AVB - Earnings call transcript Q4 2019 | AvalonBay Communities, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen and welcome to the AvalonBay Communities Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] Today’s conference is being recorded.

Your host for today’s conference call is Mr. Jason Reilley, Vice President of Investor Relations. Mr. your begin may you conference. Reilley,

Jason Reilley

and Thank quarter AvalonBay fourth to earnings you, conference Nadia XXXX call. Communities welcome

filed Before and we these as risks the begin, during please is press actual note that forward-looking release materially. differ uncertainties Form There with statements Form with There a company’s in results associated afternoon’s may this discussion the statements in are variety and SEC. uncertainties well of of XX-Q as and a forward-looking XX-K and risks discussion. maybe made yesterday

press usual, of refer with website used our is As this to operating terms, measures include definitions attachment and release the on to financial and results maybe this does and at information during an www.avalonbay.com/earnings reconciliations performance. in which our financial The available attachment today’s and discussion. of review we non-GAAP also you other encourage

turn I CEO over And of will Communities Tim and for AvalonBay with the his remarks. Naughton, Chairman call that, to

Tim Naughton

me quarter be Jason you, Kevin and thank posted With will comments Birenbaum. will Matt Breslin and Q&A then Well, Kevin on our I Sean, afterwards. that and of provide all welcome fourth O’Shea, last slides for we and some us Sean call. today available the to night are

comments full Our QX for outlook on a summary discussion our and a year of focus will providing the of and results XXXX.

sales, $XXX provide new growth just growth at slides in revenue a million common external XXXX same-store or including on little asset The for core of in performance Starting X.X% billion $XXX X.X% year lastly, at when a Same-store X.X% QX X.X% on for next debt of for raised for revenue average context Slide Full you X, more development and completed growth will cost We we in and include year yield full year. quarter of an came net and X.X%. $X.X the of And year quarter outlook. for redemptions redevelopment. mix capital initial provide X.X% the detail the year. equity QX redevelopment. in at million of started new FFO in and few in of under highlights include XXXX for the at X.X% our $XXX year the the last and X.X% million a and came

Turning experienced West for surpassed led conditions year, first the during West to Slide the by the some saw X in softening we area, QX, by the East X, Metro basis in XXX years. time rent over in we points D.C. outpaced California. the Boston while In the growth first East Coast Coast the and

now and, value to to expansion. the Turning in to growth a contributor at remain $XXX be into million margins, XX% in of Slide XXXX. million very years X, healthy continued Development $XXX XX development completions big approximately created NAV incremental

Moving Slides made now markets. X we X new a roughly expansion can Southeast and, on in our progress X spread year, over broad from Florida $XXX good These acquisitions, and to portfolios partnering geography To-date, local within comprised and to through developers. development committed assets the with a each as the are are Slides across you Denver million see market markets. of of combination last and maps and X, the we’ve

grade with residential ranked by Reputation the taking #X fourth by were of Carbon the communities as strong our lastly, be nationally now the then we good Work with global Disclosure year; these recently Online Project, companies recognized recognized only to or in an time XXXX; And Science-Based including period business. our the front named carbon grade; a to been as of REITs A-, grades take among leadership as we emissions sustained practices can a Initiative, in our of in and communities AVB’s to results by such to Targets X, REITs organizations, industries addressing engaged environmental for Top carbon in believe AVB the We the having GRESB, customers satisfied targeted ESG and receive X scores the associates, emissions who international a second reviewed Glassdoor’s Places have with of customers U.S. support of we Slide job XXXX. on to AVB financial efforts consecutive on of the many sector; been we in their be apartment a to by our while Best to consecutive And approach for the starting our X submittal and leader company in and a year CDP, where active engagement role who by in by reduction awarded associates the and by for we who organization Turning disclosure past recognized and deliver approved multi-stakeholder the all always XXX and important great were for strive need a challenges. over the local that we’ve several over across apartment areas list social and better, doing company top year. decile, only

have for the real We lastly, globally by year corporate out ranked are who consecutive top Magazine, of second a X of companies. and the in X XXX completed citizens AVB companies of this of over process; X,XXX XX X globally universe CR that estate REITs and

calendar XXXX. growth it for on strong and now we back the for XXXX, since turned made NAV decade that capital the the have and healthy conditions, market by to in sense apartment Buoyed seen Turning Slide we XX, AvalonBay. last look great decade. it’s to short, earnings In performance and to over fundamentals a demand attractive and sector thought our has now cycle been

external same-store growth X% For growth sector. and basis revenue level and prevailing over capital growth, delivered AVB, basis growth, XXX since marginal XXX XX% points as core the by averaged growth consistently annual new fueled or absolute development basis on points can rates. Slide from been to contributions cap both above the by we roughly FFO XX, well strong compounded internal yields has initial development a as XXXX above averaged and at be has mainly seen The new about of cost has strong on above of

As development see $X you initial in the $XX XXXX just slide, have deliveries can since billion than of right creation over roughly side or hand more of the on per share. $X billion generated value

just million than NOI XXXX in NOI development, expected to mainly stabilized XX, to which now of this our core new growth are outlook and year we XXXX. Slide Turning of from X% from growth a for same-store in is FFO combination X% projecting over of $XX generate more on

growth will one-third offset income from as and driven provide remaining the a overhead expected is external XXX of XXXX benefit that raised JV basis loss NOI of of on JV loss from points Slide X.X%, is overhead deliveries from core basis this growth and about down. and well as higher that innovation stabilized be part from in of JV late funds to fund headwind is total in investment fee double-clicking higher points a the and net biggest of overhead of in growth about on by growth and The This one-third future from actually costs these basis about XXXX roughly with income of XXX is points in income, XXXX. the a drag this or as overhead X.X% The contribute wind will than projected and is capital Turning some level of roughly from capital base and to bit. year. coming that cost we fund in FFO other XXX by our is X.X%. net growth, portfolio coming levels of to XXXX. we a represents XX expected growth FFO to a expense External business of generate XXXX. of new lower expected driver XXX loss or which stronger basis to to At And core vehicles contribute one-third investment the for in bps last ROI, of growth normal

economic trade and added household XXXX accommodative sluggish more as formation. to provide the war. expected as and investment the business in potential simply provides of to XXXX, business constraint fiscal part provide slide healthy key our provide sector in The of I offset markets, versus tight XXXX a consumer strength concern bolstering is support economy lastly, of job government a Fed should with to should bolster And growth tailwind much should factors driving from summary balance and but confidence, is Turning the consumption the sheets, go while GDP labor XX, won’t to here the a crosswinds say surrounding XXXX economic expected Slide an be outlook. growth. rising by lack healthy the everything less moderate should through this of the sector wages, in

up for the shaping a as sector it’s to support year good backdrop housing ahead. the overall, and macro the So economy

will to more I turn for on Sean now it who will over our outlook portfolio. the color provide

Sean Breslin

thanks, Tim. Okay,

XX, growth the markets. Turning income both for total this and for XXXX Slide and components chart the of personal projected represents XXXX to our actual U.S.

