Essex Property Trust Inc (ESS) 2024 Q3 法說會逐字稿

Ladies and gentlemen, good afternoon, and welcome to the Essex Property Trust third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們、先生們，下午好，歡迎參加埃塞克斯房地產信託 2024 年第三季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Angela Kleiman, President and CEO. Please go ahead, ma'am.

現在我很高興向您介紹主持人，總裁兼執行長安吉拉·克萊曼 (Angela Kleiman)。請繼續，女士。

Good morning. Thank you for joining Essex's third quarter earnings call. Barb Pak will follow with prepared remarks, and Roland Burns is here for Q&A.

早安.感謝您參加艾塞克斯第三季財報電話會議。Barb Pak 隨後將發表準備好的講話，Roland Burns 將在此進行問答。

We are pleased to report our third guidance raise this year as a result of another healthy quarter with core FFO per share exceeding the midpoint of our guidance range. Today, my comments will focus on our performance year-to-date preliminary considerations for 2025 and an update on the investment market.

我們很高興地報告今年第三次上調指導意見，這是由於本季度又一個健康的季度，核心 FFO 每股超過了我們指導範圍的中點。今天，我的評論將集中在我們對 2025 年迄今為止的業績的初步考慮以及投資市場的最新情況。

Starting with highlights to date. Notable milestones this year include record low turnover, excellent progress resolving delinquency, and positive inflection points in several key demand drivers. These factors, combined with muted level of new housing supply, have enabled Essex to deliver results exceeding the high end of our original 2024 expectations.

從迄今為止的亮點開始。今年的顯著里程碑包括創紀錄的低營業額、解決拖欠問題的出色進展以及幾個關鍵需求驅動因素的積極轉折點。這些因素，加上新住房供應水準低迷，使得艾塞克斯的業績超出了我們最初 2024 年預期的上限。

Year-to-date, we've achieved solid results with market rents generally trending consistent with historical patterns as shown in the chart on page S13.2. In the third quarter, rents peaked in July and remained resilient through August before moderating in September. As we expected, the blended rate growth of 2.5% for the quarter was tempered by the combination of seasonal moderation in rents, which started in September and difficult year-over-year comparison. Especially since last year, our rents did not moderate until late October.

今年迄今為止，我們取得了堅實的成果，市場租金的趨勢總體上與歷史模式一致，如第 S13.2 頁的圖表所示。第三季度，租金在 7 月達到頂峰，並在整個 8 月保持彈性，然後在 9 月放緩。正如我們預期的那樣，本季 2.5% 的綜合成長率受到 9 月開始的租金季節性放緩以及難以進行同比比較的影響。特別是從去年開始，我們的租金直到十月下旬才緩和下來。

As we enter the fourth quarter, our market remains stable, we shifted our operating strategy to focus on occupancy as we've done in prior years in anticipation of slower demand characteristic of normal seasonality. Moving to regional highlights. Seattle has been a top performer this year, delivering a strong 3.8% blended rig growth in the third quarter. The side, where we have approximately 70% of our portfolio with our strongest markets with 4.7% winter growth. For the rest of the year, we anticipate a heavier supply delivery and thus more concessions usage in this region.

隨著進入第四季度，我們的市場保持穩定，我們將營運策略轉向專注於入住率，正如我們在前幾年所做的那樣，因為預計正常季節性的需求將放緩。轉向區域亮點。西雅圖今年表現最佳，第三季混合鑽機成長強勁，達 3.8%。另一方面，我們大約 70% 的投資組合來自最強勁的市場，冬季成長率為 4.7%。在今年剩餘時間裡，我們預計供應量將會增加，因此該地區將有更多的優惠使用。

Northern California has performed well, achieving 2.3% blended rate growth in the third quarter, led by Santa Clara County was 3.6%. The overall supply for this region remains very low, but we anticipate most of the deliveries for San Jose this year to occur in the fourth quarter. Therefore, we plan for higher concessions to address this short-term impact.

北加州表現良好，第三季綜合成長率為 2.3%，其中聖克拉拉縣的成長率為 3.6%。該地區的總體供應量仍然非常低，但我們預計今年聖荷西的大部分交付將發生在第四季度。因此，我們計劃做出更高的讓步來應對這一短期影響。

On to Southern California, which achieved 2.1% blended lease rate growth in the third quarter. These rates in this region were tempered by headwinds related to delinquency recovery in Los Angeles. Excluding LA, this region produced a 3.5% blended rate growth for the third quarter. While the exact timing is difficult to pinpoint, we are cautiously optimistic that new lease rates will begin to recover next year in LA as volume of delinquent units continue to subside.

南加州第三季綜合租賃率成長 2.1%。該地區的這些比率受到洛杉磯拖欠率追收相關不利因素的影響。不包括洛杉磯，該地區第三季綜合成長率為 3.5%。雖然確切的時間很難確定，但我們謹慎樂觀地認為，隨著拖欠單位數量繼續減少，明年洛杉磯的新租賃率將開始恢復。

Heading into year-end, we are well positioned in 96.1% financial occupancy for October with year-over-year comps easing in November and December. Turning to our expectations for 2025. We we've provided high-level revenue drivers on Page 162 of the supplemental. We expect our earnings for next year to surpass what was achieved in 2024, ranging from 80 to 100 basis points.

進入年底，我們的 10 月財務入住率處於 96.1% 的有利位置，而 11 月和 12 月的年比比較有所放緩。轉向我們對 2025 年的期望。我們在補充資料的第 162 頁上提供了高級收入驅動因素。我們預計明年的獲利將超過 2024 年的水平，增幅為 80 至 100 個基點。

Additionally, we anticipate a 40 to 60 basis points tailwind from delinquency improvements. Combined, these two components should generate approximately 120 to 160 basis points of same-property revenue growth in 2025. As for market rent growth, supply and demand will ultimately be the key building blocks. The fundamental backdrop remains stable and continues to gradually improve.

此外，我們預計拖欠率改善將帶來 40 至 60 個基點的推動。到 2025 年，這兩個組成部分應會帶來約 120 至 160 個基點的同業收入成長。至於市場租金的成長，供給和需求最終將是關鍵的組成部分。基本面保持穩定並持續逐步向好。

On the supply side, detailed on page 16 of the supplemental, we expect total supply growth of only 50 basis points in 2025. This is consistent with the lower level of supply in 2024 and well below our long-term average of 1% for our markets. On the demand side, we've seen positive inflection points in several major demand drivers this year.

在供應方面，如補充資料第 16 頁所述，我們預計 2025 年總供應量成長僅為 50 個基點。這與 2024 年較低的供應水準一致，並且遠低於我們市場 1% 的長期平均值。在需求方面，今年我們看到幾個主要需求驅動因素出現了正面的轉折點。

Job postings as the top 20 technology companies have been steadily recovering, demonstrating a sentiment shift from retrenchment in 2023 to positioning for future growth. Additionally, these same companies continue to increase their return to office requirements which has resulted in increased demand to San Jose and Seattle regions.

排名前 20 名的科技公司的職位發布一直在穩步復甦，表明人們的情緒從 2023 年的裁員轉向為未來的成長做好準備。此外，這些公司繼續提高返回辦公室的要求，導致聖荷西和西雅圖地區的需求增加。

Related to this is migration back to our markets, which has steadily improved and is rebalancing towards historical patterns. Given the low supply environment in the Essex markets, we are well positioned to achieve new lease rate growth with incremental demand. Lastly, on the transaction market, strong investor interest for multifamily properties on the West Coast has resulted in cap rates trading consistently in the mid-4% range with numerous transactions in the low 4%.

與此相關的是回流到我們市場的情況，該市場已穩步改善，並朝著歷史模式重新平衡。鑑於埃塞克斯市場供應不足的環境，我們處於有利位置，可以透過增量需求實現新的租賃率成長。最後，在交易市場上，投資者對西海岸多戶型房產的濃厚興趣導致資本化率一直在 4% 的中段範圍內交易，其中許多交易在 4% 的低段範圍內。

Within this competitive landscape, our investment team has done a terrific job originating several opportunities at better than market yields, acquiring over 1,700 units to date totaling over $700 million at our pro rata share. We continue to execute transactions with attractive returns relative to our cost of capital and we are confident in our ability to generate opportunities to drive NAV and FFO per share accretion for our shareholders.

在這種競爭格局中，我們的投資團隊做得非常出色，以高於市場的收益率創造了多個機會，迄今為止按我們的比例收購了 1,700 多個單位，總價值超過 7 億美元。我們繼續執行相對於我們的資本成本而言具有吸引力的回報的交易，並且我們有信心為我們的股東創造機會，推動每股資產淨值和每股 FFO 的增加。

Finally, I'll conclude with a brief comment on California Proposition 33. It is no surprise to anyone that excessive regulation dramatically restrict housing production in California, leading to high cost of housing. As such, we have joined Governor Newsom in endorsing a no vote on Proposition 33. We all know that building more housing is the only solution to the state's housing shortage.

