American Homes 4 Rent at Citi’s Property CEO Conference: Strategic Growth Plans

On Tuesday, March 4, 2025, American Homes 4 Rent (NYSE: AMH) presented at Citi’s 30th Annual Global Property CEO Conference 2025, highlighting its strategic growth in the single-family rental sector. The company emphasized robust market fundamentals while addressing potential challenges such as policy changes and cost pressures.

Key Takeaways

• American Homes 4 Rent focuses on the single-family rental market’s growth, driven by limited housing supply and strong millennial demand.
• The company plans to recycle $400 million to $500 million in capital through home sales in 2025.
• AMH is targeting 2,300 new home deliveries in 2025, maintaining its 2024 pace.
• Property tax growth is expected to stabilize, with particular attention to changes in Florida, Georgia, and Texas.

Financial Results

• 2024 Performance:

- Sector-leading growth in Net Operating Income (NOI) and Funds From Operations (FFO).

• Occupancy Rates:

- January saw a same-home average occupancy of 95.6%, increasing to 95.8% in February.

• Leasing Activity:

- Renewal leases remain steady, while new leases showed acceleration in early 2025.

• 2025 Guidance:

- Same-home revenue growth projected at a midpoint of 3.5%.

- Same-home NOI growth expected at 3.25% at the midpoint.

• Capital Plan:

- Refinancing plans include moving final securitizations into the unsecured bond market.

Operational Updates

• Development Program:

- Consistent with 2024, 2,300 home deliveries are planned for 2025.

- Focus on optimizing floor plans and materials for efficiency.

• Disposition Strategy:

- Plans to sell $400 million to $500 million in homes, primarily to end-user buyers.

- Disposition cap rates are expected to be in the 3% range.

• Market Dynamics:

- January saw a 30% increase in foot traffic and a 20% rise in leasing activity, with February setting a company leasing record.

Future Outlook

• Strategic Focus:

- Aiming for revenue growth above inflation levels and maintaining expenses at or below inflation.

- Continued margin expansion expected.

- Capital recycling from underperforming assets into new developments.

• Supply Considerations:

- Monitoring build-to-rent and shadow supply, with positive signs in markets like Phoenix and Tampa.

• Property Taxes:

- Anticipating growth to return to long-term averages of 4% to 5%, with careful monitoring of policy changes in key states.

Q&A Highlights

• Development Yields: Expected in the mid-5% range for 2025.
• Scalability: Development infrastructure is scalable, allowing for higher delivery levels.
• Tariff Impact: Potential for a 2% to 2.5% cost increase per home due to tariffs in the latter half of the year.
• Growth Slowdown: Attributed to weather and election-related factors, with a recent rebound in demand.

Readers interested in more detailed insights are encouraged to refer to the full transcript below.

Full transcript - Citi’s 30th Annual Global Property CEO Conference 2025:

Nick Joseph, Conference Host, Citi Research: Welcome to Citi’s twenty twenty five Global Property CEO Conference. I’m Nick Joseph here with Eric Wolf with Citi Research. Pleased to have with us AMH and CEO, Brian Smith. This session is for Citi clients only and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC25 to submit any questions.

Brian, we’ll hand it over to you to introduce the company and team providing the opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we’ll get into Q and A.

Brian Smith, CEO, AMH: Great. Thank you, Nick, and thank you, Eric, and everyone else for coming to see us today. To my left is Lincoln Palmer, our Chief Operating Officer and to my right is Chris Lau, our Chief Financial Officer. I’d like to start today by talking a little bit about the single family rental industry and highlight a few key points about AMH. Then I’ll pass it over to Chris for some additional specifics about our performance.

