Curbline Properties exceeds Q3 expectations with 17% NOI growth, raising 2025 FFO guidance to $1.04-$1.05 per share amid strong leasing activity.

Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time I would like to welcome everyone to the Curbline Properties Corp. Third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star and 1. I would now like to turn the call over to Stephanie Royce Perez, Vice President of Capital Markets. You may begin.

Thank you. Good morning and welcome to Curbline Properties third quarter 2025 earnings conference call. Joining me today are Chief Executive Officer David Lukes and Chief Financial Officer Connor Fenerty. In addition to the press release distributed this morning, we have posted our quarterly financial supplement and slide presentation on our website@curbline.com, which are intended to support our prepared remarks during today's call. Please be aware that certain of our statements today may contain forward looking statements within the meaning of federal securities laws. These forward looking statements are subject to risks and uncertainties and actual results may differ materially from our forward looking statements. Additional information may be found in our earnings press release and in our filings with the SEC, including our most recent reports on Forms 10K and 10Q. In addition, we will be discussing non GAAP financial measures on today's call including ffo, Operating FFO and same property Net operating income Descriptions and reconciliations of these non GAAP financial measures to the most directly comparable GAAP measures can be found in today's quarterly financial supplement and investor presentation. At this time it is my pleasure to introduce our Chief Executive Officer David Lukes.

Good morning and welcome to Curbline Properties third quarter Conference call. Let me begin by expressing my gratitude to the entire Curb team not only for the delivering another strong quarter, but also for marking our one year anniversary as the only public company exclusively focused on acquiring top tier convenience retail assets across the United States. We continue to lead this unique capital efficient sector with a clear first mover advantage. Before Connor walks through the quarterly results, I'd like to take a moment to reflect on what we've accomplished in our first four quarters since the spinoff of the Curbline properties. We've acquired $850 million in assets through a combination of individual acquisitions and portfolio deals. We've signed nearly 400,000 square feet of new leases and renewals with new lease spreads averaging over 20% and our renewal spreads just under 10%. Importantly, our capital expenditures have averaged just 6% of NOI, placing us among the most capital efficient operators in the entire public REIT sector, an important hallmark of the convenience asset class. It's hard to overstate the strength of this business model, but three key attributes help explain why we're confident in our ability to deliver superior risk adjusted returns. First, our investments align with real consumer behavior. Unlike traditional shopping centers built for destination retailers, our properties serve customers running daily errands. According to third party geolocation data, 2/3 of our visitors stay less than 7 minutes on our properties, often returning multiple times a day. These properties serve large and elongated trade areas along major traffic corridors, not just local neighborhoods. In fact, 88% of our customers live more than a mile away and nearly half live more than five miles away. This is not a local business. That's why 70% of our tenants are national chains eager to capture a share of the 40,000 cars that pass by our properties daily. In high income markets, supply is limited and tenants are willing to pay a premium for access to this valuable traffic. Second, we invest in simple flexible buildings. Rather than purpose built structures, we favor straightforward rows of shops that support a wide variety of uses. This flexibility drives strong tenant demand, rising rents and minimal capital outlay. We don't do loss leader deals, we don't over invest in tenant improvements, and we don't rely on one tenant to drive traffic to another. Our strategy is clear. Provide convenient access to customers running errands woven into their daily lives, and lease to tenants with strong credit who are willing to pay top rent to access those customers. The result is a highly diversified tenant base with only nine tenants contributing more than 1% of base rent and only one tenant more than 2%. Strong tenants drive strong sales, which leads to high retention and rent growth with little or no landlord investment. This is the essence of capital efficiency and a key driver of our growing free cash flow. Third, our balance sheet is built to support our growth. We believe we currently own the largest high quality portfolio and convenience centers in the United States, totaling 4.5 million square feet. The total US market for this asset class is 950 million square feet, 190 times larger than our current footprint. While not all of that inventory meets our standards, but our criteria are clear primary corridors, strong demographics, high traffic counts and credit worthy tenants. Under Jon Kattenar's leadership, our investment team is underwriting hundreds of opportunities each month. We have the luxury of choice, the discipline to grow one asset at a time and the responsibility to maintain our leadership by acquiring only the best, even in the top quartile of the convenience sector. It's 50 times larger than our current portfolio and we've structured our team, our balance sheet and our operations to scale. Curbline has all of the pieces on hand to generate double digit free cash flow growth for a number of years to come. And based on our implied fourth quarter 2025 offo guidance, we're forecasting 20% year over year FFO growth, which is well above the REIT sector average. In summary, Curbline has quickly built a track record that highlights the depth and liquidity of the convenience asset class. Our original 2025 guidance range included $500 million of convenience acquisitions. We've obviously significantly exceeded that pace and now expect 2025 investment activity of around $750 million with potential for additional upside. I couldn't be more optimistic about the opportunity ahead for Curbline as we exclusively focus on scaling the fragmented convenience marketplace and delivering compelling relative and absolute growth for stakeholders. And with that I'll turn it over to Connor.

