Essex Property Trust (ESS) 7 Feb 242023 Q4 Earnings call transcript

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

As a reminder, today's conference call is being recorded. Statements made on this conference call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties.

Forward-looking statements are made based on current expectations, assumptions and beliefs as well as information available to the company at this time. A number of factors could cause actual results to differ materially from those anticipated.

risks SEC. found these filings the about the with information can 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 you. Thank Ms. you Kleiman, begin. may

performance investment our a and Overall, market for growth transaction for with revised the on joining morning, XX Barb points for is will of achieved comments the a guidance was for Jessica We for which key with basis follow Q&A. year our higher X.X% thank strategy. XXXX, solid and line XXXX year, by Good remarks, Burns XXXX are Essex's highlights revenue with than Pak Rylan in and and then prepared midpoint. Anderson Quarter the expectations the Essex. Earnings Fourth I full same-property original followed discuss Call. our you here will our start

reducing made results across of down from operations the teams the X% substantial in you. progress we and and job our year-end. company. Furthermore, are thank as by in rent of coordinated team, support a efforts over the well X.X% These quarter, percentage first hardworking delinquency Great to of the

to the delivering X.X% per bottom increase results we a our FFO drive high share, in range line, core end the by $X.XX. Lastly, year-over-year exceeding of continue guidance to original

with the quarter. consistent market seasonal typical We generally fourth to moderated pattern. Turning deployed as an strategy rents occupancy-focused

October. we of recovered in units addition, In a number significant starting delinquent

of nonpaying X.X% rates, headwind negative subsequent during which backfilling temporary lease to period the expected, As new a quarter. for seasonally effective the units a slow net created averaged

increase the of X.X%. resulting among of strong for in blender our positive the front, in trend quarter, the On with continues X.X% retention residents, rates an renewal rates positive generating renewal

the in of rates by half As XXXX, new usage quarter, net occupancy leasing solid sits basis lease In activities position and XX.X%. FX a in January, decreased financial XXX points by improved concession fourth our our markets and we steady. is start

outlook for earnings our XXXX, to outlined on in Coast in as the Moving West package. our

normalize in the We expect U.S. outlook economists' with economy a landing. consistent of XXXX, growth to job and soft

growth of perform the job macroeconomic assumptions on average. jobs growth the national produce rent X.XX% forecast of We and West line the Coast consensus modest Essex on our key in markets average market U.S. are The considerations quality with the to on outlook. to to

XXXX, the did sectors, the not in was meaningful growth. growth concentrated rent largely which In employment yield service

expect and this to as hiring We remain to skilled muted of continue dynamic workers priorities. assume companies currently needs labor their and to continue, we highly evaluate

XXXX could are While tempered base more case positive factors there for reflect several growth, that scenario our support a outcome.

First, economy the to Fed of the skilled the inflation continue could tightening the will increasing that from capital cost as becomes more reaccelerate workers right of and to could attractive. pivot highly gain likelihood direction, easing. momentum in move hiring Accordingly,

Second, the better last and XXXX companies of significant through and are the today advancements technology companies of at business end part stimulate Therefore, large these implemented the lead year. growth. labor early to equipped retrenchments

accelerate navigate term. projects, confident larger artificial West strategic With in rent levels view been near-term are market's point, to demand housing our in low Coast. talent in modest long-term scale long supply the toward plans we in announcements economy, investments recent to much outperform companies citing the To in a the to this in volatility for of which increase smaller a Despite and markets, could overall growth. our uncertainties ability redirect have benefit intelligence layoff and with as we

on X low Our housing is affordability. favorable supply based fundamental factors, and conviction

ratios owning per growth Northern annum, a considerably markets to the our which affordable rent-to-income environments. Over total regions. long more Essex generate in support than the runway is next especially of less rent us positive for in favorable rent Also, X growth, a years, X% we most than growth in expect renting home, enables and supply

such, expect multifamily to housing. demand rent incentive and for to drive persist the economic we As

Lastly, volume, primarily in markets. to the capital volatility strategy. the on investment due market transaction historically year low and significant a XXXX our was of

between throughout increase Although from decline XX we've wide, the to seen fourth basis in near rates volume now quarter, interest sellers yield deal in are anticipating and buyers thus, term. And markets. points a our spread XX approximately the remain ranging significant we in

very are in been markets sellers generally currently. have our debt feasible, maturities and to accommodating sponsors when Lenders few extending there force

historically uncertainty there the growth. of certainty shareholders significant less Given market. during Essex external value in has created for thirst points, our transaction that of is data through is periods the It

As acquisition such, for the to generate risk-adjusted our investment looking team opportunities is best returns. proactively

