For the properties currently in the portfolio, we've completed 10,474 full and partial interior upgrades, over 5,100 kitchen and laundry packages, and roughly 11,200 tech packages, generating average monthly rent increases of $152,50, and $43 per unit at returns of 20.7, 63.4, and 37.2% respectively. This is still one of the most reliable, capital-efficient sources of growth we have. Moving on to the dividend. For the second quarter we declared a dividend of 53 cents per share payable September 30th. Since inception we've raised the dividend 157.3 percent. As of June 30th total indebtedness was approximately 1.6 billion and an adjusted weighted average interest rate of approximately 3.58 percent. We held approximately 14.6 million of unrestricted cash on 118.9 million of undrawn capacity on the credit facility for a total available liquidity of approximately $133.5 million. We have no scheduled debt maturities until 2028, which consists of only a small $33 million fixed rate loan. Net leverage is about 57% of our internal NAV estimate, and deleveraging over the medium term, funded mainly through disposition proceeds, remains a priority. Our estimated net asset value at the quarter ended is $46.76 per diluted share at the midpoint, using a cap rate range of five and a quarter to five and three quarters across the portfolio. The rate runs $40.35 at the high end and $53.16 at the low end. At a recent price of $25.91, the stock trades at more than 40% discount to that midpoint. Even at the most conservative end of our range, it's a meaningful discount to estimated liquidation value. We think the gap between where the stock trades and what the real estate is worth is significant and our capital recycling and buyback tools give us a way to close that. 2026 guidance revised. I'll now walk through the revised guidance by component. We're lowering full year 2026 core fulfill guidance to a range of $2.35 to $2.54 per diluted share at a midpoint of $2.45 down from a prior midpoint of $2.57. We're lowering same store NOI guidance to a range of negative 2.5% to 0.5% at a midpoint of negative 1% from a prior midpoint of negative 0.5%. The components of the bridge from $2.57 to $2.45 in five pieces are as follows. Interest expense down $0.16. Again, the forward curve move described before. We have about $14.6 million of fewer projected swap inflows, the largest single driver. Same store revenue down nine cents. We're taking full year same store revenue growth down about 90 basis points to roughly 0.2% at the midpoint. It's concentrated. Matt has the market detail with Nashville accounting for most of the same store NOI reduction. Same store expense up six cents. The 140 basis point improvement I recently walked to for about 2.1%. Fourth component is interest income up five cents. Realized income from bridge lending investments tied to water for DST transaction, which Matt will put in context. And lastly, corporate G&A and other up two cents, favorable G&A management. That nets a 12-cent reduction to $2.45. A brief word on where the same-store cut sits, because it's concentrated rather than broad. Nashville's about 85% of the same-store NOI reduction. Software revenue combined with the steepest same-store expense growth in the portfolio, near 15%. So there's little expense cushion there. Four markets are guiding to better same-store NOI than we assume to the start of the year. South Florida, Atlanta, Phoenix, and Raleigh-Durham. And Dallas is a good example of the expense discipline at work. Roughly 590,000 revenue reduction was almost entirely offset by about 505,000 of expense savings, so very little drop to NOI. This is a concentrated revision, not a portfolio-wide one. On where this puts us first to street, consensus is about $2.51 with a few more recent estimates closer to two dollars and 40 cents a share our new midpoint is in general agreement with external estimates the first half is in the books ahead of plan the revision is forward-looking larger libretria than reset to the back half our acquisition with disposition assumptions are unchanged at zero to 200 million each 100 million at the midpoint reflecting continued capital recycling within guidance and with that let me turn it to matt all right thank you paul i'll start with the backdrop because the fundamental setup for our portfolio keeps improving.

