Operator: Our next question comes from Greg McGinniss with Scotiabank.
Greg McGinniss: Well, everyone, thanks for taking the question. So obviously, it takes time for sellers to recognize reality, and for cap rates to increase. So how are you weighing deploying capital today at these seven, low seven cap rates, versus holding back, potentially collecting some cash interest income, and investing in a few quarters once cap rates move higher? Based on our math, long run IRR tends to really appreciate another 25 to 50 basis points of investment yield.
Mark Manheimer: Yes, sure. That’s a good question. We’re, really for the fourth quarter, largely done with the acquisitions. Yes, we — the guidance, I think — the slight tweak there really relates to we’ve got some properties that we’re looking at selling and we’re relying on other buyers to come through. So if they don’t come through, then that number might be a little bit higher than $450 million. If they all come through, that might be a little bit less, but that’s somewhat out of our control. But yes, we have some time to deploy the capital from the most recent equity raise. And we do feel like cap rates are likely to be higher early 2024 than where they are today. How much higher they go — a little bit difficult to say — but we certainly want to reserve some dry powder for early next year.
Greg McGinniss: Fair enough. And then year to date, you’ve had $189,000 of earned development interest, which has been offset by the near $700,000 of capitalized interest expense through AFFO. Is it possible for that to current AFFO headwind to turn into a positive, or a tailwind, into 2024?
Dan Donlan: Yes. I mean, it should continue to grow. That’s really the interest we receive from developers as we’re funding their development. You should see it start to tick up some over time. I don’t think it’s ever going to eclipse the capitalized interest.
Greg McGinniss: Is that part of maybe some of the headwinds on a deal that you agreed to perhaps before cost of capital increased this much?
Dan Donlan: Yes, look, I mean, some of the developments that we entered into were in the first and second quarter, and the yields on those on were low sevens, high sixes. I would note that they had much longer lease terms than what has historically been achieved with those retailers, as well as annual bumps, which you know has not also been historically recognized as well.
Greg McGinniss: And so sorry, last follow-up here.
Dan Donlan: Go ahead.
Greg McGinniss: Yes, I can appreciate how you guys were able to change some of those lease terms that we hadn’t seen in the past, which definitely is a positive for those. In thinking about here going forward, have those same retailers been open to further increasing potential yields on those investments?
Mark Manheimer: I mean, I think some of the retailers are really pressed to grow their store count. They really need institutional capital to come in. They can’t rely on the 1031 market like they had in the past through their developer network. So hard to say exactly where all those negotiations go as they’re ongoing, but I think if you need institutional capital, most institutions like us like to have annual increases in the leases. So I would expect that to continue on the margin.
Greg McGinniss: Great. Thank you.
Operator: Our next question comes from Haendel St. Juste with Mizuho.
Ravi Vaidya: Hi Good morning. This is Ravi Vaidya on the phone for Haendel. Hope you guys are doing well. During the quarter, you issued equity when the stock was at $16.50. Can we consider this a watermark as to when you’d consider issuing equity again?
