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Retail Opportunity Investments Corp
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Welcome to Retail Opportunity Investments 2024 First Quarter Conference Call. rented. Following the company's prepared remarks, the call will be opened for questions. Now I would like to introduce Lauren Silveira, the company's Chief Accounting Officer.
Thank you. Before we begin, please note that certain matters, which we will discuss on today's call are forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and other factors, which can cause actual results to differ significantly from future results that are expressed or implied by such forward-looking statements. Participants should refer to the company's filings with the SEC, including our most recent annual report on Form 10-K to learn more about these risks and other factors. In addition, we will be discussing certain non-GAAP financial results on today's call. Reconciliation of these non-GAAP financial results to GAAP results can be found in the company's quarterly supplemental, which is posted on our website. Now I'll turn the call over to Stuart Tanz, the company's Chief Executive Officer. Stuart?
Thank you, Lauren, and good morning, everyone. Here with Lauren and me today is Michael Haines, our Chief Financial Officer; and Rich Schoebel, our Chief Operating Officer. We are pleased to report that we are off to a solid start thus far in 2024. We continue to make the most of the strong demand for space across our portfolio, especially as it relates to Anchor space. At the start of the year, we had four Anchor spaces that recently became available, an unusual occurrence for us given that we have maintained our Anchor space at 100% leased for the past 7 years. We are pleased to report that we currently have four terrific national tenants lined up to take all of the space and at higher rents. In fact, on a blended basis, we expect the increase in rent will be more than double the previous blended rent. Turning to acquisitions. We recently acquired a terrific grocery-anchored shopping center located here in the San Diego market. The property serves as the primary shopping center anchoring a master planned community that is situated in one of the most sought-after affluent submarkets in San Diego, truly irreplaceable real estate. Through a long-standing off-market relationship, the seller came to us directly seeking to execute a quick transaction. Given that the property is located literally in our backyard, we knew this center extremely well, and we're in a strong position to accommodate an efficient closing. The center features not just 1 but 2 supermarkets, Trader Joe's and Stater Brothers, both of which are generating strong sales numbers and have been thriving at the property for years. In the few short weeks that we've owned the property, we've already leased the available space at the center. Additionally, several of our long-standing tenants, including a grocery tenant has reached out to us to express their interest in leasing space at the center, Safe to say, we're very excited to own this property. In terms of the numbers, we acquired the shopping center for $70 million, equating to a 6.75% cash yield, which is north of 7% on a GAAP basis. Additionally, going forward, over the next couple of years, there are opportunities to release below-market space and remerchandise some in-line space that should grow the yield notably. With respect to dispositions, we currently have two properties under contract to sell totaling $68 million with a blended ex the cap rate in the low 6s. From our perspective, selling these properties and effectively redeploying the capital accretively into an irreplaceable asset, such as our San Diego acquisition enhances the underlying intrinsic value of our overall portfolio as well as our ability to continue growing cash flow in the time ahead. Now I'll turn the call over to Michael Haines, our CFO, to take you through our financial results for the first quarter. Mike?
Thanks, Stuart. During the first quarter, total revenues increased to $85.3 million, in part driven by base rents, which came in higher than our internal forecast and also in part by higher than usual amortization of above and below market rent. As we discussed in our last call, an Anchor lease expired during the first quarter that was substantially below market. which accounted for the bulk of the increase in which we had taken into account with respect to our FFO guidance range for the year. GAAP net income attributable to common shareholders was $11 million for the first quarter of 2024, equating to $0.09 per diluted share. And FFO for the first quarter of 2024 totaled $37.9 million, equating $0.28 per diluted share. In terms of same-center net operating income, during the first quarter, same-center cash NOI increased 5.7%, which was driven by a balance of base rent and recovery increases as well as an increase in other income in connection with our lease recapture initiatives. While the 5.7% increase is above our internal forecast for the first quarter, we remain cautious looking ahead, particularly given the Anchor space re-leasing activity that Stuart spoke of. While we have all of the available Anchor space currently spoken for, there will be some downtime between leases, which is reflected in our same-center NOI guidance range for the full year. Turning to our financing activities. As Stuart indicated, we recently acquired a shopping center for $70 million. While we utilized the credit line to initially fund the acquisition, our objective is to effectively finance the transaction with the proceeds from the pending dispositions, which we expect to close in the next 60 to 90 days. In terms of our balance sheet and financial ratios, net debt to annualized EBITDA was 6.4x for the first quarter, down from 6.7x a year ago. Here at the start of the second quarter, we retired in full a $26 million mortgage. As a result, we currently have only 1 mortgage loan remaining for $34 million, meaning that 93 of our 94 shopping centers are currently unencumbered and this last mortgage matures in about 18 months from now. Looking ahead, with respect to refinancing the bonds that mature at the end of the year, we continue to watch the market closely and are in a position to move forward opportunistically when market conditions become more subtle than favorable. Now I'll turn the call over to Rich Schoebel, our COO. Rich?
