Good day and welcome to the CBL Properties Second Quarter Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Katie Reinsmidt. Please go ahead..

Thank you and good morning. Joining me today are Stephen Lebovitz, CEO; and Farzana Khaleel, Executive Vice President and CFO.This conference call contains forward-looking statements within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties.

Future events and actual results, financial and otherwise, may differ materially.

We direct you to the company's various filings with the SEC for a detailed discussion of these risks.A reconciliation of supplemental non-GAAP financial measures to the comparable GAAP financial measures was included in yesterday's earnings release and supplemental that will be furnished on Form 8-K and is available in the Invest section of the website at cblproperties.com.This call is being limited to one hour.

In order to provide time for everyone to ask questions, we ask that each speaker limit their questions to two and then return to queue to ask additional questions. If you have questions that were not answered during today's call, please reach out to me following the conclusion.I will now turn it over to Stephen..

Thank you, Katie, and good morning, everyone. As we have said, our major strategic priorities at CBL are to stabilize our operating results and execute on our redevelopment program.

We are transforming our properties from apparel based traditional and closed malls to market dominant suburban town centers with a more diverse tenant base.Our second quarter results showed important progress towards these goals.

Most importantly, we are maintaining our same-center NOI guidance for the year despite the ongoing pressure on income from retailer restructurings. This is a credit to the hard work by the CBL team to creatively find new sources of revenue to offset unbudgeted losses.

Despite the challenges that have come our way, I am proud of this resilience and determination to keep our company strong and successful.We also showed encouraging progress on key metrics during the second quarter with a strong sales increase and improved lease spreads.

And we are making great progress on our redevelopment program while utilizing our capital efficiently and productively. The primary funding source for this redevelopment program is our significant free cash flow of over $200 million.As outlined in our earnings release, adjusted FFO per share for the quarter was $0.34.

While operational performance continues to be in line with expectations, we are adjusting FFO guidance for the year.

This is primarily due to dilution from recently completed and announced dispositions which were not included in guidance and a lower expectation for outparcel sales gains.The lower anticipated gain on outparcel sales is partially due to completing more ground lease pad deals versus sales as well the shift in timing of certain sales to 2020.Portfolio Same-center NOI was down 5.7% for the quarter and 5.3% for the year, which is better than our current annual guidance range.

However, we anticipate the back half of the year to trend lower as we experienced a full income loss from 2019 bankruptcy related store closures.As a result of these same closures, we experienced an expected sequential decline in mall occupancy of 130 basis points.

Sales for the second quarter generated a healthy 4% increase bringing our rolling 12 months sales to $381 per square foot. This is an encouraging trend as we head into the back-to-school season.We've been active on the transaction front continuing to take advantage when we see opportunities to raise attractively priced capital from non-core assets.

Year-to-date we have close or announced approximately $145 million in gross asset sales, which is an additional source of liquidity and supplement to our free cash flow available for investing.Since our last reporting, we completed the sale of The Courtyard by Marriott Hotel at Pearland Town Center for $15.1 million.

The Shoppes at Hickory Point which is a multi-tenanted outbuilding at Hickory Point mall in Forsyth, Illinois for $2.4 million.

An office building in Chesapeake Virginia for $10.5 million and The Forum at Grandview, a community center in Madison, Mississippi for $31,750,000 .We have also reached an agreement for the sale of a 25% interest in The Outlet Shoppes at El Paso to our existing JV partner for $27.7 million including the assumption of debt.

Each partner will own 50% after the transaction is finalized.

We are utilizing disposition proceeds along with free cash flow to fund our redevelopment efforts and reduce overall leverage.With the 40 anchored closures we've recently experienced, it's critical that replacements are in place as soon as possible to stabilize the properties and reverse negative revenue trends.

Listed in the earnings release and supplemental, you'll see, we have two dozen locations spoken for with tenants either open under construction or committed.

Each of these projects is unique, and involves a thorough analysis of its market to determine the most meaningful redevelopment strategy.Our success speaks to the creativity of our redevelopment leasing teams, the strength of our locations, and the multiple ways to capture value from our real estate.

We are also focused on adding mixed use components to these projects as we diversify and energize our assets offerings to drive new traffic and sales.Overall, 86% of new mall leasing and 64% of our total mall leasing this year has been non apparel, reflecting this focus.

We are currently under construction, have agreements executed, or are in active negotiation on three multifamily projects, 14 entertainment operators, including two casinos, nine hotels, 35 restaurants, four fitness centers, six medical uses, two self-storage facilities, two grocers and a number of other non-retail uses.

