In 2023, we're projecting an additional $11 million of incremental NOI from these initiatives, and looking further out expect meaningful contributions in 2024 and beyond. This uplift is being driven by a number of initiatives including our Avalon Connect offering, which is our package of seamless bulk internet, and a new developments Managed Wi-Fi, which we have now deployed to over 20,000 homes and expect to be at over 50,000 homes by the end of 2023. During 2022, we revamped our website and fully digitized our application and leasing process. What used to take 30 plus minutes of associate's time can now be completed digitally in about 5 minutes. We also rolled out our mobile maintenance platform across the entire portfolio, allowing our residents and maintenance associates to interact much more efficiently and seamlessly.

As a result of these initiatives, we believe we are enhancing the customer experience while also driving operating efficiencies, which over the past few years has resulted in a roughly 15% improvement in the number of units managed per onsite FTE. Turning to slide 6 as a second strategic area. We are focused on optimizing our portfolio as we grow. Our goal is to shift 25% of our portfolio to our six expansion markets over the next six to seven years. In addition to diversifying our portfolio, this shift reflects the reality that more and more of ABV's core customer, knowledge based workers are increasingly in these markets. At the end of 2022, including our development currently underway, we increased our expansion market exposure to 7%, and subject to the capital allocation environment this year, we expect to be at 10% by the end of 2023.

We're funding a large portion of this shift through dispositions in our established regions, which also allows us to prune the portfolio of slower growth assets and/or those with higher CapEx profiles, which should lead to stronger cash flow growth in the portfolio in the years ahead. Our third strategic focus area has been on leveraging our development expertise in new ways and in ways that drive additional earnings growth. More specifically, as detailed on slide 7, we are expanding our program of providing capital to third-party developers primarily as a way to accelerate our presence in our expansion markets. In 2022, this included a project start in Durham, North Carolina and a new commitment in Charlotte. During 2022, we also successfully launched our Structured Investment business, with over $90 million of preferred equity or mezzanine loan commitments made during the year.

We believe that both of these programs will be increasingly attractive to third-party developers in 2023, and we're also fortunate to be building these books of business now at today's economics and bases versus in yesterday's environment. Before turning it to Kevin to provide the specifics of our 2023 guidance, I want to provide some additional context on our underlying economic assumptions for the year. From a forecasting perspective, we are overlaying the consensus forecast from the National Association of Business Economists, or NABE, on top of our proprietary submarket by submarket research data and model. The NABE consensus assumes a significant slowing in job growth during the year, down to about 50,000 jobs per month by the third quarter and a total of approximately 1 million of net job growth in 2023.

The output of our modes is a forecast of market rent growth of 3% during the year. In a year in which we will need to be prepared for a wider set of potential outcomes than usual, there are a number of attributes of our portfolio, and particularly our concentration in suburban coastal markets, that we expect to serve as a ballast in a potentially softening economic environment. As shown on slide 8, the cost of a median-priced home relative to median income in our markets continues to serve as a barrier to home ownership and support demand for our apartment communities. This is in addition to the repercussions of today's higher mortgage rates, which make the economics of renting significantly more attractive. The other side of the equation is supply.

In softening times, having an existing asset that is in direct competition with a recently built nearby project and lease-up can be particularly challenging. Our portfolio has some of the lowest levels of directly competitive new supply across the peer group at only 1.4% of stock, which we believe positions us well. And with that, I'll turn it to Kevin to detail our 2023 guidance.

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Kevin O'Shea: Thanks, Ben. On slide 9, we provide our operating and financial outlook for 2023. For the year, using the midpoint of guidance, we expect 5.3% growth in core FFO per share driven primarily by our same-store portfolio as well as by stabilizing development. In our same-store residential portfolio, we expect revenue growth of 5%, operating expense growth of 6.5% and NOI growth of up 4.25% for the year. For development, we expect new development starts of about $875 million this year, and we expect to generate $21 million in residential NOI from development communities currently under construction and undergoing lease-up during 2023. As for our capital plan, we expect to fund most of this year's capital uses with capital that we sourced during last year's much more attractive cost of capital environment.

