Centerspace (CSR) 2023 Q4 法說會逐字稿

Hello, everyone, and welcome to the Centerspace Q4 2023 earnings call. My name is Harry, and I'll be coordinating your call today. (Operator Instructions)

大家好，歡迎參加 Centerspace 2023 年第四季財報電話會議。我叫哈利，今天我將協調您的電話。（操作員說明）

Now I'd like to hand the call over to Josh Klaetsch from Centerspace. Josh, please go ahead.

現在我想將電話轉給來自 Centerspace 的 Josh Klaetsch。喬什，請繼續。

Centerspace's Form 10-K for the year ended December 31, 2023, was filed with the SEC yesterday after the market closed. Additionally, our earnings release and supplemental disclosure package have been posted to our website at CenterspaceHomes.com and filed on Form 8-K.

Centerspace 截至 2023 年 12 月 31 日的年度 10-K 表格已於昨天收盤後向 SEC 提交。此外，我們的收益發布和補充揭露包已發佈到我們的網站 CenterspaceHomes.com 上，並以 8-K 表格形式提交。

It's important to note that today's remarks will include statements about our business outlook and other forward-looking statements that are based on management's current views and assumptions. These statements are subject to risks and uncertainties discussed in our filing under the section titled Risk Factors and in our other filings with the SEC.

值得注意的是，今天的言論將包括有關我們業務前景的陳述以及基於管理層當前觀點和假設的其他前瞻性陳述。這些聲明受到我們在標題為「風險因素」部分的文件以及我們向 SEC 提交的其他文件中討論的風險和不確定性的影響。

We cannot guarantee that any forward-looking statement will materialize, and you are cautioned not to place undue reliance on these forward-looking statements. Please refer to our earnings release for reconciliation of any non-GAAP information which may be discussed on today's call.

我們不能保證任何前瞻性陳述都會實現，並提醒您不要過度依賴這些前瞻性陳述。請參閱我們的收益發布，以了解今天電話會議上可能討論的任何非公認會計原則資訊的對帳。

I'll now turn it over to Anne Olson for the company's prepared remarks.

我現在將其轉交給安妮·奧爾森，以供公司準備好的演講稿。

Thanks, Josh, and good morning, everyone. Thank you for joining our call. With me this morning is Bhairav Patel, our Chief Financial Officer; and Grant Campbell, who leads our investment and capital markets activities.

謝謝，喬什，大家早安。感謝您加入我們的通話。今天早上和我在一起的是我們的財務長 Bhairav Patel；格蘭特·坎貝爾 (Grant Campbell)，領導我們的投資和資本市場活動。

Last night, we reported $4.78 of core FFO per diluted share for 2023, representing growth of 7.9% over 2022. These excellent results were driven by strong year-over-year same-store NOI growth of 9%, together with significant outperformance of our projections on G&A items.

昨晚，我們報告 2023 年稀釋後每股核心 FFO 為 4.78 美元，較 2022 年增加 7.9%。這些出色的業績得益於同店 NOI 年比強勁成長 9%，以及 G&A 專案的表現顯著超越我們的預測。

During 2023, we faced macroeconomic uncertainty, softening multifamily fundamentals, and a CEO transition. This was a lot of uncertainty. I'm so pleased with how our team has responded, our financial performance, and the efficiencies that we have harvested on the G&A side of the business.

2023 年，我們面臨宏觀經濟的不確定性、多戶家庭基本面的疲軟以及執行長的換屆。這存在很大的不確定性。我對我們團隊的應對方式、我們的財務表現以及我們在業務管理與行政方面所取得的效率感到非常滿意。

We feel well positioned as we head into 2024. It will be a difficult year given continued economic volatility and multifamily supply pressures. But we feel great about the relative position of our portfolio with attainable average rents and geographic exposures in the mid and Mountain West, which we think will translate into growth in 2024.

邁入 2024 年，我們感覺自己處於有利位置。鑑於持續的經濟波動和多戶住宅的供應壓力，這將是艱難的一年。但我們對我們的投資組合在中部和西部山區可達到的平均租金和地理風險方面的相對地位感到滿意，我們認為這將轉化為 2024 年的成長。

At the midpoint, our 2024 projections include same-store NOI growth of 2.5%, driving overall core FFO growth of 0.4%, with guidance at $4.80 per diluted share for the full year. While Bhairav will provide more detail about our 2024 guidance, I want to share some recent results and trends that give us confidence that we will be able to achieve growth in 2024 even after the sale activity and repositioning that we undertook in 2023.

就中期而言，我們對 2024 年的預測包括同店 NOI 成長 2.5%，推動整體核心 FFO 成長 0.4%，全年指引為每股攤薄後每股 4.80 美元。雖然Bhairav 將提供有關我們2024 年指導的更多詳細信息，但我想分享一些最近的結果和趨勢，這些結果和趨勢讓我們相信，即使在2023 年進行的銷售活動和重新定位之後，我們也能夠在2024 年實現成長。

We ended the year with weighted average occupancy of 94.8%. During the fourth quarter, we realized an average decrease of 2.9% on same-store new lease trade-outs and an average increase of 3.7% on same-store renewals, resulting in a 0.4% blended rate increase.

截至年底，我們的加權平均入住率為 94.8%。第四季度，同店新租交易平均下降 2.9%，同店續租平均成長 3.7%，綜合費率成長 0.4%。

January provided optimism for 2024 as we are pleased to see market rents holding. With 5% of our leases expiring in January, we realized an average decrease of 1.9% on same-store new lease trade-outs and an average increase of 3.2% on same-store renewals, resulting in a 0.1% blended rate increase.

1 月為 2024 年帶來了樂觀情緒，因為我們很高興看到市場租金保持穩定。由於 5% 的租約於 1 月到期，我們實現了同店新租約交易平均下降 1.9%，同店續約平均增加 3.2%，導致綜合費率增加 0.1%。

While Q4 and January showed negative new lease spreads, this is not uncommon historically, and it is worth noting that the percentage change in January was 100 basis points stronger on average new lease rates than December. We have prioritized physical occupancy over rent growth through much of Q4 and Q1 to date, and we'll continue to do so until we see renter demand rebound to a level sufficient to drive the necessary new lease volumes and put us in a position to implement more aggressive pricing on both new leases and renewal.

