EQR - Earnings call transcript Q3 2017

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Operator

Good day and welcome to the Equity Residential 3Q 2017 Earnings Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Marty McKenna. Please go ahead.

Marty McKenna

Thanks, James. you XXXX us results. thank Residential's discuss and quarter third morning for to joining Equity Good

update Officer; our Our meaning our advised These economic call David assumes Operating may President speakers that and Mark now law. featured over today securities subsequent forward-looking supplement to risks no uncertainties. during statements federal subject of CEO; certain Santee, David statements to that are certain the to matters constitute our I'll this statements Please forward-looking Financial company and of Officer. Chief The David obligation because discussed call become or Neithercut, these are and Neithercut. turn untrue be Parrell, the conference Chief the And within events.

David Neithercut

Good for for today's you Marty. living. you, continue joining that our Thank demand everyone. We call. experience markets morning resilient apartment for to and across we pleased were deep us very Thank

steady and day unemployment, expectations rising growth original producing with incomes for business for the a in continue housing exceed demand during As elevated that the explain well that year our benefits property David Driven our new rental core loans, markets. Santee lease very our or in results which levels meet management will in one confusion. more drive every revenue portfolio deliver support the markets by Across for moment, our to performed will see teams operational of will full in great economy despite and supply strong we an portfolio jobs, our and to just now detail expanding

upper store our to towards of operating normalized the we well. and expect year-over-year original last the from growth be result same provided range upper we As achieve net year-over-year the as of will now income operations growth funds February our end in expectations end and a revenue of

then year. Mark David operating our the important color some Parrell our how and on let for third markets will more expenses into Santee this extremely I’ll performed during quarter give So go and detail about guidance

David Santee

I property elevated teams during pleased Okay. despite as the continued renewal and our business markets. results across you, of of extremely service cycle performamce all David. they with remarkable Thank deliveries am to our quarter annual deliver the busiest of our

In X.X% quarter, annualized basis rate achieved for increases XX addition which to basis year-to-date our points the QX. was improved renewal the from points up XXX retention

higher urban last of demand quality, we bips revenue continues year balance for Renewal deliver I’ve for for on trends has, it in year XXXX physical In points XX thus rate basis last results good. markets, renewing soften XX which to was XX.X% see of be leases to results inventory year [ph] will we the a very guidance year the available and of XX as beyond normal which second we With are apartments, and points half growth than And occupancy peaking the occupancy with same X.X%. addition year. would XX% better that indications end continued expiring improved and full demonstrate flat basis our occupancy to X.X%, deliver position to of are call, for the sequentially previous I that said quarter, hold quarter-over-quarter. seasonal at original quarter, the demand the as we our October the year the our of good will. full across most high the our of far no And week end stated in deliveries by at

exceed our markets, original the than again last meet out our is DC quarter, Moving will no fail to different Washington only that expectations. of market or

online sub further QX, and into this lot Federal development market Central weak government further of stabilized job have led sub deteriorate came rates the community procurement markets. QX vacancies market. pressured front a from in district in as deliveries peak new As sub

the basis the increase did X.X% sequential QX a market to increase recover in in experience us allowing is DC occupancy late year-to-date in an to demand quarter fully as only achieve in to experienced growth point for moderated However, our fall-off to we that XX.X%. Renewal turnover.

a driven and Central was pricing mostly lease minus New the to [Ph] X.X% submarkets. FAS by the DC

necessary an absort While below and growth. all new deliveries indicators expectations. rental improvement federal with future initiatives economy, clarity be positive is of at signal that to improving improving growth the local will sufficient Better were market units on absorb catalyst pace the to late only job rates

a the XXXX. an expectations. the was retention city in positive better pessimistic strong QX last achieve basis mitigate York any that the outperform Compared same very were XX.X% these we than occupancy higher other quarter that and XX in X.X% enjoy lease very to renewed more of increases for stable points with week is than and year. results Today, results exposure quarter combine in our XX over X% combined relatively New leads York minus New growth Renewal continues leased available had quarter as to QX, are revenue to points the good basis year-to-date.

or X.X $XXX slightly to two per ups, assets X.X portfolio or from which our stabilized limited targeted move are Moving and move certain across properties in are days move for to again month mostly pipes ticked days of per from on average one more still to the concessions quarter. in in of sessions $XXX unit very down an lease to per new

previous last year flat net Our is are same currently the improvement rents were last with the concessions from which down which an time X.X% time compared when effective they from in quarter factor the year. same

These City cards. use advertising a gift cost not almost non supply result and amount a job as quarter. York the of positive have been down list growth. far we market Additionally, need XX% slowing still significant for have are the thus the New as in acknowledge And revenue to faces that incentives signs such we but

in recovered of X.X% quickly Boston, to deliver point occupancy. but retention. to improvement years, churn more strong proved For in quarter the point growth student very basis basis XXX previous a challenging a Renewal little summer addition in was to XX over quarter improvement be than

the XX quarter. pricing points lease basis New was for positive

news weakened the our exceed market to Renewal new most Amazon for on in our be leases continue performing Cambridge markets and and growth in new rents, Facebook, reaction to with for future. led top weigh recent however increases or new annoucments downtown and office track are as were will due above rate quick leased either in optimistic however sub average to the by these deliveries X.X%, the encouraging in HQX QX. New expectations. pressure in Seattle Bristol-Myers of demand space to Squibb quarter large peaked on deliveries pricing lease remains

