SmartCentres Real Estate Investment Trust

Good afternoon. I am Peter Forde, President and CEO.

Joining me on the call today are Mitch Goldhar, Executive Chairman; Peter Sweeney, Chief Financial Officer; Rudy Gobin, EVP, Portfolio Management and Investments. The call will begin with comments by Mitch, Rudy and myself; followed by Peter Sweeney, who will talk about our results for the quarter and year-end, including IFRS valuations, liquidity, our debenture issuance and accounting provisions.

We will then be pleased to take your questions.

Thank you, Peter. During the course of the last year, we stayed on the offensive, even accelerating the processes of obtaining rezonings and site plan approvals.

It is through these approved land use changes. They were able to drive value into our properties and our NAV.

The lasting relationships we have forged over the last 30 years with many Canadian municipalities, as well as governments, general receptiveness to moving intensification forward, is paying-off. On Page 18 to 20 of our MD&A, there is a growing list of examples of the very act of residential and other development applications and rezonings achieved.

They were submitted by our in-house development teams during the COVID shutdown, or have been well advanced by our team of professionals such that the applications will be submitted in the next few months. When you look at the list closely, you will notice the significant amount of residential along with a variety of other new and exciting initiatives creating significant value not recognized in our IFRS balance sheets values to-date.

The list on these three pages encompasses in excess of 42 million square feet of additional density. Some built on undeveloped land that we own, some on top of existing retail and a limited amount replacing existing weaker retail making for a more dynamic, vibrant and welcoming mixed used center.

And of course, that is not all.

Thank you, Mitch. The pandemic continued to affect the financial results through the fourth quarter, albeit to a far lesser extent than the previous two quarters.

Our priority during this period of uncertainty was and continues to be protecting our employees, the communities we serve, our tenants and our business while doing everything possible to mitigate the financial implications to ensure liquidity and to continue strengthening our balance sheet. Our operating shopping center portfolio is 97.3% leased at December 31, and remains focused on essential services and value oriented retailer not fashion, recreational or entertainment retailer.

It is well suited for these turbulent conditions, as evidenced by the following. One, based on revenue 60% of the REIT tenant base is comprised of the central services, which continue to operate throughout the crisis, supporting local communities, meeting the everyday needs of residents for groceries, pharmaceuticals, banking, household maintenance, general merchandise and other essentials.

And this 60% of our tenant base being essential services increases to 70% for the markets outside the Greater-VECTOM area where our occupancy rates are even higher. In these smaller markets, our shopping centers are often the essential service hub of the area and in all cases anchored by a Wal-Mart store.

With the pandemic and the lockdowns, early indicators are that the demand for housing and therefore shopping in these less urban markets is increasing as people consider leaving the urban areas for the suburbs. This is good for our shopping centers, and further enhances the opportunities to intensify on our existing lands in those markets.

Two, Wal-Mart which anchors 75% of our properties and represents over 25% of our rental income, along with our family of value oriented focused tenants are well suited to serving its community during this period of pandemic induced weaker economic conditions. As we highlighted previously, Wal-Mart plans to spend $3.5 billion over the next five years to make the online and in-store shopping experience simpler, faster and more convenient.

This continued commitment to its retail operations in Canada speaks to the ongoing strength of Wal-Mart and its growing ability to drive traffic to our centers.

Thank you, Rudy, and good afternoon, everyone. As we know, these challenging times will test the balance sheets of many real estate companies.

However, for many years now, we have encouraged the capital markets to focus on our commitment to the smart centers balance sheet. Our unyielding focus on conservative capital management, our discipline in the deployment of capital on acquisitions and developments and our continued desire to match gearing and similar debt levels to the long-term nature of our assets.

The strategic focus on long-term viability and growth have allowed us to manage through this period of uncertainty. In this regard, we note the following highlights for the year ended 2020 as compared to the prior year.

Number 1, in keeping with our strategy to repay maturing mortgages and to grow our unencumbered pool of assets, unsecured debt in relation to total debt increased to 68% from 63%. And our unencumbered pool of assets continued to grow, increasing by approximately $150 million $5.8 billion as compared to the prior year.

And we expect these metrics to continue to improve in the future. Number 2, our BBB high credit rating from DBRS continues to attract debt capital, at historically low interest rates for longer terms and in keeping with our strategy to take advantage of lower interest rate environments pursuant to our refinancing activity during 2020.

