Q4 2023 CTO Realty Growth Inc Earnings Call
Participants
Matthew Partridge; SVP, CFO & Treasurer; CTO Realty Growth Inc.
John Albright; President & CEO; CTO Realty Growth Inc.
Floris Djikum; Analyst; Compass Point
Rob Stevenson; Analyst; Janney Montgomery Scott
Matthew Erdner; Analyst; Jones Trading
John Massocca; Analyst; B. Riley Securities
RJ Milligan; Analyst; Raymond James
Mike Gorman; Analyst; BTIG
Presentation
Operator
Good day and thank you for standing by, and welcome to the CTO Realty Growth Fourth Quarter 2023 earnings call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session to ask a question.
(Operator Instructions) Again, please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Matthew Partridge, Chief Financial. Please go ahead.
Matthew Partridge
Good morning, everyone. Thank you for joining us for the CTO Realty Growth Fourth Quarter and Full Year 2023 operation results conference call. With me today is our CEO and President, John Albright.
Before we begin, I'd like to remind everyone that many of our comments today are considered forward-looking statements under federal securities law. The Company's actual future results may differ significantly from the matters discussed in these forward-looking statements, and we undertake no duty to update these statements.
Factors and risks that could cause actual results to differ materially from expectations are disclosed from time to time in greater detail in the Company's Form 10-K Form 10-Q and other SEC filings. You can find our SEC reports, earnings release, quarterly supplemental and most recent investor presentation on our website at CTRE. dot com. With that I'll now turn the call over to John.
John Albright
Thanks, Matt, and good morning, everyone. We had a terrific fourth quarter of execution in nearly all aspects of our business, resulting in core FFO and FFO per share growth of 41%, which was meaningfully ahead of our expectations and consensus estimates.
Our strong fourth quarter drove a significant beat above the top end of our previously provided full year guidance, fueled by fourth quarter same property NOI growth of 4.7%, better than expected. Tenant retention and property level NOI at some of our more recently acquired properties that are not included in our same-property statistics.
Continued strength in leasing where we generated comparable rent spreads of nearly 18% during the quarter and 7.5% for the year and beneficial timing related to the flurry of dispositions we had to finish 2023. Overall, I'm pleased that the way our team executed as we worked our way back from some unexpected tenant departures early last year.
I'm happy to say we're continuing to see that positive momentum carry forward into the first quarter of 2024, where we've had a very strong couple of months. The supply demand imbalance that many people have highlighted as a multi year tailwind for retail helped drive our strong leasing activity during the quarter.
This is evidenced by our signing of nearly 100,000 square feet of new leases, renewals and options and extensions, an average rent of $32.66 per square foot. To put that into perspective, this per square foot value for the fourth quarter was at least 23% higher than the average rents achieved in the first second or third quarters of 2023.
In addition to our ability to push rate, quality of leasing during the fourth quarter was relatively widespread with the collection of foresight in West Broad Village, seeing the most activity in more than half of the rents coming from leading brands such as REI, Fidelity, UBS, Ford's garage and J. Crew.
Our 18% comparable growth in new cash base rents versus expiring rents is going to help push same-store NOI in 2024 and even more so in 2025.
When we'll get the full benefit of some of the larger leases signed on acquired vacancy when we lap over the natural timing disruption for the full year, the quality of our locations strong demographics and targeted lease-up strategies have allowed us to sign nearly $0.5 million square feet of leases resulting in our signed, but not opened pipeline totaling more than 6% of the portfolio, cash base rents and it's growing.
We ended the year with a modest increase to occupancy finishing at 90.3% and leased occupancy increased to 93.3%, both of which are testament to our leasing activity. Given that we've largely been selling 100% occupied assets during the fourth quarter, we sold six properties for $64 million at a weighted average exit cap rate of 7.8%.
