Q4 2023 American Homes 4 Rent Earnings Call

Greetings and welcome to the a M H fourth quarter 2023 earnings conference call.

Operator: Greetings and welcome to the AMH fourth quarter 2020 earnings Comp. At this time, all participants are in a listen-only mode.

At this time all participants are in a listen only mode.

Operator: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference, Court. It is now my pleasure to introduce your host, the Director of Investor Relations. Thank you. You may disconnect.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded it is now.

My pleasure to introduce your host Nick from director of Investor Relations. Thank you you may begin.

Christopher Lau: Good morning. Thank you for joining us for our fourth quarter 2023 Earnings Conference. With me today are David Singelyn, Chief Executive Officer; Bryan Smith, Chief Operating Officer; and Chris Lau, Chief Financial Officer. Please be advised that this call may include forward-looking statements. All statements, other than statements of historical fact included in this conference call, are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the FBI.

Nick: Good morning, Thank you for joining us for our fourth quarter 2023 earnings Conference call.

Nick: With me today are David <unk>, Chief Executive Officer, Bryan Smith, Chief operating Officer, and Chris Lau Chief Financial Officer.

Nick: Please be advised that this call may include forward looking statements all statements other than statements of historical facts included in this conference call are forward looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These.

Nick: These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC.

Christopher Lau: All forward-looking statements speak only as of today, February 23rd, 2020. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings release and supplemental information package.

Nick: All forward looking statements speak only as of today February 23 2024.

Nick: We assume no obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise except as required by law.

Nick: A reconciliation of GAAP to non-GAAP financial measures is included in our earnings release and supplemental information package.

Christopher Lau: As a note, our operating and financial results, including GAAP and non-GAAP measures, are fully detailed in our Earnings Release and Supplemental Information Package. You can find these documents, as well as SEC reports and the audio webcast replay of this conference call, on our website at www.amh.com. With that, I will turn the call over to our CEO, David. Thank you, Nick. Good morning, everyone, and thank you for joining us today.

Nick: As a note our operating and financial results, including GAAP and non-GAAP measures are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at Www Dot A&H dotcom.

Nick: With that I will turn the call over to our CEO David King.

David Corak: Thank you Nick.

David Corak: Good morning, everyone and thank you for joining us today.

David Corak: As you may have seen in last Night's press release, I announced my intent to retire at the end of year.

David P. Singelyn: As you may have seen in last night's press release, I announced my intent to retire at the end of the year. It has been an honor to lead this company over the past 12 years, and I cannot be more proud of the leadership team we have in place who are ready to take the reins. I want to congratulate Bryan Smith, our Chief Operating Officer, who has been named to be our next Chief Executive Officer upon my retirement. Bryan is a talented and experienced executive who has driven our business strategy and operations since the beginning. Additionally, we have elevated Chris Lau to the role of Senior Executive Vice President and Chief Financial Officer.

David Corak: Sure.

It has been an honor to lead this company over the past 12 years and I cannot be more proud of the leadership team. We have in place who are who are ready to take the reins.

I want to congratulate Brian Smith, our Chief operating officer, who was named to be our next Chief Executive Officer Upon my retirement.

David Corak: Brian is a talented and experienced executive who has driven our business strategy and operations since the beginning.

David Corak: Additionally, we have elevated Chris Lau to the role of senior Executive Vice President and Chief Financial Officer.

David P. Singelyn: I know with this highly talented management, AMH stands ready to seize the opportunity. Now, I will provide some brief comments before I turn the call over to Bryan. 2023 marks another year of resilience and durable growth at AMA. For the full year, core FFO per share grew nearly 8% driven by sustained long-term rental demand, superior operational execution supported by our strategic initial, and consistent production out of our development program. The single-family rental sector and the AMH platform continue to benefit from supply, demand, and balance. The national housing shortage driven by limited homes for purchase in the open market has created challenging home affordability dynamics for homebuyers.

David Corak: I know with this highly talented management team a M H stands ready to seize the opportunities ahead.

David Corak: Now I will provide some brief comments before I turn the call over to Brian and Chris.

David Corak: 2023 marked another year, a resilient and durable growth at an age where the full year core F. F. O per share grew nearly 8% driven by sustained long term rental demand superior operational execution supported by our strategic initiatives.

Brian: And consistent production out of our development program.

Speaker Change: The single family rental sector and the aim H platform continued to benefit from supply demand imbalances.

Speaker Change: The national housing shortage, driven by limited homes for purchase in the open market has created challenging home affordability dynamics for homebuyers.

David P. Singelyn: AMH is doing its part to solve this housing shortage. We are adding new supply to the market and offering high quality assets and desirable family-friendly locations at a significant discount to the cost of ownership. We are well positioned to deliver consistent results for years to come. On the growth front, our primary growth channel is internally developed homes that are well located, of high quality, and have superior maintenance capex profiles as compared to our legacy portfolio. Having full control of the growth program allows us to dial up or dial down our delivery pace in certain markets to appropriately manage our capital. Our traditional and national builder acquisition channels continue to be largely on pause given our current cost of capital.

E M. H is doing its part to solve this housing shortage.

Speaker Change: We are adding new supply to the market and offering high quality assets and desirable family friendly location at a significant discount to the cost of ownership.

Speaker Change: We are well positioned to deliver consistent results for years to come.

Speaker Change: On the growth front, our primary growth channel is internally developed homes that are well located high quality and have superior maintenance capex profile as compared to our legacy portfolio.

Speaker Change: Having full control of the growth program allows us to dial up or dial down our delivery pace in certain markets to appropriately manage our capital plan.

Our traditional and national builder acquisition channels continued to be largely on pause given our current cost of capital.

David P. Singelyn: When these acquisition opportunities become more attractive, we will be ready to quickly capitalize on and supplement our in-house development delivery. While the acquisition and capital market environments are not conducive to accretive growth from the MLS or National Builder channels, it does continue to be a great time to lean into this position. The single family rental asset class has the unique ability to be managed on an asset by asset level, which provides the ability to recycle capital at attractive economic rates on a personal level.

Speaker Change: When these acquisition opportunities become more attractive we will be ready to quickly capitalize and supplements our in house development deliveries.

Speaker Change: While the acquisition and capital market environments are not conducive to accretive growth on the MLS or national builder channels.

Speaker Change: It does continue to be a great time to lean into dispositions.

The single family rental asset class has the unique ability to be managed on an asset by asset level.

Speaker Change: Which provides the ability to recycle capital at attractive economics.

Speaker Change: On a personal note.

David P. Singelyn: It is bittersweet leaving EMH, where I co-founded the company and had a hand in building the SFR industry and team from top to bottom. But I am proud that AMH is well positioned to continue our success in delivering high-quality housing to our residents and superior returns to our investors. I will see many of you over the next 10 months, but I know after I retire, I will miss the people I work with within and outside the AMH community. I am eternally grateful for those relationships that have been created.

Speaker Change: It is bittersweet, leaving E M H, where I cofounded the company and had a hand in building the yes, if our industry and team from top to bottom.

Speaker Change: I am proud that a M. H is well positioned to continue our success in delivering high quality housing to our residents and superior returns to our investors.

Speaker Change: I will see many of you over the next 10 months, but I know after I retire I will miss the people I work with within and outside the a M. H community I'm eternally grateful for those relationships that have been created.

Speaker Change: And now I will turn the call over to Brian for an update on our operations.

Bryan Smith: And now, I will turn the call over to Bryan for an update on our operation. Thank you, Dave. I'm excited to have the opportunity to be the next CEO of AMA. Over the next 10 months, Dave, Chris, and I will work together to ensure a smooth and seamless transition. Our strategy remains the same.

Brian: Thank you Dave.

Brian: I'm excited to have the opportunity to be the next CEO of M. H.

Brian: Over the next 10 months, Dave Christian I will work together to ensure a smooth and seamless transition.

Brian: Our strategy remains the same.

Bryan Smith: Stability, consistency, and predictability at the center. On a personal note, I want to congratulate Dave on his planned retirement.

Stability consistency and predictability at the center.

On a personal note I want to congratulate Dave on his planned retirement.

Brian: Dave.

Bryan Smith: Thank you for your leadership, your mentorship, and your friendship. I'm honored to follow in your footsteps. 2023 was another great year at AMH, characterized by strong execution from our teams and the full return of seasonality. Demand remains strong as we approach spring leasing. And although some metrics have normalized, we continue to see improvements in key areas, such as website traffic, which was up 11% year over year in the fourth quarter. Moving on to fourth-quarter operating results, the same home average number of occupied days was 96.2%, representing normal seasonal effects and slightly elevated turnover.

Speaker Change: For your leadership.

Speaker Change: Your Metro ship and your friendship.

Speaker Change: I'm honored to follow in your footsteps.

Speaker Change: Only 23 was another great year at aim H characterized by strong execution from our teams and the full return of seasonality.

Speaker Change: Demand remains strong as we approach the spring leasing season.

Speaker Change: And although some metrics have normalized we continue to see improvements in key areas, such as website traffic, which was up 11% year over year in the fourth quarter.

Speaker Change: Moving onto fourth quarter operating results same home average occupied days was 96, 2%.

Speaker Change: Representing normal seasonal effects and slightly elevated turnover.

Bryan Smith: This modest decline in occupancy was balanced by strong fourth quarter new, renewal, and blended rate growth of 4.5%, 6.2%, and 5.7% respectively.

Speaker Change: This modest decline in occupancy was balanced by strong fourth quarter, new renewal and blended rate growth.

Speaker Change: A four 5%.

Speaker Change: Six 2%.

Speaker Change: And five 7% respectively.

Speaker Change: All of this drove five 5% same home core revenue growth for the quarter meeting the midpoint of our full year revenue guide of six 5%.

Bryan Smith: All of this drove 5.5% same-home revenue growth for the quarter, meeting the midpoint of our full-year revenue guide of 6.5%. Turning to Expenses. Fourth quarter core operating expense growth was 4.5%, primarily driven by negative property tax growth due to a true increase in the same period of last year.

Speaker Change: Turning to expenses.

Speaker Change: Fourth quarter core operating expense growth was four 5%.

Speaker Change: Primarily driven by negative property tax growth.

Speaker Change: Due to a true up in the same period of last year.

Speaker Change: For the full year core operating expense growth was nine 1%.

Bryan Smith: For the full year, core operating expense growth was 9.1%, which was slightly below the midpoint of our expectations due to better-than-expected controllable expenses. All of this resulted in 6% and 5.1% same home core NOI growth for the fourth quarter and full year, respectively. Turning to our 2024 outlook, the year is off to a steady start as we head into spring lease. For the month of January, same home, average occupied days was 96%, and new and renewal spreads were 4.3% and 5.7%, respectively.

Speaker Change: Which was slightly below the midpoint of our expectations due to better than expected controllable expenses.

All of this resulted in 6% and five 1% same home core NOI growth for the fourth quarter and full year respectively.

Turning to our 2024 outlets the year's off to a steady start as we head into spring leasing season.

Speaker Change: For the month of January same home average occupied days was 96%.

Speaker Change: And new and renewal spreads were four 3%.

Speaker Change: Five 7% respectively.

Speaker Change: This resulted in blended rate growth of five 3% for the month.

Bryan Smith: This resulted in blended rate growth of 5.3% for the month. On a full year basis, our same home core revenue growth outlook is 4.75% at the midpoint. This is primarily driven by forecasted growth and average monthly realized rent of 5% to 5.5%, which breaks down to an earn-in of approximately 3% from last year's leasing activity and the partial year contribution from the expected 2024 spread in the high 4% area. On the occupancy front, we expect sector demand drivers to continue to fuel sustained occupancy levels in a low 96% area, which continues to be above our long-term average. Looking ahead to core property operating, our 2024 Same Home Expense Growth Outlook of 6.25% at the midpoint reflects another year of elevated property taxes and inflationary impacts specific to our business.

On a full year basis, our same home core revenue growth outlook.

