Welcome to the Elme Communities Third Quarter 2024 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Amy Hopkins, Vice President, Investor Relations. Amy, please go ahead. Good morning, and thank you for joining our Third Quarter Earnings Call. Today's event is being webcast with a slide presentation that is available on the investors' section of our website and will be available on our webcast replay. Statements made during this call may constitute forward-looking statements that involve known and unknown risks and uncertainties, which may cause actual results to differ materially, and we undertake no duty to update them as actual events unfold. We refer to certain of these risks in our SEC filings. Reconciliations of the GAAP and non-GAAP financial measures discussed on this call are available in our most recent earnings press release and financial supplement, which was distributed yesterday and can be found on the investors' page of our website. Presenting on the call today will be Paul McDermott, our CEO, Tiffany Butcher, our COO, and Steven Freishtat, our CFO. With that, I will turn the call over to Paul. Thanks, Amy. Good morning, everyone, and thank you for joining our call on Election Day. This is an exciting day for our region, and we look forward to watching the results unfold. I hope you all have either voted or plan to do so. I will begin today's call by discussing the main factors driving our performance in our markets, including supply and demand dynamics and their implications for Elme. Tiffany will cover our operating trends and growth initiatives, and Steve will discuss our financial results and outlook. During the quarter, demand remained strong across the Washington Metro and Atlanta Metro regions. Absorption in our markets was the highest it's been since the fourth quarter of 2021, driven by wage growth, stable employment, immigration, and resident retention. Wage growth has been outpacing rent growth for nearly two years in our markets, contributing to stable financial conditions for renters. Employment data shows that job growth, on average, is stronger for middle-income wage earners relative to higher-income segments in our markets, which is a favorable trend for Elme. Additionally, Elme's largest employment industries are either adding jobs or maintaining jobs, resulting in a stable base of employment for our residents. Immigration, which is a more pronounced demand driver in the Atlanta region than the Washington region, is driving record levels of absorption. Atlanta Metro immigration is expected to have increased by over 20% by year-end 2024 compared to 2023, and the region is expected to outpace the U.S. through 2029, with 5% population growth in the 20 to 34-year-old age bracket, according to Oxford Economics. Resident retention also plays a significant role in demand dynamics, and our retention rate remains very strong. Even if home purchasers return to a more normalized pattern, our value-oriented resident base tends to be stickier, with an average tenure of about 2.7 years. Overall, we believe that demand outlook for our value-oriented price points is positive both in the near and long term. Now, turning to supply. The impact of supply on our portfolio differs across our markets, as our Washington Metro communities are facing very low competition from new supply, especially in our Northern Virginia submarkets, while our Atlanta communities are feeling more of an impact. In the Washington Metro, annual net inventory growth was a healthy 1.8% during the third quarter, and annual net inventory growth for our Northern Virginia submarkets was just 1.1%. Looking ahead over the next year, Northern Virginia's inventory growth is expected to remain at 1.4%, which is well below the U.S. average of 3.1%. In addition to low supply overall, only a very small portion, or 4%, competes with our communities on price. For our Atlanta submarkets, net inventory ratios remained elevated at 4% during the third quarter. Additionally, we are seeing normal delays in deliveries, with some delivery estimates that were previously anticipated to occur in the fourth quarter now expected in early 2025. While half of our Atlanta submarkets had no deliveries over the past year and only 10% of new supply in the third quarter was competitive with our communities, supply is having a more widespread impact as rent compression and concessions have caused temporary disruptions to typical demand pools. On average, we do not expect supply to increase above the current level in our submarkets. However, we expect the curve to be relatively flat between the third quarter of 2024 and the first quarter of 2025. In 2025, two-thirds of our Atlanta submarkets are projected to have net inventory ratios that are less than 1.7%, and we expect the overall level of demand relative to supply to improve throughout the year. Units under construction and new starts continue to decline significantly across our Atlanta