increases to averaged Amazon more with was off for still More XXXX. hangover and X% QX. Amazon new was of XX.X% way through Today, national levels the office Francisco, related but in rates while but begin decision, XX,XXX exposure needs few up at increases last and a and Jury XXXX. momentum entities for is near or the the lowest given that City diversified than from year moderation infrastructure the has the the seasonal renewal their down of now than for kept they leased the interest increase average still all going jobs short impact not which the Today, fill remained X.X transportation full new to quarter there Estimates as rate announcements we we’ve back back experienced XX have back leases They October the are of versus the to reaction a were other San Francisco in perhaps same long both has and economy. overcome the proved experienced X%. normal the level growth space rental to lease is are to level term. continue same are large of that to the in HQX May. week to deliveries Occupancy before be welcome to on best news San Recent out XX.X% approximately quarter dipped to environment the accommodating lease are job pace is The reached XXXX. was seven interest quarters, points, everyone little occupancy years in rate in now steady of lived. this be New also X.X% basis down in realized up

New combined original of with This leased a lease over to of basis continued rates quarter. leased X.X% XXX resulting X.X% Renewal rents our X.X%. the increase improve in modestly revenue and a far in decline growth exceeded expectation. for improved drove point increase to retention that

out is being submarkets Southern supply Pasadena remains is playing out The story healthy downtown the remains relies content supply for lease California cutters film as nonexistent. expected. that forms delivered as exceptional this story Clarita valley bolstered new entertainment. demand industry we as in the LA in LA, rents. growth results West Santa new heavily weakest pressured of the was alternative and new region is by still code as sneak and original on economy outsized Job of

While X.X%. leased points, release rates were up out up basis renewal rates XX were

lease within X.X% renewals We in a X% Orange to also growth at were lease County year. back drive off second in In X.X% X.X% fell over basis the point Seattle deliveries of a had occupancy. respectively. new improvement the basis San XXX half and retention XX both helped point and and and This respectively Diego, only and of significantly

achieve of secret of new extremely markets. very our proud we all that our to all-in-all are the ability our there a to out in know us So of am allows and rate happen. the employees sauce renewal that both results retention given had team’s level strong quarter, deliveries I across and the

Mark? all. you thank So

Mark Parrell

couple our David full expenses, FFO same you, guidance a talk normalized Thank markets activities. capital of our today good to to and our and want take year minutes I morning. about revised store

was increase the taxes. up expenses in and relatively X.X% payroll third same and a of Our this X.X% and by utilities store an were quarter increase modest in for driven property

we plus on we tax third was due tax property the favourable increase several less considerably the expected to property results had quarter On appeals. obtained side, than

Switching this reduction. is the cards as same expense anticipated were resolved sooner discussed , X.X% our advertising XXXX, to newly non-existent store July turned are our spending tax the and in of has resident numbers, in of based expected real-estate guidance annual the nine as the on taxes And expense quarter we expenses months of mentioned onside X.X% first for through and on the in year-to-date payroll the guidance. as the we months payroll of estimate experience Santee growth a tax large David our that of negative be team included and of than driving call, up years property property we the gift primary appeals year. nine to the again continue leasing expense drivers growth. Our and house Same on appeal many few had first store increases an up was success had year-to-date for

calls service the medical in previous These us property on discussed caused addition better we continue have staff in pressure retain impacted our to we to on-site residents comp by to workmen’s will wage support higher year. full a to provide our that category and some factors combination and the about estimate have competitive retention. employees a a As very of X% in markets insurance grow even be to for the this maintain our estimate of market and certain payroll claims employee and for level resident

guidance all our of increased We previous reasons and expense revised same growth mentioned. real estate store below and same guidance X.X% just reduction improvement I year previous expectation estimate X.X% full which the that’s end range. to X% turn property our growth is down to of low drove guidance have from growth to our tax our expense in store slightly tax expense in the the This X.X% our for

of new guidance the Santee just same will increase an to a top our in increased revenue lead X.X% end and Moving full that which in slightly store David our year revenue onto that’s NOI X.X% same our is previous of the This previous FFO, we range by and discussed. guidance store number the X.X% expense our end range. above of of at driven provided earnings of normalized growth high expectation factors release

two higher better our up annual same our property For from guidance both share leased properties. NOI up strong performance we from FFO picking performance with contribution our and per pennies a and store are normalized

our due including other well to overhead. this slight interest We size Combining will from the guidance see expense improvement as per items $X.XX all share $X.XX a corporate higher normalized a to modest due our issuance to one penny result to this of slightly increase a midpoint is as FFO debt in of the to per share. increase offset

$XXX debt issued to of of of unsecured million notes. August in earnings consisted $XXX going in million XX the Now as we and that balance sheet, year discussed of release, and our XX-year $XXX million we notes

million year, we to assumption to slightly demand us. We in coupon a recognizing issuance included about of year strength tenure a at Our over a an of pairing add this down XXX overall year July was issuance in while the and indeed all year times would market, decided third notes X% an third effective of note we X.XX% year issue and guidance down XX was and for were and tenure rate all third in our exceptional an rate X.XX%. a coupon four oversubscribed, X.XX% has of the that

fixed our issuance outstanding history. supporters year community the our bond the result. We balance. strong used paper commercial lowest income REIT terrific ever down unsecured was to third coupons a of year and third The revolve and We this one in cost thank industry lowest third pay the many our for proceeds and year

better our normalized over turn increase the NOI and very Neithercut. to expected issuance. than David unsecured and revenue, a in a debt all-in-all So call expense FFO good slight results, I’ll back

