Essex Property Trust (ESS) 25 Apr 192019 Q1 Earnings call transcript

Good day and welcome to the Essex Property Trust First Quarter 2019 Earnings Conference 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 get the limit we respectful question When to one of you asks and everyone’s be that time and follow-up. yourself one question-and-answer to portion, management your my introduce Mr. It is to host, now pleasure and Officer Schall, Property for Trust. President Michael Essex Chief Executive Thank you. Mr. may Schall, begin. you

conference me joining and Angela Burkart for welcome with you with John and today, Thank end to our will follow call. and us first comments will quarter earnings Kleiman Q&A.

a represent share which results primarily in year the quarter from start year-over-year to was moment. per first which Our solid March, of John through guidance, FFO Core good in X.X% a the expectations. of Market grew and start operations, with XXXX. discuss due line was our to our X.X% rent of at will up the growth $X.XX ahead midpoint was

at revenue As not rent such, we are or any changes full-year this time. our to assumptions making

an and In value indicators, midpoint and FFO to inflation growth pleased of expectations provide be experience, that are the setup share reduced a in Angela a economic Fox. from economic our as Job quarter related great our a We environment Page rates of the and several both California, feeling at lower following XXXX. our in robust the The will the for expectations economic government about underperforming Fed XXXX execution year-end appreciation. which earlier annual globally volatility, may this growth the result reductions decelerated detail the are and most of on metros chances conditions in U.S. rates Taking Essex moment. generally interest asset raising will be attractive S-XX steady to some NOI core our guidance shutdown, more broader to both on results Southern Disney market Less XXst in team. first per of by raise provide short-term good was attributable our increase the merger nationally Century and $X.XX for look pretty has the XXXX. in significant underperformance in supplemental. Essex we growth, and year, slightly tempered cost and

we large-scale job encouraged the personal and supporting growth, indicators Valley likely San continued Bay Northern office feet, Area much Under Essex both square office growth, at the in a Seattle reinvested local Several monitoring liquidity to and of are aggregate recently basis are Bay $XX a XX or representing their with expected listings, in be especially Silicon approximately and month trailing While is markets. projects level back feet in are other job invested economy. adding construction, over this of which closely healthy XX billion capital XXXX unicorns complete economy. to economic are such capital Francisco California by of Area to billion accelerating we West almost levels. stock. all record Coast-based strength from markets projects is investment, IPO in office greater existing trending into Major Venture the either for reached investment than the X our million X% in venture the Seattle square developments on continue region as income construction while

highest West driving tech The talent Coast the higher. tracking postings, Amazon's started years in high on level recently competitive continue for average over We this in over with also public all-time Seattle XX,XXX to openings increase in the several which we is reached job openings. information ago. an XX,XXX the a year Essex representing environment and XX companies largest the income the openings since past reached track for markets job job XX%

income of to growth personal at the has of rent of With capita San the the is time relevant first and income summary, the For Francisco long-term is upper over backdrop XX.X%, rates, income improved now in with which In of similar ratio for in its rent XXXX. has growth, low Each a of against XXXX. strong, the rent is a to since remain below markets all interest California innovative range, the ratio from growth to growing in average last affordability. in indicators talent of several across and desired growing grew leading suggest outpacing our expected housing. level Essex markets, per year, and the affordability Washington income higher to rental healthy Ventura Fast X% in as year country, now one average within compared demand incomes for the attract continue exception and end paying improved markets our economic to companies of top and rental ago. to example, most

we've noticeable our On on commentary update. provided last the from supply the side, seen no change quarterly

estimates on Page We development the factored of already continue delays are to see S-XX supply deliveries, in into supplemental. which

proceed data providers much development estimates that for and Essex be we that will other aware have XXXX. lowered are We higher through estimates as the believe markets delivery their

have perspective In markets changed. delay construction are supply the Overall, continue increases causing growth. new not deals yields labor cost on adjusted development that exceed our tight addition, as to for forecast rent decline XXXX

encouraged XX% future, and Page permits XXXX. quarter permits which about Residential shown of our peak bit recorded in we fallen decline both the in housing a S-XX.X from residential second single-family on by supplemental. the the recent the of Looking we have as our further include markets into in are multifamily

can't permitting decline that lead to indication The and attributable be the yields. of is returns, development consequences suspect we should certain supply which will multifamily after development compressing permits to decline lower a beginning is responding is financing good in not activity recent capital reaccelerate, lower other XXXX. we While that to the

change to B or markets, to Turning properties. seen significant cap for investment rates no the quality we've A

prior are generally not mostly do rates mentioned a quickly flows. I've in capital As of quarters, move function cap and

yield. and advantage our in disconnect quarter arbitrating and Hope, the A, for Xth by pricing. cap private back we located buy shareholders can the create the to Jose in quarter's at partner's In happy of capital seen exposure asset A property a cover differences to Jose, San cost LA rate our located One of million value opportunity accretive We discount developing an supplement. great and property the saw quarter, stock at interest be this an Class in versus and NAV. of buying public high-rise fourth this first by With Market this use nice out try long-term early our to a South to and increase at on XX is selling high-rise South heart over square of market. near we As office of to the a improvement of market in in a such, attractive Google Class between our high-quality earnings we the are in XXXX of Downtown a space took stages market feet downtown a the San One

