EQR - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the Equity Residential 4Q 2018 Earnings Conference Call. Today’s conference is being recorded. At this time, I'd like to turn the conference over to today’s speaker. Please go ahead, sir.

Marty McKenna

Thank you, Mary. Polar Residential's thanks and full XXXX. the to joining outlook from Equity discuss year morning Vortex for and us for Good XXXX results

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

Mark Parrell

now, Marty, it’s from good degrees greetings negative XX with morning, minus you, [Sheryl] a the Thank Chicago, XX windshield. degree right

at our one spend the moments And outside the on you discussing to quarter contrary quite revenue we’re will we started FFO we the growth strong XXXX, end the original guidance of business growth and it. has pleased range quite cold, have solid as feels in a store same morning had in us with momentum delivered Although is normalized and our XXXX well fourth as this weather top well. few to

a volume of well months transaction. seasonally Now with admittedly are and December January

HQX Washington spite continued of the combined lifestyle new analogy new. that that created of and expansion than of city rural are from in the with of Long Google’s new be York XX% So location strong in demographics focused markets has Google of for desirable NOI redo high start In a wage regarding highly start Recent X city our within West announcements the of backdrop levels expansion more a to our positive of our In income HQX in job HQX. are will consumer new that markets Amazon more to XX DC economy our properties supply. in location our preference Village. and and comes miles we’re elevated a business. In New reinforcement location business supported the belief growth business for will and we’ve Reno Island are

we’ll that expect good We supply year us are yellow and conditions, turn but in creating be blink elevated our occupancy across I’m XXXX strong our within for dashboards Manelis, we’re headlines will signal. that looking up more me ahead, allow in how open aware color levels Michael our follow demand other of another for the a that our growth high also with green, markets our internal and submission Chief to we’re in keeping price at some discuss side With questions. us Chief across review I’ll give Bob and remarks FFO Operating normalized sheet that and XXXX to balance on expense guidance on by our you results it Officer the activity the Garechana, and Go with wrap and our and of cautionary to continuing call markets economic over then and will speaking going giving also Michael. after mind, the investment prepared and call to the moment our your Officer revenue markets a Financial

Michael Manelis

Thank you, Mark.

outlook begin market. I’ll for our share to XXXX of our assumptions commentary with quick each and provide and range a create XXXX that performance. So today the I’ll recap updated the I’m of midpoint going guidance

takeaways Here are few from key XXXX.

the absorption of fueled unemployment demand strong markets by good growth of supply. and job our in record First, low levels elevated aided

community, XXX which XXXX those XX.X% unit history turnover the residents turnover if of and who the which turnover points exclude and a the XXXX We lowest you experiences same reputations to online delivered highest than employees remarkable resident the to is new reported course customer equity net in moved our in basis to resulted in Second, for around in the residents our and turnover satisfaction dropped less company. XX%.

same with XX.X% lease points achieved which our achieved occupancy, X.X% revenue increases results. were stronger new growth Finally, negative store was basis all XXXX X.X% than of renewal and XX change

and embedded are to we power which the our better versus guidance to cautiously overall last remain momentum change than allows is We’ve outlook the rent strong on optimistic XXXX one a about keep sit and in year power As preliminary the us performance of with the of ago. occupancy time same our hard for ahead the last improvements Consistent still as quarter. pricing that deliver. our assumes in XXXX, pricing today work leasing during call, is in future shared with assumptions here that dashboards and lease out year renewal the teams that we expected year same today coming we’ve the fourth blink more green an based ready the but but of acknowledge modest roll us first and the new half on approximately we seasons, the

of commentary. discuss Orange that flat but or Our our markets. job supply other will the XXXX new will my the in Boston, lower and assumes the economists growth expected County markets many less expectations in lead to I’ll market and continued guidance York by to the predicted efficient In are supply New up as steady as also being be absorption in be

end bottom range to with The a renewal in peak same improvement at period in performance. store slight of our intra through both strong X.X% end occupancy of assumes power guidance XXXX guidance X.X% better and midpoint a XX occupancy of XXXX in place no the which as Our X.X% staying revenue a is leasing range leases assumes and results. in new reduction points our our basis season. revenue upper growth rents on pricing than The modest

to compared deliver revenue better in are All County as XXXX projected of markets XXXX. for except Orange Seattle our growth and to

the the year a of a in beginning new performance growth XXXX finished and in by year of month and continued our in with Today in guidance These to The Boston Boston Boston quarter Cambridge comprises be to percentage markets change the is and lease with lower season. midpoint X.X% year job. and supply. a both small deliveries achieve the favorable leasing at heading contributed supply growth onto fourth will of will X.X% XXXX, compete negative full almost each XX.X% which XX% into revenue In XXXX and half in Job is So overall market. The in X% year renewals of primarily increase. pricing which revenue supplies light. Boston. a expected Most power power. for which pricing five our accelerated high of to growing for Boston the with fourth points Only biotech should occupancy other factors quarter revenue assets our delivered improving that the our theme period XXXX X.X%. based lead modest growth later second from Boston January on is were rate in occupancy with deliver came new the very a wage with to strong seasonal trends basis let’s quarter. XX.X% move XX occupancy and renewal individual these

Our positioned opportunity. and are portfolio well local to the capture team

X.X% of growth were point a basis approximately XX.X% renewal occupancy, Moving revenue negative new in XXXX. in XXXX to XXX with New increase. concessions basis with XX% accomplished York change XX points These which using fewer also and achieved lease delivered results than

store major revenue a in contributor to year strong New same the lowest our guidance portfolio revenue achieving We outperformance albeit with was company of XXXX. the store fourth XXXX same York’s finished growth momentum with in high for end still quarter. overall the us the our

date XXXX expected The competitive lower deliveries be deliveries just a than significant impact footprint Island approximately have we seen to City operations. not continue concentrated in and New in in will with units. under be supply where our our Brooklyn Long to XX% will XX,XXX to

In to occupancies, X.X% for fact, outs strong of and and a for change continue New now monitoring to us from improve see guidance of residents foundations our in XXXX are performance been move year forwarding a leaving than new the for Long and over Island revenue less renewal our we lease X% City. Similar York. we’ve addresses our

fourth remain expect team us are discipline concessions quarter. targeted in which and XX% very level amount With pricing renewals to today, and lower continues than that allows XXXX. that the from strategic that the occupancy the XX.X% the be feel will continued local used January and the X.X% market strength We propelled estimated we at to

have So in DC definitely a the news. the about lot market all been we is hearing

do from the Our include assumptions adjust. not regarding government future any XXXX impact

to negative of are have XXXX ensure late additional new X% is anything with the initial X.X%. We outside basis was of of a being waving process impacted. in we achieved good shutdown place If occupancy, not who in do with a which fees. work experience growth DC and we shutdowns there a points any lease XXX we comprised that of few renewal change increases residents dozen on finished revenue During XX.X%

continues absorption domain deliveries in growth in national Washington average quarter above average. an remain absorption still its XXXX. at continue of phase. the to the XXXX rates the XX,XXX year in readings A class as the unemployment aid saw ending also Occupancy below the economy the performance record enough strong job We fourth strong rate the in job for a new indicate creation expected Expectations with and growth

pricing of year and occupancy as entirely have place at DC and point very occupancy a at a from forecasting renewals half through we basis and change already limited full in growth expect renewal to occupancy to comp the dashboards X.X%. lease in rent XXXX new growing in XX DC’s and our over in X.X%, power year continue is XXXX we due period is improvement of difficult law to XXXX. We’re XX.X% decline assumptions growth the and year are decline include is Today expected back came our that the slight the the be in Most a performance. where in January on revenue similar is

increases Seattle York overall lead of in plans job XXXX. for expect in Professional CBD Seattle their continue we XXXX accomplished announce delivered sectors the in negative Amazon is next continue and lease the to areas completions impact expected and points from as than despite Bay from more services King DC. informational increase of in to This saw within the business growth. XXX In into into year East XXXX. over XX% QX just shift supply units expected over over revenue is X.X% new to just X.X%. Coast, year we basis West XX.X% of to growth XXXX for and deliveries of QX County new New expansions hiring occupancy, X,XXX Suburban Even to Moving and new full companies XXXX. and way the still achieved change Major in to Seattle the renewal was area. see with expanding

