Regency Centers Corporation (REG) Q4 2014 Earnings Report, Transcript and Summary

Greetings, and welcome to the Regency Centers Corporation Fourth Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Mike Mas, Senior Vice President of Capital Markets. Thank you, Mr. Mas. You may now begin.

Good Morning, and welcome to Regency's Fourth Quarter 2014 Earnings Conference call. Joining me today are Hap Stein, our Chairman and CEO; Brian Smith, our President and COO; Lisa Palmer, our Chief Financial Officer; and Chris Leavitt, Senior Vice President and Treasurer. Before we start, I'd like to address forward-looking statements that may be discussed on the call. Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. We also request that callers observe a 2-question limit during the Q&A portion of our call in order to give everyone a chance to participate. If you have additional questions, please rejoin the queue. I will now turn the call over to Hap.

Thank you, Mike. Good morning, everyone, and thank you for joining us. Later on the call Lisa and Brian will cover the exceptional results that Regency delivered in all facets of the business in 2014. I would like to first take this opportunity to briefly review the extent of what Regency's team has accomplished over the last 3 years. We increased percent leased in our operating portfolio of more than 200 basis points to nearly 96%, while rent growth grew to 12%. We achieved same property NOI growth of 4% for 3 straight years. This was driven by the combination of our high-quality portfolio, historically low levels of new supply and robust tenant demand across our markets from anchors, small shop retailers and restaurants. We completed the development of more than $500 million of high-quality shopping centers that are generating average returns of 8%. With the current spread between our developing yields and existing market cap rates, we continue to create value for our shareholders by capitalizing on these distinguishing core competency. We astutely manage our balance sheet that compares favorably other REITs with a net debt to EBITDA among the lowest in the sector. And in spite of the investments to enhance the balance sheet, we averaged nearly 6% annual core FFO per share growth. These achievements translated into returns for shareholders approaching 90%, which represents a substantial outperformance of the shopping center peer average. Even though I'm proud of these results and Regency's progress, I'm even more excited about Regency's future prospects. Brian, Lisa and I firmly believe that we will continue to distinguish Regency and grow shareholder value by persistently executing Regency's tried and true strategy of, first, sustaining superior NOI growth from a high-quality portfolio that is primarily grocery anchored. Second, developing and redeveloping great shopping centers at compelling spreads. Third, enhancing a strong balance sheet through organic earnings growth and cost effective match funding. And finally, engaging and focusing a talented team that is employing best-in-class operating systems. Lisa?

Thank you, Hap, and good morning, everyone. Our 2014 results were strong. In summary, core FFO per share was $2.82 for the year, representing an increase of more than 7%. Full year same property NOI growth, excluding termination fees, was 4%, including a net positive impact from redevelopments of 70 basis points. And as Hap said, this marks the third consecutive year of 4% NOI growth. Importantly, base rent growth continues to be the largest contributing factor. The portfolio averaged 95% leased throughout the year ending at 95.8% and spaces less than 10,000 square feet gained 90 basis points year-over-year, ending the year at 91% leased. As Hap said, we are proud of how we've enhanced an already strong balance sheet by taking measured steps to deleverage and capitalizing on opportunities. Cost effectively maintaining a conservative balance sheet through organic earnings growth and match funding remains a critical component of our strategy. The forward equity offering we completed in January, together with our fourth quarter ATM activity is consistent with this strategy. In terms of the forward sale, the amount of capital was committed to us at the share price on the offering date, and then we will draw down the proceeds and issue the shares over the next 12 months as the identified uses occur. As for the use, we closed 2 acquisitions in the last weeks of December and are working to close an additional acquisition opportunity. We will also fund development spent throughout 2015 and address our unsecured bond maturity in August. In addition to this forward sale, we also raised approximately $55 million through our ATM during the quarter. With respect to our earnings outlook for 2015, as noted in our press release in January, the offering has no impact on our previously released guidance for core FFO per share. The only impact is to acquisitions and dispositions. Our updated acquisition guidance range of $0 million to $80 million captures a potential opportunity and we reduced the high end of the disposition guidance by $65 million. In essence, a $145 million net increase in capital required for 2015. And the offering is the funding source for this capital requirement. Brian?

