Good morning. My name is Anon and I will be your conference operator today. At this time, I would like to welcome everyone to the BSR REIT's Q2 2021 Financial Results Conference Call. Thank you. Mr. Bailey, you may begin your conference.

Thank you Anon and good morning everyone. Welcome to BSR REIT's conference call to discuss our financial results for second quarter ended June 30, 2021. I am joined today by Susie Koehn, our Chief Financial Officer. Also with us are Dan Oberste, President and Chief Investment Officer and Blake Brazeal, our Co-President and Chief Operating Officer, who will also be available to answer questions following our prepared remarks. I will begin the call by providing an overview of the second quarter performance and other corporate developments, Susie will then review the financials and I will conclude by discussing our outlook and strategy. After that, we will hold a Q&A session. Before we begin, I want to remind listeners that certain statements about future events made on this conference call are forward-looking in nature. Any such information is subject to risks, uncertainties and assumptions that could cause actual results to differ materially. Please refer to the cautionary statements on forward-looking information in our news release and MD&A dated August 10, 2021 for more information. During the call, we will reference certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see our MD&A for additional information regarding our non-IFRS financial measures, including for reconciliations to the nearest IFRS measures. Also, please note that all dollar amounts are denominated in U.S. currency. Our strong second quarter financial results demonstrated the benefits of our strong management team and capital recycling strategy which is substantially complete. By reorienting our portfolio to high modernized quality properties in primary Texas markets, on a per unit basis we generated 26.7% year-over-year growth in AFFO and 21.9% year-over-year growth in net asset value. AFFO will continue to increase as we stabilize the portfolio using our $200 million in acquisition capacity. Our weighted average rent at the end of Q2 was $1,206 a 21.8% increase about $990 at the end of Q2 last year. This increase reflects the impact of the capital recycling program, which has been transformational. To put this point in perspective. At the time of our IPO in 2018 primary markets represented 22% of our NOI. Following the Hangar 19 acquisition announced July 29. That figure has increased to 97% and the weighted average of our properties in our portfolio has decreased from 29 years to 13 years. At quarter end, weighted average occupancy was 96.2% and improvement from 94.9% at the end of Q2 last year. This two is a significant accomplishment. And not just because it was achieved during the pandemic. Our three core Texas markets. Dallas, Houston, and Austin are among the best in the country. And we're generating simultaneous growth there and both average monthly rent and occupancy. This is the primary driver of our significant year-over-year and quarter over quarter growth in NAV and we expect this strong NAV growth to continue. Susie we'll take you through the financials in more detail shortly. Well for now that we generated same community revenue growth of 5.4% and same community NOI growth of 5.2%. We also generated positive growth in total revenue and NOI, even though we divested far more properties than we acquired over the past year. Those results highlight the underlying strength of the Austin, Dallas in Houston MSA. Subsequent to quarter ended at July '21. We were excited to see our same community rental rates for new leases increased 16.3%. So you'll understand our confidence in AFFO and NAV growth going forward. During the second quarter, we completed sales of noncore assets in our portfolio. We are now focused on deploying our acquisition capacity and our target primary markets, while also exploring accretive opportunities to more fully exploit the platform. As I indicated, subsequent to quarter end, we acquired Hangar 19 apartments and the Dallas Fort Worth market for $82.75 million. Hangar 19 is the newly constructed garden style community with 351 high quality apartment units. It is a new property that was constructed just last year and is equipped with many of the amenities of that our residents like. As you might have guessed, the name it is located close to the Dallas Fort Worth International Airport, as well as major highways. With Hangar 19 included we now have 3014 apartment units in Dallas Fort Worth. We are excited to realize the benefits of this new scale in one of our core primary markets. Following the Hangar 19 transaction, we have debt to GBV of 44.9% and approximately $200 million of acquisition capacity. We expect to complete however, approximately $167 million of additional acquisitions before the year end of 2021. We expect these transactions will increase AFFO by approximately $4 million or $0.08 per unit on an annual basis assuming similar economics to the Hangar 19 deal. At that point, our portfolio will be stabilized. Therefore, before I turn it over to Susie, I would like to provide a brief update related to COVID-19. We collected 99% of expected monthly rent in the second quarter and again in July 21, which is in line with our historic norms. So the pandemic is not impacting our collections. I also want to note that as of July 31, we have collected $0.6 million in rental assistance through the federal government's emergency Rental Assistance Program, which assists households that are unable to pay rent and utilities due to COVID-19. The money was collected through eligible residents at our properties. We are continuing to monitor the spread of COVID-19 and its variance. We will take the necessary measures to help keep our residents and employees healthy and safe. I'll now invite Susie to review our second quarter financial results in more detail. Susie?

