Essex Property Trust (ESS) 8 Feb 232022 Q4 Earnings call transcript

Good day, and welcome to the Essex Property Trust Fourth Quarter 2022 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. Further information about these risks can be found on the Company's filings with the SEC.

pleasure your my Mr. now is to host, introduce It for Chief Trust. Michael and Officer Essex Schall, President Executive Property Thank you, Mr. Schall, you may begin.

Good Barb me our Angela Berry full morning, fourth quarter on touch Q&A. year for earnings to and Today, our conference is I here Kleiman Pak comments, with and follow will and Adam briefly welcome will call. I comments outperform results, rental markets Coast the that our over next and CEO expectations the West the for with XXXX transition. and why will several market transaction years. positioned on believe to conclude we upcoming are

relentless attribute positive for a core in XX.X%, a was XXXX full growth highest generated our as decade year and Overall, per of these share year We Essex X.X% increase we above year-over-year FFO levels. better pre-COVID team, the Essex year. to of results recovery improved collections and the the by of implementation our the execution for part from in markets model strong property our the Coast efficiencies West strong

were challenges despite results Our the COVID-XX associated regulations our positive achieved in markets. with

elevated drag levels will will per $X.XX Our near-term XXXX a represent impacted share estimate we delinquency, FFO delinquency. to remain our which of compared in pre-COVID on results by

of of headwinds us are believe XXXX, in the final our entering XXXX. in phase Notwithstanding we will impact these the that delinquency and behind challenges we COVID-related be

on on reaffirm driven for XXXX, assumptions economy shown the interest the S-XX rates. Page across the is consensus as we in our markets of predicated For package, X% higher market expectation rent a Essex growth by U.S. supplemental slowdown which

resiliency unemployment layoff even potential economic growth which range a reports market limited into is factors, outcomes data in announcements. a claims year. and with labor of by job solid visibility this elevated Macroeconomic the for Recent with translates highlights continued of wider-than-normal variety

the rate recent In December Essex only X.X%, outperforming both averages. preliminary for was unemployment national X.X%, job and was growth markets,

assumptions among which job shown announcements incorporated into layoff ahead, lower for forecast XXXX, signal our and S-XX. we employment softer companies outlook large openings on tech Page Looking a

of Our populated is part of lost major since to the in XXXX believe to and recovered slack out It to have early people X pandemic, the densely that those once during of lead recovered direct and us this exists. that the Essex the early say California the fully stabilizes. relates government's pandemic years that most lost over now result metros massive We of XX.X% notable relationship Essex two back I'm areas to pandemic, work. in the nearly longer pre-pandemic of challenge the eight from in layoffs the that markets leading recover a the jobs supply-demand the in jobs have It the of jobs pleased force eliminated each taken portfolio that us of primary in response XXX.X% growth housing major million alone pandemic, milestone which occurred as no to a economy the our those which has is to profile should search from the to the losses. believe now

concern daily has frequent foundation creation volatile often sector wealth that California with over involves tech paying growth. strong Seattle the and that reminders periods, yet a dominate a As slowdowns, rental the the longer nearly tech and generated is are tech in with amplified past economic The newspapers. layoffs industry of jobs top companies the of Northern reliably at

is of industries the evolve laid for innovation their new is cyclical of is ability this cycle is confident that rounds the while A occurring in of core the strength slowing. a where are reinvention, process tech prior what I groundwork today. to am

soon Instead, Growth of and iPhone, was profitable never tech emerged which cloud rapid wave of the with and Tech social XXXXs. including up and mobile then larger era and Microsoft. that next recover. and of improve products the and new recession the later setting IBM to believe for dot-com period phase on Big capping and computing the leaders XX like following more era the R&D learning e-commerce from focused would to and much PCs growth. a Then and in sector busted years and XXXXs, both Great ended Google and the a added Facebook, early for boomed and ago, the efforts semiconductor many YouTube emerged Recession, growth, machine the to of iPad back start-ups Internet Going manufacturing, Amazon,

followed as a are new markets technologies now very our the recent of and in the the in San of products despite of overwhelmingly And Brain concentrated View. with in set adoption similar have including intelligence OpenAI investors DALL·E.Consistent transformative past, Francisco such innovators you ChatGPT and AI explosive artificial in Mountain will of and many Google concerns, the

a United and rent over on in the start-ups a Coast AI long recent leaving despite in West as for headquartered the the Coast entire talent in spirit, combination search well as technical expectation for term. the funding growth of grow that States. West BC Thus, than now to And that generate a entrepreneurial it to XXX our supply broad down rest is the drives XX% the housing of we of artificial found last superior more increased financial are vastly constraints more the year, slowdown in and capital In Area poised XXXX. intelligence, Bay is

apartment markets. the to investment Turning

variable range that for rates seek an Coast continue to loans. fourth mostly last and are property materially We of compromise generate on our At debt X% high changed other and that and rates pockets cap growth buyers point, potential and West possible apartments. of quarter, their since and see yields. are in working NAV sellers rent maturing number could as per create opportunities sold not the in the expectations mid- values new interest muted we to A We to and rates for to period on quarter, sales generally seen relatively and suburban small values have to we've short-term in sales. and rate FFO markets cap volume property X this of distress owners deal indicate on It's extended property high-quality apartment subject elevated focused slower share.

assuming my correct, will for In is of Essex, given XXXth March. which my grateful taking skilled, lead like-minded you all. pending end this last full determined I focused to team. part ability be back of this behalf and conference the team the my with with as my leadership and be I'm at confidence step her on company. in is highly to math of Thank am great consecutive Angela's along for call a Company incredibly conclusion, the the opportunity retirement CEO disciplined

I many investment working I that trust of thank I community, Finally, you you years support over with have great many many enjoyed for your horizon. confident Company remain and years. so the are in the for the on and

