Washington Real Estate Investment Trust

Welcome to the Elm Community's Third Quarter Earnings Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Amy Hopkins, Vice President, Investor Relations. Amy, please go ahead.

Good morning, everyone, and thank you for joining us for our Third Quarter Earnings Call. On the call with me today are Paul McDermott, President and Chief Executive Officer, Steve Riffey, Executive Vice President and Chief Financial Officer, Susan Jurok, Senior Vice President and Chief Information Officer, Grant Montgomery, Vice President and Head of Research, Drew Hammond, Vice President, Chief Accounting Officer and Treasurer, and Stephen Freistadt, Vice President, Finance. Today's event is being webcast through the Investors section of our website at elmcommunities.com, and a replay will be available this afternoon. We will have a slide presentation in conjunction with our prepared remarks, and those slides will also be available on our webcast replay. Before we begin our prepared remarks, I would like to remind everyone that this conference call contains forward-looking statements that involve known and unknown risks and uncertainties, which may cause actual results to differ materially. We undertake no duty to update them as actual events unfold. We refer to certain of these risks in our SEC filings. Reconciliations of the GAAP and non-GAAP financial measures discussed on this call are available in our most recent earnings press release and financial supplement, which was distributed yesterday and can be found on the investor's page of our website. And with that, I'd like to turn the call over to Paul.

Thank you, Amy. Good morning, everyone, and thank you for joining our third quarter 2022 earnings call. Much has changed in just a few months, both in the broader financial markets as the Fed continues to try to control rising inflation, and for our company as we break from our past and move on from being a washed reed. Becoming Elm Communities represents the start of a new trajectory positioning us to capitalize on the opportunity to be a differentiated provider of multifamily homes. It marks the culmination of our multifamily portfolio transformation, geographic expansion, and technology-forward infrastructure transformation. I am pleased to report a very strong third quarter, which Steve will discuss in more detail. But first, I'd like to cover the progress that we have made in our transformation and how the launch of our resident-focused brand fits into the execution of our growth and operational strategy. We have made the break from a business-to-business commercial company and become a business-to-consumer provider of apartment homes. We focus on the largest and most underserved renter cohorts. In fact, 97% of our apartment homes are affordable to households that earn the area median income. 20% of our apartment homes are now located in the Sunbelt. We're targeting economies with diverse, innovative industries that drive outsized job creation, wage growth, and migration. Our portfolio's allocation in the Atlanta and Washington markets enables our participation in growth while also providing relative insulation during economic downturns. Atlanta's regional economy is projected to fare well in the face of increased macroeconomic headwinds in 2023, maintaining job growth of approximately 1% and positive economic traction, according to Oxford Economics. Longer term, job and GDP growth of 1.8% and 2.4% from 2022 to 2026 are projected to continue Atlanta's track record of national outperformance. Washington's job growth in 2023 is also projected to continue apace, growing 1.4% according to Oxford Economics, continuing its long history of counter-cyclical outperformance during periods of national economic stress. Both markets are projected to grow more than the national average in 2023. We've targeted a deep, underserved, and undervalued base of mid-market demand. Mid-market renters comprise the largest share of apartment demand in each of our markets, yet only a limited share of new supply is affordable for these renters. Thus, the demand is deep and competition from new supply is limited. Mid-market renters are underserved on multiple levels, as the quality and maintenance level of physical assets, service, and overall resident experience in this apartment market segment is often of a lower caliber. Additionally, we see that they are undervalued, as residents at these price points see a lower standard of care for their space and receive a lower level of respect. In turn, residents place a lower level of trust in service providers. We see the opportunity to elevate what home can be for our residents, and our new name represents a combination of the words elevate and home. Our new mission is to elevate the value living experience and create a place our residents are proud to call home by continuously focusing on service, efficiency, and innovation. Our vision is to be the most trusted owner and operator of residential communities by elevating the standard for value living. Our clarified vision and mission statement support our strategy to deliver what the deepest cohorts in the apartment market need and in turn to create value for our stakeholders. Delivering a superior value living experience starts with making the most of every dollar spent at our community. It means providing customer service that goes beyond responding to resident inquiries. It means anticipating the needs of our residents and empowering our teams to add value with every interaction. It means knowing what our residents value and providing amenities that meet their needs. It means investing in smart home and building automation that is impactful and makes sense at mid-market price points. It means ensuring that on-time rent payments are reported to the credit bureaus to help build resident credit scores. It means delivering industry-leading environmental performance for value-oriented communities. All of this means we are committed to producing strong, recurring results for our investors. While redefining our mission and launching our new resident-focused brand are important to executing our growth and operational strategy, the work that was done to get us where we are today goes much deeper than our brand ethos. Becoming Elm Community marks the culmination of a multi-year effort to transform nearly every aspect of our business. I would now like to turn it over to Susan Gerach, our Chief Information Officer and key leader in our infrastructure transformation, to talk about our progress and how the changes that we've made position us to deliver greater value for our stakeholders.