Good afternoon, ladies and gentlemen, and welcome to AvalonBay Communities' Third Quarter 2025 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 your question-and-answer queue at any time during this call by pressing star one your keypad. If your question has been answered or you wish to remove yourself from the queue, you may press star two on your keypad. 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 Matthew Grover, Senior Director of Investor Relations. Mr. Grover, you may begin your conference call. Thank you, Vaughn, and welcome to AvalonBay Communities' Third Quarter 2025 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, the 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 investors.avalonbay.com, and 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 Benj Schall, CEO and President of AvalonBay Communities, for his remarks. Ben. Thank you, Matt. I'm joined today by Kevin O’Shea, our Chief Financial Officer, Sean Breslin, our Chief Operating Officer, and Matt Birenbaum, our Chief Investment Officer. Before discussing our Q3 results, which were below our prior expectations and our updated outlook for 2025, I want to start by emphasizing a series of AvalonBay tailwinds and strengths that keep us confident in our ability to drive superior earnings and value for shareholders. First, our portfolio, with its heavy concentration of communities in suburban coastal markets, continues to be well-positioned. With a more uncertain demand backdrop, we believe that those markets and submarkets with lower levels of new supply will continue to be the relative winners. Our established regions are particularly well-situated, with deliveries as a percentage of stock projected at only 80 basis points next year. Given how challenging it is to get new development approvals and the amount of time it takes to get those approvals, we expect our markets to continue to benefit from below-average levels of supply for a number of years. A second differentiator for us is the $3 billion of projects we currently have under construction, which will generate a meaningful uplift in earnings and value creation in 2026 and 2027. These projects are tracking ahead of our initial underwriting and, importantly, are benefiting from reduced construction costs, which translates into a lower long-term basis for shareholders. These projects are 95% match-funded, with capital that we previously raised through a mix of equity and unsecured debt, with an initial cost of capital of below 5%, providing an attractive spread to our development yields on these projects. Third, our balance sheet is in terrific shape, with low leverage and over $3 billion of available liquidity. As we look ahead, this balance sheet strength provides us with the flexibility to continue to redeploy free cash flow, disposition proceeds, and low-cost debt into our next set of accretive development projects, as well as to buy back our stock when appropriate, as we did in Q3, having repurchased $150 million of our stock at an average price of $193 per share. Finally, we continue to advance on our set of strategic focus areas, which are generating incremental earnings and cash flow from our existing portfolio, as well as on new developments and acquisitions. This year, we've made strong progress in advancing toward our longer-term portfolio allocation targets, with a continual eye towards enhancing the cash flow growth of our portfolio. We remain very excited about our progress on our operating model initiatives, including the expanded set of uses for technology, AI, and centralized services. By year-end 2025, we expect to be roughly 60% of our way toward our target of generating $80 million of annual incremental NOI from these operating initiatives. Turning to third quarter, slide five in our earnings presentation summarizes our Q3 and year-to-date results. We are on track to start $1.7 billion of development projects this year, with a projected yield in the low six's on an untrended basis. We've also completed our planned capital sourcing activity for the year, having raised $2 billion of capital at an average initial cost of five percent, generating a spread north of 100 basis points relative to development yields. Slide 6 provides the breakdown of third quarter core FFO relative to our prior expectations. Of the $0.05 underperformance relative to our outlook, $0.03 was attributable to same-store portfolio results, of which $0.01 related to lower revenue and $0.02 related to higher operating expenses, including in repairs and maintenance, utilities, insurance, and benefits. Turning to slide seven, apartment demand has been softer than anticipated this year, which we attribute mainly to the reduced job growth backdrop, with related factors including higher macroeconomic uncertainty, lower consumer confidence, and a reduction in government hiring and funding. As shown on the left side of slide six, the National Association of Business Economics, or NABE, is now projecting growth of 725,000 jobs in 2025, down from the over 1 million jobs in their prior forecast. For Q4, NABE is projecting growth of just 29,000 jobs per month. We revised our revenue expectations as part of our mid-year forecasts, with results for July and August generally tracking to those expectations, as shown on the right-hand side of slide seven. As Sean will discuss further, softness on rental rates in August continued in September, along with a slight occupancy dip, with further softness continuing into October, trends that are now incorporated into our updated outlook for the remainder of the year. As shown on slide eight, we've also updated our expense outlook for the year to 3.8%. After benefiting from meaningful operating expense savings in the first half of 2025, we've had trends run against us across a set of expense categories without any offsetting savings. For example, in