Dallas Tanner: This is Dallas. I mean, look, we’ve shown a willingness. We, in the last couple of years, have raised a couple of ventures both with Rockpoint as a strategic partner. You’re exactly right that it does have a lot of value add to the REIT in both terms of, call it, our returns on our cost of capital off balance sheet and then also the fee generation and kind of additional service opportunities it creates as we build out a little bit more robust manager. And so I would expect the joint venture capital will always be something that we look at on a relative basis to where our current cost of capital is from a balance sheet perspective. Don’t get me wrong, we would love to invest as much capital on balance sheet as we can.
Obviously, at today’s prices and the way that the book has been discounted in the public markets, that cost of capital is not very attractive. And so I think using third-party avenues or having longer-term partners that we can continually deploy capital with is a very good thing for our business and for our shareholders. We generate outsized returns. It also allows us to be a little bit more particular niche across maybe a couple of different areas. And we think that, that will also give the company in its strategic thinking a lot more flexibility over time. So I would expect us to continue to explore and use venues like joint ventures over time but never at a way that it would impact our ability to grow our balance sheet and always trying to find that right balance.
Operator: Thank you. Your next question comes from Chandni Luthra of Goldman Sachs. Please go ahead.
Chandni Luthra: HI, good morning. Thank you for taking my question. I wanted to talk about property taxes a little bit. So your guidance assumes real estate taxes will increase 7%, and that’s an improvement from 2022. What’s the driver behind this expectation of improvement in the growth rate? Are there certain markets that make you think that basically tax growth will moderate? Anything going on more specific or more idiosyncratic anywhere? Would love your thoughts there.
Ernie Freedman: Yes, Chandni, it’s Ernie. Happy to talk about the real estate taxes. So as a reminder to everyone on the call, for us, when you think about real estate tax, you want to think about our three largest markets where we pay the most taxes, which are Florida, California and Georgia, and we talked about that in the last quarter. California, we can kind of take off the table because of Prop 13. So that’s always going to be a lower rate year-over-year. And there’ll be some noise around appeals and things like that even within California. For Florida, we’re not — I know we’re wrong last year, but we’re not anticipating another year of tax bills being up 20% or about 14% last year with assessments being up almost 30% last year.
Similar story with Georgia. We’re not expecting a second back-to-back year with it as high as it was before. In Florida, there is some relief for folks as to how much can get pushed through in one year. There are some caps on two-thirds of your tax bill. Said another way, because assessments were so high, we’ll probably bump up against those caps again in Florida for that two-thirds piece. But when you kind of do the math on Florida, California and Georgia, we think we’ll be in a better position than we were in 2022. And those three combined are about 70% of our tax bill. We do have some other areas that we do think we have some significant increases from prior year. But again, because they’re smaller tax bills for us, it’s not as impactful, Maciver County in Charlotte will be an example where we will see some pressure there, because revaluations happen not on an annual basis, but a multiyear basis.
