Good day, welcome to the Equity Residential first quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Marty McKenna. Please go ahead, sir. Good morning, thanks for joining us to discuss Equity Residential's first quarter 2021 results. Our featured speakers today are Mark Parrell, our President and CEO, and Michael Manelis, our Chief Operating Officer. Bob Garechana, our Chief Financial Officer, is here with us as well for the Q&A. Our earnings release, as well as a management presentation regarding our results and outlook, are posted in the investor section of equityapartments.com. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the Federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement these statements that become untrue because of subsequent events. I'll turn the call over to Mark Parrell. Thanks, Marty. Good morning. Thank you all for joining us today. We are pleased to report that we are seeing significant improvement in our operations, driven by continued strong demand all across our portfolio. This, in turn, allowed us to extend the gains in occupancy we discussed on the prior earnings call. We are currently 96% occupied, 160 basis point improvement since December 31st, 2020. We are especially encouraged by our numbers as we enter our primary leasing season, the period of peak demand in our business, and by the continuing reopening activities in our cities. The improving pricing we noted on last quarter's call has accelerated over the past few months. Pricing trend, which is a leading indicator of where market rents are going and is computed net of concessions, is up 14% this year, and we have already recovered 60% of the pricing reduction we suffered as a result of the pandemic. In fact, on a pricing trend basis, collective pricing in our markets outside of New York and San Francisco is likely to recover completely by the end of May. The New York and San Francisco markets declined by more than our other markets, so they have further to go to regain pre-pandemic pricing, but momentum is strong in those two markets, and they are making good progress towards full recovery. To provide additional color on our operating trends, we posted to our website at equityapartments.com a management presentation that provides some background on both current operations and our guidance expectations. After I give a quick overview of guidance changes and investment activities, Michael Manelis, our Chief Operating Officer, will provide more detail on our current performance and forward trajectory. After that, we'll take your questions. The encouraging trends I just mentioned led us to raise our guidance ranges for physical occupancy, same-store revenue, same-store net operating income, and normalized funds from operations as disclosed in last night's release. The midpoint of our same-store revenue range was raised 100 basis points to -7%. The midpoint of our NOI range was raised 150 basis points to -12%, and the midpoint of our NFFO range was raised by $0.05 to $2.75 per share. These improvements were almost entirely driven by stronger and earlier than anticipated recovery trends in both our residential and non-residential operations across all our markets. We are well-positioned heading into our prime leasing season, our reported same-store revenue numbers will lag the recovery in our operating statistics as we work through the impact of lower rents and of concessions. In terms of the first quarter's numbers, the impact of the pandemic is readily apparent. We said previously that our reported same-store revenue numbers would get worse before they get better, that's exactly what happened. Same-store revenues declined 10.5% for the quarter, which, while it was a bit better than we expected, is still among the worst revenue numbers in our history. We believe that our first quarter results will be our low point for the year, that they will improve from this point on. Turning to investments, while no dispositions or acquisitions closed this quarter, we have been active in the transaction market, and we expect to have a considerable amount of activity to report on next quarter. As we've said on prior calls, in order to create the most stable, growing cash flow stream possible for our investors, we are broadening our portfolio over time to increase our exposure to suburban properties in our existing markets, where the resident demographic is similar to our existing affluent urban resident population. We are also working on increasing our investment in Denver and continuing to consider a select number of new markets that have large and growing affluent resident bases, favorable long-term supply and demand characteristics, and lower political risk. While asset prices are high in the locations in which we seek to invest, our funding source for these acquisitions comes from sales of existing properties, especially in California, where we are obtaining pricing that exceeds our pre-pandemic valuations. We expect to complete this transaction activity with minimal dilution and to stay consistent with our strategy of acquiring newer assets with modest capital expenditure burdens. The one piece of notable investment activity that did occur in the quarter was our $5 million investment in a fund that preserves affordable housing across our country. This for-profit fund is run by longtime experts in the affordable housing preservation and finance area. Using our equity capital and that of other investors, as well as government financing, the fund acquires and improves the quality of existing affordable housing communities that would otherwise be at risk of either physical neglect or where the affordable restrictions are about to expire. We have been clear on prior calls of our steadfast opposition to rent control and other short-sighted policies that do not help solve the affordable housing shortage. Economists consistently say that rent control, in fact, leads to disinvestment in existing housing and impedes the creation of new housing. We support solution-focused investment like this fund that preserve or create affordable housing and favor the elimination of overly restrictive zoning codes that limit housing production where it's needed most. Along with ongoing engagement with public officials in our markets, this investment demonstrates our commitment to being part of the solution with respect to the affordable housing gap. To sum up, we are encouraged by the progress being made on vaccinations as well as the reopening of cities. Recent announcements made by employers, particularly in the tech industry regarding return to office are welcome news. We believe that the new operating model for most companies will be a hybrid of in-office and work from home, and that our portfolio will benefit from workers looking to live close to the office. The unique cultural and entertainment options that are becoming available again as cities reopen are also magnets to our affluent renter demographic and will draw them back to the cities and to the lifestyle many of them crave. Our customer base has stayed well employed during the pandemic and can afford our current rents and absorb future rent increases as market conditions improve. 2021 is indeed turning out to be a year of recovery for our company. As we have said before, Equity Residential same-store revenue growth coming out of recessions has typically recovered quickly with us posting strong numbers, and I see no reason that will not occur again once the lagging impact of concessions and some of the other factors I mentioned abate. All of this is, of course, premised on continuing progress in controlling the virus and an assumption that other economic conditions remain supportive. Before I turn the call over to Michael, I want to thank all of our investors for their continued support during these challenging times. We are well-positioned to benefit from a return to normal as the pandemic subsides. We are optimistic about the future of our business and believe that our portfolio will thrive. I'll now turn the call over to Michael Manelis. Michael? Thanks, Mark. With the first quarter now in the books and our spring leasing season ramping up, we continue to see strong performance build upon the early indicators we were seeing on our last call. The accelerated distribution of the vaccines have clearly had an impact on many of the states and cities where we operate as they push for a return to a more normal environment. Our teams in our various markets are sharing positive news of neighborhoods that are starting to feel alive again as more and more companies get ready to reopen offices. Regardless of the ultimate outcome of work from home, we see our demographic is drawn to the amazing culture, food, and art that our urban locations offer. They're excited about reopening of these experiences