Jonathan Hughes: Okay. And can you talk about, I don’t know if this is for you or Bill, but just the decision to settle the equity proceeds versus maybe leaving them outstanding on a forward basis? Can we interpret that as maybe there is a large deal that could close any day now, and I’m fully aware that’s not embedded in the pipeline, but maybe there is a deal you’re working on and you want the cash available to be able to move quickly? And then, what are you assuming is being earned on that cash until it’s deployed?
Bill Wagner: Hey, Jonathan, it’s Bill. I can take that one. In our model, we have assumed 5% on the cash that is sitting on the balance sheet. As for why we settled the forwards in December, it was just a question of that — we weren’t saving a lot on it. There’s not a lot of dilution as a result of keeping it out on the forward versus having the cash on the balance sheet.
Jonathan Hughes: Okay. And then, one more quick one. On those two Eduro transitions that were referenced earlier, I don’t know if I heard, but do you expect any change in rent post-transition?
Dave Sedgwick: We don’t expect right now any material impact to rent with Eduro.
Jonathan Hughes: Okay. And you said coverage would be — pro forma coverage would go above 1 times for this new operator taking over these two properties?
Dave Sedgwick: That’s right. No, I’m sorry. It would be slightly north of 1 times for Eduro once those two properties are exited from the portfolio. Not for the new operator.
Jonathan Hughes: Right. Okay. Got it. All right, thanks for the time.
Dave Sedgwick: You bet. Thanks, Jonathan.
Operator: Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead.
Austin Wurschmidt: Great. Thanks. Good morning out there. James or Dave, you mentioned in your prepared remarks that deal flow is pretty consistent with recent quarters. But despite the success you’ve had closing deals late in the year and early this year, you’ve increased the size of the investment pipeline. And I’m wondering, is that a function of just the availability of capital you have today, or is it the quality of deals and operators, your underwriting is improving, and maybe some of that work you’ve put in underwriting deals is now at a point where you’re seeing a path to potentially closing?
Dave Sedgwick: Yeah. The deal flow has been pretty steady and James can clean up after me if needed. But I think the difference is that, we’re just seeing some stuff that’s more actionable. So deal flow, considered pretty steady from the last few quarters, just more actionable assets that we can move on.
James Callister: And I think the number of deals we’re seeing, often is pretty consistent. I think it’s just that there’s more that seem to be falling in areas that we’re more interested in with where we have better operator solutions and where we really like what the Medicaid rate has done with just more of those coming in become more actionable.
Austin Wurschmidt: That’s helpful. And one other one for me is, curious if you guys would consider acquiring and operating kind of long-term care real estate under an operating lease structure through [indiscernible] structuring more of the leases where maybe you’re able to participate in some of the recovery and operating cash flows, maybe kind of similar to what you did with Links Healthcare, I think last year?
Dave Sedgwick: Yeah, I would say, never say never. We are a group of — we have a group of former operators here that we think help us do a pretty good job of vetting operators and opportunities. We like the simplicity of our model and we currently have an abundance of opportunities of our typical bread and butter. But we’re always looking for creative ways to expand that pipe.
Austin Wurschmidt: That’s fair. And then last one for me. I guess, what’s the likelihood that you think that you can continue to collect some rent on the 11 assets held for sale prior to that closing?
Dave Sedgwick: I’d say the chances are pretty fair. One of the main reasons why we’re selling to this particular buyer is because we think that gives us the best chance to collect some rents until we close. So that went into our decision of who to sell to and under what terms, and having rent being paid was one of those terms.
Austin Wurschmidt: I appreciate the time. Thank you.
Bill Wagner: Thanks, Austin.
Operator: Our next question comes from the line of Juan Sanabria with BMO Capital Markets. Please go ahead.
Juan Sanabria: Hi there. Just a question on the pipeline. Is there a rough split you could talk to in terms of what’s fee simple versus loans?
James Callister: Yeah, in the $251 million, I’d say that is predominantly made up of acquisitions, not loan activity, currently, as we sit here today.
Juan Sanabria: Great. Thank you. And then just on the — just hoping you could talk a little bit to the watchlist, how that’s evolved and how you’re thinking about that and how that influenced you or not, the conservatism built-in on the non-rent payment factored into full-year guidance?
Dave Sedgwick: Yeah, the watchlist is always kind of a fluid thing. We’ve had operators on it in the past that have graduated off of it in a big way. And so right now we have a few that are very, very small relationships that have needed a little bit more runway and time, turning some buildings. So, we watch those guys closely. Of course, everybody’s looking at Eduro with their coverage that has trended down. So, yeah, I think what we’ve learned over the — going on 10 years here is that there’s probably always going to be a small handful of operators and any portfolio’s watchlist — portfolio that you would call watchlist. And the art here is just to manage that risk down as best we can. And we think we do a pretty good job of that. And so, setting guidance for the first time, yeah, we’re certainly cognizant of our watchlist and — but more so just wanting to be a little bit of conservative, giving guidance for the first time in a number of years.
