AMH - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the American Homes 4 Rent First Quarter 2019 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

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

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

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

Dave Singelyn

first to earnings morning Stephanie. quarter welcome our you, Thank Good XXXX and conference call.

annual X estate formative rental X leadership American is the industry. and single-family to in providing more will with its billion industry Today, at XX,XXX residents, revenue will and continued guidance and years. its housing private into Rent Wayne next forwarded industry. development and announcement In single-family Hughes' is XXX,XXX will his B. the CEO Wayne's continue next morning. to real in founded own nation's legend real those legacy team a until and Homes support his and would Wayne I'm success. grateful XXXX homes as We the properties Board what a served family's owns homes. annual vision, of as and of after in-house construction as Public of office nearly until leadership Wayne Wayne retirement for we Homes were today He that member of retail company Equity, the to Commercial California trustee the and and company. members X well founder in beginning week's rental $X but wish counsel, a are missed, of were making largest read a estate in XXXX. Board, American Hughes, quality also to Wayne's single-family trusts. in him first I and and American than retire XXXX, known meeting. begin, I will estate chapter leading XXXX, May homes, his that that vision the May. and single-family in Vegas a founded me one American Wayne an leader our homes the Tamara counsel Homes and this like instrumental the investment of I in Storage, Before of Rent. Trustees Rent acquiring daughter Hughes be of he and the Chairman rental idea years our remain Eight purchased during And concept Wayne Gustavson, Hawaii. the managing with Las the approached homes. real

before we of to additional our first couple a move Next, quarter on comments earnings.

Our Board of new declare first will annual and a next Chairman meeting and Trustees quarterly the the those week. meetings, will and announce name be board quarter meeting held distributions. At

to on in moving our I am Now, our earnings. quarter. with pleased first the results

Our are performed well, portfolio sheet programs track, our and balance investment our on strong. is

AMH I their always, As work to team focus. and of all like thank would hard for our members

we execution. As The to is and flexibility, on operational on consistent refine excellence, share, our up operational unit service. the our efforts per was platform superior to and I continued share a year. on last year. call, and and excellence, first we with basis built quarter four foundation Core financial customer accretive the of FFO from our XX.X% had mentioned cornerstones; start strong improve a operating strength last per Beginning of and growth, $X.XX business and

and rental We continued to see experience strong demand.

XX.X% XX.X%. year. March same-home first our was for average XX.X% for Our was last XXXX quarter XXst at to quarter And occupancy the days the compared first occupied

the our core Driven cost our the XX.X% same-home operations improve our to maintain discuss was solid including expenditures a are last to and to resident $XXX growth year's capitalized expansion will costs cost. basis cost of was of than XXXX, of total year. per quarter cost XX the maintenance XXXX quarter quarter over year a by lower revenue down quarter later year-over-year, this note home, preventative margin Please and maintain reduce points NOI first an our the first while in the less for call. details was home maintenance-related Our which expensed our program first a than Jack cost of higher designed first this further long-term on home, and includes that satisfaction.

into points the the strong along days a month up spreads average we nearly spring April X%. rental season, XX to maintain same-home head occupied leasing with XX.X%, for compared we XXXX, continued April As at of to of rate basis

portfolio. using homes design based features and building our strategically are homes second to are benefits that diversified designed We consistent on begins homes And and opportunity enhances cost t Our operational program. pleasing we rent Development, a value-engineered growth. for the accretive expertise durability cornerstone is customized plans for the lower development and and AMH include aesthetically This with these resident our level, of in-house feedback. to maintain. high new believe

currently are footprint XX of later the information for points building acquired more our capturing premium demand in are investment Program. through points call. existing our Builder We basis and our XXX and activity AMH on yields within homes high will basis approximately Jack on areas have for Development homes National

balance we have to on place on experience. adequate without growth the fourth will access call. to the fund recent fund need in to have Today, at and the third activities is commitment our Our sheet, Chris lifecycle later ample advantageous provide cost. year's Since the capital this is cornerstone activity of we cornerstone providing formation, sheet. liquidity our best-in-class balance our more to strong structure investment a maintained our full customer resident And financial the superior service capital the details markets. during capital most

increased rates with participation in We levels service. resident our satisfaction all of are high surveys areas in seeing