Thank you, John. Bake community revenue increased 5.4% in the second quarter to $13.9 million from $13.2 million last year. The improvement reflects an increase in average rental rates for the same community property from $1,044 per apartment needed as of June 30, 2020 to $1,079 per apartment unit as of June 30 this year, as well as increased, increases in late rental payments fees associated with moving in and out of the community and utilities reimbursements revenue. Total portfolio revenues for Q2 2021 increased 2.8% to $28 million compared to $27.3 million in Q2 last year. This reflected organic rental growth as well as the contributions from property acquisitions and non-stabilized properties, which added $8.3 million and $0.8 million of revenue respectively. Property dispositions reduce revenue by $8.9 million compared to Q2 2020. To clarify, non-stabilized refers to properties that were undergoing lease up or renovation during at least part of the comparative period. And it was the same community properties was $7.4 million and increase of $5.2 million from $7 million in Q2 last year. This increase was attributable to higher things community revenue, reflecting the strong rental market dynamics that John referenced, and a decline in real estate taxes partially offset by increased utility costs, higher costs associated with preparing apartment units for new residents and higher property insurance costs. And otherwise the total portfolio increased 1.1% to $14.1 million from $14.2 million in Q2 2020. AFFO for Q2 2021 was $7 million or $0.13 per unit compared to $6.6 million or $0.15 per unit last year. Increase in AFFO reflect higher NOI plus reduction in finance costs excluding the loss on extinguishment of debt. The decline in AFFO per unit reflects the temporary dilutive impact of the $69 million bolt deals offering completed in February of this year. AFFO increase to $7.9 million in Q2 2021 or $0.15 per unit from $6.2 million or $0.14 per unit last year. The increase reflects the higher AFFO, as well as the $1.5 million escrowed rent guarantee that was realized in the quarter, disproportionately offset by additional severance and retention costs related to the capital recycling program that were added back to AFFO in Q2 2020 and less straight bond rent. As John noted we expect that AFFO will significantly benefit in the second half of 2021 and throughout 2022 from property acquisition keeping our acquisition capacity. Net asset value increased 42.1% year-over-year to $769 million from $541 million in Q2 last year on a per unit basis, NAV rose 21.9% to 14.77% in Q2 2021 compared to $12.12 last year. The repay quarterly cash distributions of $0.12 per unit in Q2 both years representing an AFFO payout ratio of 79.2% in Q2 2021, compared with 90% last year. All distributions were classified as a return of capital. We expect the AFFO payout ratio to continue to decline as we deploy our acquisition capacity. Turning to our balance sheet. Net spread book value ratios at June 30 2021, was 41.5% and we had total liquidity of $96.9 million including cash and cash equivalents of $8.2 million, $53.4 million available on our credit facility, and $35 million available on the line of credit following the Hangar 19 acquisition, which was completed subsequent to quarter end, our debt to TBD is 44.9%. Acquisition capacity is approximately $200 million without the need for additional equity. As of June 30, we had total mortgage notes payable of $403 million excluding the credit facility and a line of credit, with a weighted average contractual interest rate of 3.3% and a weighted average term to maturity of 6.1 years. Total loans and borrowings were $524 million excluding the debentures and 78% of the REIT debt split or economically hedged fixed rates. In July 2021, through the refinancing of debt 84% of the REIT debt was fixed or economically hedged to fix rate. In addition, as of June 30, we had $42.5 million of convertible debentures outstanding at a contractual interest rate of 5%. The debentures, which were on September 30, 2025, with a conversion price of $14.40 per unit. I will now turn it back over to John for some closing comments.

