INVH - Earnings call transcript Q2 2019

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Operator

Greetings and welcome to the Invitation Homes Second Quarter 2019 Earnings Conference Call. All participants are in a listen-only mode. [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

you. Thank thank conference us call. and quarter our for earnings XXXX you morning, for joining second 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

point which Relations at I information, be second quarter and may found document section can reference website on on to XXXX would everyone our Investor press of earnings our www.invh.com. like release This the to we supplemental today's call.

inform to call other like liquidity in differ to I actual that statements certain to to this also those would resources from performance non-historical materially results, during made you are cause subject outcomes business, risks may relating or and such statements which and any indicated statements. capital financial forward-looking and results include statements, could of uncertainties the future our that

some We time. to forward-looking Report and expressly obligation Form do XX-K of and XXXX SEC disclaims statements our so. time risks we the Annual describe not uncertainties any update on Homes with does from filings these other and in make Invitation to

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

in supplemental with the non-GAAP You of earnings measures reconciliations regarding GAAP section of the Relations our Investor information, and measures, can most these measures, release which these are comparable on find information additional including available website. our

President Executive Officer, Chief and Dallas turn our I to now over will call the Tanner.

Dallas Tanner

Thank you, Greg.

through we operational is fully midpoint business platform. execution our Our on move the the terrific integrated year. on as cylinders tailwinds remains all of Fundamental persist firing

our are capital and balance making with recycling strides We and continue active we through to sheet. management create important value asset

my a comments. on I would elaborate like few things to in

our some efforts growth results second, capital third I'm future. excited about of and our why outsized detail First, more the even recycling drivers the and strong on

and of quarter of our on same-store the fundamentals, our it net recoveries, XX.X% ever and building our renewal second same above and our favorable growth time, included by second reduction costs of first were the this execution rent quarter great with X% resident driven over prior occupancy year XXXX outstanding best start performance X% NOI by teams. was will differentiated I growth, in portfolio both our in levels new start and service highlights controllable X% quarter a performance over and at of

residents value facts in The limited supply around price housing is difficult is homes continues live to simple. a formation at in attractive company find, where the home be professional appreciation the a management industry quality In markets puts leasing ease price neighborhoods from allows to dynamics we in in that are a our our options Household high proposition outpace can and offer that desirable first. solution inflation. fair a market and to resident enjoy robust, of

expected our unique XXXX. true are in XX% formations especially are This home. footprint, across grow is where we to And a comparable cost at the a to almost market home to almost lease twice own remains cost the below monthly household average U.S. the

to us X,XXX industry with satisfaction resident on residents' that enable service in per enhances leading In retention. addition, over deliver efficiently market, our average, scale best homes class and

months. and revenue between field occupancy operating strike to efficiency side, even Our our data rent our platform. to on be With during initiatives summer service delivering by powered to expense better reducing tools, enhancements costs and busier right balance are than continue the the ever teams the at and now our better team effective that and controllable management growth continues

Ernie points increase in later on the call. on of this XX at strong we On guidance are X.X%, midpoint. back will NOI same-store XXXX raising of to year-to-date X% to execution our growth our range the basis elaborate the guidance updated an

have capital against proceeds of made recycling provide In gross sold will update our for allocation I the homes use delever. acquire first $XXX year, capital our million and $XXX and homes we of we on to excellent X,XXX half Midway progress XXXX, the million Next, an these for efforts. XXX plan. to through proceeds

many and quality so, doing we from in homes have removed advantageously and returns. into total less where we capital homes our within reposition real locations adjusted located risk lower In and conviction the portfolio

sell We channels because in diversity have homes. advantage accomplish we compelling buy local opportunities this employed the the our presence been to able of and to to find markets of both of and

we Just both homes auction transactions, MLS bought and in iBuying the home in platforms. XXXX, the first at have through half transactions, from of one-off builders

to one-off of near bulk or transactions also the and $XXX million directly both and for we the successful end half expect first above have year the of sold dispositions. out XXXX, acquisitions execution at markets in now finish as as high After $XXX the the to initial beginning well We of residents. to guidance laid million homes in we the both in

in closing, talk on had even that In than our underpinned outsized that XXXX anticipated. drivers In opportunity we front would Earlier in all enhancing the us. are quality portfolio call of have the I like discussed demand I other more and initially of words, lies growth. we the to about our supply

Looking encouraged millennial have enjoy is our that ahead, way. we the to even the full more generation as benefit we yet are coming of

the many one-fifth XX average Homes could we families form believe of resident age XX people to in Over toward years. cohort lifestyle leasing population the aged or US XX Invitation years as is of choose single-family and this and they age XX million

better. resident create organic are value we experience We more to how also shifting and tremendous opportunity make attention to have beyond potential even the can the

by refining our to building providing hands ProCare homes platform service more genuine in includes move processes basics and provide to our proactive commitment care and residents out and move resident equipped on and with care, our at carrying is for that system class interacting in all the out to on portfolio. in This already now best the

process program and getting grow to value refine even to CapEx continuing which Expanding we in pursue home our leasing on efficient brought residents dedicated and ancillary enhancing a services, more the new quicker. making have recently team and

have Finally perspective, opportunity the from locations our and advantage an widen further. but growth those significant today, to scale external are we competitive portfolio and even advantage

forward, As gives about to of right when growth right the to of done and more quality are the opportunity markets. proud executing us I'm the way portfolio have even our the in today, better. selective business lies and we capital summary, become arise will the recycling as we our opportunities enhance we history, to ahead we I'm very for excited ability to scale throughout In our margins that driving the the but continue scale at be and grow continue move even