Where possible, we are minimizing the required investments in redevelopments through pad sales, ground leases or joint venture structures.This allows us to stretch our dollars as we transform our properties. We have more than a dozen anchor replacements in our pipeline, where our required investment is under $5 five million.

There are numerous accretive uses for cash across our capital structure. However, we believe, that maintaining maximum liquidity to operate our business and fund redevelopments should remain our priority.As I mentioned last quarter, we are also working proactively to manage G&A.

We have reduced salary and bonus amounts for executives and officers, and have taken steps to achieve other cost efficiencies. Unfortunately savings today have been offset with higher legal expense due to ongoing litigation.During the quarter, a number of shareholder and derivative lawsuits were filed.

Shareholder law -- shareholder suits have been consolidated into one suit. We believe they are without merit and will defend ourselves including seeking dismissal.

We also maintain insurance coverage for these types of suits and have put our carriers on notice.Finally, as we indicated in March, we will be reviewing our 2020 taxable income projections in the fourth quarter to determine the dividend level for next year.I will now turn the call over to Katie to discuss our operating results and investment activity..

Thank you, Stephen. As the results indicate, we had a productive quarter in many respects.

Our leasing team completed almost 775,000 square feet of total leasing activity, including 451,000 square feet of new leasing and 257,000 square feet of renewals.On a comparable same-space basis for the second quarter, we signed over 410,000 square feet of new and renewal leases at an average gross rent decline of 3.3%.

Spreads on new leases for stabilized malls declined 1.4% and renewal leases were signed at an average of 4.2% lower than the expiring rents. This quarter's results demonstrate a significant improvement from recent past quarters.

While this is encouraging, we maintain a cautious expectation for the remainder of the year given the challenging retail environment.As anticipated, same center mall occupancy bore the brunt of Q2 retail bankruptcy closures, resulting in a 130 basis point decline from second quarter last year to 88.1%.

Portfolio occupancy declined 90 basis points, to 90.2% offset by occupancy improvements and community centers.Bankruptcy related store closures reduced second quarter mall occupancy by approximately 320 basis points or 570,000 square feet including closures from Payless, Gymboree and Charlotte Russe.In May, Ascena announced that they were shutting down the Dress Barn Chains.

We anticipate closures to occur at year-end for our 12 locations. Charming Charlie filed for bankruptcy in July, and is expected to liquidate their store base during the third quarter.

We have 11 locations representing 85,000 square feet and $900,000 in annual gross rent.Same center sales for the quarter increased 4.1% bringing the trailing 12-months sales to $381 per square foot compared with $378 for the prior year.

Sales were positive for all three months, which is encouraging leading into the back-to-school season.Categories that performed well included fast casual dining, electronics, children's and family shoes, cosmetics and wellness.

We're making great progress replacing vacant anchors with two dozen locations committed, including eight already open another six set to open later this year.Beyond this, we have active negotiations or LOIs for several others.

Our properties are not only the favorite shopping destination in their markets, but are becoming the go-to-place for entertainment, dining, service, lodging and more.Consistent with prior quarters, we provided a full schedule of the Sears and BonTon locations in our portfolio in the supplemental.

I'll walk through several of the major projects as well as recent openings.At Friendly Center in Greensboro, North Carolina a new 27,000 square foot O2 fitness replaced a former freestanding restaurant. We also celebrated the opening of Dave & Buster's at Hanes Mall in Winston-Salem in May.

The new location opened in former shop space near the Sears wing. We recently started construction on a joint venture self-storage facility on a parcel outside the ring road at Parkdale mall in Beaumont Texas. This project is a similar structure to our previous storage projects and that we contributed the land with our equity.

The opening is expected in early 2020.At Mall Del Norte in Laredo, Texas, we are downsizing Forever 21 and opening entertainment user main event in early 2020.

Earlier this year, we replaced an apparel junior department store with [To Fit] [ph].In the fall, we'll celebrate the grand opening of the redeveloped Sears at Brookfield Square in Milwaukee, Wisconsin. The first phase of the project includes the new Movie Tavern by Marcus Theatres, WhirlyBall entertainment center and Outback Steakhouse.

Uncle Julio's has already opened on a pad in the former Sears parking lot and construction has commenced on the new city owned hotel and convention center, which will connect to our center through a landscaped walkway.We are also adding a boutique fitness studio and medical office as part of the redevelopment.