Alright. Thank you, Susie. The upcoming weeks and months are going to be very busy period for BSR team. We have set an ambitious goal of completing about $167 million further accretive acquisitions by year end, we are extremely confident in our ability to achieve this outcome. The multifamily real estate markets in Austin, Texas in Houston are highly liquid and quite robust. Our corporate investment team is always busy reviewing opportunities, but we will also be disciplined and are committed to maintaining our strong liquid position. It has served us very well throughout this pandemic. We also expect to continue achieving solid organic growth. The economic recoveries in our primary markets have been impressive, since the start of the pandemic that has supported strong growth in rental rates at our properties and continuing high levels of occupancy. We fully expect these trends to continue. The second quarter of 2021 was an important period for us. And it demonstrates how the reorientation of our portfolio to high growth primary markets generates stronger financial performance and expansion of our NAV. This is what we have been talking about since we initiated the capital recycling program in 2019. We expect our financial results to continue strengthening in the months ahead as we deploy our acquisition capacity in our target markets that continue benefiting from our exposure to these high growth regions. Obviously the COVID-19 remains an issue while the pandemic could create additional challenges for us in the months ahead, we have proven over the last year and a half that we can operate successfully through even the most difficult conditions. We have learned a great deal about how to how to operate during a pandemic. And we will apply those lessons learned as needed going forward. Please allow me to take this opportunity to thank all of our BSR team members for their commitment and hard work. Also announced yesterday, effective December 31 this year, I will assume the role of Executive Vice Chairman of the Board of Trustees, and then overstate will transition to the role of Chief Executive Officer. In this new role I will assist the team as the need arises. Dan's leadership qualities are a perfect fit for taking BSR to the next level. And I am blessed aboard for such a fine and professional team. That concludes our remarks this morning. Susie, Dan, Blake and I would now be pleased to answer any questions you may have. So operator, please open the lines for questions.

The first question comes from Kyle Stanley with Desjardins. Please go ahead.

Thanks. Morning, everyone.

Good morning.

Just wonder quickly say congratulations to both John and Dan on the upcoming changes. You know, I think things are looking fantastic.

Thank you. We are excited.

So just taking a look at the healthy leasing velocity and spreads achieved in June and July. I'm just looking for general market commentary. Is this activity being experienced portfolio wide or maybe more specific to certain sub markets? And you know, in your opinion, what is the primary driver of this market rent growth?

Kyle its Blake, hello to everybody out there. I want to start out by saying that as many of you know, I'm a Texan probably you can tell by listening to me. And I've grown up in the Dallas area. I was a banker for 20 years, I'm going to rehash this because I think it's really important. And I've been on this side of desk for another 20 years. And I've seen different dynamics and different cycles in the real estate market in Dallas, Houston and Austin through my years. And although this is not an unprecedented, this is one of the best stretches. And when it comes to occupancy growth and rental growth that I've seen in my time, and I expect this to continue. And the question that you brought up, I'm going to answer it in a couple different ways. You asked what's causing it? Well, we've been talking over the last two quarters. And I think the numbers now are bearing this out about the migration into Texas. And you can look it up. There's articles everywhere. It's probably not as well known, or the gravity of it in Canada, as it is in the United States. But people are moving into these markets at unprecedented rates. Also, I think it would be interesting for everybody to look at the companies that have moved into Texas over the last two to three years. Why are they doing that and continue to do that? Well, as I stated before, Dan stated before, it's a business friendly state, there's no personal income taxes, it has tremendous public schools, and all that up. And it's a pretty good place to move to when you look at some of the bigger cities on the coast and what they've gone through during this pandemic. Well, that has all helped us with the strategy that we laid out to you three years ago. And our strategy really has three main components to it. It's the product that we buy the quality of it, it's the location, location, location in this particular instance, and it's our people. And we talk about our people all the time. But it's really important to go over again, the fact that our turnover rate with our people is half the national average, and continues to be that way. And that is driving all of these things that have contributed to the numbers that you're looking at. So I think it's really important to put that in perspective and for everybody to realize what is happening in these locations and continues to happen. And I see it happening well into 2022, if not, for. Now, to answer your question Kyle, as far as is there, a region or something is carrying this note, all of our main MSA are in double digit in new leases. And just to give you an idea, Oklahoma City, which is our smaller MSA, it had a 12.3% increase, and new leases for July. And for the quarter year-over-year, it's in a lag growth to 7.4%. I know we've had some of our competitors sharpening their OKC growth, and I think you can check and look at our growth in all over MSI, but and we've done better than they have. One thing that I do think is very interesting in looking at this, is that how do I think? Or what am I facing some of this that is going to continue out? Well, when I look at our leads, which I bring with you guys every quarter, but it's important, our lease sequentially, first quarter, second quarter were up 21%, that's really important to look at that's that people that that are on the internet, or they're coming in and coming into our properties. I mean, where are they coming from? Well, it ties back in the migration comments that we discussed, that I discussed earlier. And always bring it to you guys. The virtual tours are self-guided tours and the in person tours, this is really important, because this is another stand that is showing that there's no lead up inside. Those are up 25% sequentially. And our closing rate on those went from 40% from 31% in the first quarter. So, I can go over a lot of the things I'm sure we'll have later on, lease up something's. But to answer your question, I hope I see it because there is a lot going into this. And the numbers are starting to reflect that. I hope that answered everything, Kyle.

