Sunbelt supply pressures on rent and occupancy

Consistently mentioned as a challenge in all prior quarters (Q2, Q1, Q4), with high supply levels weighing on fundamentals and lease-ups. " " " " " " " " " "

Meaningful pressure on rent and occupancy due to record deliveries, likely persisting into 2025 and possibly 2026. " "

Recurring topic with similar sentiment; ongoing high supply remains a headwind.

Elevated bad debt levels in key markets (NY, NJ, Mid-Atlantic, LA)

Previously highlighted in Q4/Q1/Q2 as above-normal due to court delays, with slight improvements in some regions but no return to pre-pandemic levels yet. " " " " " " " "

Still elevated (low 2% range in NY/NJ, LA slightly over 2%), with some performance variation by submarket. "

Continuing challenge; slight improvement but remains higher than normal.

Shifting rent growth trends

Previously indicated peak in summer months and seasonal moderation in Q4, with similar patterns in Q2, Q1, and Q4 2023. " " " " " " "

Rent growth was strong earlier in 2024 but decelerated heading into the slower season. " "

Recurring discussion; consistent seasonal softening.

Suburban coastal outperformance with limited new supply

Repeated emphasis on limited new supply driving steady demand in coastal suburbs across Q2, Q1, and Q4. " " " "

Continued outperformance due to suburban tilt (73% suburban) and lower deliveries vs. other regions. " "

Consistent bullish view on suburban coastal markets.

Development yields around 6% fueling external growth

Previously discussed as a key growth lever, with yields around 6% to mid-6%, supporting accretive development in Q2, Q1, and Q4. " " " " " "

Projects started at yields in the low- to mid-6% range, generating 100-150 bps spread over cap rates. " " "

Consistent driver of external growth; management remains confident in these yields.

Record-low turnover tied to high rent vs. own cost differential

Explicitly noted as record-low in Q1 (only 7% moved out to purchase), not highlighted as “record” in Q2/Q3/Q4, but still cited as unusually low. " " "

Turnover remains below historical norms; renting seen as more affordable than owning. "

Mention no longer framed as “record”; still low turnover due to rent vs. own gap.

Narrowing cap rate spreads affecting acquisitions and dispositions

Discussed in Q2 (cap rates ~5% for acquisitions vs. 5.1% for dispositions), indicating a narrowing spread that made buys more attractive. " " " "

No specific mention of narrowing spreads in Q3, but transaction market remains thin. "

Previously noted in Q2; not referenced in current period.

Rising operating expenses (taxes, insurance, legal costs)

Previously observed mid-single to double-digit growth in taxes, insurance, and utilities, with legal/eviction costs also elevated (Q4). " " " " "

Insurance up 10%, moderate relief expected in 2025 as tax abatement expirations wane. " " "

Ongoing issue, but future moderation expected.

Uncertainty around the AvalonConnect initiative

Mentioned in Q4 2023 with no explicit uncertainties but no 2025 guidance provided; not discussed in Q2/Q1. " " "

Not mentioned as uncertain; focus on near-completion (~90% deployed), expecting revenue contribution in 2025. "

No active uncertainty discussed in latest quarter.

Consumer financial pressures (inflation, student loan repayments) impacting rental demand

Only noted in Q1 as pressuring some renters, with affordability trends favoring lower price point assets. "

No mention in Q3.

Mention dropped after Q1, no updates in subsequent periods.