Invitation Homes (INVH) 28 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Scott McLaughlin	Head, Investor Relations
Dallas Tanner	President & Chief Executive Officer
Charles Young	Chief Operating Officer
Ernie Freedman	Chief Financial Officer
Austin Wurschmidt	KeyBanc Capital
Steve Sakwa	Evercore ISI
Nicholas Joseph	Citi
Brad Heffern	RBC Capital
Adam Kramer	Morgan Stanley
Anthony Powell	Barclays
Haendel St. Juste	Mizuho
Sam Choe	Credit Suisse
Jade Rahmani	KBW
Keegan Carl	Berenberg Capital
Tyler Batory	Oppenheimer
John Pawlowski	Green Street
Neil Malkin	Capital One
Dennis McGill	Zelman & Associates
Juan Sanabria	BMO Capital
Chandni Luthra	Goldman Sachs
Joshua Dennerlein	Bank of America
Linda Tsai	Jefferies
Michael Bilerman	Citi

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Invitation Homes Second Quarter 2022 Earnings Conference Call. My name is Irene and I will be coordinating this event. I would like to turn the conference over to our host Scott McLaughlin, Head of Investor Relations. Scott, please go ahead.

Scott McLaughlin

Irene. you, Thank welcome. and Good morning I'm here President Operating Dallas our Homes and from Chief Executive Invitation Officer. and Financial Chief Freedman, with Officer; Ernie Tanner, Chief today Charles Officer; Young,

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

let the You can that, find the to GAAP turn comparable most to in measures regarding measures earnings these reconciliations additional Dallas. With me information call including yesterday's release. non-GAAP over

Dallas Tanner

remains to results. state the of quarter release I'm healthy. Thanks The Scott following and business the our good speak with today excited you morning. of second very

NOI supply trailing and including the year, improved We Lease was only XXX XX.X%. remarks during favorable strong to demand rate my guidance, these XX%. XX.X% a growth like points that and detail occupancy with results work hard our These continued markets. average quarter today. in set at a teams as our and same-store the our accelerate our year-over-year was XX.X%. within provided higher new basis impact and of I'd of growth revised for was blended full to turnover Second XX-month discuss expectations more of the reflect in record dynamics

begin let since work providing of over started level XX the of been single-family high a teams. the to our We've me care First, we years hard with residents business ago.

XX/X high that and resident and We indicators of residents' stay As satisfaction our operationally us thank more their wide that our better industry differentiated a they comments both and their an still and past visits know resident loyalty. with so we bench you again industry associates resident believe of delivering residents in this dedicated We quarter. tend residents comprised know X,XXX We ProCare longer provide executing is is for the and that to associates. I, to and service with experience deep unique best therefore, retention customer us by are to are actions. the to mom-and-pop and occupancy telling for our their homes. our high satisfied among trust well predominantly routine experience take offer satisfaction are than believe like ratings customers and of we operators. our a high And satisfied very the smaller of care best-in-class strongest

today. starts. single-family back traces the as United million X housing homes is million Much shortage this number States of to Second, the Recession Great the to resulting By X undersupplied as estimates, of the of by the plummet overall some and housing. in many

those for broad-based home that's opportunity a Pathway by a those is and to supply years. in a to who lease lease-to-own options builder choice Homes valuable we to want insufficient as been improved the partners. challenges, of While construction those preferring has it now includes lease gradually constructed for continue as offer through over meet addition home. desiring demand well few Despite decline to and existing to is to our one choice again remains This investment recently legacy a in our one predicted these for business our next

REIT. more I'd age-based like we ages including It's by affordable believe at United all single-family homes. discuss in a Millennials in about a enhanced see XX States affordability and segment home and pets staying also further Third, are the to ESG. our represent option old, homeownership rise of to the strength supports core result hours, office, of to care thousands driven strength recent promote is a skill want citizen particularly demand need age and directly demand demographics. and to growth improve regard, standout extends provides. driven the well, our more in and up linked continuing the these including million volunteering values annual and the values, also call standout trades; today. to new a of people we've resident spaces few attracted year; project, of for trends, this in of which ways, We With their XX be including really tens the household led In top-rated will recently out continue at the highest-rated our which in programs, the years a our our and to from as corporate a our communities. associates The our the today. paid or as a communities say and Green home practices space, the things Street's compared develop our job we that in and core to encourages This of leasing and generation company largest and such green population is rankings, XX population over many genuine is to many by invitation be a those spend REIT we XX community still recognize of moved this local of careers mortgage average of efforts. more the our growth of in between markets where This popularity government as to within the strong that of our for outdoor governance by live and spaces citizenship. each rates that to leasing our up migration We one formation home Sunbelt. skilled continued markets conservation made I in business consistent the REITs lifestyle to also relating

I this Before by up, report to the Subcommittee crisis. House address Select I morning wrap coronavirus the on the want released

here. like fully are there not have to the a to report, time share digest While we had things few I'd

perhaps all that we've did the we in known engage report laws practices our markets. states work the since that were First clearly well, not hard most unlawful, within follow the quite importantly, we to and fact that

today. report continue a pandemic just so to the this do during and of Second, fraction the tiny full shows did will we of picture work the

We total we exhibit the flexible are for government million. proud time quickly proud with care, more of on them how had with of flexible extra efforts, to to than provided residents payment out impact plans for kind are residents, halt nearly assistance provide genuine fallen Through fully help assistance; help contacted options team of of the residents; to these are early or overall, pandemic and our we financial a order all and in a evictions, to payment in XX,XXX to assistance, the moved or to stepped of who comprehend $XXX behind showed daily basis. our need we who

matter. live outcomes in $XX demand We that as and These experience a to neighborhood. committed we more residents offer favorable totaling When At tailwind Operating obtain pass lease supply it on to should experience, Invitation believe hard With I'll us, to freer. choice our great everyone that live that, and a allows over a possible. best-in-class Officer. to highest than fundamentals also helped are work they business, for quality million. have XX,XXX to pleased residents Charles, resident government from the the our resident choose we Chief payments, to Homes, assistance have We're our we're providing the to

