CareTrust REIT, Inc.

Good day, my name is Dexter and I will be your conference operator for today. At this time, I would like to welcome everyone to the Care Trust REIT First Quarter 2022 Earnings Conference Call. I'll ask you to stay on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If at any time during the conference you need to reach an operator, please press R0. I would now like to welcome your speaker for today, Ms. Lauren Beal. You may begin.

Thank you and welcome to CareTrust REIT's first quarter 2022 earnings call. Participants should be aware that this call is being recorded and listeners are advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions, and beliefs about CareTrust's business and the environment in which it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, financings, and other matters, and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond their control, such as natural disasters, pandemics, such as COVID-19, and governmental actions. The company's statements today and its business generally are subject to risks and uncertainties that could cause actual results to materially differ from those expressed or implied herein. Listeners should not place undue reliance on forward-looking statements and are encouraged to review Care Trust's SEC filings for a more complete discussion of factors that could impact results, as well as any financial or other statistical information required by SEC Regulation G. Except as required by law, Kirtra Street and its affiliates do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. During the call, the company will reference non-GAAP metrics such as EBITDA, FFO, and FAD, or FAD, and normalized EBITDA, FFO, and FAD. When viewed together with GAAP results, the company believes these measures can provide a more complete understanding of its business, but cautions that they should not be relied upon to the exclusion of GAAP reports. Yesterday, Care Trust filed its Form 10-Q, an accompanying press release, and its quarterly financial supplement, each of which can be accessed on the investor relations section of Care Trust's website at www.caretrustreit.com. A replay of this call will also be available on the website for a limited period. On the call this morning are Dave Sedgwick, President and Chief Executive Officer, Bill Wagner, Chief Financial Officer, and Mark Lamb, Chief Investment Officer. I'll now turn the call over to Dave Sedgwick, Care Trust REIT's President and CEO. Dave?

Thank you, Lauren, and good morning, everyone. Today I'll provide our first update on the progress of the plan to fortify the portfolio by repositioning 32 assets. I'll also give you a brief update on the fundamentals of the operating environment. and I'll conclude with the work we're doing to position the company for accelerated growth in the future. First, last quarter's call we announced plans to sell, re-tenant, or re-purpose 32 properties that, due to the lingering effects of COVID, are hitting the wall now or are anticipated to not be sustainable long term. Of the 32, we're pleased to announce that we have signed leases with Landmark Recovery to re-purpose three of our assisted living properties into substance addiction recovery centers. Assuming the required regulatory boxes get checked during diligence, redevelopment work should start this summer with rents commencing upon completion of redevelopment. Another 27 assets are in the early stages of the sales process. Interest in the properties appears to be in line with our expectations. We may yet decide to retain and retenant select facilities instead of selling them. The remaining two assets of the 32 have not been formally taken to market yet, and we may end up retaining those if a solid gain on sale would not be expected. As deals firm up, we will provide updates along the way, and we should have much more meaningful updates for the process next quarter. Looking to the operating environment, I'm also pleased to report approximately 95% of rent was collected in the quarter, and for April, we collected 93%, So far, May collections appear to be in line with April. Skilled nursing occupancy held stable from Q4 to Q1, currently at 71.4%, compared to pre-pandemic occupancy of 78%, and the low in January 21 of 67%. For seniors housing occupancy, that ticked up 100 basis points, currently at 77%, compared to pre-pandemic occupancy of 84% and a low watermark of 75% as recent as November of last year. The tight labor market continues to put pressure on occupancy recovery and margins, though our operators currently report the worst appears to be behind them. Finally, while reinforcing the foundation of the platform as job one this year, equally important for us is to position ourselves for accelerated growth for years to come. I'll briefly touch on a few ways we're doing that. First, as previously mentioned, the behavioral health asset class not only provides us with a new tool for finding a higher and better use for our own underperforming assets, but it also opens up a high-demand, undersupplied investment opportunity for growth. We're certainly in the early innings of developing the operator relationships necessary for meaningful growth here, but we are excited about the potential for growth in this property type. Second, we've partnered with one of the leading bridge-to-hud lenders in the skilled nursing space to participate in the growth of both operators we know well and best-in-class operators we'd like to form new relationships with. Lending has always really been a relationship play for us, and since giving this more attention this year, we've been happy to see opportunities to build new relationships and put money to work at our historic range of yields. Lastly, we've made some key personnel changes related to growth. We hired Scott Grossman as our vice president of asset management. The addition of Scott with his deep experience in the space is not only perfect timing for executing on the repositioning work this year, but it also allows us to invest more in the future growth by freeing up key talent from portfolio management duties to dedicate 100% of their time to building the operator and investment pipelines with an emphasis on sourcing off-market deals. Skilled nursing and seniors housing has long been a story of winners and losers of different operating models and philosophies. The pandemic has certainly magnified operating strengths and weaknesses. Amid all the noise, there are a lot of success stories. We're better calibrated than ever to find and fuel the growth of the best in class operators, especially those who've proven themselves over the past couple of years. With that, I'll turn it over to Mark.

