Chatham Lodging Trust Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 6, 2024

Key Takeaways

  • Positive Sentiment: Beat consensus estimates by delivering 2% RevPAR growth, a nearly 20% increase in other operating profit, and generating $8.3 M in free cash flow, up 10% year-over-year.
  • Positive Sentiment: Realized 17% RevPAR growth at its five tech-driven hotels, driving occupancy up 1,200 basis points to 67%—the highest since 2019—and outperforming Hilton and Marriott benchmarks.
  • Positive Sentiment: Extended momentum into April with overall RevPAR up 5% year-over-year (+4% vs. 2019), including 12% growth at tech hotels and 3.6% growth at all other properties.
  • Positive Sentiment: Sold the Hilton Garden Inn Denver Tech at a ~4% cap rate and plans $40–$100 M in further asset disposals to fund higher-RevPAR, higher-margin acquisitions in stronger markets.
  • Positive Sentiment: Maintained its strongest balance sheet in over a decade (LTV < 25%, net debt/EBITDA ~ 4x) and bolstered pro forma liquidity to $382 M—exceeding $281 M of near-term debt maturities.
AI Generated. May Contain Errors.
Earnings Conference Call
Chatham Lodging Trust Q1 2024
00:00 / 00:00

There are 8 speakers on the call.

Operator

Welcome to Chatham Lodging Trust First Quarter 20 24 Financial Results. This time, all participants are in listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

Operator

At this time, I will turn the conference over to Chris Daly, President of DG Public Relations. Chris, you may now begin.

Speaker 1

Thank you, Rob. Good morning, everyone, and welcome to the Chatham Lodging Trust Q1 2024 results conference call. Please note that many of our comments today are considered forward looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10 ks and other SEC filings. All information in this call is as of May 6, 2024, unless otherwise noted, and the company undertakes no obligation to update any forward looking statement.

Speaker 1

You can form the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to GAAP financial measures referenced on this call on our website at www.chathamlodgingtrust.com. Now to provide you with some insight into Chatham's 2024 Q1 results, allow me to introduce Jeff Fisher, Chairman, President and Chief Executive Officer Dennis Craven, Executive Vice President and Chief Operating Officer and Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff?

Speaker 2

Thanks, Chris, and I certainly appreciate everyone joining us this Monday morning for our call. As you know, we beat 1st quarter consensus estimates as we combined RevPAR growth of 2%, together with an almost 20% increase in our other operating profit line and property tax refunds on a couple of our California hotels. We generated free cash flow of $8,300,000 in the quarter, up 10% over the 2023 Q1. From an asset management perspective, we're laser focused on driving free cash flow any way we can, whether that's by revenue or market share, increasing flow through or enhancing ancillary operating profits. And in the Q1, we drove other departmental profits up almost 20% as we increased parking rates in certain markets and enhanced our retail market operation product offerings and pricing.

Speaker 2

The year over year increase added a penny of FFO to our Q1 performance. The RevPAR increase of 2% was split evenly between occupancy and ADR and was substantially greater than industry performance above Hilton's North American performance and right in line with Marriott's performance. Generating RevPAR growth and outperformance despite the bad weather in February and the shift of the Easter from April last year into March this year is noteworthy. Our RevPAR was boosted by RevPAR growth of 17% at our 5 tech hotels in Silicon Valley and Bellevue and we saw occupancy gain 1200 basis points at these hotels to 67%, by far the highest level since 2019. Excluding the 5 tech driven hotels, 1st quarter RevPAR was down 1%, but still up over 2019 levels by 3%.

Speaker 2

Even better news is the strength we're seeing in April with RevPAR up 5% over 2023 and up 4% over 2019 levels with tech hotel RevPAR up 12% in April and RevPAR for all hotels excluding those same 5 tech hotels in April was up 3.6%. Tech hotel occupancy finished at 73%, only 400 basis points off the 2019 levels, more encouraging news on the surging demand out there. April RevPAR growth beats most peers that have reported and supports our thesis that we should continue to outperform the and most of our peers in 2024 due to surging demand in our primarily tech driven hotels. Within Silicon Valley, we're confident that the corporate demand growth we saw in the Q1 in April will continue. Additionally, tech companies are moving forward with their intern programs.

