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Healthcare Realty Trust (NYSE:HR)
Q1 2021 Earnings Call
May 7, 2021, 8:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Healthcare Realty Trust First Quarter Financial Results Conference Call. All participants will be in listen only mode. [Operator Instructions].

I would now like to turn the conference over to Carlos Baca, Associate Vice President Investor Relations and Corporate Responsibility. Please go ahead.

Carla Baca -- Associate Vice President Investor Relations and Corporate Responsibility

Thank you for joining us today for healthcare royalties, first quarter 2021 earnings conference call. Joining me on the call today are; Todd Meredith, Bethany Mancini, Rob Hull and Kris Douglas. Reminder that except for the historical information contained within the matters discussed in this call may contain forward looking statements that involve estimates assumptions, risk and uncertainty. These risks are more specifically discussed in the form 10k filed with the SEC for the year ended December 31 2020. These forward looking statements represent the company's judgment as of the date of this call. The company disclaims any obligation to update this forward looking material. The matters discussed in this call they also contain certain non gap financial measures such as fun from operations episode, normalized FF o FF o per share, normalized episode per share funds available for distribution that net operating income NOI EBITDA and adjusted EBITDA a reconciliation of these measures to the most comparable GAAP financial measures may be found in the company's earnings press release for the quarter ended March 31 2021. The company's earnings press release supplemental information and form 10 Q and 10k are available on the company's website.

I'll now turn the call over to our, Chief Executive Officer, Todd Meredith. Todd.

Todd Meredith -- President and Chief Executive Officer

Thank you, Carla. Thank you everyone for joining us today. We are very encouraged to see outpatient volumes getting back to pre pandemic levels. This will drive our internal growth toward our long term growth profile. When we add our accelerated pace of external growth, we are building positive momentum NFFO and fat per share. Foot traffic and patient flow and healthcare realties facilities are fast approaching normal patterns. Now at about 95% of pre pandemic levels. Some disparity still exists between markets. For example, the Bay Area is several months behind Nashville where providers have been back to normal for a while. We seem to notice a noticeable uptick in traffic in just the last two months, which is correlating with vaccination levels. The most vulnerable group the 65 plus cohort is well vaccinated and consumes the most healthcare per capita. 83% of these folks have received at least one dose and will be fully vaccinated in a matter of weeks. These folks are increasingly comfortable going to the doctor's office. At vaccination levels steadily rise and patient volumes normalize. optimistic providers are re engaging in plans for growth. We expect this to translate to more leasing momentum in the coming quarters. We see several positive indicators that will improve same storyline from 2%. Today toward our long term growth rate of 3%. We are raising rents steadily and retaining our tenants at very high levels. And we are seeing strong underlying demand for space and our property.

All MOB's are poised to do well in the short term as patient volumes returned to normal. Longer term the common denominator for success is aging demographics. Three keys to our ability to outperform for choosing the best markets, leveraging our local relationships, and aligning with the best providers. Our core business is on and around hospital campuses where performance is consistently strong. What's new is that we're also finding some attractive offers off campus opportunities. Typically, these buildings are in close proximity to our hospital clusters. Our teams are plugged into local relationships that help us identify the off campus buildings in high demand from providers. You will be sector is highly competitive with plenty of capital chasing limited supply. Highly desirable properties around hospital campuses are difficult to source, especially at scale and thus have a long history of steady rich pricing. For these properties, we have an edge over the competition due to our long standing credibility and networks are relationships. This helps us invest in more than our share of hospital centric properties. Looking ahead, we see the bulk of our investment allocations going to these properties around the hospital campus. We will also invest selectively in higher yielding off campus properties with a higher allocation going to our joint venture in order to balance our risk and return on capital. Okay, realty is off to a robust acquisition pace in 2021. With providers actively re engaged in growth plans we expect to initiate multiple development starts this year. This strong external growth together with accelerating internal performance is translating to attractive FSO and fat per share among them.

Now turn it over to Bethany.

Bethany Mancini -- Associate Vice President

Thanks Todd and like to provide an overview of the current state of healthcare and government health policy. We've been encouraged by recent for profit hospital company financial results, volume is down but heading in the right direction. And even though margins are up based on solid revenue growth COVID cases are decreasing as a percentage of inpatient volume and growth in outpatient surgeries is positive. Hospitals can continue to be impacted by fewer low acuity ER visits. Still year over year, same store revenue has remained strong, an average of 10% from higher acuity services and insured patient mix. These results have been similar for not for profit hospitals, which make up the majority of our health system relationship. Health Systems continue to focus on strategies to lower costs, preserve and even expand inpatient capacity and increase services in outpatient settings. On the physician's office side, other than a select few markets slower to reopen, our tenants are seeing positive patient flow and strong demand for services. With an increasing number of vaccinations, particularly among those 65 or older, most division practices are looking past COVID recovery toward growth on average to 65 plus population visit a division office two and a half times more each year than those under 45 years old. As a percentage of the total population. This cohort is expected to increase from nearly 16% today to over 19% by 2028. Underlying demographic growth is clearly in place to support the long term value of m ob. The regulatory and legislative landscape remains relatively benign for healthcare providers.

The Biden administration's agenda is focused on expanding health insurance coverage through adjustments to the ACA, while also supporting healthcare providers through ongoing COVID relief. The most recent $1.9 trillion COVID relief bill increased ACA subsidies and lowered premiums for at least the next two years. Incentives to close the low income insurance coverage gap are expected to increase the number of people eligible under the ACA by 3.6 million and signal a positive direction for providers compensated care. There is strong political support to make these benefits permanent, and to offset healthcare funding that expires down the road. Conventional wisdom still holds that it is very difficult to take away a benefit once provided through or now as Congress continues to shore up healthcare providers in the wake of COVID-19. Other items potentially on the legislative agenda to a President Biden's campaign hallmarks were a public insurance option that would allow people to buy into Medicare and the reduction in the age of Medicare eligibility to age 60.

The political balance in Congress will keep large scale policy proposals more limited in scope for possible legislation in the near term. Expansion of government funded health insurance to be measured an incremental a positive for healthcare providers, as hospitals and physicians look to move beyond COVID. They will benefit from steady commercial payer mix for rise in the total insured population and support for positive Medicare rate increases in 2022. Insurance payers, both private and public continue to promote healthcare delivery in outpatient settings. We view any legislative or regulatory efforts to lower healthcare costs as an advantage to outpatient care and the development of more outpatient facility. The value of physician offices and hospitals has been underscored in the last 12 months. with aging demographics, their services will be more critical as they meet rising demand in the years ahead. Healthcare royalties long standing relationships with many of the nation's leading providers will bolster opportunities for growth.