Our weighted average interest rate for all debts continued to decrease, and at year end was 3.28% as compared to 3.55%, for the prior year. And our weighted average term of debt was maintained at five years.

And then lastly, number 3, our interest coverage ratio net of capitalized interest was maintained at a very strong 3.7 times level. This in spite of the COVID-19 related provisions that were necessary, and our adjusted debt to adjusted EBITDA multiple ended the year at 8.5 times both metrics reflecting the business's strong and stable ability to fund its obligations, even during these uncertain times.

From a liquidity perspective, as we look to the immediate future and continue to manage through the current uncertain capital markets environment, in addition to the conservative debt metrics noted above, please also consider that at the end of the year, our liquidity position exceeded $1.5 billion, which is represented by over $794 million in cash on hand, our undrawn line of credit, which stands at $490 million, and our $250 million available accordion feature. A portion of these funds are earmarked to fund the following, number 1, January of 2021, we used $300 million of this cash, early redeemed both Series M and Series Q debentures.

Number 2, we intend to use $323 million to repay our series T debentures that mature in June of 2021. And then lastly, number 3, we expect to repay approximately $50 million in maturing mortgages over the next six months.

Note also that we continue to deploy a strategy that permits construction of any large development projects to begin when it has appropriate project financing in place to ensure project completion of our various development initiatives. And we are presently speaking with lenders concerning construction financing alternatives for several of our proposed developments that are expected to begin construction this year, including a large retirement home project in Ottawa, several apartment building projects in both Ontario and Quebec and also a large Townhouse project in Vaughan.

In 2020, our liquidity position was further strengthened with proceeds received from the closing of over 1,100 units in the first two phases of our Transit City projects. In aggregate over the last two consecutive quarters, we have received over $53 million in proceeds from the closing of these first two phases.

Similarly, in 2021, we expect to recognize approximately $25 million in FFO from the closings of Transit City 3. And we expect this recurrence of FFO and cash flow from the closing of condominium and townhome developments to continue for many years to come.

The cash flow generated from these closings further fortifies our liquidity position and also supports our distribution strategy. As Rudy has mentioned, we continue to experience substantive improvements in our collection levels in the fourth quarter, and our provisions for bad debts were significantly reduced from our experience in both the second and third quarters.

In this regard, in addition to the $25.2 million in provisions that were taken in aggregate for the second and third quarters, we provided for an additional $5.4 million in COVID-19 related provisions in the fourth quarter of 2020. These fourth quarter provisions represent approximately 35% and 55% of those taken in Q2, and Q3 respectively, and reflect the continued improvement in collection activity over the last nine months.

From a valuation perspective, the stability that we experienced in the third quarter continued into the fourth quarter with cap rate, discount rates, and other modeling variables remaining status quo and resulting values remaining stable for a portfolio of income producing property. Our development property portfolio experienced an $18 million IFRS loss in value during the fourth quarter that was principally driven by more conservative leasing assumptions being included in the valuation models for our retail development.

Asset evaluation erosion experienced during the first two quarters of 2020, which was primarily reflective of additional vacant space and the additional time now expected to backfill such space in our portfolio, much of which resulted from the COVID-19 experience. The second half experience is directionally important, because it suggests that the market has now stabilized.

And based on the discussions that we have had with the appraisal community, we are not expecting any substantive further declines in property values for the first quarter of 2021. As we have said many times in the past, it is important to recognize that we have not factored into our IFRS values, any value that accrues from future development of mixed use space.

And these future value increments that are derived from our proposed mixed use initiatives are substantial. And with that, I'll turn the call back to Peter Forde.

Thanks, Peter. So to sum it up, a very interesting quarter and year, over $45 million of profit in the last two quarters from condo closings at Transit City 1 and 2 in Vaughan.

A rapidly improving rent collection picture. And accelerated mixed use intensification and development program with 57 projects underway and a solid occupancy level of 97.3%.

Prudent and strategic acquisitions adjacent to existing properties and or with established our new partners and a strong focus on our balance sheet. And with that, we'll turn it back to the operator to coordinate us in addressing your question.

Thank you. Good afternoon, everyone.

Thank you.

Good afternoon Sam.

I know if you could just explain the total return swap that was announced in the press release?

Yes, well as we have a lot of liquidity and cash. So we made an arrangement to deal with a major institutional bank.

