Brad Hill: Yes. It’s hard to say. I mean there is just, as we looked at the market in the fourth quarter, honestly, in terms of the assets that we would be interested in buying and track, there was really only seven. So in the universe of us normally tracking 40 deals in a quarter to only have seven transact is a very, very small universe and we have seen cap rates move up. I would say, in the third quarter, they’re around 4.5 on the projects that we looked at. In the fourth quarter, they were 4.75. We €“ but there is a spread, obviously, and it really depends on where the assets are located. We saw one in the fourth quarter that traded, call it, for 5.25, but generally, when you’re getting into that cap rate range right now, we found that the quality of the asset or the location is not ideal and it’s not generally a location that we’re interested in.
So for assets we’re interested in, they’re still in the 4.75 range. To your earlier point, I think part of the driver there is that there’s just not a lot on the market. And I think as more volume to come to market, which we think will happen late second quarter and into the third quarter later this year, even as more properties come to market that those cap rates likely expand a bit. I mean the fact is interest rates are up substantially. Today, the debt rates are 5 to 5.5 and that’s got to push cap rates up at some point, negative leverage is not something that we can maintain in perpetuity. But until you have a significant volume of assets coming to market, there’s still going to be a number of aggressive buyers out there that are bidding hard at assets that are really setting a lower cap rate range.
And then I would also say that a majority of what’s selling right now continues to be loan assumptions. And so that kind of masks what true cap rates are out in the market, and we just need volume to really help us see that.
Haendel St. Juste: That’s really helpful, too, appreciate that. If I could squeeze in one more. I don’t think I heard it, but did you guys share or can you share what your turnover assumption is for a full year ’23? Thanks.
Tim Argo: Yes, Haendel, this is Tim. For now, we’re expecting it to be pretty similar. I think some of the reasons that drove turnover this year probably moderate a little bit and maybe some of the other reasons go up a little bit. But in general, we’re expecting similar turnover to what we saw in 2022. .
Haendel St. Juste: Got it. Thanks.
Operator: We’ll take our next question from Rich Anderson with SMBC. Please go ahead.
Richard Anderson: Thanks. Good morning. My first question is on the expected deceleration of rent growth, obviously, in 2023, no one is surprised by that. But I’m wondering if you can sort of get into some more of the nitty-gritty detail of where you’re landing, how much of it is proactive on your part? How much of is it reactive? Are you sensing fatigue from customers? Are you noticing occupancy moving around or turnover? I think you mentioned €“ Tim, I think you mentioned turnover uptick in the fourth quarter. Are there any things that you’re reacting to that’s causing you to pinpoint where you’re headed for same-store revenue growth in 2023? Or are you just sort of protecting the downside given some of the uncertainty in the macro environment and being more proactive in your approach?
