Good morning, and welcome to Monmouth Real Estate Investment Corporation’s First Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. It is now my pleasure to introduce your host, Ms. Susan Jordan, Director of Investor Relations. Thank you, Ms. Jordan. You may begin.

Thank you very much, operator. In addition to the 10-Q that we filed with the SEC yesterday, we have filed an unaudited first quarter supplemental information presentation. This supplemental information presentation along with our 10-Q are available on the company’s website at mreic.com. I would like to remind everyone that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements that we make on this call are based on our current expectations and involve various risks and uncertainties. Although the company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurance that its expectations will be achieved. The risks and uncertainties that could cause actual results to differ materially from expectations are detailed in the company’s first quarter 2015 earnings release and filings with the Securities and Exchange Commission. The company disclaims any obligation to update its forward-looking statements. Having said that, I would like to introduce management with us today; Eugene Landy, Chairman; Kevin Miller, Chief Financial Officer; and Michael Landy, President and Chief Executive Officer. It is now my pleasure to turn the call over to Monmouth’s President and Chief Executive Officer, Michael Landy.

Thank you, Susan. Good morning, everyone and thanks for joining us. We are pleased to report our results for the first quarter ended December 31, 2014. It was a very productive quarter for Monmouth and represents an excellent start for fiscal 2015. During the quarter, we acquired five new Class A built-to-suit properties. These acquisitions contain a total of 1.2 million square feet and were purchased in an aggregate cost of $68.3 million. Two of the properties are net leased to FedEx Ground and the remaining three to Jim Beam Brands, Bunzl Distribution and BE Aerospace respectively. The lease terms range from 7 to 15 years with a weighted average term of 10.5 years. Because four of these five new acquisitions were negotiated well before these developments were completed, the returns we have been able to achieve are much more favorable than what is available in the industrial market today. The cap rates for these five acquisitions average 7.1% compared to the 5% to 6% cap rates that we currently see in the market for comparable properties. From a run-rate standpoint, we expect these five properties to generate a combined total of approximately $4.9 million in annual rent. We financed four of these properties with a total of $44.5 million in mortgage financing at an average interest rate of 4.75% and an average debt maturity of 11.5 years. At the end of the first quarter, our gross leasable area was approximately 12.4 million square feet representing an increase of 10% since our fiscal year end. Our portfolio now consists of 87 properties situated across 28 states. At quarter end, our property portfolio was 96.3% occupied, representing a 40 basis point increase over the prior quarter. Our weighted average lease maturity at quarter end was 7.1 years as compared with 6.8 years in the prior year period. Subsequent to quarter end, we leased up the remaining 127,000 square feet at our facility in St. Joseph, Missouri to Altec Industries. Altec is a leading provider of products and services to the electric utility and telecommunications industry. The 3-year lease is scheduled to commence on February 1 and will result in annual rent of approximately $350,000 or $2.75 per square foot. As a result Monmouth’s current occupancy rate is now 97.4%. In fiscal 2015, 6% of our gross leasable area representing six leases totaling approximately 780,000 square feet was scheduled to expire. I am pleased to report that all six of these leases have already been renewed. These renewed leases have an average term of 3.8 years and an average GAAP lease rate of $5.06 per square foot and a cash lease rate of $4.95 per square foot. This represents an increase of 6.3% on a straight line GAAP basis and an increase of 1% on a cash basis. I would like to thank Rick Molke, our Vice President of Asset Management and Allison Viscardi, our Senior Property Manager for helping us achieve 100% tenant retention rate for fiscal 2015. We are very excited about our best in class acquisition pipeline which grew over the quarter. We have entered into agreements to acquire a total of nine new built-to-suit