← The Rent Roll with Jay Parsons
The Rent Roll with Jay Parsons
EP#80 Terry Considine Isn't Done: The Multifamily Legend's Next Act
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Foreign it's episode number 80 of the rent Roll your podcast on all things rental housing, apartments, SFR and Build to Rent. And man, this is going to be a fun one we got Joining us today, one of the absolute legends of the apartment business and one of the truly great people of the apartment world as well. A guy who's been at us since 1970s, a guy who's in part of multiple successful exits and yet he keeps coming back for more. He's best known as the founder and longtime CEO of aimco, which went from IPO to then catapulting up to at one point the largest owner of apartments in the United States before pruning down the portfolio. He eventually spun off Air Communities, sold it to Blackstone and and you know what, you know, I had assumed that he had hung up the cleats and was enjoying life and retirement, but a few months back got some messages. I posted something about AIMCO on on LinkedIn and some folks reach out to me and say, hey, Terry Considine is still at it and, and he's now with his latest venture, his newest business, Big four Properties, also focus on the apartment business. And Terry was gracious enough to make some time to walk down memory lane with me and also talk about what he's building at Big 4 and why he's doing it after all the success he's had dating back four plus decades. So you know, I, I, I'll tell you, you know, some of you may have seen the episode length for this one and it's longer than usual and
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I, and a lot of it's because
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I like to keep these interviews right around 30 minutes usually. I think it's a good amount of time. But I broke the rules for the conversation with Terry. You know, this episode is a bit longer, I'm sorry for that but trust me, this is just too good of stuff. You, you're going to enjoy it. You're going to enjoy his in not because of M. You're going to enjoy his insights and candor. It's going to be a fun conversation. So that's going to be awesome. Plus, also in today's episode, we'll share some highlights from the big release, the 2026 edition of the NMHC Top Owners, Managers and developers and why multif family remains an incredibly fragmented industry, maybe the most fragmented of all major US industries. So lots to do, let's jump in. Before we do a quick shout out to our sponsors for making this possible. First and foremost, big thank you to jpi, a leading apartment Developer with a stated purpose to transform building, enhance communities and improve lives. Check them out@jpi.com JPI is in the cutting edge of some really exciting innovations in apartment development and construction. Also, big shout out to Madera residential apartment owner and operator based in Texas. And thank you to Funnel. Check them out@funnelle leasing.com the sponsor of our interview segment. All right, so we kick it off with a section called Here's a chart and we got a good chart for you. To start this off. Some of you've seen this before. The market share of the top three 50 largest apartment owners. And if you can see this chart on your screen, if you're one of the people who actually looks at the screen instead, just put it on in the background. This is a good chart. What it shows you is a lot of green. And that green is the 89% of the market that's not owned by one of the largest 50 players in the market. So that's the big punchline I think from the NMHC top any owners list. So if you, if you don't, you're not familiar with this. By the way, the National Multimillion Housing Council, every year since 1990 they release a list of the largest owners, managers and then later on, I'm sorry, and manage property managers. And later on they added developers, builders, syndicators. We're going to focus on owners, managers and developers today. We want the full list. Go to NMHC website.
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But let's go back to this point
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first, 11% is controlled by the largest 50 owners. Now think about how many industries were just one player has more than 11% market share. And that's true in grocery stores, automakers, pharmacies, credit cards, smartphones and a lot more stuff. And for apartments, it's not getting more concentrated or more, it's actually becoming more, it's actually not really doing that at all. It's still incredibly fragmented. It's not really changing. So get this, here's a great stat. Back in 2015, eight owners in the NMHC Type 50 list held more than 100,000 units. And the top player at the time held 244,000 units. Today it's only three that made this list above 100,000. And the largest one is 119,000 units, which is about almost 0.5% of the market in terms of ownership. That of course being Greystar. And if you include third party management, that takes Graystar all the way up to a whopping 4% market share of the total apartment universe. But of course Management is not ownership.
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C
Right.
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You know, owners drive asset strategy. They have opinions on that, of course, especially in the era of real time data tracking the portfolio. But let's go back to this for a moment. 0.5% of the market. I mean you think of any other industry where the biggest players own less than 1% of the market or even for that matter a low single digit share of the market. Now I've just heard this on social media and whatnot. I know our folks will meet and say, but Jay, not every owner participates in the NMAC survey. And that's true. And they point out Blackstone isn't on there. For example, Blackstone, of course is the company that bought our guest, today's pro company, Terry Considine's Air Communities. Right.
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Took him private.
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So they've done a few of those. So to be. And that's fair, right? I mean Blackstone does not participate on this as I think maybe a couple others, sizable names, I don't think anybody else in the top three or so, but even Blackstone is probably going to be somewhere around 1% market share or less. So again, I'd ask this like, name one other major industry in the US where the largest provider has market share around 1% or less and maybe the full service restaurant industry, but not much else. You know, and the reality is that no one has huge market share in this business. And people say, well Jay, you got to look at this individual, this msa, this city, right? But go ahead, look at it. I mean, how many can you find where anybody has more than a single digit market share?
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You know, the, the, the reality is
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that just nobody has huge market share in this business and it's really hard to actually get real scale. Okay. The only, even at a local level, the only one I can even really think of, and if everybody else knows some, obviously let me know. The only one that I could really think of is maybe the Irvine companies in Irvine, California. And that's such an unusual case of a, of a family business that's owned all this land for decades and decades and decades and therefore was able to control much of the development. A lot of the apartment development that occurred, but that's far more the exception than the rule. Irvine, of course, being in Orange County, California. So again, it's an incredibly fragmented market. And why is it so fragmented? Well, it's a highly liquid market with low barriers to entry, assuming you have capital, of course. And it's a sector where new entrants can easily outsource day to day management to third party firms and many do. But let's get back to the 2026 list. I mentioned Greystar was my number one among those on the list. And then But I also want to highlight Morgan Properties, obviously we had Jason Morgan on the podcast recently talked about some of the success they've had growing their business. Morgan Properties, congrats to them. They've now entered the 100,000 unit plus club, growing by 13,700 units owned over the last year and firmly number two now in the ownership rankings. Other big gainers on the list, FPA Multifamily added 10,600 units to jump number 11. Hunt Companies up 10,000 plus units. Number 9, Fairfield up five 3K units. Number 21. And then also the only other companies at at least 4,000 units were true America and Widener. So congrats to all those firms. And before we move on, here's one more fascinating stat, the NMHC top 50 owners list. Again, I mentioned this earlier. It's back to 1990. So here's a chart taking looking at who was the number one owner in each year since 1990, when NMHC first started doing this. And we've had 14 different NMHC number ones over that period of time. And again, how many industries can you think of, major industries in the US where there's been 14 different market leaders over a period since 1990? Probably not very many. So including some of the early ones on this list that actually ended up being acquired by AIMCO, names like NHP and Insignia at one point, number one, they got bought by AIMCO and then AIMCO was number one owner from 1999, 2002 before it started to scale down its portfolio under Terry's leadership. He's one who built it up. And then he said, hey, we're going to print down a little bit, get a little more focused and we'll talk to the, to Terry who drove that strategy. The, the longtime, the founder and longtime CEO of Amco, Mr. Terry Considine. So that's obviously our conversation today and get him to take us back to the, the, the decisions in those years. All right, so let's go back to top 50 list.
