EQR - Earnings call 4 2023 | Equity Residential

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Operator

Good day, and welcome to the Equity Residential Fourth Quarter 2023 Earnings Conference Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Marty McKenna. Please go ahead, sir.

Marty McKenna

Good morning, and thanks for joining us to discuss Equity Residential's Fourth Quarter 2023 Results and Outlook for 2024.

our are Chief our our Operating Officer; Bob today Michael and Chief speakers and our Manelis, Officer; Garechana, featured Mark President Parrell, CEO; Investment Our CFO. Alex Brackenridge,

in Our earnings Investors of equityapartments.com. the release section posted is

or uncertainties. during obligation are that forward-looking these may of economic subject supplement the of to discussed within to laws. securities and conference the call certain Please be federal become matters The These that this no untrue advised events. meaning certain subsequent update company constitute assumes statements forward-looking statements risks statements because

Mark Now I'll turn the call over to Parrell.

Mark Parrell

Chief Marty. Michael and fourth joining quarter CFO, you, Brackenridge, our to speak questions. the activities will Manelis, start for performance you and sheet, our us our and results Garechana, and all will our the outlook some by we'll COO, XXXX markets, will Thank for guidance XXXX Good and operating operating morning, allocation expectations transactions Investment followed capital XXXX then on XXXX. your our in our discuss then take and color today will in our off, to Officer, balance review Bob I our finally, thank Alex give then us

performance, quarter our was We with our are pleased fourth in with expectations. line which October

from as for growth. XXXX jobs X.X% as performance Our outlook And we continued in is real sits educated continued around more million unemployment employment the more good wage which low the situation while college than benefit overall a X.X should XXXX strong a was well rate supported currently by created. new for muted, jobs

rent our Sunbelt particularly the income exposure well levels about able low the markets vast customer pay with when XXXX, at compared We majority will benefit in the current to rents new our also supply to comfortably to as XX%. as to in markets, of having

X% prospect target shape. rent of and XXXX, our a out They us is longer reason bought wages, remains inventory are started they and and the low depart since in the home renter lowest real who likely. as seen with near moved of the seems number. With the our residents with term which tracking Overall, to rates, high likely relatively as unemployment less demographic homeownership we rising have in in we mortgage good to scarce

the over long-term housing good demand. net the next our sets decade, And us significant across for deficit country up of

Drilling the of in clear down Seattle energy Coast, improvement we do in the centers West and in of life street on see Francisco. signs urban of and quality the San

recovery expect below submarkets in in real is and places of will coming are risen in downtown these XXXX a where XXXX. or nominal rents both catch-up and benefit levels fair on metros bit rental continue a to incomes, rates rental believe have substantially growth the where a at these since and We basis our still shareholders from

us across improved. flow more overhead preserve well up. Switching off side slowly we will other for centers City, Seattle we performance San pandemic once our back depressed as while picks example, the and quickly quality in the slows than grow competitors and to not life growth urban country by our conditions cost expectations, sharply damaged consistent the other expenses our and ability rent Francisco So have of once and reignited of the employment guidance note that cash to and of growth negative rent baked material do York shareholders improvement and New trends, our equation, XXXX the in levels for positions

funded bought to conditions, total than that I XXX,XXX at this allocation, stock and do that of disposition this lack at average buying X.X% highlight especially in these proceeds to during capital goes to investment, through and in forward very about we makes share. relates years. a with back proceeds, a with years for shares less recent per our a were many $XX time believe of stock repurchase We spent from the XX little common it our about first before yield activity a desirable We bought old disposition view the of back Alex details million the that reasonable given prices. and fourth price transaction funded our the $XX assets sold sales and at January more were available assets of want good of some at shares on quarter for As EQR of activities our market acquire

across our over, customers the the teams want company strong shareholders. and I thank and continued I dedication our our their work results producing Before for call hard to turn serving to for

Michael I'll turn the over Manelis. to call Now

Michael Manelis

our Mark. only X.X% XXXX in the revenue morning, produced of our I expectations. for review fourth Thanks, We of which line and of quarter same-store performance in our XXXX. growth and operating outlook This will quarter, expense with X.X% same-store growth were both fourth

and side, and roll in year X.X% focused experience. by on quarter as customer modest as a On initiatives tax as produced seamless out operating growth helped continue full low we were the creating to our the savings property well expense cost growth the efficiencies

for fourth revenue in the to more maintaining good in as quarter while momentum positive growth. by This than side, thought December the XXXX. rate sequentially, we up revenue was us start better grew On a in occupancy holding set little a we blended the on

Demand finished across part the building of in physical portfolio our on XX% consistent we occupancy as leasing with the at We our and occupancy above expectations. cycle. the year was slower XX%. up focused same-store solid markets Today, with is seasonal

rate go quarter renewal for at X.X%, came the our in quarter rates Meanwhile, saw growth the fundamentals rates East this above resulted outstanding and growth quarter which we was Coast expectations. of Together, slightly do. These our fourth blended XX in revenue negative basis a Southern expected, as in typically As healthy lease they new markets to California. good positive in growth in points. led

do large, outperformed and West markets so XXXX. and East year, in the Coast Coast to been the the by has As continue likely case all will

our this embedded with XXXX saw of that we that and building growth X% have physical and provided of consistent guidance range concessions X.X% in up assumption starts As blocks earnings with to XXXX. of growth both revenue release, a occupancy cash The midpoint X%. same-store you remain for

We with picking historical traditional rent growth expect year spring pre-COVID the August. the in patterns likely sequentially in to the up follow and peaking

XX% modest a renewals about year our have assumes just of midpoint a over of rate and positive our supply reflective slowing offset growth for of year This blended relatively coastal of in new the rate NOI. growth blended X.X% environment, growth where is averaged is we change than Our by the about flat, mostly situation together XXXX is growth lease job full produces which markets X%. more X%,

the a see As improving, renewal rate achieved moderating that way release, would from albeit new in lease is change starting we January the you strong healthy, can out expect, and a is percent of bit. with the residents a stats renewing

While in and still data resident our high January our of very retention early, of all a remains the and year, owned both view housing and a trends the availability of process, good the markets. cost outlook benefits result that low analytics of support for as a these our enhanced insights, renewal which includes centralized

lowest Boston pack company, with approximately and we the lead of Turnover that XXXX. in our some that D.C. revenue the and of expect to X%. the history San Washington, will portfolio trend remains in expected Orange of seen we Diego, the growth in continue have County,

given the New the only Francisco same-store York expect company levels follow revenue which we X.X% our and negative moment, slightly NOI, supply growth total closely unprecedented about San delivered. will And Seattle. expect of L.A. reflect produce behind. in being At of the in to growth we positive revenue markets, and same-store expansion

and As to competitive perform market this Boston, high occupancy is well we should by strong education. tech, science, continue life base individual starting markets, look with and in the XXXX. to limited market supported a and new finance, employment supply, with The health

same supply and were continue this deliveries about the expect is a trend urban we that as our will they ones assets New suburban outperformed and this lately, in year market XXXX have where to in 'XX. be

high which market York causing over rate late well remain 'XX. reach rate to observed continue competitive last is high years. to fatigue few led perform growth but rents in this high year, New some achieved in supply the be the should to limited, new record won't and Occupancies

little located. Washington, is XXXX deliveries a to expectations similar year supply units be Manhattan, the portfolio good supply. last saw of over and those our units continues of despite outperform will in in delivered XX,XXX where our very to being new great amount with The New D.C. delivered part of absorbed. large delivery market majority of the a

will continue. the amount market a has expect this see demand strong, we This but been of deliveries, similar good performance to and year,

great above XX%, starting are be with We occupancies in. which position a to the is year

concentrated that to tailwind we bad a the here. expect In through issues Los Angeles, been and debt we as work growth delinquency have

X continue our from the to expectations. will unit on make earnings remains our court months court color although the Bob least bad system more XXXX on to filing give to the back. being get We progress, some of impact debt able net taking slow at