Kleiman. the With over to Angela call turn that, I'll

your serve Thank Essex continue under we leadership remarkable. and Mike. company this of move The been evolution mentorship you, I and forward. team to for senior we'll XX-year the has as diligently grateful your are

executing the leasing tenants Essex performance from My conditions. will amidst results operating comments momentum support transforming updates today and which and exceptionally of recapturing teams included our the our operations thoughtfully strong by operational operational business quarter job, optimizing model. market addressing highly key highlights XXXX, strategy on start accomplishments our our a into and heading are productive peak had business operating initiatives. while followed hardworking with current our brief These dynamic non-paying units Great season, strategy delinquency of leasing the team. fourth

of anticipation September We in Moving to final in an occupancy-focused of strategy factors softening these in challenging quarter. on the to The late a XXXX. to elevated confluence operating related months move-outs activity. of created shifted the demand and fourth environment eviction

the and elevated by Our higher evictions. caused to turnover switch seasonal occupancy us favoring helped the weakness moderate

ago. Alameda compared Excluding approximately of that report L.A. to progress Counties, I and have one significant made to we units pleased XX% delinquent am recapturing year

fundamentals in as expectations. we line addition, start our have demand the improved with year, new In

Our net lease rates sequential have gradually on new able reduce effective concessions end basis. November, December troughed to new while we increasing from a to rates at been and of the lease January

occupancy-focused as our continue near In will turnover. to we the make strategy on progress we term, eviction-related maintain

at expectations. positioned exceeds increase Our XX.X% financial well portfolio demand to sits are our if occupancy healthy we today, and a rents

initiatives. Turning to key operations

X% to pressures. combine only model. Phase administrative into increase efficiency collections X can benefit and make properties which seen operating with inflationary unit. anticipate financial year. with X.X% XXXX, is which be complete, only nearby centralized leasing And property our functions, growth in We despite now continue of results our a The expense onecentrally for progress we managed business administrative last

we will is Phase X rollout. The savings churn progressing including from additional well expect on principles maintenance midyear. details maintenance unit expected in contracts operating function.We conclude expands the vendor efficiencies. is numerous and to point, in reduction that benefits, At to third-party pilot the the collections provide same

excellent we the of progress, the most recently make software. on continue management Lastly, front, technology proprietary with launch revenue to our

this past developing markets. a been have capability in the for strategy and are the our platform an tailored operating pricing integrated We for and with excited two over nuances years

will to turn over the remarks, now This my and Pak. call I concludes Barb

focus on Thanks, guidance, XXXX followed Today, and comments investments on our the sheet. Angela. I will by balance

will is timing we midpoint to our guidance higher than evictions basis. offset The on assumes due by be at occupancy stable delinquency of X% top Overall, line XXXX same-property the XX growth believe cash of of delinquency. reason expect Our to and around in basis of a growth higher XXXX all points markets. the revenue partially uncertainty healthy we be

same-store In way in on received Emergency a $XX receive as Rental million last basis. of expect Assistance addition, the not we we do to much to year compared

a As historical of above it increase. forecasting There the X% midpoint, run rate. operating we for at couple is a are the higher-than-expected relates are increase reasons expenses, to which our

inflation rollout First, model is by by via last costs, year. our savings controllable increase X%, eviction-related of and driven forecasted we elevated achieved which the to wage offset partially property are expenses collections

utilities elevated In within same-property experiencing Second, are [X.X%] the cost pressures of at total, midpoint. NOI expect we we growth insurance. and

expense X.X% these structured on core growth income, total, equate to per modest and a outlined X% The interest In assumes basis. of nearly growth. increase share terms the reduction earnings of year-over-year release.In our reasons representing include $X.XX which higher a lower midpoint on items a delinquency the X primary are to FFO, finance Page and headwind, for

investments. Turning to

today our to the we between capital, public challenging not of pricing. accretion cost disconnect acquisitions private given is significant investment for it new as difficult specific generate environment the and estimates and elevated have market Given provided

track discipline funding match time, going our FFO per environments, and ways to finding leverage-neutral maintain all through of will share disconnect, buybacks XXXX. have be create investments in equity best noted value and Given this It we completed which of sales we preferred on way all the forward, investments record we via a NAV basis. same today in at to share the long create that and that is while or asset should a

relates metrics. as it the confirmed of comprehensive the wide As during review sensitivity analysis is portfolio analysis on performing completed investments, Oakland a within quarter, located The expected both portfolio, our finance we of to of performing structured a investments a of the the exception two submarket. range the with key variety

$X quarter, of fourth the investments was resulting in in the One redeemed a impairment. million

the elevated concessionary environment. other given uncertainty fundamentals For deliveries, conservative high to around leading due apartment the approach a took we an which Oakland is investment, in to

on As result, accruing stopped resulting XXXX guidance. fourth to this investment quarter, a reduction $X.XX during in the our a we

structured Overall, we have finance successful in investing track of investments. long a record

$XXX finance invested redeemed, shareholders. have average annual Over achieving have that XX% been XX million we a for years, approximately return investments structured our the in fully past

sheet. balance the to on Lastly,

in returning and X.Xx, with in development the quarter, remains XXXX, maturing strong levels sheet we needs credit debt-to-EBITDA ample balance a our on balance our healthy at a metrics consolidated debt During limited funding improvement continued until pre-COVID position. no a with liquidity, saw to sheet our net

I questions. will back the the now turn operator to for call

[Operator with Instructions] from Our Nick first of the line question Citi. comes Joseph

Belt Sun of congratulations Mike, benefit any in and and to of there. I or Coast and you seen I cycle what the But for kind the gives newer we've versus First given like appreciate Mike markets job comments the more of the comfort future the in West all, thoughts markets recovery again, tech on will the Angela. that recovery, the there? guess, maybe we've seen accrue tech some markets tech past that population growth trends the or mostly eventual

appreciate I it. Well, for congratulations. thank the you

I in growing of think share of is overall employment terms its tech base. just the

people that United exclude technology think certainly past, most grow So really Sun tech the driving But of located that the they throughout the be to will and the the I on the as States expect Belt. here wouldn't as Coast. the are with cutting-edge have West in been and past we innovation

itself of description over And really reinvent because seen comfort. would is And that we've relatively So over of at deal many again. tech went long times that gives being through hard to and anywhere end. done of that career that, here a it great has I my us what time I so a because believing an have that and close

