Boardwalk Real Estate Investment Trust

TSX:BEI.UN

Earnings Call Transcript 2019-Q4

[Operator]

Good morning, ladies and gentlemen, and welcome to the Boardwalk Real Estate Investment Trust fourth quarter results conference call. [Operator Instructions] Also note, the call is being recorded today, Friday, February 28, 2020. And I would like to turn the conference over to James Ha. Please go ahead, sir.

[James Ha, Vice President of Finance & Investor Relations]

Thank you, Sylvie, and welcome to the Boardwalk REIT 2019 Fourth Quarter Results Conference Call. With me here today is Sam Kolias, Chief Executive Officer; Rob Geremia, President; William Wong, Chief Financial Officer; Lisa Russell, Senior Vice President of Corporate Development; and Lisa Smandych, Chief Accounting Officer. Note that this call is being broadly disseminated by way of webcast. If you have not done so already, please visit bwalk.com/investors, where you will find a link to today's presentation as well as PDF files of the Trust's financial statements, MD&A and supplemental information package.Starting on Slide 2, we'd like to remind our listeners that certain statements in this call and presentation may be considered forward-looking statements. All of the expectations set forth in such statements are based on reasonable assumptions. Boardwalk's future operation and its actual performance may differ materially from those in any forward-looking statements. Information that could cause actual results to differ materially from these statements are detailed in Boardwalk's publicly filed documents.At the conclusion of today's presentation, we will be opening up the phone lines for questions. I'd like to now turn the call over to Sam Kolias.

[Sam Kolias, Chairman & CEO]

Thank you, James, and thank you, everyone, for joining us this morning. Starting on Slide 3. We are pleased to continue building on our track record with our seventh consecutive quarter of growth in FFO per unit, delivering 16.7% growth in FFO per unit for the fourth quarter. Rental market fundamentals in our core Alberta markets continued to improve, and our team continues to deliver exceptional product quality, service and experience.Slide 4 provides a summary of our results with total FFO and AFFO growth of 17.5% and 20.9% for the fourth quarter resulting in 16.8% and 20.1% growth for fiscal 2019, respectively.Looking into our same-property portfolio performance, our NOI grew by 11.6% for the quarter with 4.3% revenue growth and a decrease in expenses of 4%. For the 12 months of 2019, our NOI grew 8.2%, highlighted by revenue growth of 4.1% and a decrease in our operating expenses of 0.9%.Moving on to Slide 5. Boardwalk offers an exceptional combination of growth and value. Boardwalk's focus on delivering strong NOI growth has resulted in strong growth in FFO per unit. The Trust's current IFRS net asset value of $63.72 is significantly higher than our current unit trading price presenting an exceptional opportunity for our investor.Boardwalk's high-quality overall portfolio equates to approximately $162,000 per apartment door at our current unit price. Recent transactions in Calgary and Edmonton have averaged over $200,000 a door. Furthermore, replacement costs are significantly higher than these apartment trading prices. Our exceptional value provides for a unique opportunity for our partners and stakeholders as we continue to focus in on delivering solid growth.Slide 6, we illustrate current rental market fundamentals for each of the markets where we operate. Boardwalk strives to create value through all stages of the rental market cycle. Approximately 60% of Boardwalk's portfolio is in Alberta where rental market fundamentals continue to improve and are moving towards a balanced state in our core markets of Edmonton and Calgary.Major refining, upgrading and oil transportation investments were made earlier in the year along with the continued construction work on the Trans Mountain pipeline as well as the upcoming operation of the Canadian section of Enbridge's Line 3 pipeline. The Alberta economy continues to diversify, along with increased international migration continuing to increase the population and demand of housing. Changes by the provincial government to decrease corporate taxes will also create a more favorable investment environment in the province.The Royal Bank expects employment growth to nearly double to 1.1% in 2020 from 0.6% in 2019. Grande Prairie has already seen benefits from an improved economy and continues to move into a strong rental market, almost fully occupied with a strong demand for rentals. Fort McMurray remains in a soft rental market. Red Deer continues to see improvement as a result of our successful value-add investment in this region. For the fourth quarter, Edmonton rail market fundamentals continued to improve, and stabilized NOI growth jumped ahead of Calgary for the 3- and 12-month periods.Our focus on a carrying peak performance culture, along with significant value-add capital investment, continues to deliver significant gains in NOI. Our value-add lessons learned in our Calgary market are helping us better allocate value-add investments into all our other markets, in particular, in our larger Edmonton market. Our Saskatchewan region continues to remain in a softer rental market with green shoots of higher occupancy, revenue and recent quarter NOI increase, particularly in Saskatoon, which is entering into a more balanced market.We continue to focus in on gaining market share with targeted value-add capital improvements and increasing our operating efficiency, which should continue to provide a positive NOI growth into the foreseeable future. Ontario and Quebec represent over 25% of Boardwalk's portfolio with both provinces showing strong performance.Ontario continues to deliver solid results with market rents increasing and vacancies decreasing. We have increased our value-add investment in our portfolio here to further enhance returns with strong demand in London and Kitchener and to better position and compete with any new future supply. Quebec rental market fundamentals have improved. Boardwalk's Nun's Island portfolio in Montreal is nearly fully occupied and is reflected in our sequential revenue for the last quarter, which has increased 1.3%.Moving on to Slide 7. Alberta continues to see high population growth, reflecting a world-class standard of living and multidecade high affordability. Calgary was, in fact, ranked the world's fifth most livable city by the Economist Intelligence Unit, ranking almost a perfect score in stability, health care, culture and environment, education and infrastructure.Job growth continues to reflect a diversifying economy with one of the highest average weekly earnings in Canada. CMHC forecast improving rental market fundamentals. Our newly elected government is working hard to attract top talent to our province by offering more accessible visas for foreign students, targeting top U.S. university graduates as well as creating an attractive tax environment for health, biotech and start-up firms.Slide 8 shows our strategy of reengineering our corporate culture and performance-driven team to deliver the best product, service and experience, building on our brand.Reflecting on 2019, our team is proud of the accomplishments we have made. We have delivered strong organic growth, accomplished brand and product diversification by repositioning and renovating 16% of our common areas in 2019 as well as one lifestyle repositioning in Edmonton. We continue to high grade and geographically diversify, continued focus on a solid financial foundation and lastly, delivering on strong unitholder value with a 2019 total return of over 25%. With our team, we are confident we can continue to build on this in 2020, and we'll provide our outlook at the end of this presentation.I'd like to now turn the call over to Roberto Geremia.

