Essex Property Trust Inc (ESS) 2024 Q4 法說會逐字稿

Good day and welcome to Essex Property Trust fourth-quarter 2024 earning call.

大家好，歡迎參加 Essex Property Trust 2024 年第四季財報電話會議。

As a reminder, today's conference is being recorded.

提醒一下，今天的會議正在錄音。

Statements made on this conference call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties. Forward-looking statements are made based on current expectations, assumptions and beliefs as well as information available to the company at this time. A number of factors could cause actual results to differ materially from those anticipated. Further information about these risks can be found on the company's filings with the SEC.

本次電話會議上關於預期營運績效及其他未來事件的陳述均為前瞻性陳述，涉及風險及不確定性。前瞻性陳述是基於目前的預期、假設和信念以及公司目前可用的資訊做出。許多因素可能導致實際結果與預期結果有重大差異。有關這些風險的更多資訊可以在該公司向美國證券交易委員會提交的文件中找到。

It is now my pleasure to introduce your host, Ms. Angela Kleiman, President and Chief Executive Officer for Essex Property Trust.

現在我很高興介紹您的主持人，埃塞克斯房地產信託公司總裁兼首席執行官安吉拉·克萊曼女士。

Thank you, Ms. Kleiman. You may begin.

謝謝你，克萊曼女士。你可以開始了。

Good morning. Thank you for joining Essex's fourth-quarter earnings call.

早安.感謝您參加 Essex 第四季財報電話會議。

Barb Pak will follow with prepared remarks, and Rylan Burns is here for Q&A.

接下來 Barb Pak 將發表準備好的發言，然後 Rylan Burns 將進行問答。

Before we begin, on behalf of the entire company, I want to express our condolences to those affected by the tragic wildfires in Los Angeles. While our properties did not incur any loss, my gratitude goes to the Essex team for proactively helping those displaced as we adopted several policies to ease the transition into new housing within our Los Angeles portfolio.

首先，我謹代表整個公司向洛杉磯悲慘山火的受害者表示哀悼。雖然我們的房產沒有遭受任何損失，但我還是要感謝艾塞克斯團隊積極幫助那些流離失所者，因為我們採取了多項政策來緩解我們洛杉磯投資組合內遷入新住房的困難。

As for our earnings call today, I will cover our full year and fourth-quarter 2024 results followed by our outlook for 2025 and an update on the investment market. We are pleased to achieve full year same-property revenue growth of 3.3% and core FFO growth of 3.8%, both exceeding the high end of our original guidance. Our strong performance was the result of improving demand, including return to office and migration patterns, combined with attractive affordability and delinquency resolution by our hardworking associates.

至於我們今天的財報電話會議，我將介紹我們 2024 年全年和第四季的業績，然後介紹我們對 2025 年的展望以及投資市場的最新情況。我們很高興實現全年同店收入成長 3.3% 和核心 FFO 成長 3.8%，均超過了我們最初預期的高端。我們強勁的業績是需求不斷改善的結果，包括重返辦公室和遷移模式，加上我們辛勤工作的員工提供的誘人的負擔能力和拖欠解決方案。

With this backdrop, we experienced a typical seasonal rent curve for the first time in several years. Additionally, we successfully shifted the company into growth mode, acquiring and consolidating 13 properties at above market yields. As for operation highlights, fourth quarter results were generally consistent with expectations. We achieved 1.6% blended lease rate growth and concessions averaged one week for the same-store portfolio in the fourth quarter.

在這樣的背景下，我們幾年來第一次經歷了典型的季節性租金曲線。此外，我們成功地將公司轉向成長模式，以高於市場的收益率收購和合併了 13 個房產。經營亮點方面，第四季業績基本符合預期。第四季度，我們實現了 1.6% 的混合租賃率成長，同店優惠平均持續一週。

On a more granular perspective, Orange County and Santa Clara County led the portfolio with 2.7% blended rate growth, while LA and Alameda counties land with 20 basis points of blended rate growth. In January, demand picked up, in line with our operating plan, lifting occupancy by 40 basis points to 96.3%, and concessions improved to less than half a week on average.

從更具體的角度來看，橘郡和聖克拉拉縣以 2.7% 的混合利率成長率領先投資組合，而洛杉磯和阿拉米達縣的混合利率成長率為 20 個基點。1 月份，需求回升，符合我們的營運計劃，入住率上升了 40 個基點，達到 96.3%，優惠期平均改善至不到半週。

Turning to our 2025 outlook detailed on page S-16. Consensus GDP and job growth is forecasted to moderate for the US overall but remain at a healthy level. The West Coast is well-positioned with improving economic fundamentals, and job growth is forecasted to outperform the US after lagging in 2024.

請參閱第 S-16 頁詳述的 2025 年展望。美國整體 GDP 和就業成長預計將放緩，但仍保持在健康水平。西海岸經濟基本面不斷改善，前景看好，就業成長預計將在 2024 年落後美國後，最終超越美國。

Job growth in the technology sector is the key driver of this outlook as we anticipate job postings to convert into new hires in 2025, resulting in better overall growth. Steady demand combined with low level of supply deliveries at only 50 basis points of total housing stock and attractive affordability relative to home ownership leads to our base case forecast of 3% market rent growth.

科技業的就業成長是這一前景的主要驅動力，因為我們預計 2025 年職位發布將轉化為新員工，從而帶來更好的整體成長。穩定的需求、僅佔總房屋存量的 50 個基點的低供應量以及相對於房屋所有權的吸引的負擔能力，促使我們基本預測市場租金增長率為 3%。

Seattle and San Jose are projected to lead the portfolio at approximately 4%. As far as the range of outcomes, the low end of our guidance is mainly attributed to policy uncertainty and timing of the delinquency recovery. Our optimism for the high end of our guidance is supported by solid fundamentals and based on past precedents that tech job postings still have a runway to grow for this phase of the innovation cycle.

預計西雅圖和聖荷西將以約 4% 的比重領先該投資組合。就結果範圍而言，我們預期的低端主要歸因於政策的不確定性和違約恢復的時機。我們對指引高端的樂觀態度受到堅實基本面的支持，並基於過去的先例，即技術職位發佈在創新周期的這一階段仍然具有成長空間。

It is notable that recent office expansion announcements demonstrate the intention that the majority of new hirings will be focused in headquarter locations which favors the West Coast economy, particularly the northern regions.

值得注意的是，最近的辦公室擴建公告表明，大多數新招聘將集中在總部所在地，這將有利於西海岸經濟，特別是北部地區。

Over the long term, we see a path for the West Coast apartment markets to continue to outperform the US average, with better job growth and wealth creations driven by centers of innovation combined with limited level of supply growth.

從長遠來看，我們認為西海岸公寓市場將繼續跑贏美國平均水平，在創新中心的推動下，就業成長和財富創造將更加強勁，但供應成長水平有限。

Lastly, on the investment market. In 2024, the West Coast experienced a meaningful uptick in volume, reaching a level close to the pre-COVID average. Although interest rates increased in the fourth quarter, there remains a deep pool of capital eager to acquire properties on the West Coast, and cap rates in the fourth quarter for high quality properties remain consistent at around mid to high 4% range.

最後，關於投資市場。2024 年，西海岸的貨運量出現了顯著上升，達到接近新冠疫情之前平均水準的水準。儘管第四季利率上升，但西海岸仍有大量資金渴望收購房產，第四季度優質房產的資本化率仍保持在 4% 左右的中高水準。

In 2024, Essex was opportunistic in its acquisition efforts, successfully generating significant accretion by consolidating joint ventures and acquiring several communities in close proximity to our property collections where we can enhance the yield on day one by operating these communities more efficiently.

2024 年，埃塞克斯在收購方面抓住了機遇，透過合併合資企業並收購靠近我們地產的幾個社區，成功地實現了顯著的成長，我們可以透過更有效地運營這些社區來提高第一天的收益。

In 2025, we expect to be net acquirers again while optimizing our cost of capital. Our focus remains on being accretive and opportunistic to drive FFO and NAV per share growth for our shareholders.

到 2025 年，我們預計將再次成為淨收購者，同時優化我們的資本成本。我們的重點仍然是增值和抓住機會，為股東推動 FFO 和每股 NAV 成長。

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

說完這些，我將把電話轉給 Barb。

Thanks, Angela.

謝謝，安吉拉。

Today, we'll discuss our fourth quarter results, key assumptions to our 2025 guidance, followed by comments on the balance sheet.

今天，我們將討論第四季的業績、2025 年指引的關鍵假設，然後是對資產負債表的評論。

We are pleased with our fourth quarter results, which were slightly ahead of our expectations, primarily driven by higher income from our joint venture entities. As it relates to the same-property operations, we all saw a continued reduction in delinquency during the quarter, which improved to 60 basis points of scheduled rent on a cash basis.

我們對第四季度的業績感到滿意，該業績略微超出了我們的預期，主要得益於合資企業收入的增加。就同​​一物業的營運而言，我們都看到本季拖欠率持續減少，以現金計算的預定租金改善至 60 個基點。

For the year, we've made substantial progress on the delinquency front, reducing our bad debt by over 50% from one year ago. As such, we are pleased to be in a position to fully eliminate the remaining accounts receivable balance during the quarter, which resulted in same-property revenue growth of 2.6% on a year over year basis. Without this non-cash adjustment, revenue growth would have been 3.2% for the quarter.

今年，我們在拖欠債務方面取得了實質進展，壞帳率比一年前減少了 50% 以上。因此，我們很高興能夠在本季度完全消除剩餘的應收帳款餘額，這使得同店收入年增 2.6%。如果沒有這項非現金調整，本季的營收成長率將達到 3.2%。

Turning to our 2025 outlook. Same-property revenues are forecasted to grow by 3% at the midpoint. The key drivers of this growth are outlined on page S-16.1 of the supplemental.

展望 2025 年。預計同店營收中位數將成長 3%。補充文件第 S-16.1 頁概述了這一增長的關鍵驅動因素。

Continuing on with Angela's comments, stable economic conditions, low supply, and expectations for increased hiring among key West Coast industries leads to our forecast for blended rent growth of 3%. In terms of the cadence, we expect blended rent growth in the first half to be below the full year midpoint and improve in the second half of the year as hiring accelerates and translates into increased demand for housing.

繼續安吉拉的評論，穩定的經濟狀況、低供應量以及西海岸主要行業招聘增加的預期，使我們預測混合租金增長率為 3%。就節奏而言，我們預計上半年綜合租金漲幅將低於全年中點，而隨著招聘加速並轉化為住房需求增加，下半年將有所改善。

Our guidance assumes a 50 basis point improvement in delinquency as we continue to make progress, returning to that long term run rate. Rounding out the remaining components, we anticipate 30 basis points combined contribution from higher occupancy and other income.

我們的指導假設是，隨著我們繼續取得進展，拖欠率將改善 50 個基點，並回到長期運行率。綜合考慮剩餘的部分，我們預計更高的入住率和其他收入將帶來 30 個基點的總貢獻。

Moving to operating expenses. We forecast 3.75% same property expense growth at the midpoint, a significant improvement from what we've experienced in the past two years. The biggest factor driving this outcome is lower insurance expense. We renewed our property insurance in December and saw a small reduction in our premium as compared to the prior year.