Speaker 2

This year, many of the companies are providing a stipend to each intern to cover room and meals and the intern can choose where to stay. We're already seeing some intern bookings not at the level as prior years, but as we talked about in February, something we did not have last year and obviously compression boosts occupancy and overall RevPAR results. Mountain View was our strongest market in the quarter, up 19% as we saw meaningful gains in business travel, specifically from our top accounts here, such as Google, Broadcom and Sure Fox, market demand growth has been upper single digits and long term, the market sets up well for us as new supply is 0. RevPAR at our 2 Sunnyvale Hotels gained 12% in the quarter and this market too is showing good underlying fundamentals. Demand is up 13% and future supply is up 1%.

Speaker 2

We're seeing corporate demand from our top accounts, Apple, Google, Intuitive Surgical and Applied Materials and specifically from the start of construction at the big epic center with the garage getting going and that as we've talked about many times should be very beneficial for these 2 hotels over the next few years. And has recovered more than the 3 other Silicon Valley and has recovered more than the 3 other Silicon Valley hotels. One aspect to that story is that recently the 476 room Marriott San Mateo permanently closed its stores, which will increase Marriott system demand in the market and we should see some increased production here as well. During the quarter, we sold the Hilton Garden Inn Denver Tech for $18,000,000 and including deferred renovation costs, the hotel was sold for an approximate 4 cap on 2023 NOI. We intend to continue to opportunistically sell some hotels this year with the goal of redeploying those proceeds into higher RevPAR and higher growth hotels and markets.

Speaker 2

Typical sales targets are going to be hotels with absolute RevPAR and lower absolute RevPAR and margins and probably hotels that are older that need some upcoming CapEx or regular cycle renovations. We're targeting sales proceeds of $40,000,000 to $100,000,000 continuing to sell these types of hotels while buying, as I said, higher growth, higher RevPAR and higher margin hotels will enhance shareholder value and cash flow. With respect to hotel investments, we are seeing more deal volume and we hope to have an acquisition announced this quarter. Acquisition targets are coming from developers looking to recycle their own capital as well as owners who are facing some meaningful risk risk related to refinancing and the effects they are from. As we all know, the levels of CMBS debt maturing in 20 24 and 20 25 is pretty staggering for the industry and should provide additional opportunities for well capitalized owners like us with the capacity to buy.

Speaker 2

I want to switch gears to address our capital structure as it's been a critically important focus for us over the last few quarters especially. At quarter end, we were at the lowest leverage levels in over a decade with leverage ratio under 25% and a net debt to EBITDA ratio are very healthy 4 times. Subsequent to the end of the quarter, we further enhanced our financial strength, raising $50,000,000 via increased borrowings under our term loan. We currently have 25 hotels that are unencumbered. Over the past few years through a combination of asset sales, free cash flow and the issuance of common and preferred equity, we repositioned our balance sheet to handle the meaningful tranche of maturing debt this year, debt that dates back to 2014 during one of Chatham's highest growth phases since our IPO.

Speaker 2

We are well capitalized to repay all maturing debt this year. In April, we repaid the $29,000,000 maturing mortgage on the residence in Anaheim, and we have $255,000,000 maturing in July. Let me tell you, it's great to put this overhang behind us because we've heard about this for some time from analysts and investors, and I'm proud of the work our team's been doing on this front, and I'm sure our investors will share my sentiment, Including our $260,000,000 credit facility and our upsized $140,000,000 term loan, we have a $400,000,000 of floating rate debt exposure that will allow us to benefit from what should be a declining interest rate environment in the future. So in conclusion, we remain confident that Chatham is well positioned to outperform most peers as we have the most internal growth upside, we think, of most other lodging REITs, especially within our tech hotels. The remainder of our portfolio is performing well.

Speaker 2

New supply is less than 1% across our submarkets and our balance sheet is in great shape to be opportunistic on the transaction front. With that, I'd like to turn it over to Dennis.

Speaker 3

Thanks, Jeff. Within our tech markets, in addition to Silicon Valley, our residents in Bellevue has been thriving this year with RevPAR growth of 40% in the quarter, and that's almost entirely due to occupancy growth of 37%. Demand growth was almost 20% in the Bellevue market as we are seeing acceleration in all business travel segments. Our standard retail segment, which is BT, room demand was up over 1800 room nights or approximately 42% and special corporate, meaning our key corporate accounts was up over 1800 room nights or 55%. Amazon, Microsoft, Accenture and ByteDance or TikTok, all of which are historically top accounts for us generated over 1500 room nights in the quarter and demand from Meta and Toyota is surging as we look forward 60 days.

