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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, and welcome to Getty Realty’s Earnings Conference Call for the First Quarter 2022. This call is being recorded. [Operator Instructions]
Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the Company, will read a safe harbor statement and provide information about non-GAAP financial measures.
Please go ahead, Mr. Dicker.
Thank you, operator.
I would like to thank you all for joining us for Getty Realty’s First Quarter Earnings Conference Call.
Yesterday afternoon, the company released its financial results for the quarter ended March 31, 2022. The Form 8-K and earnings release are available in the Investor Relations section of our website at gettyrealty.com.
Certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to trends, events and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
Examples of forward-looking statements include our 2022 guidance and may also include statements made by management in their remarks and in response to questions, including regarding the company’s future operations, future financial performance and the company’s acquisition or redevelopment plans and opportunities.
We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. I refer you to the company’s annual report on Form 10-K for the year ended December 31, 2021, and our other filings made with the SEC for a more detailed discussion of the risks and other factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.
You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. The company undertakes no duty to update any forward-looking statements made -- that may be made in the course of this call.
Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures, including our updated definition of adjusted funds from operations or AFFO and our reconciliation of those measures to net earnings.
With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.
Thank you, Josh.
Good morning, everyone, and welcome to our earnings call for the first quarter of 2022. Joining us on the call today are Mark Olear, our Chief Operating Officer; and Brian Dickman, our Chief Financial Officer.
I will lead off today’s call by providing commentary on the quarter, highlight the company’s investment and capital markets activities, and discuss our outlook for the remainder of the year. As usual, Mark and Brian will take you through the portfolio and the financial results in detail.
Our solid first quarter results again demonstrated the successful execution of our strategy, which delivered durable cash flows from our operating portfolio, combined with attractive growth from external opportunities. Our strong 2021 acquisition activity, combined with contractual rent escalations and contributions from our completed redevelopment projects resulted in base rental income growth of 8.8% for the 3 months ended March 31. Our adjusted funds from operations or AFFO increased 12.5%, and our AFFO per share of $0.52 represented a 6.1% increase over the prior year’s quarter.
Year-to-date, the company has invested approximately $53 million, including the acquisition of 2 convenience stores for $7 million during the first quarter; the acquisition of 10 car washes and 1 convenience store for $43 million subsequent to quarter-end; and approximately $3 million of total development funding year-to-date across 4 projects, including both new-to-industry convenience stores and car washes.
We ended the year with a robust investment pipeline across a number of our target asset classes. We are remaining disciplined in our approach as we work through these and other opportunities. Our strategy is to acquire high-quality real estate across the convenience and automotive, retail and service sectors and to partner with strong and growing regional and national operators. Considering these factors, we are optimistic about our ability to continue executing on our investment strategy as the year progresses.
I am also pleased with our recent capital markets execution, including our credit facility refinancing and ATM equity issuance in the fourth quarter of 2021 and the 2-tranche $225 million debt private placement we completed in the first quarter, which position us well to fund our growth pipeline.
Turning to the convenience store sector, which continues to represent approximately 3/4 of our ABR, the National Association of Convenience Stores, or NACS, recently published its annual State of the Industry report, reaffirming the resilience in consumer demand for the overall convenience store sector.
Based on the NACS annual survey data for convenience stores across every region of the United States, 2021 was another strong year for inside store sales, which grew more than 8% and reached a record $280 billion. Similar to last year, the NACS survey highlighted a 6% increase in the average basket size or dollar spent per transaction in the store, which is impressive as the prior year’s increase was up 15% due to pandemic-related shopping.
Customer visits also rebounded during the year as consumers returned to normal in-store shopping patterns. Perhaps most important for the overall convenience store sector was the return of strong foodservice sales, which were up 24% year-over-year after declining during 2020. For 2021, the NACS data indicated that foodservice represented 22.5% of total inside sales and 35.5% of overall store gross profits, both record levels for the overall industry.
On the fuel side of the business, the good news is that consumers and commuters drove a recovery of fuel volumes in 2021, which saw total fuel gallons sold increase 4.4% and close the gap to pre-pandemic levels as 2021 fuel volumes nationally were only 7.2% below the 2019 levels.
