Invesque Inc. (IVQ) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Invesque Fourth Quarter and Year-end 2019 Earnings Conference Call. I will now turn the call over to Scott Higgs, Chief Financial Officer. Please go ahead, Mr. Higgs.

Thank you, Amy. Good morning, everyone, and thanks for joining the call. With me today are Scott White, our Chairman and CEO; Adlai Chester, our CIO; and Bryan Hickman, Senior Vice President of Investments. Scott will kick things off discussing our activity for the quarter, color around our portfolio and some overall industry news and trends. I will then cover our fourth quarter and year-end financial results, and Adlai will recap our portfolio performance, recently announced investments and strategic efforts before starting the Q&A portion of the call. The fourth quarter and year-end 2019 earnings release, financial statements and MD&A are available on our website, and a replay of this call will be available from 12:45 p.m. Eastern Time today until 11:59 p.m. Eastern Time on March 19. Before we get started, please be reminded that today's call may include forward-looking statements regarding our future operations. Such statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied today. We have identified such factors in our news release and other public filings. As we discuss our performance, please bear in mind that all amounts are in U.S. dollars. With that, I'll hand it over to Scott.

Good morning, everybody. Thank you all for joining our fourth quarter and year-end 2019 earnings call. But before we kick off the call, I want to take a quick moment to comment on the recent outbreak of coronavirus and the proactive steps we are taking. The safety of the residents and employees in our communities and employees in our corporate office is of the utmost importance. At Invesque, we believe that it is vital for our operators to keep their staff, residents and family members aware of this fluid situation and to ensure their team is informed and following CDC guidelines to reduce the possibility of infection. We are in communication with our operating partners to monitor the situation on a day-to-day basis and make sure that best practices are implemented. The health and safety of our team and our residents is our top priority. Now on to the fun stuff. What a successful quarter it was. Our main objectives over the last quarter of 2019 were twofold: first, to close the final tranche of the Commonwealth transaction; and second, to finalize the restructuring of the Greenfield portfolio. I am proud to say that we have successfully executed on our short-term goals on both fronts. We closed on the final tranche of Commonwealth communities in December, and we have successfully transitioned the operations of all the former Greenfield communities to Commonwealth and Heritage, plus closed on the sale of the Arlington, Texas community. Since our IPO in 2016, we have grown the portfolio over fourfold to achieve significant scale, which we believe is a prerequisite for success in the health care real estate industry. Size and diversity matter. We are focused on growth to enhance diversification by asset class, operator exposure and geographic location. Having successfully met our goal to grow the portfolio, our near-term objectives are focused on active portfolio management. Our portfolio management plans are a continuation of our strategy of building a world-class portfolio with high-quality operators. Our portfolio management efforts thus far have been focused on pairing the correct operators with our communities. To that end, we'll continue to work with our preferred operating partners to manage communities that align with their operating footprint and expertise. The Greenfield restructuring is a prime example of our approach to aligning our communities with the operating partner best positioned to maximize performance and value. In 2020, we will extend our portfolio management initiative to opportunistically divest noncore assets and redeploy capital with our preferred partners. The sale of the Arlington, Texas property is a great example of monetizing a noncore asset at favorable pricing. These types of noncore dispositions will provide us flexibility and capital to put to work in core assets in an accretive manner. I cannot be prouder of our team's execution on our portfolio management initiatives to date. As I discussed on our last call, we made a concerted effort to strengthen our portfolio by ensuring that we have as many assets as possible included in master lease structures. The master lease structure reduces credit risk in times of stress because of the cross-collateralization and single rent payment obligation. Today, over 90% of our contractual rent in our triple-net lease portfolio comes from assets included in master leases or single leases where we can consolidate the assets into master lease structures. This represents a significant uptick from approximately 77% at the end of 2017. Our percent of rent in our triple-net lease portfolio subject to master leases is at the high end of the industry relative to our publicly traded competitors. Moving to our investment activity. Our execution remains focused on deploying capital with our preferred partners. In December, we acquired the last 3 communities of the previously announced Commonwealth transaction. As a reminder, the aggregate Commonwealth acquisition is comprised of 20 communities with over 1,400 private pay independent living, assisted living and memory care units located in Virginia and Pennsylvania. The Commonwealth transaction has added a highly differentiated operating and property management company to the Invesque platform. The ability to strengthen our existing portfolio by transitioning operators with a key strategic reason for acquiring our new management company, Commonwealth Senior Living. As we look forward to 2020, we continue to analyze opportunities