Essex Portfolio (ESS)

Michael Schall President, CEO & Director
Angela Kleiman Senior EVP & COO
Barbara Pak EVP & CFO
Adam Berry EVP & CIO
Nicholas Joseph Citigroup
Austin Wurschmidt KeyBanc Capital Markets
Alexander Goldfarb Piper Sandler & Co.
Jeffrey Spector Bank of America Merrill Lynch
John Pawlowski Green Street Advisors
John Kim BMO Capital Markets
Richard Hill Morgan Stanley
Neil Malkin Capital One Securities
Dennis McGill Zelman & Associates
Bradley Heffern RBC Capital Markets
Call transcript
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Good day, and welcome to the Essex Property Trust First Quarter 2021 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

uncertainty. that founded which Chairman, comes extraordinary our from also strategy of George recognize was company's on XXXX Essex very start call. and year, George want Thank for our from the including this and the allowed the Marcus, XX earnings for Barb prepared me joining here will for remains opportunity today, believe remarks; company Berry, of years in to with expectations the proud and Essex transaction has the am I'll to the effort Angela you effort. execution. Board The us be remainder strength Investment leadership welcome and and pandemic market. then senior of Officer, and that results team Kleiman we to team, pleased of greatly I factors seek in is us today of note has that the Adam us a first to business associated a accomplished. first the quarter plan are focused all lead year ago by from to the and to collaborative that keenly and conclude quarter will follow XXXX and with overview I with position ready our Pak of conference our Q&A. an emerge recovery pandemic often appreciate Chief mission,

reaffirmed our dividend and our announcement commitment a recent company's to sheet XXth the the consecutive growing dividend strength was with Finally, annual increase. of balance

that after in last hospitalizations first our Severe COVID results. only quarter amid a remained to recently Turning headwind cases November a in and the has in abated. California and surge intensifying lockdowns Washington quarter

reflected to and regulations and and this of strong company's pandemic-related plethora significant core impediments to with in were quarter's Our the a first same-property of associated results, the results year, job quarter this in performance as growth XXXX particularly FFO down X.X% loss very past by suburban revenues Ventura improved a and ago. in areas driven On by respectively, California. basis, San revenues basis counties several XX XX.X%, Diego, points, Orange and sequential same-property Southern in a of and year compared

in marking losses job losses. for as On recovery after decline progress the in nation, process. X.X% early our a and the noted the and pandemic-related XX% year year-over-year XXXX markets ranges, remain respectively, continues and significant XXXX, and were Essex As year-over-year reaffirmed the the basis of the to demand the onset March improvements urban full new continue from job same-property easier strongest being Apartment and release, we and by to function earnings also farthest in our compared that the saw weakest both suggesting centers markets growth, apartment we revenue trailing shortly in comparisons. our properties we X-month in market job driven in pandemic and the of supply expect growth X.X%, be Essex to guidance a cities, of

over California than with gaining XX% March, appears X.X% nation. of were XXX,XXX which markets Fortunately, reflected down Essex losses as X.X% of growth the the the to base. the recovery less jobs for March the nation of On nearly the basis, of in job preliminary outpaced be and the a month XXXX, in XX% Washington for U.S. sequential employment and job accelerating for representing jobs,

service jobs service remote orders, directly tech production and hospitality were that and and the impacted expect to urban by including quarters recover disproportionately suburbs. several wealthy areas video suggested that and we sectors, Coast West the ago, rents were pandemic-related on concentrated job losses displaced As to as filming recapture jobs shelter-in-place entertainment we we and in locations. Hospitality and were

post of of nation, X/X these For losses. and recovered losses. COVID have to metros X/X in jobs services about other hospitality the By job recovered than Essex comparison, have their less date,

the and their growing differentiator over a and widespread cities, sectors reopening of promising these California disrupted, normal more are next applications. Essex recent several service Given permit remains the again the a for represents by production year. was potential over followed video this again activity quarters. by in upside the Film for months, time once production below film COVID winter shutdowns Overall, of recently surge markets

from at County. recent highlighted month-over-month the the a in XX% as applications industry of in March, data However, benefited week measures released stay home last relaxation for from FilmLA increase film Angeles permit Los

rebound been disrupted the the for for industry has a to recovery This this due that for year positive expect in demand due rental continue tailwind content the production in provide pent-up LA We COVID-XX. and should demand market. to to

our the employers building, hybrid many the amount also pleased to belief We reduced office collaboration, spending largest the that announced top of tech office their many from allowing markets employees time pandemic, necessities. model the of and most to related with will offices a are for our while for team their plans also prevail work career hiring that companies employees significantly in in had The plans supporting home. advancement significant of tech early in have return

began reopen momentum and workers home largely This further their moved more rural or coming locations as to see employers the tech late expect reverse with offices. With in we back tech the shut suburban last quarters to down, cities to their trend parents. many or year,

As of of S-XX.X reopenings of track announcements Slide public on we we the largest on disclosures supplemental. time line office our tech the a companies, based and before, have planned provided