I Young, operating Chief our our to results. Officer, over provide Charles it more detail With to Operating will on turn that, second quarter

Charles Young

another busier Thank Once on this quarter because year. great seasonally it you. were positive a to revenue I'm quarter momentum build operationally the cost to both on in even proud team's side. we came again, drive time and Dallas. of success able our of

through in for maintenance. yet XX.X% not turnover record-low Managing is The our most numbers, on wavered. resident basis. is and which season leases, peak achieved our XX evident trailing turns This quality of month service another a of

executed but results our thankful midst we for do remain how teams thus will more work operating through have have detail. far. season, second you peak of the to walk couldn't more I now I quarter still in and be in our We

With X.X% the in increased quarter, year-over-year. second outstanding year-over-year same-store second in execution, revenues grew the fundamentals in our NOI X.X% markets quarter and same-store excellent

were monthly an by costs second in driven X.X% rental for a Controllable was average Same-store increased year-over-year. quarter. increase expected, X.X% of net growth basis occupancy resident the core XX XX% recoveries. This rate expense down point quarter better year-over-year and average of X% to increase the in than

improvement this a R&M personnel X% costs efficiency that a lower increase of drivers were our integrative offsetting improvement in significant volume and operating in and property was enhancements through primary The drove turn platform controllable lower taxes. costs,

not of in costs the the improvement to year same the degree expect first the do we cost That prior see as in did of comps said, XXXX become We half favorable. half as upside efficiency. achieve second less in still controllable we

systems constant next out the we our over several to addition processes bear going roll fruit the refinements benefit to forward, our expect years. to full and ProCare In of

proactive clear, serve of implementation been from post-movement rolled our to including markets. service our all pre-move in trips out is move-in and our we ProCare ProCare orientations, proactive has out be To way unique residents move-out visits.

in However, materialize as visits opportunities savings proactive for turn drive time and R&M results. the both over benefits to

new Next, quarter increased of and or second basis I renewal basis rent blended will growth points quarter cover and higher points basis This XX drove leasing XX Renewals lease the X.X% were of growth leases in increased higher to Both points the second trends to in X.X% second the new in quarter. rent than of year-over-year. X.X%. XXXX XX XXXX.

feel We the with half with of average occupancy year. remained very XXXX and the time, than in for ever basis XX of positioned same at better line been higher quarter the of the it points point year-over-year. this At second first quarter has well XXXX occupancy second in XX.X%

However, the prudent year we and making and flow occupancy. in begins to seasonally more calendar it turn rent are to approaching where slightly balancing new also growth leasing the point conservative activity

a to XXXX, about up momentum and is great achieve of healthy focused carrying service After going half set we results expiration the great playbook this feel our the and our delivering remain on our first well. lease shareholders. to for through We outstanding keep excited outstanding season occupancy to residents as are all to curve us and help our

call over Financial Chief to I Freedman. that, With the turn Ernie our Officer, will

Ernie Freedman

following the balance cover topics. two markets XXXX sheet financial three, the and guidance. One, will activity, updated second I Today, Charles. you, and quarter results Thank capital for

we our our principal first has and insurance cover of diversified delever. loan markets from capital life Loan I First, a term will company. activity to million. XX-year sources of by and $XXX continue one near-term term a we refinanced closing maturities In our further amount June, ever capital opportunistically where

the X.XX% of provide basis cost XX collateral our to-date. rights other floats financings in LIBOR and in Total XXX XXth release secured more points fixed and year. is Structural also funds features the than loan years plus of flexibility substitution at at for first the for

EBITDA million from the cost With the of us common loan In of settling in July, X XXXX convertible July, of times prior down XXXX. debt on our Also times, at to $XX completed secured additional quarter, an XXXX. second with X.X to we debt of proceeds debt leaves conversions debt. hand, in from million bringing end $XXX shares net we notes now other voluntarily higher secured prepaid no to maturing the this cash we repaid with and

As we in we an prioritize go debt will pursuit investment continue grade of rating. forward, prepayments to

$X.X capacity was at undrawn liquidity Our billion end of unrestricted cash combination facility. through approximately and on credit our a quarter

expense. year-over-year our increase lower financial to cash in and X.X% $X.XX results, due to NOI on per FFO interest Moving primarily increased share second core quarter to XXXX an

season service year-over-year strong $X.XX. and X% guidance. stage tightening XXXX the full-year leasing X% to AFFO updated to our and and our guidance to NOI X% we is remaining per supply peak maintaining cover I with first The favorable, increasing same-store versus After are will X.X% through share and growth X.X% increased last previously. thing execution of to our XXXX demand

core same-store previously by X% from driven X% from revenue expectations to to is and expectations previously. to of X.X% down This expense same-store core X% to X.X% X% X%, of X.X% up

core of $X.XX share to with We increasing our in expect are We $X.XX same-store increase. guidance to XXXX also now for $X.XX FFO per our step $X.XX and FFO full year versus NOI previously. AFFO guidance core

