Q2 2021 Apartment Income REIT Corp Earnings Call
That's good.
Most important fact of todays apartment market is that strong consumer demand is driving higher rent and higher occupancy.
The most important question for apartment investors is how much of a higher top line will reach my bottom line.
And Eric.
The best in class margins flat controllable operating expenses and low G&A provides purely efficiency in the.
The flow through of revenue to <unk> and cash dividend.
Yeah.
It was on track to accomplish and exceeded its 2021 goals.
If the property operating team.
Superb again.
Bad debt, resulting from California laws, the local ordinances property revenue grew year over year in June and the Zip.
Accelerating to be up year over year for the full year.
Controllable operating expenses are on track to be down for the full year again.
Resulting in a return to full year.
The NOI growth.
The purchase Citycenter upgrading our portfolio and joined the power off of.
The agent.
<unk> issued $300 million plus of equity to reduce leverage.
600 million dollar balance expected by year end.
The selling properties into a rising market.
The result, the beat.
The first half.
Guidance up by 7%.
The increase of the second half guidance up by 7%.
And the range of quarterly dividend up by 2%.
Here is well positioned for an excellent second half.
2022 is shaping up to be even better.
Particularly of quality is excellent and well diversified.
Lots of lease promises to the substantial rent growth.
Dilution of leverage reduction will be behind us.
As always the Chi is the air team and its focus on operational excellence.
To my colleagues in Denver from my teammates from the field, both on <unk> and 10000.
Now to explain what we did all of them.
And what we see ahead I'd like to turn the call the head of the property operations.
Keith.
Terry.
The second quarter was good.
More importantly, our leading indicators.
The continued rapid recoveries in the second half of this year and an excellent 2022.
We are operating with the strategy to the software maximize contribution to margin.
<unk>.
The 18 months.
The long term.
<unk> allows us to deliver on the moment of spot changed as the market dynamics.
Yes.
The address of our approach accordingly.
Our outlook.
This has improved over the past 4 quarters, we call.
First of all calling up on mass.
October.
Net identifying the green shoots in January and then pointing to a rebound in April.
Today, we see acceleration.
The second quarter was good the rigs.
The performance will discuss.
Current in fourth quarter will be record setting.
Yeah.
Alright decisions today to ensure 2022 can change the build on that performance.
What do I see that makes the increasingly optimistic.
Leasing is running at a record pace.
The volume of at least.
In the second quarter.
The report.
Net.
I'm told.
The quality.
The such that we should start book.
Okay.
That's a little awkward, but that's the advice Rocco during the day.
Yeah.
The professional.
The everybody. This is the operator, we're going to drop the main speaker line.
Okay.
We're making robinson the audio issues right now some of the boroughs.
On the whole of years of who will be right back with you as soon as they reach of that.
Thanks, everyone and apologies for the delay.
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And once again, ladies and gentlemen, the call will be get well I'll resume here momentarily. Thank you for your patience and once again today's call will resume momentarily.
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Once again, ladies and gentlemen, we're working through small he or she is here will be right back with the issues. Okay. Thank you for your patience on states followers in the more mature.
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Hello, everyone and thank you for your patience with the passage of merchandise.
Please proceed with Iran.
Thank you this is Lisa Cohn and I feel like Dawn Meridian Groundhog day.
Good day during this conference call of the forward looking.
We make are based on management's judgment.
The projections related to 2021 expectation.
The statements are subject to certain risks and uncertainties of description of which can be found in our SEC filings actual results may differ materially from what may be discussed today, we will also discuss certain non-GAAP financial.
Statement or such as F. F. O. These are defined and are reconciled to the most comparable GAAP measures in the supplemental information that is part of the full earnings release published on <unk> website.
The prepared remarks today come from Terry Considine, our CEO, Keith Kimmel, our president in charge of property operations all of them.
Now as the Chief Financial Officer, and other members of management of our present and will be available during our question and answer session.
All of our prepared remarks, I will now turn the commentary Considine Terry.
Thank you Lisa and thank each of you on this call for your interest in the air.
This is as good.
And it's proof of the very good quarter when the most dramatic glitch is poor sound quality on our call.
The most important fact of todays apartment business is that strong consumer demand is driving higher rents and higher occupancy.
And the most important question for apartment.
Investors is how much of a higher topline will reach my bottom line.
Air with best in class margins flat controllable operating expenses and low G&A per Boe.
<unk> peer leading efficiency and the flow through of revenue to <unk> and cash dividend.