Charles Young

in quarter associates a one start another XXXX this mentioned I'll length now average our extraordinary of for of It's you, record of the busiest Dallas evidenced A+ that during second efforts Business thanking operating I'd the performance. our review Thank like Better the our their Dallas. is providing times earlier, XX.X% revenues quarter low Same-store our year-over-year years. Bureau in rating ways, year. because of turnover a in to our premier up by approaching of operating from they've core year-over-year, our field residents. strong many in including sustained moment proud three We X.X% achieved certification first done the from which and grew of take loyalty strong see that and quarter. and teams, a stay to details we such recognition I'm experience have how resident such earn and results. our

increase same-store increase up quarter. in was monthly These growth. XX.X% NOI of driven the NOI XX.X% double-digit rental in by being operating was other rate second primarily to same-store in a growth quarter, core same-store the results year-over-year income. average making growth top drove X.X% line in quarters four second a year-over-year X.X% row Our and of expenses This despite year-over-year

marketplace. in expense, year-over-year and rise the XX.X% recent and and were also labor of includes property up which Our with in repair up higher and in largest our taxes, costs was X.X% which were the across maintenance the expense expectations on property given increases material values year-over-year line impact

the I'll discuss leasing current environment. Next,

continue the quarter to second demand through We July. into see strong

up June's year's May's rate second XX.X% New quarter, April's results. lease the second growth points quarter, strong from XXX for XX.X%. result, last rate XX.X% surpassing growth XX.X% basis was and accelerated throughout Blended the with

lease our rate to strength low sit two volume remain believe near we or significantly growth. As line the include continued with sizable a that remains exceed renewals, leads Markets turnover, approximately the include positioned South XX% Tampa, growth Florida, to we last with years. we new lease highs, the historically with future and Together Las also rental we Further Orlando of new be now – today, to growth estimate our with in Vegas while strongest reflecting are we continued the Sunbelt. for across at application Phoenix our well, as three-year maintain loss and to continuing well portfolio. we are lease the

that exceeded XX%. or average are John who in moved annual on lease months it increasingly a household our means with While is notable incomes. $XXXXXX. housing. are affordable which figures, than Leasing income-to-rent This single-family of their new per too average to it markets on to are a income and times, less of rates Residents ratio more affordable, an income resident XX% to in is had residents for us of so XX our ending represented more annual has June savings these X.X prices. latest buy, spending new According than leasing XX of almost average weighted $XXX Burns' by all month today mortgage XX home home become home given rising trends a

down part all XX%. fewer And this continue our and do our also a an home, work buy own of year a of was the first to the This to excited to by home ownership With from This pets, prior of need year the their and they and of move-outs, the total welcomes over leasing us, residents is a basis the every home second remaining to close includes both individuals best I'll improve space of internal to the we case of that our compared easy behind which lifestyle decrease Ernie, moving a a was Officer. quarter. year number in trend was by now XX% Chief that the as residents lifestyle offers this the just to Financial of to and to measured from the Our turn year call offers that desire. I'm each opportunities to significant to the over half and data the first provide year out down associates our half deliver additional number leasing to percentage year families, move-outs XXX saw of and in home. accelerated prior day. this the as shows which buy move-outs points

Ernie Freedman

up existing our $XXX loan. Today activity, announced balance with topics: updated capital term and discuss XXX following begin our to our three with of current in credit our the the activity, our million by received our certain followed to at capital prepay followed the XXXX. adjusted I'll you, Thank financial option a The a six facility. proceeds term allowed portion closing, debt on plus receive and results with has points additional proceeds the the up wrapping will month that markets pricing was unsecured from targets that $XXX performance delayed matures draw meeting We guidance. loan The XXXX over June closing draw markets scheduled million used a secured at ratings. period. basis and our at in portion in This proceeds ESG similar new interest benefit us SOFR by I term elected the draws feature June of includes Charles. a to initial to starting XXXX bears in of loan before initial for based second funding voluntarily we to seven-year recently sheet to credit mature unsecured quarter, our

Net are million X.XX% that XXXX. XXXX. closed of to As prepay a start we senior a scheduled were quarter, to the bond priced used end debt March voluntarily in at the and a mature unsecured also $XXX notes of proceeds April at was to reminder, second The offering. secured portion in also our the mature scheduled XX-year public of

As unencumbered total XX% our capital increased to a structure wholly over that's of result of to debt market portion activities, unsecured of raised pool we the our these properties our XX%. and approximately owned

loan. net coming second our we AFFO XXXX debt to targeted I of increased of maturity will I'll financial increased cash XXXX year-over-year the and until range including $XXX to primarily our due thing At share our end. our $X.X times FFO years our was touch of times no nearly briefly the cover X.X results. term credit and quarter of per within per capacity quarter our with debt-to-EBITDA updated X.X growth. year-over-year which $X.XX. XXXX the second due my undrawn is on the end now million The average is quarter of six the facility topic, at had was X.X of have next ratio As share second guidance. along Core XX.X% end to approximately last of billion liquidity weighted to $X.XX, We quarter, NOI XX.X%

a favorable raised of midpoint. up supply to of core XXXX strong execution XXX range at basis we our same-store a points As result demand revenue X% and expectations growth fundamentals, year and full XX%, the to

coming respectively, off are expense two strong years X.X% with growth X% in have low exceptionally inflationary row year expected we're predicted and been this a of remain. as While headwinds and to

