Good morning, ladies and gentlemen, and welcome to AvalonBay Communities' Q3 2021 earnings conference call. At this time, all participants are in a listen-only mode. Following remarks by the company, we will conduct a question-and-answer session. You may enter the question-and-answer queue at any time during this call by pressing star one. If your question has been answered or you wish to remove yourself from the queue, press star two. If you are using a speakerphone, please lift the handset before asking your question. We ask that you refrain from typing and have your cell phones turned off during the question-and-answer session. Your host for today's conference call is Mr. Jason Reilley, Vice President of Investor Relations. Mr. Reilley, you may begin your conference. Thank you, Kathy, and welcome to AvalonBay Communities' Q3 2021 earnings conference call. Before we begin, please note that forward-looking statements may be made during this discussion. There are a variety of risks and uncertainties associated with forward-looking statements, and actual results may differ materially. There is a discussion of these risks and uncertainties in yesterday afternoon's press release, as well as in the company's Form 10-K and Form 10-Q filed with the SEC. As usual, this press release does include an attachment with definitions and reconciliations of non-GAAP financial measures and other terms which may be used in today's discussion. The attachment is also available on our website at www.avalonbay.com/earnings. We encourage you to refer to this information during the review of our operating results and financial performance. With that, I will turn the call over to Tim Naughton, Chairman and CEO of AvalonBay Communities, for his remarks. Tim. Yeah. Thanks, Jason, and welcome Ben Schall, Kevin O'Shea, Matt Birenbaum, and Sean Breslin. For our prepared comments today, Ben will provide a summary of Q3 results, an update on Q4, and full year guidance, and provide some thoughts on why we believe AVB is well positioned to outperform. Sean will then elaborate on operating trends in the portfolio, where we continue to see strong momentum and healthy fundamentals that should support robust growth as we move into 2022. Ben will conclude with an overview of development activity, where development economics remain compelling, and then offer a brief look at our new expansion markets, including our rationale behind our decision to enter them earlier this year. We'll all be available for Q&A after prepared remarks. Before turning the call over to Ben, I did wanna take a minute to acknowledge that I expect that this will be my last earnings call, as I plan to step down at year-end as CEO when I'll assume the role of Executive Chairman, as we had previously announced last December. I spent the last 32 years at AvalonBay and its predecessors. Over the last 20-plus years or so, I've had the opportunity to interact with many of you on this call on a regular basis. I just wanna say that I appreciate your support for and engagement with the company and me over that time. For the investors on the call, I simply wanna thank you for entrusting us as a steward of your capital over the years. It's something we've never taken for granted. I know that will continue to be the case in the future under the leadership of Ben and this executive team. I look forward to being able to touch base with many of you more directly and hopefully in a little more personal way over the next couple of months. With that, I'd like to turn the call over and place in the very capable hands of Ben Schall and the rest of the exec team here today. Ben. Thank you, Tim. We wanted to start the call today as a team and an organization by expressing our gratitude and acknowledging Tim for his contributions to the company and the industry over the last 32 years. AvalonBay would not be the company it is today without Tim's strategic leadership, which is deeply intertwined with the company's history and evolution into one of the preeminent real estate companies in the U.S., its exceptional track record of value creation, and its inclusive culture focused on continuous improvement. In addition to overseeing AvalonBay's tremendous growth and positioning us as an industry leader, Tim has also had a major influence on the evolution of the multifamily industry and the broader REIT sector during his career. Throughout all of these accomplishments and successes, in what is one of Tim's most admirable attributes as a leader and a person, Tim never made it about him. His focus has always been on others, the positive impact he could have on people, the impact that AvalonBay could have in our communities, and how he could lead by fostering and reinforcing our evergreen culture and strong organizational values. On behalf of all of those that have been part of AvalonBay and all of us at the company today, thank you, Tim. Thank you, Ben. As the next section and before turning to the presentation, we wanted to emphasize upfront a number of factors that we believe position AvalonBay for outsized performance over the coming quarters and as we look toward 2022. Our operating fundamentals continue to show very strong momentum, with rents now above pre-COVID levels in 5 of our 6 large coastal regions, with the strongest performance in our suburban communities, which comprise over two-thirds of the portfolio. Our resident base, with concentrations employed in knowledge-based industries, are in high demand in today's labor market, setting the table for future rent growth as wages continue to rise. For the segment of our resident base who would typically be seeking to purchase a home after a period of time with us, this alternative is challenging given the general lack of availability, further supporting our retention rates and demand fundamentals. We also expect our portfolio and market allocation to generate strong growth over the coming quarters. Looking back over the last 18 months, while we've experienced an unprecedented trough and then an equally unprecedented recovery, our rents today are only 7% above October 2019 levels, equating roughly to 3.5% growth per year. With an economy in growth mode, limited availability, low turnover, significant loss to lease, and with a third of our portfolio in urban areas that are recovering but still held back by the pandemic, we expect strong operating tailwinds as we head into 2022. Our execution on our operating model initiatives also continue to pay dividends with our investments in technology and innovation, offering enhanced value to prospects and residents while also allowing us to improve operating efficiencies. Through these initiatives, we expect to improve margin roughly 200 basis points, with $10 million of this improvement already captured and with an additional $25 -35 million to be captured over the next couple of years. Finally, we're also creating outsized value creation and earnings growth from our development platform, with returns trending above pro forma, leading us to ramp development activity with very attractive spreads between our development yields and market cap rates. We are definitely in growth mode, which is further supported by our access to a historically low cost of capital given the strength of the capital and transaction markets. All of which sets up for a strong end of this year and meaningful growth in 2022. Turning to the presentation and starting on slide four, the rapid pace of recovery continued in the Q3, with core FFO coming in at $0.10 above the midpoint of our prior Q3 guidance and flat on a year-over-year basis. The outperformance relative to guidance was driven primarily by same-store revenue, which produced a 4% sequential increase in revenue on a cash basis. Our growth orientation is reflected in a ramp in development starts, with just under $1 billion of starts through the end of Q3. We've also completed $1.1 billion of projects so far this year at an attractive yield of 5.9%. In addition to development, we are growing through acquisitions, and Q3 marked our first acquisitions in our new expansion markets of Texas and North Carolina, totaling $275 million. Subsequent to quarter end, we closed on an additional acquisition in Fort Lauderdale, Florida, for $150 million. Funding our growth with low-cost capital, primarily from asset sales and incremental debt proceeds, including a recent $700 million 10-year unsecured bond at a fixed rate of 2.05%, the lowest coupon and lowest spread in AvalonBay history, and also our first green bond. Turning to slide five, and given these strong operating trends, we have raised our guidance for Q4 and for the full year 2021. Q4 FFO guidance has been raised to a range of $2.19-2.29 per share, an $0.11 increase over our previous Q4 guidance at the midpoint. This improved outlook is driven by our improved revenue expectations, with residential revenue now projected to increase in Q4 by 5% on a year-over-year basis. In addition to occupancy and rate trends, the same-store revenue outlook assumes approximately $12 million of additional rent relief payments in Q4, relatively consistent with what we received during Q3. Other activity incorporated into our updated Q4 guidance includes $250 million-$300 million of dispositions from our northeastern markets at an expected cap rate of sub-3.5%, and $300 -350 million of acquisitions in our expansion markets, one of which is the Fort Lauderdale community and with the others under agreement. Slide six shows the components of rental revenue change on a year-over-year basis. Residential revenue growth being driven primarily by higher occupancy and rent relief recognized