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Now.
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We're talking about managers, top 50 property managers. So as I mentioned earlier, Gracetar is number 1.4percent market share. But more notably, it's a big milestone year for Greystone. They topped the 1 million unit mark for units managed. Pretty remarkable again for industry as fragmented as this.
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Really remarkable.
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And some remember when we had the new head of property management for Graystar on the podcast she mentioned that that something like half of their owners have only one property with them, which makes the stat even more remarkable. So you know, you know, I'll say
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one other quick thing is again, just
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the perils of posting online. I saw some yahoos online recently responding to this point about, About Greystar having 4% market share and they're saying oh, but look at Austin, it's like 13%. And I don't even know if that 13% number is true for Austin. I mean I'm like, come on, like 13% is still just not that much. I mean every comparison point I, I saw a stat that General Motors makes 17% of all new cars in the U.S. now does anybody think that GM really controls the new car market in the U.S. to such a greed they don't really have to compete with Ford and Toyota, Honda, Tesla, Hyundai, etc, etc, I mean, come on. But, but let me also say this. While we've seen no material growth in the market share in the top 50 owners collectively, I will, I will acknowledge it's a different story among property managers. You know, even if the biggest players individually aren't that big, we are seeing the top 50 managers collectively are representing a bigger and bigger share of the market. So collectively top of the managers own, I'm sorry manage, not own. They manage on behalf of in most cases other owners. And nearly 5.3 million units. That's up 6% year over year, likely a record high. And that amounts to about 24% of the nation's apartment stock. So 11 m c typ own 11% of the apartments they m the difference that the managers though T50 own sorry manage 24% of the market. So still incredibly fragmented, but unlike ownership, it is becoming relatively less frequent fragmented. And that I, I I suspect that growth largely ref reflects increased efficiencies of scale provided by some larger managers as well as some consolidation. What's increasingly a margin thin business at a time when cross pressures are particularly acute. All right, a couple of highlights from this list from managers. Asset Living added more units than any other manager last year, adding158,000 units and holding firm into the number two spot with446,000 plus units managed in large part due to its acquisition of FPI, which was the sixth largest manager on last year's NBC Type 80 manager list. And then four others added just over 20,000 units in 2025. Willowbridge RPM Living, which ranked number three and four, Arcline number 40 and ZRS Management which jumped up to number 1010. So congrats to all those firms. And now let's jump to the top 25 developers. Let's start with this point. The top 25 developers collectively started 96,366 units in 2025, representing 28% of all apartment starts in the U.S. that's the second largest share on record behind only 2024 when it was 30%. Historically, the top 25 comprise 21 to 25%. Again, very fragmented business development is primarily controlled in apartment world. It's not like home builders. Most apartments are built by smaller local developers who build one project at a time. They sell it, they recycle the capital in the next deal, maybe one or two at the time, and they move on. They keep building mostly in the same markets, but that's gotten harder for those guys, just harder access to capital, harder to get efficiencies of scale. And so we're seeing a little more market share from the bigger players, not because they're necessarily doing a lot more, especially not more than they did in 22 and 23, but it's really the fact that we're seeing some, some pullback from smaller developers. Now the rankings Greystar, like with owners and managers, they ran number one on the developer list as well with, with 7,188 units started in 2025. Again that's still a tiny fraction of the overall market for development, but number one in a fragmented space. And also too Interestingly Graystar with 7,108, 7,188 units. That's actually down more than a thousand units when they started in 2024 and, and down from I believe 23 and 22 as well. But that still marks out of the last 10 years Graystar has, is now ranked first for development starts in seven of those last 10 years. So the other three times and it wasn't Graystar, it was alliance, which now ranks at number four in the NMHC top developers list. Number two though now is JPI which was the big mover on the charts this year. Love to see that from our podcast sponsor. JPI jumped 18 spots. Number two, they started 4,208 more units in 25 than they did in 24, which was the largest increase among all apartment developers. And then the only other developer that a year over year bump of 2000 plus units was Harbor Group International, surging from just 206 units started and 24 to more than 2900 units started last year. So there you go, those are our quick takeaways. From the latest MHC rankings. If you want a little more detail, you can check out our blog jayparsons.com news not blog the newsletter jparson.com newsletter and subscribe to that. Got to write about a little with some more details and of course also links to the rankings that I themselves all right, next up, it's time for Rental Housing Trivia. Today's trivia is presented by my friends at Authentic.
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If you if you've got a property
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that's underperforming and you can't quite figure out why, check out their multifamily leasing and marketing audit. They'll dig into your pipeline, your leasing funnel and comps and tell you exactly where things are are breaking down. Plus strategies on how to fix it. Listeners of the pod get 50% off, so head to authenticff.com click on the banner to learn more and claim the offer. All right, so the question today in honor of our guest is this. It's a very simple one. It's not multiple choice this time. The question is AIMCO is an acronym for what? So what does AIMCO stand for? And by the way, I'm going to ask Terry how that name even came about. It's not the most you'll find out they didn't hire a Madison Avenue marketing firm to come up with that name and nor did Terry think they needed one. And he's probably right.
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So.
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So that's an interesting story you'll hear in a bit. All right, next up, we'll answer the trivia question here a little bit later. But next. But first, let's take time for Good Question.
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So good questions.
