Preferred Apartment Communities (APTS) 25 Feb 202019 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Preferred Apartment Communities Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] After today's presentation, there'll be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to introduce your host for today’s conference call, Paul Cullen, Executive Vice President of Investor Relations. Please go ahead sir.

us quarter and XXXX joining Apartment to for fourth Communities earnings you this welcome morning Preferred Thank call. we quarter We have hope report, fourth had you after which earnings a chance market that to review each closed. released yesterday of the our moment, Isakson, call over I'll additional Officer share our Chief Chief Murphy, to thoughts initial details the share metrics some markets. to Financial Officer some turn and about and a Joel our In Executive then capital financial John will return our conclude will remarks. Joel Then to prepared

Joel’s remarks, products pleased DuPree, our Boone Sherman, be vertical. is us we’ll you Jeff might to and primary Cronin, questions Following this the answer business have. Chief Mike with and Aide any Accounting leaders Officer Also of present Michael three morning our

everyone actual be that involve materially. These may like future to call. our guarantees and may will performance are and during uncertainties results statements statements and forward-looking made not various differ risks of note I'd

you in discussion should our For and forward-looking well earnings SEC release, yesterday's statements as filings. of as our review press those risks uncertainties disclosures

on release found filings used the supplemental of that in data quarter of the management reconciliations non-GAAP for and and SEC definitions reason at be non-GAAP release with website uses includes these and can XXXX other other financial report The be measures financial our and fourth press also may pacapts.com. Our press our terms today's discussion measures.

outstanding your period. operating average based stock to review are the we We and of our basic this that this all performance. during partnership Class the A weighted of otherwise discuss encourage you on indicate Unless results units and common per-share for refer information to financial results shares we morning

Joel the I call turn over to would Murphy. now Joel? to like

thank And Paul. everyone morning, call. our you, Thank you for and joining good

Chief of senior is PACs the PACs first my While participated many as October in and team of at have been a Executive quarterly since these calls, of part XXXX management Officer. have I this

various that business and and you about XX company, and leadership estate especially and Isakson John more the and you having estate with trips visit and public I listening entire in Atlanta the companies will in plus met of to your the will during Atlanta forward years Atlanta, been never us private the to one ahead. years office. future you such over excited would and positions know real of hosted you out any PAC on any our at which I've road here NAREIT I've be We even for over in in been ahead having properties. be tell also I real in opportunities can looks on many our you the visits team, XXX the more this visit months or a so meetings in this team on lie offices here call NAREIT welcome strategy of in on in November. with the that I

of and which In since approval of XXXX, company. by investment oversees preparation served chair capital the investment taking this the as committee, role, for I the our July

upon real of acted in million nearly in approximately of level have loans, million approximately $XXX estate refinancing property we acquisition months XX across debt new and platforms. $XXX $XXX million past $XXX these During sales asset over all million in investment activity, our

of business want team anchored fully me and leader hands and I the the types, our the company. to property business and we While leadership committed running core multi-family transactions as running the our component importantly, our while business role with these quite type of the in of them all being these very point am are a of as segment on and investment leadership of be opportunity acted foundation this as I me our closely across and about do a strategy, to well. grocery clear certainly teams experience I've of our work the chair primary gave businesses, on as gave multi-product the to committee, the it

passionate this and up excited deeply company them and and and teams am experienced the work across strategies. honored to execute I in our down and We to to capital opportunity and our real successfully estate have alongside have

a was growth performance our growth X.X% in X.X% of us in a business most XXXX operating our quarter-over-quarter all platforms, notably strong core of same-store quarter, year terms for fourth across multi-family our XXXX. XX% portfolio of and REIT. store multifamily has youngest units age pool our and same X.X public comprises XX,XXX This average years. over The XX% an revenue. our to total among compared of The of multifamily year-over-year

into the NMP implementation on of of transaction January with of two and plan of has change where XXXX our and these time of the and Advisors months internalization organizational on first functions closing a Advisors Preferred XXXX succession PAC. XX, brought the management inside Apartment our been were

flexibility management added This us we our us for PAC phase and structure is gives positions a stockholder well next of new creating internalized tremendous and enter as this value. beginning

of enhanced benefits creating capital enjoy creates the and growth long potential, full and our of at related structure X-K the PAC Xrd a allows the on the released longer and we well value transparency. Our a of and materials of prudent a alignment management term us term enhanced between high It represents growth while but scale details significant gives stockholders. transaction, level, term for February And dilutive and that deployment contain earnings shorter the that creation. result as fully to accretive opportunity as

our Real a longer build value we term to seek business estate is will and for term always long stockholders.

