Centerspace (CSR) 1 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Joe McComish	VP, Finance
Mark Decker	CEO
Anne Olson	COO
Bhairav Patel	CFO
Brad Heffern	RBC Capital Markets
Rob Stevenson	Janney Montgomery
Connor Mitchell	Piper Sandler
Wes Golladay	Baird
Buck Horne	Raymond James
Brad Heffern	RBC Capital Markets

Call transcript

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Operator

Hello, and welcome to the Centerspace Q3 2022 Earnings Call. My name is Lauren, and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Joe McComish, Vice President, Finance, to begin. Joe, please go ahead.

Joe McComish

the SEC September closed. yesterday for filed XXXX XX-Q the with after Form quarter XX, ended was Centerspace's the market

our These about centerspacehomes.com are supplemental to XX-K and note on statements that X-K. earnings that have will discussed statements to for outlook views management's assumptions. are uncertainties December Form and Additionally, posted risks Factors and include ended and the in to year remarks been filings in forward-looking statements It's our disclosure under important our business our section filed based and filed package SEC. Risk at subject the and today's XXXX other on current XX, the our Form with website release other titled

forward-looking of materialize cautioned will which guarantee non-GAAP We Please and reliance these any reconciliations cannot to may not discussed to today's forward-looking that for any are refer release on call. statements. undue place on information, be earnings you our statement

it I'll now remarks. company's over the for turn prepared Decker Mark to

Mark Decker

good is morning, morning joining With Financial for us. everyone our Officer; thanks Bhairav and this Chief Officer. And Chief Patel, Olson, me and our Anne Joe. Operating Thanks,

as business year-to-date. years Centerspace in per XX% is fundamentals rental Strong report core go the to well, and that and XXXX performed up quarter-over-quarter on FFO has share of housing the likely will down record. continue Against backdrop, XX% one best and that I'm delighted

we this been return and a at encouraging. top share from The with up from over pre-COVID remains X%. that guidance move volatile continued XX% a line seasonality happy in as caused labor to for as August. almost mid-Xs last inflation have trim growth, to got points XXX full to our speed or and basis XX-year XX% materials paired have us together well the to capital of is I'm guidance the markets with The since over least also the year core FFO our for story

ways service that processes has improve focus the we maintaining while customer out today. contain Finding if and outstanding an All a housing Centerspace to the said, zoom top strong need. the basic us is meets provide we costs business and for little,

is business and growth. fourth know year being profitability our we it's NOI and do of and straight core same-store of can. by pillars represented share so. our as XXXX per I one remarkably and But opportunity improve an do to efficiency Our value, drive consistent FFO key strategic believe to we remain

We've over of in homes months Lira, last million Turning been for in $XX to submarket. active most a invested the year. the brand-new We center the more tech adding few investments. we community in XXX were than called Denver

opportunity Lira end the October, a ended strong $XX lease-up and since up through at million a a with of a community in common and community that tracked our get is we And just opened below cost. purchased replacement of we believe the is around we predevelopment, stock. April we've to price experienced

our we do current share don't historically believe and embedded we shares the NAV of lens quality and improve the the The market great we about earnings which in the turmoil, low made per and the is multiples. September the shares. wide at executed business of were purchased through investments, Similarly, in late reflected are both discounts and October price in how We fundamentals portfolio were feel results. in

And strong we'll carefully be these possible while thank hard results expect opportunistic environment, and aggressive minding to None to Centerspace to a in want we team. continue our without everyone work. would their of liquidity position. forward, at I be be Going an for

a provide Anne, that, with quick And please update. would you operations

Anne Olson

morning. good And Mark. you, Thank

revenues the quarter period growth XXXX. to increasing same drive with continue XX.X% over Revenues in third

increases prior a of of leases new third this the is achieved average on average same-store X.X%. our same-store over X.X%. lease increased rate blended third rental During quarter On growth X.X% quarter, rates basis, renewals the and

West our during remain we the strong in velocity, quarter. seasonality rates with same-store City portfolios leasing double-digit Billings see starting are in to Denver, Rapid While and Mountain new lease

non-same-store up X%, renewals our XX% portfolio on prior increases of of average X.X% leases achieved over Our over while with retaining residents.

