Good afternoon, ladies and gentlemen, and welcome to the AvalonBay Communities' Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the remarks by the company, we will conduct a question-and-answer session. Your host for today's conference call is Mr. Jason Reilley, Senior Director of Investor Relations. Mr. Reilley, you may begin your conference.

Thank you, Robbie, and welcome to AvalonBay Communities' third quarter 2015 earnings conference call. Before we begin, please note that forward-looking statements may be made during this discussion. There are a variety of risks and uncertainties associated with forward-looking statements, and actual results may differ materially. There is a discussion of these risks and uncertainties in yesterday afternoon's press release as well as in the company's Form 10-K and Form 10-Q filed with the SEC. As usual, this press release does include an attachment with definitions and reconciliations of non-GAAP financial measures and other terms, which may be used in today's discussion. The attachment is also available on our website at www.avalonbay.com/earnings, and we encourage you to refer to this information during the review of our operating results and financial performance. And with that, I'll turn the call over to Tim Naughton, Chairman and CEO, for his remarks. Timothy J. Naughton - Chairman, President & Chief Executive Officer: Thanks, Jason, and welcome to our Q3 call. Joining me today are Kevin O'Shea, Sean Breslin, and Matt Birenbaum. Kevin and I have a few comments on the slides that we posted this morning, and then all of us will be available for Q&A afterwards. Starting on slide four, overall, results in Q3 were very strong driven by favorable operating fundamentals and healthy absorption of our lease up portfolio. Some highlights for the quarter include Core FFO growth of more than 11.5% with year-over-year same-store revenue growth of 5.4% for Q3, which accelerated 70 basis points from Q2 and 110 basis points from Q1 and is the strongest rate of growth since 2012 that we've seen in our same-store portfolio. Including redevelopment, same-store revenue growth was 5.7% for the quarter. Sequentially, same-store revenue growth came in at 2.6% or 2.7%, when you…

Sure. Thanks, Tim. Turning to slide 10, we highlight the current performance of the nine communities in lease-up under construction during the third quarter that was more than 20% leased, as of mid October. As you can see in the slide, the performance of communities undergoing initial lease up is strong and exceeds our original underwriting expectations. Specifically, for these nine communities, which represent $780 million in total capital costs, the current weighted average monthly rent per home is $100 above initial expectations. In terms of yield performance, the weighted average initial projected stabilized yield for these communities is currently 6.7%, or 30 basis points higher than our original projection of 6.4% for these communities. Turning to slide 11, with U.S. multifamily transaction volume exceeding $130 billion over the past year, the transaction market continues to benefit from strong buyer demands and remains a compelling capital source for funding development, for harvesting value from our Fund platform and from improving the asset quality of our portfolio. As you can see at the bottom left of the slide, we sold an asset in suburban Northern New Jersey last quarter and have sourced a total of $215 million year-to-date to be a wholly-owned dispositions with those assets being located in the Northeast and averaging 10 years of age and a 5.1% cap rate. To further take advantage of current favorable transaction market conditions, we also opportunistically increased sales out of our limited life Fund platform, adding three additional Fund II sales in Q3, all of which sold at a compelling pricing of mid-4% cap rate. On the bottom right, you can see that in our cost of capital heat map our three principal sources of capital range from being reasonably priced to very attractively priced today at least relative to their historical…

Yes. Sorry. And we'll go first to Nick Joseph with Citigroup.

Thanks. In your investor presentation last quarter you had a handful of slides indicating that we were in the middle of the cycle both in terms of U.S. economic conditions, as well as apartment fundamentals. Has the economic volatility and performance of the credit markets in the last three months changed your view on either of these? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Nick, Tim here. Obviously just looking at the slowdown in job growth and some of the volatility we've seen in the credit markets it makes you – you keep an eye on it. But no, I mean, fundamentally it hasn't changed our view in terms of where we are in the economic cycle and how long the apartment cycle is likely to play out.

Thanks. And then can you talk more about what you're seeing in D.C. and if you expect the modest recovery that you've seen this year to continue into 2016?

Yeah, Nick, it's Sean. Based on what we've experienced this year and the outlook for job growth, as you look forward into 2016, the expectation is there will be a continued but modest recovery across the market. Obviously, it depends on where you are within each market in terms of the supply considerations as to whether that recovery is moving on along a little faster, a little slower. So, for us, what we've seen most recently is that D.C. has been performing relatively well, given the positioning of our assets that we have, with very little exposure to some of the heavier supply sub-markets within the district followed by suburban Virginia and then suburban Maryland. But as you move into 2016, the supply characteristics sub-market by sub-market starts to shift. So it really depends on the competition of your portfolio and what your exposure is to new supply. In general, though, we expect the entire market to get modestly better as you move into 2016.

