Mark Manheimer: Yes,I mean, I think we’ve really kind of seen this most of the year and probably even more so today where the private buyer is more or less gone. The opportunity standpoint has really never been better in my entire career. That being said, the cost of capital is also a challenge, so we need to kind of balance that, but really developers and tenants trying to grow, even sale-leasebacks, certainly seeing a lot of opportunity there. It’s really gone from a full-blown seller market to a full-blown buyer market — with no bids really in the private market other than the occasional 1031 buyer — which we’re trying to take advantage of the disposition market. And so it’s really looking at the overall trends of our transaction market is likely down 70%-80%, but competition is down really 90%-95%.
Joshua Dennerlein: Great. Thank you.
Operator: Our next question comes from Eric Wolfe with Citi.
Nick Joseph: It’s actually Nick Joseph here with Eric. Just back to sourcing of investments, just kind of curious your thoughts and kind of the rationale of issuing equity in the mid-$16s given the NAV, at least street NAV, in the nineteens, where you’ve talked about investment spreads and transaction cap rates historically. So just trying to understand the thought process there and kind of a value creation calculation.
Dan Donlan: Yes. Hey Nick, it’s Dan Donlan. When you think about that price and you include the de minimis net price of that, and you think about where we raised the recent term loan, and then the impact to free cash flow, we got to have basically a 100 basis point spread relative to where we saw our pipeline shaping up into the fourth quarter. So, that’s really kind of — we focus on earnings growth. We obviously look at implied cap rate as well. And it was probably, marginally dilutive to implied cap rate by 10 basis points or so. So that’s the way we looked at it, and it certainly was accretive to our AFFO per share.
Nick Joseph: Yes. I guess one of the advantages that you have is that you’re smaller and so you can kind of grow off of that base. And so how do you think about the 100 basis points investment spread off of that and kind of taking away some of that advantage versus putting pencils down and waiting for better opportunity?
Mark Manheimer: Yes, sure. I mean we’d like to get back to more normalized spreads, which I think we’ve said before, is kind of in the 150 basis point to a 175 basis point spread. But yes, we feel like 100 basis points is adequate and provide some growth in there. Scaling into the G&A is also something that is we view it as helpful.
Nick Joseph: Thanks. And maybe just finally, if you if you did put pencils down, and did no deals going forward or beyond what’s in the pipeline today, what would that imply for growth in 2024?
Dan Donlan: Yes. Hey, Nick. It would basically imply kind of low single digit year-over-year AFFO growth. The building blocks of that is internal rent growth of about 1%. Credit loss is around 30 basis points. Reinvestment of our free cash flow after dividends, let’s call it, $32 million of free cash flow after dividends. Obviously the full year impact to 2023’s investments and leverage in at around the midpoint of our range. What I’d say is if we fixed our $175 million 2024 term loan to — we push it out to 2027, had we not done that, we probably would be looking at more mid single-digit AFFO growth year over year, but we thought it was prudent given the environment we were in May and June to push off that term loan and swap it to a fixed rate. So we’re glad we did it.
Nick Joseph: Thanks. That’s very helpful.
