Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Independence Realty Trust Q2 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star and one. Please limit your questions to one initial and one follow-up question. I will now turn the call over to Stephanie Kruse and Kelly. You may begin.

Good morning, and thank you for joining us to review Independence Realty Trust Second Quarter 2025 financial results. On the call with me today are Scott Schaefer, Chief Executive Officer, Jim Sieber, President and Chief Financial Officer, and Janice Richards, Executive Vice President of Operations. Today's call is being recorded and webcast through the Investors section of our website at irtliving.com, and a replay will be available shortly after this call ends. Before we begin our prepared remarks, I'll remind everyone we may make forward-looking statements based on our current expectations and beliefs as to future events and financial performance. These statements are not guarantees of future performance and involve risks and uncertainties, that could cause actual results to differ materially. Such statements are made in good faith pursuant to the State Department provisions of the Private Securities Litigation Reform Act of 1995, and IRT does not undertake to update them except as may be required by law. Please refer to IRT's press release, supplemental information, and filings with the SEC for further information about these risks. A copy of IRT's earnings press release and supplemental information is attached to IRT's current report on the Form 8K that is available in the Investors section of our website. They contain reconciliations of non-GAAP financial measures referenced on this call to the most direct comparable GAAP financial measure. With that, it's my pleasure to turn the call over to Scott Schaefer.

Thanks, Stephanie, and thank you all for joining us this morning. Second quarter same-store UNOI and core FFO per share results were in line with our expectations as operating expense savings offset lower-than-expected revenue growth. Same-store revenues increased 1% over the prior year. We finished the quarter modestly ahead of expectations on renewal leasing due to another quarter of strong retention. We had debt continued to decline, and average occupancy rose modestly versus a year ago. However, our blended rent growth in the quarter lagged our expectations due to market conditions that were softer than anticipated. Lingering supply pressures in some markets, and potential residents being more discerning due to continuing macroeconomic uncertainties, pressured market rents to a greater degree than we originally anticipated. as we sought to continue to maintain occupancy during this time frame. Jim will cover our revised outlook for 2025 with respect to leasing spreads and overall revenue growth. On the positive side, same-store operating expenses decreased 60 basis points over the prior year quarter and fully offset softer revenue growth. Lower repair and maintenance and turnover costs, lower real estate taxes, and a reduction in our insurance premium renewal all contributed to this improvement in expenses. We completed 454 value-add renovations during the quarter and a total of 729 completions for the first six months of the year, achieving a weighted average return on investment of 16.2% for both periods. As Jim will discuss later, given our stronger-than-planned retention rates year-to-date, we expect to complete about 650 fewer renovations this year as compared to our original goal, which is still a 26% increase over 2024 completions. In terms of investment activity, we are seeing opportunities to deploy capital accretively by trading out of older vintage assets with higher future CapEx needs and to newer communities with lower CapEx profiles. On the disposition side, during the quarter, we identified three assets that we expect to sell during the fourth quarter. For new investments, we are under contract to acquire two communities in Orlando during the third quarter for an aggregate purchase price of $155 million. Both properties are in close proximity to existing IRT communities, which improves our market presence and should enable us to realize meaningful operating synergies. Beyond these pending transactions, our acquisition pipeline remains strong. Our updated guidance implies an additional $315 million of acquisitions before year end, and we have ample liquidity to fund these accretive investments on a leveraged neutral basis through capital recycling. Regarding our markets, the good news is that deliveries in general are tapering off across our portfolio, with permitting and starts data supporting our outlook for more muted supply growth for the next few years. Looking at market-level data from CoStar, Yardi Matrix, and Greenstreet, we're seeing a reduction in deliveries settling out to less than 2% supply growth in our markets in 2026, which represents a 43% reduction from 2024 actual deliveries. As a result, we believe things continue to set up nicely for a stronger leasing environment in 2026 as demand for apartments in our markets is expected to remain strong. I'll turn the quarter to Jim.