Thanks. And then just last question on the cost of capital heat map, I'm a little surprised that the equity doesn't screen a little better given that's based on a stock price of $185, which is 5% premium to consensus NAV and pretty close to an all-time high price. So I'm wondering what goes into that equity component of the map?

Sure. Nick, this is Kevin. In terms of the equity temperature, as we've talked about it in the past, there are four components that load into that with different weightings. About half the weighting relates to how our stock price looks compared to other investor choices, that is, the S&P 500 yield and the BAA bond yield. And against those two items we're in the kind of the mid-60% range. If you look at the other half, which is really more of a corporate finance perspective or an issuer perspective, we prescribe about 40% weighting to how we compare to consensus NAV. And on that basis we're about 55% in terms of a percentile ranking. But to your point, in terms of the attractiveness of the absolute pricing, that's reflected in our AFFO yields, which is about 10% of the weighting. And on that dimension, we're about an 80-percentile ranking.

Thanks. Appreciate the breakdown.

Thank you. We'll take our next question from Nick Yulico with UBS.

Thanks. I was hoping, first off, you could talk a little bit more about the expense pressures you faced in the quarter. And looking at your guidance it looks like it's going to – expense pressures get easier in the fourth quarter. Maybe you could talk about what's driving expense pressures easing and how we should think about some of that heading into next year?

Sure, Nick. This is Sean. I mean, if you look at the quarter, there's a fair amount of noise in there. So just kind of walking through it, 60% of the year-over-year increase in the quarter really related to two items, insurance and taxes. Taxes were up about 8.5% or $2.9 million. About $1 million of that relates to supplemental assessments that were accruals reversed in a prior period in last year which created obviously a headwind in terms of the year-over-year comp. And then the balance is rate and assessment in different markets across the country, particularly the East Coast markets and a little bit of a pilot burn off in New York as well. And then on the insurance side, we had the property renewal and then you have the timing of claims and recoveries in insurance, which is extremely volatile, that was up 20%, 21% if you look at the third quarter. But our expectation for the full calendar year is that's going to thin out and be closer to probably 10%, 11%, as an example. So we're going to see that trim out. And then on some of the other topics in the quarter, repairs and maintenance being up is a couple of things. One is the timing of maintenance projects during that particular season when you're doing a lot of roof work and other things, as well as turnover costs during the quarter, which is sort of by design. We talked about last quarter shifting our lease expirations around to take advantage of the rental rates we thought we could achieve during particularly June, July, August but even heading into September, which we did realize in the form of our sequential results which were quite strong. But obviously we incurred more turnover costs during that…

All right. That's very helpful. Just one other question on your development rights page. Can you break out for the Metro New York-New Jersey region how many of those projects are actually in New York City proper? And then whether you would at all think about perhaps selling some of those projects since there is such a strong demand to build or to find land in New York City and yet it's hard for people to do so, meaning that those projects would have some pretty good land value today.

Sure. This is Matt. I can speak to that. I believe we only have one development right in New York City itself right now, which is the big Columbus Circle site. So that's a big deal but most of those 14 development rights, obviously everything else is not in the City itself. And that deal, as we've talked about, we may sell a piece of it, either the retail component and/or we're exploring different options including for sale condominiums there either directly or through others. So one of the great things about that site is it's incredibly flexible, the zoning is very flexible, we're not planning on pursuing a 421-a there, so it'd be 100% market rate. So we have a lot of options there. But generally speaking, we generally aren't in the market to kind of buy and flip land as a general rule and really not equipped (19:56) to do that as a REIT frankly.

All right. Thanks.

Thank you. We'll go next to Austin Wurschmidt with KeyBanc Capital Markets.

Great. Thanks, guys. I was just curious how you guys are thinking about your development funding plans today given that leverage has come down half a turn. So it seems like you have some debt capacity but you did mention that asset sales are a more attractive source of funds. So how should we think about the balance of those two going forward?

