AMH - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to the American Homes 4 Rent Fourth Quarter and Full Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Stephanie Heim. ahead. go Please

Stephanie Heim

Chief these assume that results and other speak statements. These results of SEC. differ press in with to otherwise. risks no conference you the Finance we call or today, and Thank here could us statements, our February Lau, Jack for with Financial and Laing, Good forward-looking of events future and American Officer; to year any other and for providing X Homes GAAP call number included include XXXX measures quarter in forward-looking the may this included future Chris new affect Corrigan, All Officer; that Executive press this in full Singelyn, Vice Rent. earnings factors our are are At our I'm business information, described non-GAAP Officer; earnings a our forward-looking on call filings fourth releases or our statements that fact Diana statements the materially forward-looking Dave of could whether of Chief historical outset, All President, morning. are financial Executive Chief as revise joining reconciliation I is from in result Operating actual We of projected as adversely release. to A than XXXX. statements conference update are need and today call. in obligation a of this only to uncertainties advise you to cause statements XX, statements. subject that risks those

our in information earnings non-GAAP are GAAP detailed release and measures, and operating our XXXX financial our a As including results, fully to as outlook as guidance supplemental package. well note,

call call SEC our the these find well I as to conference Singelyn. at webcast audio can our You replay will David website www.americanhomesXrent.com. of turn this over that, CEO, reports and With on as the documents

Dave Singelyn

year XXXX. XXXX and earnings to begin morning our in would you, like to our highlighting conference and by Good fourth I welcome accomplishments Stephanie. call. full quarter Thank notable many

acquired a insurance capturing new channel homes During platform, Builder attractive and lower and AMH home. our NOI enhanced in cost Core margin management, rental repairs with growth operating Combined portfolio, our reported points efficiencies rental improvement year, basis our property X%. X,XXX full the in a an of flow cash of further National yields, and we per XX.X%, same-home year and growth at excess year We the improved prior same-home nearly strong development year XXX of through of full over programs. and bill growth maintenance, we while establishing full for portfolio

continue fourth inventory to will results leasing discuss absorb later, position well start us successful as XXXX, in exceeding strong puts leasing in we a a Jack favorable our As upcoming the internal quarter great which expectations, have as remaining spring in to season.

we added occupancy portfolio homes result, as fourth same-home number our during the a increased As acquired newly a even significant to of portfolio. quarter we

$XXX million XXXX, best-in-class Turning capital, acquisition than our flow both retained sheet. fund further along billion attractively of raised of balance $X balance sheet, priced already with permitting our to during to the and cash which strengthen us we allowed more program nearly accretive

rate effective XXXX. year, in below issue these ph unsecured the Late a fixed million on spreads achieve in preferred with year, this rating capital BBB- first stock tightest us of to bonds XXXX only this benefits obtaining treasuries And immediately since this facilitated earlier hedged and achieved and our corporate anticipation sector. our $XXX XX-year debuted narrowing. of rating plan Our X.X%. significantly us, issuance we prudent We which the spread last transaction, offering, blended bond the investment-grade interest debut single-family allowing saw in the with

our for and XXXX, household our formations. to economic stronger demand continue space, new almost wage in XXXX. Turning operating growth continued strong. within steady, and provide homes rental operating markets, Jack demand fundamentals driven the remained Diana and portfolio by be growth will growth fueled including by expectations strong for job homes and Rental our remain sector bottom-line than sector. And hear any will other you significantly the our for as REIT multifamily to the

front. On growth the

of acquisitions Most the now the which approximately year this with product, risk the grow of and So far allocated our build have homes, invested objective targeting incremental accretively. of in we believe our $XXX adjusted are and be provides capital channels $XXX best returns in and primarily of will consistent through new to we million XXXX, and long-terms in our million both we $XXX near XXXX. -- to traditional our to for rental for balance in strategically newly constructed is million

benefited summary, Operating Our grow many XXXX particularly with year believe and growth to near-term Jack us include for remained as was and have activities long-term accretive strong tremendous to busy operational I'll near-term and in and platform. Jack initiative focus up. our is our our flow our cash we construction best the leasing in bit now the acquisition activity optimize continued and piloting on Officer. have long-term the will smart Chief In and call. but and that organically, provide by call new a accomplishments. rental the flow we provide returns, program to we of turn efficiencies cash strategy Corrigan, our exciting communities an Further, further the details in this picks still are adjusted channels Fundamentals later still opportunities that will activity over