into quarter occupancy As and expirations, have we positively. lower is move the fourth trending

have Maintaining our impacts maintenance communities the us particularly top this significantly expense year. and Our and and as and areas driven remainder cost guidance the remains repair volatility pressures for on and painting. labor experience as of as XXXX of experiencing materials. well the reflects see in a are such priority inflationary our We utilities losses flooring year-to-date for in we uninsured plumbing,

into increased Internally, through we salary salaries market, for June. by we of managed prior line a head challenge costs XX.X% the net XX historic rent revenue board, last months homes need pressure. We're widely vary to Expense the we with remains efficiencies XXXX. as across up growth expense in is It which benefits but XXXX year, increases has over as advance and great have optimize wages the trends to and the to providing great times us. increases. during for operating and contain increased year year-to-date during over Year-to-date of X.X% expense of CPI income

it Bhairav overall I'll over to Now turn discuss financial to our results.

Bhairav Patel

morning, good everyone. Thanks, Anne. And

The same-store from of an ending last same last reported year. the of XXXX Last increase XX.X% which by quarter core quarter period in FFO XX.X% another was of night, NOI we the $X.XX per or growth, versus September XX, period $X.XX fueled increased strong growth by year. same earnings share, for diluted the

management a software FFO the end core to of property and That related was million be to million. quarter by the year. completed G&A the $XXX,XXX included which is excluded expected respectively, for implementation the from total implementation, were $X.X as million, $X.X of for expenses and combined $X.X

increased by of was costs support G&A property result XX%, $X on KMS a quarter acquisition Excluding the to increased other and our annualized basis. larger implementation by since an our million portfolio. a a our the revenues basis, on third KMS approximately or XX% portfolio, and have which The service management mainly last due mainly saving significant the to expenses year acquisition functions combined acquisitions of of

quarter, $XX quarter. the acquisition we the at Lira our acquired by funded million. $XXX.X third of the At down of line the drawing of end of on balance for the to apartments the line We million the increasing credit, end

of X.XX%. As end the maturity of the weighted quarter, was the weighted debt interest and average was years X.X our rate of average

average approximately of share approximately $XX.XX As shares of total $XX October for of at X.X% million. per a net price XXX,XXX consideration XXst, we diluted of had repurchased our an shares or of

supplemental. S-XX Turning to is the of guidance, presented Page on which

per across guidance. the portfolio. updating is same-store continued XX increasing core by lower pressures basis share, guidance of We both growth a guidance same-store our the FFO NOI guidance reduction now XX expense points, driven our basis for at core are midpoint, mainly $X.XX in midpoint NOI revenue Despite points our by driving growth our same-store the and FFO by

non-same-store our was saw larger significantly first costs, the in ownership. unreimbursable our portfolio, was these increases of by driven guidance. losses to our expense for units large which of portion some of contributor increase, We the of reduction the higher were under which turned similar $XXX,XXX FFO turn time larger-than-projected as however, a A core in

reduction lower lower interest of compensation FFO these The $X.XX by guidance. of projected worth were of reduced G&A acquisition expense. Offsetting than contributed and the driven our to reductions another Lira midpoint expenses core incentive-based

reduction guidance our discussed summation, of $X.XX are the resulted FFO core midpoint $X.XX per a to in In the of to changes share.

the complete of As team's impressed the navigate constant to challenges at across coming look to to the I'm the Center year confident ahead. with space, our my the continually and forward I first ability commitment years I'm organization. improvement in months

over turn questions. operator open will I up it And with to to that, it the for

Operator

you. please ahead. Brad from RBC [Operator first comes question Thank Heffern Our Instructions] Markets. Capital Brad, go from

Brad Heffern

morning, Thank everybody. you. Good

is mentioned Lira there? that value. cap stabilized I think expected the acquisition, you a you what discount rate to the On it's replacement think

is you So, And give expected stabilize? any can when of sort to it there? quantification then

Mark Decker

Yes.

going that plus rent bought or minus it which is underwriting, on So, X.XX% we stabilized. our has conservative pretty in a and rates some growth at

over XX% it's occupied. So,

Brad Heffern

in guess there dilution it's the of stabilized why Okay. fourth is quarter I if already? $X.XX there the

