Strawberry Fields Reit Inc

AMEX:STRW

Q3-2024 Earnings Call

[Operator]

Good morning, my name is Ali, and I will be your conference operator today. At this time, I would like to welcome everyone to the Strawberry Fields REIT Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Jeff Bajtner, our Chief Investment Officer. Sir, please go ahead.

[Jeffrey Bajtner, executive]

Thank you, and welcome to Strawberry Fields REIT's Third Quarter 2024 Earnings Call. I am the Chief Investment Officer of the company, and I focus on acquisitions of new deals, growing our operator base and investor relations. On the call with me today are Moishe Gubin, our Chairman and CEO; and Greg Flamion, our CFO.

On Friday, the company issued its 2024 third quarter results, which is available on the company's Investor Relations website. Participants should be aware that this call is being recorded, and listeners are advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions and beliefs about Strawberry Fields REIT's business and the environment in which it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, financings and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond its control.

Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the non-GAAP measure reconciliation page in our investment presentation.

And now on to discussing Strawberry Fields REIT. While there are many current shareholders on the call, we also have new and prospective shareholders, and I'd like to share a little bit of background about the company. The story began 21 years ago, when Moishe Gubin, our Chairman and CEO; and Michael Blisko, one of our directors purchased their first skilled nursing facility in Indiana. Once they found success with that first facility, they quickly bought a second and a third. Over the next 9 years, they grew from that 1 facility to 33 facilities in Illinois and Indiana.

In 2015, with those 33 facilities, Strawberry Fields REIT was created and the company has grown significantly since then. As of September 30, the company owns and leases 114 facilities in 9 states with over 12,800 beds and as we get closer to year-end, we look forward to growing this number. As it relates to this past quarter, I wanted to share some key highlights. The company collected 100% of contractual rents. In July, the company filed a registration statement on Form S-3 with the Securities and Exchange Commission. In August, the SEC declared the registration statement effective and the company established an ATM program.

Through this program, the company began selling shares to the public for the first time as we initially went public through a direct listing. These shares will be sold at the company's discretion and the ATM program is expected to provide the company with additional financing flexibility by increasing the stock's liquidity and facilitating growth. In August, the company completed the acquisition for 2 skilled nursing facilities with 254 licensed beds near San Antonio, Texas. The acquisition was for $15.25 million. The facilities are leased to the Tide Health Group, a new third-party tenant and consultants. These properties will increase the company's annual base rents by $1.525 million and include annual escalators of 3%.

In September, the company completed the acquisition of a property near Nashville, Tennessee, comprised of an 83-bed skilled nursing facility and a 23-bed assisted living facility. The acquisition was for $6.7 million. The property was added to an existing Tennessee master lease and will increase the company's annual rent by $670,000. As part of this deal, the company issued the seller's $3.1 million in strawberries deals REIT stock as consideration for the deal.

Subsequent to quarter end, the company acquired an 86-bed skilled nursing facility in Indianapolis, Indiana, marking our 115th facility. The acquisition was for $6 million. The facility was added to an existing Indiana master lease and will increase annual rents by $600,000. The company also entered into a purchase and sale agreement to acquire 8 skilled nursing facilities with 1,111 licensed beds located in Missouri for $87.5 million. The facilities are currently leased under a master lease agreement to a group of third-party segments.

Lastly, our Board of Directors authorized a cash dividend of $0.14 a share which is an increase of $0.01 a share from the prior quarter's dividend. The dividend will be payable on December 30, 2024, to shareholders of record on Monday, December 16, 2024. This dividend will be our ninth consecutive quarter of paying dividends, and in that time will be our fourth increase. This represents the philosophy of the company to teach the market that our dividends can be relied upon.

I would now like to have Greg Flamion, our Chief Financial Officer, to discuss the quarterly financials.

[Greg Flamion, executive]

Thank you, Jeff. Good morning, and welcome again to the Strawberry Fields third quarter earnings call. Starting off, we will discuss a quarterly comparison of the balance sheet as of September 30, 2024, versus the balance sheet as of the prior quarter June 30, 2024. Total assets are $661.5 million, which is $25.7 million or 4% higher than June 30, 2024. This increase is driven by real estate investments from the 5 properties we acquired during the quarter as well as higher cash balances from the Series A bond raise that occurred in August 2024. This was offset by a lower right-of-use assets as well as lower restricted cash and equivalents.