Given our acquisition capital are pipeline. continue for opportunities preferred of we have cost improved ample last an equity actively and quarter, to we looking

to will assets process We the succeed that the underwrite us continue with have in same and helped past. diligence

housing and protections. to a many balance there moving the for to shortages regulatory rental more California address state expanding of variety as matters, the government attempt chronic with local regarding are officials parts need Lastly,

the educating markets. to housing shareholders. return at With quarter Burkart the over turn to color with rent an respect more create for continue We our will to to and of attractive I'll that, call control some on unattended helping our risk-adjusted consequences the John others while

published January. March February growth expectations XXXX are grew revenue to of continued Thank was first lease you, related over where or and Mike. The rates line grew points other our income XX period period. year's a to prior spike We XXXX, cost income. combination X.X% filming due quarter portfolio year-over-year was scheduled in exceeded rent the gas period the which preliminary basis strong prior we one-time variations started in growth to scheduled XXXX fees, X.X% for below one-time for to achieving the items our and early growth in January income, of year At XX.X% other as March utility solely income the for and the due off the approximately noted including we the March. X.X% the revenue collections Conference, rate revenue elevated same-store Citi QX, rent natural relate into in expected. Occupancy same That trend X%. break that other in year's

we to XXXX, see to items. line create in continue opportunities parking our trend XX.X% and that continue. value compared income to of up expect other more prior quarter period We the year's is first to the revenue In

Our expenses came damage January higher to related in due the the one-time storms water to costs in heavy and than snow expected, and February. from part in

Coast the winter due Additionally, to our both the by and use caused West spiked in colder rates than gas increase normal expense an weather.

related the of initiatives, were cost electricity offset to increases green declines properties. panels some XX PV including installation in the of Fortunately, our at by utility over costs

make transformation to expect to steps success was compensation trips as program while day, labor towards rental sign role which progress continue printing digital work related the first in enable focused careers growing market the implementation will and to The a we office mobile on Essex. in documents to foundational - will reducing platform at HR playing strong a our We is that quarter. the that paperless employees of objectives, our eliminate completing and

period the are weakest. driver say the such is slowed markets weakest to it's SoCal small L.A. Counties. since sample Alameda to the However, with the supply mostly although and it be appears related with down a being quarter end It's what hard as

followed our U.S. presence growth the with provide quarter X.X% year-over-year I'll fourth XXXX. major well of with a basis, continues East under Bay Amazon's Seattle growth the On the one Loss markets. square to outpace to potentially towers. by their vying East to by quarter to to The and other posting trailing Now, and X.X%. jobs Venture X.X% for with for in as the In south office improving additional side, funding Seattle and first and was potential and quarter XXX,XXX year-over-year an plans CBD respectively space Oracle of a market. update continue side the feet Dropbox X,XXX adding Amazon markets in continues to hit employment XXXX submarkets as the a March. the announcing high the growth are and sublease East Coast to capital posting Seattle Area. grow XX-year downtown X.X% of at to first X.X%, from the Bellevue. in division the Bellevue pre-leasing business Downtown, new revenues north end in of buying an construction lease pre-lease X.X% Apple of on lead move executed

Lyft, these of up Uber Office and as and such funds for to X expansion provide some will more Video certain of completed have The startups. Area capital with others liquidity in robust. far IPOs own and IPOs Postmates create IPOs from who uniforms Pinterest process. investments both Zoom has many companies So and XXXX, in tech the the employees filed Bay their been for often additional free their IPOs

kicked feet X.X LinkedIn million square in by combined the feet study and Facebook in feet Google YouTube square square increased and in Sunnyvale, of park over Park. environmental pre-leased off X.X for million office use million their revealed footprint of San mixed Bruno. use half under little for development feet plans Jose Menlo Alibaba development. a another San an currently XXX,XXX square in mixed development

and X%, at end averaging Southern Job points Our weak QX to California was Mateo respectively at for Area. was period. the the year-over-year the revision. Jose growth posted at for XX XX Angeles Francisco and growth San South, lower QX X.X%. X.X% half Oakland average followed Costa XX the and quarter our for by at Bay submarkets markets Continuing growth San Loss a led growth and on with for in revised X.X%, the Southern XXXX, San the growth points S-XX growth and only of basis employment March San at our Angeles X.X% points actually X.X%, by Los Fremont average March posting or performed year-over-year basis X.X% same-store Contra XXXX Diego, these revenue and XXX below for showed XXXX up below supplemental. Los X.X%, then employment national in year basis California and between the with In the lease estimate Orange prior the County well BLS

having impact, XX% down a One the first employment Fox during Studio was Motion that maybe which weakness Century Pictures, of what the was unclear Disney is It approximately categories the any, XXst employment. quarter. if showed local merger

of Culver just City. $X they have over that At square staffing in XXX,XXX stated achieve to WeWork, adding However, the was combined at revenue time X.X% L.A. growth their Tri-Cities headquarters in over QX Workspace X.X%, feet and synergies, in HBO square led West their of cost had Knotel billion will Year-over-year they reductions. market to and March. same as by which expanded feet. expect Woodland companies in expanded Hills the include such loss a Spaces L.A. by footprint lease X.X%. L.A. XXX,XXX at X.X% in

Although QX grew to year-over-year market we've X.X% softness in growth, growth strong, was with ended benchmark the points to year-over-year, the XX this erased the a offering at BLS related largest March Orange be Downtown market. a rent lease XX which jobs the free in weeks X may the gains basis growth lower in the exceeded L.A. in and seen lease-ups period. aggressive rates, in In employment Los South very prior that basis submarket revenue Angeles lead revisions the concessions continues January, QX lease-ups with the services. County, same posted of XXXX reduction for in QX with of In combination to year-over-year some rent. with revenues, Orange points. professional X.X% year's business On loss growth which reported North all Orange We and

at Thank occupancy over Angela of XX.X% you. out March, X.X% call turn availability, days growth our is in X.X% now and with Year-over-year the by X.X%. Currently, I XXXX. Vista and X.X% QX growth followed QX. by Oceanside was will revenues loss San lease were portfolio to at Chula to our Diego, year-over-year, submarket in is X.X% And with led X.X% Kleiman. Finally, XX in with CFO, our with for City North our job