For this year, despite the recent volatility in the oil market and rise in retail prices, industry reports suggest that fuel volumes are continuing to recover and that the average fuel gross profit continues to be healthy and generally in line with the recent year’s performance.
In general, despite the inflationary pressures impacting the broader U.S. economy, including our tenants’ businesses, I am pleased that Getty and our tenants continue to operate successfully and without material adverse effects to date. However, we will continue to monitor our business and proactively communicate with tenants in our portfolio to better understand any changes to industry fundamentals as the year progresses.
Our team remains as focused as ever on the growth of this company, and we are working diligently to source and underwrite new opportunities in strong metropolitan markets across the country as well as to unlock embedded value through selective redevelopment. We believe our success year-to-date and our current pipeline demonstrates our ability to source opportunities that align with our investment strategies and that we are in a position to continue driving additional shareholder value as we move through 2022 and beyond.
With that, I’ll turn the call over to Mark to discuss our portfolio and investment activities.
Thank you, Chris.
As of the end of the first quarter, our portfolio includes 1,003 net lease properties, 5 active redevelopment sites and 6 vacant properties. Our weighted average lease term was 8.7 years, and our overall occupancy, excluding active redevelopments, was 99.4%.
Our portfolio spans 38 states across the country, plus Washington, D.C.; and our annualized base rents, 64% of which come from the top 50 MSAs in the U.S., are well covered by our trailing 12-month tenant rent coverage ratio of 2.6x.
In terms of our investment activities, we have completed $52.8 million of investments year-to-date. This reflects $8.8 million of acquisitions or development funding for 3 properties in the first quarter, including the sale leaseback of 2 convenience stores in Connecticut. Properties which were acquired for $7 million are subject to a 15-year unitary lease with global partners.
We also advanced $1.7 million of development funding for 1 new-to-industry property during the quarter. The project is with Splash Car Wash for the construction of an express tunnel wash location in the New Haven, Connecticut MSA. As part of this transaction, we will accrue interest in our investment during the construction phase of the project, and we expect to acquire the property via sale leaseback transaction upon completion and final funding.
Aggregate cash yield on our first quarter investments was 6.6%. Subsequent to quarter end, we invested $44 million in 12 additional properties.
Highlights of our recent investments include: closing on the acquisition and leaseback of 8 express tunnel car wash properties in the Austin, Texas MSA with Go Car Wash for $36 million; acquiring 2 additional properties from Splash Car Wash, which are located in New York, for $6 million; acquiring 1 convenience store location in the New York City MSA for $1.1 million; and providing approximately $1 million of development funding for Splash Car Wash for another new-to-industry car wash. This one in the Kingston, New York MSA, which we expect to acquire upon completion.
The weighted average lease term of the properties acquired year-to-date was 14.8 years, and the aggregate initial cash yield on our year-to-date investment was just north of 6.5%. We began 2022 with a robust investment pipeline comprised of a diverse set of asset classes and prospective tenants.
During the quarter, we saw the amount underwritten by our investment team continued to increase year-over-year. Convenience stores represented approximately 33% of our underwriting, with the remaining 66% being focused on other automotive and retail categories. While it can be difficult to control the timing of direct sale leaseback transactions, based on our current visibility, we remain confident that the pace of investment activity will accelerate as the year progresses.
We continue to pursue direct sale leasebacks, acquisition of net lease properties and funding for new-to-industry construction. We remain committed to our core underwriting principles of acquiring high-quality real estate in major venture markets and partnering with strong tenants in our target asset classes.
Moving to our redevelopment platform. During the quarter, we invested approximately $400,000 in projects which are in various stages in our pipeline. We have 7 signed leases or letters of intent, which includes 5 active projects, 1 project at a property which is currently subject to a triple net lease and has not yet been recaptured from the current tenant, and 1 signed letter of intent on a vacant property. The company expects rent to commence at these and other projects over the next several years, including later in 2022.
Turning to asset management activities for the first quarter, we sold 15 properties, realizing $10.2 million in gross proceeds and exited 1 lease property. 14 of the properties sold in the first quarter represented the closing of the second tranche of the planned divestiture of a portfolio to the existing tenant in upstate New York.
We will continue to slightly dispose of properties that we determine are no longer competitive in their current format and do not have a compelling redevelopment potential.
With that, I’ll turn the call over to Brian to discuss our financial results.
