Rithm Property Trust Inc. (RPT) Q1 2016 Earnings Report, Transcript and Summary

Greetings, and welcome to the Ramco-Gershenson Properties Trust First Quarter 2016 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, Ms. Dawn Hendershot, VP of Investor Relations. Thank you. Ms. Hendershot, you may begin.

Good morning and thank you for joining us for the first quarter 2016 earnings conference call for Ramco-Gershenson Properties Trust. With me today are Dennis Gershenson, President and Chief Executive Officer; John Hendrickson, Chief Operating Officer; and Geoff Bedrosian, Chief Financial Officer. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Additionally, statements made during the call are made as of the date of this call. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements made. Although we believe that the expectations reflected in any forward-looking statements are based on reasonable assumptions, factors and risks that could cause actual results to differ from expectations are detailed in the first quarter press release. I would now like to turn the call over to Dennis Gershenson for his opening remarks.

Thank you, Dawn, and good morning, ladies and gentlemen. This month marks our 20th anniversary as a public company. During that time, we’ve worked tirelessly to deliver value for our shareholders. This quarter is no exception. Barring The Sports Authority bankruptcy, our results were in line with expectations and positions us to meet our stated goal of consistently improving our high quality portfolio through redevelopment and capital recycling. For some time now, we’ve been telling you that our company’s focus is on large multi-anchor trade area dominant shopping centers in major metropolitan markets. So how should you view our shopping center ownership direction of choice in a retail market that is challenging, highly competitive and constantly evolving. First, we live in an interesting time. While there is projected to be a net increase in the number of national retailer store openings that open their centers this year, the marketplace continues to be bucketed by bankruptcies by both large and small national retail companies. We are also witnessing retailers rationalizing store counts to reflect changing shopping habits, the integration of omni-channeling and the closing of underperforming stores to refocus on the most highly productive and profitable locations. All of these trends favor well-located market-dominant shopping centers like those in our portfolio. With an average of five anchors per center, supported by a healthy complement of ancillary retailers, our centers are ideally positioned to accommodate the potential needs for an anchor to expand their existing premises as they close underperforming stores in the market or [indiscernible] for right-sizing their footprint to reflect the benefits of omni-channel as we have the flexibility and new tenant interest to accommodate these needs as well. Further, the number of anchors in our centers insulates our properties from the loss of any one retailer, like Sports Authority, while providing an opportunity to release the vacancy to new exciting concepts that wish to enter the trade area or provide an avenue for an anchor in an interior-located shopping center to move to our market dominant locations. In addition to the interest by national retailers who located our properties, as evidenced by the 15 anchor leases we signed in 2015 and the several additional anchor leases we signed in the first quarter, we’re also focused on densifying our large shopping center sites to maximize value across a broad spectrum of uses by the development of additional square footage. Further, we are pursuing our interest in placemaking which creates inviting environments where our customers and visitors can lean and we are committed to our community first programming initiatives, which builds community and customer loyalty with events that include bounce-backing inducements. All of these factors combine to produce a shopping center portfolio that can both weather challenging economic times and thrive in the environments where retailers continue to evolve their store formats and locations. In summing the status of our capital recycling program, we completed the disposition of our Troy, Ohio center in the first quarter for $12.4 million. We are finalizing a sales agreement for two centers, which had closed in the second quarter for just over $28 million. Also, we’re in contract to sell one of the last two centers in our Heitman joint venture and we have initiated the marketing of three Michigan centers, which we expect to generate at least $58 million. Lastly, we’re in the process of receiving final offer for the sale of the Aquia. All told, we reasonably expect to be able to announce the sale of approximately $100 million to $110 million by the time we report our third quarter earnings and there is a reasonable possibility that we will sell a total of $125 million by year-end. The net proceeds we will generate from the sale of these non-core assets, along with our retained cash flow of approximately $30 million, will allow us to fund all of our planned redevelopments, re-tenanting and center upgrades, as well as to further our goal of constantly improving our debt metrics and increasing our financial flexibility. Thus, with a well positioned portfolio, a strong balance sheet, an active capital recycling program and a talented management team who is committed to driving base rents, leasing our small tenant vacancies, re-tenanting underperforming retailers and executing on our value-add redevelopment pipeline, our company is poised to drive future growth. I would now like to turn this call over to John for his remarks.