Thank you, Lisa, and good morning, everyone. I also want to express how pleased I am with the fourth quarter and the 2014 operating results and the continued strength of the portfolio. I'm proud of 5.3% fourth quarter same property NOI growth and I'm certainly proud of full year NOI growth of 4%. But especially for achieving it 3 years in a row and also ending the year at 95.8% leased. What we've accomplished in terms of development is equally gratifying. In 2014, we started a $160 million of new ground up projects and completed nearly $100 million of high-quality shopping centers at close to 97% leased. These 4 completions had an average return on incremental costs approaching 10%. I introduced most of these development starts on prior calls with the exception of our fourth quarter start, The Village at La Floresta. La Floresta will be an 87,000 square foot Whole Foods anchored center located in North Orange County in California. It boasts very strong local trade demographics with average household income of $105,000 and a population of 113,000. The project is already 75% leasing committed and is projected to generate a spread of approximately 250 basis points, above private market cap rates. The fresh look design, tenancy and placemaking features at La Floresta will clearly place it as one of the top neighborhood and community shopping centers in Orange County. Despite the height in competition, I expect our development capabilities and presence in target markets, as well as relationships with key retailers, will enable us to continue to deliver an average of $150 million to $200 million of developments and redevelopments annually. In terms of fourth quarter acquisition activity, as Lisa said, we acquired 2 properties in December. The first, Indian Springs is an ATB-anchored center located in The Woodlands master planned community, North of Houston. We've owned a 50% interest in this property for some time and we acquired our partner's remaining interest this quarter for nearly $27 million. Our second acquisition is Broadway Market, a mixed center located in the heart of Seattle. The center encompasses an entire block in Seattle's more densely populated neighborhood Capitol Hill, which has a population of 223,000 and average annual incomes approaching $100,000. It has a 111,000 square feet of retail and 30 residential units, and is anchored by Kroger's QFC banner with very strong sales volumes. These acquisitions, together with those previously announced, as well as the developments we've completed and the properties that we sold during the last 3 years, have combined to enhance a portfolio that by all measures was already one of the best in the country. I'd like to briefly comment on Albertsons' purchase of Safeway and the merger between Staples and Office Depot. As you know, Safeway and Albertsons are divesting 168 stores. Six of the stores are in our portfolio and will be acquired by Haggen. One of the properties is in Seattle market, where Haggen has strong brand recognition as a good operator. The other 5 properties are in Southern California where Haggen will be new to the market. In any event, the real estate is strong and the leases are at very low rents. The office supply sectors problems are nothing new. We've been evaluating the situation for some time and have proactively worked to reduce our exposure. Today we have 11 fewer office supply stores in our portfolio than we did in 2009. The remaining 17 stores represent less than 1% of base rent. More importantly, they are located in great centers, with 15 of 17 internally graded as A properties. We think there will be significant demand for these boxes given the very limited supply of quality junior anchored space on the market nationwide. In any event, we have plenty of time to deal with the issue, as the merger will not be finalized until year-end and only 3 other leases have terms that expire prior to 2017. Tenant store closings are part of the constantly evolving nature of retail, which our teams anticipate. We aggressively and proactively manage our portfolio, and whether we're dealing with chain-wide problems or simply want to upgrade the merchandising mix, we're way out in front of the issue. In summary, we've spent a great 3 years. While I'm certainly proud of what we've accomplished, I look forward to continuing our progress and producing the results we desire and expect. The quality of our portfolio, our team's dogged ability to execute on our strategy and the current market backdrop give me confidence that positive momentum will continue into 2015. Hap?

Thank you, Brain. Thank you, Lisa. I would like to close by reaffirming our focus on excelling in each facet of the business. Growing earnings, NAV and shareholder value, and distinguishing Regency among our peers and within the REIT sector. We thank you for your time and we'll now turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question is from Craig Schmidt of Bank of America.

The 2005 same-store NOI midpoint of 3.5% is lower than the 4% in 2014 and the 5.3% in your fourth quarter. I just wonder what are some of the factors that are impacting you to guide on that slightly lower performance?

