Q1 2024 American Homes 4 Rent Earnings Call

Greetings and welcome to American homes, four rent first quarter 'twenty 'twenty four earnings conference call.

Operator: Greetings and welcome to American Homes 4 Rent's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nicholas Fromm, Director of Investor Relations. Thank you; you may begin.

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

I would now like to turn the conference over to your host Nicholas from director of Investor Relations. Thank you you may begin.

Nicholas: Good morning, Thank you for joining us for our first quarter 2024 earnings conference call.

Nicholas Fromm: Good morning. Thank you for joining us for our first quarter 2024 earnings conference call. With me today are David Singelyn, Chief Executive Officer, Bryan Smith, Chief Operating Officer, and Chris Lau, Chief Financial Officer. So you'd be advised that this call may include fourths of 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.

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

Nicholas: 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.

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

Nicholas: All forward looking statements speak only as of today may three 2024.

Nicholas: 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.

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

Nicholas: 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.

Nicholas: 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 Dot com.

Nicholas Fromm: 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. All forward-looking statements speak only as of today, May 3, 2024. 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 press release and supplemental information package.

Nicholas: With that I will turn the call over to our CEO David <unk>.

Nicholas Fromm: 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 Singelyn.

David: Welcome everyone and thank you for joining us today 'twenty 'twenty four is off to a good start demand for single family rentals and more specifically A&H homes remains healthy in the first quarter, we delivered 43 cents a core <unk> per share representing five 8% year over.

David P. Singelyn: Welcome everyone, and thank you for joining us today. 2024 is off to a good start. Demand for single-family rentals, and more specifically, AMH homes, remains healthy. In the first quarter, we delivered $0.43 of core FFO per share, representing 5.8% year-over-year growth. As expected, the SFR normal seasonal curve is back, and our property management team is doing a great job capturing accelerating demand heading into our spring leasing season. More broadly, the ongoing macro drivers, including the national housing shortage, aging millennial demographics, and challenging home affordability dynamics, suggest steady demand into the foreseeable future for single-family rental homes. Additionally, the higher-for-longer interest rate scenario seems to be playing out, which may continue to pressure new housing supply.

Speaker Change: Your growth.

Speaker Change: As expected, yes, if our normal seasonal purpose back in our property management team is doing a great job capturing accelerating demand heading into our spring leasing season.

Speaker Change: More broadly the ongoing macro drivers, including the national housing shortage aging millennial demographics and challenging home affordability dynamics suggest steady demand into the foreseeable future for single family rental homes.

Speaker Change: Additionally, the higher for longer interest rate scenario seems to be playing out which may continue to pressure new housing supply.

David P. Singelyn: With that in mind, our focus remains on the development program where we continue to do our part in solving the housing shortage by providing new premium housing options in desirable family-friendly locations across the country. Now, to an update on sustainability. We published our sixth annual sustainability report last week, which includes updates on our progress and impact on environmental and social initiatives, such as the expansion of our solar pilot program to residents.

Speaker Change: With that in mind, our focus remains on the development program, where we continue to do our part in solving the housing shortage by providing new premium housing options in desirable family friendly locations across the country.

Speaker Change: Turning to an update on sustainability.

Speaker Change: We published our sixth annual sustainability report last week, which includes updates on our progress and impact on environmental and social initiatives such as the expansion of their solar pilot program to residents as a reminder, whether solar enabled or not are newly constructed homes are designed with sustainability in mind.

David P. Singelyn: As a reminder, whether solar-enabled or not, our newly constructed homes are designed with sustainability in mind. In fact, our 2023 deliveries on average are 54 percent more energy efficient than the typical American home. Additionally, our corporate headquarters in Las Vegas was recently awarded LEED Gold Certification for Building Green Design, Construction, and Use Practices. This represents another milestone in the company's sustainability journey, affirming AMH's continued commitment to responsible environmental practices.

In fact, our 2023 deliveries on average are 54% more energy efficient than the typical American home.

Speaker Change: Additionally, our corporate headquarters in Las Vegas was recently awarded LEED Gold certification for the building Green design construction and use practices.

Speaker Change: This represents another milestone in the company's sustainability journey affirming <unk> continued commitment to responsible environmental practices.

Speaker Change: In closing a M. H is in a great position starting out the new year.

David P. Singelyn: In closing, AMH is in a great position starting out the new year. Long-term business fundamentals are strong. Leasing momentum continues to build into the second quarter. And our development program continues to deliver new, high-quality homes into the portfolio. Now, I'll turn the call over to Bryan for an update on our operations and investment program.

Speaker Change: Long term business fundamentals are strong leasing momentum continues to build into the second quarter and our development program continues to deliver new high quality homes into the portfolio.

Speaker Change: Now I'll turn the call over to Brian for an update on our operations and investment programs.

Bryan Smith: Thank you and good morning everyone. As Dave mentioned, 2024 is off to a great start, with Demand Accelerating into Spring Leasing, Website activity is up double digits year over year, and inbound inquiries saw strong sequential pickup to support occupancy levels and leasing spreads that remain well above long-term historical averages. Further, the kickoff of our seasonal curve is evident in our sequential occupancy metrics, with March occupancy increasing over that of January and February. Turning to first quarter same-home results, rate growth was healthy, with new renewal and blended rental rate spreads of 4.8%. 5.9% and 5.6% are Spectors, and with the Same Home Average Occupied VA, 96.2%.

Brian: Thank you and good morning, everyone.

Brian: As Dave mentioned 2024 is off to a great start.

Brian: With demand accelerating into the spring leasing season.

Brian: [noise] website activity is up double digits year over year, and inbound inquiries saw strong sequential pick up to support the occupancy levels and leasing spreads that remain well above long term historical averages.

Brian: Further the kickoff of our seasonal curve is evident in our sequential occupancy metrics with March occupancy increasing over that of January and February.

Brian: Turning to our first quarter same home results rate growth was healthy with new renewal and blended rental rate spreads.

Brian: Four 8%.

Brian: Five 9%.

Brian: And five 6% respectively.

Brian: And was same home average occupied days.

Bryan Smith: This drove same home core revenue growth of 5.3%. Core Operating Expense Growth was 5.9%, also in line with our expectations. All of this resulted in same home core NOI growth of 4.9% for the quarter. First quarter operating momentum has continued into April, demonstrating the strength of the spring leasing season. Staying Home Average Occupied Days at 96.6% and New Renewal and Blended Spread of 5.1%. 5.2%. 5.2%

Brian: 96, 2%. This drove same home core revenue growth of five 3%.

Brian: Core operating expense growth was five 9% also in line with our expectations.

Brian: All of this resulted in same home core NOI growth of four 9% for the quarter.

Brian: First quarter operating momentum has continued into April demonstrating the strength of the spring leasing season.

Brian: On average occupied days of 96, 6%.

And new renewal and blended spreads of.

Brian: Five 1%.

Brian: Five 2%.

And five 2% respectively.

Brian: While strong these results are within our range of expectations and our guide remains unchanged with the bulk of the prime leasing season still ahead.

Bryan Smith: While strong, these results are within our range of expectation, and our guide remains unchanged with the bulk of the prime leasing season still ahead. Lastly... We're expanding more on our investment programs. Our strategy... driven by prudent decision-making and consistent execution remains unchanged; internally developed homes continue to be our primary method of growth. For the year, we expect the AMH Development Program to deliver between 2,200 and 2,400 homes, at average economic yields in the high 5% area after a reserve for CapEx.

Speaker Change: Lastly, expanding more on our investment programs and our strategy.

Speaker Change: Driven by prudent decision, making and consistent execution remains unchanged.

Internally developed homes continues to be our primary method of growth.

Speaker Change: For the year, we expect the Anh development program to deliver between 2200 2400 homes.

Speaker Change: That average economic yields in the high 5% area after a reserve for Capex.

In closing operations are off to a strong start as we enter our busiest period of the year.

