Jordan Kaplan: Well, the buyback is one of a number of options. They all use some type of capital, you have access to capital. So that’s probably not really that much of an issue. But we just have to look at a variety of things and it’s on the list. I think while it’s compelling, I mean, we obviously would rather lean towards making some great real estate deals because that sticks with the company — that adds a great piece of real estate forever, which is always very valuable. But it’s hard to ignore the stock buy, so everything is on the list. I mean, that’s where we’re at.
Operator: The next question is from John Kim with BMO.
John Kim: I wanted to get your updated views on resi conversion opportunities. If there are any assets or maybe some markets contemplating offering incentives that would make it more economically viable for you to pursue the change of use of the building?
Jordan Kaplan: It’s funny because residential conversion is basically a matter of looking at the spread between office and resi rents and then you can get down to as particular of a single building. And you would say, well, resi rents are way up and office rents are suffering. But we’re not in markets where they’re suffering extraordinarily. So maybe there could be something but it’s not very obvious, and it’s not something where you can walk into a market the way we did when we were looking in Hawaii and just say, this is obvious, we should do this as one of the fill. It’s going to be a little more — it’s much more nuanced than that. But it’s great that we had that experience and a great job was done, pat on the back of that.
That team, both the construction, the lease up and everything of the 1132 Bishop building. So that gives us a lot of confidence around that area. But you need to convince yourself or be convinced that the economics are right and the building’s right, it’s not simple like the Hawaii deal.
John Kim: I was thinking more like a market like Warner Center, which you’ve mentioned in the past was perhaps a noncore market for you, and it sits today at
Jordan Kaplan: Yes. And although Warner Center — the rents are — I mean, the market there has not been destroyed. As a matter of fact, there’s so much new development is in that area. I probably put on my list of a good — starting to show whole another round of great promise. Remember, there are buildings being pulled out of that market right now for other reasons, right? I mean one guy for the just bought a site that had $500,000 of billing, that’s not going to be an off selling or he’s building practice fields, right? So that’s out of the mix. I think there’s some buildings there that are going to be out of the mix. And frankly, you might end up at a market that’s back to where it was before the LNR project was built, which in any normal economy, that was one of the best markets in LA.
It was only until LNR added 25%, 30% to the size of the market that, that market started suffering. So if we do this reversal, everything else about that market if you were just sort of evaluating it for office or residential investment would be a big plus. It’s got some — the most residential is being built there and the rents are held extremely well, and all those projects are leased up. And then in terms of amenity base, they’ve seen — one of the more dramatic conversions, their big mall has been broken up with two pieces of the mall that was there having been sold to as well as just other sites that I was talking about. One mall that — I think, is going to run two pieces, two other full size blocks that he’s building this Rams practice field and kind of sports center, right, for visitors and stuff.