Thanks, Mike. As Stuart highlighted, demand for space across our portfolio continues to be strong. During the first quarter, we signed 87 leases totaling over 383,000 square feet, the bulk of which centered around renewing valued Anchor Tenants. Specifically, during the first quarter, we renewed 7 Anchor tenants totaling 207,000 square feet, three of which were actually not scheduled to mature until next year. All three of those tenants came to us early with two of the tenants seeking to renew their lease for another 5 years and one of them, a long-standing grocery tenant seeking to renew their lease for another 10 years. As we noted on our last call, 4 Anchor spaces recently became available totaling 179,000 square feet. And as Stuart noted, we currently have new national tenants lined up to lease the spaces, all of which will be a terrific new strong draw to our centers. Additionally, all 4 leases will have 10-year initial lease terms and all at higher REMS. We are currently in the process of finalizing the lease agreements. Once the leases are executed, we expect to deliver the spaces expeditiously as there is only a limited amount of prep work required on our part. With respect to Non-Anchor, in-line space, demand also continues to be strong. During the first quarter, we signed Non-Anchor leases totaling 176,000 square feet. And as with our Anchor leasing activity, our in-line leasing activity centered around tenant renewals with a good number of TIM also coming to us early to renew. In terms of re-leasing rent growth, we posted another solid quarter, achieving a 12% increase on new leases signed during the first quarter and a 7% increase on renewals. While our first quarter leasing volume was among one of our most active first quarters on record, we are poised to potentially have an even stronger second quarter. In addition to the Anchor leases that we are finalizing, our Non-Anchor leasing pipeline is very strong as well, being driven by a diverse mix of necessity, service and destination tenants that are seeking to implement expansion plans across core West Coast markets. Lastly, in terms of getting new tenants open, we continue to make steady progress. During the first quarter, new tenants representing $1.4 million of incremental annual base rent on a cash basis opened and commenced paying rent. Additionally, new leases signed during the first quarter added just over $1 million of incremental annual base rent. Accordingly, at March 31, we had approximately $6.7 million in total of incremental annual base rent from new tenants not yet open, the bulk of which we expect will do so as we move through the year. Now I'll turn the call back over to Stuart.
Thanks, Rich. In terms of the acquisition market and the current state of play, the recent renewed concerns regarding inflation, along with the corresponding rise in interest rates has yet again caused market activity to pause on the West Coast as a number of buyers have quickly moved back to the sidelines. We think that this could potentially work to our advantage as the year progresses, especially as it relates to off-market opportunities that could arise involving private owners facing looming mortgage maturities. With this in mind, we continue to be proactively engaged and continue to have proactive discussions with our off-market sources. Lastly, I would like to briefly expand on Rich's remarks regarding tenant renewals. From our perspective, tenants consistently come to us early, both Anchor and Non-Anchor tenants to renew their leases for another 5 to 10 years out in the face of uncertain economy, we think speaks volumes as to the continued growing appeal of the grocery-anchored sector in general and specifically speak to the attributes of our portfolio. It's also indicative of the underlying strength and stability of our core tenant base and their business prospects going forward. Furthermore, following the pandemic, tenants have since shifted to being more guarded and carefully selecting the communities and shopping centers in which to expand their businesses. Needless to say, we've worked hard to capitalize on this shift, which is reflected in our consistently strong leasing results year after year and is what drives our disciplined acquisition strategy. Looking ahead, we believe that our properties are well positioned today with their location attributes, compelling demographics and strong grocery daily necessity focus to continue being among the top sought-after shopping centers of choice on the West Coast by these valued discerning tenants. Now we will open up the call for your questions. Operator?
Our first question comes from Jeffrey Spector with Bank of America Securities.
Stuart, I'm sorry if I missed this. Did you comment on your expectations for net acquisitions this year? Are you still in the range of $100 million to $300 million?
