They have the liquidity, the balance sheets. The low-quality retailers are now faced with a stressed economic environment. They need whatever capital they can to shore up their balance sheet or frankly, offload their real estate.
Ki Bin Kim: And in terms of your balance sheet strategy, your leverage is at 4.4 times. How should we think about this as the year progresses? I’m curious if you would let the leverage kind of drift up here or keep it this way?
Joey Agree: Our leverage is definitely going to drift up. We ended pro forma for the settlement of the $552 million in equity at 12/31 at effectively 3.1 times leverage. Leverage is going to drift up to the 4 to 5 times targeted leverage range. We are not interested in the equity markets. We’re not coming back to the equity markets via regular way or the ATM anytime soon. We have the capital and the flexibility to execute on our strategy for this upcoming year. And we’re going to obviously drift leverage higher here to what we think is appropriate that 4 to 5 times.
Operator: And our next question comes from Tayo Okusanya from Credit Suisse.
Tayo Okusanya: I just wanted to follow-up on my buddy RJ’s question. Joey, again, part of your response to his question was who knows where the economy’s going, no one has a crystal ball. No one can call Miss Cleo, so to speak. But I’m just curious, in either economic scenario, how do you see — how do you kind of see agency is faring? Do you see yourself faring better if the economy continues to kind of do well and — or starts to improve? Or if the economy goes south and you start to see distressed opportunities, is that your time to pounce? Just curious how you’re kind of thinking about different economic scenarios and how ADC would do in each one?
Joey Agree: I appreciate the question. Obviously, with the caveat, the good news is bad news with economic data today. Look, I think we’re in a very unique position. We have a defensive portfolio, the most defensive, the defensive balance sheet, probably the most defensive, and we’re able to play offense. And so, we can play both sides of the ball here. So whether we see a significant deterioration in the underlying environment, this portfolio is going to perform the best. Now, if all of a sudden, what, there’s a soft landing and everything takes off again, we have the cost of capital, the balance sheet and the liquidity to execute. And so, we have — we’re in a very unique position. It’s hard, nearly impossible to poke a hole in this company through any single aspect today.
And that was strategic coming into this year, given all of those unknown factors that are out of our control. And so, it’s not time and I’ve said this repeatedly, and I apologize, not time to slam on the gas, and it’s not time for us to hold up the stop sign. Right now, we’re going to be disciplined and prudent, but if one of those two things happen, we’ll pivot. And we’ll pivot very quickly, just like we did during COVID, just like we did when we launched the acquisition platform. So, I think in both environments, we’re going to grow AFFO, we are going to grow our dividend, and this portfolio and balance sheet is going to be a focus.
Tayo Okusanya: That’s helpful. And then, Peter, could you talk a little bit about, again, how you’re — again I know you guys don’t give guidance, but in terms of just kind of credit and credit provisioning and how you kind of think about the impact to ’23 versus ’22. Could you just kind of walk us through that? And then, granted, you guys are massively IG, have barely seen any credit issues, but I don’t think you’ve seen any, but just kind of curious how you’re thinking about that.
