AvalonBay Communities (AVB) 1 Aug 242024 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Your host for today's conference is Mr. Jason Reilley, Vice President of Investor Relations. Mr. Reilley, you may begin your conference call.

welcome Communities and Earnings Quarter Paul, Call. Conference you, to Second AvalonBay XXXX Thank

XX-Q please XX-K forward-looking of release of in note made begin, There afternoon's and we Before that press differ may and and discussion. associated forward-looking SEC. company's filed materially. are the uncertainties actual uncertainties yesterday results during a with statements as There a risks the and as variety discussion Form well risks is with Form statements, these this be may in

information usual, press definitions on available may The financial other results As the the an our discussion. his review release Communities this attachment we also Schall, remarks. which during to the and and measures our does AvalonBay performance. And turn I'll encourage with and operating website terms, be include you call today's is that, over non-GAAP used at in reconciliations CEO for Ben? www.avalonbay.com/earnings, with Ben of refer of financial of attachment and to and President to

Matt Officer. and everyone, and Kevin Sean will for with today. here Financial I'm Chief Chief our O'Shea, our you, Jason, our Investment Birenbaum, Chief start Operating Breslin, thank Matt joining Officer; us mind Thanks, I Officer; of go that key and emphasizing drivers by number deeper. a we are and top believe our outperformance to themes to and Sean it Kevin, of continued that of important are then turn

X starting Page presentation, As investor as proceed usual, through we reference will prepared on we our remarks. our

momentum, raised guidance the sector-leading and and operating growth lower. revenue and full year same-store managing expectations core continued further are our expenses momentum peers. exceeding our FFO in this on year also closest operating quarter second among the projecting us with Our revenue for Based successfully we

strong are effectively by Our demand relatively with our operating full core worker customer stable the job encompass with renter, better-than-expected driven year prospects. half been at and in through the a right economy the that position now. Sectors our income knowledge-based momentum core of has of first the employment

renting to of levels and versus continue we of also of towards lack home, continue strong least. unaffordability. a of that low XX sector at new tilt for dynamic continue as to inventory benefit markets, the buying should We most to And coastal versus finally, to expected, given benefit the our the from from benefit customers' XX a our portfolio in the supply suburban rest another months for-sale

with internal growth progress also our being our strong Our model fueled is transformation. by continued operating

to runway strong efficiencies with of at ancillary increases last revenue from and of neighborhoods for track set meaningful our centralization these allowing our we investment to on and initiatives streams. growth As XXXX us Day -- operating us. future We're in our technology our investments November, reimagined with in Investor operating collective detailed earnings drive initiatives, operating from of healthy driving ahead a are

drive we're is Importantly, from on increasingly acquisitions. continue yields and to operating external and to also positioned platform drive our uniquely activity. growth these Further returns and our new that tapping point, capabilities to incremental creation outsized investment value to earnings developments

outperform. to continue underway developments Our

of the completed noted we stabilized quarter, initial impressive Slide on development an new yield X.X% During X at communities X. as

new to was a We execute yields on of from in X a XXX also repositioning, believe had X to zone expansion our Sunbelt assets average relative final with mid-X% capital has lower been this XX% in now X.X%, portfolio set strike underwriting And more from for differentiator projects to reallocating environment north to particularly of in borrowing. adding cap are of We're adding additional our also our our We're including remaining highlight within development of are XX%. We points and total optimistic regions to this XX% in asset spread of capital an longer-term our our as billion. with sales we at the acquisitions into on X.XX%, the developments starts $XXX rate of portfolio -- unsecured $XXX cap $XXX to froth new relative and tailing advantage. markets basis. markets. the having deal our well into highlighting $X cost that of our are continue X% rate market moving upfront, new rates in million superior of with off lower basis I'll debt the place, rents portfolio heading year's the density then actively cap of we our of At cost an reposition and raised bottom incrementally price swaps to of rates regions. Page expansion X, our we more growth, million million at expansion we which XXX our for attractive The this prior of expansion and point year-to-date about effective attractive suburban of an benefits just in

better-than-expected our to closer this other staying had debt of to incur Before zooms we outperformance let to revenue momentum core please costs is than turning of results. on elevated more for X we Kevin? was partially note increased $X.XX our and Kevin revenue outperformance strong, outcomes QX, bad category. in by guidance FFO the a discuss in occupancy revenue, on year. nice outperformance rental provides year. Slide with bad our down and the Other it couple hoped. timing-related of QX Page discuss half in our take guidance, updated touch segue than rates, QX second by expect our to broken our Kevin which lease offset debt, details the and a on $X.XX X of $X.XX And updated to that the me the was of detail

Turning to Slide X.