4.75% at the midpoint.

This is primarily driven by forecasted growth and average monthly realized rent of 5% to five 5%.

Which breaks down to and earn and up approximately 3% from last year's leasing activity and the partial year contribution from expected 'twenty 'twenty four spread in the high 4% area.

Speaker Change: On the occupancy front, we expect sector demand drivers to continue to fuel sustained occupancy levels in the low 96% area, which continues to be above our long term average.

Speaker Change: Looking ahead to core property operating expenses are 2024 same home expense growth outlook of $6 two 5% at the midpoint.

Speaker Change: Reflects another year of elevated property taxes, and inflationary impacts specific to our business.

Bryan Smith: Chris will provide more details on the expense components in a moment. But I want to emphasize that overall expenses continue to moderate, and our teams have done a great job keeping controllable expenses in check. Taking the midpoints of our Same Home Revenue and Poor Operating Expense Guide, same home core NOI growth is expected to be 4% in 2024. In closing, I'm very pleased with our position as we start the year. We will continue to focus on operational execution from the core. Continued commitment to providing the best possible resident experience and Responsible Growth from our investment program. With that, I'll turn the call over to Thanks, Bryan. And good morning, everyone.

Speaker Change: Chris will provide more details on the expense components in a moment.

But I want to emphasize the overall expenses continue to moderate and our teams have done a great job keeping controllable expenses in check.

Taking the midpoint of our same home revenue and for operating expense guidance.

Same home core NOI growth is expected to be 4% in 2024.

Speaker Change: In closing I'm very pleased with our position as we start the year.

Speaker Change: We will continue to focus on operational execution from the core.

Speaker Change: Continued commitment to providing the best possible resident experience.

Speaker Change: And responsible growth from our investment programs.

Speaker Change: With that I'll turn the call over to Chris.

Christopher Lau: Thanks, Brian and good morning, everyone.

Christopher Lau: Before I get into my regular updates, I wanted to say thank you to Dave. Dave, I genuinely appreciate your many years of vision and mentorship, and I look forward to helping carry on the AMA. Additionally, I also wanted to say congratulations to Bryan, and I look forward to our next meeting. Now, turning back to my regular updates, I'll cover three areas. First, a brief review of our year-end results. Second, an update on our balance sheet and recent capital markets activity. And third, I'll close with an overview of our 2024 guidance. Beginning with our operating results, we closed out 2023 with another quarter of consistent execution. Net Income Attributable to Common Shareholders of $76.69, or $0.21 per diluted share, and $0.43 of Core FFO per share and unit, representing 8.8% year-over-year growth.

Christopher Lau: Before I get into my regular updates I wanted to say thank you to date.

I genuinely appreciate your many years of vision and Mentorship and I look forward to helping carry on the A&H legacy.

Christopher Lau: Additionally, I also wanted to say congratulations to Brian and I look forward to our next chapter.

Now turning back to my regular updates I'll cover three areas. This morning first a brief review of our year end results second an update on our balance sheet and recent capital markets activity and third I'll close with an overview of our 2024 guidance.

Christopher Lau: Beginning with our operating results, we closed out 2023 with another quarter of consistent execution.

Christopher Lau: Net income attributable to common shareholders of $76 $6 million or 21 cents per diluted share in 43 of course that vote per share and unit, representing eight 8% year over year growth.

Christopher Lau: And for full year 2023, we generated net income attributable to common shareholders of $366.2 million, or $1.01 per diluted share, and $1.66 of core FFO per share and unit, which represents the high end of our most recent 2023 guidance. From an investment standpoint, during the quarter, we delivered 503 total homes from our AMH Development Program. This was comprised of 456 homes and 47 homes delivered to our wholly owned and joint venture portfolios respectively. On a full-year basis, we delivered a total of 2,317 AMH development properties, which was modestly better than the midpoint of our expectations. Outside of development, our traditional and national builder acquisition programs continue to remain largely on pause as we acquired just 25 homes during the pandemic.

Christopher Lau: For full year 2023 we generated net income attributable to common shareholders of $366.2 million or $1.01 per diluted share and $1 66 of course, Apple pressuring unit, which represents the high end of our most recent 2023 guidance range.

Christopher Lau: From an investment standpoint during the quarter, we delivered 503 total homes from our image development program. This was comprised of 456 homes and 47 homes delivered to our wholly owned and joint venture portfolios respectively.

On a full year basis, we delivered a total of 2000 and 317 Amy's development properties, which was modestly better than the midpoint of our expectations outside of development, our traditional and national builder acquisition programs continue to remain largely on pause as we acquired just 25 homes during the quarter.

Christopher Lau: On the dispositions front, we saw another quarter of solid activity selling 241 homes at an average disposition cap rate in the mid 3% area generating $72 $5 million of net proceeds.

Christopher Lau: On the dispositions front, we saw another quarter of solid activity, selling 241 homes at an average disposition cap rate in the mid-3% area, generating $72.5 million in net profit. Next, I'd like to turn to our balance sheet and recent capital activity. At the end of the year, our net debt, including preferred shares, to adjusted EBITDA was 5.4 times. We had $59 million of cash available on the balance sheet, and our $1.25 billion revolving credit facility had a $90 million draw on it.

Christopher Lau: Next I'd like to turn to our balance sheet and recent capital activity at the end of the year, our net debt, including preferred shares to adjusted EBITDA was five four times, we had $59 million of cash available on the balance sheet and our 125 billion revolving credit facility had a $90 million drawn balance. Additionally.

Christopher Lau: Additionally, throughout the fourth quarter and beginning of January, we sold approximately 3.7 million Class A common shares under our ATM program at an average sales price of $36.36. These sales generated total net proceeds of approximately $133 million and will be used to fund a portion of our 2024 capital plan that I'll talk more about in a couple of minutes. Additionally, last month, we opportunistically took advantage of an attractive market window and proudly became the first single-family rental REIT to issue unsecured green bonds. In addition to being an important capital raise, our green bond issuance further highlights our commitment to responsible business practices and sustainable buildings. From an execution standpoint, the transaction was meaningfully oversubscribed by investor demand, which allowed us to drive attractive pricing with an all-in interest rate of 5.5% and upsize the transaction to $600 billion, which will be used to fund a portion of our 2024 capital plan. Thank you to the team for making this transaction possible and helping us set another industry milestone. Next, I'd like to share an overview of our initial 2024 guidance. For full year 2024, we expect core FFO per share and unit of $1.70 to $1.76, which at the midpoint represents year-over-year growth of 4.2%.

Christopher Lau: Additionally, throughout the fourth quarter and beginning of January we sold approximately $3 7 million class a common shares under our ATM program at an average sales price of $36.36.

Christopher Lau: Sales generated total net proceeds of approximately $133 million and will be used to fund a portion of our 2024 capital plan and I'll talk more about in a couple of minutes.

Christopher Lau: <unk> last month, we Opportunistically took advantage of an attractive market window and proudly became the first single family rental REIT to issue unsecured Green bonds. In addition to being an important capital raise our green bond issuance further highlights our commitment to responsible business practices and sustainable building standards.

Christopher Lau: On an execution standpoint, the transaction was meaningfully oversubscribed with investor demand, which allowed us to drive attractive pricing with an all in interest rate of five 5% and upsize the transaction to $600 billion, which will be used to fund a portion of our 2024 capital plan.

Christopher Lau: You to the team for making this transaction possible and helping us set another industry milestone.

Next I'd like to short overview of our initial 2024 guidance for full year 'twenty 'twenty four we expect core <unk> per share and unit of $1 70 to $1 76, which at the midpoint represents year over year growth of four points, 2%.

Christopher Lau: And for the same home portfolio at the midpoint of our expectations contemplate core revenue growth of 475%, which Brian discussed a few minutes ago, along with core property operating expense growth of 6.25% driven by property tax growth in the low 7% area, which as expected is beginning to reflect moderation from the past few years.

Christopher Lau: And for the Same Home Portfolio, at the midpoint, our expectations contemplate core revenue growth of 4.75%, which Bryan discussed a few minutes ago, along with core property operating expense growth of 6.25%, driven by property tax growth in the low 7% area, which, as expected, is beginning to reflect moderation from the past few years, and 5.25% growth on all other, reflecting the general inflationary environment and insurance expense growth in the high single digits In putting together our Same Home Portfolio Revenue and Expense Growth Expectations, we expect 2024 Same Home Core NOI growth of 4% at the mid-point. From an investment standpoint, as we shared last quarter, given the nature of the ongoing capital markets environment, responsible and controlled growth remains a top priority in 2025.

Christopher Lau: And 5.25% growth on all other expenses, reflecting the general inflationary environment and insurance expense growth in the high single digits based on our successful renewal campaign that becomes effective at the end of this month.

Christopher Lau: In putting together our same home portfolio revenue and expense growth expectations. We expect 'twenty 'twenty four same home core NOI growth of 4% at the midpoint from.

From an investment standpoint, as we shared last quarter, given the nature of the ongoing capital markets environment responsible and controlled growth remains a top priority in 2024 with that in mind, we have strategically sized our 'twenty 'twenty four investment programs to remain consistent with last year and expect to deploy between one point.

Christopher Lau: One and $1 $3 billion of total capital in 2024.

Christopher Lau: Adding between 2200 2400 newly constructed <unk> development homes to our wholly owned and joint venture portfolios specifically.

Christopher Lau: Specifically for our wholly owned portfolio at the midpoint of our ranges, we expect to invest approximately $1 billion of image capital consisting of $750 million or 1900 homes added from our development program, along with $250 million combined investment into our wholly owned development pipeline pro rata share of JV.

Christopher Lau: With that in mind, we have strategically sized our 2024 investment programs to remain consistent with last and expect to deploy between $1.1 and $1.3 billion of total capital in 2024, adding between 2,200 and 2,400 newly constructed AMH development homes to our wholly owned and joint venture portfolio. Specifically, for our wholly owned portfolio, at the midpoint of our ranges, we expect to invest approximately $1 billion of AMH capital. Consisting of $750 million, or 1,900 homes, added from our development program, along with $250 million of combined investment into our wholly owned development pipeline or at a share of JV Investments in property-enhancing CapEx. Additionally, as we talked about last year, we have two legacy securitization loans that mature during the fourth quarter of this year. As a reminder, the two securitizations have a combined principal balance of approximately $940 million with an average interest rate of 4.4% and are now freely prepayable without penalty.

Christopher Lau: Investments in property enhancing capex programs.

Christopher Lau: Additionally, as we talked about last year, we have two legacy securitization loans that mature during the fourth quarter of this year.

Christopher Lau: As a reminder, the two securitizations have a combined principal balance of approximately $940 million with an average interest rate of four 4% and our now freely pre payable without penalty.

Christopher Lau: After the success of our January Green Bond offering we recently gave notice to pay off one of our upcoming maturities by the end of the first quarter. In addition to responsibly addressing a portion of this year's maturity schedule. The payoff will unencumber approximately 4500 properties that can now be fully reviewed by our asset management and disposition teams.

With respect to our remaining 2020 for maturity, we expect to Opportunistically monitor the market for refinancing windows and have contemplated a midyear payoff in guidance with that said, we have the ability to be patient and if necessary and comfortably backstopped our remaining 'twenty 'twenty four maturity using our one in a quarter billion dollar revolving credit facility.

Christopher Lau: From an overall capital plan perspective, taking into consideration our investment programs and securitization maturities. We expect total 2020 for image capital needs to approximate $1 $9 billion. We plan to fund through a combination of retained cash flow approximately $4 million to $500 million of recycled capital.

