Essex Portfolio (ESS)

Michael Schall President and Chief Executive Officer
Angela Kleiman Chief Operating Officer
Barb Pak Chief Financial Officer
Adam Berry Chief Investment Officer
Nick Joseph Citigroup
Jeff Spector Bank of America
Rich Hill Morgan Stanley
Amanda Sweitzer Baird
Rich Anderson SMBC
Rich Hightower Evercore ISI
Alexander Goldfarb Piper Sandler
Zach Silverberg Mizuho
Neil Malkin Capital One Securities
Austin Wurschmidt KeyBanc Capital Markets
Sumit Malhotra Scotiabank
John Pawlowski Green Street Advisors
Alex Kalmus Zelman
John Kim BMO Capital Markets
Call transcript
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Good day and welcome to the Essex Property Trust Fourth Quarter 2020 Earnings Conference Call.

As a reminder, today’s conference call is being recorded. Statements made on this conference call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties.

Forward-looking statements are made based on current expectations, assumptions and beliefs as well as information available to the company at this time. A number of factors could cause actual results to differ materially from those anticipated. risks SEC. found these filings the about the with information can on be company’s Further now pleasure is It my host, Mr. to introduce your Schall, Executive Michael Chief Essex and Trust. Property Officer for President Mr. you, Thank Schall.

You may begin.

Michael Schall

service. Adam Berry, for efforts and thank the Chief Investment will conference end me last Welcome our company’s am here remarks with to years his announced Kleiman and we our new to Officer is to fourth many the Barb earnings retirement success Q&A. of roles tireless follow prepared and contributions dedicated John for promotions to their and call. at contributions the over At Angela of numerous for decades. Both Essex John quarter very nearly Barb year, we I pleased Pak Burkart’s three Angela their and and acknowledge greatly of appreciate

Therefore, quarter prevent performance. quarters, second, revenue resulted changing orders and from losses in in last job during given basis consequences: rent continue have the and quarter, lower will are two in improved and COVID-XX rents Government we property soon during and or the declines. quarter the reported in same-property our dedication Similar to revenues effective locations. night, us third the reach quarter fourth mandates laws cautiously both to FFO and these beginning the intensified the our COVID-XX shelter-in-place suburban Sequential significantly last are with market points have sequential mostly that the team in the challenges. and they unprecedented pandemic related maximizing the had pandemic-related we tireless stability as earnings October extraordinary pandemic, first, quarter have surge optimistic regulations and impacted rents results related anti-eviction I cases. primary modestly and constantly be results full positive Navigating As full amid we the year. and share per by fourth net year cities reflect for discussed in few quarter Essex and flat XX our involves XXXX in core for resulting their bottom efforts and fourth call. thank in Overall, market

roughly worst XXXX, trailing a of QX basis had compared December. the to jobs to the point in improvement which year-over-year and had Essex the basis X.X% of million to lost As X.X% at jobs equal XXXX the nation the point X-month losses December, were from job number X.X of preliminary Even markets with and nation, the in for XXX minus financial December for XXX September a fewer recovery jobs the year-over-year, of crisis. month QX, September of outperforming the point improvement

that X.X% data underlying case expectation regulation. deployment The wide in is decline of the pace for pandemic, extraordinarily is XXXX team the XXXX. Our our base our supplemental, effective analytics will of many and scenario range relate in vaccine to rents including unknowns S-XX that changes which the prepared to net outcomes given potential

the in GDP XXXX. and Our a should continue be half Angeles second lead Apartment of the locations to in momentum further Seattle. especially to assumes X% will which positive supply downtown modeling Los growth, of challenge,

to XX that forward. little rise risk compared for-sale team to once modest and that of there monthly to supplemental that rents housing occurring for-sale is much with tech Essex in a approximately offerings approximates of directly of is rentals, tech markets public anytime the great a apartment IPO It’s offerings sector analytics Overall, for-sale during we was to similar Essex completed the the XXXX, the the Page in entry-level reinvestment. the an essential soon. level payment S-XX.X trough. view increased It’s investors that with home, experience expects expect a since ecosystem, companies, XXXX capital competes to and early-stage market XX,XXX to housing highlights headquartered affordable XXX XX liquidity don’t generate our data Our which our in job multibillion-dollar recharge for year. for deliveries top increase openings August XXXX, markets. growth year. last the Page going Also XX% the IPOs, tech production the companies for initial year the S-XX.X providing has tech and recent reacceleration also in for illustrates

capital located Washington, invested venture accounting a X%. billion Area are package pace the requires analysis just largest investment. XX% supplemental with U.S. on the economy a next Success the continued record Our VC of that in job dominant in share continuing $XXX a Essex highly in workers, receive draws nearly indicates knowledge-based or Bay and for of mass the with total critical markets of state, the demonstrates network skilled the that the the that approximately of companies creating to effect to The in Seattle. with Texas, investments postings California S-XX.X Page XXXX

While areas to surprising retirement the to with to it’s will baby the similar in front previous less a only recessions go similarities growth In California in of news. jobs. and we centers. recession to experienced respect in concentrated often make to including periods, lower boomer large expensive during than recessionary see choices: cohort Coast of the some the in This that different is forbearance work of Snowflake, service the Airbnb of will unique migration people value plan. not thousands our workers, jobs find extraordinary eviction centers bursting monetized housing effective involve experience, the two are out choices of part to experience In in and our of The that number loss paid especially home companies West out immediately public, normal, resulting urban extraordinary migration high-paying today the environment both of move or bubble. home shielded In Dot-com the California limited often higher only jobs many cases, financial DoorDash, many their expensive as page venture-backed and laws. employees stay move city crisis the to was has and by XXXX, an had

recessions, we expect As trends these to reverse. with of previous most

expect has the rent restaurants, bringing since of the recover than Essex for travel related jobs. most more jobs, administered, combined most of down Coast, back in the lower higher-paying the as will markets We service earn parts housing and that and the draw in West services affordable are vaccines recent been Workers demand the XXXX. country it rental with levels swiftly

productivity Our recent XX% workforce American study of without only that can McKinsey home from the any loss. estimates work

forward. pandemic, remain confident tracking of companies we will that work been when to many follow. work companies Google, and to safe adopted have among the during others do the vast home largest ask majority from flexibility to Netflix office from the increased have many have likely going Apple are is will that to expressed office, We the to companies it their return who home employees so, models and the with return desire

Turning of of COVID-XX to November imposition about wave concerns to regulatory beginning our related environment, the orders the led hospital cases a California of third availability and in all markets. stay-at-home in severe

pay XX category. rent. including from pushing pandemic-related back COVID-XX remain of last week, the were in at of last state XX these to protection extended least SB of the with to week, most related requirement has the markets Essex all California XX% Recently, restrictions the of of XX, eviction eased XXXX, January California’s passage restrictive but Some June

the to state billion using law levels Stimulus In and related $X.X to allocate rental in March. addition, a Funds payments established assistance in accepting income Federal prioritize program applications

are which many laws, there requirements are with we complexities, related As evaluating. and similar

homes Turning for to implementation of the we which apartment X a investment were million, markets, XXX $XXX of March. all with properties shelter-in-place in contract placed to under of during XXXX, apartment orders subsequent sold total the

small the real our valuation pandemic. estate preferred for the the markets, support not Given of compared our belief REITs onset number of sales that of values apartment of investment. to the the changed Since wide source materially property remain private public a property discount pandemic, the since onset have funds in for sales relatively

decreasing draw compared the cap have lower it the conclusions markets of in and pre-pandemic rents changes some to where levels, cap somewhat above In pre-pandemic However, or about both increasing rates modestly property increased the urban rates. case generally rent in in makes period. at suburban to extraordinary are are difficult locations, and suburbs, sharply values

price the pre-COVID versus and in for rents hit concessions lower sales value hard rates resulting X%. high-quality cap significant possible around indicate in recent in talk cities, Given period, X% reduction a below properties about

recessions, the mid-X% with Fannie Mae rate attractive supporting respect Freddie previous values. lower potentially with should Vaccine provide property and cap range, As to uncertainty distribution financing in to rates. apartment have X-year continued operations with very remove financing and fixed Mac

believe volumes will As to transaction a we accelerate. result, begin

With market. leverage positive historically over before, the robust to cash has As transaction turn that, a we from indicated led improved I have Angela. in call to apartments will flow

