Peaks & Portfolios
Market volatility.
Geopolitical tensions.
Regulatory changes.
Interest rate fluctuations.
Rising construction costs.
Tightening debt markets.
The list continues…
Navigate the rugged terrain of today's ever-evolving commercial real estate investment landscape with a 360° view from the top. Peaks & Portfolios: Presented by PEG Companies summits a new peak each week, exploring current events and headlines, trends, issues, and opportunities impacting the CRE investment space. Scale to new heights in your investment journey with host Rachel Oh and leading experts as they trek toward the promise of prosperous portfolios here in the Mountain West region and beyond.
Tune in now and elevate your CRE investment game!
Peaks & Portfolios
Building Through Bonds: Innovative Financing Strategies in Real Estate
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Explore the evolving dynamics of debt and financing in real estate investment with insights from Brad Andrus, Founding Partner of Bridge Investment Group, and Lauro Garcia, Senior Vice President / Managing Director for Stern Brothers. Andrus shares lessons from navigating multiple recessions, emphasizing how downturns can reset markets and create prime buying opportunities for agile investors; particularly through alternative financing methods. Garcia brings a fresh perspective, explaining his innovative use of taxable bonds for construction and acquisition financing. By leveraging traditional banks for letters of credit and issuing fully assumable bonds, he offers a strategic win-win approach for borrowers and lenders. Tune in for expert strategies to thrive in today’s shifting real estate investment market.
Welcome to Peaks and Portfolios presented by PEG Companies, your go-to podcast for all things commercial real estate investment. I'm Rachel oh, and together we're diving into current events, trends, issues and opportunities impacting the CRE investment space, from dissecting the latest market moves to sharing insights on today's commercial real estate landscape. It's time to maximize portfolios here in the peaks of the Mountain West and beyond. Okay, everyone, welcome back to Peaks and Portfolios high up here in the Mountain West. Back to Peaks and Portfolios high up here in the Mountain West.
Speaker 1Today, we're so honored to have not one, but two guests joining us, and we're going to be talking about debt and financing, which is such a crucial part of any commercial real estate investment. We know it's quite challenged. You know you've got costs that have increased, you've got the interest rates. We don't know what the Fed is doing half the time, and yet you know business must go on, things must happen, and so we're so fortunate to have two very seasoned and experienced real estate professionals, specifically around structured finance, that we're going to be tapping into a bit today. So I wanted to introduce them both, our good friend and partner to pet companies, brad Andrus, who is the founding partner and right now emeritus status of Bridge Investment Group, which has now a $50 billion plus AUM real estate fund manager. And we also have joining us today Laura Garcia, senior Vice President and Managing Director at Stern Brothers. He is a veteran investment banker and a nationally recognized expert in tax-exempt and taxable multifamily housing and bond financing. That is a mouthful right there. So, gentlemen, welcome to Peaks and Portfolios today.
Speaker 2Thanks, rachel, good to be here.
Speaker 1So, brad, let's start with you. You've been through a few different market cycles, you know. Since launching Bridge in the 90s, you've seen a lot of ups and downs. I am just curious if you wouldn't mind sharing, you know, your analysis of today's market and how it's different than maybe what we have experienced historically.
Speaker 2Well, you know, after going through maybe five recessions, I found that everyone is completely different and yet you think the sky is falling on every occasion. But with respect to bridge, you know, the good thing about setbacks or when the market resets itself, is that that's usually when the best buying opportunities are and even though it's kind of a dark time, when you're going through that recessionary pullback, those are the best buys. This one is very unique. Obviously, what happened in 2008, 2009, and 2010 was brutal, but that's when, really, bridge launched into the fund management world, so that presented a great opportunity. But those were some dark days, which is why I really wanted Laurel to participate with us, because he was one of the best sources of financing out there during the GFC.
Speaker 2But I'll take it to what's going on right now. Interestingly, the COVID changed so much, and everybody knows that I have found that the hardest time that we have seen in the real estate industry is 22, 23, post-covid, because the raising capital became so difficult and everybody's kind of in a position where they don't know if prices have truly reset itself or if the prices have found a bottom. But I'm happy to say now we're starting to see green shoots and it looks like we're on the mend right now.
