INVH - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to Invitation Homes First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode at this time. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Scott McLaughlin, Vice President of Investor Relations. Please go ahead sir.

Scott McLaughlin

welcome. and morning Good

from Officer; are Officer; Ernie Operating Young, today and and Tanner, Chief Chief Executive Freedman, Officer. Invitation me Dallas Homes President Charles Joining Chief Financial

to we This call business, document may at of issued XXXX future call, During is Certain first closed those these any results, the some our include was on that we We describe and and indicated to not SEC risks statements Form reference and does during statements. statements Investor www.invh.com. filings could resources time. available the XXXX and from actual information. the materially release website our in Homes XX-K with call. We so. on yesterday or financial quarter we the do cause disclaims such make this expressly uncertainties supplemental relating statements, annual of certain subject measures may earnings outcomes also in may capital during results uncertainties performance and market this press of time the non-GAAP non-historical Invitation which our and discuss statements after to financial make our any forward-looking update other section liquidity to other to report and forward-looking and from are Relations obligation differ risks

to supplemental earnings Relations and non-GAAP the website. reconciliations Investor over Dallas. the to our that release GAAP which on including in regarding measures, me can With find additional our these turn of information You most comparable are call section measures let the information, available

Dallas Tanner

the safe. in off have leasing We strong season. our us steady XXXX continued progress objectives, positioning to hope a Thanks to you are this start for joining great well and morning. everyone growth on peak fundamentals, with great and We're stay for

that to are high executing demand rate into market-driven rental growth. homes record turn for and capture We well seeing and record our we're occupancy

true accelerates. and opportunities local professionals our growth appreciation acquisitions investment source driving through also multichannel are continue platform to as tried price We accretive home successfully and as

to are markets is of the well driving macroeconomic opportunity Ernie, Before reach tailwinds while place like short homes stronger capitalize believe to than millennial resident we put The the in been. and just the it the the business single-family starting and begin, in generation supply age to our over to I'd To growing turning growth Charles they've on edge we and ever we've of of our remain XX leading it. strategy years. of average see elaborate demand, on

population drive extending further that rental the single-family large could toward increasingly this for demand our cohort economy ahead. continue in and for growth we out the them the may years homes, seek product anticipate versus home home in of As their to preference subscription participation ownership,

work-from-home benefits continued where other and options. affordability from expect play. space and use these the with work world compatibility rethink they also a We We compared relative to our of to the lifestyle benefits housing homes magnified our way in square are the people believe footage

organic homes single-family in the for institutionally the external grow to rental are as we thesis the dynamics about which markets, owned. Put is XX strong the industry positive growth These not seeing in X% very believe a only beginning. U.S. we're the disciplined investment in growth, enhance but markets. we've growth we're as household our rentals benefiting today, for growth within less migration are date in And than population. to the for of bullish addition, also the U.S. million only way. In experienced are continued fundamental we as from formation southward outlook single-family ever our strong backdrop a Of look simply, the

managed are this professionally to of believe homes. parallel best-in-class demand strategy high residents hearing and an to We opportunity results number we scale, our best our our the for and that is opportunities is people in of industry for there There prepared need In regard, grow. and a rental ahead. with the invest from single-family two an is seeing platform growth are capture avenues. and And comprised our we these execute growth to increased

through first is The acquisitions.

the second The is enhancing through resident experience.

walk me more these you Let both of bit through in detail. a

cover portfolio. growing I'll our First,

acquisitions report, homes in $X As I'm we we've a to are great of billion stated, we've off pleased year and start. projected least this to at

added we XXX including quarter, our first portfolio the our in joint to XXX venture. During homes

approach volume, and driven enable nimble us our by maintaining AcquisitionIQ experts returns. robust in-house investment around multichannel quality acquisitions and proven to discipline Our risk-adjusted acquisition while source local remain to proprietary technology location, and

to Second, enhance about experience. the our I'd to further resident like talk plans

to worry-free not look also for Our us shelter, a but lifestyle. leasing only residents

service condition. ProCare to offers in keep Our our residents' proactive homes maintenance excellent

quality select We Our homes. Smart makes filter to to our out and our convenient of efficiency homes. And make manage in pest a and markets delivery more the in technology their and pilot air next we'll month. recently Home landscaping control for residents it their easy energy features utilities it program services rolled maintain service launch

income million to monthly over lives. All annual approximately in these resident these to data million our tell we're that up to we're residents items the reach survey the that And rate provided of want of us are their halfway and these number services services in of $XX signing delivering order We for expectation at our ancillary XXXX. cost. by an run end to additional estimate residents both simplify $XX

remain including to focused As we the attention also we environmental added homes. our on performance of grow, ESG

their software-based energy reducing a year Home technology is our our into Smart For hundreds save example, dollars while of costs, integrated consuming less utility addition system demand. and residents we to in recently allows our designed help The piloted a usage energy energy. in to peak optimize program to residents

dozens with we month support launched members to like on this also neighborhoods. Spaces Hawes create outdoor associates recently for opportunities partners We our to and the Green to local the for program in team our Alliance for take community recent philanthropic and Arizona, a our hiking We I'd spaces joined program Mesa of of community ratings improve which and investment-grade our volunteer biking off where enjoy. to comment Trail also in minute and select earlier new our announcement. trails our residents and executive kicked in neighbors

for both work that pleased Ernie for agencies strengths, our the will genuine the excited and it the operational very to accomplishments all our and to what over platform to a commentary hard IPO we've us our goal grow strength to represents of we and are like internally recognize by our This our associates the sheet. it closing, going made and our excellence single-family since opportunities I'd about the and We in and proud safety company using of are operational externally of their means thank we're rating further more In have forward. team turn this long-stated quarter care Charles a sector. provide with on residents to scale the serving the leading to start strong getting of our achievement I'll that of our off talk this results. With balance our continue year. and

