American Homes 4 Rent at Nareit REITweek: Optimizing Growth and Flexibility

On Tuesday, June 3, 2025, American Homes 4 Rent (NYSE:AMH) presented at the Nareit REITweek: 2025 Investor Conference. The company outlined its strategic initiatives for maintaining high occupancy rates and optimizing its lease expiration curve, while also addressing challenges such as property tax developments in Texas. Despite slight softness in Arizona and Texas, AMH remains optimistic about its strong performance in the Midwest and Carolina markets.

Key Takeaways

• AMH achieved a high occupancy rate of 96.3% in April and May.
• The company raised $650 million through a bond offering at a 4.95% coupon rate.
• AMH is on track to deliver between 2,200 and 2,300 homes this year.
• The balance sheet strategy aims for a 100% unencumbered status.
• Demand for AMH homes remains strong across most markets.

Financial Results

• Occupancy: Maintained at 96.3% in April and May, with Florida slightly lower at 95.5% to 96.5%. The company expects similar occupancy rates year-over-year.
• Rental Rate Growth: Renewals held steady at 4.4%, with new lease growth increasing from 3.9% in April to 4.3% in May.
• Capital Plan: Successfully raised $650 million in a five-year bond offering with a 4.95% coupon rate.
• Bad Debt: Remained low, with a bad debt comparison of 80 basis points in the second quarter of 2024.

Operational Updates

• Lease Expiration Management: AMH is shifting lease expirations to the first half of the year to optimize revenue.
• Development Program: On track to deliver 2,200 to 2,300 homes, with expected yields in the mid-5% range.
• Texas Property Tax Relief: The company is optimistic about potential property tax relief in Texas and is closely monitoring developments.
• Tariffs: Potential tariff impact is estimated at 2% to 3% of total investment cost per home, but the effect is expected to be minimal.

Future Outlook

• Lease Curve: Expected to stabilize like pre-COVID averages, peaking in late May/early June.
• Development: Continued focus on delivering high-quality homes with yields in the mid-5% range.
• Acquisitions: AMH acquired a 1,700-property portfolio in Q4, with cash flow growth expected due to the company’s platform.

Q&A Highlights

• Demand Trends: Demand remains healthy across all markets, driven by the quality of AMH’s products.
• Manufacturing Impact: Positive trends in manufacturing jobs could benefit AMH’s markets.
• Tariffs Impact: Minimal effect expected on operations, with any impact likely at the year’s end.
• Acquisition Appetite: Opportunities to enhance value by integrating new portfolios into AMH’s platform.
• Balance Sheet: Achieving a 100% unencumbered balance sheet by paying off two securitizations, freeing up about 9,000 homes.

For a complete understanding of AMH’s strategies and performance, refer to the full transcript below.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Brian, AMH: For resiliency and growth across all economic cycles. These high quality assets are supported by a robust and efficient services platform that is benefiting from our continued investment and innovation form of technology. And now more than ever, prospective residents are seeking out AMH homes as they search for the next home to move and live in. Occupancy across most of our markets is north of 96% and we continue to see strong rental rate growth across the portfolio. And then finally on the growth front, we continue to benefit from our in house development program, which delivers purpose built high quality homes directly into our portfolio.

One important distinction on the development program is that it’s strategically sized, so that it does not require incremental equity on an annual basis. In addition, our investment grade balance sheet provides flexibility to capitalize on incremental opportunities such as portfolio acquisitions when they present themselves. The single family rental space is full of opportunity

Chris, AMH: Thursday of of last week. I would say thematically, very similar to the first quarter earnings call in that spring has shaped up nicely. Just as we were hoping for, occupancy held strong at ninety six three in both April and May. What is especially notable about that to us is that we were able to hold that level of occupancy even with shifting leases like we’ve been talking about from the second half of the year or shifting lease expirations from the second half of the year to the first half of the year as we endeavor to optimize the lease expiration curve over the course of the year. Against that occupancy backdrop, renewals held steady at 4.4%.

