Tayo Okusanya: Got it. And then what do you think you can actually raise fixed rate paper today, whether it’s 5-year or 10-year, unsecured?
Brian Mitts: Yes. Unsecured, we don’t have an unsecured rating, so that’s not really applicable to us. Fannie Freddie debt is pricing in the 6% range on a 10-year fixed basis. The – you could do things – we could do things a little bit better as a sling sponsor Freddie, probably get in the mid-5s, but that’s where it is today if we went out and try to fix everything.
Tayo Okusanya: Thank you.
Brian Mitts: Thanks.
Operator: Our next question comes from Barry Oxford from Colliers. Your line is now open.
Barry Oxford: Great. Thanks guys. On the interest line item quarter-over-quarter, can you talk about what drove the interest line item to be down as much as it was? And how should we think about that going forward?
Brian Mitts: Yes. Bonner, would you take it?
Bonner McDermett: Yes. I think given what we thought we were looking at the end of the year, looking at the forward curve, obviously, it was priced in a pretty significant amount of five cuts, we were talking in Q4. Now, that market is somewhere around two cuts, plus or minus, the SOFR curve at 12-31-24 [ph] is significantly steeper than it was expected to be everyone talked two months ago. That has an impact on the fair value of the swaps. So, there is some non-cash mark-to-market activity that I think was a little bit more significant than we estimated. We got a benefit in the first quarter from that. I think that, that’s the biggest differential you are probably seeing in the six months time.
Barry Oxford: Right. So, with the adjustments in the swap value?
Bonner McDermett: That’s right.
Barry Oxford: Right. Okay. No, great. It’s kind of what I thought it was given your comments previously, but switching gears, you indicated that you were looking to buy back shares. Are you prioritizing the buyback of shares over acquisitions or not necessarily you could be doing both of them at the same time?
Brian Mitts: Yes. We are prioritizing the buybacks as it sits today, because it’s – there is a clear – there is still a clear gap between public and private market values, like significant, almost 150 basis points, in some cases, 200 basis points as it relates to our company. The Blackstone ARC deal was 5.9 headline cap rate, but if you dig into it, it’s 5.3. That’s a big bet. And so like it’s just – we can’t find anything in the market and the transaction volume is, again, the lowest it’s ever been in the last decade. So, it makes sense to buy a portfolio that we know and loves in the 7s.
Barry Oxford: Right. Exactly. That makes sense. Appreciate it guys.
Brian Mitts: Thanks a lot.
Operator: No further questions as of the moment. I would now like to hand back over to the management for the final remarks.
Brian Mitts: Nothing further from us, I appreciate everyone’s time and thoughtful questions. And we will speak next quarter. Thank you.
Operator: Thank you everyone for attending today’s call. We hope that you have a wonderful day. Stay safe and you may now all disconnect.
