Thank you for standing by, and welcome to the Independence Realty Trust 4th Quarter and Full Year 2020 Earnings Release Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and Answer Session. Please be advised that today's conference is being recorded. Thank you.
I would now like to
hand the conference over to Lauren Torres. Ms. Torres, please go ahead.
Thank you, and good morning, everyone. Thank you for joining us to review Independence Realty Trust's 4th quarter and full year 2020 financial results. On the call today with me are Scott Schafer, our Chief Executive Officer Jim Sebra, our Chief Financial Officer and Farrell Ender, President of IRT. Today's call is being webcast on our website atwww.irtliving.com. There will be a replay of the call available via webcast on our Investor Relations website and telephonically beginning approximately 12 p.
M. Eastern Time today. Call. Before I turn the call over to Scott, I'd like to remind everyone that there may be forward looking statements made on this call. These forward looking statements reflect IRT's current views with respect to future events and financial performance.
Actual phase pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Affect the accuracy of our expectations or cause our future results to differ materially from those expectations. Participants may discuss non GAAP financial measures during this call. A copy of IRT's press release and supplemental information containing financial information, other statistical information and a reconciliation of non GAAP financial measures to the most direct comparable GAAP financial measure is attached to IRT's most recent current report on the Form 8 ks available at IRT's website under Investor Relations. IRT's other SEC filings are also available through this link.IRT does not undertake to update forward looking statements in this call or with respect to matters described herein, except as may be required by law.
With that, it's my pleasure to turn the call over to Scott Schaeffer.
Thank you, Lauren, and thank you all for joining us this morning. 2020 was a year like no other for our company, our industry and our country. We were faced with unexpected challenges brought on by the global pandemic, but due to the perseverance of our team and focus on accomplishing our objectives, we were able to deliver strong 4th quarter and full year results and better position our company for long term success. We prioritized the needs of our people, which included protecting the health and well-being of our residents and employees, while providing flexibility to those residents demonstrating financial hardship. We focused on growing occupancy and driving leasing traffic, while sustaining our financial flexibility and lowering leverage, thereby strengthening our balance sheet.
As a result of successfully Against these priorities, our same store average occupancy increased 250 basis points to 94.9% in the 4th quarter on a year over year basis with average effective monthly rent per unit growing 2.6% in the quarter. We have collected 98.7% of 4th quarter rent. Our same store NOI increased 4.4% in the 4th quarter and 3.1% for the full year compared to a year ago. Our core FFO improved more than 10% in the quarter and for the full year 2020. And we notably reduced our leverage this past quarter having normalized net debt to adjusted EBITDA of 8.2x at year end.
Reducing our overall leverage has been a long term objective of ours, and I'm very pleased that we were able to make meaningful progress against this commitment during the year when we faced unprecedented market conditions. We are pleased to note that this momentum continues, seeing strong results so far into 2021. Our total portfolio average occupancy was 95.2 percent in January, a 290 basis point improvement compared to the end of January last year. We have collected 96.9 percent of January rents, which is consistent with collections of December rents. And given our low lease expirations and high occupancy in the quarter, we continue to drive rent growth.
Another key component of our strategy is the advancement of our value added capital recycling programs. While we paused these efforts in the first half of last year due to the pandemic, we resumed activity in the second half of twenty twenty after seeing more stable conditions in our markets and a rebound in demand for renovated units.
Since the inception of
our value add program in January of 2018, we have completed renovations on 3,719 through December 2020, achieving a weighted average return on investment of 18.3% on interior renovation costs. This momentum continues and we expect to renovate another 1300 units in 2021, supported by an improving market environment with growing rental demand. Regarding our capital recycling program, we expanded our presence in markets where we saw attractive long term fundamentals like Huntsville, Alabama and Dallas, Texas and exited markets where we had a small presence such as Chattanooga and Baton Rouge. In addition to acquiring and divesting properties under our capital recycling program, we're exploring the potential for JV relationships focused on new multifamily development. This program will provide capital through preferred equity investments and joint ventures with third party developers.
We will target assets in core non gateway markets where we see opportunity for growth with a particular focus on the Southeast and broader Sunbelt region. Our expectation is that these investments would deliver unlevered IRRs of approximately 20%, while giving us the ability to own the newly developed communities outright at attractive cap rates. We're excited about developing this initiative giving IRT another avenue for accretive capital allocation. Looking ahead to 2021, we expect the gradual market recovery and industry fundamentals to improve. We are confident in our resilient portfolio of assets in non gateway markets that is well positioned to benefit from migration and employment trends, particularly in the Sunbelt.
