Essex Property Trust (ESS) 8 Feb 182017 Q4 Earnings call transcript

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

As a reminder, today's conference is being recorded. The 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 on current expectations, assumptions and beliefs, as well as information available to the Company at this time. A number of factors could cause these actual results to differ materially from those anticipated. risks SEC. found these filings the about the with information can in be Company's Further question-and-answer management yourself the of and Through portion, follow-up everyone’s be you one time respectful please and limit question. to question does one ask that your my introduce Mr. It is to host, now pleasure and Officer Schall, Property for Trust. President Michael Essex Chief Executive Thank you, Mr. begin. may you Schall,

update Q&A. conference make for Angela and for Kleiman portfolio, Burkart, activities joining the accretive welcome I of brief by Thank is market John our Essex and markets. for Today, with today, property first you the core and Eudy capital to our recent activities. the initial FFO same three guidance high fourth I will discuss topic. end call. and range growth us fourth comments John expectations to mostly exceeding regulatory XXXX on per driven investments another quarter topics: earnings X.X%, results quarter year investment will was opportunistic successful and share for here our XXXX, and and On of

always, that we of driving industry the dividend XXth us X in nicely To the which allows our in this later IPO of $XX growth XXXX, have IPO annual to approve in Board a about track consecutive common from for the on us the dividends, we one have bottom-line Since now. to to have price. become increase the aristocrat the dividend growth. positioning in year to expect best As a our dividend times we month, end, focused records Directors paid

growth and unadjusted of in in markets better in of This at non-farm the markets the provide average volatility growth of trailing Coast, month the slowing that growth Essex employment declined for growth gain. job historical estimate XXXX. job is we Essex job Essex improved call, conference with on and On information in total the graphed QX about supplemental concerns the the significant last QX improvement QX, on X.X% page quarter’s noting along job both than QX West to nation X.X% the Essex S-XX.X with In the the in markets three sequentially most reflected the expressed contents. on

our Reform published assumptions the GDP our increased XXXX. in to year GDP we growth growth our into supplemental. expectations outlook years economy to the improvement for the to significant bill X.X%. S-XX previous stimulate XXXX XXXX further Turning of XXXX, economic have the will economic believe enacted for and key Tax on in we In recently we experienced U.S. Thus, relative

Turning growth to labor job due continues This chronic at housing and in continuing robust Essex our X% above delivery, the on growth, we often the tech Office and in in the primarily tight relatively across XXXX markets footprint. flat which expect X.X% to is expected with consistent U.S. markets remain Job be rates both create to XXXX nationally job the and unemployment growth jobs West should Coast. low XXX,XXX X.X% market growth to in perceives X% and housing the representing at should for total stock in expected thus area a be Seattle. shortage. construction XX,XXX job sufficient drive sale, for housing units rental Coastal demand the of both Bay which California’s pace around to about

the rental while abates. faster inflation grow expected has compared U.S. issue shortages to and estimated in been XXXX markets and at Thus been stretching on for for it lower the X.X% affordability. For wages for focused Essex both personal When than all rent U.S. is as in rates, price in XXXX, the often points the average segment negatively supply In growth. several markets impact X.X% wage improves interest the Essex virtually may X.X% apartments luxury has Essex the years, apartment In the expected and of affordability markets. creating rent XXXX affordability X.X% are growth to and nation. accelerate at to income

eight As those you remain California. might economic expect in rent-to-income we the for six our versus metros of supply expectation in market unchanged conditions rent Northern and including better operate affordability which in still is ratio Improving levels or overall XXXX in lower underlie growth better XXXX.

rent about second XXXX bill Costa-Hawkins act limits have by rental prior matters. scope housing control the Now I my on onto governments. regulatory local to the California repeal topic commented proposing conference of which enacted calls

AB As support XXXX. a be required available at to in in will make analyst The references move unlikely legislative the of least bill failed While analysis study the likely that flow.” important XXXX would rent and obtain discourage supply office of XXXX, inactive would the online we control it to out recently committee view misses increase construction housing with “expanding concur protections this issues. it states XXXX new by other not

that Our tenant rents citywide growth for apartment longer rent upward recent had reduced and of by study San faculty available Business hunters to control compete fees found Stanford fewer at School supply as units. Francisco's

impacted repeal As from balance. in this is industry the response association noted coalition is In there process referendum the which to also the owners, oppose effort. The effort has coalition was a strong qualification groups. to and Responsible last California's for Costa-Hawkins quarter For organized to other named currently support Hosing XXXX November

wanted. future update seems legislator provide future will states bill we update and California's will a it situation like California, Similar lead. We other the the calls follow rent control as repeal is and provide to we ban XXXXX AB monitoring on calls. state’s there Washington to are an on the will the in an state and

a passed it’s to and related is and state Tax there of to year. while last lot important attention local on that Federal been between distinguish taxes, bill limits renters deduction late Turning to the homeowners.

lower taxes demand incentive also domestically. deduct plans be repatriation large and housing. for limits a don't press repatriate reduced tax who ownership. home also cash mortgage changes from burns law tax to the benefit The Seattle a to cash bids likely rates amounting tech in billions and Northern should a greater tech resulting the has from certainly held These to in of related negative the already renters For by and which has of income. after-tax rental California, the a California generally are clear interest appear dollars. property hundreds to of new fact tax prospective Overall, to of apartment expand buy announced it’s been overseas there lot of overstated on to Apple of the market

Finally my topic investment. third

values assets to generally and a reevaluate XX These up to X.XX% from rates side are property quality rates stable. and asset cap that to continue often recent basis indicates locations activity higher XX Regarding although around value X% activity. using remain transaction methodology. quality cap transact FX points A and/or locations contemplate the

due to Recent sideline to increase apartment December, ultimately cap interest cost have a cap which and a about With changed of mortgage to two this sale completed point. to rate ago. the my the entities about negotiation, the about rates. rate valuation co-investment the rates old X.X% in a capital In market rates, rates not our relative there year some cap are as comments recent one in have a meaningful investors other at and increases apartment compared but fewer most represents each XX caused motivated lower and at of higher years previous in noise properties

little legacy where project one basis. quarter, we we in started very the which Hollywood is the land the development have During

part believe our will XXXX noted, as new very over the guidance. general assumed given costs of Overall, in in not we new it to with are of which lead levels lower As stars development in next years. most recent supply our of pencil in have market, seeing slower a deals we difficult double-digit we previously become several of construction pullback our markets starts enemy growth has to Therefore, the coupled increase rent make past.

total Finally, preferred equity commitment originated press as we to release in the million. $XX $XXX bringing investments during at quarter year-end outlined the three for million our

to program bifurcate will two at million. into will parts be the going first be expect capped construction properties, $XXX part forward; under the which apartment for We

which will subject aggregate to $XXX part lower will apartment completed of an investments preferred represent cap and be second generally have The involving return a properties, will million.

deals concludes Thank are currently development will I seen are pipeline the of preferred over slowdown comments. a our turn apartment our you our for today. joining That that starts now opportunity to John. equity confirming originate call call We moderating. my to in belief

