Curated Portfolio Of Multifamily OZ Projects, With Pinnacle Partners

Pinnacle Partners was the presenting partner at Multifamily Investor Expo 2023, a one-day virtual event hosted by WealthChannel. In this webinar, Leo Backer and Jill Homan present the Pinnacle Partners Opportunity Zone Fund VIII.

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Click here to visit the Pinnacle Partners website.

Webinar Presenters

• Jimmy Atkinson, WealthChannel
• Leo Backer, Pinnacle Partners
• Jill Homan, Pinnacle Partners

Webinar Highlights

• Background on Pinnacle Partners, a firm founded by real estate veterans to take advantage of the Opportunity Zone program.
• Summary of the potential tax advantages of the OZ program.
• Discussion of the markets that Pinnacle finds attractive in the current environment.
• Summary of Pinnacle’s 200 unit project near the NFL stadium in Denver.
• Summary of Pinnacle’s multifamily project in Nashville with approximately 373 units.
• Summary of Pinnacle’s multifamily project in Southeast Austin with 342 units.
• Summary of Pinnacle’s build-to-rent project in Phoenix.
• Live Q&A with webinar attendees.

Connect With Pinnacle Partners

• Pinnacle Partners – Official Website
• Pinnacle Partners on LinkedIn
• Leo Backer on LinkedIn
• Jill Homan on LinkedIn

Webinar Transcript

Jimmy: Thank you so much for joining us as our title partner on the Multi-Family Investor Expo today. How are you both doing?

Leo: Great. We’re doing great, Jimmy. Thanks for having us.

Jimmy: Absolutely. Well, you have a half an hour, so I’ll turn it over to you, and dive in when you’re ready to begin.

Leo: Well, thank you, Jimmy and Scott, for having us again. We’ve done multiple webinars with your team and pleased to be back here again. Today, we are gonna be talking about our Pinnacle Partners Opportunity Zone Fund VIII, which is a curated fund of four opportunity zone projects. As I mentioned Jeff Feinstein and myself, our founding partners of Pinnacle Partners, Jill Homan, who is joining me here today, is a partner in our Opportunity Zone fund, and pleased to have her with us here today as well. So I’m gonna go through very quickly the obligatory legal disclaimer, that Jimmy, you already read. So I think we don’t need to go into that, the detail. We’re gonna talk a little bit quickly about Pinnacle Partners and our background and opportunity zones. I think that Frank talked a little bit about it.

I’m gonna go a little bit more in detail. And then we’re gonna talk more in-depth about the project, which I think is what you’re here really to hear about. So Pinnacle was formed about four years ago, right before the opportunity zone regs were fully approved. And Jeff approached me, you know, with these regs coming out. I have a 35-year real estate background. And, you know, to me, I looked at this as an opportunity that was too good to pass up. I had a 35-year corporate real estate background and a company that was thriving and I just said, “Jeff, let’s see what we can do around opportunity zones.” And we really felt like using my real estate background and Jeff’s history of, you know, technology and also investor network.

The best role for us to play in opportunity zones was to bring in equity for sponsors. You know, like Sola, and Martin, and Frank. We are the LP equity and sometimes Co-GP equity for Opportunity Zone projects. And as I mentioned, we launched Pinnacle four years ago. We’ve now funded 10 single asset projects, which I’ll go to really very quickly in a moment. But as Frank mentioned, you know, the two main benefits of opportunity zones are, you know, utilizing capital gains, you get a temporary deferral of paying the tax on that initial gain, and that gain can be from any source, real estate, stock, bonds, and a business. And we’re seeing of late a lot more folks selling businesses and, of course, real estate. And I’ll go into why real estate is very impactful today more than ever.

So you defer your payment on that tax until 2026. And then at that point, you know, you have to hold these investments for 10 years. That’s why I think Frank mentioned if he does an opportunity zone development, he needs to hold that project for 10 years, but when you exit from the project, all of your profit on that initial investment will be tax-free. And that’s the very impactful, you know, portion of the opportunity zones. Opportunity zones were created to develop in kind of underserved, economic-stressed areas. And we have really focused initially in Washington and California. And what you hear about our fund is now we’re kind of moving nationwide and brought Jill in as a partner to help us on our scope and review and execution on these projects.