questions to during happy further Q&A. internalization about be have any will our We you the address might

PACs we on set to internalization capital focus complete, broader strategies. With are

market perspective sharing plans and and they with renewed our and strategies you sheet. and We will as this shape balance be a the on take stack with capital doing and our fresh

initiatives back communities culture, our which achieving We will particular our the associates, excellence, and ESG we and on of our our on operating operate. our performance, training giving continue governance, attention with in of company-wide to focus philanthropy the development our to

call the turn Isakson. John John? me let to over Now

Joel. Thanks,

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difficulties Sorry there. about the technical

million, fourth share. quarter FFO of generated approximately share For $X.XX $X.XX the AFFO of a PAC of $XXX and a cents XXXX revenues

of the of the note, our will verticals. up quarter You XXXX, fourth continued property to over XX% compared and to all owing revenues our were growth

year of $X.XX a share. FFO we For XXXX per generated the full

includes million our significant for this related quarter million the of However, and transaction costs internalization to over for the year. $X.X $X

per FFO $X.XX a year. Excluding share was these for costs, the our

Those In first transaction the in XXXX. addition quarter costs of our there in the the will the fourth year. results were quarter of the to incurred this course over the significant impact incurred costs closing costs with of

guidance the return ML-pools our of a XXXX. of that to impact that onetime is FFO million company guidance in the fourth internalization Freddie items of like over other for great $X.X both generated reflective and for created occurred the our Mac and This of our XXXX, XXXX. Turning quarter in sale in

it substantial economic just company. it for PAC provide accretive excellent to and investment, Internalization was benefit the investment an that, a is be should over an and time

are them all FFO. benefits over However, many not accrued realized these time of of and

are eliminated there result recurring transactions G&A, fees, the more with savings acquisition all over accrued the asset fees This immediately, or We in savings We've financing as not eliminated loan company, no internalization, does associated FFO deal. FFO benefit of material fees property streams have our a life management the are these that and fees such quickly. of the origination as fees. fee also but those management, more of a the capitalized results to amortized

are and number These deals this savings by acquisitions cost also to portfolio. marginal could of new fees of onetime the impact create the our There that accretion significantly reducing different numbers new a year. items adding

housing the items will frequently guidance Like and settle. We we be month. becomes year that clear, as assets anticipate our student sale the picture as updating next more this of

doing phase our growth. and will the for commitment navigate We our right have to continue what's as of demonstrated we company to next its do so we shareholders in

the AFFO accrued interest items, and variable This or be As year-to-year. in and will and quarter-to-quarter revenues. two highly in received can past, can be our attributed purchase we of line our to termination AFFO noted income in variability from have amortization part large option

the income received. note You in had this for fourth year will almost interest last compared million to $X we accrued quarter less year

item capital quarter, sale we total of borrower AFFO. developer the the interest this has accrued or every variance The payment real loan investment the either alone comes line in refinance can in income event, this property. estate for of interest in variance meaning the actual While account booked when under a the a a cash our

loan in that supplemental as paid of accrued accrued of new collection our first interest booked accrued $X.X every includes and to in from statements. about note are which are currently interest off January, disclosure estate financial example, have We our resulting investment a quarter current loans For a added. continues receivable both real approximately that a loans our portfolio financial interest quarter will XX loan lows impact AFFO. million $XX in million The add approximately of from

the quarter parties. run year whether to a year. the on timing if due assets, a equal The AFFO these million difficult loans simply or rate $X.XXX $X to over a share or spread would took payoffs said, per the XX across total of receivable That $X.XX it quarters and third of you predict of are these sales PAC or to that a

for at stands it quarters investment in beds just current space. housing we payouts office If end. of XXX,XXX are student on sooner drawn like The rather million in sure units, loan square at the say our of can thing feet later. with happen over X,XXX commitments, consists loans of is balance million over this that. The book than anything, and just One skewed program multifamily certainly topic $XXX X,XXX won't $XXX