and feel a sense of urgency to return, especially knowing that these lower rents won't last for long. As you may remember from prior calls, we have focused our approach on maximizing revenues by balancing occupancy with rate and concessions, which has proved successful thus far. Our confidence in the recoveries of our cities, coupled with this disciplined approach, kept us from overreacting in one direction or the other, and we are well positioned as the recovery takes off to sell our excess inventory at net effective rates that are currently 14% higher than the end of last year. In both the earnings release and in the accompanying management presentation, we have provided some key performance metrics. Let me highlight a few of the overall trends. First, demand. Demand was strong through both the winter season and early spring, with a continued trend of increased applications and move-in activity that is well above seasonal norms and has fueled a stronger than expected occupancy recovery. Occupancy is currently 96%, and as of two weeks ago, is now above the prior year comp period, and for the first time, beginning to approach 2019 levels. This occupancy strength is contributing to the improvement in our revenue growth recovery. Pricing trend, which includes the impact of concessions and is a good indicator of where market rents are headed, has improved across all markets during the first quarter and through April. We continue to test price sensitivity in every market by raising rates and reducing both the value and quantity of concessions being granted. In January, concessions averaged just under six weeks on about a third of our applications. By March and into April, this has been reduced to about 20% of applications receiving on average four weeks, and we expect this to continue to decline into May. As stated in the management presentation, we have seen a 14% improvement in pricing trend from December 31st to April 23rd. Renewal rate negotiation pressure continues as we renew residents who signed leases at the onset of the pandemic before the declines in pricing trends occurred. Outside of Southern California and Denver, our other markets have pricing trend below prior year, which put pressure on renewal negotiations. This situation is improving weekly, and as Mark mentioned, we expect the other markets, excluding New York and San Francisco, to be positive by the end of May. April renewal rate achieved should be 200 basis points better than March, which was a negative 4.5%. The percent of residents renewing also continues to improve, with March and April both achieving above 55%. These levels remain below our historical average for this time of year, but the gap is closing. Blended rates, which combines new lease changes and renewal rates achieved, continue to improve, with sequential improvement in new lease change expected for the next several quarters. As previously discussed, renewal rate achieved was pressured in Q1, but the pressure will continue to moderate as pricing trend improves and as the rate on expiring leases, which were written pre and early onset in the pandemic, narrows with current market rents. On pages six through eight of our management presentation, we have provided color on pricing trends, physical occupancy, percent of residents renewing, and leasing concessions for each market. I will not repeat that here, but let me provide some brief market-specific commentary. I will start in Boston, where we are seeing an uptick in interest from students, as many colleges have announced plans for campuses to open again in the fall. We may well benefit from limits on dorm occupancies, as some students will need to find alternative housing. This market will face some headwinds from new supply, particularly in the city, where we are still dealing with some non-stabilized lease-ups from last year, as well as a few new deals expected to deliver in the back half of 2021. New York is starting to see positive momentum. Demand is good, driven by both bargain hunters looking to upgrade and people returning to Manhattan in anticipation of office reopenings. Specifics around office reopenings remain unclear, but indications are that it will be a hybrid that has employees back in the office at least part of the week by summer and early fall. In New York, concessions remain part of the marketing strategy, even while we are raising rates. This market held on to widespread concession use through most of the first quarter. The last several weeks has shown concession use starting to decline. Unlike any of our other markets, New York has a more significant number of local operators, not on yield management, who tend to use concessions more frequently. New supply is basically nonexistent in Manhattan. However, supply pressure on the Hudson waterfront in New Jersey in the back half of this year may impact that submarket. Our migration data suggests that this market is beginning to return to normal as applications from outside the New York MSA and move-outs leaving the MSA both continue to trend closer to normal pre-pandemic levels. Turning to D.C. During the pandemic, physical occupancy held up better in D.C. than any of our other East Coast markets. Absorption of new supply also has generally remained healthy, but has slowed compared to 2019 levels. While demand in this market remains robust, we are facing some headwinds from new supply in 2021. D.C. has an excellent track record of absorbing new supply, but with more than 12,000 units being delivered this year, that track record will be challenged. Heading to the West Coast, Seattle trends are moving in the right direction, but the market has shown periods of price resistance. Tech companies continue to hire and are moving towards reopening offices. Amazon's recent announcement of its commitment to an office-centric culture as their baseline is a very good sign for driving demand. The expiration of the H-1B visa ban at the end of March should also be a good driver of demand, as the tech sector was heavily reliant on this program for talent. On the supply front, new supply deliveries will rebound in 2021, with the largest concentration in the CBD Belltown submarket. San Francisco, one of the markets hardest hit by the pandemic, is clearly on the road to recovery. Concession use in this market has shown a meaningful decline. Our communities located in the city of San Francisco are starting to feel vibrant again. Late in the first quarter, we saw a flurry of announcements from Bay Area tech firms with regards to return to office. Many of the tech firms, including Google, are taking a firmer than expected stance with regards to office attendance, as they recognize the importance of in-person work in both product creation and company culture. Schools are reopening, with colleges planning for students to return to campus in the fall, and demand for our two and three bedrooms has clearly increased in the last several weeks. New supply will be elevated in 2021, with a large concentration in the South Bay, which may create some pricing headwinds for us. Southern California has been the strongest part of our portfolio during the pandemic. Los Angeles, despite being one of the most locked down cities in the country, continues to have good demand. The city is opening back up, and the governor has set mid-June for a full reopening. The most encouraging sign in this market is the pickup in activity in the content creation sector. Television and movies that were filming in other states during the pandemic are returning to L.A. 2021 new supply deliveries will be well spread out across the submarkets, with most of the expected pressure coming to us in the Mid-Wilshire Koreatown submarket. Orange County and San Diego continue to be the real standouts in terms of performance. These markets have the highest occupancies and the best, albeit still negative, revenue performance, though we see same-store revenue growth in these markets turning positive in the second quarter. These markets should continue to benefit as the state opens back up and travel and leisure activity picks up. New supply will be at normal levels and generally well spread out across the submarkets. While Southern California is generally one of our better-performing areas, it has and continues to experience the highest levels of delinquency. We have mobilized our teams to assist our residents in applying for available federal rental assistance dollars. While California was ahead of most states in creating a rental assistance application process, the state is just beginning to process applications and to send out money. We will be aggressive in pursuing these California relief funds, as well as other programs throughout the country. Finally, in Denver, demand remains strong across the market, although pricing pressure and