outlook. We're XXX-basis-point full our per Based in a operating updated a year This growth relative April. the revenue a core expectations same-store to to XX and adjusting increase prior are by outlook. points, date and for and full X.X% performance full April our share of expectations in for our will outlook X.X%, XXXX, XXXX see projection respectively, XX also our represents same-store and growth NOI rate year XXX-basis-point financial relative our is expect growth of our expense now to are we year-over-year per of the which share. and to our FFO which X.X% You operating of healthy remainder January for points We basis outlook NOI increase $XX.XX increases $X.XX and year, revenue, growth. year favorably relative favorable our of on in to basis raising

million to billion of new of over same-store year increase driving in increase. a $X a X of relative Lastly, additional projected to just moments. Slide our includes XXXX. highlights core our portfolio development forecast midyear $XXX this strong starts will on starts within to provide share in in Matt few April activity most Encouragingly outlook. performance new midpoint the nearly drivers per the increase FFO is the strong of the and our full $X.XX details importantly,

lease-up core In map core in benefiting These to including outperformance other offset at road our by partially overhead. Slide projected FFO quarter per are activity provides our our addition, are amounts share a quarter communities. we X and from adjustments capital second share from items, midpoint. FFO per markets third minor

of third we an our FFO operating our operating expense activities month, transaction the fourth basis. Adjustments and the growth. and quarter, expect same-store outlook decrease market growth year our quarter, we other These capital for expect our lease-up outlook. by driven by during a portfolio sequential Sean. drive XX-basis-point last same-store change, on from same-store the be sequential sequential quarter. I sell from per is third lease-up which from later which are full QX and January net date, share will communities combination components now share. communities decrease is strategy same-store in recent quarterly with this fourth per for growth. from in core a the Looking is the affected by quarter, growth $X.XX share at fourth per stabilized consistent Based expect contributions to our per of FFO And adjustments the the year-over-year our increase the operating our to turn over growth the and revenue growth expect core markets first for $X.XX midpoint in XXXX, activity will share primarily quarter disposition implied we by we X.X%, of portfolio buy which expenses. In transaction same-store expense to April and NOI our and about projected the FFO and core Notably, of primarily projected driven performance higher will the growth a from in midpoint XX-basis-point strong overhead X% and in expense reduced on now activity call contributions

All right. Thanks, Kevin.

to and of off to Key QX, Turning occupancy through rent in X.X% higher move into stable effective Lower as supported norms indicators well basis portfolio turnover during in the in to X, a start from high and XX% April drove In historical year-over-year change specifically, in the down during roughly move-outs XX. last relatively a we're July. Chart June QX. QX were remains before a Like-term by than was and in or good strong lower supported year turnover moderating points In X% every turnover lower level XXX was home. change below to range part we region. rent X% quarter. purchase Slide increased

with the strongest our in QX portfolio rent leading of East X.X%. the X.X% our delivered As roughly Mid-Atlantic expected, of and Coast way change regions

due Our to XXXX. District due supply, X% in demand inventory continue declining part is office Northern Maryland to roughly existing momentum, demonstrate before federal be Virginia the government's projected approximately of to which policies year still to but return strong this X.X% of the to and is and the ongoing weaker Columbia in assets which to lagging is suburban

Our submarkets change Boston produced during protected rent supply suburban the represents assets the high-quality Xs which high and in portfolio, quarter. predominantly

for supply. to than X% to ago in year supply higher low X% above to year and range is from projected supply roughly the has a Boston year be expected New this the decline just urban suburban substantially next X.X% declined to

Island and New a portfolio submarkets of rent suburban environment, New Jersey, diversified strongest York X% Northern across New has which Jersey change Island. our the and occurred various Northern the in across quarter. suburban New for various delivered the Central static quite growth is the portfolio and during outlook New Assuming in Long City, X/X Recently, demand remains Metro Westchester, submarkets positive. The Boston relatively Long York, Jersey

the more side the quarter. lagged city. The during in Seattle the of rent change east rent change West in with and Central regions primarily New workday the in in-office submarkets, led located portfolio, in X% established as north-end produced distant our Coast Some is their have employers Jersey increase way range, requirements which X% the locations

portfolio. our most some urban submarkets, with there new submarkets Redmond, select most concentrated While is is suburban notably of in supply are in the not pockets and of new inventory competitive

front, Amazon range. lags, the rent and employers the change work increased demand of supported respectively, X% the in with year. with mid-X% the momentum have San On X.X% Francisco San Seattle major rent In in and like experienced more demand Southern the half Microsoft we've California, Northern in-person during had and Northern we better Jose, throughout requiring California change, first QX. and

Bay the of basis East during change the rent with quarter. XX remains However, the soft points

markets modestly be is the for to stronger X% stock we major demand. continue and of extent California in Northern year projected the future this realize Given of to in a the below year, trends to improve near supply level across next the

range. Diego Southern L.A. of the year-to-date, X% choppy and San the San Orange inventory Diego X% and performance the nonpaying rent change with been to to California. residents. submarket down the from volume Moving followed by in at submarkets healthy produced County markets but returning across correlated and in various been L.A. X.X%, have has roughly strongest County the highly Orange

were from the bad which across the X.X% the depicted expecting we're XX, portfolio, relates XXXX. As second We're to for results on year XXXX with improvement same-store year-to-date to trends underlying during it X our bad still quarter. debt, XX-basis-point Chart encouraged full bad Slide debt in approximately in roughly is while average debt choppy at

for our portfolio XX basis As debt points. XX we've pre-pandemic previously, to bad was stated

