Essex Property Trust (ESS) 29 Oct 182018 Q3 Earnings call transcript

Good day, and welcome to the Essex Property Trust Third Quarter 2018 Earnings Call.

As a reminder, today’s conference call is being recorded. Statements made on 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.

and would you, conference I me for earnings Burkart with like Thank and topics John I to outlook; everyone California Eudy quarter three third discuss conditions; call. update results investment will on market preliminary XXXX to Prop Kleiman Angela today: Q&A. John apartment third will welcome the the and Our and oppose comments, quarter market industry’s an on to our follow call campaign XX. here Dana. is

topic. First

third and Our a mostly of reflecting West expected, solid severe Coast. results economy quarter housing were as shortages on the

average income X% tech X% in personal San income the year-ago affordability. and in outpace growth in greater growth is experience to in job the up Job stabilized Job within market occur X.X% concessions large our the than strong to as initial in housing growth disruptions and compared and XXXX, multifamily capita for XXXX the demonstrated pricing periodic and with expectations often both across to Seattle strong is Essex which Jose. Southern growth labor to is to West nearby continued metros submarket, pricing by growth, for when portfolio. communities. tight apartment Essex rent nation. almost With across to impacting leasing lagging growth outperform often slightly market X% has California leading conditions demand rental Per continues expected continue to multiple from Coast improving a metros lease-ups We at

our growth now XXXX, in variation. strategy have due XXXX much year-over-year will the September. portfolio in are better and seasonal the nearly of conditions for XX% to year-ago positions mostly Overall, for job companies, to growth market XXXX. Consistent Burkart tech and revenue revenue in troughed XX headquartered with as which Same-store increased all which top Washington, John strong experience tech normal a remains patterns the as open compared we openings quarter, in different XX,XXX are significantly well-positioned. year-over-year from third to the is public job in discuss and As California moment, reported seasonal markets, of

skilled pushing With track wages personnel, continue employees dearth the other shortages qualified of areas. workers, of upward face to employers from to

much XXXX our to supplemental. And to ahead, Turning market Today, on better for outlook year year. our we a preliminary S-XX into outlook last of page for included have we compared the XXXX. the have visibility thus,

We also strength provide based the primary and demand growth drivers We intended begin supply the be scenario Essex housing to U.S. in the assumptions, growth based sources. third-party on these from estimate metros. that shape And U.S. S-XX is estimate key rent of job economy. a and and with we the demand growth our GDP expectation. on the job

our XXXX insight estimates. established growth As housing timing housing and supply, market to market quarterly delivery each rent relationships to create supply, we rent growth, demand, between on gain Using to apartment historical drive we expectations.

growing Unemployment respectively. expected basis and X.X% markets than declined rate the for X.X%. XXXX, growth Essex job at to XX U.S. past economy and pace of continue the is GDP U.S. X.X%, to healthy year, For the with a points

positive this has going unemployment falling years, several past contributed impact forward. job diminish will the likely to Over growth, although

impact was as conditions. of market to basis in below about estimate West XXXX. labor nation the reflecting expect we This job points the for tight Coast growth, the to outperform Essex We the again XX which September X.X% X.X%, actual growth economies at metros of job the

lag S-XX.X San X.X% of we a our demonstrate the outperforming Bottom-line, results outperformed Washington other due expected San slightly and apartment the of five Jose cumulative has to assumptions, markets on market to major expect and and to the continued Essex increasing growth Reflecting in Essex U.S. graphic metros well-positioned metros produced in growth the For importance economic the new forward. the best of of Oakland average the GDP California the metros supplemental in XXXX, XXXX page we rent past with nominal deliveries. outperformance is growth. for in the terms leadership going and are Essex in years Diego.

in Turning to XXXX. Supply

in San issue the major that apartment Oakland, notably, we factor factoring variances County, in page constructed XXXX, on some this pushed of Diego preliminary and from in X,XXX XXXX and delivery affecting flat significant apartment continued or a into shown supply, with will Thus from continues reductions supply X% into change Construction on supplemental, significant XXXX of and a and we supplemental by versus multifamily to has delays assumes the our made supply forecast of Francisco. Thus, shortages units relatively unabated. S-XX estimated the methodology timing, to notable XXXX. expect roughly S-XX apartment Los units San delivery substantial in timing in newly Orange labor supply markets. XXXX in Essex around Our Angeles a XXXX in Most apartments. of our be be the markets into XXXX multifamily and increase

there's overall number we continuing shortages the demand And West of delays the the the to exceed we little apartments construction For With continue. believe force. to reason built years, housing Coast couple and change of housing see believe on the supply, therefore, no will the labor in that will abate. being next

to Essex had faster target. the year and a net yields providing are of and to where preferred apartment cost Now, our direct therefore, to to At primarily significantly costs, investment activities a equity and construction third-party XXXX, increased turning entitlement Instead, developer challenging hope at $XXX creating in XXXX have focused we revenue equity materially to we apartment compressed, preferred significant starts. rental added the pipeline. by strong our pace for topic, and are start not This our income. operating a driven be scenario development shortages pipeline development is to a compared developers labor second we Therefore, to my construction on is being headwind escalating likely market another exceed markets. conditions. million

it will stands in will comment struggle on in hit we XXXX. to now, moment. our guidance target Angela a As

property As we it financing apartment, trading basis XXXX XX the erased to tailwind relates of increases acquisitions, X.XX% sometimes with and we to points cap as cap have now long-term flat. relatively locations buy to rate. X% see leading enjoyed Recent rates A-property to continue are of leverage to trade most to since looking sub-X positive that and have capital rates in cap higher. around generally apartment XX locations rate interest plenty exceptional property rates B-quality to comparable continue and for