Thank you, quarter. Mike. Essex good finished the with year another

revenue NOI was year-over-year and X.X% X% growth same-store fourth quarter and respectively. Our

were year and for better the of and Our Essex are same-store occupancy for to growth to results thank I success. our and slightly evidence strong results [indiscernible]. the than expectations Company income dedication higher our due continued to another the other team in want These greater

impact for elevated than of no than we supply will due quarter conference this call, leasing market expected expiring in fourth to very XXXX, of quarter were continue revenue little month mentioned growth. growth early The XXXX job a volume negative on leases due headwind third net during we normal market peaked growth slower summer signed of as with and to peak As to our the earlier to was of increase compared to concessions fourth the quarter asset. of the California XX% different. the consistent concessions the that leases. geographically the of quarter to the related the XXXX of California Southern Northern the were approximately with Concessions the XXX,XXX with asset XXXX in were over of related quarter allocation fourth however fourth In XX% net XXXX,

concessions the competitive declining lease expected. decreased has the are up highly disappearing new new of concentration and for stabilized the in Northern California, ups lease in communities as the As

forecast. see as seasonal pattern the assumed as we XXXX our growth, we our rebound season. which Therefore, peak more part to leasing Moving quickly expect to loss-to-lease of we expect forward, is typical rent a in enter

result selected all above Regarding order California California when by and effectively price in on signed Governor Southern devastating housing limits in was of of XXXX. through the April which until October June XXXX. executive mid all as to counties California increases XXXX rent the a in signed place It XX% been for extended the for Brown has wildfires, order the of

to Although pricing the short-term premium, the such selected in are temporary law closely. that we to the rate, impact et XXXX, applied challenges expect We are that not market the that’s materially our currently the however rents of situation leads selected do increasing at application watching earnings law cetera. renovation, as now

on. X.X% initiatives our year impact helped our original We to year utility. which working guidance the Our in the X.X% year the over controllable we result points prior have were of hold came expenses about basis a the below expenses saving able offset in prior over XX of at as increase been various cost that year to full

all for of will Now, Seattle adding just in space feet. the I markets. XXXX fourth continued total in of over for Essex provide of of on our X.X% their In Amazon QX year-over-year strongest quarter and growth footprint remains the two feet million portfolio the XXX,XXX Seattle, to expansion job bringing growth square under XXXX. to an update posting expand square

of Additionally occur in totaled portfolio Microsoft and multi-billion metro net million Seattle’s dollar at X.X stock, absorption to highest San the XX.X% years and Seattle that for and new will Redmond seven Essex in any In prices fastest absorption robust. Office existing the home San of over Jose. be announced market the month it of by up grew third square continues December a space. feet to percentage renovation U.S. campus the year-over-year the expansion X.X% to only in XXXX making add surpassed five Francisco the growing medium in of

and the were X.X% side at south X.X% respectively. by by the for the revenues same-store X.X% X.X% respectively while year-over-year north CBD submarkets and of grew submarkets XXXX to and east led Our fourth

California. to Northern Turning

X.X% Francisco over tech the to signed In [indiscernible] an the the Park in new leased downtown In growth and office Green, leases For quarter, Guidewire averaged Station square is Software Mateo to first footprint. Bay year-over-year. the added Airbnb area fully half this XXX,XXX San project year. under completed feet extraordinary fourth in which scheduled job of that an be development, construction San

average. South Fremont that extended south, year-over-year where the over Bay at were with Tesla new Essex Moving for to their in perform XX% as Bay accommodate of led medium XXX,XXX area the the home footprint accounting also prices the million, units in and area national pipeline Francisco portfolio over market growth Essex to fourth office $X expanding across by they square Fremont the well during X.X%. announced to the times XX% same-store just of X,XXX than Fremont X,XXX their lease. owns which continue quarter with in Facebook the Over foot addition lease San the XX is in in employees December feet the signed square at under in revenue feet. in pre-leased. four of growth a prices XX,XXX in million with Bay XXXX already (Ph) employees WeWork more the construction half X,XXX of continues submarket the Home market. leases with [Agnostis] soar, year-over-year Bay square Bay area totaling tenants nearly office over is the to And

during Los year-over-year during down with by leases from the Apple LA growth office LA square West in Angeles, lagged fourth feet the states and Culver to several expand LA’s Moving additional quarter. all leased in U.S. in X% to leases Southern signed Facebook California, City, feet growth quarter continued we region. noteworthy square new West to companies totaling the LA. quarter in throughout co-working evidenced the downtown tech of work and these and XXX,XXX as space job the in Tesla, footprint XXX,XXX

West in Tri-City, revenues We store in the which to in is Hills for fourth of to supply, highly leading year-over-year X.X% quarter a LA new X.X% X.X% saw the CBD elevated levels of decline X.X% LA in Long Our grew market. LA. and at in concessionary X.X% Beach, Woodland due same

XXXX, growth half Almost north Looking X% a absorption of of year the noted of grew occurred in forward Orange job LA year-over-year. is in quarter to in of is fourth County, quarter, the X.X% fourth FX south improved a square XX from quarter for which basis market above. QX. the full pickup of the at our LA of fourth and roughly portfolio feet XXX,XXX X%, XXXX job point projected XX% the supply LA the and in year-over-year with In two where the thirds downtown concentrated submarkets, consistent increase submarkets located. In growth as is office West the

growth be absorption asset. availability those submarket, to XX% full Diego XX San X.X%. compared occurred downturn we Currently, X.X% over XXXX projected only in similar our total quarter the is XXXX. All at San almost to from Finally, expected the for where occupancy have lower of County coming downtown quarter, our of Diego's of year’s actually XX.X% supplies is outside year-over-year in to Diego out supply the job posted XXXX supply one and fourth San at days of is Orange is portfolio XXXX. the the in the fourth to office increase half in

for Our call the renewals overall. turn are being out sent now to Angela you Kleiman. X.X% quarter at the CFO first will I over about and Thank our

supplemental XXXX and Starting XXXX activity. by guidance Today, capital total SXX will of West focus market this the rent key John. our I year. and page demand healthy provides the overall, on outlook, supply supporting you, last Thank our sheet followed assumptions an expect year markets market balance Coast with overview market growth supply our deliveries expectations. similar our versus we of multifamily In

In LA California more California Southern Although Diego. our are major XX% region for within San and supply each pronoun; increase to differences we expect due to example, contrast, by supply Northern north noted primarily west Jose. XXXX. and in attributed our Francisco We our significantly is higher expected that San supply XX%, vendor, to decrease by to key Axiometrics has and in San

was delivered. higher made them, XXXX reconciling higher learned actually expected that all From than ours supply delays but XXXX, the XXXX of have their into Axio not with than delayed adjustment XXXX. what the addition, and was supply moved in any In we for they yet also

we we also driving Just top-down a delivery review includes state construction would and of with our delivering We bottoms-up with which our progress verify is diligence, research our own quick to due the consistent sides process. and a individual both supplier the projects. how approach approach

in Historically, U.S. to Mike earlier. our as Turning markets outperformed demand. job the commented growth

market forecast of XXXX in We to for continue X.X% expect our compared to with XXX% nationally. that front the

