UDR (UDR) 3 Nov 172017 Q3 Earnings call transcript

Company Profile

Participants

Chris Van Ens	Vice President
Harry Alcock	Chief Investment Officer
Jerry Davis	Chief Operating Officer
Joseph Fisher	Chief Financial Officer
Tom Toomey	Chief Executive Officer, President and Director
Nick Joseph	Citi
Juan Sanabria	Bank of America Merrill Lynch
Austin Wurschmidt	KeyBanc Capital Markets
Nick Yulico	UBS
Drew Babin	Robert W. Baird
John Kim	BMO Capital Markets
Rich Hill	Morgan Stanley
John Guinee	Stifel Nicolaus
Pete Peikidis	Zelman & Associates
Alexander Goldfarb	Sandler O'Neill
John Pawlowski	Green Street Advisors
Rich Hightower	Evercore ISI
Rich Anderson	Mizuho Securities
Neil Malkin	RBC Capital Markets

Call transcript

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Operator

Greetings, and welcome to the UDR third quarter 2017 earnings call [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Vice President, Chris Van Ens. Thank you, Mr. Van Ens, you may begin.

Chris Van Ens

Quarter Conference Third UDR's to Financial Call. Results Welcome

requirements. the and package to non-GAAP during were constitute measures third G ir.udr.com. Investor this are quarter historical yesterday directly may financial call statements. with most disclosure release note press to the GAAP In website, our posted Our distributed reconciled supplemental measure afternoon section which like to accordance of that we forward-looking supplement, have Relations all the and in comparable Reg I'd statements made not

do statements Although are duty we update over Tom press factors release risk our discussion and we no Instructions]. included believe [Operator to in forward-looking the A expectations reflected and CEO, that based can our turn undertake We UDR's are in any to any detailed not the forward-looking filings assurance expectations Toomey. statements met. risks assumptions, will will SEC. I in now be on our with reasonable of and call President a the give

Tom Toomey

you, to Conference UDR's everyone, Third and Chris, welcome XXXX Call. afternoon, Quarter and Thank good

are Harry On be during discuss Davis, well call. call the senior as portion our today Troupe who Joe Jerry Financial will me with and results; Chief Operating will Warren officers, of the as Alcock, Fisher, Chief who the and Officer; Officer, Q&A available

and for growth drivers and wage our in UDR industry. demand. growth sentiment, the for with Stable for strong improving future macroeconomic First, growth, of overall apartment conducive bode fundamentals continuation job combined well remain consumer

the tailwinds D.C. while remains monitor of concessionary in we at seen it for Washington, current slipped supplies Federal mindful demographics our we and next a delivery and basic scheduled we the continue true that in have new demand have are to some signs into widespread apartment and recent activity. provide While XXXX year, Like will Reserve no irrational back. is everyone, that necessity being resilient developments at

high-margin X in our portfolio areas three, in well, success driven of in to Developer of year produced and level earning two, XXXX points; the mix Next, us of dedicated work their market the site strategic solid investments raise our summary, remarks. incremental risk-adjusted-return commentary long-lived, XXXX diversified again third one, along and results topics continued our and operating additional teams; our our In guidance Program. focus: by gone the quarter, prepared leading same-store Capital price team Joe corporate full has Jerry initiatives; on ranges. will provide four, these and high and

around thank contribution and like I'd helping markets associates especially beyond, quarter residents after focus back Next, to our the and strategic commitment to have in Texas the our track we and their the all finish XXXX as dedication to my to of those drive for and sharing another best recent great quarter expectations associated shareholder Florida to with Jerry for UDR and at their forward, continues our I'll focus it to continuing a With turn We with operations. conference to our business his over to our well address as 'XX year two you call revolve fourth on how our outlook. long-term release that, grow do better out get on looking they Last, into and to value. forward to a hurricanes XXXX to XXXX. strong look getting and what shown

Jerry Davis

and Strategically, are XXXX X.X% communities, Year-over-year, and to respectively. rata good X.X% were revenue urban, broad-based occupancy we long-lived, operating same-store pricing maintaining another same-store renewals; announce by and the same-store operating of to higher were expectations our NOI portfolio Thanks, of larger initiatives. and rational quarter growth assorted towards on: operating rate retaining residents continuing revenue proactive growth X% focused more on Tom, due X.X% respectively. After weighted and original drive second, remain strategy markets. pleased of growth in which first, third results. our quarter A+ results ahead NOI revenue afternoon, our and range; X% and percentage JV strong high-XX% including Year-to-date, lease-ups remain everyone. product, a heavily slightly I'm X% NOI to pro growth third, of and and and

to execution speak results quarterly Our of our these strategies. successful

First, year-over-year. new turnover annualized basis strong just at renewal third with XXX quarter X%, growth rate X%, growth points by while near remained declined rate above

reputation all in results. credit teams well corporate the generating as management the Our and deserve for our these level field high-level as renewal teams

saw income, XXXX easier initiatives of occupancy results. half the fantastic the in such our of as other parking, And same-store initiatives makes more income the basket outsized I'll the quarter, and in of comps of of first up continue to by foreseeable our in growth in we in half revenue-generating which We Other variety operating XX.X% second year. rentals total revenue, difficult was nearly third, occupancy continuation of remain future quarter package for remind and future. cost-constraining anticipate the grew a XX% produce everybody, Second, lockers. our the flat a by fueled year-over-year. the long-lived, sustainable XX.X% furnished short-term

points. side, On Similar has of not growth as been to kind past personnel tax remain quarters, two primary estate late. our expense the costs and pressure real flip

