ESS - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, good afternoon, and welcome to the Essex Property Trust Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Angela Kleiman, President and CEO. Please go ahead, ma'am.

Angela Kleiman

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

to result preliminary XXXX on quarter comments will We year considerations of our share for pleased report on Today, guidance midpoint investment third the are my range. raise exceeding as the a update core our of and with healthy focus an guidance another market. FFO per our this performance year-to-date

record Notable several have date. level excellent milestones XXXX These to low highlights exceeding include positive in turnover housing enabled resolving year points factors, with results original deliver key expectations. the and delinquency supply, Starting to of new muted progress end this high our drivers. Essex combined inflection with demand of

market July achieved the generally through remained patterns on solid with historical the with in shown In August Page moderating SXX.X. September. we've peaked consistent and results as rents trending in chart in resilient before quarter, rents third Year-to-date,

rate in As started was our not seasonal late which we rents, last expected, the Especially year-over-year moderation in since combination moderate growth of by comparison. did the tempered October. year, for and of difficult quarter September rents the X.X% until blended

of shifted fourth seasonality. market quarter, characteristic we occupancy As the enter strategy remains our stable, to we've in normal our of prior demand anticipation slower we done operating as on focus years in

X.X% delivering a of The strongest blended regional to winter with X.X% side, a XX% have highlights. top Moving strong we with our approximately Seattle year, has growth growth. our this third where in performer markets rig portfolio the quarter. been

usage this and we anticipate region. thus the of more heavier a rest year, supply the delivery in concessions For

this Therefore, plan in quarter, year for well, of to remains fourth Jose Clara quarter. blended impact. region in the most to rate by for the for this deliveries very we The X.X%. California has concessions Santa achieving overall but low, address occur anticipate short-term X.X% supply the Northern we third performed County was San led higher growth this

growth On to were third Southern delinquency California, These quarter. which tempered rate in recovery region related in achieved rates blended headwinds to by in the lease Los Angeles. X.X% this

region Excluding third a rate the growth quarter. for this L.A., blended produced X.X%

to optimistic lease the begin in are L.A. exact pinpoint, recover that volume we subside. units new difficult next rates to continue cautiously is timing as will of delinquent While to year

well Heading positioned occupancy in financial in October into easing for comps are we with XX.X% year-end, November and year-over-year December.

for drivers expectations Turning our XXXX. XXX high-level supplemental. Page of to provided on the we've revenue We

surpass ranging was We XXX from expect basis XXXX, to to what our achieved year in earnings XX next points. for

XX to these a XXXX. tailwind basis anticipate we delinquency generate Combined, from Additionally, to XXX approximately should components XXX revenue same-property growth points of XX points basis in X improvements.

market blocks. stable fundamental rent continues gradually growth, remains the improve. ultimately for to supply backdrop demand As The key building will and be and

supply XX level long-term the well XX on XXXX. growth supplemental, markets. Page in lower supply supply and side, the On for This average of only of our below basis X% consistent detailed with the is XXXX of total our we in expect of points

positive seen major this demand year. in inflection we've demand On points side, the several drivers

technology future for companies to XXXX growth. recovering, the retrenchment from as have postings shift Job in steadily XX sentiment a positioning top demonstrating been

Seattle requirements which to in to regions. same to and these Additionally, their companies increase return San demand continue office Jose increased has resulted

historical which Related steadily has rebalancing back and to migration this markets, patterns. towards improved is is to our

achieve markets, supply growth Essex rate the in environment lease incremental demand. to well the we Given positioned low with are new

transactions properties X%. interest the on investor Lastly, Coast low in range for resulted cap multifamily transaction market, the strong in has mid-X% West in numerous rates trading the on consistently with the

pro totaling has team rata over yields, share. units at job acquiring at over several than market better competitive our a date X,XXX our originating landscape, terrific investment this to Within done $XXX opportunities million

and execute We in opportunities continue share our our drive attractive transactions to shareholders. ability are NAV for we capital per generate relative to confident returns with of to FFO cost and accretion to our

I'll is surprise production excessive restrict high that Proposition in anyone It a California, leading no Finally, comment regulation dramatically brief X. to of on conclude California to cost housing. housing with

we such, Governor the solution no in is Newsom endorsing XX. Proposition As a joined housing We housing the that building only shortage. vote all know have to on more state's

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

Barb Pak

of begin XXXX in Thanks, balance third quarter with by investments the on results, discussing briefly our Angela. the and sheet. by I'll followed comments conclude remainder

