SBA Communications Corporation (SBAC) Earnings Call Transcript & Summary

Good afternoon, everybody. Thank you for joining us at the virtual Truist Securities Technology, Internet and Services conference. Before we begin, I need to read the following disclaimer. This call is arranged by Truist Securities Research for use by institutional investors and issuer clients as defined by FINRA. If you're not an institutional investor or an issuer, please disconnect at this time. For required disclosures, please see our website at truistsecurities.com or our equity research library. On today's call, we have Brendan Cavanagh, CFO of SBA Communications; as well as Mark DeRussy, Head of Capital Markets and Investor Relations also from SBA. Gentlemen, thanks for joining us today. I really appreciate it during a very busy conference season, taking the time to talk to ours and your investors.

Absolutely. Happy to be here, Greg. Thanks for hosting us.

Anytime. Maybe we can jump right into a topic that we couldn't really only speak anything about until last week, and that is C-band auction is complete. We know who spent what. The winners have been announced. What are we thinking about now in terms of potential deployment of this new frequency on macro towers? Are carriers going to wait until it's cleared? Or are they pretty incented to start to do the work today to put this to use as soon as it's clear?

Yes, I think -- I mean, we'll all probably learn a little bit more as the quiet period ends for the carriers. They have Analyst Days coming up. Some are starting today. With the next few days, I think that will be informative for everyone. But our view is that the carriers will certainly start working on the deployments ahead of the clearing dates in order to be as efficient as possible in deploying the spectrum. Now for SBA, the financial statement impact to us is likely to be limited in 2021 because of the timing of going through the process, getting leases applied for, signed up and ultimately commenced. But I think if you look at what happened in terms of the results that we saw, the higher prices that were paid for the A-block spectrum, I think, is evidence that the carriers are intent on building out in the top markets as soon as they reasonably can. So I expect them to be very busy in the second half of the year. And really just in general the C-band, while there may be variations here on the timing of when they start doing something, the C-band is a multiyear build-out. So we would expect to see contributions really for the next several years from that initiative.

Fantastic. Would you expect to see applications before the second half of the year, the paper work starting?

I guess, it's possible. I mean we're already almost through the first quarter. So I think the next month or 2 -- I think by the time we get to our first quarter earnings release in about 1.5 months, we'll probably have a better view on what the pace will look like.

Okay. Do you have expectations at this point in time, what sort of density you're going to see with this deployment? I mean, it's not a great propagating spectrum.

Right, yes. I mean that's probably a question that's better answered by our customers; however, we do expect, as you just mentioned that the C-band will have a slightly smaller coverage propagation characteristics, and so -- especially compared to certain other frequencies such as the 2.5 gigahertz spectrum. So that would probably require greater density; however, there are many different ways that they could approach it. It certainly could be also paired with low-band spectrum to help with the uplink coverage when they see that they have potential bottlenecks. So it's really still pretty early. I think we'll just have to wait and see as the carriers get moving on it. But regardless, we expect macros to be kind of the core of the build-out. So we're pretty excited about what it means for our business.

Yes, I would expect we're all going to learn a lot in the next few days with all 3 of these guys basically [ look for upper hand. ] So it will be an interesting second half of the week. And like you said, probably great for the tower guys because they're going on every -- many of these macro sites anyway. You've been open to master lease agreements forever in a day. You guys have made that abundantly clear that you would do an MLA whenever the terms were right. Is there anything specific about this deployment cycle that would incent carriers to have an MLA with you?

Yes, I think it's definitely not a necessity to have an MLA. I think it can from a carriers' side, it can provide them with some certainty and efficiency during a time where there's going to be a lot of competitive build-outs. I think all the carriers will be active, and so providing that level of certainty for them probably is of some value. But from our perspective, we're going to help our customers meet their objectives either way, whether we have an MLA or not. And as it always does for us, it -- using an MLA comes down to just having a fair economic deal for both parties. So I think in either case, the need to deploy C-band on our sites will be there. So it's really just a matter of working out a structure that's best for both sides.

Got you. It's pretty clear that over the past couple of years, at least one of the big 3 is sort of under-indexed relative to SBA, at least in the past couple of years. Do you think there's a change, given that there were the biggest bidder for C-band that, that changes here in the next couple of years?

