AvalonBay Communities (AVB) 9 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Jason Reilley	VP, IR
Ben Schall	President and CEO
Kevin O’Shea	CFO
Sean Breslin	COO
Matt Birenbaum	Chief Investment Officer
Nick Joseph	Citi
Steve Sakwa	Evercore
Austin Wurschmidt	KeyBanc
Chandni Luthra	Goldman Sachs
Adam Kramer	Morgan Stanley
John Kim	BMO Capital Markets
Alan Peterson	Green Street
Rich Anderson	SMBC
Michael Goldsmith	UBS
Alexander Goldfarb	Piper Sandler
Joshua Dennerlein	Bank of America
Jamie Feldman	Wells Fargo

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following remarks by the Company, we will conduct a question-and-answer session. [Operator Instructions]

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

Jason Reilley

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

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

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

call President remarks. Ben with turn to Schall, that, his for over Communities, and the CEO Ben? AvalonBay will I And of

Ben Schall

Thank hello everyone. we by after line Matt, joined you, Jason, and for our remarks, the open will and Kevin, and prepared Sean questions. I'm

I'll a of focus start and XXXX our areas. number strategic progress our by summarizing highlighting quickly on results

share, X, the year, year from XX.X% with XXXX. core strongest ended on just perspective, shown our of a NOI beginning reflect results which growth per initial phenomenal to $X.XX of store at same above As the slide the Company's was FFO guidance core and We growth. XXXX the of back, with one operating in history, and was $X.XX XX.X% FFO

we per is spot of equity the as capital we price million of a cost forward capital still our allocation of raised front, environment $XXX XXXX the during On available. which $X.XX approximately adjusted changed. fully share, In April, at and proactively

expectation a million of a year progressed, seller, being the million from total. million to buyer the $XXX in pivoted shift roughly of $XXX $XXX as net ending our original net As year we a

put the given all liquidity $XXX and development new original we extremely the also underway. $X.XX from development our of We shifting in for starts guidance fully capital million moves to strong environment down secured of ratcheted us these an -- with Collectively, match-funded have position billion.

areas, I on to We also our highlight focus today. significant want during of which progress XXXX strategic three made

further on of continue by operating seamless XX,XXX contributions This and make these uplift initiatives of internet, over projecting being on homes an in incremental million from initiatives is First, which as XXXX we detailed meaningful $XX our which our to incremental our is Connect looking NOI bulk approximately the strong XXXX, package In the driven million in over our be expect to inroads homes expect and beyond. from including X, We $XX at slide deployed very NOI developments new out of captured of of model. XXXX. by Managed transformation XX,XXX operating and Wi-Fi, a a Avalon have additional initiatives, end now and number to of we're offering, XXXX.

XX plus in During completed digitized and time minutes. of used leasing be take minutes and What fully we application XXXX, digitally process. website to associate’s X our now can our revamped about

also our allowing associates more maintenance portfolio, maintenance the to out mobile and and interact efficiently across We rolled platform residents entire seamlessly. much our

roughly few per operating number managed units the in initiatives, customer these driving of result over a also a which while resulted we FTE. XX% efficiencies, years As we in has improvement the enhancing past believe experience are onsite the of

Turning X area. slide as strategic a to second

as portfolio focused we grow. on optimizing our are We

of XX% seven to shift to our over markets six is our goal portfolio years. the to next expansion Our six

core subject to and the allocation markets. end and customer, we of increased underway, expect in environment be currently XX% workers At end year, we this development our XXXX, reflects the reality ABV’s the expansion XXXX. diversifying to by to more more capital In these of our X%, of the are including addition shift to based portfolio, knowledge this our exposure that at market increasingly

We're in growth regions, established funding to also portfolio assets of us the stronger lead in of allows to the with flow slower growth shift CapEx years a cash our which prune this which through and/or portion higher dispositions portfolio large those should in ahead. profiles, the

capital leveraging a to in X, expanding commitment earnings this strategic accelerate has and program a focus providing third start XXXX, in growth. developers our expansion drive detailed ways additional More area new Durham, new our In slide project North ways in expertise to specifically, Our Carolina on Charlotte. that of way we as included markets. a third-party been presence primarily our are our in in and as development on

we're During these books of at these programs be XXXX, will and commitments to versus Structured mezzanine during $XX of also preferred our business, million or over third-party to XXXX, successfully both building We Investment environment. in with equity made fortunate bases year. we launched economics of also increasingly business believe and yesterday's in today's the loan that now developers attractive be

the XXXX forecast submarket month of assumes is X% down a Economists, The third during quarter Kevin total or our year, rent consensus by from a about NABE, additional Before growth year. guidance, economic the of approximately significant net of consensus million of per submarket X the jobs model. of and for to slowing assumptions the a underlying and job data output turning want market in our The job growth on by forecasting the in the Business top to our XXXX. on it of provide proprietary specifics National growth context year. modes the perspective, XX,XXX our NABE a during to overlaying forecast of are some I research we Association to From provide of

that a markets, we coastal will softening and wider to serve of set expect of than In attributes are economic for there to year a usual, a a environment. particularly we a in in potential our in need be potentially of which as concentration outcomes prepared number our portfolio, suburban ballast

X, to support and home slide in in of which repercussions as demand markets a attractive. more to apartment median-priced for mortgage median income today's our on our is ownership shown a significantly the renting rates, continues the make home addition to cost communities. the of economics serve This to relative of As higher barrier

the other supply. The of existing be challenging. times, project with equation In a nearby and built softening in side competition is is particularly direct having that lease-up can an recently asset

across the some the believe has lowest directly positions new X.X% Our group us portfolio stock, peer competitive which supply of of only at well. levels of we

Kevin guidance. And XXXX to our with it I'll that, detail to turn

Kevin O’Shea

Thanks, Ben.

and our we slide provide for On X, operating XXXX. financial outlook

the expect expect FFO core per same-store our In for growth primarily the driven we growth up same-store X.X% using year, operating the of portfolio guidance, as by year. of growth in X%, X.XX% residential as share For revenue and we of expense development. of midpoint X.X% NOI portfolio, our stabilizing by growth well

about and we starts currently of XXXX. million and expect development, lease-up undergoing development expect year, new from For we development $XX under residential generate communities $XXX to this during construction in NOI million

capital capital for much during we this As last to capital year's we cost plan, attractive with our expect year's capital of environment. that fund more of uses sourced most

of of $X.X investment $X.X billion in we of anticipate uses XXXX, maturities. total Specifically, billion debt million spend in capital and $XXX consisting

after XXXX, contract in $XXX year. to XXXX. from which million be million obtain free leaves cash sources, forward $XXX remaining unsecured from outstanding to from our cash we in debt last to capital only issuance equity sourced, This $XXX plan million primarily the of later flow and unrestricted we million dividends projected $XXX capital at of million on in expect $XXX For year-end utilize hand