Bhairav Patel

this Brad, Bhairav. is

acquisition. the $X.XX, the the with So, rate drew credit, on of the by of which driven interest fund that's to we down to respect line

cap what's that's interest So the that stabilized Mark rate that of is the mentioned, dilution. rate driving than higher

Brad Heffern

Okay.

you guess, how I an strong that kind rent expectation with going transition as there's off? be that particular roll have really that to being And Or property leases does growth dilutive so, of accretive? do from the lease-up to

Mark Decker

Denver will believe broadly. strong Yes. And positioned believe that in do growth. We what in have strong but growth, Again, submarket. is particularly we is do seeing the we're well underwrite asset this it didn't we

look bought also it. run would sell may this those we driving margin, growth, time. we're we fund than than when faster it about we basis a at and think confident of it XX-day more less on earnings to quality, will asset we our long-term many portfolio other than we and over quite it So, build But to assets, of assets some this think cost at

am I mindful on also growth consideration. a is but your a as earnings I question is -- So, spot think long-term earnings consideration,

Brad Heffern

you how mentioned I growth? exactly guess can And to walk it. quantification as much the expenses. you through is Got can then, expense give any Okay. unreimbursable And release, overall that's the in you affecting that there what noncontrollable is? that

Bhairav Patel

is This Yes. Bhairav.

the of incidents those kind Overall, the third to a So, as regard $XXX,XXX we've the a quarter guidance beginning where particularly couple portfolio that core the you be it about as seen just that reference more impact on in year or basis. FFO nonreimbursable would would think the non-same-store of well the fourth the of think the to impact I about was at quarter. in losses, pennies whole of incidents as

Operator

Thank you.

Kim comes next Markets. ahead. Capital Our please John, BMO question from John go from

Unidentified Analyst

[Robin Analan] I'm Markets. Capital here BMO with Hi,

the how X you lease Just me perhaps calculate to blocks walk And building you could grasp current wanted your X. & through What's to loss and in? earn-in? to

Mark Decker

Yes, go ahead.

Bhairav Patel

so what the the the and part of again, question? what's the Could question you part earn-in last say last of was

Unidentified Analyst

differently, through to if do you to ask get Yes. It welcome how in? just can earn wanted calculate it you how to it, you appears

Bhairav Patel

take I and that as of come I they loss for if part leases look mean, we're kind all at modeling expiration. overall, first. you Yes. up I our mean the to lease, can

depending a about We of whether of kind being at it's on run and market we into a believe through on it's a rolling that So, that's depending model. use kind assign we rate, renewal or the roughly that whether point, we that's rent how or we're renewed lease, lease. new the XX% renewed being would just new

to of rent about captured keeps the the lease we of changing. at to loss kind lease, respect that of summer of went through I it But September, the market as We've months. to with kind mean, X.X% loss as X%. lot to was And a

enter the run So, we be based to we project expected XXXX, as months. seasonality on as of a summer we out try would increase kind that curve and kind to of

Anne Olson

And this is Anne.

do we on have portfolio, the significant that Given X% only. at closer lease we non-same-store X%, the that whole portfolio, X.X% to look last if is a pretty is to same-store

Unidentified Analyst

Okay.

and repairs the what for at the cost? major drivers impact? Did were have some of an maintenance, perhaps Looking turnover increased

Mark Decker

want you take to do Anne, that?

Anne Olson

drivers R&M pool separate plumbing, increase. Yes, we're is of is sure. one our of than turnover markets, driver. skilled this there very a operate Turnover and Thanks. the costs big like seeing demand. expense to tight of What lot Yes. labor related services a and we was really in servicing, also HVAC, overall increased trades main specialized is

of XX% have our over leases We turning.

it's work significantly. costs and trouble our finding when to them, and they're a we are look staff vendors, for so, lot really increasing of having pretty And

costs. that driver rising as Particularly sure increased and and our lease another rates side, seeing to resident we're keep can maintenance security enhance retain in experience our the way and our we've security that urban make is really we repairs a assets, residents. The

costs the increased and repairs in side So, we some on are maintenance. security seeing