Thanks David. I'll start with third quarter earnings and operating metrics before shifting to the company's 2025 guidance raise and then concluding with the balance sheet. Third quarter results were ahead of budget largely due to higher than forecast noi driven in part by rent commencement timing along with acquisition volume, NOI was up 17% sequentially driven by organic growth along with acquisitions outside of the quarterly operational outperformance and some upside from Lower G and A, there are no other material call outs for the the quarter, highlighting the simplicity of the curb line income statement and business plan. In terms of operating metrics, leasing volume in the third quarter hit record levels even after adjusting for the growth in the portfolio. Overall leasing activity remains elevated and we remain encouraged by the depth of demand for space which we expect to translate into full year 2025 spreads consistent with 2024. In terms of the lease rate, the strong aforementioned volumes resulted in a 60 basis point increase sequentially to 96.7%, which is among the highest in the retail REIT sector regardless of format. To put some context around that, in February of this year we acquired a six property 211,000 square foot portfolio for $86 million since acquisition just seven months ago. In that subset of properties alone, we signed 28,000 square feet of new and renewal leases, taking the lease rate up to over 96% from 94% of time acquisition. This leasing velocity speaks to the level of demand for high quality convenience properties and the speed at which leasing can occur given the simple format of the property type. Same property NOI was up 3.7% year to date and 2.6% for the third quarter despite a 40 basis point headwind from uncollectible revenue. Importantly, this growth was generated by limited capital expenditures with third quarter CapEx as a percentage of NOI of just under 7% and year to date CapEx as a percentage of NOI of just over 6% for the full year. We continue to expect CapEx as a percentage of NOI to remain below 10%. Moving to our outlook for 2025, we are raising FFO guidance to a range between $1.04 and $1.05 per share. The increase is driven by better than projected operations along with the pacing and visibility on acquisitions that David mentioned. Underpinning the midpoint of the Range is number one, approximately $750 million of full year investments with fourth quarter investments funded with cash on hand number two a 3.75% return on cash with interest income declining over the course of the quarter as cash is invested and number three G&A of roughly $31 million which includes fees paid to site centers as part of the shared service agreement. You will note that in the third quarter we recorded a gross up of $731,000 of non-cash G&A expense which was offset by $731,000 of non-cash other income. This gross up which is a function of the Shared Services Agreement and that's to zero net income will continue as long as the agreement is in place and is excluded from the aforementioned G and a target in terms of same property NOI. We are now forecasting growth of approximately 3.25% at the midpoint in 2025, but there are a few important things to call out. Similar to our leasing spreads, the same property pool is growing but small and is comping FFOf 2024's outperformance and it includes only assets owned for at least 12 months as of December 31, 2024, resulting in a larger non same property pool that is growing at a faster rate on an annual basis driven by an expected increase in occupancy. Additionally, uncollectible revenue was a source of income in both the third and the fourth quarters of 2024. As a result, uncollectible revenue will remain a year over year headwind, particularly in the fourth quarter despite limited year to date bad debt activity and very strong operations for moving pieces between the third and the fourth quarter as a result of the funding of the private placement offering in September. Interest expense is set to increase to about $6 million in the fourth quarter. Interest income is forecast to decline to about $3 million and GA is expected to increase to just over $8 million. Additional details on 2025 guidance and expectations can be found on page 11 of the Earnings slides Ending on the Balance Sheet Curbline was spun off with a unique capital structure aligned with the company's business plan. In the third quarter, Curb Line closed a $150 million term loan and funded a previously announced $150 million private placement bond offering, bringing total debt capital raised since formation to $400 million at a weighted average rate of 5%. Additionally, the company expects to fund an additional $200 million of private placement proceeds on or around year end at a blended 5.25% rate. Curb Line's now proven access to unsecured fixed rate debt is a key differentiator from the largely private buyer universe. Acquiring Convenience Properties the net result of the capital markets activity since formation is that the company is expected to end the year with over $250 million of cash on hand and a net debt to EBITDA ratio less than one times, providing substantial dry powder and liquidity to continue to acquire assets and scale, resulting in significant earnings and cash flow growth well in excess of the REIT average. With that, I'll turn it back to David.