[Roberto A. Geremia, President]

Thanks, Sam. Moving on to Slide 9. Boardwalk continues to target 4% to 8% increases on new and renewing leases in our nonrent control markets of Alberta and Saskatchewan. As it's shown on Slide 9, our reported results are in line with our seasonal expectations. For 2019, the Trust achieved an average of 4% increases on new leases and 6% increases on lease renewals. For our rent control markets where we are subject to legislative increases, we target above guideline increases where applicable and to date have been very successful in achieving these.As is shown on Slide 10, all key revenue metrics continued the positive trend. Total revenues continued to increase as it has been for the past consecutive 8 quarters and with the high -- continued high occupancy levels, we are able to increase overall occupied rents while decreasing incentives and on lowering vacancy loss.Slide 11 shows Boardwalk's quarterly sequential revenue growth. Current quarter's results continue the overall trend of positive hostings. The Trust's fourth quarter reported sequential revenue growth of 0.8%.Slide 12 shows more detail on Boardwalk's stabilized portfolio. For Q4 2019, the Trust's stabilized portfolio posted NOI growth in excess of 11%, on revenue growth of 4.3% and costs being reduced by 4%. Boardwalk's Alberta portfolio NOI growth was up over 15% lead -- led all regions. Also of note, Saskatchewan posted over 10.6% NOI growth for the current quarter. On a year-to-date basis, our stabilized portfolio reported revenue growth of 4.1% and NOI growth in excess of 8.2%.Boardwalk continues to target its value-added investment program to enhance the overall experience offered to our resident members. As we continue to selectively invest back into our communities, we are constantly exploring for ways to deliver these programs in more efficient and cost-effective ways.Slide 13 shows our overall progress in our value-added strategic investment program. Since commencing our current program in 2017, we have upgraded approximately 18% of our suites. The renovation level is different by brand and community and is driven mainly by demand. Over the last few years, we have seen a material shift toward lower suite cost investments with an increased focus on improved amenity and common area for this for our communities. At the end of December, we have completed approximately 24% of our amenity and common area upgrades. And as we always have, we are constantly looking to deliver these investment programs in more efficient and cost-effective ways.Slide 14 is an example of our strategic value-added program. Lansdowne Park is a 62-unit apartment complex in Edmonton, Alberta. At this community, we upgraded the leasing office and the lobby with a strategic investment of $30,000. Upon completion of this investment, we adjusted market rents just by $10 per month for each unit. Based on our past experience with this type of investment, we are anticipating a stabilized return well in double digits.I'd like to turn the call over to Lisa Russell now who will update you on our development program. Lisa?

