Good morning and welcome to the Consolidated-Tomoka Land Company Second Quarter 2016 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Albright, President and CEO of Consolidated-Tomoka Land Company. Please go ahead.

Thank you, Drew. Good morning, everyone and welcome to today’s Consolidated-Tomoka Land Company Conference Call to update you on recent activities of our company and to review operating results for the quarter and year-to-date. This is John Albright, President and CEO of Consolidated-Tomoka. On the call with me this morning is Mark Patten, our CFO; and Dan Smith, our General Counsel and Corporate Secretary. Mark will review the details of our second quarter and year-to-date financial results. Following my opening comments to go over our announcement yesterday, regarding the company’s review of strategic alternatives. First, I will turn it over to Mark to provide you with the customary disclosures.

Thanks, John. Good morning, everyone. During our call today, we will make certain statements that may be considered to be forward-looking statements under federal securities laws. The company’s actual future results may differ significantly from the matters discussed in these forward-looking statements. We may not release our revisions to these forward-looking statements to reflect changes after the statements were made. Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the company’s filings with the SEC. With that, I’ll turn the call back over to John.

Thanks Mark. While we look forward to reviewing our year-to-date and second quarter results for 2016 and to highlight number of developments in our business that we are very pleased with. My opening remarks will address the company’s review of strategic alternatives which was discussed in our press release yesterday. Since I joined the company five years ago, we have pursued our business plan with consistent and determine purpose of maximizing shareholder value. Particularly by unlocking the value of our land rich business in converting that into income producing investments. In November of last year, our largest shareholders submitted a proposal that effectively asked us to consider a sale or liquidation of the company. Our Board agreed that we should consider all opportunities to maximize value for our shareholders and set out to begin this process well and advance to the form of vote at our annual shareholders' meeting by appointing the special committee of Independent Directors which retained Deutsche Bank Securities as its independent financial advisor. The special committee and Deutsche Bank considered a wide range of options for maximizing shareholder value. You can review much of the details surrounding this process in our release from last evening. My remarks are intended to provide the key takeaways from this process. And review the actions approved by the Board and to be implemented by the company that we believe our important relative to your investment in the company. Before I get into those points let me take a moment to thank Deutsche Bank Securities, who acted as a financial advisor in this process and Pillsbury Winthrop Shaw Pittman, who served as a legal counsel to the special committee, the Board and the company. An important point delivered in our release last night is that we believe that our process was…

Thanks John. For the quarter ended June 30, 2016 as compared to the same period in 2015. We achieved net income of $0.28 per share, which was an increase of $0.24 or 600%. Our operating income was approximately $4.7 million which was an increase of approximately $2.5 million or 117%. Total revenue for the quarter increased 69% to approximately $12.9 million as compared to $7.6 million last year. Revenues from our operating segments were led by an increase in revenues from our income properties which totaled approximately $6 million of revenue, which was an increase of 46% reflecting an increase of approximately $1.9 million, which $1.7 million of that was incremental rent revenue from our 245 Riverside Avenue acquisition in Jacksonville, Florida and our acquisition of the Wells Fargo building in Raleigh, North Carolina which was in November. Also increased revenues came from our real estate operations which totaled $4.8 million or an increase of 249% primarily related to approximately $3.8 million in revenue from the percentage-of-completion revenue recognition during the quarter for the land sales within our Tomoka Town Center they closed in the fourth quarter of last year, in the first quarter of this year. We also have $450,000 in revenue from a surface release transaction during the quarter. Our operating results for the six months ended June 30 also compared favorably to the same period in 2015, with our net income hitting $0.52 per share, an increase of $0.42 or 420% our operating income was approximately $11.1 million, an increase of approximately $7.4 million or 202% over 2015. Total revenue for the six months ended June 30 increased 109% to approximately $31.2 million as compared to $14.9 million during the same period in 2015. Revenues from our operating segments were led by an increase in revenue from…