轉向營運費用。我們預測中期同類房地產費用成長率為 3.75%，與過去兩年相比有顯著改善。造成這結果的最大因素是保險費用的降低。我們於12月續保了財產保險，與去年相比，保費略有減少。

Regarding controllable expenses, we are forecasting growth of less than 3% as we continue to seek ways to enhance our operating efficiencies to offset wage pressures. Putting it all together, same-property NOI growth is expected to increase 2.7% at the midpoint.

至於可控費用，我們預測成長率將低於 3%，因為我們將繼續尋求提高營運效率的方法，以抵消薪資壓力。綜合考慮所有因素，預計同房淨營業收入中位數成長率為 2.7%。

As for core FFO, our midpoint of $15.81 equates to 1.3% year over year growth. The modest increase is driven by two factors which combined represent around 2% headwind to growth. The first relates to higher interest expense, primarily driven by the refinance of $500 million in unsecured bonds. Our guidance assumes we refinance this debt in the first half of the year, and given the current interest rate environment, the all-in rate is expected to be meaningfully higher than the 3.5% rate on the maturing bonds.

至於核心 FFO，我們的中間點為 15.81 美元，相當於年成長 1.3%。推動這一溫和成長的是兩個因素，這兩個因素合起來對成長造成了約 2% 的阻力。第一個因素與更高的利息支出有關，主要由於 5 億美元無擔保債券的再融資。我們的指導假設是我們在今年上半年對這些債務進行再融資，並且考慮到當前的利率環境，預計總利率將明顯高於到期債券的 3.5% 利率。

The second factor is lower structure finance income as a result of redemptions in 2024 and those expected in 2025. Our guidance assumes $150 million in redemptions at the midpoint, of which approximately 50% is expected to occur by mid-year.

第二個因素是，由於 2024 年和 2025 年的預期贖回，結構性融資收入較低。我們的指導假設中期贖回額為 1.5 億美元，其中約 50% 預計在年中發生。

As previously communicated, we expect to reinvest the proceeds into new acquisitions which will offset a portion of this income and result in better NAV and core FFO growth for our shareholders over the long term.

正如之前所傳達的，我們預計將收益再投資於新的收購，這將抵消部分收入，並為我們的股東帶來長期更好的資產淨值和核心 FFO 成長。

In total, the structured finance book is expected to represent around 4% of our core FFO in 2025, consistent with our target range of 3% to 5%.

總體而言，結構化融資預計將在 2025 年占我們核心 FFO 的 4% 左右，與我們 3% 至 5% 的目標範圍一致。

Turning to investments. The midpoint of our guidance assumes we acquire $1 billion in new apartment communities. As for funding, it will be dependent on market conditions and our cost of capital, utilizing the most attractive equity capital source available at the time and executed on a leveraged neutral basis, consistent with our track record of disciplined capital allocation.

談到投資。我們的指導中點假設我們收購價值 10 億美元的新公寓社區。至於融資，它將取決於市場條件和我們的資本成本，利用當時最具吸引力的股本資本來源，並以槓桿中性方式執行，這與我們嚴格的資本配置記錄一致。

Concluding with the balance sheet. The balance sheet and credit metrics remain strong and with over $1 billion in liquidity and ample sources of available capital, the company is well-positioned.

以資產負債表作為結論。資產負債表和信用指標仍然強勁，並且擁有超過10億美元的流動資金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以回答問題。

(Operator Instructions)

（操作員指令）

Nick Yulico, Scotiabank.

加拿大豐業銀行的 Nick Yulico。

Angela, I believe you said that the low end of guidance assumes some sort of potential regulatory impact and I'm assuming that's in LA. I just want to be clear on that. And also if you could provide what is the same-store revenue growth range that you assumed in guidance for LA specifically.

安琪拉，我相信你說過指導的低端假設了某種潛在的監管影響，我假設那是在洛杉磯。我只是想澄清這一點。另外，您能否具體提供您在指導中假設的洛杉磯同店收入增長範圍？

Hey, Nick. Good morning and thanks for your question.

嘿，尼克。早安，感謝您的提問。

Yes, legislation is a unknown factor at this point and it's a little too early to predict the outcome. And so as it relates to our guidance, we didn't factor that component into our guidance, but that's why we have a range. So a downside is contemplated is if something gets enacted that's more extreme in nature.

是的，立法目前還是未知因素，預測結果還為時過早。因此，就我們的指導而言，我們沒有將該部分考慮在我們的指導中，但這就是為什麼我們有一個範圍。因此，如果某些事情在本質上更加極端，那麼就會產生負面影響。

What we are aware of is currently, there's an eviction moratorium being considered in LA and a rent freeze proposal. And in -- as far as the eviction moratorium is concerned, what we are hoping for is a more sensible approach unlike what was enacted during COVID, and that the legislatures understand that eviction moratorium is punitive only to housing providers and a bad policy for LA because it deters investments in LA and housing production in an area that already has an extreme shortage in housing, because we all know that the best path to affordable housing is more -- is to produce more homes.

據我們所知，目前洛杉磯正在考慮暫停驅逐令和凍結租金的提議。就驅逐禁令而言，我們希望採取一種更為明智的方法，不同於新冠疫情期間制定的方法，並且立法機構明白驅逐禁令只對住房提供者俱有懲罰性，對洛杉磯來說是一項糟糕的政策，因為它阻礙了對洛杉磯的投資和在住房已經極度短缺的地區建設住房，因為我們都知道，實現經濟適用房的最佳途徑是建造更多的房屋。

And so that conversation is ongoing and we are working closely with our organizations to get better visibility on that at some point. As far as the rent freezes are concerned, Governor Newsom declared a state of emergency related to the fires that triggers the existing California law to limit rent increases to 10% above pre-emergency levels.

因此，這場對話仍在進行中，我們正在與我們的組織密切合作，以便在某些時候更好地了解這一點。就凍結租金而言，紐森州長宣布因火災而進入緊急狀態，觸發現有加州法律，將租金漲幅限制在緊急狀態前水平的 10% 以上。

And since there's already an anti protection in place, which we also support, we're hoping that nothing more extreme will be passed. And so once again, that's the reason for the downside scenario and that's what is related to the impact to the lower end of the range.

而且由於已經存在反保護措施，我們也支持該措施，我們希望不會通過更極端的措施。所以再一次，這就是下行情境的原因，也是與範圍下端的影響相關的。

Is it possible to get just a specific for LA in terms of what's assumed for the same-store revenue growth this year?

就今年洛杉磯同店營收成長的預期而言，是否可以具體了解一下？

Hi, Nick. Yeah, it's Barb. So for LA, we have assumed that it will improve from where we are in 2024. As you can see in our supplemental, we were at 2.3%. LA was very challenged in '24 with low occupancy. And negative rent growth, and we think that occupancy improves to a stabilized level of 96% and that rent growth is modest at about 2%. So that's what's baked in. No impact from the wildfires has been forecasted in our numbers. It was just we had assumed the market starts to recover from some of the eviction noise that occurred in 2024.

你好，尼克。是的，這是 Barb。因此對於洛杉磯來說，我們假設到 2024 年它會有所改善。正如你在我們的補充資料中看到的，我們的比例是 2.3%。1924 年，洛杉磯面臨巨大的挑戰，入住率很低。雖然租金出現負成長，但我們認為入住率將提高至 96% 的穩定水平，租金成長率將維持在 2% 左右。這就是所蘊含的內容。我們的數據並未預測到野火會造成任何影響。我們只是假設市場將開始從 2024 年發生的一些驅逐噪音中恢復過來。

Eric Wolfe, Citi.

花旗銀行的艾瑞克‧沃爾夫 (Eric Wolfe)。

As part of your guidance, you gave an expectation for 3.5% renewal rate growth through this year. I'm just trying to understand why it wouldn't be a bit higher given the low turnover you've been seeing, and I think you did about 4% last year with weaker market rent growth. So I'm just trying to understand how you came up with the estimate and why it would be lower than last year.

作為指導的一部分，您預計今年的續約率將成長 3.5%。我只是想知道，在你所看到的低營業額的情況下，為什麼它不會更高一些，我認為去年你的營業額約為 4%，而市場租金增長較弱。所以我只是想知道你是如何得出這個估計的，以及為什麼它會低於去年。

Hey, Eric. It's Angela here. It's a good question.

嘿，艾瑞克。我是安琪拉。這是個好問題。

And our approach generally has been to essentially be market appropriate with our renewal rates. And what that means is over time, we would expect the renewal rates and market rates to converge. Now it could be lumpy year over year depending on these terms, the concessionary environment, and timing of the renewal side which is why you saw a -- we experienced a 4% renewal in 2024, even though the market rent growth was quite a bit lower.

我們的方法一般是，我們的續約率基本上與市場相符。這意味著隨著時間的推移，我們預期續約率和市場率將會趨於一致。現在，根據這些條款、優惠環境和續約時機等因素，逐年可能會出現波動，這就是為什麼您會看到——儘管市場租金增長率要低得多，但我們在 2024 年經歷了 4% 的續約。

But net net is that our focus has been and will continue to be on maximizing revenues rather than individual rates and these renewal rates can be lumpy from year to year.

但最終的結果是，我們的重點一直是並將繼續是最大化收入而不是個人費率，而這些續約費率每年可能會有所波動。

And then you mentioned that you expect the second half to be better from a blended spread perspective. I don't know if you want to give sort of what you expect for the first half and second half, but sort of what gives you that conviction that you'll see that increased hiring trends? Obviously you can look at the listings, but just curious what gives you the confidence that you'll see that incremental demand in the back half of the year.

然後您提到，從混合利差的角度來看，您預計下半年會更好。我不知道您是否想給出您對上半年和下半年的預期，但是什麼讓您確信會看到招聘趨勢上升？顯然，您可以查看清單，但只是好奇是什麼讓您有信心在今年下半年看到增量需求。

Yeah. It's really a function of two factors. It's both demand and supply. And so as far as the cadence, we're anticipating that the first half to be in the high 2s, so say around 2.75%, and the second half to be above a midpoint, in the low 3s, say 3.3%, around there.

是的。這其實是兩個因素的作用。這既是需求，也是供給。就節奏而言，我們預期前半部將在 2% 的高位，也就是 2.75% 左右，而後半部將在中點以上，在 3% 的低位，也就是 3.3% 左右。

And from a supply perspective, I think that's more straightforward. So I'll cover that first. We are anticipating that the first half delivery to be heavier. So when we look at our supply cadence, about 60% or so of the supply is coming in the first half. So that of course will impact our pricing power.

從供應角度來看，我認為這更為簡單。因此我將首先介紹這一點。我們預計上半年的交貨量將會更大。因此，當我們查看供應節奏時，大約 60％ 左右的供應是在上半年到來的。這當然會影響我們的定價能力。

And as far as the job growth, we assume that to happen in the second half because what we're seeing is the job postings that have been gradually increasing and have been steady, but it takes time to actually hire and we're also seeing that especially in the Bay Area for a meaningful number of tech companies have taken on office expansion.