Angela Kleiman

Mike. you, Thank

appreciation amidst a work. diligent First, for COVID to customers the I your operations challenging caused all by for efforts my would the Thank like you environment hard team Essex to our to pandemic. express serve their

I The disclosures. the market decline related and despite related As tech-centric urban losses cohort XXXX. overall, more we seasonal headwinds continued outlook demand. comments, as in our by markets job the discussing impacted begin particularly core new Currently, by by for XXXX our for in my our followed results, closures office remain expected, will performed to of COVID-XX and

in buildings experience scores a of of restaurants in located communities or Conversely, in temporary continue the with life, the in has area to properties affordable In this high quality space Ventura, experienced private the This in in High-rise closures typically compared turnover the demand residences turnover to in which CBD, concession benefited our average amenities urban change greater increase X.X% with where CBD of communities Northern addition, we impacted many portfolio of apartment walk the only outdoor have resulting demand. Diego, most been accompanied demand, preferences. and from driven public outside in a a X.X% concentration shift the the more shift and had the greater by temporary core consumer or and shift Orange Francisco our locations deliveries Bay San high and very County Seattle Furthermore, year-over-year in levels. California. supply also X.X%. continued East in by of fourth quarter, quarterly San

driven fourth quarter, from in of concessions. revenues same-property increases sequential occupancy our building perspective strategy sequentially, that There than leveraging our encouraging half have indicators part we in and a grew been stabilized in portfolio and decreases continued by leasing on the occupancy. During concessions more of in communities

Page year-over-year supplemental. provided for our our effect have net of changes portfolio rent We on S-XX

In County California, fourth the of CBD, job and and an performed by In X%. far the Key remaining led million decrease. concessions decline. declined rates quarter Fourth in declined fourth is Seattle, in a XX.X% markets of of in the same-property than Contra XX% suburban XX%, historically, Southern L.A. a declined approximately with year-over-year rather by quarter Seattle markets quarter. are in quarter. a and follows: line improved Jose primarily X.X% noteworthy, achieved an January, negative the as same-property major from stable quarter. demand decline. third by in average averaging the the highlights regional job better X% were decline $XX West million XX% fourth X.X% from the in X.X% growth in lower performance was X.X% growth was San the growth quarter, Northern submarkets seasonally an to by in averaging XX.X% $XX third was and revenue the while considering on San which in Southern declined our offset during the by decline X.X% the quarter year-over-year has CBD, submarkets, fourth decline, in the the reduction Concessions by while a San County, quarter Oakland, average increased decline, approval Clara lease New Ventura, concessions California of decline at Costa of Year-over-year decline in with Northern down LACBD decline, Santa contrasted averaged This X.X% improvement in Francisco California, driven with year-over-year Seattle by XX% in this a period year-over-year County our driven in by decline in Diego. primarily job X.X% year-over-year Orange revenue X.X% fourth California

remained to low on Moving as XXXX S-XX multifamily portfolio. X.X% indicated the supply of as for supplemental, our our a of stock outlook, at on percentage

driven across new confluence be in While The stock to our submarkets once supply percentage significant to job the urban CBD, by losses where we will as of CBDs markets. we expect by units. the by X.X% of X.X% urban flat, the Seattle, the offset suburbs, growth expect in the remain to percentage the have a a increase X.X% a increase projected minimal of where remain XXXX headwind is majority multifamily in a to of by again year-over-year X.X%, and concentrated rest increase in supply we In and compared just extraordinary supply our in of X% completions portfolio. the

its downtown purchased We push have area. expected also square the Francisco. COVID, Amazon San tech campus to respectively. impact CBD received expansion X-acre Facebook San have XX-acre In California, site project approval continued of acquired by with site new last in major with Jose to campus. forward Amazon near foot plans in we San companies the of Park, as and projects. and points, Northern a campus a their expansion and by expansion, foot its office million XX they Despite of expansion as Oakland in on positive continue updated X.XX are , for tech large a for has the supply although month Station. Diridon basis X%, project by overall seen increase Bellevue, work activities Microsoft million Jose X.X Google to major Seattle, in stock in In square campus plan continued and XXXX Google decrease multifamily at a X.X% to continued submitted a percentage Menlo for city for an

to In by California, remain of once a new million demand the this LA most which office West The and be San X.X addition, strong in a foot of to continued the of source will again recently we increase office X% notable elevated highlighted up in is flat. as expansion add square LA to space. percentage CBD overall South Southern stock supply would Genentech’s approved multifamily In biotech deliveries remain of project Francisco, headquarter year. sector

assume duration, guidance While of in the quarter as be conditions, the the the revenue year in trough many in our are legislation current year-over-year uncertainties for and our first rent at same-property the midpoint. will Because will our vaccine, revenue growth to year timing the typically the based leading we positive scheduled remain half, X to half full on this negative of in second X.X% year. portfolio market same-store leases second and decline

physical same-store current occupancy our Lastly, XX.X%. is

Thank Our you. to now availability X.X%. XX days out will And call turn I Pak. Barb is the

Barb Pak

update in results, and Thank you, by our markets finally, Angela. our followed with few fourth on start capital a key activities guidance will sheet. the I XXXX quarter comments and on assumptions an balance our recent

in fourth quarter was challenging the expected, declining a to X% with primarily revenues result and X as period was FFO core driven a by compared As property of XX.X% decline concessions delinquencies. year ago. This same an higher

last same-property in As this we is true market believe because a we concessions report quarter, basis of our we conditions. indicative on results noted cash more

consolidated a However, to required on straight-line we are GAAP basis calculating FFO. treat in by revenue concessions and

mentioned, which $X third Angela concessions As quarter, the same-property revenue sequentially. provided quarter, during than the we helped fourth million fewer improve

quarter, attributable to to straight-line which, concessions. $X.XX of rent declined or compared $X.XX core per lower third the FFO by share However, X% is

headwind be Please detailed non-cash supplemental, in XXXX, in Page core we continue FFO straight will discuss note which of a this I expect S-X to rents. line quarterly minute. item to on the a the We of impact to have line growth

our to Turning much rents, we which resulted COVID-XX the extended reserving in quarter. given lockdowns take conservative fourth in continue to approach markets against in a in especially the delinquencies, of the cases quarter, to surge uncollected throughout

the entire delinquency net quarter. As such, we reserved against this during balance

is this ventures share. our ongoing Our pro feel $X conservative on receivable including collections, approach. Based with at receivable rata million, balance stands currently approximately past joint consistent balance we at

balance assess on each market net to delinquency collection based quarter our and receivable We reserve conditions. continue history will our and

are release the guidance, X XXXX earnings our key and of supplemental. of Page assumptions S-XX Turning available the on to

was We we same-property important outside the have wider information range could vaccine key that uncertainties but and including than felt we provided a on the distribution are our a guidance based ahead, have for given and that it today. in eviction and That our said, ways. significant of normal remain control revenues moratoriums core variety COVID to assumptions outline FFO recovery surrounding swing

FFO year, the share decline diluted we core per decrease full of expect to at following key related X to midpoint. by For are X.X% items. drivers The primarily the the the

revenues same-property the respectively, midpoint. at by expect and and to we X.X%, First, NOI decline X.X%

in markets continue operating fundamentals of will we declines current ago, compared months While throughout XXXX. to several remain the our as of steady most negative effects XXXX rent to feel the

this become In rent The we and once XXXX will control, restrictions midpoint. history remain eviction company growth expect addition, are will estimated delinquencies due temporary to the and in $X.XX the elevated that the our remain at outside regulations collections, a to by FFO to core tailwind a be has drag COVID-related delinquency excellent and long we per of headwind various a moratoriums FFO an share lifted. to expect

headwinds Second, from we also straight-line faced concessions. significant

non-cash We decline to core in item expect representing a FFO, X% year-over-year basis. $X.XX this growth on $X.XX about will a in in reduction result per share

half relates they to high recovery hold. expect in remain will economic before the the second of as first year the we year the it of in takes moderating half the concessions, As

such, the we XXXX. forecasted of be quarters to the impact in with straight-line impact half concessions of in the X of the first last expect the As rent fall from we minimal negative year, most to

$XXX back $XX and during Lastly, investments with in quarter. This and funding million with being consistent that on of guiding approximately principles are close first asset expected leverage-neutral significant X at our to a balance stock and match investments is common $XXX capital the under basis. are totaling the fourth we contract new funded the sales a to of investments the markets million discount preferred activities million These equity closed on sheet, NAV. of quarter, bought

we prices and assets million generally buying of market million XXX maintaining pre-COVID levels of by stock private arbitrage while public and average to For consistent balance our and strength the sheet of able between price shareholders. our were creating an at share, $XXX pricing with the per selling all for at difference $XXX back year, value

Our remains needs with near-term balance sound sheet strong metrics. and minimal financial funding

the decline debt-to-EBITDA is our this in the has the of year, significant increased caused While result this net primarily EBITDA by pandemic.

