AvalonBay Communities (AVB) 1 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Jason Reilley	executive
Benjamin Schall	executive
Kevin O'Shea	executive
Sean Breslin	executive
Matthew Birenbaum	executive
James Feldman	analyst
Adam Kramer	analyst
Austin Wurschmidt	analyst
Eric Wolfe	analyst
Steve Sakwa	analyst
John Kim	analyst
Joshua Dennerlein	analyst
Brad Heffern	analyst
Michael Goldsmith	analyst
Richard Anderson	analyst
Alexander Goldfarb	analyst
Linda Yu Tsai	analyst
Haendel St. Juste	analyst

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]

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

operator, Well, Fourth to Communities welcome XXXX thank Earnings you, Quarter Conference AvalonBay and Call.

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

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

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

Benjamin Schall

today Thank Officer. Birenbaum, Sean Operating you, Chief Jason. I'm Breslin, our Officer; by Kevin Chief Investment our our and Matt CFO; O'Shea, joined

We'd in like by to AvalonBay XXXX. delivering exceptional our associates X,XXX for start results thanking

your dedication makes organization. and efforts Thank happen, our commitment as and what culture make purpose and Your us to are it we who are an you.

as up and by internal management ended the brief testament unique revenue to a Through NOI year, on X.X%, a to X.X% last Slide earnings our and increased growth drivers. year, through of recap the for core same-store the shown our As on X, year FFO X.X%. assets, we achieved external grow proactive ability

projects outsized of continue to stabilized completions developments yields our across with outperform growth, X.X%. underway $XXX external of million delivering X For

the operating enhanced where results of are efficiencies. and customers model proud delivering transformation, driving our meaningful particularly We're value to we from

than bottom initiatives million higher operating our almost or X, NOI anticipated. the XX% to $XX incremental XXXX, Slide delivering expectations exceeded which on highlighted was line, million of in annual As $X

remained regions our our $XXX allocation of being during $XXX regions. shifted and nimble from to in seller XXXX, X, in year a which into Slide established capital million, net for acquisitions expansion dispositions to Moving the X redeployed having we million with

$XXX in million quarter initial started X.X%. fourth of development at including starts projected of also million during profitable $XXX the yield year, an the We of new

We in business, to we expertise investment also to million, earnings in book $XXX environment, to we third fortunate our reflecting business be preferred which XXXX, and continue to deliver an structured values. and going set positioned asset are this multifamily business well today's this given proprietary in build XXXX and forward. building today's new of this development construction. made total rates And now for mezzanine our or construction data. commitments underwrite year our We're this we're in loans parties to which and equity and uplift provide live year The

continue we a that peers REITs, tightest spreads sheet summarized all with accretive as of credit as may strong we balance financial set meaningful key it among been XXXX. sheets, X, the a flexibility has as ever balance opportunities the is we experience as strength to arise of on Our Slide Among manage and consider advantage. providing business with during some strong metrics the providing

and our growth as confident superior drive are to focus draw strategic strengths X areas while evolve, foundational These organization our continue Slide a are multiyear an commitment highlights our period. we to areas XXXX. focus recognizing areas upon for over also will

of operating Horizon Horizon million in million, transformation. NOI our operating steps NOI Investor from $XX $XX $XX initiatives come X center we from our and model are At the raised million Day, to our annual our target X. for Front next incremental from and to

focus from of challenging in is our continue they are while of will drive our economics underway, opportunities. attractive we deliver start markets, some type outsized certain The projects growth we our which our typically environment And most for near-term differentiated found on new value and execution shareholders. leadership. of Second, to this in development of ensuring the development construction is

Third, we XX% as a and a shifting Sunbelt, a the X% from of we able basis than in to fundamentals believe target the our the this couple a approach, portfolio the today. transition given in meaningfully can years of we a XX% set cooling have continued were having of of to set at suburbs up regions, more make we multi-year expansion target of portfolio from XX% today of our ago. And attractive

units, this also significant in new investments renovations from dwelling markets. certain of apartment auxiliary We're the or very year, and ADUs, making portfolio accretive the to in ranging creation existing

as to balance scale operational, a development utilizing for to about by for and shareholders. sheet, that are it or balance bear, bring opportunities to follow-up capacity utilize our our sheet we our generate my there both be to our strategic confident Finally, capabilities be comments value us will and

we ahead environment Slide year. slowing the to and As moving this our for expectation baseline assess a economic is year X,

per in past, for growth or Business XXXX the modest with which Economics, very have month. start the Association NABE, we in we forecast positive job National As from consensus XX,XXX of but estimates jobs

such and what the rent. uncertainty approach our is XXXX on Nevertheless, while expensive our now a believe $X,XXX proactively is nimble particularly regions, markets, economy rent-versus-own growth in ballast adjust other should month how demand, buy to muted remain established and as to in as signals it economics where evolves. we This than be demand, ready to to higher is mixed tempers given capital per apartment housing serve factors more based and to

new and environment In factor further supply. deliveries our stock in regions, of expect uncertainty, to new in known we apartment multifamily established X.X% decline existing one expect In to of figure of is an this XXXX. X.X% XXXX

a continue in Sunbelt, the which are of this to this generally will the project. in in these it and new is years development have XXXX, for level expected averages And these dynamic quite at markets. the twice supply a Importantly, that elevated simply historical with least the coastal to contrast through is with dynamics figures a line supply. stabilize Sunbelt of X-plus function reality complete takes supply And

And expect we of assess outlook and limited well our regions, XXXX, given demand to growth. a as stable supply relatively but be in we year established positioned, the so forecasting slower are

now blocks of the turn I'll overview Kevin growth. year the it of provide an guidance and to to our building for earnings

Kevin O'Shea

operating Ben. Thanks, outlook our and XXXX. for we XX, Slide financial On provide

guidance, in of transaction capital core activity communities, as lease-up and and year, the growth For midpoint the by by same-store offset overhead by as the markets well slightly impact higher our stabilizing expect using portfolio we of driven per share by X.X% FFO costs. partially