Thanks, Dave, and good morning. In Q1, we were out of the gate with two tack-on acquisitions with existing operating partners. In February, we closed on a 155-bed skilled nursing facility in Ennis, Texas, with Aduro Healthcare. We purchased the facility for just over $8.9 million, which added just over $800,000 in rent to our master lease. Next, we purchased a skilled nursing and assisted living campus in Decatur, Illinois, We paid just under $13.1 million and increased our rent with WLC management by approximately $1.2 million. The M&A market continues to be a mixed bag for skilled nursing and seniors housing assets. Seniors housing assets continue to flood the market. The opportunities continue to be a wide spectrum of non-stable and non-strategic to Class A that don't fit in a triple net structure given where today's pricing is currently. On the SNF side, we are seeing more deals, stable and non-cash flowing, come to market in geographic areas that we have been strength, but pricing in general continues to be excessively high. As Dave mentioned, we've beefed up our investment team by moving over two members of our portfolio management team. They are former nursing home operators, and we believe their ability to connect with operators will help us expand our pipeline of prospective tenants and work hand-in-hand with existing tenants in their respective regions to find off-market deals where certainty of close is valued. Our ability to strategically provide debt financing to existing partners as well as potential partners we would like to do business with has yielded some interesting opportunities for us over the past few months. Additionally, our announcement on the Q4 call about entrance into the behavioral health asset classes produced inbound interest from both brokers and operators that we believe will produce new investment opportunities for us. We also suspect industry headwinds will force more and more undercapitalized operators to bring their properties to market, factors such as CMS's recent announcement of the modest increase in Medicare funding, ongoing labor issues that continue to plague the industry, and lastly, the eventual end of the public health emergency, which has provided continued benefits to operators, including the waiver of the three-day qualifying stay, FMAP in some states, and sequestration to name a few. So as we sit here today, the pipe is a mix of SNFs and a few seniors housing assets spread across both our standard acquisition leaseback structure and also some debt investments. We continue to be cautiously optimistic that we will source more bread and butter one-offs like you saw from us in Q1 over the coming quarters. That being said, our pipeline is currently in the $150 to $175 million range. Please remember that when we quote our pipe, we only quote deals we are actively pursuing under our current underwriting standards, and then only if we have a reasonable level of confidence that we can lock them up and close them in the relatively near term. And now I'll turn it over to Bill to discuss the financials.

