Welcome to Citi's 2024 Global Property CEO Conference. I'm Nick Joseph here with Eric Wolfe with Citi Research, and we're pleased to have with us Equity Residential CEO Mark Parrell. This session is for Citi clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and at the AV desk. For those in the room or the webcast, you can go to LiveQA and enter code GPC24 to submit any questions. Mark, we'll turn it over to you to introduce the company and team, provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we'll get into Q&A. Awesome. Thanks, Nick. Welcome, everyone. Thank you for including Equity Residential. So to my left, I have Bob Garechana, our Chief Financial Officer. To my right, Michael Manelis, our Chief Operating Officer, and Marty McKenna, Head of Investor Relations. So again, delighted to be here. Not a lot has changed in the five weeks since the earnings call. We did post a management presentation last week, Thursday night, and I'm going to refer to that in a minute. But overall, we see good demand for our properties. We head into spring leasing season. We're seeing increasing foot traffic, applications that are either in line or slightly ahead of what we would expect this time of year. But it is still early in the year. These are low-volume months. Feels good to start this way, but it's not conclusive to results for the year. This demand, coupled with high retention, has allowed us to maintain strong occupancy. So today we're 96.5% occupied, which again, for this time of year, is very good. So I'm going to split our market performance, and I'll be quick here to let Eric and Nick ask questions, and the rest of you split it up into three buckets for you. So two-thirds of the company consists of Southern California and the Northeast markets: Boston, Washington, D.C., and New York. And performance there is very good, with D.C. and New York showing notable strength. Southern California also performing well. We continue to work through the eviction backlog, and together, those markets right now are the engine for us. We remain cautious on Seattle and San Francisco, though we do see good results there to date. Those markets together are about 30% of our NOI. They're both occupied above 96%. That was an intentional decision on our part to use concessions, to use rate reductions, to fill those units in the fourth quarter. But as we go into the busier time of year, we're in a good position. But again, they're volatile markets, and they can move up and down. And then our last bit I want to talk about quickly is our expansion markets: 5% of the company, Dallas-Fort Worth, Denver, Atlanta, and Austin. And there we see the good news is good demand. We do see demand in these markets. We're around 95% occupied. The issue is it is hand-to-hand combat in terms of rate. A lot of competition. Rental rates are under pressure, and tradeouts especially. So you think about a lease written a year ago in what I'll call the better times and a lease now with all that competition, that's a pretty significant approaching double-digit decline in tradeout rents. So before I get into the reasons to own the company, I'll just sum it up by saying we've been lucky enough to be together as a management team for five years from 2019 to now, and this is the most optimistic and positive we've been this time of year on a relative basis. We feel great about where we stand operationally. As we look forward towards the investment climate, not a lot for sale, but we're well-positioned to finish that pivot and buy into those other four markets and create some better balance. So Nick, if I was given the top reasons, those would start with the supply and balance in the Sunbelt markets and the supply balance, by and large, in our markets. Big advantage, I would say, sector above-sector average NOI and FFO growth for our company is another reason to own us. I also think the simplicity of our model will be more appreciated. So our company doesn't have a lot of preferred stock investments, doesn't have a lot of overhang from development funding, very straightforward. So our NOI production is transmitted down to the bottom line, and you see that number identical to our FFO growth, and that isn't common in our sector this year. And finally, I'll just add, I think we're really well-positioned again on this pivot. I mean, there's a lot of product that we think will come for sale in Dallas, in Denver, in Austin, in Atlanta. We haven't seen it yet, though, but we think when it does come, we'll be in a good position to acquire. So I'll stop there. Great. I think we have a record here in terms of we have six audience questions already. Very highly engaged audience. This is a record. Congratulations. We'll get to those in a second. But I think you said a moment ago that this is the most confident you've been at this point in the year. Did you say something like that? Positive. Most positive you've been? I'm a very positive individual. Okay. Why is this the most positive that you've been? Well, I use the term relative, though, in that because I do think demand is good everywhere, including in these expansion markets. That's what we like about places like Dallas and why we do want exposure. But the supply is very significant, and