Thank you, Dennis. Good morning, everyone. As Dennis said, we are clearly in a very transitional time for our industry. But for our portfolio, we generally continue to enjoy a good operating environment. Demand from tenants for high quality space has remained consistent and this quarter we were able to continue to execute on the leasing, redevelopment and operating goal I discussed during our year-end call. Let me first spend a moment on Sports Authority. We filed for Chapter 11 bankruptcy in early March and last week indicated that it likely will no longer seek to organize, but rather will liquidate. We have four Sports Authority in our portfolio, totaling 172,000 square feet and $1.9 million of annual base rent, which is only 1.1% of the company’s total base rent. Of these four locations, one store at Clinton Pointe in Metro Detroit was previously on the closing list and we already are in active conversations with multiple replacement tenants at not only accretive rents, but also significant upgrades in merchandising, which will help to drive value at the asset for years to come. We’re currently expecting to recapture the space sometime in 2Q and expect a replacement to likely open in the second half of 2017. Regarding our other three Sports Authority locations in Colorado, Wisconsin and Florida, it is currently too early to know their outcome. We do know that there is tenant interest for each location at rents sequentially equal to or above current levels, but it is uncertain if any or all of these leases will be purchased and assumed within the bankruptcy process. We expect to have more clarity on these locations in the next 60 to 90 days. Keep in mind, bankruptcies are natural part of our business and when anchor tenant liquidates, while often a net positive long-term, it creates a short-term drag on our operating results. The Sports Authority bankruptcy is no exception and likely will have a short-term impact on operating results, but it is too early to know its full effect. During 1Q, we took our $810,000 bad debt charge associated with all accounts receivable, including [March timeframe] for the four Sports Authority locations. This charge reduced our same-center growth for the quarter by 200 basis points since the four locations are all within our same-center pool. Without this impact, our same-center growth would have been 3.4% with redevelopment and 2.5% without redevelopment, right at the midpoint of our annual guidance, even against a strong first quarter 2015 comp. While we believe that the closure of the Clinton Pointe location is within our standard budgeted reserve, without further information on the other locations, we’re currently leaving our same-center guidance for the year unchanged. Now, turning to the balance of the portfolio, first on leasing. We finished the quarter at lease occupancy of 94.9%. Small-shop occupancy improved 20 basis points during the quarter and finished at 87.7%. Keep in mind, we typically lose small-shop occupancy during the first quarter of a year and lost 120 basis points in the first quarter 2014 and 90 basis points in the first quarter 2015. This current occupancy expansion shows that we continue to have good demand for our space that more than offset the closure that typically happen after the holiday season. In addition to gaining occupancy, we continued merchandising upgrades. For example, during the quarter, we converted vacant small-shop to acre space at Jackson Crossing [indiscernible] to Shops on Lane and Columbus and added a great local operator in the HW Home at Front Range Village. Thus, in additional to considering to upgrade the portfolio following, we are well on the way to achieve this small-shop lease occupancy goal I outlined last quarter of 88.5% to 89.5% by the end of this year. Regarding redevelopment, our current pipeline of projects was $75 million. During the quarter, in addition to executing existing projects such as starting a new Michael’s fleet for Spring Meadows, we started another expansion of our Town & Country shopping center, which will add quality acre to our already impressive acre line up [indiscernible]. Furthermore, before the end of the year, we expect to add $15 million to $40 million of projects, including our first phase of the placemaking and densification at two of our largest assets, Front Range Village in Fort Collins and Woodbury Lakes in Minneapolis. These additional projects added in the next few quarters will offset the $33 million of projects we will complete later this year. Our redevelopment pipeline is an important part of our internal growth plan and we expect to maintain a pipeline of at least $65 million. In summary, we are on target to meet our operating goals this year. Despite a potential short term issue related to Sports Authority, our properties are performing well. As Dennis mentioned, our regional dominant centers located in metropolitan markets not only mitigate, but also provide the opportunity and flexibility to meet an evolving retail environment. Now, let me turn the call over to Geoff for his prepared remarks. Geoff?

