Linda Tsai

Linda Tsai inquired about expected year-over-year changes in tax expenses for Seattle and Washington State in 2026, specifically due to the Seattle Shield Initiative and B&O surcharge.

Answer

Barbara Pak (EVP and CFO, Essex Property Trust) confirmed a baked-in high single-digit Seattle tax increase for 2026 guidance, encompassing the mentioned initiatives, which is a significant change from the meaningful reduction seen in 2025. She offered to follow up with the specific dollar amount.

Linda Tsai asked about expected year-over-year changes in tax expenses from Seattle and Washington State in 2026, specifically due to the Seattle Shield Initiative and B&O surcharge, and requested the dollar amount of the increase.

Answer

Barbara Pak (EVP and CFO) confirmed a baked-in Seattle tax increase in the high single-digit range for 2026, encompassing the mentioned initiatives, which is a significant change from the meaningful reduction seen in 2025. She did not have the specific dollar amount readily available but offered to follow up.

Linda Tsai of Jefferies asked if new lease rates are expected to turn positive in the final two months of the year and inquired about refinancing plans for 2025 debt maturities.

Answer

Executive Angela Kleiman confirmed they anticipate an inflection point for new lease rates to become neutral or positive, helped by easier year-over-year comparisons. Executive Barb Pak stated they are monitoring the bond market to refinance $500 million in unsecured bonds due in 2025. She noted a new 10-year bond would likely price in the low-5% range, creating an earnings headwind as it replaces a 3.5% coupon.

Linda Tsai asked about MAA's expectations for concession burn-off, identifying markets where concessions might dissipate fastest and those where they might persist longer.

Answer

Tim Argo, COO of Mid-America Apartment Communities, noted that concessions are broadly consistent (around 5 weeks, 2/3 of comps offering). He observed increases in downtown Nashville, Raleigh, and Charlotte, while seeing decreases in Tampa and Houston, and stability in Phoenix. He also highlighted improving concessions in inner-loop and urban areas of Dallas and Atlanta.

Linda Tsai inquired about which markets are experiencing higher concessions, where these concessions are expected to burn off soonest, and where they might persist longer.

Answer

Tim Argo, COO of Mid-America Apartment Communities, noted that about two-thirds of direct comps offer concessions, averaging around five weeks. He observed slight increases in downtown Nashville, Raleigh, and Charlotte, while concessions dropped in Tampa and Houston, and stabilized in Phoenix. He also highlighted improving trends in urban areas of Dallas and Atlanta, where concessions have started to come down.

Linda Tsai of Jefferies asked for clarification on the timeframe for when the 85,000 fewer available units in MAA's markets would increase to the 100,000-125,000 range.

Answer

EVP Timothy Argo clarified that the 85,000 figure represents the net absorption over new supply for the four quarters ending in Q2. Given that the figure grew from 45,000 to 85,000 in Q2 alone, he expects it to surpass 100,000 later in 2025 as supply deliveries continue to decline.

Linda Tsai requested more color on the negative 40 basis point revenue earn-in for 2025 compared to the prior year. She also asked if the expected supply moderation in key markets like Atlanta and Orlando would occur concurrently or in a staggered manner.

Answer

Tim Argo, EVP and Chief Strategy Officer, confirmed the -40 bps earn-in for 2025, a shift from the +50 bps earn-in for 2024, attributing the figure to pricing pressure in late 2024. He explained that the supply decline is expected to be relatively consistent across most markets because the peak of construction starts occurred within a narrow window (Q2-Q3 2022) for the majority of their footprint.

Linda Tsai asked whether Simon Property Group's redevelopments involve relocating existing retailers, drawing new entrants, or taking market share, and also sought expectations for occupancy in 2026 versus 2025 across different property formats.

Answer

Chairman, CEO, and President David Simon clarified that redevelopments primarily bring new entrants into the market, though some existing retailers may be relocated. CFO Brian McDade indicated an expectation for some upward opportunity in occupancy across all platforms for 2026.

Linda Tsai asked about the nature of Simon Property Group's redevelopment projects, specifically whether they involve relocating existing retailers, attracting new entrants to the market, or taking market share from other assets. She also inquired about occupancy expectations for 2026 compared to 2025 across different formats (premium outlets, malls, mills).

Answer

David Simon, Chairman, Chief Executive Officer, and President, clarified that redevelopments primarily bring new entrants into the market, though some existing retailers may be relocated. Brian McDade, Chief Financial Officer, confirmed that the company expects some upward opportunity in occupancy for 2026 across all property platforms.

Linda Tsai of Jefferies asked for specific examples of how acquisitions help deepen relationships with retailers, considering Simon's already significant negotiating power.

Answer

Chairman, CEO & President David Simon countered that retailers hold the leverage, as they can close stores or shift online. He explained that having a larger portfolio of properties enhances the commercial relationship, allows for more senior-level engagement with retailers, and builds confidence in Simon's operational capabilities, which ultimately leads to more business.

Linda Tsai of Jefferies asked for specific examples of how acquisitions help deepen relationships with retailers, considering Simon's already significant scale and negotiating power.

Answer

Chairman, CEO & President David Simon explained that a larger portfolio provides more products to offer retailers, leading to more comprehensive, senior-level discussions and repeat business. He countered that retailers hold significant leverage, and having more high-quality properties strengthens the commercial relationship and builds confidence in Simon's ability to deliver.

Linda Tsai asked about the possibility of a consumer demand pull-forward materializing in Q3 due to concerns about holiday inventory levels or future price increases.

Answer

CEO David Simon acknowledged that a pull-forward in demand is 'possible' and something they have observed historically in similar situations. He suggested that if it were to happen, retailer margins might hold up due to potentially higher prices. He concluded that while it's not certain, he 'wouldn't rule it out.'

Linda Tsai from Jefferies asked whether future acquisition opportunities are more likely to be domestic or international, and also requested commentary on the health of the consumer across different segments and geographies.

Answer

Chairman and CEO David Simon indicated that future acquisitions will likely be domestic, as international opportunities must be uniquely compelling, like the Kering deal. Regarding the consumer, he expressed caution about Europe and the lower-end U.S. consumer but remained 'pretty bullish' on the upper to high-end U.S. consumer.

