OZ Pitch Day - March 7, 2024
Opportunity zones can benefit multifamily investors in a range of ways. Multifamily investments offer several tax benefits, income appreciation, and are a hedge against inflation. Coupled with OZ funds, multifamily housing offers several more compelling advantages. In particular, the Southeast is an area with substantial growth potential for OZ fund investors in this particular real estate niche.
James Brunger serves as executive vice president, national sales of Capital Square 1031, a national real estate investment and management company. Whitson Huffman oversees investment activity at Capital Square, which includes leadership of the firm’s real estate investments related to its Delaware statutory trust/Section 1031 exchanges, qualified opportunity zone funds and other private placement investment offerings.
Click the play button above to listen to our conversation with James and Whit.
- Current trends in opportunity zone investments and how can investors take advantage of the growth to come.
- Important criteria for selecting multifamily developments, specifically in the Southeast.
- How multifamily investments can offer a hedge against inflation.
- Single asset funds and the benefits associated with them.
- How multifamily investing stacks up to other investments such as single family home and short-term rentals.
- Financing multifamily properties in opportunity zones and sustainability of development efforts.
- Opportunity zones as a positive social impact alongside risk-adjusted returns.
- How opportunity zones spur investment of wealth into historically underserved communities.
Featured On This Episode
Industry Spotlight: Capital Square 1031
Founded in 2012, Capital Square is a leader among tax-advantaged real estate investment sponsors with nearly $1 billion in equity raised. The company’s experienced, investor-centric team provides a successful foundation for investment opportunities, including Delaware statutory trusts as replacement properties for 1031 exchanges, qualified opportunity zones, and private investment offerings.
Learn More About Capital Square 1031
About The Opportunity Zones Podcast
Hosted by OpportunityDb.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.
Jimmy: Welcome to The Opportunity Zones Podcast. I’m your host, Jimmy Atkinson. Joining me on the show today are two executives from Capitol Square, a leading provider of tax-advantaged real estate solutions. Whit Huffman is chief investment officer and James Brunger is EVP head of sales and distribution. Whit and James, welcome to the podcast.
James: Thanks for having us, great to be here.
Whit: Yeah, really appreciate it, Jimmy. Thank you.
Jimmy: Yeah. Great to have both of you gentlemen on. James, you just joined me earlier this month for our OZ Pitch Day Event, which was pretty successful, and I know you guys are still going through some follow-ups there, and, hopefully, some good things come out of that for you. So let’s start off today with talking about OZ investment trends. What trends are the two of you seeing generally in opportunity zone investments?
James: I’ll start on that one, Jimmy, and yeah, thank you again for the pitch day. I mean, you do a tremendous job on that. A lot of success. I hope the investors…it seems like the investors have really being engaged. So, appreciate the opportunity there. On the trends that we’re seeing, this sounds kind of odd, but this is probably the first year since the opportunity zones were created and introduced in 2017 as part of the Tax and Jobs Act. This is the first year where I feel like people actually know what we’re talking about. So, I wanna say opportunity zones are starting to really kind of take notice, and the benefits associated with investing in them from an investor perspective are really being paid attention to and highlighted. And then I’ve also seen a number of articles talking about the benefits to the actual opportunity zone themselves, with a lot of capital going into these under-capitalized communities in the form of, obviously, in our case, real estate development.
So, specifically, I think the trend line is really positive that the programs are finally getting their due and notoriety. And it’s not just about tax, but it’s actually about what they’re creating in the zones as well. Whit, maybe anything about the real estate that you’re seeing in the opportunity zones?
Whit: Yes. We saw a lot of hospitality investment, pre-COVID, go into the opportunity zones, and especially in some places that would make a lot of sense, like in Florida and some more resort-driven geographies. I think today’s investment trend line really skews heavily towards multi-family. Given the post-COVID world that we live in and the uncertainty around office, it doesn’t take too much imagination to see that office might be a scary investment to make when you’re looking out over a 10-year timeline in horizon.
Hospitality has certainly taken its lumps, but we’re actually starting to see some investment in hospitality-driven opportunity zones, specifically in Florida, Miami, places like that, that pretty resilient on a relative basis during the pandemic, seeing almost no activity outside of those core hospitality markets. But multi-family continues to be the flavor of the day, and I think it will continue to be, certainly for the next year or two.