Construction is progressing on the Sears redevelopment at Hamilton Place here in Chattanooga. The project includes Dave & Buster's, A Lost Hotel, Dick's Sporting Goods, additional restaurants and. office space, all joining Cheesecake Factory, which opened last December.

The hotel is being developed in a joint venture with a well-regarded local operator. We will contribute land as our portion of the equity, which allows us to realize value from our assets and to share in future upside. We have two casinos that will replace vacant anchor locations at malls in Pennsylvania.

We executed a lease with Penn National to add a casino in the former Sears, at York Galleria and York Pennsylvania. At Westmoreland Mall, we have a new stadium live casino taking the former band town location.Regulatory approvals are underway for both, and we expect construction to begin later this year with openings anticipated in 2020.

At Dakota Square Mall in Minot, North Dakota we commence construction on a new Ross Dress for Less, which is taking a portion of the former Herbergers location. Opening is anticipated later this year.At our 50/50 joint venture property, Kentucky Oaks in Paducah, Kentucky, Burlington and Ross opened in the Seritage owned former Sears.

Home Goods is opening later this year to replace a portion of the former Elder-Beerman store with additional value retailers under negotiation.Entertainment operator Tilt is under construction in the former series location at CherryVale Mall in Rockford, Illinois. We lost both Bon-Ton and Sears at this property.

The Bon-Ton was replaced with Choice Home Center, which opened in late 2018 until it is expected to open in early 2020.

These replacements required minimal investment.In addition to the anchor activity and redevelopments and replacements that I've just walked through, we have a lot of activity in LOI negotiation stages and we'll make announcements as deals progress.I’ll now turn the call over to Farzana to discuss our financial results..

Thank you, Katie. We continue to be focused on our key financial goals of maintaining free cash flow. Supplementing our liquidity with other sources such as non-core dispositions and reducing leverage. We are pleased that we have addressed our major loan maturities for 2019.

We have a $4.5 million loan secured by the second phase of our Atlanta outlet center, that we anticipate refinancing prior to yearend.We also have two secured loans that mature in December, Greensboro Mall and Hickory Point.

These loans were previously restructured and we are in discussions with the lender with the lenders to determine the next step.As a result of this progress, we have turned our attention to secured, non-recourse loans that mature in 2020.

Refinancing discussions are preliminary, but most of these properties have high debt yields and strong positions in their markets.While the secured financing market is selective, we have several available avenues that we are exploring to address these maturities. Our total pro rata share of debt at the end of June 2019 was $4.4 billion.

We have reduced our debt levels by $64 million sequentially and $329 million from June 2018. At the end of the second quarter, we had $302 million available to draw on our lines of credit.Second quarter adjusted FFO per share was $0.34 representing a decline of $0.12 per share compared with $0.46 for the second quarter 2018.

Factors that contributed to the variance included lower property level NOI of $0.05 per share, $0.02 lower gains on our partial sales and $0.02 per share of dilution from asset sales.G&A for the current quarter included approximately $0.01 per share in legal expense -- legal fees for litigation expense.

Second quarter same-center NOI decreased 5.7% and same-center NOI for the six month declined 5.3%.During the quarter, we recognized an $8.6 million impairment on the sale of the Forum at Grandview and a $33.3 million impairment on Eastgate Mall in Cincinnati, Ohio.

This Tier 3 Mall has been impacted by a number of tenant bankruptcies, and we are projecting a significant future decline in NOI for the property.The mall is encumbered by $33.2 million nonrecourse mortgage loan, that matures in April 2021.

The decline in NOI coupled with the likely shortened whole period has necessitated the impairment.As we announced in our earnings release yesterday, we are revising adjusted FFO guidance for full year 2019 to incorporate $0.04 per share dilution from recent, closed or announced disposition as well as approximately $0.06 per share lower expectation for gains on our partial sales.We have also included a penny of higher G&A expense related to litigation for the year, much of which has both – has been booked in the second quarter.

As a result, we are providing updated adjusted FFO first year guidance in the range of $1.30 to $1.35 per share which continues to assume that same-center NOI decline in the range of 6.25% to seven and three quarters percent.Guidance continues to incorporate a reserve in the range of $5 million to $15 million.

As a reminder, this reserve is used to take into consideration the impact of unbudgeted bankruptcy, store closures, rent reductions, and co-tenancy that may occur.Incorporating the recent filings from Charming Charlie as well as other variance to budget, we are currently expecting to utilize approximately $8 million to $10 million of the reserves.

