AVB Avalonbay Communities

Jason Reilley Vice President, Investor Relations
Timothy Naughton Chairman and Chief Executive Officer
Sean Breslin Chief Operating Officer
Matt Birenbaum Chief Investment Officer
Kevin O'Shea Chief Financial Officer
Ben Schall President
Richard Hill Morgan Stanley
Rich Hightower Evercore
Pawlowski Green Street
John Kim BMO Capital Markets
Austin Wurschmidt KeyBanc
Alua Askarbek Bank of America
Nick Yulico Scotiabank
Richard Anderson SMBC
Anthony Paolone JP Morgan
Alexander Goldfarb Piper Sandle
Brent Dilts UBS
Rob Stevenson Janney
Haendel St. Juste Mizuho
Dennis McGill Zelman & Associates
Call transcript
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We are about to begin. Good morning ladies and gentlemen and welcome to AvalonBay Communities' Fourth 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. for call host Mr. Your Instructions] today's is conference [Operator of Jason President Relations. Reilley, Vice Investor Mr. begin your may you Reilley, conference.

Jason Reilley

Eli Communities' earnings fourth you quarter Thank and XXXX conference welcome call. to AvalonBay

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

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

Timothy Naughton

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

in portfolio company [sales] company from the during shopping to and Realty Growth SVP into COO CEO have Ben stores on second President in estate that business. and was Seritage either experience to Rouse of minute announcement owner to dining, many activating the where a a Prior destinations. Ben's developing, served Seritage met in of would we transformation from shopping, was with Properties brings previous introduce since job. take to background entertainment he oversaw deep addition the Trust. of many Ben turning like markets remarks week who of to in led a inception as a prepared Vornado December. Properties and Before the you of I malls operating, our these and recently job before early real of only Ben do is Ben which regional the his mix the Most mix its or broad he This of

on So he limited couple for will a the a today, I minutes share likely given to a thought call role I'd but the comments. of Ben? few floor

Ben Schall

special integrity, that between what embedded a a and ago for me witnessing a community, team look country turning only about ownership of. purpose me a terms on associates days the of here healthy, very the scale with and over I such to part as very be across also scale and day it meaningful get I not and in an culture with want walk powerful heartfelt be home so fully Bay with family into caring with and is a help way place passionate those Avalon I'm Avalon with creating to also the Thanks on better the housing and the and real in collectively It's shape successfully of each point a and this is a more and Jason you is organization bring quite wider and also many opportunity wonderful company me coordinating the how My Tim. give remain two community Avalon family. and was I the Bay a grow full that of I'm do I'm providing led forefront over to need to listening community, Avalon Bay quality and that and Tim. to family with the able in My months. official immersed are with those of for our living comes to investment that for learning, Bay a first and and Thank Avalon ground. the that and ways to thanks differentiator team coming focused a we fulfill be of and better in Avalon be to how of real terrific front, building part honored to by swing. the of to believe Bay much And now and and for on the an team purpose the early the the at Monday, will focus as be I price continuous in organization. join organizations. Avalon to leader Kevin, to build shape, that connecting on very creating not Avalon my transition the moved includes it's and you core the one am in had my resident, tour my Avalon appropriate excited nearby. every is to Virginia and personal Not weeks connect future to so the teams many over live it forward before truly to rare engaging is I shareholders as January you live XX a of here XX offerings on to early front environments my group senior creating than better people back opportunity stay look differentiator and by I private an and Tim, has enterprise the a and On the listening, Much values to of through been improvement quality values across on started core my organization. relationships of Bay team mentality and places and day and do first our organization much the strong time breathing communities. experience be a Tim to be have companies to overlap there organization. safe, And that and mind, and communities, this my why Bay's personal

Timothy Naughton

Great. again. Thanks and Ben welcome you great and to have

on summary today Our focus results of plans will providing and QX for on it prepared our a how impacts comments some and this perspective year. XXXX,

mandates, on was the The the on normal what end and comments Before the challenging started I was tough effects fourth quarter to last and centers city the downturn market. getting growing to urban apartment already sector nearly to were the from an of area a introductory year a the maybe XXXXs. unprecedented of has a home business. profound year. and by unrest apartment experienced, civil the perhaps over few Bay offer slides the tech just strength rack The the magnified of quarter company The our in anything very we've on submarkets the for been years in work contraction economic for demand and sale the except

or last business mandates, beginning and all the challenge months some the due stabilization impacts virus yet in remains with we few to the the for combination signs, may unique federal rents see transmission the most that regulatory markets the passed our continuation occupancy beyond risk eviction rollout off be and of improvement by of distribution level weeks lastly, factors, Over from vaccine, have the potential effective days home our in expansion so early followed to work including coming in of to any markets begun next the and moratorium XX and steady visibility size, a of the signs stimulus the of the of the experience, the efficacy of ongoing in of additional days. and of

the guidance. provide result operating and earnings year we As and guidance full decided a for to metrics quarterly

and annual as do a up however move year through share overhead. our that formation, we will reliably items like guidance continue number if we we such providing will environment development guidance to starts are on information with you We can the changes the other believe And so. expand we income, we and capital and of leased update

the the now let's on X. starting turn So slide slides

on end a down growth a down sequentially X.X% X.X% from over and the our full challenging QX. was Core QX quarter was for year. mentioned year. almost just store basis X% As by tough the year-over-year year-over-year Same I was XX% revenue in to FFO and

same-store projected initial revenue a We QX completed of XXX and the million yield of declined full-year X.X%. XXX For almost the at in development full million yield at for X.X%. the completed X% almost of a we year

region rents, last California rents developments digits While due to have the in completed remaining two results the XXX basis yields over wait declined on mostly rates. Northern this prevailing points lower Of year year. XXXX that basis cap particularly above as the double by are down by almost points

have were Northeast first completed QX for communities by communities Excluding average QX less been capital communities those started suburban We X.X%. through of yield million the community which we mostly in XXXX. three the economic the dispositions. stabilize in two downturn. in raised These $XXX is started In impacted wholly-owned markets

rate For average favorably to the an unlevered compares an average two XX-year-hold X.X% years. over million three cap XX.X% a Which of year at of weighted sold over in we versus IRR $XXX period. last

$X.X almost to of over at stock year, lastly the this we price average year billion refinance $XXX just of we or of share repurchase addition, In mostly of million or maturing debt purchased over debt billion purchased just maturing raised $XXX. and for near an

will in and provide on a same-store about year-over-year quarter and more X Turning the bad a effective basis. this the lower vacancies to about of X, being exponents half slide declined, of revenue saw On now we see basis we color debt. by sequential little the driven decline experienced by rents revenue we thought half decrease past the we year-over-year on slide on you same-store

same-store out the quarters to of to which year concessions, been lease term. and the pressure quarters last the of mentioned to has are the also the last over future role [lower] rates elevated we of will get quarter by As as on and leasing of portfolio this couple driven decline last amortized lease revenue be couple

revenue. lower it the QX portfolio in X over lease in driven I touch will from more X.X% concessions than QX QX slide occupancy from offset pickup detail. down sequential higher amortized concessions in Sean? impact as a that by QX cumulative to to with more turn lease QX. which continue And amortized rates by to to Sean same-store sequentially of revenue which were in performance Sequential was were same-store comments. to his significant down discuss grow and and in Turning X% Sean on Lower mostly concessions will rates

Sean Breslin

Thanks right. Tim. All

up effective has the past four driver suburban were from as roughly a XXXX, months job where urban and pandemic. in slide over broken the where we X, work out the in submarkets. year occupancy been of absolute January, of impact about and located rental most centered and rent the from which and primary reflects policies past suburban the summer adopted restarted occupancy to We sequentially pandemic performance transit thirds and weakness of December the submarkets occupancy between up declined but The some rate of about recovered experienced have Moving transit effective use physical our X% X% extended developments two XXXX. have spring mass on you makes over Chart assets during hubs the the of suburban of the home of during our could both below and in of we portfolio rates with the see employers has achieved portfolio. materially X deterioration our and oriented

