Invitation Homes (INVH) 29 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Scott McLaughlin	Vice President, Investor Relations
Dallas Tanner	President and Chief Executive Officer
Ernie Freedman	Chief Financial Officer
Charles Young	Chief Operating Officer
Rich Hill	Morgan Stanley
Jeff Spector	Bank of America
Sam Choe	Credit Suisse
Haendel St. Juste	Mizuho
Nick Joseph	Citi
Rich Hightower	Evercore
Brad Heffern	RBC
John Pawlowski	Green Street
Keegan Carl	Berenberg
Sarah Obaidi	KBW
Ryan Gilbert	BTIG
Dennis McGill	Zelman
Tyler Batory	Janney

Call transcript

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Operator

Greetings and welcome to the Invitation Homes Second Quarter 2021 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 Scott McLaughlin, Vice President of Investor Relations. Please go ahead.

Scott McLaughlin

Good morning and welcome.

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

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

the website. turn effort reconciliations to section available You measures extent are these unreasonable call Investor let can With Relations regarding find information, without most that, me earnings our in of comparable GAAP to release information the measures, Dallas. including over non-GAAP the available and on which our the additional to supplemental

Dallas Tanner

are million half night, strong as exceed these the for our continues best single-family have that United XXs joining will morning closing quarter and the the for fundamental are Demand The XXs posted shown there seen occupancy and we Good our we stay current people well-located XX greatly first the for year. out us experiencing anticipate high we second to high-quality, by a tailwinds retention and Today, thank supply, us we in today. among results, you with homes, our Last very nearly their of States. rates. and foreseeable future. in are

be to population to way for many expect We heading this our surge come. years

integrated segment and to prefer this with populations seek we renting demand a of nation’s In out as a the space see a operation, helps through and a Homes live the homes the With more experience believe in, lifestyle growth. homebuilder. As this strategy and this our to comprehensive the well families product PulteGroup, delivering strategic form efficient convenience of that our those single-family of platform announcement housing past we Invitation who of relationship resident week serve part solution are with and we multi-channel new positioned enhanced largest we first-rate rising significantly for meet regard, third our continued the our home.

preference relationship them from with rather that to this has strategic the with homebuilders the compete than strengthens approach. partner best directly, greatly Our been beginning and

into forward approximately own in buy who product and in approach lease families new great for profile locations of investors. expect residents risk-adjusted Pulte We across enhance our our a build region. Sunbelt these new X first the return to the will X,XXX across design our where welcoming already Over diverse the neighborhoods, the build communities homes have look acquiring that communities located the communities that to and next X,XXX years, of subset X love further homes We we great together. will both and homes identified

acquisition It’s our new an partnership to as homes the other complementing the next story. important to builder of We bring market, collaborate to we our are in pleased time with exciting Pulte chapter invest channels.

almost bought X,XXX outside June Now, we of for far million. homes with this year XX through so announcement $XXX our Pulte,

three-pillar billion achieve our during us We confident halfway target this year. our this We we that year. These and for support target remain Directing of in perfected differentiate location, our decade. $X eyes the we our our the in designed scale peers acquisition from markets. second are effort and us engine have to can over half over last strategy the of is and acquisition

select Location major easy by our location, our of Our first population West access speaks outperformance driver and schools as Sunbelt and and offer to pillar, corridors. job and high employment to good markets. is on focus a markets that growth centers evidenced Coast our with transportation

per to decisions. on touch quickly pillar high industry experts team with scale our and is difficult This markets. X,XXX easily or and to pillar in services, With leasing about market The is duplicate. extremely average, is being local leading our of investment eyes our scale. refers And third oversee resident who homes competitors second for our

market find philosophy the go delivering in our Together you, relationships over we Together, now our home. a make strongest years, genuine approaching local price. disciplined that mission our length best at amongst beyond of high desk-bound X are of by a occupancy of with on turnover of stay pillars support and think our indicators and order in XX%, to support resident eyes these satisfaction homes Our best proven algorithms record the house of We investing and average statement. only care. teams insight three growth our associates scores track the and XX%, with are

in both have challenging lived and mission good times. that out We

hardship. months, our some of last the During significant residents faced have XX

and have to assisting rental have who payment We due flexible provide by assistance late struggling securing balances. fees, those mind of waiving past providing helped been forgiving peace in structures,

how above teams gone residents times. prouder communities our I supported couldn’t our and of and these during be challenging beyond and have consistently have We

that government required to to go impacted and been And continue the is state all by national who we have that pandemic, follow at continue to levels. the we those is local We what laws work will and will directives, continue we with be. is and who beyond always because will regulations and

sustainability. up on thoughts wrap would with some like Finally, I to

continuously the month, this a We Climate to is emissions necessary be we action investment real of Fund, peers, encourages reduce announced who solutions steps estate. our discussion, Earlier Wall’s taking and operation are innovation and carbon the industry. from Tech responsible steward in associates seeking construction, which Fifth amongst our ownership the to in

to delivery and investing better that and company’s efficiency. home XX% help solutions, future their addition that and our In to on the air smart of homes. provide the impact continue HVAC we improve their up initiatives our footprint energy in carbon manage program technology, our home and filter to limit to residents save homes air These rollout bills environmental include help quality

identifying In efforts. advance further long-term like nearly to I sustainability to country. would across are our we on associates new focused forward, X,XXX opportunities the conclusion, Looking recognize

the be create the You we I provide for who will to thousands value detail. continue both to prouder could of am shareholders. ask for work dedication in for discuss tens your our We second home to And Charles driving results together doing With operating be and are prefer that, behind residents quarter need homes of I of to or mission. the a not to now families grateful we force that today. lease greater

