Welcome to Citi's 2026 Global Property CEO Conference. I'm Nick Joseph here with Eric Wolfe with Citi Research. I'm pleased to have with us MAA and CEO Brad Hill. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to LiveQA.com and enter code GPC26 to submit any questions. Brad, we'll turn it over to you to introduce the company and team, provide any opening remarks, tell the audience the top reason an investor should buy your stock today, and then we'll get into Q&A. I think you just hit the red button there. There we go.
Are we live now? Okay, good. Thank you. You got that on yours. I'm Brad Hill, President and Chief Executive Officer. To my left, I have Clay Holder, our CFO, and to my right, I have Tim Argo, who's our Chief Strategy Officer. To his right, we have Andrew Schaefer, who's our Head of IR and Investor Relations. Appreciate the opportunity to be here today. Just a quick intro on MAA, I'll get into some specifics about why I think now is a good time to be investing in MAA stock. MAA is a multifamily exclusive, a multifamily REIT, where we focus in the Sun Belt predominant region of the U.S.
We're in other high-growth markets as well outside of the Sun Belt, but predominantly we are in the Sun Belt of the U.S. We have an over 30-year history of investing and carrying on activities in that region of the country specifically. We are a well-diversified multifamily REIT. We focus in both large and mid-tier markets, and diversification is a key component of our, of our operating strategy and our investment strategy. Key reasons why I think now is a good time for investors to be investing in MAA. Number one is, it's a great value. Certainly, if you have access to the package that's in front of you, I'd call your attention to slide 6 and 7 of that deck.
By investing in our stock today, investors get access to a portfolio that has consistently delivered strong Core FFO and TSR performance, as indicated there on that slide at lower volatility than what we've seen by others in the space. You get a portfolio with the largest exposure to the high-demand, high-growth region of the country, as I mentioned a moment ago, and one of the best operating platforms that we continue to invest in, to continue to strengthen and to improve margins in terms of our performance. All of that today at one of the lowest multiples, highest cap rates that we've seen in quite a long time.
With that, we're also delivering a strong current income for investors through a very strong dividend yield that's well supported by an A- rated balance sheet. Not only are you getting great value, you're also getting growth prospects. If you look at slides 9 and 12, we lay that out a little bit, where if you look at our region of the country, we're seeing the largest reduction in new supply across the country. If you look at the demand dynamics, whether it's job growth, population growth, household formation, wage growth, all of those demand fundamentals continue to be significantly stronger than what we're seeing in other regions of the country.
Those two dynamics really come together to support what we believe will be strong growth prospects for our existing portfolio. The final point is the other investments that we're making to not only drive growth out of our existing platform, but to make accretive investments. You look at our redevelopment, our repositioning, where we continue to invest in our existing assets to help them compete better with the new supply that's coming into the market, where we're able to get close to 20% cash-on-cash returns.
New development that we continue to invest in as well through driving accretive returns, and then tech investments, as I was mentioning a moment ago, to drive margin expansion opportunities. Those are the reasons that we think investing in MAA now is a good path for investors.
Great. on the call, you mentioned that you expect to see a pretty significant year-over-year change in your rental rate growth this year. I think it's if you look at sort of 2025 versus 2026, you're expecting that to go up, call it, 130 basis points or so. I guess maybe can you just talk about sort of what you've seen thus far? I know it's early, but just sort of what you've seen thus far through January and February, what the sort of forward indicators are telling you about the early strength of the peak leasing season, and why you have confidence that you're gonna be able to achieve that target.
Yeah, I'll touch on that. I would say, you know, so far pretty much in line with expectations as we sit here in early March with January and February results. I mean, the way we think about, as you said, kinda 1%-1.5% is the expectation for blended pricing for 2026. Our expectation would be relatively normal seasonality on the new lease side, where we start to see some momentum from now into late July or so, then start to see it trend down a little bit with normal seasonality.
I would expect the latter part of the year for that moderation to be a little bit less than what we typically see as we continue to see supply, the impact to supply continue to moderate, expect steady demand as well. On the renewal side, we expect pretty consistent five-plus type renewal lease-over-lease rates. We've now sent out through May, and we're seeing that hold up pretty well, so feel good about what that means not only for the year, but what that means for demand expectations, what that means for new lease pricing.
