Invitation Homes (INVH) 7 May 192019 Q1 Earnings call transcript

Company Profile

Participants

Greg Van Winkle	Vice President-Investor Relations
Dallas Tanner	President and Chief Executive Officer
Charles Young	Chief Operating Officer
Ernie Freedman	Chief Financial Officer
Alex Barker	Baird
Nick Joseph	Citi
Shirley Wu	Bank of America Merrill Lynch
Derek Johnston	Deutsche Bank
Jason Green	Evercore
Rich Hill	Morgan Stanley
Hardik Goel	Zelman & Associates
Haendel St. Juste	Mizuho
Buck Horne	Raymond James
Sam Cho	Credit Suisse
Mike Bilerman	Citi
John Pawlowski	Green Street Advisors
Jade Rahmani	KBW
Wes Golladay	RBC Capital Markets

Call transcript

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Operator

Greetings, and welcome to the Invitation Homes First Quarter 2019 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, Vice President of Investor Relations. Please go ahead.

Greg Van Winkle

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

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

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

Dallas Tanner

Thank you, Greg.

a rear now. to Let integration in me off merger AFFO XX% With growth hitting view right start time start we our mirror. in and business are are by saying first with our this exciting is to a the for stride the quarter, XXXX very great

ever in before. also singular unified NOI, discuss core peak detail. season tools Cost into efficiency our AFFO impactful which everyone enabling and increase platform than expected more been to thrilled far than more a guidance, better have to so in us on are go FFO We will initiatives that Ernie features had XXXX we've with

on to comments, three In efficient We we're not things. more like are continuing and I'd stopping. touch my to get

First, our year. strong start to the

our efforts. to and our hope we ever quarter recycling first review XX.X%. our had same-store capital night. our growth, average everyone up the work Highlights of results update merger done to teams best integration performance have X.X% I NOI first included the Second, last reported chance wrap occupancy on third, of an quarter a

renewal in prior that and cost New rent outpace and year X% growth maintain. a decrease to net

what Let unique is our to execution. fantastic. In some driving it results. strong are and on competitive short, me color comes things. these add Fundamentals Favorable market advantages three down fundamentals,

in at is formations Invitation supply expected in or household U.S. to single-family than XX% are the New not average. Homes pace demand, especially markets with XXXX where grow keeping almost X% greater

leasing With and work single-family average more the and Residents also age managed What aging neighborhoods old, just convenience favor. and to our people we of jobs of Homes our great to single-family affordability I lifestyle. versus convinced a of leasing makes Invitation the continues living a generation The in resident our also a home professionally described, are affordable the will toward more schools. close choosing years to are continue buying XX is able convenient millennial lifestyle while attractive enjoy in their leasing unique home locations.

execution. better management us data costs to quality us system a continue large enables of and our high better at at give also picture scale a more are a us that clear On we that service best-in-class unique of to to deliver and the amount digest market. residents Our to can a get efficient note, with provides revenue

rate balance occupancy. Our field achieving and revenue together teams worked have for management and right between and and to develop refine data process team the rental the

and simplification with us. the results integration now the side the On our are behind better expense systems organization of driving

opportunity making we to us and across Newly initiatives rollout more repairs our portfolio. see ProCare also additional are improve efficient as we implemented maintenance more fully and

first have as summer do. lies All with, in came the results we were months. spring to and service of very we but and the leasing that to activity pickup pleased year drive The work ahead quarter most requests of together still that important part

are are operational We given into during season, diligence carrying more takes period. this that optimistic it peak recognize to the momentum we even maintain but excellence

teams for energized are Our ahead. well task prepared this and

the thank our done piece to merger want the I final with job Next, the for command they integration. country and teams have across of supper

distractions our they resident fewer been better markets. every day. platform, with implemented and one focus one world now deliver With do systems unified and operating teams be operating Our in best, our are what of do on equipped team XX platform class the to to has each excited on service

take opportunity the and moving also for and improvements start as identify the to integration. innovate from process additional platform on areas to We continue we

homes gross Finally, for we refine recycling we and capital $XXX with million. the growth long-term towards our the have goals In made in to XXXX strides XXX proceeds continue first quarter, our prospects portfolio lower significant already year. of sold for

of in Las of we believe below occupied $X,XXX well addition $XX investment. submarkets location current acquire homes per in of In with quality and bulk of million. for Atlanta rates. In deleveraging, average Vegas homes proceeds place from for million with and we we and these April, a to to better XX% in-fill acquisition is homes sales month, these $XXX are use market XXX XXX rents acquired which

In for hard homes expect the am integration have reiterating future XX I greater place. months to to by scale. operating wrap enthusiastic I'll Invitation last margins into of these of higher economies everything into bringing Homes. fall exciting of our addition, on the about we how up worked with we achieve It's platform see by

get teams operating our efficient. continue Now more to

on provide first deliver teams sheet. enhance are continue continue I'll Charles ever portfolio. And turn Officer residents. detail our than leverage our Young, that, operating over Operating an our to to experience we more it results. markets living for growth more and Chief our outstanding Our With to quarter capital our management the to equipped asset better to believe teams balance drive reduce on I

Charles Young

Thank you, Dallas.

in it board on of towards in Without results And from improvement XXXX service the for revenues our we showing in the carried I'll one quarter in more volume evidenced excellent resident through from put of to costs year-over-year. normal. our rate great increase comparison occupancy we year-over-year. resident favorable continues increase integration the in service for X.X% standing Controllable to X.X% recoveries. team's markets our repairs was higher fundamentals first through our XX.X% a XXXX occupancy off new and The than quarter now teams in upcoming of made navigated and expenses of put platform. results Our platform is monthly achieve first the that the all by And execution declines peak of net XX.X% down in field. first At better the This first Same-store work of quarter. on proud of our A in down the I'm I'm further of order enthusiasm together and same-store we're the driven to end first to tackle quarter on strong were we you position of NOI teams, Same-store another the heights XX expenses. to turnover. are this were the and controllable the point momentum progress residents and the basis growth in walk most portion quarter time, than quarter excited operating grew us proud season. same the to a the to X.X% kick residents XXXX. when year-over-year expected core attributable the portfolio and rental quarter. increased detail. in a was by average X.X% by quality average core maintenance

