Good day. Welcome to Retail Opportunity Investments first quarter 2023 conference call. Participants are currently in a listen-only mode. Following the company's prepared remarks, the call will be opened up for questions. Now I'd like to introduce Laurie Sneve, the company's Chief Accounting Officer. Thank you. Before we begin, please note that certain matters which we will discuss on today's call are forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and other factors which can cause actual results to differ significantly from future results that are expressed or implied by such forward-looking statements. Participants should refer to the company's filings with the SEC, including our most recent annual report on Form 10-K, to learn more about these risks and other factors. In addition, we will be discussing certain non-GAAP financial results on today's call. Reconciliation of these non-GAAP financial results to GAAP results can be found in the company's quarterly supplemental, which is posted on our website. I'll turn the call over to Stuart Tanz, the company's Chief Executive Officer. Stuart? Thank you, Laurie, and good morning, everyone. Here with Laurie and me today is Michael Haines, our Chief Financial Officer, and Rich Schoebel, our Chief Operating Officer. As reported in our press release, Laurie Sneve is retiring in a couple of weeks. Laurie and I have worked together for over 20 years, first at Pan Pacific and then for the past 11 years here at ROIC. I am truly grateful for her invaluable contributions, wisdom, guidance, and leadership over the years. She will be missed by everyone at ROIC, and all of us wish her the very best in her retirement. With Laurie retiring, Lauren Silvera will become Chief Accounting Officer. Lauren joined ROIC back in 2013 as the company's corporate controller and has been an important part of the ROIC team for the past decade. Mike, Rich, and I look forward to working with Lauren in her new role. Turning to our first quarter results, our grocery-anchored portfolio and tenant base continue to perform very well. In fact, in terms of leasing activity, notwithstanding our portfolio being essentially full at over 98% leased at the start of 2023, we achieved the most active quarter in the company's history, leasing a new quarterly record amount of space and driving our portfolio lease rate to an all-time high at quarter end. Additionally, we again achieved solid re-leasing rent growth. In fact, it was our 45th consecutive quarter over 11 years in a row of achieving re-leasing rent growth on both new leases and renewals. Speaking of renewals, we posted our most active quarter by far in terms of renewing tenants, including long-time valued anchor tenants, as well as a broad range of strong non-anchor tenants. Many of our tenants continue to reach out to us early to execute renewal options, with a growing number looking to extend past the typical five year option period. We think the renewal activity is indicative of the strength and long-term appeal of our grocery-anchored portfolio with its strong location attributes and demographics. It is also indicative of the strength of our tenant base today. Dampening our record-setting leasing, during the first quarter, we had several expenses that impacted FFO and same center NOI. Most notably, we incurred an inordinate amount of snow removal costs, primarily as a result of the unusual severe snowstorms up in the Seattle area back in July and February. We also incurred a one-time expense during the first quarter related to concluding an open item with a seller of a property that we had previously acquired. Notwithstanding these expenses, we remain on track in terms of our guidance for the year. Working to enhance our portfolio through our leasing initiatives, we are also working to enhance our financial flexibility, especially in light of the recent banking turmoil. During the first quarter, we extended the maturity date of our credit facility. While the facility wasn't scheduled to mature until next year, we extended the maturity date out to 4 years from now, with the flexibility to extend it by as much as 5 years. Watching the interest rate swap market closely, during the first quarter, we swapped top of our floating rate term loan, reducing our floating rate debt considerably. I'll turn the call over to Michael Haines, our CFO, to take you through the details. Mike? Thanks, Stuart. GAAP net income attributable to common shareholders for the first quarter of 2023 was $8.1 million, equating to $0.06 per diluted share. Funds from operations for the first quarter totaled $33.8 million, equating to $0.25 per diluted share. As Stuart touched on, during the first quarter, we had several expenses that impacted our first quarter results. Property level rental revenue for the quarter actually came in above our budget, such that actual GAAP operating income for the first quarter was fully in line with our budget, notwithstanding the added expenses. With respect to bad debt, for the first quarter, bad debt was approximately $1 million, which was below our budgeted amount of 1.5% of total revenue. The bulk of the $1 million related to a combination of the one-time expense that Stuart mentioned and various tenant account adjustments. In other words, the bulk of our first quarter bad debt was not related to tenant vacancies. Overall, our tenant base continues to perform well. In terms of financing initiatives, as Stuart noted, during the first quarter we extended the maturity date on our credit