continue monitor market to We topic, closely. the now California my And third onto an update will transaction XX. Prop on

a California X. As we on to are part seek of XX, we Rental broad close coalition Costa-Hawkins prior calls, to would On Prop the Act November repeal highlighted have Housing

veterans are apartment trade a by groups. unions, organizations, We pro-business variety and other joined of companies,

will lead competing cause. Altshuler. Price No-On-XX will disadvantage be reduce means in result controls appropriate shortages, greater rental produce those of executive the making We expansion which housing co-chairs, at less worse. all an I and price it's the and XX industry will a a passing think housing built. longer worthy housing bad for It especially and the which of to in around Eudy, those united of John committee problem number those of recognize have increasing units intensify types housing, believe the controls that campaign, successfully Prop with They Barry extraordinary being available will involved likely from for for the housing the its effort amid to tenancies, turn seeking limited scarcity. paying in

housing strong incentive sufficient affordable price owners controls state for stock. housing for note built. The Prop to convert condo plan supply. have of owner-occupied no housing will to called Needs process requirements and Finally, to thereby Housing funding no and to rentals shrinking Assessment economic additional a to that directs Important California XX the a the Regional apartment, single-family housing, rental subject of contains be

quote candidate, to want services, the because website housing costs with Gavin police, of create his the the gubernatorial of schools, “cities comment, this on because revenue. for et cities However, retail housing public cities services". core The to because box, incentive sales leading related perverse sales captured following generates many better, tax cetera. bigger lucrative the Newsom, build a more don't not have can tax including a issue use the

believe a As many Assessment crisis support to approach, increase today. recently housing to laws viable passed critical the better are Housing solution the that production, only Regional we the which the state Needs has

I'll we We And, more support John also the believe housing. call needed, And now affordable funding concludes California targeted my to over to is Burkart. thus, Prop X. turn That that comments.

locking in rental the of seasonally move shifting rental played It quarter. pattern good a operating rentals new in expected, and occupancy July was historical we X.X% team our points portfolio the the was XX focus occupancy as higher QX Mike. The peaking prior rates. year's that to rents allowed seasonal down on result our from strategy with following we in you, Thank quarter. out to we about while the achieved the basis market maximizing above our

down and Adjusted QX quarter a which one-time same-store item, growth our from to the X.X% the delinquency the have one-time in points for corporate prior operator, quarter collection to XX from than growth of year our revenue Overall, higher occupancy the due in related housing concessions point XXXX the been for were basis the of occupancy perspective, revenue an from XXXX, XXXX, both the results. the lower or irregular XXXX third is for the year same-store would same-store third payment QX portfolio. low and comp. XX% approximately reported created For the for a

X.X% our points us approximately X.X% September the being to market the well of X.X% versus year, this positions in XX stronger for rental to the experienced quarter in In fourth we renewals loss sent basis third approximately Our quarter. for due September, XXXX they’re which at grew lease XXXX. and out was

be fourth We store same approximately revenue expect will in growth X.X%. portfolio the the quarter

with September. have to face this XXXX, lease to XXXX slightly wage to our providing loss in in continue XXXX markets, consistent past occupancy stronger in and time, is which we several a not From we’ll and market as XXXX, years. than see in to look we we the revenue costs headwinds guidance higher perspective, is look we're our the X.X% pressure to well-positioned portfolio the -- Although, with at we related

moving to job growth continues year-over-year our the Now any by job update Seattle supported XXXX, job for to The growth, be quarter for years. the in highest an in on of strong MD Seattle market gains over XX the quarter X.X% of posting on markets. third

last of for XXXX company to third X,XXX the the little period. the Looking of the as year. market positions driver Amazon, Google side. doubled a open at continues of since of X.X to than virtual have Tech Bellevue over their and has in major process during in feet quarter for more a Amazon, space end several openings job the be market to in Redmond open is the T-Mobile Facebook square east jobs signing the listed leases office XXX million for leased rumored of the headset over and reality be in division while expansion approximately in

Revenue light store from into side With to for Seattle tools. relatively were we XX,XXX at and office concessions basis at and quarter. side quarter South assets closing in activity while this XXX,XXX third to east and the submarkets the the was XXXX, XX region in Seattle of were our quarter XXXX. XXXX submarket. of rail submarket points, in increase respectively, the across spread the largely X% leasing X.X%, in each many North an in the flat growth as expansion will and X.X% Same service Concessions in third the see east grew scheduled expect respectively, and CBD in begin increased submarkets to used

for Our end the quarter at the the market. loss of X.X% to was lease entire

activity for the expansion San Splunk Francisco; San growth the in downtown of square period office northern feet to averaged Oakland Area Bay of leases greater plans footprint the This combined Roku Row, robust years. San Santana total under is year-over-year the Bay a in while growth the an San at Silicon the million and with hire were with the Facebook and this Peninsula South up Francisco Area office Francisco feet than Concessions in and Notable past a for trailing this XXX,XXX additional quarter both X.X% closing Moving from each is Total for in job year’s XXXX. square for tool. Same-store XXX,XXX XXXX the spread funding new California. X,XXX over through include to $XX.X and and in were across added largely XXX,XXX over activity at were while employees square-foot QX Bay, square Bay third is project in prior market assets Job job Valley X.X% period. XX,XXX many feet San XX% lease two combined Amazon in peak in a leasing jobs construction the as Area. singed for billion. year-over-year square-foot with four quarter X.X% concessions PwC’s in Jose XX QX quarters down Francisco the added. over decreased combined was VC period. submarket for used leased additional leasing on XXX,XXX growth Burlington; for