Thanks, Scott, and good morning, everyone. Core fulfilled per share was 28 cents in the second quarter of 2025, up to 27 cents per share in Q1 of this year. Same-store NOI grew 2% in the quarter, driven by a 1% increase in same-store revenue and a 60 basis point decrease in operating expenses over the prior year. Same-store revenue growth was supported by a 10-basis point increase in average occupancy, a 90-basis point increase in average effective monthly rents, and a 20-basis point improvement in bad debt compared to the prior year. The decline in same-store operating expenses reflected a 90-basis point increase in controllable expenses and a 3% decline in non-controllable expenses both as compared to Q2 of last year. Within controllable expenses, we attribute the below-inflationary increase to stronger-than-expected retention rates that led to a 6.7% reduction in R&M and turn costs. Within non-controllable expenses, we saw lower real estate taxes and a reduction in our property insurance premium of 18%. In terms of leasing trends, renewal rate increases of 3.9% coupled with 58% retention support the 70 basis points of blended rent growth in the quarter. New lease trade-offs during the first half improve sequentially each month, albeit at a slower pace than anticipated in our original guidance. For the second quarter, new lease trade-offs were down 3.1%, with supply-heavy markets like Atlanta, Dallas, Denver, Raleigh, and Charlotte contributing heavily to these negative new lease trade-offs. On the capital recession front, during the second quarter, we classified three Holyoke communities located in Denver, Memphis, and Louisville as held for sale. Additionally, last week, our JV partner in Richmond completed the sale of Metropolis and Innsbruck. We received $31 million in cash, consisting of a return of our investment and a $10.4 million gain that we will record in the third quarter with any income from unconsolidated real estate investments. This gain will be excluded from core portfolio since it is associated with a property sale. We will recycle proceeds from asset sales into newer communities with higher growth profiles. As detailed in our press release last night, we have two communities under contract in Orlando, Florida. Later today, we expect to close in the first of these communities, a 240-unit property built in 2024 for a purchase price of $60 million. The community is close to an existing IRT community. We expect to close in the second property later this quarter. It is a 403-unit community built in 2019 that is directly adjacent to the existing IRG community. The blended economic cap rate on both of these acquisitions is a 5.9%, which includes operative synergies from our increased scale in the market. We canceled our pending acquisition of a community in Colorado Springs because the lease-ups slowed and signed rents were lower than our underrated. While we like this market long-term, we do see other opportunities where we can put that capital to work. The $315 million of other acquisitions included in our updated guidance should further enhance our operating efficiencies and be accreted as AFFO. We will fund the Orlando and other pending acquisitions using $162 million of forward equity commitment bustling and proceeds recycled from asset sales, all done on a leveraged neutral basis. Our balance sheet remains flexible with strong liquidity. As of June 30th, we have only $337 million, or 16%, of our total debt maturing between now and year-end 2027. Nearly 100% of our debt is fixed rate or hedged. With respect to our four-year 2025 guidance, we are adjusting some of our underlying assumptions to reflect our performance in the first half of this year and expectations for the second half. From a big-picture perspective, our reduced outlook for revenue growth is offset by lower expense growth, resulting in slightly higher same-store NOI growth and the same midpoint for core FFO per share. The guidance updates for our operating metrics are as follows. Our 2025 same-store portfolio now consists of 105 properties, reflecting the removal of the three properties held for sale. Our updated outlook assumes full-year same-store revenue growth of between 1.5% to 1.9%, which represents a 90 basis point reduction at the midpoint. The decrease is driven primarily by lower new lease growth, offset by slightly better occupancy as compared to our original guidance. On the new lease growth front, in our original guidance, we assume that effective new lease growth would improve throughout the year, such that, for the year, effective new lease growth would be flat. We are now assuming that new lease growth for the second half of 2025 will be down 2.7%, which, when coupled with a negative 4.4% new lease growth in the first half of 2025, means that our full-year new lease growth is now estimated to be down 3.4%. Overall, our renewal rental increases are still expected to be approximately 3.5% for the year, which leads to approximately 50 basis points of blended rent growth for 2025. Just to summarize, our revised revenue guidance is based on the following inputs for the second half of 2025. Average occupancy of 95.7%, blended rental rate growth of 60 basis points on our remaining lease expiration that total 53% of our available units, bad debt of 1.3% of revenue, and 2.7% growth in other income over the second half of 2024. With regards to property operating expenses, we have a more favorable outlook due to the reductions in both controllable and non-controllable expenses. On controllable expenses, higher retention is reducing our R&M and turnover costs, while our site teams are continuing to manage expenses for contract services and others exceedingly well. Overall, controllable expenses are now estimated to grow by 1.9%, which is down 190 basis points from the previous midpoint of 3.8%. On non-controllable expenses for real estate taxes and insurance, we now expect these expenses will decline in 2025 by approximately 40 basis points, which is down 345 basis points from the previous midpoint due to the 18% savings we secured on our 2025 property insurance premiums and further improvements in real estate taxes. In total, the 1% midpoint of our revised guidance range for total operating expenses for the full year 2025 is 245 basis points better than the midpoint of our previous guidance range. From the same-store NOI perspective, the midpoint of our NOI bill has increased by five basis points to 2.1%. Additionally, we expect lower G&A and property management expenses for the year, and our new midpoint of $55 million is $1 million less than our prior midpoint, driven by efficiency savings from our recent rollout of AI leasing tools. Finally, from a core-for-for-share perspective, our midpoint of $1.17.5 is unchanged. Scott, back to you.