Yes, very helpful. Maybe just one last one for me. OpEx inflation looks to be a bit of an issue across your US sunbelt peer group. Can you just talk about a bit of the fact that a few of the factors that are contributing to that and maybe thoughts on how that trends in the second half of the year?

Yes, we had to, when you look at our buffers, I think it's really important to as most of you know, the age of our portfolio has decreased dramatically over the last year, year and a half, which you look at the last six, seven purchases, which Dan might cover and look at the age of the property; this has been attributed to the fact that we're not as susceptible the cost and the cost inflation. Is there some call to inflation? Yes. But when you look at our numbers, year-to-date, we're sitting at federal expenses about 2.8% year-over-year, and our reading expenses and turnover expenses are very minimal compared to the uptick in rents that we're receiving. Another thing that I think is important that goes into that figure that's not discussed a lot is the employee wages. And that's something that I had concerns about going in. Because Texas is such a dynamic state. It's very competitive. And there's a lot of construction going competitive for employees. But year-to-date, if you look at our employee cost, we're down 1.55% . So we've done a really good job of controlling that. I would say that a lot of that has to do with the fact of our scalability and the ability to move people from locations where we have the best in ourselves. And that has helped us not have to go out and hire in some bigger cost, sour categories, new people. So we've kept that in control. And to answer the question for the end of the year, I do not think that's going to affect our numbers on a scale that would be anywhere near the rent increases that we're seeing.

Okay, great. That's it for me. I'll turn it back. Thanks.

Your next question comes from Brad Sturges with Raymond James, please go ahead.

Good morning. Maybe just a follow up on Karl's question there on cost inflation, but maybe zero in on property taxes. Can you just walk through, you know, the accounting treatments so far in terms of the accruals? And then, what would be I think the final bills come in near the end of the year. So what would be your expectation for property taxes, given you know, the recent changes in valuation that's happening in markets like Texas?

Yes. For property accounting, it is a little bit confusing. If you look at the base of our income statement, you're going to see a credit sitting in real estate taxes. And that's because we recognize tax expense under IFRS, when the tax is actually assessed. The credit relates to refunds we received during the year and then threw up based on assessment as well, you have to combine that with '21 adjustment that's also on the income statement. To get a true accrual basis accounting look at what our real estate tax liability would be as of June 30. Right now, we're on track with our real estate taxes as we budgeted maybe even a little bit better based on some of the refunds that we've received. And at this point, we underwrite value properties for increases in real estate taxes. So we don't expect these frauds.

What are you underwriting in terms of increase in taxes for this year? The average increase, I guess?

Hey, this is Dan. I think on average, we see our taxes increase about 4% year-over-year, when remind the group that believe Texas passed a statute, capping property tax increases in any commercial asset, I think a 3.5% couple of years ago that created some tailwinds for those of us that that underwrite taxes, and the NOI cash flow helped us become a little bit more aggressive in our in our future tax expectations and took some beta out of ownership in the state of Texas.

In terms of Hangar 19, the guidance on accretion of $0.04 a unit, what type of rent growth would you be baking into that assumption?