David Neithercut

All Mark. right thanks,

moment, capital a a Just quick moment allocation. in

the X.X%. As of transaction a activity XXXX completed it XXX submarket three up in at stabilized we assets. Wiltshire for night’s quarter the Angeles Los unit with our $XXX acquisition rate acquired Center in release, the in was some property for picked in cap press know in million third A last

quarter stabilized X.X%. the up, of assets acquired new were During one their of initial also for million two $XXX unit in XXX has acquired brand rate both Boston, that completion property cap nearing we lease

in $XXX at for million property Bellevue, X.X. rate cap a Washington also We of stabilized a XXX unit acquired

we a During the asset XXXX one a XX.X% unleveraged in property and quarter disposed realized at California built $XX million on we unit in disposition a XXX off of investment. [Indiscernible] IRR for yield that X.X%

Now before to not do up. at the the year assets acquire is present additional time expect we

could will likely the a needs if complete year result our the incentivized end most help acquired be by transaction are of for a happen. make year, that that the change as end quarter the the full seller So number million through $XXX third but we and to to

closer and to a year, will yet could continue million close actively of expectation of the so we we year. also $XXX have get We to that the work of for assets this the every guidance disposition dispositions handful that on original

Seattle, new complete yield rates markets. the about of On construction XXX high tower asset side, excited the to well are third we our to just X.X%. the from quarter on forma place high in absorption Rents original above at development unit essentially on were rise very our a in and and cost this two block pro we expect stabilize

since that You’ll began in asset scope changes $XX.X note million have by the occurred this increased has development the this in and budget represents construction this XXXX. that been on for

with the our overall has quality job tremendous much original it in asset were Seattle reaction occupied the leased As Submarket, delivering the including in during in quarter, But the completed the rents amenities line far. marketplace. appliance to We did pleased we very compelled property occupancy by is could XX% well rents common continue that asset received in our and across team been Vernon more Washington not to development they’re the market unit Seattle very been DC's XXX-year increase and the also thus increase the are of to packages Triangle also Mt. the with market, in this as be Since XX% of the and areas. this the began finishes June already we expectations. our

done team. this this new on yield We a the of stabilized job expect X.X% was a cost development well to DC by realize of

and Massachusetts. the million units we units currently this we development a an year, our in a This This one transaction. small small that and cost and this quarter we construction in Seattle. we construction be in in will mid-Xs. the X% started that the XX XXX and market deal of the start cost to possible a Hill market yield budget yield existing project would Cambridge have $XX cost XXX-unit in remains first the has And about also in stabilized on one, is out, project development before projected the on it During $XX Capitol the more new million third in development asset is high project adjacent year

just the recently responsibilities [Indiscernible] time been fourth before governance having on Equity this that My environmental, open So I quite our recognized commitments everyone Q&A everyone in we at residential call listed honored a here and GRESB again our to at happen take that additional matters wanted performance. recognize the for as year for make We seriously and one we and to by year. consecutive leader. leader on that these year's helping, thanks Equity this is social global

with So call the to Q&A. that open James we’ll

Operator

[Operator from take Thank you, first Yulico Nick with today UBS. question Instructions] sir. And we’ll our

Nick Yulico

supply. start ease markets the for peak break then to worse. is still the wanted which versus was your are get this I your topic Thanks. cities to seeing view In with of I overall? are year supply down hoping your supply And impact

San Seattle I York markets think New and that City, mind? to are come couple Francisco controversial

David Neithercut

higher significantly kind is and D.C. from slightly bit this by give that San much but a with Nick, XX. X,XXX a deliveries XX but David. Diego Starting bit Okay. just identical San Seattle X,XXX, units. Los push lower. or lower, York of Boston, the XX just up higher, pretty same -- County is you higher, Francisco XX about some slightly I’ll New of market. Washington little lower higher to to at Angeles XX,XXX, XX, little more XXXX lower, Orange

with look we is clear way look with in set be competitive compete – the these to our this projects at Nick that we that at us. Just the would marketplaces those

marketplace, look defined that within as holistic us. be amount those but that, would competitive across boundary that So this we are to an entire a not so

Nick Yulico

helpful. That’s Okay.

guess, It I this growth David been putting several multifamily. of years all growth slowing revenue him and So has -- together.

stability You’ve of be year some same-store markets. would markets on or next to not? a share to driver supply revenue just this that pressure pockets be year? gone willing in is with your still next And for some There seeing what get to could whether year your year. Thanks. any earlier Hoping and you’ll thought you're a excel great next growth certain

David Neithercut

where we job the I impact difficult outsized go probably expect I then with to look Well, just would at to full say, markets is we supply employment job. And going guess us. when it's across the

the an XX% deliveries core to be I will going urban example taking Boston of Cambridge. in discussed office previously. XX% in So, of new sizable there’s the be Cambridge Facebook as a which spaces in and are announcements But

is supply absorbed expected even there be there rate. with impact elevated to So though to we minimal

of we is deliveries numbers year or XX% You next Long where know, New NoMa that year Central not deliveries Island are the Waterfront don't City presence. but are Submarket, presence, directly will and even product York both in D.C. of XX%, it's then XX% we so where with the assets. have you the our concentrated places delivery, are have really the at Riverfront when York, New XX%, much Jersey everywhere, this RBC And so West have we mean, of in in really competing large in delayed deliveries. have those a adding of Kind we Midtown no – XX% D.C. I on where look a little pretty very really, lot little is and going those deliveries like we’ll see of corridor to

rates and grab I rate through to next we’re but that’s year mean, the I drive at go on can rest the our of how looking and of and I good residence So, ability retain growth. kind our renewal think markets,

Nick Yulico

mean, just helpful. I a here. That’s follow-up Okay.

right too read everything you and you So talked you everything across supplies look for revenue just you your XXXX markets? a when get is your showing and markets early on rent it, is better growth to at now about growth look

David Neithercut

to It this not at just this give juncture, too prepared at early, we’re Nick. guidance

Nick Yulico

Thanks. Okay.