Cupertino in Tysons and Northern Some in Northern examples Virginia, California in Mount and row include corner View assembly State. Redmond Boston, Washington in

from more reflected from lease by summer in elevated and which portfolio basis announcing urban but overall demand breaks, low the employers dipped the term. recovered policies was is universities models turnover points. by the in a since point adoption reduction of Q XX% months, home XXX our distance for has prompted an in major and spring to work late full Third roughly separate of extending learning urban Occupancy in September than

universities basis open XXX to people in submarkets, work level experience about a to want urban below until what occupancy normal through still the in on-campus are points likely learning. more returned rate but We major we consider

a also can three picked On substantially it urban but down quarters about flattened effective past still rates that You late year-over-year portfolio rates our for the year about January. out rental XX%. see basis, from up X% are in December rental in and fell to

will York, low you in continues the modest X see rent Pacific Occupancy point the for the trend rent physical the and hover Metro, year. months. uptick too effective Southern early for recovered our Northern Also except and past regions. all the year-over-year three it to effective Mid-Atlantic absolute we slide bottom California months negative to California occupancy Northwest change every pandemic the the as leveled to January have regions anniversary for pass rents has call in rents sequentially to region and region last Rent bottling. sequential the the highlight in next by off experience but Jersey, few a experienced occupancy increased we from of the Moving XX%. in of New around It's which the over will and one-year we past rents, the key both months of trends of indicators through continue has New as in couple in can in

for Now Kevin? and development outlook, I sheet. will Kevin balance turn it to

Kevin O'Shea

Sean. Thanks

Turning financial outlook X we slide to for our highlight XXXX.

and year. our providing on this full for uncertain regulatory for XXXX. investors provide are traditional the orders earnings Nevertheless, quarter the year on and select development, our outlook for perspective the Consequently, our their guidance evictions first full has other visibility in of and across driving reduced for Although related outlook have to including operating moratorium activity performance performance assist we only we a capital enhanced to prefer items and our later pandemic expected quarter disclosure resolution XXXX, providing the footprint the are year the own for the we our in first we outlook year.

Specifically revenue our decrease XXXX, communities year-over-year which X.X% decrease same-store a a of we XXXX. points performance of from in identified actual basis January, December sequential XX reflected residential and for

first persistent same-store impact we ranges project provide of the performance about reflecting In of the granted expenses year-over-year operating and our residential the of for newly lease for operating quarter uncollectible revenue residential a also net XX% level amortized income versus same-store residential decrease quarter and occupancy lower communities. lower a in in projected to the year XXXX lease We of X.X% first period rates, revenue. concessions, ago and revenue,

of first residential and that that XXXX. to year factors year-over-year close same-store X% operating in present incurred comparison of expenses for a influence the increase quarter remain not expenses COVID the half QX, related an the the expect the elevated due in during primarily range expenses low We of operating during during first first including several today were

make current the maintenance in will pandemic and spend period. XXXX Second, of that in the for substantially and turnover the marketing comparison period costs the reduce other third beginning year challenging year in during elevated in current

increasing decrease residential we projection the ‘XX and $X.XX income $X.XX for for $X.XX per partially share. in for and that a by dispositions offset in strategic residential of overhead $X.XX and the $X.XX the straight-line reduced other sequential by decline lease an and completed which net share per quarter we the FFO range At from XXXX. quarter the midpoint, are sequential decline commercial same-store XX%. core quarter first fourth FFO $X.XX which of XX% sequential decline result, was project decline As of is a a the the in latter NOI core and receivables. composed related of first the quarter per finally fourth the classifications $X.XX per by initiatives quarter operating increased will fourth same-store up sequential increase presents sequential rent primarily to This related quarter of $X.XX turn the project between driven NOI, And a is between development NOI, write-off the first from our a to share in community sequential in of decline in $X.XX share

project full new starting in development As about other $XXX guidance for the XXXX. items projects in year and we million

up $XX of complete and undergoing to development expect XXXX. million be expect for in development we million We communities and projects this to $X.X year between NOI new $XX billion lease

sourcing from with Loggia activity Park markets compares of amortization dollars capital asset from This million development, million For capital for sales, about external activity. $XXX sales maturities in XXXX. full $XXX capital uses and and condominium capital redevelopment anticipate expected we year debt in and

to XXXX we XX slide activity late do investment we The in started an in to starts year from $XXX represents $XXX increase the development pandemic. new increase million when comparable our million development in just cycle new plan Turning last we response to noted activity that our and starts activity expect for in in I curtailed the XXXX. as roughly to is last

years four as our much where starts suburban have about past XX% in Sean more the favorable. of markets development been mentioned fundamentals Over located have been

our are in XXXX development suburban our markets. starts For concentrated also

starts residential highly growth ups in few next favorable In in addition, districts. delivering in we'll will we this contribute be anticipate city in development year's for be hard-hit NAV two located environment new and neighborhoods more years that the XXXX. lease business and central are to urban and not earnings should These a market new into the high-density starts

XX, is funded debt slide and almost underway development match of long-term Turning equity XX% to with capital. current already

As a the earnings in these stabilized. helps locked will on of which that have NAV growth in these are provide and cost when and result capital projects ensure they developments we to investment turn completed

As with tremendous shown enjoy a and in to continue the maturities sheet. and next maximum balance well-positioned modest near-term two slides debt liquidity, financial we strength flexibility

end slide at compares resulting $X.X in $XXX credit cash from was in under remaining on As liquidity XX shown to next facility quarter $X relative and billion roughly underway in billion on commitments. expenditures our development years million liquidity hand. to approximately remaining just development over This several the excess on our

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

XXXX. For we years over amortization million in debt two $XXX $XX debt next maturities only million have the which than less of and in maturity matures

approximately exceeds over end two and by both result our remaining maturities next a our $X billion years our development As spend the liquidity million. quarter $XXX of debt

X line in NOI with was while near As of of credit unencumbered to reflecting net our times to large our or end target debt pool at high all-time that metrics at we could our of quarter XX% times unencumbered assets necessary pandemic key sheet of an end if range X strong turn And was X.X times us they for our most flexibility EBITDA this additional recovery balance perhaps it as to in terrific capital. the importantly for ahead. financial I'll our we to secured provides investment as tap beyond and the opportunities emerge debt Tim. that pursue finally of With look with back core

Timothy Naughton

Kevin. Thanks

to longer-term shows in revenue I A This mentioning a or for this our the index since reflects business. provide an based rental same-store and perspective XX might worth couple I XXXX since on years merger. over slide things some the first slide and plus Bay business. XX, Turning thought healthy is and long-term see you the positive trend of minus or Avalon can downturn here,

Over demand same-store the the last than three X%. at years during except re-accelerate as the phase consistent households then to roughly tandem performer contract grow cycle. now start [indiscernible] been has has doing that matching recessions of during revenue of the during of one formation years household contracts. annual has a a temporarily over generally cycle many with as growth number compounded with downturn net faster completions been expansionary have during next cycles grown phase pace cycles in the over generally the a roughly a the cycle of and Rents recovery most they're two Housing for little the

alike. it to can operating downturns downturns recoveries look exactly No the two project During performances. and be difficult

apartment for early downturn Just the XXXXs to demonstrate that sector. was reasonably the the in deep

from was was labor for the the apartment And early or In prior strength The our economy business downturn for recover directly predict steepest rental after we X downturn signs the correction as brought has fully and for comparatively by the [indiscernible] peak didn't it while for-sale uncertainties pandemic fact, regulatory the been apartment significantly stabilization was demand the the it the took the back of rents perhaps our was financial steeper economic, by late it XX years. shallower XXXX's impacted almost health-related. whether it of footprint. is recover on across for and timing in sector impact myriad housing to to as the the recovery yet seeing while benefited sector. years of also crisis economy the rents their difficult market steeper are to and the the current sector and the in given The that

are cycle a the return as the we though, Importantly markets and we next recover, last a in to housing apartment confident the in will good rents it’ll multifamily revenues just we several cycles over the long-term. business that sustain be will seen of that for growth

in part healthy we some signs improvement. recent saw slide at decline the generally operating to year. now to began operating on the Rent of growth the last began in early to strengthened months during early even began modest We after pre-COVID important Turning of off with recovery quarter the about half sequential trends. summary, and has submarkets and earlier above see suburban recovered urban continue regions and performance and last the QX gains QX to and the for occupancy we stabilization lost see sequential values. now to some quarters significantly declining level market or selling three with most in Transaction assets of

mentioned great sheet liquidity our remained growth balance Kevin in new support shape well-positioned As and opportunities. to

capital given transaction development pipeline this and improved recent the having new trends cautious for fact, operating market been quarter developments three of past starting we XXXX. decided most after to activate conditions, In

Our to Eli, still we Q&A. open return. up will that start And that risk-adjusted with have are for where downturn less some the impacted by been happy offer the economic to submarkets reasonable focusing be the call XXXX


go Of take first we course. question [Operator Joseph our ahead will Please from ahead. you. And go Nick Citi. and Thank from Instructions]