the quarter the from versus our things accomplish was contributed due of our In expectation results. teams However, our to I’ll teams. execution first point that the our to the for majority outperformance particular, three great

system we improvements for success process First, turns. continuing drive and repairs, maintenance to had and

we taxes. X.X% lower synergies our integration result turnover. our realize Second, offsetting a as merger the costs third, of Partially, was resident reduction increase And significant in controllable efforts. a in same-store property incurred we property-level

one the to main of just like quarter expand on that strong I'd Next, drivers I of mentioned. our

associated Our rollout technicians the call, percentage talked than an by legacy technology This of in their efficiency in update our just organization. all maintenance homes to the our and repair I requests with in-house uptick R&M. On home and work on gains a quarter enabled to important significant and addressed about difference our or perform the resulted internal our in an for parties. technicians maintenance portfolio. rather that of the service fourth third Not made productivity of of an platform the last quarter's any

months, to percentage it. significantly we demanding we expect Maintenance team. in-house that had on our normal in I positioned In with spring the quarter stronger and with in don't the summer pleased seasonal the not believe, ahead. impact That from quarter. are saw in see task are said, first for same execution we well results, increases level line we peak volume are the that celebrating our We the even trends, but season completion first

integration and integration an I'll on the the improvements now of months. last of and all the provide nine Now the us is field with systems process update we've behind over R&M our teams. made

peak operate to on with this the the unified teams their than quarter report to our their get tools efforts Dallas company. our by system. schedule to positive enter platform allow better and million rate the accomplished range in simpler execution. much exceptional guidance. with Integration $XX milestone XX, integration our an million market. midpoint compares I'm season disposal. It our and attention at of altogether from annualized been of synergies have Feedback achievement allows we guidance This unlocked and back to of in for more synergy important basics as they're happy is operational extremely field end vote of This our March providing all one of will XXXX. an in teams environment in second excited our $XX to million As had implemented the the ahead service also It teams resident also the operating run have mentioned, to XXXX. on every field to the and field of of we basis synergies $XX a

more and to take our rolling portfolio. the In to positioned going across for forward savings model Service step push next we'll ProCare our out addition, procurement better in be

new increased renewal rent of they in were quarter low quarter time the trends drove first XXXX. to continued XX% Renewals were first first quarter points of growth This basis XXX higher XX to XX-month basis. blended resident X.X%. time, a an At the on year-over-year. basis X.X% all growth turnover leases same points lease reaching increased to and of cover or XXXX Finally, in higher decrease trailing points in Both and new the leasing of April basis XXXX. and I'll the XX rent X.X% than

are result, As With teams points we Freedman. the platform. our X.X%, to as at to in rent to XXXX fundamental position, send XX us occupancy call while first to as to growth season. a of average our we complete in position in April you Blended strong this XX averaged and year-over-year. confident I Rent leasing of Officer, basis back a diligently in like Chief basis tailwinds excellence, up trends peak of remained working our focusing increased year-over-year very Financial occupancy I'll year-over-year. service the and points XX.X%. and in integration for And on averaged over XX.X% maintenance resident turn quarter April and occupancy the points operational With a putting entered our by that, huge basis also Ernie growth thank XXX a encouraging occupancy well.

Ernie Freedman

Today, XXXX you, updated quarter following will first I capital cover sheet markets and the Balance guidance. Thank financial the activity, for and results topics: Charles.

in LIBOR we interest First, further. progress average build XXX we markets balance operations debt + dispositions. XXXX, activity, using of carried basis prepaid million cash In the we and capital April The made points. XXXX I'll by first of cover quarter the and from weighted a we secured sheet on rate $XXX debt in generated where continue of to deleveraging prepaid

the secured to at down other of from times due debt XXXX, until of our debt Our million notes, have we EBITDA activity XXXX. the times net the conversion no net to XXXX quarter. at first brings times, was end debt of nine maturing end coming forma the Outside secured in X.X of first EBITDA of convertible XXXX. debt $XXX Pro to X.X quarter

continue in As we in refinancing XXXX activity anticipate than to such, less XXXX.

attractive pursue refinancing if debt will part However, remain we we to opportunistic, and will our present as of prioritize an grade themselves prepayments rating. efforts opportunities investment continue to

in facility. cash interest financial primarily to unrestricted FFO will NOI combination expense. per an Our our results. billion end liquidity I’ll quarter guidance. increased and is share year-over-year XX.X% capacity over at XXXX cover credit cash quarter increase $X.XX. on of now $X.XX cover FFO $X.X due Last and I to through first Core lower year-over-year XXXX was thing, to undrawn a XX.X% increased our

Dallas we had season. peak great into As going quarter and discussed, a well positioned Charles first and/or

While perform season, to we are well optimistic we through continue for not that taking we will are granted. it peak

year our by X% points a by growth to As XXXX X% point same-store growth X%, such, guidance XX we raising basis driven guidance to full XX core reduction in same-store expense are to to X%. basis NOI

FFO everyone our expectations revenue to a at XXXX year comps our perspective, full of progresses. $X.XX X.X% XXXX. than XXXX for remind $X.XX of X.X% $X.XX AFFO. that AFFO the maintaining core for start share by share want I become the year We're core guidance $X.XX per occupancy We as also $X.XX to growth FFO same-store they easier to are core From to were in raising and to per timing and will

We long efforts that we hopeful Regarding impact perform than and was turn initial picture there and I spring a in and At the growth our out the time, we maintenance fourth for and/or volumes it provided the expectations guidance. a pickup believe caution us. that is the that for our summer. were and contemplated we seasonal two fourth pleased in expect quarters want expenses, could their typically in ahead laid and XXXX runway quarter same we last we quarter quarters have. lower in the the greater would first of big better of everyone From perspective, that to of first are XXXX and

start performance to as fundamentals We year advantage. our Single and provide scale locations are Rental differentiated Family not to continue a our revenue us surprised portfolio with the and favor

to We forward create to opportunities other business. value also our look in

efficiency. resident and beginning rollout to experience. of and pursue and continue about recycling ProCare enhance residences excited stay in active markets, additional service enhancing our across We'll should better projects are service offerings value the of expense which all We CapEx our drive investing capital, to to also ancillary

of operator, at the for that would exciting up for mentioned Dallas Invitation the questions? please very Homes. call, a our time line As start you With it’s open

Operator

go We comes session. now Baird. [Operator Instructions] will Drew Our the question with ahead. begin first Please from question-and-answer Babin

Alex Barker

Drew. morning. is Alex This for Good on

side April other what or markets are at outperforming Looking spreads, the leasing expectations. on underperforming your

of and out generally, kind sneak peak season guys are rate guys notices what you leasing that As at first at you get renewal your sending today?

