Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Invitation Homes Fourth Quarter 2022 Earnings Conference Call. All participants are in a listen-only mode at this time. [Operator Instructions] As a reminder, this call is being recorded.

At this time, I would like to turn the conference over to Scott McLaughlin, Vice President of Investor Relations. Sir, please go ahead.

Scott McLaughlin

welcome. and morning, Good remarks Young, Tanner, Ernie Chief Financial hear Executive Freedman, and Officer; Officer. Charles Operating from we'll President Dallas Chief Chief Today, Officer; and

sell-side question-and-answer remarks, with conduct these Instructions] a Following our we'll covering analysts. [Operator session

website fourth on During release XXXX section the was yesterday Investor and today's closed market our document earnings after This Relations quarter the reference at information. and call, may issued we www.invh.com. our supplemental is of available

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

also discuss during the non-GAAP We may financial certain measures call.

find in can earnings GAAP to comparable the additional measures, including these information most measures, You non-GAAP reconciliations release. yesterday's regarding

over call now turn Dallas. I'll the to

Dallas Tanner

continued And on throughout NOI stand our growth some year. continues believe business regulatory growth like XX.X% Thanks work from teams Strong footing. the FFO an business our thanking X.X%. solid for evolving XXXX and for last posted to their inflation we same-store year. morning. joining environment, of us of for demand headwinds all this core I'd year-over-year hard by start of despite and our Yesterday, we to

morning, to here joins past thank beginning from of later beginning that in like team few a the lead months. forward been excited achievements in this stepping as the extraordinary with strategic the seven you Jon our down has to know, this his Olsen, be activities. years, and Homes As June. year. all in look I'm involvement he'll to room his time, for same Invitation who financial and Jon finance I over and Ernie celebrating deep vision announced for us the insight I'd of part strategic all our recently him in CFO At

transition. We to be this expect a seamless

has Before reported United well Ernie past formation details needs household turning Invitation moments Charles positioned decade. it our to XXXX, the wanted the to It Homes been help our housing order to U.S. XX housing provide to performance and States take of more expectations we how over undersupply that and to about current address and and million believe to in to years is needs. add discuss the I the more few next support new environment housing a the than accommodate over XXXX the country's seven for in the units

Today, desirable as state because it and deliver challenging local well shortages. of however, remains locations, as and material to new labor supply restriction, in

come. and strong to for the single-family that, many or years group, discourage their of stage the the of to supply. is macroeconomic to their and for flexibility environment from aging more in of work these demographic pressures, the full-time should On remain inflation of of Add space higher housing supply top accommodate addition, millennial investment may in today's lifestyles. rates increased interest In all needing new life home, part-time believe largest families and many higher we to generation, now demand

with our in public a of housing residents service, high-quality lives. who schools we're partner We program. to thousands of And is their residents proud a core the meaningful choice housing program, with on for desirable and straightforward access to best-in-class voucher homes that offer we At our in provide quality great housing allowing including for be solution of seek and a flexible and the We participate critical part focus options. yet lease business housing XXX locations goal. assistance centers. serving employment HUD's to We authorities

previously through expect new to announced to plans construction relationships. builder homes continue delivering to X,XXX that our the our we future. pipeline few Today, we're exceeds And builder investing the are in deliver that next and homes marketplace over in years, new

with As burden, to the the of development some balance new while housing to avoid G&A a also approach keeps reminder, our related allowing to any off our bringing marketplace and sheet us risk in think allows and partner risk. to and us opportunistic locations. flexibility select in We business optionality minimizing and great the maximize while buy remaining new to a approach homebuilders differentiator and best this real homes is of

therefore the We're is those inflation otherwise business. who proud more provide this cost imbalance any and much than other expensive from have the a neighborhoods in of supply demand since residents significantly This leasing available made of important in housing wish and districts not school opportunity supply by homeownership live and lack homeownership of strong might starting more because widest demand home single-family aggravated cost that accessible affordable cost the dislocation at the a is All our often between live of is leading today. seen very interest single-family to the housing to and rates, and be further to option. we've to of this elevated that

on the markets. John month apartment home rental owning rent. option December basis most to cost-effective family leasing costs, our nearly nearly on than cost home string across costs not only on the housing come a on Based XX% savings a currently but home also housing each compelling average. as square This out more pull compared single-family foot homeownership can Burns further. on that their means a bit less that me per homes data, a $XXX save are These month even leasing little where a a Let

top This noticed supply believe macroeconomic the our several value our business current the on fundamentals today's demand our both we case, the is Homes past. and of environment being make and of compelling in Invitation we differentiators That the for proposition have that residents and shareholders.

technology benefits model of consistent for or offering a these of with tools residents renovated, app, recently refreshed interactions ProCare, residents our being efficient in with home services include our to a requests; provides more and resident list time residents, location; a desirable experience. that us; newly built their throughout resident process our their which growing is example For an even recent most mobile designed the service best-in-class living submit elevate maintenance to service

rental residents multifamily track there often sector has lower And long growth rental single-family within nearly single-family average there's SFR in typically again are had longer. turnover absolute meaningful shareholders, real record decline With of relative tracking Burns including much data. within rent a advantages growth nod the periods. States. the rent during XX-years even industry, For are of numerous single-family to the There's homes single-family a never most national our much in estate liquid to data, recessionary we United staying believe the with a than in and that

debt including scale; XXXX, markets, cumulative by our Lastly, large by avoiding G&A big coming there and greater while to and XXXX are growth Invitation operators flexibility with contributes maximizes overseen the new strong in basis we peers; NOI a the sheet residential ISO to believe in space and than average our investments land best numerous pipeline partner our rate of from also no load. builder the points XX.X% nearly and due that our X,XXX way, growth hallmark our housing evidenced advantages same-store location to the until XXXX; Homes as balance supply

delivering uncertainty be some in couldn't our also live chooses and we XXXX, with we full premier real a teams to closing, year to our underlying fundamentals In experience flexible about a and lifestyle. more of believe anyone a year to more here resident excited continue worry-free estate, and opportunity the who a

to pass Operating Chief Officer. I'll Charles, With our that, it on

Charles Young

everyone. morning, Good

earlier, providing a is year for is in service reflection mentioned Dallas believe our our exceptional an a performance look experience. our residents solid an journey XXXX we forward leasing are to We we offer in results of and ongoing continuing XXXX. As This that the us.

