Mid-America Apartment Communities (MAA) 30 Jan 202019 Q4 Earnings call transcript

Company Profile

Participants

Tim Argo	Senior Vice President, Finance
Eric Bolton	Chief Executive Officer
Tom Grimes	Chief Operating Officer
Brad Hill	Executive Vice President and Head of Transactions
Al Campbell	Chief Financial Officer
Austin Wurschmidt	KeyBanc Capital Markets
Neil Malkin	Capital One
Nick Joseph	Citi
John Kim	BMO Capital Markets
Zach Silverberg	Mizuho Bank
Rob Stevenson	Janney
Hardik Goel	Zelman & Associates
Rich Anderson	SMBC
Drew Babin	Baird
Rick Skidmore	Goldman Sachs
John Pawlowski	Green Street Advisors
Aaron Wolf	Stifel

Call transcript

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Operator

Good morning, ladies and gentlemen. Welcome to the MAA Fourth Quarter 2019 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, the companies will conduct a question-and-answer session.

As a reminder, this conference is being recorded today, January 30th, 2020.

the for to MAA. turn Vice Argo, now Finance President, will conference Tim over Senior I Please ahead. go

Tim Argo

Thank you, me of and Priscilla. Rob COO; Senior our Vice and Good Al Transactions. DelPriore, morning. This of CEO; Executive Tom for is our Finance Brad General MAA. Grimes, our Hill, Head With Campbell, are; Counsel; Bolton, President Eric CFO; Tim our Argo, President Vice

our this the projections. morning, the results. that We our we statements company refer that I like Before which encourage release prepared Act yesterday’s ‘XX begin making factors out to of future our SEC, to results materially be the section as and you will comments part impact earnings Actual may discussion, forward-looking with management describe to point statements. from with would filings risk forward-looking differ in may

of a be call comments along our copy an reports on morning’s available today’s These this copy will audio prepared of with and website.

also between For certain found financial page as earnings comparable measures, During supplemental of our this comparable of most discuss which and financial measures at available data, can non-GAAP are GAAP presentation website financial and call, release differences measures. the of as the reconciliations GAAP www.maac.com. well in directly the non-GAAP will on be we our A Investors

turn now the I’ll call over to Eric.

Eric Bolton

Thanks, Tim morning. good and

trends to positive expected rent growth improved drive better overall and has – resident first than results low turnover quarter Our continue were fourth revenue record and performance.

year, throughout year. rent and agenda growth the we the on prioritize to push course focused Over of an last opportunity that

into momentum As Year. good a result, pricing carry New we the

overall than by supply in we This of in analysis, XXXX our will vary the on updated now new higher do deliveries course expect XXXX. will run market. of Based level that

supply be point. continues As majority routinely end the a at price on, the higher to high product commented new of has been

at it’s our important average rents that in in XXXX submarket detailed the than XX% be the in same higher rent deliver to properties will markets supply submarkets. will the forecasted be our Based to on note that our analysis, across new on

platform growth not new quality we momentum out of year. the our the that year diversified generating of operating that impact number our the continue certainly of new portfolio, and our nature the good locations, with we will are in of this While a in gap of immune the over the strength see the is long-term pricing our built are opportunity, XXXX, of NOI coming initiatives price support was XXXX steady we to pricing to point along in rolling supply, submarkets, calendar

of spread price still into to and and One is off use shareholder the market price and creates delivering between that of offer higher our the new the prospects, properties. opportunity our benefits properties the generating at value capital. our rents surrounding opportunity new expanding created upgrade the to redevelopment product supply – number a the very leasing accretive of also attractive while existing a The

couple expand upgrade market at of number over years. XXXX, a locations above property pipeline next growth rent repositioning of will the and Our in supporting

growth. the investment. new We million opportunities continue at our began new year select disciplined to find $XXX in units, X,XXX external capture to representing with development pipeline new We

million in addition, representing XXX undergoing have lease-up, investment. In units we initial new $XXX new additional

ATM past the undergoing built We sheet. few program, we transactions with the lease-up, on newly we equity new new balance funded retaining capacity growth of match property in thereby years, consistent the did through on one a with acquisition and our this issue plenty close initial QX, protection was acquisition partially executed the for over

balanced and across capture MAA’s is continue this uniquely capture to the region demand. portfolio demand. markets So in summary, our positioned to well Sunbelt great

opportunities. the and to here of XXXX. performance will for great our products MAA are new look jump with and at NOI pipelines in in year want XXXX to progress balance great another sheet a a on growing. also of is I Emerging new and forward redevelopment technologies associates team support Our in to ample thank growth year development position compelling further and capacity we

the call I’ll over Tom. turn to

Tom Grimes

Thank everyone. you Eric and morning, good

the Our operating with strong Same-store growth fourth our year-over-year momentum the performance quarter for improving X.X% the demand unit quarter the effective seventh expectations for daily apartments increased continued in per enhanced platform, of rent this occupancy. growth exceeded and our quarter, rent growth. for ERU and steady we’ve is straight average

our sequentially. basis growth a XX rent X.X%, revenue same-store per sequential since been As Effective unit year-over-year result, – points it’s increased XXXX. was the highest

momentum Revenue XXX performance quarter, a last basis time a up renewal this than points lease X.X% pricing, over led lease year. by the and is better which steady was in new blended for

addition, the In quarter remained at during strong occupancy XX.X%. average daily

we strong in to of XX% up XX.X% average As January wrap occupancy January is year. daily still compares and at last

is just time X.X%, this than Our vacant points a basis through XX-day is notices exposure last which XX period units all XX-day better and year.