Thank you, John, and hello, everyone. Operating FFO for the first quarter was $0.34 per share, up 6% from $0.32 per share in the first quarter of last year. The year over year increase in operating FFO of $0.02 was primarily driven by a $0.05 increase in cash NOI from acquisitions, contractual rent increases and redevelopment properties coming online, offset by $0.03 per share from a higher share count, interest expense, G&A and lower management fee income. G&A was $731,000 higher this quarter when compared to last year and relatively in line with the fourth quarter of 2015. G&A in the first quarter of last year was lower, primarily related to employment vacancies that have since then filled. We’re reaffirming our previously stated G&A guidance range of $22 million to $23 million. I would like to take a moment to talk about our bad debt expense for the quarter, which impacted our operating results and was driven entirely by the Sports Authority. We recorded a bad debt expense of $807,000 for the quarter, comprised of $810,000 related to the Sports Authority, $348,000 for other bankruptcies and disputes, which is a normal run rate for us, offset by payment resolution and recoveries of previously reserved amount totaling $251,000. So without the Sports Authority bankruptcy, we would have posted a positive $3,000 bad debt adjustment, which speaks to the stellar performance of our overall portfolio. As John mentioned, we’re monitoring the Sports Authority bankruptcy closely to understand how our four locations will be impacted. We’re expecting our Clinton Pointe location already on the store closing list to seize operation at the end of May and we’re awaiting more insights on the remaining three stores. We will update you on our second quarter earnings call as we gain more visibility on how this might impact our full year guidance. Turning to our capital market activity, we entered into an agreement to extend our $60 million unsecured term loan with an original maturity date of September 2018 to March 2023. In conjunction with the extension, we fixed the variable rate portion of the debt to a weighted average spread of 1.84% or an all in rate of 3.49% when you add the current credit spread of 1.65%. Additionally, during the quarter, we sold two assets, Troy Towne Center in Troy, Ohio and a land parcel at the Towne Center at Aquia, generating total net proceeds of $12.7 million. We also repaid a $20.6 million mortgage loan, with an interest rate of 5.9% [on Troy marketplace into our initiatives] with a draw on our line of credit. On the balance sheet front, our net debt to EBITDA at the end of the first quarter was 6.6 times, unchanged from year end 2015. Our coverage ratios remained strong as our interest and fixed charge coverage ratios ended the quarter at 3.7 times and 3.0 times, down slightly from the year end 2015 as a result of our bad debt expense for the Sports Authority. As Dennis mentioned earlier, we have a number of properties in the market for sale. You can expect proceeds from these asset sales and retain cash flow to be used to fund our redevelopment pipeline and reduce leverage, which will increase our unencumbered asset pool and continue to enhance our financial flexibility. Finally, as part of our earnings package released last night, you may have noticed a few additions to our financial disclosure in the supplement. As part of our move to enhance transparency, I would like to highlight a few changes that include the following: first, on page 10, we added a summary of our portfolio; on page 11, which details our same-store property performance, we broke out our bad debt expense from other non-recoverable operating items; and on page 17, which highlights our leasing activity, we added more precise disclosure on tenant improvement, landlord costs and leasing commissions, including recalculating those costs for the previous three quarters. This change resulted from our desire to provide better CapEx disclosure. So we performed a detailed review of the costs associated with each lease we signed. We hope this information is helpful. So with that, I’d like to turn the call back over to the operator to open the line for questions.

[Operator Instructions] Our first question comes from Todd Thomas with KeyBanc Capital Markets.

First question, I know you have a bunch of anchor leases signed that are expected to commence throughout the year. Can you just talk about the timing of those in a little bit more details, what the commencement schedule will look like through the end of the year and how much annualized base rent is attributable to those anchor leases?

So we basically have about 15 anchor leases, we talked about in the past, starting throughout the year. Of those, only two have commenced already and the rest will be phased over the next three quarters, really. So most of the benefit you’ll see in the latter half of the year. I don’t have the total – unfortunately, I don’t have the total rents in front of me, so I’d have to get back to you on that.

And then you mentioned that the small-shop occupancy increased in the first quarter about 20 basis points, a little unusual from a seasonal standpoint, was the small-shop demand greater at the centers where some of these anchor deals were done, are you seeing any impact there, was it more broad based?

Absolutely, where we’ve [indiscernible] even where we haven’t where the tenants haven’t – the anchors that haven’t opened yet, but will open soon, we’re already able to lease up for that. And also the other thing that we’re benefiting from is the higher renewal rate overall and I think that’s partially driven through the anchor upgrades too from a standpoint that people see opportunities. They’re going to have opportunities in the future [indiscernible].

And then Dennis, just curious if you could talk about the buyer demand for the properties that you’re selling, where are cap rates on the deals in the Q that you discussed relative to what you’ve previously communicated I think is the 5% to 7.5% range?

