Essex Property Trust (ESS) 28 Jul 232023 Q2 Earnings call transcript

Good day, and welcome to the Essex Property Trust Second Quarter 2023 Earnings Conference Call.

As a reminder, today's conference 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 on be company's Further now pleasure is It my host, Ms. to introduce your Kleiman, Executive Angela Chief Essex and Trust. Property Officer for President Ms. you, Thank Kleiman, you may begin.

guidance per Jessica end Essex's Thank morning. earnings Pak with me range. Berry and you quarter prepared joining is of Q&A. FFO Anderson Good a second here solid follow will second share for for call. high quarter Barb remarks, our exceeding Adam the with and We core delivered

are and we a increase per addition, announce In pleased same meaningful growth. to to for guidance property share our core XXXX revenues, NOI FFO

this discuss will moment. further Barb in a

will Our on the the strength conclude continued focus of XXXX update performance revised along West underlying with operating with an the refinement economy date to the to Coast West today strategy. and on transaction outlook demonstrates our for Coast our market. remarks My

Starting with Page balance the on the of supplemental. the shown as of year, expectations for SXX

economy resilience a healthy coupled Our with to deliveries contributed improved rental dynamic, outlook have both the slowing This year-to-date reflects apartment of demand our and forecast. markets the in initial markets. our housing surpassing for labor

result, average for West to expectations by our rent growth the Diego points increases we X.X%, Jose. XX a basis to notable raised Coast with San market San As and

June. the job a through X-month half to markets posting Demand growth attributable our for job X.X% a driver growth of associated year. now to is the job on trailing markets growth mostly to generate key in expect with the with achieved is the our X.X% the average year, revision. We This growth full first

of the companies markets, suggested than fraction only the occurring quickly within employment. majority layoff new with technology and have less proven consequential announcements those finding headlines Additionally, the from a our vast affected largest

outlook. supply the to Turning

slight into get in XXXX Our delay a research XXXX. as a pushed few forecast deliveries reduction projects

outlook job modest a our we rent cognizant Coast base we start year-end. focus approach we on with achieved the expectation on have the assumes West growth growth And remain for economy the given of for of the as rate more contemplates moderating pleased market job interest the the our to reduction. increases While inflation been accordingly, potential the remainder year, year. Thus, steady Fed's case

years, Looking the positioned growth West see the forward to factors on next present to several as today. we X above-average uniquely Coast key based rent generate

First importantly, muted, levels to to from benefit is moderate and permitting required West to come. years and Coast expect supply a in markets. the activities housing for lead supply time new most outlook we relatively our With is multiyear develop declining,

affordability. growth grown Since It high cost in XX%, Second Xx is in own over is Essex to has rent the of rental to the Essex XXXX, of cumulative compared XX% favor rent rental attractive affordability. income in to now compared average expensive continues resulting to personal renting. Furthermore, homeownership over market market.

drivers. demand solid Third,

seen improved Our economy. this that steadily demonstrate to companies continues concentrated and the tech earlier year. We've in investment the open Northern in by a Northern growth stable month gradually growing, supported diverse key is positions trough Southern AI largely XX economies are Likewise, since the of each top are region driver the California. companies region a vibrant

in of a total June. postings Lastly, declined have job below at percent as significantly fully remote XX%

next For of XXXX these reasons, West outperform the momentum and we continue remainder several expect years. for Coast the to the gaining over

properties. for same than remained activities with institutional X% to the Coast about second turning the the Similar in low cap markets. rates period in the have quarter, lower muted. first the West quarter XX% Transaction in year prior investment Lastly, mid-X% the to was to range quality volume

large similar actively institutional marketed local group healthy of investors. a from to more valuation are see levels. to buyers range from deals starting at syndicators We a and Interest foreign

in for largely interest remain more buyers clarity waiting sidelines, rates. As on expected, the leverage

continue be to opportunistic. diligently well We underwrite positioned are deals we to as

that, turn to Barb over Pak. the call I'll With

a brief balance an second discuss markets I'll our on our begin and Thanks, overview quarter update Angela. of sheet. full with capital guidance year the results, increases and provide to