as revenue Phoenix, Houston expected Savannah forward exposure pricing is are the we The overall Austin in year, rent based Looking be Nashville. expected and and in markets with our Dallas, to our on trends, progress last markets increase current mentioned, along to Eric expect our challenging, to increase XXXX. and our Raleigh, supply be markets leading expected most

supply platform. new opportunity an creates course, a Of redevelopment the for

leasing upgrade kitchen million primarily assets, it’s and offering we workspaces, up. and post rooftop areas gathering an with [ph] create product at on areas focused to our locations, compelling increase rent, In shared million while continues in cases, can [excellent] and of program was us decks in bath there’s $XX common to program, to allow the supply to to amenity still XXXX, these the outdoor where in push we’re legacy the and submarkets. submarket communities, underway new XX update centers, investment hallways value rent built these addition $XX In

platform technology Our continues to also expand.

engage and ability value create our attract, overhauled Our residents. overhaul to has and to website system contributed operating – new for our

installed minimal disruption with communities in technology well smart has homes Our received tests well. been our on residents. have XX gone by The was

We home XX,XXX units smart to expect in install XXXX.

contributor and internet speed XXXX high initiative growth. Our to NOI a access is be will deploying

a range of We’re resource customer engagement prospect management and tools. also chat, exploring AI

We’re our head in solid XXXX pleased efforts, the progress rent we the made in appreciate greatly growth their teams as Brad? of a are excited base with XXXX and with into ahead. and earned opportunities about

Brad Hill

Thank as I’ll morning, are at transaction provide we market, transaction everyone. in activity you, on as comments Tom. Good the on what QX. brief well seeing our

transaction the continues for aware, liquidity be extremely record competitive levels all demand to you’re As properties. and of with market multifamily

properties we robust, better leading trends continues footprint rates. and country, the Reflecting pricing pools, increase our and be to the region Given our compressed to that positive in the investor XXXX. to aggressive supply job migration deep strong favorable of expect exist growth in for and growth multifamily demand, demand cap job within

capital This remain increased deal our should disciplined to pre-purchase us as in in and Al team flow. shape, to opportunities decisions compelling supply sheet and level support of investment they great historically continue We balance respond have his to acquisition and of a level deployment allowing high our materialize.

in recently were focus Greenville, equity we In and As developer the QX, we’ll lease-ups. South The the acquisition completed in on of on certain past. on at in requiring year efforts market was asset Carolina. new worked and end. downtown X.X%. our lease-up close done acquisition we’ve We to of was cap within a closed This continue a involving the Greene by able the The acquisition asset, provider the to quick a past, initial rate still its we’ve execute a stabilized with equity

we’ll pre-purchase continue opportunities. to In pursue also XXXX,

at to a us with to to we This where reminder, program this XXX% access we the be capital selectively a with access a partner have estate. basis minimizing and assets, is overall path get an asset a to good development pick real well – program As to in to in at allows a built reduced debenture return great while clear developers risk. We our stabilization. bring return, that ownership located,

In Rock closed Dr. demand very took miles desirable QX, Orlando, income, and and started we our on unit of of advantage downtown Little Arkansas And exited market. finally pricing in of southwest located all high area. QX, we the sold construction Phillips investor a strong pre-purchase assets nine and a XXX and X in

pricing properties. a market market good offer to properties, X.X% with XX-year old XX these equating this We achieved on had rate. qualified non-core cap over bidders We for

to our specific selectively about portfolio to on disposition in will XXXX prune continue our ongoing We an quarters. say more have basis coming we’ll plans and

With turn that, I’ll the to call Al. over

Al Campbell

good then finally everyone. Thank fourth financing I’ll you, our morning the provide Brad for initial quarter and on activity and XXXX. performance, guidance brief earnings company’s on commentary major some

the quarter. revenues was were FFO this for of outperformance share majority NOI $X.XX as favorable the operating $X.XX guidance produced both property by per above Reported of expenses fourth for of with midpoint expectations per to and the our quarter share

and FFO for our and full several land considered sales per items not gains share to parcels. shares valuation of was which preferred market-to-market business as $X.XX the such year, core on of the included our unusual

Excluding FFO been the these share. have would non-core full $X.XX items, per year for

more basis, picture believe clear As FFO which provide of a in help we providing discuss earnings XXXX a we on core guidance moment, for to a are will performance.

bonds. on issued during We’re financing fourth front the of we new million active $XXX public the as quarter

$XX XX We loans related the new rate interest effective the bonds hedges unsecured years, of The – be considering financings. X.X% of of also after and secured million rate over million debt. $XXX will debt the retired interest additional to

of with the almost year for the years debt fixed XX.X% our duration X ended which is an company. record average with We a of

Brad. new ATM portion mentioned Greenville the my match During issued $XX fourth million property funding through we program, our of equity the essentially quarter, also a acquisition in

FFO detailed core is we income be for FFO the $X.XX release, common Information to core guidance $X.XX share share, a and package. Finally, diluted for of per at the supplemental non-core Core AFFO core FFO, reconciled or per the with description the which be midpoint. full in items initial considered The is for found guidance which projected our is are $X.XX in share of in to including providing the package. can FFO per definition year supplement. our earnings net XXXX Providing at Supplemental XXXX