Metro submarkets, pointing to a very low supply in 2026 and 2027. Given the improving supply dynamics and favorable demand trends, our medium and long-term outlook for Atlanta is strong. Furthermore, over the near term, we expect to deliver marked improvement in NOI growth in Atlanta, which Tiffany will discuss in more detail. And with that, I'll now turn it over to Tiffany. Thanks, Paul. Overall, our portfolio's fundamentals as we approach the winter months are in line with our expectations. During the quarter, we generated stronger-than-expected performance from our Washington Metro communities. However, we experienced slower-than-expected improvement in Atlanta. As a result, we're trending towards the midpoint of the same-store NOI growth assumption included in our guidance. Washington Metro occupancy has been a bright spot this year, and we captured sequential occupancy growth for our same-store portfolio, driven by very strong performance from our Northern Virginia communities. Retention rates remain above historical levels, with strong renewal rates. We expect to end the year in a good place with stable trends across our portfolio and a strong revenue growth outlook into 2025. Touching on a few operating trends during the quarter, effective blended lease rate growth was 2.1% for our same-store portfolio during the third quarter, comprised of renewal lease rate growth of 4.5% and new lease rate growth of negative 1.5%. New lease rate growth was negative 3.1% for our same-store portfolio in October, and renewal lease rate growth was 4.4%. We're signing renewals at an average rate of 4%-5% for November and December lease expirations, in line with our expectation for seasonal moderation at lease rates through year-end. Same-store retention has remained very strong at 66% during the quarter, up from 61% in the third quarter of last year, underscoring the longer-term nature of our resident base and our heightened focus on customer service excellence. Additionally, the percentage of move-outs driven by home purchases remained very low at just over 7% for our total move-outs for the quarter. Moving on to occupancy, same-store average occupancy increased 60 basis points sequentially to 95.2%, driven by strong demand in the Washington Metro, offset in part by the impact of new supply and the timing of evictions in our Atlanta portfolio. Same-store occupancy trended down toward the end of the quarter following the anticipated August peak and an increase in the pace of repossessions, which will have a positive impact on bad debt. In October, occupancy trended in line with our expectations, and we ended the month at a strong 95.1%. Turning to bad debt, while we're encouraged by the trend across our Washington Metro communities, which is nearing normalized levels, in Atlanta, we expected to see more improvement in the second half of this year. Reducing bad debt is a top priority, and we have recently made additional process changes in Atlanta, in addition to the credit protections and income verification processes we implemented earlier this year. On a positive note, we've seen the pace of evictions improve over the last 45 days, as the resources needed to utilize House Bill 1203 with off-duty officers appear to finally be in place. Additionally, new delinquencies improved in October, resulting in lower month-over-month bad debt. We anticipate modest improvement in the fourth quarter, and we now expect bad debt for 2024 to remain relatively flat year-over-year. As a result, we anticipate a greater benefit from lower year-over-year bad debt in 2025. Turning to renovations, during the third quarter, we completed renovations on 188 units, generating an average ROI of approximately 17%. We expect to meet our target of 475 full renovations and 100 home upgrades for the year. With nearly 3,000 homes in our renovation pipeline, we have more than enough runway to continue driving renovation-led value creation well into the foreseeable future. Moving on to operational initiatives, we remain on track to achieve our targeted NOI and FFO upside this year, driven by smart home technology, fee strategies, and payroll savings, following the launch of Elme Resident Services, which centralizes resident account management and renewals. Beyond our upside target through 2025, we are rolling out managed Wi-Fi across our portfolio in phases, starting with approximately 2,500 homes in phase one. We began the installation process in October and expect to substantially complete it by year-end. Given that resident adoption is a gradual process, we anticipate approximately $300,000-$600,000 of recurring NOI in 2025 and $1-$1.5 million once phase one is fully adopted over the next two to three years. And with that, I'll turn it over to Steve to cover our 2024 outlook and balance sheet. Thanks, Tiffany. Starting with guidance, we are tightening our 2024 core FFO per share guidance range to $0.92-$0.94 per share, maintaining our midpoint