Charles Young

Yes. Hi, Alex, it’s Charles. Yes.

Coast West driving been really So the has our results.

and increases over blended from and lease renewal across look California on rent had growth our year-over-year And QX You is new into up. board. to Phoenix, in Seattle occupancy we've rates, the

ask well. some our occupancy renewal good a been signs, In the sixes asked both positive terms to and the achieved. addition from of actual to West and as Tampa it results in we've So have all where excited in pushes really shown really Texas there's low good and occupancy spread in in rate. the We're had Denver, usually out really

Alex Barker

then year. front, looks on fees after across have out Charles, HOA expense it sure for XX% bumps follow-up being significantly And I'm were stable pretty the the turned board. like you last up Understood.

So can you that going on little a what's on line? color speak in

Charles Young

Yes. was No, the HOA improvement as Look, finalize there could some we integration, management question. process. we realized the good do in we that

attributable our that considered of accrual the was shouldn't HOA is It as expense so result recurring. a to on And This line. be really off merger.

we're positioned is did have the smoothly being responsibility right We well the personnel confident the to short we're QX. resolved the process and And right integration in by the place, of great expect pre-merger. the news HOA to today and that like we done manage true-up after we with end this be term having

Alex Barker

one about what get CapEx year, and looks cadence then more a And like talked Curious, for this is being recurring spend one Perfect. holding CapEx and up Last last the little the XQ that strong I if obviously, on could of just quick true? really is number we still Ernie. quarter, different. know X% color X% you timing if after about

Ernie Freedman

to total be in be team the The to revise the which us in first outperformance cost X% the we is more allowed in CapEx. thought actually expectations quarter has we'd that about the maintain, both OpEx to great had range. year-over-year. net the and expect we'd those Yes, up talked We increased Sure. the slats about by to X%

year. definitely it bit bit earlier talked So this be about should better a little little than a we

Alex Barker

for Great. Thanks taking questions. my

Operator

Please from with comes Joseph go Nick Citi. ahead. question next Our

Nick Joseph

comps above in slightly get full $X.XX you've you first the just of high rate of Ernie, for expense occupancy on Thanks. year? line But terms around end, the year run guidance, other the are if is walked of revenue run of good remainder rate make the and FFO to through a items core that XQ some the same-store in a quarter, from difficult side. predictive any terms the same-store not there

Ernie Freedman

Nick, appreciate the the question. to a There’s see Yes. up the things, you’re tick One, of we'll expense year. interest few remainder for asking I

we rate number the swaps, to swaps rate the the swap. term our that having one inherited in in merger the a As rate higher lower up disclosed swap year of started It over seven it three, with five, step a period. where were quarterly of XX-Qs, progressed the and for we entire

year. number of in so the first of those a And reset swaps half the

swaps, that that do full we basis, up the on expect so just $X.XX about And $X.XX, you Nick. if I were for a year would reduce to by annualize step

at of some notes have that it. it shares roughly we paying point That's But this July footnotes in to is you due in the that still convert half Those In will our convertible interest we and what though Currently, year. they that on costs We're addition, X. to for the shares at come diluted a slightly that there's supplemental when we're treating convert those. talked with on still and $X.XX that the the $X.XXX around expense about second this those mentioned. debt, point. because the

up So peak. waffle lower margins seasonal. those is We do two like $X.XX, orders, out quarter. see the to $X.XX. little third so around bit and two our see I more HVAC, a margin. business work decline third mainly items you'll that, that alone typically for historically Then for the in a the bring things expenses Certainly us season point other quarter, down That's ramp is in

quarter for from So first their the slightly to conservative spent teams half to second the money would finally, of generally the year pretty with are G&A And for annualize then half NOI that. off some be save in year. the of the up first

So up a down third second, into that's toward you just more something than the $X.XX of you'll ramp from those and go see as that combined All range. mentioned fourth you quarter. the things bit bring the guidance our to G&A we would midpoint number

Nick Joseph

rate cap it That's Thanks. the upside saw mentioned just the Invitation very on homes but was acquisition, And XX% was their bulk that? helpful. the through Homes I putting some on occupied, you think, you platform. what for that

stabilized as acquisition what's bulk well? of kind So cap that rate for a

Dallas Tanner

Dallas. Hi, is Yes. this Nick,

that spot the the next that, cap think it we'd I'd third way the sixes X.X%, renewals call will couple turn in a about of that, low and of terms that that rate of of portfolio getting going we've near of are that in-place see a On term. it's And every modeled on just like say years. kind that, pricing on the day-one, to depending over year. that X.X% about things And kind is

Nick Joseph

Thanks.

