David Simon: Sure. I think we’ve seen rates more or less stabilized now. There was volatility prior to that where it was hard to predict now. We’re not anticipating a reduction in rates, but at least we feel like we’re in a more or less a stable rate environment, that makes it easier to make investment decisions. So I would break it up into two buckets. The first bucket being our redevelopment effort and most of that frankly is mixed-use in our properties and we feel very bullish on that. Remember, you’re talking about bringing on — if it’s a two to three-year process, you’re talking about bringing on product in two to three years, not going to be any supply. We do a very good job of understanding supply and demand. The new better product always wins, so we are unabated in our mixed-use and we’ll be doing some multi-family development both in Bray and Orange County.
And as I mentioned, we just signed our GMP at Northgate Station to build about 300 units as part of that whole redevelopment. So that really goes unabated. That when you get to the external new deal environment, I would say, we have a lot of opportunities ahead of us and I think our job is just to prioritize, make sure we’re valuing the opportunities right and we don’t take our eye off the ball with what we’re doing with our existing portfolio. So long story short, I probably would venture to say that there could be more external opportunities for us, but again, it’s got to be great quality and at a fair price and assets where we think our expertise can add cash flow growth to them.
Ronald Kamdem: Thank you.
David Simon: Thank you.
Operator: And our next question comes from the line of Michael Goldsmith with UBS. Please proceed with your question.
Michael Goldsmith: Good evening. Thanks a lot for taking my question. David, you highlighted the health of the consumer seems like doing all right or managing through the environment, just given your positioning and the occupancy gains and the pricing power that you have, if there was some sort of macro slowdown, do you think — how do you think you would be able to navigate it or maybe said another way, do you think the business has become a little bit less macro sensitive as you’ve — as there’s been consolidation and you’ve kind of become the place where — where you’ve reached consumers in that luxury space? Thanks.
David Simon: Sure. Look, we are — make no mistake about it, we are not immune to the macro environment. So we would have to deal with it both from — if it ultimately led to less consumer spending and more retail client stress. We’re not immune to it, however, and this is a big underline from my standpoint. I have always felt like we’ve done our best work when others are dealing with the macro environment. So — and as I mentioned to you, we have $11 billion of liquidity in our comments earlier. So I think when — and if — and frankly I mean it’s realistic to assume we may go through a reasonable slowdown here coming up. I think that’s when we do our best work. That’s when others get tired and throw in the towel, that’s where we get rejuvenated.
Hopefully, we’re rejuvenated now, but this is when we really get motivated and I — as I think back and I’ve had the luxury of being in the spot for 30 years. I think we do our very best work when the times get tough. So not wishing that on us or anyone, but it’s a realistic probability. We won’t be immune for it, but I think we’ll further separate this company from our peers. So that — I know that I have 100% confidence in that if that does happen, we’ll have further separation.
Michael Goldsmith: Thank you very much.
David Simon: Thank you.
Operator: Our next question comes from the line of Alexander Goldfarb with Piper Sandler. Please proceed with your question.
Alexander Goldfarb: Hey, good afternoon out there. David, just want to go back to Caitlin’s question. In response to the retailers, you said that it brings a lot of volatility, obviously, we all like volatility the right way, but you can’t deny that you guys have made a ton, I guess, I could use a French word to describe the ton, but you guys have made a ton of money, billions, from these retailer investments. Yes, they are volatile, but they’ve been lucrative. So just want to get a better sense, is the Express model sort of a future where you guys will participate if you put in no capital or just trying to understand how you weigh the money that you’ve made versus the short-term or the quarterly earnings volatility, because clearly it’s been a source of success for you.
David Simon: Yeah, that’s an — it’s interesting, Alex. It’s a very good question. And I think, honestly, we really focus on — to the extent we do put in fresh capital. We — in addition to understanding what it means for our overall business and the totality of our company, it’s also absolutely driven by return on investment just like building a new shopping center, so. And again, yes, we have volatility, but in the scheme of things, again, and the fact that we’ve made money, I hope most folks are understanding that the volatility is really on the margin and I’ll just give you a good example of — and again, we take, FFO, as you know, is net income plus depreciation. Well, the contribution we get from our retailers is net income, which is fully burdened by depreciation, so there’s no add-back.
But to give you a simple analysis on just ABG as an example, so we cleared $1.450 billion of cash and that produced about $0.08 of earnings because we just picked up our share of net income. We only got — we only — as a shareholder there only — we only would get tax distribution. It’s a Sub-Chapter S essentially. So we’d only get our tax distributions, which amounted to $2 million a quarter, so that’s $8 million, and if you take the $1.450 billion and you invested in the bank at 5.5%, that’s $70 million. So we went from $8 million of cash flow to $70 million just selling that. So we look at every aspect of it, pre-tax after-tax, what does it mean to the portfolio, what is — we don’t want volatility, but we’ll have — we’ll certainly accept it if we think it’s going to be a good investment, and it all kind of goes into the analysis.