Thanks, Mark. Good morning, everyone.
Just a reminder that we are reporting AFFO under the revised definition we implemented at the end of last year, which adds back stock-based compensation and the amortization of debt issuance costs.
We reported AFFO per share of $0.52 for the first quarter of 2022, representing a year-over-year increase of 6.1% versus the $0.49 per share we reported in the first quarter of 2021. FFO for the quarter was $0.49 per share as compared to $0.44 per share in the first quarter of ‘21. Our total revenues were $39.3 million for the first quarter, representing a year-over-year increase of 5.5%.
Base rental income, which excludes tenant reimbursements, GAAP revenue adjustments and any additional rent grew 8.8% to $35.8 million in the first quarter. Strong acquisition activity over the last 12 months and recurring rent escalators in our leases were the primary drivers of the increase, with additional contribution from redevelopment projects that were completed last year.
On the expense side, G&A costs were $5.1 million for the first quarter, a decrease of $400,000 compared to the first quarter of 2021, which included approximately $500,000 of retirement and severance expenses. Excluding those costs, G&A increased marginally year-over-year as a result of increased personnel costs.
Property costs declined in the first quarter of 2022 due to lower property operating expenses, which included both a permanent decrease in nonreimbursable expenses and the timing impact of certain reimbursable expenses. These decreases were partially offset by increased leasing and development costs, primarily $230,000 of demolition costs for active redevelopment projects.
Environmental expenses, which are highly variable due to a number of estimates and noncash adjustments, declined to a credit of $100,000 for the quarter versus a $500,000 expense in 2021 due to lower legal and professional fees and changes in net remediation costs.
Turning to the balance sheet and our capital markets activities. We ended the quarter with $625 million of total debt outstanding, which consisted entirely of fixed-rate senior unsecured notes with a weighted average interest rate of 4.1% and a weighted average maturity of 6.9 years. There were no amounts drawn on our $300 million revolving credit facility at the end of the quarter.
As of March 31, net debt to EBITDA was 4.6x, and total debt to total capitalization was 32%, while total indebtedness to total asset value, as defined in our credit agreement, was 35%.
As previously announced, we closed on a private placement of $225 million of senior unsecured notes during the quarter. The first tranche, which funded on February 23, included $100 million of notes bearing interest at a fixed rate of 3.45% and maturing in February 2032. The second tranche, which will fund in January of 2023, includes $125 million of notes that will bear interest at a fixed rate of 3.65% and mature in January of 2033.
Proceeds from the notes funded at closing were used to repay all amounts outstanding on our revolving credit facility and to partially fund our year-to-date investment activity. Proceeds from the delayed funding notes will be used to prepay in full our $75 million, a 5.35% unsecured notes due in June 2023, with the balance used to fund investment activity.
We did not issue any shares under our ATM program in the first quarter.
With low leverage, cash on the balance sheet and undrawn revolver and committed 2023 debt financing at an attractive rate, we believe that our balance sheet and overall credit profile are in great shape and position to fund the company’s growth as we move through 2022.
With respect to our environmental liability, we ended the quarter at $47 million, which was a decrease of more than $600,000 from the end of 2021. For the quarter, our net environmental remediation spending was approximately $1 million.
Finally, as a result of our year-to-date investment activity, we are raising our 2022 AFFO per share guidance to $2.10 to $2.12 per share from our original guidance of $2.08 to $2.10 per share.
As a reminder, our guidance includes transaction activity to date, but does not otherwise assume any potential acquisitions, dispositions or capital markets activities for the remainder of the year. Specific factors which continue to impact our AFFO guidance include variability with respect to certain operating and deal pursuit costs; and approximately $400,000 of demolition costs related to redevelopment projects, which runs through property costs on our P&L.
With that, I will ask the operator to open the call for questions.
[Operator Instructions] Our first question is from Todd Thomas with KeyBanc Capital Markets.
Just first question -- a couple of questions around investments here. It sounds like a pretty healthy pipeline that you’re looking at. Can you talk a little bit more about the flow of deals that you’re underwriting? And also whether or not you might expect to see a little bit of an air pocket in offerings, I guess, later in the year, just given the increase in borrowing costs.