XX strong postings markets with Essex in provide tech companies in graph positions levels. recovery the job the open for indicating above also the now pre-COVID We a top

their office or job positions, that the was U.S. the as track also of We job locations open postings noting California about Washington location. XX% for

and and to services for of confidence adult to gives last counties and least deployment Overall, the a have are XX% XX% pent-up commerce. now on that populations, protective As restrictions effectively And conventions COVID-XX their that of demand plans first approximately California us Newsom week, path supplies. vaccine solid the including respectively. Governor recovery. of reopen expected California Washington at we dispensed events. on remove begun have accelerating vaccine measures rates June indoor California's dose and are on as subject to XX, such to tied announced several sporting recently sufficient activities and key is low These to outdoor and to continued hospitalization vaccine

average On as housing barriers California, by February. XX.X% home would markets a entry multifamily, the of in the low national with in X.X% outlook, increased trailing mostly higher being and permits, on markets our home price that single-family assume total West basis rising increase home national Coast in permits, of one production. X.X%. XX.X% and would driven XX-month have year-over-year median to both supply single-family The single increase Normally, the is lead values in increased compared increase permits to declined a prices. of a to housing In

time, down the has the and become However, and incomes payments in transition single-family rental permits to increases affordability. homeownership leading in from same environment challenging. to the Essex regulatory availability, renter the higher pandemic At more has Essex have the rents a we XXXX. challenging improved down X.X%, are the for-sale in average from markets ultimately land and combination and of lower apartment which in increased With to markets limited prices, a late 'XX large housing deliveries attribute fewer

previous forces these recoveries, seen periods have they often higher-than-average We of and rent in in result growth.

our period transaction successfully similar when that values the to X to almost quarter per communities pre-COVID were first apartment market. Turning $XXX the the was share. $XXX for consensus We sold in million at NAV

redemptions to core basis, declines. have X% a today, fund cap rents hit property discuss in X in to undervalued in moment. buyers and during have in rate a repurchase looking priced hard and proceeds XXXX rent and cities, beyond based portfolio, to have attractively highly offsetting and As relatively valuations externally. apartment of and looking mismanaged motivated a roughly our common near range year-over-year preferred other have transactions suburban the our REIT recent most were strong a a Barb completed levels to rebound of sales low a the are pre-COVID There equivalent priced NOI, of high proceeds exchange result, makes our few cap core and rate in In be which per for preferred NOI COVID-related range. to cap using sources markets Several selling over X% sales share a that of equity Strong impact appear or property X% equity and rate the the property will apartments the pandemic, both on increased level The grow past we less stock attractive accretive stock, by markets of buybacks COVID led portion greater using the we buyers to on months with use rents. impacts investments the capital. values FFO current now were in

conditions for are to call the adjust as turn COO, experienced market now will pandemic likely I see Kleiman. robust changes more The apartment properties normalize, Angela to listed property to over As lead during sale. being their transaction will our the starting we and forward. uncertainty unprecedented owners strategies a going

Angela Kleiman

Thanks, Mike.

operating Thank First, these continued solid your efforts. for you delivering a conditions. their team to for special on the extraordinary under results Essex recognition focus

improve dynamics. recent employers, and our As the to economy the job the major as a the for market of gradually with discussion vaccine my partial reopening or contributed to on comments, I for growth. office In the our results will rollouts, announcements general, has and continue restrictions focus COVID first easing which phased markets by quarter reopens current

to our the favorably improvements we which amidst growth enabled maintaining pandemic on us which will goal and strategy same-property was to adjusted scheduled revenues perform the has Our demand, revenue the our Accordingly, in concession future. position slightly than managing expectations. our focus to better in rent, for match occupancy

decline this a with And scheduled as successful we only of for strategy. been representing X.X% have X.X% the rents revenue with quarter. We occupancy decline, maintained total the result,

You fundamentals pandemic. of last underlying the may to recall consisted strong COVID backdrop of prior the quarter first economic in a year the

then new markets In a rate with Consistent shown lease a the is year entire where greater with new to quarter job deliveries. was revenue The fourth our year-over-year the discussion call, earnings urban lease on a concentration the portfolio. throughout losses CBDs, revenue reason strength also fact, rates in as our highs to particularly our declined comparable, primarily the compared first also pandemic, last which year-over-year the decline X.X%. at by on combination had growth the supply which quarter levels the declined of S-XX, first same-property created of our attributed impacting the X.X% quarter difficult last back from of why the X.X%, in by year-over-year historical quarter, first was more major

the with Francisco continues California submarkets to Seattle, a California, primarily In L.A., revenue highlights are a contrasted key Costa down In Ventura, of averaged was quarter CBD, XX.X% County. Orange whereas Seattle XX%, remaining County XX.X%, X.X% In be a were Northern and averaged year-over-year and of California, by performance L.A. primarily markets. decline revenue the down decline average by decline, Diego San few while and which CBD decline. our in the decline the CBD, West Mateo, decline. Southern first revenue of by San X% by averaging X% Southern San X.X% was an a Here Contra driven led and XX.X% X.X% Oakland the by submarkets decline a driven suburban

continues As portfolio urban suburban you the to outperform can markets. significantly our see,

markets. improvement of On other signs the are in urban our there tech-centric hand,

first example, respectively. financial by and occupancies and X.X%, X.X% Seattle San sequential increased For CBD Francisco in quarter

sequential the X.X% declined addition, in average an at of quarterly markets. rates In turnover these

anticipate deliveries, continue supply concentration markets, the greater that Oakland urban of downtown recovery. and Seattle, by concessions, in resulting will We will CBD L.A., moderate impacted in the level elevated of remain particularly to which

began our points focus recovery indicator market of because supported cost delivered normal in do the Although net growth better in year and first More X growth. quarter modest new fourth quarter in weeks of of lead a total as from our the emerge trend conditions, consecutive our per has as we notable in seasonality From of growth, year. fourth business embedded Southern quarter. continued this comparable of quarter pandemic, same-property we revenue progress. which have we our periods view low markets, X quarters place California XXX lease our improvement market the of by typically perspective, basis through to sequential we rent On to job sequential not average is effective unit, on significant first of this over sequential concessions the the last the the about average, under from with performance, portfolio improved weeks in X.X in continue the

between market vary, on we first had quarter line that average, While our rents our the quarter. trend where fourth in forecast, would expected this trough magnitude may in is the portfolio, with and the

a for major XX.X%. lease feet. to X.X began Lastly, as build square in rights continuing reopening, path Mountain mindful development View stable same-store our on although employers With and markets. current is our softened, conclusion, and as office at approaching the legislative uncertainties a space as with are new procured our tech remain Bellevue economy office market recently rental million has expand occupancy additional continue an well square market Google signing XXX,XXX feet we portfolio of In the to in brand-new an the and we to additional Amazon on construction tower recovery. in XX% portfolio of

will the to at out XX-day I now Pak. availability Our Barb turn and Thank over you, call X.X%. is