the in they however, demand low wage in decelerating job force. the outlook forecast due healthy which growth consensus even throughout noted, growth and the growth business. in to supports Tim As is labor the constraining XXXX our for for X% are factors given reasonably Consumers, confident growth feeling structural XXXX continued for experienced in part wage stronger XXXX,

offset supply new footprint for Jersey, York and with is Northern be Boston, Mid-Atlantic, what in during New and Pacific across projected Northern XX, our consistent markets the Northwest being urban XXXX to market in Turning we Angeles, increases with Slide the in to experienced City. New California reductions by Los

XXXX. the Turning should be of revenue of for strongest to to growth a the number basis, year same-store is be year. to due we relatively quarter factors in quarterly XX, first X.X% revenue a projected Slide stable the unique of balance the but throughout growth of expect On

pace a the Mid-Atlantic growth in material New modest continued however, Coast, to X% performance to continue adopted combined Relatively the produce rate in the decline of we Boston the expectations of regions, a healthy that’s will submarkets. X.Xx with by than the consensus mid-XXXX. Results supported continue East York Metro XXXX, national Jersey, the impact XXXX. York reflected of average be the revenue both our in we West Shifting On in exceeded rent pace growth by the demand, job Job region. greater to performance deliveries should regulations strong new and Northwest. deliveries, in in expect expect the in New and reduction improvement in a down and in Coast, New X% Pacific new weighed the in roughly growth in

In XXXX in to from X.X% to growth X% is projected in expect XXXX. roughly we Northern decelerate California, job regions. performance in decelerating Turning both California, to

and about X,XXX from of In by roughly East in units increase units and projected addition, in on Southern to California, Jose to the new between each in supply weighing is XX X.X% the projected XXXX XXXX. job In San to Bay, in performance and X,XXX points is fall basis throughout XXX year. Francisco growth San

On rent rental in to points. a mid-XXXX LA the were year is Assembly deliveries are revenue our side, a flat York new compared perspective, regulations X and County as are XX year-over-year XXXX and estimated X,XXX XXXX rent and of implementation New Bill from by headwind XXXX. projected impact in Orange broader between deliveries we The of Diego, rate regulations basis in during adopted roughly And continue on supply XX units these to while be to growth California. increase from expect be San that expected full relatively to to

expense Slide our increases offset The and our to in the and our in payroll by operating associates. non-controllable costs. in related reduction various leasing driven expense outlook for reflects experience to with a innovation customers growth XXXX, is Turning partially controllable sub-X% by efforts, those payroll particularly reduction expense categories in same-store XX, re-imagining

agent of automated last a demand-driven As redesigned use I and purposes includes staffing elements quarter, mentioned for lead the model. experience more management dynamic of an AI-powered,

to move-in Additional benefit underway elements process. projected and include express XXXX a are tours in and an that yield self-guided more

at in and later year. XXXX our onsite growth our reduction expenses, XX% total Of sales management this approximately insurance. year to increase to reduced X.X% XX% stabilize by end relative XX% taxes operating to to roughly baseline we roughly staffing XXXX, our staff in expect property and same-store have in is and Through related

text along certain in of noted expect timing expense and operating various the Slide expense Given in XX. the we markets, box various the be in front-weighted XXXX supplemental to timing growth tax of appeals items on categories, as in assessments with

And markets outlook I’ll about with balance for portfolio, the to Kevin development that activity it and turn summary of sheet. to over and our the our talk

Kevin O'Shea

Thanks, Sean.

activity $X.X averaged of middle the since development per starts billion to per new the year. set when market. shift $XXX XX, to needing on opportunity for driven the limit last This amount by Slide to to a leverage-neutral decade was desire about year, to Turning a starts by and access reduced we’ve million a both we without development fund an development could attractive basis reduced equity

on expect creation only XXXX, For to development generate we we portfolio of completions. projects the value compelling in but improve about line start quality not new that million expect also recent in will with our $XXX

Slide higher has our Sean shareholders. returns XX, outlined, continue just operating will initiatives innovate allow across customer to platform, to better as investing that generating while we to our for us in Turning serve our

For the costs expense is increase half in initiatives for for investment XXXX, roughly our expected these in items. account non-core to overhead adjusted

private lot is split types at number a our at we remaining third-party are a market development of land timing of generally The rights of efforts construction. are billion existing projects as density where allow we conditional development land a with modest agreements conventional between are XX, future align show to the to long-term These stabilized it span favorable purchase our the are construction start more partnerships, and to About start sellers. assets of half conditions. Slide relates densification $X.X the flexibility years. public-private cost which opportunities, pipeline of with options of additional offer that and half to very or of controlled development flexibility asset Turning of pursuing opportunities which

$XX this that our projected less an noting of enjoy us our to of to the opportunities At This investment costs. over been fourth an cost. for pipeline, all-time at a total set that additional addition, we careful limit attractive so In development held it’s the X% and for million. was exposure low, across X, development markets costs creating development an financial an upfront modest control land of allows billion of pursuit $X represented end worth in of we’ve than upfront capital future quarter,

we costs. Turning discussed allows exposure development in to to changes which XX, development match-funding under with risk development future reduce profit as to is in mitigate Slide and from in substantially way us This capital. capital another before, have way by lock we development long-term

approximately can of XX% you development fourth As on this see the at were against slide, quarter match-funded of end XXXX. we the underway

the credit multifamily sector metrics Slide and our these On of XX, average. we compare show several key REIT to

relative in see, terms, strong As superior financial our you remain can credit metrics reflecting our both absolute flexibility. and

debt years core at remained X.Xx, maturity and Specifically, X was EBITDA at to at debt NOI about total unencumbered – high net year-end, to our low was XX%, high the outstanding at average debt weighted years. of

with that, to Tim. turn it I’ll And back

Tim Naughton

Kevin. Alright, Thanks, great.

markets a and completed progress apartment So played our the as and summary, Slide NOI apartment In on in we presence good to less the sector. just accretive year XXXX, We of more million XXXX X% we expansion growing delivered economy growth, out our remain in XX, expected, expect $XXX or good markets. made plus for we healthy. development, in

a stronger business, to to capital mentioned, plan expecting with what in we’re lastly, Kevin same-store deliveries recognizing XXXX that are to X%. current formation of continue XX higher costs. experienced NOI growth way be as we External we years to growth and will and of risk-measured due into And the capital expansion. operate than the we lower AVB, respect levels For in deployment,

the up open Nadia, will that, call with And we for questions.

