Morning, everyone. Welcome to the Nareit's 2025 Global Real Estate Conference. I'm Yana Gallen, and I cover the residential REITs. We're very pleased to have with us today AvalonBay Communities' President and CEO, Benjamin W. Schall, CFO, Kevin O'Shea, and COO, Sean Breslin. Ben will start with a few opening remarks, and then we'll jump into Q&A. Thanks, Ben. Yeah, great. Thanks for having us, Yana. Thanks, everybody, for joining us. I'll start off just quickly on some of the highlights from Q2 and our press release from last week, and then talk about some of our themes for the back half of this year and headed into 2026. Q2 highlights, we increased our same-store NOI guidance for the year up 40 basis points, which now sits at 2.7%. We also reaffirmed our earnings guidance for the year, our core FFO earnings guidance for the year of 3.5%, which continues to be at the top of the sector. In our press release last week, we reaffirmed that our revenue expectations quarter to date are tracking as planned. As we look ahead to the second half of this year and into 2026, I feel like we're relatively well positioned for a number of factors, so I'll tick through those now. Starting with our portfolio positioning, we believe particularly our suburban coastal footprint continues to display relatively steady demand, occupancy is in a strong place, and supply is definitely coming down in our established regions. It's coming down in the back half of this year, and as we head into 2026, we expect deliveries as a percentage of stock to drop to 80 basis points, which is levels that we haven't seen in 10-plus years. Think about it kind of on the backside of the GFC. The other theme as it relates to supply is given how challenging it is to get development entitlements in our established regions and how long it takes to get development entitlements in our established regions, we expect in those regions to stay at low levels of supply for an extended period of time. A lower for longer type of dynamics as it relates to supply. You put together, generally over a multi-year period, sort of steady demand in those established regions plus low levels of supply should line up for relatively strong operating fundamentals looking ahead. That's first. Second is you've seen us continue to proactively reposition the portfolio over the last couple of years, and that continues going forward. We're headed towards the two targets that we've set out for our portfolio. One is to increase our allocation to the suburbs, to get that from 70% of the portfolio to 80%. The second is to increase our exposure to a select set of expansion markets towards our 25% target. We've been making good progress there. It's generally involved a decent amount of trading activity, which has been us selling some slower growth, older high CapEx assets in our established regions, and then redeploying that into our expansion regions. This year, we're both buying and selling $900 million of assets generally along that trade. You've also seen us make the shifts that we've been targeting within regions. We recently talked about on the Q2 call a D.C. portfolio that was under contract, which is now closed. In the Mid-Atlantic, this goes back to our Investor Day a couple of years ago. We identified we wanted to reduce our exposure to the Mid-Atlantic from 15% of the portfolio to 11%. We also wanted to shift what we held in the Mid-Atlantic heavier to Northern Virginia. The trade in D.C. is about $450 million of assets at a 5.5% cap was in that direction. We'll now have on the other side of that transaction, 50% of our portfolio in Northern Virginia, where we prefer the longer-term growth dynamics and particularly prefer the regulatory dynamics in Northern Virginia relative to the District of Columbia. It's a good example of the within-region types of shifts we continue to make. All of this is in the category of looking to optimize the portfolio to deliver superior earnings growth and superior cash flow for shareholders in the years ahead. Third area of emphasis is development continues to be a differentiator for us. Feel very good about the state of our current development book. Generally, that book is trending above pro forma today, a combination of both rents being up in some projects, and we are also seeing construction costs come down fairly meaningfully and across most of the regions at this point. That's helping that book of business. In terms of looking ahead, development NOI this year is going to be about $25 million. As you look to 2026 and 2027, just based on our known under construction activity, pretty much all of which we pre-funded, we are set up for a decent step up as we get into 2026 and 2027, both in terms of earnings creation and value creation for shareholders coming out of our development expertise. The last theme I'll highlight up front is our balance sheet. It's in a terrific place. Kevin and team have completed our capital plan for the year at this point. We've raised $1.3 billion of capital at an initial cost of 5%, which lines up well relative to our investment uses, particularly development projects where we're redeploying that capital into the mid-6%. We generally have a balance sheet that provides us with a tremendous amount of flexibility and positions us to be able to continue to step into opportunities as they present