就就業成長而言，我們預計這將發生在下半年，因為我們看到的是職缺一直在逐漸增加並且保持穩定，但實際招聘需要時間，我們也看到特別是在灣區，許多科技公司已經擴大了辦公室。

And just from the leases signed, if you just take the actual square footage, that would imply somewhere around 5,000 new headcounts. Well, that's not all going to happen at the same time and certainly, it's not possible for it to all happen, or the most of it to happen in the first quarter because once again, it takes time to recruit and interview and put people in place.

僅從簽署的租約來看，如果只考慮實際面積，就意味著大約需要 5,000 名新員工。嗯，這些不會同時發生，當然也不可能全部發生，或者大部分也不可能在第一季發生，因為再次強調，招募、面試和安排人員需要時間。

And so that is why we're assuming the second half and of course, our conviction is coming from the leading indicators there such as job openings and of course, the office leasing activities.

這就是我們對下半年的預測的原因，當然，我們的信心來自於領先指標，例如職缺，當然還有辦公室租賃活動。

Austin Wurschmidt, KeyBanc Capital Markets.

KeyBanc 資本市場部的 Austin Wurschmidt。

Barbara, Angela, I know you mentioned the one half blends will be lower than the second half for the reasons you just cited, but I guess digging into the 2.5% new lease rate growth assumed at the midpoint of same-store revenue growth guidance, I guess should we expect kind of another year of a gradual ramp into the peak leasing season and then kind of the shoulder periods being a little softer?

芭芭拉、安琪拉，我知道你們提到由於你們剛才提到的原因，上半年的混合量將低於下半年，但我想，深入研究假設同店收入增長指引中點的新租賃率增長 2.5%，我想我們是否應該預期，在租賃旺季會再過一年逐漸上升，然後在平季會稍微疲軟一些？

And also curious, in your market rent growth assumption, if any, or how much benefit there is from kind of I guess a more normal year where you don't have long term -- as many long term delinquent units coming back to market. Just wondering if there's any kind of concession burn off benefit in that number.

另外我很好奇，在您的市場租金成長假設中，如果有的話，或者在一個更正常的年份裡，沒有長期拖欠的單位重返市場，會帶來多少好處。只是想知道這個數字中是否有任何形式的優惠燒毀福利。

Hey, Austin. Now that's a good question.

嘿，奧斯汀。這是個好問題。

We do expect the leasing curve to continue to normalize. So in 2024, it's the first time in several years we saw a normal leasing year. And so what we're expecting that in 2025, that it will continue. We haven't really seen anything else in the economy that would provide a meaningful disruption to that.

我們確實預計租賃曲線將繼續正常化。因此，2024 年是我們幾年來第一次看到正常的租賃年。我們預計到 2025 年這種情況還會持續下去。我們還沒有真正看到經濟中任何其他因素能夠對此造成重大破壞。

And as far as our market rent is concerned, what happened last year is if you look at our actual market rent, it was slightly lower than our forecast, but that's really driven by LA and Alameda delinquency that created a lot of noise.

就我們的市場租金而言，如果你看看去年我們的實際市場租金，它略低於我們的預測，但這實際上是由洛杉磯和阿拉米達的拖欠行為造成的，這引起了很大的噪音。

And so once you factor that in, we are assuming that that's now behind us and the market rent curve is much more steady.

因此，一旦考慮到這一點，我們假設這個問題已經成為過去，市場租金曲線更加穩定。

And then just touching on the bridge from the fourth quarter result to the first quarter guidance, after you remove kind of the $0.04 non-cash charge in the fourth quarter, you did $3.96 of core FFO and the 1Q guidance assumes that dips. Yeah, you do have some re-acceleration in the blended rate growth. You cited January occupancy pick up versus where you were in the fourth quarter. So I guess what's kind of driving that sequential decrease in core FFO? Just wondering if there's any items to highlight there.

然後談談從第四季度業績到第一季指引的過渡，在扣除第四季度的 0.04 美元非現金費用後，核心 FFO 為 3.96 美元，而第一季度指引假設這一數字會下降。是的，混合利率成長確實有所加速。您提到，與第四季相比，一月份的入住率有所上升。那麼，我猜是什麼原因導致核心 FFO 連續下降呢？只是想知道是否有任何值得強調的項目。

Yeah. And this is Barb. So there's really two factors. It's really timing and OpEX. So sequentially, between the fourth quarter and first quarter, we're seeing a little bit more in OpEx spend. And then the other big drivers just higher interest expense as we have a higher line balance and various other assumptions in the guidance. So that's really the two key drivers on the sequential change in core FFO.

是的。這是 Barb。因此其實有兩個因素。這實際上是時間和營運成本的問題。因此，按順序來看，在第四季和第一季之間，我們看到營運支出增加。然後，其他主要驅動因素是更高的利息支出，因為我們有更高的線路餘額和指導中的其他各種假設。所以這其實是核心 FFO 連續變化的兩個關鍵驅動因素。

Steve Sakwa, Evercore ISI.

史蒂夫·薩誇（Steve Sakwa），Evercore ISI。

I guess I just wanted to come back to that kind of blended number and really more of the spread between new and renewal. I guess many of your peers just have a much wider, I guess, delta between the new and the renewal. And I'm just wondering if there's something going on this year as it relates to the comps and whether some of these renewals are turning into new leases or lack of renewals and there's more pricing power there. I just was a little surprised at the narrowness between those two.

我想我只是想回到那種混合數字以及新的和更新的之間的差距。我想，你們許多同行在新事物與更新事物之間的差距要大得多。我只是想知道今年是否發生了什麼與可比較公司相關的事情，以及其中一些續約是否會轉變為新租約或缺乏續約，並且那裡有更多的定價權。我只是對這兩者之間的狹窄程度感到有點驚訝。

Hey, Steve. It's Angela here. Now that's a good question because I think what is causing the variation from one company to another is really more related to the operating strategy. And for us, what we have been focusing on is bringing our renewal rates as close to market as possible and we're sending these ahead of time and there's some negotiating. So it's not going to be exact.

嘿，史蒂夫。我是安琪拉。這是個好問題，因為我認為導致不同公司之間差異的原因實際上與營運策略更相關。對我們來說，我們一直關注的是讓我們的續約率盡可能接近市場水平，而且我們會提前發送這些訊息，並且進行一些談判。所以它並不會準確。

And because ultimately, if we price our renewals appropriately and run a optimal occupancy, then the new lease rates will benefit. And so ultimately, that all relates to how we can maximize revenues. And so what that means is for Essex, the renewal and new lease spread will really -- that range or the spread is really subject to market conditions.

因為最終，如果我們對續約進行合理的定價，並實現最佳入住率，那麼新的租賃利率就會受益。所以最終，這一切都與我們如何最大化收入有關。對於埃塞克斯來說，這意味著續約和新租約的利差實際上 - 該範圍或利差實際上取決於市場條件。

And in an environment where market rent growth is accelerating, that spread will be much wider. But in an environment where there's been prolonged moderate growth, that spread is going to be narrower. And of course, there's other factors like concessions and tiny leases signed which, makes it, I understand hard for all of us to pinpoint exactly what the spread would be, but that's -- but how we're running the company is probably driving the spread difference.

在市場租金成長加速的環境下，這一差距將會更大。但在長期溫和成長的環境下，這一差距將會縮小。當然，還有其他因素，例如特許權和簽署的小額租約，我明白，我們所有人都很難準確地指出利差是多少，但是，我們的公司運作方式可能是造成利差差異的原因。

And then just to follow up, again, other income for you guys is only growing 10 basis points. I know for some of your peers that are doing more of this connectivity in the Wi-Fi, that number's more like 50 basis points, 60 basis points, 70 basis points. So is there something kind of holding you guys back on that other income? Are you doing something differently or have you maybe not taken the same steps that they have to kind of roll this out and that's coming for you? Just trying to understand that 10 basis points.

然後再跟進，你們的其他收入僅增加了 10 個基點。我知道，對於一些在 Wi-Fi 中實現更多此類連接的同行來說，這個數字更像是 50 個基點、60 個基點、70 個基點。那麼有什麼因素阻礙了你們的其他收入嗎？您是否在做一些不同的事情，或者您可能沒有採取與他們推出的相同的步驟，而這對您來說意味著什麼？只是想了解那 10 個基點。

Yeah. Hi, Steve. So this is Barb. So there's a couple of factors that are at play here. So in 2024, we had some outsized what we would consider outsized lease cancellation fees, and we talked about that on our last call, and that we think moderates in '25 to kind of a more normalized level. So that's muting growth a little bit on the other income side.

是的。你好，史蒂夫。這就是 Barb。這裡有幾個因素在起作用。因此，在 2024 年，我們收取了一些我們認為過高的租賃取消費，我們在上次電話會議上討論了這個問題，我們認為這個數字在 2025 年會緩和到一個更加正常的水平。所以這會在一定程度上抑制另一方收入的成長。

And then the second factor is in '23, we rolled out some initiatives and we got the full benefit in '24 and right now, we're piloting a few things. We're not sure we're going to roll them out. We need time to vet to make sure it's really going to pay off. And if we roll them out, it likely will benefit '26. And so we're kind of in that piloting phase right now on a few different initiatives. So that's what's leading to that 10 basis points growth this year.

第二個因素是，在23年，我們推出了一些舉措，並在24年獲得了全部收益，現在，我們正在試行一些事情。我們不確定是否會推出這些計劃。我們需要時間來審查以確保它確實會帶來回報。如果我們推行這些措施，很可能會使‘26’受益。目前，我們正處於幾個不同措施的試點階段。這就是今年成長 10 個基點的原因。

Jeff Spector, Bank of America.

美國銀行的傑夫·斯佩克特（Jeff Spector）。

First question, Angela, in your opening remarks, you mentioned the company is in growth mode. I know you've been talking about that the past year, but really, can you just dive into that a little bit more, the impetus? And in terms of acquisitions, you mentioned cap rates are in the mid to high 4s. Again, how do you plan to acquire as -- I guess again, if you could just talk about that as well as maybe IRR expectations.

第一個問題，安琪拉，在您的開場白中，您提到公司正處於成長模式。我知道您去年一直在談論這個，但實際上，您能否更深入地講一下這個動力？在收購方面，您提到資本化率處於 4% 左右的中高水準。再說一次，您計劃如何獲得 - 我想您能再談一下這個問題以及 IRR 預期嗎？

Hey, Jeff. No, good question.

嘿，傑夫。不，這是好問題。

On the -- I'll just cover some high-level strategy and then turn it over to Rylan.

關於——我只會介紹一些高級策略，然後將其交給 Rylan。

As far as generating accretion, of course, in an environment where our stock price isn't as attractive, you've seen us do so in other ways. We sell -- we can sell assets. Obviously that offsets the growth, but -- the growth of the company, but in terms of the growth of the portfolio, it will benefit that. And it would generate accretion because if you see what we've done is we acquired pretty heavily in 2024 in the northern region where we were expecting and have seen outperformance relative to the rest of the portfolio.

