Michael Manelis: Yes. So again, for us, we’re very focused, right, on this proximity of the supply, when are the first units going to hit the market. And specific to the €˜23 deliveries, it’s pretty clear to us across our portfolio that we’re going to feel less overall direct pressure like from it. What we’ve been watching is in the fourth quarter, which is really a bad time to watch for concession change because you typically see concessions inch up but in many of the markets, you’re seeing that the new supply did absolutely grow their concessions compared to the third quarter and tend to be in that 6- to 8-week range. What’s promising for us right now is that we did see, just like in the stabilized portfolio, starting the year in January, starting to see these concessions kind of fall back a little bit in the volume of the concessions that are being issued as well as the value of them.
So for us right now, I’ll tell you that we’re still focused in San Francisco and Seattle is where we see the heaviest concentration of supply of concessions being used. And it’s about 25% of our applications in San Francisco are receiving about two weeks. And then in Seattle, we have about 40% of applications receiving one month. And if you put kind of all of that into the blender and you think about like 2023 and our expectations, right now in our portfolio, we kind of normalize concessions to the 2022 level, so we expect to continue to see some elevated concessions in the shoulder periods. And it’s hard to say what’s going to happen with the new supply across the market. It’s clearly something we’re going to be watching.
Bob Garechana: So Nick, just from a financial standpoint, like Michael mentioned, concessions are kind of flat, so no contribution to revenue growth or decline to revenue growth, €˜22 to €˜23.
Operator: We’ll take our next question from the line of John Pawlowski with Green Street. Please go ahead, sir.
John Pawlowski: Alec, a question for you on the transaction market. I know things are pretty frozen right now. But from the trends you’re seeing in terms of buyer and seller behavior, which one or two of your markets do you think is mispriced right now in the private market, either cheap or expensive?
Alec Brackenridge: Hey John, yes, it’s Alec. It’s hard to say that any one is mispriced right now because there’s so little transaction activity. The activity that we have seen is typically, say, 1031 buyer who has to place money or maybe a seller who for whatever reason has to move a property. But that’s been really hard to — and few and far between. It’s very hard to pick market and say any one of them is more opportunistic than the other. I would say though that looking forward, markets that have a lot of supply coming are — typically it’s coming from merchant builders who are not capitalized to own the property in the long run. And so, I expect to see some opportunities there, new product coming from merchant builders that really want to move it.
And other areas of opportunity are — I’m sure you’ve read about the private REITs that have the redemption requests that they need to fulfill. Not all of that product is a great fit for us, but some of that might be an opportunity. And then, you have the guys who took on floating rate debt that have caps that are expiring. So, it’s been really slow, but I think that there’s going to be more opportunity in the next six to nine months and more capitulation probably coming from sellers than buyers given how the financing market has been pretty choppy.
