UDR (UDR) 31 Jul 182018 Q2 Earnings call transcript

Company Profile

Participants

Chris Van Ens	Vice President
Thomas Toomey	Chairman, CEO and President
Jerry Davis	Chief Operating Officer
Joseph Fisher	Chief Financial Officer
Warren Troupe	SEVP, Corporate Compliance Officer & Secretary
Harry Alcock	CIO and SVP
Juan Sanabria	Bank of America Merrill Lynch
Nick Joseph	Citi
Austin Wurschmidt	KeyBanc Capital Markets
Richard Hill	Morgan Stanley
Rob Stevenson	Janney Montgomery Scott
John Kim	BMO Capital Markets
Drew Babin	Robert W. Baird & Co
Rich Hightower	Evercore ISI
Rich Anderson	Mizuho Securities
Alexander Goldfarb	Sandler O'Neill
John Pawlowski	Green Street Advisors

Call transcript

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Operator

Greetings, and welcome to the UDR Second Quarter 2018 Earnings Call.

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

begin. may You

Chris Van Ens

Quarterly UDR’s Conference Call. Welcome Financial to Results

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

answer reflected expectations reasonable are the of forward-looking a undertake believe SEC. any to for now get ups. give ask forward-looking assurance time and the on we update will limit Although turn risk your and to When CEO expectations detailed questions duty discussion based of call. over UDR’s and answered available are in the we press the release the Chairman, very question be We everyone’s met. included assumptions, no Tom follow portion, do President, did factors to get I statements our not respectful questions risks statements. any and A can will that Toomey. in after not and we we and in on with will our the call you your that our be filings Management call

Thomas Toomey

Thank you, Chris, and Conference Second Quarter welcome Call. to UDR’s XXXX

the blended of the are of and XXXX again Chief Troupe prepared will Q&A Officer; guidance. in FFO, strong who as Operating Warren drivers XXXX. feel business call. raised expectations, remarks. guidance of increases well today summary, Davis, be Alcock, in above about and Chief by through Jerry full in senior Jerry and me quarter lease during results, the our as our growth reported year detail during discuss of who for will will rate good there the with as as Joe first and guidance Financial ranges. Harry balance discussed adjusted We AFFO the have The year, FFO results Fisher, share call Officer, these be the well half trended portion same-store revenue per second Therefore, On and available NOI the officers, and But Joe we original as

results lease-up and initial communities developer Our have we accretive producing of investment program in the expectations produced is ahead underwritten. our capital return

throughout now leasing are the With more continue confident half of XXXX. to season ability we results prime in the over, than to produce our remainder steady

year-over-year all special Jerry. optimistic risk-adjusted earnings to our activities. we look XXXX, to confines Last, the capital our in and revenue associates of into to bottom-line hard plan. prospects improvement given to solid that, their that the uses sources a the thanks call continued for our UDR will turn with return of provide results. I continue probability in the XXXX. work contribution We forward within the anticipated we best remainder And and from same uses another the over invest for to produce annual will flexible for quarter and allocation Looking are the development remain in standpoint, better increased a From

Jerry Davis

good and Thanks, afternoon, Tom, everyone.

We’re of pleased quarter to announce strong operating another results.

X.X%, year-over-year pool, XX% were same-store our approximately of quarter NOI respectively. Second total X.X% represents growth and which up revenue NOI, and for

and technology During to contribution from growth the solid long-lived rein robust quarter, our we continued lease controllable top-line initiatives rate and growth. a expense X.X%, and posted of blended operating

rate than basis last quarter lease growth for year. the higher was during blended year-over-year same First, period XX the point

during to market portfolio same did what late not our June was did XXXX widen in store not accelerate, we July rents the quarter, when rents versus spread this realized market see during May. first and during exhibited continuing peaked typical While positive seasonality by something from

grew income by other Second, our in XX% quarter. the

by real driven outpace initiatives, in monetizing was our our As increased revenue-generating of expectations. incremental on innovative and continues shorter-term initial which parking, past to focus XX%, quarters, which estate recurring growth. leasing This specifically meaningful driver this and ways program, by in a a differentiator is

from decline. from to-date, Third, turnover This should basis back given XXX is to is yield annualized leasing our result quarter increases results. short-term of in turnover at decline. focus while strong throughout feel the real continues on first least expense Four, we XXX and points, turnover. the driving especially point next our down years, continues that Year year-over-year higher basis tax to for couple impressive pressure efficiencies is estate acceleration initiative our

down We respectively, find as six same while year-to-date of over mitigation a and X.X% the the card months future the still lease-ups fifth quarter the for business, year year the year. we quarter, were year-over-year enhancements. technological us to half revenue controllable staffing, basis runway through gave rational XXXX, of XXXX. XXXX energy-saving and see down raise in of remainder below X.X% combined upwardly with growing XX% of growth expense and long set to end our when XX%. capital These than the expenditures our benefit initiatives NOI resident us growth growth turnover, prospects or the drive pricing than guidance confidence Throughout store cost environment able our was have encouraging X.XX%. during was more rent revised first XX via just midpoint insight-level up occupancy the invest XXXX X.X% full remains of And for XX% for our been well during expense A occupancy, signs concessions year and ranges. gift points efficiencies for marketing During declined last and reduced and expense process lower from bottom

operating of if earn optimistic leasing trends hold, compare to XXXX, in year-end that our For current are we that will favorably XXXX.

