Greetings. Welcome to Physicians Realty Trust second quarter 2021 earnings conference call. At this time, all participants are in a listen- only mode. A question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Bradley Page, SVP, General Counsel. Thank you. You may begin. Thank you. Good morning, and welcome to the Physicians Realty Trust second quarter 2021 earnings conference call and webcast. Joining me today are John Thomas, Chief Executive Officer, Jeff Theiler, Chief Financial Officer, Deeni Taylor, Chief Investment Officer, Mark Theine, Executive Vice President, Asset Management, John Lucey, Chief Accounting and Administrative Officer, and Laurie Becker, Senior Vice President, Controller. During this call, John Thomas will provide a summary of the company's activities and performance for the second quarter of 2021 and year to date, as well as our strategic focus for the remainder of 2021. Jeff Theiler will review our financial results for the second quarter of 2021. Mark Theine will provide a summary of our operations for the second quarter of 2021. Following that, we will open the call for questions. Today's call will contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. They are based on the current beliefs of management and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe our assumptions are reasonable, our forward-looking statements are not guarantees of future performance. Our actual results could differ materially from our current expectations and those anticipated or implied in such forward-looking statements. For more detailed description of potential risks and other important factors that could cause actual results to differ from those contained in any forward-looking statements, please refer to our filings with the Securities and Exchange Commission. With that, I would now like to turn the call over to the company's CEO, John Thomas. John? Thank you, Brad, and thank you for joining us this morning. Our portfolio of best-in-class medical office facilities continued to perform exceptionally during the second quarter, delivering the predictable growth and operating outcomes that medical office investors have come to expect. This includes the collection of over 99% of all cash rents due during the quarter, supported by patient volumes that remain resilient despite the recent spikes in the Delta variant. Along with this operational performance, we continue to have confidence in our external growth pipeline. Since our last call, we have made additional progress on our acquisitions and have high-quality medical office building targets in various stages of negotiations. Substantially all of this pipeline is off market in direct negotiations with existing health systems and developer and owner clients. While our investments will be back-end weighted this year, we remain very confident in our guidance of $400 million-$600 million of investment activity for 2021. Our loan pipeline continues to grow as well, including the newly announced mezzanine loan in Brooklyn Park, Minnesota. DOC's real estate loan book totaled $176 million in outstanding principal at quarter end and is secured by real estate valued at over $1 billion. In addition to the attractive 8% average coupon, our loan portfolio represents a source of future growth through embedded ROFR rights and purchase options. Within this loan book are five projects under development with an expected market value of over $200 million upon completion, including one loan-to-own transaction. Our pipeline for development financing opportunities continues to grow. We expect to secure many of these new opportunities by year-end, supporting our growth in 2022 and 2023. We are also evaluating the opportunity to use the robust medical office market to dispose of some non-core facilities at a profit. This pruning could both enhance the quality of the portfolio and also provide an additional source of funding for the growth this year. Our Chief Financial Officer, Jeff Theiler, will review our financial results and balance sheet in a few minutes, but I wanted to recognize Jeff and Mike Farina for leading us in the achievement of our long overdue upgraded credit ratings with both S&P and Moody's. We've already seen the benefits of these well-deserved upgrades to our cost of capital, amplifying our opportunity for outsized accretive growth going forward. The trends in favor of medical office have proven to be very predictable and reliable, driving a consistent and growing rental income stream for the benefit of our shareholders. Public investors in healthcare real estate can count on medical office to remain open, occupied, and busy. Medical office does not need to recover. As an asset class, it is only impacted temporarily in spring 2020, and DOC has maintained close to 96% occupancy throughout the pandemic. We remain focused on growing our funds available for distribution each year and will continue to manage our organization to achieve that result annually. Jeff will now review our financial results, and then Mark Theine will share our operating results. Jeff? Thank you, John. In the second quarter of 2021, the company generated normalized funds from operations of $58 million, or $0.26 per share. Our funds available for distribution were $55 million, an increase of 3.6% over the comparable quarter of last year, and our FAD per share was $0.25. Our operating portfolio has continued to perform well in the second quarter. Our same store portfolio had consistent occupancy year-over-year and generated NOI growth of 2.4%, right in line with the fixed escalators and consistent with our expectations. The one deferment