NIC Chats

Tana Gall - Episode 11

National Investment Center for Seniors Housing & Care Season 1 Episode 11

Tana Gall, President of Merrill Gardens—a private, family-owned company based in Seattle, Washington—chats with Beth Mace about growing up in a town of just 324 people in eastern Washington to now running a company that operates 70 communities across 20 states in the U.S. Gall shares tactics that have helped keep costs down in their moderately priced communities, and how they’ve had success reducing staff turnover.

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Introduction:

Welcome to NIC Chats, ideas and inspiration from senior living leaders with host Beth Mace NIC's, chief economist and director of outreach. Get to know some of the people influencing senior living today and perhaps learn a thing or two from their experiences.

Beth Mace:

Hello and welcome to the 12th NIC Chats podcast. My name is Beth Mace and I am the chief economist and director of the research and analytics team here at NIC. Thank you so much for joining us today. The focus of the NIC Chats podcast is talking to interesting people that have ideas that I think you'd like to hear about the, as you listen today, I hope you can find some humor, some insights, maybe some inspiration, and hopefully what I call an aha moment when something pithy or insightful might be said and a light bulb might go off for you. So let me tell you a little bit about the structure of today's event. First, I'm gonna tell you three statements about my guest. Two of those will be true. And then throughout the podcast you'll learn, which is true and which is false. Second, there are three standard questions within each podcast for each speaker and the first will be what's a large challenge facing our industry. What's one thing that we can do to grow talent in our industry, and what's an innovative way or idea to strengthen our industry. Now, as they say on with the show. So I'm delighted that our NIC Chats podcast guest today is Tana Gall. Tana is the president of Merrill Gardens. Tana, thank you so much for joining us.

Tana Gall:

My pleasure.

Beth Mace:

So, as I mentioned, I have three statements about Tana. Two or true, and one is not. And you'll find out about these during the podcast. So one is Tana graduated from high school in a class with only 13 students, or do you think that Tana only lived in one state her entire life? Or do you think that whenever she visits a city, which she does a lot, that she does some type of a tour, an underground tour or a bus tour of that city to get to know it better. So with that, let me start for the podcast right now. So tell us a little bit about Merrill Gardens and your role there.

Tana Gall:

Sure. Thank you, Beth. And thanks again for having me today. So I'm the president of Merrill Gardens. For those of you who don't know, we're a private family owned company based in Seattle, Washington. Our parent company, the Art Merrill Company, has been around for over a hundred years. A lot of people don't know that, but we started as a timber company here in the Northwest.

Beth Mace:

That makes sense. In the Northwest.

Tana Gall:

Yeah, yeah. About 30 years ago, it branched off to become senior living and that was the start of Merrill Gardens. So today we operate about 70 communities across 20 states in the United States and our communities range everything from, we have some small standalone AL memory care up to, you know, 250 units of independent living, senior apartments, AL and memory care on a large campus. But I would say the majority of Merrill Gardens buildings would be about 150 units with independent living, mostly independent living about 65/70%, and then about 25/30% assisted living and memory care. So my role at the company's a little bit of everything. I oversee all the operations, I get to be involved in new business and what we do with new business. And I also try to do what I can in my role to support the industry as a whole.

Beth Mace:

Yeah, I know that for sure. Cause I see you at events and you speak a lot and you inspire. I can tell you inspire a lot of people. So I think one of the roles you missed was... Weren't you the head of the PPE shipping department for a while at Merrill.

Tana Gall:

I sure was. That was the other duties as assigned role of being the president of Merrill Gardens. At the beginning of the pandemic, when all of us were struggling to get PPE in we had ordered a large amount that was delivered to Seattle, to our corporate office. And at the time people weren't allowed to go into the offices. So that was my job, was to come in and package up boxes of PPE and send it out to the 70 different communities we had. And I was working with a guy here in my office and he said, you know what? You should just like, write a note and just tell people"Hi in the boxes. And I thought,"Well sure, Nick, whatever." But you know, what was really great about that? It was a good lesson in... It's the little things that matter. Because those just handwritten notes... And when I would say,"Dear Chateau, keep up the great work we're thinking about you." When I was able to start traveling again and I'd go out to the buildings, those notes would be on their bulletin board.

Beth Mace:

Oh really?

