INVH - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to the Invitation Homes Second Quarter 2018 Earnings Conference Call. All participants are in listen-only mode at this time [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 morning. Good for earnings you for second our And call. joining XXXX conference quarter thank us On Invitation Charles call Officer. Ernie Officer; today's from Dallas Freedman, Executive Tuomi, and Chief Officer; Chief Financial Chief Officer; Tanner, Young, Operating Homes Chief Investment are Fred like call. our quarter press everyone XXXX we may to information, and supplemental which point reference to earnings I'd second release on today's site on can Investor Relations Web be our found the at document This of www.invh.com. section call certain such I'd business, forward-looking cause may to materially also could capital actual that this those to non-historical made like subject in future financial our which and other statements, differ and include from indicated that relating of statements outcomes statements. the you liquidity to resources or statements and uncertainties to any risks are during inform performance results, results described XX-K the We on from report uncertainties of make and with we risks some XXXX time-to-time. SEC in annual our these and the filings other Form and so. does expressly Homes Invitation obligation to not any disclaims forward-looking update statements do

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

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

Fred Tuomi

NOI than second everyone. quarter's was relative help remains full robust per markets, and the year-over-year growth blended Good basis the core and welcome our the store for XXXX growth growth Same highest quarter, the which to growth rent time, morning, of year-over-year FFO X.X% quarters declined to Greg. And year. as strong remain average of quarter first over drive XX% This our better us share XX X.X%. top-line achieve core fundamentals at turnover prior to growth At same store demand of rate occupancy Supply same Thank again X% strong a growth once revenue the achieved points high conference enable of same you, call. last XX.X%. in the second quarter store in earnings growth six the X.X%.

housing ahead, X% U.S. formations and average strong construction almost key at forecast costs for year. our a to select continued markets, XXXX. In demand. point and remains markets growth indicators constraining to track last than to up year-over-year. new high to new are Looking are prices our than greater home rate ownership muted are Home in move-outs continue supply supply household lower Higher grow XX%

point the All second the revenue the of and continued year, of while key the U.S. age. expectations results are in Based years the millennial year’s XXXX, of and ahead our core continues generation only the range as the and year-to-date these for factors in to remainder midpoint X.X% to to more strength we growth growth half become the full have guidance, narrowing X.X%. to beneficial same-store demographics maintaining XXXX on for of revenue

us allowing initial the which million, also and integration total greater $X We expect milestones million synergies certainty. We’re greater between is synergies majority be cost than million now report $XX complete, rate now estimate to to of that to pleased merger our $XX are with run expectations.

are While address Charles cost temporarily term growth in are expected. greater property will a additional revenue savings we about long than excited these and this higher outlook our detail. running expenses level

X.X%. growth fully initially area. technician we longer newly our XXXX than Repair it same-store overly optimize that from year updating I’ll it by and realize Accordingly, Maintenance how guidance in this integrated our take expense technology, are service full gains were to thought productivity to and or R&M would X.X% to saying optimistic However, we summarize we management we quickly will

changing temporary clear be challenges. fundamental we these We as XXXX if change not view not me in the NOI normalized of for be expense guidance, projected representative business. previous not that would any expense XXXX nor these our do as numbers same-store Let or

updated expectations, X.X%. XXXX our forecast revenue we now between X.X% growth NOI of year full and Given expense and same-store

Importantly, the to midpoint. at midpoint XXXX per versus guidance core represents we are which share, maintaining range and the last to of year narrowing FFO growth $X.XX our this $X.XX XX%

of As continue we our we on the enter the advantages year, the rental competitive in widening focus second to marketplace. single-family half

through desirable barrier our are selected substantially to more management lower we our team sub already $XXX acquisitions density our carefully In is growth we further proximity more and into and from and first locations. through market recycling. increased ongoing data half be sub-markets employment rental leveraging attractive homes schools sub-markets of closed-in robust post first dispositions. locations is rated homes with The even centers, refine XXXX, approximately most good the transportation million capital homes and and markets to high now analytics family single high in merger, investment We have believe the of our markets With and reallocated capital to corridors.

of is operating X,XXX be are even expect we homes and scale as quality of and personnel. increased to service to of our unified higher focused market new unique homes on almost provide advantage all on fruition scale. to of roll greater integration a platform on The with our competitive our to leverage number we With optimal we next will per the Second number that focused out density. structure average, field phase bringing

we is from advantage which people also benefit of service, third next expect The the to phase and integration. this our

on expanding technicians the all both the year, technology half platform. of it. at with we of the more advanced we provide In tools of field and mentioned, implementing we and management the even will which the be As have and practices experience second best completed process R&M aimed the vendors resident efficiency to one ProCare moving improving our

that, are associates growth provide We our with residents, such and this results smart an operating value and the near ahead, further business services both see our will advantages into term and opportunity in technology detail to the focused products as Looking shareholders. second to current offering. of and also we our more desire leverage expand on now about benefit the long excited residents that prospects in as home and new our our well Operating operating current the quarter With Charles trends. will term, Chief the on Young, Officer, continuing as competitive for remain

