Essex Property Trust (ESS) 31 Jul 242024 Q2 Earnings call transcript

Good day, and welcome to Essex Property Trust Second 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 Essex is President you, It my Kleiman, and Angela host, Ms. Executive Kleiman, Ms. Officer may for you Property Thank to Trust. begin. introduce your

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

range report FFO end pleased to a $X.XX. guidance per of exceeding are quarter core strong We with high share the our by second

As notable year a our to increase second result, we have our full guidance.

drivers Today, by my Northern California comments our to investment fundamentals. will our regions. on Coast Seattle update and for and focus market. followed exceeded on multifamily highlights, demand particularly with has operating underlying Year-to-date, expectations, operational in the Starting outperformance an West housing

While the the we've housing we're reported data to the not demand, ground. experiencing the assess strength traditionally correlated to on have on BLS relied

we've the third-party As such, indicators better drivers housing key insights from demand. for sources supporting analyzed alternative demand into

XXXX is of represents in openings XX top companies. technology total first at from the job June, The Essex increase the XXX% XX,XXX jobs, In markets a over which the openings trough. these

historical have particularly in steady Northern of yet we incremental precursor the recovery to markets good of the to so and return California jobs, our While Seattle. the far in XX,XXX average improvement demand generated has is a and

to similar of shadow headquarters, on a migration. West our housing S-XX.X coastal suggests is in Coast to a Real-time using being illustrated patterns factor Another to gradual added. generating demand relocating workers West are data is This on new Coast. shows the demand improvement job back that Placer data contributing the domestic supplemental. migration This Page AI a

migration first Northern the this since positive has for time pre-COVID. net domestic Additionally, year, California

dynamics, affordability to for our housing, rental combined favorable continues new with market As supply limited underpin fundamentals.

in our which rent markets. of metrics improved growth has has rate affordability the example, outpaced income growth, For

it in XXXX to compared own than the Additionally, rent back expensive in interest is when were to today near markets X.Xx low. our rates more X.Xx to historical

mortgage if homeownership to renting. Even will in less than were rates revert XXXX still the level, remain affordable our back significantly markets to

peak We for rent elevated blended operations. same exclude X.X% experienced points property of property with growth been XXX turnover. a Alameda, quarter. for counties Blended solid higher with to X.X%, we leasing basis portfolio season X the Turning if growth would have L.A. and so rent delinquency-related the

rent occupancy rent Seattle second been that our CBD Eastside, market the As blended strong contributed this level has key while maintaining growth. with region for than are X.X% XX% There X% regional blended been strong in of best-performing supplier impacted by highlights, X to which growth achieving performance. this the less factors has a today, led The quarter.

other Seattle job our to stronger regions, has the relative growth. First,

Second, as month a fuel this peak resulted the later the occupancy and quarter, first delays the factors the have X to seasonal supply new has around half market in timing in the peaks deliveries been These of less prolonged typically that led year. a impactful in best Northern achieving second was blended second late California around XX.X%. our X.X% year, occurred in region, growth this of but a peak rent of end June, the July. performing

consistent early regional and turnover to Alameda average with notable rents Oakland. the Mateo due continued this in pulling around supply in patterns. delinquency XX X% the historical County San peaked July, Jose growth, points San Generally, around region at and basis outperformers with were elevated by the down

tempered quarter, XX.X% if which Angeles XXX would Southern occupancy. average by has markets In Southern blended of exclude quarter similar with basis continues for to to Lastly, be X.X% higher were XX% been fashion, steady above was points a all at occupancy rent growth performer. L.A. California California We or Los we achieved have other for the the

historical consistent Excluding in July, late patterns. peaked rents L.A., California Southern with

quarter, we and As at portfolio well is third concession XX.X%. of the than occupancy less begin is healthy average our positioned X days with

shift maintaining rental the while an We to to occupancy strategy are as to growth. prepared appropriate, minimize optionality

on process compression the quarter, number contrast, for increase demand rates Finally, West there significant some properties a resulted combination well-located competitive in was sale In in in marketed a has the markets. investor in This Coast. transaction market. cap properties low. and In for the a multifamily highly remained newer bidding the second on of