Charles Young

Thanks, Dallas.

our me care teams our another to by Let exceptional recognizing start quarter of for residents.

execute as homes quality and we quarter, straightforward: easy reflects this past when in several did process service. we approach is we it Our well and And friendly offer ways.

these. of you tell four me Let about

residents stay longer. with First continue to our us

turnover another quarter, decreased trailing basis XXX to XX-month first points same-store the During XX.X%.

lease ability our is point to second The faster.

quarter dropped quarter before days XX year. leases re-resident over along person. in the to new over days even seen during our are the drive new new This helped occupancy over half signed their down days has for Our with average XX prior a improvement home resident our prior to basis XXX the points Today from same-store lower to XX.X% of year. first turnover being

rental point growth. rate is The third our

same-store X.X% for first basis growth blended up to quarter points and to is accelerated satisfaction. quarter, while in New basis final in fourth year-over-year, year-over-year. first rate This XXX X.X% on rental lease rate growth quarter. resident points The X.X%, the point renewals the the XXX rate the grew up brought

these XX,XXX year receive satisfaction As a surveys rates. we resident to indicate each reminder, record-high roughly and continue

flexibility, using particularly Our to technology convenience lives. add and residents time-saving with we're to benefits are pleased their how

recently continue we us. easier efficient our For throughout considering an Smart suite continue Home also app appointments example, more resident for to improve we and we our while can for and to ways new install out requests portfolio make And experience. to our service rolled residents the

NOI growth our this in as core in first reduction X.X% of year-over-year. same-store X.X% leads same-store This X.X% at is growth expenses. revenue to of the well core All quarter of same-store a as comprised

our nearly the first were Lower offer in our those improved XX% to of mostly of percentage expenses. controllable average continue in collections quarter residents drops to cash work as side, expenses double-digit experiencing hardship. with all for flexible we historical solutions of revenue result the On

This we've is impacting in remain capture peak concludes along position again our leasing as in and the we provide current for to to day. in summary, we're reflects mentioned, That housing seeing dynamics for thanks Ernie. and and they the my residents a In to robust as it our rates. certainly our we I'll service to and Dallas in are renewals seen. to markets. operational is team and pass marketplace the continue and our excellence on each strong strong we single-family As about new now lease season think demand ever how the Many every demand remarks. delivering genuine across resident our care

Ernie Freedman

notes recognition improved on balance to to have ratings; other it additional as of unsecured debt-to-EBITDA; now strong prior on committed more when focus topics: the we following two, second, milestone our recent proactively guidance transitioning Homes. Last and us announcements target this for and ratings Today announced In the both disposition three, $X.XX reduce Poor's borrowings lowering third, meantime, Charles. to our look this to: financial night. over long-term and interest today, into per and activity; of ladder, access also to than last our times With one, should complete refinance remain sheet annualized managing debt I'll you, & has Moody's we well. marks we first, net investment-grade costs we investment our six This We maturities. our acquisition the continuing no And and facility flexible objective share. which rated our to announced anticipate us Thank that our results maturities Fitch offer affirms of has credit financings. approximately forms an investment-grade grade. to XXXX; of by Standard maturity the will believe we and week our our our December capital, future time Invitation increase leverage convertible to cost-effective and overall our cover week important X.X

during times March unrestricted declined from cash approximately billion quarter. of liquidity and at quarter X.X balance current capacity. times to $X.X from As XX, X.X debt-to-EBITDA was our overall at for revolver the the also status sheet our Net end

XXX million. Regarding our purchased XXX quarter these bought first for by $XXX homes of and were JV remain the were cap investment activity $XX for we acquisitions $XXX during homes for the million. rates XXX Acquisition million owned the in mid-Xs. wholly

We to $X.XX, $XX year-over-year for results. X.X% sold million. turnover. per to share owned and primarily controllable due per occupancy, Core our year-over-year FFO XXX $X.XX. lower X.X%, share expenses also financial wholly higher AFFO Last increased increased homes up to

of guidance As from revenue This benefit a X.XX% growth earn-in core a basis growth the core quarter of a basis X.XX%. growth April same-store to the reduction and anticipated activity a to same-store result achieved increase XX first to X.XX% range X.XX% a range during X.XX%. activity includes along range full stronger are with point year XX same-store from NOI in expense X.XX% to our we in increase XX and points including guidance point May, raising of in leasing a our basis of in date, in execution to by XXXX the

investment-grade per expense FFO of all XXXX share range In AFFO. to expect of from savings a share AFFO $X.XX year are addition, our items, in $X.XX consideration of we for our midpoint, FFO a a we per and raising and in for these ratings. core expectations result by full $X.XX $X.XX In interest range $X.XX as the at core to

start. summary, So off to is strong in a XXXX

scale growth about for in balance our single-family from only expertise our up excited lead believe and all prospects, helping growth to our providers. supported us peers better local us and particularly investment-grade our believe our our are line that not widen can in We housing differentiate Q&A. propel internal business but We external us which locations, external we returns. With will let's best-in-class among outsized rental in by deliver location-specific even now forward strategy open the sheet the channel-agnostic

Operator

Please from with We go ahead, Citi. will first question-and-answer session. Instructions] Joseph sir. now begin [Operator Today's question the comes Nick

Nick Joseph

Thanks.

we're seeing initial that elevated acquisitions? price is on Just on home nationally impact or that given underwriting the appreciation having any yields

Dallas Tanner

It's of we're trees we're certainly we're our environment mindful grow of we're We're mindful given in sure appreciation. and so Hi, a we're But want we're fact not seeing pretty a so we to Nick, really being around, talked disciplined about the sticking that able core price locations. that we're and definitely we're we been it's cap really on much where rate seeing buying, to being call sure to – something price of buying why typically obviously in but where is alongside disciplines make capital home sky Large We've mid-Xs. making all rising good smart growth. Dallas. pretty to rates are that sustain allocating and in about stabilized what that our the is the cap kind right this the that our Ernie that channel-agnostic hyper-focused part because, the and in acceleration – to low rates measured be of proxy.