Brad, that's a great question. At some market in South at the airport and DFW is looking at about an 8% to 8.5% organic rent growth from the date of acquisition. Now, you know, I wish to be a landlord was as easy as is charge an 8% rent to 10% rent growth and collected 100% of that revenue over a 12 month period. But it's not so we'll probably blend that year one number, we will probably offset that 8.5% rent growth by about 5% lost lease, as we say, otherwise stabilize the year one pro forma.

Okay, that's quite helpful. I'll turn it back. Thank you.

Thank you. Your next question comes from Matt Logan with RBC Capital Markets. Please go ahead.

Thank you. And good morning. Susie in terms of the fair value gains this quarter, can you tell us how much was driven by higher NOI versus cap rate compression?

Yes, hey, Matt, sure. And also, you want to take out the dispositions we've had as well, because that can skew it. And the answer it half 50% of the price comes from increases in NOI and the other half is compression in cap rates.

So we've got 15 and 15 basis points, we kind of split it evenly.

17.

Perfect. And in terms of what you're seeing for the real time transaction market, you know things that perhaps aren't factored into the appraisal that rolls. Would that indicate to you that there could be further cap rate compression in the back half the year?

Hey Matt its Dan. We're seeing July bids. I want to remind everybody, this is Q2 and reporting. And I know everybody knows the day today. So just the evidence, the velocity that we're seeing in trade outs in this market, we're seeing July bids for properties at 10% to 20% outside of the money, relative to evaluations we're seeing trade at today. A lot of that cap rate compression is built into what Susie just talked about, which is NOI increases. Anytime an acquirer can underwrite to 10% to 20%, organic rent growth, going in pro forma, it's going to increase that purchase price and lower that go in and cap just a little bit. But that's a healthy cap rate reduction. You know, you're going to collect that revenue, you're going to collect the NOI that drives the cap rate reduction. I would contrast that with a market where you're seeing pancake growth opportunities and low interest rates. You know, that's just a straight line going in cap with not a lot of hope of expansion, the market that we're looking at, looks to produce some tailwinds through the end of the end of '22 and perhaps ongoing. That helps us I'll say, underwrite to a lower day one cap rate, and NOI expansion over a period of two to three years in horizon. Now, unfortunately, it helps our competitors underwrite to those low cap rates as well and kind of use leverage to push property prices up a little bit further. And that's a little bit of what we've seen go on in the months of June and July and August is probably some higher leveraged offers, taking advantage of more debt on the trade and driving cap rates down. But all that to be said, anytime you can underwrite the higher rent growth, it's a healthy cap rate compression environment.

And in terms of your acquisition cap rate for Hangar-19, can you give us a sense for where that would be just the general ballpark?

Sure. 50 basis points spread, we could say between 375 and 400 in a quarter somewhere around there and a cap rate. I mean cap rate July, you know everybody on the phone, think about a dog and we're all thinking about different dogs cap rates are no different. Economic nominal before CapEx, these are all things that that all of us use to establish a cap rate. I think 50 basis points spread between 375 and 400 a quarters a good evidence of where the market sits for a property like Hangar 19 right now.

And last one for me in terms of the NOI margin for 2022. Susie, how should we be thinking about that on a stabilized basis after the repositioning program is complete?

Yes, obviously, it's going to increase. Everybody knows that right now. We have a property in lease up. And we're not included in the rent guarantees and NOI so that's producing some lower overall margin. Going forward, we're looking at 54% to 56%.

Excellent. Appreciate the commentary, everyone, I will turn the call back. Thank you.

Thank you. Your next question comes from Frank Lee with BMO. Please go ahead.

Good morning, everyone. So my first question coming, you know, we witness that people moving back to your core market, and you also mentioned that earlier, and we continue to see the home ownership costs to rise. I wonder, do you think that's going to further drive people back to the rental markets. And is that part of the driver of the demand year in Europe core markets?

