George Johnstone: Yes, absolutely. And good morning, Dylan. Look, it varies a little bit market to market. But I think in our Philadelphia and Pennsylvania suburban markets, is probably where we see the best opportunities. When we kind of look at our CBD portfolio today, I mean, average lease is probably 5% below market today. So we do have continued opportunities as people roll to market. And depending on when those leases were last executed, we’re seeing our best mark-to-market coming out of Philadelphia. So rental rate pace is outperforming the increases we’ve seen in construction costs and even in free rent requests. So I think Philadelphia, Pennsylvania suburbs are kind of on the plus side as it relates to net effective rent growth. And I think in Austin, we are probably flat to slightly down when you look at both where rental rates are kind of currently and factoring in where construction pricing has gone.
Jerry Sweeney: Yes, I think Dylan add on to that. I mean, we’ve been very happy with the kind of the mark-to-markets that we’ve been receiving on particularly our University City, CBD and PA suburbs properties. And one of the things that we really do monitor and one of the key points we evaluate, look at our business plan is when we take a look at our ’23 activity, leasing activity, our capital ratios are actually lower than they in ’23 on a projected basis in ’22. And that’s even given the composition of the leasing activity that we’ve targeted. So we continue to remain pretty charged up about the ability to drive effective rent growth in a couple of our core markets University City here CBD filling in Pennsylvania suburbs.
As George touched on, I mean, candidly, we’re somewhat of a price taker in our D.C. operation and have not really had positive mark-to-market there for a number of years and capital costs have remained fairly static, but so down to decrease to that. And then Austin, look, we have some holes to fill in the Austin portfolio in ’23 and ’24. So we’re very much in a very aggressive marketing posture to get those spaces at least up as soon as possible. Those leases again are done on a triple net basis. So we built a bit of an inflation hedge in. Construction cost increases have moderated across the board but are still upward bias. I mean we’re seeing big decreases in construction costs kind of on building superstructure issues that don’t really play in too much into TIs, which is basically sheetrock electrical, carpeting, et cetera, which anything that’s controller-based still tend to have upward is the pricing model.
So hopefully, that provides some clarity for you.
Unidentified Analyst : Yes. No, that was extremely helpful. I appreciate the color there. And then just touching on the Conshohocken asset. I think you mentioned it traded at a sub-6% cap rate. Is there anything that’s kind of driving that cap rate lower than sort of the high 6s to low 9s that you had mentioned in the previous question? I guess I mean in the rest of your suburban portfolio?
Jerry Sweeney: I think for the properties are really well located like 4 Tower Bridge and our other contracting props, our Radnor properties. We certainly love the very low end of that cap rate range I quoted is in place. I think for some of the other products, particularly in the, I call it, kind of the D.C. marketplace kind of Northern Virginia, where effective rent growth has not been that great as we just touched on, I think there, we’re thinking that those properties are trading closer to the midpoint of the range I gave before. But I mean we’re still seeing very good demand. Again, somewhat driven by debt costs, I want to caveat my answer but every time we talk to a potential list of buyers on a really premier asset with good weighted average lease term, good lease structures, no deferred capital good credit tenants.
