Peter Scott: Yes. Michael, it’s Pete. I’ll take a stab at that. I think you were pretty astute to point out when we spoke yesterday that the two main issues with regards to revenue recognition this year are one is a redevelopment project, 65 Hayden and the other is our development project, Callan Ridge, where we push back the initial occupancy dates on those. We actually will have those leases commence, one with Dicerna, who was bought by Novo Nordisk and 65 Hayden and the other one with turning point who was bought by Bristol Myer, they will commence. Actually, the Dicerna lease has commenced at this point in time and they are paying cash rent. They’ve just decided to invest a heck of a lot more money their own money into our campus.
So it’s a great credit upgrade for us, but the project just takes a little bit longer, about three quarters longer to complete, and we can’t recognize that cash rent we are receiving into FFO right now. So that’s the basic gist of it. And then at Callan Ridge, Bristol Myers has decided to acquire Turning Point that they would like to sublease that space and wait on spending any TI dollars until a subtenant is identified. So at this point in time, we’re just pushing out the initial occupancy dates to as conservative of a date as possible. As I think about M&A, generally, there are a lot of pluses to it with regards to the credit upgrade. And sometimes there can be minuses to it. I don’t know that this is really a minus because we’re getting such a great credit upgrade in both cases, it’s just a matter of the timing of when we can recognize it in one metric versus when we recognize the cash rents received and another metric.
So sometimes, these delays don’t occur. Sometimes they do occur just through the M&A and transition process. So it’s hard to tell you what the overall trends are, but sometimes it works in your favor and sometimes it doesn’t.
Michael Griffin: Got you. Well, that’s great color. That’s it for me. Thanks for the time.
Operator: The next question comes from Joshua Dennerlein with Bank of America.
Joshua Dennerlein : Maybe just one follow-up on that. What’s your ability to kind of get that $0.03 back from the tenant-driven TI delays, is that a next year event or potentially something that might come in this year?
Peter Scott : Yes. I think on the larger of the two, the 65 Hayden project, we are highly confident that we’ll start to get that back beginning later this year. With Callan Ridge it’s hard to say, right, because it really depends upon when Bristol Myers identifies a subtenant. So I think we’ve pushed it out to the most conservative date in the beginning of 2025. But it is important to recognize that the FFO that we aren’t able to recognize in our earnings this year we do get to recognize that over a slightly shorter lease term versus the way we recognize the cash NOI. So if it takes on a 10-year lease, for example, if it takes a year delay before you start recognizing FFO, you would recognize that FFO over nine years, so a slight modest benefit. from that perspective. So you do eventually recoup it. It just doesn’t begin to get recouped until after that TI project is done.
Joshua Dennerlein : Okay. And does your guidance include any of that 65 Hayden in total coming back?
Peter Scott : Yes. So I’d say about $10 million of that $15 million is at 65 Hayden.
Joshua Dennerlein : Okay. And then maybe just on the MOB guide. I think if I recall correct, I think last year, you guided like a Q1, Q2 well ahead of that this year, Q3. Curious kind of what gives you the confidence that come out with Q3 this year versus Q1 Q2 last year? And then how do you get to the high end and the low end of the range?