Liabilities are $606.3 million, which is an increase of $21.1 million or 3.6% from the prior quarter. The increase is due to the Series A bond raise that was mentioned earlier. The liability increase was offset by lower accounts payable and lower operating lease liabilities. Equity for the quarter was $55.2 million. This is a $4.6 million or 9.4% higher than the previous quarter. The increase is due to the higher third quarter net income and the sale of additional common stock offset by third quarter dividend distributions.

Moving to our next comparison. We are reviewing an analysis of the balance sheet as of September '24 versus September 2023. Total assets are $31.7 million or higher or 5% higher than the prior year. This increase is due to the cash and cash equivalents as well as higher goodwill, other intangible assets and lease rights. The lease rate increase is due to the purchase of the Indiana Master Lease 2 lease rights in February of this year.

Liabilities increased $30.4 million or 5.3% from September 30, 2023. The higher liability balance is driven by an increase of $46.6 million in net bonds offset by lower notes payable and other debt as well as lower accounts payable and accrued liabilities. Equity is $55.2 million as of September 2024, this is $1.3 million or 2.5% higher than September 30, 2023. The increase is driven by higher net income, a net increase in common stock. And these increases were offset by higher dividend distributions and negative foreign currency-related adjustments. Moving on to the next comparison, we are now discussing the quarter-to-date income statement comparison of Q3 2024 versus Q2 2024. The third quarter net income is $6.9 million, which is marginally lower than the net income from the prior quarter. Third quarter revenues and expenses were mostly in line with the second quarter. However, the quarterly change is due to slightly higher interest expense that was offset by lower G&A expenses.

Moving to the year-to-date P&L comparison. September '24 year-to-date net income is $19.9 million which is $5.5 million or 37.8% higher than the year-to-date net income in September 2023. This increase is driven by higher revenue due to new properties acquired in the trailing 12 months offset by higher operating expenses and higher interest expenses. This concludes the review of the financial statements in the presentation.

Jeff Bajtner will now discuss our current investment strategy. Jeff?

[Moishe Gubin, executive]

Well, actually, I'm going to -- it's Moishe. Thank you, everybody, for joining us today. This is being our second time doing this earnings call. We're still working on our kinks. We're meeting those folks as most of you that know about us. And so I'll just -- this presentation that we put on our website would have been sent out to everybody that you guys would have been following along on a screen. So I just want to walk everybody through the presentation that you could find on our site, and we're probably going to publish it today.

The 1 thing to note, right, so our financial statements are on GAAP financials and on the GAAP financials, you're at lower historical cost of the product or market, which undervalues it doesn't put our assets at the proper value. Our enterprise value today is probably about $1.2 billion. Like Greg said, our assets on GAAP of about $661 million, that's after depreciation and everything. We expect that in the fourth quarter, to close on about another $110 million of assets, and that should bring us to about $1.3 billion in enterprise value. And right now, we have enough -- we have a lot of cash. And we continue to do the ATM and bring in more cash under that, and that actually helps bring in more shareholders and helps the institutions get a little bit more shares. And I'm thinking in the long run for managing the stock price, the ATM is going to be a useful tool for us with the help of the investment bankers that are part of our world.

The next slide I want to go to just talking about the financial statements of the revenue. Our revenue was basically the same, and that makes sense. We have straight-line rents. On the straight-line rents, you take the total lease for 10-year because most of our leases are 10-year leases or 2, 5-year renewals. So under 10-year leases, you add up all the years and you divide it by the periods and they -- and it's the same number month over month over month. So you can expect stability. So our current numbers to stay stable with an increase of the new assets being bought that will tick up to about $31 million, which through 4 quarters, we expect that to be about $125 million next year. That's assuming we do no deals in '25 and though likelihood of us doing no deals is very slim.

Our expenses remain relatively flat. We're -- I think we're managed less expensively than most of the other REITs that are out there. our total overhead that we -- between salaries and everybody and our total overhead for running the business, I think it's less than $2 million annually. And we expect that to stay relatively similar. Our expectation for net income, like I said, our top line number is probably about $125 million next year based on what we currently expect to close this year.