Dividends.
Erez on track to accomplish and exceed its 2021 goals.
The property operations team was superb.
Jim.
Notwithstanding bad debt, resulting from California laws the local ordinances.
Property revenue grew year over year.
<unk> in June and is accelerating to be up year over year for the full year.
Controllable operating expenses are on track to be down for the full year again.
Resulting in a return to full year NOI growth.
Eric purchased Citycenter upgrading our portfolio.
And showing the power of great operations.
Air issued $300 million of equity to reduce leverage with the $600 million balance expected by year end from selling properties into a rising market.
The result was the beat the first half of <unk>.
Up by 7%.
An increase to the second half <unk> guidance up by 7%.
And the raised the quarterly dividend up by 2%.
Era is well positioned for an excellent second half.
Air is even better.
The position we're in excellent 2022.
Portfolio of quality is good and well diversified.
Loss to lease promises of substantial rent growth.
The dilution of leverage reduction will be behind us.
As always the key is the air team and its.
The guidance on operational excellence.
On my colleagues in Denver, and my teammates in the field, well done and 10000 things.
Now to explain what we did how we did it and what we see ahead I'd like to turn the call the Keith Kimmel head of property operations Keith Thanks Terry.
The second quarter.
Focus good.
More importantly, our leading indicators point towards the continued rapid recovery in the second half of this year and an excellent 2022.
We operate with the strategy to sulfur maximize contribution to margin over the horizon of 12 to 18 months.
That long term perspective allows us to look beyond the moment to spot changes in the market dynamics well in advance and adjust our approach accordingly.
Our outlook for the business has improved over the past 4 quarterly calls.
First calling a bottom last October.
Next.
<unk> identifying green shoots in January and then pointing to a rebound in April.
Today, we see acceleration.
The second quarter was good the.
The recent performance, we'll discuss means the third and fourth quarters will be record setting and.
And we will be making decisions today to ensure of 2020.
22 continues to build on that performance.
What do I see that makes me increasingly optimistic.
Leasing is running at a record pace the.
The volume leasing in the second quarter is the best we've ever recorded.
65% ahead of 2020, and 10% ahead of the per.
Best in the second quarter of 2019.
Occupancy is poised to accelerate.
1 key leading indicator is the percentage of units which are leased.
Which includes today's occupancy and all scheduled future moving and move out activity today.
Today, we are 90.
<unk> percent leased.
8% ahead of the same day last year and 4% ahead of 2019.
Our lease percentage in 2019 was a precursor to the 97, 4% occupancy in the fourth quarter driving our bullish outlook for the balance.
90 fire.
Pricing is rapidly improving.
We increased effective asking rents by $130 on average during the second quarter and in July we increased rates another $60.
As a result signed new lease rates increased for the 10th consecutive month.
With July up 9.5%.
That means we've not on the return to our pre COVID-19 rates.
But we have recovered back to the long term growth trend line.
The combination of record leasing higher occupancy and increasing rates will be the drivers that result in a stronger.
On growth in the second half of 2021 and into 2022.
Turning to the second quarter results.
Revenue was lower year over year by 1.9%.
While increasing quarter over quarter by 80 basis points.
The year over year decrease was largely due to the.
The earn in of last year's lower rents.
And continued bad debt elevated due to government suspensions of our contractual rights to collect past due rent.
The trend for year over year revenue growth is improving.
With June revenue up 1.8% from June of 2020, as we begin to earn.
In positive rates from this year.
Bad debt for the quarter was 2.1% as renters, even those without hardship continue to be protected from legal recourse.
That being said I am encouraged that we collected $700000 in city and state rental assistant payments during the quarter.
We offsetting the growing delinquency from those still allowed to live rent free.
Controllable operating expenses were up 2.8% in the second quarter largely due to the timing of expenses last year during the lockdown.
For the full year, we expect controllable operating expenses to be down.
Non compared not only to 2020, but down compared to each of the previous 5 years overall expenses increased 5% driven by increased taxes and insurance.
As a result net operating income for the quarter was down 4.5% and turned positive in the month of.
June up 2.6% year over year.
Most importantly, even at the bottom of the cycle our margins remained strong at 77%.
Continuing a string of 19 consecutive quarters with margins above 70%.
Moving to individual markets, we've improved across the board.
Most markets have recovered not only to pre Covid peak, but also to the long term growth trend in asking rents.
Miami and San Diego were our strongest markets.
