Green Brick Partners, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the GreenBrick Partners, Inc. First Quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, press star 1. I will now hand today's call over to Rick Costell, CFO. Please go ahead, sir.

Welcome to GreenBrick Partners earnings call for the first quarter ended March 31, 2024. Following today's remarks, we will hold a Q&A session. As a reminder, this call is being recorded and will be available for playback. In addition, a presentation will accompany today's webcast and is also available on the company's website at .greenbricpartners.com. On the call today is Jim Berkman, co-founder and chief executive officer, Jed Doulson, president and chief operating officer, and myself, Rick Costello, chief financial officer. Some of the information discussed on this call is forward-looking, including the company's financial and operational expectations for 2024 and beyond. In yesterday's press release in SEC Biolinks, the company detailed material risks that may cause its future results to differ from its expectations. The company's statements are as of today, May 2, 2024, and the company has no obligation to update any forward-looking statements it may make. The comments also include non-GAAP financial metrics. The reconciliation of these metrics and other information required by Regulation G can be found in the earnings release that the company issued yesterday and in the presentation available on the company's website. With that, I'll turn the call over to Jim. Jim?

Thank you, Rick. I'm pleased to share that Greenberg kicked off 2024 with excellent first quarter results highlighted by diluted earnings per share of $1.82. That was a record for any first quarter in company history. We also achieved a record home-building gross margin of 33.4%, which again was the highest in the home-building industry, as shown on slide four. The solid performance was driven by our superior locations and high-growth markets, strong demand for our new homes, our investment-grade balance sheet, and most importantly, excellent execution by our hardworking teams. Our book value grew 27% from a year ago to $29.67 per share at the end of the first quarter of 2024, as we again generated an attractive return on equity of .5% for the quarter on an annualized basis. Our accomplishments were achieved with a balance sheet that is stronger than ever. Due to strong cash flow, equity growth in the earnings net of stock buybacks during the last 12 months and $38 million of debt paydown, our -to-total capital ratio decreased 550 basis points to .3% at the end of the quarter, while our net debt to total capital ratio dropped to 8.2%. This is even more impressive considering that we carry over 86% of our owned and controlled lots on our balance sheet. Unlike most peers, we do not rely on land banking to acquire or develop lots. We believe this strategy puts us in a stronger position due to our lower cost of capital and a greater ability to minimize potential cost escalation between phases. Because we self-develop most of our lots, we avoid paying retail lot prices on contracts that typically have 6% annual price escalators and have better control of the development costs and timing for our finished lots. We believe this approach can mitigate some of the lot inflation pressure that our peers are facing. Our industry-leading gross margins have been earned in part from our self-development strategy, this from land underwriting, and the diligence, expertise, and hard work of our land acquisition teams. Our unique land strategy has led to a top-quality land pipeline that has fueled our growth. Not only do we operate some of the best markets in the country, but we also primarily target infill and infill adjacent submarkets where supply and competition are more limited. Sourcing and acquiring high-quality land in these desirable locations requires a unique skill set and extensive local knowledge. We take pride in our long-standing reputation for quality communities and close-knit relationships with local landowners and sellers. This is exemplified by our recent joint venture with the Hearst Family Investments and a new community with approximately 2,000 lots in the booming subgroup of Salina, Texas. With our diversified home-building brands, unlike many peers, we can offer a variety of products in the community to cater to different homebuyer needs and price points. With a limited supply and infill adjacent communities, we experience solid demand across our markets and brands as we enter the spring selling season. Despite higher interest rates, we sold 1,071 net new homes Q1, 2024. This is the second highest in company history, just shy of the COVID-fueled 1,082 orders in the first quarter of 2021 and with a record low cancellation rate. As shown on slide five, continuing high interest rates have kept existing home in Missouri near historical lows headed into 2024. Additionally, close to 80% of outstanding mortgages are locked in at rates less than 5% as shown on slide six. The golden handcuff effect has proven to be more pronounced in infill and infill adjacent submarkets where we have a strong presence and have historically generated over 80% of our revenues, including in Q1, 2024. Even as higher mortgage rates persist, potentially tempering demand, we remain bullish and believe that democratic shifts in our strong high growth markets, together with the systemic housing shortage, will continue to sustain a healthy housing market in the cities where we operate. Additionally, as shown on slide seven, with a growing population of millennials aging into prime home buying age, the urgency and necessity to buy a home should continue to grow, even if mortgage rates remain elevated. Many home buyers who are waiting on the sidelines need a more permanent housing solution as they hit the next life milestone, whether that's getting married, having children, or changing jobs. To conclude, we believe we are well positioned to capture pent up demand and grow market share with our strategic advantages shown on slide eight, which are, one, our footprints in infill adjacent sub markets within high growth metropolitan areas. Two, superior lot of land positions. Three, a unique and efficient operational structure. Four, a strong balance sheet. We remain laser focused on executing our long-term goals for disciplined growth and creating shareholder value. With that, I'll now turn it over to Rick to provide more detail regarding our financial results.