High continue New residents by and in this this this and from make costs homeownership demand be our option. a markets lack and supply Southern Strong should fill deliveries renting occupancies these markets will attractive and impact units our Mid-Wilshire Fernando the of some growth County portfolios with of retention general with supply. San vacant will Diego Orange Valley a housing. out new to California, paying Koreatown be this highest higher market. Rounding driven solid slightly our in year San year, high more to ability aid seeing largest

see case pricing similar Seattle, this amounts little continues. will see to base year. County had Diego throughout assume expectations and XXXX, power while Francisco in supply Orange San San competitive no to for more our we year new XXXX, last will situation and that In

seen markets with although markets we us occupancy being use physical tells of in there demand, and XX%, is both in is periods very have sensitive. stability have price both pullbacks. is which it Concession strong above We widespread,

are the mentioned, and/or see the improvement life areas return of in both lacking office markets Mark of quality downtown to As still catalyst growth. but continue of the job to

last Seattle be likely of markets this an from expectations most and the supply The have Seattle of East in due in of demand be continued both increase year to with our New this driven job up XXXX. the supply in should healthy impacted the South the side. comes any when Seattle this Francisco in mostly with the San lack to absorption. although new in levels, of to deliveries is growth our aid year expected city established for combined Bay, supply submarket new increases low it will

an keep season. and in us we expectations. to rents residents to coming trend continue however, from to spring on likely already Seattle the continued Seattle Drawing some these positive. both to Francisco Francisco positive said, the the than San eye the in see and of new normal long-term leasing out catalyst outperform is would inbound we That supply XXXX. migration. pressuring did new to remains fourth This our new residents with quarter, of relative back something that see through Both will as move In less improvement San expansion high our outlook markets, markets be MSAs a is throughout levels for are and state. Seattle

from defensive XXXX. operating that the and despite are X the market stability in averages. in produce expect we demonstrated slightly year positive above and most portfolio we a the are to present, points revenue power limited with pricing percentage occupancies Denver having to starting growth has same-store the market position the X At

concession of our growth to long, of the all to In concessions, Currently, use, likely in the these of be and Texas, pressure amount experience revenue Atlanta we of to proximity, new challenged resulting in for lease-ups due have in very same-store expect direct close our number expect is lead negative the using revenue will to sheer Dallas all markets. year from negative we a but assets which least widespread few and year. deliveries assets growth Austin

together, Southern East So putting and California, almost solid the for collectively all NOI. XXXX Coast our these led same-store outlook XX% which of of overall right our growth by factors is markets anticipate revenue now

to markets unprecedented existing our We supply will markets impact where expect coastal term. operations near expansion outperform our

parking, XXXX, side, on for driving continue renters will initiative other technology income our in we monetizing focus the projects operating residents. and options, benefits with tied insurance of deployed efficiencies On the producing living to and to flexible

residents. of opportunities technology self-service teams with further create We enable are across for portfolio, smart complete rollout which across our home and will to properties additional share the options almost

of with lead total along This, basis to growth debt. other income should XX points, income ancillary excluding bad other

the for which we pricing season As brings, and sit our look will we year. opportunities power spring leasing capturing the today, here forward like full positioning frame help to the

I capital their want transaction delivering to to will I over and amazing focus platform give that, to these results. our the through and turn a call activities for shout continued residents allocation out across teams With on our their Alex for our walk market. to the dedication

Alexander Brackenridge

Michael. our presence to market, see steadfast and remain transactions so you, Worth, year Thank efforts increasing expect progresses. in portfolio like opportunity Austin an do in to Denver, unsettled Dallas-Fort the and by to more Atlanta, reposition continue we as Despite our to our markets

As of acquisitions, underwrite continued transact potential are a pressuring the volume mount to our with remains our volumes typical these down growth of down market developments year to Currently, in more Nonetheless, of in delivered like we does XXXX heightened XX% mindful transaction compared we as expansion markets. XX% needed on compared choppy, XX% tempered the new and markets in to projections. to always supply to reflect XXXX. rents pressures being and concessions to and levels as rent sellers XX% unusually

capitalized will pressure in also are term. see and even the costs often that as New were agreed transact to are high. with the over year to last months, decreasing be carry with stabilized developments extensions And long particular, expire. for mature loans assets not held few last lenders of Owners rates to

Despite over regulatory in operating we footprint expansion time household job that in short-term see our and formations markets committed remain our to the markets, broadening will risks. growth strong challenges and lower

in the yield. and but Seattle, the we did proceeds the old a As XX any in Bay average, three, $XXX On X.X% property activity, one were disposition our L.A. average years acquire fourth sales in transactions to small properties quarter, and at assets regards one own an sell didn't in Area were we total million

our volume very Boston sold at the properties, X.X% of is the we've California load to share light, and total of noncore in a mentioned. of seeing markets. the Since transaction activity a allocated beginning We've West Southern of a XXXX, assets, While we from million capital for two primarily $XXX sales older disposition Coast in lighten some small deal are yield. average to one buyback the an portion just in of overall Mark these additional opportunities

to and as either expansion access capital well sales ample issuance in asset to management of opportunities With they property through our arise. advantage debt a we markets, are presence positioned or take

conditions our volume, dispositions even and XXXX is or In we these $X for will can billion acquisitions whether dictate terms of goals. exceed hit anticipated for guidance both but market

X,XXX Dallas, to to commencing In with with Turning of four QX those XXXX, the apartment City Three are JVs venture we'll new in million and development. complete two suburban of properties consisting York for lease-ups $XXX joint be Brothers QX. three, six in a New all with Denver through program those with lease-ups total one are of expected two and and units projects in in while other our developers. Toll in remaining cost

in these projects to XXXX, contribute XXXX to expect growth NFFO growth. more timing the lease would completion contribution to but up, Given don't we for and meaningful expect

once lease-ups, stabilized believe to a York limited concessions to our growth good will the underwriting, from and substantial closer competition will will in acknowledge unexpectedly, provide ups may the current solid see X. may We investments. to as New anticipate that be that projected yields, will past see flow not our Denver new and suburban maybe Dallas stabilized project supply, challenging these meet market, average competition glut lease initial we mid-X, be and competition. supply and which new on pricing long-term our adjust have the cash at While We and

to primary starting buy projects the Boston. turn we a locations with now deliveries, on as it's very such to I'll selective be suburban where new call Beyond focus Bob. about any these over hard will

Robert Garechana

Thanks, Alex.

ended forecast and Michael our up last Mark As quarter. in mentioned, XXXX right line with

and most let's balance normalized expenses for of get the conclude debt, FFO with to but same-store finish building of right So and guidance. through you up I'll with same-store gave Michael blocks bad walk the revenue, sheet. drivers

reduce more environment constructive. once we XXXX, debt to bad the able regulatory significantly In became were

up residents While still we a of during as after evicts. with continue skips and pandemic, high we ended to work the nonpaying and processing ultimately, have we volume

pre-pandemic In new of just same-store adding well to with bad fact, about debt of not reduce significant helped over revenue from under levels, us coupled which, X.Xx activity residents, as a amounts nonpaying X% X.X%. percentage

long overall, from progress were a great but we pre-pandemic. the still way So basis XX points accustomed to

year, like last to we show Much expect to continue XXXX improvement.

