Chris Marr: Yes. Our process there, I would call, is quite dynamic. So every day, we’ve got a customer in our portfolio who is having a rate increase proposed to them. So from a cadence perspective, predynamic, Don’t expect significant change, but we are testing a wide variety and continue to of both timing and amount throughout the portfolio by market. In terms of the kind of general magnitude of our expectations for those, it will continue to be above the historical average, but our expectation embedded in our guidance is that we would be passing along on a percentage basis lower than what we did last year, and I think that’s just reflective of the fact that we’re seeing that normalization as we described, of demand coming out of what was incredible, robust ’21 and first half of ’22.
Keegan Carl: Got it. Maybe shifting to your third-party management platform. Just kind of curious where you’re seeing demand at for it today and kind of what the expectations are going forward. I know one of your peers mentioned that year-to-date, their demand is better than expected. Just curious if you guys are seeing the same.
Tim Martin: Yes. We have a nice pipeline of potential opportunities to add new stores to add new management contracts. We’re certainly continuing to see a shift that as a percentage of those, a little bit less in — by way of new developments as I think the development cycle gets a little further away from the peak. . But we have a high level of interest from a number of third-party owners who are looking for us to be able to come in and add our platform to help create value for their storage property. I think what we also expect to see in 2023, which is a little bit of a result of earlier commentary on the transaction market is, we do expect to see less churn in the portfolio as there are just fewer sales of properties going on. So perhaps stores that are on our management platform we’ll stay on our platform a little bit longer as the transaction market has cooled off a bit.
Operator: The next question comes from the line of Steve Sakwa with Evercore.
Steve Sakwa: Just circling back on the transaction market. Chris, can you maybe just talk about where the bid-ask spread is today? How has pricing changed? And I guess, how close do you think you are to finding sellers willing to accept what are presumably higher expected yields from public companies such as yourself?
Tim Martin: Steve, it’s Tim. Yes. I think there are just fewer overall transactions in the market right now and the — and of the deals that are out there, the hit rate on how many of those are closing and being able to bridge that gap between buyer and seller expectations. It’s a little bit cloudy. Certainly, a whole different world today than it was back certainly in 2021. And we tend to find ourselves from where we believe things that trade. Often, we’re off by 15% to 20% on many deals that trade. And it’s hard to know for sure whether that’s the exact right number. It’s also hard to know what’s driving that. Is that a difference in the way somebody’s underwriting expectations for that particular opportunity relative to the way we’re underwriting expectations?
Is it a difference in their cost of capital or return expectations relative to ours, really difficult for us to triangulate through all that. And then combine it with — from our perspective, the things that have been in the market, frankly, just haven’t been on average of as high quality as the opportunities that have presented themselves in a couple of years that preceded the last 12 to 18 months. So it’s a combination of a lot of things that led to us being fairly low on our investment opportunities in 2022, whereas I mentioned earlier, we’re hopeful that we start to see some things that fit our strategy and can find those opportunities at pricing that makes sense to us relative to our cost of capital.