Speaker 3

In November, Amazon opened a portion of the Sonic building in Bellevue welcoming more than 1,000 employees and intends to double its Bellevue workforce from 10,000 to 20,000 employees over the next couple of years. ByteDance has also expanded its office presence in Bellevue with 2 new office leases and with supply projected below 1% in the Bellevue market, this corporate expansion is very good news for the hotel and for us and it's going to help us continue to outperform. Some additional RevPAR tidbits from the quarter. Our Q1 RevPAR was not impacted by any renovation impact as we had 3 hotels with renovation disruption in each of the 1st quarters of 'twenty three and 'twenty four. 1st quarter weekday occupancy was the highest since 2019 and for the first time since the pandemic, 1st quarter weekday occupancy outpaced weekend occupancy.

Speaker 3

Deployments, we continue to monitor San Francisco's airport saw international passenger traffic surpass 2019 levels in February March for the first time since 2020. Total domestic traffic into SFO is up approximately 3%. At SeaTac, international deployments are up approximately 15% through February and domestic is up about 1%. We're seeing most of that inbound inbound travel is generally coming from the Asia region. Outside of our tech driven markets, our 7 primarily leisure oriented hotels that comprise approximately 19% of our Q1 room revenue saw RevPAR increased 1% year over year.

Speaker 3

Top gainers were Anaheim and Portland, and on the downside, our worst performers were Destin and Savannah. Weekday and weekend occupancy were approximately 70% for each of those periods with weekday ADR of $173 outpacing weekend RevPAR of $163 and that $10 gap compares to a $4 gap in the Q1 last year. Our top 5 RevPAR hotels were led by the Residence Inn Fort Lauderdale with RevPAR of 2.73 dollars which was flat to last year, our Residence Inn San Diego Gaslamp at 195 dollars despite being under renovation and then followed by our Residence Inn Mountain View at $158 and our Residence Inn Washington DC and White Plains, New York both with RevPAR of $154 At our 38 comparable hotels, GOP margins were down 120 basis points with the majority of that attributable to labor and benefits, which adversely impacted margins by 110 basis points. On a CPOR basis, these costs were up approximately 6% year over year. Labor costs, which are by far our largest expenses, have stabilized over the past 9 months or 3 quarters.

Speaker 3

Our first quarter average essentially unchanged from our 2023 3rd and 4th quarter hourly wages. Our employee headcount remains about 20% below pre pandemic levels, and we are not experiencing really any labor supply shortfalls around our markets. Thankfully, as we've talked about for a few quarters now, our margin comps will become easier after the second quarter as we are still ramping up housekeeping and other brand required expenses in the first half of twenty twenty three. Our top 5 producers of GOP in the quarter were led by our Gaslamp Residence Inn, the 2,500,000, the 9th straight quarter it's led our portfolio, followed by our tech heavy Sunnyvale 2 Residence Inn with a $1,500,000 of GOP and third was our Residence Inn Fort Lauderdale and rounding out the top 5 were our Courtyard Dallas Downtown and our Embassy Suites Springfield, which managed to reach our top 5 despite being under renovation for most of the quarter. Importantly, looking into Hotel GOP at our 5 tech driven hotels, Hotel GOP of $5,300,000 was up a strong 22% over the 2023 Q1.

Speaker 3

GOP margins for the 5 hotels were up 110 basis points and GOP at a residence in Bellevue was up approximately 80%. Tech hotel EBITDA was up almost $1,000,000 or over 25%. So again, encouraging trends coming out of these markets. As we previously disclosed, if we get back to 2019 EBITDA levels, respect to capital expenditures, we spent approximately $10,000,000 in the quarter and still expect to spend about $37,000,000 in 2024. During the quarter, we completed renovations at our Hilton Garden Inn Marina del Rey, our Homewood Suites in San Antonio, our Hyatt Place Cherry Creek and lastly, our Embassy Suites in Springfield, Virginia.