Jack Corrigan

morning Thank operations. you, I'll everyone. and begin with good Dave

on this facing our XX.X% year at portfolio. We lease focus grew occupied spreads that remain X.X% we rents last especially a achieved of was leasing fourth ability not by at by leasing at to from XX% spread X.X%, on absorption. absorption inventory blended slowest seasonally achieved added leased in quarter ability I to QX headwinds the were on lease same-home XXXX maintain as XXXX, same last for and lower the inventory to and same-home on levels. fourth faced the experienced continue occupancy we X.X% We points inventory are homes, to-date, year. and for at and ended fact, time blended XX.X% XX as absorb in and rate basis captured our our with forward. growth X.X% bullish I'm inventory same-home to and January our improved XX.X% and the we will renewal when to and of renovated into our priority our equivalent September in blending XXXX with expectations with steady the quarter XXth, focused fourth we basis acquired we pleased fourth is far our as expectation As activity quarter XX in did to compared to to portfolio as quarter for growth newly to occupancy our call, XXXX X.X% growth of lease growth by growth inventory rates rate of stated quarter, X.X% our renewal lease continued occupied activity the XXXX January month. January exceeded with move within total so push the Leasing points we holding turnover new strong a rate Combined as we have year-end. expectation an report new

to lease into continue expect New up in trend March. continues February growth to and this we

initiative. was were tax growth to timing vacant revenue Turning results, remained quarter and turnover increased that have would NOI up property largely property I disclosure like Expenses after supplemental, material X.X% and added of our year see to turnover expenses recurring related CapEx, quarter, the On for to resilient CapEx, costs pressures, and pages higher to will inventory. X.X%. maintenance of X%, the primarily attributable the XX highlight CapEx related capital the full labor-related temporary separated and on X.X%. fourth associated spending in from expenditures. related with expense, cost but the which to elevated to same-home at is related some enhancing increases XX robust you we for flooring

in to it flooring looked widely have this where at on at economic homes, program opportunities acquisition, recently we've hard primarily utilize installed always makes resilient more turns flooring our we sense. into While expanded

Given the made program, in added to the this provide disclosure. this growth we decision

we the to three five to all and turns. years a replace easier to clean useful program run carpet. to until to opportunity this is the expect life flooring, years flooring has Resilient and on We compared for maintain primarily have relevant years next of for several XX approximately

Turning to activity. transaction

with During average flow fourth through pro we capital quarter, for purchases cash approximately total channels were expenditures homes investment of the acquired X.X%. a X,XXX forma X,XXX sufficient $XXX one-off of of our for including yields, traditional homes acquired million.

Demand channel same an value of Development. have over acquisitions yield delivery with product, additional points quarter. been first National took traditional XX of total an $XX homes the was in to which investment $XXX estimated homes also Year-to-date close total premium approximately six for investment through value a markets constructed total of we XXX an the our in have in estimated projected nine homes newly our are stabilized had these XXX approximately escrow primarily Programs for acquired Builder strong channels basis XXX of of million, expected XX plus XXXX, from market. that generates to and traditional million, in for were for homes AMH $XX investment million from XXX We this of has

$XXX XXXX our total to As traditional in from million program. complete Dave in development; acquisitions; million $XXX -- mentioned, approximately million we now Builder comprised in the of expect through National of million channels; $XXX to and $XXX AMH following million $XXX acquisitions

first the these moderate in provide risk-adjusted Further, capital throughout third, primarily returns the through superior. up we build returns In be acquire year, lower quarters and lease channels not believe to million to the and expenses, for longer-term fourth with currently. which growth for benefits allows homes from us in rates markets meaningful build the primarily of normal in terms our channels, We of accelerated focused pace be product where maintenance rental traditional near-term. we'll approximately our represent compelling our program do go we second, product. best will should and at believe rent And on expect the and $XXX quarter,

is so including activity primarily and Dallas, in Texas, Austin, Antonio. the Northwest, Charlotte far including Southeast, and and Atlanta, Florida, Our Seattle the focused San

ability activity addition, occur program provide is communities, the efficiencies consisting nine XX-XX appeal Builder homes, communities. National of well as each potential the In rental We this to across amenities believe and leasing within of development. community-level several of as expect and spread This curb homes between for to our activity neighborhood. XX about totaling about XXX including neighborhoods split approximately compelling targeted we these advantages, to million control maintenance the XXX to and $XXX AMH

occupancy drivers operational XXXX, our of and indicated discuss rental release and XXXX I we Finally, in will portfolio earnings will operational by as terms rest of our pool. have reflect the our results as both but the both into to released in that defined in underlying and the table a of X,XXX same-home mix, will provide XXXX occupancy a historically of better page earnings forward provided look guidance clarity outlook rate same-home average for supplemental. metrics, a and Also, which been newly few now our rental rate guidance release, and Note in underlying performance, homes XX similar XXXX. has profile the Diana the still cover our some and leasing minutes. grow approximately we market as

lower the our includes XX.X% occupied pool, turnover. moveouts process to XXXX is to while percentage for volumes in days occupied second and XX.X% the average of For expected the of and year in days heavier range. XXXX expected Typical be we third same-home quarters seasonality full

per growth recovery known maintain rate expected net turnover to home, gradual capital tenant XXXX For repair as be focused strength the costs remaining to most work initiative. home. in-house QX to at our excess the to through some the monthly to gradual of the the from range, our for impacts wages realized markets. offset grow cost development Average in absorb X% continued continue improvement expected to rent we the purchases. driven is pressures we increase continue property and cost program expenditures, maintenance X,XXX Note midpoint a full XXXX work and as our higher reflecting of year inflationary market primarily inventory trend renewal from inventory. and is labor growth we over maintenance million expansion reimbursements as over also QX material and through $XX this flooring our across X,XXX the primarily XXXX, to XXXX, that our and of XXXX by excess of enhancing is CapEx resilient to of our And $X,XXX continued invest portfolio, in X% throughout rate to we a The for $X year also early year, anticipate to program. on X% and in driven million range we and Average per by of whole a recurring releasing throughout full property plus increase expect amount