Yes, I mean, I don't want to be too specific about any individual customer, but I do obviously expect that the companies that were the largest winners in the C-band auction are going to ramp their network spending in order to deploy the spectrum as efficiently as they can. So leasing activity in general over the last year or so has been down some. But we kind of look at the overall picture, we recently saw it starting to pick up with T-Mobile. And I think from a C-band perspective, it will increase the activity levels with both AT&T and Verizon in the latter part of this year. And then we may talk about it a little bit later, but the activity with DISH should also begin to accelerate. So I think as a whole, we'll see all of the carriers probably more active than they've been in the last couple of years.

With a little bit better clarity on who has what on the C-band, and recognizing that DISH is coming on strong, and T-Mobile continues to densify the network in 2 different frequency bands both 600 and 2.5, do you have a better view of multiyear growth? I know you're a little hesitant to talk too much about that on the latest quarterly earnings call. But I guess you've got a little better clarity these days than you had in the past.

Yes, I think -- I mean, we're not giving any specific guidance that goes out beyond 2021 at this time. But when you look at all these trends that you just mentioned that we've been discussing here, obviously most of these initiatives are multiple-year projects and really starting to pick up, I think, in terms of intensity as we get into the latter part of this year. So that certainly bodes well for improved domestic leasing activity over the next several years. And I would expect that we'll see higher organic growth numbers as a result of it. But in terms of any specificity around that, it's -- I don't think we're ready to commit to something specific, but I think the general trends would suggest improving dynamics.

Got you. And in terms of committing to a target AFFO number 3 to 5 years out like you had in the past, I guess, is it not a desire at this point in time?

Yes, I mean that's not really something that I think we want to commit to at this point. But the beauty of our business is that it's very steady and stable. And so what we were trying to achieve through that $10 AFFO per share number that we gave out many years ago was -- I think what was underlying that hasn't really changed, in the sense that we're a long-term, stable, EBITDA growing, free cash flow growing company. And that means that there's a lot of predictability to the positive growth that we expect to see in the future, and that's still the case today. We probably won't be giving a specific target, at least at this point, because I think the best way for us to demonstrate that is really just by delivering on results at this point. So that's where our focus is.

Fair enough. Can we move next to talk about the guidance for the year. So within the context of Sprint/T-Mobile churn, I mean, they appear to be moving very rapidly, very, very serious. I suspect we'll get more incremental information tomorrow when they talk to investors themselves. But can we talk about what it means for SBA specifically if T-Mobile does accelerate this, it will be an interesting process?

Yes, I mean for us, we've been, on our last earnings call and in other discussions, have tried to be fairly clear about what we see as the likely path for experiencing this churn as a result of the merger. So let's just step back for a second. When we look at the Sprint leases that overlap with T-Mobile leases in our portfolio, it represents about 6% of our total cash leasing revenue. And then if we take that and we look at the lease expiration dates, what's the timing for that, we know that we'll likely have some churn over the next few years, but we expect that the biggest concentration of that churn will be felt in 2025 and 2026. Of course, that's subject to change depending on how T-Mobile modifies their network plans, but we kind of know what our baseline looks like. And so about 70% of our churn that we would expect to experience from that merger is pushed out in those years that I just mentioned. So things can adjust, but we know where they have overlap and where they're likely to cancel leases and what the dates are and when those leases are up?

Fair enough. If there was upside to the 6% gross, 3% net U.S. leasing for the year, would it come more from accelerated Verizon activity, T-Mobile activity or less than expected Sprint churn, if you have to handicap that?

I mean any one of those could positively impact the number. I think for it to move materially, you might need all of those things to be happening. Because really they're all going to happen. Maybe not the Sprint churn being less, we'll see. I think our numbers around the Sprint churn that we gave, a lot of it was already baked. There's some amount that we've assumed based on leases that are coming up for expiration this year that we would expect them to cancel. It's possible they don't cancel all of those, but I think that's a $2 million to $3 million impact on this year. And it's probably not going to be 100% off, so you're talking a fairly small differential on that. But in terms of the leasing activity with folks like Verizon and DISH, it's certainly possible that we would see those activities ramp a little bit faster. But it's not something that we would be comfortable committing to at this point. Because the timing even if it accelerated today, the timing can actually get to execute leases that are commenced and they're paying rent on is going to be probably very limited for this year.

It's quite big enough that it would take a lot to move the numbers, anyway?

Yes, I mean when you look at our numbers, it's funny because nowadays -- we're talking about numbers that are a few million dollars one direction or another. But really as a percentage of the size of our overall book of business, it's just not that material. So its ability to impact percentage growth rates is pretty small right now.