FFO you, I'll per midpoint Burkart grew results X.XX% pleased quarter I'm on comment markets investment guidance that which the John from as revenue our one-time and John. mostly guidance by exceeding and share provide the report to earlier. to full-year an our our core resulted X.X% capital our Thank on highlighted quarter first first increase items, update briefly $X.XX and activities. of to

first in XXXX. by our a For of driven as per $X.XX midpoint core primarily to our midpoint the This of guidance for Overall, was in revised X% FFO full share guidance. capital favorable pricing year, originally the our equates is conditions more a core offering we are XX.XX. raising quarter per by the FFO to contemplated bond share better than this growth markets

fully equity of funded million investment July to investment until of on which investments lumpy we projects but preferred anticipate. new close, investments pay-off these $XX not million activity, funded a originated repayment the $XX at will Moving totaling we of during tied investments be million. a quarter to timing financing term two often result the and in comprised and can two typical or ability in preferred of years, we long-term to which developers, September. end the $XX had three obtain the of sale investment the to difficult equity in before funding Year-to-date is early redemption our The and is can

capital to activity. Turning markets

over favorable by average unsecured the $XXX capital issuing debt X%. were proceeds We dropped of advantage this tenure last has these through took basis During conditions of over the to of million as by repay our an cost quarter, XX bonds that year. of since at matured - November. April first The improved rate secured used points

be generate debt on repayments us million rate of cash annual basis. over early although additional X.X%. this allow making the debt, of which maturing the next the is year, repaid balance to $XXX for no but cash benefit, which prepayment $XXX savings consist effective million we will reason can million is with For an this $XXX rate X.X%, approximately $X $XXX of plus The on cash maturing year, the is of penalties. The million year repay plan early million to

operator back debt net balance capital our We With comments markets we'll our concludes to and the I and variety XX% in capital shape. turn continue the questions. will line of on X.X have to to leverage $X availability sources, times, to optimize monitor That the call a excellent sheet the in refinancing. access now of my EBITDA over and credit, billion of remains for

Austin [Operator Instructions] Capital Wurschmidt Please comes Our with question. first question proceed from Markets. your KeyBanc with

that had the one-time guidance, mentioned benefit. to first quarter, respect you you With a

So cadence just should same-store balance of growth the revenue through now expect we year? curious of the how the

the be here. first anticipated given and half to was The Angela quarter cadence performance it's now than there, originally that half second same. to we on had much first the they're going Hi the going same-store, about lower be

up So we're and, though just comparable. the not end changing first being our but same-store guidance revenue because quarter of more

about was bit a if softening in submarkets? this you other strength by guys talked and I is highlighted trends. LA. And Subsequent then, curious many in you being to Alameda just little some offset quarter

question Well, great this is and a is yes. John. the answer That's

other little a certainly Seattle the Bay seeing bit of bit is stronger little stronger. a are parts are Area We that and

bit So there in is balance April, more to whole little is the QX than strength of markets. a clearly a an little it there some in out the there, portfolio performed overall tech in started better bit again, perform but

with with question Please is the question. from next Nick Joseph proceed Our Citigroup.

mentioned be broad Governor push of and there for California appears control nationally affordability, specific the You to defeat markets, improving some control rent in despite your additional Newsom to continues a to supportive Prop. be rent of

capital think allocation So backdrop? positioning how current given you going do the political forward portfolio about and

was I you I a balanced than to and back think a talk discussion mean, from hard that years. bit between and is control now million which dramatic around rent has we a recognition year XX to that to that within if the that part think part and to that step last per XXX,XXX XXXX, push production of California versus the somewhere be side by per on take and there year more discussion, want that that impact and ago. And about will much housing about little XXX,XXX for it a it's because X.X homes I year the XX,XXX have campaign would guess I on that was his produce too of produce overall been trying pretty new Newsom more Governor I the

And to so protect that letter. wanted also he noted we

I balance, that is that. striking things on with and So are we focused grappling legislature of happening is the what think lot are the that

I Florida the in for or other is of We that say East and growth multifamily some the same might markets in to are bigger those seems like it Oregon best tried we've places potential interested long-term Colorado we think cities identify of Coast having or think property. the what that investing done be or issue. some markets

I a California it's focus. I I So don't pretty are this comfortable the think think so that thing, think movement broad and existing with our we geographic

preferred profile And the versus but how is them? acquisition underwrite from risk then do you this how point at about And our you more there, development recognize deal? FX underwriting the equity just think deals I or different,

We underwrite underwrite development our them much like direct deals, development deals. our we

reason on at acquisition element. strategy yields so those do end find costs let's And between take we've comfortable in is we development at to Yes, other best we construction don't focuses that in closing land front development why because between transactions we are point when are us that values is is is what beginning, with eliminated order the equity we the to spread investments and upfront say the we are trying deal trying And so, that financially step for a risk to committed and are we're oriented the the it what that look risk in because preferred purchase. in the the and words, get what to company.

we equation for company. a risk So the it's think reward better just

Scotiabank. Please Trent Our question with proceed is from next question. your with Trujillo

I Seattle. are in midpoint zoned, supply at growth in how if Seattle seen similar the despite thinking the think potential XXXX, that some continue get trends so growth quick, guidance in new your XXXX market? Real areas and about versus you they we've to looking for rate in Just some calls

to therefore might think before up going And the potential as hey, want units this as in impact really are that increase. itself. maybe as as directly impact, zoning, I several the produced up to going affordable be the to years up construction you and not be unit costs, I'll the start. on because there's and it's be density quite John But to simple can going zoning This it's more of is you and market more requirements comment and go as see Mike to there

not of it departments to say see I it's the significant a that Seattle So amount increase going would market. just in dunk in the slam developed we're

turn I it can you? over John So to

Yes, absolutely.