that means it's going to be a couple of years of tough results in that market. But in places like New York, or at least where we do business, there isn't much supply. We're 97% occupied at this point, Eric. So that's the source of our optimism. Certainly, the economy can change. My cautionary notes about it being early in the year still apply. But being 97% occupied on the East Coast, feeling good about LA and the progress we're making on the eviction stuff, and feeling, I think, good as we could hope in Seattle and San Francisco now, I think that's good cause for optimism. Gotcha. So if current obviously, conditions can change. We see that every single year. But if the current conditions persist, I mean, is that 2% sort of rent growth that you're thinking about for this year? That's just out the window. You're going to see something more like 3%-4%. If you have a continuation in this environment, what's going to look like? I want to leave something for the April call. We'll talk more about it then. I mean, I think in April we'll update you, but the most meaningful update really will be July because we'll be far enough through to give you that kind of information. But right now, we feel good. Okay. There's a chart in your deck that shows the current pricing trend versus average pricing trend. I'm sure that's partly why you're feeling positive at this point in the year. I guess my question is, if you look at that chart and you see that trend the way it starts the year, I mean, is that a good forward indicator of what's going to come during the peak leasing season, or does it really just not matter? It's, "Hey, February was better than we thought"? Yeah. I mean, this is Michael. I think the way to look at that, and for those online, it's page 23 in our investor presentation that we published. When you think about rent seasonality, you look at the pricing at the beginning of the year. If every one of our units was priced on an unaffected basis, and then you snapshot yourself at the beginning of March, a typical rent seasonality curve would be about a 2% rent growth from January 1 till that point. Right now, what you're looking at on that chart shows about a 3% growth. Some of that is because we've been able to pull back on some of the concessions that we've been using in Seattle and San Francisco. So that kind of boosts that line up. When you pull back a couple of weeks, that's like a 4% pop in it by itself. So the confidence right now that we see, it is early. These are low-volume transaction months. But the fact that the trajectory of the line is 1% over what it normally would be is a pretty good position to be in into the spring. Now, it can absolutely change. You can see the demand profile soften as you work your way through the spring, and then you'd see our tone stay. The peak leasing season is probably more going to be in line. Right now, if this trajectory continues, right, that's just great because the more leases we write each and every day right now that's just sequentially building translates into revenue growth for this year. But it is very early still. Just to add, one other big lever for us is the continued improvement in bad debt. For the first quarter, Bob and the team assumed effectively flat results to the fourth quarter. That, as we put in the deck, remains true. We do expect a modeled improvement through the second, third, and fourth quarter. Bob, maybe you could give some detail on that. If that doesn't happen, Eric, that's again a reason for concern. If it happens faster, it'll be an accelerant. Yeah. So as we discussed on the fourth quarter call for bad debt, we assumed that we'd have a 30 basis point year-over-year improvement. And as Mark mentioned, that that improvement would come in Q2, Q3, and Q4. So obviously, anything that would either accelerate that improvement and make it greater would allow you to perform to the upside. But correspondingly, if we don't see that improvement, we would have a downside kind of risk there. Sure. In that estimate, the second, third quarter, that's not really a conservative placeholder. That's just saying this is the number of months our average tenants have been delinquent, and this is how long it takes to get through the court, and this is when we're going to see the improvement. Yeah. And that can be a volatile thing because it's hard to predict how fast the court system will be, etc. But as I also mentioned on the call, in the fourth quarter call, our presumption, to your point, Eric, is fairly conservative of where we land the year. So we are assuming that we're going to land at 1% of same-store revenue, bad debt, or a charge-off. And to give the audience perspective, pre-pandemic, that would have been something like 50 basis points. So our base case does not presume that we are going to get all the way back to pre-pandemic levels, but rather still remain elevated at the end of the year. Got it. And you mentioned that you were going to give an April update at some point. But I guess if you're just thinking about things today, I mean, I would think on average, you're signing leases something like 45 days ahead of when a tenant moves in. What's the average amount of time that it takes? So if someone signs a lease today, on