Now, I will turn the call over to Rob.

Rob Hull -- Executive Vice President, Investments

Thank you, Bethany. And good morning everyone. I will summarize healthcare royalties first quarter investment activity and our outlook for the remainder of the year. We are off to a solid start investing this year. Our relationships with health systems, property owners and brokers often give us access to deals before they become widely marketed. And as we deliberately build scale and target markets, we are often viewed as the preferred buyer for buildings. These advantages have enabled us to maintain a robust acquisition pace, and attractive cap rate levels. This is especially noteworthy as more buyers have moved back into the market, and pricing remains competitive. So far this year, we have purchased 10 buildings for $129 million, including for purchase through our joint venture with teachers for $67 million. All 10 buildings are located in our core markets, including San Diego, Dallas, Atlanta, DC and Denver. What I really like is that the majority of these add to our existing clusters. As an example, in Orange County, we acquired our fourth property around the campus of Saddleback hospital, which is part of Memorial care. We now have a sizable portfolio around this hospital of on adjacent and off campus properties, which places us at the center of Dealflow. Recently, a practice from another sub market had a need to expand into this area. We were able to show them a range of locations, price points, and interior finish levels. Having multiple product types was instrumental in keeping them exclusively engaged with us throughout their decision making process. Another example is in Atlanta.

We acquired two properties around well stars Hospital in Douglasville, where we already own two buildings. Our expanding relationship with the hospital gives us insight into its future plans and potential demand for these four buildings. Average for these 10 acquisitions average five and a half percent, with the lower four and a half percent and a high just over 7%. Below is a value add opportunity within an existing cluster and the highs and off campus property. Both of these buildings were purchased through our joint venture with teachers. For some additional color around cap rates, we included a page in our investor presentation that lays out cap rate ranges by region. For the $1 billion of acquisitions we've completed over the last couple of years. What you will see is that we have been able to expand our footprint beyond the campus and generate incrementally higher returns. Our off campus acquisitions have been spreads of 40 and 90 basis points above on campus properties depending on geographic location. Our acquisition pace shows no sign of slowing as we continue to grow our pipeline. Currently we have properties under contract for LSI totaling over $150 million and we expect to close near the end of the second quarter. But the strength of our year today at acquisitions, we are raising our guidance range by 50 million at the midpoint with an upper end of 550 million. We also took advantage of a strong pricing environment to sell three properties for $34 million dollars at a combined cap rate of 4.8%. These buildings were not in line with our strategy to build out clusters of properties around leading hospitals.

We reinvested the proceeds creatively into mo B's with superior long term growth prospects. Looking at redevelopment. In March, our first new tenant took occupancy and our project in Memphis. This 29,000 square foot orthopedic group will drive volume to the surgery center in the building. The surgery center is currently being renovated and expanded to accommodate more volume. This property is well on its way to stabilization early next year, at a projected yield over seven and a half percent. In April we started a redevelopment in Seattle that includes expanding one of our existing buildings by 23,000 square feet. This 100% lease project has a budget of 12 million and an estimated stabilized yield 6%. We expect And it's to move in and start paying rent by the middle of next year. Looking ahead, we have a couple of more developments expected to start this year. Our developments create financial value with targeted yields 100 to 200 basis points above comparable stabilized assets. Additionally, they foster deeper relationships with hospitals and providers as we work closely with them to plan for their outpatient growth. In summary, our acquisition and development strategies are paying off. I look forward to carrying this momentum into the quarters ahead.

Now we'll turn it over to Kris.

Kris Douglas -- Executive Vice President and Chief Financial Officer

Thank you, Rob. The positive momentum we saw late last year continued into 21. First Quarter year over year, EPO per share grew 2.6%. What's noteworthy is that is that in each of the pandemic impacted quarters of the last year, we had positive EPO per share growth. This was possible due to the underlying revenue growth drivers of our portfolio, as well as accelerating external investments. In the first quarter sequential FSO increased $1.7 million. This was driven by $3.1 million increase from the full quarter contribution of the $337 million of fourth quarter acquisitions. This contribution was offset by a $1.3 million increase in GMA $900,000 of which is related to first quarter only items. We see current same store NOI of 2%.Turning back to or even above our long term average of approximately 3% as the impact from the pandemic dissipates, where we really saw COVID effects in the last year was the loss of parking income and occupancy occupancy during the second and third quarters. This was partially offset by lower operating expenses. The timing of the rebound to pre pandemic levels for these items will fluctuate and vary by market. However, with vaccinations becoming more widespread, and the number of leasing tours increasing, we say path to accelerated growth and the quarters ahead. The growth potential embedded in our existing leases remain solid. The average implied contractual increase for our portfolio is 2.86%. For leases renewed in the first quarter, the average cash leasing spread was 4.4%. And the average future contractual increase will be 2.98%. Our ability to achieve this level of performance is tied to targeting markets were population growth runs well above national averages, and drives our expectation for future internal growth.

Solid operating fundamentals and a strong pipeline of creative investments will ensure the ongoing strength of our fad power issue, which was at a point 7% over the last 12 months. It is worth noting FFL per share and grew 8% over the prior 12 months. This drove the improvement in our payout ratio even as we increase the dividend in March. In the first quarter maintenance CapEx decreased to $8.4 million down from a seasonal high of $21.1 million in the fourth quarter of 2020. Maintenance CapEx spending will fluctuate quarter to quarter. However, we expect to maintain a trailing 12 month bad payout ratio below 90%. Net debt to EBITDA was 5.3 times at the end of the first quarter. This is right in the middle of our target range of five to five times that acquisitions of $69 million in the first quarter. We're primarily funded through $63 million of net proceeds from the settlement forward equity. Looking ahead, we have multiple sources of capital to fund a for $150 million in our near term acquisition pipeline. Our funding options include up to $127 million of proceeds from yet to be settled for equity, more planned dispositions and joint venture capital, along with nearly full capacity under our revolver. As we reflect on the pandemic hurdles of the last year, we're pleased with the stable performance of our portfolio and encouraged for the future. We see the most significant impacts of COVID-19 are on our portfolio fading, with widespread vaccinations and foot traffic at our properties increasing underlying solid growth of our revenue drivers, including healthy escalators and cash lessen spreads are poised to drive same store growth to 3% or more improving internal growth and a robust pipeline of creative investments. will accelerate per share earnings growth in the quarters ahead.