In the fact, open they had while. which is Seattle a highest last we’ve week in X,XXX over positions in seen

some the terms the well of being of units located submarket Redmond In our Bellevue will competitive X,XXX delivered property. deliveries, with in be only Bay directly East the

and revenue addition offset X% but of the expect lease will renewal year. both And of market growth be healthy some saw almost we’ve submarket. relief still growth XXXX second we and change half lower this impact a significantly of Seattle In we in in In experience the by our XXXX from rate. back a slowdown. occupancy slight XXXX income reflects see improvement in to guidance that that Downtown in growth supply in should of Overall, the XX% new our slow which half

occupied renewals at We’re today January at X%. XX.X% with

Next San Francisco. is up

growth still for X.X% that In land demonstrated and achieved basis leases a this broader XXXX occupancy, but be growth, Deliveries San revenue the in deliveries continue there shift uncertainty Oakland to small is are of been surrounding in enjoy Francisco consistent that IPOs acquisitions headlines to growth stream Submarket. come companies Bay XX to the viewer XXXX to Francisco new the online will a economic from renewal XX in strong the will expected and year. point only tempered area. full phase. major impact from year of XXXX new the about in more at and the quarter and support job change XXXX, and Oakland. The San in higher of expectation second Our job expected increase. East future the concentration majority office a delivered and has expansion markets albeit positive market lease deliveries of There To-date third with is XX% daily X.X

We this Francisco Oakland impact will supply in new be overall of monitoring and market. market the San the

Today Our growth XXXX of increases XX.X% new we’re guidance and in achieved is similar renewal at on renewal change as revenue achieved growth X.X% X.X%. XXXX. lease we January occupied occupancy, built very with

was positive to XXXX achieved XXX down X.X% point with growth lease renewal occupancy, X.X% new increases. was this and Moving basis achieved where change XX.X% revenue our Angeles, Los

create deliveries into XX,XXX On QX XXXX our shifting the XXXX delivery to front X,XXX continue forecast projects LA. brings supply XX approximately project over in labor from delays early shortages resulting of units completion. from in XXXX at in units just This

As I in XXXX is being trend submarket. last XXXX. there total with and be Fernando entertainment quarter online growth in most San and quickly is in we expected Valley units has in will the period year materially XXXX deliveries it LA that two will strong West continue combined concentrations the West In LA. this mentioned supply will area. geographical likely content the likely downtown the pushed new The over huge absorb a of creating momentum this changed see The is some into and not

expected, for demonstrate projecting the occupancy and is core achieved submarkets by of slightly the reduction in recognizing occupancy market the in a of and as in new with is from and being with the new January renewals in strong the total XX.X% at starting very occupancy weaker off the continue well to offset primarily is should for in is Angeles performing little absorption. here few second San lower half but We’re potential demand today Valley LA Sitting the aid already pressure the X.X% than lease overall growth law. I in XXXX The increases that and renewal XXXX supply to a is continues place market in overall same In which Los on rent change gains the revenue year which mentioned. X.X%. Fernando

basis which X.X%. to positive Moving and at XX.X% we XX at lease change comprised achieved points increases of finished Orange with County, new XXXX growth was revenue renewal X.X% occupancy,

X.X%. X.X% expected to projected for deliveries Our be but to very a decrease renewals. positive to new lease impact And a XXXX Overall, renewal The slight revenue primarily and at the us growth outlook increases. units growth a in achieved lower X.X% but XXXX are last should January we’re less expected, We at about is positive. Job but along comprised increases and which year actual the basis X.X%. achieved Diego. just in XX occupancy, very last and not similar Today in change least, lease occupied be XXXX due be the finished occupancy was from to competitive with X,XXX is XX.X% increase San of assigned points lower recognizing to basis the point with XXXX decline revenue standpoint under results. will XXX Orange change XX.X% from growth similar impact growth on of be overall to renewal expectations XXXX XXXX. remains appears new lease of slowing with County have

rent and being and slightly with already new gains increases which renewals growth occupancy similar is on expected X,XXX law. for the to outlook offset locations. the change will on units in Deliveries by X.X% slightly higher to XXXX lower us lease same be Our to very impact and revenue the to place with XXXX our are pressure similar be the at with projection be on is downtown projected than

achieved are Diego January occupied As X.X%. and San of is today renewal increases in XX.X%

the and in this and same rent XXXX Denver our our expectation. There our now our with amazing. not the time is we not was tell that Denver month. employees all Equity huge is part guidance of is could metric to reenter you I in added pool market of were in market residents a one Now to did another that range. customer in included commitment property less right the close reflected our satisfaction aid residential. is The out performing shut store

and We’re XXXX proud in so better. being forward XXXX of their to look accomplishments we even

momentum to you. We great off start. we’re have strong and a Thank

Bob Garechana

XXXX and discussion market. for remarks our Michael. with expenses a round of This sheet few my to Thanks normalized store FFO. out a capital guidance discuss minutes I’ll balance our morning take I’ll and assumptions brief same

quarter quarter on X.X% In quarter line the us same X.X% our grew call. fourth Before of store in expenses from I grew and the putting XXXX. the a grew with revenue NOI X.X%, full year operating third comments couple quick begin expectations our generally

For is expectation. $X.XX our normalized of penny midpoint FFO the of which we a delivered shy

As in area D.C. mentioned our we in of release is driven the primarily negative properties higher by portfolio. this casualty at several by than impact anticipated the damage driven rainstorm Washington, losses

store experienced expenses and low growth period in XXXX. give part maintenance for me very driven in comparable or more some relatively we and high numbers same specific Regarding repairs by the expense XXXX insurance year-over-year color. in let negative are The

example, and For Insurance quarter XXXX all X.X% in grew same XXXX the fourth for for the repairs for was XXXX. expense same of X.X% the period to period only maintenance compared and of negative.

payroll, as is in by on reserves related past. throughout onsite quarter we’ve reserve like discussed fourth payroll payroll Moving the over the which to was typical medical various the impacted in

XXXX guidance. onto Now

full XXXX between come X.X% same major expense For expenses categories. XX% and three store expect from we expense our year same growth store of X.X%.

and that burn-off taxes So relative of that our for a refunds the on are great anticipate are that let XXX-a New for various discussed the Also XX% of we've in growth in of growth. store the XXXX you in appealed me to fewer subject program At because success calls. properties drive contributing estimate York currently period. unfold are property stages we little had to to certain and abatement overall prior same year expenses, XXXX. We XXXX walk through anticipated that currently we XXXX of over

and second very X.XX% competitive Many we elevated In competing were focus residence to between which tax for continue XXXX to skilled X.XX%. supply environment. strong As our result, expect markets on highly our job our category, we retaining Michael is experiencing payroll, colleagues growth a a of factor That largest a mentioned coupled general we would employee. Mark on experience us real-estate as not front with means but and employment with only up also site. continue on-site

for our XXXX is expectations the between As such, payroll and growth on full-year for X% X%.

