Good morning. My name is Jeff [ph], and I will be your conference operator today. At this time, I would like to welcome everyone to the First Industrial Third Quarter Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

[Operator Instructions] Thank you. Art Hartmon, Vice President of Investor Relations, you may begin your conference, sir..

Thanks, a lot Jeff [ph]. Hello everyone and welcome to our call. Before we discuss our third quarter 2017 results, let me remind everyone that call may include forward-looking statements as defined by Federal Securities Laws. These statements are based on management's expectations, plans and estimates of our prospects.

Today's statements may be time sensitive and accurate only as of today's date, Thursday, October 26, 2017. We assume no obligation to update our statements or the other information we provide.

Actual results may differ materially from our forward-looking statements, and factors which could cause this are described in our Form 10-K and other SEC filings. You can find a reconciliation of non-GAAP financial measures discussed in today's call in our supplemental report and our earnings release.

The supplement report, earnings release and our SEC filings are available at firstindustrial.com, under the Investors tab. Our call will begin with remarks by Peter Baccile, our President and Chief Executive Officer; and Scott Musil, our CFO, after which we will open it up for your questions.

Also on our call today are Jojo Yap, our Chief Investment Officer; Peter Schultz, Executive Vice President; Chris Schneider, Senior Vice President of Operations and Bob Walter, Senior Vice President of Capital Markets and Asset Management. Now let me turn the call over to Peter..

Thanks Art. And thank you all for joining us today. The First Industrial team delivered an excellent third quarter. We grew occupancy to 97.2%, up 150 basis points, compared to the second quarter. Cash rental rates were up 9.5% overall and cash same-store NOI growth for the quarter was 3.7%. Scott will discuss these metrics in more detail shortly.

I'd like to thank all of my teammates around the country for their continuing contributions to our strong results. Looking at the overall market environment the supply demand equation continues to strongly favor the landlord.

Demand exceeded new supply in the third quarter, bringing year-to-date net absorption of 157 million square feet, versus 144 million square feet of completions according to CBRE Econometric Advisors. It is interesting to note that net absorption has already reached the volume they forecasted for the entire year.

This environment suits our strategy of primarily investing through targeted, speculative development and we're excited to discuss several new projects we have started since our last call Following our successful building and ground leads to UPS in Phoenix at First Park @ PV 303, we've now broken ground on our second building.

It will be 640,000 square feet and future [indiscernible] clear heights. Completion is slated for the second quarter of 2018. Total estimated investment is $35.8 million and our expected GAAP yield is 7.9%. In Pennsylvania, we commenced development of First Logistics Center @ I-78/81 on a site we acquired during the quarter.

There we are building a 739,000 square foot cross-dock distribution center with 40 foot clear that we expect to complete in the fourth quarter of 2018. Total investment for this building is expected to be $48.9 million and our projected GAAP yield is 6.8%.

The site plan allows for a second building of 250,000 square feet, or we can provide access, trailer and car parking as an amenity for a prospective tenant at building one. In the I80 market of Chicago, we launch development First Joliet Logistics Center, a 355,000 square foot facility that we expect to complete in the second quarter of 2018.

Total investment is $21.2 million with an estimated GAAP yield of 7.1%. As of today our completed and in process speculative developments total $242 million comprising 3.5 million square feet for the targeted weighted average GAAP yield of 7.1%.

Also on the new investment front, we acquired three high quality buildings totalling 471,000 square feet for $52 million. Let me briefly describe these assets. In the third quarter we acquired Pompano Business Center a 172,000 square foot facility in the Miami market for $22.7 million. The building is 89% occupied by three tenants.

We project a stabilized cap rate of 7.4%. Also in the third quarter in New Jersey we acquired a recently completed 213,000 square foot distribution center at exit seven for $20.9 million and in place cap rate of 5%.

It's one hundred percent leased on a long-term basis to a Fortune 500 company and is located near First Florence Logistics Center that we developed and leased up last year.

In the fourth quarter to date we acquired an 86,000 square foot facility in Orlando for $8.2 million, which is located just across the street from the building we acquired in the second quarter. The asset is fully leased to two tenants and the in placed cap rate was 5.6%.

Lastly, we bought a development site in Northwest Houston for $1.3 million during the third quarter that can accommodate 126,000 square foot building. Moving on to dispositions, in the third quarter, we sold ten buildings totaling 900,000 square feet for $40.1 million.

