So the impact of backfilling addiction-related vacancy has created more near-term impacts on rates and occupancies. However, overall, we’re still seeing very high retention and very strong renewal rates in our Atlanta Communities. And so we are working through the current addiction pipeline, which is going to set us up well for 2024.
James Feldman: And then I guess just last for me. I mean this was the first quarter post internalization and internalization expenses. I mean as you think about just running the business in the platform, is there anything left to get done, any other initiatives or this is absolutely kind of now sailing from here in terms of the organization.
Steven Freishtat: Jamie, this is Steve. And you’re right. From a transformation cost perspective, we had those hit in the third quarter, and we’re saying that we don’t expect anything as far as transformation costs going forward. Everything is internalized and we are focused on now running the business, running it well and efficiently, getting our policies and procedures in place. And Tiffany talked about the $4.25 million to $4.75 million of upside, really focused on achieving that over the next 24-plus months.
James Feldman: But are there any like other initiatives you guys are thinking about that might come up in ’24? Or do you feel like.
Tiffany Butcher: Yes, I would say absolutely. And I think it really revolves around all of the different initiatives that go into creating that $4.25 million to $4.75 million of operational upside and more specifically, the 5 kind of key areas that we see making up that FFO upside. First of all, smart home packages. We’ve — as I said in our prepared remarks, we’ve already installed smart home technology packages and 75% of our units expect to complete the remainder through this year. So that will have a positive impact starting in 2024. We’re also very focused on occupancy. We are changing our processes and procedures around premove-in inspections, marketing, et cetera, to help improve our occupancy and our days vacant. And then we have a lot of different fee income opportunities that we’re working on and looking at strategically that will bring new fee revenue into the portfolio.
We’re also working on cash management and other expense initiatives now that we have everything in house, we’ve been able to take advantage of the earlier collection of rents and then we are very focused on centralization related opportunities and opportunities to share staff across communities, which we can now take advantage of since the operations are in-house. So those are kind of the 5 key areas that make up that FFO upside. And as we’ve said before, about 20% of that will be recognized this year. And then the remainder will be recognized across ’24, ’25.
Operator: [Operator Instructions] Our next question is coming from Alan Peterson with Green Street. Please go ahead.
Alan Peterson: A question on the Atlanta market. I know that you touched on addictions there. Total portfolio occupancy of 91.6% at the end of the quarter. Is that the floor for occupancy due to bad debt issues? Are you guys still working through additional or incremental bad debt issues within the market?
Tiffany Butcher: I would say, overall, we are still working through the addiction pipeline. But on the back end, we are also putting in place effective new lease incentives to help drive occupancy of the portfolio and new marketing initiatives to make sure that we are backfilling those vacancies as quickly as possible. And then I think it’s very important to note that in addition to that, we have put in place new credit screening criteria that is also helping improve the credit quality of the residents that we’re backfilling in those vacancies.
Alan Peterson: So out of that 91.6%, how many more units or what percentage of the portfolio is still delinquent within Atlanta?
Tiffany Butcher: I think that overall, the bad debt within the Atlanta portfolio is going to continue to moderate and we are going to continue to see that bad debt improve month-over-month as we head into the remainder of this year and then into 2024.