Thanks Mark. There are a number of other activities in the quarter that I’d like to highlight on our call this morning. Mark alluded to dispositions in our income property portfolio which delivered net overall gains during the quarter and reflected our continual focus on harvesting returns from our non-core assets and take advantage of the strong market fundamentals for these properties. As you know we have a portfolio of 14 core assets that we have under contract for $51.6 million in gross proceeds that we expect will include the buyer’s assumption of $23.1 million mortgage loan. The buyer’s deposit of $2 million became non-refundable during the quarter. We now expect this transaction to close by the end of August. It’s all be completed, we estimate the gain would be approximately $11.4 million which reflects an extra cap of 4.74% and will be utilizing the proceeds in the 1031 exchange to acquire replacement assets and hopefully accretive returns. We are also under contract to, so one of our remaining non-core income properties located in Altamonte Springs that leased to PNC Bank, our last vacant single-tenant property as Mark noted this transaction result in a loss of approximately $940,000 which we recognized in the second quarter. We expect to be very active with completing the acquisitions in our income property portfolio in the second half of the year and believe we will meet our guidance of $70 million to $85 million for the year. Finally, as it relates to our opportunistic investment in the Grove at Winter Park property we are pleased to complete 15 year lease with 24-hour fitness on the anchor space of approximately 40,000 square feet, or 36% of the center. In addition, we hope to finalize lease with Wawa for outparcel side at the Grove which we…

We will now begin the question-and-answer session [Operator Instructions]. The first question comes from David Spear of Network Capital. Please go ahead.

Hey, good morning guys.

Good morning

Good morning, David.

I just wanted to clarify just a little bit, but last quarter I believe we had approximately was 2,300 acres under contract for $68 million and now it’s about 4,100 acres for $130 million. So fair to assume that you sold around, will you put under contract 1,800 acres for $35 million end of the quarter?

Did you mean – that’s double check your math…

I mean, just using the number you provided at the end of the first quarter versus this…

Yes, sure.

And then beside the 1,686 sold to Minto so looks like, it’s like 114 acres to two different buyers. Can you give an idea of where that land was located, East, West some different proximity?

Yes. So besides the Minto large parcel, the other parcels are on the East side of I-95 along LPGA more in the Clyde Morris area, Clyde Morris in LPGA and then Williamson in LPGA

Okay. And that was around about 140 acres?

No.

No, I think it is less than that. It’s less than that.

Okay. But around 100 – it seems like around 100 to particular I mean that would be…

David, its – we’ve traditionally try to be a little bit more general about the acreage just because to get more precise gets a little unproductive.

No, I understand, I understand just trying. All right, perfect.

I mean it’s safe to say that the other parcel on the east side were more commercial and smaller acreages.

Yes.

Got it, okay.

So I think, as you know we’ll have a – we are used to doing this as provide in investor presentation which would be filed by next week that I think will give you more granular info that we can definitely follow-up we’ll be on after you see that.

Got it, got it, make sense. And then even that you mentioned that even though the potential offers didn’t provide enough premium into the Board, the company felt it wasn’t the pretty big shareholders. I’d imagine also hope that the offers were still in a premium to the share price. So on the possibility the stock will stay where it is or you can go lower, it would make sense that you guys would be pretty significant buyer of the shares considering you thought it was worth a lot more than the offers coming in that and I assume that was above the stock. So I’d imagine that would make sense.

Yes, safe to say that we announced the utilizing the rest of our share repurchase program that we find that as we said in the past that we only look to repurchase shares when we see it opportunistically and we believe that these levels at opportunistically. So and it’s safe to assume that like we said in our release that the offers were premium, but not enough.

Got it. All right, I appreciate you guys. Keep up the great work and looking forward.

All right, thank you.

Thanks David.

[Operator Instructions] And we have a question from Paul Misleh from Fortis Capital Management. Please go ahead.

Thank you. Just John, just wanted to get your thoughts on the capital allocation front specifically we just talked about buybacks. And we’d like to sell the West Coast property in the Baywatch $50 million you got $23 million note, I think these are the gain was only about $11 million, so the taxes actually wouldn’t be huge, if that's actual cost basis. This dock is cheap now I think a number or two might say $7 million isn’t too much looking at the market cap but that would be a pretty good chunk as well. How do you think about that with the stock price here versus reinvesting that 6% cap rate $27 million equipmentto $1 million in net operating income?