Charles Young

of to trust like leasing exceptional I’d their us our for another to residents in place care by our make associates worry-free. to Dallas. home the a thanks Thanks, quarter echoing your providing who friendlier begin to and

fundamentals rental both income. residents side. strong in year-over-year quarter was NOI X.X% operationally Same-store and by property excellent our outstanding our resulted driven year-over-year by the revenue team, same-store core X.X% great focus in rate other on Our positive have grew second up occupancy cost quarter. and and With and on continued markets strong in execution momentum the improved revenue growth, another

collections our came of historical quarter. in the levels addition, at In second XX% in

the X.X% second year-over-year turnover. increased expenses Same-store core aided quarter. modestly up remained On the expense during by in continued side, in only expenses the quarter check low

over will X.X% X,XXX increased basis I quarter. trends second new drove the for basis same-store XX points quarter Next, XXX X% same higher year. Same-store in this This points second renewal At points XX.X%. month increased Year-over-year blended leasing or and and came at rent occupancy to lease to XX.X% basis to have every prior new year-over-year. month grown cover higher the points the growth in the and XXX basis time, renewals average year-over-year. leases rates

month markets above supporting main occupancy. was all averaged high XX% There two the June consecutive factors our that occupancy. fact, In XX our of are ninth

continued and fundamentals is demographics for are our Dallas earlier. factor that strong first demand and The high-quality favorable that within well-located Included mentioned homes.

In need moving addition the for number for to these, more remains reason space into homes. the our

The second our continued our to in re-resident. is factor days improvement

between you the the in only that earnings our days and of out second a significantly number resident We first XX further reduced to moves a During this resident days. days. when to even XX new had moves I decreased call, during quarter told quarter

a new signing new goal quicker we to we possible, can to make a as is ways finding continually home are as and move trying and Our simple in faster. improve lease lease and

are either are is an are a homes majority residents self-tour in their home resident rent-ready. tour homes guided that tour, reintroduce to pleased was the When we through high doing online, visits using quarter, during our ways at our are Prospective a a available a a conduct home the choosing before pause pre-leased doing new with preference of or technology. occupancy, plans to second in-person home time after do home mobile the that floor to With the device. temporary available second of vacant tours with to able on technology. in happy review we a large of virtual during and smart most such quarter their longer our so is One were for residents pandemic. But to ProCare our we work even the staying

second to work stockholders. an to pre-move-out ProCare believe very We to on from experience that, proactive our summary, pass I teams, move-out, In us well We orientations, approach believe R&M visits service including service residents the great thanks to to are reminder, we we provide of enhanced going. proactive to our help trips are our momentum for proactive will move-in identify outstanding is opportunities post this half keep delivering a both Ernie. our excited for positioned XXXX of residents. and and With and our residents and along outstanding it remain savings to unique and As focused turn our regular to move-in we visits. serving the results

Ernie Freedman

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

had conversions to in available we of with Regarding our of second Earlier our common facility of and combination notice cash quarter. at our markets capital billion month, this revolving of sheet stock. $X.X a intent our through end notes on unrestricted settle undrawn convertible capacity activity, the and balance gave the we X.X% liquidity over credit

of on January of million from the reduce XXXX. announcement, shares the XX of approximately conversion X.Xx expect or an expense debt on notes to us will We pro result interest XXXX. of converted the annualized forma common Post million by stock. basis. date approximately X.Xx, to our $XX approximately XX, debt million $XXX $XXX of We into EBITDA down have shares convert December million notes an maturity a approximately will anticipate with in on million before ratio to-date maturing into basis, full QX cash X an net This no leave prior improved basis, on as-reported and to

investment maturities. that to notes. since also of further also have debt proportion came remain progress balance of heels placement It the higher made from grade The achieving we pleased and our and of privately sheet improved grade. rating receiving announced laddering the are our we $XXX senior already April. a closed May debt ratings unsecured of unsecured the goal toward on strengthening committed jumpstarted in We We placed investment million of of back transitioning our private in the agencies with three

increased from to increase our a AFFO includes core XX% per same-store growth to year our exceeded forecast basis X.X%. and full XXX points our financial These range expectations. year-over-year X.X% guidance year, basis our to year-over-year X.X% NOI point to increased the we core results a same-store range while through in are Turning in from X.X%. growth of a second share to This to expense same-store XXXX for to raising $X.XX. latest in the guidance on XX.X% FFO revenue next core the share growth remainder XX X%, Based increase by X% $X.XX range a quarter, results per of maintaining

per increased share have full XXXX the full to year guidance year $X.XX we at share. $X.XX midpoint at core FFO the $X.XX $X.XX by increased midpoint Finally, per by AFFO to our for and XXXX

the location, with differentiated focusing As into formula strong we scale and best When to for and that, on markets now external Dallas we beginning and the of and prepared a Homes of a our eyes line mentioned resident in to robust the and coupled positioned commitment Q&A. at is future. our stockholders. is remarks, believe business for outstanding the our strategy an to unwavering residents Invitation open sheet, care, best results growth model deliver internal balance With up let’s believe our

Operator

question our ahead. of [Operator first Stanley. Instructions] Please Hill will Rich come And go Morgan from

Rich Hill

recognize us a you debt year? the half of guy bad Hey, income bad I for and And income walk what guide about back into Ernie, the good XQ the in wanted good sorry remarks, guys. quarter. little assuming Good and detailed Congrats was turned another you the just are through talk maybe bit. prepared morning. I and other on this I if neutral. second debt I missed in go a but could am to in other

a how numbers year the guide? to conservative those to second little be half trying the might understand bit of the relative Just in

Ernie Freedman

a other Sure. we charge again, the Yes, became other quarter, And Thanks, didn’t you across second had specifically where permissible year quarter, pretty point right because charging income now that second late in for fees much fees. bad are income of the late portfolio allowed. we with last where we tailwind out Rich. the it’s are to where a us a comp any in debt, and bit

of that We here expect the continue the to second into half year.

