Wes Golladay: Great. Thank you for the time.
Scott Schaeffer: Thank you.
Operator: Next we’ll go to Merrill Ross at Compass Point.
Merrill Ross: Good morning. Thank you for taking my questions. I wanted to just make sure I did calculate a rent concession. Do you expect them to alleviate early next year or continue to be high? And how does that change your focus in terms of tenant retention?
Mike Daley: I think in terms of retention – this is Mike. I think in terms of retention, we’ve seen, as Scott referenced earlier, very strong numbers in terms of both renewals as well as the rate that those renewals are being accepted at. Concessions are going to go down. They’re going down as we speak, relatively speaking. As we see that supply pressure continue to alleviate, obviously, the concession as a strategy would go down as well. We think the approach that we’ve taken is very good from a renewal perspective in the future because our residents will not have that kind of sticker shock when they have moved – those folks that have moved to A, are going to have to pay that additional amount if they’ve received a rent reduction, whereas with our concessions, they will pay 11 months at a higher rate, and we’ll be not surprised when renewal time comes around.
Merrill Ross: Right. That totally makes sense. So a separate question. Since the reception was relatively strong to the asset sales and the dividend coverage remains deep, is it possible that you go for another round of maybe five more assets? Or are you done?
Scott Schaeffer: We’re always looking to concentrate and better manage the portfolio as a whole. Right now, we’ve only identified these 10. But depending on demographic changes, there may be more in the future, but there’s no plans at this point.
Merrill Ross: Great. Thank you.
Scott Schaeffer: Thank you, Merrill.
Operator: We’ll take our next question from John Kim at BMO Capital Markets.
John Kim: Thank you. On the dispositions, can you provide some more commentary on how many of the 10 assets have mortgage debt in place and what the average interest rate is?
Jim Sebra: Yes. So nine of the 10 assets have mortgage debt in place. One asset is pretty unclear. And the average interest rate of the debt that we will pay off because we’re going to have about $240 million of excess cash after the sales pay off kind of line of credit, et cetera, is about 6.1%.
John Kim: I was more questioning the average interest rate on those assets and if that played a major factor in identifying those assets for sale?
Jim Sebra: Yes. The average interest rate on the mortgages, there’s nine mortgages themselves are – I don’t have the exact numbers, low 5%, like 5%, 5.1%. I can come back to the specific.
John Kim: Okay. Great. Thank you.
Operator: And next we’ll move to Linda Tsai at Jefferies.
Linda Tsai: Hi. Who are the potential buyers for the assets from your deleveraging program? And would you expect multiple bidders?
Scott Schaeffer: We’ve had multiple bidders, and we can’t identify who the buyers are. But each property was marketed independent of the others as one-off sales, and there were multiple bidders on each one
Linda Tsai: And apologies if I missed this. With the 10 assets for sale, are there other assets no longer subject to prepayment penalty that you would consider for sale?
Scott Schaeffer: There are lots of other assets that are not subject to prepayment penalties, but that was really not the driving force. The driving force was that we wanted to exit certain markets. And we couldn’t do it or we decided not to do it earlier because of the prepayment penalties. But the driving force is exiting the markets and then generating the capital to retire the debt.
Linda Tsai: With the sale, are you exiting all the markets you would like to exit?
Scott Schaeffer: All of the markets – all of the – let me start out, all of the sales are in markets that we want to exit. We will continue to view the portfolio going forward for additional markets. But at this time, we’re exiting the ones we want to.
Linda Tsai: Thank you.
Operator: And that does conclude our question-and-answer session. At this time, I’d like to turn the conference back to Scott Schaeffer for closing remarks.
Scott Schaeffer: Thank you all for joining us today and we look forward to speaking with you next quarter.
Operator: And that does conclude today’s conference call. Thank you for your participation. You may now disconnect.