最後，我將對加州 33 號提案進行簡短評論。過度的監管極大地限制了加州的住房生產，導致住房成本高昂，這對任何人來說都不足為奇。因此，我們與紐瑟姆州長一起對 33 號提案投了反對票。我們都知道，建造更多住房是解決州內住房短缺問題的唯一方法。

With that, I'll turn the call over to Barb.

這樣，我就把電話轉給倒鉤。

Thanks, Angela. I'll begin by briefly discussing our third quarter results, followed by comments on the remainder of 2024 and conclude with investments in the balance sheet.

謝謝，安吉拉。我將首先簡要討論我們的第三季業績，然後對 2024 年剩餘時間發表評論，最後以資產負債表中的投資作為結束。

I'm pleased to report third quarter core FFO per share of $3.91, a $0.04 beat to the midpoint of our guidance range. The outperformance was primarily driven by higher same-property revenues. For the full year, we are raising the midpoint of core FFO for a third consecutive quarter by $0.06 to $15.56 per share which represents 3.5% year-over-year growth.

我很高興地報告第三季度核心 FFO 每股 3.91 美元，比我們指導範圍的中點高出 0.04 美元。表現優異主要是因為同業收入增加。就全年而言，我們連續第三個季度將核心 FFO 中點提高 0.06 美元，至每股 15.56 美元，年增 3.5%。

A key contributor to the full year increase relates to same-property revenue growth, which has outperformed our expectations. As such, we are raising our midpoint by 25 basis points to 3.25% growth for the year. The increase is driven by lower delinquency and higher other income. With no change to our expense outlook, we expect same-property NOI growth of 2.6%, a 30 basis point increase at the midpoint.

全年成長的關鍵因素是同物業收入成長，這超出了我們的預期。因此，我們將今年的成長率中點上調 25 個基點至 3.25%。這一增長是由拖欠率下降和其他收入增加所推動的。在我們的費用前景不變的情況下，我們預計同物業 NOI 將成長 2.6%，中間值成長 30 個基點。

Turning to investments. Year-to-date, we've acquired approximately $700 million in multifamily properties at pro rata share, which has been funded on a leverage-neutral basis with $200 million of dispositions $450 million of proceeds from structured finance redemptions and free cash flow and $25 million in OP units.

轉向投資。今年迄今為止，我們已按比例收購了約7 億美元的多戶型房產，這些房產是在槓桿中性的基礎上提供資金的，其中包括2 億美元的處置、4.5 億美元的結構性融資贖回和自由現金流收益以及25 美元的收益。

As it relates to our structured finance book, we have received $106 million in cash redemptions through October and anticipate an additional $40 million for the balance of the year. We've reinvested these funds into new acquisitions, which offer the most attractive risk-adjusted return today given the growth potential in our markets. While the strategic reallocation results in short-term FFO dilution growing the company via apartment acquisitions, improves the quality of our cash flow and the long-term growth profile of our portfolio.

由於這與我們的結構性融資帳簿相關，截至 10 月我們已收到 1.06 億美元的現金贖回，預計今年剩餘時間還將收到 4,000 萬美元的現金贖回。我們已將這些資金再投資於新的收購，鑑於我們市場的成長潛力，這些收購提供了當今最具吸引力的風險調整回報。雖然策略重新分配導致短期 FFO 稀釋，但透過公寓收購使公司不斷發展，提高了我們現金流的品質和投資組合的長期成長狀況。

This, in turn, drives better NAV and core FFO growth for our shareholders. Looking to 2025, we expect between $100 million to $150 million of redemptions with up to 50% expected by the end of the first quarter. Barring a change in the investment landscape, we are most likely to redeploy these proceeds into acquisitions, resulting in a continued reduction of the structured finance book and better alignment with our target range for this business at 3% to 5% of core FFO.

這反過來又為我們的股東帶來更好的資產淨值和核心 FFO 成長。展望 2025 年，我們預計贖回金額將在 1 億至 1.5 億美元之間，預計到第一季末將達到 50%。除非投資環境發生變化，否則我們最有可能將這些收益重新部署到收購中，從而導致結構性融資帳目持續減少，並更好地符合我們對該業務佔核心 FFO 3% 至 5% 的目標範圍。

Finally, a few comments on the balance sheet. Over the last several years, we have opportunistically refinanced our debt maturities early when we see an attractive issuance window. We continued that trend this quarter as we issued $200 million in 10-year unsecured bonds and an effective rate of 5.1%. With a manageable debt maturity schedule next year, we have ample flexibility to be opportunistic.

最後，關於資產負債表的一些評論。在過去的幾年裡，當我們看到有吸引力的發行窗口時，我們會趁機提前為債務到期再融資。本季我們繼續這一趨勢，發行了 2 億美元的 10 年期無擔保債券，有效利率為 5.1%。明年的債務到期時間表是可控的，我們有足夠的彈性來把握機會。

Overall, our balance sheet remains in a strong position with low leverage as defined by net debt-to-EBITDA at 5.5 times. In addition, with over $1 billion in liquidity and ample sources of available capital the company is well positioned.

整體而言，我們的資產負債表仍處於強勢地位，槓桿比率較低（淨負債與 EBITDA 比率為 5.5 倍）。此外，憑藉超過 10 億美元的流動性和充足的可用資本來源，該公司處於有利地位。

I will now turn the call back to the operator for questions.

我現在將把電話轉回給接線員詢問問題。

(Operator Instructions) Nick Yulico, Scotiabank.

（操作員指示）Nick Yulico，豐業銀行。

Hey, good morning. This is Daniel Tricarico on with Nick. Wanted to ask a question on bad debt with the 50 basis points of improvement in 2025, what gives you the confidence LA Alameda County will normalize like your other markets? And just to confirm your comment, Angela, from your prepared remarks, this assumption would imply maybe broader supply/demand fundamentals should improve in those markets as well.

嘿，早安。我是丹尼爾·特里卡里科 (Daniel Tricarico) 和尼克的節目。想問一個關於 2025 年壞帳改善 50 個基點的問題，是什麼讓您有信心洛杉磯阿拉米達縣將像其他市場一樣正常化？安吉拉，為了證實您的評論，根據您準備好的言論，這一假設意味著這些市場的更廣泛的供需基本面也應該有所改善。

Hey Daniel, thanks for your question. With respect to LA Alameda, a couple of things are happening on the ground that gives us also some confidence that things are improving. So for example, delinquency in terms of just the volume, let's start there. It has really improved.

嘿丹尼爾，謝謝你的問題。關於洛杉磯阿拉米達，當地發生的一些事情也讓我們對事情正在改善充滿信心。例如，就數量而言的拖欠率，讓我們從這裡開始。它確實有所改善。

In fact, our at year-end last year in December, our delinquency as a percentage of rent for LA was almost 5%. Today, it's at 1.6%. So that is significant progress. And we've seen a direct correlation with the courts continue to move through the eviction and that's been a key to continuing that trend.

事實上，截至去年 12 月，我們的拖欠率佔洛杉磯租金的百分比幾乎為 5%。今天，這一數字為 1.6%。所以這是重大進步。我們看到，在驅逐過程中，與法院的直接相關性持續存在，這是延續這一趨勢的關鍵。

But as far as just general economic viability for LA. A couple of things that actually has given us a positive sign. So for example, we have, of course, the World Cup coming in the Olympics. And so what we are anticipating is that there will be benefits from economic investments, both domestically and internationally to this region. But further, just this week, Governor Newsom proposed to double California's film and television tax credit program from current $330 million to about $750 million. So these are all great signs that we're seeing that gives us that level of optimism, if you will.

但就洛杉磯的總體經濟可行性而言。有幾件事實際上給了我們積極的信號。舉例來說，當然，我們在奧運舉辦了世界盃。因此，我們預計該地區將從國內和國際經濟投資中受益。但更進一步的是，就在本週，紐瑟姆州長提議將加州的電影和電視稅收抵免計劃從目前的 3.3 億美元增加一倍至約 7.5 億美元。所以，如果你願意的話，這些都是我們看到的偉大跡象，讓我們感到樂觀。

Great. Thank you. As a follow-up, you mentioned signs of -- I think you mentioned signs of improving tech job backdrop, not something you necessarily heard from office landlords. So maybe you could expand a bit more where and what you're seeing specifically related to that.

偉大的。謝謝。作為後續行動，你提到了一些跡象——我認為你提到了科技工作背景改善的跡象，而不是你從辦公室房東那裡聽到的。因此，也許您可以進一步擴展您所看到的與此相關的地點和內容。

Sure. No, happy to. So we track the openings of the top 20 tech companies. And that is -- it's just the closest thing to apples-to-apples that we can see, and they're really the drivers of the overall health of the technology sector. And so we follow that and we use a third-party independent report -- and we have seen that for the first time in almost two years, the job openings have reached pre-COVID averages.