widespread concession use is common downtown. Our two suburban Denver properties have little concession use and are seeing good demand and revenue growth. New supply will be elevated from 2020 levels, but good job growth should be a driver of absorption of that supply. Across all of our markets, our focus will remain on increasing rates and continuing to reduce and eliminate concessions. Our strategy of not chasing occupancy at any cost during the winter is paying off. So far, we have been able to grow our occupancy while at the same time recovering just over 60% of the decline in rate that we experienced from March to December of 2020. We believe that this approach will continue to benefit us as we move forward through 2021 and close that gap. Let me close by thanking the entire Equity Residential team for their continued dedication and hard work. I am confident that we have the best team in the industry, and they are demonstrating the power of working together as they lead the markets through the recovery phase and remain relentless in serving our customers and taking care of each other. Thank you. I will now turn the call over to the operator to begin the Q&A session. Thank you. If you like to ask a question please signal by pressing star one on your telephone keypad. If you are using a speaker phone please make sure you unmute. Again press star one to ask a question. We'll take our first question today from Nick Joseph with Citi. Thanks. Appreciate all the additional operating disclosure. As you look at the pricing trends in the management presentation, they're approaching last year's rates at least in April. You look at blended rate in April, still down 7.2%. How do you marry those two things together? I know you talked some on the renewals, how would you expect signed new leases to trend over the next few months? Hey, Nick, this is Michael. I think the way to think about this is pricing trend from page five in that management presentation is the leading indicator of where the improvement's going to come to blended rate. After you see the improvement in blended rate, you start to see the improvement in revenue growth. I think there's probably about a month or two lag that you start to see as we'll start to cross over. Now remember, the comp period from last year gets easier as we work our way through May and June. Our focus is really around that pre-pandemic period, which is what were rents like in each one of these assets at the very beginning of March of 2020? Where we have good acceleration, we're focused on what was that high mark from 2019, and how fast can we go after that? I think as we keep pushing forward and keep getting that momentum over prior year, you'll start to see that blended rate improvement really kick into gear. You can see what happened just sequentially from March to April. I would expect you're going to see that same kind of real big pop as you work your way April into May. Thanks. That's very helpful. Mark, you mentioned the considerable amount of activity. I was just wondering if you can give more details on that expected external growth and the size, and cadence of the deals. Hey, Nick. Well, just to be clear, the growth is really a swap, right? We're selling assets, as I mentioned in my remarks, predominantly in California, but also elsewhere. Getting really terrific pricing on that stuff and being able to trade into properties in Denver, for example, where we're going to expand our presence, we think pretty significantly over the next few quarters. We continue to look at some new markets, and then again, suburban parts of our existing markets. Again, we'll have better detail when I actually have properties to speak to, but we're well along in that process. I expect to have a bunch closed in the next month or two, and then to be able to talk about it in more detail in July. Thanks. Thank you. Next, we'll hear from John Pawlowski with Green Street. Great, thanks. Maybe a follow-up on that, Mark. We'll wait a few months to hear about actual deals, just in terms of the private market pricing you're seeing evolve in these markets, which metropolitan areas do you think screen the cheapest right now in terms of going-in pricing, and which markets do you think pricing is the most irrational? Wow. Great question. I'm going to look at cap rates, talk a little bit about cap rates with you, though we all know that's only part of the picture. A lot of these markets, almost all of them that we're either in or interested in, with the exception of Manhattan, Brooklyn, and call it the city of San Francisco, are trading at or higher than they did at the pandemic period. We're looking at cap rates, for example, in Denver, 375 to four and a quarter. There isn't a market that's screening cheap. In terms of expensive, I'd say the recovery is well priced in, is probably a charitable way to say it. I think these cap rates are low because people have confidence. Even in the Sun Belt markets or places like Denver, there were declines in revenue, and I think what people are seeing is you're going to make that up, and you're going to make that up pretty quickly. They're willing to kind of capitalize that into the price. With the NOI still relatively low, that makes the cap rates low. I guess I'd say there aren't any bargains we see. What works for us is if we can sell some of these assets that, whether it's locational or we have an over-concentration, we're able to get rid of, John, at pretty low cap rates too, at values in a lot of cases that are the highest, not just the pandemic, but we've ever seen, and buy assets we really like at the same cap rates, even if they are frankly in the very low fours and in the threes. That's still a good trade for us. We still think that gives us that diversification we talk about, maybe a little better growth going forward. We're always looking at newer assets, so we're not arbitraging new properties for old. We're typically buying in our markets, and in Denver, for example, assets that are 2016 vintage or newer. Okay. Understood. Makes sense. Final question. Maybe when you stare out, either for Mark or Michael, when you stare out a few years beyond this initial snapback in rate and occupancy in your markets, which markets do you think are well-positioned for kind of a nice multi-year run and rent growth, and which markets are you concerned kind of hit a wall in pricing power these next few years? Well, let me start there. Michael may have something to add in there, John, but maybe we'll talk about the whole company for a second, then we'll go to the markets question, because we have been noodling on that a little. We're certainly not in a position to give 2022 or 2023 guidance. I think when you look at how this company's performed, Equity Residential performed coming out of recessions, and thinking back to the tech bust in the 2002 vintage period and Great Financial Crisis in 2009, you've had a couple of years of negative growth, then you've had a kind of an in-between year. A transition year where we were right at zero for same-store revenue. Then you've had that snapback that you're referring to, where we're averaging 5% for three or more years of same-store revenue growth. What I think is different this time, or is likely to be, is first off, the decline was much larger. Absolutely, both last year and this year, larger than the order of magnitude in those two prior cases. I think we're going to skip the transition year and go straight, given the velocity Michael's speaking of, we're going to go straight to a number that's considerably higher than that sort of transitional zero to de minimis same-store revenue growth. When you look by market, one market I was thinking a bit about before the call was New York. We certainly hear a lot about New York, and that's get kicked around a little bit, but when you look at the numbers after the Great Financial Crisis, they had a couple years, they had quarters where the numbers were 7% quarter-over-quarter. I'd remind everyone that simply removing concessions is an 8% increase for a given lease in revenue year-over-year. I think New York will put up some pretty good numbers, but in fairness, that's based on some pretty big declines. I think the same is true for San Francisco. I think we've got a lot of confidence in Southern California. I think that market's doing very well. I think Seattle has been a little uneven, so I'll let Michael maybe comment on that. A lot of confidence in Boston. The recovery's been great in that market. There's a lot of good things happening in Boston. Again, in D.C., and we haven't talked about it in a while, but we're still going to have Amazon's HQ 2 coming, and that's very close to numerous of our assets. I feel like when I look at the markets, San Francisco and New York might post very significant