Yes, we are. We are -- although the acquisition market is currently paused, things can change very quickly. But yes, the answer is yes. We're still on tap to look at external growth in that range.
Okay. Great. And then can you elaborate a bit more on the comments on 2Q? And I think Mike commented on expectations on 2Q leasing to be stronger. We're seeing in some other sectors where companies are slowing leasing decisions. So, I found that remark to be very interesting.
Sure. This is Rich. As we mentioned, we've got these tenants lined up for the Anchor spaces and the demand for the shop space continues to be very strong. We're receiving multiple LOIs on the shop space and on the Anchor space. The leasing team, while it is still taking a touch longer to get to the signature still has a lot of demand for all the available space.
Great. So, no evidence of any slowdown in leasing discussions.
No.
And then my last, I guess, can you comment a little bit more around the senior notes coming due in December, the thinking there? And is there a certain trigger that would push you to execute sooner than later?
I would just say, Jeff, it's just basically market conditions. I'm not -- obviously, the 10-year has ticked up quite a bit recently, and that's obviously not favorable for us, but it seems to move around quite a bit. So, the good news is we've got a little bit of time before the end of the year, and we'll look to transact probably in the -- obviously, the back half probably in the third quarter like we did last year.
And our next question comes from Todd Thomas with KeyBanc Capital Markets.
Stuart, maybe Mike, I just wanted to follow up first on the net investment guidance of $100 million to $300 million, you're roughly net neutral year-to-date, assuming that dispositions close in the next 60 to 90 days. I mean, how would you -- how should we think about funding future investments? I think the previous guidance assumes $60 million to $180 million of equity issuance. Is that still on tap? I'm just curious sort of vis-a-vis your comments that buyers and sellers have moved back to the sideline and transaction activity may slow a bit and sort of how you're thinking about the capital markets within all of that.
Sure. Well, I mean, look, we're certainly not issuing equity where our stock is currently trading. So, we will accelerate continue to look at accelerating the disposition side to help pay for more acquisitions or for more growth as we move through the year. And subject to market conditions, if the stock does move up accordingly, and we can continue to buy it accretively, then we'll look to the equity market as well, but primarily being funded through dispositions more than anything else, Todd.
Okay. And then, Stuart, you mentioned roughly doubling the rent on the vacant Anchor GLA. How much CapEx is estimated as it pertains to those leases. I wasn't sure if that was on a net effective basis. And then can you provide some sense of timing around when rent may commence assuming all the leases are executed as anticipated?
Yes. I mean, look, that -- it's basically -- from a CapEx perspective on all the Anchor leases, you're looking at $75 to $100. Our comment is around on a net basis in terms of doubling the rent. So as an example, the one big lease we're on is actually with an increase that's over 300%. But after CapEx, as you heard in the comments, to double the rent. So, we're expecting, again, as Rich touched on, all -- and actually, one of the leases has already been executed, but the balance to be executed during the quarter. Delivery should take place within probably depending on how much work what rich.
Yes, we're thinking it's probably 9 months in terms of fit-out. As we mentioned in the comments, the spaces are basically in deliverable condition. But obviously, the tenants will have to do some work to fit out the space for their needs.
But I mean I think from a rent investment, probably early '25. You may capture some of this late '24, but early '25.
Got it. And some of this will be same space, some of this will not. Is that right?
Would the whole thing. It's all single base.
The old same space.
Correct.
Got it. So we should see -- as leases are executed sort of next quarter, perhaps third quarter, we'll see that reflected in the comp leasing activity?
That is correct.
Okay. And then last question, just on the same-store in the quarter, Mike. Expenses were down, recovery income was higher. I suspect that was -- that dynamic is what drove sort of the growth, the higher growth relative to budget in the quarter that I think you mentioned. But I wasn't sure if that had something to do with either some of the Anchor spaces that were recaptured that were maybe paying a lower share of their expenses, but occupancy was down a little bit, just unsure what happened there, if you could maybe talk about that and what to expect in terms of the expense recovery rate going forward.
Actually, the same store, I think it was just a combination of a variety of things. The lower bad debt this year, lower decreased operating expenses, higher base rent. It's just a myriad of a number of things at variables. It came in stronger than we expected, obviously, same center moves around each quarter, sometimes fairly significantly. But again, looking at the full year, we're still being cautious about the 1% to 2% hopefully, at the higher end, particularly given the Anchor spaces we just spoke of.
