Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Analyst for Michael Bilerman - Citigroup.
Analyst for Michael Bilerman - Citigroup
Can you talk a little bit about your revenue management systems and are you seeing dramatic decreases in rent levels as a form of concession relative to most of your markets?
Jerry Davis
We use yield star and we are seeing reductions in rent levels especially on new leases. What we’re really seeing as getting probably 2% to 3% increases on renewals but pretty much probably going backwards 1% on a new lease coming in the door. That varies a little market-to-market. It’s a little stronger in the Pacific Northwest as well as Northern California. In Florida we’re typically having to give away a little bit more than that. We’re pretty fortunate typically in Florida if we renew at flat.
Analyst for Michael Bilerman - Citigroup
What’s your tolerance level before you feel comfortable giving up occupancy? I guess the question is, how negative could you see that going before you’d give up occupancy as that ratio balances?
Jerry Davis
I hadn’t really thought of that. We’ve been able to really manage the portfolio pretty consistently throughout the year on the 94.5% to 95.5% range. Year-to-date we’re at 94.8%. There are a few markets it’s tough for us to get 95% especially in some of the Florida markets but fort the most part we feel like an occupied unit today is better than getting the rent growth.
Thomas W. Toomey
A couple things I might add. In this cycle and all other recessions that we’ve approached in the past, we’ve seen a lot of development occur. In fact the trigger has been an oversupply. There’s very little development going on. What is, is not probably going to be finished that quickly so we don’t have that big threat of oversupply at us so we think with the technology advances on being able to drive more traffic and literally buy traffic if you will, we’ll be able to sustain our occupancy levels at pretty good levels through this recession.
Pricing, what Jerry pointed out, is as customers are becoming very sensitive to it and we have to fight it floor plan by floor plan, market by market.
Analyst for Michael Bilerman - Citigroup
With regard to your development pipeline, can you talk a little bit about whether concessions in your lease-up properties are coming in at pro forma levels, if you’re seeing any margin compression given where rents are in those markets?
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