Welcome to the Q2 2013 Federal Realty Investment Trust Earnings Conference. My name is Christine, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kristina Lennox. You may begin.

Good morning. I'd like to thank everyone for joining us today for Federal Realty's Second Quarter 2013 Earnings Conference Call. Joining me on the call are Don Wood, Dawn Becker, Jim Taylor, Jeff Berkes, Chris Weilminster and Melissa Solis. These and other members of our management team are available to take your questions at the conclusion of our prepared remarks. Our second quarter 2013 supplemental disclosure package provides a significant amount of valuable information with respect to the trust's operating and financial performance. This document is currently available on our website. Certain matters discussed on this call may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any annualized or projected information, as well as statements referring to expected or anticipated events or results. Although Federal Realty believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realty's future operations and its actual performance may differ materially from the information contained in our forward-looking statements and we can give no assurance that these expectations will be attained. Risks inherent in these assumptions include, but are not limited to, future economic conditions, including interest rates, real estate conditions and the risks and costs of construction. The earnings release and supplemental reporting package that we issued yesterday, our annual report filed on Form 10-K and our other financial disclosure documents provide a more in-depth discussion of risk factors that may affect our financial condition and results of operations. And with that, I'd like to turn the call over to Don Wood to begin our discussion of our second quarter 2013 results. Don?

Thanks, Christina and good morning, everybody. This is a very powerful quarter for our company, both in terms of reported results and for the deals and initiatives that were getting done that will set us up very well for the future. Let me start out with about a dozen bullet points that summarize the progress and then I'll put more context around them. First, on the reported results side, very, very solid top line rental income growth of 8.4% in the quarter, more than half of which came from same-center comparisons. Same-center rental income grew 5.1%. At the property level operating income line, we grew 7.6% company-wide and 5.2% on a same-center basis. It's important to understand that we put up those property operating income numbers despite very little in the way of lease termination fees in the quarter compared with, well, a lot last year. We had $2.2 million of lease termination fees in last year's quarter compared with $300,000 this year, a full $0.03 per share less. When adjusting for lease termination fees in both periods, same-center growth was 7%. FFO per share of $1.14, excluding of course the $0.05 charge on the early payoff of our senior notes, compared with $1.04 last year or a 9.6% growth, and again, that $1.04 last year was helped by those lease termination fees. We ended the quarter with a portfolio that is 95.3% leased, up slightly from the 95.1% leased at the end of the first quarter and up 110 basis points from the 94.2% a year ago. Now, as strong as those reported results were, and they were, helped again by the second straight quarter of near nonexistent bad debt, consider the work that was accomplished during the quarter to set us up for continued operational outperformance in the…

Thanks, Don, and good morning, everyone. As Don just outlined, we had a great quarter on all fronts, truly demonstrating how this portfolio and team outperform, not just through the downturn, but also in an improving economic environment. Even with relatively stable occupancy, the strong performance underscores the point that I've discussed with many of you, and that is that well-located in-fill real estate truly outperforms through all cycles, not just in a downturn. In fact, in good times, great things happen to good real estate. Further, as Don discussed, this improvement in the retail outlook has provided great tailwind for the investments and redevelopments that we are making at our prudent in-fill locations. Importantly, these investments position the company well, not just for near-term accretion as these investments deliver, but also long-term continued growth as we expect these locations to outperform from a growth perspective. Before turning to the quarter, I should note that much, if not all, of the rollover growth that Don discussed that exceeded 22% without Best Buy were 15% overall, which includes all space, no matter how long vacant. This quarter really sets up our growth for next year and beyond. The performance of the core portfolio and the visibility that the rollover provides on next year and beyond is truly remarkable. In fact, the NOI growth that we realized this quarter was achieved in rollover on leases signed as far back as 2 years ago. I'm going to walk through some of the key underlying drivers for the quarter, review some significant balance sheet items and liquidity, discuss outlook for acquisitions and finally provide some details on our updated guidance for 2013. Overall, property operating income for the second quarter increased 7.6% to $112 million in the quarter compared to the prior year. Consistent…

[Operator Instructions] And our first question is from Jeff Donnelly of Wells Fargo.

Don, I think we can debate the reasons but I think the performance of Federal as a stock this year hasn't necessarily reflected the operating successes or potential that may exist in the portfolio. I know you don't want to give guidance, but can you talk in broad strokes first about how you see core growth shaking out the next 2 to 3 years compared to maybe recent trends? And then secondarily, when the developments of Pike & Rose and Assembly could begin to meaningfully impact the bottom line?