And then importantly, we saw nice new lease acceleration from three nine in April to four three in May. As we shift into June, our focus now transitions a bit from a pricing perspective as as we’re beginning to head into move out season right around the corner. Couple quick updates or just callouts on the expense side since we’ve got everyone. Same as the first quarter on turnover cost, we’d expect to see slightly higher turnover cost in the second quarter, again, coming from the timing and shifting of lease expirations from the second half of the year to the first half of the year, again, as we optimize that curve. And then two, I don’t have concrete information yet that we can talk about, but we are watching property taxes in Texas very closely.

As many of you probably recall, Texas is the state that passed the property tax relief reform back in 2022. That was in place in 2324, and we knew that coming into this year, the state would be revisiting, you know, potentially another round of property relief using a portion of the state’s $24,000,000,000 budget surplus. Again, I can’t give specifics yet, but it appears that the state is getting closer to potentially passing another round of property tax relief, and we’re optimistic that we may have an update that we can share on that by the time we report the second quarter. Rounding it out, Brian mentioned development right on track for full year delivery expectations. And then finally, quick update on the capital plan.

As you probably saw, we were in the bond market beginning of last month, raising $650,000,000 in a five year offering that priced at a coupon of $4.95, which is clearly a a super attractive piece of capital, but also complements our mature maturity profile perfectly in that we previously did not have any maturities on deck in 02/1930, so a five year slots in really nicely. So Jamie, turn it back to you, but general updates. Business is good. Spring shaping up nicely, and nice update on the capital plan.

Jamie: Great. Thank you. So can you talk a little bit more about market specifics on demand trends post 1Q? Obviously a lot of headlines out there, lot of confusion, higher rates, lower rates, more inflation, less inflation, jobs. Anything you can read into your portfolio that tells a picture about where things are heading, or how things have been?

Chris, AMH: Go for it, Linda? Yeah,

Linda, AMH: so the indications for most of our markets are that they’re all extremely healthy. As Chris mentioned, we’re running plus 96 in most of them. We’ve done a little bit of talk about Florida. Our Florida’s running 95.5%, ninety six point five %, extremely healthy. Still seeing a little bit of softness in, call it, Arizona, Texas, those have been widely talked about.

But it’s also a time when we’re grateful for our diversified portfolio. Our Midwest markets are doing extremely extremely well. Carolinas are doing very well, many of our Western markets.

Chris, AMH: And when you look at supply

Linda, AMH: and kind of demand overall, demand remains healthy across all of our markets for quality AMH product.

Jamie: You spent a lot of time yesterday with Newmark talking about tariffs and manufacturing coming back to The U. S. When you think about your regions and your typical job profile, you do see a pickup in manufacturing jobs. I know this is off the script, I apologize. How do you think about how that might impact demand?

Brian, AMH: Yeah, think it would be a positive. If you look at where our homes are located, a lot of the talk on manufacturing centers around the Midwest, we’ve got a nice presence in the Midwest. We took a very close look at our resident, we’ve been looking at for a long time, but specifically during COVID as to where they were working and what particular functions. And our residents, the general employment profile is there’s, the majority of our houses are dual income, and the types that are most prevalent in our portfolio center around healthcare, and nurses, and first responders, and education, and so forth. We don’t see a huge impact from manufacturing, but any positive movement in that would have good benefits for the entire markets.

The markets that we’re investing in, the markets that we’re currently in and that we’re developing in have a general profile of positive, better than national population growth and better than national employment growth, and I expect changes like that would only help it more.

Jamie: And then how should we think about your expectations in terms of the curve for the rest of the year, in terms of rents? What’s embedded in guidance? What are the expectations? And where do you think you’re trending better or worse than you originally thought?