higher turn we the spend in during and over where flooring and replace more quarters second homes to be expect We as time. third that necessary

over turn to Now, Diana. call the I will

Diana Laing

Thank But recent capital I'll update you before to review metrics, briefly couple our our on markets would quarter, that, our expand the fourth you, and Jack. In XXXX financial comments, a results sheet my further balance like for of guidance get I I outlook. activity to discuss and items. on

our minor during of the estimate and homes We million of to major of homes from about the both online Harvey XXXX. progressing this nearly repairs having Hurricanes by First, second and damage the the and our Irma complete hurricanes XX% anticipate million homes related efforts $X with damage to end We've well. sustained of repaired back that quarter time, that damage. repairs our sustained we've XXX adjusted we're insurance all downward $XX proceeds. At completed of net are estimates remediation original the to

preferred Second, which $XX.X reflected and comments a the shares Series to information the time. of non-cash participating we're cooperating subpoenas, in this A no million redemption statement. the the regard charge, XXXX of or the fully quarter have is B And fourth at and resulted with third, additional SEC income during on

in transactions to discuss market capital sheet. balance recent the our Now

adjusted During at our unsecured we treasuries including coverage form times effective of XX-year our months, In EBITDA XX stock. the interest our of advance transaction the spread is credit another bonds, $XXX charge three million year to balance February corporate including of high a for Proceeds and used benefit with points. down hedging a to were to the the was capital issuance, priced flexible deleveraged other and purposes, sheet in raising was by in pay of At And for general XXX capital. our alternative common provides program. of grade unsecured $XXX debt and to significantly of million we which inaugural for entered notes XXXX, long-term this times. the that attractively preferred X.XX% issued permanent issuance was end, rate basis this XX-year net trailing priced facility X.XX%. Access X.X of year, of fixed we acquisition revolving market funding debt us

Turning to financial results.

unchanged sorry, XXXX. During quarter, per the fourth the from of also quarter Core XXst, first Fourth $X.XX to share, FFO -- from quarter debt same impact by reflect at I'm the in decreasing XXXX. offset completed year we from was of the quarter December $X.XX last end to EBITDA operations, property unchanged by the in results significant of of our net illustrated times X.X as growth share, deleveraging times XXXX. AFFO XXXX fourth was year X.X per

provide excellent on sufficient context outlook, believe revenue our We're rent rental in and Core year X.X% pool Core Regarding days XX% previously range and result NOI defined an to target provide believe operational and growth to expenditure X.X% by these average provided expenditure providing model to in further precise capital to and these in underlying to Core in operating measurement growth in as to be monthly margin terms metrics expand we average Core translate disclosure our and occupied by discussed the NOI revenue the We've property full expense recent of To recurring background. XX%. to of same-home understand Jack. expectations ability additions X% the property growth a our for the as committed expected of the will X% to trend to data quarter and rate, XXXX. will our for newly be and X% expense enhancement after and business. enhance the changes realized per XXXX range is to supplemental, a increase capital supplemental the our historical X%. we more performance. occupancy,

expected our results more inventory comparable in quarters Jack first in to As year. NOI challenging reflecting timing available of be $XX.X half of range, are the that slower the last the and in year, of [Indiscernible] to a [ph] administrative with is the last growth reminder, the million about which and General expenses revenue we'll to $XX.X be to expected is And now, call X% million the year. questions. open discussed

Operator

conducting Thank be we'll time, this Instructions] At you. [Operator session. you. Thank question-and-answer the

from comes of line Joseph Nick proceed with question with first question. Our your Citigroup. the Please

Nick Joseph

Thanks.

development? that terms you the and have do In if down Builder what balance the on then growth XXXX, the external National spend you could to And expect sheet acquisitions between and in program deals of development development. break

Jack Corrigan

anywhere -- closer The X.X% Jack. we're X.X% will AMH more yields building to between And are in the The is the XX-XX program. Seattle X%. Carolina yields This in X% to the National on and the we're split building markets. and where about from is North in Builder range depending in range

Nick Joseph

in program, broadly in can Thanks. executed and you program at also guess, both about prefereds, have place? your you has or been And then the terms of common in the February thoughts since on of all, the executing for in the talk repurchase terms I and

Dave Singelyn

Dave. we of we programs -- repurchase at programs. obviously, place in look at no, we be had refreshed the the accretive And Refresh-- yesterday. any housekeeping program investment utilized and program, quarter end. -- the it month repurchase it's But this We programs point, bit The opportunities a it, utilizing We at in any in first haven't the is appropriate, repurchase just different where look this common, on we'll all and announced No, to-date. at Yes. it. a like I is those year investment little

Nick Joseph

the formal disclosure additional appreciate Thanks. And in just finally guidance -- supplemental. the and the

FFO not provide guidance. why curious Just

Dave Singelyn

it's -- guidance. are and it been to We provide We putting what in been -- on program calls doing earnings what we're is we we formalizing before never our doing FFO have print.

