How Local weather is Exploding Insurance coverage, Constructing, and Investing Prices

Dave:
Hey everybody. Welcome to the BiggerPockets Actual Property Present and this episode of Greater Information. I’m going to be your host at the moment, Dave Meyer. And at the moment we’re going to be speaking to Natalie Ambrosio Preudhomme, who’s a industrial actual property skilled at Moody’s Analytics and she or he’s an Affiliate Director of Analysis there and she or he focuses particularly on local weather. And we wished to carry on Natalie at the moment to this present as a result of local weather has been impacting actual property buyers ceaselessly, however significantly during the last couple of years. I don’t know if you happen to all have heard, however I’ve been speaking to mates in California and in Florida and insurance coverage prices are going by way of the roof. Some insurance coverage firms are simply leaving these states altogether. I’ve personally been coping with this lots in Colorado the place there are wildfires. It’s been actually tough to even get insurance coverage. So we’re going to carry on Natalie at the moment to share some information and knowledge with us all that may assist you to make extra knowledgeable selections as an investor.
And I discussed earlier that Natalie is an skilled in industrial actual property, and I feel that’s vital to notice as a result of the sort of information about which locations may see floods or which locations are going to see insurance coverage premiums enhance probably the most are issues that the large institutional buyers like BlackRock and a few large industrial REITs, they’re all this information. And so I feel for us as smaller, I’m simply generalizing, most people take heed to this present are residential buyers. And I feel the individuals who take heed to the present, irrespective of how large or small you might be as an investor, you ought to be this information that can assist you make selections. One about the price profit evaluation of any threat mitigation methods you may wish to implement. Or two, assist you to determine the place you wish to be investing. So with that stated, let’s carry on Natalie Ambrosio Preudhomme from Moody’s Analytics. Natalie, welcome to the present. Thanks for being right here.

Natalie:
Thanks a lot for having me.

Dave:
May you begin by telling us a bit of bit about what you do at Moody’s Analytics?

Natalie:
So I’m on our economics and thought management workforce inside our industrial actual property a part of the enterprise. And so I focus particularly on local weather change. And so I do analysis and market outreach, actually connecting the dots on local weather threat and conventional industrial actual property metrics that our institutional buyers and lenders care about.

Dave:
And why do industrial actual property buyers care about local weather and local weather threat?

Natalie:
So there’s quite a lot of methods that is actually beginning to unfold that I can dive into, however on the basis, there’s each bodily local weather dangers and transition dangers, that are each beginning to have monetary implications. And so simply actually rapidly, I’ll outline each of these after which we will dive in. However bodily dangers are issues like acute, extreme climate occasions like wildfires, floods, particular person warmth waves. After which there’s additionally continual stresses which might be unfolding over an extended timeframe reminiscent of sea stage rise or water stress and drought. So these are our bodily local weather dangers which might be threatening actual property belongings. After which this transition dangers, that is the bucket of dangers that we face from the transition to a low carbon economic system. And so this may take a couple of completely different shapes. It contains rules round emissions reductions in addition to shifting know-how after which additionally shifting client preferences and calls for.

Dave:
Okay. Nice. In order that’s actually useful in understanding these two various things that you just research. And are you saying that each these bodily and transitionary dangers have monetary implications for industrial actual property buyers?

Natalie:
Sure, precisely. And so there’s completely different ways in which that is made manifest, however beginning on the bodily threat aspect, there’s the apparent impacts of if an asset itself is hit by a flood or a wildfire, then there’s after all misplaced income throughout the enterprise disruption. There’s growing working prices as a result of restore and upkeep and all of that. After which there’s additionally some much less apparent rippling oblique impacts. So even when the asset itself isn’t hit, however there’s a hurricane or storm within the area, so transit infrastructure is down or flooded, staff can’t get to work or provide chains are disrupted. And there’s situations of this taking place the place a producing facility itself wasn’t broken, however the staff couldn’t get to work after a storm. So it had halt its operations for a few days, which after all results in disrupted income. And in order that’s a couple of of the ways in which bodily dangers have an effect on actual property.
There’s additionally these broader methods reminiscent of by way of growing insurance coverage prices, which actually has broader implications at a market stage in addition to for asset worth. After which simply briefly on the transition threat aspect, we’re seeing a rolling out of what’s referred to as Constructing Efficiency Requirements. They take completely different shapes, however they’re sometimes on the metropolis or state stage and so they put restrictions on the quantity of emissions from a constructing or the vitality use of buildings. And there’s fines related to going over these emissions. And so, once more, that is altering the calculus the place it’s not, “Yeah, it’d perhaps be good to have a inexperienced constructing.” However now it’s like, “Oh, we’re going to get fined if we now have emissions over a sure stage.” So that is actually a monetary dialog.