Charles Young

to you, I’d start dedication. thanking their for hard and like Thank Fred. our associates by work

execution strong enjoy and doesn't but to come resident all continue We that without service. fundamentals with starts market growth

also are X.X over out to regarding trailing satisfactions year-to-date a residents XX,XXX on responses XX.X% with we Our high, of living turnover experience residents have rate improvement high XX remain quality survey in averaging teams of services. X evidenced on basis. Resident providing scores further a by quality as received months

quarter. year-over-year higher with top-line Non-controllable store occupancy X.X%. of for of quarter. to performance. basis first revenues committed of I'll spend to increase NOI expectation second loyalty primarily driven grew line drove strong from than average Same was every Our some average earnings core in dedicated with second the were expenses quarter growth now up The our quarter X.X% X% time walking growth the same store XX% year-over-year by you XXXX field rental our expectations. the day. and in of are residents in details operating despite our XX through teams X.X the X% in of expense These points and line expected results growth the in rate

that than expense two key like experiences were of newly expenses June, are expected drivers stemming as associated we R&M in the in and two moments we our we due were primary markets. and markets to to to issues R&M facing; steps our the are integration; to temporary mostly However, second, the I'd first, take local R&M a teams adapt There are improve elevated for the from overages specific disruption results. quarter platform. we Management challenges discuss challenges few higher Technology taking concentrated primarily a implemented to are to our with identified

First, I'll The associate seen markets limited the issues. the market touch integration on very through our majority process. challenges have vast of specific

two have XX% quarter. alone experienced R&M the to However, personnel our level markets South have that for accounted Tampa higher and miss issues detrimental second the of in Florida performance. been the expectations These versus of overall

these We teams moving have and responded supplement in by swiftly rebuild to markets.

national local restore levels. to committed offices performance expected help have resources two additional to these We to also

new of schedule ahead turn we'll areas further productivity. overtime opportunity Technology I'll the to completed this and we that the quarter of our Management platform. R&M second The with Second, during was implementation increase technical technology confident are service of

realize would were and However, we our immediately. gains initial in those assuming retrospect optimistic productivity we too in expectations

productivity. order specific fact restore declined temporarily out the by amplified when gate. productivity rollout to time a the the highest. that volume we service fact, We've of was and improve was technician seasonally actions This taken issue at In completed work already the

improve position our real determine updated center is logic percentage who orders address to have in in orders work we equipped best example, For call work which and of the scripts and dispatch will house. that service completed time,

addition, per completed In which of technician. rollout nearing optimization metric version orders improve new are algorithm, of our work will we route daily a of average the the

even fine-tuned technology. density, As we efficiency and are scale, expect systems the our due than past and fully adopted, experience higher achieve to in to enhanced

expectations longer our will we more -- However, time assume take that it there. reset to to get have take

do that assumes through the likely better we are challenges of will second experiencing we’ve guidance year, but revised faster. the to Our hard the half been persist working and

declining high the quality the has growth continued And rent a second in in second Furthermore, growth strong averaged into incentive second the this quarter, desirable and in third trends. growth, is to for recent the new leasing second driven by accelerated X.X% Seattle, acceleration new basis opportunities lease-over-lease believe our best in X.X% markets into the to Same-store coming for blended growth July the end concession homes will quarter, the near XX% quarters. in quarter and remaining rent leasing leases highly we saw last the expectation and rent of average X.X% service capture in and growth highest. favorable, XXXX quarter. lease XX.X% of quarter continue value end cover at to locations. May. peak quarter net fundamentals. expressing us growth of leasing X.X% June points increasing the way to We X.X% in We continue operationally of June any X.X% of occupancy market find occupancy strength class seasonal X.X% July Same-store Blended steady of everyday in desire environment X.X% in our was renewals rent I’ll and in strong turnover XX% remain in XXXX. that steady our Southern we at California renewal in occupancy Next, effective was second Phoenix, lead with the optimizing a on X.X% testament new in close rent for increasing continued in leases by first delivering residents trends the to Northern in from X.X%. be The growth, year-over-year from my of excitement Even in as average I XXXX second with rent growth renewal the XX% gains quarter acceleration define with occupancy net with while XX focused meeting lifestyle the year. our as to rent XXXX. front the the we half with which and the month and residents and six from versus to Western continue to to July all May X.X% and strong U.S. season.

further enhancements residents. ultimately that’ll to service We’re rollout over outstanding teams Chief as call R&M our and working I’ll to better hard the even turn nears our to integration equipped Freedman. our level for phase, efficiency. an restore Financial make more we’ll Ernie now final Officer, improve the provide And

Ernie Freedman

I update; second integration you, second I’ll Thank markets activity; following and guidance portfolio the Today, financial for sheet Charles. activity will results topics; and update. XXXX portfolio order; balance start the with for cover capital the activity. quarter;

by was and $XX sheet of homes X.X%. homes. million, rate quarter. Florida capital proceeds plus acquisitions second June, in one Debt LIBOR markets million As in keeping were two $X.X to and XXX $XXX full for dispositions years provide the acquired now million our decreased $X.X of turn opportunities to XX,XXX in has plan the estimated with prepay of continue year, $XXX X.X was and the principal maturity LIBOR Southeast, XX% an the of X.X us further Net we each securitizations; homes pool portfolio, amount We XXX investment XXX. South for debt in funded on we XX,XXX on our $XXX has Chicago, continue refinancing of of billion of homes. took cash securitizations with range and year amount at and XXX; Since markets The net million and years track in an to XX,XXX of sold XXXX. recycle total We billion over floating enhance maturing attractive principal assets seven-year $X.X advantage primarily securitization balance of to beginning average unencumbered floating approximately by to to increased Western for at in $XX used average to dispositions focused one by maturing of completing in lesser grown the to our I'll our capital XXXX plus and our from hand rate extent weighted in the billion by rate million. cap into bought count May, the update Houston. quality to Net a U.S. on and homes activity. home