The SFR industry is in a great place and continues to benefit from strong long term fundamentals. First, there’s a limited supply of quality housing in The United States. Second, demand will continue to grow as the large aging millennial population moves into prime single family rental, aged generally in the late 30s. And third,

Eric Wolf, Analyst, Citi Research: there

Brian Smith, CEO, AMH: is a wide affordability gap between owning and renting homes, high quality homes in our marketplace. That’s currently as wide as we’ve seen. AMH is in a great position to continue its track record of outperformance in the space. We have strategically created a portfolio of high quality assets in great locations, and this focus has led us to a well diversified portfolio footprint today characterized by markets with strong population and employment growth. These high quality assets are supported by a robust and efficient services platform that is benefiting from our continued innovation into operations and specifically into our technology platform.

And finally, on the growth side, we’re the only vertically integrated single family rental developer. This provides us with an excellent foundation for growth across various economic cycles. And outside of development, we’re staying true to our buy box and remain patient. When we find attractive opportunities like the portfolio acquisition that we saw at the end of last year. We’re quick to jump and easily integrate those into our portfolio.

We’re focused on expanding our success in the space and we’re well positioned for another strong year in 2025. With that, I’ll pass it to Chris.

Chris Lau, Chief Financial Officer, AMH: Yes. Just in terms of other updates, I would say overall, collectively, we’re all really happy and proud with how we closed out 2024, producing resi sector leading NOI growth and FFO growth. Importantly, while also executing on our strategy at the end of the year to position the portfolio for strength heading into the new year in advance of of leasing season. And and what that looked like was was building occupancy over the course of November and December. I know we talked about this on the call two weeks ago for those that were listening, but it’s worth pointing out again.

Building occupancy deep into the winter months like that is is not the norm. But was really important as we are positioning ourselves for strength heading into the new year that we can now see in the same store pool, into January and February. So a couple of the the updates there. Same home average occupancy, in January strengthened to 95.6%, and we grew that further, to 95.8% in February with new leases holding steady in the sorry, renewal leases holding steady in the mid-4s, and new leases continuing to accelerate in positive territory both through January and February, which sets us up nicely because we’re coming into the prime spring months ahead of us. A couple of just quick reminders on the guide while we’ve got everyone.

As you may recall from two weeks ago, midpoint of the same home revenue guide is 3.5%. That stands at the top of the resi peer set for outlooks in 2025 again. And then importantly, we see that being moderated or being paralleled by another year of moderating expense growth, notably, being driven by property taxes, which are now essentially back to long term average property tax growth, all of which is translating to, same home NOI growth of 3.25% at the mid. And then just two quick reminders from a capital plan perspective as we’re thinking about capital for 2025. The development program is doing what it was designed to do in terms of delivering consistent and predictable growth with the expectation for 2,300 deliveries, at the midpoint in ’twenty five.

That is very similar to ’twenty four. And then we talked about this on the call as well, but in 2025 we have our final two securitizations, that we expect to refinance into the unsecured bond market over the course of the year, which notably will bring the balance sheet to becoming 100% unencumbered, which is a big milestone for us. Our goal since day one and exciting for us to see it come to fruition. So Eric, Nick,

Brian Smith, CEO, AMH: pass it back

Chris Lau, Chief Financial Officer, AMH: to you.

Eric Wolf, Analyst, Citi Research: Great. That was really helpful. I want to pick up on one thing you said. It was really on the development side and you mentioned it as one of your differentiators. I think certainly people recognize it as being one of your bigger differentiators versus your public peers.

On the call, you gave this sort of going in yield expectation around 5.5. I do feel like that was maybe a little bit lower than what you’ve been talking about recently. So maybe talk about that first. And then I also noticed a little bit of hesitancy to talk about what stabilized yields were, sort of saying it was a little bit too early to discuss stabilized yields. Maybe talk about why you think that’s the case and sort of where you think stabilized yields will be, as you get more proof and more stuff enters the same store pool?

Brian Smith, CEO, AMH: Sure. I think it may be helpful to start with the stabilized yield discussion. And what we’re talking about there, it’s really the mechanics of a build to rent community and the fact that let’s just say you’re delivering 120 units in the community. We’re setting that delivery pace to match the demand. So when those homes are delivered, they’re immediately put into the rental pool and leased up quickly.