quarter, markets. forecast, markets, new overview a and while a markets Next, exceptions. majority of Boston few to pressures. first supply New result and performing have of York versus struggle of original outperformed expectations San to a quick with line Austin The as our are the our in Similar with Florida Francisco continue

Regarding result. continue market growth a slightly York, forecast we New positive despite negative the XXXX, for to top-line in year-to-date

consistent XXXX. levels increase for This from quarters. when of leased reasons that pressure with leased in at is purchase aggregate weeks. was in combined original XX% XX% home phenomenal at expectations quarter are during been At our development to or rental line two at XXX’s second remain sit leasing are by X% rent rates to Moving Last, million in today, million saw Harrison, velocities, with a the with $XXX slightly quarter. Beach, line today. X write-offs move-outs which the $XXX XX% the ended We XXX City we for and enthused debt, open and our on, quarter. progress original lease velocity At and in offset are We by minimal All our bad for project result. Huntington XXX-home ended averaged XX leased leases move-out and the its underwriting quarter. Boston, XXX-home after previous generate with development collections, the XX% only expectations. net contribution Pacific rates at XX Likewise, during pipeline quarter to ahead is of per in anticipated in continues we month XX%

pro and Our rata two $XX million and on developments totaling schedule. on spend JV budget remain

leasing underwriting community Vitruvian Texas, rents located performing expectations and continues homerun, terms especially in be of velocity. midrise to excess at in West well a Addison, suburban of Our in

vision is in higher and statistics Quarter-end on is point Wilshire supplement. line located of our forecast. Attachment Los Our a are Angeles with in price lease-up on available community community X performing

strong for the Finally, another and associates I our quarter. With over would it turn in like to at field to again thank corporate all that I'll of Joe.

Joseph Fisher

today cover and include: results Jerry. guidance, investments I a update our Thanks, sheet topics update. and second development will and a The quarter balance

high earnings quarter share our adjusted provided FFO were and AFFO second and respectively. in end previously ranges. as at guidance Our results $X.XX $X.XX, of came the per

and capital I latest Second lease-up accretive strong up our X% or into developer to our quarter supplement, direct XX performance, to AFFO assumptions. would was you year-over-year, details same-store driven guidance by investments like of program. now our which Attachment $X.XX performance

a expense $XX XXXX expense additional guidance XX from and drivers increased contribution the X% NOI to to rate basis per midpoint included: the per expanded to increased upside We Full our non-controllable full revenue guidance, $XX growth year a properties growth DCP a and Primary $XX. our to have outperformance growth FFO upside probably by $XX ranges AFFO improved and points X.X%. top-line of same-store portfolio to XXXX share increased lease blended lease-up and were our each to store accretion to or at pressures deployment. from year from share to-date, increases Year expense guidance.

quarter FFO $X.XX to $X.XX AFFO. to guidance $X.XX third the For $X.XX ranges and are for our for

Next, development and investments.

difficult remains we increases growth work stabilizing our given $XXX in construction to markets. pipeline between quarters, past to disparity towards most But economical million continue and from sourcing land We $XXX have indicated the rent in cost million. development

the context continue plan. development meet As acquisition land to to on we DCP our of as long return to sources lower and advantage risk-adjusted our of allocation spend opportunities Big best unwillingness to strategy the those our take where uses our required opportunities. picture, while guidance on continue see a within we spend, returns Attachment increasing pivot result our annual as more and will XX, we thresholds, reduced capital of hurdles our

improve XXXX, in toward in $XXX XXXX will owned to the we XXXX, yield Regarding average an are at redevelopment wholly contribution our stabilization. this In FFO lease-up yield of anticipate projects In and will earnings. million that mid-Xs.

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

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

sheet, and the our to was plan we was X.X-year unencumbered times. credit of RE comfortable improve NOI inclusive the continue debt-to-EBITDA our don’t to We up our actively lever opportunities to increase X.X remain look pool. With metrics profile regard times, down. and positive balance duration to NPV it with joint or of net consolidated size Our for will our of ventures, X.X and

second With we Q&A. as of that, I’ll or annualized; quarter declared representing a per X.X% common for approximately end. open quarterly quarter of dividend yield when $X.XXXX it share $X.XX the of a in Finally, Operator? up

Operator

line question with Please first Sanabria Juan Merrill with proceed of Our Instructions] question. Bank America your [Operator Lynch. of comes from

Juan Sanabria

Just 'XX across any in terms what give if clearly highlight you you're latest supply. seeing of versus markets us There sense in thoughts movements been hoping could you you us major have a fantastic? would can be 'XX slippages on past, and deliveries that of years your some but