year of lease $XX incremental XX reach to more increase rental by So updated primarily occupancy an outlook. next originally to the the level, an most We Slide in rent in the change we effective points anticipated, beginning the X% revenue extent at address of expect change X.X% of now the expect year same-store is moderate the turnover over a second we seasonal the XXXX, first points the year. We or range the to continue. stronger trend growth the from several the now quarter full similar we year. for first the basis to rent up realized than seen roughly change We to quarters. Transitioning produce for stronger we X% with in the expect the basis revenue our expected through level year. to higher lower rent half outlook half to million for revenue X% like-term that begin XX allowed realized to from consistent us as expect achieve half half. in The of in of back performance year outlook and XXXX, our of driven and and decelerate increased rates recent rates norms the start expected We've third to XXX the

the mid-X% outlook for move-ins year, for range renewals lease the of X% range averaged and offers the healthy balance in The renewals low near-term while the August expect X.X%. new for with remains in We September. roughly

Moving to Slide XX.

England, we're to better result stronger from operating supply New Northern growth of Mid-Atlantic In track XX, York, almost finishing change and Denver California. million anticipated, and Dallas of New expecting prior expected perform expecting are be Slide primarily continued challenging regions, and relative and markets. And new Jersey slightly performance expansion in other revenue a Pacific to expansion our Charlotte than In regions stronger established then realize Northwest. XXXX. modestly to projecting the we but weaker levels $XX as NOI better on we're where initiatives roughly on New to we're our Southern expected of see in incremental of Southeast in are those in our and originally our in our substantially Florida outlook. the growth can We're no You regions,

You constrained at which which have results same-store highly rental are grow From Day incremental expect perspective, our the areas: expected an revenue, our during year-to-date contribution can which increase X objectives $XX the expected from payroll innovate the strategy. to first, declined generating see in and in in by roughly our keep well efficiency XX% of those related of labor the number financial projected other new our to and X we're portfolio and Horizon average we last is our positions. These a from costs, we million for At by is second, portfolio. track our year, of merit to teams, communicated the enabled broader reflect X% is further enhanced which few future. with to and roughly million XXXX, on and you year-end by years. increase reduction to which X balance XXXX, Investor achievements below X% forward is that million to reductions the our efforts digital We'll relate on-site supported producing approximately of have and a of it $XX over year-over-year; in to about achieved efforts $XX and we the next the look continue as informed NOI

development turn activities. I'll starts it recycling Matt Now lease-up address capital to performance, and to Matt? over recent

All right. Great. Thanks, Sean.

development our to Turning communities.

in which leasing these XX performance leases NOI $XXX X into second guidance delivering above assets by translating continued our rents being which increase $X a month points driving per strong lease-ups. You in initial per generated are an had for record million. The roughly year impressive all-time net can our communities XX% XX averaging underwriting, velocity see XX is was And Slide for the is the the that increased leasing company this our with active by month details results basis quarter by development lease-up supported being yield. or

Northeast and expected values, more market year, with start these years X.X%, expect second target generating today's spread underwriting our we occurred quarter, results of a plenty future and vast $X.XX new others exclusively costs, now over shown roughly of or of almost X rates. developments QX. Based expenses rents, $X.X capital for for in of these providing of strength most of this majority expansion total control a our starts projected development to the in rights development the the break yield regions increasing of providing into suburban these and starts We we volume on with come. projected Three ground growth basis pipeline the with current current a XXX billion the in to points either insight XXX on for XX. submarkets. in construction total asset to cap on opportunities On Slide profitable the communities the also projected of as in operating of And billion, these transaction are year are cost to

proceeds since Turning several have to After sales market our for in aggregate we also million. of closing the Slide XX. $XXX quarters, X were call which dispositions been quiet, on active transaction recently, last

capital. We've a rate reflecting $XXX,XXX. the also cap interest All we with per to institutional our five where dispositions of reinvested urban half of average seeing like. an expansion submarkets price were low were Three that a starting in heavily in where of assets they years of favor are as several buy investor at price capital to these X.X%, the into in than established this of bit coastal locations we home find X out and these less in average far were and are cost sales replacement home after so opportunities of we our $XXX,XXX regions per average an weighted attractive of regions at submarkets priced acquisitions better

to us our of long-term regions and goals continues portfolio having in asset suburban to allocation of trading expansion Our closer in XX% XX% portfolio submarkets. our activity move

on more to grow. And assets redeploy as well turn We those end optimizing with continue bring portfolio I'll our that, we will proceeds we look of market as of focus back the additional Ben. several the to as to before as year to it

the wrap from XX recent report. Slide with on Thanks, up our Matt. ESG I'll highlights

and that full that, progress time to and commitment all on making a initiatives, to inclusive operating efforts team the led us and across it to diverse collective Rothenberg volunteering the by thanks call huge are our operator sustainability reducing AvalonBay these our turn Katie costs by all AVB on her impact the more meaningful of continue to invested from organization environmental with to to entire to is enables teams, but Our make via local I'll the associates. And questions. facilitate a and

question Eric Instructions] Wolfe Our is from first [Operator with Citi.