當然，就實現增值而言，在我們的股價不那麼有吸引力的環境下，您已經看到我們透過其他方式來實現增值。我們出售—我們可以出售資產。顯然，這會抵消成長，但——公司的成長，但就投資組合的成長而言，它將受益。而且它會產生增值，因為如果你看到我們所做的，我們在 2024 年在北部地區進行了大量收購，這是我們預期的，並且相對於投資組合中的其他部分，我們的表現優異。

At the same time, we sold a $250 million 1970 built property and at an attractive value. So ultimately, you'll continue to see us transact in a way that's going to be accretive and as you're aware, we have multiple funding sources in addition to dispositions. We of course have some cash on hand from operations and joint venture opportunities.

同時，我們也以頗具吸引力的價格出售了一處建於 1970 年、價值 2.5 億美元的房產。因此，最終，您將繼續看到我們以一種增值的方式進行交易，而且如您所知，除了處置之外，我們還有多種資金來源。當然，我們還有一些來自營運和合資機會的現金。

Rylan, do you want to talk about returns and and other stuff?

Rylan，你想談談回報和其他事情嗎？

Yeah. Hi, Jeff and Rylan here.

是的。嗨，我是 Jeff 和 Rylan。

I think market participants, as we mentioned are buying cap rates in the mid to high 4s for well located high quality properties. I think a marginal buyer today is underwriting around an eight unlevered IRR expectation, and we are obviously trying to do better than that.

我認為，正如我們所提到的，市場參與者正在購買位置優越的優質房產，其資本化率約為 4%。我認為如今的邊際買家承保的無槓桿 IRR 預期約為 8，而我們顯然正努力做得更好。

And then my follow up is you mentioned that there was a pick up in January. Can you talk about that in historical context? Was it a normal pick up that you see in January, was it stronger than normal, weaker than normal?

然後我的後續問題是，您提到一月份出現了回升。您能從歷史背景來談論這個問題嗎？您認為 1 月的成長是正常的嗎？

This is consistent with our expectations and so it's typical. The occupancy pick up in January was all in Northern California, which was what we had expected because that strength is finally starting. And when we look at just generally from a new lease rates, it also gradually improved as well. And so on all fronts, generally, it is playing out exactly as what we had planned.

這與我們的預期一致，因此很典型。一月份入住率的回升全部發生在北加州，這正是我們所預期的，因為這種強勁勢頭終於開始了。當我們從整體來看新的租賃率時，它也在逐步改善。因此，整體而言，各方面情況都按照我們的計劃進行。

Jamie Feldman, Wells Fargo.

富國銀行的傑米·費爾德曼。

So your portfolio tilts more heavily suburban, which has performed better since COVID, given some of the challenges we've seen in urban submarkets. We're wondering if you expect the same theme of suburban outperforming urban in '25. And maybe to put a finer point on it, can you talk through your views on rent growth in your urban versus suburban portfolios?

因此，考慮到我們在城市子市場中看到的一些挑戰，您的投資組合更傾向於郊區，自 COVID 以來，郊區的表現更好。我們想知道您是否預計25年會出現郊區表現優於城市的相同主題。也許為了更詳細地闡述這一點，您能否談談對城市和郊區投資組合租金成長的看法？

Hi, Jamie. It's -- that's a good question and a thoughtful one.

你好，傑米。這是一個好問題，也是一個值得深思的問題。

As far as our portfolio allocation is concerned, we have favored the suburban location for a specific reason. Yes, from time to time, particular area might outperform for a short term, but our suburban portfolio is where all the major companies are located. So unlike, the East Coast or even the Midwest, you have Apple in Cupertino, Google is in Mountain View and again, Meta is in Menlo Park. And so these major hubs are not in your -- in the downtowns. And so that is a key reason why we have favored the suburban locations.

就我們的投資組合配置而言，我們出於特定原因青睞郊區位置。是的，有時特定的地區可能會在短期內表現優異，但我們的郊區投資組合是所有主要公司所在的地方。因此，與東海岸或中西部不同的是，蘋果在庫比蒂諾，谷歌在山景城，而 Meta 在門洛帕克。所以這些主要樞紐並不在市中心。這就是我們青睞郊區地點的一個主要原因。

But in addition to that, the downtowns are more challenging in terms of the quality of life. There's the homeless issues still needs to be addressed and I think crimes hopefully is getting better. And so I do think that yes, it's a certain -- that the urban centers should rebound, but we do not expect for those areas to outperform the suburban because they just have not done so over the long term.

但除此之外，市中心的生活品質更具挑戰性。無家可歸的問題仍然需要解決，我認為犯罪問題有望得到改善。因此，我確實認為，是的，這是肯定的——城市中心應該會反彈，但我們並不期望這些地區的表現會優於郊區，因為從長遠來看，它們還沒有做到這一點。

So can you quantify -- I know you've talked a lot about your rent growth in the first half versus the second half. I mean how would you compare your urban rent growth versus your suburban in your '25 outlook?

那麼您能量化一下嗎——我知道您已經談了很多關於上半年與下半年的租金增長情況。我的意思是，在 25 年的展望中，您會如何比較城市租金成長與郊區租金成長？

I don't have that finite of a detail in front of me. We do -- we are expecting the suburban to continue to outperform the urban, but it's going to vary differently. So for example, downtown LA is going to be very different than downtown San Francisco because downtown LA has more supply and so I don't have that exact spread.

我面前並沒有那麼詳細的資訊。我們確實預計郊區的表現將繼續優於市區，但情況會有所不同。例如，洛杉磯市中心與舊金山市中心的差異很大，因為洛杉磯市中心的供應量更多，所以我沒有確切的數據。

And then maybe for my follow up, I mean I think you had commented you've seen some office leasing in the Bay Area, some expected rent growth in the Bay or job growth in the Bay Area, but we've seen a major hiccup to the AI industry with DeepSeek. I'm just curious did you guys change your outlook at all for demand on that? It seems like the AI business will be in cost cutting mode, or just how did that impact your outlook? How are you guys baking that into your expectations for a pick up in the back half of the year?

然後也許對於我的後續問題，我的意思是我認為你已經評論說你已經看到灣區的一些辦公室租賃，灣區的一些預期租金增長或灣區的就業增長，但我們已經看到 DeepSeek 對人工智能行業造成了重大阻礙。我只是好奇你們是否改變了對此需求的看法？看起來人工智慧業務將進入削減成本模式，或者這對您的前景有何影響？你們是如何將此與今年下半年回升的預期結合起來的？

Yeah. The -- we don't expect DeepSeek to materially impact the business. And now, first of all, when we look at the -- all the leases that have been signed, it's not dominated by AI. It's -- companies like Snowflake, that's a data company. We have some fintech, we have some software company. So it's pretty well diversed. But that said, as far as DeepSeek is concerned, we do think that ultimately, more competition will spur more innovation and investments in this sector.

是的。我們預計 DeepSeek 不會對業務產生重大影響。現在，首先，當我們查看已簽署的所有租約時，我們發現它們並不是由人工智慧主導的。像 Snowflake 這樣的公司是一家數據公司。我們有一些金融科技，我們有一些軟體公司。所以它的多樣化程度相當高。但話雖如此，就 DeepSeek 而言，我們確實認為，最終更多的競爭將刺激該領域的更多創新和投資。

And DeepSeek, there's a disconnect between what they provide and what the end users need and you still need these companies to come in and create products and tools on top of it for the end users. And so that business will remain robust as far as what we can see.

而 DeepSeek，他們提供的產品和最終用戶的需求之間存在脫節，因此仍然需要這些公司介入並為最終用戶創建產品和工具。因此，就我們所知，業務仍將保持強勁。

Brad Heffern, RBC Capital Markets.

加拿大皇家銀行資本市場 (RBC Capital Markets) 的布拉德‧赫弗恩 (Brad Heffern)。

Obviously, a lot of political uncertainty right now, but can you talk about how you're thinking about the potential impact of shifts in immigration policy? And it would also be great if you could talk about how much of your demand comes from H-1B visas.

顯然，目前存在著許多政治不確定性，但您能談談您如何看待移民政策變化的潛在影響嗎？如果您能談談您的需求有多少來自 H-1B 簽證，那就太好了。

The administration question is an interesting one because it can change from hour to hour from what we can see, but as far as the immigration part of it, fortunately, that's been pretty steady in terms of how the administration has communicated their stance.

行政問題是一個有趣的問題，因為從我們所看到的情況來看，它每小時都在變化，但就移民部分而言，幸運的是，從政府如何傳達他們的立場來看，這一直相當穩定。

Their focus has been on illegal immigration. And so we don't expect that will have a meaningful impact on our portfolio, especially since we have a chronic shortage of housing at a level greater than the national average. And anecdotally, I think we've all heard of comments such as we want the best and the brightest. And so from what we gather, the administration is actually pro H-1B visa and wants to provide a path for foreign college students to stay in the country.

他們的重點一直是非法移民。因此，我們預計這不會對我們的投資組合產生重大影響，特別是因為我們的住房短缺問題長期存在，且水準高於全國平均水平。據傳，我想我們都聽過這樣的評論，例如我們想要最優秀、最聰明的人。所以從我們掌握的資訊來看，政府實際上是支持 H-1B 簽證的，並希望為外國大學生留在美國提供一條途徑。

As far as our business is concerned, in the past, we do have a small portion of tenants from H-1B visa. They tend to be more transient and they tend to double up more. And so once again, when they exited early on during the Obama administration, we didn't see any impact to our portfolio.

就我們的業務而言，過去我們確實有一小部分來自H-1B簽證的租戶。它們往往更加短暫，並且往往會加倍。因此，當他們在奧巴馬政府初期退出時，我們並沒有看到對我們的投資組合產生任何影響。

And then maybe for Barb, I'm looking at the 2025 core FFO walk on S-16.2. You have a larger growth contribution from the non-same property NOI than you have from same property. Can you just go through that? I think potentially, maybe the non-same property is being offset some by the interest bar, but just wondering why it's still large.

然後也許對於 Barb，我正在研究 S-16.2 上的 2025 年核心 FFO 步行。非同一房產淨營運收入對成長的貢獻比同一房產帶來的成長貢獻更大。你能經歷一下嗎？我認為可能是，也許非同一財產被利息欄部分抵消了，但只是想知道為什麼它仍然很大。

Yeah. The key takeaway there is the acquisitions that we did this year and that we consolidated several JV properties and then we bought out others. So it's really that is the contribution is the big component of it. So there's a lot of movement within the financials from consolidated to -- or unconsolidated to consolidated and that's what's driving that.

是的。關鍵的收穫是我們今年進行的收購，我們合併了幾家合資企業，然後收購了其他企業。因此，貢獻確實是其中最重要的部分。因此，財務狀況從合併到合併或從非合併到合併發生了很大的變化，這就是推動這一現象的因素。

And I'm happy to go offline with you on more details if you need anything else.

如果您還有其他需要，我很樂意與您離線討論更多詳細資訊。

Adam Kramer, Morgan Stanley.