Whereby we would be achieving a better return, better yield on our cash. It's for a period of time.

So yes, the arrangement is, it's a deal, whereby the result will be that we will achieve something, potential achieve something closer to the yield of our units. And instead of what we're getting, as a cash deposit into the bank, so it's just been, we just made pay the deal recently.

So it's just early stages. But that's the reason for it.

And that's ultimately, effectively what will be expected to happen.

Okay, that's helpful. Thank you.

And does the REIT have the sort of unilateral right to sort of unwind it or how does it work? How does it sort of come to its conclusion?

Yes, I mean, we'll give more detail on some of the mechanics of the deal. But suffice to say that, we're satisfied with the deal.

I mean, we satisfied with the risk reward, and all the various scenarios. And so, we're going to -- there's lots of details, we'll go into those, share them with you as in the next quarter.

Okay. All right, that's helpful.

And just switching on to the development pipeline, which was expanded, including obviously, the REITs portion as well. So there was a lot on the books to do over the next few years is even more now.

Is capital recycling becoming more of a factor in your mind in terms of funding this activity over the next few years or how should we think about how that $3 billion is going to be funded?

Yes, I mean, firstly, you should keep in mind that, we don't have to do any of it. So, we didn't buy this market.

And, there's not a loud clock ticking, but we want to do it. And we fully intend on doing it.

But we don't have to do it. And so, yes, in terms of the hierarchy of guiding principles of whether we proceed or not, will be our availability of whatever it could require capital requirements and availability of financing.

And, of course, our debt levels, we're going to be very protective off. But we do believe that through various programs, which may include bringing in a partner here and there at market, which will be a source of equity.

Obviously, deposits on condo sales. You may even include sale of a few properties.

There'll be various and of course, proceeds from closings of condos from previous years. So, these will be among others, sources of capital, equity, and there's the financing availability as well.

So each and every as we get closer and closer to being able to commence at any one of these places, and the markets there and we're happy with returns, these are sort of levers that we can pull in -- if we need to, to protect those higher Tier priorities.

Thank you. And my last question is just on occupancy, maybe Rudy, how do you see the fourth quarter that meet or exceed your expectations?

Down just very slightly. And what are you thinking about for the next Q1 and Q2, generally high level terms of where occupancy could end up?

Yes, I think given what was going on in the world and our markets, we were pleased with the outcome. We did have a reduced amount with the CCAA bankruptcy tenants that filed and Q2 affected Q3 and Q4, obviously, not a lot of tenants, were ready to jump back in and start leasing space in Q3.

But by Q4, there was an uptick, there was an uptick of a number of tenants, I think we did almost 200,000 square feet of leasing in Q4 alone to the tenants who wanted to expand their footprint, which is very good. People weren't looking at a re-lockdown.

Now that the re-lockdown is, as lockdown and now is reopened or will reopen shortly. That did bode well for us.

So you saw that the returns in rents. So we had a high recovery rate in our rental structures that was good to.

So I think, the recovery is happening slowly, and we're looking at this market, and we're looking at the shutdowns and hopefully everything will continue to slowly improve. And we don't go into any more of these.

So that we will see a little bit of an improvement into ‘21. I think the first quarter, Sam, as is always a quarter where people, smaller struggling tenants, at the beginning of the year, they make it through the Christmas holiday shopping season.

And then there's always a little bit of fallout that in this case, there wasn't a big shopping season over the holiday. So I expect a smaller fallout, but nevertheless, a little bit of a fallout in Q1 and then an improvement over the balance of the year.

So that's how I would think it would play out. Again, everything subject to the pandemic reflecting the recovery that is currently reflecting over the last week or two, which has been great.

Is that okay Sam?

Might have lost him.

Hi, good afternoon, everyone. And there might be some issues with the operator and trying to get into line.

So just to be aware of that. Maybe just on the distribution, some of your peers have revised that in the last few months, and just given kind of the current environment and significant capital commitments required for the development pipeline going forward, have there been any discussions on the distributions and to what extent would things really have to change here to make an adjustment there?

Maybe un-mute. We might have lost Mitch here.

I don't see him in the conference anymore. Yes, he's not here to say.

Peter, do you want to take that one?

Sure. So I think it's fair to say and just to remind everyone, decisions on distributions ultimately are board level decisions.

