Michael Lewis • Truist Securities

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President and CEO Michael Seton stated the Stoughton demolition should be complete by year-end, with the entitlement process potentially extending into 2026. He explained that capital allocation is a balance between the economic accretion of buybacks and the strategic benefits of portfolio growth and diversification. On leasing, he noted that nearly all 2025 expirations are expected to renew and the company is optimistic about 2026 renewals, with only minor vacancies expected. To improve the cost of equity, he believes demonstrating consistent execution and growth will lead to market recognition, highlighting the company's $360 million in acquisition capacity before needing to raise capital.

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President and CEO Michael Seton stated the Stoughton building demolition should be complete by year-end, with the entitlement process potentially extending into 2026, a strategy chosen to reduce carry costs and maximize shareholder value. He explained that share buybacks are weighed against acquisitions by considering the economic accretion versus strategic benefits like portfolio growth and diversification, targeting a significant basis point disconnect. Seton confirmed minimal 2025 lease expiration risk and optimism for 2026 renewals. To improve its cost of equity, he believes demonstrating consistent performance, executing on its growth pipeline, and utilizing its capital capacity will earn market recognition.

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CEO Paul T. McDermott stated the board determined the current path was best for maximizing shareholder value and that a wider pool of bidders exists for one-off sales. CFO Steven Freishtat explained that future liquidating distributions are at the board's discretion following asset sales and that expected changes to operating expenses are already factored into the provided estimates. Further details were deferred to the proxy filing.

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President and CEO A. Bradley Hill confirmed this trend, stating there is 'definitely' strong pushback against multifamily development in certain Sunbelt municipalities. He cited examples of moratoriums and noted that entitlement processes can take 1-2 years or more, contradicting the misnomer that building in the Sunbelt is easy and quick.

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H. Bolton, CEO, argued that while supply may pick up by 2027-2029, it is unlikely to repeat the current 50-year high, ensuring a prolonged recovery. He also stated that immigration trends have a limited impact on MAA's portfolio, which serves a higher-income resident demographic ($80-85k average income) and is less exposed than lower price-point portfolios or certain coastal gateway markets. Brad Hill, EVP and President, added that historically low interest rates drove the current supply boom, a condition not expected to return.

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President and CEO Colin Connolly attributed strong cash flow to a high-quality, young portfolio that requires less capital. EVP of Operations Richard Hickson explained the move-outs were strategic to gain early control of space for new prospects. EVP and CFO Gregg Adzema noted that while refinancing rates are a headwind, low leverage and strong organic growth have allowed the company to continue growing FFO.

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President and CEO Michael Connolly stated that a speculative development start in 2025 is unlikely, though early-stage conversations with large tenants for 2028-2029 needs are beginning. He noted that the near-term priority remains acquisitions. Regarding Austin, he highlighted that submarkets differ, with the Domain submarket being nearly 100% leased and likely to see development opportunities sooner than the Downtown submarket, which has more supply to absorb.

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Executive Vice President Jerry Sweeney stated that while the specific recapitalization strategy is evolving, the appetite for residential assets is strong. He mentioned key value drivers to address the NAV discount include delivering the $41 million of NOI from the development pipeline and capitalizing on limited new office supply to drive rents. He also noted that future development at Schuylkill Yards and Uptown ATX will be more mixed-use, with options like parcel sales or ground leases under consideration.

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Executive Jerry Sweeney confirmed that discussions with JV partners about an early recapitalization are ongoing and that they do not need to wait for stabilization to act. Regarding Austin, Sweeney and EVP of Operations George D. Johnstone noted the leasing pipeline has grown. While the Uptown ATX development targets larger tenants, the suburban assets will likely lease up through smaller deals. Sweeney also mentioned exploring a residential conversion for two underperforming buildings.

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Executive Jerry Sweeney explained that the two residential conversions are progressing through design and local approval processes, which he believes they will pass. Regarding the business outlook, Mr. Sweeney stated that the market is improving with a flight to quality, he believes Brandywine's occupancy has troughed, and the company is well-positioned for growth despite the short-term guidance change from deferred land sales.

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Steven Roth, Chairman and CEO, acknowledged the capital intensity of the business but stated his belief that Vornado is at the bottom of the cash flow cycle, with improvement expected as the market tightens. Glen Weiss, EVP of Office Leasing, expressed confidence that mark-to-markets will be positive going forward but declined to predict a specific spread, noting rents have increased across the portfolio.