Christopher Lau: After the success of our January green bond offering, we recently gave notice to pay off one of our upcoming maturities by the end of the first quarter. In addition to responsibly addressing a portion of this year's maturity schedule, the payoff will unencumber approximately 4,500 properties that can now be fully reviewed by our asset management and disposition team. With respect to our remaining 2024 maturity, we expect to opportunistically monitor the market for refinancing windows and have contemplated a mid-year payoff in guidance. With that said, we have the ability to be patient and, if necessary, can comfortably backstop our remaining 2024 maturity using our $1.25 billion Revolving Credit System. From an overall capital plan perspective, taking into consideration our investment programs and securitization maturities, we expect total 2024 AMH capital needs to approximate $1.9 billion, which we plan to fund through a combination of retained cash flow, approximately $400 to $500 million of recycled capital from dispositions, and equity capital, including approximately $130 million of the ETM equity net proceeds I talked about earlier.

From dispositions.

Christopher Lau: Equity capital, including approximately $130 million of the ATM equity no net proceeds I talked about earlier.

Christopher Lau: $600 million from last month's Green bond issuance and approximately $500 million of additional capital that we plan to raise for the unsecured bond market over the course of 'twenty 'twenty four or warehouses on a revolving credit facility if needed.

Christopher Lau: Finally, as we also announced this week given the ongoing growth in our business and taxable income our board of Trustees recently approved an 18% increase in our quarterly distribution to <unk> 26 cents per share.

Christopher Lau: Needless to say this is yet another testament to the strength and consistency of our platform as we continue to create value for our shareholders and to this next chapter for Anh.

Speaker Change: And with that thank you again for your time, we will open the call to your questions operator.

Thank you.

Speaker Change: And at this time, well conduct a question and answer session.

Speaker Change: Please note all questioners, please limit yourselves to one question and one follow up question per each time that EQM.

Speaker Change: To ask a question press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Speaker Change: Our first question comes from Juan Sanabria with BMO capital markets. Please state your question.

Juan Sanabria: Hi, Good morning, just just curious if you could talk a little bit about <unk>.

Operator: $600 million from last month's green bond issuance and approximately $500 million of additional capital that we plan to raise through the unsecured bond market over the course of 2024 or stored on a revolving credit facility if needed. Finally, as we've also announced, given the ongoing growth in our business and taxable income, our board of trustees recently approved an 18% increase in our quarterly distribution to $0.26 per share. Needless to say, this is yet another testament to the strength and consistency of our platform as we continue to create value for our shareholders into this next chapter for AMA. And with that, thank you again for your time, and we'll open the call to your questions. Operator? And at this time, we'll conduct our questions- Please note, all questioners should limit themselves to one question and one follow-up question. To ask a question, press star 1 on your remote control.

Juan Sanabria: <unk> trend expectations.

Juan Sanabria: For 2024 assumed in your guidance.

Juan Sanabria: I look historically, the fourth quarter tends to be a bit below the average for the following year given some seasonality. So just curious on some of the puts and takes assumed at the start of the year in your full year guidance for 2024.

Hi, This is Brian Thank you for the question.

As we've talked about before our objective exiting twenty-three was to be in a position of strength on occupancy.

Brian: Good momentum in the January to capitalize on a real increase in demand that we typically see a stand of January into February.

Brian: At the beginning of the year is playing out largely as expected we've seen great acceleration into February.

Brian: We posted some healthy our rate growth numbers in January and expect a little bit of improvement I think in February but for the full year, our expectation on new lease rate growth will be in the low fours and renewal rate growth to be in the 5% area blending into a high four for 2012.

Bryan Smith: An information tone will indicate that your line is in the question area. You may press star 2 if you would like to remove your... If you need speaker equipment, it may be necessary to pick up your handset. One moment, please, while we... Our first question comes from Juan Sanabria with BMO Capital Markets. Hi, good morning. I'm just curious if you could talk a little bit about the leasing trend expectations for 2024 assumed in your guidance. If I look historically, the fourth quarter tends to be a bit below the average for the following year, given some seasonality, so just curious about some of the puts and takes assumed at the start of the year in your full-year guidance for 2024. Hi Juan, this is Bryan.

Brian: Four.

Speaker Change: Great. Thank you and then just if you could talk a little bit about bad debt, how much would be.

Speaker Change: <unk> had a COVID-19 noncompliant.

Speaker Change: Still left and.

Speaker Change: But with the the prior run rate.

Speaker Change: Pre COVID-19 just to get a sense of any maybe potential conservativism in the bad debt assumptions assumed in or built into guidance for 'twenty four.

Speaker Change: Yeah sure morning, one Chris Chris Here, why don't I start and then Brian can fill in some other details of helpful. But you know taking a step back you know what.

Christopher Lau: I'd say that bad debt is really continuing to play out pretty consistent with our expectations. Our fourth quarter is a good example, landing once again in the low 1% area and as we've shared on prior calls our collections and our collection processes are essentially back to normal at this.

Christopher Lau: Thank you for the question. As we talked about before, our objective when leaving 23 was to be in a position of strength on occupancy with good momentum into January to capitalize on that real increase in demand that we typically see at the end of January and beginning of February. The beginning of the year is playing out largely as expected. We've seen great acceleration into February. And we posted some healthy rate growth numbers into January and expect a little bit of improvement, I think, into February. But for the full year, our expectation for new lease rate growth will be in the low fours, and renewal rate growth will be in the 5% area, blending into a high four for 2024. Great, thank you.

Christopher Lau: Point, except that we have a number of municipalities and CT systems across the country, they're still moving a little bit slower than historic norms and that is the piece that continues to really hold bad debt modestly above our long term run rate of call. It 80 to 100 basis points or so.

Christopher Lau: And then you look at at this point, we really havent seen much change from a local court system perspective, since our last update.

Bryan Smith: And then maybe just if you could talk a little bit about bad debt, how much of the kind of COVID noncompliant is still left? What was the prior run rate pre-COVID just to get a sense of any potential conservativism in the bad debt assumptions assumed in or built into guidance for 24? Yeah, sure. More to Juan. Chris, Chris here.

Christopher Lau: And since that is is completely out of our control, we really just can't count on it in guidance, yet and so you know as a result, our outlook contemplates that bad debt remains in the low 1% area or so over the course of this year, but you know look I think we would love to be wrong on that assumption and potentially see some bad.

Christopher Lau: Why don't I start and then Brian can fill in some other details if that's helpful. But you know, taking a step back. I would say that bad debt is really continuing to play out pretty consistently with our expectations. Fourth quarter is a good example, landing once again in the low 1% area. And as we've shared on prior calls, collections and our collection processes are essentially back to normal at this point, except that we have a number of municipalities and court systems across the country that are still moving a little bit slower than historic norms. And that is the piece that continues to really hold bad debt modestly above our long-term run rate of 80 to 100 basis points or so. And then, you know, look, at this point, we really haven't seen much change from a local court system perspective since our last update.

Christopher Lau: That tailwind over the course of this year, we just can't count on it.

Christopher Lau: And then if you'd like some mathematical context here hypothetically, if our bad debt returned to normal on a full year calendar basis that would translate into about you know call. It 30 to 40 basis points of additional same home revenue contribution.

And then one specifically.

Christopher Lau: And the answer to your question on Covid. Our residents that are still gonna houses. We've made really good progress on that the one you can see resolution there is a little bit last I think it's isolated to a couple of different areas Ah Seattle comes to mind.

Christopher Lau: And since that is completely out of our control, we really just can't count on it in guidance yet. And so, you know, as a result, our outlook contemplates that bad debt remains in the low 1% area or so over the course of this year. But, you know, look, I think we would love to be wrong about that assumption and potentially see some bad debt tailwind over the course of this year. We just can't count on it.

Christopher Lau: And as well as parts of Atlanta, but again, it really is tied to the local municipalities and in court systems.

Christopher Lau: Thank you. Our next question comes from Jeff Spector with Bank of America.

Jeff Spector: Great. Thank you and our first congratulations to Dave and Brian.

Jeff Spector: My first question, if we can focus on the January new comparing to your peer your new rate in January came in much stronger can you talk about that a little bit more is it specific markets like what are you. What are you seeing what could you share with us. Thanks.

Christopher Lau: And then if you'd like some mathematical context here, hypothetically, if our bad debt returned to normal on a full year calendar basis, that would translate into about, you know, call it 30 to 40 basis points of additional same-home revenue contribution, and then specifically in the answer to your question about COVID residents that are still in the houses. We've made really good progress on that delinquency resolution. There is a little bit left, but I think it's isolated in a couple of different areas. Seattle comes to mind, as well as parts of Atlanta.

Jeff Spector: Sure. Thank you Jeff This is Bryan.

Bryan Smith: We're taking a very balanced approach to our pricing and the way that we're managing the entire revenue line.

Bryan Smith: But we are very pleased with our January results as I said, we were expecting.

Bryan Smith: Really strong return in demand some of the seasonality that we saw in Q4 continued into into the beginning of January.

Bryan Smith: But we were still able to post some really good new lease rate growth and it's not isolated to any specific markets a little bit of it is a testament to our diversified portfolio.

Bryan Smith: But she was pretty good strength relative to I think some of the other numbers from other residential peers, just pretty good strength across the board.

Christopher Lau: But again, it really is tied to local municipalities and the court system. Thank you. Our next question comes from Jeff Spector with. Great, thank you.

Speaker Change: Thank you maybe one for Dave Dave You know if your if you could talk about maybe a an initiative or something you're most proud of and looking forward to really focusing on over there.

Bryan Smith: And first, congratulations to Dave and Bryan. My first question, if we can focus on the January new, compared to your peers, your new rate in January came in much stronger. Can you talk about that a little bit more? Are you talking about specific markets? Like, what are you seeing?

Coming months until you officially retire a b you know investors are not fully appreciate it. Thank you.

Dave Christian: Well first of all Jeff. Thanks for your kind words at the beginning but you know when I look over the last 10 years, it's been very very rewarding to look back and see the accomplishments of building a company building an industry body.

Bryan Smith: What could you share with us? Thanks? Sure. Thank you, Jeff. This is Bryan.

Bryan Smith: We're taking a very balanced approach to our pricing and the way that we're managing the entire revenue line, but we're very pleased with our January results. As I said, we were expecting a really strong return in demand. However, some of the seasonality that we saw in Q4 continued into the beginning of January.

Speaker Change: At the end of the day, the probably the biggest accomplishment in the biggest reward is is the team that you build the people that are around you.

Speaker Change: Having time and watching their growth and being able to mentor them and see them succeed and you.

Bryan Smith: But we were still able to post some really good new lease rate growth. And it's not isolated to any specific markets. A little bit of it is a testament to our diversified portfolio. But it shows pretty good strength relative to, I think, some of the other numbers from other residential peers. Just pretty good strength across the board. Thank you.

Speaker Change: You know, it's it's not an easy thing to step down.

Speaker Change: It is and I don't know if there's you know a right time. It's you you always want to stay doing what you're doing you can't do you can't really stepped down when things arent going well.

Speaker Change: But this just seems to be the right time, we've spent a lot of time, making sure we get the right people in the right seats.

David P. Singelyn: Dave, you know, if you're, if you could talk about maybe an initiative or something you're most proud of and looking forward to really focusing on over the coming months until you officially retire, maybe investors are not fully appreciating. Thank you. Well, first of all, Jeff, thanks for your kind words at the beginning. But, you know, when I look back over the last 10 years, it's been very, very rewarding to look back and see the accomplishments of building a company, building an industry. But I think at the end of the day, probably the biggest accomplishment and the biggest reward is the team that you build, the people that are around you, having time to watch their growth and being able to mentor them and see them succeed. You know, it's not an easy thing to step down. It is, and I don't know if there's, you know, a right time. It's you; you always want to stay doing what you're doing.

Speaker Change: We've talked about a lot more internally than externally, probably but or succession programs and that really is leadership training at all levels throughout the company and today seems to be the right time, we are well positioned I mean, we.

Speaker Change: Our growth prospects going forward are the stability of this company.

Speaker Change: Everything is.

Speaker Change: Working very very well and the team is I mean, Brian is ready and Chris is ready I. It's just it's just the right time, and so and look I've been doing what I've been doing for a really long period.

