Safehold (SAFE) 26 Apr 232023 Q1 Earnings call transcript

Good afternoon, and welcome to Safehold's First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded.

At this time, for opening remarks and introductions, I would like to turn the conference over to Pearse Hoffmann, Senior Vice President of Capital Markets and Investor Relations. Please go ahead, sir.

Good afternoon, everyone. us Safehold's joining call. for you today earnings for Thank

Brett Sugarman, we Chief and On Officer. and today, Jay Chief Chief Chairman Officer; President the call Alvarado, have and Financial Marcos Executive Investment Asnas, Officer;

X:XX a afternoon, call on our quarter Eastern found the the There details p.m. on Investors This presentation website beginning at can be The first plan link. of through XXXX with to The a replay we XXXXX. today. safeholdinc.com conference that dial-in presentation is our replay results. at a of be this walk code by confirmation Time will clicking for XXX-XXX-XXXX

Before I forward-looking. this to in earnings like turn call which I'd historical the be over Jay, are everyone may statements to remind that not call facts,

from our by expressly SEC to Safehold or may statements could update statements, actual forward-looking these that factors intent as differ and reports. in these required risk Our differences detailed forward-looking law. obligation cause materially these disclaims any are the results except

I'd Jay Sugarman. Now with CEO, Chairman like to over that, Jay? and it turn to

thanks Pearse, today. joining everyone Thanks, us to and

liquidity Safehold Safehold mostly investors unique The position we for class asset building created way base. wealth the now participate historically leadership significant closed lease up to was the and offer shareholder an can quarter about continue its merger getting so in ground in an modern and continues and first improved to setting industry. our company to with a that has expanded do

the on positive estate in ground a drag transaction real on the activity development, as sector. challenging a remained consequently and activity merger the lease While was market a backdrop whole, and transaction

capital more growing of many estate structures a to the Safehold hand, beginning appreciate lower lease owners concern, being resilient is debt value ground low other maturity we and part future. with create profile that its in risk and provides. now real limited On the of capital the forward help capital look long-term are needs more markets to availability very a And cost solutions the to becoming the the a to

cash through to our growth value three sizable long-term low CARET. our risk large capital portfolio, more of goal contractual superior primary inflation and three, separate of lease that opportunity; flows our addressable One, the widely and now we and the kickers must be with inside market go-forward Our units of very long-term portfolio get platform focus. the understood growing to potential risk with sale in generate key and appreciation which highlight returns out our the areas alternatives; low comparable ground two, our

Adding in intrinsic a is of of the begins below to strong balance make shares the believe price value the sheet stabilize. and expand again with to we apparent market and we well will attractive business work business, long-term that readily our our as debt, current

me that quarter. background, over it Marcos to And let and Marcos? with to Brett turn recap the

Good everyone. Jay. you, Thank evening,

merger in seeing merger. the market, I to recap crawl. of the behind us as in backdrop. investor-friendly first, will a transaction place, volatile is But benefits corporate the upon are growth completed positioned macro In to recently touch has architecture With we well the we its we our of more for Safehold which next phase navigate and moment, a a what slowed want now

Let's company. the platform on outcomes the begin X. for Slide important several created Internalizing

created we the over in-house. First, six all management and advantages last brought years the competitive

we based external cost scaled structure, Safehold's portfolio upwards over time stable provide on with as which cost scale. Second, a that operating leverage we should replaced structure size

ratings on we've both step profile investor has into also equity the from overall Safehold's outlook away one and the Since debt improved category. been at putting and Single-A breaking doubled, for us we both positive placed Fitch, than more merger, float Safe's Moody's investors. and Third, free

as an Partners Additionally, of welcome we third-party officially in largest the largest shareholders investor are business, the investor as Safehold's CARET. and one in MSD common pleased to

such partnership to strong formed a talented a organization. have excited are We with

