Essex Property Trust (ESS) 1 May 242024 Q1 Earnings call transcript

Good day, and welcome to the Essex Property Trust First Quarter 2024 Earnings Call.

As a reminder, today's conference call is being recorded.

Statements made on this conference call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties.

Forward-looking statements are made based on current expectations, assumptions and beliefs as well as information available to the company at this time. A number of factors could cause actual results to differ materially from those anticipated. risks SEC. found these filings the about the with information can on be company's Further

now pleasure for is President Thank It my Ms. and Angela host, you, Chief Kleiman, Ms. Executive Officer; Kleiman. Essex Trust. to Property introduce your

You may begin.

joining Q&A. you Barb follow remarks and prepared quarter Burns Rylan will first for morning, earnings Essex's Good is with and thank call. Park here for

solid followed in comments XXXX, is will off better high Job pleased and has XXXX guidance. been and earnings by X.X%, low-wage the Heading by investment than service forecast increase to primarily on in details consensus notable more This guidance. so in kick growth of other our will our forecast. government quarter Barb hand, core focus our are for end with year a into financial market. the far, We on a full update market the share highlights, trended original results FFO a sectors. performance initial operational first driven an slowdown my was job with moment. Today, U.S. concentrated on U.S. fundamentals on provide of per quality, has and our the exceeding

is a intelligence opportunities. and In the Coast, has reallocate to artificial source evolving companies resources the tech growth business of high-paying of West jobs in because primary industry job led industry this strategies as

in our the seen have increase by signs, job including markets we encouraging openings XX steady However, tech a top companies. in

recent of rate in uncertainty path elevated As information interest and resulted have regarding for data our near-term Fed outlook, commentary cuts. the

typically job for sectors, not improvement to do we high-paying imminent rent the in is housing growth. and key the in demand catalyst in With this accelerate which growth an mind, anticipate

has job While on the Coast remained soft. West growth

in housing To investment permits housing continues process total is of percentage supply. of effectively deters California supply. Our stock X housing Essex, steady significant first, well and benefit California pillar year-to-date to to a our this and This markets. a X% costly thesis. Lengthy structural is remain limited as factors: point, a below attributed performance entitlement

Our performance driver outcomes of demonstrates key a term. stabilizer periods advantage. growth supply is over this today during the and demand soft long a rent It

wages rents which FX The second is markets. by factor in rental faster than is affordability driven growing positive

the continues rise. owning a affordability for runway X% from is around rent median growth to rental to in Additionally, our markets. cost Likewise, than today. The the Accordingly, cost has more home FX homeownership turnover purchasing percentage renting long our of to historically expensive of of markets. home the a X.Xx a in attributed XX% supports fallen

quarter new which operations. growth and Turning to blended basis rates, in first We leases points XX of on renewals. X.X% on achieved X.X% a consists lease

in new Our same-store basis regions, points we higher our rates turnover at If new X.X%. and XX% Alameda, are would delinquency-related been portfolio. lease LA approximately total of rates lease of tempered comprise X these excluded have which by XXX

Moving was best-performing new growth on with blended X.X% to achieving regional Seattle X.X%. of rates of rate our region, lease highlights.

our side the primarily strongest positive in second new and County. trend Northern the east delinquency rate offset growth best San the positive which continued. turned lease market, New was by remained side, February, region our rates has was Alameda blended by impact California rates. east in X.X% Mateo performing challenged, with led lease and flat from

XX rates new lease basis County, Alameda California been in Northern Excluding would points. have