Speaker Change: 12 years 13 years here I before this Iran was the CEO of a publicly traded company up in Canada for 10 years. So it's just the right time, Jeff. So thank you for your words.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Steve <unk> with Evercore ISI. Please go ahead.

Steve: Yeah, Thanks, and congrats again, Dave and <unk> and Brian I, just wanted to see maybe could you provide any February stature realize the month is not over here, but just trying to sort of frame out the the new when their renewals.

David P. Singelyn: You can't do you can't really step down when things aren't going well. But this just seems to be the right time. We've spent a lot of time making sure we get the right people in the right seats. We talked about a lot more internally than externally, probably our succession programs, and that really is leadership training at all levels throughout the company. And today seems to be the right time.

Steve: Brian you said, 5% or so on renewals for the year. Obviously, the first quarter is off to a good start and I don't know what that implies is an exit rate I'm, just trying to kind of figure out kind of your level of conservatism on the pricing side. Thanks.

David P. Singelyn: We are well, well positioned. I mean, our growth prospects going forward depend on the stability of this company. Everything is working very, very well. And the team is, I mean, Bryan is ready, and Chris is ready. It's just, it's just the right thing to do. 12 years, 13 years here; I, before this, was the CEO of a publicly traded company up in Canada for 10 years.

Brian: Sure Yeah. Thank you Steve.

Brian: As I talked about earlier, we saw a really nice acceleration of demand.

Speaker Change: The tail end of January continuing into February there was a little bit of a lag before that translates into new leases, but.

Brian: February is off to a fantastic start I would expect our new and renewal leases to be a tick better in terms of rate growth over January.

Brian: And the effect of that that improvement in demand.

David P. Singelyn: So it's just the right time, Jeff. So thank you for your work. Our next question... Corps, ISD. Yeah, thanks. And congrats again, Dave and Bryan.

Brian: Probably be more.

Brian: More obvious and into March occupancy numbers as an example, but we're off to a great start rate growth is steady.

Brian: And improving slightly on the renewal side, there's going to be an expectation that it returns to kind of normal seasonality where.

Bryan Smith: I just wanted to see, maybe, could you provide any February stats? I realize the month is not over here, but I'm just trying to sort of frame out the new and the renewals. You know, I think, Bryan, you said 5% or so on renewals for the year. Obviously, the first quarter is off to a good start, and I don't know what that implies as an exit rate. I'm just trying to kind of figure out your level of conservatism on the pricing side thing. Sure, yeah. Thank you, Steve.

Brian: The renewal strength is relative to news as strong in Q1, and Q4 with news outpacing renewals during the spring leasing season, and that's our expectation for this year.

Okay, and then maybe turning to development, Dave I was just wondering if you could sort of frame out the 23 development and the yield the expected yields on the 23 deliveries and then I know those had some challenges with supply chain and maybe the cost structures weren't the best on those homes, but.

You know what are you expecting for 'twenty four.

And you know how are you thinking about new development yields moving forward just in light of kind of the higher rate environment, and given where your stock's trading.

Bryan Smith: As I talked about earlier, we saw a really nice acceleration of demand at the tail end of January, continuing into February. There's a little bit of a lag before that translates into new leases, but February is off to a fantastic start. I would expect new and renewal leases to be a tick better in terms of rate growth over January, and the effect of that improvement in demand will probably be more, and more obvious, in the March occupancy numbers, as an example. But we're off to a great start.

Yeah, well first of all I'm looking.

Looking like.

Brian: Let's just look at the development program in totality.

Brian: If you go back 345 years ago. When we first started development one of the things. We said is that it allows us to control our own destiny and we can.

Grow in all economic cycles, and that has really proved out today where are other roads.

Bryan Smith: Rate growth is steady and improving slightly. On the renewal side, there's gonna be an expectation that it returns to a kind of normal seasonality where the renewal strength is relative to news is strong in Q1 and Q4, with news outpacing renewals during the spring leasing season. And that's our expectation for this year.

Brian: Growths channels, our acquisition growth channels National builder MLS are essentially closed because of the opportunity set that's out there.

Brian: When you look at 2023 and the first thing I think we all have to remember is that these homes that we are delivering today are the land was acquired four or five years ago, maybe six years ago in some cases and that's when they were underwritten and all the yields that we are delivering on our.

David P. Singelyn: Okay, and then maybe turning to development, Dave, I was just wondering if you could sort of frame out the 23 development and the yield, the expected yields on the 23 deliveries. And then I know those had some challenges with the supply chain, and maybe the cost structures weren't the best on those homes, but, you know, what are you expecting for 24 and, you know, how are you thinking about new development yields moving forward just in light of the higher rate environment and given where your stock's trading? Yeah, well, first of all, I'm, you know, looking, let's just look at the development program in Tallahassee.

Brian: Significantly greater than what we underwrote when we acquired Dietz.

Speaker Change: In the last couple of years your Steve you're 100% right. It's been challenging we have seen the input cost.

Speaker Change: Homebuilding across all homebuilders.

It's grown more than we've really seen historically ever before.

David P. Singelyn: If you go back 3, 4, 5 years ago when we first started development, one of the things we said was that it allowed us to control our own destiny and we could grow in all economic cycles, and that has really proven itself today where our other growth channels, our acquisition growth channels, National Builder, MLS, are essentially closed because of the opportunity set that's out there. When you look at 2023, and the first thing I think we all have to remember is that these homes that we are delivering today, the land was acquired four or five years ago, maybe six years ago in some cases, and that's when they were underwritten, and all the yields that we are delivering are significantly greater than what we underwrote when we acquired them. In the last couple of years, Steve, you're 100% right. It's been challenging,

Speaker Change: With that we've been very fortunate we've had very strong rental rate growth alongside it and our yields are actually.

Speaker Change: As I said snowflake greater.

Speaker Change: 2023 we talked about are the hope of having a little bit of benefit a tailwind as we got to the back half of the year, maybe a 5% reduction in some of the input costs, we saw a little bit of it but not to the extent we thought we would homebuilding at the beginning of 2023 coming out of 2022.

Speaker Change: It was a pretty.

Speaker Change: But the homebuilders did catch some wind through incentives and otherwise and the demand for supplies demand for labor went back to normal and the benefits didn't materialize to the extent we've talked to you. When we got the most of the biggest benefits still happened and that was.

David P. Singelyn: We have seen the input cost of home building across all home builders. It's grown more than we've really seen historically before. With that, we've been very fortunate.

David P. Singelyn: We've had very strong rental rate growth alongside it, and our yields are actually, as I said, significantly greater. In 2023, we talked about the hope of having a little bit of benefit from tailwind as we got to the back half of the year, maybe a 5% reduction in some of the input costs. We saw a little bit of that, but not to the extent we thought we would.

Speaker Change: And in lumber.

Speaker Change: So today, we are last year, we delivered in the high fives.

Speaker Change: As we underwrite that's still 100 basis points higher than anything that we are seeing today from national builders or MLS.

Speaker Change: And our consistent underwriting between the two channels, so and as we go into 'twenty 'twenty four again keep in mind that many of these were underwritten and acquired many years ago much of the.

David P. Singelyn: Home building in the beginning of 2023 coming out of 2022 was pretty slow, but the home builders did catch some wind through incentives and otherwise, and the demand for supplies and demand for labor went back to normal, and the benefits didn't materialize to the extent we thought they would. We got the most, the biggest benefit still happened, and that was in lumber. So today, last year, we delivered in the high fives as we underwrote. That's still 100 basis points higher than anything that we are seeing today from national builders or MLS in our consistent underwriting between the two channels. And as we go into 2024, again, keep in mind that many of these were underwritten and acquired many years ago. Much of the product is in place, land and land improvements, and so they will still be very accretive, and I'm very, very pleased that we have them in our portfolio. But we'll be looking directly at your question. Probably high fives, maybe a little bit at six, but let's keep ourselves in the high fives at this point for deliveries in 2024. Your next question... a call with Wolfe Research, please go ahead.

Product is in place our land and land improvements are and so they will be still very accretive and I'm very very pleased that we have them in our portfolio, but what we'll be looking to directly to your question.

Speaker Change: Probably high fives, maybe a little bit at six but let's let's keep ourselves in the high fives at this point for deliveries in 2024.

Speaker Change: Your next question comes from Keith can call with Wolfe.

Keith: Please go ahead.

Keith: Yeah. Thanks for the time guys I guess, maybe first just on your property enhancing capex is down materially both year over year and sequentially. Just wondering if any of this is related to the resident 360 program or something else drove it and then what would be a good run rate going forward.

Keith: Thank you again this is Bryan.

Keith: I think what you're seeing.

Bryan Smith: On the property enhancing Capex is the results of our continued L. D. P hard surface flooring, a program, where we're replacing carpet we've.

We've made significant progress on that and not homes are going to turns that have the hard surface flooring, so you're going to see a little bit of a reduction on that.

Bryan Smith: Yeah, thanks for the time guys. Um, I guess maybe first just on your property enhancing CapEx is down materially both year over year and sequentially. Just wondering if any of this is related to the resident 360 program or something else drove it, and then what would be a good run rate going forward. This is Brian.

Bryan Smith: The other component of that is what we call revenue enhancing capex, which are specific upgrade projects that we're evaluating on a unit by unit basis, they're not nearly as significant but they provide good returns.

Bryan Smith: On a on a project basis. So yes, we've seen a reduction I think.

Bryan Smith: That probably will hold but we're going to continue that program until we're completely out of the carpet business.

Bryan Smith: Okay.

Bryan Smith: Got it and then shifting gears, maybe one for Chris here I'm, just focusing on your real estate tax growth I guess are you doing anything differently from a forecasting perspective, just given what's happened in the last few years and obviously given legislation in Texas, just curious there what sort of benefit you'd be expecting.

Bryan Smith: I think what you're seeing, on the property-enhancing CapEx, is the results of our continued LVP hard surface flooring program where we're replacing carpet. We've made significant progress on that, and now homes are going to turn but have the hard surface flooring.

Speaker Change: Oh sure I'm wondering if you can thanks, you know.

Christopher Lau: Look I would just remind for 2023 are our our expectations are we're pretty much right on <unk> and even 2022 outside of the Texas curve ball.

Bryan Smith: So you're gonna see a little bit of a reduction in that. The other component of that is what we call Revenue Enhancing CapEx, which are specific upgrade projects that we're evaluating on a unit by unit basis. They're not nearly as significant, but they provide good returns on a project basis. So yeah, we've seen a reduction. I think that probably will hold, but we're going to continue that program until we're completely out of the carpet business. I got it.

Christopher Lau: You know look the overall no everything we talked about last year property taxes continue to play out pretty consistent with what we've been expecting a 2023 what was in that 9% area that we started the year with in terms of our expectations are.

Christopher Lau: And then, shifting gears, maybe one for Chris here, just focusing on your real estate tax growth. I guess, are you doing anything differently from a forecasting perspective, just given what happened in the last two years? And obviously, given legislation in Texas, just curious there, what sort of benefits are you seeing? Sure. Morning, Keegan.

Christopher Lau: And then you know trend line and expectations into to this year again very similar to some of the preliminary thoughts that we were outlining last year expectation is that we're going to begin to see some level of moderation.

Christopher Lau: As a rate of home price appreciation has come off the historic highs over the past couple of years.

Christopher Lau: Thanks. You know, look, I would just remind you that for 2023, our expectations were pretty much right on. And even 2022, outside of the Texas curveball, you know, look, overall, no different than we talked about last year, property taxes continue to play out pretty consistent with what we've been expecting. 2023 was within that 9% area that we started the year with in terms of our expectations. And then, you know, the trend line and expectations into this year, again, very similar to some of the preliminary thoughts that we were outlining last year. The expectation is that we're going to begin to see some level of moderation as the rate of home price appreciation has come off the historic highs of the past couple of years. But with that said, you know, we shared this view last year also. We're not expecting property taxes to snap back to their long-term average overnight.

Christopher Lau: But with that said you know we share. This view last year also we're not expecting property taxes to snap back to two long term average overnight.