Clearly management has recommendations, but ultimately our board will be responsible for making this decision. I think it's fair to say that several years ago smart centers embarked upon a strategy to rollout a robust mixed use development platform.

That's not news to anybody on this call. And I think it's fair to say also that at that time, what we announced was that we thought that this new mixed use initiative program would supplement growth from the existing core portfolio shopping centers.

And little did we know that there might come a time where we would go through a pandemic year where this mixed use development platform would actually assist in allowing our distributions to be maintained. But that's effectively what has taken place in 2020, where this pipeline of new development initiatives actually got its start.

And I think, as Mitch mentioned, we had two consecutive quarters in Q3 and Q4 of distributions coming from Transit City. And clearly those distributions have helped supplement the challenges that were experienced in the other part of our business.

Having said that, it's also and this should also come as no surprise that we expect this condo and townhouse profits to be forthcoming now for many, many years to come. And so, it's fair to say when our board thinks about distribution levels, ultimately, they think about our payout ratio in relation to those attributions.

And clearly, an 87% payout ratio, Brendon, our board has determined for now that it wasn't prudent for them to think about a distribution cut. Mitch, I'm just answering Brendon’s question on distributions while you're offline.

Yes, I mean, as you may have already covered it, but we can sustain our level of distributions, as we see it. Based on, I'm sure Peter covered off there.

And we're satisfied that the payout ratio is with our various programs is -- it was this solid and conservative enough. So now, of course, we are not happy with the unit price and the yield.

And we'll obviously layer in the consideration of what is the best use of our capital because it's just not -- we don't think that it's I mean, anyway, everybody thinks their stock is -- the usual -- but it is a bit extreme to actually have closings and cash coming in, and visibility on the program, and still be operating at a yield that we're operating at a unit price we're at as well as zero, basically value put on lands that are extremely valuable, I mean, could be sold. I mean, we just got an approval of 12 million square feet on a 700,000 square foot shopping center, in an additional basically 11.3 million square feet on top of what we are, value that in Cambridge, which is actually unbelievable master-plan for, it's a company in and of itself, that property is currently now zoned.

And of course, it's valued based some multiple of our income on Cambridge. And that's true with VMC, which is owned for millions of square feet.

And by the way, I don't know whether everybody has figured out I was meaning to emphasize that the condo profits from TC 1, 2, 3, 4 and 5 are substantial, but they are the result of sales per square foot less than what was being sold across the street at festival. So the latest condo sales are somewhere between $50 and $100 per square foot higher than our TC 5 sales we are at and going forward it is our intention to do it in-house and REITs share will be 50% now 25% and that's just VMC.

And so to factor the value if we were to take all of what I just said on just a Transit City into the valuation, see the NAV alone I would be adding zero to our NAV, because that's what's being allocated to that property. So we have so many of those properties that are currently zoned and imminent from generating cash flow and generating cash flow, we can't ignore the fact that the market has had time to digest all this and are looking at slowly looking at payout ratios of leased space, even though we are well into a significant transformation, very profitable one.

So, that does not go ignored. But if it was just strictly on the basis of our ability to sustain those payout ratios and not an examination of the best use of our capital, then we would stick by our statement that we intend on maintaining distributions.

Okay, that's helpful. And maybe just before I turn it over, just on that last point about the disconnect between the unit price and the value that the board and management sees in the REIT.

I know insiders have acquired the stock quite significantly over the last year with the REIT reconsider using the NCID to purchase units. I know, there's a lot of capital allocation opportunities and decisions, but would that be something to be considered for 2021?

We passed the NCID a year ago, I think, so obviously, keep our options open. Just make a deal with the institution on potential strategy to use all our cash and they we're fresh, it's new, but moment we're satisfied with so.

We're looking, at all these things for sure.

Okay, that's great. I'll turn it over.

Thank you.

Thank you.

Operator, you can just give it a minute.

What operator, would you remind everyone on the call what their routing instructions are to place a call? There seems to be maybe some confusion.

Maybe you just remind them as to what they have to press to get a question, please.

Hey, guys, I made it. I'm excited.

Skill testing thing we do.

Okay, where to start? Just I know, you'll sort of unveil a little bit more but the total turn flop choice.

I have a couple of quick questions. Peter, we're thinking about this.

This just means like we should be thinking about picking up probably our interest income forecast a little bit going forward as long as this is on the book?

I don't think its interest income, per se. We're still working Tal on the accounting elements of this arrangement because obviously it's new and it's sort of pioneering in some respects from an accounting point of view.