Sarah, we're now ready to open the line for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions]. My first question comes from Juan Sanabria with BMO Capital Markets. Please go ahead.

Juan Sanabria -- BMO Capital Markets -- Analyst

Good morning. I was just hoping you could give a little bit more context with regards to the benefit from parking to Sam's store. Is there a way to quantify kind of how much you're generating today versus what the normalized pre corporate levels were?

Kris Douglas -- Executive Vice President and Chief Financial Officer

Yeah, right now we are running about 80% of what first quarter 2020 parking income was. So we do see that is, you know, a benefit to us in the coming periods is we start to see that rebound, back to back to more normal levels. And that ended up being that was impacted. Same store results by caught about 5060 basis points.

Juan Sanabria -- BMO Capital Markets -- Analyst

Right. And then I was hoping maybe more of a conceptual question. But the local cluster you guys are been able to generate, what impact does that have to margins as you as you benefit from local know how and maybe having lower personnel by asset? Or is that not really a driver to margins, and it's more of just local know how just curious on what you're seeing. And what that means for from ours is the same store NOI growth?

Kris Douglas -- Executive Vice President and Chief Financial Officer

Yes, I would agree with sort of where you were headed there, which is that we really see it as more of a revenue driver benefit, a leasing benefit and a momentum benefit. Rather than just an expense savings benefit. Clearly there, there can be some of that expense savings as you scale up. But what we also find if you look at probably our premier example, and we show this in our investor presentation in Seattle, we're very spread out there across a lot of different clusters across a pretty big region in the Puget Sound. And so you don't just centralize with one office and send everybody out, it's a high level of service, a lot of folks in the buildings that we own, so we don't want to cut customer service, due to the, you know, the high traffic in our buildings and so forth. So really, to the benefit of being in the flow of the leasing discussions that are going on, whether it's with brokers or directly with hospitals or physician tenants, so it's much more of a revenue piece and driver and accelerating revenue and then expenses.

Juan Sanabria -- BMO Capital Markets -- Analyst

Thank you. And maybe just one last quick, what do you expect the development deliveries to kind of averages that ramps up going forward? When you say development delivery, the volume, the volume?

Kris Douglas -- Executive Vice President and Chief Financial Officer

Yeah, I think as we move forward, you know, we're looking at starting, you know, anywhere from two to three projects a year, and that's generally on the volume side, it's generally going to be in that 50 to $100 million a year in storage that we're targeting. In right now we're at 60, we could probably easily push toward the upper end that would be under way by the end of the year, if not exceeded. But on average, I think rods right over time, two or three projects that are active and are getting started each year.

Juan Sanabria -- BMO Capital Markets -- Analyst

Thank you, guys.

Kris Douglas -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

Our next question comes from Nick Joseph with Citi. Please go ahead.

Nick Joseph -- Citi -- Analyst

Thanks. You talked about the geographic differences that you're seeing. But I'm wondering if you're seeing a differences across different specialties or practices of volumes returning our patient flows?

Todd Meredith -- President and Chief Executive Officer

Not tremendous. Certainly, you see, the specialists clearly are getting very much back to normal. I think it is much more geographic than it is necessarily by specialty. There are some extreme examples as you as you might point out or we might point out that, you know, the cut some of the cognitive, you know, counseling, psychology, psychiatry, some of those things, certainly behavioral health, there are some things that can lend themselves much more to not getting back to normal and can be somewhat handled in a more virtual telehealth manner. But most of what, what is in our buildings we're seeing back to normal, most of the specialist certainly even the ones that we saw impacted pretty significantly like dentists and dermatologists all that's very much back to normal.

Nick Joseph -- Citi -- Analyst

That's helpful, then what do you think about, I guess leasing on a geographic basis? You know, are you seeing differences they're just given, given what's happening, kind of from a volume perspective is that we can throw in the leasing market at all?

Todd Meredith -- President and Chief Executive Officer

I'd say a little bit, certainly the emerging signs of more growth is all of us touched on would be much more concentrated in some of your places that are a little more had been back to normal longer, whether that's here in Nashville or in Texas, over in North Carolina, and different places like that, where Rob seems very active. I would say that does correlate somewhat with markets that have been much more open sooner. And so a place like the Bay Area is definitely going to look a little sleepier on that front. Southern California is a very different story, though. I'd say that's Rob gave an example that was in Orange County, and we've seen tremendous engagement there and momentum. So it is very specific to particular markets.

Nick Joseph -- Citi -- Analyst

Thank you. Thank you.

Operator

Our next question comes from Nick Yulico with Scotiabank. Please go ahead.

Jasper -- Scotiabank -- Analyst

Hey, there, this is Jasper [Phonetic]on Nick. So maybe could you guys just talk about what you're seeing in terms of leasing activity, leasing bonds, we're pretty strong this quarter, releasing spreads and retention rates are both at the high end of guidance. So any color that you can provide on the text patients for the rest of the year would be helpful.

Todd Meredith -- President and Chief Executive Officer

Yeah, you're right first quarter was strong in terms of our weighting metrics, specifically to our cash leasing, spreads, they were a little bit above what our guidance range three to four for the year, really that has to do, which is where the ultimate mix comes out, we ended up with, he was about 3% of the leases that had negative spreads. So having a very small number in that bucket, certainly lots your higher end renewals, play through to the average. But if you look at it, still, the vast majority of the renewals were in the three to 4% range. And that's still what we what we expect for the year. You know, overall, in terms of absorption, you know, we did have positive portfolio absorption, we're pretty flat on a on a same store basis. You know, that that can fluctuate from quarter to quarter. But as we've been talking about, there's some positive signs of things improving across the country that we think can help drive absorption as we look to the back half of the year and into in the next year. And then just overall, you also talk about the just the backdraft drop behind the whole sector, with aging demographics and the need for additional space, we think is going to be a benefit to leasing not just in the in the year ahead, but in the in the years ahead.

Jasper -- Scotiabank -- Analyst

That's helpful. And then could you give an update on the current acquisition pipeline in terms of activity and pricing? Maybe you could just talk about what drove the increase in acquisition, disposition guidance, and then the better pricing on dispositions?