Our next question comes from Juan Sanabria with BMO Capital Markets.
Just hoping you could talk a little bit about the latest thoughts on [indiscernible]. I think they've increased their store closure count and maybe there's some maybe delays or hesitation there and some back and forth in the market that they may pursue Chapter 7. So just curious on what the plan would be if that were to eventuate with Rite Aid?
Well, yes, obviously, as you're touching on there, there's a bit of uncertainty about the final outcome of the Rite Aid situation. We have reached agreements with Rite Aid on all the remaining locations, extending the terms on most of those. And we are hopeful that, that plan will get approved. But in the event that it doesn't, the demand for our space continues to be very strong. And as we touched on with the spaces we did get back, they were spoken for very quickly. So, while we're hoping that the plan gets approved, we're also prepared to capitalize on the opportunity if it doesn't.
And what's the closure at this point? And what would be prospective in terms of what you need to release once those stores close based on the current plan as it stands now?
Well, if you look at what's in the pipeline in terms of leasing, that would be the current locations that they gave up.
Yes, we started out with 15 Rite Aids. Three of those were rejected. We did sign agreements on the remaining 12. They've recently announced some additional closures. One of our stores was on that list. It's not an Anchor space. And the day after it was listed, the adjacent grocer called us about expanding. So again, we feel that there's still a lot of demand for these spaces. And while we would rather not get them back, we're prepared to get them back, and we've already got our ducks in a row and our leasing team is focused on talking to the potential tenants in the event that, that happens.
Okay. And then how much NOI, I guess, would go away temporarily on the Anchor spaces that -- you've spoken for and released, but just thinking about the cadence of same-store NOI growth and what those acre leases mean to your forecast for the rest of the year, just so from a modeling perspective, we can capture that appropriately?
Juan, are you referring to the three that we got back already and have released but not in a
Yes.
We didn't model anything for those spaces in the 24 same-store NOI or FFO. So there's nothing in the numbers for that.
And Mike will get back just in terms of the number, if that's what you're looking for.
Yes, how much was in the first quarter just to make sure that we're capturing whatever the sequential drop-off may or may not be, but we can follow up offline.
In Q1, there was nothing in our numbers for the three Rite Aid spaces.
And then lastly, was there any sort of comp issue with regards to expenses going back to Todd's question on the same-store NOI that may have positively impacted the year-over-year results there that we should kind of think about going forward?
Nothing. I know last year we had some snow revival costs over accelerated a bit. Outside of that, nothing I can think of no specific item.
One moment for our next question. Our next question comes from Craig Mailman with Citi.
Yes. So just a follow-up on the Anchor leases. Were you guys able to kind of start to put through any better escalators in these deals? Or as you guys get early renewals, is that in the conversation now with some of these Anchor tenants? Or is it still kind of more of the minimal bots relative to what you're getting in SHOP?
Well, on the one Anchor big Anchor vacancy, we were able to get more term than usual from the tenant and probably even higher rent because this particular tenant needed the space extremely badly. It's a new concept and one that they need to get rolled out very quickly. So we sort of had the upper hand there in terms of negotiation. The balance of those spaces, Rich, just in terms of the ordinary what you would ordinarily see from these tenants?
Yes. I think the ongoing increases is sort of the historic, which is for an Anchor tenant every 5 years, 10% to 12%. And for our shop space, we're still around 3% annually.
Okay. And this new concept, is it kind of grocery? Is it new to the U.S. or just new to your markets? What kind of what's the credit profile look like?
Very, very, very strong. They're already in the U.S. in a pretty big way. But this is a brand-new concept that has proven to be a lot more profitable than their current inventory of stores.
And then just on the acquisition. I know you guys got a couple of questions on this already. But just from what was the initial guidance from a timing and kind of spread perspective relative to your cost of capital, can you just give us a sense of what that was as a contribution to the range? And what -- and so how much sensitivity there is if the acquisition market remains a little bit stalled here and things get pushed out to year end? Like how much of guidance that risk just from the acquisition piece?
So, Mike, we modeled, if I recall, I think it's $25 million out per quarter or a bit more than that.
Our initial guidance was $100 million to $300 million. So is really going to depend on the equity market as far as availability for equity capital. And right now, we're churning our capital to support the acquisition side. So, it's going to depend on how the market kind of evolves over the course of the year. Obviously, if rates make a change in favor, then REITs typically respond very positively. So that could impact our stock price would make it more accretive to use that as a funding source.