Bryan Smith: In closing, operations are off to a strong start as we enter our busiest period of the year, and our investment programs remain in great shape. As I travel to our field offices across the country, I continue to be impressed with the hard work and dedication of our team members in providing the best resident experience in our state. Thank you for setting us up for another strong year. With that, I will turn the call over to Chris for the financial update.

Speaker Change: And our investment programs remain in great shape.

As I travel to our field offices across the country I continue to be impressed with the hard work and dedication of our team members and providing the best resident experience in our space.

Speaker Change: Thank you for setting us up for another strong year.

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

Christopher C. Lau: Thanks, Bryan, and good morning, everyone. I'll cover three areas in my comments. First, a review of our solid quarterly results. Second, an update on our balance sheet and recent capital activity. And third, I'll close with a brief update on our unchanged 2024 guidelines.

Christopher C. Lau: Thanks, Brian and good morning, everyone I'll cover three areas in my comments today first a review of our solid quarterly results second an update on our balance sheet to recent capital activity and third I'll close with a brief update around our unchanged 2024 guidance starting off with our operating results we delivered another consistent.

Christopher C. Lau: Starting off with our operating results, we delivered another consistent and solid quarter with net income attributable to common shareholders of $109.3 million, or 30 cents per diluted share. On an FFO share and unit basis, we generated 43 cents of core FFO, representing 5.8% year-over-year growth, and 40 cents of adjusted FFO, representing 6.5% year-over-year growth. From an investment standpoint, our development program continues to perform right on track and delivered a total of 469 homes to our wholly owned and joint venture portfolios during the quarter.

Christopher C. Lau: And solid quarter with net income attributable to common shareholders of $109.3 million or <unk> 30 cents per diluted share on an ethical Sharon unit basis, we generated 43 of course F O representing five 8% year over year growth and 40 of adjusted <unk> representing six.

Christopher C. Lau: 5% year over year growth.

Christopher C. Lau: From an investment standpoint, our development program continues to perform right on track and delivered a total of 469 homes for our wholly owned and joint venture portfolios during the corner.

Christopher C. Lau: Specifically, for a wholly owned portfolio, we delivered 441 homes for a total investment cost of approximately $171 million. Additionally, during the quarter, we sold 471 properties, generating approximately $145 million of net proceeds and an average economic disposition yield in the high 3 to 4% area. Next, I'd like to turn to our balance sheet and recent capital activity. At the end of the quarter, our net debt, including preferred shares to adjusted EBITDA, was $5.3 billion.

Christopher C. Lau: Specifically for our wholly owned portfolio, we delivered 441 homes for a total investment cost of approximately $171 billion. Additionally, during the quarter. We sold 471 properties generating approximately $145 million of net proceeds at an average economic disposition yield.

Christopher C. Lau: Hi, 3% to 4% area.

Christopher C. Lau: We had $125 million of cash available on the balance sheet, and our $1.25 billion revolving credit facility was fully undrawn. Additionally, following the successful green bond offering that we discussed on our last call, we fully repaid our 2014-SFR2 securitization during the quarter. As a reminder, the 2014-SFR2 securitization had an outstanding principal balance of $461 million with an expiring interest rate of 4.4% and was collateralized by approximately 4,500 properties that can now be freely reviewed by our Asset Management and Disposition Program.

Christopher C. Lau: Next I'd like to turn to our balance sheet and recent capital activity at the end of the quarter, our net debt, including preferred shares to adjusted EBITDA was five three times, we had $125 million of cash available on the balance sheet and our one point to two 5 billion revolving credit facility was fully undrawn.

Christopher C. Lau: Additionally, following the successful green bond offering that we discussed on our last call. We fully repaid our 2014, that's S F. Our chief securitization during the quarter.

Christopher C. Lau: As a reminder, the 2014 desk as if our two securitization had an outstanding principal balance of $461 million with an expiring interest rate of four 4% and was collateralized by approximately 4500 properties that can now be freely reviewed by our asset management and disposition programs and.

Christopher C. Lau: And finally, I'm happy to share that AMH was added to the S&P 400 index on March 1. This created an opportunistic window to sell approximately 3 million Class A common shares under our ATM program at an average sales price of $37.03.

Christopher C. Lau: And finally I'm happy to share that Amy was added to the S&P 500 index on March 1st this created an opportunistic window to sell approximately 3 million class a common shares under our ATM program at an average sales price of $37 and <unk>.

Operator: Given the opportunistic nature, these shares were sold on a 100% forward basis and represent future growth proceeds of $110.6 million that will be used to expand our future growth capacity. Lastly, before we open the call to your questions, I wanted to briefly touch on our 2024 guidance. As expected, the year is off to a strong start with robust demand for leasing activity. However, given that the bulk of the spring leasing season is still ahead of us, we are currently maintaining our previously provided full year 2024 earnings guidance and look forward to providing another update on this front next quarter. And with that, thank you again for your time, and we'll open the call to your questions. Operator.

Christopher C. Lau: Given the opportunistic nature. These shares were sold on a 100% forward basis and represent future gross proceeds of $110 $6 million that will be used to expand our future growth capacity.

Christopher C. Lau: Lastly, before we open the call to your questions I wanted to briefly touch on our 2024 guidance as expected the year's off to a strong start with robust demand in leasing activity.

Christopher C. Lau: However, given that the bulk of the spring leasing season still ahead of US. We are currently maintaining our previously provided full year 2024 earnings guidance and look forward to providing another update on this front next quarter.

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

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. We ask that you please limit your question to one and one follow-up. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the phone (your handset, excuse me), before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Juan Sanabria with BMO Capital Markets. Please proceed with your question.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: We ask that you please limit to one question and one follow up.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up.

Speaker Change: Your handset excuse me before pressing the star keys, one moment, please while we poll for questions.

Speaker Change: Our first question comes from one Santa Maria with BMO Capital markets. Please proceed with your question.

Juan Carlos Sanabria: Hi. Good morning, and thanks for the time.

Santa Maria: Hi, good morning, and thanks for the time, just wanted to ask about external growth and our opportunities for portfolio acquisitions.

Juan Carlos Sanabria: Just wanted to ask about external growth and opportunities for portfolio acquisitions. If there's anything out there that would be of interest, and if so, where do you think yields are? And as a subset of that question, could you give us a sense of where your development yields are on a nominal basis, pre-CAPEX, just so we can compare apples to apples, both for some of your peers who are quoting CAP or where it's at? Thank you. Yeah, good morning.

Santa Maria: If theres anything out there that would be of interest and if so where do you think yields are.

Santa Maria: And as a subset of that question could you give us a sense of where your development yields are on a nominal basis pre capex. Just so we can combat apples to apples, but for some of your peers are quoting cap rates at thank you.

David P. Singelyn: Good morning, Juan. It's Dave.

Santa Maria: Yeah. Good morning, one it's Dave.

David P. Singelyn: Let me start with the acquisition landscape as we see it. We underwrote or received tapes in the first quarter, and I'm going to break this down into two components, the National Builder and existing homes. So starting with the National Builder side, we received tapes in the first quarter containing more than 35,000 homes, about 15,000 or a little over 15,000 of those are in our markets. We analyzed those, and we analyzed them based on location, quality, what the type of asset we're looking for detached homes, and then obviously got down to price and yield.

Dave: Let me start with the the acquisition landscape that to as we see it we are in the first quarter underwrote or received tapes and I'll I'm going to break this down into two components the national builder.

David P. Singelyn: What we were seeing on the National Builder side is those that would be in the location and quality that we desire; they're in the high fours, maybe some in the low fives on an economic yield, on a nominal accounting yield, probably add 10, 20 basis points to it. We would need a 15% plus or minus decline in the transaction price at the current landscape of rents, etc., to make those deals work. Moving over to the acquisition, we are seeing a significant reduction in the supply of new homes in our markets. This is not a new story.

Dave: Existing homes, so starting with the national builder.

Dave: Ah side, we received tapes are in the first quarter contained more than 35000 homes.

Dave: About 15000 or a little over 15000 of those are in our markets.

Dave: We analyze those we analyze them based on location quality, what the type of asset is we're looking for detached homes and then obviously get down to price and yield what we were seeing in the national builder side. Ah is are those that are would be in the location and quality.