where we can create efficiencies from the ownership of our vertically integrated operating company. Commonwealth is now the largest seniors housing operator in Virginia and a premier operator in the Mid-Atlantic. On a pro forma basis, Commonwealth will represent our largest source of NOI at over 25%. The Commonwealth transaction now positions Invesque as predominantly private pay health care real estate investment company with over 56% of our pro forma NOI coming from seniors housing and over 40% of our pro forma NOI coming from our seniors housing operating portfolio. Our exposure to Symphony is now roughly 23% of pro forma NOI, down from 70% of our IPO. This portfolio mix provides us greater diversification and operational upside. It also significantly reduces the government payer source exposure across our nearly $2 billion health care real estate portfolio. We acquired the Commonwealth portfolio at approximately $236,000 per unit, which represents a 20% discount to our estimate of replacement cost. This is an important metric that I want to highlight. By focusing our efforts on midsized markets, we have successfully sourced and continue to source sizable, high-quality opportunities at a discount to replacement cost. We have long believed that our basis relative to replacement cost is a critical consideration when we acquire assets. Our regional focus allows us to capitalize on the arbitrage of buying existing stabilized assets for less than it would cost to build them. We still invest in development, like you've seen us do with Ellipsis, but we'll be very selective in the opportunities we choose. Adlai will touch on our proprietary relationship with Ellipsis and our recent investments with them later in the call. Let me now comment on some important industry themes. As we noted over the last couple of quarters, we have observed a recent drop-off in new construction starts. The fourth quarter NIC MAP data continued a favorable trend in supply for seniors housing with a number of construction projects declining for the fourth consecutive quarter. More importantly, assisted living units under construction declined for the eighth consecutive quarter with new starts down 51% since the peak in the first quarter of 2016. In fact, assisted living starts trailed independent living starts for the first time in over 10 years. These metrics are especially relevant to Invesque because our seniors housing portfolio is more than 80% concentrated in assisted living and memory care units. With that said, we have long-held the belief that the gap between demand and supply is more important than just focusing on the supply side of the equation. Fourth quarter 2019 annual absorption of 2.9% was offset by 2.7% inventory growth. Absorption has now outpaced deliveries for 2 consecutive quarters, a first since the fourth quarter of 2015. This is an important metric and positive data point as we assess the current state of the supply and demand dynamics. Trends continue to diverge between the primary and secondary markets, with development activity falling more quickly in the secondary markets, which is where Invesque has invested in seniors housing to date. Excluding the top 31 markets, nearly 60% of the remaining top 100 markets featured assisted living construction below 3% of inventory. Supply fundamentals are improving across the board, and demand is beginning to catch up as we reach an inflection point with the 80-plus population. It is important to note that today's demographic growth of the 80-plus group is much stronger than 10 or even just 5 years ago. We continue to believe seniors housing occupancy may see its first year-over-year increase in 2021 as supply growth slows and demographic growth accelerates. On the skilled nursing front, we are now almost 6 months into the 2020 Medicare SNF rate update and implementation of PDPM. While it's still early, our operators are telling us that the PDPM implementation has provided at least the minimum 2.4% payment increase that was budgeted for Medicare patients. In some cases, the improvement in reimbursement has been even more favorable. Other publicly traded owners of skilled nursing facilities as well as operators have expressed similar takeaways from PDPM. We remain cautiously optimistic about the ability for our sophisticated operators to thrive under the new payment model. We believe that the transitional care assets in our portfolio are uniquely positioned for success under PDPM. As the dust settles, we expect coverage ratios in our portfolio to increase over time as a result of PDPM implementation and further stabilization across our SNF portfolio. With that said, we note that coverages are assessed on a trailing basis and there will be a delay in assessing the full impact. Finally, you have often heard me talk about how proud I am of the team and the culture we've created at Invesque. I'm very proud to announce that we were recently named one of the Best Places to Work in Indiana by the Indiana Chamber of Commerce and the Best Companies Group. This is an important recognition as it provides independent verification of how special our team and our culture truly are. Building a long-term, sustainable, world-class company requires having an exceptional team and culture. With another $440 million of acquisitions completed in 2019 and a streamlined, stable, high-quality operating partners, I'm extremely pleased with what we accomplished in 2019. We successfully executed on several portfolio management initiatives in a very efficient manner, and we'll continue to focus on enhancing the value of our current portfolio through portfolio management initiatives. I'm excited about what we have created in 4 short years. But I'm even more excited about the opportunity ahead. With that said, I'll pass it to Scott Higgs to talk about our fourth quarter and year-end 2019 performance as well as recent capital markets activity.

