Essex Property Trust (ESS) 5 Nov 172017 Q3 Earnings call transcript

Good day, and welcome to the Essex Property Trust Third Quarter 2017 Earnings Conference Call.

As a reminder, today's conference call is being recorded. Statements made in this conference call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties.

Forward-looking statements are made based on current expectations, assumptions and beliefs, as well as information available to the Company at this time. A number of factors could cause actual results to differ materially from those anticipated. risks SEC. found these filings the about the with information can in be company's Further It now Instructions] [Operator is host, introduce Mr. your my pleasure to Property President Schall, and Executive for Michael Chief Essex Officer Trust. Mr. you, Thank Schall, you may begin.

earnings XXXX, brief our joining I for about will for preliminary regulatory Kleiman welcome third Burkart, today, Thank third John and and an conference will Eudy thoughts you John make us call. I Q&A. topics: quarter and activities to results discuss and on recent our three quarter comments markets. investment and here Angela is update

We beat the and from growth are forward guidance. versus Occupancy pleased the with quarter, momentum income FFO the other non-same-store Company's properties XXXX. performance the of gains, third during contributed solid to half first core carrying the

X.X% in property throughout quarter. the Two growth quarter to market the up in rents seasonal June months rents market last compared early market market X.X% the September same normal third X.X% declined as January decline As September, noted basis, year-to-date patterns, to X% market which quarter, compared The XXXX. then year-to-date contributed significantly June, rent less June. during at XX to January to XX, than reduced rents was two primary lower and loss through significantly compared were to factors from from lease, a reductions. at peaked these rent On to

continued pace at apartment robust the concessions new substantial a moving First, deliveries with quarter. during

five straight and unadjusted country over outpacing the after of markets broader the Second, our in QX, declined employment mirroring reducing demand total non-farm most across for years. U.S.

the each high quarter, leasing growth, our apartment forecast on United West markets, XXXX pricing at ongoing into X.X% Essex to but both demand primary incentives materially supply We growth. be year. remains of head dynamics concession than supply with concern Coast increased the as the given levels job to job result, our lagging a less across the demand As States X.X%, we job and the Thus, deliveries about beginning understanding driven power. remains principally equal of by growth growth focused job now growth about undermining during an XXXX. and remained expected and

of earnings jobs slowdown the tech is a growth unfilled mostly to economy, suggest tech to numbers and qualified shortage workers, absence positions. the have significant of related layoffs Fortunately, in firms continue large as of

the We seeing our another feet square San and construction Jose are construction square infrastructure existing Francisco feet million on footprint, increase in and the San X% per new X% that both indicates with of stock new supply. will significant or buildings X% portfolio X stock total short the year, considering to growth and to XX about progress also or metros to office in Seattle, across existing with under million housing stock close or renovation representing Essex housing office remain When employment that substantial of in fill by pre-leasing. the struggle

sites not across team reaccelerate, recently had Great pent-up adding Additionally, rent major to Recession, new We've housing our have that growth the should significant Accordingly, only is Switching in development since nearly jobs units. XXX,XXX footprint we supply. to demand end of million X.X while the research the drive added job growth. our each believe there market. all we support

Bellevue. downtown to submarkets, Sunnyvale and face West notably most downtown in certain continue We L.A., headwinds and

change in with California next markets months, X% several deliveries We of overall about deliveries will geographic to Seattle decline also apartment mix to moderation XXXX. XX% in peak over over in Northern of supply the with expect down expected our XX% to The and X%.

West concentrated L.A. downtown San in XXXX, and X% around in deliveries increase should Diego. California Southern in downtown deliveries and Finally, with

about rent supply us to However, our in which County, in Orange we decline thoughts in expect a initial leads XXXX. XX% growth

the choppiness job and we deliveries, expectations, conditions, growth any especially deceleration more of continue market market cycle. point will current with of markets. averages for visibility for before the Thus, growth evaluate remainder than At in is mostly XXXX. expect growth rent we during XXXX to concession X% line long-term in job at be the of to around providing early the limited With this point, guidance Essex in

topic more In housing addition, market affordable of existing loss not provide Times unlikely number XX reported focusing supply change it in build becomes housing represent market penalizing rent financing. make housing-related lease California. years. several shortage a supply, likely and regulations a a more lagging for the four, resulting A California, revenue these initially only forcing severe consists for that a cities of processing and bills with were reforms issuance in on to rent in published affect two, the general estate in do passed Collectively, housing a On when rent These start a number in turned, categories, a none to two, laws to measures which in September money requiring will revenue and the rebuild process $X housing; summarized at lease, XXXX growth are the These housing. to these recent end including: housing, number housing therefore, XX. dealing developers enough plan of next permit concerning control, second several instead bond process to bills meaningful and time; new although real proposed is number reduce package they growth. five, on to transaction more address cities of improvements L.A. bills article of to three, housing; bills number building into for fee; fall September. billion Notably, are

ballot limits tenant can week, referred local containing In law and that would be the groups repeal which that group governments. rent by California types filed XXXX rights proposition labor as enacted a unions a to Costa-Hawkins, last of proposed control addition, the

continue While to movement will rent we monitor laws, control is for provide restrictive still Costa-Hawkins away. California's proposal housing the pave from note proposed calls. future emanate of way affordability on updates and issues related any gridlock ways long important which and laws the this older could Thus, variety and of It shortage the is a more a solution. to that repeal complicate

costly. Warming For example, in refocus causing more that point be The projects will the California's objective housing being the beyond to overcome concentrated areas is density solutions Solutions at transit well the level the housing construction Act to supply discussed. and to significant and of to nodes, of is and regulations on investment urban housing primary time scope of shortage XXXX high Global a take