Sure, Austin, this is Kevin. A couple comments here. First, in terms of the timing of our – describing our capital plan, we're still in the budget process and we won't really have a precise guidance in terms of net external capital needs for 2016 until we get to the fourth quarter call in January. But that said, in terms of how we look at pricing today, as I indicated, asset sales and unsecured debt screen as most attractive. The common (21:03) equity pricing is attractively priced from an issuer or corporate finance perspective, as reflected in my earlier comment, where on an AFFO yield basis our share price is in the 80th percentile. However, asset sales screen as relatively more attractive today based on sort of the percentile ranking that you see in the heat map, which was the 96th percentile. So that's how we look at our capital choices today. Of course, capital market conditions change continually both in terms of the absolute pricing as well as the relative pricing. And so that's why we don't really comment with precision in terms of our future capital or transaction market activity. But that said, there are sort of two points to think about as you fine tune your models for what our funding might look like over the next year. The first you pointed out, which is at 4.9 times net debt to EBITDA our leverage in the third quarter was tracking a bit below our target leverage, which is 5 times to 6 times net debt to EBITDA. And so we do have capacity for debt issuance at that level, particularly when you consider the de-leveraging impact of continued market rent growth and stabilizing developments, which serve to drive that number down, all else equal. And then the second point to think about when you come up with your assumptions for our funding next year is that next year we have below average level of debt maturities with about $280 million of debt coming due next year compared to about an average level of $500 million to $600 million. So, all-in-all, our net external capital need next year is likely to be a little bit less than it is and has been in recent years and our need for equity, whether it's in the form of asset sales or common equity issuance is likely to be a little bit more modest than it has been in recent years.

Thanks for the detail there. And then just curious what are the metrics or components that make up that 96% today on the heat map?

It's basically a measure of current pricing relative to the trend line, and we have dataset that we use – it goes back to I think about 2001.

Great. Thanks for the detail.

Thank you. We'll take our next questions from Jana Galan with Bank of America Merrill Lynch.

Thank you. I was wondering if you could share a new and renewal rates for October and renewals for November/December?

Sure, Jana. This is Sean. As it relates to October, we're basically running at a blended rent change at 5.6%, which is renewals running at 6.8%, which is slightly higher than we achieved in the third quarter, but new move-in rents starting to trend down as they typically do at this time of year into the low 4% range. And then in terms of renewal offers for November and December, we're basically in the high 7% range, and as we typically indicate, as you move into the fourth quarter, you probably see that the spread between initial offers and where they actually settle somewhere it's between 100 basis points to 150 basis points.

Thank you. And on the supply side you provided on page nine, I would think it looks like a good run rate for you through 2017. But particularly in your markets, the rate to build in these suburban markets are very difficult. Do you see this favorable supply-demand outlook going further than 2017? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Jana, it's Tim. It's obviously a function of the macro environment on the demand side. As we've talked about, we're about 20 quarters, 22 quarters into this particular expansion. The 90s lasted 40 quarters. So we do think the economic cycle, the macro cycle could last into 2019, just looking at historical precedence. But on the supply side, we talked about that last quarter. It bears watching. There are a lot of people, builders, homebuilders, commercial developers, who are doing a little bit more in the multi-family world, the multi-family space. So if you look at it from our perspective, if anything we probably expect it to trend down a little bit, just based upon opportunity and being later in the cycle and some markets just getting a little bit distorted where pricing gets out a little bit ahead of fundamentals and just makes less sense from a capital allocation standpoint to take that kind of risk. So we're geared to do about $1.2 billion to $1.3 billion a year right now for the next two to three years. I think it kind of remains to be seen after that. But if I had to guess, I would suspect it would trend down from there.

Thank you.

Thank you. We'll take our next question from Greg Van Winkle with Morgan Stanley. Gregory A. Van Winkle - Morgan Stanley & Co. LLC: Hi, guys. I just wanted to get your thoughts on your Connecticut portfolio. One of your peers announced they're selling all of their Connecticut portfolio and we've heard some reports that the market is slowing down there a bit. What are your expectations for that market? And would you consider trying to do some opportunistic pruning yourself there? Timothy J. Naughton - Chairman, President & Chief Executive Officer: First part of that question...

Yeah. Greg. This is Sean. Maybe I'll take the first part and then Tim can comment on the second part. In terms of the Connecticut portfolio, for the most part the way we think about it is indirectly it kind of moves as New York moves a bit in terms of job creation. There's certainly – Connecticut has some of its own job centers, of course, if you're in Stanford or depending on where you are. But it tends to run sort of slow and steady for us is the way I'd describe it, typically trailing the New York region. But it's not uncommon to see rent change in that market running – New York is running say in the mid-5%, Connecticut's probably running around 4%, typically lagging 100 basis points to 150 basis points. Now it tends to be slow and steady and adds some diversification benefits to the portfolio in some form in terms of the slow and steady nature of the portfolio in Connecticut for the most part. And as it relates to trading activity there, Tim, do you want to talk about that? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah, sure. To the extent we were to do more asset sales in Connecticut or frankly any part of suburban Northeast, it's really more strategic rather than I would say opportunistic and it's much a function of kind of where we are from a portfolio management standpoint and the opportunity we have to continue to build in those markets and just not getting overweighted in those markets. Having said that, we wouldn't rule out doing something that's opportunistic. Where we think there's a portfolio of premium that might exist just through the transaction structure itself being a large portfolio and you might think…