Thank you, Connor Operator, we're now ready to take questions.

At this time I would like to remind everyone in order to ask a question, press star and the number one on your telephone keypad. Your first question comes from the line of Craig Mailman with Citi. Your line is open.

Thanks. It's actually Nick Joseph here with Craig. Maybe just starting on kind of your last point, Connor. You know obviously the balance sheet's in very good position, but you did institute the at-the-market (ATM) program or put one in place. So how are you thinking about equity from here? Recognizing the balance sheet is in a good spot, but just given where the stock trades at least relative to NAV and where you're seeing acquisition cap rates. Sure, Nick Morning. So to your point, we put in a at-the-market (ATM) on October 1st. We also put in a share buyback on October 1st. And if you recall from our press release, we simply stated that like all other public companies, we should have all the tools available at our disposal for equity. At the risk of sounding like a broken record, for us we look at the source and the use and so if we had a use of capital that we thought was accretive to fund with equity, we would Consider it similar to other public REITs. But outside of that, you know, we're sitting on a significant liquidity position. We've got pretty significant embedded growth. There's a high bar there. So again, to repeat my point, we look at the source and the use at this point we haven't issued anything to date, but that could be, that could change depending on what we see from an investment perspective. Thank you. And then what's the stabilized yield on the recent lease up acquisitions, you know, and how does that compare to the in place cap rates at acquisition?

Nick? I would say that our acquisitions this quarter, the going in cap rate was a bit higher than last quarter. I would say if you look at over the course of the year, we're still blending to the low sixes, which is a pretty good reflection of where the top quartile of the sector is trading. The stabilized yield, if you look out a couple of years, is really dependent upon market rents which appear to be continuing to grow and you can see that in our spread. So I hate to even put a number on what I think stabilized looks like in the next two to three years, but it sure feels like the indications are that mark to markets are growing.

Thank you.

And your next question comes from the line of Todd Thomas with Keybanc Capital Markets. Your line is open. Hi. Thanks. Good morning. I just wanted to talk about the acquisition activity in the pipeline heading into 26. You talked about 750 million for the year. That's up from around 500. So an incremental 100 million or so here in the fourth quarter. How should we think about the pipeline beyond 4Q? How the pace of acquisitions may trend into 26 and whether you're seeing more product come to market as the company continues to be active in the space.

Hey, good morning, Todd, it's David. The amount of inventory we're underwriting is definitely increasing every quarter. I think John's team has built relationships nationwide. We're starting to see things that we might not have seen in the past. I would say we're being highly selective on exactly what we want to transact with and what we don't. And you know, if you think about the prepared remarks, I know you said guidance was originally, you know, 500. So far, year to date we're at 644 and we would expect that the full year is around 750. But there's potential for upside on that. And I think the pipeline going forward is really going to be more of a result of not only increased visibility and deal flow but also the episodic nature of some of the portfolio deals that we've done, they're harder to project. They are out there. And we're building the relationship so that we feel like we're going to have the ability to take a peek at those when they come to market.

Okay, so it sounds like maybe around 500 million is kind of the right target to think about on sort of a recurring basis. And then when you layer in some, some larger transactions perhaps that that could be kind of the needle mover moving forward.

I don't think that's what I was implying. What I said is we feel confident that 2025 is going to be 750 with potential for upside and we'll see what happens next year. But we're pretty confident that we're seeing an awful lot of inventory that we like.

Yeah. And Todd, to Dave's point, I mean, I think we've kind of built a machine now where we've got visibility on the fourth quarter and the first quarter of next year. And so David's point, our visibility is a lot higher than where it was when we set our initial target. So once we get to 2026 and talk about guidance, we'll provide more of a framework around how we should think about investment volume. But to David's point, I mean, we kind of have visibility now on the next call, five or six months, which is a very different perspective than we had at the time. The spin off.

Okay. And then as we think about 26 and sort of the growth algorithm for the same store, which I realize is. Is rapidly changing, you have blended leasing spreads have been in the low double. Digit.

