Pete Scott: Yes. Sure, Juan. I think from an FFO perspective, I would say that the cadence, there is probably not a huge amount of variability as you look out across the four quarters in the year. I will say that some of these larger leases that are commencing in the first quarter for lab, especially some of the ones we’ve been pretty vocal about like the Voyager deal out in Boston that we did that commenced at the beginning of this month or January, I should say, beginning of the year as well as the RevMed deal. I mean, they just came with 3 months of free rent, and we have the Amgen deal that we just commenced as they took over one of the Amgen buildings that expired. So there is just a – I’m not going to say there is a significant amount of additional free rent beyond what’s market, but all of those leases are pretty sizable and commenced earlier this year.
So it’s just going to have a little bit of an impact on the first and second quarter same-store numbers relative to the overall guide. And that’s really why I wanted to point that out. Some years free rent works in your favor, some years it doesn’t. A little bit of a headwind this year in our number. But again, these are long-term leases with really high-quality tenants. So I just want to point out that same-store for lab will be a little bit weaker first half of the year versus second half.
Juan Sanabria: Appreciate it. Thank you.
Operator: Your next question comes from the line of Michael Griffin with Citi. Please go ahead.
Michael Griffin: Great. Thanks. I wanted to ask on the development pipeline. I noticed some of those projects were pushed out a couple of quarters relative to last quarter. Curious if you could give any color on why that’s the case? Are there any worries about demand for those projects?
Pete Scott: Yes. Hey, Greg, it’s Pete. I can certainly start with that. And I’ll hit on the biggest ones. Vantage, we actually delivered a portion of that late last year. And then the initial occupancy is for what’s remaining, and we do have another lease with Astellas that’s expected to start later this year. So that’s really the reason why that got pushed back a little bit. It’s because we delivered a portion of that. On Gateway, we have certainly talked about that at length over the last 6 to 9 months with the Sorrento situation. I mean, realistically, the way we look at it, even if we signed a lease today, between space planning and actually doing some of the work to do the specific TI build-out, I mean you’re talking about 6 to 9 months before a lease can even commence.
We don’t have a lease signed at this point in time. So as a result, we did push that out a little bit. We’re certainly touring tenants through the building and the facility. It’s a really great looking, high-quality campus, A+ right there overlooking the 805. But as we look out, based upon how long it takes leases to get signed, that has actually slowed a little bit. we decided that it made sense to push that out just a couple of quarters. I don’t know, Scott Bohn if there is anything you’d want to add to that.
Scott Bohn: No, it’s good, Pete.
Michael Griffin: Great. Thanks. And then I just wanted to touch again on the synergies from the merger. You talked about realizing about $40 million to $60 million of that. It seems like the merger is going on pace or maybe even better than expected. Curious if you could see any additional upside kind of on top of that $60 million or if that’s sort of the kind of highest level of synergies that you could see.
Scott Brinker: Yes. Griff, I’ll take that. It’s Scott. In October, we talked about $40 million of year 1 run rate synergies, and we’ve got a full $40 million in our 2024 guidance. So I would say, we are ahead of expectations in year 1. So hopefully, we can exceed that number as well. In terms of year 2, we will see. The internalization so far is going well, three markets down, six more in the queue, so we’re taking them one at a time just to make sure that it goes well, reduce execution risk. But if we’re satisfied with the results, we could certainly continue to internalize more and more markets going forward and that would be a big part of achieving the high end, if not above the high end of that synergy range.
Michael Griffin: Great. That’s it for me. Thanks for the time.
Operator: Your next question comes from the line of Rich Anderson with Wedbush. Please go ahead.
Rich Anderson: Hey, thanks. Good morning. So on the Amgen and Sorrento spaces, I think your – the next time we will see that in the numbers is 2026, correct me if I’m wrong. Is any one of the other sort of maybe faster to the punch. It sounds like Sorrento is a little bit more ready to use based on what your comments were. I’m just curious what the realistic time line is to see them back in cash paying assets?
Pete Scott: Yes. I think, Rich, as you quoted 2 years, that’s really more of a same-store figure. I would say from a lease-out perspective, as you pointed out, the two campuses. Sorrento, the scope of work is less significant on that than the scope of work on the Portside project that we’ve rebranded. So I would say that we can finish the scope of work on Sorrento, and that’s the Directors Place campus a lot quicker, and we will actually finish the work on the Portside campus. So I would see NOI probably earlier from that campus if I were to give you some guidance between the two then I would from the Portside campus. Although that said, you do have to bear in mind that we will actually commence that lease, the 101,000 square foot lease at Portside with client later this year. So we have backfilled some of that. We have not backfilled at this point any of the Sorrento campus, but we’re certainly touring tenants through it.
Rich Anderson: Okay. My question…
Scott Brinker: Hey, Rick, can I add something to that?
Rich Anderson: Sure. Sure, Scott.