our care. you constant genuine your to associates commitment all of thank So for to

occupancy fourth revenues driven This our rental average of year-over-year higher in of detail. quarter, now quarter. walk through due was core increase I'll year-over-year you Same-store rate fourth Same-store X.X% of property by vacancy other XX% a average the and in increase result XX.X% income, XX a turnover. as results increased points in net in to operating grew basis X.X% was the down more growth resident recoveries. monthly

tax For XXXX, fourth core the revenue X%. full-year Same-store quarter. The by property this growth the same-store of expense. year-over-year our XX.X% XX.X% grew in expenses increase in driver was an main grew

higher increase our indicated and tax property our in to related few homes this be the quarter primarily Georgia. bills a Florida catch-up ago, property due fourth outsized months tax was anticipated As a to accrual in in to to

property X.X%, to higher by XXXX including while up the operating this taxes, environment were quarter fourth Outside the For X.X%. the was in tax full-year property expenses. the expense contributor count, largest grew expense of operating inflationary core for full-year core growth XXXX,

two row growth virtually XXXX NOI will up X.X%. brought Finishing fourth see our our in year-over-year, operating some growth expectation Following that results, X.X%, of growth we year's years into full-year we no XXXX. a pressure of reported expense with to inflationary continue our NOI last of which same-store quarter

trends X.X% comprised new in at growth growth rent new growth blended fourth Same-store X.X% in growth and XX the of with of X.X% at points fourth and is occupancy blended rent January our from rent X.X%. same-store XXXX, results. cover I'll leasing quarter, renewal quarter January basis rent X.X% in leases Next, XXXX. which an and In was coming in fourth was Same-store January of was renewals the of increase of XXXX XX.X%, X.X%. lease quarter

outsized continued where was the within Southern of debt lease revenues. of X% third in in Approximately representing bad stronger anticipated, compliance Southern experienced homes California quarter restrict and California are we continue XX% the portfolio. residential debt specifically, our rental to California, more located As options. Los County, quarter, Angeles ordinances than a within our headwind gross to bad fourth

homes more our offer proud been it markets. in desirable lease quarter. in worry-free to housing the are top new heard space seeing to our surveys, to most though of two For the need some reasons the than portfolio, to of we now process that In markets, markets regular again some why it's our fourth lifestyle resident return our option for and the procedures more once addressing were choose a our all slower we of has residents. our delinquency, us historically Across from desirable residents a and location remainder we're recent for

it's with work surveys a room resident indicate important new least at home to or office a they days of have nearly two week. stating home half bonus XX% from

to our remain of for healthy income approximately new X.X income representing an at average household addition, during $XXX,XXX, ratio In rent residents XXXX times.

nearly extend make strong three as resident have the demonstrate this I Finally, possible. our are here of teams occupancy, with to satisfaction high and in continue And all raise teams our bar I length helped of service years who low residents our to to satisfaction average high continued associates by providing stay turnover, scores. our my XXXX. the to our thanks challenge evidenced

turn our Ernie, now Chief call I'll over the Financial to Officer.

Ernie Freedman

and the sheet you, results two, I three, Thank topics: This quarter; capital morning, yesterday's XXXX will the release. balance we markets following fourth in and activity; Charles. introduced our guidance, one, cover for earnings which financial

on balance have our Since transitioning sheet ladder, leverage, improving an a and fixed focused that been to unsecured our IPO capitalized rates. debt is in achieving our mostly maturity XXXX, with investment-grade we rating overall at reducing

progress objectives. across made significant have of these We all

net times. at X.X At year-end to adjusted debt EBITDA XXXX, stood

until year-end representing have to X.X in unsecured no We unencumbered, the spring investment-grade rating with and were was available average debt we homes gross XX.X% fixed our Over at of options, our debt maturity book XX% rate. XX% less rate XXXX. weighted over of of or XXXX, and XXXX. our of than fixed was Our due swapped when estate. real And years, of XX% our secured debt debt of our value achieved coming considering was extension

undrawn ended closed feature As during our June portion term billion quarter, the We prepaid cash. with and fourth previously our revolver loan we using the IH the of year the liquidity XXXX. our announced, in delayed both unrestricted XXXX-X that securitization of from $X.X of remaining draw unsecured seven-year

share. results. the for quarter per FFO share, per I'll full-year and now XX.X% increased quarter cover $X.XX XXXX fourth $X.XX Core financial increased our AFFO and X.X% year-over-year fourth to to

the the we of release, guidance. the each XXXX AFFO and per share For earnings XX.X% XXXX, our share midpoint per XXXX guidance. respectively, of in and core $X.XX bridge from to core core a $X.XX, per increased full-year to and our share FFO provided exceeding FFO Included FFO XX.X% midpoint

lower are points core average our With elevated occupancy first, guidance metrics, expect higher of X.XX% to same-store the bad regards to a our in Embedded XX XXXX. range higher due in operating than debt we to XX to X.XX%. revenue basis assumptions: same-store and versus following slightly anticipated of growth second, turnover; XXXX

Next, expect to assumption X.X% to improvement estate we same-store will core in guidance from X.X%, of this X.X% range is the between expense X.X%. in XXXX. growth, which the increase real Included taxes an that

also turnover, of assumption We capital expense, around operating with our pressure XXXX, turnover along pressures. higher and expect in due to to on our see inflationary mainly ongoing assumption

our three the underaccrued first estate real XXXX of was for As Charles mentioned, XXXX. expense tax quarters in

an outsized recorded fourth XXXX. we So in quarter catch-up the of

As for XXXX improvement resulting of followed we for the range growth a the in same-store by expense the anticipate in during expected XXXX mid-teens result, sequential first the of core the quarter XXXX. remainder the full-year year,

expectation our for NOI this to growth same-store together, Taken to X.X% X.X%. brings

and in range per share $X.XX $X.XX. to to per $X.XX We of in of share expect range the also to FFO XXXX AFFO full-year be $X.XX core the

of in increase by XXXX, As Board Directors per an a in AFFO dividend share. in of result per share $X.XX growth authorized our XX.X% quarterly to this our has anticipated

assumes million guidance to This our joint includes from partners, Our plan free to on-balance our we our flow acquisitions through of $XXX also proceeds. $XXX million. for fund modest. expectation will cash that includes of $XXX our to and disposition builder XXXX for million acquisitions million acquisitions $XXX sheet ventures initial which in expectation our It be