We're starting to see the momentum. You know, we saw a little bit of a slowdown in late January with the winter storm, particularly in our portfolio with a lot of our markets impacted at some level by that. We saw that demand kind of pick right back up, you know, 10 days or so after that. Kind of back to normal there. You know, when you think about the supply drops, 30% fewer deliveries in 2026 than last year, continuing to get further away from that peak of 2024 in terms of units in lease-up in our markets, and then the expectation, some of the demand fundamentals Brad mentioned, that's what gives us confidence and kind of as we sit here today and where we see the rest of the year.
You, you mentioned demand is steady thus far. I guess, what do you mean by demand? I guess, how are you defining demand internally? What do you guys talk about when you're, you know, have your weekly or daily meetings about, like, how demand is trending? What are the indicators, and what are they doing on a year-over-year basis?
I mean, lead volume is what we look at a lot, you know, it's essentially traffic coming through the door, coming on our website, coming in through various marketing sources, then looking at that as a percentage or as a per exposed unit, if you will. We look a lot at exposure, which is our current vacancy plus units that are on notice to move out over the next 60 days. Our leads per exposed or actual exposure are significantly better than they were this time last year. The closing ratio. Ultimately, we're looking to take a lead, turn that lead into a visit, turn that visit into an application, then ultimately into an approved lease.
That closing ratio of lead to gross lease, we've seen that pick up over the last few weeks. That's more a near-term demand scenario than we look at with renewals. As we said, we have that information starting to get into May as well. Exposure, lead volume, those are more the near-term things that we're looking at that look pretty positive right now.
Can you maybe just talk about that, specifically the lease exposure, and tell people, you know, exactly sort of what that means? I guess what is the implication of the fact. I think you said it was significantly better than at this time last year. When you see your lease exposure come down to a certain level, is that when you get a bit more aggressive on new lease rates? Like, what is the sort of implication of seeing your lease exposure getting better?
Yeah. If you think about exposure, and we have tolerances throughout the year. We would tolerate, if you will, a little more exposure in the summer because we have more people coming in the front door. It ranges anywhere, I'd say, from 6%-8% throughout the year. That's, like I said, that's your current vacancy, and then that's notices that or people that have let us know that they plan to move out. Right now, we're somewhere in around a 7% range, which is 30, 40 basis points better than where we were this time last year. You know, it does play into our pricing occupancy mix.
It's still target. It's gonna be a sub-market. It's gonna be a property even to a unit type level. We look at those exposure metrics all the way down to a unit type level. There could be certain unit types we're pushing pricing a little more even on the same property. It's gonna be, you know, macro factors certainly play into it, but a lot of these micro factors impact our decision-making as well.
You talked about lease-ups earlier. I think if you look back at the last sort of two years, one of the things that's been the most difficult to judge is sort of this changing demand patterns that we've had and then how that impacts, you know, the lease-up of supply that is already delivered. We have the statistics, you know, on sort of what's delivering this year. I think you've sort of framed what you expect this year and next year.
Can you maybe just help us understand, you know, what's happening in real time, in your markets in terms of leasing up, that sort of excess inventory, that delivered, call it, over the last year or so, sort of where that is in the process and sort of what the likelihood it is that we're gonna see some pricing power when we get into the peak leasing season?
Yeah. I mean, if we look at in our markets, just market level occupancies, which includes stabilized plus units in lease-up, the overall average occupancy is about 200 base points higher than it was kinda at the trough, if you will. We look at the number of units in lease-up. How we define that is just all the units in for being delivered in lease-up that are in our markets. It's down about 120,000 units today from what it was at the peak, and we've continued to see positive net absorption. There's still some concessions out in the market. I mean, the average about a month and a quarter or so is kind of what we're seeing broadly.
Some of the lease-up submarkets are still in that 2–2.5 month range in targeted areas. That creates some of the opportunity as well. When those concessions burn off, creates significant opportunity to grow leases. You know, one month represents 8% rate growth right there. When we look at just market level occupancies, absorption, where we were relative to the peak, and then combine that with the demand factors, that's kind of what drives our expectations.
Got it. I guess again, early in the year, but are you seeing any sort of markets sort of standing out? you know, anything can change sort of on a month-to-month basis. It seems like Atlanta maybe is finding its footing a little bit, maybe Dallas. Can you just talk about the markets where you think you might see that pricing power the earliest versus those that you expect might take some time?