Yes. I think that's -- I can, Jeff, give you points of view on it anyway. The first thing I do want to say, and I think it's really hard anytime you've got a company that's got a bunch of development coming on, I see lots of people who refer to Federal as trading at a 4.7 cap. Well, there's $460 million or so on the balance sheet as construction in process, and the idea of taking income and dividing it by a total asset base that includes assets that are not performing and are not put into service yet seems unfair effectively. So at some point, we're going to get to this conversation, and I think, as Jim said in the last -- and he said, we're going to get you up to Assembly in the next 60 days or 75 days, and I'd love to get everybody better educated effectively on exactly what it is that we're doing there and exactly what it is that we're doing at Pike & Rose, so that there can be a better understanding of the core vis-a-vis the development opportunities that are not opportunities any longer. They're being constructed. So that's an important distinction first, I think, when you talk about underperformance, Jeff, but that needs to be understood better and I think that's primarily on us, to do a better job that way and it's probably the right time. When you talk about the core, look, I've said this before, I get -- I'm not sure everybody agrees with me, but I just believe that this business is a 3% business on the side of Federal and I think it's a 1.5% or 2% business in terms of same-store growth when you take out lease-up, when you take out occupancy changes…

That's helpful. Just maybe 2-part on Assembly Row. First, is there any status update on the IKEA parcel? I'm sorry, I might have missed it in your remarks. And then the other is, the apartment rents there look pretty attractive and I'm sure Avalon will have a good experience. Is there any prohibition or lockup on Federal starting construction on additional multi-family in the near like -- in the next 1 or 2 years? Or do you have like a window for them when they're going to be protected?

Let me give you -- there is no such prohibition. We -- it's market driven. We'll evaluate that opportunity for future phases. We're certainly going to watch and see how they do in the first phase. I'd be lying to you if I told you I wasn't a little bit envious because I think, from everything we can tell in terms of demand and the market rents that they'll achieve, you'd have to talk to Avalon about this, but I think they're going to -- I think it's going to be great. And when it comes to future phases, we're -- I mean, look, we're going to look hard at trying to learn from that. We'll have a bias to doing it ourselves. But we're going to wait and see, and there's no prohibition one way or the other on our ability to do that. No handcuffs. When it comes to the IKEA parcel, I did not mention the IKEA parcel and I probably should have. We have the approval to buy the IKEA parcel. And we've got another -- we got board approval to that. In fact, we got that done yesterday. We have not decided internally whether we're going to do that or not. We will decide that in the next 2 months. We got until the end of September effectively to exercise that option with IKEA. Right now, I would handicap it better than 50-50 that we're going to get that done.

Right. And just maybe a last question for Jim. As G&A costs picked up a little bit, are you still comfortable with about $30 million a year for G&A? And secondarily, is there any ability to accelerate refinancing of your 2004 debt maturities, just to take advantage of where rates are?

Both good questions. Yes, I think that's a reasonable run rate, Jeff, in terms of G&A. And again, ticked up slightly this quarter because we were making investments in people as we're bringing this value creation online. So employee hiring, relocation costs, et cetera, including bringing on board Russ Joyner who's going to manage the Assembly Row project for us. In terms of that debt refinancing opportunity, very, very much in our focus, particularly when you consider where rates are, the ability to go out long on terms. And frankly, the expensive costs that the debt and the mortgages that are coming due next year, both next year, Jeff, at the 7.5%. And frankly, in 2015, we got some 7.95%. So we're looking at it. Again, we're sitting with some cash on the balance sheet. And I think, as I've always said, we never want to be in the market when we have to be. We're going to be opportunistic. It's part of what drove our decision to do the 2.75% bonds that we did, and we'll wait until the market conditions are favorable to do that.

Our next question is from Craig Schmidt of Bank of America.

Don, some of your California comments remind me of a T-shirt that reads, life begins west of Sepulveda.

Actually, we just need to adjust those T-shirts and say, Life begins at Sepulveda, because that's where Plaza El Segundo is.

A question on development. When I look at the cost to date relative to the projected cost on both Pike & Rose and Assembly Row, it's still pretty minor. When does that start to pick up more aggressively? When will we start to see you spend more on the cost of those development projects?

