Elme Communities (ELME) 2023 Q4 法說會逐字稿

No Good day and welcome to the A.M. Communities' fourth quarter 2024 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, AiMI Please go.

沒有美好的一天，歡迎來到上午。社區 2024 年第四季財報電話會議。提醒一下，今天的通話正在錄音。現在，我想把電話轉給AiMI投資者關係副總裁Amy Hopkins，請離開。

Good morning and thank you for joining our fourth quarter earnings call. Today's event is being webcast with a slide presentation that is available on the Investors section of our website and will also be available on a webcast replay.

早安，感謝您參加我們的第四季財報電話會議。今天的活動將透過網路直播並提供幻燈片演示，可在我們網站的投資者部分查看，也可透過網路直播重播觀看。

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, and we undertake no duty to update them as actual events unfold. As 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.

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，這可能導致實際結果存在重大差異，我們不承擔將其更新為實際結果的義務事件展開。正如我們在美國證券交易委員會的文件中所提到的某些風險。本次電話會議中討論的 GAAP 和非 GAAP 財務指標的調整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。

Presenting on the call today will be Paul McDermott, our CEO, Tiffany Butcher, our COO, and Steve Festa, our CFO, and with that, I will turn the call over to Paul.

今天出席電話會議的有我們的執行長保羅·麥克德莫特(Paul McDermott)、我們的營運長蒂芙尼·布徹(Tiffany Butcher) 和我們的財務長史蒂夫·費斯塔(Steve Festa)，接下來我將把電話轉給保羅。

Thanks, Amy, and thank you for joining us today to discuss our fourth quarter 2023 results and outlook for 2024. I'll start by covering apartment fundamentals in each of our markets. Tiffany will cover our operating trends and growth initiatives, and Steve will discuss our 2024 financial outlook for Washington Metro, which drives over 80% of our multifamily NOI. It's positioned well with healthy demand trends and an outlook for rent growth that is above the US average for a 2nd year in a row. Furthermore, employment trends remain positive with a favorable 2024 job growth outlook of 1.3%. Northern Virginia, which comprises over 80% of our Washington metro footprint continues to be the largest driver of job growth for the Washington Metro region. And if the job growth outlook were to shift the presence of the federal government and federal government contractors should provide continued stability and employment.

謝謝艾米，感謝您今天加入我們討論我們的 2023 年第四季業績和 2024 年展望。我將首先介紹每個市場的公寓基礎知識。蒂芙尼將介紹我們的營運趨勢和成長計劃，史蒂夫將討論我們對華盛頓地鐵 2024 年的財務前景，該地鐵驅動了我們超過 80% 的多戶型 NOI。它的定位良好，需求趨勢良好，租金成長前景連續第二年高於美國平均。此外，就業趨勢依然樂觀，2024 年就業成長前景樂觀，為 1.3%。北維吉尼亞州佔華盛頓都會區 80% 以上的足跡，仍然是華盛頓都會區就業成長的最大動力。如果就業成長前景發生變化，聯邦政府和聯邦政府承包商應該提供持續的穩定和就業。

In terms of supply picture, we have no exposure to capital south or Northeast DC, which are the highest supplied submarkets in the district and only two of our Washington Metro submarkets are projected to see increasing net inventory growth rates this year. Furthermore, our rent levels do not compete directly with new supply as the rent differential is $640 or 30% below recent delivery. Overall, our Washington metro portfolio is in a favorable and defensive position at this stage in the year, and we expect it to be our primary NOI. growth driver this year.

就供應情況而言，我們沒有接觸首都南部或東北特區，這是該地區供應量最高的子市場，預計今年只有兩個華盛頓地鐵子市場的淨庫存成長率會增加。此外，我們的租金水準不會與新供應直接競爭，因為租金差異為 640 美元，比最近交付的租金低 30%。總體而言，我們的華盛頓地鐵投資組合在今年這個階段處於有利和防禦地位，我們預計它將成為我們的主要 NOI。今年的成長動力。

Turning to Atlanta, the long-term outlook for population growth, household formation and job growth are strong, and we remain optimistic about the longer term value creation potential of our Atlanta portfolio. Employment is projected to grow by 1.2% during 2024 in line with the US average and the sectors that are driving job growth in Atlanta are strong generators of demand for mid-market apartment homes in our submarkets, suburban employment growth is being powered by strong performance in the education and health, leisure and hospitality and finance industries, which together employ more than a third of our Atlantic Brazil. These sectors have registered annual growth rates in the range of 5% to 7% over the past year. While employment trends remain favorable, our Atlanta submarkets continue to experience pricing pressure due to both the normalization and rent growth following exceptional post-pandemic growth and the impact of elevated deliveries, while only two of our Atlanta submarkets or about a third of our Atlanta homes are experiencing supply that is elevated above the US average. We are experiencing a more widespread impact of new supply throughout the region relative to the Washington Metro, where the impacts of supply are more contained within each submarket. We do not anticipate supply elevating materially above the current levels in any of our Atlanta submarkets. However, we do expect the impact of new supply on our Atlanta portfolio to be felt throughout the year.

談到亞特蘭大，人口成長、家庭形成和就業成長的長期前景強勁，我們對亞特蘭大投資組合的長期價值創造潛力保持樂觀。預計 2024 年就業成長 1.2%，與美國平均水平一致，推動亞特蘭大就業成長的行業是我們子市場中端市場公寓需求的強勁推動者，郊區就業成長受到強勁業績的推動教育和健康、休閒和酒店以及金融業，這些行業僱用了巴西大西洋地區三分之一以上的人口。過去一年，這些行業的年增長率在 5% 至 7% 之間。儘管就業趨勢仍然有利，但由於大流行後的異常增長和交付量增加的影響，正常化和租金增長，我們的亞特蘭大子市場繼續面臨價格壓力，而我們的亞特蘭大子市場中只有兩個或約三分之一的亞特蘭大住宅供應量高於美國平均。相對於華盛頓地鐵，我們正在整個地區經歷更廣泛的新供應影響，其中供應的影響更多地包含在每個子市場內。我們預計亞特蘭大任何子市場的供應量都不會大幅高於目前水準。然而，我們確實預計全年都會感受到新供應對我們亞特蘭大投資組合的影響。

Moving on to resident credit wage growth relative to total rent growth across the Washington, metro and Atlanta metro areas continues to trend positively and our residents' financial status remains solid. The average rent to income ratio for new leases signed in the fourth quarter was 24%, representing a slight improvement compared to the 2023 average. This reaffirms that our rental rates remain affordable for our new residents.

華盛頓、都會區和亞特蘭大都會區的居民信貸工資成長相對於總租金成長持續呈現正面趨勢，居民的財務狀況依然穩固。第四季新簽租賃平均租金收入比為24%，較2023年平均略有改善。這再次證明我們的租金對新居民來說仍然是可以負擔的。

And with that, I'll turn it over to Tiffany to discuss our operating trends and growth initiatives.

接下來，我將把它交給蒂芙尼，討論我們的營運趨勢和成長計劃。

Thanks, Paul. Starting with lease rate growth, we're seeing favorable and positive trends in our same-store portfolio. During the fourth quarter, we generated effective blended lease rate growth of 2.5% for our same-store portfolio comprised of renewal lease rate growth of 6.2% and average new lease rate decline of 2.4%. Average resident retention was 65% due to a combination of our focus on maximizing rent growth by prioritizing renewals and the impact of our community teams who work very hard to create a great living experience for our residents.

謝謝，保羅。從租賃率成長開始，我們在同店投資組合中看到了有利且正面的趨勢。第四季度，我們的同店組合的有效混合租賃率增加了 2.5%，其中續租率增加了 6.2%，平均新租賃率下降了 2.4%。平均居民保留率為 65%，這要歸功於我們透過優先考慮續租來最大化租金成長的重點，以及社區團隊的影響，他們努力為居民創造良好的生活體驗。

Another contributing factor is that our communities attract a higher composition of families in a more mature renter demographic, which supports strong renewal rate growth and longer average tenure in our communities.