Dave: I'll do that we desire they they're in the high fours, maybe some in the low fives on an economic yield.

Dave: On a nominal accounting yield probably add 10 20 basis points to it.

Dave: We would need.

Dave: 15%, plus or minus a decline and the transaction price at the current are.

Dave: The current landscape of rents et cetera to make those deals work moving over to the acquisition are we are seeing a C.

Dave: A significant reduction in the supply of new homes in our markets. This is not a new story. This is a story, it's really been playing out since Covid started so we're about half in our top 20 markets. We see about half of the number of homes that we saw pre pandemic pricing.

David P. Singelyn: This is a story that's really been playing out since COVID started. So we're about half in our top 20 markets. We see about half of the number of homes that we saw pre-pandemic. Pricing, we haven't seen any significant reduction in pricing a little bit in a couple of our markets, mainly Midwest. And again, the way we underwrite on economic yield, those are in the high fours, low fives. We might have the ability to sharpshoot a property here and there.

Dave: We haven't seen any significant reduction in pricing a little bit in a couple of our markets, mainly Midwest and again the way we underwrite on an economic yield those are in the high fours low fives, we might have the ability to sharp shoot a property here and there we're seeing a little bit of opportunity coming into the fives. So we'll see how.

David P. Singelyn: We're seeing a little bit of opportunity coming into the five, so we'll see how that plays out. Portfolios, again, on the portfolio side, it's kind of the same as the acquisition of existing homes. On development, high fives on economic yields add 10, 20 basis points, gets you around six in that six area on a nominal NOI basis. Our next question is from Eric Wolfe with Citi. Please proceed with your question.

Dave: That plays out portfolios again on the portfolio side, it's kind of the same as the the acquisition of existing homes are on development are high fives on economic yields are at 10 20 basis points gets you around six in that.

Dave: At six area.

Dave: On a nominal NOI basis.

Dave: Yeah.

Dave: Our next question is from Eric Wolfe with Citi. Please proceed with your question.

Eric Wolfe: Hey, Thanks, it looks like you reduced bad debt and higher fees added 50 bps to your same store revenue. This quarter. So I was just curious whether you think that's sustainable going forward and whether you've seen a step down in bad debt recently.

Speaker Change: Yeah Eric.

Christopher C. Lau: Yep, Eric. Chris here. Morning. You know, look, on on on bad debt.

Christopher C. Lau: Chris here this morning. You know, look, on bad debt. Why don't we just kind of take a step back a little bit and talk about collections more broadly? You know, look, like we talked about on our last call, coming into 2024, collections and bad debt really continued to run pretty consistent with what we were seeing last year in the low 1% bad debt area. And then as we got into March, we saw some really great execution from our teams across a number of our markets that brought overall first quarter bad debt just under 1%, as you pointed out.

Christopher C. Lau: Chris here good morning.

Christopher C. Lau: You know look on on bad debt, what are you kind of take a step back a little bit and talk about collections are more broadly.

Christopher C. Lau: You know look like we talked about on our last call coming into 2020 for AR collections and bad debt really continued to run pretty consistent with what we were seeing last year in the low 1% bad debt area.

Christopher C. Lau: And then as we got into March.

Christopher C. Lau: We saw some really great execution from our teams across a number of our markets that brought overall first quarter bad debt just under 1% that you pointed out and while we're optimistic we know that there are still yes, we're talking to her thinking about local municipal court system processing times I've been talking about over.

Christopher C. Lau: And while we're optimistic, we know that there are still, you know, as we're talking or thinking about local, municipal, and court system processing times that we've been talking about over the course of the last year, not a lot has really changed there yet. So until we see more data or tangible evidence of things improving at the municipal and court system levels, it still feels a little bit too premature to change our outlook for the full year. But again, look, March is a good data point. And, as I mentioned, we're optimistic.

Christopher C. Lau: The course of the last year not a lot has really changed there yet so.

Christopher C. Lau: So until we see more data or tangible evidence of things improving at the municipal court system level. It still feels a little bit too premature to change our outlook on a full year basis, but again like March is a good data point and as I mentioned were optimistic.

Christopher C. Lau: Our next question is from Jamie Feldman with Wells Fargo. Please proceed with your question.

James Colin Feldman: Our next question is from Jamie Feldman with Wells Fargo. Please proceed with your question.

James Colin Feldman: Oh, great. Thanks for taking my question, so maybe just shifting over to the expense side.

James Colin Feldman: Great. Thanks for taking my question. So maybe just shifting over to the expense side, as you maintain your guidance, but as you think about some of the moving pieces, anything you think that may be trending higher or lower than your original expectations. And then I know we're a ways out from November, but as you think about property taxes, and millage rates, any early thoughts you can provide on how this year may play out based on conversations with your team?

James Colin Feldman: Do you I know you maintained your guidance, but as you think about some of the moving pieces anything you think that may be trending higher or lower than your original expectations.

And then I know, we're a ways out from November but you know as you think about property taxes millage rate any early thoughts you can provide on how good.

James Colin Feldman: This year May play out based on conversations with your team.

Speaker Change: Sure Good morning, Jamie Chris here.

Christopher C. Lau: Sure, more than Jamie. Chris here.

Christopher C. Lau: You know, on expenses overall, you're really no different from the start of the year. Recall that the overall expense growth outlook is six and a quarter at the midpoint for this year. Major components being property taxes in the low 7% area, which, as expected, is beginning to show some moderation compared to the last couple of years. We talked about this on our last call, but insurance growth is expected to be in the high single digits, that's based on our renewal that is done at this point. And then about 5% inflationary growth on our controllables.

Christopher C. Lau: No unexpected over all it really no different from the start of the year recall that overall expense growth outlook of six and a quarter at the midpoint for this year.

Christopher C. Lau: Major components being property taxes in the low 7% area, which as expected is beginning to show some moderation compared to the last couple of years.

Christopher C. Lau: We talked about this on our last call, but insurance growth, we're expecting to be in the high single digits. That's based upon our renewal that is done at this point.

Christopher C. Lau: And then about 5% inflationary growth on our controllable so as I mentioned our outlook on all of that is unchanged from the start of the year and then just on the on property taxes I think you hit it on the head.

Christopher C. Lau: So, as I mentioned, the outlook on all that is unchanged from the start of the year. And then just on property taxes, I think you hit the nail on the head. We're early in the property tax year, just as a reminder for folks in terms of how things play out over the course of the year, you know. Keep in mind that the majority of property tax values are received over the summer months, and that then kicks off the appeals season, which typically runs until the fall or so.

Christopher C. Lau: We're early in the property tax year, just as a reminder for folks in terms of how things play out over the course of the year keep in.

Mind majority of property tax values are received over the summer months.

Christopher C. Lau: That then kicks off appeals season, which typically runs until the fall or so.

Christopher C. Lau: And then, as you pointed out, tax rates and actual property tax bills are typically received in the fourth quarter. So we're still early. But to answer your question specifically, you know, at this point, our full-year outlook of property tax growth in the low sevens still feels good and is unchanged.

Christopher C. Lau: And then as you pointed out tax rates and actual property tax bills are received typically out in the fourth quarter. So we're still early.

But to answer your question specifically you know at this point, our full year outlook, our property tax growth in the low sevens still feels good news unchanged.

Speaker Change: Okay. Thanks for that and I guess, along those lines I mean, it sounds like your development yields have remained relatively sticky in the high fives low 6% range other than low cost basis on land are there any expense drivers that could take those yields even higher or is it pretty much just focused on the revenue side.

Christopher C. Lau: Okay, thanks for that. And I guess along those lines, I mean, it sounds like your development yields have remained relatively sticky in the high five to low 6% range. Other than a low cost basis on land, are there any expense drivers that could take those yields even higher? Or is it pretty much just focused on the revenue side? Yeah, no, I think that...

Speaker Change: Yeah, No I think that Theres a couple of things one is as you point out the land.

