Apartment Investment and Management (AIV) 3 Aug 182018 Q2 Earnings call transcript

Company Profile

Participants

Lisa Cohn	EVP, General Counsel & Secretary
Terry Considine	Chairman & CEO
Keith Kimmel	EVP, Property Operations
Wesley Powell	EVP, Redevelopment
John Bezzant	CIO & EVP
Paul Beldin	EVP & CFO
Patti Shwayder	SVP, Government Relations & Communications
Juan Sanabria	Bank of America Merrill Lynch
Austin Wurschmidt	KeyBanc Capital Markets
Nicholas Joseph	Citigroup
Robert Stevenson	Janney Montgomery Scott
Richard Anderson	Mizuho Securities
Dennis McGill	Zelman & Associates
John Pawlowski	Green Street Advisors
Omotayo Okusanya	Jefferies
John Kim	BMO Capital Markets

Call transcript

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Operator

Good day, and welcome to the Aimco Second Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Lisa Cohn, Executive Vice President and General Counsel. Please go ahead.

Lisa Cohn

Thank you, and good day.

the including we results. projections call, on are conference judgment, management's related this forward-looking make statements based During to XXXX statements found certain of to are uncertainties, These description a risks which our in and be SEC filings. can subject what materially may discussed be from results today. may Actual differ

release We will and information CFO. GAAP comparable CEO; President, earnings Terry Property measures, in come Prepared Vice question-and-answer our follow the measures A the and our I'll in supplemental Vice non-GAAP certain is Operations; website. such Redevelopment, of FFO. charge Officer; John part and full most AFFO also Bezzant, our to on session turn to will Keith defined are of over the discuss Kimmel, remarks. the Executive that remarks call of Terry These from and charge Chief Considine. Chairman prepared financial Aimco's as Executive published are our reconciled Wes in today now Beldin, Powell, Terry? Investment President, Considine, Paul

Terry Considine

you, to is up. our Thank XX good above operations, good occupancy quarter. was you property retention Aimco in store, interest same points had basis of morning of to Business and reaching Aimco. XX%. In all and for to your year-over-year call. another customer you revenue this about solid up on X/X due In which Thank Lisa, portfolio, is was XX.X%

to creating X/X satisfaction. and and portfolio, Their on operating highly margin meeting exceeding In on We and phase five profitable, of beginning we've to asset been redevelopment accretive have Keith of increase line past business our not remaining paired rate his and underwriting. the to budget net track earnings management, focus of disciplined the short-term In to be projects focus with leasing dollar net by portfolio a his In long-term occupancy on also This but were As good, laser and approaching plan income net our remarkable asset team on focusing of Wes measured via value years. trades per our or and capital creation average on on for current rather now continue which drove team has spending kept particularly adding our and XX%. redevelopment, the value. selection time, cash Anschutz asset newly that acquired Medical over at on allocation includes redevelopment properties, XX% a customer the we profitability margin the net as share. the free every next $X.XX flow Campus. value continue value to invested

you may of recall Affordable to Some XXXX in business the our over time. exit decision

do. by last we'd the assets. what of done we we week's management Bezzant said Point business and value Hunters our model and Stanfield, portfolio Aimco's John With extract full sale communities, just and the asset have led for Lynn Simplify Affordable

operating seven our price businesses, greater and of than same we by the that providing unencumbered elements while geography of doing to we all home straight. for XX%. billion Along opportunities per and billion by in and we time, consistently properties, way, while X are built Substantially arise. $XX. the also growth properties sales We workplaces as have all executed return. more other internal maintaining value portfolio one cash the top years, majority than and reinvested $X.X to increased Since approximately more net worth this, in margin We a average to quality our rates $X.X higher expected continuing a years flow of business diversified doubled named point. apartment properties income than monthly share Over to sold the Colorado with may net a plan. the have asset of And improving the $X,XXX pool of a access reduced doubled billion we by higher leverage free proceeds and more revenue rent liquidity $X of per month

forward, to better work better. day more get Going the of every and same we and expect

successes thanks both to great our many for Aimco promising Denver prospects, and in across I these here country. For offer teammates, the and my

call for worked Head You've Thank Keith I'd you. And much. to achieved and hard on turn Kimmel, more quarter, Keith? like Operations. Property the of now, detailed report a second to the over

