J Darrin Gross:
I'd like to ask you Julie Blank, what is the biggest risk?
Julie Blank:
Well, a couple of months ago, my answer might have been different than now that you know, the market has been changing so drastically with the I think with the speed and magnitude of the interest rate increases, it has, you know, spooked investors, it's you know, put some weight in the cell of borrowing. But there's still a lot of capital out in the market. You know, investors want to do deals, they, they need to place capital. So deals still get done. But I think the the risk that we're looking at now is being able to continue to do deals, but looking at the severe impact that the interest rates will have on your cash flow. You know, especially for us what we do, we're value add, so our, you know, our cash on cash is, you know, already a little low, we're more about, you know, when we when we dispose of the asset. So when you are in a area that we are and interest rates are increasing, we have to really step back and really scrub the underwriting be a little bit more conservative, educate our investors, you know, some investors have stopped investing, some have become a little bit more cautious, rightfully so. And then, you know, we have other investors that are still going, Hey, let's figure out how to make it work. So it's really just being able to realize that the market is changing now, and that it might continue to be that way for the next, you know, couple of years, not only on the acquisition bid on our existing deals, like I mentioned earlier, in our conversation is, you know, some of our deals, we have floating rate so it's being able to step back and forecast and look at what the risk might be, how do we overcome the risk and be more proactive right now. So I think a lot of it's going to come down to just kind of protecting cash flow and being able to underwrite new deals, and realize that we're not going to get to the, you know, 1819 20% returns that we were able to underwrite, you know, a few years back and be be satisfied that we might get 11 or 12%, which is still really good as a return and that you know, apartment investment is still the top You know, real estate investment type. And we've been in difficult cycles before in real estate, and we've survived. So yes, there's a risk, we're not going to be stupid, we're optimistic, we're cautiously optimistic. But we also know that real estate is still a good investment in apartments in particular, especially the asset class we're in, we're B class. So we're right in the sweet spot that the markets are gonna are doing well, the economy's doing well C's go to B's, when the economy starts to not go so well, the A's go to B's. So we were we're a bit protected as far as the as you know, occupancy and rents and stuff. But I think we still have to realize that there, there's going to be some risk and some hits on our cash flow because of the interest rate increase, but I think it will, won't make us stop doing deals, we just have to be a little bit more cautious and, and work with our investors much closer. So that we you know, have a better understanding of where we are and where where it's going to go. I don't have a crystal ball. I wish I did. But it's hard to say things are have moved so fast, that I think just taking a step back and looking at things closers is something we need to do. But at this point where we're continuing to operate business, as usual, with continued focus on being aggressive, as much as we can with rents, which is going to help overcome the, a little bit of the interest rate increase in the inflation, and continuing to work in our technology platforms to get all the information we can to make good decisions. That's where we are.