Matthew Barnes-Smith: Yes. We are always monitoring those maturities. As you know, as we’re transitioning to this unsecured balance sheet, there are very, very limited prepayment penalties on those loans. At the right rates, of course, we would go ahead and refinance or extend those terms out as and when we could. We would love at some point as we have said to utilize our investment grade credit rating. The rates and the spreads on the treasury are still a little bit rich for our taste right now. But, yes, we will continue to monitor and at the appropriate time, we will take the appropriate action.
Camille Bonnel: Finally, the new leasing activity with retailers have been slowing over the past few quarters. We’ve been hearing that, retailers, though, are moving forward with their store opening plans. Just wanted to get more insight on what tenants are saying to you and are they prioritizing certain markets?
Louis Haddad: They certainly are prioritizing certain markets and again back to the growth markets. We really haven’t seen any kind of a slowdown in expectations. Remember, our portfolio is 95% leased. There just isn’t that much room to do a whole lot. The vacancies that Sean mentioned, we already have prospects for all of them, actually multiple prospects. We’re not seeing that. But again, we think that’s market specific. I’m not sure what’s happening in the rest of the country, but we’re seeing robust sales really across the board with the people that report sales. Sean, do you want to add to that?
Shawn Tibbetts: Yes. I would just add to that, that, generally speaking, those decisions are driven by rooftops in the immediate vicinity as well as foot traffic and I’m tying that back to well-located properties. Where our ecosystems are driving traffic, people want to be located and typically that’s where business is done. I think to Lou’s point, we’re seeing good activity. Yes to your point, Camille, we are seeing people actually signing up, which is a good thing, a little bit different than it was, say four years ago. And so, we feel good about that and looking forward to continued success in that space.
Operator: Your next question comes from the line of Bill Crow with Raymond James. Please go ahead.
Bill Crow: Good morning. Lou, just looking back through some old notes and I made it back to 2018 and I’m sure I could have gone back a little bit further. But during the last six years, we’ve been talking about uncomfortable levels of balance sheet leverage. During those six years, you had chances to issue equity at or certainly near $20 a share to sell assets, hit the pause button on new investments, mezz commitments, et cetera. Why are we still talking about the balance sheet? I get the dilution disdain, but I also see a stock price of sub $11 certainly reflects leverage levels that are higher than it should be. How do we — do we ever get it back down or is it just difficult to say no to good projects?
Louis Haddad: I appreciate the question, Bill. And also I want to clear up something that might have been a misunderstanding. Change in fair value of derivatives is excluded from our core results. This quarter, it was positive, last quarter, it was negative, which is exactly why we exclude it. I want to make sure nobody picks up the fact that we made some money or made some money on paper regarding a derivative. Bill, as far as your other question, I think we’re always going to be on the higher side of leverage. A company of our size that has the kind of development activity that we have is always going to be on the higher side, simply because the most efficient way to do development is with as much debt as possible. Ultimately, when those projects stabilize, you bring them online and you delever.
I think the short-term debt is a reality of the way we sit in the marketplace. We have delevered with $18 stock and $15 stock. We have sold assets at 4.15 cap rates and we’re going to continue to operate that strategy. Ultimately, with Matt’s plan of ultimately going into the preferred bond market, that leverage will come down to where we would like to see it in that 5.5x range. But again, that will simply be on our core portfolio because development is always going to be full leverage.
Bill Crow: Appreciate that. When do you think we can get to 5.5x? Is that two years, three? I mean, just give us a target to kind of think about.
Louis Haddad: I think you’re a couple of years out. Again, I mean, we need the macro economy to participate in that. You’d like to see some normalization of interest rates and spreads come in a little bit. But we’re used to the position — as I’ve said at the outset, we’re comfortable at these levels. As you probably recall, Bill, we’ve never gone below 93% occupancy. In a great recession in 2008, our portfolio went all the way down to 92%. That’s an all-time low. We don’t really have a lot of speculative income to be concerned about where the leverage sits. That said, obviously, the market would like to see it lower. We’d like to see it lower. We’re just not going to do it at any cost.
Operator: There are no further questions at this time. I would like to turn it back to Louis Haddad for closing remarks.
Louis Haddad: Thanks very much for your time and attention this morning. It’s been a great quarter and we look forward to another great quarter in just another couple of months. Take care and have a great day.
Operator: Thank you, presenters. Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