As call takes well our expect ample to continue and source West remains a hold With dividend, ratio to questions. the we sheet will improve. for the our turn will I economies debt-to-EBITDA the and recovery liquidity balance a the covered net that, With back reopen, Coast strength. of economic operator


first with with your Nick the from proceed [Operator questions. Joseph Citigroup. Instructions] question line Our Please of comes

Nick Joseph

I exposure outside of more commentary if of how we urban, how are think markets about as does of just the within more think your state. the a change, in does appreciate putting any nature and is flexible how further And But wondering, just opportunities out? flexibility in that well work post-COVID, your if the commuting kind even times right, that there of today? markets, – Thanks. exploring change there environment, you’re trends that supplemental. could the of on But or suburban kind or either you you migration dynamic about the your kind as think I’m slides as aside be

Michael Schall

think be Nick. We more for question. work the we this be but to the flexibility level home Thanks Mike. Hi, same one some time, there at It’s is that the will employees a at office. will good tethered that think from and

know them and effort are As when trust are great and these you about the a can today, people. and very knowing people three the and all I the trusting things teams people other them think here really team capable better

So key I jobs. think, I’d relatively close as factor and to in their employees remarks, keep is we’ll prepared the noted say that that

maybe more and ultimately crime scenario that, said the that also good having in a little I bit the near high-quality rates, are housing think cetera. but jobs, affordable low et winners the this schools, cities So offer would will be

itself cities will of that that, those that. have among major And areas that a we for are think I the out. that I qualify So think play lot metros

So been hard them have – of and pretty hit. some

major suburban tech add guess impacted by Northern high-quality and the markets, are cities to parts highly that, when the some I of Mateo, even – have the that been California would of continue therefore, San going Peninsula, Bay San in answer that think I very COVID. that of So Jose would cities, I we the rents their Area Certainly, I about because would is do incredibly a is will technology beneficiaries unique. the And be we tech And that view to ecosystem well. think be driver. strong it the Does to question? economic

Nick Joseph

And or rent the kind guess, navigate helpful. then from I quick the follow-up quick fill Is to kind the very one one was or behind relief is relief assumed get out on any there programs. That residents And helping guidance? government relief? question, the rent that are ability just rent of who of

Michael Schall


And stimulus would As last is way that potentially noted a XX%. dollars California the on the state of the forgive of using of a it or program $X.X started landlord announced to required the rent call federal be week, program would billion, work relief.

reimbursement And provide will average it We from enough so these that to could predicated haven’t median income, so to program. And those had tell that That income, the hard that levels. it’s to evaluate lower what percentages greatest means. on be programs income benefit exactly are time the XX%. will be just of median

But I’m guessing significant have we positive it’s to So impact it. a again, evaluate. from will early too pretty that

Nick Joseph

Thank you.

Michael Schall

Nick. Thanks


Thank you.

with with of comes America. your Please of questions. question next Bank the proceed Jeff line Our from Spector

Jeff Spector

Great. Thank you.

And congratulations and know bottom fairly I Angela for great a to time that And I to Mike, remarks, in today. retirement. have you’re your opening soon say in Barb. or First, Thanks market conservative. the you you wish rents. reach commented want we a John will

bit take you And so just that little please? guess about a that you can talk serious. what say I more, gives I comment to pretty that comfort

Michael Schall

there. I the Jeff, it’s important probably question a Of I good course, and question, maybe think, most it’s, out think

rents, net X%. were sequentially, down they fourth at quarter, look under we effective for if the So

debt, So that’s the all markets. net

that and is portfolio overall, between there parts our market of is there variation even part have significant pretty high we though have Now are market that occupancy to of occupancy.

XX.X%. at at Seattle the same Downtown example, is level. San Francisco still is For about

that, are offsetting level. the related areas the have that Angela below areas occupancy that occupancy occupied alluded And as is and the are same most And that very to highly to, level. so, are of supply average don’t actually there we

as imagine, the apartment As right great cities be getting equivalent units. is it of of are the you’ve you the financial time to great worst and equivalent bulk the still to supply a December, to if can not now, part got of job delivery. the And negative therefore, crisis, delivering

you have supply have about, that Angela growth do So that. hit are is, doing markets and this understandably the Offsetting confluence is which spoke negative that very cities well. are and demand that we from

example, on For Ventura, where a basis. rents are up market year-over-year almost XX%

we’re And lot these so doing pretty in of suburbs. a well

to X.X% is which many below Now rent-to-income. that leads rent Ventura now to XX% issue long-term more its the talked its California us. – this Northern it’s like long-term think to And incredibly increase above important in rent-to-income, that X.X% historical it’s average ratio I of average Whereas to of of this is rent which X% were about XX% income. about I times, that is – with interesting

when the go is are changes So But is. like, everyone consumer’s a the view opportunity hey, suburbs And I in rents question long to do would essentially hammered at lot conversely, of where that. the the the when this going looks up a rents better. cities, it ways,

rents – the back are is where very term long to so towards movement rents high-quality a And where areas going affordable. pretty little that our cities see are longer bit view a you serve significant

Jeff Spector

the year which very full providing you. is much guidance, to very Thank what is Essex That’s helpful. that led appreciated? ultimately And

Michael Schall

a number – there of things. it’s Well, is

philosophy of on weren’t a come guidance being candid. perfectly a an I’m if different I I wouldn’t ex-CFO. decision a Barb not kind – have be whole to to that sure have have and Angela And here, We

be what then And I you But the sort presumably, to always the preference us. but and to it’s – us you have, market. with information can yes, pretty up than lead is So provide all of better disagree can way. open have therefore, and we to to our mean, we

philosophical and the So I position it took prevailed. that’s

Jeff Spector

Thank you.


Thank you.

question line of your Stanley. Our next with from Please question. with comes Rich the proceed Morgan Hill

Rich Hill

in you all release the for Thanks in provided the guys. morning good remarks. and the transparency prepared Hey,

reasons on good the of struck starting did One think is of job rent. really really that that evaluating you over the things us early I one guys the to you are And occupancy alluded manage is through growth. going little is maybe be peak that’s sequential a think the do you season to think And XQ and going to recognize said some see what’s think it a bit you’ve that? down going more little But on drill your you to due bit. in to are want coming leases this to that due, historically I a that XQ well, do challenging you be occupancy demand leasing through tough, the but be not to how that? still I when through to manage how you’re is up going How you to do coming leases you sets where is? back as that

Angela Kleiman

occupancy right? I so our debate would I detail. and do something meet go just Yes, the playbook we hey, revenue, we whenever in it’s certainly think don’t want maximizing we through that Angela it’s internally we strategy, I here. with That’s on Well, the focus and a and tactical optimizing possible, good question, say market. actively to by

on that we point the we to quarter in right you’re us allowed the the concessions pull back quarter third on which focused on as we where see given so occupancy, are, did fourth market And stabilize.

