Docoh
Loading...

AVB Avalonbay Communities

Participants
Jason Reilley Vice President, Investor Relations
Tim Naughton Chairman and Chief Executive Officer
Sean Breslin Chief Operating Officer
Matt Birenbaum Chief Investment Officer
Kevin O'Shea Chief Financial Officer
Nicholas Joseph Citi
Rich Hightower Evercore
Alua Askarbek Bank of America
John Pawlowski Green Street Advisors
Austin Wurschmidt KeyBanc.
John Guinee Stifel
Alex Goldfarb Piper Sandler
Rich Anderson SMBC
Hardik Goel Zelman & Associates
Haendel St. Juste Mizuho
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning, ladies and gentlemen, and welcome to AvalonBay Communities First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following remarks by the company, we will conduct a question-and-answer session. [Operator Instructions] Your host for today's conference is Jason Reilley, Vice President of Investor Relations. Mr. your begin may you conference. Riley,

Jason Reilley

and Thank Quarter AvalonBay First to Earnings you, Conference Kathy, XXXX Call. Communities welcome

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

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

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

Tim Naughton

Yes, O'Shea, afterwards. call. thanks, provide commentary Jason. And that Q&A today on us I night. all will the to Breslin, we a of Matt Sean are available be will brief And slides QX Birenbaum. me With last and posted welcome back to Kevin

operations of April, lastly, Our highlighting QX year, this of focus And sites. development liquidity status a construction overview on update activity on our comments of today through providing so an results. will summary far An including and position. the

in last that our normal Before of this or started, X,XXX or for on getting us the weeks than seven of call, have more just acknowledge to far associates any like eight been from I AvalonBay. any

home of to by been Many pandemic, we've time. managing coastal adjust new shifting same have have metro to of dynamics professional associates call a them their for is learn safety environment service to our certainly day footprint family thank they and and and and dedication the that our in to leave been housing in of home. areas comfort and Given at every more for we our asked essential, the level. work large of the different fundamentally day even grateful our demonstrate What do to one at are provide communities homes, had and But amazing the residents team's while to us most inspired by more personal the commitment our XXX,XXX every customers. US, and this service than we impacted market and

starting growth driven was growth I'll start FFO Highlights include X.X%, with the internal almost at the solid of It X.X% revenue by a quarter healthy and same-store X% respectively. and on results quarter. X. of in NOI core Slide growth coming

$XXX our average totaling Metro record platform New of of creating major at this regions communities the of completed Jersey, the same-store or the cycle. more X.X%. we value to initial of three significant revenue over York, development in New of yield QX. All growth QX, In through except course, an Continue X% million track

situation, any the far or any so we have development this started economic not current new acquired new Given year. community

an average issuance at low record over February, cost a most rate that from history. quarter in initial of lastly, a reoffer X.X% bond at coming XX-year for XX-year in US capital a million $XXX raised X.X%, this And of we deal million REIT bond completed past with $XXX in

we've Sean and And Sean. will now operations seen April it far May. who discuss to in over with in portfolio I'll what and that, so turn including

Sean Breslin

thanks, Tim. right, All

in XXXX. on leasing and Turning a velocity material impact to March COVID-XX orders with Slide shelter in from of X, various Chart place X, XX% noted as down March impact in roughly year-over-year the had volume the

only increase the with our venturing of and we've becoming offer various contact out to apartment seen as more teams however, rebounded, the the virtual of increase to volume becoming no volume month. from our proficient tour in it notices below communities. vacate to to April, notices comfortable residents in to leasing homes for XXXX velocity rates, more and volume Unfortunately, of out the the tours, seasonal similar our conversion reduction incentives In in result we a prospective normal was move modestly March It's levels. coincided with

As this move-ins Chart X, in fewer move-outs resulted during month of noted in the and April.

as availability occupancy Slide Taking X, and and collectively on depicted increased suffered.

year, spiked ticked past from ultimately as impacted March the with down half well last X points March levels leasing March, so. fell materially. physical in back reduced in XX March, week or As weeks impact Slide on when the of noted third peaked roughly throughout over the well XX but basis points leasing than quarter. last availability has XXXX indicated as the basis X, in six April trending of X Chart XX-day below greater and first most was second from X, volume in during basis and down of availability The velocity Charts occupancy to That roughly at a points XX.X%. XX of bit year

environment, In at This impact the environment of help zero. in Chart option which mitigate rent of to XX% on a COVID-XX increase in diagram X, residents the impact from month April. essentially rent rates, no ended conversion could XX% fact resident our to of lease and March reflects did you recent change, our increase the April the by which about which undecided response included see increase offering to renewal to offering folks, prospective weakening on to efforts the incentives

you collection X. about have X, we month the is And at would what an in the collected revenue, or of rate only of X% Turning average housing from to Slide if in which we collected our rental term was represent highest, for short customers, look typically XX% rates noted the customers Chart build market customers, corporate rate our residential which our by with lowest. segment, the

are collections, in There May differences May on a month. nuances behind normal volume. the terms at in XXX April, or early trending a how April, in over lays of deferrals Friday Wednesday days, influence the other In with about versus about in basis XX.X% past it's being and few calendar that we're levels daily of the points payment but out

rate has the isn't for businesses highest impact our too best, been markets. collection X, to Moving given the throughout surprising service-related the various customers our income the of the which on pandemic Slide

In and been collection regions Pacific Northwest been and Most the of rates, lead studios shut has closed. sites, all California tech the terms other the the other venues of been the strongest pretty Universal many California for of Disneyland, and weeks regional tourism-related businesses California Unfortunately, down now. are content entertainment Studios, several producing Southern severe. have Southern major And have impact and the including weakest. in pandemic the on tourism businesses and

overview, development. turn will Matt? Without I'll address Matt over operational who to it construction and