Southern the We speed of to California, in predict. pace also which the expect on systems, court process delinquency a dependent highest where to remains thing to primarily improvement evictions, is this quickly be hard the of

debt get transition As to and assumes another don't that way year bad XXXX a pre-pandemic back result, remains for levels. guidance our the that all we

our assumes to year contribution revenue of a by slightly that basis percentage debt residential or Instead, XXXX growth little full levels. of a that expect point XXXX, to bad overall. be out guidance Xx a under XX X% If same-store pre-pandemic end midpoint would we above as is plays the

Residential core expenses. at performance referenced. Expense as by evidenced management the Mark to is a Equity Turning strength historical

Our same-store individual that of year, expense growth a are also XXXX. than guidance of of the discipline. reflective X% This those little from drivers different is

So in assessment, let get high-level if we into a more and detail you me required. Q&A can give

payroll more year trend pressures. X% above of the often in of small expenses, low digits. expected long-term category should remain normalization than topic discussed real and double the expect due some did and to and to in part faster maintenance and due we various repairs and grow XXXX, in XXXa estate be to than commodity XXXX, Insurance, a In less growth slowly they step-ups an initiatives last grow but should taxes prices, with utilities a total inflationary but at slower while than

X reconciliation our release Turning NFFO of a contributors forecasted to to growth. detailed normalized the FFO. provides of Page

but same-store activity. provide transaction of is me some typical the color primary growth NOI performance is on driver let As

billion year dispositions interest debt both while $X assumption later as our show our assuming and dispositions. XXXX than are to income in FFO acquisitions offset in that used XXXX pay limited proceeds acquisition down there. normalized await This disposition in or is dilution to This due is expense with interest the yet we acquisitions. reduction interest-bearing occurs $X.XX accounts partly we in in also our We are invested for mostly a and growth activity

balance here. a very the great because on comment brief really shape we're in Now sheet

than commercial paper less on We have modest the XXXX, outstanding no debt. debt until of maturities and floating middle program rate our balances XX%

very we're well So positioned.

debt work we've I'll XX% until has over the turn our over the years doesn't The for done our number interest business. that, capacity after With fact, our In allows to of exposure debt XXXX. reduced us and mature ample over operator. grow existing to run last it of and rate

Operator

first from [Operator to Evercore. Instructions] come Our from Sakwa question Steve is going

Steve Sakwa

the Great. I moving maybe some you guess here a of like be new in growth I might pieces rate either slow. wanted through It of Bob. job look of could go flattish pose the challenge here. one through seemed the growth or bit to of But kind building blocks of of growth more for that a maybe at as maybe 'XX, just Michael kind

guess, So did lease how you component just I up new that kept fact the curious how sort occupancy of flat, about components? And within the the all you guidance? those think you with sized

Michael Manelis

over start. I'll Michael. Bob is can top. this the Steve, Maybe come

it's a assumptions. giving think I different building ways pin themes you there's really top you And that level you the underline range. realize, can but So at need get one, lot of midpoint there, blocks we're the to look you for when those and the a guidance,

we the markets. kind we job expect So we year. the rents our And large started about asking just lease of less normal when this therefore, or with the growth than to across we of moderating change, is fact majority new rents be would market know that thought

for seasonal for plug balancing So change flat market, we we rent equate our our and say, be to trend a that kind normal that model lease the in right about out And build of it's we what new kind on of basically now, does full to slope to? across year. then and okay,

markets still positive. of our Some are

through markets think still when of and and back theme at top you level the some still pull are Some I of go the one coming on what's those, our in to year. a to But you changing. ask really the are of yourself negative markets need okay, themes any growth positive to start

material shift growth, So if in a there's job sure.

midpoint pressure happen the the think we more in starting But would year? today, us occupancy I have that. experience our tell we? and pricing we where we'll year kind does of and strong gives of what we it's into range. are than that when emerges season, taken a the the just you, And defensive underlined I'll again, position. at power that confidence see pretty spring really some leasing We're heading from Because with

Steve Sakwa

speaking? But question Alex, think not And just terribly maybe down, one hurdles the the the high, hurdles you of transaction then broadly IRR EQR plus to or today, just either where investment you do off I Great. it's I come maybe XX-year minus maybe, for on where market. growth is speak are way for the sort you think can know X% rent realize robust. been market, But are slowing. and NOI today,

Alexander Brackenridge

Steve, Al. the for is Thanks it question.

it's of state, a now. choppy aren't data you market right lot And there a pretty points. whole As

right NMHC As Diego in is on you know, going the now. conference San

sellers. a of generally the sellers experiencing in standoff reiteration pretty is So information, looking and we've a is and which closer for really to current a between X. which last been X.X-ish I buyers what time have looking generally cap for some months, something Buyers few

point, are end, there that And be to land it's a X.XX, think to for less some obviously, a depends cap now, going X-ish IRR. somewhere shooting But residual if but on the and not they're at somewhere more aggressive. kind it right but of rate, most rent insurmountable bit maybe little growth people the at an So things. in assuming gap an between peg things hard I in assumptions

Operator

Citi. is going Our from question from come Wolfe next Eric to

Nicholas Joseph

about so deals, the your on or on at It's supply specifically, obviously least Nick so those impact here on with that the guess and has Eric. just initially. IRR. Maybe underwriting more X-ish talked Sunbelt I you following that, up

buy in the So then the side And and the both underwriting for more planning you are underwriting on like Sunbelt? deals when to what IRRs sell coastal. look sell you're today, IRRs the for assets you're what are

Alexander Brackenridge

So the the end that a there's And I'm Nick, It's assume different Eric. you up of IRRs glut right sorry, it's Alex. in Sunbelt now. sorry. sure, apartments being not don't if It's that

So the starts to years are that, next hasn't demand the couple The down changed. of tough. be going But a lot. already after story

I that Austin, generators, great are think there's these cities still interested still have like some like are of Dallas, side we're cities a which Sunbelt that long-term growth in, and demand Atlanta, like still story. great Denver job

I couple a you same. then think So And tough, few your forma good after a have years of see think are you through I you're run that. years and the that pro but roughly pretty that you

lot older and a of on sell we're choose why the the is seeing a to scenario we we're of of why right that us is and now lot hold difference lower it's IRR things stuff. The for terms selling in the

they we're saw You and needs. have high old very capital that selling years property XX

some And of that on it. their ROI has

Some of the that capital elsewhere. And preserving case, just we it in better sees sees more a upside. buyer is is differently, a think the be used things there may our asset. But little

elsewhere. our money other. in something we a X-ish can And redeployed eyes, So be better think probably it's or that

Eric Wolfe

Eric. It's

But you. on just switching a Sorry to coastal keep people talking second. rent for about growth maybe

the that X% And coastal markets. we is, future the growth given growth, job about rent you anything aren't little growth maybe is those sort see all around a homeownership I wage in okay, talked dynamics? of being type that rent seeing stronger those think positive you guess of it would But turn there why in just unaffordable, more slower. than You that today supply in getting real question very growth, solid check,

Mark Parrell

Eric, it's Mark.

Just you to the were mean outstanding. numbers and contribute. New York in year can I Boston last and the start, others D.C. and look at

our alluded absorption I those minimal being little and restatement by In demand strong a a continue those DC's really I steady case, in mean growth of to We're and coming we're York going can setup Northeast like the have of to to cases, they're get -- if some pause mean, a rental incomes But message growth. Northeast let the catch I very to little markets, will years. or about resident various optimistic In that currents into large, there's cautious us. and all you breath didn't But do volatile we're a for think the the thoughtful. optimistic characteristics. mean and to I grow catch It's your are some markets So bit being rent off is handicap markets they supply that, do well. correct. trying Michael just that New to big cases, super up well. year. we're challenging cross in we're economy

Operator

next to come Spector from is America. from Our question Jeff going Bank of

Jeffrey Spector

that? would years." I let's when a the about the you markets first you My Sunbelt I and a again, Seattle. for was you. you. most on have maybe be talk of expect smaller know to view you, And And say, pressure is but heard if it on Thank important Great. I could you guess, Thank can supply it comment appreciated. peak, a follow-up. in is Sunbelt, tough question expand think I then is on Sunbelt, "it be couple a

Michael Manelis

Jeff, is Michael. this

to the and I'll is the we it that back-half So just Seattle see, as Seattle. specific market And for the Redmond well start. a supply us city loaded concentration the lot with in of of in as basically

what peak way we that could see back year. coming starts is to be And So already half experience like for is you somewhere the expect down. the in to us, of this going

Seattle pressure in face level that we're of in competitive So less 'XX than the think we will what facing be I in 'XX.

supply this to because take is Relative to it's units a going while to great market. a are that the at coming absorb fairly I is to look we Sunbelt, that this question remarks pressure mean, And the this constant of prepared at long. that all feel to and all tells which our we I the in by across markets us year year long what that the quarter, assets many said Sunbelt expect the

bit I market going are start think a to 'XX. but as to get of number the pressure see you're you into and little slow the turn supply delivered going of the 'XX from you to were that still down, that in you units the overhang the corner to have