expect will the guidance of our we year-end. high million the With million, regard range million co-investment Overall, to to $XXX to to transactions outlined activity be close close end revised related million on in and $XXX that target press recently property of program to with our million $XXX with topic could toward Finally, of release, We a moment. Angela we describe dispositions, closed to be investment. the $XXX contract and by to our $XXX year-to-date two respect in acquisitions. to properties should in

contemplate to and cap more select sub-X% cap points willing though locations A-quality activities. upside to Regarding asset often transact for cap basis generally stable, B-quality assets assets. to to rates overall, XX and/or continue for around redevelopment to X.XX% pay buyers we Essex X% and locations are XX values rate continue see higher, value-add a rates property methodology, the remain while using aggressive

fixed-rate when changing given rates cap X.X%. is seven-year, cap rates positive forward, generated Looking that X.X% is don't materially, leverage and average around approximately debt see we

development the of the On Park the third commenced front, during quarter. phase third Green Station we

third release. enterprise X% entered press Jose, into exposure. XXX-unit the minimal with XXXX. In with We as under value, the we to which apartment of project, develop our quarter, to Even also Downtown near remains meet our a outlined unfunded commitment venture commence expect target in these on starts, San joint will a development a community construction located well for fourth predevelopment

Finally, in originating remained the quarter, we press outlined investments after release. preferred equity during as in active and the

outstanding for today. in the the As expansion you our we Thank our the as will funding joining call as concludes will That to I reevaluate further now program, my approach over John of commitments, comments. Burkart. diversifying call we $XXX possibly well sources. turn million

solid a revenue year-over-year third of NOI growth quarter Thank same-store Essex you, and Mike. had X.X%.

conditions adjusted to year year-over-year from revenue quarterly decline as both rate strategy growth comps to emphasize well higher occupancy. we difficult last expected, market as to Our when our due continues as

Mike in rent going I'm growth talk rent market growth, year-to-date year-over-year While about rates. market outlined to changes

As was market will the down year's year's the compared continue Since period. have growth year-over-year X.X% we rents we market low market increased to of result, X% steadily mentioned no rents to in one over in below XXXX into with leasing to compared in leases leases. the in the deteriorated volume peak the the early peak market a period. that the months due the for peak conference prior impact overall to to months for portfolio to from July, May call, in headwind second negative the of of seasonal in two for The increase the XXXX, The prior was portfolio expiring to revenue that September little early. about as the quarter rent July course, about the signed growth during X.X%

several in to in of our with lease loss markets has San for having gain our Diego, down such Jose as X.X% to XXXX, San XXXX, a Seattle. lease, Additionally, September to September X.X% and portfolio from declined

concessions year. XXXX. for by quarter team in the basis portfolio of quarter operations our occupancy increase of of quarter quarter second our worked increased points $XXX,XXX about in the We by over third this the use XX position Our to to fourth the the

for and our reduced. concessions now will portfolio fourth the well positioned Our be quarter of is use

instituted controls things, for California Brown state a California as devastating has result wildfires, of Finally, of through which amongst price executive Governor XXXX. rental emergency signed throughout an the housing, order the April other

order are we expect currently our do we at details, impact to not point, working materially the the through this earnings. executive Although

Moving markets. strongest but markets the year-over-year third for quarter within XXXX. to In generating of job update growth of slow Essex our of of to an growth remains continues the Seattle, prior relative on portfolio, X.X% job one the to quarters

in searches the additional fourth Amazon Union the expand headquarters, new a construction leasing in Lake for the third office campus continues location a forward Downtown for While with company on of to the million space an moving company's South at square X.X and quarter, Seattle. in potential Seattle feet tower second

office million the Amazon, expanded the feet prices growth with of footprint of almost year-over-year X by September feet XXX,XXX currently Oracle, is WeWork over office square total, MD such home in their CBD. construction, has In Seattle the Indeed to under continue which and is pre-leased. tech of square the combined in XX% Seattle in addition year. to month that rise prior space roughly In other XX.X% companies Seattle MD, Median as

X.X% Sunnyvale; San for respectively, respectively. California, Lyft North the Google Our in announced X.X%, develop Future for quarter in North the growth Silicon space Facebook, year-over-year X.X%, announced XXXX added plans completing averaged San feet continues Alto; X.X% growth over to electric multi-year was to to footprint, posting CBD, South center year-over-year. jobs for of their of of job a an for a new a quarter and lease while to Clara. acquisition square million X.X% In In Bay in for the same-store in were leader, Airbnb company, and and space Palo XX-property Dropbox, WeWork Oakland the X.X% in and Mobility, third Microsoft X.X% and San and Jose; Francisco, Northern third job X.X the leased XXXX a office R&D revenue submarkets. Area Valley, Bay Area Santa and while office car the growth continued for year-over-year light industrial San expand, be up the Francisco X.X%, of Jose Eastside

completed During we Pleasanton. completed San in as the our October, in Towers well. lease-up of Century Jose And our in we Galloway of lease-up quarter,

third feet in of X.X%. programming, for year-over-year and at Moving content the in in at the Tri-City Essex as the West continues in and to by XXXX. L.A. California. movie original County the create county perform Long X.X%, Snap quarter feet down County, Snapchat. third creative a leasing to Orange market, growth net well X.X% which XXXX. Woodland in of growth studio averaged up for Monica quarter Santa below The Southern L.A. primarily job to X%, Orange slow based startup Hills NBCUniversal new square of space X.X% X.X% Santa Monica square this at network entertainment led year-over-year to partnered continues Starz XXXX, produce the office however, X.X% submarket, in to continues leased for Beach job CBD tech at solid activity, digital In XX,XXX with job of in year-over-year U.S. absorption the prior West in at quarter XXX,XXX down, the is industry remained square Office XXX,XXX growth quarter. Los to feet, totaled as year-to-date with the from growth third invest Angeles,

solid are closely despite County monitoring. elevated achieve in which results we to market rental supply, job weak Orange and continue growth We still