另一個影響因素是，我們的社區吸引了更多更成熟的租戶群體中的家庭，這支持了我們社區的強勁續租率成長和更長的平均租期。

Looking at our year to date trends for our 2020 for our same-store portfolio, which now includes all of our Atlanta communities, except for withheld blended lease rate growth has averaged over 2.5% on an effective basis, up from 1.8% in the fourth quarter. The increase is driven by higher new lease rate growth and consistently strong renewal rate growth, March and April renewal were sending out renewals had an average rate above 6%.

Looking at our year to date trends for our 2020 for our same-store portfolio, which now includes all of our Atlanta communities, except for withheld blended lease rate growth has averaged over 2.5% on an effective basis, up from 1.8% in the fourth四分之一.這一成長是由較高的新租賃率成長和持續強勁的續租率成長推動的，3 月和 4 月的續租率平均高於 6%。

Moving on to occupancy, we maintained average same-store occupancy of 95.5% during the fourth quarter, representing strong growth of 50 basis points compared to the prior year. While we experienced occupancy pressure in our lease-up portfolio demand trends in our Washington metro portfolio supported our ability to maintain a stable same-store occupancy trend over the course of the year. On a year-to-date basis, occupancy for our 2024 same-store pool has trended down slightly due to the impact of temporary occupancy decline in our Atlanta portfolio, driven by the timing of evictions and the impact of new supply occupancy for our Washington metro area communities has largely held steady on a year-to-date basis as we move toward the spring leasing season. We anticipate continued strength in the Washington metro market, allowing us to maintain occupancy within our targeted range.

入住率方面，第四季同店平均入住率維持在 95.5%，較去年同期強勁成長 50 個基點。儘管我們的租賃投資組合經歷了入住壓力，但華盛頓地鐵投資組合的需求趨勢支持了我們在一年中保持穩定的同店入住趨勢的能力。今年迄今，由於驅逐時間和華盛頓新供應入住率的影響，亞特蘭大投資組合的入住率暫時下降，我們 2024 年同店池的入住率略有下降隨著春季租賃季節的到來，今年迄今為止，都市區社區基本上保持穩定。我們預計華盛頓地鐵市場將持續強勁，使我們能夠將入住率維持在目標範圍內。

Turning to renovations, we completed over 300 full renovations and 77 partial renovations in 2023 at a total cost of 5 million, achieving an average renovation ROI of approximately 15% in 2024, we expect to complete over 400 full renovations at an average cost of $16,000 per unit and over 100 partial renovations at an average cost of $5,000 per unit. We believe that the renovations we are targeting this year will help us continue to attract high credit quality renters and will generate attractive returns as we are focusing 2024 renovations on submarkets where our renovated homes offer the best value proposition compared to nearby alternatives. Further, our renovation program is highly flexible since we execute renovations when units turn, and we see the potential for outsized rent growth, which allows us to easily adjust the pace of renovations based on market demand for renovated units. Looking forward, we have an identified renovation pipeline of over 3,000 units, which represents more than enough runway to deliver renovation lead value creation for the foreseeable future.

說到裝修，我們在2023 年完成了300 多項全面裝修和77 項部分裝修，總成本為500 萬美元，平均裝修投資回報率約為15%，到2024 年，我們預計將完成400 多項全面裝修，平均成本為16,000 美元每個單元和超過 100 次局部翻新，平均每個單元成本為 5,000 美元。我們相信，今年的翻新工程將幫助我們繼續吸引高信用品質的租戶，並將產生有吸引力的回報，因為我們將2024 年的翻新工程重點放在子市場上，與附近的替代方案相比，我們的翻新住宅在這些子市場上提供了最佳的價值主張。此外，我們的裝修計劃非常靈活，因為我們在單位轉向時進行裝修，並且我們看到租金大幅增長的潛力，這使我們能夠根據裝修單位的市場需求輕鬆調整裝修步伐。展望未來，我們已經確定了 3,000 多個單位的翻新管道，這意味著在可預見的未來，有足夠的跑道來提供翻新主導價值創造。

Moving on to our operational initiatives. Previously, we said that we plan to deliver 4.25 to 4.75 million of additional FFO growth between 2023 and 2025, some operational initiatives made possible by internalizing property level management. We're pleased to report that we captured 20% of that upside in 2023, which is in line with our expectations. Key drivers were new fee income initiatives, staffing efficiencies, our portfolio-wide investment in smart home technology and cash management optimization. Looking forward, we expect to capture the remaining FFO upside split evenly across 2024 and 2025 with additional opportunity beyond that based on future staffing efficiencies related to leasing and maintenance. Furthermore, we plan to roll out managed WiFi across our portfolio, starting with seven communities in 2024, which should generate additional upside beyond the 4.25 to $4.75 million FFO target. Looking forward, we're excited about the initiatives that we're implementing and the upside is yet to come as we drive increased profitability from our portfolio.

繼續我們的營運計劃。此前，我們曾表示，我們計劃在 2023 年至 2025 年間實現 4.25 至 475 萬個 FFO 的額外增長，一些運營舉措通過內部化物業級別管理而成為可能。我們很高興地報告，我們在 2023 年實現了 20% 的成長，這符合我們的預期。主要驅動因素是新的費用收入計劃、人員配置效率、我們對智慧家庭技術的投資組合範圍內的投資以及現金管理最佳化。展望未來，我們預計將在 2024 年和 2025 年平均分配剩餘的 FFO 上行空間，並根據未來與租賃和維護相關的人員配置效率，提供更多機會。此外，我們計劃從 2024 年開始在我們的投資組合中推出託管 WiFi，這將在 4.25 至 475 萬美元的 FFO 目標之外產生額外的上漲空間。展望未來，我們對正在實施的措施感到興奮，隨著我們推動投資組合獲利能力的提高，上行空間尚未到來。

And with that, I'll turn it over to Steve to cover our results 2024 outlook and balance sheet.

接下來，我將把它交給 Steve，介紹我們的 2024 年業績展望和資產負債表。

Thanks, Tiffany. We delivered a solid fourth quarter performance closing out a year of exceptional growth that included 8.3% same-store multifamily NOI growth and 10.2% core FFO per share growth. As Tiffany discussed, we are seeing stable fundamental trends in our Washington metro portfolio, and we believe that we have the potential to outperform in our markets based on operational initiatives that are already underway.

謝謝，蒂芙尼。我們在第四季度取得了穩健的業績，為這一年的非凡增長畫上了圓滿的句號，其中包括同店多戶型 NOI 增長 8.3%，核心 FFO 每股增長 10.2%。正如蒂芙尼所討論的，我們在華盛頓地鐵投資組合中看到了穩定的基本趨勢，並且我們相信，基於已經在進行的運營計劃，我們有潛力在市場上表現出色。

Our core business continues to perform well. Our balance sheet is in great shape, and we are laying the groundwork for NOI outperformance in the years to come.

我們的核心業務繼續表現良好。我們的資產負債表狀況良好，我們正在為 NOI 未來幾年的優異表現奠定基礎。

Now I'd like to address our guidance assumptions, we expect same-store multifamily NOI growth to range from 0.25% to 2% in 2024, driven primarily by rent growth in our Washington metro portfolio and improving bad debt trends in our Atlanta portfolio in the second half of the year, partially offset by an 8% increase in noncontrollable expenses. Noncontrollable expense increase is being driven by two of our Atlanta communities that are on a three year tax assessment cycle. We expect the impact of the timing of those assessments to drive an outsized increase in real estate taxes this year. Excluding those two communities, the expected increase in total noncontrollable expenses, we'd be closer to 5% NOI for Watergate 600, which is currently 88% occupied is expected to range from 12 to 13 million. This represents a year-over-year decline of 6% at the midpoint due to an anticipated mid single digit decline in occupancy over the course of the year. Interest expense is expected to range from 37.25 to 38.25 million for the year, primarily driven by higher total debt balance following our acquisition of DeWitt Hills and a higher swapped interest rates on our term loan. Our core FFO guidance range of $0.9 to $0.96 per fully diluted share reflects a year-over-year decline of 4% at the midpoint coming off a year of over 10% growth in 2023. As I previously mentioned, after a year of exceptional performance growth from our portfolio in 2024, which has been gradually easing, is being mostly offset by higher interest rates. The drivers of our 2024 core FFO per share at the midpoint includes a $0.05 incremental contribution from our non-same-store multifamily portfolio and $0.02 of growth from our same-store multifamily portfolio, offset by an $0.08 impact from higher interest expense, a $0.01 decline related to Watergate 600, a $0.01 decline from higher property management fees as our portfolio grew in 2023 and a $0.01 decline from nonrecurring other income received in 2023.

