Elme Communities (ELME) 2022 Q3 法說會逐字稿

Welcome to the Elm Communities Third Quarter Earnings Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Amy Hopkins, Vice President, Investor Relations. Amy, please go ahead.

歡迎參加 Elm Communities 第三季度收益電話會議。提醒一下，今天的通話正在錄音。現在，我想將電話轉給投資者關係副總裁艾米·霍普金斯 (Amy Hopkins)。艾米，請繼續。

Good morning, everyone, and thank you for joining us for our third quarter earnings call. On the call with me today are Paul McDermott, President and Chief Executive Officer; Steve Riffee, Executive Vice President and Chief Financial Officer; Susan Gerock, Senior Vice President and Chief Information Officer; Grant Montgomery, Vice President and Head of Research; Drew Hammond, Vice President, Chief Accounting Officer and Treasurer; and Steven Freishtat, Vice President, Finance.

大家早上好，感謝您參加我們的第三季度財報電話會議。今天與我通話的是總裁兼首席執行官 Paul McDermott； Steve Riffee，執行副總裁兼首席財務官； Susan Gerock，高級副總裁兼首席信息官；格蘭特·蒙哥馬利，副總裁兼研究主管；德魯·哈蒙德 (Drew Hammond)，副總裁、首席會計官兼財務主管；和財務副總裁 Steven Freishtat。

Today's event is being webcast through the Investors section of our website at elmcommunities.com, and a replay will be available this afternoon. We will have a slide presentation in conjunction with our prepared remarks, and those slides will also be available on our webcast replay.

今天的活動將通過我們網站 elmcommunities.com 的投資者部分進行網絡直播，今天下午將進行重播。我們將結合準備好的發言進行幻燈片演示，這些幻燈片也將在我們的網絡廣播重播中提供。

Before we begin our prepared remarks, I would like to remind everyone that this conference call contains forward-looking statements that involve known and unknown risks and uncertainties, which may cause actual results to differ materially. We undertake no duty to update them as actual events unfold. We refer to certain of these risks in our SEC filings. Reconciliations of the GAAP and non-GAAP financial measures discussed on this call are available in our most recent earnings press release and financial supplement, which was distributed yesterday and can be found on the Investors page of our website. And with that, I'd like to turn the call over to Paul.

在我們開始準備好的發言之前，我想提醒大家，本次電話會議包含前瞻性陳述，涉及已知和未知的風險和不確定性，可能導致實際結果存在重大差異。我們不承擔在實際事件發生時更新它們的義務。我們在向 SEC 提交的文件中提到了其中的某些風險。本次電話會議中討論的 GAAP 和非 GAAP 財務指標的調節表可在我們昨天發布的最新收益新聞稿和財務補充資料中找到，並且可以在我們網站的投資者頁面上找到。說到這裡，我想把電話轉給保羅。

Thank you, Amy. Good morning, everyone, and thank you for joining our third quarter 2022 earnings call. Much has changed in just a few months both in the broader financial markets as the Fed continues to try to control rising inflation and for our company as we break from our path and move on from being a Wash REIT.

謝謝你，艾米。大家早上好，感謝您參加我們的 2022 年第三季度財報電話會議。短短幾個月內，隨著美聯儲繼續努力控制不斷上升的通脹，更廣泛的金融市場發生了很大變化，而我們公司也改變了原有的道路，不再是華盛頓房地產投資信託基金。

Becoming Elm Communities represents the start of a new trajectory, positioning us to capitalize on the opportunity to be a differentiated provider of multifamily homes. It marks the culmination of our multifamily portfolio transformation, geographic expansion and technology forward infrastructure transformation.

成為 Elm 社區代表著新軌蹟的開始，使我們能夠利用這個機會，成為差異化的多戶住宅提供商。它標誌著我們多戶型投資組合轉型、地域擴張和技術基礎設施轉型的頂峰。

I am pleased to report a very strong third quarter, which Steve will discuss in more detail. But first, I'd like to cover the progress that we have made in our transformation and how the launch of our resident-focused brand fits into the execution of our growth and operational strategy. We have made the break from a business-to-business commercial company and become a business-to-consumer provider of apartment homes. We focus on the largest and most underserved renter cohorts.

我很高興地報告第三季度的業績非常強勁，史蒂夫將對此進行更詳細的討論。但首先，我想介紹一下我們在轉型方面取得的進展，以及我們以居民為中心的品牌的推出如何適應我們的增長和運營戰略的執行。我們已經擺脫了企業對企業的商業公司，成為企業對消費者的公寓住宅提供商。我們專注於規模最大且服務最匱乏的租戶群體。

In fact, 97% of our apartment homes are affordable to households that earn the area median income. 20% of our apartment homes are now located in the Sunbelt. We're targeting economies with diverse, innovative industries that drive outsized job creation, wage growth and end migration. Our portfolio's allocation in the Atlanta and Washington markets enables our participation in growth while also providing relative insulation during economic downturns.

事實上，我們 97% 的公寓對於該地區中等收入的家庭來說是負擔得起的。我們 20% 的公寓現在位於陽光地帶。我們的目標是擁有多元化創新產業的經濟體，這些產業能夠創造大量就業機會、工資增長並結束移民。我們的投資組合在亞特蘭大和華盛頓市場的配置使我們能夠參與增長，同時在經濟低迷時期提供相對隔離。

Atlanta's regional economy is projected to fare well in the face of increased macroeconomic headwinds in 2023, maintaining job growth of approximately 1% and positive economic traction according to Oxford Economics. Longer term, job and GDP growth of 1.8% and 2.4% from 2022 to 2026 are projected to continue Atlanta's track record of national outperformance.

牛津經濟研究院 (Oxford Economics) 表示，面對 2023 年宏觀經濟逆風加劇，亞特蘭大地區經濟預計將表現良好，保持約 1% 的就業增長和積極的經濟牽引力。從長遠來看，預計 2022 年至 2026 年，亞特蘭大的就業和 GDP 增長分別為 1.8% 和 2.4%，將延續亞特蘭大在全國表現優異的記錄。

Washington's job growth in 2023 is also projected to continue at pace, growing 1.4% according to Oxford Economics, continuing its long history of countercyclical outperformance during periods of national economic stress. Both markets are projected to grow more than the national average in 2023.

根據牛津經濟研究院 (Oxford Economics) 的數據，華盛頓 2023 年的就業增長預計將繼續保持高速增長 1.4%，延續其在國民經濟壓力時期反週期表現優異的悠久歷史。預計到 2023 年，這兩個市場的增長將超過全國平均水平。

We've targeted a deep, underserved and undervalued base of mid-market demand. Mid-market renters comprise the largest share of apartment demand in each of our markets, yet only a limited share of new supply is affordable for these renters. Thus, the demand is deep and competition from new supply is limited.

我們的目標是深入、服務不足且被低估的中端市場需求基礎。中端市場租戶在我們每個市場的公寓需求中所佔份額最大，但這些租戶只能負擔得起有限份額的新增供應。因此，需求旺盛，新供應的競爭有限。

Mid-market renters are underserved on multiple levels as the quality and maintenance level of physical assets, service and overall resident experience in this apartment market segment is often of a lower caliber. Additionally, we see that they are undervalued as residents at these price points, see a lower standard of care for their space and received a lower level of respect. In turn, residents place a lower level of trust in service providers.

中端市場的租戶在多個層面上都得不到充分的服務，因為該公寓細分市場的實物資產、服務和整體住戶體驗的質量和維護水平往往較低。此外，我們發現，在這些價位上，他們作為居民被低估，他們的空間護理標準較低，受到的尊重也較低。反過來，居民對服務提供商的信任度也較低。

We see the opportunity to elevate what a home can be for our residents and our new name represents a combination of the words Elevate and home. Our new mission is to elevate the value living experience and create a place our residents are proud to call home by continuously focusing on service, efficiency and innovation. Our vision is to be the most trusted owner and operator of residential communities by elevating the standard for value living.