Unidentified Analyst

development historically to Avalon service how underwriting it's retail those. those on to ultimately even and they to conversations community Hi, others office a [indiscernible] partnered that bring be because thinking about has you about that these about sort with the going of ancillary are locations be now are do whether I projects, underwriting of or and part you bit you're here the wanted little it's Nick. into mixed-use ask for

will or Reggie take revolve? the on someone pieces how loss you effectively retail it's it multifamily math the require federal make think stay the multifamily think a the where where in on to to on about do the to Regency or you deal assembly rental you going Virginia took loss Can and about support do office I retail bought to obviously in think brought those I to higher come have get separately returns to capitalized work. you

Timothy Naughton

be and the may in I the it in talked at and building ultimately the of last it's a probably was, this we number of We about management more [indiscernible] given the times execution talked helps and ways just Regency obviously more quarters, as number with the mixed-use. a few think or of you Michael them a able sort we We about pursued to whether turning it's sort federal reasonably structure. yes projects separate events where out and in of been Yes, to core past interested two significant we the a retail it's shell cases suggest bit partnering been pieces. We back retail. and of it's felt the that's a with like or are MO often of pretty condo of pieces where a

and by a a that there as not also a housing It also was semi of as restricted a for-sale I horizontal sample component but the of are the community restricted age back retail you free We there also a fair on may assembling mix-use a be a structure will that you we of be bit more good feeling had separate well. adjacent maybe condo may if would developer but where be of sort free where example would different think this [indiscernible] used site part had it be sample of kind component.

locations with look is question be retailers in sort by was the where do a partnership the suburban or that users that it's your we I category, the third I single the entity entity the asset of probably the are interest where a so of infill controlled of kind country say [indiscernible] the contain entity the think is we was would particularly the some the headed top it to XXX%. control So in a where which that. when whether then probably of locations some a will will partner it's of linking

at somebody's I again so so is venture looking optimize between think the solution economics case and trying the help together that our probably but of the retail where residential be we us complex. terms our venture ground in we inevitably the partners because expert retail is make with of to are we preferred that underwrite and of trade area operate with off, of the plane and partnering them entire and which

if think make forward over you'll category emerging more think fast the the federals happen. companies of XX third us X the like to I sort with worlds and So of be next you agencies I that see like of agencies to partnering years will and that

Unidentified Analyst

to And then know timing just difficult the submarkets rent and extraordinarily the pointed project. in recovered terms in of that you out is the recovery, of I strength quickly

about if about go New trying your would rotating in you that this for it a guess I what when you recover think made amount a and York the guess about these year XX underwrite? You XX a make comment terms of still dictate of exposure a XXXX to early I San can to prior peak out you have which I Jose are assume fair didn't of timeframe markets from you difficult. rent years. get overall have more or deeper a having capital view decisions trying would to So allocation capital lot perspective

New your about the take today fundamentals rent and in recovery York and when San is where return? Fransisco So had you mindset

Matt Birenbaum

Obviously, Jose down Yes. and spike XXXX. suggest XXs, in to Francisco. there happen was town to the to because New has Jose during run-up York Thanks. late been is San a San the San big I that's what case and in didn't extreme going example City think you tech use the

the we’re think tech [indiscernible] think and long before terms view going New in ground. a and in hiring of particularly over York still markets these up of knowledge extend and in just in gain be market research centers some that's contained that think Francisco that lot can we We at believe homes as So point sort start productivity your is of universities, part but I costal of the are believe critically economy point cycles. great investment period they and was I in our of indexing of of is, I be of innovation, San it's crash and valuable intensity the our to getting terms ups the knowledge would the companies an

to Now to the math. as the from going satellite and and perhaps the workforces distribute with mature the maybe home we other those some continue hybrid they have markets to year are all and last over companies seen additional over markets satellite, work positions grow

the So country core still is over San are I between LA Washington in the term Francisco decline on like this see and supply think coast in next on to those going don't Coast and clear. markets over West it's customer sort of relationship long too to X be years. and themselves the cycles it's early long boss aren't think to Those to too. you years. demand what look When X underwrite East those power the or the XX We

may workforces a are expansion Seattle So research that markets well as or spillover particularly mature characteristics within there I effect some they probably larger that disperse knowledge some some same these and Boston their by southeast markets our Francisco as in Florida. and a from we of likely geography. inevitably expansion Denver some as across wider to recent that companies attractive York the some well But other has are markets of is the future university, your workers as beneficiaries San capital looking be other to of allocate think New DC to

Unidentified Analyst

it will or [indiscernible] capital be and of sales [indiscernible] rating do York, to sort just expand. other New Texas that to

Timothy Naughton


to the now. it of we a think think sense pursue are at don't point sales where markets probably given right I think just we performances makes

us and than we on are how I New going all those are down think two I a urban ask that city they rents when in a we going just bounce to years York back, markets back in be California think, visibility in am I seeing from they Northern little don't South is not even to wide -- the think more lot going better XX% we, until down think of there And we much side. were to or bit feel Sean is bit I just the see bounce I But where of that saying more assets it market. too XXX% year ago. they are

Google think in safe for your portfolio work just next the going is and if growth your be I that Park. to some like Facebook it’s or growth say So the net going probably View to [indiscernible] to it's is Mountain

So that you doesn't mean regions. those abandon

to, there the portfolio core as to going where capital is relates going are they it probably continue from growth So be allocation going core but to to our to is of it's to standpoint. from come be be

Unidentified Analyst

Tim. Thanks Okay.


our take and Hill Morgan ahead go question from will next Please go from we Richard ahead. Stanley. And

Richard Hill

to is it's XQ seems good you. in XQ at wanted I the a additional a afternoon Hey, Ben the on the earnings I appreciate lower little to nice it about we were $X.XX which mid Look expecting. from but maybe another bridge hear like on than little guide had disclosure sales interest capitalized the probably recognize to $X.XX bit I $X.XX and to still versus guys the what Hey forward spend working XQ. to with and more guys, point from is $X.XX thinking you AVB to hit call. time that bit

us? can $X.XX you given to to I the little bit the there apartments it green to $X.XX So Maybe I higher. am about online like do would've understand guide green shoots a of just be mix we called with for the is that maybe to trying break or get how and as should that think if difference coming you how something the think that down more expected about given shoots which you

Kevin O'Shea

is a of opening remarks. site this Kevin. of my through take people I try Maybe that to will Rich that walk in sort I

of I lot a whole don't know that details. I So have

around begin me and then maybe by further that you have questions if to we let a repeating try little that bit deeper. So can dive

is anticipate $X.XX this quarter. completed in that So just reference we the FFO our have sequential to decline in $X.XX to core in QX NOI, sequential of to were fourth QX share declining an the $X.XX we from as $X.XX to a $X.XX in point dispositions in midpoint decline related same-store relative sequential budget per decline residential what terms

present You quarter present quarter are need sale longer fourth much million assets mind, no the and quarter. for the about of $XXX in to bear that fourth in the in first did we were of

classifications lease rent QX include in of the other from initiatives line in that $X.XX $X.XX NOI that straight which increasing by call offset recover way from primarily that's $X.XX those receivables. NOI the by was well or item. which line strategic because community total they sequential so sequential decline as it is development sequential commercial So a and overhead from and in are decline expected sequentially and increased partially burden to increase

a backdrop. to it. would hard your the So it's $X.XX to may would for but have. that questions of higher reconcile was follow-up seem about for backdrop that's any kind be been expectations happy you answer me to have against I Again

Unidentified Analyst

of all just helpful naive is That's a despite wanted follow more because a NOI I effective of versus blended maybe NOI going question trying what like despite than headwind store to emerged improving seems very the XQ looks was rents. to a bit be What same some XQ I maybe store to more $X.XX I a little to the green same that. improving maybe and the understand That's that challenging headwind but I'm very helpful. and is it occupancy have was quarter understand like little shoots and bit be asking the why

Sean Breslin

concessions can detail am think to Rich. thing you're do bleed is cumulative we Yes level rents here as of I as if that talking additional what about and shoots in looking to lease keep help going well the have on may and rent effect leveling of I commentary XXXX. Sean. for of we but provide such in of some the sort off both take we one will reductions P&L the of that move through amortization This high as we're that offline that mind through it sort is certainly terms of then green

over other higher effect cumulative in than of as be those the QX. has the impact the of of lease look couple amortization concessions from been would the in and words forward you next the expectation be it months So rates will

something that We only we it about about look about I'm to in amortized is way granted So example broad million an as always think concessions people of one in XXXX. those. $XX sort $XX million but that's sure not cash at of

will still amortize through is XXXX. another there So million concessions $XX that of

talking mentioned we to So that growth move as Tim rates will forward as over impact months. points his continue the the several next