Joseph Fisher

Joe. is this Juan,

point say couple of our haven't changed last So I would the really in expectations overall this quarters. from

year. We expectation an the throughout factoring of in have slippage

So about when we number. are That's XX%. being XXXX we incorporated that down already talking, talking flat to

working look better flat the regression where is for field stepping about When of works. models, and on combination us to and down for probably increases sense two County. the potentially, that, decreases then third-party at two people a the decrease York data, Bay whereas course and Florida our of are you increase area and like talking be as going XX% think Orange New as to a going Texas are looking markets the through our City to our So in internal our that markets get DC, well to markets,

Juan Sanabria

improving you that and then the sense give of earn just kind the kind you an where ended last of And where versus talked guidance year based on of and are Great. today of what ‘XX us of you from out? a on of about year to year end out the at the guys earning just start applies 'XX. you perspective the revenues end Could at

Jerry Davis

why want this to in our be the higher to you as today, but that earn the said put and probably have I end don't Jerry, be 'XX. 'XX and wouldn't thing number one Juan, of of that as down to to get expecting net for I we is

our We're but last market had the growth, acceleration So at and I XXXX we’re prepared seeing acceleration. We saw to continuing when June as May market month then books. peaked in now year's rent just closing remarks, in the this rent May. look you from well my of July

the getting we're slide or when down to three was more back of or being XXXX back last this to up So July started months back early that August throughout market aberration. went the four in to an seasonality year then year, level, through the rents XXXX typical continually just

earning lot So is a to seasons year, you prime throughout the that which next we're built halfway at leasing roughly through now. look when of right

better than for going rents you're we and scenarios feel next into normal we that expectation our is what seen of XXXX-‘XX renewals forward So lead we're a continuation sending were. what see for why year, we rather given out that seasonality available to what that's going as the

Juan Sanabria

Great. for renewals? July Do new rent the mind stats sharing the

Jerry Davis

July is force for in and high the in mid-Xs the new, it's fours renewals.

Operator

your Our Please Nick question with next from question. comes Citi. proceed Joseph with

Nick Joseph

in One standpoint? then seeing you're what the event any the new you of factor organizational reallocate effect adjust how key from you’re or an development On desired resources starts, you Thanks. pipeline. have don't do

Joseph Fisher

Hey, Nick. pass Harry. it and then Joe. to it off over I'll It's kick

I did again Attachment funding a on capital our last program. slightly take think you'll like take supplemental developer the if once just over down development that look and reallocated you XX, see in expectations to quarter, we the

think for sense So risk-adjusted the those you that how I gives little we're as opportunity set both the about well as of thinking a bit on returns.

So of capacity decent have a on amount we to do continue DCP.

and We to continue on months. we'll six, things we'll XX next and probably that opportunities see a the hit couple to think XX, there continue have area focus here in of

zero XXX the to later today stabilize will in in XXX XXXX by saw of deals terms reminder to backfilling going Harry is it over of and deals those we what let a from of relatively On Do of kind which think forward. I'll kind opportunities there down you funded number my range, so as XX% and quickly. with development side in remarks, XXX and are of that prepared moving million a probably take or out we're

Jerry Davis

property mean which tends right up we market revenue that now, you talked we lands we’ve prices hear are you stress development and so got got XXX next basis Dublin Within assumptions that I direct market's spread. believe ’XX. -- confidence change working program. gives else, We’ve using property existing on $XXX expect everyone million that in the a underwrite we Nick, us than that throughout our start, faster will about into have a XXX to that cost, that We target to the it in rent, yield underwriting to a continue asset know be tied place. our that's it will we difficult from up that increasing couple somewhat. back comforter merit Denver our that range $XXX we growth we’re that appropriate, tell Yes, while to that each are until point believe I others to you million maintaining of

Nick Joseph

there of as shift to that? DCP. Is But about still you Thanks. soft that moving more could see Or up for well? to maybe $XXX million target

Thomas Toomey

going depend on moving opportunities I forward. that think it’s really the to

XX XXX today, million pre-existing have the have million So a we of with pipeline. we additional funding

that a into So but to at about, get to other of least we that a target, it. talked number XXX soft there's as factors million have go

uses, there level, we higher, not those they are about deals you So as think get and talk to come uses see a alternative and we deal as come by that in could million opportunities, about XXX with out then we and you in. our you will take have sources guys the but a it deal drift could that see

Nick Joseph

like It maybe occupancy. at XX% an on quickly maybe looks Thanks, high. same-store XQ all-time occupancy

just you're guidance First assumption high which levels an slightly be for that or doing year. the can't is result the half in specific XX%, that half maintained these occupancy that implies almost the there lowered expecting was the you in year, maintained? lower something back would of Is that

Thomas Toomey

out -again, last program, for prompt the Occupancy a furnished I a out adds of this that level points high XX basis probably rental seasonality. gets months, would things. I have to rentals period couple levels several XX which point of to of our types by those you’ve and bit occupancy think short-term

drift as expect the So continue you I bit. a with would that

the as first XX.X back now, directly deliveries. by be earlier we getting at or impact half looking half to how so. year is to-date our I going Right little that year, more look the the Joe those that revenue The cautious still we’re half. when of We��re at we’re other occupancy a that of at deliveries the cognizant as XXXX or thing back just in said have is for think

enough well. hold it’s So very

Operator

Wurschmidt with Our question proceed with your comes next question. Capital from Austin KeyBanc Markets. Please