initiated, being assets our grow. new once total is XX% same relatively Our was as at loans now XX%. time less than a book result loan to is are our assets continue off pay which the book and total of constant loans The

previously our continue focus increasing to of on discussed, we As the stock. common float

the of aggregate warrants shares of our and with the common During we year previously X issued stock an million over preferred exercise our in issued stock the of redemptions under the fourth of quarter in connection this of preferred Series XXXX. offerings. outstanding XX% million we to of an shares had XX compared increase common about XXXX, Overall, of our representing as of stock December stock quarter A fourth XX.X unit

an primary be currently and achieved year interesting the some seen forward a and developments quarter company, quarter seen lower into our the of over between one summer basis capital and will capital in have declined stock. internalized again our we Interest late the fourth this around common focus XXXX in recently. XXXX. preferred going stack the have relationship is From XXX highs and and of the perspective, As our markets stood lows further the first of points than over rates

end, fears to safe impact portfolio flight interest its we year recent acquisition interest capped. financing on approach that recently variable and the To havens a profitable and XX% plummeted strategy, fixed have economy accelerated approximately that rates take The as has a result. mortgage coronavirus and our to are this continue a over have permanent the created and global cautious rates to rates or our debt of

we for XXXX means loan don't coming $XXX dramatically. refinancing maturities XXXX. risk independent in any no the rates in million significant and XXXX only left event deals mortgage maturities have have due move XX This across We in and

To with line foreseeable of of credit surpluses, of cash the capacity cost credit. our believe for we use will future. internalization, line funds of serve from current the along our fund the We us

we in a Beyond facility expand million current us to total have our of million. the allows feature $XXX up $XXX to accordion capacity, the

has across having maintain vertical. sheet. platform us uninvested balance the cash this We continue every on to our in investment in Currently, discipline resulted

full expect While course given our dilutive year, would term, conditions invested which accretively this the funds market of we the of realize benefit in is and short current the over the we XXXX. these pipeline fully to be

back very be exposed overly its being for advantage well to current few environment In further I Joel financially without of to turn like summary, take capital years. would markets the some in the positioned thoughts. to continues call company the the Joel? next wins to

Thank John. you,

of estate more our at sometimes our overshadowed business be So, go these about real are end capitalization our some the into and of foundations structure I'd and topics, corporate they success. by because like to can day markets the but detail the

to a are the second I'm believer prospects the our none. firm strategies that markets geographic and our soundness of of our assets quality the of

housing, multi retail each We have office businesses of performing and growth built division, and Class markets. in in properties scaled A our investing top

A more XX square leasable end than feet housing quarter feet approximately PACs close fourth million anchored XX property. space. to Class of totaled necessity of This portfolio units, multifamily XX,XXX grocery At than student more altogether square retail office the and the million and is of

verticals a best platforms We’re integrated of each within the management lending, in and class and fully acquisitions, with real at in-house. our corporate estate operation level development, company

past in banner were subscribed Whether in fourth square the Carolina, North has Georgia, portfolio Tennessee. of XX.X or of compositions, of about owned XX% and At located under investment top thesis. or Florida, the its long as end states, PAC to Texas Sunbelt story leadership our five this growth than feet the a cornerstone our the quarter more and our team million

states of policy These share cost doing and of affordable approximately generated also assets business, the access revenues. competitive company's and cost living. themes these Our property level to pro-business talent of common states of in XX%

surprise McKesson, it's companies Charles of relocating AllianceBernstein, to a Apple, no higher continue of see out Schwab So, we stream that steady cost Honeywell, market. like

of Job in drives and portfolio, our retail vacancy and escalating strategy. we increase. low across rents XX.X% and tangible see an off rate. result population store this X.X% leased multi-family growth are growth impressive And In same office coming our multi-family, we quarter-over-quarter the and demand

leased, average. quarter, market per above the new excluding are fiscal a $XXX averaging retail we foot, XX.X% sales approximately with third grocery grocer basis from square our points In redevelopment, end industry subsidiary, well anchored XX of

in We are the largest fourth Publix landlord now country. the

in we with more lease average XX% leased approximate average are remaining, contractual cash X division, on square XX% generation up feet of rent than in leasing an office roll XXXX. of XXX,XXX our years And than term more second