Operator

Instructions] Citi. [Operator We Please Nick go go first from will to you. Thank ahead. Joseph

Nick Joseph

total future and realize talked much in to Thanks. XXXX what of efforts, terms will you the then be how you Sean, estimate in years? either margin about NOI versus you or do innovation the opportunity

Sean Breslin

you about of comments of well. opportunities sort provided I’d we slides, call two and we several process about point one, maintenance quarter, it through and good and further in back the primary each to talked probably went XX the points journeys, to the then happy for Nick, activities: last the and – we a leasing margins What is efficiency side roughly talk leasing Yes, about in sort bucket on house, we the point question. improvement basis basis of related what that move-in to on XX combined; as another of

terms what it this started would to In we are We XXXX, late see XXXX. in of this way. describe going in I back

later sort our be XXXX the is activities year. associated bleeding with maintenance is range which through really be $X we rate end million this, what’s then this side As leasing XXXX, of by move paying XXXX, the will run off, we’ll And of the which in of the of $X in in million. somewhere to

So see you subsequent years. much bleed subsequent in will also years. really additional are components of won’t side there of And in, leasing that as the that until benefit

it So flowing the through to as you it to moves years aggregate X ‘XX. impact as will relates $X But ‘XX, more of and $X sort roughly benefit. of into million million ‘XX represents see activity that’s

Nick Joseph

had And a redevelopment. then revenue peers on benefit in just growth, guidance. their That’s include from helpful. I lot XX your same-store that same-store you of XXXX, in And points then know basis

do to for activity? what be So expect benefit from redevelopment XXXX, that you

Sean Breslin

it be and Yes. On XX. we on rental to revenue, basis about XX expect points, NOI, about

Nick Joseph

Right, you. thank

Sean Breslin

Yes.

Operator

will Rich Hightower We go Evercore. from Please with go next ahead.

Rich Hightower

new we or anything, you’re to maybe given Good high at And about the the landscape for would same-store end as broker York? the just get the add-on at rules New if with fee guys. for just what talk York, – to an market-by-market of what revenue. afternoon, in of respect year baking just as range portfolio that I it your you chart am maybe take can you that, mean, the sort regs? in to what this look to New the looking rent X% And what number

Sean Breslin

as is the issue fundamental through year. just the mean we I rent Sean. better move it’s change Rich, Yes. overall

versus York/New like-term basis in lease Metro XX, look down coming of sort you around XXXX XXXX rent region points. New in the is anticipating change If Jersey what at we’re XX

So move on happens markets needle. market with us suburban to what for and is conditions the going depending various particularly the what’s

things are there. how macro Those on the to are see what a – environment job fees The benefit loss fees manifest are there. reflect to we But things assumptions growth, will with themselves by bleed if trying depending continue known. of imposed economic So the are through. the are might for we that constraints stronger, the

up. and portfolio would really, it’s side the more demand that the numbers push on through suburban rental most rate those So for the pushing part

Rich Hightower

on insights new rules? Any fee Okay. broker the

Sean Breslin

the on material then that’s And for Yes. not broker really sorry, – that’s us. fees,

brokers we quite time. some there, really paid haven’t portfolio in Our

We a JV assets few, paid the to them on to have those of residents. have we have pushing handful that opposed a paid fees but back as the

So total reporting standpoint, us. for difference no from see basically what you immaterial. from it’s a It’s

Rich Hightower

that kind Okay. breakdown do sources respect for wanted of of perspective the guidance most is a And sales where which are just or $X.X that and now capital which with you you markets, the I debt? year of that’s favorable thought you Yes, capital bucket, confirm just cost how right and understand question of other disclose, Kevin, – whether just guess the can that. asset maybe between guys sales, to I sort help what equity about to Just from or billion maybe then for us capital condo outside it? other think

Kevin O'Shea

Sure, Rich. This is Kevin.

X.X we bring a the net flat turns at sourcing to you of we point so in we at of first that end in of thing as billion the $X.X terms so debt a So in from are basis mix in XXXX. of expect roughly about EBITDA anticipate we out And to leverage-neutral XXXX, do where is things, roughly how capital. guess to to external the the relative to I capital just few release, saw

and at asset know, unsecured equity markets you market is markets, we intend there markets. three the look sale As the debt to

condo that the Here, we have mix. happening are do sales in

$X.X it year. have model debt, plan earnings and condo you capital our be and of not owned we detail. in just unsecured Our it do don’t about sales from debt, mostly combination this billion, we condo to out, can down wholly break we dispositions bear we $XXX typically equity in million see a tend in It’s expect for just sales, when But plan. release, you in mind in which the leverage-neutral,

Rich Hightower

Got it. Thank you.

Operator

Hill next Richard will ahead. Stanley. go Morgan We with Please from go

Lauren Weston

seen This guidance, help guys. your Appreciate Richard Hi, on is guidance in us the you expense Weston just if Lauren comments Hill. we’ve lowest is understand, this recent could on history. for

to sequentially. the sort or is run we So rate I a XXXX. really But sense is coming get XXXX? Obviously, more particular new some just down just want give on what this forward to on expect payrolls if beyond us focus can should you color going of the

Sean Breslin

than And but beyond what you X/X precise I in big the This that, our would at pace the is what on acceleration taxes mean inflation, XXXX above But at is significant same property bit are you of to answers values sort more best. the that’s guidance run-up speculative beyond, seen is at you say are this think giving XXXX of about, we’ve well categories kind cycle. terms I about Sean. a a Providing of expense growing really of in think look if is based think I in without structure. that for and expense values that little don’t have to

are in XXX-a pilot bleeding very you start that us. see other portfolio off we in that really assets level high to then And assets a rate. a at large addition, So or have of don’t should for

So taxes. in property that will expense help contain growth the overall

piece other The big is payroll.

really And years. below those of levels wage try we what’s sustainable run mid-X% the to know the payroll, things happening can as – at inflationary of is part. in at things X.X is with as low that. our the for is expect grow kind best and of would continue to not which inflationary put to we for really to of range. the wage you that we innovation expect the sort a innovate You But through, kind in next other to Minus contain most sort is like growth levels over of based one then R&M but other on growth rate something few the some job

think one. So and of each pieces big I’d the kind are way those about the

Lauren Weston

helpful. that’s follow-up can. a then if And I Okay,

bit footnote add supplement, color there a other little Just Pacific a success process the the Northwest, in appeal any I spike there? there. the saw the in but on of and a you can

Sean Breslin

Yes. period. in quarter the in fourth the Pacific by in expenses Northwest driven successful and appeals That change was actually prior

benefited may a the rates you which But Greater put also counties know, last operate think benefit appeals in As had rate reduction I from throughout ‘XX. which of various the Seattle, us in in early region. were the the fourth of of XXXX, within growth quarter year, we Northwest all we of across that realized Pacific upward pressure on QX

Lauren Weston

Thanks.

Sean Breslin

Thank you.

Operator

Please We’ll Alua Instructions] with go America. next ahead. Askarbek from [Operator of Bank go

Alua Askarbek

Hi, guys. Thank taking the you call. for

a just next weaken. Seattle we terms So in year? Can impact when to supply pass little extra there It down color get about bit it further. of continued expect supply of any Seattle’s bulk you that with and the appears the coming to

Sean Breslin

Yes.

coming As the one-time to Seattle, down commentary there growth of our rate things is unusual our depressed on quarter just X.X%. it relates that in to bit some sort of fourth performance through a there the in quarter,

range onetime a to Our well me, rental years Pacific XX and strongest a is growth the – think across now of about that come of as rate, is mid in of X%, and of And up probably rental in say revenue in about prior be actual quite X.X%. the sort that things December rent points. base as January Northwest performance and portfolio in kind in change cancellation the right Seattle other would almost received was didn’t payments popping year, a revenue as we in back change. prior share revenue in the terms excuse our rent for fees lost basis January. residential relates January overall so. in X.X% of we I revenue should came thing the category, mid the in was of through healthy. number onetime But X%, the just through about component, result in terms or growth that we It’s

it a So fourth healthy market We very performance year. expect still from I into wouldn’t the this quarter be XXXX. to extrapolate

Alua Askarbek

supply it. bit for of little And Got you rest thinking of year? What when the And just a are the on supply. or peak it then pass? most do about you the think the will

Sean Breslin

Seattle specifically? In terms of

Alua Askarbek

Yes.