Christopher C. Lau: Yeah, no, I think that there are a couple of things. One is, as you point out, the land. The other thing is we are seeing the income side accelerating or growing a little bit faster than the input side. We've seen, other than land, land has been going up over the past year, but a lot of the input costs have been relatively flat in aggregate, some up, some down, but in aggregate, it's kind of flat. So I think we can grow into some better yields in the next couple of years. Our next question comes from Keegan Carl with Wolfe Research.

Speaker Change: There is a we are seeing are the income.

Speaker Change: Syed.

The accelerating or growing a little bit faster than the input side, we've seen a other than land land has been going up.

Speaker Change: Over the past year, but a lot of the input costs have been relatively flat in aggregate. So some up some down but in aggregate it kind of flat. So I think we can grow into some better yields are later in the next couple of years.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Keegan Karl with Wolfe Research. Please proceed with your question.

Keegan Grant Carl: Our next question comes from Keegan Carl with Wolfe Research. Please proceed with your question. Yeah, thanks, guys. Maybe first, this one's a little technical, but I saw you reclassify...

Keegan Grant Carl: Yeah. Thanks, guys, maybe first it seemed a little technical but I saw you reclassified 139 homes from the Seattle market to the Portland market I guess, just given the city's over three hours apart what drove that and should we be aware of any other markets, where the MSA of their classified ads is a bit of a stretch.

Bryan Smith: Yeah, Keegan, this is Bryan. I think the easiest way to look at it is we have some homes that are in the Portland MSA but are actually in Vancouver, Washington, and there's just a movement of those. But we're still managing that entire area with the same group. There's really no change, nothing to note.

Brian: Yeah. This is Brian.

Brian: I think the easiest way to look at it is we have some homes that are in.

Brian: The Portland, MSA, but are actually in Vancouver, Washington.

Brian: They're just moving out of those but we're still managing that entire area with the same group is really really not changed nothing nothing to note.

Got it and then just maybe on renewal spreads just curious where you guys would have sent out for May and June.

Bryan Smith: And then maybe on renewal spreads, just curious what you guys would have sent out for me. Yeah, so we mailed in the five to six range, similar to what I talked about on the last call for April. We saw a nice pickup of 5.2% for April, and I would expect May and June to be pretty similar at around 5% for the quarter.

Speaker Change: Yeah. So we nailed in the five to six range similar to what I talked about on the last call for for April.

Speaker Change:

Speaker Change: We saw nice pick up of five 2% for April and I would expect may and June to be dissimilar for around five for the quarter.

Speaker Change: Our next question comes from Adam Kramer with Morgan Stanley. Please proceed with your question.

Adam Kramer: Our next question comes from Adam Kramer with Morgan Stanley. Please proceed with your question.

Adam Kramer: Hey, Thanks for the time I wanted to ask you about your views on new and renewal growth, but full year you guys provided really helpful.

Adam Kramer: Hey, thanks for your time. I wanted to ask you about your views on new and renewal growth for the full year. I think you guys provided a really helpful kind of full-year outlook last quarter. I think it was renewal in the 5% area and new in the low 4s. So just kind of given the results year-to-date, I think, especially on the new side, trending a little bit better, you know, even some of the seasonally softer periods, just wondering if there's any change in the full-year outlook that you could share.

Adam Kramer: <unk> year outlook last quarter, I think it was new on the 5% area and new in the low fours.

Adam Kramer: Given the results year to date, I think especially on the new side trending a little better even some of the seasonally softer period, just wondering if theres any change in the full year outlook that you could share.

Adam Kramer: Yeah. Thanks, Adam this is Brian.

Bryan Smith: Yeah, thanks, Adam. This is Bryan.

Brian: Our expectation for the full year.

Brian: Similar we're really pleased with how new lease rate growth has played out.

Speaker Change: <unk> fantastic.

<unk> was strong at five one and we're expecting a pick up.

Speaker Change: And into May.

Speaker Change: Early indications show that.

Speaker Change: So the teams going to try and capture as much of that growth as we possibly can.

Speaker Change: We are mindful of the seasonality that we saw last year.

Speaker Change: And that's kind of factored into the two.

Speaker Change: No major change in our full year expectation yet.

Speaker Change: Still have.

Speaker Change: Bulk of our explorations to come.

Speaker Change: And we're managing those as well on the renewal side the renewals tend to be more tightly banded we started the year and are in the high fives.

Bryan Smith: Our expectations for the full year, you know, are pretty similar. We're really pleased with how the new lease rate growth has played out. Demand's fantastic. April was strong at 5-1, and we're expecting a pick-up into May, at least the early indications show that. On the renewal side, renewals tend to be more tightly banded. We started the year in the high fives. Now we're around 5%, and our expectation for the full year remains in the 5% area.

Speaker Change: We're around 5% of our expectation for the full year remains in the 5% area.

Christopher C. Lau: Hey Adam, it's Chris here, and if I could just hop in a little bit more to your question around kind of changing the outlook. You know, as we're thinking about the outlook and the guide, I would just remind you, look, it's early, right? We just initiated the guide 2 months ago, as Brian pointed out, we still have a lot of work to do, right?

Speaker Change: Hey, Adam it's Chris here, and if I could just hop in a little bit more to your question around kind of changing of the outlook as we're thinking about the outlook and the guide I would just remind look at it. It's early right. We just initiated the guide two months ago as Brian pointed out we still have a lot of work to do that.

Speaker Change: Belly of the leasing season is still ahead of us.

Christopher C. Lau: That the belly of the leasing season is still ahead of us. But with that said, as we've been talking about and mentioned in prepared remarks, we really like what we're seeing in particular. If you recall some of my comments from the start of the year, 2 of the main areas that we're really focused on when it comes to the shape of the guide over the course of the year come down to 1 newbie spread heading into the front end of the seasonal curve.

Christopher C. Lau: With that said as we've been talking about and mentioned in prepared remarks, we really like what we're seeing.

Christopher C. Lau: In particular, if you recall some of my comments from the start of the year two of the main areas that we're really focused on when it comes to the shape of the guide over the course of the year come down to one new lease spreads heading into the front end of the seasonal curve and as you just heard from Brian those are tracking really nicely through March and April and with the opportunity.

Christopher C. Lau: And as you just heard from Brian, those are tracking really nicely through March and April, and with the opportunity that he was talking about to push even further into the fives for the balance of the 2nd quarter. And then the other area that we're very focused on in the context of the guide is bad debt. And like we were just talking about, we're not out of the woods there yet, but we did see a nice data point in March. So, again, we really like what we're seeing. It's early, and the right time for us to be talking about recalibration of the guide is in the 2nd quarter afterwards.

Christopher C. Lau: He said he was talking about to push even further into the <unk> for the balance of the second quarter.

Christopher C. Lau: And then the other area that we're very focused on them in the context of the guide is as bad debt and like we were just talking about what we're not out of the woods there yet, but we did see a nice data point in March. So again, we really like what we're seeing it's early and the right time for us to be talking about Recalibration of the guide is that the second quarter afterward through peak.

Christopher C. Lau: Leasing season.

Speaker Change: Great. Thanks, Chris Brian maybe just a quick follow up if I could a little bit more of a higher level industry question, well look I think we and I'm sure others out there have a little bit of a hard time.

Christopher C. Lau: Great. Thanks, Chris, and Bryan.

Bryan Smith: Maybe just a quick follow-up, if I could, and a little bit more of a higher-level industry question. But look, I think, you know, we, and I'm sure others out there, have a little bit of a hard time finding data or seeing data on what the mom-and-pops in the SMR industry are up to in terms of pricing, and terms of supply. And look, we're a number of years out of COVID already, and I think, you know, certainly this industry has changed during COVID and, you know, coming out of COVID.

Brian: Ending data I'm seeing data on what the mom and Pops in our industry are up to in terms of pricing in terms of supply and look for a number of years that are COVID-19 already and I think you know certainly this industry has changed pre COVID-19.

Brian: I'm kind of coming out of Covid and so I'm just wondering from a supply perspective from a pricing perspective, maybe you can just look the latest view on the country how.