我們看到了為居民提升住宅品質的機會，我們的新名稱代表了“Elevate”和“home”這兩個詞的組合。我們的新使命是通過不斷關注服務、效率和創新，提升價值生活體驗，創造一個讓居民引以為豪的家。我們的願景是通過提升價值生活標準，成為最值得信賴的住宅社區業主和運營商。

Our clarified vision and mission statement support our strategy to deliver what the deepest cohorts in the apartment market need and in turn, to create value for our stakeholders. Delivering a superior value living experience starts with making the most of every dollar spent at our community. It means providing customer service that goes beyond responding to resident inquiries. It means anticipating the needs of our residents and empowering our teams to add value with every interaction. It means knowing what our residents value and providing amenities that meet their needs.

我們明確的願景和使命宣言支持我們的戰略，即滿足公寓市場最深層人群的需求，進而為我們的利益相關者創造價值。提供超值的生活體驗首先要充分利用在我們社區花費的每一分錢。這意味著提供的客戶服務不僅僅是回复居民的詢問。這意味著預測我們居民的需求，並讓我們的團隊能夠在每次互動中增加價值。這意味著了解我們的居民的價值並提供滿足他們需求的設施。

It means investing in smart home and building automation that is impactful and makes sense at mid-market price points. It means ensuring that on-time rent payments are reported to the credit bureaus to help build resident credit scores. It means delivering industry-leading environmental performance for value-oriented community. All of this means we are committed to producing strong recurring results for our investors.

這意味著投資於具有影響力且在中端市場價位上有意義的智能家居和樓宇自動化。這意味著確保按時向信用局報告租金支付情況，以幫助建立居民信用評分。這意味著為價值導向的社區提供行業領先的環境績效。所有這一切意味著我們致力於為投資者創造強勁的經常性業績。

While redefining our mission and launching our new resident-focused brand are important to executing our growth and operational strategy, the work that was done to get us where we are today goes much deeper than our brand ethos. Becoming Elm communities marks the culmination of a multiyear effort to transform nearly every aspect of our business.

雖然重新定義我們的使命和推出以居民為中心的新品牌對於執行我們的增長和運營戰略非常重要，但為實現今天的目標所做的工作比我們的品牌精神要深入得多。成為 Elm 社區標誌著我們多年來為改變業務的幾乎各個方面所做的努力的頂峰。

I would now like to turn it over to Susan Jira, our Chief Information Officer and key leader in our infrastructure transformation to talk about our progress and how the changes that we've made position us to deliver greater value for our stakeholders.

現在我想請我們的首席信息官兼基礎設施轉型關鍵領導者 Susan Jira 來談談我們的進展以及我們所做的變革如何使我們能夠為利益相關者提供更大的價值。

Thanks, Paul, and good morning, everyone. We have spent the past year designing a technology forward, streamlined, efficient, cost-effective and highly scalable operating model and technology platform that will deliver a better experience for our residents as well as efficiencies and capabilities that will drive better value for our stakeholders.

謝謝保羅，大家早上好。在過去的一年裡，我們一直在設計一種技術先進、精簡、高效、具有成本效益和高度可擴展的運營模式和技術平台，為我們的居民提供更好的體驗，並提高效率和能力，為我們的利益相關者帶來更好的價值。

Efficiency is critical to making the most of every dollar we and our residents spend. We prioritized efficiency when making operational decisions during our infrastructure transformation from maximizing our operating margins to making sure we are doing everything we can with the resources we have to provide ease of living for our residents. We are focused on improving what makes a difference in what we can provide most competitively.

效率對於充分利用我們和居民花的每一塊錢至關重要。在基礎設施轉型期間，我們在製定運營決策時優先考慮效率，從最大化運營利潤到確保我們盡一切努力利用我們擁有的資源為居民提供便利的生活。我們專注於改進我們能夠提供的最具競爭力的產品。

So what have we achieved thus far? First, our ongoing focus on revenue maximization through daily pricing strategies are achieving better rents than we underwrote in our acquisition portfolio. Second, given that we already control all our leasing and portfolio management in-house, onboarding the first set of communities has only strengthened our ability to manage leasing decisions by removing the middleman and providing a closer connection with our community teams.

那麼到目前為止我們取得了什麼成果？首先，我們持續關注通過日常定價策略實現收入最大化，從而實現了比我們在收購組合中承保的更好的租金。其次，鑑於我們已經在內部控制了所有租賃和投資組合管理，加入第一批社區只會通過消除中間人並與我們的社區團隊提供更緊密的聯繫來增強我們管理租賃決策的能力。

Third, we've recruited outstanding new talent, including key portfolio level operational positions. Our team has already begun to successfully onboard our communities. Fourth, we have harnessed the power of data as we implemented our new and improved technology platform. by providing access to more data through our reorganized streamlined infrastructure and technology platform. We've reduced friction, improved our analytical capabilities and better positioned our company to execute on our mission of raising the bar for mid-market price points while growing profitably.

第三，我們招募了優秀的新人才，包括關鍵的投資組合層面的運營職位。我們的團隊已經開始成功融入我們的社區。第四，我們在實施新的和改進的技術平台時利用了數據的力量。通過我們重組後的簡化基礎設施和技術平台提供對更多數據的訪問。我們減少了摩擦，提高了分析能力，使我們的公司能夠更好地執行我們的使命，即提高中端市場價格點的標準，同時實現利潤增長。

The significant changes that we have implemented has set us up to deliver growth. And while we are already seeing benefits of our transformation, we believe that the real payoff is still ahead of us. I would now like to turn the call back to Paul.

我們實施的重大變革使我們能夠實現增長。雖然我們已經看到了轉型帶來的好處，但我們相信真正的回報仍在前方。我現在想把電話轉回給保羅。

Thank you, Susan. As Susan highlighted, our infrastructure transformation positions us to capitalize on the opportunity to be a differentiated provider of multifamily homes. We are targeting a deep, solid and underserved base of mid-market demand. This strategy is already delivering remarkable results, and we expect to generate strong returns for investors as we continue our geographic expansion into new markets over time.

謝謝你，蘇珊。正如蘇珊強調的那樣，我們的基礎設施轉型使我們能夠利用這個機會，成為差異化的多戶住宅提供商。我們的目標是建立一個深厚、堅實且服務不足的中端市場需求基礎。這一戰略已經取得了顯著的成果，隨著時間的推移，隨著我們繼續向新市場進行地域擴張，我們預計將為投資者帶來豐厚的回報。

With that said, investment discipline is foundational for this company. And as the Fed's most recent shift to more restrictive policies added another layer of uncertainty, we pivoted and ceased negotiations to acquire 2 assets. We do not believe that many sellers have realistically adjusted their price expectations to the shifting macro outlook. And while we have the capacity to acquire $125 million of additional multifamily communities, we will remain prudent about growing further in this environment until the capital market conditions improve.

話雖如此，投資紀律是這家公司的基礎。由於美聯儲最近轉向更嚴格的政策，增加了另一層不確定性，我們轉向並停止了收購兩項資產的談判。我們認為，許多賣家並未根據不斷變化的宏觀前景實際調整其價格預期。雖然我們有能力收購 1.25 億美元的額外多戶社區，但在資本市場狀況改善之前，我們將在這種環境下進一步發展保持謹慎。

I would now like to turn the call over to Steve to discuss our operating trends, third quarter performance and growth outlook.

我現在想將電話轉給史蒂夫，討論我們的運營趨勢、第三季度業績和增長前景。

Thank you, Paul, and good morning, everyone. Today, I would like to cover the operating trends that we are experiencing and how those trends and the growth that we have captured to date provide us with confidence in our 2023 outlook. I will also cover our third quarter results, guidance for the remainder of 2022 and updates to our guidance for 2023.

謝謝你，保羅，大家早上好。今天，我想介紹一下我們正在經歷的運營趨勢，以及這些趨勢和我們迄今為止所取得的增長如何讓我們對 2023 年的前景充滿信心。我還將介紹我們的第三季度業績、2022 年剩餘時間的指導以及 2023 年指導的更新。

I will start with touching on highlights for our growth outlook. As Paul and Susan discussed, changing our company name, unveiling our mid-market resident-focused brand and beginning to bring our communities in-house, culminates in the start of a new trajectory for our company. All of this coincides with a record growth outlook.