average, they're moving in when? Yeah. It's within sight of a month. It's not as long as the 45-day window. A lot of the action is probably more like a 21-day lead time to it. But again, every lease that we're writing, it's improving every single day. And sequentially, we're seeing these rents go up every week. So that's a positive sign for us. So the new lease tradeout is improving at a pace a little bit better than what we would have expected. And right now, given the demand profiles we see, we would expect that to continue for the next couple of months. The other piece of the equation besides the new lease side is the renewals, which is a more constant number for us. We have our offers out in the marketplace for the next three months, and we're quoting somewhere around just north of that 6% range and have a high degree of confidence that we're 4.5%+ on what we'll achieve from those quotes in the marketplace. Given the strength and the position that we have, it gives us a lot of confidence to start tightening up some of those negotiation bands and just push that achieved renewal increase a little bit higher. Got it. So you have very good visibility to pricing trend over the next 30 days. And then beyond that, it's really just looking at renewals and sort of understanding what the acceptance has been there and sort of the pushback and using that as a sort of forward indicator. I guess what I'm trying to get is, what's the best leading indicator for pricing power in your business? What are the things that you look at today that say, "Okay, a month or two months from now should be strong"? I think it starts with just what we would say is eyeballs on the website. What does that initial traffic look like? How is that traffic converting to foot traffic, those people that are willing to take some time and go tour the properties? And then our ability and look at that closing ratio from that tour to the application. That whole lead time is probably closer to your 45-60-day window from the time you first start looking and getting interested. So we got a lot of good indicators into this overall demand profile right now. It can shift on you. We saw that happen after we ended peak leasing season in August of last year. We saw the San Francisco and Seattle markets really kind of put a brake on the demand profile and cause the concessions to tick up. I don't want everybody to think this is just a linear equation that's off the charts. It can put a pause on you. Got it. And we have a couple of questions on San Francisco, so maybe we'll also group it with Seattle. But what do you think's driving the, I mean, I've heard from one of your peers as well that they were seeing pretty strong results on the West Coast thus far. But in the past, you've had a little bit - I don't know what you'd call it - of fake-out of demand, if you will. Also, a lot of the growth seems to be just stemming from concessions, which are coming down, which is not necessarily, I mean, it's a sign of things turning, but still nonetheless. So I guess the question is sort of, do you think this year could be sort of different in terms of you finally see the demand return to these markets that we've been missing for the last couple of years? If so, why? Yeah. Our perspective remains that it's likely a bit of an elongated recovery, that we really need job growth, probably especially in San Francisco, led by the tech industry. There's been some good articles out about a lot of the tech layoffs were except for maybe Meta, where really shifts. They just let go some folks and hired in other areas like AI. I think we need to see net hiring. I think continued improvement in conditions on the ground, which we do see. We do see circumstances on the ground in the city of San Francisco and Seattle improving. They're not what they need to be, but they're better than they were, for sure. You have an important election in both the City Council in Seattle and the mayoral race and some judgeships in the city of San Francisco where people, again, are going to weigh in on their sort of viewpoint on law and order and things like that. Those are important races that we're attuned to. So I'd say it feels a little better on the ground. The conditions do. I think you do look at the city of San Francisco as, what, 18% below pre-pandemic rents. And I'm not sure there's any other major market where there's that kind of bargain of sorts to be had where nominal incomes for our renter cohort in the Bay Area are up 30% since 2019. So folks can afford it if San Francisco is, again, a premium experience. Conditions on the ground, we think, are improving. And at some point, that'll be true. It needs to be coupled probably with some return to office activity just to create some street activation, Eric, and probably a little bit more hiring specifically in the city of San Francisco as well as in and around downtown Seattle. Got it. And I guess when did the concessions start going down for Seattle and Northern California? Because you made a comment on the call, something to the like, "Just if we're able to just remove concessions, that implies a very strong growth rate for this year, even with a flat market rental growth rate." So just trying to understand when