Unidentified Analyst

there far Okay. do turnover there. And as as just moveouts the given higher that move-out -- Was reasons? anything that's

Anne Olson

really a eviction largest we quarter. -- a buying significant move-outs related. see move particularly third the bit home, our we over That's amount for X% is The were in Yes. relocation. of pretty little have did that There of outs move-outs, are reason to outpaced a

all moratorium have came was particularly recall, eviction off. and you year also year in and rental Minnesota, dwindled off tapered assistance this the has now we If now the

are we And so, units a of those amount not good pretty costs very Those usually well typically in do drive have condition. eviction-related seen significant turnover move-outs. as because

big lot a those related a in we evictions also, pretty fees have particular. to legal and damage quarter, in in third We saw the of to those connected spike write-offs

Operator

Thank you.

please Rob, question next Our Janney Stevenson Rob from comes Montgomery. from go ahead.

Rob Stevenson

on your morning, And ability can what in as you you contain Anne, guys talk to like colder, how Good prices that? cetera? et weather utility the costs you guys. about sub-metering, RUBS, hedged -- gas have successful gets guys your stuff have been and

Anne Olson

utility And hedge. how we're talk at can. little costs potential then can about bit looking I Yes. maybe and Bhairav to a

RUBS portfolio. across our have We

sewer in water, that costs area gas historically. electric. We However, heat common included is not costs, gas RUBS had and

portfolio being However, rolled is that out now. across the

So, not there's always rent. much a less not in common lot of RUBS heat have there. markets to trade-off where include operate a We the and all, at it's

we are come that We'll on. So, starting leases right and renewal now November. see leases the rolling out new in

planning those So, for we going to we ramp on we the bring lease we this you comment takes that on hedge? won't and it think there's we given full year roll down be we do Bhairav, to time utility to until are starting everything other into an enhancement as want much doing we to XXXX work impacts offset now, see are costs XXXX, really and on impact through but revenue less this go those also that XXXX. those. can that as that year, But a up through increased the and our as

Bhairav Patel

Yes. markets. as of I think in hedge terms able think mean, some In of pass regulations markets, we along. controlling those to not is based out these I the certain utilities most in strategy laid we I are being effective costs, Anne on in about what mean place of to the just it able kind

hedge as is, of were mostly effective environment. would high the offsetting of utilities with, But strategy be so we the able this kind volatility where think being cost this plus in it with to extremely would about if passing hedging be doing it down environment even in it we most

something it's implement that something to it's we but unlikely can that So, evaluate, future. be will the we it's able that near in

Rob Stevenson

seeing guys probably bad in - eviction or you and are for in uptick but any you portfolio on are markets? while, your the radar stuff, any which the delinquencies then debt And a absent normal Okay. certain throughout seeing screen been

Mark Decker

some no that? I do mean, Generally, detail Anne, on to you give want

Anne Olson

no. generally Yes, I would say

In fact, kind like down of to I come the think COVID way feel really post has we're fairly our returning delinquency pleased COVID and that pre with we're levels.

incomes Our the portfolio. to new our high very on across be continue applications

numbers tenants. rent the our good those so, credit to really quality good. feel are about And income of We

Rob Stevenson

on to repairs flowing that's then talked I some returns And of here that through put redevelopment Okay. as one from it well. maintenance last there doing the get that, side? the that you you changes there about situation you volume me. where are on Are redevelopment about given pressures, or guys you How getting get need or on planning of is a to Any the want the or thinking process? and you're redevelopment returns you pause assume cost on that?

Mark Decker

that you want do to Anne, take one?