So we’re leasing up through the development process. So you think about the delivery time and the span of that open community with active construction, And then you add in the aspect that many of our communities have, amenities that for the most part get built during the process of the delivery. So think about maybe halfway through the project, we’re starting the amenity center. So when I’m thinking of stabilization, I’m thinking about, no more construction, fully built out amenity center and where the residents have the ability to really enjoy the entire project. Because of the size of some of our developments, we’re still delivering in many of them, some of them even into the same home pool.

So we’re looking forward to seeing the benefits of the stabilization of the communities and then seeing that translate into really good results. We just like to see more of it before we start citing specifics on performance. The specifics that we cited before are really in line with our expectations in the way that these houses are turning and the maintenance and extremely light CapEx burden that we’ve seen. But we like to have a little bit more time to get more portfolio stabilized with a little bit more operating run rate before we start citing specifics. To put it into context, in our same home pool, last year we had about 4,000 houses that were from the AMH development out of the 50,000 and some of those are still unactively delivering communities.

Eric Wolf, Analyst, Citi Research: So I guess this year how many are in the same store pool? Just so like by the end of the year I guess the question is by the end of the year, how long is it going to take another year or two to sort of understand what that growth trajectory looks like after you sort of as you stabilize it, as you realize the efficiencies that you were talking about before?

Brian Smith, CEO, AMH: Sure. So the quick answer for the 2025 pool is about 6,000. I don’t want to anchor us down to a specific kind of date to start really getting specifics, but it’s something that we’re focused on and we look forward to providing good quality data on that when it’s available at the right scale. If you go back to the comments on yields from the call, we talked about expectations in the mid-5s for 2025 And the difference between that and some of the expectations we had maybe a year ago was the same effect on the development deliveries that we saw on the rest of the portfolio from a rate perspective as we transition third quarter into fourth quarter. It’s especially important to make sure that you’re not adding inventory into actively delivering development communities.

So we made sure that we’re moving that through and that put a little bit of downward pressure on yield from the high fives into the mid fives.

Eric Wolf, Analyst, Citi Research: So as you sort of evolve, your development platform has grown bigger, you’ve noticed things along the way in terms of economics and how things stabilize. I guess, what have you changed from a structure, strategy, land management point of view? And how much of your G and A right now is sort of wrapped up in development? And do you think that’s scalable going forward at the around the current level? Obviously, there’s always inflationary and other increases, but how scalable is the infrastructure that you’ve built?

Brian Smith, CEO, AMH: Yes. The development infrastructure is very scalable. We have a lot of investments to be able to move that up to much higher delivery levels. If you look at what we’re focused on, currently we’ve been optimizing floor plans, we’ve been making sure that we’re delivering the right bed bath count and to match the demand in that specific marketplace. We have efficiencies that we’re looking at in terms of the materials that we’re putting into the homes.

We’ve become very sophisticated. The architecture is all in house and we’re trying to figure out the best, most efficient plans to deliver that match with the resident demand. We’ve come a long way in that regard. The efficiencies that we’ve seen have to do a scale to and getting maturing into certain development markets to open up a market that has a different cost profile, a start up than one that’s been opened and operating for a while. So there is room to grow there.

I mean, it requires special circumstances. And Chris can talk too about why the level of deliveries right now fits kind of the current economic situation.

Chris Lau, Chief Financial Officer, AMH: Yes. I would also say I think part of your question was on G and A. In terms of the portion of corporate G and A expense attributable to development is zero, right? So all of the overhead cost of the development program, think of it as essentially encapsulated within a development subsidiary, and then those costs are costed off allocated into each one of the homes as they’re finished. So as we’re quoting investment costs, as we’re quoting yields, those are fully burdened with all of the costs of the program, including, you know, G and A in air quotes, the overhead of of the program.