Tana Gall:

Yeah. I thought that was kind of funny. So yeah, I was head of shipping for a little bit here.

Beth Mace:

Oh, well, I can relate. I know in my life I've been a... You know, I can ship, I can paper clip things together. I can copy and I can staple. So it's my skillset myself. So you know, I'm very excited to watch you and your team create the True Word Brand. As you know, I led a project for NIC that provided a grant to NORC at the university of Chicago in 2019 to study the forgotten middle cohort. We examined the demographics of this group, its income, its health characteristics, and the True Word brand actually seems to be a true middle market product for older adults. Can you tell us about that and how you've gotten it to work?

Tana Gall:

Sure. First I'd like to kind of reference that the forgotten middle report that was done was really, really helpful to us. I think timing, it could not have been more perfect. I think serving the middle market has been something on the minds of a lot of people here at Merrill Gardens for many years, we've seen this demographic coming. It's not a huge surprise to us that there wasn't a lot of savings that were taking place. Like there is in today's current resident that lives with us. So we knew this was coming. And then when the forgotten middle report was released, it really did, I guess, add some validity to what we were thinking and what we wanted to do when we were creating this model. So we were able to do this by... Number one, we purchased about 25 communities that were, you know, a little bit older. I think average age of the communities is 25/26 years old. So for the most part, they're all purpose built senior living communities, but you know what, they've just have been around a long time and maybe not as valid as they were when they were built originally. And so we were able to purchase them at a little bit lower basis and then go in and re-look at how the operations were done. I think for many of us that have been doing this for 27 odd years, you know, as new competition would come into a market, we would take our existing building and just try to add more to it and add more it and add more to it, to create the value. And what we've done with Truewood is we've taken a look and said,"What really matters to people? What do people really want?" Is it all those bells and whistles, or is it something different? And so, as we were starting to create this concept for Truewood, we did some focus groups. Luckily we got them in literally, probably 30 days before the pandemic hit, but we got some really great information from family members and from actual seniors and then Washington State University did focus groups for us as well. And we were able to ask,"People if we were gonna provide this moderately priced product for the middle income, what would that look like? What do you have to have?" Because we wanna make sure we put those must haves into our operations. And then what are the things that are just not as important to you that you could find different ways to get?

Beth Mace:

So granite countertops, not important?

Tana Gall:

Wasn't as important to them. It wasn't as important to them as I would've thought it was years ago. And so we did, we learned a lot from it. We were also able to really educate people. One example I had was when we would say to... A lot of the family members would say transportation is very, very important that there's some form of transportation on the bus. When I would explain to the family members, you know, what the expense of running transportation is, they changed their mind a little bit. You know, when you tell them that the bus itself is about 80 to$90,000, and then we put insurance on the bus and then there's gas and there's a maintenance and there's a CDL driver. And when that CDL driver is driving the bus with 12 people in it, you've left a hundred people back in the community, not doing something. All of a sudden the importance of transportation took a little bit lesser step in what people wanted because we in Truewood find ways to get transportation, just not in the way we used to do it 25 years ago by putting be on a bus.

Beth Mace:

So what would be an example of that? Is like using Uber?

Tana Gall:

So it's using Uber, there's a couple of other Go Go Grandparent envoy. These are transportation companies that are doing transportation for our demographic. So for us, it's partnering with people like that, or even saying to the family you know, we're gonna need you to do some transportation for them. One of the things that you hear throughout when I talk about Truewood in our platform is partnership. It's creating really solid partnerships with all kinds of people. I'm amazed when you really look in our different markets, what type of senior transportation is already out there that people just... In Seattle, it's the access bus where you just need to call. It may not be at the drop of a hat, but if you plan ahead, the access bus will come get you for free. So there's a lot of ways to do it. We've just been so set in our ways for many years that it was finding out, you know, different ways to partner.

Beth Mace:

So what would be another partnership that you might have?

Tana Gall:

So one of the things we do well... Partnership, there's kind of the, the standard home health home care partnership, which is really vital. And I can talk about that when we talk about care too, but other partnerships might be a little less traditional. So one of the things that we have rolled out and we started rolling out is part of the paperwork when you move in a resident fills out a form that is called Truewood Sure Could. And on that form, we find out, you know, like who this resident is and what they used to do and what sort of access they have to potential partnerships for us. And so if we find out that a resident was a college professor or a high school teacher we may ask them to run a program for us. Would you teach a writing class or would you teach a class on poetry? If we find out a resident is a huge art collector, we may have them do programming for us on art. If they have a connection to you know... We've got a lot of partnerships with like local retail in the area. So a lot of our communities have started going to Trader Joe's and asking them for their flowers. You know, they don't keep their flowers all the time. So while their flowers still look great, they bring'em to our buildings and our residents put together our table decorations.

