Bryan Maher: And I don’t know if you’re comfortable commenting on this, but you’ve had pretty good momentum on the occupancy side lately. I know that you look at trade rags and what have you, and some of your competitors, they talk about 1Q typically being a little bit seasonally weaker. But do you think that, that puts a kink at all in the current momentum you have?
Rick Siedel: I don’t think so. I mean traditionally, Q4 and Q1 are a little slower, but we were able to kind of beat the trend in Q4 and January was trending pretty well. So no.
Jennifer Francis: And I think we’ll continue. We’re expecting to have similar momentum.
Bryan Maher: And then maybe one more for me before I hop back in the queue for Rick. I know that the big bogey out there is the second half trying to get to that incurrence covenant at 1.5. I know that there’s some noise in the numbers because you just paid down the facility, $250 million or so. But even looking at the 4Q over 3Q momentum in net debt-to-EBITDA metrics, which improved hugely and EBITDA to interest expense, again, improved hugely, can you give us any flavor on how you’re thinking about the incurrence test?
Operator: It appears we have lost connection with our speakers, please hold while we reconnect. . We currently have Bryan Maher on the question queue.
Bryan Maher: I don’t know if you guys heard my question or not. Can you hear me now?
Jennifer Francis: Yes, we can. And Bryan, we did and apologize, our line went dead so we quickly called back in. I think Rick is prepared to answer your question.
Bryan Maher: Great. Because my e-mail lit up as soon as you guys dropped off.
Rick Siedel: So I think the question, just to recap is basically when — how close are we to the 1.5 times debt incurrence test so that we can refinance and operate like like normal. So you probably noticed we reported in the supplemental on a trailing 12 months basis that consolidated income available for debt service over debt service was about 0.83 times. If you adjust that for the acquisition that we did and the couple of properties that we’ve sold along with the debt paydowns that have happened, kind of on a pro forma basis for that we’re at about 1.04 right now. And that leaves us with needing to improve NOI by about $74 million to get back to compliance. So we do believe there’s a path there. The question as far as when is a difficult one to answer.
There are a lot of moving variables. But we think we’re executing on the right plan, again, investing in the SHOP portfolio, while also very focused on managing them operationally is we think the recipe for success to get back there. This number is only about 53% of where the portfolio used to perform back in 2019. So we think it’s achievable. We just need to actually execute on it now. So that’s where all of our focus is.
Bryan Maher: And just to be clear, I mean, in our model, we have you getting there by year end. We’ll see how that plays out, but the trends are clearly moving in the right direction. But maybe you can just talk to briefly, and then I’ll hop back in the queue, kind of plans B and C if that weren’t to happen? I mean you continue to talk about $5.8 billion in unencumbered assets. I would suspect that you could sell some or JV some to kind of get where you need to be for 2024, if push came to shove?
