Marguerite Nader: Yes. Why don’t I take the membership and then Paul, you can address the first part. But just from an operational standpoint and a cash flow standpoint, we’re really in the exact same position with respect to the membership upgrades. So our view is it doesn’t impact valuation, and it doesn’t impact the operations of the company. So we’re in the same position. And we provide — I don’t know the page, I think it’s —
Paul Seavey: Page 15.
Marguerite Nader: Page 15 provides the detail on the membership upgrades just like we have in the past. And then, Paul, maybe?
Paul Seavey: And then on the recurring CapEx, yes, the $85 million is comparable to the $100 million total that we reported for 2023.
John Kim : Okay. On the membership upgrade sales, is there any risk that income stream once you get it, do you ever return that capital back to members for any reason?
Marguerite Nader: No, it is nonrefundable.
Operator: And our next question comes from the line of David Toti from Colliers Securities.
David Toti : I just had a quick question. It seems that the average price of the homes that were sold in the period were lower on average. And there’s a bit of inventory buildup from last year. Would you say that these are ongoing signs of pressure in that segment? Or are these aberrational in the quarter?
Patrick Waite : Yes, it’s Patrick. I wouldn’t say it’s ongoing signs of pressure. And maybe I’ll just touch on leads have been consistent and that the fundamentals of our core customer have been remarkably stable. The average age of a new home buyer for us is 60. FICO scores are consistently over 700. One thing I’ll point out, and this is a little bit of a change that occurred through COVID is that we’re getting more direct purchases from people who have relocated from out of state that’s running at about 30% of our new home sales, pre-COVID was around 20%. So it’s that — it sounds like a gargantuan shift. But nevertheless, it has been a shift in behavior. And overall, the core customer has been consistently stable and I feel like the demand has been very consistent.
David Toti : Great. And then I just have one follow-up question, which is in terms of home sales inventors, do you know the conversion ratio or the renters that you capture with home sales?
Patrick Waite : Yes, it’s between 20% and 25% of our home sales, are to current residents. Now that typically is a renter, but can also include existing homeowners who are either looking to scale up to a more highly amenitized house or maybe looking for a more manageable space and moving down to a smaller home.
Marguerite Nader: And that’s a very important lead flow for us, but I think the team has done a great job of capitalizing on over the last 4 or 5 years and focusing on the existing residents and customers that are in our properties on a shorter-term basis and getting them to convert. So we’ve been successful in doing that over the last few years.
Operator: And our next question is a follow-up from the line of Jamie Feldman from Wells Fargo.
Jamie Feldman : I was just looking for some more detail on the marina rent growth assumptions I know it sits within the marine and RV line. But can you talk more about how the growth for marina specifically compares to your full year outlook for the 2 combined? And just any color you can provide on maybe what you think changes next year versus this year?
Patrick Waite : Yes. I mean I’ll touch on what we’re seeing in the business and maybe Paul follows up on anything that a more relevant to guidance. But the performance of the marina portfolio for us has been very consistent. It’s overwhelmingly annual for our slip revenue. It’s almost 100% on — and those are long-term customers that are typically with us in very similar trends to what we see on annual RV. Our boat launches for the full year have been consistent. So that’s evidencing consistent demand from our core customers that they continue to get out on the water with their family and friends. And our rate growth has been reflective of the market and consistent. We don’t really see any headwinds that would be a challenge to that business or at least don’t currently see any.
Jamie Feldman : Okay. And then was there — Paul, were you able to comment on the guidance piece?
Paul Seavey: It’s essentially right in line with our expectations for the annual RV. There’s not much differential between the rate increase in the RV or the marine space from what we see.
Jamie Feldman : Okay. And then I appreciate your color on the transaction market. Can you talk about — I mean you bought 1 RV. I know it’s a small deal, but can you talk about yields on that and maybe there’s more opportunities in RV? And then also pricing on marinas, where would you say cap rates are generally? And do you think there’s more opportunity in those 2 property types versus MH in ’24?
Marguerite Nader: Yes. I mean on the RV that we bought in the year is roughly a 5 cap. It’s a small property, I would say that as you look to the marina space, there’s a wide disparity in cap rates based on the location. So it’s hard to pin one down. There also haven’t been a lot of transactions. So it’s difficult to find a data point that’s relevant. So I think you’d look to — in terms of where we’re interested in buying assets around assets we already own because those are the locations we want to be in, and I think you’ll see us continue to work on acquisitions in those areas. And I think, I guess, 2024 time will tell what the — how the cap rates come out and whether or not sellers are willing to sell at this point.
Jamie Feldman : Okay. If I could just sneak in one quick one. GSE financing rates, where would you peg them today on MH?
Paul Seavey: On a secured basis, they’re probably at the lower end of the range that I quoted for us as a borrower. So I quoted 5.5% to 6.25% for 10-year. Generally, a sponsor like ELS does command preferred pricing. So I’d peg it probably 5.5%, 5.75%.
Operator: And our next question is a follow-up from the line of Eric Wolfe from Citi.
Nick Joseph : Actually, Nick here with Eric. Marguerite, I’m just curious how you’re thinking about the Florida exposure and capital allocation there going forward? Obviously, you’ve had higher insurance in the real estate taxes, but are you thinking of those as more transitory headwinds? Or is it something more permanent that goes into underwriting and maybe changes some of your priorities there?
Marguerite Nader: Sure, Nick. Thanks. I think Florida is really high in demand. As you think about it, across the United States. Their people are just flooding to Florida. There’s about 22 million people that live there. Third most populous state and I think it was the fastest-growing state last year. And really a large portion of the population is our age demographic of 55-plus. And then it also offers a favorable tax climate and then, of course, the chance to get out of the Northern winters. So our view on Florida is very positive. It’s where people want to be and we’ll continue to invest there. And as you look at — and it’s actually the NOI chart that Citi compiles each year, it shows our average NOI as a company for the last 20 years and how we compare favorably to the REIT industry. And then when you consider in only Florida in that analysis, we’ve really shown that we’re doing better than our overall NOI just in Florida. So we’re long in Florida.
Nick Joseph : Yes, that makes sense. I guess it’s the go forward if insurance costs or real estate taxes keep outpacing elsewhere does that impact NOI growth in Florida going forward, recognizing the much demand you’re seeing there?