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We answer a question that we get from social media, from email, or from an event. And I try to try to take questions I get quite or try to pick one that we get quite a bit. This segment is sponsored by Inside the Deal, a CRE podcast by Bercadia, and it's a commercial real estate podcast that takes you behind the headline and into the heart of the transaction. Hosted by Berkadia's EVP and head of production, Ernie Katay E, each episode pulls back the curtain on a real deal, unpacking the situation, the challenges, the creative solutions, and the outcomes achieved. You'll hear directly from Bradia producers as they share what really happened behind the scenes, the roadblocks they hit, how they navigated the market, and the strategy that ultimately got the deal across the finish line. So if you work in CRE or just want to understand how complex deals get done, this is where you'll Find the stories, lessons, perspectives that you won't see in a press release. So follow Inside the Deal, a Siri podcast by Brickadia, wherever you get your podcasts. All right, so today's good question is why is development still fairly active if you can buy new apartments below replacement cost? And this is a good question. I've heard it a lot. So let me try to tackle this one real quick. I'm sure others can do a better job. I'm going to hit it real quick. Okay, so first let me say this on paper. Yes, it's cheaper to buy than to build, but paper doesn't always translate to reality. Number one is those deals are few and far between and therefore it's hard to scale it. It's also hard to compete for it if you're not one of the bigger names with better sources, lower leverage and a track record that the seller is going to want to close with. It's hard to compete with some of the bigger names in that regard. And also we're starting to see the going price for well located, newer vintage class A real estate apartments is now back in the fours, mid and high fours in some cases. And so in terms of cap rates, so development yields in the sixes, you know, that spread is not too bad as long as you believe in the long term value and demand drivers for the asset and you think you'll be delivering into an area where there's a lot less supply pressure by the time you start leasing. So obviously every deal is different. That's not investment advice. But I do think that's some of the reason we're seeing a moderate volume of starts push through. Now obviously it's half what it was three, four years ago, but starts have not completely evaporated. There's still some bullishness for development and you've seen some some of the MHC top 25 developers doing more this past year and those are some of the reasons for it. We're still under supplied overall in housing, so believe it or not, especially, and even if it's not everywhere, you certainly have pockets at a neighborhood level where it's needed. And obviously you're building for, you know, two years out. So it's going to be a different environment than what it is today. All right, next up in the news, This segment is sponsored by Telecloud. If increasing NOI is a priority, your telecom contracts may be one of the easiest opportunities in your portfolio. Telecloud helps multifamily asset managers consolidate Internet voice and dial tone across properties. The Average cost reduction is 40% and it's often higher than that. And to make it easy, they'll start with a free telecom audit to show you exactly where savings exist before you make a move. So learn more@telecloud multisite.com all right, so two headlines for you this week. Number one comes from Politico. It says, chilling effect. The housing shortage could have a money problem. The housing legislation has been that has some long term rental homes hanging in. The balance has been held up over differing views between the House and the Senate. All right, so happy to see Politico picking up on a topic that the industry's been buzzing about these last few weeks and that I dedicated entire podcast to last week. And it's good to see Politico doing this because obviously they get a lot of, a lot of eyeballs from D.C. and it's a very real problem. And so basically what they're pointing out
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is, hey, you know, just like we've
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been saying, there's now a freeze in build to rent development because of what the road to housing, or we call the Road to Less Housing act has requires, which is selling a property seven years after you build it. Which means, which means it's very hard for these deals to actually make sense for a lot of reasons we covered last week.
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So as many of you know, this
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bill was approved by the House. I'm sorry, approved by the Senate, not the House. Don't wanna scare anybody through by the Senate. It's now at the House and the House is saying they don't like the ban on btrs. Hopefully some common sense and data win the day, but we'll see how this plays out. And the second headline comes in the Wall Street Journal. It says, emptied apartment stores are housing Cleveland's booming population. Historic buildings are being reimagined as modern apartments, attracting young renters, empty nesters, and reverse commuters. All right, so this is a good read for any Cleveland fans or just those curious about all the fuss. You know, I've said this before and I'll say it again. You know, Cleveland has a very underrated downtown. You got density history. There's just enough vibrancy there with, you know, in terms of foot traffic and people and activities without feeling, you know, like it's just stuffy. It's, it still feels very laid back and, and, and, and has some good food spots as well. Some I've, I've had some, a few good food experiences in downtown Cleveland. Great baseball stadium as well. Great place to watch a game. When the weather's good. Plus, you know, Cleveland's an oddly critical spot for people in the commercial real estate world. And if you know, you know right, you know, being home to Townsend Group, the real estate investment advisory firm, plus the the nation's largest BTO BTR developer and owner, that being Redwood and also a major carbon builder and NRP among, among others. So Cleveland's not been an institutionally favored market for various reasons. Various reasons. But it certainly does have its spots. All right, let's get back to our our trivia question of the week. The trivia is again presented by my friends at Authentic. The question was AIMCO is an acronym for what? And if you guessed Apartment Investment and Management company, then give yourself a pat in the back. You got it right. So that is a good segue to today's interview. And again, our interview, as always, is going to be sponsored by funnel, the AI and CRM software trusted by four of the six major REITs and many more leading operators like BH and Cortland. To learn how Funnel can help your property, centralize operations, automate everyday, everyday tasks, visit funnel leasing.com all right, again, our guest today is a legend in the multifamily business, Mr. Terry Considine, founder and former CEO of AIMCO, which at one point was the largest owner of apartments in the U.S. he's been in the business since 1970s. He's had many successful exits. And he's back at it again. He's not retired, not hanging him up. He's rolling it back with his newest venture, Big four Property. So we'll take a trip down memory lane with Terry. We'll ask him how it all started, how he made Amco household name in the apartment business, why he scaled it down, what it's like to see the Amco name now fading into the history books, and why he decided to stay in the game and launch Big four. And he'll share some of his investment strategy as well, an investment strategy, you know, well honed after four plus decades in the business. So, so here's my conversation with Terry.
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All right, welcome to the interview portion of today's podcast. And I am truly honored to welcome in one of the legendary names of the apartment business, Terry Considine. So, Terry, thank you so much for being with us today.
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C
Jay, thank you. Thank you very much for your kind and exaggerated compliment. I appreciate it.
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B
Well, I'm really excited to pick your brain about some topics, you know, because the industry's changed so much over the years. You've had a front Row seat of it. But I want to go back to the beginning, or at least the beginning of some of your experience in the space. I read somewhere that you actually started a REIT back while you were still in law School in 1971. And is that, is that true? And if so, can you tell us some of the backstory?
