Hello, and welcome to today's Apartment Income REIT C all. all. My name is Charlie, and I will be coordinating your call today. If you would like to ask a question during the presentation, you may register to do so by pressing star followed by one on your telephone keypad. I will now hand you over to your host, Lisa Cohn, to begin. Lisa, please go ahead. Thank you, Charlie, and good day. My name is Lisa Cohn, and I am President and General Counsel of AIR Communities. During this conference call, the forward-looking statements we make are based on management's judgment, including projections related to 2022 expectations. These statements are subject to certain risks and uncertainties, a 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 measures, such as funds from operations. 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 AIR's website. Prepared remarks today come from Terry Considine, our CEO, Keith Kimmel, in charge of property operations, John McGrath, new Chairman of our Investment Committee, and Paul Beldin, our CFO. Other members of management are also present. All of us will be available during the question and answer session, which will follow our prepared remarks. I will now turn the call to Terry Considine. Terry. Thank you, Lisa, and thanks to all of you for your interest in AIR. I want to begin by thanking the entire AIR team for an outstanding fourth quarter and an excellent 2021. We expect this year will be even better. The great results are your achievement. Our shared optimism reflects your skills and your commitment. I'm proud to be your teammate and your spokesman today. 2021 was an important year for AIR. We completed the commitments made in December of 2020, when we began business as the simplest, most effective, and most efficient way to invest in multi-family properties with public market liquidity. As Keith will report, we emphasize property operations and again delivered peer-leading customer satisfaction, cost control, and operating margins. As John will report, we upgraded our portfolio, selling off the bottom and acquiring properties with expected faster growth and higher returns. As Paul will report, we increased FFO per share by 8% from our initial guidance and substantially strengthened our balance sheet. We added to our long-standing commitments to corporate responsibility, and we refreshed our board of directors, electing three new highly qualified and diverse directors. As a result, we're well-positioned to execute our strategic objectives, including the specific priorities for 2022 set by our board of directors at its meetings last week. First, continue a simple and efficient business model focused on low execution risk and low financial risk. We believe risk reduction will lead to more consistent and predictable results, the foundation for the long-term organic growth of our business. We will work to improve our already peer-leading operating platform, what Keith calls the AIR Edge, and we'll describe in more detail. We know that apartment markets are highly competitive, that Keith and the entire AIR team are committed to continue to be best in class. Second, enhance our portfolio through disciplined capital allocation. We'll invest in top-rated submarkets, maintain broad diversification, and invest only where we can earn attractive spreads to our cost of capital. We intend to grow, but will not do so by increasing leverage beyond our targeted range or by funding transactions through dilutive equity issuance. Third, maintain the opportunities and flexibility inherent in our low-risk balance sheet. We'll expand our sources of debt and equity capital. Last year, we welcomed Blackstone as a new partner. This year, we look forward to deepening relationships and building additional partnerships. Fourth, be good neighbors. We'll advance our many and longstanding activities to provide community as well as housing to our residents. To continue as a nationally recognized employer of choice for our team and an exemplary corporate citizen with transparent and objective reporting of our goals and their achievement. Finally, and importantly, be good stewards of shareholder capital. We'll address all our goals with low overhead costs and a high degree of alignment with shareholders and their expectation of competitive risk-adjusted returns. With that, I'll turn the call over to Keith. Thanks, Terry. The fourth quarter was outstanding, wrapping up a successful 2021, and we anticipate 2022 will be even better. As expected, occupancy continued to strengthen with a fourth-quarter result of 98.1%, up 160 basis points from the third quarter. Rates reached new high-water marks with signed new lease rates up 13.5%, renewals up 11%, and blended rates up 12.8%. Our customer service remained consistent with nearly 10,000 surveys during the quarter, scoring us above 4.3 out of five stars. As a result, our trailing twelve-month turnover reached a record low of 39.7% with 550 fewer move-outs in 2021 than 2020. Strong operations translated into robust financial results for the quarter. Revenue was up 9.9% from the fourth quarter of 2020. Bad debt showed continued improvement at 90 basis points for the quarter, with 