Jimmy: Good. Well, I wanna talk more about that, and asset classes, and opportunity zones in a minute, but before we go on, I wanna zoom out and get the bigger picture about Capitol Square. Can you tell us a little bit about what Capital Square is and the types of products that you offer?
James: Yeah. So Capital Square, we’re a tax-advantaged real estate sponsor. We’re based and headquartered in Richmond, Virginia. We have about $3.2 billion in total assets under management, really focused the first eight years or so of the company on Delaware Statutory Trust for 1031 exchanges. So a lot of our programs, there are over 80 programs in DSTs, but we’re the second-largest sponsor now of DST programs for 1031 exchange. From that basis, you know, with our focus and where we’re geographically focused and all that…we’ll talk a little bit more about that. We’re really focused in Southeast markets, mainly multi-family. That’s the core of what we do, but we do have experience across all asset types on a national scale. We see a lot of different things, a variety of different markets, but very successful in tax-advantaged real estate opportunity zones. We’re on our sixth fund. We have our own in-house development company, and we do a variety of different developments, but mostly focused on multi-family.
Really, OZ is kind of displayed right to our strengths, being tax-advantaged real estate sponsor, and then right to our development strengths as well. So, I’m thrilled that it came about as legislation, and it’s really been a great and growing part of our business. Whit, you wanna add anything to that about Capital Square?
Whit: Yeah. And I think you really hit the nail on the head, James. Historically, we’ve been predominantly a Delaware Statutory Trust sponsor. I joined the firm in 2018, from an institutional owner and private equity fund manager. And our core competency was urban infill mixed-use development. So when I joined Capitol Square, the Tax Cuts and Jobs Act had been passed. Leaning into the development was really a no-brainer for us. I came with some development experience. The key question was, how do we build out that vertical? And we were fortunate enough to find Adam Stifel, who had built a very successful real estate company headquartered in Washington, D.C. We were able to get him on board in a few initial projects, but like many things, the Tax Cuts and Jobs Act really was a natural parlay off of the Delaware Statutory Trust business, just like our private non-traded REIT is really a good playoff of the DST as well. And we’re able to leverage that deep experience investing in the Southeast and bring it to the development side of the business. And as a part of our businesses, it’s incredibly fast-growing. It’s one that we’re very excited about, and we’re already on our sixth opportunity zone fund, and we’re actually delivering our first residential units here next month on what we call OZ Fund 1.
Jimmy: Good. And I wanna ask you more about those particular funds and the projects that you’re investing in a little bit later in the episode, but, yeah. Yeah. And you’re absolutely right. There is a lot of overlap between those different types of tax-advantaged real estate investment wrappers, whether it’s a REIT or a DST or an opportunity zone. Definitely a lot of overlap there. We talked a little bit about asset classes already. It seems like multi-family is the most viable and certainly the most popular for opportunity zones. That’s what I see at least on my platform that the majority of…or I’d say at least the plurality of the deals that I see are multi-family deals. Why is multi-family so popular with opportunity zones, and why is it more resilient than other asset classes, do you think?
Whit: Sure. Well, I think the traditional way investors have viewed security as it relates to real assets has really shifted since the COVID-19 pandemic. Essential retail turned out to not be that essential when you can order everything on Amazon. And investment in the tech sector in the last mile distribution and getting goods and services to consumers using apps on your phone has really been disruptive to the traditional business model around essential retail, right? So, if you can, kind of, then say, “Well, what is truly essential?” There’s nothing more essential than having a roof over your head, right? Everybody wants a place to live. Everybody needs a place to live. And so whether that is a single-family home, a home that you own, a home that you rent, or it’s multi-family housing, a condo that you own, or an apartment that you rent, there’s nothing more essential than a roof over your head. And the pandemic proved that out.
And I think as we come through this, right, and seeing the resiliency of multi-family, especially as it relates to collections…90-plus percent of renters in the class A space is paying their rent on time, even though we’re going through this exceptionally tough unprecedented event in the world, I think really, really has shown a bright light on the multi-family sector. And it truly is, right, nothing more essential than a roof over your head.