And the to to pretty mentioned heavy use of and point this that in in I continue to, will which continue CBDs half the we course, assuming be subject keep back on the supply, to year. in mind, is to And so the really how whenever recovery of as continue will at we course, a market performs, goal that’s of And back the the pull concessions strategy. possible. see to try the

come play. into those all So,

Rich Hill


have I equation, the on I – would but just to of – wanted want love growth. that appreciate you the you I think other I I the wanting to. side give not you away. the appreciation to why for job for playbook might too, not

things always of by sure believe versus mix that, One I’m your not I base. the it the urban portfolio, misunderstood in suburban? your class appreciated or about investor is think not AB that’s is

maybe markets maybe suburban you B renters can break growth, type job urban views of white would jobs job to collar, the about think relative down in high-paying class – markets? in the growth you rate class versus when So high those that

Michael Schall

is recession, is this a it And we I California Southern view less on little talk and in Mike. is Picture different. more as it’s California. that And a incredibly calls Southern normally, didn’t best unpack Motion average is as has certain U.S. a this and our effectively I prior and recession about sector In it’s lot the typical of is it to therefore, big in this there We volatile. the Every like And been bit we it Yes, generator will sector. wealth can. have question, try the so to time, volatile that shutdown. this

probably California so relative prior surprise And biggest recessions. Southern to is the

For the financial in rents about California example, XX% XX% Southern down went for crisis, versus Essex in about in market the portfolio total.

a been Southern key down. of like the other think looks low the of the lower California. And the those of the I at these jobs restaurants mainly income base, job it’s it, all of services So parts plus time, are sectors and jobs. of jobs that California look demolished, all it’s you business and have it’s Northern When two because segments hospitality lot this and again, entertainment filming

cities which On the the XX% even somewhere in means more which even higher the are concentrated, metros, range, in impacted. they are

So as more coming got the cities. supply said, have into you Angela

concentrated are when you tech averages, you the that think that And in the into have job that worse averages Again, things you give we are happening. go the You cities. when markets, I north then also two more growth. have these

greater small suburban Google through have, that nature, You has and all Bay the from has suburban and that that is lot Jose I peninsula And that and also View, much Facebook would jobs areas been from flexibility the in Seattle a Area. allowed greater margin San where But home on in – the that work I greater be most say, downtown those Those areas home is up the phenomena. impacted. think of have area. in Mountain of generally is have located that right service work would are you

fundamentally nothing because The venture couple a of things being of prepared The demand. by and wrong is I being the lot tech as So lots invested, into big think the is companies business in companies, locations – the I made these Picture technology the remarks, buildings. a high money any of that with businesses. capital Motion a noted looks so investments still recovery think of like there

we And think terms come the I to looks some fine, office to so in extent. companies broader economy of everything, need back to those the

– always backfilling is people there and take retiring somewhere their going California from home selling college jobs. to else high-paying expensive then need coming and graduates also again, comes that are We

concession then things that seen I are left doesn’t that relatively there, So I yet. the things haven’t then think and to occupied. is to starting the going soon, stay, low-income the many jobs backfill up, and either that It think it back that put fill sort can’t up have solidify XX-something And see are but to because next mismatch of they we pretty they I leaving And given. a in take the stay start think think abating will or tighten to afford that percent you’re there – in – quickly. I we’re

helps. we that that’s Hopefully, see how it. So

Rich Hill

us. That’s lot. information One it for helpful final to you than a a thing say more core strikes you have when me, me

true. very that migration are I if think could months. anything markets on you would in specific you was your provide coming that’s that I in the there encourage you trends population seeing

received. always, that really But I I guys. think be as really appreciate, would the dialogue? well thanks,

Michael Schall

information. prior give similar is you about which Sure. focuses yes, it. on migration recessions recessions, term, short I No, everyone very every a And happen the was every could of to to we’re happy to I give bit And was again, little where and I I about decision how XX years, I about live XX, XX. XX I’m hard when when XX I am XX different want work I things. make now various a years, where in

it. so And part that’s of

of how And their people what lots are of changes so retirement based variety they’re on close doing they to things. a life in and and make other

little into the leg first still our New even metros. always some typically a and bit of say market. XX every it’s dominated We other in outflows, still – So happens York and California by about just I inflow, markets of different Boston what by what migration is around lot you’re of a recessionary the is period. But a and terms years would seeing

Sacramento, Seattle, metros it’s eastern And Boise, from outflow. terms lot of a California the benefiting Austin, Angeles, three example, Phoenix there in some Las Francisco, Austin, So to few and of better from cities. is from quite San and is In LA, highly and really is other probably cities. for weather Phoenix, maybe Vegas, Los Seattle again, people San outflow all scaled Francisco And workers a moving for California the in whatever. in or

experience consistent that but LinkedIn – our hopefully, That’s data pretty that. with So helps. and is

Rich Hill

Thanks, guys.


you. Thank

Amanda Our Baird. come with with question. line next the questions your of Sweitzer proceed Please from

Amanda Sweitzer

a to occupancy bit Great. the question. you have kind you you a Thanks pickup, the have I where quality you seen sense you over you for demand that want taking have had seen more of properties do move from have near-term like taking in on dig just market as renters in little is cycle? other from? have of Are in or last coming share the really demand

Michael Schall

and I face it comment let out a battle it’s a in will but her there. a think, Well, happy it’s I put Angela, minute, on

said is plan So I say maintain use our little high as that have look is and occupancy, all try competing a say what is to to, when be the to time we anyone. we different taking coupon have like And of we are anything I’d focus. will we protect what again, concessions have aware year going to maybe battle and and focus it before, ahead. of rent, we from – we are bit all wouldn’t fiercely

this is So I a think think that. don’t I any do situation. good current there of winners in we But job

achieved better better down the ugly think toward leases yet. said, is why to will lag Angela ugly. battleship and road, look all-time the will leases quite look cause we that will slowly are lag turn – in but which see year-over-year as to but apartments, getting here when definitely and the our So, so we things it’s in the a QX, I and it’s when we hit us day, getting Obviously, And half. of in are QX better. We the trying your second terms not high

Amanda Sweitzer

up, well makes more age a can lined as provide those at of pool either to you profile in on And that changed the pool and assets location has color have just sense. turning if disposition buyer the or that you of terms Okay, of and pre-COVID? as kind then buyer then all from

Adam Berry

Happy answer. yes. Sure, Adam. This is to

they three, throughout those our for are So portfolio. situated

– use buyers. cases, In the three asset these there – where effective a general would concessioned are to an cap net were is so it so of way no type underwriting of kind as kind is it’s Area, And just are. there in the heavily rates market to Area you exchange are. as peg in given all overview from tough to of they say the And current three Bay example. actually a we of Bay It’s really one and rents imagine,

like so. that’s so it something a that the So ways. we low on about couple again it at concession rents. pre-COVID looking heavily Bay that effective underwriting are kind in-place One and of pre-COVID of based net is X.X, effective current a X.X deal, Xs, on call or different then in market. net And on is current It’s today, numbers this a Area

spread. in the And quarter. the underwritten fourth was so that’s That

that’s – – there is but down. of before So has a cycle, enough continue buyers there concessions during be but where ballpark, there they and that been little that go market the are a to different is market has there the and sense, out than deals have transaction – typical varied your still set

Amanda Sweitzer

all detail. Thanks. that Appreciate


Thank you.