high taxes For by we estate full still XXXX, year digits will grow single XXXX. expect versus real

our our additional are wage continue growth. do we productivity silver front, have quarters, at sites. demand potential future does to pressures corporate these better a yield to greater combating and as that though, technological solutions which for lining actively is Similar rate level past forces pressures personnel Wage people. the intensify On through for

consistent home pressure minimal third XX% quarter. Moving X% remains the totaled increase, levels during to quarters. responses Likewise, previous debt move-outs brief update. rent bad all with low, net a our on. see of and We purchase which Onto for or market

to growth year Francisco remains Demand wage over ramped have versus First, Peninsula as concessions Seattle, rationalized somewhat XXXX. versus San the and up XXXX outperform the initial and continue resilient Monterey has expectations. past lease-up

underperform to ahead. the a continue results slightly continues D.C. but should in produce that Washington, years market solid is Second, to

XXXX, start lackluster feeling is to better. a Orange County slightly after Third,

We the continue of located our feel the is long-term good west primarily XXX portfolio, to freeway. about prospects which of

in generally with expectations. line are markets remaining Our

in aggregate, and our uncertainties on City schedule. velocities months, leasing of as Harrison plan. XXX-home resident. our expectations. as and Next, also have largely construction delivery above on remain impacted as ability are budget available averaging our With remain rates increased amenities apartment have in as are as At City, supplement. our X%. X of lease we our well development lease regard delays rates statistics original Huntington generating cost effectively experiencing achieved and at targeted delays would development developments, These our XXX we Beach, to quarter-end nature or Attachment the lease-up timing Pacific on which Pacific around pipeline, we the construction by rental Community-specific given homes negatively high-end firm like of JV on well are as Positively, X to

the West incurred impacted Tampa, Moving from third hurricanes damage Beach. Palm to and thanks on. teams quarter special in Texas Orlando minimal Florida. Austin, A We out and that our goes

work You it leading and of. and your get residents back We our following and beyond sacrifice to, up. to all care order went above Last, those hard during appreciate properties ensure summing taken our in storms. and were up that working

execute to and The third I'll We With confident our through platform remainder operating turn highly Joe. continued it quarter portfolio quarter that, ability XXXX. was good the diversified in remain to drive over results. solid to of as another our

Joseph Fisher

I The include transactions will and Jerry. results update, markets Thanks, our today forward a and sheet topics update. guidance, quarter cover third balance a capital

$X.XX per up On ranges. of was of Our raises details XXXX $X.XX FFO share a the basis, share previously our high $X.XX drivers as reduced $X.XX. increased results to low to I incurred solid Full latest asset now share was was during our was in supplement, and adjusted were to $X.XX which year-over-year end Developer AFFO and while were as by FFO a The quarter, guidance per primary stable AFFO planned Program, NOI results. FFO to and or adjusted end our in AFFO hurricane came damages guidance deployment investment Capital third like provided our per capital was $X.XX the of expectations. respectively. XX increased X%, as dispositions quarter at third guidance would at direct and result to mid- operating driven Attachment $X.XX, $X.XX to FFO you to consistent fewer the to of $X.XX year $X.XX and by the growth $X.XX opportunities.

X.X% year to forecasted full X.X%, X.X%. revenue XX.X%. same-store raised to XXXX expense X.X% growth X.X% to to X.X%, Our growth to increased Average guidance reaffirmed growth increased was and at was occupancy NOI was to was

FFO AFFO $X.XX guidance $X.XX $X.XX $X.XX are the to share. ranges adjusted to share, quarter, For for per as for $X.XX FFO fourth per for share and per our $X.XX to

transactions. Next,

quarter-end. with DCP approximately activity, invested completed one This Developer was quarter Capital the After going opportunities. subsequent million harvest the we new program numerous quarter million subsequent activity and X.X%, and acquisition our to be investments in of has Program, busy during $XXX a and at look approximately funded. under shareholders accounting our with program disposition as yield and to value a remaining for third to capital create $XX for is continued for stabilized the deployment or Regarding contract balance transactions

& During the for venture quarter, located development the Republican, in Coast XXX-home a sold Xth million. approximately West joint $XXX community Seattle

capital other a product well-priced recent investments. sense the fund the and as location, the DCP made liked we property While more of economic source to

large a asset that when square Second, have a space we anchored feet Foods in Whole XXXX Nashville, apartment by will XX,XXX mixed-use office homes, be and added Broadway XXX of complete.

capital $XX commitment outlay Our was a total million, approximately of with approximately $XX funding million. initial

a We community. will with upon share sale our outstanding upside the earn investment, of X% on of

highly Creek Denver construction rate. and versus Third, of Creek, financing the purchased to entitled nominal at subsequent in million the of community. Cherry originally X.X% submarket $XX.X Steele provided XX% located upside cap of sale a XXX-home all-in the million to developer the $XXX.X to for of were quarter-end, upon cost We community a we desirable

to $XXX.X participation floor well-located close subject amenity expansive the and including And Coast is ground West and last, Triangle development venture million, community basis in approximately pool of upside contract is Katella resulting an totaled walkability, $XXX Platinum price to effective high yield the to submarket joint sales of million with subsequent million quarter, asset a under $XX.X County, conditions. an in closing and X%. placed sale and retail. feet fourth a square Steele rooftop The high-end expected A+ quarter-end. the located in areas, for later XX,XXX customary is Creek Orange XXX-home Our of Grand, extremely

our high further activity. capital details you supplement that development on and XX forward, and parcels our support investments our sourcing for of XXB pipeline. land will to expect attachments remain transaction on Please quarter's Moving see deployment can focus DCP this new risk-adjusted-return

balance paper markets and At commercial capital and credit quarter-end, was capacity liquidity million. cash our sheet by $XXX of balance net measured Next, activity. as facility the

was Our XX.X% value, inclusive un-depreciated leverage financial enterprise joint on book value and XX.X%, an of XX.X% on an ventures.

