Operator: And the next question comes from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your question.
Caitlin Burrows: Hi, everyone. Maybe we could talk about property acquisitions a little. I know it’s not as large of an activity as developments, but guidance for this year increased while transaction volumes at an industry level are down significantly. You did the $3 billion acquisition mid-year. So what sorts of acquisitions are most interesting to you today? Could you talk a little bit about who you are buying from, maybe why they are selling and how you get comfortable on what the right price should be?
Hamid Moghadam: Sure. It’s a dynamic market and I think that’s the essence of your question. It’s really hard to get a handle on what the returns should be and how we look at acquisitions. But here’s a model for thinking about it. First of all, we are even pickier than we have been with respect to quality and fit with our portfolio. We are not — before you had to buy the good with the great in portfolios and we had to go through the massive exercise of disposing of the properties that we didn’t want, which we did actually quite successfully in a declining cap rate environment and we actually made money on it, but we don’t expect that to be the case going forward. So we are really being picky about what we buy. The portfolios that we are going to buy are almost virtually 100% whole portfolios.
Secondly, if you really think that, look at where treasuries are, 150 basis points have gone to, call it 4.5%, 300 basis points increased. Those kinds of properties, core properties, we are trading in the high 5%s, low 6% IRRs. Let’s stay away from cap rates because of a market-to-market complexity of talking about cap rates. But call it 6%. So just adjusting for the change in treasury yields, simplistically, you would have to see a 9% on leveraged IRR and that’s if supply and demand of capital were sort of in equilibrium. We get a sense that there’s going to be more opportunities coming our way and it is in a capital-constrained environment and we happen to be in the fortunate position of having a really good balance sheet and able to take advantage of those.
I don’t think there’s going to be distress in the terms of a post-savings and loan crisis or any of the downturns, but I think the opportunity set is going to exceed the available capital and I think we will be taking advantage of that. So I would say on leveraged IRRs that have a 9% handle on them, maybe as much as 9.5% depending on the circumstances. And we are seeing that supply loosen up and come to the market. So expect to see more transactions in the next six months. Dan, do you have anything to add?
Dan Letter: The only thing I would add is, our teams around the globe are literally turning over every stone daily. And this is land acquisitions, this is core acquisitions, it’s value-add acquisitions and the teams turn to opportunistic right now. So it’s really hard to peg exactly where we are going to land our acquisition volume for the year, which is why you saw us move it up a couple hundred million after this Phoenix transaction. But overall, I think our teams are going to continue to find opportunistic transactions consistent with what Hamid just said on the returns.
Operator: And the next question comes from John Kim with BMO Capital Markets. Please proceed with your question.
John Kim: Thank you. I just wanted to clarify, so you are expecting over the next few quarters a significant demand shortfall. And I am wondering if during that time period, are you planning to be more aggressive on rents and concessions to try to hold occupancy or are you going to hold rates just given supply is going to start to come down after that? And also if you could provide an update on the market rental forecast for 2023.