Speaker 1Yeah, I would agree. At least that's the same sentiment that we're having here. And thank you for pointing out that 2022, 2023 was a hard equity raising year, because that's my role here at PEG and I have never seen anything like it. But conversations are changing and there is definitely. You know, pencils are back up and I mean things aren't penciling exactly the same, but I think people are approaching it differently, which I think having Loro on today, you know, to help kind of steer us through this. So that would be great. You know, I would love to, if you wouldn't mind, loro maybe giving us kind of a primer on just real estate debt in general. So meaning, we have a lot of different listeners here on our podcast, but would you mind just kind of peeling it back to kind of like you know, what does traditional debt look like in a deal?
Speaker 4Well, traditional debt is your conventional construction loan, where a bank goes and gets deposits back out to a developer or an owner and charges you a spread. The difference between that approach and what I do and I've been doing it since my 41st year is that instead of the bank going to their vault for the money, we utilized their letter of credit and I raised the money from the capital market. So on a conventional deal, we'd go to the taxable bond market, which is well over $4 trillion deep, and on a tax-exempt deal, we go to the tax exempt market. So the difference is you know primarily that where the money comes from, everything else is the same. On these development deals that you know the developers are accustomed to, the appraisal, construction cost review, you know equity partner all of that is the same.
Speaker 1Yeah, no, that's super helpful. So, Brad, I know that you've structured a lot of deals in your lifetime, and obviously especially at Bridge. Tell me how you kind of I don't know if you've transformed from doing the traditional debt approach and leveraging more of what Laurel has to offer, or did you continue to do both? Or tell me a little bit about that genesis.
Speaker 2Yeah, happy to, and Bridge and all of the primary sources would tap into. On development loans using banks and bank deposits, as Laurel mentioned, where we have found to be where Laurel's program really has its advantages, from my perspective, is when the market pulls back, banks become concerned about lending, and what's presented itself right now is that you know the banks are holding on deposits for dear life and so if they're not having runoff on their portfolio of refinances, you know they can't churn their balance sheet, and so then deposits become very, very precious and, as you guys have seen, anytime you want to borrow from a bank more so now than ever before they require you to park a tremendous amount of deposits. In fact, it feels like they're basically lending us our own money. Right, that upside down. That's where the taxable bond structure works. Great, because, as Laurel mentioned, we're not utilizing deposits. It's really the leverage off the federal home loan bank, that advantage for us.
Speaker 2On the developments, I think, laurel, we've probably done maybe eight or nine development deals through our opportunity zone, primarily because that's where we're doing most of the development at Bridge, and the advantage was that, you know, number one, we don't have to go park all those deposits because everyone wants them and so you can't pull from one bank and go to another.
Speaker 2So that was a real advantage. Where there wasn't kind of a handout for deposits, the guarantee structure is much lighter. But the real advantage, where there wasn't kind of the handout for deposits, the guarantee structure is much lighter. But the real advantage is you can get full proceeds. So right now in the conventional market lenders, banks will want to go 50, 55 percent loan costs and that's pretty hard to make deals work at leverage point, especially where interest rates are. And so Laurel's program has generally gotten us to 70%, 75% loan-to-cost. And the other advantage is, rather than having to go out and retire a construction loan, move into a refinance with another lending source, we just keep the bonds in place, and so it's basically what we would call in the old days, you know, a combination financing for perm or for construction and perm.
Speaker 1Yeah, yeah, well, hey, it sounds like a home run to me. Is this something, then, that's quite prevalent in the marketplace? I'll be honest, I don't play in the debt market as much. I focus on the equity. Obviously, the debt is huge and it plays into how the returns pan out and everything. But is this something really really common, because this is the first I'm hearing about it? But, again, I don't play in the debt as much.
Speaker 2Well, I'll turn it over to Laurel in a minute because he thinks he's got the best program out there and everybody should be doing it. But from my perspective that's the conventional market. He is what I would call a nonconventional source of financing and so it's not really prevalent and out there. But you know, laurel has amassed multiple banks that have come into this program and one of your dear banks and friends of Peg's, which is Brent Beardall.
Speaker 1Oh yes.
Speaker 2You know right, brent he was. We did the first deal together where I introduced Brent to Laurel and I'll let Laurel tell the story about how quick. Brent figured this out, that this is a real advantage. And then we did one of our developments in downtown San Francisco using Washington Federal Bank and East West Bank and it was a great combination play, but maybe, Laurel, you can kind of just. That was a good example of how you introduced a bank to this program.