themselves. I feel good and optimistic as we head into the back half of this year and into 2026. With that, Yana, I'll turn it over to you to help facilitate questions. Great. Obviously, anyone, if you'd like to ask a question, feel free to speak up. Maybe first I'd just start with your points on supply, clearly very favorable looking into next year and 2027. I guess maybe if you could kind of touch on the demand out there, the fits and starts during the spring and summer leasing season, disappointing job numbers, but offset by really strong renewal activity. Maybe if you could just frame that for us between East Coast, West Coast, and the expansion regions. Yeah, Sean, you want to take that? Yeah, so in terms of this year's performance, and I think you heard this theme from most of our peers this year as well, the leasing season peaked a little bit earlier than we all would have expected. A growth rate relative to the beginning of the year that was slightly lower. To be specific, typically what you would see is seasonally rents start to climb at the beginning of the year in January. They peak somewhere in the late June, early July timeframe, maybe up somewhere in the 6 to 7% range, and then level off and then trail down through the back half of the year. This year, rents peaked at roughly 4.5% growth from the beginning of the year, and it really occurred in sort of the mid to late May timeframe before leveling off and then seeing that downward slope in the back half of the year. At the time, as you're going through it, when demand begins to soften, it's not always readily apparent in the data in terms of what's driving that, given the lagged effect of data that comes out from a job and wage growth perspective. After our Q2 call, in fact, the next day after our Q2 call, there was a pretty significant revision in terms of the absolute number of jobs being created, which certainly aligned with what we were experiencing on the ground in terms of net demand. The other factor that I would point to that has impacted this year is the composition of that job growth has also been less favorable to, I would say, us and many of our peers' customers, where it's been more in healthcare, education, hospitality, those types of categories, as opposed to professional services, financial services, tech, those occupations that fit more, particularly with our established regions and those customers. As it relates to this year, that's what we've seen. In terms of sort of the mix on markets, what we indicated on the Q2 call in terms of relative outperformers or underperformers, that sort of remained the same so far in Q3, where the underperformers tend to be the Mid-Atlantic first, which we mentioned early on in our Q1 call, where we talked about sort of the qualitative elements that we were seeing from resident behavior that indicated a level of uncertainty related to their financial conditions. That certainly manifested itself in terms of softness in Q2, with increased concession activity, lower occupancy, increased resident behavior that indicated some stress in the system. That's continued into Q3. The one thing I would say that's positive about the Mid-Atlantic is some of the rhetoric and the media hype around those and other things has certainly begun to sort of settle. That should play out with some level of confidence as we get more into 2026. The headwind may be people that were laid off in late Q1 or early Q2. If they run out of severance and they're not reemployed, let's say late this year, early next year, that could be a headwind. Maybe it's cross-currents for the Mid-Atlantic. Across the rest of the East Coast, New York City, Northern New Jersey has been quite healthy. There have been questions about Boston. For the most part, while there are a couple of pockets of weakness, there's nothing broad-based in Boston that we're experiencing that we say there's a fundamental issue. There are questions around research and funding for biotech, foreign students, etc. We have not seen that in our portfolio. Most of our portfolio, however, is in suburban submarkets, high-quality towns, good schools, differentiated product. We have certainly an urban exposure, mainly at the Prudential Center and then North Station, but we've not seen a material impact in terms of demand from foreign students or anything else to give us a significant concern in Boston. On the West Coast, Seattle started its run last year, sort of Q1, has continued to perform well through this year. San Francisco sort of caught the same train, I'll call it. Maybe late last year, coming into this year, acceleration has been meaningful and consistent throughout 2025 thus far. I was in San Francisco a couple of weeks ago. Healthy demand in the city of San Francisco, people coming in from out of the area for tech jobs, sort of the on-the-ground feedback from our management team. A lot in the AI sector, as you might imagine. Move-in rent changes, low to mid sort of double-digit range. People getting healthy renewal increases, but taking them. San Jose is following San Francisco, just not quite as robust at this point in time. The East Bay is lagging. In Southern California, Orange County and San Diego are healthy. LA is sort of continuing with the theme that we talked about in the second quarter, which is the entertainment sector did not produce any of