AVB Avalonbay Communities

Jason Reilley VP, IR
Timothy Naughton Chairman, CEO & President
Sean Breslin COO
Kevin O'Shea CFO
Matthew Birenbaum CIO
Nicholas Joseph Citigroup
Richard Hightower Evercore ISI
John Pawlowski Green Street Advisors
Jeffrey Spector Bank of America Merrill Lynch
Richard Hill Morgan Stanley
Wesley Golladay RBC Capital Markets
Sumit Sharma Scotiabank
Alex Kalmus Zelman & Associates
Alexander Goldfarb Piper Sandler & Co.
Robert Stevenson Janney Montgomery Scott
Richard Anderson SMBC
Call transcript
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Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Second Quarter 2020 Earnings Conference Call. [Operator Instructions].

Your host for today's conference is Mr. Jason Reilley, Vice President of Investor Relations. Mr. your begin may you conference. Reilley,

Jason Reilley

and Thank Quarter AvalonBay Second to Earnings you, Conference Matt, 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 this may be yesterday

during press usual, with our be on attachment As terms, measures and include the definitions The operating and his of release Communities, information available encourage may Naughton, remarks. this the to review does financial and website an AvalonBay And turn I'll you at and results reconciliations used which financial to call discussion. also that, over attachment in, today's of Chairman for Tim? and with Tim our to of performance. non-GAAP is other refer we CEO this

Timothy Naughton

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

focus last is a an we general currently things are have before But in over balance recession. on sheet the will say I started of would QX we've and development X on certainly an results, a economic about comments comments facing. on Our summary operations now providing the deck, months perspective environment the an I the update some on getting entered that few understatement. thought To offer changed

we've a longest of heels health since the the seen the of the in century. the expansion severe largest most are in on global We Depression economic on Great downturn The and is crisis the care middle record.

movement over Vietnam and experienced just events economic across been It's industries aren't XX distribution indeed population. unrest the said, rights having the level broader years are we income these but on and at unprecedented civil a And And haven't on wealth these ago. also an is since social times. unprecedented in but activity impact

the doing and companies even they're and workers quite economy, virtual well, actually thriving. some leveraged For to are those

over companies to shutdown those then temporarily entertainment we're as quarters. of those populations. the among the and in in real be in lower-paying survive, impacted well some undoubtedly workers minority then And by others, and events those not For sectors companies as few effects will leisure the normal basically evenly of impacted furloughed permanently the and companies these jobs events that and for downturn. economy Many the These now, the like if next sectors, feeling service and join in operate restructured the they for mode. next these unfortunately, of or bricks-and-mortar the others certainly their will by AVB, over those employees, and And most several workers ranks years. travel, unemployed are will are need

the and just the shape shape of but health, and not that profound normal also political the length carries prior downturn this economic of social and -- economic to result, likely a As length the are recovery. risk shape risk recessions

quarters in let's quarter, as be direct business as on the we a Slide Having in all a engage Right to shareholders. starting our the the try expectations managing and and was possible months now, to results hard to this X. while best recovery -- And our play for to to our downturn, of project. So in and that, and we'll is unique sudden the do our challenge how communicating ahead. and quick the the presents in out understand transparent current timing turn will business as environment and our shape said that you,

average As a new a X.X% of at was had with almost this we And revenue X.X%, development QX, by of almost X% excluding basis, or X.X%. $XXX a Core FFO quarter long driven no retail same-store quarter. was retail. was or is around had down development XX-year sequential capital over quarter. And raised of starts down year-to-date. at X.X%, And $XXX coming so a starts excluded. from that of most decline from no bond X%, a challenging on deal or revenue we've far same-store growth expected, rate QX lastly, this in million X.X% cost million if an We completions initial

metrics share balance our in Kevin heading positioned well will his are liquidity, into remarks, credit As very downturn. sheet and this

a X. in Slide drill down decline revenues to on same-store bit this I wanted past the to more quarter. residential Turning

slide occupancy depth bad primarily given lease was and eviction coupled markets the a Higher-than-normal this down decline operate. normal. attributable the demonstrates, breadth in to uncollectible of or continue, likely As debt. is Economic bps was of with debt loss the basis bad and to was revenue points, which we the of while debt many occupancy downturn, moratorium XXX bad higher in than XXX

payments, entered of rate higher in was reflecting other lease credit rent over card QX of actually quarter past common for area embedded the We and this concessions XXXX portfolio year. fees income in quarter XXXX, for residents, this lower our leases various our waived on growth including convenience amenity experienced as QX also through we late Average up and into in same-store fees. X.X% QX

X. Slide Turning to

As this a poses recessions. I other mentioned relative risk downturn remarks, opening to in unique my

job renters markets renter other losses that areas These are include from downturn, with cost rental occurs higher some home only demand. impacting In any to Many is leisure relocating, back are and is trends markets. urban/infill addition work-from-home to demand flexibility even that the due and driving or shifting their that submarkets, household lower-cost parents. perhaps the pandemic in contraction to temporarily, or consolidation

particularly for half back accelerating quarter. of rise. the single-family seeing we're space on homes. this in Many record-low reported the is past rates the demand desire the and temporary renters, rate homebuilders the orders is And remote segments reduced and strong the likely Second, students, lastly, mortgage demand towards quarter, homeownership have corporate And for models of higher factors important canceled, from while public corporate is fall. weigh been for on performance learning activities crisis health as until These most on-campus X and abated. will adopting limiting education sales assignments has

that, Sean? On begin to it once also workplace. more and the hand, Sean turn to will over detail. in recovery to I'll the portfolio discuss to a they contribute robust other likely employees With more to operations return performance

