Hello, everybody and welcome to the Independence Royalty Trust Q1 2023 Conference Call. My name is Sam and I will be coordinating your call today. I’d now like to hand you over to your host, Lauren Tarola to begin. Lauren, please go ahead.

Thank you and good morning everyone. Thank you for joining us to review Independence Realty Trust's First Quarter 2023 financial results. On the call with me today are Scott Schaeffer, Chief Executive Officer; Mike Daley, EVP of Operations and People; Jim Sebra, Chief Financial Officer; and Janice Richards, SVP of Operations. Today's call is being webcast on our website at irtliving.com. There will be a replay of the call available via webcast on our Investor Relations website and telephonically beginning at approximately 12:00 p.m. Eastern Time today. Before I turn the call over to Scott, I'd like to remind everyone that there may be forward-looking statements made on this call. These forward-looking statements reflect IRT's current views with respect to future events and financial performance. Actual results could differ substantially and materially from what IRT has projected. Such statements are made in good faith pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to IRT's press release, supplemental information and filings with the SEC for factors that could affect the accuracy of our expectations or cause our future results to differ materially from those expectations. Participants may discuss non-GAAP financial measures during this call. A copy of IRT's earnings press release and supplemental information containing financial information, other statistical information and a reconciliation of non-GAAP financial measures to the most direct comparable GAAP financial measure is attached to IRT's current report on the Form 8-K available at IRT's website under Investor Relations. IRT's other SEC filings are also available through this link. IRT does not undertake to update forward-looking statements on this call or with respect to matters described herein except as may be required by law. With that, it's my pleasure to turn the call over to Scott Schaeffer.

Thank you, Lauren, and thank you all for joining us this morning. We delivered strong same-store NOI growth of 8.2% during the first quarter. As discussed on our last earnings call, we focused on implementing operational changes and have since seen significant improvement in our processes and resulting occupancy. I'm pleased to announce that our occupancy has increased approximately 130 basis points since our operating update in early March and we expect it to continue to increase as leasing season gets underway. Today our same-store portfolio is 94.3% occupied with our same-store non-value-add portfolio at 94.7% and our same-store value-add portfolio at 92.3%. These occupancy gains are broad-based and across all communities. Also of note, our same-store portfolio was 96.7% leased as of today, which puts us in a position of strength heading into leasing season. Regarding first quarter results, here are some highlights. Our average rental rate increased 10.8% year-over-year, supporting a 7.5% increase in revenue. Our same-store NOI increased 8.2% and our core FFO increased 8.3% in the quarter, both compared to last year. And we renovated 635 units in our value-add renovation program, generating a 19.1% return on investment based on interior renovation costs and a 17.8% total return on investment, including common area improvements. These results continue to reflect the many strengths of IRT's portfolio, from our strong rental rate growth to the effective way we execute on our value-add renovation program. We continue to prudently manage leverage and monitor both our interest rate risk and maturity ladder to ensure that IRT does not have any undue exposure. As we sit here today, 97% of our debt is either fixed or hedged and we have only 9.8% of our debt maturing through the end of 2025. This exposure is the lowest among our public peers. During the first quarter, we continued to advance our value-add program which reinforces our expectation to deliver between 2,500 and 3,000 renovated units that we previously guided for in 2023. Currently, we have ongoing value-add renovations at 20 properties in 10 markets. And over the course of 2023, we plan to add another five property using markets, where we already have renovation teams in place. We expect to continue to achieve an approximate return on investment of 20% on these new starts which is consistent with returns that we have achieved to date. Our value-add program has been designed to be flexible allowing us to increase our decrease volumes as market conditions warrant. Despite continued economic volatility and uncertainty, our portfolio continues to demonstrate resilience driven by our presence across key Sunbelt markets that position us well at all points of market cycles. We see no real signs of stress in our markets, as we achieved double-digit NOI growth during the first quarter in key markets such as Raleigh-Durham, Tampa, Charlotte, Myrtle Beach, Denver, and Charleston among others. We continue to see positive job migration growth in our markets leading to residential demand. Also, our value-add communities provide renters with a real alternative to new construction, but at a much lower price point. And with inflationary pressures driving residents to Class B living, we are well positioned in cost-effective well-maintained highly defensive middle market communities. I'd now like to turn the call over to Mike Daley, our EVP of Operations and People for an operational update.