97% of residents paying rent in full, consistent with recent quarters, and an increase in government assistance payments, largely offsetting the number of continuing delinquents concentrated in Los Angeles, where renters, even those without hardship, continue to be excused from legal enforcement of their contractual obligations. Expenses were down 90 basis points year over year, with controllable expenses down 3.8% due to lower marketing and lower turn costs due to record low turnover. Net operating income was up 14.3% from the fourth quarter of 2020. This brings us to the AIR Edge. Simply put, the AIR Edge is the unique constellation of innovations and integrations AIR has implemented. The AIR Edge includes our physical assets and upgrades, our technology platform, our analytics engine, our staffing design, and most importantly, our team, which has exceptional expertise, a passion for continuous improvement, and a culture of respect, collaboration, and personal accountability. The AIR Edge manifests itself in our same-store portfolio as margin, which was 73.7% in the fourth quarter, 290 basis points better than the same period of 2020. Our unrelenting commitment to profitability is demonstrated by margins that have been sector leading for 18 consecutive quarters, and today is higher than all peers by at least 290 basis points, the equivalent of $15 million in incremental income created by the AIR Edge. The AIR Edge adds even more impact by making acquisitions highly accretive as we implement the AIR playbook and see rapid improvements in both revenue and expense. At City Center on Seventh in Pembroke Pines, Florida, we signed nearly 100 leases during the fourth quarter at an average increase of 34% from the prior lease. At our 4 acquisitions in Washington, D.C., fourth quarter new leases averaged an 18% increase from the prior lease. In both markets, rate growth and sales volume have exceeded our same-store performance, and financial results are at or above our expectations. We anticipate further upside as our industry-best playbook is fully implemented across every aspect of these communities. In January, there was a year-over-year acceleration in our same-store results and still higher growth in our acquisition portfolio. Occupancy during the month was 98.4%, an all-time high in a single month in our portfolio. Signed new lease rates increased 14.9% from the prior lease. Renewals increased 11.7%, leading to blended rate growth of 13.3%, all of which represents improvements from the fourth quarter as pricing continues to strengthen. Our loss to lease is currently in the low teens and we expect healthy rate increases going forward. In our acquisition portfolio, new lease rates at City Center were up 39% from the prior lease, 5% better than the fourth quarter. In our Washington, D.C., new leases were 26% above the prior lease, 8% better than the fourth quarter. In all, we anticipate 2022 will be an exceptional year with strong demand across all markets and excellent pricing power. We expect 8.9%-9.9% year-over-year growth in AIR same-store revenue, with most of the increase due to occupancy growth that has already occurred, rates that are earning in from 2021 activity, and our current loss to lease for 2022 expirations. We expect 2%-3% growth in expenses, including flat controllable operating expenses and resulting net operating income growth of 11%-13%. We anticipate all markets will have robust growth this year with double-digit revenue growth in Miami, San Diego, and Philadelphia, high single-digit growth in Los Angeles, Boston, Denver, and Washington, D.C., and mid-single digit revenue growth in the Bay Area. That said, we expect our acquisition portfolio to outperform and over the course of 2022 have revenue growth two-thirds faster than the same store portfolio. My thanks to all AIR team members. Your dedication to serving our residents and your drive to continuously improve our business has made this quarter a great success. You are truly the AIR Edge, and I look forward to building upon our wins together during 2022. With that, I'll now turn the call over to John McGrath, the new Chairman of our Investment Committee. John. Thank you, Keith. We had a very busy few months on the transactions front. We set a lofty but achievable target of $1.7 billion of sales proceeds to be used for deleveraging, funding acquisitions, and strengthening liquidity. I'm delighted to report that as of today, we've successfully completed $1.4 billion of that goal and expect to achieve our full target by the end of the first quarter. During the fourth quarter, we sold 15 apartment communities located in New York City and Washington, D.C., with approximately 1,340 apartment homes for gross proceeds of $472 million. As previously reported, we entered into a joint venture with an affiliate of Blackstone to sell an 80% interest in three properties with approximately 1,750 units located in Virginia for about $410 million. In January, we closed the sales of seven apartment communities located in San Diego, Los Angeles County, and the Bay Area for approximately $510 million, and we have another $267 million under contract. We made significant progress in support