in a while our XXXX From conditions. plan on we response being transaction net in communities timing evolving market adjust selling a and with continued focus markets market on roughly buying perspective, prepared our communities to markets volume a in seller to being expansion currently transaction our buyer established on in neutral and and

and FFO per from our portfolios, we our On per contribute higher and growth slide capital activity and markets is overhead resulting our per in business. of our earnings components growth are illustrate XX, parts redevelopment NOI share. rate $X.XX an X.X% which share. variable expense, each investment net from JV share, expected and from NOI all management expected from of share per expected being of Elsewhere, per same-store expected these by core earnings growth $X.XX in to growth partially of are Nearly the come offset $X.XX per to expected share contribute share respectively, while $X.XX expected activity and interest a from $X.XX of other fees income to $X.XX headwind from in

deliveries and 'XX. for development from quarterly for basis On construction on XXXX a 'XX under we communities show XX, of cadence slide projected apartment the and

of was to low can resuming remain in this you [ph] as As on and million XXXX owned in deliveries development the due early during the starts deliveries of XXXX. wholly days starts recent pandemic, our new we declined decline decision in before slide, relatively development begin XXXX to reduce to XXXX. This see levels $XXX higher thereafter in

result, a $XX NOI development trend to million is last for this expected versus be million year $XX below at As year.

the from development for more next new year, year. stage However, and increase in set are year significantly later growth should to the NOI communities into which next expected development robust communities

over And to with discuss I'll our turn it that Sean to operations. outlook, of summary

Sean Breslin

Kevin. you, Thank right. All

we Moving and of occupancy, to XX metrics, year, strong normal the very of our a several ended levels. operating to half environment. XXXX more key availability consider After trending slide first terms with in of what operating we our including turnover

and of abnormal patterns, to translated do into of rent January year. achieved as available returned prospective values November lift amount our as entered increased half during the QX the the volume with of years In being we visiting of lease and in back before seasonality to addition, two QX communities which recently, occupancy, what in experienced easing inventory following a December, February. peak see we and renters in modest compared we in More

basis in change. flow on that year, leases have to asking expecting like-term low-X% beginning we're the to effective points the into in change signed beginning rents XXX rent February, range. which take effect of increased Additionally, rent be about is since the Based

to reflects of Turning our The majority which for rate. X% same-store driving to growth which full outlook X.X% of growth and for rent growth growth X% revenue year lease midpoint basis effective the from of year points includes revenue expectation embedded the XXXX. year, XXXX, rates full in is of our roughly growth XXXX slide XX. about the contributes our XXX an for Growth

rental in roughly driven other a by from and is from uncollectible contributions operating initiatives, is about projected the a modest amortized grow lease additional of to by XX%, which our which revenue, slight two-thirds impact tailwind expect of revenue concessions. reduced We improvement

assuming from XXXX full uncollectible to calendar XXXX. lease X.X% year that X.X% the for year for the revenue We're improves

headwind $XX expect to from we net the this relief XXXX. for XXXX. of basis-point two by than year is combination a Of rent offset million course, debt recognize a improvement reduction full of bad projected more projected the in the amount reflects in XX The

slide Moving XX. to

We below East projected regions the portfolio expect markets projected growth portfolio produce to revenue expansion West to average, to growth portfolio. revenue are our our year-over-year Coast the the average, the fall markets and are while produce the strongest Coast for above slightly

will is relief California on growth Southern material and regions reported highlight Los rent the that for certain markets, have in to a in point example, more revenue One reduction XXXX impact and our Angeles.

each has of compared projected our supplemental, relief visibility fundamentals. at We for in as and everyone earnings into slide so to rent enhanced change XX impact have the in impact the of disclosure the market bottom footnoted the the underlying region

factors. in Turning to of be operating projected is elevated a Same-store XX. slide expense variety XXXX growth due to to

macro is including just rates, first which categories, cetera. the et is in the The wage inflation impacting underlying utilities, environment, several

greater of XXXX. XX. insurance combined of you years, year of the and on on claims the severity see slide the rates, over table cost various the in organic relatively increase rate past growth pressure in number X.X%, We're the pressure given we're light with on disasters rolling that Second, all a activity couple expecting of into

about in the accretive for to growth additional abatement abatement basis of expense In XX property NOI the phaseout growth phaseout business, is of to programs, of points projected points initiatives. tax the primarily expense from property pressure XXX operating New York basis addition City, is to and about programs total add the the our The operating tax organic year. coming in

program While for period, the generate incremental the will particularly units we'll ultimate be regulatory revenue the in environment. benefit some a extinguishment the rent-stabilized during those challenging phaseout of

Avalon Access from our Connect. Smart as transformation, elements bundled and impact key internet, as operating Wi-Fi reflects is bulk a model and our Ben The few of Managed which referenced including offering, initiatives marketed

profit While we initiative full our $X impact it's furnished a on-demand growth incremental profit areas interactions. as XXXX. in centralize and generating expect this to other basis points the And a recognize the from digitalize of housing million about XXXX, adding labor specific continue we an various for is of year. which in to offset additional There's to XXX finally, for modest efficiencies to from business initiative, OpEx also we growth the expect some customer

then, and the slide see can progress And XXXX. to move initiatives to these if impact you date the three for XX, one each for we've projected you made of incremental

benefit As I in XXXX. strategic an initiatives efforts years contributing come additional Avalon lot an in another mentioned, In our more about deliver million a are and offering projected projected $X incremental housing is we're priorities $XX million to from others. And with to XXXX. NOI three in in in is Furnished digitalization expecting aggregate, XXXX from million our Connect to generate $X future million. these these $X

development. it I'll Now, address to turn to Matt

Matt Birenbaum

Sean. Thanks, right. All

we value growth not to to their by market $X.X for which generating business in month rents was billion in X.X%. it's the of is mark rents current are year-end, earlier conservative be reflect underwriting XX any trending X only this development significant underway, worth those of stages basis development At do But driver above still X yields well underway quarter's earnings release, the and pro points. yield the construction. rents. of leasing On until underway. which projects lifting mark-to-market. speaking, XX of The forma, per $XXX creation not this turn most is include does noting We in our levels projected on Company. is broadly in book that of this Just had a continues And

they We expect was in significantly the next capital that open years. yesterday's similar as and for capital to were today. leasing when XX deals markets they over portfolio is course, of two at lift than of match-funded many interest other rates with sourced cap the lower see And this rates are XXX%

$XXX half in will rates. year XX, we target million to regions, over prevailing XXX yields starts spread our to continue to turn cap development different new do expansion you in slide roughly we X If expect across this with roughly projects XXX at and basis-point

costs these We expect able moderating of we the hopeful and the take are in that of are finalized. majority hard of across advantage to activity half year the our will as second budgets start be the markets

more trade to started of signs have as of this become have We latest in new see few secure buyouts contractors to a selected our much early construction motivated work.