mentioned in like something I wouldn't carry rate a you You there's if over specifically think go that's the seasonal good as to into about run costs. was remarks seeing your just us fourth the if that you're number in or wondering that strong lower for XXXX in growth maybe quarter,

signal Just about because were going you earnings brought up trying to you your growth not forward. the don't something if I know remarks,

in share fourth per take that this this Others implied growth sequential may Eric, to a Yes, is from seasonal to about We by some primarily to fourth want in to Kevin. I'll It's weren't decline get FFO point a of sequential of portfolio. Much is expenses, XX% in trying the at the have expected in midpoint quarter this anything year $X.XX. increase of quarter guidance is crack quarter of $X.XX operating the little it in to increase guidance recently to driven a early third but would in bit continued That Rather yet. it from of do the earnings to noting the jump one. be to same-store quarter terms signal that. core is midpoint our XQ that same-store sequential the pickup at in. a revenue. in 'XX fourth a

as well adjustments. remarks some trends Some as his alluded favorable other to Sean in of [indiscernible]

investors the as as all XQ as fourth and from from is portfolio really sources coming kind lease-up quarter was well that the map of primarily road our continued growth components being of trying to to growth and and well. we're to same-store the from So that signal

you seeing run it to there, the long-term seeing bad in be presentation, back sort what seeing some slide Can it. you're Got unevenness harder sort about might get And that the at? you're average that you normal -- talk and to of you're That's why you it, had debt. typically then what of in about helpful. that suggests eventually

things year, I Yes, in it debt. absolutely are last underlying of expecting bad we're looking say of roughly at that and right -- down the mean, we've range in years, to terms I'd right? X.X% the step XXXX. Sean. to you look overall, direction, So couple seen what into Eric, what Yes, in for trending last is it's decline relative back it's if We're X.X% the

Each on itself as little the to in when We've various the cases a activity. So manifest each in right think to back has not things get and it precise which trending month, like it's direction. underlying a moving court based direction. be bit underlying relates I that. to quarter right But provided can it we're the normal we that forecast activity actually expect based bumpy would happening, in levels to to just on

but 'XX insight change good point as 'XX at we'll provide quarter towards you this XXXX, turn we best overall about So the certainly our feel in to time. the from

question KeyBanc next with is from Our Wurschmidt Markets. Capital Austin

next it data the earn-in to range, on provided a heading that for around into bit that that X%-ish the mid-X% based below some say Is the you year in that the for half year, the be kind range little growth maybe lease XXXX? -- back of of heading fair that rate into should expect you of what that

Austin, Yes, Sean. it's

earn-ins of rent go, try we going January. Given what some the on to where and sit last it it to here relates think to versus left But year appropriate with comments do sort math year of in you half on year that. be based make reach to be we this conclusion own wouldn't the change to as kind can your

what but that fourth just picks the is acceleration XQ, what on that's from then I you're supply so kind to the of growth given growth, the just that in next revenue quarter into you then I rate up there is the reaccelerate? of Or the don't know seeing perspective? lease maybe getting presentation. in XQ fair. the heading you're see to and year, based a on in year causing specific half too directionally expect a want you'd back bit, something you That's -- growth you to same-store highlighted And much on that in from think provide projected 'XX, mentioned

Yes.

part an to of better of as of a softer operating I standpoint, in couple get producing is continue Austin, we revenue. if drive a QX back you in the that initiative have other bit we most and when continued a as think for year, year think rental for part, little this One, comps the last in QX to areas. the expectation growth revenue slightly well activity from to QX

We as that QX continue to increasing quarter-to-quarter. compared that a to and my sequentially And consistent second been. last the where be in do push comment, we expect the debt as half with of move bad see we then better by bit to year, little we've potentially

things But there's softer is really contributing to say it. reason. So a the few that are would primary last from year I comp the

Kim Capital with Our John next question is from Markets. BMO

Kevin, fourth you X% that to quarter. again before quarter Can that down expense same-store to back in you you just I moderating think, rise, the third explain the in expect mentioned dynamic?

the on Kevin. nonroutine second of a Sure. here going utilities as quarter in third what little uptick quarter, the well number you've Essentially, jump bit. the timing-related may increase is OpEx got John, particularly marketing it's in a a in redecorating and expenses Sean expenses. as in want to seasonal categories,

from seeing, So were be fourth in increase through quarter, in quarter sort the in the same-store you sequential quarter, then OpEx. you're there's the sequential see in [ And the quarter $X.XX portfolio. in third OpEx the seasonally the fourth reversal to quarter, that decline roughly going fourth ] what you're a going $X.XX of essentially second

background one. little So that that's bit the a on of

opportunity It category like about you multifamily? Dallas. in I versus I build-to-rent have a in And how build-to-rent. this how looks ask margins in to the new wondering going at this forward was you look wanted and then you format anticipate project

you one new that a BTR. historically, very couple talk calling we've a in Plano. which in I of The I'll development, townhome own, develop that's operate when John, of project is comfortable and comments, we're BTR portion people and with, that we today. with appreciate about product start one out and space, Significant it developed

shifts, demographics, you the the product of forward, population in going about So it's what's like we a you prospects that about think for-sale think happening market.

the we've projects. apartment been increasingly townhome we're our so some building space, active years, say, projects with in projects. We built last townhomes have And are over full of I'd actually in the it's and couple that that we where townhome places conjunction some townhome active

growing, the growth we this come forward, So -- and our we've growth which in some of Plano how our as as development, type sort Plano to potential well channels expect other BTR, funding similar of what townhome, through through our of fits project developers, project which as you through own some growth go of that some is is in been was should this acquisitions.

find operating yields But and as to margins, similar far as you do it multifamily?

