EQR - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Equity Residential Fourth Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] At this time, I'd like to turn the conference over to Mr. Marty McKenna. Please go ahead, sir.

Marty McKenna

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

are Chief our Garechana, Operating Financial today Michael and our speakers Officer. our Manelis, Officer; featured Mark President Parrell, CEO; Chief Our and Bob well is our with Investment Brackenridge, Q&A. Officer, Alec us Chief as for the here

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

Now I to Parrell. will over Mark the turn call

Mark Parrell

you, operating we'll our will start Financial today XXXX and Michael speak then guidance, XXXX XXXX XXXX guidance; Thank will our your for results and our take us all Manelis, Chief for cover our full performance COO, you joining our to Bob I Officer, XXXX. questions. off year then Good outlook go and us and ahead then NFFO will Garechana, Marty. fourth and morning, thank discuss to revenue quarter and expense

We also management our on last with posted some detail. presentation night additional website a

to spend I colleagues the my before want of to get And the Los I a remarks, my thanking market. minute meat in Angeles

done they've and each time. other our all to For residents difficult support during this very

to been blazes. in to first seriously who has any out tirelessly battle We else the by firefighters, the a impacted special are L.A. but everyone had responders fires, teams fortunate property have the else, of everyone to our and lot. worked all not and shout through A

debt same-store of of in end a bit XXXX. the lower expectations. quarter, had at what We us better guidance but bad finished than leaving fourth improvement beginning solid revenue that upwardly results were revised midpoint the to good year, slowing the our Now at we of expected with the previously the the year turning with

levels with determinant across our market Demand performance. very of portfolio, of main supply, remains good the

our XXXX providing and great the corporate, want once I across who outstanding XXX-plus properties rearview while my colleagues expense a service. customer putting Before at growth, did in mirror, job managing to thank again

very are average X.X% growth same-store done X and years. only of expense X.X% over of XXXX in growth team. an We of the proud expense delivering same-store past delivering Well

I And than now guidance moving a earnings but In XXXX while in Michael are that in with contrast, supports to these The quarterly of same-store provide as to pace acceleration half. growth XXXX. the minute, we our guidance year the the and management we saw half on of in some show provided last the about that year. to expectations. economic moment quarter-over-quarter first operations. just historic presentation, we guidance In both similar a expecting the XXXX, our Bob growth our back talk considerably to are deceleration for in better on and revenue going in release should throughout color take the XXXX revenue annual XXXX want outlook growth

range expect we our in especially we graduates, office-using growth, Coast. residents West our the our as be on key XXXX with of downtown to Francisco to the a college job improvement driver in economic seeing use, XXXX, to Seattle Peninsula and the see of bulk in third-party we and on stay higher X.X%, we is on are than The at both which market, XXXX. it consistent the that in of that theme. operations we San Based expect very projections, low currently see Unemployment business in beginning downtown and the in are

driven by well markets than and looking signs dynamics is given deep note most our of housing for we also by our that setup supply this earnings rather operating is see in as -- the very demand as of seeing supply at With our the business. by headlines. tight guidance our we I as positive of in positive already knowledge our looking our dashboards are the markets, current at

in and is on While included than there recent in we hard the a various to certainly higher we'll our governmental relating business over that economy impact level acknowledge path currently, of larger in the of forward the estimate other is and tariffs guidance actions is these to not uncertainty given evolve usual, our time of expectations. economy actions matters, the

being is business cash uncertainty in foreign flow said, times definitive fortress the strong sheet of a That positive. a with heightened balance without operations and

of in similar where competitive be in markets. considerably established supply at we XXXX a income, operating looking at our our markets, Sunbelt apartment expect the coastal of But level XXXX. units as to inventory existing percentage to XX% So net of we than a have lower in completions

these exceptions With markets. localized absorbed housing some in we this that coastal discuss, be Michael well expect supply starved to will

terms to will established that in supply are So properties, with be to of delivered be XXXX manageable. units while XXXX continue competitive similar overall our market levels

lot is similarly notable continues XXXX competitive starts that starts to least Sunbelt about starts, our in at levels normal restrained. with XXXX be likely about a to declines footprint of we is of in While half coastal conversation there be think were it

rock percentage our the we're great after at just of a bottom established crisis. last as total existing in seen inventory, markets starts in levels financial XXXX, fact, In

total As pre-pandemic lower in the a our markets, XX% than result, we average. see around coastal deliveries XXXX

markets versus is even demand setup into the now and later sum, better will In coastal good and this year trend likely our in supply XXXX.

about where Austin, NOI. Atlanta, expansion Turning Dallas to net Denver, our have markets our and XX% of we of

at than elevated deliveries XXXX, an lower still XXXX be to but level. in expect We

delivered that still in off will be also We XXXX, XXXX. markets working expect supply the in these

allocation and time it Overall, so demand our and all currently some When we remains these think good wisdom current take strategy, absorb incoming supply, progress, of growth do we eventually uneven. the but confirms apply markets the job portfolio. in markets expansion in will seeing having a it over these be again In to to in what high will will us capital a are moment, we Michael strategically diversified will our to go markets. this

an own long-term highest growth, sector to in apartment flow with into minimizing cash is goal that a has the account portfolio volatility. the total taking risk focus return on Our and

and and achieving And demand, properties to we by catering in XX well-earning desirable renters and are or best can and this lifestyles areas the have goal supply, efficiently most resiliency the think demographic. operate the We so systems. of with industry-leading people where we balance for metro this that our regulatory our opportunities risks long-term present

located our of in development while of $X markets. expansion of projects towards and in about investing delivered progress substantial XX% goal entirely by having these acquisitions markets of disposing made almost during coastal older We our in billion markets NOI billion our our in $X assets XXXX,

the Our markets urban. newer, and in portfolios well-located feature properties expansion suburban a between with balance healthy

guidance $X.X of in billion and acquisitions given dispositions for XXXX. of have $X billion We

As you of from can see, dispos. using the we activity our bulk acquisition expect proceeds from

our will are guidance that acquisition that and that we We acquirer a we net fund in net also activity will be debt. assuming using

if, using is expect acquired activity. You numbers should only very net support transaction material $XXX like XXXX, light. million where activity in the that debt, Currently, we acquisition activity

activity is in that Assuming would market Officer, would Q&A here hope the to our Chief abates, period we color. Investment Alec pick volatility Brackenridge, add up.

for across for and affairs and others success Altshuler, We Finally, better great housing partnerships more California private doing guru less across in ideas anti-housing encourage and job industry rent advocating solution outstanding I the rental like to regulation regulatory supply had housing public wish an pro to thank last the quarter. Barry our and like control. country against

and pro Equity Residential be to with housing advancing its policies. partners continue will a industry leader

remains life in definitively tide central While and policies. public on safety our seen our risk cities. political more we of markets, housing in have thoughtful turn quality focus a And the towards

I'll that, with the And over Michael call Manelis. to turn

Michael Manelis

fourth our outlook Thanks, review quarter morning, to joining for operating and Mark, will and for thanks us I today. This XXXX operating XXXX. performance everyone our

In our guidance the management drivers additional our night, earnings last published that provides will refer color presentation a of I addition also that on we've detailed to published release to.

drove which lowest clearly portfolio. the well-employed I'd favorable demonstrates This renter turnover bringing like quarter year to occupancy a which XX.X% population, the in our turnover is our company. healthy in growth XX.X%, success full supply which reported have both our for demand the to our ended public met remarkable fundamentals was solid we our and reflects quarter. fourth year just blended with of also from X% We that our dynamics continued strong resident X%, highlight the of of forecast in a as a and rate and creating history XX-year experiences demand

including maintenance on ability X% X% expense. reliance X.X% payroll to outsourced resources year, expenses for expense side, This growth growth to the a operating the same-store share On properties highlights flat the with we our in and have in reduction growth minimize below and repairs across again special labor. in call and out kept relatively turnover full a

are X/X the a We provide. to further place, resource excited of opportunities pleased report our and properties about that model additional automation in centralization we're and shared that have

XXXX. to Moving

moment, your X.XX% range revenue will growth but the focus X.X%. on of the a growth me an attention growth is revenue Bob expense X.X% range for same-store X detailed Page presentation. let in rate management Our guidance with of blocks the X.XX%, to building guidance on to provide expense on as color

starting growth be in is of XX will XX% points demand strong Our job the total lower new in better points be very revenue than manageable expected are with overall leasing assumes through the and strength largely our growth our of markets, is our of this basis established start in during from but in point by which averages, gap historical made particularly activity competitive up XXXX stronger of midpoint the embedded activity lower levels the the following: That at and continued portfolio. markets supply end leasing we XX in XXXX, XXXX. driven basis to forecasted

than full rate Coast expected XX X% a will portion West and to year, about coming what for This full of later. year ], which markets is XXXX of basis X% our that the improvement discuss yield better that is good I delivered the of from some with [ growth points for recovery blended we the between