現在我想談談我們的指導假設，我們預計2024 年同店多戶型NOI 增長將在0.25% 至2% 之間，這主要是由華盛頓地鐵投資組合的租金增長以及亞特蘭大投資組合的壞賬趨勢改善推動的。下半年的成長被不可控制費用增加 8% 部分抵銷。亞特蘭大的兩個社區正處於三年的稅收評估週期，這導致了無法控制的費用增加。我們預計這些評估時間的影響將推動今年房地產稅大幅增加。排除這兩個社區，預計總的不可控制費用的增加，我們將接近 Watergate 600 的 5% NOI，目前 88% 的佔用率預計在 12 至 1300 萬之間。由於預計全年入住率將出現中個位數下降，這意味著中位數年減 6%。今年利息支出預計在 37.25 至 3825 萬元之間，主要是由於我們收購 DeWitt Hills 後總債務餘額增加以及定期貸款互換利率上升所致。我們的核心 FFO 指導範圍為每股完全稀釋每股 0.9 美元至 0.96 美元，反映了 2023 年增長超過 10% 的一年中點同比下降 4%。正如我之前提到的，我們的投資組合在 2024 年經歷了一年的出色業績成長（已逐漸放緩），但大部分都被利率上升所抵消。我們的2024 年核心FFO 每股中點的驅動因素包括我們的非同店多戶型投資組合的0.05 美元增量貢獻和我們同店多戶型投資組合的0.02 美元增長，被較高的利息支出（0.01 美元）帶來的0.08 美元影響所抵消與Watergate 600 相關的下降、隨著我們的投資組合在2023 年增長而增加的物業管理費下降了0.01 美元，以及2023 年收到的非經常性其他收入下降了0.01美元。

Turning to our balance sheet, annualized adjusted net debt to EBITDA was 5.5 times at year end in line with our targeted range. And our liquidity position remains strong with approximately $550 million or 80% of the total capacity available on our line of credit at year end with no secured debt and no debt maturities until 2025 with options to extend our 2025 term loan maturity another two years, our balance sheet remains in very good shape.

轉向我們的資產負債表，年底調整後的年化淨債務與 EBITDA 的比值為 5.5 倍，符合我們的目標範圍。我們的流動性狀況依然強勁，年底時我們的信貸額度約為5.5 億美元，即可用總容量的80%，沒有擔保債務，也沒有債務到期日，直到2025 年，我們可以選擇將2025 年定期貸款期間再延長兩年，我們的資產負債表仍維持良好狀態。

And with that, I will turn it over to Paul.

有了這個，我會把它交給保羅。

Thanks, Steve. To wrap it up, our Washington metro footprint and mid-market focus is well positioned given the stable demand trends we are experiencing and our mid-market focus, which offers limited direct competition with new supply. While growth has moderated compared to 2023, operational progress is gaining momentum, and we are capitalizing on the opportunity to focus on driving value creation within our portfolio. While macro uncertainty continues, we believe that the capital markets environment will improve over the course of 2024 and real estate transaction volumes will increase in the second half of the year with improved clarity on real estate valuations. Our current valuation should represent a compelling buyer opportunity as we establish a track record of strong NOI performance over time.

謝謝，史蒂夫。總而言之，鑑於我們正在經歷的穩定需求趨勢以及我們對中端市場的關注，我們在華盛頓地鐵的足跡和中端市場的關注點處於有利位置，這與新供應提供了有限的直接競爭。雖然與 2023 年相比成長放緩，但營運進度勢頭強勁，我們正在利用這個機會專注於推動我們投資組合的價值創造。儘管宏觀不確定性依然存在，但我們相信資本市場環境將在 2024 年有所改善，下半年房地產交易量將增加，房地產估值更加清晰。我們目前的估值應該代表著一個令人信服的買家機會，因為我們隨著時間的推移建立了強勁的 NOI 業績記錄。

And now, operator, I'd like to open it up for questions from Sankey at this time.

現在，接線員，我現在想請桑基提問。

(Operator Instructions) Anthony Paolone, JPMorgan.

（操作員指令）Anthony Paolone，摩根大通。

Thanks and good morning. I guess first question is I wonder if you could dive into the 24 same-store pool a bit and give us a sense as to how bad debts look in, say, the Atlanta portfolio versus do you see portfolio and where you think they go over the course of the year? Because it just seems like that occupancy slippage in Atlanta was pretty notable through the fourth quarter. And so just wondering how much of that is bad debt, what needs to happen to kind of get that back on track? And just any greater color there would be helpful.

謝謝，早安。我想第一個問題是，我想知道您是否可以深入研究一下 24 個同店池，讓我們了解壞帳在亞特蘭大投資組合中的情況，以及您認為它們會在哪裡發生今年的課程？因為亞特蘭大的入住率下滑似乎在第四季非常明顯。因此，我想知道其中有多少是壞賬，需要採取什麼措施才能使其重回正軌？任何更大的顏色都會有幫助。

Hey, Tony, it's Steve. Maybe I'll start and give just a little bit of a a more detail on revenue and expenses. And I'll kind of turn it over to Tiffany to go into bad debt more. But just looking at our NOI. and breaking that down by revenue and expenses. We're looking at revenue for the year as far as a growth percentage in the low threes, and that's driven by two things, but primarily by rental revenue where we're seeing that drive our growth for the year, almost 90% of that growth is coming from rental revenue. And then smaller items in addition to that are filling out the rest of the bucket, including bad debt, where as you talked about, we're expecting a year-over-year increase there. We're also expecting an increase in fee and ancillary income, and that's going to be partially offset by concessions where we're seeing increased concessions here in 24 versus versus last year.

嘿，東尼，我是史蒂夫。也許我會開始提供一些有關收入和支出的更多細節。我會把它交給蒂芙尼，讓她承擔更多的壞帳。但看看我們的 NOI。並按收入和支出進行細分。我們正在考慮今年的收入成長百分比，這是由兩件事推動的，但主要是由租金收入推動的，我們認為這推動了我們今年的成長，其中幾乎 90%成長來自租金收入。除此之外，較小的項目正在填補桶的其餘部分，包括壞賬，正如您所說，我們預計壞賬將同比增長。我們也預計費用和輔助收入會增加，這將被優惠所部分抵消，與去年相比，我們看到 24 月的優惠增加。

On the expense side, we we see our expense percentage growth in the upper sixes and I'll walk through because there's a few things driving that here. The first is on the controllable side where we see controllables going up about 5% for the year. And that's being pushed higher by revenue, enhancing operational initiatives they were rolling out this year, including managed Y-FI, renters, insurance and centralized technology, where we're reflecting an increase in expenses related to that and they're being offset elsewhere in the income statement by things like the fee income and ancillary income that I spoke about earlier. But the big driver, the biggest driver for the growth in our expenses is on the noncontrollable side. The biggest one, of course, is taxes, which we talked about in the prepared remarks that we've got two assets on a three-year cycle that came up this year and are being impacted by the fact that we acquired those within the last couple of years.

在費用方面，我們看到我們的費用百分比增長在前六位，我將逐一介紹，因為有一些因素推動了這一點。第一個是可控方面，我們看到可控因素今年成長了約 5%。收入推高了這一數字，加強了他們今年推出的營運計劃，包括託管 Y-FI、租戶、保險和集中技術，我們反映了與此相關的費用增加，這些費用在其他地方被抵消在損益表中包括我之前談到的費用收入和輔助收入等內容。但我們開支成長的最大推動力是不可控的一面。當然，最大的一個是稅收，我們在準備好的發言中談到了這一點，我們今年出現了三年周期的兩項資產，並且受到我們去年收購這些資產的影響。許多年。

In addition to that, we've got insurance which that's a challenging market right now. We've got to pretty healthy double digit increase in insurance as well. So that's really driving the non non-controllable. And when you look at kind of everything I talked about on the insurance side. If you adjust the operational initiatives and the the two Georgia communities with their taxes, which are kind of unusual for us this year, expense growth would be about 250 basis points lower than the upper sixes I was referring to as far as going into bad debt, Tiffany, if you want to go into that a little bit further?