[Elizabeth A. Russell]

Thank you, Rob. Slide 15 provides an update on Brio, a premium mixed-use development in Calgary. We are proud to have received our occupancy permit and have taken possession of the property as of February 21. We are in the final stages of fixturing and setting up the experience center, common areas, show suites, fitness center and amenity areas. We plan to host a grand opening and have our first resident members move in on April 1, 2020.Boardwalk's initial marketing of the project has been well received, and we anticipate lease-up to progress over the next 12 months. Our estimated stabilized yield for the project ranges from 4% to 5% with anticipated rental rate of $2.45 to $2.75 per square foot. Stabilized product of this caliber currently trade at cap rates below 4% in Calgary.Slide 16 provides a brief update on our other active development projects. Construction at 45 Railroad, which is located in Brampton, Ontario, is progressing well. Underground construction is ongoing and we anticipate the project to be at grade in Q3 of 2020. Estimated completion of this 2-tower, 365-unit development remains planned for 2022 and 2023, respectively.Sandalwood Square in Mississauga, Ontario is our second joint venture partnership with RioCan. Our initial zoning application for our 16- and 25-story mixed-use development was received positively and the partnership is currently working with the municipality to finalize zoning. Anticipated potential construction is planned for 2021. The timing of Boardwalk's current development projects are well staggered to best balance our resources.Our planned development in the Peel Region provide an attractive entry into the GTA, where market fundamentals remained strong, allowing Boardwalk to enter high-growth undersupplied markets providing continued progress towards our long-term strategic plan. Further information on each of these developments as well as our previously announced high-grading acquisition and noncore sales in 2019 can be found in our appendix of this presentation.I would now like to turn the call over to William Wong.

[William Wong, Chief Financial Officer]

Thank you, Lisa. Boardwalk continues to maintain a strong financial position. Slide 17 highlights Boardwalk's liquidity position at the end of the year defined here as cash on hand, committed up financing subsequent to December 31 plus the Trust's line of credits. Boardwalk's liquidity of approximately $258 million represents 9% of the Trust's total debt. Debt net of cash was 47% of December 31 reported asset value.The next slide, Slide 18, highlights Boardwalk's mortgage maturity schedule and interest service coverage. Overall weighted average interest at the end of the year was 2.74%. Approximately 99% of our mortgages are CMHC insured, which are backed by the Government of Canada and enjoy advantageous interest rates on renewal. Based on the rolling 4-quarter basis, interest rate coverage improved to 2.76 compared to 2.74 at the end of Q3 and 2.68x at the end of 2018.Slide 19 shows Boardwalk's mortgage program completed for the 2019 year and summarizing our upcoming mortgage maturities for 2020. In 2019, the Trust renewed approximately $519 million of matured or maturing mortgages at a weighted average interest rate of 3% while extending the term maturity to 8 years. In addition, Boardwalk paid off one $2.6 million mortgage upon maturity.In 2020, approximately $318 million of mortgages are set to mature with a weighted average interest rate of 2.52%. To date, we have renewed or forward-locked $41 million at a new weighted average interest rate of 2.35% for an average term of 8 years. Boardwalk has also added $23 million of up financing in the process. Current 5- and 10-year CMHC interest rates are approximately 2.3% and 2.4%, respectively.Next slide shows Boardwalk's announced distribution for the next 3 months. Continuing with its strategy of capital allocation optimization for February, March and April record dates, Boardwalk is maintaining its distribution of $0.0834 per Trust unit, which equates to an annualized basis of $1 per Trust unit.I would now like to turn the presentation back to Sam.