repairs and maintenance, we knew that certain savings from the first half of the year would be incurred in the second half, but have incurred more and higher-cost repairs and non-retrieved projects than anticipated. Other unfavorable variances include insurance, utilities, and associated benefit costs. Given our Q3 results and these revenue and operating expense trends, we've updated our outlook for the full year, which Kevin will now discuss in more detail. Thanks, Ben. Turning to slide nine, we present our updated operating and financial outlook for full year 2025, as compared to our prior outlook on our second quarter call and on our initial outlook for the year that we provided in February. We are lowering our full-year core FFO per share guidance by $0.14 to $11.25 per share, which reflects an updated expectation for year-over-year earnings growth of 2.2%. Our updated full-year outlook reflects same-store residential revenue growth of 2.5%, same-store residential operating expense growth of 3.8%, and same-store residential NOI growth of 2%. Turning to slide 10, we highlight the components of our updated outlook for full-year core FFO per share in the second half of the year for key parts of our business, as compared to our prior outlook on our second quarter earnings call. Specifically, as Ben previously mentioned and as detailed on this slide, our third-quarter core FFO per share results were $0.05 below our prior outlook. For our fourth-quarter core FFO per share, we provide a comparison between our prior outlook and our current outlook. The expected $0.09 decrease is primarily driven by $0.06 of lower NOI from the same-store portfolio, consisting of a $0.04 decrease in same-store residential revenue and a $0.02 increase in same-store residential operating expenses. The remaining $0.03 reflect lower expected earnings contributions from Lease-up NOI, Commercial NOI, joint ventures, and other stabilized NOI. Taken together, our three-tier results and revised fourth-quarter outlook result in an updated outlook for the full-year core FFO of $11.25 per share. With that overview of our updated outlook, I'll turn it over to Sean to discuss operations. All right, thanks, Kevin. Moving to slide 11. As Ben noted, we started to experience some softening in key revenue drivers during the quarter. In chart one, economic occupancy was generally consistent with our expectations in July and August. It fell below our previous outlook in September and has continued to be below our previous expectation for October. Similarly, rent change started to trend below our mid-year outlook in August, driven primarily by weaker move-in rents, which are depicted in chart three. While move-in rents softened across most regions, the deceleration was most pronounced in the Mid-Atlantic, Southern California, which was driven by LA, and Denver. In terms of underlying bad debt, while we ended the quarter close to our original estimate, we experienced an uptick in August, which contributed to the unfavorable revenue variance for the quarter. Turning to slide 12, we now expect same-store revenue growth of 2.5% for the full year of 2025, down 30 basis points from our mid-year outlook. The primary drivers of the reduction are average lease rate, which is estimated to account for 20 basis points, along with economic occupancy and underlying bad debt, which are projected to be about five basis points each. Our established regions are projected to produce 2.7% revenue growth, while the expansion regions are forecast to be modestly positive. As I mentioned on the previous slide, while the softness we've experienced has been somewhat broad-based, it has been most pronounced in the Mid-Atlantic and LA. The Mid-Atlantic has been choppy since the second quarter and has softened further during Q3 as the probability of a government shutdown increased. Given the shutdown has become a reality and is heading into a second month in a couple of days, we expect continued weakness in the region through year-end. In LA, job growth in the film and television industry has continued to be weak. It's been estimated that the number of film and television jobs in LA has declined by roughly 35% as compared to just three years ago. Stage occupancy, which reflects the percentage of time sound stages are being used by production companies in the region, has been trending in the mid-60% range recently, down from 90% plus levels just a few years ago. While new tax incentives were passed in July this year to support film and television production in California, any employment benefit from them won't likely be realized until sometime in 2026 or beyond. Moving to slide 13. As we start thinking ahead to 2026, while job growth has been below expectations recently, our portfolio is positioned to perform relatively well given two important factors. First, a very low level of new supply expected in our regions, and second, a lack of affordable-for-sale alternatives. New supply in our established regions is expected to decline to roughly 80 basis points of existing stock in 2026, which is not only less than half the trailing 10-year average, but also a level we haven't experienced since 2012. It's also roughly consistent with what occurred during the 1990s decade, which was a terrific time period for us. On the right side of slide 13, although mortgage rates have been trending down recently and home values have flattened out or declined in many regions, for-sale housing remains very unaffordable in our established regions. It still costs almost $2,500 per month more to own the median-priced home relative to the median apartment rent in these markets. Overall, while we don't have a crystal ball regarding job and wage growth for 2026, our portfolio is relatively well-positioned for any demand environment given the supply picture and the lack of affordable alternatives. As it