Elme Communities (ELME) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Elme Communities second quarter 2024 earnings conference Call. As a reminder, today's call is being recorded.

您好，歡迎參加 Elme Communities 2024 年第二季財報電話會議。提醒一下，今天的通話正在錄音。

At this time, I would like to turn the call over to Amy Hopkins, Vice President, Investor Relations. Amy, please go ahead.

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, and thank you for joining our second 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 be available on our webcast replay.

早安，感謝您參加我們的第二季財報電話會議。今天的活動正在透過網路直播，並附有幻燈片演示文稿，可在我們網站的投資者部分上觀看，並將在我們的網路廣播重播中觀看。

Statements made during this call may constitute 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, we refer to certain of these risks in our SEC filings.

本次電話會議期間發表的聲明可能構成前瞻性聲明，涉及已知和未知的風險和不確定性，可能導致實際結果出現重大差異，我們不承擔隨著實際事件的發展而更新這些聲明的義務，我們在我們的聲明中提到了其中的某些風險。

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.

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。

And with that, I'll turn the call over to our President and CEO, Paul McDermott.

接下來，我會將電話轉給我們的總裁兼執行長 Paul McDermott。

Thanks, Amy, and good morning, everyone. Presenting on the call with me today are Tiffany Butcher, our Chief Operating Officer; and Steve Freishtat, our Chief Financial Officer. Tiffany will provide an update on our operating trends and initiatives, and Steve will cover our balance sheet and outlook. Grant Montgomery, our Head of Research, is here to answer market-level questions during Q&A.

謝謝艾米，大家早安。今天與我一起參加電話會議的是我們的營運長 Tiffany Butcher；以及我們的財務長 Steve Freishtat。蒂芙尼將提供有關我們營運趨勢和舉措的最新信息，史蒂夫將介紹我們的資產負債表和前景。我們的研究主管 Grant Montgomery 將在問答環節回答市場層面的問題。

I'll start today's call with a brief market-level overview. The Washington Metro is a top-performing apartment market this year, and the region remains one of the best-positioned apartment markets nationally.

我將先簡單介紹一下市場層面的概況。華盛頓地鐵是今年表現最好的公寓市場，該地區仍然是全國定位最好的公寓市場之一。

Across our submarkets, deliveries have peaked, and net inventory ratios have normalized in the low single digits.

在我們的子市場中，交付量已達到頂峰，淨庫存比率已正常化至較低的個位數。

Our Washington Metro portfolio, which comprises over 75% of our homes, is benefiting from strong, stable demand, allowing us to drive occupancy above our targeted level for the year.

我們的華盛頓地鐵投資組合占我們房屋總數的 75% 以上，受益於強勁、穩定的需求，使我們能夠將入住率提高到今年的目標水準之上。

We believe we are positioned to capture growth in the second half of the year that will set us up well heading into 2025.

我們相信，我們有能力在下半年實現成長，這將使我們能夠順利進入 2025 年。

Turning to Atlanta. Absorption rates are accelerating, and the supply overhang continues to decline. In Elme submarkets, absorption is now nearly 60% higher than the pre-pandemic period. Our operating fundamentals are showing stability with modest improvement supported by strong retention and renewal rates. Tiffany will provide more details in her remarks.

轉向亞特蘭大。吸收速度正在加快，供應過剩持續減少。在Elme子市場，吸納量目前比疫情前高出近60%。我們的營運基本面表現出穩定性，並在強勁的保留率和續訂率的支持下略有改善。蒂芙尼將在她的演講中提供更多細節。

While supply remains elevated, it is not expected to increase materially above the current levels in any of our submarkets, and we expect the overall level of demand relative to supply to continue to improve through 2025.

雖然供應量仍然較高，但預計我們任何子市場的供應量都不會大幅高於當前水平，我們預計到 2025 年，相對於供應量的整體需求水平將繼續改善。

Moreover, units under construction and new starts have declined significantly, pointing to better conditions in 2025 and highly favorable supply/demand dynamics forecasted for 2026 and 2027.

此外，在建單位和新開工單位大幅下降，顯示 2025 年情況會更好，預計 2026 年和 2027 年供需動態將非常有利。

Our residents' financial health also remains solid. The rent-to-income ratio for new leases was 23% on average in the second quarter compared to 24% a year ago, reflecting a positive credit trend relative to rental rate growth.

我們居民的財務狀況也依然穩健。第二季新租賃的租金與營收比率平均為 23%，去年同期為 24%，反映出相對於租金率成長的正向信貸趨勢。

Employment trends remain stronger for middle-income wage earners relative to high-wage earners, and the composition of job growth is shifting in favor of non-cyclical industries, which are two favorable trends for Elme.

相對於高收入者，中等收入者的就業趨勢仍然強勁，而且就業成長的組成正在轉向有利於非週期性產業，這是對 Elme 有利的兩個趨勢。

As of the second quarter, government was our largest industry exposure in the Washington Metro and healthcare was our largest industry exposure in the Atlanta Metro. Affordability and relative value remain critical to our strategy and our rent levels are several hundred dollars below both Class a rents and the cost to own a home in our markets.

截至第二季度，政府是我們在華盛頓地鐵最大的產業敞口，醫療保健是我們在亞特蘭大地鐵最大的產業曝險。負擔能力和相對價值仍然對我們的策略至關重要，我們的租金水平比甲級租金和市場上擁有房屋的成本低數百美元。

Move-outs to purchase homes comprised just 8% of second quarter move-outs, well below the historical level in the mid-teens. Additionally, our retention rates remained historically high, averaging 65% year-to-date as our value-oriented resident base tends to be stickier with an average tenure of about 2.7 years.