we granted in the midst of the pandemic last year has been fully paid back, including $200,000 of associated late fees. Through this quarter and to the present time, we are seeing very little negative impact with our tenants from COVID at this point, despite the emergence of the Delta variant. We are optimistic that our portfolio will continue to perform and be resilient in the current environment. Turning to the balance sheet, we have been recognized by two major rating agencies over the past few months for portfolio and balance sheet improvements that have been years in the making. We were upgraded to BBB flat by S&P on May 13th and upgraded to Baa2 by Moody's on July 1st. These upgrades have a significant impact on our cost of capital and improve our ability to compete for the highest quality buildings. In their rating evaluations, both agencies recognized the high quality of our pure-play MOB portfolio and its superior performance during the pandemic. They also noted our disciplined capital strategy and best-in-class tenant mix, specifically our 63% concentration of investment-grade tenants, 93% exposure to net leases, and significantly lower proportion of near-term lease expirations relative to the sector. We remain highly disciplined with our capital strategy, raising $83 million on the ATM in the second quarter at an average price of $18.39 as we continue to pre-fund our acquisition pipeline. As a consequence, we currently sit in an excellent financial position with consolidated debt to EBITDA of 4.5 x and an outstanding revolving credit facility balance of $72 million, leaving $778 million of availability. This pre-funding has placed us in a position to successfully execute on our substantial pipeline in the back half of the year. We are still confident in the acquisition guidance we laid out at the beginning of the year of $400 million-$600 million of new investments and expect to execute on those investments prior to the end of the year. As we discussed last quarter, the pipeline is full of the types of buildings that are in our sweet spot, high-quality MOBs with strong investment-grade tenancy from leading health systems. JT has talked about the progress on this pipeline, and while perhaps that progress has been slower than we were anticipating, it has been steady, and we remain on track. Turning to other relevant portfolio metrics, our second quarter G&A came in at $9.1 million, and recurring CapEx was $5.7 million for the quarter. Our full-year guidance for those metrics remain unchanged at $36 million-$38 million for G&A and $25 million-$27 million for CapEx. I will now turn the call over to Mark to walk through some of our portfolio statistics in more detail. Mark? Thanks, Jeff. Quarter- by- quarter, MOBs continue to prove their reputation for stability with occupancy, collections, and leasing trends that remain strong regardless of market factors. The steady internal growth delivered by our asset management platform is the result of superior tenant satisfaction, strong 2.4% built-in rent escalators, and an industry-leading 96% lease rate. Our leasing and CapEx teams continued to deliver value during the quarter with an impressive tenant retention of 87%, positive cash re-leasing spreads of 2.7%, and low CapEx investments that total just 7% of cash NOI. The operations team also continued to execute on the plan to expand our in-house property management platform, laying the groundwork for further cost efficiencies across the portfolio that will deliver long-term value for shareholders. Specifically, we recently welcomed Mercedes Marquez and Nicole Bradley to the DOC family as we expand our management efforts in Phoenix, Arizona, and Birmingham, Alabama. From a performance perspective, our MOB same-store NOI growth in the second quarter was 2.4%. The NOI growth was driven primarily by a year-over-year 2.4% increase in base rental revenue. Operating expenses were up 6.2% and offset by 7.0% increase in operating expense recovery revenue. Year-over-year, operating expenses were up $1.9 million overall, primarily due to a $0.5 million increase in utilities and a $0.4 million increase in insurance costs. Same-store occupancy remained steady at 95.4% year-over-year as our leasing team continues to execute consistently with strong retention. On a consolidated basis, we completed a total of 395,000 sq ft of leasing activity during the quarter, the second highest quarterly volume in the history of the company. Tenant retention was 87% across 353,000 sq ft of lease renewals, with cash renewal spreads of + 2.7%. Notably, these results were achieved with limited leasing costs totaling $1.68 /sq ft per year across the full volume of leasing activity, a figure that is much more efficient than industry averages. Our successful net effective rent outcomes are driven by our deep understanding of our primary markets and constant evaluation of the local leasing trends. Turning to our capital investments for the quarter, we once again proactively managed recurring CapEx to $5.7 million or 7% of cash NOI. Year to date, DOC has invested $11.3 million in recurring capital projects. While committed leasing TIs were low on a per square foot basis, we do expect capital expenditures to tick up during the second half of the year due to increased leasing volumes. As a result, we still expect to fall within the $25 million-$27 million full-year guidance previously announced. Embedded within all capital investments made by DOC is a strong commitment to materials and practices that enhance the patient experience and our ESG efforts. Our second annual interactive ESG report was