Beth Mace:

Wow. That's amazing.

Tana Gall:

All kinds of fun stuff.

:

Yeah. It's also really empowering your residents, taking advantage of a lot of the knowledge and the skills that they have and giving them purpose. And I know we've talked about that before, about the value of the importance of purpose for older people and you're showing it.

Tana Gall:

Absolutely. They wanna be asked to do some of those things and if they don't wanna do it, that's okay too. But I think just... What a great way to get them into the community and get to know people quickly too, and become a part of that, you know, vital part of the operation has been really successful for us too. And it's, you know, it's fun to find out kinda who they were and who they still are. They don't change. They still wanna do that stuff. It's been fun.

Beth Mace:

I know my mom, who's passed away now, used to always say,"I'm 90 years old in my body, but I still have the spirit and the heart of my 16 year old self.

Tana Gall:

I feel the same way.

Beth Mace:

Yeah. So let's talk a little bit about care. Cause I think you talked about the ability of having a lower cost basis, cuz you've been able to buy some of those physical assets; the brick and mortar, so to speak at a lesser price. So that's lowered your basis, but care is really important and so labor intensive. So how do you provide ample care at a cost e ffective way?

Tana Gall:

That has been you know, probably one of the most challenging pieces, because right now we're also in a really challenging labor market as well. So a couple of things that we look at: number one, we probably won't be providing the highest level of assisted living in our buildings. We will control our acuity so that we can kind of schedule appropriately the right number of people to work. So we probably won't be doing diabetic care where you need nursing around the clock. That doesn't make sense for a moderately priced product. We probably won't be doing you know, multiple person transfers just because, you know, we can't have that kind of staffing around the clock. We have done a lot with a cross training in our communities when it comes to labor. And so you know, one of the things you'll hear us talk about a lot or hear me talk about a lot is our Truewood rep, our resident experience partner. This is somebody who comes to work for us and maybe they've come to work... Maybe they were drawn to us because they wanted to be a front desk person or maybe they wanted to be a server. What we're able to do is find these people that are great at working with seniors and then cross train them and actually pay for them to become CNAs. And then ideally in our world, we pay for them to get their nursing degree and kind of go on that journey with them. But what we found that when it comes to care and every other department, having people that can do multiple jobs is probably the key to keeping your labor in control in a moderately priced community.

Beth Mace:

Is that a universal worker?

Tana Gall:

It is. But I think, you know, when I started doing this so many years ago, universal worker felt to me like it was somebody that was just like plugging a hole, because you couldn't figure out another way to get it done. You know, it didn't seem... Like we want the rep to be somebody that's on a career path with us. So they come in and they think"I'm gonna be a server," but our vision for them is that they could become so much more. So instead of just universal worker, it's somebody we see with a career in the industry.

Beth Mace:

And have you had success in doing that in the Truewood product?

Tana Gall:

We have! There's a community just up the street from where I am right now in Seattle. And we've had at least three people I know that have just done so well in the rep position. The first guy was a dishwasher and he just wasn't that excited about his job. I mean, he came in and he washed the dishes. And I think about that for somebody like me to go in and do the same job for six or seven hours would be hard. And so the GM saw something in him and said,"Hey, would you like to learn a little something more about our operation?" And he said,"Yeah." And so he has become a maintenance assistant for us. And the pride he has in his work has been really fun to watch because now he really cares about what it looks like when he walks in the building because he sees that maintenance side that maybe he wouldn't have seen if he was just coming in through the back door and just going to the kitchen and washing dishes. So we're getting a cross trained employee, which is great, but what's been really fun to watch is how engaged the team members are, on how much that has added satisfaction to their jobs, which really, you know, we wanna keep turnover at a minimum. And that's one way we're doing it.

Beth Mace:

I you know what we were talking before about like an aha moment or something insightful. I mean the idea that you've empowered this worker or you're empowering other staff, and then he's an example for other staff and then he can go out and he can talk about the opportunities that he's been presented at Truewood.