Essex's and expect the be With sheet creating allocation, will to market call long-term capital key balance I'll strong deep value. that, to in expertise differentiators approach disciplined Barbara. We turn over

outlook revenue our our for factor Angela. to key Beginning XXXX, assumptions a the rent will an Thanks, Today, on to I guidance our forecast market the growth XXXX assumption. balance sheet. key discuss and our update with is provide

below leading mentioned, expected which the growth is backdrop markets. Angela is year, As rent for be to average this muted our economic to

As a cash at a The midpoint the of growth result, drivers the same-property revenue basis. S-XX.X outlined on key Page growth revenue is supplemental. tempered at on are of X.X% our

a full to of represents of the year-over-year delinquency assumes rents revenue guidance X.X% growth. year, basis schedule XX improvement which Our point for

we as the will move year. improve We gradually expect delinquency through

basis. Southern of a terms X%, Northern led region, around weakest will be Diego. will performance, will performing California San our our revenue X%, highest at we expect regional County to flat Seattle forecasted and Orange be California which is In in on produce by year-over-year growth be

to expenses. Moving operating

growth X.XX% which We by the driven costs. are higher largely insurance was full year, projecting for

we our points compared XXXX. growth. the small which for on FFO increase related a premiums, Core our total which basis growth higher are and preferred forecasting be driven in would are portion increase XX forecasting for controllable the a same-property higher, to to growth we XXXX, our expect insurance account not primarily if core X% XX% total per X.X% managing costs our be equity The operating from over at of to focused total, of to growth platform. remains Although FFO wages. adds to company expenses, midpoint In we impact in X% expenses, by share X NOI flat items same-property expense

First, are we anticipate in funds the and FFO but tempers additional million Essex. we for forecasting December, an redeploying We is allocation for proceeds, decision million new in which redemption acquisitions, in growth, long-term year. the $XXX $XX capital received our near-term redemption proceeds this best into

remain in taken as a quarter part to on the how the as X portfolio approach financial Further, based lenders, senior with we Second, accrual market remainder on projected conditions. prudent the for we we've the while our our XXXX sponsors guidance. on investments fourth obligations current all status income the of changed of current

the to accrual of status on quarter continue will preferred investments our every each equity as appropriate. We evaluate

and Turning minimal to XX with financing the the months financial balance position over sheet. Essex in sources capital. a needs next is of ample strong

are us. Our to and to $X.X we manage for needs with over EBITDA the the see We well available to cycle, our positioned to call I year. create be questions. billion we now opportunities that, this liquidity debt value the back invest turn balance leverage and will levels operator solid we sheet and remain to will With to net of throughout at X.Xx, have capital conservatively optimistic,

Markets. [Operator Instructions] KeyBanc is Austin first question Our from with Capital Wurschmidt

relative new and renewal and you thinking the assumptions are rent guidance lease into through that are X.XX% Can for what growth cadence how the of about here. your share to year? growth you're digging the kind rate Just market assumed of

Austin, it's Barb. Yes.

the above our be X% that slightly half and back growth year first X.XX% growth new and X.XX% expect of So renewals, at will above lease we're do to We the to we assumption for rent growth -- in the assuming the in in expect year. market the half down range drift low of be X% of renewal then be X.XX%.

there just I guess up guess, and that's really concessions I quickly that tight driving that, in burning spread or impacting, assumed what's the new on anything renewal lease your guidance? Are off following rates between spread?

Yes.

we I at really and that if leases renewals, not growth. of to so to think to market. do not rent in I X.X% a And a And on of burn-off year, concessions January, you you'll have market new market rent last new on see philosophy or it's We to is push say want but didn't lease. printed appropriately. like is loss significant them would renewals we -- our we price XXXX, XX% them So look above

so big this last And forward a from spread and don't we have differential our renewals carry between year year. would new into that

So it's appropriately. priced we think

you if financial more. market recognize the around look can I in report out guys break rent impact but change a you effective from from net And like maybe concessions would guidance the if could on impact concession occupancy, and and then impact the you there. one basis occupancy just what growth I sneak included

Yes.

expect occupancy XX be year, point concessions and the be occupancy to this on piece forecast concession we points. So to XX the a basis basis our concessions, to headwind

we're occupancy. XX.X% So forecasting for

So year we impact expect concessions basis. forecast a have don't this material on to the a to year-over-year

Our with Evercore ISI. Stephen next question from is Sakwa

that that for delinquency quarter the up the I overall better S-XX, basis I what big pop? about fourth tune getting the January delinquencies it's a on just know slide, the provide in to talked But can XX points. trend guess that color the was I year, think, noticed in jump there I you you full big And and between of January. showed

the It's holiday. we've Yes, this post Barb. several now. years seen it's Steve, January, for