我將首先談談我們增長前景的亮點。正如保羅和蘇珊所討論的，改變我們的公司名稱，推出我們以中端市場居民為中心的品牌，並開始將我們的社區納入內部，最終為我們公司開啟了新的發展軌跡。所有這些都與創紀錄的增長前景相吻合。

We expect to deliver historic NOI and core FFO growth in 2023, with same-store NOI growth of 10% at the midpoint of our guidance range and core FFO growth of 14% at the midpoint, the strongest in over 20 years. We have several reasons to feel confident in our ability to deliver this growth and to continue to deliver solid results beyond 2023.

我們預計到 2023 年將實現歷史性的 NOI 和核心 FFO 增長，其中同店 NOI 增長為我們指導範圍中點的 10%，核心 FFO 增長為 14% 的中點，為 20 多年來的最強勁水平。我們有幾個理由對我們實現這一增長並在 2023 年之後繼續取得穩健成果的能力充滿信心。

First, our focus on value-oriented price points provide stability across outperform Class A in both of our operating markets. Second, as Paul highlighted, our portfolio's allocation to the Washington Metro provides stability during downturns. And the Atlanta region is projected to fare well in the event of increased macroeconomic headwinds in 2023. Third, we have a well-positioned balance sheet with low leverage and strong liquidity.

首先，我們對以價值為導向的價格點的關注為我們的兩個運營市場提供了優於 A 類產品的穩定性。其次，正如保羅強調的那樣，我們的投資組合對華盛頓地鐵的配置在經濟低迷時期提供了穩定性。如果 2023 年宏觀經濟逆風加劇，亞特蘭大地區預計將表現良好。第三，我們的資產負債表狀況良好，槓桿率較低，流動性強勁。

We've prioritized the strength of our balance sheet throughout the transformative capital recycling we completed as well as through the pandemic and maintain our investment-grade debt rating. It will continue to serve us well as we knew we had to be prudent through all we executed.

在我們完成的變革性資本回收以及大流行期間，我們優先考慮資產負債表的實力，並維持我們的投資級債務評級。它將繼續為我們提供良好的服務，因為我們知道我們必須謹慎執行所有操作。

Fourth, we anticipate operating cost efficiencies in 2024 after our community onboarding process is complete. These efficiencies should provide us with another gear for increasing profitability beyond the near horizon and have not been factored into our record growth expectations for 2023 as we complete the internalization process. All in all, we believe that we are well positioned to grow even further should the capital markets backdrop improve.

第四，我們預計在社區加入流程完成後，到 2024 年將實現運營成本效率。這些效率應該為我們提供另一種手段，以在短期內提高盈利能力，但在我們完成內部化過程時，這些效率並未計入我們對 2023 年創紀錄增長的預期中。總而言之，我們相信，如果資本市場環境改善，我們將有能力進一步發展。

In keeping with historical trends, the third quarter was our highest volume leasing quarter, and lease rate growth remained in the double digits throughout the quarter following the early August peak. Effective new lease rate growth was 10.5% and effective renewal asset growth was 10.1%, which went to 10.3% for the same-store move-ins that took place during the third quarter.

與歷史趨勢保持一致，第三季度是我們租賃量最高的季度，繼八月初的峰值之後，整個季度的租賃率增長保持在兩位數。有效新租賃率增長率為 10.5%，有效續租資產增長率為 10.1%，第三季度同店遷入的增長率達到 10.3%。

For non-same-store move-ins that took place during the third quarter, effective new lease rate growth was 13.8% and effective renewal lease rate growth was 18.4%, which went to 16.3%. Overall, we captured very strong lease rate performance, which will carry over into 2023. Lease rate growth in October has moderated, but remains historically high, with effective blended lease rate growth of 7.1% for our same-store portfolio and 9.7% for our non-same-store portfolio.

對於第三季度發生的非同店入住，有效新租率增長率為 13.8%，有效續租率增長率為 18.4%，升至 16.3%。總體而言，我們取得了非常強勁的租賃率表現，並將延續到2023 年。 10 月份的租賃率增長有所放緩，但仍處於歷史高位，我們的同店組合的有效混合租賃率增長了7.1 %，我們的同店組合的有效混合租賃率增長了9.7%。非同店組合。

October traffic and application volumes reflect solid demand for our value-oriented community. We are currently sending out renewal rates of 10% to 12% on average with high renewal acceptance rates indicating that our pricing power remains strong overall, given the significant growth in market rents in our regions.

十月的流量和申請量反映了對我們以價值為導向的社區的強勁需求。目前，我們的平均續租率為 10% 至 12%，較高的續租接受率表明，考慮到我們所在地區市場租金的顯著增長，我們的定價能力總體上仍然強勁。

Same-store occupancy averaged a strong 95.6% during the quarter end and increased to 95.7% post quarter. Retention was 60% during the quarter, which was in line with a year ago and above our historical average. Our revenue maximization strategy prioritizes lease rate capture during the busiest leasing months, and we are now focused on maintaining occupancy as we head into the winter months.

季末同店平均入住率高達 95.6%，季後增至 95.7%。本季度的留存率為 60%，與一年前持平，高於我們的歷史平均水平。我們的收入最大化策略優先考慮在最繁忙的租賃月份期間獲取租賃率，現在我們的重點是在進入冬季時保持入住率。

Strong demand and retention support a healthy forward occupancy trend as we head into the winter months. Due to the rising cost of homeownership, our renewal and retention rates improved, while move-outs related to home purchases represented the most notable drop compared to the prior year and sequential period. The percentage of same-store move-outs related to home purchases declined by over 5% year-over-year and nearly 4% on a sequential basis.

隨著冬季的到來，強勁的需求和保留率支持了健康的入住趨勢。由於住房擁有成本不斷上升，我們的續約率和保留率有所提高，而與購房相關的遷出率與上一年和上一季度相比下降最為顯著。與購房相關的同店遷出比例同比下降超過 5%，環比下降近 4%。

Looking forward, we are positioned with historically high embedded growth, which we expect will drive outsized revenue and NOI growth in 2023. Our mid-single-digit earn-in and our loss to lease of over 8% as of September 30, provide confidence in our outlook for rent and NOI growth as the market environment shifts from the very strong trends that we are experiencing today.

展望未來，我們的嵌入增長處於歷史最高水平，我們預計這將在2023 年推動收入和NOI 的大幅增長。截至9 月30 日，我們的盈利為中個位數，租賃損失超過8%，這為我們提供了信心隨著市場環境從我們今天所經歷的強勁趨勢轉變，我們對租金和 NOI 增長的展望。

We are on track to deliver same-store multifamily NOI growth of 10% at the midpoint of our guidance range and stronger annualized growth for the 3 Atlanta communities acquired this year, with the vast majority of that growth already embedded in our portfolio.

我們有望在我們的指導範圍中點實現同店多戶型 NOI 增長 10%，並為今年收購的 3 個亞特蘭大社區實現更強勁的年化增長，其中絕大多數增長已經納入我們的投資組合中。

On the expense side, we believe we've conservatively incorporated additional inflation pressure in our 2023 expectation on top of the level that we're incurring in 2022. Our expectations for greatest cost pressure are soon to be in non-control expenses driven by higher real estate taxes and utility costs.

在費用方面，我們認為，除了2022 年的水平之外，我們還保守地將額外的通脹壓力納入2023 年的預期中。我們對最大成本壓力的預期很快將出現在較高成本驅動的非控制費用中。房地產稅和公用事業成本。

Additionally, we assume that payroll and repairs and maintenance expenses, which represent the largest components of our controllable expenses will increase further due to ongoing inflationary expectations. We anticipate that our ability to implement expense controls will improve over the course of the year after our properties are fully onboarded, plus operational and other expense controls should have a larger impact on 2024. This provides us with confidence in our growth outlook.

此外，我們假設，由於持續的通脹預期，工資、維修和維護費用（我們可控費用的最大組成部分）將進一步增加。我們預計，在我們的物業全面投入使用後，我們實施費用控制的能力將在一年內得到提高，加上運營和​​其他費用控制應該會對2024 年產生更大的影響。這讓我們對我們的增長前景充滿信心。

Now moving on to renovations. During the third quarter, we renovated approximately 100 units for a return on investment of a little over 13%, excluding the rent growth that we achieved on comparable unrenovated units. And if you included total rent increases in your ROI, it would look more like 22%.