So, I doing previously been an think what formalizing informal we're we've in way.

for see. And it's have and to now so there everybody

Nick Joseph

Thanks.

Operator

Please of question of Our the Sanabria Bank is question. America. proceed line from from next your Juan with

Juan Sanabria

Hi. Good morning.

you expense just costs. wanted hoping any expense some popping flooring that the if sure is just Just and resistant make includes in could the same-store included of in of same-store that that your to into is I clarify not if guidance. up guidance or is go

Dave Singelyn

not It's included.

Juan Sanabria

give us what's you could it the so end? XXXX? estate that of color us And could little -- towards projection that's high in Is expense real those just on expense a of driving a you bit And taxes that. give sense on if kind

Jack Corrigan

Yes, pretty close range. X% X% to I all the mean, -- to they're in

All offset workers the taxes, because again, depending and area. wages in to are and and of partly maintenance but trying X%, occupied manage up percentage. in material higher Property is X% up construction to inventory that cost inflation to are are that's in wage of the program, trending partly because, more our X%. costs in of the repair leasing efficiencies Vacant the up expect that year. on and We're up property midpoint is are cost by our included and cost what demand more cost about of Its overall And costs management the new than inventory. property we management. -- inventory expenses the turn the and materials about going for

Chris Lau

the X% management X% about to have recap property that out property to insurance the in growth components. in X% X% that to blend in mentioned you overall you X% HOAs. X% midpoint, and And that'll to and X% and Jack R&M, the tax, guide. and about to X% At just Well, in

Juan Sanabria

assuming thinking are in there? C what terms equity how guys in you And or Okay. the or the preferred, guys are assuming debt that? then you about you Are Series of optionality guidance on

Jack Corrigan

optionality. guidance that I don't we think provided any on look we've how to treat

Just that April available option come Xst. does

what it for set best We opens, into will not have the that at in the the years or convert window the appropriate is guidance. three look to as alternative alternative it's either to different we And there, considering time, at redeem but common.

Juan Sanabria

that your cost route? us And sense if debt give of can today a of unsecured you you went

Jack Corrigan

think was mentioned, best that indicator I I is XXX-- the spread it the was think,

Chris Lau

XXX.

Jack Corrigan

over points basis so. XX-year XXX the

Juan Sanabria

Okay. And last me. for question

the on Just lower guidance. acquisition

there. a If to you that are of deeper Just on you or that where you on? doesn't home balance flexibility it want can last more price has a larger that you on maintain when sheet kind the little has number? that typical the much to it what sense? year hoping bit just portfolio what acquisition could little on just really external the channels make changed -- transact Or delve traditional expanded for bigger Is color from a is targeting into a changed late appreciation

Dave Singelyn

a of Yes. No, the all I blend factors. think it's

the and these on previously it's we the buy calls tangible it's telephone benefit. when mentioned that so will beneficial and have We intangible to accretive platform, both

that are to we gearing find We those acquisitions the continuing our do where channels to be to we it accretive. and are most

it's -- of function in anyone is particular. that really the so the things a And sum not mentioned, of you that all of

Juan Sanabria

Thank you.

Operator

from comes Haendel question line next Our the of St.

Mizuho. from with your proceed Please question. Juste

Haendel St. Juste

good morning. there, Hey

while to clear. with The your on when companies buy downtime I acquisition, closer the management announced asset balance So, back sectors above guess sales Applaud little on buybacks of is today and five a that's you of consider math the leasing being for if position your to renovation stock in to stock well other the sheet six, it's buy four clearly implied capital being depending which first bit I guess first. homes. in

be to be? about Should should your willing for loaded we expect maybe then how front you So, we should sheet up I aggressive flexibility see end lever leverage? And perhaps this expect How think given guess my buybacks the we balance to you to context is, buybacks? much would liquidate? in to of question how you more year

Dave Singelyn

approved. -- repurchase tool we but it; got much it is the But in exactly how to a use tool a going we're on it. is, we'll at to We as utilize price point, much are to not obviously, know in and given announce give stock this belt. just position any where we to that we going how I'm it At guidance it time.

Haendel St. Juste

it that remain expect Any leverage? we expectation? on Should thoughts the here in five-ish, the to is

Dave Singelyn

balance on opportunities, the on other opportunity repurchase all combined. It depends It on to depends depends stock. acquisition depends It of on it sheet. and it

Haendel St. Juste

All right.

the hearing we're you on pressure rising you have agreements delivering partnerships, seen costs. on builder labor yields? On guess, the with. and Have constraints, build delays I homes

Dave Singelyn

some the a we're our lot time, not delays, all and We seemed really putting Builder vendors on National with not development delivering subcontractors. close learning to AMH still contractors They see and in but be and program. and together pretty the

So, seeing building see probably we a than Builders. few more what delays we're in what National the we're from

Haendel St. Juste

I change share these ago. many some year relationships this than arrangement, you in success change of it mindset more. XX-XX, perhaps mentioned, bit thinking Can to off any you you're a Curious sounds early things a a more doing have which what is toward -- And It perhaps considering I the or indication? are think, of maybe, there, good in perhaps type towards perhaps to you like how expanding then pretty heard start. partnerships? your early any

Dave Singelyn

some is and ones six somewhere think of are are some of and our better I out decrease between bigger are working this than relationships the of XX that to Well, the and right ones amount, as a well. of we with worked the have we'll I guided out think relationships, what relationships probably we number million year and $XXX better aren't kind others smaller. -- have is expand out about and working the about the And some that number

Haendel St. Juste

still on of platform then committed it a this. some sounds part your Okay. like doing within but of as you're It's to own And keeping that firm partners, with pursuing in-house. also some it commitment that, still

Dave Singelyn

Yes.