These dispositions include a community shopping center in Fort Worth, Texas, a small format retail property in Henderson, Nevada, three single-tenant retail outparcels at our Crossroads Town Center in Chandler, Arizona, and one of our two remaining single-tenant office properties for the for the full year.
We sold nine properties for $87 million at a weighted average exit cap rate of 7.5% and generated total gains of sales of $6.6 million on the investments for us. It was relatively quiet period. However, throughout 2023, we invested $80 million into four retail properties and one land parcel in originated first mortgage investments totaling $30 million.
In aggregate, we've invested at a blended going-in cash yield of 7.7%, which I note is notably above our 2023 disposition cap rate that was negatively impacted by the higher exit cap rates on to office property sales as we close the book on 2023 and shift our focus on 2024.
I'm very excited about some of the recent activity in our portfolio and the investment opportunities we're seeing in the market. From a transactions perspective, we are under contract with a nonrefundable deposit to sell our mixed use property in Santa Fe New Mexico for $20 million.
We anticipate the sale will close before the end of the quarter and the proceeds from this sale, combined with restricted cash and seller financing. Proceeds from the most recent office sale give us dry powder to acquire larger format retail properties that are more core to our strategy to put some context around the early 2020 for positive momentum policy and ROE and established food hall experience in Atlanta.
In culinary dropout, a well-known Sandbox restaurant concept, both opened at Ashford lane this month in February to chat just opened last week to a very strong reception at West Broad Village enrichment together, just these three tenants combined for approximately $1.4 million in annual base rent.
In addition, just in the past week, we signed a ground lease on the undeveloped 10 acres we purchased less than six months ago that adjacent to the collection at four sites. In the same week, we sold our remaining non-income-producing subsurface interest for gross proceeds of $5 million, which we intend to tax efficiently redeploy into investment acquisition.
With that, I'll let Matt highlight our portfolio go into details about 2023 financial results and provide some more specifics regarding our 2024 guidance and then we'll open it up for questions. Matt?
Matthew Partridge
Thanks, John. We ended the year with 20 properties totaling $3.7 million square feet of leasable space in eight states and 12 markets. Our portfolio continues to be concentrated in some of the fastest growing areas in the Sunbelt with Atlanta and Dallas now representing 50% of our annualized base rent and the majority of our other markets are in higher growth population states such as Texas, Florida, Arizona and North Carolina.
Recent disposition activities have allowed us to decrease the stand-alone office exposure in our portfolio to less than 5% at year end 2023 compared to 10% at year end 2022. And our top tenant list continues to increase in quality with Whole Foods, Publix, Dick's Sporting Goods, Darden Restaurants, Best Buy, T.J. Maxx, home goods, A. and C.
Fidelity & Ross Dress for Less all solidified its top 10 tenant our earnings for the fourth quarter of 2023 surpassed expectations with core FFO per share, demonstrating its fourth consecutive quarter of acceleration coming in at $0.48 per share representing a 41.2% increase compared to the fourth quarter of 2022 and fourth quarter 2023 AFFO was $0.52 per share, representing a 40.5% increase over the fourth quarter of 2022.
Q4 core FFO and AFFO year-over-year comparisons benefited from better tenant retention, higher rents and better analyzed flow through at many of our recently acquired properties for 4.7% increase in same property NOI, most notably driven by strong percentage rents at our Daytona Beach restaurants in the full year benefits from the repositioning and lease-up of.
Ashford lane lease termination payments related to tenants who previously vacated increased interest income from the makeup and size of our structured investments portfolio and growth in management fees and dividend income.
To strengthen our results was partially offset by higher interest expense and increased income taxes as well as the full year effects of our December 2022 common equity raise for the year, core FFO was $1.77 per share, and AFFO was $1.91 per share.
Representing a year-over-year per share growth of 2% and 4% respectively, when compared to 2022 after accounting for the impact of the three for one stock split in 2022, FFO per share in 2023 represents an all-time record year for the Company since its since it converted to a rate in 2020.