Yes, John, region. including amenity homes it's Matt. have pool that a mean, location would and where multifamily X small in with operating it's XXX that and communities are communities house very a in similar. to I again, are these the a club we package, margins very comparable

next Fargo. Feldman with Wells from Jamie question is Our

Great.

the thoughts the the rent of terms of change I expected in So renewals the back appreciate mid-X%, new color or year X.X%. on half your

the about season, it's out? you regions And kind Clearly, this that year? we're about your -- do major into time in different what more region, and visibility this heading talk at time Sunbelt, this you plays but by coastal versus time -- how of West this to last whether feel You you? or Northeast versus what the year slower feels think just then how the

Sean. it's your I second don't first. Yes. Jamie, take Why question

the mean, dictates that. things is for case forecast we general of say relative happening think Just in provided. our just I say, feel year, would but terms overall, of we last that and from outlook realistic different I macro the time perspective, that present we the outlook, each we generally environment think And I our would presumable forecast, pretty a about sort to good I

could that out concerns than So per caught up that. that to say can happening se, are or we this create I there there's get optimism, point lot more a to you try of can not less confident things wouldn't in that you last we're you year year, or create

opposed do as to regions upside speaking, the it us back half the the exception most to our the the Coast in growth relates generally with regions, potentially it second Seattle, we going solid the I the to level to but the West keep for of Seattle which to East in one relative half across -- relative try in high year and to market, expect outperformance year the first regions, a of and continued year. As in I'll Sunbelt established has at Coast the expect outlook through all think a be the surprised half in the of of

it I East the of would through followed of by in the So West think region, terms expansion without established, established, as performance. latter going every of regions

then or And Plano thinking the the Dallas Okay. asset. about

Just getting capital versus are 'XX, developer on more of doing you late rates changing like infusions cycle infusion about mix? look are in there Do their seems something development how these you think some on same like? just through late to balance maybe on balance down, 'XX work you Is investments your the way are given sheets sheet? everything keep thinking or -- versus positive or it can own capital back -- in pare sheet putting the balance people on more type

providing as activity degree, different are as through And our third-party out that a to investment make about the would teams. we institutionalized forward developers. is Jamie, programs capital what to own certain to we I have, think going we call external additive that our

that it us, it external excited the prospects over in we're on are we can of the DFP number incrementally more investment of next quarters, As hear number And for we potentially development. months from to activity, the accelerate earlier and and allows us you development in look around because call cycle. out program positive

The doing match an same. only just and they're on AvalonBay construction both we're it our as add are a DFP, the We're capitalization view, that, communities. of they're are being as other difference both one clear, or is Just point case, one from in the developer. consolidated whether funding executing development I'd to thing it. And actually reported be them balance there, sheet. in on development a there's case, and But they Jamie, teams third-party

question Morgan Our from is Kramer next Adam Stanley. with

Great.

October, even with that? you if September out Just August, wondering maybe renewals you for have guys where are going and

Yes, the the have out September, We've is that Adam, Xs, low it's renewals that mentioned went in visibility today. August Sean. which we for and

And it. about acceleration thinking July. particularly just then June, Looks like in of kind July. May, cadence and blended lease kind June just the little backward-looking nice a a of bit of new a of and a and Got growth Helpful. into into then basis, decel

backward-looking Just forward Was just basis, this wondering to right? kind hear this honestly, if last you a months. Was what of this something kind happened, could happened typical comment on of pattern? in kind interested Was of seasonal of pull a what few the a kind of different? seasonality, on

on kind market, July, of half here, expecting the the the through of you depending norms. year, start I back early I'm then Yes, decelerate it also up with of you in year think Sean patterns the where way seasonal think you again. in where is Adam, asking kind seasonal it's X%, mean X%, rise typically consistent the see I lays about pretty historical with rents out the average consistent January, a

that acceleration combination And was X seasonal seasonal One, or we of the things. factors. approach so a the saw

saw asking in what the our hard just overall rents. early turnover. We better was it revenue to first quarter And related approach. than anticipated the lower as is hit pretty we Second occupancy, gas management

balance saw You see stable see move sure seasonal July, you QX. that of renewals and itself make move-ins try start maintaining year. to begin both to But manifest the in as new rents, time as that you decelerate it we frame August and through to the you're the you occupancy, in to peak

look But you points basis down at were June Overall, July, were the balance June down example, a XX whole seasonal but slightly continued in of scheme it's what net markets little see material through little would from expect to for deceleration bit. we a of August July, some markets it was things. not move way all as to so year. bit, we to up the And the happened, the from some as through

question next Our Green is with Street. John from Pawlowski

the sense a for for the compared on the of to how pipeline question a starts economics Matt, just this development get year. you -- to rights

of to X.X% expecting yield additional compared So starts, for started an the XXXX billion [indiscernible] how and $X you're would starts?