of our goal of continuously improving the quality of our portfolio. Quality has many aspects. In our markets, we look to expected growth in local economies and predictable laws and regulations. In our portfolio, we look to diversification across markets and price points. In our rents, we compare our rents to local market averages. In our operations, we look for higher growth rates, especially when we first add a property to the AIR platform. Completion of our sales will increase our relative allocation of capital to higher growth markets, improving the average annual expected growth rate of the portfolio by 12 basis points, and increasing our portfolio average rents by $150 to 116% of local market averages, an increase of 800 basis points. Importantly, we will have raised equity capital at a current free cash flow cost of 4%, a current NOI cost of 4.3%, and a long-term expected IRR cost of 6.4%. Turning to acquisitions. As discussed during our last call, in the fourth quarter, we acquired a portfolio of four properties located in the Washington, D.C. MSA, with 1,400 apartment homes and 84,000 sq ft of office and commercial space for a purchase price of $510 million. The acquisition included two vacant land parcels, which were suitable for development of 498 additional apartment homes. AIR will not undertake the development of these parcels, but rather expects to sell or lease the land to a third-party developer. The paired trade is expected to result in greater growth in NOI and in FFO. We expect a 4.3% NOI yield in 2022, roughly break even in NOI with the property sold. This yield is expected to approach approximately 6% in the third year, a spread of 1.3% to what we expect from the property sold, adding $0.04 to FFO per share. This spread increases over time as the long-term IRR is expected to be 9%, a 40% increase over the long-term IRR of holding the property sold. In short, the acquisition is an example of what we like, using the AIR Edge to increase FFO per share with limited business risk and no increase in financial leverage. Turning to 2022. Our guidance includes $500 million of accretive acquisitions, reflecting the fact that three transactions totaling that amount are already under some form of agreement. We are firmly committed to disciplined capital allocation, and we have no fixed goal for further acquisitions. We will invest in top-rated submarkets, maintain broad portfolio diversification, and invest only where we can earn attractive spreads to our cost of capital. We plan to grow, but we will not do so by increasing leverage outside our target range or by funding transactions through dilutive equity issuance. Given elevated prices for multi-family properties, we are cautious about acquisitions at market prices, and so we look for non-market advantages, such as opportunities for Keith's team to create considerable value. We expect our future portfolio growth will be opportunistic. We are looking primarily in our existing markets, and especially in the Mountain West and in the Southeast, from Florida to Virginia. With that, I'll turn the call over to Paul Beldin, our Chief Financial Officer. Paul? Thanks, John. Today, I will discuss our delevered balance sheet, 2021 Financial Results, expectations for 2022, and our dividend. Starting with the balance sheet. As John mentioned in his remarks, we have closed $1.4 billion of $1.7 billion of planned property sales. The remaining sales are expected to close later this quarter. Net proceeds were used to fund $430 million of equity to complete 2021 pair trades and repay $800 million of property debt, a weighted average interest rate of 3.7%. The completed sales bring pro forma year-end net leverage EBITDA to 5.8 to 1. The remaining property sales will bring our pro forma net leverage EBITDA to 5.3 to 1, two-tenths of a turn lower than our target. The weighted average term was 6.5 years at a weighted average interest rate of 2.6% before consideration of the AIV note and 2% net of it. Our deleveraging and refinancing activities will have lowered year-over-year interest expense by $46 million, reduced debt service requirements by $91 million, and created additional financial flexibility by increasing our pool of properties unencumbered by debt to $8.4 billion, or approximately two-thirds of our portfolio. The result is a low-levered, high quality, and a flexible balance sheet. Improved credit metrics make an investment-grade rating from Moody's more likely and strengthen our investment-grade BBB flat rating from S&P. As John mentioned, we are considering three transactions totaling about $500 million. If we go forward with these investments, we anticipate funding them with low-cost borrowings while maintaining year-end leverage at approximately 5.5x EBITDA. Turning to 2021 financial results. Full-year same-store NOI growth was up 1.6%, 510 basis points ahead of our beginning-of-year expectations, and 560 basis points ahead of the coastal peer average. The AIR Edge made it possible for AIR to be the only coastal multifamily REIT to deliver positive 2021 NOI growth. The same AIR Edge that led to same-store NOI growth above our initial guidance reduced full-year FFO 8% or 16 cents