during Q3, leading to a 1% increase on a GAAP basis and a 4.3% increase on a cash basis. On a sequential basis, as shown on slide seven, the rental revenue increase was driven by our momentum on lease rates as well as the recognition of rent relief payments, leading to a residential rental revenue increase of 3.3% on a GAAP basis and 4% on a cash basis. With that positive backdrop, I'll turn it to Sean to discuss our operating performance more fully. All right. Thanks, Ben. I thought I'd share a few slides on the portfolio rent trends for the quarter and into October, both at the same-store level and across different markets and submarkets. Overall, we have continued to experience a significant rebound in the business. If you look at slide eight, like-term effective rent change turned positive in June, has accelerated materially over the last few months, and is now running at roughly 11%. If you turn to slide nine, you can see what's supporting the improvement in our rent change, which is the growth we've experienced in average move-in rent value. Our average move-in value has grown by roughly 24% since the beginning of the year, including a 9% increase since the end of Q2, and is now about 7% above the level we achieved in the fall of 2019. Moving to slide 10, improved performance has been broad-based, with every region experiencing an increase in average move-in rent over the past quarter. As noted in the charts, the recent flattening of move-in values reflects a normal seasonal pattern, although the seasonal adjustment has only been about one-third the amount we typically see moving from the summer into the fall. Rents are now equal to or greater than 2019 levels in every region except Northern California, which has seen roughly 20% growth in move-in rents this year, but still remains roughly 7% below the level we achieved in 2019. The timeline for a full recovery in Northern California has been delayed in large part by major tech employers extending their return to office dates into early 2022. At the other end of the spectrum, the Southern California region has experienced strong growth in move-in values, supported by very healthy job growth, including significant growth in the content producing segment of the media industry, limited supply, and a very tight for sale market. Turning to slide 11 to address suburban and urban performance trends. The average October move-in rent for our suburban portfolio was roughly 12% above the rent we achieved in October 2019. In our urban portfolio, while demand has returned in a meaningful way and rents have recovered significantly, move-in rents are still slightly below what we achieved in October 2019. To provide a few examples, in Boston and New York City, urban move-in rents are now 1% above what we achieved in 2019. The District of Columbia and San Francisco are lagging with move-in rents that are 3% and 13% respectively below what we achieved in 2019. Given the continuing adoption of vaccine requirements and steady climb in vaccination rates, we expect urban office occupancy rates will continue to rise as we move into 2022, which is one of the opportunities we expect to benefit from next year. In fact, moving to slide 12, the macro environment should support healthy fundamentals in our markets over the next several quarters. Starting at the top left of slide 12, while the labor market continues to improve, we're still almost 5 million jobs short of where we started. The demand for labor continues to be robust, which is putting material upward pressure on wages, a key driver of rent growth. Chart one shows job wage and total personal income growth for the professional services sector of the economy, which is where most of our residents are employed. As noted in the chart, we've only experienced positive year-over-year growth across all three categories since Q2 of this year. As many businesses are finding as they attempt to recruit and retain professional services employees, the market has only strengthened since Q2. In Chart two, office usage hit a trough in Q2 2020 at the onset of the pandemic. Since that time, while we've seen steady improvement, the gains have been modest. As we look forward into 2022, gains in office usage should support additional rent growth, particularly in our urban and job center suburban sub-markets. Touching on charts three and four regarding the housing market, price appreciation in the for sale single family market and relatively stable multi-family supply both support a healthy near-term outlook for rental rate growth. With that favorable macro outlook as context, turning to slide 13, we also see terrific tailwinds in our portfolio as we move into next year. Beginning in the upper left of the slide with chart number one, we're starting from a position of strength with turnover trending lower and strong stable occupancy, which brings with it unusually strong pricing power. Turnover has declined this year and was down about 1,000 basis points or 15% in Q3 relative to what we would experience in a more normal year like 2019. Occupancy has been running above 96% for several months now, a point at which we can continue to push rents. In chart two, given the very healthy rent change we've experienced the last few months, we'll be starting 2022 with built-in revenue growth of roughly 3%, the starting point that we didn't benefit from in any year during the last cycle. The strongest starting point in the last cycle was roughly 2.25% at the beginning of 2012. In addition to the baked in revenue growth in chart two, our loss to lease is currently running at roughly 14% and is depicted in chart three, providing plenty of opportunity to benefit from moving existing leases to market when they expire. Moving to the bottom of slide 13, there are three other somewhat unusual tailwinds that should also benefit revenue growth as we move into 2022. In chart four, the amortization of concessions associated with previously signed leases, which should burn off as you move through the next several quarters. In chart five, a reduction in bad debt, which won't revert quickly to the pre-pandemic average, but should begin to abate as eviction moratorium expire and our legal remedies become more widely available to us. Finally, in chart six, continuing receipts from the Emergency Rental Assistance Program. For our same-store portfolio, we have received $14 million from the program, with $11 million of it coming in the last quarter. Since less than one quarter of the roughly $47 billion authorized by the federal government have been distributed as of September 30, we expect to receive additional funds in Q4 this year and in 2022. With that summary, I'll turn it back to Ben to address development and our new expansion markets. Ben. Thanks, Sean. As shown on slide 14, these strong operating trends are also translating into outperformance for our 6 development projects currently in lease up, with lease rates up $180 per unit and with projected yields up 30 basis points to 6%, driving further value and earnings. Turning to slide 15, our total current development portfolio is poised to deliver meaningful incremental NOI and NAV growth over the coming quarters. Specifically, these projects are projected to generate $145 million of NOI upon stabilization, of which only $26 million is in place today on an annualized basis. These communities are slated to generate $1.2 billion of net value above our costs, or close to $9 per share of NAV and meaningful earnings growth. As further highlighted on slide 16, our industry leading development platform has created significant value throughout various cycles. With consistently strong spreads between development yields and market cap rates, which today sits at a spread of roughly 210 basis points. As we look forward over the coming years, our existing development rights pipeline totals $3 billion of potential projects, lining us up well for a strong pace of continued profitable development. Turning to slide 17, our four new expansion markets, in addition to our continued growth in Southeast Florida and Denver, provide us with meaningful additional growth opportunities as well as the ability to optimize our overall portfolio over time. This slide provides the high level framework we utilize to evaluate markets and that drive portfolio allocation decisions across our existing markets and our expansion markets. At the top of the list, our focus remains on being a best-in-class developer and operator in markets that over-index to knowledge-based employment, which we expect to experience outsized job and wage growth. We also continue to believe that markets with a high cost of home ownership create an attractive rent versus own backdrop for our product offering. While our expansion markets generally have lower home prices than our existing markets, the rise in home prices, particularly in certain submarkets in these areas, create similar positive dynamics for future rental growth. We remain closely attuned to the regulatory environment in each of our markets, with local land use restrictions creating certain favorable barriers to new supply in our existing markets, providing opportunities for our development teams to leverage our long-standing relationships to unlock development opportunities. These coastal markets have, however, seen an increase in landlord-tenant regulations, and our expansion into new markets is partially driven by our desire to diversify our regulatory exposure. The fourth factor highlighted here, public infrastructure and cultural amenities, is our proxy for the overall quality of life that large knowledge-based employers and our