And with that, our FFO, which is the metric we use should be probably closer to $75 million next year. Again, we -- our dividend slow and steady wins the race, and we didn't want to be erratic in our dividend. And so we've been keeping with being consistent and so therefore, we raised it $0.01 and we kept dragging along. If you go to the page where the math is, you could see where most of our stuff is mainly in the Midwest. We're adding to the footprint today by buying homes in Missouri, buying homes in Kansas, and we're buying more homes in Texas and Oklahoma, help fill in the spots.

And our basic investment strategy is we like to have master leases. So we either add more assets to a master lease or we buy a big enough portfolio for us to add a new location everything that we're buying is third-party operators unless it's an asset that fits currently into a master lease, that's with an affiliate of myself. Look at the FFO growth, there's been a 13% growth rate in our FFO. Very proud of that, like I said, from $30 million in '19 to $57 million in '24. And next year, we should break probably $75 million. Our base rent also went from $72 million in '19, and now we should end up with '25 number around $125 million.

And it's quirky because I'm -- we're all accountants here, Jeff, myself, Greg, and your financials are in GAAP. And under GAAP accounting, in a real estate company, the financials get a little wonky because you're taking depreciation and you look like it doesn't look right. The reality is, our assets maintain value, the tenants, they're all triple net leases. Our tenants are forced to take good care of the properties and the buildings are in great shape. They look good. We visit the properties twice a year minimally, and we have good contacts and relationships with all of our operators, the owners of the operators as well as mid-level managers that are managing the properties.

I'm super proud of our -- we haven't done anything crazy about the dividend, like I talked about a little bit before. Super proud of the fact that we're only doing a 47% payout ratio, which signifies about 100% of our net income. And then the rest of that money is what we're using to buy new assets, debt plus the ATM and then we're adding debt when we need to. Our debt ratio, we want to stay to about 50%. Really, our number has always been between 45% and 55%. I mean we're transforming. We're getting known to the marketplace. Even some of the new people on the call today, our analysts that have been hounding for years and now get their feet wet understanding who we are and what we're doing. We're very clean ran company. And we continue to do what we do. I just -- I expect that once we get really treated like everybody else in the market traded at a multiple that works than I could do more stock sales and then lower the debt load even more than where we are.

I mean equity at the dividend rate is really our cheapest form of capital today. That being said, I'll do whatever we have to do, which every action we're making is for the shareholders, and that should be accretive to our stock and accretive to our story and what we're doing. So super proud of the payout ratio being below 47%. And altogether, we expect it's the real -- the share growth is probably -- we're looking at a 12% growth rate. And so overall, we're -- we have a really good return for our shareholders. I know some people just care about what the dividend is and others care and they understand the stock price should go up as we make more money for the -- and the share becomes worth more money. And if you look at that -- if you look at the next slide, I mean I might be the only one looking at this stuff is attending $10.123, the stock price of $6.33 and the stock price of $10.1, was $12.69 so somebody that's owning the stock, the stock has gone up. Now mind you, that's an inordinate amount because that's just getting up to where our stock price should be trading. But in the long run, if the stocks trade in consistently at a certain multiple the fact that we make more money with the same amount of shares because we're using the excess cash and not necessarily diluting anybody, and we're buying more assets. It should make each share worth more. And then therefore, the stock should go up.

We're super proud as well of our debt, like we just talked about, where we have a bunch of our money sitting in HUD debt, 40%, 45% of our debt altogether is sitting with HUD debt, which is long-term money. We have plenty of other loans that we expect in the queue to be able to over to [indiscernible] basic loan terms about 35 to 40 years, 10-year plus [ 1.75 ] straight line. That's a good piece of business for us. And again, our debt today, our leverage ratio is right around 50%. And that depends on where you want to assess a cap rate on our assets. Right now, that's based on the 10.25% cap rate, if you put it out at 8.5%, probably in the 40s as far as leverage.

And that is all from this presentation that I have. I want to thank everybody for coming, and we're going to open the floor for questions.

[Operator]

[Operator Instructions] Our first question is coming from Barry Oxford with Colliers.

[Barry Oxford, analyst]

When you're -- you guys had mentioned a 10% cap rate I was wondering if there's any spread differential in cap rates versus the region, i.e., Midwest versus the Sunbelt region. Is there kind of a difference in cap rate or the cap rates kind of pretty close to each other regardless of whether it's a Midwest or Sunbelt?