I mean, you called out too, for sure, Dallas and Atlanta, we have a slide in there that talks about some of our market expectations and ones that are trending up, and those are two. The way we've sort of looked at that is what has pricing power been the last four, five, six months in those markets relative to where it was a year ago. Atlanta and Dallas are two that when you combine pricing and occupancy gains are significantly better than they were this time last year.
Austin and Phoenix are ones that you ask about more laggard markets. Those are B1s that are probably later 2026 into 2027 recovery. They are doing better on a relative basis than they were this time last year, but that's coming off some pretty anemic numbers. We're seeing a little bit of momentum, but don't expect those to outperform. I think some of our mid-tier markets we've talked about are Richmond, Greenville, Charleston. We would expect to continue to have pretty good performance out of those. Houston's a larger market that's holding up well. We expect good things.
On the flip side, probably Raleigh and Charlotte are two that we're keeping an eye on the trending down. They've gotten a lot of supply over the last few years. They've held up pretty well, but it's starting to impact there. Raleigh, I would almost put in a little bit of an Austin light, where it's got some of the best demand fundamentals of any of our markets, but just gotten a ton of supply. Those are a couple that probably fall on the, on the longer end of recovery as well.
When you say your renewals are going out at, you know, over 5%, I guess, you know, can you tell us what the take rate has been on that? You know, when we think about sort of the variability in that across markets, is that just very consistent? Like, if you take a weaker market, you know, is it also 5%, or is it like, you know, you're getting 1% in a weaker market and 8% in some of the stronger ones? It just averages 5%.
I mean, it varies a bit. It's not quite as extreme as that. I mean, you know, a tougher market, we're probably in the 1%-2% range, some of the stronger markets, more in the 6%-7% range. We're, you know, as far as retention, we're seeing pretty similar retention to what we had last year. You know, last year was our record low turnover, close to 40%-41%. We're seeing something similar so far. Not really, certainly not seeing any degradation in the retention rates. You know, the speed in which people are making decisions is pretty consistent. We're not really seeing that get delayed. You know, all positive so far on that front.
I guess one of the more common questions I get, I think, you know, there you have people that are bullish on the stock, you have people that are bearish, always a healthy balance. Those that are bearish, you know, sometimes bring up this idea that, you know, you're renewing tenants at a rate that is higher than market. I think there's this sort of fear that, you know, as you move forward, that sort of premium, if you will, kind of just comes down to zero, comes down to market, and it's an inhibitor even as market rent growth presumably grows. I mean, can you talk about...
You know, I assume you don't agree with that, so just tell, you know, people why you don't agree with that, and sort of why you think the sort of renewal premium, if you will, is sustainable.
Yeah, I can start, and Tim can jump in. I mean, I think, you know, it's obviously a question we get a lot. If you look back at our historical renewal performance, I mean, we've been in the 4%-5% range for years. You know, normally what you see is the renewal to new spread gaps out in the first quarter and the fourth quarter. It's always a little bit wider in those quarters, and it narrows as we get into the summer. I think, you know, today we're probably at the widest range that we've been in quite some time. That spread today is only $180.
It's not like, you know, the folks that are renewing are, you know, paying $200, $300, $400 more than what the new leases are paying. We continue to monitor the reason that folks are moving out. The reason for moving out because they don't want to pay the rent increase continues to decline. It's down 10% in the fourth quarter, year-over-year. That continues to decline for us. What I think you would generally see for renewals to really pick up, you know, the single-family home market has to get a little bit stronger than where it is today.
I think if you look back at the historical performance that we've had when the single-family market is doing well and folks are moving out to buy homes, the economy is doing well. Certainly in that instance where we would expect that to occur, we would expect new lease rates to be in the gap, certainly to be a lot smaller. You know, we certainly don't see a risk of, you know, the gain to lease scenario that folks keep talking about. I mean, in fact, we're seeing our retention continue to increase. We focus a lot on customer service.
And the reason why folks are renting with us, the number one reason is because they don't wanna pay, they don't want a maintenance requirements by living in a home. You know, we focus a lot on the service side of things that we're doing. You know, we're not seeing anything to indicate to us that there's pushback on the renewal side. In fact, our renewals this year so far are, you know, 75 basis points or so better than they were last year, and the move-outs continue to decline. Anything you'd add to that, Tim?