現在繼續進行裝修。第三季度，我們翻新了大約 100 個單元，投資回報率略高於 13%，不包括我們在可比未翻新單元上實現的租金增長。如果將總租金增長計入投資回報率，則看起來更像是 22%。

While we expect to be closer to our historical renovation run rate of approximately 600 units per year in 2023. Our renovation program offers flexibility to change the pace as the environment shifts. Over the past year, while market rent growth has been at record-setting levels, we've eased off our pace of renovations, benefiting from double-digit rent growth and preserving renovation opportunities for when market rent growth reverts towards historical levels.

雖然我們預計到 2023 年將更接近每年約 600 套的歷史翻新運行率。我們的翻新計劃提供了隨著環境變化而改變節奏的靈活性。在過去的一年裡，雖然市場租金增長一直處於創紀錄的水平，但我們已經放慢了裝修步伐，受益於兩位數的租金增長，並在市場租金增長恢復到歷史水平時保留了裝修機會。

I will now cover our third quarter results, which were in line with our expectations for stronger rent growth momentum in the second half of this year. Core FFO was $0.23 per diluted share, reflecting a year-over-year increase of 15%, driven by strong growth in rental income. Multifamily same-store NOI grew 10.4% over the prior year due to higher base rent and lower concessions, partially offset by higher repairs and maintenance and payroll expenses.

我現在將介紹我們的第三季度業績，該業績符合我們對今年下半年租金增長勢頭強勁的預期。受租金收入強勁增長的推動，核心 FFO 攤薄後每股收益為 0.23 美元，同比增長 15%。由於基本租金上漲和優惠減少，多戶同店 NOI 比上年增長 10.4%，但部分被較高的維修和保養費用以及工資支出所抵消。

Third quarter repairs and maintenance expenses were higher in part due to increased turnover compared to the prior year period. We expect full year same-store multifamily operating expenses to increase by approximately 5% overall. We expect multifamily same-store NOI growth to accelerate in the fourth quarter because of the very strong lease rate growth we captured during the summer leasing season. Average effective monthly rent per home for the quarter increased 10.6% compared to the prior year period on a same-store basis and over 3.5% sequentially.

第三季度的維修和保養費用較高，部分原因是營業額較上年同期增加。我們預計全年同店多戶型運營支出總體將增長約 5%。我們預計多戶同店 NOI 增長將在第四季度加速，因為我們在夏季租賃季節捕捉到了非常強勁的租賃率增長。本季度每戶平均有效月租金較去年同期同店增長 10.6%，環比增長超過 3.5%。

Again, the acceleration in growth reflects the impact of the very strong lease rate growth we captured during our busiest summer leasing months. Other NOI, which represents Watergate 600, grew 6.2% in the third quarter compared to the prior year, driven by higher rental and parking income. Watergate 600 has a high-quality institutional tenant base and a 7-year weighted average lease term.

同樣，增長的加速反映了我們在最繁忙的夏季租賃月份期間捕獲的非常強勁的租賃率增長的影響。受租金和停車收入增加的推動，代表 Watergate 600 的其他 NOI 在第三季度比去年同期增長了 6.2%。 Watergate 600擁有優質的機構租戶基礎和7年的加權平均租賃期限。

Now, turning to guidance. First, I will point out that we are confident that our growth is underway, and therefore, we pre-released 2023 guidance on September 27. I will not reiterate all those points, and they can be found in our press release, but I will point out the following key highlights of our 2023 outlook.

現在，轉向指導。首先，我要指出，我們對我們的增長正在進行充滿信心，因此，我們於9 月27 日預先發布了2023 年指導。我不會重申所有這些要點，它們可以在我們的新聞稿中找到，但我會指出我們 2023 年展望的以下主要亮點。

Core FFO for 2023 is expected to range from $0.96 to $1.04 per fully diluted share, which implies approximately 14% growth year-over-year based on the midpoint of the 2022 and 2023 core FFO guidance ranges, the highest since 2000. We expect most of this growth to be driven by rent growth, much of which has already been captured in our existing leases which supports our ability to grow our dividend if we make that capital allocation decision to do so in the future.

2023 年核心FFO 預計將在每股完全稀釋每股0.96 美元至1.04 美元之間，這意味著基於2022 年和2023 年核心FFO 指導範圍的中點，同比增長約14%，為2000 年以來的最高水平。我們預計這種增長的驅動力是租金增長，其中大部分已包含在我們現有的租賃中，如果我們將來做出資本配置決定，這將支持我們增加股息的能力。

Same-store multifamily NOI growth is expected to range from 9% to 11%, which reflects year-over-year growth of 10% at the midpoint, further building on the double-digit NOI growth expected in the second half of 2022. Non-same-store multifamily NOI is expected to range from $12.75 million to $13.75 million in 2023, which now excludes the impact of the prior 2022 assumed acquisitions guidance.

同店多戶型 NOI 增長預計在 9% 至 11% 之間，中間值同比增長 10%，進一步鞏固了 2022 年下半年預計的兩位數 NOI 增長。 - 2023 年，同店多戶型NOI 預計在1,275 萬美元至1,375 萬美元之間，目前不包括先前假設的2022 年收購指導的影響。

While this guidance range does not reflect the impact of potential acquisitions, we have more than $650 million of availability on our line of credit as of quarter end, and we are running at lower than our targeted leverage levels. We will continue to evaluate acquisition opportunities in our target markets, and we'll pursue further acquisitions when they create additional value for our shareholders.

雖然這一指導範圍並未反映潛在收購的影響，但截至季度末，我們的可用信貸額度超過 6.5 億美元，而且我們的槓桿水平低於我們的目標槓桿水平。我們將繼續評估目標市場的收購機會，當它們為我們的股東創造額外價值時，我們將尋求進一步的收購。

G&A, net of core adjustments is expected to range from $26.25 million to $27.25 million, which reflects a small year-over-year increase of less than 2% at the respective midpoints due to temporary costs associated with transitioning our community level operations in-house. We expect G&A to decline in 2024 and then to remain stable as we scale our portfolio when the time is right to do so.

扣除核心調整後的一般行政費用預計在 2,625 萬美元至 2,725 萬美元之間，這反映了由於與內部社區層面業務轉型相關的臨時成本，相應中點同比小幅增長不到 2% 。我們預計 G&A 將在 2024 年下降，然後隨著我們在適當的時機擴大投資組合而保持穩定。

With that said, I will also update our outlook for the balance of the year. We are reiterating the midpoint and tightening our '22 core FFO guidance range of $0.87 to $0.89 per share. We are reiterating the midpoint and tightening our full year same-store multifamily NOI growth guidance to 8.75% to 9.25%. At the midpoint, this represents 11.5% NOI growth for the fourth quarter. NOI growth for same-store and Trove combined is expected to be between 12.5% and 13%. We are reiterating the midpoint and tightening our guidance range for nonsame-store multifamily NOI to be between $22.25 million and $22.75 million. Other same-store NOI, which consists solely of Watergate 600 is expected to range from $13.25 billion to $13.75 million.

話雖如此，我還將更新我們對今年剩餘時間的展望。我們重申中點，並將 22 年核心 FFO 指導範圍收緊至每股 0.87 美元至 0.89 美元。我們重申中點，並將全年同店多戶型 NOI 增長指引收緊至 8.75% 至 9.25%。按中點計算，這代表第四季度 NOI 增長 11.5%。同店和 Trove 合計的 NOI 增長預計在 12.5% 至 13% 之間。我們重申了中點，並將非同店多戶型 NOI 的指導範圍收緊至 2,225 萬美元至 2,275 萬美元之間。僅由 Watergate 600 組成的其他同店 NOI 預計在 132.5 億美元至 1375 萬美元之間。

Our FFO guidance range assumes that no further acquisitions are completed this year compared to prior guidance, which assumed $125 million of acquisitions. This adjustment did not impact our 2022 or our 2023 core FFO guidance. Incorporating our updated assumption regarding acquisitions, we expect our net debt to adjusted EBITDA to be below 5x at year-end.