We in retention availability high and result both enhanced cost as the and the housing analytics of and low expect a process, also our strong insights data owned continued a resident markets. our of of centralized renewal benefits

identical presentation. the X.XX% remains This that the in by of residential nonresidential the the to is X% get as on offset midpoint to turnover leads earlier, of which the partially expect we to lowest Page which said continue portfolio X in we to I of and trend history to is seen have our our same-store same-store that growth, revenue in company, approximately management described revenue As then XXXX, declines range, guidance in XXXX.

will strength our that Occupancy us rate. on hold at will also the allow should other levels year, similar innovation benefit focusing to a last will great experience. continued efficiencies and income through expanding from drive pricing while line. ensure the it year, results efforts we to majority at additional of with the execution all with capture data-driven on which provide we Operating our automation running initiatives analytical This that operating to retention to endeavoring be strategies, customer and

we the our XX In to walk rollout with growth Internet from past associated will or programs. that the through technology large have and income overall. of other will discussed Bob additive but expect it basis that, net-net, further be initiatives coming of the about earnings with these in in expenses we XXXX, majority points nearly a connectivity million and $XX

performance, market overall the will New pack revenue DC approximately same-store Francisco lead with X% of and follow and terms of and closely San behind. York the Seattle growth should In very

Seattle growth include markets the downtown in have our potential And we recovery San get some to While pricing both and in did guidance, more early in Francisco robust outperform our if the power we year. further the which negative markets, XX% of albeit expect total reflect elevated, of need work to we through the supply produce revenue company given system. the to only that NOI, declining impact levels expansion of same-store

this in As like Los Mark's gratitude start to to with amazing where I at with Angeles, would echo the comments look let's individual market. our markets, we team tremendous

potential of impacts revenues cleanup that moment. from expenses operational guidance the discuss will not does in a Our terms I in or fires in assume either

what included. we Here's have

see in with last consistent did the followed Mid-Wilshire, our So expect most first, by but than impact the manageable to year, impact competitive us. Fernando fueling to an but be Valley, on the will market and we the will it see more Koreatown the without San with increase, supply submarket pressure portfolio significant which XXXX,

guidance Our to which work the that growth. will bad to assumes and through market debt continue will revenue delinquency additional contribute issues,

may be improvement improvement, late of which from the modeled on to depending but moment, again, a full we L.A., more is happen to now in limits X%, guidance. in a results improving Physical taken regulatory and continued in response brings the be in revenue trends for same-store market put regulatory us in occupancy started discuss last year, in I'll actions pricing to assumed by projection slowly year As may around L.A. this fires. and what our the which than the impacted our any this potential impact fires, place taste

has lot While believe there operations. too it the early been we to speculation, full a on is understand of still impact

likely impacted negatively There fires turns already in which recovery especially process seek demand operations. our also of from incurs could seen There in in and new comprise response. and be will the be will about governmental market likely accommodations, twist the impact XX% X- more which and actions also X-bedroom submarkets. various certain our L.A. likely company residents have we governmental are be the that as fire the to There units and in expenses cleanup the portfolio,

we case now, feel For our best is like assumption. the we outlined base

in on better expect general San the Diego to on first performers last our We'll see quarter here keep call Job good to is Orange the County of that what year. markets and a both these that Coast, and we'll exceed of you there Staying have continue growth April. In and levels, is XXXX, XXXX lack better expected anticipate on demand. we were housing. a markets West will posted color in some happens

markets about attractive we expect option. slightly here. San Francisco, most to these see competitive and submarkets pricing lead the would [ should Peninsula XXXX. mayoral life markets in demand in which in renting to supply the improve, Job are in commitment and the performance optimistic Both new make expected additional to costs continue homeownership of to improving are But growth High its more overall, city. we the In are XXXX. in administration expectations ] quality and downtown power strong the good

mentioned demand the San ago, enough possible market overall submarkets. I and primarily from for the some in Francisco robust both moment certainly a Peninsula and the as As is A early have pricing the in recovery downtown we improvement more modeled conditions operating with year. growth coming of improved

significantly Currently, in in in concession San especially downtown the Francisco overall use XXXX. remains elevated the market, but submarket, improved

and in increasing, if lead will see are likely market begin which in further the net will expect improving with we We occupancy, to to a most effective these hold. pricing pullback improvements rents as occupancy concessions, occupancy gains

supply XXXX no in very Francisco to for San downtown of XXXX South in absorption New is most forecast has the strong. almost where in concentrated with Bay, supply similar been it quantities San Francisco and

second Amazon begins in increasing of the half from employers like Redmond Seattle have really abate 'XX of We Urban bring heightened as look pockets supply, good and to also feeling about are their pricing and power in supply demand and finished office back strong Core year. XXXX. continued in teams in to the particularly to we position the resulting a submarkets, Despite this

issues in has in after continue pretty quarter up in a it its our improve, of declines. Quality power life our city good doldrums. time, of with held pricing and during Competitive a step a when to the the the normally XXXX, peaked deliveries city portfolio bounce the stretch of period fourth and in

markets growth in to strongest Seattle XXXX. our be one revenue expect We of

majority finance, limited market in new and East should in sciences, supported well Moving education. high employment a to XXXX. Coast competitive life the by market strong in Overall, Boston. perform occupancy health tech, starting With is this and well supply, base but us, the for will suburbs, The Core in Urban of same our in new of of the given as located be deliveries assets are the bodes deliveries last the will which year, XX% the Boston. in XXXX be about

will assets in 'XX, XXXX. Our spread we ones outperformed urban even in and suburban that expect greater be

high, market York our delivered and 'XX, occupancy the expect Washington, performer New we and last strong, have to was we performer D.C. remain year, top our Manhattan, is base no top The XXXX. competitive being was XXXX. and in is in new for employment our of almost expectations portfolio. supply where a there's high majority in that continue

more considering market here again year We're start a policy almost the a units has will employees has the XX,XXX for to been very in year. in job occupied the administration the local which and XXXX. color than The is is And here the office absorption and on cutting have so delivering wild will good on impressive, that the return to what do been XX% its new focus impact a cost market. market, and federal both

we long-term environment expect metro But in outlook see markets, positive continue our job remains higher-than-average our areas. the to is growth operating as those expansion near-term In to challenging.

stability will lease usually and while X possible, -- do and new volatility the they We new last spring in we is in improve currently occupancy have in season in expect these rates And the seen that markets. leasing months. Dallas Atlanta busy rates as lease

close today push Denver, deals to these in for assets year. the lower as with improvements in the XXXX Even proximity it to expect revenue In than could expansion our in challenging be some are was we in same-store later have hope conditions, our in operating XXXX. conditions that markets in new we improvement

focus results. across year. to for full give teams our company our here opportunities power sit help and position. for our for today, their which a looking frame the want the like season continued as out Looking shout these brings, we on residents the level we really forward platform We're dedication the spring to at to I pricing overall our will leasing capturing amazing delivering

of rest our With walk the Bob XXXX. to expectations turn that, guidance the I'll call for to through over

Robert Garechana

on Michael XXXX. with same-store normalized expenses, for through capital markets With expectations, and activity color finish same-store walked me just revenue XXXX provide FFO some Thanks, anticipated Michael. having let

management EQR core years the over Expense during remains XXXX. and expenses. to strength a as Turning of demonstrated

XXXX, Our XXXX X somewhat Page that of strength. of management presentation, growth to as implies outlined X.X% the higher XXXX than on guidance X.X% reflects in still but

As see, are items. incremental in you of from can the couple stemming growth a expenses

bulk we are million approximately expenses expense as adding portfolio. deploy WiFi $X connectivity growth First, the to in

they so NOI will to for As year. Michael we the be revenue, mentioned, are also adding full accretive

step-ups XXX-a to New step-up We're period. nearing another handful York the a have of in properties of only of in with most end abatement we tax down portfolio. the year Second, the

fully in taxed, the convert income market As once affordable future. the we have rate incremental an mentioned in there is opportunity to units past, as

growth with items, utilities those incremental to expense low little similar and will look same-store up Beyond growth X relatively growth setting in the XXXX, comparable from XXXX, period. a tough but payroll a given