These dispositions included six buildings in Detroit, our loan building in San Antonio, as well as properties in Cincinnati, Atlanta and Phoenix. The weighted average in place cap rate was 6.7% and the expected stabilized cap rate was 7.6%. Fourth quarter to date we have sold nine buildings for $54.1 million totaling 1.2 million square feet.

The largest of it was of a five-building portfolio in Minneapolis, totaling 846,000 square feet for $38.4 million. We also sold properties in Indianapolis, Salt Lake, Chicago and our solo asset in Alabama. These were 99% plus occupied at sale.

Year-to-date we've completed $153.4 million of sales relative to our goal of $150 million to $200 million for the year. So again we had an excellent quarter. We have several new growth opportunities that we're excited about and a continuing favorable environment. With that let me turn it over to Scott..

ending occupancy for the fourth quarter of 96.25% to 97.25%. This implies an in-service occupancy of 96.25% to 96.5% for the full year based on quarter end results, which is a slight increase at the midpoint, compared to our last earnings call. Fourth quarter same-store NOI growth on a cash basis of 2.75% to 4.25%.

This implies a quarterly average same store NOI range of approximately 4.1% to 4.5%. Our G&A guidance range is now $27 million to $28 million, an increase of $1 million at the midpoint related from an increase in our expected performance based compensation costs.

And guidance includes the anticipated 2017 costs related to our completed and under construction development at September 30. In total, for the full year 2017, we expect to capitalized about $0.03 per share of interest related to our developments.

Our guidance does not reflect the impact of any future sales, acquisitions or development after this earnings call, the impact of any future debt issuances, debt repurchases, or repayments other than our $55 million, 7.5% unsecured notes maturity that we will pay off in early December.

The impact of any future mark-to-market gain or loss in the treasury lock previously discussed. Guidance also excludes any future or any compliant gains or losses, the impact of impairments and the potential issuance of equity. With that let me turn it back over to Peter..

Thanks Scott. Before we open it up for questions, I would like to remind you about our upcoming Investor Day on November 8 in New York City. There we will dive a little deeper into the strength of our platform, and current portfolio and our vision of growth for the next few years. We will look forward to seeing many of you there.

If you have yet to RSVP and would like to attend please reach out to Art Harmon. Now let’s get on the business of answering your question. Operator would you please open up the line..

[Operator Instructions] Your first question comes from the line Craig Mailman from Keybanc. Please go ahead..

Thank you guys. Maybe Scott I know you guys aren't giving 2018 guidance till next year, but just curious if you guys look at sort of the expiration schedule. Do you have some bigger leases rolling next year? Just curious what your expectations on some of those? And also just looking at the 2018 roll.

Maybe what your expected mark-to-market is on that?.

Okay, so I would say Craig the biggest lease expirations we have next year is the Quincy lease in Easton Pennsylvania for about 1.3 million square feet I'll turn it over to Peter in a little bit to give some color on where we stand on that.

Craig as far as rental rates are concerned I tell you what we're going we’re going to give a little bit of a plug here for our Investor Day. At our Investor Day in November we're going to give you a little idea of what the renewals are looking like for 2018.

There obviously going to be a positive percentage, but we'll give you more information on that at Investor Day.\.

And Craig it’s Peter So on the Quincy Amazon lease in northeast P.A., which expires the end of March of 2018, our discussions are continuing with them. We expect to get that done. We can't tell you anything about the terms as you know that has a tight confidentiality as do all the Amazon leases.

We can’t talk about that but as I said we expect to get that done and we'll update you on that on the next call..

Do you guys have any top 20 leases expiring next year?.

Yes Craig the biggest one is the one that Peter just mentioned..

Okay. And then Scott on same-store you guys had the tag drag this quarter. It sounded like it was a catch up with some in the rears. I mean how should we think about the impact of I guess that and as we look forward to 2018.

Are you going to be able to fight the increased taxes are you guys – what you guys are pairing for on that front as you head into next year as values continue to move higher?.

Yes Craig it’s Scot we will appeal those taxes unfortunately that process sometimes takes a long time it could take over a year. But what we want to reiterate Craig, on the tax issue is that it's really a timing issue between fiscal year 2017 and 2018.

So one of these things under GAAP accounting, where we have provided for the increase in taxes in 2017. But when we paid the taxes in 2018, we will fully recover them from our tenants. So that's the same-store issue that we discussed..

It can actually be a little bit of a tailwind there? And as you get the tax flows and you pass it through?.

