We’re actually seeing pretty good demand. How that all translates to pricing nuance we have to see how things play out during the course of the year.
Operator: Our next question comes from Bill Crow with Raymond James.
Bill Crow: Hey, good morning, Jerry. As you talk to your joint venture partners, do you sense an increased interest in selling assets rather than financing at today’s rate? Is there increased pressure? And I guess — the other part of that is what does it mean for future joint venture agreements?
Jerry Sweeney: Yes, Bill, good question. As we look at it, all these joint ventures we enter into on the operating side, really are really transitional financing strategies for us. So in the past, we’ve done a lot of joint ventures. We exited a lot of joint ventures and some of the joint ventures we have today are frankly kind of reaching the end of their targeted useful life for both parties. Certainly, we probably would have been more active on the JV front in the second half of ’22 if the capital markets have been more cooperative. But as we’re talking to all of our joint venture partners today, there on the operating side, every discussion includes is now a time to sell the assets is now time to sell one of the assets. What should we think about doing in terms of recharacterizing the platform.
So it was really based on a lot of those discussions, Bill, that we kind of put into our prepared comments that we do expect to recapitalize partially exit or exit a couple of those joint ventures during the course of ’23 whether that’s through a buy-sell mechanism where we sell our interest. We have a seven or eight property portfolio with one particular partner, and we sell two or three assets out of that, refinance out the balance. All those discussions are very active. And we’re blessed that a lot of our joint venture partners are really smart, too. They’re very smart operators. They understand the real estate business. They’re pragmatic. They understand the realities that we’re facing and trying to sell and refinance properties day. So all of the discussion with every partner is productive, constructively focused forward on how we maximize returns to both parties.
So we do think the first half of ’23 will be very interesting in terms of getting some of these financings done, but more importantly, developing a 12- to 36-month horizon on how we can actually recycle out of some of these operating joint ventures. Is that helpful?
Bill Crow: Yes, I think so. And then for either you or Tom — just curious, what of your West Coast peers cut their dividend but then implemented a share repurchase platform. And I’m just curious how you’re thinking about, given where your stock is trading, the implied cap rate, et cetera, kind of the trade-off there between a lower dividend but getting more active on the repurchase side?
Jerry Sweeney: Yes. Look, I think that — look, it’s a sound strategy that company is using. And I think our approach is let’s generate some surplus liquidity through selling assets, keep the return levels to our existing shareholders where it is. And as we certainly can generate excess liquidity through some asset sales as you — as we talk about some joint venture liquidations. As I mentioned in my comments, I think both share buybacks and debt buybacks of our longer-term debt are certainly on the table on a leverage-neutral basis. But we’re very focused on continuing to grow cash flow very focused on as part of that, reducing our overall leverage metrics to provide more capital flexibility. But there’s no question that both share and debt buybacks are on the table and Tom and I monitor that very carefully, really the driver there being how we view near-term source of liquidity to implement either one of those tactics.
