Heath Fear: Linda I’ll just put a specific number to that. So this year and next year, we said we’re going to spend around $200 million and we’re on track. So think about $100 million total and leasing capital for next year.
Linda Tsai: Thank you.
John Kite: Yes, so if you – yes, if you ran rate in this quarter’s TI and LC, it’s pretty good run rate.
Linda Tsai: Thanks. Thank you.
John Kite: Thank you.
Operator: A moment for our next question. And it comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed.
Todd Thomas: Hi, thanks, good afternoon. First, I heard your comment on the disposition pricing in general in the quarter but can you share the cap rate or the initial yield on the acquisition of Prestonwood Place, and what the growth opportunity is for that asset? And then just stepping back, I mean, it seems like there has been a little bit of an uptick in activity. More recently, we’ve seen a bit of activity reported by a number of REITs this quarter. Are you seeing additional assets – you know, surface for investment purposes, where there – you could be able to – maybe accelerate efforts to put some of the company’s dry powder to work in the near term?
John Kite: Sure. I mean, in terms of cap rates, I mean, we did – as you said, we did talk about what the dispositions were in ’23. In terms of the acquisition of the Dallas deal, I would think of it as kind of a higher 6% going in. But really we looked at that on an IRR basis, and we think the IRR is kind of more like 8.5% to maybe even 9%, depending on the rollover and the rents that we can generate. I don’t think a lot of people are looking at this right now at going in cap rates, I really think they looking at IRRs, Todd. So now that being said, it kind of segues into your conversation around other activity and certainly in terms haven’t had a lot of time to study for example the spin transaction curbside or whatever that transaction, but I will tell you that what I did notice is, it looked like there was $650 million of asset sales in the quarter, you know, at cap rates kind of like a mid-6% or 6.5% cap.
I think that’s a pretty good indication that the market is strong and there’s not a lot of product. And when product comes up, you know, that looks like a pretty good mark to me. And based on where – you know, certainly we are trading that just goes to show you the disconnection between kind of the stock and private market cap rates. But I think that – yes, I mean, there – it looks like things are starting to happen, which is probably not a surprise as we go into a new year and into the finishing out of the last year, but I do think that was a nice mark.
Todd Thomas: So I guess, following up on that, are there opportunities for you to take advantage of – you know, that private market there and there are additional disposition opportunities for you where you could maybe pruning the portfolio a little bit further?
John Kite: I mean, I think as we said in the call, we’re not anticipating any further activity in 2023. But as we look at 2024, certainly, that is one of the things that we will be looking at in terms of capital like you know, we can – should we be recycling capital when we see the disconnection in the NAV versus the stock price and we can look at that in various forms. And one of the other things Heath said is with our balance sheet, you know we have this very, very strong balance sheet with very low leverage, lots of optionality. So if things present themselves, that we believe have great opportunity associated with it. We can act because that’s what we’ve worked for over the past five years to be in that position of being offensive if the time comes or to continue to kind of wait for that opportunity.
Todd Thomas: Okay. And then just last question, I guess, a quick follow-up on overage rent and the commentary there. You know, 3Q was above 3Q last year by about $500,000. Should we assume that 4Q is likely to be higher than 4Q last year? And then maybe assuming a relatively flattish sales environment, you mentioned retail sales have been better than that, but should we assume a similar amount of overdraft perhaps trending into ’24?
Heath Fear: Yes. Todd, we’re modeling the fourth quarter is flattish to last – fourth quarter. But like John said the overdraft has been an incredible boon for us this year. It’s the highest overdraft we’ve ever experienced. So – and it’s also incredibly broad-based. So when you’re looking to – what are the themes around the overage rent? It’s just diversity is the main theme. So really, really pleased with those results. And hopefully, that’s an area for us to outperform in the fourth quarter.
Todd Thomas: All right. Thank you.
John Kite: Thanks.
Operator: Thank you. And this concludes our Q&A session. I would like to turn the call back to Mr. John Kite with his closing comments.
John Kite: Well again, thank you for everyone for joining us today, and look forward to hopefully seeing many of you at NAREIT. Thanks.
Operator: Thank you all for participating, you may now disconnect.