Right, right. How well suited are some of these sites for a company like DISH to assume the lease, like they have the option to? And then what would the economics look like if DISH did? Because I can imagine they would require a pole moving that Sprint antenna on.

Yes, starting a new greenfield network would give DISH certainly flexibility that the other carriers don't have; however, the ability to take assignment of some of the legacy Sprint leases could be a good option for them, if the priority that they have is speed to market, given that those sites are already up and ready to go. In a number of cases, the Sprint leases are located at prime spots on the towers. They may have the top of the tower in a given location. So there are some advantages to them from that. But it's hard to say right now whether or not, they will definitely take advantage of it, but I think there will be some. As it relates to the rent rates, based on the initial specs that we're seeing from DISH, they obviously contemplate smaller configurations than what we typically see from the other carriers, so the rent rates will certainly reflect that. However, from our perspective, if there are changes that get made that ends up increasing DISH's needs, we will have the ability to monetize that change. So I think we're well-positioned to take advantage of -- in fact, their network design plans change.

Got you. At the end of the day as DISH evolves, is there anything fundamentally different about their network design and topology that would suggest they would have better economics on your towers or rents specifically relative to your other customers?

It's certainly likely that their rents will be lower, but they will also be using significantly less capacity. The other carriers have networks that have a lot of equipment, that's been deployed over many years that have kind of layered on top of each other. And I think DISH is probably not going to be quite as dense a network as the existing carriers. And so those factors would certainly affect the rental rates. But in terms of apples to apples kind of comparison relative to the equipment loads and what they're taking up in terms of capacity, it should be fair as it would be for any of our customers. There's no special.

Okay. That's really what I was trying to get at, on an apples-to-apples normalized basis, if we were talking about square footage or cell load or whatever we were talking about, it's going to be pretty close to the same for -- as it would be for AT&T and Verizon.

Yes, I think that's right. I mean it's hard to say all of that very specifically because every situation is nuanced and different. Individual sites are certainly different as well. A customer that has the same installation on a site in one location may not pay the same thing as they pay for the exact same installation on another location. Because it is ultimately a site-specific, location-specific business, just like any real estate businesses.

Got you. Of the 30 million of churn expected in '22, and I guess it's 40 million in '23, that is the leases that expire on the Sprint network. But that doesn't assume DISH assumes any of those leases, correct?

It does not assume that, no.

Okay. So there's potentially upside to the extent that they do?

Yes, there is, although as I said a moment ago, there's really a very small amount that is in 2021's numbers that is not already notified. So you're talking about a few million dollars of revenue impact to this year.

Got you, okay. In the recently announced MLA with DISH, is there anything in that master lease that offers incentives for them to assume these leases?

There's not necessarily any special incentive for it, but we have certainly worked on a mechanism, as part of the agreement, with them to govern those transitions, if that's what they feel is best for their network development. I think -- we did spend a lot of time on it with them. So I think there is certainly some expectation that they would have an interest in looking at that as a possibility in some situations. But it's not incented necessarily.

Okay, fair enough. And it's going to be a brand-new build, greenfield build, as you pointed out. First time in 20 years, somebody has done this from scratch. So I would imagine it's going to be a pretty efficient build as well. It will alter the mix of new site leasing versus amendments, how should we be thinking about the mix for SBA for the next couple of years?

Well, as you just said, the vast majority of the activity with DISH will certainly be new leases. So they're going to, I would expect, move our overall mix of leasing activity more towards leases than it's been. However, the majority of the domestic revenue signed up will still almost certainly come predominantly from amendments. So I would think especially when you consider what the other carriers have to do in the likely form of that activity with them. So we've been very, very heavy in terms of our amendment concentration over the last so many years. And we still will be, but probably not quite as heavy, because of DISH's contributions.

Okay, that's fair enough. I saw they also did something with Tillman, a week ago, 2 weeks ago, by moving [indiscernible] at this point in time. Are they still a formidable force out there? Or is the expectation that Tillman is going to revolutionize the tower industry by being an alternative partner to Verizon and AT&T sort of faded away, has it not?

Yes, I think what they face as a challenge is the same thing that any start-up tower company faces, which is that it ultimately comes down to, as I said a second ago, the location of the towers. And if you have locations, particularly exclusive type locations and the carriers have already built out the base of their network across many of those locations, it's very hard to come in and say, "Well, I'm going to compete for that business." There are certainly isolated spots and places where they'll be able to do that, where they'll be able to build a site where the carrier doesn't have coverage and expand it kind of out into more rural areas, or possibly in an area where there's no zoning protection and they want to put up another tower. That's not always the best business decision because now you create a competition for a limited number of customers. It doesn't really work for anybody at that point. So I don't see that as a huge risk, but we're fortunate because we have the embedded -- the quality embedded base of sites that we do today. And it's hard, it's almost impossible, frankly, to replicate that.