line. Specifically, working with our banking group, we extended the maturity date from February 2024 to March 2027, with the flexibility to extend the maturity for one year to March 2028. Additionally, borrowings on our line are now based on SOFR. We also have the flexibility to double the capacity on the credit line from its current capacity of $600 million up to $1.2 billion. As of the end of the first quarter, we had just $67 million drawn on the line. As Stuart highlighted, we continue to watch the debt market closely with an eye towards reducing our floating rate debt, namely our $300 million floating rate term loan. During the first quarter, we capitalized on the favorable window and entered into two interest rate swap agreements, fixing the interest rate on $150 million of our $300 million term loan, locking in the rate at 5.4% through August of next year. With the swaps in place, we lowered our floating rate debt from 28% of our total debt, where we were at the start of 2023, down to 16% as of March 31st. Additionally, in terms of the company's interest expense, our initial budget for 2023 assumed that the interest rate on our $300 million term loan would remain floating throughout the year. Having put the swaps in place, we estimate it could lower our overall actual interest expense for the year by half a million dollars or more, depending upon the trajectory of interest rates as the year progresses. In terms of the $150 million that is still floating, we purposefully held off swapping it out in order to give us flexibility in terms of refinancing options later in the year, including possibly refinancing the $150 million together with the $250 million of fixed-rate bonds that mature in December. The term loan is repayable in full or part at any time and doesn't mature until another two years, which also gives us considerable flexibility regarding refinancing strategies. In terms of mortgage debt, with the banking turmoil, there is currently a lot of concern regarding the commercial real estate lending market, particularly as it relates to mortgage refinancings going forward. Given that regional banks hold the bulk of the mortgage debt, fortunately, we only have two mortgage loans on our balance sheet that together total about $61 million. One loan matures next year, and the other matures in 2025. Our plan is to refinance both loans with unsecured debt. I'll turn the call over to Rich Schoebel. Rich? Thanks, Mike. While the first quarter of each year has traditionally been relatively quiet in terms of leasing activity following the holiday season, as existing and prospective tenants evaluate and set plans for the new year. In distinct contrast, in recent years, the first quarter has become increasingly active across our portfolio, with more and more tenants vying for any space that may have become available following the holiday season. This is especially the case as it relates to shop space, where we continue to see a growing number of franchisees seeking to expand not only in the quick-serve restaurant sector, but more and more in the medical, wellness, and self-care sectors, along with boutique fitness and child development, a number of which are bringing new concepts to the market, and all continue to seek out grocery-anchored shopping centers. Capitalizing on the demand, we posted our most active quarter on record for the company, leasing over 559,000 sq ft. Our robust leasing activity helped drive our portfolio lease rate to a new record high of 98.3%. As Stuart highlighted, the bulk of our leasing activity centered around tenant renewals. During the first quarter, 512,000 of the 559,000 sq ft that we leased involved renewing existing tenants. In terms of anchor space, at the start of 2023, we had a total of 393,000 sq ft scheduled to roll during the course of the year. In just the first three months alone, we have already renewed 384,000 sq ft of anchor tenants. Five of the anchor tenant renewals were long-standing supermarket tenants. Additionally, one of the anchor renewals involved a long-standing tenant whose lease wasn't scheduled to roll until 2028, but they came to us wanting to exercise their five year option now and extend their lease through 2033. We also had three anchor tenants that came to us about extending their five year renewal option out to seven years. Taking all of our anchor renewal activity into account, as of March 31st, we now have only three anchor leases scheduled to roll this year, two of which we expect to renew, with one tenant seeking a seven year extension instead of five, and they would also like to extend their leases similarly at several other locations within our portfolio that roll in future years. With respect to the third anchor lease, which is a 17,000 sq ft space, we are currently in discussions with several prospective new tenants to lease the space, where we expect to achieve a significant increase in rent. Looking out further at 2024, we currently have 13 anchor leases scheduled to roll, of which we expect that 12 will renew. In terms of non-anchor space, at the start of the year, we had 466,000 square feet of shop space scheduled to roll. During the first quarter, we re-leased 175,000 sq ft in total of shop space, of which about three-quarter of that were renewals. In terms of re-leasing rent growth, we posted another solid quarter, achieving an 11% increase in new leases signed during the first quarter and a 6% increase on renewals. With respect to getting new tenants open and operating, we had another active, successful