I’d like to go through very quickly kind of the benefits of opportunity zones versus a 1031 exchange. And I mentioned, you know, no surprise, there’s fewer people with capital gains in the stock market today. So we’re seeing a lot of our investors are really selling up real estate and businesses. But if you are selling real estate and you’re familiar with a 1031 exchange, those have been around for a very long time. They’re a great way to defer tax, as long as you continue to defer into like-kind real estate. And the benefit of OZ investing is all you have to do is reinvest your gains. You don’t have to reinvest your basis alongside the gains again, so that’s is one major benefit. You don’t have to invest the entire gain. So you could spread it out into multiple projects or you could choose to 1031 a portion of your gain and the other portion you could invest in a real estate opportunity zone project.

These are typically more of a passive investment, which a lot of our investors like that if they’ve owned real estate, they’ve managed their real estate portfolio for a number of years, maybe they’re getting up in age, they’d like to invest in more of a passive manner and allow groups like us to manage this investment. Again, you can diversify into multiple projects into putting all of your investment into one large project. Opportunity zones, you still get the use of depreciation, but there’s no recapture at the end of the sale period, which is a huge impact in your return over the 10-year period. And again, you know, holding these for over 10 years, now you can sell and not pay the tax on the gain versus a 1031 that you’re continuing to kick the can until either you pass away and your estate deals with tax burden or you have to pay the tax when you ultimately do sell.

So very impactful. We’re seeing a lot of landowners that maybe have very low to zero basis in their land. Maybe they have a business that’s been there for a very long time and have chosen to keep the business running, but the real estate’s where their value is or their wealth is a great way to sell and to put those proceeds into an investment vehicle, but in a more passive manner. Again, you know, we formed Pinnacle 10 years ago. Initially, we were very focused in the Pacific Northwest, which is where Jeff and I are located in Seattle. We moved down to Southern and Northern California. You know, our thesis is, you know, focusing on opportunity zones, but we’re looking at all of these projects as if they weren’t. So we’re underwriting projects independently without the benefits of the tax increase for the OZs. So our 10 projects that we’ve invested in, you know, like a lot of others, we’re focusing very close to urban cores, we’re close to universities. So of our 10 projects, you’ll see we’ve done almost 800 affordable workforce housing projects.

I like to hear kind of Martin’s presentation a lot because we’ve done quite a few workforce affordable housing projects at 70 to 80% of AMI. We’ve done four student housing projects in Berkeley, California, Seattle, and Spokane, Washington. And we’ve also done two adaptive reuse projects utilizing OZ benefits and HTCs, like Frank has done. So we have a lot of experience. Every one of these is a separate QOF setting up a QOZB with the sponsor. So we’re very good and have very good legal and tax counsel of how to execute on these OZ projects, which is really what’s allowed us, I think, to scale now with Jill nationwide.

We consider ourselves kind of more boutique size OZ fund. There’s a lot larger funds out there. Typically we’re, you know, 15 to 30 million of equity per project. So you’ll see of our 10 single assets, we’ve allocated a little over 880 million of equity with almost 650 million of projects that we’ve capitalized. Since these are all new construction, we’ve had one that’s been built, completed, and sold actually. And another day, we can tell you how we did that because we reinvested those proceeds into another OZ deal, which you can do. We have six that are under construction and we have two more that will start construction here this year. So moving pretty quickly. We’ve got a very strong advisory board that helps us and all of our diligence.

We’ve got three real estate developers, mostly multi-family focused. We have a real estate attorney and we’ve got a very large property management exec. They manage over a thousand apartment units across the country that help us on, you know, our strategic planning, but also our diligence on all of our projects. So what brought us to Jill… Jill, you’re gonna meet in a moment. She’s been speaking even before the opportunity zone regs came out. She was in Washington, DC, has been involved in the opportunity zone program since its inception like us, been very, very involved, and also has been doing development, and advising real estate funds. So that’s how we got to her and high net-worth families and family offices.

So it was pretty logical that we’ve been trying to work together for a number of years. And last year we decided to launch our first multi-asset fund. A lot of our investors like our program. They like the way we source projects, and vet the sponsors, and underwrite the projects, but they wanted to diversify outside of Washington and California. So we purposely, you know, curated a fund of four programs at the end of last year and we wanted to take advantage again of, you know, our background in OZ, raising equity, going to sponsors in really selected markets across the country.