Dave:
I feel there’s lots to unpack right here. However earlier than we soar into it, I simply wish to ask who’s this information at the moment? As a result of we’re speaking about industrial actual property and that’s your specialty, however are the teachings and insights that you just uncover in your work additionally relevant to residential buyers and a few of the smaller forms of buyers that make up most of our viewers?

Natalie:
Yeah, completely. And I feel a few of the examples we’ll talk about at the moment, it’s fairly straightforward to see that they’re widespread throughout a bodily asset actual property. And I’ve prior to now achieved analysis on the local weather impacts throughout completely different asset lessons. So all that to say that sure, if anybody is invested in a bodily asset on the bottom someplace, then that’s in danger from quite a lot of these items we’re speaking about.

Dave:
Okay, nice. So I simply need everybody listening to know that although a few of the examples we would discuss are about industrial actual property and maybe bigger belongings, that quite a lot of what we’re speaking about could also be relevant to even smaller belongings or the issues that you just put money into. Now, let’s discuss a bit of bit in regards to the bodily threat. As an actual property investor, there’s at all times bodily threat, so there’s at all times been threat of fireside, of flooding. Are you able to inform us what has modified just lately and the dimensions of that change?

Natalie:
Yeah. So there’s a couple of various things to unpack right here. I’ll put a pin in insurance coverage as a result of that’s an enormous factor to unpack. However taking a step again, such as you stated, there’s at all times been, for millennium individuals have considered floods taking place subsequent to rivers and we’ve at all times been creating with this in thoughts. The large shift in our mindset now’s that it’s actually evident that the previous is not an correct illustration of what the longer term goes to carry. So it’s not a dependable indicator to say, “Nicely, this asset flooded as soon as within the final 100 years, so we needs to be fairly protected with that in thoughts going ahead.” The rise in world atmospheric temperatures is having a rippling impact there on native circumstances and it’s doing that in a means that’s actually altering the frequency and severity of those occasions like storms and floods and excessive temperature occasions.

Dave:
And is that occuring universally throughout the nation or is it positioned extra in sure areas?

Natalie:
It’s a world phenomenon, this local weather change pattern, nonetheless, the way in which that it impacts circumstances varies domestically. And so we do work at Moody’s, we at Moody’s acquired RMS, the disaster modeling agency and another local weather threat suppliers. And so we actually leverage an array of information units together with a worldwide local weather fashions and extra native hydrological fashions and issues like that that actually attempt to assist wrap our heads round and talk to the market round what the altering circumstances are like at a really particular location.

Dave:
And so sure areas might have a significant enhance in threat and others could also be much less so, right?

Natalie:
I at all times get the query, “Okay, you research this, the place ought to I transfer?” And I sometimes say that sure, there are some areas that are usually much less uncovered, a minimum of to the hazards that we now have a visceral response to love hurricanes or wildfires. There are areas, so the Higher Midwest or the Pacific Northwest. There’s some wildfires within the Pacific Northwest, however these areas are usually much less uncovered to those visceral hazards. Nonetheless, my first reply is often, it’s extra about selecting your local weather hazard as a result of it might be very arduous to discover a place that’s not uncovered to any of those altering circumstances. So yeah, you may be buying and selling extra intense precipitation for wildfires or issues like that. So it’s actually a matter of selecting which one you wish to put together to take care of and construct resilience to, if that is sensible.

Dave:
It does. So wouldn’t it be truthful to say as an investor, your method needs to be simply to try to perceive the dangers as greatest as doable as a result of then you’ll be able to mitigate them?

Natalie:
Precisely. Yeah. Step one is de facto fascinated by forward-looking, leveraging forward-looking information that reveals you ways your belongings are going to be uncovered to those altering circumstances. After which precisely determining what to do about that threat.