quarter. At the start of the year, the spread between leased and build space stood at 3.9%, according to $7.6 million of rent from new tenants that had not yet taken occupancy and commenced paying rent. During the first quarter, new tenants representing $2.1 million of the $7.6 million took occupancy. Taking into account new leases signed during the first quarter, at March 31st, the spread stood at 3.2%, representing $6.5 million of rent that has not yet commenced. We expect the bulk of the $6.5 million will come online as we move through the year. I'll turn the call back over to Stuart Tanz. Thanks, Rich. Our continued success with leasing and the ongoing demand for space against a backdrop of increasingly challenging and uncertain economic environment speaks volumes as to the fundamental strength of our portfolio and the benefits of our hands-on approach. As we continue to capitalize on the demand, we are focused on making the most of every opportunity to enhance our already strong necessity and service-based tenant mix. Importantly, as always, we continue to be disciplined and selective with the tenants that we are renewing and the new tenants that we are bringing to our portfolio. In terms of acquisitions and dispositions, we currently have one property under contract to sell for $15.4 million. It's a property up in the Portland market that we acquired back some years ago as a value add reposition play. Since acquiring the property, we fully re-tenanted and re-merchandised the center, increasing the NOI substantially along the way. While the center is a stable property, it is one of the few properties in our portfolio that is not grocery anchored. Beyond this, we have several other properties that we are exploring selling. At the moment, we are currently holding off with moving forward until there's more clarity in the market. Just a few short months ago, the acquisition market was starting to show encouraging signs of becoming active and favorable again. The sudden banking turmoil has caused traditional mortgage lenders and other capital sources, as well as buyers and sellers, to pull back significantly. Activity in the market in terms of actual deals being consummated is currently very limited. With respect to the few transactions that have occurred recently in the grocery anchored sector on the West Coast, cap rates have been in the low sixes, but there hasn't been enough activity to really know with confidence where the market is heading. While we are being patient, we continue to be proactively engaged and continue to have discussions with our off-market sources so that we are in a strong position to move forward once there's clarity in the marketplace. Based on our experience over many years through numerous challenges, market conditions often change rapidly and opportunities quickly arise, especially in terms of off-market acquisitions. In the meantime, we intend to continue working diligently at enhancing the value of our existing portfolio. Notwithstanding all of the various macroeconomic challenges, our portfolio remains rock solid, and the fundamental drivers of our grocery-anchored business remain sound. Now we will open up the call for your questions. Operator? Thank you. To ask a question, please press star one one on your phone and wait for your name to be announced. To withdraw your question, please press star one one again. Stand by as we compile the Q&A roster. One moment please for our first question. Our first question will come from Craig Mailman of Citi. Your line is open. Good morning. Good morning, everyone. Hey Stuart, how are you? I'm well, and you? I'm doing good. I wanted to follow up on your kind of commentary around tenants looking to extend beyond that five-year term and maybe coming to you early. I guess other than the rent spreads that you're getting, which has been healthy, kind of what other concessions have you been looking for? Are they willing to give up to go, you know, to lock in longer at this point? Sure. I mean, it really depends on the situation. In a lot of cases, a tenant may come to us and have limited options remaining, and they want an additional option, and in exchange for that, we'll insist on additional committed term. In other situations, we may have two anchors that are expiring, simultaneously, and we want to start splitting those expirations up so that we don't, in the future, have, you know, a bunch of anchor tenants expiring all in the same year. It really depends on every situation, and we evaluate those requests, and there's always some form of a trade-off, where we're getting some form of value for that additional committed term. When you say some form of value, like, Are you able to put in better escalators? Are you getting kind of encumbrances taken off that they may have had on the parking field? Kind of what's your goal to improve the MPV of those leases to go out on the longer-? Yeah. There's a number of items that we're dealing with in terms of this. First one is ESG. We're able to very successfully incorporate now what we need at the property level from an ESG perspective. Second thing is, you know, exclusive or uses in the leases. We're very active on that front to make sure we can do whatever we can. The third is no build zones from the anchor tenants, give us the ability to build more pads and create more NOI going forward. It's really a combination of series of different things, but we're trying to, you know, obviously in giving them more term, incorporate all of this in terms of the actual