released in June and highlights the exceptional progress toward our three-year goal to improve the portfolio's overall carbon footprint, energy, water, waste usage by 10% compared to our 2018 base year. In 2020, DOC invested in 29 sustainability-driven capital expenditure projects totaling $4.2 million, generating approximately $7.7 million in operating expense savings over the next 10 years. Additionally, we exceeded our team's social goals by raising or donating over $350,000 for worthy causes across the country and providing over 515 volunteer hours of service to charitable organizations. In the eight years since our IPO, we have not only built one of the best healthcare real estate portfolios in the country, but we have also assembled the best healthcare real estate team. Our efforts directly translate into care for tenants, evident in our 2021 Kingsley Associates Tenant Satisfaction Survey results. This year, we surveyed nearly 365 tenants, representing nearly 3,4 00,000 sq ft. Physicians Realty Trust received an industry-leading 76% response rate. In addition, despite the ongoing COVID-19 pandemic, we earned the highest scores in the history of the company, including an overall management satisfaction score of 4.53 out of 5.0, beating the national benchmark. Going forward, we expect continued successes from our growing operating platform, resulting in enhanced local market knowledge, repeat investment opportunities with existing partners, profitable operating efficiencies, and continued tenant retention. With that, I'll now turn the call back to John. Thank you, Mark. Thank you, Jeff. We'll now take your questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Juan Sanabria with BMO Capital Markets. Please proceed. Thanks, guys. Only my wife calls me Juan, but that's fine. Just on the acquisition pipeline, hoping you guys can give us a little bit more color on the expectations for the second half. I think last quarter you talked about visibility on $200 million of opportunities, maybe how those have evolved and kind of pricing expectations. Yeah, great question, Juan. The pipeline has just continued to build. We're very confident about, again, the full-year numbers, $400 million-$600 million, and we've got a line of sight to a pipeline that's at least that big right now. It's a collection of high-quality medical office buildings, some that were under construction in the first half of the year and just kind of moving to CO, and we'll move to rent commencement here this quarter. We're really excited about it. Hopefully we'll be able to share a lot more with the next call. The pricing is still kind of that mid 5%-6%? Yeah, 5%-6%. Again, the higher quality, newer buildings are going to be at the low end of that range. The development pipeline, which continues to grow, is where we achieve those higher returns. Okay. Just curious on what you guys think about the importance of scale and maybe the opportunity for public M&A given potential cost synergies or further improvements to the cost of capital post your credit rating upgrade. If you prefer to kind of just onesies, twosies, and don't really like the prospect of bigger portfolio transactions, or just kind of your general thoughts on that subject matter. Yeah, Ron, sorry, we had a brief disruption here. I think I got the gist of your question. Our execution strategy from the beginning has been direct negotiated off-market transactions, primarily through health system relationships, physician relationships, and healthcare real estate developers. That's what we're focused on our strategy and execution there. Again, we've got a high-quality pipeline we'll be able to share a lot more about with the next earnings call. Scale is obviously very important. As we've grown, as Mark mentioned, we've expanded our internal property management team in a couple of markets, where we have had some significant growth opportunities. Again, scale in our core markets continues to drive a lot of synergy value, and it provides more opportunities. Public market M&A or large portfolio transactions, we certainly look at everything, but we're focused on our core strategy, and we're approaching $6 billion in assets, so we've got pretty good scale already. Thank you, guys. Yep. Thanks, Juan. Our next question is from Nick Joseph with Citigroup. Please proceed. Thanks. As you look at your acquisition pipeline, obviously a lot of it is back-end loaded this year. Is that kind of unique to this year, or is that representative of what your acquisition pipeline should also look like heading into 2022? Yeah. It is unique for this year. It's just the circumstances of how the pipeline built at the end of last year. Again, we'd like to be a little more spread out, and I think historically, there was a time where we were closing a building a week. It's just the uniqueness of this year. I think there were some sellers, some health systems, at the end of last year, that weren't really thinking about monetizing. With expecting changes in tax laws, kind of changing in the political environment, things like that, we're seeing more opportunities kind of evolve that kind of bubbled up in the first quarter, that we've been negotiating through. Again, expect to execute on this quarter and the last quarter. I think it's just unique to this year, but frankly, it's been pretty exciting for us. Thanks. Then just back to the broader transaction market, you mentioned cap rates maybe 5%-6%. How have you seen portfolios trade relative to individual assets, and then what does the buyer pool look like? Yeah, the buyer pool has gotten bigger. Private equity continues