Thank you, Jim. Please turn to slide nine of the presentation. During the first quarter, we delivered 821 homes, an increase of 8% year over year, primarily driven by increased levels of finished and finishing spec home inventory entering the quarter and shorter cycle times. ASP declined .6% year over year to $540,000, resulting from closing out infill communities and opening new communities and surrounding infill adjacent areas. For the balance of the year, we expect our quarterly ASP to range from $540,000 to $560,000 each quarter, subject, of course, to changes in mix and business conditions. In total, we generated $443 million of home closings revenues for the first quarter. Notably, home building gross margin reached a new company high of 33.4%, breaking the previous record of .3% achieved in the third quarter of 2023. Our gross margin in Q1 was up 580 basis points year over year and up 200 basis points sequentially. As shown back on slide four, we continue to lead the industry in this metric. Stronger pricing power in our infill and infill adjacent communities has allowed us to lower incentives, which Deb will review in a few minutes. Construction costs were down year over year as we delivered smaller-scored footage homes with lower feature levels. Additionally, a higher mix of deliveries from infill adjacent communities contributed to lower average lot costs. SG&A as a percentage of residential units revenue for Q1 increased 120 basis points year over year to 11.4%, primarily from payroll and the set of compensation growth, as we have grown our team and continue to invest in our personnel to sustain future growth. Net income attributable to Greenberg increased 30% to $83 million and diluted earnings per share for the first quarter grew 33% to $1.82 per share. A record for any first quarter and second highest in company history. Limited competition from both existing homes and few new competing communities in our infill and infill adjacent locations have continued to drive demand in these desirable neighborhoods. During the quarter, net new home orders were 1,071, the second highest in company history. Revenue from new homeowners was down slightly year over year to $613 million due to the lower ASP discussed earlier. Sequentially, revenue from new home orders increased 61%. Active selling communities at the end of Q1 increased 24% year over year to 98. This growth is juxtaposed against national trends. John Burns Consulting reported on April 22, 2024, that community count in the top 65 US markets was down 8% year over year in Q1. We believe Greenberg's differentiator and its performance is that Greenberg operates in dynamically growing markets with favorable demographic tailwinds where we have timely acquired land, self-developed lots, and brought many new communities to market. Our quarterly absorption rate moderated from record levels in Q1 of 23, but remained robust at 11.4 homes per average active selling community or 3.8 homes per month despite higher interest rates. Cancellation rate for the first quarter reached the lowest level in company history at 4.1%. This was also the lowest among public homebuilding peers as shown on slide 10. Due to strong sales performance across all brands, our backlog value at the end of the first quarter increased 32% year over year and 31% sequentially to $725 million. Backlog ASP increased .9% to $711,000 as opposed to our decrease in closing ASP. This is due to our backlog being underweight our lower price trophy homes. Trophy, which operates primarily as a spec builder, continue to represent a low percentage of overall backlog. Spec units under construction as a percentage of total units under construction decreased sequentially to 60% at the end of the first quarter due to selling homes at earlier stages of construction. During the first quarter, we started 997 homes, up almost 50% year over year. During the last three quarters, starts averaged over 940 homes per quarter with total starts increasing each quarter. By strategically increasing our starts, we believe we're well positioned to capture additional market share in the coming quarters. Our investment rate balance sheet provides us a strong foundation positioning us to grow and invest in our future. As Jim stated at the end of the first quarter, our net debt to total capital ratio was 8.2%. And our total debt to total capital ratio was only 18.3%, one of the lowest among public home building peers as shown back on slide eight. 100% of our debt as of March 31, 2024, was fixed rate and an average coupon of 3.4%. Now, to put this in perspective, some of our highly leveraged peers recently issued five year debt at rates above 9%. Our outstanding debt is long term through 2029 and well below current market rates. Additionally, we have 186 million dollars of cash on hand at the end of the quarter, as well as 360 million dollars of undrawn amounts under our lines of credit. With financial prudence and discipline being one of our core operating tenants, coupled with strong cash flow from operations, we will continue to evaluate growth opportunities ensuring they align with our long term financial goals and strategic vision. Lastly, as we previously announced, we sold our .9% interest in Challenger Homes on February 1st, 2024. As a result of the transaction equity and income of consolidated entities decreased to 2.6 million dollars in Q1 of 24 or .6% year over year, as we recognize only one month in that earnings from this investment compared to three months in the prior year. Other income at the same time increased to 15.4 million dollars due to a 10.7 million dollar gain in the sale of our investment in Challenger. Over the course of our investment in Challenger, we have an average and internal rate of return in excess of 50%. With that, I'll now turn it over to Chad. Thank

