Operator: Our next question comes from the line of Joshua Dennerlein with Bank of America. Please go ahead.
Joshua Dennerlein: Hey everyone. Good morning. I’m just kind of thinking about the SHOP business as we go forward. How are you guys thinking about pricing power? I understand the dynamic that’s going on with the Sunrise timing, but just kind of thinking about just pricing power broadly.
Justin Hutchens: Hi, it’s Justin. So, the pricing power over the past few years has really been very, very good. We have at a relatively low occupancy, this broad-based demand is allowing for appropriate pricing really to ensure that we can cover all the costs associated with delivering care and services and to deliver growth for the business, and we remain very focused on that, both from an internal pricing standpoint and external. And if we can get it right. We tend to look for RevPOR export spread usually around 2% to 3%. And that’s where we’re focused. And the price volume optimization is working because we’re really getting growth in RevPOR, and we’re seeing the occupancy growth as well.
Operator: Our next question comes from the line of Rich Anderson with Wedbush. Please go ahead.
Rich Anderson: Thanks. Good morning. So, I want to talk about capital. Justin, you said top priorities are senior housing investing. We went through that. And then CapEx spending. Can you talk about the cadence of how that might transpire from 2023 to 2024 in terms of the types of dollars or thinking about spending and how much more could come in 2024? Just trying to get a sort of a range to quantify that a bit? And also if you comment on the SHOP guidance of 18% at the midpoint same-store NOI guidance, how much of that is juiced by the deployment of CapEx, so you get the revenue benefit and the occupancy benefit, but you don’t get the cost hit at least out of the gate. So, I’m just curious if you can comment on that. Thanks.
Justin Hutchens: Why don’t I start with the second part of the question and then Bob will jump in with the first part. So, we have a number of projects that are underway. We have 170 projects that should complete by the end of this year. We started on this endeavor in October of 2022. So, relatively quick execution on a number of improvements across our communities, mostly mid-market focused and also unit upgrades. We do have, obviously, the ability to measure the results. And what we do is we just simply take light communities and compare the results in those that have CapEx versus those that didn’t. And where we’re seeing outperformance in our communities that have benefited from the CapEx, the early results are showing a 20% plus ROI, but we’re also seeing growth across the broader portfolio.
So, we’re benefiting from the broad-based demand across the portfolio. We’re leaning into markets and assets where we want to improve our market position through investment, and it’s all really coming together and working for us.
Debra Cafaro: And it’s a multiyear return as well that builds on itself.
Bob Probst: In a multiyear investment, to answer that part of the question. And Page 20 of the investor deck, I think, is a good reference here, Rich, because we really started this investment in 2022 last — really about a year ago. And are looking at completing about 170 projects by the end of this year, and you see the increased redevelopment CapEx spend of $230 million this year as a consequence. We expect that to remain at a higher level next year as we finish out the suite of opportunities. And with the returns just in quoted, we want to continue to invest there. But that will be finite and then over time, come back down to normal. So that’s the flow.
Operator: Our next question comes from the line of Connor Siversky with Wells Fargo. Please go ahead.