And in-house in continued results strong For be our example, Google up XX%. maintenance are levels and to survey our year-over-year. show excess have ratings satisfaction of

our program. in invested training team recurring a always through have We

we in strength. The positive added escalated issues. in fewer team the improvement resident resident first provide benefits of turnover have to members have efforts Since these of and areas We bench selected XXXX, our are rates. we Overall, XXX start trailing year XX-month season. well are our with are to basis turnover we the and improvement points over solid pleased positioned spring seen very in for leasing the believe quarter

guidance with for strong Our our We operational And cylinders fully all now ranges staffed call execute and ability to our year. to goals teams the with local management remain I'll leadership. consistently are the and over confident turn team's on our running Jack. on

Jack Corrigan

are a As start XXXX. strong Dave everyone. morning you, to with good we mentioned, off revenue and Thank growth, for Beginning Dave

first XXXX. our achieved occupied For the XX.X% in days basis X.X%, first percentage, monthly resulting Average quarter-over-quarter was quarter rent up a from of quarter, XX same-home realized average during in of same-home core portfolio increase points the revenues X.X%. up we

Turning operating to expenses.

largely were decreases offset property with XXXX taxes, by expenses. X.X% in operating R&M by which expenses increase was in expectations a up our property core in management and X.X% line part year-over-year, driven quarter turnover in First property

first slightly totaled plus capital including Our maintain to recurring R&M and XXXX down year. expenditures, home, last quarter a cost $XXX, from turnover cost

to continue retention this with and pressures, vacant was combined decrease by inventory levels. inflationary improved home driven we and expenditure reduced see last Although year's above-average

to start home higher a this to maintain as cost our includes year. a a In As maintenance year's strong expanded has summary, it cost year-over-year. of the preventative related reminder, program was operational

approximately positive spreads we last compared XX increase basis average laid of XX.X%, to on We're season carrying to April blended an of X.X%, compared into leasing rate the quarter. April rental same-home We with last the track year. points and up XX strong for of occupied spring momentum days basis year, expectations points last are with

for our Dave adds to mentioned, on provides growth. programs the focus our risk-adjusted are and increased Turning built-for-rent As opportunity that long-term near- This as for new economics. accretive and assets in demand growth, better initiative have we best

During through homes renovations, homes $XX including of of approximately we a XXX investment, the XXXX, totaling $XX first added quarter programs. added total were of for XXX these million. our million built-for-rent

$XXX with we homes rest to into from and For built-for-rent our about $XXX million on to of our take be expected million pipeline from other inventory, XXXX, remain channels. XX% track the to

our to additional previously additions noted, $XXX to Further, weighted an to be million as towards future into the million half delivery. pipeline development for year expect these back $XXX We of expect XXXX. we invest

the dispositions, Turning year held expect with end million which million reasons over returns. for of capital approximately continued the to $XXX to proceeds sense X,XXX it we At into course and for makes operational net homes and to generate better $XXX of of portfolio between we long-term prune next. recycle our and where had opportunities this the quarter, first strategically sale, we

During the proceeds net $XX first for sold XXX of million. homes quarter, we

turn the Chris. to call I Now will over

Chris Lau

current first Thanks and briefly balance and update on provide you our my results, Jack. capital guidance. activities, XXXX quarter markets our I'll today, sheet on operating our view In finally on with touch you comments

we the before up to I'd changes our GAAP results, like speed a new accounting lease with you in into few disclosure However, standard. on get bring to operating connection

in discussed of we the estate the with consistent at accounting this our year. adopted real standard quarter, lease the beginning rest industry, we new last As of

a larger As of rather are than our proportion standard a the new expense is primary management capitalized. the property leasing internal accounting primarily within included that under reminder, lease costs difference

metrics the been have non-GAAP year prior applicable on comparably to in quarter, lease last accounting supplemental indicated basis the presented new package information a reflect we conformed As standards.

lease existing like the our of new accounting part aware you two standard, changes notable are I'd as there GAAP of. that make disclosures to Additionally, to