to our course vary rates, construction significantly capital will and could projected costs current all continue our start be the As our always, depending the activity over we disciplined how expectations from in year. allocation, on of and interest asset evolve values

XX. Turning to slide

modest, While our into robust book growth significant the future a has NAV earnings recent and could building start opportunities well that drive cycle. of activity been been we have next

not of set option to established -- required on development pipeline land and increased Most are providing projects, rights our we're the footprint. between regions rights expansion these development new all entitlements our until where coastal to as have secured. XX our deep roughly regions, a opportunity We longer-term individual contracts, until structured our balanced are expanded across close

the costs land are give are more market. changes willing seeing in addition, all from time deal to economics us to sellers certainly and environment, in the adjust we of who flexibility as In the more current

continue We just control as of for capitalized modest and million, of with pursuit this book a investment year-end. business held $XXX to including development costs very land of

on balance business. slide, the investment of the today chart of then, on controlled leverage the than the than from it tremendous as XXXX, is our on value total the context, the cycle providing part though dollar historical pipeline through is the this middle in even future to a of For XXXX was last lower shown right-hand averaged side we larger

I'll remarks. that, some turn closing Ben with back it to for And

Ben Schall

To Thanks, during for highlights conclude, recaps our and XX successes our Matt. priorities XXXX slide XXXX.

fulfill X,XXX this based to creating continue of making the you of our live. of way to for we base, dedication All strong. on to is our efforts thank of as each A only even mission AvalonBay tireless possible you stronger AvalonBay a personal associate better your to

You're of we and culture, thank heart and soul you. the our

it With that, for questions. I'll to turn operator the

Operator

Nick Citi. first the Our with from question of Instructions] line Joseph comes [Operator

Nick Joseph

for additional presentation. is Thanks. thanks lot as call, And always a of info. helpful the It

that. So, on in the I appreciate just Maybe starting development always market. transaction

the to Can your in maybe what markets? starts the and XXX XXX seeing the expected you're cap spread. transaction you 'XX yields basis-point You quantify -- mentioned rates on current are

Matt Birenbaum

Sure. Hey Nick, it's Matt.

As I'm sure lot from not hearing in you're others the is current a as well, transacting environment.

trading. course rate on see -- how the the of the that's mid So the there yields that expect I point seem be those can low be transactions there depending is start to as evolves market seems kind not development range, year. And of today. are today. in, interested markets is reference, tell, cap But in And a high of assets the kind What the to it, as we are certainly best are this trading over is out to -- around trading just our everybody X X% -- to most of we call transaction Xs settling market. think where to to underwriting year,

very that's right in I very XXX that XXX basis-point -- spread range to mentioned. consistent So the with solidly that

Nick Joseph

expansion capital we the expect from Thanks. occur, sales continued I expect as the just on and the any And this sells -- buys any the That's established in helpful. between cap into year? difference to reallocation do which you then, then rates of regions, capital markets? And asset reallocate you that where these or guess, should

Matt Birenbaum

Yes.

a to that the bit look little last you what selectively, of Boston, bit back some well -- out that predominantly, out kind over Coast West is of quite York it Northeast. continue kind and that And the X continued we you New if a as there of can X years, Mid-Atlantic of I of capital, on and metropolitan will we've to at that say, little asset overweighted corridor. a or of out the the then, would area, I the expect bit be done rotated think So, but, Northeast sales have

spread, interest spread probably rates buying The over where we're just see. probably I we'll because two some movement that cap in rent selling, two we're that's of opposed rate or in because we're last there's the where the buyers those that a embedded growth in would for -- a the selling. year than were where the markets cap And so of -- the as been the regions had say lot lower ago already has as cap have and that the tightened rates rate were in risen, regions more up roll or yield basically, cap buying that rates that, year to growth. more regions kind

So, been there. bit less little there's a probably adjustment

there of couple So little would years. I less than we've bit think of I but the might what dilution, be seen in last a probably say

we first our informed buy then then by essentially other our so where And buying knew that of shifted then we we a the we're on the picking sell to it Mid is year, pricing. how last pay doing to from dispo part off and turn, in an of view much that was of the bench And to reverse that. shifted tactically, asset that, have sell side. kind there tactics exchange fund to willing

second. sell So, by we've shifted to a first

Ben Schall

testing expansion in the into on couple the market see just we we'll or through market those Nick, potentially versus And proceeds sideline on sure today, those the in evaluate I if how assets, one, of generally and potential want the you capital until with trade how we and other have then environment decisions. decide acquisitions on a the the acquisitions to later is activity the to allocation trade other of sales right use potential for pricing We're make them now for expectations yes, asset year. terms the

Nick Joseph

the Thanks. Those are ones in being tested Northeast?

Matt Birenbaum

in one Mid-Atlantic. Northeast the one the are, in They and

Operator

with Our next Sakwa the line from question Evercore. comes Steve of

Steve Sakwa

growth. areas forecast kind and thinking upside, I the what the guess, upside downside about you break me where could you think hoping of are the have potential areas most could downside? be kind XX, maybe on region. you there of page just the guess, you drivers of be was and least confidence, out could by and all you tell confidence where that I there if your in also I

Sean Breslin

Steve, that one. I'll Yes. this is take Sean.

the downside, and XX, So to. of in terms things reflected a across point first, on there's of categories, various couple I'd upside slide

job going the to in on either that lease with we is, on obviously, mentioned, the First to drives extent models that's more the that that's the growth, timing then which or Ben as improvement impact less occurs. have an in from that reflected that income and et growth, -- we side, certain rent a see economic have cetera, environment, our assumption, that macroeconomic

we this if impact terms much don't environment So really would year, see decelerating macro 'XX in an late than it until a of impact then of more 'XX.

at challenging it probably and likely in of other to to we the being in point half trying more the pace some than the we're in in starting bad the some debt as and the components underlying down X.X% I is what improvement roughly given get the markets. one in is think that Northeast. little certain issues forecast. estimate relates other as debt year the impact see here, second But first of then, of it the bad I'd the of And really one all courts the by the about to of a of sluggishness of and the the to to half that We're improvement LA of terms the just more to of areas, in those to items end expect year going we're X.X%

of thing other another a likely Los category way on the the would to depending tunnel think of shorter. end sort the while that they're are could getting And like this. things there move since There upside see unfold. recently, needle how Angeles -- extensions people be the extensions That's one I in there on as some the to has or I'd been that some County, point getting

tell. incorporated maybe we've improves. It's margin, but So, hard at to that, the it

in the California in maybe Northern tech office I'd the Mid-Atlantic example, here more lesser a in Seattle sluggish of the geographically, as government sort. then in and markets terms it's been that the say, being to things extent not of And an back in certainly, and

So, depending tech the unfolds in impact likely those how here, on would be regions. that market the

other of City, Boston, And out then, generally in performance good out New seeing regions, the of California. strong York pretty we're Southern

if there's at say, little we it, have these more maybe on stabilizers decelerate, tech a some but regions. things, look probably, you in now, other I'd of risk side the do of right So, some really

it So, on of neutral all a it net kind when you is add par, probably up.