paper net our was some joint and drive in line Timing metrics of commercial in but in strategic was X.Xx quarterly plan. total, credit are inclusive ventures, they our with and Our balance, tracking debt-to-EBITDA X.Xx. will variability

quarter common third a up as it Finally, for With annualized, of the Q&A. of we will quarter-end. or I in declared quarterly $X.XX of when open dividend X.X% a $X.XX approximately representing that, yield Operator?

Operator

the with question of [Operator from Citi. Instructions] comes first Joseph Our Nick line

Nick Joseph

just can 'XX this your meaningful if expect any relative a talk decrease for Maybe with And starting 'XX. you supply, to versus you increase to or markets year? see expectations that about

Jerry Davis

this that mention to want a one. of things. is couple Nick, I'll Jerry. I take just Hey,

Angeles, That could down happen we the outside throughout rely we've XXXX, seen then sources, being to XX,XXX about as fourth 'XX there look of Axio's been goes out year forward to permit this a First, current submarkets been you as have predominantly well when still regressions run for Axiometrics, said, in for our XX% at look -- in 'XX, on forecast units, units. slippage and we Seattle. next decline. that declines When stand has New then in about is Jose first forecast. And that And and a at be XX,XXX as it so the would a we quarter than Orlando. about Nashville see to supply some decline, we there markets as supply, Los third also out, where got San second Dallas modestly, City, homes, where we've Francisco-San X of couple in one's is markets points of year. you is X going looking deliveries the XXXX, as increases more and the is really, specific York look to we thousand see at largest lastly, area, and the Austin decline decline, then is

All are rest of them pretty flat. the of much

Nick Joseph

push down, move you've appreciate kind then I where opportunity -- move to going essentially out because terms that. that they're close there it are to of trend people to frictional level continue an in a going of to further to the down? And but we just turnover, out? is seen Are

Jerry Davis

that. We continue on work to

an hard that As I renewal to as had got try we've this request. many my renewals save We've with team vacate to traction to in to good our year responders had prepared notices inside remarks, really has or worked that. slow

even think we of seeing continue that down you our to to these something in is reviews it's can historically continue don't couple home are about happy that residents at our initiatives turned that what not if XX%, results. the team telling least still some further to Yelp drive people, But levels, hopeful as I can to so and you. that respond fewer that. purchase. we've drive have there's continue listen fewer That's at we years against we us drive properties, we think It's What you're next so can and at to about they're low out moving on. it competing at the fairly I'm of now,

Operator

question next Bank with America of the comes Our from Merrill of Juan Sanabria Lynch. line

Juan Sanabria

an how see sense are was coast on of you a if gap guys update 'XX. into markets give Does could just performing us over and playing out today? that hoping suburban Belt urban, Sun shrink, could those how I you just you give the

Jerry Davis

basis underperforming XX revenue. Yes, that at A lease points versus probably when outperform. I'll initially, the urban rate Jerry. the growth is an similarly. I on an is to at ratio at quarter B suburban, so on fairly I differentiation. and and more is past suburban B of would on track Right now, least most don't XXX new look This renewals, suburban, think A we take look at our When to -- is and A comparison, recently, Juan. B is But there's the it I a Right continuing product think significant urban now,

is I going I would some so think going the in a up in is going think bit know, it future, when be in markets you bit. don't supply you less future, urban our look at add little where anything? a it's to Harry, of tighten to I the

Harry Alcock

No.

Juan Sanabria

lease how are maybe all? this thinking you're you does of noted timings it at think then earlier trying on to just question a do a seasonality, typical. that? than that? And that And you drove guys how came year little about What kind bit guys target expiration change Or you

Jerry Davis

No. just It was month. a

I in last stated I quarter and it think in in -- rate saw August, growth the started deceleration we lease that we new that think, July. usually and starts,

revenue on we us. month, it So got only We about right growth. take, you're then That right XX expirations. market-by-market, leases we've in optimize ago. defer fourth think basis, not give it's quarter, pretty can third. Today, in the to LEM make or set that's was going but right and feels expiring schedule to around second, the for think first spread a it And to I really national the lease X our have and XX% years rethink but us

Operator

of question line Austin Markets. next Capital with from comes KeyBanc Our Wurschmidt the

Austin Wurschmidt

in past curious, opportunities net your wider you've Belt Just and those the about markets? in talked markets Or development casting I development would we've opportunity ground-up just across in that of guess, in Belt the of of that's more Program. investment set most seen, markets, Developer the you terms more investment the the Sun has consider through a a Capital of Is available Sun today? been function

Harry Alcock

where, you We coastal you've recently. any DCP recently, markets as investing and also markets, development in Portland Austin, through invested that we've seen then in just includes this the or of the DCP in is whether mentioned, Denver, Nashville, large in investing, Harry. consider which acquisitions it's through us

Austin Wurschmidt

is are you're lease just the seeing a guess, and performance blended And the you overview then a -- rates what an In I bit into moderated maybe seeing, across you quarter? this what and Jerry. give quarter Could bit of submarket little fourth for D.C., of this us there.