per share ahead of the midpoint of guidance provided one year ago. Next, 2022 full-year guidance. In 2022, we forecast FFO to be between $2.36 and $2.44 per share, representing 12% growth at the midpoint. We expect our earnings growth to be the result of a $0.29 addition from 12% same-store NOI growth, partially offset by a $0.03 subtraction from the combination of NOI loss due to property sales, lower interest expense, incremental contribution from our 2021 acquisitions and those planned for 2022, and miscellaneous other items, primarily lower interest income due to the maturity of the basis points from old Aimco securitized debt. Last, a few quick comments on our dividend. As planned, AIR's refreshed tax basis resulted in a taxpayer-friendly dividend. In 2021, AIR's dividend of $1.74 per share was taxable one-third as capital gains and two-thirds as a tax-free return of capital. For those investors who are tax sensitive, each dollar of the AIR dividend is worth 28% more after tax than was the peer average. In setting AIR's 2022 dividend, our board of directors targeted a dividend payout ratio of approximately 75% of full-year FFO. For the first quarter, the board declared a quarterly cash dividend of $0.45 per share, an increase of 5% from the dividend paid in the first quarter of 2021. With that, we will now open the call for questions. Please limit your questions to two at a time in the queue. Charlie, I'll turn over to you for the first question. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad now. When preparing to ask your question, we ask that you please pick up your headset to allow for optimal sound quality. Please also ensure you are unmuted locally. Our first question comes from Nick Joseph of Citigroup. Your line is open. Please go ahead. Hey, it's Michael Bilerman here with Nick. Terry, good morning there. Terry, the first topic was just on the comp that you forfeited, the $2.5 million. Was there any agreement? Did you receive anything for giving that up in terms of a stock grant or signing a new employment agreement? Or was it really just accepting $2.5 million less on your $7 million comp and allocating that to the rest of your management team? Michael, good morning. That's a lot of questions. It was a $2.5 million cost. It wasn't about me, it's about the company. The company was committed to being the most effective and efficient way to own multifamily properties with public market liquidity. We want it to be shareholder friendly. While the cost was high, the decision was easy. There wasn't anything that you received in return for forfeiting that comp, correct? Absolutely, absolutely not. There's no quid pro quo, no adjustment, no makeup, no nothing of that sort whatsoever. Looking to the future, you know, with this commitment to maintain this 15 basis points, I know the language in the supplemental said subordination, but I don't think it's gonna be a subordinated loan. To get there, you're gonna forfeit as much as your comp to get to that 15 basis points. I guess what happens if, you know, we have high wage inflation and G&A is rising to keep good team members and it exceeds your $7 million of comp, then what happens? Who sets the GAV to know what the 15 basis points is based on? What disincentives do you have not to simply grow the entity and grow G&A, even though it's capped at that 15 basis points? I would assume at some point there's some efficiency in terms of an organization, that's growing, especially in its target markets where you own assets. Well, there are multiple questions in there, Michael. Let me take them as best I heard them. The first is we don't expect that. I certainly don't expect it to be a continuing issue because of the increasing value of the business. It's easy to have a hypothetical, but for the moment, I don't expect it going forward. Secondly, in the event of some hypothetical circumstance, obviously, the board is free to make the right decisions for the best interest of the company. I just want to be crystal clear that we're committed to being a low-cost efficient operator, and that if that costs me my comp, it costs me my comp. That's partly because I put the company first, and I've got you know, three or four million shares that are more important to me than short-term comp. Okay. Just then who sets the value that you're basing 15 basis points on? Is that- Oh, yes. yes. I'm sorry. Gonna be an outside third party? Is that management or? Yeah. Well, it is management, but we measure it against Green Street's numbers, and so you can easily track it. There's some things that we will know in advance of Green Street, for example, a sale or such, but we can provide a walk from the Green Street numbers so that you can see exactly what it is. It's not a contrived number in any respect. In fact, by some measures, we've been more inclusive of costs as G&A than Green Street has been by going through and looking at other in order to make sure that it was picked up, and also so that there's no benefit to geography by assigning cost to property management. It's something I'd be delighted to walk through with you, but I thought it would be not at all in the Aimco or rather in the AIR way for