I'm driven The per midpoint range. of third pleased higher of the was $X.XX to revenues. quarter core FFO report same-property to primarily by outperformance beat guidance our share $X.XX, a

the For share growth. per raising year-over-year $XX.XX by for the a to FFO core full are quarter which year, X.X% of $X.XX consecutive represents midpoint we third

A to full relates contributor revenue outperformed which same-property the growth, to year our has key increase expectations.

income. outlook, midpoint. to As such, basis are the midpoint and other XX the for our growth X.XX% of a we at by With X.X%, to expense basis change delinquency same-property we NOI no XX increase raising increase growth is our higher driven points by lower The point expect year.

Year-to-date, which and million on in $XXX basis OP leverage-neutral with a and in been pro multifamily $XXX million has from structured units. finance $XX we've redemptions million free million cash at acquired proceeds dispositions funded Turning to investments. of of properties approximately flow rata $XXX share,

in which balance an to finance attractive anticipate new today relates risk-adjusted and acquisitions, offer $XXX our received book, most year. million in return funds through into $XX the have these the of reinvested growth million given additional potential redemptions We've October for structured our the cash As we it the markets.

apartment our the flow profile of of long-term the growth short-term in quality and strategic cash our FFO portfolio. acquisitions, the growing While reallocation via dilution company the improves results

and better FFO growth for NAV shareholders. This, our turn, core in drives

of $XXX landscape, between business alignment to and range our likely to book most change this the to million in redeploy in the quarter. up proceeds core a the X% target first resulting expect FFO. better Barring these with into of million expected for of we are structured the investment to XXXX, X% to acquisitions, reduction with finance of end Looking continued redemptions $XXX we by at XX% a

comments Finally, few the a on balance sheet.

we refinanced window. opportunistically years, debt see several last when issuance early our maturities have attractive the we an Over

that trend we effective XX-year we maturity continued this of With ample year, an to rate manageable be $XXX We schedule as X.X%. next flexibility issued unsecured debt have million and bonds a in opportunistic. quarter

Overall, X.Xx. our as net position balance at leverage sheet in a with strong debt-to-EBITDA low remains defined by

capital company In of addition, and with the liquidity sources over $X well ample billion in is positioned. available

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

Operator

the from Scotia first Yulico The Instructions] question comes of [Operator line from Nick Bank.

Unknown Analyst

you assumption Alameda County like XXXX, debt question confirm prepared This comment, markets? your your is broader Daniel And will confidence improve a ask with just maybe XX of well. those Angela, what basis the fundamentals to other imply LA normalize gives remarks, Nick. bad markets in would with points supply/demand on the should your this improvement Wanted as to from in

Angela Kleiman

respect couple on your of happening things to gives for ground With that LA are thanks confidence question. Alameda, us that improving. the some are also a Daniel, things

in the So for has just It terms delinquency there. really let's start example, improved. volume, of

X.X. In for at year-end last year December, L.A. it's our of a X%. fact, in Today, rent almost as our was delinquency percentage

correlation a we've So move that progress. the through that's And key continue that courts been trend. to is seen and with a direct the continuing eviction to significant

L.A. viability positive couple just general of actually far given us that things A has for economic as as sign. But a

the Cup course, of coming have, we the Olympics. example, World in for So

to is economic are program $XXX both But Governor benefits just million. anticipating we about so to and television this that domestically to million investments, this Newsom credit there further, California's current film internationally $XXX And will from week, and proposed from be region. what double tax

if So these are that gives all will. of we're optimism, signs seeing that great you level that us

Unknown Analyst

Great.

As a mentioned signs of you office follow-up, something of mentioned not job -- I signs tech think backdrop, from landlords. improving heard necessarily you you

expand what specifically you're where that. and maybe more So a seeing related could bit to you

Angela Kleiman

happy No, Sure. to.

to it's So companies. that closest top they're the sector. apples-to-apples can track the openings health the and the see, we XX the really overall of the that of we -- And technology just is drivers of thing tech

use have have first averages. reached for follow report X we independent seen pre-COVID almost years, and in so the a -- And and we we openings job that third-party the time that

a I'll here. impact. this keep in openings and it's right a not is trend, that obviously, that indication be these And hire will in future. things are in direction is the that good But start ask positioning to immediate an mind is lumpy The you that thing the it's because an companies X going

