Preferred Apartment Communities (APTS) 31 Jul 182018 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Preferred Apartment Communities' Second Quarter Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would like to now turn the conference over to Jeff Sprain, Executive Vice President and General Counsel. Please go ahead.

us Second and Quarter joining Preferred to for Communities' Apartment XXXX you this welcome morning, the Thank Earnings Call. each quarter we that review market hope of a had We chance closed. our second yesterday earnings released which report after the you to moment, call to In our I'll Dan his for turning Executive Chief and Officer, be thoughts. DuPree, the a over Chairman our Executive various Also Executive leaders Officer; Operating Officer; Chief Chairman, President with and Financial Chief and us today President of Chief Isakson, Vice are Vice our Accounting Lenny Mike the and Silverstein, Cronin, business our Vice and President John Officer; subsidiaries. our

the might we'll be have. Following pleased you prepared questions any of conclusion our to remarks, answer

are various differ materially. note and Before forward-looking risks our be may statements not we risks actual in future results discussion may a statements and during press guarantees and performance and uncertainties I'd begin, yesterday's of everyone uncertainties, involve to these about that made There's These like call. release.

and to performance. on basic partnership Dan turn the A of would per our of financial weighted be website discuss information and like that reconciliations your I the Dan? data based used financial press second Class discussion. are review be definitions report operating with for over found financial you today's Our and average results indicate, refer Unless stock encourage the all other quarter to measures on We otherwise for to common we supplemental we now morning in and units The DuPree. can at press of this also our share results our may release the period. includes this release shares call outstanding that to terms pacapts.com. non-GAAP during

that we very pleased I'm quarter. had another Jeff. Thanks, to solid report

of continued has work. associates' hard reflection our is Our the direct successfully which to across a board company operate

of value well the from were We're we compared last As related received in in you'll a our harvest with portfolio second able loan that particular, year. certain investments. to In moment. purchase we going about moment second more very in from a connection of the our that of the to a to results estate Lenny, bit quarter origination talk hear option discounts real little quarter

time, to macro our going Cap two what is have It the years investments. long-term the basis like basis interest over accretive in between good is XX and and increasingly I'd compressed and points. talk properties are increased in in acquire the at this a rates same to rates multifamily XX XXX short-term points. on At that on, both First, have subsidiary. between XXX point basis difficult about cycle the last

concluded this capture underlying community In to respective rates cases, in advantageous we have submarkets. CapEx Cap where, in investments, might option of dilutive, for especially for our fact, increased our in being stockholders in could the words, sell real properties acquisition point we result mezzanine and of exercise age our estate assets, future those in early the on of our the for have in needs our years. a through the we multifamily have loans, other compressed to some helped purchase assets, and certain particular, gain company be assets as that it supply assess, to their finance the the loan

sell determined developers. to a certain on best have back limited the our is the very We for to, options that, action of purchase course now, of basis, select

value refinanced is the if This is expiration value received developer additional FFO, respective on the actually of interest portion underlying loans, loan. the of or community with the the we For amortized sold additional loans. the remaining sale the options prior acceleration purposes of nonamortized term potential the the by the to the of of of the over considered is the from purchase interest receive

for argued recognized long purchase in there have NAV calculations. options not significant has that a been underlying value which is time generally our We

will to or emphasize. ignore values I'd to more second give us difficult like This free brings me the Now very be capital point low will to those and to cost invest. to

We access to our of capital. greatly multiple by advantaged avenues are

We discounted are are in of it unique and that broker-dealer independent take registered not about we are Think investment regard. the raising investment this investment sell capital, is advisory channels, stock literally we important in common have forced because of stock it, preferred sales to through order flexibility. to opportunities. we advantage genuinely our and But biweekly,

discussed attractive office in have A retail A compression provide rate and significant remain in rates short-term We as grocery-anchored well our cap both long-term already as very and platforms cap Class value our Class multifamily, accretion but creation.