This is Dan absolutely we do you know, we live in a time of uncertainty and uncertainty calls for flexibility to maintain balance. I think that in this environment multifamily product with the markets that we have in the right markets, they allow our residents to better adapt to the rising home prices and to your point. You take Dallas, for example, its growing market, average home price, there's $341,000. So you take your mortgage, and you take your payment, your mortgage interest in principles is about $1350 bucks a month on a 30 year note, that's before having to pay real estate tax and insurance. So that value for the medium home price in Dallas has gone up 26% from May of 20 to May of 21. That as a result has driven home, closing down by about 7% in the month of June, month over month sequentially. It's I mean, whether you can do the simple math with a 10% rent increase or 15%, or an increase in a market where your competitors are charging a 26% cost increase. I'd say apartments are more affordable in the month of July in Dallas, and they were relative to home purchasing than they were in the month of July of 2020. That's great tailwinds for our sector. Blake hit on another issue that we can elaborate on. We've got a great supply problem in our markets, Austin, Dallas and to a certain extent Houston are unable to keep up with the net migration trends and the movements that are coming in from other states. So you got a supply and demand issue, the natural result of the last year has been about a 25% to 30% increase in median home values. Rents haven't picked up 25 to 30, they're going to healthy 10 to 20. The developers for COVID and other reasons, call it inflationary pressures for construction costs or call it COVID related lack of employee retention in order to build out the house, they simply can't deliver the single family or multifamily product to absorb the number of individual residents and households that are moving into our markets. So you're seeing it look back, you're seeing some of the highest net absorption numbers coming in our markets and United States but more importantly, in our markets that you've seen since the mid-90s. It's resulting in vacancy reduction, to about a US average of about 4%, which is where our markets kind of sit right now. And we don't see any reason that that trend is going to not are going to turn around. And one of the reasons for that is resell starts dropping our markets by 20% to 50% on a year-over-year basis. So there's simply just not the product to deliver from a single family home size, or a multi-family size that will support the number of housing moving into those three markets.

Okay. Thanks, Dan and great quarter. And I just want to follow up on that. So, you know, I've seen like, you know, strong demand for units and also like total supply. We've seen last time a great, like final rental growth. And I just want to like ask like what from your perspective, you know, how stabilized this rental goals moving forward? Let's see like in 2022 and 2023 because we're leaving - we're currently leaving in an unprecedented situation like you said, it never happened in the history, never seen in the history. So how stabilize this rental growth moving forward like net 2022 or 2023?

Yes, sure. I mean, moving on. I mean, if we knew what rental prices were going to be in 2023, we'd be sitting under a shade tree right now. So the future is uncertain. But as far as I don't want to rely on our data providers and what they're projecting the CBREs, and the co-stars, and the RCAs are long witnesses of the world; these individuals are talking about a continued sustained tailwind of rent and occupancy growth right now through the end of the fourth quarter of 2022. Those are positive tailwinds. those are numbers that we look at, call it the next 18 months sale look positive to us.

Okay, all right. That's great color. Thank you very much. That's all my questions. I'll turn it back.

Thank you. Your next question comes from Matt Kornack with National Bank. Please go ahead.

Hey, guys, just a few quick technical ones on my side. With regards to the rental guarantee, would that be the equivalent to the rent that you would have received that stabilization for the assets? And just if I take that and add that to revenue, would that be an appropriate approach on that front?

Yes, correct.

Okay. And, and then second to that maybe you could speak to the - you spoke to the Op-costs impact as a result of the newer asset age, but also with regards to your CapEx reserve and just ongoing maintenance CapEx. Can you speak to how that will trend or it's already incorporated in your view on maintenance CapEx at this point? Thanks.

Not sure, can you clarify that question? Just real quick. What are you asking for ongoing or where it is right now?

Well, I just, I guess I didn't look at the figure in a lot of detail that was used for the maintenance CapEx this quarter, but maybe if you could give a sense as to the trajectory of maintenance CapEx because I'd assume given the new rage of the assets that you're buying and the selling of some of the older ones that the maintenance CapEx profile for this portfolio would have come down?

Yes, I mean, that's absolutely right. I mean, I think that goes without saying due to the fact of what the age and you've pretty much answered the question. I mean, we're looking at anywhere from 250 to 300 per unit. That is what we're anticipating going forward.

Okay, perfect. Now, that's helpful. That's great, that that's exactly what I needed and I appreciate it. I congrats on a very strong quarter and I've got to deal with a toddler that's home with me right now; so I'll talk to you guys later.

Thank you. Your next question comes from David Crystal with Michelin . Please go ahead.

