Equity Residential

2025 Earnings Conference Call and Webcast. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Marty McKenna. Please go ahead.

Good morning, and thanks for joining us to discuss Equity Residential's second quarter 2025 results. Our featured speakers today are Mark Perel, our President and CEO, Michael Manelis, our Chief Operating Officer, and Bob Garachana, our Chief Financial Officer. Alec Brackenridge, our chief investment officer, is here with us as well for the Q&A. Our earnings release is posted in the investor section of equityapartments.com. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement these statements that become untrue because of subsequent events. Now I will turn the call over to Mark Perel.

Thank you, Marty. Good morning and thanks for joining us today. I will lead us off with some top of the house commentary. Then Michael Manelis, our chief operating officer, will provide color on our second quarter performance as well as what he is seeing in the markets today and an update on some of the initiatives we have going on. He will then turn the call over to Bob Giaraschana in his last call as our CFO before he takes over as our chief investment officer. And Bob will provide some color on our guidance changes and then we'll go ahead and take your questions. Alec Brackenridge, our soon-to-retire CIO, is here with us for the Q&A. Our second quarter results and guidance continue to reflect the sustained demand and excellent resident retention that we are seeing across our markets. We see this demand as being supported by nearly full employment in the country as a whole, with the overall unemployment rate being only 4.2%, though the pace of job growth is certainly slowing. The unemployment rate for our key demographic, the college-educated, remains even lower at 2.7%. We're also seeing continued high retention rates as more residents choose to renew with us, fewer and fewer residents are moving out to buy homes, and as we and other operators often prioritize occupancy and renewal rate management over new lease growth in a world that is more uncertain than usual for residents and landlords. Also, we continue to see the forward setup for our business as outstanding. and see above-trend revenue growth in future years as likely given the large apartment supply decline, the expensive and unavailable single-family owned housing market, and societal trends favoring rentership. As we talked about at our Investor Day earlier this year, our shareholders benefit from our unique and diversified portfolio. We have a differentiated exposure from our competitors that includes a collection of assets across the urban centers of many coastal markets, that gives us a distinct opportunity to outperform as improving conditions, particularly continuing declines in new supply and improvements in quality of life in these urban centers drive faster cash flow growth. To illustrate that further, we are already seeing strong revenue results in places like New York City and downtown San Francisco, where supply has already abated. And with more supply declines on the way, we are optimistic our results can continue to be above trend in these areas. Across our markets, we look for a balance of both urban and suburban assets that capture the changing needs of our primary renter demographic. Putting this portfolio on top of the most efficient overall operating platform in the space, when you take into account overhead, capital expenditures, and operating expenses, you have a vehicle that should outperform in the near term and over the long term because of its focus on higher earning renters across a broad array of markets. Finally, while good job growth is important to all apartment markets, it is especially important to drive absorption in oversupplied markets. So we expect our portfolio with its tilt towards lower-supplied markets and sub-markets and relatively modest amount of development properties in lease-up to exhibit more resilience if job growth continues to wane. On the transactions front, in the quarter, we continue to build out our presence in Atlanta with the acquisition of an eight property portfolio in suburban sub markets. This is a market we have been favoring in our recent acquisition activity as we expect supply here to decline more quickly than in other Sunbelt markets. We now have 22 properties spread throughout targeted sub markets within the Atlanta metro area. These eight new store properties plus seven assets that were acquired last year complement and round out our current six property same store portfolio that is focused more midtown and in closer in sub markets. We have also gained powerful economies of scale in Atlanta where we can efficiently share personnel across a broad portfolio and take advantage of our new scale and contracting for local services like landscaping as we do in other markets where we have a large number of properties. While we continue to look for opportunities to add to our portfolios in our expansion markets and certain suburban sub markets of our established markets, the transaction market is not as active as we had hoped it would be at the beginning of the year. As a result, pricing has become very competitive with cap rates for desirable assets we wish to acquire, often in the high 4% range, significantly lower than the cost of debt, even for us with our highly rated balance sheet. As you saw in our release, we have lowered our acquisitions expectations for the full year to $1 billion from $1.5 billion and expect to match sales and acquisitions this year. Nonetheless, we certainly have the ability to accelerate our acquisitions should attractively priced opportunities arrive. Before I turn it over to Michael, I want to thank Alec Brackenridge for his leadership, for his friendship, and for all his hard work over the years creating value for our shareholders. Alec will work with us assisting in the transition as we finish out the year. We're also excited for Bob and know he will thrive in his new chief investment officer role. And finally, I want to welcome Brett McLeod to Equity Residential. Brett will take over as our CFO in a few days, and we are very excited to add his deep financial experience and new perspectives to our team. And with that, I'll turn the call over to Michael Manelis.