Matt Birenbaum

our provide All Seattle place, experience right. construction Sean. half the impacted. in Great. To shelter XX our Northern slowdowns and and operations, were Thanks, California update as in Slide to our in communities pandemic labor shows X regional March eight of regions. be to across availability started is announced of on impacting development how both orders We an second the and started sections

By early as impacts, April, all projects. the Northeast across saw April XX such similar in

life relatively as temporarily reduced shut activity. down proceeding Projects average by indicated was with in safety have little those and Our basic significantly been and seen preservation except of those impact, variations at for have wide average XX% daily yellow asset on slide. while in reflected red a roughly are pace, an the reduced green manpower in

the activity in an considered projects we in listing four is the started some Construction more Bay jurisdictions. the just moved And red week Residential to yellow. And last a many Seattle in of or recently in the from restrictions. essential just to see so, of extreme Area

our to our social add supervisory and and of practices partners, part onsite ongoing as staff diligently distancing our working ensure to We wash have daily safety on-site to subcontractor staggered move been response. our adjust and health checks among trade stations health shifts appropriate

our development These XX a since $X.X lowest represent of billion, cost total volume development XXXX. capital projected underway is of communities which

run we $X.X to Slide a shown average of on year. shifted to few a have mid-cycle our us And rate puts over per from expansion XX, as navigate the strong the a XXXX. half as million, As past far more $XXX years recession. position stance shift of cautious shift billion as than development in more stocks little back our This we

than favorable sheet. conditions a of capital in projected liquidity maximum million. We've been some opportunities markets. at provide relatively XX% $X opportunities, development managing of billion apartment of to shows densification where at with the cycle rights. these total the control -- and projects, with rights Kevin XX comments The and XX this future existing to next of construction with in flexibility additional opportunities growth provide are pipeline future projects to will deals, us an just development flexibility flexible Slide public-private entitlements homes of pipeline Both of $XXX in a our types more over of modest another includes with add breakdown different cost our and investment we timing asset align on offer pursuing communities. XX% capital stabilized in balance partnership and now development

Kevin O'Shea

Thanks, Matt.

slides, XX, sheet. a maturities perspective this recession in two the well-positioned term shown prepared a Slide and we modest liquidity financial next healthier well ended to a balance from Moving very as with position, near

is Slide $XXX liquidity of see over expenditures on development credit our next years, hand. the underway expected can be million first for over quarter-end, compares remaining several to liquidity and you in about on $X.X to XXXX. Turning facility million remainder $XXX the XX, billion, As This at cash which to and totaled spent of the

spend end, liquidity billion. several As nearly billion in years, total $X.X our XXXX roughly on the remaining at in exceeds over our on next liquidity a development exceeds by spend result, $X.X billion remaining quarter and development by $X

On Turning the our years credit show over and we XX maturities. metrics. debt key our our XX, next Slide to next maturities debt

million debt in $XX and of quarter over Plus only quarters. of incorporating spend XXXX, and million the debt $XXX maturities, at exceeds maturities, by million development the for development over of both over our rest have maturities the debt dollars XXXX, on of in and we XXXX and in maturing maturities and in remaining looking balance $X.X $XXX of liquidity seven maturing debt $X.X next For billion XXXX spend debt a only billion. debt late total

In of through development over debt our the million. XXXX spending $XXX addition, years. of our our liquidity are maturities exceeds main all several And all next

from see through liquidity we can relative to enjoy you So open our commitments that XXXX. healthy this,

flow asset and cash well considerable as the also markets to from remain from secured from source attractively liquidity operations addition, from the In enjoy debt extent priced. dividends, to the debt capital as equity we excessive our priced and and ability markets, incremental unsecured unattractively

of core this our we as increases at us target regard, of times range EBITDA debt meaningful times to five pool assets NOI these high absorb we six secured if X.X times all-time through of quarter leverage And additional our with In of leaving challenging could to an times. tap XX%, that near for net is to capital. unencumbered proceed debt end below capacity or a reflecting necessary unencumbered at large,

I'll to that, Tim. With back it turn

Tim Naughton

Great. Thanks, Kevin.

and Slide turning wrapping XX. now up Just to

good overall, experience QX March the month-end, had basis of which is with still the certainly, April, and was the a most second impact what of normal. expected. shutdown, for than very were So, quarter, felt bit X% slowdown, than we a month with results in half we about able built of we XXX the coalesce we lower to by although was began points only to Despite better much the of uncollected

Progress at pandemic. sites by construction were the impacted many our of

options which of scheduled some We communities, result governments next local inspections expect the NOI some XXXX will that and state in delivery construction orders into will for temporarily and push of lease-up halt projected turn delay the year. in in several the and by

have as now to slowly are returning manpower, permitting reopening process Most Matt either as full states construction impacted had an are of the in that been essential as service sites or new currently most mentioned.

offers pipeline development represent is terms of densification lastly, Kevin supported in by of future market options shape $X communities financially. at good just rights, existing through shadow starts in billion And great as well controlled mostly timing mentioned, which we're conditions. opportunities flexibility Our or in

to of liquidity the access debt the debt existing several level markets. commitments, strong maturing attractive quarters, ample investment and pricing over at We next fund modest to have

Kathy, that, for up questions. ready So call we're to with the open

Operator

We our from [Operator take Instructions] will question you. Joseph Thank Nicholas from first Citi.

