Steve Altebrando: That is correct as of today, but as you know, the forward curve implies the rate coming down pretty meaningfully, but yes, that’s correct as of today.
Gaurav Mehta: Okay. And what’s the dollar amount of these acquisitions? I think I saw the dollar amount for two of these acquisitions in your filing and didn’t see the dollar for the third one?
Steve Altebrando: Yes. So 1902 Park was about a $22.5 million deal, with CMCT, it’s 50% — has a 50% interest. So about CMCT equity is half of that. Yes, and Channel House is around 123 for our portion and Clay was about — 143 for our portion, sorry, Jack London Square was about 123 for our portion.
Operator: The next question is also a follow-up from John Moran with Robotti& Co.
John Moran: Yes, with respect to the multifamily deals that you did in the first quarter, is there any near-term prospect to bring in co-investors on those? And it’s this market environment — has it been disruptive on that into your business? I mean, do you expect it to be more difficult to get co-investors?
Steve Altebrando: Those are deals where we could potentially look to co-invest. And part of the reasons that we would like the two Oakland deals was that there was — when we saw where the pricing was coming in for really high-quality assets. And obviously, the Bay Area has some struggles, but that led to pricing being at a place that we thought was very attractive to be an acquirer. Yes. And as a reminder, in 2019, we sold a large amount of assets in the Bay Area. It was mostly office and parking when the market was really a thriving market. So at this point in the cycle, we thought it was attractive to reenter, but now on the multifamily side. But to your direct question, I think we would, over time, like to bring in co-investors.
I think the private markets today are reacting just like others, just where there’s a sense of uncertainty around commercial real estate in general. So it may not be immediate, but over time, we would like to bring in co-investors for those assets.
John Moran: Do you feel like — does the business plan makes sense without — when I say the business plan, I mean funding something that your targeted return on cost is 6% or 7% and funding that with essentially preferred stock that cost that or more. I mean, is that — and I understand that you’re buying below replacement cost and hopefully a stabilized cap rate or exit price on those properties would be much higher, but without co-investors, does it make sense as a business plan to fund that type of acquisition with this preferred stock program. That probably is a little bit confusing to me.
Steve Altebrando: I mean we think it certainly makes sense. I mean, when we look at deals like the Oakland assets, our view or our expectation of returns or target returns are in the low teens. So we certainly think, even without co-investors, it’s a return that is very attractive for us. And then certainly, if you bring in co-investors, you push those returns materially higher through the management fees and potential promote as well. But even without it, they’re still attractive deals.
Operator: At this time there are no more lines in the queue. This concludes our question-and-answer session. The call has now concluded. Thank you for attending today’s presentation. You may now disconnect.