Haendel St. Juste

Okay. Thank you. in queue. get I'll back the

Operator

your proceed line Please with from Stanley. Our Hill Richard next comes question of question. Morgan with the

Ronald Kamdem

Richard Hill. Hey this in is Kamdem for Ronald

was at XXXX the on portfolio? secondly, that margin essentially looking thinking that? But still are The years, gains Core flat just for you opportunities like margins about potential there be the in NOI same-store maybe have comment first quick out Looks as are question on end. One, margin. can we're I to going versus

DaveSingelyn

costs once to through you gains. your at for we pace of also I down one potential the that side and and up will expenses of us drive increase think are have lease there benefits obviously, again the mean, better revenues growth. acquisition rates. property get then increase. have think than help on Yes, cutting It's back And management a your for push I we

Ronald Kamdem

about maybe back guys same-store should the guidance, extent grow going could we are into portfolio same-store asking continues down to that think how about that that to question then you digging so different and forward? just forth, the And to X% the X% scale number -- Great. How the way. get that? To a Is and something thinking that ask back expense X%? maybe

DaveSingelyn

Are you expense talking the to about growth, X% X%?

Ronald Kamdem

That's right.

DaveSingelyn

that. certainly down Yes, we I We're and economy back X% to wage get material somewhat I and can to to I think that we that's can to achieve depend on and that going hope but the growth, think X%. pushing always better get

Ronald Kamdem

which at maybe on seeing you're looking constructive the on can portfolio, most the most you challenged? and job maybe just more markets markets comment then growth, And you're which

DaveSingelyn

City. seeing also Tampa, It's a Well, Florida, Orlando in crazy particularly Lake but we're of incredible Phoenix, Vegas, demand the West, seeing an Seattle. Jacksonville. we're and in in Salt demand And Las lot

is say those would I so also probably of are markets. all So, -- Atlanta best our

bit. to December now end of from get see I up the a at you of doesn't these almost XX.X% end quite Austin in picked of Demand January, occupied a show starting it has Austin we through to bit quite XX% at the January. up think to demand, is numbers. occupied although in When move

Ronald Kamdem

of out Street? just to dead can FFO to on you've presumably something metrics, all that But on why operating crunched the like And me. beat done not have you've providing Not maybe the the Because there for Okay. it -- and you envision that already that is guidance. horse if it you one seems future you last provided number the it? in put the

Chris Lau

in plans, advisement. take currently but not under our it that's Yes, we'll

Ronald Kamdem

much. so you Thank

Operator

Our KBW. question from Jade of Please with comes your the Rahmani next with line proceed question.

Jade Rahmani

Thanks average lower very the percentage. occupied see days can total and much. if on percentage what wanted drove I average occupied same-store comment you the to lower just days

Dave Singelyn

a bit quarter the in started Yes, little the we hole.

brought discussed some the we to halt of hurricane a of quarter, in kind the markets. As last leasing

a activity we hole picked of December. end days November so until up in The at in really picked November. leasing days. didn't in definitely too, that flowed October And the of it occupied -- up in terms absorption terms through and of in but October, in occupied started show It and September in

weighting So, thing have you down. the just of kind October whole

Chris Lau

Jade, is Yes, Chris. this

of the see from looking think further end is about of of the line, think terms end to at to quarter into at February. activity the activity January trend up quarter I of moved probably improvement you XX.X% end way in the can period the the of range in quarter the then the in the and the leasing at fourth where and there, occupancy XX% percentages. the went better third XX.X% beginning And

Jade Rahmani

those Was what significant? the And impact XQ of on acquisition more about hurricane activity numbers? the impact

Dave Singelyn

Charlotte be had acquisition had acquisition activity another more where than some comes activity. have one most. by activity some effect. into that its probably the affected both the markets by of hurricane. was in influence was of It affected the acquisition mind those Nashville But inventory. we is the you heavy that QX put one to will

Jade Rahmani

are headwind a other Rent, narrative American younger be creep over higher secondly, largest the In rent terms of time. And a there's properties less age geographic mix markets. drive X this there to seems portfolio broader that the issue your in to will expense of seasoning that is Homes perception I versus around because that growth the think peer exposed

say those factors? you do about two what have So,

Dave Singelyn

Tampa, go rent I outsized But I then flat exposed had We've agree in do those that. we to move and Well, California wouldn't cycles. Phoenix, than than and are. that, that while boom. Other California for they're a Atlanta say things growth has more

good good not now. be So, now what's year a from may

diversification But about like our but So, portfolio I in California, at rate occupied in don't point our -- it's California this strong. is markets. -- in XX% and our California a very really the clearly, growth time, and big mean, Southern Northern we have I

part as such your -- affect So, part. it small it's because just second was what In the doesn't much of a question?

