Invitation Homes (INVH) 19 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Greg Van Winkle	VP of IR
Dallas Tanner	President and CEO
Charles Young	COO
Ernest Freedman	CFO
Nick Joseph	Citi
Shirley Wu	Bank of America
Drew Babin	Baird
Jason Green	Evercore
Hardik Goel	Zelman & Associates
Ronald Kamdem	Morgan Stanley
Jade Rahmani	KBW
John Pawlowski	Green Stride Advisors
Haendel St. Juste	Mizuho
Ryan Gilbert	BTIG
Buck Horne	Raymond James

Call transcript

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Operator

Greetings and welcome to the Invitation Homes Fourth 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 year us XXXX thank quarter our and full and earnings morning for for joining fourth Good conference call. from Officer; Financial call and Chief today's Invitation Dallas are On Tanner, Operating Chief Officer. Executive and Ernie Officer; Chief Freedman, Charles Young, Homes President

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

in also to inform you to or outcomes XX-K obligation these I'd of annual this materially to update that which so. and does our and certain call performance differ not such from statements any to risks subject report expressly relating other results nonhistorical liquidity forward-looking our the statements business, are future uncertainties that Invitation do could statements those capital to Homes from during cause and like other on with filings and statements in resources financial results, and indicated actual describe may made include statements. the make SEC XXXX disclaims and We some of to forward-looking Form risks time. any uncertainties time we

supplemental most may the we which comparable these find are additional GAAP website. non-GAAP section non-GAAP in also information information call of this to Investor financial Relations measures During earnings regarding these available of measures certain discuss measures. and release measures our To on including the our reconciliations

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

Dallas Tanner

you, Thank Greg.

reviewing of heading XXXX. the of turn our our AFFO accomplishments. increase by marked about But before by Homes let our and XXXX some for momentum Invitation X% into for year great excited a plans year, same-store begin growth NOI I'm was me in I new to X.X%. XXXX a

an enhanced we our service In take us synergy operating future to our and of for enabled our with integration provided our has work unified expectations. Waypoint equipped This to the that the half of quality the capacity of heights. merger team first growth completed and new year, Starwood exceeding scale platform resident

that in XXXX to we proud helped XX%. a are drive turnover low record the of We resident delivered service

we drive X% enhancements further unified year-over-year costs ProCare reduction controllable also a made in together helped platform, in which our Alongside XXXX.

While our to leveraging expertise capture remain we cost revenue tools top-line profile, demand our improving and and fundamentals also supply our field successful in favorable performance. management local in

translated to For X.X%. this revenue a growth the full year of XXXX, same-store

activity for better and acquisitions we exceeded accelerating year and portfolio should respect the recycling With dispositions, that long-term far drive goals to initial growth our capital returns. risk-adjusted

we sold total, to higher expected $XXX our no In million proceeds buy total to that homes $XXX use repay long-term of fit homes approximately million strategy and and debt. with longer returns of

short-term to of earnings some resulted acceleration accretive long earnings this the over in be we recycling it expect capital to While dilution, term.

scale and Our homes also capital million In Atlanta by acquired leveraging recycling successful platform. incremental for a $XXX infill first of bulk Las Vegas in our and we creating included the of submarkets the of XXX portfolio in year, transactions. value XXXX half

we We In did there million our strategic we sell allow opportunistically December demand market smallest homes in markets market. Nashville, per were to X,XXX $XXX to able to the XX% for achieve of portfolio that we not one decision sale completed efficient we approximately for rentals Nashville of portfolio XX leveraging in the Nashville. our made single-family a same-scale other our size average in able transaction. as bulk exit investor efficiencies a By in where are strong

financing a cost by first repay channel company, in ever higher Finally opened we debt. We had from our another loan to using successful markets. capital insurance new life year proceeds closing a

at times in our XXXX by times from debt the beginning to at net the year reduced million year. of $XXX over end net the the also of We X bringing X debt-to-EBITDA

team as at Industry proud am our even why XXXX, together we feel Investor accomplished growth to look Day favorable. we more I explained I excited ready months in our for ahead. fundamentals what am run. we Several of are ago As as I

We strategically enhanced scale located growth opportunities. have a and high-quality portfolio that

We that than refined platform a better to is optimize have positioned execution. ever

We and we run to both innovative experience. clear external team to the And growth. drive a of have an that to organic goals resident committed is toward have set

longer We to are no run. ready just

many to in in expect address which toward XXXX We like detail. make significant are more now to I'd goals running and progress

our supported the First of U.S. unique X.XX% at a to rates In to strong of household by at average is households guidance. footprint, same-store fundamentals. growth. XXXX, we expectation twice running market formation many our demonstrated and grow preference have have lease. by same-store these the NOI over This been midpoint expect Across

locations Invitation Homes opportunity professional family-friendly even XX/X where Home to want that includes features more service Smart attractive leasing the lifestyle curating and makes technology and to live. lease residents by a like spaces convenient

leading has built-in hedges. regardless age what should happens economy, resident millennial the a the business of our believe cyclical the of tailwind of XX years. approaches we cohort Furthermore, average And edge Homes' more as in demographics broader of become Invitation

ProCare positive capturing fundamentals, resident service efficiencies. further days same-store Beyond growth and will reduction improving we through enhancing on focus in our

ancillary forward In initiatives. ball on will service addition we move the several

more rate an future on we ancillary foundation expect laying dollar million will be likely $XX income to income run of XXXX. are and ancillary in from incremental services years ancillary small, impact $XX million of initiatives the continue to growth While significant NOI from the by these XXXX in