Chris, AMH: A couple things and then you guys feel free to chime in too. Starting maybe with the last part of your question first. I think you can tell spring shaped up nicely. Really like what we saw in terms of foot traffic, demand, full occupancy, acceleration in in new leases, you know, throughout the first five months of of the year, all felt really good. You know, I would say we were also expecting, you know, a strong spring in in the first five months of of the year, you know, when we contemplated the guide as well.

So feeling good, but we were also expecting strong spring. To your point about the shape of the curve, it’s a good question. And as as many of you know, we spend a lot of time thinking about it and talking about it and really dissecting kind of what the shape of that curve looks like, and in particular, what the shape of that curve leasing curve looked like kind of long term stabilized pre COVID average of the portfolio, and then what we’ve seen over maybe the last three, four, five years that was more COVID distorted. And and what we really saw is, you know, with all things, you know, COVID, you know, trends, you know, were distorted, out of whack, and we really saw kind of a a a atypical elongating of the curve over COVID and through the COVID recovery. And so if we look back at, call it, 2019 and prior stabilized average, you know, the the leasing curve really peaked out May.

May, late May, early June. And it really feels like that is is the way this year’s curve is is shaping up, you know, really kind of pre COVID stabilized average. And, you know, one of our objectives for this year, we we talked a lot about this end of twenty four heading into ’25, is as we think about ’24, we really didn’t like how steep the back end of the curve was last year through third quarter and fourth quarter and how kind of rate trajectory followed. And so one of our key objectives coming into this year was really rounding out that curve, smoothing it a touch, and there’s two ways that you can accomplish that. Pricing strategy and then lease expiration management, which, like we talked about, big benefit as we’re shifting leases from second half of the year to first half of the year to better align with demand.

So great progress this year, really smoothing out the curve, which is feeling much more kind of pre COVID stabilized shape like in the business.

Jamie: So do you expect a bigger occupancy headwind at the end of the year as you move these leases forward or change the expiration pattern?

Chris, AMH: Theoretically, on a longer term basis, I mean, I think the other thing to point out and kind of zoom out as we think about lease expiration management,

Linda, AMH: this

Chris, AMH: is really a multiyear kind of future ongoing benefit that we would expect from the program, and really it should be benefiting the back half of the year both in terms of kind of durability of both occupancy and then frictional turn costs as well. Right, as we’re moving expirations out of the back half of the year in turn, we’re moving move outs to the first half of the year, which benefits turnover occupancy and then in turn, you know, frictional turn costs. As we know, the objective in our business first half of the year is to capture as much upside as possible via the spring leasing season. And then as we transition middle of the year, about now, June into the back half of the year, the objective really focuses to controlling the controllables, which we did a fantastic job on last year. That’s where a good portion of the upside against our guide came from.

Our objective is to deliver and execute the same thing this year again and into the future years, and shifting move outs in the back half of the year to the first half of the year really kind of advantages us along that objective of controlling the controllables.

Jamie: I was actually thinking just over the immediate term, longer term, yeah, definitely. But it sounds like it’s not that meaningful.

Chris, AMH: Yeah, we’re talking a little bit of timing. Year over year, I think our view on the full year is still similar in that we’re expecting occupancy to be roughly similar year over year ’24 to 25 in the low 96s.

Jamie: I know you mentioned Texas on the property tax front. Any other states stand out or that’s the big one you’re watching?

Chris, AMH: That’s the only one that I can really call out so far. As everyone knows, we’re still pretty early in the property tax information cycle. This is the time of year where initial pre appeal assessed values are just beginning to come back. We don’t really have enough yet that I can talk meaningfully about it. When we get to reporting the second quarter I can give a better you know, finger on the pulse update of of how values are are feeling, but we’re still early.

You know, we get values in over summer. That kicks off appeal season. That runs through end of summer, early fall, and then importantly, we get rates back late third quarter, sometimes beginning of of fourth quarter. So early in the property tax information cycle, but, you know, Texas is obviously atypical in terms of the potential relief reform this year.

Jamie: And that’s not an extension, that’s an additional potential cut in Texas?

