John Gottfried: Yes, so I think Craig, we are seeing, as Ken talked about the, just the really, the recovery that we saw in the street and urban markets. So, I think that’s a big, big piece of it. And then Sprinkle throughout including our suburban, we’re seeing that filling up nicely as well, so kind of if you have any room, but we’re seeing in a small shop, but that is an element where we do see further growth coming from there.
Ken Bernstein: Yes. Without getting into the particulars of how we define small shop vis-Ã -vis our street and our suburban. The two things I already mentioned in our prepared remarks that I think it’s important that the investment community understand is, first of all, the secular shift that online shopping as opposed to physical stores is continuing to drive tenant demand, especially for important admission critical locations. And so, it may show up in the small shop data, it’s going to show up in the junior anchor and the anchor data as well. And I think you should expect to see that notwithstanding whatever speed bumps in the economy are existing. And the second point then is, in terms of good news being bad news, from our retailer’s perspective, when they see strong January sales, they’re not complaining much.
So, far the consumer showing up, not perfectly, not everywhere, but the consumer’s still showing up and tenants are still shining leases. And my sense is that’s going to continue in less things unless the data gets consistently worse than what we’re seeing right now. So whether it’s small shop or otherwise expect to see that momentum. Final point though is if we hit a hard recession, what we’ve historically seen is our small shop is the first two weaken. So, that’s certainly an area we should continue to watch because our smaller mom and pop retailers are often more fragile. But so far we’re not seeing any signs of that.
Craig Schmidt: And then in terms of the transaction market, how long do you think it’s going to take before we see the new normal and a meeting of good and ask on retail assets?
Ken Bernstein: So I think we’re getting closer. And again, let’s start with the secular shifts. Retail was an out of favor asset class heading into COVID due to the retail Armageddon and investors had other areas of focus, and what we’re beginning to see is the investment community saying, you know what, there’s other asset classes we’re now more worried about, and retail has actually proven itself getting through the COVID storm through some other recession. Physical bricks-and-mortar retail feels like a better investment. So that’s a positive. And then just as you saw that momentum starting there was the huge shock to the capital markets in terms of interest rates. What I would argue is for more stable asset classes in retail now is heading back to that, we should stay more focused on 5 and 10 year borrowing costs, then short term.
There will remain very limited new development which is dependent on short-term interest rates and much more will be stabilized retail with superior growth to other asset classes. So I expect institutional capital to start gravitating towards that. Now, Craig, I’ll defer to you and Economist as to where borrowing costs will end up over a 5 or 10 year fixed rate period. But we’re starting to see spreads come in. I think, you can have some level of confidence that once we get through whatever 2023 has in store, you will see a normalization of spread. And then there are a lot of smart people who are debating weather. The 10-year treasury is going to be with a three handle or a four handle. Again, I’ll let them defer or I’ll defer to them on that.
