CB Richard Ellis President and CEO Brett White: Interview transcript
CB Richard Ellis President and CEO Brett White.
TEXT OF INTERVIEW
Kai Ryssdal: Brett White, good to have you with us.
Brett White: Thank you.
Ryssdal: I imagine you guys had something of a "heads up" as to how your business model was going to go watching residential real estate, huh?
White: We did. We've been saying for quite some time, actually the last four quarters, that the shock to the capital markets and the credit markets that we saw last August, a year ago August, would manifest itself in the commercial markets in a big way. We also, over a year ago, saw signs of recession coming and talked about the fact that that would have an impact on the economy as well, which it certainly has.
Ryssdal: So what did you do to get yourself ready? I mean, you saw these things coming. Nothing like a little forewarning.
White: Right. Well, the good news for us is that we've been in this business a very long time, over a hundred years. We've been through lots of down cycles and we know what to do, and we push on all different types of levers in markets like this. We cut costs. We get very close to our clients and understand what their new needs are. We explore new business opportunities in the market, and there are certainly a number of those out there. So we've been very busy this past year.
Ryssdal: But where is the upside?
White: Good question. I think it's in a number of places. Look, any time you are in a challenging market like this, there are opportunities. There are opportunities in M & A. So we are seeing firms out there who we never thought would come available -- for acquisition become available.
Ryssdal: So you guys are buying.
White: We are looking at deals. I wouldn't say we are buying anything right now but we are looking at deals. And we are very interested in how this market plays out and which firms come under more stress than others and might be interested in a deal with us. We also see terrific business opportunities in new areas such as our new contract with the FDIC. And a lot of work we are doing on restructuring of balance sheets for large customers, working with banks and helping them restructure loans that they have taken back. There's a lot out there to do.
Ryssdal: We'll get to that FDIC thing in a minute but I wanted to talk about current market conditions first for a second. Seems to me there is not a lot of commercial real estate movement going on. Not too many people buying skyscrapers, not too many people upsizing into nice office space, so you guys don't have a lot of transactional revenue coming in, right? How dependent are you now on the credit markets which are stuck?
White: Right. Well, let me answer that question two ways. First, the way that this down cycle appeared was in the credit markets. And what the credit markets did was they froze. This began August 2007 and it's just gotten worse every month since. And that has manifested itself since in a steady decline in the buying and selling of commercial real estate. No secret to anybody. And you're right, the volumes in that business globally are at unprecedented low levels. We're seeing a decline in that activity unlike anything we've ever seen before. That having been said, the fundamentals behind commercial real estate are actually quite good. And what I mean by that is there is very little vacant space in the marketplace; rental rates are at a very good level; and if you're an owner of a commercial building right now, an office building like the one we're sitting in, and you don't have a loan coming due, you're in pretty good shape. Now, that having been said, I think that there's a lot of fear now and rightly so. That the recession that looks to be now protracted and severe, is and will lead to more and more layoffs that will put space back on the marketplace, and that will pressure rents. So in the transactional businesses that we have, the sale side has been under pressure now for 18 months. The leasing businesses, pretty resilient.
Ryssdal: Granted, there are a lot of differences between commercial and residential real estate, and those business models and how they work, but do you worry that commercial real estate could get as bad as residential real estate is?
White: No. I think that there are similarities but they are very different, and the first difference is commercial real estate produces income, theoretically. And so as you look at this stock of commercial assets around the country and around the world, these are buildings that have tenants that are paying an income. These are not buildings that were bought empty, speculatively, or for someone's personal use. And so the fundamentals that underpin this marketplace and commercial space are based on income off the property as opposed to wild speculation. I think the residential market is suffering for lots of reasons, but one reason is speculation. The other is very poor underwriting behind the mortgages.
Ryssdal: You can break down commercial real estate very basically into a couple of different sectors, right? You've got office space, you've got retail space, you've got industrial and then I suppose rental/residential, multifamily. Pick one. Tell me which one is doing best.
White: Good question.
Ryssdal: Or maybe least bad, right?
White: Right. It depends on where you are around the world and there are different answers for different geographies. Generally speaking, I think that our asset class is behaving just like the other asset classes in that is . . . those types of assets that are believed to have more risks are being hammered the most in this marketplace. So for example, if you and I were to look at class A high-rise office buildings in a major, urban CBD, we're going to find . . .