我們的 FFO 指導範圍假設今年不會完成進一步的收購，而之前的指導則假設收購金額為 1.25 億美元。此次調整不會影響我們的 2022 年或 2023 年核心 FFO 指導。結合我們關於收購的最新假設，我們預計年底調整後的 EBITDA 淨債務將低於 5 倍。

G&A net of core adjustments for severance and structuring costs is now expected to range between $26 million and $26.5 million, which reflects a slight increase in the midpoint. Our G&A guidance excludes the impact of transformation investments for our future platform and our full integration, which we now expect to be approximately $10 million, a decline of $1 million compared to our prior guidance.

扣除遣散費和結構成本的核心調整後的一般管理費用預計在 2600 萬美元至 2650 萬美元之間，反映出中點略有增加。我們的 G&A 指導不包括轉型投資對我們未來平台和全面整合的影響，我們現在預計約為 1000 萬美元，比我們之前的指導減少了 100 萬美元。

Interest expense is now expected to range between $24.5 million and $25 million, which is lower than our prior guidance due to the removal of our previous $125 million acquisition assumption during the second half of the year.

目前，利息支出預計在 2450 萬美元至 2500 萬美元之間，低於我們之前的指導，因為我們取消了之前下半年 1.25 億美元的收購假設。

We expect our core AFFO payout ratio for the year to be in the mid-70s, and we are establishing an AFFO growth profile that should provide us with additional flexibility to grow the dividend. And with that, I will now turn the call back to Paul.

我們預計今年核心 AFFO 派息率將在 70 多歲左右，我們正在建立 AFFO 增長概況，這將為我們增加股息提供額外的靈活性。現在，我將把電話轉回給保羅。

Thank you, Steve. Becoming Elm communities represents much more than just a name change. It's the start of a new growth and value creation trajectory. We are now in the final phase of our infrastructure transformation and have successfully begun transitioning property level operations in-house. We are delivering historical growth, have a strong balance sheet, a revamped operating platform and a clear strategy and mission, meeting the needs of the deepest renter cohorts.

謝謝你，史蒂夫。成為 Elm 社區不僅僅意味著更名。這是新的增長和價值創造軌蹟的開始。我們現在正處於基礎設施轉型的最後階段，並已成功開始內部物業層面運營的轉型。我們正在實現歷史性增長，擁有強大的資產負債表、改進的運營平台以及明確的戰略和使命，滿足最深層租戶群體的需求。

Yet we are trading at one of the highest implied cap rates. The tailwinds we pursued in our transformation support strong growth over the coming years. While the value we created is currently being masked by the challenging macro environment, we are well positioned given our geographic mix and mid-market renter focus, and we are confident in our ability to continue to deliver profitable growth. Now operator, I'd like to open it up for questions.

然而，我們的隱含上限利率是最高的之一。我們在轉型中追求的順風車支持未來幾年的強勁增長。雖然我們創造的價值目前被充滿挑戰的宏觀環境所掩蓋，但考慮到我們的地理組合和中端市場租戶的關注，我們處於有利地位，並且我們對繼續實現盈利增長的能力充滿信心。現在接線員，我想打開它來提問。

(Operator Instructions) Your first question for today is coming from Anthony Paolone with JPMorgan.

（操作員說明）今天您的第一個問題來自摩根大通的 Anthony Paolone。

I guess first question is, you mentioned in the press release about evaluating opportunities that will create additional value, but also talked about not doing acquisitions. So can you just maybe elaborate a bit on what some of the other if there are just other things you're considering or what those might be?

我想第一個問題是，您在新聞稿中提到評估將創造額外價值的機會，但也談到不進行收購。那麼，如果您正在考慮其他事情，或者這些事情可能是什麼，您能否詳細說明一下其他一些事情？

Tony, it's Paul. When we talked about the acquisitions or the lack thereof going into the fourth quarter, we've talked to a number of different investors. And what we're seeing out there and even our levered competitors, there's really a lot of pricing and yield discovery taking place.

托尼，是保羅。當我們談論第四季度的收購或缺乏收購時，我們與許多不同的投資者進行了交談。我們看到，甚至我們的槓桿競爭對手，確實有很多定價和收益發現正在發生。

And as for our team, we're repricing risk. We are moderating some of our growth assumptions. We talked to the levered folks that they're experiencing obviously higher interest rates. They're seeing their leverage decrease by 5% to 10%. And we're also seeing folks increasing the residual cap rate on the back end by plus or minus 50 basis points.

至於我們的團隊，我們正在重新定價風險。我們正在調整一些增長假設。我們與槓桿人士交談，他們的利率明顯升高。他們發現自己的槓桿率下降了 5% 到 10%。我們還看到人們將後端的剩餘上限利率提高了正負 50 個基點。

Interestingly, also, we're seeing a lot of folks shy away from large deals. We're seeing transactions, Tony. I think that we feel like now is the time for patience and discipline. We think the cap rates are coming to us. And we will move when we see the right opportunity. The opportunities that we passed on had more to do with the renovations and the yields.

有趣的是，我們還看到很多人迴避大額交易。我們看到了交易，托尼。我認為我們覺得現在是需要耐心和紀律的時候了。我們認為資本化率即將到來。當我們看到合適的機會時，我們就會採取行動。我們放棄的機會更多地與翻修和產量有關。

And when we look at those, a big part of our renovation story is maintaining that affordability gap. And just for a moment, I'd like Grant to comment on the affordability and kind of its importance to our portfolio.

當我們審視這些時，我們的裝修故事的很大一部分是維持負擔能力差距。我想請格蘭特對負擔能力及其對我們投資組合的重要性發表評論。

Sure, Paul. It is really central, and we are maintaining that. It's been expanding within the Washington region. There's a 26% premium for new products over our in-place effective rents. And in Atlanta, it's even higher, 33%. And so that's in the $650 to $700 range, which really provides quite a bit of price insulation and differentiation of our product versus the new product that's coming online.

當然，保羅。它確實非常重要，我們正在維護這一點。它一直在華盛頓地區擴張。新產品比我們現有的有效租金高出 26%。在亞特蘭大，這一比例甚至更高，達到 33%。因此，這個價格範圍在 650 美元到 700 美元之間，與即將上線的新產品相比，這確實為我們的產品提供了相當多的價格隔離和差異化。

Thanks, Grant. And Tony, I just again want to reiterate, like Steve said in his remarks, that we are still -- we still do have a pipeline. We are still underwriting opportunities. We just increased our metrics for what we need going in, in this environment. We think it's the right thing to do. But I want to assure you that when we do see the right opportunity, we will do our best to execute on it.

謝謝，格蘭特。托尼，我想再次重申，就像史蒂夫在講話中所說的那樣，我們仍然 - 我們仍然有管道。我們仍在承保機會。我們只是增加了在這種環境下我們需要做什麼的指標。我們認為這是正確的做法。但我想向你們保證，當我們確實看到合適的機會時，我們將盡力執行它。

And then I guess along similar lines, but on the other side of this, with Watergate, it actually seems like the asset is performing pretty well and pretty steadily. So is the idea to keep that for now, for a lack of liquidity in the office market? Or how should we think about that?

然後我猜測沿著類似的思路，但另一方面，在水門事件中，該資產實際上似乎表現得相當好且相當穩定。那麼，由於寫字樓市場缺乏流動性，目前是否有保留這種做法的想法？或者說我們應該如何思考這個問題？

The Watergate, it has almost 7 years of [walk] on it. And Tony, when we look at our portfolio in its totality, probably by year-end, it's expected to be less than 10% of our total NOI. We are seeing traffic on it. We did increase occupancy during the course of this year. I'd like to see a few more data points on DC office right now. It's a -- as you said, it's not a very liquid dynamic in the investment sales market right now, especially in D.C. office. And so it is a noncore holding, and it is something that we would like to monetize. But we want to wait and make sure we can create the most value for our shareholders.

水門事件，它已經在上面[行走]了快7年了。托尼，當我們從整體來看我們的投資組合時，可能到年底，它預計將低於我們總 NOI 的 10%。我們看到上面有流量。今年我們確實增加了入住率。我現在想查看華盛頓辦公室的更多數據點。正如您所說，目前投資銷售市場的流動性不是很強，尤其是在華盛頓特區的辦公室。因此，這是一種非核心控股，我們希望將其貨幣化。但我們想等待並確保我們能為股東創造最大價值。

Your next question is coming from John Pawlowski at Green Street.

