Mid-America Apartment Communities (MAA) 30 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Tim Argo	SVP and Director of Finance
Eric Bolton	Chairman and CEO
Al Campbell	EVP and CFO
Tom Grimes	EVP and COO
Brad Hill	EVP, Director of Multifamily Investing
John Kim	BMO Capital Markets
Brad Heffern	RBC Capital Markets
Austin Wurschmidt	KeyBanc
Amanda Sweitzer	Baird
Alex Kalmus	Zelman & Associates
Neil Malkin	Capital One Securities
John Pawlowski	Green Street
Nick Yulico	Scotiabank
Nick Joseph	Citi
Rob Stevenson	Janney

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to the MAA First Quarter 2021 Earnings Conference Call. [Operator Instructions] Afterwards, the company will conduct a question-and-answer session.

As a reminder, this conference call is being recorded today, April 29th, 2021. I will now turn the call over to Tim Argo, Senior Vice President of Finance of MAA, for opening comments. Please go ahead.

Tim Argo

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

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

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

Eric Bolton

Thanks, Tim, and good morning.

in core with We recovery to is were growth results FFO as ahead getting solid well are our started. year the A rent encouraged the clearly of expectations. start

across economies starting the driving of head recovery continued into year, employers like migration to and A of continued that this the we're Our demand basis the running region, is the we and higher Sunbelt overall are last ahead our are portfolio. jobs slightly summer important season. rents as forecast trends the that with improvement. leasing to We blended seeing of level our of for coupled lease-over-lease just on combination build, is within a

our about aimed new a higher We're Smart rent growth unit year to of platform several of rollout year the to and repositioning button to make strong protect in during hit we order excited interior redevelopment last It COVID, full start we technology when on off the with the this was projects capture all of our at this residents pause points. program, about time and as the upside to these these of this in year. Home are teams price communities programs. Our well initial three projects as from expect solid progress to months staff

and housing job and we demand market closed contribution from development migration City development continues apartment see expanding and our we're expand, years. look to few and our have We strong across the continued Our the forward on Supported there. excited believe growth this next presence in new our growing poised to to balance our to are trends capture pipeline our positive to Lake platform month opportunity for strong Sunbelt first we market. markets, sheet Salt by this increasing earnings over

based on some the the the across that trends and that pressures Sunbelt market the worst approach surrounding quarters. to the the slowdown MAA's worked clear are us. few COVID of reopen, over to to has Sunbelt the recession with in it we're the As that clearly begin diversifying behind seems the past pressures soften unique economies seeing, associated of leasing

of new our in to impact technology a finally, prospects cycle, in to team existing more team temperatures February. the their to appeal closing, about all Texas In position MAA and over nod frankly quarter, our coming a thank past that special we harvest put serve I external winter a portfolio, coming higher redevelopment this in for the cycle. our markets, in and recovery initiatives, efforts we the hard the pipeline, from with have the outperformance in for to want capture freezing Sunbelt excited associates for from worked residents efficiencies, growing our our who within the upside work growing expect to solid However, of storm the we're combined growth to recovery several through

those to on commitment mission who Your our our is Tom? of much serving company depend appreciated.

Tom Grimes

across the X.X%. up The very from Eric, strong morning, is you, the start everyone. XX%. even This quarter pricing was the with for XXX had This quarter and quarter. up good first during quarter. of for XXXX Thank points drove and basis first the quarter continued recovery up the fourth the volume Leasing blended the we in portfolio achieved

leak steady to technology strong In redevelopment a X.X% on April XX.X% maintain well the upgrade points Collections to redevelopment Smart We're growth the year of assistance or off XX.X%, as addition, in our of number XX Home seeking this and to start rent April interior rental diligently only of for assistance XXX units This as completed time. plan. of our strong were for occupancy we April participants XX,XXX rent X,XXX product in support over to mobile We number in rents rent. year basis packages. well has thermostat XXX program The as we Smart billed identify the dropped of has year-over-year Home of strong. interest as were our quarter. worked that includes of detection. lights, represents need initiatives. improved package saw a year, daily in the We In during just because collected relief to installation first effective and and the security We've unit on controlled decreased billed place first The basis quarter average We able COVID-XX. quarter. last had residents those on help those all-in plans. of who

unit Home For to just XX,XXX upgrades the full year interior of and XXXX, we install complete Smart over packages. X,XXX expect

begin final this the in six good line will in we that year. work quarter. repositioning first full the in are reposition the our results another collections completing stages also have and are April's We saw of eight on properties the with first