Bay potential few investments and Over months, operating X these on Area. from selectively significant the efficiencies past favorable has of Essex the the backdrop our upside platform. communities based have All in high-quality X procured fundamental

over with and We date with closed in more pleased the in future. are $XXX opportunities the progress will acquisitions to near million arise optimistic are

profile we As disciplined and shareholder maximizing value growth the of always, enhancing remain focused company. on and the

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

the by full I'll of sheet. results. conclude an with Angela. our on on quarter Thanks, and second raise guidance with key quarter update the our balance begin year Beginning results, with second components followed our comments

per which growth. to The stronger range We exceeded was the result net driven primarily higher outperformance core midpoint same-property of $X.XX, $X.XX. report FFO share effective by $X.XX by revenues are largely of of was guidance the which rent pleased of our

benefited lower timing-related. from quarter operating this onetime $X.XX and of expenses, revenues which are addition, In

year guidance full revision. our to Turning

XX season Our midpoint quarter to X%. second enabled leasing same-property by and growth increase our healthy of results peak to basis have us points revenue the strong

our is outlook XX outpacing growth. Our by points revenue initial growth basis resulting driven blended forecast, increase to a in rent largely improved

initial higher Northern and be in to blended Seattle. We California XXX now outperformance points forecast our rent by basis forecast, driven than growth

drivers utility fees midpoint XX our and same of the increase for points costs in legal higher basis are expenses, X.XX%. operating the to property As primary

the environment. controllable it managing despite effective expenses, to the elevated of As been cost business relates we in this aspect have

midpoint, improvement basis prior point X.X% and from a to For same the our X%. than representing outlook. the a we expect basis grow NOI increase our XXX we at points controllable In improvement expect to year, guidance now less total, initial expenses XX property by to

Based FFO $XX.XX results by X.X% core total, same-property raising to growth. notable on a share to full FFO per raised and quarter represents $X.XX year. year second this our share, the so year-over-year which $X.XX In per we've growth, strong are revision far core we

quarter are to As third at forecasting to our guidance, the $X.XX X sequential second it relates we the quarter relates midpoint. from factors. The decline

and $X.XX quarter. typical And First, same-property onetime be and the to of NOI second, taxes for is expenses utilities. we maintenance, expected given had by elevated in driven the which operating lower, repairs second seasonality spending $X.XX in items is

portfolio. equity preferred the to Turning

we date. redemptions million million to expect For received $XX the $XXX million between year, which we in to $XXX of

to depending market the acquisitions into redeploy is opportunities. intention proceeds Our on

removed equity In far capital of terms properties year which significant to the properties on and had acquired Two of in investments with a list, consolidated the date. better watch the of one the we a of puts have and on financials, in the us been list, infusion, X were stack. started our the which so X position

the watch year our performing list of total, in core is planned. to $X.XX FFO. added the full approximately as In reduction rest the The portfolio

source a sheet Finally, of remain metrics strength. key our balance

remaining no maturities We XXXX. have in consolidated

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

will As turn arise. such, opportunities as operator call we I back capitalize they the are well now to on for the to positioned questions.

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

to prepared mentioned to that strategy. shift you you're an Angela, occupancy

sort should Are pullback What's in of recent view seeing renewal is moderate? move if occupancy? of retention on to the curious kind just So the increases rate we getting some in a pullback? months, kind of pushback in tactical growth drive you the driving

with line to This more approach seasonality Good address our is from hear of in in you. our -- to more business.

as of shift the toward demand, typically, approach And occupancy. we we slower time seasonal so push peak, rents. we start And to on as now seasonal the we toward would migrate

the revenues. is maximize Ultimately, goal to

normally So our It's of we're red seeing flags it's more how not and on rent fundamentals. business much revenue. so of we that any maximize is to anything want the

moderation anticipated? then kind it. And trended Got stronger, break what's curious than the And little how as a holding new have of you you the most X across seeing regions and out into you you're get growth of lease where longer would July? kind just could maybe has

are on nothing like to more points. deceleration holding Seattle deceleration. material, California about rates, about lease the points So is new and XXX basis Southern XX California new XX effect we basis Northern the of slight but rates, deceleration, lease XX then XX, steady, net basis seeing points