Linda Tsai inquired about the drivers behind the improved NOI margins in 2025, specifically asking how much is attributable to lower turnover versus operating efficiencies, what actions are being taken to control expenses, and the expected trajectory for margins into 2026.

Answer

Chris Lau, Chief Financial Officer, explained that margin improvement is a function of strong top-line growth (96% occupancy, high 3s spreads), effective expense control, and some benefit from property tax timing. He views the business as having long-term potential for margin expansion, with top-line growth exceeding inflation and expense growth held at or below inflationary levels. Lincoln Palmer, Chief Operating Officer, added that returns from the Resident 360 program, realignment of maintenance functions for better decision-making and vendor accountability, and synergies between development and property management purchasing are contributing to cost control and continued improvements.

Linda Tsai asked about the drivers of improved NOI margins in 2025, distinguishing between lower turnover and operating efficiencies, and the trajectory for these margins into 2026.

Answer

Chris Lau, Chief Financial Officer, attributed margin improvement to strong top-line performance (solid occupancy, high-threes spread growth) and effective expense control, aided by property tax timing. He stated that 2024 and 2025 exemplify the long-term opportunity to incrementally increase margins, expecting top-line growth to be inflationary-plus and expense growth to be at or below inflationary levels, leading to continued margin expansion. Lincoln Palmer, Chief Operating Officer, added that returns from the resident 360 program, including realigned maintenance functions for better decision-making and vendor accountability, and synergies between development and property management purchasing, are contributing to cost control.

Linda Tsai of Jefferies asked for an update on resident income-to-rent ratios and the company's outlook on a potential home sales recovery in 2026 and its impact on the portfolio.

Answer

CEO Bryan Smith reported very strong incoming resident financials, with income-to-rent ratios exceeding 5x and average household incomes for new move-ins surpassing $150,000. He viewed a potential housing market recovery as a net positive for the economy and expressed confidence that AMH could maintain occupancy and pricing power due to deep demand and the significant rent-versus-own affordability gap.

Linda Tsai asked for an update on resident income-to-rent ratios and whether new resident incomes were increasing. She also inquired about the potential impact on AMH's portfolio if the for-sale housing market recovers more meaningfully in 2026.

Answer

CEO Bryan Smith confirmed that new resident financials are very strong, with income-to-rent ratios exceeding 5x and average household incomes for new move-ins surpassing $150,000. He viewed a healthier for-sale market as a net positive for the economy and AMH, potentially reducing shadow rental supply, and expressed confidence in the company's ability to maintain occupancy and pricing power.

Linda Tsai asked for an update on resident income-to-rent ratios and inquired about the potential impact of a home sales market recovery on AMH's portfolio.

Answer

CEO & Trustee Bryan Smith reported very strong resident financials, with income-to-rent ratios exceeding 5x and average household income for new move-ins surpassing $150,000 in Q2. He opined that a healthier for-sale housing market would be a net positive, potentially reducing some 'shadow' rental supply, and expressed confidence that AMH could maintain occupancy and pricing power due to deep demand.

Linda Tsai from Jefferies requested more color on the lease expiration management initiative, asking about the quantifiable benefits and the duration of the improvement.

Answer

CEO Bryan Smith explained the initiative is part of a broader revenue optimization strategy focused on shifting renewals to the first half of the year to align with peak demand and pricing power. He noted it's a multi-year program that will accrue benefits over time as leases renew in more favorable periods. He also emphasized that the program offers choices to residents, matching their needs as well.

Linda Tsai from Jefferies inquired if having over half of development costs contracted is typical and what costs remain variable. She also asked if the 200 basis points of FFO outperformance in 2024 is an achievable benchmark for 2025.

Answer

CEO Bryan Smith confirmed that it is typical to have costs for materials and labor locked in for homes under active construction, which represent about half of 2025's expected deliveries. He noted any cost pressures would likely affect the second half of the year more. CFO Chris Lau responded that while outperformance is always the objective, the company's formal guidance range for 2025 should be the point of reference, with the upper end reaching into the 5% growth range.

Linda Tsai requested details on the recently acquired 1,700-property portfolio, including its average age and whether it includes homes in new markets. She also asked which markets might exceed or fall below the 3-4% rent growth forecast for next year.

Answer

CFO Chris Lau provided key stats for the acquired portfolio: average build year of 2007, average size of 2,100 sq. ft., and in-place rents around $2,000, noting it overlays well with the existing footprint. COO Bryan Smith, referencing John Burns' forecasts, highlighted Savannah and Hilton Head as markets likely to be at the top end of the 3-4% rent growth range, with San Antonio expected to be on the lower end.

Linda Tsai inquired about the cadence of the 60% of Kimco's signed-not-open (SNO) pipeline coming online in 2026 and its potential impact on the weighting of same-site NOI between the first and second halves of the year.

Answer

Glenn Cohen, CFO, stated that the impact of the SNO pipeline on same-site NOI in 2026 is expected to be more heavily weighted towards the second half of the year.

Linda Tsai inquired about the cadence of the 60% of Kimco's signed-not-open (SNO) pipeline coming online in 2026 and its potential impact on the weighting of same-site NOI between the first and second halves of the year.

Answer

Glenn Cohen, CFO, stated that the impact of the SNO pipeline on same-site NOI in 2026 is expected to be more heavily weighted towards the second half of the year.

Linda Tsai from Jefferies Financial Group Inc. asked how cap rates have changed since ICSC across different property types and where the best opportunities are.

Answer

President & CIO Ross Cooper responded that all open-air formats—including lifestyle, core grocery, and power centers—are seeing aggressive pricing and high demand. He noted that Kimco's diversified portfolio allows it to be flexible, but currently, no single format is trading at a notable discount.

Linda Tsai of Jefferies requested details on upcoming debt refinancings in 2025 and 2026, including timing and potential interest rate impacts.

Answer

CFO Glenn Cohen outlined ~$290M in remaining 2025 maturities and ~$750M in 2026, noting ample liquidity and flexibility to address them. He estimated current 10-year bond pricing around 5.45%. CEO Conor Flynn added that positive outlooks from rating agencies could improve pricing on future debt issuance.

