The reality is that we just haven’t reached a mature stage as a pure play multifamily company where you could say, right, that is a mature cost structure. Capital allocation side of it has been addressed. So the revenue side of it is predominantly going to be driven by rents and rates. There are still things even that on the capital allocation side, if you just only think about the land, which is just over $200 million and Harborside 5 and several hundred million dollars, as I mentioned in joint ventures, that isn’t all necessarily generating an appropriate return for us, but even between Harborside 5 and the land, that’s $300 million that really isn’t generating a return. And for a company of our size, that’s meaningful having that much idle capital.
And so I think the primary driver is going to be capital allocation, but other things we can do as well on the expense side before it reaches a mature state as a business. And until then, it’s difficult to give that kind of guidance.
Thomas Catherwood: Understood. I appreciate that. And then last one for me, you’ve obviously been at the forefront when it comes to ESG and integrating that into the company and platform. What’s next on the sustainability front? You obviously have a modern portfolio, but do you have any near term CapEx plans when it comes to either reducing energy consumption or carbon emissions or anything else along that front?
Mahbod Nia: Yes, everything I would say to date, the approach remains the same and it’s a never evolving initiative. And so everything we’ve done and everything we continue to do, we evaluate based on a number of different factors, but ultimately it comes down to return on invested capital. And so either there’s a direct return on invested capital, whereby we know by, for example, seeking an alternative to traditional heating systems, it may be that we have energy savings that result in a payoff of five years or whatever it may be, and we’ll evaluate whether it makes sense to look at alternatives based on that return on invested capital and payoff periods, or to a lesser degree, it would have an intangible, but real benefit to the business when it comes to brand or retention rates and really differentiates us from the peers.
So the approach is actually largely similar to any other CapEx that we spent. Every dollar of CapEx that we spend, the team presents based on a return on invested capital approach and we evaluate whether that’s a sufficient return on that capital or not and we make decisions accordingly.
Thomas Catherwood: Understood. Appreciate the answers, Mahbod. Thanks everyone.
Mahbod Nia: Thanks, Tom.
Operator: Thank you. Next question comes from the line of Robin Liu [Ph] with Green Street. Please go ahead.
Unidentified Analyst: Hi, good morning. Just want to get back on the question on rent control. Are you sensing local municipalities are cranking down on landlords and their adherence to rent control rules? Are you hearing the policy makers are maybe perhaps looking at tightening rules further?
Mahbod Nia: Good morning, Robin. Difficult for me to comment on that. The only thing I can state is what I mentioned earlier, which is that we believe we’ve taken the necessary steps, necessary and appropriate steps to preserve the available exemptions from rent control ordinances across our portfolio. And so it’s a very, that’s a very property specific and jurisdiction specific thing, townships within New Jersey. So I can only comment on what we’ve done across our portfolio. I don’t really know. It’s hard for me to comment on where that goes more broadly.