the concessions came down. And if you were able to keep that going, what type of growth you would see in those markets purely just from taking back concessions this year. Yeah. So I think clearly, as soon as we saw the occupancy lift that was somewhere right at the tail end of December, we got that confidence to start pulling back on those concessions. You heard us talk about that on the January call. It hasn't stopped. We continue to sequentially pull back. What you're doing is you're pulling back those concessions until you see the point where you're not getting the application volume to maintain that occupancy at the level. To date, in those markets, we're still doing a lot of concessions in the city of Seattle and downtown San Francisco. It's a little bit lower than what we were doing before, but it's still 40% of your applications are receiving over a month in concessions. That's still a high volume of concessions relative to our historical trends that we've seen in those markets. But when you move over and you start looking at the suburbs or the Easts ide of Seattle or the East Bay and the South Bay, like those, we pulled back a lot of the concession use. So the lift relative to the year, if you really pulled back and had no concessions all year long, if you just think about that math, if you're doing 40% of your transactions over a month, I mean, you're going to get 4%+ revenue lift off of that pullback. I don't think that's a realistic view given what we're seeing today. You would need a real acceleration of job growth and a huge insurge of demand for us to really get to those markets to pull back. Because my guess is what you're going to see is the sequential build will continue. The demand profile will continue to grow. Application volume will grow. Then you'll hit that kind of end of peak leasing season, and you'll start to see that softening. My guess is that's when the concessions will come back. Got it. I guess you give the averages across your portfolio. If I look at that pricing trend, are Seattle and Northern California above the sort of overall? They're above primarily because of that concession pullback. Got it. And then we have a question on the Sunbelt. And I think it's sort of a little bit similar to what you talked about on the call, which is effectively like, at what point do you expect to see a turnaround in market rental rates in the Sunbelt market? And I guess how are you sort of thinking about that in terms of trying to time your acquisition activity? Yeah. So I mean, the answer's sort of the same on the first part of it as on the call. I think these are markets that have great demand perspectives. And again, for us specifically, Denver, Dallas, Fort Worth, Austin, and Atlanta, we're not interested in every market in the Sunbelt. Those are the ones we're interested in, plus Denver. My expectation, our collective expectation, is you'll have pressure all through 2024. You will see, and we do see already, sequential improvement. Rents are obeying in those markets the normal pattern of starting to improve during the late winter and spring. And that's what's going on. It's just they're not improving that much. And it is about what we expected. And they continue to be under pressure. And the tradeouts are hugely negative. So again, I signed a lease with Company X in Atlanta in February of 2023. And now I'm moving out. That new lessee is going to be 8% or more lower in terms of lease value. And that's pretty significant. So I think that goes on through the whole year and into next year. And I think same-store revenue, again, is worse in 2025 than in 2024 because you need to reprice the entire rent roll. All of 2024 will be about repricing every one of the leases, by and large. So by the time you get to 2025, you'll have the effect of all your leases, or almost all of them, being much lower, where in 2024, you still have the benefit of some of your 2023 leases written at those higher levels. So that's how we see it. That hasn't changed. In terms of our opportunity, I still split it into two pieces. If you want to do the deal now, you probably like your basis if you can get it. But again, we're not seeing a lot trading. But you may be stuck with a couple of years of negative NOI growth, right, per my comments of a moment ago. If you wait till later this year or the beginning of the next and try and buy some of the kind of high-quality assets we want, my guess is the price is higher, but you'll endure a lower amount of same-store NOI decline. May be beneficial, the dollar cost average into that equation. But the big problem we're having now is just not much for sale. There just continues to be very little product out there for us to acquire. What is trading is small or trading to a family office or a less efficient buyer at a price we wouldn't pay. So when I think about your guidance, obviously, it's back-half-weighted in terms of acquisitions. It's really just a function of product that's on the market. If you had the opportunity today, it's nothing about the Sunbelt waiting for the right time. You can price that uncertainty in. If anything, I would think it might be actually more advantageous to buy today because you have more uncertainty that's priced in, plus