Linda Tsai requested more details on the $470 million in mezzanine investments, asking about the property types, locations, and quality relative to Kimco's main portfolio.

Answer

President & CIO Ross Cooper stated that the structured investment portfolio mirrors Kimco's owned portfolio in composition. It is geographically diverse and includes both neighborhood grocery-anchored centers and larger lifestyle assets. He stressed that these are properties Kimco is comfortable owning, ensuring strategic and quality alignment with the core business.

Linda Tsai of Jefferies requested more detail on the $470 million in mezzanine investments, asking about the types of properties, their locations, and their quality.

Answer

President & CIO Ross Cooper stated that the composition of the structured program mirrors Kimco's owned portfolio. He described it as geographically diverse and containing both neighborhood grocery-anchored centers and larger lifestyle assets, which are property types Kimco is comfortable owning and operating.

Linda Tsai asked about the potential contribution of the 1 million sq ft of leases in negotiation to Regency's leasing pipeline and whether the company expects the leasing pipeline to continue compressing in 2026 after a Q3 compression.

Answer

Mike Mas, EVP and CFO, indicated that the SNO pipeline has the setup to continue compressing into 2026, driven by occupancy climb. However, he also noted a scenario where it could be maintained or expand due to ongoing new leasing activity and strategic tenant upgrades, as occupancy normalizes.

Linda Tsai asked about the potential contribution of the 1 million square feet of leases in negotiation to the leasing pipeline and if the leasing pipeline is expected to continue compressing in 2026.

Answer

Mike Mas, Chief Financial Officer, stated that the 1 million square feet in negotiation is consistent with prior quarters. He believes there's a setup for the SNOL (Signed Not Occupied Leases) pipeline to continue compressing into 2026, but also acknowledged a scenario where it could be maintained or expanded as occupancy normalizes, with activity shifting to replacing natural attrition.

Linda Tsai asked about the 7% year-over-year increase in foot traffic in April, inquiring how much might be attributable to pull-forward demand and if there were any notable variances in traffic by region.

Answer

President and CEO Lisa Palmer expressed doubt that pull-forward demand was a significant factor, as consumers don't typically stockpile groceries or dining experiences. Alan Roth, East Region President and COO, added that while there were marginal differences, every region saw an increase in foot traffic, so there was no significant regional story to read into the data.

Linda Tsai from Jefferies questioned the stability of the 7%+ development yield and the 150+ basis point spread over acquisition cap rates, considering the rising costs of labor and construction.

Answer

Nicholas Wibbenmeyer, West Region President and CIO, explained that their underwriting process is designed to maintain these yields by accounting for potential cost inflation. He emphasized their strategy of de-risking projects through extensive diligence and securing bids before starting construction. This disciplined approach has often allowed them to outperform initial projections, even in the face of cost pressures.

Linda Tsai inquired about the expected trajectory of occupancy rates over the next couple of quarters, given the current high level of over 97%. She also asked about the outlook for CapEx related to leasing and tenant improvements in 2026 compared to 2025, and requested context on the back-end loaded expenses expected in Q4.

Answer

DJ Busch, President and CEO, indicated that small shop occupancy is expected to slightly decline into year-end and Q1 before reaccelerating to a new high in 2026. He detailed current and projected anchor vacancies, noting that several are strategic for redevelopment or disposition. Mr. Busch also stated that while 2025 CapEx is similar to prior years, the burden is expected to decrease by mid-2026 due to current occupancy levels, leading to greater free cash flow. Mike Phillips, CFO, clarified that Q4 typically sees higher property operating and corporate expenses due to normal operating cycles.

Linda Tsai inquired about the expected trajectory of InvenTrust's occupancy rates, particularly small shop occupancy, over the next couple of quarters. She also asked about the outlook for CapEx related to leasing and tenant improvements in 2026 compared to 2025, and sought clarification on the context of back-end loaded expenses for Q4.

Answer

DJ Busch, President and CEO, indicated that small shop occupancy might slightly decline towards year-end and Q1 2026 before reaccelerating to potentially new high watermarks. He expects CapEx burden to decrease by mid-2026 due to higher occupancy, leading to greater free cash flow. Mike Phillips, CFO, explained that Q4 typically sees higher property operating and corporate expenses due to normal operating cycles.

Linda Tsai from Jefferies asked if FFO guidance would have been raised if acquisition activity had occurred earlier, questioned the same-store growth profile of the sold California assets, and inquired about the future sustainability of the 4-5% same-store growth rate.

Answer

CEO Daniel Busch confirmed that earlier acquisition timing would have likely led to a similar upward revision in operational expectations. He explained that the sold California assets had a less favorable growth profile compared to the high-growth Sunbelt markets they are redeploying capital into. Busch also stated that the 4%+ same-property NOI growth rate appears sustainable, supported by higher rent escalators, near-record occupancy, and a visible pipeline for further small shop occupancy gains.

Linda Tsai asked for comments on the yield for LaCenterra and why traditional open-air centers were highlighted as not being lifestyle centers in the acquisition pipeline.

Answer

Brian Finnegan, Interim CEO and COO, and Mark Horgan, EVP and CIO, reiterated that the acquisition pipeline focuses on assets with compelling growth profiles. They clarified that while LaCenterra is a lifestyle center, the current pipeline of assets under control are more traditional open-air shopping centers, similar in their value-add potential, and that LaCenterra itself has outperformed initial underwriting expectations since acquisition.

Linda Tsai of Jefferies asked for clarification on the yield for LaCenterra at Cinco Ranch and why traditional open-air centers were specifically highlighted as *not* being lifestyle centers in the acquisition pipeline discussion.

Answer

Brian Finnegan, Interim CEO and COO, explained that Mark Horgan was emphasizing that while LaCenterra is a lifestyle center, the current pipeline acquisitions are more traditional grocery-anchored centers, but still offer compelling growth profiles where Brixmor's platform can add value. Mark Horgan, EVP and CIO, reiterated that LaCenterra has outperformed initial expectations, and the company remains convicted in its growth. He clarified that the current pipeline assets are similar in their growth conviction but physically resemble traditional shopping centers.

