AMH at BofA Conference: Strategic Focus on Growth and Stability

American Homes 4 Rent (NYSE:AMH) presented a strategic overview at the BofA Securities 2025 Global Real Estate Conference on Wednesday, 10 September 2025. CEO Bryan Smith and CFO Chris Lau highlighted the company’s robust position in the single-family rental (SFR) industry. They emphasized strong demand driven by demographic trends and affordability challenges, while also acknowledging supply pressures in certain markets.

Key Takeaways

• AMH plans to deliver over 2,200 homes this year through its vertically integrated development program.
• August quarter-to-date same-home occupancy stood at 96%.
• The company is optimizing lease expirations to coincide with stronger leasing seasons.
• AMH’s balance sheet is set to become 100% unencumbered by year-end.
• Demand remains strong in the Midwest, Seattle, Salt Lake City, and the Carolinas.

Financial Results

AMH reported strong financial performance in the recent quarter, with significant metrics reflecting their strategic initiatives:

• Same-home occupancy reached 96% as of August.
• Blended spreads are expected to remain in the high threes for the full year.
• Development homes are yielding in the mid-5% range.
• Bad debt remained below 100 basis points in the first half of the year.

Operational Updates

The company continues to focus on a diversified portfolio with an emphasis on single-family detached homes. Key operational highlights include:

• Implementation of a community management strategy to enhance property operations.
• Strong performance reported in the Midwest, Seattle, Salt Lake City, and the Carolinas.
• Challenges identified in markets like Phoenix and San Antonio due to supply influx.
• Residents typically have strong incomes and are employed in essential industries.

Future Outlook

AMH remains optimistic about future growth, supported by strategic initiatives and favorable market conditions:

• The company is focusing on optimizing lease expirations to align with peak leasing periods.
• Development programs are expected to yield over 6% due to favorable pricing discussions with builders.
• AMH does not anticipate needing additional equity for its development pipeline, relying instead on retained cash flow.
• Regulatory outlook is improving, with a focus on easing supply-side constraints.

Q&A Highlights

During the Q&A session, AMH management addressed various topics, including:

• Geographic demand trends, with strong performances noted in specific regions.
• Supply pressures in certain markets, such as Phoenix and San Antonio.
• The company’s approach to managing construction costs amid tariff impacts.
• Plans for capital allocation, including potential share buybacks and development program prioritization.

For further insights, readers are encouraged to refer to the full transcript below.

Full transcript - BofA Securities 2025 Global Real Estate Conference:

Yana Gallen, Bank of America Analyst, Bank of America: Good morning. Welcome to Bank of America’s 2025 Global Real Estate Conference. I’m Yana Gallen, and I cover the residential REITs at Bank of America. We’re very pleased to have with us AMH’s CEO, Bryan Smith, CFO, Chris Lau, and EVP and COO, Lincoln Palmer. Bryan will start with a few opening remarks, and then we can jump into Q&A.

Bryan Smith, CEO, AMH: Thank you, Yana. I’ll start today with some brief comments on the single-family rental industry, and then I’ll highlight a few key points specific to AMH. Then Chris will take over and maybe give a little bit more detail into operations and talk about the update that we posted last week. To start, the SFR industry is in a great place and continues to benefit from very strong long-term fundamentals. Most notably, demand across the industry will continue to be strong as the large millennial cohort ages into prime single-family rental age. This, coupled with the challenging affordability dynamics, provides us with great support for long-term future growth within the industry. AMH in particular is in a great position to continue its track record of outperformance in the residential space.

We’ve strategically assembled a portfolio of high-quality assets in superior locations and have a well-diversified portfolio footprint around the United States. In addition, these high-quality assets are supported by a very robust and efficient services platform that’s benefited from our continued investment in technology, which has created an efficient and very high industry-leading resident experience. Finally, on the growth side, we have the only vertically integrated development program in the single-family industry. We’re on track to deliver over 2,200 homes this year of newly built rentals across our portfolio. Outside of development, we’re staying true to our buy box and remaining patient. When we find opportunities like the one we saw last year, a portfolio acquisition that we completed in the fourth quarter, we’re prepared both from a balance sheet perspective and from an operational perspective to integrate those homes quickly and seamlessly.