As for March of numbers Leasing January, we've least which ahead is of this April April and year. XX.X% XX, of rent comparable points of at activity strong. the February basis is collected billed, XX for each of

New pricing is to pricing of running X% prior April lease-over-lease Renewal prior running lease. ahead the in on lease X.X% the of in rent lease. April close is

prior as daily for Our few the last the resident a satisfaction April which is of plus the XXX scores all period, year. points Exposure, is X.X%. and continue basis our remained and vacant better result April is than strong notices rent winter units actually prioritize to This year of continued last which XXX through a is currently units support basis still points ability to storm, in month pricing. ahead XX.X%, by supports and We than renewal are XX-day occupancy which XXX impact average our those, of should lease growth. just of year the have points, focus of basis April including a down better strong is on

positioned see our we leasing expect as job increase We by markets, expected our continue. the recovery into Led growth, XXXX to X% versus region is are to of season. we busy in the our X.X% in broad for which move the XXXX well country negative in

Eric's Orlando and and recover Raleigh excited Houston, I'm Tampa, I expect of They've and over and our at our expect DC a markets We comments resilience I'll to the to last and but XXXX. to rate. them well. Brad. their thank to Jacksonville the strong shown would adaptability strongest year. to proud and echo now Phoenix, teams call tremendous about turn over as slower start be like

Brad Hill

Investor everyone. the morning, good demand product our and Tom, within region of Thanks, for strong. remains multifamily country

our for sale executing cap acquisitions drive we demand rates, rates further active down any as first properties communities and imbalance investor XX closed were desirable mid-X% interest X% the which and the forecasting causing not already Transaction We year on projects markets. pricing. existing market, locations down transaction guidance, in a continues that we is rates our remain and of that basis points cap for supported demand quarter supply are of This last frequently compressed points now are However, from in of outlined XX from properties XXXX. on range basis low but quarter lack end. between low a in high-quality continued aggressive robust has by in to within underwrote

expansion While acquiring we to progress the continue on pipeline. make challenge, development our is of a existing assets

April As noted in part of on partner in pre-purchase two as our our with program, where we release, parcels land we closed developers. third-party

of We expect both start on quarter. second these to projects construction in the

the project midrise is Atlanta West Midtown the line located five-storey Microsoft's miles than Atlanta, announced campus. in from extension of two area less along Our recently belt development a

on United communities closed Salt Lake top five in also States. of planned Daybreak park community planned the project surface the one the in of City, master master four-storey We a

good educated City, Lake attributes Salt migration our characterize of We growth, job that are that overall our into workforce. to excited shares expand market and trends footprint: many a highly the footprint great a

have these year. to year our development two other later sites within into hope or addition construction this footprint, next or and to we contract, under In start that owned we projects, project on several

some construction team have as of job our seen mitigate increase. lumber. construction have partners helping in well material this to run-up our We specifically and costs, as us done But good a

some work our our with but items, impact supply the to chain around appliances, we've to on issues to continue see been these on schedules. of We other able windows disruptions and majority projects, minimal cabinets, delivery

two lease-up rents in demand see all well, properties our well to velocity Dallas Worth and region very to perform our of of as ahead or expectations. the continue continue in property line and our We leasing our in and leasing with pre-COVID as country, strong in Phoenix, under-construction Fort with

dispositions wanting from Jackson, our bidding XXXX, properties currently contract and the four properties. received strong market are As investor ending quarter inspection portfolio for planned coming part properties with we our strongest in under with the interest, The of first buyers soon. to our buyers very all period took Mississippi

to quarter. close the third We in transaction expect this

We to of plan in are the our the also disposition on quarter. fourth remainder XXXX execute on track

permitting XXXX, the before new late increase of That's possibly recent the starts to I to comments. still down of view all reflecting into XXXX's unchanged turn next I'll Our call prepared and in to in that and have year XXXX. with similar data. supply Al. XXXX way permitting looks Based start on over increasing the expect the new we in year expectation trending remains deliveries this trends, very