遷出購屋僅佔第二季遷出的 8%，遠低於十幾歲左右的歷史水準。此外，我們的保留率仍處於歷史高位，今年迄今平均為 65%，因為我們以價值為導向的居民基礎往往更具黏性，平均任期約為 2.7 年。

As we move forward, our focus on maintaining rent levels that are affordable for the largest and most underserved segments of the rental market, combined with our efforts to enhance the Class B living experience, should continue to attract strong and steady demand from value-conscious renters.

隨著我們的前進，我們的重點是維持租賃市場中規模最大、服務最匱乏的細分市場能夠負擔得起的租金水平，再加上我們努力提升B 級生活體驗，應該會繼續吸引具有價值意識的強勁而穩定的需求租客。

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

接下來，我將向蒂芙尼討論我們的營運趨勢和成長計畫。

Thanks, Paul. The positive momentum we began to experience in April has continued and blended lease rate growth and occupancy improved sequentially during the second quarter across both the Washington and Atlanta metros.

謝謝，保羅。我們從四月開始經歷的積極勢頭仍在持續，第二季度華盛頓和亞特蘭大都會區的混合租賃率增長和入住率連續改善。

Effective blended lease rate growth increased to 3.2% for our same-store portfolio during the second quarter, comprised of renewal lease rate growth of 5.4% and new lease rate growth of 0.2%.

第二季度，我們同店投資組合的有效混合租賃率成長至 3.2%，其中續租率成長 5.4%，新租賃率成長 0.2%。

New lease rate growth increased to 0.4% in July, showing continued improvement. Renewal lease rate growth was 4.6% in July and we're signing renewals at an average rate of 4% for August and September lease expirations, reflecting gradual moderation in renewal rates through year-end, which is in line with our expectations.

7 月新租賃率成長率升至 0.4%，持續改善。7 月的續租率成長率為4.6%，我們在8 月和9 月租約到期時以平均4% 的續租率簽署續約，反映出到年底續租率逐漸放緩，這符合我們的預期。

Same-store resident retention remains very strong at 65% during the quarter, highlighting the longer-term nature of our resident base and our heightened focus on customer service excellence as part of our 2024 platform initiatives.

本季度同店居民保留率仍然非常強勁，達到 65%，這突顯了我們居民基礎的長期性，以及作為 2024 年平台計劃的一部分，我們對卓越客戶服務的高度重視。

Moving on to occupancy. Same-store average occupancy increased sequentially to 94.6% and ending occupancy increased to 95.5% in the second quarter, driven by strong demand in the Washington Metro, offset in part by the impact of new supply and the timing of evictions in our Atlanta portfolio.

繼續入住。在華盛頓地鐵強勁需求的推動下，第二季同店平均入住率較上季成長至 94.6%，期末入住率成長至 95.5%，但部分被亞特蘭大投資組合新增供應和驅逐時機的影響所抵銷。

Through July, same-store occupancy has averaged 95.3%, representing a 70 basis point increase relative to second quarter. The demand patterns that we're seeing in Northern Virginia, where the majority of our Washington Metro communities are located.

截至 7 月，同店入住率平均為 95.3%，較第二季成長 70 個基點。我們在北維吉尼亞州看到的需求模式，我們的大多數華盛頓地鐵社區都位於那裡。

Are exceptional, and occupancy averaged 96.1% for our Washington Metro communities during the quarter, increasing to an average level of 96.6% in June and 96.7% in July, which is above the upper end of our targeted range, allowing us to continue to push rents during the busiest leasing months.

非常出色，本季華盛頓地鐵社區的平均入住率為 96.1%，6 月和 7 月的平均入住率分別增至 96.6% 和 96.7%，高於我們目標範圍的上限，使我們能夠繼續推動租賃最繁忙月份的租金。

In Atlanta, while the market is experiencing an unprecedented level of new supply, market demand is improving and Atlanta occupancy averaged 89.5% during the quarter, increasing to 90.6% in July. Additionally, we have 24 homes, or just over 1% of our Atlanta portfolio, that are temporarily out of service due to a fire which detracted from our occupancy improvement.

在亞特蘭大，雖然市場正在經歷前所未有的新增供應水平，但市場需求正在改善，本季亞特蘭大入住率平均為 89.5%，7 月增至 90.6%。此外，我們有 24 套住宅（占我們亞特蘭大投資組合的 1% 多一點）因火災而暫時停止服務，影響了我們入住率的改善。

Although the timing of evictions could continue to pressure occupancy, we're seeing stable demand patterns and we're focused on driving higher occupancy over the second half of the year.

儘管驅逐的時間可能會繼續對入住率造成壓力，但我們看到了穩定的需求模式，並且我們的重點是在今年下半年提高入住率。

Turning to bad debt. Reducing bad debt is a top priority and the proactive steps that we have taken are delivering better credit performance overall. We expect to benefit from lower year-over-year bad debt in the second half of this year and even more so into 2025 as higher credit standards and credit protections at the front end of the leasing process and normalizing eviction delays at the back-end drive credit performance to a more normalized level.

轉向壞帳。減少壞帳是重中之重，我們採取的積極措施正在改善整體信用表現。我們預計，今年下半年壞帳年減，到 2025 年，隨著租賃流程前端信用標準和信用保護的提高以及後端驅逐延遲的正常化，我們將受益更多推動信用績效達到更加規範的水平。

Turning to renovations. During the second quarter, we generated an average ROI of approximately 17% on 150 home renovations. We now expect to complete approximately 475 full renovations and over 100 home upgrades this year.