Jade Rahmani

that but higher of labor going that projected growth, operate it your portfolio seasoning relates lot the of terms inevitably in inflation, if revenue you with up. actual and portfolio attribute is to exceed to do think You In growth just cost of costs? the did materials resulting the of and wondering just the a much to aging the of how expense to

Dave Singelyn

the -- we're or XXXX in in putting properties, but and the and the to or we we -- XXXX properties one difference of don't benefits XXXX properties I XXXX that a acquisitions. see balance the is properties built we kind of age mean, new between I tremendous dramatic think, we of Yes, difference of our that average out, but and acquisitions have acquired a see XXXX, between on is from don't

Jade Rahmani

And just work orders are of doing percentage you staff? with internal lastly, what

Dave Singelyn

XX%. Roughly

Jade Rahmani

that to plan a get above to XX%? there Is

Dave Singelyn

say increase sure vendors drive percentage, we the -- for for I We plan season where wouldn't we have a to in come we'll with the plan of but season. have seasonal busy to a there. really issue the the get I'm external is up lightest augment of XX%. maintenance The not staff and to get really the then and costs part for part we

Jade Rahmani

the taking for questions. Thanks

Operator

the line FBR. David Riley B. your with of is question from Corak question. next proceed Please Our with

David Corak

good Hey everyone. morning

to share on issue line? financed the ratings you back the buyback today as with the that assuming opportunity, if agency $XXX the Going the whole be common at million the utilize any price, will there leverage and you current

Jack Corrigan

concern, is I trip $XXX that think agency one whether rating not set, million The I'm but XXX% sure. so, don't

David Corak

Sure.

for And if for any, material additions? if Okay. the this, I impact pool from then guidance, same-store but And was the changes XXXX those of were same-store XXXX? then I apologize there the missed and to what

Chris Lau

this probably add mix it'll similar XXXX pool. we'll in to and of look composition, pretty But We're terms X,XXX the same-store to the about No, properties expecting pool. Chris. market just is David,

the think year you're think into or would what don't I whether is pretty get XXXX I then So, what the that guidance be XXXX XXXX pool. you'll XXXX. see And representative prior seen from of we different, comps when any for you've at looking

David Corak

of mean, you look I you into we When market that growth Okay, traditional longer essentially on how bit? the platforms. Or development? road assuming focus term? a the XXX% and that's last Do the stock opportunistic you acquisitions and little do are condition XXXX, think the a constant pretty down Then about one. success and development helpful. continued

Jack Corrigan

work our this only I that's phase of that. development. possible if wouldn't it's it'll at But out, I own I Yes, worked think the still pilot as in well we're it would investment say our say that, And as avenue. out point,

David Corak

you. Thank right. All

Operator

Our next question is from Please Advisors. proceed the Street line of John Pawlowski with Green your with question.

John Pawlowski

Thanks.

growth prices, deals? bidding Given you are the the external I of tent share portfolio large for strategy, at the of current out guess shift

Dave Singelyn

is were today transaction It's when it's was just you significantly of the price We where what it pricing a get was negotiated. below -- and to American a it acquire give able and you our between Every function. function share Residential what up. is

out so that say no. of can't we're And game, I

John Pawlowski

tent? stock-for-stock of the cash, out deal, of bidding you the Outside are

Dave Singelyn

there's to large whether well. time channels the has investment the function at going time homes again, allocate other -- homebuilding. its is has -- we're portfolios, capital the capital the bid it's is looking We've And portfolio, of going timing through this of point, but in we see of change. it's opportunities we that to one-off negotiate. it believe at the avenues before. best have, to be of a widened they Well, a in all traditional And an as we're where the take that kind ask bit, said impact. would a I little -- this and it And to

opportunities point, So, in back the and will I those future. at there's some come think

of of one it foreclose but going factors -- that not factors, the no, have you've of I'm that the out But there. appropriately opportunity. to all don't we a there's So, number identified

John Pawlowski

investigating stock? the entity Silver or in on know they're trading us of you SEC much, Silver us Okay, the can tell trading Bay, can't got subpoena Bay whether it. I individual the give stock and AMH, trading employees you then around please but And

Dave Singelyn

indicated, you question I clarity at think more point. information point. process very we this As to the there's have don't this We're an this early in your not a It's say lot at gatherings we point. and at can very,

John Pawlowski

AMH you AMH in being do in and does that has -- past REIT question, currently your the broader securities? A REIT bought Okay. own in has the past Securities -- or

Dave Singelyn

looking gain on acquire their as $XX we of that. $X we and indicated did filings, -- our securities a Well, at million Bay, while we million in Silver have were

John Pawlowski

Thanks. great. Okay,

Operator

question. Our Suisse. next Credit comes Harter question proceed the Douglas from of with your with line Please

Douglas Harter

Thanks. my questions answered. asked have All and been

Dave Singelyn

you. Thank

Operator

from line comes Babin next Baird. proceed Our of W. the Please with question Robert Drew with your question.