With to debt, a regards have bit little we the more at last comparing number. improvement the we we faster the the year bad other in have thought than second pleased we to And ended bad to comp in should some income was half that we we second a thought coming With debt going you saw same we year, was quarter. a to quarter that would. to good similar So, were second headwind. of see and of the for saw very what up

into may range. You saw off the Still bad we bad Rich, saw maybe points XX average about quarter. year, range, that more the X% in go significantly, debt you guidance recall of we as staying the better down but our continue XXXX, the that number little second into historical baked we a expect debt do basis trailing of that improve and We in will last above fourth into get the second to bit mid-XXX quarter. hope to half low the our

would continue So that should into be for tailwind to as XXXX as a tailwind for hope us, be we go a but we us, this well.

Rich Hill

equation, then And half in it. be looks to are the bit to higher second little Got the moving expense side like the a the year. it of going expenses of

Some drive correctly, there end I that also to do confidence bit it of the of Do and what expense would could little in then expenses has said what and year think you of seasonality. or But higher you half think implies – the I turnover. way, a with do the scenario has lower it second costs remember the a that maybe the insurance this to some the is midpoint? at where be assumed to if any the maybe of give little than bit end the range test of range the another could low low with

Ernie Freedman

end that’s be number had of year-over-year good a real as Rich. a for really numbers really there maybe come get Yes, on that to or estate the the the do the through. some seen than One, in second We have quarter refunds absolutely do the you we a expense the the range half reasons. we low better. question, following in even basis second tax a we certainly can year, will down good might higher do bit had where scenarios point little and better is think Yes, maybe

second The number more We of expect that component year, to shouldn’t our about could for get well increase And we of XX% – back think biggest are that you of to We coming probably run-rate real that’s basically saw to – X% real to the second be the expenses. maybe a taxes off estate where expected continue almost the They the which of continue year-over-year. during X% taxes in will is expenses. increase year-over-year. turnover half our the quarter. estate are do

yet that seen this haven’t We year.

So a do increase turnover. that we that have guidance expect year-over-year we built our in into

costs, to to the if have Insurance higher leading residential you pointed just X%, running will think We see I fruition. last as industry comes is year, out, that in are up space. they were about than which

the increases XX% space people are in seeing most the XX% think in residential to with world I insurance.

worked pretty for out us. that’s So, well

have little similar and we hope a things first a thought. we came second we saw where So, originally better the performance quarter, in that than we will that bit in

to on We we’ve thought and try like lay that. had potentially look far are things that in hard year. going us so thought could we out wanted to do expenses to gave to where something – certainly But we this we come just outperform

Rich Hill

similar Got Dallas, can curious really is I from over higher over the that? you this to something much this from I would it. you incrementally announced are you from you from have to more to template more hearing am asking what about question than just could scale? the you X,XXX years I’m just you’re just a demand done that on years X next lot partnerships seeing could That’s have. past suspect of if Pulte, But of X do the a homes replicate relative homebuilders. that these And helpful. these? With homebuilders one take And – sort something me, what you much a is larger with

Dallas Tanner

question, Rich. good Well,

time. generally work in stuff with with been We private and companies And in and a the both relationship we’ve ago, how over in markets. a on time few spirit The Pulte got public, this Ryan partnership variety talked years distance. this think has builders other we’ve develop I can move boutique and both about continued to a different I the of is figure for foremost, in know done that of needle and to to past. Marshall each out to couple working builders, we over something builders of the quarters. really speaking last try First we’ve really

– a aggressive it’s us they so at can where that ways we certainly little the do, an us bit have and bigger as can they between I who’s parcels. of we help and with a bit call, picky like that about. on a and us can in And more think delivery mentioned country we And partner help Pulte, start that be parts help some the they a in his we can them Ryan be, partner expert can maybe on right what pipelines future

So is also we’ve go it what beyond talked already replicable? it can Perhaps. about. Maybe

think to it. with So excited company doing we’re other strategic It doesn’t meant parties. in be But I about either preclude it’s business from nature.

collaborate X,XXX to and these it going first grow and well take We’re ways hopefully there. find to beyond

Rich Hill

you, Thank nice guys some here. and on up Great. growth continuing put congrats to

Dallas Tanner

it. Rich. Appreciate Thanks,

Operator

question comes next from of of America. Bank Please ahead. Jeff The go Spector

Jeff Spector

morning. Good

a And does Pulte or discuss margins on meaning Can bit how do? more exactly they Just the than this follow-up will building I specifically little rentals, guess, they for you? announcement. the materials normally for work anything – a Are different you how work? homes the it better

Dallas Tanner

largest tens build of mean homes thousands they what first every they all, they third good generally, nation’s I homebuilder. are do the of Well, are They right? year. really at of

a and have those is appreciate collaborate us plans the floor ability for to incrementally a growth would to we’re to beyond And incremental This finish to are importantly, marketplace standards in both of into strategic more where helpful what meant be Pulte and year. to and supply some may is and be, future on operator. think bringing given single-family additional companies. what do that for pipeline is perhaps us fit as rental opportunities understand think I I the

sales homes in can why described we’re there more sense. that will of be importantly, of effort like the come by part buckets. Pulte. buying think are And broader a some finishing So of a I details that There you make kind this all neighborhoods really where is partnerships it of variety will of

some be will today. portfolio an things that opportunities much neighbors So their from efficiency own our our that be perspective like in better will our different expansion, and have lend partnership to rental, maybe different And can will then the Pulte. I and spirit parts will we not meant cluster allow for All approach with the much earlier of that renters be bigger have do in parts to themselves to scale. could to all be allow communities efficiency can homes, that There on our residents service over be entire from which And past, us some with in margin will can to where distance. and really floor exists we ground or all the to time think meant that that of builders in create much point. except your try standards collaborative, standards us earlier there a also test