Steve Sakwa

what Okay. Thanks. And how then assume what's that I just that on into development, about maybe starts? are starting for somewhere $XXX moderate. And X% costs get in inflation, that what Matt, construction you're to possibly yields guess, going and X.X% see that's with million on inflation could kind upside if moderate? continues start. to But as did you you of to and think I happened or of the But the to cushion range factored presumably,

Matt Birenbaum

more, down a which cost or slows of rents. I question, it's guess, Steve, hard Yes.

this think at I hard think we point, moderating are costs more.

-- with ready costs plans to agree you hard and to today a you truly until truly you're of it's set would start. hard very I bid So, have to hard that are where know

are in it dirt two And we deal coming subcontractors definitely they pricing, real, happening. starting of scrambling. that and number and projects moving month. the up That's ago, and it's the QX starting is we've direction, a in So, see couple not a or actually growth starting we back Once with what are QX. is more on move we're other was were a to start and the to started the is whereas The year we savings regional. X% see some going on to buyout, see

on subcontractor does you're really it how there in much is. capacity and depend region So, the

or relative year, the the over would where to going they're where we be going do on QX have to in of under start but something the costs say, in this we business regions on Sorry, we last I that would QX, they many so -- But hard got take that looking we're to -- been, -- expect would year. -- here. of year next

what so back that mentioned our this loaded we starts And we -- year. are

be natural we'll trades dramatically. that felt as But that deals. once will that better out have better of environment pressure part a summer, and strategic they've the our running is these and the of think kind say to just the these Some a of is of on of work over buy out evolution well actually it pretty some we of some starts shot to of decelerating

Operator

of KeyBanc. question comes from with next the Wurschmidt Our line Austin

Austin Wurschmidt

curious going on just criteria bit your significant from I'm assets recycling X capital curious just underwriting little that how are within comments Ben, the back your expansion a a time meet in your achieve market is location if expansion sell that what of the to markets the the rotation quality you perspective. side. a And of on markets, any that also given X-year you to frame can outlined just into to that year? function volume

Ben Schall

that, for Thanks Austin. Yes.

I a for mentioned, with in sale. the couple as of we're So, assets transaction on potential market side, out the

analytics close have but Our the currently do deals. We which transactions we're particular market-by-market staying very not underwriting driving actively of submarkets. buying team any are that obviously to market, side is the detailed

points. eye our price various product have close of We across type on

to ready our we year, we're during ramp that -- decided to get activity, once trading be if back back into activity to this ready So and up. we'll

activity. of less maybe accelerate in some our dislocation, opportunities that, that like trading, an hopeful funding capital to question, couple of of making over been In for XX% target our terms some that time of the last abundant, years set to your and through this, kind we've us We're environment and program. we've X activity then through to be the development increasingly the like getting potentially inroads good there'll X years, next through broader over acquisition step the period, broad in

need where Our But of window be we cost in this that. themselves. to opportunities to year support start could present those of capital, there later obviously, types be will a to

Austin Wurschmidt

just I'm you what's given highlighted, also the be that exiting have have comfortable guys I'm year? curious you and which significant if available will year sort curious, year, starts. contribution. kind into then, you as we the environment deliveries see do sort in As you what this you'd could accelerating for with is And in powder I'm beyond just accelerate curious get you do dry next a volume helpful. of That's starting appropriate Yes. the of XXXX, NOI And maybe most of the development

Ben Schall

fast that construction strokes, want not of that this But of enterprise a the time, you, a We've hard particular guide upper of range Broad have of over Austin, Matt set we of of period in reflection the couple to under starts and that. have value light opportunity area. Yes. described that's I'd we sort got years that development XX% at and is on we're last today, a given environment. the Yes. operating that's retrenched there. the

we the relatively control pipeline. pipeline So, at a cost. We limited have that

We’re land to our the has right lot now because deals spending of changed. time market a benefit restructuring

So, We've this has a doing time. team, that's long been a got there. phenomenal

fully. and to about those to So, we on to will was how rates Matt XXX we do right, be rental trend spreads, element kind cost relative about how the think be on points start in lean -- talking basis underlying an rents we -- the of -- of lines capital. more cap the we maintaining That the the about costs; would XXX our how where of spread do think a trend think will signals line to

Kevin O’Shea

the of a year. of But up. market what for the the $X.X flex funding billion in from and equity set that from billion we flow, there. side, capacity. that's markets we self-fund Maybe, of aim fund what on somewhere And activity somewhere $X opportunity is be capacity billion is typically asset development three Austin, of point, Obviously, to and start through and funding we probably in is the the terms EBITDA to additionally a between there, worth is that function growth cash last whatever capacity, set sales can development course, -- the and this leveraged organizational as add the organizational equity sort Kevin and up if we of number started $X the we our set, here. new extent also then funding can opportunity billion the to able probably just variables: to $X.X plus a about our our we're talked And capacity free past, to in

Austin Wurschmidt

little that it. is Got leverage with fair But assume, capacity may a greater? today, it's to bit be where

Kevin O’Shea

to find -- as times standpoint. We're know, you a if capacity certainly, from Potentially, you debt leverage can X.X yes, net EBITDA. ,

range target X X is to Our times.

-- or If probably quite lowest in that have sort look certainly fund to at markets, the we see development to cost of we today, among debt X.X%. a REIT here just fortunately, we play in XX-year capacity side to bit. the opportunities transaction house debt the of borrowing we where all for course, offense So the of fund be the we have to activity. somewhere have of debt is the of capital could around industry. And costs And in

the to be as that about investment. capacity we which a our want factor would additional support to we leverage think So, degree lean also relevant to into

Operator

question of next Goldman from Chandni Our line comes the Luthra Sachs. with

Chandni Luthra

be could then, need any confidence capital for be what you In in that for terms are And market outlook of returns seeing of might the your Structured on you in your and for in or Investment generating the XX%? opportunities Program, deals are gives you? distress

Matt Birenbaum

heard second the not Yes. I the I Confidence in…? can sure one. one. first take I'm

Ben Schall

of Returns XX%.