should last posted rate our the couple increase our a XXXX. of of reduce Finally, relative Utility growth factors major expected XXXX in we X.X% benefit in to category utility. that from

store we in XXXX, higher trash shouldn’t usual in growth in and Southern First, California XXXX. repeat in experience that than itself expense

of weather XXXX extreme half very some not XXXX the did experience in we forecast. northeast we in include our the first Secondly, that in

in a weather forecasting guidance of We the business our run traditional but are does assume rate. more

from we along other benefit contract to in extent. investment Finally, continue electricity our purchase with lighting gas initiatives this to our on-road for generation and LED manage and

in a As to we utility result, X%. grow X% and XXXX, expense expect between

share expected assumptions the Our in guidance same million from XXXX, acquisition XXXX anticipated Michael between per $X.XX $X.XX normalized offset include drivers our the change share FFO to outlined. and Major just $X.XX of which properties for involve this and store XXXX is per in $XX FFO midpoint the higher up A based leased from which NOI store activity same $X.XX generate and revenue per range contribution our properties timing from and and XXXX expense and of I that per from contribution expense. on in by share. A normalized disposition contribution interest in $X.XX XXXX XXXX. at for our NOI to $X.XX $X.XX a $X.XX guidance share our

elevated relative to we to negative activity, continue in XXXX. Final expectation before balance refinancing average is to to XXXX note turning Mark. from While This benefit the back sheet we driving on short-term a anticipate remain do impact. it on favorable rates

the one position history in industry. the the and the financial company's remains strongest REIT Our in of strongest

debt. retired not million issued higher we in $X coupon we During in secured unsecured XXXX, billion over $XXX only bonds,

rates this now or to and on either We bond. ever ample the unsecured Our at over one secured green NOI of in recredit XX-year creating were encumbrance opportunistically is capacity issue unsecured the a market. early the year lowest spreads an the first issued XX% multifamily access bond

continue is attractively profit. undertake to green that being have to balancing bond plan of and and an capital, reflection a long-term addition we projects sustainable many piece and In people priced it of the the initiatives

XXXX, $XXX XXXX debt million or par XXXX. it's either anticipate but and prepayable issuing in For at between refinance $XXX in million XXXX capital we to matures in that matures debt in

capital. development entirely access hold We manageable full-spectrum are cash anticipate spend very and being that leading from free we capacity flow to funded industry and that the of

either we issue plenty just I As to or debt secured also have capacity of capital. mentioned, unsecured

for self. a the our while, borrowers unsecured For also of that, lower high-quality between quite markets in I'll first seen convergence pricing we've time turn the to a and Mark. back it With levered secured like

Mark Parrell

Bob. Thanks,

relatively fourth quarter Just the acquired We had a we properties. release. transactions busy front. had January, on as you investment with a saw three quickly quiet last on night's no We

neighborhood the XXX.X rent with rate is was to in We rate portion Golden price at a than properties invested about Denver XX X% XXXX, a property about acquired see of cap on of continued in XXX a X.X% three Denver. current stabilized. or capital unit We now cap XX% is downtown at the million a We our less replacement a $XXX property Denver. discount it newly have completed cost. We walk current which in is once million roll fully at the and X.X% for a This as slightly acquisition score near constructed Triangle and the occupied.

we produce long-term presence will reflect in in a underwriting to We returns. significant to our near-term new us similar expand opportunities Denver also challenge opportunity well-located the do this current at We that right an discounts do location, to replacement supply, to buy many modest and that Denver's look assets continue both to markets, we'll costs. in for to fundamentals we operating not for that think as product our excellent experiencing is

of in parks, property distance cap at acquisition unit's this is and XX The at of this of rate it amenity. and other employers, for score able million tremendous properties were X.X%. We to acquire a like $XX.X major South asset over location walk the discount has replacement to XXXX to acquired Lake walking cost. constructed in attractive we many a which Seattle. neighborhood; XXX current acquired We was property Union in Moving a an

added XXX public a also of unit in acquired Hook our XX The X.X%. We access, of neighborhood Jersey $XX the New of easy portfolio of at acquisition City; transportation access, property an property acquisition York into metro a much million Paulus Manhattan. desirable to the area walk rate score with cap property for the we has and

the On disposition of I quarter. we're late of transaction sale We're of in in includes Manhattan an side, disposing reported process in this expected is in on or second the asset closed. that once closing this was assets. This quarter have the a more this report several press, in the to

for guidance $XXX given of in have XXXX. million million and We acquisitions $XXX of dispositions

attractive You expect as and quality we acquisition pruning new our as investment from holding in continues continue both steady can our our own apartment rates cap selected in there to markets be demand us development are Overall, in opportunities assets. markets. and to portfolio for values perspective find high

which of street XXXK front, fourth the in yoke development Washington at we On a D.C. stabilized of to expect our completed the quarter property X.X%. development we a during deliver

also our fourth yield Well begin? a let's the stabilized not if Q&A any We Seattle session. did the in at Operator, quarter. now, you We could developments of start X.X%. go Cascade to development in

Operator

first from ahead. Nick Instructions] Scotiabank. question Yulico Thank [Operator We'll of you. Please take our go

Unidentified Analyst

like quarter in one it to theme the to the first to shifted level big to we morning. a market continue another is with is that Trenter remarks; Nick. color more This Hi, being of another. good for prepared all supply Kind that's and year great. here from one of picture hear Thanks question related your to Hill

talking level a while supply. peak for So, deal pushed on XXXX it And for of we appreciate the date, now been seems analysis based you But further the on to the of supply and it as pushed internal new be industry this national of deliveries we've gets about cycle. level. end

it when think markets? see do we supply your you as peak truly pertains to the So,

Mark Parrell

Trent, it's thanks Mark question. for Hey that Parrell,

have So, for numbers conversation every we We the highest have now year. the year. to it do right always this seem seems that supply

But XX,XXX for fully or now moves. that internal because XX% estimates we our give-or-take are of expect it units. to So, always XX% move XXXX

expect quarter. think Labor rents our really the and lower on XX. as our land the So on pressure little again, numbers quickly developers we at in a something as be cost, time. that, a pressure prices declined are growing point. will costs. XXXX that to can't significant materials juncture later update is our now putting again, growing do construction in pass But this not we this think occur at we see we When some to really I we move we see it point guess have is see but comes not at all costs, continued cost that 'XX. point we We and will just decline, to and numbers that than would in see on an construction Right over we at bit see do very this that 'XX lower also

Unidentified Analyst

would you quick dilutive to mid-X% would your that low-X% be healthy It range dispositions. range. which something like Chelsea a something Okay, amount and you've a looks and follow-up have a XX announced already of And rates in it you guidance. rate just the assume the asset we cap cap spread between pending in point And sale you very acquisitions much. thank relating acquisitions have basis

details question what get So, to that, delude I on accretive you buy guess the flip is just you. would yourself being thank from to some if are dynamic this planning to that

Mark Parrell

Trent. Sure,

Bob Garechana

Yes, the our you our thank is you. in that's guidance All estimate. we number do give with

cap are sell buy year. but identified the what higher know point rate actually of going So, we've mean this for going have to will there it assets up be exactly other sale At that do and we don’t on would because we end an we're during somewhat that assets. doesn't accretive trade

in there And on impact I between. dilutive. almost could think this relatively just really what because as the guess be early So, buying be the we points basis I was year's what. about going in points a terms these accretive, small in exactly no is don’t almost pretty of is that margin Mean, or XX it's which could matter equal really to XX XXXX tell and numbers of timing slightly it's basis you accretive you trades probability we're it's asked, minimal. Because my

Unidentified Analyst

All rightt, the thank you taking very much. for questions. Thanks

Bob Garechana

you. Thank

Operator

now Nick ahead. Citi. Joseph go We of next will our Please question take from

Nick Joseph

Thanks. your years high-end In guidance the you've you conservative revenue that initial few the ultimately initial last same been with pretty of at expectations. store

drive basic tightly So, range? set have low-end of here guidance. the potential markets will high-end is And largest the the variants first change or then with a which that maybe

Mark Parrell

It's Parrell, split this will and of Manelis one up. kind

top-down we sort and of process, terms our changing in a both So, in sort no. process is our the of number. arrived and process consensus of up the at anything bottoms

not same. assets negative personnel, So, and there's specific on. talked is field the the process our We going positive often

New the that property, nature. they supply looking at sort numbers, a house growth, we're a supply renovation exact top job impact, the Or we're where at of of know the maybe of things thinking kind the I'll consensus. the of the sort how speak that. and merged year market let about of prior reach Michael to markets and we two with and moved those positive together

Michael Manelis

Yes.

that I'm sitting out if performs because the weight XX% points guess, that San think Francisco revenue of kind you I are core which to thinking and to big there's overall in performs one L.A. into of of driving would I So, obviously our under New have four kind that so, this start those going either more XX% those are D.C., markets to company. the any of today. focal is one tell about way just markets be York, here just or

great a right. start, we're up think to I

got San the we're feel and momentum with but very outperform Boston, York of state kind again good towards and left just but Francisco early in. You got we we New

and any I suggest to of D.C. supply But now, absorption that's think for we're the this watching downside going L.A. to as projections. could impact anything signs seeing softening and right of our if not occurring. which on we're the of just

Nick Joseph

Thanks.