We will update our expected reserve usage each quarter.I'll not turn the call over to Stephen for concluding remarks..

Thank you Farzana. As I said in my intro remarks, we are focused on our major goals of stabilizing income and redeveloping vacant anchors.

Our industry is transforming and we are adapting to maintain our property's market dominance status.I can assure you that the entire CBL organization including the executive team, home office staff and property teams is all in to accomplish these goals.

We believe in our strategy, our properties and our company, and while we wish results for more immediate. We are on the right track and are confident we will see the benefits from these leasing operational and redevelopment efforts in the near term.Thank you for your time today. We will now open the call to questions..

We will now begin the question answer session. [Operator Instructions] And the first question is from the line of Christy McElroy of Citi. Please go ahead..

Hi. Good morning everyone.

Just with regard to your assumptions around backfilling the vacant shop space that's been impacted by bankruptcies earlier in the year what are your assumptions for that space retenanted by year-end to be shorter term leases or temp space versus permanent longer term leases? And where are you right now in terms of the percentage of leasing that needs to be done for 2019?.

Christy, we're early in the process. I mean most of the stores Gymboree, Payless, all of those closed in the second quarter. So we just got the space back. We have started working on temporary users to fill that space and should have some of it filled by year end, but the majority of the leasing to backfill that will be completed in 2020.

So it's a little bit early in the process,.

Okay. And then, we've heard that Forever 21 is working with some other malls landlords on closures and downsizing and rent relief.

I'm wondering your expectations with regard to your 19 stores if there's anything currently built into that 8 million to 10 million that you expect to use of the reserve? Or would anything sort of happening with that retailer be incremental to that?.

Yes. Sure. I mean Forever 21 there have been reports about them having conversations. I can't comment on specifics regarding that. But the reports are out there. And we have, I'd say a small amount built in to the reserve for Forever 21 based on what we know. But there's still a lot of uncertainty out there as far as what's going to happen with them.

And so we're watching it closely. We're talking to them. And as soon as we know something we would definitely let everyone know..

Okay. Thank you..

Thanks, Christy..

The next question is from the line of Craig Schmidt of Bank of America. Please go ahead..

Thank you. You had mentioned that there was potential for some future mixed use densifications.

I wonder if that would come out of the 24 anchor replacement pool or is this is another pool altogether?.

So we're doing -- we're actually doing that as part of several of the projects. I wouldn't say it’s vertical densification, it's not. Our locations are mostly suburban, and -- but we are getting a lot more productivity out of the parking lots than we had in the past, the project at Brookfield Square that's under construction.

We [sold] [ph] land to the city to build a convention center hotel, and that was former Sears parking. We also created a couple restaurants outparcels in form or parking. And we have interest from -- we're doing medical office as part of it. We're doing fitness.

And we have other interests from mix use that we're considering.Another part of that project we did in education use to replace a former supermarket. So, there's just a lot of new kinds of uses coming in here in Chattanooga and the Hamilton Place project.

We're doing a hotel really right adjacent to the front entrance to the mall between where we built a new Cheesecake and where the new Dave & Buster's is going. We have other outparcels we've created.

And so, everything is definitely getting -- every project we're looking at, we're looking at it as a way to maximize the productivity to identify and to create value from parking lots in every other piece of the real estate..

And with these reviews is there a lot of permitting approvals that need to be and then where do you stand on that?.

I mean we go through that everywhere. It depends on the municipality. Some are more strict than others in Madison Wisconsin. It's more of a process than it is in Chattanooga. But we go through it.

We have good relationships with cities or towns and municipalities that they want the properties to succeed; we’re large employers, we’re large taxpayers and they've gotten much more flexible over time in terms of finding ways to help out. I was talking about Brookfield Square. They bought land.

They also helped us with the tax [increment] [ph] and financing. So they're our partner and they are our ally, not an adversary as part of this process..

Thank you..

Thanks Craig..

The next question is from the line of Caitlin Burrows of Goldman Sachs. Please go ahead..

Hi. Good morning team. Steven, in your initial prepared remarks I think you mentioned that you were exploring or moving forward with some creative sources of revenue to offset some other losses.

So I was wondering if you could give us any examples that you might have had in mind when you made that comment?.

Sure. Well, we're -- I mean we have revenue, I think as Katie mentioned a lot of the bankruptcies have happened in the second quarter. And so we do a lot with our specialty leasing what we call business development which is a common area, advertising and other sources of revenue.