XXXX year, occupancy the at to XXXX is midpoint. brings rental at rental the Effective earnings to blended X.X% around expected of growth combined pricing This which slight lease-up NOI the produced performance, the XX.X% be with same-store the release rent achieved. average projected a of to driver primary revenue midpoint, the combined projected with X.X% X.X% XXXX average growth, pricing total be of rental by pricing for year The decrease in for blended X.X% to range. growth is the X.X%

items or basis Double projected Play Fees These and from and with bulk XX total combined to basis other flat combined are basis primarily to growth items year, the reimbursement X.XX% XX contribution by of points the points a XXXX the to revenue fees lower offset XXXX, an which for other being additional projected which essentially expectation for XX primary growth program, partially for occupancy. our due items revenue driver produce at to income midpoint. is add to internet same-store slightly to remain points the

expenses Play growth to the which costs a will internet a to operating we’ll from the some Same-store for is combined the expenses also These full X.XX% estate additional have related recorded gross continue insurance to taxes midpoint. the and the year year and have produce items on projected real expense pressure program at basis. for Double bulk same-store

course, ATM year. year with forecast issuance uses the essentially – of expected of of a for for fund we year the match just during of the our use equity to modest overall $XX continue new capital increase assumes to of projected and million below find overhead in accretive also The acquisitions X% assuming cost program

all that’s the Priscilla. prepared way of we in And comments, have

So to for turn we’ll you questions. over back now the call

Operator

Markets. our from Capital Certainly. question take today [Operator KeyBanc first Austin Wurschmidt Instructions] we’ll And with

open. Your line is

Austin Wurschmidt

you tell of supply which you in Good seen Hi. of thought Brad, is markets your is and your that off markets I which supply mentioned detailed quantify in have analysis. increases top everybody. XXXX, of the biggest morning, your presume decreases? kind increasing or Could us

Tom Grimes

it’s in. Dallas new – it’s our Austin, that in above primarily difficulty]. XX% be – – to market Tom, supplies continue see – the we’re supply at coming from going I’m challenged, our in it’ll pressure but we really we’ll jump where, Hey but to [technical is most think that

Atlanta then but terms pack think Phoenix got Savannah performance Houston, face would elevated And supply will I probably you like in Austin, soften also and know, strong online, lead Charleston we’ve Raleigh the over we got will time of Nashville. supply and comes and of in that feel the we’ve momentum expect with as and

Brad Hill

about new XX% real Tom quick assets supply to us coming top is that’s its Austin says what with just that’s rent our what we have higher in in supplies gap coming And XX% clarify of place a than at between when in in on rent are.

Austin Wurschmidt

supply What this overall sense. you when for of kind the the that and what in compare the what portfolio? And was Yeah, year? numbers XXXX are it you’re of for makes what’s sort expecting then

Tom Grimes

Yeah.

at X.X% in So was this about a look inventory, – X% if and this XXXX percent you delivered as it’ll be supply our of radius, of XXXX. supply year, we’ll

Austin Wurschmidt

portfolio, Got kind versus to I years highlighted time? was think then of it. XX% what’s said you for your that kind you the years in know, on the across two of to And know, Eric, Thank you going for the XX%. does the of coming at that. versus the that to you in portfolio compared back clarification units three supply where where was being delivered rent overall you place. How new last

Tom Grimes

similar but reviewed what of me, front very have them is it don’t year. this I it’s in numbers to those Austin, and right we

Eric Bolton

think escalate, several think unit if is back is at over in to gap is growth land go costs continue escalate construction find continue a than Certainly you’re that going I up. I faster that last the of accelerating – accelerating. construction our as the you to pace cost rise going to costs years,

over So, that find several go you’ll the years, you that gap spread probably if I think is back last somewhat.

Austin Wurschmidt

Thank you That’s it. helpful. Got the for time.

Operator

And question our with Neil take One. Capital from we’ll Malkin next

Your line is open.

Neil Malkin

Good morning, guys. Hey.

expenses side. on expectations wondering are is the that across pressuring the operating Talked that then growth any payroll expense implementing if of all capitalized? what is your your several insurance being portfolio. question technology XXXX? through and in And also assets for First units and about of I’m or operating

Al Campbell

understanding, clear? make – in expenditures to sure what what you Let first can the sure talking you me tell I’m specifically, make me you portion, were Neil, I’m about

Neil Malkin

yeah. Yeah,

home elevated because thought expenses, – I yours you’re smart to Are those the technology implementing So mostly a also package. program, the related internet but operating bulk

Al Campbell

Okay.

that we and majority Yes, I a it. Okay, know capital. I are got of is

expenses. So just a give you little of breakdown the

And was the the which of points points. X.XX% as a basis we as program. about to that basis about you real bulk year have then, talked midpoint the probably are taxes think expenses XX another I our XX growth is estate related and third internet for

those that the other for strip all growing personnel, So all about out, if you year. of items, the X% R&M, are things together utilities,

Tim Argo

for know July. You to you know, I’ll which double-digit low add insurance renew we’re program you Neil, probably that will mentioned insurance, specifically in increase expecting

Neil Malkin

great. Okay,

pretty out starting if of strong confidence. of, who or the they’re terms you recently know if homes know, way are to moving purchase, and/or higher seeing you price entry the You moving out I’m that more there play has the wondering point been any some anecdotally still in builders homes? homebuilder out you’re focus or in people are of to at level home know, sort on the

Tom Grimes

part was down. move homes, folks out entry level and the quarter, seen continues not we’ve this move out No, our that’s home in to buying for fact, turnover drive of XX% down to what

Neil Malkin

have you just talk over can versus for me, Okay, know, for maybe A about markets about know, I X you done? last top you in what talk months maybe and product? your last B five one Just guess the cap rates

Brad Hill

is Yeah. Hey, this Neil Brad.