Yeah. Greg, just to give you some perspective, certainly we're going to see an increase in supply in Bellevue as you move into 2016 but it hasn't been zero. As you look back over the last 12 months to 18 months, instead of running probably in the 4%, 4.5% range, supply is projected to increase up to 7% to 8% of inventory next year across Bellevue. And the one thing you have to keep in mind is Bellevue is a pretty broad market. You have sort of what you might think of as the CBD of Bellevue but then there's a lot of suburban neighborhoods where there's product coming online as well as it bleeds over towards Redmond. But if you think about what the supply is today that's been coming online, we're still doing rent change in that market that is on the renewal side 8% to 9% and if you look across the Bellevue assets, they've been holding in right in line there with the rest of the East side portfolio that we have over in Redmond or anything that we have up in Lynnwood. The laggard has been the downtown sort of Queen Anne market in terms of rent change, which has been in the 4% to 5% range, as compared to 8% to 9%, 10% across the East side and the North end. So, as you look forward, there'd probably be the expectation for some slowing in Seattle overall including what's happening in the Bellevue, Redmond and other East side markets. But if our recent experience is helpful in projecting next year it probably is going to hold up better than people think. Gregory A. Van Winkle - Morgan Stanley & Co. LLC: All right. That's very helpful. Thanks a lot, guys. I'll pass it on.

Thank you. We'll take our next question from Dan Oppenheim with Zelman Associates.

Thanks very much. I was wondering a little bit about the Chino Hills development, where, I guess, the western edge of the Inland Empire, but normally would expect developments for you to be a little bit more coastal. Wondering how you think about that in terms of just reflecting some of the challenges in getting sites in Southern California, and particularly just wondering, given whether it's Chino Hills or a little slightly east in Eastvale, the for sale market is not so expensive there, so there can be some opportunities and issues with turnover.

Hey, Dan, this is Matt. I guess I can take that one and Sean may want to chime in as well being a native of Southern California. But we just saw that as a good development opportunity. We do have an appetite to continue to do more in Southern California. It was a very low risk kind of structure in terms of the deal. It had already been approved. So it was entitled. It's a very simple three-storey block-up product, it's a very low execution risk and assets are trading in that sub-market at cap rates that are still significantly below where we see the yield on that deal. So we think there's reasonable value creation there. It is in a great school district and actually single-family values right around there are in the $500,000 to $800,000 range and even north of there. So it's actually a pretty attractive living environment, good retail. We probably aren't looking to go further east certainly but we think it's a fine deal.

The only thing I'd add is that – I mean, what you've seen from us is certainly a focus on some of the coastal sub-markets and more infield locations, whether it's Huntington Beach or along the coast, just down towards San Diego or up in Hollywood. But we have looked at opportunities in what we think are some supply protected sub-markets that some people may think of as sort of B sub-markets, but there is demand for some of the higher end housing that we can provide in some of these markets. So if you look at our development attachment you'll see sub-markets like Glendora, obviously you referenced Chino Hills. We completed a couple of properties in San Dimas and sub-markets like that where we think we're producing pretty good value creation at a relatively supply protected sub-market that may not be a target for a lot of other competitors.

Great. Thanks very much.

Thank you. We'll take our next question from John Kim with BMO Capital Markets.

Thank you. I had a question on the change in your lease expiration strategy resulting in the occupancy decline this quarter. It sounds like that you believe the occupancy dip is just a one-off, and I just wanted to clarify that was the case. And also if you could just update us on the percentage of your portfolio that you expect to expire each quarter?

Sure, John. This is Sean. A couple comments. One, in terms of occupancy, occupancy has rebounded and we're back up in the call it 95.6% or 95.7% range in terms of physical occupancy. And we would expect it to hold probably in that range for the quarter, maybe slightly higher, slightly lower depending on how things evolve here. One of the things you have to watch for is lease breaks which typically represent somewhere around 30% of all move outs that we tried to adjust our lease expirations to make sure that when you include lease breaks, the volume of inventory that we're supplying to the market is appropriate, given what the demand patterns are in each market, and each one a little bit different from a seasonal perspective. When you move into the fourth quarter, as I referenced earlier, we expect expirations to be down about 12% year over year. And one thing to keep in mind is managing lease expirations is sort of a continuous process because you have lease breaks and other things that occur, as I referenced. So you're always trying to figure out what are the offers that you need to make to people versus not make to people so that things stay where you sort of need them to stay. If you think about it, generally speaking, what I'd say is across the quarter it is typically about 20% in Q1 and then up to 28%, 32% and then back down to about 20%. That's been the historical average. To give you some perspective, the activity in the third quarter was closer to about 36% of inventory, and the fourth quarter we're expecting, depending on lease breaks again, which we'll know at the end of the year what exactly it was, probably closer to 17% or 18% of transactions in the portfolio.

