John Thomas: Yeah. Generally, and we’re IRR investors. So, depends on the annual increases where they are market rents and things like that. So it’s a combination of factors, but from a cap rate perspective, just the market generally is €“ it’s we’re seeing trades very few. But we are seeing trades in the mid 6s on assets that if they were trading, let’s just call it seven. We would be pretty excited about it moving in the right direction. So it’s just few and far between, but we think the market is moving in the right direction, as a buyer, in a long-term investment.
Michael Carroll: Okay. And what’s the appropriate IRR target? I mean, trying to translate this from a cap rate to an IRR. I mean, are we talking about 8% plus IRR?
Jeff Theiler: Yes, I think, that’s a fair way to think about.
Michael Carroll: Okay. And then are these high quality MOBs so like off campus affiliated with a major health system. Is that what we’re generally talking about here?
John Thomas : Yes. And we’re very transparent. That’s all we buy. And so that’s what we’re talking about. So you can get lower quality at a higher rate. You can do other asset classes at a higher rate. But right now for Class A assets and that’s and I think, in part that’s where we see development kind of leading the way for the next several years is health systems really we’re looking for new strategic locations. And we’re working with several right now on kind of helping them develop those locations and getting in a more attractive yield in the current cost capital environment.
Michael Carroll: Okay. And then I know earlier in your prepared remarks and through some of these questions, you talked about selectively not renewing some tenants if you think that there’s a better tenant that could take that space. I mean, are we talking about some of the things that you already did or are there additional leases that you plan on doing this with in 2023?
John Thomas : That’s a great question. So it was about — we have 16 million square feet, and we’re talking about 40,000 square feet where we did that last year and we’re already backfilling that space. It just takes time for the new leases to commence post TI. There will be a little bit of that in the first quarter of this year, but it’s — when the tenant has too much space, I mean, that’s almost worse than having the tenant kind of renew a lease and occupy space that we think there’s a better market rates for — out there for to compete for that space. So, we have a little bit of that in the first quarter of this year. But it’s not a lot across 60 million square feet. But in short-term, it’s negative; long-term, it’s very beneficial to the company.
Michael Carroll: Okay. Great. Thank you.
Operator: Our next question comes from Dave Rodgers with Baird. Please go ahead.
Dave Rodgers: Oh, yes, good morning. Just a couple of follow-ups on investments. I think the first would be around the development funding pipeline 200 million that you talked about. I think this was a similar number to where you started last year. Maybe give us a sense of kind of how it kind of wound up in 2022 versus that expectation, I think was probably lower, but just to give us your own assessment of that. And then I guess what gives you confidence in that number for this year and debt markets maybe part of that? The second would be maybe a follow-up to Mike’s question just a minute ago. In terms of the investment activity that you expect to accelerate in the second half, is that because you’re seeing more RFPs on the market, more packages coming out? Is it more hope or you’re actually seeing good amount of activity that would lead you to be able to close activity or close acquisitions in the second half of the year?