Nick Joseph

then And congratulations the rating. on Thanks. investment-grade

As that towards move times you X.X will on more impact further your rate credit interest investment-grade line? target the increases six to

Ernie Freedman

Yes.

and is your of grid appreciate I mentioning most companies we answer thank congratulations too. – And grid. and the want We you terms yes, in Nick, it's I – a with for have to have consistent that's investment-grade that Ernie

someday you were we if we A terms would be to – as as give to have well the into of BBB+, ranges. the if go to we further So in increases able there'd savings get ever

further the into future. is savings us to going there So, have opportunity yeah, for

Nick Joseph

Thanks.

Operator

question comes Bank America. from with Spector next Please of The Jeff proceed.

Jeff Spector

the just start if comment collection of like, but when to investment-grade seems Good first that morning. on fees. late you still you collecting? dragging on And is ratings, congratulations same Great. question on, expect It please, it's stores, could on

Charles Young

Hi. This is Good Young. morning. Yeah. Charles

get QX to was for normal late of our terms back and our of transition fees, to communicating a with us, course period In more trying residents.

into our we so, move April, we're like And running more as today, historical structure.

that, in of still mind keep However, a number in charging fees. of late prohibited we're states

of we're -- be And we're while structure, we the normal a of all same to not may arrangement So and those back until are pulled working have type still are going with rules back, back. way with our hardship are then, time, residents to have go some who some at willing to the us. who on

you'll out, think the collection, us reach they fee that. our the if It do typical But rules see towards as so And should in year. throughout late I we'll move, meantime, the start to increase evolve.

Jeff Spector

still question concern Thanks, around, mentioned. Charles. is to seems investor fade provide some And of There of then, you the second Can re-openings. some or any retention you're your color rates some tailwinds with could that be the you seeing areas April? seen some in please? re-open? coastal us, those as with on, April, discuss of can we've How are share in Anything what

Charles Young

Yeah.

a all strong really think in we're -- are position. I indications

is growth, and really blend also push acceleration and settle that out. try seven. seasonal. renewal of to kind that the balance of you on that's Again, numbers little -- in We're lease XX%, new a into a with season, lease have at to if see look that healthy. As occupancy north renewals. XX% north favorable the renewals around We'll have, a from results as as really it's with we're you But going -- you strong rent further all we which be can But months rate to new few of going accelerating we QX And left a see and from in where few And you days have on retention in we appropriately. peak our we go position is of mid-Xs, numbers. April. QX, the growth

bit a on as positioned, my as So see you career of in things turn. may seen I've But pushdown we're renewal, retention little strongly as single-family. in

excited about, really going I'm So forward. opportunity the

Jeff Spector

you. Thank Great.

Charles Young

Thanks, Jeff.

Operator

question proceed. next Hill is The Morgan from with Please Stanley. Rich

Rich Hill

headwind was in Hey. Good some wanted bad still about makes morning I a guys. Bad for debt second. a talk to XQ, sense. which debt

two-part of you a rest from think for embedded the -- you good guy? So what's your and guy when is Ernie. bad to to about year in directed for the talk that can this I debt? can And switch for might talk bad you about we guide -- think But question, a

Ernie Freedman

I a debt on The Rich, be yes. Yeah. you path gets it's saw a think, it's is sequential though. continue we're The as similarly get about quarter, we The year. each quarter, basis, points. a still little -- the second really On answer quarter the bit Hopefully, run a year bad that. you between debt of last talked and we the to to that that anticipate points we asking appreciate, better But comp we in does we will headwind. the the easier as But forward. bad somewhere get moves into bit to get second going instance XXX mid-to-high-XXXs, little first basis for XXX the the quarter. half into in the basis what on

better full the each saw the XX so But XXXX a but still it's mid-point when numbers basis of get we of XXXX. clearly points points between it back historical that XX bit year XXXX, in does until that And a quarter. to at guidance year, full we whole and you into well to get our compare sometime headwind, XXXX we're for anticipating somewhere year of basis don't

Rich Hill

a to why to especially Okay. us supposed hey, is Helpful, just preface, to here. annoying what This say not walk I'm by sell-side going Dallas, through I'm everything you But buy giving caveat. about question. you're

just -- you not But and can take prudent. a different the in There's pretty be buying But to We entrants is recognize bond investment-grade of start need tailwinds why rating, much as Some expensive. appreciate right space. as your the of new see your lot and aggressive tremendous various I with fully programs. competitors are being HPA now? obviously I

Dallas Tanner

try would have an I'll We investors where. the We don't give disagree a answer, Rich. especially to for most cost we I I I smart want But look, things. mean, about, -- say all and pretty a just not that when annoying we're you cycles. of across of couple to would be part good capital.

cash So the the beyond sense, pricing, stabilized rates to deem kind someone of to too, what find cap to We're also compress retail in want we that on with would if way being investors. lean well that try But value. trading would make we're being and portfolios seeing certainly marketplace, of especially extremely in. said a to a stability things seeing appealing flow