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

Rich Anderson

are Hey, congrats to everyone thanks. too, and congrats Good if and you morning listening. John,

of I feeling got start are then when people when to some just back perhaps some could normalcy? paying like Is burn start of but people a expire, kind you that wonder there moratorium, a to pay. risk to am swath to occupancy try say, in some messy making I could agree? of they be to the volatility mean, of eviction start now topic that we see On time I things a again, leave because they I if me off get you those sort and

Michael Schall

we good January rent it messy Hey, want June. date residents comment looking very in Back which way XX again Angela COVID as and SB-XX, to of was Rich, to XXXX in their to but at pay affected the then this supplemented SB-XX it to because it’s a was was August when And passed evaluate maybe think January XX. I very that much we pay ABXXXX, same way. Mike. required – by I And residents think describe to XX% by well, least ruled are –

definitely out that larger play all getting whole – pressure enough am is it XX% to how I the And out. figure smart that add So, to situation. going and that’s not to will definitely

of We federal are B all stimulus this hoping money, have that we type a mostly portfolio.

terms would we the would have the assumed quantification whole from have rent potentially would of that’s that of of don’t XX%, so than we to any because but help lot we’ve it And what in lot and that whatsoever, away walk better a a but XX% our certainly pay unpaid delinquencies.

is So kind maybe here slightly given little And of yes, conservative upside to there are normal of I think terms scenario. probably the in case a of we SB-XX. recovered bit

had the right, don’t know I answered, absolutely know don’t answer – for I but to how I it. that’s sure So are you

Rich Anderson

once didn’t going have residents. of markets, that factor you are better you I I would a very of maybe driving you but quality, then that’s quality. that the obviously, more I talked feeling gives you largely your bit trying on And might portfolio portfolio those kind characterization am easy wondering necessarily it’s the for terms bit that your locations from portfolio disruption of And is urban of a that of like in if again in to me captured a Okay. B environments core, a to surprised flow think being removed it’s going the to something of there sort with am your B little say on perhaps downtown say, little that do optimism a cautious portfolio about sort of guess say your characteristic not kind to optimism? of lot the today? in the some

Michael Schall

worse, hey, it jobs – financial as looks it lost many a the a reason get and XX%, the nation why is, then not that yes, I is as I that. Southern XX%. opening like it hit I are being am crisis. guess optimistic in financial we down there a California sure rents put in the say I about point bottom yes, And did we’ve the think Seattle I optimistic. in this if better. little pummeled, it as – lost But market and I little average said is, I still in were we’re was I mean, our that’s the has mean, at script where crisis, after wouldn’t optimism

of think would I we we to kind number extraordinary are the expect be of given where lost. we where jobs are, So

as lots same the financial in with these crisis the low city wealthy of lost at and levels, you’ve the not it’s servicing they’re service Now end in very various clientele mostly that money. jobs,

are and of for shutdown is a those government. So it’s just robust service there, rents aren’t stuff gone by all have say jobs a would because but like And this I seems of surprised service where jobs same. COVID recovery direct in vaccine it mostly focused the I the really because hope lot COVID losing I distribution different, outcomes, that because am not just about general. with on they

and that think to dinner type eat So back I go pretty because quickly people I of come to think do stuff. want out

soon think And come obviously. I it’s back going hope and I to so

Rich Anderson

to then that, the in And past they it is tag a say bad look actually to so take when you is it different? year, actually hard the just this because against in of your and at terms the or not hit debt of this XX% become collectible, delinquency, cycles deserving is one $X.XX real all just reserve mean, Okay. what’s kind experience quick of on I really

Barb Pak

cycle. is delinquency our Barb. Even of other was cycle during only crisis, XX basis than financial this This any scheduled very different rent. to the XX Yes, is points

the is lot where which been X.X%, last of quarters, couple we at have being obviously is a higher. So

any the at that lockdown was that I really my going in to compared And to in a did reassess a our quarter where environment. script, take the think run that’s We alluded and quarter, QX will we pause. all in lift. knowing things when and of were And are of into $X.XX to reserved in January, state – take against We for fourth that really goes. the rate. as decided severe the to that most to and then I see was historical not we really of due it,

for This that. SB-XX So June. after do foreseeable happen protection then And goes elevated. what’s delinquency we moratorium, the we eviction future, expect to to until know remain going don’t

of lot mid-X% paying have us people that getting of assumed both, combination a to don’t and not on a range it’s not progress we of So can’t we that scheduled delinquency. make we the because collections It’s kind collect, of are rent.


you. Thank

Evercore Our line from of the next ISI. your question Rich with comes Please Hightower with proceed questions.

Rich Hightower

good Hey, morning out guys. there

Just one from a me. quick

reported revenue the with But treatment FFO. a given to respect GAAP disconnect concession lot same-store FFO, this just on have of and versus accounting and We ground. between cash covered

June modeling So of understand about if is assume we just Help XX, disconnect let’s into of the think concessions when thereafter the like? between in that outlook. that stop think shut on XXXX, two sort the cadence we which sort us series, down I would sounds it concessions, say, sort as implied seeing heavy of you the

Barb Pak

– you the don’t core growth at FFO will to will given And the the but moderate, moderate. have where be I on it this back in Well, growth offset benefit do see. our we core Yes. relative to will but XXXX of that revenue to expect you not this half guidance of to in I concessions growth year, give the at point. we same-store property that But that’s this abate completely we that FFO concessions growth year mute the of will and time. and to happen is so two the same to last have then will something quarters that expect can not will amortize And XXXX line straight see

Rich Hightower

say, through a part that like or of But that, the XX-month timing, is walk assuming concessions something are while that still this there mean, that FFO way of would just for the point? or out – okay, more the far right. – correlate by Yes, or have this sort it point is guess they there heaviest. is in XXXX I frame to Thanks, you I historically, lease reaching in you could converge at a would it too way see Barb. way same-store to and

Michael Schall

is this Rich, Mike. Yes,

rents. of optimum pulling And increasing trying something effective Let it’s the for this, because a so comment we to can here. like me changing in add is the more rent back everyday find she net But too. concessions, levels, battle constantly Angela middle are or

And so impossible that. model it’s to

trying I’d good job And out. say, to of to that trust so do a figure us

result, spending is a are the and probably you little a tell Everyone respect that answering questions. supply people spending any And just you going exactly here very, we different, And units. tell you a going say, you been could happen. daily time, pricing is based is tell on rent are these demand the I’d granular to have can’t time long bit a is, senior it’s that have I can trenches to long. unlike people what’s as of We imagine lot in a say happen. And mix reality something, on but to we can’t with to this that as of too – you But it’s for guidance it be can’t other And many concession the changes too is and our seen. basis. of that differential We – very change. period difficult really I’ve


you. Thank

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

Alexander Goldfarb

Hey, there. Good morning. good morning out

we’ll First, continue congrats. to

New York, CEO point new planning, to roles, saw we I that’s Avalon Barb, Bay on obviously, here it. and your mean, as sit we Angela the succession So But of Mike, wonderful. in do

You to wasn’t was outside did being on guys groomed. when over the outside, a again, number like. the John that what from ago Keith years that’s But that of it you. It it reins did handed the seem case. the looked Maybe

at just impact this Essex? – of in senior to roles the to can that any up succession? not? people just senior come a spots you does this bit to more other Does little talk it this raise anything, may about open you CEO groom allow more up So ranks this And maybe impact or opens the

Michael Schall

John question. Alex, them, seriously X I’m important. capable have And beyond good have one, fourth quarter take I pleased live him. executives around a pretty And we And are change was you to think quarter, plans me. a all and bench. about late of when third succession a me And even surprised that planning really really lives the make need very, sort right Yes, It’s We I contacted look somewhat we involving I super as him deep for asked very our thanks reconsider. of to early I I decisions.

agreement And what about up press so decided took it We just going long been what his with come going the ended time it we too on took could finalize that going to to to after course, like. have was look the be forward. earlier, was much and probably release Christmas, role to to

tremendous a good it. done said of and company. John we of optics hearts, amount is our the Having part him the He’s for well. of a certainly, our apologize And company. he’s in So that, the minds always and forever wish

paths and or we succession pass path open. – the finance. up. as and I basic So too, historical then we through through to is been came be think other operations but about job CEO planning, philosophy finance the or through maybe doors the the And the through always then mostly including are ops to ran want And investment. has to open

of those to the Angela, experiences of making thing. talented my of CEO. to interest the So to are pads have don’t open blocked moved jobs of them let of at in around by the don’t sure rive – the down them up below and were being primary organization. That’s be and whole that in that people, see their And organization. in that one key it’s people way kind Barb, have the of they wherever off case on diverse looking keep we hats the backing And John, people all that then

So to that. have And a proper has we process. to the in continue do way that’s be to succession I think to expect it order

Alexander Goldfarb

investing elevated, average the And when affordability all-time has something then affordable. mentioned that And whereas you abnormalities suburbs, perhaps are definitely second rent is, interesting the hallmarks Mike, in market. of an areas was higher, the in been there one the the is the at of below index Essex urban more question the Okay.

the However, you more urban of and out guys areas been suburban. have sold

pricing done or the wouldn’t are So does sell dynamics you want at have work now you where to imbalance, more make into and the what historically suburban, urban this this maybe switch with other do prior affordability there to would get back you pandemic?