轉向裝修。第二季度，我們進行了 150 次房屋裝修，平均投資回報率約為 17%。我們現在預計今年將完成約 475 項全面翻修和 100 多項房屋升級。

Looking forward, renovations continue to be a key growth driver for Elme. Our identified renovation pipeline of nearly 3,300 homes represents over 35% of our portfolio, which is more than enough runway to deliver renovation-led value creation for the foreseeable future.

展望未來，裝修仍然是 Elme 的主要成長動力。我們已確定的近 3,300 套住宅的翻新項目占我們投資組合的 35% 以上，這足以在可預見的未來提供以翻新為主導的價值創造。

Our operational initiatives remain on track as we elevate our platform to new levels of success. We're pleased to report that in June, we successfully launched our shared services department known as Elme Resident Services, focused on streamlining community operations and enhancing process efficiencies across resident account management, collections, and renewals.

隨著我們將平台提升到新的成功水平，我們的營運計劃仍然步入正軌。我們很高興地報告，六月份，我們成功推出了名為 Elme Resident Services 的共享服務部門，專注於簡化社區運營並提高居民帳戶管理、催收和續訂的流程效率。

We're excited to welcome our shared services team into their new roles within Elme.

我們很高興歡迎我們的共享服務團隊在 Elme 中擔任新角色。

This launch was supported by the successful rollout of several new technologies, including an AI platform that saves team members time by managing electronic communication with current residents, automating payment and collection efforts, and entering service requests.

此次發布得到了多項新技術成功推出的支持，其中包括人工智慧平台，該平台透過管理與當前居民的電子通訊、自動化付款和收款工作以及輸入服務請求來節省團隊成員的時間。

We're already beginning to see an increase in resident engagement with this new tool. We're also implementing new software to manage balances after move-out, reducing the amount of time our team spends attempting to collect and track payments from former residents.

我們已經開始看到居民對這項新工具的參與度增加。我們還實施了新軟體來管理搬出後的餘額，減少了我們的團隊花在收集和追蹤前居民付款的時間。

Lastly, we've partnered with a provider of flexible payment options to give our residents the ability to choose when they pay during the month while we receive cash from the provider when rent is due. With all of these tools as part of our program and a strong team in place, we are confident in our ability to achieve our multi-year goals related to this effort.

最後，我們與靈活付款方式的提供者合作，讓我們的居民能夠選擇當月付款的時間，而我們在租金到期時從提供者收到現金。憑藉所有這些工具作為我們計劃的一部分以及強大的團隊的到位，我們對實現與這項工作相關的多年目標的能力充滿信心。

This successful launch of Elme Resident Services is a key milestone to achieving the $1.7 million to $1.9 million of additional NOI and FFO from operational initiatives in 2024, which aligns with our 2023 to 2025 upside target of $4.25 million to $4.75 million.

Elme Resident Services 的成功推出是一個重要里程碑，有助於在2024 年透過營運計畫實現170 萬至190 萬美元的額外NOI 和FFO，這與我們2023 年至2025 年425 萬至475 萬美元的成長目標一致。

Beyond the initiatives that comprise our 2023 to 2025 upside target, we're also rolling out managed Wi-Fi across our portfolio in phases, starting with approximately 2,000 homes in Phase I, which are scheduled for installation during the fourth quarter.

除了構成我們 2023 年至 2025 年成長目標的舉措之外，我們還在我們的產品組合中分階段推出託管 Wi-Fi，從第一階段的約 2,000 個家庭開始，計劃在第四季度安裝。

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

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

Steven Freishtat

史蒂文‧弗賴施塔特

Thanks, Tiffany. Starting with guidance. We are tightening our 2024 core FFO per share guidance range to $0.91 to $0.95, maintaining our midpoint of $0.93. We are tightening the range and raising the midpoint of our same-store multifamily NOI growth assumption, which is now expected to range from 0.75% to 1.75% in 2024, due to stronger-than-expected performance in our Washington Metro portfolio.

謝謝，蒂芙尼。從指導開始。我們將 2024 年核心 FFO 每股指引範圍收緊至 0.91 美元至 0.95 美元，維持 0.93 美元的中點。由於我們華盛頓地鐵投資組合的表現強於預期，我們正在收緊範圍並提高同店多戶型 NOI 增長假設的中點，目前預計 2024 年的增長範圍為 0.75% 至 1.75%。

We now expect interest expense for the year to range from $37.5 million to $38.25 million. While we expect fewer rate cuts in 2024 than our outlook going into the year, our continued focus on managing our cash and debt balance as well as successful execution of our new revolving credit facility has helped us stay within our initial range, though, at a slightly higher midpoint.

我們目前預計今年的利息支出將在 3,750 萬美元至 3,825 萬美元之間。雖然我們預計 2024 年的降息幅度將低於我們對今年的展望，但我們持續專注於管理現金和債務餘額以及成功執行新的循環信貸安排，幫助我們保持在最初的範圍內，但中點略高。

Turning to our balance sheet. Annualized net debt to adjusted EBITDA was 5.6 times at quarter end, in line with our targeted range, and we continue to expect our leverage ratio to finish this year in the mid-5 times range.

轉向我們的資產負債表。截至季末，年化淨負債與調整後 EBITDA 比率為 5.6 倍，符合我們的目標範圍，我們繼續預期今年的槓桿率將在 5 倍範圍內。

As previously discussed, subsequent to quarter end, we entered into a new four-year $500 million revolving credit facility to replace the prior facility, which had been due to mature in August 2025.

如前所述，在季度末後，我們簽訂了一項新的四年期 5 億美元循環信貸額度，以取代原定於 2025 年 8 月到期的先前額度。

The new facility has two six-month extension options and an accordion feature that allows us to increase the aggregate facility to $1 billion. Our liquidity position remains strong with over $320 million available on our new revolving credit facility as of August 1. With no secured debt and the only maturity prior to 2028 being the $125 million term loan, our balance sheet remains in excellent shape.