Starting with supply, national deliveries peak near 700,000 units in 2024. Starts are off roughly 70% from the peak and deliveries this year are tracking to the lowest level in more than a decade and in our Sunbelt sub-markets the drop off is steeper still. Two-thirds of our sub-markets have less than two percent active annual inventory growth and more than half have fewer than 500 units under development today. The first half bore that out. Our submarkets absorbed almost 6,000 units in the second quarter against 3,146 units of new supply, net absorption of a positive 2,852 units, and that follows a positive 1,307 in the first quarter. The remaining 2026 supply is real and concentrated. The most meaningful pressure for us is in North Charlotte, South Las Vegas in the southern portion of Orange County in Orlando. Still, the supply cliff remains intact and the backdrop continues to improve, we think leading to a clean inflection approaching in late 2026 and into 2027. On demand, the structural case hasn't changed and the affordability channel has only gotten more extreme. John Burns has the premium to own versus rent at 44 percent against a 17% long-run average. Zellman has the entry-level payment gap at its widest since 1984, and move-outs to buy a home were 8.7% this quarter, down from 10.9% a year ago. Here's the part I'd underline. On 135 million households, every 50 basis point decline in homeownership rate creates 675,000 renter households, two years of normal absorption from a channel that requires no population growth growth at all. And on the geography, Zellman's own work has national household growth running at near 70 basis points annually through the end of the decade. Our markets run at roughly twice that. And per Witten advisors, job growth, population, and domestic migration continue to favor the Sunbelt for the balance of the decade. Slower national household formation is a real headwind to the national number. It is not the same input as the one that drives our markets on to leasing the leasing cadence is the real story this quarter across 1360 new leases our new lease trade out was negative five percent and across 1684 renewals we were positive 1.9 for a blended trade out of negative 1.16 roughly 75 basis points better than the first quarter the month to month tells a more encouraging story blended trade outs went from negative 1.7 percent in april to negative 1.2 percent in may to negative 50 basis points in june and it turned positive at about 30 basis points in july new lease tradeouts the hardest line improved from negative 5.4 percent in april to negative 2.3 percent in july roughly 310 basis points while renewals held above two percent that is the first positive blended print since early 2025 for us It is just one month, but encouraging nonetheless. Raleigh was our only market with positive new lease tradeouts in the quarter, and the laggers on the new lease line, Orlando, Charlotte, Dallas, and Nashville, are the same markets carrying the most remaining supply. On the occupancy and revenue front, the same store portfolio closed at 93.6% physical occupancy, up 30 basis points year-over-year, and flat sequentially, with leased at roughly 95%. percent retention was 55.9 percent and turnover improved to 44.1 percent from 46.5 percent same store total revenue with 62.4 million down 60 basis points year over year the number i'd point you to is the trajectory in that comparison we went from a negative 2.2 percent year over year in the first quarter to just negative 60 basis points in the second 160 basis point improvement in a year-over-year comp in a single quarter. Effective rent was down 80 basis points, a much shallower decline than the new lease line alone would suggest, and that is occupancy and retention discipline doing its job. On bad debt, 60 basis points of gross potential rent against 1.02% in the first quarter of last year, a roughly 40% improvement and a fraction of where we ran before centralization rebuilt our screening process. Rent-to-income ratios remain 20% across the portfolio, a very healthy margin. On to concessions. Two different measures to discuss here. Utilization, the share of new leases taking a month free, we cut that roughly in half from 55.6% in the first quarter to 27.7% in the second quarter. An average week's free fell from two weeks to 1.1 week. South Florida drove most of that, going from 87.6 utilization to just 4.8% utilization the second quarter on cost concession dollars as a percentage of gross potential rent we ran at about one percent for the quarter still slightly above our forecast and use was heaviest in tampa orlando nashville and dallas about a third of the portfolio has no active concession offering today and roughly half are offering selective pricing only on age vacants and specific floor plans we project utilization falls another 50 cent by year end onto our technology platform a lot of what you're seeing in the quarter especially on the expense side comes out of the technology work we've laid out at during greet week in june we run a two-layer model property operations go through bh management and their funnel leasing platform at the advisor level we're building next point intelligence that's deliberate self-managed peers have to spend across every layer at once while our model captures a disproportionate share of that benefit at a fraction of the capital. In the quarter, the platform converted 24,703 leads into 1,321 applications and 1,226 move-ins, a 5.3% lead to application rate, and a 34.6% tour to application rate. Both improved from the first quarter. Self-guided touring keeps scaling. 26.2% of tours in the quarter were self-guided, and that's up from 18.7% in the first quarter, and that's after hours demand we otherwise would lose. Quick word on Sedona Mountain, the 321-unit community in North Las Vegas that we bought in December of last year for $73.25 million the occupancy of the property closed at 92.2 percent for the quarter of 430 basis points from the first quarter and noi is beating budget by almost five percent with expenses 12.2 percent under forecast roof exterior paint smart rent and amenity work are complete we're still targeting and on track to generate a 7.2 percent noi kegger through 2029 taking a high five cap rate purchase to a 7.5% to an 8% stabilized yield. On the transaction market and capital allocation, institutional volume remains well below last year and cap rates have remained sticky and the bid ask remains wide, with most participants pointing to a 2027 for a clearer recovery and more transaction volume. That said, we've watched well-located Sunbelt assets trade materially tighter than our own implied cap rate, which reinforces the NAV gap Paul described. Our capital allocation priorities are straightforward. Our job is to close the value gap through operating execution into 2027, recycling capital, and buying back stock. One item on earnings composition. Our revised guidance includes about five cents of realized interest income from a bridge lending investment tied to a Waterford DST transaction sourced through our advisors platform. It's a discrete realized deployment of balance sheet capacity, earning an accretive market return. we're carrying it as as realized income rather than embedding a forward estimate and we'll report it as it happens in closing the first half beat our plan same store revenue improved 160 basis points in its year-over-year comp between the first and second quarters blended lease tradeouts went from a negative 1.7 percent in april to a positive 30 basis points in july occupancy is stable retention is up and expenses are coming in better across every market and supply is rolling over fastest in the markets where we've been most pressured. That's what makes the setup compelling. 2026, we absorbed the rate repricing and the last of the supply. 2027, we get to the supply cliff and the leasing earn-in, and the earn-in is not a forecast. It's math on leases we've already signed. We're moving into the best supply-demand backdrop in five years, and the renter-by-necessity cohort is only expanding as affordability stays extreme. The fundamental recovery is more certain today than it has been in recent memory. I want to thank everyone here at NextPoint and BH for their hard work and with that, the operator, let's open it up for questions.