Jeff Spector

Every through And have are can I it customers quarter, demand Anything it’s length to staying increasing about those continues initiatives? of increase. what or interesting. data stay and on know learning you. that your just else whether you’re then talked average thank you I your us new you initiatives. several we share data Okay, so that important with find analytic

Charles Young

remarks, from track what what’s I from residents mean that the suburbs. demand our talked are about data driving I our Charles. for they is marketing serving And as as interesting homes. come this we’ve we we’ve really space, moving calls, in in. been cities previous is they are been opening the for in to more And said able my that, about both looking Yes, it’s and XX% to

Florida, also to even coming coming of into our Southeast, of some the into trend seeing states. We’re the of out western like Texas people a Carolinas, from Atlanta, out state of markets

an is in leading is So of us stay our that length that seeing average towards uptick all moving. data

getting be a talked around expect to little each years. we quarter longer. we And As about, X is each month,

homes. – sure other making our – foremost it portfolio good So so for originally, as Most creating driving make that of locations what’s great we of frankly, can is great data neighborhoods we’re built as continue that is safe that’s the well – we it’s in our that districts, residents. homes. watch was opportunity and school And are things the well-located the to demand,

Jeff Spector

my and but guess, of course, on is location, then critical, It And matters country. just like the question, a you’re it’s for last to that Are single-family Thanks. throughout demand looking point know I strong. more follow-up, is seems there markets enter? I rentals

Dallas Tanner

great if footprint, look question. look, Yes, I household at our current seeing average. at formation you we’re mean, almost X.Xx U.S. the

that your to fact So we about further on. demand been spot time. didn’t we markets, that be just over we’ve the few point a about We’ve when is vocal we And always we’ve in move country market love looked south. Lake would one Nashville, be The would other continues in to Salt pretty liked, maybe that the product. is were Austin. at like a City

remember, expansion. a allow market perspective. do matters. So taking scale again, investment maybe to It’s bit we have of an three hopefully, there step I will opportunities the back, think the pillars focus on from future, that more will us little in our But a be one

that invest us then and expect to return in shareholders. that so to our And overall additional profile will enhance drive scale, the continue in which markets for we’re

Jeff Spector

Great. you. Thank

Dallas Tanner

Thanks.

Operator

Next go Credit of Sam ahead. Suisse. question Choe comes from Please

Sam Choe

Hi, good guys. morning

spread select across receive relationship, those receiving planning when communities back markets? it to in on more are years, homes so you or the Pulte future Just new them is you going in

Dallas Tanner

combination two. a the of It’s

numbers. example And where spread may just to to or community, the a an smaller Pulte, a on homes and – opportunity the then of depends be in build XXX XXX XXX much buyer out be they just can there of community, using we those. XXX were within may or So clustered be of may we other communities set. in It I’m

Ernie Freedman

Sam, is that forward sit And happen a going will will we bring well with the them just whether interested in Pulte project, we’re will opportunity. down and they makes to And participate that us. will the Yes, negotiate on with for for to in how basis, move what’s would us project. sense go parties forward much into before and then the terms both we of project-by-project what pipeline

to see on you’re project-by-project And it’s things will schedule very going basis. a will buildup be community-by-community how going a set. the delivered to a on So in working that But with time, basis. It’s are see we’re various we much markets that. the be delivery over

Sam Choe

Got it.

there incorporated because So I curious being mean, community-based potential in for could I acquisitions, like be for those? fees those was amenity guess, just I

Ernie Freedman

an is that will responsible to homes then at that in So be portfolio the we have community. that what that And just set current HOAs way. regards be typically if like if happens of community, part in up then with have in our HI a a currently, a amenities they we’re with setup If would will that were entire across we to community, community buy entire be something point. established be for we’d

Sam Choe

it. Got

us for just how Fannie? me, Okay, two JVs, differs Rockpoint construction the looking remind you portfolio One for could your more great color. at and

Ernie Freedman

And Arizona. is in going JV and we to JV Rockpoint focus it’s it’s its but the similar invest that more in but Invitation JV, that. it’s we’ve here selling to portfolio each the XX year, been of be out XXX homes will geographies homes over homes think that’s that has happen. today a wind-down there that and say, So came I Nevada, have the from much – the between, The less or to more market, Homes the homes. phase, XX X XX And Invitation that JV focus point, around merger. markets. And very in, of take historical came JV Fannie that not a years really to few At for will it XXX a every to going XXX kind on this than in of California between markets Homes. That on is that

year bit next that’s So continue more X-year JV. a a of portfolio. X.X for geographically that the investment to likely have and a grow little over growing diverse that portfolio, to will we that will horizon as be a And

Sam Choe

Got it. guys. Appreciate the color. Thank you

Dallas Tanner

Yes.

Operator

next The question St. comes from Haendel

Juste ahead. Please go Mizuho. of

Haendel St. Juste

Thank you. there. morning out Good

Dallas Tanner

good morning, Hey, Haendel.

Haendel St. Juste

would color on could – hoping yields some on bit was bit guess their your a strategic bit more understand this targeted thoughts the partnership partnership more yours. new entering discuss with Pulte, about provide I’m And on funding. be scale. open because one I is IRRs, you than the or I guess another you their So, of a curious, – via more a I platform footprint comments to I markets expansive

Dallas Tanner

is be I first, your and to give yes. of new markets really last of I you like for together scale, and of one approach of important. will the that that in of look derived answer mean being benefits to the scale. some could this of which to being Yes. services us at Haendel, us, know I a our question mean, other – it think ProCare from position partnership suite portfolio benefits would strength meaningful we the are offer

the believe themselves it’s over can In return yields stabilized the of well both in for of Xs buying last in We of appreciation rate where home lend to go that the as very the parts of as think from we’ve that as will couple in been that years. find we we perspective similar of to – are price we you’re terms time. going terms how country outperformance, profile, what think a

communities. With over and haul product exactly are how probably in, right? we a in fit and had just we speak, to that want the standards those of us, I think and chip strategic side that benefit updated some as we think haven’t going CapEx that long be it, them builder so about one the will historically new OpEx for warranties that the be finish would net of