Chris, AMH: That’s that’s that’s a a new okay. So the way not to get too into the numbers, but back in 2022, the the state passed a compression in in state tax rates, lowered them for ’23 and ’24. Technically, that has expired. You know, what the state is contemplating is some level of new tax rate compression that would be in place for ’25 and ’26. So you could think of it kind of as, it’s not technically an extension, it would be a new relief reform debating, you know, they’re discussing a variety of different potential outcomes, but one of which is, you know, rate compression relief similar to 2022, and then they’re also contemplating expanding of the homeowners exemption, obviously would not affect us.

Okay,

Jamie: but you were assuming that it burned off

Chris, AMH: in your We took a middle of the road approach as we contemplated the guide. Yeah, think everyone generally expected the state to probably do something this year in terms of new relief. The state has a $24,000,000,000 surplus. Governor Abbott has made it very clear that property tax relief is a top priority of his. And so we kind of assumed kind of a middle ground approach.

We didn’t assume that nothing was passed, but we didn’t assume that it was the exact same as last time. So basically split the difference in the guide. Can

Jamie: you talk about bad debt? How has it been trending into April and May?

Linda, AMH: And what are your expectations?

Chris, AMH: You guys want me to keep going? Sure. I’ll start and then you So beginning of the year, I would say, again I feel like I’m overusing this, but I can’t speak concrete details on bad debt in the middle of the quarter. It’s tough to speak definitively until we get

Brian, AMH: the books fully closed for

Chris, AMH: the quarter. Collections are feeling good, similar to the first quarter. Healthy collection base, representative of the health and wherewithal of our type of resident. Dollars 150,000 incomes, five income to rent ratios you know, on average to to working adults per household, you know, good credit quality. So things are are are feeling good from a collection standpoint.

You know, I would point out as we think about, you know, comping against last year, recall that the first half of twenty four was benefiting from some rollover catch up payments that we were seeing coming in from 2023 that essentially burned off, if you will, didn’t recur in the back half of the year. So we should factor that in in terms of comp. I think bad debt comp in 2Q of twenty four is like 80 basis points or something like that. Things feeling fine. Keep in mind there’s seasonality to bad debt.

Typically, it it trends and correlates with move out season as well.

Jamie: Are there any markets where you’re seeing a change or anything surprising you, upside or downside? I think most

Brian, AMH: of the

Linda, AMH: markets remain pretty consistent. Our teams do a great job of executing our policies very consistently. I think we’re one of the better performers on bad debt. Haven’t seen any meaningful changes in regulatory policies or administrative processing in the market. So overall, it’s just continued consistent execution by the teams to capture what we can.

And

Jamie: then we do a lot of work with our home builder analysts. Still a pretty wide spread between cost of the home builder incentives and what you guys can charge or you are charging. But are there any markets where that gap is closing pretty meaningfully as you think about it or still pretty wide or anything you want to flag?

Brian, AMH: Yeah, I think it is closing, but for us, we take a look at tens of thousands of homes from National Builders on a quarterly basis. And then filtering that down into our buy box locations, obviously, first thing we look at, and then asset type. A lot of the stuff that’s being offered is attached, as townhomes, and we’re very focused on single family detached with a yard, two car garage, it’s very cookie cutter within our portfolio. So when you start to filter it all the way the ones that fit our buy box, we’re taking a close look at. We haven’t seen a ton of price movement, maybe a little bit of willingness to negotiate, but we’re still pretty wide of where it would need to be for us to do anything meaningfully.

We’re underwriting these homes on our model in the high 4s still, and we’re able to deliver our own development product, which is purpose built, our exact locations, our exact finishes, which are different in a lot of cases from the starter homes being offered, We’re delivering those in the mid-5s. So we’re very, very pleased that we have the foundation of the development program. But at the same time, we kind of started this eight or nine years ago by buying from the National Builders. So it was a really good acquisition channel back then. And it’s possible that it returns, but we need to see a little bit more movement than we’ve seen today.

