Same-Store Revenue Exceeding Expectations
Q: How did same-store revenue perform versus expectations?
A: Management reported that same-store revenue exceeded expectations in the first quarter, with blends running about 20 basis points higher to start the year and trending 100 basis points higher in April and May compared to the original business plan. If sustained, this 1% increase could add approximately $8 million in revenue, translating to about 50 basis points on the revenue line.

Occupancy and Other Income Strength
Q: How are occupancy and other income compared to initial expectations?
A: Occupancy was about 10 to 20 basis points higher than expected in the first quarter, currently at 96.9%, and is expected to decrease slightly as blends are pushed higher. Other income started the year 10% above last year, trending 200 to 300 basis points higher than originally thought, driven by successful initiatives like the bulk Internet rollout. ,

Renewal Rates and Retention
Q: What are the trends in renewal rates and turnover?
A: Renewal offers are going out at around 3.8% through June and 4.5% for July, indicating a more aggressive stance while pushing market rents. The gap between new and renewal leases, which was about 600 basis points in the first quarter, is expected to narrow to 300 to 400 basis points in the second quarter. High retention rates are helping to drive revenue growth ahead of expectations.

Leasing Trends and Market Performance
Q: Which markets are driving leasing improvements into May?
A: Improvements are driven by strength in West Coast markets like Seattle and San Francisco, and East Coast markets like New York, where demand is picking up. Washington D.C., comprising 15% of NOI, is showing strong growth with blends of 4% to 5%, aided by aggressive renewals and sticky tenants. The Sunbelt is also showing positive month-over-month momentum.

Sunbelt Market Outlook
Q: Is the worst behind in the Sunbelt, and what's the outlook?
A: While acknowledging that supply is increasing and peak deliveries are approaching, management is cautiously optimistic due to stronger job growth and record absorption. Concessions have improved significantly, with 1.5 weeks in Texas and about half a week in Florida. Occupancy remains healthy at around 96.5% to 96.7%, and blends are improving month-over-month, from negative 2.2% in the first quarter to negative 1.5% in April. Other income is above 10% in the region, driven by initiatives like the bulk Internet rollout. ,

Other Income Outperformance
Q: What's driving the outperformance in other income?
A: Other income is growing at 10%, outperforming the initial expectation of 5% to 7% growth. This is largely due to the bulk Internet rollout, contributing about $1 million in the quarter compared to $100,000 last year, alongside initiatives like renting out common areas, additional parking, short-term furnished rentals, and package lockers. ,

Expense Trends in Certain Markets
Q: What's causing expense increases in markets like Seattle and Boston?
A: Expense growth in markets like Seattle and Monterey Peninsula is driven by higher taxes, with Seattle's taxes up about 9%, and increased utility costs, with Monterey Peninsula's utilities up 7%. Additionally, overall expenses were impacted by the anniversary of the CARES Act, adding about 350 basis points to growth rates.

Bad Debt Trends
Q: How are bad debts trending, and any expected improvements?
A: Bad debts are running at about 1.5%, totaling around $25 million annually. Trends are improving with delinquency balances decreasing, and management is optimistic about further reductions through actions like ID and income verification, adjusting deposit requirements, and raising credit score thresholds.

Class A vs. B Performance
Q: How is Class A performing versus Class B properties?
A: Class B properties outperformed Class A by about 50 basis points on blended lease rates, with B's at 1% growth versus A's at 0.5%. This suggests that supply dynamics are impacting Class A more than Class B in the Sunbelt, aligning with traditional trends.