Okay. Great. And then on the stabilized development yields on slide 10 of your presentation, it dropped a little bit this quarter to 6.7% versus that same number in the second quarter presentation. I know some of this is due to mix, but I was wondering if there was anything else driving this number?

This is Matt. No. It really is – the basket changes every quarter, and I can't remember what rolled off last quarter, but we had – we're always adding new deals and old deals rolling off, so as the geographic mix changes, that's going to move around a little bit.

Okay. So nothing on the cost side?

No.

Okay. And then finally for me is can you provide some more color on the sales on Value Added Fund II this quarter, either IRR or economic gains? It seems like it's lower than what you achieve in your wholly owned portfolio and if there's anything we should read into that?

John, this is Kevin. It's a private vehicle, so we don't disclose unlevered IRRs for that vehicle. The gains and the performance of that second fund has been robust, nothing short of robust and a lot of that is driven based on the timing. We had our final closing on that fund in April of 2009. So those assets were bought in 2009, 2010 and 2011, so they all enjoy and have enjoyed to the extent we've harvested those assets, significant gains.

So given that success, are there any plans to raise additional funds?

That's a topic we've discussed before in the past. We certainly have liked the fund business, but from a strategic perspective it does raise some complications. In particular when we have a fund actively investing in new product, it does tend to represent our exclusive acquisition vehicle which prevents the wholly-owned company, the parent company from buying on our own account. So it does create a little bit of a conflict there that is something that is a bit of a challenge. And from a relative size point of view it's a smaller business relative to where we are now and tends to not to move the value creation needle quite as much. So while we've liked the business and certainly have benefited from it, we're not actively involved in trying to raise another fund right now.

Okay. Great. Thank you.

Thank you. We'll go next to Alexander Goldfarb with Sandler O'Neill. Alexander D. Goldfarb - Sandler O'Neill & Partners LP: Good morning. Tim, just a first question. You were talking to, in response to one of the earlier questions on dispositions, whether large scale or small, that you guys view it more tactically. And I'm just sort of curious, is that because there's sort of asset base that you guys seek to maintain to support the development program vis-à-vis your credit metrics, or is it more fundamental thing that you wouldn't want to sell more and have to – or actually get your thoughts on selling more to pay a special dividend, if within the current Avalon structure and funding the development program, if there is enough room to do something large to return capital to shareholders, and clearly you guys have created, between your development spread and where the assets trade in the private market. Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah. There's quite a bit in there. Let's see where to start. In terms of the volume that we can do just from a tax and sort of capital efficiency standpoint, what we're doing today basically is the level that you can do before you start getting into an issue of potential distribution, so, of gains to – through a special dividend. Now as I mentioned before, I mean, that doesn't mean we wouldn't do one. I'm just not sure that from our standpoint the conditions are such that it makes sense in terms of pricing today. For instance, relative to just NAV, where we think most assets trade relative to intrinsic value. And then we just don't have that much non-core. Again, I think what our peer did made a lot of sense…

Sure, Alex. Yeah. I probably should have explained it a little bit better. We've talked about the heat map in the past and – so maybe a little bit of review is in order. In terms of the equity pricing there are four components that have their individual weights that we use to drive the overall percentile ranking, which in this case is 62% for our equity temperature. Two of the components, as I mentioned are really more from an investor perspective, while the other two relate more to a corporate finance or an issuer perspective, which is I think the point you're making. And this is just simply how we've constructed it. We find it to be relatively informative to look at both sides of the equation, if you will. In terms of the components that relate to how our share price might look from an investment perspective to an investor who can invest across different asset markets, we look at how our share price, the relative earnings or AFFO yield on our share price relative to the earnings yield on the S&P 500 and that's a 25% weighting, and then also against Baa bond yields. We look at that spread between our AFFO yield and Baa bond yields and that's a 25% weighting. And we find that to be pretty informative. And basically what those tell you today is that, that our stock in terms of its current pricing today relative to those two markets is somewhat attractively priced but not terrifically so, and as the temperature screens in kind of the mid-60 percentile ranking for those two items. I think what you're really getting at is trying to understand how we look at things from a corporate finance or issuer perspective. And there the two metrics we…