Jerry Davis

saw look really ago, at flop did were D.C. sometimes which inside product and Bs As get quarter. better, As A you flip think the quarters submarkets, couple as we as the When B Bs Yes. this strong I will of the Beltway, in

there. in Bs were coming XXX area a Southwest strongest Street submarkets area Waterfront on quite anywhere We're then It far seeing growth over lot points We're within was higher And growth bit where area, the of our the U had we D.C. concession is of really that. negative in the as our worst X Pike D.C. basis X.X%. the was over levels our submarket about And effects submarket supply of revenue from Our even as it's It new revenue at ballpark to district, Columbia weeks. in X driving in at feeling [X%]. XXth, at the a

definitely So both felt Beltway, over that higher-end were that more of on inside XXth the ballpark. supply of but A product the effect has the new by

Operator

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

Nick Yulico

of couple questions development. A on

First, think in to perhaps we on you then development you looking about sheet should towards how And year, some JVs the the would markets -- competitive doing? are versus that development as amount weighted your balance get Capital easing Developer Program? supply, dollars increase think be about next you you new supply, opportunities how versus of get would

Harry Alcock

I'll over it to then is hand start Joe. this Nick, Harry.

the as So we've past $X.X strategically, mentioned, the our between and maintain goal development $XXX several million over is years pipeline to billion.

to through strategically, It's tactically, while maintaining backfill, same and set. that's while to just while underwriting. $XXX so XXXX, the that to disciplined our We recently. that suburban, pipeline driven be likely disciplined maintaining at opportunity of urban, underwriting markets to the $XXX of and our in by Again, end to do looking by below opportunity we've $XXX stays target that to bottom the not we're again, backfill, at will the a if been set. down million. continue look going pipeline really we'll intend we million $X.X looking or function to the be but surprised And by set to approach. would year-end, we're Again, it's we a we opportunity it's However, billion invest develop be driven see that we investing where look million

Joseph Fisher

of suburban The as for million Nick, $XX about and your DCP, within back exposure only funding there, just to down add to it's ramp after commitments have. million relates around as the Joe. the right DCP Hey, we additional to I'd joint going question, $XXX venture to we're it up mentioned, activity. for It's thing

million, really we're $XXX amount million. us to up decent with limit of sitting around So capacity, which of gives $XXX a our still self-imposed

buying and a still, there cleaned why then on recycling come as And side, terms the wave MetLife disciplined that we're comes in to evaluating So it and that's been that recent really of out there lot really activity that's consider each or we've the through asset. for up do a has deal doing what pipeline. land in expecting looking of development of manner most

just really Vitruvian Dallas. the land to in You're down

future Vitruvian is that MetLife from balance be deal. not outside So of to sheet probably necessarily development really and going on any

Nick Yulico

impacted think to then it's you entire And Francisco talked supply market the that pockets you coming that for is coming if it by -- or specific come for Or and San impact Is Jose, submarkets supply feel all be, less where down think that about down a the I of only specific -- guess, down. San San supply. I'm across seeing you only would trying year. The is get is Francisco, San Jose, there? next is

Joseph Fisher

a the in [indiscernible] we San when San pretty break don't overall, level, units, bit was exposures, we And just Francisco It San on it to submarket we Joe Jose then to similar, same down] down and up so look And within Hey, down Jose. a for just down related When really that submarket in Francisco, [indiscernible] at more San at in Nick. into it's Jose. exposure in that comments San again X,XXX least San exposure us Jerry's our Francisco quite and Fran that's about Thanks, bit. [going break through submarket is on -- following over have much San little combined.

Operator

comes W. with of next from Our question Babin Drew the line Robert Baird.

Drew Babin

see kind having wanted probably competitive of A locations the into I urban down with trade the ask supply and assume, to there pickup still maybe about swap take product, some are cycle? bit locations in B to maybe swaps. cap to markets for asset asset would in maybe of types some any trending waning those CBD might where you of the and submarkets more advantage down trended urban a position next opportunities rates I into

Harry Alcock

you'll little in an a at I Harry. that where see DCP in in we assets did year, of it's in think Anaheim. state, mean, sold sort the this bit really asset top Denver, we bought Drew, that I irreplaceable through Platinum of Triangle this location the perhaps

continue we at of think I look types those opportunities. to

in have You look right relative compressed to locations and assets are call they the suburban locations, it, between, in spreads we'll assets continue at the that those B arise. as urban the opportunities the A to

Drew Babin

expect something expense outlook like in putting growth then outlook, that be in strategic line or can negative the not pressure. improved be for Are maybe expense negative to now, are that's calling management or update would we the there X% can year, that X% helpful. the you're right year? to the -- benign estate have to at items maybe there's or X% expense that real next that sense obviously, more any That's an things it much to and the continued next asset taxes on growth providing looking that about that was pressure that talk going you expense sound X% And to in programs

Jerry Davis

controllable expenses up a X.X%. at in to year, total quarter, is I'll Jerry. you with guess would in Drew, only 'XX second, for I and start when the this get I this look they're

the else total up the real had estate basis, of X.X%. most taxes X.X% estate of a probably On year-to-date taxes. XX% So real in, everything and other categories you up are

there. as think well and drive growth in cost maintenance rates we down as to whether continue work to I personnel it's in repairs on, So

our in utility on marketing properties, The thing dollars I as at like to things mean, of job look the furnishings, renting looking keep cost. expense-reducing there up well furnished that's in that can driving like rental or consistently the a short-term done that because I predominantly that the because driven LED as ROI working program, lights side, about. consistently is after-marketing doesn't freeze. controllable estate to invest good think, you've we check are marketing this xeriscaping such the very year we're expenses non-controllable are real mixture It some capital initiatives, we're But aware as ways offsets always to I down rental say it we've tax other that. will provide talked