properties containing 2.8 million total square feet representing $267 million in total acquisitions scheduled to close over the next seven quarters. Once again in keeping with our business model all of these future acquisitions consist of well located brand new built-to-suit projects currently under construction. These projects contain long-term net leases primarily to investment grade tenants. These properties are situated near major airports, major transportation hubs and manufacturing plants that are integral to the tenants operations. Approximately 68% of our acquisition pipeline consists of deals with FedEx, while the remaining 32% consists of leases with ULTA Cosmetics and Fragrances and UGN Inc. ULTA is the largest beauty retailer in the U.S. and UGN is the high end supplier to the automotive industry. The cap rates on these nine deals average 6.8% and have a weighted average lease maturity of 12.9 years. Subject to satisfactory due diligence, we anticipate closing these transactions upon completion and occupancy. We have already locked in very favorable financing for five of these acquisitions totaling 1.7 million square feet with an aggregate cost of $135 million. The combined financing terms for these five acquisitions consists of $90.5 million in proceeds representing 67% of total cost with weighted average debt maturity of 15 years and/or at a weighted average interest rate of 3.77%. This will result in a 16.1% return on equity for these five acquisitions. During the quarter, we completed a 62,000 square foot expansion of our building leases to NF&M International located in Monaca, Pennsylvania. This increased NF&M’s total space from 112,000 square feet to 174,000 square feet. This expansion was completed for a cost of approximately $4.5 million and resulted in a new 10-year lease which extended the current lease expiration date from September 30, 2018 to December 31, 2024. In addition, effective January 1 of this year, the expansion resulted in an increase in annual rent from $382,000 or $3.39 per square foot to $831,000 or $4.75 per square foot. Following numerous property expansions that we have done for FedEx over the past several years, we currently have three FedEx property expansions in progress consisting of two building expansions and one parking lot expansion. Total expansion costs are expected to be approximately $10 million. Upon completion of the three expansions annual rent will be increased by approximately $1.1 million. The two building expansions will provide 87,000 additional square feet and will result in a new 10-year lease extension from the date of completion for each building being expanded. With regards to the U.S. industrial property market, 2014 marks one of the strongest years in decades. Fourth quarter net absorption came in at 45 million square feet marking the second quarter in a row with over 40 million square feet of demand. In total, the industrial sector absorbed over 150 million square feet in 2014. The national average vacancy rate continues to come down and is currently 7.8% marking a new cyclical low. Average asking rents have continued to increase and are now at $5.28 per square foot, representing a 2.4% increase from 1 year ago. Following 6 years of very muted levels of new construction, new industrial development has been increasing recently with 128 million square feet currently under construction. The ISM Manufacturing Index has been in solid expansion mode for 6 years now. And with most economists calling for stronger GDP growth this year, demand for industrial space in the United States is expected to continue to strengthen. And now, Kevin will provide you with greater detail on our results for the first quarter of fiscal 2015.

Thank you, Michael. Core funds from operations for the first quarter of fiscal 2015 were $8.5 million or $0.15 per diluted share. This compares to core FFO for the same period 1 year ago of $6.7 million or $0.15 per diluted share. Excluding securities gains realized during the quarter, core FFO was $8.1 million or $0.14 per diluted share as compared to $6.6 million or $0.15 per diluted share 1 year ago. Adjusted funds from operations, or AFFO, which excludes securities gains or losses and excludes lease termination income, were $0.14 per diluted share for the quarter compared to $0.15 per diluted share in the prior year period. On a sequential basis, AFFO per share increased 17% over the prior quarter. Our per share results for the quarter reflect the possible impact of our recent equity offering completed in the second half of fiscal 