type of customers will continue to seek out. This thematic framework is in turn supported by our proprietary market research, which shapes our market and submarket capital allocation decisions as we drive long-term value. Slide 18 highlights the characteristics supporting growth in our recently announced expansion markets, and what we believe positions these markets well in the long term. As we enter these markets, our focus is on creating long-term value by exporting our development and operational acumen as well as our culture to an expanded set of opportunities. To wrap up, we believe that we are well positioned to outperform as we head into 2022. A favorable macro backdrop, including continued job and wage growth, declining affordability of for-sale housing, a fuller return to offices, particularly benefiting the third of our portfolio in urban environments, and a relatively stable supply forecast in overall AVB markets should provide a strong tailwind. Our embedded growth in loss to lease, along with the benefit of concessions and bad debt normalizing over time, should be key drivers of revenue next year. Our operating initiatives are on track to deliver significant margin expansion and serve as one of our drivers of earning growth over the coming 2-3 years. Our development platform is also poised to deliver meaningful value and earnings growth with a development rights pipeline of $3 billion and with development yields substantially above stabilized cap rates and our cost of capital. Finally, our expansion markets provide a broader set of opportunities to leverage our platform for growth. We're excited for the growth opportunities ahead of us, and with that, I'll turn it to the operator to open the line for questions. Thank you. As a reminder, if you would like to ask a question, please press star one. We will take our first question from Rich Hill with Morgan Stanley. Hey, guys. First of all, congrats on a really good quarter. It looks like you're showing some real inflection here. I want to maybe take a step back and think about 2022 and 2023, in the context of that loss to lease. Maybe you can help us frame, you know, can you get all of that loss to lease back in 2022, or is it some of it gonna move back into 2023? We've heard some differing commentary from some of your peers, so I'm wondering how you guys think about it. Hey, Rich, it's Sean. Yeah, good question, of course. Yeah, what I would say on the loss to lease is, in a normal year, so to speak, for the most part, what you can say is that there's probably getting anywhere between 15-20% of our portfolio that's somewhat constrained in capturing that loss to lease or the delta between the existing rents and the market rent based on the regulatory environment that's in place. The typical examples are the rent regs in New York, rent control in D.C., we have an asset in San Francisco, one in L.A., et cetera, et cetera. In the current environment, given the call it the COVID overlay, that total percentage of the portfolio that is somewhat encumbered, at least for the short run, is probably closer to about a third of the portfolio, where there are some rent caps in place in various other jurisdictions that limit the ability to capture that. The question is when some of those additional or incremental restrictions expire, which is TBD at this point in time. The one that's probably the most significant is the state of emergency cap in California, which is constraining probably for the most part renewals in places like San Diego and Orange County, for example, which have experienced pretty robust growth. The way I would think about it is you have the incremental piece that I talked about, so call it totally a third, that is probably constrained, at least in the near term. How that sort of burns off from a third back to 15%-20% during 2022 is a TBD. Just factoring in the distribution of lease expirations is the other factor that you have to consider as you kind of run through your model. Got it. I think I understand that, Matt. Maybe this is a question for Ben. I wanted to maybe understand a little bit better how you're considering development. In the past, development early in the cycle has been a big driver of your growth. How are you thinking about that this time? Is it any different than past cycles? Our approach is similar, Rich. You've seen that, you know, with our ramp of activity, you know, over the last six months. We definitely, you know, see it as a differentiator for us. Definitely see it as a driver of alpha. Matt can maybe talk some more about our pipeline of activity. You know, our track record and our development franchises in our existing markets, we have full confidence we'll be able to continue to unlock value. Now we have the expanded set of opportunities in the growth markets that, you know, widen our total opportunity set. Dan, maybe you can help- Matt, do you wanna talk some more on a development pipeline? Oh, sure. Yeah, just to give a little more color on the development pipeline. We, you know, we've started close to $1 billion so far this year. We are on track to start probably another $350 million here in the Q4. When you kind of look at the breakdown of the most recent starts this year, it's a nice mix geographically. It's about three quarters suburban, one quarter urban, and maybe 25% of our starts this year are actually in our expansion markets in Florida and Denver. Then maybe a little less than a third in the Northeast and the rest almost half on the West Coast. As we look out to next year, you know, we'd like to be able to start somewhere in the same range, in that $1 -1.5 billion range, depending on how things shape up. As Ben mentioned in his remarks, we have a $3 billion development rights pipeline, and there's a lot working its way through the system now. You know, we really started putting our foot back on the gas for new business development, a quarter or two ago. We've got probably over $1 billion worth of new development rights in addition to that $3 billion that's working its way through the system now. We will start some in this Q4, but I'm hoping that at the end of the year, the development rights pipeline will actually grow to somewhere, you know, at or north of $3.5 billion. We have a lot of opportunity in front of us. Thanks, guys. I'll jump back in the queue. We'll take our next question from Nick Joseph with Citi. Thanks. First of all, congratulations, Tim. Maybe just following up on development. You know, curious what sort of inflationary pressures you're seeing. I guess obviously it's coming through on the rent side, but also I would imagine on the construction side for the new starts, how you think about looking at those yields versus cost. Hey, Nick, it's Matt. There's definitely inflation, and like you said, it helps on the rent side and it hurts on the cost side. What we've seen is the deals that we are starting this year, the total development cost is probably 10 to maybe even as much in some cases, 15% higher than where it would've been a couple years ago. You know, if NOIs are trending up, you know, you do get some leverage on that. Then the third part of the equation is asset values, which of course have been trending up, more than the 10 or 15% costs have been going up. You know, when you combine the higher NOI with the lower cap rates, the value creation and the spread is probably wider than it was before. The yields, you know, probably pre-COVID, our development rights pipeline yields were maybe in the low 6s, now they're in the high 5s. If you look at the stuff we're starting this year, it's performing to around a 5.7-5.8%, and that's where kind of the new business we're signing up or the stuff we might start next year based on today's economics looks to be as well. Thanks. You mentioned the regulatory side of the equation when you're looking at different markets. How do you think about regulatory risks in some of these expansion markets? Obviously, it's more favorable right now than some of the coastal markets, but, you know, how do you try to handicap any changes going forward in the future there? Yeah. Nick, it's Sean. Good question. You know, I think when you talk about the regulatory environment, yeah, there are pros and cons to it. If you maybe start with sort of our coastal market footprint that we've had for a long period of time, part of the reason we have been so successful in creating value through the development pipeline is there is a very difficult regulatory environment to work your way through to actually get development entitled and delivered into those submarkets. It's been to our benefit historically. Obviously, the more active those jurisdictions become as it relates to landlord-tenants and rent-oriented things become slightly more risky for us, of course. In terms of the expansion markets, there are not as many constraints on development, although there are places within those regions that are a little more sensitive to development and have somewhat more constraints, but in general, slightly, more favorable, in terms of development, of course. In terms of evaluating the risk on sort of the landlord-tenant side and the rent side, it is a jurisdiction-by-jurisdiction assessment. You know, for example, you know, if you think of our legacy markets, we feel pretty good about Washington State overall, not so good about the City of Seattle. When you go through some of these markets, for example, in Texas, you know, you look at Dallas-Fort Worth overall, feel pretty good, generally speaking, about that environment. Austin, there are some more regulatory constraints in the suburban environments as it