Hey, good morning, guys. I just want to build on Kyle's question from earlier and I apologize, I got disconnected. So I you may have already given an answer to this. If you leasing lifts accelerated throughout Q2 and into July, do you have a sense of how lifts on you leases have branded so far in August?

Yes, I do. Obviously, I'm limited. Susie looks at me every time question logs are asked and I learned over three years to be careful because it isn't in our MD&A. I do have a sense of that. And it looks very good compared to the July numbers. And I'll leave it at that. Very good. The trends are just positive across the board in all three categories.

Okay. And if I looked at the renewal spreads, obviously, they're much lower. Could you push harder on the renewals? Or is there a strategic reason that you're holding off a little?

Well, obviously, we could always push more, and we will. And I'll answer this in a couple of ways. As everyone knows, we use LRO and it got us rental rates. Now, in most cases, in my career through the years, rental rates follow the new rates. And in our case, I think in most people's cases of our competitors, if you look, there is a pretty big at this point GAAP in new to renewal that will continue to shrink as we are able to push rates on renewals. That is something that we're going to do. We've discussed it internally. But I'm going to say this. The answer, probably a question come in lighter is there is a balance on renewals; pushing renewals and pushing new rates and you're balancing that against occupancy. So that's something that I probably spend and our group spends as much time on discussing as anything because as I addressed earlier in my conversation these are pretty lofty new rates that we're seeing compared to history. So we're wanting to make real sure that we balance our occupancy with our pushing the renewable awesome. And you know, so our blended rate is 8.4%; so that's pretty good thing to look at right now. So, I think going forward, to answer the question, we will be saying a shrinkage. But there's a lot that goes into that.

Okay, fair. And I think Matt asked this question. If I look at rent guarantee, how should we look at that burning off in Q3 and Q4?

Yes, so right, we still have plenty of rent guarantee left, but we also have with the properties are leasing up way faster than we anticipated at a higher rate. So we expect to have stabilized NOI for those properties, whether it comes through the rent guarantee, or through just actual results throughout through the end of the year.

Okay. And given the mid-quarter acquisition of the layout with the guaranteed contribution from not us only for the period it was owned.

Yes.

Okay, perfect. And on the acquisition front you still very confident on executing another $170 million at the year-end. How has the economics evolved? Are you still confident in the kind of unblocking economics as in any cap rate compression is going to be all by NOI growth expectations?

Yes, David, this is Dan. I'd say we're very confident but we're careful not to become overly confident in this market. And what I mean by that is, we want to know for sure that any particular investment or acquisition will do more good than harm. That keeps us discipline. Now, let me give you a perfect example. I mean, these cap rate, compress markets have not just shown up, they've been around for a while. And in the second quarter, we've assessed call it 41 potential acquisitions, that's about 17,000 suites. Value on that's about $3.85 billion, that's an average purchase price of about $93.75 million. Now out of those 41, we looked at we offered on four we bought one in Hangar 19. Those sound like they're pretty astounding numbers, you know, 10% of your underwritten properties, you are brought in and out of those 25% you close, that's about our average closing ratio for reviewed properties over the course of the last five to 10 years. We continue to see depth in these markets. But with that said on the $167 million on a look forward, you know, we're looking at the playing field and not the scoreboard. And what I mean by that is, we're going to score ourselves on how well we can acquire, not whether we can hit acquisition volume or timing benchmarks. There's going to be another $8 million of apartments to trade in our markets between now and Thanksgiving. And we'll look at about half of those. And if those any one of those properties hit our benchmarks and hit our underwriting criteria and our disciplines and we think it's a good fit for this portfolio, then we will acquire that property, we feel very confident in that. Market is not for lack of depth. The market is not for lack of good fundamentals. And so long as we can continue to see, call it a 200 to 250 basis points spread above our cost of capital we're going to continue to acquire and all green lights are in those. We see green lights and every discipline that I just referenced right now. So yes, we're pretty confident we can drop another $160 million to $200 million in the market on acquisition between now and year end. But we're not going to spy for buying sake, we're going to buy good properties in the right side of the road at good values.

Okay, perfect. That's it for me. I'll turn it back in queue.

Thank you. They're in there for the questions at this time you may proceed.

That concludes our remarks for today. And we will be speaking with you again at the end of Q3 and thank you everyone. God bless.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and ask that you please disconnect your lines.