respectively, South quarter Our North Orange at in and grew the third submarkets X.X% year-over-year, Orange X.X% and XXXX. of

data bill, for with and which soldiers, office Universal local square job Diego, and San was for Amazon it in the may Orange of X.X% In County. science. passed continues impact job of in Senate. for XXX,XXX third $XXX Office outpace activity military both in game space picked XXXX Finally, large to Diego, development, quarter averaged This in the in House the in and year-over-year calls over XXXX with openings military aircraft ships, defense additional growth sector authorizes feet which more spending an the leasing HR up, pipeline, engineering billion and just XXXX. L.A. both San software and City,

in submarket achieved the renewals Oceanside X.X% City closing, for Chula Vista both an while sending third In North at X.X% the growth same Our quarter fourth for we out average portfolio. quarter, for revenue submarkets the year-over-year X.X% the and of are period. achieved

However, CFO, and Thank our call be now to loss our lease Angela down as the is XX is our I days X.X%. may portfolio occupied peaked for the our to the Kleiman. will Currently, availability rates rents portfolio out and XX.X% turn negotiated over have X.X%. is you. And renewal

review you, on an our Thank briefly activities comments full update I'll with outlook, John. balance conclude then and sheet. provide co-investment the on the year

same-property the guidance X% growth X.X% we are midpoint. revenue and at For the growth full-year, NOI our reaffirming of

core by increasing FFO midpoint. share $X.XX per at to the $XX.XX are We

as in We growth are to FFO continue to drive expected per rate, core now we points is now XXX basis results a X.X% share, the above year-over-year projecting NOI the which operating bottom be same-property to line. growth

We Republican formed XXX venture, Madrid, at IRR & venture activity. a to rate, that on Xth XX% sold in a which asset Residences X% new low leveraged. non-core Moving submarkets, Jose. Seattle XX.X% asset located a achieving in co-investment and a acquired our a joint cap We an San on in is

since finalize quarter. to I to Wesco our do We begun joint earned and the excluded million will we net buy-sell previously treatment the the we plan $XX promote. have in We currently equity a so discussed within have promote monetize the negotiated our a income and total This plan to from we FFO venture, platform, is to forecast quarter. embedded the accounting amended and for fourth private promote year, subsequent where

and XX%, We over This have of increasing our good the reinvested and venture, creating in of which private ability in joint opportunities FFO we platform a promote to value. the continue return. market unique into execution thereby results additional dynamics the optimize for look ways million will and annually. response well, structure equity our ownership to $X is Overall, source to to shareholder to has performed changing approximately example an

balance The sheet. balance remained the to on sheet strong. Turning

on trend net and debt-to-EBITDA metrics total favorably. times, from and continue our to at of last Our remains over quarter, X.X and billion With recently outlook cap XX.X%. liquidity operator quarter line $X credit turn on term, the of back light we move I our concludes are comments. for near forward along a cash to well-positioned as schedule call questions. now the XXXX. credit will maturity my hand, That to we the At improved BBB+ reaffirmed rating S&P, at by now stable debt-to-market was low our and end, with in

this first question-and-answer At from question session. be you. Joseph from [Operator Citigroup. time, a go Nick Thank is will ahead. Our we Please conducting Instructions]

going diversification, have Costa-Hawkins these today. a certainly just that I I you diversification, saw venture HQ pretty Amazon controls to over onerous in do know West it market you think the going more It's some we've that whether are Denver the go And going Nick. about things into think and traditional you and from way as bit sit South thing seems there you complicated, time, and We on with joint a were here with whole Coast which guess, listen are had about all I in Essex direct and local Florida. in Michael Mike, California, and back, back Avalon and the little Country those rent Town Seattle, market to topics you Bilerman going know was regulatory, I through do away all additional announce like and markets? needs

to is want opportunity of a a risk, your markets, West of that in just about Coast underwriting exposure little some temperature today? I and I you take your your in bit sort So, at maybe head's there of mitigating market recognize the and how are where but lot terms of

it formula, where which types we housing be transition with those it contrast We almost unaffordable, And because them other lot. are we affordable? to question. the great of In our answer there ourselves renter alternatives, or reviewed compare and in in want recently, expensive from other are words, about supply-constrained avoid of some a is more to a we most want of and session and board the markets areas. very that is them, where East is other homes all our a basic are the homeowner the it's against, one. is a We Michael, Coast, to on actually, housing single-family making very strategic markets our a housing think and of where

which relative elements other our to like we things, along pretty our So job view think that's those much sideshow forecast. a growth is and to of driver I that, job with, but the core all about are And of is strategy, course, talk growth, everything. growth of the the demographics job

think it of view, Country on to this time the incredibly Town the went reasons, remain something back that connection Coast are I part West we we've scenario extent concluded in when in world, had the here early and West of I'd years. to strong, today. like our they And for and variety Coast. we strong. to other on is with at the XXXX, point, you we're Bay this. going two conditions In you mean, up to Coast West compelled is that will we're seen and to constantly The a we as go in looking, cycle. the have in analogous, the that, over and outperform say evaluate Area boom-bust the tech that So, is the XX% rents the Internet not Remember, markets

had that qualified headquartered a finding bank, the troubling They're these time. very obviously enormous trouble. had of common growth we out diversification. unaffordable, therefore, but and way have are had were was yes, but then. but are people, concerned as this wealth. having few tech were XX the the income. no we that hundred greater companies went we and than rents had back trouble extent they now dollars see bunch We've growth, all see thought much they they And sought about then, not rents job a demand nearly over are we and are us. so, job as no reach to they today, now also million they to growth to relative a And They the What here. unaffordable markets reported somewhat top of consumer the in product, yes, The tech, out for people are tech having you no we and companies public, because there is as dominance there markets companies of know, with the were in is they so We

