Taylor Pickett: Yes. It’s a little too early to put numbers around it. I will tell you that, it’s about $200 million project. The expectation is that the cash returns there will be at least 8%. It could be higher. We’re working through the presales now. They have opened their sales office, and they have got a decent list right now, that are looking forward to being there. In terms of the costs, Maplewood as an entity doesn’t have a source of capital or fund to fill up. So ultimately, that’s going to fall on us, it will be additional capital. How that gets accounted for, I can’t tell you and it’s going to depend on Maplewood when we get to the day of the doors open.
Connor Siversky: Okay. That’s helpful. Thanks. And then maybe one on rent coverage, so curious to see if there are any expectations for that number trending into 4Q? We have mid data suggesting that occupancy had more or less flattened down as expected given the seasonality. I’m wondering if any Medicaid rate hikes took hold towards the end of the year that could push the number higher specifically?
Megan Krull: We did have the Medicare rate hikes in October, and we had some increases in Medicaid. But I think you’ll just continue to see as the occupancy improves as that coverage is going to improve. With the exception, obviously, that December, you have audit adjustments and that can sometimes play into what the coverage looks like.
Connor Siversky: Alright. Okay, I will leave it there. Thanks for the time.
Operator: Our next question is from the line of Tayo Okusanya with Deutsche Bank. Please proceed with your question.
Tayo Okusanya: Hi, yes. Good morning. Just one just about general regulatory backdrop. Again, the – from CMS and minimum staffing rules, the comment period has ended, just kind of curious what kind of came out of the comment period, what could potentially be next steps as CMS continues to kind of think through implementation of minimum staffing rules.
Megan Krull: So like I said, there are about 40,000 comments plus that we’re submitting, and every single one of them needs to be reviewed and considered. I think the idea right now is that the likely implementation of the rule would be sometime in the summer at the earliest, potentially a little bit later than that. And to the extent we don’t really know the extent of how that rule is going to change from where it was proposed. But with that many comments, it’s likely that there are going to be some improvements in it. But at the end of the day, even after it gets finalized, there is still legislative action that can be taken to repeal it, that’s in Congress right now. And there are other ways that, that can be changed over time. And so it’s really too soon to tell what the ultimate impact of that final [indiscernible].
Tayo Okusanya: Got it. That’s helpful. And then just indulge me on the acquisition front as well. Again, I know you don’t have acquisitions in guidance. You did do decent volume in 4Q. Just kind of – as you kind of think going forward, opportunities to buy skilled nursing versus senior housing and potential cap rates, any kind of color you could provide on that would be helpful?
Dan Booth: I will say that we are seeing a very active pipeline at this point. It’s proactive, but since before the start of COVID. So we are, as we pointed out, seeing a number of loan requests. But we’re able to pick and choose the right deals, and we are able to – we are holding pretty firm on our 10% yield requirements.
Tayo Okusanya: Great. Thank you.
Operator: Thank you. Our next question is from the line of Josh Dennerlein with Bank of America. Please proceed with your question.
Unidentified Analyst: Hi, this is Carol Grana [ph] on behalf of Josh. I had a question about the Medicaid reimbursement. Are there any states that you are currently trying to avoid or target in that sense?
Megan Krull: Fairly same target, I mean there are certainly some states that have their difficulties right now, like Pennsylvania is one of those, not necessarily that we would avoid it because we think, ultimately, that will head in the right direction down the road. And Florida, as you know, we exited quite a bit in 2023 and 2022. So, we are not looking to jump back in there quickly anytime soon. And then there are certain states, Texas has staffing issues, our operators personally doing pretty well there, but there are staffing issues in the state. You have got states like Iowa and Missouri, you just had recent rate increases that’s too soon to tell how those states are going to do. So, we just look at where our operators are, where they are looking to do business and where the right opportunities are, and just make sure we understand the risk of each individual state.
Unidentified Analyst: Great. And one other question about the debt investments, though, $167 million, and we are discussing the makeup between the loan and acquisition volumes. Do you see that going forward of continuing to bridge that gap in the capital markets, or is there another color that you are seeing in the deal flow?
Dan Booth: Right now, I think there is just a dearth in senior lending. And otherwise, it’s just – there is not a lot of people out there with capital that are prepared to lend at this point. So, we are just filling a void.
Unidentified Analyst: Great. Thank you.
Dan Booth: I can’t predict that one that will last.
Operator: Thank you. The next question is from the line of John Pawlowski with Green Street. Please proceed with your question.
John Pawlowski: Thanks for the time. Megan, your conversations with your operators, can you give us a rough sense for the average labor cost increases your operators are expecting in 2024?
Megan Krull: I think it’s going to vary by operator depending on what regions they are in. There already have been large wage increases over the past several years. And so it just depends on the competition in those particular states.
John Pawlowski: Alright. Can you give us some direction? Is it closer to 3%? Is it closer to 10%? I am just trying to get a sense for the pace of moderation labor cost backdrop?
Megan Krull: Again, it’s going to be very operator-specific. I would say, on average, I am sure it’s probably in the 4% or 5%, but I can’t really say for sure where that would end up. It just depends on where they are located.
John Pawlowski: Got it. And then as occupancy builds across markets, and there is still staffing shortages, have you seen pockets of your portfolio that haven’t needed to go back to the agency labor from pretty hard and pull that lever just to compete with, again, just the demand of healthcare rising in the markets?
Megan Krull: So, I would say, in general, I mean like I noted, the agency has come down pretty substantially over the last few quarters. There are definitely pockets where you have buildings that are using a lot of agency. But I would say, if we talk operator to operator, most of the time in a few of their buildings that have an agency as opposed to all of their buildings to have agency.
John Pawlowski: Yes. Thank you for your time.
Operator: Thank you. The next question is from the line of Juan Sanabria with BMO Capital Markets. Please proceed with your question.
Juan Sanabria: Hi. Good morning. Just a two-parter, I guess on dispositions. I guess first, how should we think about the rents collected for the dispositions that took place in the fourth quarter largely tied to LaVie. Was there anything being accrued or accounted for there? And secondly, how should we think about the held for sale or ‘24 guidance on dispositions in terms of potential yields on those proceeds?