Posting signed new lease rates up over 15.
Set in July with asking rates now well above long term trend.
Denver, Boston, Los Angeles, and Washington D C.
Have all steadily strengthened.
Each has signed new lease rates up 8% or more in July and with asking rents also above trend.
<unk>, Prudential adelphia, and keeping with our approach of solving for long term contribution we pursued a strategy of increasing rates in the face of low occupancy. This strength spring excepting the vacancy loss in the anticipation of a rapid recovery in the market.
We have now seen leasing rebound.
And with demand from University City students in center city workers and as of today, we are more of lease that we were in 2019.
Signed new lease rates were up 5% in July as asking rents recovered to pre Covid peak day.
They still lag trend slightly.
Rebound in essence, we made of calculated trade in March lower second quarter occupancy and income for a higher rent roll at the end of peak season.
This decision has been a net positive for both 2021 and 2022.
Pressure continues to ease in the Bay area.
Where we've seen the occupancy rebound with the return of Tech workers.
Rates of gradually strengthened and while they remain below pre COVID-19 peak new leases in July were signed the positive lease the lease.
As a result of these positive trends across our markets July has demonstrated further acceleration.
Rates have reached record levels with signed new lease rates up 9.5% over the prior lease renewals up 5.9%.
<unk> signed blended rate up 7.5%.
We anticipate occupancy of 95, 8% up.
<unk> 8 basis points from June despite the higher frictional vacancy.
And we exited July well position for the balance of the year.
Bad debt will continue to improve with increased California government assistant payments and the anticipated lifting of the eviction moratoriums, allowing us to address.
The third who are delinquent and without a special hardship, while still helping those who are in need.
We will continue to earn in the strong rate growth, we've signed over the past few months with 4000 leases that are already signed and yet to begin and an average increase of 8.6%.
And sustained strong pricing as indicated by a 10% loss to lease and our current rent roll.
Finally occupancy will increase rapidly as we exit peak season, and frictional vacancy dissipates.
As we look to 2022, we expect revenue to benefit.
First 1 on the earn in of the great. The the growth rate of leases already transacted and those to come as we repriced the 10% loss to lease continued growth and rental rates next year recovery of occupancy to pre COVID-19 levels improvements in other income and bad debt is government.
Government restrictions are eased.
Continued discipline in controlling costs and contribution from city center on 7.
Where we have seen the value of air operations in the early days of ownership.
In the first 45 days.
We have raised rents of $350.
<unk> from bridge.
We've transacted 27 leases at rates up more than 20%.
And increased occupancy beyond 97%.
City Center will be a textbook example of how properties are worth more when operated by air.
Over the next year.
On average we will refresh the physical property.
But more importantly, we're putting in place Eric customer selection customer service and customer retention.
We are also implementing errors disciplined property operations. So that work is done more effectively and net lower cost the <unk>.
There are some good result will be a sharp expansion of margin and bottom line.
Just as we've done before for example, with bent tree and our Philadelphia acquisitions.
My Thanks to all of the air team members involved in the successful integration of Citycenter into our portfolio and more broadly.
Thank.
All of the year.
Members, who have worked so hard and so well during the challenging times of the past 18 months, whose energy innovation and commitment to cost of our customers have set us up for a strong rebound in future growth.
With that I'll now turn the call over to Paul Beldin, Our Chief Financial Officer Paul.
Thank you Keith today, I will discuss 5 topics first are strong balance sheet, including our measured strategy to reduce leverage by $900 million over the course of the year.
Second our recent acquisition of cities that are uncertain.
Third our expectations for the remainder of 2020.
'twenty, 1 fourth of our announced dividend increase and fifth our optimism for continued improvement in 2022.
First erez balance sheet is strong and flexible.
As part of the separation transaction, we set of leverage target of debt to EBITDA of 5.5 to 1 and the completion date of year end 2.
'twenty 2.
In April we decided to accelerate our de levering by 12 months to year end 2021.
Our plan is to achieve this result in 3 phases.
During the second quarter, we used the proceeds from our equity issuance to repay $318 million of property debt.
<unk> 20 of the weighted average interest rate of 4.6%.
In doing so we incurred $34 million of prepayment penalties.
The prepayment penalties are justified through future interest savings.
During the third quarter, we expect to contract for property sales, primarily from our New York City and Chicago portfolio.
The providing additional proceeds in excess of $300 million.
Marketing on these properties is well underway demand is strong with numerous would be buyers and attractive pricing.