Speaker 3

We have no renovations planned for the Q2. With that, I'll turn it over to Jeremy.

Speaker 4

Thanks, Dennis. Good morning, everyone. Our Q1 2023 hotel EBITDA was 21,000,000 dollars adjusted EBITDA was $18,900,000 and adjusted FFO per share was 0 point 38.6 percent and hotel EBITDA margin of 30.8 percent in Q1. While our Q1 GOP margin was 120 basis points from our Q1 2023 margin, we are seeing a stabilization of most of the large cost increases that we saw in the second half of last year. Our Q1 hotel EBITDA margin increased 10 basis points versus Q1 2023 due to approximately $800,000 of property tax refunds received Q1 of this year.

Speaker 4

Our balance sheet remains in excellent condition and we have made significant progress on our plan to address debt maturities. In January 2024, we completed the sale of the HGI Denver Tech for approximately $18,000,000 which including expected renovation costs of approximately $6,000,000 represents an EBITDA multiple of 20.5 times and a cap rate of 3.8%. Our cash balance at the end of Q1 was $72,300,000 which together with $50,000,000 of incremental proceeds raised through an add on to our unsecured term loan that we closed last week provide a pro form a quarter end cash balance of $122,300,000 With a pro form a cash balance of $122,300,000 $260,000,000 of undrawn availability under our revolving line of credit, our pro form a total liquidity of $382,000,000 exceeds the $281,000,000 of remaining debt outstanding at March 31st that matures in Q2 and Q3 by over $100,000,000 We are in the process of executing $60,000,000 of CMBS financings, which will further reduce the revolving credit facility utilization required to address our remaining debt maturities. We expect these CMBS financings to close in the next month and have rates in the 7% to 7.25% area. As of March 31, Chatham's net debt to LTM EBITDA was 4 times, which is significantly below our pre pandemic leverage, which is generally in the 5.5 to 6 times area, despite the fact that EBITDA has not fully recovered to pre pandemic levels.

Speaker 4

Turning to guidance for Q2, we expect RevPAR growth of 2.5% to 4%, adjusted EBITDA of $28,700,000 to 30 point adjusted FFO per share of $0.33 to 0 point $7,700,000 reflects the $50,000,000 term loan add on we completed in early May and assume $60,000,000 of CMBS issuance in the second half of May. We expect Q2 interest income of approximately $700,000 2nd quarter interest expense and interest income do not represent run rates for Q3 and Q4 as our cash balances are much higher in May June due to the borrowing of money in May to fund the July debt maturities. With respect to hotel EBITDA margins, in general, we expect year over year margin comparisons to be much easier starting in Q3 as we begin to lap the fuller staffing levels and other costs that were not completely reflected until the second half of last year. Year over year EBITDA margin comparisons in Q2 twenty twenty four are impacted by approximately $1,200,000 of one time benefits that positively impacted margins in Q2 of 2023. This concludes my portion of the call.

Speaker 4

Operator, please open the line for questions.

Operator

Thank you. We'll now be conducting a question and answer session. And our first question today comes from the line of Aryeh Klein with BMO Capital Markets. Please proceed with your questions.

Speaker 5

Thanks and good morning.

Speaker 6

Can you

Speaker 5

provide a little more color on the weekend occupancy dynamics and what you think might be driving that? And is there an element of consumer softness that you're seeing where lower end consumer seems to be feeling a little more pressure these days?

Speaker 3

Hey, Ari, this is Dennis. Yes, I mean, listen, I think for the first time in a while, I think Q1 week end occupancy was about the same as week day, but it was down as you noted 200 basis points, really driven by Savanna and Destin. And I think, listen, I think consistent with what you've heard from other hotel owners, if you had exposure in certain parts of what I would call Florida or other high leisure markets that really spiked in 2021 2022 from the pandemic, those have seen a little bit of a pullback. And I think as we've talked about really now for over a year is that we believed and expected that the leisure markets would soften. And as you started to see finally people getting back into the office and working and eventually transitioning that leisure oriented travel to be more business travel.

Speaker 3

And I think that's essentially what we saw. If you look at 7 hotels, I think we talked about Destin and Savannah were the worst. But really outside of that, we had a good mix. Anaheim was up 15%, Pittsburgh was up 11%, Portland up 11%, Portsmouth, New Hampshire down 4%, and Fort Lauderdale was up 1%. So, I think it's really just specific to where those leisure hotels are.