當然。不，很高興。因此，我們追蹤了 20 強科技公司的空缺職位。也就是說，這是我們能看到的最接近的情況，它們確實是科技業整體健康發展的驅動力。因此，我們遵循這一點，並使用第三方獨立報告——我們看到，近兩年來，職缺首次達到了新冠疫情前的平均水平。

And it's a good start because openings is an indication that these companies will be positioning to hire in the future. The one thing that I'll ask that you keep in mind is that this is a lumpy trend, and it's not an immediate impact. But obviously, things are going in the right direction here.

這是一個很好的開端，因為職缺表明這些公司將在未來進行招募。我要請您記住的一件事是，這是一種不穩定的趨勢，並且不會立即產生影響。但顯然，事情正在朝著正確的方向發展。

Eric Wolfe, Citi.

埃里克·沃爾夫，花旗銀行。

Thanks. It's Nick Joseph here with Eric. Appreciate the '25 building blocks. I guess my question is just around pricing strategy going forward. I mean, you've laid out kind of the improving bad debt situation, particularly in Southern California, continued low supply. So half percentage point next year. How are you thinking about the ability to actually push on the new lease side? And how are renewals going out over the next 30 and 60 days?

謝謝。這是尼克約瑟夫和艾瑞克。欣賞 '25 的構建模組。我想我的問題只是圍繞著未來的定價策略。我的意思是，你已經列出了壞帳狀況的改善，特別是在南加州，供應持續低迷。所以明年會增加半個百分點。您如何看待實際推動新租賃的能力？未來 30 和 60 天內的續約情況如何？

Hey Nick, that's a great question, Angela here. On the -- in terms of our operating strategy, -- we have shifted to an occupancy for strategy in the fourth quarter, and that is typical to address the seasonal slow demand that's characteristic of our business. That's not anything unusual.

嘿尼克，這是一個很好的問題，安琪拉在這裡。就我們的營運策略而言，我們已轉向第四季度的入住策略，這通常是為了解決我們業務特徵的季節性需求放緩。這沒什麼不尋常的。

What we are expecting is the deceleration that we have seen in September and October, which we, of course, are factored into our guidance. to the headwinds that caused those to start to abate. And so for example, in October last year, just to give you one data point, our concessions was only half a week. And this year, it's about a week. Well, that doesn't seem like a big number, half a week is -- represents 1% of rent.

我們預期的是 9 月和 10 月看到的減速，當然，我們已將其納入我們的指導中。導致這些因素開始減弱的逆風。例如，去年10月，只給您一個數據點，我們的讓步只有半週。而今年，也就一週左右。嗯，這似乎不是一個大數字，半週——相當於租金的 1%。

So you can see the year-over-year impact on the financials. But as far as the renewal is concerned, we're sending renewals out in the mid-4s. So a strong number. Consistent with our plan. And early indication is that we're landing around the high 3s once again, also well within the range.

因此，您可以看到對財務狀況的逐年影響。但就續訂而言，我們將在 4 月中旬發送續訂。所以這是一個強大的數字。與我們的計劃一致。早期跡象表明，我們再次落在高 3 分左右，也完全在這個範圍內。

Typically, the negotiations range from 0 to 100 basis points, and this is kind of in the middle of that. So these are all good indications for the rest of the year and our ability for pricing power in next year to come.

通常，談判的範圍是 0 到 100 個基點，而這就是中間的情況。因此，這些都是今年剩餘時間以及我們明年定價能力的良好跡象。

Thanks. That's very helpful. And then just on I guess, the potential repeal of cost on to understand all the arguments of -- on the policy side. But if it were to pass, right, so if the repeal occurred, how do you think about what could happen kind of over the following few months? And what is your exposure to municipalities that have some form of rent control currently?

謝謝。這非常有幫助。然後我想，可能會廢除成本，以理解政策方面的所有論點。但如果它通過了，對吧，如果廢除了，你如何看待接下來幾個月會發生什麼？目前實行某種形式租金管制的城市對您的影響有多大？

Yeah, that is a really good question. And we kind of battle internally on how to think about this risk. Let me just start with a couple of data points that I think may be useful in an assumption like this because it is a very difficult hypothetical question to answer. And the reason that's the case is because right now, every city in California can enact rent control on buildings older than 1995.

是的，這是一個非常好的問題。我們內部就如何思考這種風險進行了鬥爭。讓我從幾個數據點開始，我認為這些數據點可能對這樣的假設有用，因為這是一個非常難以回答的假設問題。之所以會出現這種情況，是因為目前加州的每個城市都可以對 1995 年以上的建築物實施租金管制。

We have about 483 cities in California. And believe it or not, only about 8% of these cities have been active rent control. And with a lot of these cities where the rent control is actually quite moderate. And so as far as Prop 33 is concerned, 23 mayors have actually came out and announced that they were against Proposition 33.

加州約有 483 個城市。不管你信不信，這些城市中只有約 8% 採取了積極的租金管制措施。其中許多城市的租金管制其實相當溫和。而就33號提案而言，實際上已有23位市長站出來宣布反對33號提案。

And some of these mayors are the same ones that out have in that the rent control like San Jose, for example, and So it's for us to try to interpolate something that is so unlikely -- it's just -- it's too difficult to predict. But more importantly, on the campaign itself, what we're seeing is that this is following the same pattern as the 2018 and the 2020 pattern. And both times, they were defeated by a landslide. And so I understand that there's an overhang in our stock just because it isn't unknown.

其中一些市長與聖荷西等租金管制的市長是一樣的，所以我們需要嘗試插入一些不太可能的東西——這只是——太難預測了。但更重要的是，就活動本身而言，我們看到這遵循了與 2018 年和 2020 年相同的模式。而兩次，他們都以壓倒性的優勢被擊敗。所以我知道我們的庫存過剩只是因為它不是未知的。

But what we're seeing is that the public and the legislators, they understand the impact of something this onerous. And in fact, this is evidenced by the most expensive cities in California are the ones with the most onerous on control like San Francisco and Santa Marca and the ones with the highest brands. So the net is that the campaign continues to gain momentum, and we are confident this will be defeated.

但我們看到的是，公眾和立法者了解如此繁重的事情的影響。事實上，加州最昂貴的城市是控制最繁重的城市，如舊金山和聖馬卡，也是品牌最高的城市，就證明了這一點。因此，最終的結果是，這場運動繼續取得勢頭，我們有信心這場運動會被擊敗。

Haendel St. Juste, Mizuho Securities.

Haendel St. Juste，瑞穗證券。

Hey good morning, guys. So a couple of questions from me. I think in your prepared remarks, Angel, you mentioned that rents last year did not moderate until October. So you had tough comps this year in September in October, but it looks like the comps are getting easier ahead. So I guess I'm curious what you're sending out for renewals here today and any color on October new lease rates -- but more broadly, is there a scenario where we can see a reacceleration in blends on these easy comps? Just curious what's kind of embedded in your near-term outlook here.

嘿，早上好，夥計們。我有幾個問題。安吉爾，我認為在您準備好的發言中，您提到去年的租金直到十月份才放緩。所以今年九月十月的比賽很艱難，但看起來接下來的比賽會變得更容易。所以我想我很好奇你們今天在這裡發送的續約內容以及十月份新租賃費率的任何顏色 - 但更廣泛地說，是否存在我們可以看到這些簡單比較的混合重新加速的情況？只是好奇您的近期展望中包含了什麼。

Hey, Haendel. Good morning, thanks for your question. So we are sending new renewals out in the mid-4s. And so far, the early indication and those who have signed leases are lending in the high 3s. So say it's 3.9%, 3.8% on average. So these are definitely good trends and positive indication.

嘿，亨德爾。早安，謝謝你的提問。因此，我們將在 4 年代中期發送新的續訂。到目前為止，早期跡象和那些已經簽署租約的人的貸款額都在前三名左右。所以說是3.9%，平均是3.8%。所以這些絕對是好的趨勢和正面的跡象。

As far as the possibility of reacceleration, it's certainly possible just because, as I mentioned, rents continue to increase through October last year. So that's one factor. Renewals remain strong. And if nothing else, we just don't have the same headwind in November, December this year as we did last year. And so that is a possibility.

至於重新加速的可能性，這當然是可能的，因為正如我所提到的，去年十月租金持續上漲。這是一個因素。續訂依然強勁。如果不出意外的話，今年 11 月和 12 月我們不會遇到去年那樣的逆風。所以這是一種可能性。

Okay. And then you also mentioned again this quarter seeing positive in migration. More employees enforcing return office mandates and now tech job growth for the first time in years being back to pre-COVID levels. So I guess I'm curious if you're seeing any of that translate into better demand applications, things which could forebode kind of more demand or pricing power of rent growth into early into next year. Thanks.