Anne Olson

I can't. Yes,

is our thought think to nimble. redevelopment want on we I remain

on And it's kind off projects, market and will at constantly it. rental as units. impacting happened costs rise, it bear those unforeseen the is how our goal are, rates the turn what So able looking as those how during it's vacancy, long we to circumstances of be to are to renew taking as

next going So year. I into think do that

to not on year-to-date good can feel scrutiny we've or we what heightened this the year. has undertaken get very really continue completed We to the been have and We're premium. whether about going projects

our fact, overall during with and In the our point occupancy had lot XX which took basis a of about did impact third we accelerate couple projects units, kind back quarter. of XXXX, on really a and a of in non-renewals

good where rent right potential some about of and we overall but moderation now, it, growth. cost the of really the So is also it feel capital for with market

into to be we're going year. careful think have headed next very I to

that to about with want change quickly, to underwriting great underwriting very it. we and change can able and feel have We be good that, we that good plans

Rob Stevenson

Okay, I thought. appreciate the thanks guys

Mark Decker

add Rob, of on top I'd just that.

that about across rents value as the value and buy something and think it of work. from everywhere, can't going you still are home so board, up a If folks work outlined. house, carefully at they - looking perception tends to is add Anne maybe planning But we're the a

Operator

you. Thank

comes ahead. please question Connor, from go Sandler. from next Mitchell Piper Our Connor

Connor Mitchell

Hi, taking have I question. two morning. Thanks for questions. good my

to The first maintenance. one the relates and repairs

that guys labor tight a it's You market. pretty mentioned

could any the maintenance to bring cost? repair to steps any outside maybe take additional you take you maybe and there markets steps labor than and of the help in cost little lower a or teams So help other fight your other or bit outside with - pressure could your are

Mark Decker

start I'd for islands I'll call Yes, and, generally, maybe can on. Anne, check say more, some Mountain labor. you particular, just have But - and in I'd you the West, them in

think it. about, if Dallas, several Dallas four-hour you other say, around of a metros. you're Denver, versus Dallas in draw has people you I So two, drive large million if a XX mean, And let's into circle one,

that size Denver, in you city. do thing similar you another same can't If find

that And City went you to, West or two our say, would if markets. get are Mountain billings, other Rapid worse which

- difficulty to basis, labor and on kinds exacerbated the But elaborate, are so Anne, markets you think factors. consider some mean I that. super I relative there So But those just those I in is by and don't - that, with tight you please? of of ask an it's why absolute

Anne Olson

have higher the - to markets market. actually and to to use value-add send contractor from labor side, of team from markets cost we on market that's one a the than into and other larger from a pressure difficulty. where travel them we're do we our smaller markets used of end less one that Particularly Yes, our having given expensive simply might

is look something that that we So at.

is, everyone projects costs we accomplished, that to been and large to vendors and/or find our same which But issue hard the may have have It reduce workers. across skilled I which not with contractors that. either having able is way are very otherwise is that think get forward labor a gone

maintenance, we costs things related to are like HVAC. school about plumbing, lot a the talked And R&M of

those, demand there's seen areas costs we've really a on and really high So specialized skyrocket. in those services,

Connor Mitchell

use Okay, acquisitions the And I you be the the capital. on may that I potential question color. then now with my some rising second appreciate know guys mentioned of rates. is current And tougher

So buybacks further should uses or to we turn stock maybe or expect other additional of capital? acquisitions any

Mark Decker

of guess thoughts couple a so on Yes, I Connor. that,

First, we're of space, thing, of are of pretty how clearly apartment the kind evolving you assets really I oriented. significant about if are think lack and - is headed that's And real very by lot discovery a a in driven mean, mean, flow volume. sold I price them and

time have So funds lines, have what you.

of deals sort of about gone, to and situation business a someone or on some circumstance that would now situational all where is lot right kind oriented it's capital while seeing. of waiting of sideline, it's there's sell Most really there's flow that cause and because the

think there some inclined interesting do what means inclined be So go that I to will where is this, to someone's situations to market.

little And be, while. going pretty What I be seeing we're think what mean, but to take good we of not a advantage, don't I coming sale, for good prices. might out not least think, opportunities is at there's to the lot next in volume, are those

mode if They great. fell Now XXXX, in and prices, asleep and like you feel into I feel would would high. you told probably those just they Rumpelstiltskin went

relative to basis But where points XX to they're the bit, years, off we've XXX been few a in last probably. quite

multifamily seven think considering relatively to is a I asset is good when much case you're the it's fetching long-term and this caps there's capital six's So trading trading too just capital because start is currently or don't because out there, at alternatives. going that

numbers believer evidence a would it's and which are think I that I inflation, real. in you if our And am

be, shape So hope possibly this, shape great your we're exit we opportunistic well. sheet, which really into can to to coming was be great in balance as going and our question, in mind as to as to we're answer going and we