Christopher Lau: As we know property taxes are inherently backward looking and.

Christopher Lau: And although things have cooled there they're good portions of the housing market that have remained really resilient bright places like Florida, and Georgia continue to remain strong where we could still see property tax growth and in those states you know in the in the high single digit to low double digit area.

All of which has translated into this year's view in the low Sevens, which again reflects a moderation from the past couple of years, but will still likely run above our long term run rate of 4% to 5%, but I've finished off by saying you know things are very much playing out as we'd been expecting.

Christopher Lau: Thank you and our next question comes from Jamie Feldman with Wells Fargo. Please state your question.

Christopher Lau: As we know, property taxes are inherently backward looking. And although things have cooled, there are good portions of the housing market that have remained really resilient, right? Places like Florida and Georgia continue to remain strong, where we could still see property tax growth in those states, you know, in the high single-digit to low double-digit area. All of this has translated into this year's view in the low sevens, which, again, reflects moderation from the past couple of years. But we'll still likely run above our long-term run rate of 4% to 5%. But I would finish it off by saying, you know, things are very much playing out as we've been expecting. Thank you.

Speaker Change: Great. Thank you. This is a Cooper Clark on for Jamie just wondering we've heard from your peers that BTR supply has been increasing in cities like Las Vegas, and Phoenix. We appreciate the quicker absorption here when you do see pockets of supply, but wondering what markets. In 2024, you would call out as higher supply, where you may see slight weakness in a given quarter.

Speaker Change: Yeah. This is Dave let me take a piece of this and then maybe Brian can add I would actually.

Speaker Change:

Dave Christian: Disagree with a little bit of that sentiment.

Bryan Smith: Feldman with Wells Fargo. Great, thank you. This is Cooper Clark on behalf of Jamie.

Dave Christian: We are we are seeing some more build to rent, but it's not necessarily in the core part of the city.

David P. Singelyn: Just wondering, we've heard from your peers that BTR supply has been increasing in cities like Las Vegas and Phoenix. We appreciate the quicker absorption here, and you do see pockets of supply. But, I was wondering what markets in 2024 you would call out as higher supply where you may see slight weakness in a given quarter? Yeah, this is Dave.

Dave Christian: It is it's much farther out in secondary tertiary market.

Market areas.

Dave Christian: The the build to rent there is a lot of build to rent that came into.

Dave Christian: The marketplace three four years ago, whether it's from the national builders or from some type of activity.

Bryan Smith: Let me take a piece of this and then maybe Bryan can add something. I would actually, um, disagree with a little bit of that sentiment. We are seeing some more build-to-rent, but it's not necessarily in the core part of the city. It's much farther out in secondary and tertiary market areas. The build to rent, there is a lot of build to rent that came into the marketplace three, four years ago, whether it's from the national builders or from some other type of that. Many of those projects have been on the market. We have seen many of them for us to take over midstream, but the location and the quality of where they are, we have decided to pass on.

Dave Christian: Many of those projects have been on the market, we have seen many of them for us to take them over our midstream.

Dave Christian: But the location and the quality of where they are we have decided pasok. Likewise, there is a lot of build to rent product that AR is being shopped to parties like ourselves are and the majority of build to rent the idea was to build it.

Dave Christian: Rent it stabilize it and sell it and monetize it.

Bryan Smith: Likewise, there is a lot of build-to-rent product that is being shopped to parties like ourselves. The majority of build-to-rent, the idea was to build it, rent it, stabilize it, and sell it and monetize it. Again, these assets, there are a number of them that are out there, and they are looking to trade. But when you look at the pricing of those, they are in the fours. Over the last quarter, over the last year, really, we have seen thousands and thousands of properties on tapes, not thousands of tapes, but thousands of properties on tapes from national and local builders. And when you look at them as to the quality and you look at them as to the pricing, they're in the fours and are underwriting, and they're just not an attractive opportunity.

Dave Christian: Again these assets are there's a number of them that are out there and they are looking to trade.

Dave Christian: But when you look at the pricing of those they are in the in the force.

Dave Christian: Over the last quarter.

Dave Christian: Over the last year really we have seen every quarter thousands and thousands of tape Uh huh properties on AIDS not thousands of tapes, but thousands of properties on tapes from national and local builders and when you look at them as to the quality and you look at him to the pricing there in the fall.

Dave Christian: And our underwriting and they're just not an attractive opportunity.

The National Homebuilders, what you see the trend today is a lot of these homes that are quote build to rent or were identified as built to rent are now being reclassified by the national homebuilders as for sale or for retail sale and that's just a statement of the evidence.

David P. Singelyn: The National Home Builders, what you see the trend today is a lot of these homes that are built to rent or were identified as built to rent are now being reclassified by the National Home Builders as for sale or for retail sale. And that's just a statement of the evidence that it's very, very difficult to move these homes unless they're well located or they take a deep discount on them, and that's sometimes what they need to do in secondary and tertiary markets. So I don't see as much built to rent actually trading as people may be talking about. Would you like to add anything to that, Bryan, or... Yeah, Cooper, you know, specifically looking at supply in certain markets? You're correct, Phoenix is one of the markets that's seen some additional supply, not only in builder rent but also in just a regular way, the scattered type. It's evident, I think you can see, in the performance from an occupancy perspective. Phoenix has been a top-performing market for the past five years, both in rate and in occupancy.

Dave Christian: It's very very difficult to move these homes less.

Dave Christian: Unless they're well located or they take a deep discount on them and that sometimes what they need to do on secondary and tertiary markets.

Dave Christian: I don't see as much build to rent actually trading as people may be talking about.

Speaker Change: Do you want to add anything to that Brian or yeah, Cooper, specifically looking at supply and <unk>.

Speaker Change: Certain markets Youre correct Phoenix is one of the market that's seen some additional supply not only in billed rent, but also in just regular way scattered site.

Speaker Change: It's it's evident I think you can see in the performance from an occupancy perspective.

This has been a top performing market for the past five years, both in rate and occupancy.

Bryan Smith: But we are seeing a little bit more supply. John Burns estimates that supply is about 25% year over year in Q1. The good news for us is that we believe that will be absorbed relatively quickly. We have a fantastically well-located portfolio in Phoenix, and we see this as a temporary situation. We expect Phoenix to return to some kind of historical performance pretty quickly.

Speaker Change: We are seeing a little bit more supply John Burns estimates that supplies of about 25% year over year in Q1. The good news for US is that we believe that'll be absorbed relatively quickly we have a fantastically well located portfolio in Phoenix and we see this as a temporary oh.

Speaker Change: Supply, we expect the Phoenix to return to kind of historical.

Speaker Change: Performance pretty quickly.

David P. Singelyn: In Las Vegas, there has been an increase in supply in Las Vegas, specifically from Build-A-Rent, but our portfolio is performing very well there, and we're still seeing occupancy into the 96s. Now, the other market that really comes to note for me is San Antonio, where we've seen some increased supply as well. But as we talked about earlier, this is part of the benefit of having a well-diversified portfolio and that we do have markets that have seen a decrease in supply, specifically in the Midwest. So we're really happy with the position that we're in now. Great, thank you.

Speaker Change: Vegas, there has been an increase in supply in Las Vegas.

Speaker Change: Specifically from builder at but our portfolio is performing very well there and we're still seeing occupancy into the 96 is the other market really comes to note for me the San Antonio where we've seen some increased supply as well, but as we talked about earlier.

Speaker Change: This is part of the benefit of having a well diversified portfolio and that we do have markets that have seen a decrease in supply specifically in the Midwest and so we're really happy with the position that we're in now.

Speaker Change: Great. Thank you.

Speaker Change: Our next question comes from Eric Wolfe with Citi. Please state your question.

Christopher Lau: Our next question comes from Eric Wolfe with Citi. Hey, thanks. And congrats, Dave and team. If I look back at 2023, you ended up beating your guidance by about five cents, around two cents of that coming from higher prices seems to run a line. So I'm just curious what ended up surprising you on the upside to drive that three cents extra and how you're thinking about some of those line items in 2024. Yeah, sure. I think it sounds like Nick.

Eric Wolfe: Hey, Thanks, and congrats Steve and team.

If I look back at 2023, you ended up beating your your guidance by about five just around two cents of that coming from higher same store NOI.

Eric Wolfe: So I was just curious what Andy that's surprising you to the upside to drive that that three since extra and how youre thinking about some of those line items in 2024.

Eric Wolfe: Yeah sure I think it sounds like Nick Good morning, Nick It's Chris here.

Christopher Lau: Morning, Nick. It's Chris here. Yeah, as we look back on 2023, I think we are really pleased with how the year ended up playing out and also, in particular, the momentum we're carrying out of 23 into 24. I would say, you know, notable areas as we think about the outperformance from a same-home perspective. I think we did a great job on the rate side, you know, leaning into and pushing rates over the course of the year. I think we saw that especially through the spring leasing season and some of our updates at the end of the second quarter. I would say that was kind of the theme of the first half of the year, and then the other piece, we talked about this a lot in the second half of last year, is what a great job the team did around controlling controllables, and controlling controllable expenses.

Christopher Lau: Yeah as we look back on 2023, I think we yeah, we're really pleased with how the year ended up playing out.

Christopher Lau: And also in particular the momentum we're carrying out of 'twenty three 'twenty four I would say.

Speaker Change: Notable areas as we think about the outperformance from our same home perspective, I think we did a great job on the rate side.

Speaker Change: You know leaning into and pushing rate over the course of the year I think we saw that especially through the spring leasing season in some of our updates at the end of the second quarter I would say that was kind of a theme of the first half of the year and then the other piece we talked about this a lot in the second half of last year. It was what a great job the team did around control.

Speaker Change: <unk> controllable controlling controllable expenses and in large part as resident 360, you started to be rolled out across the portfolio. We saw nice expense controls around R&M and turn in the third and the fourth quarter and so I think it was really.

Christopher Lau: In large part, as Resident 360 started to be rolled out across the portfolio, we saw nice expense controls around R&M and turn in the third and fourth quarter. And so I think it was really rate growth through the spring, a nice top-line trajectory, balanced with tight expense controls, notably in the back half of the year and through turn season, that really translated into the outperformance last year. And as we think about, you know, this year, you know, just taking a step back, I would remind us all that, look, it's early, right? It's early in the year.

Speaker Change: Growth through the spring nice topline trajectory balanced with tight expense controls us, notably in the back half of the year end through turn season that really translated into the outperformance last year and as we think about this year.

Speaker Change: Taking a step back out of I would remind us all that look it's early right. It's early in the year. It's it's not lost on us that.

Theres still some economic uncertainty out there in the environment that we're thinking about this year. There's still some question marks out there across the environment and we're going to make sure that we come out of the gate prudently at the start of this year, but I think it's very important again, we really like the position that we're in we exited twenty-three nicely we had a great fourth quarter, and we're seeing really nice trend lines into <unk>.

Christopher Lau: It's not lost on us that, you know, there's still some economic uncertainty out there in the environment that we're thinking about this year. There are still some question marks out there across the landscape, and we're going to make sure that we come out of the gate prudently at the start of this year. It's very important, again, we really like the position that we're in. We exited 23 nicely. We had a great fourth quarter, and we're seeing really nice trend lines into January and February, like Ryan was talking about. That's helpful.

Speaker Change: Annually in February like Brian was talking about.

Speaker Change: That's helpful. And then just second question on your disposition guidance.

Speaker Change: So the $400 million to $500 million.

Speaker Change: What's assumed.

Speaker Change: In terms of cap rate on those in.

Speaker Change: And then just kind of think that they're probably below the implied cap rate on your stock. So I was just curious how how ATM issuance fit into your capital plan as well.

Speaker Change: Oh sure Yeah, Let me, let me tie those together.

Speaker Change: I guess on dispositions is that we'll probably see an environment fairly similar to two this past year 2023.