pleased second revenue our of result per by report we our of with the share quarter in lower to is Beginning performance. achieved FFO and property attributable $X.XX guidance of Washington. I'm share, exceeded This to core range per $X.XX taxes midpoint $X.XX. better which growth

revenue rents in enabled XX increase is year year-to-date achieved points approximately us to half full basis to results compared our delinquency X.X%. to of by midpoint to offset partially same-property have forecast. due second year-to-date, higher and increase the higher net favorable Our the the effective as growth year our The by original occupancy of

we reduced As X% have in points expenses, midpoint to to it property reduction same-property basis XXX taxes. of by as a our a operating Washington result relates

our same-property Due to midpoint, guidance the improvement initial full at XX X.X% representing points these increased revisions, to growth to to our our year NOI guidance. has basis -- a

to represents quarter result revisions same-property growth. raising FFO the strong of year-over-year year $XX our to X.X% are share, a of and per we our which As $X.XX full second core midpoint outlook, by

capital to markets activities. Turning

maturing We needs capital been our needs attractive early, near-term our to taking have of market historically minimizing in opportunities proactive maturity and debt profile, advantage refinance capital and in debt the our managing be flexibility. XX-year fixed unsecured our used closed million rate will loan maximizing May repay of a financial a X.XX%. Proceeds secured $XXX we bonds in to XXXX. quarter-end, at Subsequent to

the in of bonds will are impact accounts, approximately interim, resulting share be in next the unsecured a repaid until cash to year. the invested short-term FFO positive proceeds per $X.XX In

company and the XXXX rata share. volatile a debt With capital approximately Our capital available this in environment. pro refinancing, terrific of XX% job has a maturities debt markets team today's variety the addressed did in at favorable rate the monitoring locking of sources

trend today. to Finally, our metrics and balance sheet net stands Leverage at debt-to-EBITDA our X.Xx continues lower strong. remain to decline, ratio continues and

the We have and months near-term liquidity. next billion needs over financing minimum in XX $X.X over

company the strong such, a financial As position. remains in

Jessica over I'll Anderson. to now turn the call

I providing our with from on revenue same-property operating year-over-year. X% by a color by strategy, today our comments was recent regional pleased and my results quarter, results begin including the I'll Barb. of operating Thanks, commentary. increase second followed

to we eviction-related us rate well year, move-outs. the half revenue several positioned to an first mitigate of us For peak push leasing months year exceed helped strategy from the leasing maintained occupancy-focused the left which and today. expectations approach This during in headwinds the of continues expected season, first

and trade-out move-outs. results July. lease were by increased quarter new of from in preliminary rent accelerated the trade-out in in resulting achieved averaged effective the a X.X% X.X% quarter. second despite is to growth X.X%, Our through June second finally for in X.X% May eviction-related blended These to and driven net Renewal stable turnover X.X%

continue backlog, this evictions anticipate through rest activity the work of delinquency to into the year court we over for ongoing and spilling Given XXXX. will some of

net effective growth for regional on quarter, X.X% down Moving averaged negative X This Seattle, In key specific to dragging factors. the to rent attributed blended portfolio the second commentary. is average.

comp. Seattle net the over of XXXX, quarter a First In rent is second effective of growth the generated year-over-year portfolio-leading XX%.

Second, Seattle sensitive more the remains market, our changes environment. is to seasonal thus operating most in

may headed the XXXX, a period market the back of we half heavily increased demand, XXXX. rents during recall Seattle as of impacted which into You experienced softening supply during

week. net leasing mandatory rents effective XX% saw and in to Seattle May a throughout second April a particularly Strong basis drove steady Amazon's point from June quarter-end that activity X collective demand, of days CBD a with a coincided X occupancy. However, increase quarter, return-to-office in solid XXX of strengthening the we sequential

experienced Jose, of also California. San Quarter-end on housing Despite growth corporate X.X% solid continues effective supply healthy Moving the our for at portfolio was to still albeit a for rent large activity where which the Northern muted bulk to second the be demand. seasonal the diluting support by Blended in negative located. XX.X%. we achieved quarter. X.X% from net helped with quarter, associated X.X% averaged Northern impacted Oakland California posting the employment headlines, tech last companies occupancy year, is tech the