Sean Breslin

All Tim. right. Thanks,

throughout which is factors Turnover the quarter, the down on The X. highlighted leasing XX% quarter year-over-year. previous roughly Slide to Turning Tim volume about for X%. slide fell impacted the

the about velocity, certain volume exceeded lease leave So XX% May in of operations we a experienced shutting our to for leasing down breaks variety resident in operators reasons, in increase when a materially including markets. of apartment notices communities corporate most

move-ins result, a for quarter. move-outs the exceeded As

As vacate of volume our as which for roughly August. is with communities, we July pace stabilize lease move of should on into occupancy notices yesterday, net help to the volume

X lease few a Moving it both point with to moments basis for most We break from Slide volume mentioned effective X a Slide rent to the May X. I in occupancy and lease experienced a of change April of depicts Chart ago. the on result as physical quarter. decline occurring XXX June, in

X.X%. in lease change while QX, July balance has dictate change down from but release, slightly blended the was As move power points June, detailed XX change basis in rent year. down was effective of we nature rent for demand Rent will housing as crisis and of health economic improved earnings pricing and the for through the the environment the rental ongoing our our

X. Slide to Turning

You the can distribution Pacific the reasons, see regions both Northwest of regional and change lease a challenging variety for Northern California performed were the while for and effective the rent QX. of Southern best. most

roughly Slide QX points. submarkets submarkets. submarkets points. more suburban at submarket XX basis to submarkets performance by suburban change XXX by metrics XX an From from urban to April submarkets trailed basis points urban June, standpoint, type. And suburban by declined perspective, from a as by Moving occupancy only basis during compared while fell look materially XXX deteriorated to rent Urban to

in lack in Construction beginning and including factors, suffering Slide from delays during America, across a weakness on-campus on mentioned demand, in corporate extended of his and several Tim submarkets uncertainty desire of environments short-term pronounced discuss universities pandemic development portfolio, weighed urban the density. Francisco, most price parts of for more general occupancies of and deliveries regarding second our Boston is Shifting and our pretty learning a work-from-home across quarter. about concern the urban a in policies San portfolio. remarks, prepared XX a to variety which at corporate both of is at demand Unfortunately, urban the population points, the While broad-based it's L.A. affordable to

by of an shortfall respectively, and deliveries XX, year Slide on XXX first XXX roughly X of units, and short NOI approximately for Chart in expectations the into translated fell half noted million. As occupancies $X the our of which

Fortunately, X/X balance starts, all address now some slower and Kevin a the I at a of initial are expected of construction turn our following sites it over across certain shutdowns time, for albeit further of with Kevin? our period under of sheet. assets. currently pace funding short way, to development about jobs to deliveries will

Kevin O'Shea

Thanks, Sean.

the current starts far about start Turning million to to beginning despite to XXXX. for having have this new response new so $XXX Slide construction year environment, the XX. year construction the we in projects guided to In not in any chosen of initially

ahead, are these expect expected investments. to lower costs basis breaking benefit so starts. we many this prepared costs hard lock Looking can we wait we before lower will of planned our on that construction on in for And future a correction ground

way activity difficult labor overall a we real-time indications by, subcontractor to are softer market Although their into construction are pricing. see initial construction in beginning makes reduction data and cost come suggest to a

As funded these we point for view. can financial Development remarkably a risk you XX% financial which capital, in projects. on of when long-term on having locked profit development and development, long-term not XX, a starting price are the with in we mitigates by as returns is already currently we under also with spread see investment strong Slide under have expected position means construction, developments only of these matched match equity debt projects were construction from on the but that is the the that

those our XXXX from Slide to financial is last recession. strong an today. exceptionally XX, the particularly credit we as metrics entered enjoy on quarter to Finally, continue comparing when position the shown of evident fourth we today when key This

since XXXX, from ratio Specifically, net to X.Xx. improved our debt-to-EBITDA X.Xx late has

Our to ratio from X.Xx. increased X.Xx coverage interest has

to rating opportunities downturn XX% that unfolds. NOI attractive increased balance may great And flexibility unencumbered AX, to strong This to to pursue A- investment Tim. to with back sheet BaaX it And BBB+. has with us our this will turn credit that, position as Our provides from percentage XX%. improved emerge from has I

Timothy Naughton

All right. Thanks, Kevin.

offering and was a of the summary few the slide last downturn. suddenness a the depth Just comments. and the driven turning by to pandemic challenging the quarter QX of

occupancy development impact the delays from same-store Contributions debt. bad driven and and has less to were by far, lease-ups than on lower expected and construction absorption. performance So due weaker NOI elevated new been

said, far have And of into so curtailed allocation in address the absolute as arise. new expect us opportunities downturns, is not the have plenty any or challenges well we this developments few costs We an for-sale And Kevin positioned communities to sheet flexibility over then financial year. they that new market, next do Despite started the and construction incorporate to in our just relative plans. -- dramatically capital to since lastly, and very prior as the quarters. both balance fall we'll strength which gives

questions. And we'll so Matt, for the that, call open with


[Operator Instructions].

will question Joseph first Citi. with come Nick Our from

Nicholas Joseph

the behind rationale pausing starts. color the and Appreciate new

long you curious are what delay you then do actually think making until start you And that be looking to Just do the to proceed? again. at actually before signals projects will how decision

Matthew Birenbaum

have is Hey, -- Yes. could have to that here. are hard Matt. of costs fairly start. that it conviction mean -- do high And is degree correct start a Nick. This deals should we we I we

would exceptional bid start we're that's on cost owned wholly for long-term an But the to at the what well. may their looking that's trending, interplay like total third-party -- It's and and, what in looks as deal side starting like. reduction at of thing kind and coverage circumstances you costs watching. reductions the that's like, one long-term kind trend looking of we're basis kind There starts, with for and frankly, potential -- their the what capital, is hard like relative hard our of looking here venture what where subcontractor us. got NOIs that kind between So actually in other is balance-sheet-funded line for know, is, of we're And costs that's be look very NOIs of joint relative which really look what as look opportunity some line main to rents zone. we trend kind at some unusual is in

Timothy Naughton

It's Yes, Nick. hard to know exactly.