好的。然後您也再次提到本季看到了移民的積極變化。更多員工執行返回辦公室指令，現在科技職位的成長多年來首次恢復到新冠疫情前的水準。所以我想我很好奇你是否看到其中任何一個轉化為更好的需求應用，這可能預示著明年年初租金增長的更多需求或定價能力。謝謝。

Yeah, Haendel, that's a good question. A couple of things on the immigration front. We are seeing that this year has benefited our numbers. And especially if you look at the job growth environment, it's generally not robust for the US and the West Coast. It's stable, and it's moving along.

是的，亨德爾，這是個好問題。移民方面的一些事。我們看到今年我們的數字受益匪淺。尤其是如果你看看就業成長環境，你會發現美國和西岸的就業成長環境整體上並不強勁。它很穩定，並且一直在前進。

And so for us to be able to outperform, its demand coming from elsewhere relative to our original forecast. And so in terms of predicting how that is going to impact. Next year, it's too early to tell really for two reasons. One is that we do believe most of the return to office benefit were captured this year. And I'll give you a point -- one data point, which is our in migration.

因此，為了讓我們能夠跑贏大市，相對於我們最初的預測，它的需求來自其他地方。因此，就預測這將如何影響而言。明年，現在下結論還為時過早，原因有二。一是我們確實相信今年大部分的重返辦公室福利都已獲得。我會給你一個觀點——一個數據點，這是我們的遷移情況。

Our in-migration as a percentage of our total leases, it's not yet to pre-COVID level, but it's pretty darn close. So that's one good indication. So maybe you can say we've captured 70%, 75% of the return to office. So there's some left for next year, but it's not going to be as robust as this year.

我們的移民佔總租賃量的百分比尚未達到新冠疫情前的水平，但已經非常接近了。這是一個很好的跡象。所以也許你可以說我們已經獲得了 70%、75% 的重返辦公室。所以明年還有一些，但不會像今年那麼強勁。

But what will really drive demand and for housing next year is going to be all about job growth. Fortunately, for us, with low demand, our base case is very low risk. Having said that, we'll need better indication on a macro level where the consensus job forecast is going to land and what that will mean for the West Coast because we are still all somewhat interrelated to the entire economy.

但明年真正推動需求和住房的將是就業成長。幸運的是，對我們來說，由於需求較低，我們的基本狀況風險非常低。話雖如此，我們需要在宏觀層面上更好地表明共識就業預測將在哪裡實現，以及這對西海岸意味著什麼，因為我們仍然與整個經濟有一定的相互關聯。

Steve Sakwa, Evercore ISI.

Steve Sakwa，Evercore ISI。

Could you provide a little bit of color on the cap rate pricing on the sort of different acquisitions that you did as well as the dispositions.

您能否提供一些關於您所做的不同收購以及處置的上限定價的資訊。

Hey Steve, Rylan here. Yes, we were pleased to buy out two of our joint venture partners in the third quarter, and these were long-running negotiations. In both cases, we had debt maturing, which necessitated conversation. And we believe we are able to buy those at very attractive basis, probably 20% to 25% discounts to replacement cost today at yields in the high 4s.

嘿史蒂夫，瑞蘭在這裡。是的，我們很高興在第三季收購了兩家合資夥伴的股份，這些都是長期談判。在這兩種情況下，我們的債務都已到期，因此需要進行對話。我們相信我們能夠以非常有吸引力的價格購買這些產品，可能比今天的重置成本有 20% 到 25% 的折扣，收益率高達 4 美元。

So we think better than market pricing. In one instance, we were able to also negotiate an OP unit transaction at a 305-strike price, which was when we negotiated, it was -- stock was around $270. So that was a necessary requirement for us to make that deal pencil an accretive basis. Subsequent to quarter end, the portfolio transaction that was noted in the release, this is similar to the portfolio that we did earlier in the year where market cap rates are in the low 5s, given this is a slightly older portfolio, but one that we've owned for many, many years.

所以我們的想法比市場定價好。在一個例子中，我們還能夠以 305 的執行價格協商一筆 OP 單位交易，當時我們協商的股票價格約為 270 美元。因此，這是我們使這筆交易成為增值基礎的必要條件。在季度末之後，新聞稿中提到的投資組合交易，這與我們今年早些時候所做的投資組合類似，考慮到這是一個稍舊的投資組合，但我們的投資組合的市值在5 左右。

We've invested in we know very well. And with our basis as we were already majority owners is going to cap rate to Essex -- closer to Essex. The disposition subsequent to order and in San Mateo, this was a 76-year old asset and approximately a 5 cap to Essex inclusive of capital. And the thinking there is that we are seeing better risk-adjusted opportunities elsewhere, and we're able to redeploy that capital into higher returning investments.

我們投資了我們非常了解的領域。根據我們已經是多數股東的基礎，我們將把艾塞克斯的利率上限——更接近艾塞克斯。訂單後的處置在聖馬特奧，這是一項已有 76 年歷史的資產，大約為埃塞克斯的 5 倍，包括資本。我們的想法是，我們在其他地方看到了更好的風險調整機會，我們能夠將這些資本重新部署到更高回報率的投資中。

Okay. And I realize development may be still a bit of a dirty word, but how are you guys thinking about future developments? And where would developments perhaps pencil today on current costs and in-place rents, I'm trying to just figure out how far away you think you might be from being able to start some new projects?

好的。我意識到發展可能仍然是一個有點骯髒的詞，但是你們如何看待未來的發展？就當前成本和就地租金而言，今天的發展可能會在哪裡，我試圖弄清楚您認為您距離能夠啟動一些新專案還有多遠？

Yeah. No, it's a good question. It's something we've been really focused on here over the past year. So as you know, we haven't started a new development for almost five years. The risk-adjusted returns just really didn't make sense.

是的。不，這是一個好問題。這是我們在過去一年裡一直非常關注的事情。如您所知，我們已經近五年沒有開始新的開發案了。風險調整後的報酬確實沒有意義。

What we've seen more recently is that I think others are recognizing the challenging return environment, and we've seen capital pullback. So permits are starting to come down, hard costs are starting to come down.

我們最近看到的是，我認為其他人正在認識到充滿挑戰的回報環境，我們看到了資本撤退。因此，許可證開始減少，硬成本開始下降。

So if you can secure land at an attractive basis and design an efficient building, I'd say we're getting closer. So -- we have a history of being a cyclical developer. And I think with others pulling back, we are sharpening our pencils. And we'll have more to come here in the next several quarters.

因此，如果你能以有吸引力的基礎獲得土地並設計高效的建築，我想說我們就更接近了。所以——我們有作為週期性開發商的歷史。我認為，在其他人退縮的同時，我們正在削鉛筆。在接下來的幾個季度中，我們將有更多的活動來到這裡。

Alexander Goldfarb, Piper Sandler.

亞歷山大·戈德法布，派珀·桑德勒。

Good morning out there. Two questions. First, Angela, you mentioned some comments around supply in -- on the east side of Seattle, and I think you also mentioned maybe with San Jose. But just big picture collectively, can you just sort of outline the supply picture that you're looking at? How much of the portfolio you think it impacts? And if it's just sort of in the next six months or if you think it's something that extends longer and impacts more of '25?

早安.兩個問題。首先，安吉拉，您提到了有關西雅圖東側供應的一些評論，我想您也可能提到了聖荷西。但從總體上看，您能否概述一下您正在查看的供應情況？您認為這對投資組合有多少影響？如果它只是在接下來的六個月內發生，或者你認為它會持續更長時間並影響更多的「25」？

Yeah. Hey Alex, good question there. On the supply landscape, we do see that the San Jose impact should only really be more concentrated in the fourth quarter, maybe a little bit leads over in the first quarter because it all really depends on how the delivery occurs.

是的。嘿亞歷克斯，這是個好問題。在供應格局上，我們確實看到聖荷西的影響力應該只會更加集中在第四季度，也許在第一季度會稍微領先一些，因為這實際上取決於交付方式。

So for example, if they all come at once or if they going to go pro rata over the next several months, it'll have a different impact. But having said that, San Jose as far as -- or the total stock is still very low. We're talking about, for the full year, 2,400 units that's supposed to be delivered.

例如，如果它們同時出現，或者在接下來的幾個月內按比例出現，就會產生不同的影響。但話雖如此，聖荷西的總庫存仍然很低。我們討論的是，全年預計交付 2,400 台。

Unfortunately, about 1,100 of those happening in the fourth quarter, but it's still very low, and this is why we expect that absorption to occur quickly. And well, yes, there will be some concessions involved. It's not going to be a as challenging as what we've seen, for example, in Downtown LA or Oakland. It's a very different beast. And it should -- we should get past it within, say, three months or four months or something along those lines.