is And nothing California. any it's expected. once again, here, pretty with earlier alarm. giving business lease us. Southern us activity normal much on than new California Normally, peaks had the This here we what that's Northern There's

is this unplanned. so And

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

where need L.A. you you but and right certain Maybe just following up getting to now? to here to that be the a closer do first? point Joseph specific you Eric. pricing Nick more pushing pricing get Are Or Alameda. to more It's with can strategy, occupancy level on

question, That's Eric. a great

in quite didn't kind not We've much strategy. bit, of there but little back of the We pretty able year operating are continued year. ran to occupancy-focused switch forth really been that last starting strategy We has late an and Alameda a it on last our throughout terms long.

reduced essentially we XX%. improved point, delinquency the of on XX% We from this made good almost by At year. beginning progress by the and really another

this probably making We we we're year until be power of get will able through rest there. pricing Alameda. So have good not to traction the in

XX basis debt, bad on the points it it of July. expectation Is looks year? just the to like that it rest then in this And hold down gross will came your level for around your

number to the about made be progress basis do Yes, Barb. make -- baked end point the guidance XX And or year. we we it's to the comfortable that high more make X% the feel far. pleased tool the range. around Remember, will that bounce Nick, the to we're be rest progress continue our we'll just but that guidance If the month-to-month, of into we've end in upside high progress. with of so has the can

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

debt seems This for I on on question bad how Josh. give is expected color like you It my assumption. far. better on than Steven so first will is trend second progressing can more if half? the that's the And it for wonder then

Yes. guidance XX first around we X.X% to we the are because for did pleased did is number take full mind, our basis progress. to in -- a by it This we is because Barb. quarter the predict Keep debt lower with bad increase bounce difficult and the in year. points did month-to-month, It does we

are year-to-date. through X.X% at And July, we

working in forecast. but and process the it we're progress, courts expect when on line eviction. we to make do depend leave our And tenants when we're So -- with hard does

little so And control. our out it's a of

of X% we've budgeted in back So got half the the year.

like And you X -- whether you I hear less If helpful. concession. on very That's correctly, so for days my it. regions wonder Got than markets. then across far? that this the different separate the it's question that and is can separate Okay. trending how I you second said that's

Yes.

that have detail -- We concessions.

for So heavier generally a because elevated concession no California Northern And speaking, environment supply. is -- Southern there. L.A. so Oakland driven part, higher surprise by the most California primarily the in the concession of has

L.A. supply. X California, Northern concession And levels. Oakland of so drivers with and California with higher are primary those the Southern And

But Seattle days where region ultimately, X areas in X, we're else the everywhere those X to versus talking say, days. X and about, has to closer X essentially around rest of

in So to days X July. that averages the

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

more raise Sanket same-store on just didn't at at that didn't you updated. the surprised year-to-date, the that lower you were guidance looking are guys like were And is update we X.X%. end Steve. you you guys trending This We because for revenue

about we of low same-store revenue? lower guidance to just were do the how you the in range or end curious of in terms get So range

the season. that on into is Yes. is Yes, go of factors the year does low back decline half just the depend This the leasing at terms steep And in of end, there's lot the Barb. it. it of in a how peak

expect normal pockets seen season, in but the a air we've past. We

seen concessions. it's wildcard that occupancy factors that into And once we've year. a and that every so But a like less this where wildcard. delinquency is impact feels And low something end, been then. now then could blips and of the It and again, has

really And the very led those to low the with comfortable factors it so our that But point. we midpoint where where is. this is are feel end at

are follow-up, out a as the for -- of if And August and sending renewals month guys September? you Okay.

land X% the renewal probably based to high at Yes, that out seeing, Xs around negotiations renewals And mid-Xs on we'll low portfolio-wide. sending we're on somewhere between the side. for

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

typical? pattern you Tricarico And in later related Daniel would talk year and It's macroeconomic on Can pricing Nick. back to half peaking political-related any than respect pricing or on to new normal there's any through seasonal to factors? expectations your for a conservatism of the you your around comments with guide the the say

have full we in start year, Well, will -- a rents half. our expected we That's question. blended achieved And about with let's first X.X% great X.X%. be that the