X.XX% and expect same-store portfolio, XXXX, consisting of in for maturities. spend $X.X our and In investment we capital total the residential debt growth year. our we NOI for And in capital uses billion anticipate growth billion of of $XXX plan, X.X% of in revenue $X.X million

capital can dividends support development future be debt debt this AX sources, our today balance unsecured we XX-year sheet in to we growth. in attractively For later new and in nearly million the and source that on at we unsecured thanks rating, earnings X% and A- million free our credit priced our invest expect year. this range to yielding to currently in flow from enjoy benefit strength a after $XXX around mid-X debt capital, $XXX projected cash will assume regard, issued In we to which

We XXXX, million. of of on of cash also $XXX $XXX project year-end about year the drawing million at unrestricted cash end upon in in hand $XXX this million unrestricted projected at resulting the

we Slide On of expected XX, core illustrate our share. in X.X% per the growth components FFO

growth of our and $X.XX development lease-up from growth another from and share redevelopment And We our in earnings communities expect per NOI to other we stabilized in per $X.XX growth come earnings portfolios. expect undergoing share portfolios. same-store

these this impact and activity. settlement is from XXXX of to our XXXX a $X.XX forward sources turn lower the a to offsetting to ]. And balances in early discuss income capital impact $X.XX Sean impact equity from due share estimate business. between April that count having our Partially interest cash from over summary within is growth Included higher transaction increased it years our of markets operating $X.XX I'll to [ with of outlook, our and in the

Sean Breslin

Thanks, Kevin. All right.

will XXXX. XX. same-store Three Turning drivers in support Slide to revenue growth primary

roll lease rate incremental rent where down XXXX, it X%, at XX the QX approximately trends, points throughout end historical of from the basis embedded plus of with growth was growth which First, year. is consistent

contribution a improvement XX roughly in And increase Second, residents operating an XX% in X.X% the other bad outsized debt in X.X% expected is of initiatives. about our derived from XX points point which to projected basis from XXXX an XXXX. third, basis revenue, from rental underlying from in

year-over-year million a modest net by expected The reduction be point and from economic headwind relief from X drivers rent and offset cumulative projected growth drag is occupancy. the $X to those XX basis in from concessions a primary partially

more provide from than a historical point improvement double still underlying where XXXX, is rate. roughly we're more bad To reflects year-over-year, at debt which detail an forecast little a residents, our trends underlying of debt rate on expecting X.X% XX bad year-end pre-COVID our basis

XX. Slide to Moving

growth established regions, regions. And as to of regions, more fundamentals on of be West compared a East our lower established demand/supply expect double expect the than Coast. established new in in level We function the the within substantially expansion supply primarily is revenue to which that better regions we our of our Coast the

the to debt result expected bad is a same-store revenue produce strongest a primarily of California substantial improvement basis. which on underlying is growth, year-over-year Southern in the

proud to Transitioning NOI. which over transformation. the focus operating and of in approximately to last tremendously Slide million of incremental model couple $XX our We're years, efforts team's have produced address XX our

to our XXXX. expect portfolio recognize We consolidated benefit million during $X another roughly in

Internet deployments include drivers key access AvalonConnect, XXXX WiFi in bulk along managed with smart and our features. The

our shift staffing an centralized supported a expect incremental by neighborhood organizational we benefit addition, reflects In teams. new which from model, to

plans for residents specific deliver years focus others our for to for to additional continue come. these and value shareholders have we and will While areas in XXXX, associates,

XX Slide same-store our to outlook. operating to address Turning expense

basis roughly New primarily XXX XXX points City. in expect points of growth, basis XX and expense initiatives tax from programs the operating the of expiration profitable roughly points in York We basis another from abatement various organic approximately portfolio,

offset to initiatives, As from our the by increase payroll. earlier, it XXX in partially basis basis offering, points driven XXX reductions by point is AvalonConnect I which mentioned relates our

million, will the in portfolio AvalonConnect deployment more noted offering, pressure during expense period. which than the by of $XX I've As ultimately will enhance growth the deployment NOI our past,

by We XXXX. the as end into expect to fully we of will diminish impact deployed operating materially so XXXX, the move be expense

to activity. Matt I'll over now our it capital allocation So to turn address Matt?

Matthew Birenbaum

Great. Thanks, Sean.

Turning all our XX. planning various XXXX. activity of investment year another of We're platforms Slide in across accretive to

discussed we million further our grow rates SIP Investor the that range; bit portfolio existing our We a see we business expect at XX%. average where weighted new yields developments, at mid-X% originations in another in on investments opportunity our activity a on new increase to excess million in million investment our of at $XXX by to expand break with X and ground representing to $XX our of XX%; of Day, $XXX roughly roughly yield

investment the year still as are do the low, gradual increase market, progresses. expect market a In transactions activity participants sales but in levels most

is regions. to our Our redeploying our capital of plan selling market assets as in strategy, that portfolio management regions and access expansion into in acquisitions this established part our

to the neutral bases, activity be yields. and volume at and this buying expect We and amounts return selling both on equivalent equal roughly

to may be As they replacement in Ben operating present past our recent have regions mentioned, assets might more opportunity of to targeted expansion the look this activity short-term than in 'XX cost. the challenges favorable dynamics significantly some below in as been acquire the trading

the Of investment is the response to activities in potential all are pivot highly macro adjust evolves. of changes dynamic, and prepared the to year market in we plan as our course, our environment for and

are $XXX development existing had a translating current results above generated to in our underway. per or underwriting, into QX that basis point our leasing lease-ups. details The development rents impressive to active communities X.X% month Turning yield. the by XX our continue initial X in XX is Slide be which that delivering increase

not do these are velocity we rents current the developments to significant break leasing as or and rents completion of we general, rents market the in reminder, on project. actual quote our trend a ground, achieve time until of we the close update we As

million there these We specific is throughout rent market years, certainly XXXX. roughly X% lift on rents the prior some would open of at $XXX didn't of provide about to as this of we While much we lease-ups to come XX to XXXX as market expect when grow at are market in course increase basis the still rents mark increased where on which as points the in yield with deals today based estimate communities, well. those

turn I'll that, it things with up. over to And Ben wrap to

Benjamin Schall

a expect our relatively execution XXXX. in slower were and well Matt. pleased to to provides Thanks, our of We with positioned XXXX XX in Slide key continue takeaways. in be very growth year

against including our to We the environment that model. leading where capital making areas, front, as we will strategic from also execute will may the year, to while are and opportunities the we take focus we can benefits balance our adjusting sheet and continue being accretive evolve it utilize investments this to lookout operating and harvesting transformation the upon unique And our of in tangible opportunities of remain the nimble, advantage unfolds capabilities. on our present themselves draw strategic ready on

the the turn to open operator to for And I'll with that, it line questions.