不幸的是，其中大約 1,100 起發生在第四季度，但仍然非常低，這就是為什麼我們預計吸收很快就會發生。嗯，是的，會有一些讓步。這不會像我們在洛杉磯市中心或奧克蘭所看到的那樣具有挑戰性。這是一種非常不同的野獸。我們應該在三個月或四個月之類的時間內克服它。

Seattle is a little bit more in terms of the supply overall. I mean, generally, it has been a higher supply delivery market with, say a little bit above 1% of total supply. And so having a shift from the east side, we believe that impact will start in the fourth quarter. and probably continue in the first quarter, what has helped Seattle in the past and what we continue to see the benefit is that Seattle has also generated the highest level of demand in the market.

西雅圖的整體供應量要多一些。我的意思是，總的來說，這是一個供應量較高的市場，比方說略高於總供應量的 1%。因此，由於東邊的轉變，我們相信影響將在第四季開始。並且可能會在第一季繼續下去，過去對西雅圖有幫助並且我們繼續看到的好處是西雅圖也產生了市場上最高水平的需求。

So -- with a higher level of job growth, we have -- we expect that the demand or the supply will be absorbed timely. And so while there will be a temporary concession environment, it's not -- it shouldn't be prolonged because that's how it's been every year with Seattle.

因此，隨著就業成長水準的提高，我們預計需求或供應將被及時吸收。因此，雖然會有一個臨時的特許環境，但它不應該延長，因為西雅圖每年都是這樣。

Okay. And then, Barb, a question for you on the recycling. As you guys whittle down the preferred and debt book and recycle into assets sort of in aggregate, especially as we think about '25, is there some sort of pennies or some sort of way that we can think about the dilution impact? Is it $0.05, $0.10? Is it more than that? Just trying to get a sense of how we should think about the redeployment from the preferred and debt book into income-producing assets?

好的。然後，Barb，有一個關於回收的問題。當你們削減優先股和債務帳簿並回收到總體資產時，特別是當我們考慮'25時，是否有某種便士或某種方式可以讓我們考慮稀釋影響？是 0.05 美元還是 0.10 美元？還不止這些嗎？只是想了解我們應該如何考慮從優先股和債務帳簿重新部署到創收資產？

Yeah. Hi Alex, that's a good question. I think what you can do is we're losing at 10% on the preferred and we're redeploying it around 5%. And so that's kind of the impact that you're seeing from an FFO perspective. But what I did talk about on the call was we're targeting 3% to 5% of our core FFO per share.

是的。嗨，亞歷克斯，這是一個很好的問題。我認為你能做的就是我們在首選方案上損失 10%，然後重新部署它，損失大約 5%。這就是您從 FFO 角度看到的影響。但我在電話會議上談到的是，我們的目標是每股核心 FFO 的 3% 到 5%。

In 2024, we were at about 5.5%. So structured finance is about 5.5% of our 2024 core FFO. We do expect that will moderate to the low 4% range next year as A lot of our redemptions this year were back-end loaded. And then we have some front-end loaded redemptions next year. And so we do expect it to moderate throughout next year. But we should have higher NOI as well as we are redeploying this money back into acquisitions.

2024 年，這一比例約為 5.5%。因此，結構性融資約占我們 2024 年核心 FFO 的 5.5%。我們確實預計明年這一比例將降至 4% 的低水平，因為今年我們的許多贖回都是後端加載的。然後明年我們會有一些前端加載的兌換。因此，我們確實預計明年的情況會有所放緩。但我們應該有更高的 NOI，我們正在將這些資金重新部署到收購中。

Adam Kramer, Morgan Stanley.

亞當‧克萊默，摩根士丹利。

Hey, thanks for the time. Just wanted to ask about the kind of advocacy expense, lobbying expense that was disclosed this quarter. Maybe just quantify kind of what it was this quarter and maybe what it's been year-to-date as well? And then if there's more to come here in 4Q still given kind of the timing of the election versus the timing of the quarter end.

嘿，謝謝你的時間。只是想問一下本季披露的宣傳費用、遊說費用。也許只是量化本季的情況以及今年迄今的情況？然後，如果第四季還有更多的事情發生，仍然要考慮到選舉的時間與季度末的時間。

Hi Adam, it's Barb. So in the third quarter, we spent $10 million year-to-date, we're at $16 million. And for the full year, our guidance assumes a little over $30 million on the advocacy front.

嗨亞當，我是巴布。因此，在第三季度，我們年初至今花費了 1,000 萬美元，目前為 1,600 萬美元。對於全年，我們的指導假設在宣傳方面的投入略高於 3000 萬美元。

Got it. And are you able to split out whether that's kind of Prop 33 versus Prop 34 versus maybe, I don't know, the other legislative lobbying efforts?

知道了。你能否區分這屬於第 33 號提案、第 34 號提案，還是其他立法遊說活動（我不知道）？

No. It's all related to mostly Prop 33 and 34, but we don't have -- I don't have that breakout in front of me.

不。這一切都與第 33 號和第 34 號提案有關，但我們沒有——我面前沒有那個突破。

Jamie Feldman, Wells Fargo.

傑米·費爾德曼，富國銀行。

Great. Thank you. So I think you renewed your insurance policy in December. Can you give us your initial thoughts on how that's looking and maybe just frame what you're seeing and hearing on the commercial property insurance market overall?

偉大的。謝謝。所以我認為您在 12 月更新了保險單。您能否向我們介紹一下您對這一情況的初步想法，或者只是概括一下您在整個商業財產保險市場上所看到和聽到的情況？

Hi Jamie, it's Barb. We have a good memory. We are in the midst of our insurance renewal right now. It's a little too early to know how it's going to play out. But what we have seen in the industry this year is a moderation in insurance premium increases.

嗨，傑米，我是巴布。我們有一個美好的回憶。我們現在正在進行保險續保。現在知道事情會如何發展還為時過早。但今年我們在業界看到的是保費成長放緩。

So just to give some history, the last two years, we've seen our premium increase 20% to 30% annually. And we do expect that it will moderate from there next year, but the level is a little difficult to discern at this point. We'll obviously have more color on our fourth quarter call.

回顧歷史，過去兩年，我們的保費每年增長 20% 到 30%。我們確實預計明年會放緩，但目前的水平有點難以辨別。顯然，我們第四季的電話會議將會有更多的內容。

Okay. And I know you're not obviously in Florida, but are you hearing like that spills over everywhere in the country? Or do you think you'll be relatively isolated from the impact?

好的。我知道你顯然不在佛羅裡達州，但你聽說這種情況蔓延到全國各地了嗎？或者您認為您會相對免受影響嗎？

That's a good question. It's something that is playing out as we speak. And the November renewal didn't see too big of an impact that we heard. But obviously, we're going after both hurricanes hit. So a little tricky to answer that question right now, and we're in the midst of those discussions at this point.

這是個好問題。就在我們說話的時候，這件事正在上演。11 月的續訂並沒有帶來我們所聽到的太大影響。但顯然，我們正在應對兩場颶風的襲擊。現在回答這個問題有點棘手，我們目前正在進行這些討論。

Josh Dennerlein, Bank of America.

喬許‧丹納林，美國銀行。

Hey, everyone. Thanks for the time. I was looking at Exhibit or, I guess, page S16.1 in the supplemental. Could you just kind of go over that earn in? I see that you added includes concession impact. So I just kind of want to clarify what that means and maybe how we should think about it versus like our models out here?

嘿，大家。謝謝你的時間。我正在查看附錄中的附件，或者我猜是 S16.1 頁。能簡單回顧一下收入嗎？我看到您添加了包括特許權影響在內的內容。所以我只是想澄清這意味著什麼，也許我們應該如何思考它而不是像我們這裡的模型一樣？

Yeah, Josh, this is Barb. So the earn-in is consistent with how we calculate it last year. It's really just taking the leases that we've signed through October. And then our projections for November, December? And what does that kind of carry forward next year, assuming no market rent growth next year.

是的，喬什，這是巴布。所以收益與我們去年的計算方式一致。這其實只是我們已經簽署的十月份的租約。那我們對 11 月、12 月的預測是什麼呢？假設明年市場租金沒有成長，那麼明年會發生什麼事？

And it doesn't include concessions because concessions are below the line. This is just that gross rent, not including any concessions. I don't think it's too dissimilar from how the industry calculates this number, but 90 basis points is our projection at this point based on the leases signed. Does that answer your question or --?

而且它不包括優惠，因為優惠是在底線以下的。這只是總租金，不包括任何優惠。我認為這與行業計算這個數字的方式並沒有太大不同，但 90 個基點是我們目前根據簽署的租賃進行的預測。這是否回答了你的問題或——？

Yeah. No, I appreciate that part. That makes sense. And then maybe just why have you just kind of thinking about like the capital recycling -- do you guys think you'll lean into maybe taking out or consolidating additional JVs versus just like outright open market purchases of income-producing assets? Or is it just kind of opportunity set driven?