In a nutshell, AMH is very well positioned to expand on the success as we continue to innovate within the single-family rental industry. Now I’ll pass it over to Chris.

Chris Lau, CFO, AMH: Yeah, you know, look, in terms of updates, from a high-level perspective, the business is performing very, very well. For anyone that followed the quarter, I think you clearly saw that in results this past quarter. I think you would have clearly seen that in updates to the guide, which, as you guys probably all took note of, was pretty much positively revised across the board. In terms of update today, we put out an updated deck. It hit the website on Wednesday, I want to say. The punchline there is, as you guys know, this time of year is the middle of move-out and turnover season, and the teams are doing a great job executing. August quarter-to-date same-home occupancy was 96%. Blended spreads in the high threes, pretty much right on top of what we were expecting at this point in the year.

New leases are kind of following the seasonal moderation shape. Like we’ve been talking about, this year we’re expecting to see less moderation in that shape than last year and long-term average. We see that being balanced by continued strength in renewals, which for this time of year and really for the balance of this year, renewals represent the bulk of our leasing activity and is essentially the name of the game as we’re thinking about shape of top line for the balance of the year. In addition to operating updates, we always think that it’s helpful to reinforce a couple of the key strategic differences that differentiate us and our results. Bryan touched on a couple of them, but just to recap them real quick before we kick it off into Q&A.

As we think about the things that make us different, it really comes down to three key things. One, the portfolio, the commitment to diversification, like Bryan was talking about. Also, increasingly important is the focus on single-family detached product. Like we all know, there’s a lot of different forms of supply out there right now: apartment supply, flat BTR type of supply that is headwinding a lot of other residential portfolios differently and more than ours. You can clearly see that reflected in our results. That’s a function of diversification product type. Demand is very important, like Bryan talked about. That’d be number two. The third that we like to reinforce is the importance of capital allocation strategy and, importantly, access to the development program. I’d encourage you all to take a look at the updated investor deck that’s on the website.

I would check out page nine, where you can tangibly and incrementally see FFO contribution coming from the various different components of the business. Same-store, which is yes, meaningful, but also non-same-store contribution largely coming from the development program. When you look at it over the last couple of years, it’s actually three years on the slide. It’s very enlightening seeing the contribution from both. We know our industry, our FFO has led the industry. Seeing the componentry is very eye-opening. I’d encourage you to take a look at that. To hand it back over to you, I think we’d say business is performing well. FFO expectations for this year, once again, leading the residential sector by hundreds of basis points. We continue to be really optimistic forward looking.

Yana Gallen, Bank of America Analyst, Bank of America: Great, thank you. Happy to take any questions from the room. I guess maybe we could start with just if you could talk about the demand environment and maybe geographically, is it still kind of Midwest leading? You know, what do you see on the ground? If you could talk to the different markets.

Bryan Smith, CEO, AMH: Yeah, demand overall is in line with seasonal expectations. Looks a lot like last year, maybe a little bit better. When we look on a market-by-market basis, I think it’s important to point back to something that Chris said, which is we’re committed to this diversified portfolio. These times like this are when that shows real strength. We have a lot of, I would call, differentiated markets that are performing extremely well. The Midwest is one of those, Yana. Seattle, while we have competition there, it’s one of our new development markets. Salt Lake City continues to perform extremely well. Again, a differentiated market for us. The Carolinas are doing very well also. There’s been talk about Florida a little bit in the news lately when it comes to supply and demand and migration. Our Florida markets, Orlando especially, is performing very well. Jacksonville is right behind it.