consistent supply with As what supply. seeing growth continues the The Seattle last is is to job overall as strong previously, I and it that the in right continued end of absorb getting we're was now absorbed is strength, year. mentioned which

are Seattle we'll but the in Does in your what well. So weaker were LA guidance a little performing stronger is see with our may performing and is maybe question? well happen certainly overall that tech answer little Seattle markets

you've does. in Thank And the rebounded has buying since your out in from touching above sure trading NAV. of it repurchase XX% I guess opportunistic theme terms on Yes, earlier been allocation, stock consensus And and you. you're capital shares. now back

you do source cited prepared that what the consider opportunities point a acquisition issuing of remarks? funds for equity your at you as in So,

that keep spread. in the investment balance the Well, cost for capital activities or of we our mind

so really And driven that. by gone it's through

& have market are, over in the broad the venture far, point look we and time, from redemptions Hope market and for we a get a or proceeds it's to or what on equity investments haven't yet issuing we'll so that had at take that our Xth so the need and issued sale been of excess the producing over divestment capital, We best by yield side have proceeds relate the to the what preferred we because joint opportunities until that that best funded dispositions possible. the via also spread whether are

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

growth push and these the out, rents, what of in for X% you coming all market above per that tech the just improving means market affordability can IPOs all cap? With ability market your to rental your housing discuss and

key the that is And Mike. question. is this John,

development years, affordability these occur key think and plus at point. start to over I you time of price push is, pipelines one delivered essentially our to been increase deliveries couple last this constraint when say peaking levels in which a ability properties I'd -- concession the several has development being is, seeing

see on is a over somewhat and but couple we huge margin, road. extent result we of down think as more force next a the years pricing So that, those changing will that go see few years not of be those in power and the we there a the to

of acquisition at your remind One Market. South and Can like led venture stake partner to the was just derive you it was On you joint or more remind It price? us us that purchase sounds if decision. your how years

their Yes, the a an life to had that coming Market was on transaction, our One end. fund South partner on

So the in asset quarter in on the tailwind that. and to by Vote. say have the choose midst wouldn't the of fourth normally timing Prop We XX was driven market of

really driven it's So by them.

And stake? it the lot purchase a price – bidders for that was of there were

the the - end us. at of ultimately sense it we of as broadly was well makes sense to level the us it several we growth purchasing makes at, of and and on own and and already the execution pricing Yes $XXX with it assets, it marketed was million because we a to certainty transact

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

right there have on you. controls subsequent putting going, caps to defeat the going for some one back of regulatory about Mike, are Prop certain the sorts or questions Two municipalities front, of been in different XX. articles first just rent

markets are guys on bit And bank a this seeing you you impact seem can a little in to doesn't your more markets? provide perspective spreading? in this? that be just localized any Or is of the more So

to question. process that Alex. we through I would there that of in some cities so the in are the the to work four time out that XX and California have Keep it's all operate different cities. really concentrations going we beginning say about we whereas in at regulations Yes, are Good take there. mind

going one pretty and it on we're within in as a municipalities rent a relates it huge isn't, change So like isn't impact this any there to control to have the diversified California company. issue

increased I of lot think there the cause regulation keep to on had a local just with evictions in do higher that's but So mind, and been important them to has of area, these cap. proposals

So, point of rents these in at example dramatic it a the a capping somewhere of minus, results. should again are on not time X%, at case we and rents impact set of plus grow have or long periods our X% Glendale over X% caps so longer-term for around at some

cautiously and so, left place a happen, might coordinated that in early that do through think we about response what challenging but but can we so speculate for various have these we're And is, and, there the optimistic. in on We've can precise working entity proposals would California and all it's so to responsible to I both may it we're housing industry be so.

is going happen. of we don't know So exactly we're the to into going to end the avoid, we trying to look what the future, at because day,

are is interest And for for range your expense same-store guidance legacy of your NOI, continuing maybe now unchanged, But NOI, left expectations higher if question Dance. , the NOI you it's on higher. on the and second at NOI look the with you your is Angela year but the then Mike the

the it's sounds it just early in the thinking sort know of about like in there that the reason the year is we you changing sort on you're - should are you with of So want don't it fact back going that or it, your too other to push just are things NOI there be to know, it a first on have otherwise NOI because range? back moved growing is your that both same-store holding NOI, performance commensurately the quarter versus, up guidance

one Tom It Market fine then to to that off block, consolidation. we on that but to rolling that because NOI have It's But make sure looks of in One South so, page. change line that a that sheet and know, partial midpoint it's that. right, a NOI, try let's is our to it and and you're consolidated guidance offsets then was really the our you is balance as terms the just there on good - like a the question you of, understand and

the basis. on And change we this a so it's nor a to end at meaningful NOI point trend a do line not and meaningful at see of change day,

So it's make that it a and there always is as you of conservatism. level of course we've sure know,

don't ahead guidance. we to that, makes try miss. certainly sense anything Having right So we that now and of numbers said move it so are get seeing to the compelling

Our Hightower from proceed Please your question. question next is with with Evercore. Rich

been you next us point over Are have you're a lot and currently. but on And up XX in So this you're able my you're guidance days tell of at XX, achieving? just question to I renewals to guess what questions out the follow April? already, the asked what sending seeing where

answer can I that.

we an is that's days to our advance. renewals send think like six in I really, out we important understand

So X.X%. QX renewals around gone have all at out of almost our them largely

but was set get they So mentioned this weaker little that realizing but also very at I again, from X.X where the that market in April, they are about the out. QX bit, opening those up point bit a negotiated may so at in about QX were strong, X.X where they were down little and that

maybe markets? that's in can helpful mean I sort quickly that aggregate, you across the three break is That and down bigger of

absolutely. Yes,

about for for and is X.X% overall SoCal have so about for X.X% that an Nortel X.X% aggregate Seattle. about So at at we

from Babin question Drew Our question. proceed Baird. Robert with Please with your W. is next

the coming supply in specific in Area. could kind deliveries in Santa your is first market performance. specifically kind Area Bay markets submarkets XQ? in into talk on, the Obviously about and you Bay on all very over coming I Question Clara. occupancy of can year I XQ San comment and terms But the place hoping this guess, you through was and achieving where development some in of the their later are of specific Mateo

a couple make just of Mike quick is this comments. Drew,

First here. a pretty they we've is are, severe had that winter

and Mateo somewhat that are, timing strongest thing, a Green back from The so And strong it's being the given first our Park office about a here effect pushed type corporate the so and perspective from mile of I is San very sub-market they in a is rain region. delays Station that's that development comment. think

