KRG
#We aren't doing another significant transaction right now, but to your question, we are prepared because we have executed exactly how we laid out the plan when we did those two transactions.
And unlike others, when we closed on those transactions we had no hiccups.
In fact, we excelled and the Company became stronger because of both of those transactions.
So the point that we were making is that we have done deals that have improved the portfolio and improved the balance sheet.
When you look at the balance sheet today from where it was, it is significantly stronger and more flexible than it was prior to those two transactions.
And I mentioned that we grew our free cash flow per share, mind you, 7.5 times in that period of time.
That's why a Company like ours would look at a transaction and it is why we would pursue something like that because it makes a lot of sense.
However, if we are looking at a transaction, as we have this past quarter, and we get to the point where we deem that those things would be in jeopardy in any way, then we won't do that transaction, which is why this is what occurred.
So I think we are very capable of doing these things, and as I mentioned our operation ---+ our operating efficiency is the best in the business.
That's why we're able to do these things.
I think we feel very comfortable with our capabilities, but we are most focused on managing risks that ---+ it is around these deals to make sure they're the right deals.
Well, goals will always move higher, but we need to hit this one first.
We're at 88.3%, we want to be at 90%.
We are very focused on it.
There's a lot of upside there for us in terms of NOI, cash flow, and earnings growth.
Very profitable business in small shop side of our business.
That's our focus, is to hit that and try to maintain it.
I would say maintaining ratio would be something we would want to do.
But yes, we think we can continue to excel here.
We think our portfolio is capable of reaching that.
But by the same token we don't just put tenants in spaces to try to achieve that goal.
We turn down tons of deals every month based on us not being comfortable with a particular tenant.
It is really more about high quality leasing than just leasing.
On the first phase we are down to very few units remaining, and only a handful.
So when you look at that there's a profit sharing portion to this basically arrangement we have with the builder.
So we have a couple units to sell, and then we will look at the end, and then there's potentially some additional profits that we will be able to book as it relates to that.
Just to point out that we call it any street residential sales, but it has been a fee income stream since 2010.
I think it is very important to point out.
It is almost like a seven year lease that has been in place that keeps providing additional cash flow every year.
So it is winding down, but it has been a great source of earnings and cash flow for the period of time since 2010.
Thanks.
Good morning.
Well I think, Alex, that these things are situational.
So everything we look at, we look at on its own merit.
So as I mentioned in the call, I think right now our focus is on redevelopment in the portfolio that we have and that we're adding value to, and we're funding in a very efficient way.
And the returns are high.
That said, it doesn't mean that you don't ---+ when you are focused on that you don't look at anything else.
You are always looking at what you can do to ---+ that's going to create the most value per dollar.
So I think it is hard to say that we're going to limit anything.
I think what we're going to do is we're going to continue to do what we have been doing, which is growing free cash flow, improving the balance sheet, and being in a place where we're very flexible to adjust and adapt to the macro environment.
I mean, we are in an environment that is pretty shaky when you look at what's going on in the world.
So we got to be ready to adapt and pivot to that, and that is what you think about when you look at anything.
When we spend $1, we're going to think about all those things as it relates to that $1.
It doesn't mean that we won't ---+ that we would exclude any particular thing, but it means that we're going to be reviewing it with that lens of caution around the macro.
So ---+
I think it is fair to say that large scale ground up development right now in our view does not pencil very well.
So yes, I think it is fair to say that where we were in 2004 as we looked at the landscape is very different to how we look at the landscape in 2016.
So I think that it doesn't mean that we wouldn't do ground up development in the right scenario, but not to the scale and not to the exposure to our balance sheet that we once had.
I think the exposure that we have to non-income producing assets right now is the exposure that is the maximum exposure as we look today.
It could change, Alex, based on the macro.
We're not going to dig our head in the sand.
We're going to pivot based on what's happening, and my personal view is that a little bit of caution right now is probably a good thing.
Look, I think in my view this a supply and demand business, and supply remains extremely low.
However, demand is what I would call moderate.
So I think retailers are looking at the landscape and are certainly willing to look across spectrums as it relates to where they want to be, but they are always going be focused on the dirt, the real estate.
So when you go back and talk about our Company over time, we have been very good at understanding dirt, understanding real estate.
We will continue to focus on that.
We want to own assets that are in locations that we will be able to transition.
So that is our view of the market is that it is very low supply.
So that makes retailers ---+ that puts retailers in a position they will look at various products.
But look, when you look at our portfolio we own 121 properties.
I think 119 of those are open air shopping centers.
That's the business we like.
We like being in a business where we have good tenant relationships.
We will continue to focus on having great tenant relationships and great real estate, and I think everything else will go from there.
Thank you very much.
Thank you, everyone.
We appreciate your time and look forward to talking to you next quarter.