We will remain focused on maintaining high occupancy levels while driving rent growth when appropriate and slightly managing our costs. And we will continue to engage attractive investment opportunities under our value add and capital recycling programs supplemented by potential Bird Equity, Investments and Joint Ventures. In sum, we exited 2020 from the position of strength with ample liquidity and reduced debt, and we look forward to executing on our strategic priorities and delivering value to our stakeholders. Before I turn the call over to Farrell, I'd like to once again thank our team highlight their dedication and ability to adapt and learn from the challenges presented over the past year. While the pandemic undoubtedly impacted our people and the way we do business, It also enabled us to squarely focus on accomplishing our vision of being a trusted and respected provider of apartment communities by offering an unparalleled living experience for our residents and a world class environment for our employees.
This goes hand in hand with our recent announcement to increase the size of and further diversify our Board of Directors with the appointment of Lisa Washington. Lisa brings to IRT more than 25 years of experience in corporate governance and public company compliance as an accomplished Legal Executive and Corporate Officer. We welcome Lisa and are assured that she will bring her valuable perspectives to our company. And With that, I'd like to turn the call over to Farrell for an operational update. Farrell?
Thanks, Scott, and good morning, everyone. We are pleased to report that IRT closed out 2020 with strong 4th quarter results led by the diligence of our on-site teams. Due to our ongoing effort to support resident retention and build occupancy during the pandemic, our occupancy grew substantially in 2020 that was 95.3 percent at year end. We continued these efforts into 2021 and have sought to support occupancy ending January at 95.4%. On a lease over lease basis for the same store portfolio, during the Q4, new lease rates increased 4.5% and renewals were up 1.6% yielding a combined lease over lease rental rate increase of 3.3%.
Strong trends continue in the Q1 to date with new leases having increased 7.7% led by our value add communities, while renewed leases are up 4.4 percent with a blended lease over lease rental rate increase of 5.4% for our same store portfolio. While we are encouraged by these trends, we are also cautious as we continue to manage through the pandemic and therefore remain focused on maintaining occupancy. Given our occupancy in the Q4 of 2020 and into the Q1 of this year, we've taken a targeted approach to renewal rates at communities where we have occupancy and very little exposure. We remain optimistic about our initiatives behind our value add and capital recycling programs, which both experienced a pickup in activity in the second half of last year. First, on our value add program, we completed renovations on 2 30 units and 1,004 units in the full year, realizing average rent premiums of 21% in the quarter and 18 point 8% in 2020 as compared to unrenovated units.
We performed renovations at 17 of our communities, 4 of which are nearing completion as we have renovated 85% or more of their units. What is really important to note is that we continue to believe there are additional properties within the remaining portfolio that will offer value add opportunities and provide outsized rent growth in the future. Prior to the pandemic, we had identified an additional 6 communities to enter the value add program. We will commence renovations at 4 of these communities and the first half of twenty twenty one and continue to evaluate the remaining 2 based on market conditions. We anticipate completing renovations on approximately 1300 units in 2021 with the bulk of these occurring in the second and third quarters when we experienced the majority of our lease expirations.
In the 3rd Q4 of 2020, we reengaged our capital recycling program, which is focused on reallocating capital from markets where we have a small presence and do not plan to grow and invest those dollars into markets with better long term fundamentals where we have a larger presence and are looking to expand. With that being said, we closed on the sale of 3 assets in the 4th quarter for a combined gross sale price of $59,700,000 adjusted blended economic cap rate of 5%, thereby exiting the Chattanooga and Baton Rouge markets. We realized a net gain on sale of $7,800,000 from these dispositions. On the acquisition front, as mentioned on last quarter's earnings call, we purchased a 421 Unit Property in Huntsville, Alabama for a gross price of $94,000,000 which represented a 5 point 1 2 percent cap rate on our year 1 underwriting. This acquisition expanded our footprint in Huntsville to 599 units from 178 units and will allow us to unlock value through a combination of organic market rent growth as well as growth from the implementation of our revenue management seasonal ownership.
Looking ahead, we will continue to grow and strengthen our presence in middle market suburban communities and non gateway markets that has favorable demographics, job opportunities and population growth. We're particularly optimistic about our portfolio in the Sundell, a region which accounted for 75% of U. S. Population growth over the past 10 years and is expected to add another 19,000,000 residents over the next decade. While we have not currently identified any acquisitions or dispositions, we plan to continue our capital recycling efforts and expand in regions like the Sunbelt where we see outsized migration and employment trends.