So in we're really trying that to out just all weigh approach. our

Now, million also, that. fact that, rational supply of returns strong supply million And like limited we in pretty the for the environment, look let's we feeling just very be really tight cognizant was active. case could now. but where And good there's It generate $XXX the we're into scenario, a shareholders. is we went pretty right the $XXX year to quarter about first risk-adjusted through base quarter, a feel a

this done haven't year. We anything special yet

haven't opportunity that. any picked like some We or big deal up bulk

we a or in So the your – position. favorable the we on are agree question that – we of on did side sense

fundamentals business, point this want what in Charles is is really, with we've really So to if I to strong things we in to become XX want metrics. what available be your also aggressive to at same years said, to aggressive. and to this dilute time, us, be an we're exceptional certainly being like Rich. overly of portfolio seen the which try involved going But and running operating never echo don't just

through because the side, So our long continually over part the ancillary income our balance to enduring sheet will into, add which the to but the an of residents we business, be haul. really that that stream operational business for to execute continue want to on emphasize opting really are growth, continue

Rich Hill

a Dallas. Congrats good quarter. Thank Okay. you, on

Dallas Tanner

Thanks it. really appreciate

Operator

comes question McGill The proceed. Dennis with next Zelman. from Please

Dennis McGill

guys. morning, time. Good Thanks comment. Hi. a made the for Charles, you

are see, elaborate I what think the the wanted if And and of impacting, could you strength that, I you on said new to you how you about market by is renewals. just meant that? thinking

Charles Young

yeah. Oh,

we are peak forward look QX really in season – we've in to we up as coming, performing are numbers summer we months strong. typically what things put see when the been So

portfolio And in our so puts the really position. of nice us position a

indication in think you the occupancy new summer, renewals, eight. the six's. And when These that on lot are on buoyed the we're with as into renewal that June the our for of of is that phenomenal are we're north asking asking how ask In we're our our new So see in lease which rate ask the of high teams by XX% previous we're healthy May all went around around on we're rates a about starting out question strength seven. July, portfolio. is today mentioned, an of April, to we out doing forward. the a And executing and I lease. job an

strength about to So think that a out about strong gives go portfolio us we how the market capturing the positioning lot want of there. and to that's

Dennis McGill

to you be meant So just robust little bit more a how that, would seasonally occupancy willing is? you're normally you of because aggressive than

Charles Young

right. That's

Dennis McGill

forced And there, that homes then cap might with acquisition same you Got unchanged? on are or willing utilize or rate, to redevelopment expertise competitiveness achieve still on Okay. the your the CapEx more require upfront that either level that of take it. to and Dallas on to is the side more out

Dallas Tanner

a if but great location, changed project, Dennis. that unchanged, certainly in afraid on of it's hasn't at not no a say, all. it's We're I'd No. view our

Dennis McGill

guys. Great. Thank you, Okay.

Dallas Tanner

Dennis. Thanks,

Operator

Haendel The next question St. comes from

Juste Please with proceed. Mizuho.

Haendel St. Juste

Thank you, operator.

good So, morning.

Dallas Tanner

Good morning.

Haendel St. Juste

a understanding there's that wanted bit question guess of the meaningful competition be wondering portfolios you're lots something morning ask I'm there acquisition having number? curious, thought. market, or to bit being confidence quarter LOI at the hit that giving good anything on and us go way. I or selective, slightly that confidence anything more start of but I'm could – you that right? helpful your or in there's the to that's back We're the about confidence off I the target And I guess, that what's contract would you're tight the Clearly, a getting for $X have comments something in – billion understanding underway in to different special you given year, supply hitting is a than under a first giving or slower really I

Dallas Tanner

for is Haendel, Yeah. pretty – to fun. $X.XX just close $XXX billion million

Haendel St. Juste

is million. $XXX Net

Dallas Tanner

okay. talk a to I Like things. ever That's don't we a would – this, net. said, about I base Well never didn't was pretty case quarter – of it But for we gross say we couple us.

to ebb back say, of rate even our and quarter. normalized Going QX and run been some has pre-pandemic around million would kind flow. of That right I has $XXX kind a

QX all our in in capital partners. much the less had QX space good of a of bigger of pretty in it quarter, a of to look competitive. things think we or with lot I We've right so inventory markets job than last set. and perspective. an coming year, mean, of available everything We from kind that we build had five other into because weeks I done opportunity about into few come builder pipeline little just our our we're a a call now feel nice supply of a a core up There's is building starting it.

us we'll So another kind to see and as opportunities grow next other for call it to forward. consolidation we likely years. over going couple as some to emphasize of And of we're continue mini-bulk continue the channel that

we're on a really $X still remember, the with It that that closings. billion we're being we pace now. pipelines, grow but all Now, tune to can on we a feel report And of right aside, doesn't year. necessarily talk we comfortable like about

Haendel St. Juste

some then the And income, appreciate the to enough. I of commentary ancillary there. on Fair Okay.

run I think year-end halfway income you ancillary XXXX. your mentioned rate you're of to by

care So pet I – mentioned pest you control. think

remaining year? accomplished front? curious that you've checklist what And – what next? Thanks. the that of this kind more income ancillary of what's is half So on So back what's on, and next year on

Dallas Tanner

Sure.

revamped mid that it through point as end land That and fact revenue a on around we're years the that goal pilot program back Smart talked X.X we've $XX range end goes about be the view that of later of And this stakes. better around quarter. would obviously signings being years. like revamped million with kind we a call by the was next that But then our table what start zero. remember little and wanting stuff would of a likely is roll over at somewhere lease kind of months. the part basically between kind focus those around I a $XX we've fantastic things creating So continue in beyond our we XX resident, point, for so rolling new between the all ancillary screening. of our our -- our the done XXXX over most mobile about That rolling is talked that in being partnership enhancement the got We've a done experience that And our pest of as three our of Day feel of Terminix. standard is have the Investor our people ancillary months. some of also in feature None forecast platform enhancements weighed coming enhanced that core high delivery back million market-specific continually XX we'll around out out control And to a more now far out We'll an XXXX. structures now pet and the to and XXXX renewal of adjust that ancillary profile, working is ago. with We really and that through and centered now to XX is bit will number over also that to our -- of and across We've offering. service. initiatives we product. are services. comes excuse the out months. next landscaping of of job lease that me, country rolled Home offerings that includes a as well. we'll our which for technology done is we'll national the that basically I are to Charles next years. that things team XX That our continue utilizing and are have added filters that both to really into filter and that We've standard offerings product offer

opportunity all forward. our So customer we grow footprint business our additional of and going view with the as that to