X.X% rent for blended San blended strength trade-out Angeles California, by Orange quarter, is X.X% the average Ventura Southern a the the continued effective down Diego, for in quarter. in with net Los lease driven Lastly, County. averaged and pulling growth

relative California occupancy Southern the to However, this rent XX.X%. to California year. eviction because and Quarter-end Southern was of the rest for remainder the in of in growth expected run activity of are lower occupancy market, the

In results current encouraged by operating environment. summary, first and the year the of for the half our we are

begin are XX.X%, strong we current with physical with occupancy activity positioned third the coupled of the well markets. quarter, As all we leasing across

of maintain market in a we reassess As year, strategy we will season half back leasing approach the maximize conditions. XX up rent growth days to focused the as in the of wraps to revenue our flexible variety look our the summer next and

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

[Operator Instructions].

Eric from is with question Wolfe first Citi. Our

just looking is use seems nonpaying based at the of move-outs the think tenants, mentioned data, NAREIT, staying But July earlier some that about concessions. delinquent and your comments percentage which you saw like your and on pricing same. your I the of probably was impacting it at you

understand try I'm So actually just to see the when down. and delinquent percentage to come we trying reconcile that might

Barb. to generally due expect assistance plan. in it's do in emergency say will July delinquency rental months plan, were primarily first is would we on Eric, ahead mind. the tracking We to generally relative I that our payments. is behavior. our will lower. dependent X And We making the be trend progress, we the year. full resident it's of at left X% to And but the just X%. upon courts midpoint continue But the it's end below for slow, year by are unchanged and number

out control. bit So it's of little a our

I what drove mean, data look allow guess that what I what that if what rate? But May push just And of depressing new changed -- you feel was Understood. to more I clear, to at was with I you're the around then to be sort leases, mean, comfortable using guess concessions, then? guess, I that the number.

overall occupancy-focused that. And around This rent changed mid-May, With your us strategy is be Jessica. more point, strategy to Eric, what and of on we're earlier outlook, we in our to take headlines layoffs, growth. got and headlines to that? macroeconomic comfortable more in from year really regards shift the an I'll focus that couple a seeing One the would were with the concerning. the things. the Well,

addition and we regards coming And eviction, manageable. which they've then to a layoffs is the been proactive seeing the so that, subsided, and steady at with took pace, started And a back strengthening. we approach pretty in to

free seeing pace, were comfortable you're we and getting that May through of usage numbers May. at predominantly in the that But And averaged the markets. so and week in our activity right as before We evictions And at which to reposition and all based so of season in that some of had peak what rate trade-out across was on growth occupancy wanted were minimal We April rate offset a that of we higher we did our into usage is far go today, at over April. the the shared a strength focus. that about point. lot reflects spilled we and a a as we concession our seeing manageable shifting to evictions, markets concession as felt

next Sakwa ISI. question Steve Our Evercore is with from

just to be Just to question, clear. Eric's follow-up on

basically for your QX QX? X% your And can provide baked into you QX So expectations blended, for rate I are and guidance then some guess, delinquencies secondly, are color what on just and QX?

Steve, this take the of question. that is part Barb. first I'll

in We're terms it's at so for year-to-date. X.X% today, roughly year. yes, delinquency, full of And the X%

half And back the expect to the but so it's to trend it's a we it do said, Like lumpy little inherent continue bit an number. year. I under favorable, in that of

predict less I'll for then should And year be let And but month-to-month, the Jessica so difficult blended, of sure. to it's answer the X% that. on than end

Steve, is this Jessica.

new going to lease I'm blended that break As into and to goes, renewals. out far as

And so year. focus high year-to-date on leases, that new maintaining in earlier achieved our mind, occupancy reflects X.X%. a the keep we've in But our for

in our And to at week when it's the reflects which a half of gave to it so And full we outlook, concessions approximately that broader from market. rent we the growth occupancy. X% expectations look higher we've maintain year revised X.X%, over

to make half. to And have our first order so we adjust in it apples-to-apples,

And week half rent growth. is X% a so essentially of

in our comps of we'll for so year. And now, easier the half for the that seeing strength expected markets which add leads that to the be if particularly we're on QX, lease facing get X.X%, an you the then based is that us And QX, and you new the X.X%, growth that right back in X.X% to achievable to number.

go, renewals sent renewals And in out as and as far September at X%. We've renewals August reaccelerating. around are then