Los delinquency blended to X.X%, performer, rates in be points a growth this for Angeles. basis generating negative by rate with in steady new caused Southern region As continues California, lease of XX

in occupancy have excellent operations this growth. which trend lower units processing region. support long-term average revenue net a proactively to anticipation Excluding improvement of and at Los have long-term in would new job teams the an done rates delinquent Angeles, We to Along eviction faster time, been positive X.X% view units in lease led welcome as with California. Southern temporary our in We delinquency. this beneficial continue more trade-off has recapturing pace, build and this to recovering

at a heading end into to current solid we throughout averaged areas portfolio. rental of we the XX% operating discussed opportunities season. the are headwinds occupancy only days. our with in And April, position As peak for delinquency Concessions conditions, with aside see X.X from increase for portfolio rates leasing earlier,

we strong on created through for investor volume in per markets. of rates recent our remains limited from core generating ranging venture have value-add multifamily opportunities, thin FFO growth to properties to backdrop continue we market. compared to transaction and mid our and with platform. X% demand communities. Lastly joint Deal cap Against the years, external for mid-X% transaction NAV accretion this for volume, see share

first us quarter, $X purchased interest the $XXX portfolio joint a almost of we XXXX. accretion for in million in our that FFO produce venture In partner's million will

million In fact remains shareholders and IRR alternative source has an capital. , for since income over equity and $XXX to XX% promote our of inception, private delivered platform our attractive a

conclusion, In through strategy that, pursue while generating shareholders. With I'll the call turn our principle capital create our to disciplined core for and to accretion allocation Barb. acquisitions over our intend of to we growth maintaining significant value

of key pleased markets on changes I'll I'm per full FFO for investment same-property The balance our on and guidance report comments accounted first beat guidance $X.XX higher followed to capital the update activities, sheet. the exceeded growth, ]. Angela. Thanks, revenue with by by [ in quarter. $X.XX first quarter begin the results, midpoint to share primarily provide of $X.XX was by which our comments core our driven range outperformance an year the on

from benefited to also the expected the for quarter year. portfolio not first reoccur are commercial which remainder onetime totaling our $X.XX, of within fees lease termination The

full revisions. to our year Turning guidance

basis the is points scheduled midpoint to be First, XX for to the of has our revenue start delinquency year, of expectations, rent which than X.X% improved we strong year. basis now a As delinquency of the factors: points growth the The for increasing by revision. result same-property are We to by X project increase driven original X.XX%. accounts faster XX the of

The has growth. basis which led through relates as optimizing we of have XX second better successful to our at other various to factor initiatives, higher income been portfolio points

we are leases. of especially when lease as revision trending on renewals, have want guidance sign year, the get on factored further of we so blended into While we our to expectations ahead peak any season we our this far our not slightly leasing into bulk growth

to venture, venture consolidation our raising of Angela a for The to other well challenging grow core through we In at guidance highlighted, key an are for shareholders FFO as joint accounts BEXAEW in reinforces of this platform $X.XX by value total, $X.XX year increase accretion. which X.X% has relates And driver otherwise per of created our the in FFO acquisition revision market. our externally full Essex partnership our joint the the midpoint. as ability the share, as

equity to on sponsor's Turning a watch nonaccrual the common affiliated our preferred we of quarter equity assume interest the preferred investments. to fourth This was quarter equity was our previously with Subsequent status on investment in XXXX. investment. end, placed and list

asset, the outcome will this submarket. Sunnyvale adjacent transaction yield is beneficial and favorably initial to on to XXXX to model. which the Overall, our view quality the long-term efficiently the such, operate is we The it collections Essex As our view community, within our given that our of located existing forecast. growth us core in an allow FFO property

million portion the March, to in XX-year Turning and transaction. In we remaining maturities last to the debt fund company's $XXX unsecured issued Markets. to bonds the refinance of partially BEXAEW Capital XXXX

are environment. We rate X.X% debt locked in volatile interest pleased to rate have fixed in today's

at common stock not relates issue to did we the current our do nor investments to issue price. company equity equity, it to stock As year-to-date our fund plan

have can $XXX redemption sources transactions in from without fund need as up for this to retained We million new capital, investments, preferred last and including that of proceeds and to equity. flow year alternative year expected such completed equity date cash the equity

of equity to sheet in continue joint FFO will proceeds growth including balance and share to capital, our per or our order while look ventures preserving all core strength. disposition at in We maximize NAV sources

been shareholder prudent over have capital history, served has our of shareholders our stewards well. XX-year We which