Thank you, Scott. For the quarter and year ending December 31; FFO was $0.19 and $0.85 per share, respectively; AFFO was $0.18 and $0.76 per share, respectively; our effective dividend cash payout ratio, when adjusted for DRIP participation, was approximately 85% for the 3-month period. Quarter-over-quarter, the decline in AFFO was primarily driven by performance in the former Greenfield property. As is typical in operator transition, there were declines caused by additional costs and census deprivation during the quarter. We believe that Commonwealth and Heritage are well positioned to bring the portfolio performance back in line with historical norms, and Adlai will touch on this more later. As Scott noted earlier in the call, we kick-started a portfolio management initiative in 2019 to streamline our portfolio and align with our preferred partners. As we continue to focus on portfolio management in 2020, we believe this initiative will generate long-term earnings growth and stability for the coming years. With the Commonwealth transition and Greenfield restructuring complete, we expect FFO and AFFO to trend higher throughout 2020 and beyond. We also expect our payout ratio to turn back to our historical average. Turning to the capital markets front. In the fourth quarter, we reauthorized our NCIB plan to repurchase up to 5% of the common shares outstanding. We continue to look across our capital structure to create value for our shareholders. We will closely monitor market conditions and opportunistically repurchase stock when we believe it will provide the best investment opportunity for our shareholders. With the movement in interest rates continuing to provide for a very favorable debt market, we continue to focus on sourcing attractively priced new debt and refinancing existing debt at lower rates. In 2019, we lowered the effective rate on our debt by approximately 35 basis points through a combination of issuance of new debt, refinancing existing debt and utilization of financial instruments. This creates long-term cash flow stability with a well-laddered maturity profile. Today, our average debt maturity stands at over 5 years with less than 14% of our debt rolling over the next 3 years. With that, I'll pass it over to Adlai to discuss our portfolio performance and investment activity.

Thanks, Scott. The performance of our stabilized triple-net portfolio remained consistent with previous quarters. On a trailing 12-month basis, as of September 30, our EBITDAR and EBITDARM coverage ratios were 1.2x and 1.5x, respectively. Our trailing 12-month occupancy as of September 30 stood at 85% for our triple-net assets and 88% for our stabilized shop assets. For the MOB portfolio, stabilized occupancy stood at 92%. These metrics remained relatively consistent throughout all of 2019. As Scott mentioned earlier in the call, we are excited to announce that we have received final licensure approvals and successfully transitioned all our communities formally operated by Greenfield to Commonwealth and Heritage. More importantly, we executed these transitions in a smooth and expeditious manner with little to no disruption to residents and employees. As a reminder, 10 of the communities operated by Greenfield, have now been transferred to Commonwealth and will be owned, operated and managed by Invesque affiliates. This took a great deal of time and effort in Q4 and had an impact on our earnings. As with any transition, there were inefficiencies and costs. We expect Commonwealth will stabilize these properties and generate stronger performance later this year. We also expanded our relationship with Heritage by transitioning to them 2 Greenfield communities in Pennsylvania and New Jersey. The communities are in markets where Heritage successfully operates communities for Invesque. We are confident that Commonwealth and Heritage will drive performance by implementing their operational expertise and creating synergies with the Invesque communities they currently operate. As Scott noted earlier, Commonwealth is now our largest source of NOI on a pro forma basis at over 25%. Heritage is our third largest source of pro forma NOI at over 8%. We sold the final Greenfield- operated community located in Arlington, Texas in the first quarter of 2020. As we compared alternatives for the Arlington community, we analyzed the property's strategic overlap against our preferred operators. We then compared that outcome against the favorable pricing we could achieve in a sale. Ultimately, we determined the community was not a fit with our preferred operating partners and decided that sale was the best alternative. We were able to quickly identify several interested buyers and execute on an efficient sale. The sale proceeds will allow us to redeploy capital into core assets with our existing operators in an accretive fashion or potentially delever. Continuing the theme of our relationship-driven approach to investing, we announced this morning that we have entered into a purchase and sale agreement to acquire a 36-bed memory care community operated by Constant Care in Rogers, Arkansas, for $8.2 million. The property is nearly 100% occupied and will be added to the existing master lease agreement. At closing, we will have 8 communities with Constant Care, who will represent close to 4% of our pro forma NOI. Also in the fourth quarter, we closed on a mezzanine loan investment to Ellipsis to fund the development of a 42-bed class-A freestanding memory care building in the Grand Rapids, Michigan MSA. The property is currently under construction with a targeted completion in the second quarter of 2020. The property will be operated by Constant Care. As in past agreements with Ellipsis, we will have the right to purchase the property at fair market value after completion and rent commencement. Our proprietary relationship with Ellipsis continues to be a huge success and further augments our approach to investing with our preferred partners. The partnership provides us exclusive access to a right of first offer to invest in all senior housing and medical office development projects that they develop. We also have the right to purchase these properties upon completion. The Ellipsis management team brings decades of experience developing health care real estate assets as well as strong relationships with senior housing operators such as Constant Care. Partnering with Ellipsis and Constant Care is a great way to continue to grow and capitalize on our development platform. Our pipeline of external growth opportunities continues to be very robust. With our growth over the last several years providing us the scale and diversification we set out to achieve at our IPO, we will be very selective on future acquisitions with new relationships. We are focused on internal redevelopment opportunities and bolt-on acquisition opportunities with our existing partners. We remain disciplined in our underwriting with a focus on recycling capital, acquiring assets at a discount to replacement cost and assuring that any growth further strengthens our high-quality portfolio of health care real estate. I'd like to thank everyone for joining the call, and we will now open the line for questions.