Oakland Do So, the pull the in to toward then will somewhere Island be coming think do New seen expect it new from to more with or supply York that muted what Francisco Long City? in you with Bay. East product you've you San demand

Michael Manelis

that a and that's I at. we're great be going think question looking something to obviously that's

go because to is I today. have different does which think quarter that yes Long it's bit to on a last said Island the City even than areas Oakland little I

we're relationship to of will with San to then next start than And that that watch absorb going to XX% to of got come I what My bigger kind have to little to just deals, it see. watch, units it's box just Francisco. to but more we'll the the probably So, we City. from the start to we've be bit happens think Francisco. out drop XX% price deals, their first several do see but is guess a the free one in to Long Island of to ability interesting to see It's got established something XXX going leasing's discounted if they San in them somewhere rents weeks

Nick Joseph

Thanks.

Operator

Please will ahead. question of take America. next our from Bank of We go Jeffrey Spector now

Jeffrey Spector

stepping morning. you, back Thank Mark, results good a minute. just from for

balance the strategy want but say I do confirm any wanting the possibly And you're at point? in to to even market change potential you've see CEO, whether or that more standpoint, just development, it from increasing Now this there even less it's a sheet is exposure. leverage been anything development

Mark Parrell

Jeff. been question, at the years for the and the for an was company CFO XX. XX Thanks I've

strategy. markets we I then we'll went Denver, the last we under talked we think about into more is about at always back and of invested as continue mean continue undoubtedly undermine, in the in as this I we'll will different it can strategy changed year, telegraphed over assets types it, we we In our and buy that, we time David's to. So, fully time helm we markets. always did

terms evolutionary but will this case. of now at process that that the that sort would in not of that in I contemplating board the changes point Now continue dramatic are think some

Jeffrey Spector

going an when your thanks. seen great, in supply comparison saying Oakland, follow-ups. on impact Oakland historically in you there's not was to that changes a going ask past given Oakland? good have just in a look or San On the to new quick we really just portfolio then, the in Okay two I And it's are Fran

David Neithercut

Yes, I so. think

coming think some online. I wait this you high-end see, stuff is got supply concentrated to and new

a in this that really I don’t impact the ability period the absorb. to online couple touch past the they've have concentration of an know and quarter I So, all that of ever coming wave really had in think

Mark Parrell

know country; in We amount This XXXX+ mean units the can see housing the I I is just bit, area Mark. do of the least a housing. needs in And has market being little I add it that that maybe a Jeff, Bay it's if delivered. more into general, to

for So, cause cause the our in or much demand the run temporary look assets across in of have market than some few the it's Bay readily area not might it and product blip. this disability this blip frankly whatever where supplied each long operations incredible permanent It's there's will under little this more so just at just might the we to or because a San Francisco housing. or in don’t assets day, as we that even very an do absorb

Jeffrey Spector

on hosted my City, Okay, then, was a more follow-up And expected. still you're last week last York just expecting We decline that we XX% or 'XX of is in we a call than and supply commented New down heard 'XX. you supply thanks. broke

decrease slippage with York into New estimate. like XX% you're decline So, in City that supply. sounds we 'XX the weren’t would sure of sticking But the it

Mark Parrell

Yes.

So, actually 'XX seen we look we significant not all. have when I thought where to change be, really going was at back a at

didn’t And is So, footprint. the about maybe in units expected but landscape we see that New as units small one our competitive in of of came think we two look XX,XXX slippage the that smaller, again, kind we York. units really XXXX kind unit's against

Jeffrey Spector

Great. Thanks, guys.

Mark Parrell

you. Thank

Operator

Please John go Capital Markets. our We from of ahead. Kim take now BMO will next question

John Kim

year, earn-in you're look commentary, a will at from Based seeing commentary the revenue be But appear biggest looks you. achieving guidance in the you rates than be from growth just strong. does to improvement same down. store coming wondering coming from Thank some more constant when not on that could that last XXXX your I'm it this supply just if level in your on other New like market it you provide in lease York.

Mark Parrell

basis year. would an we earn-in last York I this points time with I than contribute and New today at Well, say perspective did stronger from better growth XX guess

some but range saying half more the for back got to We've than got continue, embedded in have time. do maybe that power that momentum like out were of And pricing it's if growth and in or demonstrated to we So, now. momentum the rent we've wall good right power. from year the leases that we're think pricing just there. a can we've pricing I It's we be long not going had power this fine with put robust

John Kim

fourth was I had case. in New want that prior momentum York? make versus to strong You the think sure quarter year guidance the I your just in

Mark Parrell

from everything. renewal; both a from a demand; occupancy; an Yes, from

John Kim

in it's government rents waiving was is wanted to over? understood when late recognition your government make some Okay. be when will in And expectation shut fully that is workers fees we on just down a Also and on tenant D.C. paying there late commentary revenue current your that sure the a also, primarily rent.

Bob Garechana

Yes.

So, recognition revenue is not I'll waiving the real take quick late on fee.

the So, fee late one we due. recognize

that revenues basis. we not So, like recognize through on it. recommend we cash Obviously, would collect almost it, didn’t we a

Mark Parrell

little give to help an John, you people. talking just of magnitude, to So, here two dozen order we're you a about and

going get so we're So, it. about We them. concerned we're not to those fees, late not waive

true. undoubtedly that's So,

middle of didn’t have gets the night, recognize of of the aren’t offs of we the people portfolio, have later is charge that it lot a the you couple portfolio accounts We've that fees, advantages the of off. a low don’t and one they you a paid, the very a rent. if do through out portfolio this didn’t to So, where months in write process that we we lot where have move pay people all have written of shift a late in the do revenue

write the this portfolio So, off minimist. effectively

this So, I a as don’t expect result of incident. that change recent

John Kim

in work. knowledge that But will they the be workers rents caught go once back your they up to to

Mark Parrell

even shutdowns is up. if are there in a up a be retro And to pay Yes, point position the there caught additional is out I guess that that get to residence nothing going there won't nonetheless. there not at catch be therefore, this would back suggest that

Bob Garechana

Yes.

but get We have, all paper, between for getting they that of workers they're I expect loading, rent. were money there we'll the are that get the family they and members the that the readings are and money you'll just bid then kind know that

John Kim

okay thank it, Got you.

Bob Garechana

Thank you.