Haendel St. Juste

I a on California, that. enough. there. question Fair your Appreciate guess portfolio

it of I’ve at about portfolios XX% around you’re pricing. getting NOI, culling large some talk resi in I land a from pretty exposure I XX%, where heard good But had there, down number really still believe, of been. others a think

So perhaps you on Are could investments? long-term about view California to for I of your culling that exposure. perhaps guess and your a I’m curious be open Pulte of the actively source funding some

Dallas Tanner

market love of in And higher in right? lot can California, capital, we we’ve there return will really, first, of projects where point. We pricey, it’s Well, though, little create in our we that Southern it’s a of to bit back, really like going get Taking one part to the be solutions and a for housing Pulte When terms differentiator. affordable sell release, in those California. homes want times, that to in your a a better think and another find we that culling it, first to recycle invest for makes We additional of California. capital looks a a being in we California done continue sense. and use with mentioned our in markets. of risk-adjusted What is step

special in things of a XX a how And you think benefits. lot growth great like tax are so economy. Prop it’s And that. is there property terms really of Obviously, and about can the advantages got

from pricey, So things a all very as core us too get real for point, any place a focus is imagination of of that your occasion I But say estate right sold. it expensive we – sometimes we do now. by a have it’s positive. again, and to wouldn’t net is But perspective a the that’s on stretch

Haendel St. Juste

the getting on just that if And down Thanks. lastly, could, number ago. have a more Got it. year I I re-rent, kudos perhaps Got Charles, days thought would than to it.

in quarter. curious like how overall, the inefficiencies not So much get can curious that XX I’m and a sounds what lot sound remaining out guess do you of days I impressed, we’re It really sitting here guess at I using like the there? get? technology better opportunity and you’ve not Thanks. how mined well. but you are to I’m

Charles Young

re-resident. combination keeping XX and through majority, we’re And down. We it I helped of has there. great times, do brought reduced the our Hey, here up comments, Haendel, of No, days Technology good proud in the reducing aged question. on at around days pre-leasing. a able of turn execution on We inventory what really been we’ve about got to teams the quarter-over-quarter. the

are what we in think XX but our markets are range, impressive. We using occupancy, turnover, do we’re much towards markets XX-day teens, you consistently have I XX is really some how think I you have towards markets, go, normal. again, low the all it. to high we’re when a in and I that there. hope which of couple of driving across leads look, And lower of the that And going getting the is that we’re it’s pre-leasing on to a new push. going predict can’t done technology

not sustain great doing environment, really if teams. a a good a going our it’s to to we’re in best But we’re They by job. get So are the work do and better. constant

Haendel St. Juste

you. Fair enough. Thank

Charles Young

Thanks, Haendel.

Operator

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

Nick Joseph

Thanks.

outlay what’s total missed this, I capital if Sorry Pulte the relationship, but the for X,XXX homes? over those

Ernie Freedman

Yes. haven’t that. disclosed Nick, we

are We looking the at projects all across country.

to be range be is instance, that to up for the So price at a point. in mid-XXXs, the higher homes California of deal high we going dine $XXX,XXX at the could are

that’s and it sense as on. to be, So think markets what purchasing that different portfolio, way I to good in we’re get to the all about for our price be a home look ballpark we that our going it’s a don’t yet the today to know take think work going going average them is we exactly at we’re with across but

Nick Joseph

a for helpful. some you the the margin clustered Can versus And the portfolio? try mentioned that of That’s you normal Thanks. to homes. for potential just then frame expansion home within

Ernie Freedman

Yes.

we because I scale, should have think such – because we good yes. I be think it mean, incremental.

operating think interesting of very our And know We we there to don’t are clustered be amenity they expect can single-family people staff outside we going the packages, by efficiencies. having model. revenues there, get get to homes. we some do additional build-to-rent I potentially about where course, the multifamily of I things some site. could is think can what’s on hiring the in and people change world operators are putting world

we that – sure not be that’s inefficient. would be necessary, would think that to be We’re going and

bit do So It’s the be going a probably XXs can with from of we little I in be just points. we the points, what of think think to – XXs to it’s going maybe to going operating clustered where just it’s hundreds better overall not it’s basis perspective. enhance opportunities, to basis than an

Nick Joseph

Thanks.

Ernie Freedman

Thanks Nick.

Operator

question Rich next from Evercore. Please go comes ahead. The of Hightower

Rich Hightower

guys. a morning questions of taking couple good Thanks Hi, here. for

in you in looking you occupancy new in level of do there you’re targeting that How been. results occupancy an those I’m as that’s how of strong Just and variables? growth – the Is optimal quarter optimize at as strength well? for think lease sort about the

Charles Young

is It’s balance. the Charles. constant I a Yes. the word. mean It’s right optimization

smart now. And quarter little pleased and that this for lease teams I right our the year. tandem we’re field XX%. to right we’re us that XX.X%. time find balance to we of people, seeing try thought lower product at ground we occupancy, between a of might Seasonality growth, given working take that that on would be our balance lower the I’m little We at rate demand in have new typically a the really than ended growth. renewal rate that lots

new the can You rent are that and trying ended renewal X.X%. at new a proper to that see our lease given and lease we growth, at XX.X% quarter renewals find we balance

it occupancy we the kind I still how there. we’re and calculating go with might talked that side. control and I re-resident, can what of balances the is that will we’re see earlier, we to on the So we’re we’re expect on demand what down and out. But there, days as we seeing in slightly doing controlling the about demand

executing doing we’re a watching this job keep in teams that and really is will now. it. Again, a unique of right good environment the we are So

Rich Hightower

It’s a Yes. it. Got high-class definitely problem.

Charles Young

Sure.