In seeing presenting themselves own less in Today many and Moving these added. buy XXXX homes scale to NAV on earnings are we per homes accretive are benefit more X,XXX which from opportunities to many another as economies markets in today homes we growth external share. cases, enhance initiatives, where from internal significantly of than can opportunities growth. priority are is

and Seattle, example, Vegas Dallas. For Las Denver,

expected cost capital, persist XXXX plan buy We acquirer see of to relative our net opportunity like greater homes. scale a homes in opportunities to Should be as also in attractive Atlanta. we and of accretively Orlando the of markets Phoenix, to

upgrades on with will existing returns. to to front, excited to more couldn't seek external resident Also the to improve portfolio best-in-class invest I risk-adjusted be the enhance kick tackle CapEx and durability these XXXX we homes new and our increase initiatives growth value-enhancing asset off in program we and expand our year loyalty, whereby team. platform

our your We running are as toward we grateful for service year continue outstanding for value support our creation shareholders. and of residents another for

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

Charles Young

Thank Dallas. you,

same-store performance the finished We XXXX We of respective both as revenue and NOI growth guidance ranges. end strong. with our their in financial at growth pleased high were came

new proud continue resident make survey we scores I'm strides fourth the that with heights. resident by importantly, More our of quarter the our to service reached evidenced in

core through NOI Same-store year our our more growth revenues a results by the other you growth X.X%. in XXXX walk in now increase the Same-store property year-over-year. rate income fourth net operating to This NOI full in detail. of driven same-store X.X% quarter recoveries. grew of resident I'll X.X% quarter fourth X% of brought increase fourth quarter and was rental XX.X% average growth monthly in

the maintenance were with core quarter prior X.X% for line XXXX. our consistent spend Primary for by of offset revenue in OpEx expenses. spend. XX% Turnover expenses were Year-over-year full moderately was repairs year-over-year. increase in of were Same-store with our overall more brought partially occupancy R&M X.X% increases than the expectations growing property year the This growth drivers year. the increased CapEx. R&M decreases Average quarter in taxes and in same-store R&M fourth and

quick opening the moment of X% expand decrease and in X.X% cost to of and that efficiency Before to take year XXXX. maintenance to to was than on the Efficiency remarks. only full year. in the moving expectation XXXX a limit sustainable drivers that in a beginning and the on coming his This repair from performance prompted the increase to maintain maintain expenses, better controllable initiatives expenses I'd mentioned like in turnaround on into our cost summer Dallas helped and

In addition in reduction drive helped X% refinements costs platform XXXX. to in personnel a

turnover X%. and and cost low process with down costs rates turnover drove coupled record down improvements X% leasing marketing Finally

of January XXXX and in Next, I'll XXXX. leasing fourth cover trends the quarter

field we well heading maintaining occupancy positioning season. leasing seasonally peak to management portfolio the the of into positioning the favorable leasing. ensure revenue our In together worked prioritized Our slower months upcoming higher fourth January and teams and in for quarter

XXXX. off is fundamental with growth quarter leases renewals rent back position January fourth is the XX.X%. January well In leasing in X.X%. higher season slower coming at was than Occupancy tailwinds quarter confident leases January renewals for throughout we leasing new X.X% new as spring. we This and blended the with where increased our year's for in when should are January basis which XX was the for occupancy the last X.X% and X% averaging in peak fourth Blended start of X.X%. and us With at growth kicks at seasonally X.X% rent points of

only but partners offset and inflation. corporate capture best-in-class the XXXX on to Our re-resident positive more of with down operating I'm operating and teams offices. executing focused are in to opportunities fundamentals to the in also our excited to after central cost efficiently days drive these go team on local not support field and

our to Ernie Officer turn With Freedman. call that the Financial Chief I'll over

Ernest Freedman

Charles. you, Thank

the quarter; financial two cover for capital following three results topics: sheet will XXXX I fourth balance activity; guidance. markets one Today the and and

balance capital sheet and markets activity. I'll cover First,

capital over company. investment turn a quarter quantum our as of in we to where We meaningful through net deleveraging Xx improving the continue we an our make was reduced tied to efforts. investment-grade by the markets metrics from strive reducing XXXX $XXX our started debt-to-EBITDA full In we to reduced overall become net activity accelerated million This overall down to progress our debt fourth in debt leverage and year.

almost proceeds voluntary secured hand sale toward our the $XXX interest average quarter. of as payments also benefited from prepayments our higher bulk to cost rate repay well directed as other we These debt. cash First, we as on weighted in million Nashville debt used

two during cover balancing raised continue via our fourth our In growth reduction will million $XX and quarter we ATM acquisitions. to quarter over-equitize to program on opportunistically. external the now XXXX I'll we leverage both the results. focus XXXX financial Second,

X.X% fourth lower share and increased FFO and to respectively. same-store interest by $X.XX for cash Our lower quarter NOI G&A higher expense. was property expense per year-over-year This AFFO $X.XX management driven XX.X% and and and primarily adjusted the

higher share core increases cover will including non-same-store is the AFFO bulk were guidance. count resulting ATM last due sale issuance. Nashville NOI in and offsetting disposition I and thing from to activity XXXX Partially The our lower FFO

we have tailwinds fundamental As strong back. at Dallas and our discussed Charles we believe

X.XX%. grow core X.XX% to to expect We same-store revenue

We the expect same-store core of range growth X.XX%. expense in X.XX% to

expect we sustain the to achieved XXXX. in efficiency We gains

OpEx an at inflationary result of midpoint cost at of expenses the rate as recoveries to to net our costs approximately and such controllable the grow expenses a are personnel of of As anticipated guidance. portion X% are which of comprised maintain

total core an grow the renewal at Anticipating levels are to controllable our a of growth Fixed property expenses. as expense XXXX. expenses Xs. XX% expenses expected taxes expect increase XXXX with real which rate in With than insurance in represent in about larger anticipated increase our a moderate from rate insurance estate respect higher to to property our our was we last

growth our the in first the moderate year course revenue rates Year-over-year first than expectation to This expect to expect over higher year-over-year in we X.XX% brings comps timing are the NOI the perspective and XXXX growth XXXX. more second a expense be X.XX%. From half challenging growth NOI also of growth of half. to for of in we the same-store same-store to half