No, I think that, I think that's right. I mean, the other point is, you know, we still are at 40%, 41% turnover, we still have people turning, and, you know, our average stay is about 22 months or so. There's not a lot of scenarios where you keep stacking renewal on top of renewal to where it continues to gap out significantly. There's a little bit of a natural governor with that low turn rate, but still, that turn rate's still there.
Yeah.
I think, you know, the other fear, and you just talked about it a second ago, is that you've had this great retention, very low turnover. It seems like quite a bit of it is associated with affordability gap on the, on the for-sale side, just the fact that it costs considerably more to purchase something today than to rent. I think the fear is that, you know, that sort of retention goes down as President Trump and sort of housing policies get initiated. Is there anything that you can see based on what he's announced, you know, thus far or what's in the pipeline?
I know you know, keep on top of what's going on the regulatory side. Like, is there anything that you see that you think is gonna change that dynamic? Is there any risk out there where you say, "You know, I really hope we don't see this legislation because that's really gonna, you know, ignite housing demand"?
Well, certainly there's been a lot of proposals that have put out, and I think there is a lot of focus on affordability, and single-family affordability is a big part of that. I do think, you know, the thing that we have to strive to start is we've gotta have more supply of single-family and multifamily. That's what's gonna ultimately solve the issue that we have. To date, you know, there's been three or four proposals that have been kind of floated out there. You know, I haven't seen anything in any of the proposals to date that really stimulate supply. That's really what we need.
You know, to date, we've not seen anything that would indicate to us that there's gonna be a material change in the turnover numbers associated with the single-family side. You know, the drop in move-outs for single family is something that has been going on for 10 years now. It started 10 years ago, where our turnover was about 50%, and a big portion of that at the time, was moving out to buy a home, and that's down significantly. That's a trend that started 10 years ago. It's not a COVID-related phenomenon. It's something that's been there. I think it's a secular trend as well.
We're seeing folks move out or, pardon me, get married later, have kids later. Normally, the number one driver of folks moving out is because of a change in their family dynamics. As we see those things occur later in life, then we would expect to see retention continue to hold in there. The other thing is, if you look at some of the new supply on single family that's come to the market, a lot of times it's located further out than where we're located. What we're just not seeing our renter dynamic looking to own a home.
We lose just a few percentage of our residents every year to that, certainly only 3% to rent a home. We're not seeing a big portion of our dynamic or our demographic looking to go out and to own or to rent a home. The ideas that have been floated so far, we don't see those having a material impact in the near term.
Have your demographics changed? Like, you mentioned this is something that's a process that started 10 years ago. I mean, if you think about your average customer today versus what that customer was like 10 years ago, is that different? Then maybe also layer on top of that sort of how you think about affordability of your products or where rent-to-income is today versus history. You know, as the cycle hopefully turns, right, as supply comes down, demand stays steady, you get rent increases, the ability of that tenant to absorb further price increases, rent increases.
Yeah, I mean, the first one I'll hit there is your affordability piece. I mean, if you look at the rent income in our portfolio today is at 20%. Two or three years ago, it was up to 23%. Certainly we have a highly affordable product. That's part of the reason why we focus on the region that we focus on and the product that we focus on is because of that affordability piece. In terms of the demographic shifts that we've seen, I mean, I think our residents have gotten maybe a year or two older. We're a little bit more female than what we have been historically.
I think 80% of our residents today are single. You know, we've seen some demographic shifts associated with that. Certainly a lot of dog owners in our communities today. I think all of that has shifted to the renter for longer scenario that we're seeing. I think we've seen a slight uptick over the last couple of years in terms of the residents per unit has gone up just slightly. No material shifts in that regard. The demographics that we see are strong.
They're certainly financially stable, able to afford the product that we've seen. I think you gotta keep in mind too, in our region of the country over the last year, we've seen tremendous wage growth over 5% wage growth, which is really helping support the affordability of our product.
You mentioned that supply is ultimately the solution, on both sides, whether it's for sale or multifamily. I mean, one thing that we've heard, at least so far, from certain people is that construction costs seem to be coming down. There seem to be some savings. Can you maybe talk about, you know, what kind of savings you're seeing on your side? How much construction costs are coming down? If that ultimately is gonna result in seeing more supply starts this year, I know rents probably need to rise a little bit more, but, you know, is the construction cost coming down enough to get more supply coming in in like a year or two?