to quote, unquote, private equity, if you will, it continues to raise a lot of capital, continues to explore both individual assets and the portfolios have been floating around. We haven't seen anything. Of course, we look at everything that's marketed, substantially all of our transaction volume this year will be off market and not portfolio-based transactions. There is a premium out there for the portfolios we've seen traded, at least based on the quoted cap rates. The ones that it's the $300 million - $500 million portfolios that have floated around. I think we're hearing 5.25, kind of cap rates, 5.5 on some of those. On assets that are probably high 5s to six, if bought on an individual basis. A lot of capital chasing the assets. As we said, we expect to dispose of, opportunistically, a few of our assets that just don't fit our strategic portfolio going forward, but they're attracting a nice high price. Thank you. Our next question is from Jordan Sadler with KeyBanc Capital Markets. Please proceed. Good morning, guys. Good, Jordan. I want to follow up on that last piece, JT. You mentioned dispositions, which I feel like you guys have had an on-again, off-again view towards dispos a little bit. It sounds like you're mentioning them again, which makes me feel like you're a bit closer maybe than you had been in the past to selling some stuff. Can you maybe offer a little bit more color surrounding the sales? We think our portfolios, we pruned some things a couple of years ago out of the portfolio. We think our portfolio is outstanding. Of our 275 buildings, we love all our children. There's just a couple of, I'd say, small circumstances where either a portfolio might trade and our assets are complementary to that, or we're always kind of out exploring the opportunity to sell the LTACs, things like that. We do expect to close on a handful of dispositions this year, and we'll use that capital to fund our acquisitions. Volume-wise, are we looking at like $100 million total or something smaller? Did I lose you? Did we drop the line? Can you guys hear me? They are still connected. I do not know what the technical difficulty is. Yeah. Please hold the line. Okay. Okay. He might be muted. Hey, Jordan, we lost you for a minute. Sorry about that. Do you want me to repeat the question, or you got it? Yeah, your question was, you said $100 million. My response to that was, that would be on the high end. It's a handful of dispositions. Okay. Along the same lines, the leverage really, with the use of the ATM, Jeff, good job. You're, I think, about as low as we've seen you in a while at 4.5x net-to-EBITDA, I think you quoted. Yep. Sort of appetite to continue to sort of use that to get the leverage lower ahead of sort of the back-end-weighted acquisitions would be my question? Any insight on additional ATM that's been issued post-quarter end? Good questions, Jordan. Like you said, we've been pretty proactive about funding the acquisition pipeline in the first two quarters of the year. Really, we're at a point right now where we could execute on that acquisition guidance and not raise additional equity. I think we're in a really good spot. Look, we're always opportunistic about how we fund our deals, and it's dependent on what we see coming down the line in the far future as well. We'll take it day by day, but as a need, we don't have any need for additional equity. Okay. A quick administrative one for you, Jeff. The late fees and collections total booked in 2Q that won't repeat? Yeah. Just $200,000. That's right. Okay. Thank you. Our next question is from Amanda Sweitzer from Baird. Please proceed. Thanks. Good morning, guys. Following up on your comments on increased CapEx and the increased leasing volume you expect, your back half lease maturities actually look comparable to what you experienced in the first half. Are you expecting to be able to build occupancy over the remainder of the year? What's the outlook for leasing vacant space today? Thanks, Amanda. This is Mark. As you just mentioned, the back half of the year, we've got about 2% of our ABR coming up for renewal, in the second half of 2021. It's about 91 leases, and an average of about $23 / sq ft. We feel really good about where the market rental rates are, and especially a lot of the local market trends, being able to push some of those rents and some of the escalators upon lease renewal. What we're seeing a lot of right now is requests for CapEx and TI and some early lease renewals. We accelerated a few leases this quarter, extended early, adding some nice term to hospital leases, and extended them into the future with solid rent bumps. We expect solid leasing activity to continue there. That's helpful. As you've seen more companies start to kind of solidify their return to office plans, can you provide an update on how you're thinking about your health system administration tenants today? Have those tenants given you any update about how they're thinking about their go-forward space needs? I think, we have a small amount of, if you will, administrative space with health systems, but it's leased for multiple years. We're having that dialogue. I think health systems are, again, with this Delta variant, it's kind of slowed down some of their internal thinking while they focus on the hospitals that are full and, again, shifting patients to the outpatient care facilities like we own. We don't have any good color yet other than systems are trying to rationalize and make that decision. We've had conversations about either selling those buildings, subleasing those buildings, or keeping them in shape while they figure