of $0.93 per share. We are tightening our same-store multifamily NOI growth assumption to range from 1%-1.5%. We now expect a non-same-store multifamily NOI to range from $5.35 million-$5.75 million, which reflects a lower midpoint due to rental pressure from new supply and a higher-than-expected tax assessment, which is under appeal. We are tightening the range and raising the midpoint of our other same-store NOI assumption, which consists of Watergate 600, to range $12.5 million-$12.75 million. Interest expense is now expected to range from $37.5 million-$38 million, which reflects a slightly lower midpoint due to the anticipated impact of interest rate cuts on our line of credit. Turning to our balance sheet, annualized net debt to Adjusted EBITDA was 5.6 times at quarter-end, in line with our targeted range, and we continue to expect our leverage ratio to finish the year in the mid-5 times range. Our liquidity position remains strong, with more than $330 million, or 65% of capacity available on our revolving credit facility at quarter-end. With no secured debt and only one $125 million maturity prior to 2028, our balance sheet remains in excellent shape. Turning to ESG, I am pleased to share that we published our ESG report last week, showcasing our dedication to being an ESG leader within the Class B multifamily space. The report outlines our ongoing progress toward our efficiency goals and our increasing commitment to the health and wellness of our residents. In summary, our third quarter results were in line with our expectations, and we continue to trend toward the midpoint of our Core FFO guidance. While we would like to have seen more compression in bad debt at this point in the year, achieving our guidance is not dependent on significant improvement in our Atlanta performance in the fourth quarter, thanks to continued strength from our Washington Metro portfolio. Looking forward, the stage is set for our Washington Metro portfolio to deliver another solid year of growth in 2025, and we expect to deliver meaningful improvement in our Atlanta performance next year, with increasingly favorable supply-demand dynamics thereafter. And with that, I will open it up to Q&A. Certainly. 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. One moment, please, while we poll for questions. Your first question for today is from Anthony Paolone with J.P. Morgan. Hey, guys. You have Nahom on for Tony today. Maybe just quickly, on bad debt, you guys mentioned that delinquency improvements in Atlanta were going slower than anticipated. I guess, could you guys speak to where things currently stand in Atlanta and the rest of the portfolio, and I guess how much of a tailwind you guys are expecting going into 2025 from improvements there? Absolutely. This is Tiffany Butcher. Yeah, starting off at the portfolio level, bad debt was approximately 2% of revenue in the month of October, and that was really driven by a normalized bad debt in our Washington, D.C. portfolio of just below 1%. In Atlanta, we did experience higher-than-anticipated bad debt in the third quarter, driven in part by the longer eviction timelines that have been a challenge in the Atlanta market throughout the year, and due in part to the impacts of new delinquency. The good news is that we have seen a shift in both of those factors over the last 45 days, as we're seeing a faster processing of evictions, as the structure needed to implement Georgia House Bill 1203 is now in place, which is allowing off-duty officers to execute evictions. So that pipeline is moving much faster. And we've also seen residents start to proactively move out in advance of their eviction timelines, which is also helping to speed up getting back those units from highly delinquent residents and being able to re-lease them to rent-paying tenants. Additionally, we've also continued to adapt our internal processes and procedures, and we proactively work with residents to help them get current on rent payment, which has contributed to the decrease in new delinquencies and overall reduction in bad debt that we experienced in the month of October. However, I will say that given the typical seasonality in bad debt, we don't expect to see a meaningful improvement in bad debt in the fourth quarter, and we expect to end 2024 in line with the prior year. We do expect the momentum that we saw in October of accelerating eviction timelines, coupled with our internal process and procedure changes, to really set us up for continued improvement in bad debt as we head into 2025. Got it. Okay. And maybe also on Atlanta, is the low occupancy you guys experienced during the quarter, is that more of a function of those evictions and bad debts, or is it more so due to elevated supply deliveries? And I guess, are any concessions also being offered in your Atlanta portfolio? Sure. You know, I would say that in terms of the occupancy that we have seen in Atlanta, it is a combination of