Al Campbell

the for quarter performance $X.XX everyone. share of Okay. Core Thank ahead the per you, morning, Brad, share $X.XX good of was our first guidance. per FFO of midpoint and

quarter, revenue and As $X.XX quarter. on slightly our was of favorability expected, improve to store per trends same that performance the about ahead forecast, providing through continued operating for the NOI producing share

during expect that were year. stable XX% of about But leases quarter, strong signed first pricing keep remaining over rents for be and in have we only to the our growing third and and of than second have were which summer of mind in quarter. still from effective leasing favorability The occupancy expense, remainder We quarter. majority the the trends on continue overhead season the a came both to leases impact projections our the the to in interest and effective the lower

our progresses unusually as and overhead year normalized a in storm So expected projections our our grow toward and Winter communities. at our to activities outages travel costs during more the a where move Texas levels. of line frozen original more of pipes are portion quarter, number damage electrical Uri cold led to other temperature as impacted portfolio with the and

of majority insurance receivable MAA which be down units. vast We get worked about hard losses to was to storm. to online coverage. quarter related first quickly. during established incurred residents reimbursed a the for $XXX,XXX, costs, and expected the only the affected earnings through our quarter impact teams casualty to during Net care primarily back related We some the operating the of to Our units take are

sheet remains great Our in balance shape.

rate During quarter, off paid million an secured of the at $XXX of expiring X.X%. the we mortgages

seven also funded. We quarter completion of pipeline, of of with of cost projected additional $XXX development cost at included total million which, communities $XX $XXX million an to million, remains toward our funded end, be which

pipeline to which well As we later discussed development And end, expect April is this Brad $XXX we construction as which as within acquired limits. mentioned, deals, our grow repurchase year. year by our to should autonomous two million around begin part previously, of in land development development parcels

to more investment million mentioned, As redevelopment, progress first funded credit. these a late make and $X.XX to line XXXX reflect contributing legislations. a ended guidance the a the to of low Home also increased continue projects repositioning core and debt-to-EBITDA growth total of the quarter with we And quarter, range of by of Tom X.X internal under during our FFO quarter $X.XX to combined expected good interior $XX.X range earnings million of for leverage, borrowing only three We begin $X.XX in and performance, capacity We our with XXXX. to in toward programs are the property times programs: full first and finally, way per share. during we which cash $XXX year on our Smart our strongly quarter to

our favorable comparisons initial impact Our plan several same to coming with continue due over clarity to prior We quarter in after to year of we'll line the store last of forecast, pricing the quarter essentially in more performance revisit when and the second trends we with the most trends second the were guidance on have remainder year, COVID-XX the to key assumptions. year. expect revenue improve

in the all that's prepared have of So we way comments.

over you back for Christy, now questions. the So turn to we'll call

Tim Argo

are there? Christy, you

Operator

Markets. Capital Instructions] ahead. First is from Please go [Operator question Kim with BMO John

John Kim

quarter, growing How is in steadily it each at guidance compare year? to month that first does On Thank the when were throughout you projections came lease like sounds your for they April in X%. your the original you. up and rates, effective with coming

Al Campbell

is this John, Yes, Al.

think the think can talked full in strong in as for if team pricing forecast take and I built somewhere expectations we the to it's year, tag year. Tim you blended I But we expected X.X% our and pricing trends on had have about, this I one. our forecast, our for around are both

blend I half together And if what we X.X% revenue. basis those have happened a what year, think we pricing, come in production. you you that take of at look revenue, two which expect year, about terms can X% up at that which this overall with our and last about in of point was you add

second yet. remember, quarter. got about, a go we've long encouraged leases take we had and leases quarter, in lot so now, that certainly we're So we that look second as in the And of come by see the the we'll XX% But at talked we've pricing of that way trends only another a in and third talked about. effective about Tom to to the our

Tom Grimes

we return sort to And plan for did seasonality. a normal of

to back seasonality. it normal start little be accelerating with time expected be through of to this call we accelerating, down move, to January So a then during and bit it, July kind trend

John Kim

an third be... the in it Or easier is last trend So data, is you April to it seasonality expect And high off the from that second down? with comp that expect is coming and quarter, you year? to -

Tom Grimes

first weakness. April leases, new on Certainly, the year, last where was the we kind saw of month

getting some we we're But it good to seasonality. grow of comparability kind would expect return So continue to there. to from there and that

Al's we're point, So certainly or encouraging quarter to it the we'll I with plays out next over the think and it's seeing, trends how so. see

John Kim

the does pre-purchase expect initial is to to cap question the from program. second have that compare are on program? you stabilized What My the rates And how that development that yield? development