you, Rick.

As

we entered the heart of the spring selling season, net new orders for the first quarter grew 58% sequentially to 1,071. Demand was strong despite higher mortgage rates because of limited supply in our infill and infill adjacent submarkets. We continued to only offer incentives strategically in select communities and for select homes during Q1 of 2024. We gave our buyers the flexibility to use the incentive package toward closing costs, limited rate buy downs, or a combination of both. As expected, the incentives were higher for entry level products in the periphery locations, but remain limited at our infill communities. In incentives for net new orders dropped each month during the first quarter and ended at .8% in March. As a result of demand, we were also able to raise prices moderately in approximately two thirds of our communities. Our buyers' financial profiles remained unchanged with an average FICO score of 740 and a debt to income ratio of 38%. We believe the dynamics in our infill and infill adjacent locations will continue to create a healthy demand. We will continue to monitor interest rates and evaluate incentives and product mix carefully. Our industry leading gross margin of .4% gives us plenty of room to adjust pricing as needed. We continued to make incremental improvements on cycle times across our building brands.

Mean

cycle time for homes that completed construction in the first quarter of 2024 was 5.5 months, 10 days shorter than the fourth quarter of 2023, and down significantly from 8.6 months in the first quarter of 2023. Trophy cycle time in Dallas was less than four months in the first quarter of 2024. We will continue to take steps to refine our processes and improve efficiency while still maintaining strong quality control procedures.

Next,

with strong cash flow, we continue to carefully evaluate our capital allocation strategy to maximize capital efficiency. We announced last quarter that we expect to ramp up our spending in 2024 for raw land acquisition, finished lot purchases, and land development. During the first quarter of 2024, we spent $91 million in purchasing land and finished lots and $53 million in land development. Our total lots owned and controlled increased 7% sequentially to approximately $30,800. While land prices remain sticky, we continue to successfully underwrite deals that met our internal IRR threshold of 21%. We expect to have approximately 5,100 finished lots at the end of 2024, providing a strong runway for growth and allowing us to capture pent-up demand quickly. Just as important, more than 80% of the finished lots are expected to be infill and infill-adjacent locations, as shown on Slides 12 and 13. Another of our business priorities this year is to grow Trophy Signature Homes, both in our existing Dallas sub-market, as well as our newer markets of Austin and Houston. Trophy owned and controlled almost 21,000 lots in DFW at the end of the first quarter of 2024. Approximately 16,000 of those home sites are in longer-life communities and sub-markets with long-term growth potential and more affordable prices. Those lots have an average cost of $11,000 per raw lot. Creating a tailwind for strong gross margins. Being the seventh largest home builder in Dallas-Fort Worth on a standalone basis with a strong land pipeline, Trophy is well positioned to capture more demand among first-time and first-time move-up buyers with our value-rich products. In Austin, we have further expanded our pipeline. As of the end of the first quarter of 2024, we had over 2,000 lots owned and controlled, almost double the size from a year ago. And in Houston, we're also actively seeking additional new land opportunities in addition to our first 460-lot acquisition that we recently closed as we simultaneously looked to build a strong local team. Lastly, during the first quarter, we completed over 3.7 million in stock share repurchases at a weighted average price of $52.23 per share. The remaining dollar value to the shares that may yet be purchased under the 2023 repurchase plan was approximately $99.7 million. Share repurchases remain on the table as we explore investment opportunities for growth, all aimed at delivering the -in-class, risk-adjusted returns for our shareholders. With that, I'll turn it over to Jim for closing remarks.