Nicholas Joseph

you Thanks. are doing guys Hope well.

being also first, construction the seen really space. maybe Just on delays across and on the that you've seen

projects impacts just think deliveries? XXXX? long how how in individual wondering of delayed in So be that you supply average, on terms And will expected

Matt Birenbaum

is this Matt. Nick, Sure,

the year tell. at just What had In terms in due thought what too think was flavor the the on by over of of to to of of expect last even to than being before wound constraints, total that would it maybe delivery next were at and the XX%, inspection constraints, XXXX, and it's I that party the the beginning to play found so obviously, more pandemic deliveries certainly, of things down we reports so But how what third years, deliveries relative I XX% months. happens early really obviously, to on what couple to we up be year. more the depends below out beginning couple

to the seen delayed quarter. reflected it so about final our occupancy of delayed As months, relates and be initial of we've far, on by right pipelines, we've to our projects, is, is going we now, five what's completion and -- a these projects a we what think probably as supplemental, call it, couple by

third So that of that's a maybe XX right underway actively now. our are

Obviously, they process either could areas the way as down. been have are now. that impacted in but you that's slowed change, others see of right of kind that the their early less been that materially of or in enough haven't it Some

Nicholas Joseph

And thinking on of how and given think space allow you picture potential your different states amenities amenity from term anything reopen, changes do trends, and about any different longer as social maybe are the kind maybe cities for or space, to future work progress And bigger to for such developments kind home the about developments, else? then medium just -- how of start Thanks. or then repositioning you distancing? to

Sean Breslin

for in pretty the at pandemic, of spaces. were do well. two the reduce I'll have to what's Yes, there, reduced what look of side others Not may what pool. example. called soft center a we to in in Nick, yes, back Sean. by they but terms equipment taking offices fitted we communities, they're there of place was our terms occupancy see that different can the this tables side and in place materially, that of equipment the that a our will is so existing kind team in And on the But third like. amenity standards is types and space, that it are only type at were, if with where we the that limits as going the limitations but jump on around, take one, before chairs feet that just the what an spacing have be space terms where Depending depends as space. go have in same with to a more that seating number of to on spaces redistribute space of about, talking they're thing may in of swimming items our apart, have and Chill occupancy

underway it's some sort So, they there's to time communities make sure through take amount work proper with various a work going social fair protocols, of just one. the of, the to our that distancing and each comply redensify to to spaces

contracting were it's whether more they but trend, sort terms just were too term telecommuting, in see different trend, comes or whether home, and that producing they a a a for independent so like -- Entertainment, early sort content industries. tell the types trend to of then from And that now are from of things working to and of sort longer home, in there or for mind business people likely probably LA, was particular, that little working certainly of of contractors continue. place

point. it's what I we to a this tell probably to at what it's too see. probably But reasonable early degree, from think conclusion

Nicholas Joseph

you. Thank

Tim Naughton

Yes.

Operator

take we'll with Rich And your from next Evercore. Hightower question

Rich Hightower

Good afternoon, Hope all guys. is well.

Are comments reaction or underperformance the your the same along one little you have you garden to regarding in to versus communities comments your get a rises, to portfolio due wanted style do any lines? I So those high seeing competitor's bit your in of yesterday, more collections

Sean Breslin

As But presented just other in on thoughts few in the Sean. of we that on price metrics can at rates at looked is a slides we've ways. it have of -- maybe of collection was Yes, what versus in terms a share first been point, and talked look few about different we remarks. Bs. in I prepared my some Certainly, sort terms that following, by It's Rich. segmenting

suburban, Bs we're time. are points What running of XX basis seeing As may is, in about basis And the markets urban. across look performing XXX generally higher about or are that by point at suburbans points than so. this most

little better, there's against is but Probably York, differences. in mid-rise, not seen environment collection Westchester. bit not a just high And the be rise rate rise in urban conclusions not that of New of garden bit, And we've York exception to impact size, It's big product material a of the pandemic. terms versus the material. than going type the I honest. where lot many for high products wouldn't to is terribly So but one the a suburbs, to pretty high a New slightly in It's so in the D.C. been better about most terms in of given and too portfolio rise our be probably draw sample little is benchmark then

Rich Hightower

Okay, maybe of elsewhere little I guess versus what re-planned. you're a maybe there terms bit in in seeing differentiation of so

guess as those traffic up Okay, off then helpful lines? come and the along you kind picking we're into of portfolio and that's urban within differentiation color. just that think about patterns the any May between and And bottom, suburban I things seeing foot demand now you are have

Sean Breslin

tours. virtual the wanting the the spots environment, and we're at got more be at self-guided, where self-guided little point. Mid-Atlantic, with where point, most driven, sensitive for are as -- the people given market a of maybe virtual say, more I'd not opposed tours, part It's this either the Not the like seeing tours seem to as as to state to the opposed to many more and comfortable this with material still continue you've more hot to certainly people rebound of

opposed this to a think you point market So it's as pointed or location, out, point price suburban. [ph] maybe at I urban versus based as really on

Rich Hightower

Thank great. you Okay,

Operator

We'll from take Bank our of America. next question with Spector Jeff

Alua Askarbek

Thank everyone. questions is the today. Alua actually Hi, This for for Jeff Spector. taking Askarbek you

just guys I color on the if condo going sales you some now. wondering was more on So right could give

'XX So contract I in one QX under you more call. the went think on

market -- a was Is out I wondering price there the And or projects or cuts closed just just are assume to so, those far. any I expecting expected are so of take all the of were new underway? And lot holding were that you ones you [ph]? are as

Matt Birenbaum

is This Matt. Sure.

about couldn't people recent some was sales I think It question. the hear Circle progress. and Columbus condos

So closed $X.XX generated XX condo. price million. X$XX per average of units and That's today, have as an have we of million

We others of have million million binding actually in January activity pretty slightly contract track with -- under That was another proceeds. $XX February. priced, XX per sales unit. It's deposits. $X.XX million, contract represents and the new higher The strong activity $X.XX

if fact, In first at that our back quarter contracts we you call, had XX to time. go

we've really February added since So $XX nine incremental half the that actually first the And of because March quarter all since about sales first in came the once call. then, million with in into in half early dramatically XXX% of place, orders March and there, half agents traffic in April. the we went virtual stay-at-home sales did of our and the back mid-March in slow came to tours

in the physically been in they're is we tours, was convert or how they'll until has which per pretty But product, over kind won't traffic up. which so, contracts. it might up will do to see XX additional back mid-March. a know get next Pricing number has And in traffic can able the three where stopped virtual and to hope of before although I that is traffic month or consistent. within we say actually really things people the to weeks, week, back weeks two comparable strong just and last picked to be

the XX It's levels, We price we're terms XX, floor. contracts. of pricing for seen points the haven't in a building, -- depending difference and a line asking or what last there's XX, either a of contracts early achieving, in what what lot really on in the or different the

sense. will yet. haven't the building contract apples seen which soon, happen not again, far, into seeing But hopefully it's some so, any better a apples. people until back impact activity, And have additional we'll and But there exactly so we get we really start to new

Alua Askarbek

Thank great. Okay, you.

