So when you add those two, it was a very, very high vacancy type of market during that time, so 2000, 2001 timeframe. The next time you had a pretty significant negative absorption with 2008, 2009, and we all know the reasons for that. And there, you also started with a significantly higher vacancy rate. I think it was 7% or 8% before the music stopped and all I can tell you is that, Prologis — the old Prologis with the funny LA loan had 52 million square feet of vacant spec space that they had to lease. I think AMD at the time have like 8 million square feet or 9 million square feet. So nothing like you are talking about here, particularly given the different scale of the company and how lease we are starting out. Now even in that situation where we are normally at about 95% occupancy, we went down to about 91% in both cases.
So I don’t see anything near that. I mean it’s mathematically impossible. Even if absorption goes to zero right now, we don’t lease any more of the under development spec space and absorption goes to zero, I mean, you will be under 5% vacancy, which used to be considered a great strong market. And the capital up, we didn’t have this kind of mark-to-market. I mean the mark-to-markets in those days were in the mid single-digit range and now we are talking about 70% almost. So a very different picture.
Operator: Thank you. Our next question comes from Todd Thomas with KeyBanc. Please state your question.
Todd Thomas: Yeah. Hi. Thanks. Good morning. I just had a question about market rents actually, so the 10% market rent forecast in the U.S. Can you just discuss that or break it out a little bit for us in terms of coastal versus non-coastal in terms of your expectations just in the context of supply growth that you are seeing and the demand backdrop in general?
Chris Caton: Yeah. Hey. It’s Chris Caton. So indeed we expect 10% in the U.S. that’s going to vary. Typical spread between coastal, non-coastal is 300 basis points to 500 basis points, at least that’s where it was running, say, pre-pandemic and we expect a wider spread in the current environment. So whether you look at vacancy, whether you look at the under construction pipeline, whether you look at the momentum in pricing in the back half of last year including fourth quarter that leads you to conclude on the coastal outperformance continuing at a greater than historical average in 2023.
Operator: Thank you. Our next question comes from Ronald Kamdem with Morgan Stanley. Please state your question.
Ronald Kamdem: Hey. I just want to go back to some of the comments on the third-party management. I think you talked about valuations being down 7% in the back half of last year and potentially continuing into this year and the redemptions potentially ending in the first two quarters of the year. I just want to get a sense, any more color how are you thinking about that, is it because the valuations have been repriced that you expect sort of the redemptions to stop? What should we be looking for to get more confidence in that? Thanks.
Hamid Moghadam: Yeah. There are two things that usually drive redemption requests. One is sort of the denominator effect and people needing and two is some folks want to arbitrage the lag between the — how quickly the public markets adjust and the backward looking appraisal process. In our experience in past downturns, the second has taken about three quarters to be fully reflected in appraisals. So we really don’t want to disadvantage one group of investors. By the way, the vast majority of our investors, 95% of them, because a couple of points of people want to arbitrage that difference, so we want to make sure the valuations are right before those things transact. We think Europe has actually adjusted quicker than the U.S. and that’s why we think there’s maybe another quarter to go before Europe fully adjust.