Dave:
So now that we perceive why this local weather information issues for buyers, we’re going to get into at the beginning, how one can entry this data and boil it all the way down to numbers that apply to your actual property selections. We’ll additionally discuss a few of Natalie’s steerage on navigate the more and more difficult insurance coverage panorama. And we’ll discuss what sensible buyers can do to remain resilient after the break.
Welcome again everybody. I’m right here with Natalie Ambrosio Preudhomme, an Affiliate Director of Analysis at Moody’s Analytics. And proper now she’s strolling us by way of her newest analysis on local weather and the way it impacts investing selections. So how may a small or medium-sized actual property investor begin to perceive a few of this information and the way it may influence their portfolio?

Natalie:
Now we have instruments and there’s different instruments on the market the place, and simply utilizing ours for example, you’ll be able to put in an handle or add a portfolio of dozens or 1000’s of addresses and obtain again data on that publicity. And there’s two elements to that in our information. There’s the publicity layer which reveals you based mostly on its location and the broader space, how an asset is uncovered to those altering circumstances we’ve been speaking about. After which there’s an influence layer which reveals the estimated common annual harm that that asset will face from a selected hazard.
So yeah, they will leverage instruments and actually wrap their head round, okay, what’s my asset uncovered to? After which additionally what’s the monetary implication of that? And actually having that greenback estimate can then inform very strategic selections on the investing in resilience or asset stage threat mitigation. As a result of one can take a look at how a lot the chance mitigation prices and take into consideration the estimated common annual harm and multiply that out over both the maintain interval of the asset or the life expectancy of no matter threat mitigation you’re speaking about and do some calculations to determine one of the best steps.

Dave:
Wow, very cool. So are you able to assist us perhaps contextualize this with an instance? So perhaps in case you have one other instance, go forward. However I’ve a property I personal. It’s within the mountains in Colorado, wildfire territory. So how may I take advantage of your instrument or the information that’s on the market to higher place my property as an funding?

Natalie:
You can begin by, precisely, utilizing some type of information to grasp the altering circumstances at that property. And so wildfire, there’s plenty of completely different elements that contribute to wildfire threat at an asset. There’s altering moisture deficit or altering precipitation patterns in addition to long-term drought patterns. After which that mixes together with your burnable vegetation that’s within the surrounding space. And so understanding these metrics. And once more, there’s information units that mix all of that right into a quantity that reveals you your relative threat based mostly on these metrics. After which actually understanding your property too. And so if there’s defensible house round that property, in order that’s when there’s room between the constructing itself and any vegetation. Or if there’s outbuildings or various things on the property, ensuring these are unfold aside. In order that’s step one is simply understanding the state of affairs across the publicity to those bodily phenomenon after which additionally what’s taking place at your asset.
After which the second step is considering by way of, okay, so if I’m in a spot that actually is uncovered to this phenomenon that’s going to make wildfires, how can I implement threat mitigation measures? And that’s why it’s simply vital to grasp, like we began with, to grasp which threat your asset is uncovered to as a result of it may be overwhelming considering, I want to organize for every part local weather change has in retailer. However having the ability to prioritize based mostly on what you’re uncovered to then actually helps slim into, okay, what threat mitigation measures are there? And I can transfer ahead with these.

Dave:
That is tremendous vital as a result of as buyers, a lot of our resolution making comes all the way down to basically a value profit evaluation. And once I hear about local weather dangers, and let’s simply use this instance of my property, it may be arduous to understand how a lot cash to spend on mitigation and the way a lot threat you’re at. As a result of my HOA within the space does an important job, they provide these defensible house, which if you happen to don’t know, it’s mainly eradicating vegetation close to the home in order that there’s no bushes actually near the home that may catch after which mild the home on fireplace. However clearly that prices cash. And so it’s arduous to know, is it price it? Am I actually in danger? So it appears like whether or not it’s wildfires, floods or every other local weather threat, there’s now growing quantities of information that may assist us as buyers determine what mitigation method is price it and goes to be a constructive resolution for me over the lifetime of me proudly owning a specific asset.

Natalie:
Precisely. Yeah. Having this information that reveals the financials in danger, the price of this potential harm actually helps drive that resilience dialog in a means that’s been a bit difficult prior to now.

Dave:
And do you could have any sense of, that is in all probability too broad of a query, however I’ll see in case you have any guidelines of thumb. However is there any information you’ve seen that reveals how far more capital expenditures that individuals have to put into their properties with the intention to correctly mitigate in opposition to a few of these dangers?