As we previously announced, the Company paid a fourth quarter regular cash dividend of $0.38 per share in December, resulting in a Q4 2023 FFO payout ratio of 73%. And earlier this week, the Company declared its first quarter 2024 regular common stock cash dividend of $0.38 per share, which is payable on March 28th to shareholders of record on March 14th.
This is the Company's 48th consecutive year of declaring a common dividend in the $0.38 per share represents a very attractive current annualized yield of approximately 9.2%.
During the fourth quarter, we maintained our opportunistic approach to capital allocation, repurchasing more than 14,000 shares of our Series A. preferred stock at an average price of $18.40 per share. This represents a 26% discount to liquidation preference.
And we also repurchased over 62,000 shares of our common stock at an average price of $15.72 per share, which has an effective annualized yield on cost of 9.7%.
As part of our approach to balance sheet and interest rate management, we entered into a new $50 million forward starting interest rate swap agreement to fix, so for an average fixed swap rate of 3.85% for the period between February 2024 in January 2028.
This locked in nearly all of our remaining variable interest rate exposure on our balance sheet at a current all-in fixed rate of 5.45%, which is approximately 150 basis points below the currently floating at interest rates. We ended the year with net debt to total enterprise value of 51% and our net debt to pro forma.
EBITDA per quarter over quarter to 7.6 times with the more than $150 million of total liquidity from available cash, restricted cash and undrawn revolver commitments, as well as the anticipated proceeds from our Santa Fe property sale. We're well-positioned to be opportunistic in the transaction market this year.
Turning to our 2024 guidance, we expect core FFO to be between $1.56 to $1.64 per diluted share and AFFO is forecasted to be between $1.70 and $1.78 per diluted share.
We're anticipating investment activity between $100 million and $150 million at the weighted at a weighted average initial investment yield of 7.75% to 8.25%. And our disposition guidance assumes $75 million to $125 million of asset sales at a weighted average exit cap rate between 7.5% and 8.25%.
Our assumptions for 2024 which conservatively contemplates cash flow disruption related to the timing of our dispositions. And investments also includes very strong lease-up assumptions, assumptions for the current portfolio before taking into account our transaction activities, we're projecting leased occupancy to be between 95%, 96% by year end, implying gains of approximately 200 to 300 basis points during the year, which would be a strong tailwind for 2025.
Same-property NOI in 2024 is forecasted to be to increase between 2% to 4%, which is most materially impacted by the lost rent from we work in 2024. And our expectation it will there will be timing disruption between when some of our known lease expirations occur and when the replacement tenants rent commence so that these drags in 2024 are expected to reverse and provide incremental growth in 2025.
Part of our guidance assumptions, we maintain credit loss reserves between 75 and 100 basis points of property level revenue, which is consistent with our historical run rate. And we're not currently projecting any additional share issuances or repurchases.
And finally, as John mentioned, are signed but not opened or SNO pipeline continues to grow, representing $4.5 million of incremental future base rent for more than 6% of our current portfolio's cash base rents, combined with the positive leasing momentum.
Potential upside to our guidance from the timing of transactions and the long-term benefits of our asset management technology initiatives for setting the stage for a strong 2024 and the potential for a milestone year in 2025.
With that, I'll now turn back over to the operator to open the line for questions.
Question and Answer Session
Operator
(Operator Instructions)
Floris van Djikum, Compass Point.
Floris Djikum
Hey, morning, guys. Thanks for taking my question. John, obviously, you guys got a lot of things moving and we're happy. I think investors are probably happy to see you get rid of some of that office exposure, which appears to be unloved in the markets today.
Maybe if you could talk a little bit about your other initiatives that you've been doing, including bringing the property management in Houston, I believe in Atlanta is or are there steps underway to do the same thing in Dallas and and what kind of uplift could investors expect going forward from these kinds of initiatives?