investors front, opportunities. million to And a lease value previously MSD, capital of units partnered the raising $XXX to to by we subsequent announced On completed the venture Wealth the equity led at end, sale with of $X Sovereign announced billion two $XX.X we pursue a for group million a joint Funds round CARET. ground quarter CARET investment

consolidate diversifies a uncertain the joint and the general our sheet, environment. upside We on investments expect promote the earn on as this market venture, equity for in sources we additional with invested capital in partner and dislocated future. This an management our balance partnership in to fee ventures opportunity will the

our the at And remains stood liquidity, spend at engagement customer portfolio. with Regarding that, and muted Overall availability on volume time facility commercial me cash end let million. QX quarter, credit of transaction market. some and the in our real the estate across $XXX

pulled seeing in shoots of ensuing challenges sentiment. derailed markets we with Just started deal liquidity as the the from green early bank QX emerging, and flow pockets

result, a pursuit put our customers on deal hold. As efforts their

As transactions. from we an sponsors closing transactions process these consummate walked not were two example, as in multi-family that did

have capital our the disappointing liquidity volume up, joint venture. we back transaction in to along opportunities As out the picks transactions be our pursue will to out and available, from liquidity and was these pushed reemerges with new it as on there ready utilizing once the hand short-term,

over quarter, Looking at revalued XX% the we had CBRE. UCA portfolio our by of first during

expect have and the environment. a given we certain properties assets appraised the at value a we quarters, on appraised in basis, annual our market lower stated, to As coming see are rolling

result, portfolio GLTV the coverage a on to X.Xx. XX% increased at and rent As remains strong

the best economic well-located the at and investments from periods levels be company. will use the of that time, highest long of the insulated and beneficiary accrue ground We debt to remain and our real ultimately in of occurring lease forces believe estate over portfolio our that equity dynamics and noise other

patient markets back we we in our leases risk open today, that be as the We for one markets present the will best the in adjusted steadfast ground estate up. of are belief opportunities wait real and to

Star our with of the connection iStar's the ground ownership for $XX a loan Holdings a and we in of in provides lease connection Safe with that the In investments those vehicles new loan quarter. growth $XXX vehicles, in share reflects including $XXX X merger. merger, fund and which million to purchased investments, made fund portfolio million the snapshot million Slide of

ground also capital In units of hotel office, million We $XX with million XX.X feet property unrealized estate, life funded lease of lease commitments, and approximately was keys, $XX multi-family, X.X billion feet sitting million over real associated approximately now quality UCA ground institutional million at of square at above science estimated of prior aggregate quarter portfolio value billion. our consisting total, approximately stands The ground square the portfolio the our end. leases and appreciation approximately comprised X,XXX types. is commercial feet XX over of other XX,XXX of square and of $X.X

to turn to over the And with me through that, go Brett let financials. it

X, earnings Continuing Marcos. $X.X me $X.XX. quarterly you, earnings results. share per first million Slide on net $XX.X income Thank let million, our was was Revenue the was and detail quarter, for

the we the is XXXX approximately from During performance, million related few our years. the earned earned most portfolio quarter, $X.X which Park over last to of the rent Hotels full-year percentage

miscellaneous line, to include rate earnings there were of These several These non-cash are legal, accounting million. and transfer plans one-time advisors, closing one-time the quarters, items of million totaling bottom non-recurring charges past one-time impacted for related company. items. of approximately related in taxes expenses million run primarily million primarily and other of the G&A referenced the and $X.X charges tax, and of $XX.X iStar $X.X plus and expense, not to the at merger incentive to reserves termination $X.X one-time that As related pre-existing cash indicative

items, decline SOFR to quarter million at pays on increased one-time under in points. revolving $X.XX. earnings credit for relates interest basis income was our facility, those interest Excluding per the expense year-over-year for was net outstanding which first XXX share and the reason primary plus our adjusted The borrowings $XX.X our earnings

put the fix SOFR Fed occurred. swaps, approximately hikes takings million $XXX faced approximately the from few short-term. long-term revolver we of X%, interest of to recently from term which floating hedges out that $XXX in the the near-term quarters we have in these future that We borrowings, mitigate last rates higher will stemming place substantial protect executed million market some effects adverse over will financings to earnings charges While rate to

