Fernando Castro-Caratini: Sure. I just got back from London a couple of weeks ago with the initial meetings with the syndicate. The tone of the conversations is certainly more constructive than it was a year ago at this time and we are working through the insurance program as we speak with our broker and the syndicate itself. As we mentioned at NAREIT, we have not implemented significant changes to our historical insurance program and so that is something that we will be looking to do to mitigate the large increase that we saw this year of 40% across our MH, RV and Marinas business, but mitigating that increase year-over-year heading into 2024. As a reminder, our power program renews at the end of the year and so we will look to share with the market at that time once we have bound our coverage.
Anthony Powell: Great. Thank you.
Operator: Our next question comes from the line of Anthony Hau with Truist Securities. Please proceed with your question.
Anthony Hau: Hey, guys. Thanks for taking my question. Gary, you mentioned that you guys are focused on only pursuing the highest growth capital projects. Can you provide a little bit more color on what type of projects they are and what type of returns should you expect from these opportunities and what projects are you guys coming back?
Gary Shiffman: Yeah. I think it’s very, very limited scope. There will be certain expansions where there’s high demand in some of our MH communities and actually a backlog of potential sales. So some small expansion opportunity. And then, in Marinas, where we identify a great opportunity that provide 10% to 13% rapid returns on investments, reconfiguration of slips and other small expansions that we can do. Those are the type of areas that we will be focusing on.
Anthony Hau: Got you. I also noticed that the roof out rate year-to-date is like 3.7%, which is at least 100 bps higher than the last couple of years. What are the top reasons for the move out and where are the residents moving to home to? Is there a good difference in move-out rate for age qualifier or age?
Fernando Castro-Caratini: Anthony, that move-out rate is a combination of manufactured housing and RV. So the — what I can share is that as it relates to our manufactured housing portfolio move-out, rates are largely the same as they have been historically. We have seen some higher move-outs on the RV side. But as I shared a bit earlier, right, our 1,800 site conversions are a net number. So we are continuing to fill sites, fill vacancy as it relates to on the RV side and are implementing various strategies to look to lengthen that stay at our properties.
Anthony Hau: So the RV move out, they are not the park models that’s moving out, right? It’s mainly the wheel vehicles, right?
Fernando Castro-Caratini: That would be correct.
Anthony Hau: Okay. And like my last question is like for the assets that you guys are marketing next week, are these considered like 4 to 5 star parts and do they qualify for agency loans?
Gary Shiffman: I think they are a select small group, as I said, both small and large assets that would be high quality assets and my expectation is they would qualify for agency loans.
Fernando Castro-Caratini: Yes. Anthony, the comment would be that both Fannie and Freddie finance, manufactured housing across the quality spectrum. They also finance RV resorts that are beer mostly towards the annual side.
Operator: And our next question comes from the line of Steve Sakwa with Evercore ISI. Please proceed with your question.
Steve Sakwa: Yeah. Thanks. I just wanted to clarify maybe an answer that Fernando had given, I think, to John Pawlowski, early on about the collateral on the U.K. loan. Fernando, did you say that it was a — today it was at 80% loan to value or that the assets only were worth 80% of the loan amount? I just want to make sure I understood that correctly and I had a quick follow-up on that.
Fernando Castro-Caratini: Sure. Steve. 80% loan-to-value.
Steve Sakwa: Okay. And maybe back when the loan was originated, what was the loan-to-value when you guys work with the accounting firm to figure out what that collateral was worth?
Fernando Castro-Caratini: About 60% Steve.
Steve Sakwa: Great. Thanks very much.
Operator: And our next question comes from the line of Eric Wolfe with Citi. Please proceed with your question.
Eric Wolfe: Thanks. I guess is it possible just to provide interest expense guidance for this year, and then I guess, going forward, I mean, it would be great to get that. And then the second part of it is, is just if there’s anything considered in guidance like asset sales or something else that would reduce that interest expense later this year just so where is it?
Fernando Castro-Caratini: Sure. Eric, no perspective, acquisitions, dispositions or capital markets activities are factored into our guidance. For the full year we are expecting interest expense to be somewhere between $328 million and $330 million.
Eric Wolfe: That’s helpful. And then just a follow-up on Steve’s question there. Going from 60% to 80%, that’s mainly because the second piece, the seller financing was done at like 100% LTV. So originally, it was at 60% and then you added to the balance, I think, about $108 million, 109 million and presumably that was closer to like 100%. Is that the right way to think about it?