Speaker 3

But again, kind of not surprising.

Speaker 5

Got it. And then just you talked a little bit about what you're doing on the other revenues, things like parking to enhance kind of growth and profit. What's the incremental opportunity that you still see there?

Speaker 3

Yes, mean, listen, I think we put out some pretty broad increases in March of this year on the parking front. Certain hotels, we're tweaking our initiatives to include what I would kind of refer to as surge pricing. So for example, you have a Taylor Swift concert over multiple days, people are there for 5 or 6 days. You typically charge $10 a night for parking. Well, most parking lots, most parking structures around there are changing their pricing when you have big time citywide events or something like that.

Speaker 3

And from a hotel perspective, we should do more of that also. So it's being a little more nimble, it's being a little more active in looking at demand within the market from really a lodging perspective and saying, hey, can we continue to move parking revenue higher. The other side is on the retail front, which is where we spent some time over the past 6 to 12 months really trying to focus on our product offerings within our market, making sure we've got the stuff primarily if you're really thinking about it, quick grab stuff and especially beer, wine and some jurisdictions liquor to be able to not only offer more of it, but look at the pricing of it as well. So we still have some runway there.

Speaker 5

Understood. And then just on the tech interns and the flexibility that companies are providing out there. Do you think that that's the new normal? And do you have a sense of the size of the intern program this year relative

Speaker 3

to what they were previously? Well, there was essentially no interns last year. So, it's going to be well up from last year. I think you're probably, as we kind of sit here today, intern levels are less than what they were in 2019, just in terms of the overall programs. Having said that, the stipend program is something I think, listen, there's many different types of accommodations in those Airbnb's and lodging, so and corporate housing.

Speaker 3

By providing that flexibility, it's giving a little bit more control to the intern. Those by the way, just to clarify, those have always been there. So, as I talked about in our prepared remarks and as we mentioned it back in February, any compression from these intern programs, whether it's at our hotel or in the other offerings, ultimately is something that was not there last year and should benefit the entire market as we move forward into the summer into the programs. But all the companies regular discussions with those.

Speaker 2

Of course, this is Jeff. The change means again a lack of visibility on our part relative to the quantity overall. So we're not being coy here. We know the business will be there. We know the markets will be up.

Speaker 2

They are up substantially as you've heard. But if you're not able to negotiate directly with those companies like we have in the past, then we just have to attract those folks from compared to the different sources they've got.

Speaker 5

Thank you. Appreciate all the color.

Operator

Our next question is from the line of Bryan Maher with B. Riley Securities. Please proceed with your question.

Speaker 7

Thank you and good morning. Just a couple for me today. Maybe for Jeremy or Dennis, on the cost pressures, can you tell us kind of where you're seeing the most and the least relief in those categories?

Speaker 3

Yes. I mean, listen, I think, surprisingly, I think as I've talked about in our prepared remarks, staffing is really not much of an issue across most of our markets. I think we've obviously heard a lot of things going on in California with respect to fast food minimum wages. That really hasn't impacted us at all out in those markets. There really aren't a whole lot of what I would call large scale cost increases that we sit here and are worried about at the moment.

Speaker 3

If you look at our P and L corporate real estate taxes, just from a pure comparable basis. And thankfully, we benefited from some refunds in the Q1. But in general, if you look at our largest increases expenses, it's really probably real estate taxes and property insurance. Health insurance. Yes.

Speaker 3

I mean, and that was the last thing I was going to talk about, which is health insurance just continues to be a pain in everyone's. But with it seems like every year there's double digit increases.

Speaker 4

And on the positive side for utilities, we're starting to see costs actually come down year over year there. So it should be a little help.

Speaker 7

Do you expect any more tax refunds that move the needle at all? Or is that pretty much behind you?

Speaker 4

We don't expect anything, but we're constantly appealing assessments. So you never know. I mean, we've reflected everything

Speaker 7

we should be expecting more capital recycling with dispositions and likely acquisitions over the next, let's say, 6 to 18 months than we've seen in a little while. Can you tell me and maybe for Jeff, what are the criteria that you're looking for kind of the most, maybe kind of 1, 2 and 3 on the list of markets that you want to enter? Is it migration? Is it business growth? What is it in a market that you're looking for?