AFFO of acquirer to per we be $X.XX in is an is be Full be range $X.XX. share of the guidance core is XXXX. Included in range per XXXX net expected of the will a FFO year and $X.XX expected share to to this homes that $X.XX to in assumption in

dictated capital relative with ultimately an volume take opportunity cost buying is as approach the progresses. opportunistic attractive our We by of will year acquisition the how to

quarter. at have $XXX pace per Most recently approximately we a of been million buying

XXXX fund We in found of to to bridge acquisitions release. disposition guidance would with XXXX. per proceeds core to portion midpoint a FFO lower-tier the be funded at detailed XXXX pace a homes have albeit earnings multiple tools can expect available and A than with sale our of be of in from the share which moderate more

anticipated of in our AFFO in result quarterly dividend our growth share a XX.X% we by to have As XXXX share. $X.XX increased per per

low a we as target and deleveraging external We ratio growth. to prioritize payout accretive continue dividend

position The I'll that to remarks. fundamentals XXXX excited fundamentals and assembled favor and up are discussed these in towards his reiterating scale we've our within Dallas that the opening run are wrap we to strategic our in the demand portfolio. in on priorities locations with client by capitalize we're

initiatives on and are execute We pursuing is our prepared to external lead entire growth. focused strategic team by with refined drive both to widening and efficiently platform our our organic

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

Operator

Joseph first with today comes Instructions] go ahead. Nick from Citi. Please question [Operator The

Nick Joseph

you of above wondering paying can end. and In start or debt. fourth and to XXXX core on gets fourth starting walk annualized recognize FFO to did rate you quarter gets guidance. to refinancing down just through which the the run if transaction quarter number so to But that just activity the maybe I any right low Ernie there's $X.XX the some you you guidance? $X.XX And adjustments the

Ernest Freedman

try I'll And more and high Yes. quarter. it in fourth take to a it with tie we it regards back to approach year for can the at to level full then the

where supplemental to So for and the in out the we range of is XXXX guidance $X.XX. full walking growing midpoint the our from ended $X.XX year at we laid which

adds X.XX our rate growth NOI midpoint guidance $X.XX. of expected the off, of First at

with of as was couple decision things NOI XXXX us we But exiting to gave the that us thought the regards to XXXX further. a from a to of go But to to sheet acting are us use going the was for that a proceeds in as that's contribution which wise cost dilutive the to I was of we about of $X.XX. delever think Nashville headwinds market. it us have that use as terms for up good proceeds compared We balance we

fourth the me, the that we portfolio December. certainly quarter contribution XXXX the - And in excuse full had in a as we XXXX of of sold middle basically Nashville from

little a bit So noise there's that. from certainly of

place a terms we that of was in walk pointed look half you About be our drag disclosed are financing swaps. in that merged of similar by few from one have out items, what years. just years our to Those at were our over cost with, costs step-up we with the XX-Qs in to fact step-up swaps it our of and forward I today the comes $X.XX the when that addressed. four going Homes in put fixing many Secondly, and regards the last was Invitation in we've these long-term company place ago when XX-Ks a still which we

A number the rate. in place was replacement - higher years during XXXX swaps they at And few like expired XXXX. in the last swap just for did is of a

And so, of going cost entire of kind $X.XXX to out that's about our in the dilution terms year. spread us that's through

quarter that factor you which around number that, as number expectations impacts back little this net well, that then out a to again So fourth being and a our you in we do. that acquirer and that pointed when year hope to

midpoint we rate cost from that the closer of be higher you at have guidance of of also the about our have an kind other would $X.XX that have noise talked that's part to big from the we to would versus seen FFO growth what the the that That the X%. us bit - dilution If we are have a single-digits $X.XX. to Those closer didn't of I if didn't $X.XX projecting there. funds drivers that's again were of take little

Nick Joseph

quantify can what acquisitions acquirer guidance for And maybe on comment net just that XXXX? in you and the assumes dispositions then

Ernest Freedman

to sure, $XXX be hope almost to we high was so Yes million a do about were we - the million, million. to finished up able to pace second half XXXX. similar out $XXX acquire expecting million between $XXX to do of we $XXX And that that anywhere pace and is

a up that year. on in at pace seen the acquisition XXXX. continue to typically in what the ramps And you've able be we'll that that years hopeful throughout we're So similar front to our

The is little typically first lighter. a quarter bit

jump great quarter, of up we in. users us it in ramp in season see by kind the the quarter. as opportunities fourth the again buying And down end for see slows quarter some in peak to there's down opportunities us winds then third usually second You

across So it wouldn't ratable be the year.

conditions So, maintain see pace. cost depends that market we'll are that of if on all our is capital and we It can at what where the time.

of guidance relative more dispositions little A you to like more across in in but little sales to the dispo amount $XXX any than $XXX think exits going the certainly any we've On may $XXX in consider assumes notch, of out bulk you disposition saw to that market XXXX. one that of on proceeds come in. saw done doesn't about And The or Nashville. the a maybe where drop-off the year in you'll the front-weighted have we're million that see is million front range probably front-weighted but the - guidance generally what dispositions. more a as $XXX to million you spread a million

Operator

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

Shirley Wu

do has my with XXXX your guidance. to question So first

on bps So acceleration midpoint XX the at you do around of revenues. assume

I'm blocks terms you're consumer? and seeing So just a demand what that in from the of building as curious of

Ernest Freedman

yes sure. Sure

Let at I a in you guidance. from the Not At weigh I consumer. assuming let midpoint we last And can X%. was guidance came pleased me the X.X% our revenue XXXX, pointed similar talk where seeing we out a in at I'm X.X%. year we're did high-end about the our In to from X.X%. about guidance XXXX, as the just think Last guidance what our for and that Charles of currently midpoint demand and growth came with of what at we're ended of in year.

than year. likely the bit year that's growth X%. rate We're a relative plays but revenue slightly its than occupancy have assuming to X% XXXX and midpoint So embedded other at in compared of XXXX, income out. of assuming compared in higher prior to similar higher But assumption track we're rate of our hopeful we're relatively little the to of we'll a how that that the growth certainly record in stays it other at guidance other the just it improves to income so terms flat overall see

a what were XXXX. from got a rate a bit X.X% similar will that what that XXXX decelerate saw with turned as that growth it little thought as did rate. us that's a offsetting you a enter from better little we we bit perspective we and to We had do But are to able expecting where out in we and

numbers occupancy. year-over-year increase as a We to on basis basis a to Shirley Just think in had about numbers. you the in year X.X% point XX XXXX and last get

As to more going I year. be that's mentioned we this flattish think

for bit you're hope better better So on to we certainly our to the a X maybe with lies X. that to bit opportunity do out want start that, occupancy that's but kind We right little maybe about now? see you numbers. out of we We reasonable rate take talk want a comparing Charles, make seeing on into expectations to demand you built what we're a bit to little sure do better the little the came year.