And those are the main areas and there's a lot of local boutiques, a lot of other types of non retail users that have come in and that are occupying the space on a short term basis through the holidays. We've looked at expenses and how to manage that as closely as possible.So, it's taking -- it's just taking a different approach to our leasing.

And a lot of our national leasing is done on a portfolio basis. And a lot of our leasing staff is out there scouring and looking for locals and regionals and non retail uses and we're working closely with brokers to find any and every source of revenue..

Got it. And then just in terms of the guidance adjustment some of it was due to fewer outparcel gains for more ground leases versus sales. So I was wondering if you could go through the decision to do ground leases versus sales.

Kind of what the impact is to CBL longer term maybe in ownership or NOI retention or something else?.

Yes. I'll take that question. We are seeing tremendous opportunity in converting -- taking our vacant outparcels and ground leasing it versus selling it. And ground leasing as you know long term provides stable income for us. And also the valuation for those ground leases is pretty strong, low cap rates.

So we are opting for more ground leases versus selling it directly. Now in many cases users who may want to buy it because they would prefer owning the land and the building so in those cases we are certainly selling it because it does bring those diverse uses to our property.

That's really the main reason for us shifting our process or our strategy to ground leasing more and more. And also you know that will bring us the diversity not only diversity but cash flow and valuation are strong..

Got it. Thanks..

Thank you..

The next question is from the line of Richard Hill at Morgan Stanley. Please go ahead..

Hey. Good morning guys. Wanted to maybe just drill down Eastgate, just thinking about your portfolio overall. I was a little bit surprised to see the writedown debt yield looks high. You've talked about adding storage to it in the past. You've added some. You bought back boxes there before.

While I appreciate the prepared remarks I guess I have two questions. How fast when a property turns like it seems like Eastgate Mall is.

How fast can NOI decline? And what gives you confidence that Eastgate is different than maybe other properties where you're doing similar mix use developments or buying back boxes?.

Hi, Rich. Eastgate is just -- the main -- one of the big reasons is that maturity is coming around the corner. And then we did evaluate the net operating income and there's not only just a decline in net operating income from bank tenants, we also see potentially -- we do have boxes. Yes, I mean, you're right.

We did do a self-storage at Eastgate, but that's not part of the collateral. So you have to look at the collateral alone and evaluate what's going to happen to that NOI as a collateral. So that's one of the main reasons. The NOI has seen a big decline.

And the whole period is now shortened.So we have to evaluate from a GAAP basis what's the whole period. What's the probability this property maybe returned to the lender, and not necessarily, but we also evaluate a restructure proposal. So the combination of the two will determine what the future value will be. So, we have to conduct an appraisal.

And when you conduct an appraisal that future value gives us a fair value, tells us in comparison to your book value whether you have an impairment or not. So that's the reason we took the impairment this quarter.

And we evaluate our properties all along whether it is ongoing strong property or whether a property has all the deterioration of income that we are seeing we evaluate every one of those. But the future cash flow at Eastgate Mall is what drove this decision to take an impairment..

Got it. So, I think I understand that primarily driven by a forthcoming loan maturity. It sounds like hindsight being 2020. You probably wouldn't have done the storage deal and maybe wouldn't have done or bought back to the box.

So what I was trying to get my arms around is what -- if you're executing similar strategy that at current malls, what makes those malls different. But what we can discuss that offline. I appreciate the color on Eastgate..

Yes. But just let me add that each -- the development of the self-storage is a standalone and there's a strong market for that. And that alone itself will give us great valuation as we monetize it in the future. So that's a good project in itself. And then if we buy back a box that's not part of the collateral.

However, the collateral that we do buy back that we believe has a strong valuation. So, we don't believe either one of those decisions were not -- they were all good – both decisions were good decisions..

Okay. Got it. Okay. Helpful. Thank you, guys..

The next question is from the line of Michael Mueller of JPMorgan. Please go ahead..

Sorry about that. Yes.

Just wondering how is the board thinking about the dividend once you can start to pay it again in the coming months and just in terms of a level?.

So, like I said, Michael, it's really a question that we're going to address as we get closer to the end of the year when we have a better sense of taxable income and a better sense of where we're going to end up this year. So, for now we're just on hold on those discussions..

Okay. I apologize I missed that at the beginning of the call I guess.

And then is there a sense though that it would still be a cash dividend as opposed to any sort of stock component?.