Essex conclusion, a financial is position. strong In in

X.Xx, with $X healthy Our leverage and available over we at in liquidity. debt-to-EBITDA have net levels remain billion

As such, equipped act arise. are well as opportunities we to

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

Wurschmidt question the Austin first Capital Our KeyBanc Markets. comes from Instructions] line of [Operator with

the of continues Alameda or and select rate are if are that growth moving have sort weighing submarkets year, new on long-term think curious having in you new kind -- an you of continue lease I'm to the and lifted market, impacted impact lease but growth your the You L.A. just could been in on weighing if this continued the guys see that rate to in forward? flagged on others that markets overhang has those improvement delinquency impacts or

it's here. Austin, Angela

believe I in You earlier lease kind continue cracked going rates? the is you're whether Alameda new up the but overhang LA the to of asking part on question, of

Yes, that's correct.

-- we're on Okay. L.A. provide Great. expecting that portfolio. Alameda smaller it's improvement part be What to is steady, a an continue our is going of overhang the and is delinquency. to

seeing a So of when we're the into bleeding working that The not longer L.A. volume markets. a that is time. such take other heavier really large to from is have it's influence good just you that are coming through, because we going news period

So doing it's well. are really quite markets focused other our in more and L.A.

lease spread I So versus underwrote year, how in rates. the you of tight you guess, about, had relatively should beginning new think the at when renewal guys we a your

bit little factors which are us But those You suspect you better, kind some trend volatile, give to just the is that's you sense how on X a can I month updated of been or on of of from flagged trending here? thoughts comp the think due by month. renewals but a

our have thing. important leasing see progress leases where of because peak and bulk to sure activities it the just occur in that's because time. Yes, reforecasted at No, is not how season point we that yet

It's now But the said forecast. we're a what data rent few our months and our Seattle that limited. trending into Northern a of ahead of are that, with year So turning. is original seeing is right smaller more leasing California slightly market and is terms set having

planned, an Southern but LA is drag. there California generally is

ability huge too relative really mostly we're this in it's much delinquency in to rents outperformance reforecast fundamentals to underlying it's our faster try of from early that be. going delinquency want solid. market, quite income, And just essentially it's the I units a so speaks turn and because quickly. on that The market is our the not the plan units to at outperformance that -- the to so getting to to say is benefits those once recovering point. with our again, other do is It performance where to

get bit, next then of couple Maybe trying months? renewals but in this can specifically, question are And helpful. sense mean just for would a to That give you the the all to where I us a out more little for going that's me. be

thing. Sure

May kind anticipate and around keep wherever possible. say, approach for, are market mind, there. June, still is they're rates what are we of average the in for So low They to to going is And where trending on that push course, before. some the to are renewals try mid-X% negotiations renewals same there And do because renewal we -- be. going we, range. slightly we to ahead, out do of that portfolio And going is is seeing we our as But X.X%. in

We with market of pricing appropriate revenues. are setting maximizing goal the and

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

prepared you hiring Angela, shoots the green you you tech talked more office to companies your general Tricarico Are starting backdrop Or jobs take I tech seeing if AI about in in return space? It's was Nick. active trends work. markets? on from wondering companies your in with expand Daniel any the could on to remarks.

backdrop in want acceleration demand to the to the state many the current yourselves and drive the that of hoping, Northern Seattle understand markets. including California an obviously, recovery are even within Just

good a question it's Daniel, there.

commute seeing picked We although openings has to workers essentially And are seeing we increasing, up. very gradual. to the to because reduce also the -- top the closer are it's moving hybrid office tech trying XX traffic anecdotally

XX,XXX opening first during X,XXX And about, jobs. in so about and what March, Today, was the say, we're the seeing last year bottomed job quarter, is jobs. only openings that these it's

well was below The our XX,XXX. about it but it doubled pre-COVID So rate X-year run is average.