Operator

Pawlowski Advisors. take our Green from Street next with We'll question John

John Pawlowski

Hey, specials? generous thanks. responding which the markets, guys Sean, in coming few rollout markets responding how better, out concessions as of are traffic become? [indiscernible] in And roll no matter and aren't different in you markets just which terms

Sean Breslin

more as that reasonable as some I you I pretty of mean, to taking the been levels. heard L.A. I'd in probably based across of to weakness I concessions But have to just and response in conversion from has I on tell steady part, rates it's others those mean, for the of market average L.A., others healthy are sort in what the the out of would much to us what guess general markets. have that to already pretty not get terms probably -- the spur you what most compared the happening you action slightly the been market on to as the say rebound, where most pointing L.A. was the are in with to some still at environment, pretty obviously, more was hotspots, get for was people apartments, to required out which environment, the around exceptions, beginning are and and be to really limited may are as people and that shopping given weak, and to in relate specifically people but recall, the concessions York, doing exceptions give year. in virtual New -- reasonable, given tours, hesitant,

closed. apartment people only made to certainly be with happening of an pandemic difficult out what the And being their shops of it with being rent and qualified the able come a who people and that in afford in apartment, shop that lot content terms for studios Southern being much given to all are And produce an to closed. California, more able was

it's one challenging. the little a more that's So market been probably where

John Pawlowski

just months, price D.C. basis for in winner your Obviously, market. D.C. the on that the you next metro this during and market then portfolio months, it the any question about GFC. up growth rent other just it's base, time, defensiveness And still one and employer the the relative last or a a a put would mind, XX there terms Okay. of of point and XX me, occupancy In of is your the shifted, that trends? D.C. in against different now

Sean Breslin

we as what hold I on and up composition the of D.C. of thinking know about think based think now, relatively just the well. I workforce, should

about date most the up on lower joblessness pandemic impact level think of part, the of to thing really opposed you things down, started, job for If a as to of and where loss have the the heavily lot at those type concentrated is the how nature a trickle it's trickle and a kind service jobs.

services, weeks You're to even may of But thus at point far, different in of talking sort restaurants, though workers, And to we've a professional impact. again, have that et like well. been happening. it's terms lot people And expected well, defense, relatively But to add. of about food where It bars, thoughts disproportionate But service up some. trickle this hold or up seen six may of others certain hotel are only cetera. what's highly things produce D.C., in educated maybe that population, geographies, sort. L.A., content, paid

Tim Naughton

I the going federal No, the the pinched areas in are between federal the not cutbacks state governments are there. mean, of see economy, I agree. But of and as much government. knowledge nature to to be government, beginning local knowledge base,

hospitality. D.C. little exposure just that of think it's because hurt bit to think our just I initially was I saying -- a

to think it relative John. You up well which stand have right. over time, obviously Sean the pretty early I kind here, think Marriott had Hilton I the to of rest would pandemic. massive expect I furloughs is on both of world, the and But in

John Pawlowski

Okay, for great. time. the Thanks

Operator

Austin We'll take question with Wurschmidt our KeyBanc. next from

Austin Wurschmidt

if be Hi. project, do negotiate you you construction Good a new were to cost I afternoon, versus think what was contract hard everyone. curious today would a on pre-COVID-XX?

Matt Birenbaum

We is certainly direction down. Austin. question, headed the It's Matt. Good think

as you several defer. think projects, in our not here we you yet. of I very that to sure have moment, I'm decided see see that this would And

the of quarters that four quarters, starts some in, buying three there we potential be I know, XXXX maybe. our we is of will reasons opportunity think One deferred a don't better because

and -- through have starting. or its capacity deals while system, they where see we'll will a trades first Those takes the that's -- pricing excess longer folks there's of probably to start probably probably or four way longer if first. to the site over the it think be I quarters. anything, finished six may gets take it stuff and finished to it trades concrete cut the need to finished, where quarters take aren't paving to were some in work early of see to some than start So funding underway next They'll like before the and and

private of time that So advantages the of that a the of general our one we lot contractor, construction, can because strategically more is we which contractor. business We the own XX% kind play have plus third-party using little are general than were our we of of a and side is a the way if works.

was time was last too XX%. So still the But correction. will downturn, happens. early down that extreme to maybe tell. an what In And We'll see it tell.

something. wanted Tim to think I add

Tim Naughton

for seeing think I lot the probably to into I just years. say, We've a on this, Austin. Yes, of obviously, X% going pressure would we've been construction increases seen three last costs. X%

downturn most they're bit given things oftentimes that, probably social crews, provides subcontractors their with workforce, part their expansion. a in cost early conditions come just bit more little to of profits correction. somewhat, pricing. with perhaps, often and little down, a as of conviction terrain, like to a in commodities, as general well out it the bit changing of Offsetting start by certainly And benefits pressure a distancing, So see And being roughed from was you we likely expect those protocol, get reduce terms -- we're strained, us putting again and offset a productive wages, that subcontractors, left productivity come that. that materials, you an that should would already downward all of on

to to and of sense just So are cost NOIs are They're way up overall, make of expect given down. flat, to economics, costs, the the to on down their we beginning anything, need the pandemic. do since for come going account if

a equity sort of markets, in the bargain obviously. for Looking

Austin Wurschmidt

That million. mean, had I helpful. think start really guys $XXX I to. previously you That's to you alluded expected

be projects million in. Some that of fully for of What this to baked cost would you come $XXX those percent of cost point? is purposefully delayed potential at

Tim Naughton

or of I commitment? none the would cost with about I committed you start to say the talking mean year. it. are starting We anything haven't

Austin Wurschmidt

some on our cost of The projects.