Drew Babin

my Hey, and thanks good morning taking questions. for

in the non about same-store a be would an I infrastructure margin guess your product growth the target your into on is stabilized a about properties in are have than that of question kind of is of already expense XXX markets this already acquiring First on higher same-store properties being necessarily your feeder pool? same-store margin this margin. basis points And are assets them? kind around create these as XX%

Chris Lau

in more non-same-store states are importantly, still properties those their in stabilized majority they're I first of recently and represented little renovated is pool. market function two wouldn't this of slightly a It's bit of cycle. leased, But Chris. in markets tax things. property mix acquired much. probably that No, a is because too into more lease lower where we read One a have and

the they properties they than burden those So, which little translating bit season of the look the lease pool. mature into a get profile Other have cycle the similar expenditure they tax very the turnover of then Once full should them, their same-home slight way pool. costs property into don't out and a same-store the to differential, and into higher further, is margin. volume

Drew Babin

I Looks much, just of to helpful. one has the been the the your Metro color changed on going as seen that? market additional we've could the of well. strategy so in some you same behind that hoping kind is what give exposure an acquisitions hasn't about was and depositions. very And time, market at Chicago like source really That's area on But Thanks. the question primary Chicago.

Jack Corrigan

when typical sale their them getting that were were and time the $XX,XXX, right proceeding through Yes, rid acquired And preferred acquisition at they're -- mostly in homes, not not orderly $XX,XXX about an they homes are the those mean, acquired X,XXX some of of so our $XX,XXX, [Indiscernible] had been them. kind product. we've identified ARPI, I of for we fashion, the of --

think we X,XXX of out couple a have left I to XXX of sell. the

Drew Babin

going redeployment there's be would that And like look in it the some would side, on, acquisitions correct?

Jack Corrigan

don't think been I acquiring we've in Chicago.

Chris Lau

way. not No, in Yes. a meaningful

Jack Corrigan

of Chicago last think acquisition the of an couple can't in I years. in

Drew Babin

Yes, separately. be it might disclosed

from Okay. me. That's Thank you. all

Operator

Zelman next line question. McGill comes Our Dennis from of proceed with & your Please Associates. the question with

Dennis McGill

Thank Hi, you. good morning guys.

some quarter and that and turnover driving more notably you rates prior just the these you're year has question markets. to the do than did of bump the renewal quarter got it without in with with First thinking fourth struggling fourth about the you where in yet, occupancy above

that on come supply timing or really a are that a little back that? maybe that I of occupancy triangulate and say So, maybe to just things wanted bit is just the you'd idea the to there within undermining going other

Jack Corrigan

in mean, season timing Yes, putting to it calculations said, somewhere homes we've then are it's of probably say in service hurricane XXX I that placed the I into XXX count think renovated the and at would And looking you X,XXX the or in total some as acquisitions, homes I down go I leases our portfolio, and late what occupancy timing. more our you're -- not the around drag total fourth the like And during And even service lost when it's so we we quarter. into to going put down. aren't far I'm portfolio occupancy. as can't just quarter, third was yet, cost ready to sure of not same-home

Dennis McGill

guess think at way? ago, general? reflection renewals different in looked demand like environment the a the approaching of you But do a year a portfolio. I are that's if you at different in at disclosure, for And feel ahead way, the look Or the of total I it renewal you the I looking strengthening

Jack Corrigan

renewals We're -- range. year last in think the X% our not were I right

Chris Lau

is X.X%. quarter Fourth

Jack Corrigan

spring X.X%? a you're what higher than before renewal year has summer. Typically, in them rate and lower things the the at quarter rates because fourth you've at leased in leasing

probably on primary be could we haven't renewals. at driver, we that's the look It mix, So, what's way market too, renewed. but changed the

Dennis McGill

things think lot about to different as the had all expenses, you you And have be I just expect I operational numbers? evolution numbers within question those just talk as second you your the aren't a there's far Chris, just costs like down, same-store would follow-up. embedded as the opportunities of feel to seems ticked buckets market rates. to Okay. that different be the the own the improvements. are drive then business that in what wondering And and as it like efforts on whole fairly you in doesn't it of maybe the to that maybe some or a Can close

Chris Lau

about improvement operational opportunities talking He's expense numbers. and

Jack Corrigan

question the attention last I'm sorry. wasn't one. thinking and about paying next I the I was to

Dennis McGill

You're in trouble. going to get

Jack Corrigan

know. I

Dennis McGill

feel comes the question be management, X% repairs was there's taxes, to on but a guess turns. The ultimately market-driven, -- a offsets, range lot consider is maybe I pretty doesn't could in like guidance, operational fairly X% the that and return through X% walk to them. down if are. It I of on to pervasive and property the wondering seems growth there you it you'd expense

Jack Corrigan

we're I achieve them. counted we've I think offsets we don't mean, Yes, in -- any operational until

had to the primarily either we'll get inventory. up lower result But be hopefully, through it's of or So, than that's to our that. -- vacant we inflation staff

Dennis McGill

that's while? you've Okay. a would when around And up then for the Chris, same-store going ARP especially the one been more just be not portfolio pool got why quick one.