I’d record speaking, last say cap rates up the certainly attendance continued for if know, you week, I broadly just heard demand to You decline. levels. Conference was mean, anything multifamily, the NMHC about where just

strong. multifamily So very, assets be I to for very think demand continues the

have at active properties to point. the from rates and we’re the you really between and don’t As in we in liquidity to indication – and certainly selling every know, numbers and market cap know, don’t we you market be that’s compress this I’d gap seeing come the know, driving very, to in anything And see very continues And down. you the you acquisition say continue know, that changing the we Bs

Neil Malkin

Thank you, much. guys, very

Brad Hill

Thanks Neil.

Operator

Joseph Thank you. We’ll Nick go with Citi. next to

is open. line Your

Nick Joseph

color you I Thanks. program. more on bulk hope can internet little give the a

into In is to an need opt to terms from in opt or providers, and long units a with how program are the of or all typically opportunity do the opt contracts those out? perspective, rental then the there

Tom Grimes

No.

option when out provider into opt year believe X on got hold to first and but don’t to years the that, the for the contracts there, we��ve Nick. On X me X year depends I

when the – cable the know, a while, you access. participate this, goes, did all And we to decided speed program for residents we rollout internet as bulk had On in add the it. we high

that, that looked less. or we’re When already we internet the for market did we at speed and our who’s are access of subscribing speed and paying high XX% for residents providing already our

really is, roll they’re quarter to we than than on the leases the and us through results higher an that of would renewals, paying our of So less we but in a residents chose lease number for that. on were reason we Nick, fourth mid it’s expected upgrade assume new the that better was expected. little opt in in Part that existing

Nick Joseph

in helpful. take then And that deployed? maybe rollout? where then point, Thanks. And That’s will to terms fully to you be are how the long it of

Tom Grimes

have by next underway, we’d the by of and with because in they’ll I benefit, fully May up provider there. We the provider May, be done deployed – think XXXX, carryover would ramp and one the deployed course from some

Nick Joseph

Right, you. thank

Tom Grimes

Sure.

Operator

We’ll BMO Kim Capital go Markets. to next John with

open. Your line is

John Kim

come occupancy is remarks concerned Thank mentioned you. you at of just supply? guidance Can XX.X%, in how or prepared that you potentially which XX lower are Tom, given that lower basis than comment in low on current end your year. last you points new at your than occupancy is the may

Tom Grimes

felt of that that have like up solid No, and last from very time really rent willing the the we’re the is noticed bit build our and XX.X%, now to the our that for year, way that on it steady feel that is to year effective to and though, throughout is occupancy [technical rents our you a will growth raise continue difficulty] the we’ve we’ve demand, occupancy which as growth quarter-to-quarter is perspective. And seen give from the basis built. little for and with

for it on, that year time we see be goes the shooting the but year than and as climb to right we’re I’ll the not very expect to you that little it to I it’s that we’re expect in would a range XX.X% pretty going feel But lower thought certainly we in where starting you’ll of we’re XX.X% that happy good this would. about be know,

John Kim

versus your can And how job commentary you drivers growth in demand year you or provide on year? see this markets other last

Tom Grimes

Yeah. see know, And to you in we continue at stay slowdown I to – no job interest renewal see now. mean, this in trends, and the X% continue the range right point. migration the we to growth, in Sunbelt rates X%

those So anticipate demand bit coming growth. down now, right for we’ll is But a prioritize to and reason, very rent strong that this year. continue we’d

John Kim

at development as pipeline $XXX just you Can million you And your forward? you smart developing far then different on with comment going big home or technology feel spec new are And Okay. part program? comfortable development pipeline quarter. any the increased this of is any adding as as the how to technology

Eric Bolton

is at is I mean, I very you of comfortable which we’re $XXX will, to established value, we’ve the we tolerance, where this – million. tolerance at $XXX development X% know, million if put point. you enterprise that the with, John. X% the comfortable should the Eric, This pipeline pipeline to felt very

we’re with where So at $XXX comfortable at it is this point. pretty million

sites anything will We before year. We predevelopment couple or I early projects have sense, working now, of ‘XX if tied have own up, get other start going. projects will, we that either will a else several it you we do we’ll that that this those in land be suspect but on we’re a

a were new and yes, has point. very at forward. this is technology products pipeline with of lot a of this you the the developed, what going new alluded build being services we’re they home smart technology Tom to, part is comfortable certainly where know, that product we So and the And as

John Kim

Great, thank you.

Operator

we’ll our next And take Haendel question from St.

Mizuho with Bank. Juste

open. is line Your

Zach Silverberg

Silverberg Zach Hi, Haendel. here with

how development on yields Just view they you follow-up acquisitions? How against quick turn do IRRs do question. compared and a guys against new to IRRs John’s

Eric Bolton

to are now over as right Greene, seeing XXX capturing the that that of stabilized points bought yield X%. generally are Brad The in we’re just alluded our out basis development acquisitions to higher stabilized know, than on XXX points the we somewhere we basis the what our deal yields in You Greenville

pipeline projected our our to X% seeing trending stable stabilized on from We’re X.X%. – our now yields anywhere right development

So you points, spread. basis a basis know, XXX call XXX it points

Zach Silverberg

you view of MAA an two post provide on legacy All year-to-date there the portfolio? year right, should extra update this the between rates those between leased portfolio quarter thanks. And that the opportunity and could them? any And and is we