This is Mark. So first part, with regard to the pipeline, as we stated, we’re ahead of where we were at this time last year. The team continues to grow the pipeline of opportunities, which hopefully allows us to perform on more of those opportunities and remain committed to our underwriting standards that we’ve explained. We’re ahead of last year, like I said. The widening of the buy box conclude all automotive, retail and service categories, in addition to C-stores, has given us a lot of additional visibility to keep growing that pipeline.
With regard to, I think, the pace, we’re not seeing any an indication that the pace will materially increase or decrease as we get through the year. We’ll just have to -- our goal is to kind of keep that steady. [Indiscernible] along the pace throughout the year and to continue to source actual deals.
Okay. I guess, so last year was a pretty big year of investment, about $200 million. I realize that investment activity can be a little bit lumpy and unpredictable, but the balance sheet is in good shape.
And I guess I’m wondering if you would anticipate a similar year to ‘21, and if you can maybe provide a little bit of a sense or a bookend what we might expect. And also, curious if you’ve changed your return hurdles at all as you’re underwriting new deals.
So to give you some perspective, 2020, we invested $150 million. 2021 was $200 million. Obviously, as Mark was saying, we’ve expanded some of our underwriting to include other automotive retail asset classes. So we continue to underwrite more. We expect our ability to grow, to continue that same momentum that we have, but we don’t give formal acquisition guidance. I don’t want to go too much further than that.
From a return perspective, again, we’re fortunate that we raised a considerable amount of equity for Getty. In the fourth quarter of last year, we closed on the private placement that Brian talked about in the first quarter. So we’re funding transactions off the balance sheet at this point. So we expect our ability to lock in an attractive spread to continue as the year progresses.
Okay. And then on the cap rate for investments completed during the quarter, I guess, really in April also. I think I heard 6-something. The audio went in and out a little bit. What was the cap rate on investments completed year-to-date?
Sure. First quarter was 6.6%, and it includes all the year-to-date activity. The commentary was that it’s greater than 6.5%.
Okay, great. And last one, Brian. You mentioned a permanent decrease in some nonreimbursable expenses in the quarter. What was that? And what impact did that have on full-year guidance?
Yes. So it’s primarily rent expense, Todd. As you’ve seen over the last several years, as we have leased properties that come up, right, where we’re in a sandwich position, we’re typically exiting those leases. There’s marginal profitability to them, but generally, that’s in line with sort of our asset management strategy, among other things.
So the bulk of it is reimbursable expenses. And that was about, just looking at our disclosure in our deck, that was a couple of hundred thousand dollars year-over-year. And then there was just a little bit of a decrease in some other nonreimbursable expenses, which is typically taxes or maintenance and the like at the few vacant properties we have.
Our next question is from Brad Heffern with RBC Capital Markets.
It sounds like the site-level financials stay strong, but I’m curious if there are any potential corporate-level tenant credit issues that you’re watching. I would assume that some of them likely have exposure to variable-rate debt.
Yes, we really haven’t seen any corporate tenant issues come across our asset management curve to date. One of the big takeaways from us coming -- I need too far back. But going through COVID, right, was really the ability to proactively work with tenants, if we see something going on either on a corporate level or a site level in their financials. And I can say to date, we haven’t seen anything that concerns us.
Okay. And then in terms of new deals, has there been any sort of change in competition? It seems like, if anything, the cap rates might have compressed a little bit more. But do you think you’ll see bidders falling out because of the higher rate?
I think you see -- well, first of all, there’s still a tremendous amount of capital flowing into retail net lease, including our asset classes from both public and private competitors. I think what you’re seeing perhaps is more pricing discipline or the start of more pricing discipline in some of the transactions that we’re bidding on. And I think we’d expect that to continue as everyone’s borrowing costs increase over time.
Our next question is from Sarah Barcomb with BTIG.
This is Sarah Barcomb on behalf of Mike Gorman. Going off the previous question, could you dive a little deeper on the competition you’re seeing in the convenience and gas market versus the other auto market and anything that’s influencing that 33%, 67% pipeline?
Well, I think the reason for the pipeline disclosure in our commentary was really around the strategy, which we started to talk more about last year, which is really focusing on broadening, not only -- or focusing on not only acquiring C-store assets, but broadening to automotive retail assets or just retail at least.