Rich Hightower

there the renewals sort outlier the on you quick there? Seattle, Or on that low Can last are that’s regulatory just in situation in follow-up what’s obviously, still place? of confirm side. the quarter out then a And caps

Charles Young

caps number. regulatory and for you were can see there QX, So our that in

so that and they starting up. start into you’ll to As are we’re QX, fall, come loosen, into to going see the

start to back now side. renewal of our on and trying is place going and pull a then of be been back move where we’re and more that. we’re the been out Each also forth. with monitoring states thoughtful, normal it. at kind watching to have We’re we’re But There ads

year. So you’ll start to see that come up later in the

how out. see will plays it We

Rich Hightower

Charles. Thanks, Okay.

Charles Young

Thank you.

Operator

from RBC. go ahead. of comes question Brad next Heffern Please The

Brad Heffern

like just naturally morning seems represent good the how to change? suburban [Technical have would a strategy homes it all, it density Difficulty] I affect correct? guess, existing more for is portfolio. expectations does everyone. of those then that first growth? be does And Hey, and It sort than And of the

Dallas Tanner

transactions opportunities and of markets already where No, them there with over change. Atlanta. are nicely they that we in some think parts on lot if of capital, of you have look that do balance, at that stuff in lays already currently of put they the a And in think contract bunch the we strategy projects. invest the develop, I build infill one with own the is I where But a – we first

to the markets I more bit nature. could the not suburbanish. at more more home continue and playbook. all. therein that potential for up be a in rates. stick a parts the we to in that jobs lies be more going talked change little certainly just we country that are I like probably lend want parts no, buy in that is infill Keep quarters, that’s it little the mean to want our about. themselves to of of tends so own the But to growth continued schools. And so infill demand, invest our of bit the we outperformance. seeing capital day, are estate evidenced Charles real reality The does not importantly, more shifts of where strategy And lease at There you think are a those to it’s occupancy We that’s to going factors quite high transportation, along all that important But bit to try to little model. a to end are expensive

Brad Heffern

Yes.

not are clear. billion there And deal ‘XX is overlap? some the you because $X of obviously, Very or is to guidance, acquisition how these Okay. this billion but budget ‘XX then instead So incremental give become of acquisitions? are going $X.X

Ernie Freedman

would on of is But tell Brad, set right, we our depends incremental. is we it for because all can’t What are opportunity channels definitely location-specific it’s you give are guidance. what channel the you I agnostic. No,

replace having year source from going MLS, may really But iBuyers next that So, like with buying to that. other it’s predict incremental us. an regards is to what a look bit to off buying us. things this It’s – available are for like today the little not to things things the hard and

Brad Heffern

other any those July Got or stats Okay. growth on do in comments. you if missed Charles, I have And any blended lines? for then lease color prepared it. apologize could I in you give this But the

Charles Young

at Yes. accelerating. our quarter ended renewals is QX X.X, X.X. do would was What new came gave lease the every you – XX.X, We or blended ended month I phenomenal, of in June we overall,

XX.X trend. are new The all at X.X seeing we it’s on in side, we acceleration. not there, healthy. And the a further lease demand the What ended July, are there X.X. renewals similar yet, the blended we June is are seeing still way is So, and

half the how of but second the see will start to the good shapes we it’s quarter So, a of the rest up, year.

Brad Heffern

Okay. Thank you.

Operator

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

John Pawlowski

lot margins Charles, the means your and conversation what for at you with within greater But you markets portfolio, at existing any XX%, where if XX% the meaningfully are scale homes? and still the operating the time. markets higher know smaller as could stick for I it margins. a on look you had to Thanks wanted you maybe markets, operate there

Charles Young

we markets Denver, great where Yes. scale, good Seattle, and like in I more. mean the Dallas, we that markets some the are Dallas have the really we in buying team have Phoenix, even want

to And more can homes so is homes. add incremental not in our necessarily significantly the up add we until to start significant size these add and or headcount we set more have have get we operating way model

and a So, model, our It’s it’s repair maintenance using technology know the to do how turn with there. teams side, our it. really It’s being and healthy and technology. utilizing thoughtful

to X,XXX, are could at So, would X,XXX, In we X,XXX Phoenix, we add more. the we double. markets where love

in You our it, up market. shows can see Atlanta which

been there We – add one homes summer. in are occupancy are there, well. and terms growth they to a we where testament more how headcount efficient. able And showing to able But in more really have It’s rate performing of a it’s really our can it’s their this we get efficient that well and get up and with markets also of perform. of XX,XXX as good we that’s

Florida I we that at looking some there been are for healthy has of as there us look, and of looking expansion. are markets terms at, lots So is markets know we in well.

effective we all So, and we and and we in to and more thoughtful think technology how get efficient. we around as buying, continue helps, where we it more are load like especially be

John Pawlowski

in markets, we Okay. helpful? sensitivity And another then and those Denver you would of be more, Again, Seattle. referenced you smaller there double metros, those NOI any is margin, talking are a just few point less, if

Ernie Freedman

it’s good question. a John, Yes,

a think quantify – it’s is to challenging. bit I little for precisely us

certainly the in X could I a you for that we said, like ballpark, think improve we or see could by point margins get points sure. as I scale more

John Pawlowski

me, it’s Last policy around risk. question for Okay.

in had level, I the on recently does in the some oversight. in is seem has terms never sector or enacted worse But So, of there know policies any national front, at the down lives an to battle it easy government that’s local but and relations your be public difficult making getting buying media the hopper more maybe homes? headlines coming

Charles Young

No, not at the local level.

Dallas Tanner

No, John.

John Pawlowski

State national level?

Dallas Tanner

do Okay, more no. the But growth, properties else. No It in in Okay. you. just everything Pawlowski side, mean, of no, on manage you growth no. - and your terms Thank terms how l of around John I has nothing. Q there to no. is buying,

Dallas Tanner

Thanks.