Michael Schall

done. a give that, Adam lot I’ll at he’s stuff fill then have of because detail, no Maybe a he transacting there the I he he’s out on in of Because is. credit in I’ll when lot comment when looks – and one and else

And so And are some the close it’s transactions done, to the pretty accomplish. to of we’ve think period. we to he’s pre-COVID been what exceptional I able

you do Adam, that? want So comment on to

Adam Berry

Sure. Yes. of you’re looking what gist And Alex, hopefully, for. this

at we We at are are all looking always times. – markets our of all

deals of we of of time. during prior and significantly for was we the that pricing recent so recent Francisco sold And that most those done – reasons, we’ve Eteno sold – in to at sold downtown what LA to a those this And sellers. back in-place CBDs. and And period, variety San dates been those NAV we’ve was during COVID above in our And kind Masso COVID. primarily the on

rather at of are in stock especially, arbitrage felt in densely what we later. locations, portfolio, where and other San heavily than for will and been in the suburbs, And assets those suburbs be reinvest coming so future. really the make existing quality in CBD opportunity, see we from sell challenging the, LA, say, buy or the and the in the sooner back of Francisco in right populated decision life, to that’s challenging very an that’s our either much locations, standpoint see Many back was we what downtown of likely consider, call here suburban foreseeable Soma, impacted time and to has continue where market we we

that of sold rent I see there been year said, where are. net we’ve said, we’re slightly growth, do and we’ve some this a and we’ll pre-COVID into we a CBD, But sold NAV, deals and I some year constantly if are last we’ve significant basis, been above, where like within our like at X% – yes, then sellers below. have good all we buy I So opportunities we in assessing And mean, here, the can that.

go the and So we’ll strategy assess philosophy right as that’s right been the and Mike? we along.

Michael Schall

me with I CBDs interesting score. say it is hammered best and have well. areas The one score best add rent terms walk have of real And have the some walk growth been briefly. then the Alex, the walk to maybe more because score issue of thing, the just the pretty worst I’ll places the that rent. in

everyone suburbs just believe my referred Adam a are nice the those haven’t will. will the highest gives ask crime, and surroundings, having location, is to. low walk be matter going in lots and food you sort And just high-quality etcetera, pleasant walk important. entertainment I score So themselves question, to view of But of may options, And it to not that to continue And is needs nuanced, a score it it the be ever will best again? rents. be


Thank you.

Mizuho. come Zach from with question. of proceed questions with next Our the your line Silverberg Please

Zach Silverberg

Hi, good morning out there.

Just a me. quick for one

terms correlation context your follow-up earlier of of an in how for and the around you and In lease you you’re Maybe little to are you quantify looking talked remarks, VC lease-up specific investments this one. momentum job postings time give that? in a a prepared bag Essex that Is a your rates? about on supplemental Just or able there sort in historical or market. can or

Michael Schall

the bubble I then close. is to even is I that I of Dot-com and living This Yes. what see experience say would that bust. And Mike. relative have the not through

compare at level, very X in income to rent period income very high level. about being rents rent affordable. During the real in contrast rents of down all-time XX% high set percentage surged And appear Francisco to terms earlier of said It dot-com that so is bubble years. a rents income number which what and our I general, San to of XX% at somewhere California, financial And in take to compare around average. rent think terms a our it we XX%. I I below long-term crisis, look – got Well, about that of I Northern if average the in affordability. X% of the about long-term is to if

Northern at in So are XX%. we California,

and at living that rent and at affordable, high much levels that pretty where at because these are feel changed support point So again, are to areas a now starting the jobs, income, high-paying the pretty has doubt cost I affordability etcetera, high overnight. dramatically jobs, companies to tech are the going all that of

between the have we is income, the XX% hit, do XXX% And that that in look back. are and many at between Ventura, occupancy it, well it’s game. again, units said hardest the It are the markets the band I to in. change way band doesn’t we take in green demand of And and we’ve long-term the that and then come zone that to take apartment of XX% rental in to we that’s closer historical the a Now been can different the XXX%. kind whole we new of But XX%, average. XX% the above

– the renters make, it’s that will it I choices change believe. So

Zach Silverberg

there Is on. I that in the it. of now, color. not at? any guidance, have there? guys Anything just the Can there? In any guys you one really you appreciate I development. you’re you guiding just future any looking are right haven’t your comment sort opportunity maybe color that Got guidance, follow-up contemplated quick for just

Adam Berry

is this Zach, Adam. Yes.

pipeline to And few exposed a of to at as and can through do they kind looking work well, both constantly pref We’re opportunities. different each other. quite development we feed get of our off

a as of couple pursue actually be have spending where now we’re did right potential away seriously last at year, predevelopment We to there we in minimal well. but deal looking predevelopment fairly We walked there from a deals some continues we’re – stages where dollars.

other good looking center suburban yields income. good also for that the The speaking, generally is job opportunities. now we then with potential, life, And three looking high-quality of situation right or really are One development a very are we but at unique one really So two location. some these are TOD. well ones are existing located, is job

bill. one So looking might and at the or fit everything two


you. Thank

Our line Capital with proceed Malkin with your next Securities. from Please question. question One the Neil come of is

Neil Malkin

One one and and for well. morning Adam for as everyone. Mike, Good Barb congratulations you. Thank questions. Two Angela also

understand the just First, you the that want in about kind guys looking I of asked terms like of looks what your X.X% you been at guess covered? I assuming and talking second I at starting sort recovery then think jobs I around you sort XXXX. in in half. look that back have XXX,XXX lost guess million of like are the of to markets, timeline jobs. X.X main because get about Essex you’re And to like, to or

be level with years pre-COVID. back get a under will to kind that to So of of growth needed little a commensurate X

see those in think do the sort And that, based second things, that be about very of this to just are pricing? comps recovery? pre-COVID after But on understand Mike, we of So you the kind guys do half year how again guys type I are what easy. going of at you like

Michael Schall

in occupied on That’s lower are. San job lot Yes. the than Well, Francisco, great question. we be losses a based example, should for a we really

move Plenty the of rents during is high. better will Francisco, And San too so happens are recession what say, live hey, people areas. into people closer but in the I would the

then And make live is a the around approach. backfilling proximity so in. say, San and hey, choice, those with different once they there a this within commute happens, Francisco they and they rents, And

What I that way obviously, and you. natural another with that way consequence beyond beyond is, happens, of that. so another agree And would there’s the then and

somewhere out the XX% And in lands Area, on areas there the this the that is so with being income has we rent and choices And occupied career hinter because my on ratio be XX% pricing. absolutes periphery been people of that occupied, harp different based on have this are again, and one not very Bay why you to make the important.

live of then process So moved let’s Oakland backfilled, in by backfill want have people and moved number that San largely the And has to people been further of is from, out in Francisco versus the ongoing. – but the or out say, people that city.

we here lost XX%, you just So mentioned. at those all that are jobs having

this to city these and maybe then does these the itself? secondary of be moved jobs of into reverse year be markets. in how priced does is people the be for And so when those question a will back, and And will city come one happy some it of the will how out this live

price right. keep and part maximizing absolutely things during way let’s we you’re high we’ll because of periods. less high, occupancy out back, we keep So of for But why draw to we come again, occupancy suburbs you revenue – if wait and and the say, to the, our it that price is people demand – of the is this desirable recessionary

Neil Malkin

appreciate that totally I strategy.

like totally I think occupancy, market at – XX% to doesn’t the that right that terrible. great rents I it’s – – trying it’s you one. the get am above have are just I still guess, but

guess, that I yes, you I’m I like just you mean saying, got if the trying that’s I like it? portfolio. don’t looks apologize to I that, for like back? assess don’t hard – can’t I XXXX, of know, I’m So give XXXX, just I like what are kind know