[Sam Kolias, Chairman & CEO]

Thank you, William. We have entered 2020 on solid footing and well positioned to continue to deliver solid results and returns to our stakeholders by taking a similar approach as we did in the successful 2019. In addition, we are layering exciting new initiatives to further drive and improve on our product, quality service and experience we are providing to all our resident members while also delivering solid financial results for our stakeholders.Slide 21 provides a couple of examples of this. Boardwalk is proud to launch, in partnership with Yuhu, a new online resident member portal to all of our resident members. This new portal will provide more self-service options to our residents, allowing for direct online payments, online maintenance request, a real-time chat feature, amenity bookings and much more. By creating more optionality in the way our residents experienced their homes, the Trust believes that further efficiency and 24/7 self-service can be gained while also creating new resident friendly forms of communication.Additionally, Boardwalk has had great success in Alberta, partnering and selling Boardwalk exclusively priced Internet and TV services. This program began in our Alberta portfolio in Q2 of 2019 and has been strong penetration to date. The Trust estimates that once fully stabilized, the Trust NOI will improve by 200 to 400 basis points in Alberta. Looking forward, the Trust is excited to begin expanding on this service across its portfolio.The core values of our foundations have always supported a focus on our environment, social responsibility and our governance from our sustainable self-regulation since 1999 and our energy-efficient use of fixtures, appliances and building envelopes to reduce our carbon footprint and save on our energy costs.Slide 22 provides a summary of the Boardwalk ESG initiatives. We are proud that Boardwalk's Golden Foundation in which we have always operated aligns well with modern day ESG. We are excited to launch our inaugural ESG report along with our 2019 annual report in the coming weeks.Looking forward into 2020, on Slide 23, the Trust anticipates a continued positive trend of stabilized property NOI growth. This growth is expected to be tempered by upward pressure in certain uncontrollable operating expenses such as property taxes, insurance and utilities. Boardwalk 2020 stabilized NOI growth is expected to range between 4% to 7%, FFO per unit results to range between $2.65 to $2.80 and AFFO per unit results to range between $2.25 to $2.40 per Trust unit, excluding onetime nonrecurring retirement costs we are anticipating in the second quarter of 2020.Additionally, the Trust expects to invest between $175.2 million to $194 million in capital investment in 2020. The Trust reviews its financial guidance regularly and will provide updates on a quarterly basis. We'd especially like to recognize both Roberto Geremia and William Wong for the 26 and 18 years of inspiring service respectfully and together, building a strong foundation and well-mentored team for an even brighter future we have as a result of their significant contribution. We will forever be grateful. We wish both Rob and William health, love, peace, joy and abundance in their future.We'd now like to open the phone lines for questions. Sylvie?

[Operator]

[Operator Instructions] And the first question will be from Brendon Abrams at Canaccord Genuity.

[Brendon Abrams, Analyst of Real Estate]

Just I'm wondering if you could provide some guidance for property taxes for 2020, specifically in Alberta. I know there's been a few changes in Edmonton and Calgary. So I'm just wondering if you had any color there.

[James Ha, Vice President of Finance & Investor Relations]

Brendon, it's James here. You're absolutely right. And as Sam pointed out, one of the headwinds that we have coming into 2020 is uncontrollable expenses and one of those is property taxes, especially here in Alberta. So when we look at Calgary and Edmonton, the dynamic that we're seeing is increased assessed values for purpose-built rental combined with flat to slightly down assessments for single-family homes.The net result of that is purpose-built rental is taking a bigger portion of the residential property tax pool, and that dynamic is happening for both Edmonton and Calgary. When we look into Calgary, there's a second dynamic that's -- that we're going to see where -- we're seeing a property tax shift from city council, potentially moving more of the tax burden from commercial towards residential.The net effect of that, we're looking at mid- to high single-digit increases in Edmonton and potentially double-digit increases in Calgary. Sadly, I mean that's one of the expense line items that we do. As everybody knows, we actively negotiate and work with City Council and work with the assessment departments to negotiate our assessments. But structurally, in Calgary, sadly, there's potentially some significant changes that are going to have a negative impact on our property tax expense this year.

[Roberto A. Geremia, President]

Brendon, it's Rob. And just to add onto James point, I think he's 100% right. There's upward pressure there. We're doing our best to look at our controllable costs to ensure we maintain those and look at downward pressure on those as well too. So we're trying to balance off some of that. We don't know if we can do it fully, but we're sure working hard at it.

[James Ha, Vice President of Finance & Investor Relations]

But we really have to commend our industry leaders, Calgary Apartment Association with all other Calgary apartment providers that are having great discussions with the city of Calgary. And there's already been some flexibility and we've already realized less increases than what originally was contemplated.And so we're very pleased with the friendly discussions we're having with our municipal, civil servants and our Calgary Apartment Association and all Calgary apartment providers. So we're very happy in the efforts we're all making to control our uncontrollable through friendly discussions.