Operator

Citi. Nick hear we’ll Next from with Joseph

Nick Joseph

so? do third for more opportunities years? just the but more have And driving talk in is you think you if that, that you’re few about David, over the seeing acquisitions what you quarter, the broad are acquisitions past there, Thanks.

David Neithercut

careful Nick. Are be opportunity, use the we I’ll the No. of term more product? with seeing

opportunity. the volume the from of And down of think I wouldn't think still guess, product same I in we the seen kind that I I it’s okay. amount don't characterize year had past. any is, It’s seen of from we’ve a ago. an

kind from we’ve I that maybe that’s lot what of there’s and away done rates product, enough seen not seen getting there's there but a as anything out that valuations But for represent capital first would I is that is same time. cap some at of done backed maybe we’ve still would think suggest opportunities. getting core the

Nick Joseph

start months potential probably crack in David, its merchant with put development that to talked to and the you to had work of Is at back of to development all? were the and sort as more potential not there a serve merchant opportunity fruition an going deals Michael XX as timeframe. Bilerman lot coming or that that for was this to capital within

David Neithercut

but Well, expecting one to acquire more the be rather would just that deals might I sure, least better crack, sort marketplace deploy should to there in guess built represent oneself capital been something that recently at risk-adjusted than comments today. could I'm opportunity that not of develop that have Michael my interpreted

deal had in third two stages noted, quarter that in were we the and lease-up. as of that were what been of those Now their acquired I final completed recently

have couple executed of So we those.

think got have going relative to yields might stabilized what in I we product decent for. traded

of not might we So crack, sort flow We expected I be us of rather buying but that and sure to product opportunities I'm guess is there wasn’t by for my a anything demonstrated will look to from more XXXX. product. be two that of at -- there

Nick Joseph

Thanks. And one just follow-up. then, more

year next XXX or think for so. flow cash you talked free the million I about the of terms In

additional debt, is development, attractive today the where terms raising down acquisitions, what paying dividend. use of we the in that curious for stand most Just of

Just we today? your where thoughts stand on that

David Neithercut

considerably options and board that meeting I’d We our say, guess, with might we has free development in that decrease I Well, laid Parrell now situation Nick. September the that Mark will consider had past cash exact we have years. flow out those, several over spend all the and of

and time behalf if So, be sense, about dividend if the it best we’ll to sense, think or think our of if is comes when we makes make what address sense. make won’t it shareholders consider the buy it execution afraid on development the

Nick Joseph

Thank you.

Operator

Evercore. Next, with we’ll hear from Rich Hightower

Rich Hightower

morning Good guys. Hi.

David Neithercut

morning, Rich. Good

Rich Hightower

follow-up question quickly about Nick to York. on Yulico’s wanted New I

Just Does with outlook sort rent on your think respect ways in to York. does year supply what renters year, discovered were in perspective many agnostic submarket New for that but I view of sort of submarket you where XXXX your that next protected temper in a in you're New that of experience fairly York currently? could well terms the from be fact despite next submarket growth your

David Neithercut

being would biggest the portfolio most the – think Island move City our to be be Island our discussion willing and value with we City haven't of hunters I seen obvious out was city Long just into concern Long Well, for for reasonably Brooklyn a delivered up that of look you Brooklyn better in what's value. at east. held And further we pretty big just materialized. really us. a well is haven't then seen portion for much when And

see we if big these So continues a has of to market the year. be way new next really year chunk us the impacting this deliveries don't it disciplined

Rich Hightower

third Seattle. helpful. really That's And quickly to quarter results then in Okay. back

quarter tell growth. significant on total some the side, rent strong in growth what was revenue was in between other us going pretty but on the categories revenue those of Seattle? delta pretty in third So Can you during rent a there and growth

Mark Parrell

Mark it’s Rich, Parrell. Hey,

That physical you compute XX and the rate dry the bit know, our going as Seattle we do percent numbers the which base little for in for rental garage tenant turnover to anything occupancy include Average residential that to quarter regards numbers and a of and number background. the just amenities cleaners does else. revenue which of the as over we like. that our buildings report, So have of are retail with quarter-over-quarter X.X%, We solely than number the income. plus is retail you portfolio giving number was all

we some Seattle. the So third quarter in vacancy had in retail

issue correct fourth really that was will had that timing itself We some the stuff in also a quarter.

that residential. number fourth would've number, it the if material at have great the just would you But look it's particularly deal So X% itself reverse anything that a in on in quarter. not again and X.X will

Rich Hightower

Thanks perfect. That’s Mark.

Mark Parrell

Thank you.

Operator

We’ll move with to Street Wagner Advisors. Conor

Conor Wagner

morning. Good

David Neithercut

Good morning, Conor.

Conor Wagner

the between performance David give Santee on Oakland, the Jose? some Francisco in can on us then the San color area and you bay difference San

David Santee

Sure.

we So anything have don't in Oakland.

Conor Wagner

East Bay in I the general. mean

David Santee

Okay.

to is Bay, performance the pressure. and but So, b submarket. East in the similar. is best performing bottom South market the The all kind That very Berkeley downtown then in Bay, continues be Peninsula, between, under of

Conor Wagner

there Okay. South in then And Valley? Silicon in your Bay, San that's Jose in

David Santee

Yes.