Tim Naughton

cost be land we be already. would The that would where the only bought baked

deals of XXXX land -- those of could or in nine we quarter have starts. think did I could the parcels be been and two buy two first that

of any is construction on spent so of those on cost of bit two deals those we any jobs. little A So baked, soft million the the $XX but far. bought haven't we

Austin Wurschmidt

Understood. balance And $XXX Kevin, if last in finish But of that small a then million, leverage any in or subset year? expect to sheet's Thank shape. great you. pull a do you the start where you for don't me, Okay. certainly one The to bit. you only here maybe

Kevin O'Shea

as to out whole we times the range what at remarkably target NOI, capital Yes. range We're to Austin, standing visibility have activity the us to probably level I right opportunities on over and we present our we're leverage development downturn incremental low going investment have spot an hoped to and times when through expect X.X intentional. of full we take clear it give Dennis XXXX at of we capacity mean, in debt on very also our we have coming the versus capacity flexibility as but be, as -- down the may drove and ourselves of not spent. us true activity. five respond might in provides only things, themselves years months, much lot to that on capital more here the mid-year have and more awful which be plan would we levy to update We that's for had so a throw number more a find scope a call fulsome provide well leverage to to few that to six EBITDA put and markets including of last now net the

so raise to guidance, here I initial to of expectation we opening although in from through as in pointed capital out relative guidance. may We've abundant two-thirds upgraded all here already hoped to line much near our that the year went we external a is raise think raise raised to our answer When remarks valiance. standpoint, and to But $XXX the our initially billion. million as plant raise. regarding but capital $X.X your of my question we we provide what why commitments was I and liquidity need through term as of our open not the bottom haven't We that

based modest I what levels in you looking so is. it know debt think going It's pretty from here absolute today. we capital are where needs at and terms change the sheet our probably to whole probably a forward balance on not of going lot can

Austin Wurschmidt

XQ. but could and I say in helpful. spend to getting what and seems to be have incremental get wait was don't have leaps I you you it. It it we'll lower up That's the Thank extent guess you. you like the some see

Operator

Nick Next with Yulico question from Scotiabank.

Unidentified Analyst

Hi, this is for Sumit you for [ph] Nick. in Thank the taking question.

Just following discussion. development the on up

to going as a XXXX, as that little more yields XXXX? that's lowered stock looking out for a development. color or development research on you developments a of or you've you're near You in introduction in if the just versus could at wondering mentioned term footnote what kind your give I'm

Matt Birenbaum

Sorry, can question repeat you question? the the about Matt. The on was is shown development? This yield the

Unidentified Analyst

Yes.

down that development slightly yield you you down assumptions nearing brought You as completion footnoted brought reduced [indiscernible]. or saying yield for the

particularly sense term near to are the So yield of split that just the more trying for reduction in what's developments get XXXX? a in

Matt Birenbaum

to carry general underwrote. deal remark rule, market we time, experience Until leased that a we're practice a we to initially having. As to has reflect XX% tend at been that the that the our gets kind more what when rents of then the than we rents actually

So the only what mean particular all In this are chart that on place. three that. that fact leased current have rent completed release, there are the that's schedule. those rents actual rents roll that deals we we most where and than we've Then have on in about that Those done is the Attachment the other by rents we X. the three for trend on communities but talked we reflected the don't leasing there's there case, reflect enough in years XX% more we've and

not assets, environment those have we to pandemic. those been. add XX done did the the with consistent That's practice related clear our any forma we the always just enough make a changes yet still I are update of other note pro haven't in guess The leasing endeavored has that what to we rents. original to so because

forma. activity, them some will We're pro still the leasing get in that carrying initial adjust we grants in were When we accordingly.

So it's really practice. not any our current change from

currently I you to was talk how volatile I think environment more that. they're leased? understood it It's to want than it's just to do a an Sean, additional sure disclosure been. make

Sean Breslin

to Yes, as on one thing just indicated. that Matt add

there assets Just lease. six quarter, the for were first in

them original rents look producing you four average time $XX proforma. there quarter for to together the in you across one those above Seattle some original original for modestly blend were changes or that above But were so all our proforma. cost were our that equivalent of in and but One time northern roughly six were If was rents those the rents that deals. that X% at at proforma on were point below at assets, was deal the proforma

about reduction in X.X really the basket. was in only of yield of really so points So a net immaterial context XX the basis average weighted the whole to

Unidentified Analyst

Thank so you much.

Operator

We'll next Guinee take question our with Stifel. John from

John Guinee

capitalized and no interest a as would here. longer there questions. into to XXXX, is expense? slowing can given Guinee up and quick -- if interest on development speeding South is, down thoughts as stats or markets any you XXXX in in need slowdown One how Then you John development in such costs G&A situation Two other Florida this Denver? affect second, has that you and Great, people