摩根士丹利的亞當克萊默。

Just wanted to ask about it and I think, Angela, you mentioned a pick up in January, although maybe not so much in the LA region. And I guess just wondering, first, obviously given these unfortunate wildfires and obviously thoughts with everyone there, maybe just if if there's been any kind of contribution to the portfolio, be it on the rate side or maybe more likely in the occupancy side in January. It seems like again, based on your earlier comments, it's not been the case, but just wondering there.

只是想問一下，安吉拉，我想你提到一月份有所回升，儘管洛杉磯地區可能沒有那麼多。我只是想知道，首先，顯然考慮到這些不幸的野火，以及那裡每個人的想法，也許這對投資組合有任何貢獻，無論是在利率方面，還是更有可能是在 1 月份的入住率方面。再次，根據您之前的評論，似乎事實並非如此，但我只是想知道。

Yeah. Hey, Adam. We have not seen any increase in the volume and it's not from the fires. I mean we've seen inquiries, but the actual activities have not translated. It's really because what we heard was that these fire victims are waiting for clarity from the insurance providers before making housing decisions. So it's going to just -- it's going to take a lot more time to work that through the system before it has any impact.

是的。嘿，亞當。我們沒有看到音量有任何增加，這不是由火災引起的。我的意思是我們已經看到了詢問，但實際活動尚未轉化。這確實是因為我們聽說這些火災受害者正在等待保險公司的明確答复，然後才能做出住房決定。所以，在產生任何影響之前，需要花費更多的時間來透過系統解決這個問題。

And secondarily, in terms of the tenants that may be looking for new housing, the impact, they were mostly single-family home, and they're going to need larger units, multiple bedrooms, and so once again, I just don't see that as a huge impact in the near term.

其次，對於可能正在尋找新住房的租戶而言，他們大多是獨戶住宅，他們將需要更大的單位和多個臥室，因此，再一次，我認為這在短期內不會產生巨大影響。

And then I just want to ask you about kind of the same-store expense growth guide. Maybe just taking the midpoint of it, if you could maybe just walk through the some of the key drivers, their taxes, utilities, operating expenses. Just the kind of contribution to that overall expense growth guide.

然後我只想問您有關同店費用增長指南的問題。也許只是取中間值，如果您可以介紹一些關鍵驅動因素，包括稅金、公用事業和營運費用。這只是對整體費用成長指南的貢獻。

Yeah. This is Barb. So as I mentioned in my prepared comments, insurance is kind of the biggest driver of our reduction in same-store expense growth this year from 4.9% to 3.75%. So insurance, we expect to be down 2% based on our December renewal, and that's a big reduction from what we saw last year. And then as it relates to real estate taxes, we do think that they're up a little bit from where they were in 2024.

是的。這是 Barb。正如我在準備好的評論中提到的，保險是我們今年同店費用成長率從 4.9% 降至 3.75% 的最大驅動力。因此，根據 12 月的續保情況，我們預計保費將下降 2%，與去年相比有大幅下降。然後就房地產稅而言，我們確實認為它們比 2024 年的水平略有上漲。

Given Seattle is a wildcard, we do think Seattle may come in high again in double digit range this year. And then utilities has also been the wildcard. We have seen outsized pressure there. And above inflationary increases, we think it still is elevated in terms of increases in 2024, maybe a little bit more moderate than what we saw in '20 -- or a little more moderate in '25 versus '24.

鑑於西雅圖是一張外卡，我們確實認為西雅圖今年可能會再次進入兩位數的行列。公用事業也成為一個未知數。我們已經看到那裡存在巨大壓力。除了通膨增長之外，我們認為 2024 年的通膨增長仍處於高位，可能比 2020 年的通膨增長稍微溫和一些，或者 2025 年的通膨增長比 2024 年的通膨增長稍微溫和一些。

But overall, real estate taxes utilities probably went about the same number next year in total. So core -- the non-controllable piece will be up about 4.5% we think, and then the controllable piece will be up on just under 3% is how we kind of get to our 3.75% blended number.

但總體而言，明年房地產稅和公用事業的稅收總額可能大致相同。因此核心——我們認為不可控部分將上漲約 4.5%，然後可控部分將上漲略低於 3%，這就是我們得出 3.75% 的混合數字的方式。

Alexander Goldfarb, Piper Sandler.

亞歷山大·戈德法布，派珀·桑德勒。

Rylan, congrats on selling a 76 year old asset at a pretty surprising price. So well done.

Rylan，恭喜你以相當令人驚訝的價格出售了一項有 76 年歷史的資產。做得太好了。

Just, Angela, I wanted to follow up on Jamie Feldman's question on the urban markets and suburban. The big narrative, and you guys have talked about it, that tech is trying to make a push to come back, return to office, and people -- the tech job openings and people coming back to San Francisco, Seattle, but you also made a comment about the urban area is still dealing with crime, homeless, and yet we hear positive things out of the changing political landscape with -- as a result of elections in both markets.

安琪拉，我想跟進傑米·費爾德曼關於城市市場和郊區的問題。你們已經談到了大局，那就是科技業正努力推動人們重返辦公室，科技職位空缺，人們回到舊金山和西雅圖，但你也評論說，城市地區仍在處理犯罪和無家可歸的問題，然而，由於兩個市場的選舉，我們從不斷變化的政治格局中聽到了積極的聲音。

So when you cut through it, how do we interpret a rebound of those two markets versus the comments that there's still work to be done? Obviously I know stuff takes a while, but is -- are the positive changes being, like is that real time or that's the hope, but right now, it's not much really has changed on the ground as far as quality of life and that's why you still prefer the suburbs versus the urban?

那麼，當你深入研究這個問題時，我們如何解讀這兩個市場的反彈，以及仍有工作要做的評論？顯然我知道事情需要一段時間，但是——積極的變化是真實的嗎，或者這是希望嗎，但是現在，就生活品質而言，實際上並沒有發生太大的變化，這就是為什麼你仍然更喜歡郊區而不是城市？

Hey, Alex. Great question.

嘿，亞歷克斯。好問題。

It's really two things. One is that when it comes to talk and public policy, I think that's headed in the right direction and we are hopeful that they can get her. But I think we've all experienced this, especially you went through this in New York, once you have a political plan, then you have to set policy and you have to find funding and you have to implement it.

這實際上是兩件事。一是，當談到談話和公共政策時，我認為這正朝著正確的方向發展，我們希望他們能得到她。但我想我們都經歷過這種情況，尤其是你在紐約經歷過的情況，一旦你有了一個政治計劃，你就必須制定政策，你必須尋找資金，你必須實施它。

And these things it's not even a short term, it's multi-year program. And so that's one of the reasons why our view is we are hopeful but we believe it's going to take some time. As far as the rebound in jobs and the expansion that's taking place by the tech companies, I'll share with you what we've seen.

這些事情甚至不是一個短期計劃，而是一個多年。這就是我們充滿希望的原因之一，但我們相信這需要一些時間。至於就業機會的反彈和科技公司的擴張，我將與大家分享我們所看到的情況。

The leasing activities have all been in the suburbs. Snowflake is in Menlo Park, Robinhood is in Menlo Park. xAI and we have a couple of small companies that's in South San Francisco, which is great. But another AI company is in Mountain View. I mean it's predominantly in either Bay in the suburbs, maybe one or two small companies in close to the CBD, not San Francisco, but close to it.

租賃活動均在郊區進行。Snowflake 在門洛帕克，Robinhood 也在門洛帕克。 xAI 和我們在南舊金山有幾家小公司，這很棒。但另一家人工智慧公司位於山景城。我的意思是它主要位於郊區的灣區，也許有一兩家靠近中央商務區的小公司，不是舊金山，但離中央商務區很近。

And so -- and that's pretty consistent with historical patterns.

所以 — — 這與歷史模式非常一致。

And then the second question is just on the regulatory front. There's also the governor's actions with Seqwa and the Coastal Commission, which I imagine both of those entities are very protective of their powers. As part of this larger conversation about rebuilding LA and accelerating the process, is there any discussion about dialing back the ultimate powers that both these entities have to improve construction, or is the view that this is a one-time alleviation of those rigorous sort of permission slips, if you will, and that once LA is rebuilt, those entities go back in full force?

第二個問題只是關於監管方面。此外還有州長與 Seqwa 和海岸委員會採取的行動，我認為這兩個實體都非常保護他們的權力。作為關於重建洛杉磯和加速重建進程的更廣泛討論的一部分，是否有關於縮減這兩個實體改善建設的最終權力的討論，或者是否認為這只是一次性減輕這些嚴格的許可限制，一旦洛杉磯重建，這些實體就會全力恢復？

Well, Alex, I wish I had a crystal ball. I think what we're seeing right now is there's an interest and also the need to focus on a massive rebuilding effort that needs to take place. Having said that, how to go about it is complicated. As you mentioned, there are multiple agencies in play here. And I think -- what I think is people want to do the right thing, but everyone has their own process.

好吧，亞歷克斯，我希望我有一個水晶球。我認為我們現在看到的是，人們對需要進行的大規模重建工作感興趣，而且需要集中精力。話雖如此，具體如何做卻很複雜。正如您所提到的，這裡有多個機構參與其中。我認為——人們都想做正確的事情，但每個人都有自己的流程。

And so I think it's going to take a little bit more time to play out on as far as the approval process and the rebuilding process. The -- what we can hope for is that the legislatures are going to try to be more efficient, but keep in mind, now LA is a very large and densely populated area and the economy is huge. And while these -- they're home lost, the jobs remain intact and it's still in the LA area.

因此我認為審批過程和重建過程還需要一些時間。我們所希望的是立法機構能夠努力提高效率，但請記住，洛杉磯現在是一個非常大且人口稠密的地區，經濟規模也非常龐大。儘管他們的家園消失了，但工作仍然完好無損，而且仍然在洛杉磯地區。

The county is the largest county in the US with close to $1 trillion in GDP. And so we are optimistic that LA will figure itself out and that they will benefit from the catalyst of growth with infrastructures and investments coming for the World Cup and Olympics and film industry tax credit. By the way, it's -- the fourth quarter is the first time we sell jobs and the film industry improved for the first time in several years.

該縣是美國最大的縣，GDP 接近 1 兆美元。因此，我們樂觀地認為，洛杉磯將找到自己的解決辦法，並將受益於世界盃和奧運帶來的基礎設施和投資以及電影業稅收抵免等成長催化劑。順便說一句，第四季是我們第一次出售就業崗位，電影業幾年來首次出現好轉。

So these things do give us hope about LA.

所以這些事情確實讓我們對洛杉磯抱持希望。

Haendel St. Juste, Mizuho Securities.

Haendel St. Juste、瑞穗證券。

So I guess my first question is on the development starts here, your first starts in about five, six years. So can you explain a bit more about the opportunity set you're seeing here in development, the markets you a bit more focused on, and how we should be thinking about how you're thinking about yields, IRRs, and potentially, appetite for where you might want to grow the development book to?

所以我想我的第一個問題是關於這裡的發展開始，你的第一次開始大約在五、六年後。那麼，您能否進一步解釋一下您在開發中看到的機會、您更關注的市場，以及我們應該如何思考您對收益率、內部收益率的看法，以及您可能希望將開發書籍擴展到哪些領域？

Hey, Haendel. Rylan here.