AFFO to $X.XX $X.XX previously. share is expected versus be $X.XX to to per $X.XX

of in half year perspective. Lastly to everyone impact guidance, the things on our X results timing want of will that a remind from back the I

half as of favorable in comps not in be XXXX First, as half of given progression they of first the second XXXX. XXXX, occupancy in were the occupancy the will

up enhance increase quarters controls. real three driving revenue first in in we is Dallas' the be growth of XXXX remain XXXX. quarter reiterating expect expected to continue enthusiasm estate to favorable, wrap strong for time in the by we same than lower I taxes year-over-year the of Fundamentals future. the at will the Second, fourth which expense

that believe the in is positioned succeed all business parts our we cycle. to well of Furthermore,

best-in-class more services, resident We are ancillary value other our our grow the and growth widen CapEx investing excited opportunistically right as experience scale begin on but our addition organic least, portfolio to time. initiatives enhancing to and in we value focus location enhancing creating markets and with at recycle the remain capital, the advantages up within we right platform to last ramp with not in active and

would open for With questions. that line up Operator, you please the

Operator

Instructions]. [Operator

Suisse. ahead. Harter comes of question Please Douglas first go The Credit from

Douglas Harter

your the Dallas, Thanks. given you touched can but opportunities markets kind seeing attractive of of bit, the demand, little about on what are supply those external and talk characteristics return you growth kind the kind be attractive. the a of for might this where, most you appetite increasing

Dallas Tanner

to. happy Thanks, Yes, Doug.

opportunities incremental these opportunity mentioned, for some to already are I we and look more we the certainly right as a the of bit are in the in at our seeing terms my time variety attractive comments a platform. grinding As quarters profile. I right still last going of through places opportunities well buying see our in at of pretty that that in of couple are mentioned return through we channels,

will we add when an would maintain look approach see to could we make to sense opportunity if opportunistic to portfolio. expect that I So, ways and meaningfully our that for then

of to maybe us is going to a and see we look I brought being continue us, benefits off so get local things in the of think of are market to and of one advance opportunities. we a for that sale public for that lot are do to those stuff

Douglas Harter

finding attractive are markets Great and just most today. you which

Dallas Tanner

No.

West of and some Phoenix is A our we If expansion our where of row growth markets of at lease growth are home like this, XX% the been of are price a example in greatest three over having of terms where the certainly perspective. rate new from months last you have Coast outperforming. a a good in appreciation, market look balance we north

We seeing some that opportunities market. are in interesting

in to able some like some QX same in in buy boutique look been markets homebuilders things to do do and if from market that Seattle. have like directly We the

that would lend I continue couple the of over submarkets and mix will to that of to consistent be with parts itself parts the done Southeast what to is and to continue West we outperformance our which past to years, the barrier relatively higher of find entry have expect

Operator

question from comes of ahead. Rich next Morgan Please go Stanley. Hill The

Rich Hill

bit quarter. Hey, good some good and want than where it's revenue to think little I morning implies lower our focus on Revenue met in congrats on just but expectations, a guys, maybe the past guide maybe trended and expenses. deceleration. was the I a

is could driving maybe quickly seasonally if comment that So anything otherwise. I'm that you there on and or real wondering just if

Ernie Freedman

Hey is Rich, Ernie. this

right of than So We rental to release. had about the at able hence is far revenues at put we be grow, beginning the we and the first basis with XX are we increase beginning we out expected rents expected rate XX are X% it's there doing quarter here we guidance year actually little better second I little a better growth of why true a basis in would we point think about the performance occupancy, - then than year-over-year. in was and that and beginning the mentioned year your holding that and increase beginning the in the quarter, at year-over-year talked quarter that second had is point

to growth We from last just perspective to income arches rate of increase, bit our year. year the slightly we a are take to types it other was year the those X% to and rental the then think where roughly rate. a second little We has and flat lower you in trending rental half the embedded been flat to for so a occupancy of us going half roughly then of expect in guidance, in not continue see second numbers - up reaching be

That half half spot X.X% the that be is math second going for of you see where is good relative the to puts gets very robust not to in strong to quite the the year else year. as still as guidance can our for first and us a you

Rich Hill

second obviously have start growth. had going expense the the the is the like pretty and growth implied equation, in looks year. some to of terms year of to expense it an on side the half be hefty you expense there of Got impressive in It

down, heard I be are though. going think that taxes I to

a to could little square maybe you So us bit. that help

Ernie Freedman

Yes, sure.

year when middle of we yet. in everyone half comes aren't expenses, we have July for books that orders, work and surprises still season So are good peak closed the some had the remind of we will the again first to quite it

And look still are when of you for August course, our war us September and at months footprint.

earlier just we as guidance want still second our we of think and this as we with set set about just guidance here. both we to expenses, our that year, first were of So, be set cautious

where them real year said, in X.X% fourth would are couple the quarter. at and for adjustment a We trend. Xs, mentioned an book times we had comp sort expected trending the up the is in X% fourth have thought taxes easier We estate year, they for taxes to the real exactly the That of that beginning of big somewhere X% between we we us year-to-date, are estate Rich, the year and said taxes. of a quarter that we in last had a be

and estate ProCare outperformance we we has real of where So getting our where better around we how a second and are being all the exceed our turn, maintenance that right for as the at the learnings for position pace be the we numbers are done in hopeful kind we being the our we really year hopefully where we year that out that Charles to is taxes, are cautious we plays beat but the sure to team job, set want through would expectations, have of phenomenal thought guidance that and is try repairs on and and out. in best to done the see about and talked just to work carry there, about half we for a ourselves we rest we do the to will year of in the see make laid will but again, put have

Rich Hill

it. appreciate I much, very you Thank

Ernie Freedman

Thanks, Rich.