relates to our portfolio and the setup for 2026 revenue growth, we're currently projecting our earn-in to be roughly 70 basis points. Additionally, we continue to expect improvement in underlying bad debt as we work through the backlog of cases in several established regions, and our various screening tools further constrain new entrants to the bad debt pool. The forecasted benefit for the calendar year of 2025 is approximately 15 basis points. For 2026, I would expect at least 15 basis points and likely more, given some of the underlying activity we're seeing across the portfolio. Third, while it won't likely be as strong as the last couple of years as we begin to stabilize our AvalonConnect offering for residents, we still expect another well-above-average year of growth in other rental revenue in 2026. Now I'll turn it to Matt to address our development activity. Thanks, Sean. Turning to our development activity, as shown on slide 14, our current lease-ups continue to perform better than our initial expectations, reflecting the conservative underwriting approach we take, where we do not trend rents and analyze every new start primarily on its current economics. Our development underway reached $3.2 billion by the end of the third quarter, was 95% match-funded, and underwritten to an untrended yield on cost of 6.2%. We opened several new lease-ups over the summer and now have six communities where there is enough leasing activity for us to update the rents and yields to current market. This $950 million in development activity is running 10 basis points above the initial projections, thanks to $10 million in cost savings and rents that are $50 per month higher than pro forma, generating a further lift to the value creation and earnings accretion these communities will deliver once they are complete and stabilized. We have another three communities, all in New Jersey, that are just starting their lease-ups, and rents at those assets are currently set at 2% above pro forma. The trend of development outperformance is likely to continue as all nine of these communities look to complete their lease-ups next year. The 13 communities that won't start lease-up until 2026 or 2027 should open at a time when there will be much less competitive new supply, as Sean detailed earlier. Turning to slide 15, we are strategically increasing our development underway when the industry as a whole is retrenching, taking advantage of the benefits of our integrated platform to build at a time when costs are lower and competition is more subdued. As we look to 2026, many of these favorable tailwinds should persist, although we are also mindful of the softening revenue environment and the associated impact on our cost of capital to fund new starts going forward. With that, I'll turn it back to the operator for Q&A. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Jana Galen with Bank of America. You may proceed with your question. Good afternoon. Maybe following up on Matt's development comments, just curious kind of how you're looking at the next crop of projects and properties, kind of how you're thinking about those, and maybe also comparing that with you guys were active on share repurchases in the quarter. If you could kind of talk to those capital allocation decisions. Sure, Jana. Thanks for the question. Let me start by just re-emphasizing the strength of our balance sheet. It's in terrific shape today and really does provide us with a ton of flexibility as we think about our capital allocation choices going forward. You think about a fairly rich menu of opportunities today. I'll start with reinvestment opportunities back into the existing portfolio. We're active this year on revenue-enhancing investments. See a similar set of opportunities as we look to next year. On the development side, as a baseline, we're thinking right now in terms of 2026 development starts in the range of $1 billion of starts. That's based on looking out on our pipeline and the set of opportunities. They tend to be that $1 billion tend to be in our established regions where operating fundamentals are a little bit more stable today. We are seeing strong construction buyout savings in those markets as well. Based on today's rents and today's costs, now those projects aren't starting today, but based on today's rents and those costs, yields on that $1 billion are in the 6.5% to high 6% range. A meaningful spread to where we can raise incremental capital. As we always do, we will flex and adjust as we need to. As folks know, we approve every development project by project. We have for sure raised the target returns that we're looking from our developers next year. Expected and we're hopeful that we'll be able to have another year of fulsome development activity. Given our balance sheet strength, we also have the opportunity to buy back our stock as we did in the third quarter in the extent that that continues to present an opportunity for us to invest accretively into our existing portfolio. That's the general setup where we sit today as we think about capital allocation choices. Thank you. Our next question comes from Steve Sakwa from Evercore ISI. You may proceed with your question. Thanks. I appreciate all the comments on the markets. Maybe for Ben, just as you talked about SoCal and then obviously the government shutdown won't go forever, do you kind of look at those markets maybe differently just on a long-term basis? Would your preference be to have lower exposure in both of those markets on a go-forward basis? Yeah, I'll start at a high level and then turn it to Sean to talk about what we're seeing on the ground, Steve. At a high level, we continue to advance on our portfolio allocation targets, which do have us, this goes back to a couple of years ago, looking to reduce our exposure in the overall Mid-Atlantic as well as in California. The other