years, comparison of like companies, to XX market cap, the the don't a tech we XX% know, companies don't exactly top back XXXX, the had something remember cap a but about XX-year public it's non-techs Tech banks. tech market you statistics, companies the XX I go had And grew of think and the tech if you did I times, if tech integration the away. into not every XX%. the society. like top fast-forward going the XX grew is if the whereas And in of something component non-tech, we, X.X anything, excluding

address, in devices billion to going example, from XX pretty or have many number thing. for next a a IP XX this years. how XX extraordinary five somewhere have will around the It's You of billion

time. follow is this times, tech happen higher recognize many in against bad for betting a probably will think We a that are the endure said growth bumps thing. straight we things and I've don't periods CAGR over we line. Things of unanticipated, are a of rent there So, road. that that

board And a the we actually for that for we rent about various think CAGRs think of so, those we growth pretty markets, I the pretty are of me tech in and front what have chart and are is different talks that well-positioned. that prepared our still compelling, still

is on may where, not the Coast, to and only either, not it about right, think West tech evolves, Tech Coast You be how West constrained right? markets. only

operations believe they if companies concentrations set No, We of people at find I will think West looked of not can't companies for away all think the mean, be totally believe sure. We overseas. are a the and is think other and day. smart. they their We other list that I other on don't that. people will up will Coast, competitive, find that the there States United the companies smart. I the places. We don't I But If away. the are then going West it's Coast, beneficiaries. is on look Alphabet true. are think We agree at with tech going

elections. sorts things XXX mean, done. and a that lot of from travel down companies taxis and there's I like don't communication, retail, even things. governmental we and I it's think time all - the I the and look Alphabet. Google extraordinary fold obviously, They're pretty pursuing and it's under mean, way in disrupting you list, a If they're of and

right the are we to still to so, tech obviously and are certainly company, And we're necessarily not it's them, tech not we seems attached the it place be. but - like attached train to a

Is out? this the how bill towards expected the do play on And to Costa-Hawkins. the what's momentum a of you've seen then expect you repeal? or most this Just timing

filed and still so John defer such side. point will of the a has It's ballot It's a proposition, say the to And to Eudy big it's was spends a not maybe time Michael. political way as is this I want at lot week, He XXXX time. a to a proposed so I'll to we but just on long It make bill, ballot, it last about a be that here. in go. don't proposal it him, deal on

the it behind it. qualified is in see, signatures, how Let's getting and see effort process gathering of much

are key those was part, it creates significantly The that allowed that outside on bills think trying other the moving is point think people greater very I make the is view, I cheaper control. the that my reduces up some turnover. turnover, stay reduces the San passed, level, the forced and rents scarcity to in affect for course, has rather significant In control to bills at were to least that that being not related they the is people but remarks, or turnover. I there pushes unintended state units. housing, in biggest, Jose XX San the consequences. a, out prepared to rent And Francisco, that did Reducing from core a recognition words, exacerbates at areas, actually area. the housing than of It now into rent

tenant at John, there's this. labor said groups from political unions remarks, in it's being anything? Again, I pushed think my as So, add of point. advocacy separated want this really and to therefore, proposal the by Sacramento you recognition the I prepared and do is general in process the some

XXXX, issue qualified not gathering to be the went the does of earlier they committee, is control. recognized you short spectrum. is. bills, General, we from rent it Attorney lower protection a I And And if if start And legislature address get control for first state does to local recognizes housing long can post-'XX got that XX rent through repeal rent The trying to the that have event, what it gone in not end passed, these measure the them, that think before it's didn't pre-'XX most add it and is been. it being at on to that believe, that in because the we the by does you And for we at doesn't cities, very, down recognize look since product, across rent you help voted thing before of the they that very they were it it From local will signatures. And even have done the get get if the product it if days can see solve what off, this is the look are problem. XX though Costa-Hawkins spring when jurisdiction. recall, And it it only likely radar, and it affordable examples repeal solve housing of it. beat is, of about segment. everyone same ballot, our can is few jurisdictions could state, control most before repeals is you possibility again, measure if to the make it the All of that is, out the control measure at we make

Thank you.

from question from next Fitzgerald. Mehta Gaurav ahead. is go Cantor Our Please

I I acquire JV what's can formed, for call new how and the it. to what But talked being can if for sorry I'm by about you guys JV guess, And between you about decide much grow? joined you talk acquired the was your how the the already own? that JV versus

Sure thing.

we about In of terms our JV it's of how of think function really optimize we itself, capital. the do how business cost a

contribute on the are you a so, to if vehicle. acquisition asset have specific a not, will, And put sheet. These a joint an platform to venture it balance to requirement don't we or

our between optionality stock is have which the and do cost where price joint venture we to so, arbitrage And on also side, the that benefits leverage. from

cost really of and to capital they're when optimize so the so. do we makes So, it can higher slightly levered, sense

we total it's piece, as business around far is our goal that, right somewhere that try So the as business. well to our component of far under self-imposed less and enterprise that XX% of than, keep say, - as to the still as now,

And the the million. somewhere this joint preliminary robust And that fast-forward so, more think we arbitrage way embedded there's to I of $XX last, estimate to $XX this available with the to so were a promote between million million last platform and we rate somewhere million us. just believe was it's year, capital the now to venture, The another, between at embedded this to run in update, promote of current $XX monetize mentioned I one end that year, perspective. itself, point, truly then had to $XX of cost from that able

second the guess question, private talk And in Okay. I you equity about you are what could market? seeing

the repeat you question, Can please?

more equity about in private seeing demand you what less Can the market? Are you talk you're seeing or demand?

the comment that the Well, and on sheet business as capital, this transactions we in world price of I completed that. said, that, Yes, at joint well. Mike. we on-balance alive was means to advantageous that these fact thought, that cost is can the is Angela a venture

that transaction. growth find reasonable And institutions think to by cap struggling I that's yield. what to a type rates X% institutions, the are attractive with and X.X% is considered think some opportunities at I of enables this being pretty

market active there So still aren't the within is say are the as buyer many on out there, there are ones very but still focused pool maybe a and institutions institutions. that there very that out I would the

have. you. That's Thank I all Okay.