Operator

Our go Shirley ahead. Bank Wu next Please Lynch. Merrill with question comes of America from

Shirley Wu

guys. morning Good

XQ, are source more one-off you could or little of of bulk going they're transaction XXXX, and terms while, other bit the like – the for how maybe to your in in you what acquisition rest expectations more that acquisition on to So a color that? the than do bulk us do continue give side, of the

Ernie Freedman

Well, meeting XXXX. we’re terms a goals really off for of certainly allocation start to good capital in our

approach. a bulk, In steady we terms of maintain pretty

take themselves we normal quarter number really of assets we're for portfolio perspective. those in And of ours of buy if would we we that XXXX, portfolios. opportunities been a certainly the circumstance, years, had seen we of Atlanta, to familiar sell us, a footprints guidance. a we'll year, or – of the definitely a and when or it's competitor expect the a sold of the quarter, both last look Las as both bought. the with that a In surely remainder present of disposition I fourth we've and kind us, particular side, market Vegas like And a in the active our from for You've of this it and through was number in the terms maintain on

talked being buying but both to $XXX I and of a we'll year think of neutral to net pay this about somewhere in $XXX kind with we between million selling definitely million attention focus, to during front in few there the perspective. out now smaller real of us summer lead of months. our what scale but nothing There would a opportunities change that comes are us right

Shirley Wu

in Got do mortgage it. start a you XX-year when come more rate especially home move spring to buying to the And that expect fact, season buying, consider down people out recently, the leasing home? as – has the you in

Ernie Freedman

No, the the today. pretty we years, in the shifts better best it's affordability in a XX been the we've as have I have factor, into pretty where and pushing mean markets customers rates but it XX% terms leasing last part couple couple that more and good affordability versus in of ownership. attractive option markets of in to able our preferably some to between rate less Roughly than many see lease volatility own constant our decision for to much XX of XX% be really bigger dislocation of consistent. perhaps maybe seen pretty is is some homeownership or small years, been of over of more past fact

Shirley Wu

color. for Great. Thanks the

Operator

Our Bank. Johnston from ahead. Derek with comes Deutsche next go question Please

Derek Johnston

the as planning decide keep you push raising giving aggressively you you summer were the measures other to season, with you you leasing did more revenue occupancy? How why And did spring rents busy doing? and unchanged? planning, everyone. guys even guidance it consider in and to high Hi of your Are level

Charles Young

Hi. Yes.

The So as the expiration is season way the question. this set is we first answer moving. demand I’ll have that are is our curve families high Charles. lease QX, QX

we really so that, and a of a rents renewals our on stay From there. of us, kind strong out our have will in been set the what So and that see new you'll high lease kind mess demand expirations with market higher is based that's growth and integration given just performance season teams overall, It's that have really steady what both demand well. really the as for doing. of been great proud the

So we that's see demand come side. the lease kind the how new summer of on to the

Ernie Freedman

line regarding Derek, quarter increase first we easiest signaled our like that basis ahead And revenue in them quarter quarter We the to year-over-year guidance, where in going the had be expect first the point on came occupancy to not maintain expectations. – We're XX of be an was in did comp first to going continue quarter. perspective. to an occupancy from we slightly

bit early too at yet us give numbers. the would opportunity we guidance up year X.X% slightly did in a be a April went the things on keep we to So little X% where out said we'll plus as during better April. X.X%. it occupancy would to first at make a rate in eye and range certainly But in But that play based quarter get our are of well an as to do minus they quarter. on That and, on we're how executing better we'll and bit or to will they with the or in kept rental as midpoint mentioned was thought started an that [Audio currently. we second over the they around as team see Dip] That revenue. little He on the that had did how adjustment the rate be you'd and

Derek Johnston

secondly discuss That in turn the the rest for see first sense. just quarter so how can churn churn, And how times makes on and you and out shaking XXXX? trended turn do then of the you

Charles Young

Yes. This is Charles.

XX terms as we What construction of the that's a seasonal is that's down. a though, in the see and QX, rehab, where homes in of in in to a a terms our of efficiency always days actual looking QX. gets bring of we days demand a up in but bit to metric little were higher QX. So you'll It's April, we're want but that in trending bit and little for be XX little turning typical,

you're last good and to move-in, In were referring terms think year of so move-out churn, but to where trends we're in seeing we very April QX, in of re-residence, down positive. days about we're I from that's

Ernie Freedman

And there to like to And prediction overall. prepared for a at will the turnover XX-month is year-over-year hard in was remarks, mentioned bold I on lowest trailing That's make us it's as the we've down really on been be basis. continue whether it's XX% seen. a

over a is really quarters. the the at right and it low but hard that So way lower certainly that to feel the the to of in next the still, is we delivering go it's service, we certainly not end to we're now on, where it But but go opportunity keep turnover see make predict where may good on there would few prediction it's certainly that opportunity, though we're in position a scale.

Derek Johnston

stuff. Great everyone. Thanks,

Operator

comes Jason with go Please question from next Evercore. ahead. Our Green

Jason Green

morning. Good

would Just I bit quarter. was a you're to very if peak on wondering, little as unique season. or that Turnover turnover the reduce seeing more. touch wanted suggest turnover low there leasing quarter into anything that came about this there's to we will over in out were that this head the continue turning anything that homes

Charles Young

service think turned, is But because of the helpful resident our our as and think, we as I back turnover really low homes of Charles. about that special said, for is the our question. All the we Teams, This said, executing the in is right. of Thanks Nothing at tailwinds general. I quality the well. for homes. quality are the industry

is on affordability a that favor. Now platform, And in working earlier, it's we're Dallas also our mentioned one factor.

what So control can were focused and we and that's out great on service really home. putting we quality

Jason Green

comparable And turned less that guess versus is a you and I quarter the and it really how flat, in same-store the fact really coming to efficiency much much operations? can is in this increased to homes that due X,XXX due of how quantify expenditures of quarter

Ernie Freedman

Yes.

Jason, of of top our head, – that X,XXX the $X,XXX off assume less run $X,XXX about expense. a I Just turns operating a expense, of typically operating my turns

to So performing fact I'd say that come from that Most better. certainly that. come about a from of that are points teams Charles X just point, may the And X.X things the it's the through it. have trying was came the lower on us of today’s portion what for of about not but so turnover in with R&M, the a do it, regards majority talked to certainly we're

Jason Green

Got it. Thank you.