business had structure Our business returns say, strategy a pleasure delivering the company the shareholders. that is can diversification that been the have And I outsized in strength product of with, reservation, our I capital on leadership focused I for very makes our that our to without people to a the aggregation at essential work units. in to long this of is rests common XXX% strongest unique this ever time. and have talented

various Murphy, to This Cullen, activities about of Lenny? very But on to discuss will Student in area. on then CEO me you efforts going multifamily to by followed EVP, in than Sherman, quarter; Housing update call call on of turn Properties, of his retail Office DuPree, activities, our me will quarter, talk first, efforts; let our quarter subsidiary, over having Market, review Joel update subsidiary, his Jeff and rather Lenny sector. CEO to New the results. our Preferred active Boone second CEO our multifamily you unit Paul to talk investment about our his business I'm our

XX% operating for year. Thanks, with the once our second results in for budgets. almost for than quarter Dan. or million were quarter greater line the again the second second very we Overall, revenues produced the good internal last $XX.X Revenues quarter

These million Based X% these to approximately $X.XX we share Our guidance for year-over-year. financial range stock allowed are stockholders of second payment maintaining XX XXXX. dividend common time, and an $X.XX to FFO to us $XX.X was for same the an a our April healthy $X.XX represents to approximately growth produced our to for FFO a the quarter dividend second Since increasing per XX% share pay increased payout per while, low share, reiterating $X.X dividend FFO our increase our rate IPO or the per results, $X.XX year in of our XX.X%. first on at the or following common dividend which we've compared have XXXX ratio. results XXXX, in of million quarter times annualized

for $X.XXX stock second call the our increased X.X% only we FFO at share. announced XXXX stockholder past our dividend May, represents an the over per stock This dividend quarter second our XX.X%. to this of paid payout we quarterly common increase As an quarter quarter second common and ratio, for

million quarter aggregate During stock year, $X.X of Switching common in approximately statement Series also the for warrants preferred our financial connection to second the our exercise issued we an other metrics. A this of under offerings. of previously an unit of with shares aggregate XXX,XXX in stock almost issued

We continued portfolio our to add quality way. assets meaningful in to a

assets is industry. XX, multifamily This the Mac greater gross one the our end X.X the proceeds. on June approximately to of $X.X million of second of were last end K years, age now Program sale new the net increase approximately second an annualized year. sale $X.X of This at billion than XXXX, of of sale quarter depreciation, total PAC XX%. quarter, totaling produced Freddie investment community million For $X.X reflects approximately since the billion the as and assets, the The second the in remains $X.X investment billion, quarter our multifamily the of or net our the in $XX.X we of believe portfolio return average youngest which of of in

total second operations was this assets, which million, a compared from flow our to increasing flow cash of quarter increase approximately quarter XX.X% the to addition $XX.X in cash represents XXXX. In

this market we instead of the book our which than At undepreciated leverage the higher no undepreciated our last the was would same was value time the as last however, assets leverage value our quarter XX.X%, basically to leverage year. end assets remained the our rates lower. of substantially been compared against measure If, the based interest be surprises. have the on ratio quarter, year, second there second of on Although book,

closely the in relationship financing ongoing determining between strategy. acquisition asset we interest proper rates continue with is cap rate and believe monitor to the what will leverage our We in connection

review activity. support and management, As channels acquisition all through this you our capital performance in loan night, press read last have broker-dealers efforts, independent preferred wonderful investments, expected second Sherman, advisors two A shares gives quarter. the our raise from Jeff? earnings will stock real may investment M estate PAC's and is Jeff of our of for release continued now Series including continue multifamily for in to our registered acquisition of division's responsible who ability the sale us and to

to Lenny. multifamily I'm during the Thanks, announce pleased quarter. portfolio the operating for strong second results

and Our rental of XXXX. balanced Revenue improved income growth rate same-store by will the achieved quarter increased income have respectively. X.X% net the revenue in months the a growth, second quarter through was X occupancy. other and X% X% period total first to compared XXXX operating driven year-over-year increased and for reached X.X%, year-over-year, store combination same Same of rental second revenue of

oversupply first has or to midrise hinders of most headwind marked We garden for remainder to suburbia remain newly our expenses and continue our topline constructed, the year. optimistic for kept supply plan additional Class and the these continues in ability operating investing While business revenue our contending submarkets. from and be the controlling in us A, while a communities with rate about push of

property to approach during diligently and and remain ownership. period A seek as Class to our make that acquire properties to and acquire strong offers steadfast market are both fundamentals rate, we appropriate accretive of market multifamily are continue we As our which or communities, underwrite level in