Christopher Lau: And then the second question on your disposition guidance for the $400 million to $500 million. So what's assumed in terms of the cap rate on those? And I'm just guessing that they're probably below the implied cap rate on your stock. So I was just curious how ATM issuance fit into your capital plan as well. Oh, sure. Yeah, let me tie those together.

Speaker Change: $4 million to $500 million of sales with with dispose cap rates, probably somewhere in the threes again, but look tying into the broader capital plan look I would assume this out for a minute.

Speaker Change: And you know as you know we have a large 1.9 billion dollar capital need for this year when you take into consideration.

Christopher Lau: You know, the best guess on dispositions is that we'll probably see an environment fairly similar to this past year, 2023, you know, four to five hundred million dollars of sales with dispo cap rates probably somewhere in the threes again. But but, tying into the broader capital plan. Look, I would zoom us out for a minute.

Both our growth programs and securitization refinancings and although the planned primary funding blocks for this year consist of retained cash flow importantly, recycled capital from dispositions and debt, where we're always evaluating all options and when the stock was trading at a small discounts to <unk>.

Christopher Lau: And, you know, as you know, we have a large one point nine billion dollar capital need for this year when you take into consideration both our growth programs and securitization refinancing. And although the planned primary funding blocks for this year consist of retained cash flow, importantly, recycled capital from dispositions, and debt, we're always evaluating all options. And when the stock was trading at a small discount to consensus, NAV was an example, all things considered, including our relative cost of borrowing in the mid fives and the totality of this year's capital needs. A little bit of equity made sense. But again, I would remind you, we're only talking about one hundred and thirty million dollars.

Speaker Change: Incentives and a N a as an example.

Speaker Change: All things considered including a relative cost of borrowing in the mid fives and the totality of this year's capital needs a little bit of equity makes sense, but again I would remind you were only talking about $130 million, it's not needle moving in terms of capitalization of the company, but we think it's a very nice complement to help round out this year.

Speaker Change: <unk> larger total capital need.

Speaker Change: Thank you. Our next question comes from handle sends us, though with Mizuho Securities. Please state your question.

Hey, good morning, and congratulations to both Brian and Dan.

Dave I wanted to go back to your comments on development for a moment I wanted to understand perhaps the opportunity to maybe flex up development deliveries. This year from the current got a 750 million I think last year, you start off with and just forgot it.

David P. Singelyn: It's not the needle moving in terms of capitalization of the company, but we think it's a very nice compliment to help round out this year's larger total capital. Our next question... Haendel Sanjusta with Mizuho Security. Hey, good morning, and congratulations. Bryan and Dave.

Speaker Change: 650, and then you ended up.

Speaker Change: With $850 million.

Speaker Change: For full year 'twenty through so I'm curious kind of the opportunity and what perhaps you might want to see.

Speaker Change: Could we see potentially flex up to you know.

Speaker Change: Level similar to what you did last year.

Speaker Change: Yeah, So let's talk about the opportunity set a first of all we're in a really really good place not only to be able to flex up but also to maintain a very consistent.

David P. Singelyn: Dave, I wanted to go back to your comments on development for a moment. I wanted to understand, perhaps, the opportunity to maybe flex up the development delivery this year from the current guide of $750 million. I think last year you started off with an individual guide.

Speaker Change: Growth program into the future.

Speaker Change: We're sitting with 12, maybe 13000 lots right now in our inventory.

David P. Singelyn: 650, and then you ended up with $850 million for full year 23. So I'm curious about the kind of opportunity and what perhaps you might want to see, and could we see you potentially flex up to, you know, a level similar to what you did last year? So let's talk about the opportunity set. First of all, we are in a really, really good place, not only to be able to flex up but also to maintain a very consistent growth program into the future. We're sitting with 12, maybe 13,000 lots in our inventory right now, and those are all in different stages of development. Some are on land, and some are ready to go vertical.

Speaker Change: And those are all in different stages of development. Some are in land and some are ready to go vertical but that to us is really going to give us a very very predictable long term.

Speaker Change: Growth program for many years.

Speaker Change: We do have a couple of holes in that program, but it's very very little it's just a market here in our market there where maybe in the 26 or 27 unit delivery Oh outlook, we need to plug a hole. So it's those are the fine tuning and we will take care of that.

David P. Singelyn: But that is really going to give us a very, very predictable long-term growth program for many years. We do have a couple of holes in that program, but they're very, very small. It's just a market here and a market there where maybe in the 26 or 27-unit delivery outlook, we need to plug a hole. So that's the fine-tuning, and we'll take care of that. The ability to flex and lift is there, Haendel.

Speaker Change: The ability to flex up is there a handle it's a it's all about the I'm looking at the capital that you have the capital that is going out of from year to year, you have to look at exactly where it's going in 'twenty.

Speaker Change: Three some of that capital.

Speaker Change: Was going into not deliveries, but it was going into.

David P. Singelyn: It's all about looking at the capital that you have. The capital that is going out from year to year, you have to look at exactly where it's going. In 23, some of that capital was going into not deliveries, but it was going into some land development, preparing for deliveries either this year or next year. And so you've got to look at both.

Speaker Change: Some land development preparing for deliveries either this year next year and so that it's you got to look at both.

Speaker Change: The numbers of homes as well as the dollars they are.

Speaker Change: They are not.

Speaker Change: It's not a perfect science that they correlate perfectly because sometimes there's a little bit of timing difference between how much land the development is going on versus deliveries.

David P. Singelyn: The numbers of homes, as well as the dollars, It's not a perfect science that they correlate perfectly because sometimes there's a little bit of a timing difference between how much land development is going on versus delivery. We do have the ability to flex up, and we have the ability to flex up more than just in development. We talked about today that we're on the sidelines with National Builder and MLS. We're on the sidelines not because we won't grow through National Builder or MLS, but because the opportunity set's not there. It's all a function of what the capital markets look like as well as what the acquisition opportunities look like, but it's also about maintaining consistency and predictability in your growth program. So, we can flex. We've got to be careful how much we flex.

Speaker Change: We do have the ability to flex up and we have the ability to flex up more than just in development we.

Speaker Change: We talked about today, we're on the sidelines.

Speaker Change: National builder and MLS were on the sidelines not because we won't.

Speaker Change: ROE through the national builder MLS because the opportunity set is not there. It's all a function of what the capital markets look like as well as what the acquisition opportunities look like but it's also about maintaining consistency and predictability.

Speaker Change: And in your growth program. So we can flex up we got to be careful how much we flex up if we flex up it can be borrowing from next year, because you have to have the land developed.

Speaker Change: I don't I know, that's a long winded answer that it's a little bit roundabout, but hopefully that addresses your concerns.

David P. Singelyn: If we flex up, it can be borrowed from next year, because you have to have the land developed. So, I know that's a long-winded answer, that's a little bit roundabout, but hopefully, that addresses your question. It does, it does, and I appreciate that.

Speaker Change: It does it does and I appreciate that and maybe some comments on the back billing of the land itself curious kind of what you're seeing out there in the market.

Speaker Change: Any notable changes of any sort and then potentially any new regions or markets you may want to.

David P. Singelyn: Maybe some comments on the backfilling of the land itself, a curious kind of what you're seeing out there in the market, any notable changes of any sort, and then potentially any new regions or markets you may want to get into or increase exposure to. Yeah, it's, I don't know, let's talk about markets. First, I don't know that there are any additional markets that we want to get into today. One of the things about where our development program is is that when the opportunity was there two years ago, two and a half years ago to buy land at very attractive prices during the COVID period, we took advantage of that. I think in one year, we bought nearly 7,000 lots or 8,000 lots.

Speaker Change: Debt into or increased exposure to banks.

Speaker Change: Yeah, It's a I don't know, let's talk about markets first I I don't know that there's any additional markets that we want to get into today.

Speaker Change: One of the things about where our development program is is that when the opportunity was there two years ago, two and a half years ago to buy land at very attractive prices and the Covid period. We took advantage of that I think in one year, we bought nearly 8000 set.

Speaker Change: 1000 lots or 8000 lots, we are very very well positioned going forward today land is available.

David P. Singelyn: We are very, very well positioned going forward. Today, land is available. The pricing of that land, no different than the pricing of MLS right now, is a little bit on the higher side. So we're in a very, very, enviable position that we do have a land pipeline. I believe we do, you know.

Speaker Change: But.

Speaker Change: The pricing of that land no different than the pricing of MLS.

Speaker Change: Right now is a little bit on the Richard side. So we're in a very very we're in an enviable position that we do have a land pipeline.

I believe we are you know.

David P. Singelyn: In 2023, we bought land, but it was a very limited amount of land. It was plugging some of those holes I was talking about in future years delivery programs 26, 27, and 28. But land will become available. We are very choosy about where we're buying our land.

Speaker Change: In 2023, we bought a land, but it was a very limited amount to plan. It was plugging some of those holes I was talking about in future years, a delivery program, a 26 27 and 28.

Speaker Change: But land will become available we we're very choosy about where we are buying our land we're buying the land contiguous to national homebuilders, where they're buying retail product not build to rent product and in the long term that will pay dividends, but we can be patient we can definitely be patient that has the.

David P. Singelyn: We're buying land contiguous to national home builders where they're buying retail product, not built to rent product. In the long term, that will pay dividends, but we can be patient. We can definitely be patient.

David P. Singelyn: That is the benefit of having the pipeline that we do have. I'm really happy that our development program is in very good shape for many years, and there will be times that we will be able to ramp up acquisitions of land at a greater pace than we are doing. But we are plugging the holes, and it will be a very consistent program for many years, regardless. Our next question... Smell.

Speaker Change: Bit of having the pipeline that we do have some I I'm really happy that our duo development.

Speaker Change: Program is in very good shape for many years.

Speaker Change: And there will be times that we will be able to ramp up the acquisitions of of land at a greater piece. Then we are doing but we are plugging the holes and a it will be a very consistent program for many years.

Regardless.

Speaker Change: Our next question comes from Adam Kramer with Morgan Stanley. Please go ahead.

Bryan Smith: Hey guys, thanks for the time. And congrats to Dave and Brian. Just wanted to ask maybe a two-part question here to start: just where does the loss police sit today? And then, maybe you talked about a little bit earlier, Brian, but just, you know, roughly, where are you sending out renewals for, I guess, for March and April at this point? Thanks, Adam. Our loss to lease is sitting in the low 3% range today. Home.

Adam Kramer: Hey, guys. Thanks for the time and congrats to Dave and Brian just wanted to ask maybe a two parter here to start just where does the law police sit today and then maybe talk about little bit earlier, Brian, but just you know.

Adam Kramer: Roughly where are you sending out renewals for I guess for March and April at this point.

Speaker Change: Sure Yeah, Thanks out of our loss to lease is sitting in the low 3% range today.

Bryan Smith: In terms of renewals, we're sending out renewals, well, February and March; we've gotten many of those results back already, and those are trending slightly better than January. We're sending out renewals in the five to 6% range into April. And again, as we talked about, our expectation for the years is that renewals would be in the 5% area for the 12 months. Great, thanks.

Speaker Change: In terms of renewals, where we're sending out renewals while February and March we've we've gotten many of those results back already and there's.

Speaker Change: They're trending slightly better than January.

Speaker Change: We're sending out renewals in the 5% to 6% range in the April.

Speaker Change: And again as we talked about our expectation for the year as renewals would be in the 5% area for the 12 months.

Speaker Change: Great. Thanks, and then maybe just switching gears.

David P. Singelyn: Maybe just switching gears and a little bit more of a conceptual question. Just wondering about acquisitions; it seems like it's kind of not being incorporated into guidance. I think you kind of bought a little bit here and there over the course of 2023. And I guess the conceptual question is, you know, look, if the acquisition market, whether it's MLS or builder partners, were to come back and be more attractive, would you consider that? Or is it kind of the full focus on development kind of given all the advantages that that program has? And you'd probably stick to development, even if the acquisition market came back. And then I guess, you know, if you were to kind of, you know, go back into acquisitions more because that market did improve, do you kind of have the GNA scale and kind of ability to flex that acquisition kind of spigot back on? Yeah, no. So Adam, this is Dave.