Craig, it's Lisa. I'll start and look to Brian to add any color. First, I think, I'd be remiss if didn't say how proud we were of the fact that we did achieve 4% for 3 consecutive years. And remind you, even pointing to some of our prepared remarks, that our strategic goal is to sustain 3%-plus NOI, same property NOI growth. And obviously, you know our sector well, even that's not necessarily going to be easy for everyone to achieve, but we believe that we will be able to sustain 3% NOI growth because of the quality of the portfolio, as well as some of the redevelopment efforts that we're doing. And so if you think about the components of growth, over the last 3 years, we have had some lift from increasing our percent leased and then also narrowing the gap of percent leased to percent rent commenced. So we've had some of that and that contributed to our 2014 growth. And then looking to 2015, we'll still gain some from having more rent paying tenants. But clearly, that is decelerating just from the fact that we're nearly 96% leased.

Yes. Craig, I guess I would add that -- there's a few things. While we have really strong base rent growth than we're forecasting, I think, we will continue to see the kind of results that we've been turning over the last 3 years in that regard. We may be conservative right now at this point in terms of looking at prior year recoveries and we're showing some drag there, time will tell that we can do better than that. We certainly hope so. And then we're up against some pretty big other income, things last year like a payment from Kroger in Ohio and [indiscernible] that we sold out in California. We haven't identified anything specifically to replace those. So there's probably a little bit of conservatism until we have better clarity on those.

And just finally, I'll pipe in and say, it would be really nice on this call next year to be able to say 4% 4 years in a row, and the team is really focused on enabling up. Brian, Lisa and I had a talk about that.

Okay. Sounds like you'll be going for the four-peat.

Yes.

Just -- one question just because you guys do have a broad focus geographically. Are -- I know your Houston exposures isn't all that great. But what are your expectation is the impact on oil on those shopping centers? And are you hearing anything to date?

I don't think, Craig, that the impact on us is going to be meaningful at all. I mean, first of all, the economy overall is very diversified. There's -- it's been white-hot. I think it's fair to say that there's got to be a deceleration, but Houston is a strong market, Texas is going to continue to grow. I think, the impact is going to be probably greater on office and multifamily. If you just look at our portfolio, it's been established there for a long time, it's in very affluent areas. Our average household income in that portfolio is $140,000 and we're occupied greater than 98%. So -- and they're also mostly master planned communities with the Woodlands and Cinco Ranch and the likes. So you've got some protection. I think if we had some land that we closed on with the expectation of maybe some office mixed use it might be a different story, but there's none of that going on.

The next question is from across from Ross Nussbaum of UBS.

Jeremy Metz, I'm with Ross. Just thinking about the small shop side today, can you talk about -- have you seen an increase in mom-and-pops looking for -- to lease space? Or is this still largely national and regional tenants taking space then? And second part of that, your occupancy is now 91% for the small space. How much higher do you think you can push it and sort of what's baked in the guidance for '15?

I don't -- we haven't seen much difference. I'll tell you the leasing is still about 20% mom-and-pops. I think it's important that we identify kind of what we mean by mom-and-pops. None of the retailers or restaurants that we're dealing with would be first-time operators who just decided to open up a business. I mean, these are people who have been in business, they're either -- it may be that they have 1, 2, 3 stores. And we're really big on, frankly, having local operators. Because if you look at the whole millennials, what are you reading in all the researches? That they like new, they like fresh, they like authentic, they like local. And they can react, particularly the restaurants, faster than the national chains. So we do about 20%. And just kind of some examples of the people that we deal with would be -- that we call mom-and-pops, would be Lily Rain in Houston. This was the guy who started Francesca's chain, took it public and then decided to leave that and he opened up his first store at our Woodway Center in Houston. Out in California, this guy, Chicken Charlie's, he was on ABC News. He's got tremendous publicity and press because of his operation which he ran out of a food truck. We opened him at Balboa and have lines out the door and the press is covering him now just because of the sensation. In terms of where we are now. We're at 91%. I think we will -- we should be able to blow through 92%. Don't know exactly how high it goes, but I would tell you our pipeline today is stronger than it has been in some time. It's about 50% of the remaining vacant spaces have activity going on right now, whereas the last 4 quarters average is more like about 43%. So I think it's going to keep going, and I'm not sure how high it gets.

And Jeremy, I will just add from just a pure mathematical standpoint. If you look at our percent lease for our anchors being nearly 99% leased and our guidance for 2015 of actually the high end of percent lease guidance being 96.5%, that obviously all have to come from small shop space.