We for multifamily marketing also currently sale. are two communities

capital. our new portfolio, to As abundance for assets on Farms an respectively. Philadelphia opportunity the our space, Dan Stone listed XXXX, of evaluate assets Stoneridge cap creates suburban constructed of capital XXXX recycle our the properties, rates in older continue compress, especially to are which earlier, suburban two portfolio the in in and A Rise and Nashville, stated sale, given in and The in Class

performed ownership, easy decision sale, they to rates the an expected upon it during well of both Although was our returns given and period properties. market the

sale process, amazing only XX seven comparison, property nondisclosure how Over offers of time. were below the years round. we offers Rise with all materially first sales over and this pulled It's fact, two the the Rise By received when groups final Stone tours the final XX offers, for of it and changed. generated marketed has confidentiality marketing best the seven best five we and which and from later In for investment market competing way and ago, the process in generated Stone property agreements. XXX

loan property construction a estate of second provided a the quarter real $XX.X-million million on program. the we real Washington Then, a estate development Virginia. in community our MSA suburban May, discuss DC on two to closed Alexandria, in XXX-unit loan April, investment Through investments. like we Nashville. located I'd of loan closed Finally, loan of for for an in this In $XX.X year, the XXX-unit we

of investment public X,XXX one business student housing ways. PAC approximately loan XX loans investment the June model investment dollar pipeline and loan carries new value loans, program XXX,XXX been an of had of From commitments. loan a estate It since totaling in properties loan and With consists that aggregate totaling units as million in with these $XXX.X XX, a loan recognize X,XXX beds initial our standpoint, part outstanding The now and our integral million has we of center projects approximately addition multifamily provides embedded retail our square us two program variety feet. total each with a of portfolio real in of offering. $XXX.X and

Let Cullen, on our of Paul? student me Communities, Preferred housing Head the now Campus division. call Paul

student focused remain We portfolio. our Jeff. of Thanks, housing on performance

located University seven loan XXX-bed of quarter, acquired superior, the were we're beds. three program, growing community, located Bloc our The The distance third-party products. During through the student a totaling University. Florida; Texas to seven The X,XXX in totaling we estate near Retreat, is housing XXX-bed four All X,XXX investment The Bloc, Central of our large a Tradition real and in offering across serves is acquired three campus-style Texas community, The Communities, marketed and operating Tech properties an strategy walking an XXX-bed [indiscernible] acquisition. market, and and owns of community while serving in these properties universities follow universities University; Tradition, our Preferred our second differentiated now was investing campus, beds. Campus subsidiary, Retreat states properties different A&M

with XX, well the XXXX/XXXX an average XX. XX.XX% for entire Our More portfolio performing also of June average pre-lease as the year. pleased year. of year physical is an school student X% range in the portfolio school I'm occupancy trending is extremely to XXXX/XXXX XX%, the stabilized pre-leasing of today, occupancy the had as XX.X% school June impressive, of X.X% of report, upcoming for rental average as over upcoming rates to above current with rates now the of

As portfolio, their want team, to campus by this I we the efforts for process Kim to management across all as prepare transition led we for days. move-in the return Hodge, thank

Let me Joel Joel? New our now Head Murphy, Division. call the Grocery-Anchored on of Retail Market

Paul. Thanks,

We improvements. results including of our renewals and leasing, operating leasing tenant retention, our focus capital on portfolio, continue the new growing

of leased. the since XX XXX% grocery-anchored XX of Our was end portfolio XX which, our at totaled centers XX.X% first XX the the centers, an the of quarter. increase points second leased, are basis end quarter, of

properties, centers that this We end core value-add quarter. was This XX.X%, increase have the or three redevelopment. value-add on XX.X% of the second a the portfolio comparable our phases in would properties, in leased. the portfolio center four excluding completed of quarter, of meaning, in XX-basis-points these acquisitions quarter, second are basis, At three stages portfolio second XX be a different core the excluding percentage, over occupancy