Thanks, Jim. We continue to believe we're at the beginning stages of a multi-year period of improving fundamentals and growth in the multifamily sector and for IRT. Supply growth should remain muted in the next few years and support positive new lease growth as we head into 2026. Additionally, occupancy is stable. Renewals and retention are strong. Bad debt is declining. And year-to-date tour volumes are up over 2024 levels, all which point to continued strong demand for our communities. Given these improvements, we believe our markets and our company remain positioned to outperform as fundamentals continue to improve. We thank you for joining us today. And, Operator, you can now open the call for questions.

At this time, I would like to remind everyone, in order to ask a question, press star and the number one on your telephone keypad. Please limit your questions to one initial and one follow-up. Your first question comes from the line of Austin Werschmidt with KeyBank Capital Markets. Your line is open.

Good morning, everybody. Jim, I appreciate all of the detail you provided around the second half outlook. I guess given some of the lingering supply challenges and change in renter behavior that you and Scott highlighted in the prepared remarks, can you share how you approached your revised outlook versus maybe historical or typical seasonality and month-to-month trends? just trying to get a sense here of kind of the implied acceleration in lease rate growth and and you know what's driving that yeah no good question thank you awesome yeah and certainly Scott and Janice you know for a free time in you know I would say you know the way that we went about kind of our called expected you know kind of excuse me new lease trajectory for the back half of the year was just looking at you know what is the average and call it effective rent

rental rate of the pieces that are expiring each month what we know today based on who has renewed and who hasn't renewed or who is quote quote likely to renew and comparing those kind of expiring rents versus what we think would be an asking rent based on where our asking rents are today and kind of our expectations for kind of how that moves month by month for the rest of the year and then obviously as you and I've talked about it's just math right in terms of just calculating what that kind of implied trade-out would be.

So should we think that you're going to see kind of a seasonal slowdown or things flatten out, or does it assume any additional re-acceleration? And then just secondarily, I guess, have you seen any change in sort of traffic or conversions versus what you were seeing play out in the spring and early summer and just kind of high level for maybe how July operating conditions?

Yeah, what we expect is that as you look at the new lease trade-outs, heading into the back of the year, there's going to be some continued improvement month by month as compared to kind of where we were in the first half of the year. I think the assumption right now is that the new lease trade-out is going to be a negative 2.7% in the second half of the year, where it was negative 4.4% in the first half of the year. So again, continued improvement. In terms of leasing trends, yes, we continue to see good lead volume. I think lead volumes are up about 3% to 4% over the same time last year, which last year was up called 20% of the year before that. So we see really great demand. And we're seeing, as we mentioned in our Navy deck, we'll continue to see really good kind of tour velocity as well in terms of converting those leads to tours. So yeah, we are seeing really good kind of solid demand, even in the back end here as we see, you know, July and what's developing for August.

Great. Thank you.

Your next question comes from the line of Eric Wolf with Citi. Your line is open.

Hey, thanks. Maybe just a sort of broader follow-up to that.

I'm just curious, why do you think you're not seeing, I guess, a big pickup sort of a new lease growth when you have 60% retention, 4% renewals? Is it just that private peers aren't seeing the same dynamic? I guess I would just think that with, you know, retention high across the industry, occupancy high, your expectation for occupancy to increase, you'd see better market rate growth. So, like, what is sort of holding it back right now? Yeah, it's not so much the, I mean, certainly the market rate growth.

You know, I think, as we've all kind of talked about, we are seeing, you know, continued supply pressure.