John portfolio right think within I the now.

tech it think markets those still are and Milo from like well is like both a rents seems we've in concessionary perspective up well good. over well employment year-over-year, positioned, properties so that well strongest Santa seen that absolutely positioned has markets San market we and activity, and more then timing Clara that doing an the region, that so is has Yes, time are and are and Jose little X% haven't but seems that

the kind And year? as downtown through would hitting say that or XQ or is LA, far year the come then weakness into is get hit the there expecting you more in that of you mentioned so there supply on to later now this the bulk as has of we you're

in estimate -- And down in going about we're have of actually supply at continued it and almost is doesn't the LA, component to almost think the primary is that. our have year. downtown to We units increasing XX,XXX a really XXXX slow or units which about downtown deliveries bit the in I LA XXXX is for QX, the until so XXXX, - least next next XX,XXX

maybe aggressiveness guess the your that Angela, in for investment you I one preferred then would the increases redemptions given quarter. first And say

to the among other be investment be may just this might proceeds original as looking guidance more preferred You implied spread opportunities as in investments year, well? was the or do

targeted preferred sense. Good a than like because would the Mike question. of so mentioned makes always we is pipeline the earlier just lot for risk and the also return the speaking have Generally adjusted more do compelling and yield on investments, equity as to on we

at do that’s what guided, So and that. not ready that statement, to as go $XX far to we of we're a as this had million to guidance $XXX just have general we're expecting million offset primarily redemptions but between point we and because outside

to a so. at end we do that of extent very still disciplined day, process. ramp not But we so, can And the to have were underwriting we the up, certainly but

if even deals. opportunities, And a so that are it work there lot more to more to us adequately mean doesn't

that. pushing We’re

question Rob Please with Our question. with Janney. next Stevenson your proceed is from

in point in Are the growth you rent between? sort of somewhere or assets the price at seeing within between those in your versus specific any market middle that difference wise high-end are the

Downtown the in you're of other Yes the broad high-end and way. We portfolio the head with of have. geography if Downtown and supply, But challenges if no. It's not sense where talking we LA on Diego, it's in in we're as the there, head for Downtown necessarily very more finding it those rents well performs say San sense on love newer LA, areas, is, As if you're Downtown we're and Bs. Certainly, as Oakland, well. of assets And sure. again supply the competing parts the talking that are competing with portfolio, with

and assets rental terms competing So in A+ rate of there no growth? on of sort with is supply, no unless A drag

and really those wouldn't it's outside it that's large offering definitely Yes, sub-market. depends, price. the it lease-ups mean submarkets. a but are no concentrations what Yes, I those in the especially function of concessions that of really impacts No,

haven't And to development. do you guys started

XXXX? Can current process redevelopment you your you be the you projects I about thinking starting there XX parcels anything the doing in and additional land might are where think or for talk months that potential then with roughly and about so. in what's

question. Yes, That's good Rob. another

some of times direct a construction On have a We the back the development dynamic the couple small there, are over to couple that on again development rents starts. are that general or than direct cost so we find sort could a that faster side, pushing structure optimizes essentially window growing those about of year where start, costs the in of them. we talked relatively of do we're trying deals potential last

investments. again we've a so And preferred preference for had equity

begins As the earned before construction those we a else at result risks of step very that, and we're last yield. and again, decent takes a minute someone in

number preferred most investment venture would two. one a say a from sheet at variety this headwind or opportunity in joint in is the development interesting equity direct investments perspectives, given I'd be So and acquisitions either on of number balance point that behind that third time,

continue to we going cautious, as huge have inventory, to a but know. we're So land don't you be

just And their for sit and going start. wait so to back we're optimal to time

That redevelopment starts?

Sure, that. I'll answer

at are the portfolio same-store currently. would other say portfolio. We on that looking I we've programs are there's started But in in not same-store several that assets assets redevelopment the

financials, they're venture the joint acquisitions transaction. our So or newer in outlined not

find to opportunity continue we So in that. the monitor portfolio, continue to

is balancing all also making environment the watching program and regulatory work that going that constituents. We’re for to sure the

out them at of expect then, point? those you you this all equity of get any you investments, have to Are on the to of And preferred own or XX expecting repaid currently.

always Rob, but any values try more on that no an have thinks find and typically them to our is are, it therefore an he we comes Stadion refinance Having are, we not the at aggressive when said of than preferred . seat to have and option option, developer what cases know. or the worth case us option. it's we occurred get after don't we we in has sell We bought provider don't of to properties properties of and terms always and where it table have an a actually is a these that, the in time been negotiate stabilization one there's couple equity and-or we of

the of preferred like back In both be the and type way some in investments, we potential cases, chosen remaining we've ownership at in format. the of a buying the because a equity and the group have some we involved So side, equity upfront. optionality to of preferred part we're property for like

our look opportunity to try as that we set. at part So portfolio of

Zelman Please proceed your Our Hardik & question. with next with question is from Goel Associates.