新設施有兩個為期六個月的延期選項和手風琴功能，使我們能夠將總設施增加到 10 億美元。截至 8 月 1 日，我們的流動性狀況依然強勁，新的循環信貸額度可提供超過 3.2 億美元。由於沒有擔保債務，而且 2028 年之前唯一到期的是 1.25 億美元的定期貸款，我們的資產負債表仍然保持良好狀態。

To conclude, our second quarter performance reflects continued strength in the Washington Metro and improving trends in our Atlanta portfolio. Our renovations continue to yield very strong returns with plenty of runway ahead.

總而言之，我們第二季的業績反映了華盛頓地鐵的持續強勁以及亞特蘭大投資組合的改善趨勢。我們的翻新工程繼續帶來非常強勁的回報，並且還有廣闊的前景。

Additionally, our operational initiatives are on track and the successful launch of our shared services department represents our latest platform enhancement. Looking forward, we are still in the early innings with our operational initiatives, and we are setting the stage for further ROI-driven initiatives in 2025.

此外，我們的營運計劃正在步入正軌，共享服務部門的成功啟動代表了我們最新的平台增強。展望未來，我們的營運計畫仍處於初期階段，我們正在為 2025 年進一步的投資報酬率驅動計畫奠定基礎。

And with that, I will open it up to Q&A.

接下來，我將進行問答。

At this time, we will be conducting our question-and-answer. (Operator Instructions).

此時，我們將進行問答。（操作員說明）。

Cooper Clark with Wells Fargo.

庫柏克拉克與富國銀行。

Thank you for taking the question. Wondering if you could walk through bad debt in the quarter for the whole portfolio in Atlanta specifically. I'm wondering if you still think Atlanta bad debt could get to that 3% to 4% range by the end of the fourth quarter and that full-year '24 average of 5% to 6%.

感謝您提出問題。想知道您是否可以在本季處理亞特蘭大整個投資組合的壞帳問題。我想知道您是否仍然認為亞特蘭大的壞帳到第四季末可能會達到 3% 到 4% 的範圍，而 24 年全年的平均壞帳率可能會達到 5% 到 6%。

Cooper, this is Tiffany Butcher. Sure. Happy to answer that question. I would start off by saying in the second quarter, we saw improvement in our bad debt across both of our markets, both here in the Washington, D.C. area as well as in our Atlanta portfolio. We are now in the DMV or in the Washington Metro portfolio, we are now below 1% of bad debt. So we are definitely in the normalized range for bad debt here in the Washington Metro area.

庫珀，這是蒂芬妮·布徹。當然。很高興回答這個問題。我首先要說的是，在第二季度，我們看到兩個市場的壞帳有所改善，無論是華盛頓特區還是亞特蘭大投資組合。我們現在屬於 DMV 或華盛頓地鐵投資組合，壞帳率現在低於 1%。因此，我們肯定處於華盛頓都會區壞帳的正常範圍內。

In our Atlanta portfolio, we've continued to see improvement over where we were for the full-year of 2023, an improvement over where we were in the first quarter of '24. So in terms of our bad debt as a percentage of revenue, we are currently in the second quarter about 6.6% in our Atlanta portfolio, which is obviously continues to be above historical norms. But we have seen stability in that number.

在我們的亞特蘭大投資組合中，我們繼續看到 2023 年全年的情況有所改善，比 2024 年第一季的情況有所改善。因此，就我們的壞帳佔收入的百分比而言，目前第二季度我們亞特蘭大投資組合的壞帳比例約為 6.6%，這顯然繼續高於歷史正常水平。但我們已經看到這個數字的穩定性。

What I would say is the most recent trend that is impacting our bad debt is that we are now starting to see positive momentum in some of our Atlanta communities and counties for implementing House Bill 1203, which is the bill in Georgia that allows landlords to hire off-duty officers to execute evictions.

我想說的是，影響我們壞帳的最新趨勢是，我們現在開始在亞特蘭大的一些社區和縣看到實施眾議院法案 1203 的積極勢頭，該法案是佐治亞州允許房東僱用的法案下班的官員執行驅逐。

And that's going to be a significant improvement in Atlanta over the back half of the year because it has continued to be a challenge to gain possessions of homes, given the level of backlog there is in the sheriff’s offices in many of the Atlanta counties.

這將是亞特蘭大今年下半年的重大改善，因為考慮到亞特蘭大許多警長辦公室積壓的房屋數量，獲得房屋所有權仍然是一個挑戰縣。

So we look forward to being able to take possession of those units and then be able to turn them and ultimately release them to rent-paying tenants and that's going to be very helpful in terms of getting us to that reduced level of bad debt by year-end.

因此，我們期待能夠擁有這些單位，然後能夠將它們轉變並最終將它們釋放給支付租金的租戶，這對於讓我們逐年降低壞賬水平非常有幫助-結尾。

So I think with the implementation of House Bill 1203 along with additional efforts that we're making internally in terms of streamlining the collections process and improving our credit screening with the implementation of our new ERS team, those are the major factors that are going to help us get to that lower level of bad debt by year-end.

因此，我認為，隨著眾議院第 1203 號法案的實施，以及我們內部在簡化收款流程和通過新 ERS ​​團隊的實施改進我們的信用篩選方面所做的額外努力，這些都是將幫助我們在年底前降低壞帳水平。

Okay. Thank you. That's super helpful. And I guess just switching over to the updated NOI guidance. It seems that it's mostly expense-driven. Wondering how same-store revenue shaping up relative to expectations assumed in guidance. Clearly, some D.C. strength year-to-date on the top-line?