Operator

line with [Operator Instructions] of Fargo. question comes Jamie the Feldman Wells Our first from

James Feldman

Great.

if could about each half think the year, your first I broken these outlook of in then you what blended might was I'd these talk back regions by talk So online. given supply through how to different like rent you be just and pace in Slide XX, you And of like coming us back hoping of regions. looks the or the half out could versus go to it the

Sean Breslin

portfolio why to is That's we data. of sort give lot do the talk Yes, individual the don't you regions. for I a all blended that rent about expect We we that Jamie, Sean. the want this so change might can the offline. -- of year I across

and renewals second in move-ins But at stronger the XXXX, where roughly relates change, change, the in half, of rent roughly XXXX, first you half X% the flat. rent broader the achieved versus year. reflect we change portion, portion would first good if back the that deliver in is expectation half portfolio, think And to it new X.X% of a at our rent was as essentially of which terms to X% to of

assuming rent all economic do to the consistent in first being with expect environment is the to second else that, we acceleration in So see equal the half, half relative change, XXXX some of expectations. our obviously,

James Feldman

we your do and And Okay. there's variability? do year-end opportunity But revenue of the the the just expense to your maybe Where detailed those the think rolls around? do about mean, I Where appreciate buckets, could side on you spending to most a pull you think where you you most side. then each think push to have little maybe time more? back the buildup you by -- as

Sean Breslin

Yes. assumptions. the macroeconomic Ben revenue them And in on of referred a to significant question. is obviously, pieces No, the Taking good driver side, X our environment. the and we provided some

the X.X So current we compared as to the a given being for were are close expecting XXX,XXX. slowdown, 'XX million that XXXX in to expectation jobs roughly produced

positioned we're control, our things So we're the extent accelerate. but that's our obviously, outside we well given things also positioned portfolio well think And defensively, deteriorate. if somewhat to

improvement in say what tailwind. see outside more substantial a would certainly be So I'd of that, a bad we is would debt

sort are bit court primarily a flattened that from several of residents months, things free the behind and debt out Over advice residents happening legal of system, what's as been of result has in sort. that rate last the getting bad a

rents in harder improvement we're So the just court region, New we or view parts the cetera, benefit York in us significant of able environment. push that in greater started the would places Mid-Atlantic, macroeconomic to certainly whether of the outside like to a give and et the see softer system Greater

utilities, pretty good comes X/X number portion really where embedded it have. And that's which plan. it, of what our by, year-over-year expected terms AvalonConnect the we is expense on offering driven On our through. a We're a side, program. increase is in There's baked of is of about one,

would we thought it where be. expect to We that be

areas. related a different extent certainly different is pilots, out. during of the taxes, would the but to the that portfolio Property obviously of or the to assessments ins come look of in it in rest there's outs and The throughout at help kind portion levels, that us rates year,

significant line shift, a I that with line to item there shifts benefits around things wouldn't modest payroll and so move like are And expect might item that. but from

Operator

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

Adam Kramer

and would terms to community XXXX? in cause the of to back pull maybe push of kind kind of high of that drive to what that just some maybe you wondering and the $XXX of What development starts, million Just puts takes, out end?

And what's the of year? you during if year, place the kind just kind timing of those think about of the view course when on over of they in the take terms may starts generally

Matthew Birenbaum

Sure, Adam, this Matt. is

starts one. starts any or of across think it to -- the is pace relates have QX, maybe more year, it that maybe development in back the I half-loaded. we As don't

of develops the that the how across see year. course we'll So

really the various buyout projects. It is of permits, based on though, idiosyncratic, timing,

that or So economics. ramp changes down things is deal up might to cause it the the just to really

If us could rents hard where more planning we're conversely, good accelerate or forward if deal, than either to or deals push and us in that or we the to cause start or any out. some submarket, either start a particular expect surprise pull bad, the degrade some further more, quickly deals costs to

Benjamin Schall

Yes, Adam. conversations. risk. market for rates, underlying our the of from That's This remain focused very value reiterate create, development to need spread is we Ben, we compensated prior key appropriately right? some development and just and themes be between cap on we our And yields the the to

the source the obviously, then of the cost raising the capital, we're And component, other it the both of capital. and

around, higher-level the are we deal and that there's then to. that specifics referred those triangulate the elements So Matt

Adam Kramer

Coast change, individually. January kind I a of at of think, specifically, just number, then general split versus high would trends that Sunbelt. kind if new through kind markets to want down effective of East each And Maybe new guess, rent helpful. be rent level, West breaking just your you I of I on like just don't January lease know for go if the -- versus Great. kind you Maybe of the term Coast asking not could

Sean Breslin

Coast, So sort XX region don't I the of expansion and points, The West Yes. to on East coast? basis by trending flat. in give it we're Coast essentially the modestly the Why range. was X% is about positive, you low

Operator

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

Austin Wurschmidt

the growth Sean, established breakout same-store between expansion guidance and appreciate the revenue markets.

delta rate supply if X on debt that, another? I more X of some projections. one other do primarily just remove up you those the bad of so you between the some and improvement, referenced that the stack think how regions lease versus But guess driving I focus that's initiatives growth piece, those

Sean Breslin

Yes. I reflects back probably to I best our is portfolio the there. at established showed revenue And slide the look mean, I way that decomposition regions more XX% than we point. from refer at would to is this say you coming that it mean, first, what I the the

we But in which definitely demand/supply we of think And I'd reflected in recently. say our broader appropriately just appropriately. terms weaker think regions, that is of out modeled one we've how much it's I we We has a The job Northern that expect California, question think we've environment better performance fundamentals, the of for generally unfolds. us been question that established just speaking. have

bad But in benefiting look that nearly at the see not Southern in as much if happening you terms kind of It slide, what's debt is contribution. you California can California. Northern as of

of par, it's So our little I more with on apples-to-apples regions. think a expansion reflective

demand/supply Northern Cal. better of a established around overall, question bit in So regions, much little a the maybe