And as we said in our prepared remarks, you know, some of the macro economic uncertainties are kind of holding market rates, you know, down a little bit. What we are seeing from our standpoint on the tradeouts is, you know, our average renter stays with us, call it two to two and a half years. So the leases that are expiring and are not renewing, they're just coming from a higher kind of rent that they signed two to two and a half years ago. And that's what's causing the negative tradeout. Got it. And I think you said that you expect occupancy to increase the 95.7% in the back half. I think it came down a bit in 2Q. Just curious, you know, what gives you the confidence in that prediction? Have you already started to see occupancy rise in July? Have you seen sort of forward indicators that would suggest that that, you know, occupancy is sustainably going to be higher? Just trying to understand why you're predicting higher back half occupancy. Sure. Yeah. No, as you mentioned, obviously the May, June, and early part of July months were obviously, you know, obviously a difficult, a little bit of a difficult environment operating to, but we did see occupancy in the back half of July, you know, continue to click up closer to that kind of 95.6%. So we feel confident about being able to, you know, drive that a little further north and maintain it in the back half of the year.

Thank you.

Your next question comes from the line of Brad Herfren with RBC Capital Markets. Your line is open.

Yeah. Hey, everybody. Thanks. For the assets you guys have held for sale, is there any common thread there between either the three markets or the three assets? And then in those markets, would you continue to downsize in any of them?

Thanks, Brad. In terms of the common thread, I would just say that generally speaking, two of the assets, the one in Memphis and the one in Louisville, two legacy IRT assets that have gone through the value-add program, and we feel that we've kind of maximized value They're also a little older on the vintage side and a little more expensive to run from a capex load. The deal in Denver, it's a legacy steadfast deal, again, a little older on the vintage side and certainly a little higher on the capex load. So, the common theme is, you know, kind of higher capex loans, more expensive to run, older deals, and the goal is to continue to recycle that capital out of those types of assets and into newer assets with better growth profiles.

Okay, got it. And then on the increase in the acquisition guidance, you obviously have the $155 million under contract already. For the rest of that, are those assets identified already? any color you can give on what the rest of the volume might look like?

Yes. Hi, this is Scott. Yes, assets are identified. We do have a very fulsome and active pipeline, and it really is matching up with the dispositions of the communities that are held for sale. Obviously, as we work through the process and, you know, consider alternatives and better allocations of capital or potentially better allocations of capital, you know, we will make a decision when those sales happen of the three that are held for sale, we'll make a decision as to what's the best use of that capital at that time. But we have an active pipeline and at values that will be accretive to what we're selling and at below replacement cost. So we'll just continue to work that and we'll see where we are again as those three properties Okay. Thank you.

Your next question comes from the line of Jamie Feldman with Wells Fargo. Your line is open.

Thanks for taking the question. I just was hoping you could get a little bit more granular on the market. You know, where would you say conditions have moved the fastest against your expectations? Where do you think you have kind of the lowest visibility or even the best visibility on your outlook for the back half of the year?

Absolutely. Absolutely. What we've seen against our expectations is kind of Dallas was surprising with the amount of increased supply in the first half of the year. The McKinney area, especially, we saw increased concessions, you know, sequential rep reductions. Occupancy is stable, but is that the consequence of pricing power and also, you know, just slugging through that supply that's in the market? We've seen really strong absorption, so it's a promise that we're getting towards the end of the – the line at the end of the tunnel. And we've noted extended pre-leasing timeframes from delivery to occupied, but at a pace in which we're comfortable with that eventually we will get back to normal supply level in So that one was a bit of a slow start versus our anticipation. Tampa also was a bit of a slow start on the pricing power side. You know, first quarter, we saw not an inflection of supply, but we saw some hangover, high occupancy due to maybe some of the weather events that happened in the third and fourth quarter. And then so people were staying put. And then as we started to trade, we weren't able to accelerate that rent as quickly as we anticipated. We do feel that Tampa's second half of 25 into 26 is very strong, and we're seeing strong absorption in that market. And then lastly, obviously, there's Denver. So Denver has had an onslaught of new supply and will continue to do so through most 25 into 26. And so it's really just making sure that we are maximizing where we can and ensuring that we're hedging the bet on occupancy, but also looking for opportunity on the red side. So those are the three markets that uh probably were uh a challenge comparatively to what is anticipated uh charlotte again is still high with uh supply and so we're working through that but that was uh that was anticipated uh we've seen some great um movements in lexington columbus and oklahoma city um and so we're hoping to capitalize on that for the rest of the year as well okay great um and then given the uh expectation for improvement.

Can you give an update on your July numbers, like where new, renew, and blend rents? And then what are you going out for renewals on for August?

Sure, Jamie. So we're obviously staying away from giving, you know, monthly data.

But I would just tell you that the information that I mentioned earlier on occupancy was kind of in that 95.6. I would say new lease tradeouts are kind of largely in line with June. There is obviously a little bit of, you know, again, a peak of expirations. And then when you get into kind of renewals, you know, August renewals we sent out a long time ago, we sent them out at roughly three, three and a half percent renewal rate. And that's what we, you know, see developing. And then as you look at kind of September and October, we're closer to that three percent range. Okay, thank you.