除此之外，我們還有保險，目前這是一個充滿挑戰的市場。我們的保險也必須達到相當健康的兩位數成長。所以這確實導致了不可控。當你看看我在保險方面談到的一切。如果你調整營運計畫和喬治亞州兩個社區的稅收（這對我們今年來說有點不尋常），那麼費用增長將比我提到的壞帳率高 6 個基點低約 250 個基點蒂芙尼，你想再深入一點嗎？

Sure. Absolutely. Neil is as Steve was saying, we expect 20 to 40 basis points of same-store revenue growth to come from improvement in bad debt in 2024 compared to 2023.

當然。絕對地。Neil 正如 Steve 所說，我們預期 2024 年與 2023 年相比，壞帳改善將帶來 20 至 40 個基點的同店營收成長。

As we think about the projected improvement, it's important to note that bad debt in 2023 was impacted by some transitional friction during the transition from third party to in-house management. And that's obviously now behind us. That was also out elevated in the back half of 2023 due to the end of rental assistance programs in most of our Atlanta counties, which happened in the late summer and early fall, which led to higher delinquencies starting in August, which is anticipated to improve in 2024 as these post rental assistance delinquencies work their way through the eviction process. We've also made a number of procedural and procedural improvements to our collections process, including changing our policy on partial payments, which increases bad debt in the short term, but positively impacts bad debt long term as it speeds up the eviction process for delinquent tenants, allowing us to backfill the units with credit quality tenants more quickly. We've also tightened our credit standards and improved our bringing and income verification process, which will improve our credit performance over the longer term.

當我們考慮預期的改善時，值得注意的是，2023 年的壞帳受到了從第三方管理向內部管理過渡期間一些過渡摩擦的影響。顯然，這一切現在已經過去了。由於亞特蘭大大部分縣的租金援助計劃於夏末秋初結束，2023 年下半年這一數字也有所上升，導致拖欠率從 8 月開始上升，預計情況將有所改善到2024 年，這些後租金援助拖欠行為將逐步進入驅逐程序。我們也對催收流程進行了一些程序和程序上的改進，包括改變我們的部分付款政策，這在短期內增加了壞賬，但從長遠來看對壞賬產生了積極影響，因為它加快了拖欠者的驅逐過程租戶，使我們能夠更快地為單元補充信用優質租戶。我們也收緊了信用標準，並改善了收入和收入驗證流程，這將改善我們的長期信用表現。

Okay. I guess I'm just trying to understand, like is the occupancy move down and just seems like the impact from supply in Atlanta is pretty notable into like what is sort of the concessionary environment, like what all are you doing to kind of offset that? And so should we think about this year end occupancy there as being kind of a trough? And just are you able to kind of move that back up?

好的。我想我只是想了解，就像入住率下降一樣，亞特蘭大的供應影響似乎非常顯著，例如什麼是優惠環境，例如你正在做什麼來抵消這種影響？那麼我們是否應該將今年年底的入住率視為低谷呢？你能把它移回來嗎？

Sure. Let me let me handle those two questions, both on occupancy and concessions from first, the occupancy declines that we experienced in Atlanta in the back half of 2023 were driven, as you noted by two key factors, the timing of evictions following the end of rental assistance and the impacts of new supply.

當然。讓我來處理這兩個問題，首先是關於入住率和讓步的問題，正如您所指出的，2023 年下半年我們在亞特蘭大經歷的入住率下降是由兩個關鍵因素驅動的，即2023 年年底後驅逐的時間。租金援助和新供應的影響。

With respect to the impact of evictions on occupancy, most of the Atlantic jurisdictions either closed or ran out of emergency rental assistance bonds in late summer and early fall, as I said earlier, which did start impacting delinquencies in August, which has impacted the timing because evictions or just which impacts occupancy because the timing of when evictions happened, it's just not entirely predictable. So that does create some near-term drag on occupancy while those units are turned and then release. But as I mentioned, earlier, we have elected to implement a end to partial payments, which does speed up that eviction process significantly. Again, that impacts occupancy in the near term, but we'll have that positive long-term benefit that I was talking about. And the second driver is obviously new supply and the story there varies by submarket of 33% of our Atlantic communities have already seen the peak in supply and about 70% will see supply peak in mid 2024. So we anticipate that supply related pressures on occupancy will improve as we move throughout the year. While our guidance assumes that portfolio level occupancy remains relatively flat on a year-over-year basis, we do expect to see occupancy in the Atlanta market improve throughout the year. As these eviction related vacancies moderate and we optimize revenue by adjusting pricing concessions to meet market demand and drive occupancy.

至於驅逐對入住率的影響，正如我之前所說，大多數大西洋司法管轄區要么在夏末秋初關閉，要么用完緊急租金援助債券，這確實開始影響 8 月份的拖欠情況，從而影響了時機因為驅逐或影響入住率的因素是因為驅逐發生的時間，這是不完全可預測的。因此，當這些單位被轉向然後釋放時，這確實會對入住率造成一些近期的拖累。但正如我之前提到的，我們選擇結束部分付款，這確實大大加快了驅逐過程。同樣，這會影響短期內的入住率，但我們將獲得我所說的正面的長期利益。第二個驅動因素顯然是新供應，各個子市場的情況各不相同，33% 的大西洋社區已經看到供應高峰，約 70% 的社區將在 2024 年中期看到供應高峰。因此，我們預計，隨著全年的搬遷，與供應相關的入住率壓力將會改善。雖然我們的指導假設投資組合入住率比去年同期保持相對平穩，但我們確實預計亞特蘭大市場的入住率全年都會有所改善。隨著這些與驅逐相關的空缺數量減少，我們透過調整定價優惠來優化收入，以滿足市場需求並提高入住率。

Now specifically on your question about concessions, I would say it does vary as we look across our markets. So the Washington market, because of the stability of demand, there has remained less concession area with concessions being used on a much more targeted basis in Atlanta, the market has been more concessionary over the back half of 23 and thus far year to date in 2024. Concessions have been very helpful in driving occupancy to our targeted range for the portfolio. Overall, on a year-to-date basis, we're giving concessions on approximately 50% of new leases and the average level of concessions when you look across all of our new leases is about a week and a half. As we think about 2024, we expect Washington to continue to remain less concessionary and we expect condition concessions to remain in Atlanta throughout the year. In total, we're expecting about 30% of new leases to receive concessions in 2024 and the average concession level, though will drop and two, approximately half a week if you look across all new leasing.

現在，特別是關於你關於優惠的問題，我想說，當我們審視我們的市場時，它確實會有所不同。因此，華盛頓市場，由於需求穩定，優惠面積仍然較少，而亞特蘭大市場的優惠力度則更有針對性，23 年後半段以及今年迄今為止，市場更加優惠。2024 年。優惠對於將入住率提高到我們投資組合的目標範圍非常有幫助。總體而言，今年迄今為止，我們對大約 50% 的新租約提供了優惠，如果您查看我們所有新租約，平均優惠水平約為一周半。展望 2024 年，我們預計華盛頓將繼續減少優惠，並預計亞特蘭大全年將繼續保持條件優惠。總的來說，我們預計 2024 年約有 30% 的新租賃將獲得優惠，但如果你縱觀所有新租賃，平均優惠水平將下降兩週，大約半週。

Okay. And then just a last one here. If I just step back and start to think the next thing about the next couple of years, you've got some debt maturing at lower rates and it sounds like occupancy at Watergate slipping a bit here. Like do you think you have enough sort of arrows in your quiver, so to speak to drive growth and offset that? Like do we think of 24 as being a trough in earnings or any thoughts there just?