I don’t know if you can see this map, but it was very purposeful in going to markets in the Sunbelt and what I’ll call mountain states where we saw a lot of migration out of Washington and California, that people were moving even pre-COVID for quality of life reasons, job growth, and also, you know, cost of living for sure. So, you know, you’ll see here we had a large focus of, not a large focus, but a very focused attempt of markets we really wanted to find projects in. And we’re pleased to announce that we now have four projects. Three we’ve closed on, one will be closing on this month. That will be our fund of four. Potentially, we’re gonna add a fifth. We’re not gonna talk about that today. But we’ve got four very exciting projects with a mix of garden-style, podium, and build-for-rent, single-family projects.

The fund is approximately $100 million fund. We have the right to go up to $120 million, which we may do if we add this fifth project. But again, our strategy was to focus on these high-growth, high-barrier-of-entry markets. And no surprise, especially in today’s world where it’s very hard to find projects that pencil, we’d love to find projects like Martin is doing with Sola in all of our markets. It’s just very difficult in opportunity zones to do ground-up construction and hit the affordable mark, but it’s easier when you go out to these markets that we’re looking in where you’re building more purpose-built, single-family, garden-style, and podium-style buildings.

We’ve never done high-rise, you know, high-end projects. We’re looking more at market rate and workforce housing, which we think is more executable in these markets. You’re gonna see these markets that we’re in that Jill’s gonna talk about in Denver, Nashville, Phoenix, and Austin. So four markets that, of course, have been in the news a lot. You know, we believe these markets even though, you know, there’s a lot of activity there, you know, the projects that we’ve identified we think are de-risked because not only the product type but also the locations in these markets aren’t right smack of the middle of downtown, for instance, where there’s a lot of other supply coming on.

So with that, again, you know, very excited that Jill, you know, joined Pinnacle last year to become managing director of our fund. Jill and I are sourcing these projects and, you know, again, it’s taken us a year to get to this fund of four, which, you know, it’s funny. One of our investors, you know, said, “Well, why is it things are moving so slow?” And we said, “Well, we think that’s actually a good thing because our last two projects we’ve been able to lock in. You know, the terms we’re able to get for our fund and our LPs are much better than they were a year ago. And we’re able to de-risk these investments by coming in later when they’re closer to construction starting.” So with that, Jill, do you wanna go through the fund of four?

Jill: Yeah. Great. So I appreciate the introduction and great to be with you all and be with you again, Jimmy. So as Leo mentioned, I’m Jill Homan and just my very brief background is I have about a 20-year background in real estate private equity with the bulk of my career being spent in multi-family development in emerging neighborhoods. And so when the opportunity zone tax incentive was passed, the legislation was passed at the end of 2017, it really required no pivot from me in terms of function. I really am doing quite similar work to what I was doing pre-op opportunity zones. But now we have this tax incentive layered on top of it, and so let’s kind of jump right into these deals.

So as Leo mentioned, the first deal we’ll talk about is our Denver stadium district Opportunity Zone project. Our development pro partner on that is Mortenson Development. So they’re a highly regarded national development company that is vertically integrated with a general contracting in-house. The project is located just blocks away from the football stadium where the Broncos play. And I wish I had a little zoom layer so pointer because I could like point at the picture. But you’ll see the top picture is a rendering of the project and it sits right on the South Platte River trail system. So this is a trail system that runs all through Denver. It goes downtown and you have the river right there. So it provides really just access to the outdoors in terms of hiking and biking. So it’s a highly desirable amenity that just is steps away from our door.

And then we also are across that small bridge is there’s breweries and just access to amenities. The project is situated less than a mile to maybe two miles from the major universities in Denver with about 43,000 students. And given its proximity also to the stadium, it’s just very attractive to renters as well. And we’ve seen dramatic rent growth in the market and it’s approaching…here we have a date in 2021, but since over the course of 2022 into 2023, the rent growth has been high single digits as well.

And then as we mentioned with the students and also with the Platte River Trail, you interestingly could bike to downtown or obviously, we’re close to ingress and egress with the highway system. And so you’re less than 2 miles from downtown and 145,000 jobs. You also have access to the regional transportation system with a train stop nearby. We closed on our construction financing at very desirable terms. And it was 250 over [inaudible 00:15:51], which is in these days very, very strong. And we are projecting to start construction in just a couple of weeks and so we’ll be underway on that project.

