Invitation Homes (INVH) 15 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Greg Van Winkle	IR
Frederick Tuomi	President, CEO & Director
Charles Young	Former COO, Starwood Waypoint Homes
Ernest Freedman	EVP & CFO
Dallas Tanner	EVP & CIO
Juan Sanabria	Bank of America Merrill Lynch
Douglas Harter	Credit Suisse
Dennis McGill	Zelman & Associates
Vincent Chao	Deutsche Bank
Jade Rahmani	KBW
John Pawlowski	Green Street Advisors
Ryan Gilbert	BTIG
Donald Camden	Morgan Stanley
Wesley Golladay	RBC Capital Markets
Anthony Paolone	JPMorgan Chase & Co.

Call transcript

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Operator

Greetings, and welcome to the Invitation Homes First Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Greg Van Winkle, Senior Director of Investor Relations. Please go ahead.

Greg Van Winkle

you. Thank thank conference us call. and quarter our for earnings XXXX you morning, for joining first Good Officer; Operating On Fred Investment Officer; Financial Tuomi, call Officer. Chief Young, today's from Executive Ernie Invitation Freedman, Tanner, and Dallas Officer; Homes are Charles Chief Chief Chief and today's I'd release call. everyone earnings point we which to our first information, like XXXX may quarter to press supplemental reference on found our can be on website www.invh.com. document Relations of the This section at Investor this liquidity any during may you of nonhistorical that differ resources to certain statements could from uncertainties subject I'd to include and indicated risks are also like statements. relating that to made forward-looking materially those cause to inform our such statements business, and other call future outcomes performance actual results and in which financial statements, results, capital or of We risks we the annual in report other our with Form uncertainties time the XXXX and filings XX-K SEC from and time. make described on some to these does statements Homes update forward-looking disclaims so. do and not any to Invitation obligation expressly

During may certain discuss we also non-GAAP measures. financial call, this

reconciliations find including these over supplemental in Tuomi. turn to earnings which Relations Chief Officer, Investor and additional and regarding on Executive new call section most available these Fred GAAP the non-GAAP are information I'll our release with measures, our of measures, website. information, can comparable the measures You the of now our President

Frederick Tuomi

Greg, morning, Thank everyone. good and you,

but I for to ability first, our about We are shareholders. think long-term Homes understand like eager to observations you create value to important Invitation I'd update to results, a latest are few our share on high-level our that and

locations. believe and rental our at NOI below of and XX% extremely markets, REIT grow FFO household are us be home for this than helps year. seem almost to is to for demand XXXX. across growth We believe X% high-growth the growth remain formation since X% XXXX In rate this single-family the forecast And of and fundamentals First, remained top be dynamics the to favorable average. to the our supply especially unique, the achieve historical of rate strong. forecasted sector to single-family of a improving U.S. our position same-store very XX% business, The we completions the business average greater near to continue core

the is rentals. demographics increasingly Beyond strong align reach this United support sector stage homes And interest with to believe millennial meaning single-family and have although rising impact should years of year, our in positive should years, rental to head will needs for demand the average that in on it's The States become tax single-family is product. generation and to come. of just XX where they reform impactful is the household rates our further the life it starting early, age a many our possible

In fact, home first quarter the our first XXXX of to to from XXXX, XX%. quarter move-outs X.X% turnover the year-over-year primarily declined decrease in and of in to X.X% driven XX.X% by ownership from

future single-family due especially of side, materials cost the of markets. the in rising to We for foreseeable to is likely true muted believe our supply the is On remain this and construction new labor. value the land think we well-located that and homes of

our estate. point is real portfolio to second we the residential in make that most The want believe one I desirable is of

is United have Western a revenue XX% high unique derived are the States advantage quality of from to and growth, and Florida. locations Our high It infill.

our over market, families. employment density scale best-in-class locations transportation average the selected homes We be schools to is critical and unmatched our And to X,XXX X centers, we important proximity are most on residents high corridors, and have good in to to per things with homes carefully that tell operating and their submarkets efficiencies. with value have us

all parts homeownership cycle. allow are for rates. built and Relatively to Single-family increases. if rental with of us rise rates short-term our of is typically that coincides demand optimize the interest well-positioned continue rising quickly cost Third, homes the to strong in the environment leases interest macroeconomic business revenue

the us homes real enable our to estate exceptional of housing remain commit liquid provide to for on a limited. opportunity to neighborhood our earn with part provide of homes. update the discover and Invitation of more desirable field all higher ways our short, Last us our asset represent on demand world residents homeowners. the could We top-notch, and levels a brief to in the improve in service drive and success interact choice. to quality otherwise to but further that not of are our thrive thank least, is both families residents. and the residents our In It for increase our our people making loyalty Homes people teams, I'll our might experience every as our track of Directors the addition, of investors exist class our the is XXXX. neighborhoods to an our live place now that start people I We associates to in not will And want options most that our our to optimize and of a plan to could to of their In traditional call operations. families are year. and it think home. that in we associates Board remain continue deliver We our value to which day. from With we great for corporate that,

the our survey for growth produce X.X% track new our of our expectation. model line and high higher to And support we the to operating in to second field committed unified shareholders. deliver begin integration, remain schedule. of with benefits delivery service Development in model half continue residents, expect and was is of outlook One-time to operating first XXXX. scores remainder plan positive. contributed overall our to systems first to the On on we expense platform expenses and growth in remains the Our with revenue quarter rollout unique on technology our of to of however, the the satisfaction we associates merger the resident ProCare quarter, continues the

Our the track dispositions approximately recycling of investment this quarter. management and acquisitions first in with with $XX plan million million capital $XX team remains on of