X%, steady. a in expect multifamily with line we long-term rent backdrop, growth remain with economic is this fundamentals which average of market Given

to X.X% guidance same rent growth revenue our market for growth NOI XXXX revenue growth, led the expect to which property We and lag of at midpoint.

half Our of expenses are be with the property management moving consistent as to revenue first second is we to reporting the more we growth compared same assumes property lower in peer XXXX, the out cities. half operating forecast the reporting. Starting highlight. year There in to expenses group of rebuild one change

our Going the This line period has conform be the to be will statement. same on FFO to to as property forward, or expense reported new reporting method. will prior no on property change management item growth income separate a expense impact restated

pleased operating planned Moving that our I’m report guidance. driving on continue record results core to long we to on bottom to FFO of line. to track the

FFO We our starts supporting expect the Other core than basis which points property NOI key of four same guidance XXXX growth. our page on to grow midpoint, X.X% expected a is assumptions press at release. XXX the higher

joint most using common at last proceed, activity. activities and the time. Turning external capital we our of to capital the investment XXXX, equity position venture combination In force a this funded attractive accessing

needs cap. As X% required and XXX total for of of funding XXXX, which development our about XXX debt maturities are our commitment, only million is only million unfunded of market

of repurchased $XXX million stock far this have we So year, common our million buyback approximately $X.X program. stock under

of market the investment manage to we most capital to continue capital of On We market Last Company’s to expendable order leverage on it’s upsize to the with $XXX growth mindful conditions billion, sheet. function planned capital thoughtfully basis. our the our our an by approach line. XXXX. and of activities of allocation be funding we and continue mutual and million month, as four $X.X been attractive cost years amended is in credit we balance current primarily which line since The over is a to increase last to increased

last XX% improved from have also today. to We XX% year our unsecured debt

XX% and maturities ample Our with horizon leverage X.X balance debt strong and EBITDA liquidity. to debt remained times and sheet the life

operator to the position. my questions. for in will starting I comments. That back concludes call solid turn financial new are the a We now year

Please be [Operator from Austin And go Thank Markets. conducting ahead. is Instructions] question-and-answer KeyBanc Wurschmidt first our question we from session. you. will At a Capital this time,

would you which What expect guidance the Mike, the your the guess year revenue driving lower you Angela decel in of imply that early you deceleration be market the pretty midpoint that fact a be given first assumes quarter sizable in XXXX? that morning. expect achieved same-store fourth deceleration significant of figure. half is Good quarter and rent year, growth will similar in in the versus the to revenue versus the I fourth to what mentioned growth XXXX Hi. the

of to what be I back a will a then follow-up. of Yes, comments had in and happened may QX would Austin. weak want to that, It signed in Burkart make low we in. little to period demand at coming period job couple obviously growth, goes led John increase XXXX, significant about which no of those a typically we supply or leases very for a year. We leases carried and

abruptly And carry a get into And and as little season XXXX, pretty compress again, in that to leasing have But therefore year. going of can how John, change do anything supply how XXXX. we anywhere those on then demand growth looks our to so we add? more into in you curve United New come leases the expect the going changes peak throughout we Year are the to the and it’s bit. jobs normal a else subject versus States, units to many

just a gain XX to XXXX, to of basis gain Mike some issue to optimistic going in and our starting basis December I lease as year put around about was forward. add We XXXX, part XXX lease was points; But Yes, is it good. will points. December feel said, a feel we in numbers Again, that, our that. this point

in little going sense, very the a bit outlook of whole, a a in more positive starting are we So, forward. is but

I into And terms growth is perspective? of what in What revenue going XXXX does a that earned from assume then guess so

X% our are the is market where are. lease the place Well below our to it in gain I’m that rents X% in below, – place means sorry, rents

XXXX your upside place means I’m reality but a trying to as in question, again, it down. yes, low But But to it, at demand rents a to seasonality so we XXXX. of in give were there you compare So answer are I’m to quoting is lower. point, December just you versus

it rents that into forward to will gain XXX lease points that’s January, XXX points As basis to lease, to what you will move improves so seasonally basis and up. happen, moves gain go

them But when solid overall revenue our in make that they peak summer growth We expected this a this XXXX is to for at Does have over sense? can expect we we have XXXX and to my stronger that really are point why the looking starting related year. point. reason

the Yes, specifically of And as the just well? upside. that And of secondly, I hoping range XXXX assumed the biggest guess a the has on appreciate and detail of or I last guidance. which Seattle, there. helpful. that’s just on focused is in some commentary market that the year was magnitude know, I was at then could provide as I you outcomes most deceleration It driving What magnitude deceleration I really surprised there your guess

in We’ve then that some last is the time to saw much end XX we demand some. and there a seasonal there had year out associated as Seattle job, can and have. most risk back Seattle jobs we the it down. mentioned for that that slowed a the at percent related supply then down the to period. highest plus certain at market as a What sense, has up of that’s peak was move in and low It is clearly

to situation, X% XXX almost of lease low pulling point down was a are gain So, out that. to and at at where moved Seattle the we then

part we Seattle has the same are we So the in down to that slowed of but demand in and but strong pickup it Seattle expect have doesn’t supply had had demand seeing we’ve down, the have mentioned market a the slowed as year, a or because past. tailwind in

time. for All right. Thanks the

you. Thank Sure.

from Our Nick is from Joseph next Please Citi. go question ahead.

I regulatory appreciate Thanks. the overview.

in that repealed the or did make additional it And the is terms that? theoretically there to of process What's referendum on are up on Just immediately does ballet and movement then Costa-Hawkins. the taxes, in specs if the ballet? you Costa-Hawkins

would gathering, qualification he this There and that here occurring qualified for process, currently Mike and whether point that month which is signature it’s at know is it issue Eudy time here on assuming not. includes go for be And Yes, spending two. another amount it a also a time, we or on industry in or The of is we’ll John which will is is Essex. fair and that be the it will sure the to control, Costa-Hawkins repeal mean rent pass is of make local want understands think requires have pretty of And or around so control governments but to rent support on and effort, does everyone different ballot passed immediately cities enacted amounted passed several strong qualified we them ordinances. I opposing I on that half last some out. the not and

Less than a quarter.