2014 for which the proceeds from this offering are still being deployed. As a result of our substantial recent acquisition activity as well as our large acquisition pipeline, we anticipate continuing to meaningfully grow our AFFO per share going forward. Rental and reimbursement revenues for the quarter were $17.7 million compared to $15.7 million or an increase of 13% from the previous year. Net operating income, or NOI, which we define as a recurring rental and reimbursement revenues, less property taxes and operating expenses, was $14.7 million for the quarter, reflecting a 14% increase from the comparable period a year ago. Net income was $5.4 million for the first quarter compared to $4.3 million in the previous year’s first quarter, representing a 26% increase. With respect to our properties, end of period occupancy for the first quarter remains relatively unchanged at 96.3% as compared to 96.4% in the prior year period. Our average lease maturity as of the end of the quarter was 7.1 years as compared to 6.8 years, representing an increase of 4%. Our average annual rent per square foot was relatively unchanged at $5.45 as of the quarter end as compared to $5.43 1 year ago. As Michael mentioned, subsequent to quarter end, as a result of leasing up the remaining 127,000 square feet at our facility in St. Joseph, Missouri, our current occupancy rate is now 97.4%. As of the end of the quarter, our capital structure consisted of approximately $365 million in debt, of which $325 million was property level fixed rate mortgage debt and $40 million were loans payable. 94% of our debt is fixed rate with the weighted average interest rate of 5.2% as compared to 5.3% in the prior year period. We also have $111 million in perpetual preferred equity at quarter end. Combined with an equity market capitalization of $640 million, our total market capitalization was approximately $1.1 billion at quarter end. From a credit standpoint, we continue to be conservatively capitalized with net debt to total market capitalization at 31%, fixed charge coverage at 2.3 times and our net debt-to-EBITDA at 5.9 times for the quarter. From a liquidity standpoint, we ended the quarter with $15.3 million in cash and cash equivalents. We also had $25 million available from our credit facility as well as an additional $20 million potentially available from the accordion feature. In addition, we held $51.5 million in marketable REIT securities, representing 5.7% of our undepreciated assets. And now, let me turn it back to Michael before we open up the call for questions.

Thanks, Kevin. To summarize, following the substantial growth achieved in fiscal 2014, our first quarter represents continued progress on several fronts. From an acquisition standpoint over the recent quarter, we added 1.2 million square feet of new Class A industrial properties, all leased to very strong tenants. Our 12.4 million total rentable square feet represents a 16% increase over the prior year period and a 10% increase on a sequential basis. As Kevin mentioned, per share AFFO is up 17% from the prior quarter and the positive yield spreads we have generated on our recent transactions will result in continued per share earnings accretion as we benefit from the full run-rate effect. Our fiscal 2015 lease expirations have already all been renewed. Our 100% tenant retention rate for 2015 reflects the combination of the high-quality of our properties and the strong relationships we maintain with our tenants. Our recent acquisitions with the addition of Jim Beam, Bunzl and BE Aerospace have resulted in excellent new additions to our high-quality tenant base. Our major tenant, FedEx, has been performing exceptionally well and we are very pleased that they continue to expand at our existing locations. Looking forward and keeping with our business model, we have a 2.8 million square foot acquisition pipeline comprised of 9 new Class A built-to-suit buildings currently being developed in strong locations and all leased long-term primarily to investment grade tenants. We anticipate that these acquisitions will be coming online over the next 7 quarters. And lastly, as a result of leasing up 127,000 square feet of vacant space subsequent to quarter end, our occupancy rate is now a very strong 97.4% and again is reflective of the strength of our tenant base and the quality of our assets. The company remains very focused on continuing to deliver positive results and we look forward to building upon the substantial growth that has been achieved. We would now be happy to take your questions.