Your next question comes from the line of Wes Goloday with Baird. Your line is open.

Hey, good morning, everyone. Do you anticipate buying any of the JV assets? And can you give us an idea of the size of the asset recycling bucket? How many older assets do you have left? So, good question. On the JV front, we have, as we announced, the Richmond asset was sold to a third party. We looked at it, and it would have been our only asset in Richmond, so we decided not to to buy it uh through our our option um we're pleased with the way the way that it turned out uh one of the jvs in nashville we were just uh alerted by the developer partner um that we will be paid off uh in uh either late august or early september um we are not going to acquire that one at this time. I mean, we're not going to acquire that one. There's two more in Texas that are complete and lease up, and we have about a year from now before we have to make a decision, so we will continue to watch the progress of lease up and, you know, market conditions, and we'll make a determination, you know, when we have to. I'm sorry, what was the second part of your question?

Oh, yeah, and the second one was just like, you're using the, I guess, the non-core older assets to, I guess, fund acquisitions.

Just kind of curious, what is the size of that bucket? How much more asset recycling can you do?

There's always recycling that we can do. I mean, you know, every year, the assets get a year older. So really, it's not just the age, it's changes in markets, and it's CapEx costs. And what is an alternative use for that capital? Is it buying back stock? Is it redeploying in, you know, you know, newer, better long-term assets? Is it deleveraging? And as I said in our earlier remarks, you know, that's a determination that we'll make, you know, when we know the capital is coming back. Got it. Thank you.

Your next question comes from the line of Amy Probant with UBS. Your line is open.

Hi, thanks. So, supply is typically pretty well known at the start of the year. So what would you say surprised you about supply trends this year? And have you seen any indications that supply of single-family rentals may have also been a factor in addition to apartment delivery?

Hey, Amy, thanks for the question.

Yeah, I think the biggest surprise would be just experience relative to kind of our expectations from the earlier year and kind of how the year has developed is really just kind of two parts on supply. One, just the lingering pressure and how long it's kind of been hanging around for. And then B, the volume of incremental deliveries relative expectations. You know, we were obviously using CoStar data that suggested, you know, end of last year, early this year, that the deliveries across our submarkets in our portfolio was going to be roughly 2 to, I think, 2.6% of existing stock. That number is now 3.5%. And it appears that it's, you know, deliveries are being pulled forward from 2026 into 2025. So it makes 2026 even better. But it is a little bit more of a surprise that we've been having to kind of wrestle with. And as Janice mentioned, you know, when you look at specifically the Dallas market, you know, CoStar was originally anticipating a lot of deliveries in Q4 of 2025. And they seem like they've moved all into Q1 and Q2 of 2025. So that's been like the biggest surprise. And then I think from the single-company rental standpoint, we don't believe that is really affecting us. You know, our reasons for move-out to rent a home, you know, continue to be in that 2% to 3% of our move-outs. It hasn't increased. So we don't believe that's been really a factor for us.

Great. Thanks. And then just a quick one. For the assets held for sale, what do you expect for the cap rates on those? And I assume you're quoting economic cap rates.

Yes, we'll quote economic.

So obviously, we haven't obviously nailed down, you know, final sales prices and all that. So it's still a potential moving, but it's in the low to mid-fives.

Okay, great. Thank you very much. Your next question comes from the line of Ann Chan with Green Street. Your line is open.

Hey, good morning. Thanks for taking my question. So first one, just on the current transaction environment, could you give us a sense of the bid-ask spreads you're seeing on both the buy and sell sides? Are there any signs that price discovery is starting to reset or that distress-driven opportunities are emerging?

So, I'm sorry, it broke up a little bit. Your bid-ask spreads on just the transaction market?

Yes.

So, the acquisitions, the properties that we have under contract in Orlando, you know, are in close proximity to existing IRT communities, which generate significant operating synergies. So as we look at those two assets, we're expecting them to generate a 5.9 cap rate yield in year one. So that's very healthy. I think as far as bid-ask, what we're seeing is that, especially in the newer, more recently completed communities, that the sellers have now come to their senses and recognize where values are and that bid-ask gap has narrowed. There is some pressure from continuing high interest costs. There's pressure because lease-up is taking a little longer on the newer communities. And for those reasons, sellers are being more reasonable and realistic.