of X.X%, grew at remain markets Southern for the and followed to at companies, XXX,XXX and in led XXXX San our growth basis September. the San BLS increased revenue to additional loss the in was SpaceX growth This third the presence Our third our for Oakland County Long Area Hills loss to Los for which September points year-over-year XXXX was the to and by XXXX were footprint while Angeles with X% period. by submarkets solidify trailed the XX WeWork feet submarket third and each revisions in showed continues preleasing lease with X.X%m growth. jobs by Jose the grew when combined growth to of same-store XX expanded Orange the quarter respectively, X.X%. the submarket Bay X.X% in likewise in square of in year-over-year. submarket at Hollywood, the Continuing quarter revenue flat quarter Job is X.X% led X.X% the almost growth an Fremont County, San in was lease square continued with the quarter and the was their growth averaged our at X.X% submarkets co-working the Tri-Cities similar California. LA X.X% for period. Netflix and and completed. by submarket the X.X%, year-over-year. market, basis approximately In third LA Francisco Mateo was feet which XXX,XXX X.X% up in to Rents during by points Beach third of situation X.X% our when in job quarter to Year-over-year, were West growth Woodland XXXX

lease this We job market. County will was loss September. X.X% continue in in Orange monitor to to growth

more tech quarter X.X% XXX third year-over-year of region of in at LA is Diego, expanded September. their San San than and to our square And CFO, the by related Loss in XX,XXX over quarter northern X.X%. industries Southern availability lease period. assets of X.X% in Vista remained our the was Chula concessions Finally, now XX.X% job the to California County. Worthy in hub growth Overall, with for with occupancy submarkets XX% out downtown is note XXXX. are I while impacted market the XX% XX the was from year's Thank prior in down growth Amazon San Year-over-year Diego in high-paying X.X% the supply to concessions the feet, days the about Diego have turn San grew job same-store the Currently, to in third XXXX quarter third Kleiman. you. south at will call plans portfolio of Angela by Orange add accounted market. XX% Diego tech our in workers. to and growth for that X.X%. at revenue

on with third discuss and the John. original share. midpoint guidance results, conclude you, by earnings balance full page the an Thank FFO guidance, sheet. the markets per the $X.XX of a In brief then with of core of review start I’ll year our capital update included to and X.X%, are four exceeding quarter, on reconciliation guidance release. third Details the of grew our the quarter

higher share third us is full-year. basis to the represents for Our per the our guidance original enabled growth, points our than point quarter XX favorable by X.X% at to which raise results of FFO core X.X%. This $XX.XX a $X.XX guidance year-over-year

our which funding the dispositions total the $XXX at investment, originated equity V quarter on are that and $XX.X and with to acquisitions million to two investments investments our end an plan. preferred brings of close to joint fourth million. closed Turning third track finance in plan commitments We the structure the We venture approximately quarter. million fund to Wesco $XXX new

various apartment have for Depending we through increasing full range the of development venture of and properties potential conditions. consistent is earlier for Therefore, to majority the transact buyback preferred believe on On some balance the for activities of we end Use expect remaining close include achieve the months buyout, our year. to funding stock sale, may of anticipation with could from depending This investment several Mike's dispositions thereafter. target, that the our have dispositions, by As $XXX to XXXX. and of sale will $XX up guidance in proceeds interest, needs closed the timing regarding of end range. yearend. repayment, high headwinds on stages are low of acquisitions, in on comments process the currently properties with funding, On million. debt and partner On October $XXX joint construction we early the by market our six million XXXX million equity we the funding million $XXX starts.

this will any investments the in As seek we most to new year, our order do we development. start have done with the the insurance. Consistent in guidance proceeds maximize redeploy to into total not we past, the attractive original

we pipeline development million, of unfunded our is be XXXX, our XX% to will be of of which a share are FFO preliminary in Consequently, funded next $XXX in mind means of will it per impact in pipeline, As year. existing the obligation forecast which year. to $X.XX up our relates development that potential over lease-up approach FFO our stabilization. by share completed until for $XXX most lease-ups million Keep next dilutive and anticipates

and Lastly the on sheet. markets capital balance

benefit for and of XXXX BRE capital the was timing in as repay create from rate approximately will rate be headwind share, We X.X%, bond $XXX is but rate. remain million be assumed between secured of XXXX the an transaction look minimis. current unsecured de cash to mid the which on Our X.X% the effective to per X% needs Company, XX-year an debt, $X.XX to has this depending trying conditions, Therefore, but FFO we’re will our rate $X.XX will an refinancing and on the market economic of offering to range.

However, amount our alternatives. And multiple Q&A. access of we credit. have the with at comments. strong XX% X.X balance a good with and refinancing on leverage And $X.X loan billion the remains concludes for operator flexibility I'll back to virtually availability full turn of That sheet to to times EBITDA, debt call our my

first the comes Please [Operator question of Instructions] proceed line of Our your with from Sanabria from America. question. Juan Bank

afternoon. Hi. Good

on you up ‘XX, assumed into give ‘XX, into follow to the just more consistent, been the methodology. to just said, numbers and have been, supply third details a mentioned ‘XX have like delays, you party that? up where sense ‘XX not data around providers? delivery you would you which What your wanted that of comparing pretty had Could get Just us you bit changed a to little

joining we’re trying the Mike. a vendors think It’s take at estimates procedural from the for to Juan. issues. a is It’s appreciate longer going there it. for to lot. to do me have are reconcile And I changed call. the these supply. difficult supply because Thanks exactly What look be I Hey, some

what construction submarket to constraint. conclude of of our is construction produced essentially from what ranged gone XXXX. And in in And number words, found transient. the year Essex metros. to that that and units in have And main per vary is the that the total again, we all analysis XX,XXX of XX,XXX labor can from all back forward is even though we we in labor XXXX -- have projected other to So, that our submarket, can be by to metros

get think happening done. go is construction workers the can other that construction on basically cap of some What Some LA a can there’s we from is amount to metro.