Ryssdal: Major urban . . . ?
White: Downtown area.
Ryssdal: Gotcha. Oh, commercial business district.
White: Central business district. What we would find is those buildings have certainly declined in values somewhat. Perhaps five, 10, maybe 15 percent. Now let's get in our car. Let's drive 25 minutes out of town to a suburban marketplace. Let's look at an office building, a three-story wooden office building built in the 1980's. That property may have devalued already 30 or 40 percent. So what the market is doing is, it is again pricing risk. And our asset class is no different than the other asset classes you've been watching for the last eight years. Risk was priced out. It's now coming back into the equation as it should.
Ryssdal: To paraphrase Allen Greenspan, are there different real estate markets, in the commercial sense, in this country? Is Los Angeles different than New York, different than Chicago, different than Atlanta? I mean, Greenspan called it a frothy market. Not bubbles but frothy. Is it the same way for commercial?
White: The markets are different and they're different because the commercial estate market fundamentally is underpinned by jobs. And so as you go around the country, you go around the world, and you look at local economies, those markets have strong local economies. For example, you look at Houston. Houston this past year has done very well in commercial space. Why? It was benefitting from high oil prices. Now, that will change. But it is not the same everywhere and there are opportunities in the marketplace in lots of places. Again, it is based on the characteristics of that local economy.
Ryssdal: What about the one that everybody seems to key on, New York City and Manhattan real estate?
White: New York City is a very interesting story. It has been enjoying historically low vacancy rates. It has been enjoying historically high rental rates. And then all of a sudden we have these massive layoffs in the financial services industry. The view now on New York City is it is going to feel some fairly serious pain in the coming year or two years as those layoffs turn into sublet space going into the marketplace. But at the moment, vacancy rates are still relatively low in New York, rental rates still on a historical basis, still relatively high.
Ryssdal: Let's talk about the opportunities that you have in this industry. You call it -- I think you mentioned it already -- restructuring services.
Ryssdal: Helping companies that have acquired distressed properties, turn them around and make something of them. How does that work and how are you doing it?
White: Well, what's happening right now in the marketplace is you are seeing a fairly dramatic shift of ownership of real estate. And that ownership is going from investors who bought the real estate the last four or five or six years. Many of them now have real problems on those assets. They have loans coming due. They can't refinance those loans and, in some cases, we can help them restructure. We can look at their portfolio and assist them in finding those assets that have real value, sell those assets for them, bring that equity in and restructure the capital stock they have on these other buildings. In some cases, unfortunately, they're losing those buildings. And we will help the lender look at the portfolio and do the same sorts of things. The FDIC contract is just another extension of that where a large amount of commercial real estate is moving from private hands into the FDIC. And we'll help them look at those assets, manage those assets and ultimately sell them.
Ryssdal: It must be a pretty good client to have, the FDIC, in times like these.
White: It's a very good client to have. The FDIC is not emotionally wed to the properties. They'll move them quickly and, for us, that's very helpful.
Ryssdal: Is that a problem you have in commercial real estate, people being emotionally attached to properties? It totally makes sense in residential, right? This is my house and I love the house. But c'mon, an office building is an office building.
White: You know, it's a great question. I think one of the reasons that commercial real estate is such a terrific asset class and why it tends to do well in most markets is you can touch it, you can feel it, you can drive down the highway with your wife and kids and point to it and say "I own that building" or "My firm owns that building." And there is no question that there is something rooted there. And people don't like giving up their buildings. It's not like owning equities. It's not like where you call your broker up and say, "I'm through with this particular equity. I want you to sell it today." Folks that own office buildings and industrial parks and retail centers do almost anything they can to hold those properties through down times. And by the way, they hold them for very good economic reasons. They know that these hard times right now will end and those properties will have more value again in the future.
Ryssdal: When you're consulting and advising clients that you have about the risk/reward curve in a down economy, is that something you talk about -- Just sit tight because it's going to turn around?
White: Absolutely. We have many, many clients right now who have very good financing on their buildings. They don't need to sell in this marketplace and we would absolutely counsel them not to. You have to remember, as bleak as things seem right now, we are facing unique headwinds. They're synchronous. We have a number of negative dynamics in the marketplace that have never played together like this before. And this will end. So the trades that are getting done now, in any asset class -- whether it's commercial buildings or equities or anything else -- trades being done now are almost definitionally distressed trades. And distressed trades definitionally are at a very, very low value and probably at a value that isn't going to stick around for a long time. So those that can hold, should.