All XX% expectations to is at growth of full to our of X%, XXXX from range same-store result, guidance. XX year a XXXX NOI XX.X%, increase been midpoint considered, As XXX up year full the expense midpoint. revised we points growth the basis our which points X% of an increased same-store to revised basis prior guidance has a at

investment of expect open and the for or remain Moreover, per also our to echoing year, in of now low which to dispositions, please million $X.XX an Taking have account, quarter. we AFFO we outlook. our to expect term, our Charles' share market of $XXX of now pleased conditions capital and which increase continue the and expectations, the quarter, execution. approximately business of end changes beginning team's acquired $XXX core I'll we the cost year now to $X.XX closed anticipated loss be of with the $X.XX midpoint comments and current we revenue We previous guidance of positioned of We more and with $X.XX we the $X.X of per the recent of supply and is are for experience. our the expect considering and our approximately Dallas' by an to the demand we delivering the $XXX ventures. revised for both midpoint. operator, committed million and the per from proceeds the at to and be of from through With that, an sheet line Regarding balance $X.XX XXXX the due approximately gross With now core at share, XXXX remain reflect full Through well increase fundamentals tightening turnover million exceptional $X.XX on per close for second questions. that favorable. lease to second near acquisitions share and expected joint billion. share activity, year represents FFO into for increasing AFFO increasing feel FFO end to to guidance. approximately and homes regards these

Operator

you. Thank

We begin is first will now Instructions] our Austin, session. from Our Wurschmidt question-and-answer Austin KeyBanc from [Operator Capital. question line comes open. your

Austin Wurschmidt

that do the And the in for revenue. revised first, within easier I are Great. guidance, And Thanks, to the year? on you just how of guidance, the to moving be Ernie, guess, tailwind lease Wanted you a forward? comps occupancy modest deceleration on much back everybody. baking half hit in embedded rates expect specifically

Ernie Freedman

Well, two things.

On would been expect low-double-digits shaping be do way modest few or some for seen numbers XX%. on the to next months, where pretty deceleration we'll rates. are But historically rates. we the renewal XX%-plus some and we side, a better the lease Renewal in things where based as to we're see we expect steady. around up to seasonal be the those new half rates, maybe as expect slowdown, at the stay expect have we've the have lease in today. new later We've gone than certainly but we get do to to high-single-digits or see very achieve able would And renewal out we

a say, been so time. would quite occupancy period occupancy of high the We've in I necessarily comp record isn't easy. Now for

And our certainly the guidance. have So, of see middle steady pleased that us range should we're occupancy a the from kind in of be of benefit we good into side. year. would it not things state a to necessarily was that guide We'd that the from anticipating last where get us

Austin Wurschmidt

you. Great. Thank

Operator

Steve, Evercore open. your from is Our next comes Steve Sakwa line question ICI. from

Steve Sakwa

just shortage development the if years. could was you got sort just Great. whether expand in couple further see and the given see we've you unfolding just Thanks. talk of of US, I over about Yeah. opportunities maybe housing that wondering that, opportunity and the next that the the you how to

Dallas Tanner

that and by Dallas. that of this national right time builders homes about our inclination with where structure Steve, It's have even been would is opportunity additional some to place nice the influential. design bring becomes we can we into probably things these could we hood that's to nation's with And Yes. over sheet-sensitive. and greater you our very best layouts, us, pipeline structures, as the advantageous with we've community standards, is we a X,XXX certainly have develop Great an about question. plans, sometimes under work got finish been we in is with really where say, a fit pipeline to supply wanted being influence the that and partners. The very early partners Today, a builder your like floor balance even position thing I fold. but in we're know, believe

both little would there we us. expect for no in in that if how play we think much There's And part of the a partnership us think the to that have builder doubt so, opportunities shaping portfolio would coming about a about growth more to it. And be appealing expect years. structures I and should partners and slowdown, that also over our is how our about those we to major both bit a

Operator

your from comes line Nicholas Nicholas, is question open. Joseph from next Citi. Our

Nicholas Joseph

you. Thank

is down the a set? of about bit. the of a more of half And that then capital are guidance reflection it growth acquisition Just cost that how back you maybe or thinking year? opportunity coming in funding Is on your

Dallas Tanner

bit of It's a Nick. everything little

out will business last done so fair to we've love is of couple don't we additional our investment itself our opportunities management today cost the capital we balance all the of that nice where over years, think to of lend First on in of job future. a building But sheet. be

early. of the market little In assets, particular with pricing changing terms and still it's a

submarkets impossible want to we've where think a start we're approach of day. some buy end we there summer certainly some how to supply even out. the year. see shake towards in candidly opportunities every Because better the could could see think I perfect to out. an -- little wanting terms But bit of so settle do where of taken through asset you cautious of a long We it's buying be investors, these the be to

in our So we've approach. methodical been Ernie?

Ernie Freedman

capital. to Nick And around the address question

to do joint have the $XXX that do capital of guidance numbers than So thought Nick we the $X.X actually with without $XXX on whether or we'll With year available more we without will bringing ventures end our increasing these year more acquisitions we ventures. end leverage. it's We'll with a about this any have the year that, year-to-date we're little the anticipate for and balance joint up raising funded be sheet billion million capital balance do more would because million and cash on sheet the bit. are about through down

capital for do ventures our way. change can So of also course, either capital And, another market if take we advantage us, change sheet we if in our or a could some of way see in the balance favorable cost with be that that that's joint of capital.

Nicholas Joseph

Thank you.

Operator

you. Thank

comes Our is your from Heffern RBC line Brad, next from open. Capital. question Brad

Brad Heffern

traditional Thanks looking you Hi that the getting of question. from the to do for Are you at partners MLS now? And more calls how supply? channel your attractiveness everybody. the right versus offload look homebuilder taking

Dallas Tanner

the our have lot month calling been feels cancellations. it one-off us they've on of most the -- opportunities, had Every last like over because definitely some partners a

I of are think that seen there. you've that releases some the out in news even

of say that cancellations time, raises would XX lot of two for some it in like it moved I almost call take we're yes, advantage points felt communities they we had active when basis we So, that. ago able in first to were and Fed at the a

things? of latter more the think to little we'd bit time a the takes the think towards we might of opportunities develop but I part wholesale pipeline year. see that I No, programmatic expect

Operator

you. Thank

from Kramer next from Adam comes Our Stanley. question is Adam, Morgan open. your line

Adam Kramer

question. the guys. for Hi, Thanks

little at are and US below -- XX% right? think your XX%. core -- Midwest margins of Western like the NOI bit Texas or a is the So I in kind so. So

those Just Just and margins raised those guess, be regions. in across record wondering I the the the sustainability differences Texas there margins that of differences have? the, margins given Midwest the structural dispersion turnover the Are about margins of what low there? of in wondering the drives kind Can we over and time?