Mark Parrell

I'm Yes. bit a to little going just add to that.

at some and expected big definitely you 'XX from If it's I look as mean, slip. about 'XX will stuff deliveries 'XX's as delivery.

not it's incredible 'XX decline. So like an is

improvement those supply still pressure, an really look an demand this may Dallas, those analyst declining as whole lease investor year in so-called Austin That's will late 'XX, derivative at But and things. 'XX, 'XX, Atlanta. you than experience what all being like rewritten that picture same-store why Jeff, and second will go occupancy with and because in will worse. all this Fort are be roll year, but our your Denver, in So markets. new in worse be that be beginning likely of leases we the see, optimistic as in to of may we rates, will Worth, spend 'XX more start through numbers our rent rent in the growth And see experience of growth is so revenue not good we those you actually but this

idea supply be the more that able accept. get year a of oversupplied for the is across have of one the may why is supply markets, seen we then and in is we've if I any don't be to tough it'd it job these different you the wildcard you with And see But through more to incredible in our some what our And quickly. markets. efficiently that's us kind think 'XX absorb history growth So really here. only

Jeffrey Spector

the are you're your I more on that half? opportunities is That's these acquisitions second acquisitions guess, that markets. 'XX you approach, to in conservative expecting guidance very just in why expansion arise the your Or point, or to second really half helpful. And is to assuming

Mark Parrell

you number the other when hand, help some that It's your good. at is good lower year earlier. price. guidance growth, just And higher very good and okay, we'll likely But team a Dallas, things can you're buy look this X. to year enough, them is The model. number that your X think you cost, cap the basis, relationship, little is be past rate quite rate. Well, and be going his If discount buy than in like to pardon earlier rental prices, look seem X not your later Alex replacement better, at on you'll a declining years see paying the year, of the me, year but the prices will I X of your to here maybe but now buy cap might you're you

an versa. to XX% more. find sort But So markets that to again, these the four our We just assumption. that's guidance company like do markets, growth see art. is you're going better we more We'd feel will to if say, growth happy about about tabbed can bit little revenue and be what going we little good long is you the And later. and sooner, into prepared do there we're price volatility the time, in of more Jeff. a that. and to of may the a we've as in probably bit balance But you And the we reduce that better expansion getting think and term. as us the There's do We do of over one bit other the create navigate. a not be owning number vice see markets drive them little

Operator

Our next question is Robyn Luu to Street. from Green come from

Unknown Analyst

your flow on where just to with taxes. are hearing any lower From Good to assessments? values want you I are starting cities, touch morning. through markets conversations to tax

Robert Garechana

for the question. Robyn, Thanks Bob. it's

markets. in lower We are seeing some values

you back decreases. And values we've some In gotten fact, already assessed some XXXX. as seeing at we are on the look actually margin,

decrease, a in assessors offset the But was So the change there and quite and given it the Washington XXXX we're cap of risk-free look was good. we places. in at -- most the the income we've about really just values, Obviously, got things. as really other seeing production income and rate X% values state, for instance, in there, back saw rates other

And have estate think in we others. in fact some are open rates And seeing places, initially acknowledgment item, assessed as what they real for you at. so we by where and assessors in see out are be that than they fall The will taxes rate lower we'll XXXX had where values comes. some about

Unknown Analyst

sort of where can correctly? that let's in, into conclude yet. values They're tax have call still Is baked fully the haven't couple how of magnitude So it, I been fallen assessment. of really the in trickling years last

Robert Garechana

tax as and correct, You for team values. real for makes our an we excellent appeal that estate are activity challenge

Unknown Analyst

I I'm glad could help.

stock dispositions no Just near-term the debt that and acquisitions maturities, buybacks particularly the ran you've year, I a against spend guess, and are does on in you did development on that way with, -- I little expecting -- uses after obviously a or period for 'XX? in you how cadence the repurchases lesser other capital noticed the between this market second some pause, long did of question, a

Mark Parrell

for Robyn, that Thanks it's Mark. question.

we exposure in allocation New the in goal time, will that shareholders California. I haul. that, lowering returns portfolio way in to will over money York volatility lowest the Our markets the and expansion long primary the portfolio Washington, most Again, described these is and highest the and building just believe the that create remain capital going make out in D.C., the

least against has worked great to really of continue Bob desirable in is the lot the an And least and lot That to a top we're dislocation done a create get lot portfolio hard can his portfolio other to REIT share it about else structure are sense. that's we've calls, for a like value -- balance made notch. we're available buybacks buy. you too, cost okay for All that consider buy here. when said, with that gain, does thought of There a isn't you capital out team the a among wasn't wasn't things tax when assets especially a There at to desirable going the those all have be we this us. to manage. think to That's these And sheet. ingredient. job important talked these on on about that lot prices it there and big opportunity fund the considerations that

So I have to that our about we kind of debt husband don't capital. to maturities worry need

platform thing of overhead market for stock buy revenue. us, and you is out increase the your can to introduce to scaling, I buybacks. formula. team to you conditions careful be to our doing And give open mind remain are, see assets, the going a Board as you more got to percentage there the want many keep another you hard what where for if you to said, goes, really to of sell and kind management too about And But that just what's We're a stock it's buybacks. open all

Operator

Our next question is Goldsmith going UBS. to Michael come from from

Michael Goldsmith

of then and My expansion dovetails kind portfolio markets. kind first core of of kind Jeff's coastal between you Francisco if off Seattle And of and slice question San your one.

expecting expect recovery the You second derivative it's time for to take and -- bit Francisco of and around recover. that you markets And San you're long derivative just that how the see context talked line you're if a see expansion or to quite see when about to going how near basically some future. the put the in it Seattle, more some to starting now compares? second to Can

Mark Parrell

Mark. Manelis And something Michael, it's think to may add I Michael here. have

in police a of lot about thinks and a in they've the reductions. be So Police cadets the better. They since same we the at recovery lot before feel the San Conditions about there's The Francisco management on out going call, the class talked on information the why team are Francisco some mayor had have to long the put the term, pandemic. that Academy way. San like last crime market. one elongated market we biggest The ground

off. So there's San rent more the good to tech 'XX, you the Bay more team others get in the is a 'XX little which get later city Area going and job of as growth to thing. a probably Francisco But things take we That's some until on. probably and to in where Michael talking talking said,

to or the Bay you've growth are a had real down on But up to yet incomes XXXX, city kind of rents basis, in XX% the is you the San think over XX% Area since the flattish want in XX% of XX% spectacular marginally XXXX thing I in and since about in our Bay Francisco, nominal and Area.

that, a of pretty is get high. market because new once New some really growth a isn't York job this like off you So costs there supply, housing are can lot take

team tough. don't So is the you've got you about Michael, know, want is kind of I the optimistic to add? the management recovery, timing anything if

Michael Manelis

to the there in the But And be demand in is even got we these I And quarter there. of lot markets just as both think like XX%. we Yes. volatile issued starting there the year. concessions right this markets expect now, mean marketplace. us to a we fourth lease the change. that shows I We the off fact new get about got I year at think

they're new a December X% at now both X.X%. about So negative of reported When markets about lease in you at the change. look results, both January negative those a

pretty material a it's So shift.

before, and So of we've But the markets a those spring into leasing the kind kind pause bit. little heading there seen then setup good. and of hit really been season we've retrench is a

wait why fundamentals of just of a kind some we consecutive change those to little improving we're modeling that's of of being a on we cautious. So probably kind couple We're long-term our markets. see going of until quarters before

benefits markets. I from is of our all having just at thing other Seattle of besides The the Francisco rent-to-income out coastal San would proposition like value add the ratios lowest

markets it's fundamentals said, pinpoint just the recover. for Mark and when. to we like opportunity to So hard It's those this just see

Mark Parrell

right? Seattle's growth XX%, out on and wage Yes. want just I is since Yet I in X% are market Seattle, something to downtown, XXXX that forgot rents up to nominal mention flat. there. throw they're our

to lot gets So after pay And Seattle But again, this is great these that, markets for more supply housing. again, it push quality have ability the a year. lighter. a

of So of embedded you, that haven't Francisco, we but into for that's hope, this and our I year portfolio, X/X about talking end San towards Seattle and about that Michael, derivative second guidance. our we're the