好的。然後這裡只是最後一個。如果我退後一步，開始思考未來幾年的下一步，你會發現一些債務以較低的利率到期，聽起來水門的入住率有所下滑。就像你認為你的箭袋裡有足夠的箭來推動增長並抵消它嗎？就像我們認為 24 歲是收入的低潮還是有什麼想法？

Yes. I mean, Tony, as far as maturities go, we've got our term loan maturing in January 2025, but we've got two extension options on that. So can push that out to have one-year extension options. So we can push that out to 27 and we have a balance on our revolver. We're keeping an eye on the debt markets. Pricing has been a bit challenged as the 10-year has kind of bounced around. But if we see an opportunity where pricing does become attractive to term out debt, we would certainly I could look to take advantage of that as far as growth in. I'll let Paul talk about Watergate in a minute, but we certainly in addition to Watergate. We have other assets that we could recycle out of in the DC area that may be a higher CapEx, lower growth and take those proceeds and further diversify the portfolio into into new markets. And right now, obviously, our stock price and the cost of capital, a tough to make new deals pencil out. But where we're focused on operating the business and lowering our implied cap rate with our operational upside with our renovation pipeline, smart home tech and managed WiFi. And so we're looking at, you know, growing growing the NOI through all of our initiatives and earning a lower implied cap rate. And when things do make sense, and we do see opportunities that make sense with our cost of capital, we'll certainly look to take advantage.

是的。東尼，我的意思是，就到期日而言，我們的定期貸款將於 2025 年 1 月到期，但我們有兩個延期選項。因此可以將其延長一年。所以我們可以將其推至 27，這樣我們的左輪手槍就保持平衡了。我們正在密切關注債務市場。由於 10 年期債券反彈，定價受到了一些挑戰。但如果我們看到定價確實對償還債務具有吸引力的機會，我當然會考慮利用這個機會來實現成長。稍後我會讓保羅談談水門事件，但我們當然除了水門事件之外。我們還有其他可以在華盛頓地區回收的資產，這些資產可能是更高的資本支出、更低的成長，並利用這些收益，進一步將投資組合多元化到新市場。顯然，現在我們的股價和資本成本很難做出新的交易。但我們專注於業務運營，並透過翻新管道、智慧家居技術和託管 WiFi 的營運優勢來降低隱含資本化率。因此，我們正在考慮透過我們所有的措施來提高 NOI 並獲得較低的隱含資本化率。當事情確實有意義時，並且我們確實看到了對我們的資本成本有意義的機會，我們肯定會尋求利用。

Yes, Tony, it's Paul. We're assuming that about 60% of our 2024 expirations vacate, and that translates to just over 4.5% this year, and that's roughly that's almost 14,000 square feet. We're taking 60% of that. And we still feel good about the traffic that we've been seeing at the Watergate and we're gradually seeing some more people migrate into the district to buy buy office assets. I would say right now that's something that we're keeping our eye on interest rates and as lenders gradually come back into the market. We don't really see that the market is offering a tremendous amount of liquidity this year in office products, but we feel good about you know, our opportunities post 2024 to monetize that asset and recycle it.

是的，東尼，是保羅。我們假設 2024 年到期的房屋中約有 60% 會騰出，換算成今年這一比例略高於 4.5%，大約相當於 14,000 平方英尺。我們拿走了其中的 60%。我們仍然對水門事件的交通狀況感到滿意，我們逐漸看到越來越多的人遷移到該地區購買辦公資產。我想說，現在我們正在密切關注利率，並且隨著貸款人逐漸重返市場。我們並沒有真正看到今年市場在辦公產品方面提供大量流動性，但我們對 2024 年後我們有機會將該資產貨幣化並回收感到高興。

Okay. Thanks for the time.

好的。謝謝你的時間。

Jamie Feldman, Wells Fargo.

傑米·費爾德曼，富國銀行。

Great, thank you. I think taking the question, can you talk more about your outlook for new and renewal rate growth in the two different markets?

太好了謝謝。我想，在回答這個問題時，您能否多談談您對兩個不同市場的新增和續訂率成長的展望？

Absolutely. Jamie, the Washington metro market is showing stable trends and healthy demand, and it's going to be our primary growth driver for the year. Given the trends that we're seeing today, healthy and stable demand, strong renewals combined with favorable market rent growth outlook. We expect our Washington metro portfolio to perform very well this year and to support our growth for the portfolio overall now Atlanta is going to be a more challenged market as new supply infections are having a temporary impact on performance, as I mentioned earlier, and we don't expect to see a significant change in that in the first half of the year. However, the second half of the year could look a little better as supply will peak in approximately 70% of our Atlanta submarkets, as I mentioned by midyear and as the year progresses jurisdictions, we'll work through the eviction backlogs and we've implemented initiatives that we expect to improve our credit performance. So as a result, we would expect more favorable tailwinds over time related to that improvement. But the timing is still uncertain and we're not relying on that tailwind to meet our guidance this year.

絕對地。傑米，華盛頓地鐵市場呈現出穩定的趨勢和健康的需求，這將成為我們今年的主要成長動力。鑑於我們今天看到的趨勢，健康穩定的需求、強勁的續租以及有利的市場租金成長前景。我們預計我們的華盛頓地鐵投資組合今年將表現出色，並支持我們整體投資組合的成長，現在亞特蘭大將成為一個更具挑戰性的市場，因為新的供應感染對業績產生暫時影響，正如我之前提到的，我們預計今年上半年不會有重大變化。然而，下半年情況可能會好一些，因為我們亞特蘭大子市場約 70% 的供應將達到峰值，正如我在年中提到的，隨著轄區的進展，我們將解決驅逐積壓問題，我們已經實施了我們期望提高信用表現的措施。因此，我們預計隨著時間的推移，與這種改善相關的更有利的推動因素。但時機仍然不確定，我們不會依靠這順風來實現今年的指導。

Yes. Specifically, though, talking about the difference in blended lease rate growth across those two different markets for the portfolio as a whole, we anticipate effective blended lease rates averaging between 1% to 2% for the DC market. We're expecting that to obviously be higher with effective blend averaging in the kind of 2.5% to 3.5% range. And for Lana, we expect effective blended average in the negative low to mid-single digits through 2024.

是的。不過，具體而言，當談到整個投資組合這兩個不同市場的混合租賃率成長差異時，我們預期 DC 市場的有效混合租賃率平均在 1% 至 2% 之間。我們預計，有效混合平均在 2.5% 至 3.5% 範圍內，這一比例顯然會更高。對於 Lana，我們預計到 2024 年，有效混合平均值將處於負低至中個位數。

And then to be more granular, I mean, how does that how does new versus renewal compare in the markets? I know you said 6% as from March and April. How does I think maybe if you can answer this, the 6%. What is that in DC versus Atlanta? And then what are your expectations for the year end new versus renewal in each of the markets kind of percentage?

然後更具體地說，我的意思是，新的與更新的產品在市場上的比較如何？我知道你說的是 3 月和 4 月的 6%。如果你能回答這個問題，我覺得 6% 怎麼樣？華盛頓特區與亞特蘭大的比賽是什麼？那麼您對每個市場年底新品與續訂的預期百分比是多少？

You know, we are sending out renewals above 6%. And there's really not a major difference at this point in margin evolve between Atlanta and the DC market. I mean, obviously, there is some negotiation off of those renewal rates generally kind of 50 to 100 bps. And so that's kind of in general, where we are seeing renewal shape up right now, although if you look across the year, we're expecting our renewal growth rate to be in the low to mid-single digits, and we're expecting a low single-digit decline in new lease spreads across the year, which is what gets you to that kind of 1% to 2% blended effective average.

您知道，我們發送的續訂率超過 6%。目前，亞特蘭大和華盛頓市場之間的利潤率變化確實沒有重大差異。我的意思是，顯然，對於通常為 50 到 100 個基點的續訂率存在一些談判。因此，總的來說，我們現在看到續訂正在形成，儘管如果你縱觀全年，我們預計我們的續訂成長率將處於低至中個位數，並且我們預計全年新租賃利差小幅下降，這就是1% 至2% 混合有效平均值的原因。

Okay. So it sounds like you guys don't give exact numbers, which is fine and then I guess kind of bigger picture, Atlanta seems like you're having some issues on real estate taxes.