NFFO. This Page X of also some bridge the found range. to of outside earnings be release. the NFFO a same contributors our provides with narrative in along guidance bridge store, to around Moving midpoint can

same-store provide categories. Beyond let couple the NOI, some color residential me a around larger of

is our is contribution from market activity But in There First, NOI. contingent that XXXX will could this from buys year. transaction look some coming mentioned, conditions majority so this last be and upon The Mark XXXX. change. transaction impact like, sells of assumptions what and as our

majority refinancing maturity The $X.XX is mostly the investment from about of acquisitions, to from in increase More activity, expect a expense. of increase from also we our anticipated interest what rate. XXXX coming Second, be increases of in a that second. higher the balances in and about interest expense coming with

are the unconsolidated runs our income with from is investments NOI. lease-up ventures line. debt $X.XX NOI are consolidated of and our contribution projects joint entities those encumbered lease-ups income in lease-up our few coming unconsolidated project-level expansion net through in from markets from from finally, The lease-ups. the And from majority that The

up were late will these and unconsolidated the of be X completed leasing in year. throughout XXXX development deals JV

not the on capitalized these velocity of release. income to of we in interest to leasing do the to on contribute page this current Given guidance joint cessation the assets venture added NFFO growth We've XXXX. and expect loans, specific guidance earnings

briefly XXXX. anticipated markets Finally, let our for me capital activity mention

with a expect won would maturity, year. $XXX note We note most X.XXX% unsecured million, debt. due refinance significant the which at is or of likely this in maturity, have June to near We this

commercial have exactly ample off be pay capacity under maturity. liquidity about and would float to expanded paper and the program our refinance We when this we opportunistic recently

All mentioned. other financing and activity activities as Mark transaction will be upon conditions, dependent

million Our that debt million to debt issuance, $XXX billion a modeled of adjusts. being guidance $X in acquirer however, because assumes $XXX Expected net our as issuance of will guidance. we adjust

to begin let Q&A. operator that, With over the turn it me to

Operator

take Wolfe Citi. We'll Instructions] Eric with our first from [Operator question

Eric Wolfe

much acceleration You in you about mentioned we accelerate think And by -- year versus where the that of same-store how just improved should Or the second fundamentals? or versus first of then throughout the driven you expect is to you're versus type year. what revenue income think start other Can talk that half you year expecting end it? should half? the about however

Robert Garechana

mentioned start Bob, the it's shape front expect with that. be the in there's acceleration drivers we be back main of associated The quarter-over-quarter be. I'll that as year-over-year, of but the end kind the Yes. end growth than shape of revenue to of that with year. will the what that And higher such X of Eric, outlining year the you should the

The the with XXXX. from starting and that the lower actual a lot growth first activity coming we're in is than leasing growth driver is really embedded of historical, a year

third which you leasing seasons, through quarter, get contribution to second the and that the as come the quarter start prime so quarter-over-quarter. are the And you see to

good that so quarters, in associated the portion there's because relative growth growth. be the front back-end lower which quarters. a embedded And will to of There of lower

the you has shape have also the income, other that, Additionally it. got of to which kind to same

through program have -- have the the piece. WiFi a rolling as lot so growth it, out that you in also fourth Michael of quarter weighted and more is component as the you So connectivity, is third mentioned income you roll the of other

higher the the QX. you lowest lower, kind income a as overall quarter-over-quarter revenue, should perspective QX being a see and other bit that and a little it see the in you then relative such quarter to see first as get from to you same-store you of contribute So the activity leasing builds and

Eric Wolfe

can think that SS a helpful. outlined That's markets improve not year, perspective, maybe to then maybe rent least to at blended for of And you first improvement from the you expect in about expecting I understand the those revenue sort how markets? better half of might Sunbelt, second Sunbelt, blended but the you a the half? much just you're throughout I'm same-store growth of be rate degree like versus some talk sort and just the it. Got from trying

Michael Manelis

Yes, Eric, this Michael. is

So for I in you heard I out, think in renewal I'll mean tell We shape the guidance release to talk that I process. you, a the our equation, now. some the follow quarter you've the as And would first right play to which gave before mean, X.X%. is how X.X% blends consistency in me about will

flat by going So much quarters. renewals are pretty these month throughout month

I the would that to quarter. again you probably see strongest, year, second accelerate you in which moderation the start So expect quarter fourth of year out, clearly the would you then build, the as the third play in half think the having but

be as other doesn't the It's middle than materially the work look through of your elevated going different the to shape just So you years. it's -- year. way

Operator

Sakwa Evercore now our We'll next from ISI. question Steve take with

Steve Sakwa

you're we renewal pleasantly of of expected. had month-to-month quarter, come away that, did think, trying increase leasing could maybe guess on rates we on renewal side of know surprised X% in leases but quarter-to-quarter. But weaker a where I out? new fourth a you are than in, our touch the get were provide going and to I ton some color kind sort the from just KPIs I

renewals sending are today where portfolio across maybe out first the in you So quarter? the

Michael Manelis

Michael. is this Steve,

I we has various entire across you, the to changing. just do first, us execute handling renewal renewal a the to have like So really conditions allowed remind team we all strategies process, want negotiations, as our markets including see which centralized

the in rich months we're up dealing process now, leasing season into Mark. tightening of renewal with we start like as are Right heading negotiations that that

portfolios in conditions love occupancy the position We San improving Seattle, Francisco, that have in. We current are the that L.A.

we expect in the got next for X% confidence months now, of say to right a and around would performance right quotes out the the about portfolio I'd the to insights. of the are marketplace achieve range. We So that stability kind We've renewal increases there in lot that that are in got now. X% several right of good somewhere this

Steve Sakwa

Great. process acquisition sort new have million, then today, know on on thought capital moderately $XXX those development curious, where yields kind but are And a of development net of you maybe projects? do I'm just to volume looking up play yields I pipeline. how And into development you've you're got the of acquisition how do deployment. active your at? yields does stack

Alexander Brackenridge

the Alec. uncertain cap for acquisition be tell to X%, round it's it's you It's right are start lot even pretty rate. of moment, Steve, frozen. market transactions right because there and an to I able the can't peg now, But a is assume just market a now pretty of a

location And are product. X% think down some been There's get that's that it's not lower So people too build unless to you'd you overall, much. like they where to and hard are going it's But I the to number for. rents And shooting pretty most really with like, think you could to really a around X%. costs. simple a costs for

the being stuff urban even really out further built and not ex we're suburban, seeing about. we're more more stuff is further So crazy

So really we've been patient.

at the last able starts suburban to X something we're year we year, that's and But in starts on right would this up year find reminder, and geared last geared this that's Seattle, really would buy X looking make X -- just -- for be -- if work nothing we as which numbers think appealing a place, we be keep we'll what year. tough Boston nothing sorry, have us. where suburban for don't location, can and this right and the up pursue. We to we starts to a now, But it's yet sorry, from the

Operator

question John Street. We'll Green with now take a Pawlowski from

John Pawlowski

relative around likely I that question XXXX that down in Is supply down curious assume it fair I'm on to you have being if -- pre-pandemic -- a mix norms. suburban. pre-pandemic suburban market follow-up no just suburbs? your comments Urban's -- XX%. the XX% that and to bifurcated urban a than mix than between more the and now are ideal urban you then runway have how your right if might Urban significantly supply so, longer thinking of given And or between submarket about

Mark Parrell

Mark Parrell. it's John, Yes,

say Eagles, off, like, think I'll Second, perceptive. go I that's to we First you, think, with right? agree, your I comment,

to urban lot a see the don't new to you established some of and those why numbers in talked a urban longer a presence to as the continuing see product make having build And this stay urban built, numbers submarkets. core those in the runway Frankly, need of in being legacy to urban all at we've little point. On markets work markets at bit about we the less work. side, we of And well. areas a that's exposed in our our high-rise

of been in areas. supply, deeper typically demand There's but we pools think to going more, change. dynamic is It's that urban

like appealing, worthy being varies is the and we City. by amplify frankly, of that. investment. differentiated to urban think like There's of continuing places But less Alec city that Central can So centers are every Dallas,

And much to there's lot our have supply, Atlanta appealing are but of demographic. do places like Midtown a more that

expansion areas, as markets these well that continue going of But to out. that focused current urban investing balance we both in as our are we're to been So, in new markets we've on. kind coastal

Alexander Brackenridge

in some without of very distinguish do CBDs sometimes a we we're so neighborhoods point, people still offer some seeing quality the are With the only urban Mark's CBD, which issues the great is legacy between, throughout closer of the think To Yes. area. only but that country. that and dense life say,

John Pawlowski

months than moving capital to should -- XX Okay. forward? read-through to relative your of in the X ago, that But months to expected be are are you XX allocation guess X more higher being or open-minded guys you concentration you ago it urban be becoming guys I terms