Kris Douglas -- Executive Vice President and Chief Financial Officer

Yeah, I'd say on the on the pipeline, we certainly started off the year, strong investment activity 10 buildings under $29 million. At a blend cap rate of five and a half percent. We do have a continuing to build building our pipeline. And I think it really stems from our, from our process of what we're how we're building that pipeline, you know, we very much are going into our targeted markets, we have around 30 markets that we are currently focused on, we've seen an opportunity to grow in our team as they're building these relationships, getting to know building owners. And so that creates some visibility for us in terms of what we see out in the future. And so, given the strength of that pipeline, and the mentioned $150 million, that we have under contract for Li that we think it's going to close around the end of this next quarter, that that volume and that activity level are given us confidence that, we're going -- get to the upper end of that, that new range that we've given, given the investors on the on the disposition side. Yeah, I mean, I think this quarter, you saw sell a few properties and low cap rates, we're, we're by the cap rate, there was 4.8%, selling into the strength of the pricing market. Those were properties that that didn't fit in with our cluster strategy or long term cluster strategy. And so we took the opportunity to recycle those assets. That's and those dollars and put them into a creative MLB transaction. And you'll see us continue to do that this year. And we've got some opportunities to realize some nice value from some of our properties. And we'll rotate that into a creative imobie transactions.

Jasper -- Scotiabank -- Analyst

Thanks.

Operator

My next question comes from Jordan Sadler with KeyBanc Capital Markets. Please go ahead.

Jordan Sadler -- KeyBanc -- Analyst

Thanks, Rob. I'd like to follow up on the from the dispose, maybe you can kind of just walk us through the rationale of the, to the close this quarter. And he got a couple more teed up I saw on the queue of finger ones and Virginia, etcetera. But Valley Presbyterian, you know, in LA or Piedmont and Atlanta, what was sort of the rationale around these couple of sales?

Rob Hull -- Executive Vice President, Investments

Yeah, I'd say at the valley sales, you know, that was a campus that we had two properties there. When we look at that, that hospital, we didn't see a lot of additional opportunity to build out properties in and around that campus. And the buyer of that property, the tenant was, was an owner in the building and part of part of the ownership group. And they made an offer at a very aggressive cap rate. And so we wanted to take advantage of that and, and sell to that group and rotate that into an area and some assets where we saw potential for growth. And to build that clusters down the road. The other asset was, was an off campus asset and similar, similar theme, we didn't see an opportunity to build out in that immediate area, a cluster of properties over the long term. So we took the opportunity to sell into the strength of this pricing market and deploy those dollars elsewhere.

Jordan Sadler -- KeyBanc -- Analyst

Okay. And in terms of the stuff that's teed up, I did see one larger asset as soon as I could help or sell 52 million.

Rob Hull -- Executive Vice President, Investments

Yeah, the one in the one in Virginia, you're talking about that. One is it's an on campus building. But it's interesting that it has some capacity to actually convert a portion of that building to inpatient. And so the hospital had approached us, they're interested in buying that asset and to help them with some expansion opportunities they're looking at on the inpatient side. And so we were able to agree on a price at a favorable cap rate, and it's a sub for cap rate on that one. So a good, you know, opportunity to creatively dispose and reinvest, reinvest that capital.

Jordan Sadler -- KeyBanc -- Analyst

Okay, that makes sense. And then Kris, just, you know, I was just curious on the FF o side sequence sequentially, you know, you commented on a full quarters contribution from, you know, all the acquisitions they've closed the quarterback is kind of the headwind. One of the headwinds, he pointed out was neither doesn't have DNA that is not going to continue. Was that was there anything else? That was that was a headwind in the quarter, aside from sort of the elevated G&A side because I would have thought ffl would have been sort of pressured a little bit higher, based on sort of, you know, the underwriting and some of the metrics you guys had provided. That No, I mean, that really is the main item with that G&A...

Kris Douglas -- Executive Vice President and Chief Financial Officer

We've talked about that each year, we kind of have that in the first quarter that that seasonal, only so you know, if you would have had that that would have started pushing on rounded basis that your FFL gross backup, you know, call it another Penny or so. So that that is certainly the main item. Obviously we've talked about that our same store is growing a little slower than frankly what has been historically because of the COVID issues that we experienced last year. So as we see that rebounding, you know that will provide some additional lift for us on overall growth but you know, as we just as we look at it, I think things are lining up very well. Especially as we look toward the back half of the year and moving into next year. have a very strong you know, per share growth on FSO and FAB.

Jordan Sadler -- KeyBanc -- Analyst

You know out of curiosity is less important, but just for the sake of the metric, and he pointed to it the gap, same store NOI growth year over year?

Kris Douglas -- Executive Vice President and Chief Financial Officer

I don't know the exact number off the top of my head. But you can see inside of our supplemental we do lay out the straight line rent. So the math wouldn't be that difficult to count.

Jordan Sadler -- KeyBanc -- Analyst

Yeah. I'll follow up with my record to actually get there because you guys provide you don't provide the line items for revenue and an expense for the acquisition, redevelopment disposition line item. So it's a little bit tricky, but I'll follow up with you on that. What on the shares settled in the quarter, in terms of the equity was, can you give us timing on that? Was that late in the quarter or early?

Kris Douglas -- Executive Vice President and Chief Financial Officer

It would have been it was to remember the exact timing but I think it was late February, early March. Okay. Thank you, Jordan.

Operator

Our next question comes from Vikram Malhotra with Morgan Stanley, please go ahead.

Vikram Malhotra -- Morgan Stanley -- Analyst

Good afternoon. Thanks for taking the question. Just wanted to maybe get some of your latest thoughts on you know how big the opportunity set is for you know, leaving aside the pure or on campus for a healthcare realty just the off campus adjacent in other nomenclature, is how big the opportunity set for you is? And maybe over time, where you think that goes in terms of a percent of the portfolio, I asked him given, obviously, the broader talk about hospitals incrementally looking to take pieces of their business of their operations and move it more into the community to off campus settings, more procedures being reimbursed for that. So just wanted to get your how much of this is you're building toward a slightly different not completely, but somewhat different healthcare delivery model versus this is an opportunity said that you find sort of a creative, and maybe it's a bit of both, but any of these thoughts would be helpful?