Specifically, we anticipate total capital uses of $1.8 billion in 2023, consisting of $1.2 billion of investment spend and $600 million in debt maturities. For capital sources, we expect to utilize $550 million of the $630 million in unrestricted cash on hand at year-end 2022, $350 million of projected free cash flow after dividends and $490 million from our outstanding forward equity contract from last year. This leaves only $400 million in remaining capital to be sourced, which we plan to obtain primarily from unsecured debt issuance later in 2023. From a transaction market perspective, we currently plan on being a roughly net neutral seller and buyer in 2023 with a continued focus on selling communities in our established markets and on buying communities in our expansion markets while being prepared to adjust our transaction volume and timing in response to evolving market conditions.

On slide 10, we illustrate the components of our expected 5.3% growth in core FFO per share. Nearly all of our expected earnings growth of $0.52 per share is expected to come from NOI growth in our same-store and redevelopment portfolios, which are expected to contribute $0.50 per share. Elsewhere, NOI from investment activity and from overhead JV income and management fees are expected to contribute $0.19 and $0.03 per share, respectively, while being partially offset by a headwind of $0.10 per share each from capital markets activity and from higher variable rate interest expense, resulting in an expected $0.02 per share net earnings growth from these other parts of our business. On slide 11, we show the quarterly cadence of apartment deliveries from development communities under construction for 2022 and on a projected basis for '23 and '24.

As you can see on this slide, new deliveries declined in 2022 and remain relatively low as we begin 2023. This recent decline in deliveries was due to our decision during the early days of the pandemic, to reduce wholly owned development starts to $220 million in 2020 before resuming higher levels of development starts thereafter in 2021. As a result, development NOI for this year is expected to be below trend at $21 million versus $42 million last year. However, new development communities are expected to increase significantly later in the year and into next year, which should set the stage for more robust NOI growth from development communities next year. And with that summary of our outlook, I'll turn it over to Sean to discuss operations.

Sean Breslin: All right. Thank you, Kevin. Moving to slide 12 in terms of our operating environment. After a very strong first half of the year, we ended 2022 with several of our key operating metrics, including occupancy, availability and turnover trending to what we consider more normal levels. In addition, following two years of abnormal patterns, rent seasonality returned with peak values being achieved during Q2 and Q3 before easing in the back half of the year. More recently, the volume of prospective renters visiting our communities increased in January as compared to what we experienced in November and December, which translated into a modest lift in occupancy, and we do see amount of available inventory to lease as we entered February.

Additionally, asking rents have increased about 100 basis points since the beginning of the year, which is beginning to flow into rent change. Based on signed leases that take effect in February, we're expecting like-term effective rent change to be in the low-4% range. Turning to slide 13. The midpoint of our outlook reflects same-store revenue growth of 5% for the full year 2023. Growth in lease rates is driving the majority of our revenue growth for the year, which includes 3.5% embedded growth from 2022 and an expectation of roughly 3% effective rent growth for 2023, which contributes about 150 basis points to our full year growth rate. We expect additional contributions from other rental revenue, which is projected to grow by roughly 16%, about two-thirds of which is driven by our operating initiatives, a modest improvement in uncollectible lease revenue and a slight tailwind from the reduced impact of amortized concessions.

We're assuming that uncollectible lease revenue improves from 3.7% for the full year 2022 to 2.8% for the calendar year 2023. Of course, this improvement is more than offset by a projected $36 million reduction in the amount of rent relief we expect to recognize in 2023. The combination of the two reflects a projected 80 basis-point headwind from net bad debt for the full year 2023. Moving to slide 14. We expect our East Coast regions to produce revenue growth slightly above the portfolio average, while the West Coast markets are projected to fall below the portfolio average, and our expansion markets are projected to produce the strongest year-over-year revenue growth for the portfolio. One point to highlight is that the reduction in rent relief will have a more material impact on our reported 2023 revenue growth in certain regions and markets, for example, Southern California and Los Angeles.

We have footnoted the projected impact for each region at the bottom of slide 14 and enhanced our disclosure in the earnings supplemental, so everyone has visibility into the impact of the change in rent relief as compared to underlying market fundamentals. Turning to slide 15. Same-store operating expense growth is projected to be elevated in 2023 due to a variety of factors. The first is just the underlying inflation in the macro environment, which is impacting several categories, including utilities, wage rates, et cetera. Second, we're expecting greater pressure on insurance rates, given the increase in the number and severity of various disasters over the past couple of years, combined with a relatively light year of claims activity in 2022.