Speaker 4Yeah, I've been doing the bond structure since 1984, and I'm just going to go back historically because it's kind of relevant. In those days there were actually believe it or not AAA-rated banks in the United States. So we would take the banks that are of credit, issue bonds and then the bank would lend the money to the developer, but then the credit ratings changed, the market changed, and then the bank would lend the money to the developer, but then the credit ratings changed, the market changed and we had domestic banks, like Bank of America, that were AAA. They were Japanese and German banks. I don't know of a AAA bank that still exists, but that's probably because I haven't done my research. Right, right right.
Speaker 4In the early 90s and what was really important and this is really relevant to regional banks- Yep. Regional banks, you know, were at kind of a disadvantage in their access to capital. So I took a regional bank letter of credit which is what secures the bond where the money comes from. Okay.
Speaker 4And I wrapped that letter of credit which is not rated. But strong banks, multi-dollar banks, wrapped their letter of credit with the Federal Home Loan Bank letter of credit. Every regional bank in the country has a line with their Federal Home Loan Bank with Atlanta. New. York, San Francisco, Dallas they all have these lines and the ability to do this structure. The real challenge is finding the person at the bank that isn't square pegs for a hole and wants to swap bonds and their eyes don't glaze over.
Speaker 4I've taken and one of the leaders in the industry is East West Bank. They've done more than anybody else with this structure and we've done hundreds now and they've been really, really good at modeling and showing banks how this is done, and sometimes it takes me, you know, two years to get all the way through the, where the, the folks at the bank and the executive committees and loan committees all understand this. One thing I'll say is Brent Beardall was a very good friend of mine too. He got it in about seven and a half minutes. He said wait a minute, he's brilliant. It's a contention liability and it's free income.
Speaker 1Sign me up. Yeah, no, I mean Brent. Listen, we've had him on our podcast. He's quick to make decisions. He's not afraid of to your point square peg, maybe in a round hole, and is able to quickly decipher and analyze. So I am not at all surprised that it took him only seven and a half minutes to parrot to other folks.
Speaker 1am not at all surprised that it took him only seven and a half minutes to parrot to other folks. So tell me if you guys wouldn't mind walk me through. I know you just described, I believe, the San Francisco deal, but walk me through something that really pinpoints and describes how this was a solution to a conventional loan not working out and where it stands today.
Speaker 4What Brad touched upon earlier was, you know, the deposits and all, and recently, what happened with Silicon Valley Bank.
Speaker 1Signature and other banks.
Financing Real Estate Development Structures
Speaker 4First Republic was that. You know the market seized up because they you know the people were worried about their deposits. You know what was were worried about their deposits and you know what was going to happen to deposits In our. You know, in our case we kept doing business because we didn't have to access deposits. I accessed the commercial paper market and the buyers of these bonds are very large institutions, mutual funds, banks and insurance companies that want to park their money get a return but want security.
Speaker 4When you take a bank and wrap their letter of credit, which is a security for the bond issue, with the federal home loan bank letter of credit, then they have an A1 plus rated. You know security and they don't worry about.
Speaker 4you know about getting their money back. So, just fundamentally, the structure and everything going into the structure is the same as any conventional loan developer for a construction, refinance, permanent loan. Anything in the apartment space because I specialize in the apartment space comes to the bank, they do an appraisal, they do a construction cost review review of financials and then issue clearly the term sheet which gives me the dollar amount of the bonds.
Speaker 4Once that's established, I pull my team together which is a team that you know very, very well-known law firms like Oric Harrington, and we pull together and structure the bond issue which closes concurrently with and it really is the construction loan, and then those funds are available for construction. The way that the cost of funds is priced is off of the rate of the bonds.
Speaker 4But if you look at the interest rate history, you'll look at today's SOFR and earlier LIBOR that our cost of funds is right on top of that, those costs of funds, that our cost of funds is right on top of that, those costs of funds, so what? Is just the reality today is that our spread on these deals on a construction deal, it's generally $250 to $275 over the bond rate, which is really your SOFR rate for apples and apples. And it's $200 to $225 over on a permanent loan.
Speaker 1Okay and I feel like Brad had mentioned it was like you kind of wrap the construction, the PERM loan, into the same loan. Is that the same way? Is it one loan? Is it kind of a long-term loan? Or do you do what the banks do and kind of do a short-term construction and then we move to a PERM? Is it one loan then for a longer period of time?
