Jeffrey Berkes: I would say, Alex, it’s Jeff. Keep in mind that we’re pretty tough on waste terms, and we’re not necessarily giving away a lot of the things that you’re talking about to begin with. The leverage is definitely, as Wendy said, shifted to a lot of the landlords in many respects, given the shortage of space and given our proclivity to be tough on all terms in the lease, not just the financial terms. We’re cutting good deals right now, and we’re cutting them with great tenants. Really, really positive environment right now.
Operator: [Operator Instructions] The next question is a follow-up from Juan Sanabria with BMO Capital Markets. Please go ahead.
Juan Sanabria: Thank you. Just going back to Michael’s question from earlier in the call about the implied fourth quarter guide. Maybe, Dan, could you provide a little bit of a bridge on the implied sequential deceleration of what those drivers are in FFO from the third quarter run rate to the midpoint of the implied fourth quarter guide, please?
Dan Guglielmone: Yes. Look, I think that — I think we’re probably a little conservative candidly on some of the numbers there. I think we’ve got a good year, which could impact G&A, which would go up. Those are kind of — I think the number is a little bit of conservatism and probably a little bit of increased G&A in the final quarter probably is what, I think, gets you to kind of the midpoint or the implied midpoint of the guidance.
Operator: The next question comes from Nick Joseph with Citi. Please go ahead.
Nicholas Joseph: Just curious kind of the plans and thoughts for Mercer Mall after acquiring the fee interest. I know potential expansion or conversion. So wondering on the timing there and kind of the current thoughts?
Jeffrey Berkes: Sure. Yes. Nick, let me answer the — this is Jeff. Let me answer the first part of that question, and then I’m going to turn it over to Wendy so she can walk you through some of the things that we’ve got going on at Mercer. But the acquisition of the fee, which happened in October, was something that we baked into the deal 20 years ago. So exercising that option today does not have any bearing on what we would do with the property longer term. The plans that we have in place for Mercer right now are — would have progressed with or without that. But we’ve got a lot of great things going on at the property, and it’s been a great asset for us. So Wendy, do you want to fill in some of the details?
Wendy Seher: Sure. We’ve been working on rebranding the property. So it will be rebranded as Mercer on One. That’s kind of a catchy feel to it. We are — you’ll be seeing signage going up on the side to execute on that remerchandising and rebranding of the property. We have DSW, who’s going to be leaner and meaner as they downsize and two new tenants coming in right next to them plus we have backfilled the — as you saw with Crate & Barrel, the portion of the Bed Bath & Beyond that we got, I think, it was the end of last year. So a lot of exciting things going on at Mercer and a lot of investment on our part where we were able to drive those rents with a good demand in the market and get a return on that invested capital.
Dan Guglielmone: Yes. And just to remind folks that, that was a $55 million investment at 8.7% yield. So kudos to the folks who’ve embedded that option 20 years ago to allow us to have this really great opportunity to invest capital at a property we own. I think an implied — current cap rate on it significantly inside of the yield to acquire a portion of the fee underneath.
Donald Wood: Yes, Nick, and I am going to chime in. I know it’s a long answer to a simple question about an asset, but Mercer shows so much about kind of what we — what’s right down the middle of the play for us. There’s a big piece of land that we were able to get control of. Jeff got — did an amazing job, frankly, 20 years ago. And there’s — you think about — when you talk about us for the long term, we didn’t take a chance on whether we’re going to own the fee or not own the fee. We had it contractually done. So the timing is now. But if you look at what happened to that income stream on such a big piece of land, there was so much that was done in that property that was not originally underwritten. It reminds me a thing like Pembroke today.
It reminds me of things like Rosemont today, the things that we’ve been able to do that you can’t quite underwrite, but because they are dominant community-based centers that got drop on the large areas, we want to keep it going. And with what’s failing around it and some of the challenges of the inside mall space around it, it’s looking stronger than ever.
Operator: The next question comes from Hongliang Zhang with JPMorgan. Please go ahead.
Hongliang Zhang: I guess as I look at your redevelopment pipeline, most of your redevelopment expansion projects are expected to stabilize by next year. When should we expect you to start activating future projects in your pipeline?
Donald Wood: Yes. It’s a great question and one that we spend a lot of time around here doing. Obviously, the higher cost of money means a higher level of return threshold. And so really what it’s about for us and this, I think, is different than most people is we do have the ability to do, given the residential entitlements that we have, given the amount of redevelopment on retail properties with an additional residential component, that’s something where you’ve got rates that change every year. You got year leases. And so the notion of being able to get something started for a few years from now and having it move in is much more likely in that category than it is obviously when you’re talking about some other piece of real estate.
So you’ll see more of those redevelopments, retail redevelopments that we do on our existing properties. That will continue and will start — will pick up again next year. But you’ll also see some of the larger stuff, I think, later on next year with respect to particularly residential opportunities within the portfolio, places that we’ve already created that retail environment to be additive to.
Operator: At this time, I am showing no further questions. And this concludes our question-and-answer session. I would now like to hand the call back to Leah Brady for closing remarks.
Leah Brady: We look forward to seeing many of you in the next few weeks. Thanks for joining us today.
Operator: The conference has now concluded. Thank you for your participation. You may now disconnect your lines.