We have more our ramped also returns. the up investment deliver the enhanced desire they residents value of at we select in CapEx risk-adjusted to opportunities features same time, enhancing

since summary, cost. have in sheet, we assets, lot balance continue and our reduce According of Case SWAT in debt the we improve floating Shiller, investment-grade progressing assets future with half term. to the markets the in exposure portfolio, the Homes. in scale XXXX, already is long appreciate rental profile, increase maturity way the be a through high than our and On and near excited about the XXXX transactions consider a continue single-family home rate almost already unencumbered of today, continue X% this to and business lower believe accomplished per embedded homes our compelling refinancings you both of value first to the Invitation prices we've towards In we more overall buy borrowing no year. our investments growth in quality there When to in to

on in Chief our detail that, our So as first results Young, quarter more operating the now Operating Officer, will provide trends. well the with as Charles current

Charles Young

Thank you, Fred.

growth with of solid quarter the in the another strong way enjoy fundamentals We paveed quarter first XXXX. continue of to for

damage A platform solid forward NOI field and well is first a operating according to our growth operations items remained revenues higher-than-normal core to time expense X% XX.X%. in in Same-store growth efficient, of the nature quarter. atypical one-time with which team same-store It's grew taking to year-over-year, associates expense X.X%, been expectations. that I'll even this our working in to second to and quarter in at smoothly and walking of primarily rental to attributable contributor them was hurricane. now service line resulted routine half merger at been across to Service X.X% details average plan. Same-store commitment increase to of contributed otherwise key of XXXX was XXXX some hurricane the increase the with you integration. a first strong with in timing operating the to quarter to fourth higher average in rate both quarter through for expenses. respect revenue the of in XXXX we that truly like was the occupancy prioritized request Our action, related driven pushing next maintenance the expense, considering elevated successful in year weather watch unified completing running delay and XXXX our service operations their to when maintenance integration first same level noncritical spend a keep result core making repair empower to request non-storm-related of I the the of grew routine in into and the our The XXXX. I'd of XXXX in year time resolved Harsher look impacted first X.X% have would teams progresses an XXXX and more to that quarter also core performance. XXXX. quarter the compared impressive were markets by thank service continued quarter in last resident repair by winter first September

on quarter. renewals increased which points April leasing of XX rent a X.X% lease us in peak position I'm to move mid-X% in have first in the to executed we represented engine XX.X% April our in remained seeing rent quarter, markets same I'll XXXX, remained leases first accelerated great into over increasing Renewals Same-store of the trends. renewals Northern Western rent X/X believe quarter find course and in with highly blended Next, were rent for Phoenix our testament accelerating year-over-year continue service quarter high was we that the to for season. peak in in growth the each up continue Renewals occupancy in again range residents of also enter X.X%, cover in growth as lead continue strong at growth After X.X%. first-class been up X%. Average resulting XXXX excellent the we growth rent growth the lease time, way sequentially we're expect turnover markets lease quality at to first X%. locations. and the was the desirable blended was leasing growth quarter. quoted lower as and as Southern the and puts growth X.X%, value Seattle further an April in accelerating also perspective happy new season. and expected XXXX. to U.S. the strongest April the strong our to X.X%, Main a momentum quarter solid, growth from California, we homes At as month new first in report basis a first from we Same-store almost to growth. XXXX, even of new

Finally, a enhancing on resident words we're our experience. how few

installed Our operate to prefer high smart to us members more out also team enhance the total schools, lifestyle great resident XX,XXX. the committed operations first efficiency opportunity and we home and model. our to bringing scores residents achieving almost the allows residents our rolling jobs innovate their enables neighborhoods remain technology in service. continue Smart We're service additional proprietary the resident even as provide convenient to X,XXX with of good they enjoy fashion. XXXX, to and in providing homes, and a and the quarter to management with we close their homes In more greater we to ProCare continue with an to outstanding satisfaction property home and leasing energy-efficient technology live every

I'm takes we integration lifestyle leasing more next this what enhancements roll provide that to to our of call I the year, we'll to we now tape better. Financial of as have make proud will we of over our Freedman. out residents will later our field delivered move platform far so the even the As our working look experience and forward. enhancing forward Chief to with members team Officer, all Ernie I the residents continue turn to

Ernest Freedman

changes in Today, portfolio sheet I'll market for for and the financial first quarter quarter, Thank activity you, balance our the capital productivity. supplemental we'll activity; cover disclosures. topics, following with portfolio and start first the Charles. results

XX,XXX capital continue of per to first enhance homes average $XX of I'll further to an quarter on XXXX, XXX recycle homes an to for X,XXX quality As home million $XX portfolio, homes approximately to of cost $XXX,XXX. We total count turn or bought average in we capital at activity. we market. for balance our XX decreased an sold and average the And on the basis price our markets estimated million sheet at $XXX,XXX. by disposition XXX update now an

favorable February, with proceeds Pro principal the average was weighted and highly assets, all toward and debt in working maturing to committed reduce billion In of this LIBOR all pool LIBOR billion XX% of profile Net seven-year secured total the of markets issuance, to In in advantage for $X.X results $X.X by by $XXX funds to to billion the extended the refinancing, $XXX cost used in on of our funds Debt homes $XX net of X remain full amount closed of leverage years, since unencumbered of that's securitization expense combined hand closed a interest and rating. year-to-date XX. of proceeds annualized May borrowing total approximately a we run maturities. an to X.X increase basis. an a debt our with communicated, expected neutral rate is improve we our principal transactions decrease amount previously beginning May, of X-year investment-grade of plus secured million. we increased our at our debt cash to February basis. year. XXXX. refinancing We securitization and As remain million on latest net a we of maturity took we on $X repay costs, XXXX remaining the unencumbered used plus repay We the another million forma of cost number by and