rate XX.X% on debt interest our additional I'll combination our interest the of current place. XD in and per hedges year-over-year also FFO on and added second $X.XX share second were financial and drivers undrawn into billion integration. of in adjusted average share. our swaps expected GAAP the end was related our now to weighted and debt lower almost I'll interest an growth FFO, The additional our facility. provide We've increased of We $X.XX. XXXX liquidity and And quarter primary to at from share addition merger expense time match on quarter on Supplemental update to to to touch duration cash to net to $X.X our capacity XX.X% in in our to our G&A changes provide extended results. FFO lower briefly respectively NOI the over swaps a detail cash extend reconciliation and duration and per finally, increases schedule cost the entered of per through maturities. unrestricted for forward our of credit based reported quarter our rate AFFO one schedule loss next core supplemental provides AFFO. Core

of integration. been is ahead has local the XX technology of of on major most on accounting Office new new Implementation in are We XX and markets complete platform of consolidated. our schedule now space August our was elements launched our R&M Xst.

by where is this As of also expected ahead a approximately of to versus had $XX result, achievement million running pace at point. schedule the synergy we be

progress The remaining roll quarter Work continues XXXX. to the in is fourth platform million today, As management. run final of to we technology combines have unified Implementation is of platform rate milestone. configuration to field the the an that earned updated approximately entirely cover under synergies this on both is basis, systems annualized I support major organizations to of expected $XX of our to an and last and guidance. field will thing XXXX related best operating legacy almost property G&A unified and begin and our of out

store markets the revenue fundamentals guidance core at midpoint we be as continue same are the favorable. growth in to X.X% X.X%, to portfolio, our unchanged For our to narrowing

same-store same-store Our some to to expense X.X% to to additional the help same-store X.X% guidance. is due X.X%. now an I'll core our bridge NOI give guidance increase increase X.X% expense our in to guidance in detail

XXXX in X% gains. R&M they initial guidance be assumed in expense for would lower X% due were XXXX than Our productivity XXXX anticipated costs to operating same-store to

of gate more Charles optimize. As though productivity out expected instead to the described declined to time take is and

X.X% is range. same on Without expectation alone, in expenses X.X% guidance. in X.XX%. instead versus growth still expense overall our that in X% growth are initial consistent this be guidance X.X% California the property our increase reassessments we expenses And taxes and would expected expense expenses to remember, XXXX estate year have year-over-year Real of growth, store increase XX in taxes to expect onetime from increase X% our growth merger. which be down property to leads midpoint our X% excluding X.X% in Crop material new For we non-tax with revised related guidance. real due about our our this reason estate level initial to now up taxes a

As million This of for full FFO core vendor Fred is due year raised cost account to and range narrowing same annual Taking its share. subscription in million services and synergies into expectation projection run-rate within expectations our between to higher store primarily and to are guidance G&A. synergy $X midpoint of our results for our $X.XX also million. and areas revised mentioned, the drive per we to maintaining $X.XX and than we've XXXX savings obtainment, our the incremental total $XX been we've initial $XX able

and Additional favorable rate respectively In year. growth full AFFO XX% and prior excited our summary, expected picture reiterating guidance would the energized the changes in close questions? very I'll and core Big imply the G&A. operator, our midpoints for of for FFO expense are great are progress and out year. we lower year at we of you and their include XXXX. beginning With half our up the laid XX% the from by fundamentals second forecast priorities interest remain that open at of teams on making strong line please that

Operator

We Bank Please first session of begin go from will And ahead. Sanabria question-and-answer with America. today's question will the Instructions]. [Operator Juan now come

Juan Sanabria

guidance how last about rate the second we talk half? of midpoint by as Is if the at bit the that hurricanes comfortable you midpoint that hoping of impact driving occupancy part little Just driven modest the The what's Are that the could think implies and should about the reacceleration year? at the half. uptick a store same in and a revenue. second in we

Ernie Freedman

quarter the rate from growth growth of X.X% first revenue our from accelerated the we rate. quarter X.X% saw, second you growth As to

about in have the XX year at the to talked of look do bps alone, as easier occupancy. year-over-year. with we're And comps past, and in of second we the half in fact you regards we've month July the As higher

benefit regards of well with comp, with half. But to have we second the to we having expect easier comp. to good in year. range growth occupancy rental revenue that get to we for a the get full So with believe easier X.X% to we as our occupancy regards rate X.X% the little out more that will And do

Juan Sanabria

comps should year? And the the or in make last that does quarter, how the about fourth hurricanes, we think easier that

Charles Young

bottom quarter. line of a us lower is the bottom bit against as occupancy give a that will And So line fourth a about talked little part is that Ernie that in little comp the we lift it's of it.

the So back in had to first because Florida. the both come some of hurricane and really in pickup we started leasing of slowdown occupancy this in in year. the hurricane part Houston And

So that’s have. comp that we some benefit the of

Juan Sanabria

wages? on expense more higher the And there And people anything like just do to? you forward? sounds talked attribute it Is turnover then for employee about can higher Florida. you moving in side, going that Is you wage pressure expect

Charles Young

wage wasn’t No, it really about pressure.