quarter-over-quarter, year-over-year numbers. In fairness, that has to be judged by the level of decline that occurred the last few years. When you just do compound numbers, I think Southern Cal is going to feel good. I think Boston's going to have a really nice recovery and come out of this more quickly than any place else. I guess I'll defer to you, Michael, as you think about Seattle, because I just don't know how to think about that. Well, I think near term, I think I said in the prepared remarks, it's had these moments of kind of fits and stops as our recovery goes. If I would go a little bit further out, longer term, the demand drivers are strong in all of our markets. As you really think about our ability to kind of grow revenue across our markets, all of these markets have unique aspects of what's going to be really delivering that demand growth. I feel positive about really our opportunity as we work our way forward. We've still got this near-term stuff we've got to work our way through, but the momentum is on our side right now. I'm sorry to supplement further, maybe just a conversation about Denver, and this is just as applicable to Austin. I mean, a lot of the per square foot rents in those markets are $2-$2.20 a foot per month. When you look at other markets that we think Denver will emulate, like Seattle, there's a lot of room to run. When you look at single family, and I was just out there with our chief investment officer a few weeks ago in Denver, great quality of life, a lot of good things to say about job quality and lifestyle in Denver, but also single family's gotten a lot more expensive. I mean, townhouses that routinely are $600,000, nice homes, but not elaborate. Again, our rents at that level compete well, and I feel like you could see some real outperformance for higher-end apartments in places like Denver and presumably places like Austin. The issue is that the market's pricing that in, and the cap rates are pretty darn low. Again, if we're trading out of assets we don't want, and it's at the same cap rate, and we're buying a better kind of growth stream, we think that math's going to work out for us. Great. Well, thanks for all the comments and for the time. Thanks, John. We'll now hear from Rich Hightower with Evercore. Hey, good morning, guys. Thanks again- Morning for all the operational details. Good morning. Just to think about the charts in the investor deck from last night, New York and San Francisco, and as we think about sort of the interplay between occupancy and net effective rents, and Michael, I think you touched on this a little bit in your prepared comments, but is there a chance or something you're forecasting where maybe rents level off a little bit as you play more catch up in occupancy in those markets specifically over the next few months? Well, I think I would say that the occupancy is catching up and that trajectory moves. Our focus really in both of those markets is to continue to claw back as much of this decline as we can, given the strength and demand we're seeing. We still got a ways to go. If you isolate downtown San Francisco to the nine properties or 2,500 units we have, we're still materially off from where we were at this time last year. The good news in that market is concessions have really abated. Now we have an opportunity just to grow that base rent. The opposite opportunity exists in New York right now, whereas concessions held on strong, and now our focus is, let's keep trying to pull back those concessions. Even while concessions maintained that high level in the first quarter, we were trying to pressure test just raising up rate. We have a different opportunity in both of these markets to really go forward. I wouldn't say it's, let's pause occupancy and claw back all the rate, or let's keep rates where they are and get all the occupancy. It's this constant push on both levers. Okay. That makes sense. Just in terms of the sort of the return to office wave, obviously, that's a big contributor to demand, whether that's happening now or maybe later this summer, it's causing demand to increase in a lot of the sort of the urban core sub-markets. Are there any trends that you're gleaning from your portfolio in terms of who's moving in and whether that's by price point or unit mix or maybe the different neighborhoods? Are there any kind of interesting takeaways from some of those data? I will tell you, I think on the past calls, I talked about the pressure we were having with studios and just not seeing a lot of demand for new leases there. That clearly is changing as we work our way through that first quarter in through April. Just sequentially from our point of April 23rd to the end of that first quarter, we've improved 150 basis points in our occupancy of studios. We're not back all the way where we were, but we're clearly starting to see that demand. That's really an interesting standpoint because we're not seeing as much of the acceleration in the rate recovery on studios yet. You're still seeing that attractive price point, and that leads to that next demographic piece, just from the overall affordability and like the household income. What we've done is we're really focused right now in new residents that moved in with us during the first quarter. What do we know about them? First, from the overall age profile and demographic, really pretty much in line with our historical average. Those move-ins, they were 33 years old. It's a little bit less than like a New York market, where we were 33 and a half. Historically, we were up at, like, a 35-year-old kind of moving in. Not a big change on the age. On the affordability index, which is really rent as a percent of income, we really saw no significant change across any of our markets. The portfolio is still averaging at 19%, so rent as a percent of income is 19%. When you drill into that, because rates are still down, that means what gave is a little bit of a decline in the annual household income for our new residents moving in. It's just not a significant number, though. These are still affluent renters that are moving in with us. The most significant decline came in New York. Our average renters for Q1 household income was $215,000 in that market. Their rent-to-income ratio is still at 18.5%. We've been kind of watching these demographic trends to see what's happening. The pattern of going after the larger units, the one and two bedrooms we talked about on the last call, still there. We're well occupied on that front. The opportunity is studios. Okay, great. Thanks for the color. Next, we'll hear from Jeff Spector with Bank of America. Great. Thank you. Good morning. One follow-up on the last discussion around demographics, specifically New York City and San Francisco. Can you discuss a little bit more on who's returning, who's entering the portfolio? Any color on that to give us? Sure. I think by that, we'll talk about what we say is our migration patterns. Like, where are people coming to us from, the new residents, as well as when we look, where are our residents that are leaving going? I will tell you, in San Francisco, we're trending back towards normal pre-pandemic levels. Applications from within the same MSA and state both still remain elevated. Huge improvements sequentially from what we saw in the Q3 and Q4 period of last year, but they're both still slightly elevated, which really just means that you're still seeing kind of this deal seeker or people trying to take advantage of it just moving within the market. The New York front has really almost returned back to normal. It still has some elevated level of deal seekers from within the same MSA, but really that is materially lower. We were up at, like, 80% of all of our applications in New York were coming to us from within the same MSA. Right now, we're back down to 65%, which is right in line with our historical norms. Thank you. Very interesting. Second, on renewal rates, I know you made comments on markets outside San Fran and New York. It should return positive by May. I'm sorry if I missed this, but can you provide a forecast for San Fran and New York? When do you expect renewal rates to stabilize or also turn positive? That's a great question. I think a lot still depends upon our ability to grow that pricing trend Over the prior year and really back to that pre-pandemic level. I would think I would look at this somewhere in, we have an opportunity in the late second quarter, early third quarter to do it if that momentum stays. I could also just see that number kind of moving out a few more months if we kind of hit any section of pause in our ability to keep recovering and clawing back that rate. Okay, thank you. Alexander Goldfarb with Piper Sandler has our next question. Hey, good morning. Two questions. First, Mark, as you were