Barbara Pak

Thanks, by an to balance consolidated results, the sheet. the on Of is operating to on related. expense. recent FFO report with $X.XX portfolio and the range and of our operations, and the start the core the $X.XX markets other comments beat lower a lower first followed our operations quarter relate expenses, guidance which joint $X.XX activities I'll by on Angela. exceeded which other midpoint per $X.XX I'm few $X.XX for is interest of relates timing update capital quarter our revenues the venture is share, to $X.XX pleased first same-property higher from and from

midpoint, to redemption a as use loss and that $XXX the dispositions a the the March million is equity early of investment, we the the the of of portion on is share per of be the of $X.XX at proceeds. expect temporary of causing to For timing the at core at of sequentially. the $XXX the end a FFO decline this is $X.XX closed decline decline second $X.XX of Half such, attributable quarter, income on which And preferred occurred million mismatch February. end a the sequentially. There of

as remaining benefits not commercial same-property G&A. we collections repeat second decline we expenses lower had in and related expect addition, first In income we delinquency and that quarter. the quarter $X.XX lower expected in due relates do NOI delinquency operating expect The the be to to to to better higher onetime higher to

same-property per FFO we year, NOI revenue, our and reaffirming and ranges growth are For guidance the expense for core full share.

Turning to investments.

investments. received for we redemption During X the the quarter, equity of $XXX preferred million

valuation. One investments rate redeemed the was the cap net totaling able our to current on effective a $XXX and for early on as price of was that million at the rents estimate developer pre-COVID sell rents. the X.XX% X.X% pre-COVID property We exceeded

the on million share, fourth a per of which of early the was prepayment XXXX. us of As compensates the portion penalties in the company the received the $X.X or in $X.XX lost income result investment for made that redemption, quarter

this book item. as FFO However, noncore purposes, we for income a

may of preferred experience investments currently XXXX. cheap we available, in Given in and early alternatives additional equity the apartments strong to invest demand financing redemptions

the to balance sheet. Moving

we us be the maturing unsecured million and extend term have than Since million profile of expense. X XXXX. years, XX no with the nearly to of bonds rate to were the X.X%. of of basis rate low our This at yield our next of interest reducing beginning and is our that reduction impact reduction interest first to of During $XXX debt, to weighted with seen the matured unsecured and now significant the used interest term advantage refinanced average environment an expense to debt proceeds quarter We a the allowing XX% in year. issued interest X.X%. our prior XXXX points $XXX X-year to end now maturity taking between million interest via can XXXX, the we have leading over less expense of loans $X effective compared The most a refinance by results the to quarter, of in in

by of the raised despite the XXth coverage basis, XX we cash on sign This approximately quarter, for as per and sheet our of balance points common funding our increase. effects $X.X $X.XX we strong shareholder and dividend that, is consecutive With dividend value. annual flow pandemic. to our an the our we the During share basis will sheet near-term to balance strong, remains ways create back look minimum liquidity disciplined for billion to to turn I'll invest operator With needs, and the of accretively remain questions. call a


[Operator Instructions].

Citi. Our come first has question with Joseph of line the Nick from

Nicholas Joseph

today. your increase on I starting of two guidance. guidance guess just sets Maybe everyone peers We guidance saw initially. differently And

of thought to light how for trending the So to expectations? curious, the more some than versus are beat, through? your just of just things wait XQ original little results revisiting more in Or a others. conservative year quarter, about could and conservative come But rest you be operating trying the be this guidance as are more you

Barbara Pak

have it's a and Nick, Barb. Yes, some outcome did on we did growth. favorable we same-store good our quarter, first see

However, is the uncertainty eviction moratorium. delinquency and related in early there it some to is year, in

a redemptions, play going then end redemption into range the side. some factor equity the on high that have And the uncertainty likely it. exceed We're to there. do our preferred of So on we guidance

that, in of just timing some we'll revisit So it the we're second working on through the quarter. and

Nicholas Joseph

And mezzanine either into redeploy preferred or those opportunities are proceeds investments? you seeing equity how to the

Adam Berry

Nick, this is Adam.

right pref back of deals lumpiness and and number now a challenge goes of is that comes have deals it out. inherent We when our through. that the timing in the The we're when pipeline pref working money with

also working we're on the all we on side, at those hit side, investment looking as deals that market We're well. the the acquisition looking through are pipeline. more So -- as

working So it. through


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

Austin Wurschmidt

just renewals, coming concessions down, than can what saw start we with occupancy that. when comps, you saw you some in think do And greater stable on to We renewal lease to we see lap first on touch holding improve? rates we the earlier and as start year. softness wondering Just to when to think easier off wanted begin

Angela Kleiman

good Yes. there. question That's a

the What our that we we actually with On comp, I renewals, as are is point, will your with rents. improve sequential a year-over-year pandemic. think to market lap the on seeing -- improvement

And is so starting. that

to right? But certain performance there a have with better. trend still do as strong so our delinquency legislative solid that's of I occupancy, concessions There's that's foundation expect and level And factors, impact built earlier, there. we noted uncertain to to Barb continue There's continue as a abate, are unknown.