Tom Grimes

we submarket or America post or of that I not to that gap have do gap same front assets and narrowed in do we’ve negligible. between largely and Yeah, honest the information is me, be narrowed, Mid in that you differences with – are

amenity is locations of with packages upgrade, still Now we’ll on as going and that we update exterior a there, strong do see the program very in work we forward more I touched the and redevelopment our do have to those and that amenity that from – opportunities impact XXXX

Eric Bolton

probably Tom the the so but see emerge growth rent of out the is post as we’ll opposed post robust referring function upgrade more upgrades, it’s a market the post, to differences. of the to more locations legacy – for

Zach Silverberg

right, All the for time guys. all for Thanks me. that’s

Operator

Stevenson go Janney. to We’ll next Rob with

Your open. line is

Rob Stevenson

– markets to midpoint? that bottom What are Tom, do out? to spread where you guidance are sort guys. expecting – under What’s X.XX% underpins of morning, your X.XX%. same-store come you top expect to expecting is revenue the Good performers out? Where you so X.XX% that the come

Tom Grimes

feedback. be Rob, [technical that I’m blended a something on markets in in basis, like estimating to top X%, that. difficulty] range markets mean, probably the you, to be bottom X%, for range that and honest the X.X% that but that’s in that the X.X% with rough I –

Rob Stevenson

of negative anything. flat It’s is X.X% least at of or close all the bottom nobody X%, so or even at end? sort sort Okay, to positive

Tom Grimes

Correct.

people to basis, a on not have full blended a backwards. traction year and think many we expect get would I go

Eric Bolton

the of carry XXXX, I some because this us Rob, from the And opportunity in XXXX and mean, performance us the – of any I’ll pressures better some through work prioritization, to alluding a possibility. growth, know, might really the enables focus know, puts on to supply you avoid in much rent these that Eric. you tell markets in on we it to were you is a that you, into degree, you really to metrics position XXXX that real as weak

you heading knew year likely part we’re the focusing would that some behind that or last we reason was year, intently occur we into know, the I really on so this year. rent of see some which the moderation of sort growth that, think logic and helps us this

Rob Stevenson

topic Where it about last are more only thinking on benefit contraction, of – earnings it low is to guys you of sort you there? big And mean, you how turnover a guys that that how XXXX from standpoint? it some if you are for year. are an are I flattish, XX% stays mean, you I expecting re-expansion was anticipating mean, being I

Tom Grimes

Yeah, at board, may it it as don’t that plays across coming it we honestly far to see as our continue know, earnings assume the you fundamental hard expectation, to point, but minimally any drop, our forecast into Al expect will some this is, up we really add that changes slightly, color. to and be

Al Campbell

basis nothing I look you decline, about done for given If little then significant bit we’ve increase and say. of would applied in points ourselves but what a at we’ve occupancy, got there’s XX turnover

Rob Stevenson

hear I going guys XXXX? smart unit did And Okay. to correctly home do that XX,XXX installs you’re you in

Tom Grimes

That correct, is Rob.

Rob Stevenson

you’re How that? much per Okay. unit? the cost is doing for And what

Tom Grimes

you on display sensors lights, as is system flat that thermostat, and the cost install well interface resident $X,XXX moisture two and gives two average their on panel locks, an the that that’s app. as The interactive

Al Campbell

we’re there redevelopments things Tom more more which capital has that’s very it’s home and doing about smart that but model, of in returns, begin program important year to million $XX in strongly is amenity come it’s the will this XXXX. in that, lot think And that the I about Rob, talked a plus your strong investing

Rob Stevenson

if or going though, of in wrapped is unit be be you are you to higher do redevelop the sort redevelopment words, to and Okay, per up some know, whatever into units mean, but of unit that going number separate? is X,XXX cost that for scale redevelopment, up X,XXX so whatever being you’ve is going instead savings I redevelopment know, open up a do of be wrapped I in that to interior anyway, that on? cost redevelopment to units, of assume to might or in walls or you So essentially there I from XXXX, a terms got on the you other going be X,XXX full you mean,

Tom Grimes

Sure. is And and is product. do programs And them. are the bath homes, the of separate. separate timing they the remember lot on And you we are different if those the a because in kitchen reason that that then redevelopment, at people the we when and property one do on in on and whole to turn, we install smart we move go time

another. So are one of independent those programs

Al Campbell

earnings about done that a think into that’ll per why program the this to pace and and – know, Al, we’ll we’ve same you it, for XXXX call same you the many your X,XXX X the redevelopment X,XXX growth. to is years at level Rob, if contribution that really continue unit X,XXX along at on I part it, that’s units them, to And have mentioned that’s spinning been basically

in amenity are two help pay that of about additional to as the those that, have million and mentioning, programs lay of to XXXX that begun in and together On that more Tom you that top it point redevelopment smart that a investments the model was great really are we an the right. course, $XX home was and off

Rob Stevenson

me, markets? then just one Al. specific for especially And Property last elevated taxes Okay. any

Al Campbell

we’ll when little Rob a revaluation that, a in our of have third year, beginning mean, is this lot, You what know this know about a continues Carolina tenders Florida, year, maybe go to to year we Texas, is I North be the in what the same don’t we and you continue bit we with the back to do expect pressure year. portfolio flow. know a

is So X% X% we to XX about X.X% little we bit, we down know, dial down. know expect you midpoint our and costs that a range to do overall, the points so come basis in is

about to you know, next cautiously going the Texas, the the how don’t some yet going in know years. to millage changes few to that’s optimistic law also, over know or changes valuations. that’s of new And hard out We where we’re affect both rates play

think begins going in that that So expectation. to over dialed we’re and we hopeful have our bit, we’re line what XXXX in come X.X% down to a we is time,

Rob Stevenson

Okay, thanks.