Thank you, Jed. In closing, I am extremely pleased with our first quarter results, and we look forward to building on this momentum in the quarters to come. We have a clear vision for our long-term growth and future. And with the talented teams we have in place, we're confident in achieving our goals and continuing to deliver exceptional value to our shareholders. This concludes our prepared remarks, and we will now open the line for questions.

Thank you. As a reminder, if you would like to ask a question, press star 1 on your telephone keypad. If your question has been answered and you would like to remove yourself from the queue, press star 1 again. We'll pause for just a moment to compile the Q&A roster. Your first question is from Carl Rickert with BTIG.

Thanks. Hey, guys. Nice to talk to you. I have a question about starts and community count. So big ramp in community count and starts, as you pointed out. I think Rick was you who said we've been up a lot the last couple of three quarters. So as we look out for the rest of the year, we're looking at the number of people that are in the community count. Do you expect community count to kind of flatten out or continue to grow at a fast pace? And same question really related to starts on a year over year basis.

We're not really going to issue guidance on that. Obviously, we've reached a good start pace that has sequentially grown every quarter. We're trying to grow Trophy, especially. We've got a lot of lots there to start in larger communities. So we don't want to be specific on the community count.

Oh, OK. Thank you, Rick. And then you talked about five and a half months cycle time as sort of where you're running now. And that's improved quite a bit. As you look at sort of what your cycle time was pre-Trophy signature versus where you think it's optimized today, are you kind of back to what you'd say is normal level for the non-Trophy business and at normal for Trophy business now? Is so five and a half months sort of the right number to think about going forward? Or do you think that can come down more?

This is Jim. I think it will come down a little just because Trophy is growing relative to all of our other businesses significantly. And Trophy's entry level homes are more like 120-day cycle homes. So just due to product mix, I think there could be some improvement in cycle times. Jed, do you want to expand on that?

No. Yeah, we're already, Carl, under four months on Trophy, so we can spend that inventory three times.

Okay, great. And then last one, if I can squeeze one more in, just on SG&A leverage, you talked about adding some folks to staff up for growth, and I'm assuming that's at least partially connected to community count. But are you expecting that that sort of add-on is largely finished and you should see some better leverage on SG&A over the course of the next year or two? Or are you going to continue to staff up as the growth is strong enough that you'll continue to see these a little bit higher levels of SG&A? Thanks, guys.

Well, Rick can chime in on this, but some of the SGA was impacted by incentives in the quarter. And then, Rick, you want to talk about scaling our business and future SG&A?

Yeah, you're right, Carl, in terms of some of it is implicit in the growth that we've seen in starts in community count. Et cetera. So as we see that growth in starts translate into growth in revenues, you should see improving SG&A. Yes, sir.

Appreciate it, Rick. Thanks, guys. You bet. Your next question is from the line of

Alex Regale with B. Riley.

Thank you. Nice quarter, gentlemen. The primary question here is it relates to gross margins. So gross margins are fantastic and congratulations on that, particularly relative to your peer review universe. But I guess my question here is, are you doing anything different right now sort of in the current quarter that would suggest a material change in home builder gross margin in the near term?

This is Jim. Short answer, no. A little bit longer answer, we've actually seen our margins maintained. Our incentives have not increased. And hopefully, the interest rate impact will allow us to maintain these margins as we continue throughout the rest of 2024. Jim, do you have?

No, I think it's pretty much status quo

from the results you're seeing. Yeah, thanks, Alex. We are seeing that we're able to control our lot costs very well because of our self-development. We don't have what a lot of other builders who are land-like get exposed to with the constant 6% escalator clauses. So as we have come down in our ASP, you've seen our margins sustain themselves. And there are lots of metrics that you see. One is that where 80% of our revenues are in infill and infill adjacent locations. 80% of the finishing lots this year, you see some maps in there that show that those continue to be in infill and infill adjacent locations. And our land buyers have also been, this last quarter was 80% in those similar locations. So subject to whatever happens with interest rates, obviously, there's variability there with the 20% of the first-time buyer. But so far, so good.

