Operator: The next question comes from Mike Mueller of J.P. Morgan. Please go ahead.
Mike Mueller: Yes. Hi, I guess looking at the full year plan dispositions; it looks like another maybe $100 million to $200 million. And those, I guess the guided to cap rates look to still be in the mid-8s. Just curious, what’s making up that remaining disposition bucket?
Conor Flynn: Sure. We frankly don’t have anything specifically identified for that. We’ve executed, as we talked about on the 10 that we really wanted to get done and we got done with it quickly. So on a go-forward basis, our goal is really to improve the quality portfolio and the growth profile. And frankly, it doesn’t matter if that’s a Kimco legacy asset, RPT, Weingarten, JV, wholly-owned, our job is to identify those assets that have some movement in the direction that is not in line with where we’re trying to go with the portfolio and remove them before they do so. So these assets are very dynamic and changing at all times. The vast majority of our portfolio continues to improve and we’re able to add value and then occasionally there’s an asset here or there that doesn’t fit that profile that we look to prune.
So we really are back to just the normal course, pruning of the portfolio again, regardless of when we bought it or where it came from, and we’ll selectively identify those. But we do expect that we would be on the lower end of the range. Anything that we do look to sell going forward, while the cap rate range on the overall blend remain the same in our guide. We wouldn’t anticipate selling anything that is not at the low end or below that end of the range. There may be a couple of joint venture assets that end up going to the market and those would be at much tighter cap rates in that range. So we kept the range intact just because we don’t know what exactly that portfolio looks like. But we do know that going forward; anything that we sell would be below that range going forward.
Operator: Our next question comes from Anthony Powell from Barclays. Please go ahead.
Anthony Powell: Hi, good morning. You mentioned that you saw lower, I guess, landlord expenses than you expected, and we noticed that too. Maybe talk about what drove those lower and your opportunity to continue to control expenses going forward?
Conor Flynn: Yes. I mean, our team’s done an exceptional job just really looking at every expense line item and finding opportunities to either do it more efficiently, find ways to save and just make adjustments in terms of our operating strategy. And so I have to commend the team and just really digging deep line-by-line and really finding a better way to manage the business and manage the sites locally, as a result of that, that helped drive our expenses down for the quarter. There is some seasonality there too, just in terms of timing of when things actually hit in our book, but in general, that was sort of the broad effort that occurred.
Operator: The next question comes from Wes Golladay of Baird. Please go ahead.
Wes Golladay: Hey, good morning, everyone. I’m just looking at the presentation. You have about 6,500 multi-family units entitled. Do you have any interest in starting developments this year to deliver to a low supply market a few years from now?
Conor Flynn: It’s a good question, Wes. I mean, we’ve always looked at optionality as being a benefit to us on the entitlement program. We do believe that future value creation is embedded in our portfolio, and unlocking that is a good way to sort of set up different levers for growth when supply and demand and cost of capital is in your favor. It’s hard to see sort of putting a shovel in the ground today, making a ton of sense where our cost of capital is. So what we’ve elected to do, as you’ve seen in the sup is contribute entitled land into a joint venture as our capital and then put in preferred equity that has a higher yielding return on it. That being said, we do like the ground lease approach where we have no capital outlay and multi-family developer can come in and develop the entitlements, and we retain the ownership of the fee position.
So we have a number of different ways to do it without having a significant amount of capital going out. That’s not returning anything day one. And we’ll continue to take that approach, being very selective and understanding that we’ve also monetized entitlements where we don’t see fit in terms of developing in ourselves, like office entitlement. So there’s a number of different ways we can look at it. And every single asset is its own analysis. And so we try and take it one by one and identify what’s the best way forward for that asset.
Operator: The next question comes from Linda Tsai of Jefferies. Please go ahead.
Linda Tsai: Yes. Hi. As you look at the SNO pipeline, you have good lease-up opportunity ahead still, do you expect the SNO pipeline to be higher or lower by year-end versus now?
Conor Flynn: Yes, good question. Obviously, this quarter we did compress at 20 basis points. We also absorbed the RPT portfolio. We compressed that pipeline actually significantly as I mentioned earlier in the call, a couple of big deals started to cash flow in Q1, which was driving that benefit there. That said, we do continue to see upside on the continued lease-up. I mentioned earlier that we’re seeing opportunities on some vacancies that have been vacant a little bit longer than others now, and as well as sort of the Tier 1 inventory that we have that continues to get absorbed. So when you roll it all together, I would anticipate that our SNO pipeline will remain slightly elevated as a result of the continued lease-up activity.
But when you look at what we’re contributing in terms of new cash flows, we obviously had about just over 2 million contributed in Q1 from new openings, about 150 plus leases that commenced from there. They’ll contribute about $15 million in total for the balance of the year. And then in addition to that, we’re targeting around $25 million to $30 million to be contributors for the balance — for in totality for this entire year. So we’re starting to see those benefits, as you saw with our Q1 results that it is contributing to the bottom line, but we continue to see opportunities on the lease-up side. So that’s why I think it probably will remain a little bit elevated for the short-term here.