Tana Gall:

Absolutely.

Beth Mace:

So sort of word of mouth, especially this day and age is really important. I think, because we've been hearing so much about that quote"great resignation." And how people are leaving because they wanna find, you know, more purpose and more value in their lives. So that's pretty cool. And that their interaction with the residents then too... Because they see somebody who's going into maybe a unit and helping to change a light bulb or those kinds of things.

Tana Gall:

Yeah. Same thing. We had a server who, you know, liked being a server, but gave them exposure to memory care and didn't even realize how much passion they actually had for memory care. And now we've got them on a whole direction of doing caregiving in memory care and they started out as a server in a dining room. So there's been some really fun, great stories from it. And I think we will just see more and more and we're getting to the point now where that's really the position we're hiring is a rep. So very rarely are we hiring for just one specific position now. It's somebody who can come in and do all kinds of things because it helps us, but it also helps them. The more training you get within our community, the more money you make. And so it's a win-win for everybody.

Beth Mace:

That's fantastic. How about healthcare? Are you working with any Medicare advantage plans or are you... How do you work with healthcare for your residents?

Tana Gall:

Right now... Kind of the short answer to that is not yet. We are starting to look into that. So right now with healthcare, it's kind of specific to the community on what resources they have at their fingertips. And so we encourage it, you know, visiting physicians that are coming. In most all of our communities we do have home health offices in our communities that we're not running, but we outsource that to someone else. And so right now we're kind of in the phase of discovery of what do we want that next healthcare piece to look like in a partnership? So like I said, short answer is not yet.

Beth Mace:

Well you Truewood's brand has only been around for what? Not very long, right?

Tana Gall:

Oh, about eight months I think.

Beth Mace:

So I think we'll give you a pass that you haven't figured out everything quite yet.

Tana Gall:

Not quite, we're getting there, we're getting there,

Beth Mace:

It's so encouraging, I can't tell you how excited I am. Based on the forgotten middle and to actually see that you're walking a walk and talking the talk. So let me switch now we had three comments, three statements about you. And I wanna know is it true or not? Did you actually graduate in a class of 13 students?

Tana Gall:

I did. There were 13 kids in my class and I think 11 of the 13 of us went to school together from kindergarten to senior year.

Beth Mace:

Wow. Are you still friends?

Tana Gall:

Oh yeah, of course. Yeah. You're kind of like family at that point. I grew up in a small town in Eastern Washington with 324 people in the whole town.

Beth Mace:

Wow. So you can't like hide. You have to make sure you actually do your homework. You can't be in the back of the classroom.

Tana Gall:

That's exactly right.

Beth Mace:

Yeah. That's great. That's great. So let's switch a little bit, let's talk a little bit about how you got to where you are now as the president of Merrill and you've had a career in senior housing for some time. Any lessons that you want to share to someone who's thinking about coming into our industry or wants to make a change in the industry that you might want to share?

Tana Gall:

Sure. When I graduated from college, I really thought what I would do is become a counselor or go back to law school. That was my plan. My parents were in full support of that when I paid for it. So I thought I better get some work first. So, I got a job and I started working in an advertising agency. And so my job was marketing communications and PR and advertising and I loved it. I thought it was great. It was a fun, really fun to be as a, you know, 23 year o ld. I had a great time and was there for a few years and a woman I worked with at the agency had left and she went to sell outdoor advertising and she called on a company, Leisure Care. And they said to her,"We don't wanna buy any outdoor advertising, but we are looking for a person, you know, with some agency experience to come help us in our sales and marketing department. And so she called me and I had zero experience with senior living. I had never been in a community. This was 1994. So I knew nothing about it and what she said to me at least go meet the people. And so I did and I mean, hate to say it, but the rest is history. You know, the people in our industry are really amazing. I l ove the people there. I was able to kind of dive right into community life, trying to figure it all out. And I stayed at Leisure Care for 19 years and did just about everything while I was there. Worked in every department except accounting and really took great pride in opening buildings. That was one of my favorite things to do and then had the opportunity to move over to Merrill Gardens. And so I ran Merrill Gardens for a couple years and then had another opportunity to go have my own business. That was really important for me. So for a couple years Jason C hilders and I ran 2:10 Consulting and we consulted just in this business. Our main client was the Carlyle Group out of DC who was looking to acquire more senior living and I really enjoyed that. There was something about not being in the day t o d ay operation that I really missed. I really m issed that... Just being in the communities and being around a lot of people. And so, the position of CEO came openen at Blue Harbor Senior Living. And so I went to work there and had always stayed in touch with the folks at Merrill Mardens. Obviously, I love Merrill Gardens. I'm here and Bill Petted, I think is just one of the true geniuses in the business.