both supply-demand dynamics in our markets. Grant can speak a little bit more in a second to some of the changes that we're seeing as we head through the peak supply in Atlanta. But it's also obviously contributed to the eviction timelines that we've had. And as we said, that does put a near-term pressure on occupancy, but it's good for the long term as we're able to release those units to rent-paying tenants. So I would say in terms of the occupancy being in the low 90s, it's a combination of both of those two factors. And then you asked about concessions. Overall, I would say at the portfolio level, concessions in the third quarter remained flat to the second quarter. We are offering concessions on about 14% of signed leases with an average amount of kind of less than a week if you blend that across the entire portfolio. If you look, though, specifically kind of market by market, Washington, D.C. continues to be a very strong market with great supply-demand dynamics, so we have less need for concessions. It is much more sub-market by sub-market where there might be a small need in the Washington Metro area. If you look at our third quarter new leases, we offered concessions on approximately 27% of new leases in the D.C. area, but an average of only 4.6 days. So D.C. remains a non-concessionary market. In Atlanta, the new leases, we saw about 58% of new leases receiving some sort of concession in the third quarter, averaging approximately 12 days. So there is definitely a little bit more of a concessionary impact in the Atlanta market, really driven by where we are in the supply-demand dynamics. I don't know, Grant, if you want to add just a little bit of color on the overall supply-demand dynamics in Atlanta? Sure, Tiffany. Tony, this is Grant. As Paul said in the prepared remarks, we do see gradual improvement in the net inventory ratios in the greater Atlanta area. It will be a slow improvement. We do think numerically, if you look at the data from the third-party folks, the net inventory ratio is peaking in Atlanta this quarter, but it will be a very slow and gradual move through fourth quarter and first quarter and really starts to accelerate next year when you have sort of peak leasing season in the spring and summer, and that's when it really starts to move and then continually moves down and sort of accelerates throughout 2025, and we think that that really sets up for the future. Got it. Thanks, guys. Your next question is from Jamie Feldman with Wells Fargo. Great. Thanks for taking the question. I guess just to start, just wondering if you think there might be any kind of slowdown in the DMV that puts the year at risk, or maybe a better way to ask it. Can you talk about what's implied in your guidance for blends and occupancy in the fourth quarter? Sure. Jamie, this is Tiffany. I can speak to kind of what we're expecting in the fourth quarter and what's implied in our guidance. First of all, occupancy has continued to remain incredibly strong in the Washington Metro area. We've been averaging over 96%. We are expecting occupancy to trend down slightly in line with typical seasonal trends. So we expect our occupancy to end in the kind of high 95% range as we head into year-end. We also expect our retention to continue to remain strong as it has all year. In terms of blends in the DMV, we're expecting between 0% and -3% for new lease rate growth. We're expecting our renewals to be in the 4.5%-5.5% range, which puts your overall effective blends at 2%-3% in the DMV. Okay, and then maybe the same question in Atlanta. Yeah, sure. So if you think about Atlanta, we have trended in the occupancy range in the low 90%. We do expect to remain in that range. As I mentioned before, we are seeing a faster pace of evictions. So depending on the timing of when some of those evictions hit, we could end up seeing a slight timing impact of when those evictions happen that could put some near-term pressure on occupancy, but obviously, that will be a strong positive for the portfolio overall that will help to bring down bad debt. And then if you think about blends, starting again with our new lease rate blends, we're expecting to be in the high negative to low negative double digits for new lease rate blends, really reflective of the competitive dynamics in the market right now. But we still expect to have very strong renewals at 2-3.5%. So overall blends in Atlanta for the fourth quarter, we're expecting to be -3% to -5%. Okay. Just to confirm, so the new, you're saying what, like minus 10-ish or maybe higher? Yeah, probably. I would say probably - 9% to - 13% for the fourth quarter. For the full year, it would probably be like - 8% to - 2%. Okay. And then if you were to combine them both, what do you think the total portfolio looks like? For the fourth quarter, I would say the new lease rates are going to be - 2.5% to - 3.5%, renewals 3.5% to 4.5%, so blends, say, 0.5% to 1.5%, and then if you want to