I one [indiscernible] and were know passed. Mateo, San defeated then or two

is this feel an So, proposal. we here, is and process a to about not process is the there there good oppose immediate thing, the a but here pretty effort

on pass it it [indiscernible] that if the actually anything State from or ballot, the if But is legislature it steps additional a is the tax at perspective repealed municipalities, outside their recurred state that, before or it is does repealed?

call, talked of comments Yes. to reforms about housing which I things. in produce it’s in these process requiring committee was that housing affordable They which And and involving of developers, would housing created in to related XXXX, my bills Costa-Hawkins, previously would that type effectively a did XX the QX repeal about on a not more affordable it. talked out more XXXX. in were California mind that to legislative developers Keep cities passed repeal of either XXXX repeal, or effectively so referendum, and I proposal get

for year. except get in and out of which Costa-Hawkins involved didn’t things those of XXXX, committee none either So,

behind we obviously, idea feel but would Costa-Hawkins, have legislators fully with good proposition they different support So, is value not if this of the completely repealing because the a did actions thing. it, taken pretty they mean I of

million the share what of of was average price then And Thanks. the $X buybacks?

into pricing I probably the can the in of been why. read understand Well, range, low bought numbers, has and but I some specific XXX-ish you as kind out heading we blackout, gave

were the continue a then And execute of timing do how about you scale, asset larger to to versus buybacks on think sales? you if just

I basis. our plan buyback ultimately, on neutral a the have is leverage think to

overtrading were piece and I timing our that going match it any be bit the as rate, cap and and little sales sales, other in buyback to it’s be a activities should selling we X% investment cap the do that buyback that match put a of think to so to makes exactly to close asset low stock assets very it’s have about attractive rate. guys the at of fund X% close planned when but you And asset by the we harder so

Thanks. buying taking on do assets before need or Are sell to selling risk the and you shares before execution comfortable back the later you of assets executing?

the don’t no. to assets No, We for executing. need sell

We with our it are comfortable reaching line.

ample of capacity have We there. amount

Thanks.

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

in sounds a XXXX but It XXXX you for provide supply like XXXX you’re market? the where you some XXXX, accounting be the can lot late of deliveries versus see to colors

supply again, Yes, is I John. It’s visibility about Mike and others made here. pitching have to the say problematic.

other would with sources. be confusing. information our compare and Axio the pretty of It some we So,

sympathize with of we out there. all So you

her drive bit Angela than have on different As methodology Axio. we we the comments, go little properties, on noted a

started are the but is XXXX, XXXX XX,XXX different so delivered was that end expected little a we downtown most we in there be conclusion, we to to And LA by say. them or now were LA the it’s around bit we make units is marks of had not When concerned that XXXX, let’s moved. units it about XXXX, LA, so

I moved. had Axio number a larger think much

track units, assumptions XX,XXX and very what's to units moved the which from in pretty XX,XXX confusing, different but is think they moved confusing what's because not more lot huge we trying moved and is this they and understand units a is that number, went XXXX, everyone. I a to

geography are move bigger have to X,XXX ultimately XXXX be it’s there increase LA our the portfolio. to around because reduction somewhere front having will around and left supply XXXX, will units view differences we some that’s the I pretty across go will XX% from from little to from is and to think But XXXX regional bit to units, So an about most increased X% we a supply that the the will again, but all there, a significant. units supply, significant cut XXXX numbers. said be that, variations of X% primarily understand the from challenge these units about XX,XXX by

to California? in is So, XXXX peak Southern

I in Axio it moved many example and depends what get of not the construction it’s end because how therefore don’t these what for anyone the delays again I bit XXXX XXXX XXXX because more confusion this XXXX moving in assuming XXXX and we and little into I than Well, continue, have delays the for is I a is numbers of causing beginners any obscuring on significant is significant less certainly move are picture. from know not construction these will these think expected, think units but XXXX happen than our so into substantial. be it example, case amounts think think will from and

I California of let’s of probably think peak couple but get will over peak the better is is into we think significant have and Southern leveling be in say by years will - next Southern XXXX. a of Northern California, Northern will some appears little Seattle hit in the as well. out Seattle to But supply there of the so path looks there, in depends are bit we’ve but LA that the the kind it California like I slowdown it next California couple continue years. And going over again market challenges

not then to Costa-Hawkins XXXX, part year. this mentioning is XXXX guidance have as any Why development you related are And going to you or? starts into not year, this are deliver of your that

yield construction risk up multi-year and we’ve to it somewhere back No up been rents for effect you near not costs the of going that. is going things relates what development having anywhere XX% the mainly goes that talking about and are are it to more around premium

compressing are minus today all and your just not being I risk there. X.X take rates are premium out cap and rather so lot would there development. that a So mean or range equal for development rates in plus measured unless of we and you risk acquire the is there get don’t the cap things

have unit we a a interesting he relative units not is therefore deals make these the development. need lot underwrites development the agreements And and attractive to just affordable basis even we city result, Eudy is and affordable which seeing John that significant have So the appear yields What increase as and investment every is, to of on lose to to of land recurrence money of we that decent with are the as assets. cost obviously here, deals.

Thanks color. for the

Thank you.

is question ahead. go from Nick Please UBS. from next Our Yulico

Thanks. this your yet, not talked year? about Do having sharply. and the not cap also is reasonable starting development that guess Mike rates up moved And increase more higher you rates cap but you think year? projects back to development decision shaping interests going question, it’s this making I

interest mean bit there a term a rates as longer long end as up I positive the as the think real leverage, going long Not for on good thing of as I obviously a little of curve. are But I is it’s and estate. really, short the on think lot

are And seeing the still so we range. year five mortgage in seven somewhere to X%

did estate negative a and leverage pretty So we leverage. there remember bit I And little is well. significant of as back periods time had then real a still to of when well positive

So interest it don’t causing think rates I necessarily here. problem the is it’s

You want to to up follow that?

where lease give another me give number for just here. growth like you just the economic for not that. its S-XX here market range new market forecast new question just on is rent growth. the you that’s the X% you number data When and remind that Yes, than your one at can does lease if X% growth actual to on example Seattle recent shown whole higher for look in you

could are if improves how you understand Seattle? as also on? thinking sure or new trying goes that gets whether now? And So make worse right just is it lease the year pricing you to I and in then Where explain that. about

the part to handle is first sale supplied measure we scenario rental, second a broad for for a have that is many be did of really the produce, part period how what how that that units have produce time did the and I of and many jobs does on we to those rents. S-XX mean the meant will of that. john marketplace scenario Yes, based during

saw year to correct then they a is So as happen you scenario represent going what be numbers the think last we throughout we year. midcourse can these and wrong

shortage. result supply So one the to And being two a supply relationship based pretty to as about that one. in feel California economic that is that think good feel is therefore long-term we about growth we reflected is to cover demand, will of housing what X.X% we continue and the here. to improve rent going XXXX. And on produced on the pretty typically significant good have we XXX,XXX three a jobs And is jobs

And we So for that back supply demand may do the forecast measure budgeted. to and meant the but kind market. little john what from reconcile of into the on the we we you vary to that see it's budget. not broad the what do meant of us, it’s to And marketplace a goes want to be by how be based market

you activity step points in the market it seeing. close back the our most realize second comment information but see XX market. the and me let that year-over-year we for just relatively was is are consistent, Sure think data December, that now I in right that is a Seattle basis The to year-over-year probably on seasonal

will So as and again. before, the XX% then at back peak said over up it I move down

So we the units number at they amount and having happens property up deliveries, pricing when you what push absorption with on end the tend operating to wrong you focused because slow the to management companies it pretty demand time, deliver units of supply want into down. sampling really the period a are

lease starting Seattle to we're going now. move and things that’s as Essex housing basis points gained on right a So improve occurred X.X forward But our we pretty whole see season what is will to largely for are XXX in dramatically. the as in through or there going expectations we we what again mentioned

an we that more expectations on in though even line outlook are are our guidance out our we in line have laid well optimistic revenue. they exactly for Seattle with So

So those another but it strong the has good past still in been won't as be as year.