Operator

Thank you.

from comes Baird. question please Wes, Golladay next go ahead. Our from Wes

Wes Golladay

going that this probably gap? line likely with plans is I high Do - any public wide the term that is pretty lock as for is the everyone. in morning equity you permanently and with part the to dispositions to credit? market - question the of good you mindset now know finance have versus said inflation second minor you higher. then is it out to not quite that And a as robust Hi, arbitrage? to Are remain is private look is still

Mark Decker

be - we to kind that completed capital question simple to at everything elaborate assets, it higher flow. are everything often stated some expenditures have look The but mean, to yes a at And is versus and look what kind every and newer the answer discern case yes cash it older quarter in both. a we're Lira and really might the after cap asset of I is But little try a lower April attractive, we of going rate looking look we long-term after might much to of much our bit, think our quite properties, just cash which like was a flow. that to

that and assets of trade some And the or get high at pretty it's also those positive cap neutral case that are can might rates leverage.

might case we that that, consider us. the when older be our some So it of assets, well for works

candidly, So that. continue expect for as it And And would we're exciting to longer-term put be that. yes, thought I would Lira. I some on won't us evaluate as it be. also evaluating to financing We'll

is kind priced market we which agencies when to Because out from to of be priced would day treasury on X% fours - it, out were X% X.XX% around. is would XX-year way mid moving looking And because discourage changes you unsecured call of asset, high every probably it our that from And XX market, a going. the is plus, in priced the - money range. money that at today, mid-Xs of in the favorite and that we price agreed to

And low or would So market. would to us probably UDR that to if us the see the mid-Xs I off all capital And I they're And look would of SFRs. look be you you at the that's unsecured to us, today of so secured some there. the to be SFRs drive rated multifamily those for would mid-Xs pick we expect kind debt at of rated in to if - think the - bonds, investment-grade mid-Xs.

Wes Golladay

Yes. Okay.

back we guard. to non-controllable expenses model moved unreimbursable of should every a is probably we bit you soft the when abnormal year have we lot Can truly forward that guess, just again, pull typically should year, go of to next next on outsized kind do this that this quarter, the the the revenue, And I what's there? to other delta I think a the And going elaborate take then it's what's not look year's model? $XXX,XXX. this out on what quarter. some once little And you lift

Bhairav Patel

Sure, I'll that. take

losses $XXX,XXX losses, On on And quoted. I by be the unreimbursable on that portfolio, the portfolio. this non-same-store said, categories. we've seen driven again, that number in back were the scheduled revenue than addition as your truly growth in over to Coming what unreimbursable I unexpected expected across those rent that to incidents so all growth, the truly seems to question non-same-store quarter, the had we

alluded we a year-to-date. have normalized much hit better quarter Anne Collections more rate the that third to upon much are in collections and overall

actually in that quarter, collections. same revenue we to had So year contributed increase lower year-over-year. a Last the the bit

year-over-year driving been concessions increase. have So the that's And lower.

quarter. door increase, That's the agreements some third revenue driven and also and things had is higher, well its by driving some application and fees are by of signed. other then revenue revenue and some all administrative the higher And year-over-year driven in its driven we've of sharing that those RUBs, fees fees we've that as of some other

Operator

[Operator you. Horne next please James. Our Buck Thank from from Buck, comes Raymond go question Instructions] ahead.

Buck Horne

there And is kind on repurchases why guess Mark, on of of still flashing normal seasonality why warning now question stock timing maybe indicators acquisition year, guess there's I'm when very struck just out I also of level, got bit. a kind really Good lights decelerating lot market this my signs on more morning, of the little type lot growth rent pretty that out now you Thank a Lira much. a there? I it. rapidly and I is a appreciate recessionary than at

and now wondering As of amount with right forward go price huge repurchases? and Yes, kind confidence and now. deal? kind just kind gave of there something ahead to of Lira of the lever I'm still discovery said, specific kind up was stock What there's just to to evolving you a of you go also the to do why that's