So as Mitch mentioned, that we'll be able to provide a little more clarity in our Q1 disclosure on what to expect for this going forward Tal. So it's really, I think too early to say.

Okay TDA, perfect. Self-storage of the site that you have sort of being under approval right now, how many of the proposed sites are on existing SmartCentres, retail land or are they all on sort of like adjacent or new lands?

Yes, they're all on lands that were adjacent or part of our shopping center, that at one time, would have intended to be retail, but we are now doing the self-storage instead of retail. But there, I'm not thinking of one other than the one we bought was strategically with our partner on Dupont Street downtown, all the other ones are on existing shopping center lands that we already owned or in one case, we bought some land across the street from a shopping center.

I guess that get in . But other than that, they're all part of our shopping centers.

Yes, that's correct. Yes.

Okay. And then I just wanted to ask a question to about sort of the type of tenants that like, my sort of recollection of how some of your smaller tenants or non anchor tenants got into SmartCentres properties is that you had like a lot of mid market apparel retailers like the Reitmans or Comark or Aldo you mentioned earlier, who in the late 90s and early odds, saw the rents at SmartCentres as being far more affordable, and that Wal-Mart was driving a ton of traffic, right versus some of the more traditional depart departments are anchors?

And at Wal-Mart, clearly going to continue into the future. But with some of these guys, retrenching like who is the right tenant for the future for those 4,000 and 5,000 square foot boxes that were sort of formerly occupied by the apparel guys because you've got you guys have gone a tremendously long way with other value tenants like -- I'm just wondering, who think you see as like, the right replacements for those apparel for those apparel tenant?

Well, you named a couple right there, I mean, there's still lots more we do a lot of -- not in the 5,000 foot range where we do a lot, in negotiation with a lot of potentially new TGS concepts for example. So, there's been some kind of interesting emergence of new restaurant concepts that build kitchens that supply multiple actual multiple restaurant chain, different banners, we've been leasing to quite a bit action clearly.

So, there's other discount concepts that are replacing, as an example, they're never really a discounter. They just found a way to improve their margins by getting into the malls.

But they're currently also being replaced by some new discount concepts that are very suitable compatible with our with our formats. Rudy, I'm sure you also have some color.

Yes.

Specific examples because I know we're doing quite a bit of leasing in that space.

Yes, like cannabis.

By the way cannabis is another area when something is busting, something else is booming in. Cannabis is booming quite a bit actually right now.

Go ahead Rudy.

Yes, no, no, we looked at in the last half of the fourth quarter, a big uptick in calls from tenants wanting to take advantage of the space. So we're trying to put in something let's say that that would fit very well with each those communities not just fill a space because somebody called to fill the space.

So we have everything from daycare, wanting to come back into our centers. Because the daycare business is required, people want it.

They want it near retail, medical, not just medical, dental, not just medical doctors, but labs are asking for a lot of our locations they want to put in labs small, what I'm going to call small fitness. The theory F45, they don't think that's going away.

They may think the bigger fitness may be slowing down but the small face-to-face dedicated fitness thinks that they will be fine, smaller pharmacy are calling us up saying they want to open up a small pharmacy. Obviously, Mitch mentioned fast food, the fast food business some of them were doing quite well for takeout.

So they are interested not to sit down restaurant types, obviously liquor or beer, we're all still doing new deals with us. We had a number of, I'm going to call it small financial firms, not the Schedule A banks with small other financial firms.

And then you had a bunch of office, I'm going to call it the retail, the retail office type offices like brokerages, they want to be in a shopping center, they don't want to be in an office building, if you're a brokerage. So we had a lot of different uses that were typically not, wouldn't want a big part of a shopping center and something.

And we're also now attracting the stronger tenants who might have been in light industrial, who want to move into the mainstream retail. So that's coming in as well.

So we're looking at all the different kinds of uses. Keep in mind we will have big on what you call fashion retail and our fashion retail like mentioned, were only in some of our bigger, bigger centers.

And some of them had had the dream of well, I'm just going to be where Wal-Mart is. And that has worked out very well for them by the way.

In our readmissions, 60 of those locations remained open. And because they're in a Wal-Mart anchored site and they are carrying on.

So not a large number of the tenants that filed actually close stores in our locations. , if you think of for example, Moores, Moores have 23 locations in our portfolio, there are literally only close four every other one is operating, and in a Wal-Mart anchored site.