So up new which about worry rent if leasing are could year what that the don’t growth are it seasonal to Seattle overall going and is is numbers X% below over think showing growth it market that’s sounds you are up the saying I little you this put that just more that? December and sum like from lease January,

If correct. see you the to will the starts demand pretty Absolutely, up dramatically. fixed move rent

we fourth equilibrium move supply demand quarter impact and in closer have exceptional saw pretty dramatically. things on but will as picks, was, the pricing, what the to think will the rents I an come

I I think last Again, up from we beginning year, Seattle XX%. as do. the they always about were in mean of the year

peak thing XX% and then same in in XX. the

These seasonal. saying throughout year. talk They are move are when numbers about irritable we And seasonality, what not jobs is, very the we're significantly. really

quarter demand for -- a the colder a with delivering up period the this into apartments apartments. during you of zero fourth delivering are reason, get if worse and You of jobs put that Seattle to markets end and you trickle, bunch have period,

is up of you’re concessions as pull on the a which pick to where portfolio. stabilized the and trying in ups lease So the out people landlord communities, both stabilized

way you pretty and soon and So, this job end no those is lease apartment swings or the the deliver as go concession. stabilize to up as apartment markets as rent more back period got you slows as don’t the pretty then around work, and that rental significant up of stabilize, in you deliveries move would so amount imagine, wise, pricing a to then timing the connect significantly, of certainly When to with increases.

pricing causing in are our exactly marketplace, what the driving So that’s this that of volatility when coming. we exactly was or they know visibility many market, how limits this is are what's don’t units anyone’s and the visibility coming

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

to different have see potential acquisitions, a talk potential on of today. of you preferred best options the kind you are cetera, buyback capital, Just of usage where the highlighted feelings where the you et hoping with all redevelopment investments preferred you including could kind above

hope So where best outline opportunities? see the of you could you kind

question Hi of It’s has in quarter the scenario terms price. Juan, last Mike. changed good a stock it’s and pretty rapidly over the

the completed attractive buyback, and that make we preferred we've program relative and issuing of also that, and So, liked side stock -- the stock obviously rather to sense other doesn’t obviously prices current at so we’re seeing some Angela we acquisitions us said, we equation. how common to that fund that equity as beyond you do becomes done that

the to we full rates, cap comments about of way It’s I out. interesting rates kind that’s started so, disposition swing is a it XXX play same changed almost call same the I process I because in had think here, And exact same think plan the much was and around the to year back year and was in and the going went a was somewhere one yours year had much the that's recovered that We that interest ago. that throughout XXX. stock level the think conference the

I there’s things that of fluid chance so, a be changing conditions and XXXX are And these will discussions a thoughtful way, to good those one reacting think years. again in

What’s buckets. And out new the of just kind behind drove separate of thinking? line breaking now preferred on that two the strategy What that?

that a have bit at that on the return and we too, that a least the attractive create range because that a under different X% an opportunities that. a let’s get wanted the think an lower Yes, one return a in We’ve we are in, at to that’s are construction to to an year to business fact higher from preferred to last preferred you preferred respect say a and element to deal the converted had which relative there’s think had separate trying area. also the project is risk X% programs stabilized community stabilized lower construction risk of the is under a you’re returns. seeing again properties bucket that we community. for strategy really But a that marketplace with Yes, and for that we that that we in attractive that are for in lower in you acknowledged

growth, We a transactions. rent be refinances short a development also deals bit continue of bucket may to little what be with depending to happens involved the some and upon in creates those the that of

kind major mind Would talked you terms spot about of on off a leased. two your the markets? hitting the And then of of other bit you Seattle in kind

also points Sure, that NorCal, a January, December gain and lease so points In John. basis now to December this obviously mentioned basis XX to and XXX SoCal, improved in it’s The it’s we XXX had I and basis points in to improved which was to improved was now basis a of point. is lease XXX it now. basis gain XX XXX point. 'XX, a Seattle

to the at the overall to XXX low but December are went we’ve to points Company January. things are planned. things So, XXX lease signs, right the gain in as lease point direction basis going right Again, are basis in points about from the a gain improving, numbers

next Hill from Morgan ahead. go is from Our Rich Please Stanley. question

sorry time? this previously, on Or up just sure I out comments You of are couple a that. following construction want labor. lack are Why a point of these that I you blaze costs, the Why rising make available at skilled at there’s made delivery point? pushed site, Just also shut to projects mentioned in seeing understand. getting construction this this about

Eudy. John This is

Lack short the You answer. hit labor order it of to main on of the skilled head. reason and in that is

that’s guys And a really would lot us of as then heard previously seemed a particularly, on are growth another more, the so And may this you but less How double parents two here. forward? then. It a growth, move happened than enough to job important than was of income or good you not it be job discussions then in not inflation handle more in out slowed just houses. market what a starts secondly, start you if going have that of confidence more as it’s up to I've expecting? the to And discussions don’t XXXX, about than that lot I growth time? wondering growth growth. rent And is of Remind household parts people follow-up increase been formations answer growth, when what pick great. the thinking the Okay, happen up. more income about gives to job Is people been going income about am tailwind question, What past? any it's about

questions. Great

they call, attached that volatility the what on job having do, up we room demonstrate to job are to going processes I here. don't the are or think have It schedule in crazy. good the surprised going are of growth, XX.X on job down. So And problem everyone. into out to particular handle growth. around have we anyone last handle quarter to any a about whether to going go think like on do bounces good We jobs the I don't jobs going which talked But insight to a

myself distance from that And have so, to I'll one.

look occupied I that to We the are X% wheel. interesting X% job buildings buildings just cog going going to to We think delivery or be some broader workers mentioned for the growth therefore landlords X% of forward construction overall And much at that's for I are under that indicator. interesting office X% in not an building supply at indicators. construction look the X.X% example under the growth the to growth. those the X.X% construction a in office versus the having office it's do X% stock of be X% and to mean are future to we of and by presumably

plays a supply we favor have of determine or ultimately is So in in demand terms be messy how which we that in can again all out. to whether balance we think California try it of however

a So that’s kind of job growth picture.

mechanism. is F-XX again and have We are -- see wait to going to what our planning

template some understand going et is make happen. some of you to are we because think asset of cetera require trying we So, have the about sales markets what decisions we world to live which they that and in to these to which select

amending my grew for income to. it have comments -- we change with is and mentioned point. to for what have point wage F-XX things again these that a second starting ratios It is a ultimately to and And these that totally And in us as us growth give a planning you potential very and but to income is good think us the I And expect confidence positive apartments. for those to the inflation good for good are to hit that’s are really think a the growth, are significant signs are metric. we we in key we to pretty of tailwind that income numbers that demand. is again for that XXXX. thing We it. going pretty planning personal need useful slow the numbers will So really rent us And rent to change process we subject supply and the to economic