Todd Meredith -- President and Chief Executive Officer

Sure, Vikram. I think it is a bit of both, we probably have a slightly different view than maybe sort of this prevailing binary view that, you know, there's a fixed bucket of services on a campus, and it's anything that can't be in the bucket smaller on campus, we don't really subscribe to that we think that bucket is always growing, the acuity levels are growing, the volumes are growing, I mean, the amount of inpatient expansion we see that sort of counters the narrative that hospitals are somehow shrinking, we just don't see it. And so we're seeing and we're seeing more demand and more on campus and movies being built. And a lot of what Rob's working on his stuff, right around the hospital campuses. So we think, you know, it's all a growing sector. So we'll continue to invest in both aggressively but there's no doubt and we've always said, it's a very real trend that things have been moving. Also off campus as well. And over time, acuity in the off campus setting can improve to and is, and as you just pointed out, there's going to be more and more that can be done in those off campus settings. So we like the odds of all of it. We think what's really important, though, is learning. How do you navigate that and balance, the risk and the return?

And I think that's what you've heard us Express today that, that we're finding our own way to get better returns with a strat and have more risk and less variability by looking at things that have a strategic alignment with our clusters. Also, it's an extension of relationships that we have, being in denser, larger markets, all those things that help mitigate sort of the risk of just, small, rural, off campus buildings that can go dark on you. So it's there is no hard and fast number. I think Rob maybe mentioned that we've got in our JV, we're doing more off campus there. I think the JV to date is roughly 40% off campus. So that's a very different picture than the balance sheet, which is, you know, high 80s on campus and around the campus. So our view is there's not a hard and fast number. We still, as I mentioned, are allocating the bulk of things to the campus model. But we're we are opening up and I think it does increase the addressable market for us, which is very encouraging.

Vikram Malhotra -- Morgan Stanley -- Analyst

That makes sense, man, give it given this sort of can you talk about just competition from the away from your traditional peers that has a playing field changed in any way over the last, you know, three, six months as the recovery is picked up? Have you seen new players come in and maybe just give us the latest thoughts on what pricing is?

Rob Hull -- Executive Vice President, Investments

Yeah, and Vikram I would say that. That's right. I'm We have seen really buyers that that maybe were sitting on the sidelines last year, they've, they've moved back into the mode of, of competing for product, certainly on the on the market deal side, you know, oftentimes we say it's a lot of the same names, but we really think about it from the standpoint of the capital that's behind the same names, in many cases. And so we are seeing quite a bit of capital move into the space. And they're chasing, chasing opportunities, just like we are. And so you're saying a little little cap rate compression, mostly on the, on the portfolio side where these guys are trying to get in and make a make a big, big move. On the on the what we're calling the ultra core side, you're seeing a little bit of it as well. So cap rates, certainly moving a bit, but we've been able to through our process, we've been able to find the right deals for us and a creative cap rate levels. And make sense of them. And a lot of those are being borne out by relationships that we've established previously. Repeat sellers, repeat folks that we're doing repeat business with, they know that we can, we can, we'll close on the transaction, they know that we'll learn to write it properly, and they're getting a fair price. And so we're really finding that that's paying off as we're, we're out there in this competitive environment.

Vikram Malhotra -- Morgan Stanley -- Analyst

Got it? That makes sense. And then just one last one on, you referenced obviously, the developments over time and you pleasing the pipeline. You know, given sort of all the cost pressures, across you know, various materials. I'm just wondering, as you think about underwriting here, are there certain areas you're focused on, or markets you're focused on, where you may feel you have a little bit more pricing power from an underwriting standpoint, just trying to figure out the underwriting in light of where costs are constructions going?

Todd Meredith -- President and Chief Executive Officer

Yeah, I mean, I think that that's certainly an observation. And it's the right observation. I mean, you're seeing you're seeing some escalation and construction prices from various things, everything from materials and labor, in some cases. And really, as we look at development, you know, we've-always said, we're, we're focused on this embedded pipeline that we, that we have internally, we shared that with you, over the years. And that's where we see our, our pipeline, the kind of built and feeding our development efforts. And so they are -- yeah, you're right, we're focused in markets where we feel like rent growth has been strong rent levels are strong, where they've been able to keep up with some of the escalating construction prices, hospital systems are growing aggressively. And so they have a need for additional space. And they've built in the price escalations in the cost to construct it into their, into their business plans. You know, places like Seattle, where we just started this redevelopment, here in Nashville, we're working on a development opportunity that we have to kick off this year and, and rent as rents here have been very strong. And so that's what we're spending our time. It's really driven by our hospital relationships and a need. And in focusing on that targeted yield under the 200 basis points above, where we're seeing stabilized assets.

Vikram Malhotra -- Morgan Stanley -- Analyst

Great, thanks so much.

Operator

My next question comes from Connor Siversky with Berenberg. Please go ahead.

Connor Siversky -- Berenberg -- Analyst

Hey, everybody, thanks for having just a follow up on the development pipeline, you mentioned multiple starts. So you know, I'm wondering if these are all built to suit projects? And then can you provide any color as to what the facilities plan specializations are, whether it's dermatology, oncology, something like that?

Todd Meredith -- President and Chief Executive Officer

Yeah, I mean, I think certainly, the our developments are being driven by but growth initiatives of the hospital. And so just for example, we're working on on a development here in Nashville with the health system, and it's, it's going to be on the campus, that hospital is growing, they are enhancing their women's services on the campus, and that's going to be a big part of this, of this building. They are also growing their pathology service lines, and so the other buildings in and around the campus are tall and they need to grow and they need to grow that service line. So there's dialogue with him about, you know, putting more cardiac services into the building. So it's, it's, it's mostly specialty physicians, service lines that that are certainly growing higher acuity service lines that need to be in on campus around campus, and that's what we're seeing and that's really what's driving the bulk of our

Connor Siversky -- Berenberg -- Analyst

Okay, and then just a bit more on some of these cost pressures that dickerman mentioned. So have any decisions? Or has any thing been signed related to the leases in these development projects? Or would those rates be reflective of the end project cost?

Todd Meredith -- President and Chief Executive Officer

No, I mean, the development we just started, we have a signed lease for 100% of the building and in the radius is that, and that's where we're, when we go into these projects that were, that is what we're doing before we, before we commit to putting a shovel in the ground. Hey, man, OK. Okay, percent, whatever that hospital driven service line, or multiple service lines, usually you're working out, you're working hand in hand with your contractor, you're not, you're not just saying, Let's get a lease, and then we'll go figure out what it costs. It's a it's a parallel process, that you're constantly working at the same time. So you're, you're keeping your construction costs, estimates live with your contractor working toward the contract, just like you're doing with your lease releases.