Brad Hill

this John, Yes. is Brad.

in line overall our yields expectations. So pre-purchase generally are with development our

deals now, on those are yields in seven the yielding that no X%. deals have, between say, books really those the about difference But generally there's platforms. the So I we will two right

pressure costs. to with a very basis There's to would costs about of to we But country, construction very, just broadly if some by - that's associated rents XX publications that. XX lot region offset our well. seen continue expect relative of somewhat that. do But in you around reduction footprint points our have at the look We in

cost expect be there in increase our rents expect some to that and So within by offset region. what of we we the do impact to

John Kim

you. Thank

Operator

The ahead. next Capital Please Brad from Heffern RBC question is Markets. with go

Brad Heffern

the Or renewals those leases impact expect COVID this following of would in differential to the year? lease Is time still there what about and of on normal sort between up numbers? the new some be is market it that's again. the for hitting a April the Just numbers you

Tom Grimes

If we the begins new is and to That and the things between widest to would Brad, Yes. expect at have looking it's summer. narrow time. rate renewal point this in then it Tom. and and are pretty in in gap tighten normal, It's winter lease that

Brad Heffern

And implying time of whether cost long, sort since has I philosophically, with issuance. this it mean, would found it. of lower curious, done market a it's raise you I'm sort you Got you equity sort and been of at any Okay. of maybe a long point, the generated then maybe equity make would sense or attractive capital continue recycle the ever to to the if cash money will acquisition opportunities. by think development and Or accelerate just business? use MAA

Eric Bolton

moment, able coupled deploy the we're this Brad, opportunity we continue equity. find and is Eric. capital, going the need believe progress don't which pace the under for that with see sales asset to to that on, we're a At we to

we to began we'd continue the fashion and like that and and lot really market to think recycling have that external where we opportunities it's yielded moment, the feel we the in for the growth capacity between change the equity obviously need more balance something the we point. some have, If deployment believe acquisition that don't we on revisit to monitor. markets. I have tap But a we the are to a opportunity, sheet,

Brad Heffern

Okay, thank you.

Operator

And from go Please KeyBanc. the ahead. is question Austin with Wurschmidt next

Austin Wurschmidt

last I changing some considered a little a growth your Similar mean, that you're more I look the and of some for question, seeing of to getting deals strength in have recovery that you in mean, recognizing cap underwriting low. and and aggressive bit But economic sort assets the the the are really rates in at? competition is here, taking acquisition the you're of given strong growth

Eric Bolton

mean, we that we're what and bit realistic challenge as expect we be Well, constantly can thinking our sure a growth I being as we in mean, Eric. to underwriting this make is I our do. rent on

at term. of new what have now, very development. I those at assets pretty of I the increase a think Certainly, overall side, requires mean, to getting the once we're level our earnings the portfolio comfortable yields that on But end pre-purchase of assumption for the portfolio with. can yield the that right We and and it's we quick. time on fully program happening level potential both adding that the we acquisition the process with looking numbers time there get is think And see will of long a stabilized of the sort on there. long a reach work I make dilution frankly, lease-up And so construction period that the a of day, hard associated the and the stabilized,

I have to frankly, a the On front. be now, I dilution to you front, with, longer, the that is comfortable of we're right on than would think and able do believe, pre-purchase development front level acquisition what frankly,

assumptions a we of we're reach we're level pushing frankly, require as right not So that, comfortable just think and with. hard terms now should, in we're as would beyond we what about it doing of

Austin Wurschmidt

a appreciate they've bit. thoughts. and back lease on like we Understood, given And it I then is also occupancy into how And the mean, guidance. April. sounds rates going to continuing just to touched strong been, ramp

So of the half trends and how just through for can back occupancy thinking there the through kind you're assumptions year? balance the of you the of the walk year

Al Campbell

Yes.

occupancy going last So into year occupancy compared focus on pricing. XX we dialed in a basis the to year, about pushing drop we in as point

somewhere XX.X%, So XX.X% so. with around or

feel about and stand that. given of where kind we So QX where good now, right was we

kind pushing we'd focus occupancy more where steady, and that can rents a we be is. So given and to of hold expect on focus little it this again, pretty where environment,

Austin Wurschmidt

Got it, you guys. thank Appreciate it.