Tampa, while it seems to be experiencing a little bit more of the pressures that otherwise others may be seeing, our new development product in that market continues to be something that people are looking for and demanding, and our communities are moving very well there also. Overall, very pleased with demand. We’re pleased with this diversified footprint. In the markets that are still challenged, call it a Phoenix, San Antonio, that have a lot of that influx of all of the different types of products that Chris talked about, we’re still committed to those markets long term. We see great fundamentals there and expect those to correct at some point when supply eases a bit.

Yana Gallen, Bank of America Analyst, Bank of America: I’m curious, do you notice any type of differentiation in performance or demand between the scatter site product and the BTR communities?

Bryan Smith, CEO, AMH: We operate all of our properties the same way. We’re still developing our community management strategy. One of the things that we have the unique ability to do in our communities is to match our deliveries in those communities with demand. It’s a lot different than delivering, say, a horizontal type apartment, townhomes, or a multifamily. Instead of dropping a building in a community with 30 units in it or 20 units in it, we match our deliveries to the demand. In our communities, we’ll take, call it four to six deliveries a month, depending on the pace, and we have the ability to shift that up and down. It allows us to lease through without the use of concessions. That’s one of the differences between the scattered site portfolio and those communities. It’s a real nice benefit that those provide to us.

Yana Gallen, Bank of America Analyst, Bank of America: Great. You touched on current occupancy, but it is move-out season. Can you walk us through how you expect that to trend through year-end? I know you also did some work in terms of the renewal schedules and optimizing when leases expire. If you could explain that to us.

Chris Lau, CFO, AMH: Sure. Maybe that’s the right place to start because that’s really a key theme to this year. That’s our objective of optimizing the shape of how leases expire over the course of the year to best match up with the strongest parts of the leasing season. The right way to think about it is historically, our lease expirations were typically split 50% first half of the year, 50% second half of the year. What Lincoln and team have been able to accomplish is really shifting that earlier into the year to better match up with the strength of leasing season. Today, lease expirations are split more 60% first half of the year, 40% back half of the year. Importantly, the places that we’ve been able to move leases from is largely out of the fourth quarter, moving expirations out of the fourth quarter and shifting them into the springtime.

What that’s doing for us is that it is increasing the proportion of new lease opportunities during the stronger rate environment time of the year and then decreasing the proportion of new leases that get reset during the seasonally slower time of the year, being the fourth quarter. In terms of what that means for this year, that’s translating into less steepness in the back half of the year that we’re expecting on new leases and also occupancy. For this year, full-year expectation on blended spreads is high threes. Importantly, we’re also expecting to see less moderation in occupancy in the back half of this year as well. Naturally, occupancy will moderate in the back half of the year. That’s just a function of it being turnover season. There’s naturally frictional time between tenant A and tenant B, but we’re expecting less of that this year compared to last year.

Yana Gallen, Bank of America Analyst, Bank of America: Great. You know, a lot of us try amongst you and your peers to take a look at this type of blended spread activity and kind of an earn-in that you’d be starting the year at. I don’t know if you can kind of walk us through how you think about those different components and kind of help us with the 2026 earn-in.

Chris Lau, CFO, AMH: Yeah, based on the midpoint of expectations as of today, I think expectation for earn-in going into next year, probably just sub 2% or so. Not too far different than 2024 earn-in rolling into 2025. I think this year’s start of the year earn-in was more like 2%. Similar ballpark, probably a little bit sub 2%.

Yana Gallen, Bank of America Analyst, Bank of America: Thanks. If we could talk a little bit about supply trends in your markets, I think the BTR is a little easier for us to track, but how do we think about more of that? Someone who can’t sell their home potentially turning that into a rental unit. If you could kind of help us with the supply outlook.

Bryan Smith, CEO, AMH: Sure. I talked a little bit about supply in some of the specific markets. Maybe more generally, it’s very shadow supply is something that’s very difficult to measure, I think, for everyone because they can kind of come on and off. There’s optionality. A lot of times people will have their home listed for sale at the same time that it’s, you know, they may also be willing to rent it. It’s a little bit challenging for us to measure. What we do is kind of start with a broad level of what all the different supply inputs are. That would be the built-to-rent, the multifamily, the single-family, maybe some of that shadow supply to the extent that we can measure it. Then we’re going to drill down to AMH-type product that is competitive directly with us.