是的。不，我很欣賞那部分。這是有道理的。然後，也許你們為什麼要考慮資本回收——你們是否認為你們會傾向於刪除或整合額外的合資企業，而不是直接在公開市場購買創收資產？或者這只是一種機會驅動的？

Hey Josh, the joint venture business has really been an efficient source of capital. And so it has and will continue to benefit the company through various points of the cycle. We have great partners who want exposure to West Coast housing. And they like investing alongside a company like Essex that's financially aligned and can provide a best-in-class operating platform.

嘿，喬希，合資企業確實是一個有效的資金來源。因此，它已經並將繼續在周期的各個階段使公司受益。我們有一些想要接觸西海岸住房的優秀合作夥伴。他們喜歡與埃塞克斯這樣的公司一起投資，這些公司在財務上保持一致，可以提供一流的營運平台。

So in 2024, from Essex's perspective, we saw an opportunity to purchase communities that we knew well. We had invested in for many years and most importantly, was accretive to shareholders. Going forward, we still have 7,700 units that are owned in joint venture partnerships, and it's going to be a function of our discussion with partners, our cost of capital and the opportunity set in the market. So we are open and eagerly looking at all avenues to grow.

因此，在 2024 年，從埃塞克斯的角度來看，我們看到了購買我們熟悉的社區的機會。我們已經投資多年，最重要的是，為股東帶來了增值。展望未來，我們仍然擁有 7,700 個合資夥伴單位，這將取決於我們與合作夥伴的討論、我們的資本成本和市場機會。因此，我們持開放態度，熱切地尋找所有成長途徑。

John Kim, BMO Capital Markets.

約翰金 (John Kim)，BMO 資本市場。

Thank you. I wanted to ask about the spread that you have between renewal and new leases this quarter. It was 330 basis points. Over the last two years, it's been 350. A lot of your peers are at 600 basis points or more in some cases. So it seems like your renewals are a little bit more sensitive to market rents than maybe some others. And I'm wondering why that's the case.

謝謝。我想詢問本季續租和新租之間的價差。為 330 個基點。過去兩年，這個數字已經達到了350。在某些情況下，許多同業的利率都達到 600 個基點或更高。因此，您的續約似乎比其他一些人對市場租金更敏感。我想知道為什麼會這樣。

Hey John, it's Angela here. I don't know if our renewals and market rent sensitivity is really what's driving the spread. I think it's more the operating strategy that's driving the spread. And so what we focus on is maximizing revenues.

嘿約翰，我是安琪拉。我不知道我們的續約和市場租金敏感度是否真的是推動價差的原因。我認為更多的是營運策略推動了傳播。因此，我們關注的是收入最大化。

And so we try to send renewals out where we anticipate what the market is going to be a month or two from today. And negotiate as needed along the way. And of course, that strategy is influenced by whether we're focusing on occupancy and what else is happening, the supply landscape, the job landscape. And so we try to factor all of that with our maximizing total revenue in mind.

因此，我們嘗試將續訂發送到我們預測的一兩個月後的市場狀況。並在此過程中根據需要進行談判。當然，該策略受到我們是否關注入住率以及其他正在發生的事情、供應情況、就業情況的影響。因此，我們嘗試將所有這些因素考慮在內，以實現總收入最大化。

What we have seen is some of our peers are more focused on, say, getting a higher lease -- new lease rate and some are more focused on just getting higher renewal rates, for example. And when you focus on one, of course, there's going to -- it's going to impact the others. And if it's not a rate impact, it's going to be an occupancy impact.

我們看到的是，我們的一些同行更注重獲得更高的租約——新的租賃率，而其他同行則更注重獲得更高的續租率。當然，當你專注於其中一個時，它就會影響其他人。如果這不是對房價的影響，那麼也會對入住率產生影響。

So ultimately, I know it's -- I'm probably giving you more color than what you're asking for. But ultimately, I do think that we all have different levers that we are pulling. And our business objective is focused on maximizing revenue, not a specific rate per se.

所以最終，我知道——我可能給你的顏色比你想要的更多。但最終，我確實認為我們都有不同的槓桿。我們的業務目標專注於收入最大化，而不是具體的費率本身。

Sure. But I mean, in the case of some companies, they -- the move out to buy a home is at all-time lows. I'm wondering what that ratio is for you right now. But because of that all-time low, they're able to push renewals maybe harder than one would expect versus new leases. So I'm wondering because home prices are so high in your markets, does that present potential upside for you going forward as far as, I don't know, pushing me a little bit more renewals.

當然。但我的意思是，就某些公司而言，他們搬出去買房的人數處於歷史最低點。我想知道現在這個比例對你來說是多少。但由於這段歷史最低點，他們能夠比人們預期的新租約更難推動續約。所以我想知道，因為你們市場的房價如此之高，這是否會為你們帶來潛在的上行空間，我不知道，從而推動我更多的續約。

Yeah, John, that's a good question. For us, the move out to buy homes has not been a meaningful factor in our pricing strategy, whether it's now or in prior cycles primarily because it's a smaller percentage. So for example, pre-COVID, during say more -- even when interest rates were very low our move out to buy homes is somewhere around 10 percentage range.

是的，約翰，這是個好問題。對我們來說，無論是現在還是之前的周期，外出購屋在我們的定價策略中都不是一個有意義的因素，主要是因為它所佔的比例較小。舉例來說，在新冠疫情爆發之前，即使利率非常低，我們搬出去買房的比例也在 10% 左右。

So it's already very low. And the cost to own a home is back then, almost 2 times. I think it was 1.8 times more expensive to buy a home than to rent. Today, the move-out ratio is about 5%. So it's about half. Having said that, we're talking about a 3 -- almost 2.8%, so almost 3% or 3 times more expensive to own than to rent. So that incremental increase on that cost of ownership really isn't going to move the needle on our pricing strategy because it's already so expensive.

所以它已經很低了。而擁有一棟房子的成本幾乎是當時的兩倍。我認為買房比租房子貴1.8倍。如今，遷出率約5%。所以大約是一半。話雖如此，我們談論的是 3——幾乎 2.8%，所以擁有比租賃貴近 3% 或 3 倍。因此，所有權成本的逐步增加實際上不會改變我們的定價策略，因為它已經非常昂貴了。

Linda Tsai, Jefferies.

琳達·蔡，杰弗里斯。

Hi. Maybe just related to some of the topics you covered earlier. Just with comparisons getting a little easier from here, would you expect new rate -- new lease rates inflect more positively for the last two months?

你好。也許只是與您之前討論的一些主題相關。只是從這裡開始比較變得容易一些，您是否會期望新的利率 - 新的租賃利率在過去兩個月中會出現更積極的變化？

Hey Linda, it's Angela here. That's what we are anticipating. And so new rates obviously went negative in October, and this started in September. But with the easier year-over-year comp, we do expect a inflection point where it either becomes neutral or trends positive.

嘿琳達，我是安琪拉。這就是我們所期待的。因此，新利率在 10 月明顯變為負數，並且這種情況從 9 月開始。但隨著同比比較容易，我們確實預期會出現一個拐點，要嘛變得中性，要嘛趨於積極。

Thank you. And a quick question for Barb. Could you provide some color on your refinancing plans for the upcoming 2025 maturities and maybe what kind of impact that would have on earnings for next year?

謝謝。向倒鉤問一個簡單的問題。您能否介紹一下即將到來的 2025 年到期的再融資計劃，以及這會對明年的收益產生什麼樣的影響？

Yeah, Linda, that's a great question. We're constantly monitoring the market. And most of the maturities that are due next year is $500 million in unsecured bonds. So we'll be looking at the bond market to refinance that in the near term. I think it depends on the tenor and where the treasury is at.

是的，琳達，這是一個很好的問題。我們不斷監控市場。明年到期的債券大多是 5 億美元的無擔保債券。因此，我們將在短期內關注債券市場為其再融資。我認為這取決於期限和金庫在哪裡。

When we issued the 10-year paper in August, we were at 5.1%. Today, that's -- we're probably 30 basis points wide of that today. And so there will be an earnings impact because we're rolling off a 3.5% coupon bond and going up into the low 5s. But in terms of opportunities to refinance it, we'll continue to anchor the market to see if there's a window. That's a more attractive opportunity.

當我們 8 月發行 10 年期債券時，利率為 5.1%。今天，我們的利率可能比今天高了 30 個基點。因此，獲利將會受到影響，因為我們將發行 3.5% 的票面債券，並將其升至 5% 左右。但就再融資機會而言，我們將繼續錨定市場，看看是否有機會。這是一個更有吸引力的機會。

John Pawlowski, Green Street.