emphasis point that I would give to you is we've not only set targets at a market level, but we've also set targets within our regions. I'll use the Mid-Atlantic as an example here. On the heels of our D.C. disposition, our recent D.C. sales, we've been looking to increase our exposure in the Mid-Atlantic heavier to Northern Virginia based on a number of factors. On the heels of that transaction, we now have close to 50% of our portfolio in Northern Virginia. That's how we kind of continue to, it's a combination of looking longer term, but then also making shorter-term transaction activities. Sean, if you want to speak to what you're seeing on the ground more in both of those markets. Yeah, Steve, I think probably the right way to think about this, obviously the government shutdown was looming in Q3. It's become a reality. We've seen this story play through before. It's not a long-term sort of secular shift. For the most part, it tends to be cyclical in nature. As Ben noted, we're happy that we have kind of half our portfolio currently in Northern Virginia. As he noted, tilting it more towards Northern Virginia, which is holding up better than the district or some of the markets in Maryland. The big thing with the Mid-Atlantic that I think we have to all look at also is we delivered about, projected to deliver about 15,000 units of new supply in 2025. That's projected to decline to just 5,000 units across the entire DMV for 2026. To the extent we get to the other side of this and we get into a more stable and even modestly growing job environment, that's a pretty good setup for revenue growth when we get there. In Southern California, obviously it's gone through cycles in the past, broadly diversified economy. Certainly, the entertainment sector has taken a hit. Some of the tax incentives and other activities will likely bring it back at some point in the future. That is a market that, again, broadly diversified economically, which is generally good in terms of that diversification benefit, but tends to run at one of the lowest levels in new supply relative to stock of any of our regions in the country. That is likely going to be the case as we look forward over the next couple of years for such a massive market to see a pretty meaningful reduction in supply. I do think we're thinking about these both the short-term decisions, but not thinking too differently in terms of the long-term other than the rotation. Within the region as opposed to outside the region is the way I'd probably think about it. Our next question comes from Eric Wolf from Citi. You may proceed with your question. Thanks. It's Nick Joseph with Eric. Maybe just going back to the capital allocation answer earlier, you mentioned development starts maybe in the mid-sixes to high sixes. I think buybacks would be somewhere around the mid-sixes now. How does that compare to what you're seeing kind of real-time in the transaction market? Have going in yields changed at all given some of the weaker rent growth assumptions? As you think about that, is there also a difference within some of the different markets that you're looking at today? Yeah. Hey, it's Matt. I guess I'll take that one. The short answer is we haven't really seen any change in where the market is pricing stabilized asset sales. It's still kind of anywhere from the mid to high 4% cap rate range to low to mid 5% cap rate range depending on the geography. Even our own activity is kind of a good example of that. I'd put D.C., the district, on the higher end of that range. Suburban Seattle might be on the lower end of that range where we just sold an asset this quarter at a 4.6% cap on our numbers. It has not, it's been pretty sticky. If anything, as kind of long rates have come down a little bit, that's given buyers more confidence. I think transaction velocity, multifamily trades in Q3 were up pretty materially over Q3 of 2024. It is still selective in terms of the assets that are getting that bid, assets where there is reasonably good momentum in the rent roll, or at least they're not backsliding. So far, cap rates are holding firm and values. Our next question comes from John Pawlowski with Green Street. You may proceed with your question. Hey, thanks for the time. Matt, just a quick follow-up, and if I could fit two in. Interpret your comments on the D.C. cap rates accurate that those sold before dispositions were right around a low five cap. Kevin, can you provide more details on really what drove the repair and maintenance surprise? Are we running into labor availability issues, or what else went wrong in the R&M functions? Yeah. Hey, John. It's Matt. The cap rate on the D.C. sales was probably mid fives. There was a little bit of retail in the portfolio, so the residential cap rate was probably kind of low to mid fives, but I'd say the overall transaction was right around 5.5%. I don't know, Sean. Yeah, Sean, on the R&M side specifically, it's kind of a smattering of different things. What I'd say at a high level is we had a pretty good experience going through Q2, as Ben mentioned in his opening remarks in terms of the benefit. We expected a little bit of that to come back. Unfortunately, just kind of hit a bad streak in Q3 in terms of various accounts that came through on the repairs and maintenance side, slightly higher cost per turn in terms of the way the units came to us, some of them are skips and evicts, a higher cost. I wouldn't say there's one particular pattern there other than we just probably underestimated a little bit kind of where we'd land in Q3 relative to what happened in Q2. Okay, thanks for the time. Yep. Our next question comes from Adam Kramer with Morgan Stanley. You may proceed with your question. Great. Thanks. I think last quarter there was a discussion around lease-up at an asset or two in Denver, development assets. I was wondering if there was