us to make a commitment that was filled with lots of ways around it. We wouldn't do that. Well, thanks for your time. I do the same thing, Terry. I still refer to you as Aimco. It's hard to change. All right. Old habits, but, you know, stay with us. Thank you for those questions. It's not a sensitive subject. It's one that is an important way to lead by example to show the commitment of the company to being aligned with shareholder interests. I'm glad to get that up. Yeah. It's something that's new. It obviously doesn't exist elsewhere. We just wanted to make sure that we understood the mechanisms and how it's going to work to ensure that it doesn't have unintended consequences, even though it's coming from the right place. Yeah. Thank you. We have a very energetic board. If it turns out that there are such, we'll address that. Thank you so much. Our next question comes from Rich Anderson of SMBC. Your line is open. Please go ahead. Thanks. Good morning out there. First of all, calling the dividend tax-free on the return of capital side isn't exactly correct, right? I mean, you defer your taxes until the time when you sell your shares, right? I mean, it's tax deferred, not tax-free. Fair? It depends a little bit on other circumstances like when you die. All right. It's an advantage. Okay. I just don't want you to get into that too long. Terry, you mentioned more partnerships in 2022. You know, we know that the tagline or most important tagline here is simplicity of the portfolio and so on. To what degree are you willing to have partnerships be a part of the portfolio as a percentage of the total, with an eye toward, you know, again, maintaining this simplicity model in the multifamily space? Rich, that's an excellent question and one that we have to be mindful of going forward. I think that we can have more partnerships than we have today, and that they contribute to simplicity, if you will, by being a very simple demonstration of our net asset value per share. That confirmation is a plus for transparency. Obviously, there's some level where it might be a negative that has to be weighed. For the moment, we're comfortable with adding more. Okay. My second question, perhaps to Keith or whomever. You know, we just got kind of through this latest wave of Omicron, thankfully seeing it subside. From the standpoint of how your business runs, is there Is Omicron your friend in a way, in the sense that it keeps turnover low, people may be less willing to move? Can we actually see if we get all clear on the pandemic that you know, turnover becomes more of an issue, you know, going forward and you know, just all the moving parts that come from it? Rich, you know, thanks for the question. I don't know if I can be a predictor of those things. Here's what I would tell you. What I think made us stand out in a unique place here is that we've been open for business every day. Regardless of what has happened with the pandemic, we have found a way to be safe and open in engaging our customers. We think that our customers have actually experienced an improved customer relations and an environment of community because we wanted to make sure that during a time of stress and uncertainty, that they could be certain to count on us. As we look forward, they can continue to have the same expectation of us. Do you see turnover going up over the course of the year? I guess that's the question. Well, you know, as I pointed out in my prepared remarks, we had one of our lowest turnovers at 39.7%. I'd like to attribute a lot of that that goes to our exceptional team that is focused on customer satisfaction, that creates a sense of community, and that the resident quality of our residents through credits and incomes are positioned in a way that some of these other stresses that have hurt others that we've had very stable communities and individuals. My goal and hope is that we will continue to maintain sector-leading low turnover and that, but, you know, of course, we'll see if that changes as things develop in the world of Omicron. Rich, if I could add and endorse everything Keith has just said. We will have an increase in turnover in the leasing season when we have frictional vacancy. All of our numbers are a trailing twelve months to take seasonality off the table, so that you can look at it. What you'll see is a long-term trend where Keith and his colleagues have produced greater retention and lower turnover than anyone else in the business. They've gotten better each and every year, both before COVID and during COVID, and we'll see how far they can continue that. Okay. Sounds good. Thanks. Thank you. The next question comes from John Pawlowski of Green Street. Your line is open. Please go ahead. Thanks for the time. Paul or Keith, I'd like to better understand the $100 million in capital enhancement plan, and what kind of specific projects that entails. The portfolio's gotten younger over the years, and it's gotten smaller, but the total CapEx dollars are very similar to what we saw pre-spin. A little bit more color there would be helpful. Yeah, John, thank you for the question. I'll start and turn over to Keith if there's anything that he'd like to add. As you