really the it is John, depending on geography. Yes.

it going depend what So on those look billion starts, are they are. $X next to versus does the where yields like,

expansion low Jersey and What bit kind in or even density from north X%, mid- medium here little the product rates a our of of in X% even around as the seeing finding the yields some to suburban are lower to yields of So cap of kind X% again, starts. we're mid-Atlantic pushing is North we're well. regions Xs. to density basically But Xs high Boston, lower to there

the Xs little into West a deals those in the So start you can spread. yield still why And that it's to -- get have Coast, is which find of we is on that regions. hard the activity that very

of much then would really actually hard to costs moving, don't on of it until I'd know kind depend is bring how bid. are the and say you jobs So the mix the other thing you business. And

we So the a in are this of better we're costs seeing year hard thought. some that frankly, acceleration because little is, than coming

So starting to better little than those are a pencil we deals thought.

on to more jobs have that that So aren't. than and visibility the the start we closer into that ones are

they that be to aren't are the we year where XX there today, on months another Xs, costs might based they Xs. deals costs on for some or be going So but are the where in be hard looked two, to ready might in at hard the based ago, start

this or Is Okay, starts? the maybe that's basis land unique yields inflating [ expected anything you've that stale yield there starts. on But year unique the helpful. there's X.X% a ] seen on XXXX nothing that's

No.

more it's have In that's fact, deals lower where we're if land inverse. up anything, of reflective newer a basis signing market today's The the is.

expect what's the X should acquisition you months? average And Great. deals Last on cap reasonable you of in acquisitions. acquired base case volume rate share year? recent Okay. this we on a the Could question

Yes.

bought cap the is far, we we slightly And that rates X around just the So cap the rate so X. sold X.X. again, north at of

has looked I at that more it So basis -- spread year it XX that was was last in actually points. about come probably [indiscernible].

more better. looking little is like reason a feel to the trade one that's be because looking we active now why So we're

We are hoping of to do the more. do at least could another certainly $XXX million or so We of end acquisitions year. before the

assets We in we're that to have sale disposition bring market well. the to more as going

on find it -- assets So like. but depends we that we if

Josh from is question Dennerlein Bank America. of with next Our

highlighted of else just looking transformation? sites, that Could income noticed your in $XX Ben, any I something your solar that you over from million then in front? XXXX. you from sites like operating And the model or included is solar in is and addition? team remind goal Or that has those NOI of the I incremental that of slide, was activated us ESG on

of a second Josh, bucket activity. On part, that's the separate

the So $XX of operating million with benefits model, target. has pool the It's part in not also associated it. that enhancing NOI that's an sustainability

when to we so range. and increased opportunity solar the And XX% that. of were into be in to of portfolio type the talked Day menu set investing Those our Investor projects a component XX% at back the around

Okay.

that. to Eric's up of first Okay. I question the on expenses. appreciate follow And I on then seasonality want just

You mentioned like us XQ anything the is there's if out quarter. go-forward year? need of a kind Could a the for remind watch And lower to throughout on cadence you we basis? like

a this this see spike mean, in about and as the quarter. for that's nits watch the is from and of it's R&M third nats utilities down historically. sure I typically, went that in in the you in QX the to of seasonal some which the in to from kind spike [ and ] increases increase going and second into first is I water half of X/X sequence anything not QX, do earlier, wouldn't out noted, energy half and fourth seasonal sewer and historically of then and on get and then X/X based that, as about quarter things the projects slow things case Kevin you like turnover, forward. Kevin OpEx, And year, for -- through I'm in terms but to

think that's So normal. I

see be relates we terms have you of things to absolute would pattern different, that before, of we explained changed level the in in that a impact think forward the happening to portfolio that dissipate the has as the begin and should have I of growth, OpEx is XXXX. number going it materially. What will on

various of guidance that, the So is the burn in of there's about off points both X.X% of the things and unusual pilots, basis we XXX-a Internet, identified, impact embedded the but sort. that basis net primarily with that operating activity year our then telecom, mainly full XXX from XX category about of in points the initiatives, utilities OpEx for the

kind XXX for the closer this rate basis is points year. run So to of organic

begin I And mentioned some get dissipate of into those will just as elevated activities XXXX. to that you

think bit as more to get tailwind but various quarter-to-quarter. providing the it without categories, from a if really about 'XX So those a won't patterns of little specific into you we related seasonal change guidance, there's

Goldsmith Michael Our from with is next question UBS.

among Are of sort you resident changes behavior in any sensitivity seeing any your Or price across tenants? markets?

it's Yes, Sean. Michael,

that QX, of move-ins is same distant you to region in more in and that in bit Northern sort elevated. percentage be worth that nothing location terms movement, noting only it terribly way, In that of that substantial. in of if thing want the QX within describe the has thing from Seattle, the particularly The little a is same we markets, new a tech saw might continued California

some XXX miles have during they move closer. So like It X,XXX come second, wasn't or last locations over year, out away, back moved rural thing. ring to people to they COVID started but miles may moved have that of third type the they that and

of the only I've to noticed So question, behavior. second thing then related movement. And that's just resident other terms your in