progresses. how be our this our us excellent providing powder access offering well approach are Outside dry maintain we're to shape, the our to of positioned growth us additional opportunities with this an in acquisition assumption, our of the with the based liquidity guidance sheet of balance and to activity capital, plenty buying capital actual ventures as will year on cost relative ample joint attractive flexibility year. external our to opportunistic With

for echoing hard and They residents up homes. Charles' in continually Dallas' to our wrap results to work and care gratitude deliver our I'll strong by to our associates. respectfully

success demand our desire As ahead, based remain balance to on our we home sheet, supply confident we favorable premier look leasing. unwavering commitment are and healthy choice our and our our service, resident team in continued outstanding fundamentals, to in strong the

operator, questions. open that, for line the please With

Operator

you. Thank

We question Bank phone session. lines Please the of the have begin Josh will We [Operator question-and-answer first America. Instructions] on from go of now the ahead. Dennerlein

Josh Dennerlein

Yes. thanks guys, for question. Hey the

of it Just kind like XX% of FFO looks AFFO guide midpoint your midpoint it's FFO. about thinking of guide, with the kind

What few that; XX% it kind I think it smaller it was of gap. at Kind -- a before shrunk was for driving lower of actuals. XXXX the but looks what's it like last given running years? that, maybe would have turnover

Ernie Freedman

Josh, Yes, is this Ernie.

Charles -- with turnover pressures alluded seeing are We expenses. about it and and on talked to regards inflationary to it

so replacement is be the capital And AFFO our and spending. FFO between to going difference

numbers. the make into our our as capital seeing And of amount are caution and the on more built beginning on our had want year, we We side on a of expenses maintenance little both right repairs well as turn pressure expenses. the at to the we sure

what hopefully you've the year hope cost maintain that's that. closer years. have we basically the and into you you'll the off of us we get years, core We're the pressures. CapEx turnover, numbers of higher for couple changed a terms of projecting inflationary do -- XXXX. in a XXXX seen ourselves to in between XXXX higher and set for and couple differences we in turnover But have back So a Maybe high to bit. expect see certainly net OpEx last to we past running to from XXXX, That's performance XXXX AFFO. And out good bit later a the versus increase -- to and for why FFO flattish revert we're last what is specifically in the combined can for as up of XXXX saw over in little for on

Josh Dennerlein

Thanks, Ernie. that. Appreciate

Ernie Freedman

Thanks, Josh.

Operator

Citi. of Joseph Nicholas have now We

Your line is open.

Nicholas Joseph

Thank And and to JV you're available cap elaborate acquisition can the rates was market trends more properties. are you you. environment? hearing this your in in a current partners their capital on I of you hoping deploy acquisition seeing what on from bit terms in appetite then the

Dallas Tanner

Dallas. Nick, Yes.

I'll first, a little question then seeing real me about bit what talk your we're time. Let second in and answer

our capital. continue ways to plenty appetite JV there's to compelling grow with think I and to invest partners of find

I know well, the to the case. think -- I be that

tight. would things a I from I perspective think what add are is supply still relatively

If year were you back we in kind rate ago, a from to the mid-Xs go to a low of kind cap buying of perspective.

kind environment, I maybe XX of is that think kind seen we've resale basis XX X.X mid-X-ish like-kind the of a ground kind market, points the for of on X.X, in product. or move

we've three inventory also the said, there's least that seen years. supply amount in of last four the in Now that market being the to resale

fewer really to bit with we're both things return The but the newer builders, So environment, be be those moment. to we're in think and conversations profile and lean uncertain I better. out far a are. having going I on from that sort builder are to angst coming taking given there's to of is going rates side a more seems a not be, interesting think, perspective, just that -- build it's the interest stuff between, fewer things little where delivery But an online,

equal, amount So the in being all year. of kind that throughout a to tremendous of interested opportunity time. But of things not moderate capital expect we investing, real plenty

rates. we I see got think to happens what mortgage with

mortgage think in [X.XX] able as were of been XX-year the rates basically stay yesterday, competitive near-term. to think I to have (ph) was closer down number. to there a And pretty I like builders a buy

there. happens see Let's what

the by I over mortgage to think creep opportunity, that's and year resale of impacted going definitely we rates the up. we're labor then watch if market. And Operator? an may have hopefully, how more supply

Scott McLaughlin

please. question, our Operator, next

Operator

We question KeyBanc of Austin now the Wurschmidt from Markets. next Capital have

Austin Wurschmidt

an sort just provide markets of was ground you seeing on update of that I of the and of your you whether what everybody. giving little in a curious if morning, there's anything you're good more bit pause any could Hey, has year? kind the this this of year into last late through year. taking conservative how And balance market of have of rents then the of update kind part on just from a outlook trended early you a quick maybe

Charles Young

Yes, Thanks the we're what Yes, for this on ground like now. the Charles. question. right seeing we is

a of QX year. of kind we bit that we to seasonality results the curve. saw showed normal last Our middle the And expected, as that back towards got of

of really kind XX% -- and During it COVID, was across rent board the growth. we high

we're still the time is the reality So year. given of But it's really what more of strong seasonality. it seeing

occupancy, at the looking So QX at XX.X% throughout increased that quarter.

and ended we XX.X% January December at So came into XX.X%.

showing demand strong seeing ground. that So we're the on real

we As in at look new at and a rates blended X.X% QX, renewal X.X%. at X.X%,

with growth is expect a going starts typically December is that on with the think here in the Couple that, strong rent little and X.X% renewal the seasonality, Super we really would be January really which side, XX.X% occupancy new well season, right you As will portfolio historically. lease but given and lower, a Bowl. the into peak January after X.X% positioned

And side. February on some lease we're the in new acceleration seeing

board, like, it's the of had some the across it's the seasonality, momentum. seasonality There's we're but Arizona in Denver strength of in but starting a and more to the the a show bit Chicago markets, a our real and with slowdown Florida looking So markets. colder lot good. still seeing

good the portfolio board. some stuff is about seeing structured. across the leaning And we're and feel we're good where So

Operator

Capital from next the Markets. We you. RBC Heffern from question Brad have now Thank