Operator

America. go question Shirley comes Please ahead. Wu next Bank from of of The

Shirley Wu

they seeing as you exciting hired well. mentioned of could for initiatives the that perhaps the the we just there some talk morning, driving team, initiatives so that taking maybe the XXXX, adoption home for is some smart guys, thanks see growth you income the ancillary and going Good you new that was It a guys question. of when about

Dallas Tanner

Dallas. Sure. Shirley, thanks Hi this is

We kind our are I in talk in two business excited, answered previous being In piece buckets. Ernie ops which piece of the first we really and about estate real the questions.

The second our focused side of experience income making opportunities. performance to better we those in business believe targets best-in-class some bucket itself this lend and really a we ancillary experience can for sure that are and customers, really on is customer our we of which deliver will other

improve, some Smart and can offerings room Specifically, a a smaller rolled home of things Where there we been is and that. specifically, smart has have around XX% Remember, as something couple that piloted think to around the have the out package. initiatives like historically. adoption company, we home XX% rate historically our between to we that features add of added and and is

So we even that to are we that and will experimenting some offerings better in itself think with performance hopefully pricing lend different category.

part stickier other we customers drive insurances. a of our what for experience around The set think pets, could may

will Some which researching not the make probably a benefit only think itself interesting even initiatives fine to national a different with what we partners, working are bunch kind experience offers but lend overall have better we potentially some ancillary, could other that think to of some we retention. of and are better,

right a have in customers the we and lot do way property, that and it to deliver of think creates a deliver we that if connection meaningful, So and to and will impact our we continue business. it it our personal between we feels

Shirley Wu

color. the for Thanks

happened more potentially what margin impact this you so you And of there merger. of to for Previously, synergies the improvement you mentioned might year be the possible and more that seen side, throughout next do is on conversations potentially have procurement the back year? think those the from

Dallas Tanner

procurements like improve. certainly Shirley. great things are you Well, to looking say a always example. so business, would it's are do The better Yes, and I any

integration to basis how this scale, see not. point, point, good is tracking a national is be basis. stop we synergy kind put a there regional the ago. doing or That leverage on us whether some and about continue a that of we merger we would to and our We merger opportunities a quarter as merger At both to behind

the expansion dedicated that I forward, things and operating buying can team at side the they in to many are and power leverage said, but that as margin on help the our continue procurement side. of very would hard that terms as capital just on the side, margins on That have is our not NOI and have importantly us working going we think a it's impact can importantly expense one we it's we certainly

the So there a item. now we capital to an just down so slowly, packages we going margins. great do way but way see some There from contract, the contract in, things the I hoping for continually opportunities levels find is more is by working think more appliance around put are and are continuing our to national to some too, opportunities our as nuggets improve the - it's to some us to example, all local regional,

Shirley Wu

color. thanks for the Great,

Operator

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

Nick Joseph

activity. more How Thanks. many Dallas about sell you to near-and talked homes non-core the term? in the are transaction medium left

Dallas Tanner

level. Well, are making at because really right size market submarkets any allocations can't specific real without do that to the looking and merger of sure in we and certainly here. guidance, terms have giving the we We post portfolio just the right

saw through would I'm for a I You South of here, lot we markets this be pretty year of the in and and at sure that just wouldn't quarters Florida we us. this our stays bottom portfolio, Chicago, two activity generally be ordinary by we the that bet making will I will looking course for have speaking. our to expect that parts consistent, of more that but way whole performing coal are first clear always that pretty really like active year

Nick Joseph

Thanks.

ability growth. acquisition start as of growth net obviously about on think fund the opportunities than do sales still maybe So swell the you how forward? net to if front, little would of so like, become down seeing more kind a more think and external but How is scale acquirer. non-core to kind you you larger the going Leverage ticked where funding higher external of do any you are think growth about is about a exciting you the asset you

Dallas Tanner

sense right. that that look at And anything be. capital. to available we the whatever cost we makes of that would with think would point, I is look want line I general at best our in to have strategy think at

could we tools. so And have a of number

if revolver make something makes it smart we have or investments. continue in can always sense to issuing a use if needed tool is thought could available We notice, just moment's we a and of a we we recycle that

Charles Young

to still to And so want sheet for of we a we tools under available us very cost on is go from we where what committed are the external balance the about perspective, that out capital growth. opportunity for balance various

Nick Joseph

Thanks.

Operator

The comes from ahead. next question Jade Rahmani of KBW. Please go

Jade Rahmani

very much. Thanks

On vendors the could the amenities, build, and have single improved that resident front, exported services offering are of in amenities believe terms perhaps operations. ancillary e-commerce you I sector things for services, as that also there but example identified are specific best-in-class multifamily family such in be to

out process. just expedites which RealPage AI example the tenant think for screening, tenant I bidding really rolled

if wondering there on are seeing is anything that Just any you front.