wanted so sure factor we items. all to that those make And we

Austin Wurschmidt

comments, your a I mean, occupancy little So as follow-up we a to starting occupancy peak push higher to you as on Angela, rates? levels. at before leasing level maybe where feel to into a on harder bit push just season, comfortable front? beginning Or it rate is you'd quick get looking the the on push lease harder more lease are the

Angela Kleiman

it. -- a that to At cautious well. this rents. once this very And as because level, to want that to holding we at point our of of do sure on a land comfortable strength of make to function that as allow But I us, is we're sign concessions supply occupancy us pushing we're see again, start concentration

of So point, we to feel your we factors. comfortable to But there are head leasing the peak we level rents -- they pushing where a as into with start occupancy are, season. are couple different yes, do

Austin Wurschmidt

a maybe compare today percent of just it's last of what and leases on the been what And over Okay. receiving an that Got then to could update are sort months? concession is? average it. what then provide several the concession And you

Angela Kleiman

about of our we talked year, portfolio improved a In XX% go represented over last at give want at In was that. quarter, more of talk further concessions the improvement, XX% slightly third fourth had our quarter, of than trends. we granularly little of to our could in X.X about about to that, that -- the that a X.X But now we weeks. little somewhere first over a XX% can portfolio X below weeks around if X into I about weeks. quarter-by-quarter sure. portfolio. And -- you Sure, you quarter about the

trending. So that's are where things

Austin Wurschmidt

by April Do any update for you chance? have

Angela Kleiman

mind, April April days. bit now But do. is and down better, looking portfolio in a average. about this to on a XX is week our of little X first although XX% the I about keep is at

moving are the things direction. right So in


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

Alexander Goldfarb

on of reopening the line So first California the accelerated is question June time of XX.

Just curious.

Or the of all still another was reopening? an call. spoke call, Are early as Southern outpacing multifamily the Cal tech in is apologies. demand jobs I quickly you jobs the acceleration seeing of part trying the the If we that down hiring, with in about it head on you in XX apartments service for to to growth time my the recovery June tech are reopen that still versus service-based lines?

Michael Schall

X good ways bit it's look say, X basis at let's looking suburban most differently. the cities large at markets this year-over-year a That's the question. we And suburban suburban a at clearly, a on Mike. a have categories: Alex, cities; into portfolio -- And -- most take -- markets. both is that basis. and look actually little the on We midsize of now sequential we're and divide and cities; outperformed it all our and it the the

improvement. clear the in is that any and our you extent hasn't markets example, and Torrance, suburban market pretty cities, it's time. this great cities in For the the in benefited best towards unfortunately we when see suburbia sequentially point up cities the improvement say, moving is to look into X.X%. I'd really And which our midsized starting is at

the midsized matter Angeles. And was the it all X.X%. of March greater suburban job And average pretty X-month is which growth And second recovery cities the large then suburban minus trajectory. markets. suburban of Los So are the cities -- is sort was X.X%. And in best-performing in Seattle these cities, for with pretty by substantially. significantly the minus are And they're terms job improved levers, clearly whether the or supply, best city large along lagging again, doesn't which hampered trailing then

of need of a this that late lot California in continue. start feel we to got like but So reopening improvement a out the bit of in We quarter, was process. actually coming there a

we were, but so making makes things from perspective, are better. And step we looking where Hope we're a maybe behind and ground that sense. we're thought up that

Alexander Goldfarb

I industry apartment guess, the doesn't last saying, correctly, simply the the is driver of is it you property the where what then is is the yes, in you're I performance what Mike, located. if and urban market. midsized matter is bigger -- then but what saying you're heard the Suburban cities, area. The

fair? is So that

Michael Schall

that's Yes, they supply. jobs, the are where urban you again, course, fair. concentrated, more these of And are service which lost areas and in the have cities,

So it's into from suburban really very factors cities causing that Those those of you cities is supply. as large suburban and that markets confluence midsized little of both this. -- the move have into the markets,

someone competing So have property offering in. X months throw next in you they we else a might free door whatever plus new don't with

occurs is what So power improving in in that preventing that substantially. and our mostly is the dynamic pricing cities, the from cities

Alexander Goldfarb

are Okay. all SmartRent. is, And and UDR guys second this I and of Mid-America think part then question you it's the

But you impact the is investment week way operations or interact the had as Obviously, great et hit the last in making SmartRent, on to impact obviously You news What money, investment. Journal. you to an your The far guys? what -- as which big practical guys awesome, the beyond have is with is to cetera?

Michael Schall

owners equal investments that II X for partners X units plus were million that And aggregating up the other of SmartRent -- Thanks made X say was -- I the this that started we companies consortium owners that it's X of is of apartments. Yes. X now to like -- Yes. million I of apartments. first units million apartments of are was of think started Fund think REITs with by I'd question. by

technology the industry, again, the using ownership apartments improvements through ownership. concept out substantial pretty some portfolio them and operating group together improvements to that controlled. the technology rolling So create original in And was the of

million out merge as So of SPAC because a that's the noted, process. $X.XX about believe. which for in you are you less investments volatile that And with $X.X we we been complete an agreement great. there have company many SmartRent would Street interesting has announced about net is pretty the at entered value SmartRent The that $XXX to Wall that basis working it's first in a made. on to steps billion, Journal the into capital, billion noted worked And But recent X past. SPACs

so But of SPAC the very happen. that through. is to aligned this it and pretty And to like the motivated there's going well for -- is this assurance no seems this will go sponsorship

feel, good ultimately, pretty I that. So about

are to technology that, Ventures terms I more is guess, an of maybe beginning, companies and better -- so there. it's RET is there were into many of And way SmartRent, Ventures our vision substantial gain of fundamentally it details, I try in early be SmartRent an be some the way seed significant customer. rounds into improve will technologies B we -- of all example to which get the bring want then We the -- financial but investor through and the to C will And and all in benefits. with investments. investor pretty the was impact, the But efficiency goes other round a invested owner. there back RET don't to these potential to interact the so there but