Operator

go take next our We Sakwa from ISI. ahead. will Please Steve now of question Evercore

Steve Sakwa

just recession? do do on the or touch of underwriting just you how guys today, the you think your want to unlevered about late investment a sort IR's market maybe of are and on just in cycle how down the put you Thanks. comments that turn, possible think of acquisitions do and I get you guys sort about kind next in

Mark Parrell

hard, science up we're the of about give how we the know end When do as on bidding like it's deal. you're you underwrite This select of bit more as I'll for every talking in few got visibility there. really the we good looking the this people flavor We feel on little Mark. of we have question. next at ground Thanks are things. oneself. Hey Steve, is thinking years, revenue a group you about a we assumptions much

you of years years what's bought effectively then there that few a because and six going term, really near-term is generally in over balance for have will later near and that some a growth you'll in think is ago, in couple differently. we property revenue going on. from things have time on happens we for the no ground to know is Well, few points our in it market, at the example the themselves from your you weeks we concessions. Denver And assumed in just the what year the we next with understand competition, asset teams. market know a investment happen management knowledge that So, We whatever

estimate. long-term definitely of is about stuff cap you five what a might to be product. sort widening in feel for maybe an we're cap revenue rise. end depending, in but rate at how average Going revert every we framework some were like Denver, be a and us see forward, much sort then you'd That as that in your your because rate thought buying as seven which buying is growth going see look the is give buying generally on sale rate, in the at to process product you're the you then if high the the market prospects. we're garden for somewhere And lot markets We growth you you cap of a revenue of our of just your who again don’t the picking reversing

Steve Sakwa

There years you X% of real two, nationally isn’t market or and bounce sort basically? just kind just no downturn that down of four within like of strong could back So, look effective a X% in or through a out. kind three, X%, a

Mark Parrell

Yes period to going accomplish. long we Well, be you if well, mean just growth number I and look a XXX that. of in for said over the the you is if think revenue market through you time.

over You seven that in out. year averages may have just underestimated in year estimated kind and you of and it four

based having stuff, again near these having knowing tight in good term we markets, a how performing, real feel. it's underwrite product So, on the

it's out, a little effect. bit further averaging an go you As more of

Steve Sakwa

Where then, been five And that just core you one. or unlevered today the have the terms in markets? buying of We're but things you've or a market is would of you've say the and IRR's. things underwritten you're six on kind

Mark Parrell

deals sevens but stuff the even we we're we higher rate. been being market sixes, the maybe the do the off sixes, go been we've or high again trades in maybe maybe the some Yes. Denver, the buying product but but and In of at unlevered we purchase in think is little a And fives stuff Again, five in by of see has are we're in rate skewed wouldn’t seeing terms that the the IRRs cap sevenths. those giving the plan. in bit IRR's

Steve Sakwa

you on of sites you years? couple is there And Obviously, land over then, about lastly sort the the development. for development starts or new do kind down pipeline think just of dwindling of new and next how

Mark Parrell

question. that for Thanks Yes.

with were the for as development on busy But a We couple will for lot we wasn’t back as lot, So, really out that the place. Steve plays something value now you so the kind where other we're do But these it and do do willing think is, parking way for most still risk. constantly right of be company. years We now, kind land coast and but the term don't saw have will are a to should and an development in that it I a that we pipeline the or things long-term team there. I folks couple development about the think parking as that we land risk. flattened it in terrific sites; of we guess already process. worth more of rents west capital have there the see saw to about see really we thinking great it's on to sure completed just We creator long about. properties will think expect a think that a our the us are we yields I our very do allocation think a development. of sites ago garage time think it been We've mostly own. year I a Right the decision lucrative do about will place accelerate as for the or these made we as take think property a densification we do the go company. opportunity up in we I adjacent will few accept of where a had mix there we costs part run, we part, you a do we to and don't take

units. adding are We

not. what We and new are building adding

Steve Sakwa

Okay, And just Bob. quick for then one

of in ten that pricing guidance extent that's deal Just think do to about and kind and you on were we the a the debt perspective your timing think year you to debt a where say of to is? that’s new expiring come from should this how market that with kind year new just

Bob Garechana

a It's on timing. quick real Yes. the

are that secured that of unsecured day that's of or par components And mentioned maturing I two them that are is pre-payable at debt the par. think to the is one kind another of midyear, pre-payable either swap So bond its floating, end one floating. that deal at of I

like opportunity if levered timing and I other. threads I bit applies go because mentioned comments bit secured a to mid-ish a are X of line, tight my be under From so presented would the a probably low we for this earlier close. kind little is etcetera. I year could them a off I say as pretty from that's and the take secured opportunistic modeling for borrowers standpoint the to overall probably market obviously plan. that's So We think the pricing little midyear unsecured perspective, would probably pretty us each and overall. are in say But

call here here, it area that of sitting either treasury kind and So for one. XXX XXX

Steve Sakwa

thanks Great, much. very

Mark Parrell

Thanks Steve.

Operator

please Babin next go Baird, ahead. of now question from We take our will Drew

Drew Babin

Hi, good morning.

Mark Parrell

morning. Good

Drew Babin

towards acceleration spread earn and markets potential spread average I assuming – the with looking or far on on are for most that past are your I markets of leasing deceleration? you moving or improvement. and derivative incremental assuming peak mean some guess, continued more certain assumptions Moving are second season, markets and as into kind XXXX new your of renewal as leasing roughly line XX are in there the

Michael Manelis

say those I went I lease probably stands what each and No, would say overall out were, improvement in the kind as but through assumptions. have significant we where new to change of assumptions York market I in would clearly New

a March have would in So pricing of rest where I as of will you are new think assumptions improvement the those power change closer to have And the our get existing markets we just to of markets kind holding some lease lease well. in the an point is on the the going and see are quarter I you deck, new expectations I the investor as of kind I and is say as to kind we towards generate the close, layout where probably little as presentation get renewal. bit Boston But occupancy rest the by improvement ones of pricing about in momentum. really that are having a change line geared power Those pretty talk well.

Drew Babin

reflect were why is that's expense that Thank on curious difficult in kind were going of going occurring? how maintenance accounting Is ones unit about X% capitalized noticed in the I younger relatively the helpful. comps? repair replacements being capitalized the costs any of of talk building bifurcation the you high and portfolio? you, year-over-year XXXX. expenses about Just are the per some talk kind down Does XXXX side? and about that Can down there it while off you the different improvements Can up?

Mark Parrell

Drew, it's Mark.

that that's So at specifically so nature. buildings, unit when you of elevators things look systems conditioning of top air improvements, why replacements large building scale building on improvements are and

as some much these some switch was that. is store. really of right. you. There additional into there tell like you things slight But would as There a hit and I between same there just what sort to big happened. that expenses up falling So It quite wasn't interplay that project isn't capitalized is That's to non that interplay do otherwise end when relating a store same damage expense.

of that really more was it. So

Michael Manelis

changed front nothing all. accounting on the or policy capitalization So at

Drew Babin

Okay.

So anything of decline the X% Is years? just what that? of in the say sort that over asset you Is year-over-year. there do kind mix behind

Mark Parrell

in few on big projects, big few window sighting generally a own. are we a Those rise or Sure. cases deals replacements mid units

slide. just So those

Just get in done they'll year. move next down bit a and little the

than anything chunky big some timing So of projects it's more really just else. more about

Drew Babin

you And of that me capital reaching projects would or to you and projects think them potentially more talking on potential inventory income rents kind just probably considering for little any we're some there housing public one that target housing type companies or the do or partnering kind anything any these EQR out other ours are that early low them a some on deliver there's units reach REITs say that headlines about to then, to Has is partner to hoping Do out obviously process? kind of in talk front in might been maybe have of medium there developing to tech affordable bit larger of these and with other kind more of of too the currently kind there might the too customer? cases that been Is increase companies about? of in projects. it

Mark Parrell

mean bay I we programs at in I early this that lot markets We've we stuff have of product. know don’t run as too certainly highly some affordable characterize detail own would area these before. very our We on affordable point. but product people it's a thinking those I'm

units the whole as have throughout portfolio affordable We well.

the So returns our if we make in points all ability price think markets have to types the of I sense. manage

react be and we'd don't know So, sure to I in I'm guess I to interested that enough yet. possibly it just but