Haendel St. Juste

helpful. And if last Thank one That's you. one I may.

of possible some well turnover have again. another like but Just anyway. ask one and it to Occupancy these we answer, maybe all-time hitting best

You're sitting here XX.X%. at

to the You've I got you said, days believe in days re-resident, quarter. XX

how better some from perspective that. Just just as you have sure hitting you Is about Can -- better? that of this But any not get? ever I'm and curious you're perspective. thought much anything thinking turnover. these get on it on occupancy that you're can how good be with to there's share levels as you'd curious So if

Charles Young

I'm glad at it's Look, our And unbelievable all a Yes. jump to an doing very are teams in. landscape. been dynamic levels. job

quickly, well about have well. adjust on people our rehabbing move If down. tailwinds. in, our and down The we been are year all moving can to as we as in COVID re-resident days numbers to we are turning driving think a were costs, we and homes you what what marketing just to homes But market continue already to ability nice tools able utilizing and those We prior other pre-lease is ago by control. control teams favor to homes, quickly, execute our to in of do were where controlling in the terms

of really capture out how it and heady at we we're it make sure still are in teams there, I said that and they're long summer them. doing where demand can with And going ready strong we're But what's as ends into for. there. numbers. they to where goes look see the So shape. Proud But everything the before, we'll -- the

Haendel St. Juste

Great. Great. Thanks Charles. Thanks everyone.

Operator

question next proceed. Evercore. Rich Please Hightower with comes Our from

Rich Hightower

quarter think quarter later else's the Hey, rating, about investment-grade year you that in several congrats good talked possibility last nice on just earliest. distinct a I everyone guys. morning I'll this being at echo Ernie, the respects. a on

walk a maybe just mind. so originally And us don't what expected versus factors of a such specific for time changed if through that timing that second, in was period on you maybe the short

Ernie Freedman

Happy Yes. Rich. to

more agencies. we not on able to to. to December upsize rating as than really certain new unsecured our that, after upsized started it It's control close weren't know. we build which facility, able much amount And completely to as in obviously. we never credit the It's able We You had. we be earlier financing in the up we'd our confidence of were were to

to And $X versus how would real much Rich So another unsecured were off focused you are other are pandemic, financings. agencies going then during able secured. going-forward perspective. the how financings to to couple from held how of pay question they well the the And Certainly unsecured the very the a add operating we view secured have of weren't sure things a on billion current was but sector agencies the take we up to environment.

first felt always for might I the on. in the in side agencies to perspective. They as of the try. err informally saw to and under-promising the they've like well here probably some some and a particular there. process forward company in certainly that window path credit strength engaging so very later from we time as on be the the over-delivering. a fortunately But we're the there good good a December through. were it of advisers you in more And little decided the the the time We right XXXX. to And quarter fortunate certainly recognize we agencies second taken we of reports go was get the in company the our of It's industry, strength try with us in the And help had to from

never know exactly going that's So to go. you how

And we able being earlier I that's optimism. how time And why to so about that's thought. to some we make the we a have here cautious, want otherwise at but were same than would maybe year we're sure get had

Rich Hightower

helpful Okay, That's color. great.

I your how the that, announce is -- flip of to net For call of coin, wondering just this portion is probably does the side are to year, this business house office the that how have don't benefit the your criteria, factor and plan change into a return terms tenant point But the mentioned what's companies the maybe commuting from past, base. work-from-home more starting distance And CBDs, or more at question, And know the my the increasingly more second I'm and for or days geography view level that on a and a week. comfort work-from-home throughout if mind? your your idea including be in And times the several people you to respectively with you've mix, into permanently? might sort number does into urban factor office some that just later portfolio? announcing certain clearly of and as of investment some underwriting of workforce to going a that more in

Dallas Tanner

questions. Yes. Good

to touch of I just So Rich. a things on, want couple

go First were and pre-pandemic. foremost, to into pandemic. XX%-plus the We going back let's

demand macro call the preferential So, are that That around some business that these lifestyle, wanting pre-pandemic. of tailwinds boomers was the making center choices. it are flexible that millennials all, profile in

the the we've the last or back home, around that was survey of maybe of square leases one on bigger that point seen in office drivers the certainly year was bit desire data to going work-from-home component because component. balance the to and influenced a our staying work-from-home move-in over that more people's and our new of by have people Your being the footage

as a we our So the beyond for pre-pandemic. XX%-plus positive view business that purely it, call just net

are whether can I a with synergies and both that number current going resident the where offerings finish we we as offer in office drive standards. companies, will that it’d of rehab Charles important company, flexibility. for Home those us be can do of or the position his a Depot experience. a trends that terms these look do can think how furniture things Certain from be fit team cetera, of things, et where additional marketplace in in how narrative, that partners that into and our some we home, terms stay of it and for other we we we at

here. do was I demand we our The think there for forward. key that's going was pre-pandemic. if pre-pandemic, the how relevant theme, thing business capitalize but there The stays it that on occupancy to continue

Rich Hightower

years that of the of Dallas. strategy acquiring further we you go And that having urban down if ago? out? about of going business' CBD? Thanks, drill the Can maybe I thought increasing view one open Maybe farther have two you investment part does the further the homes and are conversation work-from-home here. you just house up comfortable is wouldn't on aspect question this if Okay. mean, to were mean outside increasingly opportunities forward, I

Dallas Tanner

so not view. or from point the day, current our Guys of our mean remember, the we're I at end vantage much total investors. return

value way know if drive pendulum out. play this swing neighborhoods then tends swings the So all further out we to started much The were component starts the to in But might it look to work-from-home companies and one how at it. those that other.

we've product, around ultimate And experience. you prided think always whether go I not. and it districts that that corridors higher factors work-from-home demand on more on being just well centers focused transportation ourselves infill to buying driving that are beyond school or

all of capital aren't from our Rich, allocating as our those current capital view to deliberate we demand approach So, in where very in We view be factors continuing as being why. invest changing. would and --

And not a on out. so go further to telling far, seeing risk-adjusted we're that's basis, anything us

Rich Hightower

you. it. Thank Got

Dallas Tanner

Thanks.