One of the important things that I think differentiates us from most of the product that’s on the market today is just our commitment to, I think Chris mentioned, the single-family detached product. There’s a lot of townhome out there. There’s a lot of this horizontal apartment. More importantly, we’ve stayed committed to A locations, places where people want to be convenient to work. A lot of the development that’s taken place has happened in tertiary markets. That’s the stuff that’s going to be really challenging to move through over the next whatever period of time it takes to absorb that inventory. For us, as I said, in most of our markets for competitive AMH supply, we’re seeing little pressure in most of the places. The couple that I mentioned are the places where you’ve seen the biggest influx of supply in maybe some of our Texas markets and Arizona.

Yana Gallen, Bank of America Analyst, Bank of America: I guess maybe we could look a little bit more at those markets. Is it all supply? Is it this shadow supply that’s causing an issue? If you could kind of help us understand what’s happening specifically in kind of the weaker rent growth markets.

Bryan Smith, CEO, AMH: Yeah, for sure. In Austin, San Antonio, it’s just all supply. Now, there’s some indications that, depending on which reports you look at, there are some indications that that supply, at least deliveries, have peaked. I think their multifamily especially expected a little bit more relief in 2025 than they saw, and maybe that got extended out to 2026 just based on the pace of absorption. It has something to do with that. The shadow supply is tough to separate out individually, but when you compound all of that together in a market like Austin, a lot of pressure. Phoenix is a little bit the same way, but again, Phoenix is a, it’s always been a great market for us. We continue to develop in Phoenix and the communities continue to perform well there.

Overall, the most important piece for us is to just drill directly down to competitive supply that looks like AMH product in AMH locations. That’s the easiest way, I think, for us to get a picture around it. Most of the places we’re just not experiencing a lot.

Yana Gallen, Bank of America Analyst, Bank of America: Maybe just kind of different portfolio operating trends, if you can give us an update, kind of how bad debt is trending, and then any changes in residents taking a little bit longer to pay or on the margin changes with the resident profile rent to incomes.

Bryan Smith, CEO, AMH: Chris, you want to start on bad debt, and then maybe I’ll talk about the resident?

Chris Lau, CFO, AMH: Sure. Collections and bad debt have been a bright spot year to date through the first six months, tracking a little bit better than our expectations. First six months bad debt was sub 100 bps. That’s moving in the right direction. As we think about the balance of this year, as many of you know, naturally there is some level of seasonality to bad debt that typically ticks a touch as we get into move-out time. We would expect that to, as I said, bump up as we get into the third quarter, but still heading in the right direction, which we take as a good indication of resident wherewithal and health.

Bryan Smith, CEO, AMH: Yeah, as far as portfolio goes, residents that are coming into the platform still have strong incomes north of $150,000, five times multiples on rent, two income earners, which gives us some comfort that there’s redundancy in our households. The profile hasn’t changed a whole lot. It’s the late 30s resident who is kind of the peak of that millennial profile that Chris Lau talked about, the support for our long-term demand. Overall, things are good. I think there’s been a lot of question over the last couple of days about the jobs revision that came out and how that may be affecting our residents. If you look back at the period that that covers, it’s retroactive and what we’re seeing in our residents, despite all of that information being out there, it’s already baked into the portfolio. Residents are coming in with, again, still high incomes.

Credit scores aren’t suffering. I think probably the most concurrent place that you would see something coming into the portfolio as a result of job loss or difficulty to pay would probably be in our delinquency rates. Those continue to perform extremely well and are at least as good or higher than they’ve been for several years. Residents continue to be strong. We also take comfort in the fact that a lot of our residents are employed in essential industries, whether it’s healthcare, first responders, teachers. These are people who are members of their community that are involved in essential activities. Again, the redundancy gives us some comfort as well that we have some backup in the event that there are some disruptions in households. So far, we’re not seeing anything in the AMH resident.