Is there still embedded protection by way of zoning? I know I live in a town where we put up a macro tower 10 years ago, and there was a suggestion that we might need another one. But once it hit the zoning board, the issue became why would we ever need a second tower in this town.

Right.

I would imagine that still is the prevailing force throughout the country, is it not?

Yes, it is. I mean obviously, the rules -- zoning is a very local type of procedure, and it's done at that local level where the decisions are made. And as you would imagine, given that, there's a lot of variability. In some places, it's extremely hard, it's basically impossible to get a new site zoned and approved. And in other spots, it's not. Typically, as you get into some of the more suburban areas, a little less rural, you'll see tighter zoning laws. And so every site is in its own situation. But I would say certainly the majority of our sites certainly are well protected from a zoning perspective.

Okay. Can we pivot to the PG&E deal? I mean it sounds like a very attractive deal. It's a pretty big departure from your traditional pattern of activity. Maybe talk a little bit about what caused this? Why now? And where are you going with?

Well, I mean, I guess, first of all, I don't really think it's necessarily a big departure, in the sense that we're always looking for creative ways to add what we deem to be exclusive types of sites to our portfolio if we can do it at attractive prices. So sometimes that requires us to enter into more creative structures, just like we've done with other investments in the past, things like South Africa. In the case of PG&E, we were very attracted to this because it had a lot of attributes that we thought were very positive and at the core of what makes our business successful. For one, we're able to add under -- what we believe are under-marketed assets that are located in exclusive locations, and the Northern California market is a tough zoning market. It's tough to get coverage in some of these spots and this is really the only way to do it in a number of cases. So that was certainly very attractive to us. On the existing book of business there, the margins are very high because most of the costs are set or don't exist because PG&E controls the land. So the margins remain very high. The quality of the tenants and the contracts was also very good. So we think when you think about the things that we talked about earlier in terms of carrier growth initiatives, that there's going to be a real opportunity for that to certainly flow towards these assets as well. And we'll be able to grow the revenues on these sites as a result of that. And then on top of all that, we got it, again as I mentioned a second ago, for a very attractive price, particularly when you compare it to where lesser-quality assets have been trading in other transactions that you've probably seen out there. So we're pretty excited about it.

Why do you think you got it at the price that you did? It was a competitive bidding process, was it not?

It was. Yes, it was a competitive bidding process. I think there's several reasons: one, as good of a deal as it is, it certainly had its share of complexity and did look a little different, I think, to most traditional tower people. And I think that's where we're able to differentiate ourselves from others, in that we can take some of the skills and the experience that we've built up over the last 25 years and see things I think and opportunities in assets that maybe have some different dynamic to them, that others sometimes may not be willing to -- willing or able to see when they look at it. So I think that certainly has an impact on it. And maybe others were preoccupied with other things that they were doing as well, perhaps was part of it too.

Well, there's certainly a lot going on in the space.

Yes.

Should we be thinking differently about the potential lease-up characteristics with lease sites relative to your traditional macro site?

I don't think really that you should because when you consider the exclusive locations of many of these assets and the increased marketing and focus that I think we can bring to them with the carriers, I think, the lease-up should be very, very good over the next few years.

Okay. It's not the most stable company in the world, PG&E over the past bunch of years, more recently than not. Is there any outstanding legal issues that could jeopardize your ability to leverage these sites?

No, I don't think so. I think on our earnings call that we had a couple of weeks ago, Jeff mentioned that we spent a lot of time and money on looking at these risks from all angles. I think we're well covered with regard to our rights to the assets certainly, and definitely protecting us from any claims that might be related to the operations of the electric facilities and structures. So I think, whereas -- with the amount of time and money we spent with counsel, making sure that we were broughten up, I think we're as protected as could possibly be.

It's good to hear. Good to hear. You said they were poorly marketed, the site to the carriers.

Under-marketed. I think I said under-marketed. But again...

Yes, under-marketed. Sorry, I said poorly marketed.

Right.

I interpreted that as poorly marketed. But now the carriers are your largest customers when you have them. Are you already taking inbounds? Or is this something that's going to have to be more proactively marketed?