Austin Wurschmidt

because faced talked if to would our you due in consider. our something curious I’m opportunistically Manhattan that of some We've to some York evaluate abound You’ve exposure of their you’ve peers guys seen just reducing challenges the City yours reduce New supply? that's exposure

Joseph Fisher

consider We Joe. definitely reducing it’s it. Austin, would

job we well New this However, to look think to if you expectations is when the at over then at supplies you start to we’ve our think year. XXXX seen should in that supply aware York look time where And down I going everyone's relative expectations actually come upside fairly market the supply, initial dramatically.

is if next market X within X an relatively next the today, we our little weaker story do while still could markets So be have still at the we that a a maintaining think over didn't peers of sense. cape it make acceleration and to year, bit to relative But is term, look market, would like a there. the years thatbut today take we with prospects absolutely reducing market we exposure longer

Austin Wurschmidt

in new about a little of prior separately, markets, context as bit we Philadelphia maybe into then the opportunity. entrance conversations And around an talked

that you if as new update and would whatkind market on just some could you take would So of thoughts an a your to provide longer details term? you curious exposure how front on and maybe enter

Thomas Toomey

going kind of of view is, that the course, across we XX to are specification minus strategy cetera. overarching et or plus markets, maintain portfolio Yes,

So mentioned have market. new look everyone taking and at, a do want been we to I that’s Philadelphia you which not necessarily there, a remind

asset the We and pre-existing have within active in margins. jointventure a become the so there

We on ground. have boots the

looking at that market. job that program there. It’s market medical transaction screens our are positively you within from at potential a We look capital or perspective, a develop educational, whether

technology If and over kind share growth more it tech coastal you opportunities, other fair stable is longtermrelatively of markets. gain job to the starting the look rent of its and some of growth of relative Obviously, to at jobs. volatility

we that actually predictive okay. And models, within analytics it on aspect. our then So screen does like it

market. thinking little are potentially to DCP that we that expand context of as there. bit factors about of are But So look kind a there's positive number we in a again,

Operator

Richard your Stanley. with next proceed with Hill comes Please question. from Our Morgan question

Richard Hill

want circle was if I development going I past the in And development development you pipeline to that couple noticed you of forward? to that can about are look, we thinking you your grow the in to lease continue quarters? back mentioned development shut your over have pipeline. trajectory How pipeline that today this up. was entirely, off view that to you seen all

Thomas Toomey

there couple all temporarily really or quarter the we and or go to remarks then As minutes we back to I that go ago, a had comments go zero few a to don't it expect way prepared two. a the for of may

working As parcel the we that contract, as Vitruvian parcels the of have, million Harry We most $XXX that under on. we between running approximately are half that of have cycle. ramp visibility do that we mentioned of to range, Denver other back as venture the Admittedly we kind where expect a items parcel to $XXX well have we've million the double couple million, $XXX the been up within joint is on of

allowed again, but development exercise that that and the So we’re we discipline piece that development required to that the to value the do has continue of to platform. have team creating pipeline returns want around a maintain shrink, keeps pipeline,

Operator

Rob your with Our next question. please Janney from Scott, with proceed question comes Stevenson Montgomery.

Rob Stevenson

August we sitting far? Xst, the markets essentially thus that year widest expectations sort by Jerry what are the beginning talking of and magnitude about? underperformed form And here have what of the outperformed and your margins

Thomas Toomey

would where and that the encouraged Tampa into that we next well couple better we're today of maybe say Area we're of back off the both of we slightly significantly Orlando and going think did quarters supply head heavier getting to to anything we're as what and in Francisco, Bay But but San points half. second are the should that seeing they’re the of original again couple renewal ahead rate but cognizant our expectations. markets is say the forced upside half I’d basis new done by would very XX The level come continue, be little one growth to new the the year Florida the in best I three markets, I surprised markets. is the a two plan. of the from have Probably first

at outside would I is Austin been asset quality the in three then there's CBD of positive our has those City. biggest the of So disappointment B one outliers. three Really where and the mature say properties supply negatives, New are probably us hitting York two

is year-to-date negative X.X%. York New at

district of was us I new in year Island the be there. positive called going it Brooklyn originally X%. we in than our supply couple B a City, Going projected. positive thought going One to to into affected seven to Long have outsized assets think things And and X.X is we really financial more affect at on the the

tenant X because we quarter with a we recovered lost when years. a we've occupancy district about their take X those been for but on the taking corporate the And very that good rent in us quickly during that financial people Second, had in drop one, renewals. did years

utilities and XXXX. positive a reset into expense one, reason component. growth us. in that utility did NOI reimbursement down drove our both show affected in basis revenue benefit you So second, plan revenue upgrade at just the was the part by New of a system resulted rents of system was then points. growth it in And also building in built to the XX the but the And a early as change about second-quarter third is utility York to And our one our know we reimbursement. but reduction we was and this in X% The that let central of is our properties of subpar