As was as remarks, around said The truly isolated, was about a turnover, of integration. it the markets And really Florida and not specifically we’re markets. combined have really we more are operating opening around the and already our and great issues in Tampa reminder, Florida. XX our wage of majority XX in across offices the South the two associate

work early a And couple teams that we’re part is the it was back peak at with national and track the half we we departures impact. resources the So to at distraction time for year. the supporting few happened though, get second a of order The that backfilled quickly, expect of volume us. roles the we’ve on good of key had the created that a and for unexpected news

Operator

Credit Please comes Next Harter question Suisse. go ahead. from with Douglas

Douglas Harter

just as your magnitude potential what half, correcting remind markets us markets, for what look could -- help you back about address then on of us the two and those in guidance far pace just is those as you with like addressing as think Just can that of get improvement? those XXXX the

Ernie Freedman

in the season. in challenges activity most summer of R&M, have the R&M happens peak we when our peak understand in season, I

to opportunity becomes the of smaller get our so end And it and year. and improve the smaller to

orders coming all work system, the of So through that’s across it��s our less markets.

markets spread the evenly these we will have that there’s expect by the the end of as orders year, on second would the meaningful better half work it do out throughout year. of won’t we get so as like, And impact but because

expectations to -- do But our better season season, the So do challenges if guidance our does we’ll I resolved our into best around the those to end make it’s to have into that that. guidance continue service to is prepared year we in the that. leasing of take better we that our course talked to then will issues make about during than the of that baked we’re but and is want well see peak try in assume clear of can than sure are get going course we remarks peak to into

Douglas Harter

debt that do And then where savings you I in quarter, markets are the have the refinancing where given did Ernie, -- today? and financing you second the guess that comparable other you any see could

Ernie Freedman

those were we’re activity markets next as or us -- year spread here some the half ahead maturities where have capital as for XXXX, for there up of coming We activity do our year XXXX latter well. to do of this could see us. beginning there years job a But did maturities fantastic XXXX some out. that some team the We and executing able have be and of get of in against compression we to consider good the opportunities couple for could refinancing refinancing

optimistic we’ve been. be we’ll So like

is sheet at. We’re balance pleased before the

been sheet. to fact committed with great balance our the But want where very to extend pleased We’re we maturity. getting as weighted to that we’re we’ve able average to investment

point, this and Doug. so far, what is pretty answer of thus stuff -- the we’ve year. half second could the accomplished But we the with do we’re pleased here And some at in

Operator

from Evercore. go Next Please question Green Jason comes with ahead.

Jason Green

some some looks of did looking slight on circle Just and same-store that's the more expenses, what expenses there to versus that the factors QX of acceleration at other wanted in if guidance more you first wondering half it your there? in same-store other R&M And like back do year is if you or expect the I was for the to quarters, year. that the there's the fact spending, back half

Ernie Freedman

of our Yes, two guidance. things with the regards

had what we And those is from quarters the happened is quarter some of thing say cleanup, remember had we'd related the and we meet fourth to quarter First year most markets with quarter. expect of by the first the markets in things in have that was recall over quarter, the so some the to that were this between hurricane the into past And other impacted was that regards the a we'll more in of the certainly occurring R&M third R&M to in again. difficult the activity you was not this hurricanes. we did spend two R&M. those and that comp pull fourth Most in

because had us lighter quarter number Hence in you're slightly the difficult actually right. a a of that exactly more we XXXX in So R&M creating fourth comp for XXXX.

but year for full to X.X we're at year-to-date, our the guidance our you X.X% at look is guidance, X.X. If

go as the trend So second half that's that why see you year. we the into of

Jason Green

basis versus driving be compare last helpful? if be the the any year-over-year. I that what back on are difference time XX year front, then And push might points around down obviously And this renewals but would and they're with strong tenants guess still in the you renewal pushback of could

Fred Tuomi

our long-term demographics be not from to it's going remained -- supply to Charles are this favorable about, much and and as tenants. power strong, much around Pricing us. pushback fundamentals demand not as tailwind are It's

each and couple seasoning less fundamentals the lower it it's homes wonderful buying growth of we're Dallas to and optimizing. did last a across and contributed about at X. And of job we are really the up we we at done to getting for of higher markets of As been around leased. years, were on, where our very country. where a we being have portfolio. rent In early true slightly our rents. consistent on of fundamentals year-over-year, we've seeing stabilizing But early And X.X focused to look of that's we're more now, our the market are reflective more If on we bulk we the in the really of think market, which team and

Operator

comes Please with from Babin Baird. Drew Next question ahead. go

Drew Babin

I I with Does the increased difference to the and in repair drove there do probably was in FFO is is, same expenses factors AFFO was that higher And materials revisions costs CapEx guidance it recurring looks in about the that that have curious to quarter? is anything higher the cost? talk why maintenance like that second there. hoping to and