Speaker 2

Thanks. I think, yes, just to kind of buttress what you're saying. We were very encouraged by the ability to sell that Denver Tech Hotel at the number we did. We were encouraged by relatively high number of bidders that were on the deal. So that really caused us to take a real hard look at our 10 year CapEx plan, the cycle renos and other renovations that would be coming up, age of hotels and of course the world's different since COVID.

Speaker 2

There are markets that were very strong that just are either slow to recover or we don't think really have a lot more upside left in them. Those are hotels that we're going to sell. And we want to be in markets where the population growth is strong. Anytime we bought a hotel or developed a hotel in a market where population growth was strong, business growth was strong because that's still the core of what we do around here. As you know, I mean 80% of these hotels are business trends and related or corporate hotels that shows you the strength that we're having this year so far.

Speaker 2

And that will be our focus for hotels that we try to acquire. They should be 10 years old or less for the most part. And we do see some deals that are brand new deals where some developers need to take care of some maturities or recycle their own capital for some other hotels they may have under construction around the country. There's still a few folks out there that have some older pipelines, older meaning deals that already are underway as we all know there's not a ton of brand new deals getting started. And we see that as a decent source of acquisitions also.

Speaker 7

Okay. Thank you.

Operator

Thank you. The next question is from the line of Tyler Batory with Oppenheimer. Please proceed with your question.

Speaker 6

Good morning. This is Jonathan on for Tyler. Thanks for taking our questions. First one for me is on RevPAR in April, obviously very strong. Can you provide some additional color on that strength, how that number came in maybe versus your expectations and kind of the puts and takes that impacted the month with Easter shifting out and Passover standing alone?

Speaker 6

Thanks.

Speaker 3

Yes, this is Dennis. I think, listen, it starts with our tech hotels with RevPAR up essentially 12% in April for those 5 hotels. That obviously is a strong performer. But I think in general, we saw kind of some encouraging trends across our portfolio outside of what I would call again the leisure markets more BT driven. Washington DC has performed very well for us.

Speaker 3

We've got 3 hotels in that area as we talked about. The Embassy Suites there did really well despite being under renovation for most of the quarter. And our New York suburban hotels also showed some pretty good growth. So it's really starts with the tech hotels and just continues with just overall demand strength from the BT Business Traveler. And that's I think what we're hopeful that we continue to see as Jeff talked about, we do have the booking window is very low or very short at the moment and it's hard to go out there with a pretty aggressive number.

Speaker 3

So we're encouraged by what we saw in April, especially on the weekday travel front. And I think if we can see the same thing here in May as rates really start to ramp up, then hopefully we deliver a pretty good quarter.

Speaker 6

Okay, very helpful. And then maybe switching gears on the Los Angeles market. Any thoughts overall in that market? What's driving the underperformance relative to your expectations that you mentioned and kind of your outlook or what needs to happen in that market to get back to 2019?

Speaker 3

Yes, I mean, it was up until really kind of the last 6 months, it was one of our strongest markets. I think it had a soft Q4 and soft Q1. Some of that was weather driven, but as we've talked about, I think it's more of an LA focused. There just isn't a ton of business travel into the market at the moment. We are starting to see some signs of life there, especially at our Woodland Hills and Marina del Rey Hotels.

Speaker 3

I think as we talked about, our Anaheim Residence Inn had a great Q1. So, it's really that BT travel into downtown and up near Warner Center.

Speaker 6

Okay, very helpful. Thank you for all the color. That's all for me.

Operator

Thank you. At this time, we have no additional questions. I would like to turn the floor back to Jeff Fisher for any closing remarks.

Speaker 2

Thanks everybody for being on the call again. And I think I'll just pick up from where Dennis left off saying that as we look at the guidance given for the Q2 and the rest of the year, we certainly are, I think on the conservative side, but we are taking a wait and see attitude for the most part as to the kind of RevPAR results that we might see through the quarter and the rest of the year. But we are very encouraged by April numbers. We're very encouraged remarks, on all fronts, to continue to remarks on all fronts to continue to propel these earnings and FFO for the company. Thanks for listening.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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