Elme Communities Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Great. Thanks for taking the question. I guess just to start, just wondering if you think there might be any kind of slowdown in the DMV that puts the year at risk. Or maybe a better way to ask it, can you talk about what's implied in your guidance for blends and occupancy in the fourth quarter?

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. And then maybe the same question in Atlanta.

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. Just to confirm, so the new, you're saying what, like minus 10-ish or maybe higher? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 3:00PM, ELME.N - Q3 2024 Elme Communities Earnings Call

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. And then if you were to combine them both, like what do you think the total portfolio looks like?

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. That's helpful. And then I think you had like a 10.5% sequential OpEx increase in Atlanta, if I read that right. Is there something behind that? Or can you talk through what that's going to look like going forward?

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. That's helpful. And I guess just big picture on expenses, as you think about '25, do you think your expense growth overall for the portfolio will be higher or lower than it was in '23 -- sorry, '24?

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. And then last for me, just with no acquisitions here today, just kind of want to get your latest thoughts on expansion into additional markets and some of your strategic initiatives, whether it's selling Watergate or entering new markets. You think you're on hold for a while, you're waiting for market conditions to open up, just kind of what are your latest thoughts on portfolio repositioning and investments?

Question: Jamie Feldman - Wells Fargo Securities, LLC - Analyst : Okay. Very helpful. Thank you.

Question: Ann Chan - Green Street - Analyst : Hey. This is Ann with Green Street. Do you expect total capital expenditures to increase, hold steady, or decline in the next few years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 3:00PM, ELME.N - Q3 2024 Elme Communities Earnings Call

Question: Ann Chan - Green Street - Analyst : Great. Thanks. And just one more for me. Going back to the bad debt in Atlanta, where do you think levels are going to ultimately stabilize at?

Question: Ann Chan - Green Street - Analyst : Great. Thank you so much.

Question: Cole Bardawill - Wolfe Research, LLC - Analyst : Hey, guys. Thank you very much for the time. One question I just wanted to ask on, with everything happening in the election today, I was just curious if you've seen any changes, like historically, in demand trends in the months after an election, just specifically with the D.C. Metro market? Or is it kind of business as usual?

Question: Cole Bardawill - Wolfe Research, LLC - Analyst : Okay. Got it. Thank you. And then just kind of one specifically I had on Atlanta, I saw that your occupancy was up sequentially, quarter over quarter, 130 bps. So it seems like it's trending in the right direction. Do you expect that kind of to continue going forward? And also, are you prioritizing just occupancy over rate currently? How are you guys thinking about that specifically?

Question: Cole Bardawill - Wolfe Research, LLC - Analyst : Okay. Awesome. Thank you very much, guys.

Question: Michael Gorman - BTIG - Analyst : Yeah, thanks. Good morning. Tiffany or Grant, I'm curious, as we think about 2025, obviously you talked about heading into the fourth quarter, but then the improvement in the supply picture and the net inventory ratios. Should we expect new lease growth to inflect in '25 and turn positive? And kind of what are your thoughts there in terms of the trajectory? How quick is the recovery in a market like Atlanta?

Question: Michael Gorman - BTIG - Analyst : Okay, great. That's helpful. Thank you. And then, Paul, just a quick question maybe on the capital allocation side. You talked about some of the expansion markets that you continue to have an eye on. I think one of the things that has been an interesting takeaway in recent months is that even with some of the fundamental challenges, the pricing in these markets is still pretty aggressive. Folks have been talking about assets trading in the low-5s. I'm curious what you're seeing when you look at those markets and the transaction activity that is out there, kind of where the pricing is and how that fits into how you're thinking about entering into new markets. Thanks.

Question: Michael Gorman - BTIG - Analyst : Great. Thank you for all the detail. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 3:00PM, ELME.N - Q3 2024 Elme Communities Earnings Call