Thanks, Scott. As Scott touched on our strategic positioning in non-gateway markets within the Sunbelt led to strong first quarter results. We delivered an 8.2% increase in NOI, supported by double-digit NOI increases in several markets and our accretive value-add program. We continue to remain laser-focused on achieving sustainable operating gains across the entire portfolio. As discussed last quarter, we have added senior leaders to the team who have a proven track record in operating large diverse portfolios of apartment communities. In addition, we continue to improve our leasing and sales processes. Specifically, we have enhanced the speed of local market pricing feedback from our communities to the revenue management team. This allows us to augment our technical pricing tools and make any needed real-time adjustments to price. We have fully established our 24/7 call center to capture 100% of leads, significantly expanded our sales training program and continued to leverage technology to support process changes and maximize lead-to-lease conversion. These changes collectively increased occupancy to 94.3% as of today, up 130 basis points when compared to our operational update in early March. We will continue to enhance and streamline our operational processes to maximize our performance and efficiency. From the lead volume perspective, as Scott mentioned, we are seeing good demand for rental housing as we enter leasing season. Through today lead volumes year-to-date are up 6% over 2022 and our lead-to-lease conversion has improved 290 basis points from 5.5% last year to 8.4% year-to-date in 2023. For all of these new leases signed, the average rent-to-income ratio was 22% and had lease-over-lease effective rent growth of 3.1% in Q1. So far in Q2 2023, we have seen an improvement in new leasing spreads to 4.2%. From a resident retention perspective, the retention rate in Q1 was 48.2% and has increased in Q2 to date to 56.7%. This has been driven by the enhancements of our renewal process as part of our sales and leasing improvements we discussed earlier and is a key component of our plan to drive occupancy gains. Lease-over-lease rent growth for renewals was 4.8% in Q1 2023 and is 1.7% in Q2 2023 to date. These lower second quarter renewal rates were a result of us prioritizing occupancy. As we monitor submarket fluctuations in occupancy and revenue growth, we take a balanced approach to optimize new lease growth while retaining residents through normalized renewal trade-outs and our improved retention program. We are already seeing this in pricing power with June and July renewal rates currently at 2.6% and 4.2% respectively. I'd now like to turn the call over to Jim.

Thanks, Mike, and good morning, everyone. Beginning with our first quarter 2023 performance update, net income available to common shareholders was $8.6 million compared to $74.6 million in the first quarter of 2022. During the first quarter, core FFO increased 8.3% to $62.5 million and core flow per share grew 8% to $0.27 per share from a year ago. This growth reflects the organic rent and NOI growth that we experienced in the quarter. IRT same-store NOI growth in the first quarter was 8.2% driven by revenue growth of 7.5%. This growth was led by a 10.8% increase in average monthly rental rates to $1,530 per month. On the operating expense side, IRT same-store operating expenses increased 6.4% during the first quarter, led by higher repairs and maintenance costs, contract services, and property insurance. Inflationary pressures are certainly having an impact on operating costs and causing higher-than-normal increases. We continue to use our procurement teams to rebid contracts and technology solutions to help reduce costs wherever possible. Regarding the increase in repairs and maintenance costs, several factors have caused this increase. First, during Q1 2023, we had a higher volume of units to turn due to the lower resident retention rate. Second, we've performed a number of seasonal maintenance projects in Q1 ahead of leasing season as compared to last year, when we started most of these projects in April or May. And finally, inflationary pressures continue to cause an increase in prices for services. As Scott and Mike both mentioned during Q1, we executed on our reorganization of our operations and revenue management teams. These efforts are positively impacting our operations by providing a sustainable improvement in occupancy. While we incurred a one-time cost for severance from the reorganization, we do expect our annual G&A expenses will be lower over the remainder of 2023. Turning to our balance sheet. As of March 31st, our liquidity position was $327 million. We had approximately $12 million of unrestricted cash and $350 million of additional capacity through our unsecured credit facility. During Q1, we entered into a new SOFR swap that immediately reduces our floating rate borrowing exposure and provides an immediately lower interest rate by approximately 140 basis points today. This new swap is expected to reduce our interest expense by $1 million for 2023. Regarding leverage, we ended the first quarter at 7.3 times net debt to EBITDA down from 7.6 times a year ago with the improvement in occupancy and our forward expectations for the remainder of the year we still expect to achieve our leverage target of mid-6s by year-end 2023. While we continue to anticipate macroeconomic uncertainty in the coming months, I wanted to reiterate that we have no debt maturities in 2023 and only $70 million of maturities in 2024. Today, our exposure to floating interest rates is only 3% of our total indebtedness and our maturity exposure through year-end 2025 is the lowest of our public peers at only 9.8% of our debt. With respect to our 2023 outlook, we are reaffirming our initial guidance that we provided on our year-end conference call in February. Our EPS guidance remains at a range of $0.23 to $0.27 per diluted share and for core FFO a range of $1.12 to $1.16 per share. Our same-store operational guidance remains unchanged with growth of 6.4% in revenue, 6.1% in operating expenses, and 6.5% in NOI all at the midpoint of the guided ranges. Our previous guidance on transaction and investment expectations also remains unchanged. We currently are not assuming any acquisition volume, but did close on the sale of our community in Indianapolis at a price of $37.3 million. This disposition was at an economic cap rate of 4.8%. No additional dispositions are currently expected. Now, I'll turn the call back to Scott. Scott?