Matt Birenbaum

sure. Yes, Okay.

the mezz So communities construction, yes, in but Matt markets. builders either or it's Are apartment here. that I for building the in our not capital, distress? sense No, preferred market, we're seeing targeted merchant at really that providing would new say, we equity, SIP in is mezz new really

So, we're stack the the of build putting project. when story capital coming together at beginning the they're to the

what's and have gone there we're down. proceeds, rates And proceeds their what to seeing coming is interest loan where happened is construction given given

to XX% now construction they're where So XX%, only or loan developers are they gap XX% before, getting were getting that maybe fill XX%. looking

XX%. investment of call of getting XX% XX% gone XX% to XX% that to maybe it, the in we and are have to, from stack has our we XX% range. down kind or move deals seen And there that up, -- So, done rate

and for years construction they short-term are and proceeds coming due, pay have enough two money off their out folks three first There -- refi mezz. their bridge started there to and jobs who don't that loans ago looking and are their

new -- the if to a there's gone I a of of on out point. bit not opportunity I this a is a We're focused call this. we there. distress, market have That there of don't that much newly is pretty built at construction So that little little know asset recapitalization but side bit

Ben Schall

market, And amount be expect they're with to right, the sort it then sponsor, we be through of this the the more of Chandni, into owning do comfortable have the than inherently assets the to to Matt, more we're to the estate. we're to capital the capital to our -- year of SIP we this we deals developers emphasize end, the we're very last owning to And quality going these our the which is not if need broader detailed in, prospect SIP the selective, the just views through about entering over opportunity means -- our make putting prospect to. do been underlying but attractive has of of couple of assets real on underwriting sure years, with

Chandni Luthra

about significantly month. and you a November, bump you in as a bit. sort then, tech layoff was very slowdown. everybody that end talked about impact headlines, rents we December, a think obviously, you the saw of accelerated which, And think talked little about the about towards We in obviously, of -- then big when Great. than big January, layoffs higher was seeing guys But January November, January a of

lease looking -- the falling Disney, not sort saw move-outs just we that notices? negotiations, your So, in day, are that any from that I as path, and right sort every things we tenants, be off our with this are on or fact at conversations hitting we the of of you keep headlines in mean it about we morning early what a things are around just think you cliff? gives signs only of off any these seeing confidence coming are screens

Sean Breslin

on the seeing economy rent is good the some a say data would trying that's you well. Chandni, is cetera, point et what increase, that that not and I tech significant we that just to I collect question. can about anything from unfolds, at What seeing. that's the is of residents as there we're a that's it issue everybody underlying relocation, Yes. this how I'm a it there's relates tell in would But we're of markets. terms what it. think material understand cetera, not et answer to notable indicate sure I to based

reason terms XX little quite a move-out. bit the So, in is relocation bit. gone XX a up actually But has last to come not Rent months. for of down increase surprising, have up over rents

don't nothing that there's data there's that that So, issue. the are those us, us significant indicators a would to tell underlying yet and surprise I think in are

our not that a issue the took into mainstream to saying the to on time. are, of that Now lot have I from lot supporting employees a It's hard that teams specifically the rotational sort is effect seeing anecdotally there's other and companies hearing we're into corporate tech of of of a all data, the from transitioning this sort not more fact, now there. cetera, we're needed is roles new et think, little that they're in there in a question, et anything a significant that during And other ground of America. unemployment, rotating that, into of period people the And they they severance, cetera, for maybe organizations. organizations, and people bit more pandemic is some tell on but

the was ground. of last the there it's are front not terms not to but targeted in people it San in Jose layoffs, up I the they're of The week yet. terms our on door showing just And yet. in seeing teams, headlines speaking sandbox and

a in in far, proactive data. extending fees not lease some things duration, how But of thinking about it's markets hedge up how we being look those other bit. showing we're and to in we're at lease thus terms little of So termination the

Operator

of the comes question from Adam line Stanley. next Our Kramer with Morgan

Adam Kramer

same-store about ask expense to wanted guide. just the I

appreciate deck kind of in slide but that different the specifically think components. I the really I kind deck the think of overall out breaking I

Specifically kind wondering the if expense rate repeat figure future as what kind kind trying proper if that's number kind kind again, just abatement, -- run just on a tax that's of in onetimer to years, same-store of going to use recurring proxy. is a of out to or the of of and

Sean Breslin

a that Yes. the out terms of can in , for But assets because the tell if we cetera, the of by two Adam, what our three end sell do other the lot are out another contributing good abatements question. and in et one I that assets of of et cetera. And have tax change what we you, portfolio, of things trade the two by extend the years. phaseout then or out 'XX end same-store the XXXX, does to XXXX phase bucket, in and the phase four

out some the So, drop next a years slowly you're over going of see little as lumpiness to phaseout. few that assets

lift terms then, as -- Eventually, pretty pretty at get we rents. I nice end And of the challenging along Now, incremental fee of would are mentioned, there as phaseout. a in standpoint. And of each market in ultimately, from a we year in that a York regulatory what there get the there terms the nice way some program off should a benefits as be just consider New of an phaseout. people the

guidance kind of few terms a So, that of the years. beyond headwind be activity, to XXXX sort might it for of give years of there that's bit. some what sort next to little can't be to the as I will but for about think way the precise in expect from headwind what

Adam Kramer

markets, That's then better Thank there. you. follow-up, a really And helpful. expansion thinking growth recognizing potentially just job through the

I are for just thing is of right, supply through think of overblown? supply, supply it, given months a thinking XX of less guys of maybe the the makes But about as broadly, much weather lot -- or the for people I going publicized supply that financing side actually, the just thinking challenges that think? so. supply today sense. XX others you it elevated that? call well kind is next supply months the expansion maybe other the on out think there, some look, it's storm as How that not side, Is kind markets, or Sunbelt have and starting the and And the of just the to development today maybe probably kind of supply next for is things,

Ben Schall

Yes.

picture add others can handle it Let on. and big me

objectives, to of allocation demand based of next portfolio they're setting right? right, these long-term XX the we couple supply have because appropriate make, out years, the dynamics objectives, XX necessarily these think I'd not our allocation comment first on and to over years. We're are The the the next

said, the don't we mean reversion to With of some the any have high-growth new the expect supply potentially on with levels fortunate more deliveries. could side we couple lead of and these years do of markets. high rent that growth muted the We're in next some and to

couple years. next We deliveries limited very the line coming over of on have

program, like own projects So our of funding most activity that XXXX, and could now going which XXXX, starting, we're are a us hear coming perspective. lighter on that development, our in years be currently to be are developer talking line which looks you those including our about, some from supply

Matt Birenbaum

market to I'd that, selection as is just we the as are portfolio build markets. these well other in thing conscious which add selection as one we submarket Yes. of

It's So, to been great if Denver a you point a you look -- I would and example. is good portfolio market.

we lot better but more within supply in vast year, Denver, at have under there it of is the strategy. balancing if and of even we city in look out with have bought we heavy done where a assets, proper. I portfolio, in We suburban not one the development of construction, Denver Our market. Denver. asset we're has jurisdictions supply-constrained. There's been think, And in that where but completed acquisition majority last And one it an assets lease-up you the than garden suburban is it's deal mostly another bought a Rhino

Operator

Our next Markets. with question of Kim Capital the line from BMO comes John

John Kim

you lease could wondering revenue. high, Thanks if can just on due you. in strike uncollectible this And in that. And comment did this Is potentially for Southeast additional remaining I you disclosure on the to York New a economy? Thank surprisingly high Florida. and what's the us affordability? see was all color It happening given and

Sean Breslin

high through New Long York Sean. been Yes, court in pockets. Even certain certainly it's forever get has Yes. places pre-pandemic, like to the Island took John, process.