relates to land use and the watershed and things like that. Overall, we think the regulatory environment certainly is to our benefit in those markets, but there are places where you have to still work through the moves. Overall, the landlord-tenant, the rent control side, we think the risk is definitely lower than our legacy markets, but it's not without any risk. It's the way I'd describe it. Thank you. We'll take our next question from Rich Hightower with Evercore. Hey, good afternoon, guys. Likewise, all the best to Tim in the next phase of his tenure with AvalonBay and beyond. I just wanna follow up on Nick's question there. I guess, look, if you bake it all together in terms of your outlook for job growth, supply growth, regulatory impact one way or the other, I mean, if you had to sort of gauge which group of markets is going to have superior rent growth over the next three to five years, again, taking all those factors, you know, kind of in hand, you know, where do you sort of peg your core coastal markets versus those expansion markets in that regard? Yeah, Rich, good question. I'm not sure we're prepared to, you know, call the lead horse just yet. You know, the way I think about it is kind of the way you described in terms of looking at job growth, supply growth, all the macro factors that we all consider. I think the reason we're going into these markets is, you know, while we certainly see more supply growth in these markets, say in the 3% range, if you talk about a Denver or Southeast Florida, they also produce, you know, a lot more jobs and have benefited from much more significant immigration as opposed to coastal markets, which have typically benefited historically from immigration. I think when we look through it, I mean, at the end of the day, you know, when we look at our portfolio, we still expect a very significant portion of our portfolio to be in our, you know, sort of legacy coastal markets. For all the reasons that Ben talked about in his prepared remarks related to where we see kind of knowledge-based workers growing, it's growing in our legacy markets. It's also growing in some of these midcap knowledge markets. There's more supply for sure, but you definitely see the demand that more than consumes that. I think the question is really, does supply get maybe too much in front of that in some of these Sun Belt markets where we've seen significant growth the last 18 months, or does that come back into check? I think that will dictate kind of how the rent growth equation comes out across the expansion markets versus our coastal markets. We believe in both, and they may not grow at the same pace at the same time. Over the long run, we feel good about the rent growth that we'll see across the entire footprint. Okay. That's helpful. Then maybe just a different twist on the development question. This isn't so much a question on inflation as it is you know the impact of labor and supply chain constraints on the timing of new deliveries, whether we're talking AvalonBay's projects or even competitive supply. What trends are you seeing in those factors? Yeah. Hey, Rich. It's Matt. We have not yet seen a lack of availability in the supply chain interfere with our ability to deliver apartments. We've had spot issues here and there, where, you know, right now we're struggling to get appliances in one asset, and so it might delay deliveries by a month or so. But we haven't seen it in a more widespread way. But there is that potential. I mean, there are certain commodities, you know, drywall is on an allocation right now in some markets. So I think it has impacted the for sale inventory and ability to deliver some. I think for us, it's a place where we benefit a little bit by being our own general contractor and having pre-existing relationships with our subcontractors. You know, honestly, the bigger constraint right now on getting units turned and delivered has been the local jurisdictions and their staff. A lot of these jurisdictions are still remote and they're down inspectors and, you know, you can't get people at City Hall to print out the documents you need. I wouldn't be surprised if some of the stuff that's in the pipeline takes a little longer to deliver. You know, if a deal that you thought you might be done in eight quarters might take nine quarters instead. There could be a little bit of a delay over time on that. It might extend the supply some just more broadly. Very helpful. Thank you, Matt. We'll take our next question from Brad Heffern with RBC Capital Markets. Hey, everyone. Looking at slide nine, it doesn't seem like you've seen some of the seasonal fall off that the other coastal names have. It's the same chart for, you know, other people, kind of peaks in August and goes down in September and October. I'm curious if there's an underlying reason you can point to as to why that would be the case. Yeah, Brad, good question. I mean, it is correct that we have seen a more modest seasonal adjustment than we typically would experience historically. If you go back, you know, to 2 - 3 years kind of pre-pandemic and kind of look at where September rents are relative to the peak rents during the summer in the various regions, which each one peaks at a slightly different time. We just call it the middle of the summer, and kind of where it comes down to September relative to this year. Historically, you know, we see about a 2.5% decline from peak to September averages. You know, this year it's only about 90 basis points in terms of what we've seen, in terms of that softness in asking rents, which ultimately impacts move-in rents. It's about a third of what's normal. You know, it's pretty widespread across our markets as it relates to the seasonality being less than historical averages. It's hard to speak to the portfolio of our peers, specifically what may be impacting them. You know, certainly as we look at our portfolio, we feel good about the fact that, you know, the rate of decline has been, you know, far less than historical norms. We'll see how it plays out as we get through the end of the year. It could be just timing differences among the different companies, and it's really a sub-market by sub-market issue that you have to look at, so it's hard to decide for the others in terms of what their real conclusion is. Okay. Got it. Thanks. On the OpEx guide, you know, I was noticing that the Q3 was in line with the guide, and the Q4 OpEx guide is really quite low, but the overall guidance went up. I was curious if you could reconcile that. Was the original Q4 expectation that OpEx would be down, and then there's just been pressures on top of that? Or any help there? Thanks. Yeah. I mean, there's a number of different factors kinda driving the timing from quarter to quarter, which is it's a pretty kind of detailed roadmap. Why don't I ask Jason to follow up with you on that one offline as opposed to getting into the weeds. I mean, a lot of it's, you know, timing of different projects and when they hit, you know, what we expect turnover to be, and various things like that to sort of come through. Leasing activity, the impact on bonuses. There's a lot of different things there that sort of drive that number in terms of the quarter-to-quarter cadence. Brad, this is Kevin. Just to sort of reiterate, we do expect same-store OpEx to decline materially sequentially into the Q4. Okay, thanks. We'll take our next question from Chandni Luthra with Goldman Sachs. Hi. Good afternoon, everyone. Tim, let me extend my congratulations to you on a glorious career and good luck on the next chapter. So this is for the team. As we kind of think about, you know, potential interest rate hike or a series of them, you know, going into 2022, how do you all think about the spread that you laid out in one of your slides between, you know, projected stabilized yields and total cost of capital? I think you guys noted that it's about 210 bps, and it's fairly wide. How should we think about that spread in the event of a higher cost of capital? I guess this is Matt. I can start, and others can chime in. I'd say first and foremost, we try and lock in that spread by match funding. We're generally raising and sourcing the capital when we start jobs, so that if there is a big change to the cost of capital, you know, you really need to think about the development deals we're putting up relative to the capital that we funded those with. That's why you see, you know, we're generally anywhere between 70-80% match funded, when you look at kind of the remaining to spend in our development book against our cash on hand and kind of the short-term free cash flow. I think it probably starts there. I guess you'd have to ask yourself why are rates rising? If rates are rising because it's an inflationary environment and NOIs are also rising, then, you know, hopefully you can preserve most of that spread, you know, anyway. If rates are rising because it's an increase in real rates as opposed to nominal rates, then that does put downward pressure on the margin. Chandni, Matt, no you go ahead. Chandni, this is Kevin. Just to maybe add to Matt's point, I mean, the largest, most relevant point with respect to the activities we're doing is what Matt outlined, which is we are substantially match funded against our investment commitments when we start those developments. At the moment, if you look at our current book underway of development, we are nearly 80% match funded. You know, also importantly, you have to look at it from a holistic balance sheet perspective when we are considering incremental investment opportunities. In that regard, we are in terrific financial