Speaker 4Yes, the Federal Home Loan Bank will actually give us a 15-year wraps. Okay, so we offer that. So on a construction deal yes, it's a construction to PERM loan and there's really no timeline. You know, you really kind of anticipate where the construction and stabilization period will be and that's more relevant with regard to guarantees and to the rate generally drops by a quarter of a percent once you're in the permanent phase. But most of our deals are 10-year deals construction to permanent financing.
Speaker 1Which is why Opportunity Zone worked right, brad.
Speaker 2Yeah, yeah, I'll tell you, rachel. The real advantage to the bond structure is that when you go to convert to the perm, you re-appraise it. You're obviously at this point you know you've increased value and now you've got the property, is now cash flowing, so what we can do is then what we call topping it off, which is the real advantage. When you go to expand to the loan, you get the new appraisal and based upon that 75% loan-to-value and wherever the debt coverage ratios are.
Speaker 2Laurel, remind me, is it 125 that you're looking for on the?
Speaker 4coverage. Right Well, it's generally 120 to 125, depending on. Obviously, not all deals are created equal, depending on the size of the project, the strength of the developer and the location.
Speaker 1Sorry, what is that? 100 to 125 again, tell me what that is.
Speaker 4It's usually the debt coverage ratio that the bank uses to size the loan.
Speaker 1Got it, got it, got it, got it.
Speaker 2I mean without getting it, because it can get quite technical.
Speaker 1Yeah, don't get too technical on us.
Speaker 2From a high level, from having done a myriad of these compared to the conventional loans. Yeah, the structure. The reason we love the structure is because you just know where you're going to be on the debt.
Speaker 2And you can expand that debt, and so that's the real advantage for us is that it's really hard, as you guys know, is when you go from a bank loan and you want to roll it into a Fannie or Freddie perm. You know the underwriting starts all over again and you know there are times where maybe your rents are flat for a little bit or you can't even retire the construction loan, which is what's happened, you know, in the last couple of years, given the higher interest rates. So that's a it's a real. For us, it's a safety program because it's not like the bank is going to come back to you and say, well, you got to pay this down. Yeah.
Speaker 2And that's happening with a lot of traditional construction loans. You got to go slap leather.
Speaker 1Yeah, no, it's been challenging for a lot of groups. Obviously, asset class as well. I mean, in our own situation we have a minimal office, some hospitality, but depending on kind of when it was built, and with COVID and et cetera, I mean, fortunately PEG has always been very low leverage. We don't. You know, we're very try to be quite conservative in that regard. So things have, you know, we've been pretty fortunate in that way. But I will say there were, you know, there's an office and a hotel that's had some challenges and so we're trying to figure that out. But that being said so it definitely does not sound like, then, a program for a merchant builder, more of a long-term hold developer, which obviously then Bridge was able to really maximize this during all, because you've done what $2.5 billion-ish or more in Opportunity.
Speaker 2Zone projects. Is that right? Well, they were the majority of our financing for our Opportunity Zone development deals. So yeah, and I will tell you a couple of things. You know, one. We've actually used Laurel's program on an acquisition of an existing apartment complex. There are times where that makes sense. Yeah.
Speaker 2You know, I would say the only downside is if you're doing smaller transactions I think we've said anything less than $30 to maybe $40 million there's bond costs and just the underwriting costs that you have to absorb. So it really doesn't make sense. On smaller transactions and I think Laurel's the sweet spot for us has always been in that $50 to $75 million range.
Speaker 1No, it's a good range. It's a good range.
Speaker 4Yeah, and I just wanted to follow up with what Brad said about the size of the debt. It's really tied to not so much to loan-to-value but to your debt coverage ratio and what the metrics are for that specific bank with regard to the construction debt and the permanent debt. So we are hitting really, really good numbers, but the rate environment we're in clearly affects all of that and where the lender ultimately ends up.
Speaker 1Yeah, so you know we've had. Obviously the market has swung quite drastically or, you know, quite significantly. Development is down. I think everyone is looking and swirling around for blood, although I don't think the blood is there in terms of like acquisitions, and certainly that varies by asset class. Laura, from where your vantage point is and where you're sitting, where are you the most active? Who is reaching out to you and who is taking the most advantage of today's market and what you're able to offer?