Operator

Please Our is question next from Street. Green with proceed. Pawlowski John

John Pawlowski

can of cost to occupancy the up maintain And pick Charles provide or once for path some you're does to the bit? to you Ernie, COVID the evictions? hoping of How of as details starts time. trend able move what's a trajectory on Hey, a business through two normalize. thanks impacts little drivers reasonable turnover once for kind

Charles Young

Yes.

in We mitigate think more prior pandemic. see our execution on and at and to we the our as we of don't seasonality as here half high think expect occupancy. XXs given peak be first year turnover But turnover. forever. that question, But, go numbers, So days may that re-resident to trending do the bit a turnover we little as were demand well into the season, always XX%. second we'll high We're I around that. should there's

XX%. the think really as mid-XX% capture time, is -- demand there. we're rent the somewhere in -- going what So growth. was locations, in able for that talking the high same But homes we're demand in and With out the I that's that we're settle XX% capture high Dallas our to to at we'll comes seeing with about

days, phenomenal. a the in of our XX always the we'll optimize And they're XX the doing So, do going to up at that's our execution right team But day, solid position market. for general re-resident investment tried things change the ops to and of We're that in down of days. think really team with QX I end that management to that keeping end have the kind we're That's and now. same. captures going. as And environment days

Ernie Freedman

our are had, certainly on to to overall we yes, John, And cost that positive maintain. seeing the some the impacts low you in with cost turnover question maintain

is maintain point. changed of one-third cost actually two-thirds that a about because numbers, the our little maintenance of As and It's to at and cost a reminder, in cost -- our repairs bit is the of this about that roughly is homes little a turnover. turnover it's lower bit

turnover basis, on the that of which as assume between in we long-term $X,XXX work with is challenges Our per to in get of maybe saw what $X,XXX the the the year door. XXXX course, a portfolio. higher around kind of inflation, through we of grows range, normalize guidance back that does some the But we're probably we to a to kind John. of in able think we But the half number, have second we

gets of environment. you certainly the pressures a to indexing we're next two possibly, some part short-term three and you're operating will we for year, turnover if XXXX, get a have half to back with into seeing But any if or this normalized in that So but inflation we year grow not pressures, see to years environment. once back early additional get second as more to you normal or of back more elevated

John Pawlowski

across bad sequential kind you seeing one debt then deterioration for Understood, the stable markets? payment across have Charles, And last Understood. just portfolio. is me. any in Okay. of trends fairly

Charles Young

markets? about no, debt or you're up specifically a bit. bad But, asking little the broke You within collections,

John Pawlowski

any as out -- deteriorating sequential Any market sequentially? jumping Yes.

Charles Young

those can’t we've really with haven't past little that. Chicago. of third-party some markets advocating that assistance bit challenging assistance. job to residents We really helping in our rental these in markets. our are some of of No. talked a seen more get try that to California, But programs teams the say There's any those And on of a I about great of behalf rental of are doing

by show In some performance market region. And by no, was not have we're in well. days up, good base as looked that question, any a strong fairly sequential at, as we're region to of general, demand a but left, so we couple of coming to collection. April, And on seeing or real -- in have we is starting your March but

John Pawlowski

right. Thanks All time. for Great. the

Charles Young

John. Thanks,

Operator

with Rahmani Jade KBW. Please from comes proceed. question next The

Sarah Obaidi

home appreciation any Hi. This for strategies first on surge market? price you with Sarah question and in are is the rent-to-own with is, customers My Jade. pursuing

Dallas Tanner

no. a two-year lease. is, fee-simple officially, to from with been doing anywhere we've one What Not buying

Sarah Obaidi

second is, my promising are what Thank you. most within revenues? ancillary offerings And the question

Dallas Tanner

with ancillary landscape earlier, discounts that our of and able product offload a the there's experience allows a are excited to including worry-free to for ingress/egress customer. I that being think we few we add on And thermostat. way think better well, smart these that We deliver certainly as in as of from we going a issues, do home or people well like are biggest really lifestyle. Well, mobilely, things value that managing things about their both pilots talked manage technology some to leasing all some offerings, home to about their vendors

So sticky them. continue find that we that more can are things to customers and maybe I as with importantly think, things our take

is a example, where for avenue somebody with comes has service. a couple portfolio, partnership, a stays control the years, into us that, pest subscription-based of maybe Our great for for

an that As in we're for before, they economy to part walk subscription them, income Homes. their with I then generator ancillary with beyond continues Invitation mentioned life business. all the That it their be our And of. of stay take maybe

of only for offerings, about, can excited that forward. income be how perpetual piloting, not really we're enhance those they figuring going some out the so but to business So

Sarah Obaidi

taking for my Thanks it. question. Got

Dallas Tanner

Thank you.