In move-outs, you of to home norms. buy terms out years. sort not side, is historical seen just percentage to related above the we've given But way got couple below on flip a the across inflationary reasons for move the norms, economy historical is rent move-outs pressures increase the last of surprised the over to of of

regions. option, where big the month number a than affordable in medium-priced Renting is medium still rent more is for established of renting a so is to markets still price is the And $X,XXX the affordable our home more spread most kind between our particularly in equivalent alternatives. and

that's parts choices people daily are life. different and of But making thing of other potentially the So only note. their

suburban that growth seems my your markets? as some other of Got supply been question though in is, follow-up there's in there it. push Is supply Jersey, markets. New it similar could for up pop more a And suburban a risk

question. interesting an It's Matt. it's Michael,

in than the does it kind housing Jersey, opportunities. more in affordable markets suburban in round an been and inland with be last in there X -- Mount will the very of sure, increase But high-yielding beneficiary was past. that the prior of of supply we've is than allocations rounds, aggressive of those Laurel the -- For seen it development some we've more

Boston, contrast, that towns the We kind same by XXB framework that years. a There's are the of haven't seen of been XX threshold at actually for now. their last has lot the XXB

in stay suburban don't to that force Boston would jurisdictions. another have the as these Island governor pretty where really tried The of and expect I handed supply the is is ability got to recalcitrant on some her supply Long they to Sean mentioned, So way. place it muted and head her.

it's still I seen that approve I talk think say to would where work is is So legislature biggest would really things people the do the more about so to is one those Jersey had trying probably The far California. is make a lot housing. What state as to advocates been that as we've hoped California, the difficult push haven't example. the jurisdictions effective economics because in attempts really,

supply going there's onslaught of anytime a So soon. sudden be there to I wouldn't be concerned that

next Goldfarb with Our Sandler. Alexander from Piper is question

questions. Two

Metro bad Just back yet call. debt Mid-Atlantic commenting specifically, Southern markets X was debt rival the bad higher, certainly jump out to like that the above would renter And really elevated. you first, that what It's are Jersey affluent interesting New with on presumably was and guys have going Mid-America a New more remains their base York, Cal. and

you give high has as the base, that's then pretty your going overall and which delinquencies to what's be as Mid-Atlantic York, New good New can two, of in causing on one are. just Jersey renter So delinquency. a why jobs, assuming has higher sense they And Metro

to Happy is this Sean. Alex, take that one. Yes,

policies because -- debt amounts what don't In we different that companies, bad everyone terms one, everyone's mean say I probably little just and different a know to for bit is it's compare bills across of by challenging things. trying I'd

there's Beach, utilities, So them for when track customer care pay legal we very for bill bill everything. the and us, for it we rent, bill we center cost. for we for fees, our late break at of We lot fees, that for There a through bill doesn't them the carefully. things there's bill someone lease Virginia them example, are

know bad the same of is not, is. what debt don't differences level can in impact the I or but if everyone So policies

hard that, comment So of it's specifically because customers. different to on

As it that dollar it York, weight accounts the New XX% relates Jersey of But yes, mentioned, you value. outstanding we is an example. to have. terms that the its way markets only of New in It's punches above

from receivables you that we So it's is there, at courts have in moving. jurisdiction the issue And about the outstanding we're is far by may the there being as X/X down. the just the know, country. of are pace that slowest which It to main trying chase the

And continues. lot a of so more sort in XXX for time their sitting of we eviction which been them there have process, Metro current a have New in and terms York area, Greater of out almost than year the there accounts out in the

[indiscernible] lot been New we in primarily York a is Island have places Mid-Atlantic, but that in give see legal and that in just of renters District of tied in Westchester. And that need areas the X in try also things also and Columbia taken to steps the slow time cases accounts it to like extend sort. have Montgomery court and more free So to does -- of delays County, advice, movement through to and Long City, to then

So processing and relaxation we've it Jersey, of Mid-Atlantic factors seen York, allow continue the Cal kind sort led other kind there's New of the of in some cases all combination perspective Southern benefits need And general are faster the where these as to sort process supportive eviction movement, same to of the what New range. to some to and of to see dissipate move. to we of that have a of

that's... So

Yes.

and a only is, you there. lot in on that a your you bunch Metro Stanford, jumped Jersey, question established Island York good a other really have Second to of and markets. Canaan base to just New New Shelton, you a have looking dispositions. X, out down Long over portfolio, Connecticut, New pretty renter But given lot Obviously, Darien Wilton, used

disposition not just pass were in saw an too just Connecticut to is good IRRs and versus So is your or where and New up opportunity market, intent way Connecticut a to revoke Island? Jersey up, Long the you desirable

it's -- the completely. exiting market Alex, are is complete almost with Matt. it No, Yes. Connecticut we

You're right.

