Jana Gallen

Jana Gallen requested an update on EPR Properties' education portfolio, inquiring about any changing trends observed between early childhood and private school segments.

Answer

Chairman and CEO Greg Silvers highlighted the continued strength of the education portfolio over the past several years. He suggested that this sector might be an area for dispositions in the current year, similar to how the theater portfolio was managed last year, to potentially accelerate growth by capturing good value.

Jana Gallen, on behalf of Jeffrey Spector, inquired about the progress of repairs for marinas taken offline due to storm damage and their expected return to the portfolio. She also asked if Equity LifeStyle Properties was exploring participation in any HUD pilot programs related to affordable housing or manufactured housing initiatives.

Answer

Patrick Waite (EVP and COO) stated that repairs for three storm-damaged marinas were delayed by permitting and construction, with expected completion in late 2026 into 2027. Marguerite Nader (CEO) noted no new HUD initiatives, emphasizing the local challenges in developing new manufactured housing communities despite the product's affordability benefits.

Jana Gallen asked for an update on the progress of repairs for storm-damaged marinas taken offline and their expected return to service, as well as Equity LifeStyle Properties' potential involvement in HUD pilot programs or other federal affordable housing initiatives. She also inquired about the company's appetite for acquiring one-off MH properties versus entire communities.

Answer

Patrick Waite (EVP and COO) stated that marina repairs are progressing despite permitting and construction delays, with expected online dates in late 2026 extending into 2027. Marguerite Nader (CEO) noted no new HUD initiatives, emphasizing that manufactured housing's affordability could address housing issues but faces local acceptance challenges. Nader clarified that the company's acquisition strategy remains focused on buying entire communities rather than individual single-site homes.

Jana Galen asked about AvalonBay's capital allocation strategy, specifically comparing future development projects with share repurchase activity.

Answer

Chief Investment Officer Matt Birenbaum detailed the company's strong balance sheet and flexible capital allocation, outlining a baseline of $1 billion in 2026 development starts in established regions with projected yields of 6.5% to high 6%. He noted the opportunity for share buybacks, as seen in Q3. CFO Kevin O'Shea later elaborated on the balance sheet strength and liquidity, confirming a reloaded $500 million share repurchase authorization and a nimble approach to capital deployment.

Jana Galen asked about AvalonBay's strategy for the next crop of development projects and the capital allocation decisions between new developments and share repurchases.

Answer

Matt Birenbaum, Chief Investment Officer, highlighted the strong balance sheet and a projected $1 billion in 2026 development starts, primarily in established regions, with attractive yields of 6.5% to high 6%. Kevin O'Shea, Chief Financial Officer, elaborated on the company's financial flexibility, including low leverage, $500 million in reauthorized share repurchase capacity, and the ability to fund buybacks through available liquidity and asset sales, emphasizing a nimble approach to capital allocation.

Jana Gallen inquired about the increased near-term leasing outlook and current demand at Kilroy Oyster Point Phase 2 (KOP 2), specifically whether it's primarily traditional biotech or a broader mix of tenants.

Answer

Rob Paratte (EVP, Chief Leasing Officer) reported strong Q3 life science leasing in South San Francisco, with KOP 2 attracting demand from best-in-market projects and a 20% rise in life science demand. He also noted increasing interest from other sectors like semiconductors, AI, and robotics. Angela Aman (CEO) expressed satisfaction with 84,000 sq ft leased at KOP 2, expecting to exceed 100,000 sq ft by year-end, emphasizing the creation of a biotech ecosystem while also seeing demand from non-life science uses.

Jana Gallen inquired about the increased near-term leasing outlook at Kilroy Oyster Point Phase Two (KOP2), asking if current demand and tours are primarily traditional biotech or more diverse. She also asked if the improved and diversified activity across the portfolio would lead to less reliance on shorter-term leasing going forward.

Answer

EVP, Chief Leasing Officer Rob Paratte stated that KOP2 is seeing strong demand, particularly for the best projects, with life science demand rising over 20%. He noted interest from other sectors like semiconductors, AI, and robotics. CEO Angela Aman confirmed 84,000 square feet leased at KOP2, primarily biotech, and expressed confidence in exceeding the 100,000 square feet goal. Regarding lease terms, Angela Aman explained that while short-term renewals are ongoing, new leases are generally longer, though AI companies in San Francisco still seek 3-5 year terms for flexibility.

Yana Gallen asked for more details on the operational improvements MAA is seeing in the Atlanta market, noting that broader market data still appears weak.

Answer

Tim Argo, EVP & COO, clarified that the improvement in Atlanta is relative. While it still lags the overall portfolio, its new lease pricing is the best it has been since early 2023, and year-over-year occupancy has improved by approximately 120 basis points, showing a significant turnaround from its performance in 2024.