David Lukes: Yes. Good morning, Linda. It’s David. I think Conor did a pretty good job, I think of summarizing it before. There’s a long history of discounters taking locations, very large national change discounters, Ross, Burlington, TJX concepts. But in the last couple of years what we’ve also seen is new concepts, many of which are sponsored by those investment grade companies. TJX certainly has sponsored a couple of new concepts, same as with exporting goods, same with Dollar General. So we’ve seen new concepts that are IG rated that have started to become very active in the space. And then on top of that, we’ve seen more regional chains that I have really good balance sheets that are anything from home furnishings to furniture to entertainment.
So the variety is pretty wide. I mean, if you think about the number of anchor leases we’ve done in the last couple of years, and the percentage of those that are new concepts or individual concepts, it’s pretty high.
Linda Tsai: Thanks. And then would you expect to split those boxes and would that require more CapEx.
David Lukes: At this point, I don’t believe so. I mean, the size of the Bed Bath that we’re getting back, it looks to us like the demand is a single tenant backfill. And that’s – so I think in our prepared remarks, we mentioned out of those 17 locations, 16 of them appear to be single tenant backfills, and we feel pretty strongly about that at this point. The last one that makes up a 17 is really a redevelopment project in DC Metro where we expect to be using entitlements to get more densification and we’ll likely split that land and sell off a piece.
Linda Tsai: Thanks.
David Lukes: Thanks, Linda.
Operator: Our next question will be a follow-up from Haendel St. Juste with Mizuho. You may now go ahead.
Haendel St. Juste: Hey there. Thank you. Just one more, Conor, maybe. I understand the timing of the bad debt is one of the factors you’ve highlighted as a swing factor, but can you talk a bit about the expected cadence for the same-store NOI growth this year, the low 2% at the midpoint? And as we look ahead, given your SNO related documentary visibility that the band you’re seeing, I’m curious what type of ballpark same for NOI growth that implied for next year. I think many of us have thought about this as a long-term, 2% to 2.5% same-store NOI business. I’m curious if you guys think you can top that long-term average next year. Thanks.
Conor Fennerty: Hey, Haendel, can you repeat the first half of the question? Sorry, I just missed that piece.
Haendel St. Juste: Sure, sure. I was hoping to get some color on the cadence for the same-store NOI guide that you’ve laid out this year. Understanding again, that bad debt was one of the factors you’ve outlined as a swing factor, but just wanted to get a sense of the cadence for this.
Conor Fennerty: Sure. So there’s two major factors and you hit one of them on the head in terms of the SNO pipeline and the commencement dates. And so Page 6 on our slides has that laid out by quarter, and you can see it’s a cumulative chart. The fourth quarter is the most impactful, as I talked about, I think it’s on Mike’s question. Typically, you just have for the law of the national anchors a fall – a spring or fall and in this particular year’s, quite a few fall openings. So it is back half weighted from a commencements perspective. And then the other piece is occupancy and what happens with bankruptcies, Bed Bath, depending on Todd and Mike’s questions, when they reject these leases, when they ultimately move out, it feels like the third quarter could be your trough from an occupancy based rent perspective and then you kind of accelerate from there as rents commence.
To your question on future years, future growth, look, we’ll save that for 2024. I would just say as an industry in general, you have a setup just given what’s going on with rent growth and the occupancy upside, given these historically high SNO pipelines for an above trend same-store NOI outlook. Now, let’s see what happens to the economy. Obviously a hard landing, soft landing, we don’t know, but you do have the ingredients between a lack of supply and I would call outsized SNO pipelines for the industry to do above 2%, above 2.5% for a number of years. And then I would say just kind of augmenting that or further accelerating that given I would say the accretion from our tactical redevelopment pipeline, you could further add to that.
So I would just tell you we’re very macro aware. We’re trying to be sensitive to the uncertainties we’re seeing in the environment, but you do have the ingredients from potentially outsized same-store for the sector for a couple years now. And we’ll see what happens with the economy.
Haendel St. Juste: Appreciate the color. Thank you.
Conor Fennerty: You’re welcome.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to David Lukes for any closing remarks.
David Lukes: Thank you all for joining. We’ll talk to you next quarter.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