Thank you.

of Bank Please next Our Sanabria America. from from go is question ahead. Juan

a Hi, first question maybe Angela. just for

of quarter of kind revenues. and income other quantify the Was third year-to-date driving impact kind just expand on about the same-store of what's you driving in that? hoping talked You that, can maybe the the and some

Sure.

so to points off $X.XX same-store. actual basis But we the that on third - translate let's beat, had XX up same-store that quarter, which the quarter X.X%, last FFO about a if so X.X%, ended thinking perspective, On of and about at higher impact, guided is the, on about the out is outperformance $X.XX we you're if timing, table. the the to in the take you

of did are one As same-store components key like our the other reasons $X.XX, And occupancy is mostly it's really only pennies, outlook. on some of your and [indiscernible], income to the other we other so that of other beat fourth income, that's But typical garage and parking and non-same-store. $X.XX the non-same-store quarter make is not drivers. the adjustments income, are attributed the And those that $X.XX, the any why to component, of the $X.XX includes income.

could points go quarter, any guys new October. you through have you hoping just data and and was for the I then renewals And on the Okay. third

out, spoke you be would can through the go renewal if that you think that to I offers maybe great? but again,

is John. this Certainly,

understand we them, doing the So, that, earlier, means our sending in or renewals important it's is what to where to rents loss process But as range. fourth the are. our sent points. and lease our for had we That market X% is of XX about that pretty out near mentioned mentioned basis is I X% are quarter in the had right to actual that the now

some will up, likely, we'll where perspective, exactly so, the on case-by-case. down, negotiated that subsequently hit year-over-year above the so from about get this last were in from there, a up, X%. and come market And a I in most was basis, and it's ultimately we go But market, ends mentioned, back where X.X% but a year from at August, low as that below we're time, point low

bit so quarter, had We good. little the tough so from my a get is and overall, comps view year easier So, we perspective, doing fourth the last know we're optimistic. a

years but Moving solid there. growth out not things forward, the are that few it's had pretty ago, era we a job extreme

Do you and major over mind buckets…? going by the renewals the new

Sure.

about then we have new about renewals And So, at are rents around, rents at the SoCal, are we up And in SoCal renewals Northern going year-over-year X%. out year-over-year we at In X.X%, are and California, going have rents the out going in X.X%. Seattle, out just about about and up have around up X.X%. renewals X.X% year-over-year also X.X%. about Northern California,

what was the number, though? renewal And Okay. third quarter

renewals? quarter Third

Yes.

Third in came overall. quarter X% renewals around somewhere

Thank you.

from is go Zelman. McGill Our ahead. question Please next Dennis from

question, close new last Hi, at to so quarter, out new forward what? just third was renewals the versus in the that

for quarter, the rents In were quarter X.X%. third about up new the

were they've the new yes, up actually, rephrase that, third rents - - quarter So, in me sorry. let

New up NorCal came was about in rents went third Seattle, down. about points They then peaked for X.X%. X.X%. quarter back SoCal were XX basis It up up and the about and down.

today. four elevated Okay, what with concessions, them being it, activity concession months to respect would talked today you How thank the you. have then you anticipated, ago? call would about three, compare to And

It The the of was quarter the in impact across third last all the greater year. but of Southern and activity biggest was third California. quarter in area quarter significantly markets, really concession the was both second

was constituted also assets of and to Downtown So, assets context, in and focused Glendale, we XX the it LA was and so West XX%, put and that around LA. year, Tri-City, XX% the our LA that Pasadena. last had really three that in that year, concessions This West portfolio, broadened, same-store constituted some LA., Downtown then into

much So, in of SoCal concessions we use greater saw area. the

in month area, assets the Basically, as with a XX top a again, XX%, area, in of California, pretty constitute the around area. concessions close, we assets Eastside was Northern the the California, It goes. much at Pacific a were that go the look-and-lease, out. cases, used and as new were XX downtown free Its in Northwest, part largely concessions, XX Northern assets certainly to far remained in used demand spread the there. was as In existing of area some the were downtown not assets North The XX% strong significant. more supply California, several essence, pretty and downtown in market. concessions was the only all total on just they When only whereas really XX%. look Southern competing tool has spread were we out to as in As the

year just other negative to actually quarter Hey, I third think dots thing. script, just the add John, employment net me in let connecting comments Dennis, the one this we had the back And growth. the

of happened, there from September And you quarter. actually supply June to XX the you hitting employment so, same unadjusted went And being is negative when naturally total other net job think, words, the have growth, down XX, created lumpiness no the during what have I is in demand marketplace.

start concessions and the the the portfolio, the are mentioned. pushing stabilized lease-ups John so, And just which into numbers through

