Operator: [Operator Instructions] Our next question will come from Jamie Feldman with Wells Fargo. You may now go ahead.
Jamie Feldman: All right. Great. Thank you. Maybe shifting gears a little bit to the balance sheet. Can you talk – I know you put some refinancings on the credit line during the quarter. Can you just talk about the impact that had on your guidance? And then just as you’re thinking about, I assume turning it out into some unsecured at some point, what could – what – how do you think about the variability to your numbers if you can’t get that done in a reasonable time or at a reasonable price? And then as you look ahead to your 2024 expirations, how do you factor that into potential unsecured needs?
Alex Jessett: Yes. Absolutely. So if you look at the debt that we prepaid, the rate on that debt was about 100 basis points north of our line of credit rates. So it was actually accretive to prepay that debt, and that is the $0.01. $0.01 of the $0.02 increase that we had in our guidance for our full year numbers is coming from lower than anticipated interest expense entirely associated with that early prepayment. I will tell you that in our full year numbers, we are not assuming any bond transactions. Today we could do a 10 year that would be probably at least 75 basis points inside of what we’re borrowing underneath our line of credit. And so if we do a bond transaction sometime this year, assuming that rates hold or improve, it’s going to be accretive to our numbers.
Ric Campo: Yes. The variable rate that we have today is embedded in our run rate and won’t change our numbers. In any kind of capital markets transaction the bond market would be accretive to our numbers this year and next year. The interesting thing when you think about floating rate debt today is that historically floating rate debt has been cheaper than long-term debt. Obviously, with the Fed doing what they’re doing and short-term debt is now actually more expensive than long-term debt. And we expect that to change in the future because over the long-term people [indiscernible] been always cheaper and you have the optionality without having to fixed rates, long-term and all that. But ultimately, with a 4.2x debt to EBITDA, we have one of the strongest balance sheets in the sector. We will take an opportunity to put some of that accretion into our earnings when the market is right for that.
Jamie Feldman: Okay, great. That’s very helpful. And then, you make a great point on the leverage. I mean, how are you thinking about capital if you were to find some really interesting opportunities on the acquisition side? Would you just increase leverage or JVs or just what are your latest thoughts?
Ric Campo: Well, we definitely have room in our leverage. We’ve always talked that our leverage is going to remain between 4x and 5x. And so we have dry powder to be able to increase the leverage if we choose to with the right opportunities. Today there really isn’t a lot of great opportunities just given the bid ask spread between the buyers and sellers. And given the horizon on construction costs perhaps coming down in 2025 and 2025, 2026 being a lean year for development, it might – it seems to us that that might be something we’d lean into before acquisitions. The comment on joint ventures, no, we will not do joint ventures. We have the most pristine and simple balance sheet in REIT land with zero joint ventures and zero complicated things on our balance sheet.
And we’re going to keep it that way. We would rather invest 100% of our shareholders’ dollars into fewer transactions rather than dilute our management’s focus on whose investment we are the stewards of and we just think it complicates our balance sheet and it complicates our world. And we just aren’t going to do that.
Jamie Feldman: Okay. That’s very helpful. If you don’t mind me just squeezing in one more, because one of your investors just emailed me this question. Can you talk about occupancy stabilization potential in Atlanta and Austin?
Ric Campo: What are you referring to?
Jamie Feldman: Just at what point do you think markets occupancy can stabilize there? It seems like those are two of the outliers versus the portfolio average.
Keith Oden: Yes. So both of those markets are in the mid-94s, which is down from where they were last year. For a long period of time, we considered sort of 95% to be the number in terms of where we wanted to operate our portfolio that’s gotten – that’s come up over time for a whole lot of reasons, primarily around the ability to turn units more quickly and some efficiencies and just getting the real estate prepared to release. So you got two separate issues. You have in Austin, you do have a ton of units that are coming to market. So market wide, my guess is that you’re still going to see pressure broadly in Austin as they kind of work our way through close to 40,000 apartments in 2023 and 2024, they’re being delivered.
I mean, the point I would make and I made earlier is only about 20% of that supply we think is relevant to Camden’s world, but obviously the other 80% is relevant to somebody else’s world. And so my guess is we’re going to stay under pressure. The entire market will stay under pressure. But I don’t – I think Camden’s going to be okay in terms of being able to handle the supply that’s coming. So Atlanta is a little bit different case. They have much fewer units that are coming. They do have supply that’s coming in 2023 and 2024, obviously. But there’s – Atlanta’s been a little bit of a microcosm of fraud and just bad acts that have nothing to do with COVID, most of this came about post-COVID, but it was actually pretty widespread.