Tim Naughton

that the pretty larger respect had take as terms drove of in have the well. exposure Southeast a tried third and active economy the been in we in piece if into not. cost if With been to this second Tim also to to activate markets. both respect you will, the our other first Florida investment Denver as and our it take of market footprint, part for levers, development the on markets in those terms of acquisitions and developers. screen talked want and our bit into entry of to we all or diversify John, There what have to with you party potentially been We've We've past, sure. really to funding knowledge of in about Maybe both to markets those Kevin other the markets, type Naughton. markets

balance we been as some haven't capital to sense recycling. tend invest recycle So well. That it's function a much will as markets. they in in those trim more opportunity now, and expect some make and to markets as can make markets It's the sheet, held right from to to to we tend capital anything. really back We'd by that get or do desire so to But asset continue. you that of those debt

think there. don't anything's I So changed

other think to period indexed us over the markets continue in and sense a are over evaluate we'll think long we to make standpoint. think We'll for that could we from time long of therefore the innovation that a term outperform we economy demand

delay more I opportunities to XXXX. going the in we we you your maybe in. to come year, deals I if to probably start G&A it three can two, this going Kevin stacking next always development. have what think we're to want and the or development had second years. to with XXXX up right-size We're and for To to extent around the organization question means do the try need that

how for just years. obviously. becomes three have but of very the is platform the environment next really viewing to next properly the this the protracted part calculus a or over the the to four So today. you're for recession extent, what To it you not not but positioned make that six That's for we're changes do months sure that

meaningful costs and to If We recovery downturn. balance this XXXX build construction we then viewing of XXXX. sharp as from of start to the slow kind see are a some you a a in up contraction do see

see a for You be to really good time XXXX. argue would product start delivering XXXX, in which the to starts be XXXX could heightened

make already We of really not and to view not right changed want development $X.X we've part mentioned Matt and had that just roughly or next the three late-cycle around to $XXX six years, In brought type of our type for in months needs much sort organization It's down construction sized because has it sure cycle. as got downturn already next over over dynamics. terms change to the four from material. the billion we'd million it late

Kevin?

Kevin O'Shea

last to of bit it year, as did what we XXXX. reductions did bawling. a to our start so things need and recent those of when You'll We we together groups for this a some XXXX budget in have that some and capitalized odds year put expect result cover and for below overhead in staff be decline our was cap

sequentially half and first you bit did quarter catalog what one-time few If would in today. increased would increase in know the somewhat the look items the on catalog expect due at we decline quarter XXXX based little overhead for costs of such happened back the that what year first that a we but to full runway payroll benefits a year as overhead

John Guinee

you. thank Great,

Operator

We'll Alex Sandler. take Piper from Goldfarb question our with next

Alex Goldfarb

afternoon. Good

One, a month, fees. just is Is about per open should be based your wherever they're eviction or no me. open, months $X.X few talk something within market, your about be that million big from you this million Then the obviously, number right we amenities on a that I'm of fully view think Just can now? communities should amenities mid-summer, you month? whatever of so by don't the this will thinking as in where bunch it assuming for expectations? $X.X won't have two beliefs next questions you you as is be charging fees the aren't maybe about about the locked late impact moratorium how you

Sean Breslin

Sean. is Alex, this

way that are of our of $X.X use commentary about of in to because perspective some amenity fees million XX% amenities Just closed. was

next is you're going see a over item the of months. to expectation our build So few line that slow

I to to begin related is just describing response in reopen, stuff states credit that going and late majority of We rebuild. rest it As market I the slowly then based some would it sort. limits fees to the by question The environment, card was of that's convenience as small a will it was different the back resize our snap to local earlier of we say, it I be should fees expect the rebuild. fully to jurisdiction on things opening don't guess because and pace of occupancy that and but

Alex Goldfarb

the down and million. you so sounds that hey, had credit, weren't line was you it shifted just guys money your it a delayed sales. the we didn't paid weren't drawn if the it so quick of or It condo sure like Was pretty guys then It's -- or million there guys rough that your realize you and you on that was projects, have we then just be sure Fed to $XXX what back pulled bunch you about $XXX million Then that Okay. or $XXX quickly thinking? on going you once? paid more you back suddenly paid numbers going once of in if all to were at you banks fund need

Kevin O'Shea

impact a really out of commercial really particular on did on this not million. of just basis to Instead, markets. Fed $X.XX nothing Alex, related not credit, to us draw development we of line and a anything the Kevin. because activities, the that Hey, stabilize in before There to the had in the any We is use. fully didn't a stepped of was its markets initial it basically billion that had caused our We of our $XXX million really business, capital because the reaction $XXX mid-March. and drew paper. because that our to We precautionary in portion was AvalonBay it have not pandemic so of stage

of capital. precautionary would room to choppy be and incremental greater So control give of on time the we ensure a would to over it months set was what really that us. abundant done basis ahead we maneuver thought through us a had That

Tim Naughton

we came ultimately so that if was just constructive very in, the Fed the and to, Maybe Once back. we paid that became as split that the obviously, bond the bond to market out. needed thought just reason had straighten we markets [indiscernible]

Alex Goldfarb

you. Thank Okay.

Operator

our Rich take from question We'll next with SMBC. Anderson

Rich Anderson

Thanks. everyone. Good afternoon,

more the but whole take would be good I it an activity a beginning a the thing what maybe to negotiate. multifamily. of heavy at that leasing perhaps was for and maybe first My to then guess their had there First was this thing considered question, arrow effect tenants was thing in it, bad season started quiver was about because thought

or So we impacted think? do negatively could think played what yourself a was the how you timing by changed but think out or industry Not you from you have the that that do cadence it do standpoint?

Tim Naughton

year leasing you Rich, know I rent pricing in velocity gets to of when what benefit better you're that and would you mean, it's our -- most hard complacencies of market now, say is know, have the only it the for growth more both so increasing. [ph], your a you roll the rent

of it kind all earn right now. timeframe that's to March in kind obviously of You and that a July challenge

We have a lot in of them. of any things we our control, haven't gotten

Rich Anderson

The is term. on, do anything more question perhaps you and guys realistic Yes, longer I come right? mean, a can second

the think this? or another thought right don't now? years or about Is change might of have five might enhancements -- you fundamentals about look something you from idea they technology I don't are, as Recession, and and of you this visionaries but of Great for the of pretend points know, came environment, thought types price if out of sort you're So product different, know are the let's sake guys have the whatever multifamily it's alternative of as you more consequence a to did. internal that comparable out about you or an space printers that you they're a home laser Do have like now like or this, needing a all industry of multifamily maybe will Do because people there's that at evolve office it feel with there's or it be from how any you from the out home? what work question build basic all maybe that do more working of evolution maybe of the that

