Juan Sanabria: And then just on the investment pipeline. Just curious on the $150 million kind of bucket. Is that mainly equity or is that still tilted towards debt? And what type of asset types is it favoring, and any yield color you could provide?
Clint Malin: Right now, most of it’s — there is some equity involved in this, but there also is some loans and structured finance as well. So it is diverse regarding that. And it is all off-market transactions, so we’re very encouraged by that. It depends on the type of asset. But I would say on the loans or structured finance, you’re probably in the 8.5% plus all in depending on property type, obviously, skilled being higher and AL being a little bit lower, but it is a combination and a diverse set type of investments.
Juan Sanabria: And then just on the tenant that’s still receiving abatements, the $600,000 to $700,000. What’s the latest there, how should we think about that going forward, is that part of the disposition bucket, or any commentary around that would be helpful?
Wendy Simpson: Currently, it’s not part of the disposition bucket, and we’ve talked about this operator over the past 12 months. We are evaluating that portfolio. And we did give a little bit of rent guidance on it for this year. So we’re still working through that.
Operator: Our next question comes from the line of Steve Valiquette with Barclays.
Unidentified Analyst: This is on for Steve Valiquette. Would you be able to provide any additional color for specifically potential acquisitions for the rest of the year, how are you viewing that given the current rate environment?
Clint Malin: Well, we think that in the current rate environment, as we mentioned in our prepared remarks, for the banks that are lending, they are lending at higher rates. And as we understand it, lower LTVs. So it does make LTC more competitive in the marketplace and also with REIT financing, the execution, because we don’t put property specific debt on, can’t provide better certainty of close. So we do think it provides — this environment as an opportunity for us to be able to execute on acquisition. So we’re encouraged by what we see the general environment in 2023 but we’re going to be very disciplined in how we approach that. We’ve been fortunate to be able to do the amount of investments we have to date already eclipsing 2022, but we think it’s going to lead to opportunities for LTC.
Operator: Our next question comes from the line of Rich Anderson with SMBC.
Rich Anderson: So let’s see if I can help you with the 2023 guidance here. So you take the first quarter and you annualize it, that’s $2.70. You mentioned transition, and I appreciate and respect the reason why you want to hold off, but it seems like there’s more potential upside than downside from that portfolio. Perhaps you sell it and maybe there’s some dilution there, but more likely, you redeploy that. So isn’t $270 kind of a floor type of number if you think of the run rate from first quarter. And there’s probably through your acquisition pipeline upside from that, is that a reasonable way to look at it, or am I missing something?
Wendy Simpson: I would say that’s reasonable.
Richard Anderson: Second question is I’m not putting you on the spot here or at least I don’t intend to. Next question I’m sorry, we’re talking on one other one. If you go first?
Wendy Simpson: You reverse engineer and we say we want to get to our 80% dividend coverage. And our dividend is $0.13 a month — $0.11 a month
Richard Anderson: What’s $0.09 among I see. So you take the dividend, you targeted 80% payout and you kind of — can kind of come after the number from two directions is kind of the way you’re saying. Is that right?
Wendy Simpson: At this point, in reality, that’s right.
Richard Anderson: Second question is on the joint venture. Clint, you said something about the purchase option. Did I hear you right that they were somehow inherited or were they negotiated into this transaction?
Clint Malin: They were negotiated as part of the transaction.
Richard Anderson: I thought that was the case. So the reason why I’m bringing it up is LTCs finds itself in potentially a better competitive position for the reasons you mentioned in terms of bank lending and so on. Do you feel like purchase options as a negotiating tool maybe starts to wither away a little bit for you guys, or I’m curious as to why it was still presented itself here considering kind of the position of strength that you’re coming from, from a negotiating perspective?
Clint Malin: I mean, obviously, our preference would be not to include purchase options. But in looking at each individual transaction, we have to look at the circumstance and what the specific deal is. And this deal is obviously negotiated in 2022. The lending environment has continued to evolve and change since then, but it’s really working with operating partners and what they want to achieve out of this. And in this case, purchase options and the ones we did last year made sense for that specific operator. Our intent is to build these relationships, grow them and lead into additional investments beyond this. So if we can provide flexibility in how we’re approaching these investments, so we think gets solid growth for future business for those operators.
Richard Anderson: Is there anything more beyond the joint venture and the mortgage with this operator that is upside that you see in terms of a relationship here, either with them or maybe just in the state of North Carolina?