Yana Gallen, Bank of America Analyst, Bank of America: Great. Maybe just to kind of tie it all together, earn-in, the rents slightly less than last year or potentially in line, occupancy a little bit better, and then bad debt kind of stable.

Chris Lau, CFO, AMH: We’re talking this year or next year?

Yana Gallen, Bank of America Analyst, Bank of America: Just looking forward.

Chris Lau, CFO, AMH: Look forward. Occupancy is at a stable point, similar year over year, 2024 to 2025, 96%, low 96% or so. We like that area. Earn-in, just sub 2% going into next year. We’ll have to see where market rent growth ultimately shapes up going into next year. That’ll be a big factor. Collections and bad debt, yes, heading in the right direction. We do know that there are still a number of municipalities and core systems that continue to process at slightly slower than historical normal timelines. That will probably still be a factor going into next year, but collections definitely moving in the right direction as well.

Yana Gallen, Bank of America Analyst, Bank of America: Great. Maybe we could turn it over to the development side, and if you can just walk us through the underwriting on development today. I think there was a lot of expectations of tariff impacts. Just curious how the years played out thus far and how you’re thinking about it going forward.

Bryan Smith, CEO, AMH: Sure. We set expectations at the beginning of this year to deliver the new developed homes at a going-in yield of the mid-5%. If you remember, if you followed, that was slightly lower in Q1 as expected, as we caught up on some extra inventory that we saw at the end of last year. We’re on track for that. Those yields have improved as we progress through the year. With regards to tariffs, we’re really pleased with the fact that our vertical construction costs are the same as last year, if not slightly down. We’ve been able to absorb any impact that we would have seen from tariffs through a couple of different areas: optimization, maturation of our platform, and then really an increased availability of labor that we’re seeing because home starts from the other home builders are down, certainly below our expectations.

Our team’s done a fantastic job managing those vertical construction costs, muting any effect that tariffs might have. We expect that to continue into the near future as well. We’re really pleased with that part of the business and the results that were shown this year.

Yana Gallen, Bank of America Analyst, Bank of America: We saw that the home builders had a pretty challenging spring selling season. I’m sure you looked at opportunities to buy in bulk from them. If you could kind of walk us through what their expectations are.

Bryan Smith, CEO, AMH: Sure. The biggest news there is there’s been a little bit of a change. At least we feel like there’s been a change in sentiment. We’ve been looking at very large tapes from the national builders for as many quarters as I can remember, seven or eight at least. As I talked about on the last call, we saw a little bit of a change over the last couple of months where some of the larger national builders were more willing to discuss price, more flexible in that negotiation. It’s moved the yields, potential yields slightly, but they’re still in the high 4% under our underwriting model.

When you lay that next to what we’re able to deliver in our own internal development, which is built to our exact specs and the exact locations that we want, built for long-term durability from a maintenance perspective, and significantly upgraded from a lot of the other entry-level homes that are on these tapes, it really shows the strength of our internal development program as the right place to kind of form the foundation of our growth programs. Going forward, we’re optimistic in that willingness. We see that continuing. We still have a long way to go before it makes sense to do anything at scale. There’s one other piece that’s kind of surfaced of late that’s unique to us, I think. That is national builders and regionals being willing to talk about trading or selling us finished lots in some of their communities.

A lot of the stuff that we saw coming through on tapes over the past few quarters, think about mostly townhomes, a lot of attached, maybe 20% fit our buy box, characterized by kind of maybe B-ish locations. The home builders are still having success moving product in their A locations, just not at the same pace. As they project fewer sales per month, they’re starting to consider maybe we cut out a piece at the back end of the phase and sell finished lots to AMH that can develop non-competing product. We’re not going to be selling houses. There’s some nice synergies there that they’re starting to surface. We haven’t done anything yet, but we’re optimistic that there could be opportunities there as well. We’re the only one that’s completely vertically integrated that can take advantage of those lot opportunities as they come.