So, significant resident pro might that's environment the necessarily And surprise. you relatively is imagine, not friendly. a as

that over XX they opportunity the the generally of seen can months. any road we've And kick down get the as court to the through sort happen so system, to XX last

this end, an on it stretch. place months, have not for phenomenon of I it's in move like happening is I slowly any up, at think have as the Florida. by opening point just the are "pro months same and earlier, to a are been in things system docket New back tenant-friendly" through But, than for mentioned And courts longer up is a that the things moving it's lot of but coming basically as lot Obviously, York time, a is along. time cases and kind As slowly. of you that and average. moving are just taking to Things much

So, in necessarily that's It's historically. in debt there say had a bad the higher Florida, particular terms reason of market I has is wouldn't case. a that

surprised by necessarily not we're that. So,

Ben Schall

just I broader basis-point bad right, overall but an I know mean pre-pandemic, number XX XX the audience, traditional our debt perspective, from John, the range. And this, to you know was portfolio for in

runway comments, we're hopeful may So, of types assuming over year It the this direction. headed years. we're significant but of given figures the take still a couple the we'll a Sean's be right for in next while, from

John Kim

your presentation. XX of on Okay. My is page second question

from year's. completions, just half why helpful. will curious estimate I'm which show contribution You is NOI the development about of be you NOI last very 'XX that

looks it the at of about given look first of year, if half same. this first half you Just year's the versus deliveries last the

Kevin O’Shea

mentioned revenue start And And results chime take that put ramp lease-up, take see to the most in we to in the developments to essentially, in we out where remarks, is is Others this to did which back for to began with Kevin. my obviously, have in. usually, in start thereafter John, build to that then a in deliveries, model opening forecasting, complete, and start then XX I you from when Yes. you shovels crack NOI growth. X as as XXXX. and you want up results occupancies, quarters then to may at ground. And I'll communities this. undergoing

this is little when there bit of lag a play you So, out. a

are it's NOI slide to be showing meant to -- ramp. coincident on when deliveries this the XX when for expect bar here Rather, we So, charts is in a not proxy they our ramp. deck

NOI you'll And to follows follows that that have that an so that. have therefore, occupancy

it as to effect you it create tends move P&L. a So, lag the through

John Kim

I'm for call. a sure deliveries the year, last on save you. later but will Thank in I'll next from be earn that question

Operator

from next Green Our comes question Street. Peterson of line Alan the with

Alan Peterson

a West as you they California, regards two when wholly on asset you had for quick would look out questions in Just corridor venture to side. Northeast being the property owned the on well reasons market think Matt, tax commentary about enter the joint transaction to of or Coast? California, are into dispositions as in dispositions, the sale

Matt Birenbaum

a question, good Alan. It's

interest we -- back so was the have York did We done far, JV the New XXXX. that late only we've partial sale in

there and a years couple owned disposal the done fee simple. of the disposed, were lot been So, we've last wholly over of haven't just California, out of

today. about don't was talked that you obviously, you a sell that if prop suffer they asset correction prop or values at there. have time We you probably XX about Last where year, There's some lot larger. when interest, XX% where been think overhang are the a reset. this reset were The XX than

at quite it might point. some wide that we the about consider is that we talked as as was. something spread isn't that But have So

Alan Peterson

more and becoming discounts attractive becoming to bit markets And challenging with then, to swing little acquisitions see start there? a team starting I'm of portfolio curious premiums you're whether AVB portfolio the to a -- potentially financing more the whether

Matt Birenbaum

portfolio would for transacting Just the XXX%, I -- is discount debt there markets. right? say today, the their Yes. portfolio the is part, because own most today

or less. transacting what modest what's right million $XXX of with and we deals assumable in deal $XXX now, size, are general, or -- deals seeing is, are or So debt million

debt on So, you're to efficiency lot all That's gone cheap was so reverse. at that put and portfolio a two of right, efficiency -- large debt the once. buy being of a able the ago, a or into year

going of debt I are go. more was NMHC you about, know stabilize, in to is, you start what going sizable as to later for. see are asset at you talk waiting to market come will of some to expectation kind think That's the go, there everybody's markets the the sales a lot I year.

a portfolios. that I that I year would this of certainly total be transaction expect -- volume say So to percentage but opposed yes, much as the would higher will one-offs

Operator

from question Rich Anderson of the next comes SMBC. Our with line

Rich Anderson

about question, prefer So, assume in back you you recession? deliveries, kind of Can to that what us but the does you're John's you to the potential economy strength. in at about what said inform -- macro environment, I about overall of and XX. got timing into the trend slide thinking upwards to terms all I deliver

So, by the all the will around? can you image time about this comment rolls look like at what overall thinking and on you're landscape what XXXX broadly

Kevin O’Shea

Rich, to is Kevin. join. I'll start here. Hey want Yes. may Others this

So, about in X Austin's XX, try earlier question And I of at start happened the apartment look it a in tie step years sort over few you $X as effect to a somewhere start back range. in with that us of of slide if of made terms completing deliveries 'XX. for $X.X our and and shows lagged the really timing last you is comment that 'XX know, previously. XX what kind the to typically to it from we capacity, billion typical of development recap, to And just just quarters of through kind billion

and I in If the $X.X last think on when you million billion $XXX you $XXX million million look over last XXXX the year. or about three started or or so so years, average, we include $XXX

little been or a trend lag year, better the of of a over the the and below in part year created realization is lease-up last last NOI from few probably then with average the maybe which trend of it's So so starts level years, portfolio. for the bit the next below

how of sort work. just that's So mechanics

what jobs. the volatility levels to the think few of looking we is does the say, of your uncertainty last about and more of reflective really, terms when In question over starts of years environment our this lower I start the were

start we that where in at level average today, is are look below a of just more, in certainly, have are position because Company terrific only of which generally. the our we in lower position But million debt not an for today, gives start is whole a level as year, financial us a capacity. plan we which, to not leverage the this we the a lot starts to aside, $XXX As

and markets respect doing and is are is years likelihood we the increase in NOI environment from macroeconomic starts to So, development perspective decent realizing with stable broadly a reasonably in two environment if next perspective a so accommodative for the our lean capital a looking the and of to growth.

capacity up general kind as that sort ramp macro at is want So, do of there our our environment, we is things the of and to so. to look

in of positioned development the underway, we terms well $X.X already paid that's growth stand the NOI next what deliver in As robust things year billion just we for start or under what's on of to two. are of essentially irrespective construction

if So you I to Matt, add. don't know, want

Matt Birenbaum

is Rich, cast. the they way deliveries, already show, Yes. those that just clarify, to die

as not it those because have get two So, deliver be that we'll market a ago, to out enough as might as can that deliveries of there thought years had playing say, is we start a But, 'XX they'll and deliberately plan are soon activity underway, way them. we those that into smart recession time. just years in deliveries we fewer at less all to Kevin take yes, ago, because the couple we said. We're