Ernie Freedman

Drew, the repairs in A of you to we it impacts it's repairs than over carries described. actually CapEx. we're latter in of challenge see where what same OpEx the the was seeing as lot maintenance

material for our So couple costs impacts replacement reflected our turn. guidance going Charles the like we're CapEx, But specific that that capital that talk seeing the about sure we we in spending, which that not seeing we're seeing challenges with a of for those pressure our change on forward to in our or and anything wanted markets that AFFO. make to that reasons in are in similar some

Drew Babin

later and can And possibly this are year markets now to markets something comment And then you sell year are either I what debt? the what debt repay could to you private clarify a market hoping like hoping just also next too I was the potentially unencumbered on and prospects bidder potential by what a that? for those to are was and

Ernie Freedman

With us certainly point couple a is a where that generally all at for almost they that to of a when only than them all we Drew, of to of have but two is pay to sell the have we us in regards some and where year rate year, almost an their of assets. issue unencumbered securitizations. have market lockout there debt, one There yield unencumbered lower securitizations, proportion floating time they're is at by go no markets but maintenance others, debt expire. on completely

us refinancing activity we won��t and to have deals all those substitution difference most our be recent that other So than in rights a too.

So that rates. flexibility transaction substitution have as our we have we also do for Fannie flexibility well there. with Mae Similarly,

our how wouldn't to sale for did market as us to that. we if regards to to debt have that So ability the hindrance a want far as do with

Drew Babin

right then the portfolio How question. just a you in would now transactions related view bid And for business? this

Dallas Tanner

Drew, ton a Dallas. out. amount when done we're taking in demand this on -- Generally, limited even we the is this something marketplace of seeing year dispositions of we've

You'll new lot space given are scale, of to that that acquire try the it's difficult looking into to environment. find today's are entrants pretty there today

and we So mark-to-market a of over to some you're answer the opportunity. pretty homes it’s It's those asset tight rents dependent getting also come market see quality to simple the out upon decent that just types today. be would with that of

of So look of markets we've as selling and much disposition at active been parts seeing not more some for assets where we're our this growth. year, us you certainly activity

we expect forward. with consistent to that stay Now strategy going our

Operator

question next Haendel from St. And comes

Please Juste with ahead. Mizuho. go

Haendel St. Juste

or focused a is question about XXXX on going Fred felt expense, you hike good I how the the Charles the you a again guys one guidance. on, a and was guidance, rental and the chatting recall quite that maybe us. growth which with in your surprise many this is for on you, So we at NAREIT to of strong bit

that want if So time. that maybe and to wear more integration I so guess mention I'm curious why these And wasn't if at of of it? a you expense headwinds

Charles Young

April into June had surprise. visibility had where we really we is at time. the the and NAREIT So May

R&M the tech saw quickly have were into -- offering our And we there platform. that's maintenance we the utilization. integration in We house finished technology was where that

is part time that the it's made quickly of impact. year volume about. and had its as an high challenge talked of we we the So pivot And

of we through it we're there into didn't be making why think 'XX. the this work that's way and we'll we're So we in ultimately going the good the shape and pivot end year, at our to going see

Haendel St. Juste

I on up a then rate. catch follow dispositions, a didn't And the cap just

I what you on mentioned you X.X think thought.

cap is -- you markets any can there markets? tell any rate me maybe the So and there

Ernie Freedman

So you answer I that can Haendel. for

in sometimes. maybe the months, cap So it all end rate two terms the of our a vacate X.X%, month a in second we channel through retail quarter user longer sales home were of to for typically the was where little

X.X%. cap rate see to sales. homes, we where not more and bulk you some any where we the those when it's So markets. Dallas see buying homes. of at you'll sold, with to homes If some that's talk But we homes could higher number the of to number about selling the exit those in in we why with rate typically be a certainly we cap second line much concentrated a that channel, were lower quarter more And they’re did sale start a

Dallas Tanner

We've in of number with sales guidance of out in in had the we year early Chicago. of throughout the a really and line And laid also we're terms somewhere where on this it and Huston year million in we between Ernie the be We this to about target sale earlier want the $XXX talked those to call. homes $XXX and we'll anticipate year, we're targets. with selling. million on achieve some

Haendel St. Juste

Houston? of growth was A mentioned Houston on going want the revenue let impacts can a particular that well, one us weaker that's in note you to Anything you there quick But lingering since what's sense on -- going one give I'll as on you markets. in you of to explain.

Charles Young

owned and being coming had XXX quarter were online. We our second around housing rehab. homes around supply come-in in Occupancies online. and there related those challenges as void a back temporarily to up other from Really product was the it's of stepped first when post-Harvey back

So trying of and well other compete a issue creates a to against then we’re that. homes us supply in little as it coming as for bit

have on we of lease So that bit continue a little put as growth some we’ll pressure absorb. to new our and

half Going at season. into year, we the of volume peak that back-up expect we’ll catch is second the now

Operator

with Next Street John ahead. question comes go Pawlowski Green Please from Advisors.