Ernie Freedman

you. Thank

Operator

The RBC. with Please proceed. next comes question Heffern Brad from

Brad Heffern

Hey. Good morning, everyone.

work put the a get to is in Another $XXX you sort the than had sort been million quarter, you've Has of, changed has in question amount that past? of significantly lower angle. time? to rate this acquisition it acquired over on number does the, hit similar acquisition the Like that of that on the

Dallas Tanner

at supply, it's in last been to It's marketplaces. same not years. been of for for the much sophisticated much we With couple and albeit more call call generally the smarter. there's about supply, gets a, And macro we same point, our it, look couple at, from it because years. or more and number data our this look the the what a -- our at so has every everything a less perspective year do last as on But technology, less AcquisitionIQ the certainly robust, become of year

submarket distance, marketplace million-plus code and a and homes underwritten both happen, to as smarter So last from call time and we've view on as well it, to over, portfolio. ZIP evolve continues a our with a within things years. things in the and anything XX And smarter our we've at the seen get happen seen

probably and underwriting but team. even enhances for make that decisions faster, continually So data the quicker to experience better has ability our makes gotten

Brad Heffern

Yes.

then, rates about asking coming the of the just earlier I sounds that And in renewal months, commentary it. really Got robust. mean, it the guide, you're about Okay. thinking some the

much how like, it's much renewal the actually lease July how curious new April of much X-plus, of of that or I'm in and So the guidance growth of is XX-plus upside? of how the

Ernest Freedman

if in maybe our see with have would numbers in bit renewal we're number. a those But take close say, the numbers all out. certainly even if able an laid we're in plays of out, better. on have said, that we'll a had to we a give bit the high April, the able little there range just I Charles and to we'll to achieve of opportunity Brad, that always asks, Yes. our so to get continue to little that that how those don't end way there's or the guidance toward numbers Charles But we

Brad Heffern

Okay. Thank you.

Operator

Please question Berenberg. with Keegan next from The comes Carl proceed.

Keegan Carl

questions, questions. you bottom perform time? of you what's current I below my kind of, maybe point then Hi, a level taking guess out portfolio over kind into that your you're the guys. think of then take X% from Thanks of housing guys for better advantage different from, and markets that's and the performing recycling clearing view of average to of going earlier stopping taking X% kind to to

Dallas Tanner

have question. good And pace. of given consistently X% pretty say our record I good we're a to This bottom culling similar track would any to a portfolio the year. That's a we X% of year off

how do I much think we have what had XXX dispositions? in we --

Charles Young

XX million.

Dallas Tanner

$XX it first Yes, about was quarter. in XXX about homes million the

in sales base. say to that X,XXX our at run if rate the So right cull is year math of we terms it or through this so would call X.X% my current portfolio on of X% portfolio

pricing right in is you're that really good. So

back on of can seeing weigh but step sale when well. with taking value in got your you're what prices a see types definitely as you've are, these growth that that we're some maybe moments to of the a out you Now proposition

we're this And quarter has around our XX% So to want and in XX% terms with it to where of consistent Vegas growth sell in expenses our operating mentioned makes between anything pretty much Coast and another the in markets in Phoenix, lease in in kind Seattle it hard Ernie seeing expectations momentum. the West XX% of portfolio new of before retention. as been rate first just

to be We're maximize look weighing an But those we've we about for we would market moment. thought forward. we're So saw maximize a cull part as is of portfolio done all going years if a pricing. excited really of years we bit that the how selling and last the area prepared that to we'll in to the three could to certainly or behaving we start well quite out this five returns and

Keegan Carl

Got think you on it. experienced transacting any in your Florida premium decisions then And influence insurance significant have this going of looking do you forward? when will And at state increases? Thanks. specifically guys the kind

Ernie Freedman

carefully individual great at And difficult between a property two about each space. increases years in the we insurance the know talking guys multifamily the insurance has of XX% have it's residential the very in XX% I the which years last last Keegan, for and of some down question. few small. been very market, very, value assets been look so an anywhere it's something It's multifamily assets our a not relatively out so insurable much for the community luck each large things and have year. are not of each large that's office they're a building good We've spread It's risk pretty because actually of had like different our because that. there

years two had our we that March. with so renewal. And insurance renewals insurance in our And happen ago

portfolio. actually we only renewal And insurance or this XXXX were across X% rates flat our had March our So year X%. up about the they

two over our But is It's really cognizant portfolio that to-date about X% we've the we profile significantly or So up space property time. would potentially fortunate I is us. up period of where years to something the been XX in understands market XX commercial anything multifamily X% see it's think, and we're watch combined -- of. well else played out something over only closely. risk we're that than we same for It's you the insurance different very of

Keegan Carl

Great. Thanks for time, your guys.

Ernie Freedman

Welcome.

Operator

Gilbert BTIG. proceed. Ryan from is with question next Our Please

Ryan Gilbert

Thanks, Hi. everyone.

thinking how And quarter. in between channels quarters? First question, homes? sourcing are or buy you some around Dallas else mix the at between channel, acquisition all could iBuyers, acquisition prior you the you add opportunity -- detail I homebuilders between MLS was the volume from hoping just your channels anywhere the I about can Did change guess

Dallas Tanner

question it and varies Good quarter-to-quarter. Yes. always

what quarter. we I did report the can on So first certainly in

XX% of bulk call partners As channels. had would I very QX. call iBuyer coming to traditional through what X% we our builder kind of we channels in probably it as little say through we well. XX% our X% before one-off another But mentioned had came and homes coming We -- to XX% through

the some to came in it whereas we quarter, call QX XX%, have of what tend based what on course given can mini-bulk we that was roughly any that through So vary of, kind comparison. for going just on XX%

-- just nothing it quarter the at was level. of I exciting to vanilla call outside properties like too a would pretty word I local So this buying kind of the consistently vanilla, hate but use one-off

Ryan Gilbert

deal or there the in Okay. Got look changes? channel? change flow, Any it. been has And pipeline by how looking does ahead any