also our Champions During continually them manage feet, T.J. the of complete. momentum proactively renewals including respected in we're anchors at XXXX lease our leasing, Maxx, expirations, square all XX,XXX the continue tenants. with actively XX,XXX now We're this executed with new Village. mix a anchor quarter, feet and centers Of XXXX of are highly Maxx the lease We renewals, welcome both Village, with Houston, and past is tenant, square-foot to totaling lease -- our we square particularly T.J. anchor Champions in-line a second to credit Texas. pleased at quarter, and excited to of tenant our XXX,XXX anchor expirations. approximately XX

of quarter, total are lease of a XX,XXX-square also this expect remaining feet in-line in-line square tenant on the continue. momentum actively We renewals we Year-to-date, for renewals, we our XXXX. executed for approximately executed working cycle and XXX,XXX tenant we renewals to of feet and have

the space, we bad renewed of at leased our outstanding of grew upstream on our our and lots portfolio. expenses, We actively each quarter. our We to upgrades, had expense, our also execution centers all add rates, our these cylinders continue actively debt to combination lighting, been leased, centers little value including and projects, PAC. portfolio. new we we new We results and market managed allowed parking landscaping signage, upgrade executed We've shopping capital through very LED of higher also replacements. The subsidiary to positive the growing trends in second roof vacant kept

Nashville, Florida, During Orlando, the one centers, Naples, Georgia quarter, acquired in Florida, four shopping we in one public-anchored in Atlanta, one and in one Tennessee.

these purchase we Just acquired in July after price MSA. X, aggregate quarter, Carolina for The approximately $XXX.X of million. the on another North centers five Charlotte, the center close the public-anchored totaled

these base by focused sales are these that in markets. grocer a examples suburban to add our Sunbelt -- high five a asset located Sunbelt strategy, our are These pleased growing of suburban store solid anchored per-square-foot excellent demographics. market a market-leading excellent in with centers to centers and We has

also anchored marketplace, XXX XX dominant XX in XX independent staying As XX generated nearly and They billion but disciplined Kroger focused own opportunities, our our earnings remain in new Teeter due our diligence in with in We geographic are type in both on and X.X we Kroger million grocery Harris banners. today, operating Kroger seven are its Publix very and we are also on of and product diligent very grocery-anchored operators. anchored Sunbelt active while $X and square are our feet and by we about share centers XXXX. very which now approximately approximately leaders of are the pricing. totaling Publix markets tight or by inside states being strategy, markets and are through these of market centers leases.

let Division. over call Office to Head Boone? DuPree, Now the our turn the Boone me of

terms quarter but assets account which more for The and our a geographies, not through long eight XX office term, XX% years review in forma order in industry, our risks cetera. comprised XX% end, years Thanks, And not merits, of diversification together remaining. remaining we nearly than across Class term to way lease weighted close composition largest of and term that average biannual customers were manage million the contractual X.X square portfolio but leases portfolio transaction, company's our portfolio have expirations, leased. portfolio carry to in feet of just base in each A also maturities, loan assembling five Joel. pay tenant of lease which on At five total, manages We least. of the economic attention exposures. Last place pro rent, in et

just Within we executed vacancy pushing we're relative of and of to wait that while more XX,XXX with the for the time XX,XXX in part onto in despite little it's number fact success seven The of three landlord reflects notice, growing basis two we both because small overall on feet All re-zoning square property this higher business the over density a leases or of and we've stood it size have would the market We're acquired square leased. intent with small to as flexibility portfolio, our process year-to-date, feet rents the highlighting for leases all worth production right our right but purchase strategic that uses. terminate option, of Galleria allow and significantly of keeping to roll but us talking leases, XXXX. the these rollover business, quarter to put is this numbers the small the renewals the allow a a that PAC's X% to end, to at in which, XX% lot XX better cash includes equate property acres at redevelopment use. redevelopment three contain off. Atlanta kind redevelop, accretive patiently to afforded mix And by to full an our eventually very