Cash spread range. Can you just remind us what the portfolio's blended annual escalator looks like? And then are there any other sort of considerations that we should think about moving forward? No, it's a good question, Todd. And to kind of the genesis of the question, there is a significant pool change from 2025 to 2026. The good news is the net result is, to David's point, we're buying assets that are very similar characteristics. So there's no material differentiator in terms of structural growth or bumps between the 2025 pool and the 2026. If you recall, at the time of spinoff, we said we felt our 2024, 2025, 2026 growth would average north of 3%. If you think about 2024 was 5.8%. 2025, our midpoint of our range was 3.25, which implies that we would have pretty steady growth over the course of 2026 comparable to 2025. So there's no material considerations to your point in the growth algorithm. This is a really simple company with a really simple income statement. There's nothing for us to call out. There will be headwinds to next year redevelopment opportunities that will headwinds, nothing like that. So I don't want to make it sound formulaic. There's obviously a lot of work to get there to your point in terms of leasing and volume, etc. But it should be a growth level that's pretty steady on an occupancy neutral basis compared to any portfolio we're looking at in terms of same store pools. Let me know if I answer your question there.

Yeah, that's helpful. All right. Thank you.

You're welcome.

Your next question comes from the line of Ronald Camden from Morgan Stanley. Your line is open.

Hey, I just want to go back. To sort of the cap rate conversation. Obviously you guys are thinking about IRRs here, which I appreciate that, but maybe if you could just double click, I think you said low fixes. Just wondering sort of what are the ranges of those and any difference between sort of larger deal and portfolio deals. And more importantly, as you sort of a year in and you know, more people are finding out about this business, how should we be thinking about the potential for cap rate compression? As you know, you're thinking about the next 12, 24, 36 months. Thanks. Hey Ron, good morning, it's David. I mean cap rates as you are aware and you alluded to, we underwrite for irr, but of course the result is going in cap rate when the assets are quite small, the cap rate on year one can be pretty wildly different. Most importantly, if there's a vacancy, one of the things we noted last quarter was we had some assets that we bought that had one or two vacant units. But in a small format strip center, that means that the cap rate can be quite low to make up for that vacant space and the growth opportunity. On the other hand, there could be fully stabilized assets with strong credit that has a little bit less growth opportunity, but it's also a stable growing asset with not a lot of cap back. The net result is the cap rate range can be quite wide in this sector. It can be low fives to high sixes, even for the top quartile. If you're buying assets with worse demographics, pretty low traffic counts, and tertiary markets, you could end up closer to a seven. But those aren't the assets that we've been interested in. And that's why I've kind of averaged it down to say that we're blending to a low six, but I'd say there could be 100 basis point swing on one asset to the next, just given the fundamentals of that rent roll. Yeah.

To David's prepared remarks, Ron. So we were just over a six in the third quarter. To David's comments on buying some vacancy, our fourth quarter blended to six and a quarter. So again that's pretty consistent. We've been buying over the course of the year. To David's point, vacancy could swing that 20 basis points on a blended basis, but it's been pretty steady to your point on where they could go. I mean it feels like that's a macro question as opposed to a sector question. There's a lot of interest in retail in general. I don't think that's unique to convenience assets, but I think it's going to be much more dependent on rates more than anything.

Great. I think that's really helpful. And just going back to the same store conversation. Look, occupancy has been building this year, so presumably that's a tailwind for next year. But when you sort of look at the lease rate, what do you guys sort of think is the structural sort of cap that you can sort of get on that?

Thanks, Ron. It's a really good question. So if you look for the total portfolio, we're at 96.7%. The same property pool is 97.1. It feels like low 97s is probably the peak here. It doesn't mean there's not occupancy upside though because we've got a little bit wider least occupied spread than we historically had run out of the last call seven, eight years that we've been tracking this foot portfolio. But David, I don't know if you feel differently. It feels like a couple hundred basis points of structural vacancy is probably the right spread and that's just churn of a tenant moving out in the timeline to put someone back in.

Yeah. I think the only thing I would add to that is that the S and O pipeline and the amount of occupancy upside you would typically see in a retail portfolio kind of gives the high watermark for growth. The difference with a portfolio where we're specifically buying a shorter Walt with a higher mark to market means that most of our growth going forward is going to come through renewals, not necessarily through occupancy. Helpful. Thanks so much. Thanks, Ron.