correctly point out, we do anticipate about $100 million of capital enhancement spending next year. The vast majority of that, about 75%, is expected to be spent on projects that enhance the interiors of the apartment homes. Most largely concentrated in kitchen and bath type improvements. These are the type of projects that we've been doing for a number of years, and we generally achieve yields that are in the high single digits and IRRs in the high single or low double digits. These are very accretive investments to make for the benefit of our expected future earnings and the value of our properties. They're very well received by the residents as well. We think we have a large opportunity in a strong market to increase our spending in this area year over year. Keith? I think you've covered it well, Paul. on a total kind of per home basis, I mean, I think we're gonna be running over $4,500 per unit. Is that a kinda reasonable structural level? Yeah. in the next three to five years to expect? You know, John, as we undertake our planning exercise each year, both for the upcoming year and in future years, it's all very largely dependent upon actual returns achieved. To be clear, if we start these projects and we're not achieving the underwritten returns, we'll pare back or stop some at certain projects. If we're blowing our underwritten returns out of the water, we might double it. It's all driven by returns. Okay. Thanks. Maybe one last one from me. Keith, could you give us a sense for, or could you let us know what you're standing renewal offers out today at? What% increase? John, what I would tell you to think about is to see what we're similarly getting in results now, which is in that 10%-12% range. We would expect that will be likely through the balance of the first quarter into the early spring. Okay. Thanks very much. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad now. Our next question comes from Chandni Luthra of Goldman Sachs. Your line is open. Please go ahead. Hi. Thank you for taking my question. Could you guys remind us where you are with your relationship with Aimco? I mean, I think last time you said that basically two of those properties out of those four are in, you know, the stabilization process. How can that relationship evolve from here? How should we think about that, you know, $25 million interest income this year and then next year? Well, Chandni, this is Terry. Thank you very much for your question. The relationship is excellent. We have multiple overlaps, but they're being reduced in a steady way. The one which you mentioned about the debt obligation from Aimco to AIR has another two years to it. I'm sure that the loan will be paid in full, it's well collateralized at its maturity. Got it. Then, you know, in terms of sort of your loss to lease, I think you mentioned it's in low teens. How much do you expect to capture in 2022? How should we think about 2023? You know, that's something that a lot of your peers have mentioned. I was wondering if you could perhaps throw some light on 2023 as well. Chandni, the way to think about the loss to lease is it's in the low teens. Of course, it's really what drives it into 2023 is when those transactions are occurring. For us, we have the majority of our business that happens between June and September. As you think about those transactions occurring, you'll start getting that earn-in that will give us, call it, the last half to the last third of earn-in through 2022, and then the balance will find its way into 2023. Chandni, what I would add to that is if you look back at the last- Thank you so much. Thank you. so much. Thank you. Chandni, if you look back over the last number of years, you will see the relative performance and operations of Keith and his team versus our peers. You'll see that outperformance until we got to COVID, the coastal outperformance for the two years. Keith, again, being significantly ahead of the coastal peers, and in this time in guidance, narrowing the gap and perhaps passing it going forward. You just have to look at over a timeframe and know that when you bet on Keith, you're likely to win. Thank you so much. This is Chandni, by the way. Thank you. The next question comes from John Kim of BMO Capital Markets. Your line is open. Please go ahead. Thank you. Good morning. I was wondering if you could provide much more clarity on the occupancy that you had at 98.4%, higher than your peers. I think you talked about turnover increasing due to seasonality, but what about some of these other factors that contributed to the record high occupancy, and how do you see that trending for the remainder of the year? John, thanks for the question. It really comes down to, you know, our relentless focus on the bottom line. I think a lot of times, there's a question about whether rental rates come in and how occupancy plays in. We focus on retaining customers in which reduce costs, reduce turn times, reduce vacancy loss. As you look at what's happened, we think this is the sort of accumulation of all those things coming together at one time. As we look forward into the balance of the first quarter, we think we will see similar high occupancies. Of