Charles Young

space. We number single-family are doing the certainly talking are of on to multifamily the and both a work that groups

estate space. of there exist or right are occurring lot versa. I more you in differentiated that bit of are would tech for a a there little are real opportunities that vice kind also that in So To-date, call roll-ups the in single-family say

you a be there available number us. RealPage, up will think, AI in things and how long customer are, different the so service. of opportunities stays our rolling help around terms a could bit of with are of that different those It's It little companies to resident duplicitous. us, nature I additional platforms

haven't companies yet going necessarily products, are terms our looked getting with making is approach that continue sure it have their that met felt of business, in for of primetime those types there. and at some number a we to have out was maintain We any for of anything opportunistic ready an we to are but of of

Jade Rahmani

Thanks.

interesting an is would for seem which longer that point about the of suggest ancillary revenues. single-family, potential and greater stay think I length opportunities to

Just home venture Group, the probably as well IH turning considering public is insight. have Blair Pulte as Chairman front announced build-to-rent builder you Bryce of both today another unique to joint

the share you built-to-rent on updated thoughts wondering I'm So, sector. if your could

Dallas Tanner

implore been to build-to-rent on have but same want to thoughts team, consistent my our think approach think make and we I I compromise want never pretty channel sense, way. to feel a Well, we to We as location. the every

so the is location, in we agnostic right if us, something And comes necessarily which of for through. channel are

build Now which financing is that is which are are to footages things apartment really typically people more done and plots, are a of a garden-style of smaller rent hut interesting is because going smaller couple there are it then is line are up and square and that being synonymous a with there that neighborhood communities calling on on. would rent much we with footage standards built There to square are finishes more built own. that approach, single-family product the fit usually and that with

we get all get that. terms time angles, by the of approached And in a different We on lot certainly of opportunities. calls

types of and and around at but looking our the standards, then decisions. to neighborhood to sizing fit-finish minded it in from spots right open- square way overall is going in good footage to are scale the buying We builders, amenities the to what have that locations the the also into be have in

job the of members companies. terms types space, of estate. of think close our terrific price, other the two are and lot between around you I of state question has in what separating homebuilding the in real seeing nice your price church on of and Specific Board, been different It does inside who are like to a a

made we going been have with to we review at good So, lot to of able I certainly builders opportunity. have and and and strides, those to local markets opportunities a continue some look think, are

Jade Rahmani

much. very Thanks

Dallas Tanner

Thanks.

Operator

go of Drew from ahead. comes question Baird. next Please The Babin

Drew Babin

with up of about CapEx, see see the we the in year-over-year third for the second I the half we recurring on to was kind and in increased the glad portfolio, range can might recurring assume FFO, easy X%. Question quarter, CapEx the decline. same a morning. comp of given in in the total increase year even good year-to-date Hey, guidance about tandem AFFO growth

Dallas Tanner

side yourself Drew, and is, answer OpEx better with [indiscernible] on better little cost will specific that, bit we in a around it actually and Please the we there for total much are the try expectations say maintain. the side on when the that. led question Right, way I provided to you guidance cost performing and of CapEx than haven't net than to recurring expectations level

range why Part as reason raise of AFFO behavior. to are is being well because the as able confident we in of FFO that range

would to it So, guidance look to year, to high through provide of feel the pretty the basis, first to year-over-year as net slightly we a maybe we flat actually would to the would maintain half not said now on us. for confident had be year where perspective beginning end but up overall of and position the we X% we at of and a relative of be terms in at down on the the that where cost be in thought how point flat range may it specific this

Drew Babin

is been this more to on on very question markets, in side. Florida, It's and next I acquired follow-up noticed one the just is funds I a disposition about second the nothing of helpful negative source noticed quarter. South new spreads that in from year. me, Great, really also there leasing went been this

think that be that one long-term, do top that guess of your how you feel is you like I is to market it term, continue to still would you a market short source. markets, about do going So, be a to

Charles Young

This Charles is Drew. you here. Thank Yes.

We Florida. fan of a are South

occupancy you to actually went look versus QX, XX.X XX.X, growth to overall our X.X. at performance up in If went X.X from rent

we actually lease and saw we point, softening, the and did that some impact we very year-over-year your growth, go up so in rent rates renewal submarkets down worked closely. have with certain to slightly, were new So,

there, will at market. The you of markets it's relative see submarkets selling been of South a we the some the as or of that more and asset pruning are out out have field smart teams really field make bit sales kind at a and looked Florida little you seeing homes management those decisions large

We have very it's in XX,XXX large overall, Florida South homes and also. a market Florida, in

So really want be optimize can to we smart by around we and in what be markets pruning. that

fan optimize to term, to long Florida, we the portfolio but South we a are So, try of looking short-term. are

Drew Babin

is That Great, me. thanks from Charles. all

Operator

comes of ahead. & question Associates. next go Zelman The Hardik Goel Please from

Hardik Goel

taking for thanks guys, question. Hey my

into just outlined, have through have this rate you you your looking have decided, big on overburden. such much on which of appeals ones that of far the are your can tax focusing Just look look kind where grow how taxes you and do and rates how and future and ahead as different across kind markets are the if at a come been expenses, item going as year pieces, what run kind of see regions, line the you

Dallas Tanner

year future. how specifically talked Washington, Yes, surround We without already that I happened we guy giving far the I legislation in things significant with talked going understand that some quarter. about State of well the last guys has a it to seeing happened as and had we this Seattle. good bit multifamily little about some a are in thoughts give what This the see there. changes guidance, you year, so

came We were this hot in not terms in surprised pleasantly to Texas see surprised for - us coming of that we are year in high.

process have in here have gone so than what we and We far success the had we would that gone Texas. through more field have - is anticipated