leap And each as of essentially think or is us costs years we and context our seeing going XX,XXX to those about or in to we’re was that X,XXX best the years. apartment prepared XXXX. minus, trying units -- estimate the that one into so, leads total guess the into years to next. much XXXX within pretty four consistent said remarks, plus to again year of I units, And the of to And delivered around And four units from it being from last XXXX in XXXX. at each preceding in or estimate XXXX, take how

Angela to of occupancy particularly And from this then, stuff expense But talk side, expense color could just kind think think I the is around answer. taxes, But, some as question data ticket we side. points you to you impacts about real do. who in from -- bigger ‘XX? estate a on know little about to best sorry, was trying FFO hoping give of I you’re the bit developments -- some about can like the any the on how items, gave some of

Sure.

On I with that of is CRO the pretty straight taxes, estate real to be forward. California, wildcard. continues a piece more think

we to came had come at expected XX%. say, example, around, between for XX in XX%; CRO capital in it XXXX to So,

we’re year, will. that be next to be still and right XX%, it. that it’ll be through process working now, consistent probably it’ll say, going through below, going it’s high but so, more than if And probably and you But, XX%,

So, current thing. our that’s

to, non-controllable or some that continue And of around items. one, those add were We expect to costs I range. utility largest X% think X% the

Our from proceed KeyBanc. of comes from Austin Please question. your question with the next Wurschmidt line

you’ve that being Historically, cap the talked low has you about to metrics of be supportive positive mentioned it’s cap Mike, of of sustaining one mentioned haven’t kind but moved, leverage that started you rates rates. eliminated.

of what your begin about the when look when could positive lag you you leverage? eliminating cap research the between curious, rates historically, just the tell does So, a move as result back to perhaps higher

Sure, Austin.

change quickly need overnight. new sellers cap a experience, don’t to they I adjust are time Buyers pretty sticky; think our environment. and to in rates

looking investments the think think a cap amount is of there money there keeping relatively yield I for is is that specifically. that low I looking that levels. out at enormous And forces that and rates for one of

I expect significant cap any the in term. wouldn't rates So, near in change

sellers is, some markets freeze in what of transaction a see before for will will rates buyers I not think would agreeing the change. happens period and cause you time, and that cap essentially

So, in again, play we haven't there's deals. going we much chasing seen will to so it’s quarters money because what that the forward. going guess, take several market, now I see And happens to out. for this

appreciate just is weighted there. the us heavily half I thoughts the XXXX the how of And stack can delivery half or more the back sense give year? a then, you supply it of year up, in first

think numbers. some we XXXX for There those Oakland places the some regional are significantly let’s are as the same and down in XXXX. Overall, again, variances. offsetting pretty I other say, remarks, prepared that roughly in said LA Sure. essentially as Supply then is, example, and in

right you right into know it’s to In XXXX -- so throughout. too the think quarter into outlook higher they terms details What far of going the and actually, I consistent have probably timing quarters is we a are little bit what, quarter, challenging third pretty now are of for fourth the been get to weeds. the

Southern lighter Seattle The California. California in quarters are northern and but third and in fourth heavier

to So, pretty we throughout XXXX. quarter even have quarter supply

question. question of line Our the from your Nick from comes with proceed Citigroup. next Joseph Please

shares somewhat allocation equity to But past, stock in ATM issuing given current trading capital when been nonorganic now, in price? through the about think either you’re between you fund the You’ve growth you’re two right the discount. large those active scenarios. growth, or do How repurchasing

adding environment? think So, this to how you do value about

difficult and to good in we to This is very it's that’s market. add value think a this that, and pretty Mike, do darn question,

So, investment, obviously, think going equity forward. that to on that we will on focus preferred be focus something to have we continue tried and I

at in or leaned time, co-investment point cycles, transactions. have prior joint more also, type this venture We in toward

he is However, with on interest comments. becoming Mr. development finally, here, And on they’re this, on my work well. side, follow-up make the challenging more Eudy to can as or comment rates then, up,

today We’re to enough cap to place just untrended, that’s seeing of that? And portfolio. lot mid-X in excited think cap John, just we add to to you today, on have measured rate measure rents a our low about do throughout development. anything rate don't get us so

Only that time comes power will that our we’re keeping for and change. drive the when

Yes, it will be interesting.

try conclude this And work. by learned make just some I’ve saying, fundamentally that to will so, I doesn't work don't that in business

the it’s so, in focusing when or making opportunities And don't be essentially happens, they ready on know going shape when arise, sure ready. we when and we be, sheet, that being balance pristine to are want they but to for where

focus now. I So, think that's our

underway the And then, have you mentioned lease-ups compression on the is headwind development during impact rent will and you product think an that too, that in market yields. now? due Do concessions

I concessions think development? that expecting activity one, concessionary that handle going forward, do given we're pretty consistent John, going forward. you want to

for little a at year. Yes, bit absolutely. we supply us see the coming more QX, In

to be market. across Mike sure, softer QX concessions mentioned, check more And would have in products. going to But LA, the concessions. downtown have Again, as each so, we're overall, has normal I'm are there LA our expectations going is more are market. some the of

are overall, generally same-store in company, limited there with portfolio, so, a we weeks, more weeks. order, cases concessions even are three and and with down going as in X times But be concessions isolated X will weeks, back to concessions. to often situations And back, pretty down see X our things good

question. of Capital your Our with next comes Please question the from BMO Markets. proceed from Kim John line

vote poll attention be are of favor there going about your not just as ago? to to your favor versus others? than as it feel pay working more you in you is far going And a that XX, in Proposition the passing. On wondering, the I'm polls some how months few this do a confident particular

