Invitation Homes at Citi Conference: Strategic Growth Amid Market Shifts

On Tuesday, March 4, 2025, Invitation Homes (NYSE: INVH) presented at Citi’s 30th Annual Global Property CEO Conference 2025, highlighting its strategic resilience and growth prospects. CEO Dallas Tanner emphasized a favorable entry point for investors, supported by strong fundamentals. Challenges such as supply pressures in certain markets were also addressed, underscoring the company’s adaptive strategies.

Key Takeaways

• Invitation Homes is capitalizing on demographic trends, with 13,000 individuals turning 35 daily, boosting demand.
• The company maintains high renewal rates, contributing to nearly 80% of its revenue.
• Partnerships with builders are crucial, with 1,400 units expected to be delivered in 2025.
• The focus is on rate growth, with renewal rent growth anticipated between 3-5%.
• The company is managing risks through strategic asset management and geographic dispersion.

Financial Results

• Renewal rates are advancing into the mid-5% range.
• Dispositions have been executed at cap rates in the low 4% range.
• A bond deal in October 2024 featured an all-in coupon just under 5%.
• Occupancy stands at over 97%, with a target of 96.5% for the year.
• Property tax expenses account for about 50% of total expenses.

Operational Updates

• Strong builder partnerships are facilitating the acquisition of new construction properties.
• Builders deliver between 8-10 homes monthly to Invitation Homes.
• The company is optimizing for rate growth, even if it means longer market times for properties.
• Monitoring supply issues in Central Florida, Texas, and Phoenix, with stabilization signs in Phoenix and increased demand in Tampa.

Future Outlook

• Strong renewal numbers are expected through early 2025.
• New lease rates are projected to re-accelerate starting February 2025.
• Portfolio shaping and pruning are prioritized to improve growth and margins.
• Build-to-rent deliveries are expected to decrease by 50-65% this year.
• The company is focused on managing its portfolio for risk-adjusted total returns, including insurance structuring.

Q&A Highlights

• Invitation Homes collaborates with 10 national or regional builders to streamline construction processes.
• The company is exploring capital allocation strategies to assist builders without assuming full construction risk.
• A focus on townhomes and infill products aligns with multifamily trends, yet still attracts single-family rental customers.
• Rent growth is expected between 3.5-4.5%, with a focus on long-term risk-adjusted returns.

In conclusion, Invitation Homes continues to adapt to market conditions with strategic partnerships and a focus on growth. For more details, refer to the full transcript below.

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

Nick Joseph, Citi: Welcome to Citi’s twenty twenty five Global Property CO Conference. I’m Nick Joseph here with Eric Wolf with Citi Research. We’re pleased to have with this invitation Holmes and CEO, Dallas Tanner. 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 GPC to submit any questions.

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

Dallas Tanner, CEO, Invitation Homes: Okay, great. Hey, can you all hear us okay? Thanks for having us. To my left, Scott Eisen, our Chief Investment Officer to my right, Charles Young, our President and to his right, John Olsen, our Chief Financial Officer and to his right, Scott McLaughlin, our Head of Investor Relations and Tax. First of all, thanks for having us.

I think it’s a really good time for Invitation Homes. One, I three reasons why you should buy the stock, I’d say. First, sort of a great entry point. I think we’re pretty I think we’re priced pretty favorable from an entry point perspective. We feel like the second point would be that our fundamentals are really good right now.

We’ve got something somewhere around 13,000 people a day turning age 35 in this country. Our average age of our customer is 38 years old. The demographic tailwinds, you know, as you guys know, support the thesis that millennials are going to have much more input on the way they live, the flexibility that they’re choosing, which lines up very similarly with the trends we see in our own portfolio. Today, we have roughly a customer that’s staying with us thirty eight plus months, continues to renew with renewals making close to 80 percent of our business from a revenue perspective. Second, to those fundamental points is we’ve seen sort of the ability to weather, you know, sort of different inflection points, whether it’s a hot market or a slow market or a market with low interest rates or high interest rates, the fundamentals sort of carry the day.

And I would say lastly, is the growth prospects of our business. Renewals, as I mentioned before, continue to stay very sticky. And I think like what we’ve talked about coming off of our October call and was sort of confirmed on our earnings call last week is that we figured we would see really strong numbers in that renewals business through the end of the year and early this first part of the year. We shared updates through February with renewal rates pushing sort of into the mid fives. And then our new lease would start to bottom out in January, turning into February.