that But seeing of that is sense the gives hopefully, acceleration right order really what So direction. you how for things to to see fundamentals some are occur, -- moving in we're big And believe the the need we robust that high-paying about for just backdrop our the we mind. all that and question more on we It when, occur. fundamental it's to the a that's on do jobs. in pickup have

little of breakdown timing a expecting talk magnitude a in I give you're and the to of a up maybe And portfolio, submarkets, see revenues the Yes. Seattle bit supply new your follow urban you're in It exposure? you Could increase occupancy different wanted on where in market. the throughout QX. that market? versus nice what saw greatest seeing suburban about and to sequential

Sure thing, Daniel.

this -- of that. east between expect terms and is okay. the its which point. Downtown our on we of nature seeing cadence is trending And be this is occur But predominantly we're expecting And our the a more are this X in point in now activities pushed because but supply It's so side, things that's east We -- much that -- to time right or side the in a markets, coming bulk now, more demand some of to seems and what delivery. from more our east the is experienced we've get good And can we we predominantly where we're seeing indicator side. from which quarter in growth, is what demand are of over suburban supply doing all are month CBD, in the insulated next what slightly the at of so healthy, the in market XX% in that holding are portfolio as portfolio. we And by own. some is time. better means at some

next Our from Eric line Wolfe with the Citi. comes of question

you getting the thing, term. of what's the kind in is good It's Angela, and L.A. obviously a back, of Nick which with and medium kind mentioned overhang units here longer Eric. happening and

rented changed to are that to sure the to Just paying going be tenants specifically the curious make rent? in you've you're market that if underwriting

in will talk underwriting activities Rylan markets, we're Nick, various how including our about L.A.

double have degree a or we're think to relates Nick, of of a higher edge that to seeing it lot a there's I as caution market. L.A. we exposure what in Thankfully,

these have year how over units can think rent data. back the pretty we delinquent I occur. know as past quickly good that turning And paying units X, we've So we we or how into shown are and

like feel certainly but we've market, underwriting So as we're that it L.A. I got relates in. to nuanced is something it pretty factoring

it then tenants building and as a line in credit. nuances happened courts change. there so make the to for not get for always tenant And our relates not is eviction for legislation Obviously, actual our terms activities, credit. these of Nick. What because any to these to went leasing all It's to the prolonged. and moratorium related solid tenant is the set with have We Yes, building, up bar evictions are processing material the to underwriting are underwriting. delinquency result we needed a really itself on very nonpaying really from long. has why became backed And which time whole out background

of you're material terms if going And all. a so new not as that tenants in about, seeing -- say, at we're problem delinquent, talking

That's asking about. Yes. what Okay. exactly I was

improving what the This certainly feels than So like been even first rapidly pretty you're you've from April residual has like of is the a not It bad was seeing quarter. seen tenants? better anything more new because definitely it seems before debt of recently.

Nick. correct, that's Yes,

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

few is this jobs. Angela, on this think demand lifestyle? do Cal the let's just is if of a say really of markets normalcy still the housing, but meaning we in going Southern more enjoying the questions these back the back crisis, and function the reason therefore, that about What are tech returning in it's lack sort the Or you is a shortage, the for you housing hiring about sluggish these since that's front, people, say, jobs single-family is factors, really more more about to that the other and that's sort sort of to just would the all shortage housing talk the about And talk shortage. on we can stronger-than-expected slowdown, really but reality the margin, all of other the of driving apartments. dominant And recovery it's items driver. credit tech

Alex, good that job. and, point an is excellent

the now, to that us something for for significant seeing and markets, much years stating are we need it's don't market. a we What plan attention. in been healthy achieve paying been that for to that and we've definitely demand You've performing is a have is our our supply benefit several

it's so these incremental office. to in return are a great whether signs moving benefits other And terms of

We time fact, and international positive domestic and continued first are showing both for in migration X population in seeing a in improvements the we're growth years.