Speaker Change: A little bit more conceptual question.

Speaker Change: Just wondering on acquisitions I mean, it seems like it's kind of not being incorporated into guidance I think you've kind of a little bit here and there over the course of 2023.

Speaker Change: And I guess the conceptual question is you know what if the acquisition market, whether it's <unk> or poor builder partners were to come back in and be more attractive would you consider that or is it kind of the full focus on developments kind of given the given all of the advantages of that program hasn't you'd probably stick to development, even if the acquisition market came back.

Speaker Change: Back.

Speaker Change: And then I guess you know if you were to kind of go back into acquisitions more because the market did improve do you kind of have the G&A scale and kind of ability to flex that to flex that acquisition.

Speaker Change: Kind of a spigot back on.

Speaker Change: Yeah no.

Speaker Change: So Adam this is Dave apps, absolutely, we're not opposed to national builder and MLS We look at them as a.

David P. Singelyn: Absolutely. We're not opposed to National Builder and we look at them as a wonderful supplement to our development. Our development program, what we have said over and over is it allows us to grow in every economic cycle. And that's what it is today.

Dave Christian: Wonderful supplement to our development program our development program, what we have said over and over is it allows us to grow in every economic cycle and that's what is today, but it doesn't mean that we're opposed to the national builder and M. S.

David P. Singelyn: But it doesn't mean that we're opposed to the National Builder and the MLS. Today, we still have an acquisition team. They continue to underwrite homes every single day, whether it's from National Builders or the MLS. The MLS, as we know, has a lot less inventory available on it, but we do underwrite it, and we're underwriting thousands of homes every month and every quarter. We're just not finding them attractive

Dave Christian: Today, we still have a a acquisition team they.

Dave Christian: They continue to underwrite our homes every single day.

Dave Christian: Whether it's from national builders or MLS the MLS as we know it has a lot less inventory available on it but we do underwrite it and we're underwriting thousands of homes every month and every quarter.

Dave Christian: We're just not finding them attractive today as as time goes on and Cycle's. You know if you go back and you look at where we are today, it's probably very akin to history have to go back a long ways, though probably to the 19 eighties. When you saw the very very <unk>.

David P. Singelyn: As time goes on and cycles, if you go back and look at where we are today, it's probably very akin to history. We have to go back a long way, though, probably to the 1980s, when you saw the very, very rapid increases in interest rates, etc. Those cycles always repeat, and there will be a time when it is going to be very, very attractive to buy any type of product against your cost of capital. Yes, we have the entire infrastructure in place.

Dave Christian: Rapid.

Dave Christian: Increases in interest rates et cetera, but those cycles always repeat and there will be a time when it is going to be very very attractive.

Dave Christian: To buy any type of product against your cost of capital and yes, we have the entire infrastructure in place.

David P. Singelyn: It's not only in place on the acquisition side. It's also in place on Bryan's management side of the business. Any opportunities that are out there, big or small, we have the ability to execute on. Next question. Goldsmith with UBS. Good afternoon.

Dave Christian: It's not only in place in the acquisition side. Its also in placing them in and Bryan's management side of the business. So any opportunities that are out there big or small we have the ability to execute on them.

Dave Christian: Our next question comes from Michael Goldsmith with UBS. Please state your question.

Michael Goldsmith: Good afternoon. Thanks, a lot for taking my question as you think about the equation to maximize revenue right lease spreads have remained quite strong while occupancy has kind of come down a little bit from a sequential and a year over year basis can you just provide a little more detail around the strategy around occupancy.

Bryan Smith: Thanks a lot for taking my question. As you think about the equation to maximize revenue, right? Lease spreads have remained quite strong, although occupancy has kind of come down a little bit from a sequential on a year over year basis. Can you just provide a little more detail around the strategy around occupancy versus pushing rate? And does that allow you to push rate a little bit harder than maybe you have in prior years? Yeah, thank you, Michael.

Michael Goldsmith: Versus pushing rate and does that allow you to push rate a little bit harder than maybe you have in prior years.

Speaker Change: Yeah. Thank you Michael.

Bryan Smith: I want to just start with a reminder that we're trying to optimize the entire revenue line, and rate obviously is a component that does affect occupancy. Our plan this year was to enter from a position of strength.

Speaker Change: I wanted to just start with a reminder that we're.

We're trying to optimize the entire revenue line.

Speaker Change: And right and obviously as a component of it does affect occupancy our plan. This year was to enter from a position of strength, 96% occupancy.

Bryan Smith: 96% occupancy is strong, both under any historical lens that you look at, and our expectation as we go into the spring leasing season is that we will have some pricing power. We look forward to absorbing some homes and maybe a slightly better rate environment. But we had really good rate growth on new and renewal mortgages in Q4 and it continued into January. And keep in mind, that's before demand is really going to kick back in. So we're in an excellent position coming in there. But we're not looking at any individual component in isolation. We're looking at maintaining a very balanced and consistent pricing strategy for the residents that maximizes revenue in the long term. Thanks for that!

Speaker Change: Strong growth.

Speaker Change: Under any historical lands that you look at.

Speaker Change: And our expectation as we go into the spring leasing season is that we will have some pricing power.

Speaker Change: We look forward to absorbing some homes and maybe slightly better rate environment, but we have really good rate growth on new and renewals.

Speaker Change: Q4 continued into January and keep in mind, that's before the demand is really going to kick back in so we are in an excellent position coming in there, but we're not looking at any individual component in isolation, we're looking at maintaining a very balanced and consistent pricing strategy for the residents.

Speaker Change: That maximizes revenue in the long term.

Speaker Change: Thanks for that and then similarly.

Bryan Smith: And then similarly, turnovers kind of turning up just a tad, you know. I suspect that's kind of goes hand in hand with rate. Are you seeing any pushback from residents on renewal rent? Yeah, Michael. There are a couple components there. You identified one of them.

Speaker Change: Turnover is kind of trending up just a tad.

Speaker Change: I suspect that's kind of goes hand in hand with the with rate are you seeing any pushback from residents on renewal rents.

Yeah, Michael there's a couple of components there.

Speaker Change: You identified one of them. The other one was the return to seasonality that we've talked about in Q4.

Bryan Smith: The other one was the return to seasonality that we talked about in Q4. What we're seeing right now is a little bit of negotiation from the rates that we're mailing to the ones that are signed. You can think of the negotiation ban somewhere in the 30 basis point range. So it's not huge.

Speaker Change: What we're seeing right now is.

Speaker Change: A little bit of negotiation from the rates that were mailing to the ones that are signed so you can think of the negotiation band somewhere in the.

Speaker Change: 30 basis point range, so it's not huge.

Bryan Smith: But we're having really high quality assets that are well located, and we're finding really good value that the residents are appreciating. Thank you very much.

Speaker Change: But we're having really high quality assets that are well located and we're finding really good value that the residents are appreciating.

Speaker Change: Thank you very much.

Bryan Smith: This next question comes from Brad Heffern with RBC. Hey, everyone. Thanks. I was wondering if you could provide some data on move-outs to buy a home. Where have they been recently?

Speaker Change: Our next question comes from Brad Heffern with RBC capital markets. Please state your question.

Brad Heffern: Hey, everyone. Thanks, I was wondering if you could provide some data on move outs to buy a home.

Brad Heffern: If they have been recently and where does that set versus historical levels.

Bryan Smith: And where does that sit versus the historical level? Sure. Thanks, Brad. This is Bryan.

Brad Heffern: Sure. Thanks, Brett this is Bryan.

Bryan Smith: As expected, we have seen a decrease in the proportion of our residents who are moving out to buy. In Q4, it was under 30% for the first time that I can remember, and it continued to pick down just a little bit into January into the 28% range. Historically, that's run in the mid-30s.

Brad Heffern: As expected we have seen a decrease in the proportion of our residents who are moving out to buy and.

Bryan Smith: In Q4, it was under 30% for the first time that I can remember and it continues to tick down just a just a little bit into January.

Bryan Smith: 28% range.

Surely that's run mid thirties. So it is a decrease but its still is the major reason for.

Bryan Smith: So it is a decrease, but it still is the major reason for our major destination for our residents to move out. Okay, and sort of related, can you talk about what the expectation is in guidance for turnover trends in 2024? Yeah, the right way to think about it, Brad, is it's a factor into occupancy.

Bryan Smith: Our major desk destination for residents who move out.

Bryan Smith: Okay.

And sort of related can you talk about what the expectation is in guidance for how turnover trends in 2024.

Speaker Change: Yes, the right way to think about it Brad is.

Bryan Smith: It is a factor into into occupancy I would also think about it in terms of full year recall was really beat the return of seasonality that we started to see in the late second quarter third quarter and the back half of the year. So we're comping on a full year over year basis, you'll probably see a slight uptick in turnover.

Bryan Smith: I would also think about it in terms of, you know, full year recall is really the return of seasonality that we started to see in the late second quarter and third quarter of the back half of the year. So when we're comping on a full year over year basis, you know, probably see a slight uptick in turnover full year, but really more representative of kind of the return to normal seasonality kind of post COVID environment that we settled into in the back part of 2023 and all contemplated in this year's occupancy guide in the low 96s. Our next question comes from Linda Tsai, who says, "Hi.

Bryan Smith: Full year, but really more representative of kind of be returned to normal seasonality kind of post COVID-19 environment that we settled into in the back part of 2023 and all contemplated in this year's occupancy guide in the low 90 sectors.

Thank you. Our next question comes from Linda Tsai with Jefferies. Please state your question.

Bryan Smith: Hi.

Bryan Smith: Not sure if you answered this, but just any further color on the occupancy guidance. I'm just wondering why that would stay relatively sladdish from where you are today when, you know, overall demand seems pretty solid and you aren't really being impacted by new supply. Hi Linda, this is Brian.

Linda Tsai: I'm not sure if you answered this but just any further color on the occupancy guidance I'm just wondering why that would stay relatively flattish from where you are today.

Overall demand seems pretty solid and you arent really being impacted by new supply.

Linda Tsai: Hi, Linda this is Brian.

Bryan Smith: We posted occupancy of 96% in January, and our expectation for the year is the low 96s, so we are expecting to have some absorption. Really think about it in terms of what Chris just spoke about, in that we saw a return to seasonality, and our expectation is that seasonality will persist this year. So the end of the year may have a little bit of a rebalance after the heavy spring leasing. Thanks.

Brian: We posted occupancy of 96% in January and our expectation for the year is below 96%. So we are expecting to have some absorption.

Brian: Really think about it in terms of what Chris just spoke about and that we saw a return to seasonality and our expectations that seasonality will persist this year.

Brian: So the end of the year may have a little bit of a rebalance after the heavy spring leasing season.

Speaker Change: Thanks, and then my second question is just on the negotiation range of 30 bps.

Bryan Smith: And then my second question is just on the negotiation range of 30 BIPs, which isn't that high. How much does that usually trend, and does that change a lot depending on, you know, what part of the year you're in? There's not a huge amount of seasonal variability there.

Speaker Change: Which isn't that high how much does that usually try and didn't does that change a lot depending on you know.

Speaker Change: What part of the year you're in.

Speaker Change: There's not a huge amount of seasonal variability there a lot of it has to do with the fact that our our offers are fair and they.

Bryan Smith: A lot of it has to do with the fact that our offers are fair, and they work well in the context of what's being offered for release in the marketplace at that specific time. Historically, if you go back to pre-COVID periods, it was probably a little bit tighter in the 10 basis point range. We've expanded it a little bit just in light of everything that's happening in the world, but yeah, it is still pretty close, and we're comfortable at that range. The next question comes from Jesse Letterman.

Speaker Change: They work well in the context of what's being offered for release in the marketplace at that specific time.