And guess businesses I that to -- is AI and pretty and add -- prospects almost any I the to of application the extraordinary. cetera. finally, from consumers, would et importance every

So And the think the that right of is I I be West here to that this in continue on Coast. think center onward. going innovation we'll

Yes. AI then guess I is structured pretty innovation exciting. questions. on the program, just And two finance

that performing then one, the Can terms expected. could are play number you how not an like you're you're out on Just become issues? everything there? income. across watch going in maybe potentially your there other Oakland sounds walk forward list that and in it -- the the are potentially But for any everything asset accruing in or role analysis And of as through all could

comprehensive of cap and prior the Barb. Yes, grown when that in in since on higher, And we started were we this Nick.It's Hi, the list. portfolio, rates XXXX did don't Keep portfolio. any the significantly mind, we review. other has NOI are heavily we leaned-in have a watch on rest assets

properties And so screened capital on the other none of stack. the high

Oakland the is effective now. rents right a underwrote of function high environment The one concessionary Net are in NOI lower we lower, how than it. is really

we're be. the than so stack what And to we'd in like higher

So to took accruing. that's why approach a we conservative stop

checks rating needed. engaged with dialogue constant in participating have sponsor they're our as and very We the

don't see we fall from any so out this time that at other asset. And

the line next Anthony from comes of with Our question Paolone JPMorgan.

wishes add Mike, my and well as you, And you. Thank to congrats well.

I all where have today? the about you just fall? sit been last think, announced free not rent, is feel or of you seen Seattle, And since the question numbers a you've in at weeks And week layoffs Francisco. wondering a of I that talked San of think in the First quarter and couple like those NAREIT, whether in effect really

It's Angela here.

since quarter, On significantly taper running were average, portfolio the less concessions, in particularly an week. right basically portfolio have overall now, it December, essentially trough seen that and it's a November a the which the late earlier concessions. We about in it running mentioned is than And we're improved fourth average we throughout as our two weeks off I've portfolio December.

pretty directionally you improved indication gives how an have that So of things quickly.

Barb. Okay. And then just one follow-up for

was the us the in gave the for XX points your to terms debt, way if share You where like express per growth. in a bad basis those I XXXX? But drag look are on and the I X.X%, there at expectations terms it fourth quarter, it of think,is

Yes, Tony.

to For bad XXXX, X%. of schedule be a expecting as rent percent debt we're

a million any keep in Assistance to Rental Now in on as we Emergency in mind, $XX the expect XXXX compared we received same-store don't basis XXXX.

in number at is and increase. X.X% so why XXXX, were And going that's net the going it's to X%. We to

It's just in front, able improving expected, we are underlying Angela to making that her evict. but is taking progress are as we had because initially the on mentioned longer gross we Now script. delinquency than

from next comes Baird. Golladay question Robert with the W. Wes of Our line

pressure I'm Good the everyone, the how you start push And what and rate? throughout curious morning, congrats point changed Mike. at again, to year? supply did

Wes, appreciate you the that. thank for I congrats.

of generally be quarter Oakland, in has In think close the noted a tends especially supply because are price. goes primarily to more apartments. We the supply because more demand I pots to seasonally and are supply down having this in weaker zero the there of and multiple pushing than quarter fourth California earlier, has really weak and few which period, zero, pressure, places. or there of Oakland lease-ups a Seattle the fourth deliveries effect terms in year supply it's to Seattle of markets, Seattle are

obviously like But And going for this of forward, lack looks the the is it's growth few last of declining. supply picture years. a rent result

preferred that equity ability at to the in So well. is accretive our level we housing see and challenged, produce pretty book as an

demand, I lot if in good be be going we'll there's period get And think we're relatively to so of a -- in to where a going supply. be we any shape. And not it's

And in to it. you Or everyone they're evicted, tenant June, apartment? they if nonpayer a going know you curious, Got these coming to just swap new that a non-paying is happened will were people all if say, if have a what then are prior just tenants? in,

not will Well, we will or there. on that are be needs the let if to tenants they we, front, paid. renting pretty process have said and checks have robust know that, that prior any a course, Having credit they do -- of us debt

indicator best our that front. on that's so And

Okay.

the I delinquent timely the ties for would not that event. already you it's like paying So books in that tenant? a a guess there's relatively be as are --

Right, us, course, ongoing credit report have as tenants debt. for there right. on end. And we updated left, ongoing in fact, well have we even on have our who immediately the for And of -- report is,

there that use So resources can and are we have used. various we

Next question the KeyBanc. of Austin comes with Wurschmidt line from

wanted to delinquency. revisit I the

County quarter, was, And running or be on overall is of you're I curious per what referenced by last fourth rate delinquency. think I What the L.A. believe, the $X.XX XX% that share, quarter is you'll you the figure today? at of I'm XXXX? annualized then that run assuming that the

the In the XX% to lifted. here. been has to under given XX%, about delinquency the surprise it's the L.A. is basis. L.A. that population.It’s I'll doesn't Angela about delinquency past, had not L.A. moratorium ticked continue and touch delinquency, just up We eviction on us and accrue expected to

prior seeing is tenants in, news not [indiscernible] the coming However, that those good tenants we're the tenants. new

then Barb. this is And Austin,

the only not and the turnover have with $X.XX historical On piece rate revenue that associated to piece, is to, that delinquency. Mike costs compared referred eviction we also the for because but the expense run pre-COVID elevated our

both pieces. it's And so

is for of year in be gross of back What year, delinquency.Our half our X% full the around the for expecting the year. we half second delinquency X.X% the will the are

given evictions expect the to at timing to this is year. So but be to on very we end the progress, these point. our rate do the of to normalized by run predict don't We make difficult expect

That's fair.

trying we'll XXXX to but this Just of understand later is, into earnings year. sort that the haveto revisit what power going

X.X% late to improvement And going what some pivot take back you to you to December referenced January. guess would reaccelerate I more stabilize the in even here guys And from new shift are last the would rate? renewal or would it January you growth occupancy question, from benefit favouring month-over-month or highlighted you that for mean pushing at to that your that rates? could lease towards rate Second towards year. accret

That's a good question.