John try this Eudy. -- I’ll is

thought are PPIC XX% last poll days pretty know. at we're to think were we right it balance cautiously spot the in change. under referring we this undecided. point the But no, deal. pretty you well. past. win we that that we ago going came polling are yes, a at that the public back the XX% a in week or see our where in be to as been messaging, you We good start time. never But to But We I can in and internal has to believe that are eight that optimistic The and the a have now, in good Polls wrong out push

and the I'm sure he on that is going add do that make that, we of and last pushing focused give hard John campaign effective. not through months. election up and this does very incredibly watched incredibly Eudy couple very ultimate one result. day again, really is he's Mr. focused to for on right have thing to to focused is And the And the been

On And of luck. year-over-year. other wondering low factors. costs capitalizing your to turnover were more X% some Best the how is maybe due or much down versus I'm of maintenance, this repairs and

capitalizing for well. really not a is turnover factor is as It's There also sure. more, it issues there is some the timing --

it I will plan the year. kick up but for all think in the original QX according to

some lower good cost to are year again to wage of we it in coming that pressures as finding offset So, relates and to opportunities we the controllables. are and our efficiencies face another create with

with the from your comes Please question Guinee question. Stifel. line from proceed next of Our John

Insurance fourth budget you there guidance, and the this year-to-date to get recognized negative. reimbursement, year the noticing news in your a you've or one-time million et you've are Angela, I old Is just maybe quarter? for but me. X.X for settlements expecting you got have but $X clarify it in legal charge the was negative a cetera,

efforts. related all our Pop to That’s XX Yes. campaign

is that will so, onetime quarter. And the fourth a And in occur charge. it

Okay.

your fourth So, guidance or quarter, million FFO in and get $X.X the to in not? that’s

guidance. It is in our

Baird. from Please from Robert proceed Babin of next Our Drew the W. question. with question line your comes

more some things move some year-over-year to PAR coming Quick before just occupancy. question favorable think end was that with get it I hoping clarify necessarily expect today, occupancy how at fourth model I quarter is season less should the mentioned into to a third at of supply on that. -- you unfavorable times? back you the was curious how the where as maybe during on could and where was Just it we quarter, in

Sure.

last at we exactly. XX points and little time year were point this XX.X, Our higher bit basis occupancy we a at this higher, point in were is about

be think little bit to last we year, a we continue year. I again be this will under --

market going you’re we our above strategy and occupancy; the favor then, achieving shifted, the started year, well to over back rent we to shifted than occupancy. market If as

mentioned have do that actually are headwind will as of I first half we So, ‘XX. continue, facing QX, we that QX continue into will the

is is occupancy a our to expectation tell. my little tough So,

will probably marketplace, going more close We supply, where are demand XX finding with right the basis mentioned, points hit we to as up QX I are low expect that’s that maybe now, the stay obviously something during But, period. like I we to and in that. or

out? year year. looks a impact in more next Is little year, as And next kind growth kind supply there? Seattle for on you I delay versus next or like this noticeable the Seattle, it this supply are guess, then, of for supply the is It go less characteristics year, spread downtown is quickly, And you construction just the on expecting of concentrated year. this multifamily that

Drew, plenty more it XX%, against out; that will will it’s another out and a is, less we Mike. concessions. phenomena the bit, your relative it more offering Hey supply Seattle large of be very second the still to a is of But multiple maybe question, decline lease-ups to have it will think in spread which around one see spread little XXXX. We competing XXXX and yes,

out to XXXX So, the us fact spreading XXXX. should that relative help it’s in

dime about on well nickel you mentioned to to some Does or XXXX And be from number of the as is prepaid contributes then, might paying maturities just that the secured maturities potentially there XXXX one provided? include next year. maturities that component more debt for Angela, dilution that down you a

very good question. a That’s

yes, so, does include it a component. And

why. million $XXX penalty; I'm sorry to the So we is debt that due in thing is the BRE in to without the of and XXXX, assumed from can't do prepay this XXXX, any XXX it because economic mean and that’s that’s right I year -- XXX acquisition,

can we about debt and optional. to total, which XXX million pay are of in of planning So, actually $XXX is

of from Trent Trujillo Our comes Scotiabank. proceed your question Please line next with the from question.

pools commentary transaction support XX how been in this, the market? or how the latest and chasing that liquidity California We’ve in are kind impacting rates and unchanged. has you appreciate are what on there’s capital what buyer seen? in multi-family been multi-family still but heard There’s broadly it but prepared for have mentioned depths thoughts healthy voter I is in your institutional product, about remarks You Prop less cap of your interest recently.

It’s it. another I have good the perfect question. I'm for not sure answer

extreme is forms for some control. market was that I November past are that in bids them the control. with transaction think sensitivities I that extreme by the hitting the that And there pushing for of in the those of market rent the the greatest the rent to Berkeley most I cities had are forms think very know reacting example, Xth. transactions

know commit it. you’ll answer to so, people before And the

I I So, in sense overall Prop marketplace in it’s somewhat areas been some that words, don’t of people showing get a the had as severe control. the XX’s outcome. wait of that forms there’s the market But the think other for impact; parts fact of less rent ultimate have

impact on think it smaller has the a I market.

to alluded you the subject most these in and speak submarkets of a that are source Can recycle, product potentially? And extreme to fund. having market rent perhaps the if type of you looking on you’re being a to perhaps are as versions the those assets control of to handful of

disposition areas growth longer-term Mike. No, and will basic the growth rank job are job -- of with try of to identify is that to weakest growth by and We a our not as the follow Again, this both same portfolio. is submarkets the longer-term to that, methodology domain on if will and result this take get will like on case-by-case Also, value. earlier unsolicited the unsolicited example of sometimes and year try basis get them that. we right we as the when act more level getting we to it a The we’re portfolio of good a we offers, them call I we growth, rent of sides necessarily. supply seems that. We and And sorry our function then a am respect -- try offers.