We're -- we -- I mean, they are both in full force right now. Now how some of that -- how some of the cash is playing out is based on how we're negotiating the -- how we negotiate the contracts, et cetera. But we are there fully. So you should see, third quarter, which will be stronger than second quarter, fourth quarter stronger than that, and a continuation into the middle or actually third quarter of next year. By that point, with a little bit of luck, we're going to be talking about maybe an additional phase at Pike & Rose that could follow right on. But there'll be a little bit of gap there. But that's really the period of time that you should see the next 4 quarters straight.

Our next question is from Alex Goldfarb of Sandler O'Neill. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Just a few questions here. First, Don, you talked about things starting to pick up in the back half of next year, as the deliveries -- as the redevelopment starts to hit, and really it's '15 and '16, but if you think about it from development, there's always that initial drag, which means probably it's more of a negative from an FFO perspective in '14 before you get all the NOI contributing in the '15. Obviously, Federal is a company that wants to grow earnings and does consistently over time. Does this make you guys want to be more aggressive on the acquisition front to sort of buy -- fill in to offset that drag for next year? Just want to know how you guys are thinking about it.

That's a fair question, Alex, and let me be unequivocal. No. The -- our acquisition criteria, our acquisition approach, our acquisition shipments effectively and the way we go about that is not impacted one iota based on what earnings are going to be. Those are 2 completely separate things. The company -- look, this company is primarily, we believe it through and through, is about value creation in the real estate. There are times when that value creation works beautifully in terms of FFO growth and there are times like bringing on development, as you rightly point out, when there is a lag that gets picked up later on. But the driver is the value in the real estate. And you very appropriately talked about that drag there. Let me say this, even with the drag that naturally happens from -- you're going to see -- we still certainly expect to see FFO growth next year. So I don't want you to think that we'll be going backwards. The going question is, what's the core doing versus what the development doing in. And it's incumbent upon us to do a little bit better job than we've been doing, to tell you the truth, on -- in understanding of how those 2 components really contribute to the company. And it's kind of the same conversation I was having before in terms of what the actual implied cap rate of this company and that goes together and it's incumbent upon us to break that out a little bit differently. But please don't think, oh my gosh, in order to get more earnings, we're going to go make some acquisitions to be accretive. If we did that -- you wouldn't want this team here doing that. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Okay, okay. And then the second question is for Jim. And as you guys -- obviously, interest rates have been very volatile as of late. The jobs number today and depending on who the Fed -- who the president replaces in the Fed, we could end up with a dubbish [ph] environment, in which case the question's sort of mute. But assuming the new interest rate volatility, how has that impacted your thoughts for your approaching the $130 million of June '14 mortgages as far as getting out early and maybe doing some prepay or just saying, you know what, I think that rates are probably going to be where they are right now so no sense in doing anything aggressive ahead of that.

Look, I mean, no one's crystal ball is perfect, Alex, as you well know, and we're not about trying to time the market. The thing that we do look at is what is the health of the market at any particular point in time and is it a favorable environment in which to go out and raise capital. Clearly, we saw that earlier in the year. I think this volatility that the market has seen over the last couple of months has made it less advantageous to be an issuer in the environment. Folks who are paying new issue concessions that were pretty material, I think we've seen that market settle in a little bit. But I think what's important for us, again, is to always have maximum flexibility to access the market when appropriate and not when you see a lot of dislocation and unfavorable dynamics from an issuer's perspective.

Our next question is from Christy McElroy of UBS.

Just a few questions on your same-store NOI growth. It seems like the recovery rate was up about 170 bps year-over-year. Is there a way to quantify the impact that, that had on same-store NOI growth in the quarter? And can you remind me, was there anything onetime impacting that ratio a year ago?

No, no. Again, I think the biggest difference, Christy, year-over-year in the same-store really was the term fees that we had last year. We had a couple of significant term fees out on the West Coast that we didn't have this year. Otherwise, really, the bulk of the same-store growth was driven by min rent, not so much by recoveries. And if there's something that we can provide the additional detail, let's catch up offline. But effectively, pretty straightforward in terms of what the drivers were of that NOI growth.

The -- you report your same-store NOI growth on a GAAP basis. Is that correct? Is it any different on a cash basis?

Yes. No, not materially. I mean, again, if you look at our overall GAAP adjustments coming down from the revenue line, you can see that they're not material. And when you think about our same-store portfolio, and I think this is an important point, when you include redevelopment in our same-store portfolio, it's effectively 95-plus percent of our NOI, which I think is unique in our sector. A lot of people will take that "same-store pool" and make some adjustments as to what's truly comparable. So you're looking at NOI that's maybe only 75% of total NOI that's in your same-store pool. We try to keep it simple. And so really, when you look at what we've disclosed on our GAAP adjustments, you can see what we're doing overall, and it's basically right in line with what's happening on the same-store pool.