Well, it's still very early at this point. We're just frankly right now getting these towers integrated into our systems. So I think it will be something that we'll see over time here. But there's definitely activity already happening with some of the carriers around these assets and looking at them for solutions. And I think as we see the broader dynamics around carrier build-outs that we've been talking about, whether that be C-band-related or DISH's build-out, those things will certainly relate to these assets just as they do to the rest of our portfolio. So I think as we see the general move towards incremental network investment, we're going to see that positively impact these sites as well.

Okay. Years ago, I remember seeing a couple of power grid towers with cell sites on. And I thought it was highly unusual, but I haven't seen it with great frequency since that time. And frankly, I've never seen a PG&E site with a tower on it either. But is this something that we should expect to take hold throughout the United States? Or is there something specific to PG&E? It's only a limited opportunity for the tower industry.

Yes. I mean I think that there are possibilities to see a little bit more of it, but really the particular location of the assets is a lot of what made it attractive. As I mentioned before, being in that northern California market, in difficult to cover, difficult zoning areas, that makes a difference. I mean if you have other options, if you're a carrier and you have other options to cover the same location using a traditional macro tower versus having to go through the exercise of installing on a utility structure, you're likely going to choose the traditional macro tower, of course. So the key here is that the opportunities to provide coverage to important locations are limited, and that these provide the best solution in those areas. So I think that's probably the biggest factor that affected these assets. There could be others that are similarly positioned out there, but I don't think it's going to be as easy to find as one might think. But I do think other utilities would certainly have interest, and it's something that we will explore. We have talked about inbound calls from carriers before. We've got inbound calls from other utilities a little bit. But again, you have to look at each of those on a very specific individual basis as to whether they meet the criteria that would be a good fit for us.

But it's certainly a good sign for the potential for future development, but obviously, no guarantee. The final question on this is economics, how does it look relative to traditional towers?

The economics we would expect -- in terms of what we're charging the tenants, you mean from a lease-up rate perspective? Yes, I don't expect it to be any different. In fact, the more exclusive location, sometimes the rents can be higher. But I would expect it to be priced just as if they were traditional towers.

Okay. And actually, one final question, are there any interference issues to worry about? I mean is every tower marketable effectively?

Well, every site can be marketed. There certainly are sites -- as you know, part of this deal wasn't just the existing sites that had installations. We also have the ability to market over 28,000 other locations, transmission facilities that they have. I would -- certainly, a large percentage of those will not be suitable for various reasons, I think, for use. But there will be quite a few that will be, so we'll have to watch for that. I don't expect there to be any interference issues. It's something that has certainly been overcome with the existing 900-plus license agreements that are in place today with carriers on those sites.

Sure. Okay. Can we pivot to international? Can you talk a little bit about international? They were slow start to the year, in doubts. Parts of the world got hit a little harder than here in the United States. Any sort of recovery expected on the international side that could be above your expectations for the year in 2021?

Yes, I think it's possible. I mean if you look at what's affected our growth internationally in terms of it being a little bit slower over the last year or so, it's really primarily attributable to 2 things: One is lower inflation in the markets where we have a lot of our -- particularly Brazil, which is our largest international market. It directly affects our escalator growth and so that certainly weighs on just the general reported organic growth. And then the second thing, which you just alluded to, is obviously COVID-related struggles that exist in many of our international markets. It certainly impacted carrier network investment levels over the last year. So when you look at those 2 being probably the biggest factors over the last year that have caused the growth to be a little bit slower, I think, that there is opportunity to see it improve. We anticipate both of these things will turn around. And we'll see, as a result, improving organic leasing activity. But the timing is really just the question, right? So your question was specific to 2021. Do I think we have the opportunity to do better? Yes, I think there's a little bit of that, but I think it's going to be heavily dependent on what's happening locally in these markets in terms of the carriers' willingness to spend in a still somewhat disrupted -- pandemic-disrupted marketplace.

If it remains disrupted for the balance of the year, the upcoming spectrum auctions, they probably don't do anything in the near term to really trigger incremental activity levels if they're still sort of in lockdown, would it?