I'd now like to turn the call over to Jim.
Thanks, Farrell, and good morning, everyone. Today, I'd like to begin with an overview of our Q4 and full year 2020 results, then provide a brief review of our balance sheet and capital structure and wrap up with a discussion of our 2021 guidance. Beginning with our 2020 performance update, for the Q4 of 2020 net income allocable to common shareholders was $13,300,000 down from $23,800,000 in the 4th quarter of 2019. The decrease was due to $9,400,000 of gains on the sale of real estate assets in the Q4 of 2020 as compared to $20,700,000 of
gains on
the sale of real estate assets in the Q4 of 2019. For the full year 2020, net income allocable to common shareholders was $14,800,000 down from $45,900,000 for the full year 2019. Similarly, the decrease was due to the gain on sale of real estate assets of $7,600,000 and the full year 2020 $35,200,000 in the full year 2019. During the 4th quarter, core FFO grew to $20,800,000 up 11.7 percent from $18,600,000 in the Q4 of 20 2018. Core FFO per share during Q4 was $0.22 10% higher than Q4 last year at $0.20 per share.
For the full year, Corfifo grew to $75,900,000 up 10.8 percent was $68,500,000 in 20.19. Core FFO for the full year was $0.80 per share in 2020, up from $0.76 per share for
and full year of 2019.
Turning to our same store property operating results, NOI growth in the 4th quarter was $11.17 this quarter, up 2.6% since the Q4 of last year and has accelerated to an annualized 4 and growth rates sequentially from the Q3. While this included value add communities, we did see rental rate growth at our non value add same store communities with rental rates in Q4 increasing 120 basis points over the prior year. For the full year 2020, same store revenue grew 3.6%, almost entirely driven by the 3.4% increase in average rental rates. We have collected 98.7 percent of our 4th quarter billings and we have collected 99.3% of our 2020 billings. As a result, we have evaluated our outstanding receivables for collectibility and increased our reserve for bad debts by $124,000 during the 4th quarter to a total of $927,000 The $927,000 reserve for bad debt recorded as of December 31 reduces the future risk of any billed revenue that we have not yet collected.
To put it in context, We ended the quarter with $1,900,000 of gross receivables, including those that were part of our deferred payment plans. Subsequent to December 31st, we've collected $557,000 of those gross receivables and expect to continue receiving payments in future periods. After considering the reserve for bad debts, our net accounts receivable leftover as of December 31 was $433,000 about a third of a penny per share. As a result, we feel that we are adequately reserved and feel good about collecting those remaining net receivables. On the property operating expense side, same store operating expenses grew by 7.3% for the Q4 of 2020, primarily due to higher real estate taxes and insurance, a theme that continues from earlier year as well as increases in repairs and maintenance and contract services as a result of delays caused by the pandemic.
For the full year, total operating expenses grew by only 4.5%, which was at the low end of our original 2020 guidance range. Turning to our balance sheet, as of December 31, our liquidity position was $186,000,000 We had approximately $9,000,000 of unrestricted cash, $165,000,000 of additional capacity through our unsecured credit facility and $12,000,000 of proceeds from the November sale agreement. In November, we issued 900,000 shares of common stock under our at the market sales program at a weighted average per share price of $14 and then enter into a forward sale agreement associated with these shares. We have until December 15, 2021 to settled the forward sale agreement and received those net proceeds after commissions of approximately $12,000,000 During the Q4, we took down the remaining portion of our 2020 forward equity raise and issued the remaining 6,900,000 shares of common stock, receiving $99,000,000 of net proceeds. We use these proceeds to pay down borrowings on our line of credit.
As of December 31, 2020, our normalized net debt to adjusted EBITDA was 8.2x, down from 9.1x in Q3. We will remain focused on reducing levers and achieving our midterm net debt to adjusted EBIT target of around the mid-seven. Regarding our dividend, IRT's Board of Directors declared a quarterly cash dividend of $0.12 per share, which was paid on January 22. With respect to guidance, we decided to provide some parameters for 2021 based on increasing visibility on business, industry and economic conditions. Our guidance for 2021 EPS is a range of $0.04 to $0.08 per diluted share and for core FFO is a range of $0.78 to $0.82 per share.