Goldfarb go Alexander from is ahead. Sandler O'Neill. question from next Our Please

that to year for Last the Mike, think jobs. year? peak mentioned leasing just because be earlier a that last It question one, some fill pause other the and that year, guys having sounds so spots? supply give are peaked pushed end you would more quick tough you it season. of things especially, what you similar of if this What like should is a would year and normal this are supply into but this to could being up far this time finding look employers being on you year, people

good it’s to think supply pretty about the It’s and have welcome all our Alex, the jobs we people happening good call. what's a Again, I on send question. We front. idea housing buildings understand production many how try as We out of of anyone happening. year. year’s track and to in as what's to delivered the each that well each keep units walk

what don't have supply the confusion good on going thing And is the we is, any so, about side.

things. is then we rents year, on where non turn we into of remind happened as curve decelerate real QX we shape a call at the quarter at year fewer the all we job and look year drive. know ended of year up how the and this last comes basically jobs last third what had and in to said quarter. with mean our grow end last we ended firm the quarter The quarter’s which end will again, the We started third issue affecting you and type we was I that the than corner this and to which it where jobs to back Here of the everyone related the why at that of second

we that unusual could not something anticipate, there numbers. nothing in was was the think I incredibly it and

have you we had or that open whatever might tech really indicated that was there provision that that happen. If data going at companies that nothing various was look to

those so into great any specifics. again quarter don’t for the jobs inside have during like we everyone waiting so and the else And

than process help the experience us our to that you and to we what can’t lot I So adjust we’ll more is how that again mean it. world

just market, income whoever you any be second have vacant But locked can governor almost control Okay. on is, the capped governor impose price by rent the increase capping if end sense see you’d as they they or to you limits how control? be price of unit couldn’t well, decontrol did that of could would who be much that you’d so in, rent unit? eliminated would is And the the bring question a sort And do sounds like things increase. it here; few there up the election a then sort [indiscernible] next control one, on Costa-Hawkins, repeal a of almost being they invoke rent could and

are to you following respect the on road mean down I ahead up something? Alex, I Yes, mean you I now. happening do we with are way us what's think that. John, that have

which provision are it does control owner, can you just took peer it rent not orders you away in rate the requires have Costa-Hawkins rent will to away. one Just get that they took local control. return one basically see decontrol just vacancy issue. the if But if you If place, fair return did aspect Alex. that enables would protect, repeal And a the important follow-on, control a in yes, it their

measures individual be think good the November. a would an speculative have look development other act go even is that’s We pushing forward to city now. right assuming So, to that decontrol foot vacancy at could we decided does back if that choppy in organized future in control industry we there keep

So closely and better update we’ll a monitor we’ll for report you. while

go W. from is ahead. question next Robert Drew Our from Babin Please Baird.

east haven’t whole about which a lot. on questions day, talked Two we

in there curious a the quarter, those of In up if what and is markets? was sequential Alameda both big specifically Looking counties. fourth was kind anything happening Contra there, I pick Costa

few things. of combination a That’s a

call, pick out and is up which to the we As the and is thing a clearly mentioned as that clearly it with year-over-year ended the Tesla positive that I comments year’s jobs, in there there year others Alameda also movement portfolio. comp makes are ago. noted for a Facebook a on up due more easier to in that the we in a benefit last -- which in area sense vacancy There’s related the pricing,

from it’s as the really positive jobs jobs seeing those had easier high gain we’re we comp. from benefit So there there, benefit of both out combined, a a the year-over-year, out well the but that as

other on end wage extend as the And the of harder guess to to of then the I in end harder property on Okay. for what’s the growth pushing equation, the this payroll portfolio. quality, retain because environment? becoming it 'XX it seems -- and recent pertains guess guidance at level taking it’s in terms and to I there

operating way. struggle We wages, to had offsets we other have pay by hard increased we Yes, wage areas But in significantly. find our fairly been are goes working efficient it all is overall. team able rate the of to we up and somewhat more and

mentioned we areas collections. the of previously our One was asset

what labor and as not. so And collected to we’ve vendor out the reduce bidding opportunities by groups assets cost and found

that’s keep wages push under we so our the market the meet there. expenses while and to us control enabled And continue to

think sites. is last wages a doubt. the probably for were not struggle, I But staff our it our X% again up year on

of acquisition the you that guess, be about cap Acquisition of JVs just rate. in assumed current kind butter cap could I far the kind as cap transactions they potential. recent disposition with more and in the of I guidance on of That’s can exceed rates one specifically? some low and in wholly commentary seems helpful. bread disposition kind being what’s And potentially one illustrated? acquisition they're talk Xs some the or owned. guess It as average from Should have rates whether last of

on X% We be we execute we X.X% Dispositions, to are acquisitions. range how dispositions. it on in will that assuming depends the

some on give -- we and we of I pick of strategies any of have don’t one and we specific the work not recall just variety did out we’re don’t into to want some we are are best not But loans assets a one. we about. a way. And venture and That them more level because guidance be and to guidance of may at capital we put we’ll detail. You took are a working it on that on a things several contributed have that that -- the give ago entity thinking and took joint year ready it -- level and the would that that type we

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

question, walks First job, tone just shift positive the bounce and also months things sounds can can the sometimes uptick government than over did Mike that today the of and your would data there. ago more through around much you in three say it market you pretty I follow kind acknowledged volatile But of then, the it be though. and time at data and

you So, today, fair there? job you leaves besides more point else is it to you that optimistic call data the anything is and would if so, to there

it much jobs. why Today, more question. we outlines good really about optimistic really supplement XX.X and all that’s Dennis, so are of is

And essentially data I and like saw QX handle we a which That know. we was distressing unusual, comes these job didn’t a handle a produce point? trend we thinking any good is this not we have feel supply. is obviously we is need well very started mean So, and this When about have a or And discussion, that really jobs to that. good a down on on we affordability.

came December of and so lot the back strong back December over And when gives came darn at us when numbers confidence. a pretty look QX you it

that the there And first for half much is in half growth, second then, X.X% in around rent variation the how earlier midpoint? or difference versus timing well shift about as

versus in a higher to are second in Not about I somewhere half, the twos the range. the twos for low half first whole say we basis in talking XX high between the lot, similar mean XX so points to

before development one just needs to far you how then guys question. work to last as a line supply do your technical as And considered you do be be it you year competitive? big on end, When draw

our is conform out there to different because to simplify are -- assumptions conform that to we yes the trying were so and units, action. many are was there the that tried we XX -- we trying to data,

some in past comment the year on We have call conference and at point a that time.

cetera above. that think So again, difference I we focused tried and to different take senior the and is And et people other have then out that denominator. XX student on the

in I everything older entire you especially the using of calculation, the housing denominator pretty some California whacko. you out units stock so eliminate are think We I that has think smaller it’s if must get a this

trying active. do So, that anyway number have to substantially how that and Angela to said, so that’s reconcile still our again, numbers we numbers. their was are we it the conforming moved what acting And to

