Anthony Saladino: It is.
Mitch Germain: Okay. Great. Thanks, guys. Good quarter.
Jim Connolly: Thank you, Mitch.
Operator: The next question comes from Mike Mueller with JPMorgan. Please go ahead.
Mike Mueller: Yes, hi. I guess on the developments, the build-to-suits, I mean, can you talk a little bit about return requirements just given the capital markets backdrop, given what you would traditionally underwrite on spec and just kind of put all that into context?
Jeff Witherell: Yes. I think it’s fairly simple. I mean, we’ve been building to high-single-digits, and I think that’s, you know, if we can build to a high-single-digit, an 8 or a 9, you know, it accretive. So that would be how that would measure up. I don’t know, if you want more color, I don’t know what it would be, but pretty simple.
Mike Mueller: Okay. Got it. And then I guess, you know, with acquisitions being pretty spotty at this point, I mean, how should we think about dispositions over the next few quarters? I know you have something lined up in the fourth quarter, but even if you don’t see anything on the acquisition side, do you think you’ll still be somewhat active on the disposition front?
Jeff Witherell: To a certain extent. I mean, again, we’ve, I think we’ve talked about this a lot and we’re happy to re-emphasize that, you know, like Chicago was a perfect owner-user building, right? There was limited parking, limited docks, that made a lot of sense to sell it. And an owner user is not looking at the cap rate, they’re looking at maybe the next 20-years. So whether they pay $10 million or $14 million, I don’t think it really matters to some people if they want that building and they want the location. New Jersey is kind of a similar play for us. We have just a handful of other properties that we’ve identified. Part of the strategy was to sell out of New Jersey. We have one building there. We have one building in Milwaukee we probably will sell as we indicated.
So we’re not going to gain scale, we’re not going to be in a market. And our strategy is to try to manage, we’re managing 70% of our properties in-house. That will continue to take up over time. And I think that has — in the environment for the next couple of years, I think real estate operators, I think you’re going to see that we’re going to deliver results of that strategy.
Mike Mueller: Got it. Okay, thank you.
Jeff Witherell: Thank you.
Operator: The next question is a follow-up from Anthony Hau with Truist. Please go ahead.
Anthony Hau: Hey, Anthony, I have a follow-up question about the swap. What rate should we expect for those?
Anthony Saladino: I think we’re going to come in at an all-in rate of about 6.5.
Anthony Hau: Okay. And for your watch list, has that changed over the past six months? And do you expect like bad debt reserves to return back to like pre-filler level?
Anthony Saladino: Our watch list, and Jim can affirm this, has not materially changed. One in, one out. It is only a handful of tenants and in terms of bad debt, you know, we’ve had de-minimis write-offs pre, during and post-COVID. We’re not anticipating a material increase in the run rate as relates to bad debt.
Anthony Hau: Thank you.
Jim Connolly: Thank you.
Operator: There appear to be no further questions at this time. I would now like to hand the call back to Mr. Witherell for closing remarks.
Jeff Witherell: Thank you all for joining us this morning. We are available for follow-up questions as usual and we’ll talk to you next quarter. Thanks so much.
Operator: The conference has now concluded. Thank you for your participation. You may now disconnect your line.