Beth Mace:

I agree. I agree.

Tana Gall:

And so he's always been a mentor and a friend to me, and so I kept in touch with him throughout my whole career. It just seemed like the right time to approach doing something different with the communities that we had at Blue Harbor. And so with a lot of conversations back and forth, I ultimately said,"Bill, would you consider buying Blue Harbor?" And he said,"Yes." There was a lot more words that between there. So we were able to create this just over two years ago. Two years ago in November where Merrill Gardens purchased Blue Harbor. And then that is what prompted the real estate sale of the new senior buildings to renew in a joint venture with Merrill Gardens. And so that's what brought me to where I'm at today. I've done, like I said, just about everything in the business. And even for that couple of years, when I left consult, I was still consulting in this business. But there, like I said, there was just something about that day to day operation that I really missed.

Beth Mace:

Being frontline you get to see the impact you're making, right. Cause the impact in this industry... When you actually walk through a building and you see that you can change the quality of life for an individual person as they're getting older? It's pretty good.

Tana Gall:

Absolutely. It's powerful. It's powerful to see the impact you can have on that. And then I also love the impact I have on families. They get to enjoy the time with their loved one who lives with us because they know they're in good hands. I like seeing how we can alleviate some of that stress and guilt that's on a family member too. So it's a impactful business that I wouldn't trade for the world.

Beth Mace:

Well, I think a lot of people are glad you won't trade it for the world either. That's great. So let's switch a little bit to industry perspective and we've already talked a little bit about ways to engage and recruit and retain staff. What else, in terms of the pandemic, what kind of a impact do you think that's gonna have on our industry broadly? Will it be long lasting or is it sort of in the rear view mirror?

Tana Gall:

I don't think it's in the rear view mirror. I think we'll always operate a little bit differently. For me, and I think a lot of companies sort of like ours... I will embrace the healthcare part of what we do a little more tightly than I did before. Not that we didn't know how to deal with neurovirus and flu outbreaks and things like that, but this really did shine a light on the importance of the healthcare aspect that we offer. And so I think, you know, that will always stick with us. The thing that I really liked the best was how cohesive our industry became through this and I don't think that will change. There probably wasn't a week in the last two years that I didn't pick up the phone and call one of my cohorts in the business where they're not my competitor, they're people doing what I'm doing, which is serving a great population. And, and I think that will continue.

Beth Mace:

That's interesting because I've heard that before I think in conversations. You might have a competitor, but it's kind of a friendly competition. You're not out to take each other down so to speak.

Tana Gall:

We were sharing everything. At the beginning when we were... You think back to, you know, the surveys we fill out today, when you walk into a community. When one person got it, and we shared it with other people, because we all wanted to get through this together. I love that kind of fellowship and I don't think that will go away.

Beth Mace:

Did you feel that you had that same fellowship with your capital partners via banks or equity partners as well? How did that work?

Tana Gall:

Absolutely. I was so thankful for the partners that I worked with because I felt like they were in it with me. I think, you know, the communication piece was really key to really kind of keep everybody in the loop of what was going on. There wasn't a single partner that I worked with that didn't see what we were going through and understand the importance of some of the decisions we were making, that we were making quite rapidly. Things like double time for overtime. We just started doing it right away. Gifting, sick leave to people. I would always keep my financial partners in the loop. There was never once that they said,"Are you sure you should do that?" They understood what we were going through and I felt incredibly supported by them.

Beth Mace:

Yeah. That's great to hear. So usually I ask three standard questions as well, and I think we've addressed some of them already, but lemme I'll try it anyway. So what's one of the largest challenges facing our industry. I think you're gonna say labor but in addition to labor, is there anything else that you think is particularly challenging right now for us?

