Kevin Habicht: Yes. Good question. Yes. So it was about €“ in the way we think about it, it was about $188 million, which is close to the number you’re talking about. And it probably be a touch lower in €˜23 as the rent deferral repayment slowdown, and so that will take a little bit out of that number. So the number in our mind is €“ and we would suggest others think about is about $180 million of free cash flow after all expenses, all dividends being available to fund acquisitions.
Ronald Kamdem: Got it. And then my last one if I could sneak it in. Just on cap rates, I guess, I’m surprised they are not rising faster sooner €“ more quickly, you guys are well capitalized and can be opportunistic. You had a little bit of a bump in 4Q. But again, maybe asking the question before, why shouldn’t we expect cap rates to be up 25, 50 basis points higher in a pretty in a hurry here.
Steve Horn: The deals that we started pricing near the end of the fourth quarter that are going to close in the first quarter is where we’re seeing that 30 to 40 basis points again and we’re starting to see the deals that we’re pricing today, which most likely we closed in the second quarter, we’re seeing the market accept the higher cap rate. Now when I say the market, that’s the sale-leaseback market where they seem to be a little bit more sophisticated and they have access or they do a debt cost, I should say, which they may or may not be able to get, but they are also seeing the pricing significantly higher. Now the 10/31 market is still fairly robust, that we’re not seeing the increase in that market unless you’re willing to do 5, 6 years or 10-year leases, then you can get the bump.
But yes, 10/31 market is still holding a little sticky. But the sale leaseback market, they are understanding the €“ our cost of debt increased and they are accepting the cap rate increase.
Ronald Kamdem: Great. Thank you.
Operator: Thank you very much. Your next question is coming from Nick Joseph of Citi. Nick, your line is live.
Nick Joseph: Thanks. Maybe just on that last comment, what was kind of as the 10/31 market there and maybe compress some of that bid-ask spread that we’re currently seeing?
Steve Horn: You say that first part again, Nick, can you? Kind of broke up on me.
Nick Joseph: Yes. No, it’s really kind of the bid-ask spread, particularly on the 10/31 market. How do you see that playing out? What could actually make that start to close and see some more deals come through that channel versus the sale leaseback?
Steve Horn: Nick. I mean we are always looking through the 10/31 market but it’s such a small portion of our deal flow comes from the 10/31 market that I’m not really dialed in what it’s going to take to close that gap. If I had to speculate, the assets that are $15 million to $25 million in the 10/31 market, you are going to see the bid-ask spread close on those because you might require debt to buy them where the $2 million to $5 million, there is so much cash out there still that don’t require financing. I don’t see those cap rates moving all that much. But people are wanting to take the 4.5%, 5% returns.