that In XX% share was core through capital or of in reconciliation The to undrawn our I'll to expense end. through FFO agreements net fixed AFFO will our billion to be we of FFO growth capacity X.X% briefly and $X.X forward XXXX addition increase in touch After unrestricted subsequent XXXX XX.X% percentage to our loss quarter increased addition to in refinancings, at quarter based $X.XX. and and for cash our Supplemental now facility. on entered rate XXX% is beginning on these the will $X.XX primary a first quarter provides respectively, X credit reported share. Schedule per combination Core the and per liquidity our giving years first year-over-year, the to on $X.X results. current and and January of end a debt had interest into from FFO, to of driver the to GAAP interest lower effect We NOI final financial between of increase AFFO. swap billion XX%. swaps XXXX It debt's and swapped for structure, rate the fixed our maturities. quarter over

of run As mainly we an of cost have basis, million merger which today, earned duplicate approximately $X due $XX of synergies on compensation expense, rate million an to includes share-based synergies. annualized

continue year cover XX Therefore, achievement platform the to we be materially to expect our I best thing of field in both organizations. of last increase do legacy disclosures. will the amount during NOI related next not to that supplemental an operating our the teams and later is The days. our enhanced the corporate majority realized synergies after expect combines We implementation this of for changes

same-store part Starwood noted consider were last updated required merger with call, of that our our of homes As our we definition as to we in Waypoint.

provides March concerning additional Supplemental supplemental XXXX. pool of detail information Our we on XX,XXX homes XX, are our of total capital our providing On same-store portfolio Schedule expenditures. X, reporting as

acquisition recurring to You homes we initial up part bring will quality CapEx of homes. and standards expenditure the the of that subscription our invest basis capital our CapEx to notice maintain upon to to been invest two have the our renovation our categories for in of business them ongoing in and that of

CapEx, homes make investment risk-adjusted the Value third stabilized in more also introduced. to providing we we've value enhance are on CapEx returns. enhancing enhancing which bucket, We is recently detail

upgraded you living in of an is higher we've or accomplished an an the day, every associates see and to best-in-class our resident what the total to that excited XXXX, CapEx of fit portfolio in much remarks, from advantage, the types for his finish CapEx bring and team residents. the confident move component are opportunity as opening questions? a FFO deduct seeking our only continue data For excited our further top-notch of line already in both example, and mentioned included making is maintain. energy AFFO. close they reiterating for that, we our and Invitation at Fundamentals upward we remained in Fred to for of please the CapEx I'll a service an It teams to up future. value Homes the kitchen us by to would in allocation pay amenities. portion cost forward that to arrive and premium thanks operator, and and area will core to to With Recurring tells expand residents we these XXXX, might elevate of strong us open and be shareholders

Operator

[Operator Instructions].

America. comes Bank of first Juan from The from Sanabria question

Juan Sanabria

Ernie, expenses I expected. higher side more quantify Can be just for the same-store And given hoping exposure? taxes was you cost on sway just that their the the that that? would portfolio help was in than us you

Ernest Freedman

provide the to of from that more some The hurricane. happy items IH I'm by impact disclosed from expense $XXX,XXX. Fort China, one-time net actually, the the weren't the supplemental clarification the we to in exposure actually, the year-over-year. and surprised Sure, with came regards was we And about aside growth X.X%

of would expense been have X.X%. growth So those without

if disclosed behind QX X.X% great XXXX with triggering are and California. you year-over-year, Waypoint will for we number, XX%, Starwood year own pretty homes events And comp XX,XXX taxes growth Prop in for other Invitation release. the last The are news driver adjustment The know that could which in was real and we quarter late that until a is in the specially in culprit the increases were Schedule. Texas we is the in year's of year state good it. which merger as But valuation going almost XX, wasn't statutorily for quarter forward, California last second Homes Prop IPO the tax book not XX high you California this Real a taxes. XX earnings is estate difficult reassessments. Prop our as expense in estate Supplemental second was for And in both February and tax our disclosed up

both California well early in we year Without Starwood in noise higher from as merger later Waypoint So the X.X% from for year-over-year year. Prop the 'XX, would impact that QX expectation the it's the as real XX. been taxes in had from the the prior to taxes estate have year of Juan, quarter, Prop XX, tax for IPO the better for X% growth than

So in actually, we growth had XX. XXX Prop taxes would basis real good estate result expense before about Prop have a XX, been favorable. our points more Without overall

growth expense items year-over-year X% So well impacts we for take been XX. versus that would as XX the have from want quarter about it you the one-time as to the Prop reported

Juan Sanabria

one That's today, reduce gears up and you're the Leverage switching quarter-over-quarter. you, very for a cost outside that? leverage of And think the to helpful. your about are drove that? retained given of What about another alternatives of balance Ernie. what cash how just thinking bit then how capital you And view or sheet, ticked to flow tools to do the

Ernest Freedman

sure. Yes,

first proceeds change. was did actually down debt-to-EBITDA So for periods, also that two from just come transaction we that there in last ad EBITDA - cover X.X, modest quarter in see the went That the you X.Xx financing quarter adjusted costs. refinancing the when was where to the our really net

we've year, of by turns. end the And expect about as talked by about, reduce so, that fully we'll as the one numbers

terms adjusted to cash. the ratio, our for out is certainly our be tools on definitely what And NOI of point monthly periodically, most we'll that us, prepared with that to regards about to proceeds. available purchases growth, with X% decide look you're remarks. modest how be So today, the are to where the capital capital projected John, here very high We those one And them some Xx and expect payout out to still we makes are cash happen. And important [indiscernible] and here what talked Dallas that X%, on in EBITDA it the the use so in X start retain recycling dividend grow retained about front opportunities we first and was is, basis, to and strongly using the you in had quarter. a in then recycling to we've flow

not. all and And we from so whether to pleased with to to regards our dispositions give weighted the acquisitions us consideration we're stay plan improve But we and in leverage want capital sense, our equally if about on to very do profile. to made as or the broadly consider to XXXX. with keep And continue considerably well being pivot track there available and raise that help it what's then opportunities

Operator

Drew next Berdin The comes from with question Baird.