GAAP rents and single-family and income revenues. property statement. First, items This line tenant properties, our single-family chargebacks previous from item current in a line now and will as of change be will fees other year from single revenue presented single-family rents our properties periods labeled prior within apply

expense bad for whereas remains supplemental previously purposes, Second, bad was financial will completely XXXX, expenses. our our package remain debt for expenses To bad be the back property I'll operating have the With line expense to bad revenues. on financial provide to item, unchanged Consistent and to other included now results. information existing disclosures, line GAAP breakout and the two and single-family note that, prior expense our or operating note, within bad debt GAAP expense these in within the which our for expense, XXXX, not applies however, reconciliations that non-GAAP revenue in reclassification item move applicable Of will supplemental will to statements only presented revenue our any single-family the clarify, continue GAAP the changes operating within disclosures rents with metrics. our revenues, be of debt with and included that impact new within current Please computation document. debt financial other on period. of on metrics did rents new debt components will property property statement our property GAAP

unit XXXX. a $X.XX share share million share. was For new per quarter On FFO adjusted $XX.X shareholders the $X.XX quarter first $X.XX income million or and income quarter XXXX. XXXX generated per share FFO FFO the last for of first compared XXXX, diluted standard. XXXX. attributable of for XXXX a first per the XXXX, to $XX.X compares of with of accounting or per in the same or quarter FFO of FFO million the net of $X.XX first million the the share share for basis, per quarter to we quarter $XX.X or and per $XX.X $XX.X $X.X for basis million unit $X.XX of for compared for and to $X.XX of million common Also pro year unit core and This FFO as compared unit first quarter as Adjusted to diluted of first FFO on first was the the quarter forma net to share lease was per

term maturity leaving total approximately program rate of interest billion corporate $XXX balance as of fund part X.X% to credit which with I'll of under end first with to are capital and we In you acquisitions to update years. of recent a completed XXXX outstanding XX.X X.X% quick XXXX. offering weighted and of of remaining bond Next, January, proceeds purposes. unsecured had the activity. $XXX $X portion were markets million million a repay second At sheet average quarter, net that our provide was a development senior in on of average in general the The well a we our our million net due revolving as debt used weighted unsecured notes, $XXX raising proceeds facility, and our

net Our other next EBITDA three to was a And times, to regular shares principal for X.X reminder, than amortization any to adjusted preferred as X.X years. and have was debt EBITDA times. debt debt we maturities the and don't adjusted

on terms cash at grow foundation We of $XXX our into platform we million quarter, first going approximately cash revolving continue $XXX sources fully solid and the external of the of undrawn. the accretively would need facility generate for recyclable in In we million credit of of translates had our end and was And retained capital without and about year, this capital million portfolio, funding annual the generate flow. of $XXX million balance our forward, notably that to extremely $XXX XXXX. any additional sheet, liquidity anticipate program distribution an all unrestricted which

XXXX our Finally, view nearly leaving was to year quarter fronts, results on all guidance, full operational unchanged. turning the our well first executed on

same-home throughout are the our us, both of are progress call to communicated which page you XX remarks, core with we supplemental. the questions. leasing and with seasons we of detailed we'll on open are our XXXX and portfolio our turnover now maintaining And to year. we'll Operator? provide FFO As year the key still concludes previously your full that And ahead and for ranges continue prepared guidance updates as that, performance,

Operator

Thank you.

Jason We conducting with Green a Our will first Evercore. comes [Operator Please proceed now line question-and-answer with question. question Instructions] your session. be the from of

Jason Green

Out you for with are Good morning. A of the say on-balance that how is of much acquisitions question you development in development. on in XX% sheet guys of development, versus partnership homebuilders?

Jack Corrigan

homes X,XXX be I newbuild. would we say to that are of expect through the will them through approximate sheet of balance X,XXX our Development. come AMH

Jason Green

Okay. rent focused And markets what to expand build are you the on is geographically, then on? to able

Jack Corrigan

be the Las the Jacksonville, of one. on we've might Florida the Nashville on Atlanta, Lake focused most then several market. Vegas. I West ones growing Seattle, all Coast, Coast, It's Charlotte, markets, in City, Boise, been leaving the Salt on out And East

that So, I covers think it.