好的。謝謝。這非常有幫助。我想只需切換到更新的 NOI 指南即可。看來這主要是費用驅動的。想知道同店收入相對於指導中假設的預期如何變化。顯然，今年迄今，華盛頓特區的營收有一些優勢？

Yeah, Cooper. So, I mean, if we look at it, so right, the NOI, we tightened slightly raised at the midpoint -- to the midpoint at about 1.25%. Looking at the expense growth, we do see expense growth in the 5% to 6% range for this year. That is lower than what we initially forecasted coming into the year. And that's helped out by a couple of things.

是的，庫柏。所以，我的意思是，如果我們看一下，那麼，NOI，我們在中點處略微上調，收緊至大約 1.25% 的中點。從費用成長來看，我們確實認為今年的費用成長在 5% 至 6% 範圍內。這低於我們今年最初的預測。有幾件事幫助了這一點。

One is taxes, where we've just seen assessments not come in as high as we initially thought. And the second one is lower payroll. We're really starting to see the effects of the operational initiatives and the operational upside that we have out there really start to take effect. And so we're starting to see that savings take place.

一是稅收，我們剛剛看到評估結果沒有我們原本想像的那麼高。第二個是薪資較低。我們確實開始看到營運舉措的效果以及我們現有的營運優勢真正開始發揮作用。因此，我們開始看到節省的情況發生。

On the revenue side, we're seeing and we're expecting revenue to be in the 2.5% to 3% range for '24. And that's really driven, I think, by the bad debt in Atlanta that Tiffany was just talking about that we're seeing that trend in the right direction. We're just not seeing it move as quickly as we initially had thought when we came into the year.

在收入方面，我們預計 24 年的收入將在 2.5% 至 3% 的範圍內。我認為，這確實是由蒂芙尼剛剛談到的亞特蘭大壞帳所推動的，我們看到了這種趨勢朝著正確的方向發展。我們只是沒有看到它的進展像我們進入這一年時最初想像的那麼快。

Okay. Thank you very much.

好的。非常感謝。

(Operator Instructions).

（操作員說明）。

Anthony Paolone with JPMorgan.

摩根大通的安東尼保隆。

Thanks. Good morning. In Atlanta, where do you think occupancy finishes off the year in terms of how you're seeing things now?

謝謝。早安.就您現在的看法而言，您認為亞特蘭大今年的入住率如何？

Hi, Tony. It's Tiffany again. In Atlanta, we're seeing occupancy trends into the low 90%. And our guidance assumes that occupancy remains at that, kind of low 90s% range through year-end, as we continue to see kind of gradual improvement in the supply/demand dynamics in the Atlanta market. We've continued to see solid retention, which is also helping that occupancy trend, but it's just going to be a gradual improvement. And we are continuing to adjust our pricing revenue strategy to maintain occupancy in that range through year-end.

嗨，托尼。又是蒂芙尼。在亞特蘭大，我們看到入住率趨勢降至 90%。我們的指導假設到年底入住率仍保持在 90% 的低水平，因為我們繼續看到亞特蘭大市場的供需動態逐漸改善。我們繼續看到穩定的保留率，這也有助於推動入住率趨勢，但這只是一個逐步的改善。我們正在繼續調整我們的定價收入策略，以將入住率維持在該範圍內直至年底。

Okay. Thanks. And then just shifting to maybe investments in capital markets. Can you talk about maybe just update us on how much you're spending in the returns you're getting on full renovations and also just maybe some discussion about, where you're seeing sort of Class B cap rates in your markets?

好的。謝謝。然後可能會轉向資本市場的投資。您能否談談您在全面翻新方面所獲得的回報中花費了多少費用的最新情況，以及您在市場中看到的 B 類資本化率的一些討論？

I can start off by talking about the renovations and I can turn it over to Paul to talk about the capital markets. So to say in terms of renovation, we have increased the number of renovations that we're doing for the year. We're now projecting over 475 full home renovations and over 100 partial renovations or home upgrades through the remainder of the year. We're continuing to see, upper teens returns.

我可以先談談裝修，然後我可以把它交給保羅來談談資本市場。就裝修而言，我們增加了今年的裝修數量。我們現在預計在今年剩餘時間內將進行超過 475 項全面房屋翻新和超過 100 項部分翻新或房屋升級。我們將繼續看到青少年的回歸。

So, we averaged a 17% ROI on our renovations for the quarter and year-to-date. So that continues to remain a very good investment source for us, as well as we're investing in our managed Wi-Fi. I mentioned in my prepared remarks that we are launching a Phase I of over, 2,000 units of managed Wi-Fi that will be installed in the fourth quarter, which also have very strong returns. And Paul, I'll turn it over to you to talk about capital markets.

因此，本季和年初至今我們的翻修平均投資報酬率為 17%。因此，這對我們來說仍然是一個非常好的投資來源，我們也正在投資我們的託管 Wi-Fi。我在準備好的演講中提到，我們將推出第一階段的 2,000 多個託管 Wi-Fi，將於第四季度安裝，這也將帶來非常強勁的回報。保羅，我將把它交給你來談論資本市場。

Thanks, Tiffany. Tony, just in terms of, what we're seeing out there looking at the transactions market, I mean, first off, from a macro standpoint year-over-year, it's been pretty flat. And when we look at potential sellers right now that we've talked to approach, they're facing rate cut prospects plus an election and a lot of them are being advised, in many cases, just a hold and they're probably questioning why go to the market.

謝謝，蒂芙尼。東尼，就我們所看到的交易市場而言，我的意思是，首先，從宏觀角度來看，與去年同期相比，它非常平穩。當我們現在審視我們已經交談過的潛在賣家時，他們面臨著降息前景和選舉，他們中的許多人都被建議，在很多情況下，只是持有，他們可能會質疑為什麼要去市場。

The real sellers that we are seeing, remain folks with debt maturities, redemptions, or operators with some type of profit left in the promote. But that has not really helped, really accelerate and expand the volume.