James: Just to add there, Jimmy, our economic advisor, Dr. Peter Letterman, Warden School professor of real estate, he has written a white paper called “The Golden Age of Multi-Family Investing.” So, specifically, we have a chronic undersupply of housing, and specifically in a lot of the opportunity zones that have been undercapitalized, the only reason why the designated opportunity zones, housing is by far the biggest need. And that is really where, at least for us, we see the opportunity to be able to build multi-family and additional housing units to help, you know, some of the supply constraints that we’ve been really about 30% under building towards decades here in the U.S. Really, opportunity zones give you the chance to accelerate, specifically in those communities and those areas of need for really great housing. So, it really kind of dovetails super nicely to the whole idea and concept of an opportunity zone to build more housing solution.
Jimmy: No, that’s great. Yeah. I mean, there is a chronic undersupply of housing, as you mentioned, a housing shortage in much of the country, and, certainly, with the booming demographics in the Southeast where you guys are focused, I would imagine that that’s quite the case as well. It’s hard to build too much multi-family these days, it seems, in this country. But I want to talk about your pipeline a little bit now. And when you guys are seeking out multi-family developments, what criteria are you focused on?
Whit: Yeah, we are focused on kind of at a macro level geographies or MSAs that have a growing population, right? And that’s for obvious reasons. Growing population, more demand for housing. We’re also looking at incomes. So, and then diving a little bit deeper into that. What is the makeup of the MSA? What is it on a market-by-market or sub-market-by-sub-market level? And so we kind of start looking at a high level, well, where are cities are growing, where are jobs growing, where are wages growing? And we start to really narrow down our lens and focus, not just into a city, but into a certain neighborhood, right? And then, obviously, not every neighborhood is an opportunity zone. So we’re looking for those opportunity zones that are in the path of growth. Maybe it’s barbelled between two really hot neighborhoods that are growing, and we need to fill in the gaps, or maybe the city is expanding from east to west, and, clearly, we’re a little bit adventurous today, but you can see exactly where things are headed.
And so we’re looking at it at a very micro level. And I think we’re looking for those opportunity zones where, in 10 years, people will be shocked that they were ever an opportunity zone. All they really needed was an investment catalyst, and that’s what these opportunity zones can do. For us, is what they can do for communities is they can be that catalyst for growth. And then, obviously, our investors are rewarded through, whether it be an attractive land basis, an unbelievable asset that appreciates in value as the submarket grows around it. There’s a really clear path to value enhancement as neighborhoods are lifted, as rents grow, and as pockets of these cities that previously have been underserved from an investment perspective, get the attention that they deserve.
James: Well, it boils down to kind of, on a map, if you will, Jimmy, is Southeastern secondary, tertiary markets, non-gateway, just simply for the fact that the gateway markets have generally had lots of capital flowing into them, development capital, not mature, but relatively mature. And then we also saw…I love Whit’s point there about the pathway to growth. Some of the gateway cities went and are going negative, were flat-lining on their growth where the secondary and tertiary markets are really the great pathways to growth. So, we see these excellent opportunities, but it’s not going to be in kind of the marquee cities that you generally would see, you know, big international airport data, if you will. Really, the secondary markets that have done quite well, but need the capital, need the investment.
Jimmy: Well, let’s talk about specific markets. Which specific cities or markets do you guys like? And can you talk about it in a little bit more detail?
Whit: Yeah. Sure. I’d be happy to. So, obviously, a market that we have been heavily investing in is Richmond, Virginia and the Scott’s Addition neighborhood in Richmond. Scott’s Addition is one of the fastest-growing neighborhoods in town. And, for us, we were drawn to it for all of those things that I’ve mentioned previously. We have an MSA with a growing population, growing wages, but more demand for housing than there is supply. We liked that equation, and we studied the econometric reports specifically in Scott’s Addition. You can really see that through the projected occupancy and rent growth over the next 10 years. And so we love that. There’s just more demand than there is supply.
If you look at a market like Raleigh, it’s a market that we’ve been really bullish on since my time at Capitol Square. I think it’s widely known all the great things going on in Raleigh, Apple’s version of HQ2, all of the tech investment, healthcare investment. There’s a ton going on in Raleigh, and the population growth is absolutely phenomenal. And we’ve been trying to buy there for our Delaware statutory and non-traded REIT platforms to find stabilized apartment assets, but the cap rates for us have been too tightened. The investments, you know, it didn’t make sense. The yields didn’t work for our investor base, but we’ve been really focused on it and studying Raleigh for these last few years. So we’re able to leverage that experience to then go and do development, understanding that, “Hey, our entry cap or the cap rate that we’re building to has really healthy spread relative to where we would be buying a class A asset today.” And so kind of looking through that lens and saying, “Hey, development is gonna make a lot of sense here because we can’t buy for our stabilized income-producing business.”