And I’m actually very pleased with the activity coming across from Mark’s group, where we’re seeing, not only a similar amount of opportunities in the C-store sector, but this quarter that we saw 2/3 of our opportunities come from non-C-store related assets. Just speaks to the team’s work in terms of building out, whether it’s business development or sourcing of opportunities that are maybe newer at Getty.
Okay, great. And then could you give a quick update on expectations for G&A this year? I know on the previous call, you mentioned that you were expecting about 4% to 5% growth over last year. Does that remain the same?
Yes, this is Brian. No change to our view on G&A for the year. We’re right in line for the first quarter, and I would expect a similar run rate.
Our next question is from Joshua Dennerlein with Bank of America.
Can you remind us of the mix between fixed rent bumps and inflation rent bumps within your portfolio? And then on a related note, as you’re kind of looking at new acquisitions, has the underwriting changed at all in response to rising inflation?
This is Brian. I’ll hit the first part, and I’ll use the opportunity to plug some of our supplemental information that we started to include at the -- in the back of our corporate profile. There’s some details on the P&L. Todd, I was referencing that to your question on Page 30, and that we do have a distribution of our rent escalation on Page 28.
But to answer the question, we’re about 99% of our leases overall. So substantially all of our leases are subject to some rent escalation. Of that amount, a little bit more than 88% are fixed. The bulk of those are annual, about 2/3. And then the balance, about 11%, 10.5% of our rent is subject to CPI, which is really 1 or 2 leases. They do have caps on them, but that’s our distribution and the composition of our escalators.
Yes, it’s Mark. As far as underwriting, our core underwriting hasn’t changed in quite some time. And we’re going to remain committed to it as far as what we like, how we underwrite, how we view properties, underlying real estate quality, markets, tenant operational quality, balance sheet. Specifically, we’re trying to leverage the market on any deal point and every deal point and certainly to our favor.
So when and if we can push harder on whether it’s cap rate, rent bumps, other deal terms for -- that kind of lend to a total value return, we’re taking every advantage that we can on those terms.
I appreciate that. Is the market changing at all for maybe what people are willing to put into sale-leasebacks as far as like bulk.
I think what you’re seeing -- I mean, I think it what Todd that asked the question is, I think you’re seeing more discipline, right, in the buyer world and more receptivity, right, to negotiating certain transaction terms. I think at this point, it’s hard for sellers, right, and buyers to ignore what’s happening in the broader economy. And that’s certainly translating into, as Mark said, discussions around -- or negotiations around certain key points.
Our next question is from Wes Golladay with Baird.
Is it fair to assume the main governor on deal volume at this point is just the cost of equity? And how high would you take leverage at this point?
Well, this is Brian, Wes. I don’t -- governor, I don’t think that’s necessarily right, point in time today, right, given what we’ve emphasized here, the balance sheet, revolver capacity, cash on hand, leverage levels, et cetera. Typically, in response to that question, we talk about our mandate, the quality, the space, and really just the rigor of our underwriting in terms of getting things through the bottom end of the funnel, as it were more, so than cost of capital point in time today.
So I guess that’s how I think of that. In terms of leverage, we have some runway here, right? We’ve always stated -- or for as long as I’ve been around, stated 4.5 to 5.5x. We’re at the bottom end of that range. I think we have an asset class that could bear the burden of slightly higher leverage. I think there’s a little bit of room just broadly, and you think about market expectations above 5.5%. But I think the shorter answer is no change to our philosophy or really how we want to execute.
We certainly have some runway here, again, as we’ve articulated. And look, if we continue to execute, as we continue to execute, hopefully, we’ll see a little bit of a rebound in the stock price, and that won’t be an issue when we get to raising incremental capital. But in the near term, we’re sticking to what we’ve been doing, focused on executing, and feel like we’ve created the runway, from a capital perspective, to do that.
Okay. And then when we look at the volatility of the oil prices of late, do you expect any impact on the margins of your tenants, and I guess, overall tenant coverage as we start to cycle through the next few quarters?
Yes. Long term, Wes, the answer is no, right? I think week-to-week, right, there’s certainly variability in margins, given the movement in the price of oil or the wholesale costs that our tenants are paying for product. But when you smooth that out to a couple of week average or a month average, it’s still right in line with where it’s been in the last couple of years. And layer on top of that, rate volumes are trending back up as people are driving more, going on vacations, commuting to work. So we don’t see that as an issue today.