Operator

from Please Baird. Sweitzer go is question ahead. with Amanda The next

Amanda Sweitzer

Or rent relative larger else ability revenue would recently those pushing anything growth going between your markets income markets. metrics that the to impact large forward? in increases differences smaller of there those by Your markets? rent continue any your some to Are

Eric Bolton

right ratios larger is No. with in in markets Amanda, those the line income rent small is small markets. market our or to

continue we worried there. all. about like So opportunity feel the Not that at will

Amanda Sweitzer

And it's markets? in or similar competitive expect dollars, small caused specific double-digit do expenses going Okay. had Is supply any driven rates And another being then that new relatively this you marketing forward? but you increase of increase by quarter. by

Tom Grimes

comparisons. be expenses And things. think are on our - in at for variability some help this. for year, this keep personnel but our the I it's little of of the a to And prior the bringing or center call of the a new X%. combination full see costs activities, quarter year the or of some year, - this But It will bit in online as for both will online helping our below marketing There's expense is we'll some lead which Yes. relates in lead solutions, tools our flat year. pressure keep it nurturing was generating which

Amanda Sweitzer

[Indiscernible] the time. thanks, appreciate

Operator

& is Next Alex Please ahead. Zelman question go from with Associates. Kalmus

Alex Kalmus

move-ins first at quarter the state, that did history? percentage that and I look versus And at Looking what like highest quarter? last XX.X% rate. was of believe out how from was is in trending the

So curious how that's trending.

Tom Grimes

on. and XXXX, it the trend we've that was Low that continued a of was been years. couple QX It's for from up where That's is percentage, Yes. - point of right in tracking at same X.X%.

So is it's still continuing. about or point basis a so, that and increase trend XXX

Eric Bolton

I Eric, this Alex, is a would that add, portfolio level. at that's

a And Raleigh, to to of migration that, be of Austin, that whereas average, at start markets, places markets of markets some California out tends a more benefiting Phoenix, are the like to you to tends that likely bit higher. and below so be some the like of secondary some bit from some it it be look our of the little little

of in state. move-ins Phoenix As from of first quarter of would double Over came the state out first our Phoenix quarter, move-ins from in out example, in that number. XX% an our the in

Alex Kalmus

the you Thank for it. Got color.

a Another - just on development. the question

in the as rate yields spread of What versus spread is or Or a are similar And that gotten spread the acquisition seeing expanded has cap on So what that today? tighter market? historical? around acquisitions X%. we're because the is a traditional

Eric Bolton

as is down points looking that's right costs. comments, construction acquisitions. the my in I for on are on development basis rates cap been And that's would spread said rates certainly, of basis how just XXX I XX and average. would opening yields bit the down year-over-year. and has now given But say little points - And in driven I amount my say cap a by acquisitions the impacted Alex, XXX, Yes. capital

existing spread much So have bit bigger, say a yields the little I the gotten probably acquisitions on would has given compressed. how

Alex Kalmus

thank you. Great,

Operator

The next ahead. is Capital Securities. Please Neil question with One from Malkin go

Neil Malkin

markets to growth portion First When etc.? multiple guys get levels, even of market. about sheet cap bigger you. for rates markets and and the and picture then are the the balance Sunbelt you bigger you really, guys with portfolio fair and drivers, is undervalued in across question, clearly question, corp. it rerating, lower of a how mean, Eric, look there think the your I you trading When be existing pie current going maybe where future you are a employees all like to relocations, Sunbelt say at are particularly should a that yours? and at

Eric Bolton

Neil, least of what driving to ultimately, markets. as that dynamics our we job see ability think at Well, are the compared sort from non-Sunbelt that drive growth, I and the rent do that to growth

prior COVID. dynamic of of has that begun to that as was under think certainly on, lot been much to sort reported those trends. And shift. I COVID somewhat a accelerated shift I overall And clearly way, that, think has

that's so driver regard. of I think dynamics for non-Sunbelt, a the and that me that, growth dynamics new in suggest Sunbelt day would I rent And to factor think it's the one demand that versus that

priced gateway in I begun that, Sunbelt bit you terms markets. would versus cap is I The being of second to a in thing rates adjust have real how is tell estate think,

really with these lot of down was lot many, international demand cap for these a that markets, and more of in a frankly, of capital markets. bigger gateway more that, particularly investor many familiar just rates think knowledgeable I of drove years a some of gateway lot