markets will all So on going the in our anecdotal need in. hopeful. But these little But terms other driving data job high-paying do margin kick of growth fine. just really is the the to -- are acceleration, to

have And Costa-Hawkins? Okay. you guess, of major out. sense ballot And out are there Newsom the where of sense of sort Is stand. is update obviously, -- in Gavin the I what's a Costa-Hawkins promoting against X overturning the supporting Or keeping then big the Costa-Hawkins is out on sides just on for into the attempt the -- of, there housing. whole majority Sacramento both But political front, third initiative? second a on new question forces months been support an coming might political -- has returning low the advocacy

we an Costa-Hawkins. is of seeing the are that overturning important legislature Alex, are not What is vast supporting question. the majority

in an because on recognize, And market, we So have acute they're housing. shortage our especially side. they of our

is And is antigrowth an -- so not that initiative. that

that proposal have not our housing. support relating defeated maintained legislation twice, has And reasonable been especially and to we coalition course, seen and time. different have be We that will to overwhelmingly this shows of anything just this

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

it slightly to right, from rate like looks new your lease even declined numbers or month-over-month March our flat ran April. we If growth was

expect lower the acceleration? So just question, if into May? And what that is how it And first trend to is secondly, correct? I you do drove that wondering guess we're correct,

once delinquency-related by really into see challenges driven to those if but ultimately did a again, And pull a out Jamie, can benefit our tenant. it's a we lease it's And revenues which you March those get and back between L.A. that's and because we is Alameda April. sequential units and increase. Barb. Yes, -- rent-paying X,

So Alameda. driven was I L.A. it by primarily just think

the then acquisition quarter And like Okay. a your seemed the Secondly, opportunity. in JV great in

You ownership. transaction continue didn't And broadly, reassess the on about also I opportunities already doing more to thought just majority talk like deals have you just the basis, then interesting. your pretty Can comments that? were to you your market had tax

going interest? just what's things of talk rates. of said you have a pretty you lot in think a I on X.X% buyer your Can think peers I terms about market transaction core in taken more the much have cap said pause.

curious So and your the capital putting ground what seeing on you're on work. thoughts to

Jamie, Rylan here.

On significant best opportunities given to partnerships. do, the venture joint however, going we decision our can the we capital from first What are any in time. point at point, try to do to we allocation continue have make acquire to is

had at to partner's the start So and maturing, venture a to route. the interest elect that for year, and why decided this that's opportunity that of made we and this sense. It was purchase shareholders, was it joint accretive was we our our

a not have investments and find. we pretty look that venture focused solely highest we for We're other. trying best opportunities, business are can or returning but to that to we can we find deep So the continue the joint on one

hearing put market, looking you've Coast is What to to year volumes the multifamily. be 'XX in work is I relates this on it year we be an we're our to volumes think in X/X approximately focus was 'XX. amount West particular, from the transaction the of correct. all and of to low ample in last saw they of there capital been generally were The continue as As very transaction what seeing

premium market. suburban of there's to coming a for that's bit a well-located So scarcity product

And that the And few you expectation it made very to that going are transactions bidding is market. our that, competitive is continue. seeing have for to so pools

couple tracking we're deals So right of now. a

at I out. deep to cap and We transaction levered bidder have pools, and surprised very going of rates think public come both some our unlevered are would these buyers be investors where

to come there. more So

you Does more? sell to that motivate Great.

but of we're and our the something considering. portfolio, to we we need be. certainly we use capital It's about where are can cautious best to trying highest Again, be grow where

evaluating. have both we So are that opportunities we

question with Bank next Dennerlein the from of Our of line Josh comes America.

X.XX%. for And comments, If renewals, a out I guidance? recall year? sounded May low is growth, your in go want Is like was correctly Xs. should about think assuming call, kind like rest back to just think cadence expected to you're of the like the to your slowing what guidance to Angela, of sending market I of schedule? XQ, mid I rent last that this like about renewals. and the ahead Or we was like like It how on the where the June

actual we're L.A. Josh, it's we we what And ahead will ahead are early about the a -- have but Alameda. schedule. everywhere too else we I reforecasted, haven't is talk to except slightly schedule of say not done for and little And of because that cadence.