Thanks, Mark. As Dave previously mentioned, as deals firm up and the financial picture becomes a little more clear, I would expect that we would resume publishing guidance in the next couple of quarters. In the meantime, we will be putting out announcements as we make material progress. Now on to the quarter and a little color on the numbers. For the quarter, normalized FFO grew by 5.2% over the prior year quarter to $35.9 million, and normalized FAD grew by 4.8% to $37.9 million. On a per share basis, normalized FFO grew by 2.8% over the prior year quarter to 37 cents per share, and normalized FAD grew by 2.6% to 39 cents per share. Rental income for the quarter was 46 million compared to 49.1 million in Q4 2021. The decrease of 3.1 million is due to the following three items. One, a $1.7 million decrease in cash rents, which is made up of $2.2 million of unpaid rent offset by $500,000 increase in rent from CPI bumps and new investments. Two, a half a million dollar decrease in reimbursed property expenses. And three, a reserve for doubtful accounts of $977,000 made up of $629,000 from existing tenants, $225,000 for a tenant no longer in our portfolio, and $123,000 straight line rent receivable because we are now selling the buildings under that lease. We recorded an impairment charge of $59.7 million during the quarter based on what we believe the net proceeds from the sales of the assets will be as a result of the decision to sell 27 assets. We also incurred $1.2 million of unreimbursed property expenses related to properties that we are selling. And lastly, we recorded a net $3.8 million provision for loan losses made up of $4.6 million of new reserves partially offset by a $750,000 recovery of previously reserved loan made to a tenant who is no longer in our portfolio. Cash collections for the quarter came in at 94.8% of contractual cash rent and includes the application of $1.5 million of security deposits. Without the application of the security deposits, cash collections was 91.8% of contractual cash rent. April cash collections came in at 93.2% of contractual cash rent with $0 coming from the application of security deposits. We expect May collections to be similar to what April was with $0 coming from the application of security deposits. Our liquidity remains extremely strong with approximately $25 million in cash and $495 million available under our revolver. Leverage also continued to be strong with a net debt to normalized EBITDA ratio of 3.9 times. Our net debt to enterprise value was 27%. percent as of quarter end, and we achieved a fixed charge coverage ratio of 8.3 times. And with that, I'll turn it back to Dave. Thanks, Bill.

Well, we hope the discussion has been helpful and really grateful for your continued support. With that, we'll be happy to answer any questions.

As a reminder, to ask a question, you need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, that's star, then the number 1 on your telephone keypad to ask a question. First question comes from the line of Juan Sanabria from BMO Capital Markets.

Your line is open. Hi, good morning. Thanks for the time. Just on the asset sales, you took an impairment, so it seems like you have a good sense of what the dollar value could be of those 27 assets. I'm just curious if you could share what that dollar range of proceeds may be, and I guess from a modeling perspective, what rents or NOI was booked against that denominator to try to calculate a cap rate to try to model the dispositions if and when they happened?

Dave Kuntz, hey one this is Dave so the I think we're in essentially the same position, we were last quarter with respect to giving guidance about proceeds and the fact that we booked an impairment is really an accounting concept that we had to do for. Dave Kuntz, For the queue but. Dave Kuntz, it's still pretty early and we don't want to. really give too much color on what the range might look like before bids start rolling in.

Can you provide what the new bulk value is post the impairment?

I think that's in the queue. Yeah, Juan, that's in the 10 queue. You can find that, I think, in Note 3. Okay, I'll take a look.

And then, Bill, while I have you, A lot of moving pieces you outlined in your prepared script, but I guess for simplicity's sake, it seems like you have $1.5 million of security deposit applied in the first quarter that will go away from the first quarter to the second quarter. Any other moving pieces we should think about just to model the second quarter and to make sure we have the appropriate run rate stripping out one-time items?

Yeah, as it relates to rent, we gave you some color on where contractual cash rents are coming in so far for April and May. As it relates to one-time costs that could be added back next quarter, I can't think of anything right now unless some property type expenses as a result of assets we are selling, we end up paying.

Okay, and then just the last one for me. Do you guys think coverages, when it's all said and done, have bottomed with occupancy kind of flatlining or improving said differently? I mean, do you expect any incremental or new watch list tenants to emerge from here, or have we seen the worst at this point?

Yeah, I don't think we would expect any new additions to the watch list. Like I said last quarter, we've tried to be proactive in looking forward in coming up with this list of 32 operators in the list of tenants that we're working through right now. So we're dealing with the folks who have, call it, hit the wall and we try to look forward to who we think might be having some difficulty in the future. That's not to say that the remaining operators in the portfolio are completely out of the woods yet. We certainly still do have some folks who need support from the provider relief funds or from the government in some form, and when that goes away, it might be difficult for them. But no new additions that we can think of that would be added to the watch list.

Thank you, guys. Good luck.

Thanks.

Next question comes from the line of Jonathan Hughes from Raymond James. Your line is open.

Hey, good morning out there. Happy Friday. I guess since you can't talk about the proceeds or yield on the 32 assets being repositioned, can you just remind us the mix between SNFs and seniors housing? I think it's mostly SNFs, but that would be helpful if you could share that.

Yeah, Jonathan, I don't think we actually itemized it out last quarter. I'll just tell you that the majority are actually seniors housing, not skilled nursing.

Okay. vast majority or a minor majority?