So quite key there's and from nothing this to be to drivers moderate. what's that about is seem about. not implied XX on It's political basis comps. deceleration we year-over-year concerned to in is going an points really the out XX there aside anticipation But realm, be have to tougher our the actually

last So and later. peak Southern actually months seasonal a California, month later, X year, X to occurred later months California, our X Northern

And toward normal. rate a the primary driver. ultimately will the is time, renewals secondary that's factor that tougher and converge year-over-year then so comp is And market over

JV a recently. markets. your is a transaction imply My active vote you've your in seems with and of the been more bit it Obviously, to follow-up confidence in partners market

mentioned also rates. bidding the and competitive compressed cap You

new So supply today demand communicating? development and considering the sheet with just outlook curious if any you're on-balance you're

premium inherent several favorable, are say that significant a question. we looking year we our would return where started underwrite, see This is favor, I'd The to hard trends development we does vast pursuing can from opportunities say to We're our of purchase ago. development. in bit near lead Rylan development meet majority in are I future. however, here. a It's good little risk a today But the the expectations. our not come working go in a to that for given down we've costs could increase pipeline an the and in

be spread you're targeting would versus cap market rates? What the

spread case-by-case it's for in for general where shovel-ready can we dependent, markets point Yes, to be looking would our be and site but a for at rule We'd a XXX a today go comparable entitlements. least buy product. basis

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

should markets Alameda, returning incomes of be given up and power kind when has much up? get to gone have rent do just a of Or you there L.A. back, those normal some for level sort do of So pricing you see growth? than more catch-up gone

question, great That's Brad. a

that's going on think depend I to demand.

So state the acceleration that normal return how pre-COVID level. job back quickly do see to we as to we

fortunately, for level results, don't environment. be given reasons low a one are much, the the the demand of right, low is such supply we're in talking able dependent we produce And even solid of growth. us, on growth magnitude, we've But need so really we to which will been and job though if about,

pattern Barb, then, think new And I quarter that FFO the on the quarter. guys the the number is Okay. from fourth the third the quarter. core FFO guidance, you fourth implied seasonal is highest is down slightly with Normally, quarter

if there into something fourth curious falling timing-related that's Or are just that? the So that's offsetting something quarter? there's

on Yes. the timing redemption. preferred It's most the of

third of the occurred So date. the beginning quarter, is $XX quarter. that in of we've the got to July. then it Most And for of million rest slated beginning of -- of fourth end the

what's causing then, impact the that's and we'll that redemptions So anomaly. biggest those see from

line Our St. next question Haendel of comes from the

Mizuho Securities. with Juste

you about and I for into employees on California of positive by seeing since time hearing think the first office of Northern return was comments pre-COVID migration more intrigued I the mandates. made some enforcing

couple guess all of the could I'm some I or seeing more translating any at curious, So applications, And rent over into something tangible if to. next perhaps that perhaps that you upside that you that's are or can drive anything point demand quarters?

having translating primarily we're to we're great seen that supply by good raise Haendel, here. in power always because that's position twice question. our low a demand you've we've guidance a seeing us and environment, that Ultimately, pricing driven and that's outperformance seen really and

land, the that's return. on depends to As the it's because hard of say far where weight it to going as

to is out people some was just about so data And what's to and migrated our migration XXX,XXX Washington within during out majority give California. points, COVID, of And markets. the markets you interesting the of tertiary

And to say of Sun about so actually Coast. X/X, them East out went and XX% the Belt

returned. X/X that And of is so about now right we're has what seeing

XXX,XXX generally and with X/X tertiary about of out X/X of Washington proportion So and in come And has it's line California within the that back. markets.

how that here. some -- that don't is And still have here about on there's we the and one. is So visibility question enough when timing much. The legs just

I And I question comments your was appreciate -- that about And I or also in repositioning No, mentioned guess mentioned you with some perhaps And activity. an earlier I Okay. that. there be you think watching. guess, assets I we'll you bought transaction occupancy some think upside.

psychology I'm in the So curious I guess seller of the to just state marketplace. overall

engage you're cap what the in interest capital willing the for you're potential overall range seeing underwriting, rate Are more of more level what in that sellers broadly and and to deploying IRRs assets you market? are your you seeing looking

Rylan there. in here. questions is Several This

forget general, rates well-located I consistent first quarter high-quality, But X to up our as we've if are as seen ago buildings range. second Cap in one, in the quarter. the please fairly follow So markets year high mid- well the to pick up. cap a volumes compared across in for

platform we we So it unique can onto put additional our operating for and efficiently. operating some from more opportunities bit that little just accretion a generate looking are

for incremental the potentially always yield on line. can that looking add ways We're top

So X that the make levels. discount about cap. quarter. XX% some is excited putting was high platform. the cost are, benefit onto to noted a we're in we with to second again, a it replacement operating our from [ that We're able probably pretty Elan low rents additional The expecting investments at one ] This was and XX% about building pre-COVID the are

find these always pursue opportunities with we outlook have given great but -- submarkets, can well. discipline fundamental of like our that, as will for aggressively we some So as those if more we

underwriting? you're potential on IRRs color that Any the

competitive back are envelope, that X. to math just these suggest above too want but much of reasons, for the would provide don't I Yes, detail

one I if last Okay. I appreciate And in. that. squeeze could one,

a maybe of the you us sense lease the of across is can broadly, give loss where gain Just if portfolio? major to the or regions

Haendel. Sure,

For you, you could yes, one in. squeeze another

is loss So July about X%.

good we especially only year XX X.X%. basis compare to when last certainly at it's so point July a And it's was a position, improvement. Last July, year,

moving the right direction. are things in So

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

wanted I competition from to market. supply ask new about in the

in in supply it the helpful, is at it lower there And but that supplemental, kind in way. of you in looking tabulated. disclosure, single-family the that the really new kind more think supply supply guys the looks maybe prior than the was I of by kind of disclosure be may multifamily way

wondering that great effect of single-family competition the in new of just seen have market if kind So kind supply. any you've from or

best of It's at Angela. competition looking X are certainly competition environment months, indication the single-family days The the has we X concessionary And with seeing new -- are concessionary and today our supply is over activities. not at improved progressively side. that from we past where

That's pref one to ask I out. assets to And it. to and kind quarter modeling of the and subsequent just puts I the regards equity kind takes wanted you those Got know one in end. about maybe buying quarter, of kind then the the of investments helpful. with and did

think So just there, of to trade-off kind right? wondering how about the

of rates kind NOI about cap a puts you're takes fairly higher. losing needs, of of impact income. buying of maybe terms think and and Your But a just to tight equity the how short-term of yield the gain modeling lost of that's kind and in or kind bunch kind

FFO on we that What was with guidance tell might you our the acquire XXXX, -- I in puts on, up impact. forecasted is X Yes. takes to didn't there investments This we follow for and originally will had and preferred And the that that. after is no have on Barb. we equity I

on preferred actually we FFO $X.XX values And core in on list this where were the into have of equity they given so about were the didn't approach out, given year, we by because X. year model we a income the conservative end baked of gained for accruing terms watch them on any at and took buying last those

about it And did so net-net, add $X.XX.

NOI after go other various the up can and I through the and you metrics. but -- So follow with

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

acquisition guess front. more maybe sounds like Rylan. you're It on I potentially question the for active a getting

the most Prop regulation. control is are Obviously, in Your always terms or in out rent leading edge the markets of headlines at the there. probably XX

seems do guess growth be expense up especially to or you're big given and How line? rent I table. the assets going potential at you line underwrite and least to long-term on election the looking forward, coming top those at the new a risks handicap As lot

that's at some November. into believe a I we mean, there's going high our of we detail. Jamie, that, and question. a yes, go this the been this But is can resoundingly case the cost level, is has regulation year. to that that base Prop again historically, defeated Hawkins happen up more fair -- coming Again,

specific that look and high will rent submarkets But occasion are into certainly by we expectation a and control regulation our rent that the change driven our model, near there propose we at control, specific are statewide level, Now our that in at -- have is and any will economic rent growth assumptions. to factor rent research we'll term. anticipating not

Okay.

your markets? So you'll any term X% of underwrite across the growth over greater long than