And then I believe you said spec homes, under construction, centers of all homes under construction is about 60% right now. Any near-term expectation for that to change a lot either?

This is Jim. We just got our latest weekly report, and it's really interesting. Our sales start and closings are all in cadence right now pretty well. So we don't see a lot of change. So we're in the middle of a really good quarter. Excellent.

Nice quarter.

Thanks, Alex.

Your next question is from the line of Jay McCandless with Wedbush.

Hey, good afternoon, everyone. Thanks for taking my question. I guess the first one I wanted to ask about was surprised to see sales absorption down on a -over-year basis. Maybe talk about why that happened, and was it just waiting for some communities to get developed or slow walking in certain areas? Kind of walk us through what happened there, please.

Yeah, we were quite happy with the rate that we achieved in Q1, if you recall. Q1 of last year, that was really when sales took off for us. We entered that quarter with a lot more finished and finishing inventory. In fact, one of the reasons that our backlog grew a little bit more this quarter was because we did not have as much finished and finishing inventory. But still, you know, Trophy, for instance, is selling and closing 70 percent of their sales in the same quarter. So they sell it and close it in the same quarter. So, you know, with that kind of statistic, it really helps to have quite a bit more of that inventory. But, you know, Pulte, for instance, who is the closest in gross margin to us, had 3.0 sales per month. So, you know, our performance is actually very strong. Were we

3

.8? You know, so we're really strong there.

Could you talk about what you're seeing so far in April? Not only maybe pricing power and traffic, but also what are you seeing from your competitors in terms of increasing incentives, especially with mortgage rates moving up?

Yeah, this is Jed Jay.

We wrapped up April with, you know, very good results, very strong demand. And as we look into May, you know, it looks like that will continue. We may, depending on where rates bounce around, we may tweak incentives a little bit. But I don't see that being anything meaningful.

Yeah, we've had a fairly inconsequential change in the incentives from March to April, from Q1 to April. You know, we have been successful in raising prices in approximately two-thirds of our communities at the same time that we saw the incentives come down in Q1. So we like what we see. The buyer is back in our markets. So we're feeling good.

And then the other question I had, just going back to the gross margin question, what historically has been the mix of infill business versus, I know trophy signatures new, but newer, but what's that historical mix of business? And are you guys expecting infill to maybe be a heavier percentage this year? Is that one of the reasons that the gross margin was so strong in one queue? And I know y'all don't like to give guidance, but if infill is going to be a heavier percentage of the mix this year, does it follow that we should maybe be a little more optimistic around what our gross margin assumptions should be?

Hey, Jay, this is Rick again. We have been consistent for the last several years, actually, with a little more than 80% being infill-infill adjacent. So we expect our ASP this year to continue to range. It's always a function of mix. The $539,000 in Q1 was not a surprise to us. And similarly, we expect between $540,000 and $560,000 the rest of the year. So that kind of indicates that the mix really isn't changing a whole lot from where we're at right now, which in all those metrics, our revenue is closing, our lot inventory, the lots that we're buying, the lots that we're finishing continue to be in that same mix.

Jay, this is Chad. I would just add we're not running Trophy as a low margin business. We're running Trophy as a high margin business. And we do have to compete with other public builders more in that space. But the differential, it's not a night and day differential and gross margin from infill to Trophy.

Yeah, this is Jim. The other thing that's interesting is Trophies, even in our lower entry level price point, our cancellations are under 10%. I think we have a better backlog at Trophy, not as much as we said we're selling. Most of these homes, you know, in a shorter window when they close. But in terms of margin and risk, we can't eliminate all risk. I think Trophy is doing a great job of maintaining margin, not having cancellations. And we're just real excited about some of the new communities that are getting ready to open in markets that we've already had great success in. Got

it. The last question I have for you guys, could you talk about what your lot cost inflation has been so far this year? And also as part of that, we've heard from some of your competitors that land development costs are also going up in addition to just the lot price itself. So maybe could you talk about what type of inflation you're seeing on both those metrics?

Yeah, Jen can chime in on this. He works on it, you know, all the time with Bobby Samuel, our National Health Vice President of Land Development. But we are not seeing major lot land development cost increases anymore. We're not seeing decreases either. We don't have a crystal ball where we can forecast this, but we're putting budgets together on a number of large land deals that we're keying up and getting ready to start. And they're right in line with our projections. And we're not seeing nearly the cost pressures or the supply pressures of not having transformers and all the other stuff that we were experiencing a year or two ago. Jen?

