And today, we’re projecting a 9.3% yield which is a little bit under a 90% margin. So we feel really good about — of course, our job is to lease those but we feel very good in creating VIE for shareholders going forward on those.
Nicholas Yulico: That’s helpful. The second question is, I wanted to see how we should be thinking about the pace of development project leasing up over the next year. Just in terms of the time frame from when it gets delivered to ideally, a more stable occupancy level. And then the other question is related to capitalized interest. It seems like there could be some sensitivity there over the next year based on how long projects take to lease? And any just — any thoughts or reminders you can tell us about how to think about the capitalized interest impact and the development pipeline vis-à-vis how long buildings can really stay within capitalized interest after being delivered?
Peter Baccile: Yes. So I’ll cover the first part of that and Scott will probably talk about capitalized interest. In terms of lease-up timing for next year, obviously, we’re going to be spending a lot of time on that topic when we sit down to do our budgets for next year. At this point, in terms of new developments, we’re not anticipating changing our 12-month downtime assumption. But with respect to the projects that have been completed and gone into service, we’ll be focused on what we think — when we think those are going to lease next year, based upon the level of dialogue that we’re having with our prospective tenants today. So I can’t really give you much more than that on that question. Scott, do you want to cover the capitalized interest?
Scott Musil: Sure, Nick. So we stop capitalization of interest once the development is completed. So we’ve got a handful of developments that are scheduled to be completed up until the second quarter of 2024. So we will have capitalized interest for the first 6 months of that period. For the back half or the last 6 months of the period, that will be dependent upon new starts.
Operator: The next question comes from Craig Mailman with Citi.
Craig Mailman: Just wanted to hit on the data center ground lease in Phoenix here. Just had a couple of quick questions on this. Just first, from a run rate perspective, is the full run rate in the 3Q number? Or do we need to think about additional revenue coming in the fourth quarter to annualize it?
Scott Musil: Yes, Craig. So there’s a little bit of lease income in the third quarter. I think it might be just half of a month. And then obviously, we’re going to get a full quarter in the fourth quarter of 2023. Take a look at our NAV footnote, Craig. We have some more information on the ground lease that you can get some of the economics.
Craig Mailman: Okay. And sorry, I apologize, I didn’t see that footnote. Did you guys put in what the purchase option is in there in the terms of the pricing and how that compares to what the value would have been if you had just kept this as industrial ads?
Peter Baccile: We have a pretty strict confidentiality agreement with this counterparty. So no, we can’t talk a lot about the terms and values and things like that. I can say, generally speaking, the value of data center land is much higher than the value of industrial. So — but that’s all we can really say. Let’s put it this way, we like the economics a lot. Or we wouldn’t have done it. Obviously, we — yes. Go ahead.
Craig Mailman: No, no. Finish your phrase off. Sorry.
Peter Baccile: No, no. I mean it’s a great site and we went into that years ago with big plans for selling to users, developing ourselves, build-to-suits, et cetera. For us to be tested to less than 100 acres go, you can imagine, it’s got to be a pretty good deal.