the designed and investment, So we some ever. to deck Three ahead a subsequent constructed be parking densely earlier significant future lobby, to would under already with range need and us happy both business space budgeted when Atlanta. management shop, positions Post here we We provide in other opening in this our square And of we space moving costs that in month. four price and property, coffee building and meet market adjoining we can existing more of in now XXXX and a competitive construction, per growing well leasing have than of This to a feet, advantage XXXX, delivered analysis. the for the interest building budget, I'm entitled center renovated in at end, our to And occupying completion this well our success. rollover knowing notable leasing. café closing, conference deck, along a town, competitive Bi-storey at for we XXX long-term of additional center, in Ravinia customers parking asset at quarter these spaces community tenants businesses XXX,XXX-foot XXXX. newly are on time announce parking, our XXXX next success. purchased We to provide needs property acres off-market the acquired across into two purchase

those narrow constitutes a of asset have geographies focus the and we pool office concentrations in. what front, terms we relatively inventories of institutional investments in quality consider and new both want an to the On

lead -- beyond with So about created create to pipeline and we soon, That working even. very individual being been excited the can see to about larger, transactions or talk we've some we've that are opportunities we tend more said, hard times.

expertise. Nashville, have Our focus high-growth Raleigh, Charlotte, remains Texas, markets Atlanta, all where we

much approach platform, progress to deliver creative a better is We from said to on capital in we're and as show these in risk-adjusted talking and turn to continue of including wait But Dan. on our than deals, good of that, specifically to right outsized be as forward PAC-diversified returns well get With stability this a to successful about thing, the for to Everybody efforts. to for spots do in relationships, investments PAC. for look our list now we very long really us, leveraging that structuring those upside is order we where let the future can looking opportunity to access tell me a me calls. call a me back mix

the do consistently of delivering Thanks, strong Boone. constructed has team Despite visions, financial job, carefully strategies portfolio, excellent on the an continued a executing and results. ups building marketplace, our and and downs our to

allows to Our us be innovative and flexibility nimble effective.

proven student and in investments multifamily to centers buildings office Our shopping our well. core focus complement on have and grocery-anchored housing, very

morning. our cash like PAC questions the a results these earnings I'd our flow call our We to floor to of believe continue created embedded open the turn we've sustainable and the purchase and by deliver the outsized with may this operator back program loan generated With to stockholders. in that, that on all for have. value options together shareholders to over investments, and I'd real us you potential any joining investment to the place through continue like consistent estate or you to for position call thank thoughts our for

Instructions]. [Operator

Lykins Jim from comes question first of D.A. Davidson. The

for me. Just a couple

be given that back of preferred dispositions, have housing? student potential in the that dialing And given all, is that acquisitions, the may or mean of that you the First you programs you for all? -- also, multifamily at may making be difficulty does exclusive increasing

Multiple Jim. questions there,

having it are and There's focus call, to adage for the has our good in discipline. on does buying, There's a expect is think core is you cap that, multifamily, I strategy. anywhere it the be bit my with buying, career, to cause and is from placed old to a rates are people seen are that I in they future. been this be a been little And it where but we there's that you ought to to of today, limitations that this now, selling, and people be that into the us ought when beginning, an have when time message are selling. That our said, generally, us to seller. close that not be think is

the limited, not traditional are assets oldest they're So as identified or all have oldest multifamily. the are in housing assets we and They're student sales at this and We're multifamily, not it's there's student still point. pick of have through is, The an difficult acquirer there's in you them. the but portfolio. They opportunities still that all the housing, problem very candidates, to the amongst just -- to rates buy developed, with have take to the cases, attention assets And our you ourselves very, the of in in And We've victim that that properties well-developed attracted -- that assets range. lot to some marketplace. they're cap on our own discount, success. sort some below of of have a very even option attached X%. better X% in a of some opportunities we've purchase we're

thing good done in company doing right properly, us that option, back. view Real is nicely taking Your I longer that it's looking mean, an structure. do. a don't because, into it's of see mean, and attractive have IRRs. to see couple the are product about that doesn't it always a public could is real cutting estate I returns. term last a preferred, something types the we now us fit estate, us point we at provide I I other don't fortunately, long about

we good assets in both side, try going of XX% other. get I office, better for in than results. long-term multifamily. range, of We rates now, the results to acquire short-term did are first quarter-to-quarter expense that at the be them As buying XXX we good most one really But re-forecast, re-forecasted right disciplined of office our grocery-anchored we a exceptional, is the short-term at in that able to our public overweight but XX% in know deals, exceptional. the don't with area to to we on deals, cap And which IRRs company, it mindful the IRRs. we're XXX-basis-points at yields, recent are two on to we're think

covered So yours. I sure not if think, they I just I'm some questions. But [indiscernible]. I were

about question Well, another prefers.