And then in terms of sizing, totally agree. Infrastructure of the program, scalable. Need for housing, in particular, need for good high quality housing in in good locations is scalable, is there. One of the key considerations to sizing of the program is prudent capital management, right? And as you guys have heard from us many, many times over and over, it’s very important that we keep the program sized in such a way that it is fundable in any given year without built in equity needs to fund ongoing development of the program.

And so that’s basically the cruising altitude that we’re at now in the 2000s kind of per year of deliveries, fundable through a combination of retained cash flow, recycled capital from dispositions, very attractive today, disposing of homes at disposition cap rates in the mid-3s and then a little bit of growing leverage capacity off of the balance sheet. And naturally that will grow over time as retained cash flow grows and leverage ability of growing EBITDA grows as well.

Nick Joseph, Conference Host, Citi Research: Just on the development pipeline, how resilient is it or what type of disruption could you see from immigration policy and tariffs, I guess, on the cost and availability of labor?

Brian Smith, CEO, AMH: Yes. As we discussed on the call, we have really good visibility to the first half of the year deliveries in terms of having locked in contracts and a lot of it’s in flight. So any effect would be kind of skewed towards the back end of the year. It’s really difficult to pinpoint exactly the effect of all these different changes in the marketplace. We don’t know how builder other builders are going to react in terms of the amount of work that they’re doing in supply.

There’s a couple of things we have working in our favor. Obviously, the first half of the year being locked in. Second, our scale and the way that we’ve structured our purchasing department. In the past, during COVID is a great example. There was supply chain disruption and our team did a really good job of ensuring that we could continue to deliver homes on the expected pace, and in some cases, substituting materials, flooring as an example.

So we have some flexibility there. We have an advantage in that we just don’t have change orders and what we’re producing is a little bit more efficient, but no one is immune to the level of tariffs that people are talking about today. So in a nutshell, we’ve looked at it. It’s very difficult to pinpoint. But if there are effects, we spoke with other homebuilders and looked at, as I talked about on the call, what the estimates were from the National Association of Homebuilders and thinking potentially towards the back half of the year, if everything holds true, would have a 2% to 2.5% drag on all in investment per home.

Eric Wolf, Analyst, Citi Research: One of the more common questions I get asked is why take those types of risks around tariffs, construction, the uncertainty around the future if sort of market cap rates are fairly close to development yields. And maybe you just disagree with that point, but you did recently do a good portfolio acquisition, I think, around a similar yields. Maybe they’re just so few and far between that it’s almost not comparable. But basic question is sort of why have a larger development program if you’re able to get comparable economics on acquisitions?

Brian Smith, CEO, AMH: The they’re two different things. The development provides a really good kind of baseline for sustainable growth. The product is of extremely high quality, well located assets that you just can’t buy elsewhere. So when you start talking about market acquisition rates and you look at the MLS, you look at what the national builders are offering, what we’re delivering is at a significant yield premium to that. In specific reference to the portfolio, the transaction that we closed last year, that was an outstanding opportunity for us.

We haven’t seen anything of that quality in a long time. Although we’re optimistic that there’ll be more of those to come, we would absolutely jump over that as well as incremental growth beyond the development baseline.

Eric Wolf, Analyst, Citi Research: And then just maybe last question is on the funding. You have $400,000,000 to $500,000,000 of dispositions. Can you just talk to us sort of what you’re expecting in terms of cap rates on those sales? You’ve been able to sell assets very, very accretively over time. So I was curious what’s embedded in your guidance for this year.

And then maybe just one quick follow-up after that, but I’ll start there.

Chris Lau, Chief Financial Officer, AMH: Yes. You’re exactly right. For this year, we’re contemplating another $400,000,000 to $500,000,000 of dispositions in recycled capital. Last year, we sold in the ballpark of $500,000,000 as well, so similar sizing to last year. And based on what we’re seeing right now, we would expect disposition cap rates to be in a similar ballpark in the threes somewhere over the course of the year.