Teeter-anchored Shopping investment exciting $XX example Let the me square the In give we Hanover located fourth benefits XXX,XXX approximately foot that Center, an we and acquired in million quarter, us. of an multi-dimensional Carolina. plus an Wilmington, center Harris see our Hanover strategy. experience you North in is for

The dominant the generating rear the the area is zone. of Teeter to developable the trade of Harris center includes additional land with an acquisition in sales. leading strong the First grocer acres market seven vacant very

and multifamily the of working additional on this platforms, vertical XXX leverage by on a on to ground side for approximately plan up and our on is are excellent Our PACs example apartments groups create our land. value side retail to an of opportunity. This development ability properties new

is this to expect a the strategy can more You in as us. defined this see for of future

of The create demand so. businesses and Sunbelt is well-documented did. everything story growing space. and often for communicated we and rightfully that drive Growth is jobs office the driver Relocating

turned new grocery centers. shop anchored jobs residents’ New shopping at into our apartment renters,

now forward teams estate recap, the level high has significant organizational optimized of we advantage and to So, assets growth we structure place, real company that a in opportunities taking Sunbelt of at full scale operating high and an in are ahead. markets look with operating to

Paul? I’ll now back the over So Paul. to turn call

Thank you, Joel.

the open may Go for have. the operator. ahead, ask to any Now to operator I'd floor you like questions

Mehta from National ahead. will Securities. go And Instructions] first come today our of Gaurav question Please [Operator

Thanks. Good morning.

between gap some like about I And question year-over-year, talked driving on the provide guidance, on XXXX that? versus decline earnings hoping we is the expense I the - a if help of if If us cash savings more more bridge some are would you in and I XX% First $XX more so she hoping was have take get that to color guidance. color - internalization internalization decline? the what's out XXXX ’XX, that on implying maybe I during million

John Right. Isakson. Hey, is Gaurav. This

is cash AFFO as and mind not I discussed in the FFO same of we've is couple think earnings. a savings and things the keep

of result realize the we in get those don't mentioned call, of in will FFO immediate that some an As the benefit the savings way because I fees treated.

less the is that that In while - loan investment as had program, if incredibly percentage and which balance items in pools profitable for and investment of mentioned sold. loan at asset you that like it the has onetime is we estate our the XXXX, so is a addition, ML the base now of declined And - us impactful. incredibly revenue real real our we healthy and look we program estate the

internalization the onetime look, to sensitivity the also combination in and we're the a that we that. of impact it's had cost, aware want that this well could be the at to - and XXXX. So, our sensitive of we're well we're and items as And do capital we as what we looking with year stack, results are

guess would from and perspective XQ? management, modeling away, right, line which income I G&A, statement away? I items Okay. math going And that's are on do a going your

the comparing obviously the item, to those been you go of eliminated to All and replaced be port will – going and if folks, is line of to as XXXX G&A have all to up obviously the to a manager that over the functions XXXX, fees G&A with the REIT.

fees have as fees out the transaction. eliminated yes, sheet eliminated going part also the the But and that of sitting on balance been were the we're deferred

Okay.

is – may actually just amortized. fees the but savings the not. or on things particular on about is know recurring they're it does fees that that FFO me transaction well and That's the items, this the just to correct going as things cash John not really drop follow don’t line let outlined I Joel, internalization where one this the that may of impact where might onetime that mentioned those this be well while and great those or as me they're because John. Let But you up with were you on exactly

now are benefit benefit has and of transactions that you allows do the the REIT creating you're the of in a to scale now is and manager. of the of the to the be versus what actively to we us marketplace, benefits But this give to where as REIT scale, just the sense accretive

does some on for multi-family that what acquisition, million a deal. there's regardless So, say let’s $XX a property nuance type, between really just million $XX example But them. of

standard plus assumptions assumption or the capital minus maybe these into expense just go looking off XX% kind is ratios, coordination $XXX,XXX it's there the okay. So, fees right do fee things of stack, LTV, cap X not making of loan that our at rate, typical acquisition and bat