Okay. I appreciate that color. And then second one for me. Lisa, just -- with the debt coming due, obviously, I think $250 million of the hedge and then just -- it looks like with the forward equity offering, you're obviously choosing to use that method to pay down some of that in order to bridge that gap versus using the term loan that you have existing. Just some of the thinking there versus using the term loan given what the rate it's at, it's pretty cheap cost of capital there.

Yes. Just to remind you that we did decrease our disposition guidance. So the equity is going to fund some of our new investment as well. And then we do have a $350 million bond maturity in August. We've hedged, basically, $250 million of that. The acquisition opportunity that we've also identified as a use for our forward equity actually has a mortgage on it. So we'll be assuming some debt, cash is more or less spongeable. So the debt that we're assuming on that property, in essence, is what we'll -- we're going to be applying that and paying down the bond, if you will. So instead of refinancing at the full $350 million, we'll probably do somewhere between $250 million and $300 million. Does that make sense?

Yes. Appreciate the color.

The next question is from Christy McElroy of Citi.

Brian, just wanted to follow-up on The Village at La Floresta. Can you discuss the competitive landscape of that location? It seems like there's a fair bit of grocery presence already including 2 Sprouts nearby. And then just given the number of Whole Food deals you have in the pipeline, can you talk a little bit about the extent of your partnership with them in regards to development and new location?

Sure, Christy. Actually what's interesting about La Floresta is I wouldn't call Sprouts a full-service gourmet grocery store. This is the only full-service gourmet grocery store in North Orange County. The nearest Whole Foods is 15 miles away. So what we're finding is, because there is such demand for that kind of use that we're literally getting our pick of the litter when it comes to the small shops, which is one of the reasons why we emphasized in the introductory remarks the merchandising aspect of our Fresh Look approach to this. Whole Foods, we -- as you know, we did 5 new development starts with them this year. We have come a long way with them. If you look at the end of 2008, we had 4 Whole Foods in the portfolio. Today, we have 17 and we have a pipeline of another 11. And that's combination of development, redevelopment and the acquisition that's coming probably this next quarter or this quarter. So we just think the world of them. Anytime we have a Whole Foods, you can guarantee that it's an area that has both high income and high education, because those are the 2 most important criteria they look for. And those are areas, obviously, where you have the ability to grow household income and enhance drive sales and drive rents.

Okay. And then Lisa, just to follow-up on some of the question on same store NOI guidance. Can you just remind me, does your same store NOI growth include the impact of redevelopment? And then just looking at 3% to 4% forecast in the component, can you give us a sense for what leasing spread could look like this year? Does your higher occupancy give you sort of more pricing power? Or if you get up into 96%-plus occupancy range, is that incremental leasing sort of that harder to lease space that you can see lower spreads on?

Brian said he'll take the leasing spreads. I'll follow-up with the same property.

Yes. I mean, the leasing spreads, we expect would continue to be strong. The fundamentals are strong. We know there's no new supply with this tremendous demand out there. And we also know that from our own experience that as soon as you get to 95% lease, you definitely have more pricing power, just pure supply demand. I think if you look at 2014, the difference between those centers that were over 95% and those that were under 95%, have about 420 basis points difference in the rent growth spreads. So we're starting to get -- we're -- we got pricing power in almost all of the markets now. I mean, if you look even at the markets that have lagged today that have maybe been a drag on rent growth, North Florida, Arizona and Sacramento and Central Valley, all of those markets are at least 95% having enjoyed real strong occupancy gain. So I think it's certainly -- there's nothing that would make us less optimistic that we'd be in double-digit rent growth for next year.

And then on the same property, we do include the impact of redevelopments for the quarter. It was 100 basis points and 70 basis points for the full year, positive.

Our next question is from Jay Carlington of Green Street Advisors.

Lisa, I think you mentioned the strength in the base rent component this quarter. So curious what's driving that? Is that higher rent steps? Or redevelopment? Or are there any onetime items in there?

I'll let Brian -- I mean, basically, nothing onetime. It's percent, basically, effective rent paying or percent commence, whatever you want -- whichever term you want to use, that's significantly increased. And then also just higher percent -- just higher rent steps. What the team has been really focused on, getting mid-term rent steps, more contractual rent steps at a higher rate. And we've made a lot of progress towards that. But I'll let Brian add some color.

Yes. No, it's -- again, it's kind of odd view to sort of well balance. We had some other income, as mentioned earlier. The rent steps Lisa just talked to were very strong. I mean, in the fourth -- I'm sorry, the rent steps were 2% for all leases versus 1.3% for the whole portfolio. So I'm not sure if that answers it...

