And on top of that, we have an expansion we built at Port Royal. So we have vacant lots in Port Royal that they could put homes in, that will result in us filling the community faster. It’s a good point to mention that we have 500 expansion lots that we’ve built, which is approximately $30 million in investments that’s currently not earning anything, and the faster we get a return on that investment, the better it is for us to grow FFO per share. So, the sale of that sales center is for that purpose. We don’t want to lose money on sales, Clayton will make more money there than we did, and it will fill our community faster.
John Massocca: Is that – are there other examples of that center within the portfolio today that you could do a similar transaction with? Or is that kind of a one-off?
Samuel Landy: That’s a one-off. We have other vacant land that can be used for different uses. This vacant land – it’s not vacant land, there was a sales center there, but this separate parcel of land with the sales center was conducive to being a Clayton sales center. We have other vacant land conducive to being single-family homes that we are in the process of trying to find a way to monetarize.
John Massocca: Okay. I guess maybe just based on that kind of last comment, I mean, are there any, yeah I know it’s very bespoke, any brackets around the value of some of those parcels of land that maybe either have a higher and better use than manufactured housing or just aren’t appropriate for manufactured housing for some reason?
Samuel Landy: So we’ve spoken about it on the prior calls. We have approximately 130 acres in Vineland, New Jersey, adjoining our Fairview Manor, which is very close to the Mike Trout, Tiger Woods Golf Course that’s being constructed today. So we suspect we’ll be able to enter into a joint venture with a homebuilder. We can’t predict exactly how many lots they will have approved, but my guess is somewhere around 150 lots. And we can’t predict what those homes will sell for. But my guess is that we’ll certainly be over $500,000 and could be $1 million. And we believe the proper deal for that, is that, us as the landowner would receive 20% of the growth price of the house. So no way to know what will happen. Will they ever get it approved? How many years will it take to get built? But we do own 130 acres right near a Tiger Woods, Mike Trout Golf Course, and we believe a homebuilder will want it.
John Massocca: Okay. And then maybe bigger picture, I think in a lot of other industries period, but also other types of REITs, you’re seeing this kind of narrative maybe around a bifurcation in terms of the economic impact on different income levels of consumers, of residents, et cetera. I mean, are you seeing any evidence of that on your residents, whether it be an uptick in move-outs or delinquencies, et cetera?
Samuel Landy: So you’re asking a very broad, very important question. So, first, manufactured homes in communities can service the blue-collar worker who earns $40,000 per year through our rental home, because 30% of income is $12,000, and we’re the only one who provides that house. And that house is our bread and butter, 10,000 unit rentals works phenomenally well. But on top of that, and maybe in a sense, the exact opposite, Cinnamon Woods is going to be manufactured homes that retail for $300,000 apiece. So these are people who can have other housing choices, right. They’re downsizing. They’re 55 and older. They could live pretty much anywhere they want, yet they choose the manufactured home in our community at $300,000.
And both these groups of people are doing very well right now. The blue-collar worker is doing extremely well. The baby boomers have money to retire and can sell their home, paying off their existing mortgage. So we see both extremes, the $40,000 wage earner and the people who are going to pay $300,000 per home as ready to continue our sales and rental occupancy.
John Massocca: And I guess, maybe look, on a trailing 12-month basis, any change to either the scale of move-outs or bad debt or anything like that?
Samuel Landy: No. Business is strong.
Brett Taft: Again, our historical rental home move-out rate is about 30% a year. Last year, it was actually below 30%, which we’re very happy about. I think our tenants like living in our properties. They try and pay the rent on time, and our collections in the first quarter were 98.7%, which is in line with where they generally are, and that number will grow over the coming weeks.
Anna Chew: On write-offs, I mean it’s always been 1% or less, and it continues to be that through the whole –pretty much the history of the company. Even through COVID, it was only about 1%.
John Massocca: Okay. That’s very helpful. And that’s it for me. Thank you very much.
Operator: And ladies and gentlemen, with that, we’ll be concluding today’s question-and-answer session. I’d like to turn the conference back over to Samuel Landy for closing remarks.
Samuel Landy: Thank you, operator. I would like to thank the participants on this call for their continued support and interest in our company. As always, Gene, Anna, Brett and I are available for any follow-up questions. We look forward to reporting back to you in August with our second quarter 2024 results. Thank you.
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