We continue to see significant buyer demand, although it has moderated from what we’ve experienced when the private REITs were incredibly active although we are seeing some private REITs back into the market place. We will be selling different types of assets that we consider non-core. Throughout the year, some will demand healthier cap rates than others and I still think we will finish the year in the low to mid 7%s as far as the overall cap rate is concerned.

And just a last one, maybe for Geoff, as you look to sell the Aquia Office asset later in the year, I’m assuming it’s a drag on FFO. Is that right? And what’s the impact that that asset is expected to have on 2016 FFO and how should we think about that once the asset is disposed?

It’s bit of a drag, but we’ve incorporated the timing of the sale and the slight drag in our guidance. So it’s going to move how we’re looking at the year from a guidance range standpoint.

Is that sort of a midyear asset sales as far as we should think about it?

Yes. We got offers on that property right now and so we’re working through picking a winner.

Our next question comes from R.J. Milligan with Baird.

I was wondering if you could give a little bit more color about the types of retailers to potentially backfill some of the vacant Sports Authority’s space and whether or not you anticipate having to break those boxes up.

So first off, just talking about the tenants who are out there who we understand are looking to buy leases right now, it’s the usual suspects that you’d expect really in the sports category [indiscernible] for a multiple of our concepts and how they love it. So there is [indiscernible] are watching at the three remaining in our portfolio that are – we aren’t sure about what will happen to those. On the Clinton Pointe where we expect to cut back and we’ve been working on it, we likely will end up splitting the box and again we’re talking to retailers, potentially specialty grocer, but most likely will require a split of the box.

Just based on your comments earlier in the call, you anticipate that you could backfill those four spaces for rents; where at current levels are above if in fact you do get those spaces back?

Yes. Based on what we have, definitely. There might be – obviously you have a plenty of capital, but from a rent standpoint, we definitely expect to be at or above where we are today.

Our next question comes from Collin Mings with Raymond James.

First question just for Geoff on the balance sheet, where would you like to get the debt to EBITDA, I think following the asset sales, I think you’re going to be close to right around 6.3 times or so. Is that kind of where you’d feel comfortable or do you want to continue to see that leverage go a little bit lower?

I think I stated on the year end call that we’d like to get that debt to EBITDA number down in the low 6s. So our stated goal is 6.2 to 6.4 times by the end of the year. We hovered closer to 6 times as a result of asset sales, we’re comfortable with that. So like I said, I think we’ll be happy operating in the low 6 times and if we hop up to the higher 6 times, it would be with good reason and a plan to get back down. So generally speaking, you can think about it in the low 6 times range.

And then John, over the last couple of calls you guys have talked about wanting to drive some ancillary income from the portfolio, can you just maybe update us on those initiatives?

Yes, we talked about that, I was hoping to – I’ve talked about adding at least $500,000 over what we’ve got in the past, because there certainly was an opportunity. We’re only in the first quarter and that’s the kind of thing that doesn’t have huge lead times. But the pace we have right now is certainly we’ll achieve that or exceed it. So I’m very optimistic about the program and [wishing to be] executing it well.

And then just maybe bigger picture, you guys discussed obviously the bad debt reserve in detail as it relates to the quarter, but maybe just update us a little bit more on the watchlist, I know, overall more optimistic tone about the retail environment, but just maybe tough on what else might be on your watchlist as we go through the rest of the year?

We basically from an underwriting standpoint as we mentioned, we basically had – we keep – we always budget our reserve growth for unexpected and typical bad debt, and as Geoff mentioned, in this quarter, it’s outside of Sports Authority, bad debt has been actually good, especially from a standpoint we’ve been able to achieve some old collections that helped to reverse some bad debt expense. So we certainly don’t see anything out there that is out of the ordinary, I mean, our unexpected vacancy that we’ve budgeted was essentially equal to what we saw last year and we certainly don’t see beyond the Sports Authority any gains out there that would concern us. We’ve had [fabrics of five], but we only had two of them and they hopefully liquidating, but we only had two in that certainly sits within our reserve. Our [indiscernible] filed yesterday, but we have one co-location that we’re already planning to upgrade anyway. So there’s nothing big out there that we’re worried about.

And then just one last one, Dennis, just as you think about from a strategic standpoint where we are and kind of the focus clearly on redevelopment efforts, maybe update us on what you are seeing in terms of acquisition opportunities, are you seeing anything that might be something opportunistic that you would look at for your portfolio or are you pretty much focused just on redevelopment right now?