very of the last at maybe a uneven bounce be -- comments and sudden. cycle, that recovery, X with look the more of K-shaped it's quicker and sort like, drifted back about more around we've a recession. X the looked it's economic bounce heard different where this you more quarters. what where back. sort lost and depending or maybe This be a people We Part into have in you've -- this drawn-out seen my the going could If more demographic -- maybe even and others might more, were to may was population. others think Nike more of quite from we've likely be downturn others bit hearing upon been certainly more And you're to Swoosh introductory

and need bit bit to faith cycle. start we're to -- that more. So one, And the But correcting. a to on sort just of to we cycle, maybe public Last of this good a we slide, of we're have showed little one just starting hard know deals aspect it's given for we'll basis construction little as XX%, corrections double-digit the next correct we're they order the that of costs more going out kind it's to health economic see probably before the of on look buying sure. see that

Nicholas Joseph

for relative you of or the that any on use the it $XXX acquisitions kind terms do stack maybe million capital? options kind executing about think share or program. repurchase other actually that? other currently in have And you How where to I announced redevelopment, does think of you up of development of that proceeds

Kevin O'Shea

that on of and value, and as we we earnings a behind Kevin. our we're the sales including Though as program, at did Tim This indicated saw is and on alluded I program announce do to earnings -- And incremental clarity other intend measured on we release, to proceed. stock liquidity we probably intend trading repurchase basis do to believe Nick. want $XXX comments. as jump have to, asset million. you Hey, sheet may likely because our is that we'll both here, we do to we point, basis sources. development. And compelling I'll of But Yes. long-term in strength that we a attractive in investment potentially and our really, couple pursue add you're a today. we think this right, we have so. And share a our absolutely debt, genesis initially relative And some a release, investments, probably most those as have balance you the to to a fund with so is, but at until the in that's

Timothy Naughton

a little just to maybe -- bit, I add Kevin, no. -- Yes I agree.

order not a visibility things and asset It's right have corrected. there's seen of disparity debt's than got think it's what what XX% investment, And equity's what prices you've the near we -- best the X asset equity, our supported being certainly had -- by in haven't equity the you -- as costing the the the what of as less is most know. on pretty we're strongly think We've -- lot attractive that probably costing and feel belief we while on now corrected I between we and prices sales. artificially Fed working. asset pricing, probably on XX%

terms the our alternatives in sources. well of capital informs are that what conviction of terms as in So


Hightower with Evercore. Our will question come Rich next from

Richard Hightower

and chart like-term second the help Fran the the you just blended currently, on seeing L.A. rent suburban chart. Page the I'm understand us Boston, what change mentioned, on renewals some of X, urban and some maybe San of and and just new on weaker details and And across you're So there markets

into there. some of understand Just goes help -- the us what the mix

Sean Breslin

walk for mean X% as about bit. noted Yes, it change basis, to through quarter. rent Rich. on down the Sean. blended a little an you Happy I was It's effective we

minus at remarks, through et points. what the what And about are New to York X%. in as markets, look submarkets San the based the portfolio, change seeing spots you other about those Hollywood, basis, was hundred And spots the the urban certainly, remarks, and I across are within anywhere we're in points. Northern down in across physical of in only California. basis basically my other about rent urban suburban softest regions, by in lease as San well. of L.A., L.A., probably some generally, my City if And and the noted markets, And in both seeing around the we're Southern cetera. And the X Francisco occupancy then I on we're seeing in on If economies basis what so and mentioned it entertainment-oriented a we're probably probably Valley, throughout and you think submarkets prepared the throughout Fernando West Burbank, softest are sort weakness particularly occupancy greatest chart, prepared trailing from XX our is you the a is as And submarkets mentioned economic Boston. the it double-click trailing in suburban couple of Hollywood,

still today, a place change in tougher it those in July, it be as if XX the point. right positive we now, where but to bit look than cases, of you context it And in about both rent point of lower And what to range, sort do rent positive about to And of X.X%, X%. at this kind is June. change are basis July rent relates XX lease So is down change better down certainly, in the experienced little a environments. in remain to slightly at renewals than occupancy as both relates QX in and things effective

Richard Hightower

a respect And some Okay. the more average purchases, than shift I then markets, Sean, out more points comments to that landlord I maybe and the the home broadly, Avalon's thinking prepared the urban. And in of also fact in you're insulated assume, is little there. would helpful. with the given highlighted that's suburban outperforming maybe that effect about from the little a price just mean, bullets work-from-home apartment in

help of see to show really we'll sense does mix So in positive, point the portfolio? a in the at you think? that that When suburban highly as what do think numbers start of sort net Avalon up a concentrated there having you

Sean Breslin

Yes, Rich. can mean here. Sean. and the couple it. how it's evolve then some are we've really I provide of a I comments, can of next factors of urban months several a chime in. It's mean of factors function the sort of that mentioned those Tim I few submarkets, over driving

portfolio a Northern it's are Mountain And painful is it's some in in helpful. where nature So my least little start function of California, And more mix. side, people when is the suburban, crisis, sort dictate prepared I in the where, material pick of a will think really though even to the I I'll the come on sort a what headquartered. to suburban is of health in some like There mentioned places, of the Alphabet and one way. economic and View right it's at submarkets specifically, now. very it urban submarkets remarks bit environment some certainly back

though technically extended suburban. it's tends a work-from-home submarket weaker considered to Given policies, their even it be

not sure to to anything have answer there's a But Tim, I'm point want one-size-fits-all thoughts you do general my you time. in add? At that's relates this at least, here as So it that.