Austin Wurschmidt

of into continue shifting preferred versus of the suburban And urban kind there. strategic the focused more focus and to investment kind suburban, sort of markets incremental on talk of then you about just a

suburban, of the sort urban for expectation at growth what's for when look those two, you year? versus So rate lease the

Sean Breslin

Yes.

better We was the terms The between in certainly portfolio XXX our about you QX, flat. was growth suburban urban points. urban suburban I it which could tell we portfolio, and out broken essentially basis of out in of saw haven't forecast.

and traditionally breakout East I did as the of out. provide not in well West. in of that sort But January terms as suburban, from we've urban, broken

it before, blended as it X%. was look you If mentioned a at basis, I on

urban/suburban across think kind many really in If than markets, the it's the cases. is more of driver you market-specific

and Long So Northern growth for Island, area, we're growth York Central expecting Jersey. metro really of New example, the Jersey, in in less Westchester, city New out the better

to the growth it's growth expecting Mid-Atlantic, If different. very you challenged better a the suburban and go Maryland. We're district, the Virginia in in Northern

is fortunately, urban much North would Coast, urban a East and don't On pretty Seattle, have is the in say. right Seattle performing lot West I our More side rough better. we now, of but portfolio

in then we're and all I And Area, San down expect the it theme familiar lag, in in Francisco. challenges Bay to the L.A. generally We with think certainly a similar

So go kind to it, you each at by color hopefully but you to through have some look that market gives individually region. I think of

Austin Wurschmidt

medium XXX the, in points see the that think basis decent call moving a fourth in you for quarter Do term? proxy what it, forward is you

Sean Breslin

I at Yes, going wouldn't extrapolate right forward that probably this point.

a year. of lot specific We up it's where expect, necessarily do think for will a suburban XXX good these full regions. better just count it what on kind QX. being based through were these a I markets in said, I basis point of move wouldn't of the you we some hold on point I spread as in But

Austin Wurschmidt

Sounds bit like a factor. of seasonality is a little

Operator

the next from Wolfe Eric comes question Citi. of Our with line

Eric Wolfe

at a for think Day, contribution an might that communities to Investor you anything are development XXXX I in around if versus was annual this just and going that year. kind of more be XXX typical it's you the a up pipeline. year you lease an your contribution gave maybe influencing just points from the there's year earnings be hoping give as basis if And could bigger this contribution estimate just estimate I your of delivered.

Kevin O'Shea

to accretion this you spending development estimate lease-up share an Yes. $X.XX we get growth produces equates that Sure, for which of November. think question and of give line the It's of of last outlined punchline undergoing about and perhaps in Eric. I'll of is growth basis XXX XXX with Investor to give a consistent per you years This points year earnings with ways about and to growth we're we earnings contribution a a about on. XXX Day bit 'XX, couple in take, which from the is at that most or little give development in good the earnings the point basis accretion year, typical earnings to Kevin. time level this of Upfront, one

So before just helpful begin, contextual but which won't a might couple for just broader you, the be maybe it comments I of surprise audience.

do when you a know, you investment our of in sources we primary if as broad capital, look have we even developments uses investment activity, capital. set multiple at First, use capital of have of are and

So a uses attributing as some result, specific capital discrete sources isolate a fungible, a and since is to cash impact specific on earnings to making reasonable capital period-over-period estimates assumptions. basis requires

know, reality years Second, started our X lease-up development X substantially we starts match-fund we start we or those ago, that much that with and projects so ago. when to X billion long-term years sourced capital of as you since the projects, we capital to is X of $X.X under

'XX, So look blended of look in we XXXX to blended cost in raised whole X that, of a $X.X cost over X.X%. and $X.X cost when kind the go X.X% years, of initial and at raised capital billion third, business, a billion you the the blended year, of back we've at -- fund initial at find you'd last initial say, last, X.X% $X.X billion

another $X.X being so isn't that's purposes. well. $XXX to the for this have is look for and pay we be sourced modeling of year So of sort kind as which was to capital, already for leased development you to going this used is and -- But completed relevant your that as X% growth billion reality in fund plan some at in the years cost prior is a forth and lease-up. the year the last roughly of million lease-up that earnings that's capital around of began Obviously, in those capital portion and the up year at

of some of at you translates $X funded XXX look we look call raised profit from $XX.X yield last last yield point just this, billion an year's of development, was view, say economic points a that in so the of $X.X is billion annualized way which on at that of about it a X%. conservatively about -- basis of -- we which around basis this in And of looking X.X% development at is or points billion at, just about annualized at and if currently And as average the lease-up, X equates portion and accretion you which first growth got turn $X.XX you $X.X have cost, with sort the say to core X% earnings FFO. about initial growth, the capital, million of that XXX the into so an to or it, years on you've over spread about

to The underway, of in to earnings lease-up the look that's way. with -- that probably from activity reality using it. applied the kind is And year best that way the started reality is the lease-up feather profitability likely to by this capital last matching the and contribution year. But it at the that we

specific else. little basis, you offline you're looking at that example Happy calendar deck, this out year, bit it for from our looking call to in certainly, But on markets we instead XX our earnings the $X.XX anyone activity of the take or may earnings a headwind a Slide transaction year at capital with longer on year against impact if last be and conversation. you're that

year; is, the SIP the there after subtract the $X.XX to of of activity; last that activity; the with year; $X.XX, can $X.XX the the funding ignore of you I this about But you answer that think income probably lower interest the short say, our attribute associated to of and from $X.XX costs; of refinancing take $XXX million debt $X.XX financing and of that the $X.XX to balance refinancing and of activity. $X.XX and investment ascribe, then investment

that $X.XX capitalized financing $X.XX then in of slide. $X.XX from $X.XX from activity, share drive count, is the you're and $X.XX lower with about refinancing net left costs that costs $X.XX you expense So see there dispo what to and from interest that of

a at from $X.XX growth to what you basis earnings year. points to give So that's one is -- get sense lease-up contribution or XXX activity at that -- way comfort about of this the XXX that the way another of the way can another, you're looking

Eric Wolfe

quick your balance like by a one mean, on going progress, guidance. down Okay. the $XXX on That's guess interest helpful. And your then guidance, your looks is construction just I million. development I based it capitalized like

interest -- balance I'm get to to what year? it like weighted seems just average right your be would cap set But that a spending dividing And is guess to then is taking think rate it? by this little interest way about the going down bit I why if and accelerate that to the that.