John Albright
Yes. Thanks for some. I'll let Matt talk about the uplift, but as far as structure, but we do have a expanding team in Atlanta has been very successful and beneficial to us having people on the ground and a lot of efficiencies there, especially just people with an owner's eye on on our properties there.
And given that we've had all these the restaurant openings with the Tahltan food hall is just opened. Colony director dropout just opened. It has really been critical to have people there on the ground and very helpful.
With regards to Dallas, we're starting a little bit of that process. We don't have quite as large of a presence there as as in size and Atlanta. But you could see that sort of opportunity is well down the road.
Matthew Partridge
A fourth, Matt, from an uplift perspective, I think Atlanta probably provides at least one to $0.02 a share, and that's without a more focused team, probably getting some economies of scale in terms of bidding out cohesive contracts for the port, the entire portfolio and the market. So there's probably upside to that $0.01 or $0.02.
Floris Djikum
Thanks. And maybe if I could, on your follow through as well as the ethanol pipeline, it's I think you indicated $4.5 million of ABR, yes.
Around 6% of your ABR. When is the timing of that coming online and does that include backs? I presume that does not include the backfills for we work or the theater in North Carolina, but if you can give us a little bit more color on the timing and also in those two particular spaces with what's happening on on backfilling those?
Matthew Partridge
Yes, I'll give a little bit of color on the timing. I'll let John talk about the backfill on we work and Regal So timing wise, Paulson row culinary drop out in further detail that John mentioned all those in the past couple of weeks. That's about 30% of the pipeline. The rest of it probably is late Q3, 4Q weighted down. So it will have a disproportionate benefit to 2025 versus 2024.
John Albright
And on those regards on where we are with particular tenants. So on Regal Theater, we've had we've been going back and forth to different tenants, and we're basically there with the with the tenants. So you should see that kind of In Motion very soon.
And so that's nice to get that that backfilled and get going. But remember, the process on all these, especially larger tenants to get open, is really running a year, we tried to tried to do better and shorten that obviously is really up to the tenant with given permit drawings.
But it's the approval process in certain jurisdictions just take a while, as you probably have heard across the campus of other companies with regards to we work, we've had this this year, we've had several tours with tenants so there's a couple of tenants out there for the full space.
There are a couple of turns there for half the space or a third of the space. So we were very anxious to get it leased in. So you are our brokers know that. And so you won't let a deal die over of small issues or we're aggressively pursuing tenants in the market and florists just to piggyback on that.
Matthew Partridge
And you are correct in either of those spaces are in our pipeline today.
Floris Djikum
Got it. So maybe just just a follow-up on the retenanting because again, that theoretically should have fairly high re-leasing costs, particularly if you're splitting a box as you might in with a box, I should say the space with works our space there. Is it safe to assume that's going to cost potentially up to 100 bucks a square foot to re-tenant that space?
John Albright
And definitely that could be in the round. I think we talked about this on conference calls. Earnings calls me six months ago, maybe nine months ago when we were negotiating with a fitness tenant that wanted the whole space that would have been north of 100, but I would say 100 is very safe on traditional office space. If you do something more special will be higher than that, but that's a safe assumption.
And would that be safe to make that assumption for the Regal space as well, you know, is not quite as high as we were, but it's a little bit shy of that.
Floris Djikum
Okay. Thanks. That's it for me.
John Albright
Sure.
Operator
Our next question will come from the line of Rob Stevenson, Janney Montgomery.
Rob Stevenson
Hey, good morning, guys. Um, is the Regal re-tenanting of theaters that have different concepts?
John Albright
And so there is a different concept there. There has been paid or interest, but it's a different concept.
Rob Stevenson
Okay. Is that going to take longer than a year, if you're converting a theater or some other use, given the slope floors and all of that sort of stuff, it should take a year?
John Albright
It would take a year because of permitting, but if you didn't have permitting, it would not take a year.