So color headwind. that provides the on additional some

Unidentified Analyst

Yes. to that simple makes burn and That's of of time more which guys off think it benefit a bit very explanation and sorry little that's an I'll it for mentioned just of helpful still initiative is strategic about complicated comp very there tougher has think that over the is but one that earned a that the is or get in modeling? back clarification more Hey, one we reoccurring you just time helpful. and that question but $X.XX queue as is I

Sean Breslin

and course year therefore includes the investment It's digital recurring. costs add capability which guidance It's so overhead continue adding year. of out part is which business of that occurring to been it's our for significant a full strategic and to and throughout is other in we've capabilities and our building the the our initiatives component

you on. kind about that So think it's can something continuing as of

Timothy Naughton

terms sort Learning coming if in through information in only that continue capabilities what's has next some we've conviction our provided self-guided and pandemic, of it I about two Rich moved that more those in but investment to in digital that it sort with sure only we and in the for talk and others payoffs in smart the that ties years to and think then accelerated but in of as if things the through. virtual you AI, on late one capabilities, peers of us the those Yes not to may associated there's you Machine about them detail into add access things or anything we probably even of as our making of think tours those we that quarter and tours just back over well, with ‘XX that happening of if ROI invest couple been sort talk investments see come and would expect more to the

Matt Birenbaum

Hey innovation investments as are of a to issue. a there's add making those in Rick to just that we geography bit

strategic through flowing benefit the and number get the may to payroll assets like You when but a [indiscernible] be save the the some initiative overhead compared big line is. it oftentimes the it because things big is is payroll a expense maybe the number they're number to what may be obvious we hitting so not property that able to

Unidentified Analyst

modeling of out it guys. little you sort to much. detail I time Guys the but thank Thanks I wonky really it. Got questions you very this know was more. appreciate bit spending a


ahead. with next our we'll question And Hightower to Rich go Please move from now Evercore.

Rich Hightower

guys to afternoon on good welcome Ben these Hey and again calls.

lot might through going but again of that market do are is how office gains and demand overlay we consider in does how return think what So be or the in the that we must the that the opposed spring you to that that pricing going seasonal the anything guys year in pattern normal key fold my on how do York New leasing giving kind what to big think drivers of we want in hone Grancisco in first have and but by Obviously do starting be the normally expecting XXXX, drivers in question think I forward and related as moving and to fourth in the you office sequential occupancy the should you we a we as to San decreasing is and return go of about to strange to consider all might about the as page quarter. is pattern the of the parts which been a business driven respects? sort and

Sean Breslin

that but mentioned what a clung people That monitor is our their I back to shot and in offices negative, first we factors reopening of environment. basically to like the [indiscernible] obviously at that mix-use would driver think and think key first terms and I you [indiscernible] work here. the

very XXX% quite I but mentioned certainly are return. not to a we are very to expecting earlier high As percentage likely return

major in urban the I these what by mentioned apartments occupy it's reopening etc. my second of that and is faculty, The student centers do really prepared not component is of major in etc. some but universities these in [indiscernible] just knowledge international the for but too the do staff, the urban remarks grow

more San make York that to business activity going what's sort market. phenomena then such X% markets corporate New that So we the demand where is that's pretty of of for Francisco significant there like X% can think you that and and things of was and follow ultimately to that

of going they before factors or those the need people is combination So see a back likely sort will what etc. work to to be will assignment campus demand at here apartment of little drive or lease on we consulting really some

is view the may that And we based happening what's population over be how on something be vaccination depending probably our think happen on probably is might think so that point summer all pandemic the etc. the when it's of sometime months with in here. and this that which timing next I few vaccination occurs at I the the you the see

stuff. see when So could people we in summer maybe want and fall returning employers people back to school the are

late expirations early XXXX compared have see of what any remaining spring release would which for we to that of given list to occurs the you a XX% quarter meaningful you where quarter to of those see impact the in need impact have probably is XXXX in expiration on that from kind be So fall determined the the in XXXX. summer have XX% key the think are material I we to would only happen to maybe lease to questions timing however, have the just results really on to

Rich Hightower

development Okay, chance in that's we're guidance the Sean. question helpful this cusp color you bigger really even to I year. ramping here XXX my go on multifamily? the you XXX What's next second multi-year the than up the obviously think recovery if guess starts guys you're of that

Timothy Naughton

good Well, it's question. a

point the that development capital in with in the mentioned of remarks prepared markets market at funding function some as this real we're plan of estate as we've seen closed I just my is well basically the dispositions. market what at As the

leverage protect given of stand. credit is Just where sort now trying our and to it our where right metrics

around up think in gain ratios we'd to just down hard capital. it's end with said sell to XX% past to it's want efficient. to it's much too having if capital I not and not of So the we as then It's hard we double and as distribution

where equity is, we a I happen of had of mean markets access to that as markets sort good of order more guess more reflective accommodate intrinsic need NAV have think value sheet we would I sort equity think have and said might we to would start we to what level development. which all to ready well go. really to expand Having those to more have recover might are balance in some, the the not the think deals I So today, markets. to but we

remarks the for part my run haven't impacted in been as from standpoint. focused the mentioned I As rate that most we're markets on in

often So least that yields how the still pipeline and entire development we not the at so current work. of are of think deals of these true basis sort appropriate the an That's return. risk-adjusted

next These a pick You and of just and don't options quarter. take or entitled start fully they're ready the two take some sort even start. to to years before gestate land things year deals up can go are that out

in even range too market not one I other. move So or flex market to be probably much great were the dramatically number's this it's way going suspect just to can't it's going up conditions but it's, unless if conditions probably the

Rich Hightower

Got it. Thank you.


We'll Please Pawlowski John take our Street. next question from from go Green ahead.

John Pawlowski

you where have for ultimate you could what think values and for the on cap those sense to color Matt distributions? two could any give a Northern us rate California the two Thanks, deals? do you How pre-COVID sales gotten allowed you

Matt Birenbaum

asset We in constrained unique almost the no construction. new a world two deals quarter very a the with in of in supply asset pretty very That's part little John. only northern Sure our county. Marin eastern was town [indiscernible] fourth existing stock sold the

was I the was think really So that a I around a say at the would that value all. much think one rate maybe We don't threes impacted XX. there cap high

story. bit where that have a from a of but would So slightly I'm a maybe such asset special been one-off year not just ago a sure it's it's that's down it

an because transfer bit close San city the motivated about country I we by asset in was other and tax the Eaves of X%. year year-end a at Diamond rent-controlled older through the increased of end city to sold that's Heights Francisco highest the little the to think we The the asset their there were initiative in at

So as a cap units. not less as were to probably terms some to the it X% although of impacted there constraints some out way XX% on year was there as and deal was the That before have a would below say asset XXX,XXX more was lift dollar but rents would I closing will hard that about for assets ago more, definitely because rent. the be just asset market NOI the in other end. a savings year for may know be so by maybe to the XX of also some it's buyer rent-controlled on raise because of sold ability

little probably data in lower than some a other assets So San Francisco. maybe

John Pawlowski

here? in Okay. entire is be free Great. particularly sticking the and the or you occupancy like occupancy or a market's feel is few one up for to as with floor stable private Northern so to question level own is the curious catch below short underneath the your play your thoughts lot Thanks. rents San well it able are three your sustain it question be going going to And and competitors do quarters is to you choppy sustain California second Sean Jose San then just competitors like Francisco, your months and when a of feels private

Sean Breslin

bit. what question I catch seen just rest that Yes California of of you were decline but are to bouncing so the of York some say as but and New expecting some be portfolio for like they to we whether say just market we market kind and of basically as a or most that should built City ones good close in sort for pretty occupancy try the or of impacted but state rents sort referenced off question example do wouldn't where think certainly a we're we better. going how markets sort wouldn't that that are given they've in should the are higher are the forward or fears just across we kind I now get as a given bounce around just it kind of trying the to I basically we part of bottom some does improvement get John feel and leveled is up quarters as of be seen is an probably pointed uptick, I the is along here couple is rents more to occupancy the to and not is, the we're much the next belief occupancies that's sharp if other to some rents occupancy there's rolling expect the hold going you I out it's where we've that's at where to occupancy question look quarter Washington the it I Northern reasonable you what a the we've across The think the and needed. as does lower assume little unfolded how Redmond we've think we think think marginal of

Now Every pocket's guess able that so and to described much of need we're won't we without is be I therefore that. little compete to way should as rents to bit trying sort the a stabilize bit available soft the as I inventory different the was a be way. little

you supply there. going need happening. it in think sub-markets what's that on of impact like things there look or a new meaningful to these do way terms in potentially new what's supplies not on Is at depending I

John Pawlowski

time. the for Thanks Great. Okay.


our Kim Markets. We'll take from John Please BMO question with Capital next go ahead.