X, inflationary only escalators, portfolio X% environment based generates other or the current Slide the left a fair rent yields. of presumes and our not of of resets leases. a market portfolio's The percentage The which side detail is represents words, X.X%, CPI ground value an yields. On of cash future our any In included. X.X% on for yield rent we duration page and yield GAAP cash in-place annualized

applied X.XX% adjusted rent of basis, to The expectation federal to our right variable yield were at market mentioned reserve, long-term previously including produces lookbacks on yield expectation side economic in of market-based applicable. inflation inflation an of page the an This the addition CPI X.X%. today's contractual-based looks

are we beginning impact our portfolio. lastly, adjusted way is which yield, of track value we And also a appreciation of CARET in the the embedded illustrate helpful to believe capital the to

inflation X.X%. simply its increases today's adjusted This approximately latest valuation basis to We calculate using XX% from $X the lower yield by metric CARET, basis. ownership this subtracting Safeholds billion ground of portfolio lease

way value will continue cash forward We between of metric track to our this the CARET. see as another the flows to moving and relationship long-term

the time. core and top value portfolio XXX geographic listed. we information the includes page top from book on highest is over diversified to a market use the on believe markets ground of across leases to XX top more exposures X, Moving of granular Today, MSAs of Slide property and XX The benefit XX are our showing as will best approximately XX emphasis XX% side type. our of that now that is our breakdown gross we leases ground right of the comprised long-term by thesis

by significant type the all count. portfolio we count Notably, bottom the we the further multi-family over the within property country, underscore space slide, represents now book the regions. the diversification On portfolio inroads XX% by have the made and underlying value across which of by of of gross across

$X.X capital of comprised rata notes, joint Slide pro billion drawn of $XXX of of had of overview At debt million ground structure. our unsecured on our leases, first $X.X we X of ventures. the share end secured billion $XXX debt million an debt, the we of $X.X quarter, in revolver, provides which our non-recourse and approximately own unsecured on billion on

years, due revolver. we maturities XX unsecured approximately is XXXX, and maturity debt have average until our corporate no which weighted is Our

million which increased As we and $XXX credit lines end, we million closed facility mentioned, revolver, quarter, billion. had quarter At during availability. $X.XX cash unsecured revolving to total credit on previously the of $XXX our incremental approximately

had we merger the when pleased was are Fitch quarter. to change in from Moody's outlook last previously positive placed announced the during Additionally, outlook on a have positive to received us August.

one us A We remained a closer and our achieving upgrade to ratings closing brought an and to other have step merger committed actions rating.

are the yield the permanent X.X% is our to debt-to-book We permanent X.Xx effective total a spread basis. on point X.X%, rate X.X% equity The XXX a cash portfolio's on the basis X.X%, is portfolio. basis annualized And which interest levered XX is is to yield. on interest debt spread which annualized cash rate on debt point

Overall, we significantly component the believe is story. of value underappreciated a structure capital that overall our company's

cost be average have of our maturities weighted viewed at is market by market company. asset believe significant an general near-term with evaluating no with stakeholders XX of a along uncertainty, years what time combination, should especially term momentum. We that unique in We as significantly ratings below

investors and connection the an Partners a CARET on to their lastly, closing, valuation. commitments invest $XX.X closed XX, at other Slide officially into In merger approximately on update $X billion million CARET. we with And B MSD provide Series the on

of component which more previously believe the We attractive overall effective. now investors. changes all we outlined, investible structure, of CARET Additionally, these amendments make value future to for CARET and an are

company otherwise this quarter In conclusion, the for significant and milestone marks market. challenged a an

conversations we are the put process some and to on bright business underappreciated the in parts components value the future that market. to of We behind merger of believe get excited are and the us the stakeholders significance, back the with currently

let me turn And it Jay. to with back that,

lot there. of A Brett. Thanks, detail

and don't we for go operator. questions why it ahead up So open

comes question Paribas. Nate proceed. first Crossett Nate, with you. BNP from Thank The [Operator Instructions] please