[Operator Instructions] Your first question today comes from the line of Stephan Boire of Echelon Wealth Partners.

I have fairly general questions. But the first one is, I'd like to -- well, it seems like the results from recent quarters were noisy or volatile in terms of G&A, NOI margin and even FFO, and I understand there's a period of transition from a pure triple-net REIT to an operator. But I would like to know what should investors expect 1, 2 or even 5 years down the road, specifically in terms of stability, operations and strategy?

Stephan, thanks for the question. So look, when you're looking at what we did in 2019 and quite frankly, over the last 3.5 years since the IPO, we've grown as fast, maybe faster than almost any other public real estate company in North America, both the U.S. and Canada. And as a result, as you said, there's some noise as you integrate portfolio after portfolio after portfolio. This was very deliberate, very strategic part of the plan. When you think about where we started, and we're very clear about this from the beginning, we started with a fairly concentrated portfolio, both by geography, by operator, by type of asset. And we knew, as we executed on our vision and what we set out to do, that we needed to work quickly to diversify. We needed to work quickly to grow because size does matter in this space, and that was our vision and our plan for the first, call it, 3 years of Invesque. Now as we announced during our last call, and we've reemphasized again today, it's time to actively asset manage. Once you've accumulated a portfolio that today is almost $2 billion in value, 123 buildings, you step back and you reflect and you say, okay, as part of that, you've acquired some single assets that are either no longer part of your vision or strategy or maybe never were. So you acquired this part of the portfolio, but they are a single asset with a single operator that maybe you can't grow with or maybe they're in a market that you don't have any other operations. We also as you highlighted, integrated in an operating company, which was a big addition for us in 2019. When you take the sum of all of these pieces, we're at a point now when we focus on active asset management. We announced a few of those initiatives, both in the last quarterly call and today, one of them being the replacement of operations by Commonwealth into the former Greenfield assets. That was a big strategic move for us and a big move toward portfolio management and asset management. We also announced the selective sale of some individual assets. Again, pruning the balance sheet. Now to very specifically answer your question about what can we expect 3, 4, 5 years out? Well, I don't have a crystal ball, so I can't tell you, especially on a day like today, where I'm not sure I can tell you it's going to happen tomorrow. But I can tell you that real estate is a long-term asset class. We are executing on the strategy and the vision that we set out to do from the beginning and nothing has changed. We knew, and I've been clear on prior calls and I'll be clear on this call, it is very challenging to build and manage a long-term real estate asset class by managing quarter-to-quarter. It is very challenging. What I can tell you is, we are stabilizing the cash flows over the long haul. What I can tell you is that we are looking for ways to enhance the strength of both the balance sheet and our underlying assets. We've done some of that. You should expect more of that in the ensuing quarters.

Okay. Thanks for the color. But -- and I guess, on that, as you said, I mean it's kind of hard, especially with what's going on in the market, especially today. But as the unit continues to trade at a significant and even larger discount today compared to NAV, have you started to run a process to evaluate other options to sustainably close the gap between the NAV and the current unit price? And actually, in parallel to that question, does that affect your recycling program versus the NCIB?