Kevin O'Shea

interest by Yes. $X going down rate but capitalized think know look blended right number, $X.XX, don't X.X%. of about the No, at we which is I is I it. a way million And exact to interest the expense rate have interest -- that year-over-year. it's at capitalized

I by we the have it of and dollars. going construction And natural progress. ebb hundred think million a this in couple the -- So flow is is is and of down reality

We have year entering deals construction. than completions this new more

the go, CIP a over time. volatility 'XX. of projects of ready period-over-period nature when even, that over -- And from 'XX And creates of they're the capitalized there's constant, interest little a the it start in So a will oscillate of course little that that's decline just at years. into expense the completely ratable basis don't not calculation, a but bit we we to bit moving

Operator

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

Steve Sakwa

on just clarification. First, a

QX? that about about X%. I XX you moving on X.X%. went like of had Or from Is of is the earn-in kind else QX difference about earn-in strictly an in just September stat? Investor there I think talking you're to the of something for at think a talked And that Day, now an

Sean Breslin

it, much Steve. pretty that's Yes,

sort decelerates of and you happens comes and as first traditionally, then our QX. think in that the X January. and QX If it, other And at it short-term of lot year, premiums growth through land including months you through go of activity QX about a the

Steve Sakwa

one maybe Matt on the development. And Okay. for

$XXX mid-Xs. about the You talked million it in like going the of looks the to about in expansion market. And X/X are be your starts

today? So markets supply you given of sizing sort are facing we're the that expansion of in that the just issues of just many up, how kind

no in And obviously you've growth from benefited also rents, with underwriting basically is slowing. rent conservative increase but

next provide upside if growth couple forward So over does mid-Xs of years? is much I the flat going guess, relatively the rent

Matthew Birenbaum

kind look I've to don't period upside. that XX basis if my is trend. than deliver time, what as because long initial Steve. Yes, over we back XX of tend prepared we in you remarks, our Historically, higher of yields may say, and mentioned there I points to a be underwriting would less are

safety rents the up points when double-digit at XXXX look were XX and some of that's of probably that you they'll last And XX, that's deals more that's why basis leasing spread that them that rates an margin referenced. 'XX, with Ben on there's XXX wind rising because years, point it's their adequate typical. like few basis current in have XX now XX but to XXX points feel economics there XX back this the back, say, that basis to to like we to that year, in of kind why rates in when more XX. today's starting But Now at, we're cap or was

be in plan in two the deals in starts about happens the Carolina. North this of to year we're talking So or X/X regions the expansion the

and one is I think Raleigh-Durham, in area. Charlotte in one the is

so market And in in decline rents rents seen little 'XX. have you bit those -- a markets

there is strong the supply are investments. obviously There's we're there. more long over on today's rents, coming investing So XX-year too, These demand, term. based and

that X.X safety going be say X you would those year, they're we'll if feel to suggest would a margin our after numbers, We be that able that. next I little that leased of up start hit to still get pretty lift. bit confident of But NOI not years, not if for years

Benjamin Schall

this think as to you can year deals projects, Yes. that that, coming reasons, starts reasons. A But we of economic part, financing this make down Steve, definitely I'd cohort for are add about open you and we nice nice in appropriate pocket, look a window out pretty years now. potential from into that have capitalize up of to when can X the pretty an way sense

that well. So to a conservative forecast, we environment, in variables do but tough we're underwriting as said, on based in other mind today's as lot you in there. of And keep

Steve Sakwa

the And weighted, million, just you late the more a deliveries quick in $XXX starts? terms even are think, So that kind maybe clarification. of is of The back 'XX, mostly in 'XX? half

Matthew Birenbaum

That's Yes. Steve. accurate,

Operator

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

John Kim

bit I'm earn-in confused question. little the a on

But that end the is, It's So new within know year. a industry. the that. let growth It's after signed was of that? my to relatively kind you And this of thought what metric revenue really it year the I guess measure. a I can define how you non-GAAP you just that in obviously leases first us this locked earn-in contributes year at and quite on doesn't last moved question

lease rates really didn't growth Your change fourth during the quarter.

you So yes, how that? define questioning just I'm

Sean Breslin

Yes, John.

start for rent year, for is or -- reflects we in that January potential the or month figured I it the to gross potential essentially, gross be slide, just the average when a place the of the to on roll but roll term common the had think it's relative rent XXXX. you specific,

realize from other So accelerates growth your to a roll first the if summer in as not tend result to the not you term portion, but the Steve's the spring, the and we and I X change year premiums peaks where or down come as earlier in response of of to short-term rent burn It like of in unlike a decelerating in months things. in question, substantial all, then so. only rent the mix starts fall off change, term rent mentioned

QX, So any really growth period if that about time. of material during essentially, think in it, you see you occur don't sequentially,

in then as kind months kind might So to or X you of In have how we were an to low like X walk can you're you through the certainly it detail X.X that's about. of closer X up more of you But and X, get last we average closer it's you X if talking to like. Xs. the offline, months, points

John Kim

Yes, absolutely.

way, I'll don't into it define little -- think bit. a offline. delving it's it's same do so the I worth peers that your

Sean Breslin

companies as X.X provide in timing tend spot also information some at of they we provide somewhere it's know and described points that But QX. on We were sort a the the January basis. kind their where on at a of estimate I spot think be to We calls. might basis end they issue. where of

John Kim

you on of that spend ]? Okay. versus expense the capital your and capitalized much including is AvalonConnect initiatives, question being [ My second have on you that. do How

Sean Breslin

associated programs For AvalonConnect specifically, those expense. the essentially XXX% are costs with

Operator

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

Joshua Dennerlein

how on revenue And us how remind color line could through -- the the going kind what expenses this flows you're year? ramp the it's Is assuming? through you the item AvalonConnect same-store to this all of year. Appreciate flow

Sean Breslin

Yes. rental XX fees things revenue Josh, also back the There's to what of other But is And are most to in would you not almost refer contribution do of of of revenue, rental other points slide all I to that related driving it, is increase all AvalonConnect happening. up. increase trash basis on all decomposition. almost the that that revenue it, related it and is other of AvalonConnect. from