July. that which to come new noticed leases in preliminary results essentially days. by may had have for went trail approximately renewals X.X% You down, to And renewals XX XX our

go leases new achieve we've rent -- lease new but able wherever following, So end solid growth. to up some renewals been

And the therefore, renewals reaccelerated so expect X% renewals back around to the for and be half year. the of

with Wurschmidt KeyBanc is Austin Our Capital from next Markets. question

benefit the the the July. back that some growth given guidance growth of well in guess, June new same-store strength and first you as rate year-to-date, achieved unchanged? lease of So the of the revenue to half leave why half revenue momentum your highlighted you as I growth same-store in year X%

This to go. say, know we we've Yes. would I some vast still is think majority -- have I leases. our of done Barb. the We

of So here, this top point XXXX trend versus the benefit fourth time third to of at we this the the the leases year. it's know year where to the from quarter. given are and we to substantially XXXX If in leases we sign have line going number. left growth more number and amount that's that And going in is rent get lower really that left

swing same-store terms the or that's right now. can really biggest The I our biggest That's wildcard It down. factor. biggest the of so in at And factor up delinquency. to guidance point this is think

think are pretty same-store in. the of other I -- revenue with the components dialed other

Got the rate X.X% the half Jessica, think of then, new in And year. growth it. said you I back lease

to cadence the trying the Just of half, understand low obviously, X% here. in range starting back the through that

last got deceleration year. coming you easier You've given comps the saw

from a you back sense And underwrite you what cadence? of seasonality type half give us perspective, can back did that the a So for of half? then

see then seasonality in and peak. been we're around a So out. that slightly simply It week, little comps, seeing as often in Seattle being but SoCal is our to as we trade-out peak have as typically, We've by and point. Southern we of then we expect that goes, far our different would that's some in But pointed here. are this will a QX, right leveling around on year, market, you where a at going other may this and this prolonged in specifically monitoring of typical mid-July is accelerate we later. higher from and far Jose still And based bit be accelerate as the as And now expect as rents. NorCal and rents -- or about markets off California, San see as

we're anticipate So and leasing on but a seasonal pretty normal, strong slowdown. ground seeing typical the

Jamie with question Wells next Our from is Fargo. Feldman

maybe Bay the commented think also, and what comments the about implications for return-to-office, EQR talked more an Your you also seeing? Can earlier, how And you're about about improving Area. especially talk in you do was as assets think people I suburban in the are more to versus closer urban the urban people cities? -- workplaces. urban getting to type be want as pulled of more the their comment their

Jamie, it's Andrea here.

our are and a how things different is of I are EQR rest think country. couple key there that the are California the versus the of versus between nodes in where located portfolio job

start So I'll there.

suburban most suburban California, in So conversation, to companies the relates as based. of keep that large the urban, it in are actually mind tech

of tougher, us, more right? life, underlying cities it's so [indiscernible] benefit And other factors, for course, And of always the of that, pre-COVID. some of quality the issues. in couple are these a suburban and the is Lower been even a supply strength homeless

employers proximity more that favorable are of course, perspective. from much the And to

perspective, consistent more that the And compelling Essex, the suburban is for that our even prime urban. than is to from our [indiscernible] so COVID. that And is view still

As because return that layoff announcements. to office, in although that with just Amazon far of want the than to muted saw as somewhat early I Seattle normal was do the May. say we that, And

getting and rehired. digesting people really was it so And

thing. it the And companies. will expect and for we these September so from doing is would be Meta same larger the in other some return-to-office us, Essex, with to activity, see what pronounced we're of that more

office are from as September well. now a X-day Day We until mandating Labor working after

point, that more robust will we way. the in at activities resume so see a And that do

expenses either into even fourth think where kind about across talk acceleration expense little items? your line in the about see Can heading or or some greatest next late quarter into we moderation you you of think Okay. And major into you then growth just year. as a the maybe the operating bit may

in quarter. have the I the Barb. as year last we comps and is year, fourth half this costs this had relates turnover to of eviction in it those say Yes, expenses would easier back we because

in of the don't just the see year, other some the and significant say, of year-over-year a on I I expenses this And of we've expenses our that R&M, first moderate in of would lines basis. year will growth line and quarter so admin in high seen any half the some year. change in terms major this back other