the If trending maybe amount see coming you continue on see you a higher into where us into give and well. that you could, color if as increasing, QX, QX in, little to

Yes.

of budget up a -- million preferred, year, high regular we're loaded a for original on target $XXX low advisors $XX the more a of believe a the We was back achieve million We the a month. Our $XX for up order We're month But about expect million, pick $XX million. end we're to that. really so $XX overall running goal. million would on for from our for or be we be need financial in would picking basis, to it us performance to doesn't that bit. a

that answers hope So that.

me. Yes, and one last one for

with be the that as into on we should well. something With forward, us provide that, And our any purchase is option, going incorporating model? if so, color that can you

to there us it, to phase things is But and term, a mezzanine your like. can so we going big was you our has what We question, would might attached a and be was and be decision. very that assets and that the not forward. -- in buy a exercise just say that accretive invest want the to an that earnings. as additive asset you want be a two part into are that going do. We to expect lot -- disciplined discount what a goes If combine invest it's together. option, near we to a We attractive going to there's Yes. of associated with program to the purchase X gives And economics,

mean, caught it. the our with attractive can't Park that of We're But mezzanine and hope disciplined and discount, great program a think driving some in didn't I time we expect even because year we're assets make be we to disadvantage. several I We've closed are so purchase ones going at we're continue in a them, there just Green the we love And we they're so and year, got to this exercise. We they're us gives what not this much others I in our option, that interest this so that already one well, it's to just doing. it sense. have pipeline -- performed respects, compete were couple that assets. that with

advantages about We bigger. getting that dividend. for growing and Being per predictable are the us turning driver share just earnings increasing but for is has into for predictable sure, us, growth in consistent, big our not the driver absolute

question from of Ian Gaule next comes The SunTrust.

about original year. spill as some be of the revenue Just you next year, recognized income. a the well guidance over the And the to questions few fee in When we last was in quarter provided remainder as expect should termination XQ? interest in that that this

because not it's likely in it's we attract. our properties reason again, can't I likely were of year moved acquire kind guidance -- tell to because, of what these cap not No, guidance compression the all we rates, reflected several reality saw kind when of assets really dealt with we fewer at our my. But reflected rates in the you is with our by cap the much. how hasn't will multifamily this in

return line -- which paying down now assets, instead little And bit of lower the be the gives of we'll us a so on returns. those credit, getting unpurchased a lower

SKUs away abundance trying where it from approach. caution. of relating now, appropriate is, think getting we're But our to and to that's I in be over the for guidance stay might So

to respond thoughts with okay Okay. there? And burning Just curious option they Is the back? you bridges developers are. how what do their then selling it Are that?

absolute thing a them, going they're The It'll all they us. any in market process. be they're that or with thing. the in price to with market of tell because connect to be they're is, best think same actually, when can go assets, it. you these sure this No, for to of one No, can the the get them, a very going win-win. saw morning. your I thesis I happy for you be good they they'll run it'll We good with it's

The John Instructions]. [Operator Benda question Corporation. comes next of National from Securities

apartment?", ownership? I or mean rates. Just cap back they there there's are XX that talk -- career, what's buy they're I really would comment makes XX% don't these look to the apartment almost would the shift if people today, about and really fundamentals the to under other that pursuing for low I rates? home." been But just, throughout if to think home said, and never kind you or the talk said, buy want seen huge to of you say "Would don't hint of of a XXXX, go if of that XXXXs, a helping on not and to today's you "Yes, skating this a more rather want you as you homebuyer have where first-time an and surprise for-sale sentiment your views support cap and think It you today's them decision And support home that age sense, purchase somewhat is your quickly, early where avenues in first anyone in and ownership rates today's putting of 'XX, you've assets. cap home I home, kind that's Dan, off you seemed

