Operator:
To ask a question, press 1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, press 2. If you are using a speakerphone, please lift the handset before asking your question, and please refrain from typing and have your cell phones turned off during the question and answer session. Your host for today's conference call is Matthew Grover, Senior Director of Investor Relations. Matthew Grover, you may begin your conference call.

Matthew Grover:
Thank you, and welcome to AvalonBay Communities, Inc. First Quarter 2026 Earnings Conference Call. Before we begin, please note that forward-looking statements may be made during this discussion. There are a variety of risks and uncertainties associated with forward-looking statements, and actual results may differ materially. There is a discussion of these risks and uncertainties in yesterday afternoon's press release, as well as in the company's Form 10-Ks and Form 10-Q filed with the SEC. As usual, the press release includes reconciliations of non-GAAP financial measures and other terms that may be used during today's discussion. The attachment is also available on our website at investors.avalonbay.com, and we encourage you to refer to this information during the review of our operating results and financial performance. When we get to the question and answer session, we kindly ask participants to limit their questions to one and rejoin the queue if you have any follow-up questions or additional items to discuss. With that, I will turn the call over to Benjamin Schall, CEO and President of AvalonBay Communities, Inc., for his remarks. Ben? Thank you, Matt, and thank you, everyone, for joining us today.

Benjamin Schall:
I am here with Kevin P. O’Shea, our Chief Financial Officer, Sean J. Breslin, our Chief Operating Officer, and Matthew H. Birenbaum, our Chief Investment Officer. As is our custom, we have also posted an earnings presentation, which Sean and I will reference during our prepared remarks before turning to Q&A. Starting with the key takeaways on slide four, our first quarter results exceeded our expectations, driven by lower expenses, higher development NOI, and the benefits of our share buyback activity, which was not included in our original outlook for 2026. Our portfolio is well positioned heading into peak leasing season, with very low turnover, solid occupancy, and rents tracking as expected through the first four months of the year. We are also benefiting from the ramp in development NOI in 2026, which will further accelerate during the year and into 2027. Leasing velocity at our projects in lease-up has been strong in a typically slower first quarter, which bodes well for the upcoming peak leasing season. During the quarter, we completed $340 million of dispositions and repurchased $200 million of our shares at an implied cap rate in the low 6% range. Turning to slide five, same store residential revenue grew 1.6% year-over-year, with occupancy up 10 basis points to 96.1%. During the quarter, we started nearly $190 million of new development, with two starts in suburban New Jersey, and we are on track for $800 million of planned 2026 development starts with projected initial stabilized yields of 6.5% to 7%. Our performance in Q1, both operationally and from a capital allocation perspective, sets us up well for the balance of the year. Slide six details the components of our favorable first quarter core FFO per share results relative to our initial outlook. Of our $0.20 of NOI outperformance, 20% was revenue-driven and 80% was attributable to lower operating expenses. On the expense side, certain operating costs budgeted for the first quarter are now expected to be incurred over the balance of the year. Other drivers of our outperformance for the quarter were $0.01 of favorable development NOI from our lease-up communities, as well as $0.01 from our share repurchases in the quarter. Looking ahead, slide seven highlights several factors that continue to support apartment demand and our operating outlook as we move through 2026. First, market occupancy in our established regions remains solid, supporting near-term fundamentals and allowing us to enter the peak leasing season with relative strength. Second, our customers continue to experience healthy wage growth, which will support rent growth throughout the year. Third, the supply backdrop remains very constructive in our markets, with new market-rate apartment deliveries expected to stay at historically low levels for the foreseeable future. And fourth, the economics of renting versus homeownership remain very favorable. During the quarter, the percentage of customers leaving us to purchase a home declined to 8%. Taken together, these factors give us confidence in the resiliency of apartment fundamentals and in the positioning of our portfolio as we move through the balance of the year. Slide eight highlights the strength of our operating and development capabilities to drive differentiated internal and external growth in the years ahead. On operations, we continue to leverage our scale and leadership in centralization, technology, and AI to deliver superior service for our residents and drive operating efficiencies and incremental NOI. Our forecast has us on track to generate $55 million of annual incremental NOI by year-end, our original Horizon 1 target. Our next set of priorities includes the further deployment of AI solutions and our seamless digital self-service experiences, additional enhancements to our technology and data platforms, and further optimization of neighborhood and centralized staffing, all on our way to our Horizon 2 target of $80 million of annual incremental NOI in the coming years. On development, our sector-leading platform is poised to contribute meaningful earnings and value creation in the coming years, with $3.5 billion of development underway, with a projected initial stabilized yield of 6.3% at quarter end. These investments were match funded with capital raised over the past three years at a weighted average initial cost of 4.9%. This spread is well within our strike zone, targeting yields of 100 to 150 basis points above our cost of capital and underlying market cap rates. These deals were conservatively underwritten on an untrended basis and, in many instances, are seeing favorable construction cost buyouts relative to pro forma. These communities will also deliver into an operating environment with meaningfully less new supply. With this tailwind of activity, we continue to expect a meaningful ramp in development NOI and are projecting $47 million of development NOI this year, increasing to $120 million in 2027. Turning to slide nine, we had three dispositions close during the first quarter, and we continue to deploy capital into accretive share repurchases. Beyond crystallizing the significant public-private disconnect in asset values, selling 40-year-old high-rise assets improves our go-forward cash flow growth profile, particularly after factoring in CapEx. Including our repurchases last year, we have now repurchased $690 million of our stock and have $914 million of remaining authorization. In summary, we have a high-quality portfolio well positioned heading into the peak leasing season, operating and technology initiatives that continue to drive internal growth, and a development platform that we expect to contribute an accelerating stream of earnings over the next several years. With that, I will turn it over to Sean to walk through the operating environment and leasing trends in more detail.