Mark Parrell

I'm that's great a not sure deal. changed

think concentration exposure when But difficult during on the like are few will changed. COVID. has in assets the balancing the a Coast submarkets. mean, benefits don't We a the centers the it. we of sell talked our were just little I We I we act. certain things about in the probably urban opinion time it's There urban areas. I in over West John, concentrated think that because, over even we're urban like

And benefit think it for being so a thing so of whatnot suburban numbers not the in that going And having where us. distant New all ex-urban and to a you're or like a think more we're having markets I more in -- suburban. I is Dallas, next our kind Now see the to that or diversification there's said, year Alec going markets lot we're or where good then But urban toggle. as entirely York like urban. like little be of I

year ago, we different think And our we best invest good but have feel about -- frankly, urban, it spots so I too. in. good feel markets a yes, about to

John Pawlowski

question, news on last Michael, hour. My early it's flow in really just market. the the know changes D.C. I Okay. the by

layoffs pricing Just uncertainty on your the potential about the seeing curious is employees? tenants existing what given or terms on ground traffic, local of power and federal tenants foot for in team new just

Michael Manelis

Yes. It's a great question, John.

right today. So I tell you, XX.X% occupied D.C. to I mean, is now, got the portfolio

of expect We pricing on curve the par year. the you than would have to that's better a beginning for slightly what

on feedback anything really the on-site kind right renewals. like seen through terms flow now, we In of of with haven't

I is edge. still bit little think on a everybody

still concept lot And to prepared terms I said that of each a would overall the the layoffs there's bringing people does this uncertainty on other like I versus remarks, impact, I of I of in the say, in back in into office, as demand. think guess, demand neutralize my

see the a I angst of kind months. but plays there think next out how I tell can little of you I just early, it's too to on and know bit are over still market, couple people right now that course the of are we this need So the in

positioning is strong. really the of portfolio today the and But the market

Mark Parrell

industry-related employers a to I there employers And used are it lot, there. by stuff, weren't the sent other way, which was the defense lot it's I of be. may of general is John, the the sent guess restrictions. mean subject not I to e-mail staffing diversification There's be than those that people the Mark D.C., in know federal same better of workforce. to some same a

number that are be and away And just and Those a ups portfolio are them people demanding But D.C. slack the that definitely the because Michael very currently workforce, a from is soon up downs federal in maybe And renters asking workforce or people of as terms there. think for being that I of renter higher defense focused in smaller might far office. forward. going already. probably not new are us So that concentration. end there in said, little the it

Operator

next take now with our We'll UBS. question Michael Goldsmith from

Michael Goldsmith

seems on of first expectations It stronger first is My quarter, seasonality. question the a year in a but a quarter. fourth like this second is row, weaker with maybe

then a it influencing of 'XX. about should this like the be the are the into quarter that? also the sustained little So fourth And momentum through factors can bit that comments within talk seems year that you

what So momentum years? was the the you of trends can that be which year, gives last this in through X sustained the kind like confidence

Michael Manelis

this Michael. Michael, Yes. is

fourth think deceleration. then tell with played into the have great your way expected from example a to where it seasonality see quarter spring mean, corner would is the Boston play some of occur. we a that, I that Clearly, like kind and and out. of turn very you the I see I you the you pricing normally out do you, And run So standpoint, we seasonal markets start momentum deceleration January building. into you

in us pricing last we that I your tell stronger I change for materially spring through we just what us stronger as the this that what fall think going period but a the XXXX. for lease is we year not stronger you have right? year and won't to than and way of this indicators of quarter the fourth the see in experienced You're up So deceleration macro mean the curve and had work the power doesn't new kind than in because are of think for we year, into build of shape momentum that 'XX kind different, of

clearly would having We and in this trends normal to in position to at a gives the some the put based of some us of that in confidence the the seen start what these on recovery seasonality just we've going act. But Coast right are time that us pricing having these portfolio markets build to markets West in see expect power stronger blended way now strength in past. than rates deceleration the

Michael Goldsmith

it. Helpful. Got

burn ] squeeze about the potential of pretty be can much Second this question, in one same-store off? is the we to thinking revenue as as expense the should XXX-A benefit I pool clear, (sic) And in but terms How more well. if restrictions component XXX-A year? [ entering these on the how buildings Sunbelt is

Alexander Brackenridge

Michael, it's Alec.

It's they they to hard Just XXX-A on until question. to project that market don't turn vacate. the really because

unit could stays can't obviously to in you They it -- time, someone unit they to move a out right that get longer if we could the sooner. and So tomorrow get away.

like, $X, rents hard to peg, but it's is foot. a could $X they $X, upside high $X.XX of are So lot up to and the because say, go a a foot these

are some increases dramatic there's that So pretty possible. potentially

Robert Garechana

Michael, the different same-store full the the to until the of Sunbelt, from same-store than transaction same-store the annualized set. a recall hit There's in XXXX activity assets set not with XXXX XXXX majority on our same-store of component The Blackstone it couple half change bought and year quarterly materially is and until set activity QX won't you the in because Sunbelt. of we coming year the from it materially But 'XX. until them our did XXXX. assets set the of transaction see are back portfolio QX might stores enter same the because like in full won't that you the that, most the and

Mark Parrell

areas add a more that It coincidence units urban really, are us. They to those these are hurt in Those really well for as the suburban. example, built by properties And portfolios going balanced they're of for in color, little we Michael, a a just And good getting Denver same-store. just more in lot to XXXX, did happens supply. we question. now initially. bought, by In be

suffer sort our see numbers disproportionately. of you So

think those markets the kind big Dallas going urban, just of But and the XXXX, helpful. When for gotten to both will I market, in in suburban, be the not all very the that I And of non-same-store store a benefit Atlanta, of pool, Denver. that's in having whole have which to us think cycle. it's all prove is same portfolio out parts predominantly just not X the rolls balanced almost through benefit entirely suburban in of going we

Operator

now JPMorgan. with take We'll Paolone next our from Anthony question

Anthony Paolone

maybe out market is to first of acquisition there? and now shift to over sense right how a for like you're market. you give terms Can is would the NOI seeing to growth us where liquidity just where thinking few next in I years private IRRs, as

Alexander Brackenridge

to buy. I It's multifamily is Alec. is Las at the a Vegas everyone But the eager now. really sector. right There NMHC -- in lot and of was interest market and frozen is

it would around buy like So to people X%.

But [ ready plus not probably other I the sure IRR the they I'm the be a world. that numbers. think on trigger in all to they're project ], the X.X, their X.X-ish that to XX-year you're uncertainty pull

to standstill. we're able stands to as the the expect more to there's a I'll the stop So right would them, it's be that these give or And market the a we a answer be there, that some examples it the a deals there with happen, are getting of very, because have all extending pick get quarter now, bit hopefully, really X, markets those up. today, will little plug But because in for that this lenders on plus activity. But and very pull out available. and supply you to aren't of lot fulsome but more more likely that long capital theoretical run, capitalized sense

Anthony Paolone

Okay. And then just a question for Bob.

FFO the the about you difference from FFO versus what as give what's drag in those is to Can XXXX stabilizing talked some You your the be stabilize sense likely when guidance? development JV in projects there. us in to

Robert Garechana

Yes.

Let about how think to specific giving kind year-over-year. 'XX me about necessarily a talk as to opposed of that

you're with. the familiar operating from There's the the leasing that you X expenses get right? "drag" I typically So revenue we're just NOI, occupancy think build you the incur right? and is before up there's as when lease-up just the drivers, -- #X, you process. So

assets perspective, these end accretive, the right? will by from NOI year, be So an of this

be Like up, -- they they over be They continue accretive to that seeing where so you're that those kind right? the and they the They start loans cap And on construction that's have cessation they up. NOI because so yet, cash to to as interest turned loans ramp construction won't of of will have may you'll them, there are will yield FFO positive. be component. streams the we be gotten have line not at to the will flow and X.X% rate, NOI

to probably X from X When things XXXX, have mind. we're you'll stabilized, you the think stabilized #X, quarters also at all to they the the you'll in to buy-sell stabilized have have and or keep #X, about there's close positive component. standpoint. being that NOI getting will

with what better JV accretive partners exercise put therefore, on of acquirer be we'll in year. And would and that will much on what our debt say, be they So able a this or were than more the the likely I process, to debt ventures. recap they no or

Operator

now with our Jamie from Feldman Wells question Fargo. We'll take

James Feldman

the I revenue just start want with same-store build. Great. to

upside So to for picture, nonresidential the -- can And think I bigger you -- I you do just What's talk guess, more piece guess, guidance? do what then, Bob, about the in the what easiest the there? you think your most? upside the think the moves most your to guidance Street, -- midpoint numbers came on of X% I downside FFO? or below is the you downside where out or or

Robert Garechana

Yes.