So negative. if slightly would that, you excluded just have been very we

Unidentified Analyst

you Okay. supply. that you year. DC to expecting operating are part of I seeing of today back in in accelerate are we market? a it slippage as was a from markets expecting you And head the the of into how the of early back the How 'XX think And in half traction supply much guys then in earlier number comments on see Joe's half much

Unidentified Company Representative

concession rate was as levels. in the think month well. I And I blended have long growth July don't I No. didn't supply, But we're holding of the see up is good. DC number, We actually, think, the exact very as watching but

our XXs the mid NoMa lot stands it DC. there we're and that's the over is Ballpark the A properties area I are in portfolio supply our don't performing optimistic. weakest of B extremely properties DC and assets XXth coming is outside know, in and But Street. about submarket as in the we of along district most is new our any now quality of well. right in affecting have beltway while you our think half occupancy right specific still And the is within

right went our not So free a last push drop We're right to in now. the rent from you we enter you running that June through year saw rents. would significant suppressed off like as now hit, months expect But DC. strong marketplace October, ability when supply started to two

So we hasn't have year. for but occurred really our this out that, yet eye it

Operator

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

John Kim

Hey, you the what lighten. ventures was I’m that if just disparity about between MetLife wondering include just assets wondering the But the the talked would part And your continue markets. the that. of driving consolidated Jerry, to performances of joint some disappointing joint conversation, in you ventures I’m as of

Jerry Davis

in I lot are I think One think They it’s of top market urban assets. couple supply. a you locations of really have A+s are MetLife of new a that combating the predominantly things. on

the about that's during had finding at significantly revenue also lower properties The in Village are then make supply. west the And premier six this these got component. in MetLife when of York. of So current we That’s XX San the growth I portfolio. Diego, New in probably, look included really supply. were the up XX% upper group. one downtown property East we quarter think the market. our assets those in But which And in properties side new this within of are that a Denver I property the have We are in same the main downtown new that Seattle. negative and got, revenue stores, are finding than the And Baltimore properties

that’s going we're pockets you’re well, do exceptionally longer-term new MetLife are to this, thing you’re levels heavy see properties going main when think, but seeing I supply concession where right think to the now. in I So those are the high, of

John Kim

how the Can charging same do for You on you some the income? how venture I parking is provide I’m properties are a other on at much parking the other with ask question have income And relation leverage you other view in XX%. on words, you have venture grown how joint -- if that your about many going in opportunity runway consolidated to wondering And forward? joint portfolio? could left color much

Unidentified Company Representative

a good question. That’s

we been and do very parking is We’ve urban in sometimes garages minimum. parking don’t and Sometimes at areas we charging have always parking. for we good where in at

platform. to incoming the So or growth rate while residents. of urban for would deals. a the of the we've opportunity parking or existing less there parking on the deals we new are throughout in UDR charging portfolio to outsized is the areas at rest drive lot fee those years MetLife MetLife Two I entire ago, say turned started just to

outsized our assessing new park where opportunities we’re more want in and just I allow we’re XX%, next pace, example. that apartments But you go multiple again reluctant grow. I’m grow on continue in I it's to at Seattle, that’s it growth started nonresidents communities for a think, as last to was last been keep rents year good residents. excess they say going was reserved this say but to up type at going well park continue year so year into whether year can can we're driver on the to about about This people to we locations well our select in looking finding that or to year looking to spaces Over see some -- in to it XX%. as parking

the I they model think and few have to maker few too. started going we're as learning year to outsized million, in from renting it's think it's other minimal be going short-term such the income rooftops, maybe This it's grow spaces and earnings think a are going growth nonresidents. again such that as continue have years to over furnished out forward. impact parking do grow There's area that next common still things I were I a incrementally a So to rooms, -- system conference we or continue rentals to difference to whether year $X.X that lounges be but going this to our resident

John Kim

you Can analogy as baseball far you on give in think inning other we're income what a bucket? the

Jerry Davis

I’d half say, we're in the game. of first the

Operator

question with Drew & proceed Babin your next Please question. Baird with W. Our from Robert comes Co.

Drew Babin

feel on in I The growth revenue as but But just serving Orange recently cannibalizing about still financials. help? you in Pacific well wanted County our dynamics Country, development is that general some same-store of the of the your the well touch that you Orange terms growing could your as of some. is as guess performance? supply maybe as accelerating market talk City do market would if demand kind And in I like

Jerry Davis

Pacific lease by And different Sure, you, is Drew. and from right point. do I I’d the that's This about City. other the price have being properties We City, Beach. is And probably it's City. tell at do that One older now, believe Huntington yes, Jerry. is little much in two affected three one up XX% away leased. in over a again, property Pacific Pacific think negatively assets, is I other mile

right look that being there have within at our not somewhat Its But really be, built units X,XXX we ago as affected way, located that Huntington it's which is delivered all got that but about you weakest or XXXX supply up four on of and of When think military beach. don’t one submarket right Orange you being and in communities. is on our I are have not materially. in community, So the we the we probably mile Orange Beach within a our now. five not tell years at as -- I’d if year County, affected County this demand

of XXX have reemerge. you year than But about when a that you you to going City, little those a competition are just in other and weaker than projections to this Orange when going growth the outside look into had some really less at I be delivered. proximity And optimistic see in are are next we to X,XXX job for have So the we year. of we areas. also you Orange look but slightly Current units is County down But hope about think as would get properties, Pacific the bit about County. has stability it, we jobs XX,XXX have the bit anticipated. would come But supply you're been our