insurance. I think this taxes know got and for we do expenses we've pretty dialed in year,

past we're X in quarter quarter, difficult we insurance we've look up spend. have about would yet more X% process here it to It's predict just The still insurance, As keep where call. would very land. percent we be market. XX-plus be a on next next to the is in challenging line of that We'll to We But I'll line very this us. the is that's a it's mind, going small XXXX, our like the and expect talked total line. clarity through going item our on year that for OpEx only budget

to large, number little outside So of we of the that favorable of the while grow is a headline need our X%, outside a they in where only And in California, time OpEx. small dial taxes XXXX. more and we it's component have

That terms any to no, insurance, Or capital from they with a offer are seeing build of another just going willing guess lot to company sticking lightening of reserves? think I their you be Okay. in makes year? what the tough you up up as sense. they're it's insurance

believe what quarter to go year. based renewal fourth this year. our through it tough on going we in We're the of now, we know, a Right will be

up renewal comes Our in December.

terms in very we challenging of on have think it's hearing, And based the what market. market. on more that a we're call so But still next I'll clarity

Piper is from Alexander next Our Goldfarb question Sandler. with

questions. two So

California immigrate sort comments a the made et offset constant, always that entrepreneurs you from is who the of HP-X drive. overseas and the migration to Angela, country tech workers, that outward but visas, before it's cetera., First,

of latest who what's it's permanent on or curious bring the sort the of on hiring what's in? Just So sort curious, there. tech they consultants just annual overseas? Whether from going

question. a good that's Alex, Yes,

haven't seen a an seen have migration California an We active net basis what from for international a we whole. is as on hiring And yet.

a as it's been market outflow remains net is it negative, this -- So hasn't That gotten better. but whole.

pretty So net And extreme number, it's outflow. was the look migration when pre-COVID. an it we during outflow COVID, now to consistent at

that think would do we so tailwind. international, And we good be it a that definitely once have

at see. own a very the just more move-ins, it's at not level I to since portfolio, we terms I'm that been a as meant level, We obviously, it first As far our acceleration And but acceleration. definitely encouraging quarter saw was is But this when between last -- third on move-out, look to sorry, the reopening, then, in and granular and has positive, say and with of continue going California move-ins. so it's year to remained stable. that the the pop

another so And that's good sign.

Okay.

capital Second question is on markets.

guys JV. distress of investment-grade I loans secured did either Normally, secured a You for for times REIT in for the joint guess, or loan in we expect companies, venture asset. wasn't land a that a

like are Here, it markets debt seems open. the unsecured

people your of decision hungry also, unsecured. the out there I were sort bunch a of more imagine there just buy that. who of to curious probably So And are on

unsecured to sort So that and But what decision debt something of the maybe satisfies about maybe functioning to else in be it's do just a secured just market? later that. seems the planned if curious year

the many, as unsecured Barb. That's ammo balance we way this sheet. environment, prefer great for will a the secured question. I market. and debt, that's saw it's do between and tell pricing of we our significant you, the that's Alex, kind we a years finance In many though, been differential unsecured

-- in secured locked to we it X.X%. an been we were while go do XX to If points at our loans wide unsecured basis to would of have bond, So the XX that.

great And NOI equation. unencumbered. secured to so XX% the move our was forward that of is with that so of decided differential side pricing the we

secure us just did. few philosophy. so differential move a And balance our within have in And pricing change room was really covenants we sheet we a there's the It no lots to of assets. way made that overall our

is America. with next from Our question of Bank Josh Dennerlein

XQ? damage strip Just about then wanted if of now, It first to it so storms looks half it in that you the all behind ask impact? flooding is of trend expenses. normalize impacted And the like what by will R&M same-store us the kind year. the out One, would storm could that look out and like was in

some flood you're is again. units. had it are quarter had and in We the from This spillover first in costs turnover Barb quarter. some it quarter. is the because correct. And by a the the Yes, and of lot mind, cleanup in higher impacted It in is also getting costs still damage storm back we second of the second keep

and just that space. general R&M it's within pressures so inflationary inflation And then the --