Linda Tsai from Jefferies asked for details on the La Centerra acquisition, specifically how its traffic and household income demographics compare to the rest of Brixmor's portfolio and the strategic advantages of buying within a master-planned community.

Answer

An executive, likely EVP & CIO Mark Horgan, noted the asset is the 'heart of Cinco Ranch' with limited competition and accretive demographics (HHI of ~$151k vs. portfolio average of ~$120k). However, he stressed the acquisition was driven by the value-add opportunity, not just the demos. CEO James M. Taylor added that they see potential to increase traffic further by bringing in better tenants at significantly higher rents.

Linda Tsai observed that Brixmor's same-store NOI growth guidance is at the high end of its peer set and asked if the company expects to maintain this outperformance in the coming year, given its notably low rent basis.

Answer

CEO Jim Taylor, while not providing future guidance, pointed to the significant forward visibility provided by the signed-but-not-commenced (SNO) pipeline. He explained that the continuous 'stacking' of new rents from this pipeline, while simultaneously replenishing it with new deals, gives the company strong confidence in its ability to continue growing and outperforming.

Linda Tsai asked about the expected level of same-store NOI growth acceleration in the second half of the year, given the drag from lease rejections in the first half.

Answer

President and COO Brian Finnegan explained that the first half of 2025 faces tougher comps from prior-year out-of-period collections and a one-time tax benefit, which, combined with near-term bankruptcy impacts, will mute growth initially. He expects growth to accelerate as the base rent line expands throughout the year from newly commenced leases.

Linda Tsai asked about Agree Realty's strategy for growing its ground lease portfolio, given its increasing proportion in Q4 acquisitions and overall ABR, and inquired about the specific retailer associated with the Q3 lease termination fees.

Answer

Joey Agree, President and CEO, stated that Agree Realty aims to grow its ground lease portfolio opportunistically, noting a higher percentage in Q4 due to unique seller opportunities. He identified the retailer for the Q3 lease termination fees as two Advance Auto Parts stores, which are actively being re-tenanted as part of portfolio diversification.

Linda Tsai asked about Agree Realty's strategy for growing its ground lease portfolio, given its increasing proportion in Q4 acquisitions and overall ABR. She also inquired about the retailer associated with the Q3 lease termination fees.

Answer

President and CEO Joey Agree expressed a desire to grow ground leases opportunistically, noting a higher percentage in Q4 due to opportunistic sellers. He identified two Advance Auto Parts stores as the source of the Q3 lease termination fees, mentioning active re-tenanting efforts.

Linda Tsai inquired about Agree Realty's Q2 ATM usage relative to its overnight offering, the outlook for acquisition cap rates, and management's view on retailer and consumer health amid macro volatility.

Answer

President and CEO Joey Agree clarified that all ATM activity occurred before the April overnight offering. He projected Q3 acquisition cap rates would be similar to Q1 but with higher volume. Agree stated that while consumer health has deteriorated, this benefits ADC's necessity-focused portfolio, as the largest retailers are best positioned to gain market share by managing tariff and inflation pressures.

Linda Tsai noted the occupancy guidance of 96.5% is a step down from the 97%+ levels of last year and asked which markets are expected to see the biggest shift from blended rent growth to occupancy as the primary operational lever.

Answer

President and Chief Operating Officer Charles Young identified markets with supply challenges, such as Central Florida, Texas, and Phoenix, as areas where occupancy may not build back as high as in supply-constrained markets like California or Seattle. In these competitive markets, the company may have to compete more on price, which could impact occupancy as they balance rate and volume. He added that overall turnover remains low, so the main variable is the time homes stay on the market.

Linda Tsai of Jefferies Financial Group Inc. asked for confirmation on whether the company still expects full-year 2025 occupancy to end at 96.5%, as stated previously.

Answer

CEO Dallas Tanner confirmed that the 96.5% year-end occupancy target remains their expectation. He explained that while Q1 occupancy was strong, a seasonal dip is anticipated during the peak move-out season as the company prioritizes capturing market rent growth, which may slightly increase days on market. This dynamic is factored into their annual guidance.

Asked about the criteria for reinstating financial guidance, the status of the tenant watch list in light of the Claire's bankruptcy, and any changes to bad debt guidance.

Answer

The company stated that the unpredictable timing of asset sales prevents them from reinstating guidance. They reported that their tenant watch list is at an all-time low, bad debt is down, and they are not concerned about the impact of the Claire's bankruptcy, as they can re-lease the spaces effectively. Bad debt guidance remains unchanged.

Linda Tsai asked about the expected growth rate of the signed-not-open (SNO) pipeline as a percentage of NOI, the re-leasing spread difference between new leases and renewals, and the quality mix (A, B, C spaces) of the spaces being targeted for leasing.

Answer

President and CEO Jackson Hsieh stated the SNO pipeline will grow substantially due to a strategic shift toward signing more new leases (targeting 45% of the mix vs. a 34% historical average), which will create a more resilient portfolio by 2028. He noted new lease spreads for tenants under 10,000 sq. ft. were 17.6%, while renewals were 5.8%. SVP of Portfolio Management Brad Miller added that 90% of the leasing activity in their plan is focused on A-rated spaces.

Linda Tsai of Jefferies asked about the drivers behind the record $43 billion in sourced deal activity and whether initial cash yields on Q3 investments would be similar to Q2.

Answer

CEO Sumit Roy attributed the sourcing surge to an expanded investment universe, including new geographies like Poland and asset types like data centers, rather than a change in sourcing methods. He projected that investment yields in the next quarter would be "similar to slightly better" than the 7.2% reported for Q2.

Linda Tsai of Jefferies asked if the strategy of driving growth in Europe via mark-to-market recapture was a new development. She also inquired about the portfolio percentage and total addressable market for retail parks.

Answer

CEO Sumit Roy clarified that the strategy has evolved from a value play to a more aggressive, concrete strategy as the company gained scale in Europe. He stated that retail parks represent about 40% of their European portfolio, with roughly $4 billion invested in the U.K. and Ireland out of a total $10 billion in those countries.

