Jay Sugarman: Yeah. So I think I’ve mentioned this on a prior call. There are hand functions that are on the smaller side where our partner will most likely not participate. There’s a decent amount of friction costs to set up those ventures. And so our expectation is that they will almost do every single transaction, but some of the smaller ones that we have conviction on, they may end up on our balance sheet. We get a base management fee and a promote structure, and I’m blanking on it off the top of my head, Brett, if you know what that is.
Brett Asnas: Over a 125 [ph].
Jay Sugarman: Caitlin, let me get back to you on the base management fee and the Caret.
Brett Asnas: 125 bps.
Jay Sugarman: There you go. Awesome.
Caitlin Burrows: Got it. So I guess just you mentioned the smaller ones. I guess the deal in the origination in 3Q and the Q2, since those all seem pretty small, so would it seem like those fall into the category of being just for safe hold?
Jay Sugarman: Correct.
Caitlin Burrows: And just as we think about like funding going forward. Okay. Okay. That’s all. Thanks.
Operator: Your next question is coming from Harsh Hemnani at Green Street. Please pose your question. Your line is live.
Harsh Hemnani: Thank you. Just a quick one from me. So the option that was terminated this quarter to purchase a ground lease, how many more of those options do you currently have on your balance sheet that would be out of the money just at current rates?
Jay Sugarman: There is one other option on our balance sheet currently.
Harsh Hemnani: That’s helpful. And then do you — sorry. Go ahead.
Jay Sugarman: And Harsh, it’s probably too early to determine whether the customer qualifies for that option and if we actually have any P&L exposure on that payment.
Harsh Hemnani: Okay. Thank you.
Operator: Your next question is coming from Kenneth Lee with RBC Capital Markets. Please pose your question. Your line is live.
Kenneth Lee: Hi. Good morning. Thanks for taking my question. Just on the liability side, obviously, no maturities until 2026. I wonder if you could just share some thoughts as to what options could you look at as you look to refinance over time and would there be any change in approach just given where rates are or where rates could be? Thanks.
Jay Sugarman: Hey, Ken. I think our approach is the same. We obviously have access to multiple parts of the capital markets. What we’ve been able to exhibit over the past few years in growing our unencumbered asset base and being an unsecured borrower is really creating a footprint in the markets. We have access to both the public and private at various tenors with various structures. So I think what we’ve been able to exhibit and take action on over the last years is continuing to be creative and create liability streams that better match the asset profile of what we’ve been able to create. So that’s really, in our mind, what we’re continuing to push along. I think some of the remarks I made earlier around where rates currently are, where current credit spreads are and the appreciation of where the business is at in terms of its evolution, we’re going to let all of that good work and good progress and set up of the balance sheet.
As you mentioned in your question of no maturities over the coming years here, work to our benefit and we do think that getting to that second A rating will provide even more pricing power for the business. So lots of capital solutions. We want to be thoughtful about locking in long-term capital, but we do have those hedges that are significantly in the money that should weigh down that net effective rate for us.
Kenneth Lee: Got you. Very helpful there. And then one follow-up, if I may. Any updates around efforts to create public liquidity or liquid market for the carrot units? Thanks.