talking about the markets or the change in the demographics of people moving in, is your view simply that, based on the commentary of the income levels that you're seeing, and really talking about San Francisco and New York, because it sounds like the other markets are doing much better. Is your view that if you remove the concessions that the new renter profile can afford the standard face rents, or is your view that it's going to be a slow trickle of easing back into the historic face rents that, let's say, we were at in 2019? Well, I think from an affordability index, it's clear that the new residents moving in are going to be able to afford increases as we return to those pre-pandemic levels. As we've been pulling back, even sequentially into April, as we think about where we sit today, even from last week's kind of applications coming in, we're pushing really hard, and we're not finding that resistance point yet. That's our goal, is to keep pushing and trying to find that resistance point. We haven't seen a change in the demographic profile. I think from an affordability standpoint, the applicants coming in, they're all approved based on the gross rent. Regardless of concessions, they're approved on that gross rent, and they're used to paying us that gross rent after they get past that first or second month. I think that's something we'll have to watch in the markets like New York and San Fran, where we really kind of have momentum to dial back even more on that concession use. To date, for the month of April, we have not seen any material change in that demographic. If I understood you correctly, all the tenants are approved based on their ability to pay the non-concessionary rent, the full face rent. Is that correct? Not the effective rent. That is correct. Okay, that's actually pretty big. It's on the total rent, not the effective rent. Okay. It's interesting. Yes. Mark, it wouldn't be a conference call without rent control discussion. I see that Albany is still kicking around the Good Cause Eviction potential for basically rent control in New York. Given that New Jersey and Connecticut don't seem to be in that same vein, would you have a view of selling down your New York and Manhattan exposure and increasing New Jersey and Connecticut? You're going to ruin all the news for next quarter, but we did sell our last asset in Connecticut, and that was really an asset decision. It just wasn't a property that we thought had the renovation potential that the buyer did. It was just a little bit of an older property, Alex. We are interested in a deal, and we'll likely close shortly. That is in New Jersey, higher end, affluent renter base. You can certainly commute into Manhattan, but there's a lot of folks that live at this property that are going to work in that area. We are open. Again, the New York Metro has some huge advantages in terms of supply dynamics, in terms of having the largest base of high-income rentership in the country by a long shot. I think you could say whatever we all might say about this president and the prior president's actions, but as it relates to infrastructure and spending and things that the city of New York, the state of New York, and the states around it needed, a lot of money is coming into these states to heal. We're still open very much to investing in the greater metro area in New York. Okay. Sounds like you may be open to further selling down your direct New York exposure. Is that fair to say? That's fair to say. We have 27 buildings in Brooklyn and Manhattan. I can't tell you how many we'll have in two years, but it'll be somewhat less. I think that we've got some of that 421-a stuff you might remember that we've spoken of, that's just hard for a public reporting company to own. I just think we're probably just a little over-concentrated in Manhattan, and you may just see us lighten that. Again, you'll see us find deals that we like in the metro area, and we'll buy those. We got a development deal in the New York Metro area as well that we'll talk about next quarter or the quarter after. I think we're willing to do both, Alex, but this trend of spreading out our capital is true in every market, and that definitely includes New York. I think New York net will be smaller, the metro. Okay, cool. Thank you, Mark. Thank you. Appreciate it, Alex. We'll now hear from Rich Hill with Morgan Stanley. Hey, good morning, guys. I want to go back to maybe a comment or question Nick was talking about at the beginning. Thank you very much for the additional disclosures. I recognize Marty might feel differently about putting it together, but we certainly enjoy it. If you think about pricing trends, the slide on page five talks about all of your markets, and I'm struck by how well Orange County and San Diego have done well above pre-COVID markets. Denver's holding up fairly well. As you think about the ability to push before a return to work, let's use New York as an example. It seems like given the demand that you're seeing from people opportunistically moving back to major markets like New York City, there's still healthy room for you to push that. Is that the right way to think about it? Yeah, absolutely. You could just look at the slope. I would say we have been pushing, if you just look at the slope of the line that's occurred. Our goal is to keep being as aggressive as we can, while we have that demand coming in that front door. Got it. As we think about these pricing trends, given the NOI contribution coming from markets like New York, Washington, D.C., San Francisco, you could actually see that pricing trend go well above where it was this time last year, for a variety of different reasons, but primarily due to mix. Is that a right way to think about how that pricing trend might look like in Q2 or Q3, assuming that you put this slide in your deck again? Well, it is Mark. I just want to make sure we are answering the right question for you. When you start comparing pricing trend, for example, in July of 2020 in any of those markets to pricing trend in July of 2021, because 2020 kept going down, and 2021 we believe and hope and feel is going to keep going up, those numbers will cross- Yeah relatively soon. We're trying to be careful. We're certainly happy that we're improving, and we see that as an absolute. Pretty soon it won't be relevant to judge us against 2020 anymore. It's when do we get back to pre-pandemic 2019, early 2020? We're making progress towards that. To answer your question, yes, that'll probably happen, and those lines will cross. That's partly because we do feel like we can keep pushing pricing trend. That's partly because it went down so hard in 2020, in fairness. I think you're going to see us talk more and more if things keep going this well about how and when we'll get back to late 2019, early 2020 type of pricing. Is that helpful? That's absolutely helpful. That leads me to my next question, if I can, which is the forward outlook. Obviously the market wasn't weak in 2019 prior to COVID, is there a scenario where you can actually really begin to push rents pretty heavily once you normalize back to 2019 levels, given a combination of strength that you're seeing in the already strong markets, but also a millennial and Z generation that should create a heavy demand in urban markets? We certainly hope so. You're starting to ask a question that's more applicable probably to 2022. Again, we've all read the article. Yeah. Yeah. The setup is good. You got great occupancy. New York in just a few weeks will open up to 75% occupancy in office space. We're seeing these numbers so strong when legally it's not open for more than 50% occupancy. That feels terrific to us. Again, we've all read about what happened after the 2019, or whatever it was, Spanish flu epidemic. There was a lot of pent-up demand for all sorts of things, and I think we'll see that. I think people want a little more space. Young people who've been stuck at home with their parents, my kids included, want out. They want to live where we own properties. I think we're going to feel all of that, which is your Gen Z comment. I think we've got a good long runway here ahead of us as we get through this year, put the pain of 2020 behind us as a company and as a society. I think you're going to see some pretty good numbers from folks like us, apartment owners in these big cities. Yeah. Thanks, guys. I was indeed asking a question about 2022. Just trying to think about once we get past the inflection in the second half of 2021 and the first half of 2022, which feels very real to us, what do we look like going forward? Yeah. That's quite helpful, guys. Thank you. Well, that was shifty of you. I just tell you, obviously progress in the pandemic has to continue. Like I said in my remarks, economic conditions have to remain