Hey, evening. good

are that a the in could were chance deals Maybe of what You of they just I'm QX? those? maybe size couple What you you look that was activity you a to in pushed. were Is activity also outside speak those the of the seeing what deals. does current And deals, now? do sectors just can if pricing like? curious were close there the mentioned quarter there right to

Marcos. Hey, Nate, it's

two So transactions, deployment ground specific on $XXX for over million were they those us. lease a in

the this having that I think We've I inbounds engagement a of revived making sitting that a hard on our teams multi-family time transactions class. of asset space. office certainly think the that amount the given of the get today, side. valuations fair of expectation We're is sense gotten had here environment. in the don't is some Most those within

a been us. term, some over it's But multi-family space. the So of for we little remain longer the optimistic think the bit growth I about difficult in

just fund? Maybe I'm will you. you tell there's a And just us Thank what think on the the can curious just Okay. decided, mentioned JV, management how is work? how is. fee you into Like goes I fee. what it then the it

Sure.

Safe. steps points Our going the to approximately of venture, transactions about we a nine everything next go $XXX a have XX million of. fee expectation minimum do which We'll into forward already first over to basis And which is been XX venture. this X.XXXx. of XX% the thereafter. of We'll so we that go of a We'll by we points fund hasn't this XX will it with into that years, of think committed management a promote down multiple protection receive basis five base for structure as

one That's the helpful. financing Maybe for Okay. on side. Brett just

money then what Just want And also curious today. rated? A have raise to you be could agencies to the see where guys you XX-year do

to Nate. since received been we've to accomplish I markets. from Hey, grade able since what investment think both Yes, private ratings couple a the well we've been the last, we've years and public access over able

big think the market Closing is especially of So the was merger in set the I this important. sources, capital diversified catalyst.

maintain completed, Obviously last our that's are since work volatile since announced the the all here targets and that been we making that good been over credit has think here. months capital, this that action letting creating leverage market. sure to access spreads the I done somewhat merger in we unfold nine

tenors, to we could feel cost structures So like pocket utilize and achieve raise will we different in and find marketplace. that today's it's the right different to debt markets. versus could capital, we look different the the of accretive But yields

Okay. Thank you.

from The proceed. Paolone comes question next Anthony, please JPMorgan. with Anthony

Thanks.

Just first give itself, can on funded that first you yields us one GAAP million quarter just on and $XX the the in the cash those? you

quote X.X%, yield mid it's which cash was X%, to low a we in adjusted the yield X.X%. materials The inflation and Sure. our about is

challenging kind And transactions pricing can you then you been of about now. think change today? right and And where is But talk any any just total are some change been great. I how discussion Okay, you typically maybe is think out to deals what that like, of there just is front? the dropped in property know been price of discovery where of – on values? I more the has XX% terms historically There that XX% of or

going Hey, on of Tony. in. our change core metrics No kind

a almost cash high-Xs on cash your on mid-Xs inflation it about and call the basis. to I'd still to fair yields recently, mid-Xs XX% has are basis, trying adjusted we're into today. months say which of today, an where So XX% with value that Pricing over shifted so to we've range, obviously last XX low-Xs there's been get a value debate consistent [ROA], is amount what

bonds side, level and And thinking about just how strategy guess, to And then Okay. rolls the I – the on mean, just about unsecured think at will things up that how venture? be all? for property debt joint there doing in the financing that about trying think to should level guess that within I like the just venture? corporate I you we

the unlevered. to So is going venture be

financing. is with exit with fund and asset The to so going to intent But of don't flexibility a debt. much And put maintain mix of we'll our venture. equity the potential there forward we intend as share level

Got it.