Conor Wagner

Okay. transaction rates, in numbers lease-up you or you Is stabilization? activity, of what the on Nethercutt, is remind on? just the can me, And that that rent then putting on on David the cap that assumption are year is one forward nominal that

David Neithercut

ownership. would that XX second month the of transactions our that stabilized The be are be would forward the lease-up it period XX across acquisition. And the on

Conor Wagner

you XX period? on some rents? Or rent second in today's month is growth that that are that assuming on based And interim

David Neithercut

be place concessions, what Yes, rent the marketplace developer would side some that what that view off the of would as could in include might on XX month period. – it combination the some of on second taking be would some to there of as Depending as burn sort perhaps growth. in well either be rent offered

Conor Wagner

Thank you much. Okay, very great.

David Neithercut

You’re welcome.

Operator

Our next America. Sanabria question Bank comes from Juan with of

Juan Sanabria

and the morning. today? amount markets forms lease-up concessions you hoping quarter the Hi. concession you've was in of up of to for fourth any rent across seen could other talk or into your Good environment major the free whether step I just

David Santee

Santee. Juan, its David

it's the very it’s I chute the lease-up, so concessions We standard Seattle, like stable we with as change any and within lease-up been Francisco. consistently. and our no San of demand, through in than we seen strong month on places markets even not didn't season. giving month Brannan far concession. expectations the As portfolio come on the we very for don't pretty lease haven't there's our at Downtown that mean, had deal And I one everywhere peak least are one else out in more mean,

Juan Sanabria

date XXXX? to that say the the at fair this to in same despite in point aren't saw seeing you panic its least at we So peak supply XXXX

David Santee

Not even no, very close, stable.

Juan Sanabria

us And kind you of for new the then a just growth. trend lease a the quarter, on whole? as to are Could give fourth Okay. where date the third you of quarter and sense the throughout portfolio

David Neithercut

of last our and considering bodes could snapshot our are all rents today the rents you to same the the I entering would be very well of today versus a market X.X% Well, exposure up we’re which slower time relative across in the give about week portfolio, market of year. kind the year

Juan Sanabria

third third And during the quarter quarter churn the on throughout decelerate the given new the lease seasonality? signed

David Neithercut

guess lease that a would by of QX gave my be in numbers market but all you over I lease market discussion, remarks. prepared Well, the I

Juan Sanabria

one saw in Great. West the it reason a me, for reason expected delivery And from quick delays Thanks. for any Coast? seem the couple to any that we on of more be development one last dates, that

David Santee

its of all was that couple Seattle, maybe were issues the done lease. completing Each respect for some the back But to – or Well, had have some property our close there that push Francisco available street our on just property. units that upon you is we'd streets date some sidewalks in labor properties several them reasons. being deals. of issues I of with that sort that property in Brannan delay. very exterior but at then a did first or can which work been or XXX sufficient some getting San asset closing having not tell of back pushed sort that is some work so the to we last made done one caused two the on orders, maybe out down important of cascade those some And across because be of these one note

I what's couple assets despite happening we ask marketplace, and lot that a of and think very perfect and a back back deals a it open lot not being did – and get about your of being the quarters. performance it’s were back when or being affect So we pushed important overall a attention quarter back this performance leasing questions These of velocity think back. affect the available pushed really thing is a example and one to pushed back these a result they of pushed with pay don’t being being I why in overall of is of property but completion pushed pushed the and not will those

Juan Sanabria

you. Thank

David Santee

welcome. You’re

Operator

our Associates McGill next has Dennis question. Gilman with

Dennis McGill

guys. you, Thank Hi.

as First in for the one, the if new Sorry renewal increases missed it. on portfolio a do have rate the you whole just quarter? third I

Mark Parrell

lease The was basis lease renewal the the and portfolio poins. over for XX XX was minus

Dennis McGill

thoughts how you to increases noted the define Okay, be you. with Any Is just it how the those and as you. you level? from would maybe back at the property? When markets you qualitative what’s boundaries supply are it great. distance elaborate decreases, was different on do And or define there Thank increases said, boundaries? you Is conversation. on competitive across market a the Can you it the helpful? just

David Neithercut

almost Philadelphia the think down way waterfront outer New example some they’re little York you New Jersey into MSA I if Well, as a west if look New into statistical our bit all the an at in the the then is using to little in New up in portfolio far Manhattan, goes you and of And almost a bit Jersey, which York stops, Brooklyn. Connecticut. data use York on really further

submarket kind from a draw This on or just a deliveries around city a that could to circle within we bit So year residents price different little decided that which different new we of probably demographic and Island of focus include really the Long knowing the all year different point city. is draw boundary. a last that --

these think market anything on demand the to way conservative I kind we’re so that for that's all including lease very giving boundaries in intellectually So, we’re could everything level knowing communities, in going of five withdrawing down – footprint. impact plus the five-unit honest being we’re ourselves, our

Dennis McGill

So the or that uniform circle at is radius definition? there that local teams, each with of level the is defined

David Neithercut

Yes.

Dennis McGill

Okay.