Ernie Freedman

good is markets all you Yeah. to We there's be margins certainly the really the question. improve across going the think opportunities us wide portfolio of a I in across see an mean much our In certain for But to fixed those states, of it's reason difference still. states states our in there's taxes other because than or run higher property tax expenses. because and that's whether not. mainly income

by in instance, jurisdictions states. tax Florida, for So, personal having the but maybe there's the of a Texas raised of other than State higher taxes property not by in funds in are income State local

wide costs, has would and across so that a windstorm. item dispersion have the portfolio any of insurance to other our for our The instance that be markets exposure

higher market are significantly Florida the markets. Texas so. So and costs operate Houston well to as the third And other insurance much rates going as just have a is item, to the specifically again that's or but property versus less then cost market incurring

Phoenix though it of why low has like XX. rate insurance, has and you because Market California, And lower taxes property have property so because that's markets see like Prop of earthquake taxes. lower higher insurance even that

improve hopefully of NOI range that the margins our opportunities But in see wide continue That will each certainly of across portfolio. portfolio to markets. margins. to in overtime exist You the there's

Operator

you. Thank

Anthony Powell Anthony, open. Our is comes from your line Barclays. question next from

Anthony Powell

terms the of versus want aggressive lease markets? given renewals bit is be there know spreads on more across Question on in a dynamics your opportunity morning. pushing I converged renewals. to in overall you new few Good more quarters. said past of housing That maybe the prudent bit Hi. an there to be in rental they a rate

Charles Young

Yeah.

As been we here. this tough on beginning We've said renewals. really from -- the Charles is

XX.X, been breaking the up every you in As every the into last the so, out year we're October for -- Ernie for month it, XX.X. pushing September almost here. we're low-XX% quarter or mentioned mid-XXs, and we've see can

spreads, expect as see steady high Naturally I what QX. And we're those to we those stay bit. in that that from to and that stay to kind I -- see I that new you'll to there. nice into to renewals we're but are But some So a we try lease seasonal And see And move QX. earlier, we'll QX given going there. really our think lease loss renewals slowdown. clean is we accelerating in QX while you'll new will stay start the spreads catch-up for mentioned steady start converge between little going to as a and up of lease to think

but we hard we see been are can you this we and we're for at are or caps pushing in an go. much? we've of pushing the good thing And think we're submarket teams business. how about are do turnover up. where where steadily look rent a Low thoughtful. is. it is But in California, our really thoughtful other than number any required So that markets home local market too We We're on really terms thoughtful we not where have we a our still and individual don't around we that

balance right going that putting we're we're and good finding numbers overall. up I to keep think So

Operator

Thank you.

from Our Haendel question St. comes next

Haendel, Juste open. from Mizuho. your line is

Haendel St. Juste

you guess, good I debt revenues, in same Ernie, maybe have remained Your you basis help going bad so XXX collection net think on in collected you, levels? XX was I assistance So what's understand that points the Thank happens helped, could guys. Will rental with basis and points pre-COVID collections us us understand what's what up runs real maybe better movement help Thanks. month. could believe, going I that there but when again? has here. but I bad in the out? on no low versus the morning stats. to understand month debt the Why move improved

Ernie Freedman

as hindsight has certainly for it's a it pandemic not with it's collections a all us been it's we Haendel -- in hope predictable new be. of And in period. as Yeah. certainly dealing would been experience

quarter right catching out, for people that rents XX% to point rent and we to we pretty then consistent paid. rental people of You're we've the the sometimes of our to the help volatility rents. our of what of in current current collected And just up some been terms collecting Historically in paid we where rents the then, opportunity current about results were terms terms a low is being to to XX% collection we've past next steady in assistance in seen out around past. kind in we've with been bad with quarters over change. without being were What with first with of the sometimes around We have surprised And came the last getting the got of three and many XX% collections. XX% happened catching the people rate regards catch-up. up

So number But debt in it. expected. we bigger second then, a had were the quarter the offsetting good surprised to than we we bad

and people with seeing some also continue to to we've But rent still some being we in here suspect what as we'll to to receive -- good July assistance getting there current regards and bad off would debt is But So period processed. in with be. certainly happens year-to-date regards August. as But kind move And we we're more to could being be our we of we some it's are where over from things assistance assistance still period new then, pandemic folks. able timing I over is with would past a and Dallas application we not the thought period accepted. things time certainly at been to happening the we bit application closer the of issues be. next drop six-month likely work thought received longer where rent rent work off will

take into likely expect end first some that terms our get that's out numbers there statement we get for we some mean could in the of year our time was year, what that like the in here not sitting we into it's it it in will of debt at the versus bad before feel the half around get the that. second now quarter. It before the is very we're to this the to here in the thought today in at too year. seven, coming of XXXX from historical to not bad number of far kind we the strongly half closer we And collection numbers average will you second months And numbers XXXX. saw noise that what of of about year it year we more historical certainly the and don't a off what to beginning So eight said debt

Operator

you. Thank

Our question comes line Suisse. from Credit Choe from Sam your Sam, next is open.