嘿，亨德爾。我是 Rylan。

So as you mentioned, we haven't started a development in over 5 years because the risk reward really just didn't make sense. As you're all aware, it is very challenging to develop on the West Coast, and we're trying to do at a high level. We're seeking with our limited capital the highest risk adjusted returns. So we feel like we have an opportunity today. This is in the location adjacent to Oyster Point, one of the largest biotech hubs in the world land at a very low basis.

正如你所提到的，我們五年多來都沒有開始開發，因為風險回報確實不合理。大家知道，在西海岸發展非常具有挑戰性，我們正努力做到高水準。我們正在利用有限的資本尋求最高的風險調整回報。所以我們覺得今天我們有機會。該地點毗鄰牡蠣角 (Oyster Point)，牡蠣角是世界上最大的生物技術中心之一，土地價格非常低廉。

Our costs are down in the high single digits from 2022, and the rents have started to show some momentum in '24. So we are looking for at least a 20% spread to where we think we can buy and we think we have that today. On untrended rents, this project is projected to achieve a mid to high 5% cap rate, and that's with a fully negotiated GMP and a healthy contingency buffer, and we think this project will stabilize in the high 6% range.

從 2022 年開始，我們的成本下降了個位數，租金在 2024 年開始顯示出一些成長勢頭。因此，我們正在尋找至少 20% 的價差，以便我們可以買入，我們認為今天我們已經實現了這個價差。在非趨勢租金的情況下，該專案預計將實現 5% 的中高資本化率，並且這是在完全協商的 GMP 和健康的緊急緩衝的情況下，我們認為該專案將穩定在 6% 的高位。

I wanted to follow back up on a comment I think you made about concessions. You mentioned seeing some declines there recently, but I don't think your 2025 guide reflects any improvement in concessions this year versus last year. So maybe you can give us a sense of where concessions in the portfolio are today. And whether it's fair to think this could be a source of upside with the demand improvement you're seeing in Seattle and San Francisco, where markets, I think you've had a bit more concessions of late.

我想跟進一下您關於讓步所發表的評論。您提到最近看到了一些下降，但我不認為您的 2025 年指南反映出今年與去年相比特許權有任何改善。所以也許您可以讓我們了解一下目前投資組合中的優惠情況。您是否認為這可能成為西雅圖和舊金山市場需求改善的一個推動力，我認為這些市場最近已經做出了更多讓步。

Yeah. Hey, Haendel. That's a good question on concessions.

是的。嘿，亨德爾。關於讓步，這是一個好問題。

Today, the portfolio is sitting at less than half a week, and that's an improvement from December of a little over a week. But having said that, normally, you would see concessions kicked up if we have supply deliveries in the slow season, like December, and which we did. We saw in San Jose and of course, Seattle. And fortunately, San Jose, it's a smaller market in terms of the number of deliveries and so it quickly abated.

如今，投資組合的持股時間不到半週，比 12 月的一周多一點的時間有所改善。不過話雖如此，通常情況下，如果我們在淡季（例如 12 月）有供應交付，你會看到優惠，而我們確實這樣做了。我們在聖荷西和西雅圖當然都看過。幸運的是，聖荷西的市場規模較小，送貨數量也較少，所以送貨量很快就減少了。

Seattle, the supply delivery is comparable to last year and so we don't expect a meaningful change in terms of the concession environment. And in fact, some of the supply actually is moving to the east side where we have the bulk of our portfolio. And so even though I think Northern California will be better, it's -- there's an offset with Seattle at the end of the day. So net net, our concessionary position from year to year is going to be about the same.

西雅圖的供應交付與去年相當，因此我們預計特許環境不會發生重大變化。事實上，部分供應正在轉移到東部，我們的大部分投資組合都集中在該地區。因此，儘管我認為北加州會更好，但最終還是會與西雅圖有所差距。因此，淨收益方面，我們每年的優惠地位將大致相同。

John Kim, BMO Capital Markets.

BMO 資本市場部的 John Kim 說。

So your cash delinquency improved sequentially, but looks like your gross delinquency went up. I'm not sure if the reported and gross is the same number, but I was wondering if you can comment on that. And then when you talk about the 50 basis point improvement for the year, does that include the impact of the accounting change?

因此，您的現金拖欠情況連續改善，但您的總拖欠似乎有所上升。我不確定報告的數字和總數是否是相同的數字，但我想知道您是否可以對此發表評論。那麼，當您談到今年 50 個基點的改善時，是否包括會計變更的影響？

Hi, John. Yeah, it's Barb. So the reported this quarter does factor in the non-cash charge for eliminating the accounts receivable balance. So that impacted the numbers this quarter, and it did show a slightly higher number than what we have been reporting. Cash, on the other hand, did improve from Q3 to Q4. So we're seeing that consistent pattern that we've talked about over the last couple of years.

你好，約翰。是的，這是 Barb。因此，本季的報告確實考慮了消除應收帳款餘額的非現金費用。所以這對本季的數據產生了影響，而且確實比我們報告的數據略高。另一方面，現金從第三季到第四季確實有所改善。因此，我們看到了過去幾年中討論過的一致模式。

And then as it relates to the impact of '25, we have assumed 50 basis points impact to our guidance for delinquency, of which 20 basis points is related to the accounting charge in Q4. And we expect 30 basis points improvement on a cash basis. So for cash for 2025, we expect delinquency to be around 60 basis points, which is where we were in the fourth quarter.

然後，就 25 的影響而言，我們假設拖欠預期將產生 50 個基點的影響，其中 20 個基點與第四季度的會計費用有關。我們預計現金基礎將改善 30 個基點。因此，對於 2025 年的現金，我們預計拖欠率將在 60 個基點左右，與第四季度的水平相同。

And remind us where it was pre-COVID.

並提醒我們 COVID 之前的情況。

Pre-COVID, it was around 40 basis points. And we do expect for 2025 that the first half will be slightly above the 60 basis points and then by the back half of the year, we will be at that 40 basis points level. So back to pre-COVID levels.

在新冠疫情之前，這一數字約為 40 個基點。我們確實預計，2025 年上半年利率將略高於 60 個基點，到下半年，利率將達到 40 個基點的水平。所以回到了疫情之前的水平。

And Barb, on the debt maturities that you have this year, can you update us on where you could raise 10 year on secured notes today and what's incorporated in your guidance for the year?

巴布，關於您今年的債務到期情況，您能否向我們介紹一下您目前可以在哪裡籌集 10 年期擔保票據，以及您今年的指導中包含了哪些內容？

Yeah. So in terms of where the 10 year unsecured bond market is for us today, we're in the mid 5. And unsecured debt is slightly cheaper than secured debt agencies for five year papers around the mid 5s as well. So our -- we do like the 10 year unsecured bond market, but when we go to look to refinance our debt, we'll look at all options to see what's the most attractive at that point.

是的。因此，就目前我們 10 年期無擔保債券市場的狀況而言，我們處於 5 年期中間水準。而且，無擔保債務也比有擔保債務機構的五年期票據稍微便宜一些，票據的利率在 5% 左右。因此，我們確實喜歡 10 年期無擔保債券市場，但當我們尋求再融資時，我們會考慮所有選擇，看看哪一個在當時最具吸引力。

In terms of what's in our guidance, there's a variety assumptions in terms of timing and rates in the numbers. So I'm not going to go into that specifically, but where we are today is kind of consistent with where we were most of last year. We're kind of bouncing around the mid 5 range for most of last year as well.

就我們的指導內容而言，在數字的時間和比率方面有許多假設。所以我不會特別談論這個問題，但我們今天的情況與去年大部分時間的情況基本一致。去年大部分時間我們的表現也都在 5 左右徘徊。

Wes Golladay, Baird.

韋斯·戈拉迪，貝爾德。

I just had a quick question on the structured finance book. I think you said you have about $150 million redeeming this year. Do you have the timing of that? And then on a multi-year look, it looks like it has about 1.6 years of term for the just under $500 million of investments. Will that -- most of that mature next year?

我只是想問一下有關結構化融資書籍的問題。我記得你說過今年你將贖回大約 1.5 億美元。你知道時間嗎？從多年期來看，對於接近 5 億美元的投資，其期限似乎約為 1.6 年。其中大部分會在明年到期嗎？

Yeah. This is Barb. That's a good question.

是的。這是 Barb。這是個好問題。

So in terms of the timing of the $150 million in redemptions, we do expect about 50% to be by mid-year. So most of that's in the second quarter and then one maturity later in the year in 2025. And then in terms -- so that timing is obviously subject to some movement as a couple of our redemptions in '25 are early. Sponsors are looking to term us out as getting permanent financing is cheaper than the construction loan.

因此，就 1.5 億美元贖回的時間而言，我們預計約 50% 將在年中完成。因此，大部分債務將在第二季到期，還有一個將在 2025 年稍後到期。然後從時間方面來看 — — 由於我們在 25 年的幾次贖回都比較早，因此時間安排顯然會受到一些影響。由於獲得永久融資比建築貸款更便宜，贊助商希望與我們終止合約。

So some of those -- debt timing does move around a little bit or could move on us but that's our best guess based on talking to our sponsors. And then in terms of the maturities, yeah, there is the short duration, a couple of them are maturing in the next year, but do have some extension options. So it may or may not get redeemed. It depends on market conditions.

因此，其中一些——債務時機確實會略有變化或可能會對我們產生影響，但這是我們根據與贊助商的交談得出的最佳猜測。然後就到期期限而言，是的，期限較短，其中一些將在明年到期，但也有一些延期的選擇。因此它可能被贖回，也可能不會被贖回。這取決於市場情況。

And then do you expect to invest more -- I think you mentioned you wanted 3% to 5% of the business to be in the structured finance. Will you replenish this or just timing may not be right now?

那麼您是否預計會投入更多資金——我記得您提到過，您希望將 3% 到 5% 的業務投入結構化融資。您會補充這個嗎？

I think it depends on the opportunities, right? So if we see a good opportunity that's appropriate on a risk adjusted basis, we'll look at it. We haven't seen a lot of those. There is a lot of money raised for this product type, and so it's become very competitive. And so we focus more on buying hard assets. We think that's actually better long term for shareholders. So but it will be dependent on market conditions and what we see in terms of opportunities out there.

我認為這取決於機會，對嗎？因此，如果我們發現一個經風險調整後適當的好機會，我們就會考慮。我們還沒見過太多這樣的情況。這類產品所募集的資金很多，因此競爭非常激烈。因此，我們更加重視購買硬資產。我們認為從長遠來看這對股東來說實際上更有利。但這將取決於市場條件以及我們所看到的機會。

Rich Hightower, Barclays.

巴克萊銀行的里奇‧海托爾 (Rich Hightower)。

I'm just piecing together I guess a couple of comments made related to the broader transaction market. So Rylan, I think you said for high quality products, cap rates in your markets are maybe in the mid 4s and if I heard correctly, agency financing perhaps in the mid 5. So I just want to make sure that I guess that implies negative leverage going in and maybe outsized growth as you kind of push the model forward.