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C
Well, it's true. And I was working my way through law school at working for a law firm in Boston, Hale and Door, who had a real estate client, Cabot, Cabot and Forbes. And through a combination of circumstances, I thought I'd write. I'd written, worked on Wall street at Davis Polk during that summer, the previous summer, my 2L summer. And there had been a REIT window, a series of REIT IPOs. And I thought, well, Cabot, Cabot and Forbes CCNF should do the same. And Paul Helmuth, the president, was a great friend and mentor. And Jerry Blakely, who was the CEO and majority owner, encouraged me to write a paper. And I thought, doggone, I can write my 3L paper and get paid for doing it. And this is great. But it was a time of high interest rates. It was a time of disarray in the real estate markets. And all of the people senior to me were basically laid off in September of 1970. And I would have been too, but I wasn't on the payroll of the development firm. I was on the payroll of the law firm. And through that happenstance, I was given the opportunity. And through Jerry and Paul's encouragement and support, we came public the next year, April 2, 1971. But the preliminary prospectus identified a particular risk that the company had no full time employees and would not until. Since they're taking no risk unless Mr. Considine graduated from law school. So notwithstanding that risk, we raised what seemed like a large amount of money and $62 million, which today would be 600. And we're off and going.
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B
Yeah, that's amazing. I can't even imagine. You're in law school, you're working for a law firm, launching a reit. It sounds like you're pretty busy.
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I've always liked to work. I've enjoyed it. I had a number of other things going that year, but yeah, it was fun.
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B
Sounds like it. So let's talk about just your entrance in the apartment business. You're going to law school, working for a law firm, launched the reit, you know, back then, for those listening, you know, they. There's a generation today than this business who doesn't remember a time when apartments were not an institutional investment class, but certainly in the 70s it was. No one would have called it an institution even in the 80s and early 90s. So back then, what did you see that others did not and what drew you into the business?
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C
Well, those are, those are separate questions. When we started, we did more regional malls and in sort of bank headquarter, anchored office buildings. And we did a lot of those and enjoyed it, enjoyed that work. But the theory was that those credits, you know, Sears and Pennies and Federated and Allied or regional banks were provided security because they were big in corporate. But the reality of the turbulence in markets is that each of them had more credit issues than the diversified credit of residents, individuals. And so at some point I realized there was a false premise. But I think that may have been a rationalization. What drew and draws me to multifamily is the idea that this is where people go home. And I think the most important influence in my life has been I'm the fourth of 11 children, seven brothers, three sisters. Family is very important to me. And I like the idea that we're providing a place for people to recreate, refresh and have families.
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B
Yeah, no, that's a great point. And I think that's obviously been, continues to be true. At the end of the day, apartments are homes for. That's an essential need for, for everybody. So. So I guess then in those, as I understand it, in those early days, you're a value add investor, you're buying some older properties to fix up. And so I'm curious, you know, as you, if anything, you tell us about that early day business model and then also how that might differ from the value add models we see today.
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C
I think early on, and this is not just true just in the 1970s, but in the 1990s in the AIMCO IPO and in the years in between. I've always liked the broad market. There are many more people. Abraham Lincoln said that God must love ordinary people because he made so many of them. And so I'd rather have a broad consumer market to address. And so I like B assets. In the REIT IPO in 1994, Paul McAuliffe was investment banker. Paul's still around, is still a great person, a great friend. And I was describing what I wanted to invest into investors as used Chevys. And he said, Terry, that's just after enough roadshow meetings. He said, people aren't attracted to use Chevys. We have to dress it up. And so I tried to describe to him what I was looking for and he said, well, could we call it Chevy Trucks? I said, that'd be okay. So that's what we did. But I think the fact of the apartment market is that it's relatively easy to build. And while it seems a surprise every five or ten years to find out how efficient builders are, that was true before this last go round. That whether it was the wonderful developers that we've seen from Lincoln and Crow and so forth, or the stimulus provided by tax shelter, the one law that trumps all others in real estate is the law of supply and demand. And if a business is successful, it attracts more competitive supply. And that's true for restaurants, it's probably true for podcasters. And so you'll have to watch your imitators. So it's very. It seems to me that something went out of plan on. And in anticipation of this I had an opportunity to look at some of your podcasts and I really admired the one on Morgan Properties because I'd watched their success because I've been active in Philadelphia and I've seen them grow and, and I like their values. I like family's influence so far as I know it. I don't know them personally, but their description of how they go about it is very consistent with how I look at it. And it's why there's always an uneasy relationship with the public markets, which are shorter term FFO oriented. I'm much more focused on after tax cash flow. You can listen to 100 analyst calls, earnings calls, and there won't be much talk about taxes. But as individuals it's a very important issue. And so I'm very focused on free cash flow. So talking about NOI without talking about capital replacements seems to me incomplete. I'm very interested in stable communities and I think those are more accessible in the broad middle market.
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B
So I want to. We'll jump more to the AIMCO story later, but I want to ask you just that follow up question on that. So why do you like. That's a great point. But why does Wall street not reward class B apartment owners? It's really pushed the sector upmarket. What do you think the disconnect is there?
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C
I think Wall street in the short run is always about a story, a fad. The Fed sort of is judgmental, but something that seems newsworthy and some of them are right, but usually they're overdone and so they overreact to the moment. And I think REITs on Wall street have become commoditized and I think more of the multifamily Which I know better, but I think across the board and I think that the underlying values are a little bit detached and many of them, if not most, are worth more dead than alive.
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B
That's unfortunate reality we've lost. I think my last count was like 15 apartment rates over the last 10 years. So it's unfortunate.
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C
Well, for a longer perspective, it's 30. But they weren't lost. No one died in those activities. Some jobs were disrupted, but mostly capital was more efficiently allocated. So that's actually a positive thing. We should celebrate.
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B
Yeah, well, 30. Yeah, well, but I'll tell you for, for people like me and doing research and podcasting, whatnot, like, we love public companies because we get better intelligence from them. So there's a, there's a, there's value. And obviously the REITs have been leaders in many ways around operations, investment trends. And so there's, there's a, there's value in that.
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A
For sure.
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C
There is, there is, but, but, but often with a, with a distorting metric. I remember we bought a property in, in South Beach, Miami beach, three or four years ago called Southgate, and a few months later we had an earnings call and the market was very interested to find out how it was doing. And they wanted to know the occupancy. And I think the occupancy was off by 40% because we're a non smoking company and would ask the smokers to leave. I thought that was a very good step forward. But the analysts filling out their Excel spreadsheets didn't know quite what to make of it. So that kind of captures the conflict between doing what makes sense in the long run and trying to report every 90 days.