Linda Tsai of Jefferies inquired whether elevated lease termination fees and net real estate expenses would normalize by year-end and asked for more detail on how NNN extracts value from underperforming assets.

Answer

EVP & CFO Vincent Chao projected that lease termination fees may remain elevated for a period due to proactive portfolio management, but net real estate expenses should normalize by year-end. President and CEO Stephen Horn explained that value is extracted by selling properties with some lease term remaining to 1031 buyers, avoiding vacancy and maximizing proceeds.

Linda Tsai questioned the increase in G&A guidance for 2025, asking if there was potential for it to come in lower and if it included any charges for the CFO's retirement. She also asked for NNN's perspective on the expansion plans of dollar stores.

Answer

CFO Kevin Habicht clarified that the 2024 G&A was reduced by a one-time $1.7 million tax refund, making the 2025 guidance of $47-48 million a more normalized inflationary increase. He confirmed retirement costs are handled in a separate line item, not G&A. CEO Stephen Horn added that NNN does not actively pursue dollar store deals, focusing on real estate fundamentals rather than the business model, and thus has limited insight into their expansion plans.

Linda Tsai of Jefferies asked whether achieving the high end of the full-year NOI growth guidance would more likely be driven by revenue upside or expense savings.

Answer

President & CFO Alex Jessett responded that it would likely be a combination of both. He pointed to potential expense savings from pending property tax appeals and low insurance claims, while also highlighting revenue upside from strong performance in managing occupancy and delinquency. He concluded that outperformance could come from either side of the ledger.

Linda Tsai from Jefferies asked about the lease-up performance of the single-family rental (SFR) communities in Houston and the key learnings from resident response and traffic generation for these assets.

Answer

President and CFO Alex Jessett acknowledged that the lease-up has been slow, as expected for the demographic, but both communities are nearing stabilization. He highlighted a key positive: residents who take a long time to decide to move in are expected to be "sticky," leading to longer tenures. The company is now focused on evaluating operational efficiency before committing to more SFR projects.

Linda Tsai asked if there was a way to quantify the resiliency of Camden's portfolio, given its quality construction and lower average age, compared to other multifamily buildings in its regions.

Answer

President and CFO Alexander Jessett said it's hard to quantify but noted that after Hurricane Milton, neighboring properties 'looked a lot different.' He attributed Camden's resilience to quality construction and proactive upkeep, such as tree trimming and clearing drains. Executive Vice Chairman D. Keith Oden added that site selection is key, noting that during Hurricane Harvey's 500-year flood, only one community sustained water damage because the portfolio is built outside of flood plains.

Linda Tsai of Jefferies asked how resident turnover improvements varied by region and what the expected trajectory for turnover is for the remainder of the year.

Answer

SVP & COO Michael Lacy stated that turnover benefits are being seen across the portfolio, with slightly more improvement in the Southwest and West regions, including in high-supply markets like Austin. He attributed this to the success of the customer experience project. For the second half of the year, he expects turnover to continue running 200 to 300 basis points better than the prior year, based on the positive trajectory seen in renewal negotiations through September.

Linda Tsai asked if opportunities to reduce turnover were concentrated in specific markets and if there were additional costs associated with these reduction efforts.

Answer

COO Mike Lacy responded that the positive turnover trend is broad-based across all regions, driven by systematic data and customer service efforts. He noted that there is a slight increase in associated costs, primarily through targeted CapEx spending to fix recurring property issues (like HVAC) that are known to cause move-outs, rather than an increase in operating expenses.

Linda Tsai from Jefferies inquired about the potential upfront costs associated with UDR's customer retention initiatives and whether those costs are expected to decline over time.

Answer

SVP Mike Lacy explained that current costs are minimal, involving proactive outreach and occasional small incentives like gift cards. CFO Joe Fisher added that the strategy is less about adding new costs and more about using data to allocate existing resources more intelligently. CEO Tom Toomey framed the initiative as a long-term strategic effort to fundamentally lower turnover and expand margins, driving significant shareholder value.

Linda Tsai asked about the disconnect between Acadia's stock performance and its strong portfolio fundamentals, and questioned the differences in landlord scale between suburban and street retail.

Answer

President & CEO Kenneth Bernstein explained that the market is underestimating secular tailwinds for street retail, such as the direct-to-consumer shift by brands. He contrasted the elusive benefits of scale in suburban retail with the significant advantages in street retail, where concentrated ownership can drive rents approximately 10% higher and improve national leasing and acquisition efforts.

Linda Tsai from Jefferies asked for color on the significant Q2 occupancy drops in Phoenix and Las Vegas and inquired about the drivers behind lower unit churn costs.

Answer

EVP & CIO Matt McGraner attributed the Phoenix occupancy decline to heavy new supply pressure near three specific properties, which he expects to subside by Q4. For Las Vegas, the weakness was concentrated at a single asset, Bella Silara, due to lower traffic. Regarding churn costs, McGraner cited higher tenant retention as the primary driver. CFO Paul Richards added that an increase in smaller, partial renovations shifts some turn-related expenses to the capital bucket, further reducing reported costs.

Linda Tsai from Jefferies asked for color on the significant Q2 occupancy declines in Phoenix and Las Vegas, questioning the cause and the timing of the expected recovery in Vegas. She also inquired about the factors driving lower turn costs.

Answer

Matt McGraner, CIO, attributed the Phoenix occupancy drop to intense new supply pressures near specific properties and the Las Vegas decline to weaker traffic at a single asset. Paul Richards, CFO, added that Phoenix required more concessions. Regarding lower turn costs, McGraner cited higher tenant retention from a focus on renewals, while Richards noted that an increase in capitalized partial renovations was offsetting some turn expenses.

Linda Tsai from Jefferies asked for color on the significant Q2 occupancy drops in Phoenix and Las Vegas, the timing of the expected recovery in Vegas, and the primary factors driving lower unit churn costs.

Answer

EVP & CIO Matt McGraner and CFO Paul Richards attributed the Phoenix occupancy decline to intense new supply pressure near three specific properties, which they expect to subside by Q4. The Las Vegas softness was more isolated to a single asset, Bella Silara, due to weaker traffic. Regarding lower churn costs, McGraner cited higher tenant retention as the main driver, while Richards noted that an increase in smaller, capitalized partial renovations on turning units also helped offset repair expenses.