And three components. so it's

back In of it's increase. out do I get that down. back year, the to drove if components flood, I just come we terms don't have I'll half of me. that what be. really that the all that number front expect that pulled would X of In the though, in of on you But to those

the all, right we here don't of floods. It's now. of not same rainy level a season or storms First expect

quarter third the we last have then we not third And eviction-related in the so costs, quarter. turnover incurring and our comps abate in that third started should the and fourth easier in fourth be year quarter because numbers. and And or those fourth

in and that we quarter moderate the quarter. that third the So fourth XX% should had third significantly in

mark-to-market this then then at exactly to a clarify And imply that rate just question I you I'm bigger can have from you time. occupancy real Okay. I you guess not my does Barb. that, strategy mark-to-market? sure made that appreciate actually set And you shift is, if when the growth.

we our mentioned seeing X.X%. loss-to-lease as rents now, really And -- I mark-to-market, mid-May. about this markets. as some in far But still grow Yes, the as earlier, looking Jessica. our is we're is Josh, switched right

And so expect that potentially little more. to a go bit up

on bit initial a -- X.X%? occupancy? below of Or that of average at time of the it about that the little normal strategy the the Is is year, loss-to-lease Okay. because this

earlier it's suppressed on approach in based the a definitely Yes, our little year.

next Deutsche is Our from question Yubico Nick Bank. with

Nick. Daniel [indiscernible] question. the for ask on can I

lease So XQ. new July rates accelerated from nicely

sequential what sense second, lagged supply have in improvement? pretty just and tandem still do I the see year-to-date recovering backdrop? benign of acceleration continued your And given drove markets to that So it's guess, think are, with you a some curious larger possible in markets

is This Jessica. we by was the large did Yes, a Seattle followed California. improvement, Northern see sequential to contributor

Southern as has California has portfolio California, in as San been performing specific reflects then been Bay And pretty steadily. far strong, which Northern particularly Jose our in markets the over Area. XX% of

strong So prior That one leasing the is demand. strong seen We've office with encouraging, of announcement. it. to certainly we've seen occupancy, all watching return

there's So demand and well Amazon with year these then office return and Google the Area, Seattle as to to last Bay in events. associated CBD definitely

activity we've which certainly wouldn't corporate far is investing so in belts interns were this saw imagine, the an is we're as still is their we as mentioned the on housing less that sign tightening health prepared and work as than certainly they have same demand always be going as the experiencing if planning to in right tech seen Meta, but is And I the I last remarks, of the activity. would September hiring uptick my It which And some anticipating contract year, of employers, in then that impact. and year, in now. big they well. an also, encouraging

had was demand we're then so Seattle And to And office, the returned that touched San the today. a factor. on quite seeing Seattle So well. still doing and strength CBD Amazon already in been Jose has

it most our However, is market.

and the then also our But headwinds and see we it of to so most We good back supply. year the pronounced curve And reduction line I typical expect supply in be half that in rents the certainly there Seattle. market. with have in seasonal expectations do in in

first Some was pushed of of it half to XXXX. the

it's than have but little some what on our radar bit expected, we originally we supply there. a better So still

sense like I'm if stronger but you not have if an demand of driving have this Diego, your sure you markets. which Wondering one employment your Great. answer sectors market assets? a of in San question, to that And then for are

course, as all key education the The hospitality well. of have actually markets and, and been in health here. Angela of It's drivers in services leisure and our the

so rebounding, a with in coming San Diego way. And robust to those more see been back it's activities good

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

or On than property that expected, rates lower something else? that appeal due was the in Washington taxes had to coming lower you favorable or mill a

John, it's Barb.

The in property X% went year-over-year. declined So values up assessed XX%. taxes Washington

when assess budgeting, side were rates knew a but we So quite we up came bit, were millage down.

that's so favorable in the drove year-over-year on taxes. based wasn't -- And reduction it what PL. a was There

think that reduction? a it is run a Or going rate good forward? rate you of Do is onetime more

It's really hard to know.

lag So there's a of bills. the effect in terms when do they

values, it what depends city on with our be does be based X January will bills the that. assess off the year. we millage point. So 'XX and know also those don't of will at Obviously, But of changed this what 'XX which values have last over the

we've are and factor. I that. that's how X% that's it don't but we a don't year. have monitor a taxes X just view a think so wildcard in Seattle know see not year. reduction And if X wouldn't surprised row. a -- I to always But in we Historically, so -- had next we'll forward, way. would good going pleasantly use is I a negative this years