Charles Young

Shirley. level, high tailwind the a Overall remains significant hey we as across markets. demand strong. Yes Supply fundamentals look are

occupancy. As QX we to we're peak go that I we're in took make good in can And said so still in we last my to to that in opening hold strong that season fourth the we're year-over-year January capture demand sure on above where we quarter trying the in focused shape. were We're occupancy comments, out year there. seeing

Shirley Wu

my with for I platform? what industry thoughts question that's to major means announcements on Johnson the just the has the do a FrontYard. merger to was curious So or niche, on that with as whether thoughts the and recent overall next eliminating your

Dallas Tanner

it's all in recently you that From prefer things perspective. the high perspective is an not that happy I industry. though consolidation see you we the Dallas. this on industry some into generally smaller at the the any speaking an that [indiscernible] get of this about level talk to I'm transaction industry the it’s marketplace happened as call. good competitors look or see Shirley specifics with to happening for from announced whether

industry. many with would some that time look have things considerable as We this space operators in that terms thing other companies’ over will industry distance and scale. We for good develop the ancillary opportunities at of around it expect the will a

time. experience will which the residents As the over offer to ability well for industry quality mature only as help

involved all view as companies the we a industry of kind for consolidation So, these that as moments are a in of opportunity whole. the of real

Operator

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

Drew Babin

very question were XXXX the putting at of I assuming pace guidance? ahead like hit leasing you low leasing looks Building of you'd year-over-year. to guess it of deceleration be one together on end year for And kind early pretty spreads it significant January in Shirley's in a least all occupancies the about trending the X.X%. far mentioned in have overall to so the

seeing to to on And guess the there just things it is point - that - of so being as together it anything blending year a Or leasing peak product of in the actually filtering down ground how anywhere early deceleration approaches? that come is waiting season I in this that see would spreads? and kind just you're leasing

Ernest Freedman

definitely we And signed I'll low caution in XXXX leasing for get that. us of take Yes end. A of Yes this and a significant more the are in the XXXX of just not you you're remember fourth to on the out range. our Drew, XXXX when us. baked already light understand both hope point when that right based we the quarter it's lot I guidance latter. months see also think provide it of leases factor that. much, quarter and And certainly first for would much sort in to the we is deceleration revenue a

the occur the activity to quarter second for it achieve of and third in will residential all terms we space. brunt The quarter year need XXXX. - the across does of as the in Leasing

at time much So cautious January be year. that too get might to December numbers they're excited want because not the its and to not of not if always your too lot too doing worried where great draw you're get a - you are of leasing or to not also whole activity I'm early

year guidance things we feel saw certainly we're in good to We we XXXX starting we And did if where we in in are it feel to increase out our as for go. the play what range a had we in to at. well later guidance provide that we but similar as year opportunity XXXX that a that the able season XXXX want where possibilities see as are what to path peak could certainly, we're

Drew Babin

the on kind lot a about And tax work the estate of goes growth thousands And obviously is which I good expense Xs there's talked side do. much guess there chop assessments how millage changing as left as legislation both that to rates, the municipal this I wood to moderating and in into need revenue somewhere that to with is is appeals far will news. guidelines? appeals of and real know the of impact you you that tax year

And variable is bit extra on just like there then be R&M could like the or too early predict? you guess to a I maybe anything where goes a but the that benefit expense year guide anything revenue of it the side might little see on little I as

Ernest Freedman

the a said Drew to lot our of on guidance appeal. right success when always real does lot it there's comes wood estate to it and Yes appeals. assume tax And of a chop you whole not

an to like better continued and a years So levels. and its there. perform normal basically everything. good if year opportunity expect moderate XXXX. we had states in again There's - pretty have do course But to We appeal some upside to potentially better But success. Texas in have it's we the to

of of on good appeals we go in on. we We And news Georgia across if outstanding have and it still jurisdictions. fingers have that you some different got crossed a number our course hopefully

opportunities You us. Florida different for a see big in always is one

a is estate Prop over at our California growth are time certainly helps to in the X% estate we're tax moderate real seeing that XX rate again taxes exposure. real there things that nice locked exposure One because fact our with of of the and

not something potentially little And bit get with our expense also, a And side have prepared Xs a with revenue the we excited and so month to too as that expenses in to one the it's we'll us. in we're and what about. again the the to plays January days. we enough we'll than go see right do better January but out again, came Drew opportunities good broader - than expected was the early better regard how Across for expectations month there. year also in confident things slightly But how see doing discussed going remarks. that you're meeting regards do in it's we're on that. might to to environment

our in built our expense some might In in level our to numbers. it. some enough to you and best certainly try have don't. years you in factor unfortunately contingency do some years In We some need built we of And not may similarly guidance. confidence as it's we'll you years where hope year expenses we through do went any to And year this and big into year that too a last with give but had same early the the hit. in outperformance to that

Operator

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

Jason Green

year-over-year. Or rate bounce there given room I side less of to understand seeing the rental kind but today the is rate? Is product On and curious growth push you're just numbers can renewal both quarter what a new mix? that these around leases showed slight deceleration in

