Operator: Our next question comes from Aaron Hecht with JMP Securities.
Aaron Hecht : Rental rate growth has, obviously, been pretty strong here, but occupancy looks like it was down across both the consolidated and unconsolidated portfolio. Has that kind of been planned to drive the rate growth? Do you expect that occupancy to kind of level off now? Kind of give us some thoughts on how we should think about the occupancy side of the business going into ’23? And what’s implied in guidance?
Jeffrey Gould : Yes. I’ll start, and then I’ll pass that one to Ryan, a little bit too. So occupancy interesting enough comparing year-to-year. We recognized during COVID and the throes of COVID, people just weren’t moving. There was a — obviously, the freight around and just lack of movement of — renewal activity was greater. So the occupancy — the main trend and main reason year-to-year, the occupancy is down primarily because of COVID days versus more comfort with what’s going on around the environment. Obviously, there’s seasonality, but that’s quarter-to-quarter the same. But we expect occupancy to jump up during the spring and summer months as they always do. Do you have anything to add to that?
Ryan Baltimore : No, no. I think that’s the main driver, as Jeff mentioned. And we generally, as we’ve spoken about in the past, try to keep occupancy in the mid-90s. As we get higher, we look to push rents to bring that back down to where we believe we can maximize the revenue. So this wasn’t surprising to us by any means. I think that, as Jeff mentioned, we had an abnormally high occupancy during these winter months last year. So this was more in line with what we had seen in the past.
Aaron Hecht : Does the strategy change at all given the economic conditions? Do you prioritize occupancy a little bit more than rate growth given the difficulties out there?
Jeffrey Gould : Yes, I would say we’d like to focus on around that 95%, give or take number. So when we see occupancy dropping a little bit, we would do something as far as lowering rents to continue that occupancy. We’ve seen that as a sweet spot for us, generally speaking. And when we see activity or lack of activity in a certain product, whether it be a 1-bedroom or a 2-bedroom on a specific apartment complex, we’ll make adjustments accordingly to keep close to that 95% occupancy if possible.
Ryan Baltimore : Yes. And also just to add on that real quickly in terms of kind of what we mentioned with the guidance, part of that is built into that conservatism that we included. We definitely didn’t anticipate pushing rents nearly as aggressively as it had happened in 2022. So I think that’s all kind of built into our guidance assumption.
Aaron Hecht : Okay. And then on the guidance, the expense growth, obviously, higher than we’ve seen from some groups across the space. And understandably, you did some work on the insurance side, which is a big increase. And then I think 9.8% growth on the property tax side was the disclosure. How much of that property tax increase or how much variability do you see in there, given I would think you have assumptions that are baked in, was there any recoveries in ’22 that impact ’23? And then maybe you could talk on the insurance side about the decision to do a master agreement because that was a pretty big increase?
Jeffrey Gould : Yes. So Aaron, let me start a little more generally. As far as guidance go, look, it’s our first time giving guidance, we wanted to be conservative. We want to be careful in this market. We’ve addressed this and said to ourselves that we think these are appropriate figures to use, and we’re not surprised to hear you say that it’s higher than some of our peers. But this is where we were comfortable at giving guidance. As far as specifics, Ryan can answer some of the questions regarding specifically as to why we went to this insurance change, which I think was a significant and positive thing for the company. Ryan, you can answer that?