Operator

question is the line Wolfe next from Eric Citi. from of The

Unknown Analyst

kind Joseph of debt Nick going the with California, here 'XX out bad my blocks. mean, pricing continued around I guess It's Eric. supply. building just improving Appreciate in question laid low you've forward. Southern particularly situation, I the strategy is

point next out percentage on the how are thinking half XX push to the are actually going about you How And lease the over side? XX new and ability days? renewals year. So next

Angela Kleiman

here. Angela question, great a that's Nick,

quarter, demand in address our of occupancy terms in shifted our typical that and -- have to anything is of that's strategy characteristic -- strategy, not the fourth for slow seasonal an we unusual. That's On business. operating to the the

What the to to caused October, we have headwinds expecting to that is course, our guidance. September we, deceleration abate. are and we which seen in factored that are the into those start of

year, give a a a And half it's X% of our example, a only concessions half represents this for is so And week. was year, like X just rent. in big week. October seem that about doesn't to Well, last -- you week point, data number,

mid-Xs. financials. concerned, the But we're renewals can see as on in you the So sending is impact the out the year-over-year as renewal far

number. in negotiations and within again, So plan. well basis a middle X that high with kind landing points, also we're the range. once consistent of our Typically, is range the of from strong that. the indication early XXX to And is Xs this around the

good and So all for rest our these to power the next pricing come. the are in year ability year indications of for

Nicholas Joseph

on if That's And potential -- side. have do right, of could you if control what were on understand following I just about exposure to think kind repeal some so the what it cost your repeal And guess, is the the of how the few that policy occurred, rent very of But the over arguments on currently? all municipalities months? of then to helpful. form happen pass, to

Angela Kleiman

of that on And risk. how Yes, is this think we to really question. a kind internally good about battle

difficult right can city start And the a with an me on couple the may that reason answer. because enact a Let be to that's very California data useful this control brand in think in of XXXX. question buildings hypothetical during is points I like every now, the it case because is just assumption

about moderate. cities of have about control. these rent cities it been believe control not, actually And a is of lot have with these quite active And rent in cities XXX or only X% the We California. where

far Proposition XX. mayors have and announced so XX Prop were out as they as that concerned, came actually And is against XX

And interpolate to have same and difficult XXXX pattern campaign so out try And it's the on this So that like that of to it's something the for the -- for unlikely is is Jose, seeing as ones times, a were some is rent importantly, that we're example, in these just predict. and But by -- XXXX the are control that pattern. us too both more it's the landslide. itself, mayors same what they defeated the following San to

overhang it And understand that just so unknown. I an in isn't because our stock there's

But And control what onerous. onerous the brands. this seeing like this ones the Santa we're with ones the Francisco by on the the something and evidenced legislators, and Marca public most they and the that most the in California is is highest in expensive understand are cities fact, the San impact with of

confident the this continues momentum, So are we is net that the defeated. to campaign will be gain and

Operator

line the from is St. question next Haendel of The

Juste Securities. from Mizuho

Haendel St. Juste

So from a of questions couple me.

rents not your moderate year think remarks, until I that you last prepared October. mentioned Angel, in did

tough are the comps easier looks October, had it ahead. getting this year but in September you comps So like in

out there -- renewals these So here. comps? I of Just a reacceleration guess I'm any lease curious kind broadly, color new a rates blends sending scenario we and what's more can on on your today in you're is for embedded in where here October outlook curious what near-term see easy but

Angela Kleiman

thanks question. for your And

new So renewals in the we are out sending mid-Xs.

are signed Xs. And in the so and indication far, high early those leases lending who have the

it's on average. X.X% say So X.X%,

So good these indication. definitely and positive are trends

possible certainly rents just increase as last far year. as continue I the mentioned, through October possibility because, of it's As reacceleration, to

factor. X that's So

strong. in we November, December just this if Renewals year. And same remain nothing don't have year else, as the we headwind last did

a is that And so possibility.

Unknown Analyst

growth back Okay. being the tech and again you quarter mentioned years positive in mandates job in-migration. time And employees levels. enforcing pre-COVID office this seeing also return now to then for first More

demand better So could seeing guess next early if I'm applications, of into or I more of you're pricing rent any curious demand power translate growth forebode which things into year. that kind into

Angela Kleiman

immigration Yes, things question. Haendel, couple that's a front. good of on A the

the at moving our benefited has year you growth not job robust and if this it's the especially Coast. the that stable, numbers. West and seeing along. are And It's for environment, We look generally it's U.S.