Connor Siversky -- Berenberg -- Analyst

Okay, that's helpful color. And then just one last piece of SD, do you foresee? Or is there any expectation maybe for delays in starts or, you know, ongoing project schedules?

Todd Meredith -- President and Chief Executive Officer

I mean, you're certainly planning development at start certainly has its ups and flows. I mean, as we're pacing right now we're on target to the start, as we've laid out, and, and complete as we've laid out in our, in our schedules, you know, certainly permitting and getting a building permit in this day and age, certainly can be more challenging. But, you know, we feel like if you hire the right contractors, and you have the right team in place, you're going to you're going to get those push through and you're going to get t started.

Connor Siversky -- Berenberg -- Analyst

Okay, that's all for me. Thank you.

Kris Douglas -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

Hi, next question comes from Omotayo Okusanya with Mizuho. Please go ahead.

Omotayo Okusanya -- Mizuho -- Analyst

Yes. Good afternoon, everyone. Question. So I'm sure you guys have seen the reset resistor report out there that's just kind of talking about, you know, off campus versus on campus and actually putting real data behind this. And kind of drawing the conclusion that off campus if elusive assets have actually tracked Well, if not better than on campus assets. But actually that why the cap rate? First of all, I'm curious what you think about this data, kind of given the historical argument that on campus, you did better than off campus? And second of all, does it influence you in regards to having more of campus assets on balance sheet?

Kris Douglas -- Executive Vice President and Chief Financial Officer

Essentially, we've certainly seen that report, we've read it. You know, I think it's a good effort for them to try to cover that type of information. I think it's a little early for them to come out with a thesis that says, you know, we put a stamp on it off campus, it's just as good. One thing you'll notice that's not in that data is no agros. You'll notice also they only looked at it three years. And I think that's the benefit we have. And some of our peers, you heard believe health peak yesterday got into this a little bit that they're doing a deeper dive over a longer timeframe. We've been doing that for a long time, we're doing the same thing. And I think when you look over time, and you have you go through cycles, you factor in the fact that buildings can go dark if they're off campus, sometimes even they're anchored. When police cycles are passed, lease expirations occur. So there's some real challenges to trying to do that on a third party basis. There's also a lot of data integrity issues that, you know, they're mashing up lease rates of all different varieties and types that don't really fully tell the picture. Again, I think I'd applaud them for trying. And I think there's something to glean from it. But our experience is a little different. We think there is a difference between on and off performance. Another key difference that we saw on that report is they throw all the adjacent properties into the off category.

Well, adjacent behaves a lot more like on and so you're lifting your off performance by varying the adjacent and there, there's another issue. So there's a lot more nuance to it than that report suggests, I think that's our job is to figure that out and, and learn from what we have experienced over the years what we see changing and put that to work to generate better performance, I think the key thing that we would say is on these ultra core properties that are on campus or right around the campus, they tend to perform better, higher growth, and they tend to do it with less variability. When you get off, you just start opening up the performance issues and variability and see more risk. And so that's why we put together some of our on versus off cap rates in our investor presentation. You'll see as Rob said, we've been we've been getting 40 to 90 basis points spread on versus off, and we think there's there's some rationale for it. And so we're very clear And how we look at that risk. And we'll certainly bring more as well like healthy convention to may read to talk about as well on that, that topic.

Omotayo Okusanya -- Mizuho -- Analyst

Great. Thanks.

Operator

Hi, next question comes from Rich Anderson with SMBC. Please go ahead.

Rich Anderson -- SMBC -- Analyst

Hey, good morning. So I'm the off market commentaries, you made it you know about the relationships and whatnot. Is that a price situation where you get a better cap rate exclusively? Or is there some sort of, it's just easier, you can almost customize things a little bit, and you can have a little bit more flexibility on how to approach things. And is that like the trade off? And maybe you don't get a special bargain? But you get more flexibility out of that? Is that a fair way to think about off market?

Todd Meredith -- President and Chief Executive Officer

Yeah, Rich? I mean, I certainly think that's it. I mean, I don't think we're, we're sitting here saying that we're getting discounts on on acquisitions, because we're buying them off market. To me, it's more about building that relationship with that seller, we've had a number of deals that we've done recently that are that is repeat business, this is the same building owner told us something they had in a different area. And, and, and, and it came straight to us. And I think that is right, you've built a relationship with them. They know you can close they know your reputation, they know you know how to underwrite the property appropriately, so that they feel like they're getting a fair value, and it becomes an easy process. And so, you know, that's where the real value comes in for us and doing off market is that, that we know, we can kind of look and build that pipeline and see what it looks like further out, rather than just waiting for marketing properties to hit the market and then reacting to this. Maybe this the savings comes from it doesn't, it's not as hard to process and you save money by chasing around, maybe I'm just speculating. But I think the other thing, as Rob mentioned earlier, if you allow these properties to get pushed into a big portfolio, that's where you avoid the premium as well. So by getting to these early into these relationships, it just saves them a lot of headache, the seller. But they again, they want a fair price, it's my job is always you know, when you go knock on that house that you really even, you know, your family has liked and always wanted to buy and you go knock on their door, chances are, they're not going to sell it to you for a steal.

Rich Anderson -- SMBC -- Analyst

But, you know, the idea here we see is that there is premium in portfolio size. And so you avoid that, by the way we've been doing?

Todd Meredith -- President and Chief Executive Officer

Well, maybe they wouldn't even open the front door. But when you talk about getting able to push rents, and you're not seeing, you know, too much pushback, do you have a comfort level about you know, retention going down? Do you have something in mind like, OK, let it trickle down a couple percent. Or if you see any indication of retention being impacted by pushing, when's that you'll you'll take your foot off the gas, you know, for us rich, we say that our expectation retention is 75 to 90, we've frankly been running more in that kind of plus or minus 85 for some time. And that's kind of kind of ebb and flow by by quarter and, you know, as we look at it, we said we're looking to grow three to 4%. But we have some, we have some markets that we're doing better than that, but then you have some markets that Yeah, you have to you have to recognize what what's going on in the market and the competition, and you have some, some roll down this year, this quarter was pretty minimal that 3%. And so you're just trying to build a portfolio that gives you the opportunity that the you can hopefully over time, you know, grow that in a, in a more consistent rate and a stronger rate. And, you know, as we look, you know, we've had some people have asked us, like, you know, three, three to four are reasonable, like, compared to the inflation. So well, we really look at things from a kind of construction cost replacement value, which, you know, has been growing north of that three to 4% for for some time, and frankly, right now, with some of the questions we had on this call, there's some concern of you know, could that could that speed up moving forward. So we think that there's, there's still plenty of room and we think that we're still showing value to our tenants in terms of making sure that that we have have properties that you know, have the space they need that are maintained, you know, we certainly make sure that we are investing the capital and ti as well as building catbacks to be able to maintain the this level of growth that we think is sustainable, long term.