We’d start to see that reexcel. And so we shared some of that data, and we feel pretty positive that the company’s footing is really in a healthy place going into 2025. I’ll stop there.

Eric Wolf, Citi Research: So there’s probably going to be a lot of questions on operations. So maybe we’ll just start actually with external growth. You were talking about this a little bit last night, but I was curious how many sort of homebuilders you’re working with at this point, type of partnerships, how you think those partnerships could evolve over time? And if you think about what the greatest pain points are that you’re trying to solve for them, what are those? And sort of how can you work together to solve those pain points on your end and on their end as well?

Dallas Tanner, CEO, Invitation Homes: Let me just say a couple of things, and I’ll hand it over to Scott. I think on the pain points, we’re typically trying to solve for speed and certainty of close, right, for a builder sort of keeping the drag down in their business, letting them be much more of a manufacturing plant and a sponsor of homes versus running an entire delivery process with normal sales. And Scott, why don’t you provide as much color as you want around structures, partnerships and how that’s evolving?

Scott Eisen, Chief Investment Officer, Invitation Homes: Sure. So in terms of our builder partnerships, we’ve over the last three years developed relationships with, call it, 10 either national or regional production builders. And look, our goal and objective is to work with them to buy new construction product. And as we think about that new construction product, we view ourselves as being part of their ecosystem, right? The primary market that a home builder is trying to build for is for an end user.

But when we think about how we work with those builders and participate in their ecosystem, we will say to a builder, look, if you’re developing a 400 participating with you on buying homes in that community in sort of various formats. So one format where we could buy with a builder is to say we’d like to buy 100 homes. Let’s say it’s a 400 home community. We would buy 100 homes scattered throughout that community, and we would take down houses as they are developing that community. The second way we participate is, let’s say it’s a three phase community.

We may say to the builder, we’ll buy phase one or we’ll buy phase two, and then the other phases could be end user sales as well. And then the third way we would work with a home builder is, for example, they would give us a full dedicated community that might be 150, two hundred homes that would be sort of a separate community that we would run as a full community BTR. And so from our perspective, we look at the builders and say, look, we can be a supplement and a complement to your retail sales. And if you think about how the builders produce, generally speaking, their retail sales tend to be three to five homes per month. The delivery schedule they have with us tends to be something in the range of eight to 10 homes per month.

And so if we’re working with them on having them make deliveries for us, it both gives them confidence to potentially take on a larger project because they know they’ve got an institutional buyer that will be taking down some percentage of that community. And we will also accelerate their completion and sell out of that community because the pace of deliveries that they have with us is at a faster rate than they might have to an end user sale. And so when we work with them, we are very open with them on our analysis, right? They’re open book with us on what cost they would deliver us a home for. We’re open book with them on what yield on cost and what rents we’re underwriting.

We’re not trying to hide anything from them. And we try to come to a decision where we try not to take denominator risk in terms of the cost of the home, but obviously, we’re taking numerator risk in terms of what rent margins that we’re underwriting. And so when we work with them, we view ourselves as being some percentage of their sales. Like we would never be 100% of a sale for a home builder. But if they could just use us as a way to complement and continue to grow their business and if we could be 3%, five % of their sales and just help them, think of it, I think we’ve referred to this before as the concept of fleet sales.

With car sales. Something like that for us would be a way we would work with the builders and help them to continue to deliver supply. And so that’s kind of how we think about participating in that ecosystem and really being a long term partner with them. In an ideal situation, we work with the builder. We would like to say, look, what do you have coming in Florida for the next twelve months, right?

Show us your entire backlog and inventory of communities. And look, some communities might not be in a market where we have boots on the ground. Some communities might be at a price point that’s just too expensive for the consumer we’re targeting. Some communities, just for whatever reason, may not work for us and may fit one car garages, if it doesn’t have yards, etcetera. And so as we think about the product type, the location and frankly, the cost, we try to narrow down that funnel to something that works for us and work for them.

Not everything is going to work and we understand that. That’s what our funnel is for and that’s what our screening and underwriting process is.

Eric Wolf, Citi Research: Got it. And you’ve generally not have been a fan of balance sheet development, as you said, taking numerator risk and not taking denominator risk. Is there anything that would make you take a little bit more denominator risk in terms of, say, maybe taking some construction risk, lending to builders, let’s say, a certain LTV, different types of strategies where you can earn maybe an excess return in the short term and increase your deal flow from working with developers that need that cost of capital to build the properties that you want?