Your line is open. now

Brad Heffern

guidance Ernie, far as everyone. sort earn-in, could morning, moving you lease, to occupancy, the as pieces walk good loss get there? through all buildup you the to revenue of Hey, that the

Ernie Freedman

sure. Yes,

as expect Brad. and as the of -- couple the release, about items, the At of range, bit talk a -- So in year-over-year. earnings with kind well guidance, the we about talked do I'll the a in midpoint we little in down of midpoint the Brad, of guidance remarks prepared our one

I XX.X%. think in XXXX, we're we're at XX.X%,

do the to bit going come about talked with going that's that that's little turnover of And to see finally think to has the why bit. fact with a to make higher. residents, more It a to able been occupancy current we're think come some on rents. haven't little in to I down we down. do tick as up to you're expect We and we be as keeping turnover going some, terms well is who mostly progress --

basis the The facing be on that other the bad do exposure up -- XXXX. mover there regards points of us that lot on a with folks where other material revenues -- other debt. basis We XX side thing in growth from to it challenges who to is was are certainly out negative the anywhere be for And going for Southern we're bad is expect to XX to have going debt California. points and between

midpoint better year a us the little XXXX. getting -- roughly So where we for going to bit of we we do in year. X% a that elevated first be half in And We about half about for can at at see that's little think for the the came in XXXX. of path more X.X% second we start bit the do a the

is thing the activity lease about year, We XXXX, see done as that fourth to where be to fourth and we year the third at did think that to to going in at earn-in quarter. the the continue low expect was make year X%. to quarter. lease we of of about shrink from X% ancillary it that end the with the income from our in significantly again going talked was into on -- it about up didn't into where the was was what progress income it And change X% it double-digits, it loss loss the earn-in end is we other got rates, the to the quarter, The on our I'd items. last two our as call, our And say, last be we similar last pieces income. other are to finally, with The other important we our

rental Charles that talked it, just seasonal catch activity. a single-family we was -- to reasons, you'll couple is We two, actually and Brad. for different year, decrease residential some sequential started patterns of One a business, saw rate. about the folks typical And a up declines month-over-month for in typical that we're than to and in leasing see you But seasonal no in that.

of Now We didn't we that didn't XXXX, back. come XXXX. in much really But in see that it see did in ‘XX.

so September to December was. from some declines sequential where with we to November to And did went as rate to see October regards we overall

those brought why lease things that's down. loss have of combination to so the two And

If we you going optimistic get little certainly to have how going bit that past our into have hard to try ground consideration activity will want have you out. take the in overdelivered, and guidance in range to is that just to had plays renewal look we're the this to year all We to around core see expectations do and year. an But what our feel hopefully, maybe beginning that go where like revenues in we the for to the And leasing that like we'll underpromised a we where year XXXX, we've have had we out. sure we do of right same-store to new regards set we we at but and provided with opportunity a and make way that. better, thought the

Operator

with We now have Choe Suisse. Sam Credit

is line Your open.

Sam Choe

Hi, guys.

wondering peak on concessions and leasing thoughts during general might what your could was an utilizing look update you Just provide that if like on season.

Charles Young

Yes.

concessions no running have We all. at

see December, had But the of the year, given as no we time and saw we That's a last concessions we're that in occupancy to come run we seeing that our need holiday push seasonal to back. short-term seasonality the we talked of curve. now. we occupancy think had any kind the going as demand up about right small that and concessions, into we I call, do try on it, of typical current don't on to our given

Operator

Sakwa have ISI. Evercore with Thank now you. We Steve

Steve Sakwa

thanks. have a morning. that a in I unfolded. relationships. they're those sales more facing you builder Dallas, And commitment Yes, how more just from just I maybe the could comment know down of challenges given actual and homes wondering here on the offering if Good home was take bit didn't to little sales, if in bigger and them you to discussions the bulk was some

Dallas Tanner

strategic everybody homes our a a with partner, about and with across X,XXX we familiar pipeline of, a of now XX with five like Steve, They've team. partners. to them. Pulte. our been nationally build contract builder opportunities. We'd have regionally kind variety right we're they that And first structure have is of at all, sits with to different as today Obviously, our great with many in terrific working and homes builders,

It's Steve. interesting, of -- of sort summer kind of rate. of was to going there We last with year into unknowns happen a was lot what around going volatility

I of the think well side really before, do most discount what pricing the having mentioned builders, as too I and seen we've without kind navigate to things is mortgage payment of much.

market. as think a much quarter-end it's and There's that a Invitation opportunity building to pipeline had will across longer in some view I tell, stuff the certainly will kind out small on that I Homes terms good portfolio. for things very continue But of we've our labor opportunities. slow time come down, wider If construction where into of and largely would purpose-built dependent what with happens

kind of full of We first our some communities. coming are out with ground of now the

are demand, with in And the of week in fact. one top not but product, Atlanta, the the last as really. profile return very pleased of touring quality funnels We Charles and only the mentioned,

grow would think, So we're viewed going into slow as if going that Steve, I partners. be, enhance things and find pipeline look those that to a to do also opportunistically down, would thing and And SFR. preferred things ways ‘XX programmatically be to for our with good our obviously, relationships, approach more that

at as got like mentioned us. forward. will as And invest it that depend to as look can plenty those we of, Now going on would like sheet. balance on to the I But before, how we pay third-party we've opportunities for also with things capital we'd accretively these

Operator

Markets. Thank have Juan you. from We now BMO Capital Sanabria

open. is line Your

Juan Sanabria

thanks. Hi,

side question, Just rate on guess, equation for I just guidance. of ‘XX the the same-store revenue maybe a Ernie, for

to Just lease. single given to should sticky to on we how for ’XX. the course expect how Do could -- curious comment your expect you think high the stay in you across well? if you maybe they that can of Or rent around And pretty as trend, loss the ‘XX? should assumed digits should renewals moderate moderating growth market portfolio we

Ernie Freedman

I implicit guidance the the for rate, when of be our on in -- in kind growth to walk pieces, and mid-single-digits. through rate that we're blended Yes, Juan, looking is at

are honestly, little on to the side. with last we got bad cautious to our that's most bit we be the that regard a debt probably I to revenue. We by opportunity is able burned think upside best have And year. going

okay I to we're those and think we've two. be there, balance want built but I enough into cautious our probably guidance there that

So renewal continue for elevated the I say that at opportunity to but we year. the the have do think I say at it's on would entire the certainly side, to high-digits levels, hard stay to