And I know your follow-up question was going to be, but I was going to talk about the potential for continued optimization and further dispositions, in particular, as we’re freeing up collateral from our securitizations?

Eric Wolf, Analyst, Citi Research: That was going to be the follow-up and also if there’s anything unique about because there’s anything unique about it because people say they’re putting whatever cap rate on your portfolio but they keep seeing you sell things in the threes. Is there anything different about these assets that would make them trade at lower implied cap rate than the rest of your portfolio?

Chris Lau, Chief Financial Officer, AMH: Perfect follow-up question, exactly where I would have gone. Couple of quick data points. So in 2024, we paid off two securitizations, which I’m sure everyone probably familiar with. Those two securitizations, freed up about 9,000 homes, that were tied up in the collateral pools underlying the securitizations. And then the two securitizations we’re planning to pay off in 2025, similarly, will be freeing up about another 9,000 homes or so.

So 18,000 homes in total being freed up, that have been tied up in collateral pools for the past decade.

Nick Joseph, Conference Host, Citi Research: This is

Chris Lau, Chief Financial Officer, AMH: still a little bit of a rough estimate, little bit of a guesstimate, but it wouldn’t surprise us if over the next couple of years, ten percent to 15% of these homes end up working their way through the disposition program. It will take a couple of years to work through them, in part because of the the channel and method through which we’re we’re selling them, which ties into the other part of your question. The these homes are being sold and the way that we’re achieving, you know, mid threes disposition cap rates is that they’re going to end user home owner buyers via the MLS, which means to sell to a home buyer, you need to have a vacant home. Good problem to have, but 95% to 96% of our homes are not vacant. So we need to let leases roll, tenants move out, and then we can move them onto the market.

And when they hit the market, they move quickly. They’re selling it on average 98 to 99% of list price, again, generating very attractive recycled capital opportunities. But there’s a natural governor on how much we can sell in any individual calendar year because of the fact that we need to let leases roll. And then just one final point on the disposition program. In addition to being a really attractive form of recycled capital, it’s a really fantastic way to optimize the portfolio in a very fine tuned way down to the unit level.

Right? There’s virtually no other asset class that can decision make at the individual unit level, not the building level. That is the opportunity that we have here to refine the portfolio, optimize individual assets, ensure that every dollar of capital is deployed to its highest and best use. And when that capital is being redeployed and recycled into the development program, it creates a really powerful refreshing effect in improvement to overall asset quality in addition to recycling of that capital.

Eric Wolf, Analyst, Citi Research: Got it. But I guess, maybe a strange way to ask it is if you could just vacate your entire portfolio, you could sell it at a 3.5 to four cap. Like generally, like meaning that there’s nothing special about these homes that’s causing them to trade at a low implied cap rate. I understand that they’re vacant. You can only sell a vacant home.

You can’t sell one with someone living in it. But generally, like if we were to price your thing based on MLS prices, it would be at a 3.5% to 4% cap?

Chris Lau, Chief Financial Officer, AMH: Not every home in the portfolio is going to be at a 3.5% cap. Generally speaking, there is not generally speaking. All of these being these homes are being identified for a reason in terms of something that has underperformed our expectations leading to the conclusion that there is higher and better use for that capital elsewhere, I. E. The development program.

I couldn’t give you the exact proportion of the portfolio of where things would trade in the mid-3s versus somewhere else or higher. We don’t necessarily look at it that way across every single home in the portfolio via the MLS. But I don’t want people to get the wrong impression. There’s a lot of opportunity here, but it’s not 100% of every home in the portfolio.

Eric Wolf, Analyst, Citi Research: Got it. Going to operations, had a few investor questions that we get to. And I think effectively what it comes down to is, you’re still seeing very healthy growth. You mentioned a little bit of a slowdown in the fourth quarter. So far this year, things have rebounded but are still a bit slower than they were.