好的。所以聽起來你們沒有給出確切的數字，這很好，然後我想從更大的角度來看，亞特蘭大似乎在房地產稅方面遇到了一些問題。

Clearly, market conditions are a little weaker than DC, which has held up very nicely this cycle.

顯然，市場狀況比 DC 稍弱，而 DC 在本週期中表現得很好。

I mean, I know we probably ask you this every quarter, but any thoughts on additional markets even in the Sunbelt where there's just seems like there's a lot of capital looking at Atlanta is what are your latest thoughts and why you wouldn't go to other markets or even double down in DC, which has been very stable?

我的意思是，我知道我們可能每個季度都會問你這個問題，但是對其​​他市場的任何想法，即使是在陽光地帶，似乎有很多資本都在關注亞特蘭大，這就是你的最新想法以及你不去的原因其他市場甚至在DC雙倍下注，這已經很穩定了？

Let's let's talk about just what it takes for us to go to another market first and Grant, maybe you can just go through our criteria. And then Amy, I can come back in and follow up with that?

讓我們來談談我們需要什麼才能首先進入另一個市場，格蘭特，也許你可以看看我們的標準。然後艾米，我可以回來跟進此事嗎？

Sure. So on, Jamie, any market that we go to really will have what we think of as a sort of core set of commonalities that we've talked with extensively before sort of skilled labor development and the migration, diverse economy, innovative industries, a strong product for middle income residents, which I think is really key that it's targeted towards our target renter as well as demand for affordable mid-market housing. So I think whatever market we go into, those will be the type of commonality as you'll see from that attracted us to those markets in the first place that I'll turn it back over to Paul.

當然。所以，傑米，我們去的任何市場確實都會有我們認為的一套核心共性，我們在技術勞動力發展和移民、多元化經濟、創新產業、面向中等收入居民的強大產品，我認為這非常關鍵，因為它針對的是我們的目標租戶以及對經濟適用中端市場住房的需求。因此，我認為無論我們進入哪個市場，這些都將是那種共同性，正如您所看到的那樣，首先吸引我們進入這些市場，我會將其轉回給保羅。

Yes, Jamie, I think the first thing I'd say is, you know, we'd like to see some more transaction volume as we talk about migrating to other markets, we really haven't seen a lot of movement from the fourth quarter and just even talking about the fourth quarter, I mean, about 25% to 30% of the deals that we looked at were pulled from the market and did not clear in 2023. We definitely volumes. Just talking to the kind of the top three brokerages, I think all of them volumes were down year over year over 60%. It's fascinating just in terms of competing thoughts right now. If you go back a couple of cycles, especially during an election year, a lot of the transactions are done in the first half of the year on because of the election in November. People want to have their product clear the market prior to that. But this year, an election year, we're seeing a lot of brokers advise their clients to wait for interest rate decline so that they will have more participation from the lending community and stronger stronger metrics for the equity players.

是的，傑米，我想我要說的第一件事是，你知道，當我們談論遷移到其他市場時，我們希望看到更多的交易量，從第四個市場開始，我們確實沒有看到太多的變化我的意思是，我們研究的大約 25% 到 30% 的交易已從市場上撤出，並且在 2023 年尚未清算。我們絕對卷。僅與排名前三的券商交談，我認為它們的交易量都比去年同期下降了 60% 以上。就目前相互競爭的想法而言，這很有趣。如果你回顧幾個週期，特別是在選舉年，由於 11 月的選舉，很多交易都是在上半年完成的。人們希望他們的產品能夠在此之前進入市場。但今年是選舉年，我們看到許多經紀人建議他們的客戶等待利率下降，以便他們能有更多貸款界的參與，並為股票參與者提供更強有力的指標。

I think as we're looking around right now and what we're seeing out there from them in terms of kind of cap rates are core to core plus deals. We're seeing in that for 75 to five and a quarter range and value add in the upper fives to low sixes. And it's really, you know, all about the pricing of risk from from folks standpoint. But for us, you know, looking at the criteria that grant gave, I mean, I could see us and moving into like a DFW corridor and some other some other markets that not only allow us to create value and scale, but really allow us to maintain our balance sheet balance sheet strength while providing geographic diversification.

我認為，當我們現在環顧四周時，我們從他們那裡看到的上限利率是核心到核心加交易的核心。我們看到 75 到五又四分之一的範圍以及從上五到下六的增值。你知道，這實際上是從人們的角度來看風險的定價。但對我們來說，你知道，看看撥款給出的標準，我的意思是，我可以看到我們進入像 DFW 走廊和其他一些市場，這些市場不僅允許我們創造價值和規模，而且真正允許我們維持我們的資產負債表實力，同時提供地域多元化。

We've talked about the Carolinas. We have not specifically talked about the Florida markets. But I think right now there are markets that offer that. But as Steve alluded to earlier, we need to see some material changes in the capital markets for us to move forward and execute.

我們已經討論過卡羅萊納州。我們沒有具體談論佛羅裡達市場。但我認為現在有市場可以提供這種服務。但正如史蒂夫之前提到的，我們需要看到資本市場發生一些重大變化，以便我們可以繼續前進和執行。

That's really helpful. Thank you for that. And then just one last quick one. What do you think where do you think you could issue debt today, just as you're thinking about those returns and we're trying to think about your cost of capital and even paying down the line using a lot less given the rate on that just how are you thinking about your different options for raising debt?

這真的很有幫助。謝謝你。然後是最後一個快速的。你認為你今天可以在哪裡發行債務，就像你在考慮這些回報一樣，我們正在努力考慮你的資本成本，甚至考慮到利率，使用更少的資金來償還債務您如何考慮籌集債務的不同選擇？

Yes, Jamie, this is Steve. And you know, when the 10-year was below four, you know, debt debt prices were certainly coming in line with where it became very interesting to trying to do something. I think they popped up about 50 basis points. So it's making making that tougher right now, I'd say for debt with that increase is probably a little bit north of where our line is right now from a perspective over aligned.

是的，傑米，這是史蒂夫。你知道，當 10 年期利率低於 4 時，債務價格肯定會與嘗試做某事變得非常有趣的地方一致。我認為它們上漲了大約 50 個基點。因此，現在的情況變得更加困難，我想說，從過度調整的角度來看，債務的增加可能有點超出我們現在的水平。

Yes, we've got, you know, an amount on our revolver. That will, like I said before, we'll look to term it out when it makes sense. We're seeing that we think that the Fed is likely done with increases and hopefully cuts are coming to us in the back half of the year, as I've talked about before, with really no debt maturities coming up and plenty of availability over the line where we're comfortable keeping it there for the time being. But we'll that will stay at continue to monitor the debt markets and certainly look to act when we think it makes more sense.

是的，你知道，我們的左輪手槍上有一定數量的錢。正如我之前所說，我們會在有意義的時候將其明確。我們看到，我們認為美聯儲可能已經完成了加息，並希望我們能在今年下半年降息，正如我之前談到的那樣，實際上沒有債務到期，並且有足夠的可用空間我們暫時可以放心地將其保留在那裡的線。但我們將繼續監控債務市場，當我們認為更有意義時當然會採取行動。

Because you guys have an interest rate forecast in your guidance? The on-site season, even interest rate forecast in your guidance.

因為你們的指導中有利率預測嗎？現場旺季，甚至利率預測都在您的指導下。

As far as we're assuming a three cuts in the back half of the year.

就我們假設今年下半年將進行三次削減。

Okay, shy.

好吧，害羞。

Thank you.

謝謝。

John Pawlowski, Green Street.

約翰‧帕夫洛夫斯基，《格林街》。

Thanks for your time, Paul, given your comments on the transaction market, just curious what do you think most reasonable assumption is for acquisition and disposition volume for Allen this year?