Joshua Dennerlein

drops a it on maybe big of quarterly a looks like guess I because you XQ, then uptick it basis kind have and So, off.

to So just cadence? quarterly the figure out like trying

Sean Breslin

we the that okay. Why as think don't we to on at supposed on back level quarter-by-quarter sure. year, lease as I that's to go we apartment leases Yes. the if get you And push through on expirations expire. the mirroring through that, it what up ramp happens for move We'll as call, essentially, about is because

probably think a level. about So how through that's at the way quarter-to-quarter we'll bleed high you

Joshua Dennerlein

Okay.

projections for a helpful. then subcomponents growth That's Okay. like curious -- provide to just for Could breakdown maybe like And that? underlying you R&M. utilities, on due expense your just

Sean Breslin

sort things taxes abatement don't of about some here, my of of categories overall, being go call. a there's the growth substantial Yes, in prepared since is through phaseout why But remarks. sort as the property of think I lot to we're on give high-level tax commentary property to in A driven I expecting mentioned you of programs, by that portion mid-X% year-over-year range. the high-level

of you another market, in in Insurance, we certainly expecting given year what's can if insurance, which are like. double-digit kind growth we happening of the talk about

a AvalonConnect, just in expecting all almost relates We're as range. mentioned. of utilities, up I And to of utilities -- to AvalonConnect. be double-digit related category that is sort again, low it the to As

essentially X%. quite of side, That's merit a to the rate. are growth maybe about XX% couple And are utilities about X%. actually increase payroll. Core of on modest Benefits we've mention of in going are of a payroll up terms others got

picking combined XXX So XXX are basis points, up X payroll reductions. we're basis those points our from but about

low the Xs. out net in will that So

to that somewhat our And note then thing elevated say points office growth only that eviction total the expense really for were that's operations accounting would basis related costs XX really last other legal year. little to XX, unusual I It's of is and category. a

more this who little We process a as expect bit them we to year to be elevated residents. people nonpaying continue are

high-level of helpful. Hopefully, are those sort some comments. are those So

Operator

RBC comes Our Markets. from Capital Heffern with of next line question the Brad

Brad Heffern

kind off about far talk et growth cetera? trough, the trends of how of rent the the just for year has the looked versus you start normal seasonal Can so demand,

Sean Breslin

January Yes. would outlined our mean it's modestly with terms in I much Happy of I Brad. growth, consistent say to take that below. norms relative outlook. pretty one, to we've what And historical for

just rents asking Sort trending of if you up growth January, rate. look lower in in January, say, of compared for as a to at at change pre-COVID slightly asking month the the are this rent years X

Brad Heffern

curious portfolio if it. I growth across in rent you Got blends then And was market know you 'XX? already, underlying but Okay. the the could get for I give assumption the

Sean Breslin

asking the in to expecting of be change growth to be in that portfolio range, roughly X.XX% rent the throughout and We're year average X%. Yes. X.X% sort to rent actual

Operator

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

Michael Goldsmith

is scenario is macro your how X% growth XX,XXX a like the of -- about can it macro get use more to rent forecast? like rent You another seems per from and underlying economy said growth jobs Like if month. the sensitive in much way, XXXX? me growth you GDP better, How

Sean Breslin

it would our about are job different Michael, a occur, assumptions. terms in that it little to and this of is and baseline wage occur? of a it does lot of forecast And depends you things The complex on think when significantly Sean. bit from where is it growth. how does answer A because

we have through it happens will do a September, offers if for August, signed for are July, in see some October but doesn't leases in acceleration it because markets. August, we So us lot out

that helps So happen say you year. as probably for I second if better you XXXX the setup half it a of the would in saw

get we as as we we peak a out play in in macro into leasing an the should XX what significant us better for beyond forecasted, If environment saw acceleration that example the next season. days

to move that remarkable kind still are they days example. just market to as you in, there an remember XX think of I have movements -- before

in are rent it's move And renewal advance. a offers out to I'm they're out, once and it markets, XX days regulatory XX and not sorry, change going those most you're to in standpoint, back But up. from going saying,

Michael Goldsmith

That's based Seattle and it. how current recovery post-COVID And think Got this conditions, regions? Northern in California then on that are just you the do helpful. in we far along

Sean Breslin

basis? I go. good Yes, maybe it in Northern I say context would of the talk to Why rent long don't question. a about still ways California,

have -- That's from pre-COVID peak Francisco San rents that XX%, that's today XX% below of by driven XX% down significant are rents primarily essentially number. which being a levels. roughly sort peak, is that asking We are pretty

doing. people comfortable leaders feel to business a in and/or AI calling And in environment getting what green office wanting I to say, quality an to Francisco place the while are seeing where a the of people with, long and in what would say with of of of migrate able office is San think the happening leaders, ways some be the example, there's of built city to as I'll comfortable, that shoots to I back terms kind go terms what's people sort in they're we're

of So I'd issues, is fair things crime these there bit time about of sort. long quality takes to of it that you're a life How talking there. play a out? things lag say issues, when think I take

don't is a necessarily type quarter of So of issue. this couple think I

is depending actually to a will way. of of this several direction a us political I think the meaningful in sort in quarters on more see the what trend for happens right

South than right about more The positioned. our market. is downtown, bifurcated in think peak XXXX, only are suburban, at about Cap Francisco Seattle more a issues I in the it's much core because Seattle. supply quality of et you're you from much cetera, urban very us if are whether Union, play being the Seattle, levels, San life like assets in delivered you're the challenged compound more amount but but think of relates Hill, was to in are it in I for things In and issue a delivered of not that pre-COVID a Seattle, that have X% terms as 'XX it of levels there versus side, of That's North couple up is of of East rent mentioned also to mainly meaningful well Seattle. will there, which majority where

Operator

next from Our with question Wedbush. the line Richard Anderson comes of

Richard Anderson

question, of open-ended but Sort get if an you. a can of you see response out

debacle Bank, loan New had York -- terms of problem them had part and losses yesterday its Bank whatnot. of both former as Community Signature in of their multifamily

regulated problem. rent and between distinguish market to what's rent had regulators we but causing the think the I rate -- really still and

anything growth are curious happening But you're operating there opportunities this the sort new you business of as you. in are situation? a creates banking your seeing about kind we concerned result ground a I'm of on for of perhaps if anything be view, lending all and But from from point this lines neighboring the that perspective, of disruptions should that of behaviors sort along just seeing operating distressed perspective? Are bad assets this,