extension. That's helpful. Moving to the acquisition market, it sounds like you guys sort of had something under contract, but at the time of our conference, it sounded like you had one deal. Can you kind of talk to what happened there? On kind of the dispos you have in the market, maybe the buyer pools that you've been talking to, the nature of the buyers, just a little bit more color overall. Sure. The buyer pool, I think as I mentioned in my prepared remarks, obviously has thinned out. As once in a while when we see a very good grocery drug anchor center come to the market, we are tracking things extremely closely and, but again, the buyer pools are very thin out there. In terms of the deal that we currently have, that deal is still around for us. We're dealing with a couple of items at the property level, primarily some environmental issues, but that particular transaction is still on the table for us. I will tell you there's been a lot of ongoing discussions on OP units again with some of those sellers, which is encouraging. More importantly, we certainly have our pulse on a pipeline of off-market transactions, which we think will play certainly very well into our game plan, as we move through the balance of the year on the external side. Those I assume are kind of still in that low 6% going in cap rate range. Yes. Most of the or the very, you know, small number of deals that it had, which have been primarily 1031 buyers, have traded in that high five, low six cap rate range. Great. Thanks, Stuart. Thank you. Thank you. One moment please for our next question. Our next question will come from Juan Sanabria of BMO Capital Markets. Your line is open. Good morning, Juan. Hi. Good morning. Just if you could spend a little bit more time talking about some of the one-time expenses and where those are included in the P&L, just to have a better sense of what the go forward run rate is? I know you mentioned the snow removal costs, but anything kind of over and above that would be helpful just to have some confidence on how to model and your conviction on the previous same-store NOI guidance range? The snow removal cost, Juan, is gonna be in the operating expense line now because as Stuart mentioned, the significant snowfall that occurred up in the Pacific Northwest region, we had to plow out the parking lots numerous times to keep the tenants open and operating. Then there was a one-time item where we finally resolved a kind of a disputed issue with the seller of a property that we bought a couple of years ago, and finally came to a resolution and took a bit of an expense on that side. I think that was in our other expense, not our operating expenses. Those if you exclude those, you know, I think our operating performance is right in line with budget. Yeah. I mean, look, in terms of modeling, obviously we do very detailed budgets, every year, and we incorporate increases in expenses in those budgets. Going forward, Juan, I don't think you're gonna see, hopefully won't see any, you know, items like you've seen in the first quarter, which again are very, very focused and relative to situations that were out of our control. How much was that, the one time item that with the dispute with the seller, roughly? It was just over $300,000, I believe. Okay. Just curious, you mentioned bad debt was kind of running in line. What's assumed for the balance of the year? We've obviously had some known kind of tenants finally fall out. Just if you could remind us of your exposure, which I think is fairly de minimis, but what's assumed for the balance of the year given we're already almost in May, which is kind of crazy to think about, but just. Yeah. In our bad debt guidance, the range for the full year is the $3 million-$5 million, which should more than covers our typical operating and any other one-time items that might pop up. To your point, I think we have very minimal exposure to any of the headline retailers out there. That $3 million-$5 million range for the entire year should stand well. Great. Thank you very much. Thank you. Again, one moment for our next question. Our next question will come from Lizzy Doykan of Bank of America. Your line is open. Good morning, Lizzie. Good morning. Good morning. I was just curious about any changes in your assumptions around the pace or amount of acquisitions and dispositions, that was put out in guidance from last quarter. I guess, would you be willing to take on slightly higher leverage, or is the priority still on maintaining net debt to EBITDA in the low sixes as you put out last quarter? Just wanted to see if there's any changes in the pace assumptions on pace. Yeah, I mean, I'll speak to the, Mike, you can answer the question on the second half of the question. In terms of guidance, I mean, we're still on track, you know, to get, you know, $200 million is the goal this year. Obviously, that will be funded a lot through sales and other things that we're doing. There's no change to guidance. The more important thing is that we have guided and modeled, the acquisitions in the second half of the year. In relation to our debt, you know, leverage ratios, that's all. We're keeping those intact where they are. We're lowering them. Got it. Thanks. I wanted to dig into the guide on same store NOI growth just a bit more. Are we still assuming that range of 3% to 5%? Just given that the spread on NOI seems to remain the same or that didn't change, just wondering if there's any changes to your outlook on the assumptions leading to the bottom and the