[Moishe Gubin, executive]

Thank you, Barry. I appreciate you. Thanks for joining us today, and I appreciate the question. This is Moishe. I'll answer that. So I guess one of the things that differentiates us from our peers is I'm the founder, my partner Michael founded the company with me 21 years ago. And because of that, I've been relatively -- I wouldn't say risk averse because we've grown consistently. But we've been very regimented and disciplined on how we buy. And so our 10 cap purchase and it's either feast or famine, some years, we don't do any deals, some years, we do plenty of deals. Our math is the same. We're basically looking at last 3 years' financials, with certain add-backs being that our background is nursing home operators and no matter where the home is, whether it's in the Sunbelt or whether it's in the Rustbelt or anywhere else in the country. We're looking at the math to make sure that we're coming in day 1 with the tenant making a 1.25 coverage of the rent and where we're making 10% of our money unlevered. And then we add leverage and we manage our balance sheet.

So yes, we don't see a difference because we don't do -- we generally -- we run this company similar to the way I run my bank, OPHC. And that is, I don't -- we don't make many policy exceptions. We treat this like loan committee when we come in front of investment committee, and it's presented 20, 30, 40 pages of material. And we don't make policy exceptions. And our policies dictate that on day 1, tenants making money and we're making our 10% and the clean deal and all the boxes are checked. And we've been consistent with that.

And you might ask a better question, should we change it. And that question was good maybe a year or 2 ago when the interest rates were on the rise and where someone said to me that you're getting squeezed. And my answer was, well, I don't worry about that because we're a long game. So even if day 1, the 10% margin unlevered is what we get, and then we were not able to lever at such a great rate because of interest rates doesn't matter because we're in this -- we plan on holding that asset for minimum 10, 20, 30 years, and we should be able to get it refinanced at some point with hot debt or -- and then we manage our balance sheet effectively. And that's -- so that's what we do, and we've been consistent in how we do that.

[Barry Oxford, analyst]

Perfect. No, I appreciate the color on that. Fundamentals also within the industry seem to be fairly robust. You guys had gains in occupancy at 70.4%. How do you see that in '25? Can you continue to push occupancy much above this level? Or look, Barry, there's a point where frictional vacancy starts to happen.

[Moishe Gubin, executive]

No. I think our portfolio there's 2 sides to our portfolio. You have the big cities like the Chicago and to a lesser extent, like Indianapolis, Louisville, Little Rock, and those homes after corona, they bounce back because they have the volume of patients and people don't want to care for people at home in those -- in the bigger cities, it's harder to find the nice wife that's willing to take care of your mother, not to judge anybody in the world. But that being said, in our portfolio, a lot of our stuff is like in farmland, and we're in the middle of like it's beautiful Smoky Mountains or somewhere that when corona came along and you had long-term people that were living in the facilities for many years, and you lost that population that has been slower to come back.

So if you look at our occupancy in the city, our occupancy is higher than it was before corona, and that's almost near probably somewhere blended is probably 80% to 90% everywhere else. And then you got farmland that's probably stuck at 60-something that the buildings are making money, but they're still slowly, slowly building because they don't have the amount of volume of admits and discharges. And so the answer to you is yes. I mean I think that the census occupancy, tenant operators financials are going to continue to do better. And now with the new administration.

One of the first things that happened after the President elect became elected, as CMS eliminated their -- they pushed it off and it's going to get eliminated staffing mandate that was going to totally clover the nursing business, I mean, subject to the states giving more revenue. But yes, I mean occupancy totally to go up I mean, the tailwinds are -- in our tenants' business are great. I mean, really, really, really great baby boomers and with a red government. Red government usually is not so great for social programs. But from the point of regulation, the last bunch of years, the current administration has been really, really aggressive.

And I think it's the most fines that an industry-wide that the nursing homes have had annually year-over-year, the amount of fines and the amount of aggression that's been negative to the nursing homes has been the worst. I've been in this business since I graduated college as an accountant, I started as an accounts payable payroll bookkeeper literally in 1998. This is the industry that I spent all of my time on -- most of my time, I can't say all, for the last, whatever that is 27 years. And I can tell you this past 4 years, we're probably for the -- I mean, with corona and everything else, probably some of the worst years in the industry collectively. But now it's God willing there's a positive change that's going to be occurring.