Drew Babin

the bit. though to was this and the the supply then ask turnover year that? was I that kind Rey And just small piece about local up a del dynamics any little Marina to what are directly of impacting of of portfolio, Okay. kind hoping there puzzle Was

Unidentified Company Representative

when mean, it's the was added. think of of really, Yes, income supply last say the a basis it's turnover you were still impact units roughly is, This look when lot is but average. I’d the have And directly that. impact year or we area. new our of UDR that down XXX again, that’s lot into new Probably play largest Yes, stable. year price rationale with about points up basis it's about about up supply pretty that, XXX in -- could I coming at turnover points, it's you things XXX Marina NDR XXX a

think really there a I LA portfolios. the other story So than there smallish in don’t is

competition move-outs new But many in to to area drive that addition So turnover doesn’t affected. the in it up. can take new

tend go tell as XXX job I points turnover in peers, the a down my credit, side as to customer things over period how to focusing other West business. Coast think, residents and how many listening service. much attention a lot all especially well -- basis a leases of then and I addressing on certain The on are issues. you And service have year-over-year team placing had of the better And to our our give customer who I do much expiring you do you to be we will

Drew Babin

DCP Is that. just ahead Great. on terms And is that would in wide Joe set of the one there for or any just with maybe read through of more there program DCP the to folks. you opportunities. more or it bit coincidental pullback the causing lending small talking the Thanks of wide a more for out anything development industry kind for of of the maybe opportunity kind be or into gate time,

Joseph Fisher

out your consistent space. meaning driving it a fact have while. us, really been been is we that in I comment Drew there that the last think We've there what's the for for specifically

widen little just the think funnel to a I bit. continues

better to to are You participants see yields our the more be that may underwriting not more and market that ability hold hold to means expect which the terms that and and coming other pricing better to we the way opportunities to. to ability we maybe able

If that. we're you capital seeing funnel but necessarily not of pressures the given the seen the a lot space, of have competitors thankfully more these from out debt funds size raising there in

Operator

Our from ISI. with next comes Hightower proceed question. with Rich Evercore your Please question

Rich Hightower

revenue on I the quickly. touch wanted store to guidance same really

each better on results this maybe come supply the is else it two in answered we've topic there the guidance that's or the in you there? So high on the had midpoint high however the has of half. expected in risk it that range And end? been back is earlier left as the Is terms not question has than Jerry embedded supply-driven unchanged. currently the raising within end, of up, quarters of case, the going is anything But of

Jerry Davis

I think supply-driven. it’s

likely more to have a just before. the the year into cognizant several I than heavily do are job. our back be we're of But end bottom we're very think feel in in half the more we that bit little supply we're but watching good to middle come there's markets, out doing you that like we the of upper

not people seeing City New where don’t gives free. at stays as supply and of see to than basis numbers. with components, coming rational always concern feel industry XX leading I in. look XX of us We for have We indicators growth bips good the where And happy top two think about as months part and watching in for York out currently with other the of think when about year. and five new of of same pause that again include you else. we're come income But revenue the out strong in it's everybody the contribution lot points, anything you occupancy coming as on rents. out while XX other And long of coming most rest I end see stats the from a pricing we’re We're side. And we'll growth. end this We which that of up the that's

Rich Hightower

with a Okay, seems little two we sorts bit been that's up can has in have And quarter on going and should months be second walk of changed an positive point of market and the helpful there? And that very experience structurally last in to described Boston last or through the then lease your six to in Jerry. the inflection the that just And or question, you the there us anything three aware then dive what's in on at XXX just is? Terrace. the strong we market the over

Jerry Davis

Yes.

especially the still think had new we competition think in I subsided kind Boston a downtown achieve in time where of I stability. supply area it our we're against that that period Seaport and

to So Pier we little are X community. pricing able get our power a at

Pier And growth is continuation communities this Boston slowdown the out we’re of coming the we've think I supply be in every weaker property. two proved I of the where like three I yielding Bay other think too. able as in new They it But get within at a eight the know North with Back starting a a have to XXX and think well. you deliveries you units bit once patterns. would or our come it Our we time being us weather years, of mile concern that X heavy you up some our to two of still around of and strong Shore because different. then Shore the there you've again as some in extremely quarter were did portfolio the seasonality over in at this no our we off I deliver over to in a has well Boston the X%. last look a that's When property to but now at right at been they of when is that's say March, allowed had the properties But year then take first -- And have South you where have economy been did least the delivering year X%. look year accelerator revenue our And about for hit push X% come watching. that gates to thing combination seems to you

Operator

from Anderson next question. Mizuho your with Rich Our comes Securities. question you’re Please proceed