Yana Gallen, Bank of America Analyst, Bank of America: What would that kind of look like in terms of pricing? Would that help the kind of mid-5% yields, or yeah, how should we think about that opportunity versus finished?

Bryan Smith, CEO, AMH: It’s nice too because the cycle time to get those houses delivered is obviously a lot shorter. If all the horizontal development is complete, we would be taking these lots down later in the cycle at at least maybe even a discount to what we could deliver the kind of internal development. There’s a nice savings on the time and the speed. The expectation is that it’s going to push those yields in the 6% plus.

Yana Gallen, Bank of America Analyst, Bank of America: Great. Maybe turning over to you, you had great success at the end of last year with a portfolio acquisition. Just curious what you’re hearing might come to market. Is it dependent on rates coming down?

Bryan Smith, CEO, AMH: Yeah, we’ve been a little bit surprised at the lack of portfolio activity. We closed the one about this time last year, fourth quarter. It was a perfect scenario for us. We were able to provide a comprehensive solution to an owner that had wanted to exit the space because we operate in so many markets. It was an easy overlay. We have a very mature disposition program to cull some of those assets that didn’t fit for either one of us. We saw that as a great opportunity to go out and kind of leverage that solution. Since we closed that declared transaction, it’s been really quiet, almost kind of a wait and see what happens from some of the other portfolio owners. I think it’s a matter of time before some more of those opportunities come in front of us, but not a lot is traded.

I’d have to say the activity, maybe even slightly less activity in terms of seeing different tapes than maybe even six months ago.

Yana Gallen, Bank of America Analyst, Bank of America: Is there enough out there to assess what’s the bid-ask spread between where they want to sell these portfolios and where you’d be willing to buy them?

Bryan Smith, CEO, AMH: Yeah, not a ton of activity to nail that down with any precision, but there’s an expectation. If you look at the way we’re managing our disposition program and the fact that we can sell houses to end users in the 3% cap range, which would technically be the market value of a vacant house, there’s a gap between the value of a vacant house to a homeowner and value to an investor from a cash flow basis right now. Bridging that difference is an important consideration. With a sophisticated seller that we had that we transacted with last year, it was pretty easy. Some of the smaller portfolios, which are also very good fits, we still need to close that gap. Their expectations for market value are a little bit different than what it would show to an investor. That’s one of the hurdles.

There hasn’t been a lot of dialogue about it, but we do expect it to come at some point.

Yana Gallen, Bank of America Analyst, Bank of America: I’m just curious, we’re hearing, you know, home prices are coming down in Florida and Texas. Is it anywhere close to where these one-off acquisitions of how you kind of started the company make sense or that’s no longer going to apply in the growth strategy?

Bryan Smith, CEO, AMH: We’d love to. That’s one of the benefits we have. We’ve got a really nice foundation with the development program, and we can be opportunistic either on the MLS portfolios or from a national builder perspective. The homes that are having the greatest price pressures are not necessarily the, wouldn’t necessarily be the top of our list. You’re seeing slightly inferior product. You’ve got a lot of attached homes, a lot of townhomes, maybe a little bit further out. They’re seeing a little bit more pressure. If you factor in like a true underwriting model on that, it makes it less attractive to us. Despite the fact that the home prices are coming down, in the event that it would be a product that we like, it’s a little bit crowded. We don’t see a great opportunity there in the short term.

Yana Gallen, Bank of America Analyst, Bank of America: Maybe turning it over to Chris, just help us think about the cost of capital and how you’re kind of financing the developments, but also potentially if these opportunities do, a larger portfolio opportunities do come to market.

Chris Lau, CFO, AMH: Yeah, when we think about funding of the development program, it’s a really important topic. A lot of people in this room have heard us, kind of broken record. The intentionality we have there in terms of how we have sized that program such that it is fundable without any need for incremental equity as we think about future years of development pipeline, no need for equity, and minimal-ish amounts of incremental debt. The primary funding blocks for the way that we have the development program sized are retained cash flow from the business, recycled capital from dispositions, which today, as Bryan mentioned, is screening very attractively, selling with dispo cap risk in the threes, and then some level of modest incremental leverage capacity off of the balance sheet as EBITDA grows, which is really important in terms of dependability of funding sight line to the development program.