generally supportive, but there's good momentum. The single-family market is very expensive still. I do understand all the return to office, work remote arguments, but I think there's still a very large constituency happy to live in our urban locations. Great. Thanks, guys. Thank you. Our next question comes from John Kim with BMO Capital Markets. Good morning. Question on concessions. In New York, you mentioned that 55% did not receive a concession, and 45% got six weeks on average. What was the difference between the haves and the have-nots? Is that a neighborhood discrepancy or price point? I think it's a little bit of both. Clearly we have some markets like the Upper West Side and Upper East Side where we really have pulled back using concessions. You still have sub-markets like Chelsea and Gramercy that you still see concessions are being used widespread across most of the applications. Yeah, I think at this point, we've seen momentum in the last three weeks, even in those tougher hit areas. We're going to just keep open, and we can keep pulling back and dialing back not only the value of the concession, but just how frequently we are. The other thing you got to remember with the use of concessions is many times what we're doing right now is we'll have concessions in place on vacant units to create the sense of urgency to fill our vacancy. We will not offer concessions on noticed units, which is residents that said they're moving out somewhere at the end of May or into June. We'll advertise those units for sale, but we will not have concessions on them, and we are leasing those units without concessions. Okay. How long do you think it will take to reduce the concessions back to pre-pandemic levels? Is it going to be more likely more than one lease cycle? I think that's too early to tell, right? You could see the momentum in a San Francisco, downtown San Francisco, how fast you can pull back. I think New York or the Manhattan sub-markets clearly have the opportunity to just pull back at the same pace. They haven't done that yet. I think a lot of that does have to do with the type of ownership we have, where you have a lot of kind of single-owned assets that aren't using yield management, and they're going to keep those specials in place until they fill back up, and then they'll eliminate the concession. I think that's still TBD as to when we'll get back to a place where we're normalized on the concession use in that market. Okay. Mark, you mentioned that the portfolio repositioning this year will have minimal impact to earnings this year. Do you see this new market concentration providing more earnings growth potential? Is the benefit really diversification and stability going forward? A little bit of both. When you think about growth, as I said in some of my prior answers, it's likely that New York and San Francisco will post absolute numbers that are somewhat higher in the near term, let's call it, so maybe 2022, 2023-ish periods. Just again, because the decline, John, was so significant before. I think when you start to talk about a longer period of time, it's probably good to have a little bit of a To be in a few of these growth markets and be a little bit spread out. I also just think diversification of all sorts is good. Listen, we've talked a lot about political risk in some of our markets, but I'd point out, if you own apartments in Texas, you probably have some pretty significant casualty and maintenance issues to deal with from the freeze. There is no place that's riskless from physical point of view or riskless from political issues or whatever. Just having the capital in, us being in six, seven markets, probably better to be 10 or 11, but I don't see us going back to 30 like we were in the late 1990s. That's too many to keep, I think, good track of and to be on top of. Great. Thank you. Thank you. Amanda Sweitzer with Baird has our next question. Thanks. Good morning. Can you guys provide an update on your ancillary income trends? Do you have pricing power to implement some of those fees today? Any thought to bring in more short-term rentals? The short-term rentals, I would say at this point, we're not doing that. We see enough demand for conventional renters, we're going to kind of hold off on going back to that type of renter. As far as the ancillary income, I think we're still being aggressive where we can with all of our amenity fees, whether that's raising the parking. We spent a lot of time over the course of the last couple of years improving kind of how we priced our parking spaces and how we kind of optimized the revenue from that. I think there's still a little bit of opportunity left, but not a lot there. The other thing that feeds into some of those ancillary incomes is just our settlement fees. When people break leases, what are the fees we charge? We clearly have increased those throughout the COVID period, and we'll keep them at this elevated level. Then, the other areas that we have right now, I would say we had some things in place pre-COVID that we're just not ready to go back to yet. That's helpful. As a follow-up, have you given any thought to repurposing some of your existing commercial space? If you have, what uses appear interesting and any prospective ROIs on those conversions? Hi, Amanda. It's Mark. We have given some thought. We've talked on prior calls a little bit about that. Again, this would mostly be for our current residents. Our thought isn't to compete with those sort of WeWork-type remote work providers. It's more to provide an amenity to our residents that they're either paying for directly on a per-use basis. Maybe it's repurposed ground floor retail that we put a great internet hub in and some furniture, and then off to the races. Maybe it's just space in existing amenities that we're bifurcating a little bit more so people can use it. I don't really have an ROI for you as much as its stickiness. I'll say that one thing we don't want to do is just hold on to empty retail for too long, assuming we can get cities to let us rezone it. We do have retail space that was vacated. We're just giving a lot of thoughtfulness to whether we're just going to put new retail tenants in that space and then, heaven forbid, two, three, four years later, go through this same experience again. Retail is a tough business, we're glad we have very little of it. We may repurpose some of that additional space as potentially amenity space for our residents. You shouldn't expect us to use it significantly as an independent rental stream. That makes sense. Appreciate the time. Thank you. We'll now hear from Haendel St. Juste with Mizuho. St. Juste, I like it. Thank you. Good morning out there. Hey, I was curious. Maybe you guys can talk a bit about the outlook for bad debt in the portfolio, given the recent extension of the eviction moratoriums, and how that plays into your same-store revenue picture for your California and overall portfolio, and what's reflected in the guide. No problem, Haendel. It's Bob. From a bad debt perspective, not a lot has changed, and you kind of saw that in the reported numbers sequentially from Q4 to Q1. They're relatively flat. That's what we assumed in our guidance, is that they kind of stay the same. We do not assume any kind of material level of improvement. That's obviously a potential green shoot. We are very active in the process of working with our residents, as it relates to some of these federal rental assistance programs. That's particularly concentrated, as you kind of alluded to, in Southern California, where we have experienced the most elevated amount of bad debt. That's a possibility, but is not incorporated into the numbers themselves. For now, our best guess is just assuming that things stay the same, throughout 2021. Okay. Maybe, I guess, can you talk a bit about if your funding thoughts for potential acquisitions has changed at all given the continued improvement of cost of equity? I know that the plan for this year was to use proceeds from dispositions to buy, just curious today if there's been any shift in thinking about perhaps being more of a net acquirer given the improvement of cost of capital. Also as part of that, maybe you could talk about your plan to get bigger in Denver and Austin, if development will play a role in that, and your overall thinks on development here. Thanks. Well, it's Mark. Thanks for that question, Haendel. Those are a little bit linked because the one thing we can't do with recycling is development. If the 1031 rules continue to be in effect, it's pretty efficient for us because we do have assets we want to exit in markets where we want a lower exposure. To do a tax-free exchange and then just move the money over. I would say on development, that's an area where in the past we have used the ATM or have used other