Steve Sakwa : Justin, I guess I was just hoping you could speak a little bit about the occupancy growth. You picked up, I think, 300 basis points in ’22. Your forecast is for 150 at the midpoint this year. So I’m trying to figure out, was the 300 maybe picking up low-hanging fruit in the early parts of the recovery and the 150 is a more normalized pace? Or do you think the 150 is a bit of a slowdown as you have maybe got a bit of a cautious view towards the economy? I’m just trying to reconcile that with the leads and the move-ins that you sort of talked about.
Justin Hutchens : Yes, that’s a great question. So let me start with describing the 300 basis points, and I want to relate it to seasonality. When we grew 300 basis points in 2022, we had two things helping that growth metric. One was that Q1 of ’22 performed better than typical seasonality. So very strong start in ’22. There really wasn’t much clinical activity at all. And so that was helping us. It was also comparing to a prior year, Q1 of ’21, that was pandemic impacted. So you have a stronger start in ’22 and you have a favorable comparison. Moving ahead into ’23, I mentioned in the prepared remarks that we’re experiencing normal seasonality. So we have a lower starting point in Q1, so effectively Q1 has lower occupancy than Q4.
It’s in line with normal seasonality. Typically, you see about 100 basis points change downward from Q4 to Q1. And then what we’ll see this year is an acceleration in growth. And as I said, we’re expecting more move-ins. We’re expecting more net move-ins. So in fact, the growth rate in ’23 will be stronger. The effective growth rate is stronger, but the average overall is at the midpoint of 150 basis points of growth.
Debra A. Cafaro : Because of timing in phasing.
Justin Hutchens : Right, exactly.
Operator: Your next question will come from the line of Jonathan Hughes with Raymond James.
Jonathan Hughes : I appreciate the full year guidance and the confidence in the seniors housing recovery that providing that outlook conveys. But I was hoping you could give us the SHOP NOI growth guidance breakdown between the U.S. and Canada. Canada seems to have been where some of the upside versus guidance came in the fourth quarter. But I know there are price restrictions and some providence is north of the border. I’d just that breakdown between the U.S. and Canada for this year would be helpful.
Justin Hutchens : It’s Justin. Well, everything is included in the full year guidance in ’23. And as Bob said, everyone is contributing. Canada is at a higher occupancy. It does tend to generate less growth overall, but it is contributing growth and we’d expect the U.S. to be on the higher end of the average of the guidance range, Canada a little bit on the lower side, but with everyone contributing to the growth.
Bob Probst : I would just — I’d emphasize 95% occupancy in Canada and we delivered 12% growth in the fourth quarter. That business is performing well. But obviously, the U.S. is the engine driving the overall midpoint.
Operator: Your next question will come from the line of Michael Griffin with Citi.
Michael Griffin : Justin, in your conversations with your operating partners, can you give us a sense what the better performing partners are doing right on the labor side of the equation? And then conversely, for those that might be underperforming, what the plan is to bring them sort of up to snuff? And ultimately, if they’re not performing, could you look to transition that maybe to some of your better partners? But any expansion there would be great.
