Ernie Freedman: Oh, there definitely is. There’s likelihood they’re having some success. We’ll just have to see whether it will be material or not. The Georgia process can take a little — both process can actually take a little bit of a while. As a reminder, we appealed more than we ever have in Georgia. Florida, we appealed similar to what we’ve done in past years and maybe a little bit more. Florida is a relatively fair regime when it comes to doing assessments. And so there’s not going to — we didn’t put in a material number of appeals but may have a material success rate in terms of what happens in Florida. So I think the bigger opportunity for us and certainly, where we’ve appealed more especially based on where we saw assessments came out are going to be in Georgia, which is our third largest state. So we’ll just have to wait and see in terms of how that plays out.
Operator: Thank you. We now have the next question from Michael Gorman of BTIG. Please go ahead, when you are ready, Michael.
Michael Gorman: Yes, thanks. Good morning. Ernie, could I just spend another minute on the bad debt side of the equation? I think you mentioned exposure to Southern California. Is that the only market that’s driving the 75 — 25 to 75 basis points or are there other geographies? And then how much of that is related to potential softening on the economic side versus regulatory pressures that’s making it harder to deal with those tenants who do get behind on their rent?
Ernie Freedman: Yes, good question. The majority — the vast majority of the increase is because of Southern California. We certainly have other markets and are performing where we want them to be and are higher where they’ve been historically. But we expect those markets to actually do about the same or improve from where they were in 2022, because we — in most of the other markets, we’re a little bit further along and be able to deal with things. So the majority of the concern is coming from Southern California, but it is sprinkled in some other places as well. And I’d say it’s almost all, if not entirely due to the regulatory environment and working with the local courts, working with — in some markets where pools to show the propensity to change.
We’re not seeing anything in today’s numbers, anything in the last 12 months, not projecting anything forward that would tell us we need to do something different or more from a bad debt perspective with regards to just the overall environment and where things are at.
Operator: Thank you. We now have Linda Tsai of Jefferies. Your line is now open.
Linda Tsai: Hi, what kind of unemployment expectations do you assume for the base case of €˜23 guidance? Is it flat with today? Or are you forecasting deterioration?
Ernie Freedman: Yes, we’re not — we’re — I’ll tell you, Linda, is we’re assuming it’s going to be an environment that’s kind of similar what we’ve seen for the last 12 months. So we’re not expecting a significant improvement. It would be hard improve where unemployment numbers are for where they are today that it’s so low. We’re also not forecasting at the midpoint of our guidance a degradation or a material degradation from where they are. And of course, then our guidance ranges do capture the fact that if we aren’t able to push rate as much as we want or we have some occupancy challenges because of the labor market, that would get captured somewhat in our numbers with regards to the lower end of our range. But as Charles talked about, early days, but we’re feeling pretty good with where occupancy is.