What that then in turn does is means that incremental forms of capital, whether it be incremental debt or equity for that matter, become opportunistic weapons to think about additional opportunities for growth, whether it is if things on a one-off basis end up making sense, opportunities to buy from builders make sense, portfolios. We love the strategy and idea of portfolio consolidations. It’s a great way to essentially match timing against then cost of capital, again, when the math makes sense. It’s a fantastic value creation opportunity for us as well, using the fourth quarter portfolio as an example that Bryan was talking about. That portfolio under the previous owner was being managed by four, five, six different local and regional third-party property managers, doing a fine job. They just cannot operate at the same level of standard that we can and someone with 60,000 units can.

Based on in-place cash flows, we bought that deal in the low fives. Over the first 12 months, as we overlay our pricing acumen, collection processes, expenditure management controls, our expectation is that yields out of that portfolio should grow into the high fives, if not even potentially close to six, as operations come up to our level of standards, again, creating value that is unlocked by bringing those portfolios onto our platform, which represent really unique opportunities.

Yana Gallen, Bank of America Analyst, Bank of America: When you think about your cost of capital relative to this kind of mid-5%, are you getting enough of a premium for it?

Chris Lau, CFO, AMH: We are, and again, that comes down to how we have it sized, right? If we think about, you know, two-thirds or more of this year’s development spend is coming from retained cash flow out of the business, disposition proceeds in the $3 million, and incremental cost of borrowing in the 5% to low 5% blended in, definitely.

Yana Gallen, Bank of America Analyst, Bank of America: Great. I believe you have a final securitization coming due, maybe if you can walk us through the plan.

Chris Lau, CFO, AMH: Yeah, that final securitization is actually scheduled for payoff at the end of this month. Very excitingly, that represents our last securitization on the balance sheet, which means by the end of this year, the balance sheet will be 100% unencumbered, which has been a goal of ours basically since the beginning. Happy to see this day come. When that is paid off, that frees up another 4,500 units or so of previously collateralized homes that can now be freely reviewed by our asset management program and considered for disposition. To give you some context in terms of the securitizations that we’ve been paying off of the balance sheet, last year we paid off two securitizations. This year, with this last one, we will have paid off two securitizations this year as well.

That frees up a total of about 18,000 homes that can now be freely reviewed again by the asset management program. Our best guess is, plus or minus 10% of those could be disposition candidates, essentially helping to fuel our pipeline of disposition opportunities over the next couple of years as we think about various different funding sources.

Yana Gallen, Bank of America Analyst, Bank of America: You’ve kind of talked about this has been a big goal of the company. Curious from the rating agency standpoint, how are they thinking about the fully unencumbered portfolio?

Chris Lau, CFO, AMH: That’s a good question. It’s a positive. You can see that in our S&P outlook that was moved to positive a couple of months ago. This was a key part of that discussion. We are mid-Triple B positive with S&P, Baa2 with Moody’s, optimistic that Moody’s will share S&P’s view soon in terms of shifting of outlook.

Yana Gallen, Bank of America Analyst, Bank of America: Bringing down that low five.

Chris Lau, CFO, AMH: I will say, you know, the market, anyone could see this from our last couple of executions in the market. I would say the fixed income community, you know, fully sees and respects where the balance sheet is. You know, the balance sheet in terms of leverage, low fives, nearing 100% unencumbered, very much screens high Triple B territory. That’s where bonds are pricing for us currently. I think this is a nice validation of that.

Yana Gallen, Bank of America Analyst, Bank of America: Maybe just anything new on the regulatory front?

