Operator: And we’ll take our next question from the line of Sam Cho with Credit Suisse.
Unidentified Analyst: Hi guys. I’m on for Tayo today. Thank you for keeping the cal going. So, I know — I think it was one of my former colleagues that asked about, I guess, the supply pressure. But can you remind us how you guys go about judging the threat from new competition and how that kind of — and how that factors into portfolio exposure? Because just from our end, it’s really hard to see that. So kind of understanding your qualitative or quantitative metrics to frame out how you guys judge that threat factor would be interesting to hear from our standpoint.
Alec Brackenridge: Hey Sam, it’s Alec. And yes, we do spend a lot of time looking at supply, and as Michael mentioned earlier, focusing on the proximity of the supply to our properties. And we find that’s where we’ve really gotten the pressure on our ability to grow rents. And it depends where we are. In Manhattan, proximate supply is a lot tighter than, say, in California. So we adjust for that. And what we’ve seen going from — and again, this is our property and proximity — our portfolio and proximity to our properties is in 2022, there was supply that was proximate to us like 110,000 units, and it’s going down quite a bit from there. And the average in the past was around — I’m sorry, 86,000 units are going down quite a bit from there. So we’re seeing a lot less immediate supply, and the way we measure it has more to do with that proximity than that market level as a whole.
Michael Manelis: Yes. I think the one thing I’d add — this is Michael. I could just add one thing. In like markets like D.C., we have found that because there’s such good transit, like that mile radius doesn’t hold as well. So we would say that we’re going to cast a much wider net and assume that people will move between markets, between some markets just because of that transit. So, every market has like a rule of thumb that we use, and then we drill in and go deep with the investment officers doing their drive buys and given their input, and then the property management team is weighing in, and we ultimately get to this consensus view. And we’ve been doing this way for a long time, and it seems to really hold true. What we have found like in €˜21 and €˜22 that even with elevated supply right on top of us, if the inbound demand is so strong, it doesn’t matter. So, that’s why that absorption rate matters.
Unidentified Analyst: That’s really helpful color. And then, one more for me. You touched on overall concession still being pretty elevated. So, I know all recessions are not created equal. But from a historical context, how have concession strategies looked during spring leasing season during a recession? And whether we can draw any lessons from the past to imply what could happen if things go sour? Thank you.
Michael Manelis: Yes. So, this is Michael. That’s — I don’t know if I have that in front of me to look at what the concession dollars were back across the previous recession periods or by quarter to understand the seasonality of them. I guess, what I would look at is just — it’s very common to see concessions in the stabilized portfolios in the shoulder period that are used in a very strategic basis to really hold up base rent. And when you see it spread where — like we’ve seen in some of the urban cores of Seattle and San Francisco, where 60%, 70% of the properties that we compete against are offering some form of concession, that is a signal, right, of something in that market. Now, the good news, like I said, is we’re seeing it dial back.