I the difference between But were pretty job from, So, a greater have in quarters. that robust is is happening. stabilized steal what trying communities XX concessions, then the which get month targets. from to with can't is They're growth, communities, take lease-ups stabilized you the prior to happens. units they absorption If the XX start still than or to they hit a think it extent that in that quarters they trying from always this the affected is, to

the more of as as to more be next you I being But would but been, very than think expected seeing you'd supply you be visibility kind deliveries would next closer my the that aggressively majority versus ever so think unemployment of in answered question of that. get time, end. that about the limited side? markets, on actually more the are you're and think year they down But put and developers concessions pushing you walked you when side same they've helpful, maybe than through, That's the less yet your today opposite, on the comment with to at on the

mean I good again, that's Yes, question. a

have I owners, developers different than as concessions. fill us, developers minimize stabilized objective The to they want rent up as lease-up and soon - want to become they're a the whereas period, think economic over the free development minimize the owners. and they like stabilized

demand. a way to this matters. to if absorption continue view intersect, to and so our in actually growth why hit there going things growth that are bad doing to economic where research years negative, is growth the is this So, push econ study few two you motivations turns are And - after get our that know happen. this targets. But going and their stuff to job out. that need we lease-ups challenging job And job what the those they're we to figure is really very create group, and When different order we a quarter really do,

the year, you This year S-XX of a like the new XXXX reason which aberration the of the thing. us that because that So, out in theme this why full-blown would is that's seems at this out the trend. drop-off start rents and well, on many is this a really this is everyone because issue bit. or really is, the is the The extent believe a things norm, looking didn't time And And deceleration this. to a is is is key to happen publish with weird this past, we year, leads time of happening there. seeing of drop-off times start I an caution of it in And demand. of normal the the

see And in of know try what year, New wait after period And happens and couple go go get the we'll so have a here of weak for better would, to Year we rather most view by. the candidly, as seasonally of February. time, sit what means we then the call happens we the and of what world is our a we'll next that what into QX than months next and after early feel determine rather during

was and want I want mean, and the put it. that make - easily think, on a there. the delivering stands put of responsible we we down we So is but could what team numbers with feels have have behind logic behind some for conviction more to out we what importantly, to paper, piece we sure

this again, than little I think, bit normal. So different, a year's

program to have what's and little a challenging figure it's visibility. overall just to going consider we bit adjusted our so, different we out happen the more next limited And fact - year, we're that and it's to

So makes hopefully, that sense.

Thank Certainly, it you. comments. does. Appreciate the

go KeyBanc is question Austin next Please ahead. from Markets. Wurschmidt Our Capital from

commentary And prior rent terms to had, growth properties the in that in you've demand the specifically a your has of traffic coincided, regard you you've at of seen and periods? it market With that guess, on is are job or I your moderation versus seeing the slowing concessions? what more or function websites growth with

No.

it looking up? it but driving And is year a period and at is But hard So about doing are market, the to is metric actually job the question, is and demand's the look answer because exactly people tough, try across seen for our it's that into cause think X% we've tough options, us. I get probably last from board with is up tough more or same more is overall. to what always root we're is understand it. insight what marketing, that to definitely traffic up It's to is, good it sometimes traffic for your better the traffic up. that understand a It's - to

some do XXXX, into see leasing next thinking heavy just decreasing you concessions guess, growth of I year? growth What then, and think peak the season supply about you to growth and need the of burn Interesting market reaccelerate off. level in to starting perhaps rent job

that and question, candy. Halloween so is you a Mike, a question. is great the an piece million-dollar of which It's award, This is get

I to think going next is start again. pretty strong year

being all look now I It demand. at the good plans like developed like implemented, seems hiring and for when at still are positions get very seems it New people. significant we and the those they the business the companies, and think, involve these Year business again, is companies plans of number there tech hit open we

And recovery honestly again think will be we're strong have a the early whether don't into to QX. I And question year. peak going so, - I next we

significant key be number phases, And them. are will how and there's you so, which of I starting to think do another - we up the pretty good. final continue will the year first issue, bring into to lease-ups be is track But many the part their of get a of

been of heavy pretty X,XXX in has disappointing whole quite of job about has or which has the which been relief on of California, LA., don't Northern bit. really downtown. side, accelerate terms which California Southern the lease-ups I see in actually help there. lease-ups, should that example, units portfolio, San lot led XX% - that has the are so Diego, supply, a For and will a one-third higher leased, in are really in

year, think that year So, interesting, we than were we wait we'll goes was rents year, bag, our peaked we'll next trend pretty but I mixed the into and peaked This how higher start a the year-to-date to strong summer. when it's before. actually it and but early, have see

So, that next I'm strong thinking to to going year. a a is every have bit but little start we're different, year

coming leasing, there? the peak of leasing then typically you lease-ups season, on to see of And your concessions thoughts do as potentially follow-up comment in final their stabilize one ahead to out up any pick quick phases, looking

different stabilization the something I dropping the growth, again, Yes, we is In We which that in I saw this exacerbated think demand no that in that quickly. pretty of words, concessions. I lease-ups of hitting done that seen, quarter, and seen, see So they're is use that it some that other not they're and that you think, something by concessions fact new the we philosophy again, is we obviously, was is that very think think saw saw we hope continuing again, Seattle. is concessions, post-stabilization, done. the in and haven't we the goes haven't the had Downtown of LA in I the lease-ups We until quarter thing consistent, away but

Appreciate the thoughts. Thanks guys.

Our next Markets. question ahead. BMO Capital is John from go Kim from Please

to fully, percentage home? departures track for House impacts announced move Republican in of interest It a new mortgage picture, deductions homes. the you do new digest Essex, housing early you significantly do the tax that the may but into cap little bill reduced be includes a specifically, developments? think this Big But to

don't We I do. do John, those numbers? have you - And

looking buy is people well. to a move-outs of long-term is the new which - about a moved have home, XX% we not average quarter, we long specifically as third and well, where In were home, XX% out moving. to to in were Yes, were we when buy about term see people homes, the to

but much, [re-built] brand-new between changing home. separate we don't home a not that's So versus

Seattle other But in was median on exactly. California the home home. the is No, very number Coast, median striking. year-over-year the increases which averages price that about are the substantial West is price X.X% increase XX%.