Thank you. We'll take our next question from William Kuo with Cowen & Company. William Kuo - Cowen & Co. LLC: Hi. Thank you. I wanted to follow up on the urban versus suburban discussion. With your increasing focus developing in suburban albeit infill transit oriented and your comments about favorable supply trends and your prepared remarks about the demographic wave that might move further out into the suburbs. Is it your view that over this next apartment cycle that these suburban markets might outperform urban, especially versus kind of prior cycles? Timothy J. Naughton - Chairman, President & Chief Executive Officer: To be honest we think it ebbs and flows, to be honest over the course of a cycle. And again it's one of the reasons why we say we're agnostic. We do think there are points in cycles where things just get either overpriced or undervalued and we – it's our job to trade on that just like it is the investor's job. They may like a number of different names in the apartment sector, but you allocate capital based upon price, price has to enter into the equation. And if everyone sold stock today, everyone would get the same price but everyone would have a different return and it would depend on when the price and timing of that investment, that investment was made. And just like investors are on this call, we're trying to trade on our business intelligence in our markets, in part that has been developed over 20 years of having a presence in these markets. And while we can like a thesis a lot, we like it at a value and at a price. So, over the next couple of years, would I expect suburban to outperform urban? Yes. I would, largely based…

Hey, Bill. This is Sean. Really few things actually, one maybe as a follow-up to your last question, and then I'll address the Airbnb. Yeah. Tim was talking about the performance of urban versus suburban over the next couple of years. Just as a follow-up to that, we are seeing that difference occur now in the markets. We highlighted that a little bit in the last quarter call, and we continued to see pretty good spread between urban and suburban performance. At this point, just to give you some sense, in our portfolio the suburban assets are running on a year-over-year basis closer to about 6% as compared to the urban assets that are in the low fours. Some of that's a function of geographic mix, but even if you look at the performance of the assets within the respective markets, for the most part we're seeing the suburban assets outperform and in some cases it's a reflection of sort of the lower price point B assets in certain markets, but also just to even some of the newer wood frame deals in some of our suburban submarkets as compared to the urban environment, where you are seeing a fair amount of supply, whether it's the core of Boston, downtown Seattle, downtown LA still a lot of inventory, South of Market in San Francisco, et cetera, et cetera, so just to follow up on that for you. And then as it relates to Airbnb, yeah, there's obviously a lot of chatter out there in the hotel space and it's sort of bleeding into our space, at this point, in terms of the impact of Airbnb on various businesses. There is a number of initiatives out there including what you cited in San Francisco. It's being taken up in some other…

Thank you. We'll take our next question from Tayo Okusanya with Jefferies.

Yes. Good morning. I may have missed this earlier on, but could you talk about the cap rate for the Lyndhurst disposition?

Sure, Tayo. This is Matt. That was the low 5s%. I think we said it was about a 5.1%.

Okay. 5.1%. Okay. That's helpful. And then, in regards to operating expenses, thanks for the outlook on 4Q 2015. (58:45) parts of that that you guys can control, but I'm just curious how, again how confident do you feel like things like the property taxes and the insurance start to come back in the quarter? Or how possible is it to kind of get another negative surprise as it pertains to some of those line items?

Yeah. Tayo, this is Sean. As I mentioned earlier, on the property tax side I mean different things can happen, of course, but the level of an unknowns at this point sitting in October is far less than what it was certainly last quarter. And in terms of the change in taxes as an example I wouldn't say that was unexpected. We had the supplemental assessment reversal on the accrual in Q3 of last year. So we knew that was coming and we expected third quarter to be a bit of a spike in taxes. On the insurance side, we sort of know what the premiums are. Now, at this point, that's big, just the timing of recoveries and claims and things of that sort, so there's a little bit of noise in insurance and taxes potentially, but not nearly as significant as what we experienced in the third quarter. And then the other categories, do reflect sort of our expectations based on lease expirations being down, turn volume likely being down. So unless you had a significant spike in lease breaks, you should see some of the R&M numbers sort of trend down. And then typically you're going into a season where some of the scheduled projects that we have on the maintenance side start to thin out because a lot of that's done in the summer time. So we have reasonable visibility, it's not 100% confidence, that's why we provide a range. But we have reasonable certainty as it relates to the range we have provided.

Okay. That's helpful. Thank you.

Yeah.

Thank you. We'll go next to Wes Golladay with RBC Capital Markets.