Timothy Naughton

in of which, both maybe supply our seeing urban next And markets, just going opposite, urban are a demand mentioned that's of been pandemic. activity trend, by also amount outpace on suburban the and stronger the in to outperforming sort suburbs, get urban coming we the submarkets you're more was been stronger to Difficulty] year, the some there's I've because partly cycle, it's be economic when prior just cycle, of affordability. had supply of 'XX, the before on -- suburban I more -- [Technical beyond occur it's to to a demand likely had probably part side, to where Yes. -- demand -- millennials submarkets. And and where and This demand but starting supply. 'XX, you in fair both suburban the in age, last see the

that that continue trend will the -- more a trend you rental to pandemic, in bit -- expect over little just secular suburbs the years. the but as longer it's we few well. as we that So activity, ought renter and more started already economic see But see drive next before that a demand to


Our Pawlowski John next question will Advisors. Street come Green from with

John Pawlowski

stability hold to August. alluded least current weakness your that for I you Boston, want see signs L.A., in Fran? the of about comment to into occupancy to, Sean, you that back go at San pockets comment of heading Does

Sean Breslin

back. getting distance anecdotally, that of feedback to been student short learning of a come just demand the run, and their And of home. have of enough only hybrid learning, on some the some we to campus as see based the And could had John, these they a lot population apartment week, they In time announcements couple be starting on-campus that it at environments, yes. if are in submarkets made want urban even to they and relates on days both student from some date back a

demand we as the That as in forward the my being up not, But here. environment economic say little So terms whether decisions that that kind we and are year-end, or move dictate down whether sort university function things I and of it will in across of mentioned crisis said, are would between bit. I stabilize crisis health in made now of a obviously, the health a general, prepared holds it's of systems. relatively shift seeing the remarks, and or the

John Pawlowski

effect to guess get down bad think reasonable trajectory worse months? just know that basis the the I this then getting that the remains it residential or with the portfolio keeps moratorium Is XXX to I And don't that eviction on where in markets quarter over the completely elevated. point sense. betting it better? meaningfully debt meaningfully a how understand from -- drag opening road. remarks line Makes something through these in don't the coming like will I L.A., Or kicked or

of the from comments be curious, around just will debt So bad trajectory helpful. here

Sean Breslin

Tim the environment. Yes, well. mean chime their nature of have this been in difficult -- support terms growth. happy comment, it's and have as date the people John. which we in health I'm terms able I can in at to for or Kevin income of the incomes, already point to of to being given macroeconomic federal then in time, morning crisis, mentioned obviously Obviously, I there through to subsidize this sort of came personal think predict,

think year-end, think assuming through it's one there sort variables way, all going in we those it to shift is of significant obviously, to monitoring a to the extent collection whether But you be primary expect So environment it's that as hold a any relatively within could up a those to But in try the tick I of will and/or probably are rates and think we those down. I pick variables result. reason. down or static determine up meaningful



come will Jeff America. Bank question of Spector next Our from with

Jeffrey Spector

how Tim, difficult the I appreciate much to medium the I just comments some you've of to figure And that the big-picture of back the to far, including so discussed to long very want it term. go is out some comments, during Q&A.

bit impacting, whether I medium- how increasing elsewhere, some Avalon's you markets? new is options Southeast, As a again the guess that? includes about that let's say, little talk long-term this I you're you thoughts to can homeownership, strategic thinking, mean more plans, share comments can lower-cost on your

Timothy Naughton

Yes. Sure, Jeff.

in past. I think the this we've spoken to

new. having places sort tech Denver. mean, -- said, or and the whether other and As can of certainly a have already you -- being California. trends Amazon are And -- workforces in pandemic they're aren't of New them these necessarily their markets big is I in lot bases They're about think accelerated. it's or like in many diversifying employers I Austin They're York think in D.C.

be and leveraged want we the innovation really to economy. so And to knowledge

job -- than the employee means just And that rather want And job, those jobs then of of extent chase to employee the be so kind where employers going. to the the to workers jobs rather sort going chasing the jobs, continue we -- markets. we chasing is That -- are is would was of reasons that a got fiscal blue exacerbated being I -- look Denver Southeast the the at in obviously, into some one say of well. the you of Florida. those one states, situation of are things and as the

And -- so be of informs some as for affordability and economy. that thinking driving some is overall want those of markets, think we also these our the of probably in driving what's I innovation sort in populations good think spillover to We happening just the markets. the

some benefits those think other for markets good would San innovation recognize us of secondary as And to over necessarily are So markets Jose spill Boston I it's be those and bad well. of for in. be to Francisco San don't sort of and but that some the to going some --

out -- D.C., the probably reallocate that kind some we our markets not then Seattle And of is York expansion both to some as expansion of a existing in so things. like New -- certainly, markets into some California as and future, to One or new to capital and look markets few in do Boston recycle today. we're and capital also well potentially

Jeffrey Spector

on feel I the work-from-home, the of thoughts process and at right And maybe that portraying? more or will to the forward be are that temporary now, portraying adjustment are Street comments. -- Or do guess, decision I permanency but that you The impact on a that the and -- like your does appreciate all? extent some not is mean but going it just media the work-from-home it's some in I the

Timothy Naughton

would in office are we to get to Yes. this our know. there majority not -- going question Yes, space, I companies. And from more there certain a where that expect that forward. efficient more kind own jobs jobs We of that kind of of office lot. experiences. can company contributors the it's would can but I they working the are sort where have the guys that activity be of from But speak is work-from-home away the close most or individual hard know

probably And about so to a gives more we career focused not over view from And manage from of my on flexibility lot bit where they're people it a to working of probably effect little home in least live as a kind home. marginal They're more people they few next secondly, of want the view. that to that growth. work at if not years going

terms fact less does than workforces really operations diversifying are the So already of in like markets other in that of affect Apples view so and our would be? satellite it world we the Googles their big Probably there. the to with say, I employers where want

whether it's some of they're think. would markets, likely people or satellite a to operation to the So same I from out get home, working


question next with come Morgan Stanley. from Our Hill Rich will

Richard Hill

wanted to remarks. prepared go questions along follow of bigger-picture those I your to and of lines back some

XX homeownership, interest you Specifically, that Do similar on some seen rates? there's homeownership, are the more going cohort. do seen we've about decline shift trends particularly you a Or in the that's with given of we've age near under think term those secular think just there?