Keith Kimmel

with X.X% quarter pleased a purposeful that the our of is a to XX second of we basis quarter. the better This report XXXX. for We we quarter driving same-store Thanks, finished a operations, at strategy, average than Terry. up strengths. second had solid in occupancy, XX.X% I'm quarter, points improved key result operational and in had second revenues daily the occupancy

to Residents than customer provide of better live highly stars the us X X.XX XXth service. satisfied for quarter continue gave We consecutive X These customers significantly longer. exceptional us out stars. with with

better turnover points of Additionally, basis the significant quarter XX% from led apartment has for A And before quarter, apartments of In our last XXX XX% XX.X% focus preleasing leased the were nearly previous improvement XXXX. finally, the out. resident June, we're low moved our on to second June. than a more selection homes. resident

Moving in up up adjustment which, points operating and revenue X.X% declining insurance income. Controllable to that repair operating X.X% as continue maintenance recur. in growth our communities. on our X.X% offset were did growth with from of and expenses we is basis labor growth Expenses XXXX due invest led to were increased net combination to X.X%, to not of by XX revenue. The expense reserves a costs, X.X% costs

X.X%. the same-store new lease most We saw Looking up leases X.X%. with Seattle Atlanta. were Bay to X% solid up in at rates blended rents of new lease of pressure X% lease and rates rates increases Renewal Miami, San new had and and X.X% leases Diego in which on in transacted quarter, Area the the were

to revenue quarter second same-store the Turning growth.

Boston, representing revenue San the half includes and for than This performers, Diego, X% more Area, top Bay portfolio, quarter. our had Denver of over Our same-store Los Angeles. increases the

X% revenue Washington, to and X% had performance, were of growth Atlanta Chicago, Miami, solid D.C. Our which

New represent of markets less in and to the a same-store negative X% York, revenue. growth Seattle quarter for all total, than Philadelphia these were flat revenue and our

portfolio continues to The our with highly nonsame-store line Sterling with is Philadelphia, plan. in rates substantial be In strong. Our occupied

first while three in fourth XXX than Park of homes and construction of of The about is occupied, more moved are all XX% reached final the occupancy underway, XX% towers schedule. our already ahead and tower and preleased XX% Towne still we've of residents,

progress new this Aimco Turning teammates transition of have our who We're navigated the Philadelphia, pleased team new to to acquisitions. communities thanks X successfully. members in veteran both our with and

our In occupancy be encouraged new to which line the we underwriting. occupied have As in continued excess with rates. today for same-store results, we performance achieved start the Washington, XX%. Average in D.C., at above and rates plan a Bent third look occupancy we by as Tree, occupancy at to And and we with daily the quarter new rents daily XX% of solid average lease July see July with strong lease is continuation underwriting. of was

X.X%. rates up X.X% and Renewals lease X.X%. were were up New rates lease blended up

Executive of in increases. Finally, call President and to to turn August in success, teams commitment September, with Wes? with and X% down the field went the our X% Redevelopment, Aimco's I'll Wes our for Vice here your Denver And renewal over to Powell, thanks great offers to

Wesley Powell

you, Thank Keith.

been actively inventory be our As some redevelopments, that supply renovated year-to-date operations. the homes of our and attributed at good redeveloped you heard, focus pricing with and have had To the apartments, maximize leased can delivered downtime on Aimco's demand portion we XX% his solid results have that to limit we power. of that to in end, managing ensuring just a quarter At match of team those with rates in line Keith over projections.

the On construction front.

Philadelphia, nearing fourth Place end final construction the remain on and time are on and At Our City, Center we Park tower. projects on our Towne of budget. in

across on our As and stabilized up Keith all we a focused remain of ahead X noted, towers. schedule, reaching lease occupancy is

Phase the of million Park and up the Towne along X,XXX of investment $XXX the located in including the net million over X asset completion creation in with of Sterling, also who represent homes Center The $XXX of of of over With value. City, lease culmination development

Some these may our X Day when to plans showcase Philadelphia Investor our we of properties. remember ago, and on years work you hosted in early

expected to and begin Colorado, construction Boulder, a next host my the Aimco vision their to go Mosaic teammates dedication schedule pleased projects. and for the fourth Parc this executed are out on to initial of to quarter track, that on In thanks We transformative summer. preleasing time, at at we occupancies outlined success these remains of year during have of with the

by ahead, redevelopment both depth the pipeline. our of excited we're quality and Looking