Rob Stevenson
Okay, that's helpful. And then, Matt, the $4.5 million that you talked about coming online in 24. Is that all on stuff that was not opened in the fourth quarter? Or does that include stuff that may have opened in December, but didn't pay a full quarter's worth of rent?
Matthew Partridge
Yes, that's going to be a combination of both, but primarily it's going to be on stuff that has not not come online yet.
Rob Stevenson
Okay, but that includes whatever adjustment we need to get to a pro forma for any leases that started paying rent in December and things like that. And that's included in that 4.5?
Matthew Partridge
That's right.
Rob Stevenson
Okay, perfect. And then any material known move-outs in '24, early '25 at this point?
Matthew Partridge
Just Regal is the only known move out and that that will be on late March, early April.
Rob Stevenson
Okay. And then how are you guys thinking about the Fidelity asset in New Mexico? I mean, given where that's yielding and 100% occupied versus the market for office assets and being able to replace that NOI at some point? Yes.
John Albright
So I would think about it Well, Rob, what would be more your concern, so I can kind of address it appropriately from well.
Rob Stevenson
First of all is it's not a great market for office assets, but that's a single-tenant asset, which has been a little bit better in the marketplace with a quality credit tenants, but also is it what are you looking at if you're having to if you decide to sell that at some point here in '24, what are you looking at as a likely sort of cap rate spread?
Are you going to is that going to wind up being [1500] basis points wide of where you can redeploy the proceeds and et cetera, is it so both what do you see as the market for that as well as how are you thinking about replacing that NOI going forward?
Yes.
John Albright
Okay. So so I was actually out there late last week and the market in just getting real granular here for you. So this is our last office asset. I hope I hope you don't mind, but yes, so as you know, it's in the Mesa del Sol master-planned community, right by the Sandia National Labs by the current Clean Air Force Base.
So as the government is spending a lot of money on both of those big infrastructures, you're getting a lot of contractor interest in the Albuquerque area, and they want to be as close as possible on Mesa del Sol is the place to be Netflix is still spending $1 billion or under construction for additional movie studios.
That's basically Southern Iron from the Fidelity campus. And as we talked about and Fidelity bill is a two story building with two separate buildings that could be separated. So it's the only office building in that whole complex.
There is 1,000 lots under construction for homes. There's multifamily under construction for homes. There's a planned hotel in Mesa del Sol that's going to maybe to homes. There are two hotels for especially for the Netflix business.
You have a solar manufacturer that's going to build a complex a facility right across the street from Fidelity. And you have an Australian helium energy company that is basically coming into Mesa del Sol. So with that aspect, the market's getting better and better for Fidelity building.
Having said that, we're in discussions with Fidelity about doings of maybe an extension with the lease where it can be a lot more marketable and a lot more valuable to us on a on a sale basis. And then based on that sort of monetization, we feel like it will be easy to replace.
We call it income neutral to where we could sell that building. If we had to sell it now and just like you come hell or high water to sell it, it would be a little bit of a not as accretive or basically a loss of income as you replace the capital. But it wouldn't be anything crazy because on the building as a Class A.
Building built by Forest City and it's in a growing area and no one's going to build an office building, as you know. And there's a lot of people coming into Albuquerque for the big government kind of contractors and new energy kind of the Clean Energy sort of tenants. So sorry, if that was a little bit too long for you?
Rob Stevenson
No, that was helpful. And then I guess my last question regarding tenants. You know, if you were to dispose of Fidelity, AMC becomes your top tenant health. How is that those assets look today is it with whatever data you're getting and seeing foot traffic on Friday, Saturday nights, et cetera?
Are those theaters back to doing pretty well? Are they still, you know, weak? You know, is it is it more or less dependent on, you know, how quickly more blockbusters get released? How are you guys thinking about those theater assets?
John Albright
Yes. So I guess I was taking a little bit of a tour around our portfolio last week as also in Atlanta. And with I talked with the manager of AMC, amassing yards and massing yards is basically fourth or fifth in the whole Atlanta region for AMC, it's doing very well and that's out of 15 to 17 theaters.
