Stuart McElhinney: We always prefer to build space for them. We’re very good at it. We do a lot of prebuilt suites, wwe call it our spec suite program. So we’ll go in and make a suite totally move-in ready. We’ve had a lot of success with that product. So that’s something we continue to ramp up on. But yes, these are small tenants, they don’t have real estate departments. So as much as we can help them with the process, make it easy for them and get the space built for them, that’s a much better turn out. So we do that as much as possible and the tenants appreciate it.
Jordan Kaplan: And they also don’t have large TI demands. So our TI costs are substantially lower than when you lease into large tenants.
Operator: The next question is from Dave Rogers with Baird.
Dave Rogers: Maybe one question for me. Just in terms of the evictions, the tenants that haven’t been paying. I know last quarter, you were down to the last handful, maybe 100,000 square feet or so of tenants that you were still working through. Can you just give us an update on where you are there? How much of an impact you’re anticipating maybe to occupancy and where most of those blend and extend kind of done by the end of the year? Just so we can kind of think about the run rate for that group of tenants.
Jordan Kaplan: That group is done, it’s in the numbers, it’s dealt with. So there’s no more people that weren’t paying are out and the other people are paying. There’s money still owed to us by some people that are paying, and we work out deals that they pay over time.
Stuart McElhinney: And there’s money still owned to us by some people that are out that we’re still pursuing
Jordan Kaplan: But in terms of occupancy, you have this strange impact on occupancy of people that were in occupancy, but they weren’t paying. So that was weird, right, you’re used to if they’re in, they’re paying. And that’s what COVID and the moratoriums did, and that’s resolved residential, it’ll be resolved by the end of March.
Dave Rogers: In the occupancy number, okay?
Jordan Kaplan: Yes.
Operator: The next question is a follow-up from Blaine Heck with Wells Fargo.
Blaine Heck: Jordan, just circling back to the state legislation that opened up residential zoning in certain areas in LA. I guess, do you think that change is going to trigger a lot of additional supply in the market? And have you seen any projects announced as a direct result of that legislation or is it just too early to tell?
Jordan Kaplan: I hate to say that I don’t think it’s going to open a lot of new supply simply because they sort of — we happen to be a developer that happens to own a lot of land in those areas. I don’t think a lot for infill type product we’re aware from that perspective. They didn’t make it cheaper, right? If you want to — if you just went, I liked that rule, now I’m going to go buy a piece of land because I know about that rule. I don’t think that they need to make that land any cheaper, probably going to be more expensive. They just kind of enhance the value of our land because so we can now kind of develop it as residential without having going through as many hurdles. So at least in the areas where we own all this property, I don’t — I mean, say this to them, I don’t want them to repeal it, but I don’t think it really did anything other than for someone like us that happen to have so many sites. They didn’t do much to boost the production of apartments.