term that just concentrated fees revenue you also broad-based parking details in there? about was the maybe if term a you how longer that be see in of that like ancillary runway I and whether was see markets talk initiatives the and other the longer opportunities the some whether could few could substantial through and that to ask wanted you or

in in Yes, opportunity good out they I'm the items to non-residents. line management of The our other and charging include different say, pretty income the residents recognizing of amount might thing, of now, non-residents parking see it have current item, space values amenity the to. glad right to initiatives accordingly. renting space revenue spaces line also We renting the some you out and same different we at with the looking parking light include which of do

as do some some some have we're variety There right smart unit a other line many we offsetting opportunities, and pilots cable that So now items. see are offsets of cutting working that. other items certainly are on and well

there think putting where not a at I as this, focused it. we're XXXX a items. on income As far enough have good don't that quite in on we were the things up goes, future impact magnitude going translate point the is then pretty we're results you'll see as we there, but have for of think a we'll into time few line but other a an numbers. We to update material and

development you assets opportunities there your your have in of might at maybe view that And what add of just to have deal exist have you them? looking considered units peers like sort done, across excess as your a maybe units, some of considered do follow-up have and snap-on that parking Snap-on XXX to that, portfolio kind

to looking we we're try the at foot, real the every dollars Yes, you drive most per estate way to which can. can square

the into but evaluating are position So there being units is future across we've this options very options number locations, one in always of are units, us we’re there many focused good thing to up, right always great in kinds all is the that to a again some we’re that's portfolio. real at Again, we're many, though we there's things biggest not as clear, revenue. it, is have the the happening, our on right there the to that's hard some working parking evaluating for that but as converted be what summed is it say markets optimizing and is the were is and point, we're a we and the, portfolio, optimize very as this at this that places, far some estate

question. Pawlowski your is with Street Our John with Advisors. next from Please proceed Green question

out did X.X renewals renewals follow-up in as just what as the new the a lease But in on achieved on XQ, at well quick leasing first quarter sent you and John, actually spreads you spreads?

that was Yes, enough. fair

and some. leases number we clear, is QX QX, So around information X.X new be move the to QX leases marketplace. leases kind X.X be light in into insightful which achieve in But month we that are this basically and the typically this way and to did actually XX provide will again achieved in we and

were in So the year-over-year new leases kind about on QX. X.X% light

X, have I to that control. backdrop on guess like to lens, how Bill I the what on be rent want traction. markets certainly the the would focus some see a barriers and conversation. years, regulation? I then in supply legislation in from And different, housing political to will focus non-event want your is comments regulatory XX XX I what next don't Senate supply regional And change you under to then different Governor higher Mike, markets when back the be setting probably gaining targets. guess could like

through out this makes Yes, which something Again work question is the housing of know sense things talked trying these how can greater we be what the Notably, over try that you it's what been a are through Huntington densities policy imminent if benefit to Beach lot near how will California that out has transit it and our that a SB extensively activity counter work mean and and will which is has good will go right we this I on will and this is to sued on John, ultimately I some example of who of of and before, public from figure written beginning is they that the have something are logistical expect and to lot that has we at topic. a about I as for process. roll continue process some said guys I the spend understand on XX exactly to to it. to by going they of understand way and to State to dictate time back issues. type sued

case think too tell guys of to X% suggested that I are for you I maybe a what So little early the be stock. it the unfortunately, impacts of in Seattle, think it's example, bit

office X% bit Seattle the is markets positive net probably them, and candidly, a probably impact allowing residential are housing greater given another it's be would about housing there some it construction and the that if and like Francisco office around of you construction be for -- of that and of have you in the in, additional oversupply under San given one as be the really under about amount imbalance spend in if embedded one time is because and we a of amount we coming that's to residential have, construction, supply area somewhere example could office seems different an talking that's on have would need job X% there the think that's the there those that some numbers. side, incredible you're before, I aggressive, why side on is in favor demand embedded office said producing

the what's but and happening. is, will carefully and short answer studying So of we we it stay don't know, abreast are we engaged

Our next question comes from Omotayo Jefferies. with your Okusanya with proceed Please question.

development Given bank. fairly in have still an land that limited you and interest

retail interest in curious Just doing doing under a someone would or REITs about retail get side in use what with moderate you projects, mixed development like interested on maybe densification working things that?

Hi Tayo, this is Mike.

would some We and deal the those organizations a you've strike been determine interesting to they've can transactions. have we haven't conversations those able on actually But far. though pretty I to to housing of whether are a number provide with extent trying we actually and retail worked gone say

The And your say isn't the is goes valuation at of numbers. part the looking a is will right. property what, you're yields right to there, looks elsewhere, when but it out challenges, partner the spin-off you challenges which and natural start costs at cost isn't get of I to we and two to trying the function necessarily that if what I'd synergy build the it that I'd we of high that's That's how so of over from it too a There you more retail well, that, really and a a a it's it figure us, guess can there. same much land retail a to when get the say cost happens. company. essentially and through have economics between some extent construction we're are and

complicated, but it's So it's possible.

so that Our general of enough a just cost measured need settle again cap to down a have direct premium justify today the more I that's because Xs. here development to certainty, untrended don't in rates little development. think is we risk view, high we bit

basis over been transactions basis on interesting, be find able trended acquisition that rate low have points those we transaction would transactions. if to more would XXX that maybe if found Now we, that but yes, Xs cap not again, we were represent the in of

origination you just back refinance? as kind the up may be up wanted to you longer. start end to yield the end end Angela, I go that as and for attractive redemptions with more the being you if anymore natural simply staying comments rate because just not lower Should about to also less for because program, probably up equity program preferred of outcome your not

going mind. I'm to Tayo that take from don't question if Angela, it's you Mike,

are, development for to out as think because interesting money and last we it I example, it's builders that more the in relates direct in is there been there side some cases, there the of where year merchant equity preferred get side. to sponsor of to ahead. found didn't is What more check in hit on we put to some willing it was an ride our transaction guidance range the moving additional equity into the the

And going equity go So, in costs up faster merchant the them transactions the to and the which into forward there can our to experience transactions when than are move which but hard to are that put limits rents tell compresses it's builders of not. yield. to make are and work amount it

outstanding but $XXX and are XX% So some I the for of in our headwinds probably pipeline that keep we there, stack. we there equity, are capital million would preferred about say probably mind have

It's development. not to talking of you're that just So billion billion that about big. $X.X $X

given we substantial. the I I that size is West still pretty of the So think the opportunity that Coast, think

Hill question your is Rich next proceed Please Morgan from with question. with Our Stanley.