1 of the things are expected before year end with proceeds of applied to reduce property debt.
Third during the fourth quarter, we expect to.
The raise an additional $300 million are more from the sale of properties outright are enjoined ventures. Our marketing here is also underway with similar high interest and attractive pricing.
Some we are on track to remain raise the remaining $600 million necessary to reduce the leverage to our target level.
The next I'd like to spend a moment discussing our recent acquisition of Citycenter on seventh and Pembroke Pines, Florida.
Many center has 700 apartment homes with average in place rents monthly rents just under $1900. We purchased city center 6 weeks ago for $223 million and anticipate completing the per.
Per trade by selling an additional $175 million of properties in the fourth quarter we.
We expect of 4.2% yield during our first year of ownership and expect this yield to approach 6% over the next few years due to the.
Effectiveness of Keith's operating platform investment of an additional $10 million.
And property upgrades and refreshment and strong local demand.
The transaction will slightly increase leverage the EBITDA at year end, but we expect that rising EBITDA will put us on target soon thereafter.
This transaction is important to portfolio management.
By year end, we expect to have reduced our capital.
<unk> to New York City, and Chicago and increased our allocation of the South Florida by 200 basis points to approximately 10%.
Specter. The result is faster growth because of the strength of the south, Florida market and more predictable taxes and regulation.
Now turning to full year 2021 guidance.
Our second time this year, we are increasing our expectations for <unk> same store revenue and NOI and lowering our expectations for expenses.
We now expect full year <unk> per share between $2.9.
And $2.15.
At the midpoint this is an.
Price of 7% from the guidance, we gave 6 months ago.
Year to date of <unk> of $1 <unk>, our guidance implies 8% acceleration in the second half of the year.
This acceleration is primarily attributable to the revenue and NOI growth embedded in our guidance for same store operations.
During the second half of the year at the midpoint, we expect revenue growth of about 6%.
We are confident in our revenue growth expectations, because most of the growth is based on facts in existence today, including maintaining july's expected average daily occupancy of 95, 8% the earn in.
In of existing leases and incremental commercial income from tenants who of resumes rent payments.
The remainder of unexpected growth of approximately 200 basis points is based on continued improvements in average daily occupancy lower bad debt expense, including government assistance payments continue on at a level similar.
To the 700000 received in the second quarter.
And the contribution from 3700 leases remaining to be executed at rates expected to be 6 to 8 per cent above expiring lease.
Next on July 27th the Airborne of directors declared a quarterly cash dividend of <unk> 44 per <unk>.
Share of 2% increase from the dividend paid in May.
This increase was due to higher revenue results also due to the air business model, which features peer leading efficiency and conversion of higher top line and the bottom line providing of flow through rates of shareholders, 10% higher than the peer average.
I'll conclude the 4 quick comments about next year.
We have the opportunity for substantial revenue growth in 2022 from the earn in of the current 10% loss to lease continued improvements in average daily occupancy and lower bad debt expense second more of our revenue will convert to.
<unk> and dividends because of errors pure leading flow through rates.
Third we expect the increasing contribution from the acquisition of City Center and fourth we expect a significant reduction in interest expense from lower borrowings at lower rates.
The added altogether, we can see that 2022.
Shaping up to be of very good year with that we will now open the call for questions. Please limit your questions to 2 per time in the queue Rocco I'll turn it over to you for the first question.
Thank you Sir on as a reminder, if you'd like to ask the question. Please press Star then 1 on you touched on.
Oh the question has been adjusted to remove yourself from Q.
Moving to.
Today's first question comes from Alex homeless with Zelman Associates. Please go ahead.
Alright. Thank you for taking the question in the in the supplement you discussed.
The the Moody's rating and how that could.
Potentially change later in the Europe do you execute some of your deleveraging.
What incremental benefits you think you'll achieve in that process versus where you already have with the S&P investment grade rating.
Yeah, Alex Thank you for that question.
The desire with the potential of the Moody's rating is continued optionality and by having both of an investment grade rating from.
From Moody's and S&P of it provides us greater opportunity to the the debt public capital markets and as you know today bond pricing is quite attractive and many of our activities. During the course over the past 6 months since the establishment of air haven't had been leading us towards the path of providing that optionality, most notably an increase in our pool of properties.
<unk> that are unencumbered by debt has increased by 50% just in the past 6 months.
Got it thank you and turning to the dispositions you you gave some numbers, but just curious how the weightings will look like on 3 Q4, Q and what do you think they'll due to the port.