Natalie:
So I feel that may be very context particular. And one other vital half and a difficult a part of this resilience dialog is that it’s very location particular. Once more, all the way down to not simply the traits of your constructing, but additionally who’s utilizing the constructing? What are the actions taking place inside that constructing? All of that influences issues like vitality demand or provide chain concerns, and people are key ways in which the prices of local weather change translate into monetary prices. And so I don’t have a quantity like that off the highest of my head as a result of it’s very particular based mostly on all of those native elements.

Dave:
Yeah, that is sensible. All proper. Nicely, I feel hopefully as a few of these information units get constructed out much more, you can begin to a minimum of comp some properties and see what prices what. Now, you talked about a very vital matter for actual property buyers, which is the price of insurance coverage. Are you able to simply discuss usually about insurance coverage firms, are they trying on the similar information? Is that this what they’re ? And is that this partially fueling why we’re seeing premiums go up a lot?

Natalie:
Yeah. So we’ve been doing quite a lot of work to wrap our heads across the insurance coverage panorama. We, just like you I’m positive, are actually seeing this have a tangible influence on CRE transactions. The place lenders are discovering that their debtors are struggling to realize the required insurance coverage necessities with out having premiums that truly current a cashflow threat. So insurers have been pulling out of excessive threat areas. A few of those who have pulled out of California or stopped writing new insurance policies did in actual fact cite growing hazards as one of many causes. And so sure, to reply your query, we’re seeing that that is behind the altering circumstances. We’ve been doing a little analysis on this that I can dive into if that’s of curiosity?

Dave:
Yeah, I’m tremendous as a result of it makes me actually marvel about the way forward for insurance coverage for owners or buyers in these markets. In California, we’re simply seeing fewer suppliers. Identical factor is occurring in Florida. I do know in Colorado there’s sure areas the place it’s very tough to get a coverage, even when it’s for only a single household residence, only a place to reside. And so it’s complicated about how this may actually influence the long-term housing market and doubtlessly, to not be overly dramatic, however I suppose if there’s no insurance coverage, it may actually influence the place individuals select to reside.

Natalie:
Oh yeah, completely. And I feel that’s taking place to some extent now. Undoubtedly not being dramatic. It’s being very practical about what’s happening. So yeah, there’s quite a lot of items to dive in right here. And so simply to maintain setting the scene, I suppose, a tiny bit round what we’re seeing. So final summer time or early fall, we did some analysis on simply attempting to grasp the panorama of accelerating insurance coverage premiums. And so we regarded on the insurance coverage line merchandise and working value information that we had on CMBS properties, industrial mortgage-backed securities. And we did this throughout our 5 key property forms of multifamily, retail, industrial workplace and lodge. And we discovered that there wasn’t a transparent geographic pattern when it comes to markets that noticed growing insurance coverage premiums. They had been actually scattered throughout the nation. However we noticed that almost all of properties throughout the nation had been seeing compound common annual progress charges of over 5% for insurance coverage. And there have been a big share that had been over 10% of these CAGRs within the final 5 years. And that was the timeframe we checked out.
And so all that to say that it is a substantial situation that’s actually scattered throughout the nation. And in order that’s simply laying the scene a tiny bit. And then you definitely had been asking round what’s going to occur and what the insurers are when it comes to information and their reactions. And so it’s actually a multifaceted problem and query as a result of the insurance coverage trade can also be, A, fragmented throughout the completely different states. And so the markets operate pretty otherwise relying on the state that you just’re speaking about. And so they’re additionally, after all, extremely regulated. And so relying on the state and the hazard that you just’re speaking about, there’s even been challenges in making it doable for insurers to leverage forward-looking information to set their premiums. So in California, insurers weren’t traditionally allowed to make use of forward-looking fashions to find out their wildfire premiums.

Dave:
Actually?

Natalie:
And in order that presents vital challenges. And so there’s quite a lot of dialog, dialogue, taking place proper now between policymakers and the insurance coverage trade and owners or debtors and scientists even. Actually attempting to determine subsequent steps for this and considering round altering a few of these rules and simply fascinated by alternative ways to actually fight this query of, “Nicely, some areas are simply going to maintain getting hit and so are we going to maintain creating there?” One thing wants to provide. I feel the trade has reached some extent the place it’s clear that one thing wants to provide and now we’re working to establish the way in which ahead.