Tana Gall:

Okay. If we take labor and put that aside, cause that's the biggest challenge. One of the challenges I think I'll have as we've kind of focused a lot of our conversation today on the forgotten middle. Education to get those people to understand that we've got a great product for them. So it's always been a challenge. Our penetration rate should be higher than 10% to me, everywhere. When I work with my teams on, you know, who's gonna live with us, I tell them to stop competing with the traditional retirement community. You are competing with the home, the mobile home, the trailer, the apartment where there is a, a single gentleman or a single lady who, you know, maybe widowed that is sitting home alone and maybe not eating as well as they should and are sort of bored. Maybe aren't really getting out to walk much. The highlight of their day might be going to the senior center or going to the mall. That's our competitor because they don't think they can afford what we have to offer. One of the challenges I see is getting that word out to them that no, we do have a great product for you and you can thrive in our environment, but they don't know that because in their heads it's$7,000 a month and that's not how it is. So I think that's gonna be a challenge for me, hopefully not for the long run, but at least for a while both in, you know, training our sales people on how to go out and find those people and letting those people know that we've got a great product for them.

Beth Mace:

So, that would wrap up into another question about an innovative way to strengthen our industry. So I guess getting the message out about what we do, how we can provide a pretty strong value proposition in terms of taking care of residents and sort of... I like to talk about as a carefree life in a sense you don't have to take care of your own laundry, which would be great, right? And a few other things as well. So how do we get that message out? Do we have a broad industry campaign on it? Is it word of mouth through our residents? Any ideas about that?

Tana Gall:

You know, I wish there could be a, you know... I think we've said it before, like the got milk campaign that was a lot easier to do for milk because it is a commodity and what we do is pretty specialized. So it's a little bit harder to do that kind of as an industry, but I think way we possibly can is the way we should. And for us as an industry, it's going after different segments. When you're doing your outreach it's gonna look different. We really haven't gone to senior centers before because we've never really thought of them as having the wherewithal to afford six to$8,000 a month, but that's exactly who can afford to live in the middle market communities that we've got. So I think that will be a part of it. Working with the healthcare world and just getting that message out as best we possibly can to let people know there's something for everyone. More than there ever was before.

Beth Mace:

Also acknowledging that we're part of the care continuum and seniors housing hasn't traditionally been considered that. So that's great. I think we've talked about this as well, but if you have another idea of how you can actually grow talent in our sector. You talked about the programs that you're having at Truewood to take, entry level workers and give them more responsibility.

Tana Gall:

I kinda look at it in a two-pronged way. So I put a lot of my extra effort into the college connections that we've got. I think they're very important. I think it's finding ways to get those recent college graduates that are interested in our industry into meaningful work within our communities. That's a huge opportunity for us, but I think equally important if not more so is getting into high schools, trade schools that still don't know about our industry. They're still quite surprised when they find out about this section of the industry and finding ways to really recruit from some of those places. We've got great general managers that came from trade schools or high school. It's doing more of that outreach.

Beth Mace:

So I would love to talk to you for like hours and hours. I don't have enough time and I'm so excited about the middle market. I keep saying it, but it is true because I work so long on the middle market and to see you guys doing it... You had mentioned that, I find this hard to believe, but that you had actually already lived in one state your whole life. Is that true?

Tana Gall:

It is true. I was born in Eastern Washington in that small town that I spoke of. And then I came to college at the University of Washington in Seattle. And although I've traveled to almost every state in the country, I have not ever not lived in Washington.

Beth Mace:

That's pretty remarkable. That's great. It is a beautiful place to live. Why would you wanna move somewhere else? That's right. So that would mean that when you actually go to these various states to go see your properties, do you take time to actually tour and learn about the city and do the underground tour and things like that?

Tana Gall:

That was my fib. I am terrible about that. When I go visit the cities we have communities in, I tend to just go to those communities and I don't get out as much as I probably should to see some of the high points in some of these great cities that I visit. I go to Philadelphia ton and I've still not ever seen the Rocky stairs or anything. I'm there a lot, so I need to go.

Beth Mace:

Well, you'll have to do that one because you get to like climb up. Get to the top and you get that victory.

Tana Gall:

I know.

Beth Mace:

So that's great. Well thank you so much. I really appreciate your time. And this has been really exciting and I think pretty informative too. So thank you very much, Tana.

Tana Gall:

Well thank you. It was my pleasure. Have a great night.