course, when we get into peak season, frictional vacancy will play in, and we will see that it will drop some, but then rebound as we get into the balance of 2022. with your loss to lease increasing since November, is it fair to say that you've been more focused on occupancy and maybe leaving some upside in rents, for future periods? Yeah. John, thanks for the question. You know, I'd say actually the opposite. Actually, on page 5 of the earnings release, there's an emphasis on transacted leases versus signed leases. What you'll note in our signed leases, which are a forward indicator of how we are growing rates, you will see not only do the new leases in the fourth quarter go from 11% to 11.7% in January, the renewals go from 13.5 to 14.9, and the blend goes from 12.8 to 13.3. Not only did we increase occupancy, but you'll note here, as you look forward, we were actually raising rents in all three categories. In fact, we've raised them even further in January. Okay. Keith, you mentioned that your acquisition portfolio is set to outperform your same-store portfolio by two-thirds, which would imply 14% same-store revenue. Most of these assets are not in the highest growth markets, being D.C. MSA. Can you just elaborate on how you're achieving that higher growth? Well, John, thanks for the question. You know, I've coined it in this particular script here, Edge, but it's really about our team members seeing and identifying opportunities to operate better than others. We see that not only have we been able to push the rents, but we've been able to move quickly and nimbly to improve the communities and the resident experience, in a way that not only is retaining more residents, there's less move-outs that are occurring, that ultimately find its way into pricing power and stronger occupancy. As we look at those, you're right, some of those markets may not be the highest growth markets, but we're achieving some of the highest growth that might be as compared to others. Just to confirm, does this include any revenue-enhancing CapEx to achieve that same store revenue or not? Hey, John, this is Paul. As part of our planned acquisitions in both the Pembroke Pines, Florida and the Washington, D.C. area, we did underwrite some revenue-enhancing capital expenditures. Those expectations and actual costs are all flowing through our yield numbers that we're quoting. The short answer is yes, but it's fully accounted for. It's fully accounted for, but it's not material to the outperformance. Yeah. I don't wanna leave you with a confusion about that, John. The primary difference are gonna be in occupancy, rental rate operating costs at which Keith has excelled for a decade and more. There is an additional benefit to revenue-enhancing capital enhancements. In terms of these transactions, it's probably measured in what are mon- The total capital enhancements are about $30 million on a total investment of $750 million. Yeah. There you go, $30 million on $750. It helps, but it's not the important part. Great. Thank you. You're welcome. The last question is a follow-up question from Nick Joseph at Citigroup. Your line is open. Please go ahead. Hey, it's Michael Bilerman again. I just wanted to come back to the margins and, you know, I respect how hard Keith and the team and you guys have worked to improve margin over time. You know, I would say that all the publicly traded landlords are pretty efficient. There's a lot of different definitions. Even in your own supplemental, you can look at the consolidated income statement, which obviously is before the utility reimbursements, and you get to a 63.8% margin. Where you look at Schedule 2A, where you net it out, that obviously is enhancing the margin to 71.5%. You know, our sense is on GAAP, which is what all the apartment REITs report, the margin is really not that different. How do you look at that? I guess, are you willing to provide more details around the revenue and expense line items so that there's no ambiguity in relation to the calculation relative to your peers? I don't know that there's any ambiguity, Michael, but if you have specific questions, we'll answer them specifically in writing for everyone to see. If I might add, our margin amounts that we quote every quarter are disclosed in detail on supplemental schedule six, so you can recompute the math there. The difference between the GAAP number that you're quoting and schedule 6 is the inclusion of property management expenses. Right. Utility reimbursements is a major driver of the higher margin. At least getting all the details. Michael, that's in our margin. in specifics. Yeah. No, I know it has been, but that's not comparable to the peers. When you quote it's not apples to apples. Yes. Help me understand your question because we have utility expenses that are in our margin, and we have reimbursement from customers that are in our margin. Correct. When you look at the face of income statement, right, which is GAAP, those are grossed up, right? They're included all in the revenues, and it's grossed up in the expenses, so that when you take NOI over a larger revenue number, it comes to a lower margin. You then net those out, but not all the details are