We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Paul Adornato of BMO Capital Markets. Paul Adornato Hi, good morning. Michael Landy Good morning. Paul Adornato Mike, for sometime now you have made the point and rightly so that the deals that are being closed today were negotiated perhaps 18 months ago or so. And so there is a positive arbitrage in terms of the pricing. How much longer should we expect that positive arbitrage to continue? Is it starting – are you starting to get closer to market? Michael Landy Well, there is always going to be a positive arbitrage in that. You have to get compensated for taking the uncertainty between on the spot cap rates and where they are going to be 12 to 18 months into the future. So, cap rates today are sub 6%, but no developers can expect you to on average paid sub 6% for something that’s not going to be income producing for 12 to 18 months. Now, what’s been fortunate is cap rates have continued to compress and interest rates have continued to come down and so we benefited from that. It could have gone the other way, where we locked in, in the most recent tranche 7.1% cap rates and instead of falling to sub 6%, they could have risen theoretically above 7.1% and then it wouldn’t have looked so good. But you do have to get compensated to answer your question and so there is going to be a risk premium over the on the spot cap rates for forward commitments. Paul Adornato Okay, great. And you mentioned also that supply and demand in industrial has been favorable in terms of the landlord’s perspective for sometime yet new construction is starting to increase? I was wondering if you could give us kind of the long-term perspective and maybe talk about periods when there has been an oversupply of industrial space looking back into your history and how does the built-to-suit markets perform during those periods? Michael Landy Sure, Paul. Well, historically, industrial is the quickest to develop from inception to completion. It’s a 12-month to 18-month cycle of development. So, it’s very responsive to economic changes. If the economy goes into recession, they quickly as you saw it in the great recession new construction comes to a complete standstill. As economic growth returns, new construction ramps up and it’s just really starting to ramp up to where it’s even close to the obsolescence factor of 1% of in-place inventory, which would be about 150 million square feet of new construction. So, it’s not quite there yet. But part of your question is alluding to the fact that developers have historically overdeveloped resulting in higher vacancy rates and falling rents, I think the big catalyst that’s changed when looking forward is online shopping. Much of the demand for industrial space is now retailers becoming e-tailers, and that wasn’t the case looking backwards. So, past trends don’t really apply, now that we are in the Internet Century with over 60 trillion unique websites. And a website is a form of real estate. And so retailers instead of going out, investing in brick-and-mortar stores like they historically have done are now allocating capital towards e-commerce and that’s a big catalyst that’s going to change. So, I think a lot of the past trends aren’t going to be so relevant going forward. Paul Adornato Okay, thanks. And maybe just one follow-up to that, looking at the retail sector, one thing that we have learned is that for retailers to compete effectively in terms of omni-channel, they need to have one integrated inventory system. Does that imply less warehouse space? Michael Landy No, conversely, it implies less brick-and-mortar retail space and more warehouse space. What you are seeing, it wasn’t long ago, if you look at the shopping center and mall REITs where the big focus was gaining scale and scale would give you greater leverage with the major brands and world domination etcetera. Today, they are spending off portfolios. They are even spending off entire REITs. And that’s what I am talking about, about the Internet Century. They see the headwind they are facing and that headwind is a tailwind for industrial. We are benefiting from it. There is tremendous demand from retailers. And the retailers are really concerned about getting goods to the consumers as fast as possible and that’s driving demand towards FedEx locations. They need to be near FedEx locations. And some of the deals in our pipeline are fulfillment centers, e-commerce fulfillment centers that are situated right near FedEx facilities that we own. So, there is a lot of synergistic benefits. FedEx has been great in seeing this emerging trend and getting out ahead of the curve. And we would like to think we have been pretty forward-looking as well. Paul Adornato Okay, thank you so much. Michael Landy You’re welcome.