儘管第四季和 1 月的新租賃利差呈負值，但這在歷史上並不罕見，值得注意的是，1 月平均新租賃利率的百分比變化比 12 月高出 100 個基點。到目前為止，在第四季度和第一季的大部分時間裡，我們優先考慮的是實體入住率而不是租金增長，我們將繼續這樣做，直到我們看到租戶需求反彈到足以推動必要的新租賃量的水平，並使我們能夠實施新租約和續約定價更加激進。

Less so than some other parts of the US, we are seeing supply pressures in Denver and Minneapolis. However, to date, both of those markets have shown resiliency and absorption. Particularly notable, CoStar cited Minneapolis as having the second strongest absorption in the nation in 2023 through the third quarter with a ranking in the top three nationally for both 2022 and 2023.

與美國其他一些地區相比，丹佛和明尼阿波利斯的供應壓力較小。然而，迄今為止，這兩個市場都表現出了彈性和吸收力。特別值得注意的是，CoStar 指出，明尼阿波利斯市在 2023 年第三季的吸收量位居全國第二，2022 年和 2023 年均排名全國前三。

At the same time, most of our secondary Midwest markets have minimal, if any, new supply and ranged from zero to 3% of existing stock under construction. With the industry experiencing challenging operating fundamentals due to elevated supply and moderating but continued expense pressures, there's a dearth of transaction activity. We focused on portfolio improvement both in operations and through dispositions, and it was a busy year on that front.

同時，我們大多數中西部二級市場的新增供應量（如果有的話）也很少，且在建現有庫存量的比例從 0% 到 3% 不等。由於供應增加和支出壓力持續緩和，該行業的營運基本面面臨挑戰，交易活動匱乏。我們專注於營運和處置方面的投資組合改進，這一年在這方面是忙碌的一年。

During 2023, we sold 13 communities for the aggregate price of $226.8 million. The communities sold were located in St. Cloud in Minneapolis, Minnesota; Omaha and Lincoln, Nebraska; and Minot, North Dakota. The proceeds of the sales were used to acquire community in Fort Collins, Colorado and for the repayment of debt.

2023 年，我們出售了 13 個社區，總價為 2.268 億美元。出售的社區位於明尼蘇達州明尼阿波利斯市的聖克勞德；內布拉斯加州奧馬哈和林肯；和北達科他州邁諾特。銷售收入用於收購科羅拉多州柯林斯堡的社區並償還債務。

Additionally, during the fourth quarter, we were able to successfully close on a mezzanine loan that includes a purchase option, funding new multifamily development of 244 homes in Inver Grove Heights, a demographically strong submarket of the Twin Cities. To date, we have funded approximately 40% of our $15.1 million commitment. This community is scheduled for delivery in summer 2025.

此外，在第四季度，我們成功完成了一筆包含購買選擇權的夾層貸款，為雙城人口密集的子市場因弗格羅夫高地(Inver Grove Heights) 的244 套住宅的新多戶住宅開發提供資金。迄今為止，我們已經資助了 1510 萬美元承諾中的約 40%。該社區計劃於 2025 年夏季交付。

These transactions highlight our commitment to continued refinement of our portfolio; its age, quality, and market exposure; as well as maintaining a strong balance sheet. Subsequent to year end, we entered into sale agreements for two communities in the Minneapolis market, comprising 205 homes for aggregate consideration of $18.9 million.

這些交易凸顯了我們對持續改善投資組合的承諾；它的年齡、品質和市場曝光度；以及維持強勁的資產負債表。年底後，我們為明尼阿波利斯市場的兩個社區簽訂了銷售協議，其中包括 205 套住宅，總價為 1,890 萬美元。

Limited by size and age, these communities were not able to provide us with the NOI margin or growth we expect from our portfolio. The transaction should close in the next week, and proceeds of these sales will be used to pay down our line of credit.

受規模和年齡的限制，這些社區無法為我們提供我們期望從我們的投資組合中獲得的 NOI 利潤或成長。交易應在下週完成，這些銷售的收益將用於償還我們的信用額度。

Regarding share buybacks, since we reported our Q3 results, we have acquired approximately $9.5 million of our common stock at an average price of $53. With continued lack of asset transaction volume and our demonstrated execution on 2023 sales of certain of our less-efficient and lower-growth assets at a weighted average cap rate of 6.5% based on prior 12-month NOI, we like buying our current portfolio at an implied cap rate of 7.6%.

關於股票回購，自從我們報告第三季業績以來，我們以平均價格 53 美元購買了約 950 萬美元的普通股。由於資產交易量持續不足，以及我們在 2023 年以基於之前 12 個月 NOI 的加權平均上限 6.5% 出售某些效率較低和增長較低的資產的表現，我們喜歡以隱含上限率為7.6% 。

We do have some capacity remaining in our authorized buyback program, but we'll prioritize maintaining balance sheet flexibility while calibrating market factors affecting relative asset valuations. As I mentioned earlier, this may be a tough year for the multifamily sector, but we believe we will perform well on a relative basis, given the work we have done on our portfolio composition and operating platform.

我們的授權回購計畫確實還剩下一些能力，但我們將優先考慮保持資產負債表的靈活性，同時調整影響相對資產估值的市場因素。正如我之前提到的，對於多戶住宅領域來說，今年可能是艱難的一年，但考慮到我們在投資組合構成和運營平台方面所做的工作，我們相信相對而言我們將表現良好。

Our Board shares the belief that we will have strong results, coupled with discipline on executing our strategy and has declared a $0.02 per common share increase in our next quarterly dividend, raising it to $0.75 per common share.

我們的董事會相信，我們將取得強勁的業績，再加上執行策略的紀律，並宣布下季度股息每股普通股增加 0.02 美元，達到每股普通股 0.75 美元。

Before I turn it over to Bhairav, I want to thank our team. 2023 was a great year because of our organizational commitment to better every day, and I appreciate their hard work and dedication.