Sean J. Breslin:
Thank you, Ben. Turning to slide 10 to address recent portfolio trends, year-to-date asking rent growth has been pretty consistent with historical norms and our original expectations for this year. Since January 1, the average asking rent for our same store portfolio has increased in the high 4% range, and, importantly, the growth we have experienced this year is well ahead of what we realized in 2025, setting us up well for better rent change as we look forward. Turning to slide 11, our same store portfolio is well positioned as we look ahead to the peak leasing season. Occupancy has been north of 96% and trending modestly ahead of our budget. Turnover remains well below historical norms; it even ticked down 50 basis points compared to Q1 of last year, supported by a variety of factors, including a historical low 8% of residents moving out to purchase a new home and declining new supply in our established regions. As a result, the number of homes available to lease has been lower than last year and has contributed to the 260-basis-point ramp in rent change we have experienced since the beginning of the year. Looking forward, we expect a continued acceleration in rent change. Renewal offers for May and June were delivered at an average increase in the 5% to 5.5% range, which is about 100 basis points higher than where we sent offers for February and March. In terms of regional color, the stronger performers continue to be in the New York Metro Area and Northern California, both of which produced revenue growth slightly ahead of our budget through Q1. Within the New York Metro Area, the strongest markets were New York City and Northern New Jersey. In Northern California, San Francisco has been the strongest market, followed by San Jose and then the East Bay. The entire region has benefited from relatively healthy net job growth over the last few quarters, so the strengthening we have experienced in San Francisco and San Jose started to spill over into the East Bay this past quarter. The Mid Atlantic also outperformed our revenue budget for the quarter, albeit modestly, with slightly higher occupancy across the region and greater other rental revenue. With the hangover from job cuts over the past year starting to fade, we believe the meaningful reduction in new supply will help support the stabilization of the Mid Atlantic region sometime this year. I would not say it has turned the corner just yet, but it is definitely more stable than mid to late last year. In terms of the weaker markets, Boston, Los Angeles, and Seattle modestly underperformed our revenue expectations during the quarter, and the other regions were collectively on plan. Moving to slide 12 to address our lease-up portfolio, we generated very strong leasing velocity of 32 per month during Q1, well ahead of our historical velocity of 23 a month, and we generated that velocity at an average effective rent that is slightly above our original pro forma. It is clear our customers value the new differentiated product we are delivering in these various submarkets and selected an average lease term that exceeded 15 months during the quarter. The occupancies that result from our leasing activity will continue to support the meaningful increase in development NOI projected for this year and into 2027 as Ben noted earlier. Overall, we are off to a good start this year with same store metrics trending at or slightly ahead of expectations, strong leasing activity at our lease-up communities, and the recycling of capital into buybacks at a compelling value. I will now turn the call back to our operator to begin Q&A. Thank you.

Operator:
We will now open the call for questions. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. To get to as many of your questions as possible, we kindly ask participants to limit their questions to one. You can rejoin the queue after with any follow-ups. Our first question comes from James Colin Feldman with Wells Fargo. Please proceed with your question.