Bryan Smith, CEO, AMH: Yeah, the regulatory front, just kind of zooming out, there’s been a distinct change in kind of the outlook towards our industry, I think, over the past six months with the change in administration. There’s a lot of talk these days about this new focus on potentially declaring a housing emergency later on in the year. We’re not exactly sure what that means or what effect that’s going to have. We’re encouraged by the fact that it seems like there’s more focus on the problem, the supply side of the housing equation, rather than discussions about what was wrong with the existing home stock and problems with interest rates and so forth. We’re encouraged that people are focusing on the right things.

These conversations are similar to conversations we’ve had within local municipalities with governors of some of our key states, trying to figure out ways to ease up on regulations to allow us to get permits quicker, to cut down on all the development fees that have really grown substantially over the past five or six years. We’re encouraged to, I think, they’re focusing on the right things going forward. Down at a more local level, there have been a number of nice measures passed in Florida, Georgia, North Carolina, and Texas that help us with managing trespassers and some other things. There’s been some good progress on that over the last couple of years. The focus, I think, is moving to the right place. It’s changed distinctly over the past few years from a focus on institutional owners.

We’re in a very unique position in that we’re part of the solution too. We do need some recognition for that as well.

Yana Gallen, Bank of America Analyst, Bank of America: Hey, last chance for any questions?

Chris Lau, CFO, AMH: Of your insurance exposure and like what you retain, what covers you retain and what kind of fixes? Sure. For this year, our insurance renewal is done. It was done the beginning part of this year in February. Our year-over-year premium change was a decrease in the mid-single digits for this year. I think, as everyone knows, coming into 2025, I would say the insurance kind of market and landscape was in a better, healthier place coming into this year than coming into 2024. I think what that helped the insurers to be able to do was differentiate between good-performing risks like ours versus some of the other risk-producing sectors out there elsewhere. You saw that reflected in our renewal down mid-single digits. In terms of what we retain, we do run a small-ish captive insurance program, not huge, a couple million dollars of premium per year.

Going forward, we definitely see opportunity to increase that responsibly, not shifting any terms of change and risk composition on the balance sheet. For a portfolio like ours over the past 10 years plus, our insurance program has been profitable to our insurance partners every single year except for the year of Harvey, right? One loss year out of 10 plus at this point. That’s the type of risk that would make sense to retain a little bit more of captively, helping to bring down our insurance costs over time.

Yana Gallen, Bank of America Analyst, Bank of America: Okay.

Chris Lau, CFO, AMH: You can develop at a 5.5% rate, you sell it at 3.5%, find coverage and.

Bryan Smith, CEO, AMH: Yeah.

Chris Lau, CFO, AMH: Look, it’s another form of capital allocation that we evaluate all the time. The difference is development isn’t just a form of allocating capital accretively both to value and earnings. It’s also a function of improving the portfolio, right? If you think about the quality of product that we are delivering via the development program, this is quality of product in locations that you just can’t replicate or buy anywhere else. We truly see it improving the quality of our stock and our asset base over time, especially when you think about the fact that a good portion of that capital is coming from disposing and selling of otherwise underperforming, kind of lower performing assets out of the portfolio, really creating a refreshing effect to our stock and portfolio over time. A lot of different kind of benefits to the development program.

Share buybacks are something that we evaluate all the time. I don’t think we’re there quite yet in terms of attractiveness of taking capital away from the development program, but it’s something that we do regularly think about.

Yana Gallen, Bank of America Analyst, Bank of America: I have a few rapid fire. When the Fed starts to cut, do you expect rates for long-term debt to decline, stay flat, or rise?

Bryan Smith, CEO, AMH: Flat to slight decline.

Yana Gallen, Bank of America Analyst, Bank of America: Last year, the majority of companies stated they’re ramping up spending on AI initiatives. How would you characterize your plans over the next year? Higher, flat, or lower?

Bryan Smith, CEO, AMH: Higher.

Yana Gallen, Bank of America Analyst, Bank of America: Do you believe same story in Hawaii for your sector will be higher, lower, or the same next year?

Bryan Smith, CEO, AMH: I’d say for residential overall, higher.

Yana Gallen, Bank of America Analyst, Bank of America: Great. Thank you very much.

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