Tiffany Butcher: Yes, so we are sending out renewals above 6% and there’s really not a major difference at this point in March and April between Atlanta and the D.C. market. Obviously there were some negotiation off of those renewal rates, generally kind of 50 to 100 bps. So that’s kind of in general where we are seeing renewal shape up right now. But if you look across the year, we’re expecting our renewal growth rate to be in the low to mid-single digits and we’re expecting a low single digit decline in new lease spreads across the year, which is what gets you to that kind of 1% to 2% blended effective average.
Jamie Feldman: Okay. So it sounds like you guys don’t want to give exact numbers, which is fine. And then I guess kind of bigger, Atlanta seems like you’re having some issues on the real estate taxes, clearly market conditions are a little weaker than D.C. which has held up very nicely this cycle. I mean, I know we probably ask you this every quarter, but any thoughts on additional markets even in the Sunbelt where I know it just seems like there’s a lot of capital looking at Atlanta. I guess what are your latest thoughts on why you wouldn’t go to other markets or even double down in D.C., which has been very stable?
Paul McDermott: Let’s talk about just what it takes for us to go to another market first and Grant, maybe you can just go through our criteria and then, Amy, I can come back and follow-up with that.
Grant Montgomery: Sure. So, Jamie, you know, any market that we go to really will have what we would think of as a core set of commonalities that we’ve talked with extensively before, sort of skilled labor development and migration, diverse economy, innovative industries, strong productivity for middle income residents, which is, I think is really key, that it’s targeted towards our target renter, as well as demand for affordable mid-market housing. So I think whatever market we go into, those will be the type of commonalities you’ll see that attracted us to those markets in the first place. With that, I’ll turn it back over to Paul.
Paul McDermott: Yes, Jamie, I think the first thing I’d say is, we’d like to see some more transaction volume as we talk about migrating to other markets. We really haven’t seen a lot of movement from the fourth quarter and yes just even talking about the fourth quarter, I mean, about 25% to 30% of the deals that we look at were pulled from the market and did not clear. And 2023, we definitely – volumes, just talking to the kind of the top three brokerage, I think all of them volumes were down year-over-year over 60%. It’s fascinating just in terms of the competing thoughts right now. If you go back a couple of cycles, especially during an election year, a lot of the transactions are done in the first half of the year because of the election in November, people want to have their product clear the market prior to that.
But this year, an election year, we’re seeing a lot of brokers advise their clients to wait for interest rate decline, so that they will have more participation from the lending community and stronger metrics for the equity players. I think as we’re looking around right now and what we’re seeing out there in terms of kind of cap rates, core to core plus deals, we’re seeing in that 4.75 to 5 in a quarter range and value add is in the upper 5’s to low 6’s. And it’s really all about the pricing of risk from folks standpoint. But for us looking at the criteria that Grant gave, I mean I could see us moving into like a DFW corridor and some other markets that not only allow us to create value and scale, but really allow us to maintain our balance sheet strength while providing geographic diversification.
We’ve talked about the Carolinas, we have not specifically talked about the Florida markets, but I think right now there are markets that offer that, but as Steve alluded to earlier, we need to see some material changes in the capital markets for us to move forward and execute.
Jamie Feldman: That’s really helpful. Thank you for that. And then just one last quick one. Where do you think you could issue debt today, just as you’re thinking about those returns and we’re trying to think about your cost of capital and even paying down the line, using the line less, given the rate on that, just how do you think about your different options for raising debt?
Steven Freishtat: Yes, Jamie, this is Steve and when the tenure was below four, debt prices were certainly coming in line with where it became very interesting to try to do something. I think they popped up about 50 basis points, so it’s making that tougher right now. I’d say for debt with that increase, it’s probably little bit north of where a line is right now. From a perspective over a line, yes, we’ve got an amount on our revolver that, like I said before, we’ll look to term in out when it makes sense. But the thing that we think that the Fed is likely done with increases and hopefully cuts are coming to us in the back half of the year. As I talked about before with really no debt maturities coming up and plenty of availability over line, we’re comfortable keeping it there for the time being, but we’ll stay – continue to monitor the debt markets and certainly look to act when we think it makes most sense.
Jamie Feldman: Okay. Do you guys have an interest rate forecast in your guidance?
Paul McDermott: Really, I’m sorry, excuse me?
Jamie Feldman: Do you have an interest rate forecast in your guidance?
Paul McDermott: Oh, yes, as far as we’re assuming three cuts in the back half of the year.
Jamie Feldman: Okay. All right, thank you.
Paul McDermott: Yes.
Operator: Thank you. Our next question is coming from John Pawlowski with Green Street. Your line is live.