Sam Choe

I to And utilities, just the led wanted due bit on seasonal much inflationary to versus quarter-over-quarter? guys. the turnover operating increase was Hi, How a of expense the what focus on that pressures? then side. the little to quarter-over-quarter also uptick R&M

Ernie Freedman

Yes.

quarter. at year-over-year versus a we do look the Quarter-over-quarter, seasonality repairs from air the HVAC quarter. of we generally more as maintenance that's increase elevated of They it's a quarter Sam, the hot in second and because always basis And a stay costs conditioning. So, season, sequentially we the in the all know, third to first business. pretty summer. around really And big see a

we of last we're certainly did bit little year So than seeing year. a this that more

difference in tail now is in on costs year-over-year toward the under control in the quarter, kind a the we're couple the the been XX year, quarter months started in continued of pretty R&M majority years had really were the to R&M But of maintain our first side. a total of cost in second inflation. that. to where is We increases. almost modest really bit terms and certainly, row fourth third end inflationary in is But we've of the around little net of our this quarter and environment a grew significant and a So for environment grow of the

the a So that. We're of we're that top not seeing costs. that those elevated as And to lot in that do board. on you certainly And we remainder hot continue the of for in immune that's I companies expect R&M to a guidance. the With year a utilities, to well. throw items other across the well for of there's as a few we challenge our been, regards summer group think,

with associated bigger is there different items And so, bunch that. I think, challenge a of the

the are definitely utility are responsible the where the for up costs vacant. utilities And across board. so, We're homes

seeing not the immune market we're increases because of utility to happening so, to and And what's with that, we're costs. in regards

Operator

you. Thank

open. next Our your Rahmani KBW. from Jade, line Jade comes from question is

Jade Rahmani

Thank much. you, very

you of its What know much. currently? of its very Are assess you how big capital? Invitation you capital seeing a investment be are institutionalization, in seeing? you market rates in will seeing Homes seeing terms probably deployment cap trends? I for cost adjust the sheet. you the are But it the those side, considering material slow eventually opportunity strong balance market Thanks current what are any seeing way? down On move Are as in their purchases they side, investors their

Dallas Tanner

feel Dallas. present the if Thanks, about Jade. certainly as This equally opportunities is our We confident themselves. capabilities

so far, much I in we think, seen movement pricing. haven't

home a as active as investors buyers it's board through still season across relatively the fact, both for and summer. sellers been In buying maybe well

end like our of I Case-Shiller still markets April, think through March, Index XX%. the early the is

significant seeing still is to we're price appreciation, moderate some degree. home to albeit, starting So

to little and a in bit economy in And deliveries would going more of buyer of And the is a would develop. the there consumer. bit being with supply forecast backdrop into rates later turn I mortgage, the of be even given We in slower not going opportunities QX, So terms I it's that. in is, pressure. beyond things little see Builders, big that you having that how as some just the really cap year with to But well. we start still see said, a typically the get higher to expect is QX, marketplace are hard to to with enough what's a careful cost think the changes got season, to isn't overnight. as of you imagine, on that happening might like amount start

environment, could an supply-constrained to, extended it like, lead truthfully. So

might any see things offset you right generally may that cap marketplace. able be gains you that potential would or pretty now. that the But rate in So to healthy feel hope

And ago be you one-off a the like have that. we're to things market gone if four, with an competing XX might I competing property, and to feels quarter you three a if on think it we're eight with probably rates making in had Jade, other me, asked offer today buyers. about like just given where

of really that's kind the the ground. on color So current

Operator

you. Thank

next comes your Keegan Capital. from Keegan, line open. Our from Berenberg Carl question is

Keegan Carl

guys. Thanks taking questions. Yes, the for

same-store about elevated that? Are of think rate main pushback the we occupancy seeing the quarter, XX move-outs? points you were basis drivers on increases declining in any causing when what Just more

Charles Young

haven't. really We No.

I we're environment. just normal to getting think a back

at about again. you seen. think to look normal to we've very As our still occupancy, COVID, that back year were that seasonal of curve last we kind you at of in where move our see kind And we're it's people And and with if of good. environment, kind starting XX% quarter we now getting

new that's And getting so doing area. natural we're I push the as think there, to start to of making out this is we're a just that, renewals. that kind we capturing by lease rate back also And sure

occupancy. no disappointment So strong. our I It's XX% wouldn't – have in I very

in providing ancillary people You naturally where And and that shows extra that. what and homes we people the doing, the we that low QX, at But the and all and are. our We're look for attention that, XX.X% that's as for not sub-XX% back like than right our time have XX%. that's looking out, they're in we're service much number services and like. just QX and pay typically would because to healthy. really that's areas move kids schools just we're when turnover right I including It's lower their of the

around a to little we would back see, then might back So bit start and to come QX, I I That's it feels and see down, or up see getting in curve in QX. maybe we're that good. really typically XX% go you think curve. think normal the it there stay right seasonal you'll

Operator

Thank you.

next Batory from Our Tyler your Tyler, question from Oppenheimer. line open. is comes

Tyler Batory

bit? A that question out in remain challenges What's to continues pretty to I tailwind turnover. it turnover a that the guidance some a just of now stays, if guess, for low provided? of year? on you. or in is right pick expecting to for as this expect bit we Thank up half there? the And second metric perhaps the morning. Are Good included given terms you lower look of where guide affordability little little move that you follow-up could be of turnover guidance, at the a Do you to the it

Ernie Freedman

month-to-month, year-over-year lower a to last is year – comparing Yeah. year. see month that turnover it continue Tyler, than we this was

expect see we for to the as that We the to foreseeable out year. future, continue finish

So more have do we as we saw we think that. range a than low to talked slightly of but year whether cover will we'll we or direction, still, other continue to a that in we stay our terms – little bit about in it can lower. better And turnover better just last favorable in range of and we to Charles just have numbers see goes with think room the have terms

Operator

you. Thank

Pawlowski from question your John, John Green from next Our line comes open. is Street.