- [35:15]
B
All right, so let's go back to the 80s. So pre IPO, we're talking about the REITs. I jumped ahead a little bit, so I decided to ask everybody about that. But take us to the 1980s. As I understand it, you had a large, at this point, a third party property management business. And so it got me curious, like how different was property management back then when you didn't have all the cloud software, the real time business intelligence. So it's not like today. It's like your companies, they can see almost in real time what's happening anywhere across the country. Back then it was a little different. So how much has it changed?
- [35:47]
C
Well, first I just to correct a misimpression, what I did is I bought a number of properties and managed and that's how I got into property management.
- [35:57]
A
Oh, okay.
- [36:00]
C
I had, when I left the land Trust. In May 1, 1971, I started the Considine Companies and I did LBOS and bought real estate with such luminaries as Richard Rainwater. Bass Brothers were investors during those days. And so we did a lot of office and retail, but also multifamily has always been my favorite. And so we did buy property management companies and we did have that, but that was way as much as anyway to access investments, purchase opportunities. And what I would say is different, you're right that the amount of information is very different, much more available. That comes in part from technology, in part from public ownership. So the reporting is terrific. I remember calling on Green street when they were just getting started, and Craig Leopold, who ended up as president, was just the, I think the sixth person there, but another, another good person who's done a good job over the years. And that information becomes readily available. So, so the. There is a difference in what one could know about the markets and about what one's competitors or peers are doing. But, but I also believe that, that you can, that it's important to take out of information what there is, but it's possible to take out too much. And so if you have the wrong metrics, you get bad ideas. And if you automate the wrong process, you have bad things happen faster. And the most important thing that I think is an exception to this sort of sense of improvement is the qualitative differences in people and in real estate. And if I were to call someone on my team in Boston or Los Angeles today and say, how does the property look? And they say it looks great, we're really working hard, we look a little bit better than everyone else is hard out here. I'll hang up the phone, I won't have learned a thing because there's not a number there, there's not an objective metric. And so I think it's important to have the right questions so you won't be overreacting to what could be a correct but misleading answer. An example would be occupancy. If you fill a property with people that are bad neighbors, you're not building value, you're probably destroying value. And so I think customer selection is the most important thing. And that tends to be more qualitative than just data.
- [38:49]
B
Yeah, no, it's a great point. And those are your customers too. So I know we're covering a lot of time here, but I want to cover a lot of number of years. But I want to jump to the IPO AIMCO. So first and foremost, I'm curious.
- [39:04]
C
I've had three IPOs, so you have to tell me which one.
- [39:08]
A
That's right. I'm sorry.
- [39:09]
B
Yes. I guess there's a second one. Right. There you go. So I first of all, I'm curious. It's a very sort of nondescript name. Apartment Investment and Management Company. What inspired that name?
- [39:21]
C
Well, it was an inspiration, but. But I do remember the conversation that Paul McCall McAuliffe I've mentioned. David Robertson was working on that. He's another luminary in real estate today at Front Range Capital, a great friend. And Peter Campanias was my partner and they were debating a series of names that. And I said it really doesn't matter that what. What at the time an Exxon or Xerox would have taught us and Google today is that over time it's what you do that matters, not what, what the word is. And what we would do is was Apartment Investment and Management. And we abbreviated that and called it aimco. But it was exactly as flat as that. There was. There's no great insight. We didn't pay Madison Avenue to give us something and we didn't focus group it. We just said, let's do that. And over time its associated values will be what we've done, not what the word said.
- [40:23]
B
Yeah, no, I like that. I like that it tells people exactly what you do and then. So take us back to 1994. What was the initial investment thesis when you launched the ipo?
- [40:34]
C
The circumstances are ones that you have to understand. In the previous couple of years, I've done LBOs and I was a large distributor of gasoline, 600 convenience stores. And they passed lust regulation that meant instead of being one of the largest, continued to be one of the largest owners and distributors of gasoline in the Southeast. But I also became the largest owner of leaking underground storage tanks. That was a financial distress. I rolled a horse at the ranch and I was paralyzed from the waist down. I was in a wheelchair for a year and on crutches for. I did the IPO on crutches and I just run statewide for US Senate and I lost in the 92 election. And so as I limped my way home, I licking my wounds, I told my beloved wife of almost 50 years now, 50 years next month that it was going to be better going forward because now I was financially stressed, physically handicapped and politically rejected. But how could it get worse? And I would spend more time with the children. I'd ride them to school, I would simplify our business life and I'd be around. I recognized the REIT window had opened in 92. It seemed familiar. And I had some properties and I thought if I contributed to an investment offering, that that would be a good exit for those properties. I think it was probably Paul who came to me and said that, working on it, that they could do the offering, but they wanted me to be the CEO. And I said, paul, I can't do that. I just told Bets, I'm going to stay home, I'll be around, I'm going to be available. I'll drive the kids to school. And he said, you only have to do it for one year. So I hope Betsy doesn't see this podcast because she's got a good suit for breach of contract because it was 30. But I think my investment thesis would have been just what we were talking about, that there's, there's a broad addressable market in B assets, whether they're used Chevys or Chevy trucks, and that gives an opportunity for selection among customers to select better customers, get more stable incomes. Periodically it gets discovered, again, as I said about the Morgan interview that you did, which I thought was both well done and also an interesting window on a remarkable company. And I think that the opportunity, the fact that Midwest is being discovered, it hadn't been lost. But again, that's sort of the Wall street fad of the moment or investor fad at the moment. So it's broader than Wall Street. When we first invested in Florida as a reit, we were the only one that had major allocations to Florida, places like Miami at AIMCO. And I'd invested there over the last 50 years, but that was regarded as remarkable. Now it's the most obvious thing in the world. And being obvious, it's now overdone. And so the time is to look somewhere else. If everyone's fishing on one side of the boat, it's generally better to go to the other side.
- [44:10]
B
Right?
- [44:11]
C
So those are the things. I mean, those are same things that have, have motivated me. I think another, another thing that came out of that IPO was the idea that we ought to be looking at after capital replacement spending, that FFO is incomplete. And so this is before AFFO became the agreed convention, which, but we called it Cash Earn for Shareholders. At one point, the SEC said, let's just get uniformity in the vocabulary. But that's what I meant. I liked, I thought, many of my friends who came public, they did that to deal with the credit crunch following the tax reform and ethanol crisis, and they wanted to get off their debt and finance themselves like General Motors. But I think history has taught us that General Motors should have financed itself like a real estate company with non recourse property debt and they wouldn't have gone broke. And so I've always emphasized property debt over corporate recourse debt. That'd be another example.