Sean Breslin

expecting for specifically, little pretty a in X,XXX materially the not on of But are Seattle, or quarter pace the deliveries most is evenly in part, we bit There is X,XXX basis spread. different come It’s The so. it’s year. more quarter-by-quarter XXXX. it terms deliveries in a to throughout units to of a pace QX. of down the

Alua Askarbek

Okay, Thank great. you.

Operator

go We Kim Markets. John BMO ahead. will Capital from next with Please go

John Kim

comment are markets? legacy yields development you on and Florida you Can seeing as Denver your Southeast in versus far what as

Matt Birenbaum

on I can little John. Sure, This is Matt. comment that a bit.

length The first it’s we because same time thing for have and an markets orange apple same of and been of of those an I’d say, experience. the a bit obviously the little not in kind depth of

little we that establish in bit time, the will yields first and hopefully lower as even stronger going position we’ll there, anyway, be that we our post at expect us, to do be a returns. So for able over

developers So with there. partnering in really other we’re Florida,

are risk yield not or to us taking So the is because we the entitlement risk. the thinner construction

just risk deals. those really the lease-up on We’re taking

in sponsor X yields is deals In cost given kind types a a there for last that in deal Denver, the market RiNo. value high low getting hard X was of think pressure. development a just where pretty it that a there’s a of that’s taking predictable That started Denver those that’s And of kind terms ground-up City significant at what looking that’s if so on spread, who’s is yield. of of our we in and with is of seen deal amount probably Denver, first permits. right a we’re us and So in lot process you our not just quarter will. I partner a of now And a the the Bi-Rite we’re seeing

the that both Xs those high probably in that certain to Xs high in maybe be over time markets kind Xs. So of of I imagine would but low even likely would mid cases, more

John Kim

you markets? in bring mass critical do when management think into get in-house those enough to And you’d

Matt Birenbaum

management us. Florida, brought looking an late we kind Denver, do we of in-house that that last advantage be will actually time, management for We have that we’re think over now. And in-house. year. And brought at

in So that’s I plan this think year. for the later

John Kim

you follow – And the you maybe direct York? to to higher wondering New but that just a impacts will this then realize rents and market if I’m not what you, up New the Okay. this lead view you – on to banning the broker to impact and York think if about fees, how announcement I subscribe in

Sean Breslin

it’s there. has say, This is Hard Sean, Yes. cost really kind been to John. just of the

how question – does not? don’t. There do, to think that and whether is, in brokers and lot the lot of or it landlord the are way of that are a affect people I behavior it’s people continue there encourage of same they sort a

think costs the So terms it’s behavioral of to unit things. mean going how question if is kind in the the this to occupy. or impact is a I demand The of to fundamental is at it’s I transaction point who’s paying demand find there one.

going So in – of hard where that’s terms out. come it’s to hard too tell to

John Kim

share? of that a better in position peers? your there some you a are about chance Is market What than

Sean Breslin

know don’t about I that.

long probably to other around efforts of REIT I sources short the marketing digital in we of the regulatory dynamics think the well the of penetration and are peers more In there certainly, positioned us correct market and terms environment. demand in sophisticated run. have and the our other systems will reflect run,

can with be On should say price yes. scale, digital push I’d margin long the more may but par, at average, through it more efforts. benefit some, the marketing run, they So in those

John Kim

you. Thank

Operator

go go ahead. We Guinee John with will Stifel. next Please from

John Guinee

are I you’ve guidance, Great. the good. the completions X Very the Gentlemen, you. about over think over guides pretty XX,XXX a nice guys. average seen I years, years, and X seen looking quarter at stats, And last quarter. more a with if starts you’ve recent a only or was and you guys XXX,XXX CBRE thank last sense seems make kind quarter. basic bounced over that you XXX about medium-term of into a guys factored Does It deliveries thinking? numbers, just your that to up before of those and it’s time matter those

Tim Naughton

It’s Tim here.

more the in – our to not mid-Xs – XXX, running have just starting that. been actually and little numbers inch mean Nationally, that’s pretty think, In terms are, markets, of starts closer bit a I to are flat. if I more than have been up to our

our sync So the use starts. the running think so something I numbers it’s track like flat over the or it’s pretty to last it’s as up – least XX,XXX the same that. years. your been And numbers in in at don’t national quite But markets, X been we

John Guinee

you. Thank Great.

Operator

We will next go go Please with from Nick Yulico ahead. Scotiabank.

Nick Yulico

Thanks.

starts, the focused on this and type also expect terms year feeling starts In just a new that product hoping you’re preview for so the and on maybe on? the you to development markets yield the a of of get

Matt Birenbaum

Matt. It’s Nick. Sure,

tend of to to are lot starts somewhere X.X, this will out. those a Island a driven yield, of that in start this New District each it markets. kind range. looking for development in we kind really in There’s markets to Jersey. yield little that’s of are in We then low higher that X.X, how Both based Arts start one the a it’s in can Denver – hope obviously, Florida. downtown, Our one bit probably change the we a big be or and that and yield Long L.A. deal deal to mid-Xs have higher in of mix basket by year, or on one And the probably But year deals shakes do Northern X.X year, two business. deals two

So of but some average, in higher-yield nice markets. it’s more on those mix, a

Nick Yulico

to the much still proceeds of is? left year? this how Can project it that’s about get gross Is helpful. XX%? million. us then a that feel had back after feel for this a of to what $XXX come Okay, trying question you the million are $XXX I And as the condo a year just capital Just proceeds give sales, to to percentage for XX%

Matt Birenbaum

speak Matt. to This Sure. Again, is can that. I

So just that proceeds. closed where million in about we now in $XX have of stand X right that we as actually represented closed, units January, have gross that today,

close deposits before have actually, of end those additional QX XX up XX, represent the March. another million. about executed in $XXX and XX to contracts We with we February And that expect of

months. most additional which have we accepted, not of in yet actually the they next are proceeds couple those of seven contract. in, And should So, come in offers, but then we’ve

actually those closed, it that contract XX of terms what’s in But amount million. would in good is for. or $XXX a of So be at spoken

building first. of Now on units rata the based to not a share selling and that happen pro is which settling be

as some sell not where you more the than sense are it good because there a a that but we percentage take little pro of at What’s of are. in just unit of number, count. a rata is to top that is you building So can’t the left probably that high-value that units gives the

Nick Yulico

just around the said guess guys you somewhere think I yes. million in have I Okay, wondering, I past, a unit. $X was

million that to would the XXXX. you gross that total about condos, Is say, to it? get from of this half year the around, So which that and way half think right means proceeds in of that get $XXX of right

Matt Birenbaum

mean faster market we like know pace market we’ll said, where kind we’ll fair of a or – from the slower. I that we goes But could better here. I see where already or Yes. the have Sales that amount see of for. be spoken

Nick Yulico

Okay, thanks.