I think were there that Fund are made by to we're and those. we're in SmartRent a XX of additional addition on number I investments utilizing Fund currently, and II

allows entire -- customer function. several computer. So to currently leases the a do in you the one, of product that hundred give you And a your process we've from essentially done and/or for example, -- example relationship lease piloting, I'll from and management a smartphone a it's which an we're is

and rollout which we we think benefit also company So continuing is are pretty far both to of the our into of testing SmartRent, a that. We're industry. the long-term the

happening technology And perspective, so we're from very recently. about what's a excited


has question the America. Jeff next Bank Our of from with Spector of come line

Jeffrey Spector


Mike, took the the of don't backdrop feels seeing, to that you I on where I'm it again, I big thoughts? coming there's comments but it remember, like listening least me, what's of boom. numbers have the and sitting how you're at negative? the crash, a regulatory pretty here. nice sequential front compared mean, And I your out are do long to Just today? the after issues good if but I at What guess, I in XXXXs, disagree, improvements from know And the tech what's pretty a crash, tech call, the the don't early negative

Michael Schall


that of second a roughly bit bust. period then and before was boom here. had Northern these and And different. in little Let the me that recovery hold Internet the market is for The that rents about California a each followed thing periods the we unique in negative bust was XX% crash growth

ensuing huge because this be gave some California. expensive and Southern remember really surge revenue, were buying couldn't a to we years had because let in in from product the cheap California, that California Well, assets period have these in companies, no so period West And demand, ended keep of market Southern that were very the Internet spiked -- really and to alone no small of period. fast then And that Southern all California California, plus which in discernible boom Coast. up which identified, bringing appeared had Northern with the XX%. after we I there people had enough that bust tech benefit apartments Northern few produce back started well selling and you we even So we of rents to didn't many that

from So that long a for took -- then time period. to markets it and recover

businesses the went that of back -- public was setback. set a from dramatic real -- lack that think from the I essentially

a think IPO XX later, or and years only started all I year -- think of are X markets I markets that. it's from the ago IPO to recover the

The much sure this -- to been markets the to in it's credit liquidity and governmental terms -- a today, that a different. response into say forward So long into money doesn't pandemic pumping taken it or time. I'd of and has morph financial into Fast appears the pandemic response it that making crisis. a

And so the of I credit a entities for lot give that. governmental

of asset like coming lot worst chasing this side, there's feels and it So and other the out we're the money values are and we're of a through deals increasing.

Does knowledge new if you have? in and is markets so maybe terms you goes with a with now transacting and Basically it for Adam years all portfolio? middle rates say that. over And lot all of say time there XX what on? do good Or of around we a is in spend I'd that's back of that it. a last of negative, growth do your And what best thing. does historically And what now the continue to the it you're the you're worse on I'd markets. mean

units, property -- the reason, but sell quarter, we a can't very XX% grow. it has will just whatever which think sold great. very rate low that great have keep means some units, the we for some last we I makes It's us, is our you which that properties underperform. difficult think lesser So property properties, in of that, The Hidden is very a up. to BMR location, growth Valley, Notably, low that if BMR XX% but of for

that area. funds So and will look those has that rate, repurpose a a in long-term better an we we sell to property, something into is then growth good for ability

as of proceeds. -- little of those noted a FFO ongoing. occurring There's reinvest bit in drag. is a noted, we Barb before those of dilution QX And as there's bit a process result little transactions that as So

so say think. is And I'd that downside, I a perhaps

will However, benefits the long-term apparent. be very

Jeffrey Spector

Okay. IPOs? return workers should demand coming or return your Are you know portfolio? seeing renters as tech Did the tech specifically the this. X discuss where if and to employees Like I portfolio follow-up benefits missed and the the lot from sorry I the in of is my and from? about you these And you jobs hybrid, how increase -- I'm benefit a talked then portfolio. that

Michael Schall

Yes, Jeff.

-- but of starting or X quarter reopening. away. these I we're a reopenings have months we it, think about talks still the are you if S-XX.X Most that to or see

that, where the So seeing benefit. we're think don't that's yes, I

Picture been recovery let's and up noted in, are industry the as say, is Motion think I it's some back. now jobs coming service opening there

still And number, We're grown. so a have jobs grown. have but jobs big off

think terms that's point it's of think a significant I don't it's -- to office, coming occurred. this the that think process I at any specifically to -- degree, the back any actually in been in I time. slow

I think us. it's of ahead


of Advisors. Green from Street Our John has come line next Pawlowski question the with

John Pawlowski

in current follow-up issues deal the Maybe, start follow-up. -- a reached equity to Are dampen volume on think And developers or years? any in increases the to dampen then it business. start are -- it's service? your construction covering where a a point you portfolio point going getting where that preferred a costs Adam, having over mezz costs coming the Have to

Adam Berry

John, yes.

pref we're through question, your areas. answer our to So seen, definitely as more we developments have working been have of the pipeline, most in suburban the

density, lower product. been they've So more garden-style

of having whether to these effect it get the not when some look at how on is to increases absolutely so other deals or they'll materials, the an you underwrite and but specifically lumber, built. also And

of we're supply. seeing headwind as through developers your question? what obvious of And then, work an the and John, it, the second trying we're with and them. to is So their see But new we And part for way are was this definitely working it, beginning it. this