Sorry, what was the second part of your question? I forget.
If it was going to have any impact on the -- I guess, when we look at the margins and the -- or the tenant coverage going forward. When you look at the trailing 12-month tenant coverage, would that start to have a little bit of leakage is what I’m looking for.
We don’t see it today.
Okay. And then when we look at the rising interest rate environment, more specifically for the sale-leaseback transactions, do you see any, I guess, pocket of weakness in the M&A transactions that could lead to sale-leaseback deals?
That’s an interesting question. I think M&A for our target asset classes has been very frothy, both in the C-store and car wash sector. To the extent that borrowing costs or overall leverage rent rates come down and valuations get less attractive, I think that could benefit sale leaseback providers like Getty. Not to say we’ve very seen a lot of that to date. But by the time it filters through, it definitely could help.
Our next question is from Mitch Germain with JMP Securities.
Just curious about the competitive landscape in the development funding business. Is it a relationship-based business? Or is there kind of a bidding war going on with some of these sites?
Yes. It’s a little hard to hear, but I think we view it as a relationship business. We can provide a different type of financing, which ultimately gets Getty to the same place where we own the property at the end of the day to our existing relationships. And it’s very helpful from a repeat business standpoint.
And our tenants, they like the product. And it’s a way for us to continue to expand our relationships with those operators that we like in our various sectors.
Great. And the guidance increase, is that just really the deals coming in sooner than anticipated? Is that the way to think about it?
It’s really just the deals closing, right? So we do point in time, look forward guidance, so it’s anything that’s close point in time. So obviously, as we were sitting in February, we didn’t have the same volume that we had closed as of last week, or really, I guess, as of today as we put the guidance out.
So as we’re closing deals, raising capital, as the case may be, we’ll continue to adjust our guidance throughout the year as we go.
Our next question is from John Massocca with Ladenburg Thalman.
Most of my questions have already been answered. I also -- just maybe one -- kind of clarifying a point, I think, you made earlier in the call. As we think about some of the acquisition volume that was done subsequent to quarter end, should we feel that’s going to get match funded with kind of equity on the ATM? Or do you feel you’re in a position from a leverage perspective to basically just deploy kind of available liquidity?
Well, John, it’s Brian. Specific to that set of activity, that was just cash off the balance sheet. So as Chris mentioned, we raised for us a meaningful amount of equity in the fourth quarter, and really, last year. About $95 million in ‘21. We did the private placement in February. So as we’re sitting here today -- or as we were sitting here, coming into this set of activity, you cash on the balance sheet. And we did sell some assets both in the fourth quarter and here in the first quarter in the fourth -- first quarter behind us, the 1031 activity.
So from a liquidity standpoint, from an available capital standpoint, we are funding activity -- deal activity now, really, just right off the balance sheet. And as we move forward throughout the year, as we typically would, you’ll see us use the revolver to fund that activity and appropriately, opportunistically, as needed, as feels warranted, we will look to utilize the ATM again as we always have. But point in time when you’re sitting at just north of 4.5x with an undrawn revolver, cash and some 1031 proceeds on the balance sheet, we’re just funding right from those sources.
Okay. That makes sense. And then you kind of talked about it a little bit there in your answer to the first question. But is there an opportunity for maybe some more programmatic granular dispositions? It just feels like given some of the dynamics in the marketplace, with a still strong 1031 market, but maybe some of the levered buyers who tend to buy bigger portfolios being kind of squeezed by interest rates. Maybe there’s an opportunity to do kind of bigger deals and fund some of that with one-off sales. Just any thoughts around that?
Yes. We’ve been selling, obviously, this portfolio, which was -- the 2-tranche deal was a unique set of circumstances. But we’ve been selling over 10 to 20 properties a year. Generally, they’re on the lower tier of what we consider good quality. We are deploying those proceeds. I don’t think you’ll see us really ramp up dispositions in the near term, but certainly, a possibility.
There are no further questions at this time. I would like to turn the floor back over to Christopher Constant for closing comments.
Right. Well, thank you all for joining us on our first quarter conference call. We look forward to getting back on, everybody, when we report our second quarter in late July.
Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.