Ryssdal: But it's so tough. Even in a business that's so transactional, you know, buying and selling a building is maybe the definition of a transaction. It's so tough to see the end.
White: It is, but most of us, yourself included, we've been around for awhile. We've seen lots of cycles and we know that this too will end. When it will end is the question. And how deep this current downturn goes is the question. And no one has the answer and, Kai, that's the challenge right now. Which is, in most downturns, you and I could sit down, we could pull data, look at a lot of different data points, we could look at history, and we could within a margin of error model this out. This downturn is unique.
Ryssdal: What do you think then of the push that is emerging in Washington and has been on the rise for a number of weeks now, that we need to do something about mortgages and residential real estate to turn this whole thing around. What do you think?
White: I think it is a very, very important and good idea. There is no question that the housing downturn is the root cause of all of this. And in the United States in particular, most of people's net worth is tied up in their home. So the lack of trading of residential real estate, the decline in values of residential real estate is manifesting itself in a very ugly way right now. Until that problem is fixed, I think we're going to be suffering through this current downturn for awhile.
Ryssdal: I imagine you have some people you talk to in Washington in Government about this entire business cycle issue. Who do you talk to and what do you say?
White: We talk to lots of people in Washington and again, our focus is primarily on the commercial real estate asset class. But what we're saying is very simple. We look at the market place today, whether you own commercial real estate or you operate a company or you are an individual who owns a home, fundamentally the problem out there right now is the lack of normally functioning credit markets. And the lack of those normally functioning credit markets means that you and I right now, if we wanted to buy a new home, we would have a hard time doing it. You and I, if we run a corporation and we have debt with that corporation, we would have a very hard time refinancing it. You and I, if we own a building that's performing well and is spinning off income, but if we've have debt on that building coming due, we've got a very hard time right now figuring out how to deal with that. So fundamentally, our focus is a support and our efforts to correct the current dysfunction in the credit markets. When that happens, lots of good things begin happening.
Ryssdal: Are those credit markets and the dysfunction affecting you day to day?
White: Absolutely in every way, shape and form. Put aside for the moment the buying and selling of buildings, and just think about our clients. Our clients are typically very large owners of real estate or large corporations who occupy real estate. Every one of those corporations right now, virtually every firm in the Fortune 500 is working very, very hard right now to figure out how to deal with this credit market issue. Whether they need short-term paper to operate their business every day, whether they have debt on their balance sheet they had incurred for acquisitions or for corporate purposes, these are scary times for those firms and it's causing them to behave in certain ways and conduct activities in certain ways that manifests itself in the marketplace both in terms of challenges and opportunities for us. The big opportunity for us with those folks is they need lots of help right now. And we're here to help them.
Ryssdal: Broadly speaking, do you think commercial real estate is place for an individual investor to be? I'm speaking of real estate investment trusts and those kinds of things.
White: I do. I believe that commercial real estate as an asset class, if you look over a long period of time, you'll find that commercial real estate has out-performed equities by a pretty significant margin. And I think that commercial real estate will continue to do that. For an individual however, the key is liquidity. It's very difficult for our friends and neighbors who go out and buy an office building, they can't do it. But investing in REITS or other liquid types of investment in commercial real estate, I think, is a terrific and necessary piece of a good investors portfolio. And I would use as an example, very smart pension funds. If you were to look across the pension fund world, you would find that as a rule, most pension funds are invested in commercial real estate between six and twelve percent. And that seems about right to me.
Ryssdal: We've talked about asset classes a little bit today; commercial real estate, equity, those sorts of things. The asset class that is CB Richard Ellis stock has had some problems lately. What do you tell your shareholders when they see their value in your company decreasing?
White: Well, we tell them a lot of things. First, it's a great entry point to increase their shareholdings.
Ryssdal: It's a buying opportunity!
White: It's a buying opportunity. Again, I've been in this business 25 years, all of them with this firm. I've seen many downturns in the marketplace. I've seen a couple downturns in our stock. What I know is that the markets will recover. What I know is that CBG will profit from that recovery. And what I like to do with our investors or potential investors is just point to the data. And I can take them back to the downturn of the early 1990s, the downturn of 2001 through 2004, and what that data will show is that this firm know how to operate in down markets and knows how to profit from them. So what I know is that when recovery comes, whenever it comes is that this firm will do quite well.