Well, the expenses being fully expensed this year. we're going to collect the money next year.

So really the impact next year, Craig, is going to be whether or not we have any increases in taxes in arrears, but keep in mind this 1.4% increase that we took a hit on in the third quarter on an annualized basis it's only 0.35%, again, we want to reiterate it's really a timing difference from a cash basis point of view..

Great thanks..

Your next question comes from the line of Ki Bin Kim from SunTrust. Please go ahead..

Good morning guys..

Hi Ki Bin Kim..

So if I look at your capital allocation. I just see here, you guys bought a couple million – sold a couple million, build in a four million square feet. You're improving your quality portfolio, which overtime which may be, not being fully appreciated by the market.

But when I look at your disposition activity today, you still seems like it you have like $45 a square foot type of industrial assets for sale or sold. How much more do you have in the lower tier bucket? And by the way, I know just because it’s only 25 buckets doesn’t make it bad real estate comp.

but how much more do you have that you want to sell?.

Well Ki Bin I'll comment on that, and then Jojo can add his thoughts as well.

Working on the portfolio asset management is going to be an ongoing thing, every year we're going to have assets that we own that we think that are more of the rental growth opportunity is less and we're going to want to redeploy the capital out of those assets into other assets we're leasing. The opportunity to push rents is higher.

So that's going to continue, definitely. The amounts obviously, we're not going to give guidance today on what that number or that range might be for next year, but I think generally speaking the gross magnitude of the sales is going to be within the range that you’ve seen in the last few years here. Jo do you want to add..

Sure yes. So given, I mean the pricing is really up function of the projected cash flows and at this point.

I mean the stabilized yields from these assets that we sold at 7.6%, but the cash flow yields after tenant improvements leasing [indiscernible] in CapEx is lower, because our strategy have been for the last multiple years is to push out properties that we're in two things, we can't do.

We don't think we can raise the rents as much as we can raise rents for the rest of the portfolio, plus it actually needs more CapEx to maintain. So we’re pleased with the 7.6% stabilized yield and we'll continue to do so. When we find assets that do not meet a high-growth long-term cash flow growth aspirations..

Okay.

And plus from me, I understand the pruning part and ongoing asset management, but is there still a certain markets where it would just a quality standpoint, a longer-term quality standpoint, or just age of assets or something of that nature that you still need to or want to sell off?.

Well yes, like you pointed out it’s been [indiscernible] part of our strategy, we’re 97.2% leased today, I mean we’re gaining good income from our portfolio. And so we're pleased with our portfolio is delivering. But now need to continue to make sure that we push out the lower cash flow growth assets.

And also well again, at the Investor Day we will go into a deeper dive into – in terms of what our cash flow growth prospects are on our portfolio..

And Ki Bin again. It’s really an asset-by-asset look, not a market-by-market look..

Okay, and just last question. You guys typically segment out your assets before different buckets both [indiscernible] R&D flags. Is there any typical noticeable difference where you are getting more incremental demands others for an excess comp [indiscernible]..

Ki Bin, it’s Peter Schultz. So I’ll say that demand continues to be pretty broad across the country geographies and space sizes, certainly there's been a lot of demand for logistics buildings in the larger square footage.

But if you look at our occupancy pretty much all segments have contributed to that, but certainly there's better demand for our larger buildings today in general..

Our statistics is also resulted primarily because of our infield portfolio given..

Alright, thank you..

[Operator Instructions] The next question comes from Eric Frankel with Green Street Advisors. Your line is open..

Thank you. Scott, can you just explain the real estate tax in arrears again.

One, isn't – aren't these expenses just reimbursed by the tenants generally?.

Yes I mean the estate taxes are recovered from our tenants, Eric, on a cash basis, okay? So whatever we pay in that fiscal year we recover from the tenants. When you pay taxes on arrears there's basically a year difference in that timing.

So what we have to do in 2017 is estimate what the taxes are going to be paid in 2018 and we had two markets, where there was a sizable increase in those real estate taxes. But again, I think the key point on it is when we pay those taxes next year those increases we're going to fully recover those increases from our tenants.

So this is really a timing between 2017 and 2018..

Okay, that's helpful. And then just to clarify guidance, I think its [indiscernible] your same-store NOI growth guidance for the year. I think it applies a low-3% growth in the fourth quarter.

And I don't want say you might be living up here nickname, but there's a possibility of it just based on the fact that rent growth seems to be pretty good given the portfolio. companies..