I'd the -- extrapolate feel I say more in even range that to strong be So of here would cautious for the we rest our of guidance rest year. little renewal growth and the that up some the high-end higher. throughout January, or about very We year. bit a towards strong But wouldn't be numbers and of the good having put some

for you'd kind digits you that play in if solve But will math and things of pretty for to growth market the and the number a the rate the a market that taking X-year the number There's do have, XXXX. blended we mid-single leases consideration how possibility gets out to that of I is it's designs -- happen. But possible think could if certainly we're strong. the seeing

Operator

Thank now Please Adam you ready Morgan you. of when are Adam. have We ahead go Stanley. Kramer

Adam Kramer

guys pursue. number think to maybe the earlier follow-up that avenue been of question about JVs just Hey, press more of Look, I on you some an I around news an kind kind there's of last would of being want in months JVs.

challenging acquisitions kind fee Obviously, route. of pick in and bit little maybe the XXXX to go or a you environment economics the a Certainly, of desire Wondering change overall. just that willingness the bit could a model. little up for in income

guess, go around to JV So kind yes, just path? the I further down kind generally of willingness of

Dallas Tanner

as shown couple look, Dallas. have a we've We, strategic ventures couple with years, I last Rockpoint is of This a the of willingness. both raised a partner. mean, in

of, bit generation the build then it, call creates we sheet add on opportunities of value in also fee little manager. You're our it and have additional exactly right our terms returns kind REIT that cost it and lot of a the balance off out robust more a service does capital both of to as

to something is And so be we we basis look sheet very much of markets, the love where venture that today's a cost prices current capital to wrong, at the on at will sheet been way as I has our that cost in Obviously, of book balance can. capital invest always and get the is attractive. capital me public Don't not as expect we on balance joint relative capital perspective. discounted the would a that would from

is over think also And that outsized very for business time. a returns. us so lot more shareholders. to longer-term avenues areas. maybe be having particular thing I bit that, a continually allows It third-party niche in we good we partners across the its for couple And our with will deploy a generate We capital that using little can or also flexibility more thinking and our a different strategic company think give of

I So over to joint our to always never explore expect use way venues at time ventures grow to find ability us continue and impact trying would balance balance. like a but sheet and that our that would right it to

Operator

Thank you.

question next Goldman Please comes Sachs. Luthra of from Your go Chandni ahead.

Chandni Luthra

property Thank bit. taking talk little morning. taxes good a about for question. HI, I my to you wanted

certain this make think there real markets guidance in anywhere? there. What's more that assumes on tax idiosyncratic love taxes the thoughts your and increase Anything X%, more specific will estate moderate? improvement XXXX. Would an you will your of growth from going that's that expectation or Are growth the driver basically improvement So behind rate?

Ernie Freedman

the it's about taxes. talk estate Chandni, real to Happy Yes, Ernie.

of on about to reminder call, last off us, Prop which real when about for can as where and think we about everyone the the in the Georgia, you three largest are XX. we want estate you the taxes, that take pay and tax, California, So California think most to table because Florida, a quarter. of we kind our markets talked

always there'll even lower noise like that's going within year-over-year. around be to that appeals So And things some and be California. a rate

Florida, that XX% we're on for There assessments almost last anticipating those bump -- against probably know XX% again in are XX% were piece. XX% of two-thirds bill. being last we're we're be our than up we'll with California do caps combined bills way, year. high better it a another Florida, another being because some last can of we three For math Said Georgia. year, the caps not when how Similar XXXX. Georgia, up think We're as of on But In year. as a one Florida it of tax I year or second position wrong year and tax get your we'll about but not some about with two-thirds relief tax bill. were kind to are in for pushed expecting Florida, in was And much story those high, we with year assessments up folks as back-to-back not before. through in so is there you

for an have that from some tax Maciver on there, again, We smaller pressure revaluations areas do basis, annual some multiyear not be significant basis. will as impactful, do an have think County where Charlotte increases But year. us, other because some see a example prior because bills we we but happen in we they're will it's not

North in the about the tax challenge Again, as material say where bills well. thing tax as as bill to Denver, same Colorado aren't the that is have in well us. Carolina as we'll You

that our on But if because be have might But tax is then it's in rough the impact on surprised it is And material see going for wouldn't bills has player. small, another Texas we did a us finally, year Texas have exposure I us, as others. XXXX. for to large again, in not well. Texas us not

be X.X%. basically what we why to was This in as that's you going Last it pretty out, similar come X.X%. overall, is Chandni the to we So we're year, year. year pointed last X.X% with think to was, guiding that year,

historically better. importantly, in thinking are we case things So high terms it, see appeal of are taxes, people numbers about little do for in I wins. a a path really very in think might us, And much baked then with but that bit those get still we really haven't

we'll if how appeal Those we need end certainly the hard in see range But wins, So see our very out. material we've just to to appeal have us guidance. some our don't of could the get to are to us plays provided that get to material range. help predict, wins to that we but that have do lower

Operator

Thank you. We now have Keegan Carl with Wolfe Research.

line open, is Your Keegan.

Keegan Carl

Hey, thanks, guys.

But percent growth for you breakout as us go. expectations know a breakout on G&A as if property and the little management between I you your growth, more far gave could give curious ’XX? I'm just bit So shares

Ernie Freedman

guidance We And at Yes. the schedule, line the -- look expense thought supplemental about our pointed from $X.XX. had of that we FFO -- would we on walk noted in midpoint XXXX management that we you out of if our XXXX. in the a gave property to grow

for million, the in $XX our is us, million. our A $XX that's about venture. So of continued of is investment lot growth technology joint platform. continued of the that that Part

property we get with more of joint have because as So of our ventures from homes. income management offsetting expense management we number regards to that property fees, a

we some top just on inflationary pressures. that, have then of And

of a XXXX. little bit the understaffed ran We first also in part

XXXX. growth but the to filling specifically this property regards with And management I in separate in it's how were play. that And We'll year. from a be that. see P&L, we're on see main out But think we'll break little are more management the going of to a those property lot G&A. assuming bit of a factors do to our side, terms on challenged we more positions, proportionate more of full headcount comes and with organizations that

look closer growth, to came to more side growth going year and to in ‘XX, property G&A a had compared versus relatively XXXX property If was line. ‘XX you XXXX, little the be bit G&A management. management the we but the This at most items even from in those combined on flat, of to it's being