The vast majority. Okay. All right. So we have one, I'll tell you, we have a portfolio of skilled nursing facilities that we are selling. And then the rest are all seniors housing.

Okay. And when I look at the current geographic exposure California and Texas are almost half of your rents, and obviously that's where your biggest relationships are, and Ensign being one of them. But is there a maximum state exposure threshold that might keep you from looking at a potential opportunity in an effort to try to limit any risk to state-run Medicaid changes?

That's a really interesting question, but as we look at those states that we have concentration in, we are not concerned about growing with the best operators that we think we have in those states. As long as we underwrite for today's realities with the best operators in those states, which we think we have, you could certainly see us expand in California and Texas. Mark, do you want to add anything to that?

I would just say it's interesting because California has some of the higher Medicaid rates in the country, and then in Texas you obviously have some of the lower Medicaid rates in the country. So from an exposure perspective, you pointed it out, that's where we actually have bench strength. So the reality of us growing in those two states is really more of a function of operator depth. and less so of, you know, maybe, you know, kind of, you know, reimbursement. So we think, you know, Texas is doing some interesting things on the CLIP side that is helping to supplement the quality operators that are providing great care. And, you know, California, we're just not seeing much on the market, so.

Yep. What about, you know, other Sunbelt markets like Florida? I know you've had exposure. A little bit higher exposure there in the past. I think some of that was seniors housing. But the skilled nursing attractiveness of Florida, is that something that's on the radar?

Yeah. I mean, we're constantly looking at opportunities throughout the country. We don't actually see too much in Florida. So really it's a function of we don't necessarily have anybody on our operating bench today that is in Florida in a meaningful way. But Florida is absolutely on the radar.

Okay. One more for me. Could you maybe give us any more details on that bridge to HUD loan program? I think, Dave, I heard you say that yields will be done at similar yields to acquisitions, but being a bridge program, it doesn't seem like that's very long-term. I guess What's the plan for those investments once they do secure HUD debt financing in an effort to try to minimize any future dilution from them being repaid?

Yeah, that's a great question. You know, what I would say is, you know, we're not going to take our exposure up. significantly on the bridge-to-head program. And whatever is coming due, we'll do our best to match funds coming in the door with funds going out the door. There's been a good amount of interest, a lot of deals that we have seen in the last couple months that are with operators that we know very well. But I would say we're using it from a relationship perspective to either expand with existing tenants that we currently have or relationships that we would like to develop on the sale-leaseback side at some point in the future. So we're not kind of going whole hog and expecting this to be our main thesis going forward, and we'll use... this tool to deploy capital where it makes sense on a relationship basis.

Jonathan, in addition to the relationship angle, which really is the primary angle for it, giving it a little bit more attention this year has opened up some pretty interesting opportunities that expand beyond maybe that two to three year outlook. And so just giving it a little bit more attention and partnering with these guys, I think what Mark said is right on. It's not a bit of a treadmill that you need to keep going on to not have that dilution, but it appears to be presenting some interesting opportunities beyond the two- to three-year treadmill.

All right. That's great, Carlos. Thanks for the time.

Thanks.

Your next question comes from the line of Steven Valliquette from Barclays. Your line is open.

Steven Valliquette, Barclays, Yep. Hello, everybody. Thanks for taking the question. Just regarding the three properties where you reached agreement with Landmark Recovery to convert the three senior housing facilities into the residential addiction recovery centers, I apologize if I missed some of these details. Previously, you kind of talked about this a little bit last quarter as far as some of the metrics. But just from an underwriting standpoint, is there any color just on where those properties are expected to shake out from just either one from an EBITDA or rent coverage ratio once the addiction recovery operations hit maturity? And if you can just remind us what your or Landmark's assumption is for steady state occupancy within that particular business model once it hits maturity. Thanks.