At this time last year, I think that’s probably created a little bit of volatility in your stock just as things have slowed a little bit. Can you maybe help us understand what caused the sort of the slowdown from last year? Is it just difficult comps? Is it supply? And at sort of what level do you see things stabilizing going forward?

Brian Smith, CEO, AMH: Yes. I think the easiest part point to start is what happened last year in the transition from third quarter to fourth quarter. We talked about it on the last call, but what we saw was a low on activity. There were a lot of different things going on from weather to election to, just kind of a general kind of pause in a lot of different aspects of real estate. You saw, I think it was a fourteen year record low in home sales in September.

And as a result of that, we adjusted pricing a little bit. We’re talking in tune of 100 ish basis points and built occupancy in November and December when that activity rebounded. As we got into this year, we were entering at a different starting point than we did last year. Last year, we entered in the 96% occupancy range. We started this year 40 basis points below that.

But our expectation for the year is the same. So we’re catching up. In terms of activity and demand, Lincoln can talk to some specifics as to what we’re seeing this year, but it’s really strong. And Lincoln, if you want to give some details on what you’re seeing?

Lincoln Palmer, Chief Operating Officer, AMH: I talked about this I think I mentioned this on the call. But as we came out of that season, November, December, as we saw activity pick up, what we were expecting in our normal seasonal activity pickup at the beginning of the year probably happened a little bit earlier and stronger than we expected. Leading into January, we saw a 30% increase period to period in the foot traffic in our homes, which is very encouraging. And then that translated something like 15% over January in 2024. So that was a good lead into the start of the season.

As we continued into February, as Chris mentioned, we built some additional occupancy, rates are moving in the right direction. So we’re trending extremely well and we have a lot of confidence for our spring leasing season. So I think probably the general answer to the question is, yes, there was this moderation activity at the end of last year. And what we’re seeing now is kind of this pickup. But as Brian mentioned, we expect to land the full year based on our expectations of our normal seasonal trends in the same kind of occupancy range.

And the activity again January, February, now coming into March gives us a lot of confidence we’re moving in the right direction.

Chris Lau, Chief Financial Officer, AMH: And then Eric, can we come back to the second part of your question in terms of where is the stabilized landing area for the business, because that’s a question that we get a lot. And I will say, like, it’s a question that’s difficult to answer with absolute numbers. But as we think about things on a relative basis, you know, as we think about kind of the potential for our business in this asset class in general going forward, it’s really no different than our view since the beginning in terms of the opportunity to drive a top line at inflationary plus levels. If you think about the need for housing and demand drivers, everything in terms of tailwinds that Brian talked about at the start and the ability to translate that into, as I said, inflationary plus top line set against, our objective to hold the line on expenses at inflation, maybe even a touch inflation minus, if you think about the investments that we’ve been making into our expenditure management programs, meaning opportunity for continued margin expansion from here forward, which is exactly what we delivered in 2024, expanding margins by 20 basis points. Right?

That’s the opportunity we see, continued upward creep in margins from here. Not any one year is linear, but measured in the tens of basis points, probably not the hundreds of basis points we are capturing in the early years, but we see opportunity from this point forward, which will be even further benefited by everything that we are just talking about from an asset management perspective, right? Recycling of capital out of underperforming homes, oftentimes with lower NOI margin profiles on them and then attractively recycling that capital into newly constructed homes with optimized NOI margin profiles.

Eric Wolf, Analyst, Citi Research: And the 30% increase you saw in foot traffic, that just seems like a huge number to me. I don’t know, maybe just put that sort of in the context of what you’ve seen in the past. I don’t know if some of it’s maybe just a little bit more inventory than you had or advertising or what, but just again, it seems like a very big number. But maybe tell us what the other forward indicators are that you look at besides foot traffic and if that’s telling you anything about how the sort of trajectory of the peak leasing season might look?