Operator

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

John Kim

short-term the the on parking follow-up Jerry, other but income is segment, rental you program, different buckets between program and rental the a in I the you lockers? can fast-growing XX% mentioned revenue package of out think, break Just furnished versus

Jerry Davis

total but you're a probably on the components, Yes. better tell up little offline it it quarter, so parking of percent. significant I right, a the is year-over-year, $XXX,XXX that was can bit I a was NAV you, increase. for it do will

over about I million about $X the the year-over-year, -- XX was have in the XX% component was was last which revenue rentals, $XXX,XXX. think didn't for we -- quarter, up up. revenue year, even place it Short-term NOI and up

there earlier, to expenses are stated As I furniture rental. this, that predominantly are related some

making were a the $X.X of on those about basis combined quarter, increase. side on for million So revenue X the the

John Kim

or sprinkled it it how be your and portfolio an And Is big want throughout that be? certain to Airbnb-driven -- can do how just or is assets? you it big business,

Jerry Davis

in concentrations rentals, and our spread First, programs It's of even short-term. San portfolio, tell just I'll so days. it's markets. in XX average it's is Orange the in is not It About urban although over some County. Airbnb. you major throughout of the XX that not not then term days. XX% XX% in It's XX-day actually are XX% is The Francisco, Boston, is the

the to ahead, So those units was for product X than almost availability do but we property them those strong XX-month keep we'll any up we do go individual no in more turn, rentals. back a I was say we to we'll program. put this, X% of X/X about when try the exposure won't property lease-up, where have in the markets X% of or there. hold it If plenty that of that into knowing can make

John Kim

like didn't And a it of on Republican, venture a seems union really -- sounds location. like for the the then profit. sell of joint it Okay. sale It the great much & Xth

So why asset? rather exercise the not purchase option the than sell

Joseph Fisher

Yes, John, opening it's what source I'd well-priced we're back imply in hey, is I Joe. go capital. it's just of guess which to trying a remarks, my to

the XR Katella, wave as investments, means you know, it and overall So year, X we as back, to going look we're first come at X, of these CityLine, Creek, end of up stepping this up had we've those Steele and X selling X. buying

a a right Steele couple expected couple CityLine get or the we So Overall, you in Creek to blending runs of and from IRR in plus going the singles with other up of into home doing what end you're But that, respect. about the program's XX%. that minus of X. and

the look like submarket, you're Creek better. but asset, like like why So when sell Steele you happen to XR, the correct, we we at

at better a of So up out end Katella the price, source a we and way each time. the the And better XR we over that's capital when the or purchase. out and against played if ability been played more to could have into against opportunities look and assets, a the mid-Xs capital to we when million on sell each coming on in IRR with But of a you $XXX.X the IRRs XR other and a it capital Steele blended going X.X% X% Creek cost had other.

John Kim

the on the on X.X% the of mechanics just during construction and you you then us profits share can remind that? And So get the return XX% of you the phase, of sale? preferred

Joseph Fisher

Correct.

until option press At then percentage And our months. point that a at we we'll up price, exercise receive to the sell we you're XX% it. ownership it going time, in you price. reach interest. correct, our a split consecutive you're if we're based X going if for sale, to So to option X.X% have flow ownership stabilized pricing that off upon go And be cash we

Operator

Our Hill the Rich next Morgan Stanley. question line comes from with of

Rich Hill

effectively Developer just Continuing about Is of to on line do these guys, your on all think But it about the the which Or results. for thinking questioning the meaningful think location on how obviously detail construction how you, little I'm back curious, underwriting thinking opportunity the you of pretty bit construction I we Capital I'd a lending, more the them. which about get -- a Program, underwriting some love is property your resonating about provides on in the, you property? banks heard just are loans? you're really well? borrower about and as pulling

Joseph Fisher

said has an own. own a we to be all that the a and want we ultimately as to asset we in Look, market want that submarket asset to along,

comes we because So it backside participation of down a do underwriting position to in real deals. have a these estate number

on of do the estate necessarily the price south. West think lender's have same underwrite option from a development want an perspective. not At from your the Coast deal lender's deal, goes a it have what a to if venture time, real it to rights terms eye are perspective, in We you joint equity so you about

of kind at you're as that it well. perspective from So looking

from about therefore, real So both you're we underwriting. ultimately, deal want to you estate of as at it think that looking a to own but and kind ways, a got it

Harry Alcock

cost development if with lease the through in And think acquisition and fixed-price holds you -- terms future. in I'd case about the the periods, we you the investment X.X% get continuum, exposure an think paid the the risk-return on option a add development development a And we Wolff, no or just results, the some have in where REIT have I of of between I but risk. that schedule just lease-up

kind hybrid. is really it So of a

Rich Hill

And that a guidance at opportunity a it should think this of -- to activity be question, back risk more other more? you'll as the of pull that's do asking in, in little program forward? start XXXX XXXX in future bit lenders how of is we thinking you a about reflective sort Or is your the going see

Joseph Fisher

like would the year be saw day, to opportunity-specific. the to accomplish do it's and very activity this think Yes, program. of we Rich, the with what I the you But end is going at

we that's degree. asset as As to limit that to of we the of long ourselves making constraints on an to own, investors terms want in it's going keep some sure pool

are starts you've start off the as 'XX pool 'XX, supply coming new new as opportunities going addition, and so expected and well. In in that's to seen, to limit of