Okay. I'd definitely love to follow up offline about it. Second question. I think back in '06, you were in the mid to sort of upper 97% range for occupancy. I'm wondering how much upside do you see in occupancy today. Looking at your small shop lease percentage of 90.7%, would the bulk of the upside be in that part of the portfolio?

Yes, I think it would. I mean -- 97% is -- I don't remember it being 97%. I guess we...

We rounded up to 97%.

But that is very fully leased in the portfolio. And I actually would not expect to get to -- I mean, it could happen in any particular quarter, but I would not expect it to be at 97%. Having said that, there's still room to go. Absolutely, there's still room to go. And the small shop rent is where -- small shop occupancy is where it primarily would happen. As we're at 90% or 91%, we've been as high as 94%, we've been as low as 89% in -- on that sector. So there's room to go there.

I've 97.7% in the third quarter of '06, or maybe that's wrong, but that's what I have in my model.

Of course, it's right.

[Operator Instructions] Our next question is from Brandon Cheatham of SunTrust and Robinson Humphrey.

Just had a quick question. I'm wondering how the market dynamics have potentially changed your view on future phases of your development and if you have any color on the timing of additional phases.

It's a great question. What will color our view on future phases will be results of our first phase and how we're doing. I can tell you that, as you know, development is a long-term business. The idea that -- and none of these developments we're doing for the first phase is to be done and just standalone that way because as you see from Santana, as you see from lots of our projects, it is those future phases where we really create value in a significant way. I mean, those residential buildings are happening out of Santana at 8% and the last one was almost a 9% deal versus you tell me what the cap rate is on that kind of money. That's serious value creation, and so we would certainly expect to be able to build out the balance of these projects. Now we're going to see how the first phase is doing. We're taking information in all the way along. Just like the first quarter, the first -- the earlier call asking about Assembly and how Avalon will be doing on those -- on the apartments, that will be very, very important information for us to assess the likelihood of additional demand at that location. Right now, that is looking real good, but we don't have to guess about that. In the next 6 months, we'll see it.

Our next question is from Vincent Chao of Deutsche Bank.

And just going back to the financing side of things. I mean, where do you see debt spreads today for 10 year if you were to do the deal that you did earlier today?

Yes, it's moved out. We did the last deal at about 1.12%, and I think it's probably moved out 25 -- 20, 25 basis points from there.

Okay. And just sticking with the funding side of things. In terms of the remaining -- the CapEx spend for the rest of the year, in the past, I think you've talked about using a mix of debt as well as ATM usage to fund that and you've also noted some volatility here that's causing you to move away from the ATM usage here recently. Just curious, given that the private market cap rates still haven't really moved, do you see more dispositions increasing as a funding source?

We'll be opportunistic there just as we are on the acquisition side. We typically will try to match up dispositions with acquisitions so that we can do it most efficiently. We've owned our average assets 20 years, so we need to focus on the efficiency of those transactions. But we're always evaluating the different markets and trying to put ourselves in a position that we're not stuck in any particular execution. With that said, I do need to point out that we will remain disciplined from a balance sheet perspective. We're not going to let our metrics deteriorate, something that we focused on, because that's the basis of our flexibility. That's what gives us the ability to raise capital most efficiently in a manner that is opportunistic for the company. So that discipline will stay. And again, whether it's future dispositions or equity raises, will be driven a large measure by what we're seeing.

Okay. And just one last question. I was curious, in the press release regarding the Chelsea Place completion, you talked about a modular design that helped to shorten the time frame for development and that kind of thing. I was just wondering if you could just quantify some of the benefits that you saw from that and if that's something that can be applied to other -- some of your other residential projects.