And relative able to outperform, from it's demand forecast. our to coming so us original be for to elsewhere

in terms to predicting how so going And impact. that is of

X And I'll point to it's -- that of believe year, early in-migration. is is the too point, benefit were Next most do office tell this year. to we return reasons. really give data for X you a which captured One our

Our it's close. pretty level, da*n not total in-migration leases, as but percentage our to it's a of pre-COVID yet

So that's indication. X good

we've So maybe you the return office. captured can XX% say XX%, to of

there's as But drive is housing what some about robust all going left and going for will not to next So demand be but be it's really as job year. year, next this for to growth. year

on macro forecast going indication base low what all mean West somewhat our Fortunately, we'll we to still case the interrelated low is the for us, are job consensus Having risk. Coast that because that, will said to better where land and economy. for level is very entire need with a the demand,

Operator

The from next Evercore Steve of question Sakwa line is from the ISI.

Steve Sakwa

a provide on bit dispositions. you rate on pricing you as Could of little different that well the acquisitions of as the the did sort cap color

Rylan Burns

our in at were attractive here. conversation. both pleased to buy are X debt basis, maturing, Xs. long-running were XX% the out quarter, and we we high third partners Yes, we in today probably believe necessitated which Rylan venture cost these buy In to had to very joint Steve, negotiations. to we able XX% those at discounts the yields replacement And cases, of

X In we it we transaction think -- OP pricing. also a stock negotiated, around which unit market $XXX. price, were strike we to able XXX than an instance, negotiate better was So was at when was

we've is pencil us basis. to did cap So many transaction for Subsequent portfolio that this to that an in make that many, similar in the X the portfolio, are years. earlier was deal release, Xs, in low a requirement rates owned quarter market noted older given but the where is that that slightly necessary was we to portfolio this year end, accretive the a the for

risk-adjusted subsequent San we We've Essex The were invested cap going our owners closer that elsewhere, old redeploy of this know to a investments. Essex. is we was XX-year returning that there X cap seeing disposition are in a And to to higher rate to we're into -- and inclusive and basis thinking very we asset majority Essex And order is well. in with Mateo, as to to capital. better already approximately the opportunities able and capital

Steve Sakwa

to bit Okay. you how developments? guys dirty And how you I might being realize development may today be in-place a trying still developments of you able about future new to and think figure current costs far I'm And would rents, a word, pencil just some out be on thinking are where from . start projects? but perhaps away

Rylan Burns

it's year. been the No, on Yes. It's good we've past a here over something question. really focused

didn't returns recognizing years. capital So challenging sense. recently are know, as seen the is really just and others that for make environment, risk-adjusted you new started haven't X seen almost we've development think more we've I we return a pullback. The What

are hard costs So down. to to starting starting come permits are down, come

you land attractive if basis and we're an can I'd an design closer. secure efficient So say building, getting at

next And several -- we sharpening I pencils. quarters. here pulling of history a are back, our others to in developer. a So with more have come have the being And we'll cyclical think we

Operator

of The the next from Piper line question is Alexander Sandler. from Goldfarb

Alexander Goldfarb

questions. Two

picture comments the east just mentioned you just Seattle, collectively, you the in next I How you sort the But it's or maybe think some if mentioned of 'XX? months Angela, -- San First, outline Jose. on it's also you supply think you're just portfolio impacts? extends in with can think much around if of and side more the of you supply it that X something impacts at? sort and And picture longer that of looking of big

Angela Kleiman

good Alex, question Yes. there.

little in On it see maybe quarter, the San over on the how impact the the do really concentrated the be leads first because landscape, fourth that all really supply in a occurs. more quarter depends we only delivery Jose should bit

go So total supposed units over to they Jose for next or far that, it'll come all rata different once have that's the -- said about, impact. for be a But at We're stock talking low. is still as San several to example, the full if going having very pro the delivered. if year, or they months, as X,XXX

-- Unfortunately, Downtown And quickly. there yes, a past or some about say, seen, it And beast. X,XXX it's we to months challenging absorption happening quarter, those as occur It's along not low, different be of for we it will should in and a involved. concessions Oakland. still X or It's this or X why L.A. should months what but that the something lines. fourth expect example, to very be well, in get within, very going we've as those is

supply in it has been supply is a more market bit total Seattle X% supply. little little overall. generally, the a a of bit terms delivery of above stay with higher I mean,

east a side, continue market. the is see quarter, start fourth the impact Seattle we first helped in from also having the we in so And the generated the believe in past has that that demand Seattle highest the to shift what and probably benefit level the of and in continue what has quarter. will

or a -- -- growth, of with expect the we absorbed will job we higher the be So demand timely. level have supply that