Linda Tsai asked if the improved cost of capital opens up new investment verticals, how investment spreads might trend, requested an update on the convenience store space, and inquired about G&A expense projections for the next year.

Answer

President & CEO Mark Manheimer stated that the investment strategy will remain consistent, focusing on similar asset types. He affirmed that convenience stores remain an attractive sector due to strong relationships. CFO & Treasurer Daniel Donlan projected that G&A as a percentage of revenue will continue to decline in 2026 as the pace of hiring moderates significantly.

Linda Tsai asked if the improved cost of capital opens up new investment verticals, how spreads might trend, and for an update on the convenience store sector. She also inquired about the outlook for G&A as a percentage of revenue for the next year.

Answer

CEO Mark Manheimer stated their investment strategy will remain consistent, focusing on similar asset types. He described the convenience store space as attractive and noted they may do one deal in Q3. CFO Daniel Donlan projected that G&A as a percentage of revenue will continue to decline in 2026 as the recent pace of hiring moderates.

Linda Tsai asked if the improved cost of capital opens up new investment verticals, requested color on the convenience store (C-store) space and its pipeline presence, and inquired about the outlook for G&A as a percentage of revenue for the next year.

Answer

President & CEO Mark Manheimer stated their investment focus will remain on similar property types, not new verticals. He described the C-store space as attractive but noted Q2's volume was unusually high. CFO & Treasurer Daniel Donlan projected that G&A as a percentage of revenue should continue to decline next year as hiring moderates.

Linda Tsai asked if the improved cost of capital opens up new investment verticals for NetStreet and how that might affect investment spreads. She also requested commentary on the convenience store sector and its presence in the pipeline, and asked for an outlook on G&A as a percentage of revenues for the next year.

Answer

CEO Mark Manheimer responded that the investment strategy will remain consistent, focusing on similar property types. He described the convenience store space as attractive and confirmed it is part of their activity, though Q2's volume was unusually high. CFO Daniel Donlan projected that G&A as a percentage of revenue should continue to decline in 2026 as the recent pace of hiring moderates.

Linda Tsai of Jefferies sought clarification on the "asymmetrical information" used in underwriting beyond Placer.ai and asked about the drivers behind the reduction in G&A expenses.

Answer

CEO Mark Manheimer emphasized that direct relationships and ongoing conversations with tenants about their asset performance are a key source of asymmetrical information that complements data tools. CFO Dan Donlan explained that while recurring G&A as a percentage of revenue has declined due to scaling, cash G&A is expected to rise in 2025 to support portfolio growth with marginal headcount increases.

Lin Tsai of Bank of America inquired about the clinical development plan for pilavapadin, asking about the design and number of planned Phase III studies, the potential timeline for data readouts, and what additional studies would be required for an NDA submission.

Answer

Dr. Craig Granowitz, SVP and Chief Medical Officer, confirmed plans for two parallel Phase III trials (one US-only, one global) with similar designs, each enrolling approximately 300-350 patients per arm. He stated a third trial is not deemed necessary due to the robust signal observed. For NDA submission, he highlighted the need for addiction liability studies, additional metabolism studies, and long-term preclinical trials, while expressing confidence in the existing manufacturing process.

Lin Tsai asked about Lexicon's confidence in securing a narrower label for ZYNQUISTA in the 60-90 CKD subgroup following the AdCom, and what actions could be taken to persuade the FDA. He also inquired about expectations for placebo-adjusted efficacy in the upcoming LX9211 pain program data.

Answer

Dr. Craig Granowitz, SVP & Chief Medical Officer, stated that Lexicon remains engaged with the FDA ahead of the December 20 PDUFA date but could not comment further. CEO Dr. Mike Exton clarified that the 60-90 CKD subgroup represents a larger, not a 'skinnier', patient population. Regarding the pain program, Dr. Granowitz expressed hope for greater efficacy in the Phase IIb study compared to the pilot, attributing this potential to lower expected dropout rates and a better tolerability profile.

Lin Tsai of Jefferies questioned the company's confidence in its Q2 guidance for 100-110 patient infusions, asking for confirmation of a current spike in patient uptake to support the forecast.

Answer

Chief Commercial Officer Daniel Kirby affirmed the company's confidence in the Q2 guidance, stating that demand in the second quarter is strong and supports the projected number of patient infusions.

Lin Tsai of Jefferies Financial Group Inc. asked about the competitive efficacy targets for Bysanti in Major Depressive Disorder (MDD), the study design for VQW-765 in social anxiety, and the regulatory strategy for tradipitant in gastroparesis following its Complete Response Letter (CRL).

Answer

President and CEO Dr. Mihael Polymeropoulos explained that for Bysanti, a specific placebo-adjusted margin on MADRS/HAM-D is not prespecified due to high variability in depression studies. For VQW-765, he noted the Phase III study will begin in Q3 2025, with a design similar to a previous study using the Trier test, which is soon to be published. Regarding tradipitant, he described the ongoing and complex FDA hearing process, confirming that a new filing is not required as it is part of the original review cycle.

Lin Tsai inquired about the sales trends for Ohtuvayre moving from Q1 into Q2 2025, asking for color on metrics in April and how the sales curve might evolve through the rest of the year, considering seasonality and refill rates.

Answer

CEO David Zaccardelli, while declining to provide Q2 projections, confirmed the launch is accelerating across all metrics, including prescriptions, new prescribers, and refills. He noted that while the launch is still early, the company is confident in its growth trajectory, which will build as new patients are added and the refill business grows. Zaccardelli acknowledged the vast untapped market of symptomatic COPD patients, suggesting significant room for continued growth.

Lin Tsai of Jefferies inquired about Ohtuvayre's sales trends moving from Q1 into Q2, the potential impact of Q1 seasonality, and the anticipated shape of the sales growth curve for the remainder of the year.

Answer

David Zaccardelli, Chief Executive Officer, declined to provide forward-looking guidance for Q2 but affirmed the launch is performing exceptionally well across all metrics, including prescriptions, new patients, and refills. He acknowledged the typical Q1 seasonality but expressed strong confidence in continued growth, emphasizing the large, untapped patient population and the early stage of the launch.

