Shawn Tibbetts: I’m glad you asked the question. We did some work on that, hoping someone would ask that question. So Lou talked about WeWork, let’s talk about it net of WeWork because that’s a separate situation. Essentially, the total ABR is about $2.5 million. So for us, that’s obviously over the 11 tenants, we can handle that. We can manage that. We’ll see some successes there. And certainly, some folks may not make it. However, as I indicated, a significant majority of those spaces, at least the vacant spaces have the opportunity to kind of take up that slack. So we’re excited about the activity, both in the retail and the office, frankly, in our submarkets, and we feel good about being able to stabilize that if, in fact, it becomes an issue.
Wesley Golladay: And maybe just a little bit more context, when you look at the 11 tenants on the watch list, is that about normal for the portfolio, I guess, adjusted for the current size versus the prior years? Is it worse? Or is it better? Just some context on you are having 11 on the watch list.
Shawn Tibbetts: I think we’re pretty consistent with where we have been over the past few years. Certainly, folks come and go. Obviously, we took the Bed Bath numbers out of our numbers, it’s already removed. So we’re looking at tenants that on an individual basis or not consequential. But yes, I think in terms of the number, in terms of the size and the magnitude, that’s about where we are. And frankly, that’s about where we should be.
Louis Haddad: Yes. Wesley, just to follow up on that. The total value there is in line with what we reserve for bad debt on an annual basis. So it’s really not an issue there. And as I said much earlier, we’re going to make the right real estate decision. We’re just not interested in folks limping along at paying half rent. So hopefully, things will look up for those tenants. And if not, we’ll be moving on.
Operator: Our next question comes from [indiscernible] from Bank of America.
Unidentified Analyst: Just one follow-up on an earlier question. Can you expand a bit more on the new versus existing renter dynamics in your multifamily portfolio? And was the decline in occupancy this quarter more seasonal in nature? Or are you starting to see any changes in behavior there?
Louis Haddad: Yes, [indiscernible], again, I’ll let Shawn answer that specifically, but I do want to mention and part of the other side of the coin, we talk about our 98%, 99% occupancy across the portfolio. We fully expect that, over time, that we’ll be back in the mid-90s that those kinds of rates just aren’t sustainable just because of the inflow and outflow of tenants. So in terms of the decrease in occupancy in multifamily, somewhat is seasonal. But at the same time, we are not we are not programming in 98% leased for next year. We believe that things will go back to the center line. And again, of course, the trade-off is how much we were able to boost rents versus keeping the higher occupancy. Shawn?
Shawn Tibbetts: Yes. I think to add to that, the income is up, right, on an aggregate basis. And to Lou’s point, it’s very difficult to maintain 98%, 97% in some extend it’s inefficient in some ways to maintain that occupancy. We use — we take the emotion out and we use rent optimization software. And essentially, we are driving to the mid-90s in terms of occupancy, obviously, with an eye toward enhancing the NOI. We’re seeing the NOI continue to climb. The occupancy did dip. We would love to have that extra 1% back. We’re looking for ways to do that. But I think we’re pretty healthy now, and there’s the supply/demand kind of balance to ensure that we’re running the property as efficiently and frankly, as profitably as we can.
So I think we feel comfortable here. We haven’t really seen a dynamic shift other than a market macro. But again, you heard me say a second ago, we’re nearly 4% on trade out still in the last quarter, and that’s above where we were in the comparative quarter previously. So we feel good about the continued growth.