-- a Seattle. And year so concession while because it temporary be there shouldn't every how been environment, that's with it's prolonged will not be it's

Alexander Goldfarb

you on recycling. Okay. the And then, question Barb, a for

way that about assets recycle 'XX, of some preferred as about sort or we you of especially than of and debt book to get there sense can a is preferred Is in whittle down and into redeployment it the and from we Is sort how aggregate, the the think $X.XX? assets? think As think it guys that? dilution trying debt income-producing more sort some we should book into of pennies $X.XX, the about Just impact?

Barb Pak

question. Alex, that's good a

is XX% can and on at the preferred around losing think X%. we're I it redeploying what you do we're

so call core But was talk we're that's you're perspective. of impact did targeting to And what from kind per I X% seeing FFO the the an FFO share. about on our X% that of

X.X%. were In we at XXXX, about

of loaded So low that have lot core to redemptions then next will year do range loaded. structured year A as we X% FFO. XXXX of our back-end We some X.X% this about year. front-end moderate the finance our And is were redemptions next expect

we next to it so year. do moderate And throughout expect

have NOI well are acquisitions. money we this should we as as higher But redeploying into back

Operator

The next question from Kramer Morgan the Adam from is of line Stanley.

Adam Kramer

the Just of wanted kind the kind to was versus And of then still more this XQ as that it's here lobbying come of quarter advocacy given election year-to-date ask expense, kind there's quantify expense was timing this what about quarter. the of it what Maybe if quarter and maybe in disclosed end. of to the well? the been just timing

Barb Pak

it's Adam, Barb.

So million. quarter, front. we full million a we're on in the year-to-date, $XX And little assumes advocacy our the $XX third $XX over the at spent for guidance million year,

Adam Kramer

to out of it. XX versus versus maybe, I legislative prop don't prop And whether efforts? able Got you kind lobbying XX that's are the split know, other

Barb Pak

No. It's mostly that we of front in but I don't XX, me. and XX all prop related have have -- to breakout don't

Operator

Jamie the next of Feldman question The is from Wells from line Fargo.

Unknown Analyst

renewed just the seeing commercial policy frame how maybe in you hearing and overall? property your that's initial think looking and insurance what on you you're December. insurance Can give market us on I your thoughts So

Barb Pak

Jamie, it's Barb.

memory. good We have a

our going what moderation premium have year this the how midst to in renewal It's a it's But the insurance is we in industry little too increases. in a early seen play insurance out. of now. right are to We know

to there X fourth is it So that premium obviously we've our level our we last annually. do year, just little increase have will at We'll on years, the point. XX% to call. difficult And from more discern XX% a next the seen moderate give to this but expect some quarter history, color

Unknown Analyst

everywhere hearing relatively isolated not like know the are be impact? Florida, I And that in think country? you'll spills Okay. from in over you're but Or you you do the obviously

Barb Pak

the impact obviously, question. hit. we're playing a both renewal that as didn't we we see November But big speak. That's too And something of heard. going It's hurricanes an good that out is after

tricky . right of now, this So a that point. those little question at we're to answer discussions the and midst in

Operator

the The next from is from America. of Bank Josh line question of Dennerlein

Unknown Analyst

guess, just added includes you earn Page was at Exhibit see the you I S-XX.X I that looking go impact. Could kind I in concession in? supplemental. that or, of over

kind out that and just I what means versus think of want here? clarify we should So maybe it about models to how our like

Barb Pak

Yes, is Barb. Josh, this

how our assuming forward just And that calculate projections is And next then earn-in kind the for rent So growth what next no October. through leases signed December? consistent we year. and we've November, it taking really carry It's year, market the last does that year. of with

it but think basis just industry below gross are at that include concessions how the leases too from points calculates not concessions. this based including And doesn't on rent, is or... XX line. don't dissimilar this I any signed. because it's question concessions the your number, the projection point Does This that answer our is

Joshua Dennerlein

Or makes That open kind No, just kind the maybe that assets? sense. versus driven? income-producing is you or like part. -- think about appreciate And into JVs then like of purchases recycling thinking capital do market lean maybe just opportunity out just it consolidating you'll guys of you taking of just additional why outright no, have I set