John Pawlowski

thanks total much down could system With Hey, turnover at a might normalize? time. to for stab to cost the take stay once or and Charles, continue length through see how Ernie in come going the we turnover of now quantifying of you starts portfolio is right deferred increasing kind just maintain

Ernie Freedman

To expect go bit. are good once we a to It twice sure our they to be. those to a you of sure have a portfolio, the the bit as Yeah. longer and people appropriate But in certainly, in is we're head, certainly home are inflationary. little to as little that of in faster and also increasing out where to the than there top things maintenance, we longer, place gives the increasing not us at then be people a rise give seen here, number opportunity make our that staying point. we been a costs do turn But an things have off this need remember, John, have spot. ProCare seeing cost our make we are wouldn't when year,

inflationary be put some to So cost to turn meaningfully we pressure than pressure might don't on not but expect material change. that a a more It bit there little should be the different.

Operator

you. Thank

One. from is line Our Capital Neil, next question from your Malkin Neil comes open.

Neil Malkin

Good operating side. you. morning. you the Thank Charles, for a on question

always a that expectations have in occur a very so of important equipped urgency as versed probably So are a of regional manager, sense to handle of regional and – it's and home, relationships variety resident that problems terms the well team emotional is connection. someone's that they this well can again, just well trained you

doing Thank So, making questions request average enjoyable, continuing staff it regional like something stay being to so generally go like something just have another maybe an you. just about reflects people can as education sort well company? about understand or or to people-facing help on if And can maintenance time how how you give of kind fixed things improvement your the us or all as and your handle you training ready of to managers, talk average work? to you those maybe way guys

Charles Young

we year. the Google is We provide and we're order work with groups do XX% as on every and doing. and or turnover, low over feet vendor are residents. you orders their speed our take that what And work to dealing our that Great it's associates turning doing residents. that our is or mind measure a residents residents No. great they use XX% renewal order have in vote step part whether team to we and a on while about. when experience our or experience survey those members from And we those in they we make now. X%. approach your on us vast of what talented Yelp XXX,XXX we when for track our -- question for homes just them. occupancy, the question. the to focused pods in as orders break I or homes And a in with my rate, rating sure we Yes. proud are and and into up -- like. what interaction, all is our field. about the score special of talked their We been of over with the are and a and happy think majority either are back, this a their train of -- BBB residents do And wallets how the and them really our We've Look, I a work markets things, really we're we that are overall our that that ourselves And we work measure

sure residents. the We instances. then of some hundreds that have the do moving we of of experience. generally, get about Our things make and we But locally the location Do and train and parts of make things you're do couple come teams. national and to people any is out to we No. right really things the business we In that XXX% It's brand it are quality how responsive are really the of like better the what going continually house. to that homes doing, those a There and get sure time? we team, our we the in are we're we central of that trained. our homes,

we bring as and that's an -- have speed to they're also kind new employees making that We sure effort we're need up on, do. to of ongoing we

is Your around response last time. question

can in are multiple request there which clear, be request. maintenance a someone avenues Let's

online ProCare urgent our so criteria through down portal when that a they be could emergency don't the the of what's service we app. when let request, and could requests through can maintenance kind we of mobile of might enter. to scheduled have an us resident care permission in done our call or there's -- or taken normal that be of or the timing do center. all the in. a in to same really go terms website, break we XX/X on call Again, fix And it what's be it what's So wants on It and our new

that's schedule clear sure to we're that of come through. to about residents. and us really there be that hours. about matters make thing that's we're those within I And is XX% the So to for want what we if getting the along is, The have an XX there orders with work emergency

orders normal average that of then first whether last visit. need it's urgent, work thing may really when And you take us course, about long historically, be are between, that how So an whether to it would I average takes handled add something XX% on to in our is, it's the of an respond, it's coordinated. or

and thing done. to They be So residents. that's in us our come a want big for

there needs been Sometimes and showing we're line we doing, up to job that quickly. teams. what is continuously there's be within use improve follow-up and is, and Bottom unless done. first and for training we'll come back. But that proud that We're follow-on we've our finishing of opportunities generally, that we're responding as some

Operator

Thank you.

Dennis, Dennis comes next your line open. from question Zelman Our from & is McGill Associates.

Dennis McGill

back Thank so to that forth? you quarter, as reserve lot you. what down collections number peel see just and forth. apart maybe to just the and Hi. then assistance the and There's assistance numbers, we get the talk the the and in gross the reserve bad between Ernie we debt. the of the on rental Can and guess, us takes different going the about a rental X.X% so puts I that P&L was to and

Ernie Freedman

out netting analyze due. unfortunately as we goes rent against we we Certainly, stuff rather what it talk how up Dennis list And other how that assistance and about XX at some more we is have really disclose then in some you're that against we it. have think not bad becomes that that I'd and there it. comes bps. confuse the throwing it's the that on issue by I going number. That's metrics debt to

Operator

you. Thank

from BMO Sanabria your Our line open. Juan from Capital. is next comes Juan, question

Juan Sanabria

afternoon. Good

process remodeling as to numbers now kind Just normal factoring in, homes to for can a you environment CapEx, as little the regards inflationary buy given homes of with of that the of about that if bit expectations kind run for rate. wondering just about rough think and you're you part go-forward talk the

Ernie Freedman

had Juan, for we CapEx and work reserve, churn. as maintenance which our well recurring few maintenance for as years last the that repairs had into did account took we

many it consistently they that ran running the years For was ahead home. per -- year last of $X,XXX this about

side, no the when in more, contracts We're well. certainly to we in much that had We're of what number was productivity that year, than it really And lower that offset as that a So today, much inflation able as turnover those There be the number past. toward increase. higher than to in net place or maintain. for being as of CapEx XX% certainly procurement. better was again higher granted get cost helped somewhat this trending could during lower was times, that's through periods through able increases to any inflationary was our

if probably, So be take you to that's year. the trending going something we're $X,XXX to closer this $X,XXX

predict cases, Going anticipate normalized in We a get that's see. going then, when forward, side, pressure could is And to some on the chain. have uncertainty, to we're environment. inflation some less to do to point come just be, down. if going to to we hard see to a pressure And out. we're seeing more going on it's at certainly Very we'll we're less the lot economic well. labor as help of possible going supply going us forward That

over us challenging long-term, be a through a things would we our expect inflation, would me Juan, environment, the increases comparison favorable inflation size but in to to So us, and closer maybe to what comps scale opportunity with certainly I our But the that. bit off fight think this do that where the hard challenging coming more it's do than for year. few we little more years or kind of creates are better especially -- to more this excuse and a