We're rolling all that cost pressure into the organic growth rate of 4.8%, you see on the table on slide 15. In addition to the organic pressure in the business, about 170 basis points of additional operating expense growth is coming from the phaseout of property tax abatement programs, primarily in New York City, and NOI accretive initiatives. The phaseout of the property tax abatement programs is projected to add about 70 basis points to our total operating expense growth for the year. While we'll generate some incremental revenue during the phaseout period, the ultimate benefit will be the extinguishment of the rent-stabilized program for those units in a particularly challenging regulatory environment. The impact from initiatives reflects a few key elements of our operating model transformation, including our bulk internet, Managed Wi-Fi and Smart Access offering, which as Ben referenced is bundled and marketed as Avalon Connect.

While we expect to recognize an incremental $5 million profit from this specific initiative in 2023, it's adding about 150 basis points to OpEx growth for the full year. There's a modest impact from our on-demand furnished housing initiative, which is also generating a profit for 2023. And finally, we expect additional labor efficiencies to offset some of the growth in other areas of the business as we continue to digitalize and centralize various customer interactions. And then, if you move to slide 16, you can see the progress we've made to date for each one of these three initiatives and the projected incremental impact for 2023. As I mentioned, our Avalon Connect offering is projected to deliver about $5 million in 2023. Furnished housing is contributing another $1 million.

And our digitalization efforts are projected to generate an incremental $5 million benefit in 2023. In aggregate, we're expecting an additional $11 million in NOI from these three strategic priorities in 2023 with a lot more to come in future years from these initiatives and others. Now, I'll turn it to Matt to address development.

Matt Birenbaum: All right. Thanks, Sean. Just broadly speaking, development continues to be a significant driver of earnings growth and value creation for the Company. At year-end, we had $2.4 billion in development underway, most of which was still in the earlier stages of construction. The projected yield on this book of business is 5.8%. And it's worth noting that our conservative underwriting does not include any trending in rents. We do not mark rents to current market levels until leasing is well underway. On this quarter's release, only 4 of the 18 projects underway reflect this mark-to-market. But those 4 are generating rents $395 per month above pro forma, which in turn is lifting their yields by 30 basis points. We expect to see similar lift at many of the 14 other deals as they open for leasing over the next two years.

And of course, this portfolio is 100% match-funded with capital that was sourced in yesterday's capital markets when cap rates and interest rates were significantly lower than they are today. If you turn to slide 17, we do expect roughly $900 million in development starts this year across 7 different projects with roughly half in our new expansion regions, and we will continue to target yields at 100 to 150 basis-point spread over prevailing cap rates. We expect the majority of the start activity in the second half of the year and are hopeful that we will be able to take advantage of moderating hard costs across our markets as these budgets are finalized. We have started to see early signs of this in a few of our latest construction buyouts as selected trade contractors have become much more motivated to secure new work.

As always, we will continue to be disciplined in our capital allocation, and our projected start activity could vary significantly from our current expectations depending on how interest rates, asset values and construction costs all evolve over the course of the year. Turning to slide 18. While our recent start activity has been modest, we have been building a robust book of future opportunities that could drive significant earnings and NAV growth well into the next cycle. We have increased our development rights pipeline to roughly 40 individual projects, balanced between our established coastal regions and our new expansion regions, providing a deep opportunity set across our expanded footprint. Most of these development rights are structured as longer-term option contracts, where we're not required to close until -- on the land until all entitlements are secured.

In addition, in the current environment, we are certainly seeing more flexibility from land sellers who are willing to give us more time as costs and deal economics adjust to all of the changes in the market. We continue to control this book of business with a very modest investment of just $240 million, including land held for development and capitalized pursuit costs as of year-end. For historical context, as shown on the chart on the right-hand side of the slide, this is a lower balance than we averaged through the middle part of the last cycle from 2013 to 2016, even though the dollar value of the total pipeline controlled is larger today than it was then, providing tremendous leverage on our investment in future business. And with that, I'll turn it back to Ben for some closing remarks.

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Ben Schall: Thanks, Matt. To conclude, slide 19 recaps our successes during 2022 and highlights our priorities for 2023. All of this is only possible based on the tireless efforts of our AvalonBay associate base, 3,000 strong. A personal thank you to each of you for your dedication to making AvalonBay even stronger as we continue to fulfill our mission of creating a better way to live. You're the heart and soul of our culture, and we thank you. With that, I'll turn it to the operator for questions.

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