保羅，感謝您抽出時間，考慮到您對交易市場的評論，我只是好奇您認為今年艾倫的收購和處置量最合理的假設是什麼？

We don't have any acquisitions or dispositions in our in our guidance this year, John, I mean we are patiently looking at the market. I think if we tried to use last year as a leading indicator, about 80% of the sellers were, you know, institutional that were really funding other parts of their business. And in the buyer's buyer market, about 80% also were private equity buyers on. We're seeing more people more people come to the table. I mean, we were talking to a broker last week. I just had a deal in one of the Texas markets that I mentioned, and they had 40 tours in two weeks. So I think there is a genuine interest in the space. There's a lot of capital of the there are 250 to 300 billion on the sidelines. I think at least 100 million of that is institutional or it's 100 billion is institutional capital waiting to commence in the multifamily space. As Steve said earlier, on the sales side, if something doesn't fit strategically or it has outsized CapEx versus relative to other growth opportunities that we're evaluating, we'll certainly consider it. But right now we're still since we've taken over operations and in some of those assets less than a year, I still think we have some upside through our operational enhancements that we've alluded to. So we won't be putting a product out there this year. I would say just an observation that we would have it is right now talking to brokers, there's kind of a scarcity premium like that sellers are seeing. We're definitely seeing bid-ask compress since we talked at Narrabri in November. And I think really both sides are just waiting for the 10-year to stabilize so that, you know, you can you can move forward with some certainty of execution.

約翰，我們今年的指導中沒有任何收購或處置，我的意思是我們正在耐心地關注市場。我認為，如果我們嘗試使用去年作為領先指標，大約 80% 的賣家是機構人士，他們真正為其業務的其他部分提供資金。而在買方的買方市場中，大約80%也是私募股權買家。我們看到越來越多的人來到談判桌前。我的意思是，我們上週正在與一位經紀人交談。我剛剛在我提到的德克薩斯州市場之一達成了一項協議，他們在兩週內舉辦了 40 場巡演。所以我認為人們對這個領域有真正的興趣。有大量資本在觀望，有250到3000億。我認為其中至少有 1 億是機構資本，或 1,000 億是等待在多戶住宅領域啟動的機構資本。正如史蒂夫之前所說，在銷售方面，如果某件事在策略上不適合，或者與我們正在評估的其他成長機會相比，其資本支出過大，我們肯定會考慮它。但現在我們仍然在接管運營，並且在其中一些資產上還不到一年，我仍然認為透過我們提到的營運增強，我們有一些優勢。因此，我們今年不會推出產品。我想說的是我們現在正在與經紀人交談的一個觀察結果，就像賣家所看到的那樣，存在某種稀缺溢價。自從我們在 11 月在 Narrabri 進行交談以來，我們確實看到了買賣壓縮。我認為雙方實際上都在等待 10 年穩定下來，這樣，你就可以在一定的執行力下向前推進。

Okay. Second question is more of a broader Atlanta market question about what's going on with fraud and eviction. It's an index rather than So and I know you can't control what's coming in the front door, your communities but in my mind, there's a decent chance. This is just a rolling issue across the market in the next few years on the Tiffany or grant or have you done any work in terms of how insulated you guys just occupied households are in Atlanta right now, reserves, how do you guys wrap your arms around the risk of kind of a multiyear bleed in market level, occupancy or rents as these issues just takes a lot longer to care than just your individual properties.

好的。第二個問題是更廣泛的亞特蘭大市場問題，即欺詐和驅逐的情況。這是一個索引，而不是所以，我知道你無法控制前門、你的社區會發生什麼，但在我看來，這是一個不錯的機會。這只是未來幾年蒂芙尼或撥款市場上的一個滾動問題，或者你們有沒有做過任何工作來了解亞特蘭大你們剛剛居住的家庭現在的隔離程度，儲備金，你們如何包裹你們的手臂圍繞市場水平、入住率或租金出現多年流失的風險，因為這些問題比您的個人房產需要更長的時間來處理。

And I can start and then I'll turn it over to Tiffany. I think at a high level, I would go back to the demand that we are seeing coming in the front door, which I think is an indicator of the depth of the market, and we are seeing a steady level of rent incomes for our new residents coming in. So this is not to say that there isn't an issue in the market. But I think at the price points that we're currently leasing, our apartments, there is a depth at those price points with commensurate incomes to support a nice, solid rent-to-income ratio that we're comfortable with from a risk profile standpoint.

我可以開始，然後把它交給蒂芙尼。我認為在高水準上，我會回到我們看到的前門需求，我認為這是市場深度的一個指標，我們看到我們的新房的租金收入處於穩定水平。居民進來。因此，這並不是說市場上不存在問題。但我認為，按照我們目前租賃的公寓的價格點，在這些價格點上有一定的深度和相應的收入，可以支持良好、穩定的租金與收入比率，從風險狀況來看，我們對此感到滿意立場。

And Tiffany, I don't know if you have anything to add to that now, may I think we talked about earlier about the pipeline and all of the initiatives that we're putting in place on, including we've tightened our income standards, we have put in place a new credit screening policies and procedures. So not only are we tightening our standards on the front end, but then we are also obviously working through the eviction process on the back end. So and I think from from a single property perspective. Greg gave you the market from a single property perspective through the course of 2024. We're going to work through this as we obviously address those who are currently delinquent. And I think the impacts of what we have put in place will help ensure that all new residents coming in the door are able to meet our credit standards and it will be high credit quality paying residents for the foreseeable future.

蒂芙尼，我不知道你現在是否有什麼要補充的，我想我們之前討論過管道和我們正在實施的所有舉措，包括我們收緊了收入標準，我們制定了新的信用篩選政策和程序。因此，我們不僅在前端收緊了標準，而且顯然我們也在後端進行驅逐流程。所以我是從單一財產的角度來思考的。Greg 從單一房地產的角度為您提供了 2024 年的市場狀況。我們將解決這個問題，因為我們顯然是在解決那些目前拖欠款項的人。我認為我們所採取的措施的影響將有助於確保所有新居民都能滿足我們的信用標準，並且在可預見的未來將成為高信用品質的支付居民。

About one last modeling housekeeping item, if I may. Stephanie, can you just give us some context of what drove the 2% sequential decline in revenue? And do you see mail and bucket initiatives?

如果可以的話，關於最後一項模特兒家政計畫。Stephanie，您能為我們介紹一下導致營收季減 2% 的原因嗎？您是否看到了郵件和儲存桶計劃？

Sure. He does. I can I can talk just more broadly and then obviously, we can also turn it over to Grant to talk about some of the market, I would say from the DC in Maryland is indeed just a dream sort of trends that we have seen with new lease rates and concessions on in a very targeted fashion on impacting just with new term near term supply in certain specific submarket. So unlike of laying out where I think some of the supply is much more widespread here in the DC market. It is much more targeted and it does impact.

當然。他是這樣的。我可以，我可以更廣泛地談論，然後顯然，我們也可以將其交給格蘭特談論一些市場，我想說，馬裡蘭州的華盛頓特區確實只是我們在新產品中看到的夢想趨勢。以非常有針對性的方式提供租賃利率和優惠，以影響某些特定子市場的新期限近期供應。因此，與我認為在華盛頓市場上的一些供應更為廣泛的地方不同。它更有針對性並且確實產生影響。

Grant, do you want to talk maybe a little bit about when some of the different suppliers in the DC, Maryland market. And then I can speak a little more specifically about how that's impacted our communities.

格蘭特，您想談談馬裡蘭州華盛頓特區市場的一些不同供應商嗎？然後我可以更具體地談談這對我們社區的影響。

Sure. Some. So in Washington, D.C. on we had by year end, about 40% of our units were in submarkets where we were already past peak and we're going to get to about 70% that are past peak by midyear in 2024. And as Stephanie said, I think in an earlier answer on, we were roughly around 30% or so in Atlanta that were past that peak by year end and similarly will be on 70% of our units will be past that peak by midyear. And I think contextually it is important to see that across our entire portfolio, our net inventory on growth across our portfolio was about 2.5% in 2024 on average versus 2.3% in 2023. So really steady. And to put that in context of the Sunbelt as a whole in the markets that we're looking at that, that increase is going to be almost 5% in 2024. So I think contextualizing, it is important and that's obviously being strengthened by our Washington DC exposure, which is a must on a more subdued level of supply coming to market this year.