Your next question comes from the line of Alexander Goldfarp from Piper Sandler. Your line is open.

Hey, morning down there. So, two questions I guess. David, let me just go to that comment that you just made about the types of centers you're going for. Increasingly it seems that just given the dearth of product, people are sort of eager to buy credit or vacancy issues to be able to get at availability to put tenants in. As you guys look at your target convenience centers in the deal flow, are you seeing a lot of opportunities where there is some potential credit or vacancy issues that would allow you to really drive rent increases by taking out a less productive tenant replacing it or convenience centers don't really offer that same potential that you'd see in a normal open air shopping center.

Good morning Alex. There's always going to be opportunities to upgrade credit, but I will say that in a larger format retail environment you might be especially proactive because the benefits of upgrading tenant also have a strong traffic driver and you need that traffic driver to feed your other tenants. What's unique about this business is that there's really not much crossover traffic between the even adjacent tenants. The tenants are leasing space because they want to be near the customers on their errand runnings. So our desire to re-tenant buildings is pretty low. What's most important is that we have tenants that are able to generate enough profit to afford the rents that we want to charge. So I would say we're not going to be very aggressive on retrofitting and merchandising properties. What we are going to be aggressive on is raising rents at renewals. And that's part of the reason why I like the convenience center because you tend to have leases that don't have nearly as many options as a larger format tenant. So we can actually get to the market rents which are continuing to grow.

Okay, and then the second question is you talk a lot about, you know, sort of the consistency of your earnings growth and obviously you're doing that with the balance sheet the way you're mutually funding, you know, using debt and cash. But as we think about the, you know, the spreads, you know, to your implied cap rate, is it your view that you will always maintain a positive spread in order to be able to drive the sort of double digit earnings growth that you aspire to. Or your view is that you could buy inside of your implied cap rate but through rents outgrow and have that asset be accretive?

Alex, it's Connor. I'm going to attempt to answer and let me know if I, if I address this, our view Our kind of business plan when we completed the spinoff was to invest over a five year period. There's a half billion dollars per year and that led to double digit growth and that required no additional equity. If equity over the course of that five year plan was accretive, we would consider it and that would extend that timeline or add to that growth profile. Our view in terms of how we structured that growth algorithm to Todd's point was to say that we could buy at a call to 100 basis point debt spread over the course of that five year period, which is consistent with the last 30 years and the kind of debt spread for high quality assets. If that spread compressed, it obviously would impact that. But there's other levers we have to pull. And one of the unique and exciting things to David's point, to Ron's question was we can generate pretty compelling occupancy neutral same property growth and generate significant free cash flow relative to the enterprise. Those two pieces are pretty powerful growth drivers that lead us to in our view have the ability to generate better than average versus peers or the REIT sector. Occupancy neutral growth or leverage neutral growth. Kind of the genesis of your question. So if spreads compressed, it could, it could impact things obviously in terms of relative growth. But we have some other levers that help. The last piece is on gna. We are still scaling our G and A load over the back half of the five year business plan. We start to scale that GNA load which is pretty impactful as well. So it's a, it's a really complicated question. I. Let me know if I'm addressing it. But there's a lot of levers we have to pull. But there's no doubt that investment spreads impactful to us as it is to other companies that are extremely growing.

But ultimately Connor, what I hear you saying is your focus is on FFO growth, not same store. The focus is on delivering double digit. Okay, just want to make sure.

Yeah, for sure. I mean look, I mean they should be correlated and our same property growth, remember our whole pool is in there. There's no redevelopment pipeline. There's nothing that's an ebb or flow to the, to growth. So of course it's, it's, it's important to us. It's important to David's point for us to express how powerful the organic growth profile is. But for the majority of the business plan, what drives the most? The biggest proportion of FFO growth is external growth and scaling our expense load. So we're focused on it it's important to us and. But until we are, you know, a couple years in this business plan, it is. We are less reliant on organic growth.

Thank you.

You're welcome.

Your next question comes from the line of Floris van Dychkam from Landenberg. Your line is open.

Hey, morning guys. Thanks for taking the call. Question on your options. I can't actually see what percentage of your leasing activity this past quarter was option renewals and what is that typically. And how do you think about that. Going forward in terms of limiting that ability for your tenants?