您的下一個問題來自 Green Street 的 John Pawlowski。

I just have a few quick questions on the transformation. Paul, is the senior management team that will oversee the internal operating platform fully built out now and fully hired both at the corporate and regional level? Or is there more hiring to do?

我只是有幾個關於轉型的簡單問題。 Paul，負責監督內部運營平台的高級管理團隊現在是否已經完全建成，並且在公司和區域層面均已全部聘用？或者還有更多的招聘工作要做？

There is some additional hiring to do over the next 6-plus months. We've incorporated that hiring into our 2023 guidance. We just started, John, onboarding the properties last weekend, and I'm happy to say the first few coming on at the execution was successful. But we plan on onboarding properties from now through mid-next year. And I'm sure we'll be adding additional personnel as that goes. But like I said, all of that is baked into our G&A numbers and our guidance for 2023. Steve, anything you want to add there?

在接下來的 6 個多月內，我們還需要進行一些額外的招聘工作。我們已將該招聘納入 2023 年指導方針中。約翰，上週末我們剛剛開始加入這些資產，我很高興地說，執行中的前幾個項目是成功的。但我們計劃從現在到明年中期引入房產。我確信我們將會增加更多的人員。但正如我所說，所有這些都已納入我們的一般管理費用數據和 2023 年指導中。史蒂夫，您想補充什麼嗎？

Yes. And I would say, obviously, at the community levels, they'll be coming on more and more as we bring on more properties. We have obviously had to get ahead of this as we're onboarding properties. So we have beefed up our regional teams. Just added additional Director of Operations, regional managers, regional maintenance managers. And we've positioned our accounting team to take over what third-party accounting folks have done before, and our IT is replacing their IT.

是的。我想說，顯然，在社區層面，隨著我們引進更多房產，它們會越來越多。顯然，在我們引進酒店時，我們必須先行一步。因此，我們加強了我們的區域團隊。剛剛增加了運營總監、區域經理、區域維護經理。我們已經讓我們的會計團隊接管第三方會計人員以前所做的事情，並且我們的 IT 正在取代他們的 IT。

So those things are done. But as Paul said, they'll -- as we incrementally have more people coming on board and relieve the middleman will be replacing them with a few more of our people.

所以這些事情就完成了。但正如保羅所說，隨著我們逐漸有更多的人加入並緩解中間人的壓力，他們會用更多的我們的人來取代他們。

Okay. Does any of this work trickle into 2024? Or will it be fully dug by the end of next year?

好的。這些工作會持續到 2024 年嗎？還是明年年底就能全部挖完？

Well, we do -- we'll be on -- not into 2024. We should have everything that we currently own today on board by the summer of 2023.

好吧，我們會——我們會——不會持續到 2024 年。到 2023 年夏天，我們應該把我們目前擁有的一切都搬上船。

Okay. Last one for me, and then I'll jump back into the queue. Steve, what are your expectations for revenue and expense growth within the 10% midpoint of NOI growth next year. I apologize if I missed that earlier.

好的。我的最後一個，然後我會跳回隊列。 Steve，您對明年 NOI 增長 10% 中點內的收入和支出增長有何預期？如果我之前錯過了，我深表歉意。

Well, I think we talked about overall some facts that go into it. And I can talk about how we might think that will blend over the course of the year or 2. I think it starts out a little stronger in the year, and we would expect it to bend down a little bit later. We reported a loss to lease of 8.3 at quarter end. We're now getting into November, which is a seasonably, a little bit lower pricing. And we're only seeing seasonal patterns, no weakness other than that. And we're still in the 7s as we look at -- as we begin November on that.

嗯，我認為我們總體上討論了其中的一些事實。我可以談談我們如何看待這一點將在這一年或兩年內融合。我認為它在今年開始時會稍強一些，我們預計它會在晚些時候下降一點。我們報告季度末租賃損失為 8.3%。我們現在正進入十一月，這是一個季節性的、稍微低一點的價格。我們只看到季節性模式，除此之外沒有其他弱點。從 11 月份開始，我們仍然處於 7 年代。

We have a pretty strong earn in. We feel really good. About 2/3 of our leases expired in our second and third quarter, and we've got tremendous trade-outs during those quarters, which provide revenue growth. On top of all of that, and I'm going to throw it to Grant just to add a little color here. We're seeing, say, on blended across the Atlanta D.C. markets, a real page expectation of 3% revenue growth. But how we play is even a little stronger than that. And if Grant, if you could add a little color to that.

我們的收入相當可觀。我們感覺非常好。我們大約 2/3 的租約在第二和第三季度到期，在這些季度中我們進行了大量的交易，這帶來了收入增長。最重要的是，我要把它交給格蘭特，只是為了在這裡添加一點色彩。例如，我們看到，在亞特蘭大特區的混合市場上，實際頁面預期收入增長 3%。但我們的比賽方式甚至比這更強一點。如果格蘭特的話，你是否可以為此添加一點色彩。

Sure, Steve. I think it's sort of 2 prongs on those. One would be submarket selection. There is quite a lot of variability. There's as much variability within a market as between markets. and many of our submarkets that we have been in and played in, in Washington historically or that have moved into recently Atlanta, are expected to significantly outperform the average for the region.

當然，史蒂夫。我認為這有點像 2 個尖頭。一是子市場選擇。有相當多的可變性。市場內部和市場之間的可變性一樣多。我們曾經在華盛頓或最近遷入亞特蘭大的許多子市場的表現預計將顯著優於該地區的平均水平。

And then additionally, if you look at how the vintages of apartments perform and those that were really central to our strategy. Those have outperformed historically, as we said in the script. Over the last year, for example, the vintages that we really focus on in Atlanta have outperformed the market, a new product by over 200 basis points and in Washington, D.C., over 340 basis points.

另外，如果你看看公寓的年份表現如何，以及那些對我們的戰略真正至關重要的年份。正如我們在劇本中所說，這些股票的表現優於歷史水平。例如，去年，我們在亞特蘭大真正關注的年份新產品的表現優於市場 200 多個基點，而在華盛頓特區則優於市場 340 多個基點。

So we think there may be some additional upside based on our strategy and our submarket selection beyond what you may see it at a whole regional level.

因此，我們認為，根據我們的戰略和子市場選擇，可能會有一些額外的優勢，超出了您在整個區域層面上看到的優勢。

Then I would take it from there and say we've really focused going into the winter months on occupancy, and we've actually even grown a little bit since quarter end, and it's very strong. And when you think about the real strong rental growth we've captured in this market up to now, we're putting our renewals out right now at 10% to 12%. And we're expecting even the winter months high single-digit rent growth, et cetera then.

然後我會從那裡說，進入冬季，我們真的把重點放在入住率上，實際上，自季度末以來，我們甚至有所增長，而且非常強勁。當你想到我們迄今為止在這個市場上實現的真正強勁的租金增長時，我們現在就以 10% 到 12% 的速度進行續租。我們預計，即使是冬季，租金也會出現高個位數的增長，等等。

And so yes, and we do believe it will tail off towards December of 2023 and start out higher in the year and kind of average down. And then in terms of just our leasing patterns and our volumes and activity, they're very strong. They're historically higher than we've seen in October and early November before. And I think that that carries really well in terms of strength.

所以是的，我們確實相信它會在 2023 年 12 月之前逐漸減弱，並在這一年開始走高，然後平均下降。然後就我們的租賃模式以及我們的數量和活動而言，它們非常強大。從歷史上看，它們比我們之前在 10 月和 11 月初看到的要高。我認為這在力量方面確實很有用。

So we look at all of this, and we're expecting with the earn-in, in a healthy occupancy going into the winter months. We stress test it, and we certainly don't have the kind of rental growth in '23 that we've modeled in '22, but we feel really good about it.

因此，我們著眼於所有這些，並期望通過盈利，在進入冬季的幾個月中保持健康的入住率。我們對其進行了壓力測試，我們當然沒有像 22 年那樣在 23 年實現租金增長，但我們對此感覺非常好。

Okay. But for 2023 NOI growth guidance, are we talking like 8.5% revenue and 6% expense growth gets you to 10% of those the types of ranges you guys are thinking through?