Operator

ahead. go next go Baird. from will Drew with We Babin Please

Alexander Kubicek

Drew. Good is afternoon. on maybe you on for guys could the and leasing just hoping Alex you in color January terms of California, kind to provide We This were the speak Northern if And seeing. in kind if a could was employment in it of dynamics another there deceleration half like you the ‘XX. referenced significant deceleration of you’re effective in pretty looked significant I second like-term growth. rent know guys

of be market what So helpful? January in just that would saw on color you kind any and

Sean Breslin

is overall, come this Alex, one this of to in expect Yes. things more couple California A is year. we supply say, Northern I’d Sean.

of terms the As in definitely I into play quarter. some increase my XX% it’s three the a noted there and deliveries, of across is overall, first markets that in prepared in about remarks, coming

the things given of other did, and of in we’re Francisco about that seeing just build we’re couple So a to occupancy a we one thinking San what than see in night. last in that otherwise in fourth might rent on done And the have change we quarter, quarter. particularly the reported more we reflected that the bit you try how we markets late did is fourth little

was – of when kind change lowest one terms rent where XX It weak. Northern is And about for January. the points So basis blended over into change the that so. regions in carried of rent or It January time. up California they’re asking of rents last are of regions terms point of at the you today, the is of where look at year, in rents which relative it in about lowest this to X.X%, is

some it right with of balance out coming throughout it’s So how expectations for see choppy a our and little new We’ll deceleration in the now continued plays employment growth. deliveries in are performance. the XX point in what in to across of an XXXX. produced we expecting rent the reduction in about like-term actually terms overall year basis relative But region change we

Alexander Kubicek

to me, That’s next related question all? for the the into Is kind component? development? door? of Is went mall kind at partner or you retail of then opportunity mixed more with can underwriting the really your Just helpful. paired speak a curious Mall and more And there a if use retailer of there component kind there’s what kind to Alderwood one of

Matt Birenbaum

the mall. GGP, of Matt. Sure. that own. it floor site own the that joint that part who own, with the we is will building is mall. that will and This at of Brookfield retail Sears not densification retail Absolutely. actually is Brookfield deal former be box, It’s former venture on a the the the Well, ground will There the of partners, so play

line for us. exposure we necessarily that retail. we think any do this is the business So have don’t But to of a growing

That’s some and to – number where we hope excited other center own start that. partnership regional actually mall, asset with a suburban This to which locations. we also deals, forward, actually a will a a model it’s together pretty we about the EDENS. We other starts our in planned going venture it It’s second first long-term was quarter joint of lifestyle the Boston. one – we’ve earn not with be with of be in associated Woburn done and that EDENS. one will would did is fees this a deal We’re the of replicate the

was next or which hopefully, old of in years X well first to is Mosaic New years old. the The a Virginia, third years couple in coming And we deal, X actually X Central in Northern Jersey. be have here now, as

the where these at frankly, It’s, all more a that’s cross as the lot than in little had thought, to the trend with multiple this. So a maybe we this sometimes have at encumbered we growing. on a at originally do are been sites get mall anchors of sites including there’s easements, and that see difficult parties table, say of particularly some mall it

good we are progress. So but – making

as bring we are will important And deals advantage that as a land these partner, We the balance who’s It’s the hopefully because not similar. to seller, have be typically the it’s our for matter other do of think and marketed value. execution to as just plays something sheet, to the the the table in broadly things all that strengths competitive certainty of raw execution, much our the sites. the just pipeline quality the other the us we land

Alexander Kubicek

Thanks the really taking That’s for questions. helpful.

Operator

next We go with Goldman Please Richard go ahead. will from Skidmore Sachs.

Richard Skidmore

Good afternoon.

as stay change XX, on up kind or – down? question development, in view at might X range, future you you next you do what of X go years, to Slide to a your Just do look that over that slide and the either

Tim Naughton

a $X plus in support roughly think billion Yes, could we so about hundred a minus million. year Tim that or here. Of couple the $X billion, starts,

recently up $XXX cannot quickly X years. As Kevin range, of his you in reality deals. gestation to more because million mentioned bring these start have $XXX year. X period we or million that on expect It The remarks, been around the just in often is this too the is

years – the So set from the cycle as really is just mentioned, be starting ago. it was reality have Matt increase mixed-use X into years starts the other opportunity than it to the now, we’d the effect. X is materially compelling not us today or maybe in years would to for that take opportunity XX And – X as

Richard Skidmore

follow-up you rights that more go how York/New How it. forward, York/New of think XX% And the that a looks maybe as like Metro bit then things. rights, you be the bit is you Jersey, given in York/New area. of it we should development about future New are about Jersey about just the on thinking focus And terms the will in are Got little New focused about – New talk regulations a development how a other future Jersey? the and

Matt Birenbaum

No, Richard, Matt. necessarily. is not this

much start in Metro of last likely think the to in don’t think at Metro the that York actually start look average as New years is of the where I over I ‘XX representative over then of you If where more starts of XX% what X of been a years, our share probably our couple XX% our of rights has that disproportionate in It XX% maybe – year. last anything volume. and is you development started couple be pipeline. of is as have mix is been It it it But was years, year. starts XX%, next our this our York if New starts we is

lot fruition or to that New Some have to entitlement may of cycle on see where about are have we are to is this deals long-gestating make some all that markets may plays, Jersey a those particular going through deals example. of it some if not there necessarily them is and of don’t it very some a come not because Long whole we in invest through, make or in in then calls. Island, talked for that to prior large may there of couple And they

with needle, sense, high-rise large past you of of did a a they you kind there couple deals billion, are very in that really if will, $X that there So in do move New is that rough York.

Richard Skidmore

Thank you.

Operator

Thank you.

go will We Derek with Bank. ahead. go Deutsche next Please Johnston from

Derek Johnston

To actually I pointing AVB’s are wanted views towards how see experienced area growth is to your there? in metrics has the as revenue expected year. And yet see we submarket supply growth begin, this some team rental solid Metro decelerating rent well. exposure and to Boston XXXX, taper some

Sean Breslin

part first the question hear restating the didn’t we Derek, mind of Would the please? question. you Yes, clearly,

Tim Naughton

You through coming faintly. are very

Derek Johnston

rental of your what there and growth of We I some there? exposure team pointing see I’m submarket sorry. towards was Metro AVB’s growth. is taper and revenue the Oh, kind solid XXXX, metrics supposed views rent in at seeing to some looking the supply’s actually and decelerating Boston are area.