我只是拼湊了一些與更廣泛的交易市場相關的評論。所以 Rylan，我想您說過，對於高品質產品，您所在市場的資本化率可能在 4% 中間，如果我沒有聽錯的話，代理融資可能在 5% 中間。所以我只是想確保，我猜這意味著負槓桿的出現，以及在推動模型向前發展時可能出現的超額成長。

So is that pretty consistent with what you guys are seeing in the marketplace and just maybe a little more color on the transaction market in general?

那麼，這是否與你們在市場上看到的情況一致，並且可能總體上對交易市場有更多的了解？

Hey, Rich. That's a fair question, and I think your assessment's correct. I think a lot of buyers, they are assuming negative leverage in year one and trying to solve for how quickly they can get out of it. As it relates to the transaction market at a high level, there was around $16 billion of transactions in California and Washington in our product type in 2024 compared to $7 billion in 2023 and '21 and '22 high water marks in the low 20s.

嘿，里奇。這是一個公平的問題，我認為你的評估是正確的。我認為很多買家都假設第一年的槓桿率為負，並試圖解決如何快速擺脫這種困境。就高層交易市場而言，2024 年我們產品類型的加州和華盛頓州交易額約為 160 億美元，而 2023 年為 70 億美元，2021 年和 2022 年最高水位均在 20 億美元出頭。

So there was a lot more volume traded last year. It feels relatively healthy. There's a very competitive bidding process again for the product that I mentioned that we are targeting. So it feels healthy and it feels the bidder pool is deep, and we just came from NMHC where there was a similar message that there's a lot of capital out there looking to deploy. And people are, I think, growing more increasingly optimistic about the West Coast.

因此去年的交易量要大得多。感覺比較健康。對於我之前提到的我們瞄準的產品，現在又有一個非常有競爭力的招標過程。因此，感覺情況很健康，而且感覺投標者隊伍很深，我們剛剛從 NMHC 得到類似的信息，即有很多資本在尋求部署。我認為人們對西海岸越來越樂觀。

So that is the challenge for us in '25 is to figure out how we can accretively grow despite the competitive market.

所以，我們在 25 年面臨的挑戰是如何在競爭激烈的市場中成長。

And then maybe just a quick follow up on the insurance side of things. I know you said you -- Angela, you said you renewed the policy in December, and so maybe in relation to the timing of the wildfires happening after that, but also before most I think other companies renew their insurance policies, Essex is in a little bit different spot there.

然後也許只是對保險方面的事情進行快速跟進。我知道你說過——安吉拉，你說你在 12 月續簽了保單，所以可能與之後發生野火的時間有關，但我認為在大多數其他公司續簽保單之前，埃塞克斯的情況略有不同。

So if you guys could maybe forecast out how you feel like the next round of negotiations and pricing might go later in 2025. On the other hand, Equity Residential yesterday said they did not anticipate too much of an incremental impact to the way insurance gets priced based on the wildfires alone. So just help us understand how that might play out as we think about even 2026 at this point.

所以你們能否預測一下 2025 年稍後下一輪談判和定價的情況​​。另一方面，Equity Residential 昨天表示，他們預計僅憑野火不會對保險定價產生太大影響。所以，請幫助我們理解，當我們考慮 2026 年時，這種情況可能會如何發展。

Yeah. Hi, Rich. It's Barb. So you're correct. We did renew our property insurance in December. So we're locked in for 11 months of 2025. So really no risk on our insurance renewal to this year. It's way too early for what the outcome will be and we had no damage from the fire. So we're not actively in discussions with our insurance carrier on any claims or anything like that.

是的。你好，Rich。是 Barb。所以你是對的。我們確實在12月更新了財產保險。因此，我們已鎖定 2025 年的 11 個月。因此，我們今年的保險續保其實沒有風險。現在判斷結果還為時過早，而且火災沒有對我們造成任何損失。因此，我們並沒有積極與保險公司討論任何索賠或類似事宜。

So we'll just have to see how it plays out as the year goes on. One thing I will note is over the last two years, our insurance is up 50%. So we have seen a steep increase unlike in the residential home market where it was more limited. So that's the only thing I would comment on. Otherwise, I would say we'll know more as we enter the fall of this year.

因此，我們只需觀察隨著時間的推移，情況將如何發展。我要指出的一件事是，在過去的兩年裡，我們的保險上漲了 50%。因此，我們看到了急劇的成長，而住宅市場的成長則較為有限。所以這是我唯一要評論的事情。否則，我想說我們在今年秋季時就會知道更多。

Julien Blouin, Goldman Sachs.

高盛的朱利安布魯因 (Julien Blouin)。

You sort of touched on this a little bit earlier but sort of Angela, you commented that Seattle and San Jose are projected to lead the portfolio to approximately 4% market rent growth this year because we're also the markets where you had sort of previously warned about the supply pockets. I guess as you looked at the fourth quarter and so far what you're seeing in the first quarter, how is sort of rent growth compared to your expectations and I guess what is sort of giving you confidence that those markets will sort of hold up this year?

您之前稍微提到了這一點，但是安吉拉，您評論說西雅圖和聖何塞預計今年將帶領投資組合實現約 4% 的市場租金增長，因為我們也是您之前曾警告過供應不足的市場。我想，當您回顧第四季度以及迄今為止第一季的情況時，租金成長與您的預期相比如何？

Hey, Julien.

嘿，朱利安。

On the supply landscape, as far as San Jose is concerned, what we experienced in the fourth quarter was that there was an uptick in terms of the supply delivery, which of course, put pressure on rents for about two months. And then the supply got absorbed and we are back to a normalized environment. And so what we expect is that to occur, but the difference with the northern region is that we see a stronger demand relative to the southern region. And that of course is going to provide pricing power in an environment where there's low supply.

在供應方面，就聖荷西而言，我們在第四季度經歷的是供應交付方面的上升，這當然給大約兩個月的租金帶來了壓力。然後供應被吸收，我們又回到了正常化的環境。因此，我們預計這種情況會發生，但與北部地區不同的是，我們看到的需求比南部地區更強勁。這當然會在供應不足的情況下提供定價權。

So even though you have supply delivery, it's going to cause some interim disruption, but it's not permanent. And similarly with Seattle, what we're seeing is the supply delivery, the level is similar to 2024. And what we're expecting is that the cadence to occur in the first half of the year, which is much better than the second half, because when supply delivery comes during a period of strong demand, that absorption happens quickly and the disruption is really minimized.

因此，即使有供應交付，也會導致一些暫時的中斷，但這並不是永久性的。和西雅圖的情況類似，我們看到的供應交付水準與 2024 年相似。我們預計上半年的節奏會比下半年好得多，因為當供應交付發生在需求強勁的時期時，吸收會很快發生，並將幹擾降至最低。

It's when they come in December or November, then it lingers on and takes more concessions and takes longer to work through it. But all in all, net net is that our economy and the fundamentals are quite healthy and therefore, we expect these supply deliveries to be absorbed similar to a typical pace. And so there may be interim lumpinesss from month to month, but overall, we are well set up for the year.

當這些問題在十二月或十一月出現時，問題就會持續下去，需要做出更多讓步，並且需要更長的時間來解決。但總而言之，我們的經濟和基本面相當健康，因此，我們預計這些供應交付將以類似於典型速度的速度被吸收。因此，每個月之間可能會出現一些暫時的波動，但總體而言，我們已經為今年做好了充分的準備。

And following up on John's question on bad debt, so the 50 bps of same-store benefit in '25, excluding the non-cash charge, it doesn't seem like you're sort of baking in much improvement from where you ended the year. I guess just wondering if absent eviction moratoriums, if we could see some improvement in the LA Alameda delinquency levels which still sit above 100 basis points right now.

接下來是回答約翰關於壞帳的問題，25 年同店利潤為 50 個基點，不包括非現金費用，看起來與年底相比並沒有太大改善。我只是想知道，如果沒有驅逐禁令，我們是否可以看到洛杉磯阿拉米達的違法率有所改善，目前該水平仍然高於 100 個基點。

Yeah. This is Barb. I think that's where we need to see the continued improvement. It's taken us the longest to improve LA Alameda. We've made a lot of progress in 2024, but we still need to make further progress to get us back to our long term run rate. And so that's why we're not making as much progress in '24 relative to prior years because we've made the vast majority of it already. So we think it'll be incremental but we've had most of the tailwind already in the prior year.

是的。這是 Barb。我認為這就是我們需要看到持續改進的地方。我們花了最長的時間來改善洛杉磯阿拉米達。我們在 2024 年取得了很大進展，但我們仍需要取得進一步進展才能恢復到長期運行率。這就是為什麼我們在 24 年沒有取得與前幾年相比那麼大的進展，因為我們已經取得了絕大部分進展。因此，我們認為這將是漸進的，但我們在前一年已經獲得了大部分的順風。

Michael Goldsmith, UBS.

瑞銀的麥可‧戈德史密斯。

We've seen pretty good improvement in operating conditions over the last year with the return to office, low supply, favorable affordability for apartments, turnover is low. Yeah, we're still forecasting blended growth of 3% at the midpoint, and this growth is off of relatively muted 2024. And the 3% growth is generally in line with kind of the long term yet the conditions seem pretty favorable. So over the next few years, like are we thinking about growth rates continuing to expand as really or is this kind of like as good as it gets given the favorable environment?

我們看到，去年經營狀況有了相當大的改善，辦公室重新開張，供應量低，公寓價格適宜，營業額低。是的，我們仍然預測中間點的混合成長率為 3%，而這一成長是基於 2024 年相對溫和的成長。3%的成長率與長期預期基本一致，而且條件似乎相當有利。那麼在接下來的幾年裡，我們是否考慮成長率真的會繼續擴大，或者在有利的環境下這種狀況是否已經達到了最佳狀態？

Hi. Yeah, no, that's a good question.

你好。是的，不，這是個好問題。

We do see that the fundamentals will continue to build strength. And one of the reasons why it's more gradual and improvement this year is that the overall economy is moderating from 2024, and that's by consensus forecast. And so we can't disconnect from that too much. Now we do expect the West Coast to outperform given all the fundamentals that we talked about earlier. And that is we expect that to build and to be gradual.

我們確實看到基本面將繼續增強。今年經濟情勢之所以更加漸進和好轉，其中一個原因是，整體經濟從 2024 年開始將出現放緩，這是普遍預測。因此我們不能過度脫離這一點。考慮到我們之前談到的所有基本面，我們確實預期西海岸將表現出色。我們期望這一進程能夠逐步推進。

So for example, October was the first time that we saw job openings from the top 20 tech companies to reach pre-COVID average. And since then, it has remained steady. That's fantastic. But that's three months. And so you will want that to continue to build and gain momentum, and we are seeing that. So it's going to be more gradual for this year and we'll see what happens in the following years.

例如，10 月我們首次看到前 20 家科技公司的職缺數量達到疫情前的平均水準。自那時起，它一直保持穩定。太棒了。但那已經是三個月了。所以你會希望它繼續發展並獲得動力，我們也看到了這一點。因此，今年的進程將會更加漸進，我們將會觀察接下來幾年會發生什麼事。

And just a quick clarification. Are you assuming a normal seasonal curve of blends in the first half of this year?