Okay. I love that you asked that question, Vin. I'll tell you what that's about. It's something we're still in the early phases of. I mean, obviously, we own lots of shopping centers in very in-fill locations. And the ability to do some residential on in-fill locations is something that we've always looked at very closely. But by the same token, living in the back of a shopping center may not be on the top of everybody's list in terms of a place to be. So trying to balance demand with the economics has always been a challenge and would be all the time. By doing a modular design, it does seem, at the particular location that we're talking about, which is Chelsea, Massachusetts, just outside of Boston, and I do mean just outside of Boston, very close in suburbs. In order to make the numbers work, given where we thought market rents were, we needed to find a way to effectively take costs $1 million -- let's call it 10% or 12%, out of the cost basis to make it -- make some sense without doing just a bare-bones project that wouldn't satisfy the market. Modular may have given us that opportunity. I think it did in that particular case. Now whether that's able to be exploited and moved on to 3, 4, 5 or 6 other places, it's the experiment that we're in the middle of right now, but it does open up a new way of looking at the building that is very different, obviously, than what we would do at Pike & Rose or Assembly or any of the other larger mixed-use projects. So that's kind of where we were on that one and more to come in terms of the next couple of years, in terms of whether we can find a couple of other places to deploy $13 million at an 8 or better than an 8.

Okay. So I mean, if we're thinking about it, it really sounds like it wouldn't necessarily increase the yield but just opens up more opportunities to do more of that kind of development.

Effectively, it does increase the yield in terms of those because if we...

But it wouldn't be -- it wouldn't go to 12, but you'd just have more of those opportunities that you could -- you'd actually...

That's right. There's a project when there wouldn't be before.

Okay. And is that something -- I mean, that was specific to the construction coming you're using there. Is that something that's pretty widespread you think?

Oh, it's widespread. And there are absolutely other developers that use that. But what I'm not sure of is whether that modular design is really the critical thing in terms of being able to make the projects work as opposed to really understanding what the market rents are and what the product that had to be built is. Modular just gives us another way to look at it to compete within developers, within other construction companies.

And Vin, one thing to point out when we talk about modular construction, when you actually see the product, you can't tell. It's very well executed, and we're pleased with how the units look and we're certainly getting very positive feedback from some of the initial residents.

Our next question is from Omotayo Okusanya of Jefferies.

I just wanted to focus on Assembly Row a little bit. And just with the hiring of Russ, exactly what -- again, he's kind of been tasked with over the next 12 to 18 months to make sure that the project itself is a rousing success?

It's a good question. And Tayo is talking about Russ Joyner, who is a new hired General Manager that we hired for -- specifically for Assembly. And I just want to give a little kind of shout out to Russ because we stepped up here. We got a very experienced guy, a guy that came directly from Miracle Mile Shops in Vegas, has terrific experience with Hollywood and Highland and a number of other big projects throughout the country over the last 15, 20 years. He also played with Doug Flutie whilst in college back in the 80s. So that's not a bad thing for the local conversation. But Russ is a very qualified guy who, getting in early in a big mixed-use project, we have found from Santana, from Pentagon, from Rockville, that it's critical to a full understanding of how the projects' coming together, how the leases are being negotiated from an operating perspective. He's looking very closely at the marketing plans, the grand opening, how it all ties together, the place-making, the tenant relationships as they -- as the space is turned over to them. Very, very critical to not do that too late. So that your operating team comes on after development and construction have effectively built the place out and leasing the place out without -- it makes it much harder to have the right kind of synergies between those departments if you bring them on too late. That's what he's doing here now and we're thrilled to have him.

Great. Very helpful. And then just in regards to marketing Assembly Row to the general community, could you kind of talk about some of the new initiatives taking place?

I'm not going to get down to the individuals things that we're doing per se, but I will tell you, on a big picture, there are some major things to think about. One is the Riverfront in Somerville, Massachusetts, on the Mystic River has never been exploited. It's never been opened up and effectively used as the amenity that it could be to the community. We've done that now, and that's one of the reasons I can't wait to get you there to see it, in terms of how it really adds to the feeling of this property. It's really, really important. Secondly, we signed a temporary deal, brought in a temporary deal on the adjacent parcel, in fact, effectively on the IKEA parcel, for a Cirque du Soleil type of show called Cavalia, which will bring in more than 100,000 people over the next 7, 8, 10 weeks. It's kind of longer there. But the first show is next week. That will get people to understand how to get in there, how it all works, and we think it's really, really positive. And frankly, if you saw the tents and the view from the highway, from 93 of this, I think you'd be blown away. In addition to that, we do much more of the traditional marketing stuff in terms of events using that park, activating it, getting people comfortable and understanding where it is that we're going or how to get there and how to be part of it before a large grand opening party which will take place next year.

You're already seeing some of the activity benefiting the power center, in terms of activity and traffic. And with the completion of the Starbucks and Burger Dive that Don mentioned, you're starting to see how the site fits together and I think our tenants there are thrilled about what's going on and the attention that we're drawing to the project.