So but been that smaller we deal, would the the FFO will ultimately necessarily that over to is life FFO have a have more because cash cost the because of in investment not asset. derive amortized it's those direct savings,

to the less even that G&A, management additional outlined, assumptions drops of modest create ones fee, that’s fees some the to fee, the it to corporate asset that recurring which year property fees, you in that $XXX,XXX place done, a fees needs put redeployed, the well disposition needs end, deferred management to be for savings and that that like asset year asset time FFO, But out for that. and for immediately eliminates G&A or asset over or context takes run. anything be into back-end be to but benefit capital the needs any Also

little it as the internalization. So, I point that on a just related to finer wanted put to

No lastly guess, then on I the dividend. Okay, that's great. color. And good

dividend be So to imply lower more your FFO be not assume your AFFO some your with that comfortable provide your with You you and dividend know, know, may in level? you your how than covered more or in if FFO are on current color XXXX? less maybe dividend you be line will

and let John, but John ahead, this, go Yeah. going have I to am both I John.

closely QX quarter, and we as dividend evaluate we have done, review where to every we're for operationally are the saw, we that. just dividend always going evaluate more announced year our this we and going we're what to So,

there impact we'll lot in - year. my necessary, dividend we could and anticipate our the well. looking that frequently and updating be if are things more this our I earnings guidance at We will be do said a As remarks, as performance of

Okay. Thank you.

from Our Barry come next go Please Davidson. at question D.A. will Oxford ahead.

investing Great, now risk you're are are talk adjusted best the right guys. looking out property going landscape? the when types Thanks. at about the return, what When giving you that forward,

Joel. This is Thanks the Barry. for Thanks, question. Hey.

just So, risk at say, looking think kind of I adjusted what of returns. you I'd know, instead really

of Let anchor me have, strategies were we little bit the own do the which which retail investments their A primary have descriptive their the a then of each different of market own and just office run grocer which teams. by independent necessity multi-family, a Class

chagrin. our of all at kind multifamily our for in So, our acquisition. the cap market rates out Often well making if you know that's Lowest because on an and compression that rate pushing and of take business, going let's the future cap is well-known much obviously piece multifamily just We primary accretive forces on to sure. heated in impact business. demographic what of gives had in extend us, will it look and the first, what's that's going the that difficult more the buy to are

going his Sherman over Jeff market return it team you from see have levered growth and go the highest on vehicle. the happens us So were or what return. that the same very on and that that getting lowest accrues might give active lower time also the that in to could the the store said, in for results lowest to But

So, on that be world in, over types back what internal happens highest. at be depending three going X across rate the rise would could which That's its the of would the what higher on ours product estate look mechanism to of time. growth real for return, lower the end a so, in year XX we

been There's some grocery in where around off-market the Aide properties, rates higher we've that the been we transactions. retail, - anchored his great particular have Over market probably grocery Michael six anchored is low cap probably buying in yield. in going historically had doing for next sixes. or retail knowledge a team buying slot some than and highest

news three like the leases, in we we the bad good is is okay. news always on going say the leases, of leverage higher yields, retail in I it's but have the So, and highest have

Harris far of longer credit Publix and anchors, leases the those is are So lion's by like Kroger what and term, - that. with Teeter share is

nature their term. So flat across the those by leases are

of conservative the being space on with small we're of shops. ratio pretty upside too, our the us there gives shop our which that So

move We're leases, a because a might of have part modulate do average growth potential of the and GLA. retail is or it's in growth asset it So, maybe piece XX% be the rolling an every we on potential. your one in of asset can you getting smaller XX% but multifamily or up units that

get office, the okay. A Class you into Then

So in the it look that we markets different going targeted lower the but the six little than very but will that like, spin leases. cash look to it's yield it. can but because has it than return, retail, on at because a to of also a higher We the be in straight-line multifamily, it we idea also GAAP really a return at need on of

kind the middle one. so And of that gives us

GAAP on basis on but So term has GAAP those, as great in a rent we basis that on flat, look have growth far I get are line that. there straight it a just But plus it's as know money, don't the a contractual it built because looks it might over because in parking mechanism, plus real just growth a relatively for revenues we or basis on minus flatter. X% can