It's across-the-board, but primarily -- it's the underlying fundamentals of, basically, base rent growing.

Okay. Okay. Great. And maybe switching gears...

And base rent, obviously, also impacted just by the strong rental rate growth we've had over the past year as well. I mean, that's all -- everything contributing to it. And we expect that to continue into 2015.

Okay. Great. And maybe switching gears. I know we haven't talked about your land bank in a while. I'm just kind of curious that $56 million in market value you have there. What do you think has happened to that value of that land over the last year? And maybe as a follow-up, what's left in that bucket?

I don't think it's necessarily increasing value. It's down from about a $150 million a few years ago, probably one of the biggest pieces in it was a project that we're starting out in Southern California, it's going to be a development with Target, Lowe's and several others, had it all leased and then the market went bad. And I think, it looks like we've got activity on that, we would like to see that sell this year. We're kind of hoping that we reduce that by another $10 million in 2015.

Is that all allocated...

Let me just -- I'm sorry, Jay, let me clarify. Were you -- you were talking about the expansion land that's adjacent to our properties that's on our guidance page or were you talking about land bank. Because those are different. Because we mark land to market every quarter, but not if it's adjacent to an operating property and it's not -- basically, on the balance sheet separately.

Okay. So all that $56 million or so, that's just -- without parcels and land next to your current?

Correct.

The next question is from Mike Mueller of JPMorgan. Michael W. Mueller - JP Morgan Chase & Co, Research Division: It looks like you have 6 co-investment relationships. And if you're looking out, say, the next 3 to 5 years, does that number stay static? Does it go higher? Does it go lower?

I would expect that it would stay static. We're really happy with our partners. As you know, Mike, that they were an important part of our growth when you look back 15 years. And over the past more recent years, they've stayed pretty static.

I think, as a percentage of our NOI that's involved in partnerships has incrementally come down and I think it will continue to come down. And we're not looking to add any new institutional partnerships at this point. Michael W. Mueller - JP Morgan Chase & Co, Research Division: Okay. Are they expanding? Like what portion of them are expanding?

I think, they'd like to expand, but we're -- and we did the Broadway acquisition up in Seattle with our partnership with the State of Oregon. And also, I'll remind everyone that we have distributions in kind in all of our partnerships. So to the extent that those partnership -- we end those relationships, and there's no desire to do that, we've got great partners, we would end up with our pro rata share of properties.

The next question is from Jim Sullivan of Cowen and Company.

I wonder, you have this -- given that the new development pipeline that's been expanding and it's expanding in many different markets, I wonder if you could kind of remind us, number one, what kind of a limit, if any, do you have or do you think about in terms of how much of your capital you want to be allocating to ground up new development, number one? And number two, I think, Christy alluded to it earlier, clearly, Whole Foods is expanding. I wonder if you could just give us a feel for the ground up development with the gross or anchored centers. Is it because of the anchors entering new markets? Or is it because of the anchors looking to just have a newer better footprint into the existing market?

I will make a quick stab at the second part of that question, and I think the answer is yes. I think they're looking for better footprints, better infill locations and sometimes new markets. But the anchors focus has been more infill and that's been aligned with what our current focus is. From a capital allocation standpoint, we have established a guideline of -- or a limit of 2x EBITDA as far as our exposure, including our future commitments to development. And that's a little bit under $900 million. And that's something that ought to grow organically is our -- in effect, our balance sheet grows. At this point in time, we're less than half of that number. We're still looking to -- looking for opportunities, but there's not as many opportunities that meet our criteria as far as the opportunity to develop great shopping centers at compelling spreads. But we do feel in spite of competitive landscape, I think as Brian indicated and I indicated on my remarks, we ought to be able to average $150 million, $200 million of new developments and redevelopments a year. We could do somewhat more than that if compelling opportunities that met the criteria were available.