So but we're we're and of deals develop that to find to source activity. guarantee underwriting volume going active remain that trying not through in meet going the standards, a this deals to

Operator

of question the next with John Our comes Stifel. from Guinee line

John Guinee

your at the noticed, spigot aggressively development you development really turned I looking years Dallas, and I off of pretty with couple summary exception was ago. the of a

your position, my when is at units, Boston have to looks entitled it question really like, ready and then Dublin, first XXX or XXX I only California, look land why. land Dallas, So go. And excluding you of

is rates, And soon? coming so yet know land land that understand but haven't up also anytime refill I'm your than wondering, the down, development sort yield development up hard I start and are down. going bucket on I you rental the optimistic can Are prices focus, land adjusted of you greater that costs

Harry Alcock

is Harry. this John,

I think $XXX billion. goal $X.X our mentioned million as development between I is earlier, and strategically maintaining our pipeline

underwriting a do XXX so points cap our approach. we'll maintain spread maintaining We're to target disciplined rates. to while to XXX basis market going However,

pipeline down And our that development come a so what bit. is has you see

our starts, fall the that year pipeline end is several for the will we'll billion of next the that million. over to $XXX for at little think million expectation backfill quarters. actively below $XXX I my that to $X.X We're low but least opportunities, given XXXX and end looking a XXXX the

John Guinee

think you is points aggressive? to spread basis XXX Do XXX too maybe

Joseph Fisher

our I wanting necessarily you which pipeline to we maintain be need cost being think we'd that output standards going view accept our strategic pipeline. conservative, terms capital. think of to You don't agree an to too we're adjust The in underwriting development to of mean, of a is of just

and not not So do. development and we the at absolutely is bottom if something that to move we do, it's we We impress dispositions on back only returns walk can pull and forward always can have line. to away have what

So the pipeline. think is appropriate forward, this necessarily probably the I on main driving not maintaining underwriting on development path

Operator

comes Pete with line Associates. Peikidis next question & of Zelman the Our from

Pete Peikidis

new on heading leasing you're trends to York in growth the trends seeing just share lease and market-level I speak Jerry, or appreciate and in into Could the what November? New supplement. October renewal detail you for

Jerry Davis

lease around Yes. right are In rates October, currently New York, new for X%. are, negative

so just seasonal from So typical the over threat a quarter not off seen dropped following the past quarter, it's see surprising. overly into you third trending that from we've it's fourth years couple of quarter, where downward

Pete Peikidis

assets are Orlando risks through year, product? of expect there? end Orlando and your Or the the to moderate that start to with given next still to pricing strength overall relative you And there year? that the sufficient in there market in is Tampa? rents in you more pace just keep supply the expecting newer the understanding are becoming a buffer competitive rising any And And

Joseph Fisher

just first of question you you could and of at missed Could broke beginning half? step repeat Pete, the second? Hey, we back that. up your You the there kind a just

Pete Peikidis

relative some guess the was sufficient in pricing on is overall more of competitive market. just the further a that there's sort the of Just your if risk with expectations and end in looking Or here there pricing I for become and start still strength buffer color given I year there Orlando? Tampa asset Orlando through and of Tampa, the

Jerry Davis

as look lease at in seen is this, X%. Orlando, actually say would I north we've go October of you new where rates

So Orlando improved. has

by hurricanes. due to trends. of seen of normal people more think seasonal that it's affected influx the some I the however, potentially Tampa, is

a in little is growth far rate lease under Tampa, bit X%. so New quarter, this

which said has less still supply, So in continue as A will about B as markets we do slowed than some growth in we typical, next think part, assets, deliveries in with showing wage rates, competing is has our especially to factor I the growth Florida or they are year bit strong. have properties far between spread adequate a those an new our But assets you question most when Florida well, I earlier the to Orlando, is think is what there. growth job they're those of I if for still Job properties, have are your what this year.

Operator

the O'Neill. Our next question comes line Sandler with of Goldfarb Alexander from

Alexander Goldfarb

hope is do impact to or in so delays Capital construction mitigate growing the on you guys Developer returns incorporate how as to Program, the question the achieve? First not that guys you

Harry Alcock

Alex, its Harry.

it cost longer. our still. impact that Any have solely really net That are schedule coupon, to overruns collect extent developer. to our we or that there We includes no the X.X% delays, schedule And borne by for for continue are is or a cost. the

Alexander Goldfarb

Okay.

then I I helpful. question it favorite apartment new second heard that's the REITs. And Denver, you Then clearly, think but Okay. for guys talk don't about is, a the it's before, market

your across opportunity you You guys obviously or little better talk bit took same you see investment? and Can see a just about of your Do home Do expectation market? your for down there Creek. opportunity market Steele you others elsewhere? the

Harry Alcock

I'll of Harry. Jerry about Maybe investment. start sort to it's Alex, the can talk talk operating environment. about

Denver, the I DCP Dallas to goal our in before, focus with investment markets, As investing Portland, and we've but where large its been mentioned the coastal also is activity, in or whether Vitruvian recent markets -- to past, with continue our then development, Park. acquisitions the Nashville

XXXX, in the Creek now Denver view we back XXXX and have Steele investment market. Again, So as invested completed in attractive we late acquisition. an in

other that the continues to with it we I market be markets like, that along So mentioned. a