John Pawlowski

R&M to weeks the three go issues personnel with in pop-up. quarter, and NAREIT at So related

massively costs quarter quarter. they’re XX% last up in So suggests the the of if three weeks R&M are for

you a scripts How you with center issues, I to get or little left September personnel related comfortable with quarter. guess do call get visibility or do that weeks how queue October? aren’t three pop-up that with to comfortable So going in

Ernie Freedman

have we of quickly. in and front We the as react to reacted to information us

coming are side, And through the the of and work are ability that’s of time R&M make it’s part what of issue just call is year pivot. volume specifically, the our those we that On to reacting part of to. scripts the

actually high start the to highest So is August high then also is it’s July and step volume, volume. we down.

in-house of we’re enhancements do. some that to utilization, have get tech you we that. the part adjustments of through takes the the system. some scripts challenges minutes the call the Ultimately, big further about going part when And a talked we make it to So is

of that productivity office to one through remaining field going tech we’re the more strength. to going consolidations, go the we’re maintenance As with shortly another The we that unlock here is roll optimization in route algorithms.

work it’s in And bundling move-in, tech post in main But huge ability. benefits system of can but one our convenient each that and that do the help. work get now, what’s right our of for that’ll of of for XX-day then not only will its we the part, resident orders not the that’s part is the ProCare, do sufficient the our in-house very beneficial. number tech that day So orders

So going there’s benefits step together the worked be to in. made as see Ultimately, we more but think the long-term. more systems we’re you to initial put we

John Pawlowski

lot the the of of ‘XX implementation is half actual in The back a ‘XX. going field level in the integration to early and happen and

personnel comfortable So get Tampa markets the than are and with you safer South do the are that? field month? past the comfortable the you How that were in Florida

Charles Young

the teams maintenance that mentioned, XX isolated are half all we’re be smoother. fact said, we As are second working already that leaders well in had with the on a impact. XX markets of the since were much And together the implemented already place out platform, we Like rollout things working go we’ve The couple well across those. of should year the of these and technology consolidated. to forward offices

be the slower QX both in QX, testing. seasonality place. how of materials to and measured and our multiple about we much rounds rollout of in of we training it had season thoughtful And very of look going do We’re terms implementing

the ready confident to ready. excited So new we really they’re and the feel teams to and get -- are They’re frankly, platform.

So we of rollout think it’ll smoother a final cleaner be and integration. much the

John Pawlowski

from portfolio. have from one, either, up on the California. be the know on area? initial homes in could of I wildfires estimate how some periphery are around displaced in many me Charles, benefit renters you Do any one your popping the Last damaged or two,

Charles Young

notify identified don't that closely. know now We fast. it vicinity closely. watching we're than and move we're watching pay in the We XXX those but to attention. right homes are more know closely We're and it We've about working very that fires

Operator

go comes ahead. Rich Next from question with Stanley. Hill Please Morgan

Rich Hill

to wanted the trends us the to particularly a that pretty on good of you trends can and maybe on on are you've you the what August, seeing if early update you the since side. I could, think trying address -- anything… get revenue Just expense But from, renewals any quarter give in an July end? side, think done or maybe job I

Ernie Freedman

So script, blended stayed think about steady X.X%, X.X%. our the I we highlighted July for at rental renewals in came in

we X.X%, the of up New into season, new go July. leads growth. in moved June strong that. as But of XX occupancy maintain did to our the we basis sure make in to lease points ’XX growth peak we We end was and to want relative we

year. And to make now. through occupancy maintain so our have that to want of we we're strong the attention still we keep the paying sure and demand we And rest

Rich Hill

focusing versus about pushing you rate, so mentioned you on And think occupancy as occupancy.

feeling if and previously, rate are the you’re you to rate bit the you're Some cycle will, we and a occupancy prioritizing confident. of Are change way a have that? multifamily the second you starting where how little about about your little in bit more third or as talked given still and maybe thinking push same cousins, approaching

Ernie Freedman

rate. balance find right of optimization Well, the to we're and the always trying occupancy

throughout fully of a growth about, advantage a allow to we keep talked But between try been trying pretty us to summer new maximize. to As new that of year. into the top renewals months. steady and renewals. to optimization to find the we're lease ultimately these we go should take the trying cycle power through cycles occupied, lease we've But before months attention and it's growth the slower pay It's leasing balance to slower the some which line right in every quarter are

Operator

Jade Please ahead. comes go question from Next Rahmani with KBW.

Jade Rahmani

if thoughts repealed, how your to Costa-Hawkins, going although it's you you So on updated go to and predict that's hard where would was react? think it

FredTuomi

it's research just globe just and agree the most which Costa-Hawkins, more needed. written of is points needed legal But and California. how stepping And of to -- control supply almost or don't build a new a many rent the price So familiar is know lack more where country housing studies the Costa-Hawkins, across that need across shows needed We not is rent housing are. the the State potential pretty laws economist perhaps that's every repeal the expert to people even but affordable when that I policy control or that back solution the have it's of and housing. it's importantly in additional

agreed has also the housing to and of of construction they control new the existing proven investment further housing. So that rent just dampen further

tenant developed long Costa-Hawkins that run So just over for proposition not run. California shortage wrong in long housing likely repeal XXXX but is legislation that's since answer the only and in would in this short worse, the long situation California’s potentially been the make it the running place and growing as