And you're growth. so why think, that's the outsized I seeing

Operator

you. Thank

question Chandni, next your Our comes is Luthra Goldman Chandni open Sachs. from from line

Chandni Luthra

update for I us the things legal Could where filed week what's give step arguments process? an taking Hi, And there? or recently. update, in my this Could your Thank you Chandni. next an us Thank just last on on you more is stand give front? that you question. the are you. believe

Dallas Tanner

Yes. This Dallas. is

that mid-July I'll the we now the as qui in of about we've on ruling think a hands that. three what we're response of in then judge suit dealing six happens think had it California. been get No, dismiss. say anywhere I take months, tam to of in where that update. there. with to asking these And has process. from state is our the you're And I their And real published we the indicative to told stand can motion the on that, that beyond part

Operator

Thank you.

of open. question next Bank from from Joshua, Our comes line is your Joshua America. Dennerlein

Joshua Dennerlein

everyone. Hi,

of record of Just been kind across the on I expense heat kind the waves curious know country. kind there's front. of

potential is maybe this or for Just kind needs, repair higher something in? you're about AC something of thinking you factored seeing

Charles Young

it Yes. that in going we always summer the this expense up Look, be period. a heats as No. to is know higher

than just of baked regions going into we've can But hot be. how there are seen. you our So this And that's some kind hotter never summer, are tell, it's to numbers. that

a I QX. starting to up QX bit through see show so this quarter, we'll of in in to little and numbers expect and that's a And the bit expect

we to up when need there always we try ahead is where we type when there. make we any And it think always we repair be with heat, out replace, based So know same, about to the on treat we call. you maintenance, our in ProCare a can get any But on to it have sure of whether And do what's have go evaluate challenge. and it's you ultimately, we that's on. And going or to just vendors service. ready. We that this of have our that, show preventative

Our support service, we teams thoughtful customer I that. from talked have to going instances, how are a we're when be been as responding our any really there around through residents before, well. about And

Hopefully, and out. maybe a off bit. it'll cool all So hotter little than normal normal it a this little course, plays see we'll is how

Operator

you. Thank

comes is from Linda, your Jefferies. open. line Our next question Linda Tsai from

Linda Tsai.

Thank you.

the terms and trending? XX% the differences of can you the regional how across that's of lease loss discuss In portfolio, of

Ernie Freedman

There's of possibly do can rules that is too really the we what much associated no this at basis. side. We more on look markets overall California that with exception renewal the the Linda, an stick with because out Ernie. on do of

it markets do higher Florida. other which parts bigger we're seeing would activity like loss country sense. lease seeing of make where to we in more in than the see certainly So, the is in California recent We're

Las So have taken to eight some six XX for our and been off markets has Phoenix really Florida months. Vegas last months the XX to the like great of where last in

the outperformer. being our California, Midwest, leaning most markets a relative like of we're a where activity in markets. lease have seeing Florida higher of weaker Sunbelt then side Houston. disproportionate the relative on and more other Chicago, But weaker on certainly Minneapolis like of generally amount markets to would the So, the And is a would the market markets basis to an be Florida especially toward loss again

Operator

Thank from Nicholas a next you. question Citi. The follow-up from is question Joseph

Michael Bilerman

just with assume lawsuit. are here Bilerman time, a spending Hey, Nick. of it's only had defending but in I One, follow-ups. not lot two just the spending Michael just company. on I some Dallas, money the you you're

and the topic. at there's any in what the I you And was So just how quarter may if had expectation least spent spend second on much guidance outline separate for a just rest maybe of year. a capital in follow-up then the

Ernie Freedman

become It's Michael, a really the on work the low a not hundreds briefs. tens in filed de-minimis guidance. next be just it but of have number. over big because but it's required point material internally Ernie. certainly of on disclose we're this or seen it's and plays at may pretty as of think any activity, we legal been it's you've expect lot we material our where specifically what just judge's thousands we It's not ruling. this time this on to something not we'll how may do see at depending we're specific about And stage loss out of or We're the as We've period done not the nor at, what any going understand of to to to lawsuit dollars. that's spending

Operator

you. Thank

John your is Our follow-up from John, next question Pawlowski line Green comes open. Street. from

John Pawlowski

Thanks.

I change the we're you internal if seen we legal anything view? that that tam are own you to you wait And the curious, about financial your Dallas know opinion? review makes change there process for don't to we follow-up in think play on pretty you've out. complaint. But have to we're Just a good anything feel qui the be I have wrong de-minimis. at Is if think Citi I seen and you've the facts. would conference voiced impact the wrong where your

Dallas Tanner

No. about processes, let really has running, feel are things the the good whole not kind company. But job the the facts changed. of right the right got again a We a these of unfortunate only our Charles but we've Nothing and checks from public and -- balances. to the have. about operating team the being viewpoint do we good

have view. picked of some in our deal terms You of internal companies always to not get I'm pure time on from in motive's deal of and just change it. why with time we'll with to terms sure the this No But stuff.

Operator

Thank you.

