Angela Kleiman: Sure thing. So loss to lease for the Essex portfolio in April is about 20 basis points. So nothing exciting there once again. But keep in mind, we have a L.A. Alameda overhang. So if you exclude L.A. Alameda loss to lease will be a little over 1%. And just to compare to last year, around April, loss lease was 80 basis points. So absent of L.A. Alameda, things are looking slightly better. We’re not talking about massive acceleration, but it is slightly better. So in terms of just the disbursement, Seattle has the best loss lease at about 80 basis points; Northern California, about 10 basis points; and Southern California about 10 basis points. So that gives you kind of the range where things stand.
Haendel St. Juste: I appreciate the color. And then last one, just on the — maybe talking about the health of the mezz book, I think you put two loans on watchlist last quarter. So maybe talk about your — the book or your perception of the credit risk there and maybe your overall interest in adding to the book today, especially with rates looking to stay higher for longer? Thanks.
Barb Pak: Hi, Haendel. It’s Barb. So on our last call, we had five that were either on non-accrual status or on our watchlist. And then we’ve obviously taken back one of those in the first quarter. So we’re down to four. And of those four assets, three of them have loans maturing in the next two to three quarters. So we’ll have an outcome there sooner rather than later, I believe. On the other asset, there’s one other asset that we’re having productive conversations with the sponsor to contribute additional equity, which will put us in a safer position in the capital stack. On that one, we will likely have more information on our next call on that one. So net-net, it’s trended a little bit more favorably in terms of the amount that it’s on our watchlist.
Nothing new was added. The book continues to perform. None of them — none of our sponsors are in default with the senior lender or with us. And so the sponsorship really does matter here and we have really good sponsors. So no new updates.
Haendel St. Juste: Okay. And then your thought process perhaps on adding? Or is that not being considered at the moment?
Barb Pak: Yes, that includes adding anything new. We go through a comprehensive review of the portfolio every quarter. And we scrub it. And so yes, that does include that process. So there was no new added to the watchlist this quarter.
Haendel St. Juste: Okay. Thank you.
Operator: Our next question comes from the line of John Kim with BMO Capital Markets. Please proceed with your question.
John Kim: Hey, Barb, just following up on that. So what is the earnings impact of consolidating Sunnyvale. I realize there’s no impact from the impairment, but you’ve already had that on nonaccrual. So I would imagine be accretive going forward?
Barb Pak: Yes. So in our 2024 initial forecast, we didn’t assume any accrual on the Sunnyvale asset. So it was a zero in our forecast. Now given that we consolidated it, we did pay off the debt. We think it’s about a $0.05 benefit this year. Keep in mind, it’s a small asset and then growing from there as we see better rent growth.
John Kim: Okay. And can you quantify how much of the first quarter blended spreads benefited from reduced concessions on a year-over-year basis? And just remind us how that trends for the remainder of the year?
Angela Kleiman: Sure thing. Hey, John, it’s Angela here. So first quarter concessions pickup impacted renewals by about 60 basis points. And then we’re — what we’re seeing in April — Barb, do you have them in front of you?
Barb Pak: Yes, it’s about the same.
Angela Kleiman: Okay. April is about the same is 60 basis points. And obviously, May, we don’t know yet, but we know that we have concessions burning off in June, July, August will be flat and a slight pickup in September and into the fourth quarter, but not much.
John Kim: So second and third quarter — end of second and third quarter last year is when you started to really reduce concession?
Angela Kleiman: Yes, yes, which is typical. And definitely second quarter and into a little bit into the third quarter, and then it picks up again in the fourth quarter.
John Kim: Thank you.
Operator: Our next question comes from the line of Adam Kramer with Morgan Stanley. Please proceed with your question.
Adam Kramer: Hey, thanks for the question. Good morning out there. I wanted to ask about maybe a little bit about some of the demographics of your renters and thinking about the different jobs kind of your job growth commentary earlier on in the call in the opening comments. I think you kind of mentioned that the tech industry and some of the higher-paying jobs having really recovered. I think people typically think of your portfolio as more Class B, right, a little bit more suburban, a little bit more Class B. Maybe just walk us through whether it’s your tech exposure, whether it’s the type of renters that are renting with you guys and maybe a little bit more just about the specific jobs that are within your tenant base? And how has job growth fared among those different industries?
Angela Kleiman: Yes. Sure thing, Adam. Our tech exposure hasn’t changed too much. it’s about somewhere around mid-5% of our total portfolio, of course, much higher in Seattle than Northern California and very little in Southern California. And so when you look at our portfolio as a whole, it’s actually quite diversified. And what that means is a job is coming through all the different industries. And so recently, the growth — in job growth has really been in government and health and education services. And so we see that the impact throughout our portfolio.