Well, let’s say this, our primary focus is absolutely on adding value in core portfolio. We remain selective and opportunistic, we have looked at a couple of opportunities, but it needs all of those elements that we’ve ticked off in the past that you are well familiar with. And more often than not, there is still a very healthy interest in high quality assets by institutional buyers who are willing to pay significant sums, well above what we would consider reasonable. So I think we find an opportunity that makes sense for us, we’ll go after it. But as of this moment, we really haven’t come across any of those.

Our next question is from Jim Lykins with D.A. Davidson.

Just a couple of quick questions. For the TSA spaces, you mentioned possibly supplying those up and with the prospective tenants you’re talking to, you mentioned being able to probably get better rents, but can you just give us a sense for timing, how you would anticipate it taking the TIs to be completed?

We’re actively negotiations, we’re talking to people right now. We’d expect to be able to hopefully lock down enough leases in the next three to six months and then probably open another nine to 12 months after that. So our expectation is to be able to get somebody open by the end of next year, but it’s possible it might fall into spring of 2018. Now, that’s specifically on the Clinton Pointe location, obviously we’ll have to see how the other three, what happens with them in the bankruptcy.

And for the growing redevelopment pipeline, going beyond a $100 million to $125 million that you’ve got – the current projects, could you tell us again what that rolling number is going to be and how long that’s sustainable?

So what we’ve talked about is at least, maintaining at least $65 million and generally believe that the range that we talked about $65 million, $85 million, maybe $90 million and certainly it’s something we certainly expect to maintain in the near term, because the pipeline that we have goes out for at least a couple of years.

Our next question is from Chris Lucas of Capital One Securities.

Just a couple of quick questions. Geoff, really appreciate the additional disclosures, it’s very helpful. I guess one question I had is can you maybe walk us through the difference in the calculation between how the TI leasing commissions were previously calculated and what the differences to how you’re calculating now because there seem to be some pretty big differences quarter to quarter?

So we took a review of the cost allocation of our preleasing to – in our leasing to better reflect the cost associated with each lease, rather than generally use just the incremental cost above the leasable conditions. So now the information reflects both TI, tenant allowances, landlord costs and leasing commissions, including the white box cost previously excluded from that number. So that’s the biggest differential, the delivery of the white box. And so as we looked at that disclosure, we thought it was appropriate to now adjust it accordingly.

And then I guess just kind of beating up on the sporting goods category, I guess you’ve got a couple of the Intermountain, so I was just curious, since your private company, sort of what you’re seeing from them in terms of sales trends and whether or not you have any concerns with them, given the weakness generally in the sporting goods category?

We have a couple of locations, but we – and from what we’ve seen, they seem to be able to perform and they have their niche and they are – especially now that they have – we’ve downsized one of them in the location, they seem to be – and we’ve talked actually about downsizing actually another one, but they seem to be generating, they found their niche for their consumer and they seem to be doing fine. So that’s not one that we’re worried about at the moment.

Our next question comes from Flora Sandicum with Boenning.

I had a quick question in terms of I guess capital allocation and Dennis if your view is that the market is getting expensive for acquisitions, does that mean that you feel more inclined to continue to call the bottom 20% of your portfolio at this stage?

Well, let’s start with this first, the acquisition market has been softening for some time and yes, we were historically able to find opportunities in some [indiscernible]. But we will continue, as we look at the portfolio, as we look at our metrics, and as we look at the direction that we’re headed for the company to identify those assets that are non-core to the philosophy that is driving us and those will be disposals.

One of the things – as I was looking at your portfolio, if I look at your top 50 assets, that’s almost 90% of the value of your portfolio. Do you think you’re going to have maybe fewer but more valuable assets in 18 months’ time? Is that the goal?

Absolutely.

And I guess one of the other things is that presumably that also means that the reinvestment capital right now is achieving higher returns, shouldn’t that theoretically be all of the focus for the company at this point or do you think that there is an opportunity that you might be able to add on to a particular market with some assets and you’re going to still be opportunistic on potential new properties that come by?