Charles Young

Charles. is question. the Thanks this Jason for

said tailwind. and rate you the year were occupancy year-over-year. peak a the demand season seeing had When are both on aggregate, you still I it we on XXXX up our in and in ever. strong we fundamentals ground great a supply As had And and back we're markets. leasing And growth step best look

occupancy. clear retrospect as wanted In on as we slowing we down slow long though we we the our little focus the And QX. talked maybe season. new it's look QX to to back too and are that may started QX lease seasons velocity And leasing it leasing rate it's about held in into a have

and we're some to got we January keeping We're And in occupancy and above seeing markets. And push we where to momentum so in. a on the north year of In the great. to had XX across get markets what last were to is which you're back of XX going little in we QX. we're rates bit that down running

here where foot things season we set little to all the season our capture that to sure for is happens action make can are want idea ourselves peak whole QX leasing QX have forward. peak leasing to the So best the up a slower. We

Jason Green

had today's are you guys of quantify talked about in Got able from it. with it to per pricing marketplace total today's do million quarter acquisitions a sense know I $XXX today hoping potential in the acquisitions. But see that market you call you dollar amount pricing perspective? And then in to the makes

Dallas Tanner

and mean this Good I question. Dallas. again Well is

we think I his in focused and acquisitions. meet Ernie markets $XXX We the about growth think each given supply quarter pretty and in. this other as environment look achievable million mentioned Q&A. in in said comment in per we that where And really earliest think of run this we that the that rate's we're feel the today's demand about kind

feel good front If million we acquiring. between find to external $XXX to in cost of It's a to somewhere at $XXX environment certainly you're hard the more point today's we of quantify doable on pretty while opportunity of in is. missing capital everything our end we a us. the that for come more and try million and that that more quarter opportunity lean what But including those day everything feels in you're pretty we certainly saw would growth about of what top we'd bit weigh estimates out at and look

Operator

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

Hardik Goel

end the guess capital. update the sources I of to year? leverage at you on and us an to give out the Can be just where expect round uses you of

Ernest Freedman

between capital our where by EBITDA we of expect our on our the and X.Xx But the debt improved continue EBIT our Yes Xx to of allocation, on able is be to see absolutely. in with year. I coming do based and to guidance And where numbers. a net And lot regards bring depend to to acquisitions would expect net will our we we'll we plans debt-to-EBITDA be activity end around and and that that somewhere dispositions. kind capital

Operator

Hill The next Morgan with Richard from comes question Stanley.

Ronald Kamdem

for on Kamdem Richard. Ronald

quick of couple a Just ones me. from

that just Any the back the what exit. is an not, first to we that The as that sort are to about? on for mostly could going road markets And of opportunity? market exit thinking targeted going be markets should potentially are see dispositions down we the be if could other

Dallas Tanner

and performance measuring going the portfolio be asset a in whole in terms of we macro against perspective see the how some at factors look markets. Yes from we're always of we management as that other to an ourselves

the we're sales market as mentioned in in any XXXX. our the bulk comments any for of plans his in exits at Ernie So beginning pricing year not for guidance or

parts which I sense at always that aren't traditionally term. the our view just over we've making of global where selling the returns nonperformers think around geographic long selling that us the we're And that's typically a ton of what terms our of we looked will weigh outliers’ portfolio find out we best risk-adjusted of in the margin. are center on can as for where that

we're a that the bit you of part more and more properties of some we're ability And having the active year turning look in review see the as the to middle little lists on norm our outside market a the are the questionable than expect thinking done things from we're But and that mix anything perspective wouldn't that we've assets in about. I past. and what

Ronald Kamdem

follow-up. And a quick just Great.

back Going question of control just little the digging a expense to in bit.

of they R&M all maybe to would it growing fair uniformly are growth think growing sort color some you're other distribute the and that it? Or us that that maybe about the to think targeting line of I other about items there helpful. below getting is that average? above be and X% Any

Ernest Freedman

Yes.

right when inflationary well. it do interest similar both the year all about R&M expect just around as we talk it side It This to and same side talk And we OpEx brought the being we and I maintain. line So is scope of amounts. think OpEx increase. that item it. the on CapEx capital cost that overall in about It's is of

Operator

The with next Jade comes KBW. from Rahmani question

Jade Rahmani

And from With change an current well asset the issue as base into you this of I how far just operating about your making do XX% considerations import, like terms about revenue you're an a in ahead to to costs insurance factors? affect like Florida when other and you How climate climate thinking ask about new looking issue? as would practical investments? think are and wanted California of when and issue thinking coming start at change

Dallas Tanner

let I'll the question. question. take about question your Thanks first talk insurance comment second Ernie Jay. I'll the

and markets. In markets us referenced how growth going change in on on Florida. think of Obviously things you both here. couple of warm We're a weather those very we about focused terms California and for lots climate high

own and why your flood all around look and plain as to also your So pricing launch to on as Ernie exposure and the like a portfolio you can at could for first which start in you you which things of want which where on. assets be have things whole sensitive to question you doves the potential want insurance comment

available try solar such And to opportunities ESG around get some the actually smart We've things I us that around fall what work we're things to then like into what buckets doing things. and some that. we're are call doing also to as got early

for strategies us sustainable the are Now long those haul. for

that landscaping a it's do out in still are That we around not our of can a to mission grow want that today completely environmentally-friendly is it's focused to got being But whether of position add We There's an where room hard be changing scape consistently. part we on. certainly active feel narrative. in we've We're that already like lot company. things something And and figured things that. that things community. and there's to we're but which

also So which think now. profile the things risk being experience to and why. around from do be the us what also way And service I focused sure environmentally-friendly a from where that then and smart can making that assets enhance are are along right perspective we're for a all we that