I are off whatnot. paying people think and cards credit their

we it's something to up go our year, seen you January. supplemental, year, increase We're So that But from it not look if we closely. have QX this XX. back concerned basis and about. last we're monitoring points you at XXX saw overly This we're

we're a year So we it. a but were lower than lot monitoring it is ago,

you've changes. that any your scrub out couple your then Okay. of on talked do you you've about how through kind the mean sort underwriting future of $XXX are kind DC the guess, sort I I write-offs? things sort in pref maybe I of Like of roughly what the you And a book. gone terms there million of and risk -- on guess, as And handicapping you some see got outstanding? guess, I just for of the of just of just,

how Yes, a our at And what's for maturity looking we continuing -- to when when are they our is investments? we to equity sit sponsors recover at Stephen, the approach look we're and have do and Barb. really What what today? preferred doing? last the at variety continue where this. market We And this of take we, look dollar are time to a our market book, factors to our relative is they put much of the Are prudent can where we that fund. there's is

looking the at. are that So those factors we're

the part, have our assets as market most current a we're we on handicap book today based But we performing within think see that is few conditions we expected. It's fully for I monitoring. the issue guidance. the

next Scotiabank. is from with Nick question Our Yulico

Daniel drivers general on were line Nick. largely is that Tricarico which the to new basis Barb, respect market know in the lease XX burn-off, typical the concession in mentioned I It's from for of in change? point largest you And markets seasonality. rate with growth improvement with improvement January, but improvement the

This saw Northern the greatest is the driver the Jessica. it burn-off. of regards Bay concession large a to QX of basis the was from January, largest improvement to With that in that. and I'll We was improvement California XXX Area. take And part sequential points.

points break down in a total improvement, point it improvement XXX XXX For is you the basis if the basis concessions. portfolio, of

it, then in to averaging the what time half would And So growth, week with is basis QX a points of XX that's we and is of attributed which rent January. year typical we historically. X this week expect a other part were for

partners your about thinking talked from other capital are follow-up. Angela, pref in How you growing are opportunity along And acquisitions or how today? remarks Are use? capital about optimism future recycling redemptions your the guess, in into a you acquisitions specific market opening JV You deploying same into I equity the new around thinking seeing set. believe I lines, today? anything about your

good Yes, that's question. a

it was quick complement me book. And a background thesis our intended As this development investment far reviewing how investments. give let preferred you just as equity was for on to pipeline. The vehicle we're

rates During a rate were yields low construction and rent than and accelerating period interest a significant growth. were at where higher costs

to fell XX% So saw in XX-year that environment, attractive. was low. a us this the more And you leaning into when business yield relatively historical

rate are and The general very conditions environment interest different. today the market

rent so markets the And to over long upside growth more view in that we run. our there's

simple these more relative the focus is So value compelling on to acquisitions.

speaking, you And So shrinking because relatively look as intentionally, at preferred probably the it rather this the company. will rent upside book we're our is growth. if reason a way to to more all but in doesn't mean that we to drift that the market, acquisitions book speaks the from look as lower it grow equity fundamentals

much Affordability northern best this position tracking metrics we in is since metric started lower we have our especially we've the region, So in supply. seen historically.

And if you yet still so in the there's of -- rent mean And optionality. has the companies recover, lastly, in I our composition the located markets, to a the our is there recovery look have the phase. are of looking seventh largest, demand in of that markets, largest deployments. the and and companies X companies out tremendous to infrastructure committed investment and have these wealth and -- are XX at amount

talk the you the And economy blocks, the a growth about the shifts from Rylan, acceleration once building to and economy it's economy. on if at you it's all so right a And IRS? look IRS, to want soft do there for

have in and that committed partners. mean, business to along thesis venture investment a our for several At we joint Coast. this long high Yes. time level, been the West us a We've I remain

there And we see if right would So some X. is will we or see there next we the year demand in opportunities. the expect opportunities

Our Eric with Citi. from next is Wolfe question

between something similar improvement I saw ago. in January Northern California their call peer, mentioned mentioned the think you and XQ on that your a just just and you largest moment

California, a why curious period. to just was growth recovery environment in throughout I of seasonally sort year of So this if during see rent see sort weak Northern think you of the signs starting already the you're you'll muted