hopefully, you're at higher rates. And rates could come down later this year, at least based on the curve. So I would assume that you're trying to kind of get it done sooner, if not as soon as you can, not rather wait. I wish the market was doing that logical thing you're saying and selling into that, but it's not. I think, and we are spending a lot of time thinking and researching this, it appears to us there's a lot of developers that are holding on for dear life feeding deals. They probably made a lot of money in 2021 building assets, then had the big run-up, and they sold. And so they're hoping that maybe the Fed will lower rates sooner than people expect, and cap rates will therefore decline, and they'll get bailed out. That's one way we speculate. We wonder if the banks are being very aggressive in pressing their borrowers right now. So I guess, Eric, I tell you that all of what you said should be true, and there should be great basis plays. We keep talking about cap rates, but we talk just as much about replacement cost. It'd be great to buy some of these assets at a 5.4-5.5 cap rate, about the cost of debt that we would have for 10-year money, about what we think we can sell our older product on the West Coast as well as in Washington, D.C., and New York for. That would make a ton of sense at a 25%-30% discount to replacement cost. We've seen a few of those deals, and we hit them, but we don't see a lot of them. And what I'm starting to see is cap rates going closer to five. And that's harder for us to get our head around. Still might make sense, but it's a little bit tougher. And then I think there's a home builder that has sort of a portfolio on the market. I don't know if any of that is sort of interesting to you. But then I also think about some of the public companies. You had one that is increasing their stock or purchases, selling a little bit more product. Is there any opportunity to kind of go directly to some of these ones that have sort of larger Sunbelt portfolios and sort of transact with them directly, or are they just simply not sellers in this environment? I mean, it speaks to what you were talking about a second ago. But there are a few portfolios on the market, and there are some public companies that have a pretty bad cost of capital and probably could use the proceeds to repurchase stock or something that's capital. Yeah. Well, that'll be interesting to see that play out. No. I mean, the portfolios that are out there are having a harder time trading. The bigger the deal, the less interest there generally is. Right now, the deals that have been sold have been small. So we'd love to participate in portfolio transactions. And we're always looking at things like that, Eric. But right now, the smaller if you need to sell something, it being a $50 million or smaller asset is to your advantage. It being $100 million or being a portfolio is to your disadvantage because there's just fewer people with that much capital willing to do something right at the moment. We are one of them, and we're looking at all those kinds of transactions. But again, nothing's come to pass. You mentioned the lack of a preferred book or mezz lending as a benefit. Clearly, we've seen some dislocation in that market for those that do have that exposure. If there's nothing transacting and that's a bit dislocated right now, is that an opportunity to kind of find deals by providing that kind of mezz or preferred lending and then hopefully buying in the future? Yeah. If it's a probable path to ownership, I'd say yes, Nick. If instead it really was almost certainly a financial investment, I'm less interested. I mean, the position the board and the company's taken over time is you do that trade, then they pay you back in two years. And now you're on the hamster wheel where you need to find another 12% preferred. If you do it conscientiously, it takes you just as long to underwrite that as if you were building or buying that asset on your own. So why not just build or buy that stream of income indefinitely? But you're right. If there was a sufficient dislocation, we could help someone and end up being preferred buyers of that product. That would be interesting to us. But if we're just financiers, that's of less interest. There's an audience question. I think it effectively is asking, since it's challenging to find acquisitions, does it just make more sense to have share purchases in the near term and how you're thinking about that versus other capital opportunities? Yeah. Why don't you talk, Bob, about the disclosure? We made some disclosure on share buybacks. Yeah. So that's a good question. You saw us in the fourth quarter repurchase a modest amount of stock. You also disclosed on page 30 of the investor deck that we continue to repurchase stock into the first quarter. As we've talked about in the past, repurchasing stock requires a certain degree or certain requirements in order to kind of make it make sense, right? One of them is that ability to arbitrage between the public and private space or the private and the public space, which we were able to do by selling assets, which are some of our older assets, at a level of, call it, 5.5 caps or so, and then repurchase the stock at an implied cap