Lin Tsai inquired about the potential Q1 impact from insurance resets on sales and gross-to-net margins, and also asked for commentary on the 2025 revenue consensus and the timeline for achieving breakeven.

Answer

Chief Financial Officer Mark Hahn explained that while commercial co-pay assistance could be affected, the overall impact on gross-to-net in Q1 should be minimal due to the small percentage of commercial patients. Chief Commercial Officer Chris Martin added that he believes the strong launch momentum will outweigh any negative effects from deductible resets. Regarding breakeven, Mark Hahn stated that a cash flow breakeven run rate is achievable at an annual sales rate of $250 million to $300 million, which could be reached by the end of the year. Executive David Zaccardelli expressed confidence in the growth trajectory without directly addressing the consensus figure.

Lin Tsai asked for clarification on the statement that October net sales exceeded the entire third quarter's sales, questioning if this implies a Q4 run-rate of at least $17 million. He also inquired about potential headwinds like holiday slowdowns or patient drop-offs, and asked for the number of unique patients as of October.

Answer

David Zaccardelli, an executive at Verona Pharma, confirmed the underlying math but did not provide formal Q4 guidance, stating the company sees no reason for a slowdown and expects continued acceleration. He noted that the vast majority of the 5,000+ prescriptions filled are for unique patients and that early refills are just beginning, characterizing the patient growth as fluid and accelerating week-over-week.

Lin Tsai inquired about the expected payer rejection and patient abandonment rates for Ohtuvayre, the availability of a free drug program, and whether the company was comfortable with Q3 consensus revenue estimates, which imply around 1,400 patients.

Answer

CEO David Zaccardelli confirmed the existence of patient support and bridging programs instead of a traditional sampling program. Chief Commercial Officer Chris Martin elaborated that while it's early, they anticipate lower abandonment rates as Ohtuvayre is reimbursed under a medical benefit, not pharmacy. He also noted the submission of a product-specific J-code application. CFO Mark Hahn cautioned against simple patient number calculations for revenue, highlighting that channel inventory fill will also be a factor.

Lin Tsai of Jefferies inquired about Avadel's revised 2025 guidance, asking if the implied second-half growth was achievable and seeking a rank-ordered list of the key growth drivers. He also asked if the recent favorable court ruling was a base-case or best-case scenario and what the next litigation steps are.

Answer

CFO Thomas McHugh confirmed the guidance implies continued sequential quarterly growth in the second half of the year. CEO Gregory Divis attributed the strong performance to broad improvements across all key metrics, including increased patient demand from sales force expansion and better patient pull-through from the reimbursement team. Divis characterized the court ruling as their 'base case assumption' and a critical win that provides a clear path to pursue an FDA submission for LUMRYZ in Idiopathic Hypersomnia (IH).

Lin Tsai asked about patient trends observed in October and early November, the company's confidence in a strong Q4 growth trajectory despite seasonality, and whether LUMRYZ will continue to gain share from all patient segments, including existing oxybate users.

Answer

Richard Kim, an executive, confirmed that strong demand for LUMRYZ has continued into the fourth quarter. He acknowledged potential seasonal impacts from fewer office visits and selling days, as mentioned by CFO Tom McHugh. Kim reiterated that switch patients remain a core and important part of the business, even as the new-to-oxybate segment shows accelerated growth.

Lin Tsai from Jefferies sought confirmation that the recent settlement with Teva establishes the earliest possible generic entry for Auvelity. He also asked if this extended patent protection emboldens Axsome to pursue additional indications for AXS-05 beyond the currently planned ones.

Answer

Hunter Murdock, General Counsel, confirmed that Teva has a 180-day regulatory exclusivity, making it the first generic to launch. Herriot Tabuteau, CEO, added that the company has always planned to pursue other indications for AXS-05 and reiterated that the near-term focus remains on the sNDA filing for Alzheimer's disease agitation and initiating a Phase III trial for smoking cessation.

Linda Tsai asked about the expected timing for settling the $890 million in undrawn forward equity and whether improving conditions in California would alter the pace of diversification away from coastal markets.

Answer

CFO Kevin O'Shea anticipates the vast majority of the forward equity will be settled in the third and fourth quarters. CIO Matthew Birenbaum stated that despite positive short-term trends in California, the company's long-term strategy to diversify its portfolio and limit exposure to California's regulatory environment remains unchanged.

Linda Tsai from Jefferies asked if the projected reacceleration of effective rent growth would continue into January 2025. She also inquired about potential yield differences between townhome and detached build-to-rent (BTR) products and where townhomes fit in terms of resident preferences.

Answer

COO Sean Breslin declined to provide a forecast for January but reiterated confidence in the November and December projections. CIO Matthew Birenbaum stated it is still early, but he does not see significant differences in yields or cap rates between townhome and detached BTR products. He suggested customer preference is often location-driven, with townhomes in closer-in locations and detached homes further out.

Linda Tsai inquired about plans for further market exits after Birmingham, leasing velocity for the upcoming peak season, and the performance difference between Class A and Class B assets.

Answer

President and CFO Jim Sebra stated there are no current plans for further dispositions. He noted that leasing demand heading into the peak June/July expiration months is 25% higher than last year. He also provided a specific performance delta, with Q1 blended rents at +40 bps for the Class B portfolio versus -80 bps for the smaller Class A portfolio.

Linda Tsai asked for the 2024 bad debt figure and its contribution to same-store growth, as well as the company's year-end leverage target for 2025.

Answer

CFO James Sebra reported that bad debt was 1.9% of revenue in 2024, contributing about 30 basis points to growth compared to 2023. For year-end 2025, he stated the leverage target is in the 'mid-5s' net debt to adjusted EBITDA.

Linda Tsai of Jefferies asked whether IRT is observing a growing trend of institutional owners taking on higher insurance deductibles to offset rising premium costs.

Answer

CFO James Sebra acknowledged hearing anecdotes of others taking higher deductibles to manage premiums but could not confirm if it is a widespread trend. He stated clearly that IRT did not change its own deductibles during its May insurance renewal.