John Pawlowski


Just concerns coverage in terms deals? ongoing about in-process any of for projects, debt service

Adam Berry

forthcoming. don't concerns. we have those We of No. that Nothing any see

John Pawlowski

one then is leases or occupancy some to are with you up And round people any homes? their generous follow concessions concessions? in on retention year Great. expecting keep slippage Okay. faring on for signed early signed me. Angela, another to final ago just they reads with ago of how year a have a Or

Angela Kleiman

good That's question. Yes. a

what As is we're peak releases and leasing relative and seeing we behavior pre-COVID. go more our the into normalized heading through a renewals to season,

mind, when is that applications challenging. and does So competitive will the keep is concessions function significantly economy numbers But itself like of doing. at lead the concessions more in think not look a turns so and what our and of supply that us to really I be

not it's so duration So much lease itself. the

the country to open of at compared so markets only is mostly now, that the reopened. of approximately our And rest the right XX% are

CBD locations factor. And going a Seattle, going concessionary that continued certain we're of will supply in of and where in so are L.A. like to of more there environment lease more the regardless that's more because pressure, a still term. the be And course, see be to


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

John Kim

something companies. work Just to lowest San of the utilization properties? you weekly major correlation a L.A. Is as environment in something track And return with Francisco, that Office in on as having follow-up data? and some markets, far including you level Castle high your San or to applications tech see the is that your a this the or interest lowest Jose is among the

Michael Schall

really don't know we -- track to exactly. It's Mike. how it it's John,

try certainly, pretty I across But difficult. this from. level, to trying with granular patterns. triangulate jobs we of So very the track at we do and -- And residents do think, track are we we company is sort track to coming where our migration

in track as we say, to see back hey, the we as -- major to think then a back the keep companies lot tech coming in start ago, we a able seen traffic noted this increase And they So tried what plan we part point We a of and at is of office. have should let's seen that's recovery they time, big do to come haven't when volumes. the minute to time. haven't just in greater whole point At don't of a this this it. be

John Kim

typical tailwind? about you your versus us today? back can remind is And a classroom? pre pandemic Are the it as student returning students to What you what seeing profile

Michael Schall

supply. we that there out part That's a small the granular obviously -- mostly demographic that supply-demand occupancy. another know And know tailwinds. detail. obviously, by And some I and relatively are that of and students jobs we We track have they're there's our but question. good don't

say, The and they jobs, living the big consuming i.e., longer I than a overall numbers. therefore they're have homes demographics, not longer to jobs So big enough supply picture the scheme. is be driving in people and would who broader factor

down get granular that don't we level. So to


Our question with Hill has Morgan come of the Stanley. next from line Rich

Richard Hill

maybe come breaking components you. to its part for a bit a wanted a guide. I little more. And to quarter back pretty strong was the just into XQ

$X.XX. maintained XQ, cut. Yet suggests full I but of rent year, I looks XQ implies the on our off reason where than stronger channel think growth. somewhat to bring growth you the pretty a for beat rent pretty which up a FFO are, is guide check that -- And leases effective strong renewals certainly know your you start a of and I least FFO strong. guide by at effective about new don't is

I'm have and I the making bit in you I'm what's I it that driven something I'm projections it's But we as the Because understand you GDP is their to by that typically you XQ, increased hoping So what fundamentals a that economists be but economy, that versus onetimers more certainly recognize and year? trying XQ bridge, can don't your I business out, included conservative? that's square should is growth. about for mouthful, trying think happening means you thinking about? figure for XQ. you full the to know away. in in a in Or our little really one-timers there in

Barbara Pak

Rich, this is Barb.

what So we XX% that tracking And alluded to at strong. was yes, point in through the on her hit California. quarter. like same-store within was I we XQ opening are mentioned, we reopening favorable And just think first Angela remarks this

little really you were of increase we feel our numbers the about wildcard where which had bit while and starts things revisit over just QX. in are. to take fundamentals at, can past California is The in so stops are, did the do more conservative where in within April where in good year, from good about We and the talked we're quarter. about feel a us leads delinquency, we've a past. And we'll which we And lot second where we've see approach,

And first in -- a did perspective. so we at we those was our on are trend same-property were weighed that But when looked favorably from it us the things that guidance. -- quarter the

Michael Schall

I delinquency Because saw January, February frame. kind you we specifically benefited we of because time payments, of think improve in maybe light Barb, X add thing just from quick based said. in stimulus can on QX, the that we what

in is get of -- And SB even be that we going very we federal historical remains now terms mark at or the so way what of And to its haven't stimulus seen to all. forward. no XX, going way question have which big and precedent to we anticipate that. much money, is into a impact no That

as trying little that think guidance. our and wait bit happens and always what we've into a I So let been to occur then events opposed to to them build and conservative the report see them

happen, philosophical bias we And don't we bad respect that never think not it, a kind it I is good it's of be specifically, have hard XX that to that magnitude a to only seen I to what's going anything that's -- before. have. predict just We'd with delinquencies, going it's time think And way but we so to timing, ultimately the we've given happen. to to the say can SB just news, get nor think

Richard Hill

are being inherently both And you sell-side I to just understand investors on I ask if That's which, a us, of this maybe direction. themselves, versus lot different Coast. conservative bit because a But of that's operating like is something the Okay. sounds maybe West little on noted, conservative, the recognizing you that metrics helpful. are is reason in approach, right the DNA trending a the your think just it as trying in

Michael Schall

put, Fairly yes. Right.


line has One come Our Malkin from next the of Capital Securities. question Neil with

Neil Malkin

internal projection? for this in the I Mike, Or is you government? that supplement, that your assumptions The like you. one put from growth think is an job is that

Michael Schall

to referring S-XX, I'm you Page Are guessing?

