John Moragne: Yes, I think a point of clarification of that is that it’s in terms of trying to quantify where the dividend could theoretically go to, we basically said if these all happened today, what would the payout ratio look like. Obviously, the timing impact will mitigate a lot of that. And so once again, we’re back to the, I think point of clarity here that the timing, both on the disposition and the redeployment, will be the driving factor on a lot of the quantitative outcome each quarter here.
Ki Bin Kim: And just want to go back to the Red Lobster and Shutterfly comments. Should we expect some type of rent or asset value dilution as these assets transition to different owners possibly?
John Moragne: So the Red Lobster, we’re working with them as they try to find a new home for their stake, Thai Union being them. That has not come up yet, that’s not something that we’re interested in. There’s good value in the real estate that we own there and we’re not interested in taking a step back. It has not been a conversation that we’ve had as they have explored potential opportunities. And then on Shutterfly, it’s in a great market. We’ve already had a handful of tours coming through. We feel pretty good about our prospects there, so we’re not looking to take a step back. Although, as we mentioned in our remarks, there is a — we’re thinking that re-leasing that is probably scheduled for the fourth quarter and then Shutterfly would be vacating at the end of the second quarter. So there’s a little bit of downtime there, but immaterial overall.
Operator: Our next question comes from Ronald Kamdem from Morgan Stanley.
Ronald Kamdem: Just a couple of quick ones. So just looking at the presentation about sort of the pro form portfolio. As you were sort of going through this process, was it solely focused on sort of the healthcare vertical or did you sort of kick the tires to some of the other verticals? And I’m thinking office here as well, right? Why not sort of do everything at once and so forth? So how did you guys think through that?
John Moragne: We looked at everything, honestly. As I mentioned, 2023 was a great year for sort of stepping back and we didn’t want to go into it with preconceived notions. So we were very keen on evaluating everything that was in the portfolio. Ron as you know and as everyone else knows, we have been very industrial focused in the last five years, north of $2 billion in total acquisition, 70% of that being in industrial. Part of our hypothesis around the clinical healthcare assets was looking at where do we transact and that had fallen off a cliff less than 10% of total investment volume in the last five years and then all the other things that we had talked about. So not only was it a place that doesn’t really fit well within our wrapper, but it’s also a place that we hadn’t been able to scale in a meaningful way for a long period of time.
The other assets, so in terms of our core verticals, industrial and then defensive retail and restaurant sectors, we feel really, really good about, particularly after doing a deep dive and going through it asset-by-asset and sector-by-sector in terms of what works for us and what we think will drive that long term shareholder value and multiple expansion. But office, what you just touched on, starting with — and I think, it was about this time last year, we took a very clear stance that office is not going to be a part of our future on a standalone basis. We will be looking to slowly wind that portfolio down. We’re very happy to hold on to those master leased office assets just because we think of them more as being a part of the industrial or retailer restaurant grouping that they’re with.
But those standalone office assets are better held somewhere else, but we’re not going to fire sell them. There’s good credits on those, they consistently pay rent, we don’t have any landlord obligations. It’s not something that is causing any real issues for us. So we will happily hold those until we could find an optimal disposition outcome, but we will be looking for an optimal disposition outcome at some point.
Ronald Kamdem: And then just in terms of people and staffing, does anything change there? Like are there people that were working on the healthcare that are either getting let go or refocusing, or is — like how does the team actually change from these sort of events?
John Moragne: So we’re fairly leanly staffed to begin with and we haven’t had a lot of growth. We’ve been pretty much flat for the last two years to three years here. On the healthcare, in particular, there was already some attrition that we had experienced during the year. And then we have one retirement that’s coming up that’s planned, separate and apart from our healthcare reorganization. And then keep in mind even at the end of this, we’re going to have 7.5% sitting in the consumer centric healthcare space. And so the folks that we have that work on that would continue to be dedicated to that space. So as I said, we’re kind of flat from a person-over-person basis for the last couple years here, and we anticipate that’s probably going to hold true for this year as well.
Operator: We currently have no further questions. So I’d like to hand the call back to John Moragne for closing remarks. Over to you.
John Moragne: Thanks Bruno. Thanks all for joining us today. I hope you can hear the excitement that we have about this strategy and what we are going to be doing in 2024, particularly with that long term view of growing shareholder value in multiple expansion in 2025 and beyond. Looking forward to seeing many or all of you in the upcoming weeks at various conferences and hope you all enjoy the rest of your day. Thank you.
Operator: Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines. Thank you.
