Pete Mavoides: Yes. Generally, we have – we currently own about 186 early childhood education centers. You can see in the quarter that Busy Bees came into our top 10, actually Busy Bees is the local brand. What’s the name of the BrightPath Kids is the corporate, which is a large operator that purchased a smaller operator that we had already done the sale-leaseback with. Generally, we see good trends in that sector with improving coverage and PE continues to roll up a lot of the smaller, localized and regional operators such that we see improving credit trends in our investments.
Sanket Agrawal: Thank you.
Operator: And the next question comes from the line of Ki Bin Kim with Truist Securities. Please proceed with your question.
Ki Bin Kim: Thanks. Good morning. You talked about higher yields that you expect going into 2024. I was just curious if that’s a – if you’re noticing that in a broad spectrum or is it more concentrated to a couple of key industries.
Pete Mavoides: No. I think the – our ability to drive pricing is more a factor of the dislocation in the broad capital markets that is affecting all our industries equally. And so it’s really across the Board of our opportunity set.
Ki Bin Kim: And in terms of your 2024 guidance, what are you assuming for credit losses? I think in the past you said 25 basis points to 40 basis points is normal for the portfolio. Just curious how 2024 compares to that.
Pete Mavoides: Yes. We said – what we have said is that 25 basis points to 40 basis points is a kind of historical loss experience. Generally, when we build a guide, particularly this far in advance and in a market backdrop that we’re seeing, we’re a little bit more conservative than that as we go through and take a real deep dive into our individual exposures and tenants and what may happen there. So you can assume baked in the guide is a range of scenarios that’s probably a little wider than that. And – but historically, the tailwinds to our guidance throughout the year is the lack of manifestation of those losses.
Ki Bin Kim: Okay. Thank you.
Pete Mavoides: Thank you, Ki Bin.
Operator: [Operator Instructions] The next question comes from the line of Connor Siversky with Wells Fargo. Please proceed with your question.
Unidentified Analyst: Hi, thanks for taking the question, guys. [Indiscernible] on for Connor this morning. In the context of weakening consumer metrics, how should we be thinking about tenant credit specifically here? So EPRT’s portfolio exhibited resiliency during the COVID environment. How can we feel comfortable to expect the same kind of performance if consumer spending drops off?
Pete Mavoides: Yes. Listen, I would – it’s hard to imagine a scenario where you see a larger drop off in consumer spending than we saw during COVID and if you start with a premise that the portfolio performed well through that period of time. I think you should assume that it should continue to perform well going forward. I would say, we are ultimately landlords to these businesses, and we are owning the cash flow assets that comprise these businesses. And ultimately, a weakening consumer is going to have impact on the equity values of these companies, but not the obligations to the landlords. And I think we very deliberately invest in a very specific set of industries, and an investor can easily take a look at the sectors that we’re in and understand that many of them are not really discretionary or subject to a weakening consumer.
Unidentified Analyst: Appreciate the color. Just a quick follow-up. If you had to choose one area, where do you think the highest risk to consumer behavior is within your portfolio?