rate that's north of six. So that's, from an economic standpoint, made sense. So check the box. Therefore, you saw us do some of the repurchase. But it also has implications in other areas, including the capital structure of the company. So we're very cognizant of that and what it does to leverage. Fortunately, we're at a very low leverage point right now. It'll go about 4.2x. So we do have leverage capacity, which is another factor that implicated why we chose to repurchase stock. And finally, there are tax considerations because, as the audience knows, REITs are only able to retain so much capital. And you have tax gain that you have to take into consideration. And so that's the third factor. So we do think it's a good investment opportunity. That's why we exercised it in the fourth quarter and the first quarter. But we keep those other factors in mind as we think about size and ability to buy back more. Got it. And then in terms of thinking about sources of capital, we often hear companies say they're selling their older, higher-CapEx properties. The sort of gap cap rate is high, but the effective cap rate is lower just given the high-CapEx burden. How much of your portfolio would you say falls into that sort of older category that you'd be willing to part with? Maybe it's nothing. But just curious, sort of, is there a certain percentage of your portfolio that's sort of just not generating much from a cash flow perspective because the CapEx is high? Yeah. So being old alone won't do it. We have some older assets that are some of our best same-store revenue performers. You saw us kind of increase, Eric, the amount of capital we're putting in the properties, doing more renovations and stuff like that. So we'll keep older product. We'll buy older product and renovate it too if it makes sense. So I don't have a percentage for you. In every market, when you have a portfolio as big as ours in Seattle, we have a property on the market right now that's small in downtown Seattle that is as old and creaky as I am. It's 50+ years old. And it's a nice location, but we don't believe the capital play. And the buyer has a renovator and believes in it. So there's always some of that stuff. But sometimes we want to do the renovation. So age alone isn't it. But we've got a handful of these assets in every market. And then there's a few markets that we would just like to lower exposure, like the Bay Area, where the assets, frankly, aren't that old. We just have more of them than we need. We're just over-indexed to a market. And there you might see us do a JV. You may see us do a large-scale, pardon me, disposition, just not right now because the market's not available. I guess if you could scale into one market today, what would it be? Well, I think Dallas has got some great demand characteristics. I think we're feeling least bad about Dallas among our markets right now, these expansion markets, in terms of performance the first couple of months. So that's a market where you got a lot of growth still, a pretty diversified job base, so a good number of positive things. But again, it's got a ton of supply. And I would say it is a market where permits haven't declined and starts haven't declined quite the way we were hoping. So that has to be kept in mind. You might love the demand, but if the supply keeps coming, that might be a hard market. You just mentioned supply a moment ago. Do you think at this point we can say that 2026 will be one of the lowest supply years you've seen, or is it too early? I mean, will it be as low as coming out of the Great Financial Crisis where the numbers were sub-1% of stock? May not get quite that low, but it'll be very low. I guess if we were to think about the shape you're already seeing growth, and it sounds like hopefully, you'll do better than 2% blend. It's in your guidance based on the current pricing trend. But if we had that level of supply today, what would you be guiding towards? So let's just say you could forecast 2026 supply. You put it on today's economic environment. Kind of rent growth, are we getting from that? I don't know. I feel like I put a chicken on top of a penguin. I don't know how to do that math. Obviously, the less supply, the better. Some of our markets are close to that subhistorical level, like Orange County and places like that, at really low supply. Those markets are going to put up, hopefully, 4% same-store revenue numbers and better. I guess I'd say it's hard for me to say, but it'd certainly be materially higher if we had a lot less supply in, for example, Seattle. Then even in San Francisco, we have little supply. There's a fair bit of it in the South Bay. There's just a great deal of demand in San Jose. So it's felt okay. But if there was less supply, the demand would be met by even higher prices, so. At what point does development start to get more interesting for you? Yeah. You've got that question about the choices in capital allocation. That would be the last one, Nick. There is a development deal we're going to start in Boston that is a suburban deal. It's just really hard to buy there. The cap rate, the yield we'll talk about on the call, it's a good deal and all that. It's just mostly because it's hard to buy. So if I was