Michael Schall

be we you can. And spot is that I are to concessions would how to that you order won’t can’t for you that can that because I it’s why can how concessions tell I away is all mean, unfortunately, I in do quickly. able as But reason can’t pretty you quickly, on. typically No, tell we to specific I many that do of abate what as They we quickly. tell tell jobs going about happen. this. quickly the that go be part can you just they as and take what happens

a we’ve were? Those that there, would centers the to guess. much. the of is a to stock, to they demand. get rent but And it continue X.X% take some out, the have major to a of a tech I battleship, somewhere in lot the as get which or housing where will stock the is it have of factor, trajectory, component where help overhang from them jobs year – issue, do. – to most doesn’t take of a a that long or than take again, some our and more going We mean that close people shortfall is we and back, markets think locations gotten bring are I enough are we whole units. as just straight-line hope live we are. lost a to lot But have we decide going argue going I how get still I it’s I’d delivering apartment at least but the what and back job nation, we mean, will muted you is pointed hire was urban back it’s single-family two lot. we and that single-family percentage level the a different to companies total it like around to production so lot a is to of And are

so I the that up. guess restaurants I And as open think – would

in when We by, all are to be surge coming a going would are I we these as but go of jobs, happen concessions quickly tell to quarters happen. going cities it’s that’s into to updating see what going will back people and and abate is think hard this the service exactly to pretty


you. Thank

Our question. the Wurschmidt Please next line Capital Markets. of proceed question from KeyBanc your with Austin is with come

Austin Wurschmidt

guys. Thanks, keeping I appreciate going. you this

macro great some uncertainty. and detail a on – posting the of release this jobs also all lot the of So and despite in forecasts of

aren’t your of temporarily back for how to seems guidance even are some patterns But case. Your people certainly campuses didn’t or contemplating that their or lose account does be coming response left markets? or to these that that a the question left the portion you your on migration market residents jobs students in

Michael Schall

that the It live people they that same demographic they in doesn’t. that time we about I longer, to used there mean, tailwind, tailwind is a of a sort retire. assume and really at retired

live So longer, consume consuming longer People have jobs. they houses without retirements.

to And going us so that’s is a of as be live demographic tailwind that there’s that, long as with presumption sort a longer.

the data. than that we was are terms have It something that, with of question don’t How used lot. I the a In to industry. amid lots remains a not. left both connected contract back that are granular But being tech more that contract too. people and and out workers focus we’re many on come workers COVID there. entertainment those industry know and a lot of of John And There of those really

We a aggressive workers negative XX companies the here unfolds top So home I little spot pretty view it pulls of a saw hiring. We tech And the at the of contract everyone by the more jobs, open than the which less demand by a was think here, don’t go become represented as the But saw and bright all if like on in when to employers administration to bit there. drop-off there’s we at jobs up kind Trump in that. a that’s immigration supply picture of up something get uncertainty help might or ratio granular H-XB probably the probably That other will try will visas. really bit, somewhat. bit XX% I open look drop of total that.

Austin Wurschmidt

expect pricing half appreciate expect maybe because or of mentioned levels concessions if that the back reverses the see release you of No, this put demand the helpful. Do effective it kind kind the you the but year you on year? don’t does come a the early and run was could the you later of the year I you in Do improve in think back net hold that. part quarter? that’s achieved we point provided the XQ you pricing in that, first finer in thoughts around I And in Okay. the year, of in there. that then until half current then, wondering Barb, high the of

Barb Pak

effective about talk to... and want you Just renewal you net pricing? when to the Are referring S-XX, new

Austin Wurschmidt

correct. Yes,

think effective you this were and provided I net quarter. before data doing gross some

Barb Pak

can I second the talk the half year. in pricing, the consistent think the of half concessions about guidance, assume relatively we remain in then but the first year. moderate do with of QX Angela And yes, for

Angela Kleiman

Yes Angela here. and good that’s a it’s question,

or January. think end I at the the On about fourth year-over-year. the of quarter it pricing, of December, is troughing And second we was scheduled by talked looking I think about I quarter rents way that Mike kind talked market troughing. rent currently, say of And because

And so may little be a different couple factors, which a confusing. there is of

reported concerned, far January peaking as is season. lower Keep we to in see currently also the this as toward mind we what So – do pricing in hold. is

being about economy and second – to month-to-month. hard – the So if as progress that’s talk second talked it I’m sorry, But why half of quarter we reopen, kind about year better. we it’s we the to and improve, of continues

in position allows occupancy concession. higher our strategy had good us and we employed right the reduce which because think I we’re to of now,

the And what so targeting guidance that that’s able continue year. to for and our do to are we’re for we


you. Thank

proceed with Our next questions of Please Nick Scotiabank. Ellico question. come line with from the your

Sumit Malhotra

but the we is understand The for know of in month-to-month I asked cadence Most QX, problem. was actually happened to year the guys. in here look XX% leasing. guys peak August, you gains XX%, in the a stuff, wasn’t changed. your all want looking differently, burst And a thought Hi, year sort this September. July then This apologize, at and same QX. how Nick. of occupancy questions Sumit just I sort in And XXXX of occupancy I split normal at for of I bit little sort

offered in kind also Day You frame. the time of concessions Labor more

concession I’m look or sort the So more inquisitive leases you is perspective, the side, it everything the expiration QX. from of weighted of on vaccine are normal towards turnover I shorter and guess cadence of – a schedule normal leasing How everything invite of sort lease at if things if does kind in unless you just that – aside, reset that?

Angela Kleiman

here. This is Angela

the for similar would case, about asking to the itself you’re your of cadence we if that our leasing somewhat season, cadence to that’s be expect and think that question, I years. if XXXX prior is

with lower of work. number say – we and kind the of also but the times, closer leases that’s they sale our turned those have would during most would way peaking, peaks the by tend we July. start to up to amount so more And because probably – say, June least for part, on leases occupancy concessions, they during our And we time, slightly expect, that we later, just end the markets, depending around may

when year-over-year the XXXX better you half. for half trajectory I’m because Because of second sorry, kind reason that our of gives does about and happens comparables XXXX because than whole – was year. the in and that the much trough differently what behaves the year was last second things of of that talking COVID we’re impact But half first So terms business.

for And flip year-over-year of and so half you be harder growth in first will half kind easier. of second that terms of have be XXXX much will

Sumit Malhotra

it. Got

more little hear. on A yes. Yes, is clarity what to was cadence Okay. what I the wanted

So, minus of the macroeconomic thank highest appears X.X%, lowest and you. we team. And to Mr. Northern your at California I in at at but it X.X%. like look Morgan growth growth job terms when the forecast, rent that guess, kudos has Paul

activity a is So we in the lag I the related concession there’s to lag. assume and saw that XXXX hyper XXXX.

employees from factors also And are jobs California, of or from companies there. so the But have offered whether domiciled for sort wondering building you’re in sort been flexibility but of anywhere. any to you back that I’m discounts guys created have work the by

effective that rent of forecast, X.X% kind into factor growth in is forecast? rent your So negative

Michael Schall

on me Let X.X. comment the minus

rent differential the market is year-over-year, year-over-year. what that month, each that what is represents effective So

prior if So going obviously, year rents we’ve big were in at of current year, up, rent. had decline and look you again, this January a the

to number a cross start a large half negative going through And you end you second lines as So the of in are the then with in lot easier year-over-year. to going January those year, comps go with because we’re year. up the

of trajectory And is year-over-year. so it the really rents

January, year big and negative in go with out. to So, it’s positive going that by all start a going averaging end to of then a it’s the mid-single-digit and to the

Average January January, all rents. projected over minus February, market out that to over So X.X. February

not of really because be down So highs. – we’ve Rents start it’s – year rents concessions. we have It’s prior the year were again, to lot. intended all-time because rolled had a the

then for And get would So September that we we year. as month get easier When half comps this positive. August, much first we all together, our July, then minus make by that – hitting and you average X.X X.X%. into a sense? start of the month, be start hole in Does you year-over-year

Sumit Malhotra

growth XXXX? built say, then as Yes, in work-from-home a a in any being model flexibility as job driver does you got factor your forecast early far model, let’s as that of versus, that that And it.