the kind of jobs that we would have expected. We remain soft there. Fortunately, the state did double the incentive program that it has for film production in the state, which we should have. It's a pretty big number. It should impact the production of content in California, most likely in the LA region over the next year or so. It takes some time for those dollars to kind of work their way through the pipeline, given the planning processes there. That's the color on the various markets. Thank you. Maybe just following up on the renewal trends, I guess this would be just how to think about potentially the move-outs to home purchase if we do start to see rates coming down. Yeah, good question. I mean, on the first day, what I'd say on the home building side is to the extent we see a little bit of a rebound in the home building business, that's generally good for overall macroeconomic activity, impacting a lot of different types of occupations. That net, we are a believer that, you know, improved economics and business activity in the home building arena would be good for us and the industry overall. In terms of current choices and what we're seeing, I'd say for the foreseeable future it's still, particularly for our established regions, relatively unaffordable to consider moving to some type of for-sale product. I mean, when we provided data on the last call, it's more than, you know, an incremental $2,000 per month to move from the median price apartment to the median price home across our established regions. A little bit of interest rate movement, a little bit of home price movement isn't going to change that equation dramatically. We're still seeing move-outs to home purchases in the 8% to 9% range, historically low levels. While there are certainly efforts to produce more affordable housing across our various regions, it is a slow, cumbersome process. I think for the foreseeable future, the level of unaffordability is probably not going to impact us materially at the margin, just given the, you know, absence of some huge shock here, I would say. We feel good about the level of substitutes being not a headwind for us in the near, you know, the next several, you know, it's probably next two or three years. If you think about the production in our coastal markets in particular, it is a long cycle. It takes two to three years, sometimes longer, to get the entitlements. Given we're building either a high-density wood frame product, whether some type of structured garage, or in some cases, you know, selectively high rises, the production cycle is much longer than going to, you know, Dallas, Texas, and building a three-story walk-up garden deal that you can get to first deliveries in 10 months, right? It's a much different type of cycle. On the supply side, I think the lower for longer is helpful for us from a multifamily standpoint. We would like to see a little bit of uptick in activity on the for-sale side to help them. The interest rate movement certainly will be helpful in that regard. Maybe just last one, kind of on operations, but anything incremental to any changes in what you're seeing, whether it be like the top of funnel, web traffic demand, tour demand, bad debt, roommate situations, anything like to call out from kind of all the different metrics you guys are tracking? Yeah, I wouldn't say there's anything terribly notable in terms of household mix. It remains relatively constant. We'd be concerned if we saw a significant uptick in the number of roommate situations as an example in terms of financial stress in the system, but we're not really seeing that. In terms of renewals, retention remains strong. I think just given the unaffordability that I mentioned, in our particular established regions, I think there's some segment of the population that sort of resigned themselves to, they're probably going to be a renter for an extended period of time. In some markets, like take Southeast Florida, the cost of homes has gone up 50, 60% over the last several years. You compound that with the cost of insurance. If you're considering an HOA situation with a condo, I think there is a segment in markets like that that also has decided they're going to be a renter for a longer period of time. That's all good for the business. I wouldn't say there's anything else material as it relates to the renewal side of the equation, a mix or anything at this point that's terribly notable. Thank you. Maybe just turning over to the kind of transaction market, given the recent D.C. portfolio sale and just comments on the amount of product out there, what you're seeing, is it attractive in terms of the geographies and quality that AvalonBay looks for? Yeah, so overall the transaction market from a cap rate standpoint generally still feels like it's in sort of the $4.75 to $5.75 type of range. Institutional players have generally returned to the market, which has allowed some larger transactions to occur, everything from our multi-asset deal in D.C., but also just larger transactions. I think things are generally a little bit more back, not back to sort of the height of the prior cycle, but there are transactions out there that are happening. It's allowing us to, as I said before this year, both buy and sell $900 million towards sort of our longer-term portfolio allocation targets. There are on both ends