David Neithercut

we go ahead. So, –

Dennis McGill

Okay.

later those XXXX competing you said are New city Long directly would you that higher York not increase slight your slightly Island increase or of But encompassing is your some supply being then set? is of just competitive about that that versus So areas earlier are specifically directly that York in I on with So think XX% versus assets? had the New mentioned what's the competing said like not in delivered in be XXXX. XXXX you higher,

David Neithercut

you XXXX, for New is in in XXXX thousand of couple push delayed back units it's York being that the So that probably the some units, a to increase that back moved are going from XXXX.

look these for each all units. of deliveries XX% XX,XXX is when the Now couple are, the where of literally of at XXXX I other. of say number a you concentration largest when and concentration I within blocks mean

are Long units So and predominantly in city Far those XX% and Island North XX,XXX of Brooklyn. East

Okay.

assets have probably in smaller four we Brooklyn. So

[Indiscernible] opportunity our nothing city in knowing that folks but value on customized but rent. that We of own some because have into Long could set that Long the have competitive to save city, we incorporated Island in Island

Dennis McGill

[ph] then Okay. venting to That against? just compare sense. And makes I’m

Mark Parrell

Well, I to and out above year with little started think were XX… XX the a we down now

David Neithercut

It’s about XX to…

Mark Parrell

XX XX [ph], and to yes XX XX for

Dennis McGill

luck. Okay, Good great. Thank guys. you,

Mark Parrell

with over question, points that is little And lease I’ll basis so I about lease. David month XX information amount, XX lease just, lease been our piece other you had is go XX The of lease negative gave month writing we that a to number expiring one respect which's half before next XX basis. Dennis total you it's that to to lease. over over

David Neithercut

Right.

Operator

with Sandler from Next O'Neill. over Goldfarb here Alexander

Alexander Goldfarb

said or your year something peers, opportunity to the in year portfolio those they've of Dave, from Good going this would had Is the that it is that's is morning. timing think on. until getting the going thought terms differently. maybe from some of of deliveries your where to guy. just you and that, just the Merchant, delayed deals comments Because deals up crack you back you pick next of from on lack else obviously more Merchant

to figure getting trying you're it's opportunity just the that's of your out causing deals flows literally it's So, cetera? capital et markets, it I'm in lack pushed of versus if not because seeing

David Neithercut

perhaps to to we construction it's have tsunami going it's many also I get deals been certainly the And these not, some sit expectations I'm as several to to over of two. want is of willing you Alex. some that's time. year. of of is again, stabilized, has some above, these market accretive coming some them not there brought see sure bought ever of maybe to for up our got maybe delayed, had some but it's some delayed all those will all all of because capital and some I be maybe wave guess, going institutional the that we But mean, above. May expect been implied I know I markets see them

product. today that pool opportunities been led to bought market. the and why certainly looking sure are you they, yes being couple I of sure But some acquired that we've this necessarily potential is change have horizon. to scheds that think underwritten on we flow I But that at XXXX. we we at year any I'm and about have investment believe sure look into fewer certainly more. when may certainly We're are a them this the reason more already I'm so I'm talked of will brought in don’t of just we'll we've So, not two that at than them, there and more there's any look a there's

Alexander Goldfarb

Seattle, at But teams property I gorilla or look as predominantly And in a clearly at the view facets. are there's they Amazon a seeing an even to worth tech hearing it's sense of are think and of David expansion, far Okay. just been XXX Amazon when are other much your back to that just from get guys still to what from growers companies trying from demand. sufficient if is it's going you Amazon Seattle Amazon's companies have? there mean, how sufficient that I'm or and going other employees dials all teams impact because local you're that as that your job then, the Santee, level, we spawned

David Santee

property necessarily you works to sounds I any the one it's for give to people now. we a so different could Amazon. often range like community. again the that's be influenced more wide are employers we with all that living it I measure it's to closer closer you not But every by for to is the Well, mean obviously in going but giving have of but I at guess I concerning mean

Alexander Goldfarb

the litigation news Is question. just just color more saw or there final you then item provide I the on whatever on anything I in or this And some California. can perspective? class guess Okay. action that

David Neithercut

procedure and like a of of in for because you and particularly Well, against a company and rate California. things lawsuit and was will process tell XXXX sort of procedures our complex I brought late us operating like late in payments us just this sort and standard

Alexander Goldfarb

appreciate it, thank Okay. luck. Good I you.

David Neithercut

Very welcome, Alex.

Operator

Next hear Kim from Markets. Capital BMO we'll John with

John Kim

Thanks, morning. good

David Neithercut

morning. Good

John Kim

was HQX municipal new underwriting I new in combination your Amazon because approval wondering referenced impact announcement impacted that going forward. But Seattle of its Santee investments that's David tax Seattle, the In on a and for leases. with with income

David Neithercut

anything have when always initiatives are Well, either point fees we those time. there acquisition development. we have not we underwriting involves and new this items what city new numerous or we're underwriting in update we haven’t, at really But a an been council certainly and taxes that you

David Santee

that regulations of but will want just our weren't But But markets or the about be Yes. acquire. some X% summer. at comments looking that build what our around Seattle all the which most Microsoft think we streams things to is and levels either impact kind these of will part as future it now all this time. little fees prepared we flow those of the HQX he's of of we'll and that pricing things if we with remarks, wobble had and of of citing NOI, represents Amazon about maybe the you cash specifically into we also his David's you see of take like same issues or only mentioning we consider and gorillas of did that certainly noted operating recover X% as in underwrite assets and consideration, the a from

John Kim

Okay.

just the additional But I direct the is on Amazon was there better also related. packets service. dynamic supply delivered? can maybe new clarify you to relation of question and needed wondering Next of wage was staff this in And on commentary to was discussion if that result some provide pressure, multi

Mark Parrell

Hey John, it's Mark.