John Kim

guess the or Comparing is prior on early the be and in could housing of helpful, of this I downturn the wondering and this that's terms you recovery one rent pace strength the landlords ownership and factor home the so market page of the the is I'm now quicker. big most a the between aggressively recessions think versus recovery cut you. time around rates if Thank the time XXXXs have very important XX, it's similarities yourselves that including

Timothy Naughton

Tim. it's I'm definitely the good It's question. market sell John a seeing strength. Hey

the like demography. early of I that XXXXs is is think part

year see markets bought the is edge now seeing of the forward are are XX what start over at year. may quality folks leading three the to from acceleration I start the have olds and you what's urban decisions has from again kind millennials an purchase. do the to because now or from to in you think of like the happening a of two years year of XX As first just now of been that accelerate life last come

driven a long think sad kind or for were two rent if be single talked three parent the have see I years like And is So the they two it's we look or rates yes view, home still for households our the be housing just next going growth that finance to which you over for have kind about given last talked this it's at group. we'll this last to in on when XX% know happening more that about fundamental or just [market] decades. we've kind decade XXXXs the was balanced population over choice then and seen renter it this and we and housing the we've to terms terms - you a system ownership we've sale The is think factors use place last of look the over level I terms growing. demand going is decade and , multi that mortgage going single been factors that yes in just in decade of of now in the just some time kind you were was of homeowner those speculative of driving level particularly of before the more a a just artificial home better mortgage person as and better it's factors growth families and for with The decade. crisis. decade. at by think There But was that XX% on in what's

all factors together suggest to there's housing think lot really of does when sort a you put going of I balance forward. demand sort So of it

four three producing a and the So million XX,XXX feels the whatever relative maybe right single units today that family million to we're around about marginal close units or to demand. multifamily

accelerated because marginal the the I to pandemic at a just right as three, four right we as two, of period think address now of of over sort of supply is are look mix demand. sort been us you strikes year it's but about it's speaking

John Kim

Thank That's very you. helpful.

Second Kevin, quarter. be us double to average year quarter, the by year versus your concession question concessions earnings can this each have the for granted in throughout trended concessions quarter is last impact the last for you from but the how remind

Matt Birenbaum

want you average if the to to Sean concession maybe speak Well, value?

Sean Breslin

I terms kind pace Yes. to has mean I probably you signed if can been I think at what describe is of leases the of what the in we concession. that look

QX, QX, quarter. XXXX was concession the you as XXXX bucks. So per signed average the move but was through at average the down lease we it take When did look

then an October were example November as they a XXXX under lease. January. XXXX was in XXXX down was So and was a just December XXXX lease

the terms So trend our been has in balance of of the impact concessions.

going in $XX granted Kevin only cash just what comment to in we clearly address but well event In and earlier to we XXXX. as one it them terms million XXXX mentioned of in accounting is $XX more the did million amortize I of is concessions reiterate

$XX book So prevents in deferred concessions concessions addition will be in it's the cash we that million that XXXX through and will amortized to in whatever grant XXXX the then concessions also still in amortization.

hope of hopefully granted that XXXX headwind So specific of that from the that the answers sense deferred XXXX. move that I some we sort you question. your concessions gives were as in

have you follow-up. a If

Kevin O'Shea

couple I John. can of add Kevin again. a things

of granted of the discussion to for earnings the give kind we full at you number. year it on if XX a granted our releases look our XXXX to for of to release page sense $XX.X million mentioned here That's just So [indiscernible] Sean the frame start just concessions. earnings

QX $XX.X about QX million. go million, we kind $XX.X of back If granted you in about granted

the difference did what pretty will we really is So QX. much in

So that's amortized granted QX. again to -- going be it call And million we so what or $XX in

John Kim

year-over-year it Is the fair that that to concession quarter that comps on? will be assume withholding going

Timothy Naughton

concessions today the just being February to as of concessions It all X, is zero of effective in if you stop you grant going and burn on April/May maybe lower XXXX [indiscernible] concession still we're now. sort today concessions the still amortization would but books timeframe. granting example what's off in the the what be function an a rate, sort we stop concessions of equal granting of We're a at

peak likely the few drift some summer concessions concession very will amortization depending into volume time of grant and So burn on it's that months. each the over for the we off the the of that the next amount

Unidentified Analyst

helpful. That's Thank you.


now ahead. from KeyBanc. will go Wurschmidt take Please our We question Austin from next

Austin Wurschmidt

Great. guys. Thanks

on occupancy touch occupancy of wanted rebound is kind Just economic mid to the again sort and approaching now XX% of range.

cushion guess into your view that then But that your fall pre-pandemic. increase? build spring and surge expiration for to season yourself, student until view to grind as some demand the kind leasing how people the see start guess the does give trying into to up occupancy plus dates I back balance and XX% How you could concessions as it get start continuing firm to were you you think population? I I until Summer office occupancy on of change do be the continuing that towards, maybe given the in down anyhow, the time versus to build to you

Sean Breslin

other as the point based we there. in across points strategy data out much that Austin and higher to on of available market of as basis of various We market we sort we over Anything urban up we the of you're probably ability X-X ago hold we around sub-urban to market that operating occupancy. point. that think the [indiscernible] where that occupancy question. this comfortable XXX Kind range think multiple look that is give beyond the mentioned so and rate couple Good produce like in occupancy questions consider the response is and are of have XXX to to too sort are we that slightly into triangulate months I got it from are above Sean. occupancy market market

what occupancy next we materially here expected four over So it bit months. while may seen spike wouldn't the little of drift in a couple somewhat of months to up last have

physical for but trying as effective we going the more rent will us sequential in is that that make a find we occupancy. see in today. sense for strategy at really hope sure be influence That’s that rents the head terms marginal macro there it forward that in of strategy where we certainly improvement see occupancy and environment those So it our where can and pivot about is us we improvements to will maintaining and

Austin Wurschmidt

Thank referenced it. decline you in XX% you Got rents. and the then

reference affordability in markets, it that you recovery from down last did pool quarter you've perspective. was as Can kind but a mention think urban has us give up sense think the I how us credit the in rental further to it about the of significant pandemic? that type maybe leading to we give gone in how to you of renter ratio any change profile of been versus years an comparison or a metric

Sean Breslin

deep good rental Also credit eviction our standards out have perspective there the the from thing particularly an where one are in be the any have of kind is regulatory income question. And during and No. orders given down. clear stringent obviously pool reach moratoria rents Yes. is pandemic various to become if about that more we the further down more are

is Francisco people qualify go when apartments to terms maybe in San year down maybe York but XX% qualify the for you where can or City you and of rebounds to couldn't might rents pay are income more as are a New So for push last that ability down their they rent the that. be increases few this to while down, future rents going levels are in through and with trying and are than

So to just come other the few to for to the on which thing last amortize amortize we GAAP remember actual concessions rebound that well and in the concession relates have a side tells don't concessions income quarters is we see of to bit for us pandemic. have ratios purposes as increases residents. it rent individual ability one We a rent is absorb the more there little

the for month a rent. full as they striking the an may month of they next example a check are amount So lease free the but receive upfront

base So them provide some to rent. will that lease typically expires be at least based opposed off point we at the as any in renewal the that to time rent

people opposed afford they're rent. for effectiveness are the writing they what where as can a check So to

Austin Wurschmidt

that decrease or the the face you in if rent what's gross will XX%? and Right versus

Sean Breslin


the but rents look blended X%. about look had that about on were that So they basis as at a down if if you change you we talking opposed rent were it we basically values were rounds at to effective release down XXX

Austin Wurschmidt

that how you number face rent I as that I concession More course down XX% still you compare income would the than that and quarter. referenced? guess over curious the when less Yes. the remove saw for of is number

Sean Breslin

less rental correct down rates. yes. the Incomes Yes. That's are than of reduction

Austin Wurschmidt

Thank Okay. you.