So let me start with the first question in terms of assessing the gap between NAV and where the units trade at. Every single day, we assess the best ways to close that gap, the best ways to create value for our shareholders. And today is no different. And I say today, specifically, in light of what's going on in the market. But you asked that question, which you may have last quarter, I would have said the same thing. We didn't grow as quickly as we did, nor did we assemble the portfolio that we are able to, by sitting around and waiting for someone to call us with ideas. We didn't sit around and pontificate about the next move. We're constantly out there pounding the pavement, talking to operators, talking to potential sellers of assets, talking to acquirers of assets, talking to developers, talking to sources of capital as ways that we think about creating value for our shareholders and closing that gap. Today is no different, and last quarter was no different. So as it relates to any specific, are we doing something today that's unique, differentiated? No, it is not, particularly this week. As it relates to your question on the NCIB and recycling of capital, those are tools in the toolbox. We have the NCIB, we have acted on the NCIB, and we will continue to assess the market. I mean certainly, on days like today, it is more intriguing now. As you're probably aware, around earnings and so on and so forth, we're often blacked out on our ability to execute on the NCIB, which does handcuff us as to when we can actually be acquiring shares. But you should expect us to continue to do that. We think that we are significantly below what we believe our NAV is. And as a result, there's an opportunity to create value for our shareholders by executing on that. As it relates to recycling of capital, absolutely something that we have done and will continue to do. We recently announced the sale of one of our assets in Arlington, Texas. And we're looking at the portfolio for other opportunities to recycle capital, and we will continue to do that.

And -- but just to be more specific, at these price levels, would you prioritize recycling the program in other assets or prioritize the NCIB?

It's actually really difficult to answer that. It's just like -- I get the question often if you had another dollar or would your next dollar be deployed into MOB, skilled nursing or seniors housing? And the answer is, we're very opportunistic, and it is very fact specific. We look at the portfolio holistically and say, how can we create long-term value for our shareholders? So if I have an opportunity to acquire an asset that is going to yield 15% for me, I might do that. Now we don't have a lot of those assets out there. We got to do that on it. We got to look at that on a risk-adjusted basis. There's no doubt that the NCIB is very compelling for us right now. We are, again, as a reminder, in a blackout period, where we're not able to execute on the NCIB. But when we have the opportunity to execute on it, I would imagine that the dislocation created in the markets over the last couple of days created an interesting and compelling opportunity for us to create value for our shareholders by executing on that.

Okay. And just a final one. Do you have any feedback from your largest shareholders on the price level? And any color on that?

Yes. So I think it would be inappropriate for me to comment on what I think our large shareholders are thinking or doing. I would say that our largest shareholders -- I am in contact regularly with our largest shareholders. We do have an interesting ownership base in that 2 of our shareholders make up 57% of our shareholder base. But that's only 57%. I'm out talking regularly to the other 40-or-so-some-odd percent investors. In fact, I see some of them on this call right now. So I got to keep in mind what all of our investors want and think. With that said, I do talk to our larger shareholders, I'd say, at least monthly, maybe sometimes more frequently. And we have alignment of vision and strategy in terms of what we set out to do, building a highly diversified portfolio of high-quality cash generating health care-oriented real estate assets. There was always a long time horizon in mind, and I think we're executing as expected and planned.

Your next question comes from the line of Chris Couprie of CIBC.

Just kind of wanted to follow-up along the same lines of Stephan's questioning. You kind of highlighted that you've been one of the fastest-growing REITs or -- in North America. So you did $0.74 of AFFO in 2018 and $0.65 in 2019. I appreciate that there's some noise in there. But if we look forward, I think you guys were expecting kind of $0.09 to $0.12 of AFFO from Greenfield and Commonwealth. Now is that $0.09 to $0.12 over the $0.65 would you say or is it over the $0.74?

I think what we would contemplate that it's based on that acquisition in and of itself, that we believe that acquisition is going to generate that as it integrates and it fully gets into the platform. So in terms of how you're modeling or how you're looking at it, just specific to those -- that portfolio and the transition is what we were speaking to.

And as you asked the question about $0.65 or $0.74, so on and so forth. We have historically and will continue to not provide guidance on the overall portfolio. Getting back to Stephan's question, it's very difficult for us. I'll be very honest with you. In terms of as we integrate portfolios, and we've grown as quickly as we have, we've made a very specific strategic decision that we'll not be providing holistic guidance for the entire portfolio. So answering that question specific as to $0.65 or $0.74, I think we've put against what we've historically done and what we're prepared to do right now. We have, however, selectively, and this is the way Scott Higgs addressed it, he said while there are individual portfolios or assets where we do want to give you some idea of what we believe the net benefit or impact could be to the portfolio, and that's how we've addressed that. Hello? Hello? Can you hear us?