Operator

Thank Batory you. of Tyler now We have Oppenheimer.

is now open. line Your

Tyler Batory

Thank you. morning. Good

on clear due much turnover? the of a the to How that, much look be of I drivers to inflation? same-store that cost to of just How this bit tie taxes, I just growth just quite general property cost is OpEx, higher of So on we things, loop want I operating is when that on want mean, to there. topic. side really of the at just ex due

at, to in been the difficult I would change get always And model think that your was really, business of structural what cost concern structure? a to scale. has with be there it there I'm trying a terms

your of some business that the in and age So I'm indication economies of size of not just sure if perhaps your homes? scale this maybe creeping given outlook here just some your model,

Ernie Freedman

as not appreciate if have of we're the the seeing I well. the with other that concerns no, because having people you answer you Ernie. asking from concern any it’s that have size Tyler, And concern, dissynergies might organization. is

the we're than that's midpoint. I but X% us. real we're you're to at guiding about little a estate about but which to overall bit certainly taxes of Overall, out through midpoint, I a right some expenses. number is walk helping half the to more think details, our can at X.X% we're guiding that's of be the that point guiding up overall,

So that little means everything more. else is going up a bit

based in walk at right material transitory through that, the details, in where the more I'll we're the now items just think we most I are and you through believe of go on of the some I'll insurance So but here circumstances our surprised marketplace. costs. was weeks. renewal going about is I but One there. certainly rates property anyone are think in don't finish go others, hearing, insurance to up. in three environment items the We'll

years, on have X% don't next only about last or about year, the we year. combined property went or final that. So the X% up X%. X% the one in numbers insurance It X% But two our was

better the did much residential. broader we So than

XXXX, the don't would going up insurance of up issue. insurance if issue. to reinsurance think increases. permanent that way much I go as go happened insurance We year, surprised events good onetime a a the We those up. this going our of because that's property kind costs insurance low cost bring think in treaties course, and rates the are certainly, that's with XX% overall up XX%, double-digits, somewhere we're the costs lines, to which of other on not wouldn't news be seeing as into But

inflationary subside in there couple material get are and pressures. environment think around a there. things but One, more are for will XXXX, we're inflationary us, XXXX an are as We of still with turnover. Tyler, do those you turnover. that ones into And really later The

going is really opportunity because up. see to think for to to that going people homes. are items rental moving One, in to is we things. And go we not we're with XXXX in we been residents more activity we turnover have XXXX two think expect there good had paying payments, than better making rent, delinquent think have Turnover -- a out going other out we do in the point important a The turnover that's thing. who in

think to a into that reason. item we as Southern out so we itself And California. later work of of and bit transitory for go XXXX up little think We of because XXXX a in and is more that's get going turnover do maybe hangover

as are call other in though, who our those in alluded and us maintenance been our they just requests don't houses in residents The item, longer. repair service typically to they've to, don't in rent. do allow keeping work. current Often, They to as is I residents, often come their

turn, expensive as to are more And homes, so a when turns regular regular materially we our XX% as XX% to on average do sometimes the than much in those turn. turns way more than those on go

paying we're of are XXXX growth dealing not a XXXX event. they as having more turn, in per been the in think our it's terms away Tyler, that cost that rate those It with we much goes in past. have have more seen been again treating we've the houses than have -- So residents, of rents, higher way the a the and

thoughts think think be. long-term about with is expense to about issue don't the -- an we if that's what So going growth you

time. property going that's normalized a will as will and we more real-quickly, rates We more ‘XX back to normalized over ‘XX growth get rate summarizing think up us period So a turnover taxes certainly to We forward. into think for specific of the we We forward. revert of issue. think get going more next go

very or long where going And that all turns for that put on just that should inflation us that back within the bit path pressures type should a because time, was a less we deflationary a And of then of little you inflation. to return, which us over from be I than saw the time growth we're to, alluded expense doing. had some cost see actually

Operator

We Green Pawlowski Thank of John Street. have you. now

John Pawlowski

a you're on in of the the lot expense push are just Maybe line just cost some costs of continuing of rents, inflation like It that on going inflation of line lot not of up to baking Thanks. and items feels because a thought. these ownership.

lease So you guidance? on growth Charles, seeing seeing in canary what as implied new in whatever, cracks the demand? in coal markets potential Where are going seems the mine are you to the for ground X%, to, which be

Charles Young

Yes.

has good when the Minnesotas. markets As traditional the we not real-strong. been the us. to back in Florida upside talked the we're seeing And side, we us, today. But they're given the our year, last the material here still Denvers, colder slowdown seasonality -- in a a started Chicagos. at looking new about Historically, lease structure earlier, to of on opportunity occupancy kind of strong of where see to like there's And really an is for bit or came generally, Ernie's But demand. portfolio point, was again,

historically, and for January high we like the Our we're that really occupancy acceleration running seeing. is

bounce lot that There don't period, been I Phoenix we're markets have of was see but well. really back short that performing a have any I supply slowed there So see concern. seeing down. markets quickly. that for a

that anything seeing concerned. has us not I'm So

I historical think to we're getting rates. back our

turnover push you're there's high think will the summer up. pre-COVID, back If across going it and be you And that's see where see going new we're demand, going I lease go where to the board. is to to seasonally to

than little a perform will markets others. Some better

footprint and then going you we're QX moderate January. Xs in and nice But side a scenario typical the for where at seasonality by going That's It's of our more in new bit the it's little get given out the kind side, in into we you as out, the further on us Ernie. get markets. pretty and do on steady. and We're given great renewal get will renewal be -- in loss We be QX, seasonal we'll think here historical the to And the balance. you to XX a a steady, get lease think steady side. to that I it's slowdown QX, laid our lease think holding

Operator

of We Dennis now you. Thank McGill Zelman. have

now Your open. line is

Dennis McGill

go I to hoping Ernie, you. Thank loss back you to just that can lease comment. was

said there's you was XX, I think think there. of And maybe quarter, I two. last a one to it it was couple and factors

what's with realizing going You market it on is some some it, rents. you're of seasonality then and of mentioned or just

quarter, do turnover you maybe wondering market given that the what versus in think much there's is realized? you how if much of could Just not that out was split fourth as you've I

Ernie Freedman

they Dennis, happening a to with say back in where But starting talked as sooner. to Yes. where that one-third, little activity, about looked we were what to were -- its work stronger where to season, it already we from And starts typically were the earn season off a rate in leasing drop do in rough-rough, saw was of bit in rough-rough we of think August, when way at We've we probably able able it, the about terms we versus into numbers a quarter. market two-third, our in and some declines Charles earn did about up ended was third Dennis, of I was into see XXXX what's we certainly it, to where I'd up third but September market continue December. probably of in seen

Dennis McGill

that And that end the is that or X% of to year is number, January? of X% is end

Ernie Freedman

December be would XXst. That

Dennis McGill

thank Okay, you.