Adam Berry

has joint business capital. venture source been of efficient the really Josh, an

has will And points and company continue so the of to through various benefit cycle. it the

a partners operating Essex have alongside a can financially And company We housing. and best-in-class like platform. West who like great they want aligned investing exposure to that's Coast provide

saw had So to we purchase in accretive in invested most we to many shareholders. years and We for opportunity XXXX, from an well. Essex's importantly, knew communities was that perspective,

the joint owned capital of are set our a and discussion partners, opportunity Going market. with it's function we and the venture X,XXX going in still be that our have of in to partnerships, forward, units cost

and at to grow. all are we open So avenues eagerly looking

Operator

from Capital is question next The BMO line of Markets. the from John Kim

John Kim

points over quarter. of been A basis that your years, points it's spread XXX peers lot between basis It last the and new was you about the are ask leases XXX. in to this at wanted have or X I cases. more some XXX renewal

are So it sensitive some a seems others. I'm case. bit your why the And than that's wondering to more little maybe like renewals market rents

Angela Kleiman

John, here. driving what's know our rent don't it's is if the really spread. market renewals sensitivity Angela I and

it's that's strategy think I spread. operating driving more the the

And we so what maximizing revenues. focus is on

out what try is by we we going needed the influenced X And anticipate renewals strategy or whether as supply And send market landscape. to job course, occupancy so a and landscape, to of where happening, be focusing negotiate we're today. the the month And on along that is way. from what else is the

maximizing And all we factor mind. to our try revenue of that so with with total in

are What is one, focused course, have going others. to impact. new higher a peers an impact seen the rate it's we And example. just impact, there's on you it's going occupancy And our for if getting focus more going of when a not lease rate to -- to some it's be say, some rates, getting renewal on, higher on -- of lease and are focused more

are asking what know objective that I'm per se. than I a But ultimately, have maximizing -- probably And levers you're not ultimately, So it's more our we you all that think giving specific for. focused we rate business different revenue, is pulling. do on color I

John Kim

push renewals maybe ratio case wondering new leases. X lows. out in right is -- Sure. buy expect the harder I'm all-time able than to versus now. for that of low, they're But that what to of because some the would I you a But they companies, mean, home move is all-time at

your so markets, going in little does that because present as for renewals. prices you me potential more don't far are I'm home So bit I as, a high know, pushing upside forward wondering

Angela Kleiman

John, Yes, that's good a question.

or pricing in buy factor it's been out meaningful For prior not has us, smaller primarily move because cycles the homes a percentage. now whether strategy, it's a our to in

So more out range. around for say percentage XX when very buy -- homes even somewhere our pre-COVID, is during to rates move example, were interest low

very back So to then, already cost Xx. the home own almost low. it's is And a

I think ratio it expensive about move-out Today, more than rent. X%. home is buy to a to was the X.Xx

to that, about about we're more own it's almost Having talking almost a said X% -- So X expensive than or so half. to X.X%, Xx rent.

on increase really the So that pricing so our that incremental because strategy expensive. ownership on going move needle already isn't to of it's cost

Operator

of is from the The next line Jefferies. question Tsai Linda from

Unknown Analyst

Maybe related the topics some to earlier. covered you just of

new from Just inflect months? getting last here, a easier for positively you the with comparisons -- more rate lease little expect would rates new X

Angela Kleiman

Angela anticipating. here. we it's That's Linda, what are

in the inflection And went with or do September. and positive. an it year-over-year comp, easier But trends October started point in so new negative this expect either where rates we obviously neutral becomes

Unknown Analyst

And question some earnings Barb. kind Could what you for the and for provide plans have next that would your impact maturities a of refinancing for quick XXXX year? upcoming maybe on on color

Barb Pak

Linda, Yes, the are that's bonds. And in question. a great We're is maturities that most the market. million of unsecured year $XXX constantly monitoring next due

bond the the at looking to that be we'll refinance market So in near term.

we -- at. points today. that were XX When I wide on think of XX-year that's Today, at we're basis the it in August, is X.X%. we issued treasury paper depends the tenor the and where probably

to attractive terms into anchor continue will low That's a we're window. if and there going an there's rolling in off Xs. so because be X.X% the see we'll opportunity. more a market refinance a the coupon of And to bond it, up to opportunities earnings impact But

Operator

from is of question Street. next The Green John from line the Pawlowski

John Pawlowski

I wanted more to into the use some team to as drill study. return office and a Seattle case

and to can mandates office Amazon choices conditions effective. to metrics specific those ahead So how few share return policies stricter need us leasing of have now have others becoming to housing help ostensibly change improved -- the since understand and a announced you any

have either or traffic recent how hear months. weeks and spreads in to love leasing would foot So shifted