Our next question is from Cedrik Lachance of Green Street Advisor.

Don, when I look at the 2 dispositions that you're making this quarter, I guess closing early next quarter, they seem to be away from other assets that you own. What does that -- or these 2 transaction tell us in regards to the need for asset concentration in a particular market? And where do you think it should be for your company in terms of critical mass in any particular market?

In both cases, Cedrik, both of those assets, both San Diego and Forest Hills, go back to a time where we acquired street retail assets on a one-off basis. It's a really hard way to do it in a public company of our size. And so over the past 10 years, we've disposed of most of those one-off assets. In fact, it really impacted how we thought about Newbury Street in Boston, if you remember just a couple of years ago. We bought a few buildings. We thought we could get more. When we couldn't get the largest portfolio, we immediately turned around and sold them because we don't want to be involved as a kind of an absentee landlord with one-off triple net. We can't do -- we're not going to make any money in that kind of situation. So the ability to have -- to get a very good price, I think you'll be very happy with the cap rates that you see on them, the first one is closed. The second one, I mean, that deal could fall through. It's in due diligence now. It'll -- it's scheduled to close, I think, in early September. But assuming it happens, I think you'll see why a private owner can take that and have it at work, get a low cap rate for that person, but for us, to be able to shelter that tax gain, which is substantial, over the 10 and 15 years that we've owned these assets and roll it into something like Darien on a tax efficient basis where we see and we have a plan to be able to create some significant value or we hope to have a plan and be able to do that is, to us, just smart recycling. And that's what we're about.

Okay. And then just in regards to asset concentration in any particular market, you touched on street retail. What does it mean portfolio-wide? How important is it to have some sort of critical mass in the markets you target?

Yes, Jim, I'm chomping at the bit, hold on.

We like the markets that we're in, Cedrik. We think over time that the way those markets work together and interact help us continually outperform. In terms of areas that we're particularly focused on, obviously, we'd like to add more in the Northeast and hence, you saw the Darien acquisition and we hope to be able to do a few more things up there. But generally speaking, we remain focused on the markets where we are and think that those markets are going to position us well for the next several years.

And when you think about that, Cedrik, don't you think about acquisitions. Think about this development pipeline. Think about what kind I was talking about with respect to Plaza El Segundo. And we're not there on the numbers yet, but I think we will be in terms of being able to do the point, which is on some really nice new development adjacent to it because of that. Would I like to be -- would like it to be bigger in Southern California? Absolutely would. I mean, those assets have performed and we expected to continue to perform extremely well. The same thing with respect to our additional investment in Northern California. Boston is going to be a critical market for us as Assembly Square comes on and continues to do -- and we continue to build it out going forward. Rockville right here in Washington D.C. with Pike & Rose and what's happening with Pike & Rose, and everything else that we own here makes us important in those markets. It make us do a better job when we're there. So I believe thoroughly in the concentration of a few markets that are very different. And I've said this before, having the volatility of Northern California with the stability, if you will, of the Northeast and mid-Atlantic is really -- it's terrific. And that doesn't mean that we couldn't -- you couldn't see us out of Seattle if something was -- were happening there or to get bigger in Florida, in the type of assets that we'd like to buy, you could see that all day long. But you won't see -- you have to basically consider us in the markets that we're in and we still see largely because of the development pipeline, a whole lot more to do in those markets.

Okay. And then one just thing on development. Where do you think the rents you've been signing at Assembly compare with what you had underwritten? And are you been a little bit ahead, a little bit behind? Where are you at in terms of rent levels?

We're where we thought we were going to be. A little bit ahead on the restaurant deals that were there. The subsidized deals that we have to do in terms the Nikes and the Saks' are just that as we thought they would be. The theater deal is a big deal. And the theater deal is right where we thought it was going to be. LEGO, we specifically did for that use, a little worse than we expected to be. But you know what, that's what it is. It's an underwriting forecast that has things that are better and worse. Overall, we're right where we thought we were going to be. But as I said, I think the restaurants will push it up a little bit more than that.

We have no further questions. I will now turn the call back over to Kristina Lennox.

Thank you, Christine, and thank you, everyone, for participating in our second quarter earnings conference call. Again, like Don and Jim mentioned, please keep an eye out for our Assembly Row Investor Day save the date that will be held at the beginning of October. Thank you.

Thank you, and thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.