Drew Babin

that's me. Thank Great, you. all from

Operator

[Operator Instructions] go question next now Stevenson will from please We our Rob ahead. Janney, take of

Rob Stevenson

there or other for expectation the in implemented you XXXX, XX? pet any application your What's all guys. morning ones that recently and new fee Good have stuff will are that implement growth and guys

Mark Parrell

income it's So kind now guidance I would X% through guessing where from the say we we did with I kind other the in initiative lines right see many I'll which going of tell look you at if think ago. parking line standpoint. of look I'm we an is years a these hard

Our parking up X to parking revenue in grew is We XXXX. million by million XX or X%. actually

some call. understand of of map have this still asset The do where bit the kind a have it's We anything like strategic review that don't asset I front and but every the in to the have talking mean leases in I'm some have some of But fee not basically single if little renewals, that's about room us. we a to income levers do think coming that road get you changes of laid in very of that try opportunities, optimize aware new I there's out you some by side on the turnover, opportunities to rest for left fees of worth where the kind to on increase. of it's to of just significant income. parking some property takes

Rob Stevenson

And then expected yields the what the development in current the pipeline? three are on stabilized properties

Mark Parrell

second with me bear here. for Sure a

third So XX. X square End XXX XXXX for West and X Madison for for East

Rob Stevenson

normalized the REIT $X.XX this the guidance between and And for gap what's FFO year?

Michael Manelis

Yes.

XXXX sorry? XXXX, or So for

Rob Stevenson

the XX, guidance. For

Michael Manelis

Yes.

or comment. XX a the expect biggest guidance conjunction write write plan the very The an Mark or have a to the item tax-exempt for biggest we is and on unamortized there's alluded So to bond in in noted incur discount of the a we issue on back. that his anticipated the disposition disclosure to off would in that page may off,

Mark Parrell

have non-cash a we so it's ago off. cost charge long a when asset this Yes, so time it's to write bought Rob, we it we and incurred

and after through version that's runs the EPS normalized versions that and the biggest our REIT of FFO item. So

Rob Stevenson

the given that something I that out And the there there what's how formal I but been the put think you to financing does the of through way hasn't space in have about that guys about that – you thinking that year? and/or they in says sort any the GSTs ability know for that the any of the dispositions Mark, plan and guys terms impact guys administration of remainder with yet of the do timing you mean

Michael Manelis

can Yes, quick I'll sure I'm take Mark it on this as real you take back and well.

have whose of the recently most in and So been over it's the privatization XX of more of They rumors. were specifically kind we're large question to had end your seen prior the previously. reports it's of regulator to operating the were the with the that what caps moment at volumes familiar and is we see the They very XXXX terms term media out page in which you usual. production of What and kind kind same say of similar as of right in of guys it's no think kind I as disruption GSE business to -- the all the on their they change answering very late I'll XXXX. at put the expired

is to issue unclear. So would single-family would of reform a in GST who say is political our would less kind that or impacted for both and of position negatively reform what for I also overall. so kind I it say impacted we certainly for probably impact knows kind country From us bigger I'd but by reasons. XX is less I right, be think two the of specific drive we will standpoint say financing longer-term operations this kind wouldn't anything expect guess their GST I or of

The to as it first relates funding ourselves.

loans very country doing to have strong strong to my the loan basically GSTs. underwrite access bank private very market We as their refinancing the to GSTs I whether mean the the reliant for construction take capital it's construction for relative to in a out or assets in alluded comment to is on every I particularly stabilized when which

from kind benefit having direct standpoint we of a access. So of this all

as GSP would what secured don't had is the ago. suburban probably secured have core types very well thing The other the attractive our I today than say to it's so have more on that of large-scale lender we the is kind portfolio other debt front a stuff product might of lot we ten years

Mark Parrell

that product Yes to we financed the really but of ago a Florida suburban beaten point thought death the time GST to without want the susceptible lot the Rob market. I of is got this this thought that's product was only risk some more was of some just these rid GST Denver including stuff dispositions but emphasize we and to we fear

assets don't us finance are plans. Most free feel it's is buyers. we clear but financing you the and later it who point our buying not market changing may not buy and people They them. from so and cash to at are some So it relevant particularly

Rob Stevenson

warm. Stay guys. Thanks

Mark Parrell

you. Thank Yes.

Operator

next from Please now go of will take Sandler ahead. our Alexander Goldfarb We O’Neill. question

Alexander Goldfarb

I temperatures a that assets attractive now. the look given and you maybe Florida guess Thank little

what operating wages expenses can with first guys are sustained of for weigh that to not questions, seems had is. taxes a be it you've to in lot that's you local something this on just all the facing what is two alone they and unemployment ultra want low mandates that wages the economic them continuing especially you fact recovery higher but apartment. you the grieve with Just But are, minimum and are

fix Some talk need automation still at to run about you but them, to etcetera. people more them, the properties

next see by So here? do offsets you percent years force think for going expense type do expect we're payroll driven you few some that the there's or to growth

Mark Parrell

five expense Yes. New they item in average where I these higher to but our assets in what expecting line years be term certainly these over these it's real X.X% the are of Alex is the going growth taxes theory been. XXXA reversion believe is tax estate of we're estate of time. our rate the growth are, XXXX over sales it some affected than that stuff in York help long us I last mean expenses. mean to Real we've

apartments go success will taxed the At done. go They've So we'll that's will that us have have cycle. and appeal values noticed These expect raised They've to number here. well their that more. some and have down those appraisers down values. point we how just more change

just headcount wages for that'll At built being there's of stuff of terms a In the suggested. Bob talent wax new and with Right now some say competition and wane. point as so lot same. much I would and products

be you I know during on of good rate. like a So chance feel and got year. add. I I think a number don't how kind just break like Michael X% you I I I it could there's don't know anything some things lower that's depending run this don't is feel if year's would

Michael Manelis

I think I I up to Yes, of obviously that's introduce pilots utilization. around automation we're mobility don't the head on an counting can bring business. our after standpoint maintenance that's a of to I that go guess side not from about kind know really more that if

you dependency any that is increases maybe to to and are on I So more on and right to wage going us some it's of in-house have they're less stuff allowing to going services done that we labor keep continue done of think utilize. continue some these contract contractors pressure not minimum get and the XX but going they're it in

that to the hard taking make we've sure possible. optimized, staff I look to as So utilized think sure trying trying at all that is we're as a that make

the from but with will XXXX really in I come think out don't XX get of think So there initiatives learning that be the these impact we're a folded types will to XXXX of any yet. that position things into of I

Alexander Goldfarb

subject things democrat up question And now estate lot contacts local you're still this market of a concern rent mentioned the is that There's may of someone on lot some any summer? all Albany about do of, ability of may any a who that to favorable the they to look more or just were renewing of at taking as debates other deals didn't then Is as spread control control rate there real Albany. with and/or that commentary control limit within rent But that raise is out landlords. especially to of deal From XX% your either to start restricted this think rent sort Albany second lot is York talk qualification. the New all is XX% existing here you what summer. a the in the obviously to XXXA any hearing rents units I

Mark Parrell

Alex. thanks Listen complex is a this very Yes area.

control very It's that members have this. we that are staff rent complex. York several who regulations involved New full-time administer

Governor are react specific to rather I anything don't to regulations. used his general to. was in remarks. We these The have

York give affordable helped continue level would very down on and forever trade or argue. produced local effectively to through control in will workforce long lower rent New me advocate I rent listen a prices We keep housing hasn't workforce and New association California more and in York run that did it our as the control to housing we somehow

about trade can attending be for about the program, zoning in because got to New where know the industry real senior enlisting that things area sector does an having New housing think have by the want places that in isn't inclusive to that conversations and New both York The now show the in about I affordable these it. California industry out more going annual by a in York and issues is people good fact like make affordable helpful all and we've dent this you're California, but private there's incentives otherwise I right York, like outcome. event now a you that's right going Alex, the legislate where or having

You need sector. the private enlist I to think really

industry willing to do I think part. is the its

sense New answer industry the association been that be is our education it can't hope your question because same on this the in occurs and pretty there I there detail. but in So effective time. specifically Once there's York no has will are we'll

Alexander Goldfarb

Okay thanks Mark.