Well, I think the spectrum auctions will ultimately drive more activity certainly, because that's just the nature of how it works. I mean deployment of new spectrum almost always is a catalyst for growth for our industry. So it's definitely a positive. The only question again is the timing. And I think when you consider the pandemic -- and in Brazil, which is the largest market for us where there's expected spectrum auctions, the consolidation of Oi down there is a factor as well. So the other 3 major MNOs will be absorbing Oi, which is the fourth carrier down there. And I think that's a positive for us over time because it will create more of a shift toward competition based on network quality, and we'll have 3 strong competitors. That's typically good for network investment. But I think the transition, through that process, is a big deal for -- that affects all of the carriers in the market. And so between that and the pandemic-related impacts, the timing of the new spectrum auctions driving increased growth, I think, will remain to be seen a little bit.

Okay. And how about valuation of the international assets? It's been a struggle to acquire them just because they've been so highly coveted over the last couple of years. I guess we have a Vantage IPO coming up. That looks like it's got a pretty decent endorsement yesterday. Is it any easier to buy international assets?

I don't -- I wouldn't say it's easier from the standpoint that the competition is still very fierce for that. Asset prices remain high, and there's a lot of folks chasing these assets all around the globe. And so everything or most things are very competitive, which is why I think you've seen us, in some cases, be able to win some of those assets where we saw maybe value that others didn't. And we're able to pay for that, but in a number of cases, finding ways to be creative. I mentioned South Africa earlier. That was one way where we did a joint venture build process. We have over 1,000 towers down there now, and we're able to kind of be under the radar screen. And so we're able to secure high-quality assets with high growth at a very attractive price, by being a little bit creative and thinking outside the box. And I think we'll continue to try to do that, but I don't think it's easier by any stretch because there are a lot of folks, a lot of smart people with a lot of money that are certainly pursuing this business all around the world.

Yes, there's no doubt about that. But we shouldn't be expecting to see SBA showing up at every one of the auctions that's taking place for asset sales?

No, I -- Well -- well, showing up, we might show up. Because one of the things that we are -- we pride ourselves on is that we do look at everything. We look at things that you might not think that we look at, because we want to make sure that we're informed. And sometimes we get surprised by what we find, and there is an opportunity that we think is attractive and worth spending on. And so we're pretty good about considering all opportunities all around the globe. And a lot of them maybe don't fit what our profile is and what we think is the right place to deploy capital. But we do see ones that do sometimes.

Got you. We can probably wrap up capital structure, if you don't mind talking about that for a little bit. You're at the high end of your leverage ratio with the PG&E deal. But you've been here before, and it comes down quickly once the cash flow starts from the acquired entity. My guess is, share repurchases are going to be shelved for a little while until that ratio goes back down. But maybe you can give us your thoughts just on how you feel about your capital structure today post-PG&E?

Yes, our -- well, our leverage will be temporarily above our target range as we mentioned on our last earnings call, as a result -- specifically as a result of the PG&E deal. But as we indicated on that call, we do expect that we will be able to comfortably back within our target range which is, for everybody's benefit, is 7 to 7.5 turns of net debt to adjusted EBITDA. We expect that we should certainly be able to be back within that range by year-end. Now that may limit our ability to do another $1 billion deal this year and still achieve that. But we do have plenty of capacity still for additional acquisitions or share repurchases, particularly if we think we can be opportunistic around either of them or both for that matter. Because as I think I said, towards the beginning of the call, one of the beauties of our business is the reliable EBITDA growth and cash flow that we produce. And as both of those things continue on as they always do, it drives meaningful delevering in our business. And so that organic delevering gives us the flexibility to go and spend more money investing in our business where we see opportunities. So I think your statement that the share repurchases are shelved for a while, not necessarily. I think the leverage puts limitations on any capital allocation, but it -- there's still significant capacity left. And I think as we see opportunities, our preference would be acquisitions probably if we saw high-quality assets to either buy or build. But if we don't see that and then the alternative of buying back our stock is something we think is more attractive, we would certainly deploy capital towards that as well.

Fair enough. So I guess the expectation is you should still have the highest dividend growth rate in group for the next couple of years?

Yes, I think so. I mean we believe we can continue to grow our dividend by at least 20% per year for the next several years, which as it stands today should certainly lead the industry. We just announced our first quarter dividend, which was 25% higher than the fourth quarter dividend that we paid. But yet it still only represents less than 23% of our projected AFFO for the year. So when you have that dynamic, it allows you to continue to grow it at a nice pace, but still retain plenty of capacity for other investments. And I think that's the path we'll be on here for a number of years.

Great. It sounds great. Brendan, thank you for taking the time with us today, and with investors. And Mark, thank you.

Great. Thanks, Greg. Appreciate it.

Thank you.

Bye.

Bye.