So maybe we’ll go to the next one. And if you have questions don’t hesitate to stop. So this project is, and as Leo mentioned, what’s interesting is, you know, within the multi-family scope, we’ve diversified in terms of types of buildings, but also in locations. So with Denver is a stadium district Ppoject, Nashville is a stadium district project, but we’ll get into the locations of the others. Nashville, there’s just so much renter demand and it’s driven by the extraordinary job growth that’s happening in Nashville. This sits on the East Bank of the river. That’s why it’s called the East Bank Project. And it’s really proximate, very, very close to the football stadium there where the Tennessee Titans play. And the stadium you may have seen is a redevelopment and a new stadium was announced.

And so you’re gonna see a lot of activity with a new stadium, a Titan Stadium, starting construction, which will be very exciting for the project. So our project sits in between this brand new to-be-built Titan Stadium and a new built Oracle campus that was 65 acres and that’s bringing or it was announced rather, but it’s bringing thousands of jobs. And so we think this whole area on the East Bank is undergoing transformation. And developers have come in and are really clamoring for sites and we’re very, very excited about the basis that we have for the project.

It also sits… You know, with it being on the East Bank, it’s just right over the bridge from downtown central business district. And so that also means we get stellar views looking into Downtown Nashville. The timing of the project start is we’re in the design phase of the project, and we’re expecting to get our site plan and those approvals later towards the end of this year. So we can maybe go to the next one.

And our project on that one is Stillwater Development, which is a Texas-based firm and a regional development company. Our project in Austin is located in a submarket called McKinney Falls. And that is just to the southwest of the airport. So it’s Southeast Austin, it’s approximate to Tesla. The Oracle campus, interestingly also in Austin, is approximate to that campus. Then it really sits in the middle of a considerable amount of new home construction. And so this project is really a three-story garden. So traditional garden style, fully amenitized with about 340 units.

Austin still has considerable demand for units with recently over the course of a year, about 11,000 units have been absorbed. And then also, the rent growth has continued to be strong within this market. This is a 12-acre site and will ultimately be part of some additional build-to-rent or townhome projects that would be coming down the road further. And this project is in the site plan approval process with construction to start towards the end of the year.

And then our Phoenix project, that project is a build-to-rent. So as Leo mentioned, we have, you know, a podium that’s more infill, urban infill. We have garden, that’s your Austin project. And this is, you may have heard about the build-to-rent style projects. And so we’re really excited about this one. We’re partnering with really a best-in-class build-to-rent development company called Trilogy. And this project, you know, in the theme of build-to-rent, as you all know, with the increasing interest rates and also with the equities market, you know, go down, what you find is a lot of folks are postponing purchasing homes. And so it really creates a demand opportunity for those who wouldn’t be purchasing homes to now be renters of the homes that they would’ve otherwise purchased.

And so this is a purpose-built, built-to-rent 107 units in a mixed-use development that’s an infill development and walkable to retail amenities. This is right outside of Phoenix in a suburb called Avondale that has strong barriers to entry. It’s a 15-acre site, but we’re just 25 minutes to downtown and the airport, and it has terrific access to the highways as well. We’re in the site plan approval process, and we have construction start expected for the end of this year. And, you know, since this is really slab-on-grade development, we’ll start delivering units just mid-2024, so it has a much shorter construction cycle. So those are the four projects that we have under control and are part of the fund and we’d welcome answering questions. I think some of the questions have come in about the portfolio or the fund.

Jimmy: Well, that’s great. Thank you, Jill. And thank you, Leo. I’ll moderate the questions if you don’t mind. We do have quite a few. And, yeah, if you’re just joining us, you missed my previous announcement, you can use your Q&A tool, and your Zoom toolbar to submit questions for Leo and Jill and for any of our presenters throughout the course of today. The first question for you two brings up the problem with having geo-diversified funds in multiple states. There’s this issue with getting K-1 returns from multiple states, and incompetent CPAs who don’t know how to file them all. There’s a lot of extra tax paperwork. Do you have any comment on that?

