Question-and-Answer Session
Operator
Thank you. (Operator instructions) We’ll take our first question from Donald Hooker with UBS.
Donald Hooker – UBS
Hey, good afternoon everyone. Question on the CapEx and this is going back over the past several quarters. You’ve given some guidance as to what your maintenance CapEx should be, it seems like that’s moved around if I’m looking at my notes correctly. What do you think of maintenance CapEx number is, when I said that I mean, what’s the absolute very minimum of CapEx you would need to run your properties?
Ray Brandstrom
Don, this is Ray Brandstrom. The only change to a CapEx guidance was, at our first quarter conference call, we’ve moved it up as we (inaudible) operations than they had expressed and desire to move forward on some clean up of some properties, so we’ve moved it up a little bit at that point. Other than that, it has remained pretty constant. The question that you’re asking though is, what’s the right number? I think there’s a lot of difference schools of thought out there. The number that we use for this year, we think is on the high-end looking at some deferred maintenance. The general number that we see when we have appraisals done or there’s underwriting for financing, at this point it’s about $500 a unit across the industry, that’s gone up over the past several years, $25 a quarter or maybe $25 every six months. So as the industry has aged, we have seen an estimate for the CapEx to increase. In today’s environment, however, when we look at acquisition or appraisals or financing underwriting, we’re seeing about $450 to $550.
Donald Hooker – UBS
Okay, got you. And then in terms of the leases I guess you took on from Sunrise from a while back, what is like a typical – is that included in your guidance or your guidance is more organic?
Granger Cobb
Our guidance is actually just organic. At this point, I guess, the properties that we’re bringing on with HCP that were managed by Sunrise –
Donald Hooker – UBS
Exactly.
Granger Cobb
We haven’t close on those yet, but we expect to close on those in the next few weeks before the end of the quarter.
Donald Hooker – UBS
Okay.
Granger Cobb
But then, those will be incorporated in small piece in fourth quarter and then going forward.
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