Ernest Freedman

on would that. very of as the risk-adjusted On focused we're our certainly very correct We're premiums about entire the putting and about cognizant that side across expense the required be portfolio. it's think we investment something even returns side because thinking

we really Jay our had where wildfires And where to California specific California haven't we've and a about perspective around would are impacting California be are for investing the we're date very From been been us the in us. where wildfires. the are climate risk power geographies based very outages a fortunate on from perspective impacted

climate So to in specific we're when the that Florida sure separate Florida where to on or to you for California which is very insurance we're been plains. the flood risk, investing we've we're an very insuring careful In is risk quake in change. make that take from coast exactly a really perspective not exposed

across perspective. risk that don't asset compared storm in $XXX We like happening what our be about many, single location impacted is from And that many of spread very out million one other assets miles. to that have residential thousands across is a risk insurers something a significantly our by could

clearly when has a it's exposure of cost bit But have to So comes little good anyone commercial that to insurance to probably Florida who's it pressure dispersion seen but us to residential estate have more because risk. we position little Florida exposure and we a better relative in and of of other they mitigants real nature type. offsetting bit the asset put some our on

Jade Rahmani

growth out you cap the turning Just of difference investment based can in a big rates? make to outlook far Because your looking terms How and it acquisitions. assumptions. are on

to out. a or same-store years For X.X% growth market buying only Vegas to X% buying is about if market organic Phoenix rent say at out. X% gets years growing five rate higher are but X% seem example the a X% attractive might the with a five cap X.X% that gets cap at and at growing But X% where to similar growing

your how criteria? far in underwriting So of are investment you terms

Dallas Tanner

on. story in cap doesn't It's whole And acquisition. And tell rate the a any you on spot great question Jamie. you're going

total we're agree. would we And So return investors. remember

what to obviously we going emphasize cash about going made around So the to happen really long and look yields at look care haul. asset but we the what's flow's the the you really point like ingoing to over

that as three look kind we going of And are about as completely is it looking a yield our models profiles. different But what of like years we care as couple between our look typically agree. and we at we And if as there's return NOI specifically at at growth. outperformance so that markets. ways And we're anywhere XXXX-plus last do and we five to Coast. going three look year much the of And have the where do West think notice mean we where active majority we I much you that in one we and XXXX, year our on been year you'll with coupling acquisitions made to the see were

the of that's really, It's see like really X% seeing. that in you quarter of we evidenced rates the Charles markets are new in has lease And in for and And market. mean types it indicative example the we're you're growth the seeing the type I talked the which and parts growth renewal blended about. growth those Phoenix really strong. fourth lease of emphasizes had of rates of

are us markets on in and significant in about it So mentioned already we all great in goes like are forward. we our important external growth. think agree we relative. for grow my Phoenix Orlando measures scale as trying remarks all it's we models to as opening And where through into It's those markets call focused and going accretively how would have as earlier we and the

Operator

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

Unidentified Analyst

is today. Chau] This [Sam actually for Doug on

had Just average. back a mean to historical this about compared going Jay's I year winter to question milder climate. we've the

So when portfolio? when to weather spending to CapEx maintain the about of how impact strategy rental does we're thinking maintenance make kind the

Charles Young

how we freezing smart cold that and conscious and being have Chicago. markets especially stuff And sure highly weather we us and occupied like we're with in a technology being conscious benefit. Denver vacant to that. that pipes been home Yes. operating we're always our there make any a of of they're another and I helps when of mean We've while for treat couple the homes is

attention pay little mild there's to a to The reality try has we it So been that is but seasonality comes it. that. more with

the why on talent we're local. and ground experience that's Our

eyes our and on are that have making gives that sure we're maintaining we're the We that a us by residents. assets comfort homes good occupied vacant

Unidentified Analyst

Got I kind home of impact a note how guys similar days it. re-resident tech about that. smart you the mean talked to of On lowering other

and to that last how has Just year expect should forward? how compared on we changed curious going that

Charles Young

much moved And right XXXX. to try all in that the real years to take down last our focus we haven't as as a this days is We're want. the of in Well couple three we this is really mid-XXs goal or Yes. now. year two metric

is As better turn times you and try an technology real lot just to it at looking at. that metric cross-functional to a lease we're utilizing there's overall and mentioned the into that having faster focus looking goes

down So like we'd there's into to that re. that long-term no reason the get number

that now. there several have We markets right are

economic that in push. to occupancy to getting real we're down. continue benefit going And There's so

Operator

next Stride go with ahead. question from Please comes Pawlowski Advisors. The Green John

John Pawlowski

deceleration Charles the on outsized you comps leases. curious for saw still revenue your South few new weren't for all difficult a your and thoughts which Florida instance saw which pressure markets take that of on Florida outsized

side pricing a more are is or power? to single-family it terms shifts? And of starting issue So on of with the add what demand construction supply seeing you then in employment

Charles Young

field in options pruning supply asset And Yes good management but specifically lot the condo vacancy lot of question done where have consumer supply it's teams happening of of on more the South selectively really and that It's issue not single-family supply choose submarkets. a for new there's seeing Florida. our a a And necessarily from. submarkets of really the good out really of a job we're and certain given those impact. teams and it's to

be occupancy. good long shape we'll we've been we'll So term. because that on think focused But in of

little same at you out rates start pressure see versus supply some approach and may get XX.X pricing in power. XXXX. until of back can but we year If some there focus occupancy XXXX. been bit look to that there to we'll - the take on XX.X in went we've you over able actually maintain we we'll up occupancy look in With And a to

John Pawlowski

base guess is your maybe lower effect condo? a tenant much and tenant pop between occupier? occupy that overlap I in condo and bit a how a credit base - there versus quality mom your wouldn't a of assume Is there's would I a ripple terms

Charles Young

typically there is not. Yes

it a consumer that. for really having South market. like unique a very the And Florida think lots options comes just I in is down to market of

move South options. people Our are just higher to are it Condos trying rents are a out little Florida. there. gives in If them

but it's showing So kind typical point it's of unique it's and to market not your up. that it's - in

John Pawlowski

impact to above cost to of then maintain the trying you for humor side. on me Okay. few disentangle the Ernie total could Charles years the robust the on versus hoping next seeing natural hypothetical. and I'm terms one or last side in the the of growth pretty homes a we're material and inflation And aging labor

your to next just labor the cadence expect should X% as and printed costs reasonable of naturally a material literally total few what's costs cost if over maintain homes growth years So we age?