Ernie Freedman

Yes.

Operator

have of now Powell Anthony Barclays. Thank you. We

audio is go you not we the locally, are line. please ready. Your line your going Hello, unmuted check when is you Anthony from Please line are open. ahead could any

to of on next We move Rahmani questioner. the KBW. We'll have Jade now

Jade Rahmani

but your of much. Can comments properties are thoughts levels seeing helpful. nearly single-family mainly would record market. Thank both I to But to new homebuilder Generally infill back, supply? What of X% you're maybe as every on the speaking, rent. there you from concentrated be rent Phoenix pretty XX% you're you build Thank think locations, with existing home terms supplies allocating having as for you supply? about bounced there's their in well made some new expecting multifamily of I very what And you still generally comment towards production you. in having sourced from expected know

Dallas Tanner

to Yes. Thanks, Jade. to free anything And this. Charles can add feel

kind, a you're -- the SFR the more -- how even a I on we few of square about think I think be I attractive per going talked of in on pressure different some I think likely in, markets. foot much to release, our But terms right, side, think basis you've rents differential seen multifamily multifamily. we multifamily there's in are than

the about is we've Ernie and so Charles and markets bit the surprised takeaway what to pressure have But SFR. be seen The go They're little seems of shared somebody's demand on kind forecasting that's -- just other new we not lease that -- SFR up. like a we've decision the picking thing it of a our pleasantly last X.X% side. we January to are numbers in is markets suggesting hope were in from some the XX multifamily according bit that a I bit growth outweighing a conversation had call far been proposition It a the people markets. than a and here it I the There little summer grew deceleration Burns, that is with of XXXX. most anything point at follow, seeing in little Charles' year. across in to seeing would add data of look, just going pickup was into where seasonality But are actually to

that evolve, week this been Phoenix. build-to-rent interesting last it, the market of I On toured of Jade. side really it's watch in to a bunch

in than all this some shapes stuff of car comes further you different. of some It out little sizes. would And and what is you bit spent it's if with us. time And a our portfolio think in the

kind you Some where of few is wall Gemini-type it or of share more common split have of of a and plans a things. other your product stack townhomes of kind of kind floor

And also detached then of some the SFR piece. is it

value I So I and townhome piece, think a less detached the proposition from amenities. with perspective about worry SFR

there's those if see that premium additive paying of value is attention a types or delivery. with expected are to a We

not seeing that anything our directly business. we're is far, impacting So

I have XX infill going amongst just lastly, to years of the And a and us, we perspective being but lot in the day rental much to length neighbors of back that purpose-built a of fee home simple as both a we sure portfolio rate make that been for ownership. perspective bigger of best on from how carried a built and the the stay. able That has a marketplace attracting focus are make our ago on made we living reminder, duration, we've some think, sure also the

our over push seeing almost I longer, and with to -- experience with the proposition think to I've all probably four both business. a But lot some bit a little been I is it. lately of a this People value to a now close markets. of of just of think speaks most years. years staying are stay a product, a location, good COVID for-lease and the our gets California, in impressed it three tailwind we're our length

Operator

St. from now question the Thank have next you. Haendel We

are Juste Please go ahead you of Mizuho. when ready.

Barry Lu

Haendel on St. for Barry Hey, guys. It's Lu

Are Juste. likelihood for had or recoveries those success Thanks on the appeal question. for taking question any seeing just of and process material George in quick my I you Florida. a markets?

Ernie Freedman

having actually while. bit to not. is. definitely there have take a both they're material be it see -- just little take Georgia process can a whether a likelihood some or There's can little We'll process of The success. Oh, will

we is appealed As a when doing to fair more what to a Georgia. we've little appealed reminder, past more. years done than ever it maybe we and Florida, regime assessments. we in bit comes relatively in similar have a Florida

didn't have terms number success a happens in a in so there's but material in rate put And material not -- what Florida. we to appeals of going may of

appealed think is we more are largest us came be especially based where I Georgia, saw we've on for third out to opportunity our certainly, So in and the state. assessments going which bigger where

and plays So terms in see have we'll of wait that how just to out.

Operator

the BTIG. are question Michael now when you have you. Michael. Gorman Thank ahead, of go from ready, We next Please

Michael Gorman

to spend just side the market Ernie, minute the morning. -- other could XX the Good on with XX think driving exposure the do economic related thanks. Yes, that I there of that's side debt XX to another are Southern California. I behind their of or you on And Is rent? to tenants is basis to only the equation? geographies? making pressures on bad that's regulatory how then it who harder points softening that versus those potential much deal get mentioned

Ernie Freedman

those because majority Southern to we increase vast markets, and we expect things. same little are or the most with is in of the We to California. are were have actually other been where certainly them majority good But they bit to the a where -- because about we do deal XXXX, Yes, we're and The -- they've markets the from be be performing of in question. historically. of other markets able along and where further want improve higher

well. is So the but majority Southern of sprinkled other is coming from as the concern California, it in places some

-- not show today's where the anything the environment say with not courts, all, We're and to regulatory working almost I'd markets with in working local to numbers, change. regards to the anything some with pools something entirely not seeing due the in it's And do propensity would if XX forward a need things projecting to bad from environment us just perspective we tell are at. more and different the last in debt to months, or overall anything that where

Operator

We Tsai you. Linda Thank now have of Jefferies.

now is open. line Your

Linda Tsai

Is case what with for you you expectations deterioration? are do base of the it today? Or of kind assume forecasting guidance? ‘XX Hi, unemployment flat