Neil Malkin

year? this for think I Yes, $XXX,XXX it's

Michael Schall

do research Yes, our $XXX,XXX. Yes. Yes, our fundamental we own ours. That's on No, from S-XX. so definitely markets.

Neil Malkin

question, Great. know but the recovery the to understand the just in path like to what I in -- back general back that, -- trying pre path the COVID like. it's I'm looks Okay. a or Because asking I'm million-dollar reason

Looking at jobs I you're from down your markets, still think million X.X COVID. pre

the urban underwriting mean, does months? X like rents to, think how employment. you basically I using absolute that of or markets, kind in work about your your how of really XX know of coastal that COVID guys get do of back that's you to an to it, years come is not the or call from tech jobs? And I kind that? when guess, XXX,XXX, rents so level because math people Or ability I operating next, of don't pre that over standpoint, see push the bigger maybe particularly Yes, to areas their back kind Or --

Michael Schall

happens observant. would rent to as is to goes things. our it I or other income make when theories and definitely relates increase to question. And choices rents Connecting of people Good this dots that those say Yes. what kind different is decrease. back

come the cities and those fill So they units. people rents decline as as have, when in much

considered good. Now suspect that them where of that does from come lot a it exactly are come generally would less I from? areas

cities rents -- I before. dramatically were move the than can they different pretty people than think lower and now into are because

in. were priced they previously and move that out they So can now

our you're if is And the that -- for so portfolio markets, time. this long theory in presumes a theory that

it If beneficiaries have then that be markets. will And afford that safety, will it. of people you're move there the markets be because can't good they as those quality very these in cetera, the of schools, the will life, afford pushed people as et can out periphery long to

seems I are They're well doing pretty example, from -- in farther select know beach that the So areas. doing everything we're the so contra are that about there California Southern market. markets, this suburbia well. really But that -- good are high-quality and what saying just really still suburban California even for cities, about or Northern

value moving them. cities about about would move are because talking to necessarily not you good we're a talking cities into quality So those to in say, order out location We're jobs a people all well, assets. And cities. better of have how on less in move life XX% rental almost lost? that the And the answer or those based a can -- occupied value better situation quality people with is better you be

portfolio not concessions to our come where eliminating thousands the we in more So going point XX% many we're because that and power, take think and we base -- have get are it's is order occupied. hundreds the our to strong. not pricing of not jobs people vacant to of given almost I And within is and key that's that back, there's units as

works. in that's, world, it practical the So how

it's jobs. changes in consumer choice, given rev It's the So levels. just sense? not Makes

Neil Malkin

letting and leave and or to leave, paying to good Okay. have But is good where job done people cetera. one early most Yes, you're taking delinquency, job yes. by properties for cetera. guys the it me going there. REITs, surrounding you're in terms of owners, also have Other you see impacted et et concessions a a of in kind chin your the I really of people done minimizing

abate? in X-plus months back California, be to do that obviously I guys to of deal great. storm of people, about coming call that needs but there's guys people that you maybe And back you on your big So I big would how check Could when against you to but market doubts impact a a assets, to or of I'm do the protection the be the have eventually." paid that my there really have bring that. a "has that who sure, selling in big, commentary I again, it, have out think more for rent of be that you not vacancy? written their in lot of amount sort guess, terms Any that's assets? going specific people playing a operators a the have of lot see guess, compete

Michael Schall

extraordinarily rent or -- will almost year, more over June, a will under that's last we that maintain by it's renters Yes. And causes get we of fair And night, have the paid year, also June don't be it is it's not XX. even at and X know question. us That's required We us last that that XX% a year an that of to pretty number than we protection amount the have their it. there know that over good lapsed to existing the to X the the sleeplessness answer the eviction SB a on XX. moratoriums that significant eviction months, time

up I this courts say no that would that know is foreclosure going that we processing. also can So with a the problem. be to keep there's way

know out So I don't how itself to that's work either. going exactly

-- work thoughtfully and I'm sort obviously to We're are we're So of to say it. our going to a an company. public through have carefully. treat going residents that we have unfortunately, to we going to Obviously, obligation

going And so of period to into we you can't will tell best run we're as do through into get we exactly what to I our that But that. work time.

We very a have step a concerned I say. about guess, it. I'd to time, and take at absolutely it we'll are what

Neil Malkin

but I you're be could X guidance didn't of pain? talk the of that about the cautious that are it, in maybe out a curiosity? on is of that that things kind things you Okay. that your little -- And making why X bit you more of know just Is

Michael Schall

various But of at have rents. and is. say, received the have haven't people and/or their that same that people it Yes, the -- time, benefits payments know there we are let's paid forms that

a people paying where of to in reconcile be themselves are those shield we'll to anything. laws position using finally, situations the from some So

isn't it the they're to rents to a good it. extent to element So is protection, with well. paid people face their haven't eviction through as accrued all they if going -- they maybe to already XX, And XX% September have it from that to the want There June pay bad. X maintain have us of

So -- say like. It's what again, I of June a reconciliation it's come it's of going bad. time to not exactly for And difficult to kind sort that's would a it's XX. look all predict


Dennis line Our next question McGill of has the Zelman with from come Associates. &

Dennis McGill

it of behind down put X% are just urban You've wide better than maybe positive? of sense some markets and as blended you of talked maybe a How number most use those bit and the the markets geographically. and are you numbers suburbs some markets negative rent are give some doing April? extremes a can which Can extremes? And about most as the far from which outperforming other