Our per share guidance is based on the assumption of 102,600,000 shares and units outstanding in 2021, which is an increase of 8,200,000 shares from our 2020 weighted average share count. This increase is the result of the shares issued during 2020 as part of the February 2020 forward equity raise where the proceeds were used to fund a portion of our Huntsville acquisition and to delever our balance sheet down to 8.2x as previously mentioned. For 2021, we expect NOI at our same store communities to increase between 1.5% and 3.5%. This reflects expected same store revenue growth of between 2.75% and 4.25%. This revenue growth assumes that our average rental rates grow by 2.4% and our bad debt expense is 1.25% of our revenue.
For 2020, our bad debt expense finished out the year at about 90 basis points of revenue. For 2021, while we believe our properties will continue to perform well, we are conservatively increasing our bad debt assumption as we expect further pressure from eviction moratoriums and or other government regulations in response to the COVID-nineteen Moving on to expenses, our projected growth in same store real estate operating expenses of 4% to 5.25 percent is a result of our expectation that controllable operating expenses should increase between 2% 3% and our non controllable expenses, including real estate taxes and insurance should increase between 7% 9%. Lastly, we like to note that Beginning in the Q1 of 2021, we plan to change our definition of core FFO and will no longer exclude stock compensation expense and the amortization of deferred financing costs. Our currently issued 2021 course filled guidance does not reflect these adjustments, but we will provide all historical results and update our 2021 guidance when we report our Q1 results. Now I'd like to turn the call back to Scott.
Scott? Thanks, Jim. In closing, I would like to highlight that our strong full year results reflect IRT's commitment to retain residents, maintain high occupancy levels and provide quality homes and communities during a time of uncertainty. We're proud of the efforts of our team and thank them for their dedication. Looking ahead, we remain confident in our operating and investment model that was built not only to weather near term volatility, but also to grow and strengthen over time.
We thank you for joining us today and look forward to speaking with many of you at Citi's Global Property Conference in early March. Operator, we would now like to open the call for questions.
Certainly.
NPAT. Neil Malkin with Capital One Securities, your line is open.
Great. Good morning, guys. Thank you Thank you for taking the questions and nice quarter. First one, you mentioned JV, commentary on JV, potentially other structures to more aggressively pursue acquisitions. Can you just maybe elaborate on that?
And then Why that seems like an appropriate endeavor given your favorable stock price currently issuing equity to delever and grow as opposed to doing sort of, I guess, complicated JV structures? Thanks.
Well, thanks, Neil. Well, first, we don't look at it as being overly and we do look at it as an additional avenue to grow. I'm confident or uncomfortable looking at it at this time relative to looking at it in the past when we were able to just go out and acquire properties directly because I think I've mentioned this in prior calls that some of the values and cap Pricing of our historical type asset, the B plus, A-. Some of the prices are we think getting a little bit frothy. You look at the situation where you can buy brand new at very similar costs to what people are paying for 12 to 15 to 20 year old products.
And we think there's a real opportunity now to have some new construction within the portfolio. So not only do we see this as being benefit pricing wise, but we also see it as a way to build pipeline for future growth. It's a situation where the company is now with the delever balance sheet, I think, in a stronger position and we're willing to take on some limited risk at this time.
Yes, that makes sense. Just to clarify, that's is it mostly focused on development or just sort of newer 5 years or younger vintage. I know you mentioned preferred. So how does that go in terms of priority for you?
It's both. I mean, we're looking at both. I mean, we're going to look at what is giving us the best risk adjusted returns. But we haven't done any transactions yet and that's why we said we're exploring.
Got it. Okay. Other one for me. Just in terms of guidance, It seems, to be honest, pretty conservative just given you're accelerating from already strong levels of blended leasing spreads. Obviously, you've taken your balance sheet to I think the lowest leverage in your history.
So congrats on that. But do I mean, I guess, how do you what position do you take to sort of get to that current range? I mean, just given kind of the things you've talked about on the call in terms of strength, in terms of what you're looking at from a growth standpoint, in terms of favorable stock price to get you to the current range and not a little bit higher?
So I'm going to let Jim answer the question completely. But I just want to So I was saying that we feel that we're in a very, very good place right now. Our portfolio is well positioned. We're in the area of the country that's growing, jobs and with limited regulations, but there is still some uncertainty. The eviction moratorium is still out there.
We don't know how long it will be. We don't know how it will end. We've done a very good job of collecting rents, and we continue to collect rents from last year and from January still to this day as people are able to catch up. So again, we feel we're a good place, but there is some uncertainty and the guidance we put out, I think reflects a little bit of that. Jim, do you want to expand on this?
Yes. No, I think that's absolutely right.