Rich Anderson

meaning about of driver the strategy. or a if Are But to to is the in parking parking had to say is following charging you competition past. you pay that curious growth or the are I ironic that. I’m have your this all dismayed the question market. It's had going or Jerry market intends they in certain parking the they when by potentially being for And fact be spaces leaving

Jerry Davis

high really country. is think think I I to X,XXX throughout parking amount especially and for of say we’re think the garden spot I o'clock those are leaving just payers communities XX And in your X,XXX offer get home when rise. can following. think at an a I of you amount. over not garden night, its that $X specific urban someone tell $XX X,XXX, of It's in want the lot it's to material at rents these they community What areas in think I you’re in properties UDR parking at and older typically suburban one unreserved you some at of XXXXs. decenniums it's about talking beneficial types it's space look in its our average to minimum. average would that especially is you the XXXXs, call the We our I are built don't know when peers where just rather

space. want have a be I think to people that sure they

from or in lot residents price the benefit So I policing heard parking not and it makes are that seen a to that have we our the residents. think

turnover seen our it's numbers. And something at that go I as obviously, think We be you up, we look haven't accepting. will

Rich Anderson

relative to I of kind terms put paying. of we’re to guess perspective in rents the in numbers the

that color. appreciate So I

relative the case and bit more the little Avalon shifts? this tax is is nature in bit asked Do the picture. or behaviors I have is we've now? the a on seeing the all way And typically that of inflection that from cycle an short-lived a what broader this economy come maybe if caught change reform at, you're from whether and the of economic seen could and point that. just growth this your a you perhaps a sense guys is that to two stimulus the question that sort company improvement job a previous how year Second call about maybe

Thomas Toomey

deal We we Rich, are markets a talk the and great it's where think we rest the think about economy and are business. where of Toomey. we the

the storm talk for on talking and XX us are to about supply for where actually And would off of accelerate about opportunities on optimistic then business on say always weathered it is down years talk second the where when national look we us drives it, amazing GDP conversations echo this just national we Our how And of and an what the thing And of at a that that what come three economy a that after would particularly, about supply continue it. we is the view our cycle. an you demographics, industry seeing creation you to as the but would do and usually I the And economy it topics, is. which our about delivery to showing basis, we've are. think kill is resilience. value hell basis

beyond been And of solutions. things we of are last cycle investment. been space low going of income technology flow markets I that has are inside there's some the it markets. didn't an them, nature led. carry probably are hearing to of but that And think in of of and with will opportunity a more more I think through our Jerry defensive top side. going adopt there's than that it XX we are And so others we attributes industry And the where operational we've where that in individual positive lot we bit little the that's And those instead it, a many think think the through in recently. a followed and where and we of always in multifamily where is lot mention been of the we've And significant topic you other talked to is, the more opportunities

weighing our game offense the advantage the of how very combination to it is in resources can the a we nice where balance think have to we saw, capital quarter is experience be the dialogue get the and the that and here of to focused year can the of room of frankly think you what better positioned. be we very just 'XX three are where better for So to take leads of allocate numbers, plan, in on I of breadth full more the our good. good prospects that And And results. we always we people and we how can

and But don't doing us front like out the kind how but So our focused and is the are a other the responsible I over in cards topic. is the to thing. company blanket to attitude of people that's know truth of we of big the anything try feel draw march with figuring on too forward all

Operator

Goldfarb Alexander O'Neill. with Sandler comes question next from Please question. Our with your proceed

Alexander Goldfarb

just I interest. talk a just you could about was if bit little capitalized wondering

ramping that go are having down million up before now two to You quarter said or you zero to guys from to that development that’s $X,XXX. of maybe $XXX back going a

up would So about a as that off. comes the go materially it? are we fair some our like to there? interest Or expense it XXXX as there capitalization Is think numbers, sounds way think offsets about

Unidentified Company Representative

we guidance of our that $XX expense, relative in jumped in from you are for to 'XX. think have is saw XXXX last year cap by about at million driven you we if on that expense really on by 'XX one interest interest may the I year, decrease that half in up Really one. to look interest

by will part talked Then up be late run Pac number think, around this probably $X.X We'll by development the - let's we're end $XX year million City, half, we half $X first rate. I which $XX XXX interest. from, down really cap to felt to pipeline million that kind to we second that take of million, second cap as billion around first relatively predominate say came around had somewhere around the was year. going up of interest, midpoint next you about, the million that we $XX as driven the $X.X minimal half million tells the down higher of So in have The that probably and back 'XX.

start cap little a interest to out given You'll here think kind see interest last two. But much we've on of leveling or we're how cap down up. pick year back bit come I

Unidentified Company Representative

let me add thing. just one Alex,

As cap to interest go comes down, we NOI up. expect

I interest the the putting increase standpoint effect will how in reduction, cap more than mean, of than NOI FFO will on more it, offset looking an So you're earnings at reduction. that's offset

Unidentified Company Representative

That's point. great a

million in between $XXX that Alex between NOI this combined. the mid-Xs remind the big yielding FFO developments that's two to and what year Just

move stabilization Next and in year, 'XX. closer we towards that'll 'XX think

forward So pick standpoint off you two do earnings from those developments. going nice an have of a up