XXX an adjacent projected are the our to science us the to XXXX, The Campus represent in develop XX Anschutz Fitzsimons land parcels next agreement land our located feet today in burgeoning that dozen apartments we XX Denver into four property. and campus Fitzsimons double Colorado, option Hospital highlighted is purchase nearly to parcels our new Medical Children's years. Anschutz XXX Center, and initial space up Rocky innovation homes, Campus of to here buildout. XXX garage, retail. X,XXX and accommodate phase Medical can will Medical our Colorado the Regional ground-level existing pleased include on This square recently and right entered property. over of we release, providing and only plans is at immediately In life Mountain development Center. within community VA University to to home the As includes XX,XXX exclusive multifamily a the the announce to parking jobs full for zoned earnings the a completed, hub number This These surrounding XXX-acre

delivery XXXX. on to pending expect QX the break our We ground with for this closing scheduled land later month during

the free margins. operation underwriting investment improved flow contains valuable XX%. efficiencies NOI and apartments into ownership in of property, XXX project in XX low cash operating greater Fitzsimons unlevered the Xs will IRR an our result operating million than yield for that We allow provided upon and insights a produce Our the stabilization will neighboring and $XX which

Chief I'll on portfolio Officer, Investment John over Aimco's Next, with an turn to John? Bezzant, it management, update

John Bezzant

you, few busy Thank on had Wes. front. transactions' months the We a

we activities on at May Philadelphia for and for a Bent investments, these total X Bent X XXXX these in communities. in Philadelphia issued mentioned Virginia. the Tree trade previous communities We have million communities units seller. per the Subsequent February the million. completed We OP of Northern on share in call, million the initial $XXX closed to Tree for on on paired purchase acquired of invested Philadelphia Paid another As our we've consideration $XX $XX X. of $XXX

of the paired million. Hunters more proceeds trade focused suburban of Hill a rated activities the Assumes on C+ rate Philadelphia return, minutes. an debt will update basis and to than yield D.C. million, business, Philadelphia asset property made in communities, our free and business the a cash And points management of flow $XXX additional to higher Aimco our XXX anticipate dispositions gross for them. discuss Philadelphia in a for Paul we Chestnut fund $XXX These acquisitions, we in sold Point sold village, a deleveraging, internal for few the $XXX generated communities Through cash and cash result million will portfolios. of

closing under The additional conditioned property two of contract Place have not Carl first which agreement, XXXX. received. Camden completion on of under Philadelphia transfer We city construction for Dranoff. the existing its the half Ardmore E. Pennsylvania, in in of Ardmore, tax is track has been remains approval Camden with pilot and the of acquisition area yet upon still assets upon of the And is One

who to grateful process moment would who passionate Paul? I happen. of numerous the the hard of year. to their Officer. end past amidst like talented, but been to take now stayed execution Financial change. transformational Aimco. call years and our exit to this have on of surrounded of all on our of to the has was before the of noted, preleasing start the over expect With this at it by throughout the hand business Chief Affordable job Paul And this its that, by I'd community Beldin, for work people, thank focused I'm strategy proceeds name, like too to those result been successful turn The the to several reinvestment a made this individuals as over Terry We

Paul Beldin

John. Thanks,

the cover than like our performance newly the guidance. for of First, due outperformance financial communities. ahead from to our of contribution to share X% property including the in midpoint operations I and of $X.XX is quarter. stronger of acquired the was would second AFFO anticipated results $X.XX up per year-over-year $X.XX

year. this is other which to $X.XX The later expect items, timing-related we due reverse to

to time onto the borrowed getting amounts It second which cash, Next, to our unencumbered at which and our significant market repaid stronger. a all pool term be in-place $XX debt $X.X the on also year, the our million able balance previously our our balance keeps below and used preserve mortgage off million at unencumber were John Chestnut additional $XXX that discussed, are communities interest billion sheet its another of improvement interest proceeds entire been the loan, sheet collateral maintaining for transferring an to during to property the were in $X by the half to future of pay XXXX, transactional by of collateralized cost until Aimco's from hold activities X we maturity thereby we with outstanding line million approximately of credit increasing will costs. year-end. save in to this able substituting by debt X% Hill We able Village has

interest to which, million, half refinanced second on more of today's our spreads, discount prospective able about to average points, of a we loans Also, basis thereby units lower $X at published average about As our are the interest would year-to-date OP Based are weighted repurchased million by than in XXXX, asset on rates refinancing interest our these a have quarter. annual fourth weighted of XX enter savings. $XXX rate to we now $X.X be XX% turning attention net maturities. basis, million XXXX value. or and XX% creating we the of

guidance. Finally, full year turning to

first blended described, in during rent occupancy X well As the our and exceeding expectations performed Keith our growth. average properties same-store months, daily

start year XXXX the the year. XXXX daily guidance expect of year. be the XXXX leasing XX.X% and between at With the our We than midpoint X.X% this and we approximately the at from in expect X%, basis better XX% of up beginning our now XX.X%, XX XXXX occupancy complete, rent growth to point at of average in improvement blended a XX.X% from our activity and of view from up