So, that on three your addresses I hope product those at how types. look we question

how No, helpful. I the think I that's for stuff, much count and and going your for share in one do you. to you then see think shares outstanding XXXX, think regards find you shares, in Yeah, to about great. I it that? warrants issue here When And question to definitely allow increasing you're Joel,

the warrants to from go down. are think going I Barry, know, exercises you So,

issue and have started quantify. You legacy the warrants warrants The not we've know, the hard does prices. ones have it's associated new just much, are relatively that the have Series high that remaining how A strike to with

So, down I'm dramatically. go anticipating and those one exercises potentially to

going some of between say, it's redeemable it's redeemed redemptions, but period exercises, great to a the [ph] correlation know, preferred then par hard stock In redemption terms - there's you the correlation. and not into

stocks, go I know, to dramatically. are - hard going to are exercise it's think I going we go up say warrant how relatively more redemptions you preferred sold But sold to believe but speaking, the down. do I think we've So,

Thanks. helpful. that's Okay,

Barry. Thanks, Sure.

will from SunTrust. question ahead. our next And Michael Lewis go of come Please

much, more release a it Great. wanted you. press sounds It we FFO Thank ask down little your to guidance expect from that the get you detail know, the so I the to bit you internalization maybe come if down. going the like why comments in know, said on costs. is you excludes could income interest it's

I'm of fees that item how curious kind up, offsetting these goes the go G&A of much away. does some

volume You maybe assumptions. you share could know, acquisition

Just direction get know and - the sense a driving trying magnitude for and the to what's you the that?

Yeah.

- you, me Let thank Michael.

heard I'll I them five semblance some them sure or I'm all. take remember think not order. questions. on of I to four try in I can

go at volume, product on across Xrd, look first the types, how when I think deck on this You investor said the acquisition way know, savings cost in to those which is, that look at we're we year. in they released savings. on clearly That's cost our in we and looking were February based obviously assumptions, certain

that we talked already to about cash balance deploy. we're the have We've on sheet going

assets, up made that relationship But make your and was fees. way one fine then this But in things to G&A questions that's I allows was very we about us team those So, well the we how I actually we're that did XX add question the Gaurav's might if assets. what asset, place answer that small. to G&A as buy have up Obviously, our these end scale under more added is but as we looking think recurring the it's G&A. at where G&A is difficult assets, heard come on certain of it, also additional assumptions with think on and is I and about we folks, the an needing that. terms operate we in and current And in to was and with additional this assumptions incremental best I

buy of scale management, [ph] an property yet goes asset and [ph] million $XX REIT, that a to you quarter but need need AVP recurring of benefit accountant, So, if but you an another, the maybe away. the an of eighth you go the fees

know I to you if our questions the view, of repeat. that - don't So, was that's wanted one if on

have it’s we that trying you if impression of that I were other one the say it, even the you the should you is want in well that you I there. to costs. that of guidance meant, - we mean What next but said included internalization that what clearly, guidance, did. excluding you the think impacts internalization true. or dispel do to One and - about were was our And just we guidance, we said didn't don't

is closed, as costs in as and quarter first diligence, the quarter, the due the make and quarter transaction capital and itself, all that the went transaction, interesting going for season saying which we'll all into that financial well as of and as things. the that FFO deployment in is legal fairness has in how be is statements fourth is in the those to What far pursuit that accounted which which the of have quarter for, the on actually because additional an to

want sure, there. take So, or and in just questions didn't what it I understand three into two that Not you make were in to there our I we that's guidance. think that's sure account Michael I'm

point G&A? lower higher are could it of you primary is let I the of That's should let Well, it there our going helpful. what's me we me boil why causing question. interest I income, are mean, so Is it just one the primary decline? ask or just down driver, kind FFO drivers Yeah. maybe in that things one the two much. the know No. mean, down, I is to models

John, to restart to John know - let apologies walk tried again, had a listening. from and going the beginning. difficulty. those those beginning. Yeah, John I it We to to recount at we the technical through am I

in going this again go of that. some it. was through heard John's some all maybe So of And specifically lost was to or

it combination our us always gave sometimes was in ML Clearly onetime and in onetime match. And of so quarter. the assets of to John several you've Michael years, of events, John a that one it's those pointed But them. to is internalization productive harder events subsequent with the those or that fourth factors. the for out very sale occurred may mentioned to and example not occur chagrin, may it's are But us

goes it investment book, estate our smaller the relative is of loan the piece forward a as The of loan size deal. real book mezzanine

basis So, a on FFO lower. from the contribution is relative to those

major able I some So, color. John more components. might But those the be add are to think