Operator

comes question Keegan Please Carl ahead. Berenberg. from of go next The

Keegan Carl

questions. Hi Thanks the taking guys. for

that remind the JV I first, owned looking the just targeting? markets in you JV think are how the bucket wholly gets you you specific what Rockpoint us can determine at is when placed versus

Ernie Freedman

Yes.

will second right of go And Keegan, proportions partners So, negotiation start they we then was step markets the with came we in about the we assets there, into where JV were interested investing talk of in. what what then wear.

really sheet find we go we an where the under-scaled talking the that have closed in to and we four JV as says, these fourth fourth question, JV. sheet home on we have on the markets closings balance in were an it we we it And like direction. I And just last And just are kind kind we the Dallas, like it’s that. of to where Most Atlanta, go to Invitation markets thing. balance behind entity In team home the they how JV homes about behind We out on then do if agreed homes, the local and balance the three sheet. the sourced alphabetical goes same homes differentiate scenes just based then we you run a of XX-XX. out the three that runs of just to algorithm understand just – high we a as Atlanta, would put got that closed, like source that and homes scenes we is multiple to opposite order. of want no markets came Homes markets – concentration the on works. each the Denver four those versus the idea into we day, where them go. do agreement our the them the just really the But as the going that we in to it’s of – are just would and and happen balance maybe on we homes three alright, and sheet, So,

Keegan Carl

down the reenter of on was Okay. That’s scale given touched And that know came what earlier, you. very dynamics? but you to the market? helpful. I would selling Thank to know desire past, Nashville And this in regret I the current market really it but out do guys drive

Dallas Tanner

on point back think, And type. than sale like mean I was we the the product. some at We really we product right would no step revenue, talked taking love I at We our with Nashville X% be regrets, about didn’t so a time. to Nashville, there. at overall of less well because the in back did Well, the

a having makes that scale would get I to vision back think take and it a what sense. So, of enough it there, having ton just

Sometimes perspective, market of in MSA challenges do an specifically, Nashville small being it. And market parts scale without markets, to from pretty growth. but in there is of think kind when right very getting diligent about the a it’s you with you high right how the the

we really market an we enter. So, to back into up all But that around others to and Charlotte a instead through in a scale someday, opportunity capital few there that Nashville. have applying will there are able trade or get hopefully, of like markets some been

Ernie Freedman

for And product when price Dallas’ very point, we nice Keegan, a exited to long-term. we Nashville got

than very points price good faster at markets capital Nashville growing redeployed. are at that the We when that time that have we redeployed in

a worked from perspective. us out fine certainly it’s trade from So,

Keegan Carl

the for Thanks guys. great. Alright, time

Dallas Tanner

Thanks.

Operator

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

Sarah Obaidi

Hi. those to homes one targeting? does can you any This is locations speak for My the shift location any taking footprint, you how for Sarah and and are your question. my Pulte Obaidi any strategy on on first is with Thanks agreement represent Jade. will broader sit in comments

Dallas Tanner

what in Yes. up in Those call, of said we of in in approach are shift nicely on with we the product have to change answers lay will terms earlier which be the already buying of is A we no own. are we line where lot communities relative that buying.

that the is that product, of are having and everything think net benefit hard new fixtures all new. obviously, I your brand of

builder got to other existing floor have we can think a and some You about, and we fit I finish and out so of warranties net work the care also that that plans strategy. partner our standards benefits all

Sarah Obaidi

target business? Is there a management management homes? second investment much assets how for is priority a growing under of the number And my or question Thanks. of is aggregate

Dallas Tanner

And going to But we enhance Look, that to they talked limited one the got committed are sense. capital as been it opportunistic. always for that set. to has about a JV that of we make the opportunity opportunities pretty was returns Rockpoint terms life to shelf look shareholder in if it’s

You with our don’t interest. compete core

to different we in investing make vehicles we that different be a and structure, over time JV could we have sense I, over time what But that us Ernie do. available seasons don’t right, have like are a of and about talked distance this target So to would set there so. or of and that could

Sarah Obaidi

Thanks That’s so great. much.

Dallas Tanner

you. Thank

Operator

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

Ryan Gilbert

the time. Hi everyone. Thanks for

Charles. like season what’s And you July? extended of exhibiting where another versus is comments XXXX? guess, July. in First more XXXX question I is shaking we out have your appreciated seasonality in for view I occupancy broadly, typical saw your a sense on Do leasing on seeing

Charles Young

Yes. Good average at on We questions. ended QX XX.X%.

to a mentioned going months, I and is little occupancy these As turnover to going down. you higher summer typically before, come see are

it’s at but it July to down come healthy. looking be in are been month-to-month, really a will going I we still bit, so little think As XX%, I have still

We where months further will see go.

see really so expect think that off we we numbers, where are the do we seasonality, it’s summer. are seasonality slowdown. are that form putting a of you coming are slowdown numbers relative in QX. it about for some high to healthy If these will going And up typical I But

all the moving like. there holidays we are as and happen it But going I so what the to think at you will to be end And looks see not much. will that of day, have that people the going – is and

but you have So, bit off will nice basis slowdown, we coming relatively. really a little a a are of

Ryan Gilbert

Okay, got really underlying have is I in side. it. on then that And is a the out helping re-resident controllable second labor is turnover, Do days inflation expenses. controllable question lower appreciate to you lower the and sense expense what material of expenses? on

Charles Young

Yes.

it. watching are We

immune market both material side. going are labor It’s of what’s the and to the part the We market. in not on from

– We that. bit are our of folks. looking challenges little seen talented have at we demand and it’s as market-by-market a So, And for staffing were well. the we

guidance at – Any given have baked change. we our kind those costs of – you into point. are guidance this of as So, our into those

trending but up year. we the it only not for attention being material. into at good to of up you to it, the second continue it’s going are ends So, if if look to, we things well. to-date, numbers But next But will half pay monitor year, something put have

Ryan Gilbert

of Okay. sense the Do a broad be just helpful. Maybe would a very magnitude? you have range

Charles Young

coming hard materials. you tell. when It’s places different from think about to It’s

is staff amazing. procurement Our

And so from able scale. are we national our buy level a to using

So, helps us. that

our to local turnover. going level, So, it. then it down a comes And some what’s to of kind staff that’s at really mitigate of

that’s summer We of the the but have months. bit, ordinary little out seen a nothing during

put So, right put specific numbers change. on what impact not hard but wish But out a we it’s it. now, it. you when to having our that, quantify for I give I guidance it’s about think material could it’s to hard you

Ryan Gilbert

Okay, I it. appreciate Thanks the for great. time.