In and when a be strategy, to going terms it's each little of the in the would bit different of we occupancy shift, markets.

So for portfolio. strength our actually great in seeing are we example, Southern California

However, eviction of and we occupancy running non-paying higher to anticipation the little a our opportunities coming are that's in the vacate way. units bit

seeing of we a So it's that that because a positioned. ensure issue, softness are we're market strategic to we're building well play not more

And a which as that we We we should now reduce demand been so in switch especially for would example, able be see season. seasonal, as to in meaningful that we back way. does favoring places come concessions it expect back to when growth, noted, leasing our peak during is, like typically Seattle, highly rent able to we've

low, has be a as we will? if safe able to being to in it bit the setup you that come Northern similar is terms little of And to some push seasonality, the out seasonal a opportunity Seattle of harder and maybe assume as California

Yes, areas sense. pockets of supply bit supply, take there probably the some one are supply. because the we that will that to manage places little of through caveat So good a continue right? trying earlier, in are to Oakland where like longer, that opportunities But talked is, example, for we there. the of And makes course, not conversation

the Our comes Steve line of next Sakwa from with question Evercore.

the the half? just maybe you congratulations first that But shifts you of on that at offer what sort like timing talk say, basis, in I you half as my in the well how realize that and Barb about guess, Mike, when are the can guess that revenue X% there think in transition. question, looks heavy some maybe to how and about the I the to on numbers And look you just versus growth, light half? that of the the you spoke I is and first Angela the think year progresses delinquency kind throughout CAC is when half? second midpoint, cadence of a about. second how

X% say Steve, the half. second Yes, half be in first than would about I it's we to higher first Barb. the expect half. the We're

The didn't we year, half year of be of of first in second comps quarter the north will average it year-over-year while on X% function this trend that's hit that, expect then growth the will really year. our accelerated, because with And it the and to rents down throughout probably last line.And that a revenue year. capture so, the fully

will be the than First half half. second higher

thinking you potential or you San Area how either from about in, or specifically say And some are in well, for you But talked when the that Bay lot talked Seattle on perspective? maybe kind of occupancy occupancy a soft baked loss about -- I of think in some the let Mike for an the guess, Okay. you Seattle potential about guess, have and I tech, just question. guess second occupancy me Francisco about of the what I points

running So on vacancies more California from there The some prior one not eviction. caveat we're focused anticipating lot perspective, because whole a is at periods. from an L.A. we're occupancy particularly different Southern really than

quarter, and So anticipated that. we for Northern example, in we saw in fourth California the similar headwind the

the So we employ strategy. same

growth. So COVID as it's for these better we really related unique come on some of legislation position more to focused really of situation out us

about And to you want talk Mike, employment? do

Yes.

to pace employment. happen big is Let is me going Steve, the of quick one here just add more thing. a what question to

in been prepared I noted job really growth has strong. remarks, the As

job showed some growth warm actually maybe layoffs of up yet. or the the However, haven't notices in

X% everyone, our -- was for just So for for job X.X% year the remind U.S. minus S-XX the to expectation on -- growth

growth stronger January's are growth is respect to it And than certainly get on watching you with seems if be conservative. over next job several to we going months. U.S. maybe number. we continues, too running job estimate a then where we're to so, like But our job point growth that And expected, the S-XX

closely. that watch we'll So

question comes line the Alexander from Goldfarb Next Piper Sandler. with of

Good morning the on your helm quarter. joining on out Mike, and Angela, next earnings call; in. best tenure,on your just and last there taking congratulations

So two questions.

maybe COVID on First, in could had early when jobs California They service in mentioned you closed of Mike, work that fleet everything was just they of down, tech rebound, job because those from sticking a a whereas shut home. had lot industries, literally lot a were down. with the people could work

that the is you its it you benefit, talked How the like As rebound we layoffs growth. in headlines was that's there no job of than about is jobs profile versus in California your really apartments? in look really recovered seeing look, the strong what has more today service rate mix maybe December you resident profile, from it more and it at job our Is Or of all different like, of see would when sounds your the coming pretty jobs. job good -- these in back growth you're as mix demand resident XXXX. you're

Alex. Yes,

giving a back the pandemic the gains tech the period. pandemic. high -- jobs portion growth incredibly rate, we are of of -- And small a occurred more would hospitality sort the also that of I appears but normalizing. at continues during the we during and recovering announcements strong. And job I think the recent that think be some but that normalizing from And just are But other service and things say, are job to leisure, very it tech was yes, onward. pandemic

that we So even don't in tech be to this at time. weak all considered point

next it I the things. chapter or next and think what of it's just taking transitioning the was from step

right that we weakness on might in big based like think pushback the the and earlier, track. the is it and be seems would a overall, probably are we're S-XX So possible, year if have be consensus a we stronger jobs U.S. almost which estimates all because this our economists benefit whatever continues. was for net of Again, on the it's

to close paying attention that. be we'll so And

want the of I things announced the maybe two of them had notices, analytics largest do layoffs the the Washington And into analysis more in data is portion versus go actually. the to are what we major, an -- One and total. our team and California and warn

is Cisco. million Google, layoffs. this X.X XX,XXX Meta, is X% about They or have Amazon, Microsoft, rate Salesforce and globally and employees the So layoff announced

markets California, those Washington layoffs. employees about there's XXX,XXX the market, about in are In the XX,XXX people, these and of companies

is and the Washington of in So percentage broader layoff compared California to actually the lower as enterprise.