Thanks, Jim. So, to sum up we are off to a strong start in 2023 and remain on track to achieve our 2023 guidance. Our portfolio of properties in attractive markets in the Sunbelt region continues to perform well supported by solid renter demand fundamentals. Our efforts to improve occupancy are materializing and our value-add program is contributing high returns on an ongoing basis. At IRT, we have built a company that will perform in all market cycles and are encouraged by our ability to capture the growth opportunities that lie ahead. We thank you for joining us today and look forward to speaking with you again. Operator, you can now open the call for questions.

Thank you. Our first question comes from Austin Wurschmidt from KeyBanc Capital Markets. Austin, your line is now open, please go ahead.

Hey, good morning everybody. Jim maybe kicking off with you. Given how the operating results have played out so far in the transition to favoring occupancy versus rate in the short run, how should we think about occupancy and lease rate growth assumptions embedded in guidance and then kind of the trajectory of same-store revenue through the balance of the year? And second, what would it take at this point for you to get within the higher end of the range of revenue guidance?

Yes. Good question Austin. Our guidance assumptions or the operational assumptions I think being our guidance 94.5% occupancy. Obviously, we have the earnings from last year and then plus another 3% blended rent growth for all of 2023. We still feel quite good about that occupancy assumption. The blended rent growth were just above 3% so far year-to-date. So, we're feeling good about that as well. I think we'll come out with second quarter guidance updates as part of our second quarter earnings call. I think generally speaking as occupancy is building here in the second quarter through third quarter the same-store revenue kind of growth trajectory will almost be dependent on that occupancy growth and we'll be at kind of the low 95% range in third quarter. So, we're feeling quite confident and good about our overall assumptions around the occupancy and the revenue forecast that we've baked into guidance.

That's helpful. And then how does that 96.7% lease percentage compare versus periods where maybe occupancy was more stable and you've clearly started began pushing rental rates it sounds like into June and July. Is it sort of data dependent, or how much room do you think you have to run on sort of the renewal rate growth side?

I think we noted in our prepared remarks that renewal rent growth is picking up, with an increase of 2.4% in June and 4.2% in July. We are maintaining strong performance now that our non-value-add, same-store pool is at 94.7%, nearing 95% occupancy. This gives us confidence in our pricing power as we approach leasing season. The difference lies in the lease percentage; when occupancy stabilizes, the gap between lease percentage and actual occupancy percentage narrows. This reinforces our belief that the current occupancy is sustainable and will remain stable as we progress through the season.

That's helpful. Lastly, you provided some detail in the opening remarks. Scott, and perhaps Mike or Janice can add to this. Can you explain the changes you've made in interacting with the revenue management system? You mentioned different protocols within the operations team. Do you believe those changes are what is driving the increase in occupancy, or is seasonality playing a role? How confident are you that you can maintain the gains you've made and keep occupancy levels stable moving forward?

This is Scott. Thanks Austin. I'll start and then, I'll let Janice give you her color. But I think the big thing was that we consolidated asset management, revenue management and marketing under one unified leadership team and also really stressed improving the training of our sales and marketing. It is some seasonal seasonality of course, but we think that these changes that we've made, to the operations platform is what is really driving the occupancy growth that we're seeing. And that renewal rate was by design and giving us now pricing power with this higher occupancy and with higher leads and higher conversion rate going into leasing season. But Janice do you want to add anything?