mechanisms to raise money because you can't 1031 into developments. You really need to have independent capital. Often it's been pretty small, so we've used debt capital, but again, as our cost of equity improves here and as it becomes a more relevant funding source, I'm open to it. Another way, by the way, to address our market concentration, our desire to rebalance, is to make the whole company bigger. You could use, again, ATMs and issuances to buy assets and not recycle. Buy assets, I'm sorry, in new markets or in Denver, for example. That's a process that could have more dilution associated with it, so I just want to be kind of thoughtful about it. That is thoughtful. Thank you, Mark. One question, one last one from me. Maybe you can help me understand something a bit better. The commentary about reinvesting your, well, potentially disposition proceeds from California into places like Denver, but accretively on an IRR basis. I'm just struggling to reconcile the math here a bit. If cap rates in Denver and California are both in the, call it low 4%, maybe even sub 4% range, but rents across much of California are still sitting below, well below prior levels, while Denver's already looks like it's passed it. I understand the lower CapEx certainly, but how are the IRRs that different or even better in a place like Denver, with cap rates already pretty low. Maybe you can help me understand what I might be missing here as we think about the reallocation of capital from California to a place like Denver. Thanks. I think you're asking a very fair question. I think you're starting at about the same place as you suggested. I think the assets we're selling often do have significant capital that needs to be invested, and I appreciate that's more of an AFFO thing than an FFO thing. As you know, we think a lot about CapEx at EQR, in a lot of these cases, we're buying new product in Denver and we're selling old product in California. I think the shareholders are much better off on an AFFO basis. I'll also say again, when we're in Denver looking at $2- $2.20 a foot rents per month, in a place where incomes are rising very quickly and where you got a lot of momentum. That to me, as compared to $3.50, $4 rents in California, makes me feel like, boy, why couldn't that number very quickly get to Seattle's number in the higher twos and low threes? Why can't that happen over an accelerated period of time? We're not underwriting crazy numbers in Denver, but we are underwriting significant same store, significant rent growth in the first few years and then some sort of normalization. I feel like I've got likely more upside in places like that for the reasons I just mentioned. We already have tons of California exposure. If California does draft up, as you said, even better, great. We'll always have 40% of the company in that state, but maybe we don't need to have 45+ percent in that state. Is that helpful? Certainly it sounds like obviously that there's a CapEx element in your comments about AFFO. Just curious, as we look back over the prior decade and we've seen cap rate compression between the coastal and non-coastal. Years ago, it used to be 50, 75 basis points, a few years back, maybe 25, 50. Today, we're sitting here right on top of each other. I guess I'm curious where you think cap rates in a place like Denver are three to five years from now versus today, comparatively to, say, New York or California. We got to start by knowing what interest rates are, what growth is. Boy, I wish I was that good. That'd make the big bucks. That's the big kahuna question. Yeah. By the way, do I have to know the answer for sure if I'm spread out in places where there's knowledge workers, good general economic growth? If we spread our bets a little bit, Haendel, we'll draft that no matter where it happens, right? Again, to be over-concentrated in any one place That's probably a lesson we've all learned, even before the pandemic. It wasn't a great idea. It isn't just, again, these coastal markets. Florida, every time hurricane season comes, we have no properties there, but we used to. I remember shuddering every time it started because I didn't know what it was going to do to our numbers and to the condition of our property. Every market has significant risk of one. There's no riskless apartment market, so to be more balanced, I think is a good idea in any regard. Agreed. Much appreciated. Thank you for the time. Thank you. Our next question comes from Brad Heffern with RBC Capital Markets. Yeah. Good morning, everyone. A question on office conversion. We've heard some reports in the press that some major metros are thinking about converting offices into apartments potentially or potentially just typical housing. Do you see that as something that's likely to happen and could it potentially have any sort of meaningful impact on supply, maybe that we wouldn't see in typical supply numbers? Yeah. Well, first off, anything that helps the affordable housing shortage is worth trying. We'll start with that premise because, again, some of the conversations or articles I've read and you've likely read are about can that help with affordable housing? I'm not sure, let's give it a whirl because that's a real issue. The problem with converting offices, often these are older office buildings, large floor plates, limited windows. When you think about a lot of units that don't have outside access, that don't have windows, I think Michael would tell you those are going to be hard units to rent. We do have a couple of buildings in the portfolio that were repurposed. One is a great asset that used to be the U.S. Steel headquarters, down near the New York Stock Exchange on Broadway. That's a great asset. That's really cool. It's also a pretty narrow asset. Everyone has window access, and the property works. We have some out west as well. Same thing, floor plate's a little bit smaller. There's an interior courtyard. I don't know what happens with a building that takes up half a block or more, and you're just trying to turn it all into apartments. I'm not sure how that's going to work. I'm not that concerned with it as competitive to higher-end apartments, and I think we'd be open to trying to figure out a way to make it into affordable units. Again, this window issue is not a small one. Most people want to see the outdoors. Again, I think Mike will be very unhappy if we gave him hundreds of units to rent without windows. Yeah. Okay. I think we can all agree we need windows. Yeah. I guess a question on the guidance. Yeah. I was curious why the top end of the FFO guide stayed the same, just given that all the underlying or most of the underlying contributors moved up at the high end. Is there something that maybe you guys don't guide to that's depressing the top end of the range? Or maybe is there some conservatism built in, just given we're so early in the year? There's nothing that depresses the high end of the range, etc. There's nothing in that regards from a guidance perspective. The only thing I would tell you from the ranges and the shifting of the ranges that you have to keep in perspective is where we started from. That range, that initial FFO range that we gave at the beginning of the year was very wide, right? It was a $0.20 difference. It was probably abnormally wide, relative to typical years and other time frames. I wouldn't read anything into we shifted up the guidance range on revenue on NOI, and then we paired off the bottom end of the FFO range. I wouldn't read anything of not raising the top end, if I'm answering your question. Yeah. It's just kind of a math equation. Yeah. There's $0.05 more of FFO likely to come from operations. You move the midpoint up $0.05- $2.75, and you didn't need the rest of the range. That was kind of what happened. Yeah. Okay. Got it. Thank you. Thank you. Upal Rana with UBS has our next question. Hi, this is Upal in place for Parrell. Could you give us some color on how much of the impact on the extreme residential housing environment has on your business? Are you making decisions as far as rents or potential acquisition or dispositions given what's going on? Are you taking a wait and see approach? Thank you. Pardon me. I didn't quite understand that question. Are you asking what extreme are you referring to? Just the low inventory in housing and some of the higher prices. How is that really affecting your business? Great. Thank you. You're referring to single family housing. I'm sorry, we took that to mean apartments. The whole portfolio is designed not to have a lot of impact given the markets we're in from single family. The fact that single family prices are going up and availability's tight, that's somewhat helpful, I guess, to our business, but it's not as helpful as if we had a portfolio in a market where everyone