Bryan Smith: And so I'm just wondering, from a supply perspective, from a pricing perspective, maybe just what's the latest view on kind of how pricing shapes up relative to the mom-and-pop kind of competitors of yours who, you know, of course, make up the vast majority of this industry?

How pricing shapes up relative to the mom and pop kind of competitors of yours, who of course make up the vast majority of this industry.

Brian: Yeah. This is Brian that's a very good question in that.

Bryan Smith: Yeah, thank you. This is Bryan.

Brian: Early on we had when we started this business we saw some resistance.

Brian: Because it's mom and Pops traditionally hadn't raised perhaps as an example.

Brian: Our warrant werent out kind of pricing directly to market overtime, I think they've migrated into a strategy that that's closer to ours.

Brian: One difference, though that I see is the value proposition that institutional managers provide in terms of the really good underlying services platform.

Brian: A lot of investment into the homes, those both aesthetically and functionally with flooring and upgraded appliances and so forth.

It's been recognized and we do have some pricing power on that side.

Brian: Data is difficult with single family rentals as compared to other asset classes like multifamily, but it has gotten better and there's a lot of transparency on sites like Zillow and the mom and Pops are really following soon so the gap isn't as great as it was before.

Brian: But it does allow the institutions kind of lead that charge.

Brian: Our next question is from Brad Heffern with RBC capital markets. Please proceed with your question.

Bradley Barrett Heffern: Yeah, Thanks, Bryan occupancy by quite a bit in March and it looks like it stayed there in April was that an intentional decision to try and gain some occupancy where you gave back something on the pricing side and then are you expecting to get back some of that occupancy.

Bradley Barrett Heffern: As peak leasing season picks up.

Speaker Change: Thank you Brad.

Bryan Smith: That's a very good question. In the early days, when we started this business, we saw some resistance because mom and pops traditionally hadn't raised rents, as an example, or weren't out pricing directly to market. Over time, I think they've migrated into a strategy that's closer to ours. The main difference, though, that I see is the value proposition that the institutional managers provide, in terms of a really good underlying services platform, a lot of investment into the homes, both aesthetically and functionally, with flooring and upgraded appliances and so forth, has been recognized, and we do have some pricing power on that side.

Bryan Smith: Data is difficult with single-family rentals as compared to other asset classes like multifamily, but it has gotten better, and there's a lot of transparency on sites like Zillow, and mom and pops are really following suit. So the gap isn't as great as it was before, but it does allow the institutions to kind of lead that charge.

Speaker Change: We were really pleased at how the first quarter played out I've talked about it in the past our expectation of a really nice spike in demand in January.

Bradley Barrett Heffern: Our next question is from Brad Heffern with RBC Capital Markets. Please proceed with your question.

That demand starts electronically on the website and the tours and Theres a timing effect before we start to pick up occupancy.

Bradley Barrett Heffern: Yeah, thanks. Bryan, occupancy spiked quite a bit in March, and now it looks like it stayed there in April. Was that an intentional decision to try and gain some occupancy where you gave back something on the pricing side? And then are you expecting to give back some of that occupancy, you know, as peak leasing season picks up?

Speaker Change: Excuse me will pick up into into March we're very pleased with that because we did it in the context of really strong new and renewal rate growth all the while not offering concessions either on our lease up of our new communities or scattered sites. So theres a lot of strength coming into March and into April.

Bryan Smith: Thank you, Brad. We were really pleased with how the first quarter played out. I've talked about it in the past, our expectation of a really nice spike in demand in January. That demand starts, electronically, on the website and then in the tours, and there's a timing effect before we start to pick up occupancy.

Bryan Smith: You can see that we'll pick up into March. We're very pleased with that because we did it in the context of really strong new and renewal rate growth, all the while not offering concessions, either on our lease up in our new communities or in our scattered sites.

Speaker Change: We're hopeful that that demand continues it looks really good into may.

Strong occupancy through the second quarter, but as Chris mentioned and as we've talked about we do have a lot of explorations towards the center part of the year end.

Bryan Smith: So there's a lot of strength coming into March and into April, and we're hopeful that that demand will continue. It looks really good into May, with strong occupancy through the second quarter. But as Chris mentioned, and we've talked about, we do have a lot of expirations towards the center part of the year. And with the seasonality that we saw last year, we're still kind of waiting to see exactly what the shape of occupancy looks like for the year, but we're in a great place right now.

Speaker Change: And with the seasonality that we saw last year are still kind of waiting to see exactly what the shape of occupancy looks like for the year, but where we're in a great place right now.

Speaker Change: Okay.

Bryan Smith: Okay, and I noticed in the release, there were some properties that were classified as newly constructed homes to be disposed of. Presumably, you're not trying to do any home building for sale, so I'm just curious what those are.

Speaker Change: I noticed in the release there were some properties that were classified as a newly constructed homes to be disclosed.

Speaker Change: Presumably youre not trying to do for sale homebuilding. So I'm just curious what those are.

Speaker Change: Yeah, I think and be addressed this already but it's just an extension of what we do in our asset management function.

Bryan Smith: Yeah, I think we have addressed this already. But it's just an extension of what we do in our asset management fund. No different than an existing home, we look at the markets for all of our homes in each of the markets. It's a very small number, I think it's 20, we've delivered about 10,000 homes. We are not changing course in any way; we are not building for sale. We are selling these like we do any disposition through our disposition program, so we'll sell them on the MLS.

Speaker Change: No different than any existing home, we look at are the the markets and in all of our homes in each of the markets. It's a very small number I think it's 20, we delivered about 10000 homes. We are not changing course in any way we are not building.

Speaker Change: Building for sale, we were selling needs like we do any disposition through through our disposition program. So we will sell it sell them on the MLS. So theres no change no. There's no. There's nothing that's changed from last quarter to this quarter.

Bryan Smith: There's no change; there's nothing that's changed from last quarter to this quarter.

Speaker Change: Okay.

Speaker Change: Our next question is from Jesse Letterman with Zelman and Associates. Please proceed with your question.

Jesse T. Lederman: Our next question is from Jesse Lederman with Zellman & Associates. Please proceed with your question.

Jesse T. Lederman: Hey, nice quarter, and thanks for taking my questions. First one's on the renewal side, renewal rent growth, saw a little bit of a step lower in April, still at a really healthy level, but just curious, did that have anything to do with increased pushback or negotiation from tenants on renewals? Is that something you can quantify, or is there anything you could point to that drove that step lower from a renter health perspective or affordability perspective?

Jesse T. Lederman: Hey, nice quarter and thanks for taking my questions.

Jesse T. Lederman: First one's on the renewal side.

Jesse T. Lederman: Rent growth.

Jesse T. Lederman: A little bit of a step lower in April, but still at a really healthy level, but just curious did that have anything to do with increased pushback or negotiation from tenants on renewals is that something you may quantify or is there anything you could point to that drove that stuff that a step lower from a rent or health perspective or affordability perspective.

Bryan Smith: Thank you, Jesse. This is Bryan.

Jesse T. Lederman: Thank you Jeff. This is Bryan I know that's not the case at all in fact, we talked on the last call about where we're mailing April and you can kind of carry that consistency forward into into May and June healthy renewal rates around five into.

Bryan Smith: Into the time of year, we see a peak in explorations are some of the seasonality that we saw from last year.

Bryan Smith:

Bryan Smith: Thought those were steady consistent and appropriate increases.

Bryan Smith: Our revenue management team has gotten very sophisticated and is managing the seasonality of that return last year very well in terms of pushback from our residents.

Speaker Change: No change.

Speaker Change: Obviously, it's playing out nicely with with the strong occupancy that we're seeing.

Speaker Change: The retention and the 10-Q.

Speaker Change: Great that's that's.

Speaker Change: Great to hear.

Speaker Change: Last question with more homes unencumbered or would it be fair to expect an increase year over year and 24 four.

Speaker Change: Disposed units and maybe even into 25 as well.