Yes. So thank you. So remember that when we bought the [indiscernible] a portion of the capital were extremely low basis capital that had invested in other income property that we REIT 1031. So the tax hit would be much greater than just the $11 million profit, there’s a great majority of that $51 million would be what you would be tax effected on, on a corporate basis. So I know we get this question quite often and believe me you run the numbers you wouldn't want to pay the tax hit you’re better off. We are trying to be very selective in what we buy, reallocate that capital into basis property that we feel very good about long-term value and as we've discussed the conversion to the REIT is very powerful possibility for us to deal with the tax deferred liabilities which are roughly $50 million right now on our balance sheet. So I’d point you to when Darden [ph] spun out four quarters. If you look at when they converted to a REIT their first annual or their first quarterly earnings post-REIT, they had $80 million that went from tax deferred liabilities to zero. So that’s kind of a powerful opportunity for us and while we are definitely active in buying back our shares that makes no sense to sell low basis assets and using that capital to buyback shares.

Okay. And then if I look at the residential lands from the two Minto sales, I think we are down to 4,300 or so. I think you’ve got the additional thousands and another potential 2,400 with mitigation bank. So that would take us all the way down to somewhere around only like 900,000. Sorry not, 900 acres less of a residential, is that about right value, guys to think about it?

No, that’s not right, I mean so you have…

It’d be about 3,000 acres.

Would be 3,000 less.

Okay. So there’s not 1,000 plus to 2,400?

No it is, but we are at about 4,100 under contract in negotiations on about 1,000 sets. 5,100 and then the 2,400 mitigation that’s takes you to 7,500 fairly it’s about 3,000 from the 10,500. If you get they had 3,400 under contract, yes.

Right. Okay. How was it talking residential or so? Or is that in west, that’s always getting…

Yes, actually Paul to your point that the largest tract of land obviously is the big piece west of 95. If you do the 4,100 and you were able to do the 1,000 that we’re currently negotiating in the mitigation bank or whatever was under contract. That leaves about 200 acres and change on that big chunk on the west side. So when you think about residential that’s where you think about it that's right, it’s about 200 acres or so.

Okay. That’s all I was getting at. All right, thank you. That’s it from me.

Thanks.

Thanks, Paul.

The next question comes from Robert Kirkpatrick of Cardinal Capital. Please go ahead.

Good morning. Could you talk about the mitigation bank a little bit more and explain to people what that is and how that would work and why that’s a tract of alternative for you?

Sure. So again the land that we’re talking about is our far western boundary along the Tiger Bay State Park. And so mitigation bank is, you would take land put it in conservation and you would get credits that you can sell to developers who are mitigating wetlands for development. So in a simple scenario you get a certain amount of credits and as developments need those credits you sell them and that’s kind of the monetization you get from the mitigation bank. So it’s purely, how long will it take what’s the absorption in discounting that bank would get you kind of the value of the land and we’re early stages we had some environmental reports done we’re exploring that we think that – we think that’s a great way to look at an earlier monetization of that land than a longer dated strategy.

Great. Thank you so much.

Thank you.

The next question comes from Nat Stewart of Opus Capital Management. Please go ahead.

Hey guys, how are you?

Great, how are you doing?

Great, news yesterday looked very, very favorable to me really impressed with the progress year-to-date. Most of my questions have been answered. I just kind of had a more general question remaining, in terms of just the real estate strategy going forward, you had the $51 million sale that look good you took again on that. But in terms of thinking about how you’re going to convert what you’re doing to maximum value down the road on a REIT conversion. I’m just kind of curious how you guys were thinking about that and if you thought about that much yet. Are you just kind of focusing on in an immediate opportunistic mode? Are you thinking about, okay. How can we position this REIT to how the maximum value in the market down the road, just kind of curious your thoughts on that?

Sure. So as you know, we mainly have a consistent portfolio of single-tenant properties, we do have a couple of multi-tenant properties, but primarily they’re single-tenant properties and we like that kind of triple net strategy in that. It allows us to be geographically dispersed in different locations by different credits but by not having a large G&A footprint. So for instances buying a single-tenant properties with net leases for certain durations, we are basically don’t – we don’t have to have leasing people and construction people and asset management folks. So it’s a way for us to allocate capital without scaling up and as you know the – probably know that the triple net REIT space is very strong and has very healthy multiples in implied cap rates. So we feel like that’s the most logical area to keep our concentration.