think is I So that important.

interesting, X.X% And no the rates for except our San San to unemployment so Jose, under eviction stay in at that's people which finally, is low. Angeles, are U.S. Los it's doubt everyone able the subject because and average, the in and are X.X%, benefits to Francisco, moratorium. X.X%, drawing apartment

driving look Oakland. delinquencies question especially cause good the guys L.A. to second then will to of as Okay. And year? back we the what's just the delinquencies, then that of exposure guys County? And should assume in is the getting a obviously with bulk pair and this L.A. Is you consequence, that to L.A. I think you eviction, have your highlighted

which comment. But are the Angela in Alameda two expired. moratoria Yes, me about have or may Oakland that County, a L.A., eviction difficult really is City L.A. else talk someone let and and

County L.A. XX. really to However, a extended is County was L.A. March Actually, horrible nearly not L.A. restrictive. as City ordinance.

it to tenants, income example, example. for XX% applies only median For

L.A. relief in little there's And of so bit a

of using in is rent et of for exit necessary set deem think expectations, broader as much I supply-demand and L.A., mean, cetera. it markets -- -- depends. cap exiting I And rates, analysis, growth terms we enter we exit will criteria a that, that

other And so some that will drive of that issues. these discussion as as and jobs well

XX% delinquent delinquent the months units our over are Yes, LA term our and L.A. in long unit front, or bulk Alex, three on of Alameda greater delinquent the than Alameda. units

markets, longer the well taking that's court, is courts 'XX other our a recapture really as vice well down. to and factor in so that those the factor as units. And are to It's the slowdown bogged as a in in guidance

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

pretty actually I dire the seemed to still it's from that it around and you're right? on I at projections that was reiterated ground. last doing based that the you employment what your seems X% X%, you more suggest on the Mike, forecast seeing think interpreting but said know economists you commentary the was Fed pessimistic somewhat and growth quarter, outlook. Am time, and the a what rent

I able I I in And will me Barb past and know. position. the a do reality the we've referred better that's range to and kick comments -- that is, anything relationship for if much year. of this can I of our I the with outcomes I we in think anything triangulate that's mean most inconsistent supply published the past, broader more the Angela much to say been don't than than of demand historically

more growth. Notably, the we'll part So, inherent hit range within and pieces more that there have given moving job those warm various that think is better potential notices and a I reported out and still But all the the job be again, outcomes. of uncertainty, may visibility. of are not layoff items for watching growth notice there

there's lag So, there. a

on it's see out. little And until we that unfair plays comment so bit a to how that

where driving up quarter. XXXX non-revenue-generating enough. any about I And elevated CapEx will give And think XX% the Fair What's And for that? total can shake fourth then year-over-year. you expectation the Okay. was in seemed out? 'XX

misleading. CapEx -- can at a look helpful number to here. Sure. about at talk It's just be may it how looking The be one-year we Angela because I think

program Our is XX-year for property a each CapEx plan. on

up on replacement, a improvement it's that large it's going lumpy. where and there made example, going for we so, is look in to And to show years

the but in to XXXX. having -- when said XXXX, from we catch the that, had So -- also in paused we up activities

to per door. closer example, we to running And pre-COVID, in were $X,XXX down like for $X,XXX. we're about XXXX, So

So, over increase. XX%

play that so later, a there couple lag that years of you effect. forward And is

So well. seeing that's what you're as

If you a, XX-year CapEx say, look are. at door our pretty to peers where is our per similar average,

do we portfolio older on a Now have little average.

CapEx a door. should we naturally per it So, slightly run higher

the it a just sorry year. just but So you little next that's we're winter than inflation. the one evaluating bit And -- answer, to for there's long year, per have also expectations number more

over to said, XXXX, time, should period a a but a average. to long So, XXXX, revert of it it's I time, I going mean long-term of to probably be similar over like period

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

commentary on? on which provide I And that's going ask you're pricing think asset the impact near term to topic, transaction Anavia, this than expected working the seemed other it's we'll tax and have that sales of pricing a have everyone. sort Any you market to reflective related both to that the pricing? what in the interest better of environment. rate you on L.A., on do matching given about of if wanted the could Congrats

John, Adam. is Sure. this

high was rates So, was, trading to mid- cap say, specific opportunistic the a seeing beginning Anavia kind in Generally speaking, the -- with pricing. an the in to very Anavia. and of market -- sale fours. there we're I'd reflected which that's in buyer

that So by Anavia, I'd say, outperform specific just because very a again situation. this bit

effect Regarding X. April the tax mansion seen volume tax transaction slight potential a into elevated in so the due coming we've in L.A. to mansion L.A.,

most met. given of they and being very think all I just For runways are like were the those seem short pricing just part, expectations trade deals on doesn't probably they most won't

this I not volume Washington think actually forward, their at they in transaction when transfer did up. we've generally seen all. It Going tax affect

outcome any potentially may going is, headwind the be one an just make from hinder the could harder thing think back development and especially development to returns, management that to within that's it Los their merchant that affect much build. builders, I L.A. end it significant tax of Angeles, to

looks delinquencies. question estimated $XX Okay. gross year. is basis be at a that year? to to last it's on compare going just We does this like It million the just And My second How part that, a on ERA accurate. your can on upside, surprise there's the much in just that baked as to $XX I about of was guidance? to make not disclosure. based wanted sure million follow-up

John, to numbers. my I back want to model to with the up of have on may office in those get front you have me. follow I and

don't want on the know I So I numbers call. if here quote to the

the if we some, were way that upside In we've collect that we exhausted of terms in ERA. to would so but much of most of that don't expect be ERA,

timing of thing a million balance. going think million would we We only debt the have have million. is that. start just $X.X more since $X.X we'll uncollected one accounts mind we're keep collect collect in I receivable cumulative though, a of COVID. It's The than bad We do when $XX to

just that's have upside of into even when collect we that. don't -- say. on nature than going baked is the forecast more numbers. It's I would So But to that is to our inherent that given the so we're upside the really that ERA, front

