Stephen Yalof: I have my EVP, Leslie (ph) is sitting next to me shaking his head, yes. We do because we think that there’s a lot of other brands that are discovering the outlet channel. We also think as we’ve started to allow brands that are not necessarily traditional outlet brands into our platform, they’re finding that our locations and our positions within the communities that we serve to be the place the customer wants to shop. So as we create these diverse mix of retailers in our footprints in these tourist driven, local population driven market places that were traditionally reserved for outlet only, we’ve opened up the floodgates to a whole new set of uses and that’s why we’re having such great velocity of retailers and other uses that want to join the mix.
Caitlin Burrows: Got it. Okay. And then, just on the leasing spreads, you mentioned how they are pretty impressive on the new leases, but at least this quarter the TIs were pretty high too. So I was wondering, if you or someone else could talk about the TI trends, what type of tenants are asking for what and how you’re deciding which to actually agree to fund?
Stephen Yalof: So, Caitlin, when you look at supplemental, the tenant allowances were relatively flat sequentially, so pretty consistent with the types of retailers that are coming into the space. And if you think about the gross rent that we’re getting $47, the 68 of TA on 8.5 years of duration is a pretty appropriate payback period. And obviously, as a company we think about that investment that we’re making into the real estate for the productivity. And in almost all cases the tenant is putting substantial dollars ahead of our capital that we’re providing as they build out the stores. Caitlin, I know you’ve been out to a number of our centers and you can see the build outs of the re-tenanted spaces that are really strong.
Caitlin Burrows: Okay. Got it. Thank you.
Operator: Thank you. Our next question has come from the line of Floris van Dijkum with Compass Point. Please proceed with your questions.
Floris van Dijkum: Hey, good morning, guys. Question on capital allocation, I was particularly interested in the Huntsville transaction you guys executed last year. And I think you indicated you’ve looked at over $7 billion of assets that you underwrote. As we look forward, maybe talk about the pipeline of stuff that you’re looking at and how many more of those lifestyle centers could be contemplated to be added to the portfolio over the next 18 months or so?
Stephen Yalof: Sure, Floris. So like, we step back from it just thinking about our size, right. We’re a $5 billion company. We don’t need a tremendous amount of transactions. We want to make sure that the transactions that we do are value enhancing, where we can bring our operating, leasing and marketing platform to bear. We’re not a buy and hold company. If we’re going to acquire something, we wanted to ensure that it fits with our strategy and where our platform can create value. We think as part of that strategy is incumbent upon us to look at everything, which is why we’ve looked at a lot of transactions, so that when Huntsville or Nashville comes about, we can act quick. And being able to act quick is why the balance sheet is so well positioned to be able to go after those opportunities.
So being able to have the liquidity, getting our line recast, getting additional availability, having the free cash flow and operating at a lower leverage levels allows us to be opportunistic when transactions are in the market or when there is disarray in the marketplace for us to be able to act. Our balance sheet is really clean, so we have the ability to take over assets with secured debt. We have an ability to do joint ventures. We have the ability to do partnerships. There are so many different alternatives, but the most important thing that we want to keep in our mind is we want to be disciplined, we want to be prudent, and we want to ensure that we can create value so that when we announce transactions we’ll be able to articulate the growth that we can see as those assets come into the market into our portfolio.
Floris van Dijkum: And so we should presume that you’re constantly evaluating stuff and you will not make announcements as and when things get agreed. Is that the right interpretation?
Stephen Yalof: Yeah. We are an active organization looking a lot of opportunities, but they’re going to have to be the right ones and there’s nothing embedded in our guidance. We have no — we don’t want to set a transaction amount, that’s not the way we operate because if we find a deal we have to look at that deal, finance it appropriate at that time relative to the return that we see going in and over the long term and we’ll keep everyone apprised as deals come through. And we’re optimistic that we feel that this platform that’s been built has the ability to own and manage additional open air retail centers that have effective lifestyle and outlet component.
Floris van Dijkum: Great. And if I can follow-up perhaps and I know this is the question I’ve asked you guys in the past, but maybe if you can give us a little bit of an update on your thoughts on getting more luxury type tenants in your portfolio? Have you made any progress? Which centers are in your view are the most likely to be the ones that receive some of that demand? And maybe think about what the potential impact of having more of these types of tenants in your portfolio, what would that do to your sales productivity and to your rental levels?
Justin Stein: Floris, this is Justin. Thank you for the question. Yeah. We continue to evaluate all the tenants throughout our portfolio asset by asset. And we can share that we recently opened Lafayette 148 in our National Harbor asset. We recently brought in Ba&Sh, a luxury tenant into Riverhead. Kate Spade recently opened in Charleston. So we continue to penetrate that elevated market case by case, center by center, and we’re going to continue to chip away at that going forward.
Floris van Dijkum: Thanks.
Operator: Thank you. Our next questions come from the line of Greg McGinniss with Scotiabank. Please proceed with your questions.
Greg McGinniss: Hey, good morning. On the dividend yields along with the payout ratio, they’re one of the lowest amongst retail REITs. How are you thinking about additional dividend increases over the next few years?
Stephen Yalof: Thanks, Greg. Well, dividend yield is a factor of stock price, right. And so we think about our dividend level, which is obviously a Board level decision. We’ve been able — the last number of years coming out of COVID to raise that dividend yield as our cash flow has been growing, right. We’ve seen considerable FFO growth and we’re sharing in that growth with our shareholders, and still maintaining as low of a payout ratio as regulations, right, that allow us to because free cash flow is free. And so that free cash flow really helps to fund all of our internal and external growth initiatives on an effective basis in a high capital cost environment. So, we recently, as we noted in the release and a couple of weeks ago, raised a quarterly dividend to an annualized level of $1.10 a share.