Angela Kleiman

good a that's question. John,

think some when So other in Seattle, was return what I we have seen is our X these to office. companies And of Amazon first demand fact then, spike it announced and increase or in days. a back

saw correlation. direct that And so we

January, announcement going be, benefit. it usually, XX as will here days they because Amazon we're of that's say, it XX to as see full fast enforcing the today, far worded question the in with going when announcement. And within, the we time do And that to is of was when start

away. right office, this said announced when waiting to their And return going true that's we're well. So to -- first hold to they they how see as it also enforcing Amazon were if time,

John Pawlowski

want get then the when core Angela, I exclusion the last just for X these frustrated Okay. And of I Barb, about metrics. a from FFO. advocacy me, money costs to excluded gets of from talk lot

more nature, episodic, efforts definitely as in So these become not they're they're onetime. regulatory but recurring

FFO? you excluding internally recurring, still meaningful just core guys they do expenses How more become as deliberate from

Barb Pak

Yes, this cost any John, them this I on had every recurring that's since front. a And see in we good mean we XXXX don't as case, year. question. haven't

So it's been X years.

we terms costs, And so in we them. and is plan X what -- this how define a of of as do have nonrecurring

I the it's that think much regularly, it's been spending. industry, standard revisit but and we're how pretty something do we've about transparent we in

And reoccurring we're not it year. to trying But see hide we it. every so don't from

Operator

The is Blouin Sachs. the Goldman from Julien line from next question of

Julien Blouin

X% do of rate into of in sort the maybe you've units benefits significant that many the closer a of would yield on Rylan, be your X,XXX most interested cap come digging I JV buyer guess, in opportunity? front. those And those to help have been buyer as acquisition sort consolidating had Prop you getting? plus your JV that if of ultimately XX comments how you remaining

Rylan Burns

them our of partnerships, them. plan in have consolidate of like investments of such to these opportunity. had is would made several that we we've But and we that But that to would structured the that to all being all if a suggest are said, we XX would we fact and or the benefit. begin -- Julien, not Prop have strategy with them way great own a

forward or opportunities maturities to as will venture debt We come joint as forward. continue maturities evaluate come

our be us. and this opportunity, are it business, to partners but we represents committed that to business we're to with So an want this in committed

of those could how about the be expectations consolidated near term. manage just many in So

Julien Blouin

now partners, at I That's for Great. like bring capital to that lot And are these sort on Okay. accretively guess, that of assets. attractive in sounds secure helpful. do more maybe older been upgrade own? that a to you value-add would opportunities of yields, it a difficult redev putting maybe is have any sort assets straightforward but does to these little your from of

Rylan Burns

partners. year again, cases this the got initial that these those business part that was we the a partnerships our opportunity create where often to great And that It's can a was than more earlier value partners' continue would are fair from that gating significant we we question. had I are with we capital. not, development rarely that have asset say typically, discuss X we that issues there of that portfolio see

imagine, can little bit you as it However, more it consolidated when is basis. on internally a a we're efficient doing

are these for -- time. owned long assets So that a we've

assets. We have in our invested

is So But highlight what acquisitions. the cases, some into. significant to some most stepping And we value-add know in nothing there we're opportunity. from recent

Operator

the line from & from Kim The next Alex Zelman Associates. of is question

Unknown Analyst

to some that expectations to allow you wanted through occurs remaining blended November seasonal of outlook. especially that you months. December talk your your the I these X.X%. Could year about around for rent growth noticed of in referenced outlook your I upcoming with track, you remain plan ask on moderation and I on full in that guess,

Angela Kleiman

Sure thing, Alex.

you give example In terms the hopefully of what that color. December, appropriate give you just X looking I'll can we're November, for at

X.X we were December, giving San to So in October, of concessions up . And in in week concessions November weeks. a out and last Mateo. half went by year,

don't that influences. San example, sitting supply X, we increasing some see for dramatically because in we So and last other at had year, Mateo,

there the pickup. And That itself that headwind is fact no is going a so on from to concessions. the in be beneficial just

working evictions will on overhang that The second the way to in continue course, a of is, through new factor meaningful abate. with leases LA

third beneficial So another that will And be rates. of piece factor. lease is the course,

they was New average October lease say, November about, down year, to went -- negative and in rates X.X%. last