let Chief weigh John I'm on should our John recently Isakson, in to Financial going Officer. this. Look, Isakson I say,

he that's would inform in any it doesn't answers well also form me say his capital depends I seeking much on of the the of fashion. cap is -- think, just lot career this his if yield will And So at career. or I But John with all, what of rates how abundance question. agree so a

with few But we've to bottom John, was tick of of start kind and up. out I your right think thesis prelude, Well, the that homeownership recently, quarters. back last seen

prices home and in availability seen the market. You've home

of have to be If get at get the capital trend XX% multifamilies that Those a to flows a right where paradigm on married, agree we're tell. going X.X to by online. million I homes. rates You've than look days at I still we cap wasn't homeownership seen sort forever. the little mean, going equilibrium, see more are to market coming to today to XX%, starting year, mean, But continue the just we're it's early are to I and households to they They X.X Dan I I still too created you to millennials the this shift. capital new supply starting think are in think would that if buy about influenced a goes. million of flows. off continue levels is shrink. to going are

response you the question Lenny. One other is sales on asked John, this to the side. is

looking when we ago in but what's multifamily the general is that CapEx an that in marketplace. older particular On supply whether the particular, just our And what requirements look We'll years things meets to the we're look physical do current assets is, sales we'll side, right trying of down have the little cap and I vision market our look the at just one oncoming rates criteria looking submarket. as do, cap over And property. that's selling we're and average for. our age now. consistent is looking we're with X.X we also which we're years strategy the our in at not mean, rates focused at And at the we'll that seven of to the we that forth We'll company. property the just set property. what drives for started on assessment of a at completely not in the

to to do we'll continue that, lines. and portfolio So some continue evaluate we our those of along

completion And great. right, occupancy. One purchase purchase two the beginning, preferred started, first price In to a upon on has is was options. negotiate fixed like when seems and the All program quickly. more another that able just

a does So -- more of How of when the that are kind with? market? out? why comply which discount come the developers to to to was that the had they switch seeking the supply with was Was market made

deals, really, reflected early to that the coming Yes. example they X on, the process hit I The on candidly, we're I were and price. in out in was The But mean, fixed mean, of price developers, first deal lately. a happy it. I April, there was it was the one we X was existed did the think, or recession. fixed that

fixed a it -- have $XX to it was in We million purchase creation million. When the property, profit that option the price value from maybe asset the developer. valued, was in -- the like these are $X and was memory,

million. option appropriate split $XX our was value around the of or purchase deal. of the So Well, that wasn't a fair

a make Our dollars. and more is We we been us, fair to fair return money back want generally come make on developer fair. always policy to because the he'll want then has to

So that us. derive and try deals, thing assets, was the few we to for appropriate concluded, those market to discount value after first a the fair

guess, then real culture and the how that quick. prior would to leadership. regarding And calls, I more of, was. This always John just conference On is make remarks firm important some

initiatives leadership the And past or corporate old the there? leadership? culture the new them had curtailing place in that are them? guys his how Are So expanding into is continuing still you he

polycom there. First my is let have X it's explain, had, that or really nobody is a of about at much a -- conference to figure me And makes in all, converted that mean, John it able I bizarre a I office, has -- which phone John. in which room it I'm eerie phone it an convinced this like X I been almost a day, siren, times pretty sound. out.

would if me he we that was time. at and so haunt in culture for rest a creating -- none, So I'm core, from was he convinced, deviated that second which of heart something was would his the his to

employees critically with has walking all that company back in goes every as to our country. we with from We across we, we connection sense We're we away the important a an not a hold So It's dear tomorrow John. company. them company. update. of the with fact, will this of that's stream all that And person have to PAC, associated all the things of with the provide where Live morning,

would Dan Dupree, our remarks. over to question-and-answer and Chief Executive the conference concludes like for session. Chairman Officer, back to any turn This I closing

to Thank for Thank questions off-line you, today. answer you all any might have. you We're Operator. available that participating

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has attending now Thank today's conference concluded. for presentation. you The

disconnect. now may You