Thank you, Scott. I've been with IRT for just over 90 days, during which we've implemented several key changes that have enhanced our operational performance. These improvements will help us sustain our progress throughout 2023. On the revenue side, we established real-time communication between our teams and revenue management, which occurs daily or at least weekly, ensuring we maximize rent growth and drive occupancy. We're maintaining the balanced approach we've always had while enhancing efficiency and responsiveness. We also launched a focused renewal program right away, along with sales training and support for our team. We've rolled out the call center across all our communities, significantly increasing our lead volume. One of the sales training initiatives included a six-week workshop series aimed at our sales professionals, focused on refining the sales process, follow-up, and creating value within our rents and communities. Additionally, we've introduced a sales performance team with specialized trainers dedicated to enhancing sales outcomes for specific areas. They concentrate on key performance indicators to optimize every interaction and effectively manage leads through the sales process. These specialized coaching and development teams will keep an eye on lead management, improve sales performance, and collaborate closely with VPs of operations as well as the entire marketing and revenue team, ensuring we can maintain our performance throughout 2023.

To finish up Austin, we're very confident that this is sticky, and that you'll continue to see a stable occupancy at that full occupancy level into the future.

Great. Thank you.

Thanks, Austin.

And our next question comes from Eric Wolfe of Citi. Eric, your line is now open. Please go ahead.

Thank you. It's actually Nick Joseph here with Eric. I was hoping you could walk through kind of the relationship between the value add within the same-store, how those returns that you're getting call it your high-teens, near 20% plays into both renewal and new lease rate growth within that portfolio. And I recognize you usually do it on the turn, but if you could just kind of walk through that relationship and how that should trend going forward?

Yes, that’s a good question. Our value-add portfolio is part of our same-store portfolio, which includes about 20 properties. The returns and ROI from the value-add units are determined by how we rent those units compared to unrenovated units, either within the same building or in nearby properties that we compete against. The operational metrics we shared break down new lease growth and renewal rent growth. The value-add units are improved upon when they change tenants. While the new lease growth is a little over 5%, it doesn't reflect the 20% rent growth because it includes a mix of other new leases within the entire same-store value-add component. Some new leases are on existing value-added units, which is why we don't see the 20% increase in those other new leases, particularly for second turns. However, we continue to see strong demand for value-added units and the premiums compared to unrenovated units, and we are confident in our portfolio and business strategy moving forward.

And I think an important thing to add Nick is that, when we look at the value-add communities and the units that are being improved, over the next 30 days, every unit that is being improved and delivered is already pre-leased. So that gives us great confidence that the demand is ongoing and that we'll be able even to increase those returns as we move further into leasing season.

Thanks. That's very helpful. And then just maybe on supply curious to get your thoughts on how kind of recent deliveries or expected deliveries play into the pricing strategy. And then what you're seeing or expecting in terms of new starts given kind of the contraction on the construction lending side, how you would expect those to trend throughout 2023?

New supply has been a significant topic in 2023 and we are observing it. However, we are not experiencing any real impact on our portfolio. Our lease volume is increasing, our conversion rate is improving, and occupancy is rising. When we analyze markets like Atlanta, Dallas, or Raleigh-Durham, which are substantial, we focus on submarkets for a closer look. Currently, we aren't seeing any effects from new supply. With the current interest rates and possible recession on the horizon, the volume of new supply is indeed anticipated to slow down significantly in 2024 and 2025. We are currently well into 2023 without any noticeable impact, and we believe that any existing effects will diminish as we progress further into this year and into next year.

Thank you very much.

Thank you. Thanks, Nick.

The next question comes from Brad Heffern of RBC Capital Markets. Brad, your line is now open. Please go ahead.

Yes, thanks. Good morning, everyone. On the July renewals of 4.2%, I'm curious is that where the offers are going out, or is that a number that you expect to realize? And if it is what the offers are at can you get the differential, where those typically go out versus what is realized?

Yes. So the $4.2 million is what's been signed already for July renewals. Generally speaking, they're also – it's also in line with what the offers went out at.

Okay. Got it. And then last quarter I think you said you were seeing more tenants moving out because they were finding roommates or because they were moving to live with their family. I guess has that trend continued, or are you seeing less of that given the focus on occupancy?

Yes. I think the comments – this is Mike. I think the comments last call were really around kind of the qualitative kind of anecdotal feedback from the communities. We really haven't seen any change in reason for move out from a quarter-to-quarter basis. So really, despite the headlines, the fact that we earlier mentioned the very strong job markets and inbound migration. We really haven't seen significant changes in the reason for move out. So I don't think anything from our perspective has changed in that regard.