us wondering is how any was level looks high just accounting the there if quarter? impacted on might have you maybe it thoughts at all question, if and changes. Quick maybe some during some I lease disclosure like numbers provide that

Actually thing. Sure us simple. for is

the debt is contra-revenue. been impact our bad lease in On changes, disclosing P&L side, no we've because accounting already there the on our

that balance disclosure just essentially. other new and operating new they at And so and liabilities net is item the up sheet, break only out really out -- see we far disclosures a thus you leases end will it’s the so each and

FFO on And so either. impact once again, no

but this recap pretty it the looks question, case? elevated sorry why maybe asked And like just expenses were in just before, Could quick that's Seattle. one then you been I'm

refunds. that as Seattle, QX said we On amount out was actually this really QX of to. Happy the property this trend came it's expected by disproportionate had it a it's expected, taxes and because driven that, is last we of to had going in numbers the way. sale Having year,

so either. why reason expense didn't another to revise need our And that's guidance operating we

next Please John is with from Our Stifel. with Guinee question your question. proceed

winter, mentioned you last in weather severe winter Mike an a this oxymoron? past little California. First, of Is that bit

It is. I that I know excuse. an uncomfortable felt very using as

two yes quickly. Okay, questions

some your on couple ago. construction of development that the down coming You're years home of you stretch started deals

today like work Park, you about it like bidding XXX,XXX you cetera? about look What per of products something cost the at you you're these XXX looks build et think unit cost Station do they GC if XXX,XXX. would have Folsom home If to you out

today, the I know with are Station have It's the up. that to and Phase a is good magnitude John Park me We a what we question. know Eudy is. do have Green costs I not here for don't

in it's cases? both So higher

past low-double which goes again growth, is over comment is going I single-digits, somewhere But plus-minus to I earlier down from years high couple range. back tell which can't the between, into that three percent the costs versus you it is digits say, rent made of which let's in construction

development and badly, that's the how been that's the problem side. So on

understand. No, we

on you and occupancy? yield close to initial cost these updated get any projects for as op question, leasing Second

size which We a only out least of coming are The you plan that our the year there Tom. it's range our at have know in is so past, stabilization, hasn't changed, at the mentioned yields occupancy kind usually upon in another on from development. initial rents

the our least that our Coast doing more last any looks the and kitchen in is at $XX,XXX, a bath more. pipeline? lot few who questions aren't you your about renovations it. on think And of haven't and idea in unit. things your Anything include a redevelopment like that asked then others are it But portfolio per redevelopment just the might and and into you is net-net, projects that East people $XX,XXX-$XXXXX put sup quoting This somebody question. I Overhaul that years, redevelopment

broadly Yes, again our with let me talk redevelopment program. about just

of opportunities a supplemental. are which common XXXX, lines. we're opportunities at portfolio in on There XXXX and that So the with right we now XX it as And life, called to are see out are also doing the They're units. And year studying look implies same-store the the we that's us year through look those so the acquire in care several opportunities. roughly assets specifically just major same-store units portfolio. for taking X%, in typically renovations, a then portfolio. we are right not now It's along those in not the

or they're of So it not pulled identified. out otherwise

we we others be probably few completion we'll So there are next some on right same-store but into That that out assets are be again, now opportunities we same a there's just other that, renovating the couple a are so year. suspect we and working going specifically. we that the portfolio, over But add will are just are are had right store. have, near that I coming called that now. coming the out same-store those more that more, are that portfolio. and the through current of that The outside realm. bucket will Again, assets into from start, we they starting adding

Our next Rich with proceed Anderson question your from with Please SMBC. is question.

fueled don't commercial to paying tying picture went surgery surgeons because commercial but okay food a guys. that nurse up expectations, job just just decelerating that why said you AT&T except that seen this get call sort of your if I things lobbed ever quote reason you – saying home things is kind they're sushi Cook and conference And guys the sick. by Wireless this or when the and okay a you of you know relatively off the going The commercial discussion that dinner to of growth bring you're underperforming So they pretty know good lot good. also other I for started

I here decelerate body judging thinking could reading sort curious, you really way am I'm at it things of So are your the Or you from your described that right just just over language? outset. from the

start that growth. negative this feedback. said interesting good is goal say, would good at to desired again, Well, the of locomotive Yes, the about are pretty that I year. call jobs feel our off I to that's on we're We That be an things, think a don't all. rent was, having and

disruption, the in well see will normal seem guess it so there as was doing again, the will would in and stock we market, and if that or bring things of those the inclination we so A government first seems pickup on happened shape. any like things And huge in think pretty front, appropriate job is shutdown, et would up. a back cetera lot our good I U.S. to amount to get I be it's like that economy be of be believe that quarter it hope

sure make do So we don't know job and we we're of what a you. we just know trying essentially good to with shown

view it York, called things. just always not non-event wanted I but of All second judge for this bigger complement Seattle? away - seeing meant okay or And guys, good for Seattle or that really in a you as do picture a about great QX states thing to job just New a – the is

a grow good Seattle. the within there. if they think that Amazon can't else I tech find they thing headquartered going nearby I have can all rates, to of if say for I or mean cities that incredible these ways –hey, or companies it's to these growth grow they're would are in

either out we view some have elsewhere going case elsewhere, maybe working So be and the structure our the my this that's what move than and I to how political how perspectives Seattle them to of turned marketplace to in to political going with and they're going All pursue and others. be to to going we're we successful they're challenging do, think the going local grow, similar opportunities all more in if are structure.