- [45:15]
B
So then go forward a few more years after you initially have an exit for your properties through this reit. Well, a few years later you are on this massive acquisition spree. Acquiring some with the time were really big names. Nhp, Insignia, Oxford, Kazden. What drove those big buys? And just tell us about how crazy it must have been to be taken on that many units so fast.
- [45:41]
C
Well, we, we, we doubled every 15 months for eight years. So. So to say that makes me realize it was probably reckless and I should have been more cautious. But, but at the time, each of them seemed like a good idea. And the, when you ask about those, those are both the company names, but they're wonderful people that I can think of in each of them that were fun to work with, fun to get to know, and fun to solve a problem for them. And for them it was a good exit in each of individual circumstances. NHP had a congressional charter, so that had a certain luster to it. Rod Heller was the head of that and he was a very thoughtful person. Andrew Farkas at Insignia is still around and a very colorful figure. So that was. There are many Parker stories that I probably can't tell on public broadcast, but you know, but just, I mean, it's just fun. And so they were all things that I both enjoyed and felt I was solving a problem for the seller and that what we got out of it was the opportunity is more an option to operate the properties better and to find better outcomes for the limited partners who had invested in those partnerships.
- [47:04]
B
Wow. Yeah, that's fascinating. So we certainly don't see anything like that today. So. All right, so let's take a few more years forward. Early 2000s, AIMCO peaks in terms of number of units around I think it was 265,000 units. And for those listening just for some context, if you look at like Graystar today, that's twice what they not manage, but own, which so this is, we're
- [47:26]
A
talking about a lot.
- [47:27]
B
And, and so Terry, at what point did you look at this and say, you know, you mentioned you're doubling every 15 months for eight years. At what point did you look at this and say, hey, maybe we need to scale down the number of units in order to grow the value of the company and what spurred the shift to start pruning and narrowing the focus of the business?
- [47:46]
C
Well, I think the stock market had rewarded us. We'd done well in the market during those years of growth. But I thought we weren't a great company. That this is right at about the time of and right after the dot com implosion. And I remember telling my board of directors that I thought we should work hard to become a better company, a better landlord to our residents, a better employer to our teammates, and that the shareholders would be rewarded. And I thought in my ignorance that that might be the work of a year or two. It turned out to be about a decade before we became operator than our competitors. But that was the timing, that was the impulse. I don't know if you know the name Jim Lipman at jrk. Jim was a friend of mine and I had and have high regard for him. And he bought properties from us and it came back for more. And so I understood what that meant. I said, jim, can you tell me exactly why you would like to buy more properties from aecon? He said, because I know I can reduce the costs. And I thought, good lesson, good lesson. I hadn't speak to my board of directors. Not everyone would have done that. Have some person come in and say your existing team needs to work a little harder. And we started off, but probably in a wrong direction. We started off, I mean, we'd always paid attention to operations. That been my background. But we started off trying to manage costs thinking we had scale and that that was a competitive advantage. But buying dishwashers from Home Depot, they had scale, Sears had scale. Aimco didn't have scale. We had a 150 person IT department. But Microsoft has scale. Aimco didn't have relevant scale. And so I began to sort through how we were going to measure and keep score and focused on customer satisfaction, that the people whose opinion mattered most and that was firsthand and informed were the people actually living in the apartments. And so we became very focused on asking each of them their opinions. We got up more than 100,000 responses every year. We posted them online, which made them real in a sense. It's not necessarily something that people want to read every day, but for the workforce, it was exhilarating to some and terrifying to others because it was firsthand, personal and, and immediate. And that was much more powerful than hearing from some broken down cowboy in Colorado a month after the fact. To know that Mr. Parsons comment was that Mr. Considine had done a bad job fixing the dishwasher and you hear it the next day at a standup, you just know you're accountable for it. And so they really cleared to me that the most important job in, in our business was not mine or even my colleagues and, or the board, but rather the service managers. And, and so we, we ignited them and celebrated them because we realized we were all promise makers, they were promise keepers. And, and having them be, be, be measured, having them scored by their customer, having them empowered to deal with their vendors was exhilarating and it allowed us to focus on building careers for them. So in the end, they were the most highly paid and long tenured in the sector, but we also had the lowest labor cost because they were more productive. So that was one of the outcomes of this time of focusing on being a better operator.
- [51:53]
B
Yeah, that makes a lot of sense. I'm sure that could apply to businesses of all types. And then, and I'm also curious, as you looked at like the pruning process, like how did you decide, like, hey, these are the type of apartment properties we want to really focus in on and these businesses or these markets we're going to look to dispose.
- [52:13]
C
Well, unlike I sometimes read, we didn't focus on A's or B's or C's. I focused on look through the customers. Maybe having started with regional malls, I always looked at a little bit that we're in the percentage rent business and we have a look through to the incomes of the residents who live with us. And if we had a market where there's predictable demand from people that were responsible and had stable jobs and stable lives, then we could serve them whether it was a garden or high rise. And that's what we did.
- [52:50]
B
Yeah, no, that makes sense. You focus on the, the end user. So, so again we're, we're fast forwarding it again. Here you have the split off with Air Communities reit, you have the sale to Blackstone, you then later stepping down from aimco as well. So I'm, I'm curious, I mean first and foremost, you know, you mentioned at first it was a one year event. That's 30 years. Was it emotionally difficult to exit the business and also just I guess more broadly now that we see aimco winding down operations as well, is that hard to watch or just kind of know, hey, this is the right time?