Operator

Thank Zelman from & take We’ll with question Associates. Hardik our you. next Goel

Your line is open.

Hardik Goel

supply seem are you? wanted here. it at Thanks it, upon actually you’ve how my I to taking doesn’t guys, maybe touch be again. as for as impactful Hey to The question we look mentioned. way

Beyond Dallas for secondary, sense give maybe you’ve can how your, that’s supply the know, you us up? a that and Houston, markets highlighted, and and markets tertiary two shaping you

Tom Grimes

the probably impact largest a with probably is of as percent X.X%. the with Charleston from inventory X.X% to secondary Sure, group moving the market

little we’re up lines the is – by Now because finally Pleasant the a Mount and to Pleasant the encouraged it our an A has moratoriums effect. in assets where where Mount that, supply have been, taken

Upper that from is as area, moved so which the Pleasant. you Bridge has seen And Charleston across higher, the Mount Peninsula supply is has know while to Ravenel

goes market at X.X% optimistic you we’ve X.X%. on Charlotte – again, So X.X% to know, But our in we Greenville to from we’re of X.X%, others there. – supply bit the secondary a see little

probably They’re market supply in supply they X%. existing to delta increased So, in X% not jumps XX Savannah, Georgia in that that delivered biggest XX market of has the the years change. into XXXX, lot you – market of know, a other the XXXX to the between

secondary across but up a is somewhere or capital a our only know, impact, same-store particularly it bit, up recognize, it’s these Now miss a it’s not particularly not X% because you diversified but you NOI of of it’s know, significant, bit huge kind you somewhere you or by Savannah hit little but nature than know markets, we varies our – more of the others, of market. so

Hardik Goel

one quick and for just renewal And could you new quarter? the share follow-up, the

Tom Grimes

year. down The quarter blended a XX sure. Yeah, points the new XXX basis X.X%, better basis was is last which renewal points X% for than

Hardik Goel

That’s Thanks. all.

Operator

our We’ll Thank Rich with from SMBC. today you. take next Anderson question

Your open. line is

Rich Anderson

morning. Hey, Good thanks.

Eric Bolton

Rich. Hey,

Rich Anderson

line in NOI X.X% the the the your from year, to sort of kind year over the in end So of quarter. of to that growth the X% last cadence, you XXXX it same-store climbed year means fourth the course comps? on start out basis of you sort I’m somewhat increasingly year of, know, know, you tougher on a than wondering stronger you the where, image mirror if end

Eric Bolton

know, I of prior of be this certainly you we year the bit our, A was built clear a at growth, the year you mean, of will year. had give challenging little for rent that last expense on the course into I year. that of function occupancy going lot momentum that a us more Well, know, comparisons about low over focus momentum a last and year up, that think you know, the had focusing the we

will still the we more the have if carry performance as carry in from off XXXX I be helping and over have the, year offer XXXX. We if some lot in this in lease bit a a a at a blended little year that of baked up of lease lease year pricing will, know, that of forward you know, do trends that number the the, and really a pricing, think think into know, that last you over will, for but XXXX, supply you us of in, that issues combination this lease result saw pricing you markets which we we we momentum a So, X.X%. plans that XXXX current you of is that’s that that from the the our as occurring

little off actually. that we that X.X% a you think we capture in supply these well. performance pretty but occupancy on And about pressures good still in feel think that’s of strong year, of the will from that some last we face as bit XXXX markets, we see a of So, know, you the pricing blended know

you So, particular, because I think in. of know, resiliency the markets the to these of strong markets diversified the of show demand that nature we’re in portfolio in our continue because

Al Campbell

year that’s of but is I’ll is, to X% much stable. sort be in to range little bit of was to quarters a just revenue slated are. there saying because our going higher, we for just more to that year projections quarter second give little all in and that all it’s maybe support And range third that – and are a X.X% so the stable and this the add how all more what into quarters where Eric

Eric Bolton

smart I’ll the pricing ‘XX point the of the and the home that a bulk first blended add to back internet little lower one helps it year in little even the bit though as is half take start a hold, certainly than more half.

Rich Anderson

Okay, great, thanks.

how is bit work In much on making of previous terms this the that’s acquisitions. of easily of of versus cost that And to sort obviously years? for is more capital in sort opportunity? deals of projections more the XXXX How just pre-purchase external growth that a year much

Eric Bolton

majority Well, it’s as of that particularly the vast things more likely of we built. towards that will the get not may I be back to be some mean, acquisitions do pre-purchases the you We – that think of developers get we the a we opportunity or buying bit deals little get end get set a some half things as closer little to for we done. owners bit more year, see a motivated, year the and improve than lease-up

really our certainly, But, be regard. does we generate know, and mindset. day, what existing has at at to that’s stabilized the end this improved the the in yield it you the deploy going capital more bit can that’s earnings by, I accretive little mean, But a to capital really know, you of that investment, driven flexibility you a cost our our drives create to profile. know, on we’re and And margin,

be be sudden, sure just company. profile itself and that the adding going work. obviously that to to compels we’re us in idea to know We to putting of a not earnings assets and but earning spread capital, to there the existing of attention all want money they’re of better is cost to the out opportunity accretive to pay a start go our We is what you

