Dave Sedgwick: Yeah, I think, look, we saw a pipeline that we feel like is going to be able to — that we feel like we’ll be able to execute on in the coming months and so with visibility into that and the ability to pay down the line a little bit, it just made sense to pull that ATM trigger in the quarter.
Jonathan Hughes: All right, I look forward to hearing a lot more next quarter. Thanks for the time.
Operator: Our next question comes from Austin Wurschmidt with KeyBanc Capital Markets.
Austin Wurschmidt: Hey, good morning, everybody. Just wanted to go back to that Midwest operator, Dave, I believe in sort of past discussions, you’ve talked about that roughly of that $5 million, $5.5 million contractual rent, there being maybe a couple of million dollar delta seemingly at risk relative to maybe where market rent would be based on facility level performance. And I’m just curious if that’s still the right sort of range today, and then how are you thinking about a potential rent cut or even looking to sell these communities?
Dave Sedgwick: Yes. I don’t think our view on the value of these buildings has really changed over the last few quarters. Their performance has stayed essentially the same with negative EBITDAR. And so you’re looking at a portfolio that would value probably on a per bed basis if taken to market. But in terms of what we’d be willing to do, it’s just given where we are in the discussions, it’s not something that we should be talking about publicly yet.
Austin Wurschmidt: That’s fair. And then switching over then to the eight tenants that you retained, I guess, on one hand, you clearly flagged these within your original sort of portfolio optimization grouping. So presumably there was something about these assets that wasn’t optimal, but they did pay all of their contractual rent in 2022. So can you just shed a little bit of light on the need for the rent cut and sort of how you landed on the magnitude of that cut to be sure that there’s sufficient room going forward?
Dave Sedgwick: Yeah, great question. And I appreciate the way you laid out the question, because you’re right, there was something in these buildings that we saw early on, even though they were current with rent. If you’ll remember, this time last year when we announced the plan for these 32, we said we were responding to a couple of operators that hit the wall and then that caused us to look at the rest of our portfolio and sort of try to anticipate who was going to be next and these operators or facilities made that list. They paid rent in the year, but that was largely subsidized with government stimulus and if not for that, we would not have received the full contractual rent in the year. And as we look forward to this year, then we say, okay, what is it going to take to keep these guys current, to keep them engaged and incentivized to run these buildings well?
And I think that’s the number that we arrived at. We very well may revisit bringing these assets to market when conditions improve for buyers and we’ve set a rent and come to an agreement that gives us the right to either sell or retain it at any time.
Austin Wurschmidt: Thanks for that. And then just last one with respect to kind of the rest of the retained facilities, I’m just wondering if you could give us — is the rent commencement on the four specifically, is it a ’23 event? Is it more likely a ’24 event? Just even some range, even though I know you don’t maybe know specifically today when that may occur. And then also curious if these now will be reflected on sort of a cash or GAAP basis going forward, so we can understand sort of the FFO impact once rent does commence.