My loss-to-lease. second is Okay. question on your

on your think Jessica think that for rental is to? touched assumption Last see X.X%. a I gone I the earnings. it you trend how rate mentioned loss-to-lease bit, up? I'm given little a And where you year, you market Angela loss-to-lease the go has good think September do indicator that but just this future wondering mentioned was that September

interesting curve. to experience markets, a today. And did half watching too several I typical accelerating But that August we had the in yes, and little to the back overall seasonal and X.X% peak demand that, loss-to-lease grow Bay predict still return we and typically it, have could the out. a of based change we're bit Well, it's in have with that Area week-over-week while our early may season plays see how rent definitely will share the leasing office to here September. growth Meta we've how -- of It on we the or from also be

So at we do. that a in little yes, September typically early. And we in as will short, it's bit look

Just a little context.

I think were until -- last a occurring that -- prior more curve looking What mirror level. but is even we loss-to-lease. in year, X% pre-COVID And the were around this sitting didn't that the we year, happened peak time, around seasonal November. at was we

So of wonky little out coming it's been a COVID.

a past the generally, in number a thumb. a just the And peg want is I good a as couple good rule didn't thumb uniqueness we of it's because of as to point. anyone -- June of of just just rule September, so years, data But

Our is Handel from St. next question

Juste with Mizuho.

is first question on So transactions.

still that As we've diligently But heard mentioned pretty we've deals. underwriting seen you're you stalled.

So to where today peg be pricing spread I'm need for asset the curious you where would to active? get and at bid-ask you more

Haendel, this is Adam.

every the market considerably. of So to in underwriting in And today. even I down though activity expect amount went in QX, the are the deal given QX, market. pretty volume yes, we increased it just be

lot bit-ask of And underwriting now. spread. deals a much right there are isn't we So a of

make. are the think the deals on of many deals will I today -- of the that market most

assumable on location I meeting So specific both there comments, low said what some I be then will are to think whether range in think a in depending Angela minds. tax debt I to And sides capitulation those product, or Xs there's and the abatements. circumstances, opening echoing on and her mid-Xs of be the think going

think So cost highly be back the dependent in really on that's our will I of as where when we market, capital is. as far

the it's mid-Xs So given hard today, accretive deals make Xs. trading where low we're to in that to

act to will makes we so to and sense. when or continue it the will market, continue we And market monitor

Got by region more guys helpful. in your on concessions. by perhaps a SoCal loss-to-lease then around that provide the or follow-up conversation you. and concession and also detailed That's the Can A a region? are breakdown you you're what regions average NorCal Seattle providing

Sure. This is Jessica.

QX in concessions by So region.

Seattle Northern bit look half week. week. little X it's Southern you and little less So if than half California, California, a a a at a over week

frame. the overall. time of keep mind that that weeks was So us And to gets a concentrated in in that X.X April lot

exposed the concessions we the pretty have By of a the with time got the across to to California, exception X.X%; as or small loss-to-lease as XX X.X%; Seattle, May. very Southern Some then no the end much by make like And XX is to X.X%. of our the to up that it's and California, build properties of portfolio lease over far portion X.X% portfolio quarter, that's Northern into so. we market,

what's Great. year? the assumption debt embedded the And but of sorry, this, if impact the back the in then bad missed revenue half I for

X%, full it's year X%, Haendel, a with the bit It's little roughly forecast. consistent under Barb.

Is benefit incremental year-end? You're the That's the of half in expect year? the that the by the you expectations incremental tailwind? back saying that

assumption. No, that's the

the X% assume X.X% we for X.X% X.X% for we like full the X the the So of in of back months our hit effectively assume year. to half the year, full at through year. the We're first year

an So improvement incremental it is half in as back well. the

is Our next question from with [indiscernible] Street. Green

of year? question this Just of up the earlier. magnitude achieve back the half hoping What's on the total follow a in to you're acquisitions,

this is Adam. Robin,

guidance on strategically And anything in we or are the deals that our wouldn't our through cost expect well, of more our that in -- will moment, for everything. to back much But acquisitions deals. if capital, the is intention portfolio, We we've the underwriting sense -- focus I the whether half said, our methods, front. point, then of scale really there this on makes acquire not given to year. like at been with fit existing we other is those of economies So

priorities penciled. -- of scenario acquisition, So you buybacks guess, stack Do how starts stock in in minimal expect up with, development there's terms I no midterm for allocation? to where capital a then do

mean the neutral first of we sheet a stock capital maintain strength want that to to balance in do we sources assess and do our and buybacks our will did leverage approach stock because quarter, I the we Yes. to buyback.