kind of translate that to what that means for the full year, new would be approximately negative 2.5% to, say, positive 50 basis points. Renewals would be 4.25% to 5.25%, so blends would be 1.75% to 2.75%. Okay. That's helpful. And then I think you had like a 10.5% sequential OpEx increase in Atlanta, if I read that right. Is there something behind that, or can you talk through what that's going to look like going forward? Yeah. Jamie, this is Steven. I can talk about so Q3 for OpEx in Atlanta. Really, it was three things they'll talk about. The first is taxes, which we've talked about before. We had two reassessments in Georgia. They got closer to the purchase price. They're in a three-year cycle. So that was the biggest driver for the tax increase. But in addition to that, kind of if you look at the year-over-year increase in taxes, we saw some favorable tax appeals last year in the third quarter. We're still waiting. We didn't receive any here in 2024 in Q3, but we're still waiting on a couple of appeals that we're expecting will hit in the fourth quarter. So there's some timing difference there that should net up by year-end. The second one is insurance. We, of course, had a very large insurance renewal September of last year. That kind of finished playing out in the quarter. We did our insurance renewal, September 1st, for the next 12 months and had a much lower increase going forward. We only had. It's a 4% increase. So going forward, that should obviously be more muted on the insurance increase. And lastly, we saw a number of evictions in the quarter and saw an increase in certain OpEx, notably legal fees and trash costs related to those evictions. Okay. That's helpful, and I guess just big picture on expenses, as you think about 2025, do you think your expense growth overall for the portfolio will be higher or lower than it was in 2023? Sorry, 2024. Yeah. And Jamie, we'll give our full guidance in February, but thinking about kind of the trajectory of expenses, and really, it's a couple of the things that I just hit on in the Q3 for Atlanta. So we think about taxes. We had those two large increases from the reassessments. We don't see a three-year cycle, a community like that hitting us in 2025. So we think that the tax increases will come down a bit. On insurance, I just talked about the 4% increase, much lower than the increase we had before. So we see non-controllable growth certainly coming down, and we see that coming down more so than controllable growth changes. Okay. And then last for me, just with no acquisitions year to date, just kind of want to get your latest thoughts on expansion into additional markets and some of your strategic initiatives, whether it's selling Watergate or entering new markets. You think you're on hold for a while? You're waiting for market conditions to open up. Just kind of what are your latest thoughts on portfolio repositioning and investments? Jamie, it's Paul. Let's start out with Watergate. We had a good quarter there. And just as a backdrop, Watergate has five and a half years of WALT on it, and it's currently sitting at the end of Q3 at 86% occupancy. We had four leases executed during the third quarter for 13,000 sq ft. Three of those were renewals. One of those was an expansion. And those averaged rents between $55-$67 a foot. None of those had TI allowances associated with them. The expansion was a six-year deal, and that had 12 months of free rent associated with it. But we're very happy with the way that those executions took place, and we expect to close the year on the Watergate at 85% occupancy. As we've said in the past, Jamie, we'll obviously look at opportunistically monetizing the asset. It is not a long-term hold for us. And we, quite frankly, believe that the D.C. market is coming back. It has progressively gotten better. We have seen more transactions taking place in 2024. So again, we will provide more insights on that in February when we give 2025 guidance. But right now, we're just pleased with the leasing execution that our team is doing. In terms of expansion markets right now, Jamie, we continue to favor the Sunbelt markets. I think that when we evaluate opportunities, I think some of the hallmarks of markets that we like to get into are the markets have outsized job creation. They have wage growth and immigration in the future. And those are really what we try to allocate capital towards. We're going to be probably more specific about expansion markets in our February guidance. But as I said, we do favor the Sunbelt. And we just, candidly, stepping back, we'd like to see more transaction activity than we've seen so that we have more data points. We have seen a bit of a pickup in the fourth quarter in terms of available transactions, even in our current markets, with obviously D.C. because of the fundamentals and how well D.C. is doing, D.C. leading the country right now. But our goal would be to continue with our geographic