those program. driving say, our I’d So, forces the dispo two are of

question comes from from question. your Our with Rich Hightower of ISI. Please Evercore next line the proceed

respect driven my in I maybe to with by expenses, upwards this. of there in Xs, going been high the same fourth of answered to most think aware repairs else of? fourth John X% think on quarter quickly, have and already. I the the maintenance? But, implies should store So, guidance be that quarter. something that growth Is uptick questions we Is there

No.

it’s think what I anticipating. you’re

and run And atypical not expecting us in full expenses side, for land at the expense it’s to in quarter. for X.X% we’re high fourth year on the to so,

And conjunction so, it said Burkart there’s definitely what in and timing element as John with relates that repair with to earlier maintenance.

we impactful it? then is normal the and year third And cadence sequential quarter more occupancy the we headwind, the the the of fourth it the of and I for seasonal than Can model as third year, guess you element Is kind headwind, as be fourth progress then, half we getting the the to quarter, first impact quarterly understand quarter and a up just would of kind backing quarter us through year. the there, just help word occupancy in kind understand, next XXXX. of of next to so

Yes.

QX QX it The higher we hit You occupancy. is running significantly and greatest were exactly. in at where impact

QX. XX.X, expect were I numbers, Our And QX, occupancy XX.X, high XX.X, match January looking don’t the we at that. very to

forward through into As I’m into and QX, it’s it’s less, we QX, then get move -- sorry, we less.

right QX into point, and will QX, on As point. we right be on our probably we’re get probably

largely point. So, QX that’s occupancy. it QX to And the this related headwind and really, at is

But process, are extent the still point, more most picture. certainly planning see giving this opportunities greater but at a our reason obvious We’re we or we aggressive, big be. To you to headwinds. will budget those in be

your Our question. Scott. from Please line Janney Montgomery next question Stevenson the Rob comes from of proceed with

across are new projects targeted in your achieve condition? given that can you returns portfolio, point you and opportunity current how supply market and the for this redevelopment How significant is at comfortable cycle,

Sure.

picture, and big portfolio. of the renovating implies we over year, the XX our that X,XXX So, of neighborhood in considering are a somewhere a years, size of units lifecycle

reason So, we continue. there constantly is down are and can process would the sure we of no are that unit looking to And course a our bit, that It pretty the moves But, depending achieving comfortable turn coming in believe upon we market years. rental little are expectations. slow strength. our around making program

As to and robust that it several age, again, what, four as properties relates specifically et systems, to more are is and outlined, well. that are look continue the should do we larger doing are well. value. The asset And -- that pipeline upgrades opportunities cetera., probably there listed going we projects, asset’s for to increase have that

next couple don't I renovation see over materially changing the So, our program years.

six expected properties in what’s the then, stabilized pipeline? the development And on yield your current

range. In the mid-five

Our proceed question. next O'Neill. question Please comes with from Goldfarb from the line Alexander your of Sandler

here. questions Two

about on it did is like in for is to $X.XX or First, next $X.XX year. not way correct upwards we Angela, think drag $X.XX the from I there comments drag guys potentially growing lease-up it of that -- of on think at hear total, you of am earnings. good the always there if spoke the that about not correctly? But, Is there drag outlook sounds guys But, is for are to you looking pretty year, I the about of refinancing. other $X.XX next deliveries; from

of the thinking of are is I’m are correctly. it you it. of think What thinking same I it way thinking you

dilution And so, timing expect, are sectors in although, are to we fundamentals development as to and operating it the two team’s FFO. coming other of are relates impacting lease-up factors. And as and important common, there financing

that for you for will it sounds that we whole year flat. It like that about occupancy next level for you that dissimilar Is or next revenue-wide might year on up is supplemental too X% be X then, at to looking projections. revenue that's And page call Okay. going you general don’t -- next on year, age. like it the or in given X% this I the that providing revenues think rent rent you X.X%, revenue it or are XXXX to year, markets outlook, Essex are the X.X%. way suffice Mike, improved that on say, up level? could a where X% rents are provide isn’t if And environment sounds see growth this But, specifically be to exceed that year really fair occupancy

Alex, and to guidance a not Mike, mean conversation what just this market let into our we're forecast. me morph But is clarify going here. and we

think represents each economic for growth the market for rents S-XX, submarkets, broader in areas. will Essex what of our these in do submarket rent but So, we not these

is, where portfolio depending And the upon competitive results cetera, and marketplace different. entire that can And revenue is depending some can for our So, by it et amount. be the actual upon vary year. within our this its from again, so

up the earlier So, how the the of and be curve, down the year. line of part during It strong breaks the it's straight in the year. weaker it flat to a year, not end in growth rent tends

be could I January, leave some about point that there And And much that. at detail guidance late talk time. in I'll it it will variations be giving numbers. at February, in more so, these in in And and we’ll at early time

add, think flat. saying Alex, will said And would occupancy That's a not I just would I'm occupancy be saying. I that what headwind. you be I'm

flat. will basically will But sense? headwind and and QX Does QX with it headwind be year, the be greatest a So, the QX make for QX that overall.