[Brendon Abrams, Analyst of Real Estate]

Great. Okay. Yes, that's very helpful. Just taking a look at the loss to lease calculation in the MD&A. And it looks like Quebec and Ontario, fairly significant mark-to-market opportunities, $9 million and $14 million, respectively. I'm just wondering if you could remind us again what your turnover is in your portfolio for those 2 markets just to get a sense of how quickly you might be able to capture that.

[Roberto A. Geremia, President]

Brendon, it's Rob. Ontario has actually decreased our turnover. We're down to about 14% from 17% the year before and Quebec is staying about the same. So we're able -- we're being a little more aggressive in the Quebec market to be able -- and plus on -- but in both of those markets, particularly in Ontario, we've been extremely successful in getting above guideline average increases. We've actually won most of the ones we went into to get increase as close to 5%. In some cases, higher than that, but you have to balance it off as there is a maximum you can give every year on those.Challenge we're having, to be honest, is we have a lot of backlog files with the Ontario system there to be able to get approved, but the good news is when they're approved, we were -- they understand that we are -- have increasing costs, we've invested capital back into our properties and they understand the expectation of getting return.

[Brendon Abrams, Analyst of Real Estate]

Great. Okay. And then just last question before I turn it over. And Sam, I don't want to get you in trouble here necessarily. But I mean we had the Frontier decision by Teck Resources earlier this week, deciding not to go ahead with the project given kind of the political and regulatory uncertainty. I just -- from a business owner perspective, CEO perspective, maybe just your views on the investment climate there and kind of the sentiment in Alberta right now?

[Sam Kolias, Chairman & CEO]

We're seeing record diversification. As we have seen historically, in any kind of resource down cycle, our economy gets more diversified, very similar to what happened in Denver and even in Texas. And so there's always a silver cloud to -- a silver lining to every cloud and diversification is definitely one positive.We're seeing more sustainable growth as a result as well. And we've got a city -- both major cities of Calgary and Edmonton, much, much bigger than historically they were in the '80s. And so there's an urbanization ratchet effect that urban economists have discovered many, many decades ago.When a city gets to a certain size, it experiences what's called the ratchet effect. And that's, as a result, why we continue to grow. And we're seeing market share growth as a result of our brand diversification. We're moving ahead and we're gaining ground in every effort that we're doing. And so we're all about figuring out what to do with the chips that we have to play with. And we really can't thank our team enough for the innovation, the thinking outside the box and the blood, sweat and tears that we're all pouring out to deliver exceptional performance in a really, really tough economy.What happens in a better economy is pretty obvious. And when the resource sector does turnaround because we continue to consume fossils, and as it's necessary as a bridge to a more sustainable and renewable energy future, when that happens and when further diversification kicks in, we'll see even better results and we'll be extremely well positioned with the best team and culture and brand that we've ever, ever had. So we're moving ahead with or without Teck.

[Operator]

[Operator Instructions] And your next question will be from Mario Saric at Scotiabank.

[Mario Saric, Analyst]

Just focusing on the guidance, the 4% to 7% same-store NOI guidance. Are you able to break that down between same-store revenue and same-store expense growth?

[Roberto A. Geremia, President]

Historically, again, our strategy on the revenue side, Mario, was 4% to 8% on renewals and new leases. So I'd probably argue that it's fair to reasonably to say it was roughly 4.5% revenue top line growth and then again, obviously, the difference coming due on the expense side. But again, we are really working hard on the controllable expenses that -- which represent about 50% of total expenses in place.So we are very optimistic that we're going to be able to do better than we think. But we do know, and as James really highlight, there's going to be upward pressure on property taxes. Utility is not as much. The more upward pressure there is going to be on the new -- the carbon tax has been replaced back in Alberta. So we don't see massive growth there, but there will be upward pressure. That will get you down to roughly the range we're looking at.

[Mario Saric, Analyst]

Got it. So it still sounds like you're expecting a bit of margin expansion?

[Roberto A. Geremia, President]

Yes, we are anticipating continued margin expansion with -- because our revenue numbers are going to grow faster than our expense numbers are.

[Mario Saric, Analyst]

Okay. So just on the revenue numbers. I'm just trying to get a sense of your confidence. In those figures, the WTI is almost down 30%. I guess I haven't checked in the last 5 minutes in terms of what's happened, but down quite a bit this year. So does -- like, how does the sudden drop in the oil price kind of impact your confidence or your ability to shave off the 0.5 month to 1 month of incentives per year?