好的。但對於 2023 年 NOI 增長指導，我們是否在談論 8.5% 的收入和 6% 的費用增長會讓你們達到你們正在考慮的範圍類型的 10%？

Amy, you have the revenue growth, right? Yes, I think we projected our expense growth to be about 7% on top of what we've experienced this year, which is 5%. And I think the categories that we think will be the highest for next year are going to be your payroll because we're offering incentives to get people to change jerseys and come over to our team and then real estate taxes and utilities. So we've left room for those kinds of increases in there.

艾米，你的收入增長了，對嗎？是的，我認為我們預計我們的費用增長將在今年 5% 的基礎上增長 7% 左右。我認為我們認為明年最高的類別將是你的工資單，因為我們提供激勵措施讓人們更換球衣並加入我們的團隊，然後是房地產稅和水電費。因此，我們為此類增長留出了空間。

(Operator Instructions) Your next question for today is coming from Yun Ku at Wells Fargo.

（操作員說明）今天您的下一個問題來自富國銀行的 Yun Ku。

I just wanted to go back to your comments regarding acquisitions. You talked about adjusting return requirements on your end. Could you maybe talk about how big the gap is between what you're willing to pay for versus what the seller's expectations are taking?

我只是想回到你關於收購的評論。您談到了調整退貨要求。您能否談談您願意支付的價格與賣家的期望之間的差距有多大？

Looking at acquisitions, maybe we can talk about cap rates to start out. And I think that they are clearly varying by submarket to submarket and vintage to vintage. When I look at the effects of that, the core and the core plus cap rates, we haven't seen as much movement. But on the value add, because a lot of the buyers are very dependent on leverage, we've definitely seen some movement on the cap rates.

看看收購，也許我們可以從資本化率開始討論。我認為它們顯然因子市場和年份的不同而有所不同。當我觀察核心利率和核心加上限利率的影響時，我們沒有看到那麼多的變動。但在增值方面，由於許多買家非常依賴槓桿，因此我們確實看到了資本化率的一些變化。

And for the B value-add cap that is the space that we play in. We've seen those move up to 100 basis points. And that's -- again, that's unlimited quarterly data. Everybody's pipelines are down and transaction volume is down. But it's not for us, at least, it's not just about cap rates. It's about our going-in basis, as we've talked about, the opportunity to create value based on geographic demographics. Also what the residual looks like at the back end for us.

對於 B 增值上限，這就是我們所發揮的空間。我們已經看到這些上限上升至 100 個基點。再說一遍，這是無限的季度數據。每個人的管道都關閉了，交易量也下降了。但這不適合我們，至少，這不僅僅是資本化率的問題。正如我們所討論的，這是我們的進入基礎，即根據地理人口統計數據創造價值的機會。還有我們後端的殘差是什麼樣的。

But we really see -- as I said earlier, we really see the market coming to us. I do acknowledge that there are some bid-ask gaps out there still, but we believe that, again, most of the sellers and a lot of these value-add sellers that are either on floaters or are on shorter-term paper. We think there's going to be ample volume next year, but we do see it at higher cap rates than we've experienced over the last 24 to 36 months.

但我們確實看到——正如我之前所說，我們確實看到市場正在向我們走來。我確實承認仍然存在一些買賣差距，但我們再次相信，大多數賣家和許多增值賣家要么持有浮動票據，要么持有短期票據。我們認為明年的交易量將會充足，但我們確實看到其資本化率高於過去 24 至 36 個月的水平。

And so I mean you guys still have $125 million in capacity earmarked for acquisitions and also mentioned that the implied cap rate is higher versus peers. Is stock buyback something that you may consider instead of an acquisition?

所以我的意思是，你們仍然有 1.25 億美元的產能專門用於收購，並且還提到隱含的資本化率高於同行。您是否可以考慮股票回購而不是收購？

This is Steve. This is how we're thinking about it. I mean the big picture is the capital markets are unsettled right now and they just haven't adjusted yet to the post fed actions thinking long term here. Debt prices, equity prices assets. The macros have disrupted the equity markets and the macro regarding us have masked the value we've created with historic growth, a new trajectory, a strong balance sheet.

這是史蒂夫。這就是我們的想法。我的意思是，大局是資本市場目前不穩定，他們只是還沒有適應美聯儲采取的長期行動。債務價格，股權價格資產。宏觀經濟擾亂了股市，而我們的宏觀經濟掩蓋了我們通過歷史性增長、新的軌跡和強勁的資產負債表創造的價值。

So we think we should let that settle. Further, I'd say asset prices, as Paul was talking have just not adjusted fully yet, but we think cap rates are coming to us, and we're positioned to create even further value when they do. I mean the way we think about it is having historical growth, a strong balance sheet, liquidity, it's right where we should be if we're heading into more economic uncertainty or even a recession.

所以我們認為我們應該讓這個問題解決。此外，我想說，正如保羅所說，資產價格尚未完全調整，但我們認為資本化率即將到來，並且我們將在其到來時創造更多價值。我的意思是，我們看待它的方式是擁有歷史增長、強勁的資產負債表、流動性，如果我們正陷入更多的經濟不確定性甚至衰退，那麼這正是我們應該處於的位置。

And I think it will serve us really well as the equity prices and the asset values adjusted are fully discovered. Regarding share repurchases, we only would look at them, and we do model them all the time, but we only do them on a leverage-neutral basis. And right now, it actually doesn't pencil out as our best, most likely option in the near term. And then finally, I think if you think about our transformation, scale is our friend and making us -- and scale makes us more profitable. So getting smaller, it really doesn't make us stronger right now.

我認為，隨著股票價格和調整後的資產價值被充分發現，這將對我們非常有幫助。關於股票回購，我們只會關注它們，並且我們一直在對其進行建模，但我們只是在槓桿中性的基礎上進行。目前，它實際上並不是我們近期最好、最有可能的選擇。最後，我認為如果你考慮我們的轉型，就會發現規模是我們的朋友，規模使我們變得更加有利可圖。因此，變小並不能讓我們現在變得更強大。

And just one last regarding Watergate. Like you said, there are 7 years of term left. It's a good property. I just wanted to get a sense of what the fiscal utilization of that property has been just to get a sense on how sticky the in-place leases are.

最後還有關於水門事件的最後一點。正如你所說，任期還剩7年。這是一個很好的財產。我只是想了解該房產的財政利用率是多少，只是為了了解就地租賃的粘性。

We are, I believe, in the low 90% occupied, 92%. We've got good traffic, as I said, Young, coming through there. And our tenants, the tenants that -- our largest tenants that has been there, has been there for quite some time. It's actually who we acquired the building off of. So we feel confident about future utilization. We would just -- we would like to take advantage of some of the traffic we've seen as well as building us some time for the D.C. office market recovery.

我相信，我們處於低90%、92%的水平。正如我所說，Young，我們的交通狀況良好，經過那裡。我們的租戶，我們最大的租戶，已經在那里呆了很長一段時間了。實際上我們就是從這裡買下這棟大樓的。因此我們對未來的利用充滿信心。我們只是——我們想利用我們所看到的一些流量，並為華盛頓辦公樓市場的複蘇創造一些時間。

Your next question is coming from Michael Lewis at Truist Securities.

您的下一個問題來自 Truist Securities 的邁克爾·劉易斯 (Michael Lewis)。

My first one for Steve, kind of a guidance question, I guess. But what are you thinking about for the term loan next year? And what do you anticipate the interest rate would be to refinance that?

我想，我給史蒂夫的第一個問題是一個指導性問題。但是您對明年的定期貸款有何看法？您預計再融資的利率是多少？

We have a really good debt maturity ladder, but the $100 million is due in July of next year. We were working on some potential portfolio deals that don't pencil out now that might come back to us later. So we were keeping that option open. Right now, what we've assumed in our guidance is that we'll refinance the term loan. It is swapped to fixed. I think you noted in your notes, Michael, to 2.3% through July.