-- rent see we Eric, upside. to we companies more potential resume it's tech really that will it's when said market Having robust On our here. that, do in to it's at a Northern require the growth, hiring Angela hire California, way. -- -- look a their

by function the cannot a And outlook it's so North of the from the And country. itself region of of really because happening the the what's really market we Cal because particularly, our supply. is Oakland in dampened of rest general forecast amount with disconnect

and X.XX% it's well is is so Oakland to And so just is environment. composition, Seattle rent closer given a Northern portfolio if you Southern and below all, market that leads that first above because and of X.XX% economic the is California range, the X.XX% below narrow overall look that's our But at close drag California, But the X%, that average, the really which second. X%. a

So that's it's -- the drag.

concession couple the as you Got of then you your off? harder? when it. for burn does next And of get off renewals That's far sort months renewals, And are sending the exclude helpful. sort if as to comp where burn the of that concession

burn earlier, is this far XX-XX, Jessica. off, as becomes it's now, to as Eric, renewal Barb it we regards mentioned through so burn-off with it concession right The progress QX. less -- roughly as and

delinquent as think year, free with last week and half last year, we dealt strategy concession were I Our averaged we some lumpiness there units. roughly

It's So we way. usage XX-XX, March and that said, than it up XX-XX. to Like we forward-looking show of and heavy will with less it's more probably But to a may see last little continue February I that out regards progress we've at unless have periodically. X%, pockets X.X% from concession and year. sent roughly bit renewals like

Goldfarb Our Sandler. next Piper with Alexander question is from

X So a few questions here. --

First, S-XX, brings I you the that's like and provide, I simpler do good. much focus so to it's data the the think that updated guys just

So here. X questions

just it deals cap walk that read stack. such. rate how pref from pref low we through investments I'm does it sit assuming hear not walk can the the how sort the being Xs, deals as cap or equity revalued underwrite through what But equity of think your And associated should at on X like First, or peak book you X in the you that and and to guys articles book, did your where debt. the capital about you we people's a low just perspective? and and cap about underwrote into Can stories you

is is we comprehensive is the we're Yes, model is There's is debt our reserves swaps Where every their is their of lenders. a to also have their where is with transactions and that Alex, occurring? continue have focused question. where asset Barb. and quarter. a what parts shortfalls. to really this as different. And We're every we dollar last moving every sit? And looking on And What response our maturities, asset what strategy value exit fund they to at equity in place as interest -- is where are well going their caps lot

Northern rest there's few very accrual on we're quarter, and do the are So And stack, go others. But and reasonable the it. we consistently in of at and a the in even book. We on with of assets. the valuations we've scrubbed They we've for a our variety the we're of where got were the that factors were others part, out were redeemed watching book redemptions I we concerned one of stopped into it. given not closely. think most California X in fourth

of And that and We the so our about and to asset. found book, to an our we not we've back think of feel goes guarantors. take underwriting had disciplined I good solutions the rest

Okay. clear go Northern I the in they're on you watching, then to I not paying X and those And do know you on they're nonaccrual? be Barb, nonaccrual expect think, were so that just on you're to the other, precautionary that, just California, or

those assess near-term we're current, that in as And ones -- with They but and fourth the them monitoring, we have stack. X we're the weren't we'll required that quarter, refinancings. are quarter-by-quarter. put well on in put other maturities where we working the debt just we're sponsors we on on They the nonaccrual the to So nonaccrual. then them that pay given assessing

it assessing on we're in conditions. based reserved the but have We it market guidance, current

weak, Barb, fine. is the market, is Seattle Area guidance your other then, you week Bay is described hearing the have on how front, one. the Oakland Okay. but And just guys

obviously is Cal great. Southern

OpEx You're what the COVID is. recapturing units. The it is

very is what have of it described supply and like rest from sounds little fine. the in You outlook portfolio, the the Angela jobs

it any like there like sound headwinds really in addition-- doesn't your many are So there portfolio. are

You don't other geographies. have the that supply are or markets plaguing issues

as as there you landscape is much at we So headwinds outlined be about any the is -- far your are that year. looking guys this pretty other thinking how I've are what Or this should or earnings?

it's Angela here. Alex,

aspect a as to see benefit and we delinquency. really think I see we the that on much portfolio decline. as one as the business you're is the variability that we has begun delinquency process is to would supply is that There don't units. of how do like on that far that very because have subject for -- our our long are relates court to these We timing to we us. as control definitely And it the takes portfolio. are news have we a The point stable good process how timing that, for is

about So currently, to when for to months, year, L.A., XX we're talking X to to took months. last example, X down down it months. months. Everywhere else XX it's XX about to we're used X And now be

making concerned. So there, progress as an that open far as remains is item the us risk we're good for but

next is from question Fargo. Our Jamie Feldman Wells with

more I just a little to on wanted your comments dig insurance. into

weeks Or number? does said all? Can of about this of is XX%. it round any kind the what at we've last there? you storms definitely more that the that? impact you're seeing think to just forward-looking? Is And variability up over that few seen Is last I talk there you

Jamie, it's Barb.