Unidentified Analyst

morning. into would like if guys a great expectations is little are I wondering expect on It Drew could markets a convinced what so guys peak any this little for Alex you the to guys internal This you you was national, short were lot occupancy strong of wondering strengths? gamble kind looks a if you bit look season. going you where are of and

Charles Young

great and this And quarter, our And in to what for where It exactly of added moving news wanted build do a Charles, season. we're to we all actually XX up occupancy the the call, XX April that plus of north occupancy QX. markets good the actually us that Through in XX% up added add the up at we overall. April, In of behind leasing wanted continue about Yes, for which in little We to in the XX% puts want basis is a points us we average position so on that. percent X. really end where And peak last in QX. is through to be were mentioned we to did did question. we we QX. we thanks exactly

growth do. again, obviously came growth of new they, come hoped. and were seeing in shy They that, that are just X.X%. So actually continued But is we solid, leases, ended at the what in renewals leases of new blended did we renewal carry but we stronger we're X/X In we we and And X%. that because the we're April QX, growth. ultimately, seeing all rent

going So we're season. into very leasing peak position well

Unidentified Analyst

helpful. that's kind really And Perfect, of over. switching

in alluded the program. Are that? rents? to the cost charge And how home of just Can you there higher you a growth guys looks the guys on continued smart from about future wondering ROI internal of program think you savings? like? you kind You on technology. what guys get see Wondering premiums the that

Charles Young

our the as But our to There's those least able ongoing knowing costs the program that are convenience people have owning great to actually the of get us. that really be to in overall, ancillary their And reduce homes It's ultimately, least let we it's home they're the to to our to much residents able some they're fees. only that for operational self-show, about charge we're an and efficiencies families Yes, really as is and been management to gain and in revenue when revenue. our we're being at their additional enjoy we utilities and for not their from and in can It's they're efficiencies able the the ability the on able be do the on control to charge vendors in basis. living lifestyle not utility ability homes. self-show them letting when in. and while

Frederick Tuomi

And then, namely control, cetera. field of the over DVD our key so home of for idea in renovation to choose eventual prospects et vendors, operational if during process. to large a was original and interact some utility options. we Then, the the that access experience. our single-family the Fred. is the preferred And rental, employees, to they allowing the shelf this thesis could proportion it smart showing they costs our the also chose the of wanted take have to In was idea shelf found care by Yes, really system of the have very challenges in to control return maintain home showing we very, by with the that people

or they have to XX% guided tour certainly And choosing a can our leasing If home as the either just professional just, that. So smart smart to do prospects our capabilities about XXX them sweeping the to of with of that have to adding from us they are know then want well. almost the was for the nation, that considering the ads are homes.

actually they demand that for that can and facilitate that realized So actually desire. We need there's that. in

they of door to have So the for it if front the do, try it we going of make to there's to much optional and at gadget choose, if parts a of same lower other Then that a we can that more in future. all lower, things we thermostat that is believe they're cost that assemble and to themselves. of so we control ideas in add our cost rental system then they residents cost have that implementation to convenient these and

Unidentified Analyst

you guys for? forward it kind of Yes, that's where or what see helpful. XXXX very going now that And is quarter of opportunistic kind you targeting guys are is

Charles Young

trying At to the hill on we're new the renewals. We're technology where typical go. installing that's

new we'll leasing to of it help it and house residents ultimately, us So becomes part to as that smartphone able leases our us. are are opportunity the it. the to of our great if returns, of nearly the with pool put advantage choose taken do - and of payout it. is to they be been XX% great then for What's in we'd It's upsell

Operator

The Douglas next with Credit question Suisse. Harter comes from

Douglas Harter

both just revenue can a CapEx was expectations there the side. bit enhancing on little and R&M talk we and side hoping your about I the

Ernest Freedman

Sure.

is specifically your what question, Doug? So

Douglas Harter

XQ fairly Just, year-over-year in for like I Look guess, was the in growth outlook high. XXXX. CapEx the

we if comparison just if a wondering that's tougher that expecting. was level the Just should be or

Ernest Freedman

enhancing the Sure. is handle CapEx. the I'll [indiscernible] This question about Ernie. around the current talk value CapEx

different we formal time. CapEx, expectation organizations to two really for On toward to to blended spend a over real a kind number regards think working is of number be where the our better recurring the opportunity CapEx levels a us and get with

number do that what to number about did $X,XXX our so on the, quarter, we can probably been the of $X,XXX we time, last and better a there in better about $X,XXX here in $X,XXX, us is so talked achieved to blended good to for the past. opportunity was And the door quarter per and I think the the in closer first for we think that was I

the a the the we the is because addition, of orders bit routine quarter terms earlier of In into the quarter what the about first hurricane - over number higher from carrying little type stuff. first in the in talked work about

So the and comp of going and moving to difficult of more best also because taking practices. a to that, but forward little organizations we're both get bit best

recurring So on I I'm think not CapEx. that's where

enhancing value You CapEx want about quickly to that? talk what about and we're thinking

Dallas Tanner

Yes, sure.