約翰‧帕夫洛夫斯基，《格林街》。

Hey. Thanks for the time. I wanted to drill into the return to office team some more and use Seattle as a case study. So -- can you share any specific metrics to help us understand how the leasing conditions have improved since Amazon and a few others have announced stricter return to office policies and now ostensibly housing choices need to change ahead of those mandates becoming effective. So would love to hear how either foot traffic or leasing spreads have shifted in recent weeks and months.

嘿。謝謝你的時間。我想進一步深入了解重返辦公室團隊，並以西雅圖為案例研究。那麼，您能否分享任何具體指標來幫助我們了解自從亞馬遜和其他一些公司宣布更嚴格的重返辦公室政策以來租賃條件如何改善，現在表面上住房選擇需要在這些規定生效之前改變。因此，我很想知道最近幾週和幾個月來人流或租賃價差如何變化。

Hey John, that's a good question. So in Seattle, what we have seen is our demand increase or in fact spike when Amazon and some of these other companies first announced a return to office. And I think back then, it was three days. And so we saw that direct correlation.

嘿約翰，這是個好問題。因此，在西雅圖，當亞馬遜和其他一些公司首次宣布重返辦公室時，我們看到的是我們的需求增加或實際上激增。我想當時只有三天。所以我們看到了這種直接的相關性。

And usually, it was within, say, 30 to 45 days of that announcement. And as far as we're fast worded today, with the announcement of Amazon going full time in January, the question here is going to be, when do they start enforcing it because that's when we will see the benefit. So when Amazon first announced their return to office, they also said they were enforcing it right away. And this time, we're waiting to see how -- if that's going to hold true as well.

通常，會在公告發布後 30 到 45 天內完成。就我們今天的措辭快而言，隨著亞馬遜宣佈在一月份開始全職工作，這裡的問題是，他們什麼時候開始執行它，因為那時我們就會看到好處。因此，當亞馬遜首次宣布重返辦公室時，他們也表示將立即執行。這一次，我們正在等待，看看這是否也成立。

Okay. And then last one for me, Angela, Barb, I want to talk about the exclusion of the advocacy costs from core FFO. I just get frustrated when a lot of money gets excluded from these metrics. So as these regulatory efforts become more recurring in nature, they're episodic, but they're definitely not onetime. How do you guys just deliberate internally as they become more recurring, still excluding meaningful expenses from core FFO?

好的。最後一個問題是我，Angela，Barb，我想談談從核心 FFO 中排除宣傳成本的問題。當很多錢被排除在這些指標之外時，我只是感到沮喪。因此，隨著這些監管工作變得更加頻繁，它們是間歇性的，但絕對不是一次性的。當它們變得更加頻繁時，你們如何在內部進行審議，但仍然從核心 FFO 中排除有意義的費用？

Yeah, John, that's a good question. I mean we don't see them as recurring every year. And in this case, we haven't had any cost since 2020 on this front. So it's been four years. And so we do have a plan in terms of how -- what we define as nonrecurring costs, and this is one of them.

是的，約翰，這是個好問題。我的意思是我們並不認為它們每年都會重複出現。在這種情況下，自 2020 年以來我們在這方面沒有任何成本。就這樣，四年過去了。因此，我們確實有一個關於如何定義一次性成本的計劃，這就是其中之一。

I think it's pretty standard in the industry, but it's something that we do revisit regularly, and we've been transparent about how much we're spending. And so we're not trying to hide from it. But we don't see it reoccurring every year.

我認為這在行業中是相當標準的，但我們會定期重新審視這一點，而且我們對支出金額一直保持透明。所以我們不想逃避它。但我們並沒有看到它每年都會重複發生。

Julien Blouin, Goldman Sachs.

朱利安布盧因，高盛。

Yeah. Thank you for the question. Rylan, maybe digging into your comments on the JV acquisition front. I guess, how many of those 7,000-plus remaining JV units would you ultimately be interested in consolidating if you had the opportunity? And do most of those have sort of significant Prop 13 benefits that help your yield as a buyer sort of come in closer to that 6% buyer cap rate you've been getting?

是的。謝謝你的提問。Rylan，也許可以深入研究您對合資企業收購的評論。我想，如果有機會的話，您最終有興趣整合這 7,000 多個剩餘合資企業中的多少個？其中大多數是否都具有第 13 號提案的顯著優勢，可以幫助您作為買家的收益接近您所獲得的 6% 的買家上限利率？

Hi Julien, the fact that we've made these investments to begin with would suggest that we would like to own all of them if we had the opportunity. But -- and several of them are structured in such a way that we would have a Prop 13 benefit. But that being said, we have great partnerships, and our strategy or plan is not to consolidate all of them.

你好，朱利安，我們一開始就進行了這些投資，這一事實表明，如果有機會，我們希望擁有所有這些投資。但是——其中一些的結構方式使我們能夠從第 13 號提案中受益。但話雖這麼說，我們擁有良好的合作關係，但我們的策略或計劃並不是要整合所有這些夥伴關係。

We will continue to evaluate opportunities as joint venture maturities come forward or as debt maturities come forward. So it represents an opportunity, but we are committed to this business, and we're committed to our partners that want to be in this business with us. So just manage expectations about how many of those could be consolidated in the near term.

隨著合資企業到期或債務到期，我們將繼續評估機會。所以它代表了一個機會，但我們致力於這項業務，我們也致力於那些希望與我們一起從事這項業務的合作夥伴。因此，只需管理短期內可以整合其中多少個的預期即可。

Okay. Great. That's helpful. And it sounds like a lot of these are older assets. I guess, does that bring any sort of value-add redev opportunities to sort of accretively upgrade these assets at attractive yields, maybe putting in capital that would have been difficult to secure from partners, but that maybe now is a little more straightforward for you to do on your own?

好的。偉大的。這很有幫助。聽起來很多都是較舊的資產。我想，這是否會帶來任何形式的增值重新開發機會，以有吸引力的收益率逐步升級這些資產，也許會投入難以從合作夥伴那裡獲得的資本，但現在對您來說可能更簡單一些自己做？

The -- It's a fair question. I would say that there was one asset that was part of the initial portfolio earlier this year where we had a significant development opportunity that we continue to typically, these are business cases that we discuss with partners. And more often than not, again, we have got great partnerships that see the value that we can create that those are rarely gating issues from our partners' capital.

這是一個公平的問題。我想說的是，今年早些時候初始投資組合中有一項資產，我們擁有重大的發展機會，我們通常會繼續這樣做，這些是我們與合作夥伴討論的業務案例。通常情況下，我們擁有良好的合作關係，他們看到了我們可以創造的價值，而這些很少會阻礙我們合作夥伴資本的問題。

However, as you can imagine, it is a little bit more efficient when we're doing it internally on a consolidated basis. So -- these are assets that we've owned for a long time. We have invested in our assets. So we know what we're stepping into. And in some cases, there is some value-add opportunity. But nothing significant to highlight from the most recent acquisitions.

然而，正如您可以想像的那樣，當我們在內部統一進行時，效率會更高一些。所以——這些都是我們長期擁有的資產。我們已經投資了我們的資產。所以我們知道我們正在邁入什麼。在某些情況下，還有一些增值機會。但最近的收購並沒有什麼值得強調的。

Alex Kim, Zelman & Associates.

亞歷克斯·金（Alex Kim），Zelman & Associates。

Hey thanks for taking my question today. I wanted to ask about your blended rent growth outlook. I noticed that you referenced remaining on plan for your full year outlook of around 2.5%. Could you talk through some of your expectations in November and December that allow you to remain on track, I guess, especially with the seasonal moderation that occurs in these upcoming months.

嘿，謝謝你今天回答我的問題。我想問一下你們的混合租金成長前景。我注意到您提到全年展望仍按計劃進行，約為 2.5%。我想，您能否談談您對 11 月和 12 月的一些期望，使您能夠保持在正軌上，尤其是在接下來的幾個月中出現季節性放緩的情況下。

Sure thing, Alex. In terms of what we're looking at for November, December, I'll just give you one example that hopefully can give you the appropriate color. So in last year, in October, we were giving out half a week of concessions in San Mateo. And by November and December, concessions went up to 3.2 weeks.

當然可以，亞歷克斯。就我們正在尋找的 11 月、12 月的情況而言，我只會給您一個例子，希望能為您提供合適的顏色。因此，去年十月，我們在聖馬刁提供了半週的優惠。到了 11 月和 12 月，優惠期限延長至 3.2 週。

So currently sitting at 2, we don't see that increasing dramatically because last year, we had supply in San Mateo, for example, and some other influences. And so just from the fact that there is going to be no headwind on the concessions. That in itself is a beneficial pickup.