Okay.

funding most bonds, the mean, debt like, attractive do what's at Would be the now? straight right of thinking I guys past, costs lines, you are it And the see you deals about your you efficient some ratcheted in where those how have I so moment? done most mean,

looking previously We're are to at Tony, us are pocket. all lots the mentioned. Yes, issuers as trying no spreads right at those different. When of the find Hey, Yes. it's options to are available moment, where credit Brett.

seen to looking our think options overall all rate, done be upon coupon, to and continue structures in our and are it those what at innovate cash build lowering you've effective I past the tenors, utilizing tenors, available different whether us different when those we've us. lowering

mid-X to interest help last coupon in comments, will fixed to to the low proactive is, we've CPI again, interest I'll produce that's the our risk Marcos's headline was mid creating well treasury still rate So floating last for which the yields effective low cash point the been to forward. yields quarters, And as any accretive today's make mitigate line very plus to swaps few expense to those CARET, plus X% kicker hedging as levels. long-term going locks over and

So we net our think to that's positive bottom line. a

that, to at Tony, the we this in next get morning steps one up just think then merger, wake to future. our the think the spreads believe of I add got And rating overall that and just they're wider. out taking to all you I and XX day we XX look the points the Single-A volatility, basis to to hopefully suddenly, we're

opportunistic the continue continue going I and think the on we're be so dialogue, side. And debt to to tell the story

belief to environment. we're markets the I that long-term creating this business. be in significant the that value are think Once are we in steadfast going assets – open the for our create up

Great. Thank you.

Haendel next The St. comes from question

Juste proceed. Mizuho. Please with

is Hi. the line on Ravi St. Haendel This Vaidya for

pricing guys that to geographical markets trim? in now? right to are at footprint, you're Are any are any When exposure looking doing that attractive you there or markets your there looking well. Hope seeing any you're increase look Juste. you particularly you're where

to by and We diversify market portfolio class. asset of both have continuing a our long-term objective

percentage few last change the portfolio pretty push – us seen pretty over of that's multi-family I years. hard our into dramatically you've that think and

sort I that think we achieve want sort seems across of to of dynamic that, markets.

exposure I'd is in The reality the cities some transactions more some the large. in like so just up certainly of some Southeast. Boston. and certainly like of gateway exposure So the size are of some more I'd the

transaction in a multi-family So in Atlanta multi-family transaction a dramatically York versus City New is different.

actually sort we're We really a We're pricing a by so over by probably kind to Again, class. we see long seeing are time. And we difference be multi of to to going wider office sort period our going And not it'll at the than will our diversify market. asset pricing. the will of core pricing difference multi-family of look do extent a or be tightest to continue hospitality, of portfolio do.

it. Got That's helpful.

Just one you the here. of CPI portfolio average your today? in-place discuss the Can nature leases the link escalator and what more across ground is

So that Brett, sort and every if protection, about construct of back inflation years portfolio our look I is over correct but some has our believe is ground period XX at wrong, me of a of core we on it's it – I'm XX% inflation catch up. lease, Safe time

approximately portfolio, at believe that you And so when right, Is look average weighted Brett? I the our X.X%. number is

Yes. That's right.

you. Thank it. Got

Okay. comes SMBC. Rich with proceed. from Anderson question Please The next

evening, Hey. good Thanks, and everyone.

was will million the of next go But I'm you part $XXX wondering to a that arrangement. an So mentioned handshake or it on JV, the that that obligation is guys?

obligation. an It's

XX, based went the XX% billion being Okay. correct? portfolio UCA, And at from just looked on evaluation so was of revised I to Is understand, that the down CBRE. by on it of and that XX.X

correct. That's

Okay.

linear the maybe understanding I the want is extrapolate lower were be years. next sure be to number it. you just then thing to make to going So perhaps understood this to over a XXX XXX% I if XX% could not

got it. You

Okay.