在將其交給 Bhairav 之前，我要感謝我們的團隊。 2023 年是偉大的一年，因為我們組織致力於讓每一天都變得更好，我感謝他們的辛勤工作和奉獻精神。

Now I'll ask Bhairav to discuss our overall financial results and details of our 2024 outlook.

現在，我將請 Bhairav 討論我們的整體財務表現和 2024 年展望的詳細資訊。

Thanks and good morning, everyone. Last night, we reported core FFO of $1.22 per diluted share for the fourth quarter of 2023, which was driven by another strong quarter of operating results, with same-store NOI increasing by 7.6% over the same quarter last year.

謝謝大家，早安。昨晚，我們報告了 2023 年第四季度稀釋後每股核心 FFO 為 1.22 美元，這是由另一個強勁的季度營運業績推動的，同店 NOI 比去年同期增長了 7.6%。

Our operating results for the quarter were in line with our expectations, while core FFO exceeded expectations. The outperformance in core FFO during the quarter was driven by lower-than-projected G&A, primarily due to lower IT-related spend and higher interest income, including approximately $150,000 in origination fee received upon the close of the mezzanine loan that Anne discussed in our remarks earlier.

我們本季的經營業績符合我們的預期，而核心 FFO 超出了預期。本季核心FFO 的優異表現是由低於預期的一般管理費用推動的，這主要是由於IT 相關支出減少和利息收入增加，包括安妮在我們的報告中討論的夾層貸款結束時收到的約150,000美元的發起費。早些時候的評論。

This capped off another strong year of earnings growth for the company with same-store NOI growth of 9% for the year and core FFO of $4.78 per diluted share, an increase of almost 8% compared to the previous year.

這為該公司又一個強勁的盈利增長年畫上了圓滿的句號，當年同店 NOI 增長了 9%，稀釋後每股核心 FFO 為 4.78 美元，與上一年相比增長了近 8%。

Other notable activity during the quarter included an impairment charge of $5.2 million related to the two communities in Minneapolis that Anne mentioned we expect to sell next week and an additional charge of $1 million for prejudgment interest related to the litigation settlement earlier in the year. Both charges are excluded from core FFO.

本季其他值得注意的活動包括與安妮提到的我們預計下週出售的明尼阿波利斯兩個社區相關的520 萬美元的減值費用，以及與今年早些時候的訴訟和解相關的100 萬美元的判決前利息的額外費用。這兩項費用均不包含在核心 FFO 中。

On the capital front, we are well-positioned with a strong and flexible balance sheet. We ended the year with $235 million of liquidity and leverage of 7.1 times net debt to EBITDA, which is half a turn lower than at the beginning of 2023 because of our capital repositioning activities during the year.

在資本方面，我們處於有利地位，擁有強大且靈活的資產負債表。截至年底，我們的流動性為 2.35 億美元，槓桿率為 EBITDA 淨債務的 7.1 倍，比 2023 年初低半圈，因為我們在這一年進行了資本重新定位活動。

In addition, we have a well-laddered debt maturity schedule with no debt maturities until the middle of 2025, weighted average time to maturity of 6.3 years and weighted average cost of 3.54%. This balance sheet strength allowed us to opportunistically repurchase shares, which we believe are currently trading significantly below the true value of our assets in the portfolio.

此外，我們有一個完善的債務到期時間表，直到 2025 年中期才到期，加權平均到期時間為 6.3 年，加權平均成本為 3.54%。這種資產負債表的實力使我們能夠機會性地回購股票，我們認為目前這些股票的交易價格大大低於我們投資組合中資產的真實價值。

During the quarter, we repurchased nearly 92,000 shares, bringing our 2023 repurchases to 216,000 shares at an average price of $53.44 per share. After year end, we repurchased an additional 88,000 shares at $53.62 per share.

本季度，我們回購了近 92,000 股股票，使 2023 年回購數量達到 216,000 股，平均價格為每股 53.44 美元。年底後，我們以每股 53.62 美元的價格額外回購了 88,000 股。

Turning to guidance, we introduced our 2024 expectations in last night's press release. For 2024, we expect same-store NOI growth of 1.5% to 3.5% that's relatively healthy top-line growth of 4% at the midpoint. The projected revenue growth is driven by an earn-in of 1.7% at year end and projected blended lease growth of 2.5% at the midpoint. It is further fueled by incremental revenue following the completion of our RUBS rollout and continued investment in our value-add program. We spent almost $30 million in 2023 and expect to invest an additional $25 million to $27 million on value-add initiatives in 2024.

談到指導，我們在昨晚的新聞稿中介紹了 2024 年的預期。到 2024 年，我們預計同店 NOI 將成長 1.5% 至 3.5%，這是相對健康的中位數 4% 的收入成長。預計營收成長是由年底 1.7% 的獲利成長和中期 2.5% 的混合租賃成長所推動的。在完成 RUBS 推出以及對增值計劃的持續投資後，收入的增加進一步推動了這一成長。2023 年，我們花了近 3,000 萬美元，預計 2024 年將額外投資 2,500 萬至 2,700 萬美元用於增值計畫。

Although expense pressures have moderated, we still expect expense growth of 6.25% at the midpoint to exceed our revenue growth in 2024. The growth is primarily driven by onsite compensation as the labor market remains remarkably resilient and insurance expenses driven by premium increases of over 25% year over year.

儘管費用壓力有所緩解，但我們仍預計 2024 年中點費用將成長 6.25% 將超過我們的收入成長。這一增長主要是由現場補償推動的，因為勞動力市場仍然非常有彈性，而保險費用則由保費同比增長超過 25% 推動。

We expect core FFO of $4.68 to $4.92 per diluted share with a midpoint of $4.80 per diluted share, a slight increase year over year despite the impact of approximately $130 million of net dispositions during 2023.

我們預計稀釋後每股核心 FFO 為 4.68 至 4.92 美元，中間值為稀釋後每股 4.80 美元，儘管受到 2023 年淨處置約 1.3 億美元的影響，但仍同比略有增長。

Please note that although our guidance equates to core FFO of $1.20 per share per quarter, our core FFO during the first quarter is expected to be below that average and projected to increase in each subsequent quarter. This is primarily a result of sequential revenue growth from lease expirations during peak leasing season in Q2 and Q3.

