Financial Data and Key Metrics Changes - The company reported core funds from operations (FFO) for Q2 2025 at $187.6 million or $1.70 per share, which is $0.01 ahead of prior guidance [14] - Property revenues met expectations, and the company decreased its full-year same-store expense midpoint from 3% to 2.5%, while increasing same-store net operating income guidance from flat to positive 25 basis points [15][16] - The midpoint of full-year core FFO guidance was increased by $0.03 per share from $6.78 to $6.81, marking the second consecutive increase [16][17] Business Line Data and Key Metrics Changes - Rental rates for Q2 showed effective new leases down 2.1% and renewals up 3.7%, resulting in a blended rate of 0.7%, which reflects an improvement from previous quarters [10] - Occupancy averaged 95.6% in Q2, slightly up from 95.4% in the previous year, with expectations to remain stable in the mid-95% range [11] Market Data and Key Metrics Changes - The company noted strong apartment demand, with the second quarter being one of the best in 25 years, supported by wage growth exceeding rent growth for 31 months [6][7] - The DC market showed the highest quarter-over-quarter revenue growth at 3.7%, while LA also performed well, indicating strong demand in these areas [38] Company Strategy and Development Direction - The company is focused on asset recycling, with $139 million spent on acquisitions and $174 million from dispositions, indicating a strategy to optimize its portfolio [12] - The company anticipates better than 4% rent growth in its markets in 2026, with expectations of a return to a more normal growth profile post-COVID [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the operating platform and the ability to maintain performance despite market uncertainties [22] - The company highlighted that the current economic environment has led to cautious behavior among operators, focusing on occupancy rather than pushing for higher rates [33][34] Other Important Information - The company has no significant debt maturities until 2026 and no dilutive debt maturities until 2027, positioning it well for future growth [17] - The customer sentiment score reached a record high of 91.6, reflecting strong resident satisfaction and retention [23] Q&A Session Summary Question: Insights on July data and expectations for the second half - Management indicated that blended rates increased from April to July, with expectations for the second half to be just under 1% [20] Question: Market performance and lease-up trends - Management noted that while some peers are facing challenges, their markets, particularly DC, are performing well with strong demand [31][38] Question: Development outlook amidst economic uncertainty - Management acknowledged a cautious approach to new developments due to market uncertainties but remains committed to starting projects when conditions are favorable [49] Question: Rent growth projections and underlying assumptions - Management expressed optimism about achieving projected rent growth due to strong demand and declining supply, with expectations for 4% growth in 2026 [45][84] Question: Impact of high supply and pricing on future demand - Management believes current demand is sustainable and not being pulled forward due to attractive pricing, as household formation continues to drive demand [68] Question: Renovation strategies and expected yields - The company plans to continue kitchen and bath renovations, expecting an 8-10% return on these investments [74][76]