Ryssdal: When are you going to know that the recovery has hit? What are the leading indicators that you look for as you sit in your office?
White: There are a number of indicators that we watch very carefully. I would say that probably more important . . . well, I think that this recovery will be led by a recovery in the capital markets and credit markets first. I believe that will happen before the recession is over. So if that's true, and I think it is, what we're watching right now very carefully is the behavior of the credit markets. Now, they're in worse shape today than they've been in the last 18 months. It's total seizure and dysfunction in those markets right now. When that begins to correct, when you see spreads begin to narrow . . .
Ryssdal: Credit spreads . . .
White: Credit spreads begin to narrow. When you see T-bills auctioned, 3-month T-bills auctioned at something above .005, you'll know that the markets are beginning to behave normally again. And that, I think, is your first signal of recovery.
Ryssdal: How long is it going to take, that recovery? I mean, we've been down a while now.
White: Kai, if I knew that, I could make a living doing other things than running this company. But my guess is this . . . My guess is that you are going to see some stability come into the credit markets in 2009. Whether it is mid or late 2009, I have no idea. I'm afraid that the recession will last at least that long and that in our business, again what we're going to see is recovery in the credit markets and the capital markets to some extent in 2009. Now I want to condition that by saying it's off of an extraordinarily low level. So recovery, in my mind would look like a disaster scenario three years ago. But it's a recovery none the less.
Ryssdal: What does it mean, actually, when you say, as you sit here running this company? What do you do?
White: In my job . . . day to day?
Ryssdal: Yeah. What do you do? How do you run a commercial/residential real estate management company?
White: No residential.
Ryssdal: Good point. Let me rephrase the question. What do you do? How do you run a commercial management company like this?
White: Our firm is a very, very large company. We've got 30,000 employees around the world, 450 offices around the world, we operate in over 50 countries, and we've got eight large and complex business lines. So that sounds pretty complex, but it really isn't. And the way I think about running this company, and I think my management team would agree, is we have only three constituencies. We have our clients which come first and foremost. We have our employees and we have our shareholders. And so, good times or bad, I focus on those three constituencies. In tough times like these right now, I'm spending a lot of my time talking to our employees and talking to our clients. And I think that when you are going through periods like this, a couple things to keep in mind: first, to a lot of folks who work for us and frankly a lot of our clients, they haven't been through downturns like this before. So giving them some historical context to let them know that this . . . although that this one feels unique, it isn't. Markets go up and markets go down. Showing clients and employees that there are enormous opportunities in markets like this. Keeping people focused on the positive while taking care of the very difficult work that needs to get done. That's our job and that's what I spend my time doing.
Ryssdal: There's been a tendency to concentrate a lot as this downturn has gotten worse on our situation here, but you guys are a global company and you manage facilities and have clients all over the world. Are there opportunities now, internationally for you guys?
White: Absolutely there are opportunities internationally for us. You know, it's interesting, a year and a half ago there was a concept that the global economies had de-coupled. That the way that the United States went didn't necessarily impact the way that Asia went, or the way that Europe went and I think that idea of de-coupling has been completely dispelled. And we are in a situation that feels to me a lot like prior downturns, which is we are all basically moving together but at different paces and we all entered this down cycle at different times. The U.S. led into the down cycle because of the sub-prime issue and so, I suspect, the U.S. will lead out. We're seeing issues that were extent in the U.S. market a year ago now beginning to play out in Asia for example. And so lessons that we've learned the past year about where opportunities will arise, we can apply to other markets around the world. I would also say that the U.S. again, is emerging as, I think a stronger market than some would have thought two years ago; a more important market than I think some were ready to admit to a few years ago. China, I heard today is forecasting 6% GDP growth, which we'd love to have here, but it's half of their GDP the last couple of years. And so that says something and it defines where opportunities are and it defines where challenges are. There are going to be real challenges in Asia for the next couple of years.
Ryssdal: There's been a thread pretty much ever since Bear Stearns went under almost a year ago now that somehow capitalism and Wall Street are changing and the way we do business is going to change. Is the way you do business in commercial property going to change?