Lincoln Palmer, Chief Operating Officer, AMH: Sure. Yes, we do normalize that number for the number of rent ready properties that are on the market. So the 30% is an apples to apples on a per rent ready basis. But we’re watching very carefully the amount of activity that’s coming at the front of the funnel as well. So the number of people who, for instance, are expressing interest on Zillow, those leads come into the platform via API and we can monitor the ups and downs of that kind of activity as well.

That’s also screening extremely well going into the season. And then ultimately, the thing that’s most important to us is that we get results. And for me, operationally, that’s signing leases on these homes. Leasing was up 20% in January as well. We set another February record for the company as we closed out the month a few days ago.

So again, just everything is looking very, very positive.

Eric Wolf, Analyst, Citi Research: And so in light of that, maybe you could tell us about sort of what your overall renewal strategy is. Obviously, you’re trying to price things, I think, sixty, call it sixty, ninety days ahead of time. Where are you putting out renewals? What is the sort of forward retention look like? I assume as part of your pricing management system, you kind of have something that projects occupancy going forward or your risk around occupancy.

So maybe just talk about your renewal strategy and what retention is looking like based on how many people are accepting thus far?

Lincoln Palmer, Chief Operating Officer, AMH: Sure. So you can think about renewals in the first quarter in the 4.5% range and then 4% kind of for the rest of the year. We’ve got a lot of questions in the meetings over the last couple of days about why the moderation from 4.5 to four when it seems like things are moving in the right direction. We had to go back to kind of our expectation of seasonality. Offers that are going out, as you mentioned, ninety days ahead of time for those residents are going to, try to incentivize them to stay in the portfolio.

So we moderate a little bit. And then in the back half of the year, again, just contemplating the normal seasonality, we’re just going to hold it that four for now. Obviously, because we are looking ahead, because our systems are resin activity very early, if there are indications that there’s opportunity to pick up additional rate as we go throughout the year, if the season is a little bit stronger or for instance, the supply profile improves, then we’ll adjust the rates around that. So and then the other thing too is we want to see sustainable market rate offers go out to our residents. We’re not trying to push them well beyond where we think that the market rates are.

That’s indicated by spread between new and renewal rates. So if you think about where we’ve talked about news and renewals for the year, renewals in the 4% range, news in the 3% and we think that’s a close and sustainable level for the year. And then as far as the renewal offers that are going out, very little breakage. Again, we’re sending those in the fours for now and very little breakage on the take up of those from the residents. We don’t negotiate heavily off that.

So you can think of that in the 10 to 20 basis point range.

Eric Wolf, Analyst, Citi Research: And then if you I know it’s close to sort of the call, but if you look at some of the markets, I think you mentioned Phoenix that was starting to show some signs of recovery. I was just looking at sort of the fourth quarter data and it does seem like some of the weaker markets were maybe those where there’s been this sort of buildup of home inventory from the builders, whether that’s Jacksonville or Dallas. Just curious how you think about that sort of shadow supply of unsold homes, how it competes with you? And if you started to see some of those markets that perhaps were suffering from that and maybe higher BTRs deliveries start recovering during this early part of the year?

Brian Smith, CEO, AMH: Yes. We focused a lot on that in the subsequent to the call and trying to really frame the supply outlook and how Bill de Red comes in with, the shadow supply, and it really is market specific. We tend to talk a lot about Phoenix, and we do that because I think all of the different supply pressures are evident there. But a lot of our other markets just aren’t seeing that. And if you look at our diversified footprint, majority of our markets haven’t had much of a change in supply over the past year plus.

So the ones that we tend to focus on have the extra build to rent inventory. Las Vegas is a good example of excess shadow inventory, less build to rent development there, but it seems like there are more kind of individual investors. It’s difficult to track, but we are paying very close attention and we’re looking forward to kind of the peak of that. From the build to rent perspective, we’re taking the information that we’re getting from John Burns, trying to validate that. A couple of key takeaways that we’ve talked about in the past is he’s looking at build to rent across all deliveries, which includes a number of different asset types that are different than ours.