請注意，儘管我們的指引相當於每季每股 1.20 美元的核心 FFO，但我們第一季的核心 FFO 預計將低於該平均水平，並預計在隨後的每個季度都會增加。這主要是由於第二季和第三季租賃旺季租賃到期導致收入連續成長的結果。

The guidance range incorporates all the buyback activity since the end of 2023 that I highlighted earlier, and approximately $19 million of proceeds from the sale of two communities in Minneapolis. It also assumes that the mezzanine loan of $13.1 million will be fully funded by early Q3. No further investment or disposition activity is assumed in the guidance.

該指導範圍涵蓋了我之前強調的自 2023 年底以來的所有回購活動，以及出售明尼阿波利斯兩個社區的約 1900 萬美元收益。它還假設 1,310 萬美元的夾層貸款將在第三季初全額到位。指南中沒有假設進一步的投資或處置活動。

Lastly, as noted in our press release, our Board of Trustees announced an increase of $0.02 per share in our quarterly common dividend to $0.75 per share. The common dividend will be paid on April 8, 2024, to shareholders and unitholders of record at the close of business on March 28.

最後，正如我們在新聞稿中指出的，我們的董事會宣布將季度普通股息每股增加 0.02 美元，達到每股 0.75 美元。普通股利將於 2024 年 4 月 8 日支付給 3 月 28 日營業結束時登記在冊的股東和單位持有人。

To conclude, we are proud of the results we achieved in 2023, not just on the earnings growth front, but even more so in advancing our key strategic priorities of improving our balance sheet, portfolio quality, and market positioning. This is only possible because of a concerted effort, commitment, and discipline across the organization. And I would like to thank our entire team for their hard work and focus throughout the year. We look forward to building upon these results in 2024.

總而言之，我們對 2023 年的成果感到自豪，不僅是在獲利成長方面，更重要的是在推進改善資產負債表、投資組合品質和市場定位等關鍵策略重點方面。這只有透過整個組織的共同努力、承諾和紀律才有可能實現。我要感謝我們整個團隊一年來的辛勤工作和專注。我們期待 2024 年在這些成果的基礎上再接再厲。

And with that, I will turn the line back to the operator to open it up for questions.

然後，我會將線路轉回接線生以供提問。

(Operator Instructions) Brad Heffern, RBC Capital.

（操作員指令）Brad Heffern，RBC Capital。

Yeah, thank you. Good morning, everybody. Bhairav, you gave a couple of pieces of the revenue guide in the prepared remarks, but I was wondering if you could also give occupancy loss to lease and market rent growth as well.

是的，謝謝。大家早安。Bhairav，您在準備好的演講中提供了一些收入指南，但我想知道您是否也可以將入住率損失計入租賃和市場租金增長。

Sure. Good morning, Brad. Yeah, so with respect to occupancy, we are projecting about 95%, which is roughly in line with what we had for the year. With respect to loss to lease at the end of January, we were sitting at about 3.5%. This is roughly in line with where we were about 12 months ago.

當然。早安，布拉德。是的，就入住率而言，我們預計約為 95%，這與我們今年的入住率大致相符。1 月底的租賃損失約為 3.5%。這與 12 個月前的情況大致一致。

We do expect rents to grow from here. However, we don't really expect them at this point in time to reach the same peak that they did last year. So market rent growth will be a little bit muted, but it will still grow from here as we enter the leasing months.

我們確實預計租金將從這裡開始成長。然而，我們並不真正期望他們在此時達到去年那樣的高峰。因此，市場租金成長將有點溫和，但隨著我們進入租賃月份，它仍將成長。

Okay, got it. And then on the repurchase, I guess, how do you think about weighing the attractiveness of that versus some of the downsides, like obviously shrinking the company and increasing leverage, et cetera?

好，知道了。然後，在回購方面，我想，您如何考慮權衡其吸引力與一些缺點，例如明顯縮小公司規模和增加槓桿率等？

That's a great question, Brad, and one we spend a lot of time on. So we really are looking to balance what the best use of our capital is, particularly paired with a year where we had a lot of dispositions, and so a lot of proceeds and how we want to effectuate a strategy of external growth and maintain real balance sheet strength.

這是一個很好的問題，布拉德，我們花了很多時間在這個問題上。因此，我們確實在尋求平衡我們的資本的最佳用途，特別是在我們有大量處置、大量收益的一年，以及我們希望如何實施外部成長策略並保持真正平衡的情況下片材強度。

So we felt like this was a good time. We have the proceeds from the sales. We have two more sales this year scheduled. But as I stated in the prepared remarks, we really are trying to balance that maintaining balance sheet flexibility. And I think you'll see us really pull back on the buybacks going forward here into 2024.

所以我們覺得這是一個美好的時光。我們有銷售收入。今年我們計劃再進行兩次銷售。但正如我在準備好的發言中所說，我們確實正在努力平衡保持資產負債表彈性。我想你會看到我們在 2024 年真正減少回購。

Okay. Thank you.

好的。謝謝。

Connor Mitchell, Piper Sandler.

康納米切爾，派珀桑德勒。

Hey, good morning. Thanks for taking my question. First, maybe just following that line of questioning and your index statement there, as you guys are going to slow down on the buybacks, could you just give us a better idea of maybe you'll allocate that more towards acquisitions or paid out some more debt, whatever you guys see the best use capital to that case?

嗨，早安。感謝您提出我的問題。首先，也許只是按照那條質疑和你的指數陳述，因為你們要放慢回購速度，你能否給我們一個更好的想法，也許你會分配更多的資金用於收購或支付更多的金錢債務，無論你們認為哪種情況下最好利用資本？

Yeah, we really are looking to have very strong capital allocation. And so as we look into 2024, we would really be prioritizing opportunities for external growth. It's not a lot of transaction volume and still a pretty big disconnect in the market on pricing. That may be difficult, but we want to make sure that we fund our value-add program sufficiently. We have $25 million to $27 million this year slated for that.