expansion. And we'll be able to, again, talk more about that at the end of the year, and also as we have more data points to collect on those markets by year-end. Okay. Very helpful. Thank you. Your next question for today is from Ann Chan with Green Street. Hey, this is Anne with Green Street. Do you expect total capital expenditures to increase, hold steady, or decline in the next few years? Yeah, Anne, so from a CapEx perspective, I think our CapEx is this year and probably next year driven really by a lot of the initiatives that we're doing. And I would mention a couple of things. One is the renovations that we've done. I think we're going to do about 475 this year. Next year, we might do slightly more than that, but that spend, I would expect to either maintain or go slightly up. Another thing that might be an increase is the managed Wi-Fi, which we're rolling out to a number of communities in the fourth quarter. We're looking at additional communities in 2025. And those returns are in the 30%-40% range, which Tiffany talked about, some of the additional NOI that we're going to get next year. So as we look to do some of our ROI initiatives, I think that is going to drive the CapEx over the coming years. Great. Thanks. And just one more for me. Going back to the bad debt in Atlanta, where do you think levels are going to ultimately stabilize at? Great question, Anne. I would say if we're going to give really detailed guidance on bad debt in February and kind of where we see the trends through 2025. I think if you are looking for kind of where normalized levels of bad debt could be, if you look to kind of pre-COVID, it was probably more in the 2-2.5% range. But I think that it'll take time in the market to get back to those kind of normalized bad debt levels going forward. But we do think that there is going to be significant improvement in our bad debt from where we are today through next year. And we'll give detailed guidance on that in February. Great. Thank you so much. Your next question is from Cole Bardawil with Wolfe Research. Hey, guys. Thank you very much for the time. One question I just wanted to ask on, with everything happening in the election today, I was just curious if you've seen any changes historically in demand trends in the months after an election, just specifically with the D.C. metro market, or is it kind of business as usual? Cole, this is Paul. A lot of that obviously depends on the outcome of the election. The one word we have always used around here is alignment. When you have alignment, that tends to drive more legislation, more jobs, and more localized demand for office space. So if we do see, and that is House, Senate, and the White House, if we do see that, we would expect to see a pickup in demand for not only office space, but probably a lot of the product types because they all draft off of one another. But again, I think that the alignment is critical for any type of movement. If there isn't alignment, we traditionally you may see a pop initially just on staffing changes and some type of overflow where you have duplicative efforts. But we don't really see that being a long-term value proposition for D.C. office. Okay. Got it. Thank you. And then just kind of one specifically I had on Atlanta. I saw that your occupancy was up sequentially quarter over quarter, 130 basis points. So it seems like it's trending in the right direction. Do you expect that kind of to continue going forward? And also, are you prioritizing just occupancy over rate currently? And how are you guys thinking about that specifically? Great question, Cole. I would say starting with the last part of your question, we are definitely prioritizing occupancy over rate growth at this point. We feel like that is the best way to drive NOI in the current market environment. So we are definitely prioritizing renewals and retention and driving occupancy growth through the year. As I mentioned earlier, we are in the low 90s. I would expect that we will stay in the low 90s through year-end. As I mentioned, there could be some near-term impacts associated with just the timing of evictions. But that would obviously overall be a good story because we would be getting those units back and able to release them to rent-paying tenants. So as we think about kind of where we expect to end the year, it would most likely be in the low 90s. We do see occupancy trending up as we head into 2025, particularly as we get into our spring and summer leasing season. And so we are absolutely prioritizing occupancy at this point in time and really focused on driving our occupancy growth and bad debt improvement throughout the portfolio. Okay. Awesome. Thank you very much, guys. Your next question is from Michael Gorman with BTIG. Yeah. Thanks. Good morning. Tiffany or Grant, I'm curious as we think about 2025, obviously you talked about heading into the fourth quarter, but then the improvement in the supply picture and the