Jason Green

last one me. then And Okay. for

on premium developments. basis getting you're XXX point You the said

morning, the this to doing that are costs number? construction Given additional report strong what jobs

Jack Corrigan

come materials last down have spiked has nine for number actually over to back months. and now come the costs six then while down. The Construction a of

labor probably of terms in the to are they X% costs, X% increasing range. In

Jason Green

you. Okay. Thank

Dave Singelyn

Thanks Jason.

Operator

Thank you.

next line of Joseph comes Citi. question. question with Our the your with Please from Nick proceed

Nick Joseph

of terms Thanks. far build-out the loaded, Maybe I timing? and back-end the on budget of overall going so a deliveries versus terms delivery how's expectations, in know up are -- that. but cost of just lot the following in

Jack Corrigan

Yes.

build being we're grow of grow building, budgeted. underestimated long-term platform then we horizontal build, the originally of as allocated [technical cost the houses the number line We issue. smaller probably number a we're over and of terms in with that right the In difficulty] we direct vertical a and what

probably And at to X.X% be So, X% X.X% at about we're somewhere running we'll soft I deliveries, right think costs. once we're of and X%. the cadence the in

Nick Joseph

Thanks. far? And so delivery expected timing

Jack Corrigan

Yes, of but a close rain, little because expected. of we the some slower what pretty to

Nick Joseph

it cost-driven? the resident portfolio? the are rest perspective, ones more of your lease-up delivered In you Thanks. demand the From margin-driven? And a it yields. versus yield. Or the about walked how's rent from Is the words, other more going you and premium already is talked through stabilized that

Jack Corrigan

on pushing above we're not but It's at we're slightly rent but pro leasing the both, up. general, forma our really in rents or in initial rents,

some think it the for I have up future. we'll So, in room moving

Nick Joseph

Thanks.

Operator

Thank you.

Wu the Bank Our of next question comes of Shirley from proceed of line Merrill Lynch. Please America your question. with

Shirley Wu

Thanks Good morning question. for guys. taking the

this little So on and preventative us how give you a incremental for Could much the bit you home? is mentioned cost, slightly higher being cost what's done for measures. year on

Jack Corrigan

or X the I XXXX, maintenance exterior that do XX% is decks of some I'll program. type what it maintenance. is is that's Well, when talk trim, which initiated let of call staining our the to program. in landscaping including would really the late say, Back I There's maintenance house and numbers. that Phase of the unoccupied. homes, painting can Chris occupied and give just in-house And exterior exterior XX% we other I'll And basically, about thing. we and involved of

Chris Lau

going our about or kind program running see full full then quantification the we kind comments CapEx Chris. some on increase, if is of quarter, year quarter, on last This X% into X% to best expecting Probably item. to is X% of And the majority talk last close we're that you maintain to could way the we of if regular so. to cost preventative back basis a increase. a And go give year on of of line of our just basis, I maintenance a be to you, going kind

squeeze can maintenance related see program. to preventative So, difference components you the as and

Shirley Wu

it. Got

that little And the has started any you perhaps Could few you've learned been been program. for a And economics, so in there things efficiencies? since talk inception? build change about rent, it's so since a quarters you

Jack Corrigan

learned have staircase. an walk-in hookups issue far moving with wider we into closets. the few building so little people sturdy if in is efficient certainly We they're things. whole water, doors there that a moving we're damage as the floor, we've doesn't and ground with through staircases. the wider as put water And because of on you that gotten So, the house. And out One, a keeping more less all are houses, it more hurt if

Dave Singelyn

its Dave. Shirley,

the have reducing immediate than I more construction have current benefits things maintain, in learned in they we are in the cost going reduction think do our costs. future to to

So, mentioning quicker to efficiently properties and more to going the the are that have and things allow maintenance. us turn is Jack less

So, in materials benefit really the wider doors, the quality will different all future. the

Shirley Wu

Got it. Thanks for the color.

Operator

you. Thank

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

John Pawlowski

Thanks.

longer On $XXX is investment to still to the build period, million the over target? $XXX a rent million aggregate the

Dave Singelyn

Yes, make really that sure split to is, is that as what components. that This into clarity correct. is two To have we is Dave. that

have So, the process some $XXX we'll the million going we're $XXX into year that XXX those -- this million million $XXX But to is have investment $XXX target million $XXX to delivered will numbers, still range. to million in future years construction $XXX deliveries be of and of to million. in --

Chris Lau

$XXX over the to still Okay. And entitled? that that $XXX million are again all already million, is accurate parcels land it

Dave Singelyn

Jack?