think, past that, taxes the a will particularly, I all international a have year, are that. more think historic to cap continue open favor growth I the attention going I has that consequence will as remain think, been and years, begun between last I that shifts about investment community certainly has think few trends the think think today. Sunbelt. I bit compressed capital in compressed and cap the gap the those job gateway sort I And for also other population US to, of regarding think it again, that rates delta is the historically. eyes the be in and they I more factors the And markets, of versus or paying And non-gateway than narrow rates that to on

used today logic that where basis some in do terms estate I is should of it day. real about to pricing think to or and and there think tell you what you're reasons, are be continues evolve. what few Sunbelt of think pricing to versus will the about years five think of on the to I investor those to able saying for a a to both So six we I ago is perform, non-Sunbelt. logic some different And perform years in how lot appetite there markets relative to It's next a how platform is companies these able

Neil Malkin

a day. totally great agree. I Yes. It's

institutional A for what technology of operating new for about guys and it, asset kind over be, of, Next wave question of implementing on like management. be out you I be of Can to think level the something about really the conversations I next with three years that how is you just think about in property of the technology look the how talk that's lot side. shaping enhancements revenue think you you terms of recent kind property to need and the the say, along couple on a anything next mean? to going years. is just headcount, we like would lines and I those leasing think, And of looks management, about side, sort over interesting expense maximization, then how

Brad Hill

I our under in way property out. handled XXXX will the a mobile built attrition the and improved. touring. overview high-level on budget process a prospects the technology, see from That's one give call in We've expanded there's that our automated improved is that side mean, the speed they and which clearer deployed about We've and are billing deficiencies which some upgraded under software, midway automating And that way which we've out resident a tests move or they then through what have And in, reduction would of, to changes This We've reduction virtual automation, What's the we some and got things I right has the with sales us XX we their self-touring, the XX the clarity be as covering maintenance staffing give solution coming if We're the deploying engagement is to next, positions attrition. a you makes to inspections, - make into is rolling office then now of but of a with through interact of another business. the us lead X% leasing condition would of as handled of I I automates kind sales XXXX. so headcount helped mobile on-site. expect implemented nurturing clearly you're business. one. lot about to well when transformation calls we process. solution, satisfaction. multi-location I'll efficiency will also really is earlier it move an expect Neil, inspection support, XX and apartment and ongoing headcount We've Currently, our another mean, us center with have through prospect staff. got follow ups. on some in how allowed resident, correct. phone document

Neil Malkin

Okay.

and this year XX XX year? XX So then you're next to saying

Brad Hill

process. this Yes. an evolving At it's point,

Neil Malkin

Yeah, Thank that. sure. appreciate you. I no, Sure,

Operator

from Pawlowski Green Street. is next ahead. with Our Please question John go

John Pawlowski

is or that follow-up that kind comments on one sourcing? new the on XX land is start? to Thanks. Or development, deal the basis yield your compression, you've currently projects that of point started you're on compression on on about already Brad,

Brad Hill

Yes. That's on new, John.

construction in impact No that made intact. are when projects now, costs are on we comments, as construction locked right have like the under or rents a So that. my and Those construction. anything we point all schedule. those Those are start up, in returns lease on I in

intact. are So those

that costs to underwritings So have my we have was really side. development reference new the of impact to and would today that new the we today on related starts

John Pawlowski

have spread you it probably structural fever improve enough the starts? cost the bottlenecks next or supply the time to chain on pressures this more If construction Okay. you be transient, And finally continuing, talking rates? less giving these do continue cap to not sense will and we're break year that

Eric Bolton

thing know. fact John, development pressures in thus get the and certainly I the that, opportunity withstand they the as a growth low I and - environment, are, optimism cost. as at some again, And of this withstand meaningful are other rates would the we've today's we side to that supports, level that the increase. cap the are increase think the improve continue remain demand opportunity fueling have at providing so, stronger. any at developer and is that to interest to the some ability skeptical certainly the of to rate continue think sufficient I'm slowing underwriting seeing also Eric. growth that because the to seen moment to see cap that rent that - and but I to far tolerance ability that I exit on and on I don't I level, some hope level as impact you that's as could level cost of the Where long add, the think

of these a think you to see demand and land we're see we anything continue start to the that we processes of affect I just beginning may growth things, things. likely to little comfortable as And cost under that to population the than supply out Sunbelt the though, that materially a of a start bit that have increase than moderate they getting probably difficult. is may I pressure, is things anything restrictive and that governments increasingly markets now. that see more more past. as that been And be just that other infrastructures folks think zoning the little to I get facing think some as some One development zoning see of and to these more than and with stringent little went growth in local increasingly permitting bit through, are I right much not it's all behavior permitting likely I'm the the and else, levels of much, happening some

seeing But material point and see a there's pressure. the any in think at material pressure we're think pressure. full just much I decline from are a away I increase supply ways to pipelines in too this

John Pawlowski

a you just months acknowledging units give question these revenue Final Could us the units, Understood. quarters for the you me. the down coming in from for these grand Texas. mentioned of sense down impact kind on Al, small or it's of scheme things?