I mean, I think We've done a good job of continuing to build occupancy. We feel like we're in a strong position, but there is aspects of The next few months that are unknown and certainly time will tell. As Scott mentioned, collections continue to be good, velocity continues to be good, good rent growth so far in the month of January and specifically the Q1, but we're just being cautious about Kind of what the aspects were that we don't know. As Scott mentioned, we did a nice job of collecting so far January rents and we continue to Collect rents every day for January and January rents are actually slightly the collections are actually about 30 basis points better today Than they were as of yesterday. So life continues to improve and obviously we will continue to evaluate market conditions and update guidance throughout the year as
Schmidt with KeyBanc. Your line is open.
Great. Good morning. Thanks, guys. Yes, just wanted to hit again on some of the new news around the preferred equity and joint ventures and just hope you could talk a little bit more about how you're underwriting these deals and how large this Investment or platform could become as a percent of enterprise value or however you're thinking about it. And then you also mentioned that this is a source of potential future acquisitions and help building that pipeline.
But how much would you guys be willing to expand into kind of more A type as this really hasn't been the focus historically?
Thanks, Austin. So we've identified or targeted no more than $100,000,000 at this time for this program. We think ultimately it would be and will be very accretive. As far as new construction and it not being what Remember, we were looking at and build a portfolio of fee assets, really because we felt for good share accretion and growth. That equation becomes a little more difficult, say, when you see, again, 15 to 20 year old product trading in some of our markets, So we look at it as a good alternative way to allocate capital at higher returns and a way to continue to grow within the markets that we like.
And as far as the competition, Don't forget the areas that we are at Sunbelt are growing tremendous savings. There's one report out there that there will be a $19,000,000 people of population growth in the Sunbelt region over the 10 years. Well, that's 19,000,000 homes that don't exist. So we think there's an opportunity. Obviously, it's going to be somewhat limited.
As I said, we're still worrying and we haven't done anything. But we think it could be a very good way to allocate capital accretively. Again, looking at risk adjusted returns, but not getting out over our seats. We're going to do it in a limited and measured way and make sure it's the right thing to do for our company.
Got it. No, I certainly think it can make a lot of sense. I appreciate the thoughts there. So as we think about kind of funding this investment, you guys did issue some shares under the ATM, some additional shares under the forward program. And curious what your thought is on how much appetite you have to do anything additional there on that front and kind of related to, I guess, funding these initial this initial preferred equity investments, either through the ATM or just capital recycling?
So we're looking at
it really as part of the capital recycling initiative that we're not going to go out and issue equity in order to fund this. But it will be part of the capital recycling. But again, money is fungible. So we are we do think there's opportunity for growth, notwithstanding The sloppy cap rate environment. We have very good relationships.
We continue to monitor them. We have the ability to execute and transact quickly, which some sellers want, and we will continue to take advantage of those opportunities as we have in the past. But this is just an alternative use of capital and nothing different and my earliest will come from the recycling program.
Got it. Thank you for the time.
Thank you. Nick Joseph with Citi. Your line is open.
Thanks. Maybe just following up on that, it's obviously nice to see the leverage progress that we've made so far, but when do you expect to get to the target of mid-7s and then given guidance and the new announcement this morning, where do you expect leverage to be at the end of 2021? Hey, Nick. Thanks. As it relates to our mid to low to mid-7s target, we're still on target to hit that by the end of 2022.
I think we'll continue to make progress on that front between now and the end of 2021. And obviously, we'll continue to work everything we can to kind of grow those earnings and reduce that net debt to EBITDA through just normal accretion. Obviously, there is aspects of future growth that's still a little bit unknown and we'll just continue to just moderate and update guidance throughout the year as that And so what does current guidance present to the end of the year? It's a slight downtick to the kind of upper 7s from where we are today about 8.2. Thanks.
And then just following up on the on kind of the JV or this new channel growth opportunity. Why is now the right time, not necessarily from the opportunity, but just given the uncertainty still from COVID and the eviction moratorium and everything like that and the progress that you've made on leverage. Why is now the right time to execute on that is waiting a little while longer until you have a little more clarity and stability?
Thanks, Nick. It's Scott, so that's one of the reasons the I should say the things you mentioned are the reasons that we're exploring and that we haven't jumped in headfirst. We're looking at it. We believe that The COVID will come to an end. There is an opportunity.
Some of the lenders have pulled back making capital a little more needed by the developers and it gives us the opportunity for better pricing at this time, but we are exploring it. And we do recognize the uncertainties and that's why we're going slow. But Now with the leverage down where it is and to Jim's point, we can see it in the 7s by the end of this year. I just feel a little more comfortable to add those different risks when you look at what the reward will be. Thank you.