Sean Breslin

it. got Yes. No, Yes.

to expecting are as So remarks, Boston. prepared my I we in deliveries urban increase mentioned in the

into is at at submarkets X,XXX, overall, supply units sort additional and an is Bay the stable. suburban I of if look downtown you sort adjoining Back of that look think submarket. X,XXX If it you coming But submarkets, relatively

will primarily And is produced So that why benefit. in in see of revenue XXXX. which to continue think our growth rental we is we compared to suburban, some as XXXX we portfolio, acceleration what

Derek Johnston

over tax the are looking items for at there non-controllable XXXX. for items, then setup And expense upcoming the similar But forecast this Awesome. any we full quite notable to looks year should really year? that look

Sean Breslin

don’t notable there I se. is per anything Notable, think

non-controllable that represents the expecting there terms anticipated had in XX% components, some that, XXXX. in fourth may In of were we to we New were England benefits in about book. assessments increase And obviously, taxes, of the increases because not are that rates there our growth. be projected sub-X% OpEx There and quarter substantial in

or work to through and way some expect we appeals the us So XXXX. their XXXX in potentially benefit system

is a noise to out, more So around response things bit of to be assessments the going in a And year we earlier quarter-to-quarter, mentioned to in, growth sort. going of are rate. supplemental taxes, the think from see – relatively in are that as be or timing you I should terms of stable question, year or little the appeals

where too year. that tell And going is come so to this it just for to early is out

Derek Johnston

Thank you. Got it.

Operator

Thank you.

go Green from Pawlowski We will next Please John with ahead. go Street Advisors.

John Pawlowski

is the and was as unfolded, the Sean, demand San know trends hoping a comments one passed, faring concession Francisco comments and ground January on supply. of way in I we’re quarter that as I you there’s fourth that’s other? your on seeing how now, could any the elaborate easing? Are in XXXX anything on lot choppiness suggests around more Just you the or

Sean Breslin

tell. Yes, little to John, early probably say it’s a too I’d

that change. posture shift market. there’s sort particular, you softness Not in sort pull move-ins When that. marketing late that question others there. I ourselves, in more November, a call necessarily think a December, January if Whether is a ourselves rent we’re and the was reduction much just get The in rent how it some in slightly bled There the we demand. coming are them. we took to in and maybe just defensive online January seeing we want target a into of or couple of big of and anticipated not impacted to a there’s what concessions some concession, levers, more pull demand,

So it is it’s we sense quarter have the just little supply Probably early to call. think next is if a the too by better get my supply. sense I it’s time demand, versus purely more to but tell a

John Pawlowski

suburban anything Matt levels fundamentals the just New pretty And now I to to increases Tim, to and York New are the head New – and suburban decelerating Jersey wanted or naturally York. Jersey understood. Okay, the development I exposure to pipeline comments market right from then as your as restrained back markets? drift seeing Are and these already want exposure? today the going pare more that on bit the enthused will development ground for a disposition that X in there gets you backdrop to Are activity developments next demand about the you the you X that earn in? Or to years be to let exposure higher some

Matt Birenbaum

balanced. fundamentals continue to I we don’t changed. kind do Yes. that portfolio we on Matt. In is markets is the has it those particular, have done will try John about what sure our of and what view know is and make Hey our that

Metro X disposition the in look suburbs. until ‘XX, our There sometimes certainly that of activity we X, has of years, the in was all New more activity. the has in the been so been JV disposition area. last a And you – does that if And over lead get back late to lot York concentrated

the have We not in city. installed anything

we closed an So that – lot sold Connecticut that in January. of just a asset in

Jersey asset an in here close that may would in first quarter sell Central second quarter. have the We or late the in probably that we

footing that they are been total thinking So our have to way it. the investments investments at investments, couple about the of most is development they a some among the yield. start submarket. in their of of making you grow usually, high well tend pretty It market in actually look our footprint. we years among that IRR not have find kind as dynamic – at for the very been When those entire portfolio. is And best first out the Those we the on then they

obviously, long-term the have it not profile. same necessarily does growth So

And older of is so and particularly out, there. how dispositions, some balance the we that assets through that try is

Tim Naughton

happen add maybe two New Yes, development is York/New to everything one anytime respect the and mentioned of that I it Matt soon our likely deals, which moment. of to densification at earlier, public-private just of actually John. a in just With I up think a is on to is And – politics is just billion with caught agree Matt other the said. is in given Jersey, of play half on the that, rights it over sort is not site, little $X.X deal a to

particularly of it allocation too far area. mentioned, – to And is total of really the the seen, have acquisitions disposition been kind the the Metro as is – is in as to as what kind of kind Jersey in in Northeast the that two, one-third it really off into recycle markets, our about So $X of New back which Metro closer we the you not which about when other those Matt focus billion has remains, was in York/New well you as market. that expansion as development correct

John Pawlowski

Tim. Thanks, Okay.

Tim Naughton

Sure.

Operator

Thank you.

go Bank the will next Royal ahead. Canada. Golladay go with Wes from Please We of

Steven Brunner

Steve is Wes. for This guys. Hi

you capital years look environment, to development to rate? the forward. hurdle low-yield couple Just cost start at low question going years, of what a we pretty about for historical you years at are sort and a insights compared development and taking, the lower going of be cost of next or in for guess, looking stay your of of quick if your capital following I next would Are your hurdle pipeline rates

Matt Birenbaum

– this our that capital. It is a of – We have with Yes. have return Matt. matrix does target is we actually vary do cost

kind systematic system. in an our is there of adjustment So automatic

our of go vice As up, target versa. capital our up and returns goes cost

have look And as certainly investment of a cycle. entire is on reflection what today, returns it been target is that capital our you today. kind cost And they at new are our of probably so this of if in low as actually,

now Now XX not lower that, it simple, a basis or take acquisition. said the an development we’ll gosh, having on points is yield

We’re basis. also total looking at

the We’re looking are. risks what with kind also associated that of at

more seen So, a we simple that you our bear at look and formula some stores. have on it thinking when it’s but the some of definitely not recent does bit a

Steven Brunner

I got. all That’s Perfect.

Operator

you. Thank

We will SMBC. Rich next from ahead. with go Anderson Please go

Rich Anderson

Thanks. afternoon. me. Excuse Good

were was I’d that I last say stock at So one your out X.X% stuck was deliveries the for that’s time and this coming item for at supply this when or back your year looking you at X.X%, – And year. XXXX ended in year of me. and estimated guidance, your your estimate

doesn’t So appear to it last was the this a decline actual at slippage. X.X% at X.X% you’re year like the that seeing of function from time today

is meaningful So came there? decline the from, anything what explain if can you there

Sean Breslin

say is margin error the to adjusted of basically Yes, history terms schedules. Rich. on This is reflect XXXX Sean. our delivery in What numbers I’d of we

our we So this if it deliver if would when based a say, to on history. we what to haircut reflect estimate you gross plan probability-weighted given sort people is we plan on sort basis look of to a of and at it deliver it, basically what

So into closer to terms seeing what’s you’re would been what to in X.X%. factored X%. X.X% probably there that’s It really have of the

Rich Anderson

turn yes, or what happened? And just over to the Yes, right. of projects to year? the Or the X.X% those go do off – happened course what X.X%

Sean Breslin

bleed they period. the No, into subsequent

bleeding anticipated that deliveries XXXX behind deals a that be now into there they’ll total period. other So but would XXXX, subsequent in been have deliveries have been pushed the in that those into are reflected

Tim Naughton

Tim. This is

and common projects a just – it cycle the they delays. very hear more of And and XX about months in start by once kind shortage of this talking really cycles, the skilled being X about to than general. it. the of to I’m market a finish past I past, in by these it’s this not labor just issue. seen delayed, it’s And a is time we has think construction labor they experienced talking Avalon. haven’t in been I’m we’ve

an it’s an the for country, certainly industry. our think for I So issue issue but it’s

Rich Anderson

that It’s would I over would still year might – that trend understand. of the number of be Okay. down X.X% because I but slippage, the a course then the think higher

Tim Naughton

ago Yes. a Yes, than as today a less little year the maybe shortages were acute are they well.