Operator

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

Rich Hill

we about with by good would lot guys. you one-time on driven increases Hey, late forward and were as follow-up taxes property a morning last taxes, XXXX those going just M&A. controllable obviously how year there's Why discussion of be the property don't

I that? the wondering that really XQ you put context what in X.X% if drove saw in and increase So we could

Ernie Freedman

Sure.

home signaled, best up be quarter also because So to X%s be taxes quarter for we've we in had tough would And fourth we'd Rich, we that the the our expect thought comp. had appreciation. good price the year, the had the because that we we mentioned

rate weren't actually that put what little better anticipating that So Washington we drove than the that expectation legislation some the was limited we millage out actually came an in State that. increases. a And of X.X% and

the portfolio State guy was for year. we're and it will we that have than X,XXX of would rest homes Seattle, bigger have anticipated have through – a of unique, good we the we So carry Washington, about of in a

So Washington about bigger Texas majority September us. everyone start the states But we'll and of does that, I like especially real Georgia. early. as our Florida, out taxes, The of comes few that states in that find well. out that what we'll helped estate October, one is caution heading will

to go, ways quarter with expected put real a be but path about got regards first us at we to we've on taxes. where the estate a so to least And

Rich Hill

it. should approach starts a trying at bit conservative to be of cost year. be take Got that? back maybe rest think – just Thank you the X.XX% helpful. And That's you XQ are How little portion as then Is you. the obviously higher just guide implies a to of expenses, I the this the for going year. the the we about to of thinking mentioned, had

Ernie Freedman

think things will on when time to that's new probably the and setting we our it our want inappropriately, guidance. were season be have through so happened, the right Rich. I with order about think to and work Yes, be going happy We how peak systems but first way cautious quarter it,

looking correct the revise it rest we're going number's everyone, the implies how And still. we We of go through it growth sure we're we and the would still things that expect about not perfectly to up. further the guidance happen. let's did, We even math, want to make for matched flat be You at certainly smart clear year. being with do

And some so that we're leave want for room sure to trying make well. we to as

the And we successful helping So good of remainder a pleased about feel to to We're us first have set with how certainly in. the control. came we're year regards up quarter with the numbers. ourselves to expense

Rich Hill

Great. really Thanks, on Ernie. that, executed Congrats well quarter.

Ernie Freedman

Thank you.

Operator

with comes & Our go Please Goel Associates. next from ahead. Hardik question Zelman

Hardik Goel

significant. turnover to And last Charles, of year-over-year decline Hey much guys, the much was season you peak great one wondering from leasing guess. pretty better Congratulations. guys how to give quarter. just was over decline? just and pricing I'm just organic you intentional And how moving end maybe year was leases the that The I for

Charles Young

both. a think bit little I of Yes,

portfolios were lease together, put the we curve. As being that expiration around thoughtful we

well, single it's help. platform we're and paying demand got some of schedule But dividends. had ahead that is look, to So healthy, executing we the

high help to and continue we will service We over it'll think long-haul provide us. the quality

can then out they do – really doing You best-in-class. put I are all enough, can't and what the that thank the best there. teams together really the them

the lot So a in it's field. of execution

Hardik Goel

follow-up quick good was seasonal – does that about as it the costs? that other you hasn't that, costs. a And Is some drivers the leverage one there. in because think of really How What There would just as expense are that? on past? personnel been

Ernie Freedman

other Hardik, as regards rolled and platform. regards it integration, where we Yes, Ernie. further that almost this was with time we full, the and with is of merger into savings entirely to We this due last year seeing year did personnel XXXX. to staffing It’s the to started

in about just final being levels. we're with at As staffing gotten XXXX, just we the and gotten completed we our integration

the really drove staffing that the it's that So from levels integration.

Hardik Goel

That's Thanks. all it. for me. Got

Operator

question Haendel St. next from Our comes

ahead. with Please go Juste Mizuho.

Haendel St. Juste

morning good there. out Hey,

some kudos beyond you. I guess So the I'm results recent first do broadly expense efficiencies the of The get after the Charles, maybe quarter. your great the and think benefits I you where synergies. in now? expense to merger systems longer the after thinking improved long out, guess term on systems platform for term the more just What curious for you of merger rate you first the run and them. is synergies kind from want

Charles Young

Yes.

did of implemented a really controls execution It's real year. discussed out Teams and it resident left the the benefit focused that for a system with that that QX. finish do train up that integration think that QX in and last everybody great what's as we're we systems on we kind ProCare and partnership on the going. of Haendel, put we the cost I get internal in the added late to thanks lot of we us to roll implementation and with with So

going coming have have also the to out in We fleet that's future that's benefit. management, some

be. that's hard numbers. exactly up So quantify execute. We're continue put going good it's to to We've what to to going

said, that's the Ernie test litmus season peak and here. As upcoming is

focus. predict, hard and well to we're going going do doing continue to to what to we're but to. what and we said we we're executing supposed were So we're And

Haendel St. Juste

until not being Got it. it between term? guidance’s, more less of guess it. question support back much maybe and the it, X%, or projection reflecting expense incremental the growth this should last an answer, expense certainly factors growth few we are on systems that? some year the business to the But X% year certainly is this clustering can about business and of there portfolio of inflationary costs. we forced your the is that into is view the was coming difficult some this about Got to think there too rethink hiccups I but the press And operational years a of expense to but to a inflationary, fears higher of used Or plus as inflation over still that this that the long and thinking that be

Ernie Freedman

a Yes. in think going the general broadly talked And Haendel, is we're swing be it we've Ernie. about two This residential. at not I take different much of to I'll before, think, I it. components,

we the there inflationary that we’ve be will to and plus, going the things are probably inflationary. equal see probably you saw it's inflationary residential that they of view So laid We're minus. when think that be

a I I taxes because come to the think a us, we residential We're two which are of company taxes the estate where though real for about home bigger expenses there's they We're best in it component appreciation. differentiators price are as important our not talk commercial residential of in estate close as at product. the XX% we're then is markets broader residential, multifamily. expenses, an product. real are we're versus from our and comes and when One industry a community,

So of more I that be that the business. a that to Offsetting that. as at of in least is near think think and stages still you will as an that, lend plus we may for little early running inflationary because we're term, a industry

and So there's a of Charles ProCare opportunities around around like efficiencies. those mentioned that. couple management things And for fleet

hundreds to worked for been to overall, last for that last hundreds And we that business you'd help the for offset years the operate has it better that years. capabilities have like we of folks have there with But the don't. think to the a around this think and There's a expertise hundreds we little some be bit and I that have family and for others only single we institutionalized few hundreds homes. it's the been have would years I'd near do technology for least hope able at So term, and to and of the can things that. scale

be all washes residential to that that you profile broader in see world. a hopefully similar So the very out would