any update there for those assets. I guess just more broadly, if you sort of think about the performance of development assets and lease-up, how are they doing? As sort of some of them maybe from a year ago or nine months ago, as you get closer to sort of that annualizing the initial leases, what is sort of the performance in terms of people at renewal, given sort of the pace of lease-up? Hey, Adam, it's Matt. I'll start on that one. I think Sean can also provide some other detail specifically around our Denver lease-ups. In general, as I'd mentioned at the opening, our lease-ups continue to perform well. We're getting a little bit of outperformance on rent. Importantly, we are also seeing pretty significant cost savings. The good part about that is that stays with you forever. That reduced basis, the NOI will move around over time, obviously grow over time, but it'll have its ups and downs. The basis is forever. Just between the deal that we completed in the first half of this year and Annapolis, which we completed this quarter, and we have another completion coming next quarter in Maryland, just those three deals alone, there's probably $12 million worth of cost savings. On 1,000 units, that's $12,000 a unit in lower basis. That's pretty compelling. I would expect more of our yield outperformance on what we're leasing up now and into next year to come from the denominator than the numerator, but we're still getting a little juice on the numerator in general. Generally, we lease at a pace so that we can have the assets full within 12 months. Essentially, we don't wind up competing against ourself on renewals. We are very mindful of that. In general, we've been able to achieve that. There are a couple of exceptions, and the one in Denver is a good example of that where that submarket in Governor's Park there south of downtown is just littered with supply. Sean, I don't know if you want to share a little more on that and contrast that to some of the others. Yeah, just to give you some insights on Denver, we really had two lease-ups. One just finished and stabilized at the end of the third quarter, which is in Westminster. The other one is Governor's Park, which Matt referenced. On average, they did about 20 leases a month during the third quarter, which is a little bit below where we typically would like. Westminster was heading right to stabilized mode, so a little bit softer pace there. Concessions on the Westminster deal averaged about 150% of a month's rent, and it was more than two months' rent at the Governor's Park deal. Certainly a soft environment in Denver. I think that's pretty apparent to pretty much everybody nowadays. Fortunately, we have one that's stabilized, and the Governor's Park deal is approaching 90% leased at this point, so we're getting pretty close. The other piece of good news I'd add, and I think I mentioned this last quarter too, it just so happens a lot of our lease-up activity now, and as you look to next year, is in the suburban Northeast, which is still pretty strong. I think, as I mentioned, we have three lease-ups that are opening. They're leasing now in New Jersey, and a fourth one that's just finishing its lease-up. That market has been very solid. Great. Thank you. Our next question is from Austin Wurschmidt with KeyBanc Capital Markets. You may proceed with your question. Great. Thanks. Good afternoon, everyone. Just thinking through potential share repurchase activity from here, do you have capital lined up to fund that today, or would you need to source additional capital to fund future purchases? I'm just wondering if dispositions are still the best avenue for that today. Thanks. Sure. Austin, this is Kevin. A few points for you to consider here. First of all, from a balance sheet point of view, as Ben outlined, we're in terrific shape right now. As you can see from our earnings release, our leverage is 4.5x net debt to EBITDA. If you give us credit for the forward equity of nearly $900 million we have in place, that's essentially another half turn lower. We're kind of at around four turns. We have nearly full availability on a lot of credit. It's only $200 million+ in commercial paper. We have plenty of access to liquidity, and we have leverage capacity to the extent we wish to use it. From a share repurchase authorization standpoint, as you probably noticed in our earnings release, we essentially reloaded or reauthorized our share repurchase program. We now have $500 million of additional authority to be able to tap into here going forward. We have that set up as well. I think as kind of outlined by Ben, we're prepared to be nimble. We do currently plan on having roughly $1 billion in starts next year, but the decision of whether to engage in a buyback or development is not necessarily a binary one, as you even saw from us in the third quarter where we continue to be constructive on development and also bought back $150 million in shares. Not in a position to tell you today what we're going to do tomorrow, but we are in a position to act on a buyback if it makes sense. We recognize that our shares are attractive, but we also recognize that development is attractive. At a point of indifference, it also gives us fresh assets with a low CapEx profile and a strong growth profile. There are certainly strong merits to continuing to do development, a significant amount of development out of what's in our development book, but we have the capacity to engage in a buyback if appropriate. From the standpoint of how we think about funding it longer term, certainly we would likely tap available liquidity in the form of commercial paper to do so, which prices in the low 4% range today. Ultimately, as we think about framing how much we would do, we are limited by our gains capacity, which is in the normal year about $500 million of asset sales and an intention to essentially