Scott Eisen, Chief Investment Officer, Invitation Homes: Yes. I think we’ve said this before where if you think of sort of the two extremes, right, the one side where we are right now is we are entering into forward purchase agreements with the builders. They deliver us a home. We lease it up ourselves. Obviously, there is the other side of the spectrum where you take the full construction risk, you take down the land, you take down the risk yourself, you have the development team, the GCs, etcetera, on your team.

We view there being lots of ways in between where we can work with developers, work with homebuilders, allocate capital to help them in the construction progress, the process, without us taking on 100% of that activity on our balance sheet. And so we’re thinking through ways where we can be in that in between area, where we can work with the builders, help build new product and ultimately get something that would be community and homes that we would want to own long term on balance sheet. We’re thinking through various ways to allocate capital to that structure that we think would be accretive to our shareholders and is kind of in that in between zone that I just referred to.

Eric Wolf, Citi Research: Got it. And maybe just one last question. I think on the call, you said you, at some point, there could be like a convergence between multifamily and SFRs in terms of operating structures. I didn’t really know what that meant. I didn’t know if that was like thinking through some multifamily development with townhomes.

Like I’m just trying to understand what the convergence would be between the two. And maybe it was just the transcript was really wrong, but I wanted to understand what it meant.

Dallas Tanner, CEO, Invitation Homes: It’s always the transcript. I would just say, look, we see this in smaller companies today where you see some people that have deployed capital and they’ve done some SFR, maybe even a little BTR, and they own a handful of apartment buildings, and they’ll talk about some of the synergies between the two the two businesses. You know, even one of our peers, when they were public, had a multifamily portfolio, I’m thinking of Tricon, and that they ran very well. But they eventually got out of that business, and they held on to their SFR business. So the P and Ls look very similar.

The businesses can be a little bit different. There’s some nuance. I think both could support each other, in the right context. I think what we were talking about more on the earnings call related to some of the townhome and more infill type of product that we’re doing. We have a lot of that going with different partners around the country right now.

We like it. Little higher price points, little bit more infill. Sometimes it shares a common wall. It might look and feel a little more homogeneous with, like, a multifamily sort of product or a brownstone product. But the reality is at the end of the day, it’s sort of your typical SFR customer that’s gonna stay with us sort of thirty eight months kind of fits our target demographic in terms of what we’re trying to do.

That’s all we were trying to say on the call.

Eric Wolf, Citi Research: Got it. And then in terms of funding this investment activity, dispositions have been great source of capital. Everyone can see that you’ve been selling assets for 4% or under. What’s in guidance in terms of the cap rate on those dispositions? And then given that these yields are just well below your cost of debt, why not be a little bit more aggressive in terms of selling more of these homes?

Dallas Tanner, CEO, Invitation Homes: John, do you want to take the how it plays into guidance? Are you talking about

Nick Joseph, Citi: the Yes.

John Olsen, Chief Financial Officer, Invitation Homes: I mean, we haven’t specified the cap rate. What I’ll say is our disposition activity over the last several years has been sort of in the low 4s ZIP code. Ultimately, year by year, it depends on market mix, depends on the actual product we’re selling. And it’s been a very attractive source of capital for us. I think to your question, why not sell more, I mean, we’re not trying to shrink the balance sheet.

We’re trying to shape the portfolio, prune the portfolio and in the course of so doing, improve our overall growth and margin profile with a focus on long term risk adjusted total returns. So it’s a means to an end as we sort of manage the business, as we think about what are going to be the evergreen assets that we want to hold on our book long term. But the reality is we can flex that level of activity up or down depending on sort of what market conditions are offering to us.

Dallas Tanner, CEO, Invitation Homes: Yes. Eric, let me just jump in here. Look, John and I work and we talk about we were literally talking about this last week. Like we just we’re constantly looking at where our sort of cost of capital can come from. And we did a really good bond deal in October of last year.

I think the treasuries were somewhere in like the $3.75 ish sort of range. And that all in coupon for us came just inside of 5%. So we’ll certainly use we have capacity on the debt side of the house as well in terms of the fund future growth. And so it’s just really to John’s point, like what’s the best sort of option for us real time? Accretion dilution analysis, where do we think we can drive the best risk adjusted returns for our shareholders?