rank ordering capital allocation with the board right now, we'd put renovation, investing in our portfolio near the top, buying our stock back up to some limit of some number that isn't going to push us on leverage. And then I'd put acquisitions. And then acquisitions, if you match them with dispositions, you've done something strategically, but you haven't made the company bigger. We'd be happy to make the company bigger. But for that, the price has to be a little more compelling for us to start to borrow. And then I'd put development after that. I just don't see the need to do that when there should be so much product available to buy without the risk. I guess what level of sort of rent growth do you think you'd need to see for developers to come back in sort of a more normal amount of scale, if you will, product? We tried to do the math backwards. It also depends on the costs and how those change. Certainly, those are moderated in some markets, gone down, what happens to capitalized interest. But in some of these markets, it's going to take quite a bit. And developers are rational in terms of building where they're given capital to build. So I think you're likely to see more development in some of these suburban locations than in some of the urban ones because that's where they're being paid to build. And then turnover has been among the lowest, I think, you've seen in your history. If you were to look at sort of the markets where that's occurring, is that occurring just in the markets where it's the sort of hardest, if you will, the most expensive to buy homes versus history? Is there any sort of logic to sort of which markets are the lowest turnover? Just wondering if it's correlated to the amount of home supply that's on the market. I think it's partly due to that correlation. So clearly, the percent of residents moving out to buy a home, it's at a historical low. It's like at 8% or less. Typically, we would be running at about 12%. So most of our established markets are running with record low turnover. Part of that is also because we put a lot of focus into our retention process, our renewal process, our customer service aspect to make the resident we have data and analytics driving a lot of this renewal process to ensure that we walk away from there with the highest retention possible, which in turn lowers the turnover. But again, there's not a lot of options right now for them to go. The lowest turnover that we see in the portfolio, New York, we're renewing 70% of our residents on that, so super low. Go to the expansion markets, we're renewing like 50% of our residents. So you see turnover kind of ticking up a little bit higher. Gotcha. And I have another chicken on top of a penguin question here for you. But let's say Costa-Hawkins gets repealed. I mean, I don't think it will. I don't know why it should. But let's say it does, right? Would that materially change your view of California in terms of investing there? Well, just to remind everyone, so that's the ballot initiative. There'll be one in November. Industry's beaten it twice. It's super well organized this third time. We're going to make that argument to the people of the state of California again. I'm cautiously optimistic they'll understand that housing supply is met when there's motivation to build more units, not when that motivation's removed. I guess I don't know how to answer that except to say it would then require you to think about each city because what Costa- Hawkins would then, if it was repealed, would do would let every city then decide on its own what its rent control regime would be. And we did leave places like Berkeley and most of Santa Monica because we were anxious about things like that. But we are in places like Los Angeles and the city of San Francisco that could have that kind of rent control. So that would certainly not help our opinion of California, I would say. So I don't know how to answer that. I don't know if the legislature would intervene to change some of the rules around too on top of that, like, again, prevent rent control for the first 10 years in order to encourage construction or whatever. Rapid fire. What will same-store and NOI. growth be for the apartment sector overall next year in 2025? So we usually decline to answer this question, but we're going to give it a whirl. The whirl is, I think, modestly higher in 2025 because we have a positive view on job growth and, frankly, a negative view on the Fed cutting rates. If you are a predominantly coastal owner, I think it is a modestly to fairly bit negative in 2025 if you're a Sunbelt owner. That's absolute or relative to this year's growth? Relative to this year's number. Will the apartment sector have more, fewer, or the same number of public companies a year from now? I love these trick questions. I would just say I don't have any particular information to share. If I did, I couldn't. I think some of the smaller ones, sort of $6 billion and smaller, there are a fair number of those companies. They have interesting niches that you could see private folks take them out or whatnot. The larger ones, I don't see the impetus at the moment. Perfect. I think you already answered the third one, so appreciate it. Thank you. Thank you.