我們看到的真正賣家仍然是債務到期、贖回的人，或是在促銷中留下某種利潤的經營者。但這並沒有真正起到幫助、真正加速和擴大數量的作用。

We talked to a lot of investment sales folks over the last quarter. They're expecting -- they say their pipelines are up for the second half of the year, but it's all I think it's fraught with a lot of contingencies. From a buying standpoint, institutional capital, PE shops, family offices are all in the fray. I think the only people we're really seeing on the sidelines are the Odysseys. I think the thesis right now for a lot of the new LP capital coming in is that they're buying below replacement cost.

上個季度我們與許多投資銷售人員進行了交談。他們預計——他們說他們的管道將在今年下半年啟動，但我認為這充滿了許多意外情況。從購買的角度來看，機構資本、私募股權公司、家族辦公室都在爭奪之中。我認為我們唯一真正在場外看到的人是奧德賽。我認為目前許多新的有限合夥人資本的觀點是他們正在以低於重置成本的價格購買。

And they're underwriting flat to negative residual in the first two years with a recovery in, years three through five. And that's very consistent with what, from an institutional perspective, we're seeing, even our own observations on our portfolio, the improvement runway of years '26, '27 to '28.

他們在前兩年承保的殘差持平甚至為負，而在第三年到第五年則有所恢復。從機構的角度來看，這與我們所看到的非常一致，甚至是我們自己對我們的投資組合的觀察，即 26 年、27 年到 28 年的改進跑道。

But particularly in the value-add space, we're seeing that work, that renovation work, on new acquisitions being pushed to years two and three, and that's really contingent on the supply and demand dynamics in the respective markets. I'd say what we've seen in terms of cap rates, the core cap rate, folks that are really, really pushing we're seeing those cap rates in the 4.5% to 5% range.

但特別是在增值領域，我們看到新收購的改造工作被推遲到第二年和第三年，這實際上取決於各自市場的供需動態。我想說的是，我們在資本化率、核心資本化率方面看到的情況，那些真正推動我們看到這些資本化率在 4.5% 到 5% 範圍內的人。

The core plus cap rates in the 5% to 5.5% range. And obviously, that can vary by submarket to submarket. And then the value-add space, we're seeing those cap rates probably trade between 5.5% and 6%, Tony.

核心資本化率在 5% 至 5.5% 範圍內。顯然，這可能因子市場而異。然後是增值空間，我們看到這些資本化率可能在 5.5% 到 6% 之間交易，托尼。

And just from a lending standpoint, on who's out there, the really top quality that 40% to 50% LTV, we're still seeing the insurance companies be aggressive there. But Fannie and Freddie, we know, I believe, are behind their goals as of 2Q, and they're probably going to get a little bit more aggressive on some of the rate buy-downs.

僅從貸款的角度來看，就誰而言，40% 至 50% LTV 的真正頂級質量，我們仍然看到保險公司在那裡積極進取。但我相信房利美和房地美在第二季度已經實現了他們的目標，而且他們可能會在一些利率下調方面更加激進。

We're seeing spreads at probably 150 over, and you can buy that down to the 120s, and you can end up, on, let's say, a five-year deal and a 5.25% with a full-term IO. So if we do see product coming to the market, we do expect the agencies to be a bit more aggressive in the second half, but it's really just about getting deals back to the table, given the potential for, obviously, the September rate cuts and an election coming in November.

我們看到價差可能超過 150 美元，您可以將其購買到 120 美元，您最終可以獲得五年期交易和 5.25% 的全額 IO。因此，如果我們確實看到產品進入市場，我們確實預計各機構在下半年會更加積極一些，但這實際上只是為了讓交易重新回到談判桌上，因為顯然，考慮到 9 月份降息的可能性以及十一月即將舉行的選舉。

Great rundown. Thank you both.

很棒的概要。謝謝你們倆。

Michael Gorman with BTIG.

邁克爾·戈爾曼 (Michael Gorman) 與 BTIG 合作。

Yeah. Thanks. Good morning. Maybe just a bit more of a strategic question as we tie together what you're seeing in the markets and fundamentally. And then just, Paul, some of your commentary there about the investment market and transaction markets. Are you seeing anything in some of your potential target markets as you track them, not only from a deal perspective, but from an operating perspective that maybe has caused you to change how you're thinking about potential expansion markets just due to how they've behaved in the current cycle or how they're managing to go through the current supply cycle that we're seeing now?

是的。謝謝。早安.也許更多的是一個戰略問題，因為我們將您在市場和基本面中看到的情況聯繫在一起。保羅，然後是你對投資市場和交易市場的一些評論。當你追蹤一些潛在的目標市場時，你是否看到了一些東西，不僅從交易的角度，而且從營運的角度來看，這可能導致你改變對潛在擴張市場的看法，僅僅因為它們如何「他們在當前週期中的表現如何，或者他們如何設法度過我們現在看到的當前供應週期？

Michael, I would say that it's really just -- from an underwriting standpoint, we obviously are applying just based on our portfolio experience. We're applying a lot more scrutiny on the going in rental rates. How much diminution we would probably see in that year one? I think most of the markets we're looking at that second year is probably flat. And then we are looking at positive spreads in that, that third year.