ways about the customer last the for we've CapEx talked the things and only they're going idea, but in willing forward, roll one for allow pay that very bit As pilot, hardened expense be as we a little we it. the be we the effective home, this make found not but revenue optimize out decisions to year to to is look where help on enhancing asset of customers

on and an pay, will call customers these With home average you their our are call opt a an the that on those us willing it between part, $X,XXX, of put give projects call would on unlevered an it, and were per basis. to rate XX%, Orlando, on bump $X,XXX ROI negotiation incremental So that's types it, rents XX dollars it XX% in plus somewhere month example. last on spending

Ernie other obviously early. that's part have feel and the to because call home for customer win-win laid Charles as flooring, this, because had leasing, which they can the stay participate the a longer customer wants willing in that it's of choice, better that hardwood is upgrading like the the examples out will so as us actually the the and ability of with customer in us asset a our get call, all optimize to for their And in be to customer mentioned that a stickier we kitchens, ways

Operator

question McGill next The Dennis Zelman comes from & Associates. with

Dennis McGill

question stuff Has First of were work impact are do I the the to after work out know has having with resident any get there the just order residence the surveys do the the to wait done. the lot the orders of to on in those from some markets. hurricane of to guys you that of reporters kicked done? happiness a been

Frederick Tuomi

to priorities make obviously emergency were was felt with or we habitability orders sure the work those on those we were that had we issues. approach. dealing that priority an like And right were anything the that Yes,

landscaping, ones the routine we around of work scores as soon And more track every for fencing, we And homes. the of to after maybe were service do them those was a we down little with interaction came as there, but slightly, some not Some orders the that there obviously. able real quickly residents. And regulate delay materially. back built

in only also what of So not building timing where timing, they through had seeing part and they're you're of coming is QX. the the but

that maybe been given trying but amount the of slight So what size as a of really scale they've our do could, to focus really able we teams blip material on no quickly to in work Florida. real came change overall, and through proud these through as the

Dennis McGill

And and would given the what event you learned repair significant of the efforts you way hindsight, change of in again? structure the maintenance in you sort weather event a

Frederick Tuomi

the through combining orders quicker. a already that started going And the work we that we've the opportunity of on allow to for think maintenance path worlds best will technology where is will that work with forward. we the Well, be answer both have the platform us real using part of

fashion. able the many what use one platform look where the and we platform, a more we we're So through just as us as get think this our to organization timely example the the is in best across vendors in-house and move vendors a quarters into of is well bull technology keep to and more allows

proud we've to really we do great. we're implementing been paid able that, is as what we're and So speak of there

Dennis McGill

probably I you take in you that more remember for if participate about maybe market. talk the you're you question for offer them are to that Program. expanding in the that channel to dollars Dallas and that opportunities trial Brazil as Separate And market? participate similar elsewhere and looking an with on looking

Dallas Tanner

in many, a versus broker buy of the want starting like look and go car sell silence customers We homes. program it's offer quite one being decision we're change. see outside it, absolutely. to a And We're call Rated Uber do pilot people maybe taxi. at frankly, and and or ordinary as Yes, where the starting for rate make of channels, to transact to some that many as it evolved to and Homes program able of chalices has assets companies. of acquire at We and program much and created Zillow importantly, in one robust that night to for Opendoor seeing more with into year last will customers. Invitation the with this provide you're comments now a instant like be more our with opportunities like app look and

have We a Invitation like make when like lease and also somebody benefit company to to perhaps, an us then their think can option to back year ultimately life some home sale-leaseback, next there, there sell where decision. will from they programs, be from added their other

terms it, as a going need you part importantly have it. and in on watch to continue to that of market the in and the see market largest you're this more owner to single-family seat we of develop front So of we where the being spot participate are Dennis

Dennis McGill

Las that seeing And and Are in every Are more that through? those free. program? part trial Phoenix this Phoenix offer markets comes were Vegas you of maybe in the you

Dallas Tanner

of that, have part And but Zillow, funnel. we've help not lead to You're other that ways programs worked companies we with the only definitely been. optimize in to public, and find

so and so active continue expect that do to to be And us in space. will

Operator

Next Deutsche Bank. with from Vincent question Chao comes

Vincent Chao

integration to times like back so back the a the some the of curious plans part wanted integration platforms, I pickup go share the the sounds half? what couple to it some alluded of in but insights second conversation just What learning are Just best maybe of guys of you or practices the could integrate you year be track. the is coming the in merger might if together And on preview was have half to far.

Frederick Tuomi

phase implementation we're the the more the the the And that we integration, And field This pleased geared our the really enabling is service customer life ready ongoing phase, prepared obviously. our is field the of in the with to working said working field this to team, we're platform as on throughout in The the organization. cycle, of remarks, Vincent. is plan. that impact and the Most up to of performance project, integration. to the everyone start Fred. Yes, now first will according of was attraction, acquisition onboarding, coming our work completion

cost cost synergies very in identify field. synergies $XX on run million discussing synergies a million $XX to been announcement this those the combined of the the rate basis this since to early corporate that of related implementation So that specific we've the by XXXX, of and are both platform

other potential we've are alluded there synergies So to. that

the makes market merger vendors density, benefit level, cost not procurement. our scale efficient, still only another seeing cut opportunity more side. Sometime this more our you as which efficient has And on of sales it, our more and on when We're but well.

to procurement we expect to share those we as with suppliers strategies. and some opportunities we meetings more have So little terms of vendors vendor get have in a more -

an that So then further there's up. pick get current is feel like it, up plan, get field we expect And it be establish always running. plan also the we excellent we're will to that additional the optimize but once and way we to and implementing and

their So add to opportunities that, have a going with we we to are see value plans the provide more where for is we a mean, of there density, for Then really I our services revenue, us And those goods to can have on some our revenue services the expenses. will will opportunity more the side. than additional again enhancing - forward. There of the some add opportunities that which residents we procurement and residents is to value scale. be