December. So we earthquake and renewal in did insurance our property

the move baked that still we for have to much. is general liability, our but needle We too number that year. So the fairly don't

insurance within based appropriate captive where that as a number. think, is utilize where on premiums could minimize captive. is do a and captive insurance I we we the our challenging take to have XX%, still risk would So the and appropriate the market, and we very we It the

still future. minimize is So we but to angles used foreseeable that I going be challenging all to number, a think for it the market

carriers year still -- but will the In terms is impact do ] next won't number of this the it's the storms that undetermined. [ year, what

for the I storm And We've a damage, to minor market we back nothing some material come see start big to the in terms had way to material. premiums down. we anything think that some obviously market the things, insurance into of in the but come is to storms. what had related in reinsurers leaks need haven't the and

REITs know total there's convoluted. percentage seems Okay. it's of liability a That's exposure? captive so company just like or does are of like fall give helpful. more every of because coverage, a that there hard your to like more. quantify to the waterfall tranche what so Like I number to captives a wonder way versus third captives their but there's a I benchmark the at party? if on way their seems using It more growing and is

and layer I because Angela loss it's Yes, one looking Everyone that's even then approach are quantify to do and it makes here. That's tough the so. to differently. take they more there that a sense -- how think REITs though first first at captive

don't way know and I We'll some better if there's a so And it you if context. get can look apples-to-apples. really additional to see into provide

is And major third we've add backstop on have have. of that we paid portfolio would the which just the premium parties for decades, captive is and loss $XXX marketable we we insurance over other that to have securities would million that to any that there a are I had a thing

sitting there because that. money of of sheet amount substantial a on balance our we So

necessarily? That's grown very recent years in Okay. helpful. or exposure Have the you not

Not necessarily.

on flow earthquake premiums and sometimes the earthquake there will be We the that coverage are ebb earthquake can because out depending extreme.

do that all a we have we and stories different will real in [ earthquake But third-party taken of in the significant at we haven't on So enough. risk that, rises way, ] any last but years. X high outside few look on

Our with next from question Kramer is Morgan Stanley. Adam

Wondering between to renewals? use test average even historically prior back run what the spread new long were I whether to versus or a kind over and maybe talked it's been spread. of recessions but of already, go bit about little new case. the wanted look wondering a you know was just the that as kind you and just kind renewal ask of I about to of it's And if kind

new year's here. it's is. lease rate relationship between renewal -- rates Adam, and That one lease driven by what prior Angela really new is the the

of So for rates new XX%. example, in north lease XXXX, our were market rents or

And of that, take means so rate renewal to higher a that it can much you have course, to market.

driven really effect. will the relationship It's is that then lagging follows. really so renewal rent a whatever And by to and be going be market the

So number there relationship trending other, an purposes. peg use really follows exact is logical the really benchmark just there you so a because that isn't can it's you for just much that could as that not one a

Got the Coast, outside it. That's really U.S., of know the helpful. question. And maybe about just kind past. back on the that kind getting the money kind other markets you dry take in be markets in of from from look asked powder, other some that look pref of I a equity, And equity, would of with the back than you that maybe markets you having asked more West a kind hey, have getting outside little of, of proceeds Coast. may of harder word West more and enable past bit kind figure so the in at you more at you right, pref And to I'd could more

good a No, question surprise, actually and basis, we to on regular this I ask. is a question. Adam. have that's a get fair it's this not We know --

our markets, just a own We not to it have within evaluating markets. disciplined comes historically approach when

as sure are markets make fundamentals other And the have a the the across our of on U.S. study so look what to handle that well. driving good all of and at we major it's we metros annual part do

venture And is or so proceeds into to we available. this take not that other whatever wouldn't markets say

catalysts the fundamentals really I earlier, with It's metrics, has lower markets when recovery these risk much how large the just as upside potential function is from I more a we supply. at fact with And relative of we affordability and mentioned value. ahead that that speaks low us mean look from demand view of and market by our and the companies supply what of that our to

And our more compelling markets. to it's focus in our term near in investments so the

and the other relative course, markets continue that that, of watch will, holds. make We to value sure

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

you're year. to your right sending want full just assume I guide go X.X% the X.XX% is to now, at renewals X%, that your back what comment for out

of X.X% have through things you the when because half off. second can to some just think rent weaker actually us the I to assume the the that walk cadence I rent of maybe trend of for when free the your do past But year that we might to burn-off X.XX%. start burn is with get down than and

Josh, it's Angela here.

