Chris Lau: Sure. This is Chris, I can start with that. There’s no hard and fast target. But I would go back to some of our prior comments that for the right opportunities at the right level of return profile relative to on balance sheet cost of capital. Priority number 1 is to capture those on balance sheet, but cost of capital considerations come into play. And then the other consideration here is that as we think about capturing that development opportunity that we’ve been talking about, it’s really mission critical to us that we have the capital confidence to continue to fund our development program without built-in reliance on common equity capital. And in terms of metrics here, it is very important that we keep our wholly owned pipeline assets prudently below 10% of total gross assets, and that’s exactly where the joint venture capital strategically comes into play as the perfect solution to enable us to accomplish all of those goals.
Jason Sabshon: Great. Thank you.
Operator: Our next question is from Linda Tsai with Jefferies. Please proceed with your question.
Linda Tsai: Hi. As you look at the 30-plus markets over which your portfolio is spread, which markets do you see as having the most opportunity to expand versus trim over the next few years?
David Singelyn: Yes. Linda, it’s Dave. I think without talking about the specifics, I think an easy way to evaluate how we look at it is look at the markets that we are building in. Those are the markets that we see today that have the greatest long-term runway. You have to make a long-term commitment when you do development. So, we’re not in all 30 markets, but we’re in a significant majority of them and that’s where I would say that we see the greatest opportunity. On the disposition side, I think Chris touched upon this a little bit. I think Bryan did, too. We have an asset management process that we look at properties and markets. We look at the markets detail every quarter on properties pretty much every month. And with that, we have pared back a little bit in a couple of markets, not that we want to get out of them, but we may have felt that we’re a little bit overweight and Chicago comes to mind there.
Linda Tsai: And then is the cost of insurance or the ability to ensure shifting your decision to expand or leave certain markets? Or is maturing your captive insurance program the way to reduce risk.
David Singelyn: Yes. So on the insurance aspect, I think the insurance aspect is probably — should be looked at even in a little bit greater context. And that is where is the cost of maintaining a home from a repair standpoint to the weather standpoint, the insurance standpoint, how does that correlate with where the demand is and where the opportunities are. We have been — we have looked at this very closely for a number of years. And you can see that — if you go back and you look at our history on some of the weather-related issues, go back to Tampa last year. Tampa was a major event. There’s no doubt about it, but the hurricane there. our impact in Tampa was pretty minor compared to what we understand others experience.
And so there’s a little bit of — there’s a greater analysis than just insurance in that equation. And so but we also have to look at where the demand is and where the potential rental rate increases are as well. So, it’s a very large holistic bottom line approach to evaluating markets.
Operator: We have reached the end of the question-and-answer session. I would now like to turn the call back over to David Singelyn for closing comments.
David Singelyn: Thank you, operator. Thank you to all of you as well. We’ll talk to you again on next quarter’s call. Have a good day.
Operator: This concludes today’s conference. You may disconnect your lines at this time and we thank you for your participation.