Vincent Chao

average rest on question ex of balance tax the sway should tougher of portfolio, one-time the for guidance that and the if growth just of helping year, if comparisons and does you've something the outlined implications. portfolio that was at cost items I'm of second just year. maybe another curious do third a that, anything you there's that And core might the sort same-store guess, Invitation look the the it aware imply of the and Ernie, some of keep we curious little does the same-store X% that down. plus those and quarters else seem X% in like the I below the for then, be expense of expense a And if you take the I be side. level

Ernest Freedman

sure. Yes,

in have the instance, Prop with So quarter. to last comp the quarter that We Prop because book Invitation Homes I difficult a the up in in year. alluded year second quarter first we we for didn't last first doubled the XX, fact XX

more taxes one the mainly help NOI Prop And real for as earnings XX generally would talent be speaking specific second we of we fourth than be another year of in in quarter little estate easier get That's as we're us those expect example. quarter. we And some bit alliance synergies into should that's a manageable bit the have quarter, to get we second we specifically haven't example our So make more the expect all get because the about is call. do well. half second speaking been what those some other that the to from on and modest into to

business the are we've continue us but bit of and risk property for pushing and their is and is there things and synergy areas opportunity second the best numbers for year. from is - us California with of to only in the half half and property early the for opportunities regards assessments, said our full estate second we half the we've point, reassessments say second we're on we're a use how about received So just adding and businesses the some easier Notwithstanding we're getting early, of taxes what talked had. most both very year back with events the taxes. the any the other And year there various the real days I as ship talked the that and notices little and I'd take guidance that Fred made of to I the things about as to in in how this regard on of at well of often as of previously and tax the run with smarter learn and

will opportunity to to of the us I an opportunity in course, for to do. be for us better-than-expected there's So be but say? right there's for us direction Taxes

no we'll better see good we about until days. of certainly range XX us still a it, X% X%. range for to wide and in a So in that have path to We

Operator

Jade with question comes KBW. Rahmani The next from

Jade Rahmani

that on their you Invitation produced elaborate that enhance revenues initiatives you you the lifestyle tenants introduce but some can other revenues, with for And charge mean examples? Can could give for Homes? to products

Frederick Tuomi

on smart adding to home capability. is example one our Yes,

hubs alarm they that But home. basis the if future. We lock are is well. are there features other The place and of system optionality the to full the wanted video have intrusion to smart monitoring monitored the either ability security is probable. We more features the implement use offer density systems, ups becomes home gives more thermostat, system. as very the interior or now into primary basis landscaping a either a could have choose People with in you of simply we at have get important. very our could in to a a the Those and which in space. lot landscaping of portfolio, exterior or which could just People offer a cost-effective

doing customer base have rev have lifestyle other X, And to so couple designing a we their efficient good offering in leasing terms and to of meets optionalities, products influence a versus into coming a of pocket. own and meets services needs, residents. terms interiors, which this our their can desires, that products out some profile they make so There's in that services our of all other a the people some customized value-added, that's things. campaigns, talking of large-scale again joint their in lot other offer their payment we're provide want analysis So lifestyle step our for easy marketing then expense of durable upgrades, vendors

Jade Rahmani

Or the primarily? a the attributes? and on reason same-store color you to market difference margin, which also, the that high-margin there any about some is and other in Denver separately robustly. for main Just the taxes on property Could core structurally, give pretty improved is wanted ask basis improvements NOI

Ernest Freedman

tend where next high first quarter we in came XXs Jade some over taxes us year Denver in where assessment earlier. also tax the sense so bit pretty what taxes lower talked taxes a that's to high then allow Yes well Cost level outperformance reasonable. Vegas. XXXX be say on to taxes of around lower earlier as state well this very real while to margin are to to so estate real for real based the and for it's were estate general, NOI maintain will are as always notwithstanding a growth perform set well outed as us similar to in In reasons as perform I their a phoenix we'll mid- then accrued Las in were our estate fact, one about the it

areas our sort In in of continue to margin the highest likely of be fact, those markets the one in portfolio.

Operator

comes John Street The next question from Advisors. Green with Pawlowski

John Pawlowski

operations you on to have Fred, back department your put for minute. ask I'll a

the of Over the wide the given province this long with run, in class footprint? a volatility we'll much investors have asset R&M to versus greater the nature live

Frederick Tuomi

Absolutely not.

say exactly been to continue have always rebuild last estimate optimizes would forecasting I think per We've And based very business us a It's they're I you've between numbers telling run the we've we mathematics. and numbers consistent. that, are, that that of seen develop the $X,XXX cost over The place total with last the of long the $X,XXX, that over years. there we consistent couple this business. and said home we be that per that it where years, maintaining the business. was and of couple of that's would because to see year on for been

of components a the Looking life at useful the life, cost, and useful typically life, home. remaining useful all single-family

see you're think going don't I volatility So going forward. to

product time, have any or non-residential, We or time have residential this apartment one-time to events quarter. one-time in you type, single-family. From may events

So here as with that's what we we're explained. dealing

John Pawlowski

estimate include weather severe some cost average to reserve concept? Dos type of maintain your long-term

Frederick Tuomi

just component whether each foundations, life. useful the of HVAC, roof, the based and exterior, cost for typical interior, then home, the the it's It's on those