Bryan Smith: No, that's not the case at all. In fact, we talked on the last call about where we're mailing April. And you can kind of carry that consistency forward into May and June, with healthy renewal rates around five, into the time of year where we see a peak in expirations. Some of the seasonality that we saw from last year, we thought those were steady, consistent, and appropriate increases. Our revenue management team has gotten very sophisticated and is managing the seasonality that returned last year very well. In terms of pushback from the residents, there's been no change. Obviously, it's playing up nicely with the strong occupancy that we're seeing and the good retention into TQ.

Speaker Change: Morning, Jessy Chris here.

Jessy: Good question and ties back to some of the aspects of the disposition program. The strategy, we've been talking about the last couple of quarters.

Jesse T. Lederman: Great. That's great to hear. Last question: With more homes unencumbered, would it be fair to expect an increase year over year in 24 for disposed units and maybe even into 25 as well?

Jessy: You know look we think that we've got tremendous opportunity to really lean into the disposition program, which is exactly what we've been doing we've been seeing great traction.

Jessy: Traction.

Jessy: As a reminder, this quarter, we sold 471 homes and.

Jessy: And on a full year basis, we could see ourselves selling in recycling and call it $4 million to $500 million of capital on a full year basis.

Speaker Change: Yeah, I think it's really just a reflection of the fact that you know our country as a major lack of housing our disposition supply is moving really quickly.

Speaker Change: We're achieving sales prices that are at or near asking prices right and so you would think that there's great opportunity. There. That's a big part of this strategy are to our thought.

Speaker Change: First behind paying off the 2014 dash to securitization in the first quarter that unencumbered about 4500 units.

Speaker Change: And then as our second securitization maturing. This year has paid off that will unencumber. Another 4000 to 4500 as well so both of those will unlock opportunities for further asset management review and potential disposition, but also as we think about the timing on that we should keep in mind that that's not going to immediately be an immediate overnight.

Speaker Change: Disposition opportunity the way that we are exiting through these homes is via the MLS which means you need to have vacant units.

Speaker Change: And my 96% plus of our homes are not vacant we need to let leases roll tenants move out and then that gives us the opportunity to work those homes through our disposition program.

Speaker Change: Our next question comes from Michael Goldsmith with UBS. Please proceed with your question.

Michael Goldsmith: Good afternoon, and thanks, a lot for taking my question. It seems like demand is.

Christopher C. Lau: Good morning, Jesse. Chris here.

Michael Goldsmith: Good right now, but wondering if there's any indications of increasing price sensitivity or indications.

Michael Goldsmith: Won't be able to keep pushing rates at similar levels to what you did in the first quarter.

Michael Goldsmith: Okay.

Michael Goldsmith: Michael This is Brian I'm, sorry, I had a hard time, we might have a bad connection.

Speaker Change: Again, very muted and we could not understand the question can you repeat it please.

Christopher C. Lau: Good question. It ties back to some of the aspects of the disposition program strategy that we've been talking about in the last couple of quarters. You know, look, we think that we've got a tremendous opportunity to really lean into the disposition program, which is exactly what we've been doing. We've been seeing great traction.

Michael Goldsmith: Yeah, absolutely. It seems that demand is very good but wondering if there's any indications of increasing price sensitivity or indications you won't be able to keep pushing rate and at similar levels to what you did in the first quarter.

Speaker Change: Okay. Thank you bye bye.

Speaker Change: At this time no demand has been fantastic.

Speaker Change: As I said it kind of peaked or started to peak accelerated as we expected in the first quarter it.

Speaker Change: It continues to be very strong into Q2.

Speaker Change: Retention is good the feedback from our residents on renewal offers are strong and really no change from.

Speaker Change: Our expectations and where we ended Q1.

Speaker Change: Everything is pointing in the right direction, and we really really like what we're seeing from the demand side.

Speaker Change: Yeah, Michael It's Dave Let me just add a couple of items that will support that I mean.

Christopher C. Lau: You know, as a reminder, this quarter, we sold 471 homes. And on a full year basis, we could see ourselves, you know, selling and recycling called four to $500 million of capital on a full year basis. You know, I think it's really just a reflection of the fact that, you know, our country has a major lack of housing. Our inventory supply is moving really quickly. And then as our second securitization maturing this year is paid off, that'll unencumber another 4,000 to 4,500 as well.

Dave: We are today any country that lacks adequate housing.

Christopher C. Lau: So both of those will unlock opportunities for further asset management review and potential disposition. But also, as we think about the timing on that, we should keep in mind that that's not going to be an immediate, overnight, you know, disposition opportunity. The way that we are exiting these homes is via the MLS, which means you need to have vacant units. You know, keep in mind, 96% plus of our homes are not vacant. We need to let leases roll, tenants move out, and then that gives us the opportunity to work those homes through our disposition program.

Michael Goldsmith: Our next question comes from Michael Goldsmith with UBS. Please proceed with your question. Good afternoon. Thanks a lot for joining us.

Dave: And the demand for our housing is significantly greater than what we can provide to resin. So were seeing many many qualified applications for every available house.

Dave: With that said you know there is there are limits on on rate increases.

Michael Goldsmith: Good afternoon. Thanks a lot for taking my question. Seems like demand is really good right now, but I was wondering if there's any indications of increasing pipe sensitivity or indications that you won't be able to keep pushing rates at similar levels to what you did in the first quarter.

Dave: The other thing to keep in mind that also gives us comfort of the longevity of it is that we are in markets throughout the country, where we see population and employment growth greater than the national average so.

Dave: Not only do we have a housing shortage today in the markets that we're in that shortage is building.

Speaker Change: Thank you very much for that and my follow up question is the turnover has been trending upwards modestly is this still part of the post COVID-19 normalization and how about a pickup in home sales impact the portfolio.

Bryan Smith: Michael, this is Bryan. I'm sorry. I had a hard time. We might have a bad connection. Yeah, you're coming in very muted, and we could not understand the questions. Can you repeat them, please?

Speaker Change: Yeah.

Yeah.

Michael Goldsmith: Yeah, absolutely. It seems that demand is very good, but I'm wondering if there's any indications of increasing price sensitivity or indications you won't be able to keep pushing prices at similar levels to what you did in the first quarter. Yeah, thank you, Michael. I got it this time.

Speaker Change: It's just the natural.

Speaker Change: Of course of events with some of the seasonality that we saw continuing where we are.

Speaker Change: Or.

Posting really nice renewal rate growth.

The pick up in the trend of increased move outs.

Speaker Change: I don't see it as permanent thing.

Bryan Smith: No, demand has been fantastic. As I said, it kind of peaked or started to peak, accelerated as we expected in the first quarter. It continues to be very strong into Q2, retention is good, the feedback from our residents on renewal offers is strong, and really no change from our expectations and where we ended Q1. Everything is pointing in the right direction, and we really like what we're seeing from the demand side.

Speaker Change: We are looking strong into Q2.

David P. Singelyn: Michael, it's Dave. Let me just add a couple of items that will support that. I mean, we are today in a country that lacks adequate housing, and the demand for our housing is significantly greater than what we can provide for residents. So we're seeing many, many qualified applications for every available house. With that said, there are limits on rate increases. The other thing to keep in mind that also gives you comfort about its longevity is that we are in markets throughout the country where we see population and employment growth greater than the national average. So not only do we have a housing shortage today in the markets that we're in, that shortage is building.

There's nothing there that is a cause for alarm.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Anne Chiang with Green Street. Please proceed with your question.

Bryan Smith: Thank you. Yeah

Michael Goldsmith: Thank you very much for that. And my follow-up question is that turnover has been trending upwards modestly. Is this still part of the post-COVID normalization? And how might a pickup in home sales impact the portfolio?

Anne Chiang: Hey, good afternoon.

Bryan Smith: Yeah, I think it's just the natural course of events with some of the seasonality that we saw continuing where we're hosting really nice renewal rate growth and a pickup in the trend of increased move outs. I don't see it as a permanent thing. We're looking strong coming into Q2. There's nothing there that's any cause for alarm.

Anne Chiang: On how bad debt as a percent of revenues has trended in recent quarters in Atlanta.