Okay.

cumulative that received ERA plus up I'll the offline. change but $XX -- last we year, up from off-line, follow I'll million follow Just the you in but calculated you with

the next your Our with proceed Dennerlein of America. Bank line Please from Joshua question of question. with comes

new missed Sorry we're out you did and sending say but if notices renewal today? it, I guys

Angela No, we It's about haven't here. that. talked

on are sending X% between to depending say, Our and market. out renewals new the somewhere X%

March. keep does negotiated. very for in get that But mind is this So

if we're say, some on north sending basis negotiation advance. when these well of in So depending and assume in XXX a out maybe sending renewal, we of we're markets, X%, points

months example, for in So it Seattle, six goes out advance.

gives better that outcomes. a you hopefully, range So the sense of of

touch No, those, Fiber, same-store that's elevated. same-store guess expenses? And I Yes. guess being on normalize in and up kind and same-store what would you base And like? mentioned then your if of how to you I Okay. then from showing -- wanted costs are expense prediction those for expenses look those I helpful.

Yes.

So, the obviously, And turnover eviction in line. our up well, R&M in as costs line. have administrative we elevated and that's show

in both it's So lines.

in say average. historical total our to So, I relative would

we'd but this X% and be costs, turnover to year, be to forecasted elevated are think the we controllables Our closer without eviction X%.

impact points basis for the XXX the controllable about to line it's So item year.

That's awesome. Okay.

proceed with question. Yulico your Our next Please with line Scotiabank. of from question Nick the comes

at high how you're maybe in reasons when too or job on about losses talk is being terms of rents could in move-outs, that's of other First question trending move looking your for versus some you to terms of just move-outs, out data even regions?

interesting buy still coming long-term move-out here. we of Angela changed keep out out expecting from average. COVID moving under because reasons. big home really hasn't shifts the to It's And That's

housing is reasons, averages. pretty just historical the here I less similar other darn lot a to and of cost think because affordable our job transfers or

not have seen we on so, move-out. change material And any

then it's question that on a whether been the in of seeing in a bit specific are And markets Coast. you Whether has recent I return on you're seeing any some West from just little in Okay. office, slower cities move-ins. is which process to your required Angela other from any months, in benefit benefit And your well, just portfolio markets as office back Mike move-in in now the increasingly. even if hybrid and or I'll data, be you from of into congrats to because as job people in markets of your some well. are an seeing relocating sort any instances mean we're

again, XX% between in-migration. pretty -- third to good market, average we in quarter, on saw uptick Congrats and It's XX% is have once I a and And that another our the to of immigration attributed Southern California. to the course, that on question the so on to mentioned Northern return office. part big of

trend seen is in continue have typically demand quarter. low mind, quarter fourth But We the that fourth keep a just in period.

better in-migration you of the perspective, difficult So Mike, marginally, for to quarter, the add? again, you trying particular first I have tell us tough thing indication we're is that want to get only huge that. quarter talking is a it's do still a to numbers once you not to really is The from just to can be anything compared that fourth time an trend.

wanted maybe it analytics and just progress what be to a mass to past. that normalizing jobs, again, I to back coming that pretty appear data the make and to were some with making exodus the data, we've LinkedIn And been places early point effectively guess we micro in I do are as on our seems want those again, the from Again, going well. pandemic. add, in had they work, to, the where data where I people to be but And using you team we placed to deals just all Yes. that com-patterns. own not comment similar

speaking, and generally of retirement that we pattern top metros. plan. house typically, retire, in the recently, Eastern house go, are Dallas list California, place Midwestern from of their So people where their in the give sell people expensive is Atlanta people migration large new part will their a here And and on more the the and actually, incoming

notably expensive less a to Las go they West Coast Phoenix, cities, so, Vegas. And Denver,

stay Appreciate that, Mike. or to in Any California? plans you move

I'm role type spending I'm staying to around, have will still to stuff. going I'm the a some and me, grandkids to time be looking of determined. Angela if And and forward be that with

do here. what So love I I love the Company and

ready, important. really that's So to completely what's in thing and not whole being check this ready Angela is driven by

a And great very so I'm do job. confident.

with of Please with the Kramer question your line proceed next comes Morgan from Adam Our Stanley. question.

and guys among but for of explicitly residents. they're overall, kind tech kind that ask tech that Look, again. congrats are have the just base, about, markets, your I who markets to tech secondary you your kind by that get you to maybe Look, percentage you tenants where kind secondary just I secondary, exposure if jobs of have within tenant wanted of exposures specifically, And tech obviously, but just jobs of maybe of your number. located, employers tech right, if kind employed are

number. Yes, six on else fungible that's is top that What the because a good is too everything track do just we question. we

So the Northern currently, of in is directly much and more -- top linked concentrated linked Seattle relatively of companies. X% about to base we're tech And tenant course, it's our six California the a certain be properties -- has that's of But speaking. or in higher. assets will very the base. course, much And that disproportionately percentage a closer headquarters, to manageable are proximity

historical of does or pre-COVID how year kind of that types to And X% numbers? maybe compared last average

change. We hovers a run X%, Not X% between, kind tend kind say, of big of and there? around to to it

lease. kind renewals still I just X% maybe would versus I That's think Got new form kind it. of new wondering of game of in the continues lease look, and the trends conceptually, kind range renewal really for understand then that correctly, for January, a gears, kind kind switching of And helpful. negative if trend modestly maybe of if

your you to informed? of if maybe renewal of and kind of over that or converge could time is see on thoughts maybe gain wondering lease kind that, So and happening new kind that

strategy. impacted course, occupancy is which Yes, A couple I strategy, our related things. new on of want our rates. a give background lease heavily little just is you the to That, to by concessionary first of

from is as that of concessionary that the shift quickly versus much issue, of strategy is we course, market January. a and not that part so issue in a And environment away something

don't I this you here permanent think to is want to stay. so, something And that

an the there X%, rate going S-XX are full to with renewal renewal lease leases is in be of our play it'll to -- but out. convergence environment rates year to be and where a And new so take probably new this ultimately, that about on expected have and

it. appreciate Really

comes of question. the from proceed Next Goldsmith question Please with Michael your line with UBS.