Amanda Seuzer with Baird. Your line is open. Thanks.
Good morning, guys. Wanted to start with your value add pipeline and the 2 projects that are still on hold. Can you go through the fundamental triggers you're looking for to become more comfortable with restarting those projects? And then as we think further out, do you see opportunities in the existing portfolio to add properties to that pipeline beyond the 6 that you've outlined?
Sure, Amit. It's Farrell. Good morning. So the 2 properties that we haven't commenced Out of the 6 that we identified, one is our Asheville community. It's a market that is heavily dependent on tourism and service.
So if You look at the results, we're down in that market and we're looking to get an 18% to 20% return on any renovation projects. So right now, we just don't feel that given where the market is that we would be able to generate those types of returns. The other property is a property in Raleigh. Same type of situation given the submarket. We are not confident right now, but we think in the Sure.
We will probably add that to the value add pipeline. And I think, as you know, we've built out teams in all these markets that we're doing value add in Columbus, Memphis, Tampa, Raleigh. So we're self performing all the work and saving a considerable amount of money compared to somebody that would have to bring in a general contractor. So There's still several markets that we have not done this in that have communities that we think will eventually be added to the value add pipeline such as Indy and Indianapolis and Oklahoma City and Dallas. So it's just a matter of, again, building out those teams and not and doing this really thoughtfully.
That's helpful. And then following up on the most recent forward sale, can you talk more about how you thought about your cost of capital At the $14 per share issuance price, I guess, relative to your NAV likely increasing to the recent decline in private market cap rates?
Yes, I
mean, I think when we look at kind of raising equity capital, we
tend to look at kind
of how we can deploy assets that are with the cap rates are of assets and just making sure that it's accretive from an earnings standpoint and from an NAV standpoint. So that's kind of how we think about the cost of capital per se. And We always look at it also as a kind of incremental deleveraging. So we may not use those proceeds to fund something where it's leverage neutral, but rather leverage Improving through time and just kind of take that into account in terms of making sure it's accretive from an earnings and NAV standpoint.
That's helpful. Thanks for the time.
John Massocca with Ladenburg Thalmann. Your line is open.
Good morning.
Good morning, Michael.
So you mentioned that the Class B market appeared kind of frothy, but I mean how has that trended recently? Just Curious if you've seen any impact on competition for assets from kind of some of the recent changes in interest rate expectations?
Yes, John. Good morning. It's Farrell. Yes, we've definitely seen some pressure on cap rates in our market. I mean, it's a Pretty favorable asset class right now and the markets we're in are desirable.
So we're seeing cap rates at 4.5% and trending down to, as Scott mentioned, even sub-four percent in certain circumstances where people are underwriting significant value add. So It's gotten pretty competitive. But I mean even it
has even gotten more competitive since say like November, December is maybe there's been some expectation of a little bit of an interest rate increase on the long end of the curve?
I would say that Even before coming out of the summer, there was just pent up demand because there was a lot of deals that just went sideways because of the market. So I would say that the Q4 in general and into this year, you've just seen a lot more people get a lot aggressive because they haven't been able to put out capital for 6 months.
Okay. And then I know
we've talked about the JVs You're kind of ad nauseam at this point, but in light of the discussions around JV, what is your view on kind of supply dynamic for Class A assets in your markets. I mean historically there has been some headwinds to those assets from new supply that doesn't exist in Class B. And Has the pandemic just kind of extinguished all that concern given kind of population movement and some of the growth in some of your core market?
I don't think it's distinguished that concern, but I think that we're going to come at this in a very targeted way and make sure that we are in locations and markets that will be able to absorb any new supply and that
you're well located
and appropriately managed. So It doesn't eliminate the concern, but we expected that we'll be doing it in a way that we take all of that into consideration.
Okay. And then one last detail one on the balance sheet. As some of these kind of mortgage bullets come due, should we Refinance is mortgage debt or are you kind of moving to a completely unsecured balance sheet?
Yes, this is Jim. Yes, we'll be moving to an unsecured balance sheet, so we will not be refinancing those mortgages.
Okay. That's it for me.
Thank you all very much.
Thanks, Shahriar. Thank you.
There are no further questions at this time. It's now my pleasure to turn Call back over to Scott Schaeffer for closing remarks. Well, thank you all for joining us today. We are excited for 2021 and look forward to speaking with you and giving you an update
on our next call. Have a good day.
This concludes today's call. We thank you for your participation. You may now disconnect.