Rich Anderson

mean you your know, So it declining underwriting? doesn’t take capital to cost influence or you’re to yield lower a willing does

Eric Bolton

take is capital bunch yielding as really just it adjusted to doesn’t. we the it know, cost to investments, – begin you not want because a We of simply lower on to, just do No, has.

to We’re to that the company cost adding runs and trying you it is, long-term trying to growth low-earning a investments, really compile a of know, long-term earnings long-term that happens be we’re to counter earnings objective. growth capital and because for protect where bunch just profile, to our profile

Rich Anderson

but year rates and of putting to Well, and mean, for case, of so ownership, another your higher not and think product or job to but from a to perspective, question not are, me observation. last rather this willingness around you to premium know, might relative wrap in I which second a optionality. it the makes concessions you’re the of people you me, you say can rents lead is clearly Anyway, I best to positive sense it with in that’s sometimes strong cap supply, I just lower know, terms making a growth the appreciate the right? that great entertain offered situation be where have newer a market, be supply the

while of know, markets neck your mind, your supply job in out picture, opportunity though, when is the the could So more the the you be actually that in that you this damaging see know, what some consider of you of risk you woods? health have

Eric Bolton

guidance. pressure in runs pricing supply on XXX short-term picture – we evidenced talked in and and about, XXXX lease that as our XXXX. blended I certainly, the below you lease some I as points Well, the mean, know, supply assume it about basis pressure, does over our and basis create a think

that supply leasing pressure into there’s are generated. the no concessions there coming where there’s you So scenarios, particularly get that question into some market, short-term these heavier

vary markets Greenville, in to And in in the and in get know, see performance our like remember, market and that’s to going Carolina as market Dallas, more you’ll effort something both to large full you’re a bit a that tend a can in after. a that Rich mentioned, an region cycle in why focused to market we’re be smaller a across we an bigger like very effort quite pressure our capital to profile South efforts you than deploy I and you by are secondary

as So pressure I going of we some that this think that We the our price rent opportunities over you know, near-term we our to not do but says next most the is the creates about real our will that value I get certainly neighborhoods, of dialed a few think This some guidance. we’re estate in redevelopment fact in, it good there’s be the of initiatives. accretive appropriately neighborhoods, because we’ve we in we to, this the into the good great have a continue the supply new the now got is you, there that money use that capital. improvement those alluded our But locations. right the and and of product good years things acknowledge it that tell that’s of to that’s says making into thing, about to long-term growth some assets, also on coming returns things lot good it high only from

a So, but is darn pressure, know, little we’ll you deal yeah, play attractive. value short-term with the long-term pretty

Rich Anderson

Got you. Eric. team. Thanks, Thanks,

Eric Bolton

bet. You

Tim Argo

you. Thank

Operator

Drew move Babin to with We’ll next Baird.

open. is line Your

Drew Babin

not longer-term Is question Texas seems It all. that baked A that’s there? know, there revenue tax a is benefit. of on earlier question is range follow-on true your Rob’s quick you morning. beginning benefit maybe or kind me that like to sounds at influence It caps. Good the guidance any to like to expense into same-store guidance directional

Al Campbell

going exactly to there the that to for be the think at taxpayer at it’s going I markets. level and asset, a at what out in think you the year all it and things think so mean best I I mean, Drew this we some that’s we the I in No not estimate valuation the our the of each point, know, cap play still level, is individual millage dial market be to to worked is how rates

– of Texas, to and in in best walls hopefully we over I what be dial are that. we the the that’s think be think helpful going is think we going perhaps out is, taxes what play in best would in rows yet say hard and estimate the it’s but, in time, to So – those I short-term to say what we taxes to but when it’s on the put it’s Texas, and our exactly restraining seen

Drew Babin

there’s like that as the and income that of talk revenue new the in a with it I marrying kind the of dragging What surmise, was end other some you’re growth in in throughout that the ‘XX? XXXX, seem leasing the may other it that same-store Double be ancillary be And little spread will doing? of what about towards drive guidance, trend know, up flattered know, occupancy would in blended the spreads build Play Okay, you anything was revenue kind items going is Can of guide type ’XX, and that leasing and anything from on which up, build which that one guidance, maybe blended ‘XX? impact Double a follow-up of high XXXX to goes the other would you in there income the else What Play? on well. kind aside growth from kind you other, in on

Al Campbell

X.X% mid for to know, somewhere X% expenses, growth about quickest range quarter way you our bulk you easiest around the the bulk to just that. internet for had, have would then on have we the what of revenues, NOI do and our And that, top and way program year. have maybe, is X.X% operating so growth assuming would been, talk have think this say without to internet I program guidance Drew been would

– can on. so of so help that beat And kind

get think points X.X% expect combined we is occupancy, that’s to on giving up that XX of or the basis bit a the so. put we on what the combination rents did year. this lease year, a helpful, last The on we blended table revenue little I X.X% with that

would down about growth taxes really little everything X.X% you fee other year. items reimbursement X.X% trash internet the know, X%. you fee, income move other flat then about expenses, and essentially, been a expectation last but bulk for real the would rate Then they’re you year have test items items on estate than talked which, and your the bit, that we And know, other with the to get effectively

what you looking hope I and you’re for. helpful So that’s gives

Drew Babin

of things like side you needle income will being is the benefits coming program well? that might any of anything Is that the know ‘XX off the you’re like kind doing move that’s comp, Play help of hopper sounds or in that as Double of and fees, so you on apartment the it being might and that else other know, the rapidly mostly implemented in worked Okay, there on other element, ‘XX XXXX. anything be kind the technology kind fairly additional else of kind

Eric Bolton

I year a that next Play, the lot course you we’re roll year, tell going more would benefit over first Double think out to the the but be full of I will half this really it mean, Well I year.