out those plans maybe in the fourth quarter. Sorry to be so vague, but we don't have a lot of that space. Yeah. No, that makes sense. I appreciate the time. Yep. Our next question is from Vikram Malhotra with Morgan Stanley. Please proceed. Thanks for taking the questions. Good morning. I guess maybe just on that last point around health systems figuring things out given COVID and maybe this resurgence, can you just give us any color on conversations you may have had or expect to have on either sort of, say, lease backs or just even more directly on health systems looking at that whole off-campus, close to consumers in terms of pushing care out there? Yeah. We're obviously big believers in that long-term strategy by health systems to plant outpatient care facilities in new markets. That's exactly like the Brooklyn Park development we're financing. The projects we're developing this year or financing the development of this year are almost all exactly that kind of description. Ambulatory surgery center anchored health system, employed physicians, outpatient care, diagnostics, things like that. Our portfolio does include a nice balance or mix of on-campus assets that are the health system in our case, in our pipeline, are monetizing to raise capital for their balance sheets. At the same time, coordinating the discussion around new developments with those same health systems. It's a good mix. We haven't seen a real change in the long-term trends of expanding on-campus newer assets and at the same time planting flags in new demographics and for growth. Okay, that's helpful. Maybe Jeff, if you can just remind us, in this environment where there's still inflation concerns, whether it's on labor, materials, taxes, can you remind us again just the overall structure, kind of the preponderance of leases, how the pass-throughs work? Vikram, this is Mark. Jeff mentioned in his prepared remarks that our portfolio is very well insulated from rising operating expenses due to the triple net structure. 93% of our portfolio is triple net. Really all but 2% have some protection against inflation of operating expenses. Some of them are modified gross leases, which also have a cap that's paid for by the tenants. Be able to solve that in our same store results with a slight increase in operating expenses, but nearly all of it was recovered through our recovery structures in the portfolio. Got it. Okay. That's helpful. I just want to go back to the disposition comments that you made. I guess like leverage obviously is in a great place, so you can look to use the balance sheet. Just given where the, maybe some of what your private peers are doing, which seems like they're in the market to sell more given pricing, what would make you want to kind of really move that disposition number higher? Really not, Vikram. Like I said, these are opportunistic sales, if you will. We've talked for years about selling the LTACs if we can get an appropriate price. They continue to perform very well in the COVID environment. I mean, that's kind of what they're used for. Their EBITDA has been stronger than in years. There's a potential good opportunity to sell those this year. The others, again, it's a very small handful of buildings in unique situations that we've had the opportunity to sell. Pricing has been excellent, and we're ready to move those out. The portfolio's in fantastic shape. 96% occupied. There's not a lot in the portfolio that we want to even consider selling. Great. Okay. Thanks so much. Our next question is from Michael Carroll with RBC Capital Markets. Please proceed. Yeah, thanks. JT, on the investment pipeline, it sounds like that the size of the pipeline equals the amount of deals that you want to close in the second half of the year. Do you have those deals under contract right now, and you just need to close on those? How does that work out? Yeah. A good portion of them are under contract and just moving down the normal closing process with those transactions. Others are under exclusive, kind of signed letters of intent. All the economics and deal terms are worked out, just working through the documentation and closing process. A little slower, in part, because of travel restrictions and frankly, the demand in construction and other things, and going around the country. We remain very confident about not only getting those transactions closed, but continuing to work through negotiations on several other things in our pipeline. Okay. How many of those deals in the second half of the year reflect development projects? Do you work out those deals during the time of those projects being under construction as soon as occupancy or the leases commence? That's when you close those deals, or I guess, how does that work out? Yeah. It varies a little bit. The loan-to- owns essentially work out where we finance the construction off of our balance sheet. They're 100% occupied, investment-grade, credit quality tenants. The loan stays in place, typically for one year for tax reasons, but stays in place for one year, and then it collapses into ownership. You'll see one of the investments we made this year was the Denton Cancer Center, which is exactly the process. That's been on our books for a couple of years, first as a loan, and now it's converted to fee ownership. Some of the development financing is where we just are part of the capital stack, and typically that happens when the building is pre-leased to some high percentage, but not fully leased, and the developer has their own capital and gets their own construction loan. We provide some capital, and then we have a ROFR that is