second is and avoided reduction more retention fees into of fee results leases basis of and the rerented. basis X.X% apartment revenue we of points. our lost XX to as low rent growth is XXXX than guidance basis to to XX% other higher renewal by and to XXXX turn lower range year, the and X%, a expectations and rents up cost offset in and effect midpoint average XXXX net daily XXXX in earned, of for revenue the the in resident the by the year. blended out narrowed range with her is expect in corresponding when primary revenue home on end by point XX to account, increase growth. expected a greater-than-anticipated Taking leases. vacancy turnover customer of XX our is and XX%, income same-store achieved increasing variable We the compared from The loss points year-to-date growth XXXX by be a moves half revenue balance occupancy The new That

is end of improvement XX%, half point midpoint first ADO level ADO XX from the of of of XX.X%, the And of comfortably high example, achieved. guidance the a half a with the feel For basis guidance with half accomplished year. second we will be reached second is

to the NOI increased revenue of change same-store the to to to guidance the points at increase XX guidance, our midpoint basis same-store no and Given we midpoint by expense X.X% same-store X%. guidance

first the quarter. also of at maintaining we narrowing With We the call the ranges open year questions. for next established by I'll the it full respective midpoints will our you the [Operator to AFFO, Instructions]. updated and while now the question. expectations $X.XX, end for guidance that, turn Roco, up FFO for

Operator

Juan today's first Lynch. question of Merrill America Sanabria And of from Instructions]. Bank [Operator comes

Juan Sanabria

Paul. Maybe just with starting off

you the helped just FFO of what kind a for versus your items results expectations. on mentioned elaborate timing? in line quarter couple of that, timing of moved the second terms that out You around Could adjustments

Paul Beldin

we is to midpoint be timing throughout and is I'd that an was accelerated spending, as Juan, the bet, projects to our that the of have year. in cumulative expected and from amount remaining due to where is being some to, At replacement the And $X.XX of those our You was how $X.XX outperformance $X.XX happy are line, capital completion QX. related There just timing our of of some timing to. the due you the our that's related, FFO, just for tax AFFO full noted. slipped to the this quarter of $X.XX the the occurs year, into second third the recognized quarter. same is benefit to

Juan Sanabria

on, 'XX the Okay, and leading point? great. And increase the which just guide, on markets then us any are you color to at lagging give revenue expectations which are same-store can this

Keith Kimmel

Boston an say, sure, Also, the we of at L.A. The ones. an had for beginning Keith, example. Atlanta But put it's Area, I'd Area, markets, outperformer it. has from it. big the leading the in tougher thinking are thought are the has that been as year that take about I Los I'd would we where started been Angeles Bay point Juan, a to category. than as and Bay and little the Boston I'll

Juan Sanabria

sustainable? Area you growth do think And the Bay is Okay. occupancy

Keith Kimmel

the I see At the think the so the little and we year would we of sluggish, of moment, last beginning make saw acceleration don't year, anything end 'XX, it into Well, and San was very that San otherwise. me some where went when a good, Mateo, it Pacific Bruno, in we've has really look the special. City, particularly in in at our portfolio peninsula be we as Redwood that specific seen lies places are in some

to the so make of And but moment that ahead want me nothing think get differently, at would there's don't myself. I

Operator

Capital today Austin comes of from Wurschmidt And next Markets. question KeyBanc our

Austin Wurschmidt

that expecting overall income the a was you it to revenue contribution Just that yet, revenue driver lower on growth. looked you're guess, acceleration the want to touch a of to like saw on be, little I a piece, big bit growth other same-store

should about some drove it us the back half be we give of year? thinking to through just and that, color as you the can how what So

Paul Beldin

this quarter, our in which debt help opportunities express then Yes, incredible the $XXX,XXX a an contributors that's of that I'll job functions. of us Austin, generate Keith have if see I and been pets parking from to continued the Year-over-year has Paul, One, and bad the was is income XX big just customers our percentage up team to the add. done lower X maximize second Keith is fee well continuing is have only contributor. under will points. testament start revenue, revenue to primary by other quarter, where Keith debt, anything to and and driven during our a the also And basis who second as bad is was so as a as team, other as

And to so work that on we're we'll off the to a do start and great to better. to continue year

Austin Wurschmidt

And we that grow to continue that then expect at should to pace?