So, we have a lot of uses coming in. And we like to see that we like the traffic we're seeing.

So we're very pleased by what's transpiring right now.

And I guess my last question would be, you guys have some malls yourself. But, there's obviously been a lot of discussion, concern around being closed malls, we're seeing some, transactions being done, even on regional malls now.

And do you feel like that there's, like, that that asset class is going to bounce, bounce back or do you potentially have a concern with like malls being a bit of a weight on the overall market going forward, like now that we're sort of maybe getting closer to the end of the pandemic? Is that going to be a more competitive, option or that still going to be sort of like the premium rent to what you would be offering in the open air centers?

Mitch you want to that.

Yes, I'm sorry. What was I -- just kind of fitting in.

I heard, I cut last part of that question what was --

Yes, I just trying to get a sense of how do you feel about malls right now, like now that we're getting through the end of the pandemic, because I'm just wondering like we've all obviously had concerns about, how malls will fare pre and post pandemic, and whether it could, do these properties need to restructure and today become a little bit more competitive in terms of rent with open air centers?

Well…

Did we lose him?

Who are waiting for?

Mitch?

Did we lose him again?

Probably.

At some point we had met on two lines and Yes, now he is for sure gone. And he is -- I think he is trying to call back.

It won't be long here.

Okay. It’s okay, guys.

We can follow up later, probably due to technical…

Operator, but I mean, I'll just say, first of all, we do not have many malls as , Tal.

Yes.

But I think and I think, obviously, the top regional malls are going to will likely be doing very well once we get out of the pandemic. But I think this medium to smaller malls in smaller communities are likely going to continue to struggle as they were before the pandemic.

So I mean, I have no idea if that's what Mitch was going to say but that would be my view.

Okay. Thanks very much, guys.

Appreciate it.

Okay, all right.

One sec. Before we do this question, can you just remind, maybe some of the other analysts on the call again, just give them instructions on how to ask the question please.

I got disconnected.

Mitch is back here.

You guys, I'm sure you got the answer, but you guys -- Technology is trading at 50 times and it doesn’t work andnever mind it. Okay.

I'm sure we got to just to the answer. Don't think that our competitors are suddenly going to become in closed malls.

But I mean, I think, a lot of changes within closed malls, for sure. But I don't think that could be a direct, you've suddenly become a new type of competitor, I don't see them.

Hi, am I on?

You are on Michael? Yes.

Hi. So, hello from Greece.

And thanks for taking my question. And congratulations on the progress on your redevelopment pipeline in the past year.

My question is, in the past year, there was an increase of $8.2 million in the general and administrative expenses. I would like a bit of, I would like you to elaborate on, was that in building and whether it is here to stay and these expenses or whether if they are expected to go down and CDRM in the future?

Thank you.

I guess Peter, Peter, maybe…

I can, this is Peter Forde start and Peter Sweeney will jump and add if I miss something, but basically that some of it is salaries and benefits, which is partly, obviously in normal annual increases. But more importantly, we did add some staff during the year I think probably about 15 net on average addition during the year compared to the previous year.

A lot of that would have been, I guess development related activities or people. We did have a lot of legal fees that we incurred during 2020 as compared to 2019.

And then, we did incur some additional other expenses, IT and so on. So to answer your question about how do I see it in terms of going forward?

I would say about half of that is probably something that would continue and half would not be meaning especially the legal fees would not be something it was some special things that were going on in 2020. That were, I would not and which some related to COVID, some related to this special transactions that we completed in 2020.

And I would not expect to and we'd be incurring again.

I think Peter The only other thing that we might want to add is that in that G&A number that $8 million year-over-year increase that does include $1.8 million of costs, G&A costs attributable to Transit City. And so from an accounting point of view, those costs would have been capitalized until the project's completion which took places as everyone knows now in Q3 and Q4.

And so we would have had to take those $1.8 million G&A costs into account in 2020. So that amplified that year-over-year increase as well.

So at least $1.8 million of $8 million is attributable to, the closings of Transit City wanted to.

Got it. Okay, thank you.

And better year.

Yes.

Thank you.

Thank you.

Thank you. I guess given there are no further questions.

I just want to thank everybody for taking the time to participate in our fourth quarter 2020 call. And everyone please continue to stay safe.

Thank you.