And again, from our point of view, we just want to cut our rents, and we want our tenants to take care of their residents, and that's really -- the more money they make, the easier it is for them to take care of their residents when they're tight and really, really tight. It's harder for them because they have to choose between this or that when they only have x amount of dollars to spend.

[Barry Oxford, analyst]

Perfect. No, all of that makes sense. Going to the dividend, 47% payout you alluded to that it's 100% of net income. Is it fair to say that going forward, you're going to have to move the dividend basically a growth rate of the FFO or not necessarily?

[Moishe Gubin, executive]

No, that's exactly right. My intention -- and again, we act with good governance. So I'm not [indiscernible] We take into consideration cash flow, we take consideration shareholder attracting shareholders and what we have to do for the shareholder base and the like. And yes, I mean, it's most likely that as our FFO increases, I mean, more than most likely, I don't know if you said something -- I can't say definite because you never know it's going to happen in the future. But most likely, we will see as the FFO grows, so will the dividend at minimum.

I mean it also could be that at some point, we get large enough and the capital is that good. that I could raise money at a good rate, not debt, but equity -- at that point, I could raise and we could do similar to the other guys. And the other guys really are doing a payout ratio of like 90%. I've been against that thought. But then again, I'm learning as we grow new things. But I like the idea of not necessarily -- I mean I separate the fact of adding shareholders because that's what I want. We want to be widely held. We want to be liquidity in the stock price.

But I -- separate that from the financial metrics of the business, meaning if I could get the money from cash flow, and I don't need to sell equity and not dilute the earnings per share, I'd rather not sell the stock, but the stock price that is doing that well then it makes sense to sell the stock as long as they can put the money out to use and get a good return and have it be accretive to earnings. The earnings accretion is the hardest thing to do. Everything else is accretive to book but book, nobody cares about. That's not a metric that's used really on when you're determining to buy something. Really when you're determined to buy something is on the forward-looking cash flow. And if the forward-looking cash flow per share gets diluted because they sell more stock, I'm very cognizant of that. And I want to make sure that my shareholders, I'm looking for agilation. I'm soft inside. And I want people to like me and I think I'm doing a good job. So I need to -- and I go out there to ink to bleed. And that's what we're doing every day.

[Barry Oxford, analyst]

Well, when you look at your stock price and you look at your 10% cap rate, I mean, doesn't the math pencil out accretively?

[Moishe Gubin, executive]

Yes, yes, we're selling stock above NAV. But it's not -- I'm talking in terms of EPS accretive to EPS. If I don't get that money out the door in a -- instead of -- I need to put that money out the minute I get it. either by paying down debt or buying another asset with cash for...

[Barry Oxford, analyst]

It's going to be a drag on earnings by definition, right?

[Moishe Gubin, executive]

Yes, exactly, exactly. And I want to make sure that the marketplace understands what I'm doing, and I want to -- and I'm cognizant of it because at the end of the day, it's to attract a new shareholder, when they're going to see what we did, they're not necessarily -- I don't -- everybody looks at stocks differently, but I I'd like to think that we're a lot different because of the risk factors that we have are, I think, are less than -- because we don't really suffer from economy and interest rate risk and really autonomy risk because we're a business that are -- that's not a decision that you make because you want to make. You make a decision because you have to make.

And this is a business, people 2 mother got into a nursing home, you're putting in a nursing home, I mean I am thinking, well, it's expensive. Nobody thinks that way. They think I got to take care of my mother. And so we're in a business that the demand is going to continue to be there. And it's not like people are going to choose we'll keep her at home. It's like it's not -- I mean there may be cases of that, of course. But -- so we have a business that it is always financing for relatively inexpensive costs and there's always a social need for the product. And so we like to think that a shareholder that's going to listen to us is going to understand that this might be more risky from the thought process of you don't understand it, but it's not more risky when it comes to if you're putting your money in a REIT, right, multifamily, something can happen in the rental markets, office, same thing like we've seen.