I would say, yes, all of those things. We indeed are achieving some healthy returns, 9% to 10% on average with the value-add redevelopments. We have a very significant, as we’ve identified, retenanting program that we’re well into and over the next several quarters, we’ll be announcing additional changes in our anchor line up as we expand centers et cetera. So our primary focus is indeed on driving value in our core portfolio. As I said, relative to acquisitions, we’ll be incredibly selective in making an acquisition and it’ll be a compelling reason for us to do that.

One last question maybe, in terms of – I just noticed that you have three temporary anchors, could you give any more color, I mean, the rent is obviously very low, are these basically backstop tenants or do you think – what are the long-term plans with those sponsors?

They are most likely backstop, they actually, I think, expired right at the end of the quarter. So it’s a little misleading. So they’re just now mark to market, but they are just backstopped until we find a replacement.

And those will be more like your average anchor rents in the sort of the low teens?

That would certainly be the expectation, yes.

Your next question comes from Vincent Chao with Deutsche Bank.

Dennis, just in the context of your comment in your opening remarks about store rationalization as opposed to just bankruptcies, just curious as you look at your anchor rollover over the rest of the year and also your rollover in 2017, is there anything abnormal that we should be thinking about in terms of types of anchors that are rolling there and the risks of some rationalization?

No, not at all. The anchors that are rolling in the balance of this year and next year, [in the main] are all strong performers and we don’t expect any surprises relative to any fall out.

And then just going back to the guidance, the three stores, it sounds like there’s not a lot of clarity in terms of what’s going to happen with those three, so no change in the outlook. But I’m assuming the one store that you’re expecting to close in the second quarter that’s been taken out of guidance already or everything has been locked in at this point?

That’s been taken out – that’s been incorporated in the guidance that falls into, that’s Clinton Pointe, that falls into our unexpected vacancy category.

Just a normal course type is correct, I guess.

Correct.

So no specific adjustment for that particular property?

Correct.

And then I guess in a worst-case scenario, I mean, I guess it’s 1%, maybe, or we should expect 100 basis point impact to same-store NOI if everything goes away?

Vin, it’s tough to predict where we are, how that’s going to get impacted, we don’t have any visibility into what’s going to happen with the three remaining stores. Like John said, we have a lot of activity around them from a couple of retailers. So I would prefer not to give a potential impact because we don’t have any visibility. What I can say is think by the time we get together for our second quarter call, we should have some visibility on that and we can give you some more precise direction.

And then just maybe a last question, just on the renewal spread, it was a little bit lighter this quarter than it has been in the last few quarters, we’ve seen that in a couple of your peers as well. Is that just sort of an option mix kind of thing or was there anything notable in the renewal spread this quarter?

Keep in mind, especially in the first quarter it skews this way, but renewal – over 70% were option exercises and 80% of those were – of those option exercises over 80% of our anchors, which ended up driving it down. The other thing we have is we have on a couple of these properties where we’re going through redevelopments, we’ve done some short-term funds, where we kept tenants in place at flat rents which also are driving down – drag in that renewal down a little bit. I’d say like 40 basis points was just from that point alone.

Our next question comes from Craig Schmidt with Bank of America.

Could you talk a little bit about your comfort with the fresh market stores given the recent closures?

So only have – we have two fresh market locations and the ones that we have, I think we’re comfortable certainly in the near-term as they are not up any time soon. Obviously, it’s something we’re keeping an eye on and their recent purchase and I think their credit ratings was certainly not the best, but it’s not something – it’s something we’re keeping an eye on, but not something we’re worried about in the very short term.

And how both the Winn-Dixies in the same markets?

Again, we have two Winn-Dixies, there especially you have – the rents are certainly low. The ones that we have we would like to get back and they actually are choosing to invest in them. So I think that’s a place for – again, as we get those back, I think it would be a net positive for sure.

Our last question comes from Michael Mueller with J.P. Morgan.

Just quick question, so you giving us some data points now, tenant improvements, leasing commissions. I was wondering can you give us some data points on maintenance CapEx too for the portfolio and just some general numbers about where that’s been running and trending.

Mike, we’re working on trying to get a more precise disclosure for you on that number and I think – and as I think I said to some of you, our goal in the second half of the year is to provide that for you in some detail. So it’s work in progress right now. But I can tell you we’ll have that for the back half of the year from a disclosure standpoint.

There seems to be no further questions at this time. Would you like to make any closing remarks?

Yes, thank you. Ladies and gentlemen, as always, thank you for your participation, your interest and attention. We look forward to speaking with you again in approximately 90 days. Have a great day.

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