TCO
#Thanks, Mike.
I will say, it is close.
We did not see any drop-off in traffic generally, and I would not know how to parse it from the Zika virus.
I will say that when you look at data points on Hawaii ---+ I'm sorry, on San Juan tourism, there are whole bunch of positive data points.
There is a lot of positive data points on the general economy, which seems so inconsistent with all the headlines that we are reading every day about the debt problems of the country.
And it is almost like they are disconnected.
But in the second half of 2015 as an example, employment was up 2.5% and the unemployment rate fell almost 200 basis points to 12%.
The hotel registrations in 2015 over 2014 were up almost 5%.
Visitor expenditures in 2015 were up 3.6%.
Cruise ship visitors were up 25%.
There are incredible positive data points about tourism.
Our sense is that, notwithstanding the dramatic debt crisis that's creating a lot of challenges, I mean, every time you talk about San Juan and Puerto Rico, it is like people ---+ you have to get over that when you first start talking to them.
But the fact is that tourism has actually been trending very well.
At least through 2015, again, I cannot comment specifically on the Zika virus.
I don't think there's any magic number to either.
If we build good, strong assets in quality locations in quality markets, then whether it is 5 assets or 10 assets, people will be attracted, capital will be attracted to those assets.
And from the standpoint of human talent, our human talent will be attracted to wanting to work on those assets.
So it is not three.
We know that.
It is not three.
And how much of the assets we have to own, therefore how much capital are we actually going to put in, and how big are those assets.
The Korea project, Hanam, is a billion-dollar project.
So we don't have to own a billion-dollar project.
We would be very happy owning 34% of that billion-dollar project.
In China the projects are $350 million to $400 million, 100%.
We don't want to own 100% of a project in China.
We want to have a strategic partner.
So it is all based on what the opportunity is, what the capital is that's required, how we capitalize it, and what else we have going on.
We have three Sears stores, and that is one of them.
And we obviously have talked to Seritage and to Sears' parent a number of times about all three of those stores, and we are happy to talk to them about those locations.
But it takes ---+ we both have to be interested in pricing or terms that make sense to both of us.
I don't think I want to comment specifically about any one of the stores, or what our specific negotiations are.
Number one, construction cost, generally.
Number two, we had very significant contingencies in the project.
There were a lot of unknowns when we began.
It was our first construction investment there.
We felt it was prudent to put very significant contingencies there.
And now it is at 70% actually built out, and it is 100% bought out.
Both Shinsegae and ourselves believe that it is appropriate to reduce the overall plans for the project.
We are also on the soft cost side, things like tenant allowances, are doing very well against our budgets.
Yes, it is <UNK> here, in terms of bed debt, it is a little higher now than we typically trend.
It is a highly variable number and hard to predict, and very tenant-specific.
I would say with regard to the bad debt that we have now, or had in the quarter, you should not read anything into overall tenant health from that.
It is a very, very specific to a few centers and to a couple of tenants within that center.
But it is not in our view, one; a read-through for the year, and not in any way predictive or representative of overall tenant health.
We are not seeing the volume of store closings that many others are anticipating, and you can see it in our occupancy and leased-up space statistics, and again I think it speaks to the general quality of our portfolio and the demand for space that I talked about earlier.
Thank you.
It was a negotiated transaction.
<UNK>, we said in the script that we expected $80 million of NOI from the four projects together in 2019.
For the most part that is a stabilized number, you will have an extra year in there for Hawaii, but that represents stabilized ---+ a full-year stabilized number for the three in Asia.
As to exactly how that is going to ramp over between 2016 and 2019, I don't want to give you guidance for future years before we are prepared to do that.
But I think it's reasonable to think that somewhere between 10% and 15% of that number in 2016 is a reasonable number; and it won't ramp ratably over the next few years, but that's probably not a terrible proxy for how you get there.
Directionally that is probably an accurate statement.
If you take this year, you've got FFO ---+ I'm sorry, comp center NOI growth for this year, we're saying is going to be 5%, that's what is in our guidance given the positive CPI outcome.
But if you look at the range of FFO that we have for this year in terms of FFO growth, at the high end of our range is about 8% FFO growth, from the midpoint it's obviously substantially less than that.
And interest expense is part of the reason why that's happening.
In terms of positive FFO impact or contribution, you should start to see that, certainly by 2018 and into 2019.
As it relates to 2017, my guess is you are closer to neutral, but we are not at that point right now where we can give you guidance on 2017, but I think directionally what you are saying is not a crazy way to look at it.
There really shouldn't be, <UNK>.
They really shouldn't be a material difference.
Thank you, everybody.
We appreciate you joining us on our call.
Obviously, if you have more questions let us know.
We really do invite you to come see Xi'an, and perhaps when we get the other two open, we will make a trip.
Thank you everybody.
Chris, thank you, goodbye.