Thanks for the question, Steve. Yeah, we're really excited about this space, as you could tell by our prepared remarks and what we talked about last quarter. We're really thrilled to have already signed three leases. I want to just point out that there's still a little bit of regulatory box checking to go forward with before those leases commence formally. and then rent's not going to start to be collected on that until the redevelopment work is done. We're expecting a few million approximately redevelopment costs per facility, and the underwriting thesis is that the stabilized lease coverage will be north of three times, and occupancy should be in the 90s. Talking with the landmark guys based on their track record here they get there pretty quickly inside of traditionally inside of six months and. So that's that's our expectation going forward, we expect you know the development work, assuming that all the regulatory boxes get checked to commence the summer and then rents to start coming in, you know 12 to 18 months after.

that point okay and then just remind us again the as far as some of those conversions is it easier to convert senior housing into addiction recovery versus sniff just not sure if that was relegated to just you know one side of the other or both types of facilities were opportunities for that but just wanted to get the quick confirmation around that one way or the other thanks yes Steve so both property types are eligible for conversion

It just so happens that as we looked at the properties that we felt we wanted to pursue with Landmark, they were assisted living. Actually, we looked at a few skilled nursing facilities as well, but as we looked at those together, for one reason or another, they didn't work out for Landmark to convert the skilled nursing facilities. But there's nothing inherently unique about a SNF license or an assisted living license both are eligible. Okay, got it.

Okay, that's helpful. Thanks.

All right, Steve, thanks.

Your next question comes from the line of Michael Carroll from RBC Capital. Your line is open.

Yeah, thanks. I wanted to ask Mark a couple questions about the investment market Where do you see valuations right now? I know you kind of highlighted they're still a little expensive. Has the rising interest rates kind of affected those valuations at all, or how does that kind of play into where some of these valuations can trend over the next handful of quarters?

You know, we haven't seen valuations affected by rising interest rates, although I was talking to a lender this week and said, you know, HUD debt, you know, sort of spiked into the fours for the first time in years. So, you know, depending on where that bounces around over the next couple quarters, you know, kind of high threes, low fours. That's absolutely going to affect pricing. So we haven't seen it, you know, currently in deals that have come out. But I would expect to see it, you know, in future quarters, you know, just rapidly. you know, for obvious reasons. So, you know, I think the market was sort of at a frenzy in Q1, and I think it started to, you know, slow down a little bit in Q2, and, you know, as we've seen more deals come to market. So I think it's, you know, probably a function of both supply and demand.

Okay. Yeah. I mean, I guess maybe this is kind of what you were just saying, but the past few quarters you were saying that the reason why valuations were so high is just because the lack of product available and there's just a number of buyers. I mean, is that still true going on? Do you see more product hitting the market? And if so, will that kind of loosen up the valuations?

Yeah, I think that's exactly right. I think as we start to see more SNF assets, both cash flowing and non, I think that will normalize pricing. We hadn't seen a lot in Q4. And, you know, even going back to maybe as far as Q3 of last year. And so, you know, when something did come to market, it got bid up pretty significantly. And, you know, I think obviously good, well-positioned assets in certain states is always going to be, you know, bid up and there's going to be a significant auction process for that. But in some of the smaller markets, smaller markets and even secondary markets that some of our operators are in, you know, we're expecting, you know, pricing to kind of come back down. And we're starting to see a little bit of that now.

Okay. And then is that true for both seniors' housing and skilled nursing facility assets, or is that kind of just tied to one of them?

Well, you know, I mean, what I would say, we're certainly more focused on skilled nursing pricing just because, you know, that obviously composes 80% to 85% of our current portfolio. On the skilled nursing side, or on the seniors housing side, we're not as attuned to where pricing is just because the few operators that we actually want to grow with are in you know, such selective markets that I don't really have a great pulse for, you know, what's going on in the senior housing space, you know, in a lot of markets throughout the country.

Okay, great. And then just last question for me. On the portfolio optimization plan, I think that you have 32 assets that you're kind of looking to reposition, 27 for sale, three are transitioning to behavioral. Do you know what you're going to do with the other two? Has that kind of been kind of set yet?

We're still looking at that. You know, they pay rent. It's a current. They want to stay in. And really the question is, are we going to get a price that would sort of compel us to do it? And we're just not far enough along in that analysis to pull the trigger. Okay, great. Thank you. You bet. Thanks, Mike.

We have a follow-up question from Juan Sanabria.

Hi. I'm curious if any of your tenant assets got moved over to Ensign as part of their recent changes that they've made there with some of their assets?

Yeah, three of them did.

I guess that's a good thing. And then on the pipeline mix, the 150 to 175, just curious on the mix of assets there, and it kind of yields your thinking.

Yeah, so it's going to be predominantly skilled nursing And the yield, what I would say, is kind of in the mid to high eights.