Our next question will come from Craig Kucera of Wunderlich Securities. Craig Kucera Hi, good morning guys. Michael Landy Good morning, Craig. Craig Kucera I wanted to know if you could give a little bit more granularity on the timing of acquisition closings this year sort of as you look at where your various – where things are at as far as construction and when do you think you might actually be able to close them? Michael Landy Sure, Craig. Well, the first quarter was very productive and busy quarter with the five acquisitions about $65 million in acquisitions. Looking forward, our pipeline consists of 9 transactions, $267 million in deals and I do think in – we are in our second quarter, it ends on March 31, so already in the second month of our second quarter. And I anticipate before this quarter is over closing 2 to 3 transactions. And then so the remaining 6 to 7 transactions will be spread out ratably over the next 6 to 7 quarters after that, but I do anticipate some more activity this quarter and when we report back after our second quarter, I could give you a more precise answer with the remaining 6 or 7 transactions. Craig Kucera Got it. Michael Landy Just one point, they are all new constructions currently at various stages of development. So, it’s not a question of if, it’s a question of when. And like I said over the next 6, 7 quarters, we will be completing $267 million in acquisitions. Craig Kucera Got it. That makes sense. I appreciate the color. When we think about this year with your SG&A, I think your SG&A for last year was up $80 million, maybe 15% for the year, how do you think about this year, is that sort of a similar kind of lift this year or is it going to be a little bit less growth in general and administrative? Michael Landy Well, G&A is running at a rate of under $6 million, it’s about 7% rounding up of revenue. There is – some of our peers on an annual basis, our G&A doesn’t even equal a quarter of their G&A. So proportionately, we are not that much smaller. We are smaller, but not that much smaller. So our G&A is very efficient. The company has been outperforming. We continue to generate outperformance. The people here are very focused on driving long-term results. We have got a team of missionaries, not a group of mercenaries. They really are working hard to develop long-term value. But as we continue to generate output, we need to get compensated accordingly and it’s only fair. Craig Kucera Okay, fair enough. With the expansion agreements that you have with FedEx, I think it’s about $10 million should add about I think $1.1 million annually in revenue. Do you think those will be completed this year or some of those going to extend into the fiscal year ‘16? Michael Landy I will let Kevin to take that. I will jump in if I need to add anything. Kevin Miller So, yes Craig. Yes, of the $10 million expansion, we expect all three of those expansions to be completed during this fiscal year ended September 2015. Craig Kucera And as you sort of survey your tenant base, do you find or anticipate other opportunities and what kind of – what’s the size of that in your estimation? Kevin Miller Do you mean, as far as other expansions besides the three that we have locked in? Craig Kucera Yes, yes. Kevin Miller Well, look as – just based on past history, we have had a lot of expansions lately and we have three in the pipeline. And as these tenants especially FedEx continues to grow and they need more space, we hope to expect that they are going to need more expansions as well. We don’t know if it’s going to be as great it has been this last year, which was unusually large. We have had a lot of expansions this last year. But just based on what we have in the pipeline now and just the growth of e-commerce going forward, we hope to expect to continue to see that. Michael Landy Yes, just to jump in, Craig. Last year we had seven FedEx expansions completed about $23 million in expansions and three going on right now. You never know when you will get a call for additional expansions. We completed a non-FedEx expansion. Rent will be commencing, I think, it will commence in January as I mentioned. And that’s a large asset in the Pittsburgh MSA. It’s on the Ohio River. It’s not far from the Pittsburgh airport, and that was a large expansion for a non-FedEx tenant. And as Kevin mentioned due to e-commerce, other non-FedEx tenants are considering expansions, but until we have a signed lease, there is nothing to report in addition to the three FedEx expansions currently ongoing. Craig Kucera Okay. And speaking of e-commerce, there has been some discussion with RadioShack, probably filing for bankruptcy that Amazon might take some of that real estate and have some store fronts, how do you think that impacts the e-commerce model and does that impact, how FedEx is utilized as far as making that last sort of mile or two of sort of driving to the ultimate consumer? Michael Landy Well, Amazon having a brick-and-mortar presence, it makes a lot of sense, because when people shop online, the percentage of goods that get returned are much greater than traditional brick-and-mortar sales. People order more sizes, more colors because they are not there to try it on and then they ship back that which they don’t want. So for Amazon to have brick-and-motor land where people can return goods, makes a ton of sense, it’s why FedEx announced they are acquiring a company called Genco. You cannot take a FedEx distribution facility and handle returns. FedEx – assets we have with FedEx it’s all about speed, getting the goods in and out to the consumer as fast as possible. Genco is one of the world leaders in reverse logistics, handling the returns, you have to unpack the goods, you have to test the goods, you have to repack and restock them, and it’s completely inefficient for Amazon or FedEx to do that at their fulfillment centers or their distribution centers respectively. So that’s why Amazon needs to have outlet centers, and that’s why FedEx acquired Genco. And it’s just ramping up to handle the tremendous growth. Online shopping is here to stay and these are just in that direction. Craig Kucera Okay. And this kind of goes back to one of Paul’s questions on the built-to-suit market if we are in a different environment, things slowdown or interest rates pickup. How are you structuring these transactions, are you having any sort of an option to buy where you bought some money hard or are you pretty much locked in on these deals to sort of perform on that regardless of what sort of interest rate or cap rate environment we are at? Michael Landy The latter, we give the developers certainty of execution. We lock in and that’s the value we bring to the equation that we take the future interest rate risk, the future cap rate risk off their shoulders. And we are happy to do that. They do a great job developing these buildings and they make a well deserve profit. But we need to give them certainty and that’s what we provide. Craig Kucera Okay, great. I will go back in the queue. I appreciate it.