of the spectrum deals sort of outside of that range. D.C. priced at a 5.5%, some asset specific, but also a little bit of a reflection of the D.C. market. On the other side of the spectrum, there are some deals that we are losing, deals we want to buy, where people are stepping in and leaning further in and paying $4.5, $4.6, $4.7 types of cap rates in today's environment. Broad picture, rates have been higher, right? Buyers have seemed comfortable underwriting at least some upfront negative leverage. Now, borrowing costs may be coming down a little bit, but maybe also some questions around growth may be a little bit more questionable. Sort of seeing how that balances out. Kind of today's point in time, it seems like the market sort of solidified itself in that circa 5% type of range. Maybe just kind of geographically, are you seeing much more competition in the expansion markets, or has some capital been chasing some of the San Francisco or AI thematic markets? I'd say there are a set of assets that kind of check all of the boxes. I think one of those dynamics today is sort of what's going on with rent rolls. People are still somewhat shy of fully leaning into acquisitions if there's still questions about where rent rolls are potentially going or potentially rents are happening. Some of those high supply submarkets, there's not, as an example, a lot trading in Austin today, given that deliveries are still making their way through the system. Beyond that, we're seeing activity and obviously found a credible buyer in Washington, D.C. We're finding activity in the urban markets. In San Francisco, given now that values have returned and rents have returned, you could see some more transaction activity. Like us and others, we potentially want to lighten the load in some other urban markets, but values haven't necessarily returned to the place. Given some urban return there, there could be some incremental transaction activity that then happens in the marketplace. Thank you. Maybe turning over to development and just the size of the pipeline now and how you may take advantage of this opportunity where others are not building in the next couple of years. Yeah, we do feel like we are consciously making a countercyclical movement here to lean into development at a point in time when others are pulling back. Some of that is others don't have our cost of capital. Another component is we're able to take a multi-year look. We think about sort of what's happening with construction cost trends, those coming down. We like our longer-term basis activity. There are certain markets that have been tough to make development economics work over the last couple of years, West Coast being one of those. We're targeting $1.7 billion to start this year. 40% of that's going to be out west. That is a function of construction costs coming down and then rents improving. We feel like that's a good opportunity. As a cohort of projects, if we're able to get an outside share of activity as start volume comes down, when these projects open in a couple of years, they inherently will be facing less competition. That also has us leaning in from a development perspective. Can you talk a little bit about what you're seeing on construction costs? I think everyone was very concerned tariffs would be impacting costs. Some of the kind of immigration policies would be increasing costs. It's very surprising to hear you guys are experiencing the opposite. Yeah, what's played out is the tailwind associated with start volume coming down. Underneath that, what we're seeing is that subcontractors, as they want to make sure they continue to keep their people employed, are somewhat meaningfully reducing their margins. That has allowed us, particularly somebody of our size and scale, where we self-perform construction, where we have a project ready to go, we have subcontractors that are really leaning in for us. We're seeing construction costs come down in most markets today. If I was going to pick a number, it's probably circa in the 5% arena relative to a year ago. There are some markets, including some of the West Coast submarkets, where that number is more like 10% down. To reemphasize my point, as a long-term investor, to be able to step in at a more attractive longer-term basis is leading us to allocate some more capital there. In terms of, and Kevin can get into this, in terms of the funding side of the business, as you think about the $1.7 billion, most of that we are associating with the equity forward that we still have outstanding. We raised $890 million of equity on a forward basis at an initial cost of 5%. That's what we're lining up with this year's development starts. As we get into next year's development starts, particularly given our cost of capital and our equity cost of capital is higher today, we have raised our required target returns for our developers in the regions. This year, if we're targeting low to mid-6s, the target right now, as we think about 2026 deals, is more in the kind of mid-6% to 7% range. As you've heard us emphasize, what we focus on is making sure we're maintaining 100 to 150 basis points of spread between our development yields and both our cost of capital and underlying market cap rates, which is how we're sort of in that mid-6% type of range today. Where are we, where would you feel kind of between those projects and the cap rates in the markets, probably on the wider end of the... Yeah, I mean, the market is, to my comments today, the market's probably, for most of our institutional quality assets that we'd be buying and selling in the 5% range. 