to These versus XX%. Oakland, XX%; of are very apartments. condos was back Jose striking which goes view San our again, numbers, it So,

we know, X,XXX are have apartments about you condo convertible. that As

allow compensate want the the where And ability fit to, we something can Presidents spent job, and side to to the the We we on add in work condo all is of aren't convert is the portfolio. and the just us is one to taken that said, as have maintain for them value Vice Senior last basically things this to that is of "Okay, that over together news we've the rents think that these to some level. there bad to perhaps good and condos, significant So, the that amount our - business." of else fast several growing your new news as efforts years

remarks, months. California filling lot realize a have all John in the up this in discussed I prepared been And in Okay. Northern developments new his of recent not then office but disconnect optimism expansions seeming optimistic. slowing tenants align I'm just seems growth. trying the that between for that like disconnect job or expectations necessarily, but your are And versus it that's to office

the lot are had growth completely that away. yes, that we've that like the the we're growth a a but the is average. gone and or back of has this job fact average. growth places at - not reverted job It's Well, U.S. still we mean thing. job again, - horrible to We're talking fantastic is There

been continue. of built currently. wait for and that's things to a the bit remain ourselves of that open know between Again, be last see. over one or not. I that construction struggle demand lot a to again, presume are still so, positions. supply continues open issue. new years imply And and positions, have is to change Amazon's going there's XX,XXX would We something number of a for couple we is these we lot expect And produce lot X,XXX that and We'll hard up there we're do X% absorbed into maybe a and going being and those now space little the has it's I of to if again, be new But of housing X,XXX beating overall, job been and example, to HQX to don't of positions office positions down that and track, the growth. that has for to interesting too the people still that with

you. Okay, thank

Our John is next from question go Please Stifel. Guinee ahead. from

heard your Two questions, was way lease in Is about to about negotiate properties I I and try I'm just you up loss X.X%? tenant renewal the to to thank my down of basis X.X, at I you. an that but that one it? look should notice, which XX was got Okay, a so the best if points,

Wow, live our in of I hope you John. one don't buildings,

sure. why big modeling world for the In to refer picture it I which that is way

looking and the are, life we quality at the of On which comp and the provide tenants situation with it's same are things case-by-case going them. are that obviously the what's we a practical on the side,

help are come culture. to and that looking on American out marketplace a the So, on there. know in here try no at give that's some in But out the I end, it It's to why part what's trying services perspective which what, I call rent. of figure how works people and really are in model to great. the a to consumer the trying are how think going looking on are lot is very the we people obviously, that to the of people negotiate But comparable practical matter basis, I'm and provide, always

this our my a people very may find, perhaps may to expect, hard, it say we is more that we value think stay. works I expect, you you often than so we great more appreciate from and team want comments, than will and

build mean you and density which to more more going all multifamily I'm this about me said, All eyes or think less to clearly, if to if glazed much transportation-centric listen these in and generate to I towards locations, Mike, And is much think correct right. cost you the bills, I of development And my real then What the it how much I question my means wrong. end the it's urban does do oriented but these more expect locations day, over, future? supply? to, bills what at

part to of a lots on this, further grow. great which road how know. of a been type I that's sprawl and build question you homes, is But you got next and going build thoughts that where the question, I has he's will miles out, answer Well, of Eudy California is we're and the XX first here world, Mr. XX,XXX more the is

the to the wants last years, that. the that's global idea XX warming really XX by cetera, be Sometime et over leader driven on California California or wrong a said and it's concerns, where

execute So, not the it the a definition the plan. areas and this nodes the on more transit Warming in Act, trying transit to and on And that that of lot nodes construction transit the on in urban work pretty significantly. cost order incredibly almost tries which nearly XXXX We nodes, its going enough. transit built on, make urban properties expensive. by to plentiful and passed is Global in Unfortunately, will to it are mandate is be areas and Solutions need in up transition the housing are

to but to now? difficult next is it it I'll fill part of to that deals the So, leave development in John question, John, find how

an it day, other outside restrictions, just Wiener We've to zoned, process, is several talked try about the of end the but SB impose what requirement, a the attempt represents. about, attempt an feasibility, go you make if And this for expedite wage bill, to spur prevailing could ministerial, built. has least be it which to created, while kills quicker San more Francisco, of Financial much last the in the XX, you're of are every then he the process gets which to has deal, example, the these the at quarters. on help is but bus at to how the certain if drives housing reality bills portions that

because with transactions So, but capital, going produce. way you've as next down of as natural We you'll can, be see financial form deliveries what predicting really is going in portfolio off in see were less we're over they over is the want the direction, tailing the an our going over development because that it all substance that years the go created. gets this of couple of two the than And Not of years. the two cost years. backstop the be to we seen lot supply of of sudden, things to a from aggressive a are opposite to, And see the happen wild, we what significantly hog sometimes we in the going last to oversupply our to feasibility. going last try, of and

Great, thank you.

John. Thank you,

Capital Please Our ahead. go Markets. from is Wesley Golladay question next from RBC

from be or supply are perspective? number you're at a a Good When on all? down nominal would late looking deliveries impacting year, timing just the go that average forecast XXXX weighted everyone. So, morning looking next basis to at from at a you - the XXXX

marketplace changed always going last nor And of to Mike. it's when. people our econ much quarter. It's a pretty the in very delivered what's we out our from Yes, idea to Wes, again, to research the out, the be to end high better team drive but is and you they sent everything interior get don't again, it, done because difficult how to the of buildings, access much density you with in pinpoint you safety have exterior do up know with general. life building the done, done

get So, be it's this going to all until a with analysis not from we know buildings exactly But position sense area so is, for quarter-to-quarter. that to great refine driving we significant continue the the something the going do in able and cannot really what we're that and do be again, to trying to we happened. what happens to

units there And having the reduced. so, driven X,XXX from last thought quarter, we sites, total that would be net about

- next at sitting over we're we're X,XXX. XXXX, now XXXX Now, year

- QX overall. reductions still we into into significant of QX previously that but the of forecasted have driven some so XXXX, So, units