We are burn-off benefit start begin as to seeing renewal that mentioned, we of And the Barb quarter. concession that as to abate into X.XX% second rent. to rates that to why, see you'll the to that's head the converge that market

that's hopefully, your answers -- -- cadence that that's cadence that So the question.

good. Okay. just one And Yes. No, more. that's maybe then

to X.X%, same-store blends focused walk you through of basis For revenue high XX mostly range, could the the of get same-store assumptions that? like on assumptions points revenue the us that underlying us and the to end occupancy range and low

lot There's and different Yes, Josh, Barb. is into assumptions this the high the low of a end. go that

back impact, got an a in demand of those get us delinquency in we rent the high saw impact when biggest temporary and a occupancy market quarter growth -- quarter it can lot fourth low back the have will we drive rent units, think and end. period. as a to like factor when the or delinquent the low or to be I if to either our could units we the third market we And that

So there's and the low of on related high that to end. a variety the assumptions

with Wes Baird. is next Our Golladay from question

the investments? noncore you then the $XX comment can us Can X on nonaccrual balance you million G&A what on also And the year? give charges this

Yes.

that's have million balance for we put the both the and is on in $XX million $XX political nonaccrual, that contributions. terms So in to the related that mostly X we our of guidance,

know, you ballot measures. As couple fighting a of we're

So that's of what for. most that's

level then portfolio rent still supply low you. picture, X%. bigger heavy mainly blend relatively down And just guess, it the it, I Is for that call is -- Okay. markets the low and maybe at bringing is with the growth supply

being job also about earlier the comments service-related You by in growth something the is driven mentioned jobs.

mix is job also playing So this of big forecast year. wondering the if part the I'm just a

Wes, on of couple the a it's for factors. our guidance, rents

service you recently. last So which job the the sector announcements -- reevaluating. retooling seen is has what first growth -- jobs, all been dominated And we've the and year. which The mentioned, companies of are still has lots

typically, the look our those and want wage at composition, so growth would normally, of about higher of the average you come to And jobs jobs. you long-term XX% if from job

getting so with wage this -- And the the landing, macro certainly wouldn't a forecasting. be soft environment, robust growth. be in high consensus ahead We we job wouldn't which consensus forecasting of of them

that's one factor. key And so

right, than portfolio, As X% it's California. far our for as year. last to supply, is only for close elevated and you're higher and X.X% Seattle

for in and us, said our temporary to mostly and the see under -- that will supply, assets. properties downtown portfolio Having on will mostly some for basis impacted that will that, be those is have Fortunately, it's be by there concessions Eastside. concentrated a we'll area elevated

is next Our question Green John with Street. from Pawlowski

follow On a of and dollar you Barb, values? your loan prep the able in up in basis on rough I safe. your Are preferred values, on comments third-party is process appraised equity your to real your average kind quarterly to book value values not now? book lagged sure right wanted share your making of remarking to

asset. have don't in I I me. front think And by varies it of Yes. that

have plays about into each That scrub initially. But and stack. don't we've matter front we capital and seen do me. the are the I comfortable book. growth how So I of we like underwrote that does feel we where in each fact property that asset thorough all said, we for rent in with it in a it But the

guys out? have of have How much written teeth able rent not written collect tenants Barb. have I'm had after scores you One to good I from moved actually and cumulative just any, past Okay. balance? the how credit sense that you, to -- much have a go from rent more kind how much if collecting you're don't of for off you off huge success,

monthly Yes. small It's component a our of collections.

we rent and they we -- reserve pay. bit every they on we account days, little credit you're month delinquent if whereby their them. gone and to need when after against will a XX and and how their the have But hit of start it collecting debt, are credit We credit, because their conservative bad our financials, we in for after due past that to because approach hit go

be drips $XXX million will over So to for in a but part is moves -- account is and given It it's the will month-to-month. but it around it of And small a have reoccurring quantify, income how we But foreseeable uncollected our hard will given be future expect it it recurring it a and be lumpy. rent. it, we do we've part part, drabs. for we

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

prepared announcements forecast wanted year-over-year. bit go the your of come a back a quite in to layoff to ago. Angela had which year for X.XX% rent I remarks, below market the mentioned is down you what year, have

you due are wondering, this layoffs just more like a to actually year was lot tech I So move-outs a it were seemed seeing year versus more ago job losses when prevalent?

it's here. Angela John,

we When that. relatively and loss, seen it's We do to track more we have move-outs move-out look reasons, at stable. not job

to And really where so function economy economy. believe how relative the overall outlook is market we the and is would perform we a our of