shape and have tremendous financial flexibility in addition to being substantially match funded on the investment commitments that we've made. From a liquidity point of view, you know, as you can tell from our release, we have $300 million of restricted cash on hand and nothing drawn on a $1.75 billion line of credit. Then from a leverage point of view, you know, we're at 5 times against a targeted range for net debt to EBITDA of 5-6x, and our EBITDA is rising. We have, you know, increasing leverage capacity as well. When you kind of put that all together, to the extent we get into a moment where there's a little bit of volatility in the capital markets, you know, we do have a lot of financial flexibility to choose our time in which we enter a market and try to choose when we source capital to those moments where it's most attractive. All together, we're in terrific financial shape with respect to our existing commitments, and we have a lot of flexibility to think about how we might finance our future investment opportunities in a volatile and potentially rising rate environment. The last piece that I would add is just that, you know, at a macro level, obviously interest rates, you know, can have an impact on asset values, but also be very mindful of fund flows, right? Which, you know, you think about the correlation of asset values over time tend to be more correlated to asset values. As we look out, you know, what we're seeing today and look out over the coming years, you know, we expect fund flows into the real asset space, and particularly in the multifamily space, to remain strong. Thank you for that color. Makes a lot of sense. My second question is slightly more housekeeping in nature. Could you all provide an update on what% of leases are receiving a concession today, and what that average concession, if at all, is looking like? Sure. Happy to answer that. As it relates to the Q3, about 10% of the new move-in leases that we signed received a concession, and the average concession was about two-thirds of a month's rent for that 10% population of move-in leases. Great. Thank you so much. We'll take our next question from John Pawlowski with Green Street. Thanks. Sean, I'm not sure if you can glean this from your leasing data, but just curious about one aspect of renter behavior. As the impacts of the pandemic fade, are you seeing any structural shift in the propensity to have roommates? Good question, John. At the portfolio level, it has not changed materially. Going through COVID, it's dipped a little bit, which is something you might expect. In terms of sort of recent quarter leasing activity, roommates, that one I have to follow up with you on. I don't have that off the top of my head. The overall percentage of the population with a roommate as of the Q3, I think, was down maybe 150 basis points from historical averages. So not a material move, but that doesn't mean that it hasn't changed in certain sub-markets. You know, we have heard about that a little bit, particularly in the context of major urban cities that are home to significant university housing, where they've tried to sort of dedensify the dorms, so to speak. There's not as many roommates and pushing people out to sort of market rate housing, which is helping to support demand in these markets. The specific nuance the last couple of quarters that I have to circle back to you on. Okay. No, I appreciate the details. The last question for me is a little bit longer term in nature about what's the right or what's the needed capital expenditure load to operate an apartment portfolio. In the near term, you obviously have supply issues, but in a little bit longer term, regulatory issues, you know, balcony inspections in California, green emissions, you go down the list. The direct question is, do you think there's a step change coming in the capital expenditures that's needed to operate an apartment portfolio? Yeah, good question. I can take some of that, and there's some ESG things that, you know, Matt could talk about that are sort of potentially out there on the horizon. I would say in the context of regulatory environment, there are definitely some issues, I wouldn't call it really broad-based, John, that are sort of getting into how we operate buildings. There have always been issues about, you know, checking things in New York City as an example, in terms of facade inspections and stuff like that. That's ongoing. The balcony issue in California has come at some expense, but mainly it's just, it's an inspection issue that was originally pushed by the unions. Yeah, people are spending a little bit of money on inspections, but it's not clear that there's a mandate that you have to do X, Y, or Z repairs within a very short time frame. Over a longer period of time, it may move the needle a little bit, but at least based on what's out there today, as it relates to physical inspections and ongoing remediation, I wouldn't expect it to be a big driver. Probably the bigger issues are more on the construction side as it relates to some of the green things that may come through, ESG efforts, you know, that are sort of a broader envelope of other things that are coming through in various jurisdictions. Yeah, John, it's Matt. I'll just add to that. I think that's right. That honestly, if you look back over the last 5 or 10 years, probably the thing that's driving up CapEx more is just that we're putting more into these buildings. You know, the amenities are a lot more elaborate, and when it comes time to redo those, it's a little more expensive. Going forward, you know, it's an interesting question. You could make an argument that if, as the regulatory load increases, it may be an advantage for institutional owners like ourselves who have better capacity to manage that and deal with it than some of the smaller private owners. So over time, it might contribute to more consolidation in our space, which is incredibly fragmented. You know, we certainly are trying to manage on an asset-by-asset basis, and it's our CapEx exposure, and it's one of the things that informs our kind of asset trading strategy. One of the things we've been really pleased by is our ability to sell assets that are 30 years old that have definitely significantly more CapEx liability embedded in them at basically the same cap rates as buying almost brand-new assets. That definitely informs our strategy on the margin. John, last quarter we spent time, you know, talking to our new concept called Kanso, right? Which is targeted to a customer segment who we don't believe places a lot of value, right, on those additional amenities. But there's definitely aspects there in terms of go forward, you know, both upfront and go forward operating expenses, right, that provide benefits from the growth opportunity with that brand. Okay. All right. Well, thanks for all the comments. We'll take our next question from John Kim with BMO. Hi. Thanks for taking this question. This is Valeria with BMO calling for John Kim. Just a question on dispositions, like where they were located this quarter. Just moving forward, where are you looking to kind of trim exposure? Sure. This is Matt. I can speak to that a little bit. We didn't actually close anything this past quarter. We closed a number of dispositions in the Q2. As Ben mentioned, we have about $300 million that we expect to close here in the Q4. All of that is in the Northeast, which is where we've been heavily over-indexed in terms of our disposition activity. A couple years ago, we sold a significant chunk in New York City into a joint venture, and then we've been balancing that out the last couple of years with more dispositions in the New York suburbs. A lot of that's just driven by our overall portfolio allocation, given that we have a pretty deep development pipeline in many of those kind of suburban New York areas as well. As we look forward, you know, we're gonna look to continue to rotate capital out of our coastal regions into these expansion markets. You know, it'll probably continue to be a little bit disproportionately in New York, other parts of the Northeast and maybe over time in the Mid-Atlantic and a little bit in California as well. Okay, thanks. Appreciate the color. Kind of moving to Southern California, it doesn't appear to be softening seasonally, kind of like your other markets are, and how sustainable do you think that this is? It's a good question. It hasn't softened as much. We've seen a little bit of softness. It's probably hard to tell on that chart, but it has been, you know, less than the other markets, certainly less than historical norms. I mentioned there's, you know, a number of reasons for that out there. I mean, it's been a pretty robust market in terms of job growth the last six months. A lot of the, you know, travel, entertainment, you know, businesses coming back online. The content producers in the media space have been on overdrive producing content. The market has had a pretty robust recovery. How long that is sustainable, you know, we'll wait to see how things kind of play out next year as it relates to all the macro variables that we think about. The outlook for Southern California is pretty healthy given, you know, very low expected volume of multi-family supply next year, the lowest of any of our coastal markets. Pretty healthy job growth and a very tight for sale market, both for rent and for sale. There are a number of reasons why the general outlook for Southern California is pretty good. Okay. Thank you. My last question was around the Kanso product. Do you see more opportunities to develop this? If so, like, you know, do you think