That makes sense to me. I think on the Wells Fargo acquisition looks very good, I’ve heard some good stuff about that about how the rents are below market, I don’t remember if that was in where I heard that but it looks very good. I do think with that perspective and sharing that vision about where, where things are going to be going, is going to be helpful. Thanks guys.

Great. Thank you.

The next question comes from Clayton Park of the Daytona Beach News-Journal. Please go ahead.

Hi, those 10 contracts that you have under that you mention. Have you announced all of those I mean what those are, and exactly where?

Hey, Clayton thanks. No, we – there are certain confidentialities in our contracts certainly it’s a small market. So we try to respect the competitive nature of some of these clients who are buying property. So we don’t – we only disclose what we’re comfortable disclosing and what the buyers comfortable with.

All right. And then that mitigation bank – is that what is that – I might have missed that part a bit, on this map I see that there is like 7,200 acres is kind of like a darker yellow green according Tiger Bay State Forest is that size of that mitigation bank.

Well, that’s the directional area of it on the western – very western boundaries, so yes, consider 2,400 acres in that area.

Okay, 2,400 acres.

Right.

And then is there a timeline for converting to this REIT and what would that and how would that change again on the line – first in here so if you could just explain how that would change things for?

Yes, I’ll let Mark handle that.

Yes. So Clayton the way it works, we are a year-end taxpayer. So the only time you can convert is on a January 1, what we've targeted we said the earliest we would likely look to do that is January 1, 2018 and really part of that concept is as we have closings on some of the land sales that are under contract will if that would be the sort of the transition that would make it the most favorable timing.

Okay, and how would that change things for – you as currently you're a public company and with that change things?

No, you're still a public company, you just happen to be a real estate investment trust more often than not you merge into a Maryland organization – entity because that's where REITs tend to be organized but otherwise you're still Consolidated-Tomoka Land Company trading on the exchange.

Okay, all right. That's all that I have right now.

Okay, thanks.

The next question comes from Steve Olsen of Private Investor. Please go ahead.

Good morning, thanks for having the call. And congratulations on the progress being made on the land transactions especially the lands west of 95. The increase in the cash and cash equivalents to $25 million is that primarily attributable to the proceeds of the Puerto Rican hotel loan.

Well, that would be little over $14 million of it for sure, but the rest was you know we put on a financing on Wells Fargo and that provide some capital and we wrapped up the 1031 on the Wells Fargo transaction. So as you know, when you do a reverse you basically have the transactions in front of, the acquisition in front of the dispositions and the dispositions get put in the restricted cash until you complete the 1031, the Wells Fargo was a large transaction so it had a large balance of 1031 cash so when that completed in May, we had a fairly sizeable chunk of capital come under restricted.

But compare to the proceeds of the Bank of America sale of those properties if you were to monetize the loans those proceeds would be unrestricted cash. So you’d be looking at with no other changes, about $50 million of unrestricted cash if you monetize the remaining loans.

Yes, right. That’s, correct.

Relating to the 1031 and the single-tenant properties you said, you’d be selective but in the past, and with I guess the PNC Bank and even the lows North Carolina that’s was purchased in 2005 for I guess $9.5 million was allocate to land and buildings that probably cost more because that probably something was allocated to the intangible assets for the lease. You get a 20% reduction in rent and the building has been sold for $9.1 million. And this is during the period when there is low interest and low cap rates. I just wonder has the company’s investment in the 1031 properties, John do you think they earning the return you would have expected?

Well, Steve, that was a clean up operation. We didn’t buy those assets and I don’t know if you been there Lexington, North Carolina is a fine place but don’t have the demos that we are going to. So we are buying properties in larger MSAs where we have return expectations more in line with what the fundamentals have done in the last five years or so. So that one was previous purchase by management, so we sell that, we’re happy with that sale, the PNC has been vacant, I think almost since I have been here and that was again a deal that was bought before me. So we’re go ahead to get a good price on that asset and a good buyer. And that’s kind of the almost the last of kind of the legacy portfolio if you will.