Okay.

projecting unemployment moving up? So rate just

And Yes. think, to that. add I John, to just

the as think -- year is that And mix I economy. mix in we of change in been the that, I that mentioned in a seen given -- the been last this we've jobs have high-quality not mostly added service see slow environment don't just think as Angela changing over the jobs has earlier. sector,

our this it's case not upside below but point. would that's could So That that what's driving at change. be the the forecast, average. base to And

that you position still off the loan was other due the in fully to you clarify kind this of -- have event? was Do impairment in Can a asset? some recapitalization on or preferred? your written Or had I it the

We a still the of this recover. GAAP with do our consistent have term investment term, we our don't our it's And for obviously our feel market market that We in we'll take of the market time loan But the in year impaired which in rules. and but Oakland. going end of we're to and believe the because and very long asset accounting asset, the is because in to depressed valuation loan, by the our fully long of we the realize maturity October term our in investment matures asset. --

in to We and 'XX happen need which up. abate, should to 'XX. rents into will see we bring start really supply that And

The with fund in and into investment the here are working our fall. will And money and shortfalls the continues will the to sponsor long putting we actively so that term. is coming that help refi equity actively project, them up on be

of take the more ownership put What capital project asset? the likelihood you or the is into

work the refinance. through will to response determined as I refinance based think the be the on we sponsor's and that

premature through we more little too it's that. as talk to a work summer. We'll So about this and that early know

question next is Our Goldsmith UBS. with Michael from

the in combined away suburban properties? trending tours And like can supply property in be like that the draw How a helpful. if number to from of residents Seattle, in office in the Like with that is demand market increase core quantify does your any way, more you would Essex urban return markets?

markets. as guess, Michael, is things this looking leasing would is expect Jessica. lead leasing how year and of can as we're is our like when of provide I going Right activity stable. expected increasing, it's all as markets. some is in also which then trending our what really volume I you far time are And now, we in basics, steadily fundamentals this overall at

are that's we it mean, that most expect, we growth off. markets. goes, seasonal that NorCal in to rent increase both our that concession we growth we whatever in that As far in is due Seattle. out And pointed as correlates burn quantifying demand course, something see to good I that we Those see. saw and And sequential would really earlier, part of

expected, what grow as basis. in line time expect of a expect them year. they're with do to overall, we substantially more So would at the we But performing sequential the on

does is traditional on in rent create noise markets? a it. control year? And an a your then it's more question than seen follow-up my Got environment bit And that given the control. that you in election change any Have little year, rent

market control an we're rent elevated the environment X.XX% an in when looking conversation. concern where at comes it Michael, rent expect growth, we to certainly don't

by this of will we of of you that course, Foundation. Head Now do and the think because a in have margin. of coalition XX proposal there Michael repeal we, -- in defeated, was that And there that time not I the to Weinstein, -- again, there it's supports to And participate repealing favor only traction aware sponsored Costa-Hawkins this the counties has times, was the X Housing Act are voted is the this of that is proposal third Costa-Hawkins, repeal and X out come AIDS proposition is, past and they by narrow in Costa-Hawkins up. overwhelmingly view responsible out it many legislation housing that the a

proposal housing is it will the political when we governance antigrowth deter general that as shortage. a lacks housing have already And viewed it support, and an production

And that carefully. are normal us But so that that, that's from for perspective. operating beyond we legislative a -- but watching that a one is environment

luck Good XXXX. in

you. Thank

next is with question Our Rich Wedbush. Anderson from

the sure market either not I would saying want the you that is what rental rent. a knowing factors Barb, more and imagine wasn't or into just that units would delinquent swing it Because hits. understand make there. something Is what obviously, opportunity I I it's getting So paying And a said one X of that you it? just present more. the But that perhaps unit when you're itself. be matter to and delinquent something logically back in for of downtime

Yes.

October. example we hundreds of what and We happened got the of units yes, or So can in back take September, occupancy.

about our delinquency when on we our growth. backfilled, we also And then but dropped gave dropped back points, rent commensurately. the XX a little occupancy basis So bit

give headwind, to period impact if a get units all the low then you Does during bottom there make leasing be but and season, didn't have fall units in we back But demand the will line, those And sense? have it's so If growth. to a bottom impact units. there leasing and you us. was less to a rent term, concessions get occupancy for we peak beneficial temporary small strong especially the because it back line. Long to is backfill there the that season, to a

way? negatively impact the rent, would weren't what coming curious, a something rent there would I'm if they I'm number occupancy more. either X be It that scenario. who in in paying was be any would or just Why I negative if not there an there were why understand sure X cares