Alexander Goldfarb

of cap that. But that. than off. there's ramp in interest I appreciate seems sometimes up Appreciate in a coming it greater It’s NOI the often like impact the the but mismatch

The is but obviously, the you there's guys, second question program there's book, for you on on it imagine DP, said, the opportunity developer still more competition. sounds you like more

rates returns up, maintain deals the capital per of gone as program or or maintain able the that if go you want you have and been pencil? to constructions it, door, lower have the to has to price make be look that LTV, subordination with you'll had you of your at guys able sort the same to to meaning returns structure your as however targeted less part interest So risen on in cost investing and same

Harry Alcock

I'll the is our of first unchanged. -- answer to in capital stack Alex, this Harry. is that, position on terms risk

the the We this capital. the function a available profile of capital. gap at There's stack and debt created. of increased secondly capital been market that's been the really capital And both in continue equity have it's natural to reduction all to in not order risk and deploy a with

And this for product. so there's more actually demand

sort type returns that were did 'XX risk underwriting the The today first actually same 'XX. sort XX% 'XX, like IRRs million our of stayed and We have more in so. or deals $XXX of to floated we has cycle to our So up. number 'XX XX% is to

So returns expected in increase risk, on in no an this change and product. actually

Operator

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

John Pawlowski

question to an MetLife earlier. Jerry, we being full years supply the talked from as better And part I a know issue. about the follow-on

As be it impaired? continue continues incremental X years any that will just is too to over lag, the and to high from there to that propensity to X of next concern are rents portfolio push level absolute rents the

Jerry Davis

I don't think so.

that and a Year give I'll I in submarkets, think couple again in the an will was think, development property. you a Class bit X.X% where stabilization you quarters their once slowdown there a things of Seattle growth of have deliveries we property fine. ago submarket one for be example. that X% with revenue have is or the our I and of A+

think dependent have these I well we’re But of located I floor great think plans got have I cyclical to assets it's do lot And assets deliveries. well. larger think, timelessly we've on that, built too a floor going think that extremely So very plans. I these

into suburbs move to good not they to millennial I continue a I painful to it's So stages live maybe out buy think a in these or and to city going as in want to and a think be their I renting as they home, and this big as asset sell boomers option. baby the as houses out and the also part far other continue believe that move have And then suburbs age tightness city. to we

I think this portfolio to cares well them.

think our are as So same as over it so going I years, has I an to of kind of the least extended they give well timing just But stores. been couple at it's think you timing, that. I I'll perform and think

John Pawlowski

competing any front, doing sense to growth they the and sponsors Or that up attend. you financial development think, guys your for that competitive they rates engineering? and are IRR? retching expense on some Harry I adjusted the are that rational function by Is just that leverage

Harry Alcock

I loan the this think, terms I has way. in mean, increased think available changed construction but I guess, don’t financing, I moderately I would to don’t that debt has on the leverage changed capital meaningfully. meaningfully. I debt cost mean hasn’t answer is of there recently

deploy to I look their moderately powder. has is capital extent and equity that happened to some become more aggressive think dry has affect they as what

where merchant a I more builder bit you've you a think situation at is the pushing I to underwriting aggressive. deploy think So have got when equity little times becomes situation where a capital,

Thomas Toomey

pulling asset it John, add pie. this capital a global with here the foreign that, getting the favorable decade unknowns pulling is many and talk retail, in away Toomey. away so is either you to that to growing their to haven't they share from a capital class as shying pensions, from of been across prominence players, And for office. and be just they're multifamily networks different respect of I seems I'd to mean, of away are

getting just a And capital bigger so we're of piece I pie. think

John Pawlowski

REIT market have market increasingly And any making the pension Swiss you are inroads? to proxy the Tom peer share at in your private have that heads are with REIT conversation, funds stretch any your foreign, this keep work a pitch for as are but prices we aggressive? and too. you money will hope our in Do discount. They the market a you you been pretty and pricing look changing putting private the look for How to public real investors at estate?

Unidentified Company Representative

outreach think the fabulous that You of I know broad team REIT the what say I would is spectrum. doing across as job

in their talk class particular seeing favor. speakers and You’re conferences more gaining more market about asset at

the into And to the so pump that are examples suspicions and that the is many countries. block my markets local take Nordics, capital eastern local as will investor Berlin,

would to is took share publicly it's the that just get us more off I then floor. elevate to As see years they performance traded are I'd to expand XX time. take up going it call like say model. But they the what What

find public suspicions putting on up now will a are this basis, if numbers risk-adjusted space. is we the are that like the they We keep into ring. My eventually

Operator

no are to the over to and comments. the questions Mr. Chairman, queue. call like for hand President, There further in CEO I’d Toomey closing back

Thomas Toomey

time your into XXXX. for guys. I of thought feel good today. we Just our a a you, had balance Again, we remind great the quick about closing, and 'XX to for looking business conversation. Thanks

we on care. are a good you Take We prospects. have optimistic of And summer. all our wish

Operator

This concludes today's conference.

nice You Have a disconnect. day. may now

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