very think If X Connecticut on becomes you have go I path probably a last years. assets you're And sold operationally to back, XX couple in or we the once inefficient. in X that

that the -- most we've kind desirable made was our that but we're mean those kind the of absolute I right. you're portfolio, that exiting ones of of among Darien decision market. Connecticut So the

kind when worth so X assets have of you X or not it. it's only And left,

next Our with question from Bank. Instructions] Okusanya [Operator is Omotayo Deutsche

at a ask as regulatory regarding on if of to the cycle, state wanted heading rent election thoughts kind into some level just and Biden the the national control? you're to we're anything front maybe have proposal I hearing question the

see there's states. this just state Yes, Sean. take different the is across Happy to a one. that front, happening We lot different of things

So being things initiatives, are the to others I various with associations that in say that specific, very being involved without relates active various engaging that. proposed like as local folks we're ballot and just the would what's it happening, what's with political

educate relates it there's to cons a that engagement lot to there, and most as of people policies. pros the various So to of importantly, activity, manage

future both good something sound political control supply and negative the of the when but the not National of great, to absolutely only through earlier is its sensitive are over Biden a for things And speaking, doing that Multi you it lot in the it industry but reason, kind I to of engagement topic Matt's I to think as point policy. wrong might generally of candidates, Council years. The X the rent think way. will and it. with is potential couple putting about the Housing teeth relates impact which have a trend standard we've is has any last entities that individuals administration, been policy, and there of impacts, likely national that seen, housing that particularly same the a policy for And others plenty of that's

relates the solve which to the States. is just for. as [indiscernible] supply to of housing, actually off, it they're the what to First trying [indiscernible] But

nature, there obviously, a environment. in an for promote I is road some about not what there's think map needed. election exactly control slightly housing rent in in other can't predict people it's areas So may talk to policies where but That

be may if competition That's concessions, to is of I expansion classic seeing deliveries. seeing? different light kind more. business in anything of financials kind helpful. the And you I of kind know behaving of use ask And of that shore then may in anything your In but you markets, are had the in have kind regards up regards practices one we how unusual this to their supply to just of

Not an months, necessarily. typical as it's depending the supplied concessions, through the lease part months, again. market hyper Sean This sort of like of pockets X nothing south mean in this a are or Austin is that, supply X typically and what of end Charlotte, people of environment on atypical there coming example, I impacting that, maybe in from term lease-ups. like see [indiscernible] of where places like you stuff and and kind

Rich is question next from with Wedbush. Our Anderson

your in acquisitions? question of expanding sellers? can sense eventually. least nature And the now things any the of in the not terms cases you're you are if in are to And are Mid-America right part REITs more today. So you your call, obviously, through direction, that And X than talking bargains there you of the expansion, to of Sunbelt is, any move ever. you feel where same trending you're in at Do listening urgency a of getting to characterize

first can the talk I'll and Matt Ben. seller is the this dynamics. handle Rich, part, to

we and is Matt upfront about selling opportune trade. narrow dilution has the it slower of part, time growth we reallocating first assets earlier, to gotten think regions the sort then the to pretty established And On capital. talked and older, think effectuate of out an that as our

is not The that, that other part closing. that a is I'm window mind comes to believer

well a I the think that to with we're [ expect degree a as weigh of while. lot markets operating activity. be for to fundamentals that opportunity certain in I the a on you front supply refinancing be us continue look of when dynamics wave those a still as of ] of going are the at window to

-- where a and are of terms them XX-year successful. they fund be gains sellers 'XX, in And a sitting Rich, others as we've they're may assets end kind though a those on what in and buying least if vehicles, institutional back would on bought the There's some of in at in frankly, that sold where or if even limited are, 'XX, and just the been then still on of been of their we not gain have as that it what ago, in X reaching the lot we're maybe and and the position. funds of position who finding been X- years 'XX, have bid a are owners they're much they lot it fine assets of they're funds like the haven't life,

who's they're plenty that's profile, sellers majority prices. the yesterday's are not buyer institutional to holding trading so still X this there's and that one. why But the still market, of that's capital are the it's later sponsor out of that usually now, meet that's a with And funds out for market. Again, not and they're fund the and going assets typical closing

But not down there? brethren your REIT

not selling. have we -- another REIT [indiscernible] we really anything was No, haven't that

Okay.

Second question.

I consider that model the thinking board better of expansion product? across millennials, in in when you that model the interesting that -- sort general? is of work so building building in and the sort markets is townhome terms on. out families it Does Or think of

It Yes. It's an does on really economics. interesting land the depend question.

the some is see it cheaper of in and expansion because our there So do regions is zoning more you flexible. more of land

homes does where looks of what's a we're a to seeing in of and factor North kind lot values doesn't lot And regions, it you're are land -- not are you home other Carolina, rent. rental Florida very So little in lot in it townhomes into It Northeast because pay price pay the and versus is those when much economics figures, where Texas, terms in are and because of some of like X relative Southeast seeing build the a land other the California a again, these And lot values. the key just closer. get California that the of so in rents a it in there. of

the Schall would no over time. There further I this floor at back like hand to any are questions to Ben closing for remarks.

you Thanks Thanks, speaking us forward everyone. we look for to soon. and today, joining with

conference. today's This concludes

your time. at lines you You may for Thank your participation. disconnect this