Haendel St. Juste

you you. of have and pursuing here, about initiatives you're service Erine, revenue. bit potential a quick and impact that for you some timing ancillary Thank talk the on one while Can potential I

Ernie Freedman

I'm big over Dallas, sitting of his to going to he's – as certainly, now. been he's that where it’s one pass focuses,

Dallas Tanner

good Hi, or our Smart Ernie. a And rates A somewhere to working know, we've adoption Home of we're adoption as you rates. Thanks, Haendel. we're minus. between enhance Those today things really are couple offerings. done some on, implementation with those XX%-plus and of job looking

we're leasing in of residents And experience other to there longer see residents it our think we now better some wouldn't it expect events to XX% of stuff, know on that our work doing that things way within I to as there's some to grow fall centers an working some areas that have opportunity of offerings a business. about be through keeping for and Smart around an be, of that. there's we feels our that our currently. would see a of can we doing, of also emotional and experience terms stickier. XXXX providing lot kind you income this type the see the that's what of we We could fact, kind an trying number the things that around to of think And do that pets of XX% that things of and we're that other for into provide customers structure but we're two XXXX, fit In lifestyle currently into other can more start and pets. in would roughly certainly One factor Home like and those believe We buckets. our that we

that ways other using are make like with are newer an there that better things we're working then And of experience revenue insurance perhaps versus as associated so we we are outside merger important. really so and dear of And a a that the perspective. Those roll they on those the onboard by post from can of ancillary And we're we to resident Are that other streams we deposit new that deposits. that there's maybe do can are start things delivery a there how working on. that of integration, And the are that unified near these examples to mechanisms kind on is that things us types things. out for few system. of

focused we So it. on are

Haendel St. Juste

intently appreciate Thanks, it. rollout. And Dallas. certainly you. that. looking I are we on Thank Got the

Operator

Raymond comes James. next ahead. Buck Please Horne from go question with Our

Buck Horne

Thanks. Good morning.

Just cost here. kind capital little the here starting price afford share of of a you bigger more picture to with reasonable bit

cost is with all changed kind How process at your more here? you a your of cost deleveraging well? you your as think or that So efficiently? potentially using Or of thought or also do of external growth possibility better around capital thinking how a deleveraging about do accelerating are of accelerating capital activities think you has

Ernie Freedman

the we We've Thanks, Buck. externally to where to or we share price as under it price, certainly stayed have – opportunities we'll some Yes. give where still be always and it share opportunistic think significantly comes the opportunities. delever NAV more consensus that may does And opportunities talked us about is But better, when grow. to behaving well. NAV

finding some to we'll use equity level want one, wouldn't is and regards we to shares always to been decision some then share the fund But the capital there. opens difficult it's with that of that through or table. growth, just that able price probably options to successful the make, we see on And right as performance to But leave want certainly, external And better And a delever, to to question we've again, to make. a so all the And up the us. behaves, more recycling. opportunities. avenues

things we're And we'll to out play have So the as board pleased and start that. where things often talk forward. we headed we're go see about that, in we cognitive very to where with

Buck Horne

And in going great. acquisition here to back second quarter. the That's the

So footprints. Vegas as in you're new existing the dropping these big and houses into Atlanta

portfolio? overtime, also you're of obviously these costs the the going so existing – of does leverage in by performance homes that conceptually expect existing your the of but for making kind the homes the the improve is margin this portfolio portfolio and denser? to Can adding improve markets to performance So it you new

Ernie Freedman

find it guys but us at size in of when conferences and this over hear terms nailed that and right we the about say footprint we trying think things, question. matters you scale. in the And and in see business. great really you And Yes, our of other scale terms over you to fundamentally growing this and things

here example we Vegas, that one Las the moment. is, so can a for talk And about briefly

scale groups footprint the the merger, about think Phoenix, was you And to of minus, footprint market started market. in homes for we growth X,XXX, other to the businesses. low prior Vegas that was the Vegas his plus Las XXs. that manage with acquisition, market efficiencies because us there, to around those want about our mid Charles in homes to creating is with Homes of it things. right now a a Las I through say and for low get terms markets is like Vegas footprint And Las more these in we our fabulous us, world a and today, the X,XXX was took homes. perfect pod. think XXs team we for X,XXX, similar say, do is expansion those kind margin that saw the a comes Phoenix what size One In our Phoenix of we us. and job portfolio about about pods, efficient. a for And X,XXX in Invitation and a couple about the As or it X,XXX

So mark way that in we acquisition to the efficiencies makes enhanced. parts have supplies the peers. There question are that book the our more And on doing then more our with furthermore, and efficiencies around in And rates our order we does leverage portfolio a to your the makes are Well, portfolio? things of what revenue with to our around how much us that market, like competitive anytime certain the work in at team get it or additional us stock types understand optimization the route your relative techs then like our be that much certainly other the maintenance for side, and that or extremely that to Charles add vans our another efficient. that. and maintenance G&A look an shouldn't as additions of

Buck Horne

Good Great. Thanks, guys. job.

Operator

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

Sam Cho

Doug. Hi Cho for actually in is guys. Sam filling This

portfolio turnover I could rate XX% at see and So, the we season. current the talked whole. during will lows, past But, occupancy pick peak for a lot the up the about pushing know the stays turns you that on turns if

Ernie Freedman

or be that and we've April, three stays last math the in year that to done year you it's days this Sam, turnover low. bring could days tell that your further, than longer-term two would about better if case, think you I the and would resident down

say a low in type up let's You absolutely is a on with XX% at math we can that basis, quick XX%, And so stabilized year that do a the ended agree I exercise, achievable. that. April over of that would course occupancy

Sam Cho

right. it. you so Got All Thank much.

Operator

Joseph follow-up Our next question is from a Citi. go Please with Nick ahead.