And in so this October, we're at again, X.X%. year about here once sitting

and room of lease front. headwind not that plenty a on have certainly rate new We

and about potential of and talked -- lease new forecast. renewals tailwind either a rates. why have reacceleration than no have on is original we We And our component course, a which the have our stronger headwind last fronts. So actually or multiple performed is the

our so a see a basis, plan. to And blended path we on achieving

Unknown Analyst

provide for to that 'XX, the it. your this the for any some revenue could there. guidance upcoming commentary for follow you of as wanted but specifics piece well ask other income bad to revision? And fourth about as delinquencies, upward not then Got just assumptions quarter debt up, for other helped like and drive

Barb Pak

Yes.

quarter X%. maybe for not think we're under too fourth being around X%, debt, we'll throughout right be the year bad terms of In sitting with year-to-date full slightly dissimilar. right the We tube, around

lease did to related income quarter. reoccur that relative the terms have not which third we numbers, higher decline to quarter, the but the . seeing other In tenants, in the of going other income it's the fees the which quarter in sequential fourth quarter corporate drivers break third quarter, hit fourth you're to for the line, in causing is some

Operator

the from comes question UBS. from of next line The

Unknown Analyst

to how a to to if burn-off too Are coming little if previous a It this tailwinds half and is question, like think this we sorry for of thinking San year. 'XX. the Seattle way But be guidance. asking Jose able can you some in should discuss impact follow-up quantifying about see impact. second of we seems there close is in of about that the a A wondering the could some and concession

Angela Kleiman

it Amy, moving submarkets concessionary we're What the to a level vary is Yes, when X comes good another may is while to our supply. area question. that's seeing essentially from it that in

And -- downtown heavier I or should this so over yet was downtown Seattle year not so heavier Seattle. mean is -- -- this year XXXX, last year, I say, in in

year, going be heavier Next little in a to side. it's

from shift to X the going to it's other. so And

overall, to And the the really therefore, don't for we all year that year vary environment X from other. full expect much concessionary to the

Unknown Analyst

levels terms we think in to a are are Great. environment. the of norm? you the transaction of volume? Or quick kind absolute current X transaction trending And still pre-COVID back on a Thanks. just that lower Do

Rylan Burns

pre-COVID approximately average approximate what transaction would below Amy, actually 'XX It's call and for or volumes still the national of in say, XX%. and saw what around we of X/X XX% well to it and Yes, 'XX. we year-to-date California average, Washington, is in

was uptick below portfolio So very previous that that seen aware last the level picked years. you're transactions sure some we've the had includes but we've which year, large there we're I'm of, volumes an versus limited in still volume. of up that It's of

to uptick of in continue good capital markets volume chance transaction there's a year. next So trend an favorably that we'll see

Operator

last from Ladies Bank. and the the from Deutsche take we question of line gentlemen,

Unknown Analyst

the available stock rate sticking in regional sale could pricing? differences seeing opportunity for regards if cap markets, of bit movements you talk little your in front. in you're to Maybe or what Maybe on kind about acquisition maybe a

Rylan Burns

a seeing for Yes, it's core We're in bid. all terms be a cap wide fair differentiation newer of rates of product, in question. our well-located product not submarkets continue to well

some the rent I next -- Peninsula, people several seeing think to where likely more aggressive be are the above-average along the growth is most for years. I you're underwriting think pricing

terms transactions for in up. minimis. de downtown centers, start We've volume We've cap L.A. LA Downtown the has year. several seen in product transaction rates high-quality the but difference So particularly spread this year, of is in the limited seen and picked that

healthy mentioned they in the markets. I like volumes relatively But to not of we've previous So as earlier, feel seen years. level again,

Unknown Analyst

And comp Northern this of we at a Great. then the bit. But the look the in were little behind kind expenses that? higher and could portfolio California it driving be if tougher a to drivers

Barb Pak

our expenses would of a Yes. related. were And than ago. XX% in I It lumpy year and other expenses OpEx. There of a represents depend there is regions. utility that somewhat does -- happened some say the higher are is little quarter-to-quarter what on comp

can that have impact. meaningful a sometimes So

really about, comp alarmed the norm, be on from to nothing really nothing the that's year. outside the just so it depend does And prior

Operator

the Ladies of also concludes participation. Property it And Thank you and question-and-answer the gentlemen, session. conference Essex your concludes Trust. that for

lines. disconnect may You your now

Essex Portfolio 30 Oct 242024 Q3 Earnings call transcript