當然。一些。因此，到年底，在華盛頓特區，我們大約 40% 的單位位於已經過了高峰的子市場，到 2024 年年中，我們將達到大約 70% 已經過了高峰的子市場。正如史蒂芬妮所說，我認為在先前的回答中，我們在亞特蘭大大約有 30% 左右的單位到年底就超過了該峰值，同樣，我們 70% 的單位將在年中超過該峰值。我認為，從背景來看，重要的是要看到，在我們的整個投資組合中，我們整個投資組合的淨庫存成長在 2024 年平均約為 2.5%，而 2023 年為 2.3%。所以真的很穩定。考慮到我們所關注的市場中整個陽光地帶的情況，到 2024 年這一增幅將接近 5%。因此，我認為結合實際情況很重要，而且我們在華盛頓特區的投資顯然加強了這一點，這對於今年進入市場的供應水平更加低迷來說是必須的。

Great. Thank you.

偉大的。謝謝。

(Operator Instructions) Michael Lewis, Truist Securities.

（操作員指示）Michael Lewis，Truist 證券公司。

Thank you. Did you provide new lease spreads so far for January and February on and especially maybe in Atlanta, if you have that granularity?

謝謝。到目前為止，您是否提供了 1 月和 2 月的新租賃價差，特別是在亞特蘭大（如果您有這樣的粒度）？

So we what we have provided and as I mentioned earlier, our effective blended spreads are in the 2.5% to 3.5% range in the D.C. metro area and an effective blended in Italy in a negative to low mid single digit. And that's a projection or anticipation for 2024 as a whole. But if you want to dive into just new lease rate growth and specifically, I would say year to date, we've seen a slight improvement in new lease rate growth across both of our markets, both DC and in Atlanta. But we don't really expect to see a consistent month-to-month improvement for the Atlanta portfolio until probably sometime in the second half of the year. So as I mentioned earlier, our Washington metro portfolio is performing very well, showing the stability that we'd expect to see in our core market. Over the longer term, we would expect barring Washington Metro new lease rates to see consistent month-over-month improvement heading into the spring leasing season moderating later in the year for Atlanta, we are seeing more of an impact from both new supply and the timing of evictions, as I mentioned earlier, as such as jurisdictions work through eviction backlog. So the impact of backfilling infection related vacancy has created more near term impacts on rates and occupancies, and we expect this to continue through the first half of the year with slight improvement in the second half as we move past peak supply? Yes, I think as I mentioned earlier, the bright spot is that both our DC and our Atlanta portfolios continue to benefit from very high retention and very strong renewal rates at our communities.

因此，正如我之前提到的，我們所提供的有效混合利差在華盛頓都會區為 2.5% 至 3.5% 範圍內，而在義大利的有效混合利差為負數至中低個位數。這是對 2024 年整體的預測或預期。但如果你想深入了解新租賃率的成長，具體來說，我想說的是，今年迄今為止，我們已經看到我們兩個市場（華盛頓特區和亞特蘭大）的新租賃率成長略有改善。但我們並不真正期望看到亞特蘭大投資組合逐月持續改善，直到今年下半年的某個時候。正如我之前提到的，我們的華盛頓地鐵投資組合表現非常出色，顯示出我們期望在核心市場看到的穩定性。從長遠來看，我們預計，除非華盛頓地鐵的新租賃費率在進入今年稍後的春季租賃季節時逐月持續改善，否則亞特蘭大的新供應量和租賃量都會產生更大的影響。正如我之前提到的，驅逐的時間安排，例如司法管轄區透過驅逐積壓進行工作。因此，回填與感染相關的空缺的影響對房價和入住率產生了更多的短期影響，我們預計這種情況將持續到今年上半年，下半年隨著我們超過供應高峰，情況會略有改善？是的，我認為正如我之前提到的，亮點是我們的華盛頓特區和亞特蘭大投資組合繼續受益於我們社區的極高保留率和強勁續訂率。

Okay, thanks. And then just one more for me. Kind of bigger picture. You talked about markets and the acquisitions in Atlanta, the performance there. My question's about like your ability to scale, right? I think there could be maybe the Atlantic performance as an example. That's right. I think the company could probably benefit from scaling and diversifying.

好的謝謝。然後再給我一個。有點更大的圖景。您談到了亞特蘭大的市場和收購以及那裡的表現。我的問題是關於你的擴展能力，對嗎？我想也許可以以《大西洋月刊》的表演為例。這是正確的。我認為該公司可能會從規模化和多元化中受益。

My question is really like how you do it, right. You have a balance on the line. You're you've kind of led your comments where the equity price isn't where you think it should be Watergate not going to be a good cost of capital whenever that comes. Yes. How do you think about that? Right? Do you agree like kind of the opportunity and scaling and diversifying. And then the real crux of the question, if you need some help from the capital markets, I understand that both but kind of what's the plan?How are you able to do it?

我的問題真的很像你是如何做到的，對吧。您有餘額。你的評論有點偏激，認為股價不應該達到你認為應該的水平，水門事件無論何時發生都不會成為良好的資本成本。是的。您對此有何看法？正確的？您是否同意這種機會、規模化和多元化？那麼問題的真正關鍵是，如果你需要資本市場的一些幫助，我明白，但計劃是什麼？如何你能做到嗎？

Yes, Mike, I'll start with that. And I kind of kind of mentioned it before, right that the first part is we do have assets in our kind of portfolio that could allow us to diversify. So we could we cycle out of those and into other markets, which would certainly be beneficial to further further diversify. But we've we've got a lot of levers embedded in our portfolio right now. We talk about the four and a quarter to 4.75 million of operational upside and that that we're looking that we're executing on an already accomplished 20% in 23 and looking to do another 40% or so here in 24, we're rolling out our Phase two of our smart tech tech, the smart home technology, which we think provides a lot of upside there as well. We've got our renovation pipeline, 3,300 units and in 2023 that we got the mid 10s returns that we're looking at, being able to continue to do that here in 24. And then we definitely talked about in the scripted remarks, the managed WiFi now we're starting to roll out in 2024. So we think that there's a lot of embedded growth in the portfolio that will allow us to earn a implied cap rate that we think is more appropriate of what we think we should be valued at. And we're making sure that we're going to be ready to scale when the opportunity comes. And we'll continue to look for opportunities that will work with our cost of capital and do so when we can create shareholder value.

是的，麥克，我就從這個開始吧。我之前提到過，第一部分是我們的投資組合中確實擁有可以讓我們多元化的資產。因此，我們可以擺脫這些市場，進入其他市場，這肯定有利於進一步多元化。但我們現在的投資組合中嵌入了許多槓桿。我們談論了四又四分之一至 475 萬的營運成長，我們希望在 23 年內執行已完成的 20%，並希望在 24 年內再執行 40% 左右，我們正在推出我們智慧科技的第二階段，即智慧家庭技術，我們認為這也提供了許多好處。我們已經有了 3,300 個單位的翻新管道，到 2023 年，我們將獲得我們正在考慮的 10 多美元的回報，並能夠在 24 年內繼續這樣做。然後我們在腳本演講中明確談到，我們將在 2024 年開始推出託管 WiFi。因此，我們認為投資組合中有很多內在成長，這將使我們能夠獲得隱含資本化率，我們認為該資本化率更適合我們認為應該估值的水平。我們確保在機會到來時做好擴大規模的準備。我們將繼續尋找與我們的資本成本相符的機會，並在我們能夠創造股東價值時這樣做。

Thank you.

謝謝。

Thank you. As we have no further questions online, I would like to turn the call over to management for any closing remarks.

謝謝。由於我們在網路上沒有進一步的問題，我想將電話轉給管理層以供結束語。

Thank you again, and 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 few weeks. Thank you.

再次感謝大家，我要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. This concludes today's conference and you may disconnect your lines at this time. We thank you for your participation.

謝謝。今天的會議到此結束，您現在可以掛斷電話了。我們感謝您的參與。