Rich Anderson

Fair Okay. enough.

you equivalent number assumed that’s NOI you – to the on development million XXXX, in XXXX. a development or still in $XX what produced On guys, for fairly over XXXX so and

$XX on what should And a You XXXX go-forward this with you expect of like what guys larger as of but XXXX. produced And the a is also had development maybe downward FFO a amount aberration? you in we allocation the sort little just is basis for being the Is reason of that growth millionish, have why hiccup same-store a part because bit range, I an historically that’s that. of a company number a capital also than is at comes done level a of but line much function that online. of certain ask

greater at I get FFO it same-store just than growth? being when hate because I’m a or see So cadence trying to sense growth forward I of the going

Tim Naughton

Yes. Rich, here. Tim

$XXX about average million a – in range. $XXX his low recently we’ve stabilizing at mentioned we’ve X% to an remarks, As the been in million talking Kevin and year been

$XX I million, $XX million, $X So is you we year. gets were think forward billion towards than to going closer starting which math. That where a we kind low when XXs north just million, rather probably of it’s $XX were mid-cycle of

Rich Anderson

Okay. or you XX FFO, Last by nose of actual than the the the pretty terms it last XXX lighter year, same-store me, number, about nailed predicted on actually and what for the prediction, guidance much question your actually you this you again points. time in basis was produced result.

it development? internal sources? better – you do comes can potential you the year, this does it over still think course the from do think of it Or about come to or when from So

Kevin O'Shea

Kevin. is Rich, So this

FFO, year core In ended at terms last $X.XX. time and this we were so of our we $X.XX, guidance at for up

So we basis below. beat by $X.XX. We come XX in didn’t points

to So the else – – something those FFO. mean, you there’s on I but want clarification, that’s are the unless facts a core

Rich Anderson

but maybe much. guys, thanks very that, misheard Okay, alright I

Operator

KeyBanc ahead. from Wurschmidt Austin with Markets. go next Please Capital go will We

Austin Wurschmidt

today, highlighted afternoon. that as the you this definition, have you at above-average in sector the growth in the do versus size generate pipeline extent compound But above-average peers the you presentation, years? that in how of face same-store, generated the to lagging your coming and the versus cycle. Good development maybe peers FFO shrink Tim, on you growth annual depending FFO

Tim Naughton

good Yes a and question.

higher of level than that of years. alpha point where the all, first growth bit think, we’ve I of the couple X little external last less First a was to last the the have of X speaks the in for directly years, prior last – did than years had in we decade or X. years the that, we X And

on one. CapEx really you caution the right would issue distorting the is There’s of – numbers just On I same-store, a for now. that industry really

is a have So you everyone that revenue-enhancing year. or NOI-enhancing look that closely, at particularly to in CapEx particular spending really

I through cut outlier when that. not we’re to you’re big Particularly, going you big tell you it, find not can sort think that of a there. there’s a I outlier.

sort of there’s a you incumbents of when here, overlap. So X and – look I at overlap large the market of lot think the then

can of of a have lot from a what kind There’s similar – week exposure. not from ago. I all alpha tell We’re

raising basis points way, that has So the that a accretive generally through development, the activities, in external what is has capital virtually redevelopment. investment from most which deploying to we and extent, lesser believe come alphas all full – XXX and largely from come been

Austin Wurschmidt

higher today, are leverage you would risk be I with leverage the to your I funding pipeline? reduced shrinking appreciate willing given at mean I associated that. development you but know a below target operate and

Kevin O'Shea

Kevin general a X kind here. Yes, this to range of I is our mean basis. X are net is on for leverage debt-to-EBITDA – we turns

alluding end the We’re, quarter. at the X.Xx as mentioned fourth before I as to, you’re of and

be if to towards end being probably probably about it move our the the think I range view into a is we of low on is years X up. the where X cycle XX should to we targeting were

think But year, kind we X more leverage upper at of bound would throughout think are probably while the range. So the be I for given our of bit. where we think turns the less in contemplates also being X.Xx, that flexibility right the little financial I a increase low or leverage-neutral opportunities, capital I have to the plan

Austin Wurschmidt

just last what revenue-enhancing the drove just change what then having XXXX? on kind And for guidance? or me could of a bit of and future? are same-store And you stabilized that CapEx in decision it’s touching for additional definition related you impact one operations little redevelopment Tim, changes any on to contemplating you the your mentioned, but to revenue And quantify the the XXXX

Kevin O'Shea

doing of threshold start consistent occupancy just from Yes, may with Yes. XX%. Sean occupancy our the threshold what down chime same-store and threshold was there not really by want peers. Kevin. here, This And in to is used X XX% is so, did our in. adjusted I’ll to we X the

buckets to. conform practice that assets to is So part the prevailing into the by those of of the other from benefit and just rationale reduces And REIT practice more brings the doing the pool it virtue don’t of we redevelopment was within that, really other guidance same-store to apartment our where other size our give sector. stabilizing

to – so kind of assets a And overall same-store ambit as result, more of are the bought our our stabilized and of within going be guidance.

So it easier model a going should make forward. to us lot

Sean Breslin

the together guidance, Austin, the previously, our growth think in but basis represents of lift point collapsing about XXXX. for this buckets Yes. on I revenue a in XX mentioned I terms XXXX impact

Austin Wurschmidt

– And you’re enhancing or additional any on then redevelopment? the changes revenue anything planning on

Sean Breslin

– see have going I our you’re we we be us, about for a below up see average X-year home. to some X sort little of mean but I well I XX you CapEx you have bit revenue-enhancing drift peers. last to think give across a perspective, still mean invested what the

think peers, that kind than at look average you more X,XXX so is ‘XX compared closer ‘XX through to us. our to number of as X.Xx I If about on

on of of lift what XX% kind can you XX% gives And return a so that if kind you to put it into back you. it, see

redevelopment, to where development So pointed to think trying same-store, as and out, – we we first accretive. make are accretive good we to accretive really just capital decisions, value sure allocation that Tim not are then it’s to we are making

So that’s it. we about think how

think We’re in makes looking it assets for the opportunities do market where we to those sense. existing in that

Austin Wurschmidt

you. guys. Appreciate a lot Thank

Operator

ahead. & will next Goel from go We with Zelman go Hardik Please Associates.