Linda Tsai asked how sales productivity at Legacy West compares to other KRG assets, about the portfolio's luxury retail concentration, and the outlook for further acquisitions this year.

Answer

CEO John Kite stated that Legacy West's sales productivity is similar to or slightly better than its Southlake asset. He confirmed Legacy West has the highest concentration of luxury retail in the portfolio, which opens a new channel of tenants. On future acquisitions, Kite said that while KRG is always monitoring the market, nothing of Legacy West's quality is currently under active consideration.

Lin Tsai from Jefferies asked about the approvable endpoints for sepranolone in pivotal studies, the potential for an accelerated approval pathway for the NDV-01 bladder cancer compound, and whether more in-licensing deals could be expected.

Answer

Executive Sergio Traversa explained that for Tourette Syndrome, the endpoint is typically the Yale scale, but they may also incorporate measures of compulsivity, the drug's strength. For NDV-01, he expressed hope for a single registration study based on precedent but stated they will align with the FDA before commenting on an accelerated pathway. Regarding future deals, Traversa confirmed they are always evaluating opportunities that fit their selective criteria but have nothing imminent to announce, emphasizing a focus on building a quality pipeline.

Lin Tsai from Jefferies questioned whether the initial single ascending dose (SAD) data for the DM1 and FSHD programs would be conclusive enough for investors to assess their potential superiority, or if MAD data would be required.

Answer

CEO Douglas Ingram characterized the upcoming SAD data as a very important proof-of-biology moment, highlighting safety, muscle concentration, knockdown, and gene splicing. While cautioning against overselling early data, he noted it should provide signals of the potential product profile. Dr. Louise Rodino-Klapac added that they will be looking for the strong preclinical-to-clinical translation seen in other Arrowhead programs, which would be a good indicator of future success.

Lin 'Andrew' Tsai of Jefferies asked for reconciliation of a comment from partner Roche about 450 U.S. patients being treated with ELEVIDYS, suggesting this could imply a Q4 sales figure above Sarepta's current guidance.

Answer

President and CEO Doug Ingram declined to confirm or comment on the number provided by Roche, stating that Sarepta will use revenue as its primary performance metric and is standing by its existing guidance. He qualitatively noted that an extraordinary number of patients have been dosed, including over 80 late-ambulatory or non-ambulatory patients, with a consistently positive safety profile.

Linda Tsai asked if management is seeing better underwriting opportunities in specific geographic regions or particular retail formats.

Answer

EVP & CIO Jan Sweetnam responded that it is difficult to specify a particular type, as good yields are being found across the board on the larger centers they prefer. He stated that opportunities are evaluated on a case-by-case basis depending on the asset and its market. CEO Donald Wood concurred, stating there was no real preference.

Linda Tsai asked how the embedded growth for Seattle, D.C., New York, and San Francisco compares to the 80 basis point portfolio average, given the company's favorable outlook on those markets.

Answer

CFO Bob Garechana explained that D.C. and New York have strong embedded growth, likely above the portfolio average, due to strong leasing in 2024. Conversely, Seattle and San Francisco are closer to or slightly below the average, as their 2025 growth story is more dependent on in-year leasing activity and recovery rather than the starting rent roll.

Lin Tsai asked about the assumed placebo rate for the ongoing X-TOLE2 and X-TOLE3 studies and what measures are being taken to control for placebo risk.

Answer

CEO Ian Mortimer stated that their statistical models are based on the actual high-teens placebo rate from the Phase II X-TOLE study, providing over 99% power for the high dose. CMO Dr. Christopher Kenney added that placebo risk is being mitigated through careful selection of geographic regions, experienced clinical sites, and the use of electronic diaries to ensure high-quality data.

Lin Tsai from Jefferies asked for clarification on the latest SPN-817 seizure reduction data, the potential positive read-through from AbbVie's recent pump approval for SPN-830, and whether the strong MADRS reduction seen in the SPN-820 MDD study could be replicated in the upcoming TRD study.

Answer

Executive Jack Khattar confirmed the robust SPN-817 data, noting seizure reduction improved to 66% in the post-maintenance extension period, which informed the Phase IIb dose selection. Regarding the SPN-830 pump, he stated that a competitor's launch is welcome as it helps build the market category. For SPN-820, Khattar acknowledged the challenge of predicting placebo-controlled results but emphasized that the open-label data, showing rapid and high remission rates, is exceptionally strong.

Lin Tsai of Jefferies inquired about PALISADE-3 screen failure rates, the study's enrollment cadence compared to previous trials, and the status of the PALISADE-2 publication and a potential Breakthrough Designation filing.

Answer

Chief Operating Officer Joshua Prince confirmed that screen failure rates are consistent with projections. Chief Executive Officer Shawn Singh noted the enrollment cadence is on track and benefiting from a more predictable post-pandemic clinical environment. Regarding regulatory matters, Singh stated the PALISADE-2 manuscript is in a mature stage of development and that the company is optimistic about its potential to move beyond its current Fast Track designation.

Linda Tsai asked about the weighted average lease term (WALT) for Curbline's portfolio, what metrics besides OCR are used to monitor tenant health, whether disposition pricing would have differed a year ago, and the size of the addressable market that meets Curbline's quality criteria.

Answer

CFO Conor Fennerty stated the WALT is about 5.2 years. CEO David Lukes highlighted cell phone traffic data as a primary tool for understanding customer visits and tenant performance. He estimated that about 15% of the total U.S. convenience inventory meets Curbline's high standards, representing a substantial growth opportunity.

Linda Tsai asked about the plan for SITE Centers' credit rating post-spin, whether it would transfer to Curbline, and what rating agencies would require for Curbline to achieve an investment-grade rating. She also inquired about regional variations in rent mark-to-market potential.

Answer

CFO Conor Fennerty stated that SITE Centers would withdraw its credit rating after paying off its unsecured bonds prior to the spin. Curbline, as a new entity, would need to go through a new rating process. He noted scale is the biggest factor for a public IG rating, and Curbline will have the 'ingredients' to be an issuer, though not on day one. Regarding rents, he explained mark-to-market potential is driven more by unit type (e.g., seasoned pads, drive-thrus) than by region.