Alec Feygin: Okay. And second question for me is on the 11 asset portfolio that’s held for sale. Does CareTrust have any sort of nonrefundable deposits from that potential buyer? And what is holding that buyer back from actually closing?
Dave Sedgwick: Yes, we do. We have about $1 million of money that’s gone hard and it’s nonrefundable. And we’re staying close with those guys, and they’re making progress. And what they’re telling us is they think it can get closed here in the next month or 2.
Operator: Your next question comes from the line of Juan Sanabria again from BMO Capital Markets.
Juan Sanabria: Just curious, given your strong cost of capital, if you have any interest in looking at seniors housing operating assets? Is that something that potentially you could add to the fold? And is the kind of dovetail to that? Would you have any interest in LTACs by any chance?
Dave Sedgwick: Well, I’ll go in reverse order. We probably don’t have the interest in LTACs today. I would never say never, but it’s not something that we’re currently interested in or pursuing. With regards to SHOP, seniors housing, I would say that we are certainly open to that. We’re not exactly built for it today. We’re really built to scale in a triple net way. But if we were to go into a SHOP investment, we would not — we would have to solve both the economics of the deal, but also the back-end support structure for it. And that’s something that we would be open to looking at.
Juan Sanabria: And one last question for me. Given how low the leverage is, is there any chance you could recut any of your loans to get some benefit for how conservative your balance sheet is positioned or any discussions with lenders to that
Dave Sedgwick: No.
Operator: Your next question come from the line of Austin Wurschmidt from KeyBanc Capital Markets.
Austin Wurschmidt: Just a question about some of these larger deals as well. So I’m just curious with each kind of incremental decrease in leverage and just a more attractive cost of equity. Is that what’s really improved the probability of doing these larger deals? Or has something else changed either just the benefit of time and underwriting, given the size of the transaction that’s gotten you comfortable to get under LOI, again for specific maybe to the one that’s in the pipeline today?
Dave Sedgwick: Well, I think we’re seeing an increase in larger deals because of how attractive we’ve become as a transaction partner in today’s environment where borrowing costs are so high. And another reason for it is it’s the fruit of some relationship building that we’ve done over recent years and strategic lending that we’ve done over recent years where as we’ve expanded these relationships and done some things that have been a little bit outside of the norm, these folks continue to stay active and they come to us because we’ve had a really good experience transacting together. So I think it’s kind of a combination of a lot of those.
Austin Wurschmidt: Got it. So I mean just given sort of your calculated measured commentary when it comes to talking about the pipe, is it fair to say that the newer larger deals then that aren’t in the pipe is simply because of that they’re newer deals and really are too soon to have under LOI, and you’ve got enough to chew on with what’s in front of you and what you have capacity to acquire today? Or are there other factors that kind of have you on the sidelines with some of the newer stuff that you’ve seen?
Dave Sedgwick: Yes. I’d say the thing that keeps us from including more is really just about stage of progression of the deals. As things get — the bigger the deal, we’re just going to wait until things are really baked and ready to go before we start including those in a pipe. We’ve just seen larger deals for a number of reasons fall through after we thought we had a good chance at it. That’s just learning from chasing bigger deals over many years.
Operator: Your next question comes from the line of Joe Dickstein from Jefferies.
Joe Dickstein: Just have a quick one here. WLC Management coverage has come down quite a bit the last couple of quarters at 1.72x EBITDARM, I guess kind of what’s the story there? And where do you guys see this settling?
Dave Sedgwick: Well, I think, Joe, I think I’d just add a little bit to my prepared remarks about WLC. They are a great operator for us in Southern Illinois. They’ve been doing it a long time for us and have been operating this portfolio a very long time. They did have kind of an end of year large adjustment. And also, as I talked about, I think I talked about them last quarter, I could be mistaken. They had a drop in skilled mix quite a bit. And so as you — as they recover on the skilled mix side, as the new rates kick in Illinois on April 1, then we would expect that coverage to improve. We’re not concerned about them.
Operator: That concludes our Q&A session. I will now turn the conference back over to Dave Sedgwick for closing remarks. Please go ahead.
Dave Sedgwick: All right. Well, thanks, everybody. Really appreciate your time. And of course, we always stand by for follow-up questions, you know where to find us. Have a great weekend.
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
