Pam Kessler: Sure. Sure. It’s Pam. So, equity on the ATM is our primary way of financing your one-off investments, like the KD loan that we did this year. We’ve almost equitized that 100%. And going forward, for the smaller one-offs or two-property portfolios, the ATM is great. If we were looking at a large portfolio transaction, I know it sounds very old-fashioned, but there’s still an overnight marketed deal that could be done and that’s a good way to place stock in the hands of new potential investors. But we don’t have anything like that on the horizon right now. And as I discussed, we have the $80 million in loan proceeds that currently we’re anticipating are going to payoff and so those would also be used to fund new investments.
Rich Anderson: Okay. What about disposition?
Pam Kessler: We’ve done a lot of dispositions over the past 24 months and we don’t have anything immediately on the horizon. So, we’re not looking right now at financing growth with any more dispositions.
Rich Anderson: Okay. That’s it for me. Thank you.
Pam Kessler: Thanks.
Operator: Thank you. [Operator Instructions] Our next question is coming from Michael Carroll with RBC Capital Markets. Your line is live.
Michael Carroll: Yeah. Thanks. Sorry, I was missing some of these questions during getting some bad feedback. It seems like everything’s fine now. But can you provide some background on the HMG lease negotiations? I know last quarter, you temporarily extended that lease to August, and today, you announced the amendment through the end of 2028. I guess, what changed there? I guess, what facilitated this lease amendment that increased your rent and extended the lease term?
Clint Malin: Hi, Mike. It’s Clint. So, we’ve been actively working on this. The — as the buildings have increased occupancy, as margins have improved, it’s really trying to figure out how do we structure that from a rent basis. You had the pending staffing rule that was out there. It was just finalized recently. So, there were these elements that were out there that we needed to collectively focus on with HMG to be able to look at a longer term horizon, which it took some time to do that. But as you saw from the rent growth that we’re getting off of this, not only in 2024, but going forward, that was a positive as well.
Michael Carroll: Okay. And then, correct me if I’m wrong, Clint, but are there two different master leases?
Clint Malin: There are not. We have — we talked initially about…
Wendy Simpson: Talking about the other master lease.
Clint Malin: Oh! The other one. No. Yeah. There is two other — we have two separate master leases. Yeah.
Michael Carroll: Great.
Clint Malin: And then, also, Austin is on the — we had the line of credit outstanding with HMG as well that we needed. That was a temporary financing, not temporary, but it was a short-term financing when we recently took the properties back from senior care centers. So, we wanted to be able to get that paid off to redeploy at higher yields, because that was a 4% yield on that line of credit.
Wendy Simpson: Yeah.
Pam Kessler: So, they needed to get…
Wendy Simpson: Yeah.
Pam Kessler: … a working capital line of credit.
Wendy Simpson: Yeah. Yeah. And they need a longer-term lease to do that. And just to clarify for everybody, with HMG, we have two separate master leases. We’ve had one which covers two properties that was pre-existing, this new 11-property master lease. I think there was some confusion around that. So, there are two separate master leases. We are just talking about the 11-property master lease.
Michael Carroll: Okay.
Clint Malin: So, also on that, too, is we want to look at how do we get — how we ramp up rent on this? What was important to us in this negotiation was getting a fair market rent reset at some point and we were able to negotiate that into the overall terms of the amendment.
Michael Carroll: Okay. And then what’s the rent on the two-asset master lease and do you plan on selling those?
Clint Malin: No. We don’t have any plans on selling those. Obviously, it was structured before and it’s typical where you’ve got a 10-year initial term.
Michael Carroll: Okay. Great. And then…
Clint Malin: [Inaudible]
Michael Carroll: Okay. Great. Sorry. The feedback or the echo’s back. So, it’s hard to ask a question. But just real quick, on the market-based lease rent forecasts that you provided, that you kept at the $3.3 million for 2024, does that rent include anything related to the ALG April transitions? I know they’re not paying rent through October, but are they expected to pay rent in November and December, and is that included in that $3.3 million number?