White: Well I think any company is going to be impacted by the changes that are quickly moving through Washington and through our economy. And the idea that Capitalism is dead, of course, is silly. It isn't. But there's no question that the ills that we are paying the price for now were created by lax regulation, were created by extremely poor matching of incentives against risks, and those things are being fixed violently and quickly. And so the pendulum has gone from one end and is moving very quickly to the other and we'll all feel that. It's like Sarbanes Oxley. Sarbanes Oxley, which came in with a vengeance some years ago, went very far to one end as a correction is now begun to come back towards the middle. The same will happen here. Capitalism isn't dead. Risk isn't dead but we're all going to feel the pain as we find the middle ground again.
Ryssdal: Just like Sarbanes Oxley after Enron, do you think we're in for more government regulation and a closer hand in the markets?
White: Absolutely! It's inevitable. We're seeing it every day.
Ryssdal: Let me back up and get back to your FDIC arrangement and what you're doing for them. As you work through the problem of some of these distressed properties that you're working with the FDIC on, do you ever sort of think that it's too bad that you're sort of making a business out of other people's lost opportunity?
White: Here's how I think about it. On the one hand, I wish there were no need for the FDIC to take any of these assets back but unfortunately, part of the movement from this very, very difficult economy to recovery is going to be some very painful movement of assets and leverage from one hand to the other. And if we can help that process occur more efficiently and more quickly, then we're helping the overall economy. And make no doubt about it. I think the lesson that the United States has learned many times over is the more quickly you can move on issues like these, the faster you can get that pain through the system and allow assets to trade again and find their rightful value and level, the quicker you're going to get back to recovery. Trying to artificially prop up the markets or allow -- and let's take the FDIC example -- and allow institutions with failed business models to extend their life, I think you are delaying the inevitable and frankly you're delaying recovery. So getting to recovery is a very painful thing. Our role in that is to assist that process to occur efficiently and quickly. And so I'm proud of the role we are playing. I think the FDIC has a very tough job ahead of them and who knows how many thrifts are going to fail. Maybe 30 or maybe 300, we don't know. But helping government make educated decisions around these assets and helping them extract value from these assets helps the taxpayer, helps the economy and helps the country.
Ryssdal: When you saw this coming, this problem in commercial real estate via residential real estate and the credit squeeze, what steps did you take to protect yourself?
White: We did a number of things and you know, one of the things we do here I think, very well is we are very respectful of history. And as I said earlier, we've been in business a very long time and we keep an enormous amount of data on every period of time that this company has operated in. And so if you went back and listened to our 4th quarter earnings call in 2007, in fact our 3rd quarter earnings call, you would have heard us talking about the fact that the data was telling us that hard times were coming. So what did we do about that? We very quickly began moving on costs. And so in up markets, services firms tend to invest heavily in growth. We began to bring that investment down significantly in late 2007. We began to work with our people to help educate them about where opportunities might exist in 2008 and 2009. These opportunities were seen with the FDIC. And the restructuring services group which we have in place globally right now with a hub in New York and in London are initiatives which we simply dusted off from the days of the RTC.
Ryssdal: Resolution Trust back in the Savings and Loan days.
White: That's right. And it's exactly the same activities with generally the same players.
Ryssdal: What does that tell you, that we've done all this before?
White: It tells you that we tend to never learn. And that one thing we know about these markets is they cycle. And they cycle because
in good times I think it's very easy to forget about the bad times. And of course, when the bad times come like they are now, we all look back and say "I should've known better."
Ryssdal: You said a moment ago that the leasing business is resilient in a
time like this. How does that work in this kind of economy?
White: It's interesting. It's resilient this time. And it's perplexing.
Ryssdal: That's not reassuring to hear a guy like you say it's perplexing.
