Mike Weil: Yes. So obviously, Europe can’t be painted in a single brush. So there the part of Europe that we have always focused on has been a stable European market, typically Western Europe and tends to have similar traits to the U.S. market, especially when you think about the tenant names that consist of the 20% European exposure. So some of our disposition targets are in Europe, and we are very active in getting strong indications. It’s a little bit early to discuss in detail. But the buying market in Europe remains strong. Cost of debt in parts of Europe is actually a little bit more attractive still than in the U.S. And — our focus for ’24, I just want to reiterate, is on the dispositions, not on the acquisitions. So we have engaged local brokers that we have long relationships with on a few assets that we think meet the disclosed criteria as noncore dispositions.
And our $400 million to $600 million really does focus on the retail and office. And any maybe near-term nonstrategic assets and some of them are in Europe and the market is active.
Operator: Our next question comes from Todd Thomas from KeyBanc Capital Markets. Please go ahead with your question.
Todd Thomas: I wanted to circle back to the AFFO guidance of $1.30 to $1.40. It’s about $0.05 to $0.06 per quarter lower than it seemed like you were anticipating when the merger was initially announced. Can you provide a bridge and just help us understand some of the moving pieces to help us understand that the current quarterly AFFO run rate just relative to what was loosely discussed a couple quarters ago.
Mike Weil: Yes. Thank you, Todd. The biggest change from when the merger was announced to now is interest expense, and it’s up about $6 million per quarter. We have calculated that in, figured it in. One of the goals of the guidance and disposition strategy is that we will be able to pay down some of that debt and drive those — drive that benefit into earnings. As we have talked about also, there was some movement in the European tax structure as far as the year-end charge and Chris and team, and Chris can talk about this in a little bit more detail, but Chris and team have addressed that with a European tax restructuring that was completed in the fourth quarter, and we’ll have immediate benefit in the first quarter. So those are 2 of the biggest items.
It was also in — as far as in the fourth quarter, just the completion of some merger activity and what I’ll call, cleanup. But the 2024 full year guidance, I think the — the way we’re viewing interest expense is probably the biggest change.
Todd Thomas: I guess maybe for Chris, just to further discuss the guidance a little bit. I mean you seem to be on track for the G&A with the synergies that you’ve previously discussed, but it sounds like interest expense is up. I mean, are you able to provide any additional ranges around either straight-line rent or sort of cash NOI at year-end or the cash interest expense that’s embedded in the guidance?
Chris Masterson: I’m sure, I guess just first to start in terms of the synergies. As you mentioned, we’re fully on target to reach the $75 million in even exceed that in terms of the overall synergies. For cash NOI, I do want to mention in the fourth quarter, as Mike said, there was about $2 million sort of cleanup type of items coming in, which were negatively impacted in the fourth quarter and will not be in the first quarter. And then just in terms of the overall go-forward, we obviously expect to be leasing up the multi-tenant properties and not to help push the NOI.
Todd Thomas: And then just curious with the, obviously, the focus here is on dispositions, but I’m curious if investments are at all a consideration. In the past, you’ve you found deals at high single-digit, low double-digit going in yield. Is there any consideration to either recycling proceeds from dispositions at all or some of the additional retained earnings from the dividend reduction in the new investments at all in 2024?
Mike Weil: Todd, I think the most important thing that we will do in 2024 is lower net debt to EBITDA, and that is the focus of the company. And I think the as we drive our cost of capital to a more reasonable place, then we could look at potential acquisitions, but 2024 is really focused on dispositions and lowering net debt to EBITDA, cost of capital and improving our trading multiple so that we have that — the ability to really take advantage of those types of acquisitions that we’ve always been able to generate. And we look forward to the future where we can do that. But right now, we understand and are committed to this plan and the results of it.
Todd Thomas: And just lastly, if I could, on the dividend reduction. Can you just talk a little bit about the Board’s decision to reset the payout to that sort of 80% range and talk about the decision to reset at $1.10. I’m just curious whether there was any consideration to reduce it further, retain even more capital, which could help further reduce leverage and improve your cost of capital? Was that at all a consideration?
Mike Weil: Well, I can’t really disclose too much about Board discussion, as I know you can understand. But nobody — let me restart that. Dividend policy is a top priority. And we understand the importance and the tough decision around making an announcement of a dividend cut. I think this low 80% payout ratio as I said, based on the quality of the portfolio, the investment-grade percentage, et cetera, is justified. And it’s an important aspect, as you know, of running a REIT. And we appreciate the really deep conversation and analysis that we undertook with the Board, and we think that this is a good place to come out. And for 2024, this gives us the ability to pay down debt. It’s about $75 million of additional retained earnings, which is meaningful.