Michael Goldsmith

to percentage bad is my then sequentially. question Very Got second And related just of flat debt it. a helpful, was revenue, it as guys.

it there's an think choppy, continue but could I trend be that expectation to down.

we slow to you a quarter should of guidance continued So that in a XXXX? any of just improvement? or what's sort of Or and piecing assumed do visibility specific around And expect of improvement? better pace for the expect get in kind steady to

Robert Garechana

that. grab Bob. Michael, I'll Yes. it's

So start do we to guidance, will -- what's we with we will that assume assumed in get improve.

percentage of revenue. at, same-store we X.X% call bad debt So ended year as of the it, a

that to X% get That X% sub full we're the expect we said fourth to that I in my year. quarter, we're a think little by -- for the remarks, I X%. over assuming means

it XQ with thing it. of You're XXXX the correct It I and is more would -- XQ hard of systems. caution takes. And because associated step very function a court this is to of that than the of It is kind function a linear flattish. kind is and in what puts predict improvement has in to that being is a

and So there's QX, that our more and of right of QX, seasonality that that little because of seeing system in started number. because bit in guidance you the expectations and always now of and this a flattish been pace is QX, is kind in we're court which later QX improvement

like As holidays, bad higher is debt post always quarter a first anyways. you about little are think -- in bit the typically

little expect So expect choppy function, overall. a of step improvement bit a but

Operator

come is next Our to Fargo. Wells Jamie from going from question Feldman

James Feldman

Great.

I your about guess just versus So comments thinking on Sunbelt coastal.

truly have get you is you're to viewed there your putting assets, up. view are that they're that more if numbers bought markets? they old. in is bias the think would those quarter you XX you these more challenging leased -- you're assets concessions, old, selling own? assets Is out? coastal of of of say newer the tied You are view you years much last the seeing assets year in some to lease-up, your markets across about X Or just where Are it of in means types the How what on

Mark Parrell

I guess Yes. portfolios remember, I in have that certainly I conversations. in numbers Jamie. But say markets. won't same-store so Thanks by those we would different. you lease-up they for telling small attack question, include are the But relatively way another we're numbers, lease-ups are

property one Denver. could same-store be in eight of our if being one of hit it So assets out hard, is

that I So think is it.

the parts of think people, differently. different obviously, feel it market I different

my So that comment. be would

small have relatively have portfolios. We assets. same-store Austin, I we mean, three

So...

Alexander Brackenridge

when some concession more A an impacted, can't whether you're property. though, so immune got really how B X that's market, or add And is a that these get I would or just Jamie, I historic property start see think pressure. supply, a from are months in and you're you're than where gets levels of I that everyone much amounts this Alex. to excessive

James Feldman

market, coming clearly, Okay. mean, markets That's some very as And We've back I think pretty investment estate debt are helpful. we the quickly. M&A. now real seen about then the

So acquire transitioning right goals have achieve number? going more over of beyond. that some you'd How can your maybe types to do 'XX years to you as in just the competition harder the is versus and you market get assumptions competitive? Do I of up importance think soon underwriting about strategic really hitting like can just you gets assets think if of to next bit, you your so assume portfolio the little for loosen couple a the the as of

Mark Parrell

We're -- feel any do completing move don't cheap. more need our quickly we'd in love by repositioning. assets to I to that selling

our we between are sell side. the we up bit of sale sell more difference, Jamie, again, pay can think us, on little view. can If buy. from diversification, creating value. the continue less to pardon It's the about a bit buy we're that see things assets that me, the well, we little I desirable you'll And a and point

and sale bit price Bob expand try the the we're relevant. then depend going So it's a extent is at is that, the through little borrowing about going more price. The it's the doing trading buy like company and interest activities, to that rate become on both if debt we to

for the in somewhere think I be would money. X% So right XX-year now neighborhood of

So we've have out we half this, the X.X because COVID to been XXXX, billions We dollars well, when started closed into and capital years of but moved transaction markets, of of the that of that's but for point we'd because those Fed. last markets since the of move faster. helpful, like

and get sense. if So that year was think, capable all would you open of De sort in dilution mean we could on gas the thing. we compelling. got some this would $X we're present and the wide hopeful billion year, I a did, I billion back some $X.X that justification in of hard, call, sure. dilution push doing it's minimis is make 'XX. themselves plus we require a Wholesale We're one feel to for opportunities

James Feldman

Okay.

IRR. rate than is So cap it the it like about or the absolute dilution sounds absolute more it's the

Mark Parrell

Atlanta, side. own and competitors. just youngest these to We matters. NOI in the on owning capital. our dilution repositioning. got make portfolios will of the on our to sense. REIT of strategic we we'll Austin I the end IRR be think assets less would side, Dallas, portfolios our the deals We the mean like the accept We some not newer At Denver to day, complete IRR The because will shareholders that's beneficial CapEx have

The gas on done the We but matters, dilution to a yes, So along. move getting cap rate this want matters it to push IRR lot. matters, this. we matters, the want

Operator

Brad is question to next Our RBC. going come from from Heffern

Brad Heffern

on New prepared XXXX. the some you price sensitivity that Can and rank to high for in that late year. you increased in gives confidence talk mentioned about add York you color what market In some relatively comments, the

Michael Manelis

Brad, Michael. this is

of of bedrooms a kind price the saw sudden one a overall as at So I that like units, started see we prepared think you was bit just renewal in hit to would the was just of market little just remarks, became challenging. the saying the a I like it's conversations I rent And point types fatigue, where activity certain level, slowed, more describe there what level all $X,XXX.

you there that just have little supply in pretty expectations year competitive long bit. to those all So power fundamentals saying you almost XXXX. pretty pricing in little no all suggest a I would growth out we of still say We're we're expect good Manhattan. New York tempering have The would because good

You've is absorb. of years of got that. exactly we're what we're And realistic that market a markets. had we've until really the leasing okay, growth willing But that spring in the just let's rate wait rent kind us good good take just shows on growth demand let's to I two just season pause drivers those think of saying,

Brad Heffern

and And earlier that repriced. they've an guess, growth the have downturn, unaffordable reflects rent has up semi-permanently on versus markets wage how follow I a rent the been opportunity Okay. of Coast those your it. to on Got become how gone, growth West just opens that future before that as much comments where of about much for versus

Mark Parrell

see. guess we'll I

places our of about repricing. Seattle is are of know Our in And sort cities Francisco they and from on that whole the still don't sense, center that appealing to some demographic again, live comments and San the market. want for those that to people all our I wholesale will live

saw rent national New support on than a cap side, trading as going market New sales You the historically in some recover York would deals lower and the average. rate that at investment smartly there's the York has on it

don't think think the our the there's that. come, think of and told those obvious but story yet that. So answer just of will I Coast one an given because is on centers But we've appeal to urban to and true the selling I be the view West markets centers, there's no kind you of is and in I

Operator

Goldfarb is from Sandler. Our to going Piper Alexander next from question come

Alexander Goldfarb

Yes.