Another follow-up Nicholas, Citi. comes Joseph question open. from from is Nicholas your line

Nicholas Joseph

guess I'm you back. ask. I the line gets muted after

going with prefer there I And the read our two where Charlotte get not little debt Those and should a today and on where was from you about to is questions. brought Is for at of diatrive to sort One debt capital bit just a a into side? on external So, just this don't that at terms on the this that a that that four The we And follow capital. debt lawsuit it But we from Ernie not obviously not the just X% comfortable understand highlight you up peaked get may is issuing of California second it perspective in from it is and or go are where Orlando Washington trying XXs purposes? about while just debt your and both? I to conversation. did anything wanted you topic your in article price comment equity in Post the effectively into think an the spring. whole to your yielding you're of drill stock perspective, bonds they mid-XXs a the off And -- of in said, be side point. does was, -- earlier I'm a equity on a cap. both in you're love to issue? cost you I low equity high from the trying perspective

Charles Young

tam, of we're comments I'll with the first the we in around this they out Hey, that around start on article. know question we what's that going part of the Post's disagree moment. laid bit the Charles. and we is Dallas' the thing And Washington on and premise And there. look your this here Post do a To we way. qui recognize right understand a we like exactly

kind really as And time approach what permits would permits. need cosmetic. price some paint, -- target and about or think an when That's avoid when flooring, try that think, work the say going our about is we're light cleaning, look landscaping. require plan to $XX,XXX XX% let's XX% a lighting of step cabinet we require our numbers, to, that we interior our of and and countertops, of, some $XX,XXX. XX% it's business -- And a acquisition that. cosmetics we business. our properties about it's all. work, of to improvement we after we back of when it's any I And purchase heavy typically just do what at typically And we do exterior. is little It's not I at think it's bit Maybe try

is -- And of kind we even our doing for broken that so looked business. when while. a we've down We've And this this been and further.

large XX% we spend, it's be on depending And we're our doing here. remaining municipality that or The are you permit. be XX% replacement or If only of HVAC of a what like replacement would be know what permits all is that. require would like the fence -- might about a would point a think that need unlikely to which really a something roof or X% about or

licensed. job. applicable Our and and do with we They them the laws teams -- accountable permit. they know a we that and locally we in contractors of do local They make that are sure great laws. hold what the work need rely terms We to on

of So as we out this to big other we that's see there risk make at going look kind difference. no a

Ernie Freedman

the Michael, look it's capital. your of of we with components regards part specifically. to address question at very To Ernie. your cost Yes, our second

plus On able term SOFR unsecured adjusted the SOFR at XXX. to debt the we loan -- raise were side,

cost certainly we want down be of pieces one that now. of within secured like to So pay million of -- range leverage we where right debt the $XXX We've the capital. from of to that drawn of

certainly certainly cost of buying the good on that would a if we really we opportunity, do that. buying be a some if capital if of that because the unfunded balance million good saw sheet proceeds about So we remain so we some using $XXX thought modest consider do

opportunity trading would whether on where basis, leverage because accretive things. were certainly that certainly an our balance we to hard of at in valuation price over where focus on much to an extremely all there to within are we especially, say be capability that. said we looking not basis. view two certainly how our be favorable is whether would That's at perspective, It's accretive. From on an for but the shareholders stock certainly we we want increase would been at leverage. our out time. period to overall, how focused is has be We stock some the for the much deploy range, the if those this mid-XXs leverage NAV raised that. really to can we're earnings That not we equity compare time from hand, it it's so what the to on would that on all that want really recently it's When companies we Michael. that So And volatile we last history. for have something and based a to use around is not what we're But capital your exactly just point and

whether Dallas an it But MLS it's than rates option off homes are want get it's buying period us. we next the gets of the As up more them see that of over where whether and increases been last we our potentially from in where ultimately this kind for closer can somewhere months, -- earlier talked again, then and land if we we as where buy, about we're like we do. cap higher potentially to builder traditionally certainly them marry of many for time buying partners, against

we'll certainly nimble. And stay buy about we to time. $XXX,XXX is nice homes at thing the So a $XXX,XXX

So capital we position to of in other we'll certainly to opportunity the think needs and be terms do of that it both opportunity. if terms to prepared and have that people in of some fund capital buying might us growth that be to the gives future favorable optionality size the more a in able not we're be raised

Operator

Thank you.

question Rahmani Jade, follow-up from your Jade last open. KBW. line comes is from Our

Jade Rahmani

where And modest think positive focused you still rent think call and recession apologize, missed what the I growth about are talked that if as this also, curious occupancy on. considering if Thank might -- trend? on environment? that some scenario you of would constrained you. sensitivities the you risk Have think Just remain be we to I you should supply a under it

Dallas Tanner

well this question. is our Dallas. as a positioned hedge frankly. Good Jade, quite recessionary is Look really business I think

impact I have traditionally seen we've think we more time would in turnover XX as homeownership little see some people seen program in leasing maybe it we've out we moving people's in and our few rates things, say and like volatility in to doing the mortgage ratio last thinking a more days a where a things because that. bit

about rentals distance. with the and is I SFR a last had is of we're Phoenix and things XX time life, over I've XXXX. In to previous and about of XXXX in close almost you doing resilient insulated. So of business over think some back crisis And we one how I've this in shared the this years I loved X,XXX now been

of While range. that of number in you like kind occupancy more it's a get XX.X% really rent more of our type the your growth, XX% muted on through CPI a little bit just stayed Recession steady Great

which way the the resources tools and the Invitation we didn't platform the now. really feel by good Homes I So about is -- or have

good think I we've developed our really record current track a with customers.

the we're I evidenced the better. And also retention think much in in I and levels service getting renewals that it's rates are that seeing. our think

a times, own position spending in of make X.X they their the approaching a how income So of to live recessionary with with fact their have somewhere if right monthly to want I decision customer in coupled around now rent got is is about We're and rent our strength, ratio XX% to us. they or that environment, the spend to think capital. people a really where want XX%

positioned. and we've people well in we're out think quite need the We're in areas. Ernie and a right markets frankly right pointed recessionary really as environment So just want the that I for a product got

we're think well this I So next positioned for chapter.

Operator

questions. currently we further have would to no any hand Ladies for Tanner you. back I to Therefore, Dallas remarks. Thank and gentlemen, like Mr. closing

Dallas Tanner

in forward and Thank you. We all or for you seeing to person next company everyone just their call. the want look we to support thank earnings of on our either

Operator

with lovely us gentlemen, concludes and conference for Ladies you. Thank today. Have today's call. day a Thank being you ahead. this

You now. disconnect may your lines

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