it's gonna be harder to push rent there versus your typical product with more amenities? Hi, this is Matt. We are certainly out there looking for opportunities to grow the Kanso brand. Again, our market research would indicate that there is a large untapped segment of customers that are looking for what Kanso offers. I do think there's a great opportunity out there, and that, you know, it's gonna take us a little time to get at it, but we're very focused on it. In terms of future rent growth, I mean, I don't see any reason to think that rent growth in the Kanso product would be materially different than the sub-market to which it's a part. Maybe it's a little less exposed to new supply because it's competing at a little bit lower price point. Typically, we found that the more modest price points have a little more rent growth, kind of over a full cycle. We think that it should be well-positioned both for initial return and for long-term growth. Just to add on to that, maybe one other comment. You know, based on what we've seen at the test community, the concept community we have today, rent-to-income ratios are pretty similar to our portfolio in the suburban Maryland market. If you think about if you get equivalent rent growth, higher margins because you don't have the same operating costs, you don't have the same ultimately CapEx costs as well, NOI growth could potentially be even stronger to the extent you have similar rent growth. Okay. Thank you so much. We'll take our next question from Austin Wurschmidt with KeyBanc. Great. Thank you. There's been a lot of discussion, you know, this quarter around the embedded loss to lease across portfolios, and the benefit is you're able to capture that mark-to-market. But you guys highlighted the fact in the presentation that rents are 7% above pre-pandemic levels across the portfolio or, you know, up around 3.5%, you know, the past couple years. So do you think as we kinda get through to the back half of next year, that pricing power could then exceed the inflationary level given some of the positive variables that you identified, like the strong single-family housing market, you know, personal income growth, and then, you know, the fact that rent-to-income ratios aren't overly stretched today? Yeah. I mean, if the key point is, you know, is there room beyond the existing loss to lease? I mean, the macro environment is such that there is good pricing power. As Ben pointed out in his prepared remarks, there's still a number of things out there from a macro standpoint that should continue to benefit rental demand in both our urban and suburban submarkets. I mean, if you think about it, that 7% is kind of a blended number. As you pointed out in the urban submarkets, it's still trending slowly below 2019 levels. Urban occupancy rates and job center suburban occupancy rates and offices are still very low. They've been ticking up, which is great, and we're starting to see signs of that in terms of people moving back into the cities. We're still a long way to go in terms of a full recovery. Should there be incremental pricing power beyond what we've experienced in our portfolio as all those macro factors have been alluded to? Start to come together, I think the answer is yes. Obviously, if we see some reversal, it may impact certain markets differently. You know, one of our expansion markets is, you know, Southeast Florida as an example. When you look at where the loss to lease is relative to historical norms and kind of long-term trend lines, is it well above historical norms? Yes. We're gonna be buyers there and developers there, but we're gonna be careful about, you know, the bets we place. Might some of that revert back to New York, in that case? Do you see a little more softness there? Yes. Those are the types of things that we talk about. At a macro level, there's reason to be optimistic for sure. No, that's helpful. Thank you. Kevin, just last quarter, you had ranked kind of the most attractive source of proceeds and with debt and dispositions, I think we're at the top of the list. Here recently you dusted off the continuous equity program with a small issuance. Any change in the preference or ranking today and willingness to use equity as you think about growing the development pipeline over the next year? Hey, Austin. Yeah. You know, it hasn't changed tremendously. I guess probably if we had the heat map out right now and looked at things, you know, probably asset sales would be at the top, pretty close to about the 100th percentile when you look at, you know, the historical precedent for that source of capital. Particularly so for suburban asset sales. That would still be our most attractive source of capital. You know, it would be followed pretty closely by unsecured debt, which would probably be in the mid- to high 99th percentile, call it 95th percentile. Common equity would be, you know, not far behind, pretty much in that kind of 90-95th percentile if we had the heat map in front of us. I mean, the broader message today is similar to the one that I spoke to a quarter ago, which is, you know, each of our three primary markets for capital asset sales, unsecured debt and common equity are attractively priced, and they're open, and they're available to support funding our investment activity on accretive basis. You know, when you look at what we've raised to date, $1.4 billion, it's been primarily a mix of asset sales and unsecured debt. There has, as you noted, been a little bit of common equity issuance, but only $30 million, so call it 2% of the overall mix, give or take. I think, you know, where we stand today, you know, obviously, it's a phenomenal position we're in right now from a financial flexibility standpoint, given where the balance sheet is positioned, as I mentioned a moment ago, and where, you know, pricing stands in the capital markets today. Obviously, you know, we really can't comment about what we might do in the future for kind of the obvious reasons that the capital market conditions can change and our investment uses can as well. But certainly, we're in a position to tap all those sources accretively on a leverage-neutral basis to try to, you know, to drive the business forward and drive NAV and earnings growth. You know, with rising EBITDA, as I mentioned before, you know, we have an increasing capacity to issue debt to do so as well. Maybe I'll just stop there and, you know, say that it's a luxury to be in this situation where we can look at all those choices, and it's a good time for us to be able to drive the business forward and be forward-facing in terms of the investment markets. Thank you very much. We'll take our next question from Rich Anderson with SMBC. Thanks, everybody, and Tim, congrats. You know, leadership at AvalonBay has kind of been a constant, and you're no small part of that, so good luck in the future. You know, the first question from me is on Northern California. Your peer Essex thinks that's gonna be the best growth story in their portfolio in 2022. Part of that is, you know, tech returning their employees back to the office next year, and I know that was mentioned early in this call. But how impactful is that into your thought process towards Northern California for next year? I know you're not providing any 2022 color, but is it at least possible that Northern California could snap back in a way that it could be the leader in your portfolio in 2022? Yeah. Rich, good question. I think one way to think about that is the potential opportunity there, which is given that it is one of the markets, or is the market that has not yet recovered to kind of pre-COVID levels. If you look at it and judge it just by what is left to come, if you believe that all markets would revert back to their pre-COVID levels and continue to grow, that is the region that has the most to rebound, if you wanna describe it that way. To the extent you see demand come back in a way that supports that, then it certainly could be a leading market as you move into 2022 and beyond. Obviously, you have to move through the lease expirations to capture the benefit. You could certainly see a more meaningful acceleration based on where it's positioned today in terms of rents versus peak as compared to the rest of the portfolio. Okay, great. Then, second question is on the expansion markets. You know, it's quite clear why you're doing it and, you know, no argument there. But as it relates to how it impacts the stock, you know, 12 of the 15 development projects are in your kind of core gateway market. So assuming, you know, you won't no matter what happens, the market won't associate AvalonBay with the Sun Belt until you kinda have a reasonable amount of your business in those markets, relatively speaking. With that in mind, what's the timeline, do you think, where you get like a 5%-ish type number in each of those expansion markets where, you know, you're at 25 or 30% of the total portfolio is, you know, outside of the core gateway markets, and you really have yourself tethered to what might happen in the Sun Belt, as it relates to stock performance, I should say. Hey, Rich, this is Ben. You know, I would guide you towards our experience in Southeast Florida and Denver as a decent proxy, right? We put out a target of each of those being 5%. You know, we're at a point now, you know, with our teams on the ground, with those franchises building, where we are starting to see some accelerated activity, right? And increasingly our own development. So as we think about the new four expansion markets, probably on a, you know, a similar type of process, our growth just to orient