HR
#Sure.
Certainly the pipeline for development, not unlike acquisitions, I think is very robust and as I listed off a few examples we are seeing good development and redevelopment volume in the pipeline.
So that is true.
I think it's a fair statement.
The development by nature is a slower process and so it can be a little bit bumpier and choppier in terms of starts and consistency and we really view development as supplemental to our growth.
Internal growth being the main focus but acquisitions being a little more protectable in terms of pace.
But development being more thoughtful and strategic in terms of what relationships, what locations we want to pursue and expand.
So it's just kind of ---+ we're seeing an uptick in opportunity as you described.
So in terms of the 5%, certainly it harkens back to what we've been through and we don't anticipate any kind of collision of forces that would put us in that spot in terms of the market.
With the Affordable Care Act change and the recession and so forth, but I think we all recognize that it's tough when you have that much unleased space on your balance sheet.
It's a lot to carry and we want to make sure we don't do that.
But at the same time we don't want to miss the opportunity in using our skill set to create value.
So I think it's just creating a little balance and recognizing the cost of that and the risk of that.
Yes we has said on the debt to EBITDA kind of the low to mid 5, which is where we are today.
We are at the low end of that range.
And part of the idea of being in that range is to create enough stability and safety for developments as we do fund them and come online.
Yes, that's a number as with a lot of these numbers will move around from quarter to quarter depending on the specific circumstances of what is going on.
We did have one lease in the last quarter that did increase it a little bit.
I think we've generally said that on renewals, $1 to $2 is a good range with around $1.50 as an average and then on new leases, that can be around 3 times that.
So let's call it $4 to $5 range with somewhere around $4.50 is a good average.
I will say we wouldn't be surprised if we saw that tick up a little bit.
Especially given the fact as you see in our portfolio a kind of shift in terms of the mix of assets that we have in some higher costs, but then also higher rent markets like Seattle and LA and D.
C.
Obviously there would be a different expectation for TI costs associated in those markets versus your more middle of the country markets.
Thank you.
Our experience is that you have to go through the lease cycles to really kind of feel the pain of what could or possibly happen in those situations.
And again it's not that all of them are going to go through that, but much more will there in the off-campus settings then on-campus.
So I think it just takes buyers ---+ and we have a lot of capital obviously people start to look through some of those things and I think it's just going to take experience running those.
And people, investors have different objectives.
They may not be looking for as high of contractual rent bumps and cash leasing spreads and tenant retention and they have more of a macro view on cap rates or where things are going.
So that just takes ---+ there's a lot of different folks and different strategies but our view is for what we are doing the multi-tenant just fits the profile more directly.
So whether or not, we don't certainly think we are missing anything in terms of that opportunity.
I think the 603 rule sort of underscores the fact that there was a rapid buildup of off-campus hospital outpatient departments sort of chasing that reimbursement a little bit and CMS curbs it.
And that's the kind of thing that you run into as <UNK> described when you go off-campus.
It's a little more volatile out in those types of settings.
So staying close to campus protects you from some of that.
Thanks, <UNK>.
Thank you.
We appreciate everyone being on the call today and I guess next call in 2017, in February.
So with that said, have a good rest of the year.
We will talk to then.
Good day.