150 basis points would get you to mid-6%. Kevin, why don't I turn it to you and talk about sort of potential funding plans for next year and potential cost of capital associated with that? Sure. A couple points up front, and I'll kind of add a little more color. Our balance sheet, as Ben pointed out, is in terrific shape right now. We do have capacity to the extent it makes sense to do so relative to our investment uses and the return profile to lean into that balance sheet capacity through the use of incremental debt, if that makes sense to be part of the equation, to help support activity in 2026 and beyond. In terms of where the balance sheet is today, as you saw from the second quarter, net debt to EBITDA was 4.4 times on a last quarter annualized basis. That, when you look towards the end of the year and give us credit for the equity forward, you know, you're kind of looking at a four-turns type of leverage level. That does speak to the incremental leverage capacity. That doesn't mean we'll necessarily use it. We're fine where we are. We have often operated above five turns, and for the right investment opportunity, we're willing to do so. Using debt in that regard hasn't made a lot of sense, as we all know in the last couple of years, given where debt rates have been relative to investment returns. If you're looking at investment uses in the form of development in the mid-6% range right now, debt for us on a fresh basis, if we were to do 10-year unsecured debt, would be somewhere around 4.9% to 5%. We did a 4.9% to 5% today, so high fours. We did do a 10-year unsecured debt deal, as many of you know, priced it on June 30, closed it a couple of days later, $400 million at a 5.05% yield to maturity, sub-5% with the hedges. The spread on that was 85 basis points. If you apply that more or less to where the 10-year Treasury is, you get to a high 4% 10-year debt number. If you look at the five-year end of the curve, we'd probably be able to price fresh five-year debt somewhere in the low 4% range, 4.2%, 4.3%. We certainly have capacity to layer in five-year debt into our debt maturity schedule, given how low our leverage is overall. That really gives us financial flexibility to lean into development to support what Ben is articulating in the form of taking a differentiated capability and driving incremental earnings growth in the coming years through that set of activities. Great. You mentioned you would be willing to go a little bit shorter. I've heard more REITs kind of looking at five and seven years. Yeah, absolutely. We have a very level and modest debt maturity schedule with maturities typically averaging around $700 million or so a year, which is less than 2% of our capitalization. We typically look at having our debt maturities be at around where we think our dividends might be with a reasonable growth CAGR, 10 years hence. That implies sort of, you know, capacity in the low, you know, kind of $1.2 billion, $1.3 billion range for annual future debt issuances in the 10-year variety. From our standpoint, if you look at a debt maturity schedule over the next handful of years, we've got capacity to issue five-year debt in the $300 to $500 million range each year to support growth in addition to doing 10-year debt at a pretty elevated level, if that made sense to do so. Typically, we issue about $1 billion to $1.3 billion in debt a year. This year, we've issued $950 million. If you look at what we issued in addition to the $400 million of 10-year debt, we did complete a four-year term loan that we swapped out to fixed $550 million at 4.4%. We've already taken advantage of the shorter end of the curve to bring it to layer in some more cost-effective debt capital into the equation. We're willing to do so if it makes sense as we look into the next couple of years. Great. Maybe switching gears, just curious, anything new that you're watching on the regulatory front? Anything coming up with the discussions with whether it be the Rhodes Act or anything in Washington, D.C. or locally in any of your markets? I'll start high level, and then Sean may want to call out a couple of markets. We think about themes that are going to influence our business over the next five to ten years. The regulatory environment's naturally on that radar. We do feel like we're in a sort of heightened regulatory environment and one that maybe has shifted some from being more of just sort of a blue state dynamic to being a little bit more of a kind of populist dynamic. It does have us thinking about regulatory and how we can exert our influence appropriately across a broader set of markets. We focus on and really do believe the solutions here are supply-based solutions. Most people may not know this, but we do a lot of development, but most of our developments do incorporate 20% to 25% affordable housing that usually comes with the approvals that we get. For us, those market-based types of solutions are the places that can get new production actually created. The other call that I'd make on the regulatory front is the bar is definitely higher in certain markets