We then started to focus on, where are the drivers and Raleigh? Obviously, it’s the employers, there’s a vibrant downtown, the Red Hat Amphitheater, the convention center. And we were able to identify an opportunity zone that’s actually kind of catty-cornered, I would say, to that Red Hat Amphitheater, that’s how I would describe it. You’re a stone’s throw from the convention center, and you’re really close to downtown and all that employer base. And so we had this kind of general macro focus on Raleigh, and the opportunity zones and development affords us the ability to kind of leverage our expertise and all the time and energy and effort we’ve spent over these last few years, working on the other side of our business to then deliver to our investors a really good buy at an attractive basis that we’re really excited about.
James: Yeah, I’m actually sitting in Raleigh today, Jimmy. So it’s kind of interesting. We’re doing some work here on this project, but to Whit’s point, you know, it’s an incredible market. It’s just not been viable from an investment perspective for our investor base on the stabilized side. So it’s wonderful that the development really can provide that great value and is way more attractive for the investors. And then on top of it, obviously, Whit and his team just focused, really tied into opportunity zones that could benefit the investors from the tax side of it as well. So, a great, kind of, long view that ended up with a really successful opportunity and to be able to bring them to market.
Jimmy: No, that’s great. That makes sense. And for any investors listening, what can you tell us, specifically, about your…I guess, both of your closed opportunity zone funds from the past and your current open offerings? And I understand you may not be able to get into much detail regarding specific returns or anything like that, but anything that you can tell me and my listeners, many of whom may be potential investors, what can you share with them about some of these deals you have?
James: Sure. Hey, Whit, do you wanna start with the Richmond projects and just kind of give an update and, you know, where we’ve kind of gone? And then I’ll close it out. And I’ll be happy to share with you what we’ve got on the plate right now and the projects we have available.
Whit: Yeah, sure. I’d be happy to. So we have our first three opportunity zone funds. Again, they’re single asset funds, so each fund is building one specific project. We liked that model because there’s all sorts of tests associated with the opportunity zone and make sure that you qualify and continue to qualify. And we liked the ease of use and being able to show a clear path to construction, delivery, refinance, sale, etc. The first three, we call them Scott’s collection. They’re all in the Scott’s Addition neighborhood. We are delivering the first units on our first deal in December. And so we’ll begin taking occupancy the end of December, first part of January.
So we’re really excited about that. All these offerings across the first three are closed. And then we’ll start delivering units next year for Scott’s 2, and then a little bit behind that in Scott’s 3. And then our, what we call OZ fund 5 is a joint venture with Greystar. Greystar is one of the largest property developers in the world. And we’re building 350 units in Scott’s Addition. That offering is currently closed and fully raised, and we’re in the middle of construction right now. And we’ll be delivering units at the end of next year, and so the end of ’22.
James: Yeah. And with the topping office coming up for us, that’s fund five, right? With Greystar.
Whit: It is. Yeah. Next week.
James: Yeah. Excited about it. So Jimmy, I’ll give Whit a little bit more credit than he’s willing to take here on this, but we were arguably one of the only firms breaking ground in the heart of the pandemic on opportunity zone projects. So thank you to anybody listening who invested in it. I mean, it’s really appreciated, but obviously, it was also getting it done and putting the projects together, but then also getting them out of the ground. So thrilled to be kind of on the front edge of actually what the opportunity zones were intended to do, create and provide housing in these communities and deliver it in a pretty quick way. The ones that we are working on now and have open opportunity zone fund 4, single asset funds, again, as Whit said, this is a apartment project on King Street in Charleston, South Carolina. Market we know very well. Again, has been on our radar for years from the stabilized, the DST side, and a market that this was a project that we were able to do a joint venture with a firm called Method Company on a really interesting concept, right in the heart of King Street. We’re finishing the raise on that.