Jamie: What are your, can you remind us your

Linda, AMH: expectations for development this year in terms of starts?

Brian, AMH: Yeah, think the deliveries are in the 2,300, 2 thousand 2 to $2,300 range. We’re on track with that. It’s going very well. Demand for the product is strong. The lease up is strong and our expectations are that our the yield that we’re delivering at will be in the mid-5s for the year.

Jamie: And how do you think of the impact on tariffs on construction costs or just your appetite overall to start new product?

Brian, AMH: We haven’t seen an effect yet. We’ve obviously been following it very closely even though it changes on a daily basis. It’s very hard to track. But a couple of things that are important, we talked about it on the last call. Our costs for the homes that we’re delivering today and into through the second quarter and into the third quarter are fixed.

Those were contracted prior to any effect from tariffs. So if there is an effect on tariffs, it’s going to be at the tail end of the year. And we did our best to quantify what they could potentially be. Our estimates remain the same, talking 2% to 3% of total investment cost for a home. We’re delivering homes around $400,000 in total.

If they hold, if almost, that’s not worst case scenario, a conservative estimate. On the flip side, we have a very strong and robust purchasing platform that services both the development side and the property management side of the business. So in the event that one of our suppliers manufacturing whatever the product is flooring or appliances in country that’s subject to large tariffs, we have the ability to pivot. Very similar activity from that department as to what we saw with the supply chain disruptions during COVID. And some of the cost pressures that came along with that, we were able to maintain really good cost controls by taking different choices and leveraging our scale.

So in a long, in a short answer, if there is an effect, it will be minimal, but we haven’t seen anything yet.

Jamie: How do you think about the impact just on your regular operating business? Assuming some appliances and maybe talk through where it has hurt so far and where you think it could hurt

Brian, AMH: outside the development it’s a very good question. The dynamics with that are a little bit different in terms of being able to plan, and you can get different pricing if you have a longer planning threshold. But because we have the two departments, we’re able to warehouse materials, we’re able to we’re doing it on the appliance side right now. So we might see some effect. We haven’t seen anything large yet.

The few cases where our vendors or our suppliers have come to us with indications of an increase, we fought back pretty hard. So we protected ourselves so far, but it’s really hard to predict how it’s gonna end up. If there is an effect, I wouldn’t expect it to be too dramatic.

Jamie: Can you quantify what percentage of your CapEx, I assume it’s all repairs and maintenance, how much of that is even imported materials?

Brian, AMH: That’s a tough one to qualify. Labor’s a major component of that. Don’t know, Lincoln, do you have any

Linda, AMH: I hate to venture a guess. I think the important thing, like Brian said, is we have these two teams that are purchasing. We’ve had several things come up recently that we’ve had to renegotiate. Our flooring program is a good example. We spend a lot of money on resilient flooring every year so that we can prevent future costs.

Appliances are another good example. HVAC is another good example, just high CapEx items. And we’ve been able to renegotiate a lot of those contracts if we are notified of increases at either flat or maybe even a slight benefit because of the purchasing power that we have on both sides. I don’t know how much of it is imported, but we’re doing a good job at finding substitutes when necessary.

Jamie: And then I guess thinking about other uses of capital, on the acquisition side, what are you seeing in terms of potential portfolio acquisitions? How does that market look?

Chris, AMH: Similar update to end of the year, as everyone knows. We acquired a very attractive portfolio in the fourth quarter, ’17 hundred properties. What we really liked about that property that I think is representative of other potential future opportunities was the ability to create value by bringing that portfolio onto our platform. So as many of you probably know, that portfolio was currently or previously being managed by three, four, five different local and or regional property managers all across the country. And property managers of of that size just can’t operate at our level of institutional performance.

And so by bringing that property or that that portfolio onto our platform, there’s immediate opportunity to create value in the first year. Right? In place cash flows on on that deal, five area, low fives or so. And then over the course of the first twelve months, as we overlay our collection practices, pricing acumen, controllable expense controls, our expectation is that yields out of that portfolio should grow into the high fives. If we do a really good job executing, maybe even close to a six because of the value unlock on our platform.

