Operator: Your next question comes from Rob Stevenson of Janney. Please go ahead.
Rob Stevenson: Good morning, guys. Lou, I think in your comments, you indicated that you expected to exit the T. Rowe Price JV upon completion. Is that a 2025 transaction for you guys?
Lou Haddad: Well, the property — they’ll be occupying in the third quarter of 2024. So we have to look at market conditions, whether that’s going to be a day one disposition or hold until early 2025. And of course, you’ve got a significant marketing effort as well. And Rob, I just want to make sure it’s clear. That’s our current thinking. And we love the venture. We love the building. Obviously, we’re going to own everything around it. We’re just a little concerned about concentration as well as we’d love to get that capital back and redeploy it. Again, assuming that cap rates settle out where trophy building can transact at a reasonable level.
Rob Stevenson: Okay. And then I think you and Shawn both talked a little bit about redevelopment. Can you talk about what the sort of near-term redevelopment plans are, especially in the portfolio, especially if you don’t get the Bed Bath or the Regal stuff back in the near term? Where else is there opportunities for you guys? And when are those type of — when is the time frame for start and/or completion of the opportunities that you have in the portfolio today?
Lou Haddad: Thanks, Dave. I’ll let Shawn answer it more specifically. But as far as redevelopment, those are the only properties that we have that we’d be looking to take down and change uses. And we’re, frankly, anxious to kind of sitting in the cater seat. We’re selecting a ton of rent right now. But at the same time, long term, we’d love to see multifamily in both of those locations. With regard to ground-up development, Shawn, do you want to — you’re looking at an awful lot of stuff.
Shawn Tibbetts: Sure. Yes, I think there’s no shortage of opportunities out there, as you would imagine. And so we’re seeing a lot of deal flow. To Lou’s point back on the redevelopment, we are happy to collect rent and watch construction prices kind of stabilize or come down. That helps, obviously, the yield and helps our business case. In terms of ground-up development, here in Town Center, we have, as you know, Rob, an opportunity for a site here show the opportunity arises to develop a mixed-use building. We’ve been calling that parcel our block. In Baltimore as well, we have the opportunity to — if we want to elect to build more multifamily units subsequent to the Allied units that are there today are being built today.
Our partners across the spectrum continue to bring deals. I mean we looked at three deals last week in the multifamily space. So we’re seeing strong deal flow there. We just — we’re setting — we’ve been very diligent and discerning about which opportunities to pull the trigger on. So I think from our perspective, yes, there are redevelopment opportunities, but probably in the shorter term, there are actual ground-up development opportunities that make more sense for us, assuming that the rent continues to come in.
Rob Stevenson: Okay. And then, Matt, anything of note to the cadence of 2023 earnings. I think the guidance averages out to a little over $0.31 a quarter. Are there anything that’s going to disrupt that and either push the quarterly progression up or down meaningfully in specific quarters at this point?
Matthew Barnes-Smith: Today Good morning, Rob. Today in our guidance where the standards you were spread it roughly even, there is a potential opportunity for one of our preferred equity deals like Solis Nexton came early in 2022, potentially Solis City Park could be sold and come early in 2023, but we have not put that in the base case of guidance, that would be potentially upside. But yes, we feel that, yes, it will be fairly evenly spread throughout the quarters, and we will see kind of as Lou and Shawn talked about, the potential acquisitions that we’ve placed in guidance, we’ll see what they kind of materializing the timing on that as we work through the year.
Rob Stevenson: Okay. And the $13 million of mezz preferred in the guidance, is that just the three existing investments? Or does that contemplate an additional investment or two throughout the year?
Lou Haddad: That’s just the three that are active right now.
Rob Stevenson: Okay. So anything in addition to that on a net basis would push guidance up at that point?
Matthew Barnes-Smith: Yes. Rob, there is one additional mezzanine preferred equity deal with our preferred partners TP, Solis that is in the model. Hopefully, that will close in the first quarter of this year to replace the service mix and the transacted early.
Rob Stevenson: Okay. That’s helpful. Thank you very much.
Operator: Your next question comes from Dave Rogers at Baird. Please go ahead.
Dave Rogers: Hey, sorry about earlier, but thanks for the answer to that first question. Follow-up for me, Lou, on the construction side of the business, added quite a bit of the backlog in the fourth quarter. Curious about just what you’re seeing kind of in construction overall, including maybe some cost increases that you’re still seeing. But I guess with regard to the backlog, are you just seeing an acceleration of development whether it’s just unique to Armada Hoffler, really trying to get a sense for the competitive landscape maybe that you’re facing as well?
Lou Haddad: Dave, I think to answer your last question first, I think it’s fairly unique to us. We’ve got these long term relationships that are very active right now and we’re the beneficiary of that and we’ll continue to be so for the next couple of years. In terms of pricing, things have moderated. We’re still putting escalations in contracts, but not nearly to the extent that we were at this time last year and through the spring. We’re not really seeing and I don’t think anybody is expecting that there’s going to be any significant decrease. The commodity prices have come down significantly, but that’s been offset largely by labor costs, as well as a shortage of high quality subcontractors.
Dave Rogers: Okay, great. Thanks for the follow-up.
Operator: Your next question comes from Camille Bonnel of Bank of America. Please go ahead.
Camille Bonnel : Hi, good morning, and nice job on the investment grade credit rating. It sounds like from this call you have a number of potential investment opportunities this year. Can you just elaborate a little bit more about the plan, sources and uses of capital just in the context of your medium term leverage target?