wanted to be a homeowner right away. You think about markets like a Kansas City or something, where people just, living in an apartment is a transitional state for people with middle incomes, and they want to own a home right away, and there isn't as much purpose to being a renter, as much advantage in terms of amenities in the city center. In our case, our residents are thinking a lot about lifestyle and job proximity and other stuff. Single-family issues are really not terribly relevant to us right now. Okay. Thank you. Thank you. Next we hear from Alex Kalmus with Zelman & Associates. I think you're taking the question. Appreciate the favorable new move-in trends and concession environment, how you're peeling off some of those. I'm just curious how the brokerage commission component plays into your leasing strategy going forward. Yeah, so- 20%, so just curious. Thank you. Yeah. For us, the use of brokers is really heavily concentrated in New York. Right now, I'll tell you, in the first quarter, we are just over, I think, $300,000 in broker fees, and it is truly directed towards the sub-markets where we are still having the most pressure. Gramercy, few assets in the Gramercy sub-market, and Chelsea sub-market is where we will have advertisements where we're willing to pay that broker fees. You could see that $300,000 a quarter. My guess is as the market continues to improve, that our dependency on that brokerage in those sub-markets will lessen. Got it. Thank you very much. Sort of touching on the renewals, maybe in a different way, what occupancy level would you feel comfortable at in your New York and San Francisco markets to sort of get to a more flat renewal rate? Is there any sort of benchmark that you'd look towards? No, because, we're quoting our renewal offers in line with where that future street is expected to be. As we think about pricing trend, net effective pricing trend, as soon as it starts crossing over prior year in any asset or any sub-market, those renewal quotes will go out with an increase. Then we'll start having the conversations with residents. So much of our ability to focus on achieved renewal rate increase is dependent upon what is happening in that direct sub-market around us. What are their options when that renewal offer comes in? As concession use starts to abate, that power in the negotiation shifts back to the landlord. All right. Thank you. Our final question today will come from Nick Yulico with Scotiabank. Thanks. In terms of the concessions, can you just remind us in the guidance, what that assumes in terms of the increase-- I know you're going to continue to have this straight line issue with the concessions, but from a cash standpoint, what are you assuming for concessions for the back half of the year? I know you give the monthly numbers, they've been declining. Do they continue to decline sequentially from here? Do they go to zero? How should we think about that relative to the guidance? Yeah. Thanks Nick, for the question. Our concessions, our assumption and guidance, I'm going to talk from a cash basis, then I'll mention a little bit the amortization, but is that we continue to see the good momentum that Michael Manelis has kind of outlined, and we continue to see the reductions that we mentioned, for instance, between March and April. We continue to think on a cash basis that they will decline. Because of the GAAP treatment and the straight-line amortization, in fact, we think that the cash numbers are going to flip soon, such that the cash numbers are better than the GAAP numbers, meaning you're amortizing more concessions than you're actually granting on new ones. You saw in the first quarter that the GAAP number was better than the reported cash number. I think that's going to flip, and that's what's encompassed in our guidance, if that makes sense. It's a continued decline as we work through the recovery, and we're already seeing that along the way, as Michael outlined. Okay, thanks. That's very helpful. Just one other question on the concession activity. If you look at, I know we keep talking about New York, San Francisco, but these are markets where you did cite concession activity coming down. At the same time, you're still 100, 200 basis points below prior to COVID occupancy. I guess I'm wondering, why, if you're going into the higher turnover season over the next second quarter, third quarter, why, if you're still below on occupancy than sort of long-term goals, why would you be pulling back concessions in the market? I guess I would tell you need to really drill in and understand the assets that we're competing against and what is the occupancy of that sub-market that we're operating in. When we're looking at this, we're always trying to stay, call it 100, 200 basis points above what we would say is market occupancy. Right now, when you're in this recovery phase, the overall market occupancy is not as relevant as drilling into the assets that you're competing against and what are those occupancies. I think this balancing act of clearly in these more hard-hit areas, like the New York and San Franciscos, is to really focus on recovering everything. Grab your occupancy and keep pushing aggressively on rate and dialing back concessions. San Francisco responded well on the pullback of concessions. New York was a little bit more resistant, and a lot of that has to do with the type of ownership that exists there. Yeah. Nick, it's Mark, just to add a little bit to that. Our ownership in New York City, so Brooklyn and Manhattan, as well as in the city of San Francisco, which is where all this action's really happening, that's about 10% of the company. It's a small group of assets. As Michael said, we're very capable of doing both. We intend to raise both rat Diminish concessions and drive occupancy. There may be buildings where we just can't move concessions. Michael, we've got great demand, we just have that demand as super price sensitive, you'll see us just grow occupancy. For the most part now, we're in a better position. That demand we talked about in the fall led to the occupancy improvements over the winter, is leading to the pricing improvements now. Shortly, we hope will lead to the utter abatement of concessions, though that's not in our guidance. We think concessions exist all the way through the fourth quarter, just a lot lower. There's sort of this cycle we're in that I think is a very positive one. Okay. Appreciate that, Mark. Thanks, everyone. Thanks, Nick. We do have a question from Rich Anderson with SMBC. Hey, sorry if they're keeping you on, but that's why they pay you the big bucks. I do have a question about the tail, perhaps a longer tail to this recovery. For as long as I've covered multi-family, you go through the spring and summer leasing season, then when that's over, the year's in the bag, so to speak, you start thinking about the next year. This time, the magic day seems like Labor Day, schools perhaps reopen, offices reopen. You have a different dynamic in terms of economic activity that could extend the activity level within your business. Do you see that as a potential outcome from this, since it's so different than any other environment we've seen that the ability to kind of extend your quote unquote "heavy leasing season" could actually fall into the fall months because of those dynamics? Absolutely. I absolutely could see that playing out. We had great traction in Q3 and Q4 of 2020. From a rent roll perspective, I will have more renewal activity kind of in that back half of the year. It's not a material shift, but it is a shift. I really do think this demand profile and what we used to think of as a normal kind of peak leasing season is going to extend out and go into kind of the later part of Q3, and it could very well. We've seen other recovery cycles continue all the way through and push through the fourth quarter as well. Yeah, just to give you some real-world evidence, we know you're a student of history like we are. The fourth quarter in 2011 for our New York portfolio, same-store revenue growth, again, fourth quarter 2011 was 7.4%, and the first quarter of 2012 was 7.1%. I'm not promising numbers like that. I'm just telling you that when a market's in a recovery, it can perform like that. Our expectation is there will be a very fulsome recovery in New York City and in San Francisco over the next few years. We agree with you. Great. Thanks very much. Thanks a lot. That will conclude today's question and answer session. I'll now turn the conference over to Mr. Mark Parrell for any additional closing remarks. We thank everyone for their interest in Equity Residential and wish you good day. Thank you. Everyone else has left the call. That will conclude today's conference. Thank you for your participation. You may now disconnect.