Jack Corrigan

they're acquired, time the By they're entitled.

but entitled. may on under and contract we go until land won't So, it's close --

Dave Singelyn

on is Everything our sheet entitled. balance

John Pawlowski

are of to it? of development part million laying land, what $XXX sewer that lines, roads, cultivating that and of the you And land doing laying $XXX Okay. percentage million,

Dave Singelyn

but that number two-thirds. be exactly, in would somewhere Probably don't guess my know I best -- the

John Pawlowski

operations. to Okay. for me, Last one turning

employee going year last turn year how in as times a ago? issues leasing season the unfolds, unfold retention versus with field the the to Given are

Jack Corrigan

expect to would I Well, improve. them

we again. do built team we've over to the we that in one we what things have the call send some teams of until out is done turnover stabilized redundancy, we the take have it's One have in to ability area, spot if that so

John Pawlowski

Thank you.

Dave Singelyn

the have we turn And other thing occupancy. just a John, going benefit strong times to is that's the fact

We we shape have the better very retention continued statistics good And leasing turns. in to leading for be season. less should

John Pawlowski

Thanks. Okay.

Operator

you. Thank

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

Hardik Goel

that's builders build question. I'd your how kind my just guys do investment underwriting? are land please How your easy does are for color markets cadence it Thanks compete doing rent, the how I with in-house on investment many, in own. probably or you developed to taking those guys. The finding some have you the years? one difficult had you that of to Hey with on specifically attractive give in it. to that underwriting the over acquire on compete cost could that, theirs? that you many appreciate efficiencies And If your of

Jack Corrigan

are or Yes, easier lots, I were and times six builders the gotten harder so. I the over -- last developed although mean finding months that's think having

changing. want other wall As because building efficiencies, the efficient actually in this we're we specs spec, is as have -- or owners our -- we orders. coming far have our aren't or and change more saying; think don't don't option. this per flooring It's we They this

we we're as more a efficient than actually So national homebuilders. builder the think

Dave Singelyn

Hardik, its Dave.

economic couple Let same today, is finished more the us of going the know have lots me things. the and considerations a and don't We through a the being cycles. One with us. business. we that exit homebuilders property side add of they this for seeing actually goes as variable we're from not own Today, that's of -- available who's do to is some to

benefit the and no sales over of cost the we we as our a On structure. have marketing have economics, homebuilders, things the one in component

finished costs do. we are for that favorable have don't cost product a they our theirs more because all the component So, than

Hardik Goel

capital No, and have appreciate that. of that's cost I you that advantage? helpful also a you say Would

Dave Singelyn

way still I of But as well. outlined would. of have think cost question was I Yes, we completion I advantage on an think the the the the building; there

different risk fact with It capital, are a assets, very, homebuilder. than investment-grade our and of profile a assets cost most the that yes. revenue-producing of is very our Our

Hardik Goel

Yes, operations, question on my original there. I you the question answered it. mean Got

Dave Singelyn

you, Hardik. Thank

Operator

you. Thank

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

Ryan Gilbert

Hey thanks guys.

store XXXX Just on same the guidance. revenue

But off end leasing looks as April came the it on to hold strong. you of spring first any the in think leasing high number range said the sense statistics changes I makes at making season. quarter before today, the

would guide where of of composition that the So, today? you would over Or market? changes the or what are about? sit guide you the the see you to store market should guess same would that be need any in see course end there to the the the need in I low XXXX of we the portfolio get you midpoint the to what in of So, even thinking to

Dave Singelyn

its Dave. Ryan

with I It think trajectory. you've kind almost the it's first guidance a we're We the guidance, in lot further of had I within those Jack on range. little is we left our question. get question very very but answered is today, quarter. it. into and number, year, review as continue in we'll as of And indicated, April early XXXX a comfortable have maintaining -- ranges. a be the we We, a down year. And ranges. good a comments same we'll we're leasing not But the season making continuing the And the to is that and