But we're modeling around about a 6.5 cash yield typically.
On the acquisitions or is that the cost of capital?
No, on the acquisitions.
Okay. And what would be the cost of kind of the capital you're putting out there?
I think on a blend depending where the equity price is. And again, if we're going to -- the acquisition guidance is going to have to come down a smart doesn't become more favorable for us. So, it just depends. We kept the guys in place because as Sur mentioned earlier in the prepared remarks, like things can change very quickly in the markets, as you know. So we're just kind of keeping guidance as it is for now. We'll have to revisit that on the next call.
Yes. Craig, I mean the most important thing is, as we are buying is to make sure that it's accretive to our current cost of capital. That's the critical point from a modeling perspective. So, the good news is the acquisition that we made in the fourth quarter of last year as well as in what we've just bought, we believe, is being done accretively day one.
Okay. I was just trying to get at if there's enough things operationally that may be going better than expected either bad debt or lease commencement timing that could offset if you have to lower the acquisition guidance or if that lower acquisition guidance will be a net negative for the range, I guess, is an easier way to put it.
Yes. I mean, obviously, we can't predict the future as we're sitting here this morning, but we feel pretty comfortable on both sides of that equation. I'll leave it at that, Craig.
We'll move for our next question. And our next question comes from Wes Golladay with Baird.
Just going back to the same-store guidance, it looks like a lot of items went favorable. Occupancy the lease rate was down quite a bit, but the base rents were up. Is there anything onetime related such as the term income? And where is the percent rent income now?
Percentage rent gives us such a significant number in the grand scheme. We've rolled it up into rental revenue. So -- it's kind of in base rent. It's just -- it wasn't meaningful enough to continue breaking it out relative to the total revenue number. So that's where that sits now. And as far as the guidance, like I mentioned earlier, it moves around from quarter-to-quarter. There was nothing -- in the terms of the quarter that was unusual, I think there's just a number of positive effects. -- base rent was up. Bad debt was down but other income was relatively flat to up. So, there was no onetime drivers on a cash basis that I can think of.
Okay. And then where could you borrow today if you had to issue debt? And does the cost of debt increase your willingness to do something strategic before the year-end? -- if it were to stay at current levels.
Based on where the 10-year treasury sits today and current market spreads, it's going to be somewhere around 6, 6.5%. And we'll have to see where that -- where the market goes for the balance of the year. The eyes are all on the Fed. And as far as the timing of our first-rate cutter indication of rate cut, that's going to drive some of the decision-making in that regard.
Okay. And if it were to stay at that 6.5% level, though, how would you approach that? Would you issue long-term debt? Would you maybe look to do a joint venture, more dispositions? What would the thought process be?
We're looking at all alternatives from that perspective, West. So, the good news is we have some flexibility. We've been focused on these alternatives, obviously, but nothing to talk about on this call today.
Okay. And then can we get your latest thoughts on the Albertsons, Kroger merger if they were to have to sell more assets? Any negative benefits or potential positives would they have to pay you at fees or if they had to sell some of your assets or sell some of the groceries that were part of your portfolio?
Well, I mean, look, we continue to communicate with Kroger and Albert and Conduct business as usual, including renewing one of their leases in the current quarter in the first quarter of the year. Obviously, it's the discussions with the government are still ongoing and they're not yet in a position to disclose what specific stores are going to be sold as part of the merger. I think that's still moving around. So, we haven't spoken with CNS, but it's tough today to sort of tell you whether it's a negative or positive. What I can tell you is this, last time we went through this in 2015 with Haggen, it turned out to be a very positive step for the company. So, we'll see what happens as we get through the summer here, and that's sort of where things sit as of the merger on our call, having our call today.
Our next question comes from Cesar Bronco with Wells Fargo Securities.
Very good questions asked earlier. But I guess going back to the Anchors that vacated as we think about your occupancy going forward, like would you expect some more Anchor turnover sort of like the one that happened this quarter? Or would you expect more stability going forward?
So, for the balance of 2024, there's two Anchor leases remaining that will expire this year. One of those is a Rite Aid, where we have reached an agreement to extend it for another 5 years. The other is a 17,000 square foot space that matures in the fall. And that tenant has notified as they're leaving. So we're in the process of re-tending that space and hope to have a tenant lined up before they vacate.