White: Well it is and by the way, I would tell you that this entire down turn, this down cycle has been perplexing. We're seeing data points, we're seeing these poor times manifest itself in the business in very, very strange and unique ways but leasing has been particularly interesting and I think there is a great story here which is, when we went into the 2001-2004 downturn, we were coming off of an overexuberance of the leasing markets which was based on a very, very fast growing high-tech economy. And if you remember back to those days, you will remember that in the late 1990's, the dynamic in the commercial real estate market was that if you were in business, you needed to go out and lease the space next door to you or the space above you or below you in the building you were in because if you didn't, someone else would. And these large, high-tech firms and internet-based firms were taking down space faster than anyone could get ahead of. So we went into 2001-2003, and what happened was there was this massive disgorgement of space into the market place. We saw high-tech companies who had pre-leased millions of square feet of space, never occupied that space, put it all back in the marketplace at one time. Our company and thousands of companies like ours learned their lesson. And so 2003- 2007, generally speaking, corporations did not go long on space. People have been much more efficient about the space they use and how they occupy space. So even though there has been an unrelenting series of bad facts coming to the marketplace the last 18 months, leasing has held up very well because companies were not long on space. There is only so much shock the system can take and I do believe that we are at that inflection point, that the leasing business is going to feel some significant pain in 2009 and 10 but it has been amazingly resilient the last 18 months.
Ryssdal: Switching topics here for a second . . . with the value of distressed
properties really quite low by historical and maybe even absolute
standards, there's got to be some bargains out there. Where are
White: There are bargains and I would say as a rule, anyone who is selling into this market place right now is distressed. And by definition,
any distressed sale is a great opportunity for a buyer that can wait out this cycle. So my guess is that the type of valuations we're
seeing transacted in the market place right now, as we sit here today are abnormally low. And that those particularly low valuations you're seeing this month, last month, perhaps the next few months may really be once in a decade opportunities. The market place isn't going to correct back to anything like what we saw in 2006 and 5 and 4 but it will find it's feet and these abnormally low values, I believe are opportunities that will go away.
Ryssdal: Are we talking about high-rise buildings in major urban areas or are we talking about strip malls in suburban Detroit or what are we talking about here?
White: The math is even easier than that. The math is any asset of any type, this is my view, it may not be your view, of any type right now, that someone is selling right now is probably going out at a historically low valuation. Whether it's equities, whether it's commodities, whether it's real estate.
Ryssdal: Well that gets into the whole "are we at the bottom" thing. Don't you worry that maybe we're not? Specifically now in commercial property, which is your area. Don't you worry we're not at the bottom yet?
White: I don't think that we are at the bottom but there are unique things happening right now that are impacting the commercial real estate asset class and that is that the credit markets behind commercial real estate blew up a month ago. Absolutely blew up. And so there are very few buyers in the market place of any sort right now and there's almost no credit available right now. That situation will correct a bit I believe, in the coming months and will allow valuations to find their right level. Now you look at properties trading today and whether those properties might be worth 5% or 10% more in a month or two months, I don't know but I think that's very possible. As a rule though, absolutely the asset class is devaluing as we speak and it probably isn't done.
Ryssdal: So even if we are not at the bottom now, we'll go a little farther but in terms of historical trends, we're eventually going to see an
upside and this is an opportunity.
White: Absolutely. Here's some data points for you. There have been
hundreds of billions of dollars of equity raised in 2008 for this
asset class. Of those hundreds of billions of dollars, that have been raised, my guess is a single digit percentage has been put to work. all that money is parked on the sideline waiting to enter the market place. I think we're getting close.
Ryssdal: It's got to drive you crazy knowing all this money is out there.
White: Well it does! We've raised some of it. And our firm has raised
close to 5 billion dollars of equity this year for investment and
we're on the sideline also waiting for that point in time. I think
we're getting very close.
Ryssdal: What's it going to take? When are you going to call the Chairman
of the Board and you're going to have a big board meeting and you
are going to say, "O.K. Now."
White: I think we're close to there. In our asset class, I think it's true in most businesses, it's impossible to time the bottom. What you
want to do is be generally correct. So, I saw someone on
television the other morning talking about equities, which I know
nothing about. But this persons' point was, if you could buy into
equities today and you knew they might devalue another 20% over
The next year but they will increase in value 60% over two years,
are you a buyer? And the answer is yes. The same is true for this
asset class. I think that in the coming months, you will find that
the bid/ask spread -- what sellers' expectations, what buyers will
pay -- is going to narrow significantly, and you will see trading again,
albeit at much lower valuations than we saw a year, a year-and-a-
Ryssdal: That spread, that bid/ask spread . . . do you know that sellers expectations are going to come down or are buyers offers going to come up?
White: Sellers expectations are going to have to come down.
Ryssdal: Brett White is the President and CEO of CB Richard Ellis. Mr. White, thanks a lot for your time.
White: Thank you very much.