Nick Thillman : Maybe touching a little bit more on kind of your markets in the Golden Triangle in the onshore and near-shoring trends. Does this change the type of product that you’re willing to own? Like I know like 25% has some part of like manufacturing. Is that a product type that you guys would like to own more of going forward? Or is that included in like this acquisition pipeline? Or are you more looking at the distribution, like supporting these types of onshoring and these facilities kind of coming back to the States?
Jeff Witherell: Nick, it’s kind of the same story. We’re not really making a pivot, if you will. So our — the buildings we own are rectangles, right? They’re very utilitarian. And so the manufacturing that you can do in them is conducive to warehousing and other things. So as you know, there’s a variety of type of buildings. Some are more conducive with cross dock for high throughput distribution. A lot of our buildings are warehousing. They’re not logistics centers, which is a little different. And so it really just depends on the property that’s in front of us, the opportunity that’s in front of us. So we want to make money on each building we buy, as you know. So what we’re not going to do is we’re not going to own pure manufacturing facilities, right, buildings that are specifically built for manufacturing, because that limits its use, right?
So what we are interested in — and I think you can see this in Memphis and Jackson, Tennessee, where Ford has set up Blue Oval City. It’s — we’re not going to benefit from Ford’s manufacturing facilities, but we are going to benefit from all the ancillary services that are provided to Ford. So that build out is — we own a large facility in Jacksonville with additional land — I’m sorry, Jackson, not Jacksonville, Jackson, Tennessee. And we’re starting to see some benefits in Jackson as well. So it runs the course.
Nick Thillman : That’s helpful. And then maybe as we’re looking at deployment here in 2024, based on like development versus acquisitions, are you seeing more opportunity in one bucket or the other? And maybe what markets are most interesting today?
Jeff Witherell: So from our standpoint, we’re not seeing a lot of development activity. We continue to have a full array of build-to-suit across our properties. So we’ve got packages out on every piece of vacant land. So we certainly will entertain a build-to-suit at the right yield. I think we’ve proven out that we can build buildings on budget and on time. So I think development will really just be driven by a build-to-suit scenario. So acquisitions are really the key. And again, really within our markets, we’re seeing opportunities start to percolate across all of our markets. So again, as I sit here today, I don’t think we would say, well, we’re not going to buy here, but we will buy there. It’s really just going to be driven by the opportunity set.
And the variety of deals that are out there are really starting to open up. I mean, there’s value add. You’ve got some short-term WALTs. You’ve got some long-term product that’s now priced right. So the world has changed. And we’re looking forward to the opportunities coming up here at the end of this year and into ’25.
Nick Thillman : That’s helpful, Jeff. And then maybe last one for me. Anthony, any changes — or maybe give us an update on what the tenant watch list is? And then what is kind of baked in for bad debt expectations for the same-store guide this year?
Anthony Saladino: Certainly. The assumption is about 25 bps in guidance in ‘23. I think we realized about maybe 12 bps. The watch list hasn’t materially changed in terms of its composition or size. There’s a handful of tenants. There’s been a trade out of 1 or 2. But if all of those did not come to fruition, we’re talking about less than 10 bps in terms of a write-off.
Operator: And our next question is from Mitch Germain from Citizens JMP.
Mitch Germain: Thanks again for all of the information last night. Jeff, you talk a lot about onshoring trends in the Golden Triangle. I’m curious if you’re seeing how this is having an impact on demand in your leasing pipeline?
Jeff Witherell: As we sit here today, I would say results have been limited as to “we’ve leased to this company based on onshoring.” But if we go back over the last 2 years, especially in Atlanta, we had quite a bit of activity on the new building that we — the 2 buildings that we built that are now fully leased. We had quite a bit of activity with foreign companies that are manufacturing oriented, I’d say light manufacturing oriented. So we had quite a few RFPs out on foreign companies. We had one from Belgium and a few other ones that we’re interested in setting up shop. And that part of Atlanta is a magnet for light manufacturing opportunities. I think you know the American Nitrile story in Grove City, Ohio. That was quite a few years back, and we leased that up to a nitrile, basically a latex glove manufacturer, the first one in the United States in 50 years.
So we’ve seen it, and we’re starting to see more of that. I know in Chicago we’re starting to see some of it. But to say that we’ve leased a building to this particular company, I don’t think it hasn’t — has happened in our portfolio yet.
Mitch Germain: Great. That’s super helpful. You mentioned dispositions. I know, obviously, Jersey was a market where you didn’t really have much size and scale. Is there any sort of region that stands out to you as one that might have properties that you’re looking to queue up for a disposition?