Currently, we’ve got about $4 million left of, kind of, a 50-door boutique apartment hotel at King Street is the main thoroughfare of the main street of the Peninsula of Charleston, is upper King Street where this is located, has generally been the side in King Street that was under-capitalized and was designated as the opportunity zone. One of the legislators who helped create the opportunity zone, Tim Scott, is a South Carolina senator. So, it’s nice to have a project in one of the creators of…one of the legislators who helped pass the opportunity zones, it’s nice to have a project there, but it’s an incredible opportunity. And we’re thrilled to be almost done with the raise, and we’ll break ground in early Q1 next year on that project. Delivery is about 18 months schedule on construction, and then it will be out in the market with our refinance option sometime around…looking at the end of 2024.
One other thing, just to mention on our single asset, Whit brought this up, we love the clear visibility of single asset. People can really take a look at what we’re doing. See clear line of sight of how we’re underwriting construction costs as well as a potential return profile. One thing we do also is have a cash-out refinance at stabilization. So, ideally, cashing out and refinancing, providing both distributions on a quarterly basis, but a nice cash-out refinance that provides capital for investors to be able to pay their tax bill that is due in 2026 on the deferral. So just a feature we do on all of our funds. That’s why we like the single asset fund.
The other project, why I’m here in Raleigh, is our ozone fund six. Whit highlighted a little bit of this. It’s right at the edge in the heart of the Warehouse District, but right at the edge of downtown Raleigh, overlooks the convention center. It has been kind of the side…this Warehouse side of Raleigh has been undercapitalized for years. There’s been some movements, some capital that’s been being put into the market. And now with the opportunity zone, it’s an excellent opportunity for us to build a great project, a 20-story residential tower, 297 units, and really going to help change the skyline of Raleigh a little bit and provide really great housing solutions for people who are working, live, play in this area.
So thrilled to have that at the $48 million raise, we will go and start construction April 30th of next year. It is fully entitled, and we’re in the final… We started fundraising, really, in September and have been very successful thus far with about $20 million raised on that. So about $28 million left to raise on that. And, you know, at $100,000 minimums, that’s what we provide for our investors, really gives pretty much anybody the opportunity who are looking at opportunity zones to be able to invest in some great projects.
That’s where we stand today. We’ve got a couple more coming. I just wanna remind everybody, opportunity zones don’t sunset for decades. So opportunity zone investments, specifically for us real estate developers, will likely always be a part of what we do, with some great tax advantages, not just tied to the specific advantages of this year.
Jimmy: Yeah. Thank you for that, James. It’s important to note that the benefit does not expire at the end of 2021. It still goes for several more years beyond that. The only thing that goes away at the end of 2021 is that 10% basis step-up that can reduce the amount of gain that you recognize on the gain that you end up rolling over into a qualified opportunity fund. That’s a good distinction to make there because, obviously, you guys have a lot of experience in the opportunity zone space, but you also have a lot of experience in the 1031 DST space as well. You’re one of the largest DST sponsors in the United States. So I wanted to pick your brain on some of the differences between DSTs and OZS, and specifically for a high net worth accredited investor, someone listening who’s interested in tax mitigated real estate investing strategies. When should that type of investor consider Delaware Statutory Trust, DST-type investment versus an opportunity zone investment?
James: You know, real estate gain and 1031 exchange, there’s really nothing else like it in the tax code. It provides, if you do it correctly, the opportunity to have tax deferral, really unlike anything else. So people selling real estate, and if they’re at all interested in tax deferrals, should absolutely pay very close attention and take a look at 1031 exchanges. A little self-serving because that is a big focus of our business, but the reality is that it also, just from a pure long view about tax deferral and efficiency associated with selling real estate for a gain, 1031 beats an opportunity zone from tax efficiency. What we generally see from these high-net-worth investors who asked this question, we look at gains and a lot of our investment into opportunity zones are gained from other assets. So gains that don’t benefit from the opportunity to have a 1031 exchange or some other tax deferral.
So a lot of gains of sales of business, a lot of gains of traditional stock, Bitcoin, you know, really any of the other gains that are available to these high-net-worth investors, that’s where a lot of the opportunities that money is coming from. That said, we’ve seen more and more people look at gains in real estate and decide to not do a 1031 exchange and to take advantage of the opportunity zone. As we pointed out, what that means is they still will pay tax. They won’t defer that tax. They will pay tax, obviously, on the deferred amount until 2026, but a 1031, obviously, if it’s facilitated correctly, you can defer your tax for really an unlimited amount of time.