Yes.

your number now, something. So perspective, I we're think is question right -- going the absolute your from from from to X

zeros are assuming -- we Does to get X. Barb of below that keep which a be need just can't you positive the the we an number, to into in be outlined improvement midpoint. in will need mind, convert So means way to But delinquency, has guidance, those at do some help? we

Yes.

an rent-regulated seeing to so that degree was what as bank was and in to New opportunities? then covered York we've a sort of position Okay. Is of there you're where I you a is these building Community there you? this as -- for. and rent for of like situations, it the And I'm Yes. to California jump area, point that, Essex. distressed -- phrase, -- can it that at maturities Perfect. are if not external really popping I and happening anything of pipeline That's apparently And seen portfolios of that are is I up? with Anything in opportunity coming. touches curious Or on in sort earlier, apologize. problems looking can is multifamily, this there Signature in But regulated is what industry and assume. interesting growth so it's -- sort on, the described be

be coming we Rich, really there in I'll in have the our as markets of peers much the what said selling. have we're of some opportunities, couple currently all we distressed debt anticipate of yet given years, see selling many any due but next echo should of our yet, amount not is seeing to at force

nothing for of yet. So opportunities, eyes open we as looking but are and our keeping

Our next with Linda question is from Jefferies. Tsai

receivables, in away can Or collectors are anything different money million operationally there ways $XXX do just the to you to of like back involved? debt terms tip get get In faster? your that, at

this -- are is we Barb. Linda, Yes,

every and bit their are we when pursuing collecting they are to to -- pay, like but can for We but sit credit every when a long small money. they come then taken are their a try they tend if And -- to on to here court, there. need avenue whether credit, on can we their avenue that little to they it and on there, then collect we money, that don't we've collect it need need out it pursue, time, being But to try credit. depends credit and their back be pursuing claims

for you the demand the where determinants get period Got like what for it's forecast those how then getting terms units you that are timing of in low some back? a can? more back in extent to of And And you the when just negative do it. units do of you,

these -- Linda, here day. them units those $XX,XXX is would back. do it And be get at a get when as looked in darn leave. us, that's When that of eviction fourth is The question the tenants possible. challenge quarter, once as to of we for the the back unit the we great majority just soon

site going the marketing that is out, for coordinated all and move vacate. noticed personnel for normally, pre-lease is those a ready we units. plan in course, us, for normal is, We So turnover and efforts logistics. what tenant can of move-ins can means have and that a environment, We to a these our

when, In to pricing that's in creates to or back have certain how predict. when we of part we it going the evictions number a comes are play, that pressure very and and it's a difficult where come that don't situation know many to

from next Horne question is with Buck James. Raymond Our

or on to going Is if little social this misrepresentations -- maybe spreading if issue? identity delinquency becoming seeing color kind or structural of types that's application in wondering was a something of that's other the application or a more just I tenants? systemic could you fraud you're fraud by if of media issue, any upticks add fraud

Buck, it's here. Angela

has up a or done it become has our immediately potential elevated. team the of these ticked We -- it's have if we look some top a when specific remedied staying fraud great in And instances, not job on those. building say, been we And instances, issues. issue, at

that our behavior to financials. it's so driver whether a impact really been for hasn't or And

It really time. the by core processing driven is

us months if Because give in right, tenant I'll example. it you evict about, X tenant. the average this court say, you're an took pre-COVID, only or plus, delays, to LA. of the goes X When X months it's So delinquent, months on

And accumulated. that's getting the so that's time

longer. And it's have taking delinquency in because portfolio, our just elevated now but a of normally level so we it's

Got you. you. Got

significant opportunities it helpful. yet how as to think core in still relates be a upside suburban of between in just You're and your achieved saying That's future to investment about opportunities? Okay. you markets? kind And capital urban allocation of assets your Or or lot there's recovery to first? some outperform. core the allocate downtown to submarkets and San potential. Is additional markets Fran the and of L.A., Seattle. Or Coast West where do suburban that you the dollars you Do cores that think you to urban applies would would continue look think

you Buck, it's returns a investment what good driven by pay. question. Obviously,

is open us near existing lot our when something collection. market, model. any that's also buy paying to and value unique operating for A can attention are our acquiring sure consideration major investment. making coming mind add So we asset we a when We we footprints, existing it's to an keep an near given think we'll purchased to that of everything are we

the be to They life as happen also the majority primarily those market, and in know, where focused. is Now suburban fewer that assets you have of currently. we're of issues quality

markets. broader footprint, focused that keep to but suburban answer simple our we anything will a our So very in is we are open mind an crosses

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

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

Goodbye.