We think that at home is another tenant that Top 5 tenant. They’re headquartered in Dallas. We meet with them. We just have a recent meeting with them. We were very, very confident about what that company is going to do. Our real estate that we own, and we believe in that credit. And we believe that we’ll be able to — that will be another good proof-of-concept. So I think, Harsh, what we have to do this year, the best thing that we can do to I think, try to improve our cost of capital is to basically outperform that lost rent number that we’ve highlighted as 1% this year. We think we can do it. Look, we think it’s reasonable to put that out there. But I think if we’re able to beat that number this year, certainly from a tenant risk standpoint, people would not necessarily associate our portfolio in that way.
We’re originating more industrial opportunities. I think we’re going to continue to keep pace with that just given some of the dislocation in the corporate financing market. So we’re just going to make this company from a portfolio standpoint better. And look, we’ve gone big, and now we’re playing a little bit smaller in terms of number of transactions and volume. And I think this year will be a really good year for us to show kind of proof-of-concept what this company can really do. I mean we acquired an extraordinary number of transactions relative to what we’ve historically done last year. This year, it’s like half of that, right? But I think one of the most important things that we’re going to be able to show is at the — how creditworthy this portfolio is, given some of the sort of comments that we’ve gotten in the past about risk of potential tenancy.
Operator: Our next question comes from R.J. Milligan with Raymond James.
R.J. Milligan: I wanted to ask you about the $60 million that was issued on the ATM this quarter. Can you talk about the thought process in issuing equity at those levels? And can we expect more ATM issuance in 2023?
Mike Hughes: Yes, obviously, it’s just a small amount. We want to make sure we kind of enter ’23 at a good leverage level. There were still decent spreads. In the fourth quarter when you look at that sliver amount of equity. So I think we ended in a good spot, presold spreads last year, finished out the year in a good place on the balance sheet. And that sets us up well for ’23 based on our capital deployment plan. Right now, where the stock price is, we’re not planning to issue any more equity. The equity price improves materially, and we see good acquisition opportunities that where the cap rate is at a place where we think the spreads are there, we could certainly get the ATM, that’s definitely off the table. We could do something even bigger and accelerate later in the year if that makes sense.
But for now, we feel like we ended 2022 in a good spot in the balance sheet to set us up for our capital deployment plan this year without needing to access to capital markets. So status quo stays the same, I wouldn’t anticipate an activity, but certainly, if the opportunity presents itself and if something makes sense, whether it’s from a cap rate standpoint, our acquisitions or stock price improvement or a little bit of both, we could become active again.
R.J. Milligan: That’s helpful. And I know that or the midpoint of the guidance, I think, assumes that you’re funded from free cash flow, dispositions and then increasing debt. And I’m just curious, based on that guidance, where do you anticipate leverage ending the year assuming no more equity issuance?
Mike Hughes: Yes. I think our leverage will continue to be in that mid-5s range that we typically target. We’re always going to maintain conservative leverage and obviously maintain our BBB rating. So that mid-5% range is where we’re comfortable. Obviously, we ended 2022, a little bit below that. So I think we have some flexibility there to kind of migrate into the mid-5s.