我們有一個非常好的債務到期階梯，但 1 億美元將於明年 7 月到期。我們正在研究一些潛在的投資組合交易，這些交易目前尚未確定，但稍後可能會出現。所以我們保留這個選項。目前，我們在指導中假設我們將為定期貸款再融資。它被交換為固定的。邁克爾，我想您在筆記中指出，截至 7 月份的增長率為 2.3%。

I think we'll plan on refinancing it in a short enough term that we can prepay it without penalty. I anticipate that we will have opportunities to acquire, and we'll probably have to assume some debt, so we're going to want some debt that we can repay. Looking at what that pricing might be, what we're assuming is low 5s after the fixed period.

我認為我們將計劃在足夠短的時間內進行再融資，以便我們可以提前償還而不會受到罰款。我預計我們將有機會收購，並且我們可能不得不承擔一些債務，因此我們需要一些可以償還的債務。看看定價可能是多少，我們假設固定期限後的價格為 5 秒以下。

And then my second one about -- I guess it's coming back to the question about the acquisitions, right? So the company obviously has come a long way. I like the rebranding. But when I look at the third quarter composition of the portfolio, you're still 80% DC, Virginia, Maryland apartment, you're about 10% office. There's no acquisitions in the 2023 guidance, although it sounds like there may be some. I'm just kind of curious like how much acquisition volume do you think you ultimately need to do to put this portfolio where it needs to be? And eventually, you'll have some proceeds from office, you have some dry powder right now. So I think you could do it. The transaction market, I understand is a little bit comes up. But what's the total volume of deals do you think you need to do to get this portfolio where you ultimately want it to be?

然後我的第二個問題是——我想這又回到了收購的問題，對嗎？因此，該公司顯然已經取得了長足的進步。我喜歡品牌重塑。但當我查看第三季度投資組合的構成時，仍然有 80% 是華盛頓特區、弗吉尼亞州、馬里蘭州的公寓，大約 10% 是寫字樓。 2023 年指南中沒有收購，儘管聽起來可能會有一些。我只是有點好奇，您認為您最終需要多少收購量才能將這個投資組合放在需要的位置？最終，你會從辦公室得到一些收入，你現在就有了一些乾粉。所以我認為你可以做到。交易市場，我理解是一點點上來的。但是，您認為要使該投資組合達到您最終想要的目標，您需要完成多少交易總量？

I think I'll start and let Paul talk about it strategically. This is Steve. I think there's more than one way to get there. And clearly, there's disruption, so we're waiting for prices to settle, et cetera. I think when we rolled out in our webcast June a year ago, we targeted to be like 40% in the Sunbelt. We're 20% there today, and we've done a pretty good job of allocating. So how do you do that?

我想我會開始讓保羅有策略地談論它。這是史蒂夫。我認為到達那裡的方法不止一種。顯然，存在中斷，因此我們正在等待價格穩定下來，等等。我想，當我們一年前 6 月推出網絡廣播時，我們的目標是陽光地帶的 40% 左右。今天我們已經完成了 20%，而且我們的分配工作做得非常好。那麼你該怎麼做呢？

Well, one thing is you scale when you grow and you continue to use new capital and go there. Another way is once you have asset prices settled down in rediscovery, you also do some recycling, et cetera. But a third way, and we actually were in pretty good discussions, and they might come back to us when the capital markets make sense, but we were looking at NAV to NAV unit deals.

嗯，一件事是，當你成長時，你會擴大規模，並且繼續使用新資本並去那裡。另一種方法是，一旦你在重新發現中確定了資產價格，你還可以進行一些回收等等。但第三種方式，我們實際上進行了很好的討論，當資本市場有意義時，他們可能會回到我們身邊，但我們正在考慮資產淨值到資產淨值單位的交易。

And we had some opportunities that could have moved us there really quickly. So I think we just need to let things play out, and I think the options will present themselves, and we'll do the right capital for the right opportunities at the right time. But today, all we're saying is we need to make sure that we only create shareholder value. We were solving for 3 things from the very beginning, in addition to keeping the balance sheet strong.

我們有一些機會可以讓我們很快到達那裡。因此，我認為我們只需要讓事情順利進行，我認為選擇會自行出現，我們將在正確的時間為正確的機會提供正確的資本。但今天，我們要說的是，我們需要確保我們只創造股東價值。除了保持強勁的資產負債表之外，我們從一開始就解決了三件事。

Number one is, we wanted profitable growth, and we're delivering historic growth for next year, okay? And the second thing was really we wanted to geographically diversify. We made -- we got the 20%, and we just talked about some of the options in the playbook that you just asked so well about. The third thing is scale. And we think scale can help us. We saw some ways to scale faster before the capital markets got worse because of the Fed. And I'm not sure the Fed is going to do this forever. So I think those opportunities may represent themselves.

第一是，我們想要盈利增長，我們將在明年實現歷史性增長，好嗎？第二件事是我們確實希望實現地域多元化。我們做到了——我們得到了 20%，我們剛剛討論了劇本中的一些選項，您剛才問得很清楚。第三件事是規模。我們認為規模可以幫助我們。在資本市場因美聯儲而變得更糟之前，我們看到了一些加快擴張速度的方法。我不確定美聯儲會永遠這樣做。所以我認為這些機會可能代表它們本身。

Michael, it's Paul. I do expect some type of settling in the second half of '23. To Steve's point, the Fed is not going to do this forever. We are keeping in touch with the folks that we had those conversations with. And as well, I don't want to -- because we've pushed pause, I don't want anyone thinking for a moment that we're not still actively touring properties, visiting the submarkets that are on our target list and maintaining our dialogue with both the brokers and the owners in those respective submarkets.

邁克爾，是保羅。我確實預計 23 年下半年會出現某種形式的解決。在史蒂夫看來，美聯儲不會永遠這樣做。我們正在與那些與我們進行過對話的人保持聯繫。而且，我也不想——因為我們已經暫停了，我不希望任何人認為我們沒有仍在積極參觀房產，參觀我們目標清單上的子市場並維持我們與各個子市場的經紀人和業主的對話。

The only thing I'd add to really what Steve said in terms of scale is that everything that we've gone through right now, we've always said, look, we'd like to -- we can double the size of the company. Well, now we've built out the infrastructure to do that. And I think now it's just a matter of executing on the right opportunities at the right time. I said it earlier, patience and discipline is the order of the day. I think the ground is still moving under our feet and a lot of -- particularly, a lot of sellers want to see where the Fed shakes out as well as buyers.

對於史蒂夫所說的規模方面的內容，我唯一要補充的是，我們現在所經歷的一切，我們總是說，看，我們希望——我們可以將規模擴大一倍。公司。好吧，現在我們已經建立了基礎設施來做到這一點。我認為現在的問題只是在正確的時間抓住正確的機會。我之前說過，耐心和紀律是當今的秩序。我認為我們腳下的土地仍在移動，很多人——尤其是很多賣家和買家都希望看到美聯儲的動向。

And so I'm confident that we're going to -- we are going to see either from a one-off basis or from a portfolio basis opportunities in '23 to scale. We're just not -- we're not predicating everything on that at this moment, just given the dynamics that are taking place in the marketplace.

因此，我相信我們將在 23 年看到一次性或投資組合機會的規模化。我們只是——我們目前並沒有以此為基礎來預測一切，只是考慮到市場上正在發生的動態。

The next question is a follow-up question coming from John Pawlowski.

下一個問題是 John Pawlowski 提出的後續問題。

Can you just remind us if there are any known move-outs of Watergate 600 for next year?

您能否提醒我們明年是否有任何已知的 Watergate 600 遷出情況？

I don't believe there are, John. I'll double check on that, but I don't believe there are.

我不相信有，約翰。我會仔細檢查一下，但我不相信有。

And if there are no further questions, I'd like to turn the floor back over to management for any closing comments.

如果沒有其他問題，我想將發言權交還給管理層以徵求結束語。

Thank you. Again, I'd like to thank everyone for your time and interest today, and we look forward to speaking with many of you over the next several weeks. Thank you.

謝謝。我要再次感謝大家今天的時間和興趣，我們期待在接下來的幾週內與你們中的許多人交談。謝謝。

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

謝謝你們，女士們、先生們。今天的活動到此結束。此時您可以斷開電話線，度過美好的一天。感謝您的參與。