All I can say is, we look at everything. We look at alternatives. And so, we would we would consider how we pay it as part of the decision of how much we pay..

Okay.

And on the year to-date dispositions can you give us a ballpark cap rate?.

Yes. I mean, my each transaction obviously had its own merits and its own cap rate. So, I would say, we're seeing good pricing on in the community centers and some of the other assets that we sold. So they were all very attractive equity to raise across the board. But we don't disclose the cap rates for dispositions..

Okay. That was it. Thank you..

Thanks..

We have a follow-up question from Caitlin Burrows of Goldman Sachs..

Hi, again. Just one in terms of the same store NOI outlook for the rest of this year. If you look at the first half it seems to have held up a little bit better than the second half expectation.

So just wondering what's driving the second half expectation at this point and to what extent is it known pieces versus general conservatism?.

I mean, we spend a lot of time evaluating where we're going to be for the rest of the year. And I mean we want to be realistic and we still are confident we'll be within the range.

But yes, we're negative five and a half or five three year to-date, so we're going to see weaker performance in third and fourth quarter because these bankruptcies are going to kick in for the full year. But we are confident that we'll be within the range that we gave guidance and its all sources.

I mean, it's everything across the board from the renewal activity and the lease spreads which were which were better. And that's helped for sure.Sales being up, helps in terms of percentage rent projections. And there is a lot of leasing going on. We tend to get bogged down with the negatives and the bankruptcies.

But there's a lot of leasing going on whether it's the non-retail or it’s a non-apparel or categories that are performing strongly. And there are plenty of those. And we're doing we're doing good new leasing with retailers and users that we feel like are going to be successful long term..

Got it. And actually maybe since you did bring it up on the leasing spread side. Yes, it looks like there was an improvement in that this quarter. So I guess do you -- I guess think that's sustainable? Or you see that continuing, perhaps, it was just related to the leases in the quarter? Any other commentary on that..

Yes. I mean, it's always hard one quarter. I mean typically the first quarter we have the most renewals. So our overall spreads are impacted by that. And the strength of that and this year for sure with portfolio deals and the kind of weaker retail climate that was tough I mean, this quarter didn't have as large of a sample.

I think we're just going to be cautious towards the rest of the year and see and we hope that it'll stay in the range it is. We've said we want to be kind of in the negative single digits as opposed to -- so we're kind of hopefully going to stay in that range.

I'm not sure it'll be as good as this quarter, but hopefully it'll be better than what we saw in the first quarter and what we saw last year..

Got it. Okay. Thanks..

Thank you, Caitlin..

The next question is from the line of Linda Tsai of Barclays. Please go ahead..

Hi.

Could you comment on the 1.3% year-over-year growth in sales productivity? You're up to 381 [ph] just from flushing out tenants with lower sales productivity out of the current period?.

No. I mean, that's part of it. But we did see some gains and there are some categories and some retailers that are really important to us that are helping out. And I did look at the sales report. Foot Locker is always a strong trend. Bath & Body, White Barn Candle is doing well.

American Eagle, Vans who's growing in our portfolio, Chick-fil-A and some of the fast casual. So, we've got some really strong performers across the portfolio and that's showing up. And then some of the categories that were weak. Some of these senior brands have definitely seen some progress, especially Ann Taylor and Loft and so that's good.

And some of the users that were down more even in Ascena like Justice or having better performance. So, I mean, we're seeing I'd say some good improvement. It's not just addition by subtraction where we lose some of the retailers that have gone – that have closed stores..

So it's fair to say that it's coming largely from organic growth. That's what you're saying..

That's correct. And it was stronger for the quarter than it was – second quarter stronger than first quarter which is a good sign as we heading to the second half of the year..

Yes.

And then could you comment on then on the average sales productivity of the tenants that have gone away in your portfolio on a year to-date basis?.

I mean, it's hard to say. I mean, to generalize, I mean a lot of them were -- things remembered were smaller spaces and their productivity wasn't bad.

A lot of that bankruptcy is driven more by their balance sheets versus their sales performance, and so you know I can't give you the exact statistics but it wasn't really something that that impacted our overall sales results..

Thanks for that..

Thank you..

This concludes our question and session. I would like to turn the conference back over to Stephen Lebovitz for any closing remarks..

Sure. Thank you everyone for participating today. Hope you have a good rest this summer and we'll look forward to discussions with you as we met -- we continue to make progress on our strategy. Thank you..

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect..