Essex Portfolio 28 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

Angela Kleiman	President and Chief Executive Officer
Barb Pak	Executive Vice President and Chief Financial Officer
Jessica Anderson	Senior Vice President, Operations
Adam Berry	Executive Vice President and Chief Investment Officer
Nick Yulico	Scotiabank
Eric Wolfe	Citi
Steve Sakwa	Evercore
Austin Wurschmidt	KeyBanc
Jamie Feldman	Wells Fargo
John Kim	BMO Capital Markets
Brad Heffern	RBC
Adam Kramer	Morgan Stanley
Alexander Goldfarb	Piper Sandler
Anthony Powell	Barclays
Wes Golladay	Robert W. Baird
Michael Goldsmith	UBS
Chandni Luthra	Goldman Sachs
John Pawlowski	Green Street
Barry Lou	Mizuho
Joshua Dennerlein	Bank of America
Linda Tsai	Jefferies

Call transcript

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Operator

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

Angela Kleiman

morning. and Essex's quarter Adam here Q&A. Barb for Berry earnings follow me joining Anderson and is Jessica will you with Thank call. Good first Pak prepared remarks for

we to the pleased for initial a solid raising our that our quarter of our on and that Barb the and guidance report perspectives first expectations, Jessica more exceeded transaction FFO and within while quarter, platform, some our will will We the apartment my are year. share focus midpoint market. outlook, the economic provide opportunities on are per on comments details full the

Beginning we outlook XXXX monetary year, growth remainder continue growth of from nationally. to policy a with the in for economic restrictive more job resulting modest our the tempering anticipate

are assumptions of detailed package. supplemental Our XX on Page our

X.X% March. producing durability two growth trailing job of basis As home underlying largest West through the a of a to factors resilient, months. month economies we contributing proven so, over We layoffs the some solid Coast past Even the have is West three to announce the West are companies there the of believe Coast on key to know, the Coast all six fundamentals.

jobs. found affected First, on second, many West people reside of not new vast And do the majority the quickly have the who workers the of layoff layoff Coast.

occurred XX% companies to of notices to only layoffs, the in continue of markets. WARN largest we example, monitor our For their reductions have announce and,

housing and West submarkets, labor market few in healthy the had year. exception the a the demand of a to start specific the With Coast overall for

favorable low. deliver our about forecasted On supply with the basis XXXX, total of stock in side, in markets outlook XX remain to housing points only the remains the supply risk

force our years labor meaningful to deliveries XXXX. costs, lead as do continued several challenges, need we should generate (ph) that Thus, production housing and We to rent in high relatively markets. such growth diminished modest next growth in expect apartment the job not [light] construction for

economy, Since over remain control, none our continued what enhancement will or on focused which the of have operating can team platform. we is the our Fed control the us of

We controllable have been of operating one for operating operating of has the platforms has unit. in controllable highest model one thoughtfully in Essex most expense efficient transforming Relative per industry. years, several margins our the our and lowest average resulted peers, the the to which

of efficiency, has midway property rollout model to our the contributed this collections While only through we are implementation.

of vendor and next workflow dividend incremental function growth growth throughout model expanding Our costs. including the of maintenance maximize associates, the efficiently FFO more economic share bottom-line, ultimately flow to to all to will reducing phase generating additional our revenue These will the tasks cycles. advancements operating this per enable time and

significant transaction the in digesting in the buyer activities. to turning mind West volume Lastly, the a high quarter Keep this still of by evidenced the pool still from approximately cap to investment end that first market of towards interest market with compared nationally the Coast XX% a institutional reduction is last rate as quality to occur in mid rates, and high transactions deeper range. seeing X% higher XX% year. in We're

an in shareholders, significant per FFO FFO earlier. mentioned of and in primary raising share underlying discrepancies quarter, by the [indiscernible] asset mind the price value. strategy record for the arbitraging of in But unattractive remains from perspective. that cost long to shareholders volume, acquisition's for In is NAV of our creating our again, accretion Once between the first we driver the guidance demonstrated which Essex track a has keep addition stock value capital this our and locking

We actively potential emerge. opportunities are act and when ready to continue thoughtfully deals to evaluate and swiftly

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

Barb Pak

Angela. Thanks,

our and balance few guidance, sheet. results with I'll a on the update begin full investment on first comments an quarter and year activity by followed

assistance. to quarter drove our X.X% two pleased per we we The delinquencies net forecasted an report in core the received FFO same emergency largely property the first, midpoint than $X.X attributable than results by for year-over-year, a exceeding range and grew occupancy higher million share guidance outperformance better our as second, I'm revenue are trended growth: were better-than-expected first of that in factors expected $X.XX. to quarter; rental on

Overall of assistance forecast. line As you funds rents may our gross X.X% recall, with the we assume our was for expectations. in rental in scheduled any XXXX delinquency not did quarter,

of favorable property the ahead first running XX points growth. same midpoint year our basis currently for quarter Given results, revenue full are we

However, guidance given delinquent timing the units, uncertain, we remains leasing and get changing the until same property range off macroeconomic of holding our peak which further into are the season. uncertainty on recapturing we

raising primarily we FFO, midpoint share, and stock are by quarter to from core first per $X.XX related the accretion completed other income. in repurchases full year for our higher As

and our to Turning repurchases investments. stock

we create housing quarter, buy This to our proceeds to Essex time to another community order in at while During neutral located sold a private public in disconnect arbitrage used seeks improving a environments pricing. XX-year-old example how significant back between stock the and value basis student were in the is The on same all a a portfolio. non-core market. leverage the market of

this book, had activity As quarter. to preferred equity we it to little relates our report

$XXX full the about we million redemption. expect for of However, early still year,

are advantage of the rates low. in one believe us able take is source benefits helped time, additional Fannie sponsors cap to keep the financing of many has, to over to redeem which sector, We being the available of HUD multifamily financing the via Our Mae thoroughly. and

the -- especially Overall, average we with Coast of remain comfortable in it terms in equity terms is the deal diversified of size. portfolio, West preferred our on given and both geographically how

loan, May year. X Finally, with the which mature to term that We upcoming plan onto million the $XXX last balance the bonds off XXXX proceeds closed our sheet. from delayed draw pay unsecured

have access of variety next we a over needs the capital limited balance position. debt $X.X sources, With no our billion a in such, liquidity, funding in to strong XX months. sheet exposure, remains variable rate As and

I Jessica the will turn call to Anderson. now

Jessica Anderson

Thanks, Barb.

I'll begin providing by today recent results color commentary. strategy, on operating by followed my regional our and comments

pleased operating the I including first same results X.X% from with a quarter, increase our was revenue property year-over-year. of

basis mentioned, XX.X% these turnover a in of Barb up QX our from one of in results anticipation first from that resulted factor quarter, for As fourth the driving execution in focus quarter. core successful occupancy done This XX was the proactively solid elevated strategy points began was and the eviction.

over experienced from year related eviction and number from has made volume we delinquent progress to-date. of County. ago, non-paying a residents tenants declined the units and Los highest Angeles During the first our we quarter, move-outs The excluding XX% Alameda long-term recapturing by peak of

Angeles, moratoriums Additionally, the and Los a in quarter notable of county the approximately milestone our the eviction of in the resides. delinquency ending city half first of where was

backloged great steady of into is eviction I job. these Thank gone the throughout units, proud expected. am many work units. XXXX recapture but recapturing, and the of Given courts, it months will that team team, very progress take amount tremendous you, re-leasing has turning, appreciate to and

for the over consistent same with into demand, some initial first the demand leading of portfolio, an last cases up lead inquiries reflects indicator and leasing and in positive the saw was apartment quarter a Throughout number quarter, indicators volume, year. which as we of

two-weeks declined usage first from free a concession quarter. has fourth the free half-a-week Additionally, in in to approximately quarter the

ramp We experiencing up leasing are peak relatively normal the season. a to

leasing although quarter X.X%, ended they moderated eviction Net rates This for with to March incentives April. period effective X.X% volume. at increase to a the blended in averaging of and accelerated was offset due through temporary QX, in heavy a

averaged demand XX.X% allows. still turnover well and today rents as April to occupied, XX.X% absorb at While additional increasing we are while positioned

elevated compared to The commentary. is downtown most our for to weighing were in the second of on net In a Northwest, the regional XX points submarket more our on blended first year supply specific Moving regional performance. is Seattle challenging to and half one The outlook up supply comparable the ago. year similarly expected. XXXX is in market, basis seasonal effective Pacific rents the quarter

In driven announced push improved California in The in benefit the layoffs. will our We're which supply presuming net first year-over-year. relatively in remains Northern to Jose for growth job the recently outlook effective the San rents, to rents weakness ability to Northern seeing strength muted, Oakland. submarket, supply by outpace California, blended X.X% quarter offset continues

Southern California, solid. in remained effective up in X% All regions were to start Finally, net well as blended quarter including rents Angeles. the Los demand fared the year, have first

to driven expecting manageable such in very is market pockets is we're outlook turnover as earlier, general, region fare outside Southern in I elevated As by submarkets eviction. this supply expected of supply of this in well. In LA, and West California mentioned

has apartments XXXX has expected. better off been slightly for started In solid. Demand than summary,

well. continue We evictions positions and make occupancy-focused progress to strategy our with us

into acknowledge could head but are this peak We the we cautiously demand year. balance the influence apartment the of through leasing as season, macroeconomic that optimistic uncertainty also

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

Operator

comes Instructions] question Yulico Thank proceed you. Our [Operator Scotiabank. your question. from the Nick with with line first Please of

Nick Yulico

parts total any commentary I within quantify guess of impact Seattle, were would Great. with it's the Downtown other a and exposure. Appreciate to to the if some percentage now come Oakland, how as you whether of job that Thanks. markets up right difficult the of on you a markets more markets some tech the portfolio, of company?

Angela Kleiman

Angela It's question. Yeah. Hey, Nick. here. Good

in exposure composition, and big have we in Seattle and portfolio in Northern our on -- XX% XX% the Southern XX% of picture, California about California. On

QX, we we're And especially results pretty in sitting anticipated. where actually and comfortable the have portfolio so at composition, at overall we way had our when is look the delivered, everything

softness. of pockets are there Now,

heard pockets Downtown For about you example, Downtown Seattle certain I LA. think and in

example, Downtown portfolio. so, our of X% about for And is LA,

results And here. you so trending by can us as so, that that meaningful generally see And in it's not well pause. -- our it's gives QX aggregate, we're

Nick Yulico

guess in question That's just talked And what terms you talk could the some about -- more how second quarter. they guidance to the know little and ahead a now. don't bit that of coming tracking little same know revenue second it's then offsets right a guidance of the prevent is if some leased. raise of Great. the units market growth back I I bit the in of get a I could helpful. you store delinquent about

then, out And than with cases, their expected better job playing it sounds out losses the come announcements. on already In year-to-date. the large has tech are forecast, separately like many economic

decision not economic the the about more bit as to little a change talk forecasts of some well. maybe Thanks. So,

Angela Kleiman

here position, of And is we right? in meeting you better said track year And isn't years that, -- May Yeah, more just limited think debated, again. because question. expected. Having we X. what it's until know, did -- because Good than because Fed jobs that it's Fed's next something do past as this you than it's visibility the QX, Angela I

not it's And is a Essex. course, recession, that and so, we and nationwide, are anticipating that's a mild factor, of

with right, the early tech have you're at and clear we saw that be -- on visibility really down, where trending have WARN to especially economy looking in And notices, just we to the peaked headed. but layoffs, is January the too appears it's

And Barb guidance. will talk about

Barb Pak

Yeah, in terms guidance predict the that's Nick. piece, little bit say of getting still is a I to Hi, something would back. delinquency, uncertain on obviously, units

just Jessica of eviction As coming moratoriums. their out Alameda, mentioned, LA, are

the back so, And we're timing to those is going units get when uncertain. on

get also then, the so second very we a given little reforecast us, just good first to strong for the And want But second And was Angela leasing we into quarter we'll that's feel mentioned. feel going season peak into uncertainty for quarter. pretty we further the and the a quarter. factor. that And do full a

Operator

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

Eric Wolfe

stock Thanks. as back your you'll and respect long as stock the long is assets internal keep there repurchases, to or sell discount, the I you're then at reasonable or in term, a going? sort able an term of buy guess just limit with short just to

Barb Pak

locking is of repurchases, terms Barb. with the NAV of so and asset an we We value. This we're internal our know in what do to match have value where going Hi. sales assets fund, are. know we We're in stock

of be And our and so, balance sheet, we're going mindful maintain sheet We're liquidity, structure. to balance going strong of the to it. be cognizant

make it. to it do. doing not about sure And want going thoughtful to we're so, We just do that it's we're to

got in take create and we a we attractive is We did them we're buy of And value and model. first the stock way. very able what back with it. non-core. a new It actually then, And to doesn't for lot the sold redeploy an asset quarter that it price fit that's our operating

very going we're forward. be So, to thoughtful going

Eric Wolfe

of I what sort is to from where to point certain million, sticking into just considerations you'd not you -- guess, and Right. just is a stock? to perspective selling And you're sell I $XXX efficient of to and $XXX able a understand keep able you're $XXX buyback was sort repurchase sell million Or just G&A assets trying as account to there be other it's if that for million? successfully, willing

guess I a your about that theory based you where it's cost? now. internal cap that see transaction your making adjustments for think the sort of that or pretty debt sort market then, to And question, Because rates add transact I it are thin of right on on markets to of be should you in the NAV, using

the we're So, be sort would where they cap to. not rates may transact of of seeing if reflective things had

Barb Pak

Yeah.

scenes. we happening and Adam based we assets our happening off on NAV negotiations and sell talk Our is what and and about off where are could -- and sit are that behind transactions of the think today, where of going I is down based we

a like And we market. so, we the good pulse on feel have

value the years several over portfolio. assets for last the the sold have and out proven We

on comfortable transacting we're And selling then side. stock. is back so the that and the very process And and buying NAV the

Eric Wolfe

Okay. Thank you.

Operator

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

Steve Sakwa

talked thanks. morning. a I that Hi, blended Good Jessica, to little you rates about. the speak could maybe I bit hoping was guess you for

the said April maybe impact some in you think were eviction. I there from

peers, you one So if amongst only a think quantify hoping your because the I just see April. could showed might in decline that, to be all that I'm you

a and and trying sense of magnitude of to that are your just for get expectations maybe the So May June. what

Jessica Anderson

numbers. Yeah. at, blended those net those The numbers out Steve. trade -- are that -- we're overall looking effective numbers those Hi,

out, point And so so, through to prepared grew quarter. March, important the mentioned throughout I my in sequentially it's that as remarks, think I they

that working So April stream, expected steady they we few. time pricing quite we've a rather through concentrations time. strategy to to And a really in reflected time some underlying be in we're a anticipate fundamentals. might but come do the market point And do than evictions, with from there us

number. driven that's down concentration out XX.X%. with so our And after to floated really occupancy what's that strategy. play a And you seeing April March occupancy-focused our really saw had We in

the about the strength we when progressing really our our -- essentially all sequentially our gross since of we think ultimately look markets. market as seasonal But far rent, year, grow our which rates up and market start the achieved we the ramp the through recently the through is leases. seen of they're there, at when -- and we And have market beginning how in as April

outs reflects trade a of effective really concessions time. net in again course those so, incorporate And point and and

back we as couple really California roughly we're So, XX% actually Northern XX% XX.X% market, breakdown on great we sitting activity and And And by saw in today were since of go. today. in concessions April one-week only a free in pulled at then Seattle, far days we've and to average. as

and ultimately, spillover little grow. out and So, continue concessions. pulling from There back a we the we're might a trade to here to on reaccelerate be to expect of into market bit then rents the May, also rates

Steve Sakwa

of just particular? a follow-up, color more any And any do you influence people have Seattle. I already wave get around of think in some policy term? of kind But May bit you weakness or probably the the on Downtown your in any to Seattle East were back from does sort maybe maybe do in seen mean the a side to exposure. in specifically influence to have you I market and just think return have Or Amazon's near peers to people guess a Xst market? a Thanks. Or come that? of the there's spoke Seattle. office that I back as know had you And to more more thoughts Seattle weakness then, little

Jessica Anderson

leasing really as months. pretty we Seattle have for for And a more supply. year. yes, last yes, from But for April, outlook conservative I mentioned bit And did more Seattle overall movement think, experience I we velocity we've as a see a this we will in be that perspective. experiencing -- half been six it back of that the interestingly, quite think challenging the and I in

Amazon So anytime telling. your incentives an able three leasing had May as for you're that how week office strength Xst mean you goes, the mandatory I potentially for us. days to impact I -- to a rates, adjust do introduce like the get responds velocity market leasing far return feel to is return and as And or really

necessarily so Seattle. getting in weren't XX% we And

So that really is goes some there. just to that show there underlying strength

of And positions a Amazon impacts August two. hiring have we the year did again, having in demand pretty think of the July, month so obviously, then, we're diminishing certainly and And with conservative a open out. Amazon I the we outlook XX,XXX factors. that matter Microsoft. and seeing play But have with essentially a the or disappeared supply of Last

have think the year. our things encouraged we're But, working Seattle expectations I is both We [against and with (ph). track for on us]

Operator

question Please from question. Austin your Wurschmidt KeyBanc. next Our of the comes line with proceed with

Austin Wurschmidt

Great. Thank you.

Sort guess of marketing I non-core of buyback conversation, additional uses match funding, guys assets are currently and going sources back any today? to the you future in stock repurchases, sort any or the

Adam Berry

Hey, Austin. This is Adam. Apologies.

how not we last assets anything the for deal right always at disposing either that are So how are sold moment, currently But we opportunistically [indiscernible] potential marketing marketing this non-core not And is at now. came markets. that's looking no, anything. that non-core about. quarter, of or actively We're in

Austin Wurschmidt

you first mentioned just then revenue guidance And a of outperformance a driving in little same I going it. Got to couple back bit. quarter. the mean, store the components

a you received the is in additionally First, the quarter? which Have in second non-recurring payments payments. item any obviously ERA ERA

rents also April how it relative had the Thank to occupancy Is trending is XQ? And plan? benefit and you ahead dip in of then, with you. plan? the of second, in some guess I offsetting trending April, April is Or

Barb Pak

Barb. Yeah. This is

material. supplemental. our same had in Rental payments, in that is Assistance disclosed we our portfolio, so April, a $XXX,XXX store On nothing the And Emergency in

of guidance, in terms in that mid X% in one then continues the the the I to X% half for assume full the would would of year thing say close we and down trend then And the delinquency, to is factors expect half, did be And we the year. X.X% back X.X%. for to April first range, the

So we're as generally occupancy is in and plan on then line at well. plan with delinquency April, in with XX.X%

Operator

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

Jamie Feldman

lot expenses? side. I items people you. Thank the the shift Great. gears for been to There's expense a taxes. talk hoping about in for key volatility you was insurance just and to line Can of

on current And for you expense outlook what do different kind the gives conviction there downside you maybe your Just risk be or the think either growth of upside rates? of the lines? where some might

Barb Pak

is Barb again. this Yes,

the So maintenance variability because we really we more expense quarter. had on turnover, the biggest and damage we're I more seeing this some think side, is repairs, have flood

that's reoccur, don't but of time turnover reoccurring that given expect So we expect one do a be to kind the to item evictions. we

the we've our on already done renewal year. say, I for would insurance, insurance the

out. going number So don't that for be up baked surprises the the to we expect XX%, is is from and but pretty line year. any It that's here on

side, -- so Prop of the which is benefit XX, on and then, our And we the base. do have tax XX% tax of

so have drilled in and pretty quarter the then that taxes that really is in. Seattle And here know We'll known. well second

just the tied is variability And on for so mostly us, R&M. to expenses

one which side. on utilities has in hedges, is And utility gas then place -- utilities, some the on helped put be us it can variable. We expense thing did we've the

equal. kept a level, it's else all more so, at And being to moderate

Jamie Feldman

County yours. more what's specifically? And portfolios, then, across in to through including talk that about Barb. submarket quarter pretty this well going you seems just Orange come have thanks, Can Okay, most

Barb Pak

Yeah.

performed Orange as far it County it -- is has As goes, well.

nothing of supply numbers, as were as couple out stable There's It's trade far the there velocity. we good good noteworthy last leasing outlook. well. as the For years, seeing really

lot is overall, So, stable of California as our a Diego County San Southern markets, Orange is similar as pretty well.

Operator

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

John Kim

quarter taxes? in came going can And taxes. decline likelihood down largest Thank had Barb, a expected, last X.XX% in year? estate OpEx of real bit of your on budgeting you the more and You increase. the little you elaborate much taxes rare I guidance just there insurance you. the estate mentioned think given were where And expense during pretty are you the components is real the

Barb Pak

John.

line, issue with first it deals on last from So, of tax comp quarter the really year. the the

did our the second where X%. So, a if recall, know surprise until have in we down Seattle, taxes year real didn't favorable quarter. We last that you estate went

and The last quarter was of year we budget what would be. our assumed first taxes

a see second so was we where so like minutes you We And and I in, comp, really the bills. ago, -- on quarter Seattle said line. the a few know way high. it that's too we're we'll negative of pay off the X.X when comping the why tax taxes come in easy

still in that's It's And a overall quarter. really so, X.XX% assuming just tax TBD. year. We're the the still for for comp first line this issue

John Kim

And I my banks Okay. that first on a opportunities seems how that It would is that I like you was saw stack higher last part and quarter question at that's wondering with I'm having second wasn't see the could issues could anyway, versus year's that like stack up X%. yields. you case mean be opportunities. buybacks. of high, the But mezz regional capital where if your more

Adam Berry

John. is Hi, This Adam.

in world. last uptick the the say, months, would over mezz come seen, in we've possible a pref opportunities couple of slight and I So

some to seen It either this if or will tightened of new that said, remains into lending there you the we're As have disappeared out wave translate actually sources seeing deals. be entirely.

There that existing been are are while. we're well. out There seeing new, this some and takes development deals long time several legacy again, a that there But months. a as deals process have actually

a number very opportunities, of we're early but many of so, too tell actual to deals. new translate And how them into assessing

potential look to through continue dispositions have use the options we But liquidity, at capital that's is. best what we'll redemptions, always or that whether when -- we'll of

Operator

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

Brad Heffern

everybody. Hi, Thanks. Yeah.

but if have company any, the on what layoffs start-ups well. I So small do funding to base, curious about tech exposure on, SVB the you they relatively associated failure big tech have to you and typically wondering applies residents. you the your in the big been effect, impact tech if resident know a think talk as already touched that I'm think I'm but on

Angela Kleiman

Hey, Angela Brad, Yeah. it's here.

the failure recently, not occurred any impact that portfolio. our SVB see With to did we

forward, bankruptcy. subsidiary, know has filed don't SVB parent happen. its -- And for been know Fed it's we can But stepped so, looking sold. in obviously, then which we the But has what do the that and

And so we further from certainly disruption expect don't that.

estate just some looking impact no looking at And ventures, our real in information, XX-plus technology anecdotal companies the there's at there either.

So, as into it of relates to a banking are economy could -- play kind of -- a current we that's broad sector, our more recession in expectations. And a that it those those broad conversation. for forecasting it mild one may reasons

Brad Heffern

most that. maybe midpoint was And Okay. Got beat one the on the for guide. to know I of fourth Thanks for you smaller but guide. to some was guide that the well, you the than things it versus mentioned are the it. of another The quarter sort for rest like quarter year, outperforming, had offset seems and quarter. increase the first repurchase Barb, then then there as second the

that can you about what talk So, is?

Barb Pak

Yes.

majority first beat our tied growth, vast and the was in the outlook. same-store change revenue the we to of really revenue didn't So, quarter

is forward carried the through guidance. that And in not so

our carry was also repurchase, changed the beat. The was higher the to redemptions. to have and lower reason offset managing better redemptions $X.XX. our will we that marketable tied it's And we're securities. which how And then, and and equity So preferred our timing $X.XX other of co-investment income, mostly that's platform by management stock $X.XX the cash of guidance tied cash forward, our we then, those on partially rates

be So in second that's the in was what here updated quarter. guidance. will revisited the Same-store

Brad Heffern

Thank Okay. you.

Operator

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

Adam Kramer

the Thanks for question. Hey guys.

has you Just of wanted is kind expiring even ask a packages. of then just on of behavior last touched in right question -- the be about and may little maybe -- resident SVB. year, severance wouldn't I I some right, kind some layoffs given many same the in some on now? know kind behavior have that packages, the differences which of bit of maybe Wondering [indiscernible] early later maybe know see if the longer Maybe since differently, we to change severance in look, and tech kind time severance that year, so away. since packages resident passed asking

Angela Kleiman

that through to to I the below kind good it initial Washington. And our and other again, claims today, average. We've Yes. indicator It's packages And the already. in expectation that digested once up play tenants make Angela three job given for we've decisions, good bulk say, seen January want days major can indicator. that severance portfolio. and But what in events. back that, to months. announcements behavior, point unemployment layoff range California of in numbers We they the to occurred they the is of growth our here. to said as a is still days remain tend The XX Having advance the XX the -- XX-year

there. data another point that's So good

Adam Kramer

Maybe That's follow-up. great. helpful. That's super a all

prior of earlier I mentioned how about you pushing thinking of today, that you're know they Walk kind kind of concessions trade-off, basis, occupancy it kind call lower the now on now, thinking managing us you to on given trade kind in of have versus through of Maybe your maybe I minds job just occupancy about you're think managing kind kind guys good screen really right? bringing comes calls. both walk that go-forward than a in how I kind rents? demand were and us versus of rents into think of when this pushing done off a through us of just April. right,

Jessica Anderson

always of Hey, be we're is on so Yes, Adam, season. progressing this to maximizing revenue. opportunistic going course, with Jessica. through And a we're the leasing peak focus

also as you're for know to outlook with of apartment, the is focused spends turn as far about vacancy. costs probably when growth, to year of the But turning I rate the to the we overall, moderating. work rent the think we'll any on going we're our on time growth cost -- occupancy bulk you based I think evictions. year, through think have continue and And an you're experiencing

be occupancy. to getting out make numbers over some on have be really you so make strong focused sense rate to to it And trade really

the the But again certainly, revenue growth us like positioned closely. pulled And overall. for we monitor certainly peak the of opportunities at markets to we'll end have period we well April just occurs and concessions maximize QX, in typically leaving back that

Operator

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

Alexander Goldfarb

morning out there. good Hey,

So two questions.

Valley. just First, to Silicon going back

me Let this way. ask question the

properties guys that and anticipate million have You Freddie. of that taken the the of options Fannie this equity debt being you and out owners and year mentioned $XXX preferred capital in

in see going you debt taken and what's and is just fallouts people, it on on where no lenders fine, this you're and estate portfolio? to your saying preferred pulling equity are debt million out having that's but slated being equity there preferred broader are for bank business? real loans, back speaking, the banking is impact $XXX that Or from So, we that

Barb Pak

cap were X.X%, getting book, preferred deals lenders taken time get you're And our keep was can is have were fully we know Life Hi, in long definitely XXXX, back. it's capital think out step other financing I out. they the I I when pulled underwritten companies there insurance that in Alex, still think is other are I XXXX, in still mid But multifamily the And in. is to and banks speaking seeing taken a of, back, available. the ago available What space. in that mind in we're so government the in. it's Barb. definitely sectors, stepping the pulled and just rates

significant of on portfolio. real think we situation the doesn't But any market, seen for not elsewhere. us. And we whole haven't issues good haven't the mean a that in within And they're it's own distress happening that West our way Coast. in terms seen in It so I

Alexander Goldfarb

Okay.

this that's sort of should is you look like Seattle, less is you clearly only year issue Downtown, supply a be is supply and supply. to Northern second that your everywhere, the the to supply portfolio going into your you see I'm as Or market whatever that's where back next at as that's year next suburbs. portfolio, any after, year? Cal been an there's deluge not see a The markets? across was is Seattle It the and question to do But down you be peak across of like in going area coming going deliver sounded look next do and general, pullback. assuming year your the But

Angela Kleiman

to Hey, here. ahead, a out happening Alex, figure question. It's I'm it's looking what's good Angela here. trying

terms But supply overall, In to just our in year, California course, and these slightly But is down. California supply Southern you other West picture out, down compared majority, is vast is quite it of starting Northern and portfolio, number big overall last as year that this of some XX%. of pointed the And LA, XX%, over slightly the is is muted. Downtown up of bulk markets. then is about LA other the certain

we're to [indiscernible] seeing -- As we preliminarily XXXX, look what landscape. forward XXXX

huge a low already stock we're of And so in a level. total operating level, keep not pretty drop-off, I mind, is supply at XX similar darn a basis but mean total only points. down But right? percent as

available much and challenging And more so, given labor we environment costs. force continue do especially higher construction foresee the of to that

the region northern And in pre-COVID. haven't past significantly rents moved lastly,

So, slightly pre-COVID is below California Northern level. still

And so, And occur. this rent us supply you California it picked see up kind I year. significant Southern you surprise that where country will the growth slightly of think that's supply that where didn't throughout have

big the markets. in So and of and year going similar year, levels that's it's overall next this picture our our [indiscernible]

Alexander Goldfarb

Okay.

Downtown the So, just that's issue, it right? Seattle, clarify, Seattle, to is just

Angela Kleiman

slightly up. is Seattle Downtown overall but down, is

Alexander Goldfarb

Okay.

Angela Kleiman

So, yes.

Alexander Goldfarb

Thank you.

Operator

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

Anthony Powell

good Hi, morning.

terms would to share cap buy that assets assets those high X% core Going back you number buybacks, were in at sell? X% on offers do you if get accretively? to stock or you opportunistically of those to sell back number you have of to rates, would a dollar the non-core a And

Adam Berry

Anthony, first hi, the -- Adam. this is on So,

list first those we we your of sell they where of to assets, could is and yes. have question, part the non-core constantly a we're The do potentially going through answer proceeds. could having and do discussions with what And the see

the with there different tax amount with There's gains, always of we are can the challenges Prop to As stock which ramifications buy XX. dispositions. back, always

So those into what do when proceeds. are account all with those we can of we taken assess

will There's positive exchanges use to the that we portfolio the to think a into non-core in way. is also shed another exchange assets of in overall tool markets affect XXXX out

Anthony Powell

place on you the in consider capital, maybe calls? the view does make recovering or Coast sounds use more diversifying markets a bit has Does Okay, thanks. best the of this the best still on your would more Coast like just about before you're despite West it -- it West optimistic Coast Or of you invest? the East to the prior this broadly, we've into maybe And Sunbelt reinforce kind year talked layoff as activity.

Angela Kleiman

here. Angela It's hi. Yeah,

the disciplined have expanding it that something been question West evaluating. On of we or outside Coast, is about diversification

We're continue And to not those discipline and so opportunities. that going changed. basic for just markets that monitor to look -- has

gradual it for Northern your California, think where the lowest Northern original of in as jobs rebound a just XX%. levels But We're our affordability getting back things pre-COVID below you -- relates average. perspective and rent-to-income is to the we best job the down growth, supply still position northern a deliveries terms going California in on back of to improvements. markets market the to long-term especially the starting getting nail have point, with head, to especially rents hit from region, couple numbers and supply below We're in I

would all that to best the so point prospects. growth And

meaningful net during broad On we improving all on landscape migration and migration just while gradually migration picture the the as been front, well. COVID, the has experienced

it's of you that the deploy us, together point where see ahead the And Coast. West dollar, pieces those our put [indiscernible] so, upside most to all want we to where we in

Anthony Powell

you. right. Thank All

Operator

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

Wes Golladay

delivering with everyone. the just starting cycle. the into get hopes of Hey, part our better I view want of to maybe on developments your

Adam Berry

Angela market, of remained It's With is Adam. is labor the reasons. landscape for costs This Wes. elevated. them. few to of -- a have construction a today pointed challenging has development number a challenging Hi,

And are so where just basically than when are, price solving -- go. it to XX% lower for land premium cap lead will a to willing it over landowners call a, rates it, market

love just right it's supply now, but cancel. to would market, be lesser delivering a into we sure, So, don't the development just deals

Wes Golladay

And few us, it. did have land Or get a you you covered don't of Got remind rid can you those? place?

Adam Berry

pursuing And so we're commitments. have entitlements meantime, revenue. are just processing in We generating longer-term And lease parallel some, others do, the still now with yes. active and those

Wes Golladay

Do Okay. that people a demand visa potential positive could maybe then might you have getting from with people few And you about you or lose people? view the more maybe talk visa? a HXB with it maybe as currently tech layoffs,

Angela Kleiman

part because starting. be We the actually international a tailwind for it's just see to us,

numbers. no think at And surprise if a that has you only out-migration California historically, so net look domestic I it's

last fact, periods, XX domestically. those And In the out-migration of it's out rent meaningful years, net XX even we acceleration. had during growth

I virtually component international is what the to zero it migration become was And disappeared. So California. COVID. drives positive mean for during that

so is come just to that And back. starting

are hopeful the that additive will to And piece. so demographics we be

Operator

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

Michael Goldsmith

seen non-Essex Good or about to living customers taking is question other from demand been market? question. afternoon. also And markets? has that increased customers you currently my decreased side, normal? Thanks for My with And a migration. then the outside move-outs How lot does from -- Essex's have how is demand how compare

Angela Kleiman

are back migration Yes, outside pre-COVID domestically speaking, levels. markets, generally that's just generally of a we're question. Essex course, the to Compared from we -- good to of

thing. do of good And the with the tailwind is. we course, with where -- so that's international, that's see a And

as far numbers, at we As on piece, the at it look net migration a the look basis. we out-migration when

improvements. And we're so continuing to see gradual

Michael Goldsmith

seen the layoffs, out? talked move And specific about but any lot for a we it. my reasons you tech Got changes follow-up, in have

Angela Kleiman

to one really move-outs course, historical or We that's loss in totality, a track, generally And of line home usual in the long-term that haven't. out average, below it's for move or transfers I on the jobs, bucket. Yes. new mean, norms. purchase we've with jobs

that being and is on a I losses in-migration gradual that the job net absorbed And what basis. we're happening so quickly by are is think benefited what is seeing, which

Operator

comes question proceed Luthra question. your next Sachs. Please Our your with live. the Chandni line of Luthra, with Chandni is line from Goldman

Chandni Luthra

operating Sorry, I to how those any issue? are give Could you RealPage are you thoughts us rolled-up was suit? then on dynamics? about mute, around you sorry the your Any And about class changes thinking considering making action that. the platform

Angela Kleiman

several RealPage the system over We here. Angela past been our develop it's our have actually as Chandni, management of revenue new reducing years. Hey, we usage

well And earlier. so, RealPage started the for as that before we Jessica mentioned the lawsuit reasons

that is merit, our believe defense their prospects. we're any we and claim So, confident very without about

Chandni Luthra

with sort away that moratorium believe Great. eviction could numbers to And quarter? was if out process missed as in earlier? going and but there was we X.X%. X% I I upside improving a be faster as net sorry what easier, delinquencies think this, about laid and delinquency expected growth the delinquency you that first becoming of gross then follow-up, And the than

Barb Pak

Barb. it's Hi, Chandni,

the point to And we're in X.X%, Rental Emergency it. basis so X.X% holding versus outlook gross Assistance. improvement then the So delinquencies XX the first of the to were quarter, X%, tied still the for number for year, reported

months now. off. come on I quickly on think LA taking move and really just Alameda going depend these six-plus how to evictions. It's right It's the court

a is going the skip. people go point. just they And how whole whether depend that's eviction or little to And process that through either unknown quickly so really at this

have I that. we'll think on better few a next visibility months, the in

Chandni Luthra

Thank detail. the Great. you for

Operator

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

John Pawlowski

a think the And settles, at if actually when does profile topic. just off behavior? debt the follow-up versus a question Based debt get you one the bad when and of question is that best longer-term on settles pre-pandemic behavior debt to your Thanks. the among Barb, markets. higher trajectory Maybe just dust to out delinquencies guess debt level your on gross bad payment levels? of just bad tenants, do not, you're current bad when structurally that seeing back pre-pandemic

Barb Pak

We was basis been historically back which this COVID, behavior. great believe because John, XX won't something be like we to it's tenants any at about question, have We get tenants during internally have there a we there will ultimately lot. points there to Yes, protect pre-COVID. talk a loss allow

that won't and that and eviction for there. up how of will coming is Oakland of all there. we structurally, year because it's And it's City that go believe fundamental will COVID. to the our into there we process the that get think because taking. shift in of trends I until the out be so XXXX, will take back long-term -- going long think of only of we really a get into we're don't be the full one remains, now XXXX take But delinquency But going year to of it's to moratoriums, And the it

John Pawlowski

debt within has Okay. submarkets reverted back fully bad pre-COVID In the unregulated to levels? portfolio, your

Barb Pak

I don't gone we've don't levels no, to markets. we think in -- other I pre-COVID think our back fully

we've since in call Jessica over out our said, As past residents start over in the or of gotten the that our of prepared long-term comments the XX% delinquent or XXXX.

So, to be this where should we're progress, point. back we good but at making not fully we're

John Pawlowski

Angela is regional question Okay. last me a of more for for Jessica. or And question then

you generate or growth start region would for which think lowest today, years, the or the highest and three the California? clock Southern Northern revenue you do Seattle, If two next California

Angela Kleiman

start, to It's and Angela Jessica, welcome add. I'll here.

level I with see In then most California that terms to revenue said to the lowest getting Southern our levels, it Northern affordability and the improving. earlier, Northern is best top supply other definitely the -- has the of position. just and below growth California upside deliveries the relative rents of portfolio California. in market both growth, because It job for but we pre-COVID, being gradually of, the pre-COVID by of list back or has as been followed Seattle still And are

reasons, more volatile similar And seasonal. a for Seattle but and it's so ranked then that And -- it's for those higher or supply, does reasons, have number more it one.

pressure, markets, which growth it's to so up. above -- still supply relative just the we creep it's it's And U.S., so to to well. cases, with coming in XX%, starting just last, that because means see some some XX%, -- I rest check so rent relative to but California not starting XX% it's in And mean in don't Southern which our done it's -- pre-COVID. we're it, -- like because the

order the the ranking. that's so of And

Jessica?

Jessica Anderson

No, nothing to add.

John Pawlowski

Agreed.

Angela Kleiman

Good. Okay. agree. you Glad

Operator

from next the St. Our of question comes line Haendel

question. with proceed Juste with your Mizuho. Please

Barry Lou

line St. Haendel for Hey, Lou the on it's Barry

on to want just I Juste. quick a regulatory have follow-up question. the

into from quarters? was Wondering provide if there's if your legal core on back in trickle And FFO. piece future if to of one I you settlements big could So, will added Thank that's color any any settlement? that, million that wondering $X.X the you.

Barb Pak

That This no and first occurred on It quarter. is for to of was settlement in related in the It one-time our primarily properties, was there's construction legal at that was just a carry-forward cash. one defect item that. a Barb. paid

done. So that's

Barry Lou

it. Thanks. Got

Operator

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

Joshua Dennerlein

out for start just wanted the software base you the I rolled on the thanks year. time, Yes, the of management at to everyone. touch revenue new

Just -- curious now, maybe as old your it's trending to kind and of versus software? just versus hear how expectations, your the experience and using you're that just your capabilities

Jessica Anderson

very for Hi. with We're thus going a revenue Yes, development pipeline the platform system. Jessica. that things pleased This have very is far, well. are management long and we

point So, a all going at our often couple I level with pricing at the a out allows commercially is mean to of model to well. the you're available looking that collections portfolio property us benefits we're systems level. is price property at and alignment versus in

And then optimize our the amenities. see, far ability as as development, second, to long-term we also

systems, our look is So actually not like portion available and commercially that good with rent, $X,XXX your amenity when of average values. optimized. the fixed it's $XXX rent is at And you that of again,

what optimized. annual an million And for is not on us that's so that basis, look that if over is you at $XXX

So that's system. the also see with one opportunity we moving forward

to So there's a of you examples. value-add couple few opportunities a give

Joshua Dennerlein

level? portfolio the one just price done And Maybe Jessica. by to way? that. the like it what's What Thanks, on follow-up Okay. having exactly mean you that do benefit of like

Jessica Anderson

at, looking high concentration. a we you're when geographic Well, have

property. properties individually, so on you kind at the occupancy a pricing sometimes can be when cannibalizing yourself of you're position based And

when looking a the to maximize balance collectively two-bedrooms, one-bedrooms, and entire portfolio you so, can at ultimately, stable And more through rents an approach revenue with occupancy. you're

Joshua Dennerlein

Jessica. Thanks, that. Appreciate

Operator

Our the with of line from Please your question. comes next with Linda Jefferies. Tsai proceed question

Linda Tsai

for Hi. question. my taking Thanks

getting are to growth of finding and Just quickly are pre-COVID, average, the do job one have a that again, hired market. the off recovered job jobs To you are sense extent on industries laid has that people fully to? below people what notices WARN

Angela Kleiman

more northern it's with the of services much levels. higher in well, But economy and U.S. hospitality. more centric. in is, more California, our tech the diversified course, and, of professional more It's of and Southern the In markets, course, that mirrors regions broad Yes. leisure service income driven,

Linda Tsai

the off, ones is hiring from that are or also Are tech laying is the -- diversified? the more it

Angela Kleiman

It's more diversified.

Linda Tsai

Got it. Thank you.

Operator

queue. today's participation. your conclude no Thank in further are There the does This for questions you teleconference.

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

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