Ross Cooper: Yes. I’d also mention that when we took over the portfolio, there is always a risk in transition, especially on the construction side, when you hand off projects from one company to the other. And despite the handoff period, these projects still need to get done. There’s still targets that need to be met, there’s still lease obligations to fulfill. And as a result of that, from day one and really prior to the transaction, we were preparing for that, and that enabled us to meet and exceed some of this no pipeline compression as well, that we saw this quarter with RPT enabled to get some key tenants open very early in the year that will now benefit from through the balance of the year. So obviously, in our SNO we saw some good quarter compression about 20 basis points, but we saw more compression on the RPT side just because a few big anchors actually opened in beginning part of the year.
So again, hats off to everyone. It’s not easy sometimes. We never want to take it for granted on the integration side, but really, team was laser-focused not only doing that, but then also executing just fundamentals on the core business with Kimco to make sure we had an outstanding quarter.
Operator: The next question comes from Floris van Dijkum of Compass Point. Please go ahead.
Floris van Dijkum: Good morning, guys. Thanks. Nice positive result, I guess. I have a couple questions, but I guess I’m going to focus my question to — to Ross. I know you mentioned, Ross, that the cap rates for grocery-anchored are pretty tight in particular. As you think about deploying capital going forward, can you maybe talk a little bit on your views on lifestyle centers? And why wouldn’t you pivot more? Why would not — why wouldn’t Kimco pivot more towards lifestyle acquisitions? Or are you wedded to acquiring and increasing your percentage of grocery-anchored in your holdings?
Ross Cooper: Yes. Thanks, Floris. It’s a good question. I think one of the benefits when you look at Kimco is that we do own and have operational expertise in sort of all formats of open-air retail. We do love the grocery-anchored and with lifestyle as well. Many of those assets have a grocery component that you get the benefit of. When you look at the acquisition that we made last year with Stonebridge, that’s a prime example of a dominant Wegmans anchored center that had a lifestyle component. And based upon the size, we were able to buy that at a high cap rate north of 7 because the deal size was a bit larger and because of the operational expertise that are required to manage and operate those assets is a more limited buyer pool that we think gives us a differentiation.
So we’re absolutely looking at those types of assets in this environment because of how tight cap rates are on neighborhood grocery anchor, the unanchored strip center segment you’ve heard a lot about, there’s a lot of capital flowing into that. You’ve seen cap rate continue to compress on that product type. We believe that our differentiation is utilizing our platform for more complex and sometimes more difficult operational assets that we can create value that we don’t believe others can. That doesn’t mean that we’re not going to continue to pursue more neighborhood grocery-anchored opportunities when the pricing aligns with our cost of capital. But where we are today in the cycle, that’s just what we’re focusing on. And the other component is, of course, our relationship with our joint venture partners, that we can continue to look at opportunities alongside to help enhance our yield utilizing the platform with the joint venture.
So it’s certainly something that we continue to look at. And as the market continues to evolve, we’ll deploy our capital the best way possible.
Conor Flynn: Floris, the only thing I would add to that is you’ve seen for a while, the lines are blurring across all different retail formats. And what I mean by that is really the merchandising mix. And so you’ve seen sort of the best-in-class mall tenants gravitate towards open-air shopping centers. You’ve seen certain lifestyle centered retailers gravitate towards all formats of open-air centers. And so I think with our operating team, we really focused on, again, enhancing the Rolodex we have. And so looking across all the different formats, they are starting to look similar to one another. And making sure that we have the Rolodex across all those formats have been so critical to our success. And I think that’s what we do well is look at how do we go about extracting the most value, having the — enhancing the merchandising mix by utilizing that Rolodex across all different formats.
Operator: Our next question comes from Juan Sanabria of BMO Capital markets. Please go ahead.
Juan Sanabria: Hi, good morning. Just wanted to switch back here in terms of the Q&A. Just wanted to get your strategic views or sense of the pharmacy and kind of health and wellness business trends and credit there. Just we’ve had Rite Aid, BK, Walgreens is shrinking and Walmart’s now pulling out. So just curious on how you see the space evolving? And how you’re positioning the company just to deal with the changing landscape.
Conor Flynn: Sure. I think each of those have their own story, and as we know, with Rite Aid and having to settle a lawsuit was a big disruptor for them. But there is — it’s no secret, obviously there is disruption and I think a shifting landscape in the pharmacy business and how it services the customer. That said, health and wellness, I think is more at the forefront now than it ever has been with consumers both in how they maintain themselves with fitness, mind and body really being a focus. Food, what they’re eating, how they’re eating, what they’re consuming. You’re seeing a lot of innovation and creativity in the SMB world. New concepts, Kava has gone public not too long ago, seeing good growth and expansion there. You’re seeing some more of the traditional format F&B, QSR concept involve their menus to accommodate the new consumer tastes.
And then you do see continued opportunity with the med spot concepts, urgent care and the services businesses related to the customer, and then what fits well in the open-air sector. That said, individual businesses have different business models, individual businesses see opportunities while others see some disruption. But I think you have to look at it more holistically where is the macro trend going? I think it’s still very much supports it. But again, trends are cyclical and there’s always moments of disruption. And obviously, that also creates opportunities for newcomers and other entrants to evolve their business to capitalize on that.