I mean, I think, you know, we as part of our development platform, we look at a lot of equity packages for new developments that are out in the market. We probably underwrite, right, 50 or so projects a year. Predominantly, all of the projects are still not financially feasible. They're generally showing yields in the mid 5% range. We need to see a substantial improvement in, as you just mentioned, the rents as well as construction costs coming down somewhere in the probably 12%-15% range combined between those two before you really see most of these deals start making sense.
You know, what we're seeing today is probably a 5% reduction on the construction cost. We're generally seeing a couple of percent on the front end. Where the other savings is materializing generally is in the buyout. After you go under contract and the contractor goes out to buy out the contract from the subcontractor. You're not generally seeing all of that on the front end. Some of that materializes during the project. We need to see still a substantial combined reduction of either rent increases or construction costs coming down before we see a majority of the projects that are out there today begin to pencil.
I do think it's important to keep in mind what we're seeing more of, though, is developers unable to find equity for projects. We're also seeing developers not willing to spend pre-development dollars to get projects going at this point in the cycle. It still takes one year to a year and a half from when you start pursuing a project before you're able to get permits and ready to start construction in the Sun Belt. I do continue to believe that there is going to be a material window of where the supply numbers are well below long-term averages before the pipeline again continues to pick up.
I think it's also important to remember that the peak supply that we saw delivering in 2023 and 2024, that is directly correlated with the interest rates that we saw that were effectively zero , two years before that. I don't think we go back to a situation where we have the supply levels that were 6% of inventory in our markets. I mean, if you look at long-term averages are around 3%. Today, the trailing 12-month starts are somewhere in the 1.8%- 1.9% range.
We're well below that and have been for the last three years. I could see a situation where the supply over the next year and a half, two years starts to tick up a little bit or new starts start to tick up. It takes time for that to start manifesting itself into deliveries.
Sorry, did you just say that starts as a percentage of inventory is kind of like around sub two, like 1.8%? Just trying to think through like two years from now, like what's the level of sort of inventory we'll be seeing?
Yeah, it's the 1.8%. I think we have a slide in our deck that forecasts out for the next couple of years based on third-party data that we have in our region. Again, the long-term averages are three-ish, three to slightly above that. The projections we have for the next couple of years are in the 1.8%- 1.9 % range.
Any questions on sort of from the audience before I switch to capital allocation? Just jump in. I guess keeping with development, you know, you've had a growing but relatively consistent development pipeline. I think for the last two years, you've sort of said, you know, the earnings contribution from the development pipeline is coming. I think you said on the call that you're going to see this contribution next year. Can you just talk about sort of what gives you know, confidence in that?
I mean, I think number one is, you know, when we underwrite developments, we're pretty conservative in how we look at those developments. If you look at what we've done historically, well, let me back up. Today what we're underwriting yields are in the 6%-6.5% range. Still very strong yield contributions from stabilized yields contributions from these developments. If you go back and look at what we've developed over the last five or 10 years, on average, our developments have delivered stabilized NOI yields 90 basis points higher than what our expectations are.
They've delivered costs that were 3% below and rents on average have been 8% above what our expectations are. We are very conservative in how we underwrite projects. What we're seeing today, though, is the new deliveries that are delivering into the market right now are leasing up slower, just given all the supply that's in the market. We've also seen increased concession usage. Most developments you underwrite one month free. We're seeing two months free or so on those developments. The concession usage is taking longer to burn off. What we've said is the full earnings contribution from the developments that are delivering today is pushed off about one year.
The good news is the recurring rents that we're seeing on those projects every month are still above pro forma. Again, concessions are higher, but we are burning those off. If you look at our renewals on lease -ups, we're getting low double-digit rent growth or lease-over-lease rent growth on renewals. We're burning the concessions off. Again, we believe in the long term earnings contribution from our development pipeline and from those deals. It's just taking a little bit longer to get there than what we originally anticipated.
On the buybacks, you know, some of your peers have been, you know, quite a bit more aggressive in repurchasing stock. You just talk about why, you know, you haven't done the same? Obviously we've seen, you know, one of your closer peers selling a large portfolio to potentially fund some buybacks. Maybe just talk about through your strategy around buybacks versus, you know, dispositions and sort of why you haven't been quite as aggressive as some of your peers?