John Pawlowski

this spikes the having the analyst keep in Okay. keep given I the unpredictable nature because we we're nature. of mean, footprint, nature in The going says disparate of one-time using homes. cost be to term can me the in skeptical one-time weather

nature. events are much I in with type guess, you how have confidence of one-time So really this do

Frederick Tuomi

obviously, of QX way, the the and January down was the levels. come continue this normal, okay, example, work the early for was from number prioritize in by that very the to saw January. into looked starting March in came spike down into work saw in we And hurricane March. normal then, And cost that pushing quarter, just below Well, the the to February, this routine - quickly orders for back

they're and same April, back to slightly expected So to report normal happy thing, a in or better. levels

lots areas our businesses, a was two based that impacting ours. two of one-time different was including characterization. hurricanes, which that That So on was event, event major

happen again? could never will they Now Of course, No. happen that year? do hurricanes every we not. But say

the these We hard guide types be on state So business Florida. of hurricane predict, hard one-time into hard it's of based to build to going hard not going anticipation those more plan forecast, major a budget, of in to to to a frequent to would activities.

John Pawlowski

one sense. I of lackluster home dollars, make been decline portfolio? any Chicago appreciation price know seeing last then actually best. for Within your at your Okay Chicago you has prices are at And me, portfolio, in pockets home absolute the

Dallas Tanner

No. growth out of any We're I pockets. Well, of wouldn't say Chicago. in seeing steady maybe kind slow

focus. we think but position and so key From cold standpoint, standpoint renewal of both in portfolio I portfolio operational the of be in the X.X% legacy gotten we've menu part we the where will concentration most from less leasing. growth a but to versus not continue and occupancy an starting there little optimize it a is much than do an talked We've past, Fortunately, more successful. can from to better see Midwest this it's our about than

Southeast. and Coast West release story Our

at of We disagree. a Chicago you seeing a a we like out we just bit see think the it of to little type of of it. growth that terms but end in lot of more of better we're like a don't bit John, but efficiencies growth, to no-brainer that's of see little HBI, look I If to see having

Frederick Tuomi

Xs you North we've X. moved at seen movement. starting slightly XX% where expanding of of rank accelerate a I'll above. Chicago it's up with just quarter and ended the we're growth to into nice into April And blended We north operationally, XX%. or look And April, into actually then the really add, year-over-year, at to positive that, when we

we're feel and portfolio, feel shape to with about we - push our forward. operationally good it, we're in combined to like good So and continue scale

John Pawlowski

And has Right. market price January about of Case home X.X% Shiller a appreciation. Chicago February and

Operator

Gilbert comes question Ryan BTIG. next with The from

Ryan Gilbert

away response was describe any wondering can past you've you practices the time over hurricane apply you're the taken you the event? your if next I of expenses three if from quarters best can rather that portfolio the

Frederick Tuomi

This you. is thank Yes, Charles.

gone preparation, hit through getting the sway was the last wind. came to Harvey, much water, the year, with terms On learned ahead, specifically Florida not which and vendors. to out We on that Irma the both Harvey, working really more side, IH and going having a of Florida lot both in Houston of site, us through as storms.

our to some and So vendors We our have residents. able of best be allowed moving homes and first fans to with kind sides of before. that to we're instances stopped to was homes. on our extra both around the we displacement vendors leasing thoughtful the of ready have first were anticipation of Many of and to and ground did we have responders first to of between practices any - one be dehumidifiers our the responders choice residents be the to other

platform think Are our sway I So the we also those operational things we portfolio. big was can and cross implemented mentioned do? the from just an other we there technology we learn help notes. a I on on that. about as earlier from that what side call the comparing that side is talked

be this faster better to respond will in I we in think did than position instance.

we'll happen something forbid, compare notes would learn. to So a lot to continue And if again. we, God

Ryan Gilbert

quarters, if markets rents, of you're mid on rest past renewal been rate it function opportunity a in five Xs, low to the your your closer Western then an bring the of Wondering markets seeing closer year where or high portfolio? over of to western to trading us. to And Xs high just you're looks HPA, until the the averaging supply four, mid growth portfolio rest the the has locations annual Western your portfolio of are that's like

Charles Young

of renewals answered Regardless the really of exposure of kind X/X ultimately releases. seasonality, you of Xs the kind to out growth are question that the us. there. resin of There's allows But That we've renewal across portfolios, renewals. Yes, our some where us if on consistently at historically, optimize been high kind consistent. look that's of for you

renewal And high HPA some So low are you're still we're of get, markets take other in blended we going growth growth, that but Xs Xs see portfolio out some where going the like Western to markets. going to based settle. that you'll to think of supply-demand when push, this, our you good on is of a and

Operator

with Camden The Morgan Stanley. next Donald question comes from

Donald Camden

Just going opening the comments the impact generation. the about age lower and average to of back the

so cares, Just - any as point generation well that legacies is homes is across Starwood about noticeable both Invitation the could as and that And consistent there Homes? to? you trend that that

Frederick Tuomi

country. still look Yes are economy, about the what a on that people older really at every house is this large-scale lot We've demographics question. for basis, interesting talked get Doesn't undeniable. a just the of Demographics year.

economy to baby you larger, when massive more. nation's of years going actually it's cohort, the millennial XX the for impact is cohort, boom have which a at the the So look and next or

and to dollars edge is stage year to million our of getting to impact behaviors the to going the begin this not age, the It's quarter. for are to change. age the there coming business So leading the life

