Nick Joseph: Thanks. I guess just more specific to G&A, though, right? So you have different management industry for these portfolio.
Gary Shiffman: That is what I am referencing. It is our goal to be able to share the 2024 expectations for G&A and to have created leverage moving forward.
Nick Joseph: All right. Thanks. And then just on Ingenia, obviously, you sold the stock, but you have the JV that had been extended there. Can you talk about the timing and the potential monetization of that investment?
Gary Shiffman: Yeah. Sure. First of all, I’d say that we are very pleased with our relationship with the Ingenia folks and we set out to have this JV Sungenia in 2018 and while we sold our entire investment in the Ingenia stock, they are great partners in the Sungenia development and we don’t have to — we do no longer have someone on the overall Board. We are able to allow them to focus on the day-to-day management and operations of the development and the fact of the matter is that after all that time and the investment, the work that’s now completed and the backdrop of demand in Australia for retirement housing, the near-term returns are very attractive and we are very positive about the cash flow over the next 12 months.
Again, that’s something we will be able to lay out in 2024. So, we have invested five years for what is expected in 2024 and I think that that will be pretty clearly laid out as we provide guidance and then we can talk about thoughts going forward from there.
Nick Joseph: Thanks. We will get back in the queue.
Gary Shiffman: Yeah.
Operator: Our next question comes from the line of Keegan Carl with Wolfe Research. Please proceed with your question.
Keegan Carl: Yeah. Thanks for the time guys. Maybe first, just wondering if you could walk through your reconciliation of your FFO per share guidance, where we went from negative $0.10 a share to positive $0.02 a share in the other adjustments line item?
Fernando Castro-Caratini: Hi, Keegan. Yes. There — while there are various line items that contribute to that change, the primary drivers will be the re-measurement of marketable securities, which is Ingenia on a quarter-to-quarter basis, which accounted for about $0.06 and then any unrealized gain/loss on FX changes, again, in the quarter that accounts for 5 of them — $0.05.
Keegan Carl: Got it. And then, I guess, I am struggling to with the Marinas rate increase. I was a little disappointed in the number, but I also know that there’s not good data on Marinas. So I am just curious, do you have an idea of what your hypothetical loss to lease will look like on that portfolio, given where market rents would be today if some were to come in and put their boat there?
Gary Shiffman: Yeah. I think that after two years of ownership of the Marinas and the 7.3% rental increase last year and seeing the demand, as I said, what Sun’s always focused on is the ability to give sustain — sustainable returns year-after year-on a same community basis and the fact of the matter is that a lot of thought and dialogue went into that rental increase. So that in the coming years, we will be able to look for continued long-term growth in the same way, as we had in our MH and RV portfolios. We don’t have much marked lease pickup, just because there’s very, very little turnover, well, I will say, in our MH and annual RV portfolio as well as our Marinas. So on the MH side, not to drift, but to share with you 15-year average turnover nearly 98% occupancy, less than 0.5% of the homes move out a year and the fact that we don’t have many leases that are directly tied to CPI or any long-term leases.
So our market rents or our current rents seem to be pretty close by standard to market and we feel the same is true on the Marinas side and we have always shared that an empty site or in this case, in the Marinas and empty slip is the most costly slip that we have. So as we look for providing solid performance in 2024, we arrived at the 5.6% increase and it does really not provide for very much, if any market — mark-to-mark rental increase at all as does the rest of our portfolio.
Keegan Carl: Got it. Thanks for the time guys.
Gary Shiffman: You bet.
Operator: Our next question comes from the line of Josh Dennerlein with Bank of America. Please proceed with your question.
Josh Dennerlein: Yeah. Hey, guys. Just maybe a follow-up on that marine rate growth of 5.6%. What — I guess, how should we also think about maybe occupancy increases in that line of business, like maybe it would be helpful to just hear what rate growth you sent out for last year in the occupancy uplift?
Gary Shiffman: Yeah. I don’t have the occupancy uplift for 2023. Of course, 2024 will give that thought as part of the guided range, but…
Josh Dennerlein: Yeah. I guess I am just trying to figure out of that 5.6% is like kind of static or like if there’s potential kind of upside relative to kind of where that is, as I think about rental revenue on that side?
Fernando Castro-Caratini: Hey, Josh. The — through year-to-date on non-transient income on the Marinas side has just — has been just under 10% and our rental increase in the 7.5% range. So from a back of the envelope math, roughly 200 basis points of occupancy gain in that number.
Josh Dennerlein: Okay. Okay. Awesome. And then just the U.K. sale that, I guess, it was disclosed in February, but didn’t go through. What’s, sorry if I missed it, I had to jump on late on the call. What’s the back story there?
Gary Shiffman: Well, we acquired a really high quality premier manufactured housing community in the U.K. in late 2021 and as we move forward with the RoyaleLife Group and determined that we would provide them a note for them to pay us back with that loan. They were also working with a group that was interested in acquiring Sandy Bay and we shared with the market at that time. It was an offer we were willing to accept, as we are looking to really reduce our capital commitments in the U.K. And as completely separate from RoyaleLife and completely separate from Park Holidays. We agreed and entered into a contract with that group to sell Sandy Bay. And now that, that’s not moving forward, we will continue to operate it and hold it for sale and recognize the income. It’s about 730 existing sites with expansion potential of 450 and — that’s what I had shared earlier.
Josh Dennerlein: Okay. But I guess why didn’t the sale go through? Was it related to the buyer couldn’t find financing or something else?