everyone, you know, it's acquisitions, which obviously you can get to the quickest. It's our own development, and we do have resources on the ground, you know, in each of these markets, spending time developing the relationships that are gonna be necessary to unlock that land. Then the third vehicle is through the funding of other developers. That's been an approach we've been utilizing in Denver and Southeast Florida. That'll be one of our first projects, and North Carolina will be of that approach and a lever that we expect to pull sort of balance the, you know, getting some of that development profit, maybe not the full development profit if we were executing our own, but working with people who have sites that are entitled and ready to go. Okay, great. Thanks very much. We'll take our next question from Alexander Goldfarb with Piper Sandler. Hey, good afternoon. Congrats, Tim. Hopefully, it means more golf in your future. Also wanna say congrats to Bill McLaughlin, your development head, on his retirement as well. Certainly talking about ramping up development, Bill's been responsible for a lot of that. Congrats. Two questions there. First on the development part. You guys do not trend your rents, so that when you guys have in your development page your 5.9% yield, that's based on, you know, escalated costs, but rents as they are. As you guys underwrite new projects, given how rents have grown, do you expect the yields that we see in the supplemental to come up, meaning are rents outpacing the cost of construction, timing delays, et cetera, where we will start to see higher yields in the supplemental or we're not yet there yet? Yeah. Hey, Alex, it's Matt. You're right. When we start a job, it's based on today's rents and today's costs, and we've basically locked in a good amount of the cost when we start the job. We have an excellent track record of delivering on the cost side. What you see is, and then we don't remark them, the rents to market until we have 20% leased, give or take. The rents will kind of stay where they are for the first year plus, and then we'll mark them to market. You know, the materials that were shown earlier, Ben was talking about how our rents are running $170-180 above pro forma. That's based on those six jobs which are now coming to market. The first thing is, there's jobs that are on that schedule that were started 12 or 18 months ago that have not yet been marked to market. There should be some lift out of those. Again, that's what we're seeing on that basket that we have currently and lease up. They're beating pro forma by 30, 40 basis points on the yield. On the deals that haven't yet started, what we're finding is that the greater rent and NOI definitely helps. The higher costs hurt, it falls through to land value pretty darn quickly. It's a very competitive market in terms of, there's a lot of merchant builders out there and where it all takes your yield. You know, new business we're signing up today reflecting today's rents is in that kind of mid to high fives yield that I mentioned. You know, where those yields settle out when you actually start the job in a year or two, you know, that's the bet. What'll grow faster from this point? You know, kind of rents or costs. I feel pretty good that that kind of mid to high fives is probably a pretty consistent number you can see for a while. Okay. The second question is, in your expansion markets, like in Dallas, I think your entry is out towards Grapevine area, and at 275 a door would suggest, you know, pretty efficient pricing. You know, Charlotte sounds like it's a little bit more infill at 350 or so. You know, based on your experience in the coastal markets and then looking at companies like Mid-America in the Sun Belt, is your Sun Belt focus more on the outer rings, or do you think that you will, you know, target infill? I think it's a little bit of both, Alex. I mean, ultimately, we'll have a diversified portfolio. Some of it is where we wanna buy versus where we wanna build. So if you look at what we've done in Denver, the assets we bought have tended to be more of the garden assets on the perimeter. Where we're developing, we have a deal in RiNo. We just started a deal in Westminster, which is, you know, kind of a second ring suburb, but we have a deal that will start here shortly in the city of Denver. We're trying to balance out the development, which tends to be at the higher price point with, particularly in these Sun Belt markets, where historically over time, more of the rent growth probably has come in more of the moderate price point. We are more focused on acquisitions that are younger assets but, you know, not necessarily, you know, kind of the downtown, you know, $350 a foot type rents. You know, we like the position. The Charlotte acquisition was a little bit different just 'cause it was an opportunity to pick up a three community portfolio in the South End, which is an incredibly dynamic part of Charlotte where there's just tremendous amounts of growth, retail, employment, as well as residential. I think the Grapevine or the Flower Mound acquisition that you referenced is probably more in keeping with what we bought in Denver and what we've mostly been buying in Florida and where we're looking. Okay. Thank you. We'll take our next question from Haendel St. Juste with Mizuho. Hey, yeah, good afternoon. Thanks for taking my question. Tim also, it's been a pleasure. Good luck on the next phase of your career. My question here is on the technology platform and how you feel that can help you manage some of the chunkier controllable expenses across the platform, given the inflation and cost that we're seeing across just about every aspect of life here. Maybe you can sprinkle in some comments on, you know, the benefits that you outlined, the $25 million-$30 million that you project the next few years. What's the key drivers there and some of the key core assumptions? Thanks. Yeah. Haendel, good question as it relates to technology and just for the inflation. Most of what we're focused on relates to, in simple terms, kind of digitizing the business and creating a more self-serve model for customers, which just so you know, they have expressed a desire for that, a continuing desire for that to be able to self-serve like they do with many other major brands across the country. I would say that for the most part, the impact on the P&L will show up predominantly in payroll, probably a little bit in R&M, just in terms of the efficiency of insourced and outsourced activity. You know, a lot of the things that we're doing relate to digitizing the application lease and move-in process as an example, that a customer can self-serve and complete that entire process and move into a community without ever talking to anyone who's an AvalonBay staff member. AvalonBay staff may be available in a centralized call center or other locations regionally to be able to support that activity, but to the extent that they like to do it on a self-serve basis, they can. The same thing applies to the maintenance activity, lease renewals, and then what we call the live journey, which is all the interactions that a customer has with us when they live with us. That relates to all kinds of different things that get into about transferring apartments, adding a pet, adding a roommate, you know, et cetera. Most of it is focused on digitizing the business. The second piece of it is really around data science and leveraging data science to make different types of decisions related to a number of different aspects of the business. Probably one use case to, you know, mention specifically is lease renewals. The more we know about customer behavior and various other things will help us offer greater choice to customers and also try to optimize the renewal capture in terms of the process, but also the renewal value in terms of at what rent they renew with us and for what duration. There's lots of data science work that will be coming to fruition as well. The heavy emphasis, as it relates to the benefit that Ben mentioned, is on the digitization of the business and the various processes that are related to customer interactions, and most of that benefit will show up via payroll. Got it. Appreciate that. Incremental investments on that tech platform from here, is the money effectively been spent or, you know, how much more are you looking at in terms of required investment? Yeah. The total investment that we expect for the activities at least that we have sized up for the next two to three years is an incremental of roughly $20 million-$25 million. We have incurred some costs to date, about $7 million, as it relates to our automated leasing agent and various other things that have already resulted in about an 18% reduction in the frontline sales staff at our communities, which has gone through payroll. Going forward, there's still some investment to come. Got it. One last one, if I could, on the rental assistance payments year to date. Appreciate the color you guys provided there. I'm curious what's left in that receivables bucket. What's the remaining opportunity for, say, next year, and how much has been reserved against that? Thanks. Haendel, you know, maybe I'll start, and Sean may wanna jump in. In terms of the rent relief payments that we received, as you can tell in the same-store portfolio, we received $11 million in the Q3. It's obviously a difficult line item to predict. It certainly is true as Sean pointed out in his opening remarks that, you know, nationwide there's $47 billion that's been approved, and less than a quarter of that has been distributed nationwide. We certainly