Bob Barton: Yes Todd, thanks for the question. I don’t think it’s changed since our last call. I mean, we have the ability to either write a check for the July maturity or draw on the line of credit. There’s nothing outstanding on the line of credit as we speak. I think one logical scenario would be is to draw down on the line of credit for $100 million and then push that out. And then again we’re looking at the rates weekly and we have the ability to put together up $425 million or $525 million and take out either a five-year or 10-year treasury. But we’re taking a look at that. A lot of that’s already been priced into our future modeling. So I mean, I think we’re okay. We’re not concerned about it. I think from the big picture, we’re in pretty good shape. I mean, everybody that goes through a refinance in 2025 or 2024, 2025, is going to – it’s going to be an increase in interest expense, but we’ve already modeled most of that.
Ernest Rady: That’s a good question. Thanks, Todd.
Todd Thomas: All right. Great. Thank you.
Operator: The next question will come from Haendel St. Juste with Mizuho. Please go ahead.
Ernest Rady: Good morning, Haendel.
Ravi Vaidya: Hi, good morning. Hey, good morning. This is Ravi Vaidya on the line for Haendel. Hope you guys are doing well here. I just wanted to ask about the office leasing. It’s kind of interesting where we noticed that the renewal TIs are greater than the new lease TIs. Is this something that you expect to continue? We’ve just seen the opposite happen with retail leases within your portfolio, within your period. So just wanted to follow up on that.
Bob Barton: It’s a good question, and there’s a good answer to it. Many of these renewals, these tenants have been in their spaces for 20 plus years and with very little update TI spent along the way. In fact, one of the tenants we renewed, California Bank & Trust. The total contribution over, I think, a 20 year period was $38 a foot. So when it came time to renew them for 10 years, it was essentially a new lease where they had to move out. We provided swing space for them and they gutted the space and completely rebuilt it. We gave them $10 a foot per year or $100 a foot in allowance. They spent another, was it $150 to $250 of their own money to outfit the space. And we got a premium rent for the deal. So the deal penciled all day long, but so we’re small enough that you have three or four of those in a quarter.
It’s going to escalate the weighted average TIs for that period. On the flip side, we just did a new lease with a tenant that I just talked about, a 10,000 footer where the TIs were built out seven years ago. But they were so well done that our contribution to a new seven-year lease is less than $10 a foot. So you got to look at it case by case. You can’t really read it as a trend and just depends on the vintage, the quality of the space that’s being approved.
Ravi Vaidya: Got it. That’s helpful.
Ernest Rady: Information is a factor in the [indiscernible] for sure. Oh, no questions. Costs are up.
Ravi Vaidya: Totally. Just one more here. How are you thinking about the Series F note that’s coming due later this summer? And I guess like not saying that you would necessarily, I know you mentioned that you’re going to draw down the revolver and you have some different options here, but what do you estimate your cost of incremental new 10 year money to be today?
Bob Barton: Well, Ravi, it’s a good question. I think we just answered that with another research analyst. But yes, we’ll – for the maturity coming up in July, likely we’ll draw on the line of credit. We have nothing outstanding today on it, and we have still have $100 million plus in cash on the balance sheet. So I think overall we’re in pretty good shape. I mean, I think if you look at it, the short term cost is, you’re going to put a spread on the line of credit. You’ll probably be in the 6% neighborhood, but then longer when you come to the refinance of other debt that matures in the first quarter, first and second quarter of 2025, likely we’ll approach the market with either a five year or 10 year or something that’s appropriate that we’ll discuss at the board.
And we have a history of getting the best rate at the bet [ph], during whatever time we’re in. I can’t tell you what that will be. It fluctuates. We see so much volatility in the last four months of the year. But I can tell you we’ll do the best we can in terms of refinancing those debt maturities, and we’ve already modeled that into our 2025 and 2026. So we’re comfortable where we are. Obviously, we’d like the interest rates to be lower, but we’re as good shape as anybody else.
Ernest Rady: And if interest rates stay high, and then create opportunities for us that we visualize the uncertainty in the world, we live in today is really significant. Thanks for the question.