Jerry Davis

now I familiar, whole directly Alex, neighborhood the Denver, the the Mall. right in across top Cherry for people Cherry which location Yes, Creek is Steele probably the city, are just who would not irreplaceable is of Creek Creek, really the add, neighborhood in

prepared it's out exceptional is I'd place As a floor score walk Joe in remarks, XX, first got of the definitely retail live. point stated so to there. his it

at square floor supply. downtown Average Creek, pretty average now, you're in so rents are that $X,XXX. north foot whether for are going about a pretty rents the at about is XXX Denver right Denver a against square foot. feet, $XXX or over They're looking of high new significant But market, it's You're large plans. XXX Cherry to

I in through the of long-term would going this I be where areas to most to And we when think deal live. product that that's there's to little because probably even they're than is a it's prefer This people building But think supply. is better Denver get and the exceptional about. last been surprises it location, running so that we're today. years, out in X going product quality we've for find again,

Alexander Goldfarb

does supply looking that in up? Jerry, Or ramp the to there guys supply new Denver, you is on? down are investment So while once may going mean even comes you increase the wave

Harry Alcock

by our investment within is -- heavily Again, set. activity target our the markets influenced the opportunity

development to in themselves. extent acquisitions, either Denver, or opportunities in invest DCP would clearly the the presented we So

the the in to function irreplaceable cap high-end that's Denver, seeing product suburban a in Jerry Steele mentioned, on Creek from we sort trading favorably the just a about talked As capital Steele you're I location, compared assets through Creek, went core rates earlier, the that's standpoint, And the some chasing again, out-of-favor products partially as product. we detail. of compares to being these flat think pricing just fee of an relatively with that

Operator

our Difficulty] gentlemen, by. stand Please Ladies resume momentarily. session will question-and-answer [Technical and

Operator

question Advisors. next with from comes line of Green Street Our Pawlowski John the

John Pawlowski

in you to widened. of renewals deceleration specifically? gap and leases renewal up the growth Do of so quite between the been Jerry, deceleration has for expect modest, renewals in in pick the years pace pace the past few has new 'XX

Jerry Davis

when any ago, you would year point, Like this said, I that what in was growth rate October, evidence happen. I renewal X.X%. at At was it don't a see look

So right now, we're high Xs.

point, again, So growth continued REITs. it for to really this hasn't And I up rent has modestly think dropped at dramatically. go the

compared at steady. of stay that levels the you're seeing Axiometrics' shows our look locations on X% national up quality you and going But to rent income If it probably X% studies, because to about a assets. about basis we're of

about XX%. us, For it's

happens to see don't stable, as But we it over this it the of see last but I going progresses. to remained the what mentioned, point, really has compressing So as have years. year we're at couple

John Pawlowski

move to or on the out power due out most homes? specific rent affordability to move Okay. markets pricing increase seeing strain are either you What reasons, to buy

Jerry Davis

that Portland. it jump at places we increase on have lot But get outside some to it's the leaving: about The move rest you that move-outs when coastal home X purchase, you're we're markets, a of feel pressure. page year give Francisco rent the there's really, there's as right Really, mostly It's those rent home into rents the increase, Richmond When at you'll the like typically get not there, locations. for really, XX%, been But of acute only now that markets. the XX%. Belt you where up under is over to reason ago a move-outs that of purchase haven't was on that not off to or Boston, gone as over into X as of that the the level. as and Sun to markets moving out San

Operator

the Our with of Evercore line Hightower next ISI. from comes Rich question

Rich Hightower

really earlier, just couple guys, give data? don't about talked I it you've So a know of sense. markets, a to-date you, but of can maybe if a little that in October deeper I missed rundown quick with this I know but bit

Jerry Davis

on X.X% that detailed instead in we you the the think -- October slightly you lease that for a individually. and when the give third I far so rate we giving of tell quarter, you rundown I went But overall that's October. from after can of call it's will growth, market, positive by though, new

they you from in third they're that. now, yet. the then just at went the X.X% haven't right And our below closed in when hair quarter. renewals look books a out total, And We fully

Rich Hightower

a of talked you've York weak but on the XXXX? there? mean, we're concessionary better that I And there might and year York, mean, relatively have months market we mean, then speaking, that's I there's expecting is some ago. a of New driving is to thoughts maybe about through I to last that stability of be quarters expected couple X X of I ago. little what -- still just weak are all that? sort versus the a to bit environment at with just your it's looking Or New what a high-level specifically I anything portfolio, still mean, know versus

Jerry Davis

say, right to next struggle to continue XXX,XXX it's, York is Yes. York this jobs. about I don't look to, would New still going the it When producing New at you think information now, we year. like employment year, going looks is

the Midtown we've off revenue XX,XXX to feeling from bit. prevalent property, doing look in about as growth West national same-store coming bit City as X effects, the is at it's Island too well down far Brooklyn we our look average. going which Long where Next X.X%, most and Upper the at quarter to Wage that's got We're not When York, a pool. borne jobs, assets a year, JV most in a X%. the it's New down definitely X%, supply go so our city, is into Side negative during we're how MetLife growth West. When was in you

between you plus go or As through our our either our property, or they're positive X.X% all Chelsea minus Hill and properties property, downtown X.X%. Murray

other So the, in up in again, fairly tight range City York deal have have for that B A+ New than asset we that Columbus Square. we

Operator

the from comes of question with next Our line Anderson Rich Securities. Mizuho

Rich Anderson

it to maybe it? and then a Joe, little development and continues Is some becomes it to greater bit you way such self-imposed kind that think future in in if temporary mentioned successful? DCP $XXX if to million from percentage a out fair you going a your program and up limit of learn in I'm be limit. that of overall the play that's point curious go million at a about self-imposed a of $XXX itself that's program kind of the see then investment others current