Al Campbell

with think answer I'll can I that. just and that, start Tom

get of the have about of we'd is, I'd a left, few the in say, we very online I vast down. those get we majority hard end as units very to are say handful And of quickly. we the teams that April, teams comments, think through a only as worked talked units what -

about overall, I seen, first the impact, handled. been So majority impact already, you've my most the has that the quarter in talked Tom, bit little that might? trail, seen comments, will but as A of you John. Maybe what in you've of

Tom Grimes

mean, We be total freeze, remainder as service those the are but I were units shortly. of Yes, to up it. the down turnover a XXX those of up. a XXX we And no, without a damage, teams had John. result will back the with in able lot had generating of more already

didn't status. down they to go So

John Pawlowski

you. Okay, thank

Operator

And our next question Yulico with Nick from Scotiabank. comes

Nick Yulico

Two questions.

this I from those to a about don't out just feel portfolio First, how - right think unless a pricing that the give assumption they're concessions, you you effective thinking Can benefit rents rental impact your how concession year? us you are for your helps if your of much removing missed get that? How And how currently, you kind impacting on later now? concessions, that it. about I break

Tom Grimes

you we effective give overview. as a I'll And Nick, a price quick know, you basis. net Yes, on

comps the in our are concessions, using concessions lease-over-lease So you. we we're immediate really that the with for of this for the of this X.X% potential, of year. first of same basis it's quarter quarter at dropped XX in net to year third potential net the the them. share only store at submarket in points and are rates group And are when doing just concessions used But where peaked

sort this power. following of that's So of improved general trend pricing just

Brad Hill

the Nick, to revenue over that our I'll life being spread add we same lease. reported those the store the results, way of includes that,

Nick Yulico

Great. Okay.

on in your to was migration markets. question other my Just

don't sort in this people gave your of data. of areas, You have an I past your in Atlanta. markets, gave terms stats coastal rentals move to think such the searches from you cities in as gave coming for update and outside today. some the in from you cited But some benefit portfolio past, about of also etc., you

changed because, have just benefit all to we're see you if And I'm coastal obviously, guess, I at in whether starting also that. So update on improvement that in has an occupancy wondering some markets.

So understand portfolio. how just your that's to trying impacting

Tom Grimes

around it That's Eric in portfolio them of of was trend where XXXX, we're as The move-ins that's has demand quarter. And the XX% It's read. at our then in level earlier, continued. from for moved quarter. high the out alone up fourth the to a X.X% about It still market. rates. was pointed it was And search seeing first

migration rate And in little secondary was double that in our from of for some place a Phoenix, instance, - In it in of less markets of a like that get of migration. place area. out

trend the that bright part Sunbelt. is very future of - and much big very a much alive So of the

Nick Yulico

everyone. you thank Great,

Operator

is Please from Joseph with question next ahead. our go Citi. Nick And

Nick Joseph

how become? build market Salt thinking you that are Lake and City further about out How of could large the

Brad Hill

this is Brad. Nick,

a developer building coming being to stage perhaps the partner be given quickly said, of or in team we the operational in for ability development buy the through like acquisitions, Salt City add efficiencies, projects. And just an who As presence through to ground development to a get and first when up. there Salt to with trying at from then market final in the and call for projects three, is us, to and with Lake there we'll that Lake, has four we'd to, looking we next go phase first eight started two our step dynamics the it, there six

So with that under new we're have project we well with that there. way a announced

we I a has market. have there a we're partner partner development said, with the in that As that partnered

and looking they're hopeful we're that add our presence we So actively and there. can evaluating to quickly sites, new

Nick Joseph

any there other deals pipeline? currently in the Are

Brad Hill

but moment. one There's currently that Not site one is that's Lake City, there's for the Salt imminent at land no. LOI, not under