我只是想快速澄清一下。您是否認為今年上半年混合物的季節曲線正常？

Yeah. Our budget does assume a normal seasonal curve for the entire year.

是的。我們的預算確實假設全年呈現正常的季節性曲線。

Rich Anderson, Wedbush Securities

里奇·安德森（Rich Anderson），韋德布希證券

So on the kind of the pie chart of the company in terms of its geographical footprint, I wonder if you'd be leaning more into northern regions in light of some of the regulatory things that have been brought up in this call in LA and the -- with President Musk, I guess, running point in driving tech potentially. I wonder if we could start to see your aggressive more offense on external growth, leaning more into northern areas and selling out of Southern California.

因此，在公司地理分佈的餅狀圖上，我想知道您是否會更傾向於北部地區，因為在洛杉磯這次電話會議上已經提到了一些監管問題，而且我想馬斯克總統可能會在推動技術方面發揮重要作用。我想知道我們是否可以開始看到您在外部成長方面採取更積極的進攻，更傾向於北部地區並出售南加州。

Hey, Rich. On our investment activities, you actually saw that our activities in 2024 and it was heavily focused in the northern region and the Bay Area. And we -- that dominated our focus because really of the supply and demand and affordability drivers. It was the most favorably, lowest supply relative to all the other regions.

嘿，里奇。關於我們的投資活動，您實際上看到我們在 2024 年的活動主要集中在北部地區和灣區。我們 — — 這主要是因為供需和可負擔性驅動因素。與所有其他地區相比，這是最優惠、供應量最低的地區。

And of course, with all the centers of innovation and technology companies expanding and growing and the Bay Area in recovery -- in the midst of recovery. So Southern California has grown rents by 20%, 30% since COVID and Bay Area is still in the low single digits as an average. So it has the most upside potential and you throw in affordability metrics, boy, it gets really compelling.

當然，所有創新和技術公司的中心都在擴張和成長，灣區也正處於復甦之中。因此，自疫情爆發以來，南加州的租金上漲了 20%、30%，而灣區的平均租金仍處於個位數的低點。因此，它具有最大的上漲潛力，再加上可負擔性指標，它變得非常引人注目。

And so our focus will continue to be in the northern regions really for the reasons that it has the most upside, if nothing else, just from the recovery. As far as the legislation, we've been dealing with legislation our entire lives. And so that in itself would not be a reason to significantly pivot from one region to another. And so when we're talking divestitures, which is, you're asking us if we're going to just sell out of LA for example, we've approached it more property specific rather than a particular city.

因此，我們的重點將繼續放在北部地區，因為這裡擁有最大的上行潛力，至少從經濟復甦來看是如此。就立法而言，我們一生都在與立法打交道。因此，這本身並不是從一個地區轉向另一個地區的理由。因此，當我們談論資產剝離時，也就是你問我們是否要出售洛杉磯的資產時，我們更專注於具體的房地產，而不是特定的城市。

We like all our markets. They have all generated above US average long-term returns. And so it's going to be driven by asset specific reasons. So for example, when we sold the $250 million asset in the Bay Area that Rylan talked about earlier, it was in an attractive evaluation and it was super-duper old. So.

我們喜歡我們所有的市場。它們都產生了高於美國平均水平的長期回報。因此，它將受到特定資產原因的驅動。舉個例子，當我們出售 Rylan 之前提到的位於灣區的價值 2.5 億美元的資產時，它的估值很有吸引力，而且非常老舊。所以。

Super-duper.

超級棒。

Hopefully that helps.

希望這能有所幫助。

Like the technical term, super-duper. The other -- the second question for me is on structured finance. It was said earlier today that redeploying the proceeds from the redemptions would be NAV accretive and you kind of said this, the shorter term nature of structured finances FFO accretive but relative to fee simple ownership not as accretive to NAV.

就像技術術語那樣，超級棒。另外——對我來說第二個問題是關於結構化融資。今天早些時候說過，重新部署贖回所得將會增加資產淨值，您也這麼說過，結構化融資的短期性質會使 FFO 增加，但相對於完全所有權而言，對資產淨值的增加作用並不大。

You mentioned also that you're targeting 4% of your business in structured finance for 2025, the selling point being it's low. So if that's the case, then why doesn't that trend lower and why don't you sort of step out of this business longer term, or is there some reason why a rounding error amount of it in the portfolio matters to you and the firm?

您也提到，到 2025 年，您計劃將結構化融資業務佔比定為 4%，賣點就在於這個比例很低。那麼如果情況確實如此，那麼為什麼這種趨勢沒有降低，為什麼您不在較長時期內退出這個行業，或者是否存在某種原因導致投資組合中的捨入誤差金額對您和公司如此重要？

Hey, well, let me just provide you with a little context. We got into this business at a time where construction costs were growing in double digits and rents were nowhere near. And so preferred equity business provided a very attractive risk adjusted yield and complemented our development pipeline because we had effectively stopped developing during those times.

嘿，好吧，讓我給你一些背景資訊。我們進入這個行業的時候，建築成本正以兩位數成長，而租金卻遠遠沒有成長。因此，優先股業務提供了極具吸引力的風險調整收益率，並補充了我們的開發管道，因為我們在那些時候實際上已經停止了開發。

And that was really the primary thesis for being in that business. So it's not that we don't like the business, it's that over time, it's grown in such a way that it's lumpy, it's not as predictable, and it makes sense to right size that platform. But we still like the business. And having a small percentage of that also gives us additional visibility into the activities of the local developers as well and keep us connected that way.

這確實是從事該行業的主要論點。所以，並不是我們不喜歡這項業務，而是隨著時間的推移，它的發展變得不平衡、不那麼可預測，因此，適當調整該平台的規模是有意義的。但我們仍然喜歡這個生意。其中的一小部分也讓我們更了解當地開發商的活動，並以這種方式保持聯繫。

So overall, it's still a decent business. But in terms of fee simple, I mean I just went through the compelling fundamentals on the Northern California region. And so owning fee simple and having that durable growth to our NAV per share is really the key focus for us in this cycle.

所以總體來說，這仍然是一項不錯的生意。但就所有權而言，我的意思是我剛剛了解了北加州地區令人信服的基本情況。因此，在這一周期中，我們真正關注的重點是擁有絕對所有權以及每股資產淨值的持續成長。

(Operator Instructions)

（操作員指令）

Tayo Okusanya, Deutsche Bank.

德意志銀行的 Tayo Okusanya。

Just a very quick one. Barb, again, the AR non-cash charge off, could you talk exactly about why you decided at this point to charge it off? Is it purely an accounting thing where it aged 90 days or more, or was there some particular reason why you kind of thought that AR was not going to be collectible going forward?

非常快。巴布，再次提到應收帳款非現金沖銷，您能否具體談談為什麼您決定在此時將其沖銷？這是否純粹是會計問題，需要帳齡 90 天或更長時間，還是有某種特殊原因讓您認為 AR 將來無法被收集起來？

Yeah, no, that's a good question. Let me just step back and give you kind of our history.

是的，不，這是個好問題。讓我回顧一下並向你們介紹一下我們的歷史。

So pre-COVID, Essex always had a cash policy. So if the rent wasn't collected in that month, we reserved against it and had no uncollected revenue on our books. When COVID hit and we had unprecedented delinquency in 2020, we accrued a small amount of revenues that we had yet to collect because we knew we would collect revenue over time.

因此在疫情爆發之前，艾塞克斯一直實行現金政策。因此，如果當月沒有收取租金，我們就會將其保留，並且帳簿上沒有未收收入。當新冠疫情來襲，我們在 2020 年出現了前所未有的拖欠現象時，我們累積了一小筆尚未收取的收入，因為我們知道我們會隨著時間的推移收取收入。

And that is not uncommon in the industry. I think most of our peers actually have some on their books. And over the last few years, we've slowly taken that accounts receivable balance down. And given where we are in 2024, given the improvements we've seen and we feel like this is all behind us and we felt it was prudent to take the charge and just write off the remainder and get back to our historical accounting policy of cash basis accounting on revenues.

這在業界並不少見。我認為我們大多數同行其實都有一些這樣的經驗。過去幾年裡，我們慢慢地降低了應收帳款餘額。考慮到我們在 2024 年的狀況，考慮到我們已經看到的改進，我們覺得這一切都已經成為過去，我們認為明智的做法是承擔費用，註銷剩餘部分，並回到我們的歷史會計政策，即以現金為基礎的收入會計。

And that was always the goal to get back there and four years later, we're finally there. So we're pleased with it. We're happy to -- the fact that there's no risk to the financials in terms of we've booked any revenues that we haven't collected. And so we feel good about our conservative accounting policy on that front.

重返那裡一直是我們的目標，四年後，我們終於到達了那裡。所以我們對此很滿意。我們很高興——事實上，就我們已入帳尚未收取的收入而言，財務上沒有任何風險。因此，我們對這方面的保守會計政策感到滿意。

Alex Kim, Zelman & Associates.

亞歷克斯金（Alex Kim），澤爾曼及合夥人。

I wanted to ask about your assumptions for renewals and market rents to converge. Is there any timeline that you're assuming for this spread to tighten? And then I guess just with supply easing on a year over year basis in your markets, is there any risk into mid to late '25, even in '26 that this spread actually widens once again?

我想問一下您對續約和市場租金趨同的假設。您認為這種利差縮小的時間表是什麼？然後我想，由於你們市場的供應量逐年減少，到 2025 年中後期，甚至 2026 年，這種價差是否存在再次擴大的風險？

Hi. No, that's a good question.

你好。不，這是個好問題。

It's tough to predict on timing just because it does relate to market conditions. So for example, if we see a much stronger demand than expected, we're actually -- we will get better market rents. What that means is that spread would then widen, the renewal and newbie spreads, which is a great thing because that means we have more upside on our renewals.

很難預測時間，因為它確實與市場條件有關。例如，如果我們看到需求比預期強勁得多，我們實際上會獲得更好的市場租金。這意味著續約和新手的利差將會擴大，這是一件好事，因為這意味著我們的續約有更大的上升空間。

And -- but as far as -- as it relates to our base case, we are very confident in what we can achieve given that supply is knowable. And with this supply landscape, you don't need a lot of job growth to achieve our numbers. And so I -- our view is that we are in good shape with that midpoint.

但就我們的基本情況而言，在供應可知的情況下，我們對我們能夠實現的目標非常有信心。在這樣的供應情況下，不需要大量的就業成長就能實現我們的目標。因此我 — — 我們的觀點是，我們對這個中點的認識是好的。

And that is all the time we have for today. This will conclude today's conference. Essex would like to thank you for joining them for their fourth quarter earnings call. Thank you again for your participation. You may now disconnect.

今天我們的時間就這麼多。今天的會議到此結束。艾塞克斯感謝您參加他們的第四季財報電話會議。再次感謝您的參與。您現在可以斷開連線。

Goodbye.

再見。