When we for but real estate in Florida. comes Florida will side, of really we the for down Florida tax high importantly the the process two. month State were of or us, on the rates on kind next bit better timeframe and appeal October, and course, what plays out finalized, the there, millage little are come millage out to a in rate our running in bill want haven't the seen information also Georgia see the in of so is assessments have Georgia November

of us our through in and-or were the more this and tax corporate I activity for real we events that in at years, is at Florida important That different this in matter, last will reassessments still over merged numbers tax get four two As us future, is we more upon portfolio reasons, XX% the was past said, there year think in come for through, look a Most the dealing bit stuff run those of some majority are is is events and companies. point, noise sore little have that really vast the differentiators in XX% estate you last at of of is two a California, California spot our that about of stability talked the allowed a to few a one we but bill. the our about to one it sale of looking and line for with point. is and are when

just growth to normal under that X% see So, kind XX reset of to you California prop is . going

the that terms So well estate later as we taxes. that then us at process. external the of some the earns are reason be continued continue that And in appreciation real a of price two we part in to seen not in growth that is for grow, have in the positive seeing differentiator is about important years but are an to assessment thinking rates of are year couple in usually last or why we opportunity we and seeing home

higher that to estate of the So seen has at as strong. not think than price the real last are California, certainly rates home of with term we taxes inflation grow so years been longer risk in couple exception appreciation stored probably but the I have

somewhere estate stated a taxes be the range going guidance There for forward. a as is more the specific that bit years in providing seems So, little years specific to over coming for momentum in that X% this next will real year be we think start I without X% would earlier. few to allow

Hardik Goel

the That great, for thanks color. is

you me. is if will, quick one Just follow-up, flat. If Florida indulge

Let's growth say What on range. on rate in same-store change. the to your Florida roughly percentage the doesn't like rate tax pool to a speculate give is

Dallas Tanner

to the that, certainly relatively growth terms it of a on Florida have, rate, give flat. we the our Well, assumed want I but and you assumption specifics don't in numbers within healthy not we

Hardik Goel

On XXXX I mean.

rate Let's portfolio X% full growth. XXXX increase, the assume taxes growth Florida become if then tax is what hypothetically Florida don't are

Dallas Tanner

guidance X%, portfolio assume inflation which the math X% Florida the XX%. is doing the only higher as Well, without for XX%, at California is rest than certainly fly some is on where be be if to at you terms specific to clear it to in good but are a needs everyone. your place number is markets, going really that would zero, and for of be which I'm here. give starting another of Sure. XX%, it's we

saying, think that X% here we We if throw presumption and are just plenty going to it. Florida think is of I you be not just

Charles Young

confused want are Hardik be we read about about I the no, talking out and to transcript later Yes, here. you

Hardik Goel

your Sorry Thanks. for problems for Ernie. creating

Operator

from ahead. comes question John of Pawlowski Green Street next Advisors. The go Please

John Pawlowski

question and XX%. Rich's were Ernie follow-up prepared scratching XQ were half or on I am on and the Charles in tougher in my on up costs XX%, Thanks. will I in guess repair remarks up half head costs Charles. second XQ I on maintenance XXXX XQ back and maintenances of controllable repair expense XX the in get comps

You in had in XQ. pop a turnover

So comment. can me help remarks you understand prepared that

Charles Young

the line it for Yes, for in merger real we context third I of can second for are did year. comp easier more and the difficult see, you give the regards comp some you quarter that other are fourth some Certainly, us. that, quarter start they half With into us an to John. starting estate items in last synergies to taxes earn

I Assume see and expect personnel in performance will a don't we stronger other

we getting continue to keeps cautious turnover and around great, we half still record that quarters X services, we make turnover see seen some performance of have it of And on in good year. with certainly to further, last R&M to but with second down. favorable a sensed keeps the regards side, we but the X to continued lows were coming over results to as it's performance down year, the a then and the further to turn possibility trend and last trending relative

us, on potentially then is just, that could are for in upside side, we you So causing the maybe be for R&M middle head-scratching and so the peak part still season. we of that an

been to And all we to far year have folks and and how earlier surprises the the know try I so as analysts have right just prove out. have numbers, in we out called and to want avoid of will we been we just see plays our than and those better want do rest just be, so to we and some happy we appropriately that the year year maybe

to want the have where things half just we definitive right of have make caution where see moving and out year. are, as of of be see things a second We to level the sure the in touch your level answers control, a how have there we can and to we sometimes right it of

John Pawlowski

Okay, right upside but there is now. you guys one line any meaningfully surprising item

Charles Young

of Well, was R&M be now certainly not year. we looks points, of turn. anticipate did down as say it last hundred turn it basis as wouldn't and couple We was basis [indiscernible] points XXX around to conservative where

can laid So do R&M helped we that us had out had better we on certainly than and side we that out. expectations

that executed but have certainly too for for that, we teams the well striving early. really, And and don't want really I take granted to we are

and we opportunity that thrilled them necessarily, are even not we thought to have the even So to with pleased had little I would say are best we we thought. more we see a but R&M, better in might than cases our

John Pawlowski

debated exit pruning back Chicago and Okay the the cards been in the the to be and of a markets in of of has source could funds, years. portfolio and side big that full one management coming Chicago, from has out a been