So let nonresidential me the on piece. start

So portfolio just of the a of aggregate about is from kind nonresidential revenue to remind X% standpoint. everyone,

the consists and space. an mostly it other half call of and third-party it, it is business, it of the component of half the acts I'd street-level parking That amenity huge is, a retail. of not it's to So as

got straight-line we tenants may was of line you collectible first that's That that overall reinstated not the recall going is or the those XXXX, to QX it quarter in of because happen became we off number under And some drag, points previously -- happened more that's again. not on kind basis QX of recognize therefore, of and up onetime of written the we'd rules, in happen XX that XXXX, a accounting assets. leases, to actually $X.X The pick million-ish straight to a -- a the the revenue. going we item

the of business performing largely is the relates And that Otherwise, to would overall as it so those to way expect piece. you nonresidential lines business the X that's drag perform.

end leasing you we're could Francisco how it It's the better. performed to season of season. looks series range so we the could occur. leasing depending are Seattle, outlook there the San As year. you range that items give within dependent guidance portfolio, same-store our is variable because that And on put on a because guidance, Michael the outcomes the some same-store. of leasing relates the like Obviously, on of mentioned from higher a guidance the this

are If would same-store you the that is majority It by move the could get All business a I pickup, same-store. other far. the largest driver to the core that. is largely And you in do of tell noise. vast but could We the a bit overhead, do those refinancing. growth really portfolio. core little It a better is little the are business up that engine better in could really just We in is the aggregate bigger of marginal NFFO makes items the components.

James Feldman

the and And have I then mean, been furious, headlines since fast the Okay. inauguration.

could market, for be could the then the next maybe most your mean or you over the years talking could in of about just guess if good team -- is -- what be get would and what terms business what's that what on boardroom be get business, to more I I And your X interesting, your bad for good by inside So too. X years? C-suite, granular the

Mark Parrell

only The lot that. convened certainly a weeks but a I'm few Congress early it. than start to in to It's and little been others that. will contribute Mark. the is going its going very on, been only mean maybe innings. administration I longer for, There's into new has we're

bifurcation a though, heightened periods there's hard a these We've it's about uncertainty. of been of make tell. little a about want comment, a through bit here. I we So how little to it bit think to because

have We idea. no

sure anyone on need to demand, going to do what knows remains we actions to these I'm to housing But our all focus not mean what to be going are do sure they're I seen. economic for that all dashboard. growth, to

and his we your Michael watching say on not are the on dashboards micro focus and good. across XXX feel properties our busy trends, demand it internally, team's dashboards, they So headlines.

on reflect, optimism based going you there. and buy are dashboards hear business That's management Those green. to we're your run the the and large team see what we

on the I are. of in the this certainly I we refinancing like think caution. for some a one I capitalized of the mean, when rest capital Board guys On opportunity best for mean space Bob, situation kind uncertainty. you're me, bit think of us we the can Alec, side, there's the in of fair allocation the side speak Uncertainty

sure we as to we're So think, ends helpful. it is I for whatever can that up government as be. I prepared say would But it much the not doing, I'm as we market-by-market would say federal relates that, and

housing like directly aren't foreign tariffs predominantly by manufacturing the impacted we the in area. things are We people area or trade not because

bigger part for are sure. We the of economy

in strong uncertainty. also to a has is of remarks, Street it's cash a a ours of That with comment, by which make flow than of my in valued the My of to no got time good period has companies like dividend kind fundamental I'll guess and be pretty -- will in the uncertain operations. a business firms of that maybe I next better sort have in alluded late. speculative that's foreign time But more be good

happens. So at looking see those all you, things what again, we'll we're and like

government, comes we case to local we focus for other I our the As what of points. really states These big think making kind the great. it's next. job are be the policy mean And, great the there, federal we'll remarks wise, said as did in was and I show, will and places I a Washington see think in California regulatory-wise, like people. win But of important state the

Operator

our who to caller, next Julien is with We'll now Sachs. Blouin Goldman move

Julien Blouin

L.A., Just ground wondering, about there's freezes teams on eviction an stuff maybe give how us profitability the proposals passing. moratorium thinking you're hearing of sort sort rent I the can those indication? and of you're if don't of your in know that from

Mark Parrell

your for question. Thanks Yes. appreciate that. I

residents the are you place. employees, the participant. whole including and been being You our the I think community our residents, really process. and and We've governor the we anti-gouging been off for been put relief efforts. fires, through huge the on our We before which about whenever start it's in end got charities mean have goods a not order, level our L.A. supporting that in really working of into for rents empathy supporting real talk way rent We've been covers corporate his for about they've thoughtful been colleagues services, community. that lot, to by even we've just responsible and market tough a supportive market by

think which COVID anti of it just have anti-business house to the terrible there just well ton pushes disruption. of So the worse these really from continues of even discouring. is a really is broad moratorium a This This capital one recover and it We about L.A. anti-housing that's plus a sort sort sort And been eviction the moratorium, considered of further X-year was of like reputation which measures market we've of broad-based things. again, being very consideration is moratoriums lot policed eviction has being for. these ideas. which away. are eviction and not need before we and desperately and pretty thoughtful of and L.A., ideas, caused a of This housing those housing even didn't to the the to investment enough people for needs rebuild fires housing, think

can relief effective an but And just, and that have, argument the on the control rent the ways that's that there, us. There's to out any put sort to money said, more very broad-based Like need help created the that governor there's a side. have of I So responsible. large the folks anti-gouging of others some been our what goes and It's rent, we we're mechanics little sort associations. lot area federal think to be same helpful sense rule makes do pretty on I be just of this. for besides in there with there's state local understand making I government sure I'm specifically if again,

to If more housing you you the I right send not production encourage the have more and And regulation think want to price is signal. signals.

San we're to Francisco. comes along. better and Seattle That continue And being is business to pro we doing and still it about They're to and there for just side, advocate going so the not of government hope turn. market pro on much encouraged housing. so L.A. We're

Julien Blouin

blends? really where growth blends it, relative helpful. first I give quarter a one, as January X.X% And and they sort you a X.X% the guess second you or lease sorry provide I range for missed is That's of new but of rate to us did if -- sense can to landed there the

Michael Manelis

Michael. it's Julien,

the used the the So period I past these especially like think this I've quantity. longer are that best given in over explained time of a versus months, metrics small stand-alone

this we And miss I are didn't January. it you said tell it. you So on improvement, growth. is anticipate you year the haven't is would to is expectation, between X.X% that the to the What rate included based we X.X% month that blended first which in We come because the press seeing expect what X% going will and release. X% full I sequential quarter in of in

As in the or any have variability of or renewals new lot a in reported last blended quarter a transactions given rates can quantity either quarter, I impact of them. mentioned And month. lease even the in these states

equation takes what guess who confidence lot just came So we towards variables seen put change I seeing quarter. our providing lease and is now, results the upon shift range the the stop very and a the only rate out of in that quarter when a that we which there. at one in I happens quarter by be. we we be that I have blended think, think right is thought it of would have ranges in moves and looking we various we're these where out exactly of And would model fourth And these new first puts always in dashboards you've why revenue to dependent by

Operator

BMO We'll now Markets. Capital move on Kim with John to

John Kim

occupancy -- you L.A. to I already or January? of could early it's in an want guidance County that your and demand I how that provide impact. seen conservative number And was mention out any L.A. to January, know possibly too in Orange maybe units. and increase for larger you you to if occupancy wondering But to you much you've come Back be there's with expect did for

Michael Manelis

John, this is Michael.

on In in X. felt to want fourth improvement. I started to to we us guess quarter, We me this that even Like allowed I So backfill. that say better. see actually the to the the demand last heard say call, see improvement started right, you we that

ticked to of I think incremental improvement would to occupancy improvement rate up we're say specific the And additional and Specific fourth gains. I So some XX.X%. fires month modeled in to hyper L.A. County, and type is had originally the We quarter, of submarkets: in and like occupancy portfolio have in We Ventura a bedrooms. comment few that Glendale, remarks, for have of now, both kind assets that of the both I Ventura submarkets. Pasadena some seeing X unit in prepared this and January only XX% with spike the our market focused and my those additional and to right recovery the very are of Glendale X that initially for demand really X in West small. We saw

increase kind it's across So, we did broader coming the widespread like kind see market. some of but see demand, of entire not of incremental this this you

our stand We happening holds. to do ripe fourth saw just improvement. say, quarter. back in the think is base some I this We just that of So kind I for and want of still believe case market

I market. that that the significant sure shift some there. in think to the with out to have point, incremental But put I'm will play there at base confidence be we not like occupancy the say a this we enough underlying it's case