Hardik Goel

to of thoughts taking guidance lot the you step a about been question. back your get know Hey just guys. but and I I questions for the have my in quarter, something. wanted Thank take a on

period. seems it XX might over last last at how, the in have I years I constraints included and cycle, because the that, past other you there’s the or a look markets I quite long-term have REITs Tim, a similar of of to data the about in are we long seems As know, downturn. general down guys the the if in the just D.C. now, underperform and growth apartment D.C. you’ve in over lot be and seems data missing function the of And show so, the rates, to talked in a of we’ve market? trade a decade over and of California from collected supply significantly. And D.C. like volatility it’s allocation in lack good the the with all But Northern term, wonder the

Tim Naughton

Yes.

was one seen reasons We have XXXXs. bad in true have multiple Boston in XXXXs. in good Boston by we this the markets, so to the why was be good try markets. it but way, decade, if you It the the ‘XXs. in was the not decade the had that in of It’s will. of too, other sort of Certainly, last great the in

We East to can’t decade. When this really where that it yet Amazon’s in secular supply. had to what’s had the a don’t expect be absorb particular kind level We You been the think Coast. think is of to of We and you knowledge to Seattle didn’t search D.C. is ultimately it landed, probably HQ respect run. constrained a than outperformed do on always have certainly a decade. what be predict It think, informative. some they center best change to with it D.C. was able supply ways, great expected we the a great happens there’s less past going to of

D.C. seeing more and You’re employment and New sort include to their more of base diversify tech York. companies

and into, markets college markets we’ve those the the indexed expansion over where down other And economy. in so markets a the over to talked of and that we’ve road gone couple kind about. markets, a some we And perhaps want to expansion of are be largely of and of allocated we’re couple

it really places or quickly really first like Seattle in a of York than and less, it income of but we driver side recognizing. sort tends demand a little on demand. ultimately of is D.C. ultimately catches So focus kind big and that does it’s California, job the more up in and sort New performance. more a up ultimate Supply, to with And bit of it catch growth that

bullish or investing we we were, on probably are X years ago marginal And terms of dollar. So than X say, more with today good in D.C. the if anything, we it are

Hardik Goel

helpful. That’s really me. for That’s it. Got all

Tim Naughton

Thank you.

Operator

will next Please Piper go ahead. from Instructions] [Operator Sandler. We Daniel with Santos go

Alex Goldfarb

afternoon. good Goldfarb Dan. Alex Okay, on actually It’s for

So two questions.

to it about the again growth development, and would year, until same-store Tim, a is can have part that? talk can developments industry it think this once or delivered so once it have new it stuff X% doesn’t contribute sort price is that First, ages faster develops of after it’s the you point the maybe would So as power. pricing that below same-store which standard, just guys and of pool, how are like meaning you

NOI with So can growth? maybe about the same-store how you just talk development interplays

Sean Breslin

number one Tim to But keep jump and a community. want stabilized as on Sean. may move then average in then bucket stabilizes, could A year, is today, and but scale actually I the I based well. a development the take in into the it of stab one, and deliveries If at Yes. comes sits it year Alex, same-store. our and the of say, in here this then it portfolio for would I not mean in given it’s materially, mind in can development size that needle, that moving other a is to Matt the thing occur a

turnover, actually to years the first same-store. So after from the they, or tend because communities typically And closer up pricing, come after those see they lease reflect XX the entire rents too, typically within to or opposed as X rents a it’s benefit is to stabilize to communities. half X which net perform concessions, effective community this whether trend we when months well the modest into they the

happen given same-store, us abnormally it of comes size into communities lift. moves these large. slug modest very it’s it very, a very hugely X the year the they deliveries. typically into tend today So and have there’s unless as large material portfolio give we it’s to when not well do to Therefore, a same-store, But where of

Alex Goldfarb

have Okay. talked you the then second some reducing And talking guys you for development. about question – is, been time

this have year. You your in numbers severance some that’s

And reduce becoming up that you your the have I sense were development, you P&L? costs costs Can year. that you are as you the development severance does shake and much on formerly expense you on end last think things: ultimately costs meaning have is purely reductions where mean and P&L you had reduced? think of a that not will X increased in then will give you or second how capitalized just the much have program the out; the aggregate, all how cut,

Tim Naughton

Yes. as our we of Tim. have development back have can Alex, volume. reduced capitalized sure the terms cut in And overhead start. it’s for we I

little development to in terms overhead annualized just We are think, people’s to overhead starts. includes X% That development a under long-term relative running, I of relative compensation.

that will, compare get promotes world, they to to include sort You you their the and doesn’t that of long-term The their fees, private development of if and comp. private world. tend sort X%

on and are are based this a expended. basically So Honestly, still focused overhead it’s model, the because upon way the units business focused. profitability very very efficient they FTEs or we incentivized are pretty relative to production but is

So sort – to linear, kind sort that works. not it’s of directionally, but self-regulate, it is – and of exactly something it tends of it’s

sort to generally, a a are have it of you have not actually any period up P&L, There time. of sort just new through whether region stable deals being on But it of of of yet is some the and be in expenses don’t is expenses for somebody capitalize I to then in some you you the against. may severances think vivid and terms In situations flushed in may limited going P&L. certain be development starting on where region,

Alex Goldfarb

think reducing so done development? the see you and more few few have like that costs over Tim, years overhead? total, then shrunk you’ve in reduced yourself then, still having But And where you the do as the – capitalized severance how total of do years past a in you much

Tim Naughton

his cash get – about to moved of could off-line I a to piece. you Kevin on having think to the last million, wanted at to think I the on might talked But billion, we to prepared about second $XXX equity I about in a between we’ve and as additional to billion to have sales, really $XXX and get markets, without $X.X million years, to from $X.X fund wanted Yes. the in couple mentioned felt get we which this debt. We be remarks. level asset free level we it to and dependent flow we

kind So contraction, would we – is development rate, of should pipeline there of place you some to kind to on us $XXX to have at I the until continue that. expect economic should going off-line this the about And that a on get piece, just then we’re in start million be $XXX million year. you we to will back allow to say, second

Alex Goldfarb

you, Thank Tim.

Tim Naughton

that. On the thing will second you come to back we just on offline

Alex Goldfarb

that. Appreciate

Tim Naughton

Sure.

Operator

Haendel next will with We go St.

from ahead. Please Juste go Mizuho.

Haendel St. Juste

you. been has question answered. My Thank

Operator

Naughton. this to Tim This time, ahead. concludes to today’s Mr. Please I back like go the question-and-answer session. conference At turn would

Tim Naughton

being in Nadia, we and on thank Take and today, the Well, you to you, for forward thanks, look care. coming seeing everybody, months.

Operator

Thank call. participation. all concludes This for today’s you your

ahead You now go may and disconnect.

AvalonBay Communities (AVB) 7 Feb 202019 Q4 Earnings call transcript