term out whatever we buy in terms of the buyback on a leverage-neutral basis with its proportionate share of recycled asset sales if that's the case, and incremental longer-term debt. We do feel like we have plenty of room to be constructive in there. It's not necessarily a binary choice, and we're prepared to be nimble and react to the appropriate market signals. Our next question comes from Jamie Feldman with Wells Fargo. You may proceed with your question. Great. Thank you. As we've been listening to the calls throughout the day, the number one incoming question is just how do these residential companies have visibility on where the market's going? First, for guidance through year-end, but also just to kind of get through to spring leasing next year. I know there's only two months left in a year, so that's probably an easier part of the question. As you think about your crystal ball, setting guidance, and even thinking about where this cycle could go before it gets better, can you point to some of the things that are giving you confidence or that people should be thinking about or that you're thinking about and watching? Every company is certainly taking numbers down or their outlooks down given September and October. Jamie, I can start. Emphasize a couple of different elements. One, sort of our portfolio positioning, for sure, emphasizing the low levels of supply that we're seeing now, and particularly as we get into next year. Sean mentioned it, but just to reiterate, we don't need a ton of incremental demand given that supply backdrop to see some strong results as we get into the next year. As you think about the overall job environment, the hope is that we're headed towards a period where there's increased certainty on the macroeconomic side, increased certainty around where tariffs are going to land, the end of the government shutdown. Increased certainty, increased confidence. The rate dynamic potentially also leads to further investment, but we can kind of shift out of our current environment to there, and you lead to businesses further investing and also investing in their workforces. That's sort of the other side of this dynamic for us as we think about the job picture. Our next question comes from John Kim with BMO Capital Markets. You may proceed with your question. Thank you. I wanted to talk about bad debt, which came in a little bit higher than you were expecting. I just wanted to know what the potential source of that was and if you have a disproportionate amount of bad debt that came from recent development lease-ups. Yeah, John it's Sean. The missing bad debt we referenced is in the same store pool, so the development assets wouldn't be in that book. It's really a relatively modest number. It's about five basis points different in terms of what accounted for the variance. In a book like that, when you're dealing with court times and dockets and when the sheriff's going to show up and all that kind of good stuff, five basis points is a pretty tight margin of error. Obviously, it was a negative variant. Overall, we feel good about where we're headed with bad debt. I can tell you that as you look at where we are now in terms of the number of accounts that we need to work our way through compared to the end of 2024, we're down 20%, 25%. It's moving in the right direction. It's just a matter of kind of processing people through. I would expect, as I mentioned in my prepared remarks, as we look forward to 2026, if we're getting about a 15 basis point benefit this year, I would expect at least, if not likely more than that benefit in 2026, just based on what we're seeing as different cases work their way through the system and our screening tools get more and more sophisticated in terms of limiting the number of new entrants to the pool. In general, I know it's not part of this figure with the same story. Do you tend to get higher bad debt on lease-up communities? Not necessarily, no. If it is, it can be an outlier community here or there. It is really kind of market-specific in terms of the type of customers you're dealing with and tools you use. In general, it's not necessarily an outlier across the development book as compared to the same store pool. Okay, thank you. Yep. As a reminder, if you'd like to ask a question, you may press star one on your telephone keypad. Analysts are also welcome to ask two questions. Our next question comes from Rich Hightower with Barclays. You may proceed with your question. Hey, guys. Good morning. The operator made me freak out there that I didn't star one earlier, so I'm glad I'm in. Just to follow up on the jobs discussion, as you're having conversations with tenants in the D.C. market specifically, what are the chances that there's another shoe to drop with respect to sort of delayed impacts from layoffs? If someone's laid off, there's usually a lag before they think about vacating the unit or stop paying rent or things like that. Secondarily, there's been a lot of headlines around weakness in the entry-level job market specifically. That's not a D.C. comment. That's broad-based. How does that affect your portfolio more broadly? I guess it's kind of a two-parter. Yeah, Rich it's Sean, I'll start, and others can add as needed. As it relates to the D.C. region specifically, what I'd say is likely any impact that came through related to DOGE specifically and some of the activity that happened earlier this year. We probably would be feeling that about now, just given normal sort of severance periods, notice periods, things like that. There's probably an element of that embedded in the current environment. Of course, some of those people may have left three, four, or five months ago. I think the question now is, as we turn to 2026, as I mentioned earlier, the supply picture looks drastically better in terms of the reduction in supply. Getting down to like 