Speaker Change: Historically, if you go back to pre Covid periods. It was probably a little bit tighter than the 10 basis point range, we have expanded it a little bit just in light of everything that's happening in the world, but it is still pretty close and we're comfortable with that at that range.

Thank you. Our next question comes from Jesse Letterman with Zelman and Associates. Please state your question.

Bryan Smith: Hey, thanks for taking my question, and congrats on the retirement, Dave, and congratulations to Bryan and Chris on the new roles. My first question is just on February, and it's great to hear things have improved a little bit from January. How would you say the improvement feels on pricing power specifically in February and maybe what you're expecting in March compared to, you know, kind of the normal seasonal lift, maybe when seasonality was more of a thing pre-COVID to start the year? Yeah, thanks, Jesse.

Hi, Thanks for taking my question and congrats on the retirement, Dave and <unk>.

Jesse Letterman: Congrats to Brian Congrats on the new roles.

Jesse Letterman: My first question is.

On February and it's great to hear things have improved a little bit from January how would you say the improvement.

Jesse Letterman: On pricing power specifically in February and May be what you're expecting in March compared to know kind of a normal seasonal lift maybe UN seasonality was more of a thing pre COVID-19 to start the year.

Speaker Change: Yeah. Thanks, Jess Yeah, it's playing out largely as we expected the.

Bryan Smith: It's playing out largely as we expected. The acceleration of demand at the end of January is really driving excellent results in February. February is not done yet.

Speaker Change: The acceleration of demand January is really driving our excellent results in February February is not done yet.

Bryan Smith: But we are expected to enter the year in a good position 96% occupancy is certainly that. So we can push pricing as we accelerate into the spring leasing season. Great.

Speaker Change: But we expected to enter the year.

Speaker Change: In a good position in 96% occupancy is certainly that.

Speaker Change: So we can push pricing as we as we accelerate into the spring leasing season.

Speaker Change: Great. My second question is kind of on your development pipeline. It seems like your development pipeline as a percentage of gross assets as entire here over the last couple of years and more recently, presumably as other acquisition and growth avenues dry up on the current trajectory it looks like it might reach you.

David P. Singelyn: My second question is kind of on your development pipeline, and it seems like your development pipeline as a percentage of gross assets has inched higher here over the last couple of years and more recently, presumably, as other acquisition and growth avenues dry up. On the current trajectory, it looks like it might reach your 10 percent target that you've talked about. How do you think about that going forward? Have you rethought about the target, or are there any things you can do to keep that in a range you're comfortable with?

Speaker Change: 10% target that you've talked about how do you think about that going forward have you rethought about the target or are there any things you can do to keep that.

You know in a range you're comfortable with.

Speaker Change: No. That's a it's a very astute observation on that is one of a number of things.

David P. Singelyn: Thanks. No, that's a very astute observation. And that is one of a number of things that we look at in sizing the entire program. And so we want to make sure that the risk profile of our company remains the way it's been from day one, that we don't change the risk profile. The company is primarily 100% a rental company.

Speaker Change: Things that we look at our in sizing the entire program.

Speaker Change: And so we wanted to make sure that the risk profile of our company is.

Speaker Change: <unk> remains.

Speaker Change: The way it has been from day, one that we don't change the risk profile. The company is primarily 100% a rental company and that's what we want to be to maintain the balance sheet looking at we also want to have enough. It's a balancing program we want to have inadequate piped.

David P. Singelyn: And that's what we want to maintain the balance sheet looking at. We also want to have enough, it's a balancing program; we want to have an adequate pipeline to be able to have future growth in all economic cycles, as we've talked about previously. And I think we have found the balance. I think where we are is kind of where we need to be. But we will flex up and at times when there are unique opportunities. Right now, the program is that acquisitions of land and of existing assets are very difficult.

Speaker Change: To be able to have future growth in all economic cycles as we've talked about previously and I think we have found a balance I think where we are is kind of where we need to be but we will flex up and at times. When there is a unique opportunities.

Speaker Change: Right now the.

Speaker Change: The program is that acquisitions of land to end of existing assets is very difficult.

David P. Singelyn: So we're in a very, very good place. But we do consider that balance sheet. We consider the capital markets. We consider the shape and the look of our pipeline as we are structuring our development program from period to period. This next question comes from Austin Versch, of Feedback Capital. Great, thanks.

Speaker Change: So we're in a very very good place, but we do consider that.

Speaker Change: The balance sheet, we consider the capital markets, we consider the the shape and the look of our pipeline as we are structuring.

Speaker Change: Structuring our development program from period to period.

Speaker Change: Thank you and our next question comes from Austin, <unk> with Keybanc capital markets. Please state your question.

Austin: Great. Thanks.

Bryan Smith: How does the low 3% loss to lease compare to historical levels for this time of year? And on those renewals that you said you achieved for Feb and March, it sounds like you're fairly wrapped up for those months. How is the acceptance rate trending relative, you know, to, you know, what you've seen, you know, also, I guess, over this time of year? Yeah, thanks, Austin.

Austin: How does the low 3% loss to lease compare to historical levels for this time of year and on those renewables that you said you achieved for fab in March it sounds like Youre fairly wrapped up for those months, how has that acceptance rates and the acceptance rate trended relative.

Speaker Change: Uh huh.

Speaker Change: What you've seen and also I guess over over kind of as a time of year.

Speaker Change: Thanks Austin.

The the low 3% loss to lease that we see currently.

Bryan Smith: The low 3% loss to lease that we see currently, obviously, it's been a little different the past couple of years with massive acceleration and new lease rate growth. Our current position, though, is a testament to our revenue management team and the ability that we've shown to be able to recapture some of that low 3% this time of year, I think is a very healthy position. Keep in mind, there's going to be seasonal variability to that as we get into the spring leasing season. New leases tend to accelerate pretty, pretty heavily at that point, which would cause a change in that loss to lease number with the rest of the portfolio.

Obviously, it's been a little different than the past couple of years with with the <unk>.

Speaker Change: Massive acceleration in new lease rate growth.

Speaker Change: Our current position that was a testament to our revenue management team and the ability that we've shown to be able to recapture some of that.

Speaker Change: Low 3%. This time of year I think is a very healthy position keep in mind. There is gonna be seasonal variability to that as we get into the spring leasing season, new leases tend to accelerated pretty pretty heavily at that point, which would cause a change in that loss to lease number with the rest of the portfolio.

Bryan Smith: And I'm looking forward to the results from February and March. They're not done yet, but we've seen retention as expected. Probably better visibility into February than we do into March, but it's really playing out as planned.

Speaker Change: And then looking forward to the results from February and March they're not done yet, but we've seen our retention is as expected.

Speaker Change: I, probably have better visibility into February that we're new into March, but it's it's really playing out as planned.

Speaker Change: And then just anything on the rent income ratio as you kind of get a little bit maybe at the margin you know greater pushback than what you've historically seen anything on that rent to income ratio that's stretching.

Bryan Smith: And then just anything on the rent to income ratio, as you kind of get a little bit maybe at the margin, you know, greater pushback than what you've historically seen on anything on that rent to income ratio that's stretching above levels that, you know, leads you to dial back the rent increases at any point. No, in fact, we've been really pleased with the fact that incomes have kept pace with changes in rent, certainly from our applicant pool. That's something that we've seen, you know, even in the past three, four years as rents have accelerated greatly; the health of our incoming residents is very strong. And our next question is from Tyo Okusanya with D&R Tutors. Yes, good afternoon. Again, congrats to Dave and Bryan, as well as Chris.

Above levels that you know lead you to dial back the rent increases at any point.

Speaker Change: No in fact, we've been really pleased with the fact that incomes have kept pace with with changes in rent certainly from our applicant pool.

Speaker Change: That's been something that we've seen in the past three or four years as rents have accelerated greatly the health of our incoming residents is very strong.

Speaker Change: Thank you and our next question comes from Tayo Okusanya with Deutsche Bank. Please state your question.

Hi, Yes, good afternoon, again, congrats Dave and Brian as well as Chris.

David P. Singelyn: My question is around just some of the SFR legislation that's out there, the anti-SFR legislation. Wondering if you can kind of give us an update on kind of what you're hearing about some of this legislation, the possibility of it, you know, kind of moving forward in Congress, on our federal level, or even some of the things that are happening in any states that you have exposure to. Yeah. This is Dave, and thanks for your first comments.

My question is around just some of the FSFR legislation that's out there of anti Stefan legislation and wondering if you could kind of give us an update on kind of what youre hearing about some of this legislation on possibility of it you know kind of moving forward.

Speaker Change: And Congress on a federal level and some other things that are happening on any states that you have exposure to.

Speaker Change: Yeah.

Speaker Change: Tayo This is Dave and thanks for your first comments.

David P. Singelyn: Legislation, regulation, hasn't that been the story for 12 years that we have dealt with? It just keeps changing shape from year to year. Let's keep in mind where we are. We're in an election year, and there's going to be a lot of rhetoric out there. And what we have seen in the past is that there's been a lot of talk about a lot of different regulations, but very few of them have reached the finish line, especially at the federal level.

Legislation regulation Hasnt that been the story for.

Dave Christian: For 12 years that we have dealt with it just keeps changing shape from.

Dave Christian: From year to year, let's keep in mind, where we are we're in an election year and theres going to be a lot of rhetoric out there and and what we have seen over the in the past is that theres been a lot of talk about a lot of different regulations and very few of them have reached a finish.

Dave Christian: Lines, especially at the federal level with that said all of that rhetoric does get heard gets hurt and at the local levels and this is where having a robust our government affairs function and getting in front of it and having the relationships at both the federal and the.

David P. Singelyn: With that said, all of that rhetoric does get heard, gets heard at the local level. And this is where having a robust government affairs function and getting in front of it and having relationships at both the federal and the local levels is very, very important. We have invested a lot into that program. It will always, always have rhetoric out there around us. And at the end of the day, the one thing that I think you will see with American Homes is that we have always been fair. We have always been thoughtful in how we have treated people. At the end of the day, that's what's important.

Dave Christian: And the local levels is very very important to them.

Dave Christian: We have invested a lot into that program.

Dave Christian: We will always always have rhetoric out there around us and the.

Dave Christian: At the end of the day, the one thing that.

Dave Christian: You will see with the American homes as we have always been fair, we've always been thoughtful and how we have treated people at the end of the day, that's what's important.

David P. Singelyn: And we are part of the housing solution here. We are building homes. And the issue around the reason that there's so much rhetoric around regulations is the fact that housing is very expensive. Housing now is more than, you know, it's approaching 40% of many households' income, which is up from the low 30s.

And we are part of the housing solution.

Dave Christian: Here, we are building homes.

Dave Christian: And the issue around the reason that there's so much rhetoric around regulations is the fact that housing is very expensive housing now is more than.

Dave Christian: You know, it's approaching 40% of many households are income that's up from low thirties.

Dave Christian: But the problem isn't the the providers of housing the problem here is that we don't have enough housing we have a housing shortage and that has to be dealt with in that and that needs to be dealt with by actually relaxing some regulations and providing incentives to people to create that the housing necessary.

Dave Christian: Two how's the Americans in this country and so yeah. It's out there I don't see it any different I do think it's a little bit ramped up on on the well and the rhetoric side, but it really ties to the fact, we're in an election year and let's keep that in mind, what where we are in the in the <unk>.

Dave Christian: Michael.

Speaker Change: Fair enough. Thank you.

Speaker Change: Thank you Tiger.

Speaker Change: Thank you there are no further questions at this time I would like to turn the floor back over to David <unk> for closing remarks.

David: Well thank you.

David: To all of you for participating today, but just from my.

From my side.

David: Perspective, Thank you for your support over the past 12 years are over the next 10 months I will be out with Brian and Chris are hopefully meeting many of you.

David: And I look forward to that as we transition the role.

David: Brian of the CEO, so have a good day and we'll see you are see over the course of the year take care Bye bye.

Speaker Change: Thank you. This concludes today's conference all parties may disconnect have a good day.

Speaker Change: Yeah.