So it led to different decision. a

just turn lot as be a it out to would better I add well. that may for Bellevue

make East and more lot interest seeing and the are that more in does which there's getting broker more a sense. in more the side, We indications channels

that does to looking seems like Amazon Seattle and is downtown it have concentration the and in there they're supply of part think expand a have downtown they I the beneficiary acknowledged in tremendous the that. side

next with proceed with your Our Ford Karin from question Please is MUFG Securities. question.

a XXXX of tax credits New Times article them could York about an week to something impactful was the in think candidates you rent. the Do supporting propensity presidential sounds There rent? this on that on It like like courting Renner's. are few be demand and

anything demand. affordability It's double a that when continue those other affordability spill question increased production and think good because and demand helps things, you destroy housing and more things issue of with I think and all I types the pushing start that start having more to absent will

but for id the would my think it housing on the help to politicians thing. balanced to more broader than is good a are think extent hand think I I have again to is a that one earlier the by a discussion So said one have residents think appreciated a protections how past. greater that they tradeoffs I I and comments that in as healthier the and in the being to with the And a it's discussion it's need between pretty and discussion respect It's continuing evolve. incrementally level political high

money do we think IPO tipping economics? the condo all nearing with on be into Northern coming conversion California, a is point question might you second my then And

moved question price whole it's good lot. home of has and a a a the of for-sale in interesting not really past another It's the year, heck

out perfect capped on sale had of done Having So and that prices grow we in incredible, rents haven't year really we've which prices. said home for to the side ago have much. increases continued a course large gets incredibly that

conversions value when in condo year the actually compare appealing past So you of the the building. became less

versus the building condo. of the as value As an apartment a

there. So no help

Please proceed is question question. Bank your America next Shirley from with Merrill Our with Lynch. Wu of

XX,XXX from news and that. in postings coming you of Mike, remarks, further to Amazon your of mentioned they job and back in terms So around the that with have I'm operation moving

in Now, any relation demand there'll markets those, think in you you, would supplier your be those have think fundamentals asset? do you side, in especially changes on of, to

see think the Yes, pressure continual major continual are more have we seeing opportunity that some than I'll companies to of Bellevue We there, Bellevue. that benefit downtown there. Amazon Amazon we out don't changing. Seattle do will out a the demand these but of grab movements Clearly recognizing force and see expanding there's that. in other they're quality into is We're and

east So frankly bit on it's the south. a of we side portfolio, think north of most portfolio which our our little and and is outside will that benefit downtown,

we area. the the of that yes, do see So Belvieu benefit in

so at you're was January. points mentioned maintaining job one, XX growth growth, And on two. obviously That at and in you basis job

that I to partially number? that conservatism could you your in make either that that would or number you guess up originally you how that with baked is or feel So do provide down? change what And mind due comfortable to change the

Sure. volatile to pretty pretty the The and Orange year, County, as mentioned substantial revisions between benchmark begin numbers points, had basis I XX XXX San with. last LA and are in Diego benchmark And revision.

at that's we rents So, we for of but other on we that, and only we all absorption, and and in other at the space, part have sense look we focused we then on. office factors and and look number what's and to checks at triangulate look balances look It's it. make going why try

revisions was then solid came last apart It was it falling had falling apart. County showed it with Orange actually wasn't benchmark out. job growth. that and Our year belief It

this expect to don't time. the year change particular point and We in for at same we have the this thing reason expectations any

makes I nicely. I does a that weakness if market. kind together sense. We why think bit in pointed of LA, becomes do that's come that and it weakness seeing will then the item of And kind some confirming there, and jobs because rental to of market tie it a the out see little to we're

Wes Our proceed is with question. Capital Please Markets. next Golladay from RBC question your with

still heading the Is peak can update if moving the it as was just am portfolio, rate this recall, bit on case? to parts little seems into year. There I the that push you broader a for strategy to more be us season. leasing the I wondering

expect position absolutely good to try so, a bit a and again is, don't that communicate it our, be we Yes, is the April weaker. that little was again to clearly we expect We we and be year, our transparently year to basis to we over favor rates we our and the below forward. with is the to prior that And occupancy, expect about rental will be year. in started are continuing with continue that XXXX, occupancy moving strategy XX points that we are

but noise be see. it's less what As more we probably Mike going mentioned, transparent do want we in that's or to on, some

to And you -- that things do guidance? Do these set or have baked portfolio. equity preferred the those extensions, you have at going then really a repayment into looking that investment back schedule

have date. have, maturity they know they I a

have some outstanding do. can a the received we've just preferred of All change, at completion a several given Angela repayments of and equity early and with it dependent we up following moved that again, where others investment as completion for our said, them depends. lower balance upon And had potentially refinance can conditions. back construction be carried years or on

key relates there maturity we’ve but to on them, So date. - preferred of point a table yield is seat really as the at of the the maturity to investment it is equity all the

know sure but how offhand, us investment XX you don't not on maybe And can you we just have XX, if sort million have sense we any we I'm guess I XX then level. give model of repayment really the XXX level, look a should we the year should a is at, like XX, or to repayments, it breakup

a is make challenge course something you guess good of the Yes, and that's have I perspective down inherently a it headwind to - not from take thing the our road.

to maturities. will essentially trying offset program, size we're the So that the our origination so

program we a we that, is good. a huge want everything time. in do rolling because why level over that is position extent that The that reason it to a don't want I the to to good grow job of is be don't So we're that to think everything we the down

Angela, keep as is So we program? long a for to going, on typical you have can. do want comment what the we maturity as that

target. Well, you I to I mean, if think want

to So I million. program tend have term. our step is a let three-year back, me about mean, They $XXX

purposes, mind midpoint modeling Having year said for X/X guide So at somewhere we reasonable. the keep is in to that, XX. that X/X, X/X, else. every also probably

have and have want of are them if don't odd you so going roll So there you X/X numbers. be pretty because roll off whole say to offset will you'll a an off, then to

to time, I'd Ladies of and turn like Schall. host, the end the call back to the Michael gentlemen, we've reached this question-and-answer Mr. At your session.

are many and to of looking of you day. we you you. Have at us forward operator today, many on you, Thank NAREIT. joining everyone thank good to you seeing Thank for the call a

conference. today's This concludes

may participation. for thank You this at disconnect your time your and we lines you