we back the stock, a would of of that something. we that So would buy capital need to and so dispose would continue imply source to

do need day, where mean go it we're that's it all stock. We today. to of on would goal But point, it we Because at buy the value as we find just can line. our accretively. to how do to well. depend opportunities to So it's a external the capital that going back doesn't Adam's via is source And hard that acquisitions the to of the add the will bottom front on can end grow to

go it So all into mix. the

percentage direction $XXX ultimately that And on collect? that us rough what me, able appreciate response. delinquencies you give I you'll then to think the can outstanding finally of a you million for be

this a difficult Yes, great It's some guidance none into and get year. mean, question. it's of is baked obviously, our we'll to But know. I for of that. that delinquency --

they're caught to lot somebody X properties is, in The were within they months. historically. because keeps progress the delinquent, XX tenants months. our they making accruing have Pre-COVID, to delinquency up delinquent, that are X in get go than now until longer We they we if And out are courts out went collecting. a were X problem

of part And the side that's side. compounding problem and cumulative delinquency the the on delinquency so

of what to hard just I terms to It's collect, can't number. In going you we're a predict. give too

XX%, to very XX%? think towards it's hard I understand you XX% to Do it's closer predict. or

this number a that going number because sort delinquent balances, not are not it's of go collect we certainty used measures tenants that know delinquent something I out a can who to time working throw Yes. and with can. all at every there. hard to but after we these I'm out it's throw point. possible just We've to have We're any not

from with Michael UBS. Our next question is Goldsmith

seeing guidance For the and L.A. this? impact pressure any any strikes? contemplate your actor market, from the you writers Or does are from

on-the-ground far I'll Jessica. is speak the as operations. to as This

less to of impact it's any L.A. exposure track seen than X% not at portfolio. We have strike this point. major studios a We the from and our our

effect to to the this a portfolio impact and but There have a it go impact, material ripple specific see And on on comes on going may not whole. so property strike other some at a would to go larger there's if our industries. do is point, time. But be as for how think have potentially not I we down portfolio to the long it really

versus between that's when seeing how the properties. for versus and differences in any Are question, you between And tenant my trending demand trends differences A in quality at B context. quality helpful That's you follow-up B or look properties? them? A Is health any there

Jessica is again. This

in A location. performance. difference really do It's far versus not material more As we see a as B,

of some we to really, is properties. in the of as So And suburban, bulk concentrations that's concept. And look strength where supply in our think our locations. the supply to portfolio urban seeing urban I is and suburban the we whole have these versus back suburban are at market attributed versus of urban we well. When

see So lag. Downtown that's West and Diego, we Downtown L.A., rent would L.A., where CBD, San Seattle

the suburban difference. versus urban we're where seeing is So

Nathan Our Baird. [indiscernible] is from Robert next with question W.

Can speak San is to do see what rebound? you market or And the strength believe be you which driving to in a the will Diego? markets next

Jessica. is This

phenomenal Diego market San for yes, has been a us. So

were some area I that think as of benefited pandemic. and rents industries popular life. underlying And relocate strength earlier, great overall a during Angela It there. to was have the it quality employment there mentioned lower to, is

has So been continue San expect to we well. Diego to solid, perform and it very

are As other Area strength, eye the have far Bay up to Jose. back as that my I markets with showing on that of signs go San

definitely There's area office and supply facing to with to relative And But strong I'm anticipate seeing been then in us. of course, next the where couple Seattle we're as we a and we're when year. headwinds what that then still Just that's pre-COVID return the market there, reasons. for continued up be you at an with reiterate that to well similar the upside over there some for going there recovery to rent.

at There conclude today's This time. conference. are this no does further questions

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