Mike Bilerman

that sold is the $X.X Page Bilerman. XX at that expenses what regards I the you're why on paying Hey it's $X back to? Mike in are does supplemental those Invitation looks of core that adding FFO. Blackstone guess, million – billion, for offering when What related in Ernie

Ernie Freedman

to do what Starwood exactly shares is, a those then as Blackstone's shelves, it those. – had spread in company some we Waypoint shares, of case they Capital because costs for to the one shelf selling really it want for That's has three Yes. across all one and well. file And Starwood three

using equity, things But and the are written. we today. Now and aren't course we If issue, one how to it agreements that's our with regards shelf is normal out there. common just shareholder did

third about And so it's a a of penny.

with In onetime it. terms associated of cost a cost is

first the Mike get So for costs legal set The with cost like much up. that when comfort the and it amount future be those associated it's time Blackstone standard you does pick of associated for that offerings. more things only would up the letters smaller would that and But further course company, with be transactions.

Mike Bilerman

things course just alternative put that know of There's from as to earnings. go a of a want always FFO. number, having didn't but seems I that the that down public you to you we like, it's road business. add And of like just normal perspective, core methodology company just small it's G&A, have, stuff definitions this at it a

Ernie Freedman

that. Yes, I understand can

that do But would few it let future. more and And shelves the what filed it's every in do was, of fair call expensive more company give versus small usual be a it said it amount, could people because that'd what thought. kind it wanted It's was with they to three so and years. You onetime We one very a see feedback specifically. out you do little we disclosure Michael. people shelves want it than

Mike Bilerman

it on just different or something million. X amount the Is perspective to had then relating a else? is Page And $X.X that

Ernie Freedman

No. They consistent, should pretty Michael. be

So don't dollars have but might in to that that to thousands line, I'd why have from have check of top I see an might of my also extra rolled ended were tens that of we for separate in that up with an on accounting that, head.

Mike Bilerman

And comment then NAV. on you're

and a $XX.XX You stocks you your consensus – but stock's significantly higher these the than was in $XX.XX. that much, think got $XX.XX maybe at made there comment that Street lot an where was indicating said facts or at are that's got NAV I SNL's it the trading. at

So not, of sort where worth. it's I range Street thing in it's of the the guess it's

So comment I sort of your program external on to accelerate using just growth. fund a wanted or to that bit follow-up little about equity to deleveraging and

Ernie Freedman

Yes.

fact to up so pleased well morning. I haven't so from gone it's And paying hear to for this doing so it's been We've morning. I'm call, the that preparing been attention this the that

pulled the and is I Michael I and So say we can set out we get that's models the a and to actually into for reports closer that's XX.X% analysts good everyone But don't analyst those to see. there. number to think numbers what

a on NAV we to people that So source where IPO. that just I'm capital any for like have it's company. as consensus NAV We'll use view our public for understanding haven't consensus, us. different and numbers. different other a calling other Yes, disclosed Regardless, we since

And and private can. Charles worked better. regardless, And do open the we stock we've the keep requirement. were if investment On weren't it's – from as here. for in balance as need, current shareholders. and build in don't certainly, you've price that investment sheet we to backgrounds. we'll grade we and We today. the have come continues a they to We'd get faster if it's preference do fast that very We predecessor acquisitive like the diluting to side, Dallas companies deleveraging able option to get state seen us a going and done to what could. like both then to They grade perform by to But have that that world a very

us, at we'll right look the best certainly of if what very our opportunities, growth cost found external we for Michael. capital carefully So

everyone, want is line of we thank get our to management to all like accomplished and board I'd align So there. shareholders with and

Mike Bilerman

along they you could came with in of do knock terms of $X And more then offering issuing what came me billion. and to the Let's processes, of with melt wanted be terms is? their ability offering want in sizing or total just remind like of another tag have that shares. Blackstone negotiation you Do a them a pure said, and primary. down and to to say do secondary we about the just And right

You don't market. think into can you put billion the $X

You want of terms the to do negotiated? to $XXX has million? – it preset in is or methodology What's it be

Ernie Freedman

it's I Well, say different things.

decision the anytime company So issuing Michael, thinking is it's board. that our of about a equity,

they shareholders. if you'd the how do, you choosing that. way intentions to a efficient when to opportunity to what that the for demonstrated is that lot opportunity know, privy And times to make then whether for to known management most smartest the we'd discussion they're and Starwood be have there's the they've our is in before platform at of all want sell right and or equities and and Directors an Homes. are focused Blackstone Board and/or to Michael, And like And with and have there's do Board what for to makes us sense get they point – sell, to they're Blackstone with shares Blackstone, and with else. they've of today shareholders to was thought to they certainly and other anyone sense – things their demonstrated at the they And engaged want say at the Invitation in other we us that So potentially they on they do certainly, also get makes same the first the whatever time, regards for We as what sell companies. will to set much for that go would together to want to selling reason, ask that. sure we think it doing made selling want have what as with foremost, company. point, how but Blackstone accomplished. issue We're

I'd forward. than So going less expect that nothing

Mike Bilerman

it. for Thanks color Appreciate Okay. Ernie. all the

Ernie Freedman

you. thank Michael,

Operator

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

John Pawlowski

dispositions the and still them? for growth on in NOI share homes, if years these Dallas, lower the you're look recent these you in Thanks. could next quarters, like several quarter homes this what operating quality would over

Dallas Tanner

in a are typically first either to NOI bit outlier risk CapEx have little of some. I that too. an what of manage. question, homes back kind a homes far four of risk what portfolio us that because we lines had we've and of or we've Maybe sold, John the company. tricky It's in see look been of fourth geography and growth B, terms been the to really Yes. probably either from been of and returns year long-term nature inefficient go bigger just some a parts the to less in what shareholders. is we've selling along or going down more portfolio so the quarter that where for provide And you'd of of something been A, – of adjusted in selling the to that bit less. the of the the is of finish, or sell homes saw are our that's be potential suboptimal that doing road C, through in are much selling that we might you mean, little best like growth these We make What reasons sure key homes ones some just to obviously we I NOI that outside one of and The do homes. focused for why we the Remember, reasons on. is want months are

in big from square that too footage homes a have are our footprints standpoint. We

types look that homes spots if square at kind buying, X,XXX of typically our so of we're and you X,XXX sweet And feet. between feet, X,XXX the square

we might And and homes. of those a variety lower coming growth those reasons, we out be so of typically of for see net seller some