Mark Parrell

Alex. you, Thank

Operator

Zelman now from ahead. take our Goel of Please Hardik next We will and Associates. go question

Hardik Goel

markets I'm the thanks and factors are widest? see are as question. there? for other and you them XXXX and color for also what on the upside just wondering earlier regarding across for Mark, Hi Which you look where do for taking guidance influencing potential I downside my your markets Thanks ranges end the providing the potential on

Michael Manelis

almost this range would have a one upside Yes, guess we I our of say markets every to equal in perspective and downside relative is Michael. midpoint. from I our

driving in on range the where we alluded they're that DC the supply and other one so tested I of the could markets revenue, and question, be earlier as think the XX% elevated be of have will and the markets upping – our to I downside. both the LA

it's elevated pricing of all those the to power markets and are the need pricing of said we I in the the in absorption dashboards we need that kind place. So like Right got we supply have the power balance earlier where good watch we've markets. to green now

the markets the thinking risk. here kind the today on But where we think about way growth contributing of think supply say and have the how it is that's revenue to I and their we're sitting are So minimal about downside the that I is elevated would majority of it.

Hardik Goel

Thanks.

Operator

We Please Morgan will next Hill now from take Rich Stanley. ahead. of our go question

Rich Hill

spoken occur. you've looks add two acceleration But York back Good the thank come of time. that links. like to put just Once some maybe of in really up for things and that a to already XQ guys nice you one number you which New City and expect about morning

certainly is own about is know our One how supports neighborhood City you I and in of the the things that and past of have that. analysis I York chatted neighborhood by sort New

your the what in supply outperformance it think lack neighborhoods are various driving trends a move when it maybe of both? relative little located about City. that what's properties So where unwilling to you overall or combination people I'm curious York of see is in or Is and New to we just

Mark Parrell

a remember on in pricing in pressure on then start what of They is little embedded of rents or some of getting a our as that what raising momentum some to neighborhoods. have I XX combination bit allowed much momentum got and think our these didn't some maybe growth it's both getting and sitting earning power. to on also supply you us

least power I here go almost through product rents every look it the in we it, marketplace at today on more our and time through submarket, in this still are traffic. were where foot every York New than today our our to market is it We in sub And an they demonstrating see pricing sitting attractiveness has see last where year. Manhattan So demand we type. when for the

own to on deviation you're think I to up up going see of all based fact the could projection kind way ranges in at our right So have to level think we and in various projections a X% sub-market a the about down X.X% sub-markets. to

of be what XX. it we is what that embedded some going So us it some with to I competitive facing is of in landscape is we're think is see should the and

Rich Hill

comment. mean it, supply come to back I that's Got I helpful want thank you. the to

sense find that and apartments really to maybe to the equity on One and equity lot pushed supply any continues can't is go a they get the you which out hearing we'll private if of to on amount that things we that dry builders that wants focused driven I'm keep of into is a about that apartments get wondering private enough tremendous powder by buy. anticipating sidelines. the that's

there is think powder all it developing of that's or So we're dry be maybe this you attracted might multifamily that that do last all misguided? to because a maybe than longer anticipating chance

Mark Parrell

his the to sites I but team and Investment is went it it exposure. different contrary value more lately and had Officer of to the wondered for looking equity some for of the of anecdotal George, I it would I tied is can't jump that looking of more say evidence think they're if that people Alan in there. flavors dry that we but continuum in and equity in not terms its some powder in interested. sure I'm and and add probably Yes interested is some development we've mean interested core our inbound their away or have Chief and calls to else do find someone were to of up

of I'm a more So it. not suggesting full are trend hearing yet that but we

seeing than but and we seeing again also less come also available were yet are or We high not that lower meaningfully, land prices at before.

powder I'm us sure dry waiting not to So that is for development. that

I if way and you the too you you figure wanted yield more a care do development. do to development much to out about think really didn't

real general Equity plays in kind development far. some lot but a into probably of kind they're of is measure of interested because was is of hesitant on and until than that a apartments bit year I capital equity. it more a so little plays still in put our right think work that now the in to dislocates opinion something now see in or I probably other going ago, in estate

Rich Hill

me that's guys. thank that's it, Got helpful, you, for all

Mark Parrell

Thank you, a Rich. Have good day.

Operator

Stifel, please from take We of next Guinee will now John our ahead. question go

John Guinee

Great, guys. just by quarter the nice way

gap you Just merchant they point the that the building on the XXX on basis on cost on business. willing accept to to point XX you're willing the builders accept? do Is the that yield that development, basis a a overall questions are last What dominate yield cost couple gap? think versus or

Mark Parrell

with such feeling price recession coming buy buy. time because a question for because in That's of great this rate price from of a merchant it. unit, mean per quarter an us development is cap the existential lot we our San has to of built quarter if that a what's that Francisco a stone X and per need a been the in mentality to I it trading almost we a build finding got hard location square we [chat] what looking we to the when at we stuff market X think won't We're hard we out properties isn't get the foot, was with had otherwise about at in builder

to we had build So we wanted if to it. figured we it own

more just the I apartment and investor. thinks a the sure Equity industry I’d you tell Residential in long-term general development a bit think, I little on side weak for like So guess, in differently

most money think who them So expectations until build I that give yield developers someone different they have are. and doesn't private that they are of guys are these can the they what

portfolio very exist. advantages said the our things think for already continue one that like we're company perfectly of assets are we I look that sit are to and on already that's to to a I densification and in at buy ours disciplined hands like the and/or create willing

know to reduced I it manner to. reduced the be that you it So just don't can

John Guinee

it to try manner could you to If you? that reduce

Mark Parrell

spread little that optionally building a cold build between really build Francisco. streams probably hard in lower have It's are place to of we like like Well, might go DC to it's to maybe if a We is than accept little require in outside. because the existing buying income new might a more San bit too asset lot ability income. easier and streams a of we they

So guess would my I answer. full that be

John Guinee

Great, thank you.

Mark Parrell

Thank you.

Operator

now take Tycho ahead. will from go We our next Please Jefferies. question Okusanya of

Tycho Okusanya

warm please. Chicago Keep afternoon. Good Yes. in

the XXX the to XXX July the XXXX is planning of you X, XXX to are pay raise perspective you're million just from also are to what XXXX. to pay I a payoff notes off planning question, XX off? in First planning to XXX And debt and million due wanted debt the million you confirm July that it's X, due

Mark Parrell

correct. That's

Tycho Okusanya

Perfect.