Dave:
Acquired it. Thanks. Yeah, I feel for everybody listening, that is one thing actually vital to observe as a result of it actually does have an effect. I’ve a good friend who’s a giant actual property investor in Florida and informed me he’s planning to promote most of his properties as a result of although he had good money flowing offers, the rise in insurance coverage premiums has actually broken his enterprise and there’s no finish in sight essentially. Hopefully issues begin to decelerate. However he informed me on a sure property, it greater than doubled, he had one that nearly tripled in a single yr. And so it makes it actually tough to foretell, simply very tough to know one of many main bills in what you are promoting. Now to this point, this has largely been the large excessive profile ones, simply so everybody is aware of, have been in California and in Florida.
However I think about in Colorado, I do know there’s wildfire threat. Quite a lot of the west, there’s wildfire threat. So I’m curious to see if this continues. So one thing that we’ll must regulate over the following couple of years. All proper. So now we’re actually within the thick of it and we’re about to take one other fast break, however after we come again, Natalie’s going to inform us about what she expects to see when it comes to new constructing requirements and the way this suits into the larger image of housing provide and affordability. So stick round.
Welcome again. Natalie Ambrosio Preudhomme and I are speaking about traits in main climate occasions and what the newest analysis means for buyers. Let’s choose up the place we left off. Now, Natalie, I wish to swap to one thing you talked about earlier, which is about constructing and constructing requirements. So that you stated Constructing Efficiency Requirements are altering. And I’ve quite a lot of questions on that. However are you able to simply give us a bit of background context on that and the way constructing requirements are altering?

Natalie:
The Constructing Efficiency Commonplace particularly is referring to buildings’ local weather operations or emissions. So particularly these are associated to emissions reductions at buildings or lowering vitality use at buildings. They take completely different varieties whether or not they’re truly assessing the emissions or the vitality use, however the finish objective actually is to cut back the emissions of buildings.

Dave:
Are these at a federal stage, state stage or how are they applied?

Natalie:
So within the US, they’re rolling out in a reasonably fragmented means. By way of how they’re rolling out to this point, there’s what’s referred to as the Nationwide Constructing Efficiency Requirements Coalition and that’s a bunch of state and native governments which have dedicated to publishing Constructing Efficiency Requirements by Earth Day this yr, so in April of this yr. After which there’s a second cohort who’ve dedicated to it by 2026. And this isn’t to say that there aren’t any printed already, there are a handful of cities across the nation and some states who do have already got Constructing Efficiency Requirements. And so all that to say it’s rolling out in a really fragmented means, however we do anticipate to see an acceleration of this rollout within the subsequent couple of years.

Dave:
And what’s the goal of most of those applications?

Natalie:
The basis goal is to cut back emissions from the constructing inventory. Buildings’ emissions are chargeable for a big share of cities’ emissions. And so these are feeding into their broader local weather commitments that many cities have made. However yeah, it’s actually targeted on the constructing itself and lowering emissions.

Dave:
From the little I learn about setting up massive initiatives, I’m a extra small-time investor right here, once I hear about these constructing requirements, it strikes me that adhering by them may be a costlier type of building. If it’s simply even a extra vitality environment friendly equipment, it often is costlier.

Natalie:
Sure.

Dave:
Or I don’t know, energy-efficient home windows are costlier or HVAC methods.

Natalie:
Completely.

Dave:
So my query is, is the overall building value going to be greater for all these buildings?

Natalie:
Completely. And we’re considering of it lots as a result of quite a lot of these apply to present buildings. There’s quite a lot of dialog across the retrofit prices to then adjust to these legal guidelines to keep away from the fines. And that’s one thing that we’re intently and that’s what our shoppers are asking. “Is it higher to only pay the nice or to really retrofit?” And so we had been speaking about value profit evaluation on the bodily threat aspect, and that is value profit evaluation on the transition threat aspect. I’ll say there’s quite a lot of alternative on this house to have a look at all of those numbers after which transfer ahead strategically. And so issues like changing your numerous home equipment on the finish of their helpful life. And simply when it’s time to switch them, changing them with energy-efficient variations.
And that’s only one instance, however there’s methods to actually plan this out in a strategic means that makes one of the best use of the prices and the advantages. One different factor I’ll say on this when it comes to building additionally. There was simply an instance that I used to be writing about in Boston. They did embrace numbers that confirmed how far more costly it tends to be to develop the sort of very extremely energy-efficient constructing, however then additionally the truth that it makes use of a lot much less vitality that these prices will definitely be recouped within the lifespan or earlier than the lifespan of that constructing. So the financial savings had been vital even in mild of the elevated value of building.