是的，我們確實希望擁有非常強大的資本配置。因此，當我們展望 2024 年時，我們確實會優先考慮外部成長機會。交易量並不大，市場定價仍有很大脫節。這可能很困難，但我們希望確保為增值計劃提供足夠的資金。今年我們為此計劃投入 2,500 萬至 2,700 萬美元。

And with no maturities until mid 2025, it's a little bit difficult for us to get at any debt paydown. So that is one of the considerations that we had when we looked at doing the buyback was that opportunity wasn't as available to us as it might be into the future.

由於要到 2025 年中期才到期，我們要償還任何債務都有點困難。因此，當我們考慮回購時，我們考慮的因素之一是，我們沒有像未來那樣擁有機會。

But external growth is really a priority of ours, value add as well, and keep strategically repositioning the portfolio, getting better market exposures. Increasing the quality of the portfolio, I think, is high on our priority list.

但外部成長確實是我們的首要任務，也是增值的重點，並且不斷策略性地重新定位投資組合，獲得更好的市場曝險。我認為，提高投資組合的品質是我們的首要任務。

Okay. I appreciate the color there. And then maybe just thinking about the Colorado deal you guys executed back in the fourth quarter, just want to make sure we understand the GAAP implications on earnings.

好的。我很欣賞那裡的顏色。然後也許只是想一下你們在第四季執行的科羅拉多州交易，只是想確保我們了解公認會計原則對收益的影響。

It seems the amortization of the assumed debt has become an add back to core. So just curious if you guys can give us any more details what we may have missed regarding the GAAP implications, or any bigger picture is on the impact from an earnings perspective?

似乎承擔債務的攤銷已成為核心的補充。因此，我只是好奇你們能否向我們提供有關 GAAP 影響的更多詳細信息，或者從盈利角度來看，我們可能錯過了哪些更大的影響？

Sure, Connor. Good morning. On page 16 of our supplement, we kind of break down the components of our guidance. In the adjustments to non-core, you will see the amortization of assumed debt. That's about $1.1 million, and that's the amount that will be added back to core with respect to the debt amortization. Does that answer question?

當然，康納。早安.在我們的補充資料的第 16 頁上，我們對指南的組成部分進行了分解。在對非核心的調整中，您將看到承擔債務的攤銷。這大約是 110 萬美元，這是將根據債務攤銷加回核心的金額。這能回答問題嗎？

Yeah. I guess, just to make sure I fully understand, that is primarily related to that Colorado deal in the fourth quarter that was executed?

是的。我想，只是為了確保我完全理解，這主要與第四季度執行的科羅拉多州交易有關？

That's correct. That's -- most of that amortization relates to the deal that we are talking about.

這是正確的。也就是說，大部分攤銷與我們正在討論的交易有關。

Okay, great. Thanks very much.

好的，太好了。非常感謝。

John Kim, BMO Capital Markets.

約翰金 (John Kim)，BMO 資本市場。

Thank you. I have a question on the mez loan, the rate of the loan. I think Bhairav mentioned that origination fee, I'm assuming that's paid by the borrower, and if it's your intention to exercise the purchase option on the asset.

謝謝。我對中間貸款、貸款利率有疑問。我認為 Bhairav 提到了發起費，我假設這是由借款人支付的，並且如果您打算行使資產的購買選擇權。

Good morning, John. I'll have Grant take that one.

早安，約翰。我會讓格蘭特拿那個。

Hey, good morning, John. We're earning a 10% interest rate with accrued -- or excuse me, with interest accrued and compounded monthly on that transaction. On the back end related to the purchase option, that option to acquire the stabilized community comes with pre-negotiated terms that include a 7% discount that then market value of the community at stabilization.

嘿，早上好，約翰。我們賺取 10% 的應計利息——或者對不起，該交易的應計利息和每月複利。在與購買選項相關的後端，購買穩定社區的選項帶有預先協商的條款，其中包括穩定時社區市場價值的 7% 折扣。

Our intent to exercise the purchase option, we enter entities with a desire to acquire the completed stabilized community on the back end. We will continue to sit in the lender chair, monitor funding, monitor asset performance, and make that decision in mid 2025.

我們打算行使購買選擇權，我們進入希望收購後端完整穩定社區的實體。我們將繼續擔任貸方主席，監控資金、資產績效，並在 2025 年中期做出決定。

Are there opportunities for mez investments in some of your other markets? And I realize in the past, you looked at Nashville as a potential entry market, but it seems like you're overweight Twin Cities exposure already. So I was just wondering if you saw similar investment opportunities in some of the other markets that you're interested in?

你們的其他一些市場是否有夾層投資的機會？我意識到過去，您將納許維爾視為潛在的進入市場，但似乎您已經超配了雙城的投資。所以我想知道您是否在您感興趣的其他一些市場中看到了類似的投資機會？

Yeah, we are talking to folks in other market about this execution. Broadly speaking, it's harder to make development underwriting pencil in this environment. We will continue to seek opportunities with the book of business that do make sense. We do view it as a complement to our other capital allocation strategies.

是的，我們正在與其他市場的人討論這次執行。從廣義上講，在這種環境下開發承保鉛筆變得更加困難。我們將繼續透過商業書籍尋找確實有意義的機會。我們確實將其視為對我們其他資本配置策略的補充。

These opportunities provide good returns and direct visibility on asset performance and potential future acquisition timeline via that purchase option that we reference. This direct visibility is beneficial when we think about portfolio recomposition initiative. So yes, we are having conversations in other geographies, very hard to make these pencil in today's environment, but we'll continue to seek them.

這些機會透過我們引用的購買選項提供了良好的回報和對資產績效和未來潛在收購時間表的直接可見性。當我們考慮投資組合重組計劃時，這種直接可見性是有益的。所以，是的，我們正在其他地區進行對話，在當今的環境下很難製造這些鉛筆，但我們將繼續尋找它們。

And John, from a purely financial standpoint, we'd like to have a certain portion of our capital allocated to the mezzanine funding. These are difficult deals for us to get done at our size. And so you have seen us do them in Minneapolis because this is a place where we have very deep connection.

約翰，從純粹的財務角度來看，我們希望將部分資本分配給夾層融資。以我們的規模來說，這些交易是很難完成的。所以你看到我們在明尼阿波利斯這樣做，因為這是一個我們有著非常深厚的聯繫的地方。

Our headquarters are here. We have a large team. And so we probably just see more opportunities here and have more relationships with developers that have longer standing. But it definitely doesn't preclude grant from spending a lot of time trying to find those deals in other target markets of ours.