current the is office? impact exposure how a when My losses corporate to do then FX to with job the reconcile first is question of return we housing? And

corporate the sorry. you on repeat first part I'm housing? Can

is your housing? corporate current exposure What to

Corporate it. Got Got it. exposure.

number is about during went down our exposure is COVID, interesting that about X%. current what's zero. actually And So it to

so And that we've been building up.

So up it about last X.X%. around got to was -- year,

then the -- keep peak Now in up to move it's they around back mind, portfolio It right? in October ramp in to a down seasonal going Seattle, they X% July, comes that nature, because and can around temporary during pretty it's as around heavy leave. the and goes

there's cyclicality So, inherent that to there's inherent basis. tenant -- an

operate to difficult Obviously, becoming and question have State difficult, rent And and controlled, markets Seattle an Washington environment. it. my -- regulatory increasingly the increasingly gotten XX, issue. Prop. Got that the it's potentially relates you whether second

you some -- So updated your environment? kind maybe would thoughts operating more time, can you just And whether then walk given through to over given portfolio the of your diversify challenging this? look around

we that's how and little some been I'll are. Yes, these a aggressive that great question, handle of bit just one. a No, Yes. have maybe actions surprised

of pretty area. that in in one groups CAA Washington driven the a have and the the effort local We local by -- up strong is advocacy California

fact, to good a the wrong. And sold against being spend always lot are is It's of policies. XXX% those we with policies exactly exact we working course, that, so, those industry. advocate when, Almost and for basis trying opposite. organizations in all on the those time And housing the of know of

it it's on something to it. to So, concerning of and deal unfortunately, with, and a we that time we spend have is lot us

these tend different make will result long out the risk occurring. that, still and a way house, be And appealing as in a it still Washington the hasn't in I but landlord is monitoring proposal in process. and go. increase on come a Again, less early the of that. The proposals that And we to of to of all there's -- very to It's committees. California think of

point across I your XX other markets, which before, major I what metros the now, want reiterate think to said are So, I about country. is we tracking to more markets

those We attracted are let's the for say, markets. California things markets we of whether compete specific The rank in things. looking XX and that they have some ago, with essentially years them. appeal California And trying to to interest terms us can some of and in

where detail get don't timing, into it's our time a to is I think But when about said at in it's appealing, played point the why at have great et making I've want appropriate cost I rent as this before, to going this notably, about hit. last shift actually, time. County, of our to rent we out like XX% lot capital and important, to continue of the any and is market, is we'll this and XX% has this a in couple you San going a can of feel quarters of country, Orange you're the at including cetera, growth point that supply markets across Diego, increases, get we enter if can

average The mechanism affordable in it's more the growing. been them. always this move a here, And out person everywhere. can't has The markets the people true true you a find unaffordable. location be that to in housing. case. markets, rent just have And afford change. to self-correcting It's some in keep causes There The further certain that sense, has to become can't

thoughtfully that Does we're that appropriate to going time. so help? And at make decision the

Congratulations, that was really No, helpful. everyone.

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

market transaction to follow wanted I Adam, up comments. your on

to trade rates there. market, Just think the be curious, number a of brought would how substantial then to bid you cap do out suggest? at they four you It'd the see you those of the high assets cap you the rates in throw depth

in are Xs. that ask. a I'd high say, mid- We're volume the between going a But deals still the and down bid gap seeing we muted seeing, to of are we

to, of I'd kind that's volume, we back today. yes, So shake where out if I normal we say, got think

Okay.

kind understand Just so, are yields? rates, Or those are disposition those of buyer your initial those cap I cap rates?

we high What saying yield. a for Anavia so in cap I'm to mid of quoted specifically, the buyer more statement was that's what disposition Xs, the Well, rate.

me. Okay. Last question for

thoughts Just topic just COVID Angela, of curious fully your for on impacts reversing. the just

growth the absolute of would in cumulative any market years? rearview expect your that in you actually huge next have as So California declines rents in see Southern over rent COVID markets few mirror, rents the market seen to

mind supply. is that function and a Keep rent market of in growth demand

still years, And the out point, Southern in performed muted pre-COVID even California looking relatively environment so this Southern next at and is couple have really well. of California supply

has be earning continues California U.S. employer less a for That's like why stable. level has It's as but volatile, Southern higher the better similar Southern power. And market. it. broad base it we And of so professional so services, that reason, California to

And we so, absent COVID, of it's going the suddenly apart. fall expect that because wouldn't just fact to

question. Our Anthony from with line of comes question the your Powell Please next of proceed Barclays.

question on rationalization, office return the work the have a work Just if -- growth, as these office could hybrid outlook their footprint? A space the are in Coast. job reduce space lot announced headwind that of technology of the on the the to of because cities kind West firms a people be on sales, growth fewer impact of in couple you doing rent the more have even for in years they're next the higher firms

Yes. Most nature. portfolio is of suburban in Anthony, here. it's our actually Mike

we're in slowly be is but relatively an So will -- from average and something that return that maybe -- evolve the we will in three -- that community. go apartment have thinking office to -- that cities there week to a little more to and anything a week is pull days office will closer all people And office-centric in two will our of office. the days we

would positive view. in our a impact be So that

We have that we're more and think and from here of senior of same including, off. that say, Essex, of moved We're overall looking time, the so I people the group all at better important group us, productive. decisions to some for we're this us at issues has of further things. cause I'd the leadership results have management other the template And super when together But over because readjust make point in as we that for offices time, and acquisitions potential better sort to our Company. a --