I want do caveat things doing fine are to the now. So But that. right

remind they're -- your is on you you, what's come could your us they And Okay. spread them back renewals, to what those out? negotiation send signed you typical like before

on could of market points depending going X whole depending from basis be else Yes, it could things. range it strength supply, It is what jobs on. on say, a environment, close host be could to XXX to, anywhere

Our next of St. comes line the Haendel question from

Mizuho. with Juste

of any renewal a rates concessions? remaining from behind that's me. if A the guess, is us? I'm to couple I now Or there's for of your quick benefit all, tailwind off of first curious, ones that burn

Haendel, in July. there's more then in and bit a and June May no little

you Okay. that break And by today? where if is the maybe portfolio overall could the lease region? And loss of down and

thing. Sure

So loss about the XX in basis for lease to April portfolio is Essex points.

there keep once a in mind, we again. But have overhang. So L.A-Alameda exciting nothing

loss lease will L.A. to exclude And year, to around points. XX Loss if to So was basis X%. Alameda. a lease be compare just little last April, over you

of slightly better. better. but looking slightly talking acceleration, are massive L.A. We're is things about not absent Alameda, So it

about best XX disbursement, about just of points. points; California, at Northern So Southern in California XX lease about basis Seattle the basis loss the has XX basis terms and points;

things you stand. So of kind the that range where gives

on last health last I I the maybe list book, loans you put on of about the watch appreciate the color. one, quarter. just talking -- then X think mezz the And

book of So overall maybe there your rates talk to looking your stay credit about book and with adding risk today, the to for -- longer? the in perception the interest or higher your especially maybe

Haendel, yes. It's Barb.

X taken of we either last obviously status in So then first one we've call, our And nonaccrual back were on that those on watch had or the our quarter. on list.

we're So quarters. those maturing And of down X. to of X loans the in X have X them X next to assets,

So I we'll have outcome there than an believe. rather sooner later,

there's On one asset likely productive that call we're equity, one, a other the on additional in other the contribute stack. On having safer next position asset, will conversations we which more in with the one. capital that to sponsor our us put information that have on will

more So them was default new it's a continues little Nothing amount with book sponsors on that -- none of are with the added. of in lender our our perform. to senior The bit watch net-net, trended the it's us. or of favorably None terms list. in

sponsors. matter good here have does we really the And really and sponsorship so

no So updates. new

is Okay. that being then at on thought the your And considered Or process not perhaps adding? moment?

that We adding a it. And new. portfolio Yes, the of quarter. we scrub every go through comprehensive anything review includes

that does And so yes, that include process.

new no to quarter. list was this the there So added watch

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

following just up Barb, that. on

that Sunnyvale. you've no is impairment, earnings the what consolidating impact realize had already So I of nonaccrual. the but impact from on there's

I accretive imagine So going be forward? would

Yes.

So forecast, on didn't we any assume initial in our asset. the XXXX accrual Sunnyvale

forecast. our in So a was X it

growing about Keep a better we this we it's year. think as benefit from the $X.XX that growth. off mind, in a debt. there pay given small consolidated asset rent We see we it, did and Now it's then

the reduced remind year-over-year how just that quantify how the And Okay. of quarter a of on much year. the And blended can benefited you us concessions first for basis? trends from spreads remainder

it's Angela here. John, thing. Sure

So them concessions front pickup in basis you XX first quarter you? Barb, And do by -- about of what in points. we're renewals April impacted have -- then seeing we're

it's the Yes, same. about

June, will basis about slight off that burning flat and September April be obviously, in concessions points. Okay. but and quarter, August not XX we July, into yet, know in much. is And we is the but May, don't a fourth the we same pickup have know

third and really quarter end last started second you year of when So quarter second concession? is to and -- third reduce

And quarter. is quarter into definitely in -- little and Yes, second again fourth yes, up which it quarter, picks then into the bit typical. and the third a

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

about your thinking the wanted about maybe bit of ask to demographics job I of renters about earlier of jobs the call growth in kind opening commentary the the some and in a different on little your comments.

