Adam Kramer: Hey guys, good morning. This is Adam Kramer on for Ron. Look, appreciate all the color. I think everything was really helpful on kind of the retail front and bankruptcy front. We just wanted to ask about kind of the Bed Bath and kind of that, that mark-to-market I think you cited with those locations assuming that’s kind of not in your sign, but not opened kind of number of commencement schedule on Slide 6. We’re really just wondering when we think out whether it’s 2024, 2025, kind of further upside to the model, right, further upside from that SNO schedule and how potentially Bed Bath locations could factor into that.
Conor Fennerty: Hey Adam, good morning. It’s Conor. Let me know if I’m answering your question, but as of the first quarter, the $19 million SNO excludes any of the Bed Bath locations, we don’t have any executed leases outside of the one we mentioned last quarter that that Bed Bath already vacated in Princeton. So signing those, obviously we’ll have the lost rent from Bed Bath and then any new locations we sign will be additive to it. But there’s probably I guess if you could take the Bed Bath rent, multiply by 1.2 and that will get you kind of the net upside to base rent for the portfolio post Bed Bath coming back online. But David’s point’s going to take us a year to get those open and rent paying, so you’ll see a dip in occupancy before you start to CVS. No pipeline start to ramp. But let me know if I’m answering that question directly or not.
Adam Kramer: No, you did that. That was super helpful. It makes total sense. Again, just trying to think about kind of upside to the model, right, as we kind of get whether it’s 2024 or 2025, just thinking about kind of further growth as you guys reach kind of these structurally higher occupancy levels. So – but no, that, that, that was super helpful. Just the second one, a little bit separately, right, just think a few capital allocation recognize kind of 1Q April transaction activity roughly kind of match trades right on the acquisitions and dispositions. Is that kind of the strategy going forward kind of roughly kind of netting out acquisitions and dispositions, and how are you thinking about kind of the buyback and recognizing of that maturity coming up? How are you thinking about the buyback given that you – we’re a little bit active on it in the first quarter?
David Lukes: Well, the – this is David. The answer to your first question is yes. I mean, our goal generally in the near-term is to be match funding dispositions and acquisitions. But as we’re completing that, and again, it’s relatively small we always have to look at where the stocks trading and make a decision as to how we’re allocating capital. And I think we make that decision on a monthly basis whenever we have capital to deploy.
Adam Kramer: Great. Thanks again, guys.
David Lukes: Thanks, Adam.
Operator: Our next question will come from Paulina Rojas with Green Street. You may now go ahead.
Paulina Rojas: Good morning. If I heard well, I think you quickly mentioned before that you see the value of your company as I think you said half of its replacement cost. Can you elaborate a little bit on the idea of replacement cost? Is there a ballpark number you can provide for development costs per square foot for shopping centers like the ones you have today? And if – how you have seen that change over time?
David Lukes: Sure. Good morning, Paulina, and good early morning for you. Well, as far as our value, you’re probably at least equal if not better than us to look at that. But in terms of comparing it to new construction, we’ve done some construction over the past year especially post the cost increases of inflation, both with labor and raw materials. And I would say of the buildings that we’ve built in the last year, we’re averaging around $500 a square foot to deliver these buildings, not including land. If you built an entire shopping center that had more anchor space, I think those costs would be a little bit lower on a per square foot basis. But even down at $400 to $450 a square foot x land,that’s kind of where I’m getting back to the ballpark of somewhere – enterprise value, somewhere around half of replacement.
Paulina Rojas: Very helpful. Thank you. And then you put a reported shares again this quarter, and so indirectly related to that, I know it’s hard to say in this environment, but where do you see your stock trading today relative to NAV?
Conor Fennerty: Hey, Paulina, good morning. It’s Conor. Just on the share purchase, as we’ve said in our prepared remarks, effectively, we’re reinvesting the proceeds from the fourth quarter from the asset sales. I think it was $158 million, and we sold those at, I think it was a six, seven blended cap rate. And so we took those proceeds and reinvested those in the stock and some assets and debt pay down. So for us, I just tell you our visibility and our confidence on selling at a six and point seven, and buying a higher number is really high. In the last six years, I think we’ve only bought back stock on four occasions. All four of those occasions have been related to disposition where we sold at X and bought at Y. So I would just tell you we feel comfortable with that spread that we engaged at in the fourth quarter and as we wrapped up that program in the first quarter. But otherwise, we really have no additional comment.
Paulina Rojas: Okay, thank you.
Conor Fennerty: You’re welcome.
Operator: Our next question will come from Mike Mueller with JPMorgan. You may now go ahead.
Mike Mueller: Thanks. Hi. Just to I think quick ones here. So first, just on the Bed Bath. So Conor, it sounds like by the end of June, we should assume roughly $7 million rents go away and then guidance has those coming on within a year or so? Is that correct? And should we be thinking of backend loaded by the end of 2024 and just not a whole heck of a lot until then? That’s the first question. The second one is, it looks like you have about eight redevelopment expansions that come online over the next year or so as well. Is there a shadow pipeline that you see kind of backfilling that pipeline?
Conor Fennerty: Hey, Mike, good morning. On your Bed Bath question, it’s our assumption that we’ll lose that $7 million of rent as of the end of the second quarter. But to David’s answer, to some of the first questions, we just don’t know, like some of those leases could get assumed, we don’t know. I mean, the bankruptcy process, again, they’re trying to wrap it up as quickly as possible. That would be a historically quick process though. So could it go beyond the second quarter? Of course, at certain locations. Our assumption is that you’re right, it just all goes away. There could be some ancillary upside in the back half of the year, but if we’re trying to move as quickly as possible and get these released, we probably wouldn’t go down that path.
So then you’re right, you would have downtime. I mean, there’s nothing that we think would get backfilled this year. And then you’re exactly right. Traditionally, you would have a fall opening at the end of next year. So you would have lost rent from the third and fourth quarter this year and the first and second and maybe third quarter of next year. But obviously, we’ll see how it plays out. But it’s our assumption that they’re gone in the second quarter. On your redevelopment question, the short answer is yes. Now these are smaller projects, so call it $1 million to $10 million. But we like them, we think they’re incredibly accretive. They’re a 100% pre-lease generally, and we feel really good about the risk reward in the economics.
So there is a shadow pipeline. We talked about an asset we bought in Boca last year that there’s a project we’re working on, there’s a couple other longer data projects or longer timeline projects we’ve been working on for some time. Again, I want to caution, these are $1 million to $10 million projects. These aren’t large scale, taking space offline, mixed use development, but we’re excited about them, we’re doing them because we think the economics make sense. So we’re hopeful to add more, but it’s a process. It’s a slog. We’ve got a great team on it, but you’ll probably see a couple of more get added over the course of the year.
Mike Mueller: Got it. Okay. Thank you.
Conor Fennerty: You’re welcome.
Operator: Our next question will come from Linda Tsai with Jefferies. You may now go ahead.
Linda Tsai: Hi. I think you said earlier for the Bed Bath & Beyond centers, there’s no inline space available, and then you have 17 anchor boxes, and then more than 17 tenants looking for spaces. Could you talk about some of those tenants? I think you also said that there were some that aren’t ones that you typically see more interested in those.