Ernie Freedman

similar Yes, I'll be Linda, tell months. it's assuming last -- we've kind we're of what seen environment we're we're -- XX you, to that's an for the going not is

it's our so material a are where degradation improvement. improve forecasting or a midpoint are where unemployment hard from degradation that So significant would It We're we're of at they be a are. for today guidance where expecting the not also they not low. numbers

to of much guidance And do or have good with Charles feeling we the course, is. get some as we our as talked then somewhat where we early the in lower but rate of occupancy ranges range. regards days, market, we're able our pretty because numbers that that if labor occupancy challenges But push our captured to capture of fact with end aren't the as want would about,

But -- And other of of unemployment, market, well now. whether maybe a whether our implies. than we're little guidance it's certainly just all the do overall, assuming we're looking we're it's opportunity type overall kind to and be an kind seeing on rate better similar and that going to macros at right

Operator

Thank We ahead, now are of go Paolone Please have ready. when you. Tony JPMorgan. you

Tony Paolone

Thank you.

than You've run homes Invitation you've to talked the more Homes built materially past the own. XX,XXX in you currently that

your turn just external a do buy? think I'm just the of in wondering, to capital -- meaningful the is prices it of gating want going be on front the back and don't you come you cost? so really selectivity are way? Like what want And to Or you down, it in biggest what's factor are Is growth to that? to more what

Dallas Tanner

It's not think fast the of rate started significantly we Fed there's unknowns buying of April the worried down more as Tony, to I because or last latter. our -- it year were did. was a lot as moving the mean, in May we latter, of when started slow I -- terms in

that home prices opportunity huge say months a the I Now It's and later, that horizon. gloom we doom happy all think really set. on is we're the would to degradation haven't seen there in suggest nine

less balance able was have the with environment resale capital We over were is stock how of supply see a of uncertainty time an today's cost an kind pretty had In own not supply. the currently to capital in our we that where We're years kind pleased really we we of sheet where Remember, attractive. in scale environment, now. market trading. you right even view of build and on significant

local regulatory lastly, builders and see little And a restriction. cautious, we there's more being

good sounds know. a of side actually for demand guys that thing you It's really the all our Now negative. as business,

degradation in are not of top We seeing any funnel.

the love of call the We our demand want of to product. the In We've fact, both in, and We to a to on to amount grow. Charles of standards underwriting we bullish years the of of grow. resident. really increase Ernie's point tremendous last earlier, seen quality have the we're what prospects obviously the couple it, said for resident over would the

pretty And over capital gotten with good part we've the in large that being are allocator of got we that a scale being think we by of type in have. think prudent I we I marks it time. markets right the

start marketplace. Tony, $X.X to call about we're over build months billion, find We've into product commitment continue made also years. XX, build to so to that But up our side that pipeline. are bring new in we continue ago. to billion in product current partners that can to and And ramp the coming to XX the $X to We to and to more it homebuilding create nature. be find on ways billion, want going opportunistic that a got over with and we we're the ways to one-off going ventures continue strategic $X buy

The their additional M&A interest keeping with for think get we're as hope they that we'll some eye opportunity are, opportunities small be or an consider recapping I costs some where options of of are one I an those will around that operators not. to portfolios opportunities. And look types thing midsized interesting at be to there the and years, going of over couple with think on rate I is being next to

sector, or buy expect And opportunities sits. five I And businesses opportunities would it still the we'll coming portfolios that in currently different to additional consolidation. would is for combination there'll Invitation the Homes expect that today in companies I or see as four of be years. the

a So weird continue a eye have. of to an bit and supply limited But always in as expect us kind the in little marketplace. terms of growth candidly just uncertainty of keep amount to the towards year it's we of been

Operator

Wurschmidt Please Austin go when ready, We Capital of KeyBanc you. you Austin. are now have Markets. ahead, Thank

Austin Wurschmidt

settlement you're evaluating but been and considering about not qui and Yes, be overall the what cost? you has guys ask or about any or potential sort how be follow-up could in hit Just to I whether potential potential update thinking believe lengthy can of taking court mindful, don't you the the on, update order a there are of guess, of this tam I thanks for the latest here. cost wanted that Thanks. just to proceedings, provide? a the

Dallas Tanner

is Austin. Dallas. Thanks, This

It's be what ongoing front in really tam, qui we have really phase. long a discovery as before, relationship the before. process. even side. feel like our good We not we don't at said this we've a the on said to administrative we still side. We're to kind In obviously, of great like, detail I'll facts end legal matters. of First, will comment the say likely on

defend in guys -- we will appropriately. this We when And to reserve no or at The us, new come had if time. right and Street it, you as to obviously update point and there update ourselves we'll the information but

Operator

you. Thank

final have Barclays. the the line Powell on of Anthony question from We

line Your open. is now

Anthony Powell

hear Can me? hello? you Hi,

Dallas Tanner

We you. hear can

Ernie Freedman

can. We

Anthony Powell

thanks. Yes,

the a earlier situation. lot turnover California increasing. bad for times Sorry to your really mentioned other confirm to [Indiscernible]. general Southern of guess really turnover, a that, portfolio. turnover that wanted another was debt increase in I is I and This isolated on not in that's --

Ernie Freedman

paying No, all in residents our certainly markets, haven't still no, it's Southern there's there. Cal, working that more board through because an rent the in we're issue across

board, we're for a the situation in going fact, in because turnover. us the honestly, little take across get of And regulatory to environment. an there, So longer in the California to may see increase

across hopefully of where and kind number, during there. up of clean residents who most environment it's pandemic be the turn going to the as from to we and But of was elevated the the rules continues remainder forward because debt board -- going what it's to So more more difficult of with are. the going to be our to in on Southern California with markets. it's because move it's which be paying being is bad But here with eventually, going aren't

Anthony Powell

rent out, of it's But Is debt up. not not moving to fair? bad more a can increases accepting tenants, due like that clean it. it's just tenants Got and

Ernie Freedman

-- is for always and yes, they've being levels people seeing That retention We're absolutely. been. renewal our accepting increases where

care -- what just taking it's So you of described. it's

Operator

hand for to it you. Tanner I back would Dallas to remarks. closing like Thank his

Dallas Tanner

in joining We a we the And on the Citi forward everybody today. care. us seeing thank everyone conference at look couple of weeks. call for Take to

Operator

conclude lovely now Please today's may you does have day, That joining. call. for your a all you lines. Thank and disconnect

Invitation Homes (INVH) 16 Feb 232022 Q4 Earnings call transcript