[Sam Kolias, Chairman & CEO]

The history is really clear. In a really tough economic environment, there's a real increased demand for affordable housing. And we're certainly seeing that and have been seeing that over the last several years. And so we have seen a market share growth as a result of a flight to affordability.And so we continue to experience that, along with more stringent mortgage qualification rules. And we've had amazing January and February rental months. We've rented far more rentals in the middle of frigid January, which will have revenue effects in February, and we're renting way more move-outs than move-outs in February, which will have positive revenue numbers in March. And so we're seeing very strong response in January and February to rentals, and we're really encouraged as a result of the rentals that we're currently seeing.We're very well positioned as a result for a strong seasonal spring, that's typical. And we're seeing occupancy rise in the middle of winter, which is a reflection of that. Again, phenomenal performance that our team -- again, we can't thank our team enough for the innovation and the blood, sweat and tears and the value-add repositioning and the brand diversification.And we've got a lot of choices and we can compete with everybody in the marketplace, especially with the brand-new product, too, that we've introduced with our Brio and our partner, RioCan, in the Northwest. Really exciting, brand-new product, a very unique product, larger unit sizes, and it's a lot different than the brand-new product that was recently introduced in that area. And so we're already having great response from that.And renting is back in because of the flexibility that consumers need. Because of the uncertainty, the last thing that an uncertain individual needs is a fixed mortgage and location that's very expensive to move if there is a change in job. And that's still a big reason why we're doing so well in gaining market share in this marketplace.New migrants as well, Mario, are another big source of new renters. When new Albertan or Canadian comes in, they typically rent. And so we're seeing good response and demand from migrants, and we're working very close with the communities that are welcoming new Albertans and Canadians to be on top of their list as to where to live.

[Mario Saric, Analyst]

Okay. Your 4% to 8%, given kind of the commentary on the brand and the evolution of the brand and stealing market share, because of it, that 4% to 8%, what would your kind of best estimate be of what you expect the market -- the overall market to do?

[Sam Kolias, Chairman & CEO]

You know what, in God we trust, everybody else bring data. Padmapper.com, it's pretty well flat. The data -- and CMHC pretty well flat to slightly positive. So we're way ahead by hundreds of basis points on the market. And you know what, great service, product quality and experience always win, always. It's a timeless prudent strategy for every business.

[Mario Saric, Analyst]

Okay. My last question just pertains to Slide 21 of the deck and the TELUS relationship in terms of incremental revenue coming from the Internet, TV venture. The 200 to 400 basis points of incremental NOI, is that -- are you saying that is on top of the total Alberta NOI delivered in 2019? Like the $170 million collectively, are you saying that the upside potential is 2% to 4% of the $170 million over time? And how much of that -- if so how much of that would be baked into your 2020 guidance?

[James Ha, Vice President of Finance & Investor Relations]

Mario, it's James here. That's correct. So we've -- as you saw on the slide, we actually started this program back in March of 2019 and we've had fantastic success with it. So we've seen some of the benefits of it in 2019. Obviously, once we get to March, April, we would have had a full year of turning all of our residents onto the program. On the $170 million, you're absolutely right. So that's 200 to 400 basis point swing as a result of the program onto that $170 million. Now we expect that to be fully stabilized for 2021.

[Mario Saric, Analyst]

Sorry, for 2021?

[James Ha, Vice President of Finance & Investor Relations]

Correct, yes. Yes, there is some benefit here in 2020, likely on the lower end of that range. But once we get into 2021, we believe we can be -- or strive to meet the top end of that 200 to 400 basis point range for Alberta NOI.

[Mario Saric, Analyst]

That's great. And I just wanted to take the opportunity to wish Rob and William well in their next stage. Congratulations.

[Roberto A. Geremia, President]

Thanks, Mario.

[William Wong, Chief Financial Officer]

Thank you very much.

[Sam Kolias, Chairman & CEO]

Thank you, Mario.

[Operator]

[Operator Instructions] And at this time, Mr. Ha, we have no other questions. I would like to turn the call back to you, sir.

[James Ha, Vice President of Finance & Investor Relations]

We would like to end this call by thanking our amazing team, loyal residents and all our stakeholders. We are pleased with the improving rental market fundamentals, the exceptional value we continue to provide our residents, our investors and for the continued great service from our team.We would again like to thank both Roberto Geremia and William Wong for their invaluable contribution where we will forever be grateful. Thank you again, everyone, for joining us this morning and God bless.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Have yourselves a great weekend.