We’re building single family detached in good locations, so garages and yards, and a lot of the build to rent inventory specifically in Phoenix. Eighty Percent of the deliveries are other product types including townhomes and horizontal apartments. So they’re a little bit different. But if you overlay that build to rent in Phoenix specifically with excess multifamily supply that people have talked about, there’s a lot of activity and noise in that market. We’re starting to see some good signs of pushing into 90% occupancy in January as an example in the Phoenix market.

So 96. 90 six percent. What did

Eric Wolf, Analyst, Citi Research: I say?

Lincoln Palmer, Chief Operating Officer, AMH: 90%.

Brian Smith, CEO, AMH: Ninety six

Eric Wolf, Analyst, Citi Research: %. Sorry, you said occupancy is at 9696%,

Brian Smith, CEO, AMH: yes.

Eric Wolf, Analyst, Citi Research: Okay. Got it. So it was average 95.7%, I think, in February?

Brian Smith, CEO, AMH: Phoenix yes, Phoenix moved up from 95 we ended last year, 9595%, so Phoenix specifically bumped to 96%. As an example of one of the markets that we’re seeing, good movement and momentum in Tampa had similar movements. And then again, as Lincoln talked about, the demand so far this year has been great. So it’s looking good. We’re not ready to call the peak of supply pressure, but we’re seeing some good signs that we didn’t see last year at this time, specifically around those markets that everybody is talking about.

Eric Wolf, Analyst, Citi Research: Got it. And I hate to end with like property taxes, it’s probably not the most exciting thing, but it is a huge part of your expense structure, right? I mean, it’s predicting it is sort of how you get right on expenses for the year. You talked about how it’s back to an average, I think, of 4% to 5%. But it does seem like HPA has been a little bit lower, right, for the last, call it, year, year and a half.

I know it takes time for things to sort of catch up and municipalities don’t always just look at that and there’s multiyear reevaluations. But I guess the question is really like what do you think the risk is to the sort of upside that you see a good bit lower growth than that this year? Obviously, you hope for it, but I guess what I’m asking is based on what you’ve seen thus far in terms of assessments and your ability to appeal them, like what do you think the chances are that it ends up being better than that this year?

Chris Lau, Chief Financial Officer, AMH: I’ll be careful. We feel good about the estimates as

Eric Wolf, Analyst, Citi Research: of now, but I would just remind

Chris Lau, Chief Financial Officer, AMH: everyone that property tax is no different than any other calendar year always start as a 100% estimate at the beginning of the year. But Eric, you said it exactly right. Just as we’ve been expecting, rate of home price appreciation has been moderating, right? This has been a common question in every single meeting for the last couple of years. Hey, Chris, when do property taxes get back to normal?

When do we see the moderation? Well, it’s here. We’re back to long term average. In terms of things that we’re watching closely, across the board, things have moderated. We’re still expecting healthier than portfolio average increases in Florida and Georgia.

We’re braced for that. We do know that we have a number of multi year revaluations resetting across the portfolio this year. We’re braced for that and that’s contemplated in our outlook as well. I would say that the one thing that we were watching closely, maybe this could be a swing factor, I would hope, is Texas. Texas values have moderated, but you know, rate is a little bit of a question mark this year.

If we all recall, Texas passed, a property tax reform in 2022 that locked rates for two years that’s now expired. That’s going to need to be revisited for this year. Governor Abbott has been very vocal around, property extending or putting in place a new property tax reform, locking rates as a top priority as as the state is thinking about utilization of budget surplus. So that’s something that we’re watching very closely. Again, I think we’ve been prudent in our estimates as of the beginning of the year, but that’s something that we will watch closely.

Nick Joseph, Conference Host, Citi Research: Same strong NOI growth for the single family rental sector next year overall?

Brian Smith, CEO, AMH: Inflation.

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