Renewal Rate Growth
Q: How are renewal lease rates trending for the next few months?
A: Renewal rates for May and June are going out in the low to mid-4% range, averaging around 4.3%. They are slightly ahead of schedule in Seattle and Northern California, with Southern California generally as planned but with an LA drag. They have not reforecasted yet but are monitoring peak leasing season activities.

LA Delinquency Impact
Q: Is the overhang from LA and Alameda affecting new lease rate growth?
A: LA is expected to continue being an overhang on delinquency due to the large volume they're working through, which will take longer to resolve. Alameda's improvement is steady and is a smaller part of the portfolio. The overhang is primarily focused in LA, but they are not seeing it bleed into other markets. Delinquency is improving, with April better than the first quarter.

Tech Job Market
Q: What are the tech hiring trends in your markets?
A: They are seeing anecdotal evidence of hybrid workers moving closer to the office to reduce commute times as traffic has picked up. Top 20 tech job openings have increased from about 8,000 jobs last year to 16,000 in March, doubling but still below the pre-COVID average of 25,000. Fundamentals are moving in the right direction, but acceleration will require a more robust pickup in high-paying jobs.

Acquisition and Transaction Market
Q: Can you discuss opportunities for acquisitions and the transaction market?
A: They have significant opportunities to continue acquiring from joint venture partnerships, as demonstrated by the recent acquisition from a maturing JV that was accretive for shareholders. Transaction volumes remain very low, but there's ample capital looking to be put to work in West Coast multifamily, leading to a scarcity premium for well-located suburban properties. They are seeing very competitive bidding with deep bidder pools, both levered and unlevered, and expect this trend to continue.

Dividend Policy
Q: How committed are you to the annual dividend increase given the importance of free cash flow?
A: Maintaining and increasing the dividend annually is very important to the company, and they aim to stay on the dividend aristocrat list. They target a certain percentage of FFO and AFFO yield to go out as the dividend payment, and although the increase won't be 6% every year, they carefully plan to balance dividend growth with capital needs.

Mezzanine Loan Portfolio
Q: What is the status of the mezzanine loan portfolio and associated risks?
A: They had five loans on nonaccrual status or watchlist last quarter and have taken back one asset in the first quarter, reducing the number to four. Of those, three have loans maturing in the next two to three quarters, and on the fourth, they are having productive conversations with the sponsor to contribute additional equity. The book continues to perform, with no new assets added to the watchlist this quarter.

Concessions Burn-Off
Q: Is there any remaining benefit to renewal rates from the burn-off of concessions?
A: There is a little benefit in May, but none expected in June and July. First-quarter concessions pickup impacted renewals by about 60 basis points, and April is about the same. They have concessions burning off in June and July, with August flat and a slight pickup in September into the fourth quarter.

Loss-to-Lease Metrics
Q: Where is the overall loss-to-lease of the portfolio today?
A: Loss-to-lease for the portfolio in April is about 20 basis points. Excluding LA and Alameda, loss-to-lease is a little over 1%. Last year around April, loss-to-lease was 80 basis points. By region, Seattle has the best loss-to-lease at about 80 basis points, Northern California about 10 basis points, and Southern California about 10 basis points.

Impact of Costa-Hawkins Repeal Attempts
Q: What is the outlook on the attempted repeal of Costa-Hawkins?
A: The vast majority of the legislature are not supporting overturning Costa-Hawkins, recognizing the acute housing shortage. They have maintained their coalition to support reasonable legislation, and the proposal has been defeated overwhelmingly twice before. They have not seen anything indicating it will be different this time.

Capital Allocation Strategy
Q: How do you view your equity cost of capital today and capital allocation strategy?
A: They haven't issued common stock in many years due to trading levels, and their cost of equity capital is not attractive. They are looking at other alternatives, including free cash flow, preferred redemptions, and potentially selling assets or JVs. They have always evaluated all sources of capital and aim to remain disciplined.