John Pawlowski

a all-in how cost Then is? bit is growth much could NOI maybe not higher maintain you lower, share if their Okay. to

Dallas Tanner

my and geographies. footages It points would to around earlier again square vary

and have different standards. finish We fit

we a where Seattle plank in down put like example, might time. For home every vinyl flooring

those a homework CapEx consideration that margins warmer may better. home Southwest in home have of would longer-term if And so review certainly our a bit different coming take we CapEx our markets management our one a some needs maybe through in asset into that market, might of little and Whereas need. approach may be

rebuy So home may of longer. be goes that bit keep do by how a inclined we into of It on we our a home cycle to the basis. home kind all analysis

John Pawlowski

Okay.

how the versus benefits. On the the market acquisition. far you I portfolio understand market? share below were margin you Could rents think

Dallas Tanner

Yes.

in of there's a perspective, rent as renew. from to on just immediate where single think these kind going digits think, also I in high then of we rents And terms they price. turn

on of an earlier, being place As we in marketplace. X.X a cap Vegas in. kind buy that higher much raise I typically to are to than is mentioned see in able X.X, market is hard

of buy actually ability this type our thrilled we're So portfolio. to with

Charles Young

us. at really ramped Yes, vast in Vegas And has year seen the in the new rates growth up of you've lease portfolio the look proportion John. of in you terms was if supplementals last for I'd our Vegas. say,

typically is our portfolio So in higher we just the lease in the than portfolio. lost would see the embedded

chosen as they between It high then turn. differently. don't think and to portfolio a pushing do. we us were we've little as have the to so much might some for on rent the gives fact a that business occupancy, got at as they run very that that were potentially running leases we So confidence bumps opportunity choosing they And bit were an

John Pawlowski

points final me. you either Charles, inflection And could one any markets year-over-year? one bad trends by debt? or downward bad Then for outliers notable Okay. in upward the debt share

Ernie Freedman

a year-over-year are any negative. or see year-over-year actually in I'll Ernie. outliers and a points few within on consistent been relatively trends answer we it's that John basis markets We've bad all basis. consistent haven't one, positive seen any It's

John Pawlowski

for Okay. Thanks taking all questions. the

Operator

with Rahmani from question go Please is Our ahead. next Jade KBW.

Jade Rahmani

much. very Thanks

occupancy of activity. to turnover the expect and in Just new about cadence June Do thinking lease you dip sequentially?

Charles Young

turnover down as we'll QX Typically about of we Yes. the occupancy see in go talked volume. QX,

see trend think occupancy deeper that number as going we go in high, down. we came into we're the while we that summer, So to do April,

Jade Rahmani

Thank you.

to any or have you as Secondly, percentage? such you if iBuyer And so, the assets Opendoor? quantify Zillow sold could

Charles Young

more we of to question. To they But say, the at transact. robust more haven't iBuyer us considered we those been end a some anticipate bit through platforms. much And on an It's systems iBuyer of we as that vacant Jade, sales as We've it really should the sell I user and acquire certainly a some or develop might form platforms. look be of able date, user they more bit platforms. our of you to another good through properties we certainly sold certainly it's to for something choose a were get could their friendly, especially through

Jade Rahmani

just trends, percentage of in the And a notably of Has the that you in any terms lastly, on seeing declined are year-over-year home purchase move out buy? change basis? to

Charles Young

that it's the XX% On on XX% been quarter. basis and right Typically move Not a of still year-over-year normal. bit. depending kind and than that's more between just range anything in just much And our been outs. the a month up, of

Jade Rahmani

much. very Thanks

Charles Young

Thanks, Jade.

Operator

next comes Wes ahead. Golladay from go Our Capital question Please with Markets. RBC

Wes Golladay

Hi quick guys. renewals. on the A question

holding governor? and more internal is on there especially last year. compared Is quite anything renewals? favorable the So you back like to supply have from you it's Do pushing demand any

Dallas Tanner

X's. that teams we field our between really factors that Really the want and and with with finding in working keeping a determine number price by about set be. a look minimizing management like We'll of before, low market out teams as balance. at But great And we we healthy turnover. that talked we right will of to find go balance do said what that right occupancy assets job the revenue

providing So we we'd experience. doing they focused and on sure we want customer been performance great that are do our we're really resident and – sets better as teams a on better resident making market us our create And stay the service with it's also it. to and

us. for is demand so good looking And

Wes Golladay

one acquisition. quick acquisition one on the then And the bulk Okay. –

you you in close that into of rental quite margin difference bought. you And then bit there's in you most about Do year mentioned the uplift, plugging hand? You platform? off it expect by of to on and the just between know but your your portfolio market that a existing imagine which first the in a the would

Dallas Tanner

into underwrote, side. could they came that clearly regards, rate, to model the bulk the we where a model we our just, history We wouldn't fair on acquisition, we from think they That expect expected run for win-win, happening Wes, run and forward. to be. cap we we'll I see When otherwise really portfolio, But We so didn't an we portfolio. what's the be look we'll on a a pleased with dig – sellers said, they the got were through was perspective revenues moved when margins the R&M we're us. we expense much it their based to out for for in think we was with – a it have that price on it win

the think run side. side, of we side, want revenue in to the different bit little we would flip On a model terms how a was because win it's a expense we on the us for it do what of

we a the with efficiently entire whether or they XX%, us to only our growing that couple Vegas of the earlier, run increase only much the with especially unhappy, difference of one Vegas. so a more in from today where our talked markets about portfolio market a across Las in to one XXX and allow today best we'll across to we Atlanta there, Atlanta, our them Vegas, have homes, So the by get allows in are. as but – about with market of much We're certainly footprint almost we like will XX,XXX us And we increased improve little Not in footprint was have of margins. comfortable this a it margins Vegas. buy the an and of uplift not even with whole footprint fastest

Wes Golladay

Great. Thank you much. very

Operator

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

Dallas Tanner

look Thanks where in for Invitation and hopefully in Homes. June. joining us with today. seeing the front you. are in opportunities to excited forward everyone's about NAREIT our We're us. we at We appreciate And everyone, of business we Thank today interest

Operator

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

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