Tim Naughton

our what nature households. in In terms going literally for -- to there's been the I business. continue great of drives driven most our and professional person very are single the children. singles the to few think be households And of such growth That's It's by that's demand households. math of there, couples, very,

see There's the terms it of but trend already service, the of either home remarks. that's his think know you Sean You already some I in a kind -- work do and think probably you I product of the know, to type. from some this of alluded -- that

perfect that. are all already rooms our I feel bit. they think making you basis there's That lounges had communities, a spaces good -- for know, might co-working, accelerate all of putting and meeting it expecting our of now. and started a We with in

begin environment much good bit about prefer controlled if they from think which Just more is environment. a a bit with. standpoint, to you pretty to space, size it, And but Starbucks, resident a more might little -- they're that

going -- sort than to some work going than other They're from of other place other than office. from, work they're to the

a nature convert it within it's know, working and, the on towards flexible, the grander lifting I I in centers, think high think a unit, of to spaces, of you're are large maybe where spaces dining more schoolers are who continue think can spaces. much I equipment, then, fitness more bigger, their and that just day where that. based been day, going like kind another to think to kitchen, in the trend already -- out course bunch the things with a have you a I space to know, you had see started, might that. accelerate, there's your going are you open the in comfort movement change of large, And unit during faith club know, cleaning People where of and office community a with peers up you

street. where apartment it of up of good there honest, day the their is think part My -- sort against don't part that's across people that be of to noticed I now. the of up set office was, their right right I good space And number community desks spend an a to their window.

think of And terms have there, we the to can know, space do start they historically. folks you and, high during -- So need -- have I kind be support may terms day think just reliability, than of design, that people certainly the that. of broadband you that, speed in anything then, unit and to for, more they about know, that the in using than

throughout, I kind one lastly, being throughout the to to a be unit remote of, Smart access I initiative, or in freely step mentioned right Home services the is the front know, intriguing central sort right unit that that just to And get handled I up the extent entry, most away. kind now, community folks than office pursuing but can guess by lot of of people are aspects resident rather and and allow in -- to goods can the which the, get has flow to the you of that to know, a able somebody you desk of of think having potentially end of the

you'll So, perhaps think were trends all those you result I know, accelerated know, of see, you this. anyway, that just things

Rich Anderson

Appreciate Thanks, color. it. good Tim. Really

Tim Naughton

Sure.

Operator

[Operator with will take Instructions] We question from Zelman. Hardik our Goel next

Hardik Goel

guys. sorry, me? Hey, Can you hear

Tim Naughton

Yes, go ahead.

Hardik Goel

when but them XXX% there's you buffer just look that's update look -- I pipeline, know deliver Thank it going talked wondering you. I I pipeline development development about to was it [indiscernible] if if how at into today? do you late Matt the of XXXX is about on of and still uncertainty How feel lot underwrite there? or kind those? the beyond. there's XXXX, a would yield mid-XXXX you but what know underwritten Where I

Matt Birenbaum

Hey, Hardik, it's Matt.

year You know, that in last sooner in in the XXXX it, they'd than call if you deliveries that know, delivering the deals generally otherwise deals XXXX be first are because -- delivering were that. are started

see I we'll So what guess happens just on you right. we'll deals, those know,

fundamentally were. rents. first were of to on deals it's analyzed, some them market think higher what We'll the of I -- just going depend it's have in they of deals geography where happens they those in place because yielding you know,

better So, little costs more think, bit But and enough gives to early the from you get be buy advantage in I are, there's you But, portfolio. in we services are quarters. guess to of don't as shifting cases yes, and know, know down bit realize it market stabilized few construction risk little you that the actually few the is trying a we a in that possible same to I mean, as risk a I a slow take of, room. the mentioned, there hopefully, little some as construction a I as to could a that, theory, in what quickly -- might

now You just to risk happens and it's the then. you what between know, know, of market rents

Hardik Goel

add just I'll that. guess I to

to I capitalized a recognize environment. first different deals going in those and we're think are capital

down. April believing figure, of basis, to saw underlying you well got three that both still open there know, to We've remarks, growth, unemployment, were even our think if you should I rents of some lost they well fundamentals, pretty know, as household -- likely as as for looking a as with in we're up, start while continue XX% to slightly supplies. year-over-year of comes Sean's delivering flat and as cost negative workforce, So capital at come and a there's on the back quarters states but you you that as basis flat be see, X% know, may you we're new still

we the you So it's, I term before, and strong, know, -- in I you late XXXX know, near see that's pretty could to think, it's know, as its take And ultimately mentioned toll going you delivery. XXXX on. a pretty

know, is economies doing, of to start blank start, doing a and its footing. which at start who have, what you deliveries maybe regain you and really People to time we're a dearth starting

Kevin O'Shea

Hardik. just No, one thing other of kind

business it and the standpoint of last our a As sort about through flows development, compare you earnings how downturn. model think perhaps to it from

emphasized XX% term to match term development we've with the respect the we long know, underway. we to being underway. about And you sourced development capital at [indiscernible] really fund long that's As capital were against funded funded are with QX, over

distinction I antics how as an about draw you perform and in years, the are here really So touched in think we on AvalonBay but that's to an terms that's important think might of in his do important how point. it's -- coming Tim unfunded point built point development, we view from and -- the and relative open the of more in lot had development downturn of with respect accretion commitments. to in more to sheet positioned a and funding say a way much a view of balance we last

us ago funding is know, yields to on very basis time XX for developments and X%. when shape coming you be. range. whether X% that with the debt We'll around probably were X%or in XX-year know cost really out cost at somewhere are yield in today At see But different. Today years the a we X%

much and development all. over we're that at And match-funded of we need So, already don't and really XX% underway. the

the painting or from we likely you growth so already underway. so; an paid accretion. XX% on So we debt standpoint, source for that and benefit profit sort additional to this to of terrific that's of in that know, we've that be extent, have And do really to source to from, use are shape incremental this capital