Joel's I think exactly right. got it

- and the emphasize year, said we internalization said and it mean, combination, onetime we're have the a as is and I events the to date. we're I what is thing our you going Joel know, of to update the these important picture you through just going guidance to up at and go year, I we'll clearer keep as as think rest get as for a update results we to the appropriate

monopolize, want quicker I I have to Okay. two more don't ones. but

covenant your for the the coverage dividend is at Or in of to dividend credit you to next it Are breach a are there's look dividend, covenant tight fair And when covered you year? covered wasn't that On loan think say last this you tight that I don't was that facility, be it'll it? year, your now? quarter.

is, And covenant. don't won't you make if know, I one year? dividend wouldn't and We I'd I our say covered are those said, in that – either today. true this things those covered that if statements to statement, I clear. You know are would you of of it it one either not made next are what a is isn't breach year, make - be we're that we tight,

if You this covered it don't know was past year?

year next. this meant you saying for and this and thought I'm year, saying, next year I I'm No.

I'm Thank That's Oh, No. said fault. this I'm year. behind. sorry. sorry. you. XXXX, I my I'm

kind AFFO we the forward, shows a look a look inside. know, We of we Again, we laid as on trailing That's as things. month, it that of you can just does point quarter it we actually it on can us it. out at that of In at were the and again, depends but accrued this. of our look the number amount fourth it that as But XX lumpiness at just out really XX/XX. books

we're actually reality to AFFO books it, sitting us as that it's maturity. loans this those here, because loans we're while this in that generating outstanding, number little a going more are and the And generating still gone room to for FFO we're gave be as morning, more be light, here might jets think the sitting about on we that the

Okay.

hard market these for out. this dynamic. and owned going It's we sell, quarter, they are those because market for has off retail, AFFO but did be to anticipate because by it's that reported. showed $X.X have first So the issues to - us of whether us one first or the books million yet whether with and that quarter and for hard are the those are folks pay they put loans when dictate buy we on refinance we to in it just But

current about I matures? me. then matures it's to if ask And has lastly that that wanted you large just this loan to Berryessa you Okay. means know that XXXX. think in what It that X.X% an or large yield. when backfill loan to early don't about I how for

loan in book mezzanine the of replace same off, very the down, be dynamic time static looking able since the loan ahead investment paid make we've timeline him the if at is marketplace. But is book. relatively point and know we that table some think the you the - know to It’s nature. Jeff moves asking is you we loans. while moves and I'm is active Yeah, thing book goal down at to up it and we of, got us. fact that. very active real new has you you is That And raise very we’re It in the the our you estate will, question, that enjoying but and same out know, you bring look a Sherman it deal valid aware get a about

loan. this might on type you of But be we're know know, very or same mezzanine we prudent, this also the Michael time at

sure that we are the do in Our they're be happen. that estate near into to real investment We just that still us. to to estate if are we're that saw move to just going that And investment early good just available benefits mid-part not going they the the to we're are us to cycle, cycle. our those loans program book If and light them. might not, loan during make the things to real available then benefit want of keep that mezzanine to

for appreciate my you it. taking I Thank questions.

Thanks, Michael.

question-and-answer Joel Murphy for like over and time, I'd At back closing to session. conference this any to this turn our will conclude remarks. Ladies gentlemen, the

your Hey, on listen, mark, We've additional We made to look much and welcome appreciate communicate that us us I for you'd call visiting our we're call of We I you've management thank sure the that enjoyed in make any visit and I mean talk will to and appreciate that interest to forward very much what we you want at beginning presenting doing. you in further you like you looks to very everything I the to you joining be very company. said road team in this and PAC or our our understand and you today. disclosures out ups to strategy is come make. to and other and we John follow Atlanta. the the to our phone on and

with our very I'll conclude that, you much. So, call. Thank

The you now conference you disconnect for may And presentation. has now concluded. lines. today's attending Thank your