Benjamin Schall

not potential are wave in folks. significant There the seeing by we maturities Rich, of that's system. obviously the being distress is highlighted

extend agree in to in put and out up assets around, in spending our at equity part, For capital. the We're time seeing lenders most markets we're least loans. and more and that we're seeing the step

Now do providers equity that all to debt providers are and that. able

But potential we're dislocation. So necessarily not enough that some does the seeing for create size.

last players at not similar don't I generally but Operationally, types know, this to look to it at decade, flowing is to a players. cycle, capital all to take of homogeneous. over, I'd say all of take cost you world ready be and types we're back flowing preparing advantage of would being to seeing Capital point. of is I theme last this is the it

that going scale. opportunities there sophisticated in less element we advantage less And so are or an players by take thinking we about positioning players, how think operated as about assets step And forward, is of for with being bring bear. both to end of a out places sheet of and opportunity thinking of we strategic our bring we're about the to the as kind on where capabilities set our can balance theme bear combination there, it's I'll

One, internal spent those also capabilities transformation, we're our growth. growth, but a drive it on external model it's operational bringing our time And of got and X us impacts. lot operating we've to helps

Richard Anderson

Great. color. Great

question for Second me.

expansion of we and know the you're in positive still Xx your all established your yet, markets. amount revenue supply the And in regions. mentioned You predicting Sunbelt growth versus

about And a rent I Relatively the I was is And say. that it a supply. said in even in the next the -- maybe starts resilient the on greater thinking, despite today? sort well, not impact the you perspective builds it that nonetheless, that picture wrong. year. flat, from Sunbelt got itself January as Sunbelt XXXX worse Is and to negative. the or kind dollars versus could look Is degree resilient, to it? supply of at think new think revenue good lease be year this you But are should way to materially I a growth way Sunbelt Maybe sounds of

Sean Breslin

broadly? Why parse regions don't Rich, expansion Sunbelt flat. Sean. blended we is change portfolio Yes, that is our for the January of this What kind essentially conversation in the rent into I our versus indicated more is

to renewals, were to what you parse between about sort If negative XXX would low move-ins compared the of that down as mid-X% you in are regions, move-ins renewals. see to is and that basis points, new -- expansion between yes,

a Denver, of supply underwrote the of that supply markets. impact the the couple But in own X supply that a end. What south tell a market and we in across suffering, most as much suburban our are pain of opposed we and I There great distributed at fair coming, there's it as that to, assets the seeing acquired environment, portfolio assets we knew where the and of would pain years that we compared more of driven is currently the sort in to that's primarily core, long-term you of given amount where broadly the some time significant way. We're that is of sort neighborhood. love ago say, volume Charlotte by urban suffering

kind got a So of our really you lot portfolio, of assets.

playing established region have it certainly the think does happens terms that and into thing and the when XXXX rent get environment to have about first more negative by in much in down typically You are about occupancy. people that to in the revenue NOI, is look really change you through it. occupancy Sunbelt. more what significant but a is region more I you much What our the understand starting and -- happen in in leg Sunbelt broadly say the when Sunbelt, competitive regions to though, would to weaker saw of both We

the their starts try as better last expire. are roll heavier people would you to started That marking to occupy XXXX expect and of continue much to and units here in translating to in because see where rent few leases what rents That's discounting that than as those terms through those we've some months is none.

So revenue being else both NOI XXXX. the equal, most impact significant likely would and on be, all

those market As that's rent the roll view. you to most all rent, lower be roll that pronounced we're probably leases the our to see would through going impact

Operator

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

Alexander Goldfarb

questions. Two

of First, maybe continuing Rich's questioning. line just on with

product, most of is I your like looks it suburban. Sunbelt, the to more think, look guys you As

seems So you assess of at in Or mean urban that the we by is you really looking that Sunbelt I the the And that issues the same markets, opportunities only looking -- as it are basically, is you that just markets in suburban? what at expansion number a are have urban? may also recreation it will. and have closer development be people right seems in lifestyle, whereas don't in need more if issues, quality cetera, life Avalon's to suburbs, to model cities, coastal or to necessarily et for urban the the of and live office you there sort next fit meaning the "easier"

shaping strategy you're of curious your Sunbelt of suburban? sort versus just how So out urban

Matthew Birenbaum

is less I to on acquisition with very and which efforts on our market tend Sure. you access Alex, can not we we the Matt. the acquisitions. We're submarkets. but suburban development that's supply very priced are focused really would that access product that through submarkets, and/or top at focused because it's of suburban point price generally through can't we a on agree new have --

higher have that property also high-rise thing bit least And that it's these of And some markets product with that say, where operating assets. don't And have little kind operating simpler on lower helps operate. taxes garden at same you therefore, counteract one and focused of to a product, overhang are because cost in, is also, you the margins. garden we're

whole of far are you assets markets got tending in own the So regions, favor are they we've and as those when so submarkets. we look we expansion outperforming I And because suburban the at to think portfolios of And that exceptions, a Charlotte, that we in the the actually the we've that of is far expansion mentioned the got bought Sean submarkets -- the bigger only are south the end those so assets one regions. own. but urban almost which far maybe that's so we've

Alexander Goldfarb

Okay. And in quarter, looks the pipeline the but like the in that it for $X question are second guys deals is, is projects X the aggregate, nothing million off you wrote that in development changed fourth underway. --

what you sounds little a in color more just they color may like and where around maybe to but caused bit maybe were deals located? their So infancy, scotch just -- been really these these some deals it have on

