Ki Bin Kim: Can you just talk about the trends in operating costs that we should expect in ’23? And as these costs go up and as you pose higher lease spreads, I’m curious, how much of those higher lease spreads actually can translate into the bottom line versus maybe anticipated into a higher cost?
Scott Kingsmore: Yes, our operating expenses will continue to tick up. Ki Bin, we expect about a 3% to 4% growth in shopping center expenses. It’s a range of outcomes, from labor costs to property taxes, big line item, insurance, big line items. So we’ll see that. Leasing spreads are kind of independent, right? You manage your expenses on a fixed CAM world. And the spreads, your ability to generate pricing power is really driven by growth in occupancy and creating that tension between supply and demand. And we think we’re there. We’ve started to see spreads over the last couple of quarters in the mid-single-digit range. I think it’s reasonable to assume we’ll continue at that level. Doug, do you disagree?
Doug Healey: Yes. No, I agree. And the one thing I would add, Scott, is for the first time, probably since pre-pandemic, we’re starting to see competition for space again, especially in our better centers. And that’s just, by definition, going to drive rate up. So you combine competition with increased occupancy, we’re starting to see it in terms of driving rate.
Ki Bin Kim: And when you negotiate with tenants, how often is the topic of crime and safety being elevated when you discuss leasing with tenants? And can you talk about some of the things that you’ve done as a landlord, maybe in conjunction with the study to make a safer kind of shopping environment?
Tom O’Hern: Yes, I’ll take the second half of that. We work with all of our cities pretty closely. Santa Monica, for example, we spent a lot of time with the various people in the city as well as the police chief to try to make sure that we make Santa Monica Place the safest environment possible for shoppers. We have a lot of urban properties. And as a result, we’re very sensitive to those issues. I think 1 area that we don’t scrimp on as it relates to expenses is security. And we use one of the biggest firms in the country, if not the world, to handle our security, and it’s something that we’re in close communication with every single municipality we do business in to be aware of issues that are happening. And that’s really all you can do. Doug, you can speak to the retailer side of it and how they’re reacting or what kind of feedback you get.
Doug Healey: Yes. So we don’t really negotiate security when we’re negotiating leases. But what I can tell you, and this is happening a lot. We’re having the retailers security departments reach out to us, to partner with our security department and vice versa. So there’s meetings, there’s functions, there’s conventions, if you will, that marry up our security and the retailer security. So we’re starting to see a pretty dynamic partnership there. But it’s not really a function of the lease.
Operator: Our next question comes from the line of Craig Mailman with Citi.
Craig Mailman: Just a question on what you guys are baking in from a perspective of delivery times on leases? I mean, are lead times getting better on that? Are you guys maybe taking — or is there some conservatism in guidance around timing of some of that stuff that you’re saying could be hit end of ’23, early ’24? Is there any chance of that hitting earlier on?
Scott Kingsmore: Yes, Craig, Tom touched on it, probably the most sensitive are the larger spaces that generate a significant amount of rent. And just as a practical matter, those take a fair amount of time to get permitted, get built out and ultimately start paying rent. We look at this space by space, and we coordinate with the tenant’s construction department to determine what those estimated rent start dates are. So I’m not sure that we’re necessarily being conservative. We’re trying to be as realistic as possible because, again, we’ve got a fair amount of the space that came back to us during the pandemic. It’s an exciting space. We really want to get it open as soon as possible. But each circumstance is different. Each municipality you’re dealing with is different. So it’s very space-by-space specific. And I think we’ve got a pretty realistic perspective when we think that rent is going to start to come online.
Craig Mailman: Are labor issues still a bottleneck for your tenants in terms of opening new stores? Getting employees, is that still an issue? Or is that easing up on the margin?
Doug Healey: I think — it’s Doug. I think it is easing up. I mean we’re talking to the retailers all the time, and that was a real issue last 12 to 24 months, but it’s really quieted down.
Craig Mailman: Okay. And then just one last one on.
Doug Healey: That and the supply chain issues that were often discussed in the last 24 months.