我們的總部在這裡。我們有一個龐大的團隊。因此，我們可能會在這裡看到更多的機會，並與歷史悠久的開發商建立更多的關係。但這絕對不妨礙格蘭特花費大量時間試圖在我們的其他目標市場中尋找這些交易。

And you mentioned Minneapolis has the second-highest net absorption or had second-highest net absorption last year, which I didn't fully appreciate until you mentioned it. What's driving that demand? I realize there's a lot of supply in that market as well, but what is -- what's driving this?

您提到明尼阿波利斯的淨吸收量位居第二，或者說去年的淨吸收量位居第二，直到您提到這一點我才完全意識到這一點。是什麼推動了這種需求？我意識到該市場也有大量供應，但是什麼推動了這個趨勢？

I mean, there's probably a lot of answers to what's driving it, but I'd say a couple of things and then Grant can jump in here, too. But really strong economy, low unemployment. We have -- Minneapolis has a very good job base, lots of Fortune 500 companies, so the market itself is a little bit more stable. So while we are seeing a good amount of supply here, we have the fundamentals to fill that space and drive absorption.

我的意思是，對於驅動它的原因可能有很多答案，但我想說一些事情，然後格蘭特也可以跳到這裡。但經濟確實強勁，失業率低。我們—明尼阿波利斯擁有非常好的就業基礎，有許多財富 500 強公司，因此市場本身更加穩定。因此，雖然我們在這裡看到大量供應，但我們有基本面來填補這一空間並推動吸收。

I think we've also seen less single-family home starts than we have in the past. So there's been a little bit of shift in permitting from -- if you look at the total multis or housing universe, we have less single-family home communities and a shift into the apartment communities, which is driving some of lack of availability of single-family home options.

我認為我們看到的單戶住宅開工數量也比過去少了。因此，許可方面發生了一些變化——如果你看看整個多戶住宅或住房領域，我們的單戶住宅社區減少了，而轉向了公寓社區，這導致了單身公寓的可用性不足。 -家庭住宅的選擇。

Grant, do you have [something]?

格蘭特，你有嗎[某物]？

Yeah, I would echo Anne's comments on incomes in this market, depending on how you cut it. We consistently rank top 10 in terms of income profile. That income relative to the affordability of renting apartments is very attractive, high presence of medtech, banking, finance, et cetera. Jobs are very prevalent in our market.

是的，我會同意安妮對這個市場收入的評論，這取決於你如何削減它。我們的收入狀況始終名列前十。相對於租屋的負擔能力，這種收入非常有吸引力，醫療科技、銀行、金融等領域的存在率很高。工作機會在我們的市場上非常普遍。

And then just to touch on the supply comments, the supply pipeline in Minneapolis has -- we've seen a taper over recent quarters. So currently, we're sitting on about 4.5% of existing stock under construction. That is down from 6% here over the last couple of quarters, so a measured supply story that again has been tapering.

然後，就供應評論而言，明尼阿波利斯的供應管道在最近幾個季度出現了縮減。目前，我們擁有約 4.5% 的現有在建庫存。這比過去幾季的 6% 有所下降，因此供應量再次減少。

Great. Thank you.

偉大的。謝謝。

Rob Stevenson, Janney.

羅布史蒂文森，珍妮。

Thanks. Good morning. Can you talk about how much of the 3% to 5% same-store revenue growth guidance for '24 is from marking to market rents versus the continued uplift from some of the operational technology and other improvements that you've been instituting within the portfolio?

謝謝。早安.您能否談談 24 年 3% 至 5% 的同店收入成長指引中有多少來自按市場租金定價，與您在產品組合中實施的一些營運技術和其他改進的持續提升相比？

Good morning, Rob. I'll give you the components, and then Anne may chime in on some of the other components. But overall, yes, 4% at the midpoint. 3% is really what's being driven by mark-to-market rents.

早安，羅布。我會給你組件，然後安妮可能會插話一些其他組件。但總體而言，是的，中點為 4%。 3%實際上是由按市價計算的租金推動的。

About 0.5% is being driven by the RUBS rollout, which is now fully complete. So we have about 80% billback the RUBS, and then the remainder is being driven by some of the value-add initiatives. We obviously expect to invest about $25 million this year, but we invested over the course of the year. So the impact on revenue for the year is going to be about 0.5%.

大約 0.5% 是由 RUBS 推出推動的，現已完全完成。因此，我們大約 80% 的費用來自 RUBS，其餘的則由一些增值計劃推動。顯然，我們今年預計投資約 2500 萬美元，但我們的投資是全年進行的。因此，對全年收入的影響約為 0.5%。

And on the technology front -- go ahead, Rob.

在技​​術方面——繼續吧，羅布。

No, no. I was just going to say that was very helpful. Thank you.

不，不。我只是想說這非常有幫助。謝謝。

Yeah, and just on the technology front, we did -- in 2023, I think we really saw some great strides on gaining efficiencies and making sure that we're fully executing on the platform. That work is going to continue. But in our projections, we're not projecting that it's going to materially move anything.

是的，就技術而言，我們確實在 2023 年做到了，我認為我們在提高效率和確保我們在平台上充分執行方面確實取得了一些巨大進步。這項工作將會繼續下去。但在我們的預測中，我們並沒有預測它會實質地改變任何東西。

We do have a couple of initiatives that may provide some cushion and/or outperformance for us, but we're very early on in some of those. So I would say, really, we're -- we feel stabilized on the platform that we implemented over the past two to three years and feel like we're in good shape in using that.

我們確實有一些措施可以為我們提供一些緩衝和/或卓越表現，但我們在其中一些方面還處於起步階段。所以我想說，實際上，我們在過去兩到三年中實施的平台上感到穩定，並且感覺我們在使用該平台方面處於良好狀態。

Okay. That's helpful. And then, can you just give a quick review of your markets? I mean, other than Denver, there's not a lot of markets that you guys have that there's other public peers in, so less data there.