Dave:
Attention-grabbing. Yeah, as a result of I feel one factor that I take into consideration rather a lot is that there’s a scarcity of housing in the USA and there’s after all this effort to cut back emissions or enhance the resilience of buildings. But when that makes it much more costly, it’s already very costly to construct, if it makes it much more costly, is that going to dissuade individuals, builders from creating and simply additional exacerbate the housing affordability issues that we now have proper now?

Natalie:
Two issues I’ll point out there. One, and this will get again a bit to resilience, the place it’s an funding up entrance, however that the financial savings are substantial. And the interfacing of each the sustainability or transition threat aspect and the resilience aspect. Issues like lowering vitality demand and issues like that. Sure, they cut back emissions, they’re sustainable, however in addition they put together for growing heatwaves and surging prices we’ve seen in vitality demand by way of the summer time. And issues like inexpensive housing or simply any housing, it’s significantly vital to make sure that the asset is resilient and that those that are utilizing the asset will probably be protected and have the ability to operate throughout these excessive occasions. Like energy outages. Sure, they create a considerable industrial disruption, however in addition they are a human well being and security concern.

Dave:
I agree and see the long-term worth of constructing extra resilient, extra vitality environment friendly buildings. I feel what hangs me up typically is simply the main points of how the trade works. The place what may occur is the builders who tackle probably the most threat will face elevated building prices whereas the eventual house owners and operators of the constructing or the tenants of the constructing are those to benefit from the profit. And in order that’s what worries me is that there’s not an incentive for builders to construct if it’s simply costlier for them solely to save lots of different individuals cash. Does that make sense?

Natalie:
Yeah. So a couple of issues on that. We’re seeing with this growing demand, so tenants are growing their demand for greener, extra resilient buildings. Once more, massive companies are making local weather commitments and the necessity to have their workplaces or their amenities in buildings that permit them to conform and meet their commitments. And so with this growing demand, there’s already some analysis that reveals the greenium or the truth that of us are prepared to pay extra for these inexperienced buildings. And we anticipate extra analysis to be popping out on that as an increasing number of of us actually give attention to this situation. In order that’s one, only a comparatively easy proven fact that more and more they’ll have the ability to promote or a minimum of the greener buildings for greater costs. And once more, this has already proven to be the case.
The opposite factor I’ll point out too is that this inexperienced financing. And so there are a number of incentives from the Inflation Discount Act. There’s additionally numerous rebates and utility incentives. After which there’s additionally issues like PACE, Property Assessed Clear Power, which is one other factor that’s rolled out on the state stage. And so it’s solely approved in sure states. However that’s a selected financing mechanism for inexperienced properties that permits for the financing to be obtained upfront with none fee. After which it’s tacked on to the property taxes of the property, basically. And that’s the way it’s repaid. And so there’s a selection, it’s a fraction in house that must be a bit of bit higher understood frankly and fleshed out, with the assets, attending to the correct individuals. However inexperienced financing for buildings is an area that may assist with this as properly.

Dave:
Nicely, Natalie, thanks a lot for sharing your analysis and information with us. Earlier than we go, is there the rest that you just suppose our viewers ought to know out of your current work?

Natalie:
Yeah. Thanks a lot for the dialog. I’ll simply actually underscore that we’re working arduous to attach this publicity to local weather hazards with the monetary implications. Actually doing work that demonstrates the influence on issues like emptiness price, asking rents, working prices after which web working revenue. And so I’d say it is a actually thrilling and vital house to maintain watching and being attentive to, and it’s solely going to turn out to be extra vital within the coming years. So yeah, thanks a lot for having the dialog with me.

Dave:
Completely. And if you wish to study extra about Natalie and her workforce’s work, be sure to take a look at our present notes, which yow will discover beneath, which we’ll hyperlink to all of the analysis and report and nice work that she’s doing. Natalie, thanks once more for becoming a member of us.

Natalie:
Thanks.