Joseph Fisher

that a long-duration much have that of X development limit. our above be this at that in have $XXX how risk-adjusted as is the way year. we'd make you the keep we then it the out got And the accretive to acquisition on look earnings-wise, increasing opportunity opportunity cognizant be coming investments we fact any But go that available. and want some to that cliff over cognizant set fund where also Yes, from disconnected so I we that's a kept to years became given of returns of to capital perhaps say X next source to to these is open-ended returns, that's depending at to dissipates we and kind burn bit Rich, more and of one if point, think fair you set If earnings, sure little it so off, don't not wouldn't there, million.

to try X% to so X% do a we under to or negative that street, doesn't continue but earnings so And of we'll become net thesis evaluate. the keep it

keep then coming of our limit for not So a time. as that opportunities way, period above we go say to won't

Rich Anderson

whole maybe and call in slippage beyond? for decline too though then with contribute supply just Sure. point? broader phenomenon in that's to as question, the that, the elevated and that to at protracted difficulty everyone you of and in it resonating as is Perfect. 'XX And to community soon feel make will supply general, you that this financing happening maybe as do second kind a growth is well this finding Or developer development

Tom Toomey

to the I cost, rate, the Rising disciplined, where right a remaining potential think they're still in trends, pointing, program to got expand ahead. interest years all NOI up rising the you've shape pieces. banks

And the this that juncture we're fuel make out, take company sure so in to that. one burn has and is play and a we'll But cognizant right overall the now 'XX we the our and hence, critical economy on of that all we're opportunity on to this and don't overlaid at it. of risk team it want piece I at of think the discipline going the time profile

Operator

with next of Our Capital Neil the RBC Malkin from line comes question Markets.

Neil Malkin

on time go that the offensive. is be particular mean, good maybe your pretty from to actually acquire, going I stock levels, and price we've is your peers 'XX at good heard commentary in a to

operational going are You among with especially among -- time, maybe market maybe levels leverage a thought and focused you order get highest you're the need bringing and in buy equity your product at tandem good below savvy about a have the and a particularly have in? to market lot or Have peers. recycle of leverages you have markets to given in to because who opportunity builders in in raising multifamily some their merchant purchase and you keep big to the

Harry Alcock

I to And step well. start. want as This going to is in Harry. know is I'll Joe

of cost buying, sources, the of consider of you I think specifically which Joe capital, and DCP about the sort say, we'll like any that that talk other capital lease-up. second. will a context amount investment, are merchant-build as in in of consider and we'll in deals other uses And

possible we of the it's there's some opportunity position. to as approach who developers here their monetize set, going construction be think terms opportunity want In to loans for maturity

However, these deals the will tell equity. I very I in Many you are which believe institutional little limit that distress funded opportunities. market, will with there's of this

to much So is deals so institutional while as the position seeing the few patient, can the their more may equity declines never developer the motivated where and of sell a time, the the we're equity hits the out over quite be actually market. be value deal buying developer

Joseph Fisher

leverage. and price regarding of of say this acting capital. times decent out you cost been traded standpoint, but that your year and would starting any activity cost I Just NAV we've we've at comments haven't share premium of has an consensus guess okay, to the price, From multiple a had I share with equity capital that seen us.

if equity the to to overall. and And plan to around was adds when access NAV sure for uses, accretive we that needing market. do, So it's it made around built the and built a we in sources use we be going to be that's nature not going

So we've act thus not to this while we've been year. chosen at premiums, far

guess we the this and in our BBB+ XXX grade I In other peers. credit would terms at issuing deleveraging, I the investment line with that rating solid BBB+ of fact year, look earlier over, were

and level leverage items opposed terms X-year focusing of duration, that the in our leverage, our leverage. think unencumbered static with and increasing metrics the increasing I So where We've more floating on meaning et that on debt-to-EBITDA, at. cetera, some rate to as debt-to-enterprise, charge, focusing out really relatively the we fixed to reducing the plan on pretty happy the trying overall stuck around we're composition to of of absolute and of kind pool, the keep laid investors in debt are

or external needs So the point idea given fund at this of as that a contemplated have. deleveraging the has we equity been to investment,

Neil Malkin

kind I that's levels new I'm year. And leases expected making then San last I'm as to of a saw see or for wondering up that lot knee-jerk actually irrational if is Francisco color. if and of started appreciate one wondering those concessions. to into stronger than think last will that the you back year, you renewals in me continue next if reaction market burn-off. you you

Jerry Davis

this Neil, Jerry. Yes, is

it's when most at specifically, down basis see year, year. it's that down irrational You're this year-to-date. did about it last also pricing Francisco for the bit, XXX as at a right, we both We're turnover, you quite you in, quarter, look then And San seeing look really points. recent

look in It really I'm the to rate X%. we So getting stay a under or more was the that quarter. the you any difficulty month at little had when just people seeing renewal third in not

So giving away not having year. difficulty are I'm I even higher of some say we any would to more concessions than normal though that do last those

San don't So seeing not irrational and it think pricing come the Francisco. I back to has

You'll nothing properties into offering ago. are that concessions, still was like year X-plus-weeks have it but some it's a area some

Operator

There questions. for Mr. CEO, hand Toomey, the closing further President over back call I'd to to remarks. any are no and like

Tom Toomey

again, your just say in closing, today. Well, I'd thank you And for time this.

in very forward capital we a remains it all seeing thought the boxes. of a quarter the couple weeks we at guidance. that, quarter you NAREIT with for I strong increased This operations, to discipline was And solid, look checked allocations, and

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