邁克爾，我想說，從承保的角度來看，我們顯然只是根據我們的投資組合經驗來申請。我們正在對租金的變化進行更多的審查。第一年我們可能會看到多少減少？我認為第二年我們關注的大多數市場可能都持平。然後我們看到第三年的正利差。

And what that's done strategically, as I said earlier, Michael, is really probably might have pushed back the timing of some of the renovations in our portfolio. I think as you know, we have over 3,000 units to renovate. We're obviously monitoring those. And then any new acquisitions that would all be part of our going in strategy in terms of when we feel like we can get in there operationally and create future value.

正如我之前所說，邁克爾，戰略上所做的事情確實可能推遲了我們投資組合中一些翻新的時間。我想如您所知，我們有 3,000 多個單位需要翻新。我們顯然正在監視這些。然後，任何新的收購都將成為我們策略的一部分，即我們認為何時可以進入營運並創造未來價值。

Okay, great. Thanks for that.

好的，太好了。謝謝你。

Thank you, Mike.

謝謝你，麥克。

Ann Chan with Green Street.

安·陳（Ann Chan）與格林街（Green Street）。

Hi, good morning. Thanks for your time. Going to your guidance, could you share what kind of changes to supply and demand assumptions are baked into the new guidance, if any?

嗨，早安。感謝您抽出時間。談到您的指導，您能否分享一下新指導中包含了哪些供需假設的變化（如果有）？

Yeah. So I would say in terms of what we're seeing that is driving our guidance is stronger-than-expected performance in the Washington, D.C. market, and Grant can talk a little bit about the supply/demand dynamics that are impacting that.

是的。因此，我想說的是，就我們所看到的推動我們指導的因素而言，華盛頓特區市場的表現強於預期，格蘭特可以談談影響這一點的供需動態。

But just kind of from an operating perspective, we have continued to see, strength in our new leasing both in the second quarter as new lease rate growth slipped from negative in the first quarter to positive in the second quarter, and we have continued to see increasing strength in that in the month of July as we're in our peak leasing season.

但從營運角度來看，我們繼續看到第二季度新租賃的強勁勢頭，因為新租賃率增長從第一季度的負增長到第二季度的正增長，而且我們繼續看到由於我們正處於租賃旺季，因此7 月的勢頭有所增強。

We've also continued to see occupancy increase significantly as there is a strong and robust demand for our product here in the Washington, D.C. area, and Grant can talk a little bit more about the demand drivers for that. But we have continued to see from first quarter to second quarter to the month of July, the occupancy continued to improve in our portfolio.

我們也繼續看到入住率顯著增加，因為華盛頓特區對我們的產品有強勁的需求，格蘭特可以更多地談論這一需求的驅動因素。但我們繼續看到，從第一季到第二季再到 7 月份，我們的投資組合的入住率持續改善。

And as we mentioned in our prepared remarks, the DMV had same-store occupancy at 96.1% in the second quarter and 96.7%. So incredibly strong occupancy, driven by the high demand and lower supply environment here in Washington. Grant, do you want to comment a little bit on that?

正如我們在準備好的發言中所提到的，DMV 第二季的同店入住率為 96.1%，第二季為 96.7%。在華盛頓高需求和低供應環境的推動下，入住率如此之高。格蘭特，你想對此發表一點評論嗎？

Sure. Ann, this is Grant. When we look at from a supply standpoint, our submarkets are performing really well and actually are set to moving in a better direction even over the next quarters than where they are currently.

當然。安，這是格蘭特。當我們從供應的角度來看時，我們的子市場表現非常好，而且實際上甚至在未來幾季都會朝著比目前更好的方向發展。

Over the first quarter second quarter, the net inventory ratio of deliveries is about 2.5%, which is well below the US level and the Sunbelt. And over the next four quarters, that's expected to decline even further to just 2.3% on average.

第一季第二季交付的淨庫存率約為2.5%，遠低於美國和陽光地帶的水平。在接下來的四個季度，預計這一數字將進一步下降至平均 2.3%。

But we are in markets where that is significantly even lower than that. So for example, in Northern Virginia, where over 60% of our homes are located, net inventory ratio is down to about 1.7% over the next four quarters. So that's really driving the tightness on the supply side.

但我們所處的市場遠低於這個數字。例如，在維吉尼亞州北部，我們超過 60% 的房屋都位於該地區，未來四個季度的淨庫存比率將降至 1.7% 左右。所以這確實加劇了供應方面的緊張。

From the demand side, we continue to see solid job growth across both markets, particularly again in our Northern Virginia market, where we have 1.6% employment growth, and even further detail there, we're really seeing strong demand in industries that particularly drive demand for our communities.

從需求方面來看，我們繼續看到兩個市場的就業成長強勁，特別是在維吉尼亞州北部市場，就業成長了 1.6%，更詳細的是，我們確實看到了特別驅動產業的強勁需求。社區的需求。

We're seeing job growth, in particular strength in education and health, construction, and local government, all of which are up over anywhere from 2% to 6% year-over-year growth. So we really see it on both sides, a tight supply in our core market tightening across our entire portfolio and continued strong job growth, in particular growth in industries that create demand for the types of homes that we provide our residents.

我們看到就業成長，特別是教育和衛生、建築和地方政府領域的就業成長，所有這些領域的年成長率都在 2% 到 6% 之間。因此，我們確實看到了雙方的情況，我們整個投資組合的核心市場供應緊張，就業持續強勁增長，特別是為我們為居民提供的住房類型創造需求的行業的增長。

Great. Thank you. And just wondering if you could also give a breakdown of the 1.3% blended rate expected for the rest of this year for this year?

偉大的。謝謝。只是想知道您是否也可以詳細說明今年剩餘時間預計的 1.3% 混合利率？

Sure. We can absolutely walk through that. So in terms of where we're expecting for the full-year to be in terms of blended lease rate growth, we're expecting kind of new rate to be in the negative 1% to positive 1% range for the full-year. We're expecting renewal rates to be in the 3.5% to 4.5% range for the full-year. And we're expecting, therefore, the blends to be in the 1.5% to 2.5% for the full-year.