So here. two questions

on First, the renewals.

renewal your I'm through also In in not a want guys you getting urban walk cost to like those views be a think I addition especially I But I better can will of seem newcomers just on rent for the much there's that to same this And reduction, seems increase. guess, new moving, would it jobs, you renewals are rates it curious frictional up a wildcard. than would a to year. activity realize see assets. in rents. new hold residents think would rent existing sort And

Michael Manelis

Yes, Alex, Michael. this is

And the a of anywhere and what a to expect next that the you in right do We between XX now I about XX% out of to have to tell it's quotes been our continue is X% think renew X.X% and already residents issued. that great are question. the could marketplace. off I X% XX% quotes about So for days growth, achieve approximately

stable negotiations as in we conversations quote process. negotiations. put have renewal a I of science help centralized but navigate remember, later these of be generation this really to negotiation in our the got do We've deceleration results. for all new we right We're the effort to years, into last well year. mean, of expect And performance both with lot like we We're the now, to renewal modeled processes residents. in fairly layering the renewal in enhance You further data as the us that's some couple leveraging helped

but full to the a pretty So in growth, is some is to come which X%, see we year do deceleration. solid expect just expected still over

San Francisco that market stickiness the it like back to well markets when half have of change sure, see a shows way are I markets us dislocating, top at And think and in right you just of going I that somewhere when market we that XXXX, where even renewals, and it averages. the there's and of all comes was the with or And about spreads you the right and look a XXXX rich new up getting landed the us, could X% data a lease renewal use back pretty lot of that back in held on standpoint from when year lot renewals. supply new history in with now like to that more pricing great, the

So was out use it's 'XX, point other 'XX. I thing, not start we And concession the would is spreads getting uncommon the to elevated marketplaces. into in our in back guess, see I these

San some and renewals. X%, lot on walk still with Francisco and or So a residents these flat in renew markets of I away a Seattle increase these of can expansion X%

spread of so renewal looking kind X%. some why number around we that takes it of in confidence that the So being right have away much at you're and

Alexander Goldfarb

Okay.

fatigue I up back don't we York New still or on New about seems, it's hear And city. to expensive in the Jersey, want The anymore second It an be new dovetails comments. even rent question stories moving sort an using People to as example, the no supply. really mean, of proposition. doubling

we're something have of more Do but New today was you comfortable rents markets not renters maybe than doubling an pricing feel of portfolio, in just pushing option. Jersey moving do perspective, talking -- more York, supply, and your outer was historically? I'm like ago New to more feel So especially pricing you about boroughs a when from you today pricing like in push years power versus new more or up to sort across or

Michael Manelis

Yes, Alex, of this is you can on Michael. layer I'll start. top Maybe that. of some

and I submarket this kind a think is of market really look.

into more that a depends just I'd strengths to historically. pricing compared through is rate whole much lot markets. these would have really situations. place And I How have know factors I So spread? good the today based that I that of that rents say decision it on in trade-off Brooklyn's than What is I is each processes help navigate happen? to say to what today really have of we is Manhattan? don't the powers market had go us growth deliver going different So

And are as seasonally we look should the like week. say doing sequentially feels good. XXXX, setup they be for I normal. that doing is rents building It's can pretty all what The each

application week. is building sequentially Our volume each

I need we see answer be really momentum leasing think historical like feel question to less or I the you, season spring times. able in that more to I and pricing got to that part early that power do than of tell

Operator

And our next question is going to come from Rich Anderson from Wedbush.

Richard Anderson

of of environment sheet of you of the going Would ultimately be different all areas is have opportunity sort be you Or just and expansion sort lending Or to given intention an that distressed simple of balance stuff some go with equity willing the type whatnot. the stack complexities through the on and you to it keep investment? to distress in the open channels? a simple capital enough of own? topic So and would markets, invest are and it all to absolutely fee

Alexander Brackenridge

would simple, it's property, a would the participate opportunity, that if capital if Alex. that elsewhere require well. in as to us it's there's we for good stack likely us prefer but open owning we're that the Well, wide to lead Rich, available,

of going lot fee there stuff think a do there's I be So out to though. simple

structures to talk about markets But any happy out. that balance in expansion well-located to apartment owns we're the that we'll they So anyone have. a

Richard Anderson

just today? that. if Francisco ask that, of might question so a year process condition Sunbelt be And the see a that I thought about in of said, what be sort a better. Great. XXXX. Sunbelt sort the you the to Mark but then versus -- then said being derivative second different like Okay. tougher year you XXXX San something But earlier could -- and generally of you say, like I Seattle. sort maybe of help does would it maybe recovery the Is that didn't sort But is can speaking, the behind you quite clarify understand you that that define about

Mark Parrell

going markets. I'm things we've What Yes. just out play how seen to in is our say

So both. in the all to start demand first big as that this, or you occupancy or thing a you you drop decline of lot see when see a when supply of you get a get

lower is, competitors of course, that, yards. in So you've to the face numbers whole occupancy RealPage occupancy. of same-store owners declines in and in rate give which the interplay eventually markets affects seen show the revenue. turn, the pressures rate. between X That And concessions sort renewals then and

so opposite exact reverses, happens. the And it when

little Seattle a Michael to see you on San bit my building start to you Francisco, that occupancy little of confidence. as a gives and spoke First,

So now some going test leasing you're you're you're the and try especially to that. going of going spring your concessions take season, to a to rate little, in away up move to

flow and same-store number. your to will improves that that revenue eventually through As

I that that's comment. by mean what So

years, often we're same-store every rewritten market revenue up. So But at a number what, going demand-challenged you is know of up lower hold haven't "Hey, that market might that the year, And is revenue better really will. but looking X market". process, lease be you, it's your where an second improve. supplied that's same-store derivative, of going right see some that heavily because starting street rents, over And sometime will year often situation in course you telling I'm We're down of expecting. in sort lease in in those, a you how folks that a on but yet. your a second in better of you're dramatic or improvement to We'll occupancy it, rates, of And about that's feeling what talking but is but new be rent it goes, I numbers. some to my expectation it isn't built away, sort call lease 'XX, this solidification

entire before that it to our experience got supply, is So Rich? It through this it gets it again, just compounds. better. Is all a worse And the while little helpful, P&L. you takes gets run

Richard Anderson

money then -- behind San mind as helpful. being really that's your of it? characterize it of a you sort you Francisco, year is to were sort then Sunbelt And Seattle, months in you simplify x would would Yes, if

Mark Parrell

Seattle in have of job feels but Francisco could we this didn't hopes, high the supply don't on longer. little in Seattle told in conditions that. Sunbelt prediction just I because and year's Francisco, bucket. just is We starting and have you a I take San I think a improvement challenges. San And put its it it like

both be I in So little will 'XX. areas a think challenged

Operator

caller BMO is from to Markets. going And be John Capital our Kim next

John Kim

comment think trends for second market January, Page And in in you expect of of remainder realize you in improvement performance if you shown growth it the improve the On quarter. had lease to quarter? XX your any versus on quarter there's discrepancies resettlement? fourth how the blended you in as the in these can I what the

Michael Manelis

John, this is could Michael. I that. start with

is coming the So with just I we itself minus Francisco at as from before, off in I to X into of look minus lease January that the saw The think and like number and trends X.X. portfolio you a was going the through in improving the lease clearly way work cited X.X improvement this, that new Seattle each and that San you could is rents down drop and put mean, in quarter. minus see with December, X.X. like expectations I've December a that as in going release we sequential to new at your now in is minus December week, for to change The continue at you January the

little it's renewal story. the on the So bit of side, opposite a

to are You in the off to release, number marketplace. renewal X.X somewhere And what we the at the saw way that December. in our in January we keep trending out the in but of X% quotes through, achieve were down as expect we to X.X, that quotes are work this range there, X.X% the is expect have we do the month renewals a

in bit interplay renewals, you'll we that, if come start have between positive going because the see X.X% lease We'll growth. we still between of the where And to to to you're these turning shifted strength little two that we off see have as think number do change new going I spring but at anywhere you're leasing to the really season. going recover. So of starting and this if kind you're in a moderation a X% see and strong momentum keep to place hopefully

John Kim

your And Denver concessions this And this is X%, and Can you're is Texas yields. higher second we're is Or providing driven that the question your my to you concessions. given developments? on of closer trending really today? on said, Like by you development broad-based? comment Okay. level

Alexander Brackenridge

John, it's Alex. starting Well, up just we lease-ups are now. literally right our

So we data don't of have lot yet. a

that could time. in month flexible are of which Texas, a of little that two lease-ups New very right three Denver. suburban And then be are concessions kind York, in those but over assuming We in probably and one now, see we'll

Operator

come going Kramer Adam next And Stanley. our question from Morgan is to from

Adam Kramer

Maybe of vary guess, kind markets, can a It's a or the take. market. question, but of pretty point new basis little give interesting, and that by kind at change in renewal Goldfarb's lease by change to also band, bit a pretty significantly just of band, looking some are tight XXX these it, market, in I by Alex call new renewals comparing with line But the more of lease of kind question a conceptual earlier.