concerned maybe a something could BK that is but the or a is, of something my – you values your jumping going any around declining, the – to list leases, are question of a that that of there you're just assets so not be could dramatic, as not have And top watch sort of but where do anything or there about out perhaps kind away? ground

Rich. Yes,

debt to That between number of to volatile. leasehold they've both exhaust your is conversations. markets a the drill had know time – lenders the and the underway we in and us, You equity it their fronts. process borrowers. the get can is conversations tell By Start gets

So well through right question a valuation. that no in we're there's there that. But assets away probably shift markets from and are going now pretty are significant

for get shake we to may how something to want that to so out. Unfortunately we're a see not things bothers And that. have customer. but these be going new us, that's prepared We prepared

but a curve. the got go ahead do these we preparatory you portfolio, asset kind underwriting the be that least markets want team. of to hold this we'll management work, at point, think will thick through the through At So thin, our of are great and

in Yes. is to there's extent that, portfolio getting the being could to ready at and all. to talking issues Jay just the occur. just something current Rich, add about no us And prudent

anything the sort because your there. Is Expensive is leases probably of Sure. imagine maybe. provide Yes. the legacy worst would planet on that is you ground relative No Manhattan biggest portfolio. I about part offering Manhattan of the of surprise there market. example the

perhaps And much you that to had explains and cleaner customers. you maybe some offer too of tool it you've in so Manhattan? for much? am markets in sort that why a something success Or about I thinking Is come marketing specific and

them think history ground of there've and time. been I a of leases over fair the amount Manhattan

So there was acceptance. some

little harder weren't early those on and it as easier you was of much Manhattan company, DCs prevalent. if it to leases bit the arc think crack to about and the ground the was Atlantas So our a where crack

network And other you and this we so those get is up and more seen what traction. we effect markets end as up, with take into we've some have

So with the there I were Manhattan history before. fact was in think just some leases it that ground

Yes.

X.X% the for adjusted And me? to tell explain going that bigger and and number I What to to CARET What Pearse the should here. this does I'm but take last me, Okay. audience me, ask maybe yield? tried Brett from

don't side component, of value those left cash assumptions Rich, based allocated way about it on flows believe either We assumption. CARET is to a contractual are zero is no reasonable on guess, the the zero economic and two numbers and one left think using of on easiest CARET. the to I Yes. the you're i.e. inflation value really

based the publish on an assumption gives expectation, month. fed's inflation you top XX-year the So which every right they

use just that once an and us and you to in Likewise, adjusted allocation bottom that we assumes what the on happen. the add to inflation based would inflation, reflect right, gives last So CARET on CARET see the that what trade. for you

on merger rules, fleshed for think going out But about – value you the it's CARET, going easy for a become we inflation zero the from the assumption, investors is the economic to extracted assume fully an clean closed, way So assumption value zero the it left trades CARET think actually value, a ones zero the indicated CARET. to model forward. helpful most The the and show right with ones with to of inflation basis. with track recent

you right but show on CARET hand very numbers, carefully looking for the time zero relationship zero of between we're measure us as the it'll So an for side sort goes inflation, that at us. economically, as important

So you're CARET from the out essentially? denominator carving

Exactly.

Thank right. All Okay. you.

with Howlett B. Please proceed. question Matthew from next Riley. comes The

my for question. Great. taking Thanks

your consuming impact you there sort the with bank, potential you see in First, bit road? or on bigger of with talk market regulation the between back, doing going down you, ground the lending leases? what's the tightening will in banks be Jamie. little what banks a for about picture and to pulling interplay could long-term any eventually the mortgage The bank environment, Is credit the business dynamic, the

Yes.