- [53:24]
C
I don't know what you mean by right time, but sorry, when you had
- [53:28]
B
the exit from first for Air and then for stepping down from aimco, did you just feel like, hey, now's the right time to do this well, I
- [53:36]
C
wouldn't have done it if I didn't think it was the right thing to do. But the right time. I think the answers was a pretty good exit. Answers was a pretty good exit. Those are two integrated questions. I separated aimco and AIR in order to have air AIR be a clean portfolio that someone could analyze and pay a premium for. And that's what happened. And aimco separate with the more complicated properties, including development activities that were not well valued in the public market. And if it all could have been done instantaneously, I would have. But in retrospect we can see that we liquidated the company for a price of about $50 a share between the two and that if we were still trading today, that same business would probably be pricing in the low 30s. So it was a reason was is that it was better for shareholders, of which I was one and still am, I guess at aimco and in fact still have an equity interest in air now that I think about it. But it was important financial execution. But I think that's not all the story. Part of the story was that I was. I thought the public markets had a overemphasis on process and sometimes nutty values and that we spent time on things that were not my priorities. And what I wanted to spend time on was satisfying customers, underwriting and buying real estate and financing it long term. I'm making this call from the same office building where aimco is and AIR is. I just came down three floors to where we have a family office and kept doing the same work I'd been doing for the previous 50. And I was blessed that I was joined by some very talented people who had worked with me before. Matt Eiland had worked with me at AIMCO for 12 years, is a very able operator. Matt O' Grady was our capital markets person at AHHR. Josh Minnix was the chief investment officer. Now we have Sean labou who had been our counterparty at gic. When I realized that we were doing more raising more capital in private markets than in public markets for the last five years before we went private. So it wasn't an abrupt moment and it wasn't, you know, I didn't have a health event or it was just I realized that I could do more of what I like doing and do it more effectively in a private context.
- [56:45]
B
And I want to ask you about that first. I'm just curious. I'm just really curious to ask you. I mean, you built one of like the truly legendary and this is an exaggeration I mean, you truly have built one of the biggest, most legendary brands in, in the, in the rental housing space at aimco. Is it hard just to see that name, like, now that they're liquidating completely, is it, is it emotionally difficult to see that name essentially is moving into the history books?
- [57:10]
C
Well, I first want to ask God to forgive you your shameless exaggerations that. I don't know that it stopped traffic. It is true that our place in The S&P 500 was taken by Tesla. We're a substitute. So I think people will think AIMCO's history, Tesla is here. But I think the bigger lesson is there'll be a time when Tesla's history, the turnover in public markets. When we celebrated our 25th listing on the New York Stock Exchange, we gathered together again and the exchange pointed out that we were then something like number 172nd in seniority in the S&P 500. That in other words, there is so much turnover in life, and that's a positive thing of a dynamic market, not a negative thing. And there certainly are relationships that I miss or that matter, but being here in the building, I ride the elevator with them from time to time. But Keith Kimmel and Lisa Cohn, who are running air, are doing a great job. AIR is taking on operations for Blackstone that will reward that wonderful company far more than just the value of the properties. The operating platform expertise that we had developed will. Will make awesome. Hamid, who is the deal person at Blackstone, made a very shrewd buy, and I think hopefully he's well rewarded for it. I should, should call his bosses, I don't know, but send it. You can send them, you can send them this podcast. But the, the. But that, that, that was a. That's something that, again, the public markets didn't necessarily appreciate that we had an asset, a franchise, if you will, that we could sell in addition to the real estate values we had. And so that's what we're doing again. But the things where there's an emotional pang or a sense of change is all the people. But again, that's part of life, I think, whether it's Jerry Blakely and Paul Helmuth helping me get started, or Paul McAuliffe and David Robertson helping on the IPO, or Tom Toomey. You know, Tom was our CFO at one point. Ernie Friedman, Tom Herzog. And that would make me think again. When we went to. For that 25th anniversary on the exchange, they pointed out we had more than two dozen alumni in C suites in the Reed industry. So, I mean, I was surrounded by very able, smart, hard working men and women, and I love them all. They're all, again, having 10 brothers and sisters. This was sort of an expanded family, and that's just how I feel about them.
- [60:11]
B
Yeah. By the way, I didn't ask you about that. That's another amazing personal note about you having 10 brothers and sisters. That's pretty awesome.
- [60:18]
C
I didn't have that much to do with it.
- [60:20]
B
Well, yeah, we were part of the fuzz. My wife and I have been blessed with five kids. People think we're crazy. Everyone five. So it's boys or girls? We have four boys and a girl.
- [60:30]
A
Yeah.
- [60:31]
C
Well, I need to get you together with my youngest because she has five girls. And so there's, there's, there's a deal here somewhere. So we need to talk about it.
- [60:41]
B
All right, so you've launched Big four Properties. You've talked a little about some of the reasons for that. You know, want to stay in it. But I'm curious, just, you know, just taking a little bit of a step back. I know you're working with some great heel you mentioned as well, but after all you've accomplished in this industry, I guess just, just more kind of philosophically, like, what made you say, hey, like, I want to run it back again? Let's, let's, let's start a new one here?
- [61:03]
C
Well, let me just turn that question on you, Jay. Why are you doing this? Why did you come to work today?
- [61:10]
B
Well, I love what I do, certainly, but I'm also not in a position to be retiring yet either. So that's part of it.
- [61:16]
C
Well, you know, almost everyone's in position to work less. And those of us who are blessed by the opportunities to be busy, productive, to use the gifts that God's given us for purposes he intended. I mean, that's the meaning of life. I mean, I enjoy sports. I played sports all through school. Exercise every morning. I was on the bike this morning. But that's not the meaning of life. It's using our talents in a productive and intended way. And I love that people sometimes call it a workaholic. I think that would be an addictive description of it, but I think in a purposeful way, in a balanced way, it's what we're called to do.
- [62:07]
B
Well, that's very well said. Amen to that. I agree. And hopefully that's inspiration for others who are listening. All right, so let's talk more about Big Four. We've talked about from the 70s, 80s, 90s, 2000s and the 2000s, the AIMCO, the air transaction. Now you have Big Four. Tell us about the company today and about your investment strategy.
- [62:31]
C
Well sweep, our investment strategy is probably unchanged over that time. I'm very focused on cost, having a low basis because I'm very mindful that competitors can build almost anywhere, anytime and I need to have some advantage in competing with them. It doesn't mean to say that I'm not impacted by them because they're investment, even if unwarranted is Mark to market almost immediately. So their historic cost doesn't provide as much of a protection. But the B market is probably, I don't know, 10 times as big if you think about it. A's are probably 8 or 10%. So maybe B's are 50 or 60%. So call it five or six times as much. And so the supply booms and contractions matter a lot on this if you will, in the new car market, but not so much on the used cars that people are driving for longer. And so I like that broader market I look through to qualified customers. I think the most important job I have in the business is to pick good neighbors for our residents and good teammates to serve them. And that's what we're doing. And we keep score in cash flow. So that's after capital replacement spending. We're mindful of taxes. Our time horizon is long. The most important efficiency that I found in owning apartments is to have long tenured residents and long tenured service teams. And it's very hard to do that if I have a short term mentality and if I say that I want you to stay here and make your home here and to someone else, I'd like you to stay here and make your career here. But I'm going to flip it as quickly as I can. There's a mixed message where actions speak louder than words. And so I'm very focused on long term ownership and hope that many of the properties I buy and the companies I build will be owned by my children and grandchildren.