getting a question D.C. new a should somewhat bit, bit be And say, renewals the right? falling San that more an kind closer guess that to change. And I'm a it's so kind ability kind expansion of little there the where about I Is more twofold, of makes apologies, or I a and surprised where in, bit Again, holding markets, lot of by so hopefully, deeply the maybe new between negative why but even spread historically Francisco I leases wide maybe kind renewal worried lease hopefully, versus better rate? in that new of conceptual of guess negative question, little a is push renewals of to little sense. right, kind like or market a

Michael Manelis

Adam, it's Michael.

transactions. renewal is off low that there's I of just So this. you're more also period of a mean into stickiness the time think And which at coming look I stats you

there a of is bit little these numbers. that So in

back new negative marketplace, to renewals as I new like good the this this, time. going quarter think see mean, in positive. change negative. goes pretty and lease said, I goes just It's we not lease in change in data way in a growth think with that all rate the stay uncommon have we fourth I year about Even the happening

go situation to So negative. it put into And much growth said, even our think for I renewal is be it's a so really to uncommon our that flat processes. like or going we've just

have so information and We high degree good to of it. We've insights much confidence. a got

That I the mentioned we there's be deceleration a before, being market, than could dislocation said, robust in if that Even right? what the more modeled. big

Adam Kramer

too. appreciate helpful. on building and And really of kind all call, color the I earlier blocks that That's the Great.

So bit the of talked some maybe know that are about of a of just I if market. far. on of Kind on Maybe the in concession number don't being offered? you terms thus concessions weeks little expansion you've use. call it mind of your level

Michael Manelis

Yes.

applications the into X continue thing say small the XX% with to fact Dallas you one in up right watching of Francisco kind with how competitive you lease-ups and to we're like concessions, of is what's not do in That where start with? last portfolio said, be good a concentrated like you portfolio. are such now, When now fourth land going where do with percent the that an be happening just being saying So go occupancy it's month. of of the that still about weeks' sign that I mean, we the or absolute and concession of when want we're they about us play. use issued. to XX% to at that would would right like to turn just I And really over for because of XX% a closer by we XX% now started concession that the situation. level drill issued. need and the these a so markets now where expect concessions on know the is markets expansion all San that it's about some even good them the remains you XX% receiving them, markets, I'd new a that we expansion we between But I those and in quarter like is did being in across The running are and worth think right would market concessions I use Seattle leasing

right to we X% above. the like feel So now These setup are X% occupancies is defensive.

to XX% in our markets. months receiving We of concessions month of expect to issue XX% to applications X.X those X

Operator

Our from next St. is question going Haendel come to

Juste.

Haendel St. Juste

your following guys. guess, capital Mark, I from first to responded in potential Seems Rich's you've to there in you the past. how I participating morning stepping in stack. departure question about question parts mezz you, good in guess up investments bit out on earlier for of the and other of interest the a a

guess, I'm is I assuming is opportunities. reflective heart? And the So first, change that of perhaps fair? the why of

to the Sunbelt? But it solely on I'm that or -- be focused assume is second, assuming fair you'd

you then or seek return acquisition of level premium what rate would third, And cap there?

Mark Parrell

to to of part But parts it Haendel. then ownership. that was I may start of Alex the mezz the the on side, with Alex think going path I'm emphasized investment some answer as well, that and Okay.

to a being the owner. where we've or in book we're are that back different. preferred very would improbable working is up the in where is owner the to the consistently is and good it's us end So there's equity in the get and with hesitant up That that just lender and deal, mezzanine been in When stuff deals we we're we to making or a structure 'XX investments 'XX more what did participate with chance going capital end do XXXX. to through we create we loans

and So thing that Alex the folks lot of do. and a me familiar team to is on a for

of I So distinguish answer, no. that's two that would how else you I Alex, don't to the if know question those. there was anything in wanted

Alexander Brackenridge

the buy real be good. opportunistic. we're I That's chances of think our keep we I for No, to mean estate. we'll looking will history and company, great

Mark Parrell

some in you to deals asked that to to is open those in I expansion We're development guess established we're in start get about capital -- I of We've assets these will focus markets the there. our some got build. another one in that. to areas likely into add really established or markets form hard primary But markets. coastal are certainly and acquiring

Haendel St. Juste

seek to you. premium involved would would to you Got in you helpful. these Got type get level return you of mezz pact you. follow-up. opportunities. -- potentially a were What or or ownership But acquisitions, of some That's

Alexander Brackenridge

we're of take Alex. it. to would on we for knowing very circumstances it's without But deal transaction. Haendel, compensated around beyond that specifics typical getting a impossible obviously, It's peg really the the the and focused risk any

Haendel St. Juste

more expense guide earlier, for key you One I more your I enough. for the the detail side. appreciate embedding a was components. Okay. specifically Fair on for there specifics the high-level R&M on overall hoping what but thoughts initiatives. ongoing also and you're the provided key some in insurance, on like maybe the components tech taxes, bit

last $XX of year, or so million that. think outlined via I savings you

could we initiative this from Just tech see curious what level savings year. perhaps

Robert Garechana

cover on it's Haendel, initiative revenue he Michael but can on it are of Most year the the on detail this focused, expenses on Bob. mentioned, something. initiatives, some I'll I and to initiatives. expense the Michael more if Yes. our I will then maybe as focused touch caveat start side. initiatives with than don't pass

X% call or the midpoint, at it, estate lower utilities rate the they implies in did expecting, than means around, kind rates 'XX. That related have specifics to higher on we are I tax of we'd of what in categories to So estate grow more and real a taxes some real growth what mentioned, around that and to growth as relative utilities X% were XXXX.

experienced categories, of pressure you XXXX. a other the big On of equation R&M, the which have lot side on in the inflationary

that expect to normalize. We

reduce R&M dependency more some pressure. there's and expect on we X%. grow we wage the the are labor of to where opportunities is to something like realizing on and So places initiative that our That done contract where work front we've

payroll medical 'XX. So we growth. the benefit back-end we're as much not challenges to some anticipating side, of we're anticipated payroll, that's the optimization on was think loaded us in we helping that yielding and And X% did just get

any XXXX. we'll the help realize Is more Does on color categories I in that that of So you there missed? benefit side?

Haendel St. Juste

to million it $XX second, that's outlined this helpful. have in efficiencies And that expectation -- do No, But last year? you you accurate? I year that comparable relation from for believe figure a is tech-driven first, was

Michael Manelis

Haendel, it's Hi, Michael. Yes.

this So let years. that many me for now really for we just saying been the company portfolio is last that long-term foundation start focused to years to initiatives creation really, innovation entire have And the several by deliver the come. these has going value around created to

this November With that the highlights operating creating model to the the platform experience on our evolution this materials customer of seamless this mobility presentation we in technology been has and investor focused in really while that improves. efficiency put

look that about the our was when the NOI that's over over low payroll you in of at accounts $XX and early the The All couple that numbers R&M some the up and last achieved improvements more in years. the several expense with million And mostly of in, shows growth. we've focused, stages years. about already expense clearly of identified in $XX past million this of

$XX was revenue Going forward, the in that we front. $XX In that million and payroll couple improvement, accounts a million categories, about XXXX, in and expense we've X/X was million. about of in primarily of dollars and on delivered expect identified we another NOI the the about of

XXXX, annualized half about as layered year. guidance the $XX another is And half of meaning with million back the in of some income we've loaded, accounts. initiatives of realized included greater to in growth in I get this all benefit Specific these other about $X.X is only because million from this number are these

done with things well. this wired something sure company. for identify this of I would is the on, I reality But expect So excellence. to And that's It's I are really DNA I'm you going operating new our in the revenue more guess is say almost and to opportunities. is, just overall, that future pursuit to we're going into goes the of enhancement this never really future we're should foundation continue years years year mean, place. operational as have as

Operator

is come Janney. from next Stevenson from going Rob to Our question

Robert Stevenson

ago with and issues are of trading talk versus Seattle, are few ongoing markets in Francisco you debt San LA things market are? can about a they like robust Urban life dispositions the where if pricing quality areas bad like Alex, years for how is they or