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Peter Abramowitz with Deutsche Bank. Your line is open. Please go ahead.

Yes, thank you for taking the question. I appreciate it. I just want to go back to Matt. I think you had some comments about the improvements in the operating environment. And I think you used the term, you know, sort of expecting a clean inflection in the second half of the year and into 2027. I guess just wondering how to interpret that. What do you consider sort of a clean inflection as you described it? Is it, you know, positive new lease rates or otherwise? Just help us frame how you're thinking about that and how it kind of shapes how you're thinking about the operating environment into next year.

Yeah, I was I was referring to the positive new lease rates, you know, our revisions to the guidance are concentrated really, really in four assets, four or five assets that make up about two point two million dollars of gross potential rent revisions. And really, those markets were just not as strong as we originally thought. And so, as we look forward in the new guidance and what it implies for new leases, we're slightly negative in the third quarter and then modeling, you know, slightly positive in the fourth quarter. And that's the quarter that I think we feel the best about, you know, of the year. And that kind of clean inflection is the positive new lease pricing that's implied in that guidance.

Okay, that makes sense. And then I think your average occupancy was was ninety three six for the entire quarter. I know in your May read update, I think you were running around ninety four percent at the end of April and the end of May. So just wondering, I know there can be differences between average occupancy and month end and quarter end.

But did you have a little bit of occupancy kind of give back as pricing was starting to ramp or continuing to ramp? um throughout june and and i guess what what was the update on occupancy in july as well yeah bonner can you get a july occupancy for me but the um in terms of uh the strategy we had um we were deliberate in trying to hold rates you know on the on the new lease front and so you know we we lost a little bit of you know call it 30 40 basis points um you know good memory back to nary um but you know we're uh the strategy was to try to hold pricing as much as we could um which for which bore out you know sequentially month by month um you know the the new lease

pricing did improve as we as we just reported um in the bottom yeah and just a little bit of clarification so peter the occupancy numbers we report the supplement are you know as a point in time so that that 93.6 is a 6.30 physical end date so the average financial occupancy for the quarter was about 93.8 you're right when we were in a read early june you know we were 90 94 flat physical um i think you know looking at where we thought we had some better pricing we were a little bit more aggressive both on on new lease pricing and renewals i think that you know if a certain number of these assets that Matt's, you know, talking to, we thought we had a little bit more pricing power than was borne out, and that, you know, ultimately eroded, you know, call it 40 bips of occupancy between, you know, first week of June toward the end of the month. Rolling into July, you know, I think in the operational update we provide the supplement, you'll see, like, the leasing funnel is working. We're generating, you know, pretty high lead volume. We think it's, you know, it's a very healthy season all the time. And, you know, the inflection to a positive blend on rates, you know, we're prioritizing pricing a little bit. We're trying to push pricing and we're, you know, okay. I mean, certainly we'd love to be a little bit healthier on occupancy, but, you know, running kind of mid-93s and getting to that inflection point in new lease rates is more of a focus today.

All right. That's all for me. Thanks for the time.

There are no further questions at this time. I will now turn the call back to the management team for closing remarks.

Yeah, thank you for everyone's participation today and look forward to speaking after Q3. Have a good day.

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