Ernest Freedman

to John don't top want my head an give speak of you off and the Yes I answer.

it bit types hard little those to a of that through things. think because to me Let is disentangle

get We that few will the the pivoting also what - renovation initial we'll means take relative last years. be to external impact on fact upfront more which in to that that we're growth we've homes bringing seen the have

sitting So let's get you. on I unfortunately, it's can spot but an answer to not give us as here some I was give you thought and back

Operator

Next question St. Haendel comes from

ahead. Please go Mizuho. with Juste

Haendel St. Juste

Thank operator. was you, on. That spot

Ernest Freedman

time Haendel? first Is that the

Haendel St. Juste

question I A a I there's Probably. guess sense back going to By external get a to of second. our out looking platforms public growth grow seeing want more there. to private the least with account for of guess three competitive I large at peer. dynamic one you're

a So versus I importantly requirement? are your market guess opportunities I or at? or and you're you large attractive And more that ago are the the quality meet how want two looking to year deals how today competition for seeing say at more get

Dallas Tanner

great Yes, it's question. a

underserved. in year homes talk the quickly We point buying about is of to first tight. the in really same kind this direction quarter really the resale is Consumers any the data market. are generally the all your feel question resale encompasses like you just the at Like look demand So if think it you any first there. new of I And out look homebuilder right? at what's data if demand I'd really of the homes is which leasing supply supply just say

And so way. that we see same the would

specific our your we with competitors. specifically in do around space our question Now see to what

I the remind XXXXXX there's less with represent rental than no population. homes more probably got managed be ourselves just back that professionally to ourselves the overall and single-family would which today in detached a U.S. think than are step and we honest X% of taking

out our amongst that even people the So ownership for acquiring they're either public a rental. we of represent small cohort very whether actively or peers homes private for or are single-family

have same the capital with what you. the with in end other So coming into speak so to the play new consumers space we users sandbox

think much pay this three market And in And most is really a space. at been so attention of are differentiator a the that business tighter There to years. has I for that's band back to location earn hasn't we then new is of for I it our rental the today. go or as peers what been single-family four past supply. which look And generally we tight you ton where values a our rent indicative than our of

approaching think XX XX. I we're almost

of And whether if which overwhelming selling much that of kind point in generally of price or itself you those into some a our be to we're closer lends come means look higher at what the and it factors points demand play. buying much homes price which

not just and of Invitation it bunch active. a sitting of that side and market in. demand like homes really company Homes feels the So a on There's go can

that buy when and looking everything But side time We local the when our remarks. talked side. excellent bulk the about We when you're transaction in opening the the in really to at space side itself had opportunities. sell an the had first it efficient in quarter We all the you're QX. buy a on both lends sale on you're on book the in active

something opportunistic to we expect of the is I million would not we per I see would unless put offense $XXX and hopefully different. keep can that that kind running that being same expect us are quarter which number compromising up So location we

Haendel St. Juste

I And a Great. guess follow-up.

to and that on building development those perhaps now view low especially a comments especially ready out Given run wondering any grow? your supply been dynamic. the I'm rethink there's new on if platform you're

Dallas Tanner

not No really.

risk In something and a terms on sheet that's of focused today. builder on taking being balance not we're

of the homes that's are buyer I being we today. think in focused country what on single-family best the

we sake markets, buying to and boutique for location want It's a at dump. that's from look that. buying compromise earlier builders my just we'll from the growth. if don't it's builder or a on So But of point

you buy you willing If would what out I you're get yields in further chase yourself trouble. call paper can - if are what to

forward. If a what us located, that we talked going curve been paying better do of business how the disciplined which factors are they're for our demand and to sticking about diligent around formula some and to have up for are to you you winning those that's has believe assets know buying we going

Haendel St. Juste

could. just market. there. temporary down the like buying XXX out XX% of perhaps Occupancy seeing and below average to supplier some your home dip about type if I Dallas portfolio on if well more some like question move there One basis A looks year-over-year. over points the is Curious that's

Dallas going portfolio. on what's curious So your

we back the are And step broadly what Dallas national and then more How homes both In and you markets can are current where broadly Houston those of you today? redeploy in your high where deploy think IRR today? as list markets in speaking your XXXX some about under or have in capital. yields is

Dallas Tanner

or That's four questions like Charles? three in.

Charles Young

going turn I'm about talk to it to first the take I'll redeployment. part the Dallas then to over

you hear at the be portfolio the think to get I your question, same-store may portfolio total looking As versus occupancy. I

Focusing below before. a good at really up and the on again Dallas up of it Occupancy kind for our same-store had from year-over-year to the looking we was year. XX.X but actually is average year XX.X

that. responded has based on well progress performance So there. some made We in so we more made late strides nice and XXXX good changes

And on rate we year-over-year were Dallas actually up in well. as

as to grow continue ground Nashville? I'll more talk markets I to and redeployment to the it. to get We We're we do to So, We'll to on continue rate a on of think those add some the great now. team to Dallas you focus got right over about larger scale. it continue occupancy grow, time. going turn the even want over assets

Dallas Tanner

sure. Yes

and this Dallas last Dallas and for XXX think like half. sold So clear only you'll that been I than less really We markets to see pretty year Denver think XX. Haendel, in probably and homes we numbers the in our a in and grow about we've I want XXXX bought we

we XXX assets. So grew by

a the lot grow submarkets staffed into we So way. that market we've where what right itself types up sure of making that of we're specifically want thought put to

both of actually of in out both Denver We've kind last teams year. the those built Dallas and

would that about next XXXX. be good years. those we're over expect really little lower will the on-boarding portfolio bit where your heading So of units vacancy we a I into couple as are total And new

