Dave Dupuy: My thought process here is it would be a credit neutral to a credit improvement. A lot of GenesisCare’s problems stem from the fact that the Holdco level, they way over levered the business. And so, a lot of the issue that we’re seeing with GenesisCare is the reality of putting a lot of debt on the business and that debt more than likely wasn’t hedged creating significant issues for the operating companies to amortize and pay off that debt. So, we don’t think that the underlying assets are as much a problem as the actually the original capital structure. So — and there are a number of regional cancer operators. A lot of those are not-for-profit companies that I think are very stable, very good credit tenants. And so our view is this would be neutral to an improvement related to credit. But keep in mind I think a lot of the problems that GenesisCare just relates to the capital structure that they put on the parent.
Rob Stevenson: Okay. That’s helpful. And then how extensive beyond Genesis is your credit watch list or sort of week 10 however you want to characterize it weak tenant list et cetera. And anybody else of concern at this point in terms of not paying rent?
Dave Dupuy: We always Rob have a list, a watch list that we watch and talk about as a team on a monthly basis and have ever since I’ve been here. So there’s always going to be anywhere from six to 12 tenants that for a variety of reasons, we’re working with them and dealing with potential issues. But we’re not seeing anything out of the ordinary or unusual in that watch list and how it’s evolved over the last six to 12 months. It’s been a — we had issues, we deal with those issues. And then there’s another tenant that will focus on after resolving the issues of the tenant that we dealt with before. So, we’ve got a watch list. We manage and work that watch list very, very closely. But look, we’ve got, I don’t know roughly 250 tenants. And at any one time, it wouldn’t be surprising to have eight to 10 of those that we’re working through.
Rob Stevenson: Okay. That’s helpful. And then last one for me. When you guys look at financing the acquisition pipeline, what’s the cost for incremental debt these days? Is there any debt available through term loans et cetera that would be cheaper than I think the revolver is now probably up to 7% or so with where SOFR has gone?
Dave Dupuy: Rob, you’re right, that is how we look at our margin cost of debt right now with where daily SOFR is and revolver rates. Obviously, we benefit as you look at our overall cost of debt capital, the hedges that we have in place. And so, on a total weighted average cost of debt, it’s more like 4.4%, but we are cognizant as we think about our marginal borrowing costs that it is that — it was 6.8% at 6:30. We continue to monitor the markets and look at different options. I think right now, the support we have from our lenders. And obviously the returns we’re able to generate from our properties. We’re comfortable with our capital structure, but we will continue to evaluate that.
Rob Stevenson: Okay. Thanks.
Operator: [Operator Instructions] Our next question comes from Wes Golladay from Baird. Please go ahead.
Wes Golladay: Hey good morning guys. I just had a question on the genesis that was rejected. Did anything stand out to you? Was there just too much competition market was the rent level too high coverage low? Just trying to get — I guess a feel for how isolated this one would be assuming a successful reorg?
Dave Dupuy: Yes. I mean, all I can tell you is like I said, we were actually already working with them on a termination related to this particular space. I think they had just determined that this was not a market that they wanted to operate in. They may not have had as deep a group in this market to compete effectively. This is adjacent to the Mission Hospital affiliated with HCA. And the only thing I can guess is perhaps HCA had a radiation oncology presence that this group was not affiliated with. But again I think this is an isolated situation. It’s good real estate. So we feel good about being able to release it. But we don’t view this as something that’s indicative of the rest of our portfolio for sure.