As we think about other opportunities out there like we’ve talked about many times, we know that there’s a a large universe of assembled portfolios, both existing stock scattered site units and then more recently, newly constructed BTR portfolios. Eventually, that that capital is is going to need to find liquidity and and need to monetize itself. You know, much of that capital has been on the levered IRR clock for five, six, seven years at this point, naturally gonna need recycle. It also probably was debt financed in a very different environment than today. We think that will translate into increased seller motivations.

Nothing concrete to talk about, but we know that those opportunities are out there. We will be unwavering on our commitment to the AIM H buy box in terms of location, quality, and product type. But for the right opportunities that fit the buy box, we love those. They’re they’re great growth opportunities and great opportunity to create value on our platform.

Jamie: What’s your appetite for third party capital, whether it’s JVs, funds, for acquisitions?

Chris, AMH: You know, we we have a couple of of existing joint venture relationships that have to date been focused on increasing size and scale to our AMH development program. One of those still has I don’t know the exact number off the top of my head, but several hundred millions of capital that is still to be deployed ahead of us. I think we view joint ventures as as a nice complement when the time is right to do either, you know, something more or complementary to what we’re able to do on the balance sheet. But when when the math works relative to on balance sheet cost of capital, priority number one is always, you know, grow from and deploy from the balance sheet accretively.

Jamie: What about funds? Is that something you guys contemplate?

Chris, AMH: You know, we think about a lot of things. We’ve thought a lot about things over the years. It it depends. Is is there a a case in time where that could make sense for for certain operators? You know, potentially, I would say that’s another level of kind of complexity to the story.

I would say, you know, we have had the good fortune of of good access to capital over the years and haven’t needed to go there, and, you know, we very much pride ourselves on on keeping the strategy, the message, and the balance sheet simple.

Jamie: Alright. Speaking of the balance sheet, I’ll let you take us home here. How should we be thinking about balance sheet strategy and what’s on your plate for the next twelve months?

Chris, AMH: Balance sheet strategy is that we are almost there, finally accomplishing our objective of 100% unencumbered the balance sheet. Coming into this year, we had two remaining securitizations on the balance sheet, one of which was paid off at the end of the first quarter. That was financed through last month’s trip to the bond market. We over indexed to that bond execution last month, where we essentially prefunded close to half of the second securitization refinancing that we’ll pay down in the back half of this year. And at that point, the balance sheet will be 100% unencumbered.

Then an objective of ours for the last ten years, you know, with the additional benefit of freeing up our ability to asset manage the portfolio. One of the great things about our asset class and its granularity is our ability to asset manage discreetly down to the individual unit level and recycle capital very attractively. I think as most people know, today, we’re disposing of homes with an exit cap rate, you know, sub 4%, somewhere in the threes, attractively recycling that capital into our development program. The two securitizations that are being paid off this year free up about 9,000 homes that have been tied up in collateral pools for the past decade that will create kind of the next leg of runway for our disposition program over the next couple of years.

Jamie: And do you think the what do the credit agencies say about or the rating agencies say about the securitization? Do you think that impacts ratings at all?

Chris, AMH: Definitely a positive. You know, I will say though that’s been our strategy for years at this point to ourselves, communicated externally, and to the rating agencies as well. So I think to a certain extent, they were already expecting it, but certainly a positive, And I’m sure that was part of the the rating agency calculus when S and P moved us to positive outlook earlier this year. I

Jamie: think we’re just about out of time. Is there anything we didn’t cover that you wanna get across to the crowd? No, I think was

Brian, AMH: pretty thorough. I mean, really to emphasize that the industry, and specifically AMH, just in a really good place to finish this year strong.

Jamie: Great, thank you. Thanks everyone.

Chris, AMH: Thanks everyone. Thanks Jamie.

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