Okay. One comment with the debt facility $42 million available that could be source if you needed to do a reverse 1031 and with the possibility to have large unrestricted cash, I just think the company could be much more aggressive in buying the asset that it knows best, its own stock in a more meaningful manner than the $7 million remaining outstanding. It just seems to me that when you want to convert to a REIT to have fewer shares outstanding would be most helpful in having on a per share basis you’re strong fund from operations. That’s my final comment. Thanks and good luck.

Thank you.

The next question comes from Liz Cohernour of WinterGreen. Please go ahead.

Good morning, John.

Good morning, Liz.

I’m curious for more information about the process that you went through – with on Deutsche Bank and the Boards committee, I mean looking at options to maximize shareholder value. For example, what kinds of restrictions or limitations are incorporated into the process in terms of the structure of the transaction, were there ongoing obligations or employment of the management team or payout on a transaction or was there an obligation for our people to be buying combinations of lands that were not what they wanted? What is that – that was behind the lack of success that you faced?

Well, look one thing is Deutsche Bank had a free rein to look at all possibilities, went to all sorts of possible capital sources. And so I will say that they – basically we’re charged with, let them kind of come back, go to the market see what there is, come back if there is something that would make sense for our shareholders. And what we got didn’t reflect we thought the value of the company. So again like we’ve said in our release we’re definitely open to opportunities as we work through the transition of the company from land to income properties. But what we’ve got wasn’t sufficient for a shareholders.

So you describe for us that top couple of expressions of interest that the Board and the company were looking at that were rejected has being not worthy to present to shareholders formally?

That’s – we basically come out with a release that would – something that the special committee approved and Deutsche Bank approved. And so at this time there really no other information that I can kind of release.

Okay, John. Helpful for investors to have more information on that, it’s the direction you are going is toward a REIT, there is certainly costs associated with that are significant?

No, I don’t think the costs are significant especially in relation to if you look at the cash flow generation that we have going on with the portfolio and with the expected cash flow generation, if you look at what we pay in federal income taxes and you maybe put a cap rate on that, that’s kind of another value opportunity. So that was clearly offset by a wide margin any kind of cost to convert to a REIT.

Could you a little bit – do some more clarity it seem like you just dodging the question behind or the essence of my question.

It was that one, which question?

John, this is David.

Hey, David.

I think there’s a lingering perception that you made it impossible for someone to buy the company, because you made demands on them, for ongoing employment for yourself, for or your teem or other things because the land selling really well, the assets are really good, but you seem very capable of getting deals on John. But you don’t seem capable at transferring the value. So first of all the answer was this question. Was there essentially could you create a poison pill by saying maybe needed to be going obligations to you personally and your friends at CTO?

No. So there were no restrictions and are no obligations to buyers at all and what we’ve always said is to people like we’re happy to be here to try to create value. But people don’t think we’re creating value, we’re happy to kind of pack up and into other things. So there were no restrictions on the process whatsoever and as you know we have no poison pill and I suspect if someone who want to come and really buy the company, they’re going to call you, because you have a big slug of it and they’re always happy to make a bid on the company or our special committee we’re happy to take a look at those particular offers. And like I said we’re not closing the door we’re always open to opportunities is going to realize value for shareholders like you and me.

So you’re willing to resign today. Basically because you failed in this process, you and the Board?

I didn’t say that. So what I said is that if someone wants to pay a price for the company that’s reflective of the value and they don’t want management word there’s no obligation no restrictions whatsoever.

So what price did you put on the company?

We didn’t put a price.

But you’ve said over and over again it was inadequate and you don’t want to resign.

What we’ve said was the premium wasn’t reflective of value of the company and that’s kind of you saw the release and read it and that’s kind of where we were.

Well, I can say John, it’s surprising that with the great value CTO’s assets that you could not execute, you and your team couldn’t execute. It’s really surprising to us and especially in a booming real estate market in Daytona Beach, Volusia County and with rates where they are, that you’re able to do lots of transactions that you can realize the value for the shareholders. But I really think you should consider resigning.

Well. I think you’ve been familiar with the process. Have to talk to Deutsche Bank in this process.

Yes, a couple of times we talked about.

Okay. So you probably familiar with the process, so perhaps that kind of a better spot for you to kind of inquire about the process and see they feel like you know if there is anything that we did it or didn’t do.

