Keegan Carl: Got it. Super helpful. Thanks for the time guys.
Brandon Togashi: Thank you
Operator: Our next question is from Spenser Allaway with Green Street. Please proceed.
Spenser Allaway: Thank you. Sorry about that, you guys commented on the difficulty in underwriting future operations in the current environment. And with that in mind, can you just provide some color on the depth of the potential buyer pool and your confidence in ultimately being able to execute on dispositions and your potential JVs?
Dave Cramer: Yes, very good question and I’m glad you get in this Spenser. We had someone at our end, but we have a high level of confidence. One thing I would tell you is throughout our history and our relationships and all the things that we’ve done in the past and we have a lot of relationships in this industry and as we look at possible sale of assets, there are groups of buyers that we know that are well-capitalized, they can get the deals done that we’ve reached out to and we’re having discussions with. And so from that aspect of it, we know that these folks are in the market already. They have assets in the market, they would be strengthening their positions in the market where we believe in a market with one or two assets.
And so from that aspect, it’s a win for them and it’s a win for us. And so I would just tell you, as we talked about in our last call, we are seeing transactions trade and we’re seeing transaction chain in a lot of the markets that will probably be leaving and the size of the transactions are fitting what our sellers’ expectations are and so at this point in time, I would tell you, we got a good confidence level going into it.
Spenser Allaway: Right. Thank you, guys.
Dave Cramer: Thank you.
Operator: [Operator Instructions] Our next question is from Ron Kamdem with Morgan Stanley. Please proceed.
Ron Kamdem: Hi, just two quick ones. On same-store revenue I think you mentioned in your opening comments implies, I think negative 1.1 in 4Q. I think historically, we’ve talked about 4Q being a good sort of barometer for the next year. And just curious how we should think about that number this go round. And what may be different this time around or what should we be keeping in mind as we’re trying to think about where next year can shake out?
Brandon Togashi: Yes. Ronald, it’s Brandon. Yes, I mean the exit point for the calendar year is a good way to kind of start projecting the next calendar year. It’s – but it is tough, right? And you know the ingredients to the recipe, it’s – where street rates have moved. We’ve got the negative occupancy delta we’re working with. As Dave mentioned earlier, the extreme positive on our sector is the ability to be nimble with revenue management through the ECRI to existing customers. So we all know that, right, it’s a matter of how do those dynamics play out and are demand levels higher in 2024 than what we’ve seen here in 2023. Yes, we’ll get into that more obviously in February. I think for us, what we’re focused on is historically when the sector on the rare occasions that it has encountered negative revenue growth, it’s been relatively short lift.
Right. And so where exactly does it go in Q1 of ’24 or Q2 of ’24, or when exactly is the bottom, I mean those are fair questions. They’re just not questions that we’re spending a whole lot of time trying to answer you know day-to-day. Right now, we are taking a much longer view with a lot of the things that we’re executing on right now. And with the belief that you know the resilience of the sector is going to prove out, it’s going to demonstrate itself yet again. And you know the negative territory will be we think relatively short-lived.
Ron Kamdem: Got it. Makes sense. And then just a few expense line items. The trailing five quarters in the supplemental is super helpful. So just on – one on property taxes, running 2.1% year-to-date anyways. Maybe can you talk about what – is there sort of one-timer or that’s helping that or is that sort of a good run rate? And then on marketing expenses. You know I see that’s – it’s gone up year-over-year, just thoughts on how much more you can lean into that? Thanks.
Brandon Togashi: Yes on property tax, Ronald, it’s – the Q3 number did have some favorable adjustments. So downward adjustments to the expense in Q3 that related to kind of truing up the full year numbers as we got value assessments or tax bills in hand. I would say, how do you look at the year-to-date to nine-months 2023 number and annualize that? It’s probably a better approximation. And that would, that would give you a number that year-over-year is probably going to be in the 4% to 5% growth territory for property tax, as you can see in that trailing 5. The fourth quarter of ’22 has a tough comp because we had some favorable adjustments. There’s potential for maybe some of that this year, we’ll see with Texas in particular with state surplus and you know what the final levy rates are in some of those jurisdictions.
Marketing, you’re right, that’s definitely up. Some of that is just the comp. We weren’t spending the dollars last year. Our spend levels are back to maybe a little bit higher than call it the norms that we had in 2018 and 2019. As I mentioned before, we’ve made some call center investments so that that’s contributing to that. But the majority of that line item is your paid search spend and you know we’re using those dollars judiciously where we think there’s you know positive returns.
Ron Kamdem: Great, that’s it from me. Thank you.
Brandon Togashi: Thank you.
Operator: Our next question is from Eric Luebchow with Wells Fargo. Please proceed.
Eric Luebchow: Hi, I appreciate the question, guys. So I think in your prepared remarks, you talked a little bit about supply deliveries being down, I think 20% by 2025. So maybe could you talk about what you’re seeing in your markets in terms of new construction starts, you know interest rates probably having some impact on that and whether you’re seeing any difference in construction activity between, call it, you know your more primary versus secondary markets?