We Please will go now Askarbek question America. our ahead. take Alua of Bank next from from

Alua Askarbek

my a long. taking know little we're I for you questions. going Thank everyone. too Hi

little or So coming little more wanted bargain of those of just a get a I coming markets are lot clear those within feel bit hardcores seeing markets looking ask the urban for you bit you more seeing starting you've your in deals markets? on outside in to in demand to the I'll been but a be are quick side to demand idea that a still

Sean Breslin

coming It's the a qualified people the are good of question environment No. I incomes for a guess Yes. question good are and as terms in bargain deal well with but everybody's in to mentioned in. last response sort that current I the in hunters. looking of

they're them. deep can't we're to would I comfort drive doing trying we're people what that discount so really make for now for that it's really to looking and So a afford say for

is new top of say the terms for coming of the about would In that but a net as recirculating new what sort the geographies to coming to that's my other existing these there occupancy question have improved happen. that allow markets part of is of I just from good right entire in in opposed many the question. given head place into demand demand would that off we're that's don't a that the already has most demand market in that I net in cases seeing

in you come be have New of don't to San terms demand new demand. and City detail how for specific up I So has market occupancy a York there of much to in net Francisco

Alua Askarbek

overall. guys a just off like than it. Is Got anything supply that you effect Thank New then been that there XQ. the quick rent you. looks It talking really dropped question Okay. the maybe the behind on England Boston And have other or in about?

Sean Breslin

San pockets, the little as or are markets and asset phenomena, some same most No urban there urban sort not Francisco sort challenged. mean weaker. New Boston are the as driving of markets are still ring I your quite it's I choppy and row City I in inner the It's very quite a that assembly but are mean bad of that Chestnut bit Hill it there of like infill mentioned also the are pockets Newton suburbs York

performing distant Some districts are like more with are of things that good suburban school them and towns better.

Alua Askarbek

you Got it. Thank


from Please And from question go we next will ahead. Yulico take Scotiabank. Nick our

Nick Yulico

different if had, percentage you suburbs versus rent, where meaning of and buckets the you back and was in if what versus different thanks. give environments. just presentation I'm the new renewals just Hi blended wanted lending urban the slide leases guess, for that to the suburbs the to regions? I kind of occupancy go gave composition for the feel rents urban for wondering And you two for can us I the those

Matt Birenbaum

you Yes. because Nick because as [indiscernible] It's big month. talking it's the offline to changes that lot by renewals walk question. to of trying blended a [indiscernible] of [indiscernible] five good about through months. suppose changes it month

Timothy Naughton

feel we can before It rate will release earnings the just you that mean for had though. go for of give feel at to it quarters. you our get and I want look year-to-date mix. think a you if to think about. last I That turnover and in couple some shows the

Nick Yulico


for rate if in and slightly stabilizing because the quarter where first spring leases, up I Okay. of your line of stabilize, new higher number cases we to some the quarter the improvement guess is just picking you looking renewals through was you January do period what what lot starting in the my into that new just you this am guess is pricing that of rent at and should wondering less a year. I a in worst am leading turnover to turnover fact versus so kind versus here of just I I the periods. that blended we reading be you point quarter trying have leases this the but last are into and that lowest similar to the really the or of was we because are turnover it and was means fourth more if That new wondering is kind in I is leases fourth other I guess it's sort starting going parts where which year versus should is question

Sean Breslin

slightly John a been bottom pricing sense That's and in little typically building Yes. tell calling a turnover of fact a sesonally that to it's slowly earlier, four we for that pleased months to the effective a on year-over-year blended made months but the in better that are a have I we're us up I XX% right during basis terms the quite able neighborhood question god was to period of and it three-four pull see we think have now comment gives with where early rents that that back basically, kind what had of too that occupancy. is concessions we lower sort

were the believe get do four absolute months. of build to market in terms happens three we need though last to leasing season attempting able much we point be to we better yet occupancy as each should don't be spring the To your to Therefore forward. as we we seen. or So what effective does is as to it in rents moving in do

sequential markets and the will question supply around now the bottom and we we're improvements to these demand just at that think So to happens. that a that want at is that through platform now function see of what occupancy is of we're bouncing we be in kind I continue and those

terms at that think prepared going I we're yet. it's is to read the early call bottom this So a specific in little sure that in question the probably too of to whether say to it's and you should have that back bounce I not this just I'm

Nick Yulico

Thanks. Okay. guys. That's Thanks helpful.


from question next our Richard go ahead. take from We'll SMBC. Please Anderson

Richard Anderson

afternoon Hey good everyone. thanks

of to absolute don't think any when were jobs just percentage at as in lost you you to it very this I get decline to back numbers six get to think XX% off slide where white you lower base is plus bad as housing more the you off the years tighter growing history. it Xx get because it's in I need was the back that virus percentages Does it's sort unit growth you same and back where absolute you to XXXX do where kind you markets on the bottom in or bubble the to range you point in recovery have back taken get XX where to effective but whether complicated, were your crash. environment if will for metric the jobs in rent is than got to the when you were experienced in my in do XX your per was it's and about whatever you're you the whether somewhat talk you of misleading is about page it's a that your not that base rents black which X% smaller and can the So be were just to urban used and look vaccine of once of in three were rates logic then applies end sort tech you or to

Sean Breslin

low. looking in rates employment to terms household may that this ultimately either participation pretty the total of that that's they last of propel whether things the to while pretty it's is consolidated job, V-shaped the Sean That's its and one help Rich going good going the to be a have here. obviously are recovery or over the what's is deconsolidation rate and households obviously hear [U]-shaped is and formation year of labor

economic So suburbans yes, it's above. to X I quicker, a lot lot back could going as are growth to decent to X seen really going take some think quicker be a be I really, years we’ve than some to think

about suburban some to intensive submarkets Park tech talking is before urban really I about growth think think. that's as question and economic [MMA] of the here like View and I going take the some we're Mountain really or

markets rents you maybe to the urban be think As and the a three V-shape back see sort not event markets, another I maybe for may may those quick of years. four suburban for

Richard Anderson


So XX it question visibility days, guidance because giving not you ramping lot leads year development. full my is a you're beyond then but which to don't second you're of have

assets wondered from I if from to be confidence in So just months years is two would I now when your delivering higher like six and is of imagine that is than you you trying to it maybe a pandemic. the period these those by it on to are those COVID weren't in is pinpoint areas specific but development turning markets I impacted of as the where am now sort

Sean Breslin

markets. only you growth suburban X% back are that in It's It's a were doesn't a They think to get so that were lot of in down take point making. I those they where to back, be It X%. back lot could rents of a year.

return And where right of make so as we're comments my is I we think think focused sense where said I the adjusted activating kind and we're prepared lever risk that in now. markets

Richard Anderson

you. Thank All right.

Sean Breslin


Richard Anderson

you. Thank Yes.


Morgan. We go and next ahead. question take Anthony will our go Paolone ahead JP Please from from

Anthony Paolone

Yes, thanks.

On back up step anything look just does higher for growth year? to some as this expense of bring that sort and just the down function other inflation side growth these could there out XXXX the for or turnover an is expense of we this dynamics number

Timothy Naughton

good question. It's Yes.

the related that I the we're more the it's think promoted latter. pandemic sort higher I lot to turnover whether seeing of cleaning then stuff cost. cost, mean a is of extra and it's

and etc. going obviously given turnover temporary different like to etc. of contract it's tough labor kind The things particularly down their Associates and last half are on leave These year first the in of through [indiscernible] came, quarter play with second number a a [indiscernible] therefore that. laborers of areas. are overtime, driving comp way just

think So the second comfortable given a particular more that both the held half this mentioned little all to first It comp. particularly that half bit turnover pressure in half. Kevin expenses easier of on it's tough I because as when will will be be going put first and in just year the

Anthony Paolone

get for a the I total it's then variety you items adjustments XXXX number million the just understand have because think $XXX and same of and increase for do overhead $XXX Kevin. couple there? a of for just XXXX, Okay to to question million comparable

Kevin O'Shea

Sorry you core the of overhead are referring to number? kind expense

Anthony Paolone


around management gave property like that. guess and I it combines think I things brackets SG&A a you like few

Kevin O'Shea

Core $XXX – million expense million million. point about overhead priory core for reference The $XXX is $XXX for FFO million. and the $XXX was

increase well probably related that as before as transition X some of is executive investments initiatives were $XX million and we most it's basis additional year-over-year and strategic compensation very growth million about related it's an on including where investment about there's strategic cost the of So alluded ancillary there's initiatives to costs. with $X alone that and number

Anthony Paolone

Okay. Got it. Thanks a lot.


Please will from question We Piper Goldfarb ahead. go take and go Alexander ahead next our from Sandler.