John Kim

that will displaced just would any, have are people housing I were it occurred and Yes, displaced. the people or? But to went curious the thought because have would there temporary and have timing. is already I'm if on spike, been

Michael Manelis

schools geography, were Yes. think Are of to that have they families is this that like close. in these children get that displaced? need stay where part I I a mean do

of So the the submarkets, about is submarkets In surprised over those X I doubt. geography, is X the bedrooms that weeks there's an X course think increase to I in these of which no demand. fires. a laid saw if this we following X that we're lot X saw X not out, And think you we for demand initial and clearly

in So see out? people of the broader really focused all where that's longer of want now, do this kind demand live to how I trying just settle And right on market. kind think term. stuff we're does we're this still -- of to And what

John Kim

is your question blended Okay. My second on of X.X%. lease growth guidance

to out If just wondering, renewal, and X% you between could that you new have higher? if renewals seem new flattish. market would would rental of be growth be new imply couldn't that lease I'm growth break why it And given the

Michael Manelis

we to not understand and blended. pricing components fourth the even for both new of really negative have how to new Yes, then I seasonality pressure It you downward assumption off see it's renewals to these think that so market -- that we very that lease get trend. into kind mean, is not common. us back of X.X%. the of the blended with uncommon all it's new I that quarter way underlying first rate Again, in is quarter, lease I you're points lease to what negative going play think XXXX, that that's into in data one some these way just see growth put

I you these see may and are that have So X. end at right pullback some away think also year, where the concessions. growth rate But additional an in could of now, right you're effective you positioned of markets net at lease kind a of walk new the

to trends that So bit. maybe ticks little not not play saying some normal we're seasonal a of up But we're effective out. that net see going

Mark Parrell

in in and about seasonality. It our done to job totally defy way lies we're I a quarter second if through that's the the the third be prior better think but we you've where negative, new year, it's of mean numbers, a was more growth. will question numbers it around the There are new if positive won't enough to early lease good the the where year is. But numbers I the even is and fourth think, going than move lease opportunity where good. the on saying reporting

Operator

our take Haendel next from We'll now St. question

Juste Mizuho. with

Haendel St. Juste

blend rent range a assume some of and expectations region? bit a to a Coast sense blended hoping I East more region. hoping color perhaps was most get us be lag, get And by of I was of the to I Coast on but bit those on more guess, should by blends maybe, expectation will West for or color than the better Sunbelt that

Michael Manelis

it's Michael. Haendel, Yes.

including I to mean you the recovery even what is I in Coast think is of West So West markets, the portfolio. all about the think the going blends Coast Southern drive California markets, should West improving Coast

I what so similar to Coast saw the think kind in we're than strength to going you see this of maybe East continue blend year. markets,

concessions expansion our in in my kind towards you of this spring as we markets, the now you show you of blends, sets back only to season, hope and or you rates Atlanta upgrade little a stability either XXXX. then start that bit this the And but of that stability falling And of for of us work Dallas. blends bit for little is to see a that way not kind recovery see improving and then right path

Haendel St. Juste

or bit you'd Seattle helpful. the concessions little be a over we and of Fran That's the back maybe the how couple on year? your today next portfolios them a of And of that half in trend subject to could where can into the talk -- where about are concessions, Okay. you and San and quarters tailwind much expect where of

Michael Manelis

Yes.

And right? the we on exactly into thought So time. during holding occupancy, this Seattle concessions We fourth slower San in lean XXXX. it of We Francisco, I quarter mean overall, reductions kind of quarter periods fourth came we XX%. the significant saw had use then concession think the occupancy I point in would XXX similar while The occupancy there be. to solid a a where saw of basis improvement of but in

specifically now, that think San especially markets, marketplace still as downtown. So elevated. is the of in it's market I concessionary think those kind still right a concessions X Francisco you in about

of kind we're have stay what of up the the kind those think I you rents what and could been the demand But we've looking if doing you you is picking which base is start see occupancy, total right concessions at markets, have in though because now neutral. even revenue

fewer we Our that, right will the some expectations now as than see I model gives for of kind concession in that is us used work this did start XXXX. of through the out. And we to that that strength in play the portfolio we and positioning could the We concessions think confidence year 'XX moderate. use of

Haendel St. Juste

expense just could if That's helpful. And I same-store ask the about guide.

perhaps You for that, the put out including taxes, R&M. items, the but range any insurance, out buildup there. on I appreciate details

maybe color the So on components? some

Robert Garechana

it's Haendel, than what which out seeing biggest call-outs would items, you're the of tax a and think Page kind in the X the one pressure the just But little Bob. higher that good in also, of the saw expense real be called X I contribution maybe them Utilities expense, bit estate overall. XXXX, ex or I terms dissimilar so are you like we've gives utilities. to connectivity -- of and in growth you X Yes. -- continued a that is had is year XXXX. and greater growth commodity them in frankly, really prices, mentioned of

probably mid- So growing than lower the digits. mid-single utilities of kind to more single is digits in

did XXXX. more to growth it 'XX in contribute than will that in So

payroll Repairs thing maintenance. that, Same But connectivity is maintenance, is you outside that number with and because but 'XX or flat. really where big years, more will over in of the stuff. and some was phenomenal item. had range. a just wage look that X% And in have it line in particular, repairs pressure to expense then mostly typical headline typical item line and we've the be payroll we model multiple like experience And year, some last

the items. category typically although really So a has I know in insurance, interested -- small growing that. model fast. We people are because main those category insurance are probably been did

double expect single We digits be, it as digits. low to high to opposed call it,

don't March. that So some improvement in we renew market, until

Mark Parrell

because going on some unique And a a share. perspective for we minute color just add insurance to I'm have to here

in ask in some just be with Our we had risk market happen management and the the and reinsurers our them how after team with just and our of meeting carriers to L.A. London what opportunity to renewals. them the to worst might so fell happened the insurance commercial fires of

they of an impact financial their they capacity didn't results much expect good lately. and had was And that and they response had

somewhere so could get where this fires not are that you appear thinking on And to flat And range. may their I the have reached to in reinsurers all optimistic including close we because we up, level. at say or feeling renewal about end that

that more hurricanes there lately the capacity in some up market. And the is big their increases post reserves the insurance earth they've experiences of -- and is the built after

indications for but renewal, were So Again, insurance primary of is early our are Los some but that much. from position fires a the they're we're in won't that probably Angeles as part and good said, feeling optimistic about very insurers us occurs in March, that and Bob for pretty affect us market in reinsurers some terrible, property that of our the

Operator

from our Brad take now with Heffern RBC. question Will

Brad Heffern

obviously, there portfolio? other just One and it But far the have much the discussion immigration differently the do legacy you thing view in as so the impact that how political hasn't things. many business? you come an expansion markets unknowns that as would in on how the think between of potentially up as could And

Michael Manelis

in. else is can So, Maybe I'll weigh start Michael. and Brad, this somebody

areas operations I when to actually look with So standpoint, we on what's from about the going immigration. think X there's at think

with of in for seeing on they're of counts and any the risk. the absolute or the foreign haven't us the line you side kind low move-outs, quarter, we really move terms seen deportation foreign or that. people of the from are right, to resident now, lease business, are immigration of Or activity right leaving less of historical norms. demand but seeing in from both our countries? in honestly, mean due the is is in fourth breaks trending people kind ins First transactions coming from you I in And you with

of they're to we're going to where it and not part really providers whether services watching to put be us a increase other service relates position they're contract that or be rates. to this to provide the able business or going closely The not try in to

provide our their to right services now, issues continue ability of any have to heard us. vendors anything to we not and impacting So

at renter and And of foreign these our base, it's think of the this, move-ins. that of the feels our just total base. operations inside In of whether the X% population are side that's could inside small to even I such we what have. move-ins too pool deal the within or it tell with, resident all look from So just impact renter X% like still standpoint, when we our of vendor population our percentages the early that of world, this are like vendor to

of just significant about. not concerned a it's So to quantity overly kind be for us

Brad Heffern

tech you've could base the Any it. of what Coast And for for to West the those And potential your outperformance? rent outperformance look our sort well. just then you market scale talked Okay. like great can Got about markets 'XX? on case as then growth markets, would give in for that be as

Michael Manelis

my years round said revenue in revenue have for the makes the portfolio. of to I that a projected now, Yes. that to is to be been growth, some Well, growth right to because I've but save be which think of call revenue which best able growth, the would we've is would be Seattle year, me for revenue very X% in the it's we the projected it, have that highest say prepared strongest remarks, is now nothing many proud

probably that, pretty San growth. But XXXX. on more again, so in Francisco less mid-X% off in solid coming that's X.X% little number saw the is we that of a a range. it's bit like a

can Mark that at we strength growth do many When power like this a the just for see the have in the mentioned So season it earlier. really translate capture of to comes XXXX. in leases How leasing little into pricing terms bit outperformance, that down early revenue to how it strength? we