top ends of that range. I would say, you know, our internal budget actually has same center NOI growth starting out slightly down in the first quarter and then steadily ramping up as we move through the year. At this point, you know, four months into the year, we're still on track to achieve same center NOI growth for the full year. That's within that guidance range that we. Put out earlier, including potentially even the higher end of the range. We're still comfortable with that range as we stand today. Okay, thanks. Lastly, if I could, just get the latest update on your densification efforts. I guess what's the latest on entitlement efforts at Crossroads? Then maybe the couple of others you had mentioned last quarter. Sure. Well, Pannell is fully done and fully entitled, and we're just waiting for the right moment in time to put that on the market and sell it. Pannell, we're getting very close to getting final entitlements. Probably another 60-90 days out, maybe a bit longer. You said Pannell, but you meant. I meant, sorry, Novato, not Pannell. In Bellevue, in terms of construction on phase II at Crossroads, we're currently moving through the permitting process, which we now expect to be completed probably by the end of the third quarter, although it's difficult to gauge given the pace that the municipality tends to operate at. Once we complete the process, at that time, we will determine whether or not to commence construction or wait until there is more clarity in the marketplace. Okay, got it. just to clarify, I guess the biggest hindrances are still the same factors as it has been just, Is it due to supply chain or just, I guess the timeline of, seeing those delays? Yeah, I mean, it's really more related to the city of Bellevue and the process internally than it is to supply chain or other things. Again, we're anticipating that, hopefully, we finally get through this process, you know, towards the third quarter, maybe the end. Again, it's outside of our control. Okay, got it. Thank you. Thank you. Thank you. One moment please for our next question. One moment. Our next question will come from Todd Thomas of KeyBanc Capital Markets. Your line is open. Good morning, Todd. Hi, Todd. Hi, good morning. I just had a question back on leasing and sort of the rent spreads. You know, the portfolio is 98.3% leased and leasing production was very strong in the quarter. You know, rent spreads have been solid over the last several quarters, just curious why leasing spreads are not even stronger, just given how little space you have to lease within the portfolio. Whether you're taking a more conservative approach with regard to rents in order to stimulate leasing demand or maybe it's a mix issue. Can you just talk about that and whether you expect to see pricing power begin to improve a little bit more in the near term? Sure. I mean, obviously, you know, some of that's dictated by, you know, the specific leases that we're getting back, in terms of where they were at and what the market rents are. There are a lot of leases that are scheduled to roll that are below and significantly below market, where we'll see some really good lifts. On the renewal side, you know, that is also impacted by options which are already baked in and we don't have any control over those rent spreads. As you say, with the 98% occupancy, it really does give us the leverage in the right opportunities to drive the rents when we have that opportunity. Okay. If we look ahead to the balance of 2023 and also 2024 expirations, you know, what's the mix like between leases with option rents versus those that you'd be able to renew or negotiate a fair market value? I don't have a specific percentage, you know, that do not have options, but there are, you know, some of these properties where these leases have been in place for a while, they are starting to burn off their options. That's what is driving some anchor tenants to come to us, early to secure additional options, particularly we're in the situation where they want to invest capital in the space. It's hard to give you a specific, you know, a number or range, but we would expect that, it'll be consistent with our past performance. Okay. Michael Haines, I think you touched on this briefly, but maybe you could just add a little bit more, you know, detail or provide some thoughts, on the remaining $150 million, you know, portion of the term loan that's still floating. You know, whether or if there's an incremental amount of that $150 million, you know, variable rate that you might look to swap out. You know, you talked about the unsecured maturity later this year. Where, where do you think pricing would be today for, 10-year notes? Let me address the second part of your question first. Today, I think the 10-year is around 3.40, maybe 3.50. It kind of bounces around. I would expect to do a 10-year deal probably in the low to mid six range today, given where spreads are. I'll have to keep an eye on where the 10-year Treasury goes from here. As far as the swapping goes, you know, we wanted to maintain as much flexibility as possible. Our goal is to refinance the $250 million that are due in December with a new public bond issuance. To achieve reasonable investor interest and hopefully better pricing, we look to issue up to maybe $400 million of public bonds by refinancing the $150 million of the term loan with those 23 bonds to get a total of $400 million. That leaves the part that I swap and looking into next year when we have another $250 million bonds maturing