Operator

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

Ryan Gilbert

just you that that half bit held higher? year-over-year said that you turnover increase up the - purchase Charles a had in in that rate year. second might you tick in and turnover fourth have than if been rate move-outs to wondering might there's this on to And liked have a or contributed in saw the an the Or the basis? I'm question anything if of a might have little longer turnover quarter we on else home Had driven

Charles Young

question. Yes great, great

number bit turnover uptick low we the taking and So service uptick. that lot your in in flat but And a that to we like. customer and say around is of tickXed our any the a where do regards It's purchase. haven't last a the rate really move-out what a testament it hard look part is seen still is pretty little And throughout really providing. XX% year. teams that they're to holding number and up first, to been we're It's able they're an to was

- the bit. little up stayed rate had a they lease a so we longer why on that's on over. to we really turned already those That's give are than vacant homes new wanted And and side

really where rate is contribution. are it really mild or with I had But in think our contributed don't that So we're strong. a to XX% still XX maybe trailing we turnover overall, pleased

Ryan Gilbert

And ones. an can you two do flow in What you operating quick from XXXX? think then cash just perspective - earn

Charles Young

I sure understand flow? make from earn question operating what will an I’ll the we cash

Ryan Gilbert

not word. It around like $XXX is it’s think earn XXXX? operating your do XXXX? looks will you in flow million cash What be right in Sorry

Ernest Freedman

to CapEx? with looking So well core about flow you're AFFO think cash are - are or I FFO you looking at you operating regards how after just want defining at recurring

Ryan Gilbert

your from flow on cash statement? cash flow Just operations

Ernest Freedman

after back on the that call. Ryan, get to we’ll you

the I So on people want this to don't many answer incorrectly line. with it

Ryan Gilbert

have how just trended on NOI then yields And acquisitions? initial

Dallas Tanner

am rates I been us the of answering most we're mid-Xs the in for kind have Is right? for cap ingoing your part in terms what question that seeing. Well of

Ryan Gilbert

No Yes. real acquisition rates then? in change cap

Dallas Tanner

On today's environment no.

Operator

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

Buck Horne

quite enough, close Appreciate guys. but you well Not

I more rent allocation for election there equation and year How single-family just we're that forward? back about they're into of homes California control of just that topic and on to there's rent others? could given about thoughts going affect did you do that control and California circle by rumblings Now that measures balance possibilities owned an capital investments want the or in your rentals thoughts your your enhanced whether out corporations

Dallas Tanner

active Yes short it you the stay answer. on is

we involved. office going at a in surprise level on. And state number involved You part of that different top make of you're anything of the governor's that's state discussion organizations are with the We the with to sure the that on the you're participate specifically that with housing work of and authorities of keep California. California a that

- we they active out that call our getting we're have XX think and X.X. in of be actually baked in we in focused We XX what XXXX on have Prop making that on no sure guidance Buck messaging the Prop being will terms right

House Now and little disappointing I place alignment in Senate think done I a to create the because year. the trying went Governor a it's think that nice around the job some the and in last cap rent measure

election years type to understanding two be going also so or an in are that topic. every is very of our We this realistic

X I not We a the X. stay state the and of think to did they're believe got XX ago We it we've so that to which that in frankly two years that by defeated Costa-Hawkins will And things development what good limit it. to the will X.X that was measure it's active believe have of resoundingly for Prop similar quite rooftop state on needs. calling new or California effect formation

approach that that board with pass. will seen understanding generally one that widely the Governor's and is is that on My as that

conversations are in markets control that through those or around discussions sure where NHRC rent any on of efforts we to coming through focused it. in like the some we're being that some the early up, that of terms In anything on other of going make involved well participate other with stages we're active the very as

it any feel in as be the through levels. anything moving floors Fortunately at there's level local substance whether of other like doesn't any of state that of yet our real markets or it

great demand mentioned our governmental stuff you type of And up so owner get real some the markets. those being that It's an one the it's trickier. a with Ernie as fun market of little of to of is benefits before inherit of always in can high as but portfolio come California a active estate

to participate And you process. the in got

active. meshing we're stay to continue to believe a we'll that in support to causes us out. the We for So good we'll and continue get position

Buck Horne

going the how last one many tight. resell one And that getting thank that's my your are of Awesome, buying you. that's have in whether homes seem Those they're to invested of single-family is quick and percentages comments be to there increased so back private rental. seems reasons about smaller inventory amount the and the out mom-and-pop capital to investors up

into season? leasing going do how you that So about think

investor it season? supply the that creates that think is just turned trying - headwind favor? really do you it overall leasing Do How function just a about to those near-term get does the Or is activity of imbalance a going increased market still you housing in supply-demand leased? homes in and think your they're as that

Dallas Tanner

industry But year come the don't remember differentiation macros given XXX see housing supply Charles for of is in market the speak a homes single-family doesn't definitely have I anyone for macros We business particularly And home the homes in as well. imbalance is a or that we favor Your overall important change sale available last with on to market. you the new I'll into available changing. in it on of that and this whether whether the our comment don't spot let really lease. or think the

how of our institutional marketing product because point, doing like much visibility of be To let and lease. overall in are of we some could peers Charles available terms bigger for that. things your In maybe I'll a speak better to that. have their little bit But may what

Charles Young

- macro spot Dallas is Yes on.

up at like to blip. market on a fundamental there's our we short-term immediately. markets through competitors certain product. product saw the it that Orlando markets It's I on have in put starting came results you that think will some where a occupancy focus once our the QX. real you work where great all in see bought and at may in and the We if And rebounded in have as in you moderate look Orlando numbers

if get play back favor. is are our that then - markets a our market the it's short-term to all And we the kind and of most that of there of thing out. fundamentals in So, of

Operator

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

Dallas Tanner

thank team us conclude to We with everyone seeing March. the for looks your today. Homes Invitation and like you in interest We'd forward joining that many to our appreciate we'll of Operator in call.

Operator

concluded. has conference This now

may disconnect. You now

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