Chris Lau

quarter. point the out thing to other on Chris, just it's one Ryan And

in the you As year. one basis quarter mind move we pickup bear will in composition about normalize begin lower occupied XX of to days throughout on average last of that more the points occupancy out as of think revenue -- XQ our growth, is which year, that of

So, a keep on quarterly as mind that in well. basis

Ryan Gilbert

course. of Sure,

result. which very April your is as up points average strong well, Although were occupied basis days XX

Chris Lau

right. You're

Ryan Gilbert

Was in -- did decline to April? turnover that continue

Jack Corrigan

than but not It was last slightly materially. year, lower

Ryan Gilbert

numbers the Is those management the some in due higher reductions. lower you much or of was can how decline property first expenses to Okay. the And and turnover more and quarter versus any then way and elevated last in there occupancy, lapping just of just year? weigh maintenance one quantify on repairs

Chris Lau

I that year. in in in effect much turn some due out year the It's point or is of it about tough it last the back bifurcate quarter investment to you talked that last months to of $X of kind so numbers you, can first the we ran I through year, we cosmetic tell X to this we of how call about April. can had know million the

directionally that in use a of back kind but you perfect So, the numbers, amount. can not it's

Jack Corrigan

where Ryan, had but it just to what because have line, our to turnover reiterate not I benefit; homes. coming expense had hit revenue mean to you only our you is quarters were a We've line said. just a And down. It don't turnovers to benefit you is on. right the the refresh nine

both well are going And that's we very, as that very top as important and on benefit a -- so the expense topline controls seeing forward. and should us -- trend that

Ryan Gilbert

very great. much. Thanks Okay,

Dave Singelyn

Ryan. Thanks

Operator

Thank you.

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

Douglas Harter

Thanks.

Just that touching improvement at occupancy you're can about just this more April, for you on the pushing rent versus balancing talk seen in how occupancy you've point?

Jack Corrigan

a then, try have balance. the renewals; we in think vacant. good above right I in Yes, we when pretty rents -- and market We're to XX% inflation re-lease And maybe something terms slightly of we're get range. we been that's

We haven't seen a material decline in the marketing period.

period of a the taking where more just I we're also rates little raise we because it the into demand. can we're of moving But kind think So, right. bit

to X%. something would very So, years rates. I about of strong And at expect prior re-leasing still terms renewal rates similar are in

Dave Singelyn

Doug, And it's Dave.

indicated We and evidenced and earlier, the the thing. leased impact retention impact now. mentioned there's topline than between Jack revenues the and getting getting impacts And we pushing balance X% because retention I Let me just add inflationary we're and negatively numbers one as may area. and things indicated are will higher not -- as quarter the as going the at we by be expenses. did very But the that little X%. the management, measured to it a in a than expense bit But first line. rate our we both these impact are we April; in are And as more

Douglas Harter

Thank Great. that for you answer.

Operator

Thank you.

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

Jade Rahmani

sales? much. home there you retention home comment a move-outs can been trends. you lower very if in bias rates on in comment on I ago? based see slowdown any Thanks than change if wanted you demand or that's could purchase to Has year

Dave Singelyn

Jack, you want to take?

Jack Corrigan

Yes, the -- year lower than it be slightly ago. a appears to

to think as, maybe high to a buying of high as at were to closer as our related XX%, up as one point, I XX% now. got XX% It's even move-outs house. we

that So, that of think rest be would I the Repeat helping question. is. your it with retention. may

Jade Rahmani

it. No, I that was think

If home you're market demand slowdown and seeing demand in the market purchase in trends, the on housing that any acceleration based strengthening seen. or the we've

Jack Corrigan

Yes, but selling houses, other we're pretty on the they're of and fast. disposing hand,

at the a buy not on -- really demand them the sure that housing lot has or and side or rent So the list subsided. better. I'm for side of