James Colin Feldman:
Hi. Thanks for taking the question. If you could provide an update on your thoughts on hitting your new renewal and blend guidance for the rest of the year. You still have a pretty meaningful ramp, so can you remind us of the math behind it and what kind of tailwind that gives you? And then as you think about the markets that are doing better and worse, and the expansion markets, how they fit into the story—what gives you comfort on keeping the guidance where it is and your ability to hit those numbers?

Sean J. Breslin:
Hey, Jamie. In terms of the outlook, to remind everybody, we expected rent change to average 2% for the calendar year 2026, which reflected the first half forecast at 1.25% and the second half at 2.5%. Breaking it out between move-ins and renewals, we reflected move-ins being about 0% for the year and renewals averaging around 3.5%, blending to that 2%. As I mentioned in my prepared remarks, asking rent growth is pretty much tracking about what we expected; it is actually slightly ahead. We came out in the first quarter slightly better than we anticipated, and we have pretty good momentum going into the second quarter. You can interpolate the math required for Q2 to get to the 1.25%, and we feel very confident we are in the right strike zone to hit those numbers. In terms of markets, momentum is certainly strongest in the New York Metro Area and the Bay Area. It is nice to see strength spill over into the East Bay, which typically lags San Francisco and San Jose. The expansion regions are collectively pretty much on track—some slightly ahead, some slightly behind, but as a basket, on plan.

Operator:
Thank you. Our next question comes from Eric Wolfe with Citibank. Please proceed with your question.

Eric Wolfe:
Good afternoon. It looks like the percentage of available homes in April is down year-over-year, and you mentioned very low turnover in April as well. Does that allow you to be a bit more aggressive on asking rents and new leases going forward? Maybe some thoughts on what the current data is telling you about pricing power into May and early results on new leases in May?

Sean J. Breslin:
Yeah, Eric. Based on what we saw in the first quarter, and as Ben indicated in his prepared remarks, we are slightly ahead of our revenue plan— a little bit on rate and a little bit on occupancy. Looking forward, to get to our 1.25% blended for the first half, April started in the high-1% range, almost 2%, so we think we are in good shape overall. Low turnover and low availability continue to support slightly better pricing power. That is certainly better than 2025, where around this time of year things started to soften. The lines continue to spread further, which bodes well for the rest of the leasing season and the second half of the year.

Operator:
Thank you. Our next question comes from Stephen Thomas Sakwa with Evercore ISI. Please proceed with your question.

Stephen Thomas Sakwa:
Thanks. I wanted to focus on dispositions and the buyback. How aggressive or large would you be willing to pursue both sides of that equation, given the dislocation we have seen in apartment valuations of late?

Kevin P. O’Shea:
Sure, Steve. I will offer a few comments. We are in a very strong position to create value through both development and share buyback activity, supported by our balance sheet and continued access to the asset sale and debt markets. First, buybacks and development are both highly attractive to us today; it is not a binary choice. At current pricing, our stock implies a cap rate in the low 6% range, which makes repurchases attractive and immediately accretive. At the same time, development remains compelling, with projected initial stabilized yields in the mid-6% range or higher, while also driving longer-duration earnings growth and portfolio refreshment. Second, our capital plan for the year contemplated that we would be a net seller of about $100 million—roughly $500 million of dispositions and $400 million of acquisition activity. Year-to-date, we have completed $340 million of asset sales and $200 million of share repurchases, which has effectively replaced a portion of the acquisition activity we originally planned. Third, we are already marketing additional communities for sale, which will provide additional proceeds. If our stock remains attractively priced, we would consider additional repurchases and do so instead of acquiring the remaining $200 million of acquisitions in our plan, on a leverage-neutral basis. How much beyond that? We are open to doing more and are prepared to be nimble, while preserving our balance sheet strength and flexibility so we can deploy capital to the highest and best use available. I would not put a single fixed number on how much more we could flex dispositions up to fund buyback activity. The ultimate level will depend on the timing and amount of future asset sales, the valuation of our shares at the time, and the remaining capital gains capacity we have. In a normal year, without special tax planning, we typically have about $100 million in disposition capacity where we can keep the proceeds. We also have a very clean tax position and could use one-time levers to increase disposition capacity, with proceeds available for any purpose, including buybacks.

Operator:
Our next question comes from Jana Galan with Bank of America. Please proceed with your question.