It's the legacy that Bruce left behind. We are going to be – if you look at midpoint fourth quarter, it's 3.5 percentage and again bad debt expense we've got $625,000 in there for the fourth quarter. We had about $50,000 in this third quarter of 2017.

So if we have the same results, we should be able to pick up 90 basis points so that we push this to about 4.4%. But again bad debt is hard to forecast because things happen as times go on. But that could be a potential upside for us Eric..

Is there any consideration of modifying your bad debt assumptions as your portfolio evolves?.

So what we’ve done on that is – our methodology is we look at the history of bad debt expense as a percentage of revenue and we've got these statistics going back to 1994, 1995. And We basically use that average basis point implied against revenues.

So my guess is as we continue to have lower bad debt expense that percentage will go down and as a result of our assumption will go down. But we're trying to make a macro assumption on it. When we give guidance for fourth quarter and the first quarter it’s hard to see what could happen with your tenants at that point..

Okay, I’ll turn back in the queue. Thanks..

Your next question comes from Dave Rodgers with Baird. Your line is open..

Hey good morning guys. Scott, just a follow-up on the same-store NOI. You on the top end of the guidance now 50 basis points or so.

It seems like a lot of taxes, were there any other reason to pull that top end down?.

I think, David, just have to do that with the fact that we only have one quarter left at this point in time. So there really you can't really have that much fluctuation at this point..

Got you.

And then Scott or Peter on the leasing cost of course they were kind of above trend I don't know if there's anything unique or interesting in there? Or are you just seeing general push higher or is there something worth discussing?.

Hey David, it’s Chris. It really has to do it just for the mix of the new versus renewal leasing. So the new leasing is a higher percentage you have typically have new leasing right around $5 a square foot. And renewal deals were about $1.25 per square foot. So it's really the mix.

If you look at overall year-to-date, our blended costs are below $2 a foot at $1.84. So it really gets back to the mix..

Are you seeing a meaningful difference if you took those two separately, newer renewals?.

Yes my comment there is on the new deals are closer to $5 a square foot. On renewal deals $1.25 so again if you have a higher percentage of renewals your that blended cost is going to be down..

I'll may be ask it a bit differently, as moving dramatically higher, those leasing costs?.

No, not really. I mean we – it actually – in this market – the [indiscernible] market we kind of push back on the TI allowances that we're giving. So if anything's there, the costs are going down..

Okay that’s helpful. And then may be for Peter, or may be for Joe. Joe acquisition deals continue to come down. You guys continue to be pretty aggressive buyers, I think. What's your feeling kind of where our returns are? I think you are still achieving kind of the returns you want to get and then you've gotten more aggressive.

So what’s gotten you more comfortable putting that money to work this year versus last at lower yield..

Sure Dave, I mean acquisitions have been the yields have coming down because markets have been more competitive. And so there's no news to anyone. So again, we are pleased with our acquisitions the land view of the bolt on, Miami severity land constraints.

So we like the higher rate of growth rate of those rents there and absolutely, X 7, quality, quality, closed up in South Jersey close to our first Lawrence that's a great one-off. As you still see though, Dave, our – the majority of our investments continues to be development and there we’re very, very pleased with the overall 7.1% expected return.

If you put in development is quite conservative, developments on construction, and basically, all of that. And because that will provide a lot of the shareholder return. We're not sellers of those, but values of those properties should be high for us to five and so you can just compete the margin on those developments. So we're pleased for that.

Going forward, you know we'll continue our – plan way of a plan putting out there. we're going to continue to look for areas where we can serve unmet demand and build. And so when we get to those projects we'll let you know..

Great. Thanks guys..

Your next question comes from John Guinee with Stifel. Your line is open..

Great, thank you. Looks like you're buying about $60 million for land a year. And you may be got a $100 million historic inventory. Are you able to monetize any of your historic inventory, land? And how should we think of that value? And then how quickly are you putting your recent land purchases into development..

Sure, John this is Jojo. Yes we have historically been able we've been always been in the $100 million $20 million dollar gains of land. We've been recycling those.

As the most recent example of how we've put recent land acquisitions service about roughly 50 square footage of total investment of what we want and what we've put in service just this quarter is about seventy 70%. And that's basically the first I78 I81 logistic center plus the first Juliet logistic center.

So we've basically put into production 70 odd percent. Of course a number our sites that we buy need continuous design. And work to be done in order to put it into production. But those were kind of leased on how we produced this amount of development and have not really significant inflated or landing.