Okay. Got it. And then finally is there any notable concession use currently in the portfolio?

Where we've seen an influx of new supply on a small level, where concessions have entered into the market in some of the submarkets, we have stayed competitive but no large concept and usage across our core markets.

Okay. Thank you.

And our next question comes from John Kim of BMO Capital Markets. John, your line is now open. Please go ahead.

Thank you. Good morning. You have a number of markets where you only own one or two assets and I'm wondering if that puts you at a disadvantage compared to larger peers that have bigger scale, or do the revenue management systems put you at more of an even playing field.

This is Scott, John. Yes, we think there is an advantage to having multiple communities in a market with operating efficiency. I don't think it puts us at a disadvantage relative to pricing because the revenue management does level that out. But we've stated on many occasions that we are looking through the recycling program that we always discussed to consolidate our portfolio and eliminate some of those smaller or single asset markets. Right now the transaction market is more or less frozen. So we're – the properties are performing fine. But as you see more transactions get done, don't be surprised if you see us start to exit some of the single market communities – single community markets.

And what about some of the markets where you have let's say two to three assets? Do you need to build more scale in those markets?

And some of them we're looking to build more, when the time is right and in others we're looking to exit. I can give you an example. We like Orlando long term. We have one community there. We would add Birmingham, Alabama, where we have two, we probably would exit that one. So it's a market-by-market decision.

Okay. On the lease growth rates, is there any noticeable trend that you could talk about whether some markets or regions are doing better than the others? And in particular, I wanted to ask about the Midwest, which according to CoStar is performing very well.

No I think that – this is Mike, again. I think that's very accurate. Our top-performing markets on blended rate growth were actually Columbus at 7%. And Oklahoma was 5.4% and Atlanta 5%. So your comment is correct. We're seeing a lot of that Midwest strength. So I think overall performance in those markets is good and we see other markets are also performing well and showing signs of strength like Tampa and Charleston and Myrtle Beach but the Midwest is definitely a point of strength.

On the flip side it's underperforming then.

I think the one that is kind of on our radar because of our size and our exposure to the market Atlanta, I think is probably the one that we're watching the closest. There's a lot of things that, I don't – Janice, if you want to – Janice, if you want to share some detail in terms of kind of the things we're watching in Atlanta, I would say that's probably the single market we have the most focus on the performance front.

Absolutely. So we've seen – although we've had great performance to market. We've seen that there's been some opportunity to really hone in on operational efficiencies and making sure that we're maximizing the performance on the property level. There was a flat absorption, but it doesn't really affect us in the submarkets that we are in. So we are continuously looking for ways to – we have a ton of value adds in that community or in that market and we're looking to maximize the work there. So, you might see a little bit of fluctuation in the occupancy based on the percentage and the concentration of value add, but we are pretty confident that we'll continue to outperform the market but the market has softened. And so we just want to make sure that we are on point operationally to work through that.

Okay. And just final question, if you could disclose what the bad debt was in the first quarter and what you're expecting for the year?

The bad debt for the first quarter was 2% of revenue. We have guided for 1.5% of revenue for the year and are very confident in that forecast. We anticipate that, as evictions begin to resume earlier this year, bad debt may be a bit higher in the first quarter, but it should decrease as we progress through the year and stabilize at 1.5%, with expectations for it to drop further next year.

That's great. Thank you.

Thanks, John.

Our next question comes from Wes Golladay from Baird. Wes, your line is now open. Please go ahead.

Hey, good morning, everyone. You highlighted a lot of changes you made on the operational front. I'm just curious, if everything is now optimal or will we be hearing about improvements throughout the year?

We think we are done with the changes, Wes. We're very confident with where we are. We're confident with the team that we have in place. The results are all trending in a very positive way. So I'm very happy and comfortable to say that we're through the changes in the organization.

Okay. Capital markets have been somewhat weaker, but there is still plenty of capital available, though that could change. I'm interested in how you view the value-add program, which continues to show strong results in the high-teens to 20% range. If the cost of debt increases further, would you alter your approach? Do you still have significant capacity to continue this program?

Well, it's a 20% unlevered return and that does not include the cost savings, because we have new systems, new appliances, new hardwood flooring. So the cost of maintaining these units is reduced on a forward basis and that's not even as I say included in 20%. So we built this platform if you will with an eye towards being able to expand it or contract the number of units that we do based upon market conditions. So we're always looking at what the returns are and where does it make sense and so far so good. As we've said, all of the units that we're delivering over the next 30 days are already preleased. We're seeing good demand even beyond that. And again, a 20-plus percent unlevered return is pretty attractive.