So really reductions, about as California X% California San sorry, Southern overall, and Seattle. California, in increase Northern reduction LA an a overall, - I'm little and significant a in reductions, Diego of smaller by bit dominated well. increase Southern But

half but in from remain coming year this to year and second should somewhat of the the then Okay, big year next as are supply XXXX later of some are expect as really the a benefit front perspective, timing elevated far half? get pressure in are these, they these in and deliveries, this we

and each about same QX. X,XXX units X,XXX and In is thereafter, QX XXXX said, QX QX California, drops off again X,XXX X,XXX then bit up and little quarter what X,XXX dropping units, it picking going XXXX, then units is it's Okay, to XXXX about and such to units, QX QX then around up Seattle, and in X,XXX in X,XXX X,XXX with dropping XXXX, QX, California, QX units in QX QX Southern the in caveat not In is I QX QX, Northern and units. in that units. perfect. at then a just about

season, are absorb when so demand created a And we again, concessions an jobs to hitting supply feel that's the season, on peak peak natural the overemphasize there that hitting. much leasing when in better upon can't when is the hits, the mix. has supply, the that's completely the QX supply the When about it's being in our crazy. of occurs, outsized we to being and concerned supply later when because some in go start and don't created, are going depending QX, that with this impact. get When going, jobs So, when leasing more you we're year, be are I being peak jobs and issue. most of

months, zero, let's zero concessions is the you have You months what that again key driver markets two end say, quickly, with the softens growth, there. being up X.X somewhere concessions and and supply demand very around

for Okay, and growth some blocks wage X% of trend, strong market at year? start weaker point normal the next what driver growth? And Would then looking of job comp the to to easy offset get the growth. that biggest building the does at the for be concessions

but growth, strong be be didn't talk than and it rent it to better continues we growth. about continues Again, to wage

go California market. the the it's improvement than now are Bay Southern Rent-to-income markets couple continue Area. numbers, our a higher So, I And that interestingly, of we a have ratios think rent-to-income in to down. to slow

Bay strong income definitely it's it's and Area's is helping. changing, the So, interesting, growth

Okay, thank you.

today Street last And Green from Advisors. Wagner ahead. go question from comes Conor our Please

equity preferred the and program, on of from seeing what's these what type demand the you're developers On - spread your what's the is deals?

how not Conor, seeing We're strong. It's still reasonable you? as demand. are

for $XXX approach bit million And been scale to still may as And $XXX we terms in We or we competition things. marketplace. little we there's of different million expected the the off in reasonable a or toward but this as drop of seeing we're to commitment, it - back another high start appetite our of coming flow. look a deal some funding source number year, pricing, end into

growing about. see are still down, slowly cap right we at also think more more we now, we're business, need capital I which position but the So, as which than we is safe these pretty look move rents that or and to long rates willing be NOI seeing talked to good more construction provide case, continues deals as growing equity we're Obviously, demand pretty stack. That as in costs. as a means the and in slowly we're

don't I but will think business overall. this to So, go it next think down is I going away slow somewhat that year,

a in Okay, be what the terms assessment they housing given to these shortage to help are of alleviating thank could California could fund could repeal term, bills what on Prop this what longer won't part on we the you. if in on housing term? going your table XX the think you that act, steps on on next really the acknowledged see they thoughts And do doing, the you've legislature the willingness of then California, if to of be some the forward do that affordable a bills, comments much the or housing much your since short be won't will new but do or of do - in

And take is most is. of one at answer to right difficult but where because of side is all accurately, used to Eudy. It a John driver the agency gap that that went affordable that's governor, the disbanded This a and produce as housing. equation, completely fill was now a until took the primary up help I'll on XXXX, have by cities away affordable that it, to California stab know, a to folks redevelopment the the you the the squawking away. attempt in

session, public-private to a got and of next a will, seen go. that It's It's out the to basically happen. housing take is you create And be sure is chatter very to development top bond you help of to to going combination the on lot because a in going of direction it ballot measure if thin it will whether incentive, I making exactly available that in that incentives, think going for other to not that's everybody. yet that's fall, of be legislative to the I'm radar to the it hear needed. this attempted it's proposed that's where or of a if next being is partnership, difficult But through to for and to an create pie go help, it's what's deals it's pencil, it's the here the side, happen. development make form going

I that referred LA again, to XX,XXX my about said the support bond comments $X be I think but in - article billion homes and issuance approved. the it has could to Times

Right.

ballot, those to It's has homes the be then built. approved and to on be it be have going to

most on freeways, of the done. to housing know well, are acknowledge So, what shortage the the neighborhoods has of because everything in We an There it's in day. cutting else be, the as there government freeways traffic was of in that favor used every we're is down here. see We morning through enormous that jam-packed. I now Conor. the area, and the your And so it happens

why is really problems. Quality but that in short the is CEQA many which real effect impact don't And The anything dramatic make to back California, address Michael California are to going people not now the I really, proposed away. away. of see years and these in to are traffic challenges, jam-packed a Act matters, everyone resolution CEQA, NIMBYs to it. - the term and and is fight don't cars and touch these law, talks But on comment, think that of need traffic, is includes Environmental I to they staying are about going just Eudy it's directly real. about John Even development, it's it We because and they're So, CEQA noise, a real Bilerman's real object none needs allows the laws initial cetera on issues. disruptive to the a resolution et environmental these that go and this. CEQA, are talk they and neighborhoods happen, which based with

All lot these we're with than about. lot whole of more what multi-pronged, money, of require approaches, issues multi-year talking a a

you. thank Great,

This question-and-answer to to concludes like you. for any session. closing I'd over management the the Thank floor turn comments. back

NAREIT we couple look Well, forward much. Have you. weeks. in Thank on good the continuing the you to call, and so conversation we participation Thank of a day. in your appreciate a at closing,

today's Thank This you your teleconference. for concludes participation.

disconnect may at time. lines your You this