Yeah, we mentioned that, you know, half of our lots owned and controlled are in long-term master plan communities where we bought at wholesale prices, sub 12,000 a paper lot. And, you know, we feel good about those long-term buys. Most of those are in reimbursable type communities where over time, we'll get reimbursed for development costs. And our input, you know, we're not seeing land development horizontal costs go up. They're, you know, pretty stable to

maybe

trending down a percent

or two. And then one last point on that, you know, one of the big reasons for our -over-year decline in ASP was the transition from more infill to infill-adjacent communities. And that was probably the most profound at Trophy. But on a -over-year basis, their ASP, I think, went down by about $100,000. But the lot cost, the finished lot cost, I'm not going to say what the percentage was, but it was all within the same percentage point, you know, X point something percent to X point something percent. So it's remarkable that we've been able to maintain that cost structure and therefore our gross margins.

Yep. Pretty impressive. Thanks, guys.

As a reminder, to ask a question, press star one on your telephone keypad. Your next question is from the line of Alex Barron with Birch Center.

Yeah. Hi, guys. Good morning. Morning. I wanted to ask about your land development, which you've emphasized and clearly it's yielding great results. What percentage of your overall loss that you guys are involved with are self-development? And is that percentage likely to trend up from here?

All right. We show that calculation actually inside both the earnings release and the 10Q each quarter. We take the lots owned and controlled and we back out of the controlled lots, the land parcels that we're about to close on, which are actually going to be self-developed. And we come up with that percentage and it runs around 86 to 88 percent, give or take, and that's where we're at at the end of Q1 as well. So it's a preponderance.

Alex, we're seeing in certain instances, well, to answer your question, we're not going to be land light. We are seeing the spread and because some builders are trying to stay land light no matter what because of what they told Wall Street, they're paying prices for lots we would never consider on an option basis because the spread between that retail option lot price and what we think you can put a developed lot that we wholly own in a larger master plan community, we just aren't interested in even considering going out in land light. The cost is too great.

Alex How do you guys answer to the, I guess, flip side of the argument that it's less capital and therefore higher return?

Bill Well, let me answer this because I do it every time. For some reason, which I have never been able to figure out, everybody thinks you can magically transfer land risk and yield risk to a lot banker. Lot bankers are some of the smartest guys in the real estate business. A lot banker's goal is to make the highest returns for the lot banker's investors. Their goal is to charge a builder the highest implied interest rate to the lot bank and get the greatest earnest money deposit they can. It's a totally misaligned structure that has just been, I think, oversold to Wall Street.

Bill Alex, one of the best stats that I can give you in that regard, it's actually twofold. One, return on assets, return on equity. Our return on assets in Q1 was the highest amongst all of our peers. We don't publish it, but it was right at 17% on an annualized basis. Our return on equity in Q1 on average equity was 25.5%. If it's going to show up, it's going to show up in those returns. I think a lot of the folks who are land light, a lot of them, at least in the small and mid cap builder range, are highly leveraged. They're really trying to juice those equity returns, but it's not working.

Bill Well, they have to be land light.

Yeah.

It's a positive feedback loop that's been created. Frankly, in our two largest markets, Dallas by far and Atlanta, we are one of the largest lot developers. There aren't lot developers to develop all these lots for land light guys in Atlanta or Dallas. That's why you don't say NVR being a dominant builder in Atlanta. Bill Got it. If

I could ask another question, what is the average size of your communities? Also, do you only self-develop for yourself to keep all the lots, or do you sell to other builders as well?

Bill Most of the time we develop just for us. We have a large deal that we're looking at closing in about three weeks that we have builders calling us like crazy, will you sell us lots? I think what we're trying to decide right now is only would we consider selling lots in this 1200-home neighborhood is if they can return, give us lots in some other neighborhoods where fronts so we can increase our sales and revenues. That's a fluid conversation. I doubt whether we're going to get the benefit of the bargain and will probably self-develop and be the only builder in those communities.

Bill Appreciate the answer. I'll get back in the queue. Thank you.

Thanks,

Alex. Coordinator At this time, there are no further audio questions. This does conclude today's call. Thank you for joining. You may now disconnect.