Timothy Naughton

others to can and speak a Yes, Rich, may view. I have you,

of the may be it a that the a through the bit gone part they -- millennials, -- just little at looked think composition as of it's have if I pipe. you

XX XX So cohort ago. lot under of than to more X years there's a are there were that XX those that in

We us little But pool, renter does we probably single-family overall epicenter -- probably broader level. some pool it think a landlords a yet is Yes, we're of from and and residents. move may overall the have renter demographics of the lot with I other and impact an impact sort It's at as interest it coming rental nationally, have of to actually and other if all an rates. affects to not that mostly prime you this on at by going on accelerated terms is But seeing down by it starting demographics purchase homeownership really we're our what homes. went being Reasons less it. up markets. does an sort of being has stimulated think a kind in We're be it -- seeing for so enter they're into those So will. of of of homeownership. the

Richard Hill

surprised focused you're focus medium are election up parties has Got the other thinking that big helpful. a wondering side upon you season couple a months as term? on. been regulation the more over something little the if Obviously, on potentially is COVID-XX affordability have a How of power. and been to focus, rent I've in maybe that long plan what bit it. That's housing challenged. there Biden earnings I'm obviously more this and is that on about the of hasn't depending a coming

Timothy Naughton

mean state factors it face the regulatory the of the level, local level. in. at most is really and at we not risks Richard, much I as national

there another would bit think if markets have national that than nominee be at was markets. always little been we'd our But level. more the more concerned other I was Democratic probably a a nominee regulated

new some in housing, are It's been what's part elevate appeal it's rent rents the entries markets to which time. sort supply growth on We the our of blue constraints states. and of created over helped barriers has is of always --

as will of as if have as an kind housing the you -- you terms and avoid think Where of owner apartments. an pretty that's parts is it markets it becomes control rent the touch industry for control usually in starts California, leak vacancy we it rent when for issue become we control, when have starting York and rent be and price of control. of Certainly, type that occurs. That's into to which is to they the to key have the -- on the one, manageable us and awful the that issue in pricing New controls on you to that I absolutely you're you available, lose have the of is and vacant control.

politically going the any it's we're to for housing a poor one, as from continue but something housing expedient, long absolutely that's going as And landlords fight level. any -- it's So it's but it's to crisis to an us It's a it's standpoint, industry market it's -- not because for good good sure, we're not local term. watch, for not to to continue policy way at policy. solve

Richard Hill

move one is land option a development under with and job forward Understood. development about the past, done thinking it. I And how may. really if to and more your have really In your don't you then you've good question,

markets Florida, I on you're had maybe mentioned under maybe with? some survey any as forward that or forward other have option remarks. that think, to are earlier Are you So focus barrier going development now? I'm any states versus there not in wondering, land might your markets want in right you And and you of high to where the there blue landscape move that you post-COVID-XX, the the you prefer

Matthew Birenbaum

Hey, Yes. Matt. Richard. It's

from own our we our to those bought of rights relates that X owned it only third deals, land current we you're XX pipeline, As development right, a party.

and going and where is costs a land deal. work. give deals a work and we of wait to for good land probably deal we that it's are we are on down. other lot some are And may by will There of close be optionality. some in say to come type there deals really a the may without not carry while deals the There there hard that may restructuring. price, So it for And

little a of in opportunities. really factor of it's It's really we're It the the above. of the finding best terms bottom-up So all doesn't geographic mix. bit where into

of our Denver development have so that through including rights one of markets, in we couple expansion Florida, And their in working and a X system. in way are the some

land yet hit terms seeing, think far. rights We taking to particular we've trend markets impact so where seen one market as obviously, development than our more rents economics the biggest well. in in in any have or don't than kind development so market another, you're the legacy an of of other I


Wes from come with Capital will question Golladay Markets. RBC Next

Wesley Golladay

Slide up could sense I yields. active for around on positioned the to pipeline potential question development cite the if frame volatility Another headwinds wondering that X. you relative of how X.X% development your is you. the then you trying a development projected get is to basically was I'm And

Matthew Birenbaum

the that future the Hey, starts? way about Is rights or I'm on development the development under sorry.

Wesley Golladay

-- yes. No

a guys if that more qualify, mean know of of don't you I I believe as the suburban your you pipeline. infill they in a X. on active headwind view, the but more footprint, Sorry, technically Page as pivoted cite to a few I years ago

Matthew Birenbaum

X rents I mark XX, X.X by only slightly right, of there's leasing in it ahead you that where about the development look yet. under actually, rents those of on the billion X.X%. at And $XX. are forma the -- market we've X, Those to current mean those way, actually done at you're is are pro in Yes. the we you at enough still can -- kind when look terms yield deals of of

XX or So little the a been X now behind the mark-to-market. bit yields are Generally less because on some a couple there's so of deals. are more cost of overruns speaking,

have rent them other less you A so far. could that downward them. seen in suburban a XX, predominantly is It The are of lot handicap markets pressure portfolio.

I fact, think construction, in than deal now. In we that, downtown only looking urban at Baltimore And would the other is it, one in which Hollywood, the yes... would be under right consider deal that

Wesley Golladay

then maybe a office And looking room demand any another work-from-home Are rooms larger noticing you an people the view? for with trend? or for with what units, about for maybe your

Sean Breslin

of direct-entry we've is townhome, Yes. often been across sort at doing appears overall, data for would and a Sean. better of I a early be little product product, as is the digging suburban us least that though it Wes, on mixed. a to that which in terms But bit is the based returns, a into that, bit appears And mean current little in the say this trend is type environment. portfolio. positive I