Okay. And then just one question on supply, I know you don't have a whole lot of traditional supply in your markets. Just wondering if you can maybe comment on if you're seeing a lot of competition from the value-add so not really new supply, but maybe enhance improved supply coming in with a lot of other participants in your local markets doing the value-add competition. Are you seeing a lot there, or is it pulling back? And any kind of color there would be helpful.

We're not seeing much competition. I believe this is largely due to interest rates. Previously, most of the competition we encountered on the value-add front came from smaller leveraged operators, but that approach isn't as effective now, and securing financing has become more challenging. Our value-add program is specifically designed to stand out against newer construction. We deliver a product that competes very well with new supply while offering a price reduction of $400 to $500 or lower rents, which gives us a significant advantage. As the economy evolves and we face the possibility of a recession, we believe our value-add strategy will become even more effective, allowing us to provide Class A products at more attractive price points.

Great. Thanks for the time everyone.

Thank you.

Thanks, Wes.

Our next question comes from Anthony Powell from Barclays. Your line is now open. Please go ahead.

Hi, good morning. I just want to go back to the Midwest markets that are performing well. Could you maybe go into the supply outlook you're seeing in markets like Indianapolis, Columbus and even OKC? And what's driving the better demand you're seeing in those markets overall?

This is Mike. I don’t have the latest supply data at hand. CoStar released updated information yesterday, so I need to do some more research to provide a more detailed answer. However, from my preliminary review, there doesn’t appear to be a significant increase in new products coming online in the markets you mentioned. We will continue to monitor the situation to see how it develops. For now, those markets seem very stable in terms of new supply.

Anthony this is Jim. Just a follow-up to Mike's commentary there. We are, obviously, CoStar's coming out with obviously their new data set. But the when we looked at it before for 2023 like Indianapolis to new supply deliveries was pretty low like 1.2% of the existing stock. So we feel quite confident that those markets are pretty robust in terms of continuing to see great job growth and we're expecting to see not a lot of pressure as Scott mentioned from new supply in our markets.

Are there buyers in these markets long-term?

It all depends. We're not big of anything right now because we're still unsure where values are. But yeah we bought in Columbus and Indianapolis obviously in the past. And those are our two main Midwest markets. And depending on market fundamentals in the future, I think yes we would add there if it makes sense.

Just not like you're not making a play in the Midwest versus the coastal or Sunbelt is more of an opportunistic kind of view, is that fair?

Absolutely. We built this portfolio by identifying markets with good long-term prospects, and that approach will continue. We still have a positive outlook on the Sunbelt, as we believe its demographics will outperform over the long term. However, if a suitable buying opportunity arises in the Midwest in a market where we are already present, we will certainly consider it.

Got it. And maybe on the June and July renewals, what percent of the role has been renewed already as of now? And is that higher or lower than I think average for this time of the year?

Yes. For July it's pretty much a vast majority of the renewals have already been done I'm sorry for June that is, for July about 30% have already been renewed and that's actually ahead of where we would have been this time last year.

Right. So I guess the tenants are taking these price increases and you're not seeing any incremental I guess attrition given the slightly higher renewal rates. Is that fair?

No, that's exactly right. To Janice's point, all the focus we've had on operational processes and sales training is really paying dividends.

All right, thank you.

Great. Thanks guys. I appreciate you taking the follow-up. Just a question, I realize the transaction market is a bit frozen, but can you just give us a sense of on the deals that are transacting where you think cap rates are today, and maybe pair that with where you can get secured financing for multifamily assets today? Thank you.

Sure. Thanks, Austin. Our acquisitions team has been monitoring the markets we’re focused on and recently informed me that they are noticing a rise in property listings. Brokers are suggesting that sellers may be willing to accept cap rates between 5% and 5.5%, depending on the market and the quality of the properties. This information is more promising than what we've received in the past. However, I still believe there is a disparity between buyers and sellers regarding their expectations. Nevertheless, this is the first indication I've seen that there might be movement in the market. I hope that answers your question.

Yes. Thank you.

Thank you.

And there are no further questions. I'll hand the call back to Scott now for any closing remarks.

Well, thank you for joining us and we look forward to speaking with you again next quarter. Thank you all.

This concludes today's call. Thank you everyone for joining. You may now disconnect.