Got it. And how will that be with respect to small shop? Would you see any sort of potential move-outs that could impact your overall occupancy from the small shop?
No. Small shop is sitting at about 96% right now. We expect that will be the range for the balance of the year.
Okay. Got it. And then quickly on the amortization of leases. Like was that jump in this quarter? Was that related to, I would guess, the Anchors that vacated during the quarter?
Yes. It was the one anchor in Q1, yes, that left that didn't yes, expired basically. It was one Anchor.
Yes. Probably will normalize sort of on a go-forward basis. Is that a fair.
That to the prior year. That's more of the typical like $2.5 million is the [indiscernible] run rate.
Got it. One more quick one. With respect to the other guidance items that you provided in last call, like bad debt reserve, interest expense, G&A, like will there -- are there any changes to those numbers? Or would you expect those to be the same?
I would expect those to be the same. Yes. As we move through the year, I mean, so we just put that guidance out 8, 9 weeks ago, it was kind of early premature. I don't see any changes in those yet. But if there is anything that causes that to move, we'll provide updated guidance in the next call.
Okay. Got it.
Our next question comes from Paulina Rojas Schmidt with Green Street.
You mentioned sellers moving back to the sidelines. And I was wondering if you could provide some color on how you have seen potential buyers behave. And I'm thinking in particular about institutional investors in shopping centers. And if you have seen any pickup in interest in this cycle as a result of other property types, apartments, office facing weakening fundamentals?
Yes. I mean, look, I can't really comment on other property types because that's not our focus or our specialty. But in terms of shopping centers, in the first quarter of the year, the buyers, when interest rates were lower than they were today, it did look like there were a number of buyers coming back to market. But as I said in my comments, over the last several weeks as interest rates moved quite higher or moved higher quite rapidly. We have seen a number of these buyers, again, move to the sidelines. So going forward, it will just depend on interest rates, capital flows. I don't see many institutional institutions coming back into the market yet. 10 31 market is active. And then there has been some shift from other sectors to retail from a buyer profile perspective. But I think maybe that's really where your question was going. We have seen buyers that we're very heavily invested in industrial, multifamily, certainly move to the retail side, where today, they feel I think that their investment is in a different place. in terms of the cash flow and stability of the NOI. But more importantly, retail, given the strength that we're seeing out there has attracted more of these other buyers.
Thank you -- you got it. And then a question about the balance sheet. Your average debt maturity is the shortest or the second short is in the strip center space. So, I was wondering if you have the goal to increase that average maturity and what level would make you comfortable or if you're comfortable where you are?
Thanks, Paulina, it's Mike. I think when we go back to the bond market, we'll look to do a 10-year deal. We did the deal last September on a 5-year because we were -- everything us, like everyone else was expecting rates to start coming down. It is -- the market is where it is, and then when we come back to the market later this year, the goal is to do a 10-year fixed rate offering, which will push the maturity or extend that mature data out. And as we move through our debt refinancing stack, we'll be looking to do long-term fixed-rate bonds on a 10-year basis.
[Operator Instructions]. Our next question comes from Michael Mueller with JPMorgan.
Two quick ones here. I guess what made the two disposition properties, properties that weren't long-term holds. And I may have missed it, but did you mention the types of users that you have for those for new Anchor leases?
Well, the Anchor leases are national players. And in one location, we broke up the space to two regional players. In terms of the dispositions.
Yes. I mean, primarily, there -- one is a single-tenant property and the other is a property that we've actually owned for quite some time. We've completed a lot of lease-up of the property, bringing in some really strong tenants. And it's just one that we don't see a lot of future growth in. So from our perspective, it was time to sell it.
Got it. Okay. Yes.
I'm showing no further questions at this time. I would now like to turn it back to Stuart Tanz, Chief Executive Officer, for closing remarks.
Great. Well, in close and thanks to all of you for joining us today. As always, we appreciate your interest in ROIC. If you have any additional questions, please contact Mike, Rich or me directly. Also, you can find additional information in the company's quarterly supplemental package, which is posted on our website as well as our 10-Q. Lastly, for those of you who are attending the upcoming annual ICSC convention in Vegas, please stop by our booth, which will be in the South Hall on Level 1, specifically booth 807. We hope to see you there. Thanks again, and have a great day, everyone.
This concludes today's conference call. Thank you for participating. You may now disconnect.