I think the other thing that you really is incumbent on you at this point. Is that you make it very clear what the land pipeline is, I know Mark is try to present this today. How much cash is coming in the door? How much cash so the shareholders can clearly see what’s laid out and I know in the past you come up with a quasi NAD but I think I mean I think it’s good at least you’re making some effort to be more transparent. But I think that’s has to be weird, that you failed in this process. And it’s surprising to us because your values are there and I think in today’s real estate market, you talk up the assets, yet you can’t seem to find a buyer it just, it doesn’t seem to add up, John?

Well, I would refer to talk to Deutsche Bank you saw that, they went to over 200 folks got over 20 MBAs. And what we honestly do with our presentation is try to provide as much information that you know is that we can relieve in have people come up with their own value assumptions and again look we don't have a poison pill as you know since you voted against all the board members and quoting your own nominees. We don't have a standard board. So you have 26% position. I suspect that if someone wanted to come in and buy a big number they will call you so I mean we are driving the business best we know how with the market conditions that we have in front of us. We're going to continue doing that and we’ll see what we have in the future.

The next question comes from Dan Federer [ph] of Samson Investment Partners. Please go ahead.

Hi, John and Mark how are you?

Hi.

Hi, Dan.

First of all thank you for doing this call and thank you for the great job you guys have done the past few years, your management team and the board, everybody down there they done a great job and had a lot of per share value which is obviously not reflected in the stock price but that's beyond your control. So keep up the good work and keep going. Two quick questions if I could, does the additional contract with Minto change of thinking at all with regard to the remaining western lands. I mean have they kind of absorbed the residential market for a few years or do you think there's still demand for more residential out that way.

Yes, good question. So the great thing about Minto very powerful we think is that they planned on age restricted community. So they're going to basically pull demand from all parts of Florida and actually regionally and nationally and internationally. So as the villages there’s a lot of people know it's been the best performing residential community in the country for many years. The village was located approximately an hour north of Orlando and the interior of the state. So Minto clearly looks at this was being as villages close to being sold out and done this is kind of the next opportunity if you look at the opportunity said here in Daytona for someone who is looking for retirement housing is pretty, pretty compelling you have obviously ocean, Intracoastal, you have an airport, you have the interstate system. So they are very excited about what they see. So they're going to be capturing a client that is different than other residential communities so we have as you know [indiscernible] under contract that would be more, first time homebuyers in move up and then the other acreage that we have along SR 40 would be mainly move up and in higher price point demographics so the good news is that all these different land parcels that we have kind of in the pipeline complement each other and don’t cannibalize.

So they’ll now own basically the entire tract of land along the potential stagecoach road, right?

Yes. So they’ll have their 3,200 acres plus what stand from SR 42 LPGA. And so yes, that road – that connector road that’s projected to be will be entirely within their footprint.

Okay. And then with regard to the cash you've got, whatever, it is $25 million, $30 million now, another $100 million or so coming your way in the next 12 months to 18 months assuming that all closes. Has your thinking changed at all with regard to the type of investment properties you're looking at? Now that you have kind of a bigger checkbook, or do you think it'll be more of the same size and type?

Yes. So we try to – we're searching quite a bit and bidding on assets, but it's safe to say that anything from kind of the $5 million to the $50 million range is still kind of our hit zone. What we'd like to try to find are things that are above $5 million, because that kind of takes out the kind of mom-and-pop investor, but below $50 million because that’s below the institutional investor. So that’s kind of the size range and we try to stay within the single tenant, but up there are ways for us to buy something with better investment features. And it feels like it could be on the single tenant side and in the future we will definitely look to acquire that.

Okay, thanks. Keep up the good work.

Great. Thank you, Dan.

And we have a question from [indiscernible] of Legend Securities. Please go ahead.

Hey guys, how you doing today?

Hi, Greg.

Great.