5,000 units is not a number we've seen in D.C. in a very, very long time. On the demand side, if we can clear through the shutdown and get back to kind of normal business, I think we'll be in much better shape. The question really is, what happens with some of the furloughs? Do they turn into permanent reductions, etc.? We have not heard that, but certainly that's a possibility. We just need better visibility coming out of the shutdown in terms of the potential impact. If there is one, then we would lag that for whatever time period is appropriate, six, seven, nine months. As it relates to your second question on the AI side, we feel pretty good about our overall position. We're not necessarily—the average age of our residents is in the kind of mid-30 range. It's not fresh out of college or even in the young 20s or mid-20s, which is where a lot of the focus is lately in terms of kind of new entrants into the employment base and the types of jobs that they perform being likely more automated. The other thing I would say is, particularly in some of the markets that we're in in the coastal regions, the pretty high-value-add jobs. When you think of the people that are coming into San Francisco or Seattle, as an example, more and more of the demand for that activity is people with the skills to help propel AI forward. To give an example, I was in San Francisco not too long ago in Seattle, and when you talk to our teams on the ground, people coming in looking for new apartments, propelling the momentum you see in that market is people coming in heavily in the AI sector and other sectors, highly educated. Coming potentially from somewhere else or within the region. We feel good about the high-value-add nature of the jobs in those regions still likely being the winning formula as opposed to maybe the lower-value-add jobs that might go away in some of the service industries, back office operations, customer service operations, things of that sort. Great. Thanks. Yep. Our next question comes from Alexander Goldfarb with Piper Sandler. You may proceed with your question. Hey, good afternoon. Good afternoon down there. Two questions. The first is on the asset sales, the $585 million in the quarter. I think all of those were developments, and it was a slight economic loss. Just curious, you guys speak about the value creation, so the economic loss definitely jumps out. Is there anything specific? Was it one or two of these projects that drove that, or in aggregate, just want to better understand why there was a loss on the sale? Yeah. Hey, Alex, it's Matt. Those particular sales, actually, two of the six were acquisitions, were Hearthstone assets. Four of the six were assets we developed. It was a mix. Those particular communities, it was really driven by two where there was a material loss relative to our economic basis. One was an asset we developed, was Brooklyn Bay, which was kind of an unusual sub-market pocket in South Brooklyn, not a very large asset, less than a $100 million investment, but that one was one that wasn't one of our better investment decisions. The other one was one of the assets in NoMa that we got from Archstone. NoMa has just been one of the uniquely difficult sub-markets in the district and really anywhere in our footprint, really, ever since we bought it. We bought 60+ assets from Arch stone, and most of them have been pretty good investments. Obviously, that whole platform investment was very favorable for us. Once in a while, in a portfolio that size, you're going to get one or two that don't do so well. That was kind of what happened there. I'll tell you, even I was looking at it today, even on the $800 million in dispos that we have for the entire year this year, which includes this $600 million, the unlevered IRR on that whole basket of 2025 dispos is in the mid-8%. It's still pretty good investment returns given that. There are years when certainly, I think on average, we're probably in the low double digits, but that's still a pretty good investment return. I think, as you know, our long-term track record has really been second to none, I think, in the REIT space, at least in the multifamily space, for an awful lot of years. Okay. Yes. Alex, the other element I just add on to Matt's commentary is these are a set of assets that have been on our target list for a while now. We're waiting for asset values to recover to a certain degree to be able to execute. In any portfolio, you're going to have some low performers, but we really think about this as pruning those assets out, redeploying that capital into higher growth opportunities. Okay. The second question is, it definitely seems like in REIT land, people are discovering, nuancing the markets more, right? Like you might want very west side LA or east side in Seattle or different, more Northern Virginia. As you look at your development pipeline and your land options, have you done, has there been a big culling where you're like, "Hey, some of those sites that we originally picked, they're not in sub-markets we want anymore"? Just trying to understand better how the, as you start the next round of projects, how that has evolved versus what your land bank or land options were a few years ago. Yeah. Alex, I would say we've been pretty mindful of that really for the last several years. If you look at our development rights book today, it's almost all—it's both bottom-up and top-down, right? We're looking for the best risk-adjusted returns, and we are looking to generate value creation on every deal we do, but we are also looking to develop assets that we think are going to be good long-term performers in our portfolio. We do actually incentivize that. We will demand a higher target yield if it's in a sub-market we think is a little bit weaker. We've been kind of tacking that way for a while now. To give you another example, Ben mentioned