you've because Marcos on think side. multi-family market right the as the got said, agency best backstop now, the I the lending market functioning is

liquidity. that other of have asset luxury of Some classes the don't kind of the

some played exactly I key don't bank it. mitigate can't right around in liabilities know up, to materially. we that, for the seen will to real think so is some definitely end have is hurts going very little And role if pullback going that liquidity both activity liquidity the really of the have activity It's the banks. variable. that now risk, large the regional the We've of the banks where be transact we've seen We a fall think from transaction are of hopeful and we money see that. We're you come and hard taken transaction but to liquidity until and certainly center important get a been the pick don't estate. bit. And steps And

So way types about into I one here. new see capital think we've of big they're moving marketplace the the find a capital market. environment, transition lifecos, have this being higher got market, the It's rate of part to of that. using part been I the into a The all banks some of great industry the is interest of its market. already in CMBS this period adapting will The environment. capital market largest things new

true more one eventually leases seen activity thesis, in, up. fundamental is liquidity real we think thing stronger and should our predictable still is us with no back proven a always and has and transaction estate this we of safer sort lot ground capital that But customers of comes really examples resilient long-term have even coming liquidity long-term. of picks become hiccup. in our we own make And believe think portfolio where selling out maturity, are this really card they happy, from We've

lend an as and leases see increased hire not given to Do you think you for could eager the be may LTVs? banks demand ground

structures that will of it the know more I think through allow issues in definitely think faster owners maturing, pudding. of some is more creates. I think are money capital not to some We proof and the not work that the the our having I having to resilient see debt

think money long-term So low we long-term definitely really is cost powerful. –

new from the make functioning equity I side and a those We capital owners credit need And liquidity side the think of structures. both more seek need lending we market. world But will out. so world yes, that to the do of the

like see we'd market later. stabilize rather than to the So sooner here

just the filed address at could question administrative on legacy should that. Safe with a of at of for sort the nature stock investors those next and you what filings the Thanks The holdings Star? – Great. thinking ATM of could the address new iStar, an and think registration – both the in you at

Hey, Yes. Brett. Matt, it's

ATM really that shelf now existing place. in a merger a think get this the new with new we the to make and sure I over. complete one roll that was Couldn't get

this So And use they And shares can years. Star of Board as approved any the mechanical be we as obviously Holdings well. then future sales coming XX.X the by million in from own Safe. need over then to it nature, you Safehold know, a and was in the would perspective,

lenders there's Star are Holding also of a those there the on nine-month and Safe lockup side that, shares. So on

in, just level – of sort the I last the quarter the in fully mean is And management there the you're level interest, net-net, first and the on the paying? on, the agreement basis, a of high impact well quarter of next you'll a question Safe. sort expense the and collecting the we'll Got you're every of merger continuing [indiscernible] high positive it. getting impact – of see internalized quarter terms fees interest a the on of it Is

Yes.

for cost a there believe this then from that structure pickup we've the over the quarter time, first there's helpful cash the moving external Net-net, size second and that structure non-cash forward is in without passes. other and think, structure, an past, leverage expenses fee a as of standalone management the you million quarter, the to as work is time some I The see asset-based will be noise can management couple new might reimbursables the larger. operating cost first in dollar that a this mentioned should structure quarter. be said And you from that as and lot one-time of costs. we

will eliminating think say So pickup quarter apparent to I'd that as million in to we see first net call the quarters G&A. by $X from a, as be the million and go I quarter leverage operating grow, probably it, total noise, you'll second $X and

major closing, undertaking Thanks And was and/or on way by congrats the a while, took Great. but it. congratulations. a a lot. Got

you. Thank

Thanks.

questions. Hoffmann, we further no have Mr.

free today's please you on replay you questions have release, any If should call directly. other please contact John, me again? Thank feel the you. to would conference instructions give

This will replay the The lines beginning you with call replay (XXX) be this p.m. your today's a and Eastern conference, at is the X:XX may There time. dial-in for conference XXXXX. your disconnect Absolutely. confirmation you Thank today. Time for XXX-XXXX participation. this concludes of at code