Mark Horgan: Well, I think I’d start with we continue to believe that our patients and this one here has been the right call, because we’re certainly seeing the market adjusts almost real time in the last quarter to really react to where the cost of capital is on a debt perspective basis. We have seen over the years that the REITs do lead the private market. We think from a timing perspective, that’s usually 6 months, where we’ve been in a very turbulent capital market environment in the last quarter or so. We saw a raise rise of 100 basis points and the market still is digesting what that means for pricing and where sellers are selling their expectations. What I would say is, you’re kind of seeing a bit of a buy/purchase market.
We’ve seen some very tight simple grocery-anchored trades in Southeast Texas, California. But where you’re clearly seeing the market adjust is the bigger deal market, say, about $100 million. Sellers there, owners there have been more realistic as to where they would need to price assets to trade. And we think that’s probably where the initial opportunities will come from a pricing perspective.
Craig Mailman: That’s helpful. And then just on the leasing front, spreads have been good. Just looking at capital, you guys are putting out some pretty tight. I’m just kind of curious to conversations going forward where the rates are and the cost of tenants to build out new space and buy inventory. Kind of what’s the push and pull between kind of you guys funding capital versus then maybe paying for it with higher rents, leasing spreads look better in the near-term or is it just net effectives have largely been unchanged and they’re just continuing to be strong.
Brian Finnegan: Yeah, we’ve always been cognizant of the capital that we’re putting into spaces and it’s one of the best practices that really came out of the pandemic when we were up against supply chain issues. Our operating teams led by Haig, have really partnered with tenant’s construction teams to really be a lot more efficient in the space. And a lot of these tenants weren’t necessarily doing this out of the goodness of their heart, right? They wanted to get stores open so they figured out how to use the existing bathrooms, they figured out how to use the existing facades. And so as we’ve seen more tenants be aggressive, say, in the Bed Bath & Beyond and Tuesday morning auctions, they’ve been able to utilize more existing spaces and be more efficient.
So that’s helped certainly on the cost side, and then, on the rent side, the competition for space is really driving that rent higher. And we have had instances, certainly, we have been impacted by costs in certain circumstances. We’ve been able to push that back on tenants or ultimately revise some of those scopes. So it’s something that our operating teams have really partnered with our leasing teams to focus on well and be as efficient as we can be. But costs are certainly always a consideration when we’re looking at deals.
James Taylor: One of the benefits of a larger platform like ours is that we’re doing several deals a year with these tenants. So there’s trust in terms of what we’re going to deliver. And that goes a long way in the negotiation of how much capital will be required.
Craig Mailman: I think maybe I could flip one more for Angela. Do you anticipate we up in the swaps, or are you just going to burn off and let it float?
Angela Aman: Yeah, we’re evaluating the market opportunistically, continuing to keep an eye on where things are moving. We’re obviously in an environment where there’s been a fair amount of volatility. So we are hopeful that there’ll be an opportunistic window where we can execute, but we’ll continue to evaluate as we move forward.
Craig Mailman: Great. Thanks.
Operator: Next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead.
Caitlin Burrows: Hi, good morning, everyone. Maybe just on tenant decision timing, we definitely hear an industrial and office said uncertainties causing companies to slow their decision making. So it’s just wondering if you’re seeing that at all, like, are your tenants taking a little bit longer to decide what they need in signed deals?