Great. Thank you very much. Sure.

Again, if you would like to ask questions, press star, then the number one on your telephone keypad. We have a question from Austin Worshman from KeyBank Capital Markets. Your line is open.

Great. Thank you. It seems like behavioral is becoming more attractive to you and some of your peers. And my basic understanding at this point is there are few institutional quality operators or few with a track record at this point. Landmark has been one that certainly has been highlighted a few times. But can you just help us understand the competitive landscape for this segment?

Yeah. The landscape is, I would say, very fragmented. and immature in terms of institutional quality management and credit. So it feels like, in some ways, it feels like the skilled nursing business, I don't know, 30, 40 years ago, both from a fragmentation and professional management and regulatory scrutiny and sophistication. So that does make it a little bit of a challenge to find great operators to grow with. We have confidence that they're there, but it's going to take some work to find them. And we do that work on the skilled nursing side, and that goes to one of the reasons why we are allocating more talent to the investment side of the shop so that we can be boots on the ground and in conferences and in markets to try to find those best in class operators across our boxes of skilled nursing, seniors housing, and now behavioral health.

So when all is said and done on those three that you're repurposing, What's sort of the yield on your all-in cost basis, including the few million dollars you mentioned on each facility?

Well, if you look at net book value plus the investment that we'll make, I think across the board we're expecting to be somewhere in the eighths, aggregate of all three. Okay. But that's before any impairment that might be considered on these assets. So it's kind of a nuanced discussion because you've got to think about, well, what's the real value of some of these underperforming assisted living facilities? And if you think about what they might fetch at market today versus the higher and better use here with behavioral, it's a really easy decision. If you look at what we could re-tenant with the market rent for these today. If you look at what the rent is currently versus what the rent will be going forward, both in total dollar and yield, we're better off repositioning these assets.

That's helpful. And just what's sort of the expectation for rent collections? And I was curious if any of the delinquent rent here before this year was associated with the 32 assets. you intend to reposition?

Yeah, so like I said earlier, it's pretty challenging given this stage of the process to really comment too much on how much of that rent that we have not collected will still be collected. What I can tell you is that we believe that there is collectible rent there that we've not collected so far, but given where the negotiations are and how the workouts play out with timing and proceeds and participation and cooperation of outgoing tenants, there's just a lot of moving parts there to give you much more guidance in that. Okay.

I can appreciate that. Well, thank you for the time.

All right. Have a good one.

Again, if you would like to ask a question, that's star, then the number one on your telephone keypad. Next question is from Amatayo Opusanya from KSWIS. Your line is open.

Hi, yes, good afternoon. I just wanted to follow up in regards to Austin's question on the behavioral health sector. I guess when you guys look out whether it's five years or ten years, how do you expect that industry itself to kind of evolve? Is it, you know, And how does it kind of become much more institutionalized going forward? Specifically, are there things that the U.S. government needs to be doing or they're doing already to kind of make it a more institutionalized business? And how quickly do you kind of see the industry growing going forward, especially given the very strong focus on mental health within the United States healthcare industry right now?

Yeah, I think you're seeing part of the answer to your question in institutional capital going into the space now, whether it be REITs, whether it be private equity banks are taking it more seriously, and they're looking for operators to partner with. Historically, it's a very young If you look at it, I think it was 2008-ish when President Obama, with the stroke of a pen, created a market that was at the time very undersupplied when he mandated that health care providers and Medicaid now support addiction recovery and mental illness. And so it's early, Tayo, and I'd just say that the money to support it is coming. It's here. We're part of that. And I think that alone will attract operators who have maybe been more sophisticated in other parts of the health care spectrum, take it more seriously and expand into it. But it's really hard to predict how long that will take. for it to kind of mature to a place like skilled nursing. Even skilled nursing is still very fragmented, still a lot of moms and pops, still a lot of multigenerational owners. And I suspect that looking five to ten years from now, behavioral health will continue to have a pretty healthy range of mom and pops, more institutional.

Great. Thank you.

Thanks, Tyler. Okay.

There are no further questions at this time. Presenters, please continue.

Okay. Well, that looks like it concludes the call. Really appreciate everybody's interest and support. If you have follow-up questions, you know where to find us. We will see many of you in June at NAREE. And I hope you have a great weekend. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.