So we are just going to balance where our capital goes into. We find kind of recycling our noncore land holdings in Connecticut, which effectively are zero income sitting kind of on our balance sheet at a very low basis and putting that into other land for development in markets we plan to develop is a good use of recycling those proceeds. But we are also cognizant of trying to build up our cash flow as well. So we will look for the right opportunities. We really want to allocate capital to where we can get the best returns, with some recognition of obviously taking into account risk and some recognition of when cash flow is going to start. So, hopefully, that answered your questions.
Craig Mailman: No. No. No. That was helpful. And just from a capital perspective, you guys have the $216 million of liquidity and the other $35 million of assets that are under contract that will eventually be sold. So you are somewhere in the range of kind of $250 million of liquidity. Of that, I guess, you could — if you strip out the line, the balance is kind of locked in, because you are swapped out and then you have the cash and then the proceeds. Kind of what do you guys view your cap on near-term capacity to stay within your leverage kind of targets?
Michael Gamzon: Yeah. I don’t think we have kind of formulated that out publicly, but we think kind of your roll forward our development pipeline, our capital. We end up at a pretty conservative debt-to-EBITDA number kind of once we stabilize those assets and fully fund them. As you mentioned, we have the capital recycling, we generate cash from the business itself. So I think as we look at leverage, we really think about where the peer range is and we don’t want to be too far out of line on the peer group, but we still see incremental capacity there for us to have some additional leverage as a capital recycling cash flow and we will see when the opportunities present themselves, as Jon alluded to in his remarks. I think our goal is to keep the business somewhat simple from a balance sheet point of view.
But if we get down the road and we don’t think equity capital is an appealing avenue somewhere down the road, we want to be mindful of our leverage. We put our capital recycling to use. We will have to think about potential other structures, whether it’s a JV or something else. But today, we feel really good about our balance sheet, good that we do have some dry powder to take advantage of land or existing building opportunity as they come, but we will keep things in mind. The other thing we think about when we think about our leverage ratio is just, we look at both debt-to-EBITDA and a little bit at kind of debt-to-NOI. Just recognizing a small company, our G&A, which we continue to leverage as we grow our NOI does take up a little bit bigger chunk than our peers.
But that said, we still want to keep that debt-to-EBITDA measure pretty close and in line with our peers, as well as we will look at other metrics as well, but we are focused on being pretty reasonable here.
Craig Mailman: Okay. And then, the accordion feature on the term loan, what would be the pricing if you guys were to kind of exercise the incremental $250 million?
Michael Gamzon: Yeah. Jon or Ashley, you guys want to fill in on that.
Jon Clark: Yeah. Michael, I can take that one. Hey, Craig. The pricing would be whatever pricing would be prevalent at the time. It basically lines up our syndicate to be able to provide us a term loan, but we didn’t set pricing. Still our spread to SOFR is what it is and we would hope to be able to achieve something similar.
Craig Mailman: And the syndicate is definitely there, right, if you want to take it down. There’s no way for them to get out of that commitment?