Jade Rahmani

of And or average that wanted strategically changes. Okay. for ask how you're calling you build-to-rent activist Obviously, and has Residential company the that changes if Front a older There's Yard stock yours. most just on consider the strategic calculation. increased than strategy comment an about are large in M&A, portfolios

just wondering build rent. consider if how M&A to So, relative you to

Dave Singelyn

one of just where to given channel impact as M&A. and the think a our an built-for-rent It's M&A it, a some is Jade, acquire. I in that we really the build-to-rent it. But of are right don't But years And match year the different challenging us a ago, that we at price have assets think plays we right opportunity entertain mentioned past, Dave. If would a property. -- are of there a many. target the it's to trading ago, is price, as a don't has growth little into type and are tenant more we quality two that than takes no capital for, looking consider have will calculus. it's And out at we time. target the the for for the which us do to I component us. is a there portfolios whether

Jade Rahmani

the on As the could a your newer follow-up give and margin existing you portfolio? homes differential NOI color between

Jack Corrigan

talking if That property a tax in first the in national. probably same about Because in be depends higher have newer same the margin. maintenance years you're homes margin. property house tax bought. a going The But lower have the expenses little that rate, to homes your you should NOI on it area, than will XX really rate higher on are would a we

Dave Singelyn

a margins bit pretty is are definitely rest The higher. are driven little driven and maintenance lower consistent. of higher. items Yes. of line It's the It rent The by cost. premium

Jade Rahmani

much. very Thanks

Operator

Thank you.

with Please Stanley. line question. Our next Ronald from question your comes the of Kamdem of Morgan proceed

Ronald Kamdem

time. Hey thanks for the

ones. quick of couple a Just

maybe just look how about terms we the about that And with talk about thinking to was guys you it low-hanging be you the for as one thinking the revenue first coming should in of ancillary company to forward could fruit? are maybe something The through? opportunity

Dave Singelyn

that additional pieces. couple is seen a -- getting On of our before. rent There haven't through. ancillary revenue, there things today, there's running We're some are that revenue we is We the additional a opportunities. few test

the ancillary going revenue is That's of the bit the -- driver so -- lion's but the driver. rent. revenue little That's primary the It's there, still annuity is component. revenue be to rent year of going And to not of it's going there's line share the line. be be out your the a to

Ronald Kamdem

company? the can Maybe you maybe a That's technology little talk guys front. just sort How is there little about great, a for that's Are the think you you that And see mobile the helpful. bit are or technological more any piling can efficiencies on progressing? apps sort that I bit self-guided then of of tours.

Jack Corrigan

Yes, technology from been is It our has key day a success. one. to

homes you're manage cannot technology. as unless leveraging of the XX,XXX personnel the -- You and the with we infrastructure number have in

enhancing continually are the technology. We

calls over improvements in. or improving the our technology programs logistics last and maintenance year the and have processes coming during We In XXXX. intake in-house maintenance side,

So, still leads us years With area new more continued to that more is efficient that better in and benefit enhancements making that homebuilding, a which us, that there as execution on XXXX and process maintenance. efficient well. execution, respect later relatively should to in was for

Ronald Kamdem

back. more take you just could better year-to-date, would are any I Great. you that of you a maybe some be to you're are Thanks. markets if trying or be markets that performance there look market could, in? to Last the of you are of that perform if any follow-up sort what question And is the if far what have would expected, get may than so for market me lagging? presence where reduce? are And markets maybe some at looking was it And

Jack Corrigan

out there. gotten Boise, we're about Phoenix, -- strong that getting developed of is re-leasing the markets, and is land we're out western homes really are Oklahoma getting Seattle, as of I of we've with very Yes, lot In And City, they we Las Jack. XXX acquiring of, rates and had I tertiary we're biggest where A ones only far Lake this the to really are stay out market markets the outperforming. markets highly as City build we getting Vegas, with think occupied. planning Salt and them think all grow. markets

Chris Lau

exiting of if Ron, disposing supplemental. we're And you on exiting Page of get want supplementary. Christi, of Central out we're that couple it the and Georgia, general of the City Valley see Oklahoma the behind can you But of be XX markets a that we're market in the out detail there Corpus on are the the page small all of, Augusta, you can or would of, XX California. properties of

Ronald Kamdem

much so Thanks guys.