Leo: You know, Jill, maybe you can add after, but what I would assure you, and one of the reasons these sponsors like working with Pinnacle, is we’re working with two of the top OZ legal and tax specialists in the country, Greenberg, Troy for tax, for legal, and they have a tax expert in OZs, as you know, Jimmy, Jim Lang. And then Novogradac does all of our Pinnacles fund work and our audits. So we have the best experts and our CFO, Sandy Heifer, who has been with us for four years, is very involved. So we really run all that for our sponsors. We don’t rely on that work for them. So, yes, there’s certainly challenges, but making sure you have the best experts that have done this, then they’re done it, they represent these two firms represent the largest billion dollar funds in the market. So they know the space very well.

Jill: And we’re happy to have for investors to jump on the phone and to talk about our back-of-house operations. So that’s something that, you know, we have significant family offices that have invested and so we’re very, very confident that investors will be excited about just the functionality and expertise in their big back of house.

Jimmy: Very good. A question from Greg that came in. Are you underwriting these deals at 60 to 40 loan-to-cost?

Jill: No. Well, first of all, we’re underwriting less than that. So kind of in the 50 to 55%, and that’s just driven where, you know, the lenders are. All of the deals that we’re working on, we have conversations about their lender relationships and also have to get a certain level of comfort on their ability to secure construction financing. And so that’s really been the approach. And so all of these developers are very well capitalized, have strong lender relationships, and then we purposely underwrite lower leverage. We’re not putting, you know, mezzanine preferred equity or anything on, and just the deals need to work in that kind of 50 to 55% kind of triangulating on 55% range.

Leo: And there’s two reasons we do that. One is obviously the reality of the world today, but we also think it de-risks the project by using less leverage. And for an opportunity zone project, you know, we’re really trying to return as much as we can at stabilization when we put permanent financing on the project for our investors to pay the tax at that point. Obviously, we can’t guarantee that, but the less leverage you put on, the more probability we can do that.

Jimmy: Sure. Several more questions here that are coming in. One of ’em points out or supposes that Austin and Phoenix are locations where the property values are supposed to be going down significantly. Well, what’s your comment there? And do you agree?

Jill: Yeah, I mean, what I would just say, it’s kind of like, in my view, that comment is a bit macro when, you know, it’s really submarket by submarket. And I think if what we were trying to build in Nashville was class A, multi-family in like downtown or CBD or like something in a location where, you know, there’s a whole lot of other class A, I think that would be one thing. If we were trying to build a high-rise and hit the top of the, you know, market rents. But what we’re finding is all of these projects we’re excited about our bases or land value that we’re coming in at. And, you know, particularly with, you know, with the site that, you know, our developer was working on securing the site two years ago, so they’ve been working on it for a while.

And similarly, you know, our project in Phoenix is an infill site in a suburb with high barriers to entry, and because, you know, in that Avondale market, they’re actually more difficult through the approval process. So I think, you know, it’s important to go into and look at the submarkets instead of kind of whole cloth saying, you know, “This location or this whole market is going to be, the values are down.” And so I would say that’s my first comment.

But then secondly what I would say, what’s happening in the for-sale multi-family with folks having difficulty buying just creates more demand in the rental, and particularly the build-to-rent. And so what you have is just a situation where like the more difficult it is for someone to buy a house, the better it is for the build-to-rent market. And so that creates a demand. And then one would say, W”ell, what happens if, you know, there’s all these houses go into the rental pool?”

And that’s where, you know, number one, we’re very, very confident with our basis. Number two, this is a purpose-built, built-to-rent community. And so you’re not gonna deal with a one-off here, and absent owners, and no amenities. And so that’s, you know, what really sets us apart in Phoenix in particular, and then with Austin it’s similarly, you know, we’re hitting rents that are not at the top of the market. And we’re excited about the basis that we’re coming in on, and we’re coming in at a basis, you know, that was again contracted several years ago.

And so, again, you know, if we were talking about a downtown Austin, high-rise multi-family, I think that would be a different story. And so we’re very confident about the job growth in these areas. And we also think hitting at that you know, class A, but not the highest end is really a terrific price point to be in at this time in the cycle.

Jimmy: Great answer there. Gregory just asked another question. How do you deal with an early asset sale in an OZ deal? You mentioned that you’ve had one of those. Does that screw up the 10-year clock, or what’s your solution there?

Jill: Do you wanna…?

