Juan Sanabria: And then I just wanted to switch gears to the investments or acquisitions. You sounded a bit more enthusiastic about opportunities in your press release — correct me if I’m wrong, I don’t want to put words in your mouth. But I guess, what’s the confidence you could invest capital? And what types of opportunities are you looking at? Is it more lease-up or stabilizing? Any sense of the geographic focus — you seem to be talking at more of your existing coastal markets versus at least the Southwest for some of your comments earlier in the call.
Tim Martin: Juan, I think from a where are we looking, it shouldn’t be any surprise. We’ve been awfully consistent in the markets in which we’re looking to grow and expand primary focus in many, many of top 40 MSA continues to be our focus in high quality, solid demographic markets. I’m not sure that our expectation of that was included in our release is optimistic or pessimistic. I think we think it’s achievable, but market conditions are awfully volatile out there as you know. And if 2022 is an indicator, as I believe it is, we expect to be pretty disciplined. We hope and expect that we’ll be able to find some opportunities here or there. But the guidance range or the external growth number that we put in the release is not a giant number.
It’s something that will be — the team is working hard. We’re looking for opportunities that fit our investment strategy, it yields that make sense to us relative to our cost of capital. And our hope, if it’s maybe more hope and expectation is that we’ll find a little bit more opportunity to have some external growth in ’23 than we did in ’22.
Juan Sanabria: And if I could just sneak extra one in here. Can you just comment on the street rates or net effective rates in the fourth quarter and what you’ve experienced year-to-date?
Chris Marr: Certainly. So net effective rents for new customers in the fourth quarter were down over the same period in ’21, about 10%. They were down in December about 10%. And for the month of February as of yesterday, we’ve been running down just a little bit below 9%.
Operator: The next question comes from the line of Smedes Rose with Citi.
Unidentified Analyst: This is Natty on for Smedes. Could you talk a little bit about the components of cost increases. How are you thinking about labor and benefits increases, property taxes, other line items?
Tim Martin: Yes. Thanks for the question. We continue to probably anticipate the most pressure on operating expenses in the insurance area. Property insurance renewal for us comes up in May. We certainly expect there to be pressure on property insurance, probably consistent with most of the real estate industry. We continue to express — easy for me to say, we continue to expect pressure on the utility line item as cost of utilities, electric gas continue to be higher than inflationary levels. . I think from a personnel cost standpoint, there’s certainly pressure on wage, but we continue to have a great focus on finding continued opportunities to drive efficiencies and margin improvement, primarily in that line item and are doing more with less from an efficiency standpoint as we staff stores.
And so that has helped us a lot from an expense control standpoint in 2022, and we expect many of these initiatives will continue to bear fruit as we get into 2023. Real estate taxes, of course, are an area that are — it’s an awful big line item, and it’s difficult to predict at times, but we think that is an area that will continue to be in that range that we’ve talked about for several years in that 4% to 7% range of pressure on real estate tax increases.
Operator: The next question comes from the line of Todd Thomas with KeyBanc Capital Markets.