And our goal still is to not John is not to just acquire long-term land. Our preference really is to buy immediately developable land..

Most of the land that we have John we acquired in the last two plus and minus years. So we are really trying to stick putting this land to good yields in a short period of time..

And also it is only thing I want to add is that historically when we find land of higher and better use of a potentially lower returns so we can monetize and take opportunistically, we did that. So if you look at from 2010, 2011, we sold about $76 million of our land..

Okay. And if you think about land, cost and the cost to get it entitled and the proper and all that sort of thing.

If you look at 2 or 3 years ago to today what are the things that happened to land pricing in various markets?.

Certainly it’s increased and it varies market-by-market. Over the three years it’s kind of a long time. I would tell you that the year-over-year we've seen lending fees maybe 15% 20% somewhere basically lower. If you look at the coasts, especially Jersey, SoCal, Miami land prices have increased maybe even over 20% year-over-year.

The comment on entitlement is getting more difficult and it's getting longer, I mean, if compared to two to three years ago. But that's our job to do. We use our platform to identify and our relationships and the municipalities to get things through. But it is tougher, it takes longer, a bit more expensive.

But when we do our underwriting, we factor all that in terms of the timing cost to entitled that when we buy land..

Great thank you..

[Operator Instructions] The next question comes from Michael Mueller with J.P. Morgan. Your one is open..

Hi.

A couple questions first of all just wondering I mean how are you thinking about using equity versus asset sales at this point to fund growth?.

I’ll make a comment there and then Scott can jump in. We're finding a lot of success on the asset sales front. We like the pricing we're getting. There's some good aggressive bidding from users and 1031 buyers in particular. And so as long as that continues we're going to continue that again recycle [indiscernible] lot of those assets.

We do like the way the balance sheet looks today. We like the debt to EBITDA ratio, we're going to continue to manage the balance sheet.

It can be strong through the cycle and so when our sources and uses and get out of lack we'll certainly issue some equity to balance a backup, Scott?.

Yes, in my view the only other thing that is in 2017 this is after we pay about $10 million principal repayments on mortgage loans. We’re retaining about $40 million of cash as well. So we’re using to our new investment whether it acquisition or development..

Okay, got it. And then just one other question for you Scott.

On CapEx for 2017, can you remind us what that number was in terms of guidance? And has it changed at all?.

It’s about plus or minus $38 million is where we think that TI’s leasing commission capital improvement and give yourself a range of a couple of million bucks on either side. That hasn’t changed from what we’ve discussed on our prior calls for 2017..

Got it. Okay, thank you..

Your next question comes from John Peterson with Jeffries. Your line is open..

Yes, let me get in touch on e-commerce a little bit. We’re hearing from people that looked at it. Amazon has been accelerating warehouse openings, Walmart talked about focusing on their online business versus brick-and-mortar. And then we’ve seen a lot of the like SPO be a lot more aggressive in e-commerce space.

I’m just kind of curious – a little more color on what you guys are seeing on the ground today? And then maybe specifically, how you think the first industrial portfolio is positioned to take advantage of it?.

Hey John, this is Peter. So we continue to see very broad-based demand across the country. And you are correct, Amazon seems to be accelerating their growth we’re seeing them in a lot of markets. Same with Walmart.

com and some pure play e-commerce players, but we’re also saying and continuing to see as we’ve talked about now on many calls pretty broad-based demand that includes the three PL and logistics companies, the parcel carriers, we’re seeing consumer products we’re seeing food and beverage, we’re seeing apparel, we’re seeing automotive and on down the line.

So it continues to be pretty broad-based and in the markets, particularly that we’re developing in, we continue to see high levels of interest from a variety of tenants in those markets.

So think, Pennsylvania, I think Southern California as two prime examples, Jojo do you want to add to that?.

Sure, yes, peter, really gave a good breath of the type of customers and the type of businesses that use e-commerce. One thing I just want to add is that the type of facility is bodes well for us, because the facilities being build for e-commerce is pretty broad too.

Fulfillment centers there are sortable products get fulfillment centers for nonsortable heavy goods products. You got delivery stations, delivery stations just seen a really satisfying the last leg of the delivery you got returning centers where almost like third to a half of being what’s being needs to be returned and that’s a different facility.

So if you add all of that and you then basically add all of that to what Peter has talked about the subset of demand. That’s a lot of type of buildings that the industrial developer and owner like us can fulfill. That’s just what I wanted to add..

Great, that’s all from me. Thank you..