Dallas Tanner

with earlier more about the some low expand really well about Without over this And coming talked that to talked feel would to as been have opportunities giving where those are forward aggregators much capital we fruition. the on about I right a from We've smaller about those the is work -- amount We're come partnerships the pipeline guidance, and call just the opportunities the look really of the channels. to consolidation is I partners doing smaller year builder our environment now. on out interest with there. we again really both an take too that good in for the that time team space. now of excited of rates But that's say,

next call it think I to the for some really be years good years we consolidation will well-positioned five opportunities. two over

Ryan Gilbert

Okay. Got it.

quarterly Second an bit it's increase but turnover it mean I question operators We've up noticing a if maybe I'm color there's markets doesn't competition rent. you build-to-rent. you in your heard of is occupancy be showing could lot helpful? on a pressure could provide if either would wondering seem any build-to-rent maybe where seeing on about like blended in it. you're you're from and any numbers,

Dallas Tanner

No. Yes.

really that whole parts around landowners are We being they’re we're speaking neighborhoods but or do pressure We location thinking by and that more in is, in in own any buying markets around We much the whole typically the if build-to-rent to apply communities. from we don't they're interested see believers fundamentals we'd we of out are developers, But the sections to build-to-rent neighborhood? we other home to generally long-term be portfolio. operators certainly question. neighborhoods infill relative get that as approached an those good our much country, individual generally like or always same in So, -- nature. further do different parts which

Ryan Gilbert

so Thanks Okay, great. much.

Dallas Tanner

Ryan. Thanks,

Operator

Rich from is Sachs. with Please question next Goldman proceed. Our Skidmore

Rich Skidmore

quick I a to just guidance understood sure on just follow-up make Ernie correctly.

up by add same-store which NOI of you $X.XX, benefited raised and another by guidance from pennies. IG You probably would but the couple took $X.XX rating

-- be I interest you Is what make annualized expense it the just that? the Can offset. $X.XX on I'm is to the understand Just sure an clarify might just trying just number?

Ernie Freedman

$X.XXX It's from the right. called for year. out that little same-store that's the a benefit exactly an The rest maybe the the rest the exactly NOI of of you got annualized of in Yes you numbers and the $X.XX comes better right. about is benefit it increase bit

Rich Skidmore

Appreciate guys. Thanks it. it. Got

Operator

The question proceed. with Suisse. comes Credit from next Sam Please Choe

Sam Choe

Congrats guys. great Hi quarter. on a

that to the has been similar just the spreads. question rent I think is your it thought and turn is, you've had into of the local location And what how area just kind my portfolio. lagging you So the looking the portfolio strategy. And of factors your I know before. I'm and your always commuter Sunbelt-focused. at But been blended Midwest question around -- wondering become rest

Ernie Freedman

Yes.

about sometimes more XX I and half And transactions weigh today to And think of available, weakest-performing you've some have there's we've institutions – of Sam, sales portfolio end-user seen And I everyone certainly doing there's we've if in pursue in versus then home a market giving there. a over of sold record well. have to your across out But really time recognize we done lagging of real sales because high it But the first and makes our numbers. a markets institutions. we if good you certainly bulk selling look homes a our seen are XX,XXX basis market. to markets. do up the and some we're think darn we new that. a to other homes is past out and or we'll certainly opportunity. that to we consider may have the half against there's may portfolio back of be what capital that solid But up to markets it's it's sold that opportunity the sales good and over additional the if more cull the guys And appreciation on sell roughly one-off pretty we we a future. Certainly aware the your And we'll also Ernie. at our markets But the you're other our had be that. going markets we as markets. few a a have even weaker-performing since started have little growth we're better-performing price weaker-performing are other we're numbers seeing we've time certainly market sense rental want bit outsized than putting into talking in estate been unique still investors we've really half And

good today, and on it's observation and had well So that long folks about. the certainly will a call have it's as hard as we yourself something think -- we

Sam Choe

to million, that's Got again $XX ancillary it. And to mean I the then touch I on $XX mean revenues. million I want the helpful.

probably how studies wondering know you did population much will think I around Just the that pick of up? this. do a you lot resident of guys

that guidance? kind factoring you're of curious what to you're when So, expecting just as into

Ernie Freedman

take Let is and bit a me think Look be one different. at each in. little to that swing a going way let I Charles

be Smart is going Home So forward. as something device Dallas that's mentioned, mandatory going to the

entire our Other going point think So the XXX% leases popular country of certain landscaping just more more depending to accepted it's generally turnover program. they're like throughout for going in nature very will there's things is get certainly than to again, pest at. as the because equal on the -- be that people prevalent pets of add And portfolio. not some at that's parts markets some be universally pets be of renewing others. in close to if in dispersion to others compliance will we Pets are than where the and control all way are who

and of do conditions Some cognizant of lot things very markets we're of -- a our hardscapes. like drought

So not as landscape would prevalent going in be to is it those markets. markets be other some as Sam of in

the the do to So the way the of board of up somewhere across on range all basis the a maybe have are what look on to a good product-by-product the we in XXX% depending X/X to like. But answers sense to portfolio product. could going portfolio the that pretty

Sam Choe

Okay. That’s helpful color. much. Thank you so

Ernie Freedman

it. Got

Operator

in queue showing our time closing to I'm Tanner the further would this question-and-answer any for like the over Dallas remarks. to no turn At now questioners concludes and I back session. this call

Dallas Tanner

joining everybody appreciate us today. We you. Thank

wish We you you excellent business We have a We great soon. forward seeing fundamentals. of Thanks. with many the all to look best.

Operator

us you seeing the joining look to best. for and you we We you again Thank forward again soon. wish all today

Invitation Homes (INVH) 29 Apr 212021 Q1 Earnings call transcript