net inventory ratios. Should we expect new lease growth to inflect in 2025 and turn positive? And kind of what are your thoughts there in terms of the trajectory? How quick is the recovery in a market like Atlanta? I think Grant can maybe give you a little bit more detail on the inventory ratios, and then I'll come back and give you the impacts that I see that happening on new lease rate growth. So Grant, do you want to just kind of walk through the supply peak? Sure. Michael, happy to give you some more context. So the equation really works out as supply and demand. And on the demand side, we are still seeing extremely strong demand. So over the last year, we had nearly 21,000 units absorbed in Atlanta. So that's the good news that we are working through that. We obviously do still have elevated supply. As we move through the sort of slower part of the year in terms of lease-ups, that elevated net inventory ratio, like I talked about earlier, will remain relatively flat, although peaking, but really gradually coming down. So that if you look at where it is currently, it's about 4.4% region-wide. If you look to the third parties and so what they're projecting, it's back down by the end of 2025 to around 3%, which is still elevated, but is significantly better than it is today. Really, the time that that really starts to accelerate and you start to see more change is during that spring and summer leasing season when you will see typically that sort of seasonal pattern of additional absorption. Maybe turn it over to Tiffany. Sure. And then just kind of with that backdrop, I would just say that with the continued market rent constraints in the Atlanta region propelled by the supply that Grant was talking about, it's going to take time for market rent to recover, for new lease rate growth to turn positive. As I had mentioned earlier, we do expect that new lease rates in Atlanta will remain negative through 2024. And as we think about 2025, we think that there's going to be significant improvement in our NOI, but that's going to be more driven by occupancy and bad debt improvement versus new lease rate growth. Okay. Great. That's helpful. Thank you. And then Paul, just quick question maybe on the capital allocation side. You talked about some of the expansion markets that you continue to have an eye on. I think one of the things that has been an interesting takeaway in recent months is that even with some of the fundamental challenges, the pricing in these markets is still pretty aggressive. Folks have been talking about assets trading in the low fives. I'm curious what you're seeing when you look at those markets and the transaction activity that is out there, kind of where the pricing is and how that fits into how you're thinking about entering into new markets. Thanks. Sure, Mike, so let's start off, and maybe we can just go down the list. I mean, I'll start with the sellers because we really haven't seen the amount of transactions that we're used to seeing. Obviously, although, as I said earlier, there has been a slight pickup in the fourth quarter. I'd say two-thirds of the sellers that we have observed have liquidity needs, i.e., the Blackstones, the Starwoods, and about a third of the balance have really been just sellers taking profits, i.e., developers with syndicated equity or merchant developers with institutional capital returning that. I would say in terms of the pricing, even starting back into late 2023 when we did our last deal, the discount to replacement cost was a big component for us, and we've seen that gap, that discount to replacement cost closing. We've definitely seen pricing become more aggressive. I would say the buyers that we are observing are institutional capital, PE shops, family offices. The only groups that have really been on the sidelines have been the Odysseys, and the thesis there has really been new LP capital buying in at below replacement costs at discounts that, quite frankly, we haven't really seen in some time. They are underwriting flat to negative increases in the first couple of years, and the recoveries are really in years like three to five. That's pretty consistent with what we've heard from not only our own research, but our competitors just in terms of a runway in 2026, 2027, and 2028, particularly in the value-add space. Just going down, Michael, the cap rates right now, the core space, we're seeing 4.5%-5% cap. Core Plus is in that 4.75%-5.25%. The value-add has really been a 5.5 cap and up. And obviously, that would vary from sub-market to sub-market. Great. Thank you for all the detail. If there are no further questions, I'd like to hand the floor back over to management for closing comments. Thank you, Operator. Again, I would like to thank everyone for your time and interest today, and I look forward to keeping you updated on our progress and speaking with many of you again in the near future. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.