Nursing homes, you don't see that. The nursing homes continue to chug along and they pay their rent. And we get -- like we said, we're collecting 100% of our rents. And we've done that year in, year out for, I don't know, 20 years. And we get our -- I tell people like if we had an accounts receivable person, it's the easiest job in the book because we get all of our rents wired in on the first of the month, like it's not even -- we're not hounding people down to collect rent. They pay us and that's the end of it. Yes, I think I don't remember any more there was. I think I answered you.

[Operator]

Our next question is coming from Gaurav Mehta with Alliance Global Partners.

[Gaurav Mehta, analyst]

I wanted to ask you on the portfolio that you have under contract, just to clarify, the portfolio the consultant on that portfolio, it's not infinity, but another third party?

[Moishe Gubin, executive]

Correct. To the -- and Gaurav, thank you for your time. Thank you for joining us today. Thank you for following us. We appreciate you. We appreciate your firm. That being said, yes, this is like our philosophy today is every new deal that's in new places are completely nonrelated party. This is no different. This is a season operator that's been running nursing homes for 30 years, lives in -- he lives in Creve Coeur. And yes, completely arm's length third-party good coverage ratios, day 1, strong sponsor support. But yes, it's a good deal and it adds a new operator and a new state completely unrelated to me?

[Gaurav Mehta, analyst]

Okay. I think in your prepared remarks, you mentioned a number, $75 million of AFFO. Is that for next year 2025 that you're expecting?

[Moishe Gubin, executive]

Yes.

[Gaurav Mehta, analyst]

Okay. And that includes the -- all the 4Q acquisitions that you're expecting to close, right?

[Moishe Gubin, executive]

Yes. We have currently -- we didn't announce a bunch of deals, but we have this $87.5 million deal in Missouri. We have about a $24 million deal in Kansas. We got a $5 million deal in Oklahoma. And I'm not sure -- I think we -- I don't know if we have anything else, but we had that stuff up, we should end the year strong. And that's the [ 75 ] is generated off of that for next year. And again, we'll probably exceed that because we'll probably buy I'm sure we'll find something to buy next year as well.

[Gaurav Mehta, analyst]

Okay. Great. And maybe last one. Earlier in your remarks, you touched upon some of the changes you're expecting from the new administration I was hoping if you could maybe talk about your view on any impact you're expecting on Medicare reimbursements or any other reimbursements? Any expected impact on your business?

[Moishe Gubin, executive]

Well, so over the years and as part of doing non-deal roadshows for so long that I've been doing this, I've spent a lot of time trying to educate shareholders, analysts, whoever is -- whoever wants to listen to me on our business. The Title 17 and Title 18 of the Social Security Act basically has the government under Medicaid having to reimburse the cost of running the nursing home. So another thing is, as time goes on, and what happened with COVID is once in a lifetime event, hopefully, it never happens again in our lifetime.

But in that example, the reimbursement for some states are so far behind and you saw in 2024 towards the end of the year, Kentucky finally improved, Ohio finally improved. And I think not Tennessee, but I don't know if there's something in Texas may be improved. But otherwise, the cost base reimbursement has had Indiana, Tennessee and other states. Arkansas increase their rates from a year later after the expenses occur.

So as far as Medicaid goes, really, that program should always be in line to what it's doing. So I don't have a thought on that. The Medicare side of things also has been relatively consistent over the last -- other than a couple of hiccups in the middle when they change reimbursement here and there. We expect that to be relatively status quo, 3%, 4%, 5% annual increases for the nursing homes in Medicare. And that's that. And again, the Medicaid is a little bit more of a story anyone that wants more color and they really want to hear about it. I'm glad to fill people in. I like to go on and on about this. This is really my -- this is what's in my bones. This is what I've done for many years. I'm not an operator for now a bunch of years, but it's still on the study of the business. And so if anyone wants some color afterwards, I'm glad to talk to anybody.

[Operator]

[Operator Instructions] Okay. As we have no further questions in queue at this time. I would like to hand it back to Mr. Gubin for any closing remarks.

[Moishe Gubin, executive]

Yes. I appreciate everyone taking time out of their lives, certainly at the opening of the market to spend with us. In the long run, in the long run, our stock will make you all proud. We're slow and steady, doing stuff consistently and continue to chugging along, making money and growing our net income and growing our FFO per share. And we'll continue to prove that quarter in, quarter out. So thank you for your time, and have a very nice day.

[Operator]

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and have a wonderful day, and we thank you for your participation.