Michael Schall

out question. good to the haven't a I it's you're Dennis, think don't Yes. necessarily I way referring it. that broken

we're me some sense give you of let seeing. So what

on Snohomish, best Oceanside minus then there County minus in up take So Boeing X.X%, market. issue plus Snohomish suburban year-over-year let's -- quarters rent sequential Torrance growth. a at -- San which again, X.X% of our Seattle, is plus is is so a is Ramon basis sequential The there's revenue the And in and most parts X.X%. X.X%. And

And brackets city the So the -- place best actually down Again, Long of Long in the suburban around at Beach Long that gives decent the at City get Beach X.X%. very up is most Long sort San kind the minus of a Beach midsized X.X%. X.X%; decent of cities, live. the and growth a of to the a City, sequential best is is what's and in lot and is it's North minus worst doesn't markets. those Jose supply, happening you In Diego, in year-over-year, Beach XX.X%. worst San North

idea plus the cities, that. it's on? the Then think XX.X% sequential from I Francisco worst X.X%. basis, is on then XX.X%. best best So and Seattle the that Does a is and minus large there give X.X%, at the what's And San West the minus going L.A. West in L.A. -- at some year-over-year, you benefited sequential minus of is at again, at

Dennis McGill


I revenue least think that were numbers? at does. or And were numbers those those great

Michael Schall

revenue. Same-store revenue. total are Those

Dennis McGill

your if summarize it. as to is And on But you that if to of at then each residents of a in I'm end by you look the your way difference there them Perfect. COVID separate move-ins pre -- question, of this sure seeing if you and between at segment age, distribution distribution just the you new you're look any what front have were today? you renters. have a not

Michael Schall

we that I don't think data. have that

cohort. by We tracking occurred it not categories, have and we're move-outs what but age

Dennis McGill

of it's income whether be whether Okay. versus What was would it makeup demographic circumstance, do to, just on -- before that or the anything about depending differing how now? the base, speak common what COVID from it, track you tenant

Michael Schall

There in dramatic are a a difference. me. such rents, cities in some in is Again, because I have some differences housing data renter the suburbs. But -- There that. I kind the don't into given that had tech the of there's from is front different are any any that work drop of workers occupying have definitely are data. don't home in And cities. demographic that of more have moving

just I have We with just me. it. -- don't We have it

on to on We apologize. if this. we you if -- follow-up So want can with you


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

Bradley Heffern


I just understand delinquencies the number. sure to make back again. going April the want I Just to

you you collect more So over then April the of X.X% number that. X.X%. in the assume had I is that the and time, quarter first

was just maybe tailwind I saw quarter? ago in -- a people in are of stimulus that protections you the tailwind to that is to that, confident the how payments the than California? less that wasn't a because that months capital more really that you first when in And guess, were to it And you, delinquency be is do first like continue than guess going of really that you couple that for because of So the tenant cover enough month are you the about come you it really a concerned seems source now I have something are that rents?

Angela Kleiman

people's behavior legislation, of about prospects. and Yes. because view course, this That's and, right, moving a good pieces, few involves complicated a quite question. And it's different a involves X jobs their because there's

-- -- so terms X.X%. quarter that And at delinquency, about in January we of if but look published first was and you actually and the February,

March point down the down went so that came quarter to be first significantly -- And average the that in to to better allowed X.X%.

in up So distributed. obviously don't exact that was QX, safely -- while of why have is why X.X%, for more we the April rate. back the which that March, reason pops point the is normalized which the we And to can is sudden run pretty to stimulus improvement is when

don't But are to at -- perspective. not we QX from QX looking we're sequential where before a good where headed. it's at is gross but that so going sequential revenue darn think And say, is correlation further. time, to same us, it's it's deteriorate pretty science, at asking that people is And the perfect

the is a You into going which the normalized have just delinquency, to X.X%. of X.X%, factor more to level back

to So with of put apply work it. that's relief. them and talked has this piece Mike team a them SB X with a engaging delinquency, robust tenants and actively our have help to effort the about as And XX, that really forth for as far we

being city through to we're is when the timing, we're our we question with able tenants are help seeing and their to different is that has city reimbursement And a the reimbursement government? every so from while will we going -- time Every a And different city and -- differently. the eligibility, line. every able we're get the process, the that -- approaches and has

huge so view much that us, our not And for [Technical when. Difficulty] a it's is so is

was variable. that and few come that And in. so see what It's more months felt make to for give well, you to going does be it it That's back prudent And Does lumpy. therefore, that sense? that into, guidance? numbers just a be we what mean going to

Bradley Heffern

about sight Appreciate have there. the buyers to line distressed guess, redemptions, the complicated. of in it like of dispositions be going Coast you've it that like guess, is I moving able $XXX guess had given knew redeploy over would seems And a more become are obviously deployment West for haven't what or that? the being assets Or on and Yes, then to there it sort pretty anything generally, just that color. million that? it's the lot does. what's your confidence be of I And the good so you or there. I out I to willing on that capital do of

in I'm redeploy your to confidence So able that accretively. curious being

Adam Berry

Adam. this is Brad,

actually Those Those So X year. dispositions call. quarter. The essentially I of -- couple of this things. them last that were last in baked earlier in quarter's a mentioned QX happened

And point. of at time is used that most -- the that as within as redemptions. those so at until now well back What's new we proceeds changed stock prefs the from deploy time buy to

with back $XXX come soon. to that, was million that's that unexpected so this And

pretty does that highly redeploying time on my high. deals is earlier, motivated do through And the robust. to level but prefs So to pipeline so. is are them, Like on pref we work I take -- equity confidence the very it money mentioned

can. moving so And there just quickly getting as It's money as that we and will be redeployed.


conclude we this that, you thank for are today's participation. And further you. your teleconference. does no Thank There at do questions time. with This

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