Operator

Dennis of The McGill next Zelman. ahead. question go comes Please from

Dennis McGill

guys. Hi. Thank you,

negotiate conditions? question, do arrangement what how pricing, at on And First any dependent where just process there the change or negotiated? in point you market would point on the is Pulte price price on is that

Dallas Tanner

upfront. at project-by-project on those are of kind to with Dennis, before, negotiate Pulte And look each teams we our Ernie on about projects able these talked basis. of a directly As

the it’s business. of think, And make project-by-project have a of They with familiarity I is, other. that teams way most at, are know we basis. doing what and our the submarkets want to sense each simple So going kind for clean this, to on really kind of where look product a a what

kind more the already do And out. that’s been So, just it of these figured obviously between gets repetitions two you companies. smoother, the together

today. So, exists it that’s how

Dennis McGill

And to the just shifts is or guess one market other, Right. price the market? that remain I does or the fixed degree that there sensitivity to way a

Dallas Tanner

the into that structures sure parties details, fair we place and making both that, no, look being at in getting that have mean, Without to I so. we represent

Dennis McGill

it. got Okay,

acquisitions the that quarter, the in and of a can on give both wholly-owned joint us question, Second venture, you how by sense breaks down channel?

Dallas Tanner

call a of of little probably And the first. looking will first the And was be this just than talked of one-off. second velocity bigger much we month. pick a was minus, the in that through is to $XXX Yes. would Plus part this July majority we up latter expect quarter about or million quarter a year. up, for really north of quarter just heads healthy, bit We

would we quarter So, third the as well. expect be to strong pretty

majority off-market just one-off of our is MLS through channels. still which of of some local So, or kind acquisitions, either

Dennis McGill

as exclude and well? would that iBuying so And new

Dallas Tanner

mean… I Yes.

Dennis McGill

Those are small.

Dallas Tanner

XX% of Yes, say we was I bit little transactions. of would second basically quarter had one-off it. a XX%,

Dennis McGill

look comes to business as points how last through XX company data the mindful of is. months, you what XX understand it’s But everything be months Okay. about and then easy just kind trying versus to the over running and you you need kind of when the see guess, the the you strong one, for and Perfect. out unexpected is, to how robust think risks balance all I to next mind risks? listen And opportunity of that

Dallas Tanner

stay are some of a that’s chain supply goods Yes, I of of doing cost, team the talked tricky their the a cost the volatility last think to to over on call. happened of ahead year have the sold, and procurement we trying Charles kind about job them great has of been couple navigate. with of

risks and about false the caused public We it’s obviously perception have really of worry like I a we us job the of to future out there but about companies think do it, how ours of good are think done those some differently. we some hedge that’s in narrative around what doing.

dynamics is that apprised other at think it little a team the a stay Because kind of that in the the But do. make what job a of little at buy, are job those we behaves done that want conversations that making and and front we and how every it’s states to with kind things how their legislative that housing pretty navigating the Mark issues differently, the there the I and we with of. of stay good But between ahead we opportunity bit level. some – bit like needs. pandemic, of then what the market-driven it fantastic doing operate levels, market both have of state product we are. a what residents around staying do of we are And it want to happened really moving and feels working kind teams that around we why. his what California of we always is and state are sure sure lastly, the Our in always local level, really of active tricky.

management best like We spend business. And do want so that – pushing of not that and apprised really still think, are experience. to to sure find an want I to want those how And to comfortable. resident that’s the flat the sure get that spend we the continue really to don’t innovate grow of continue ways we we I want more, apprised is to time about trying quality to make to and on to ourselves stay bring I the we to make we time for things resident. the what are worrying standards as on a talking we clear get service we But think team operational an a about be perspective. and lot

Dennis McGill

Good that. luck guys. for Thanks

Dallas Tanner

Dennis. Thanks

Operator

from The go ahead. Tyler Batory comes question Janney. of Please next

Tyler Batory

good prices the look the appreciate on some other, morning. one the are question the any there? will of given any I stick I rates, movements And way perspective to Hi, like it. one rest home Acquisition yields year? competition might just that’s or out what where of here. and cap

Dallas Tanner

Yes. last little We this our on call. bit on signaled quarter a

of We the price the kind been buying. of of With increase, are that to in have the we products go have kind low traditionally seen kind mid-Xs. the with of mid-Xs some into we

market And X.XX think a buying So, have around QX. of in been like somewhere basis we X.X, have right what I been that blended the now. feels on we

Fortunately, a more seeing supply marketplace. back into creep the we are little bit

are You be some hopefully listings change to bit creep we listings we up expect us seeing cap – or – would at this drastic don’t pace. like little kind new of but around better in supply. and stayed a a I if expect X

Tyler Batory

Thank the appreciate I excellent. you. Okay, detail.

Dallas Tanner

Thanks.

Operator

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

Dallas Tanner

talking again. everybody’s next you. Thank forward fall. hopefully of everybody few getting to in appreciate we the Thanks to We support, quarter, see and you a look to

Operator

now Thank disconnect. you for The may presentation. attending And today’s concluded. now has you conference

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