Matthew Birenbaum

also, the has started I down is that you that trending or suburban more least at units, the it. the size an average bedrooms -- of the demographics add least direction. we're look hardly product loft, we we've were, last which just move we this were to heading than year A probably industry, has X, say, X-bedroom all, cycle, really the more assets. to for shift X of at kind now they almost for been And demand size before last where definitely unit in the the even would other Matt, of What starting build of as build when our XX%. pandemic, at with building And to But project has down that seen, every that, use greater X our we didn't just about development, came been unit to we see, X-bedroom lot in has den to and at ago. years our development were starts, average X-bedroom more to


from Nick with Scotiabank. come next Yulico Our will question

Sumit Sharma

or bad provision bad how much reserve? the so advance. And And tune Sharma a expense. part much is of be write-offs just rent, want how the I uncollectible how I and Maybe your getting basis question have of bad reserves, Some is of just in talked much Nick. you've peers this debt clear. or Sumit debts. reserves around is X.X% cash for This debt in I of of your went much earlier, apologize A about how of sense stated into But was about guess the points XXX so. to of deferred,

Kevin O'Shea

I'm you to of not that did not can debt, ask give your what then maybe to questions. the you of I'm respect O'Shea. Kevin an to bad I'm to with is some this Sumit, -- overview responding hearing but we just having difficulty questions you, and extent

delinquent to So delinquent after reserve other is X first for months our policy X all, of and rent residential base items months.

about residential our basis we revenue. QX For of we did in revenue, And XX points take so typically residential portfolio. of a same-store reserve in

million. of a of In portfolio for revenue in quarter. million, in further XXX addition, same-store residents or about we basis who for points took during or resulted didn't reserve That residential XXX including basis the total QX, the reserve points pay about $XX.X $XX.X a anything

-- we're XX% from at XX%, to the we of trends, collections which So unpaid collection our XX.X% our and rents and collection certainly about against effort continue about collection, end. April improving encouraged recent by efforts, course, month May show

Is that residential Is in that's responsive? the revenue. that helpful? story So

Sumit Sharma

great. Yes. No, bad And that's apologies quality. sound for the

terms kind bedrooms. concessions, biggest types of X following the area. provided urban of X are wondering, a being on understand just kind different a information seeing -- are in lot concession up Trying what activity, where actually question, I'm of bedrooms, versus -- suburban. to the of you unit Another

biggest developments about largest how just you changing in drop to the amount talking was someone and where unit ago, moments wondering, the few you're it's where seeing I'm with concession have mix. a concession. standpoint, give a or think rent from of the I

Sean Breslin

thoughts give some I'll Yes, general this you that. on is Sean.

environments you So first, imagine, in suburban might concessions as are generally in we greater prepared urban remarks, compared environments. from to described as what our

units entertainment affordable Initially, let's the weighed to demand think that. issue in sort bit, X-bedrooms the and little shutdown tend and we the urban compared suburban and thought with more those tend very the there in submarkets which points on some home It's in with studios with studios we've there I points, wouldn't great we fewer have shape better demographic are sort the that affordability that as high-quality larger ones demand say X- We've is the X I a submarkets the seen in looking in studios a environment, price compared as really L.A., space. X-bedrooms. not and larger within common much. to of studios to environments, X-bedrooms larger the given from the units. and to better unit be theme on type. So And price solid as affordable and Within out X it be relates steadier But concessions units start and got -- of as bedrooms And of more quite to of performance to X-bedroom schools, to and and nature the submarket-driven revert and see the if such. Boston of of work people for extra some smaller towns then you are environment. suburban the might and

geography. the So it's much specific as relates as the suburban much not suburban it unit as a to theme as type common


Associates. next question & come with will Zelman Our Kalmus Alex from

Alex Kalmus

profession bad into is on? this mostly on centered delinquencies, what an analysis you debt run or Looking guys have to base see age, and income resident your

Sean Breslin

Sean. this is Alex, Yes.

things folks you as to whether And impacted that foodservice, We that, materially. occupations terms I the typical tends make-up East sort of have age, to some that gender, sort. earlier have the content Tim remarks. on sectors our service-based opening in in have been think that like self-employed, freelance most of been impacted some that more of his would of tell to communities, be run of it is it's well, producers, it's alluded of some what sort, of some that. data demographic is than things And It industry-specific workers, then hotels, I that

it So is really more occupation-driven else. anything than

Alex Kalmus

Park just quarter? And was it. the touch unit selling the the on was to Loggia price average noticed sales, how I upon higher. Got that this little a And

the higher the of February to to units to some sale enhance assuming offer needed you I'm sold. So got that there Was discount process? levels any

Matthew Birenbaum

Yes. Hi, Alex. This is Matt.

that a a So few been the entirely, did Not under closes, closings based price quarter quarter that units which deals on. more really given average earlier of one deals time that. on settle completely we were scheduled saw happen in that's the to including, contract just have the than settlements almost in were so is and there were so what of quick period that -- second think, second any I in settled we units function penthouse the the

of don't from conclusions, a draw So you can't I lot that. think,

We now. have closed units XX right

to adds it another than XXX XX together, have that up little bit contract. more under a When million. you We add

the negotiation, trend -- higher probably that is and crisis even more And price points. before the have certainly hit. was there We there's a negotiation at

enough velocity were the we been traffic compelling significant I'm validated would sure not the pricing to drop justify a value. pretty So it's sales if and we hasn't to a market strong in down shut it. to the prices, were before, have There post-COVID. in And that volume. was very really that early before still we taken different even transaction really see everything compelling we believe, by value, pace March. pretty offering And in change we had we not a a approach just and

negotiation there is say that points, but the And there expected So little more more is I a price we that. bit would higher supply at coming.

expectations, our our yet. nothing's changed to with relative So pricing really


[Operator Instructions].