And next we have a question from Jon Petersen of Monmouth [MLV & Company]. Jon Petersen Great. Thank you. A question for Kevin, I noticed you talked about the secured financing on the acquisition with 15-year leases I am sorry 15-year maturity, can you give thoughts on why you are going so long is that match up against the lease maturities of that finance? Kevin Miller Yes. That’s correct. So I assume you are talking about what we have locked in the pipeline thus far. Jon Petersen Yes, exactly. Kevin Miller Right. So of the nine acquisitions in our pipeline we have locked in on financing on five of those. And they have 15-year leases so we match up the lease term with the long-term. And of those as Michael pointed out in the prepared remarks, it’s $90 million in loans against $135 million in property at a weighted average interest rate of 3.77%. Jon Petersen Okay, got it. And then I am just curious what the – relative to what you did here with those five properties and how the market looks today, obviously the 10-year has been falling down to 1.8% today, do you think you could do lower than that on the remaining five properties and are you kind of rushing to get those done as quickly as possible? Kevin Miller Well, you are correct that our interest rates are still low and we want to try to lock-in as many as we can. But as we mentioned these nine acquisitions, they are closing over the next seven quarters with the exception of a two or three which will probably close this quarter. And a lot – it’s very hard to lock in financing that far into the future. We hope that we will be able to and we try to lock-in as soon as we can to lock-in these lower rates. But I don’t know if we are going to be able to keep these five at the 3.77%, I am not sure if I am going to be able to maintain that for the remaining acquisitions in the pipeline. Michael Landy Yes. The spreads are over 300 basis points on that tranche. It’s a pretty big tranche. So we are really happy to lock-in over 300 basis points spreads on $95 million in financing. Jon Petersen Yes. It’s fantastic. I am curious – sorry go ahead, I was going to say if you did it today would it be less than 3.77%, if you were able to? Michael Landy A lot of banks they put floors and they really don’t want to lend that much less than that. And there are a few that I have gotten included in that 3.77%. There is some that are a little lower than the 3.7% and some that are little higher. So there are a few banks depending on where the acquisition is depending on the market we can get lower than that. And depending on where the market is it might be higher than that. So that’s the weighted average amount. And like I said before if rates were to continue to drop which [indiscernible]. The banks do have a floor where they don’t want to really lend less than that because they know rates are not going to stay that low for ever. Jon Petersen Yes. That’s fair. And then Mike, just curious with your – since you guys are unique and that you have a securities portfolio, I am just curious what your thoughts are with the REIT stock prices and how much they have run recently and what your strategy is with how at least relatively expensive the REITs look to how they looked in the past? Michael Landy Alright. Well, I am going to go first and answer that. Then I will turn it over to Gene, he is a little more bullish than I am but… Jon Petersen Okay. Michael Landy My sense is these multiples historic forward AFFO multiple is about 0.16 times. Today you have reached trading in the high-20s, in some cases 30 times forward AFFO. And they need to grow into these multiples. Those are substantial multiples and REITs would generate good earnings growth, but the average yield right now is 3.5% and Monmouth is yielding rounding down 5%. So I think it’s hard to find value in the broad REIT sector. I think if you want a 50% given an increase, we could rotate out of the 3.5% yielding companies into Monmouth and overnight you just got a 50% dividend increase, but it’s hard to find value broadly speaking in the REIT world. There are some exceptions. And I will turn it over to Gene. Eugene Landy Obviously, we are happy with the portfolio. If we weren’t happy with the portfolio, we would be decent [ph]. The portfolio breaks down into two parts. The preferred shares provide us with a very healthy current return and gives the company liquidity. So, we maintain the $20 million, $25 million in preferreds to give the company liquidity and the cash that we can use if we have demand from properties