Rich Anderson

Okay. development a stepping conventional and third-party in assuming would to paid if like you economics And approach of that more the parts Can the you on stone moving to you of the Fair way there? relative markets to over program everything in-house, revert second course a it? these the sort about kind that the Is done time, is into fee of talk of funding is to that to back all think get more the term. the And developer this about the developer for longer enough. being question efficiently different program. to

Matt Birenbaum

an program this that, as respond want returns the way can and because development an Rich, may to is well. a acquisition. somewhere a development acquisition is and are is somewhere risk Ben think Yes. we The about to Matt. that between between the I

is So, the developer we're the the taking capital the risk. cost and construction taking risk, lease-up risk, pursuit the

little development it's so, the AVB paying an a a on we earnout there's straight-up on risk-adjusted are then bit than think because we return. does. how And and good an yields deal are the based less But fees that

we've for doing far because where has it just Where in markets others. the accelerates been time DFP like it does guess, started than we're I One, further we're our get we so as expansion along the on more also market investment us. does a down dial or And in year take say, -- and it's to two the North and activity regions not things the up Denver or the a in more some more so and our our five opportunistically own years where response -- two dial can it teams ground Carolina, already. to conditions there a ago, supplement in view sense we we capital. cost to as there own development that been quickly of for much it But activity in

us, be may a for but of down regions, these and turning us business line of it development. be well we than for we're it our nimble established So, own of when may in up terms additional it are even business an in fully expansion more that line

Ben Schall

put. also and completed be definitely a it's we piece It in where able capital we sell. developers an owning talk No, fuller have they and to see And synergies could develop, right, well last market. third-party they're and/or of be capital, looking a the term. within they've add, a asset that long need I'd a piece places deal need could they're Being to wanting stack with just something to interest

flywheel that So, in expansion helps these markets. also kind accelerate of the

Operator

with the Goldsmith UBS. comes Michael question from next of Our line

Michael Goldsmith

suburban of suburban connected that that, chart supply while growth historical And that your Can portfolio kind performance you to X.X%, the there's bit says GAAP for trends to with and compare norms? growth a talk is then about urban relative little X.X%. does is the a urban? How supply

Sean Breslin

Yes.

good questions. So,

hit. it versus pandemic, the terms urban, of relates as took the As to as performance an urban move through suburban greatest example, in certainly, we

continued have an date mind. To assets, we've our but you change recovering, example as of keep rent in like, blended stronger that, was growth in to in to And coming slowly in the think, function I a It's to in seen they to portfolio. north urban are we X% X.X% give steadily about that's X%. urban but just in recover So, and from terms a various QX, yes, urban and of our suburban people office portfolio of back decline the environments. the

relates all more sudden terms out urban/suburban development a of to millennials local about always the to school was there the of made GFC, have more mix, environment submarkets urban terms little difficult concerned there of It's regions in et and development, in flocking there always terms of cetera, been was economics for suburban jurisdictions renaissance our nimbyism, a et sense, been the and it of supply a cetera. districts, As Coming of in challenging. urban impacting demand environments. urban good within

So, that's why in a the saw urban supply pickup significant you over last course cycle. the of

not that today a to development opportunities sense suburban. some environments, look in is happening As that Supply at standpoint, time, now, urban of at doing much in in are we is it everything almost point you are, standpoint, there's there environment. likely given But right some development. urban you be, an now from an it and will -- the things we're makes from where economic look urban if play anything at right

is us on there be that overcorrect play But opportunities the of moving may cases, to sort things that will point. way at demographic there, in some there. this and So for supported

of we'll we selective probably more So, urban in be than last the terms were development in cycle opportunities.

Michael Goldsmith

very Kanso How fully How you. to compare? That's to per relative do follow-up, do likely compare? as maybe in yields the unit resident certain less type quarter. more how will how Kanso the costs in rents been a for has a reception a amenitized that development? Is development? you essentially, So the to Thank this economy? macro the And a does And pencil project development started a product of the differ that helpful. construction just

Matt Birenbaum

want a The don't to lot competitors speak of that value strong. a This all started overserving a Avalon a nice there only and insights Matt. really can an the customers the of a brand customer as amenities there. customer don't of offering we're apartment bit. it out that has other value are service, research sure. Yes, new pieces provides that And is who all provide. necessarily the with the bit I of out on-site have little reception that little don't our We been the and -- there lot industry an today and one

same goal location. new or at to of comparable to is offering a fully able bring So same the Avalon of XX% be the to that in the in XX% amenitized submarket type our is that a in rent below rent

you're might we've might savings that there's be be bit cleaning done so CapEx more ongoing actually you're little fitness in in and spaces. capital a not not operating expenses building you're a et because or pool, far, remerchandising And not It then, those upfront then the little a than building would in think, discount savings that. there's cost the ultimately, the spaces really I And like the also those -- costs, because and center, operating cetera. X%. suggest less X% not because there's the you're

at -- X,XXX The typically to little mean, more a amenities new not a build, maybe upfront community might that. than cost on unit spend bit a at XX,XXX a we hard savings, it's I

that. at of So, the the a savings thousand then And door expense you're in is of on OpEx. side, saving operating a controllable most couple least

up the serves yield pyramid. same, the us actually, and a of So the winds being different it down pricing it but about kind gets customer, further

So, it expands market. the

Operator

the Our of line next Sandler. Alexander with Goldfarb question Piper comes from

Alexander Goldfarb

So, ones. two quick

accelerate end First, at initially to said referenced, response [ph] you think deal to intent a but questions, in in on into own market. that question the a good it's to the you then of the way your subsequent DP, the the wasn’t I

where markets at So already maybe you DP I an because actually you're they’re more grow versus looking deals establishment. it's to misheard or other of markets more markets, maybe a use the you deals in, that in different maybe investment it's own way to just just look an have of how

just clarity. I some get to So want

Matt Birenbaum

Alex, it's Yes. Matt.

lending Developer the Structured that capabilities, Investment into about taking programs. you're we earnings Program, SIP, program. we referring that's day really -- assets are if Funding those do the really although program assets, We really DFP, to one. the to own generating we fund construction I mezz think -- we to. were our referring assets we're that's and to own need two those we’re those Program, where the expect have from not are our the the Those portfolio, different the to that Ben leveraging prepared The and The was beginning. and that's

Alexander Goldfarb

buckets? It mean, pretty two your you're the -- picking because same that underwriting difference assets and it's guys the Why deals. want different would what's own. seem basically, like are sort I to bucket you thorough of So have pick in -- how and your you you'd

the why the X? between difference So

Matt Birenbaum

we paid It's three it looking our The very XX% call development view it necessarily million investment would expect for long the point underwrite but takes regions, and focused or And acquisition regions. back. underwrite XX to XXX% to that way doing very allocation development And expansion we're getting we're to that or of a is do construction the on the The lending portfolio where different profile. a XX% we not expertise we of focused that portfolio, it $XX established at an term. the to from have similar the on SIP to we're then years, grow lending. actually DFP that's own to understand and to what in for we're and kind

Alexander Goldfarb

Okay.