Anne Chang: Our next question comes from Anne Chang with Green Street. Please proceed with your question. Hey, good afternoon. It's a question on how bad debt as a percent of revenues has trended.

Anne Chiang: And are you anticipating pressure on rents or occupancy in that market. This year as that define apartment operators worked through elevated levels of detection.

Brian: Yeah. This is Brian.

Brian: Yeah, I am. This is Brian.

Brian: Atlanta is a key market for us and as we've talked about on prior calls its one that were really following closely from a delinquency resolution perspective, it's one that we've had some delays both on the court systems must pull level.

Brian: Atlanta is a key market for us, and as we've talked about in prior calls, it's one that we're really following closely from a delinquency resolution perspective. It's one that We've had some delays, both in the court systems and at the municipal level, with this resolution. It's important, as a result of those delays and those slowdowns, we have seen elevated bad debt relative to the rest of the portfolio, but we think that's going to be temporary in nature, and once those delays get worked through the system, we expect it to fall back in line with the rest of the market. Great. Thanks so much for that.

Brian: With this resolution it's important the because the result of those delays and those slowdowns, we have seen elevated bad debt relative to the rest of the portfolio.

Brian: But we think that's going to be temporary in nature and once those delays get worked through the system. We expect that to fall back in line with the rest of the markets.

Brian: Yeah.

Great. Thanks, so much for that and Oh, gosh, I don't know if any markets havent seen it.

Brian: And a follow-up question on whether any markets have seen a deterioration in bad debt in recent months? No, I think I should go further back to Chris's earlier remarks. We had some really fantastic collection efforts in March, and some of the... The markets that were not affected by these municipal slowdowns that I'm referencing, so nothing negative on the bad debt side other than the kind of continued things that we saw last year and some of the ones that are a little slower than historical averages.

Brian: Your Asian and bad debt.

Brian: Recently.

Brian: No I think I think the further or back to Chris's earlier remarks, we had some some really fantastic collection efforts and in March and some of the.

Brian: The markets that were not affected by these municipal slowdowns that I'm referencing.

So nothing negative on the bad debt side other than kind of a continued things.

Brian: Things that we saw last year and some of the ones that are that are a little slower than historical averages.

Brian: Our next question is from Tayo Okusanya with Deutsche Bank. Please proceed with your question.

Omotayo Tejumade Okusanya: Our next question is from Teo Okusanya with Deutsche Bank. Please proceed with your question.

Omotayo Tejumade Okusanya: Hi, yes good.

Omotayo Tejumade Okusanya: Hi, good afternoon. Congratulations on not paying down the securitization. I'm curious, if we look out 12 months from now, could you give us a better picture of what your capital stack would likely look like?

Omotayo Tejumade Okusanya: Good afternoon, congrats on not paying down to securitization I'm curious.

Omotayo Tejumade Okusanya: Look out 12 months from now.

Omotayo Tejumade Okusanya: Could you give us a better picture of what your capital stack would likely look like.

Sure Great question Tayo, Chris here.

Christopher C. Lau: Sure. Great question, Tayo. Chris here.

Omotayo Tejumade Okusanya:

Christopher C. Lau: [inaudible] You know, look, we have one more securitization maturity this year, and technically, that matures in the fourth quarter. The general game plan, like we talked about last quarter, is that we would see that being refinanced out into the unsecured bond market. Keep in mind that, depending on the interest rate and capital markets environment, we have the ability to refinance and warehouse that via, you know, a combination of retained cash flow, disposition proceeds, and then capacity comfortably off of our credit facility.

Chris: You know look the best way to think about it is we have one more securitization maturity this year.

Chris: You know that technically matures in the fourth quarter.

Chris: General game plan like we talked about last quarter.

Chris: Is that we would see that being refinanced out into the unsecured bond market.

Chris: Keep in mind that you know depending on interest rates and capital markets environment, we have the ability, where we could refinance and warehouse that via combination.

Chris: <unk> retained cash flow disposition proceeds and then capacity comfortably off of our credit facility.

Christopher C. Lau: And then we have two more securitizations that are technically 30-year maturities with anticipated repayment opportunities in 2025. If they're not repaid, they'll revert to market prices, but we're able to repay those next year with the general game plan, again, like we've been talking about, to get those refinanced into the unsecured bond market, which would move the balance sheets to a 100% unencumbered balance sheet by the end of 2025.

Chris: And then we have two more securitizations that are technically 30 year maturities.

Chris: Anticipated repayment date opportunities in 2025.

Chris: If if theyre not repaid repriced to market pricing, but were able to repay those next year with the general game plan again like we've been talking about to get those refinanced into the unsecured bond market.

Chris: Which move would move the balance sheets to a 100 per cent unencumbered balance sheet by the end of 2025.

Speaker Change: Gotcha that's helpful.

Omotayo Tejumade Okusanya: Gotcha, that's helpful. And then from an external booth perspective, I mean, get everything you're talking about on the MLS side. I know in the past, we've always asked you guys if you'd be interested in doing things with developers and just kind of thinking if your thoughts around any of that have changed and also how you also kind of feel about third-party asset management.

Speaker Change: Then from an external growth perspective, I mean, you get everything you're talking about on the on the MLS side I know in the past. We've always asked you guys would be interested in doing things with you know.

Speaker Change: Or is it just kind of thinking that if your thoughts around any of that has changed and also how you also kind of cool about third party asset management.

Speaker Change: Yeah.

Speaker Change: Yeah.

Dave: Yeah, it's Dave. Let me start with the third party developers. You may recall going back a number of years ago that we were historically active in using third party developers. That's how we started our development program working into the program that we have today.

Speaker Change: Tayo its Dave.

Dave: Let me take the first being the third party developers.

Dave: You may recall going back a number of years ago that we have been historically active in using third party developers. That's how we started our development program working into the program that we have today.

What we see today is is two things and the way we look at our development and growth programs. Overall is first our development program provides us a assets in new homes that are better located in better built.

Dave: And then we can get from National Homebuilders are we are buying land that is contiguous.

Dave: We are buying land that is contiguous to national home builders, but it's the national home builders' lots that they're using for retail sale. It gives us just a better product. The yields are better, but we're not paying any development fees. We have the economies today because of the size of our program.

Dave: Contiguous to national Homebuilders, but it's the national homebuilders lots that they're using for retail sale.

Dave: So it gives us just a better product.

Dave: And the yields are better, but we're not paying any development fees. We have the economies are today because of the size of our program. We are in the top 40 developers in the United States. So we're getting the efficiencies and the economies of scale that national Homebuilders get so we're not paying a development profit there.

Dave: For the.

Dave: The investment side is much less for the same product that we would be able to buy from the national Homebuilders. We don't we continue let me say it. This way we continue to look at the National Homebuilders, They provide additional incremental project.

Dave: We are in the top 40 developers in the United States. We continue to look at national home builders. They provide additional incremental product to us when the time is right. We can be patient and disciplined in acquiring assets.

Dave: To us when the time is right, we can be patient and disciplined in acquiring assets I previously indicated that.

Dave: During the first quarter, we actually looked at 35,000 homes. That's what we received from all the national homebuilders, from the Lennars and the D.R. Hortons, Pulteys, and all of the others.

During the first quarter, we actually looked at 35000 homes. That's what we received from all of the National Homebuilders from La <unk> and the D. R Horton pulp DS and and all of the others are 15.

Dave: Fifteen thousand of those were in our markets, and about half of those we'd actually seen before on tapes. So they're kind of retreads; 7,500, 8,000 were new offerings to us. We made bids on them, but we have to make bids to get to the yields that we are looking at being in the mid to high fives of a 15 plus or minus percent discount to what they're asking. At asking price, they're in the upper four, some maybe five or low fives, but generally in the upper four.

Dave: <unk> 15000 of those were in our markets are about half of those we've actually seen before on tapes. So they're kind of retrenched 70, 508000, new offerings to us we made bids on them, but we have to make bids to get to the yields that we are looking at being in the mid to high <unk>.

Dave: Lives of a 15, plus or minus percent discount to what they're asking are.