Yes. your Thank clarifying S-XX. on That’s you Thank comments. helpful and you, Mike. for John

proceed of from Stanley. Please your Rich Hill question. Morgan question with next comes Our line from the

supply a which that higher the you anticipated or economic maybe anticipated Just could maybe upside both biggest that, risks away rent stay guidance. growth, forecast your think you to is from downside? But than giving Recognizing the if job -- if me. one the as the growth you of for consider want about for market and quick slower could to impacts

make I to to have now past couple of we're us. over time We frustrated supply down. of everyone like the broader seems those locked reasonable quarter-to-quarter, think has the I been And forecast at think and know I wrong over period everyone. well be we years. But, that it a with looking from sense supply pretty could

this say then and a S-XX is and I again, job is forecast the happen what's markets. And lot have would what greater will on U.S. the respect Essex the job is growth. scenario. with the It in GDP to X.X% So, our X.X% in on say I -- a the going the history is risk with side. U.S., would This we typically of begins

the do. to and the you U.S. assumptions given make as the But, can can from other they pretty time, things, what the interest and at try over change what we U.S. and any jump does geopolitical really. rising our issues know, significantly So, markets rates time all and to change

So, it scenario that strength for that the into tended U.S. Does with begins that means Essex economy and it to metros. the be sense? a down what of rolls make

IT either you have to might does. where markets greater variability think the other, That's than helpful. And upside are there you any the downside? or

think I been Seattle that challenging. Well, has always

up historically northern there and X% is last amount greater years a in several expectations variability California But, I we California, been. because it degree challenging have about versus more Seattle there. X.X% of of beat you the if in much X.X% the think over Southern our have greater, what is that outperformed with it supply look at just that produces,

you could The the wrong. typically, could be. we number So, higher the be wrong more of supply

to So, point I would Seattle.

of question line your next Goel Associates. & Zelman question. the comes Hardik with from Please from proceed Our

it time. before you delays outlook, how delays your accounting changed, adjusting are your how what you that some Could us and this was are you noted process, supply guys up, just supply? bottoms In it's insight into and those in for give you actually for

This Sure. John. is

going is we single So, at, site to perspective, every we basis. this other we we been out at and on and that's And all what a looking it's information process are process on think there. where have drive the from short obviously regular a do we happen,

and various can't to is. been where the that really we how when from So, are, going a are if where completion. building part they that they at, tell great a come in are along understand is things of And are we to to they finish, the when database have far relates look where trying the challenge issue the What’s you building going to at. you fact outside, the sites are they of to actually feel exactly

deals been is said, actually were focusing other the conversations several then we applied and we and on all really an that came look with we we how adjustments. sense are the done try made that on often the we which is so in these What asset are we average of to we at and so, have up record. basis by to missing asset extent and where how record those really have track developers And we’ve some we adjustments to track case, delays the our if by to months, And if to with the it gather right long on information people relying or side. on that -- looked

sense? as So, delay we accurate on going the the and are based we and what's equally seeing applied timing, the -- our it all on across how Does and back normal track been that make sites looking been, we board. have record, what's the drive that’s

lot a sense. of makes That

one to Let add me that. thing more

supply up that if it is in that what to has there QX and think we’ve ultimately providers when happened, some doesn’t gets you seen end QX pushed out is going to QX, the QX. I data doesn’t get with happen, in the get it that of and then, course, done to gets year. some typically of pushed QX delivered and And lump next to of

the that's John started about. So, of sort what that just process been talked

entire makes because which to start the out You being end a in with have large very ends number very number, you next confusing large doesn’t it confuses which up very then up it picture. QX delivered, -- year, a and get

that are and that accurate. something we all and more cut through create So, more trying hopefully to sustainable is

appreciate challenges. certainly helpful. really That’s the can We

you to you’re of California. and California is is Northern Just all I within this that. follow-up our How Southern around asset John, set? having What your decide drive hope, radius not to one comparability like? do

the driving, things of a mobile log do specifics, actually I out. that of team in although research a that people department have check lot database So, into, whole they a do the and they there’s

they’re entire they’re what is the driving doing actually So, MD.

picture, it. So, that on. to ways at make the supply-demand have area that according Again, don’t they’re X at here’s to asset different whole what’s it look that. out We and an we an and say, assessment understand within look in everything go we exactly to going different miles, looking at we’re and of doing people going

what and assets us we operational up, at looking individual are perspective, those that driving seeing we’re at operational asset enables that they’re research pricing of big and in XX what the strategies. from and impact a this to economic assets MDs, MD, work from whole is an units creates the assets department that from all But adjust supply picture at we’re MD, seeing in perspective, to where have better of looking understand and there’s a area. Obviously lot going therefore So, each reports the factoring in. the

That’s from all That sounds me. actually tells about good. Got really it. data. That

We talked about it.

looking for right at S-XX. free You’re on now it

comes Rich of Mizuho Anderson your Our from the Securities. line proceed question next Please question. from with

have do you Costa-Hawkins going say, even In given or B, any what thoughts do? right you repealed, not plan gets Mike, another you or Hey, words, there are now?

in We that a have operate different always plan keep we in But mind B. in XX cities California.

we urban more XX% location. core. And type you urban the in than And know, urban suburban, you our as greatest diversified more a probably mix we’re risks think. So, in are I are properties might think are around of the the somewhere actually and of

have previously So, an about safety X more in commented sort cities of portfolio. than we we think that where X,XXX And concentrations. There’s inherent only there’s I just the units.

diverse. again, And so, we’re pretty

few not we’re contingency might a about. so, target under we’re cities concerned look we any do do have And hugely most -- that at a we impacted although plan scenario, that

wouldn't we’re So, overall. I but positioned well pretty would say feeling is our say I anything, wouldn’t we do that

I home as use No am future, an in gathering, your that properties example?

