financed. So, I think that there is a market for it. But, I think there might have been some confusion around it in the CMBS side of the world.

Okay. Thank you.

Thanks Jeff.

[Operator Instructions] Our next question comes from the line of Linda Tsai of Barclays.

Yes. Hi. This might be somewhat of an over simplification you might have partially answered this already. But, when you think about store closure is a double-edge sword, on one hand, it's sort of an headache, but also an opportunity. So, all else equal if you take a property that best exemplifies the typical Kite shopping center. What do you think is left that in inline closing or an anchor closing? I mean, I know an anchor closing probably takes more time and money to reposition but also positively impact the character and traffic of the center. So, how do you think about this?

Interesting question Linda. I mean I just gave an example of a box closing in one of our deals that was -- that we were like good. We need to get this tenant out because it's not doing any sales. And but, frankly it's a pain, I mean there is a lot of work involved, and then, there is capital involved. But, it can be long-time gain for short-term pain is how I would look at the box deals. On the small shop side. It's just much more normal day-to-day business. I mean, it is -- there is [no point] [ph] as I said, we opened 40 stores, we closed 20. So, we are always in that business of opening and closing on the small shop side. We don't -- we prefer not to have tenants closed. But, generally there a lot of that is influenced by our desire to get new tenants and either not renew someone or not carry them, if they are not paying their rent et cetera. So, I don't think you can simply say one is kind of more or one is better than the other. There is no doubt that a big box closing will impact you much more because of the size and the percentage of rent that comes form that box. But, on the other hand, you could literally completely turnaround your shopping center and get significant NAV accretion by closing out a weak box. And there is an example of that that probably talk about next quarter in a deal where we are bringing in a very high credit box deal to replace a very low credit box deal and it's awesome. So, it just depends on the situation.

Okay. Thanks. And then, what was temporary tenant fee like in the quarter and under what scenarios are you willing to engage in shorter leases?

Temporary tenant fee is really basically the same -- we are kind of pumping along at the same number we have for the last several quarters, it's a very minor number for us. And our temporary tenants are relying more at -- Halloween and Christmas and times like that. Although, we do have significant -- couple of million dollars a year probably a revenue that we generate on the temporary side. But, against the big backdrop it's not that material.

Okay. Thanks.

Thanks.

Ladies and gentlemen, I'm showing no further questions in the queue. I would like to turn the call back to John Kite for closing remarks.

I just want to take the time to thank everyone for joining us. Look forward to talking to you soon. Bye.

Ladies and gentlemen, this does conclude our conference. You may now disconnect. Everyone have a wonderful day.