So — but it gives you a perspective of kind of that. I think they would argue the appraised value is much higher than what they exchange at, but we ultimately did not go through the appraisal process.
Floris van Dijkum: Thanks, David.
David Simon: Thank you.
Operator: Our next question is from Vince Tibone with Green Street. Please proceed.
Vince Tibone: Hi, good afternoon. So minimum base rents were about 3% year-over-year, which is about the same level as contractual bumps. So I’m just trying to get a sense of leasing spread economics here. Like, does that mean leasing spreads are also in the low single-digit range or are there other factors influencing this metric, one way or another?
David Simon: Well, I mean, I’ll see if Brian will add to it. Just remember, this is the total portfolio, so to move this thing up takes a lot, right? And spreads are just a moment — leases that come in and go out. So you can’t really look at it that way. So for us to move the entire portfolio gives you a sense of leasing spreads. Now, if you look at whatever pages on the 8-K, the new — we added some new information there on the 29 — 21. That — you’ll see some of that — some of these that are going in there now are driving the rent. Those numbers now include our new leases that are driving that base minimum rent up.
Brian McDade: Yes. I mean we typically only touch about 10% of our leases a year, Vince. So you got to factor that in as well. So renewals are about 10%, but the balance is our new leases, which as David said, are really driving the higher — or contributing to the higher average base minimum rents.
Vince Tibone: But was my statement fair though, that contracts will bump for base rents still around 3% or are they lower than that, the overall portfolio?
Brian McDade: No, they’re right in that range, Vince.
Vince Tibone: And then just — is there any color you can share about renewal spreads? And I know it’s hard to move the overall portfolio with 10%, but this kind of conversation means they’re not too far away from the average contractual bumps. Because if they were plus 30%, to take an extreme example, we could see that in the metrics. So I’m just trying to ultimately get some more color here on renewal economics.
David Simon: Yeah. I mean, I guess, again Vince, in order to have the average base minimum rent go up for 20,000 leases, okay, of 3%, versus 10% to 15% that calculate spread, you’re going to be — mathematically going to have rent spreads that are higher than the 3%. And we’ll walk you through that later, but that, just from a math point of view, there’s just no way that that can drive that number up, but we’ll walk you through that. So when you say that, we would say to you that’s not reality because in order to drive up average base minimum rent for 20,000 leases or thereabouts, you’re going to have to outperform much more than the 3% on just what’s rolling over.
Vince Tibone: We can take it offline. I appreciate the time.
David Simon: Thank you.
Operator: Our next question is from Greg McGinniss with Scotiabank. Please proceed.
Greg McGinniss: Hey, good evening David and Brian. I’ll keep this to 1.5 questions for you. So last quarter you spoke about potentially being more active with asset recycling or reallocating real estate capital. Have the challenges facing the financing market changed those expectations at all? Or how are you thinking about that today? And how are higher interest rates impacting your customers and tenants?