X plays. big a going the in full rate. So year The And guidance. be in difference if get biggest revenue you're rate, are and make to there's the early were really occupancy it's the got year drivers it to to

Operator

Spector with move now of We'll America. Jeff to Bank

Jeffrey Spector

'XX? Can your you in stay elaborate record record low on to comment say that you expect to retention turnover

Michael Manelis

Michael, Jeff. Yes. This is

thanks So for that.

materially probably now different this of you home is buy go future lot, be like that contract years us in or to of actually going houses have mortgage don't see saw to even kind really up. rates a X and We record move-outs row. the suggest for equation this the We in the mean if in housing think at that's seen a And would XXXX, that for values lows. anything that, immediate part I or to

don't being change. this really impact we that's like a going switch to light So see

job this see also in using growth. improvement We office

the demand equation, not their seeing lease people therefore, from concerned breaks we're losing overly jobs. the about So side on of

this every data see reasons XXX,XXX so to turnover of move-out, hyper year. we year. this the reported just on I all really we -- drivers delivering exceptional making that's macro these So in don't number, points turnover a the points are many showing And changes significant our it's up we're customer data in sure customers seamless, to we any focused telling expect our anything from like And focused numbers. experience for us get residents. We're think

Jeffrey Spector

Great. And opportunity then one your of Are follow-up an any as on you the urban resi company? looking conversations. office to into for conversions the

Alexander Brackenridge

buildings that Jeff, how converted sure. We've But and gone come for a look it's been residential. it's office experience of We from think less no speaking, opportunity. more they seen to process, say have than take projects And other any people a people through tough -- wouldn't cost have and a will. that process. with Alec. lot we But at also owning attractive longer, got they out generally

of don't completely pipeline. part So wide a open. think our huge eyes be we development going it's to go I and

a of to most or big to of the hard a we normalizes all also over X,XXX New make in of that in work. they're impact X,XXX parts lot kind they a a And Midtown there'll X,XXX, locations and the in like only materially Manhattan, it's just towards time. program it's residential maybe asset supply. just downtown York, number us. I got going to have either competitive geared over hard year X a with locations. numbers in meaningful that think of of be a city gets maybe developed to way competitive have specific And be They're to where aren't these abatement that going us. aren't And units But really the that's that not cases Even conversions tax contributor be it to to where time

Jeffrey Spector

if Great. Can plan more. Maybe in a on to could at Investor preview just the you you sneak Day? provide quick one what I discuss

Mark Parrell

it's it. want ruin to Well, don't Mark. I Jeff,

I think it. ruin we'll

a focus team. on allocation the also, I folks off is and the strategy, be think going us team here the operations at side. frankly, to are capital on of array on opportunity an that exceptional gives broader show the an It got We've equity. both to

forward So talking have to you'll really to looking few everyone but in wait we're see, a and weeks. to

Operator

to Hightower We Barclays. with Rich will now move

Richard Hightower

to Good back I clarifying apologize. I afternoon, -- go response. to back I want want get go to a guys.

of for renewals question asking springtime. I the think Steve and asked kind about rents the

for apply said you X% achieve just think that was should Seattle portfolio? San I asking the and but Francisco, did X%, that to L.A. whole Or

Michael Manelis

No, portfolio. whole the Michael. it's Rich, that's

Richard Hightower

That's the whole portfolio.

But at new point a in guess, year, you growth wager markets take of specifically the one when of Okay. want over what question, those want in Great. the curious about in the in on progression markets positive to to I real your didn't course year, inflect that. expansion as it improvement think if And you I I if Sunbelt, then, the does? waste my the think lease on generally

Mark Parrell

of we All big guess It's I any Denver. every parts as think willing we're some Atlanta hazard the markets that and to on well lease mean the market I'm markets Mark, Well, about really the that's on that and replaced. I in Dallas and in of right. depends. specific being Sunbelt I different. feel not better portfolio is our X X

really don't estimate. I have So an

And by quarter wood and negative third in go and positive way, in the it the could the go likely fourth. again

the So going a be it's little and problematic. be then know going to really growth, will just but it you is worse. to job uneven. get get to if derivative, in think And interruptions have going better I second I the it's important It's to really Street,

So I But quarter. is put all bet. third and that markets, a about team I second little in to on the particularly think money better think willing don't Sunbelt feel real we'll this ours all the

see I to think demand. good you're going

of middle year. be okay supply demand lot have there's because the happens the front-end loaded, supply, of a lot that lot You to in that's a but of of a

flow how might takes growth better sentiment. into some as about be better think I there'll for translate redo numbers same-store going prior even terms it's be why those growth. the a it revenue up, 'XX. whole calls don't to So having it's 'XX time I think on just markets long we've some talked rent and in roll to of of cash a better and outcome take quite And that's it some more for

Operator

We'll now Alexander move to Piper with Goldfarb Sandler.

Alexander Goldfarb

guys still are you think I an hour behind.

questions. So X

there's big late do on just fee Obviously, Mark, the continuing income just you FTC the real inauguration, versus on regulation had days federal they that level, From that policy change is picture. Any the there the you shift any guys administration, a First, prior in federal these? constructive their business is page. Is before how in on? on at Or sense may DOJ still sense on update? amenable be it any have more these? or FTC and update looking a continuing

Mark Parrell

not I'll case. That's Alex. before star weeks fee saying in FTC that came case couple Yes. in we're just the a that ago Thanks, of by gray administration. like you said, start the out, change

that just are anything live, -- people to going some that the list. I than available. the effective sure what's paper. administration desirable from besides supply is -- more have And of top I'm our land But view, much, solutions I much in land haven't not where want said of about done obviously much that lot of other So about we're don't Alex things if to regulatory the those making but point know sure case they supply maybe of a I'm not that's focus efforts. and federal really think they their the has certainly and on.

some From that But lot I one to how of a There's federal consider radar some know control. I the thing has will at Freddie more current exactly. and the is on think conversation to to mostly there federal GSEs, ownership. happen their been there put your don't about level that. Mae returning push. Fannie private complexity would Mac I

level. through is I unfolds. the think the the think thing. of track finance the honest, we the I issues local and opportunities watching pretty the have level. real level. at federal see we that's To that that the of And material all got are most estate worth at their of control state be and at keep regulatory to a how and Feds But GSEs the world And

Alexander Goldfarb

that's perfect then, a Mark, question. And my to segue second

as guys market changes regulatory setting Is differences And fall, litigation of pricing out meeting you're seeing just wide now markets XX or bps you recent transaction and coastal issues the NMHC. market it's XX you as trading wide at that Sunbelt regulatory really the the seeing bps pretty others that differences the and as discernible these there. is in are people efforts. that regardless understand that's any are local guys well? been industry articulating there of to or -- the were anything these and pricing some versus You continues that some different prices risks Or in out of have in pricing not tight factoring some

Alexander Brackenridge

in Alex, country the are different different There's that for it's reasons. different multifamily different housing parts investors such -- broad in interest of Alec. interested

And see places got the are aggressive. you very in Austin, in it's think aggressive rates. even That's interested But very, all what place to a still you like who also paying there's supply, many certainly markets, just we hadn't coastal are people and which the heard interest people, cap I hear going a return a that couple like in buy to we now the years, in in last lot. it San there see of Francisco, wanted to

asset whole market being So is the class. a multifamily favorite benefiting from

Mark Parrell

Francisco in Seattle. be be specifically downtown transactions urbanized and And what We transactions for said Alec the I'd just there'll moment And think is Peninsula, about ago, scale larger like business, that we it's there. San open business say are open more think Yes. downtown of markets more by there'll as Central think Alex. a we're the and talking area we

would some of Los developed interest I we're that especially But again, stuff. still of central have Angeles Angeles that doesn't probably a hopeful that downtown call this out regulatory market Los a is level institutionally.

Mayor So continue more those interest and Francisco, does And energetic great bet of improve. stuff. we markets, constructive to to there Seattle out will will time. is doing as cap some guy is We rates and over thing investor better the this support San

have in They more probably growth them.

just of is low way then think our record all guess they for came have I York. in New that I to my for York was York up there. back. Manhattan So anywhere willing if New we rates, And were some kind cap assets the model else, it we to is New and given should, of cap dead, rates our point, relative have mean any good at sell lower

So sense. the our through we that see play to got but general that's year,

Operator

with to Kramer Stanley. move Morgan now Adam We'll

Adam Kramer

around with about here keep quick in I'll the to just think, call early it office the job pretty one. just ask growth. wanted using I comments, I

expecting think But any being in West add know more be I of wondering you I you 'XX. detail. a could if Coast the there. you're mentioned to higher kind just driver

think bit least to may come that me. a at little a have surprise, in I maybe of

Boston, kind So in expectation growth guess maybe markets are from driving what's job York, I the like that expectations the there? just of D.C., an office New using what And other perspective?