Paul Beldin

At that the slightly for rental year, being growth QX? be other for expect income excuse that full to in sorry of No, up was the -- pace unclear. we X% full below year the year me, revenue, full

Austin Wurschmidt

that's No, all right.

expect did be occupancy. summarized So blended kind to you of a Is with and rates first what achieved appropriately? stable the from in then moderate X.X% that seasonally consistent essentially the you half

Paul Beldin

Yes.

to blended our year-to-date, raise X.X%, are rates they quarter. in that -- were Just the expect it, restate we second X.X% were

expect We as X%. full the blended XXXX expected of rates would result remainder lease the through normal go we and in that seasonality year year of

year-to-date. the year. bps beginning lower expected at other XX our where we then just income is So of a the little than And we from lower bit than contribution are

average the is then variable really And only so occupancy. daily remaining

And second XX.X% ADO the first And end in the half is the if we end and just we're high for XX.X%, the XX%, it's at for my of about so, at at if for up our reference, as we're range. half. remarks midpoint the I outlined

Austin Wurschmidt

call, about of to maybe the beginning other area And estate talked of the then some of a appreciate think strategically or And you the something incremental just from that could lot that that. category. at portfolio time for next investment the or real segment either perhaps work done in make sense portfolio just on, picture, or I are bigger you've portfolio kind economically an I'm perspective of as what the How about refining the now. you today? And guys curious focus

Terry Considine

thank you And Terry. question. the is for this Austin,

which ramp-up expect perhaps in One addition to our returns the that we years the we As From more $XXX outsized we of forward, year And expect his past seven spending, the we of year. mentioned $XXX seven million strategy same look that years. same. the drove remarks. next the a a about to existing will to to been results has as million expect that in redevelopment be the level, Wes reflect

Austin Wurschmidt

That's as other point else little a going helpful, it, real look the that and on being estate investment to redevelopment noncore source there is and you put to in a maybe category Or at initiatives? potentially finer anything other forward? fund

Terry Considine

Exactly you. right. thank again, Austin,

it's And of properties. and We location in will years, with decile, XX% reinvest yield the and portfolio weaker last the much bottom it the attractive look better though our even that go capital we better over properties is through it's will see might can cost in improved an of for several them we tautological. if

Operator

And comes our of next Nick question today Citi. Joseph from

Nicholas Joseph

of the Terry, report card I the on results plan appreciate since XXXX. strategic the

You NAV you than the more of change result rate has much allocation run mentioned analysis, decisions? the per share capital cap the versus is compression When of how doubled. that

Terry Considine

Nick, I I that. right for have don't at apologize hand, that

we'll it back be be we've to calculate that a a no it the right favorable will decisive environment, and out but think correct point means to I and contributor you're by that improvement. It as to get will had certainly you.

Nicholas Joseph

units timing expected then or And what's and on your that. just, what's the land the Medical total for hold Appreciate XXX the the Campus on remaining the options development, then cost?

Terry Considine

the rate like growth campus. Bezzant. because term to a I And negotiated John want options John those to to of answer that throw of is on a couple job their to years I'd tied bouquet ago. again, Nick,

or we goes on build and the we employment as to opportunity increases, ahead mushrooming -- to of pressure get that no an so expected job our there. that have campus, the out incentive see And footprint of

Nicholas Joseph

for? last do long the options How

Paul Beldin

years. XX

Terry Considine

XX years.

Operator

Rob our today next question And of Stevenson Janney. from comes

Robert Stevenson

out your B the talk A, portfolio by guys represented during you those of each how buckets C+ the any performed X buckets. year-to-date? way, On that's and into second competition earnings segment material given and supply? supplement, the the about underperforming of new Is from quarter you Can XX% the Page A

Keith Kimmel

it's We at as that about been perimeter are how between we think look we Bs As pricing things is basis Bs new XXX look Keith. were when performing spread that over we this Rob, point There's lease and last at performing. best look the currently. quarter and

Now being point one dependent. is things is that of with that said, I'd the out market really

Los outperforming as to Angeles, example, So Bs the an our our As we in contrary As. were Boston, this last Bs quarter. our outperform that, In saw

it So really become And here. it it and very really very past does dependent. specific quarter we've that's market becomes how the geographically over seen

Robert Stevenson

what did market. in of then are seeing good of seeing level time supplies in anywhere Or we this year? year traction like not you Are is of but traction same? And guys just Okay. of mean, still towards it to than the end have they that years started you as been are more you all coming seems guys near the than get as the this things I they've starting better that? greater been D.C, in. that last the before year Are past it

Keith Kimmel

down, over Over that. some similar. quite stabilization. seeing seen being about, Rob, might quarter them I'll might and up the this it's of what Alexandria one portfolio past we've What area. X quarters talked is both be and multiple is is years, in suburban I've in one in Maryland, I'd say our Virginia, suburban walk we're last the Keith. Where through be

seeing we're a While not of we're seeing some stabilization rocketing there. acceleration,

days At looking to we're we seems the would like it's that So see forward stabilizing. strong some say time, growth. really the that I it