Hey. Hello, guys. Can we go back to the Airbnb topic real quick? I know you mentioned you might want to take part in the benefits of having Airbnb in your communities. But what is your view on having a tenant run an operation currently? And is there any incremental liability for Avalon? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Still really too early to tell in terms of kind of all the implications. I mean, when I was talking about on the positive side, there's potential we could share in some of that revenue. And I mean, honestly, when you look at some of the markets we do business in, and particularly in some of the urban markets, they are having sort of a virtual roommate. It allows people to pay more potentially for in terms of rent if they can off load some of those costs. What we do know is generally people aren't taking in somebody that's taken a couch or an extra bedroom. They're usually taking a whole unit. I think more than 85% are taking a whole unit and it tends to be a lot of international travel right now and it does violate a lot of zoning codes in terms of staying. So for the most part we – we've talked with Airbnb and they've been very transparent about it. But for the most part, it's being done under kind of a cloak of secrecy by the resident who's meeting somebody at the coffee shop around the corner. And that will play itself out. It's sort of the regulatory sort of world, sort of starts to sort itself out, and we develop our own strategy in terms of how much we want to embrace it and/or frankly not facilitate it. So like I said in my first remarks, we're not even in the first inning in terms of sort through that.

Okay. That's fair. I think everyone is trying to get a handle on the topic. Looking at rental rate increases, are you seeing any markets where there's price sensitivity or an increase in bad debt expense?

Yeah, Wes. This is Sean. In terms of price sensitivity, I guess, what I would say to that is given where we are on the cycle with above trend rents, there's certainly more price sensitivity than if you look on average over time. Every market is a little bit different in terms of sensitivity. I'd say the markets where it's probably most pronounced are the ones you might expect, which is Northern California and Seattle, where you've had high single-digit, double-digit rent increases now for two to three years in some cases. So there's probably more price sensitivity there. But if you look at it from a global perspective, on a year-over-year basis, average income in our portfolio of our residents is up about 6.5%. And if you look at that as it compares to year-over-year change and sort of affected move-in rents running in the mid 6s is sort of a parity at this point. So if you're seeing that kind of income growth out of our markets, we should be able to realize above trend rental rate growth on a sustainable basis.

Okay. Thanks for taking the question.

Yep.

Thank you. We'll go next to Drew Babin with Robert W. Baird. Drew T. Babin - Robert W. Baird & Co., Inc. (Broker): Good afternoon. Just wanted to dig in more on the 35 to 44 demographic. It's obviously a demographic that tends to prefer the suburbs because school districts become relevant. But in this cycle, given kind of the Millennials' desire to be in the city and the amenities that come in the city, the move to the suburbs, do you think that just given that there aren't as many amenities in the suburbs, do you think that that demographic is more inclined to just buy a home at that point than rent in the suburbs? Timothy J. Naughton - Chairman, President & Chief Executive Officer: They might. It's interesting. If you actually look at behavior of the 25 to 34 segment, which most people would consider kind of the heart of the Millennials, they've actually changed their behavior less than the 35 to 44 segment in terms of urban living. In fact, their – I mean, a lot of it just comes back to affordability. In fact, their behavior, it hasn't changed hardly at all in the last five years in terms of the propensity to live in – it's like 30 basis points. Conversely, the 35 to 44 segment, that's where – and I think it's really in the 35 to 40 segment if I had to guess, they've changed their behavior the most. And I think part of that is they're getting married a lot later, they're having kids a lot later, they're not at the school decision until maybe sometimes into their 40s when their kids are 5 or 6-years-old. And so, I think they're the ones that have probably been – and the data…

Hey, Drew. This is Sean. I'd make a few comments as it relates to the East Coast and I think it ties in really with what Tim referenced earlier in terms of the difference between suburban and urban in that if you think across even the East Coast markets, maybe starting up in New England, and you talk about supply, we're in a lot of very protected suburban submarkets in the Boston region. And if you think about what's happening there, supply is certainly starting to moderate in the urban core, but you're talking north of 5% in 2015, close to 3% in 2016 as compared to the suburban submarkets in Boston, 1.5% sort of this year, next year. Feel pretty good about basically the suburban portfolio in Boston performing well. New York, it probably depends on really where you are. In terms of our portfolio, we don't have a lot of stabilized assets in Manhattan but the supply protected pocket really for us is probably up at Morningside Heights. There's not much going on there. That property that we have there has performed well. Midtown West is getting a fair amount of supply, so some expectation for that to be a little bit soft. And then if you expand outside Manhattan into the Boroughs, we've get two large towers, Long Island City and Queens that pretty much the supply has been delivered there, performing well. Brooklyn is going to have some supplies. We probably need to be a little bit careful there. We have one deal delivering at this point, a little bit early, which is good but there's going to be more supply next year. So in and around New York City, it sort of depends on where you are and as you get into the suburbs there's…

You got it.

