Operator: Thank you. One moment for our next question. Our next question will come from Wes Golladay of Baird. Your line is open.
Wes Golladay : Hey, good morning, Stuart. Follow-up question on the tenant health in the portfolio. Can you comment on your overall exposure to some of these branches of the banks that are in the news every day or — not every day, but every so often? And then second follow-up would be exposure to Bed Bath & Beyond. It looks like you have one buybuy BABY. I just wanted to make sure that, that was correct. And then just the final one, can you comment on your Rite Aid exposure? And how do you feel about that? Would you look to recapture any of the space this year?
Stuart Tanz: Sure. Well, Bed Bath & Beyond, we don’t have any — we do have two buybuy BABYs. But the ABR only accounts for 0.038%. So less than a half of 1% from an ABR perspective. These two buyback babies are in great locations, very strong sales. We don’t expect these leases to be rejected. However, we certainly have been very active in the market re-leasing both spaces, and we currently do have some very good tenants lined up if things were to go away. Rich, do you want to comment on bank branches and Rite Aid?
Richard Schoebel: Sure. In terms of Rite Aid, there’s only — they only account for about 1.7% of our total base rent, which is from about 16 leases, which are across our portfolio in all of our markets with many of those leases below market. One of the leases coming up in the next two years is a Rite Aid lease that is significantly in market. It’s one that we mentioned that is not renewing. We expect to have a very big spread on the replacement rent. And then in terms of bank branches, we really haven’t seen any follow-up from regional banks. We have received notice from some larger banks that they’re giving back some space, but those spaces that we’re getting back all incorporate drive-throughs, and we’re currently — while the rents still coming in, redesigning those buildings to facilitate the strong demand that we have for drive-throughs throughout the West Coast. So we actually see this as an opportunity to retenant those spaces.
Stuart Tanz: Yeah. In fact, in one situation, I think, during the quarter, Rich, we had Chase actually released a new lease on a Bank of America branch. So although we’ve seen a bit of fallout, we’ve also seen some activity on the other side in terms of new leasing. And then Rite Aid, I mean, I think as we’ve mentioned before, obviously, a number of our Rite Aids are newer prototypes, which means they’re on pads with drive-thrus. And in terms of sales, a number of our Rite Aids are in the top three in terms of sales. So we’ve seen this sort of play out before over the last 20 years in terms of dealing with Rite Aid. And we certainly feel quite comfortable where our portfolio stands today in terms of capturing and getting some nice upside of Rite Aid where to go away.
Wes Golladay : Fantastic. And then, I guess a quick modeling question, looks like other revenue was abnormally low this quarter, anything special going on there?
Richard Schoebel: Actually, last year, the other income was a lot higher, it was primarily related to an early lease recapture initiative, where we replaced an existing tenant. So that was kind of it was actually last year was the outlier.
Wes Golladay : Okay, fantastic. And I think that is it for me. I appreciate the time guys.
Stuart Tanz: Great, thank you.
Operator: Thank you. Again, one moment for our next question. Our next question will come from Michael Mueller of JPMorgan. Your line is open.
Stuart Tanz: Good morning.
Michael Mueller : Hey, good, good talk to you. You mentioned earlier in your comments that there’s some other centers that you’re thinking about listing for sale. And just curious about, how big that bucket of centers is, and what are some of the attributes of those?
Stuart Tanz: Sure. Well, we actually have, I think it’s the only other center that’s non-grocery anchored, we actually have on the market as well. And we actually do have an LOI that came in yesterday that we may execute on. So that potentially gives us another, I don’t know, $12 million or $14 million of proceeds. But outside of those two assets, we are looking at putting a couple of other stabilized fully leased assets on the market that have very little internal growth, like the one we’re currently selling in Portland on the market as well. And so the bucket does answer your question is probably four to six centers, depending on market conditions, and depending on pricing more than anything else.
Michael Mueller : Got it. And that’s four to six exclusive of the two that we know about?
Stuart Tanz: That’s correct. And that does exclude the densification as well. So I’m hoping that the multifamily market gets a bit better and we’re ready to go on selling both of those assets, which could provide another that’s called $20 million to $25 million of proceeds.
Michael Mueller : Got it. Okay, thank you.
Stuart Tanz: Thank you.
Operator: Thank you. Again, one moment, please for our next question. Our next question will come from Linda Tsai with Jefferies. Your line is open.
Stuart Tanz: Good morning, Linda.
Linda Tsai : Good morning. In terms of the $400 million bond at year end, where would that price today?
Richard Schoebel: Today, it would probably be in the low to mid 6% range, assuming a tenure at about 350 or 340.
Linda Tsai : Thank you. And then how much more does the drive thru benefit the cap rate of one in your shopping centers?
Richard Schoebel: In terms of our paths? The drive throughs certainly would certainly — I think it certainly helps the process, but it’s not going to drive cap rate by any meaningful difference. I think, drive throughs are more related to leasing and the incremental increase you get in leasing and in terms of rent. But from an acquisition or disposition perspective, we look at it as part of the overall property and NOI.
Linda Tsai : Thanks for that. And then, in terms of your 9%, Kroger and Albertsons exposure, has there been further communication of potential overlap?
Stuart Tanz: While we continue to communicate regularly with both Kroger and Albertsons and conduct business as usual, including renewing leases. We’re just not at liberty yet to discuss their consolidation plans and. And it’s just too early in the process in terms of the government and the FTC in terms of the process.
Linda Tsai : And then maybe just in terms of potential buyers for your 46 centers, how focused are they on potentially inheriting SpinCo assets?
Stuart Tanz: It hasn’t come up at all in terms of the discussions. The one or two deals on the market that have Albertsons and or Safeway, I don’t think that’s had much impact either to tell you the truth from a pricing perspective. So it really, there’s not I mean — obviously, there’s a lot of noise around this. But it really on the ground hasn’t had very little impact from a pricing perspective. Because at the end of the day, you’re really looking at the attributes of the real estate and more importantly, the sales and the economic aspects of what you’re buying as it relates to Kroger or Safeway anchor tenants.
Linda Tsai : Thank you.
Operator: Thank you. Our next question will come from Paulina Rojas Schmidt of Green Street. Your line is open.
Stuart Tanz: Good morning.
Paulina Rojas Schmidt : Good morning. My question is about occupancy costs. So we usually think about occupancy costs for anchors. And I wonder, do you track that metric at all for your small shop tenants? And even if you do loosely, how would you say that has evolved? Or how does it compare relative to the past?
Stuart Tanz: Sure, Rich, do you want to?
Richard Schoebel: Yeah, I mean, we always pay close attention to the occupancy costs, because that has a big effect on how much rent we can get out of the tenants. And the things that we have control over, such as the operating expenses we stay very focused on keeping them as low as possible. But the overall the tenants continue to perform well, the occupancy costs are sustainable. And, we’re not getting any pushback from tenants on the renewal side in terms of their occupancy costs.