other trying in eastern late, Coast eastern to of our with the that the appealing property pretty some And the competitive is we for want West of did profile whether Probably really U.S. confirm not. track like broader sure. the it's I we because but given landscape. existing metros mean, metros to is growth certain make metros job sure or of appropriate

at that, confirmatory. So, looking feel we sort about and of demand it’s the dynamics, good Coast. on supply And West based

gets where areas to just Can a related, you and urban control maps, your municipalities And reminder? follow percentage then, would some those comment in rent sort where of is just Costa-Hawkins portfolio should they And be the inclined it of certain on that repealed how perhaps condo concentrated are what as mentality. of at? is

gate, than may of one. then I Roughly Seattle in you have to to X,XXX easier are one California, years the and California. in units can. condo many In it is if is in get condo take -- map out in unlikely don't condo mapping unless you’re California order you coming get

the portfolio So, our And tend would the urban XX%. condo of map, more X,XXX they in to core. be be California of XX% to

Our the next RBC question Wes comes proceed from line Markets. with Capital Please Golladay question. of from your

for update that Has at Jose, more an particular Santa San and the delivery looking that the you years? I model was Clara large next how few that in lease job do in Square. market and impacted

to burned year, Eudy. is well-positioned on QX. a We late This after start, first that of this come aware. a lot year. open pretty Sunnyvale off market, deep it's a of probably pretty And it’s we John think you’re inventory the as And have product right the the good

convert of question, XX? back going potential to a condos the look to repeal mapping for as then, defense you would more And of the a Prop condo

units said, developing NAV between looking We metrics have conversion which units, years. last versus condo like an are always And Mike X,XXX been have we’re XX urban maps roughly of the as most we core value, apartment. on, at

make that time. the right is optionality decision there. right So, We’ll at the

proceed Advisors. comes question. question your the with John of Please Pawlowski next Our Street from from line Green

your a is only cities control. of well. understand a slowdown real comes on and this transaction pricing ballot market, rent very in as XXXX about high-risk I There Mike, volume, on comments Costa-Hawkins a on impact seeing the chance, no

are you multiyear slowdown after be X? on exactly nature having continues more any suggest November the in that cloud So, John not and everything that market and conversations transaction

Mike. It’s question. the it’s And John, we a don't honestly, know answer. good

lot in of money there, looking anytime probably there not And for away private soon. guys actually a you going pointed As out, it’s hands is it’s yield.

quality that market. guess how it we transaction the would be longer as be of given searching be as will conditions can or and apartment deals, would I obviously go I be guess, before I’m think transact dire maybe -- a much lot might wouldn't to we So, relates suggesting I speculating. to pricing remains the I as for you’re seen. money, for you. than mean, on It see you amount a

leave just I it at I will probably So, that. think

will something that. change. a And of I there from year guess believe I no think reason is They it at time take the that to generally that would like that earliest, sometime or now amount significant change to things would very overnight. be

calling market stabilizing Seattle rent X.X%, rent forecast. The seeing we’re of are suggest reports you terms your in this in Seattle, I rent pretty portfolio any been your pace have X% deceleration. for know Okay. peers and growth of acceleration you because that growth indicators economic market On from is within deceleration and you're persistent in seeing the to leading Seattle

conviction really in what the the and growth XXX acceleration market causes rent bps wondering next So, year?

start QX, with then in and quite us in And little significant, so for bit the and Seattle. see on is, heavy being QX QX side less to quarter up What a now. supply quarter bit then the and is we're seeing fourth also we fourth with, lightening a pretty that'll be tough QX

as impacted year, Last earlier last is year was low very at that S-XX, third for, We mentioned last quarter and up ‘XX, being actually we job growth by also, growth year we growth to -- now points growth projecting that doing when seeing and into points that the in This is looking we're in very market. between I that of we down on rental little job job XX job ‘XX basis that year strong, down basis the XX this we ‘XX. about benefit just talking were number. about were growth a for year our point were delay growth X.X%, job market. rent in bit high in acceleration There sorry rental we're the being to -- have ‘XX will this a and where right We're compared ‘XX in point.

will though. So, I’m employment be be noteworthy. going rent The in numbers. that that be of a year our growth middle combination better challenge. quarter to sure will this with us the it's to tough it’ll declining It little is really supply fourth get

line comes of Please question. Our the with next Tayo Okusanya your Jefferies. from question from proceed

lost have may We Tayo.

Our comes Securities. MUFG line last Karin of question the from Ford from

next the want the past growth but year know a for on make just the focused to I season. rent from earned we I understand leasing that's occupancy comps lot sure in I

were up third You growth new correct? X from in I renewals said kind leasing so, of X.X that And into and I season, at the quarter. leases were the level we’re rent X.X looking ‘XX, earned up think in Is high of is correct? that heading guess peak

bit. was XXXX was was Well, a that’s QX. pop of and us curve of part kind gave relates trying a articulate normal seasonal QX in I to the XXXX big strong comparing to that, and to pattern what a changing and that that

to pressure. face lease dry we up. to As loss go will will largely we more QX, And

from at you And in in we'll guidance and have the headwinds occupancy ‘XX, rental the -- solid not with -- but We’ll numbers about. giving when so look later market, on. talked we're ‘XX not give those the high the guidance we're you that

just signed us you XQ? lease you of what remind percentage your could in And

Yes.

but we turnover XX% signed that think is it’s my and few not overall. it’s quite had QX It’s I like meaningful QX. in right, roughly bigger and a X,XXX still the percentage, we something memory -- if leases

end Schall like session. reached we closing to of turn to Michael call have gentlemen, for the the question-and-answer and back Ladies And the remarks. would I

you for Thank week to the of at look today. in the forward for good San Francisco call. Dana. seeing on NAREIT call you, We next joining participation Thank you Convention. many Thanks your day. Have a the

conference. concludes This today's

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