當然。我們絕對可以解決這個問題。因此，就我們對全年混合租賃利率成長的預期而言，我們預計全年新利率將在負 1% 到正 1% 的範圍內。我們預計全年續約率將在 3.5% 至 4.5% 之間。因此，我們預計全年的混合比例將在 1.5% 至 2.5% 之間。

Great. Thank you.

偉大的。謝謝。

Cooper Clark with Wells Fargo.

庫柏克拉克與富國銀行。

Hey, thanks for taking the follow-up. I just wanted to circle back on, Paul, some of your comments around pricing. Given your implied cap rate today and some of the pricing commentary, wondering if you thought about picking up capital recycling, specifically out of your Maryland portfolio or maybe some of your district assets. Wondering if that's something you're looking at as we kind of move through the rest of the year here?

嘿，感謝您的關注。保羅，我只是想回顧一下您對定價的一些評論。考慮到您今天的隱含資本化率和一些定價評論，想知道您是否考慮過回收資本，特別是從您的馬裡蘭州投資組合或您的一些地區資產中回收資本。想知道在今年剩下的時間裡，您是否正在關注這一點？

Cooper, we always are looking at our portfolio, and we're looking at recycling. I think, as you know, we have the Watergate, which is definitely a recycling candidate. And we're watching the D.C. market slowly but steadily improve and I think we'll have some positive things to talk about the Watergate going forward.

庫珀，我們一直在關注我們的產品組合，我們正在考慮回收。我想，正如你所知，我們有水門事件，它絕對是一個回收候選人。我們正在觀察華盛頓市場緩慢但穩定的改善，我認為我們將有一些積極的事情來談論水門事件的發展。

We are have at our disposal, I believe outside of a, a good balance sheet with optionality and liquidity, we do have the assets that you mentioned to look at as recycling candidates. And I wouldn't say that that is, at the top of our list right now. I think we've got a lot of very proactive initiatives to drive value for the shareholders.

我相信，除了具有選擇性和流動性的良好資產負債表之外，我們還可以使用您提到的可作為回收候選的資產。我不會說這是我們現在的首要任務。我認為我們有很多非常積極的措施來為股東創造價值。

But we will as we progress throughout the balance of the year, we will look at those assets. That's really going to depend on market conditions right now. And we don't have plans to actually do any recycling from now through December. But in terms of just preserving optionality, we would probably move forward with the guidance that we've provided to you, Cooper.

但隨著今年剩餘時間的進展，我們將關注這些資產。這實際上取決於目前的市場狀況。從現在到 12 月，我們沒有實際進行任何回收的計劃。但就保留選擇性而言，我們可能會按照我們向您提供的指導繼續前進，庫柏。

Okay. Great. And then I guess just one for Steve. You've talked about potentially doing something on the unsecured side if pricing gets closer to 6%. Wondering where you're seeing pricing today in the unsecured market and thoughts around raising any incremental debt for the right acquisition opportunity as opposed to using the capacity on your LLC?

好的。偉大的。然後我想這就是史蒂夫的一個。您曾談到，如果定價接近 6%，則可能會在無擔保方面採取一些措施。想知道您目前在無擔保市場上的定價情況以及為正確的收購機會籌集增量債務而不是使用有限責任公司的產能的想法嗎？

Yeah. So, Cooper, thanks for the question. Yeah, very timely, given the movements in the 10-year. So I'd say, given a lot of the movements in the last week or so, if we were to do new unsecured debt, it would probably be in the high-5s% and then secured debt maybe a little bit inside of that.

是的。所以，庫珀，謝謝你的提問。是的，考慮到十年來的變化，非常及時。所以我想說，考慮到上週左右的許多變動，如果我們要發行新的無擔保債務，它可能會在 5% 左右，然後有擔保債務可能會在這個範圍內一點點。

So we're definitely rates are much more attractive than they were when we were coming into the year. We certainly have we just redid our credit facility, of course, so that pushed out our maturity until ‘28, but we do have a balance there that we could certainly look to term out, at the right time.

因此，我們確信利率比進入今年時更具吸引力。當然，我們剛剛重新調整了信貸安排，因此將我們的到期日推遲到了 28 點，但我們確實有餘額，我們當然可以在適當的時候將其到期。

And as far as acquisitions go, we feel like we've created a balance sheet that creates a lot of optionality. So there are a lot of different ways we could go with that. I would say that from a leverage perspective, again we're right where we want to be right in line with our, leverage governors.

就收購而言，我們覺得我們已經創建了一個資產負債表，創造了很多選擇。所以我們可以採取很多不同的方式來實現這一點。我想說，從槓桿的角度來看，我們再次處於我們希望與我們的槓桿管理者保持一致的位置。

And so if we do find an opportunity out there, I'd say it's probably on what Paul just spoke about a moment ago. Capital recycling and recycling assets is probably our top choice right now of being able to finance an opportunity if we were to find something.

因此，如果我們確實找到了機會，我想說這可能是保羅剛才談到的。資本回收和資產回收可能是我們現在的首選，因為如果我們要找到一些東西，就能夠為一個機會提供融資。

Okay. Thank you.

好的。謝謝。

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

謝謝。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 I look forward to keeping you updated on our progress and speaking with many of you again in the very near future. Thank you.

謝謝。我要再次感謝大家今天的時間和興趣。我期待著向你們通報我們的最新進展，並在不久的將來再次與你們中的許多人交談。謝謝。

You this does conclude today's call. You may disconnect your lines at this time and have a wonderful day, and we thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路並祝您度過愉快的一天，我們感謝您的參與。