have done an awful lot to apply for more proceeds from the various governmental agencies that are involved in that, and so too have our residents. It is hard to predict with great precision when it's going to come in for, you know, 2022, for example, but even for the Q4 of 2021. For purposes of guidance, what we have assumed in the Q4 in terms of incremental rent relief payments that we'll receive in the Q4, we've assumed about $12 million in our same-store portfolio. I can add on to that. Certainly Kevin can address the kind of gross versus net receivables and what the total pot is, but just to provide a little color on what we've received. Out of the funds we received, about one-third of it relates to applications that we submitted on behalf of the resident in jurisdictions where we are allowed to do so. About two-thirds of it has showed up via resident applications where we have had no knowledge of the applications submitted by the resident until we were notified by the jurisdiction that they were approved for payment and payment would be transferred to us. In terms of the percentage that we received relative to what we've applied for, again, what we can apply for independent of what the resident may have applied for, we've only received about 30% of the total pot that we have applied for. We've applied for, you know, in rough numbers, about $24 million in rent relief and we've only received about $6.5 million or so to date. To the extent that we recover most of that is pretty significant opportunity to come, independent of what we may receive in gross volume from either current residents who remain occupied in units but not paying, or in some jurisdictions where we are allowed to recover it, payments associated with residents that have left us but left outstanding balances. There's still a pot there to come. It's hard to determine exactly what may come through resident applications, again, because of the limited line of sight on those applications being submitted and processed. Understood. I appreciate it. Thank you again. As a reminder, to ask a question, please press star one. This will be your last chance to enter the queue. We will take our next question from Alex Kalmus with Zelman & Associates. Hi, thank you for taking the question. You know, given the 210 basis points spread between, you know, your development yields and cap rates that are very low, and that's despite the cost inflation and, you know, sourcing is very, very favorable, what's your sort of medium-term outlook on the supply, you know, notwithstanding the timing of specific markets, how that plays out? It seems like development is clearly winning out in this market and can create some supply down the line. Yeah. As it relates to total supply, this is Sean. I can touch on that. In terms of our markets, our supply expectation for 2021 has come down from the beginning of the year, as a result of, you know, various things, whether it's some of the supply chain issues that Pat described, capacity in local jurisdictions as it relates to inspections and such, et cetera. We expect 2021 to land at roughly about 1.7% of stock in terms of the deliveries. Based on what we can see in 2022, probably it's going to be relatively similar. You know, there'll be a couple of regions where we expect a little bit of increased supply, and that includes the New York, New Jersey regions, some stuff in New York City that's pushed into next year as an example. We also expect an uptick in Seattle. There's been pretty heavy volume under construction. Some of that has been delayed and pushed into 2022. Markets that'll be relatively flat include probably the Mid-Atlantic and Southeast Florida just based on supply that's working its way through. We do expect to see a decline in supply in Boston, Northern and Southern California, and Denver just based on what we can see working its way through the construction process and the various delays. That's the lineup as it relates to overall supply. Again, you know, keep in mind that a heavy influence on the supply side here is in urban submarkets. In, you know, kind of looking out over the course of the next year, we still expect about 100 basis points spread between the percentage of stock that's delivered in urban environments as compared to suburban. Suburban is getting down potentially into the, you know, 1.3%-1.4% of stock next year versus 240-250 basis points in the urban submarkets. There is a distinction there. Alex, let me just add to that. It's Matt. I mean, if you're talking longer term, I think what we're seeing is, to your point about the dynamic of the spread, development's a very profitable business. Supply tends to respond more quickly in the Sun Belt markets than in our coastal markets. You've seen this year starts nationally are up, but in our markets they're actually kind of level or a little bit down. That is one of the factors. You know, supply can respond more quickly in urban than in suburban submarkets in our footprint because the regulatory supply constraints are definitely more meaningful in the suburbs than in the urban areas. Across our coastal regions, what I'd say is development in the urban submarkets doesn't work today. You're seeing very, very little urban starts, you know, because the rents there are not above their prior peak, you know, for the most part, as Sean had mentioned, and costs are up. You know, my guess is you'll see a relatively muted supply response in our urban markets once we get beyond the stuff that's currently underway, you know, as you look out two or three years. Suburbs probably a little bit more slow and steady, but I think the supply response to the favorable economics is gonna be more aggressive in the Sun Belt. Really appreciate the color. Thank you. You know, earlier today, there was discussion about potential, you know, cost inflation and labor pressures driving some problems in lease-up for some developers. Does this seem like a reasonable expectation for potential opportunities to take, you know, over struggling lease-ups in the future, for acquisitions? We haven't heard that. I mean, we haven't seen any lease-ups having particular issues. We've seen assets being sold during lease-up, just people trying to take advantage of the incredibly robust asset sales market. Frankly, not at discounts that to us were all that compelling relative to buying stabilized assets. I appreciate it. Thank you very much. We'll take our next question from Joshua Dennerlein with Bank of America. Yeah. Hey, everyone. I had a question on maybe your Northern California strategy going into the fall, winter months. Seems like, you know, the softening starting in August was a delay in the return to office, and it sounds like a lot of people pushed it back to maybe January first. Do you think we might see it turn higher as we get closer to January one? Kind of, how are you guys thinking about that? Joshua, just to be clear, when you say turn higher, are you talking about occupancy, rents, just kind of the overall fundamentals of the business or? Yeah, I guess I'm looking at slide 10 of your presentation, so rent is what I would be focused on. Yeah. I mean, as it relates to Northern Cal in general, my earlier comments sort of reflected the view that, you know, particularly in these tech markets that are highly concentrated, you know, job centers like San Francisco and San Jose to some degree as well, of course, the return to office delays certainly have had an impact. We are starting to see people come back to those environments. You know, we had an uptick in people moving to San Francisco and San Jose from more than 150 miles away in Q3 compared to not only last year, of course, but a stabilized year. We're starting to see some movement, just maybe not as much as I think we all would have anticipated post Labor Day. Delta kicked in and kinda created the issues. You know, is it likely that San Francisco, as an example, which probably has one of the lowest office usage, you know, rates in the country, will come back more strongly early next year as people come back to work? I think the answer is yes. The question is the pace at which that occurs and the flexibility that people are provided as it relates to work from anywhere. Based on what we understand and try and track that as best we can, most of the, you know, work from home policies that have been adopted, people might live maybe slightly farther out or something, but they still need to be within a reasonable commuting distance of their office to be in there 2-3 days a week, depending on the company. Therefore, given the traffic and the commuting patterns in a place like Northern California, you know, people are, you know, they're gonna be within the MSA, that they work in as opposed to someplace that's, you know, a three-hour drive away. We would expect it to come back. Again, the pace really will be dictated by the work from home policies based on what we see in vaccination trends, the vaccination requirements coming out, and are we seeing the uptick in people coming back to those markets? It's just a matter of degree as we move into 2022. Okay. Appreciate it. That's all. That's it for me. Thank you. There are no further questions at this time. I would like to turn the conference back to Mr. Tim Naughton for any closing remarks. Yeah. Thank you, Casey. Thanks everyone for being on the call today. I know we've been at it for a while here, and look forward to seeing or talking to you at least virtually at Nareit here in a couple weeks. Enjoy the rest of your day. Thank you. That concludes our presentation. Thank you for your participation. You may now disconnect.