And so they've had they've had some really strong performances for some films out there. And so so they're feeling really good about that. That theater, if you look at that theater, that's like probably one of the last ones that was built in A. and C. system.
So it's very new and appropriately sized the agency that we have. That collection is probably second prime location within the collection property right along the highways that has visibility and there that market is basically on fire in.
So it would be very easy and very economically advantage to us if they wanted to leave because there'd be a lot of backfill interest with much better credit and possibly higher rent. So we're we feel very good about our exposure on the theater space right now. Some gateway that's that's kind of a little bit of that backdrop.
Rob Stevenson
All right. That's helpful. Thanks, guys. Appreciate the time and have a great weekend. Sorry.
John Albright
Thank you, Rob.
Operator
Matthew Erdner, Jones Trading
Matthew Erdner
Hey, good morning, guys. Thanks for taking the question.So given the short term loan that looks like it's going to be up kind of second half of the year. And you know, are you expecting acquisitions to be in the second half of the year with dispositions kind of front-loaded?
And then also what's going to drive you to the higher range of that guidance towards the $150 million mark rather than the $100 million?
John Albright
Yes. So we basically have some some acquisition activity going on right now, we hope to be kind of front ended, as you mentioned there. And so the timing could be on top of when the seller financing that we did for Sable gets monetized. And so that timing should match up fairly fairly well come in. So so we have that going on, but I'll let Matt talk about your other question?
Matthew Partridge
Yes, Matt, in terms of timing for transaction activity and to hit the top end of the range, like John said, we're working on some stuff right now that would that would match fund some of the activity that has happened on the disposition side or would happen.
But the rest of our guidance assumes that it's pretty back-end weighted from an acquisition perspective. And so there is some timing drag between dispositions and acquisitions that comes through the guidance. And then as it relates to hitting the top end of that range, I think it's going to be a function of finding good opportunities on the land acquisition side.
I think we feel pretty good about the liquidity of the assets that we would want to sell to match fund. So it's really going to be opportunistic.
Yes.
Matthew Erdner
Got you. And then can you talk about the opportunities that you're currently seeing, whether it's in markets where you're already at or if you're looking to expand in some new markets a little bit of both.
Matthew Partridge
So we are finding opportunities within our markets and new markets.
Matthew Erdner
Got you. And then one last quick one for me. And you know, the cap rate on the acquisitions or the dispositions side, if you were to exclude the office transactions
Matthew Partridge
I don't have it off the top of my head, Matt, but it's certainly inside of the blended cap rate, given the more elevated cap rates on the two office dispositions.
Matthew Erdner
Got to. Thank you guys.
Operator
John Massocca, B. Riley Securities.
John Massocca
Good morning. Good morning wherever you can hear me. Yes, I'm so maybe sticking with the theme of guidance in kind of the ranges in the investment activity, what can kind of cause you to be closer to the high end on the cap rate or the investment yield seeing it.
And I guess as you kind of contemplate that investment volume guidance, are there kind of some more of the structured investments you've been doing recently factored into that or is it kind of more typical spend equity investments and shopping center assets that would be kind of making up the bulk of that guidance?
John Albright
Yes, we're definitely looking at it just right down the fairway as far as your core sort of acquisitions of where where the strategy is as far as buying larger format retail, where there's different lever levers of increasing value with bringing in new tenants, seeing change in our tenancy, that sort of thing.
And so we feel we feel pretty good that we have our eyes on higher the higher end of that guidance as far as cap rate without any structured finance investments, we don't have any structured finance investments that we're looking at right now.
John Massocca
Okay. And then was the in-place portfolio, you kind of mentioned that the cash, the increase in kind of cash rents was pretty broad based. I mean, I guess is that 17.9% level or somewhere around there sustainable going forward as we look out to one '24, was that maybe an anomaly for specific leases that were renewed or put in place?