[Operator Instructions] Your next question comes from Eric Frankel with Green Street Advisors. Your line is open..

Thank you.

Can you share whether your thoughts on change of values on development cap? And where you guys are at now?.

So the self-imposed cap limit today is $325 million, we have about $93 million of capacity available under that. Certainly, we are consistently evaluating the risk profile of the company and the opportunities in the market place.

And we’ve discuss that through with the board and discussing the cap level as part of that conversation, but today it’s 325 and we’ll let you know that changes..

Okay. I guess some related to that cap level and the appetite you have for kind of extend your platform. There seems to be a couple of larger U.S. industrial portfolio coming in the market are varying in quality but some of them are seem to be pretty decent.

What are your thoughts in terms of what it would take for you guys to ever consider buying those portfolios?.

I think if you would expect we certainly intend to evaluate assets as they come to market on a regular basis.

I think it would be – it’s unnecessary and unappropriate for us to speculate on any particular offerings that might be out there, but certainly we’re always going to be looking for ways to add shareholder value and as such, we’ll be evaluating offerings as they come..

Okay, thank you..

Your next question is from Bill Crow with Raymond James..

The question really is, I was just curious if you could quantify the change in the amount of capital that your tenants are putting into the buildings over the past few years.

Some with the evolution of e-commerce we're putting more and more money into the systems, but is there a way to quantify that? And does not create what you view as a barrier to exit from your tenant base?.

Sure Bill it’s Peter Schultz. Certainly we've seen an increase in the CapEx spend by tenants in spaces particular around automation. A couple of examples would be the deals we did with UPS in the last couple years, heavily automated.

The building that we just bought in New Jersey is least long-term to Owens and minor, which is an existing tenant of ours in a couple of other markets. And they have outfitted the building heavily with automation at their cost to service the hospital systems in the New York metro area.

So we're seeing that more and more particularly as labor gets tighter. You're seeing more companies automate and that certainly requires a different caliber of labor to operate all that. But we continue to see that as a trend.

But I would say it's hard to quantify what the dollars are, but certainly we like that because it makes the tenants stickier on our assets..

Okay. Alright, thanks..

There are no further questions at this time so I like to turn the call back over to Peter Facinelli. Actually we do have one more question. So the next question is from Stephen Kim with Sun Trust. Your line is open..

This is Ki Bin. [Indiscernible].

He Ki Bin I figured it was you..

I go by many names on these conference calls. Just a couple of quick ones here. What is your market rent growth forecast for – well I guess, what have you seen this year? And what do you will probably see next year? And I know stealing some thunder from your Investor Day, but just curious if you have any thoughts there.

Its not lease price market rent growth..

Market rent growth..

I mean we don't give guidance on market rent growth Ki Bin, as you know. It varies by market by market. But I mean it has to be positive given the fundamentals. We're seeing I mean still high occupancy in all markets. There are a number of markets where you even have some – whenever say 6%, 7% and below that landlords have pricing power like us.

And you're seeing that in our portfolio. And we expect to continue to see that. I mean there will be our feeling here is that there has to be a lot to happen before we don't have a market rent growth. Supply has to exceed demand by a significant amount for multiple years before – we have to get back to by may be a market 10% vacancy.

So I mean overall we cannot give you guidance on exactly what market wrangled it will vary market-by-market. Fundamentals out there looks really good for competing growth..

Large continuous blocks of space just unavailable, tenants don't have a lot of options. That's obviously a good thing if you're your landlord that's going to translate into pretty significant growth. Peg a number is you don’t have a crystal ball that that’s any better than anybody out there..

Where are you trending in terms of taxable income for share? And how does that compare to your like your dividend rate right now?.

When you look at the first three quarters of 2017 we’re in good shape on taxable income. The big wildcard is gains on sale. We've been doing a pretty good job doing 1031 exchanges on the sales it is big tax gains for the first nine months. Fourth quarter that's the wild card again we can do 1031 exchanges.

But again keep in mind we still have $60 million NOLs that we can use to offset those gains. So we have the ability to use those to help us manage taxable income..

Okay thank you..

That’s the last question for today. So I’ll turn the call back to Peter Baccile..

Thank you operator. And thank you all for participating on our call today. Again we look forward to seeing many of you in New York for Investor Day and in Dallas for the NAREIT Conference. As always please feel free to reach out to Scott, Art or me with any follow-up questions..

Thank you..

This concludes today's conference call. You may now disconnect..