Thanks. And you highlighted Orlando as as one of the growth markets with opportunities to drive scale and synergies. Are there any other MSAs in the pipeline where you're seeing similarly compelling fundamentals or where you look to build additional scale?

Well, we still believe in the Sun Health. We like the Midwest, generally. Indianapolis and Columbus have both been strong for us. Indianapolis, a little more – a little stronger more recently. My plan is to keep our ratio of Sunbelt exposure to Midwest exposure somewhat consistent. So as you see us continue to grow in Sunbelt over time, expect that growth in the Midwest as well to keep that ratio consistent. You know, we haven't announced any additional acquisitions in other markets than Orlando. So at this time, I would just stick with that. Orlando has been at the top of our list for growth for some time. we've never been able to or we haven't been able to i should say uh you know find something that fit within uh uh the area in orlando that that we wanted uh also at a price that made sense um these two assets that we're buying uh uh fit our strategy completely the second one that will close um we expect later here in august uh is literally across the street and and phase two of our existing Orlando asset. So that's why there's great operating synergies for us to acquire that one. And the other one is within a five-minute drive of an existing IRT community. So we're excited about adding those to the portfolio. And, you know, we continue to analyze markets and, you know, we'll act accordingly, you know, as, again, capital is to be deployed into new assets.

Thank you.

Thank you.

And your next question comes from the line of Omoteo Okusano with Deutsche Bank. Your line is open.

Yes. Good morning, everyone. Apologies if I missed this earlier on, but could you talk a little bit just around like July operating trends and what you're seeing in terms of kind of, you know, demand? Is there kind of a lot of supply pressure that you're kind of seeing that easing? What does that mean for your blended lease rate?

Sure.

Yeah, we did talk a little bit about this earlier.

Obviously, occupancy has been building throughout the month of July. Our lead volume, tour volume continues to be kind of really healthy and above levels of last year. You know, new lease tradeouts are, I would say, relatively consistent with what we experienced in the month of June. And renewal spreads are also very consistent.

You know, we think that for the second half of the year, our new lease tradeouts would be kind of negative 2.7 percent and then for the year our renewal increases will be kind of averaging out about three and a half percent so all of those all the July methods are in line with those that trajectory gotcha that's helpful and then it's and then just on the supply front again i mean it just looks like based on your results and some of your and your peers you know it just feels like you know i know that's the private owners or who it wasn't into here but in a lot of your market that you know owners have got a little bit more aggressive with pricing maybe it's just again concerns about tariffs or things like that it's kind of curious if you just kind of talk about if that's still the feeling in the air if pricing is getting a little bit more rational at this point as you've kind of moved beyond that point yeah no uh great question and uh you know i think as we just kind of were chatting with anna about you know the we do think that sellers are becoming more rational and that kind of bid-ask spread is narrowing.

You know, for all the reasons you suggest, you know, macroeconomic uncertainty around tariffs, et cetera, as well as, you know, what the current forward curve has applied for the 10 years, we do think that, generally speaking, that gap is narrowing. Okay, that's helpful.

And then one last one from my end, again, as you kind of think about the consumer today, and again maybe on the rental end of things the kind of you know more attractive concessions and rates they're kind of getting uh given the oversupply on the class a side just talk a little bit about again how much that's impacting your you know your predominantly class b portfolio again whether you kind of feel like you're losing customers to you know the class a space where they're offering two months to rent free and just those kind of dynamics of what's kind of happening to your core consumer and kind of how are they looking at at your building sure um yeah i think

you know generally speaking when you have uh new supply delivers where a developer is behind the lease up or the lease up isn't kind of going at the pace that he or she would like it to go but they do offer obviously more and more aggressive concessions to get the lease up done You know, as those concessions get more aggressive, you know, that tends to, you know, potentially cherry-pick, you know, residents away from the Class B, but, you know, fundamentally, it just requires more obviously work for us, right, to continue to maintain occupancy and drive rents, and when that happens, it just reduces our ability to manage rents higher through time, so I think, you know, just fundamentally, you know, as we saw last year, you know, the whole kind of Class A to Class B, you know, transition, especially on the new supply, you know, sort of the impact of this has an impact on a lot of players out there. And we see a little bit of that stickiness and staginess continuing in the first half of this year.

And there are no further questions at this time. Scott Schaefer, I will turn the call back over to you.

Well, thank you all for joining us today. We look forward to speaking with you again next quarter. Have a good day.

Thank you. This concludes today's conference call. You may now disconnect.