Our Omotayo from next Please go ahead. is Jefferies. from question Okusanya

to about same everyone the Trying to to I with taxes. 'XX? payroll back X% to for are about talking making OpEx understand OpEx to really you same-store again question other and X% store expenses increases just payroll of get on go in this kind what and big assumptions wanted to just

the site I move. our give not continue move will don’t to to up area. with numbers, and it people a going the expect for It's do I'm -- that have to payroll aggressive level but an details We

it finding are what as opportunities. relates offset is market meeting there, but and are We again we compensation the the

So job team of same also that year. did a a year And job We to this the we outstanding of to down. expenses the thing as next controllable. in fact next be The an lines did along year. very we expect happen our matter controllable expect good

elsewhere So from making at the we for our end of the market offset aggressively, rather restructure to the various finding opportunities, we day competition though call market even at people increasing adjustments level moving have things even is center to and cost. done in our and we're site market are

done for relates on a infrastructure requirement the certain it growth that amounts objectives cost sense which that to green buy moving as So, expect higher There and renewable that control certainly which we are panels the installing relate California on in that’s TV utilities. things, more harder to also area work and cost expenses. and in a but require areas of lot that the utilities accomplishing utilities control solar the that other increasing we’ve to is being sources is there energy utilities to of of other work the to done relates from

So the come down? what to that things like be I’m last curious of of can kind how are kind as just after the control that office much what look like offsets those advertising? year? it more can of expenses, Is

give to I've collections, I to I playbook months. six down in then we win-win. It's a asset it’s don’t a was to mean center, technology. of communities Well, matter interestingly asset it really asset opportunities our to to through a call that of us what restructures peer. providing But us. and there we make to we costs on doing to the back And saves their labor ultimately that vendors, are reduces away five, that again, recent all continue last leverage environment. want mentioned a can their the win-win and net find came grinding from was not package driven we to our the

go So, we amounts expect of keeping don’t maintain and a do but into want year-over-year. about again, details, to down controllable I to X% of extreme to strong hold

it, you in about California. have and little was but And this for missed I then of Northern before think OpEx of the increase if in a may do I the big the decline things and of the bit Seattle for kind don’t talk quarter in know what happened answered then, I We big kind quarter?

Well, actually, allow Angela ahead I to go with that.

it’s Seattle, budgeted. we had and it’s And driven, really there. in Yes, no expected property with what tax surprise consistent

ended So that in, the up as with line coming we planned. year coming in X.X

California Northern then to decrease? And

their closely I of timing year up at over follow look ends timing monthly course that they mean there. daily. of don’t the being Just Expenses with better looked them course We issues, the rents. are expenses, issues

that numbers change the the around future. nothing move but indicates bit, So, in a the little

is planned the say, quarter, specifically second they and and over there, when controlled going the implemented. done those third that But far something get or don’t depend we at be time. on it for going and we as have quarter repairs year the team maintenance, like it’s in the do mind really we operation what in to Yes to are as we’re focus keep

repair under have to going and that when saying we these get so distract were to maintenance leasing driven also And not focus done. by the

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

cost Phase market Great. kind And are Hollywood then things. what a Can three basis? is three, developments units. what what John Guinee was sort here. these and your at land? I units building and that XXX your I fair property you be, if land of type? One XXX,XXX of on XXX,XXX Two, your you as unit looks it fair yield John, and about like maybe guess would and guess Mike III you’re also or then talk Station what XXX,XXX market Park expecting then basis exactly for Green,

the John is high just it’s Eudy, Station expensive off meaning if all core I top you building those answer try type, that type This build. and means to to anything But tight Park peninsula Green start questions. to Francisco a with X, density is will to San of

It here If we sold legacy it is Those more rates, a about of California has XX foot up is to Mateo versus door as market that in mark numbers XX,XXX Our The XX,XXX get reaction leasing Cap Hollywood door. and a just mentioned. much to would $X around We rent driven. about door. in good and can round and it’s ops what are that days our obviously Hollywood. very much and the are is both the XXX,XXX requirement. The land over right XX% California well. right San a Mike two construction be on and it in three expect over difference Rents a we in we lot land market basis basis about to next I X.X%. mark a be the under in a basis it. at obviously XXX between both cases land it a of XXX,XXX Northern California, about door to having for we and higher just square you XX,XXX a would in have both ago. would high lower Southern there’s we’re tell them if as less and land opened Hollywood Southern up And affordable days X% versus for, California, Northern

Okay, perfect.

that saying of rate reason are Mike is development that has you is what market developing you the are land, the So X.X%? yield not is

Okay.

is happened the market, this on both on cost up. -- cases John on has production or question a land Eudy asked parking what’s is gone again, You of

to quarter land another or with on if market So the mark there’s today’s way and we two those the rebuilt half construction costs.

from question go Green next Conor is Street Advisors. Please from Wagner The ahead.

X.X% May versus or Angela X% give seem other around on us in the grew for the you be could the It fourth insight rental and X% quarter? revenue? John, some like it income

in performed combination we and than scheduled on high a on had in it. It’s and of kind right came performing that anticipated piece expected, threes range twos other better income the of than also rent once it expected. the of And the better

be… would it So,

other though? other what any and guidance? the and for may is your was so What segway as ‘XX be income anything Is expectation one-items the income there so there -- in you is

see gone correspondingly rev costs also you and our increased. mostly the up have is Yes, income it so has by utility can driven revs as

we relationship XXXX. And so, similar expect in

just there demand? done of you then that again terms Okay. headwinds other in visibility necessarily had And anything have side? we should, on is outside that XQ the the we on I in bad payback think just the like of ‘XX, debt organic income Or anything

we don’t was item XXXX. that point that see in and your to Yes, one-time recurring a

you Most if released California your cities to And some transit process one think some then comments first development Mike has around impact seems streamline ability to can I zoning subject on on allow give XX% ordinances reaction it Could they call. housing us on front, reduce of then now production or enact to that thoughts greater us that a the things regulatory cities are give chronic development? you that. be more SPXX, mass And the what spoke of more about and housing any started you maybe like the the affordable? moving sort SPAXX towards would the John in on could

It's Connor. Mike,

may many you County the to want Vision [indiscernible] over and years and experience and that. add recent Our activity through

to the that of level for XX,XXX same of deal. out at at that zero, some the northern come that When one you And you or we cost, starts housing, or with things bonuses again once that trending about what the increases mandates 'XX. they All when pressure around it X,XXX overall say. more are think effect these cost, unit being means cap had the the a of just generally point is extent, produced, the will confident these housing developer, affordable you of require rents. fewer, which the what's when are deals less are And that that have down, that is XX% more things pace more 'XX Francisco not produce not density the of increasing I has and in that. off been and to has from it additional which puts to again be as which the they gone density factors and back happening measures from these All and affect lets of probably cost increase here, for had look of penciled California actually That’s a probably going mandates affordable why think saying increasing wage San the I units prevailing which you rate. the to And cost are that cities look we in are in on construction somewhere greater of bonus number you're you economics as -- 'XX know units. these part having in

continues think pencil, these of difficult a here want and all pressure unintended to comments. which I just an and laws and there shortage cost know driving it of our my consequence have hence and is deals. to we most housing. to rules we Unfortunately, be makes up Again, California there proposition was the affordable housing deals, first and reducing development

to is assembly? AXX see get likely you to do And the

I does, think residential it high TOD talking will, but you it are -- state doesn’t it about density control. really