Rich Anderson -- SMBC -- Analyst

Great, thanks. I'll leave the floor. Thanks, folks.

Operator

Your next question comes from Todd Stender with Wells Fargo. Please go ahead.

Todd Stender -- Wells Fargo -- Analyst

Thanks. Thanks for sticking around. Rob, for you. You highlighted the off campus property you acquired. I think in here in cute, too, I don't know if it was the Colorado Springs one at a step plus cap rate. If that's a redevelopment candidate, what kind of cap rate is things that will look like on a stabilized basis? Just kind of narrowing down the value creation? opportunity there?

Todd Meredith -- President and Chief Executive Officer

Yeah, Todd, I think heard you say, haven't had a little bit of hard time here. And you've I think I heard you say a property that we said was seven 7%. cap rate that was the deal in San Antonio. And that was an interesting situation where our kind of our direct sourcing process really, really paid off for us. You know, there, that was the seller of that property. Was wanting a quick process, and then surely of clothes, they wanted the room move really fast. And the broker that was working that deal knew we were familiar with that market, knew we could achieve that and came to us and they weren't as interested in maximizing value as they were just getting out of the property real quickly. So we just got through telling, telling rich and we weren't getting discounts that probably on that one, we might have gotten a discount.

Todd Stender -- Wells Fargo -- Analyst

So what is the cap rate compression expectation there? If you're buying it as seven? Is that is that market? Something in the fives? Is that that ambitious?

Todd Meredith -- President and Chief Executive Officer

Yeah, I mean, I'd say in high fives is probably mostly. Yeah, I think if you were to take that out into a portfolio, not that we're going to do this, but package it with some other nice properties in a portfolio. Yes, you would see compression well into probably the high fives. And so yeah, there's a lot of value creation that can be out there.

Todd Stender -- Wells Fargo -- Analyst

Great. Thank you.

Operator

Our next question comes from Mike Moeller, with JP Morgan, please go ahead.

Mike Moeller -- JPMorgan -- Analyst

Yeah, I guess in terms of getting back up to the 3%, same store and what are the P&L headwinds that you're facing today to get there? Because you're in place bumps are almost at 3% spreads are fine. Is it the parking or bad debts elevated many way? I mean, what's the drag today in the P&L?

Todd Meredith -- President and Chief Executive Officer

Yeah, the main things that we've talked about is really the parking, then operating expenses, and, and then occupancy changes. So bad dad is back to minimal with any, you know, we collected basically all of our for rent. So that's not not an issue. But you know, the parking, like I said is probably impacting on the revenue side 5060 basis points on an NOI is frankly, even a little bit more than that, on a on a revenue per average occupied, we are trending below our average because of lower operating expenses. You know, right now, we had negative operating expenses this last quarter, and which is which is great, but that's unusual. But the operating expense pastor on the other side, reduces that that revenue growth now to an NOI to NOI bottom line, that's still still a positive for us. But then we did experience the loss and occupancy and the second and third quarters of last year, which you know, is rolling through a call 5060 basis points. And so we always say that you're going to end up that's going to have a one to one impact on the revenue growth. So you know, that can bring down your you're close to 3%, revenue growth down to the into the mid twos. And then as you take that to the NOI with our margin is kind of really a two to one. So you can have almost 100 basis point impact is related to the occupancy. So as we see the parking coming back, as we see the operating expenses, kind of more normalizing. And we think that the occupancy is hopefully, you know, bottoming out although it can move around each quarter and over the long term we think and grow. When you build all of that back together, you get to see that that revenue model and that NOI model to get back to that those long term averages of 3% or frankly even more, if we're able to see some absorption.

Mike Moeller -- JPMorgan -- Analyst

Got it? And then I know he said the parking was off, I think I think it was off 20% year over year. But just thinking bigger picture, if you have 100 bucks of revenues? How many? What proportion of that come from parking just to put parking into perspective versus everything else on the revenue side?

Todd Meredith -- President and Chief Executive Officer

Yeah, it is, is very lucky, I get the exact number out for you. So less than 2% 2%. Got it? Okay, a million a quarter on 120 million in revenue a year ago.

Mike Moeller -- JPMorgan -- Analyst

Got it. Perfect. Okay, that was it. Thank you.

Todd Meredith -- President and Chief Executive Officer

Thank you, Mike.

Operator

[Operator Instructions]. Our next question comes from Daniel Bernstein with Capital One. Please go ahead.

Daniel Bernstein -- Capital One -- Analyst

Just one quick, quick question, it seemed like both you and your peers, retention rates have really gone up in the first quarter is that I didn't know if that was just kind of like a one off thing. Or if you're seeing an actual trend due to maybe changes in in, you know, you know, tenant movement or desire for, you know, to stay in the buildings and expanding the buildings and just trying to understand if there's a trend there and how that might, how you think about that, and how it might impact your occupancy and T is going forward?

Todd Meredith -- President and Chief Executive Officer

And, you know, I wouldn't read too much into one quarter, it does move around, described, we're comfortable 75 to 90, it has been running a little higher. I don't think it's unusual, given the pandemic, that people are getting themselves back on their feet, you know, running at full capacity, they've been focused on safety protocols, and just run things back to normal. So that may explain some of it. But also, we're seeing a lot of interest in expansion, and so forth. So, again, you know, that may help too. And I think some people have asked, you know, maybe some perception that rents are rising elsewhere, construction costs are rising, that helps a little bit the h2, but we're not suggesting next quarter is going to be the same or better. I think we're still comfortable in our range. And we'll move around a little bit. So I wouldn't read too much into it. I think it's probably just in a range that we've been in 80 to 85. Would that be the same answer for the weighted length of term? You know, that that bounces around a lot too. But that, you know, again, any, any change from tenants in terms of what they've been asking for in terms of length of term, especially with inflation going up? I would say a long term to long term basis, I don't think we've seen a big a big difference. I will say that that last year, while we were in the midst of of the pandemic, it probably trended down. You know, there were people that just weren't in a position to make a long term commitment. And we were comfortable with that. And we signed a little bit, probably a higher percentage of short term deals. And so as a result, you may have seen our averages trend down a little bit. But now that we're getting back to kind of normal, more normal environment. I don't think that, that our expectations are much different than they were, you know, over a year ago.