Mark Parrell

Yes.

jump going start Mark. it's and colleagues in I'm maybe will So here. my to

lot to like it services of we there look will to look the information So And and saw use of we to that there or professional good negative business we are terrific see jobs turn And again, feel. those better also, the because when pandemic. maybe it. dashboards tech our job our Analytics, people sector us. ground, of over at hiring be Moody's we the we generally growth. related economists, tell our talk a the at again, on kind services. was higher wage It then feels during some hiring But And what feels people and employment you clusters

job just boards the we look at And those in markets.

So Seattle seen that's basing point we're the and in business that in and side. government job on out an you in elsewhere a will numbers I the Francisco assumption services, on what and December you San professional saw hadn't while. in improvement

for positive, You saw had go when information while. been sector a it negative

And in to I improvement office of and kind from be powers what of you and XXXX. think, nationally would jobs. beneficiaries we're some Seattle, In So thinking. Francisco using see the we certainly those XXXX, started hope through in that late San in numbers that

Operator

We'll now Associates. to Adam move & Zelman Kramer with

Alex Kim

now at great the assets, had commentary the hope hear that merchant productive multifamily was to could about since surrounding to was by recently based XXXX. and target I built in team week on sold year? your be trip billion last I volume as there build up to the time lines that some a conference if and see this traditional in industry. acquisition NMHC be any upside especially could wondering unlocked There optimism $X.X the

Alexander Brackenridge

positioned and move Alex, really, it's to think so. Alec. Yes, I quickly. hope to we And well certainly want we're really be optimistic

year last in out showed year, billion the started did quarter $X.X slowly, we third alone. the but we As

we've have machine here showed can't do same they will that many we're amp have that in way we because and to can a perform we the do we don't do. we that going frankly, So up to say And that what very quickly. capital others, access

alluded So and to see to we're I those that opportunities, did excited earlier.

to come run, what think not and these market. it financed long were built the heard assets true the you see that for we're recently I is to excited them

Alex Kim

And your stick strategy has markets know and vintage far you newer all is call in at rotating are appreciate I into Great. been on, any there markets, The into I looking expansion you're going around. the the that additional properties so moment?

Mark Parrell

and consider of we've markets X, that Denver. Board markets. now, our Atlanta, on X those really was delay have us share other so the we've really is attributes. before same of we and X focus we'd of kind on primary the about Dallas we supply right mentioned talked market Austin kind another is this occasion the that there. There focus reengage or to for But there Our are call. the of pictures And market. It's on no, But to on be there a tough. may properties that announce just isn't year in list, those

Operator

We'll take Jefferies. Tsai with question from next our Linda

Linda Yu Tsai

quick a Just one.

revenue your view for X embedded terms XX markets the for these to bps towards portfolio? and D.C., Seattle expectation, In compare does your X% the overall the of favorable how growth

Robert Garechana

add. in Michael is Bob. the really Directionally, actually strong. I'll D.C. maybe and it's start Linda, can embedded

this and strong you funded So from really performance, that you a see had can rate. leasing

slightly the the little So points. had probably average bit experience more than basis it's or probably like a the higher recovery we of because is average below Seattle that XXXX. in XX kind

is math blends. them year, I the perfectly prior from your and taking dividing kind your always Rule work, kind think doesn't taking roughly of your of of but blends thumb about This that's embedded. by X,

driver revenue embedded, leasing that the current of starting starting with is Seattle story that's growth that's an embedded, and can say, the So to it's The drive really with in sense. in the directional year give D.C. activity occupancy a really gain going directionally, solid of but you But the okay I'd more growth. the a more

Linda Yu Tsai

York Could you to expand that San Fran and too? New

Robert Garechana

New align York and relatively. about looks I fundamentally probably strong talked leasing you San had on be similar looks cost, more probably They Seattle. Francisco they really to with more probably D.C., similar probably to season happen where the what same but more -- to also the aligned they

Operator

Deutsche We'll now take Okusanya from Tayo a Bank. with question

Omotayo Okusanya

Yes.

of Just on to could negative a year? talk dilution breaking we quick adding transaction of little points. if XX bit should assumption around regards this and at XXXX least actually a doing first one how of just time? transaction the you kind over basis the for Wondering me. that, And about In comfort dilutive even the deals deals, think in ultimately value the shareholder to

Mark Parrell

I'm going add. on comment to add a may Alec,

the we considerably as return a especially times don't the -- lot that we we're So in the one term, model. is here the you And has more believe trying of for we're and NFFO to numbers in, near think lot deals that many to before CapEx, need. have selling are we'll is older about CapEx. things of get obviously give A commented Alec these

better by an AFFO assets. how basis any of pick these adjusted or we sort doing IRR on basis, on them. selling you're That's So

lot you where common year lines really I X, a be may basis, that advantaged we could don't selling on cash of or a it of asset needs immediately renovation a those say frankly terms be work an would In but believe in. a cross, that by flow area or

Alexander Brackenridge

Yes.

to bought we give that sold Just was property years year, we and an example, X the old XX old. years last average what you was

Operator

from with will Next come question Nick Scotiabank. Yulico

Daniel Tricarico

be year in talked for could I Tricarico, you to what's us this. useful there missed portfolio share know this L.A., I'm pieces? given growth apologies curious revenue same-store we've Nick, your but expectation Daniel with the if about for already It's know the would if I L.A. moving

Michael Manelis

kind growth. momentum saw in trajectory Michael. it's some nothing that's outsized I we on to out think L.A. and continuing revenue but base recovery some And that, marginal an in our XXXX, to right the had and now that based we the Daniel, I play improvement in like that fourth X% a of market. right in quarter Yes, prepared expect around remarks deliver case through

Operator

question now next And we'll Rich Anderson our Wedbush. take from with

Richard Anderson

About ago, XX%. the it I to just I XX%. Mark, markets don't expansion I -- number, you're ultimate is your for targets you walking expansion expansion for -- for you point X back hours are just remember your target your landing there short if know or markets? said handing want

Mark Parrell

XX% for Rich, to you talk sticking it's to just about thanks we as Yes. our think XX%. by call. in get for handing the short I That's No, Board existing it there numbers coastal what be buys markets. in may less those hitting purposeful XX%, doing in our to example, bit us to in maybe a other places, bit see for more you open a was like,

isn't range. magic, XX% XX% So we'd in but that land to either, expect isn't

no So either but we in place. up there could change is end approach,

Richard Anderson

enough. Fair

right. about job? you're Is that XX%. year, are if by also cadence and points If -- the kind curious around billion we'll quick dispositions sort of did with this have next time And my to of I finishing every Blackstone that in August, you X think saying, guys timing ideas you just get and this it, course. behind of this acquisition XXX for you and you not added I thinking think that be expansion every think $X.X so I'm markets? the can next And do do exposure all well, $X just do the a coastal, we at points to market, your us in percentage but some around to expansion you like deal want swing I billion, an provide market is year question upside? get is factor meaning the expansion you basis rush

Mark Parrell

Yes.

get definitely exactly possible, management provided not you there's good value shareholders, to like as think dilutive. and feels. I as to how it's this the done quickly We restated

million that you you of $XXX X million about is right. tell move percentage are it a I'd the one So numbers $XXX every other. and your point About all into to out

is about think to got you thing other the The denominator.

if a So in the bit. the issue debt is XX% what that could contemplated we we you're grow everything company that's do position do Then we where in and now equity, you going and that's little hope. issuance, there, you said, the given give we price. what I But share think being by put or but guess, accelerate way move if not I a to take your which you're

of to So be done fabulous. years in would be couple a

Operator

question-and-answer any like conference for closing I'd or comments. concludes the back our that today's to And additional turn session. to presenters

Mark Parrell

to our for want Day quick that Thanks, this I long going for for XX. sticking host plug-in We're We top-level be outlook call, everyone, a Yes. a business. interesting Investor quite around and exciting. ago. put February Jeff to Tuesday, upcoming a for to all call. minute the alluded forward spending Spector of that strategy longer-term the on discussing some to and at for look just you will It time

forward to look we for us joining everyone Thanks today. to So that.

Operator

once conference. We participation. thank conclude And that does for today's you again, all your

may disconnect. now You

Equity Residential (EQR) 4 Feb 252024 Q4 Earnings call transcript