Yes.

many I a believe There clearly to those to to I barriers the think comment it change it are at Yes, encouragement you TOD going level Mikes to that getting to with has economics That develop TOD residential there honest been again to that be station. will. and on when get station transactions residential. you doesn’t practical don't

help make but that’s easier, So, it step it doesn't one make happen. it more to

it’s beneficiary I given part per on also most Yes, crazy going and right all because respect basically romantic probably of wife we what our the don’t the to place is really a yet, should a as they the truly I we not it’s more think The collection again, se it the activity think well pretty to it more XX general long-term arrived bury is and the any there my all there amazing, setting concern California. and the because I hour downtown downtown just that years of And confidence L.A. into transforms them which that’s with really ultimately. Essex supply one at took not city. and now. for and have really can but communities Apartment the of thing you in basically And going amount the from of the recently same think I of special that mean is downtown one visiting do now, down focus be so of of us down L.A., night construction evening

next you I better plans Wednesday? have hope you for think

Yes.

What or to direction major address more much, in some is again money? through about that that it going crisis are the in the enacting way some your Just is funding. on again after aren't specifically Prop guys to XX seems builds proposal again to landlords the to and maybe state have non-residential going commercial you like changes there tax that it repeal concern ballot concerned try housing increased come for up What funding on knowing multiyear building. you either state get maybe just a do the is follow gap seems to is now over this but kind is the of period towards property the for this overall right to California

point multifamily the is create on terms we'd pretty And ballot filed that in but that's in as role. rules. residential good process. a question clear pretty that side And a proposition it’s is. to deal, fortunately, the you out therefore was same that in There split a maintain underway case late Yes, of it the of yes, is and

we’re it’s it going And to as go, exactly time eye keeping sure goes but it where on watch an on. not we’ll and so, to we’re continue

let on ability a cities that require side, have, do property limitation, have you densely cases give into is our are things which restrict there also play this You the on earlier core the and change a development to do fair John rules mentioned and whatever that return is have and so something. and other come we to right they there

city prevailing other density your change affect requirements, in So of a the variety from could or any will items or number that which that other require zoning words wage, include could a if cost. you more of triggers include things

funding boundaries getting I’ve have bills affordable I here were So, maybe which the probably there that California produce we’ll governments going panelizing comment QX and commented the come in important process with to didn’t There up final I on want they out and with with whatever live is it the are that they we’re trying can XX whack. on September it earlier some reforms more is, I commented completely to out simple it. as that and in to the I made more were cities it of passed guess act housing are And cities Again, programs four prevent and the think call. to and issue bond other. from produce housing, just housing

that, to issue chronic pretty and with affordable we the were housing. have address California respect So those from and housing constructive were in as perspective here the we think right direction to affordable our the trying those shortage to

I So, of same that for and more of good been kind hope the has progress just we made think thing.

union it cancel issues wages. bond drop due I land the in requirements those re-price, don't issue bucket Yes, affordability of know to funding the to bills -- needed forest there in state right, to last but compared the do isn't the mean things into that and you to a most or that the the what's

cities to aren't getting know there. projects, but step So it still like streamline first you to the rezone, is economics the these seems

house, would can have the housing economics, or just concern find funding they're to means. other And be, to land state so step going either prices I the tackle some this to guess takes my going build the when and the the they through they're next try to mandate

our You we're Conor on in of what effort spending front know, right is us.

of focused Costa- have we that here down towards happens opposing Hawkins, on, efforts these of make And see -- number those we'll the proposals. put and the So things repeal worse. consequences our to on all their Again have we are issues actually we're to developer, the have a which what or almost pretty which unintended are of back is problem the burden are remaining targeting road. the yield going going compress

have and/or realize will happen, So there seen know to they passed they it. at you proposals that unintended consequence go a to then and end what's to will and come I've the and get realize I reason will believe the something of will lot going they be then don't day you and change know will of have the --

to that reason prevail we end will assume So of have the day.

Ford Karin go question My is MUFG Securities. next from from ahead. Please

Hi, sorry to drag this out.

Just a couple questions. of quick

this convertors disposition condo properties First, on year? XXXX do to any to, sell you plans to your expect

there know the the at is that before we've mean activity don’t Mike. it's commented sale this Karin, there we're California Bay in were look large properties. areas I XX% And values positive I when that that you apartment for numbers in that price opportunities XX and the total between part And out of know, on you increased to year-over-year. that California was and is there. the several I've X.X% would Hi, price were spread be cities very median in for condo at up -- were or looked there home some Area up some values.

reason on were pushing of prices call, law the tax their the lock new the part we of is for quarter, to mentioned up which the have also in deductibility trying I fourth as probably mortgage. However, in the as people

headwind that think see new So we home that into to turnaround actually ownership given we XXXX because the it'll law. going may a be tax

to on And sort that you the program. I the is on talk last little cap preferred now appears want reduce Is programs it And that a just you risk program $XXX my memory serves, down on? give about decision equity million. XXX it of to that just up million talked hitting thanks. second you If level just the you to might the question on bit? call are pushing was you're think because your your Can the Great, level. taking

program looked have We it different took it and and two realized very components. does further at we really

have we separating of the to so, it. pieces return of buildings then how the that the current are is out like are we piece would be on and piece, business that the on that equation. apartment to we attractive other the is that completed to money. Both options mostly but what essentially in question the does to compared is under we risk really to And us. construction The risk where important that should financing is return invest relative be that the And and environment decided separate both

ability, we went to as So, found submitted. them wanted attractive they both we we so have to the the improved board, and and that and program

there not million not In the we to to any terms are of can I'm completed we apartments, get the to certainly time on able XXX get there, going get soon. sure

program we the to if from the XXX saw opportunity. the increase wanted be practically we because what So I think to going or we have there plus -- ability the probably happens in range, to speaking, will million will are although minus we it see

from Please ahead. Merrill. go from our take And Juan question America will we of Sanabria last Bank

as the just sense in quarter new spreads in modeling question. Sorry you guidance? as got guys a quick embedded fourth what's a Can us in January renewal and well you give of guys the

kind this you give me of here. Let summary

going at about the we our are QX, at back in QX go renewals QX, X.X. forward So were X.X. we I'm setting If renewals to sorry, our about

leases X.X%, QX our new below the renewal. a at about down are they average little bit, so So in

or guys gains And as steady any declines in do part guidance? you of expect occupancy or 'XX

on guidance as know we can 'XX of we and major are how focused in Steady you revenue. part optimize

market So, relatively high adjustments on returns the the the as strategic make steady market is basis. optimize plan by the we will our for but and is opportunities occupancy see we market, to adjustments,

I question-and-answer closing floor the turn Mr. would the This for like back comments. session. concludes to Schall any over to

you, and everyone, operator, on thanks call. participation your Thank really the appreciate

Sorry good the for many Conference its seeing And at March. to length. Citi of a day. we you forward in look Have

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

your You disconnect at lines time. may this