and we can reduce the size of the portfolio. We are very happy with always maintaining $20 million, $30 million, $40 million in preferreds that currently yield about 7%, which is excellent in this market. On the comments part of it, we are strong believers that REIT too a good investment, NAREIT has done studies 20, 30-year studies and they show that investment in REIT stocks perform as well or better than owning properties directly. So, we are able to buy some REIT shares and get higher returns buying the REIT shares than properties. The cap rates now are sub 7%. And so to get $1 million worth of earnings, you have to pay $15 million, $16 million. We think we can still find a few REIT shares, where we are buying them at 10 times earnings. So, you buy $1 million worth of earnings with $10 million instead of paying $15 million, the expression is that real estate in some cases is cheaper on Wall Street than on Main Street. So, we maintain a portfolio, but we do it with some diversification for the economic reason I just stated, but always the prime reason that the Monmouth REIT maintains a securities portfolio is liquidity. It gives the company an added measure of liquidity and we are very proud of the results today. We think our future results will be good and it gives us liquidity against some adverse future events that we can’t predict. Michael Landy One thing just to jump in to add, we keep our portfolio at a bandwidth between 5% and 10% of undepreciated assets and right now it’s just under 6% of undepreciated assets. And so it’s on the low end of the bandwidth, so should a buying opportunity arise, where you see compelling value discount to Main Street valuations, we will take the advantage of increasing the portfolio. But right now, it’s at pretty low levels. Jon Petersen Yes, got it. Thanks for the insight. Congrats on the good quarter. Michael Landy Thank you.

Our next question comes from Michael Boulegeris of Boulegeris Investments. Michael Boulegeris Thank you and good morning. And certainly we appreciate the consistency of strong execution and a stellar quarter at Monmouth that we are seeing today. Michael Landy Thank you, Mike. Michael Boulegeris I wondered if you or Gene or Michael or Gene could comment on if you have any updated thoughts on the expansion of the Panama Canal and how that might impact Monmouth portfolio in the coming years? Michael Landy Sure. Gene was just there, so I am going to turn it over to Gene. But first I want to say FedEx’s recent call, they talked about and you should have listened to it, but they talked about how one of the big stories this holiday season was the disruption on the West Coast ports and how goods that should have been cleared through the ports in days were held up for weeks. And there is lot of labor strikes going on out there and this has been going on for years. And the Panama Canal is the answer to all that. Retailers need to know that goods are going to be in a certain place at a certain time and they can’t be bottlenecked and beholden to labor disruptions. And so having an array of assets in the Gulf region and up to Eastern seaboard is already benefiting. East Coast shipping container traffic growth is up 12% since 2007, whereas West Coast shipping container growth over that period is down 4%. So, already people are ramping up and changing their global supply chains in anticipation of the canal. The canal is coming online in ‘16 and the benefits will be felt for decades. Do you want to add to that? Eugene Landy Quickly, because we can talk for hours about it, it’s one of the changes that is occurring in the emerging economy that people don’t appreciate the magnitude and scale that’s involved. It’s reducing the cost of transporting goods to larger ships. You doubled the size of the ship and you only increased the fuel cost by 50% and you don’t increase the other cost of running the ship by the same thing. So, it’s going to be much cheaper to ship from Asia and from other parts of world, because the canal will handle the ships that are substantially larger. And these ships will go to the – significantly higher percentage of them will go to Gulf Coast and the East Coast. And there will be some loss of trade on the West Coast. And the West Coast does 60% to 70% of our imports now. So, if you move 6%, 7%, 8% of traffic to the Gulf Coast and West Coast, the ports here are going to handle a larger volume. And I suggest you go to the ports and see where all this traffic is going to go. It is going to make a very – it’s going to be a