Marshall Loeb: It’s usually about, I call it, 10 to 15, a slight quoting [ph] GAAP, and it’s usually about a 10 to 15 basis points for that.
Vince Tibone: Got it. No, thank you. That’s helpful. And then maybe one more for me. I mean, if you just discussed some trends in the market for development land. I know you guys bought few parcels in different markets in the quarter just how volatile that market, do you think values are down significantly? Or like the stuff you even bought in the third quarter? Do you think you got that at a much lower price than you would have 6, 12 months ago?
Marshall Loeb: Yeah, the short answer would be yes. And I think what – probably, and I can’t speak for the concept developer, the groups we worked with on those, they had tied it up a couple of years ago or more, and the markets and the prices had risen. But then it was they basically run through all of their contingencies successfully, thankfully, the zoning, planning, permitting all the things like that, and when it came time to close, the options were more limited. So that’s probably a trend we’re seeing is the ability to jump into projects that are pretty far a lot much further along than us acquiring a greenfield or site to start from scratch. And those land prices, they didn’t lose money on it. But we were really able to step in at about their bases.
Because their timing was they were under some time pressure to get the things closed and perform with their seller and buyer [ph]. So it was less than where it would have been at the peak, but they were able to get a successful outcome and move on or in one case in Denver, stay in partner with us on the project in a smaller way.
Vince Tibone: Got it. That’s really helpful color. Thank you.
Marshall Loeb: You’re welcome.
Operator: Our next question comes from Ronald Kamdem from Morgan Stanley. Please go ahead with your question.
Ronald Kamdem: Hey, just going back to the same-store NOI guidance. As we’re thinking about sort of 2024, maybe can you remind us, is the lease roll just as large as it was in 2023? And, obviously, occupancy could potentially be down, but just trying to figure out, what are some of the puts and takes as we’re rolling into 2024?
Brent Wood: This is Brent. The lease roll was very similar to be at around 11% at this point, it’s a pretty typical standpoint for us. Obviously, the occupancy we had if you recall, our original midpoint GAAP for this year was I forget the exact number now, but it was several 100 basis points lower than what we’ve achieved. And part of that is, we did anticipate having some occupancy headwind, we didn’t know we’d be sitting here in October and still be over 98% leased, we’re very appreciative and the team’s executed very well. So kind of get to the comment earlier that we feel good about the rental rate side of things, the ability to push rents, we’ve also been able to obtain a bit higher annual escalators in our leases, which add up over time that’s been more in the 4% area as opposed to maybe 2% or 3% in the past.
But the occupancy is the one bit of a wildcard in that factor that we didn’t incur that this year. So now we’re getting to a much higher almost an 8 midpoint on same-store. Next year, it just depends, if you want to factor in if we could be at that 97, 98 again, or do you give up a little bit of room or not, that’s just part of the fact that it’s hard to put your parts put your finger on at this point.
Ronald Kamdem: Right. And then my one follow-up is, just you guys are on the development side clearly focused on smaller shallow bay. So does that mean that datacenter development is completely off the table? Or is that something where on a one-off basis could pique your interest?
Marshall Loeb: I guess, it’s probably – never said always or never. So there are circumstances where we would do it. And we have, look, we’ve got a couple of datacenter, we’ve talked to datacenter brokers, it would be at the margin is not going to be a driver of our business, it won’t be a focus of our business. But if we had the right center, and either could sell the land or ground lease the land, get the right type transaction, then we would look at it or some things like that. But we’ve explored that just from the sense that like if there’s opportunities there, or we’re exploring it, we should take advantage of it, but it’ll be ancillary and minor to our – like we – I’d rather stick to what we do well and kind of do it over time and more markets are in the right submarkets then tell ourselves we understand datacenters, and Brent now we shoot [ph] ourselves or I would shoot myself in the foot a year or two down the road, but if we do one, it’ll be the starts aligned who rather than we really went out with a big net looking for data centers.
Ronald Kamdem: Great. Thanks. Congrats on a great quarter.
Marshall Loeb: Thanks, Ron.
Brent Wood: Thanks, Ron.
Operator: Our next question comes from Blaine heck from Wells Fargo. Please go ahead with your question.
Blaine Heck: Great. Thanks. Good morning. Can you talk about contractual rent increases or bumps and what you guys are incorporating in newly signed leases? And, I guess, whether you’re getting any pushback on that aspect of the lease agreement? And then also just remind us what the average escalator is across your portfolio at this point?
Brent Wood: Yeah, Blaine, good mooring. This is Brent. The mid-3 [ph], they’ve really done quite well there. Anytime you have the leverage as long as it’s been on the landlord side, that’s a win we’ve been able to make. And I would say, it’s probably been a little more pronounced maybe in Texas, where the annual rent bumps kind of lagged in the other markets, and that’s caught up some. But I would say that’s more in the 4% average on the portfolio, we’ve been able to move the average from opportunities over time to more toward that mid-3 on an average for the annual escalator. So as we turn through 18% to 20% roll a year, and we’ll continue to be in the strong landlord environment, that’s been some wins that we’ve made.
And, obviously, when you’re maintaining a high occupancy as we have, that’s important, because you need that, it’s great to have that stabilization. But you also don’t want it to be, it also needs to contribute, though, to help same-store growth. And so our team’s done a good job of executing that in the field and growing that and I’d say it’s a broader base now and across all of our markets versus it has been concentrated more so at one point, say California, Florida, and some of our other, call it, Texas or even some of our ancillary markets are catching up during this period.
Blaine Heck: Okay. Great. Thanks. And then, we’ve heard from some brokers that developers of large box properties have kind of reluctantly begun chopping them up into smaller spaces, as demand is smaller in that segment of the market. Have you guys seen any of that on the ground? And how do you feel about that potentially affecting the supply in your segment of the market?