Speaker 4We're all over the country. To tell you the truth, I'm busier than I've ever been. It's all the Western. It really depends on the lender's footprint. So I do have over a dozen lenders and different ones are based in different parts of the country and they have a different footprint. But I've done deals recently in Florida and Atlanta, lots in California, Oregon, Washington, Arizona, actually up in Park City. So we're not constrained. The program is not handcuffed by where we can go. The governor there is where that specific bank is willing to make a loan and some of them follow their customers, you know, to different places that they wouldn't normally go to. But I will also say that there are some merchant builders that we do do this, you know, pretty effectively with.
Speaker 1Oh, okay. So it doesn't like a long-term horizon is not required then? No, oh, okay, it's an option, it's an option.
Speaker 4So it's an option of construction to perm. But if you don't want to take the perm, you know the developer has the option of paying it off because the bonds trade at par. Yeah, so there's trade at par yeah. So there's no payment penalty. Okay, and it really is dependent on what the lender puts in place with regard to, you know, any prepays or whatnot, but the bonds are payable at par because they're seven-day bonds. Okay, no, it's so interesting, because they're seven-day bonds.
Speaker 1Oh, okay, no, that's so interesting. I, you know again, I don't deal as much in the debt space. My colleague, who also is an Andrus, has been. But I'm just curious are you the only player in this, Laura? Are there other folks and listen? In my bio notes about you, you are referred to as the godfather of this program. So tell me, who are your competitors? Are there any, and why is?
Speaker 4this not more prevalent. I did the first one with the guy John McCormick of the Federal Home Loan Bank back in the early 90s and as far as I know I'm the most active person. As far as I know I'm the most active person, because people have to, and there are other people that are doing some volume of this, but not as much as I don't think as much as we are at Stern, but it's really because you have to take the time to teach the bank. The real starting point is the bank and getting them comfortable with the structure.
Speaker 4Once they find out about the structure, they love it. Like I say, one took me two years to get through and they've already given me a billion dollars worth of bandwidth to go play with. But it's a contingent liability, it's fee income and it's not dependent on deposits. So those are the three factors that you know a bank you know really, really likes about this program.
Speaker 1Yeah, you know, with all the upheaval, especially you know, the regional banks as you've mentioned out, mentioned earlier about Silicon Valley and First Republic, where do you see sort of the landscape for regional banks and the larger banks moving forward?
Speaker 4Well, right now we're busier than we've ever been because our spreads are better than we're seeing on conventional loans. I have lenders that have construction loans in their portfolio that are offering their clients a bond execution for permanent, and they can offer that at a better spread than they can their conventional loans. So in my small world, that's what I see.
Real Estate Debt Market Trends
Speaker 1That's what I see. I see this as an option for either banks that have another portfolio or developers that are coming out of and need to pay, you know, get their construction loan again. I love hearing about, you know, good spreads and anything that's accretive to the investor. So, brad, you then tapped into Loro. You were able to find Loro and I know that you're on emeritus status, but, kind of from your vantage point, where do you see debt financing moving forward, especially with sort of these? You know changes in the market and you know, I think, interest rates are going to and they're not going to be, where they were, you know, in the last 15 years. So just curious how you see the debt markets moving forward.
Speaker 2Like I said at the beginning, I'm starting to see things moving again where there are now loan payoffs and I think that's what's frozen the regional banks. You just can't make more loans until you get the other ones paid off. And what's happening now is that now there are payoffs and now the banks haven't made. In general they have made probably maybe 20 percent of their normal volume. So now they're going to be gearing up. We're starting to hear that banks are increasing their exposure limits, which is a good thing. So that engine may be going again. But I see the agencies may be getting going again. But I see you know the agencies, um, having you know, put out I don't know what, maybe eight, $10 billion of agency financing.
Speaker 2Over the years it has really changed drastically and I think one of the reasons there it's not that, it's it's it's frozen, it's just they are they. They were always the-all right, they were the lender of last resort and that was the FHFA put them into that position. So there was always financing for housing there. But I think right now they have become far more conservative and they've been really focused on affordable housing. So that's their mandate. So when it gets into the conventional financing, their job is incentivized as if it's a workforce housing deal. So I think that's more the reason where you can see Laurel's program really kind of picking up the slack there.