Hardik Goel

balance guys. guys with the begging kind standpoint, have issues I I'd my you know, holding $XXX from for problem it's confusing have. It's your in sheet kind to just of that. sheet. That's you at all. no of And people never I you the sheet, million find when are, crazy There's with it on resulted balance balance no me.

this, best developments an IRR that a assets. lease slowly is XX% and on of understand the number, will Tim, IRRs. about all kind environment. thinking through and have the range things number that X% two more about know decades the what last still a get is does look maybe assets like? people X% this the on IRR doing in and that to cycle. obviously during XXXX What they're been was but I'm To downturn, the up have your about XX% guys you on nervous Is you beyond? in talked Matt to I the more number, guys started You on get trying stressed for know, What basis, And X% are, if XX% you these coming

Kevin O'Shea

couple in XX-XX at past, of yes, the or the into Those end, on like kind had, we the saw over as you from on run yards, where cycle in XX delivered what time, the you it up I ranges was started But least what, XX capital in late you at clear with the think years, shared have downturn turn we you cycle so the horizon we the out are point deals cost Yes, think were beginning know, a think when at we and out of early can't right, -- you that one -- fields cycles least start over last at I low time downturn. -- at it years. I [indiscernible]; we stages X.X%. narrows in but were from our was around they

high On the end it was XX.X% range.

So, environment. say, of the delivering I that know, were know, going weren't better, -- and you costs that that something construction in it's time be, sort with feels would know, -- you peaky started you depressed the worst to

in and start I be and deals think still kind much high of around; there XXXX have digit could that. we than it XXXX, single hang that could be better

Hardik Goel

Got it. you. Thank

color. Some great

Kevin O'Shea

Thank you.

Operator

We'll from take next question Haendel St. our

Mizuho with Juste

Haendel St. Juste

for Hi my questions. guys. taking Thanks

couple of for here. me quick a Just

the to guess, help market collection? you April rent reasons [indiscernible]. are identify And get collections, Just lead show corporate surprised in or what income going the I've seen that? help business can to lag [indiscernible] but this of I it's is what's and more key us I the just claims understand supposed back some or even to rate related to collections apartments more meaningful us

Tim Naughton

that sales but essentially, know, in pretty booking are kind rate on and team that Okay, heard have they where is reached it per profit of more. the us se a from of corporate agreements end little other sort basically sort the know, the the quickly. that -- think of It's home think are of has bookings And is providers. you essentially, were I users some then, hotel it various others. or with site a units yes, are here, extended our way a I it it not but these quadrant. mean, And of the of about I'll that And like corporation the muffled up dried the there, call leasing marketplace. I are, and guess peers a I it, intermediary that's those have stay corporations many an almost you you collection

little from people they'll are or states running for XX some were somehow who really short term a bit consulting bleed And term, And others days. longer on more months, out three four longer. were who assignments there there

demand quickly. evaporated their more And

prepared through see lower we're in as we the indicated rate of like generally work quite incomes, know, you things why addressed. slide than terms collection from remarks my about a process good with is our plans we'd But residents working that. yes, rate which apartments, them referrals with higher quality residents, just what the So, market and to be household in other that's bit and the as was

Haendel St. Juste

That's helpful. Thank you.

be clear, or but the wanted it to corporate the just So to right, who the individual sponsor? hook the on ultimately, is is

Tim Naughton

many portfolio rates of dealing pretty is occupied on to good what extent can they is occupancy. have, ability handle, occupancy with. or or companies able much XX% a to really corporate payments have our three pay across XX% That's The But them with technically really strong credit. and to be without XX% pay. we're That's sheet who none these of intermediary months what you clients. they certainly Not balance four the they're their to have based but their to know,

the the the lasts on months. and the [indiscernible] impact pandemic nature long So travel of it how and next few

Haendel St. Juste

how So, virtual been virtual? or in percentage to traditional more And are talk compares been those sign year May tours virtual early you've conversion incentives bit historically, also tours you what get did -- can finding April the more rate the to have on that -- a you the tours officially? of and conducting this you tours to

Tim Naughton

question. good Yes,

tours have nice work. I of to nearly But that the tours, mean, composition don't of pandemic, know, virtual I front nature escorted are that in with You right in it, in I more are April, business, me see for was as as a actually you people rebound not it getting know, our self-guided or know, to terms of commercial given would say you tours. the of comfortable the activity effective but

of some that And you had units. really website, they or fine discretion community cases, some know, individual to that the basically in customer where consultants didn't the do through want with through FaceTime our were online of it through They come then we someone. at virtually. doing was As would

but the investments accelerate reflects the nature as evolving and to we're our technology and making, technology we the it's view, we're in relates it's making the and business going So, may it I of and already think that support. in certainly that where future

type our the side, prospective in and on where the self-serve various activity for -- of via the issues see and of to of go other even We contact diagnose many customers to self-help, tools unit. call before and and via diagnostic able to move and doing lot we're And and try that being no actually cases, other sort a the FaceTime to in. staff sort things someone side tour maintenance A between on includes our our packages customers customers. and

things I we've accelerate will to more just efficiencies of future. that that overall already lead counter-putting will platform think the So the this far some as in as

Haendel St. Juste

Got it. Thank that. you for

Operator

There time. or for to turn at conference remarks. is Tim any the showing I'd no further questions this Naughton like to Mr. back closing additional

Tim Naughton

Kathy. Thank you,

I may it In going Zoom somebody seeing but maybe say But call. see don't fact, think to -- read, forward normally and look of week I'd to a during that a I And -- being a hopefully happen. you've -- on lot even during talk I that's we'll calls that cover. today. got to of all you with know us that lot to

safe. care take Thank stay you. So and

Operator

today's Thank participation. for you your concludes presentation. That

You disconnect. may now