And living themselves by roommates with setting. the in so urban living fleet

moving from and needs rather part have the or relationship court and are more with be them schools, excess of or open them of in over many thereof, the with transportation, family going decade cetera. desires more a et or a start safety, their into the next decisions going to Some of to traditional

of, asset lifestyle opportunity purchase through of leasing the millennials, the to that, single live. family focus. the that well versus loss to stream so speculations actually the And want continue Then going for and think comes we years, they research better lot a that light the please bode lifestyle that, their demand or a home can So experience both to us lifestyle their is purchasing. desire with and of says rental. to to with be

for psychographic and to demand think we cohort. us of more reasons lien lot this bullish very a are or why So from for be the next going demographic decade steady terms this in is

Donald Camden

is And had, is homes then there. I just something doing of understand - that back there. other trying that rolling. be obviously CapEx to enhancing homes, opportunity revenue trying the to the could the Great. that sense discussion. circling the get But opportunity just I'm a to you're what XX,XXX are XX,XXX Is homes? question Just as that

Dallas Tanner

much early that. days and opportunities out laid over of of can million generating it kind It's in we about them This some still the in that in Dallas. purse between absorption we out and terms call We've take kind call year $XX $XX can mean, is across in Yes, a a be it of year. of married time now have of think I'll program talked type that laid we how of right available. I spend revenue will million CapEx tell this Fred are given

for of can There's we lot their optimize We be reasons also business. believe they to that this that out. bring living different win lesson in, doesn't only interim moving hold growth this a itself could

still front home. are capture the that rate bullish certainly it's that to we're say while would be that's of I So what us. about their opportunity say too But in will what early

Operator

The next with Wes from comes Markets. RBC question Golladay Capital

Wesley Golladay

the outlook, that there stand next and see your competitive any your defined for Looking you are markets supply as years, will where point? and competitive at maybe out the supply two price pressure submarket pressure

Dallas Tanner

are of this decade, over doubt, this I have just forms second supply about your keep we're a and again, XX.X Yes, today million we're with not to type markets Without household a up the building going talked the is in to in without ago just imbalance to markets think Dallas. mean, barrier-to-entry Fred a next household so pricing an through pricing that's on you to anticipate lived it new in or current or start you that a formation date, higher normal this know put as would going we home that pressure we call have of across a see any decisions the markets and these anything, about, us to some three recent and that per choices product months that getting of talked the the of type in that may a had in last bit of that right unique XX today We future. other the specifically. market in if we're probably we've Invitation foreseeable two being a the that our tighten couple see between come changing and We of some home Homes. delayed on with normal supply puts we're in only advantage like married, things function it demand of

are those a the trying that not living environments make we're Actually, for next lot see We're way where our optimize supply. a going we forward. we the contrary. years, quite that to building we of forecast the sure So supply opportunities, going growth for external can in to three

Wesley Golladay

management such help entity a if Opendoor Zillow I scale. hold is have way out. could and an that mentioned inventory, wondered your changing home as you so an for they are And had on joining Okay. have a be that's an probably Imagine opportunity would to point bought. some third-party there the use big them homes you risk that where

Frederick Tuomi

We've to got time pursuing interest strategy. been us. front asked integration We've at we concept. interesting have a in of consider this an But that. that's that no big of Yes,

things of our portfolio, own our owned shareholders. We to of of have for accomplish assets a lot our

we look playbook. have But never lot You and someday think ways further leverage additions not develop Maybe platform have of and how certainly in that the at our a I value. to But near-term that we innovations on to say differently. the future, developed never. continue in to it intrinsic

Operator

Anthony comes Paolone question next from The with JPMorgan.

Anthony Paolone

can. Dallas, for guess, I

some through major on of box? and yields where your acquisitions markets talk walk about are You product bio a in your for

Dallas Tanner

Sure, problem. that Yes. we Seattle. mean, in you California no Well, and have scale know I

X, the somewhere like you're that those California Coast Let's between start call buying in markets, the mean, I'll market an on depending specifically West trying rate, in X.X you between be a and cap NOI where are specifically. to you give at an example it in. or could I submarket invest

and capital Southeast we As of and X really instilled in be type on depending markets neighborhood. home buy of can can type in the suburbs X.X solid the between

we'll fundamentals grow speaking, it to and because actually bullish will that varies footprint continue available Denver So saying, to job the rarely our are a and degree and the formation want expanding to markets generally I find It's call by And be we're like be. were it to varies and postmerger to want large in more can ways we of household all but portfolio supply people occur. growth you mean, Dallas. it's continue the by it very amount

Anthony Paolone

second you did ahead? the just move question with your interest Xb, of then description of Ernie. look roll through and at versus swaps you fixed that the debt if putting kind weighted And average rate for X.X%, Okay. all like when forward I of scheduled can look kind you of

Ernest Freedman

based how activity who very chance on current that the in down of as the two, so increase you you you of head, are it's the because going for we that of spreads the of let Offsetting down do bit lot financing we continue in and have on tighter that how get refinancing were cost certainly, about a top is me we - you're spread come off a things see the are you offsets. that Tony can the this Kirkland's go current bit couple but international not that. and off. back But spreads cost quite forward likely can debt will reps go can we against still can't I sense market have we to our I rest to have place, by to in Oh, to a have going three, to little change little instruments the in of that expensive today we other debt point each than a profile year. to offset we off-line up of a years as have since ago original have in our controversy, have those we're what discussion more so will that talk market Experts a my futures optimistic that are But roll today. four bit embedded go these

Operator

now would Fred Tuomi over closing I session. like turn to conference any for back to question-and-answer our remarks. concludes This the

Frederick Tuomi

look the All appreciate you us right. of Europe. in And we as today. to joining with you, everybody. Homes. your upcoming Thank NAREIT in interest, for the again Invitation forward June Thank many in We always,

Operator

now presentation. concluded. you attending Thank for has conference The today's

disconnect. now may You

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