poles the are So And the that bad the results. it's this see constantly that showing voter opinion mixed likely on however, balance. just on testing it’s policy, we been they've

going close it pass, and does sure is industry California. is it rent rent to listed. continue of to both but to those their statewide of be the on going control ballot make to be the November for means prohibition the control. citizen So the sides that you're the that will case mean If have All will on doesn't issue that

it jurisdictions past choose rent had the it. do the have that to able be implement that in at So update control all and to not those it will could

rent to will decide it, local or what's control they to is going long flavor be Each do, to do little many reconcile. going this to And be going to. them implemented. what's a and the if like, not it they of is to not, to really going want of how look it's So for jurisdiction will to have time have -- take it decide

the its develop. have is will taken step back this in So a and problem improve defeated just top California industry rational find ways the try to then to decades many, if that's and many look meaningful take tenant cooperation situation to in to legislature position we solve together our with think I

We're state in not the we're Southern really San homes in not or not not we're of not we Northern the look hot portfolio across by, California in rent control of in our we're beds Francisco when California, Cruz, Berkley, Santa we're of close Santa at city and the we're So in areas. in the Monica.

small we we be our and very overall when small a a revenue. Company's homes egregiously our potentially very of look think proportion at portfolio, affected of the So would portion

in So to we're have and prepared either continue to going to we're November happens watch see way. what it, react just then to

Jade Rahmani

made. Can homes give could your the just And if those select percentages was you any it impacted be repealed? final you point where on perhaps of markets

FredTuomi

really the on likelihood and certain again, assessment be theoretical some any be total California homes, of none, research again of There’s see think of think in We California a and been mandating some around article most impact. which We no be that at is at revenue that. just might And rents in estimating it’s impacted term areas. really to that be of there will the it's I to looked XX,XXX XX% our -- homes portfolio going way is point California. then at there of backwards rolling Near this that. areas don't

will prices building be family the nice shortage another of if about prospects single is then go to, long There be had the that lack a there other that the term thing of generally. And going of be were up, we diminution, consequences is could will is if rentals home existing value of shift. rent gradual a a such because be housing it’d that of So to is control there housing. -- to one

if -- the very to prices to homes pricing. of good could we on we a has one So choose selling off at single option family homeowners

Jade Rahmani

share which demand industry noticed the ratio, of outs terms of internal I to any sales buy. trends, broader home in just the you and on move you we've in could have have an seen percentage do statistics in improvement And declined. also

market sales of in some constraints affordability and anything do or home the So declining think it’s function you a else?

FredTuomi

the first move our about second the move decline XX% This in XX.X%. Last to year it's of quarter, outs. the for around similar was it Jade, a and we've seen quarter, home purchases. year year-over-year reason out

they’re They -- the going it's And I because And today’s in service the our in trend well So better a the I now for a our But row. think we of have we’ve satisfied that that seeing up, that also quarters for homes. in are with they're opportunity all answer a seen residents importantly it’s economic above. from a us. They're even think they're for see located. stay homes we receiving convenient. most two reason They're turnover little environment, maybe them like that in. better to bit

Operator

with Gilbert BTIG. Please Next from question Ryan comes go ahead.

Ryan Gilbert

I Just seems on July. trends question, it in guess following strong up demand the stayed have last like

seeing it’s in are price you’re think traffic at higher inventory an if or price re-leased or I’m I we seeing interest all? higher new impacted or that either resell ability in point rental or in rents impacting if your home increase raise -- some markets. wondering markets, appreciation particularly And to if that your

Dallas Tanner

any real haven’t in of seen In we demand, change the terms fundamentals.

market mentioned Charles parts of out are estate. able country we especially at the pretty that rates As where aggressive, to we’ve own earlier, real to been go

to are our the quarter than If look or and at of to most the in from as benefiting about in blended inventory of months fundamentals data And markets late builders in housing, the in and much in think terms some X,XXX the rate demand for That are supply you X.X%, current It’s their for some less with XXs we our less two in of MLS. is of down West of we example, those XX% the at affordability and macro average numbers, less points factors business. supply like at somewhere terms today. feet how in of general, developing two growth start pipeline. look Coast all on XX% of had us favorable then you square price

XX% in that markets of rents it turnovers around necessarily haven’t And for as we’re that point a growth -- the some we consistent that achieving. proxy So Charles seen in the earlier in, at we’re XX%. remain we’re that because seeing

Fred Tuomi

last as the to referring high tight very home example over you inventory, price of appreciation Seattle think maybe very an I several years.

if people to that for move purchasing you the couldn’t of look point pursue in where But numbers. one portfolio homeownership home outs the is I in fell Seattle, price year-over-year. markets think this got same our a at actually just

not it’s impacting lifestyle. again, really enjoy impacting level the demographic people not of leasing and So our the market, our

Ryan Gilbert

end Are forecasts? the to quarter-to-date expecting you then the improvement, into for service year quarter? is And you regarding you guess, then do guess, timeline expected productivity sounds I the what to tech And achieving your seeing third a levels be the productivity going you’re by think productivity. XXXX. I back that initial of it in guess I like productivity