and certain urban markets in particular, both based on known factors and based on just some of the uncertainty. That's been part of our shift to that dynamic and has been part of the lead to our shift to being more suburban and also to diversify some of our regulatory risk into some of the expansion regions. Sean, you want to call on any particular markets? Yeah, in terms of themes, what I'd say is maybe a couple of things. One is I think our concern about rent control in general, particularly more draconian rent control, has probably subsided over the last two or three years, mainly because the political bodies, particularly on the left side, realize that supply, whether they like it or not, is the right answer to these issues. If they tend to adopt something that is more draconian, it's going to be a problem. Even when you have someone who feels like or a political group that feels like they need to help suppress the rhetoric from different types of groups that are organizing around rent control, they're doing it with a very delicate hand. I would say a good representation of that is what passed in Washington State not too long ago, or 1482 in California, where you have CPI plus 5%, CPI plus 7%, and things of that sort that are very manageable frameworks. I think we're less concerned about that. What's more topical nowadays is probably fee transparency and making sure the customers understand the total cost of renting a home, since there's been a lot of chatter about that. The engagement with the various regulatory bodies, legislatures across the country has been more reasonable about it in terms of, look, we just want people to know what they're going to pay. There are all these questions around what extra fees for what. I think that's something that we engage with diverse regulatory bodies, people in the industry do. I don't think that's anything that's draconian in terms of the impact on the industry. We keep a very close eye on what's happening. Most of the action for us is state and local in terms of any material impact. Federal is very, very insignificant at the margin typically. The industry does a good job of engaging. I think the dialogue back and forth has been productive about the right solutions. Thank you. Any questions in the room? Sorry, I'm going to just confirm, negative summer. Do you guys see any option to be shared? Anything that's headed to the wall? Yeah, the question was from Jeff Spector from Bank of America as it related to consumer behavior. Sean, do you want to... Yeah, I wouldn't say anything material. Someone asked that question in a previous meeting in terms of consumer confidence and uncertainty. The only place where we've really seen that for now, probably a couple of quarters, is the Mid-Atlantic, as I mentioned earlier, where people just have more uncertainty related to their financial position, their job, etc. Other than that, I wouldn't say we're seeing any unusual behavior at this point. What sort of green lights would you want to be seeing in terms of the leasing cadence and also some of the lease-up assets? If they were flagged in Q2, if it would sort of trend you guys to the high end of the guide at the end of the year? The question's around sort of development NOI in 2025. Yeah, and broader leasing trends that would give you guys confidence sort of towards the middle measure, the high end of the measure. Yeah, so I'll handle the development NOI side, and Sean can talk more broadly to kind of leasing trends. Generally in our development book, things are tracking well. From time to time, we do run into some development delays, just a town where we're having an issue getting a COO. We think we were going to start delivering and occupying units this date, but it winds up taking another month or so. We had a little bit of that. On the lease-up activity, it really was isolated to a couple of projects in Denver and then one project in Maryland. Overall, our development book, if you look at lease-up pace, we were tracking 30 leases a month, which we consider sort of a normal pace there. Development NOI, really think about it, a little bit less captured in 2025, but the economics are there. That will lead to just naturally more of that NOI flowing through to 2026. What about pricing in those development assets in the expansion markets? Are you seeing a goal versus year on the right? Yeah, the question was around lease-up activity in our expansion region. The one project that we highlighted was in urban Denver, sort of infill market, high supply, a lot of activity, and there are challenges there. That's, I think, a poster child for that level of activity. Our other lease-up activity in expansion markets, particularly given our focus on the suburban nature of it and the lower density of it, has generally been tracking according to plan. I've got three rapid-fire questions. We'll be asking all the companies at the conference. When the Fed starts to cut, do you expect rates for long-term debt to decline, stay flat, or increase? Decline. Last year, the majority of companies stated they're ramping up spending on AI initiatives. How would you characterize your plans for next year? Higher, flat, or lower? Higher. Do you believe same-store NOI for your sector will be higher, lower, or the same next year? The same. Thank you. Thanks, everybody, for joining us.