provided in Schedule 2A, and we don't have all the details on the property and maintenance and real estate taxes and insurance and all the property management to sort of build back up, and then getting the specific gross and net numbers both on the same store as well as an operating portfolio to be able to reconcile your numbers relative to your peers. You speak to your peers, they will say that their margins are not that far below yours. They actually will say it's above. I'm just trying to point it out and whether, you know, you've done more analysis around it to tease out the components both on a GAAP, cash, gross and same store basis. We believe we've communicated that in the schedule, but if you have a specific question or exception to that, we're glad to address that. I've not yet otherwise heard a question as to the accuracy or as to the reliance. Let me deal with it in specifics, and we'll get it back to you and to others. Okay, thanks. We have a question from Haendel St. Juste of Mizuho. Your line is open. Please go ahead. Hey, thank you for keeping it going. Terry, I guess I had a question. Just going back to some of the portfolio activity here, the net selling out of California. Just remind us kind of where you are and your thoughts on your California exposure here. Is this gonna be the end of the near term culling in terms of reducing your exposure there? You've outlined some Mountain West and Sun Belt markets you're looking at. Are you entering potentially new markets? And if so, would you be looking to enter in some form of bulk? Thanks. Haendel, that is a compound question. It's gonna need multiple answers, but it's good to hear your voice, my friend. California will probably decline as a percent of the total, primarily by growing portfolio. There may or may not be an individual trade, but we don't have a specific goal to substantially lower California from where it is today. But if we have the right pricing, we might. But more likely over time, we will increase our investment outside of California, and we'll do that in markets in which we are in today, which outside of California include Denver, Boston, Philadelphia, Washington, and Miami. We're in areas beyond those. We're of course interested in Florida and really in the Southeast generally to include Georgia, Tennessee, and the Carolinas. I think that's helpful, and certainly imagine that the parameters of looking for better long-term IRRs apply here. We'll follow up with that question. Maybe, Keith, for you, just a little bit of follow-up on the new versus renewals. I have seen that spread widen out here the last few months as renewal rate has slowed. I guess I'm curious on what your prognosis is on that spread over the next couple quarters or maybe for the year, what's embedded in the guide for this year on new versus renewal. Thank you. Haendel, thanks for the question. The way we think about it is that it's sort of the blend. Will there be some more spread on new in Miami compared to renewals? That may be because rents are accelerating at a much different pace. When we look at it'll be a market by market. When we look at it at the end, we think it's gonna be in the low teens that we'll see as we go through the balance. That really comes into where we see our loss to lease and the ability to earn it in throughout peak season. Got it. One more on the sequential uptick in bad debt, maybe some color there. Did you quantify what level of rent-assisted payment do you have in the guide for this year? Yeah, Haendel St. Juste, there's kind of inherent within your question is the fact there's some volatility from quarter to quarter in bad debt, primarily driven by timing of rental assistance payments received from state agencies. During the fourth quarter, we received, I believe, about $3.7 million during the quarter. For next year, we do have an assumption of receiving about $3 million for the full year, we'll see where that lands. There's always some variability in that amount because it's highly dependent upon payment by individuals. I'd be much happier to see that amount be coming lower next year than higher. Yeah. What I would add to Paul's is that this is a very localized circumstance. We have very high credit standards, and we have very high payment and very low bad debt for the vast majority of the portfolio. It's primarily a Los Angeles issue, where by municipal ordinance, they've said that people don't have to pay rent, even if they're not unaffected. They create an offset from the state, and that creates the volatility that Paul was describing. I think as people are moving away from the reactions to the pandemic, the ordinances will be corrected, and we'll be back to our normal course. Great. Well, that's all for me. Thank you, guys. Appreciate it. There are no further questions on the lines at this time. Well, Charlie, I wanna thank you for your help. I wanna thank all of you on the call for your questions. If you have further questions, please feel free to call me or Paul Beldin or Matthew O'Grady. Just look forward to being together at Citi with many of you. Be well. Thanks. This concludes today's call. Thank you for joining. You may now disconnect your lines.