Assets, basis, is achievable. it's And a that feasible. certainly given but all on that's certainly case-by-case AB-XXXX,

we these that long we I when say, term. a not are So is market looking over growth, would that's the base case thinking certainly know rent possible. our at typically we're possibility,

our to averages. closer they're long-term so And

some more again, as well types be aggressive affordability traction as a investments of in the metrics, as future then catch-up of the submarkets little term seeing in we're instances, where on rent. in terms bit the some are some demand. we California Those where the Northern on And might near potential supply a positive in look where

you aggressive been balance? kind the there getting given that you'll hits IRRs. more is portfolio in they've better But value of comments or the you you think markets what of turn. And given now get I on you little that seeing think markets you do you're can then what Like more think your the buy play you just buying find do urban the your on keep cities, a get more challenged? urban get might you the in could thinking more aggressive, getting healthier know -- a there about

certainly fewer It's to starting markets, more will that portfolio some and transportation our transactions We've look anything of bread evaluating. much and we're has of suburban great at something a core That's markets they're price. majority the seen evaluating. but that's nodes. butter, see Again, certainly the urban in and in something located across our but market, to near kind that we're our product we come everything

So of we are excited more the quarters. throughout in to opportunities all some potentially our markets see coming

question Our Piper line the next comes Mitchell from Sandler. Connor with of

lot So of on and the bidding activity. discussion there's transaction been of wars a cover environment and lot a

that Just prospect Fed thinking about and also then cuts. of rate the maybe

and wondering, Just opportunities are still? more that preferred business guys does acquisition increase Or the opportunity of you for mezzanine kind the investments? on weighing

Yes.

from acquiring focused can date, very our to properties activity you As fee simple base our and we've case. that's ownership been of not high-quality kind see on

we to the and are open We investments, are pursuing preferred and the mezz several.

result not off. of shut opportunities. as and it's Prop development a That's we've mezz large So have that that investments really portion of our come a historically

pipeline the the considerably has in So development year. as slowed past

in to Prop us space. just for There's fewer opportunities deploy the

we for So the supply are new and fewer just down we to But open, as coming we're markets being development partner great well I there's think our so coming a starts known pursue. that within product, down, result will of a and continue opportunities. as been and

the think seeing from I impact some strength to would the in office. then discuss of an less more opening It's of And it supply return Seattle. comments, and

those year. half the on the the forward outlook Seattle an market items give for of can back guys you X if going wondering in Just

had in markets it's interesting had an fallen outperform of in now Seattle supply. because pushed, it's half last a of is continue because Seattle Sure to year quite originally interesting offset evolving being that up market our what's expected we to got in And an one is second the supply here thing. the But more half. end second going this bit. to Seattle

so year-over-year more has it supply. easier odd but this comp, combination of And now

So ] better. and it [ to slightly probably often neutral something

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

range high expectations. in think a today up rates mid- pre-COVID than wanted of looking that levels. that I X% couple of rather mentioned were and I growth are times to the cap growth and buyers the lot at to rent you follow you a competitive rents rent Rylan, level acquisitions? on Is mentioned XX%

feel Just clarity, that about submarket we've coming seen XX% and tech that snaps through rents back anticipating we years. in I strong those but is levels, pre-COVID recovered not given be below income we within as and attractive, the in growth the if this for are setup tomorrow, and slowdown we that, that those as is are know COVID market the several fundamental the rent well wouldn't surprised what we growth

that is factor. a So

assets sense us. our seeing are that we're what doing, don't to a we're are peers levels As make disciplined we on some of at trade that -- not staying lot to

in rent think the So I underwriting more do other participants some even are market there aggressive growth in of submarkets. these

what exactly So underwriting. our to through are parse it's difficult competitors

lot demand of a the been Northern fundamental general, about and talking for about in like setup capital now. that feels there's years excitement it California, of we've been couple But given a

to favorable the pricing discussion be lowest trends, And the getting X% we been lot are some a seems think Should on it rent-to-income country. this your exceeding and ratios improving in rates seems renewal on the power some of in there's that of it call, and you've markets, been your recently? about

John, more it's point, been downward. what trending if at we And had prior months, gradual. reached be peak, then But rates likelihood. of our renewal a to relative seeing is would we're the that this

renewal will it's converge XX-ish toward So But and June it's cell point huge market ultimately the a good about deceleration. July, from is basis not to rent. news