Charles Young

want to right consistent have we Chicago grew. actually pretty we been that No, merger, size, and post we

of executing at new I better we are bit a renewal portfolio better to to bit has market. growth, look see in at, really if better starting cost that lease bit teams we in the rate, done much are team putting mean shape. I job maintain a better nice think little better growth, that much seeing little get you a a a

I gotten think of we that a out troublesome. more have have been assets bit

sense. that around the Midwest in In and capital Coast do totally it's of is of terms the of revenue parts make revenue, markets our part overall the to the we growth invest clear, West of not our be to total most in stialright in story. X% and Southeast want And

sense for will We anything makes at shareholders. look that

wanted there in like terms would that the of to at was dollars. thought play day we it we just At were an accretive we end opportunity shareholder where the to if we would look of value,

say, wouldn't anything at completely it's shareholders. opportunistic certainly would but for ever John, I So, look it that that mind, was top our of

John Pawlowski

thank you. Okay,

Operator

Please The Ryan Gilbert go next comes BTIG. from question ahead. of

Ryan Gilbert

initiatives versus much improvement demand performance. guys, in thanks couple rent about just Hey, are just those growth. blended that improve regional any you nice first a markets improvement you Texas in talk questions, taking how of to of is in Can

Charles Young

you, last are has Occupancy for Both as healthy we mid-XX. Charles. ourselves, Ryan, see the and have it Houston Dallas is want Thank quarter-over-quarter. market specifically growth the where had this in where be moved we fan. really growth this really Yes. toward Dallas a to really over we

up to keep, there. from want moving You

were year. we last increase because occupancy that see are to rent of growth We there. some at XX.X Blended starting

is market, as mentioned who around we a a new we on her wonderful little of a and leader well, combination is but in doing solid, previous market of the a it's great executing a bit calls, team So the job. building have

is the Occupancy over in been that we XX.X, basis QX Houston, over XXX is points. solid last while. up little have

a which lot at as starting, try rent pruning and are a I right growth while. have and done to of occupancy because we that it the that bit bit We getting size portfolio, we submarkets haven't to are our talked a to about right of we of little we getting out out looking have there a had in size little

in rent over So, X% blended we were QX. growth

happy but portfolio will Texas starts, sits. get where that we peak our when now see markets in we some seasonality So with depending how these school goes are right you through do season,

Ryan Gilbert

rent then have price And the broadly rent appreciation tracking blended in home there. showing talked guess Case thanks. and Okay, a year-over-year strong growth Shiller is price growth but home decline about Seattle, I still you in appreciation,

So Seattle how Thanks. influences medium term, then I'm appreciation for in declining home if and also that the and can your near you in decisions expectations your market. about price talk wondering then investment

Charles Young

let really clear, there, there market. moving growth, that Seattle. Great love the the are me We the activity love around it. job demographics, question. We good in And market. people fundamentals love be We is really all we positive the love

the little accretive. we seen a point in has home dip buying little bit very earlier, prices window earnings in of long-term a us, to lot of a We which a more for being of see a is have which

today bigger over this Seattle this that are have examples great we frankly as for to Western to portfolios, have X,XXX and our in time seen quite we of just love would out our think market markets get X,XXX all homes, as I units. we to think we we X,XXX over X,XXX from see built we and are grow

ability our growth business piece Our you the like our and happening. we definitely that something optimize see that, margin if but going maybe what would to pause or efficient and gets of much more going is monitor saw see negative enhancement on, watch and operating much robust gets so we and are more you to and don't

call kind a a the expect toward of, of that of and a little you bit now it to the over getting quite probably you years are had in We of couple last appreciation bit, terms the about demand still basis, but housing. X% on rate is seeing, a lot X% to in are what I are that on ability we quality we in to find blended mean terms happening of talks the quarter

So we don't see that issue. as an

Ryan Gilbert

Great, thank you.

Operator

Johnston go ahead. next Deutsche. Please question of comes from Your Derek

Derek Johnston

are you Hi, everyone. How doing.

could wanted sure that you, assuming basically Is a it. look every that the on party I'm work fight clarify single with third estate just I at assessment I correct. real quickly make this, and to and taxes Just to

Dallas Tanner

prices, to there. fight so you on have look California, fee we portfolio, falling at is third don't a in basis single do comes helps we we there and we think and there on which home win, pay us really to that deal don't have want In but our is party, one legitimate Derek, to a don't jurisdictions, much take by every out, assessment, If again through. fight to expense, then every is home we necessarily have you a who opportunity we some with that not to less, XX% of home

Derek Johnston

And to this is residents with with work process and how percent typically right a by represented just is and mix, sub segment growing quickly tenants. it. the Okay, sales what the does now dispo got

Ernie Freedman

small that ownership. moving there in question pilot call our is look two out program we figure we to have first that little and and number of started, home people that move-outs our been move years know Yes, to typically was to great and are reason what and reasons, you why we almost resident what really bit demand ago, data home the try has really in terms for and for of a on to

there sure families of in have is an just been and approach something are those our done for we families earlier, about mentioned customer and Home XXX lot program. the a majority great perspective I resident as it's that to to been to they at base, not look a to so a properties may a these it's in the building that to-date have know do decision have us, the we the sell that and or purchase may connection we scenarios asset emotional we only Invitation lot and sensitive management we of first the from not residents so with one-off of these time when will perspective and probably we home, make making But needs an want pilot our that through for of a of goodwill but from a

process if figure to be the any house how is have you we any can this we think we out like through dedicated love where There offer you a some make process that. we that your we management team interest out, are and sold and a could have don't some potentially walks that that anything would and reaches or working through asset decisions financing home

opportunities of typically we market, can help types a they them truly are title but find things those in are for we have looking just seller, pretty relationships if good We where things. and can