Good morning, Flores. I would say that in general, the option rents for large national chains that do have options are consistent with the rest of the industry, which is 10% every five. The difference is that they typically don't have as many options as part of the original term. And so if a landlord does a five year deal with a five year option or a ten year deal with two five year options, by the time we buy the asset, if you look at our Walt, we're buying into that first option or even second option. And so we tend to be able to capture a lot more growth than if you had five or six options, which is fairly common for a much larger store.

Yeah, and the only thing just expand on that floor is. So the reason, the question might be why your spreads less than 10%. Remember, we're getting fixed bumps on an annual basis, which is different than, you know, an anchor tenant where you're just flat for a significant period of time and then you get a big pop after 20, 30, 40 years. And so that's why we disclosed straight line rents as well. You can see we're closer to 20 there on renewals. So we're today at the point realizing some of the mark to market over the course of the lease. But then we got another bite at the apple earlier than you would from a lease out that you signed and sit on it for 20 years. Thanks just to. So I think your peers are somewhere around 40% of all leasing activity each quarter is options. Is that something similar with your portfolio.

Today and or is that a little. Bit lower already and you expect that. To trend even lower going forward?

I don't have the exact number off top of my head. I mean, we do skew towards the national. So I bet you were modestly lower, but I don't have the number available at my fingertips right now. Thanks, Connor. My second question, I noticed you had a couple of larger assets in your acquisitions. I think Mockingbird Central, which is like.

80,000 square feet and you had one. Spring ranch at 44,000 square feet. Could you talk maybe about the rationale. Behind those acquisitions and are they different assets than the rest of your portfolio?

Floris, It's DAVID, the size of the asset in many cases is simply to do with what someone was able to get zoned in a certain submarket. So anything in general you're looking at, assets that we typically buy are significantly smaller, but there are locations. Boca Raton is another one. We have a large asset we bought a couple of years ago. If you're in a market that's highly supply constrained, a lot of the local kind of running errands, shop business is concentrated in certain zoned areas. So you do get larger properties in some of these higher density markets. And honestly, the big difference for us is when we look at those types of properties, we're just very careful to understand why the consumer is coming there, what their trip generation is looking like. And we want properties that have very little control from larger tenants. And so even if the property is larger, it's generally made up of smaller tenants.

So you're not concerned that you got.

Too much shop space that you have to lease partly because of the supply constraints. It's more like if you think of, you know, a major thoroughfare through the United States, take Roosevelt Road in Chicago, or think of, you know, in Phoenix, you're kind of up and down a long thoroughfare. A lot of the supply is just strung out along a long corridor. But in certain older markets where the zoning was different, instead of being linear zoning, it's more like concentrated pocket zoning. You end up with having the same amount of inventory, but it's just concentrated at an intersection as opposed to an elongated thoroughfare.

Okay, thanks, David.

Thanks, Laura.

And your next question comes from the line of Mike Mueller from J.P. Morgan. Your line is open.

Yeah, hi. I guess as the mix of institutional competition that you're up against for acquisitions, has it been changing materially? I guess over the past few quarters. And then just for a second question, how sensitive is the competition to changes in interest rates, say like the 10 year dipping below 4%. Again.

Mike, I'll start with the second first. I think that competition tends to be very impacted by rates. Most of the competition that we're bidding against are levered buyers, and that's either small families, local investors, but it also could be private equity funds or even institutions that are using an advisor or an operator. The debt component is important. So I do think that they're more impacted than we are because we still remain to be one of the only cash buyers out there. And so I think on the acquisitions front, we're able to be pretty desirable as a counterparty simply because we don't rely on rates. As far as competition goes, there's definitely competition in the space. I mean, these assets are well attended when they come to market. I think I said last quarter about half of our inventory is off market. And that's really coming through relationships where we have a chance to acquire asset before it's broadly marketed. That I think is an earned position if you've got a reputation for abiding by your word and closing. So I think the kind of pre marketed or off market deals are a pretty important source of inventory for us. But we are seeing competition whether it's significantly more than a year ago. I'd hate to say that there's a lot of assets out there in the market. We tend to be focused on the top quartile in terms of quality. There are others that are focused on the middle or the bottom quartile. So the sector does get a lot. But I wouldn't say there's been an amazing difference in the last 12 months with competition.

Got it. Thank you.

Thanks, Mike.

Thank you. And there are no further questions at this time. David Lukes, I'll turn it back over to you.

Thank you all very much for joining and we'll talk to you next quarter.

Thank you. This does conclude today's presentation. You may now disconnect..