kind mentioned tech I some and think higher-paying you the the industry of having of recovered. really jobs that

people more you growth among those maybe about tenant B. more suburban, type a think are little different exposure, job it's of industries? a a think renters just right, guys fared that are whether bit more more jobs the the little bit as renting with I has specific that of your just and how within your it's base? And Class portfolio your B, little tech bit Class typically us Maybe walk through whether

Sure Yes. Adam. thing,

it's total California. little Seattle hasn't much Our than changed somewhere Northern higher much. too X% Southern very exposure of mid in portfolio, of our about course, and tech around California in

the diversified. And is what portfolio coming through that job And when look actually as it's industries. at all quite a is means different whole, you a so our

And so been in services. recently, really government the and growth has and in growth education job -- health

we so And that see the our throughout portfolio. impact

Got it.

Okay. That's the of other types your renters implication? and implication be that Would service there's those teacher helpful. base from industries. within fewer would of And kind the government tenant be

all sectors. and Well, of employers Adam, from pretty mirrors our diverse tenant pool U.S. well well what generally higher say with there's pretty the was job exception that to trying speaking. It the is I think is services, I professional

benefit. tech, And course, to in that having going be the And that's a higher different. concentration Northern of with we're so not the region one

again, of also approach sources Got there, but potential gears. if just kind you a I financial think -- other of cost how here? maybe Look, really other capital -- of this I but issue of us equity it. switching shares, just capital didn't back equity just more the -- buy kind potential the any of helpful, and think will? through kind and an commentary cost around capital of an your whether from That's you asset-light your walk mentioned in allocation asset strategy Angela. Is you kind the late Maybe cost view year, you of capital bit, kind and today little it's in of

No, a when mean market us accretively asset Barb. discounts we stock between private you we're can seen is difference and This And in significant have ARP it's back and trading I the public NAV. good buy question. past, sell and to at an the pricing. Yes.

I think today, we don't love our stock.

years common of where many stock haven't relative to the trading. stock we're in We value we a where trading because or issued is think

And private of markets cost will we're source other capital us, point, to attractive where to is and trade we Ryland's our equity for alternatives. not an seeing look

redemptions those We sell the can where cash our or an is stock look at or alternative have like where use and assets alternative proceeds. acquisition there's flow, if opportunity we JVs, then still price not it, we of free source of preferred if

that we've the will of company, founding on remain the this at done and sources So for disciplined always -- front. all since of looked we've capital the

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

of paid and you the yield the off couple ended on press A process? Sunnyvale as give much part on that that book. say how up a debt also you Can at you

Yes.

was Essex because more So the It And And off. in is we about then efficiently paid $XX is property. was debt payoff, the much condo-style prior can owner. of high-quality million own the our store, it than property in debt it yield terms a X.XX%. that operate next we

they the you assets Barb, not give And income Just that paid? that's it. be are with Got being would interest that accrued? what the Okay. then, can if associated

have that that. If I -- nonaccrual, offline with of I you I are up to in -- for that to would assets have me. have don't follow front X the on

with from And Anderson Rich line question SMBC. the comes our next of

No, no. Wedbush.

on source So increase. I have a cash perhaps. married increase curious than that dividend, how equity, upfront. is is when and the question you know you but annual as which free so a ever, are are I you cash you now sounds on mentioned in the more to dividend free guys aristocrat, now absence great. are of I'm king particularly also flow flow the counting important to capital this to you raising of cash dividend a

and comment if the list. forward on policy this Aristocrat can dividend on going So staying you

goes FFO behind Rich, dividend have dividend. cash and flow, dividend very aristocrat in scenes on to continue like do as the list of we dividend We increase of we a of the yield for a it's It we percent to us Barb. of And our our the planning lot but how terms maintain that the do do and important target raise certain go out payment. a to percent on also our and is AFFO free stay it.

history gets that But X% how long company. our behind that factored the the does all keeping to is it and scenes annually. on. variety every something won't of are a And into increase be much depend that's going the dividend year. every it we of the So dividend increasing things just It on maintaining very year important

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the end And session. of our with this conclude today's reached We that, question-and-answer have teleconference. will

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