Patrick Waite: I think that what we saw overall in the north, again, if we’re going to qualify it by weather, is demand from the customers for stays in our properties, and I would point to the ability to put through increases in rates as support for that demand. So, our ability to increase transient nightly stays in our properties, even in a time when the weather is challenging and achieve those rates is the indicator that I would look to.
Anthony Powell: Okay, thanks. And maybe one more on the 13% increase in rent to new homeowners. How’s that compared to history? And is there any opportunity to push that even higher? And how do you think about that segment in the business overall? It seems like a pretty good supporter of growth in your MH business. So, I wanted to see kind of how that should trend over time.
Patrick Waite: Yeah, well, let me start by, I guess, setting the stage over the last couple of years. We’ve been through a period of particularly high demand for our properties and our locations, especially in the Sunbelt. That’s been evidenced from really record new home sales, which are moderating. But if you think about that level of demand, including higher CPI, just the base level rate increases for our customers have been higher, right? So, the comp set has been high over the last couple of years and market rate increases have been higher over the last couple of years. And if you think about our long-term customers with us typically 10 years or more, there’s kind of an embedded increase or net — lost to lease, right, a bump to market on turnover, which is what Paul summarized.
And that’s why the reason that number has escalated into, call that, 10%, 13% range is because we’ve come through those periods of high demand and high CPI. But the turnover of our resident base hasn’t changed in any meaningful way. So, over time I would expect that bump to market to tend to moderate and historically that bump to market has been called in the 5% to 6% range as opposed to the double digits that we’re seeing now.
Anthony Powell: Okay. So, how quickly should that bump to market moderate? Is that something that will moderate over the next year? Or just maybe a timeframe would be great.
Patrick Waite: I don’t know that I can do the math in my head that quickly, but a basic construct would be we have 10% turnover in our resident base on an annual basis. So, it would moderate over time.
Anthony Powell: Okay. All right. Thank you.
Patrick Waite: Sure.
Operator: Please stand by for our next question. Our next question comes from the line of Keegan Carl with Wolfe Research. Your line is open.
Keegan Carl: Yeah, thanks for the time, guys. I guess, first, your MH occupancy is down 30 basis points year-over-year in the core portfolio. What’s it going to take to get that number to start trending higher?
Patrick Waite: Well, let me start by just putting a little bit of context there that we still have roughly 150 units of headwinds from Hurricane Ian, and we’ll work through replenishing that housing stock, and those sub-markets in Florida, as I touched on in my opening comments, are seeing a very consistent period of high demand. So, taking that out of the equation or looking forward to a 2024, I would expect you’re going to start to see occupancy increases that are more reflective of the historical business. And you just saw that we increased a little over 40 units net in the quarter.
Marguerite Nader: And I think it’s just important to point out that over 50% of our properties are 98% occupied and have been for a number of years. These customers are making — or residents are making a long-term commitment to stay in the community. So, we’ve seen properties stay fully occupied for long periods of time, 10-plus years.