Alexander Goldfarb

bottoming. Sure. assuming your first Tim the you incentives, the Good going do earnings. Ben rent have that Two to Kevin aboard. things part definitely afternoon out can guidance I'm and and laid are you questions here, think just free help welcome to decline you so that you

not of go how You're general but sort case. in base sure laid a will things out you've

So with you feel quarter there it's say if mind from then sounds where in things providing number sort the a are couldn't I for of full even it like your of because comfortable as wide prevents range from and sense year like continues what where sort that of something just that tracking seems would and year. a first sort wide provide s know range that general you you're in you just with have because if observations why of shaking it's sort midpoint a full work it even you XXX-XXX you like you something if curious

Timothy Naughton

my federal units it's remarks mentioned actually good even just dates I in X% difference expire with other and and one that or from taken into comes when play some Yes for. work from two boost moratoria potentially here. tied might and essentially reverse of benefit that We of eviction initially of call occupancy didn't home than a other makes may we we've up as well. they we Sean, got paying Alex. us are have things actually help the kind people a It's were that we of more only get a kind get that a question. that stimulus our it income but debts of things terms big in earlier fair and issue of even to bad have where terms a

So you start when given the together haven't variables, it's just past you I it's and we think put that all not gets frankly, think until we've arranges these in quarterly them guidance. it plant actually reliable

reality typical enough manage how to guidance. we week, it to we managing have is month, out given right reliable business like quarter That's We manage annual we’re quarter The about XX to visibility and guidance. our quarter-to-quarter. year now week provide feel it in days to got a month we

to it's be But that us sense with make anything. it now so reliable. reconcile you'd you up just situation right Beyond we not portfolio out gets choose think just I there provide precise trying wide others be just you're anything think don't outlook that That's it that's to I but Kevin may in. know if adding always really conversation. to makes to range. sync and I pointed the the are get if [indiscernible] be and a it the have guidance have we here I think that a total and to don't

Kevin O'Shea

and I just range. useful reliable reasonably covers satisfy can think to test to a narrow that we a providing midpoint the and reasonably mean Tim, I to add that

let anything's regionally negative beyond but variables these kind could As very that things play There very me possible and be positive they with the at produced ability look of we were back with to are of or to and accuracy. know half the our year.

we range of people a then the range we tests provide ultimately and meet on even narrow feel that gave couldn't we what that. a would reasonably which providing where given so if didn't be could And we just reliable wide focus forecast, we, like midpoint would reasonably around

just something business in guidance why QX to we try the appropriate. that like give So range seemed felt more and

Timothy Naughton

we the mean expansion, me of why portfolio, you're like over that's forma pro you guidance protect a months. in fairly feel pretty in showed reliable how I let it's add maybe when well terms the as XX get to some next business. how the that's the can an we recovery, kind Alex hard Yes the last put circle when it's the around reason slide downturns the to of and thing XX

Alexander Goldfarb

development or and like and that ramping balance Okay you looking is markets? more as capital of markets popular how expansion the the up versus capital the then capital guys of market using in second to the either of between development your think reconcile markets program extent Nashville that that expansion balance new and at you're with to investing Austin How or markets your these question about some does markets your the other other to current in days? sort do or and you using enter other

Timothy Naughton

question. Well, good it's a

out of been if basically I that a Denver, to say equity markets in sheet would and in we to we be and the point priced is really extent dispositions some this you where think it's extent northeast and balance through more alternative. expansion so at the markets like around assets and Florida second largely recover creative but acquired prudent where existing sense recycling of expand acquisitions come is reality would to sell the didn't that's the sort If that'd into it. certain just where let's give and Southeast done way makes be we any we've the more of fund potentially we cycle how markets guidance acquisitions it capital other values think and the the portfolio to capital management meaningful probably recycling way

Alexander Goldfarb

which finally Okay off? and that was the that York New was development written site one just then

Matt Birenbaum

had street it's Matt. the in RFP. investment the was XXth East Alex, that Hey That we

Alexander Goldfarb

was Cuomo it. De Blasio one the Okay that got

problem No thanks. Okay.

Kevin O'Shea

clear not to did than that or probable not say we Hey less more probable write off right. be more when means probable. but Aex it's just it's just I it it's it than [indiscernible]

Timothy Naughton


to other probable. view the do been tip less from way it’s an We have this accounting and and of point

Alexander Goldfarb

it. We got Thanks.


And our UBS. next from Please we take ahead. Brent ahead go will go from Dilts question and

Brent Dilts

guys. thanks Hey

point. permanent you your Just might financial talk properties? Could about the cuts transit how oriented one this impact some agencies U.S. largest talking about who transit of are at of to for me the struggles service

Sean Breslin

fallen been temporary transit we've that people cuts don't can seen I is it's one a as has Brent much. sort right the with systems as has in of I the that Whether I my the capacities just now. because most just it need versus probably through and developments little impacted would as prepared and results oriented transit that to permanent protections around early ridership we Yes wouldn't locations until people be Sean. I in suspect play that major our within too yet of and and probably result I that jump permanent what one sort of decisions get say there and it's fix but to the has out that. dramatically the made certainly ridership that pandemic mentioned cuts Tim a see beyond tell and all remarks, suburban normalizes matter, pandemic in mean footprint that

it's too this It's but too is negative upon on certainly are just on So what are that transit-oriented capacity there impact heavily to would and transit assets. this if at a are might that that the point system probably developments think out I are early relying be. residents those there probably cut be call early to that dramatically tell

Matt Birenbaum

feel some the to one I'll into marginally their land joint of on agencies deals sites have which central quarter land perhaps more probably Somerville makes other their are is of other side just at little is Matt trying a of to to a with started at and/or transit go and New where Actually we development. was some say pressure more we to this are past NJT looking agencies it just this Stop aggressive monetize the the going in positions. Avalon Jersey that transit dispose

Brent Dilts

Great. Okay. guys. Thanks


take Please go We'll ahead. Rob next question our Stevenson from from Janney.

Rob Stevenson

Good of XXXX afternoon in especially locked respect there cost starts labor construction is And given What you and lumber point? percentage guys. supply on wise decent are going are this costs how days? to what's your the at seeing these development what with

Matt Birenbaum

the the started Hey land Sure. yet we and except little on well. locked bit have that probably to as If really in job anything cost entitlement a I Rob can costs. haven't a for Matt. of speak the not one it's we

land that So we're under contracts. we maybe on have, next own and hard of or at they're three two the starts then the year, couple potentially we is looking think I them of a where others for there

little where we're adjust to expect today be start we three here position Unfortunately may didn't only a probably to self-correcting mills of big in of beginning market. at land third and that of usually soft a had commodities So the had to we to around is we will I'd depending like are are the a number cost year degree over had just of conviction of a is expensive. recovered the years. asked that some to that if everything should else that we've of these around run-up less hard I'd very is not now element in markets my quarters in say sit particularly because bit a hard that last we costs lumber conviction right guess a down concerns. seen ones XX%-XX%-XX% type. very we're the right We usually if cost last you doesn't around come There the that today not subject say and because has buy back starts lot and question market that The couple would that Capital of pandemic the much shut there the pricing seeing the for cost now the ourselves is high position. is sell lumber so having COVID the of those it the how XX% down anything pretty of really some as in product find lumber total. on for a but of

is in a nominal few move a probably point point more a towards the at for flattening this I'd think overheated do leveled decline that than off hard I'd we supply they increase the markets say again expectation springtime where really real in sense to were but start have costs maybe our except say this and should is at here So of more costs. by

Rob Stevenson

Okay and where mean XXXX current XX the pipeline? on to on yields starts I start given the the that new relative the the are

Matt Birenbaum

suburban look Right mostly there development of look our are is current forma there there pro about of behind you couple and development are when pro that actually the the and at mix and is just current a it pipeline you pipeline same the as are a at even that couple them in of up ahead deals but the lease that well. forma is

you that look of kind near-term to makes that sense when you of So when start. kind at, compare

Rob Stevenson

where what me at sales Loggia one points you've in price is lower terms or or last for already mix skewed condo left you what's left of with is are what's sold? higher the Okay. And towards fairly then consistent of

Timothy Naughton

Congratulations were get about Park so right if XX the to was a call I units. going Rob. we Loggia, through question we've closed without

accepted we The sold We sold a more us or offers under have have would mix we we've to four XX that few I bring where contract total. so another ‘XX three maybe penthouses. of think the

new So down to low-priced in deals the towards four have the to last more building. because was of reasonable a the actually pretty a podium just traction mix a frankly Traffic's quite the last picked still and is week. about it but on a little January the we're In seen call that's per skew is up price a been the units seeing like where start modest good XX now the three that mix building inquiries whereas going month month. up and in more of bit we to three more XX points averaging bit. months We've we've some

little a we but have is bit more on remains inventory average. that So do affordable a

Rob Stevenson

York is And expecting and residents of you tax and if type secondary residents passes the impact additional I these far state largely primary sold, mean being soak measures? thus are been City stuff any or rich New

Timothy Naughton

for but in kids, is their it's proposition lot value buying New strongly. pandemic going think there's maintain a many sales the that pretty market this is maybe may why of Again distance I a to learning people since Manhattan It up. see to of are cases and pick know. well university by just who This lot condos York pretty their hit a continuing not, don't which standards. kids obviously mean in is this is face I been row. I compelling is billionaires we're not our

but of a have type family versus So breakdown I of there if lot secondary primary would of lot say transactions. is [indiscernible] that don't exact the I residences

Rob Stevenson

Appreciate Thanks it. Okay. guys.