That’s good. And first I want to start off just genuinely thinking you guys are doing the call for me, are there any data obviously putting [indiscernible] contract with the Minto deal I mean all those things are indisputably great for obviously shareholders, they are great for the company. And in terms of creating real value, I mean we – I don't think a shareholder, we can really ask for a whole lot more from that end. Further I guess exactly on what David was talking about though in regard to your strategic alternatives process, I just have a hard time looking at process and looking at your numbers, it seem – I guess the amounts of just gross cash coming in the liquidity you have. And seeing at our hearing that the offer you received wasn’t sizable enough to at least prevent the shareholders. Obviously you’ve mentioned you don't, I guess in terms of disclosing that to us, but I think you should given the fact that the supports for the initiative to liquidator sale was overwhelming. And then when you look at what is actually being done, it took you guys nine months essentially raising the dividend $0.08, and buying back 3% of the shares over the next five months. So in regard to the buyback, touching off of something I think Steve, also you mentioned that the annual meeting is you don't want to pay taxes that’s why you’re doing the 1031s. What downside you have for, one, mortgaging of properties in using the proceeds to buyback stock? And two, just in regards to I guess something you can do today, what downside you see today and why haven't you taken that $24 million in cash and tender it for $0.50 million shares? I mean what downside of $50 a share, $46 a share, whatever it is, what downside is there tender for stock at these prices? Thank you.

So, as we did mention in the past, obviously we have the act of buyback program and that’s in place. And we'd like to try to be opportunistic in purchasing our shares as our business progresses, in other words as the land contracts are closing, as we get more transparency on the value for all of us, we get more and more conviction, but we're not a company that looking to just lever up and buyback stock. If the market ever turns around, as far as go in a favorable direction, that probably wouldn’t be wise choice. So we will opportunistically buy shares as we move through the business plan. But we're not looking for some sort of sugar high of buying back shares and just using up capital resources for that.

Okay. I mean just to further touch on that I know previously I’ve had decisions with Mark regarding I guess the difficulties just regarding I guess the restrictions you have on repurchasing stock. How is it that you're going, it is worth saying you are active in your repurchase, you purchased 30,000 shares this quarter. How do you anticipate with those restrictions which everybody knows about going from that to repurchasing I believe about 140,000, 150,000 shares over the next five months and again considering those restrictions which Mark told me you guys are well aware of. Again why wouldn’t it make more sense as to tender for stock, I mean if you turned down an offer that was at a premium to 48, honestly I don't think especially considering you’ve grown net operating income into the business. I don’t think if $48 a share, $50 a share as we are at, considering you’ve got a premium that you think we are sufficient. I don’t think regardless of the economic situation. You guys are going to regret retiring shares at $50 fees. Maybe if you want to comment on that?

Mark, I didn’t really follow it.

I mean I guess what it is John sort of tackled the first part of really what your next question was which was our approach to the buybacks generally. A tender it’s not the restrictions we encounter as a company somehow lead you to a tender answer. The restrictions that we’ve talked about before and one of which was we were in the middle of the strategic review process that oftentimes may impact our ability to stay active in our 10b5-1 program. So outside of the strategic review our 10b5-1 would be less limited and the tender is just, I think John has already tackled our approach to buyback versus doing buybacks by way the tender.

Yes. Go ahead.

No, I was about to conclude the call. But go ahead.

Okay, that’s all, that was just my question just begin, I do think I know you guys said that you don’t want to but I just think just the sake of transparency you do kind of all shareholders that we some sort of idea either, hey, what your company has worked, which you’ve mentioned you don’t really, you haven’t previously done. And one what it is worth, two, what the offer received was and three how you plan to create that value to shareholders and by what period of times. So that we can kind of hold you guys accountable because at the end of the day you are doing some pretty great things but its not translating to your share price obviously. I mean you spoke highly to the coverable deal, the markets have $5 share of your stock, you spoke highly of the – some of the deals coming up I think there is a video of you Mark, even I think in August at a townhall meeting. Speaking about how your stock is 57, whether you got some deals coming up that will really show the value of the company. And obviously nothing happen with that now able to reactions to the strategic review and again its negative. So I think shareholders need more of a designative plan on how you guys are actually going to translate the amends value in the company to their pockets. And I mean the only think I can speak off again is just – you call the market will often say, we’re at more than $48 a share. Something you guys want to think about. But otherwise we appreciate the call and appreciate the work you guys are doing on the ground their, you got the good work. Thanks.

Thanks, Greg.

All right Drew.

Well, I’d like to turn the conference back over to John Albright, President and CEO for any closing remarks.

Thank you very much for our first earnings call. Look forward to the next one and having our investor presentation here in next week. Thank you.