好的。這很有幫助。然後，您能快速回顧一下您的市場嗎？我的意思是，除了丹佛之外，你們所擁有的其他公共同行的市場並不多，所以那裡的數據較少。

I mean, which of these markets are you expecting same-store revenue growth to be above the 3% to 5% guidance for the company overall and which below? Can you just talk a little bit about that as to how we should be thinking about the markets individually?

我的意思是，您預計哪些市場的同店收入成長將高於公司整體 3% 至 5% 的指導值，哪些市場低於？您能否簡單談談我們應該如何單獨考慮市場？

Yeah, that's a good question. One of the -- we are a good data provider on some of those markets. We're the largest owner in a couple of them. As we look to 2024, I think we're going to continue to see some outperformance in Omaha, Nebraska. North Dakota has been performing really well. And then I'd say Minneapolis and Denver kind of coming in the middle of the pack there.

是的，這是一個好問題。其中之一——我們是其中一些市場的優秀數據提供者。我們是其中幾個的最大所有者。展望 2024 年，我認為我們將繼續看到內布拉斯加州奧馬哈的一些出色表現。北達科他州的表現非常出色。然後我會說明尼阿波利斯和丹佛處於中間位置。

A place where we're seeing some softness in what we call the other Mountain West. That would be Rapid City and Billings. They had -- if you recall this massive run-up in rents in '21 into '22, we really started to see that cool last year, and we are seeing that continue to cool off and believe that'll hold through 2024. So I'd say Omaha at the top and then probably Billings, Rapid City at the bottom.

在我們所說的另一個西部山區，我們看到了一些柔軟的地方。那將是拉皮德城和比林斯。如果你還記得 21 世紀到 22 年間租金的大幅上漲，我們去年確實開始看到這種情況很酷，而且我們看到這種情況繼續降溫，並相信這種情況將持續到 2024 年。所以我會說奧馬哈位於頂部，然後可能是比林斯、拉皮德城位於底部。

Okay, and then just Rochester and St. Cloud, are they middle? Bottom? How should we be thinking about those?

好吧，然後只有羅徹斯特和聖克勞德，他們是中間的嗎？底部？我們該如何思考這些？

Yeah, I'd say they're right in the middle. Rochester has had some supply, a little bit of supply there, nothing that has concerned us. And we have come off some great value-add projects there that really raised our renter profile and our customer experience there.

是的，我想說他們就在中間。羅徹斯特有一些供應，那裡有一點供應，沒有什麼讓我們擔心的。我們在那裡完成了一些很棒的增值項目，這些項目確實提高了我們的租戶形象和客戶體驗。

So I think that that'll continue to perform well. And St. Cloud, that portfolio -- as you know, we sold some of the assets out of that this year. So we feel really well positioned there to kind of be right on the average.

所以我認為這將繼續表現良好。還有聖克勞德這個投資組合——如你所知，我們今年出售了其中的一些資產。因此，我們感覺自己的定位非常好，平均而言是正確的。

Okay, that's extremely helpful. And then, Bhairav, when you take a look, where was bad debt for you guys in '23? What do you have baked into the '24 guidance?

好的，這非常有幫助。然後，Bhairav，當你看一下，你們 23 年的壞帳在哪裡？您在 '24 指南中融入了哪些內容？

Sure. With respect to 2023, we were about 25 to 30 basis points, which we consider normalized pre-COVID. And with respect to 2024, we are at the midpoint, projecting about 35 basis points. So kind of sticking around what we experienced in 2023 as we haven't really seen anything that makes us thinks otherwise.

當然。就 2023 年而言，我們的利率約為 25 至 30 個基點，我們認為這是新冠疫情前的正常化水準。就 2024 年而言，我們處於中點，預計約為 35 個基點。所以我們還是堅持 2023 年所經歷的事情，因為我們還沒有真正看到任何讓我們有不同想法的事情。

Okay. And then I guess a similar vein, what did you guys do this year or '23 in terms of unit turnover? And are you expecting any real upticks or downticks in that, given what you're seeing today in terms of the renter profile?

好的。然後我猜想也有類似的情況，今年或 23 年你們在單位營業額方面做了什麼？考慮到您今天所看到的租戶概況，您是否預期這方面會出現真正的上升或下降？

Sure. With respect to unit turnover, we had seen a lot of costs escalating at the end of 2022. With respect to 2023, we were slightly down versus 2022. With respect to 2024, what we are seeing is material prices have been kind of, I would say, normalized in the sense that we can expect some inflationary increases there. And then labor though is running a little bit higher than we would like. So we would still expect a slight increase over 2023. But then 2023 itself was a reduction over 2022. (Multiple speakers)

當然。就單位週轉率而言，我們看到 2022 年底許多成本不斷上升。就 2023 年而言，我們比 2022 年略有下降。就 2024 年而言，我想說的是，我們看到的材料價格已經趨於正常化，因為我們可以預期那裡會出現一些通貨膨脹。不過，勞動力的運作速度比我們希望的還要高一些。因此，我們仍預期 2023 年會略有成長。但 2023 年本身就比 2022 年減少。（多位發言者）

Yeah, we did see a little bit of an uptick during 2023 in resident retention, so just overall had fewer turns in '23 to '22. But our projections do include kind of our -- the standard that fits about 50% of the units will turn during the course of the year.

是的，我們確實看到 2023 年居民保留率略有上升，因此總體而言，23 年至 22 年的輪調人數較少。但我們的預測確實包括——適合約 50% 設備的標準將在今年內發生變化。

And what -- given material labor costs these days, what does a turn typically cost you, ex the downtime?

考慮到如今的物質勞動成本，除了停機時間之外，一次轉彎通常會花費多少成本？

I would say roughly about -- the costs will be about $1,000 of churn thereabouts. Again, from a portfolio perspective, that can differ as you look at different markets. But roughly, that's what we kind of see on an average.

我粗略地說——流失成本約為 1,000 美元。同樣，從投資組合的角度來看，當你觀察不同的市場時，情況可能會有所不同。但粗略地說，這就是我們平均看到的情況。

Okay. That's incredibly helpful. Thanks, guys. Appreciate the time.

好的。這非常有幫助。多謝你們。珍惜時間。

Thank you.