Yes. Yes, I just got cut off at the end there. Okay. I appreciate that. And then maybe just then with respect to this quarter then, in terms of the costs associated with the -- putting Greenfield into both Commonwealth and Heritage. Any idea what that potential impact was in the dollar term?

Yes. In terms of the per share metrics, I would say approximately $0.02 to $0.025.

$0.02 to $0.025 of impact?

Yes. It was pretty meaningful. I mean there's no doubt about it. This is part of the assessment you need to make when you change operators. There's no doubt there's slippage and there's inefficiencies associated with it. But again, having on our long-term lens, we believe that this is -- actually, I'll take away, we believe, this is in the best interest of this portfolio.

Okay, fair enough. And how fast do you think you can recapture that inefficiency?

Oh, I think fairly quickly. Again, I'm reluctant to give quarter-by-quarter guidance, but this isn't a long-term change. I think that there was a fair amount of inefficiency and discomfort associated with changing operators there, for lack of a better phrase. And then I think now having Commonwealth in there, they are a world-class operator. They're going to get in and move fairly quickly, I think, to return those portfolios to where they were because, remember, when Scott Higgs tells you $0.025 of slippage, that means those portfolios weren't necessarily performing or those assets weren't necessarily performing as they've historically done. So to return them to just their baseline should be fairly quickly. And given the expertise and professionalism and experience that the Commonwealth team has, we feel pretty confident that it's going to actually exceed the baseline of what we've seen historically.

And maybe just in terms of your disclosure around your shop portfolio? I know you have -- you kind of lump the shop and JV in portfolio occupancy together as of September 30, 2019. Is there any way you could provide -- I mean the SHOP portfolio, I can appreciate that maybe for the JV stuff, you're kind of waiting for reporting to come in from your operators. But for the shop -- for your -- the Commonwealth platform, is there any way you could tell us what the occupancy was for that at the end of the year?

So what I would say is a couple of things I'd like to -- this is Scott. So I got a couple of ways. One is those additional disclosures will be coming as soon as we have sufficient data to make comparable disclosures and meaningful disclosures when we don't have a lumpy quarter of partial ownership and so on. And generally speaking, with a broad brush, the Commonwealth portfolio is in line with the other disclosure -- with the other portfolio occupancies and so on.

So at September. But what about at year-end, it would be about 84%?

[indiscernible] generally the same at December 31 as well.

Your next question comes from the line of Brad Sturges of IA Securities.

Just to follow on that, when -- it was a little vague in terms of when the disclosures would be provided. Is that sort of for 2020 reporting, we'll start to see a little bit more disclosure on the op side of the business?

Yes. I think it will be in 2020 for sure.

Okay. And then in terms of the G&A, what should we be thinking about in terms of a run rate? Or how it would look like once everything kind of normalizes and the integration noise dies down? How would that look like from a percentage of gross book value or percentage of NOI?

Yes. So Brad, I think this commentary is sort of excluding the G&A from the management company. Because I think in terms of a run rate basis there, I think if you wanted to normalize that relative to what we've shown, it's -- I think that's a consistent run rate. And -- but in terms of corporate level G&A, from an asset, on a percentage of gross book value, it's a pretty similar rate where I think we're going to land in terms of 90 to 100 basis points is a fair run rate.

Okay. And maybe just to follow up to Stephan's commentary, but in a different way. Does -- where your stock is trading today, does that change the way you view your dividend policy in terms of perhaps rethinking about wanting to retain cash to fund growth or strengthen the balance sheet?

So Brad, where it's trading today in no way impacts our thinking around dividend. We constantly assess dividend as part of our overall capital structure, and we constantly assess whether -- what the highest and best use is for that cash flow. There's no doubt that what's going on broadly in the market, and by that, I mean the uncertainty associated with coronavirus, certainly can, should and will play into our ongoing and regular assessment of the dividend. But I wouldn't peg it, too, to the stock price. I'd peg it to what is our liquidity position, what do we think the highest and best use of that cash is. And we think that the highest and best use of that is distributing it back to our shareholders, preserving it for liquidity for our portfolio or redeploying in an accretive manner. We do that on an ongoing basis and today's stock price in no way impacts or changes our assessment of that.