In terms of.
The percentage of asset class. So do you expect to have a little more waiting in a or b or C post dispositions.
[laughter], Alex I'll start with that and if somebody else wants to jump in please feel free.
Well the the impacts of the third quarter.
There will actually be on not consequential because of the only real change between now and then is the acquisition of Citycenter.
The transactions we've been discussing discussing are expected to close in the fourth quarter. So from your project a year and you know as I mentioned in the prepared remarks, our allocation to New York and Chicago will come down the Chicago.
The portfolio is kind of a b plus a minus portfolio of the New York portfolio is the C plus <unk>.
And so you'll you'll see some shifts in our weightings from that factor, but I think longer term. What we wanted to do is remain diversified we want to remain diversified in both price points and in geography, and we think the steps that we are undertaking will.
Will help accomplish that goal.
Got it thank you very much.
The next question today comes from Nick Joseph of Citi. Please go ahead.
Thanks.
As you think about redeploying those proceeds from the asset sales what is the coupon on the debt that you're planning to repay and then what are the prepayments.
All of these associated with it.
Yeah, Nick what we're planning today to primarily repay property debt with proceeds from the sales to reduce our leverage again to help reduce our nonrecourse property level debt down to levels that are more in line with the Moody's targets are the.
The average cost of that debt.
We haven't finalized each piece of paper that we're going to repay but I would tell you it's going to come down from the 4.6 that we repaid in the second quarter will be more likely in the the mid 3 range and so there will be prepayment penalties associated with that the.
The amount again will kind of determined will be determined by the.
The actual.
Actual pieces repaid.
But what I will tell you is we've run the numbers, we expect that the interest that'll be saved in future years is greater than the prepayment penalty on the NPV basis.
Are you able to provide a range on it I think last quarter, you had at least given kind of the range for the potential of prepayment penalties.
Yeah.
Not at this point Nick in the in April when we spoke we had already identified the specific pieces of debt that we're going to be repaid.
Thanks.
About your South Florida portfolio are there any additional engineering studies or reinspection of the play that are needed just given kind of the tragedy that happened.
No.
Thanks for the question, Yeah, we routinely work with a structural engineers and architects and others as we're doing any work on our properties as well as any work that's being done on adjacent properties and routinely inspect.
On our property.
The boundaries for the 40 year inspections, and additionally, and so we have no known issues are we.
We are just in an abundance of caution going to go back and take another look at those to ensure that we.
Haven't missed anything which I don't think we have but also just for peace of mind for our residents and teammates who work in those buildings.
Thanks.
Yeah.
The Internet solution, who it comes from John Kim of BMO capital markets. Please go ahead.
Thank you I just wanted to ask for more color on the rent. The uplift you had the city center.
How much of this was due to the market strength versus the era of initiatives.
What.
Do you think you did at the prior owner debt.
I found the question hard to hear because of fluctuation and Sam would you mind repeating it please.
Sure Jeff.
Just some more color on the city center and what you may have done that the prior owner of denim to get that rental.
The uplift and how much of that.
Conversely was due to the market strength.
Jon It's Keith.
I'll take it for you really.
John It became belief.
We just we have a team.
Who operate.
Operates our buildings, who doesn't put a ceiling on the opportunities in front of them and what I would say is is that what we did is when we walked on to the property and we looked how we were performing at our other communities in and around the South Florida area. We can see that there was opportunity to push it much much further.
We also think that.
It could be even more upside as we actually make improvements to the community. So this was literally a day 1 work on site, bringing our team and increase it and then of course not to be missed the the.
South Florida market is very very Red Hawk Theres lots of people that are moving there and there's lots of benefits of living in Florida that.
<unk> is augmenting the performance.
Yes.
Okay and on the new lease change that you had in July.
You mentioned it was led by Miami and San Diego, but it was really broad brushed across your portfolio.
Can you remind us how much of the uplift was due to the rents versus the reduction of concessions.
John.
What has happened is is that we have actually.
Moving beyond that because what has happened is as we would have been a reversion to the mean of the.
Those asking rents that were pre COVID-19 and now we've exceeded what would have been the historic trend lines. So what we're really seeing is not only of recovery, but an acceleration.
And that is happening is the business is getting even better.
So while of course lots of people talk about concessions and coming back, but we really are focused on as we've gone past that mark and we're seeing growth and strength that goes well beyond that.
And what is your expectation for August and September.
It would be better.