因此，目前排名為 2，我們認為這一數字不會大幅增加，因為去年我們在聖馬刁有供應，以及其他一些影響。因此，僅從這樣的事實來看，讓步不會有任何阻力。這本身就是一個有益的回升。

The second factor is, of course, with LA working through the evictions in a meaningful way that overhang on new leases will continue to abate. So that will be another beneficial factor. And of course, the third piece is lease rates. New lease rates in October and November last year, was -- they went down to about, say, average negative 2.5%. And so once again, this year in October, we're sitting here at about 1.5%.

當然，第二個因素是，隨著洛杉磯以有意義的方式解決驅逐問題，新租約的懸而未決將繼續減少。所以這將是另一個有利因素。當然，第三部分是租賃率。去年 10 月和 11 月的新租賃利率下降至平均負 2.5% 左右。因此，今年 10 月份，我們的成長率再次保持在 1.5% 左右。

We have plenty of room and certainly not a new lease rate headwind on that front. So -- and multiple fronts. We actually have either a tailwind or no headwind and which is why we have talked about a potential reacceleration on the new lease rates. And of course, the last component is our renewals have performed stronger than our original forecast. And so on a blended basis, we see a path to achieving our plan.

我們有足夠的空間，在這方面當然不會有新的租賃率逆風。所以——還有多個面向。實際上，我們要么順風，要么沒有逆風，這就是為什麼我們談論新租賃利率可能重新加速的原因。當然，最後一個因素是我們的續訂表現比我們最初的預測更強。因此，在混合的基礎上，我們看到了實現我們計劃的途徑。

Got it. Thanks for the commentary there. And then just to follow up, wanted to ask about bad debt and some of your assumptions for delinquencies, not for '25, but for this upcoming fourth quarter as well as any other specifics you could provide for like the other income piece that helped drive the upward revenue guidance revision?

知道了。感謝那裡的評論。然後只是為了跟進，想詢問壞帳和您對拖欠的一些假設，不是針對'25，而是針對即將到來的第四季度，以及您可以提供的任何其他細節，例如幫助推動的其他收入部分上調收入指引？

Yeah. In terms of bad debt, year-to-date throughout tube, we're sitting right around 1%. We think we'll be right around 1%, maybe slightly under for the full year with the fourth quarter being not too dissimilar. In terms of the other income drivers for the quarter in the third quarter, we did have higher lease break fees related to corporate tenants, which hit the other income line, but it's not going to reoccur in the fourth quarter, which is causing some sequential decline that you're seeing in the numbers, fourth quarter relative to the third quarter.

是的。就壞帳而言，今年迄今為止，我們的壞帳率約為 1%。我們認為全年的成長率將在 1% 左右，可能略低於第四季的情況。就第三季的其他收入驅動因素而言，我們確實有與企業租戶相關的更高的租約終止費，這影響了其他收入線，但這種情況不會在第四季度再次發生，這導致了一些連續的影響您在數字中看到的第四季度相對於第三季度的下降。

Ami Probandt, UBS.

阿米普羅班特，瑞銀集團。

Hi, thanks. A follow-up to a previous question, and sorry if this is coming a little too close to asking for guidance. Are you able to discuss how we should be thinking about the impact of concession burn-off in '25. It seems like San Jose and Seattle could see some tailwinds in the second half of the year. But wondering if there is a way that we can think about quantifying some of this impact.

你好，謝謝。這是上一個問題的後續問題，如果這有點接近尋求指導，我們很抱歉。您能否討論一下我們應該如何考慮 25 年特許權消耗的影響？看起來聖荷西和西雅圖可能會在今年下半年看到一些順風車。但想知道是否有一種方法可以量化這種影響。

Yeah, Ami, that's a good question. What we're seeing is that the concessionary level while it may vary in our submarkets is essentially moving from one area to another when it comes to supply. And so last year was heavier in downtown Seattle this year -- I mean -- or this year, I should say, 2024, not over yet -- is so heavier in downtown Seattle. Next year, it's going to be a little heavier in East side. And so it's going to shift from one to the other. And therefore, overall, we really don't expect the concessionary environment for the full year to vary all that much from one year to the other.

是的，阿米，這是個好問題。我們看到的是，雖然我們的子市場的優惠水平可能有所不同，但在供應方面，本質上是從一個地區轉移到另一個地區。所以去年西雅圖市中心的天氣更加嚴重，我的意思是，今年，我應該說，2024 年，尚未結束，西雅圖市中心的天氣更加嚴重。明年，東區的情況會更嚴重一些。所以它將從一種轉變為另一種。因此，總體而言，我們確實預計全年的優惠環境不會因年份而異。

Great. Thanks. And just a quick one on the transaction environment. Do you think that the current transaction levels are kind of back to a pre-COVID norm? Or are we still trending lower in terms of absolute volume?

偉大的。謝謝。簡單介紹一下交易環境。您認為目前的交易水準是否回到了新冠疫情之前的正常水準？或者就絕對交易量而言，我們仍然呈現下降趨勢嗎？

Yeah, Ami, transaction volumes year-to-date in California and Washington, and it actually is approximate for the national average or around of what we would call pre-COVID average, say, 15% to 19%. It's still well below approximately a third of what we saw in '21 and '22. So we've had an uptick versus last year, which there was very limited volume. It's picked up that includes some of the large portfolio transactions that I'm sure you're aware of, but we're still below the level of volumes that we've seen in previous years. So there's a good chance of capital markets continue to trend favorably that we'll see an uptick in transaction volume next year.

是的，阿米，加州和華盛頓州今年迄今為止的交易量，實際上接近全國平均水平，或者我們所說的新冠疫情前的平均水平，例如 15% 到 19%。它仍然遠低於我們在 21 年和 22 年看到的大約三分之一。因此，與去年相比，我們的銷售量有所上升，去年的銷售量非常有限。它的回升包括我確信您已經知道的一些大型投資組合交易，但我們仍然低於前幾年看到的交易量水準。因此，資本市場很有可能繼續保持有利的趨勢，明年我們將看到交易量的上升。

Thank you.

謝謝。

Conor Peaks Deutsche Bank.

康納峰德意志銀行。

Great. Thank you. Maybe sticking on the acquisition opportunity front. Maybe if you could talk a little bit about what kind of regional differences you're seeing in your markets, maybe in regards to available stock for sale or movements in cap rate pricing?

偉大的。謝謝。也許會堅持收購機會。也許您可以談談您在市場中看到的區域差異，也許是關於可供出售的股票或資本化率定價的變動？

Yeah, it's a fair question. We're not seeing a wide differentiation in terms of cap rates for core product, well-located newer product in all of our submarkets continue to be well bid. I think you're seeing some -- the most aggressive pricing is along the Peninsula, where I think people are more likely to be underwriting above-average rent growth for the next several years.

是的，這是一個公平的問題。我們沒有看到核心產品的資本化率有很大差異，我們所有子市場中位置優越的新產品繼續獲得良好的出價。我想你會看到一些——最激進的定價是在半島沿線，我認為人們更有可能在未來幾年內承擔高於平均水平的租金增長。

So but the spread difference in terms of cap rates for high-quality product is de minimis. We've seen limited transaction volume in the downtown centers, and particularly LA start the year, that has picked up. We've seen several transactions in Downtown LA this year. So they feel like relatively healthy markets. But again, as I mentioned earlier, not to the level of volumes we've seen in previous years.

因此，但高品質產品的資本化率方面的利差差異微乎其微。我們看到市中心的交易量有限，尤其是洛杉磯，今年年初交易量回升。今年我們在洛杉磯市中心看到了幾筆交易。所以他們感覺是相對健康的市場。但正如我之前提到的，數量還沒有達到前幾年的水平。

Great. Thanks. And then it could be a tougher comp kind of driving this a little bit. But if we were to look at the higher expenses in the Northern California portfolio and the drivers behind that?

偉大的。謝謝。然後可能會是一個更艱難的比賽來推動這一點。但如果我們看看北加州投資組合中較高的費用及其背後的驅動因素呢？

Yeah. It is somewhat comp related. There is -- expenses are lumpy quarter-to-quarter and does depend on what happened a year ago. I would say utility expenses were a little higher there than in some of the other regions. And that represents 20% of our OpEx. So that can have sometimes a meaningful impact. And so nothing to be alarmed about, nothing that's really outside the norm, it just really does depend on the comp from the prior year.

是的。這有點跟補償有關。季度與季度之間的支出波動很大，並且確實取決於一年前發生的情況。我想說那裡的公用事業費用比其他一些地區要高一些。這占我們營運支出的 20%。因此，這有時會產生有意義的影響。因此，沒有什麼值得擔心的，沒有什麼真正超出正常範圍的，它確實取決於前一年的比較。

Ladies and gentlemen, that concludes the question-and-answer session. And it also concludes the conference of Essex Property Trust. Thank you for your participation. You may now disconnect your lines.

女士們、先生們，問答環節到此結束。埃塞克斯地產信託公司會議也就此結束。感謝您的參與。現在您可以斷開線路。