within the Mid-Atlantic, more focused on Northern Virginia. Within Southern California, we've been really focused on San Diego, which is almost an expansion region for us. This quarter, we just started a very big project in San Diego. We have two deals under construction in San Diego now, two more development rights. We haven't started a development in LA County for five or six years. Our focus is completely on San Diego, Orange County, and then Ventura in Southern California as an example. In Seattle, same thing. Our portfolio is heavily east side. Our development focus has been entirely on the east side really for the last seven or eight years. Alex, I'd flip your question, which is, in an environment where others are pulling back and don't have our capabilities, these are the windows we actually can move on our best real estate, structure them the best way. Think about the amount of land that we actually have investment in today, very, very low. These also tend—this is the environment also. This cohort of projects tend to be some of our most profitable, both for the sort of the upfront deal striking that we do, as well as for those projects opening a couple of years from now, facing less new supply. Okay, thank you. Our next question comes from Handel St. Juste from Mizuho Securities. You may proceed with your question. Hi there. This is Mike on with Handel at Mizuho. My question is, does the D.C. DOGE job cuts multiplier effect on the DMV region give you less confidence in market rent growth going into 2026? How does that potentially impact the acquisition property and your portfolio in that region? Thank you. Mike, this is Sean. Two things. One is in terms of the ripple effect. As I mentioned earlier, the DOGE impact, if anything, is probably being felt around now, given the lag effect between the time people were noticed and when they actually departed. If there was a ripple effect, we probably would be seeing more of that now. I think it's a little uncertain at this point that we've actually seen that. On your second question, we have not acquired anything in this region in quite a long time in terms of assets. Thank you. Is there another question there, Mike? That's all from me. Okay, thank you. Our next question comes from Michael Goldsmith with UBS. You may proceed with your question. This is Amy. Are the remaining deliveries and lease-ups from the supply cycle more concentrated in urban or suburban areas? If we do see interest rates continue to tick lower and development activity pick back up, do you think developments would be more likely to be concentrated in urban or suburban locations? Thanks. Hey, Amy. It's Matt. As you look out over the next year or so, there's still more deliveries coming next year as a percentage of stock across our footprint in urban sub-markets than suburban sub-markets. There are a couple of regions where that's not true. I think specifically Northern Cal and maybe New York. In general, in almost all of our other regions, we still expect a bit more supply, urban than suburban. The gap between the two is narrowing. It was wider two years ago. It was a little bit wider this year. Actually, I'm a little surprised there's still urban supply coming. As you look out beyond that, where the next slug of starts might be, the economics on development certainly work better in suburban sub-markets today. That's what we're finding. I think that's what the market is finding. However, entitlements are more difficult, at least in our established region, in the suburbs. You have to have been at it for a while if you're going to have a deal ready to go. The other thing that we have half an eye on, I'd say, is in many of the urban cores, the cities are now trying to encourage conversion, adaptive reuse of outdated office to multifamily, and they're actually providing incentives to do that. It is possible that if that starts to make sense, that supply could materialize fairly quickly because those are existing buildings that would be converted with a shorter build cycle time. Thank you. Our next question comes from Alex Kim with Zellman & Associates. You may proceed with your question. Hey, guys. Afternoon out there. Just a quick one for me. We saw the spread between renewals and new move-ins widen again this quarter, and part of that's due to the seasonal trend this time of year. Curious if you have any thoughts on that dynamic and what that means for rent growth for both front-end pricing and renewals moving into 2026. Yeah, Alex, it's Sean. Yes, fair point. I mean, typically, you would start to see a seasonal shift between the rent change for renewals versus move-ins at this time of year. Nothing new on that front, other than on the move-in side, as I indicated in my prepared remarks, it has been weaker on the move-in side in terms of rent change than we would have anticipated, reflecting some of the deceleration that we've talked about in some of the markets that I identified earlier, like the Mid-Atlantic, Los Angeles, and Denver. Certainly a little more meaningful than seasonal in those particular markets. You would expect that to continue likely through year-end. You don't start to see any kind of shift in that in a material way until you get to the spring leasing season and asking rents really start to move up through that period of time, typically. That's what would normally occur. At this point, we haven't provided a forecast for 2026, but that would follow the historical norm. Got it. Appreciate the color there. Yep. This now concludes our question-and-answer session. I would like to turn the floor back over to Ben Schall for closing comments. All right. Thank you, everyone, for joining us today. We look forward to connecting with you soon and at Nareit in early December. Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. Please disconnect your lines and have a wonderful day.