Jana Galan:
Thank you, and congrats on the strong start to the year. A question on the decision to maintain the midpoint of FFO guidance despite the $0.05 outperformance in the first quarter. You said close to $0.02 is expenses that may be incurred later in the year, but you are also benefiting from share repurchases being larger and earlier. Can you walk us through that?

Kevin P. O’Shea:
Sure, Jana. We think affirming guidance is the disciplined and appropriate decision today. We are off to a strong start with revenue trends on track, a first-quarter earnings beat, and completed buyback activity that should add a couple more cents of incremental earnings as the year progresses. At the same time, we are still early in the year, with peak leasing ahead of us, and some of the Q1 beat was expense timing, not a full-year run-rate change. While full-year earnings are currently tracking modestly ahead of our original plan, it is more appropriate to affirm full-year guidance today and revisit on the second-quarter call when we will have a much better read on peak leasing season and the balance of the year.

Operator:
Our next question comes from John Pawlowski with Green Street. Please proceed with your question.

John Pawlowski:
Thanks. Matt, a question on the Avalon Sunset Tower sale. Are you able to share the cap rate both on your seller NOI as well as your best guess of the cap rate on the buyer's NOI? You have owned the property since the mid-1990s, so I am curious what type of property tax reset would be felt on that property.

Matthew H. Birenbaum:
Hey, John. That is a very atypical transaction. You are right—it is an early-to-late 1960s vintage asset and subject to San Francisco rent control, so it is not representative of where the San Francisco asset sales market would be today. There is also an overhang with regulatory upgrades that will be required—seismic and sprinkler retrofits—which really was part of what drove us to sell it. The cap rate we would talk about as a market cap rate—the buyer’s forward T-12—we think was probably in the low 5% range. That does provide an allowance for a certain amount of CapEx that the buyer is going to have to do related to that retrofit work, so it does not map cleanly to anything else. There are other assets we own in San Francisco where, given the loss to lease, those would probably honestly be in the low- to mid-4% cap rate today, which is more typical for valuing the portfolio.

John Pawlowski:
And then, Sean, a question on two markets where their economies have been stuck in the mud—DC and Los Angeles. Do you expect pricing power to either reaccelerate from here in the coming quarters, just muddle along, or get worse before it gets better?

Sean J. Breslin:
Good questions. As I see it today, the Mid Atlantic feels a little bit better. Things were rough mid to late last year, but on-the-ground feedback—both from leasing and renewals—shows less angst among prospective and existing renters. We have been able to peel back on concessions a bit. Average asking rent year-over-year is about flat now—we thought it would be down a little—so it feels a bit better. Job worries have faded some, and in certain submarkets—particularly more defense-oriented—there may be a little optimism. If I had to pick one of the two today, I would say the Mid Atlantic looks a little better. In Los Angeles, it has been tough, and there is not necessarily a near-term catalyst other than potential investments related to the World Cup and Olympics. Tax subsidies to promote entertainment content development have not really trickled in yet. We have not seen a clear demand catalyst yet in LA other than very diminished supply; we are looking for it on the demand side.

Operator:
Our next question comes from Austin Todd Wurschmidt with KeyBanc Capital Markets. Please proceed with your question.

Austin Todd Wurschmidt:
Thanks. Good afternoon. Sean, you referenced operating momentum into the second quarter. Was there any specific pickup in demand into April that drove the acceleration in lease rate growth after what looked like a fairly modest improvement from 4Q to 1Q? Anything specific in early spring that drove the improvement?

Sean J. Breslin:
I would not point to significant macro factors; it is more regional drivers. You heard my commentary on the Mid Atlantic and why that feels better. There has been good momentum in the New York Metro Area for obvious reasons. Softer places are what we expected—LA, Boston with basically no job growth over the last six months, and very little in Seattle. It is more a regional story in terms of momentum rather than a macro shift at this point.

Operator:
Our next question comes from Adam Kramer with Morgan Stanley. Please proceed with your question.

Adam Kramer:
Thanks. A more philosophical question: historically you have focused on job growth in the deck, but today you highlighted wage growth. Do you think one is a better indicator of apartment demand? And second, with regards to job growth, are you still assuming an uptick in the second half, or is there a different forecast now?