Leo: Yeah, so basically what you do is our fund, our QOF that it invested in this QOZB development in Seattle, the sponsor, and Pinnacle got approached selling at a very high price right during COVID. So the business plan was to hold for 10 years, but we got a number that was so impactful that we went back to our investors and said, you know, “We think this makes sense, you know, what do you think?” And so we went for a vote and basically what you do is you can return the funds that you invested in the QOF back, the QOF basically would come back to Pinnacle, and then we can reinvest into another QOZB. And that’s what we did.

So your initial investment, that was a 10-year investment. We were two years into our investment period. Now, we have eight years that we can invest into a new project or longer. So that’s what we did. So your new gains, you can also invest, you know. So our investors had a 30% return on their initial investment over that two-year period. So that is a new gain to invest, but the original gains, they reinvest through our QOF

Jimmy: And then there’s just eight years left on that one.

Leo: Eight years or longer, right. So you don’t have to invest for 10 years exactly or, you know, you could choose to take your profits and pay the whole tax. I think 1 out of 30 investors did that because he was basically moving and building a home somewhere. But, yeah, so it’s pretty impactful. But again, that was an anomaly, you know, having somebody really came to us early days before the building was finished

Jill: And I think, you know, the business plan, these are long-term holds. But at the same time, you know, we’re economically rational. That’s why we have a very seasoned board, an investor advisory board, which makes us also unique. We have our board of directors, which Leo outlined, that is, you know, our advisory board. But then we also have an investor advisory board, which is very unique where we empower our investors who’ve invested a significant amount of capital into the fund to really provide feedback on the fund. And so, you know, I think we wouldn’t be good fiduciaries if someone, you know, gave us year 10 price in year 2 if we didn’t go to investors about that. So I think that was the reason behind that.

Jimmy: Good. We’ve got time for one or two quick questions here before I’ll cut you loose. One person asked, do the principles of Pinnacle have any of their own capital invested in your deals?

Leo: Absolutely. Pinnacle and our advisory, we all have significant gains and nongains, frankly. Again, I’ve invested a lot of nongains in our project. I wish I had more capital gains this last year. But, yes, we’ve invested in virtually every one of our projects and in fund.

Jimmy: Good. And let’s see, I think maybe one or two more questions here. Are there any early cash-out availability for investors who decide they don’t want to go the entire 10-year hold term, something comes up, a life event, and they want some of their money back? Is there an option for them to get that money back?

Jill: I don’t think… Really all of these funds, all of these deals that we’re investing in are designed to refinance and distribute some level of proceeds. Because I would say in addition to the life event, there’s the tax event. And as Leo described with opportunities and investments, you have taxes that are due in tax year 2026 or April of 2027. And so our investors really need and would like a distribution to prepare for paying those taxes. And so these deals are really designed with that in mind and that’s what we’re endeavoring to do. And so, you know, if that’s a situation for someone, you know, it’s something that we can talk with them about and go through. But I would just, I think, make the point that, you know, these are all designed for us to refinance out our construction loan, have a debt finance distribution, and then they’re also designed to have cash flow distribution. So all of us would like distributions through the life of the project. And so, you know, that’s also how they’re, you know, once the buildings are built and we put permanent financing on for there to be cash flow distributions.

Jimmy: Excellent. Oh, go ahead, Leo.

Leo: I was gonna say, yeah, so we’ve heard that question from several folks before and you have to look at these as a 10-year investment and that’s the, you know, the knock on OZ, the benefit of OZ is for some people, it’s not for everybody, right? So some people maybe don’t wanna lock up their investment for 10 years and, you know, maybe there’ll be a secondary market for these investments at some point. But I think you have to go into this looking at it as a 10-year investment. As Jill said, you know, the business plan is to return as much as we can at stabilization plus cash flow, but it is a 10-year investment.

Jill: And I would just leave with this point, which is the reason I lean into opportunity zones is because I think this is a once-in-a-generation tax incentive and, you know, in order to maximize the benefits, it’s a 10-year hold. But it’s really the only opportunity to exit from an investment and get all of the appreciation tax-free. And so that’s something just, you know, to keep in mind as one thinks about that, you know, investing some bit of long-term capital and the availability of long-term capital, that might be something to consider.

Jimmy: Good points. All good points. Well, we’ve run out of time, but Leo, Jill, thank you so much.

Jill: Thank you.

Jimmy: Pinnacle Partners, our title partner on today’s event, really appreciate you being here.