Speaker 2Yeah, I think a high level. You know the debt funds have been so active. They are still going to be active. There is a concern about what office will do to some of these debt funds that have massive exposure, because if they start having to take those back, then that really breaks the CLO and if that happens it's a house of cards. But that's not the borrower's problem, that's the debt funds issue. But they're still a very active source and I think that the money is starting to come back again. I think we'll look at 25 as a phenomenal year.
Speaker 1I would concur, I think we've had enough of kind of figuring things out. Concur, I think we've had enough of kind of figuring things out and I think things are settling and I think the opportunities are becoming more and more apparent and I do think 2025 year will be a great year, a good vintage. I think we're heading into a good vintage year. Brad, again, you've mentioned five market cycles that you've been through. I always ask my guests this is kind of a parting when do you see the current real estate investment opportunities and what are you most interested in right now? Where are you most active?
Speaker 2Well, I tell you what. The one thing that I would always say lenders in general will always favor those borrowers, like Peg, you know, like the Bridges, that really have a history of strong performance. You know, the weekend warriors, which are the groups that kind of spawn out of the bigger companies and try to do it on their own. That'd be really tough because they just don't have that bandwidth, they don't have the history. So I think that that's one of the things where the cream just rises to the top and I think that's where the best opportunities are. And I will tell you one other advantage for Peg, you know, with with Laurel's program, because he and I made a phone call to a lender as we're strolling down the 14th fairway at Torrey Pines saying would you do a hotel loan on a development deal? Now, laurel, you haven't done a hotel development deal yet, have you?
Speaker 4No, we've done them.
Speaker 2Sure, okay, but lenders generally are not in favor of doing development deals on hotels. But we're happy to say and I can't release the name, but you guys know them well that they are interested in doing the taxable bond financing for hotel developments. But it'll be case by case with somebody who really knows what they're doing. So that bodes well for Peg.
Speaker 1Yeah, no, no, listen, we think that as we're heading into a vintage year for hotel development, you know, with the with pandemic kind of slow, having slowed things down, uh, and you know tourism back up and people starting to travel I mean not starting to, they've been traveling like crazy and hotels are full and occupancies and etc. We definitely think that's going to be a banner cut next couple of years for hotels. Uh, lauro, where you sit, you know you've got a nationwide program, you're dealing with all sorts of asset classes and all sorts of borrowers and et cetera. Tell me where you, you know, from your vantage point, where do you see the real estate opportunities?
Speaker 4Well, I focus on apartments and I think apartments will continue to be a very strong sector, first of all because, with rates where they were where they are today, the single family market's not as big a competition and actually forcing people into apartments. We're really bullish on the apartment space and we're doing new development. We're refinancing deals, so we have done some hotels and that's up to the bank any bank that wants to do it. The Federal Home Loan Bank has a mandate and this is how I got this thing started with the Federal Home Loan Bank. They were getting beat up by Congress in testimony back in the 90s for not creating affordable housing. Well, the Federal Bank loved this.
Speaker 4I mean they actually come to the closing dinners and groundbreaking because they can show where they've been they've assisted in getting housing done. So that's a really big positive Again and the one thing that is working, because we are making new construction deals work and I wanted to touch on this as a forward trend because of the inversion and the forward curve we're able to act to do swaps during the construction and stabilization period, which will give you a 100 basis point advantage over the current rate on your underwriting.
Speaker 4So that helps your debt service coverage going in and helps with the sizing of your loan and getting you closer to 65% loan to cost than the 50 to 55 that Brad talked about.
Speaker 1Yeah, no, we've seen a lot of the 50, 55. So I would love to see more in the 60s Kind of back when I, you know, I've been at Peg now for six years and it's been a bit of a ride, so but it's good to hear. I just think things are stabilizing. I feel like there's just a lot more activity. People are no longer as nervous as they were, I think, where we're just really trying to be, you know, prudent, wise, and you know reading through the tea leaves a bit, but also just moving forward and focusing on the right asset classes, the right geographies. You know all the fundamentals.
Speaker 1So appreciate you two gentlemen sharing your knowledge and your experience, and, and, and Laura, I know, I know that you're working on some things with PEG, so really excited to see some of those things come through. So, uh, gentlemen, thank you so much for joining. You guys can go back to golfing or lounging or whatever it is that you were doing from the peaks of the mountain West. Thank you everyone for joining us on peaks and portfolios by PEG companies until next time.