So return that a ultimately we be think will to office tailwind.

of agree some starts Do one there you year-over-year been buybacks, fire-sell can to last promise Maybe buyback sell if think as good the you terms just assets? maybe that more in made year. more on you you amount increase

whether and We'll hard in that that share. cognizant per Yes. we many tell run This NAV do it me is It's can many we to and But reverse on cycles. deal right we you environment. we the we're have can times now this that Barb. that shown different based and that can of is assess for FFO volume create something machine over

willing that opportunities present right be the if we'll so And do themselves. to

St. of Haendel Our comes next question the from line

question. your with proceed Please Mizuho. with Juste

and career on your luck of fantastic of all congratulations a best the next Angela. best my And and chapter

you're So I go on as expected. follow-up expenses. this than at X% think guess, I a just Barb, had of us list. expenses, want of our which part guide, first, to couple think questions expecting I to lot left here higher I be year mentioned is X% controllable to of a I you the back

the is of a that earlier? any Prop maybe that any is X% property the the collections have So contrast expense And more XX say, of blocks you which Thanks. through platform benefit of growth California from benefit there Seattle, doesn't bit and maybe building can mentioned you if does? go rollout there versus if the

then is next historical And budgeted Seattle Insurance reverting estate growth, XX% non-controllables. taxes, being X.XX% XX% our this really, Haendel, and we've market. We Yes, to expected that in expect And really increase be up factors real expense are more high difficult year. biggest that's the utilities, were X.X% up of the to single-digit key do on very norms. driver is That's a X%, driven a next year, to by the year. on really X%. the up is increases insurance

key the are the on non-controllable building piece. those blocks So,

out the have we the piece, property up do that central elevated model collections be at of X% line, centralized midpoint, do costs admin masking we functions. the we some controllable Once that X%. the services of or to from only rollout rolled benefits in some those and On year is the again, of which eviction last that the expect

blocks bit have the little it's bit building major should growth. So, a overall, expense this we year. masking that elevated little why But it give for you a

so impact I No, we're that's appreciate just would helpful. normalized a But environment that clear, in platform that. more property how collections much have?

the costs eviction a said I controllable. so are to X% about impact Well,

the lower. that's can factor it X% you use be So is would

Appreciate it. year-end and the What's the assumption built guide turnover this year for occupancy? into

Occupancy, we've are But there. good delinquent then given units face historical get assumed norms. a that in is turnover in we little because more And it's in paying so be expect eviction turnover to terms we see do bit tenants then elevated the quarter. to elevated that than flat, getting expect turnover, the back, rent. we year-over-year, change stable of headwinds we fourth And the in no did

actually that's think good we So, a thing.

That's Okay. me. all for

question. Please comes with Jamie line question Wells Fargo. next of Our Feldman with from proceed the your

with a back as to the acquisitions, you're what seeing, be more opportunity you earlier comment that's in coming you do opportunities going you about magnitude? call owners something debt. just made to I the distressed pros about an some floating with to rate up go And set? that talk want acquisition Can think distressed

Jamie, this is Adam.

that to So seen much we date. of haven't

everyday. accelerate the opportunities it's caps. with the think expiring on more We on on will probably focused platform deals seeing with the it platform are I we're potentially like and do maturing into at more provide finance where but debt this year more structured -- rate We versus opportunities more acquisitions, truck and looking from said, or existing finance

then book or guess, the should those led quickly the just the forward? sticking about we the conditions profile? deals investments took, finance, market impairments risk really end versus of with And the structured I the risk Okay. you of of rest even profile that, was the higher that going at that think change your of Like just that kind to Or impairments? how

I We sell, market underwriting on wanted change wider the agreed or didn't highly Yes, go the spectrum investment. It the out risk ultimately to that latter. Oakland didn't the developer function really say to the and concessionary We we would a our is curve. it's of on sale. the

for money got in redeemed $XX actually we mind, in keep invested our on made Now investment and $XX.X shareholders. million. We project, this we million

the XX%. shareholders, was annually for we made So, our coupon X%

earn, we to earn was quite didn't redeploy were we take in but elsewhere. thought to back thought of it we So, the their interest what going shareholders and we best money

that lose a right we is lease-ups think I so, now. XX unique And Right I there's didn't And think now, of it market. money. market in given function the

from thinking how is into like of much the actually LA and guidance, Okay. And just then potential finally, that -- the your terms Alameda the County? baked of in about just upside moratoriums, upside,

year Well, we we in continue are units. as delinquency we what the is have our delinquent assume recapture gross do will down able guidance our that to to trend throughout

start from that XXXX. By to of expect the trend the we of of down back units second year the of lower X% X.X are to or X% year. expect the be for our of about in half half have we year, to delinquent. the down. we That's now, the range at right So And the continue

So, a guidance. we'll -- of in, that more we it is We function units the get baked year. of this do have our that back

I'm revenue thinking maybe no? just a past guidance But in XX. extended -- downside or really that risk of also the to the they get in you Is Okay. March upside, that have terms if

L.A. City a strict which keep actually eviction the is risk Mike new -- that downside as earlier because L.A. than I don't County, see what said about we don't is mind more in was. moratorium being

a And we to so, hindrance see us. don't that being

longer expected. we just making little -- we a are progress. In it's addition, It's taking than

don't we see at a point. this downside significant that So, as

no are queue. remarks. back closing There in for call further the questions the like to I'd to management hand

and the operator. I well-wishing we at appreciate to joining thank to for want definitely Citi conference, Hope you today. Thank and you, me. us Angela for many all see of everyone the

it's of many an work you. been to I absolute note so want to that with honor

day. a And great you Thank for so joining. have

for this gentlemen, does conclude today's participation. Thank you your and teleconference. Ladies

may You disconnect have at and day. a lines your wonderful the time