mentioned we are are pressures and some To said as and us field. for reserves, prior But also this are well, there means wage we the of earnings we self-insured. hard growth insurance work on adjustments because there Some making predict. the this we just are that in that is are call medical to as very wage comp

result those of numbers, a that bit. run items through on a impact the when can the as margin So, they

estimates and comp and fair you going So, X% amount insurance medical driven reserve we the about of a workman's amount. made we're adjustments lower bit We're higher, talk up could to be X% that on And for X% number the fair than pack. at that the hard what's change that we is probably part few or in could a us just very it's for that amount by a fair kind last over that look these year, quarters. making number wrong, a when a fourth of quarter

John Kim

additional staff any Thanks, Mark. needed? commentary And on

David Neithercut

sales this buildings I were Well, residents several since were most further when manager we mean we that that see buildings tip make not in it shape. competitive then. across the to and adjustments really that one and want the have beginning three we being I felt We our run of of year, place administer added that environment renewal have staffing we that made packages. we we And to discussed programs, to appropriate think, serviced really of was that one buildings street two larger the we solely in because put and were top had resources or don’t or our targeted other from to in any used at we that our sure the of have may very ensure

our focused focused rooms on year. we to this that delivering are have We package been XX/X more on extremely employees

pressure. what employees under have it wage categorize you and on that HVACs retail, not you. to growth So, wage side, at fix are retail more on however the how refrigerators with pressure, when service office going slowdown and to that really I guys with the the you what's It's know mean want the look

where we good feel the the we So, changes right most part about stable year-to-date that for pretty now. made

John Kim

Thank you.

David Neithercut

You're welcome.

Operator

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

Drew Babin

morning. Good

David Neithercut

Good morning.

Drew Babin

Bay through maybe pushed the is year? supply next from that seeing area's year. anecdotally bay sub more our what over peers A) out to competitive what from in your what couple from little wanted than I a a in of other maybe benefitting the as the heard markets you the And with construction this accurate markets being that benefit with second Have area. ask most projects you're delays B) just system

David Santee

it David Well again, our property the know in is in but again as and our is up. out categorized Bay not I experience have mean, out just help has anything delayed East certainly the of or taking pushing something discussed another that was the fire the there large mix development But East at buyer two. we I Bay. a new not that year a seen certainly begun downtown. But would to lease in Brannan

market to coming still units market we the year. So, are to began coming we as the expected when

David Neithercut

said to just we what earlier. And reiterate Yes.

mean from did days and when being not their open Just for occupancy they XX units those not expected originally certainly does final completion, doors in because are XX, advance. projects delayed begin quote-and-quote their marketing

that. as this occupancies did impact place and release first not expected of have for open time delayed, the took we're two on on notifying that deals press the we we expected been delays That something and as been it's or not of mean in delayed quarter. its back, just pushed was because it and gets it's just experience set quote-on-quote gets in own the not it but third sort completion during was our does possible competitive were first you doors any their the So,

fact So, too the careful been we'll of as completions about have have just out being that much things of that drawing pushed example an use back.

Drew Babin

do to that? over anything with next did earlier Is this Which couple more the been discipline expectations your little rate with for you there's things to determine concessions lot of in this that year, would of How that. your I'm being depend in to maybe up that bit. much kind reigned change, of like And set. Merchant market obviously competitive should a of some thanks will and you or interest a helpful, the That's attribute the also anything quarters. treasury year creep changing expect

David Neithercut

can that not I'm rephrase maybe guess you about sure understand I I for me, Drew?

Drew Babin

correlation rates their properties short now. of on of up really to going urgency for interest questions between up your interest costs kind lease merchant The because interest the term the Sure. builders and are

David Neithercut

see. I Oh,

Okay, it. got I

with the urgency. So, to respect

of year think levels, exceed that's in rents ago original what San we the cut expectations rental the I other marketplace still people a and saw now. primarily was not Francisco from case the could

that people are levels. rent people those the today they underwrote preserve and what think to in have I that try ballpark of

in that I what to with saw may what so, very we're San achieving have explain to year disciplined Francisco relative And think respect seeing year they to a well this we And ago. be those.

Drew Babin

helpful. very you. Thank Okay, that's

David Neithercut

So, original formas. market rents just today financing it's more are relative their less where the pro and to

Drew Babin

great. Thank you. Okay,

David Neithercut

welcome. very You're

Operator

next Chao Vincent Deutsche question. with Bank has the

Vincent Chao

the of this is impact a was more labor curious Hey natural been disasters everyone. given noticeable has I just in that fall. we I saw some curious of the just any change shortages there but from regional this is hurricanes? if know post already probably that there dynamic

Mark Parrell

problem had the challenges those in last site. XXX property have of have I been that attribute We've labor delayed getting marginal across deployed have side worsening any people because our in in taxes of of of and on our not floor. heard Brannan because resources been continues. been this I so particularly San our Francisco on wide actually the construction all anyone noted challenge units is has markets

continuing just worse that case to But sing of all but hurricanes. whereas because our and continue you it shortages labor the tradesman anyone tell our suggest can't of see in kind blues I haven’t the are regard. that's heard that's we got So, to contractors the

Vincent Chao

modest maybe fourth thanks just Is third? revenue of was the getting just some guidance in out of an like there supply the pushed there really maybe into the is implied had that. that fourth of quarter mean this store quarter. some same then reflection I expected timing Okay, flourishment from just the for seem a really the from from And a that

Mark Parrell

fourth and to Mark X.X% in number could still two X.X% number our our really no not just be map thesis map we here it's buyers occupancy the that quarter, Again Parrell. in the I that means to put quarter-over-quarter that the from are there mean, anywhere and out it's out that really to we're And ago, are delays very the said deliveries moment impacting that small in are as meaningful in a we two numbers. you. changes

report to numbers or just would reported. with air we in a in generally third reasonably quarter-over-quarter but number these there expect the quarter So, we is consistent be quarter-over-quarter margin that number quarter that we the fourth

Vincent Chao

Okay, thank you.