Sandler. come will question next Our with Goldfarb Alexander Piper from

Alexander Goldfarb

questions. two So

who still there? many paying but is apartments first in they've living actually idea but do you are guys an The how aren't of your one So they're residents moved have are rent rent. away, paying

Sean Breslin

Sean. tough come Yes. with. this That's to number is up Alex, a

to the that be me?" real no, for is do mechanism That they and I'm "Hey, Unless for gone voluntarily sense we you of give accuracy tracking us necessarily you something a come of to is of for So that, going there. say, answer any Can period would any not sense time. blunt don't. x --

Alexander Goldfarb


you, going plan what So picked not up back as whenever if managers there's people being coming guess, I to a mail track their have and on ends? are to term not sort they're those seeing, understand exit way apartment or of your or maybe

Sean Breslin

that picked XXX really is I about unless buildings they a a that of could hold up. we're X,XXX specific give mean people count to necessarily. there think mean something for you hard sense that them, package Not that a people delivery. sample you say have But wouldn't or get mail it's mail and I in on representative aware to have units estimate. I a you that related as accurate would an are

Alexander Goldfarb

program, on Okay. guys on you And starts year. meaningful development were planning the doing then, Kevin, this

because have we the starts the statement would the you they the before go, point costs off could as At appear income to burn -- accrete capitalized to do the haven't. at start current -- where see capitalized? far and what would be deliveries, you deliver expenses to that income expenses You point don't to start to longer delays capital statement? -- what the Like -- on the those meaning start replace no to but how

Timothy Naughton

in Hey, in, not that's something construction capitalized. I process, through under Alex. or don't whether they have if statement. They one certainly, Kevin working This They we people going offer. that's go construction income get that may get or are have jump job, expensed. Maybe to to one development on Tim. mean a it's planning I'll the and the is working actively

I anything under think -- have haven't we construction under $X process. and to the billion year-to-date, still over billion you still we while need started $X

managing still we're So $X a billion pipeline.

are it. Now trying to we rightsize

to -- X really at as departures look currently trending And last as last retirements it's some we've seen average it of about we're you folks we XX% start If XX for at. where the recent sort overhead. of lower sort and we've senior of to down and some try been next this of the the to X-quarter rightsize total it's quarter, over had the months cycle capitalized than

probably half is thing of to know group's remember, The that about don't incentive-based. you but other well, comp this, roughly

a they're next if flex redevelopment. part our just to overhead if if they're the of is not So or $X.X $XX need $X so But automatic production, sort About quarter able development. construction. of as well. of is much be $X.X positioned about not About about factors of overhead cycle objective over And adjusted is million. in a doing the you there's -- as rightsized arise really as and be we early really the -- million of the if it's things little that capitalized up opportunities to million to this is to million for to doing kind piece well be is

geared or $XX about that, $XX a is get million about range, million annualize you in minus. development, $XXX in million what sort -- the million level for. about we're we That plus talk think you of of still If that's kind construction. that to And supports I would maybe $XXX

be to or ramp need years, So sort volume. adjusted. over X to that next next sense But be kind Obviously, doing couple head going the we extent position to decide group. the we doesn't a up of we're to the it counts got probably that which in to be about where will suspect, managing over in about probably billion X years, they're of of We we of kind $X And recession of into we've range. sure billion still of and billion $X.X leadership level, the the make a worth only go peak right the its to to want $X personnel as pipeline, is in XX% place. total off this make


Janney. from Our will with next come question Rob Stevenson

Robert Stevenson

this you markets year? of few impact traffic- positive July year What's normal in early have college how core year? you May, graduates driver. what very time a year so college of the seen leasing-wise like renting It in a apartments and influx COVID a core be the period this grads your big And in and have seems markets time see for new far given versus normal in might the thus from that first terms that June, in actually the typically hit rented your

Sean Breslin

brings a capture. A submarkets, a have question. are in would Good since across to of the the something, we really to in we our that pretty That's be on their that's XX we have around to not property say. leases model, necessarily it's have entire assets. that. don't a we've hard in in the of They're student represents occupancy case, specific the pretty Rob, arms each there our tied mean in of select Yes, that, a the that hybrid that like week. to trying of terms submarkets. up question of in there But up to relates But market one made X markets, here lot is plans particular they did honest, what ABU little to Sean. probably thoughts couple district when urban in data I quite particularly population of environments, certain percentage yet sort been of announced I broader those But certain Not learning market. the really that get the your student-oriented

they're submarket highly trying segment, piece understand to question still segment. the universities probably market student those as is. one corporate the range. particularly is trying the other trying terms rental to short-term the we're the on-campus dependent sort X% population think we're that are options broader And there stuff short-term student that, the and From population, in of shift corporate X% which to de-densify We sort the extent one is in some I then upon their that answer, housing But that of communities. is demand collectively to of like So the may to is think from it. of the is and are what

range peak June, you those described, see going of get might certainly, buildings a to student the moving sort at we're And basically towards before as time little see It's answer pre-leased of you're moment. it's the to you through probably that pre-leasing rates. XX%-plus some this target. that for the bit right as the moving they season, through a So But show April be on to in the as of is, you in exact up hard like want August. end July you and housing in of demand

in buildings, of around but urban some the like short places and track of that, model. are So that uncertainty are where there they for Boston, places Berkeley, we're around the the on at falling ultimate because learning

Robert Stevenson

these for Well, the normally just a on get mean, say, let's I that XX-, tech York, I Boston, have that stuff, really focused student graduated, a mean, New you that former I Francisco, first consulting beyond the in time, time, they're to in a in of bringing San with, leasing et or firm where first job was offer the of bank, I an mean an I whatever, company, cetera, XX-year-olds off the that typically is for big investment renting cities? how that. workforce you entering gateway significant mean, but they're letter and students, now of the that -- of people influx students sort

Sean Breslin

ongoing time. talking are point to overall What market. people to universities, [Technical a into -- other than tough it's from are to stuff our to answer That's program, quantify Difficulty] you're kind of kind a training that's other rental people corporate that that's coming really at in about guess, tougher little some like of a demand program, graduating a a one the And in the related X% is moving probably just markets. X% Yes. the for market this program as specific or of I

Timothy Naughton

about Kids X get out can't are people with see own they house which me. in guys, of college, X downturn. of part you're consolidation remarks No, their or and the a stay when you jobs earlier that of Yes. a -- That part it, I my home in household instead they cited describing go is that get that apartment. of they typical is to into contraction Rob, and at getting there

in occupancies points. basis past -- seen recessions, hundred see couple a you'll of So by fall you've

be still supply. of bit may seeing new little You a

of think, contraction unusual that country million is, of units big And order X So the see I a downturn. on. it's household exactly demand normal million, a the to not on portion across of focusing a housing in what you're

Robert Stevenson

single-family in versus in that other slack lastly where then that today what's is are more what's sectors? for of been you both seeing beginning greatest of elsewhere amount there And the you're what -- now soft? I of the any Okay. on happening given the of at down me, construction is buckets are or has of off year the construction cost either pressures costs, new terms or up guys today? falling and happening delta? meaningful the these in hard And seeing mean or And how

Matthew Birenbaum

-- it, Yes. starting we it Hey, This are see is It's early. Rob. is to but Matt.