- [64:53]
A
Wow.
- [64:54]
B
Yeah, that'd be a great legacy. So, and then just terms of specifics like what, what are the typical vintage, you know, year built markets? Like what, what's the buy box?
- [65:04]
C
Well the, the, the, the, the buy box is defined less by age and, and by product than by predictable demand and political risk. Okay. Predictable demand is huge. And when I started, people don't recall this but we. Back in the law firm, when I was working at Hale and Door, I flew to Buffalo to file a construction loan. Because we filed them in hand in those days for the Marine Midland national bank building, which is the regional headquarters 50 story building in Buffalo because that was a big banking center. That was also the last building built in Buffalo, I think. And the Cleveland was the Dallas of the year. You know, it had more Fortune 500 companies than anywhere except New York and Chicago. So they're, they're, you know, Rochester, Hartford, you just go through. There is an ebb and flow. Just as there's turnover in the s and P500, there's turnover in, in economies and, and so I want to look for locations where I think there's predictable demand. The second thing I look at is political risk. There are different views in our country about how best to organize our public affairs. And the ones that give a large role to the government to, to allocate resources or to create rules end up being high cost and at risk of, you know, the Housing commissioner of the city of New York says that residential properties are too important be left to private ownership. Yeah, well that's, that's, that's not a good place to be investing. So, so we need a rule of law. And the third, which if any of my, my teammates watch this ever, they'll turn off right now because they've heard it so often. It'd be good to know the price, it'd be good to know how much we're paying for something because if we're paying too much, then all the rest of it doesn't, it will also be lost. So those are the kinds of things that go through. We bought two in Massachusetts, Boston and Watertown on the Charles. And those. That market's sort of frozen right now because of the pending statewide vote on rent control.
- [67:26]
B
Right.
- [67:27]
C
We bought a property in Boulder, Colorado here, which has been the best market, probably the best market in the country over these last 50 years. But, but, but now is subject as the state of Colorado is, is being pulled in some of these directions of over, over involvement in my opinion. We have a property in, in Hollywood, California and the two most recent have been in Louisville, Kentucky and Kansas City, Missouri. So I welcome the Midwest or at least I agree with the Midwest focus of Mr. Morgan. But in each of those cases, startups are hard. Startups are hard. And so we are intentionally being diversified. But in each of those locations we'll build scale over time. But you can't do that by forcing the deal. The operating efficiencies aren't so great as to offset the investment analysis. But we're laying the foundation for what we'll build over the next five years.
- [68:40]
B
That's real. I'm excited to watch what y' all do. So you know, I gotta ask. Yeah. So you've had three decades of leading publicly traded companies at least last 30 years and are you enjoying running a privately held company? You don't have to worry about earnings calls, 10Ks, Wall street ratings, all that
- [68:57]
C
ST. Well, there have been seven public companies and they were, because you've forgotten American land lease and asset investors, commercial assets, and I've done private companies along the way. So the contrast between the two is both familiar and powerful and there are advantages to both. The advantage of the public model is, is that it's a shorter time frame and I've said is a negative but in fact it is also discipline, it's transparent and there's just a cadence to I've got to get this work done so I can complete my quarterly report and get ready for my board meeting. And so that's a discipline. Private markets, you can take a longer point of view, but it helps to have that same discipline and pace. So there's something to be taken from both of them. I will confess that I'm grateful that I don't have as many investor meetings, our analysts reporting on what happened at Southgate Towers in the first 90 days of ownership. But I have plenty of investor meetings trying to explain what I'm trying to do at El Centro Apartments and how we're trying to lease them up to my partners there too. So accountability just comes with partnering with other people's money.
- [70:33]
B
Yeah, absolutely. And obviously we've got a track record to bring some support there. So Che, one last question for you. As you look back and obviously you're still building and growing, but looking back since the 70s, I'm just curious to ask you what are the biggest changes you've seen in multifamily among renters and the industry itself? Like just, just give us some, some examples of things you've seen change the most.
- [70:56]
C
Well, I, I think one you've mentioned which is the availability of information. I mean there's just much, much more information like most things and this gets lost in the day to day. But, but in most ways things are better. You know, they're every, every cycle has things that people complain about. This time it's affordability. But, but I, I, I think, I don't agree with that as a concern. People are saying I can't afford an apartment because I have my iPhone and my, my Netflix and my, and I don't Want a roommate. So, so in other words, that we're, we're, we're, we're dealing with problems of prosperity, not problems of want. I do think a less negative development has been the sort of deterioration, if you will. I don't know if that's the right word, but the change in family life, that there was a greater predictability that people would marry and have five children and build a family and so forth, and that is now delayed. And I just, I know many, many friends who found themselves on the end of it and they wish they were otherwise, both in terms of intact families and children. Those are big values to me. And so those kinds of changes have also had been a source of demand for apartments. So when one of my first properties was Riverbend Apartments in Atlanta, Georgia, on the Chattahoochee, and it served graduates of the University of Georgia who left Athens, the classic city, on graduation, spent two years in Buckhead finding the right person, married and then moved to, I don't know, Cobb county and Gwinnett and had had babies. That now is a more extended process. And so you're much more likely to have single person households. You're much more likely to have older people. And when I think about targeting older people, I'm more sympathetic than I used to be. So I think that development, but I think I'd say that that's the biggest change in demographics that I would call out.
- [73:23]
B
Well, Terry, thank you so much. Let me pick your brain. I know I'm sure everybody watching this has really enjoyed hearing it. But also thank you for what you've done for the industry, for housing in our country and certainly wish you all the best in this next chapter with Big Four.
- [73:38]
C
Okay. Well, Jay, thank you very much. I appreciate the opportunity. Be well.
- [74:00]
A
It was a lot of fun talking with Terry. Big thanks again for Terry for being our guest today. Thank you also to JPI Madera to Funnel, Bercadia Authentic and Telecloud for sponsoring today's episode. Thank you to all of you for spending your time with us today. We'll see you next week.