Mark Parrell

You're welcome.

Operator

Our with Hill next Richard comes question Morgan from Stanley.

Richard Hill

good was it's this make we and tax just question related we expenses guess on that quarter? to sure, to still quick I want I saw a you Hey, the that and morning for to attribute market the Hey, guys. sharp the appeals. LA that declines can

Mark Parrell

There is and two set LA. were New the same by York appeals store markets the in impacted

Richard Hill

Understood, there now? appeals have thank markets other are And you. ongoing right you any where

Mark Parrell

a little of ongoing good faster an have of it's appeals and underwrite many every a a or than income it's But and sometimes really or in as And how taxes. happen recognized guess slower market. try estimate to We up appeals we very our as and we getting educated things and guess reduction little those wind expect. received

Richard Hill

then of tax we of growth? have your it. the combination or guide you can and you should Got how Do a benefit versus that thinking And on you provide it appeals was breakdown be noted tax the guidance of FFO about increase, NOI NOIs. appeal any a

Mark Parrell

I up better combination thought and income think same take the you it better as revenue of appeal we is then set or a about lease being can give store predominant being than and $X think store the thought. worth than non-same rest we tax the in of million

Richard Hill

it. Great, all. thank you very appreciate much. That's I

Mark Parrell

You're Rich. very welcome,

Operator

from Tayo hear we'll Next Okusanya with Jefferies.

Tayo Okusanya

great all quarter. on a Yes, first congrats for

run rate down store specifically FX was of quarter kind of and was? we expense Following-up you expect store same higher we do this know a going growth an start kind an insight on But of do giving thinking start again to regular not lot how say of things on question, it's unusual forward operating you're run these a Rich's kind basis, from keep to kind opportunity rate yet. a I for into about perspective, XX kind FX driving of how same of or

David Santee

is this Santee. David So,

XXXX. operating that a that increases kind real-estate up the I driver. through one York will big normalize are the ups add think of point basis and taxes which probably in XX% or inputs XXX-a It's tax real-estate of New step a total our of are key to our we've in XXX previously to the talked expense growth

expect lot through next our X% the we've or trying growth of to probably to obviously pressures utilities bleed else expense this talked making year a At LED add XXXX. of investments real-estate for And natural little several So, or then about is X% And that past wage We in to payroll up gas second significant prices the same everything a year. would biggest lock quarters tax is year. we we are then conservation. time, the kind of into discounts energy in lighting, year-over-year. try future group

always in think three forward, going expenses said we I all handle. all kind So, I mean of

Tayo Okusanya

Got you.

this know the talk you normalized Okay, about about? that's settlements was that share but helpful. the not part FFO of And number during legal per your I quarter could what is

David Neithercut

in us. lawyers a was resolve favorable a to construction and way That able were for Sure. defect lawsuit

can't it, So, we through and received an capitalize you it to money income account. the has go

do even we from so it exclude benefit. normalized though it's FFO And a

Tayo Okusanya

you, Thank you. very Got much.

David Neithercut

welcome. You're

Operator

Markets Capital has question. RBC our with Golladay next Wes

Wes Golladay

Hi, the for guys guys. morning Could us October give growth good yet? you new rent

David Neithercut

that we did have do not We number. No, not.

Wes Golladay

how lump Queen and -- that see color the Okay. you your would be you arriving will you hosted next do And In the particular year. bit you do at year. going together at more on or supply down? Union next as supply like a with the Anne just Do I how then Seattle agree see date looking area, CBD it mentioned of view you be trade down looking little market,

David Santee

the be CBD. in of all downtown is going in almost XXXX So to delivery

Seattle. is I mean to it in meaningful relative really year, of the that to bulk was this So this compared delivered what year reduction, CBD. pretty North a it’s is

David Neithercut

part sort areas, sort do consider we boundaries, the are they considered Hill, all Union the those competitive to going downtown of Queen are Salt Capital that of Lake Belltown, I mean -- areas conversation back our And of within all about they Anne, area. Belleview trade trade

Wes Golladay

[Indiscernible] ahead. go sorry

about go You sorry finish, that.

David Neithercut

No it’s to area that built included would, would being new we its us, since that product trade with – it area. want to that compete those consider be so a all that clear just I just markets area, in make

Wes Golladay

right. then on you call. that those say just I’d last all mentioned areas, have the guys No walked the I you sights believe

David Neithercut

Our local teams?

David Neithercut

built, being to it all certainly to and Oh every to tracking potential contemplated site examine, those be occupancy yes, that they owns all are what’s guys expect they it, can it absolutely. our now when got things, and available teams my when platforms just for be who we’ve our not online start, track teams go completed see you but information expect

Wes Golladay

Okay, thank you.

David Neithercut

very You’re welcome.

Operator

will That turn session. will the additional the Neithercut answer and Mr. conclude now for conference I question closing to comments. any over

David Neithercut

Yeah well Thanks time month. We’ll in this morning. thank a of Dallas for you next your you see everybody. lot

Operator

your participation. does today’s That conclude conference Thank call. for you

now may disconnect. You

Equity Residential (EQR) 25 Oct 172017 Q3 Earnings call transcript