Tom Grimes

in half It’s May, and while we renewal. they when deploy on about residents half deployed it, up next and year, lease this year to will and be because have for do sign

Eric Bolton

to up year build XXXX. that think we’ll over that’s I going in this benefit and see more

and that alluded Play Double XXXX. other growth year, real XXXX that we though, this rent talked investing lot effort to, actually doing year in Al about emerge capital here this the the that is with calendar and that a enhanced happening in this What’s upgrades. thing, The that we’re repositioning fund will is we’re with of more amenity

here. will that’s benefit that play next what’s play So lot year, this a not of A year. out really

Drew Babin

all helpful. you. very that’s Okay, Thank

Operator

We’ll Sachs. Thank next Goldman our you. Skidmore question Rick take from with

open. is Your line

Rick Skidmore

but the Eric, number, new what can initiatives in on XXXX, initiatives Good morning. Thank speak some in that you. you – perhaps new missed your prepared you comments are those XXXX? focused in perhaps I mentioned you’re to

Eric Bolton

that program was in – the Well, we’re here. this you it’s got I we’re jump more – be year. technology now mean, out to the implementation high it’s home initiative, going know, the I was internet rolling Play bulk out Tom that can Double smart we referencing, what speed rolling

this we’ve rolling were, was impact of that evaluate implementation working possible assets in year. are some alluded chat, some continue there’s some year, the really know, that got And to was on to then just mentioning, don’t as be technologies, be you expect that and any we’re other for testing but some we’ll AI post will with Tom the We just legacy I and and new those and later year, as things you this year, I other programs out things to, this other opportunities repositioning mentioning, then XXXX. as going this know, self-touring out

Rick Skidmore

Great, you. thank

Eric Bolton

Thanks Rick.

Operator

Green Street with Pawlowski John to next go we’ll And Advisors.

Your line open. is

John Pawlowski

to question. just follow-up a response thanks. to Hey, your Maybe Drew’s

the lift like internet XXXX contribution XXXX? Play expected, that sounds it rollout as in for the So or XX than Double Is goes if the NOI greater the in NOI bps the accurate? is

Al Campbell

mean, there’s More building I rolling would phases major two it doing we’re program, one we’ll have that know, the two of I of second in comparable, those we’re layer say. a of you providers one. providers full out, XXXX,

– something it say probably be something comparable. would I wouldn’t it might increase, So

Eric Bolton

biggest maybe less got on Yeah, of the I now line slightly portfolio. we’ve working in rest little equal, a provider the and we’re the think since

John Pawlowski

markets that secondary lag? think the will terms then your a comments – average same-store aggregate fair will markets And your of below it growth? in do may to or which lead listening Tom, you read revenue which pack Okay. Is on be the smaller and an as markets

Tom Grimes

of some them I know, don’t exactly both on well way. have you I – split don’t – But encouraging that that that we’ve both equation. got places on sides of sides

So us Huntsville Memphis Phoenix for and would and I and you Birmingham, the that think are tell we continue. but players leaders play expect we to – are runaway Raleigh have and solid pretty probably I’ll been

John Pawlowski

for one accelerating – you could Okay, then it meaningfully I for last sneak this nicely then and quarter. there. me growth few final in DC been has and you quarters revenue for slowed if

market? the this your the or hit in anything market there is slowing So idiosyncratic DC in that quarter the eyes fundamental

Tom Grimes

the fundamentals the the prior are two believe It’s slowing. We year, don’t between comparison a really quarters.

basis ’XX and we point this third quarter quarter quarter occupancy fourth tailwind had that comparison we’re quarter, in – last juiced were around. of And So little a the at bit. a in go XX% this we revenues the XX.X%, XX

So we had a XX basis headwind. point

John Pawlowski

thank Okay, you.

Operator

from our take today Stifel. we’ll final question And with Guinee John

open. is line Your

Aaron Wolf

Aaron Two Hey on the on and Rock, per on morning. for This Greenville unit Arkansas questions. Can Wolf the you is the portfolio? John. acquired recently price detail asset you that guys, also provide any good quick Little

Brad Hill

Yeah, Brad so here. this is

details up that of me. front me in of get Let the

Greenville the right get me. price to there. you So per sure Want Excuse the the deal. unit on make I number

that a then cap I’m So asset. on sorry, moment which deal, [XXX,XXX] the [ph] as And Greenville that a your for rate X.X% we question? second was ago was a said unit

Aaron Wolf

Little Rock. Rock. Little

Brad Hill

under we Yeah, was difficulty] total Rock price it [XXX,XXX] [ph] so there sold, just was XXX,XXX our the a [technical assets Little unit.

Aaron Wolf

great. activity the in may disclosed share price helpful last on you. this me you but if ATM Okay, one for average Thank And already. the and you have one I apologize last the quarter? did,

Al Campbell

from You will that press can I to. the release, a the come proceeds that’s share what the shares believe and get $XXX around

Aaron Wolf

so Okay, much. great. Thank you

Brad Hill

you. Thank

Al Campbell

Thank you.

Operator

And today like We call. thank our everyone conclude session today. this for Q&A would well to does as for our as participation your

You may disconnect at any time.

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