謝謝。

Barry Oxford, Colliers.

巴里牛津，高力國際。

Great. Thanks, guys. One thing I was looking at was same-store expenses being down in 4Q. What can I'd be looking for as it relates to same-store expenses in '24?

偉大的。多謝你們。我關注的一件事是第四季同店支出下降。我可以尋找與 24 年同店支出相關的資訊？

Good morning, Barry. So with respect to 2024, there's two major line items that will be driving our expenses in 2024, one is on-site compensation. And as I said, the labor market is still pretty strong. I mean, although we are in a much better place in 2023 compared to 2022, it's still hard to fill some of those positions. So we do expect that to run slightly above what you would consider normalized or inflationary.

早上好，巴里。因此，就 2024 年而言，有兩項主要項目將推動我們在 2024 年的支出，其中一項是現場補償。正如我所說，勞動市場仍然相當強勁。我的意思是，儘管與 2022 年相比，我們 2023 年的情況要好得多，但其中一些職位仍然很難填補。因此，我們確實預計這一數字將略高於您所認為的正常化或通膨水準。

And then the other line item that is really driving up cost is insurance. Our premiums, year over year, increase by 25% to 30%. That's two-thirds of the insurance line. So those are the two major categories driving year-over-year expense growth.

另一個真正推高成本的項目是保險。我們的保費年增 25% 至 30%。這是保險額度的三分之二。因此，這些是推動支出年增率的兩個主要類別。

Okay, great. And then, what was causing some of those numbers to be negative in some of the cities like Omaha in 4Q?

好的，太好了。那麼，是什麼導致第四季奧馬哈等一些城市的一些數字為負數呢？

Yeah, sure. Some of the negative numbers related to some real estate tax-related accrual adjustments in uncertain years. We have upticks in certain years. We have some credits from appeals. So that's really what's driving some of the credits that you see on a year-over-year basis in Omaha.

好，當然。一些負數與不確定年份的一些與房地產稅相關的應計調整有關。我們在某些​​年份有所上升。我們從上訴中獲得了一些積分。因此，這確實是您在奧馬哈逐年看到的一些積分的推動因素。

The other line item that is also comparing favorably is the non-reimbursable losses, where we really had an uptick in those losses in the fourth quarter of 2022, and they kind of normalized in 2023. So that's what is driving the Q4 '23 versus Q4 '22 comparison.

另一個比較有利的項目是不可償還損失，這些損失在 2022 年第四季確實有所上升，並且在 2023 年趨於正常化。這就是推動 23 年第 4 季與 22 年第 4 季進行比較的原因。

Okay, great. Thanks so much, guys.

好的，太好了。非常感謝，夥計們。

(Operator Instructions) Wes Golladay, Baird.

（操作員說明）Wes Golladay，Baird。

Hey. Good morning, everyone, just a quick question on the Denver market. We're starting to see some slowing out there, the job growth. But then you did make the comment that multifamily, there's fewer, maybe taking share with the fewer single-family starts in one of your markets. Is that happening there as well? Just overall, what are you seeing from the demand side in Denver?

嘿。大家早安，我想問一個關於丹佛市場的簡單問題。我們開始看到就業成長放緩。但隨後您確實發表評論稱，在您的某個市場中，多戶型住宅的數量較少，可能會與較少的單戶型住宅一起分享。那裡也發生這種情況嗎？總體而言，您對丹佛的需求方面有何看法？

We'll have Grant help you out on that one.

我們會讓格蘭特幫你解決這個問題。

So I agree with your job growth comment, have seen some slowing in that market here recently. We do think long term. The demand fundamentals in Denver and Colorado more broadly are very robust and continue to believe that over time, what we've seen in the past decade will continue to play out.

所以我同意你的就業成長評論，最近看到這個市場出現了一些放緩。我們確實有長遠考慮。丹佛和科羅拉多州更廣泛的需求基本面非常強勁，我們仍然相信，隨著時間的推移，我們在過去十年中所看到的情況將繼續發揮作用。

When I think about Denver, a couple of ways from a fundamentals perspective that we think about it. On the supply side, it is our market with the highest levels of existing supply and existing new construction. So I referenced 4.5% in Minneapolis earlier. That would be about 9.5% today in Denver.

當我想到丹佛時，我們從基本面的角度來考慮它的幾種方式。在供應方面，這是我們現有供應和現有新建建築水準最高的市場。所以我之前提到了明尼阿波利斯的 4.5%。今天在丹佛大約是 9.5%。

It may be the case in this environment that all of that supply in that pipeline does not complete, given capital markets and fundamentals headwinds. Concessions is another way that we really focus on. What are we seeing in all of our markets, including Denver? And I would say our concession profile and concession story on the ground in Denver today is very favorable.

在這種環境下，考慮到資本市場和基本面的不利因素，該管道中的所有供應可能無法完成。讓步是我們真正關注的另一種方式。我們在包括丹佛在內的所有市場中看到了什麼？我想說，我們今天在丹佛的特許經營概況和特許經營故事非常有利。

We've been using concessions in very targeted and specific instances today in Denver. That's that one community in our portfolio which is a function of new supply in that submarket. So have seen slowdown in job growth, fundamentals are tapering, but that isn't unique to Denver. That is happening nationwide, and long term believe that the demand profile remains.

今天在丹佛，我們一直在非常有針對性和具體的情況下使用優惠。這就是我們投資組合中的一個社區，它是該子市場新供應的函數。因此，就業成長放緩，基本面正在逐漸減弱，但這並不是丹佛獨有的情況。這種情況正在全國範圍內發生，從長遠來看，需求狀況仍然存在。

Thanks for the time, everyone.

謝謝大家抽出時間。

Thank you. And we have no further questions in the queue at this time, so I would like to hand back over to Anne Olson for any further remarks.

謝謝。目前我們沒有其他問題了，因此我想將問題交還給安妮·奧爾森以徵求進一步意見。

Thanks, everyone, for joining, and have a great day.

謝謝大家的加入，祝您有美好的一天。

This concludes today's call. Thank you all for joining. You may now disconnect your lines.

今天的電話會議到此結束。感謝大家的加入。現在您可以斷開線路。