Benjamin Schall:
Hey, Adam. It is both jobs and wages—we look to total income growth as the driver of rent growth over time. On your second question, our guidance and reaffirmed outlook for this year are based on the economic environment we were experiencing in the second half of last year and continuing into the first quarter, not on any forward inflection. The two main drivers we talked about being different in the second half are: cumulative benefits of lower supply in our established regions—now down to roughly 80 basis points—and softer comps in the second half, which you can see in the presentation. We do look at job forecasts—those are tough to peg month to month. We have generally looked at NABE; NABE’s forecasts are down some, but when we put the pieces together, it does not change our outlook for the second half. Given Sean’s commentary and our start to the first four months, we feel pretty good about our progress and the setup for peak leasing season and the remainder of the year.

Operator:
Our next question comes from Richard Allen Hightower with Barclays. Please proceed with your question.

Richard Allen Hightower:
Good afternoon. On development, given the progress you are seeing year to date—Matt mentioned construction costs are maybe a little more attractive versus original underwriting—how quickly can you ramp up the development pipeline, given moving parts and other potential uses of capital? Could you increase the development start number, and what is the lag on that process internally?

Matthew H. Birenbaum:
It is always a combination of bottom-up and top-down. Bottom-up is the deals themselves; at any given point, we have a significant pipeline we are managing through entitlements, final design, and permitting. At the end of the first quarter, our development rights pipeline was about $4.2 billion. Through the normal course, those deals would bubble up over the next couple of years to being ready. Top-down is how they underwrite, our cost of funds, alternative uses, and the capital allocation decision. We focus on preserving flexibility and think we do a good job with that, so we would have the ability to dial up development more—whether next year or even later this year—if conditions are favorable and it is the right capital allocation decision. In addition to our own pipeline, we also have our Developer Funding Program (DFP), where we provide capital to third-party merchant builders. Roughly five of the 25-to-30 deals under construction today are DFP deals. Those can ramp up more quickly because someone else has done the early pre-work and the deal is ready and looking for capital. There is a lot of that business out there right now. Most of it does not underwrite—which is why you are not seeing starts pick up in a meaningful way—and we like that. We are consciously trying to take a larger share of a shrinking pie of development activity, and we think we are well positioned to keep doing that.

Benjamin Schall:
To add to Matt’s commentary, at points in the cycle like now, where others are pulling back but we have competitive advantages and a differentiated cost of capital, it allows us to structure deals more optimally. When Matt talks about having $4.2 billion in a development pipeline, we control that at a very low cost. In today’s environment, we can get control of land with much more flexibility than in past environments.

Kevin P. O’Shea:
And we have the financial flexibility to lean into those opportunities should they manifest. Access to the Lehman—[inaudible]—market is excellent; we priced ten-year debt in the low 5% range. We have access to the transaction market; we just sold $340 million of 40-year-old assets at a 5.4% cap rate. We could sell more representative assets at a lower cap rate, which would give us an opportunity to fund, accretively, development projects that might stabilize in the mid-6% range if there is more we want to have as a quick start to lean into.

Operator:
Our next question comes from Haendel St. Juste with Mizuho Securities. Please proceed with your question.

Haendel St. Juste:
I was looking at the turnover chart. We have gone from almost 60% back in 2009, to 41% a year ago, and now in the low thirties. Understanding affordability dynamics, demographics, and the operating platform, is this level in the low thirties sustainable? Is it a new norm? How should we think about turnover over the next year or two, and what is embedded in the guide for this year?

Sean J. Breslin:
The 31% is a Q1 number and tends to be one of the lower quarters. On an annual basis, the last couple of years we have been mid-40s and then low-40s. Our expectation for this year is we remain in the low-40s. Several factors drive turnover. Substitutes include availability of for-sale product; we do not see that changing anytime soon. Even if rates come down, the available inventory is not there across our established regions. That remains a tailwind or at least neutral for the foreseeable future. Other substitutes include other available supply; that has ticked in our favor the last couple of years, coming down to historical levels and projected to dip even further over the next year or two. The rest are normal life events—marriage, divorce, children, caring for parents—things that happen regardless. The primary things that move turnover up or down are the options within a market. It takes a while to build new multifamily and to entitle single-family in these markets, so we have a pretty good runway for a couple of years on that point.

Operator:
Our next question comes from Michael Goldsmith with UBS. Please proceed with your question.

Michael Goldsmith:
Good afternoon. Thanks for taking my question. I am here with Ami Probandt. On renewals, nice acceleration there—what is driving that? Is it in line with your expectations? And how have renewal negotiations trended recently?