And Jim, while we're heavy on Publix this year, I mean, we certainly are not limited to just them. I think it was reported in one of the news outlets that we're working on a Wegmans opportunity, and that's real. We think the world of them. We got Kroger concepts that we're working on. So we're doing a lot of different grocers. And in terms of where we're doing them, it's -- we have some where the grocer is moving into a new market, most of you like the Publix like we started at Willow Oaks in North Carolina, as Publix has moved up into Charlotte. But by and large, it's high barrier markets where it's tough to get stores going. And I think, La Floresta is an example of that. Whole Foods have been trying to get the North Orange County for a long time. They're certainly well represented in Orange County and in a lot -- in the whole Southern California area. But it just takes time to do those. Same thing with Belmont in Washington DC, and that's a master planned community that's been in the works for many, many years. And that was our only opportunity since there will be one grocery center in that development. So mostly it's infill in existing markets, but every now and then we have something like the Publix still to go into a new market.

Our next question is from Ki Bin Kim of SunTrust.

Could you talk a little bit about your G&A cost run rate in the fourth quarter, it looks like your gross G&A went up. Pretty measurably but also your capitalized portion of that went up, which is major net G&A looked pretty static, I'm just curious what the run rate looks like going to 2015. And if there's any reasons why those things change during the quarter?

No. The G&A was higher in the fourth quarter. There's a portion of our incentive comp plan that's not finalized until the fourth quarter. So we'll always see more in G&A in the fourth quarter assuming that we have incentive comp to pay more in the fourth quarter than in the prior quarters. We do accrue for some, but not for all. And then for our guidance for G&A that we provided in mid-December was flat to up 3.5%, and that remains unchanged.

But the capitalized portion is that just -- is it just a pro rata movement?

Again, the capitalized piece is -- the part of this incentive comp that we don't finalize until the fourth quarter is related to our development program. And so a lot of that, that was -- that happened in the fourth quarter was actually capitalized -- capitalizable incentive comp. And it's just a result of our increased development activity. And we would expect selling into 2015 that capitalized development costs will actually be down some. But still in the -- not as high $16 million but stays in the $12 million to $15 million range.

That incentive comp is paid based upon development performance on the back end once the properties are complete and leased up. And that's -- just so you know, it's the field that earns that -- will earn that incentive compensation.

And that all gets factored into the development yields that you disclosed, right?

Of course. Yes.

And just the last quick one. What is the average cash rent step up for your portfolio on average?

I'm sorry, I didn't hear the question.

What is average cash rent step up that your portfolio generates in any given year? The embedded bumps?

You mean, the mid-term contractual rent steps.

Yes. Yes.

Okay.

So for the entire portfolio, our midyear rent steps are 1.3%. Although as I mentioned earlier, we have really been focused on that part of the business for the last of couple years. And for 2014, all the leases we signed had an average of 2% rent bumps and we get it 87% of the time, which is a lot higher than historically is in the average.

So our objective is to take that 1.3% contribution to NOI growth up to 1.5% or 1.6%.

[Operator Instructions] And our next question is from Tayo Okusanya of Jefferies.

My question is around the acquisition outlook. Just curious, again, if there are opportunities to do transactions of decently large portfolios in markets that you guys want to get more of a presence, and very similar to what you were trying to do with AmREIT, whether those kind of opportunities exist either in the private or public markets?

There's a limited number of large -- I mean, of portfolio opportunities and/or one-off opportunities that meet our criteria that have superior NOI growth. And just once again, when we buy a shopping center, we're going to finance it, primarily or kind of our go-to financing is sell a shopping center at roughly comparable cap rates that has a much lower growth rate. But it's a very competitive market out there and not a lot that meet our criteria. But our team works very -- Brian's team work very, very diligently to find market transactions and has had a decent amount of success for finding great centers with good upside.

So that's helpful. And then just one more question on the small shop side. If you could just talk about any change in regards to demand from new types of tenant for that space or is it still kind of the same group of people who have been seen in the past 12 months to 18 months?

I think it's pretty much the same. I mean when we talk about the retailers that are doing well, those are the ones that are looking to expand. And that has a long list. But primarily, I would say the common thread would be anything that's related to health, whether that's restaurants, whether it's exercise places, athletic apparel, massages, those are really the ones that are in big demand. There's very few categories I'd say that where the retailers are struggling and aren't really looking in -- and you know that list, it hasn't changed, toys, office, tanning supplies, dry cleaners, books. Other than that, it remains very vibrant across-the-board.

We have no further questions in queue at this time. I would now like to turn the conference back over to management.

We thank you and appreciate your time. And wish everybody a great President's Day weekend. Thank you very much.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. And thank you for your participation.