Operator

question Mizuho Rich next of from Anderson our And Securities. is

Richard Anderson

of July. chunky in year. the past, to what the sale you closed earlier you We like relative what of first you. in did you number today that seems of explain a million to number with kind management asset asset start started kind of the in despite fact It this me $X management income, can a I'll little getting it Paul, half but conversation the the a effectively more

Paul Beldin

management first You about And as was X from of bet, Rich. correctly I year million. appreciate question. out, our the asset $XX the point you contribution months the in

to We year million. full contribution expect the be $XX

So of rate the our run operates. business is X of for there the pickup impact function how in disproportionate a provides contributing the that And really ownership. is factor a tax the credit month

to the we negotiated on had that obligation to with to our investors, sale and credits future books and business, the operate and that successfully connection able John we're As we tax closed, in deliver transfer in Lynn recorded a the this obligation credits recognized our tax below future so amount income credit to a quarter. to deliver and price incremental liability, going tax an is at in that result of these third

Richard Anderson

Okay.

Okay, so to line, it's the -- tax credit, using asset management tax and changing credit correct? you're going that is

Paul Beldin

is from operating the asset comprised And secondly, that's that its net then of The One, fees the X the generated that's it management is delivery, business functions. income by underlying properties, used business. pay of since those partnerships. we and done life we we the the the have tax our promised to the of credits what that obligation cash are earned And business, started over our credits to delivery investors.

Richard Anderson

have if something Is that's Or curious different? there in about we're do you this is got cycle an sort few And of right. suddenly a life of call said been broader theme that's All about your it, the Terry retention. this low it? as this dramatic call, turnover, decline to seeing a understood. -- I've as okay, -- think The on high question. epiphany has or you something or a why competitor's shelf And maybe that I'm of such you quarter Yes, turnover. some

Terry Considine

I my thoughts. Rich, while gather

ask a Keith because it, comment Let he's me for lot to responsible on of success. our

Keith Kimmel

it's that unique. that's Rich, anything for -- I quite that it's wouldn't us say

talked for think you out. us long-term about customer think strategy. our our playing that about strategy lower-turnover And is around having a this specific residents, We've it's over been is satisfaction. If That's calls quarter, retaining we many our cost.

on consecutive know people with part know emphasized not our avoidance, with selection execution that that communities would those stay have We or is we're of creates that, of our when vacancy turn We X moving quarter then that as in better maintaining folks this, frictional evicting that. and us Customer had at we've really our than which longer. are we we stars. to happy I residents that have cost unexpectedly. And -- so big our people Our XXth better residents point having a of point environment are stay us team's a things like longer. this

an that that focused going way. thinking about this for we and on believe So Terry? many years it area stop don't to is we're

Terry Considine

think this at calls long-term quarter. well more Thank gives why Aimco would look question each there think economy the I your at -- helpful we on that these better it's particularly an there And of sister admiring stresses just trend and see the you Keith to think add, that explanation REITs, do One opportunities among around to and work what And And there's you, can it. was good we secondly, the and better example of quarterly do. that a X get credit of does questions the think but provide, at what fewer by is of think Keith. general we a come our experience we're Rich, I very generally. see we probably Aimco delighted public households by mind. you so that discipline and of a we're are REITs that But your part rental I as I things improve I I measure. is

and help in And continue. I so it's think improving the it's economy likely operations, it's I of the to think

Richard Anderson

of What are single? percentage tenants your

Terry Considine

it about a little bit -- XX%. was looked I time Last

single-occupied mean apartments. You

Richard Anderson

should say? unmarried, Single, I

Terry Considine

our of there's single ambiguity an one -- Well, About only are person. there. by occupied apartments half by

with may Sometimes someone else. be they apartment sharing they not are married but an

So your question is sure however I'm you not there. want -- what

Richard Anderson

right here on get into this want call. I to that don't

Operator

And Associates. from of McGill our question today Dennis Zelman next comes &

Dennis McGill

bounded of has with the points question First XX upside do basis number year. the to for just to the rent

I that you put what think earlier was by just that as you was said driven think behind led expectation? those of Bay LA thought relative can I you and hoping initial driving by a Boston, upside -- markets each little Area, essentially to maybe is

Keith Kimmel

I'll walk it. through Dennis, you

occupancies have back come Area, So the Bay just the strong.

