EP#96 Alex Jessett | 5 Takeaways From Apartment REITS' Earnings Calls

**Jay Parsons** (0:02)
Welcome, welcome. It's episode number 96 of The Rent Roll, your podcast on all things rental housing, apartments, single family rentals and bill to rent. And it's that time of quarter. One of our most popular recurring topics here on the podcast, our quarterly recap of the apartment REITs earnings calls. So much data, so much color that comes out of these calls. For me personally, I learn a lot more from the earnings calls than I do from the official earnings releases. I don't care about line items. I care about insights and themes and market shifts and emerging trends. And that's what I like to focus on here and share with you. Calling through all these calls from the big REITs and the small REITs alike. And then coming up with five key themes and takeaways from earnings call season.
And not just what it means for the REITs, but a lot of times and most of the time, these themes apply to the broader private market as well.
And so, there's certainly some topics like stock buybacks that are unique to REITs, but most of the topics are really market wide topics. We just get this level of transparency into these big portfolios that we just don't get from most private companies. So that's what I love about this stuff. And that's what we're going to do today.
Five key themes and take aways from the apartment REITs, Q2 earnings calls that just wrapped up this week. And then by the way, just a soft plug here, we're going to do the same thing next week with the single family rental REITs. And obviously the SFR guys have a lot to talk about right now, particularly with some of the federal regulations changing around road to housing. So we'll talk about that next week. But today is multi-family and we got a great guest with us today for today's episode. Also, it's the new CEO of one of the big apartment REITs, Alex Jessett of Camden. He took over the big chair earlier this year from an industry legend, Camden co-founder Rick Campo. And we'll talk with Alex about his 27-year career at Camden leading up to his new role. We'll talk about Camden exiting California completely. That transaction is now done. We'll talk about how they're redeploying those funds into the Sun Belt. And we'll talk about the pace of the market recovery, what markets are doing better than others, and much, much more. So let's get into it. Before we do, let's give a big shout out to our headline sponsors. First and foremost, a big thank you to JPI, a leading apartment developer whose stated purpose to transform building, enhance communities, and improve lives. Check them out at jpi.com. JPI remains active building in some of these growth markets that can still support it, where we're seeing some green shoots. Just recently started new projects in North Carolina, in Florida, Texas, and also the West Coast. So check them out at jpi.com. Also a big shout out to Madera Residential. Check them out at maderarezidential.com and to Funnel Leasing, the sponsor of our interview portion of the podcast at funnelleasing.com. All right. So as always, kick things off with a little section that we like to call, Here's a Chart. Instead of charts, today, we're sharing five big takeaways from earnings calls among the apartment REITs, five key themes and takeaways. Before we do, I want to note a very important caveat here that AvalonBay and Equity Residential did not host earnings calls this quarter, unfortunately, just due to their impending merger. So we're missing a lot of color that we normally get from them, especially on the coastal markets where they are very concentrated. So it's a bummer not to have them this quarter, but we still got plenty of material from other REITs, including coastal commentaries from UDR and Essex. So we have plenty to talk about, no shortage of content for sure.
Also, last friendly reminder here that everything I'm sharing with you is for informational purposes only. This is not investment advice whatsoever. I just share things that I think are interesting. All right, so here's a chart is sponsored by ButterflyMX, installed in over 20,000 buildings with over 100,000 five-star reviews. They help you boost revenue, reduce costs, and increase resident satisfaction by making property access simple. See how at butterflymx.com.
All right, five key themes and takeaways. Number one, and this is just the first takeaway I have is really a story. It's a narrative. It's a mystery.
I just said earlier that a lot of these themes are going to be relevant to the business and private sector. This isn't necessarily relevant to your business, but it's a super interesting story. The first takeaway is this. There's a previously undisclosed third wheel in the Equity Residential and AvalonBay merger. It's a big plot twist. The third wheel. Prior to AvalonBay and Equity Residential entering into merger discussions, both REITs had advanced discussions with another REIT, identified only as company A. This was disclosed in some filings related to the, so every time you merge with other companies, one of these filings had to do with the SEC is providing a timeline of what happened, how this deal came together.