So to started work. is first CapEx the some it see where really we in of smaller-contract

So are if short types think in it, about you those the duration. are of jobs that

have or project that a X-month one replace if And subcontractor X-month a for job. facade be to a that's you're if up, don't or X- us finish work, necessarily might it. repair So some they they or concrete stuff restoration doing

isn't savings on just meaningful. is seeing change. see significant So seen than we've starting years, X growing much from, And given we last where coming that But some the there. it are where been a X that faster we've in for inflation been work, to markets, mid-single-digit we've buyout or all construction which it costs

early new all construction, in markets because too the is On first. under to and going still everything finished it's there's almost have way, probably under get It's lot way. to a

see So is to regionally, trades, And concrete. going vary going earthwork, where a early to well. you're demolition, it then it's going first maybe again, to bit pipework, as little be in

And that in maybe we're little South see Florida is also to big no part bit wood we've there's what others It's a That's frame because there's concrete And construction the happening. codes. work there of lot ship work. restoration not a for is one hospitality is of starting a heard drives So say hurricane what thing. all -- cruise canceled. been because of

most yet. the capacity. has markets of really So way into our worked excess there sub It base hasn't more its

Some Lumber up. bit up now. right is is a commodities Lumber down. quite are

what's that's the in in renovation market going So single-family probably home and to market. just -- on and response

some to the are way take a a it's work indicator. there view. takes through while to while. but it there, lagging And going generally pricing it So system a in cross-currents our for Construction its is


final come Anderson And with question from our Rich SMBC. will

Richard Anderson

that and great of from you you tight I'm like a memory. somebody of took you sort of serves, rope during without as of mentioned, If here experience in but you, crisis learned walk to the suddenness relates that? allowing to disruption the having just happened, Tim, has lesson of particularly 'XX, it memory how the for what kind any sort else, financial 'XX wrong the write-off your decisions though, wondering in you is as today. sort mentioned remarks, if particularly So the And terms made but lot a of or related development wondering postponement. look you I'm going know difference sizable a maybe of time in side. frame, to sheet curious, you in XX I today, how fast-forward about years prepared have did how later balance then that, approach the about what I'm you business, at happened on development on in there pipeline. apologize, your is I just the but itself I'm manifested to that I'm just anything development you

Timothy Naughton

And portion had development rights than of we when we've Rich, terms we land. -- Hey, to impairments of million that in where say Tim. land. profits been would $XX in size was wrote deals it's the have and pipeline, in And a off I we had Yes. good value order larger of like of say on just about had the or would say that relative created. largely you the been I total,

taking we into land. took impairment This just -- were So mean think an I $XX billions. -- -- million. the We -- on impairments the of on of are order weren't I were I time homebuilders a took -- our we

optionality. And so disciplined maintaining very about been really we've

out was may some not to Matt to pipeline the we capital future some as of control. but really -- are restructure which write-offs, the gap. And unwilling sort some the make. extent cheap the suspect, of that is size talking cost, restructuring And have relative the the may close could I earlier, of pursuit it's deals we of sellers the could that we pretty to of have And

is last have any just this don't biggest say one. compared would I significance So the to just issue -- cycle we the land of inventory

Kevin O'Shea

add the respect took a to under be we've with in funded development that that, many thing Rich, the I downturn lot from in key only match long-term obviously, would times discussed is terms of to just, we is whole was Kevin, this one place. more recent to capital the years, way And lesson having in

here applied way billion in very see with we lesson to right funded. And $X.X way with a the now, under respect that visible so you already have being match XX%

leaves that time foot lot opportunities a to that pop obviously pursue forward may us up. this So more around

Richard Anderson

Great. lot And core. talk then in suburbs urban this of about call secondly, a beating the

could long you this in think, an where back as sort do I breakout option that sort your it pardon suburbs. wrong suburban and close X/X but benefits still people don't you But in, urban, maybe one, you you're help way enough term You that, portfolio? think all expensive and that in come this if ultimately they those me guys are, the back here of -- X/X situation out of settles go think suburban, I'm you're I on perhaps, XX

Timothy Naughton

least the activity get I And of suburbs. development created think talking suburban in I a started Yes. was And see where you to Again, value, a I infill. at We already suburban. pipeline, millennials in you that is look was probably kind of the most little were think Rich, portfolio we more older, about earlier, of as already kind history, the if tilt there economic sort our trend. bit

the attractive offers than in urban-light of is of urban than affordable think delivered areas. -- kind infill/suburban generally one kind the kind we kind I has of our dense -- urban mixed-use environment, areas that's -- opportunities more of is of this more also probably provides what lifestyle, less an

already So pushes -- being here think direction. in few we are -- And were already bit kind the so just what's a I that place in happened this just the just last harder. maybe us moving by of demand that probably factors months. are But were little magnified in


remarks. the would I Tim to like turn And over to back now closing that, with for call Naughton

Timothy Naughton

Matt. of to you, Well, Thank all calls you you of know need number great. on have be I Okay. today. a

and forward soon. with I want to talking just to your us, enjoy the thank rest to time. I So being you you look of for


call your Once again, that our does for conclude you today. Thank for participation.

You may disconnect. now