Alec Feygin: Just one quick one for me. What type of tenants are in the held for sale category? And do you have visibility to when those deals might close, if it’s going to be in the first half?
Mark Manheimer: Yes. I mean it’s a pretty big mix. I mean, we mentioned some of the assets that we’re potentially looking at — that we’re looking at potentially recycling out of with the same tenants. And then there are handful in the convenience store and paint supplies industries.
Operator: Next question comes from the line of Linda Tsai with Jefferies. Ms. Tsai, your line is live.
Linda Tsai: Oh. Sorry, all my questions have been answered.
Operator: Our next question comes from the line of Josh Dennerlein with Bank of America.
Farrell Granath: This is Farrell Granath on behalf of Josh Dennerlein. I was wondering with the implied growth for your current 2024 guidance, how much of that is being driven off of internal versus external drivers?
Daniel Donlan: As most of these companies, most of the growth is coming from external growth as well as a reduction in cash G&A. But our internal growth is typically just a little bit less than 1% in any given year.
Farrell Granath: Great. And in terms of the investments going forward, how much of that would be of the mix of capital? Would you feel comfortable in terms of like cash, equity, debt, if there’s like a baseline that you target?
Daniel Donlan: Yes. I mean historically, we’ve kind of run the company around 65% equity and free cash flow and 35% debt. Thankfully for us right now, though we have over $450 million of prefunded equity before we would need to tap the revolver. That consists of $100 million of available principal in the 2029 term loan, that’s $290 million of unsettled forward equity, that’s $30 million or north of $30 million of free cash flow after dividends and then about another $30 million of cash on hand.
Farrell Granath: Great. And if I can just ask one more. In terms of kind of targets of acquisitions going forward, I noticed there’s like a slight uptick in investment grade, also within like the dollar store area. Is this a more strategic, I guess, plan going forward to be targeting these? Or is this a better pricing opportunity that you’re seeing in the market?
Mark Manheimer: Yes. We saw a good opportunity with the dollar stores more recently. So that’s been an uptick. Obviously, both of the two tenants that we have in that category are investment grade. So I think that kind of drove it up a little bit. And as we recycle out of some of those assets, that may tick down a little bit. We’ve historically guided people to between 60% and 70% investment grade, although it’s not — we’re not really that dogmatic about whether it’s investment grade or investment grade profile or even a strong performing sub-investment-grade tenants. So I would expect it to likely gravitate slightly downward, but not too far off from where we are today.
Operator: We have no further questions at this time. Mr. Manheimer, I would now like to turn the floor back over to you for closing comments.
Mark Manheimer: Thank you, operator, and thanks, everybody, for joining today. We look forward to continuing the dialogue at the upcoming conference season. Have a good day.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