Charles Young

levels the here. We our to the expect to get over second of productivity back of year normal half

our our makes operated of scale, do is But confident What we and that combined techs the proximity density and advantages, still because is not and we’re is, distance techs excited place technology of we’re advantage. our orders. a that the all as as power the able we companies that’s always homes a the work both season volume and our us also have it’s in that peak to real more We’re unlock experience, technology we’re the and at at be before. the to where shorter the highest for work the its between implementing happens highest at put level what we’ll productivity density, get where here order have

our start of the route before XXXX. half platform we we levels back to and as the about prior the go talked software that’s unified as as to a year, see think we second possibly So operating advantages get optimization to where we’ll I overachieve to into real about as get

Ryan Gilbert

just I And to follow-up. guess

the going you to that's do work and the do seeing productivity into think you you of is have this third in later issue, on think the you this quarter? happen fourth? -- Or improvement an on started As to quarter improvement in third going the

Charles Young

the started we made. and that improvement already know to more better. we But We've get see do even going that changes it's to going there's with to the we're

Fred Tuomi

some daily implementation And starting June place. just a to able the this productivity markets, immediately. to trend measures we in make of technology that of would our the when add platform noticed and instead basis completed I were down the we that We platform integration is to initially up, all we're that on in is part to adjustments across so done.

So logic and improvement. Charles able was literally the we start day team to of some get some in seeing tweak dispatch scripts together, the next the could

day. they in-house not impact the gradual of things this retool, route other of It's some per and helps have improvements it’s to dispatch, on such that as seeing number begun. we're of So adjust then to but we certainly productivity tech work already that of such order homes, the optimization per metrics the parameters just have as the platform the number

Operator

from comes Zelman go with Ivy Please question & Zelman ahead. Associates. Next

Ivy Zelman

I what you up so increase cadence was expenses the was and share by can repair One in for a month, how a get you just sense and June? could had we maintenance year-over-year much end couple. in the

Ernie Freedman

caught results, monthly provide to going noise financial get get is not months. don't Accruals up. up, We're there caught between

to So provide we're not prepared that.

Ivy Zelman

markets portfolio. Are pressure there any across side over inventory taking of terms some than others? next back power, pricing On less in step and you your supply you anticipate just the just attractive in couple and looking of where particular that to your a years the markets supply find

Dallas Tanner

much to demand new really of around supply north Coast As our higher entry, located I the being for barrier-to-entry. for markets to difficult -- remember It's properties new is so just part want our point barrier with market enter where those rents $X,XXX, our price mentioned be where that’s typically in to of And to you certainly, the line sub-markets very into West amount products we those invest. that are not incredible in average are earlier important and we called of higher parts limited see that and supply.

those our have I'd that our in had exposure massive be to none. and country in much don't parts of don't and you little some where more Midwest for, But call to a in some concerned So see if entrants lower portfolio, new we have of we it, barrier new that. development. we the areas, markets, entries of of

insulated we’re areas we’re you somewhere $X.XX of a and right year of new other about So The add need around bit developing the if only constraints. units per we’re in thing supply the terms at pretty macros I'll being from to $X.X only $X.X is in And now. bullish U.S., we million look the some million those million. in

to we next demand feel as XX look the supply fundamentals XX forward generally. the to So months free safe

Ivy Zelman

We're my Thanks you totally with answering for questions. on that.

You guys have weekend. good a

Operator

from Markets. comes Wes question RBC the ahead. Golladay with Capital And Please go

Wes Golladay

update repair curious unit have just Could had go maintenance to guide? maybe and to long the a on versus back you days we and term an on does take revenue same-store of how the turn a issues, it impact could you Did your unit if it longer your provide expectations?

Charles Young

and maintenance on occupied homes. is Repair really

haven't about turns So we on house, because pretty are. we're is consistent. pace really XX but volume where up seen on It been and a volume. of this a we steps to with any we our and range in coming last is a time seasonality year little where time in days turn year this the and the bit XX which year, a were turn And impact, we high of typically to

Fred Tuomi

were track number. between we and metric the that one resident And And is same the occupancy we downtime and vacancy. year quarter-over-over exactly days ago the

Wes Golladay

And is to more in do going half, one you we process, to those just methodical I you do by it going the to more used. it mean maybe back think a a a initiatives at methodical Are these you I going or do in time, be market when words said you're general?

Charles Young

during really on thoughtful early say it take much time that around how side. the platform platform do and not rent piloted depends this being how unified by training, methodical, teams idea at operating we But it ready, week of it, When terms is it's plan homes I thoughtful. getting we've but going rolling couple our to many we're then roll in through work the for thoughtful really of and And can the put can exact really then so the speed that paying out. on now we on being month of once. them then and Well, you being rollout the markets

piece that So and have we And last a of it Web in site, really expect year. management platform, to-date our start all on terms one fourth and pretty been is to the think we've plan in this done working roll smoothly. quarter will this we place in the based revenue has of we on

Operator

like back any conference this At over to session. this I'd question-and-answer will management to the today's remarks. time, conclude for turn closing

Greg Van Winkle

your We look Thank always the we as Okay, great. you. your interest today your This Thank to at forward upcoming many of seeing time September and is questions. again. Greg you much all for very appreciate and you Van conferences.

Operator

has The conference concluded. We want presentation. now thank to attending for you today's

disconnect. may now You

Invitation Homes (INVH) 10 Aug 182018 Q2 Earnings call transcript