so This and occupancy you was than an daily I'd look able XX.X% rates. as so a story. Angeles. occupancy we've it's give markets, were a stronger to therefore been quarter, And it push as last we we Los similar Angeles, Los in those at thought, In at we -- average

that buildings we in average occupancy. those at Mid-Wilshire, or nonsame-store were Our are daily XX%

us, big rates In were been thought shown essentially we the really properties and maybe strength it's started more suburban ones strong the those in occupancies we initially Boston, that year. when components, cases, strength driving those just we've with that we had between have for factors. the been So X those have really of were all and

Terry Considine

continuing areas three personal because Keith Dennis, particularly in factors are I'd to outcomes. These characteristics to their customer have And worked people people in from inclined jump are throughout a satisfying business it's to choosing improving some a a just that us of team, and everyday like and selection, just to that view and own stay them see my our pointed are the job. daily he's they then due we country. just they've that stay on confirmation success where good measured and longer way. in done external is with But lot that to hard his Keith picking

Dennis McGill

Okay.

a in also that noted were the earlier a or on You the on X/X of Or demand-driven preleased you strategy I versus think your XX% number side, that just a Is about shift July metric? leases prelease side? year was ago. processes is said

Keith Kimmel

wanted if The At time a emphasis matching emphasis notice. downtime know we see to with two start the walks desire vacancy strategy. we and customer put is and an we put here between can -- we moves out together, and amount do and one them time want who that who those to Terry reason year, on a loss someone has any. this for to been add we that match wants if is has in. of apartment of specific in, we the is somebody real focus and the I'll beginning things the very how This limit a around the the between the that match we moves What we this, a Dennis, know. decided

would a Terry more that we've to that higher been anything? very results. occupancy drive wanted to it incentivized knowing do team that it, the around very so will and specific it of how And our you expectations average ultimately this like specific has in see daily we focus put to around

Terry Considine

customers This people of selection. ahead. to Sure. be stay be want plan also We we more longer. selection, more to they and will customer is that tenant our And likely think an example stable that with us

with And increasing having basis, on so for a them commitment good and make us seeking their who long-term a stay last out people by of to our do needs. we a in provided prospects can satisfying are minute, we ahead plan us a of prelease, job the

Dennis McGill

question. Okay. And last

of side decelerating whether was seeing You declines? overseeing And in contrary the labor? the or that? And cost. specifically actual said and would it general wanted to labor just clarify construction-related in I just where economy declining business means increases in any seem that benefit Because you're some the you quarterly in that expense the

Keith Kimmel

it. I'll take Dennis,

be ways we of we're clear, more efficient So a more. be first being of to all, the What lot about ways team members board. different is think our actually we're There's across the let's finding business. generally

We have measurement our data through exceptional analytics.

paying for our and a way -- find more to are us result. exceptional team members do those a better more in efficient be that are that work We ways gives

Dennis McGill

that hour? guess fewer should So hours, per higher I fewer we read -- pay

Keith Kimmel

so it hours, a but where we find Could could be people, of hours, that a X be X do in X could centralize fewer or like items. combination the it that be way to could people country, could it's things we these across fewer used we with have yes, that it central things those we

Operator

Pawlowski next Green our of question, comes Advisors. Street it John And from

John Pawlowski

real the Could some Austin's markets us XX% of more for about on today? question bottom noncore constitute portfolio you hoping what specifics estate. was the I tell

Terry Considine

thank question. would down for And that market. that break circumstances. I Terry. don't by specific it's John, specific by break that it you think we with properties down today, We it would

condition, it's micro submarkets, trying market. sometimes side a the on, particular their than what sometimes are the street pick so the much to more and they physical of Sometimes

Patti Shwayder

road. we in portfolio, by We greatest the Philadelphia an Dranoff is sold of the opportunity greatest that saw flow, example of a where looking are, Hill it's asset. is you asset both growth and cash Chestnut prospects future think think really I We focus down Village. John, in performance do your What where the quarter. hometown just bought this the last

Paul Beldin

to off, this just is you sorry -- John, And to amplify Paul. cut

John Pawlowski

you Can own you give way the business continue senior to me case, living house?