Thank you. And our last question will come from Conor Wagner with Green Street Advisors.

Good afternoon. I was hoping if you guys could quantify the impact of property tax abatement burn-offs over the next couple of years? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah. Conor, I'll give it to you right now. It's running about 45 basis points in terms of impact on property tax year-over-year growth. And we haven't run all of our numbers for next year, but I wouldn't be surprised if it's in that relevant range.

Okay. So 45 basis points on total expense growth and – correct? Timothy J. Naughton - Chairman, President & Chief Executive Officer: No, 45 basis points of property tax growth.

Okay. Of property tax growth? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah, yes.

Okay. Great. Thank you. And then where did you guys add development rights this quarter, the three?

Yeah. Hi, Conor, it's Matt.

Hi.

Those were all actually in New England and they were all kind of infill suburban. Two of them were actually kind of in transit locations, all wood frame.

Okay. And then following up on that, Tim, you mentioned earlier that some markets are screening relatively unattractive for development. Could you identify those markets or maybe not sub-markets but more broadly? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah. We're certainly more cautious in Northern California, Conor. Again, just given where a combination of land pricing, construction cost have been and then just aggressive behavior on the part of market participants and willing to take entitlement risk and where our view kind of risk and maybe long-term return have gotten out of sync and just sentiments gotten ahead of longer-term fundamentals. You know it well, Northern California and Seattle, to a lesser extent, are much more volatile markets and you have to take that into account in terms of your investment and your development strategy in those markets. It's been their history since – I don't know maybe since the gold rush in the 1850s and I'm not sure it's going to be a whole lot different when it's serving the part of the economy. It's kind of on the leading edge. It's always just going to be a little bit more volatile in terms of its underlying demand fundamental. So Northern California probably more than any other, I'd say Seattle to a lesser extent but we think it's probably got a little bit more – a few more stabilizers in that market relative to its size. But it's prone to deeper cycles and certainly being very cautious about taking on any kind of new development risk, particularly if we can't get really a pure option on those opportunities. So in Northern California the focus has really been in a couple places, really trying to intensify existing low density wood-frame assets where in some cases you really have jurisdictions that are willing to work with you just given kind of the housing shortage in that market and try to take advantage of that from a public sentiment standpoint to generate some entitlements that you may not be able to generate in other parts of the cycle when they're less friendly to development sponsors. But hopefully that gives you a sense. And I'd say, the New York, Manhattan, I'd say we're pretty – we're actually very cautious on right now just based upon supply and pricing, both land pricing and construction costs.

That's helpful. Thank you. Then last question, as you guys look at the supply picture in your suburban markets, how do you factor in the impact from rehabs and redevelopments closing that spread between B and A? Timothy J. Naughton - Chairman, President & Chief Executive Officer: In terms of...

I mean, would those serve as competition for you if we have rehabbers coming in and bringing things up closer to the rent levels where you guys are? Timothy J. Naughton - Chairman, President & Chief Executive Officer: Yeah. It depends on what you're talking about. I mean, people rehab assets at sort of all different tiers. So, people are making Cs, Bs and Bs, B+s that kind of thing. So we track it at the submarket level in terms of what's happening and the potential impact on our portfolio. We benchmark our performance quarterly compared to our competitors, using ICO (1:14:12) data and others. They'll have to take that into account in terms of what you expect them to produce. So it can create some competitive conversions, if you want to call it that, in certain submarkets, but it's really a sub market by sub market discussion. And Conor, I don't think it's any different, whether it's urban or suburban. There's always going to be some percentage of the assets are going to go through development just like there's some assets that are really atrophying and kind of losing their competitive posture within the market. And a lot of it's going to depend on the business model. Ultimately the owner or the sponsor, in terms of whether they're in a position to – from both a financial capital and the human capital standpoint to invest capital at the right time to keep an asset competitive, at least within the segment they think is kind of optimally positioned. So it's going to be a mixed bag, but I don't think it's terribly different whether you're talking about suburban and urban.

Great. That's helpful. Thank you. Timothy J. Naughton - Chairman, President & Chief Executive Officer: Thank you.

Thank you. And with that, I'd like to turn the call back over to Mr. Tim Naughton for any additional or closing comments. Timothy J. Naughton - Chairman, President & Chief Executive Officer: Okay. Great. Well thanks, Robbie, and thanks for everyone being on. I think probably a lot of you've dropped by now, but we look forward to seeing most of you in Las Vegas, next month. Take care.

That does conclude today's call. Thank you for your participation.