Mark Decker

in. in the guess the and Good active we'll the question. trying to the call we know this it goal And at of we Denver on this the in is, be built is quality throughout but a it know an well I asset bottom this hindsight, end. to confident we it certainly and participant group was We front bottom, truth and who were our looked of - financing cycle. that feel submarket like kind really

asset lot there wouldn't So like something surprises. is very had knows so far, but good pricing quite were felt learn and like that be And from so score. understood you that you well close, we understood really kind we after we it in moved like the confident that on of earlier the we and risk of a buy felt you Who the when year.

mean continue wait-and-see lot kind may in of I don't move. of to equity actually mode. out a I there's know. it there Now whole

that you And negative lots can my and there's less lots guess is of they'll have leverage, leverage, buyers there - of you'll if use that. do out

our about was, submarket. felt we the pricing But a Candidly, been it. dilutive locked great it like why XX-day now the not we're better, price, of So We're it would game. have asset, as debt have wouldn't We like really playing currently the is. game. multiyear we playing we a and

now say sense. it the stock. believe currently long-term, of over more than assets the we nearly business a update quarterly. I'd this view about talk sort on we in the And - similar that on of difficulty]. NAV have that We and [technical confidence lot We daily. we're paying worth are what is. these that have our so a And why mean, basis, of for made I them,

Buck Horne

I appreciate that very much.

still kind going the was the of follow-ups that stands even newer quick turn about and up. of out and of couple to the or newer kind now? with CapEx of today assets rate run also bring the elevated CapEx do a like with did same-store some portfolio recurring costs down CapEx a there R&M rate? the run Is assets, of level expect how portfolio portfolio - looks think you It as Just on of higher

Mark Decker

and know, needs worked I a portfolio, - in been Those as KMS that that be same older very Yes the added old portfolio, has are perspective. expected to assets you mean real how and well has year. cash from relative we we next very have they'll the store no. CapEx which flow

what particular think So about talked that to the you in age when respect margin, of CapEx with we've time, about NOI and shrinking lowering over with portfolio.

of the is just bit a KMS a is mean, reality back mathematically, I step there.

enterprise and a are the Now management efficiency perspective. and cash our other goals G&A property from of distributable

serving a I of can comment - lot we're there. Bhairav and But So masters detail. in probably think

CapEx affiliated will overwhelm. into Min-X the mean with coming last But we years. the all the the and I Lira NoCo in assets assets, are five other certainly obviously KMS same-store bought, the built pool

the that's should our they homes. but the low in units, have So near CapEx relatively term, KMS X,XXX so

Bhairav Patel

budgeted plus, KMS acquisition Yes the in and capital we portfolio. some

So as we be capital. KMS as portfolio, of you at acquisition next look will in enter it as into year-over-year covered some of CapEx same-store year part with the

of shouldn't So we go as materially some start up kind those acquisitions capital. of run rate the spending

Mark Decker

get than we which of and work year that less Yes it gotten - been out planned number because it's we've scheduled. million, hard to was this $XX

Operator

go have follow-up We please a Thank Brad, RBC ahead. Heffern from Capital from question Markets. Brad now you.

Brad Heffern

if stats Hi, and give thanks October? for the curious, occupancy leasing was you could follow-up. Anne, I numbers that for any just had you

Anne Olson

I'm what traffic. XX% renewals. is out the - September, seasonality get system what mean as a in will not yet. seasonal down and have documentation into absolutely October, a did seeing That completely seeing say I seen the final still close to We so we far bit close drop-off strong we Yes, is And October there. see we did - in really I to from traffic, routine us. for about down traffic. in We we're normal is were in just XX% August again quite

renewals quarter what fourth the are months. of the preliminary that So expecting, October down, come of remain rates for to strong that the lease first they the we're in and couple given do going always the numbers will some is new

Operator

closing no have I'll now you to We back for questions. Mark currently hand further over remarks. Decker

Mark Decker

you company, to I'll few and the NAREIT and appreciate see be everyone's there. we hope in weeks Well, at Francisco Thanks. of some in interest San Super. in continued a

have a much, So thanks very everyone, good week. and

Operator

This call. joining. for concludes Thank you today's

now lines. may You disconnect your

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