Matthew Birenbaum

just cap we've general. to have been values that's have have changes asset the we adapting talking pipeline elevated write-offs mean I think and the of increased. rates fact have economic did about we 'XX reflect Alex. I the in in in been our Sure, that dropped a as Yes. as And reflection realities

deals. we're really our risk management capitalized has company, being to across XX. a XX-year very pursuit one a focused management. in generally of as one the our costs close our over multiple been profitably We able history on to actually every And risk cycles on keys eye develop of keep public So us

to getting Actually, first past it this was project was of Denver. kind one quarter, back write-offs there urban point. your actually, in in The Denver,

see The a of in that And wasn't have those case. deal number make path the changed sense. does we've to cases, California. those get we just a many a didn't in had was are that path recut a cases, that to other deal In one the where revised and particular -- the deal economics to necessarily we public-private sufficiently able a

let had to we go. So those

land step cost. book back a million, if have take $XX But million of our at rights, another total we have just I sheet that development would and also capitalized here the on big we in $XXX pursuit balance of you look currently

investment, So and favorably both with that's in And which a million of controlling build total. other think that pursuit about space. private leverage pretty players lot strong we're to on compares units that the opportunity a $XXX is I XX,XXX capital -- public in to and

lot And underwater. going were that we've look forward, the that's sits I'd -- it's of it. today. gotten through of we And our a kind say where it we deals feel when pretty So that at good pipeline about

Operator

from [Operator comes Instructions] line the question with Tsai of Jefferies. Linda next And our

Linda Yu Tsai

negative And With new you're how turn at rent positive X.X%, ending negative would if growth in more January it what that point at trend? much 'XX flat? might

Sean Breslin

growth Yes. this the start seasonally, In rents rent summer. pick up. into January, to would Good is typically is growth What -- as you asking question. accelerates I tell spring you -- move the rent through and

would and things low So year from typically, what of of you would here. January December, see improve the is of this would point kind be then sort the

the ] year. getting we're about talking for mentioned I [ certainly, flat basically So

got And come we've QX, not improve, to as this to where go kind continue of back So down again, to several will out. uncommon in here get it slightly which see environment. we it negative probably months then you flatten is an would

So you as positive to start get see numbers into sort and you of QX. QX

Linda Yu Tsai

with NOI, you like on [ going NOI impact costs of want [ to would growth? FF for ] And away AvalonConnect coming associated benefit that much FF then the that 'XX ] revenues isolate and how online, if

Sean Breslin

remarks. Yes. We're XXXX indicate for this was as impact prepared in revenue relates to to point. at 'XX my the on it not comments in it relates and providing what my did OpEx any it as guidance I

Operator

line the of question And St. comes from our next Haendel

Mizuho with Juste Securities.

Haendel St. Juste

Two questions for me.

well concessions a where expectation you in San Fran, you're seeing on Fran. Can level have markets? for and more seems is offering blended the what's those comments maybe still some on relative San part East Bellevue color exposure you what as follow-up markets pricing your competitors those rent as you're are while pretty offer of year invasive Seattle. in in First demand side over X like earlier And on this your into the creeping Seattle outline is is It

Sean Breslin

Yes, this Haendel, is Sean.

for you level trend that's haven't data, the market give I We provided detail helpful. But can XXXX. if some recent

and which roughly rent blended was X.X XXXX down change overall, QX for Northern essentially X.X%, renewals. was new So California on move-ins down X on positive

Seattle, new And about were XXX XXX The X of renewals X about move-ins [ blended down down was basis on on -- X basis and I'm terms ] ] points. move-ins new points. In were that. actually, points up basis was X It renewals. misquoted sorry, [ I XXX plus

we relates say in what compared And portfolio it that. Northern are what the has more recently, Seattle kind impact to submarkets a I work of XXXX been side more in is as so to coming in East back our we California positive. I to started as given to which mentioned earlier. in having And in we and on see Microsoft Seattle, downtown, the an not pickup suburban for market optimistic Amazon, particular, expect Northeast, People in would the Seattle reasons again, for

Haendel St. Juste

the supply on Bellevue any concessions? color Any of color in and impact on the

Sean Breslin

Yes.

pretty a well. has downtown as compared the softer actually terms our in it to been have and Redmond. little Bellevue we I Bellevue. a Bellevue holding portfolio, have of supply, as of been think End, portfolio core also then has with mean we bit in North Redmond In most quite supply up of actually

Bay relates it lease-up be in came QX, concessions in overall submarket the seen, Seattle. a the months that's free. XX% we've and/or In to portfolio maybe similar. core pretty end say, concessions experienced But competitors. Seattle more X and X it of in combination urban and discussion. I'd bit are we that's the And X months in And assets what that high us California I the competitive Northern California, tell but January most the is skewed would tapered the you submarket really is Area, submarkets QX today little Seattle to close from relative can to as than for really mostly across Northern to more by is in a

it So to submarket of kind really by see. is what assessment you as submarket

Haendel St. Juste

and on and with between cap overall Got do it. -- potential the rate transaction characterize hopeful late conversation distinction curious, And your coastal some with and I'm how you of the their expectations market. your speaking sellers one, just Sunbelt. IRR last

I was wide half the to drive of there year bid-ask would sticking rates this with as and is week waiting well. fairly rates. cap hoping still by in be some sell this that to lower a your and And guns at to National seems lower interest -- Multihousing -- spread back

coastal of and expectations rate on kind going, how any conversations curious those versus IRR So color cap are Sunbelt?

Matthew Birenbaum

Sure. there agree, have market we as are have-not nots. it for are I rate, It's the And can significant describe would to many the assets. category lots positive would and rate get to cap arbitrage. and still of north haves Matt. a -- only mean bid-ask spread tend I There's transact Yes. of there's that the still assets into because going pull is of the if significantly pretty those debt buyer

markets of still much the out-of-favor of versus it's plenty And There's secondary, if of it so for in that Sunbelt primary And interest know would The terms markets coastal be some That so be in be decline. because about trading, tertiary tertiary money starting least anyway is would what markets. to And kind some seems the is hearing to as are don't is markets there's that underwriting submarkets. Sunbelt distinction. sure. debate there I get is versus certain that some what Xs. cap we're rate the obviously, anxious at to going. markets, in NOI year X that now And has assets in is

it So as a makes that well. little tricky

transactions But I X But That's pretty considered would big highly at somewhere signed going desirable. that for are the to only see between again, to and here range. start up get X.X. next you're a in maybe rates months expect some cap X assets to X

Operator

I'll the remarks. for question-and-answer turn Ben to of And session. end we now have closing reached our the back call over Schall

Benjamin Schall

you, us forward the connecting months. with for and to thank joining you coming Well, over Great. look we today, everyone,

Operator

does your conclude conference. for today's you Thank participation. This

time. at You your lines this disconnect may

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