John Albright: Yeah, I mean, we’re seeing people with actually a fair amount of capital starting to become more productive on the acquisition side. I think the view is they’re sitting on capital. They’re not seeing a lot of movement in the market and they basically would rather deploy now rather than see if another quarter goes by and if things change. So I think you are starting to see people step out of the sidelines and be more active. On the 1031 side, to my surprise, if you have something below $5 million, you’re still seeing a very productive 1031 market. I was talking to a developer yesterday that if you’re under $3 million, they have some restaurant pad sites that they’re selling sub 5% caps with a non-IG. So if you have properties below $3 million, you’re really seeing a very efficient 1031 market still.
And then if you’re basically dealing with the [indiscernible] that are a little bit larger, those are still kind of 5% cap plus or minus. So it’s amazing how sticky that sector has been.
Rob Stevenson : All right, and then last one for me, where is the 1% vacancy? Where’s the vacant asset for you guys?
Lisa Vorakoun: Sure, so what that is really is a couple of our Mountain Express properties when we re-leased leased them, they came back in. And then we talked about, I think on the last call, we evicted our Boston market tenant. So that really makes up the delta there.
Rob Stevenson : And what’s the —
John Albright: So Rob, we’re pretty far along on getting the Mountain Expresses released.
Rob Stevenson : Okay.
John Albright: So you’ll see more kind of activity in the next, this quarter with regards to, some of that revenue starting to come online. And then as Lisa talked about, on the Boston market, we have a nice backfill opportunity that’s better credit and higher rent.
Rob Stevenson : Okay, that was going to be my next question. Thank you guys, appreciate the time, and have a great weekend.
John Albright: Sure, thank you. Appreciate it, Rob.
Operator: One moment for our next question. And our next question will be coming from Wes Golladay of Baird. Your line is open, Wes.
Wes Golladay: So, yeah, good morning, everyone. A quick question on the income statement, there’s a new line called other revenue. I think that’s tied to the revenue sharing agreement. Is that something that amortizes or is that just a one-time thing in the first quarter?
Lisa Vorakoun: Yeah, so really what that is, you’re going to see a consistent stream of revenue in that bucket from the revenue share for our $24 million portfolio that we’re managing the assets on, included in that number this quarter though is about $21,000 worth of one-time fees related to dispositions on sales under that loan. So you’ll see that number be consistent but probably call it between $60,000 and $75,000 a quarter.
Wes Golladay: Okay, thanks for that. And then can you talk about the acquisition versus disposition spread? Is that pretty consistent to how you were thinking at the beginning of the year?
John Albright: Yeah, well, I would say that some of the situations might be closer to flat because what we’re looking to do is sell some non-IG and be able to buy IG at similar cap rates or higher. So there will be a little bit of positive spread but not as much as you think as we’re basically high grading the portfolio at the same time but if we were simply going to non-IG, there would be some nice pickup in spread.
Wes Golladay: Yeah, and then regarding the Boston market tenant, do you have a sense of what the mark-to-market is on that lease?
John Albright: You know, I would say that on that, it’s I would say 20% on a mark-to-market from where the next tenant’s going.
Wes Golladay: Got it, thanks for the time.
John Albright: Sure.
Operator: One moment for our next question. And our next question will be coming from John Massocca of B. Reilly Securities. Your line is open, John.
John Massocca: Good morning. Let me kind of dig it in on the acquisition side of things a little bit more. How much of this more attractive acquisition environment is reflected in kind of the pipeline today or is it mostly just kind of initial stage deals you’re kind of seeing come across your desk? I’m just kind of thinking in terms of timing as to what we should kind of think about your acquisition volumes?
John Albright: Yeah, I would be conservative on that because we’re bidding on a lot but we’re bidding wide to see who has kind of loose hands, if you will, someone that really has the stress of some debt coming due or just cash flow issues, other places in the portfolio. So we don’t feel like we need to be in a mad rush. So I would push it to the third and fourth quarter for sure.
John Massocca: Okay, and then with your Walgreens assets, just kind of broad strokes, what’s kind of the remaining lease duration on those properties or that portfolio? I just know a lot of that came from that one big portfolio deal. So just was trying to think about how much term is still left on those, assets?