So they’re making that decision. They’re realizing, “Hey, I’m gonna pay a deferred tax in 2026, even though I sold real estate.” But what they’re doing is they’re mainly looking at the actual real estate investment opportunity, right? So they look at our developments, they look at our projects, and they say, “Wow, you know, I am willing to defer my tax and pay it, but I want to take part in the overall long-term tax benefits of the opportunity zone, but, really, I like the real estate. I like the project that they’re putting together. I like everything associated with that investment.” And that’s where we see people taking real estate gains.
It’s really a great question. We get it all the time, but I do wanna highlight tax deferral relief, if done correctly, and, definitely, from 1031 only available to real estate gains. And then really any gains should be looked at for opportunity zones, inclusive of people looking at the real estate for opportunities. Whit, you got anything you want to add there? I mean, that’s pretty much where it kind of comes down to for most of our investors.
Whit: Yeah. I think it’s a great summary. And for real estate gains, you have some folks like the1031, and some folks are looking for the extra juice that you get from a development, or,
Jimmy: Oh, I think that’s great. I think that’s a great explainer. Makes perfect sense to me. I hope that’s helpful to anyone who may have had that question. We mentioned a while ago that opportunity zones are going to be around for many years to come, at least through the end of 2026, with the possibility of being able to invest in a qualified opportunity fund through much of 2027, still. And, it’s only set to expire if it doesn’t potentially get extended by Congress at some point, and we’re fingers crossed that it will, at some point, but at the very least, you’ll still have until part of 2027 to invest in funds. So with a few years left in the…or I should say several years left in the program, what do you think the future of opportunity zones will be like? Any predictions?
James: I can go on the capital side. I think the notoriety, even this podcast, what you’re doing, Jimmy, in getting that notoriety of what opportunity zones really are, the benefits, and then, you know, great programs coming out, I think we’re gonna see a continued acceleration from the investor base as to, you know, “Maybe I need to look at this,” right? And that visibility will likely then just keep that capital investment going to the under-capitalized communities for quite a while, and really achieving the goals of the overall legislation. So, I see that accelerating over the next couple of years. Whit, maybe real estate side. I’ll let him answer on that.
Whit: Yeah. I think we’ll continue to see investments into opportunity zones that have already seen a significant amount of investment. So I think neighborhoods like Scott’s Addition where we’ve been very active will continue to grow, but I also think, over this next couple of years as the first OZ investments, we start returning capital through refinances and lease-up and start proving out the concepts, I think we will start seeing some of the really, truly more underserved OZ designations or areas. I think we’ll start seeing investment there as well.
Jimmy: That’s great. Well, I hope you’re right. I predict much the same. It’s been a pleasure speaking with both of you today. I think we’re gonna wrap up here shortly, but before we go, where can our listeners go to learn more about the two of you and Capital Square?
James: Absolutely, capitolsquare1031.com, you know, the roots of our company. But that’s our website, capitalsquare1031.com, on there. We have all of our projects that we have, both opportunity zone, as well as 1031 exchange, a lot of history about us as a company. Our entire portfolio is listed there as well. All of our offerings have my direct cell phone number, Louis Rogers, our founder, owner, CEO, his direct cell phone number. And in all of the development and real estate stuff you see with cell phone numbers as well. My email as well, but yeah, my phone number, 202-615-0442. Anybody can call me, and we’ve got a great form on our website. So as you’re perusing what we have, the pictures, the plans, the construction cameras, which is actually really cool. We have nice time-lapse construction cameras on our website. There’s also a great form of contact information for anybody at the company. Team members follow up within 24 hours or less. So feel free, anybody, to reach out directly to us.
Jimmy: That’s fantastic. Well, you guys don’t hide. You make it easy to find all of you, and I’ll be sure to link to all of your websites and phone numbers and email addresses on the show notes page. For our listeners out there, as always, they will have show notes for today’s episode on the opportunity zones database website, and you can find those show notes at opportunitydb.com/podcast. And there you’ll find links and phone numbers to all of the resources that Whit, James, and I discussed on today’s show. Whit and James, it’s been a pleasure. Thanks for joining me.
James: Thanks again, Jimmy.