Yeah. Well, I think as we look at really all of our capital allocation options in front of us, you know, really what we're trying to do is deliver long term TSR performance that leads the space. Certainly we believe that the best way to deliver long term TSR performance is through development, where we're able to consistently deliver yields. Again, aside from the supply environment that we're in right now, we're able to deliver yields and NOI growth that exceeds what our existing portfolio delivers. Particularly if you look at that on an after CapEx basis, the growth rate that we're getting from development delivering into our portfolio is a lot higher than what our existing portfolio is.
That's point number one. Number two is we do think that we need to have a balanced approach. We need to be able to take advantage of short term opportunities, but we also don't want to do that to the extent that it restricts us from carrying on investments in a way that we think will deliver that long term TSR performance. We are balanced. If you saw in our package there that we have purchased about $61 million worth of shares to date, and we will continue to be opportunistic in that way.
Again, we believe that development is the way for us to be able to deliver TSR performance going forward that is certainly stronger than what the sector average is able to do.
I guess kind of a random question, but like where do you think like the bottom end of your portfolio would trade today? Like if you were to sell your dogs, you know, the worst stuff that you have, I don't know what percentage that is of what you own, but like where do you think that would trade on a cap rate basis?
Yeah, it's hard to say. We don't own any dogs. You know, some of our assets that are in smaller markets, where we just have a couple of assets that are a little bit older, they're probably in a call it a six cap range.
'Cause I guess the question is, you know, I understand what you're saying about development and, you know, why it's better over the long term, but it's not necessarily an either/or type of analysis, right? If you're able to do that plus maybe sell some of your worst assets at an accretive spread to where your actual stock is trading, it seems like you're improving the growth profile, you're getting rid of some of your lower quality assets. again, like, it doesn't have to be either/or. I guess that's really my question is why not approach it that way?
Yeah. Well, and believe me, we've analyzed it every different way. You know, I think for us, broadly speaking, you know, we do not have a lot of assets that we need to cycle out of. I mean, we like the broad diversification of our portfolio. We like where we're generally located. We don't have a large portfolio of properties that we could sell and reallocate that capital. What I would say on some of the examples that you just gave, I mean, I think you have to keep in mind there are tax implications associated with this as well.
You know, our portfolio on average, what we've sold over the last five years, the depreciated basis, which is creating certainly a tax gain for us is somewhere in the 80%-90% range. When you take that into account, the best opportunity for shareholders through that is if we sell that, is then to 1031 that into new properties, which we wouldn't have a lot at that point left to buy shares back. That's not the strategy that—number one, we don't need to sell a whole lot of properties and to reallocate capital from one area of the country to another. That's just not a situation that we're in.
Brad, one thing we're focusing on all these sessions is just efficiencies internally from AI deployment. How is MAA thinking about finding those efficiencies? How are you deploying AI? You know, what's the mix of build versus buy or partner?
Well, we've been using AI now for a few years. Certainly in lead management, AI is a key component of what we're doing in that area. We've also used internally have built some AI capabilities to help us with things like bill reading, bill payment, things of that nature, where we've got some AI readers to help in that regard. We've been active in that space for quite some time. I'd say where we are right now in terms of build, buy, partner, generally is mostly we're partnering with AI providers just generally because the AI is mostly siloed today in whatever third-party software that we're using in our tech stack.
We are looking at building our own kind of AI capability that sits on top of our data warehouse, where we're able to mine our own data through AI capabilities. We're certainly very active in that space.
Do you think it'll drive meaningful, you know, efficiencies either on the G&A side or operating margin? Where, where do you see the opportunity?
Yeah, no, absolutely. I think the industry's probably on the front end of that, and I do think that's probably a next, probably two to three year as the industry continues to specialize and centralize, which is certainly an area of the business that we're focused on. I think what you'll see is some efficiencies and scalability in the operating side of the business, which will drive G&A expense and property expense reductions as well.
I know we have a few more seconds here, so just rapid fire. Same story on ROI growth for the apartment sector overall next year in 2027.
1%.
Will the apartment sector have more, fewer, or the same number of companies a year from now?
Fewer.
You said 4%, right?
Did you say 2026 or 2027?
2027.
2027. Oh, I thought you said 2026. 2026, 1%. 2027, I'm gonna say, 3%.
I was about to get concerned. I was like 1%. It's like, all right.
Well, it's funny, I was thinking, I was like, "I think he said 2027." All right.
Thank you.
Thank you.
Thank you.