good time to own industrial buildings on the East Coast and on the Gulf Coast, and that’s one other factors that we take into consideration when we are making investments, so that – we are long-term investors and we really think this is going to help our portfolio over the next 10 years. Michael Boulegeris Just one follow-up unrelated. Certainly the Beam acquisition in mid-December was a coup for Monmouth and to the extent possible, could you share with us how Monmouth is competing and winning in this very highly competitive environment and securing in this case a marquee acquisition of 600,000 square foot property? Michael Landy Well, I would have to be really careful there because it wasn’t long ago that people questioned our high FedEx concentration and some of those same people are wondering how to acquire FedEx’s portfolios today and so to let you in. I am happy to talk to you Mike, but online with recording and the transcript, all I will say is we have long-term relationships. And the Jim Beam deal was a great example. We are very selective and there is of all the capital out there and people are raising unlimited amounts and going on shopping sprees, where you are buying some transactions, you have to wonder what sort of deals do they veto? And we are being selective and we are growing one quality asset at a time. And the Jim Beam is a good example and the ULTA acquisition, which we will be closing soon, is a fulfillment center for e-commerce that will be shipping out of our new FedEx SmartPost at the Indianapolis International Airport. I think the track record of working with the merchant builder community, giving them certainty and just a long-term relationship of mutual respect and mutual profitability over the long-term is why they continued to do business with us. FedEx, there is not all $5 rents are equal, it’s better to get a $5 dollar rent from FedEx than a new unknown untested startup. And with FedEx, we would like to think they would rather pay Monmouth $5 dollars a square foot than another landlord $4 dollars a square foot because of the long-term relationships. So, it’s hard to answer how we win deals. Competition is fierce. We are not going to be as I said in the last call, setting any records for the lowest cap rate lyre in the market. But being small, we can generate meaningful growth without sacrificing our standards. Michael Boulegeris Well, that’s fair enough. And we appreciate that response. And lastly, my understanding is that Monmouth moved into new headquarter building, Kevin, could you just tell us is there – are there some material costs that we will continue to see related to that movement in the next quarter’s numbers or is that just all completed and nothing to further account for? Kevin Miller Yes, we actually moved right next door to our old office, so it wasn’t a hard move physically. And all the costs associated with that have already been capitalized and they will be amortized over the lease. And then they are not significant. It’s less than – less than $1 million I think about $600,000 in costs for the total move. And it really won’t have any impact on our earnings. Michael Boulegeris Great. Thank you. Michael Landy Thank you, Mike.

[Operator Instructions] I am showing no additional questions. We will conclude the question-and-answer session. I would like to turn the conference back over to Michael Landy for any closing remarks.

Well, just to follow-up on Mike’s last question, over the years we have been separating the two REITs, UMH Properties and Monmouth, there is no longer of shared employees. Now, they are separate real estates, separate leases. When we are small, it was efficient to have some overlap. And now the company is – each company is respectively grown to the size that they are completely independent and we are speaking to you from our new conference room and it’s a good sign over our 47-year history that we are now operating completely autonomously from UMH. Having said that, only other thing I would add is our new annual report, it’s now available. It’s hot off the presses. And if anybody is interested in receiving one, just contact Susan and we will FedEx one out to you if you haven’t already received one. With that, I would like to thank everyone for joining us on the call and for the continued support and interest in Monmouth. As always, Kevin, Gene and I are available for any follow-up questions and we look forward to reporting back to you after our second quarter. Thank you.

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