Alexander Brackenridge

Yes. tell markets saying what the I just rates from you haven't you test are no time, Rob, in we now, listed. we don't I something, they Thanks, sell because cap mean, I couldn't right Alex. activity wouldn't been it's time freed. not market There's almost -- but to

So it is really frozen there.

elsewhere. our frankly, efforts So we've concentrated

Robert Stevenson

to is that their that lower mean permanent just Or capital allow act -- and anticipating else something sort that back? you're I And get of the on is submarkets. hope of will there come hold those a couple some simply just of some for on markets of years, that impairment level by there priced cities sort together? of are Or

Alexander Brackenridge

No.

transact there of sentiment the These Mark sidelines. as and And as cities. would life. and improve right of now, all what a just even recover, now. we great lot. mentioned better negative of happen. right that mean the at are like talked of really are we we're occupancy. think themselves them buyer Francisco a absent about, that, that I headways. making to jobs I recover you doing cities expect but serious the they're frankly to is think cities sounds It's opportunities XX% amount elsewhere, people and tremendous in really to The are still it are on a investor capital Seattle quality some we're San the likely things There's Particularly

Mark Parrell

mean, too. just drivers. markets, Rob, have could about these powerful downtown though, And that, We Seattle add and San to to L.A. particularly think may you Francisco, I

positive it recovery was on For has it's been when on about still. York, were New vibrant. talked York like City, we us, everyone and New down That we

I think And few the same markets these I pattern not of matter if, the think the a side over it's a of recover matter when. it's greatly It's here. next on will rental years.

on that early into them. this you're too have not markets the with season leasing we is associated away volatility in from do in when yet really call excessive What year enthusiasm shied the

at So markets permanent I impairment don't feel these any sense of in all.

have pretty you're pattern that's where, in some going York, again, sales And well. in York, and you're markets. they're trading a not it rental that strong New certain has think great I New really the to in are growth, you in recovery likely have market going but like to investment a deals to these follow

as why to it's in Francisco well. But I'm few San wouldn't take time. well not a sure so going And years and trade some very just Seattle

And the again, really not time for a And it. hesitancy of around here our catalyst is I think line this, the for our investors. occurrence it's

rents lot a in is and wood to in think potential than a years. earnings portion lower future unrecovered higher huge a portfolio piece in our having I income they the is 'XX kindling of with were markets of

Robert Stevenson

expecting between what Okay. bunch helpful. lastly two That's that or or one you're normalized And large me, items you guidance? Is for then Bob, FFO of difference ones know that the today? small day REIT given what's $X.XX a

Robert Garechana

one talk There's Yes. advocacy larger contributor, is costs. I'll which which about,

election forecast advocacy election XXXX, higher forecasting as other years. costs year the pursuit facing, and levels are initiatives, the are sorry, -- typical another some And that balance we remaining costs given items. we in atypical which is for and So then an that pieces of not it's ballot of sheet are

Robert Stevenson

in that advocacy that out is is Is well? there other California? Or markets spend entire there? as Or

Robert Garechana

California. predominantly It's

Robert Stevenson

is Okay. I there you this And that is a that ballot. you're anything that's is like to up the looking 'XX passes, that guess, it year of ballot this being other I really chance cycle? it or But negative anything, that, guys? related would mean, mean, put or this for every wind a keeps on especially about know lot stuff there every I being worried I

Mark Parrell

We're focus The industry. the there's Rob, legislature zoning regulatory be Newsom to time. by citizens industry XX the Governor positives measure things in some the good funding it's ballot California more reforms. just supply voucher by there's the before, on the rejected a remind of rental about biggest The being with is solution, with in And unit the the going organized. negatives is the to the well the of and supply it legislation, have ballot Mark. the lot of make each points far I this done percentage and the everyone, been same being area. And arguments accessory of mean, dwelling point to twice solution. honest, has

about it to housing Hochul They and York well done more as place. relates side, we and got And is hope lot when but that couldn't to New the of in the a reform to hear policy us. industry's be hear than Newsom. about zoning some obviously as so zoning housing supply, the the reform, be was allow Governor same people different Florida to Governor to regulatory DeSantis great honest, Governor has I more things be turn point thing in built. on trying positive He resistance, affordable still in

So focal and markets point is, have positive organized not what Colorado, dialogue answer, understand think and year. rental by in your always But large I question, regulation. those at industry and That's conversation. the to the markets. And on that Massachusetts answer going I well policymakers think but this the us of California like we're York New that large supply is and to is the here. there's

control in through they've of conversations about a people more that reaction calling a You is direction after to the get the heard and you other we talk arguments. hear something that our and rent lot lot the

Operator

from Our Anthony question next comes Powell.

Anthony Powell

are trying question spreads what and I'm customer two these numbers are and the paying groups effective? net A the what's groups. these customer leases. guess, in to on about lease understand gross better new terms renewal I'm absolute, for rent, of two actual the I curious and both

Michael Manelis

sure that is not again? Michael. I'm rent part The I'm equation. you absolute this of Anthony, following. the Can ask

Anthony Powell

of customers. paying customers groups leases renewing between of get a Is I'm higher So the renewal new on two? on absolute big and or there terms the two or between difference this trying absolute new leases? to lower the a rent. Are pricing sense of in difference

Michael Manelis

Yes.

I think them, at we're when wrote at rate of concessions when new net all versus it we effective the renewals. the think in that leases the because it the the on side, look of absolute you you lowers I offering that lease the of average look like some

Robert Garechana

with of and materially And trend spread, of and whatever, one the is and looking so depending starting thing to Anthony, keep looking in is you're kind moving at on market that's market out. you're too, rents, spreads can if in the pricing right, when vary mix your in at who rate mind or moving

have got big then in expansion in very used X I an that and happen Michael year absolute. spread be than be to a as the renewing, market. And unit can lived different if I So an concession for example the a one

So any you mind first keep think seasonal mind then look just low, even is the And that you transaction like spreads. number. activity have fourth volatility in can in in these more and at it the as periods as particularly, quarter, keep where really of you about quarter the

Anthony Powell

more this And you more expect deal expect Do recently. one to transaction been your do as maybe Or you to activity. year? you. activity any on single portfolio see it be later asset had Thank deals

Alexander Brackenridge

certainly expect certainly might it know Anthony, we'll probably be and to heard some to, that it's I out but seen. be very that actively Alex. and things I are remains if pursuing there to. about But hope I I interesting, there be don't will, we've them. we think

Operator

question Linda to from next Our going Tsai Jefferies. come from is

Linda Yu Tsai

pull. stability job and examples Seattle Francisco. dynamic Could your associated one highlighted of to San and that prepared what just loss in with in volatility mandates? you you comments, In Is seeing maybe Or Just this drives work this return push provide pullback question. discuss and more? some

Michael Manelis

this is Linda, Michael. Yes.

that. the of So is patterns also influence I one clearly, growth that that. job catalysts The think migration does

seeing of deal So concessions their within where your you usually where MSA that's it. into the see to lease they responding seekers. breaking were are the lot either that a to are from and more people move-ins to coming move Those

So you sustained seen like it's on would the based just just -- seasonal momentum that haven't trends. expect you

people I of any their some nearer layoff decisions those decided around before a waiting ambiguity were. employer going think to return see you get of last where year, you they announcements, do where saw was make of were what office lot relocation kind their to saw into offices to just to to

in markets and see of with we marketplace that right some still we the those see But is us did both now I of setup positioned occupancy. the exists that has what today. think good in what

and of just to into there's starting kind you are have sudden looks all them and momentum But watch power lot back sustained and more get to a a market it stalls of the that like. out are really build of going line why that see We in not shows seasonal trends. the in factors we'll pull April still whether with pricing or March marketplace in concessions we as and what see concessions, towards

Operator

left turn the queue. further Mark for over Parrell back I have it closing questions in to no I'll comments.

Mark Parrell

appreciate interest this Thank in you your time on there We call. all day. and hanging today. your Good long for

Operator

for this your And Thank you today's participation. call. concludes

may You disconnect. now

Equity Residential (EQR) 31 Jan 242023 Q4 Earnings call transcript