triggered, again, usually with rent commencement. Maybe for a year after that for tax reasons. It just varies, but as we said, or I said in my comments, the assets under construction on our books today would be valued at about $200 million, once we convert those to ownership. Most of that'll happen in 2020. What's under construction today will convert over in 2022. Some of that could blend into 2023. Projects we start in the fourth quarter of this year, we're working through, most likely, probably early 2023, conversion to full ownership. That pipeline's growing. It's been an interesting year for health systems, moving forward with projects that they didn't start last year, but have proceeded with this year. Okay. Your investment targets, does that reflect the amount of capital you're going to deploy out this year, or does that reflect the amount of capital you're going to commit to deploy, including those development projects that will bleed into 2022 and 2023? Hey, Michael, it's Jeff. It'll reflect, obviously, the amount of acquisitions we complete and then the amount of development that we're committed to for the year. Okay, great. Just last one, Jeff, can you remind us what the long-term leverage target is? Is it still a mid-five net debt to EBITDA number? Has that changed? No. That's right, Mike. 5.25 is our kind of long-term debt target. Obviously, that's a conservative number, so there can be some flex around that. That is, in general, our long-term target. Okay, great. Thank you. Thanks. As a reminder, it is star one on your telephone keypad if you would like to ask a question. Our next question is from Daniel Bernstein with Capital One. Please proceed. Hi, good morning. Hi, Dan. Just wanted to dig into a little bit about the benefits of the increasing internal management, maybe kind of the strategic direction of that. Is it related to ESG? Is this a signal maybe that you guys are looking a little bit more away from triple-net to more gross lease type of assets? Maybe, is there any way to quantify kind of benefits or what benefits you've seen as you've grown that management side of the business? Yeah. I'll give Mark a second to think about the- Okay direct financial correlation. It's really, again, part of our long-term strategy, Dan. When we have a health system, and we always have a lot of repeat business, at least that's our goal with the health systems that we work with. Once we get to scale, and can internalize that management, again, there's a financial benefit of every time you add another building, but you don't have to add another property management team, just the direct correlation there. Like in the Phoenix market and the Birmingham market, we just continue to grow in those two markets, and just had the opportunity to hire a couple of outstanding people to put on the team and then directly manage those buildings in those markets ourselves. Scale's pretty natural. Columbus, Ohio, has been a fantastic example for us of how once we internalize the management, not only are we getting a dollar return from that, a financial return from that, it's also leading to more opportunities in those markets. It just kind of builds upon itself. It's not a sign of moving away from triple-net leases. Again, we're focused on minimizing the risk, maximizing the synergy value of internalizing management and managing the buildings better and at a lower cost, and thus hopefully moving more of the total cost of occupancy to triple-net rent to us, not just expenses. Yeah. To add to that, as JT said, it all starts with the relationship, the hospital relationships, the local market knowledge, the ability to expand our acquisition opportunities with hospital partners across the country. Secondly, the financial impact starts with economies of scale from just having more properties in the market and being able to lower operating expenses for our healthcare partners in the buildings. Again, most of our expenses are insulated by the triple net leases, but we look to benefit upon lease renewal from the total occupancy cost that we can show the tenants. The management fee itself usually adds about 20 - 30 basis points onto a cap rate in an acquisition if we internally manage there. As JT said, there's a direct impact from the management fees associated with internalizing property management. We've really grown a great team around the country, and look forward to leveraging the economies of scale and the team as we grow the portfolio in the future. All right. What portion of the portfolio is now internally managed? Yeah. Seven of our top 10 largest markets are all internalized. We have to manage everything in the portfolio, of course, but there's a few markets where we partner with hospital systems who have a real estate team directly, and we treat them exactly like part of our partner or a development partner that has lifelong relationships in the market. We work just hand in hand with them almost as if they're part of the DOC team, but technically it's not internally managed. Seven of our top 10 largest markets today. Okay. I appreciate it. That's all I have. Thanks. Thank you, Dan. This does conclude our question- and- answer session. I would like to turn the conference back over to management for closing remarks. Thank you again for joining us today. We really appreciate the questions and dialogue. Please follow up with Jeff and Mike, you got any other questions. We do encourage you all to get vaccinated. We're starting to move back into the office ourselves. Stay safe. We hope to see everyone at the conferences this fall. Thank you. Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.