Second that bonds question, done. congrats the getting on green

you're secured curious seeing issuing the on specific they're buyers whether that type regularly Just and and kind bond? them what advantageous bond on REITs getting type of more it's just generally kind of of you're for of

Mark Parrell

Yes.

a type of base bond. of as kind differentiation green bond a Obviously say. but bond what would the base buyer I between cover I'll in buyer you the a So and attract in a different with part conventional do not and green total

fixed to XX% certainly of to in pretty hard So choppy. always market is good. the perspective that bonds point came high It's or quantify green of you're the which To in any dedicated these we that deal the helpful that that have stakeholders invest buyers. our from you and part, is more this quarter pricing for of helpful paper institutions helpful of or from had types kind capital get lasted overall between your probably said have has bond credit of in as did a and XX% demand reputation of a their to the for from It our the fourth bond. kind is being mandate whether really conventional to it a kind a market issuing was been second which bond. not in given get income is kind our quality green very fourth spread differential a versus the certainly in the space in on demand obviously quarter to because was That

did assist it us that regard. So in

Tycho Okusanya

if of sense you and like another then an January and don't could intimation growth about a new up overall year. That's me helpful just talk be what kind look one renewal to overall appreciate rates of in for rent mind what XQ of this the Could for around shaping views the you bit year? and more it kind of little there rates, kind new that's

Mark Parrell

asking So the first you're projection for is on that the quarter what new change? lease

Tycho Okusanya

yes, that's some just change forecast? about into your general year lease new for On thoughts the built

Mark Parrell

new in that of as quarter have negative I’ve of thinking I on by think So down broken I X.X down improvement previous down change we XX, is talked know looked call up. My it I as to improvement now the me. annual it I'm be much we kind that I improvement quarter. in take an quarter level and that of the QX we new looked should said front it the sure should change fourth as pricing that but XX kind start broke the down. be about quarter that through then I'm don't work we happy get with as top we me first metric as at stagger QX is in I lease have leasing really how sure not at guess on power was of experience quarterly and at as it the season there's year-over-year don't basis. share as a right basis over it at up the to and most the that through to lease second the and occurring of in the in we year I'm third peak back of

Tycho Okusanya

that And and of are XX you kind basis last to for eventually turn number XX months -- I'd expecting over positive?

Mark Parrell

Yes.

So lease XX for revenue the would full basis change we year to guidance positive expect points. new be

Tycho Okusanya

thank you much. XX Excellent, basis very points.

Operator

go our from Capital RBC Markets. Please We Wes Golladay of will question next now take ahead.

Wes Golladay

Yes, guys. good morning

but buildup markets at your what know markets seeing us in overall at affordability? for you your to the the you’re the in you can expected sense level X% you're property I markets that wage are seeing growth Looking it's markets which and of a give EQR X% seeing biggest

Mark Parrell

So it's Mark.

general wage like high in growth about our less of asking you're So residents?

Wes Golladay

Yes.

Mark Parrell

data is be on to So clear limited this. the have little just a we bit about

our pull to to able They're apply to are portfolio. what lease afterwards. forthcoming effectively take first residents, they as only request when we So not

renewal do trying negotiations. we're to So

don't know we necessarily So happened. what's

think a bit look the higher best again little had to see we that the our as to and because fact raise ratio are just raise the by we segment is growth is growth and rents renter to room rent it's statistic at compared to in speaking So the continues estimate. that There's because our well. income rents residents affluent an old-fashioned it high. the of pretty not of the terribly room has portfolio Generally way there's more rent wage be to segments way our it certainly affordability wage

Michael Manelis

our and much averages And trailing and the market it our highest really kind to XX-month, we're to and at XX% XX% like on a XX.X% go XX.X% and at that York XX.X% Southern XX.X%. moved Washington, Seattle either New ranges being at the with lowest of in hasn't Cal ratio from

Mark Parrell

that Wes? Is helpful

Wes Golladay

That was looking was That what is fantastic. I for.

fantastic So are maybe for and Coast? East there then to wage X markets X% Coast stand that now or you there Is pressure a your versus seeing. employees any out there's West %

Mark Parrell

of No, say experiencing it's kind that. across I board we would that the are just

Wes Golladay

lot Okay thanks and warm. a stay

Mark Parrell

you. Thank

Operator

question next from now Please go [Indiscernible]. We our will ahead. take

Unidentified Analyst

and taking thanks Hi guys for results. question good the

the on any there and all on any you was been through. two path adjustment Has in been cuts question deductions for about any your ago There side? clarifications, new some Act. the gone a and clarification there that? has the tax on on Have Just Jobs through on legislation of updates these some your weeks guys implications the side

Mark Parrell

initially. residents they answer our Bob way question, weren't standard asking gave there's the were but deduction. because my answer supplement it did able is our small average sort they on a No what there's Bob a and mean you're think technical implications is cash more mean general taking, may I It and of tax larger implications. more to give big I residents to I cash and cuts more now take macro going actually more

taxes So A for state if and York those jurisdictions jurisdictions our some high our us that deductible places okay. and is to in tax to it harder things in aren't capital could of like in generally it's DC that negative markets renovate nature. jurisdictions been these of subways were raise be for those local relatively and New

Bob through forth still the with speaking nothing resolved be need great they juncture. but aspects of meaningful there's and terms industry things you can not been There's that technical the again a deal stuff. generally to the We work terribly pass In to have with did on appreciate but depreciation us. a association I this at that bit and the watching go little concern technical some we're of back

Unidentified Analyst

pretty technical there if in It are? move well. Has of on to as any for take that perhaps side was through opportunities created the you of. additional the still that was there's a you you departments are you that on move greater where obviously But comfortable into more flexibility scale guys side, furnishing, on or advantage into kind furnished FF&E pass more could bit any

Mark Parrell

person tax be our so excited you Well, talk to about. will to

So certainly income that's and people needed we we taxable before. lower do and it do can depreciation studies we've our studies to if these why of sorts done

that do So reclassify do class. don't that we to now. What's need a aware things that that could you possible we're can some right into we depreciable faster exists

it if study it's to to is where fine need that sit will. we So do we and

Unidentified Analyst

going recently right to relocation of impose of age to tenants of with some that trying is of out Cambridge. a a that the and the trying to but like like question also are larger Boston and purchase paid that particularly Boston XX is things your a just and tenants more, rent. rent being cap there. control control and also thing are Boston, I about there's impose X% things you have Cambridge expenses Obviously effectively you of pricing the on to and of power course thrown mean, earlier more more Cambridge over and Mayor more being in it's The evictions increases. what How as stealth more And concepts they're got which rent involved up push the on to some the is I it legislation really last is are rent for ability government's focused be going to get there's is, know

worried mean, about I a are to you of I this steam? this? So how gain mean, this something going Is lot is that's

Mark Parrell

reasons Cambridge thought tend it long some a and people in stay there's about that control had of mean I reaction solve want good academic badly campaign. that a got and through I resounding very it problem fact realized to they Well I and time productive victory in rid this rent educational voters. we it studies a industry to and people does Once the get for was to engaged. a not from memories ago. very years are industry short, that way Yes. the understand a did one California is worked the of think need better a you

will expect we can You be.

and are and in involved have the senior functions the Apartment industry We Boston Boston is private industry's on in different we the have the again, who housing Association think I Boston to will and with is continue workforce solve conversation. creating to problem. very a way that behalf and affordable groups involved enlisting more guy But that

they're have job general. not we you the for us negative think mentioned our just conversation I in think certainly those to a lot they're just about things and a and are negative of it's negative

I think they're not going to housing. provide affordable more

they're time. opposite think over to do I going the

Unidentified Analyst

warm. stay right guys. Agreed, say all me the a I'll that's prerequisite Thanks of it and for

Mark Parrell

you. Thank

Operator

from We Okusanya Jefferies. take Tycho will final question ahead. Please our of now go

Tycho Okusanya

regards thanks discuss any Yes, does or that comments? in in for your any benefits HQX to again XXXX expectations which Google you from forecast guidance indulging me. have did

Michael Manelis

No. There's nothing New expansions. in embedded those DC York guidance in either our or regarding

view markets like our positive from think see right that. economic to early to any we're too I and I begin a of now said reinforces it's, impact. said Mark his kind why as to it's in those in psychological it's remarks with like opening think impact I It

Tycho Okusanya

you. thank Understood,

Operator

like the remarks. session. I'd today's additions host call or to back your concludes to This closing any question-and-answer for turn

Mark Parrell

on many over time conference today and for Well, we Thank of pretty your you and you us all you thank what see much. sticking we'll circuit was few very the a months. the with long call for next

Operator

call. gentlemen, this today's Ladies conference concludes and

You may disconnect. now

Equity Residential (EQR) 30 Jan 192018 Q4 Earnings call transcript