Pete Mavoides: Yes. As I said, the casual dining tends to get hit the earliest and hardest when you see a recession, as consumers eat out less and will trade down to QSR options, that would probably be the biggest hit. That said, we have great coverage in that space and good assets such that I would not expect to have any material credit losses.
Unidentified Analyst: Appreciate the color. Thanks, guys.
Pete Mavoides: Thank you.
Operator: And the next question comes from the line of Josh Dennerlein with Bank of America. Please proceed with your question.
Farrell Granath: Hi, this is Farrell Granath on behalf of Josh. I want to touch on again for 2024 capital sourcing. Kind of with the assumption if acquisitions are expected to stay largely in line with historic trends, what is your maybe strategy and plan for capital sourcing and perhaps thought process on pre-funding going into 2024?
Mark Patten: Yes. I mean, capital sourcing, I think what we started with was really the bottom end of our range is utilizing the liquidity that we have available to us now. Otherwise sourcing as you move through kind of a range, the capital sourcing is number one the availability on our revolver. And that’s really probably the biggest component of anything that we do relative to the 2024 guide.
Pete Mavoides: Yes. And I would add, given our unsettled forwards, the term loan and the capacity with that we have built into the balance sheet, we have almost $800 million to $1 billion of investable capital without exceeding our leverage targets.
Farrell Granath: Great. Thank you.
Pete Mavoides: Thank you.
Operator: And the next question comes from the line of Spenser Allaway with Green Street Advisors. Please proceed with your question.
Spenser Allaway: Thank you. Thank you, guys, for all the great color on 2024 guidance. Maybe just one more as it relates to that. So can you just talk about how far acquisition spreads could compress before you ultimately decided to perhaps pump the brakes or just not grow next year?
Pete Mavoides: Yes. I’d stop short of putting a hard number on that. It really – we take a forward look. We expect markets to improve. What – I would more say, you’re unlikely to see us. It more come down to managing our balance sheet such that leverage gets out of whack and we get into a spot where we’re uncomfortable relative to the balance sheet and our ability to access capital. And historically, our behavior around leverage is pretty predictable. You’ve seen us crest 5% or 5 times, net debt to EBITDAre a couple of times. And so I think I would look at it that way, Spenser.
Mark Patten: Yes. And I think, Spenser, the other thing I might mention is just depending on where you land on a weighted average cost of capital for us, our net spread today is in a pretty good spot, and we – incredibly favorable. And underpinning compression and cap rates would probably be a market backdrop that would make our weighted average cost of capital get favorable. And then I think that means our spreads stay constructive.
Spenser Allaway: Okay. Yes, fair enough. And then can you just remind us if you currently have a share buyback program in place, and if we did enter an environment where external growth was off the table, should that be expected to be like a use of capital?
Pete Mavoides: We do not – we have not put one in place. And listen, I think if we got to that point and we know the best thing for shareholders was for us to invest in our shares, then the Board would consider that. But we do not have one in place, as we said today.