Daniel Bernstein -- Capital One -- Analyst

I appreciate it. Thank you.

Operator

Thanks. The next question is a follow up from Jordan Sadler with KeyBanc Capital Markets. Please go ahead.

Jordan Sadler -- KeyBanc -- Analyst

Thanks. Let's just parsing through the supplement a little bit. There's a page 25 in your when you're saying for reconciliations, there's something called rent concessions. Can you just remind me what that is exactly? I saw that it sort of spiked up but I wasn't sure if that related to the increased leasing or if that was more like a deferral or abatement. What is that?

Todd Meredith -- President and Chief Executive Officer

Yeah, it will be tied to multiple things, but typically, it's going to be some type of free rent that is going to be related to mostly new tenants. We don't really have any on renewals. I think that the to dig into the specifics, but you know, we did have a couple of of tenants inside our redevelopments that that started. And so those typically end up with a little bit of free rent at the front end. So that would be my guess is specifically why it is a little bit higher, although it's still say it's still you know, not that meaningful to the overall revenue. But, but that's that's the reason you're seeing a little bit higher this quarter than previous. There's no Bateman in there for anything like that. No, no, nothing, nothing like that this is this is really about, you know, some sort of free rent and be for for a tenant is specifically a new tenant, especially on redevelopment where they may be built out in space or, or moving from one building to the next. And you're kind of helping them out, as they're as they're moving mid across buildings. But But no, it's it's not. It's not rid of payments.

Jordan Sadler -- KeyBanc -- Analyst

Okay, that's helpful. And then as it relates to your lease structure, I know, the I think the preponderance of your leases are fixed. But I know there's also a CPI portion, as well. So I was just kind of curious on the upside, we don't talk about this that often. But I know this theme has sort of popped up here a little bit. But is there is there a cap on CPI, CPI escalator?

Todd Meredith -- President and Chief Executive Officer

Generally No, you know, there's all kinds of leases out there. And you know, there are some that will have, you know, a floor to a cap of five. But I would say generally, they're more just tied to whatever CPI is, you know, overall CPI is not a large percentage of our of our structure, Sunder under 5% of our leases have a CPI based escalator, we are typically more more fixed, as you pointed out. And historically, you know, we frankly, have done better with our fixed, running closer to three than than where CPI has been. And people have questions like, well, what CPI starts taking off is that a risk said, Well, we also have a generally, you know, a pretty regular turn in our leases, with about 20% that are up for renewal each year. So if we do start to see pressure on on costs, across the board, in construction costs and janitorial costs, or elsewhere, we think we have a very reasonable amount of our leases that we can start to look to try to recapture that, if that does start to occur.

Jordan Sadler -- KeyBanc -- Analyst

Okay, and then lastly, I think, on the joint venture deals. I know, you know, you know, a handful of these, you know, happened this quarter, and you've got some more teed up for next quarter. And I'm just curious, what sort of you know, it since you have some examples here, of deals that you've closed, what's the sort of thinking of, you know, JV versus, you know, you know, on balance sheet transaction, like, what are you showing them versus what are you not showing them? Some of these deals look like, you know, straight up the middle? And I'm just trying to figure out how we're supposed to tell what the differences?

Todd Meredith -- President and Chief Executive Officer

Yeah, I mean, I think if you look at what we've we did this quarter, and really look like what we did in the fourth quarter as well, in the JV, you had, you had a, you had an opportunity to really look more of a value add opportunity, where it was a building that we purchased, that had some upside in terms of occupancy. And so you know, opportunities like that, where we think there might be some near term drag, because of the lower occupancy, but we see a nice upside. Those are opportunities where we're, we're going to entertain those in the in the JV and we did. We are one of the one of the buildings that we bought, this past quarter was really our fourth building around a campus in in Orange County. And we have been, we have been placing buildings into the JV around that campus. And there, we see some real upside, we've seen some real absorption in in the other buildings. And so that's where you'll see us participate and share those to the JV. The other side is really on the off campus side.

Three, buildings that we put in there this quarter, we're off campus properties where we think that there is some, some, some additional risk. And so we're putting out half the half the capital, but but getting that higher incremental return. And so those are opportunities that we're sharing in the with the JV, the stuff that's down the fairway, you said I mean, yeah, that's where we already have nice relationships on or adjacent. You know, we're, we're generally keeping those on our balance sheet and we intend to, as we said before, we're not obligated to show them a certain number of deals or certain types of deals. It's really at our at our discretion, and so you'll see us continued To do to do that, and I think that Todd pointed out in our supplemental things page 19, where we're showing the breakdown of the JV, I think 40% of the, of the, of the properties that are in there now, off campus, as opposed to our own balance sheet portion portfolio that's staying down around that 12% range. So I think that's, that's really the way to think about it is when you get into those situations where the cap rates a little richer, we can make better sense of it. Or maybe there's some upside it may have some near term drag and in the office campus building.

Jordan Sadler -- KeyBanc -- Analyst

Got it. Thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Todd Meredith for any close.

Todd Meredith -- President and Chief Executive Officer

Thank you, Sarah. And thank you, everybody for tuning in. Today will be available for follow up if you have any questions and we look forward to connecting with most of you at Navy soon. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 71 minutes

Call participants:

Carla Baca -- Associate Vice President Investor Relations and Corporate Responsibility

Todd Meredith -- President and Chief Executive Officer

Bethany Mancini -- Associate Vice President

Rob Hull -- Executive Vice President, Investments

Kris Douglas -- Executive Vice President and Chief Financial Officer

Juan Sanabria -- BMO Capital Markets -- Analyst

Nick Joseph -- Citi -- Analyst

Jasper -- Scotiabank -- Analyst

Jordan Sadler -- KeyBanc -- Analyst

Vikram Malhotra -- Morgan Stanley -- Analyst

Connor Siversky -- Berenberg -- Analyst

Omotayo Okusanya -- Mizuho -- Analyst

Rich Anderson -- SMBC -- Analyst

Todd Stender -- Wells Fargo -- Analyst

Mike Moeller -- JPMorgan -- Analyst

Daniel Bernstein -- Capital One -- Analyst

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