Dave: Asking price there in the upper four some may be five or low fives, but generally in the upper four so today, we are not acquiring many homes from the national builders.

Dave: So today we are not acquiring many homes from the national builders. I think there are a couple small ones that we were able to put under contract. In prior quarters that did close this quarter, that met our requirements, but it's a very, very material number that we're acquiring. I think your last question, if I recall correctly, Taya, was regarding third-party management. We did look at this, you may recall; we spent two years evaluating it.

Speaker Change: I think there's a cut.

Speaker Change: Couple of small ones that we were able to put under contract.

Speaker Change: Hum.

Speaker Change: In prior quarters that did close this quarter that met our requirements, but its very very material number that we're acquiring.

Last question, if I recall correctly Tayo was guarding our third party management. We did look at this you may recall, we spent two years evaluating it.

Speaker Change: We did that.

Dave: We did that a couple of years ago and, just reiterating comments from when we did that test, we concluded that this is a low to, you know, very low-margin business with a lot of distractions for our program. We decided that the incremental revenue was not beneficial in relationship to the distraction to our operations. So we see more opportunities in our development program and in our core business, and that's what we're focused on. I hope that answers that question.

Speaker Change: Couple of years ago, and just reiterating comments from when we did that test and we concluded that a this is a low to very low margin business with a lot of distractions for our program, we decided that it's not.

Speaker Change: The incremental revenue was not beneficial in relationship to the distraction to our operation. So we see more opportunities in our development program and in our core business and that's what we're focused on and so I.

Speaker Change: I hope that answers that.

Yeah.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Anthony Powell with Barclays. Please proceed with your question.

Anthony Powell: Our next question comes from Anthony Powell with Barclays. Please proceed with your question.

Anthony Powell: Hi, Good morning, just a question on home prices in certain markets like Tampa, Florida, and whatnot that we're seeing I guess imports at home values falling with making housing more affordable and those markets are you seeing any changes in your move outs to home ownership by market.

Anthony Powell: Hi, good morning. I guess the question on home prices in certain markets like Tampa, Florida, or whatnot. We're seeing, I guess, reports of home values falling, making housing maybe more affordable in those markets. Are you seeing any changes in your move out to home ownership by market as this kind of this trend evolves?

Anthony Powell: This trend walls.

Anthony Powell: Yeah.

Speaker Change: Yes, Thank you Anthony.

Anthony Powell: Thank you, Anthony. We can't. We can't.

Speaker Change: We track it.

Anthony Powell: Q1 represented our lowest proportion of the move out divide that we've seen; it's about 27%. For context... From a historical perspective, it was in the mid-30s. It does vary from region to region, but we didn't see any regions that had anything that would have surprised you. We have a lower percentage moving out in some of the areas like Las Vegas and Seattle, where there's just a huge gap between the cost of ownership and the cost of renting a comparable home. Nothing of note in Tampa lately. We have seen, in a couple of markets that Dave mentioned earlier, some prices coming down, but it hasn't been anything dramatic or of note.

Speaker Change: Move out reasons very closely and Q1 represented our lowest our lowest proportionately.

Speaker Change: Proportionately move out to buy that we've seen in some 27%.

Speaker Change: For context.

Speaker Change: I'll start perspective, it was in the mid thirties.

Speaker Change: It does vary region to region.

Speaker Change: But we didn't see any reasons that had anything that would have surprised you.

Speaker Change: We have a lower percentage moving out and some of the areas like Las Vegas.

Speaker Change: And Seattle, where there's just a huge gap between the cost of ownership.

Speaker Change: Cost of renting a comparable home nothing of note in Tampa lately.

Speaker Change: We have seen a couple of markets as Dave mentioned earlier, some some prices coming down, but it hasn't it hasn't been anything dramatic or though.

Okay. Thanks, and then maybe one broad one I mean I think.

Anthony Powell: Thanks. And maybe one broad one.

Anthony Powell: I mean, I think Justice touched on this earlier, but there's been more media around, I guess, institutions, you know, private equity or hedge fund or institutional ownership of homes. As a leader in the industry, how do you kind of respond to this? How are you talking to your business people? How are you lobbying? How are you responding to kind of the overall media attention being paid to, I guess, your business now?

Speaker Change: Tuck on Australia, everybody, who spend more media around yes.

Speaker Change: Yeah.

Speaker Change: <unk> equity hedge fund or an alternate of homes.

Speaker Change: As a leader in the industry, how do you kind of responding to this.

Speaker Change: Are you talking to your Congress people, how you're lobbying how are you responding side the overall media.

Speaker Change: And being paid to I guess your business now.

Speaker Change: Okay.

Dave: Anthony It's Dave.

Dave: Anthony, it's Dave. Yeah, you're right. There's been a lot of press around a number of bills, predominantly three bills, the ones that you mentioned, the Stock Predatory Investing Act and the End hedge fund control, and there's the American Neighborhoods Act. It's interesting that all of these have been introduced by individuals that are up for re-election. I look at them as campaign bills or messaging bills. These bills have not even been read; they haven't received votes even in committee. They're not moving through the committee process.

Anthony Powell: Yeah, Youre right Theres been a lot of press around a number of bills are predominantly a three bills are the ones that you mentioned are stopped predatory investing act in the Ed.

Dave: In hedge fund control.

Dave: And then there's the American neighborhoods at it's interesting all of these are have been introduced.

Dave: By individuals that are up for reelection I look at them and look at them as campaign builds or messaging bills.

Dave: These bills have not even.

Dave: They haven't received boats even in committee, they're not moving through the committee.

Dave: And I don't see any movement on these bills, considering that this is an election year, and Congress, at the federal level, really needs to address some must-pass legislation around funding bills, etc. Contrast that to what actually has been accomplished, and that's at the state level. And there's been some successful legislation passed over the last three to six months promoting housing. There are pro-housing bills, both from an operational standpoint, like dealing with squatters, and also with respect to growth, dealing with zoning and those type of items, construction to address housing availability.

Dave: And I don't see any movement on these bills are considering that this is an election year and Congress at the federal level really needs to address some must pass legislation around funding bills et cetera.

Dave: Contrast that to what actually has.

Dave: <unk> been accomplished and that's at the state level and Theres been some successful legislation passed over the last three to six months.

Dave: Promoting housing their pro housing bills are those from an operational standpoint.

Dave: Like dealing with squatters and also with respect to growth the dealing with zoning and.

Dave: Those type of items construction to address the housing.

Dave: Availability and this isn't just one bill.

Dave: And this isn't just one bill out there. I'm looking for the list of states, but it's about 6 or 8 states, Georgia, Florida, Washington, and others that have passed very pro-housing bills in the last 6 or so months. And so we see the fact that the states recognize that there is a housing shortage and that housing shortage is creating affordability issues, and it's trying to be addressed. But it's being addressed at the state level, which is where it should be addressed.

Dave: Out there. This is many many bills in many states.

And just looking at it.

Dave: Looking for the list of states, but its about six or eight states, Georgia, Florida.

Dave: Washington, and others that are past very pro housing bills in the last six two.

Dave: Six or so months and so we see the fact that the states recognize that there is a housing shortage and that housing shortage is creating affordability issues and it's trying to be addressed.

It's being addressed at the state level, which is where it should be addressed.

Dave: Yeah.

Speaker Change: We have reached the end of the question and answer session I'd now like to turn the call back over to management for closing comments.

Operator: We have reached the end of the question and answer session. I'd now like to turn the call back over to management for closing.

Nicholas Fromm: Thank you, Operator. And thank you to all of you for attending today's call. We're grateful for your participation and interest in AMH. I look forward to seeing many of you at NARIT in June.

Speaker Change: Thank you operator, and thank you to all of you for attending today's call were grateful for your participation and interest in in a M. H.

Speaker Change: I look forward to seeing many of you at NAREIT in June. Thank you for your time today Goodbye.

Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.

Operator: Thank you for your time today. Goodbye. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator: Today's conference has ended. Please disconnect your lines at this time. Thank you.

Speaker Change: Today's conference has ended please disconnect your lines at this time. Thank you.