So likely we a possible scenario the rents then that massive not -- that a if be seeing and at that market time. take and demand there's off, amount in will point suddenly but this of job and growth that's are

comes Segal question Trust. of ] Essex the next from David with Our Property line [

multifamily provide year. to to XXXX forecast the curious comment relative could are being on year. on you supply and was deliveries this color pushed with some that outlook supply is into And next I for can changing whether growth if the extent some what the you

this Yes, Barb. is

properties in delivering some to delayed really -- pushed year. hard of more into in delay and we next units it's as were our our than thought. XXXX supply, too So it X,XXX Southern they're effectively about for were in California were adjustments year. relates some this And And forecast Seattle,

So we pushed up some of by the Seattle about supply X,XXX.

but delays then we then neutral will in So year. pretty next occurred Seattle small we think Jose Oakland slightly a to of because and offset there's San our supply be pretty multifamily to higher this be Northern reduction year, this to California up slightly, look Southern supply this California net year. the will mutual. as And by for year, that lower

going So a muted stock, at forecast total be change. supply overall, year, so bit, for calls points of very now material to this up XX to basis to little be but our similar no right it's

And the I'm in how in And of terms portfolio issues what and overhang could market? for to the delinquency compared the broader degree newly the rest competition units? delinquencies listed market create does of your curious, to Great. some still

Yes, that's question. a good

when it took through down it's when of the little than market. process, huge -- thing state we had California the comes months. very going We through entire XX tell was have it is can about a delinquency broader started visibility court that months and it backlog, now to that process and less to going X the The the one the

ability our in that's improvement to a related area. units and And direct correlation delinquent been recover to the that

time, could it steadily. over But at look And say, be continues improvement as X-month of you this so blocks we and a lumpy. mentioned, pretty has if Barb see as continued it it period,

the delinquency -- increase surprising wouldn't it's and core be to suddenly processing that for it would key. time is extremely. Obviously, It

in as steady, so be that whole as then we good And long should shape.

Instructions] [Operator

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

Coast. the on It's Just the exit been the you now environment developer about want West tough Are a market seeing developers any permanently? to cycle. right very talk

Yes.

actually was out of is news pull there a long think given week us Atlanta-based huge that's given is environment we've not I in. developer to a very challenging surprise just And decided last develop to what this Coast. the an said to West of

future we're that near So competitive we're means should it. of Essex. for aware concerned, opportunities honest, be And in less product developers the to and create additional not fewer

mentioned spread you spread has comment I be going I you to was much to might go? -- time. you had further your this figured a able kind it at with. develop I Yes, XXX acquisitions think that's as you're countercyclical today, I where what targeting of be would on basis versus mean more you Can how point

Again, estimate closely. numbers. can fundamental outlook then it's specific a for And at submarket costs really we very basis that the dependent on the tracking hard our is drive where can current today. That all land we're acquire regional

So been in say than we've years. today closer I'd many we're

started haven't development new X years. almost We a in

create And challenging shareholders through effectively value that We it's for disciplined. been so and really we've very know process. develop to

to So be we're disciplined. going very to continue

rebuild history of going to pipeline at the has and able in are stepping the company in But optimistic to near be long cautiously that that we're a bottom of cycle, future. we the

Provant comes ] of Our line Amy next with [ the from UBS. question

a Bad debt ticked bit up excluding in L.A. California, County. Southern

if So I'm having potentially wondering paying residents bad signs resurgence that's difficulty potentially or or seeing lumpiness actors. or and you're if

monthly not tend around that's every bounce this to the why month-to-month, Barb. noise we numbers numbers there The Yes, because is month. is to like publish do

we're there. overly just nothing concerned It's monthly flag to So about noise. not it,

changes of there notable move-outs, any have out? for reasons in terms been in recently move then And

This Angela is here.

that's relatively move-out to households in has change It's reasons or changes mostly remained job Our consistent. and remained steady.

turn There for to remarks. time. are I'd at back questions no this call the like further to closing Angela over

and your we look forward the Well, thank all for all questions, soon. to you Essex and seeing real you all call of for joining

teleconference. today's concludes This

Thank may You your your disconnect by line you time. participation. for this