Ronald Kamdem: Great. Thanks so much.
Jeff Olson: Thank you.
Operator: [Operator Instructions] The next questions are from the line of Paulina Rojas with Green Street. Please proceed with your questions.
Paulina Rojas: Good morning. And following up with a prior question, so you have the plan to do modest acquisition and you have — your preferred option has been recycling assets, but if you were to see an opportunity, larger opportunity, would you consider issuing equity to take advantage of that, considering how well your stock has done recently?
Jeff Olson: Hi, Paulina. I think we would provided again that all the boxes are checked, where the portfolio is accretive in terms of cap rate relative to implied cap rate, growth relative to the growth of our portfolio, risk relative to risk levels in our portfolio, but yeah, I think, that could be a source of capital for us under the right circumstances.
Paulina Rojas: Okay. And then, I’m curious about…
Jeff Olson: And again, Paulina, what I would come back to, which I think is different from many of our peers in this space, because of our company size, there aren’t that many companies that can do an $80 million deal and actually show a penny a share in FFO accretion. So this could play to our advantage if everything lines up.
Paulina Rojas: Yes. I agree. And then, I’m looking at the Heritage property you acquired, it’s anchored by Ulta, and it has no grocer and that’s what I thought. So, the industry in general, investors love grocery anchored centers. So I’m intrigued by your thoughts about what do you see is the benefit of adding a grocer to centers like this in terms of…
Jeff Olson: Well, I mean, in particular, this center is anchored by two TJX concepts and in total…
Paulina Rojas: Okay.
Jeff Olson: … I would say they bring the same amount of traffic to the center as a grocery store. By the way, TJX is now our largest tenant and we love TJX.
Paulina Rojas: Yeah.
Jeff Olson: We think they are a phenomenal company, so we looked at it from that perspective.
Jeff Mooallem: Paulina, I would add to that…
Jeff Olson: Yeah.
Jeff Mooallem: I would add to that, that this center has four out parcels to, I believe, the best-in-class tenants in each of their categories. You have a Miller’s Ale House, a CityMD, a Chick-fil-A and a Starbucks that’s under construction. So those out parcels alone drive a tremendous amount of traffic. We own the property across the street, which has a BJ’s Warehouse Club and an Aldi’s grocer, so we’re very familiar with the trade area. In our view, more important than having a grocer in the property is really understanding the market and this is a market we know really well. We feel very comfortable with the tenancy there.
Paulina Rojas: That’s very interesting and do you think that there is a cap rate compression for having a grocer, even if it’s unwarranted?
Jeff Olson: No question. No question, Paulina. This could have been a sub-six asset, 6% cap rate asset with a grocer — with a high quality grocer or around 6%.
Paulina Rojas: And then, if I may, the last one, I mean, we have talked about how good fundamentals are. Big picture, do you think this is a business that could grow on a same-store basis more than 3% in the coming years…
Jeff Mooallem: I think it’s probably 2% to 3%. I think it’s more likely a 2% to 3% business for the next several years. I think that trend could move in a positive direction, but it’s only as leases expire, which takes a longer time period and I think it’s possible that we get above that 3%, but it’s going to take some time to get there as an industry.
Paulina Rojas: Great. Thank you.
Operator: Thank you. At this time, we’ve reached the end of our question-and-answer session. I’ll now turn the floor back to Jeff Olson for closing remarks.
Jeff Olson: Great. We appreciate your interest in UE and we look forward to seeing many of you soon. Thank you very much.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.