at the end of 2024, we could again look to do another $400 million bond deal, refinancing that along with the $150 million that we swap, which then becomes available to be paid off. It's kind of a flexibility issue of doing just kind of two back-to-back $400 million deals, splitting the term loan, and refinancing with our two public bond issues as they mature. Okay. Got it. That's helpful. I think you said, as it pertains to the full year guidance that, as a result of the swaps that you put in place during the quarter, that interest expense is now expected to be about $500,000 lower than the initial guide. Is that right? Yeah, that's right. Where the curve was, we originally modeled the term of the float all year long, when we did the model for the initial guidance, it's where the curve was at the time. As you know, that's been moving around a little bit. Based on that original curve and the expected interest expense, that swapping will save about a half million or more. Okay. outside of the December maturity and what you might do there's no additional capital raising activity embedded in the guidance? Correct. That's correct. Okay, great. All right. Thank you. Thanks, Bud. Thank you. One moment for our next question. Our next question will come from Wes Golladay of Baird. Your line is open. Good morning, Wes. Hey, good morning. Hey, good morning, Stuart Tanz. Just kind of a follow-up question on the, you know, the tenant health in the portfolio. Can you comment on your overall exposure to some of these bank branches of the banks that are, you know, in the news every day or not every day, but every so often. Second follow-up would be exposure to Bed Bath & Beyond. It looks like you have one buybuy BABY. I just wanna make sure that that was correct. Just the final one, can you comment on your Rite Aid exposure and how you feel about that? Would you look to recapture any of the space this year? Sure. Well, Bed Bath & Beyond, we don't have any of. We do have two buyb uy Babies, but the ABR only accounts for 0.038%. Less than a half of 1% from an ABR perspective. These two buybuy Babies are in great locations, very strong sales. We don't expect, these leases to be rejected. However, we certainly have been very active in the market re-leasing both spaces, and we currently do have some very good tenants lined up if things were to go away. Rich, do you wanna comment on bank branches and Rite Aid? Sure. In terms of Rite Aid, there's only, they only account for about 1.7% of our total base rent, which is from about 16 leases, which are across our portfolio in all of our markets, with many of those leases below market. One of the leases coming up in the next two years is a Rite Aid lease that is significantly below market. It's one that we mentioned that is not renewing. We expect to have a very big spread on the replacement rent. Then in terms of bank branches, we really haven't seen any fallout from regional banks. We have received notice from some larger banks that we're they're giving back some spaces. Those spaces that we're getting back all incorporate drive-throughs. We're currently while the rent is still coming in redesigning those buildings to facilitate the strong demand that we have for drive-throughs throughout the West Coast. We actually see this as an opportunity to re-tenant those spaces. Yeah. In fact, in one situation, I think during the quarter, Rich, we had Chase actually re-lease, did a new lease on a Bank of America branch. Correct. Although we've seen a bit of fallout, we've also seen some activity on the other side in terms of new leasing. Rite Aid, I mean, I think as we've mentioned before, you know, obviously a number of our Rite Aids are newer prototypes, which means they're on pads with drive-throughs. Mm-hmm. In terms of sales, a number of our Rite Aids are in the top third in terms of sales. You know, we've seen this sort of play out before over the last 20 years in terms of dealing with Rite Aid. We certainly feel quite comfortable where our portfolio stands today in terms of, you know, capturing and potentially getting some nice upside if Rite Aid were to go away. Fantastic. Then, I guess a quick modeling question. Looks like other revenue was abnormally low this quarter. Anything special going on there? Actually last year, the other income was a lot higher. It was primarily related to an early lease recapture initiative where we replaced an existing tenant. That was it was actually last year was the outlier. Okay, fantastic. I think that is it for me. I appreciate the time, guys. Great. Thank you. Thank you. Again, one moment for our next question. Our next question will come from Michael Mueller of JP Morgan. Your line is open. Good morning, Michael. Hey, good to talk to you. You mentioned earlier in your comments that there are some other centers that you're thinking about listing for sale. Just curious about, you know, how big that bucket of centers is. What are some of the attributes of those? Sure. Well, we actually have, you know, I think it's the only other center that's non-grocery anchored. We actually have on the market as well. We actually do have an LOI that came in yesterday that we may execute on. That potentially gives us another, I don't know, $12 million-$14 million of proceeds. Outside of those two assets, we are looking at putting a couple of other stabilized, fully leased assets on the market that have very little internal growth, like the one we're currently selling in Portland, on the market as well. The bucket, to answer