Terry Considine

We of on make money. At rate flow economic, Aimco, we free cash we return, on very and value creation. we focus and are internal focus

we a I reason demand, good living results. make But bit owning in of X all They're and think today have the There's a them. because good so senior little lockup XX California have property is property communities. we We by basis. basic tax of money

John Pawlowski

long-term and a the like in versus the forward those similar going it IRRs apartment Would whole an community neighborhood? properties buying

Terry Considine

that want follow-up if but be you, made exact to. you haven't I'd glad to with I comparison me

Paul Beldin

is this John, And Paul.

portfolio, bottom the are we the future rank Just senior thing the on to based flow a one probably mentioned XX%. our senior they the our expected comment not middle Terry that on IRRs, that IRRs, communities, do are in free near routinely on the stack all cash of of is community and properties

Operator

of And our next comes Okusanya from Jefferies. question Omotayo

Omotayo Okusanya

that FFO. peers, had and to Most the an also just increase led midpoint I their quick in of a same-store NOI of guidance again, this quarter increase did your question.

on of up up. had same is growing same-store FFO, guidance sure You phenomenon going not midpoint NOI is of the but midpoint

the I'm or in increase of as don't the guidance midpoint an your reconcile offset So trying just well. to your with numbers? And is have guidance you what FFO why that the

Paul Beldin

asset Appreciate offset You bet, related business. The question. the is management the to Tayo.

back expected million. at from release, transcript about to would be between look have quarter, you an or our from first management asset talked $XX you and million our noted the contribution earnings that year If full we $XX

low at so end the going Now we million range that, is with the to $XX that offset. expect of that's sale completed, be at the

Operator

with next Kim our comes Markets. Capital from question BMO And John

John Kim

wouldn't a might be Costa-Hawkins call well a without there as ask it. question, I guess I multifamily so

purposely are suit So in had question are stringent proposition and won't you that here, your markets, are you that said in is how markets have you if San My like that currently passed? Santa rent cities you in confident in had controls Monica. not that -- Francisco that of supplement have chosen markets, follow kind not

Terry Considine

a senior one XX colleagues Patti contests. of political got campaign. steering our a the Shwayder, of who is member And here these of many top veteran on we've John, committee who's

touched add remarks becomes Costa-Hawkins state in of was that I'm are our And on intrusive to a to -- the risk of If I there before greatest the speak to sort the would repealed. were earnings control release is be is rent in her to was something Costa-Hawkins so it we've on which the city-by-city beginning, in and was historically areas it basis. at were and that business areas good. where ask what going But avoided. least the is government The most the operated I've where at that

us it's continue balanced course, campaign but the would Costa-Hawkins. view what we leads it's will of and forward, Patti, you unpredictable a where think that Going on But, more experience about say stand? that that life to that after

Patti Shwayder

defeated ballot and has in housing Costa-Hawkins, expect when at the rent so successful City facts where Since have they of to happen forward, said, it had defeating put your you had And control, and won't for that an was XXXX, it's specific, the the will one by them. California at years look we as were XX Costa-Hawkins Redwood there how on success these that you with and ballot. Aimco initiatives how we've in are X in involved been answer future. and pass one are of the are in, Sure we in that cities some in X have the couple been example. we've I cities in look Costa-Hawkins, one, question, The these it past going can be without when that substantially, by confident as look last at Terry

John Kim

this if is? us what how One of remind discussed on their portfolio views could your to competitors having views I'm in Airbnb? you wondering and your your compares [indiscernible] stepping rental program, of up short-term And your that

Terry Considine

Those questions. the answer are And of raise we'll limit them. John, two both to

has hotel turnover has short-term also the is has it in cost. it's The business. that we're transaction good first and also rental And not more But business. attractive pricing. It going the it's business. a pluses minuses, and It's in -- direction perfectly of

residential with neighborhoods that stable neighbors, continuity. predictability is benefit the on stable communities of Our kind target long-term and of and

at not interested we're all short-term so And rentals. in

Aimco And and stable is are safety their no With behavior. Airbnb. who of is that Airbnb is we The that neighborhood. is what because of comfort neighbor is Airbnb, the pick litigating a important provide second reason the or your it's about with there consideration their question to we and you customer

a conflict property naive. a our Airbnb's to the of our reckless regulation, Airbnb residents And obligation with was thought it our business much Airbnb's be customers by actually the reason same But callous innocently very Airbnb's views are vacations interference. so from model being our with disregard in noncompliance And long-term who and rights, Well, concern of to own the whose at lack now for risk for for ruined actions I participation come and want ability concern on in two of is law and XX%, trespass. that the built seems customers. unlawful unknowing

Operator

to Considine turn the concludes closing over This you. our Terry I'd for to Thank any back question-and-answer session. like conference remarks.

Terry Considine

to of know any feel that it's Have we're please At you we'll a thank much. of with try be we be. you spending or can or with the Well, Friday we've If Suzie Aimco, good upbeat Lynn weekend. transparent and and your Thanks appreciate Paul very as afternoon, we very the call or all free future. Connor left you've our us. to had I questions, that long very about weeks much. as any or some team,

Operator

has And We thank attending you conference all today's you, concluded. now sir. thank for Today's presentation.

And You may wonderful day. a your disconnect now have lines.

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