Pure Cycle Corp (NASDAQ:PCYO) Q2 2020 Earnings Conference Call - Final Transcript
Apr 07, 2020 • 04:00 pm ET
Our first question comes from Elliot Knight of Knight Advisors. Sir, you may now ask your question.
Elliot, how are you?
I am well. Thank you very much. You haven't said anything on the call about the commercial. You've got 160 acres that you highlight there. Could you tell us what your plans are there and what the timetable, what timetable do you anticipate? Thank you.
Great question. So while I'm very excited about the residential component of that and that's kind of where a lot of my attention has been occupied, just solidifying those contracts with the builders, you're right, we have a very large commercial component to this property and commercial usually lags residential development. I would say we've gotten it significantly more interest this year than last year on our commercial piece but not really to the point where we have found the right opportunity yet. A lot of the interest, I would say 70% of the calls and the serious calls on it have been people that want to put it under contract and then they want to market to somebody who is actually going to develop and we have the flexibility to be able to go from our position to a direct user rather than having an intermediary in there, not that we're going to be building it or not that we think that we offer significant value independent of somebody that would say I want to buy five acres and then I want to bring a deal to Walmart or to Kroger. Certainly those are the opportunity to do that and if they have that type of structure, that's where we are interested. We look at commercial where it has opportunities for both retail and commercial. So you'll have a lot of employment base, it will have a lot of product offerings where you can get, you'll have the typical Walmart's targets, big-box stores, Home Depot's, the fast casuals on the restaurant side, sort of a mixed-use of really all different types of retail and commercial uses out there. And so we're looking at kind of the right model and each time we kind of configure our land plan, we're looking at some of the demographics that we have on that and what those demographics can bring to the type of retail or commercial player that's there. But I would say that still, if I scale this on saying on a one to 10, where I've got people building 10 would be I've got people building commercial installations out there and one being somebody made a call to us on it, I'd say we're at the three, four range on that. So I think we're still pretty early on that. I would expect that to pick up probably in the next 18 months as we get closer to the 500 homes that are under, that are occupied and we get a lot more traffic out at Sky Ranch where they can