your question, is probably four to six centers, depending on market conditions and depending on pricing more than anything else. Got it. That's four to six exclusive of the two that we know about. That's correct. That does exclude the densification as well. I'm hoping that the multifamily market gets a bit better, and we're ready to go on selling both of those assets, which could provide another, let's call it $20 million-$25 million of proceeds. Got it. Okay. Thank you. Thank you. Bye. Thank you. again, one moment please, for our next question. Our next question will come from Linda Tsai of Jefferies. Your line is open. Good morning, Linda. Linda. Good morning. In terms of the $400 million bond at year-end, where would that price today? Today would probably be in the low to mid 6% range, assuming a 10-year at about 350 or 340. Thank you. Then how much more does the drive-through benefit the cap rate of one of your shopping centers? In terms of our pads, the drive-throughs would certainly, you know, I think it certainly helps the process, but it's not going to drive cap rate by any meaningful difference. I think, you know, drive-throughs are more related to leasing and the incremental increase you get in leasing in terms of rent. From an acquisition or disposition perspective, we look at it as part of the overall property in NOI. Thanks for that. Then in terms of your 9% Kroger and Albertsons exposure, has there been further communication of potential overlap? You know, while we continue to communicate regularly with both Kroger and Albertsons and conduct business, you know, as usual, including renewing leases, you know, we're just not at liberty yet to discuss their consolidation plans. It's just too early in the process, you know, in terms of the government and the FTC in terms of the process. Maybe just in terms of the potential buyers for your four to six centers, how focused are they on potentially inheriting SpinCo assets? It hasn't come up at all in terms of the discussions. You know, the one or two deals on the market that have Albertsons and/or Safeway, you know, I don't think that's had much impact either, to tell you the truth, from a pricing perspective. It really, I mean, obviously, there's a lot of noise around this, but it really on the ground has had very little impact from a pricing perspective. Because at the end of the day, you're really looking at the attributes of the real estate and more importantly, the sales and the economic aspects of what you're buying as it relates to Kroger or Safeway anchor tenants. Thank you. Thank you. As a reminder, to ask a question, please press star one one on your phone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment please for our next question. Our next question will come from Paulina Rojas Schmidt of Green Street. Your line is open. Good morning. Good morning. My question is about occupancy costs. We usually think about occupancy costs for anchors. I wonder, do you track that metric at all for your small shop tenants? Even if you do loosely, how would you say that it has evolved, or how does it compare relative to the past? Sure. Rich, do you wanna. Yeah. I mean, we always pay close attention to the occupancy cost because that has a big effect on, you know, how much rent we can get out of the tenants. You know, the things that we have control over, such as the operating expenses, you know, we stay very focused on keeping them as low as possible. The overall, the tenants continue to perform well. The occupancy costs are sustainable. You know, we are not getting any pushback from tenants on the renewal side in terms of their occupancy costs. Thank you. One last question. You mentioned a couple of times that you have seen very few transactions, but the ones that you have seen close have been in the West Coast, have been at low sixes. I'm curious, do you in your view, has the quality of those assets that have transacted, been similar to your portfolio? Are they representative for your portfolio? You know, again, very few transactions to talk about. These have been, you know, pretty good quality stabilized grocery-anchored centers. I would tell you that, certainly the quality of the assets have been there, but these assets are newer in nature. Therefore, rents, you know, in terms of creating NOI growth at the property level has not been that strong because they're brand new leases. We continue to monitor obviously the market very closely, but most of these deals, and again, very few of them that have traded, these have been very stabilized newer assets. The cap rates sort of reflect, in my view, not a lot of internal growth because they're typically 100% occupied. Thank you. That's all. Thank you. I'm seeing no further questions in the queue. I would now like to turn the conference back to Stuart Tanz for closing remarks. In closing, thanks to all of you for joining us today. As always, we appreciate your interest in ROIC. If you have any additional questions, please contact Mike, Rich, or me directly. You can find additional information in the company's quarterly supplemental package, which is posted on our website as well as our 10-Q. Lastly, for those of you who are attending ICSC convention in Las Vegas next month, please stop by our booth. We will be in the South Hall on level 1, specifically booth number 807. We hope to see you there. Thanks again, and have a great day, everyone. This concludes today's conference call. Thank Thank you all for participating. You may now disconnect and have a pleasant day.