Sean J. Breslin:
Overall, we have seen nice acceleration this year, as indicated in our release and in the move from Q1 into April. Both occupancy and lease rates are blending to slightly ahead of our original budget, so we are in good shape. Seasonally, asking rents tick up and renewals drift up behind it. Stronger markets—like those I mentioned—see a nicer pickup versus softer ones like Boston, LA, and Seattle. We have seen good movement across most regions with a few exceptions, slightly ahead of our original expectation.

Operator:
Our next question comes from Alexander David Goldfarb with Piper Sandler. Please proceed with your question.

Alexander David Goldfarb:
Thank you. On lease-ups, the pace is exceeding normal monthly levels, yet new rents overall are still muted. You mentioned only two standout markets—New York and Northern California—and a lot of your development is elsewhere. How should we think about the strong lease-up pace versus still-muted rents overall? Is it heavy concessions, or why are lease-ups so strong while pricing is still soft?

Sean J. Breslin:
On the lease-up basket for the quarter, that is nine communities: four in New Jersey, one in Charlotte, two in the Mid Atlantic, one in South Miami, and one in Austin. In general, customers are compelled by the product we are offering. On concessions, customers are choosing on average longer lease terms—over 15 months—and we are doing roughly six weeks free, around 9%, not terribly different from normal.

Matthew H. Birenbaum:
It is a combination of compelling product in submarkets that have not seen much new supply in a long time. Most of the development NOI is coming from the four New Jersey deals plus South Miami; those are the ones where rents are quite a bit higher than the other markets. In South Miami, for example, the community is over a brand-new fresh market on the south/east side of US-1, with walkability and schools that comps in other neighborhoods do not have. In New Jersey, Avalon Wayne has both townhomes and flats; it is the first new product Wayne has seen in probably 35 years. That is part of our development strategy. One of our starts this quarter is Saddle River—another place with seven-figure home values in Bergen County and no new multifamily in two generations. We are getting an outsized share of demand because of the differentiated and compelling nature of what we are offering.

Operator:
Our next question comes from Analyst with RBC Capital Markets. Please proceed with your question.

Analyst:
Thanks. Sean, following up on the average lease term over 15 months—does that come from you nudging people in that direction to lower expirations in-season, or is there a broader shift away from a normal one-year lease term?

Sean J. Breslin:
It is a little of both. The season and our desired expiration profile for the subsequent year matter. In some markets with townhomes—like Wayne and South Miami—families want to get through the school year and have some time. On average, we were nudging less in Q1 than normal, and people were picking longer lease terms, particularly with that product. Nice to see the preference for slightly longer terms come through from customers.

Operator:
Our next question comes from Analyst with Cantor Fitzgerald. Please proceed with your question.

Analyst:
Thanks. I wanted to dive into new and renewal lease rate growth. You mentioned offers out at 5% to 5.5% for renewals and 3.5% renewal for the full year. Is it fair to say that the flat new lease rate growth embedded in guidance could be greater based on numbers you see today, but you are holding the line until you have more information?

Sean J. Breslin:
We are generally tracking on plan; rates are slightly ahead. Q1 has fewer expirations than Q2 and Q3. We see a nice trajectory in asking rent growth, and things look pretty good. We will have a much better data set as we get through Q2, with a lot more leasing to do. We will revisit at midyear and update our thinking then. We have not seen anything yet that says we should do anything different than reaffirm what we already said.

Operator:
Our next question comes from John P. Kim with BMO Capital Markets. Please proceed with your question.

John P. Kim:
Thank you. What are you seeing in terms of market concessions competitors are offering? Any noticeable change as you enter peak leasing season? And what are you expecting for your concessions versus last year?

Sean J. Breslin:
Concessions are very much regional. In the markets I indicated as stronger or weaker, that is where you will see activity. Concessions are up in Boston, Seattle, and LA year-over-year, and down meaningfully in Northern California and the New York Metro Area. It depends on the market and submarket. For example, in Denver’s particularly urban submarkets, you can see 2.5 to 3 months free; in the suburbs it might be six weeks. In parts of the Mid Atlantic, some places are down to no concessions; others are a month. Hard to generalize overall. On a net effective basis, rates are tracking in line with what we expected—modestly ahead, but not a lot.

Operator:
We have reached the end of the question and answer session. I would like to turn the floor back over to President and CEO Benjamin Schall for closing remarks.

Benjamin Schall:
Thanks for your questions today. Thanks for joining us, and we look forward to visiting with you soon.

Operator:
Thank you. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.