We next question will St. Haendel from take our

go Please Juste Mizuho. ahead.

Haendel St. Juste

afternoon. you. Good thank Hey

within question second March it do some I see all a there First similar eviction you XQ you into your guess similar very bad thinking? you the elevated to the XX XQ And here? third Thanks. debt. extension I of up you level? earlier what's Remain can guess role quarter, brought when is embedded the think Is on your moratoriums and expecting first are house that in until a playing of improvement guidance since

Kevin O'Shea

Kevin. Well the bad persistent first couple of here terms Maybe expecting quarter. first we are answer expense I'll level of a Haendel, the first this in quarter to the debt is into roll

of from if saw quarter Tim to he any want Sean to sorry, – add meaningfully add fourth and don't not different I So kind if you more the what in want you about know

Sean Breslin


there is running related things the sort about late to that. eviction, [indiscernible] of various like fees, On fees and moratoria related eviction

So it's to federal level [indiscernible] just in we the some and not have local that cases. even

you that June. noticed So through [indiscernible] may one California example have

of very various sort be population question it that view order well likely is you there extended that some if is let with people and is can economy in expire at beyond places this of of how a most say well could and on at terms how but that continuing depending of are sooner. Washington we the mid see going no recover that in this federal cases where to point things [indiscernible] the the there's unfold So as vaccination is things There and I bit point of through state probably overwrite. at quite state would do level. [indiscernible] we will CBC other year whole what

influence ability will that So big to our people.

likely that We is other we continue efforts it's what basically saw at debt but nice bad going like that January more last relates of is as it continue happen feel will we XXXX. three it this quarters bad are but of look continuing to XXXX last point like a we the quarters that to will little the wasn't but with three that a present quite face of collections bit as expectation

Matt Birenbaum

points revenue. kind who little something of year. to trends restoration that to Yes. seen in payers certainly going basis so you've reverse are last you the is of XXX of not to that Obviously XX landlord change wide and of to pandemic the not the XX is quarters you more can and to mean to XXX begin basis from to the points just something of add which I that like more I mean materially revenue typical expect of those the remedies we're resolution and perspective need to first half be few

Haendel St. Juste

it. Very helpful. Got it. Got

follow-up earlier questions have on a some to development. I Second

You Northeast noted development has starts three suburban. you noted been our of all that

you a starts have Thanks. are Coast you So can more underway locations. more West am about new few of you or project new recognize markets thinking Coast project pipeline, a half in what haven't started XXXX. but starts I West when since the non-Northeast I the the I'd curious it's you a a West second Coast in urban see in think couple

Matt Birenbaum

this have Florida This is in do We year. Sure. likely Matt. start southeast

are year. the market where large challenged but do planning planning starts start in now we pretty later in have Seattle. that we're start a California Seattle. have economics and Denver most is right were Suburban we expansion have starts in We this probably the we new We California tough. for is finding in

Haendel St. Juste

basis expected rates threads versus spread that XX deals you those cap referring development with call XX points be to And similar it - your earlier. on fairly

Matt Birenbaum

how think And cap our basis that and look Again, mean more mean so rates wide is would the points. I X that over Denver today in those XX. current that. I given think book low you we I assets the sell as the at for sub I a Florida. half low spread just said X if well probably than Seattle, spread is XXX about and it's is probably

Haendel St. Juste

Got Thank it. you.


Please Associates. Dennis our last take ahead. and question from & McGill go ahead go from Zelman will We

Dennis McGill

you. Thank

maybe especially to and wanted Just how touch from guys power are to wanted thinking bit some our once out a rebuild about you It supply might seemingly of just see slides occupancy on they're XXXX to urban balances. that on pricing quite deliver you would still work limit in views those in but in the seems it competing out how of but some environments. play your

Sean Breslin

comment Happy X% but Yes output that in XXXX we as about and Dennis, to it hear stock. well represent X.X% expecting the this others are XXXX come on to compared and to about are is Sean. Good Ken well to expected All relates as to trend be Jersey New X% question. offset regions though by XXXX of as the Jersey the deliveries of down of where is down even New decline City for to New is in maybe Jersey XXXX. northern going particularly City XXXX sort what be units, to area New and we're region New kind except increases in about deliveries first by seeing down York balance York to York,

expected So California. then in relatively flat be trade in area there increase Northern to is terms an of and we

as coming we Boston in terms York I yes urban specific modest urban New the City, little see of very In a district. in mentioned, bit of did benefit certainly increase a

flat. And not San So is different. Francisco basically terribly

be So units. about it no there to I other going where is market down would guess [indiscernible] LA and change XXXX material

equal So XXXX in point DC in better with and general the supply picture San in things than this to exception help XXXX the certainly being in at a it will time. urban recovery was environment be in support all with Francisco it

Timothy Naughton

‘XX in ‘XX of how ‘XX, translate and one here. the and about been are starts I urban ‘XX Dennis, see things to think and with [indiscernible] we into Hey and supplies already that started ‘XX and in that's may [indiscernible] Tim likelihood ‘XX the the but in going ‘XX think I that ‘XX performance. on stuff

position financed decade a as where I just workforce whole it's be a dispersing from [indiscernible] of last a thought did even bit XXXX they the going bit looks of this kind in reverse suburban maybe and was satellite the narrative I supply demand the the seeing where, It's better than little asset a from home, we to made work delivered be That reverse position performance, demand could quite almost and where story of get we're what little probably urban in beginning could for but decade better in think we years. suburbs. a you supply up completely to actually you but portfolio very for down decade fundamentals at outperform of in actually our your three to a of four be think a people and can going deals the against I tough anywhere for next and more offices such in well where markets. performance saw increased from the the submarkets the downtown as work that to everyone think kind standpoint,

Dennis McGill

now the share triangulate and on likely use then is year you or maybe That's helpful on can about ’XX? And higher out the comfortable is hangs quarter if thinking getting might then in just the it about repurchase buyback you how Thank the talk stock of how perspective. you. you where it capital be in to that it with

Kevin O'Shea

Yes. This is Kevin.

there of into So account a are number clearly. take variables

to anticipate our based our our First we're that our can peers represented the training trading you puts it quite see below and development a in back is as for do NAV. for outlook have least starting development of then year, where development alternative reflection our shares our relative all alternative we given with circumstances tougher that compelling lately although capital use and buying call shares is at and how our use on use that a few the normal and most do attractive more it and

pretty year back was were and math were compelling dark we when at are back around when today. buying shares can we which shares this we ran tell you we that buying point different felt $XXX from we As

to matters us So that we're alternatives. when well at as price the looking

a we also time and on we to to then factors only to and account you still our financial be and every pace range. other the taking source by if in the do work now rather potentially could into did buyback mindful that a would the development not possible our that and that that through to the make sense work in but still credit little to not we in concessions it we more proceeds and on as it lease to The all major rent But engage our buyback capacity a ready we have if have as but is of so need managing were stand debt, of mindful on do sense our buyback we rates take to from of balance by do and bit driven impact the the in proceeds so dispositions engage major so. leverages true and is today around been lower best basis moment declining our to X.X we that think a over up capital. the the knew then need movement against began been figures X.X metrics still impact net really our see was our and what metrics our what is said made when pandemic within EBITDA times heavy about that times and today quarters year that we targeted on ratio EBITDA to our ratio the X.X best has is use about When leverage sequentially decline our what's use so still in of our debt EBITDA of triangulate Engaging capital but the of in quarter be times. was our stays be ratio the into at we EBITDA roll last in targeted we and is the this

Dennis McGill

That a sense been long and Got makes call. it's know it. I

and the transparency. So the thanks time for


his remarks. that brief Tim? the closing conclude back like I that to does for with our question-and-answer over session turn call Naughton today. Timothy now And to for would

Timothy Naughton

of in hour you I off two or [indiscernible] and you rest all and thanks you. that all but you you Thank there hung forward everybody while. Thanks Eli an Thank day. on. of seeing many or three minutes for months. being XX for a that's been next for I your over for the virtually look to we've know the Enjoy


participation. your that does with you Thank And conclude today's call. for that

You may now disconnect.