Dave Holeman: Hey, Barry, it’s Dave. Very good question. I think we continue – we are seeing a little bit of uptick in the transaction market, I think as we all get more clarity on where interest rates are. Still not super deep, but we’re seeing more transactions, and I would say we are seeing the buyers able to get financing. So, in some recent transactions, there’s been a financing component and we’ve seen the ability to get financing at rates that are probably now closer to 6%, a little bit above that, but rates that can work. So, we are seeing that market normalize. We’re also seeing, on the sales side, on the acquisition side, we’re seeing cap rates move up a bit. So, we’re continuing to monitor that for great opportunities.
Barry Oxford: Yes. Is it your plan as much as humanly possible to match the dispositions and acquisitions, or do you think one will run in front of the other this year?
Dave Holeman: Yes, I think we – I’ll say it this way. Our responsibility and what we focus on every day is creating and adding value. Over the last couple of years, we’ve been continuing to upgrade the portfolio through a bit of recycling, really selling assets and redeploying into new assets. I think right now, I think I mentioned in my remarks that we’ve done about $80 million in the last 18 to 20 months. We believe that kind of that level is probably appropriate for a portfolio our size on an ongoing basis. And our guidance we’ve given is the asset base as it is today, but we do believe there’s going to be opportunities are starting to open up for acquiring assets and potentially growing and scaling this platform as well.
As we’ve said for the last couple of years, we’re going to be very, very disciplined in capital allocation, making sure those decisions are the right decisions for long term value. But for the last couple of years, it’s been largely sales and dispositions one for one. I would expect that that would be similar in 2024, but we think there’s going to be opportunities as things continue to improve.
Barry Oxford: Great. Thanks so much, guys. Have a good one.
Operator: Thank you. Our next question comes from the line of John Massocca with B. Riley Securities. Please proceed with your question.
John Massocca: Good morning. Maybe to think about the guidance, as you think about kind of the $0.03 drag from your costs associated with the ongoing situation around Pillarstone, can you provide a more color as to what you’re assuming there? Is it a resolution to legal issues and bankruptcy court-related issues now in July? Or is it that kind of ongoing for the full year as you look at guidance today?
Dave Holeman: I’ll let Scott maybe talk at guidance, but on the Pillarstone front, I think largely our efforts are related to collection. So, think of it that way. In other words, now we’ve moved through the process. We’ve done our redemption of our ownership effort, and now we’re going to work to get those mounts collected. So, that’s largely the activities. And I’ll let Scott maybe give further comments.
Scott Hogan: Well, on the guidance side, I don’t think it’s a $0.03 drag. I think we’ve got $0.03 of additional just in the other category. And so, when you look at the guidance for 2024 against what we had in 2023, we’re expecting lower litigation costs around Pillarstone, and then also we redeemed our OP units in January. So, the line on our income statement that’s had a deficit related to Pillarstone, goes away starting January 25th or so. So, I think we expect a little bit of pickup from just no longer recognizing equity method deficits associated with Pillarstone, and we move on to collecting the amounts that were due and then we expect lower litigation cost.
John Massocca: Okay. And when you say a $0.03 drag, I mean versus kind of run rate, no Pillarstone at all?
Scott Hogan: Oh, okay. Oh, sure.
John Massocca: Are you kind of assuming that being a full year to kind – of those elevated G&A costs, or is that something that should end roughly in July? Just because you mentioned it as when you expected to, or at least were guiding to start monetizing or collecting some kind of monetization from the Pillarstone assets?
Scott Hogan: Well, we’ve forecasted about $1.5 million of litigation expense associated with Pillarstone. It’s hard to predict the timing of when all those – when the matters get resolved.
John Massocca: Okay. that’s fair. And then apologies if I missed this earlier in the call, but the acquisition in February, Garden Oaks, you may provide some color as to pricing and going in yield on that investment?
Dave Holeman: Sure. Hey, John. So, in early 2024, we were pleased to close on a really nice acquisition in Houston in the Garden Oaks submarket, which is an area that is very, very strong, continues to improve. And so, really pleased with that. It’s an Aldi. It’s a center that has an Aldi, has several tenants that are the type of tenants we like, that support the surrounding community and has real upside, I think from continuing to apply what we do well, which is Christine and our team just really looking at the tenants and what they provide the community. So, we’re very pleased with the acquisition. I think it fits our portfolio well. Was part of our capital recycling program. So, I think we’ve upgraded to a much better asset there with greater upside than what we disposed of.