Derek Johnston

Good Alright, guys. great. stuff,

Operator

of Raymond Please Horne Buck from comes James. question ahead. next The go

Buck Horne

just was year-to-date. benefits for like on extra some little had guys. G&A I if around provide you your expectations you could it strong the Hey, the Ernie, have year, wondering of guidance looks trends of a rest bit

G&A what Just should wondering we expect line. the on

Ernie Freedman

save of just little Yes, end of case. teams a the kind the year, will up usually extra for in

got G&A of some we our in a some little on areas. actually ahead So spend

So the year. of for rest I think the pretty it's ratable

G&A get first a not half we have out, the in the but It on quarter, you of seen similar second kind year. quarter into may the to buck have materially of of expect noise as a little So rate. half year the run different

the of kind think And then a management it's on side similar property story. I there,

and property first the management year in half of change half different materially second a of versus spend the year. see the expense will we the You

Buck Horne

it are shifts significant discern in that like moving people Awesome. how trending. any trends going used and you I seems what to people - you and/or are Perfect. just resident terms low was just be. of to in are situation And in where where able their turnover wondering be reasons been coming the to just if prior out from living to getting have

there if trends reasons. Just in is move wondering on determining these any or in move out

Ernie Freedman

mechanism reasons that the move track formally, will we moving don't house. we in Invitation so capture to people coming note ask in in to for a Yes, have question field Homes from we into formal do where and that is from someone time, the time

is homes quarter see reason on transition purchase to the life of just reasons the in down move-outs, a for interestingly the of are little the a we home again first is that But out to this we being quarter enough bit purchase the two that year-over-year. seen a have search was than consistently transition, home reason purchasing for a more move-out and did this again move life

that So one but X wasn't, was the it at XX in been quarter case the basically last the it in every is and flat. quarter

a the the down buy So versus reason home. first to a number we reason one and the has buying a time moved out is transition someone to we to this just home continue why then to see be saw trend barely Life

Buck Horne

you, guys. Thank

Operator

go from question the come last Golladay RBC Wes ahead. Capital And of Markets. will Please

Wes Golladay

and that morning, cost capital your at assets money Are of top tier in top everyone. has pooled success now and more Good you looking international submarkets finding back has improved?

Charles Young

by we quantify bit will that for would a a had and most top know our higher I think I little peers I stab design. been it. asset But take than us, you mean at by is I say of point want was, what and price tier have to what always delivered you

laying HVAC business a about some Every is in or your is you that terms early part, return and or rental on there most $XXXX in numbers. the risk total so $XXXX unit $XXXX replace figured cost think adjusted for is the the longevity factor of expense $XXXX that as that this out in rental we as it a approach same out to on

of market to as that are could foreign specifically helpful as an buyers you there in lot us think coming of less places I West in Coast into that international have Southern terms softens pressure of like the opportunity. parts be maybe California, had the Seattle, is right a buyers that from

some with where of agree that seeing in you more and there are I bit we markets So I supply. a are those would think seeing of some we

seeing six healthier still itself a or Let's be eight for of months to in like nine we numbers hope are seeing not some X lend clear, we X, these of so that additional supply us, opportunity. of months lot will markets, X, to and are we or supply

Wes Golladay

growth Yes. That secondary was of do in growth your dispersion I markets see looking your job school markets that they that submarket best at freeway, new what looking assets just in some good your thought, was we California, well maybe a district, see you much for, of the located rent the Southern Northern California. they and along the Seattle, in meaningfully line assets up as located such just maybe are or number, rolled but outpacing at in

Ernie Freedman

are rate we of markets I seeing your X% Coast kind growth. year-to-date north me terms of and greater of I at markets, in almost quarter-to-date answer are across make call answer with ways. the Coast Yes, I to-date, I two agree markets. our to sure mean, year West levels much are our in you through want would that it let in there X% - performing West Generally question.

that and The processes. time asset level to X.X% absolutely talk things anywhere our across pretty submarket these at about healthy and I generally management from all Charles X% the rest the of are between our markets the are

Florida. models week-to-week, We to couple hundred decisions South and in that more calling so around look year-over-year a we month, like Charles or model all have at management mentioned broken and selling on growth our our making and feeds data portfolio importantly assets into month revenue earlier our of different basis a that of quarter-to-quarter, submarkets as are we and into

where are we type based decisions risk in make always itself now We allocate or would will decisions our for we issues very are and performance, into like capital going future, preventative decisions deliberate making and around sell that think around the we what to can lend portfolio cost we the to preventative on there where would asset like forward. both any costs to greatest

your Does question? that answer

Wes Golladay

yes, does thank Yes, looking you. like no perfect, submarkets, into that is the granular multifamily I the toward exactly - yes, look definitely so was much more

Ernie Freedman

you. Thank

Operator

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

Dallas Tanner

for upcoming our in forward of I everyone you Investor this just again October. we look appreciate want us Day Operator, our at to today, interest seeing thank call. conferences Invitation many to joining in our We Homes. concludes and everyone's

Operator

conference The concluded. now has

disconnect. now may You

Invitation Homes (INVH) 31 Jul 192019 Q2 Earnings call transcript