But apartments, the whether obviously, or the there's these said you House regulations? existing look fees, Second feel fees, -- hotels are of the at pretty already et these or regulators this the fees, and it's all we're guys like your of covered already on is stuff at having additional type programs. regulators and connectivity, what familiar with White sort of comfortable Wi-Fi and that regulation the and question to do is view cetera. Avalon with other Connect launching et so look harder Obviously, feel covering extra cetera, what it's under going you

Sean Breslin

with is two good regulators Yes. things. is in take that of Sean. to times, go terms to what's people of One a question. and providers a is that Alex, different what one, hard where it's I know looking would exactly they're What and been say kind for. appropriate, FTC telecom inappropriate year, Happy in this might are terms including service. this addressed couple last has by what's of this the providing But, of

field in has I playing might doesn't think all the way So, the That that but have all been particular mean regulators. addressed. forward of we we're I is now, something with, not at by describe future, it. And regime, blessed least under feel it think guess, comfortable been sort change I'd I the we that moving a has

Operator

Joshua comes of Dennerlein line the of from next Bank Our question with America.

Joshua Dennerlein

How I and housing on about from Avalon same-store same-store I out what broke think Connect associated wanted XX. on you expenses. programs? furnished we base touch revenue like those to page should that the

Sean Breslin

prepared is Yes. other those question. our my revenue it basis rental on -- identified. XX incremental basis, at or on Based relates an this XXXX, revenue I points No, that it so overall, I initiatives mentioned and roughly But various good look to in remarks with as of associated for you growth if growth.

Joshua Dennerlein

So, furnished does include labor that efficiencies? and housing the Connect, Avalon

Sean Breslin

They no on the and housing, expenses labor That's side. include there's Avalon and Connect furnished efficiencies revenue.

Joshua Dennerlein

Yes, Okay. that sense. makes

revenue of and same-store offsetting you a to Connect housing, through same-store go-forward of furnished are or is those bumps well? kind For growth and onetime something the basis carries on that Avalon expenses, as that kind have

Sean Breslin

is that mean, going right is and that and I question. also both over to we're for Connect years. couple now the good No, side housing, Yes. expectation additional Avalon those the programs of next labor even continue to enhancements to on well, furnished the as see

XX, stabilize around them see probably XX you'll So, so. or

a you XXXX. programs without if about expectation it accounting, to NOI these portfolio, contribute about will at the $XX of into flow $XX on is that probably And million the the our million think P&L of through projected is to about the high which, getting way the is overall level, I for -- incremental detail

lot to Avalon to in But highly of OpEx again, earnings stabilizes. a furnished is pressure specifically and we're a on there. look but way for when you the contributing will Connect it's the over still There's couple of next So, meaningfully years, you two it next come, for XX% aggregate. until some see about activity that profitable the at years it

Operator

[ph] line with next Cho of the Our Suisse. Credit comes Sam question from

Unidentified Analyst

I'm Tayo for on today.

I I forward. wondering portfolio question. know in changes thinking contributed regions. just how going the AVB expansion rent But is has and invest regulatory, your Just noise any in is the control if Thank guess, portfolio construction one strategy the to to strategic you. about

Ben Schall

a years is it of we the at Short environment. Yes. portfolio couple decisions our Thanks, prospect when answer of in regulatory Sam. arrived incorporated ago, the allocation

it to minimum why we a for exposure markets expansion a continues want as various it in And our regulatory the so, relates motivator on be at get to to diversification dynamics.

Operator

with question Jamie Wells next Our Fargo. line comes from the Feldman of

Jamie Feldman

I guess changes level? guidance? all sticking in have 'XX see or municipal with where level do risk, most the And rent control, I the at mean, factored your any whether you state you in at

Sean Breslin

result Hey a mainly significant Jamie, the housing is say is in very issue a a supply. of of probably That that, I the country, this What is answer. just Sean. new obviously, lack affordability would long is as

to and will So, our that in us, the about hearing and terms ease about of industry federal, trying industry the we in issues of from state peers local what continue educate electorate. work are they governments the the some associations -- both

to to efforts going understand it's people make So, sure take continued it. that

that's for this what be might and XXXX go necessarily at happen wouldn't of terms to us there. in point, appropriate In purely speculative

Jamie Feldman

with -- new of million out your Is heard I sounds $XXX got to like it if you take those unsecured. replace the million then, and I there you've a And we'll discussion mean, $XXX probably price plan unsecured, of point some see right, a rates on than here I sources million, at may where maybe other mean, price you new comment think have is and you point what today on pricing there volatility of it or or pricing. do $XXX about to head? think a which

Kevin O’Shea

plan, -- And today for debt a is Yes. source likely raising through about of always the together $XXX view most source your issuance reflects a of I capital be at capital budget what some to have when how address level, what's that the unsecured going mean I today efficient most you uses I cost-effective debate of are think that million those guess, Jamie, that you've is us. to put additional uses. then and primarily capital we the the have and

but choices unattractively our and there Certainly, could today. common equity priced sources It's basically, other relatively be straightforward. sales common or equity, is might asset are that arise,

a we've potential discussed, But liquidity as and market. in just there's Asset less pricing that source. sales around could be transparency

unsecured we up with choice likely So, our expected choice. that's why ended as

time abundant liquidity some figure that got that's room that credit time to what is out so, And nothing drawn and us that and and capital room we've of gives potentially -- out, to line source of right abundant our we've on the billion maturity out. got to take figure with $X.XX

Jamie Feldman

sense. how early you makes That $XXX can Okay. out And million? take then the

Kevin O’Shea

in consists in $XXX of debt, million the it million $XXX December. Well, $XXX is million then March -- pieces and two of

And so, their payment. bond are prepaid offering, they can't that materially be typically before yield absent some due, maintenance

to part our as $XXX coming in for unsecured So, This any million typical AvalonBay. an $XXX a is have typically it's year. of that, of borrower, million just due debt business given year we

business financing not total particular we that of million. So, the typically $XXX of debt and concern. company, of it's pieces usually part two It's a about have just our

second standpoint kind where part one way our So, March in December. got first from we in regular coming the of year the a and

Operator

in Mr. I'd hand There it questions queue. are remarks. to to for further no closing the Schall like back

Ben Schall

with joining forward person you Thank you. you us right. look we And in coming for Thank the today. visiting over All months. to

Operator

Thank teleconference. today's conclude you your does this gentlemen, and Ladies for participation.

time, disconnect and day. may a at this You have lines your wonderful

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