Chris Lau

are question. -- that turned to good is properties coming be it's they ARP, going number way have are are non-ARP. yet. ARP There half that that we large homes still The a the be in, it to are the of half X,XXX very Of going not treating

make we inside same-store that chance to the and they the the at of are should that so the had haven't included get homes sure And be they into pool. level

we going first for trigger turn. except the to treating properties the bucket, that after the other be way ARP And criteria we're so stabilized homes basically the their stabilization into to similar bring

so same-store essentially what's year-over-year. XXXX, the are of clean that ARP beginning turn before and have So, a comp properties that for the know pool XXXX we comparable we into for moving

Dennis McGill

Okay, Thanks got it. guys.

Chris Lau

Dennis. Thanks

Operator

BTIG. of the Gilbert your with proceed Please question. from with line Ryan Our next question comes

Ryan Gilbert

thanks Hi, guys.

the a acquisition Just question guidance. on volume

inventory I and you a $X.X home think the we've as the positive channels? improvement up described prices would be or third deal in I market, resale, -- anti-seasonally think -- all buyer which demand maybe Builder when is the flow in what about home impacted since in acquisitions, through either purchase talked traditional National quarter billion both driving an new in at your seen in and down. program XXXX both and Has that

Jack Corrigan

but of properties I some buy. buy. a No. as balance to mean, It's just to out, plenty of plenty opportunities to, probably sheet said, it appropriately. There's there's candidates decision Dave knocked to our more manage

Ryan Gilbert

terms development? work? in that then the And your percent will what raw from stabilization finished pipeline, single-family of you're of develop development And lots Understood. start on that require what's Okay. the horizontal versus developing are rental the lots to then cycle-time

Jack Corrigan

developed XX% have. think vacant -- vacant lots The I the what we of about are developed lots

most communities -- out and we two a there year they going or and and half up. to take those I two, home phase to to you're ran lease that a can -- ground of XXX just horizontal and build, those don't either up bring of them going small -- out. doing Some rental up then as years areas homes of that mean, are those where take And coming or XX-day days maybe the here we've lots come and long development the are to are and The rental. those clusters to don't are one-offs home acquired, XX XXX

your sure So, I'm not but-- that all questions, if answers

Ryan Gilbert

does. It

will that or flow the going what XXXX actually within that in cash XXXX $XXX XXXX? of XXXX, in cash million guess I So, on flow you're development to versus spend -- percent free

Jack Corrigan

year be probably say rest I this the would XX% XXXX. flowing early cash and would probably

Ryan Gilbert

great. Okay, you Thank very much.

Operator

Raymond James. with question proceed question. Please Our line Buck the with your Horne from comes next of

Buck Horne

Maybe of that positive just channels the positives us now. to course, maybe I wanted the a rental behind What of traditional are build entirely building strategic there and, with good to and of the acquisition explain to the suit some has kind narrative expound bit you -- a the out logic of communities building associated from large upon that. of negatives thinking strategy just rental out it's morning. of some in together change communities. homes Hey,

Jack Corrigan

can or they pilot we of excel We in do what I But they in at it's researched. more. program. get say that If And work, we'll that good think these a work, as won't ground. a program we now, right Yes, would XX nine many. we've think it. do don't We we that the it's

Buck Horne

plan manage branded of sometimes kind that that been and plan not to. -- how what manage of be of you the do there's communities it? about and to marketing do concern accustomed would attracting you communities of the How rental aspect you -- as quality any And tenant same to typically

Jack Corrigan

standardized. have. be say the what homes landscaping yard similar sure All always that make front can maintenance we going are about air-conditioners thing looks The appeal they're to the to community of nice the you the to standpoint. is pretty I good curb Yes, The provide the clusters is would from tenants same.

with of of multifamily kind so of maintenance apartment has. of would apartment-like community. hybrid a at some that that I benefits amenities that look the kind get And You can amenities, single-family it on apartment-like really homes as nice families enjoy type

Buck Horne

Okay. just got And or Thanks. you Chris call know something month-over-month, or January don't that metrics home else. the Maybe or data center on-demand whether like building points seems year-over-year, through quick springtime of follow-up. I just be of that. you be or to February incremental any lease how of to activity terms might share sort application, anyone some showings demand able in volume

Jack Corrigan

probably over ever November picked strongest February that December, January for don't demand had. handy, were our leasing up Novembers Decembers data and have but and in really has Yes, which I and we've

have we'll expecting February, the X,XXX net dropping. in, even a calls which is though our what coming January level home close keep I So, beyond and I and to was think was absorption, inventory

Buck Horne

Thanks right. guys. All

Dave Singelyn

Buck. Thanks

Operator

to question-and-answer the concludes you. Thank back That turn our session. comments. for closing call will now I management

Dave Singelyn

us We're Thank next excited a our today. call. you forward about with speaking for again and quarterly on good Have joining day. look you XXXX to

Operator

This conference. concludes today's Thank you.

disconnect you participation. at may lines Thank time. your this You for your

American Homes 4 Rent (AMH) 23 Feb 182017 Q4 Earnings call transcript