Mitch Germain : The press release just says that, it was under contract. Is that correct?
Mike Weil: That is correct. That one is under contract and we expect to close in 2024.
Mitch Germain : Okay. So, then I think Michael answered, but I would say, it was a little bit — I brought it broken up. How much of the $185 million stems to the third quarter, please?
Mike Weil: It is about $15 million, a little less than $15 million.
Mitch Germain : $15 million okay. I apologize.
Mike Weil: And some very active in fourth quarter that we don’t want to, get into right now, as far as the details of it. But we are very confident in the $383 million for 2023.
Mitch Germain : So that includes the other $198 million or so that’s under contract. Is that the way to think about it?
Mike Weil: That is correct.
Mitch Germain : One follow-up on that, though, Michael. Does that include, the under contract include the $50 million office building that’s going to be sold in 2024?
Mike Weil: I think I am confusing things. So, let me just break it down. So, let me just…
Mitch Germain : It sounds like around $200 million total, $150 million, hopefully by year-end, and then other app to build at that other asset in West Coast probably sometime in ’24. Is that right way to think about it?
Chris Masterson: Yes.
Mike Weil: Right. Chris, would you say it any differently? The $50 million will close, it is scheduled to close in 2024. And the majority of everything else will be closed in year end.
Chris Masterson: Yes. That is correct.
Mitch Germain : Okay. That’s super helpful. And last one for me. I want to just get a clarification about the additional synergies that you talked about. So, you originally said $54 million with another $21 million to be realized over a 12 months or 18 months period. And I apologize if I am a little off on that time frame.
Mike Weil: No. That’s exactly right.
Mitch Germain : Okay. Great. So now you are talking about $56 million.
Mike Weil: Yes.
Mitch Germain : Okay. But you are still saying $21 million over time. So, is it $75 million or $77 million? I am just trying to understand, kind of how much is left to be realized. Was $2 million just accelerated from the back end, or, and there is only $19 million left, or is there really $21 million left, which would mean that your synergy are in excess of the $75 million that you guys originally stated.
Mike Weil: Go ahead, Chris.
Chris Masterson: Sure. So, I was going to say, Mitch, the way that you should look at it is, the $56 million that we referenced, that is comparable to the $54 million. So that is effectively from day one. We took our actual results for those 19 days, and we were able to annualize them. And our expenses ended up coming in a little bit lower than we had estimated. So that’s where you are seeing the $54 million, projected to the $56 million now, the separate $21 million that is something that we will be over as we mentioned in the next 12 months, realizing that that relates to some other duplicative costs, whether it’s legal, audit, things like that. And that is not impacted at this point. So, you look at the $56 million and the $21 million.
Mitch Germain : So that was the $77 million?
Mike Weil: Correct. Now $75 million.
Operator: And now we are going to take a question from Todd Thomas from KeyBanc Capital Markets. Todd please go ahead.
Todd Thomas: Just following-up on the synergies from the merger, the $21 million of synergies on that side is that to be achieved on sort of a ratable basis over the next 12 months? Or will that be a little bit more lumpy? Maybe you can just talk about the expected timeline to actually realize those cost savings.
Chris Masterson: Sure. So, I would say that would be something we would realize over time. And as we get towards the third quarter of ’24, effectively we should have all of those synergies in place, where if you were able to annualize the numbers, it would be reflected in there.
Mike Weil: And Todd, it’s not going to be ratable over the next few quarters. Some of it will be and some of it’s lumpy by event.
Todd Thomas: Okay. And then appreciate the color on the synergies and some of the updates here. When you initially announced the merger, you talked about 9% accretion on an AFFO basis. And I was just wondering if you could comment on whether you’re on track to achieve that in the fourth quarter on an annualized basis. I think it was relative to the first quarter. And if there are any additional considerations for us as we look ahead.
Mike Weil: Yeah, that is what the merger anticipated results are 9% accretion. And that is going to be further addressed in our guidance that we’re going to be giving. We’ve been executing, the synergies have gone very well. So, the thing that is slightly different from the time of the merger is the increase in interest cost with the change in markets. We’re starting to see that come back down. So, I’m not sure that that changed impact will be significant. But that is what we’re looking at right now. And with the end of the third quarter and the 19 days of the merger, as you can imagine, there was there a lot of very important work that needed to be done right up until the close of the quarter and through this period, so that Chris and the accounting team could get everything together for the 10-Q.