Better than July.
Yeah.
Or both.
Indeed, okay. Thank you.
The next question comes from John Pawlowski with Green Street. Please go ahead.
Okay.
Thanks, maybe just wanted to follow up on the on the Florida acquisition does that 160.
The bps yield expansion should we think about that.
3 yield or what's the time to put the capital into the building and then achieve that up.
Okay. John Thank you for the question and your thoughts on timing is right online with our plan on how we're going to be executing it we are starting the refreshment.
But on the improvement process as soon as we're able to mobilize and implement the plans. So that's starting very soon but the completion of that work and then the full earn out earn in of that work as reflected on our results will end up being in our numbers in the third year.
Okay.
But I kind of went out.
Hey, Jonathan.
I left out of a portion of the something I should have said is that our going in yield today at 4.2 is quite strong relative cap rate basis, but we're going to see that expand in year, 2 and eventually end up at that close.
Cost of 6% range in the third year, So youll see a nice expansion in both.
Both years and year 3 of its not just the hockey stick in the third year.
Understood.
On the call late so apologies if I missed this.
As you stand here today do you anticipate additional acquisitions this year.
Yeah.
John This is Terry and we're always looking for opportunities.
The accretive uses of shareholder capital.
Alright last 1 from me Terry when can we hear expected here.
The additions to the board or new New Board New Board members joining.
I think so.
Soon as in months or couple of years or.
As soon as soon John.
Alright.
Thank you for the time.
And ladies and gentlemen, as a reminder, if you'd like to ask.
First of all of them on our next question today comes from Rich Anderson of S. N D. C. Please go ahead.
Hey, good morning, everybody so.
The the strength that we're seeing in the sunbelt.
It reminds me of.
The mid 2000 and ethics in California in the hyper growth debt that was coming out of that market back then and like everything else nothing lasts forever, but I'm wondering if.
If it's maybe the rules of a little bit different. This time, if COVID-19 has created a permanent stigma on on some of the coastal markets, namely, California and that the the ability to push rents, particularly in the sunbelt is more of a permanent condition in your mind or do you think there'll be more of a reversion to the mean between.
Sunbelt in coastal gateway within the next few years or so.
Hey, rich.
Good morning, and it's Terry I'll try and take the cut at it.
We're comparing 2 different markets with 2 different dynamics. The sunbelt market is a 2 day fantastic.
But it's in the context, where where money is free.
The increases in profitability will attract competitive new supply you can see the record level of completions over 27000, I think it is in the Dallas and Houston.
And so that will be.
The dynamic there that there'll be tremendous economic growth and employment growth, but over time, the rental growth will be governed by the cost of competitive new supply.
And in the coastal and coastal markets, specifically in California, which was your question the.
The demand.
The demand is great it's existing.
<unk> today is unsatisfied today, and there's a period of time, where we're building can be absorbed by existing demand and it remains hard to build and so the the competitive new supply will be more constrained.
It is certainly correct that the California is.
Less of a golden state than it was a decade ago or 2 decades ago and that it's dealing with difficult social and political issues and it's something that gives us that makes us want to keep an eye on it.
Okay, Great and then Keith here or maybe Paul to your comments about 2022.
Specifically on the earn in it.
It seems to me.
The upside in 2022 might be more impressive in the first half of the year as opposed to the second half of the year, assuming the earn in kind of only plays a role on the first part of the first half of the year or is that is that the right way to think about it and for the full year 2022 to be sort of equally.
Equally impressive you need you just need market rent growth to continue to to at this pace of greater for for the back half of next year or is it to keep the is that a fair way to think about it.
Richard.
Only.
It is.
A good way to think about it because as we are.
Gaming.
Our momentum in these rates on transactions that are occurring now when you kick off of new year. They will start earning in against the what would have been of lower comp, but the truth is is that when we look at that loss to lease it is spread over our portfolio and so there will be opportunities throughout the entire year for us to re price and.
Our expectation is is that we will continue to see our rate growth on trend. It will go through the balance of 2022. In addition.
Okay, great. Thanks, very much everyone.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to the management team for the final remarks.
Well.
Well Rocco. Thank you very much for hosting us today for those of you.
Questions of her are we thank you for your interest if you didn't have further questions. Please feel free to call Paul or.
Me and we'll be happy to give you our best answers. Thank you so much.
Thank you Sir This concludes today's conference call. We thank you.
You all for attending today's presentation. You may now disconnect your lines of other wonderful day.