Nick Joseph

near entries market any there new other are then expected term? in the And

Eric Bolton

Nick, all couple sites at opportunities got Triangle same We've our at site footprint a that this Eric. in sites in is at within moment. area controlling Research in continue to we're working. the some Raleigh-Durham in specific. some in land another Brad working the I Nothing of look at what We're still the moment. markets. just Denver But mentioned, we the we're moment, it's Tampa. beyond the other mean, land But

Nick Joseph

you. Thank

Operator

Please from is with question Janney. next the Stevenson ahead. And Rob go

Rob Stevenson

mean, do to this many than deals in start on the that development how follow-up, XXXX you year other the to two land brought I a Just projects standpoint? expect guys from you

Brad Hill

Rob, this is Brad.

so at toward. point start We have those. are we're anything again, point two this with at those working any But this happen hopeful that we're what diligence, can can in year. we due obviously, But that's time in

mentioned, do we starts. under XXXX likely and we more sites are under other those have contract, As control but

Eric Bolton

Denver to late would start three-phase It are will area be predevelopment project. And we year, called that Airport hope in a currently Park, XX-acre got site that we X. be We've doing the able this Central Stapleton the to area east of old on. a Phase

big project be for So a it us. will

one that can started in I've Lake So two hopeful addition one in to get Atlanta. we this the in year, we're Salt - in and new late mentioned the

Rob Stevenson

expected And two what's here? costs you're the rough to the that start construction on about

Eric Bolton

Lake think let's got project right here. So it see. Salt Yes. I million. it's the $XX I is City,

Al Campbell

Both them around $XX right of million. are

Eric Bolton

$XX Yes. West million for $XX Salt Lake million Midtown. for City,

Rob Stevenson

Okay.

have And to so project delivering you're here. going the Arizona

come that will out, projects. that you'll two with replace other so And

of you to get way the deliver the pipeline about least neighborhood it? somewhere you to to will and at go the up start temporarily, of your in until about other the back the is think so, half more $XXX ones, And of million year

Al Campbell

you would we there. of I what couple we talked start about possible, the as or about think Brad are being the in easily And starts, of year certainly bit Well, a getting in has kind a the committed, talked pipeline I And so couple a we've way these, that they put about of deals what's talked about, tolerance are rest or potential a the so. about. year-end. there, total numbers the Yes, could the well and project, that we Eric math, that's past. talked is, got $XXX how what a say about about I once - follow about the expect in But million $XXX around we what's call, would couple the that big million Slipped of talked their we our the difference. within to but cost, what's see beyond range talked under as

what we're expecting. that's So

Rob Stevenson

ongoing cost When what's store how Al, far then from Okay. growth. the it's continue? really that XX hit release expense that package? in I or basis mean, the does future And into start that does to runoff, cable burn same the You down the sort noted high-speed guys points bulk of etc.?

Al Campbell

We'll let pretty on close end. I'll to the the get that. you Tim details give

Tim Argo

Yes.

but item, then line of year, think sort And next a we outsized of it It bit I will the call in think have of if you XX XXXX, impact I to impact on level be, normal in points a for impact it, as XX. to expecting that of not year, a becomes revenue get expense to the certainly, we're as getting XXXX. will. basis full well. we're it And little

Rob Stevenson

Okay. last me. guys weaker markets stronger had you than one And any or far thus Tom, in expected for then XXXX?

Tom Grimes

that they're blended as in on in it Orlando bucket. my, were But little put parks, moving QX catch basis QX, the basis. now is in back. a laggard good Yes. really theme I the list. Orlando. shift back, from would a maybe to that's The encouraging very And on is feedback and it along the month the was and improvement last blended of we're pricing again. bit gear two theme to hospitality to It's see getting XXX is see Disney as Orlando brought it stronger its restaurant ago, up pricing a, again. mean And a side, I on They opened far like points is

Rob Stevenson

than weaker far? anything And expected you thus

Tom Grimes

The slower positive. pace. but and at we're are DC a No. recovering, has been Houston. pretty forward They mean I about push worried still

Rob Stevenson

Okay, thanks guys.

Operator

further have remarks. to the our we any It floor presenters questions. for no closing return appears I'll

Eric Bolton

you to obviously, free to And Okay. joining this out feel us time. Well, thanks, morning. everyone, if Thank us any questions, have for you. reach any follow-up

Operator

program. Thanks participation. today's This your for will conclude

day. You have great and disconnect may now a

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