Operator

you. Thank

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

Buck Horne

Hey thanks. morning. Good

the from last what or Kind Maybe the you other one those AMH challenges new the the here. you're locations, existing On with metric. locations the portfolio whether average building portfolio? some existing On characterize managing distance how Development, are in? of or would synergies versus it's locations

Jack Corrigan

right of We're building the not our into outskirts going city. We're footprint. on the

really, difficulties we initial a complex of it's for having of So is a hybrid for cadence least it's at and right the only marketing. when seen developments the absorption. and the of kind between larger large up; sale built our apartment kind we've that regular deliveries And

on So, that's developments I have but that we deliveries up. delivered. on better as and our probably absorbed a a leasing little cadence their adapt now get are we're cadence larger out had planning there, we've that they bit think doing, so figured and our what to We

Dave Singelyn

They that And right inside markets of developments. are on homes It's Dave. we into you developments are many inside are to the We're them contiguous area footprint. our in We're very the core well. our where the recently be finding edge the going may market, at that new small but of very, not purchased new doing markets. have

So, our they markets. really in are

not we're from areas in standpoint. new building that any So,

Buck Horne

what Are stabilized the of a disposition seeing Thank those How on by your portfolio in are on terms kind rate the seeing buyer helpful. at Great, cap here interest? interest the pipeline, buyers you the are that's they you. very homes of And assets? in are you looking in pricing market? these What basis? homes them are --

Jack Corrigan

we're occupied. that those portfolio then as then And through natural to definitely they're have a traditional are buyers. MLS buyers -- about we through And attrition, contract when seeing homes. marketing small is biggest they just become our XXX we We're of one we think channels. seeing under vacant market And I

Buck Horne

are thing? rate per is price? kind there a it And is a of price Or of unit looking they more cap range --

Jack Corrigan

rate It's and of cap value. a market combination

Buck Horne

All right. Thanks guys.

Dave Singelyn

Buck. Thanks

Operator

you. Thank

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

Unidentified Analyst

Good that is This how out being today pushback questions morning back tenants? you You X%-ish few and generally a curious quoted Alex Are sent about rate much notices Drew. are receiving from just on bonds? for renewal

Jack Corrigan

pretty greater get or property we that Well, pushback some explain going And at renewal agents good are increasing questioning. we property values rates have level, that up. tax than and are

overall, achieve go need able if to and we off little back than we're probably bit. out So, to that. higher We'll slightly X% a

Unidentified Analyst

helpful. that's it, Got

trend? Or should industry growth that's in trend all to more it buying and HOA certain side, expect you upward kind develop Curious to quite As driven fees expense that looks like broader continue? being please markets? nicer is are newer, a by of homes neighborhood, we continue significantly. the if On of

Jack Corrigan

question Yes, answer. kind process. I process. very manual experienced I earlier. That's inefficiencies in that been a a prepared expecting little an We've HOA of some was our

process. our different XX,XXX was fairly normal issue material the automation We our through late prior and And we're different the structure. of levels inefficient, not it's of have communicating. very of penalties. been -- ways It's above homeowner in And in with an fees of -- addressing resulting process a we process component that deal cost anyway, associations have the the of

through is accounts, we all be some reconciling XXXX. more and through we're of but to automated once impact We the into efficient going XXXX, the it expect see continued to expect process much

Dave Singelyn

from out we technology out it's And significant the to would year Drew, now. they to as rolls technology higher throughout prior goes technology be -- Dave. later that The the that of would it a costs than area technology. Yes, on right year. question this to admittedly It one we back assists are see little in. It's us should that if benefits rolls see

So, that's where we are on that.

Unidentified Analyst

for on Are include Chris balance then Obviously, guys guys the And land well-capitalized. range? times your But times one a does X.X you today good forward? is Understood. seven-ish leverage comfortable? Where on you're that preferred run when rate last you question sheet. going

Chris Lau

Very much so.

is then one preferred half including basis. debt times is our two a net EBITDA, to on debt kind we're on seven one As a preferred, below. five kind net before, half zone EBITDA laid a basis on out of times we to the have internal a including On And below. targets and a or comfort of debt and debt of kind a and or it's shares

the we within like see. to So, we're comfortably range that

Unidentified Analyst

for Thanks Great. my taking questions.

Operator

Thank you.

the of for of today's the session We you have your reached end participation. the as conclusion well question-and-answer Thank as call.

a You and may this your time lines have wonderful disconnect at day.

American Homes 4 Rent (AMH) 3 May 192018 Q1 Earnings call transcript