Michael Schall

as well have will base case that question scenario he and is work-from-home But very very but specifically Paul ask about aware a I thoughtful our well people he There flexibility scenario. CEO have what this are again, is guy being a act working didn’t and is that this greater concerned to of team from that able many to home. again, of But organization have so all a pieces as in dynamic, unison. company, this accomplish. trying to we’re

You’ve got to know the people.

say, times and all a I teams, no jobs. workers estimated which was in property works that of There our There’s home example, forget from those they that There was X anyone to think from including, model that’s have subject, these that sure, far, have the at restaurant, lot happen probably where for flexibility. Again to on to going away people this so let’s And week. etcetera. be read you that think kind think for clippings the thing. lot I time, makes report greater a what – far such from as no XX%, am I unlikely really but are is of about that office about believe going that We people. all because And they’re time news is hybrid excluding workers. a us what’s this in going to to flexibility that, of be lot X, to work-from-home, work of a proximity, to and reports of the a

think going I so it’s again, have flexibility. And to we work-from-home – will more

centers a and the where city though where And and tourism the to desirable. be, other to going are that’s so little things. bit is great Even restaurants baby, going all the are that’s less continue

better little bit – but a maybe So that in the do scenario. suburbs


you. Thank

is the question Street John come of proceed line with Please Advisors. questions. next your Pawlowski from Our with Green

John Pawlowski

leasing assuming occupancy quality your and few Northern were are a Angela, Great. comps just taking a season Thanks Are leases the meaningful months our in leasing portfolio, expire. for just to X free questions of summer that lot I when am question. into Northern X spring for and thoughts occupancy the given my you California? in occupancy slippage California heading you peak of on so on curious

Angela Kleiman

were point, say, That’s who by, slippage last to not a going re-lose had their They because job. their income are their the driven lost people consultant At or lost switched that occupancy the seen job. question. good They likely job. not already this year that we’ve

lower and don’t so of – and – deterioration And further I levels occupancy Northern is from our sitting California significant that. don’t at so expect already we one

We have occupancy able there. to been

so And that’s good a sign.

I we continue that. expect that so to will And do

John Pawlowski

of XX.X% well is But occupancy. Yes. north market

have mean so on-occupancy. there an private lot of I And a is that competitors

out I So lot there of system, of in is coming? but kind is as reset your pain in portfolio the occupancy the a know any it remains of concessionary,

Angela Kleiman

don’t that. I don’t have to points pain see CBD, related more major CBDs. But mind, where supply. much the lot a in we keep – of And have in some you the the as

going competitive to And out so be well, it’s still there.

dismissing not deterioration I’m occupancy portfolio. So that. see our I don’t just for further meaningful

John Pawlowski

think the gained portfolio on in include you concessions? could lease right Okay. now side, share And the you then what if rent you Northern the California is

Michael Schall

You are cry, making John. me

Angela Kleiman

a number, you I that. Not can tell pretty

up, okay we January or January are – number, in to So yes. close

a But to Northern for in right, X%. is rent as or whole gain-to-lease or low and I So little context, seasonally fourth a do has about loss give like is also in the important while during market because quarter, periods want first higher an slow California metric, volatility. the much quarter lease

something negatively we it’s it’s well metric. it would people point not as this So not ask not us not average too is them on, is hot, which It too hang because our want we cold. impacts whenever to hat meaningful always at

turned Obviously, a time. a volatility of larger smaller during time, But December So and there during of magnitude. isn’t this great. this lot typically, are number But this isn’t leases number great. it’s

So volatility. that magnifies that

Michael Schall

let And little me add a color, John.

overall, more like the in X.X% it’s December, X% And about So gain-to-lease is on a every range. typically, portfolio. almost there the

worst bad for part, you’re again, the picking that. boy So

of You’re first portfolio. the the part picking

And like. that you that broader bit was a of a with little that of so I give to looks wanted context taken broader so view it what


Thank you.

with line Our of McGill the Please Dennis proceed Zelman. next your question questions. with from is come

Alex Kalmus

Kalmus Alex from, – guys for now previous talked We have is their tenants they’re where the come like migration, are about living coming Dennis. but this where a lot that you Hi, curious, situation. on

So through are that situations? apartment to or some parents living there apartment back moves you pickup adults lot a seen apartment have potentially of in younger also came with

Michael Schall

like And I there lot work uncouple obviously itself home I I XXX-year don’t question. that wish right? in the will And of high, the sure home out very quarter So was a a last that. that that, etcetera. I’m that of We people think, have there data from I noted, something pretty is adults number course. at due good had on flexibility, That’s living

live forever. parents So, most want our don’t with to us of

have that’s that, I comes adults one new can hiring piece, am for many but but the college other parents their have there yet. year home pieces. are example, at – sense are time a work-from-home happens employees sure that H-XB new work-from-home, I or quite So are coming piece people flexibility some of typically, picked it. the up contract can the with of because the what back, forced has key But are living is things which new budgets high-tech ones, you of The Super visas in then a that and COVID going how save And with of a and better Bowl money hit graduates, that’s business part we’ll what’s about potentially see don’t really big the industry. part home one back. sense probably and to plans come work recent get you after much of and quarter the Sunday. And have happening. that really go

or are coming I of of can there that So monitor to have are number way follow-on. there back. a we just demand don’t pieces a possible see out that them

Alex Kalmus

color. Got today, And given but administrations, new the you benefits visas. And this you the friendly on policy, it. for last forgive change in seen from hitting point, integration those about you any mentioned benefit calls the far the you movement that H-XB on job is talked overlapping just more do you potentially me have policies? growth any Thank expecting so any see if are you or and earlier,

Michael Schall

lot that obviously, best mean, that do. CEOs that I’d need foreign tough and for workers a I and A the administration the technology coming good around very lot happen. it’s technology world, brightest say the for of, to jobs, of Yes, to and into draw the on I indicated U.S. was the have the from the Trump they America

I more couldn’t a something will recently not they I or would workers were to process tried the of anything I more for policies etcetera, in the I just the because to didn’t it’s pulled I Trump don’t not actually, as They workers, not went which the their so immigration accommodating foreign something any walls, them negative. think Biden up said lot a visas fair open foreign well. But another I spouse they the followed have process to that process in work home mean But the administration general administration and challenging. workers they also make will addition giving saw that renewal work of would occupation. the that building recently. – up that of to Some call. making open spouses the But I they’re more think expect have

program. So dynamic it changed the of that

do do that a look whether be it’s positive it forward to remains a seen. positive, think be I So material will – that, I


Thank you.

from Our BMO line with the Please with Capital John next of your question questions. come proceed Kim is Markets.

John Kim

assumption what’s it Google’s to the September Is far that follow going your are you. office? timing your tech require return I as am not Thank until as lead guidance in of employees understanding returning workers just and wondering companies to to

Michael Schall

remain a to back they of not Again, is that. to an good question. wanted about making one the concerned plan most allowing somewhere their that remains office the that being announced in lease unknown. whole to It’s guess, workers making that their of apartment, back employees that office. been example, They’ve I series states, else and a the belief these be flexibility items, that And We core COVID-related concerned want about sure to. – we’re of lives All workers about Google’s have enough for our do don’t pushing case, the to come assumptions they companies any have unknowns.

into was normalization. that. And into – tech a but toward big told, to made start come the which with of basic step back employees companies again, and no remember of the to all country current ask positive that respect that One don’t we’ve U.S. there’s a good one the their assumption

happens, with much as will immunity. as soon the distribution come that as assuming And normal approach virus the just we to that that become at back will vaccine more these We’re working world both office. of companies

John Kim

of wondering focus remarks operate in? science Okay. am there hour And if the opportunity in some just biotech ago, the an market. you clusters Angela, office strength that the you your more is to mentioned an life in about prepared I of

Angela Kleiman

I investments. that’s an on Adam think question

Adam Berry

investment on side There are have targeted that biotech. development markets life and few a heavily side that the driven we that sciences by and are

to it absolutely, a economy So continues continued to the see we as that grow. and driver


to at Thank like you. There call no for turn comments. further are time. this management to back I questions the would closing over any

Michael Schall

up in sometime But Thank meet joining hopefully, that coming participating a person. remotely. future, you, you Have also call thanks again thank Again, the there in nice the operator Conference distant Citi and the everyone you month in not can we We today. once hope call. about for look of with I day. for the in joining a and many to will forward we meet


Thank today’s you conclude This your participation. does for teleconference.

time. You may this Have disconnect your a lines great day. at