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Chairman and CEO Steven Roth acknowledged the capital intensity of the business but stated he believes the company is at the bottom of the cash flow cycle and expects it to rise in a tightening market. Executive Glen Weiss expressed confidence that the portfolio's mark-to-market will be positive going forward but declined to predict a specific amount, citing quarter-to-quarter fluctuations.

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EVP Glen Weiss detailed that of roughly 1 million sq ft of key move-outs, about 50% has been addressed. President & CFO Michael Franco projected a 2-3 year path for THE MART to return to 90%+ occupancy and $90M-$100M in cash NOI. Regarding the condos, Chairman & CEO Steven Roth stated the remaining four units are 'much less valuable' and the project is 'basically sold out.'

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Executive Brendan Maiorana detailed the occupancy drop, attributing it to specific large move-outs offset by signed leases commencing later in the year. He acknowledged CapEx will remain elevated due to high leasing volume, causing lumpy dividend coverage, but framed it as a positive indicator of future NOI growth. CEO Theodore Klinck estimated that new development would require rents 20-30% above the current market, which has deterred some potential build-to-suit clients.

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Executive Vice Chairman D. Keith Oden clarified that the strategy is about achieving balance and consistent cash flow across their 15 strong markets, not a negative commentary on D.C. or Houston. He highlighted the cyclical nature of market performance, noting that today's top performers were laggards just a few years ago. The goal is to diversify across a portfolio where every market exhibits favorable long-term fundamentals like job growth and in-migration.

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Chairman and CEO Richard Campo stated that the company does not need to sell the written-down land and will not do so in a weak market, preferring to hold it until the timing is right. Regarding new acquisitions, he mentioned that Camden has land under contract in Tampa for a suburban stick-construction project. This aligns with their broader strategy of shifting focus from urban mid-rise developments to more suburban, simpler construction projects.

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CFO Michael LaBelle projected that 2025 FAD would likely be slightly lower, in line with the drop in FFO. However, he noted that cash flow from the portfolio is increasing as free rent periods burn off. He does not expect a significant change in capital expenditures or tenant improvements compared to 2024, suggesting major pressure on FAD is not anticipated.

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Steven Durels, an executive, projected that tenant improvement costs will decline as market leverage shifts to landlords. Matthew Diliberto, an executive, affirmed the dividend is covered and cautioned against using FAD as a coverage metric. Marc Holliday, Executive, stated they expect to deploy capital from the debt fund throughout the year into a robust pipeline of opportunities.

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Executive Matthew Diliberto clarified that the Summit's operating expenses appeared high because its annual percentage rent is paid in the third quarter, which is a normal seasonal trend. CEO Marc Holliday expressed confidence in the recovery, noting that a more rapid recovery could thin the opportunity set for distressed investments. He highlighted numerous positive signs, from full restaurants to the return to office, and pointed to major growth projects like the Times Square casino proposal as drivers of future value, stating he has less concern now than in 2020-2021.

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CFO Allison Marino explained the G&A decrease was due to a one-time recapture of forfeited equity awards from a voluntary resignation. Executive Lindsay Winterhalter stated the future G&A run rate is expected to be flat with no large severance costs. Allison Marino also noted the credit loss provision is an accounting estimate updated quarterly. Regarding development loans, Lindsay Winterhalter and CEO Darrell Crate described them as an attractive use of capital to provide liquidity to developers, with the intent of acquiring these assets for their portfolio at an attractive price.

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CFO Amanda Lombard explained the FFO bridge, attributing $0.02 to one-time expense resolutions and another $0.02 to temporarily lower interest expense in Q3 before a refinancing. The remainder of the sequential decline is due to normal seasonality in operating expenses and G&A. CEO Mahbod Nia commented on the potential NYC broker fee change, stating he doesn't believe it would be a single factor that meaningfully moves rents beyond existing market trends.

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Matthew McGraner, EVP and CIO, attributed the higher FFO guidance to the positive impact of recent debt refinancings and a change in the FFO definition. He stated NXRT will look to layer in new interest rate swaps as market conditions permit. For Q3, he reported new lease rates were down 6.43% and renewal rates were up 2.2%.

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President and CEO Brent Smith attributed the leasing strength to a 'flight to quality,' where tenants move to better, well-capitalized properties, and increased decision-making from larger non-tech users amid return-to-office mandates. Regarding capital allocation, Smith explained the focus is on selling non-core assets to deleverage and position for accretive acquisitions in Sunbelt markets in 2025, noting that pricing for high-quality assets is beginning to stabilize. He concluded that the D.C. market will likely remain challenged regardless of the election outcome.

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