Matthew Partridge
A good question. I think on the 2024 leases expiring, there's a pretty good opportunity opportunity to drive more rate on the average cash rent per square foot for the leases expiring in 2024 at $17.83 up. That's meaningfully below our average rents for the portfolio and obviously pretty significantly below our last 12 months of leasing activity.
Average rents up, I think will be they'll continue to be pretty substantial lift on a re-leasing effort. And then something that's probably a little bit more specific to us in the space is the fact that we have been acquiring vacancy over the past few years.
And so there's a lot of runway to drive increased cash flow independent of the comparable lease spreads and then lastly on the ground lease and can you just provide a little more color on the counterparty there?
John Massocca
What's the likelihood that they can in your mind that they would enact the or terminate the agreement during the feasibility period, we utilized the purchase option?
Matthew Partridge
And just just kind of any additional color there would be helpful. Sure.
John Massocca
So the group that basically we signed a ground lease with option to buy. They really wanted to buy the parcel. But for a timing perspective, that then worked for us. So we gave them the option come in after a year where they could they could purchase the site. So that was definitely there. Their preference is to buy the site.
John Albright
The Group is well capitalized. It will be a very good drawn and very complementary to the collection will bring the good customers with big spending sort of outlook. And so we're very excited about it. If they drop out. We it was a tough choice to go with this group.
We have we had two other groups that were vying for it in detail, to be honest with you the other groups would pay more, but we felt more comfortable with this use and the timing and it would go faster than the other groups. But the other groups I would pay more. So I have no problem if these guys don't make it or feel like it will be fairly easy to to backfill that for sure.
John Massocca
And you might not be able to provide this, but just any kind of color of bracketing the purchase option on what that would kind of imply in terms of a return on your investment?
John Albright
Yes, the return will be feel very, very good for the shareholders. So it would be basically almost a double, but that's very helpful.
John Massocca
And that's it for me. Thank you very much for it. Yes.
Operator
RJ Milligan, Raymond James.
RJ Milligan
And good morning, guys. Just one question for me for the investment guidance for the year. The cap rates [775 to 825]. I'm just curious, you know, obviously you've shown an appetite to buyback either common or preferred shares.
And I'm curious with your stock trading in the 8% cap rate range or north of that, how do you feel about additional buybacks versus making more investments?
Matthew Partridge
Yes. Thanks, R.J. So remember, the act a lot of this acquisition is being driven by the recycling from the efforts of Sanofi that's under contract for $20 million, the Ford Credit building that we sold, that's a part of that money than 1031 and then the seller financing that will come through. So a lot of it's being driven by 1031 needs to come in. Then the other part of it.
As you've seen, we were very active in buying back shares at at very interesting levels for shareholders. So it wouldn't be we would not be using proceeds from asset sales to buy back stock. But certainly we would look at Neal other certain levers to buy back stock if that got you down to low levels again, for instance, we could sell some of our structured finance investments and use that. So so we're certainly not shy about buying back stock when it becomes ridiculous, in our opinion. Interesting.
But a lot of the acquisitions are going to happen because of the 1031 nature that was it for me.
RJ Milligan
Thanks.
Matthew Partridge
Thanks.
Operator
(Operator Instructions)
Mike Gorman, BTIG
Mike Gorman
Yes, thanks. Good morning.
Just a quick question, Matt, on the disposition guidance range, does that include the payoff of the seller financing on Sable Pavilion or is that above and beyond the dispositions guidance.
Matthew Partridge
Now that would be above and beyond the disposition guidance.
Mike Gorman
Okay, great. And the remaining two structured investments after that. Do they I know John just mentioned potentially selling, but do they also have any accelerated prepayment options associated with those?
John Albright
If they if they do they have a make whole for provision.
Mike Gorman
Okay, great. Thanks so much.
John Albright
Thank you.
Operator
And that concludes today's question and answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.