And so it’s not it’s never a one size fits all approach. We certainly have expectations around forward deliveries for the year. I think, Scott, we’ve got currently committed, what, four Two thousand. No. I know.

But how many come in delivery in ’25? Fourteen hundred. Fourteen hundred units that we know are coming in for sure. So some of the early guidance will reflect that. Right?

And then as the year plays out, to John’s point, we’ll look for things as we evaluate other opportunities as well.

Eric Wolf, Citi Research: Got it. Looking at your update, also your recent earnings, it seems like things bottomed around October. You’ve seen some pretty nice sequential growth. Since then. Obviously, the year to date results are a little bit below what you were doing last year.

But nonetheless, it does seem like there’s been a pretty good recovery since, call it, October. Can you maybe just talk about what’s caused that? I know it’s always hard to sort of dissect the impact of supply, but we have a lot of audience questions coming in about supply and the impact. And so maybe help us understand what’s happened over the last couple of months in terms of the recovery, what’s causing it and whether you see it continuing.

Dallas Tanner, CEO, Invitation Homes: Just let me offer a couple of thoughts, and I ask Charles to get really deep on the color real time. It’s important for The Street to understand that we view we’re getting a return to normalcy in terms of how we’ve typically seen SFR rents behave pre pandemic, which is very cyclical. So our renewals will tend to tend to be really strong from a rate perspective in the back half of the year into the early part of spring. And then as people make decisions around moving in and out of our portfolio, typically between March and August, that’s when typically we have the greatest pricing power on the new lease side. I’ll hand it to Charles who can talk to you real time about the differences between this year and last.

Charles Young, President, Invitation Homes: Yes. Look, the book is set up well as we worked hard in Q4. We showed you said we kind of bottomed out at high 97 occupancy. We’ve been building from there into the low 97% s, which is great. We’ve been accelerating on the new lease side since November.

And renewals, as Dallas just mentioned, really strong. Look, midyear last year, we saw that we were having some supply and having to compete on price a bit more in three of our bigger markets, Central Florida, Texas, Phoenix. And when we flagged that, we were ahead of others in terms of that coming. And I think others have kind of confirmed that there were some those markets, some build to rent was being delivered and people started competing on price and that put some pressure on that newly side. And those are big markets for us, so they had an impact.

This year, we wanted to, with our guidance, a bit more measured. We’ve set up the book really well. We’re going into peak leasing season in strong occupancy with acceleration on the blended rent side. And new lease side, in terms of February, we’ve turned positive and we’re accelerating here into March, which is good and healthy.

Nick Joseph, Citi: I think the question

Charles Young, President, Invitation Homes: is the absorption in these markets that we’re talking about, we’ll have to see how it goes. We’re seeing some signs in Phoenix that things are starting to stabilize a little bit. Tampa, coming off of the hurricanes, there’s some homes offline that gives a little bit more demand. So I think we might be able to absorb a little quicker. Texas, a little slower right now.

So that one may be a little slower for us. But those are the markets that we signal where there are supply challenges or absorption challenges. Reality is other markets are running normal on a seasonal curve. It’s not the COVID kind of top line keep going. We’re back to kind of ’nineteen, ’eighteen levels where there’s seasonality in the business where we occupancy kind of tops out here in Q1, will come down Q2, Q3 with turnover spiking as our families are looking for homes for their schools and resettling.

And new lease will accelerate here to maybe May or June and then kind of hold and then towards the end of the year come down. That’s the normal seasonal curve on the new lease side. Renewals, Dallas said it. Q4, Q1 a little higher. Summer slightly down, not as volatile as new lease, slightly down.

So expect that will happen a little bit. But we’re right in line. We like how we’re set up. What you saw in our guide is we’ve been running at north of 97 occupancy. For this year, we’re looking at 96.5%.

A lot of that is our turn times will remain strong. We’re doing great there. Turnover will remain strong. It’s really knowing that we want to optimize for rate growth as much as possible. We may need to stay on market a little longer to capture that rate.

And so we’re going to get as much rate as possible and make sure that we kind of solve for the occupancy on the back end.

Eric Wolf, Citi Research: Can I just ask on that last point? You might have to market for a little bit longer to get the rate that you want. I guess that hasn’t been the case thus far this year, though, right? Or has it been?

Charles Young, President, Invitation Homes: It has. I mean, what we’ve set up is it’s a matter of kind of going back to normal. This is during COVID, things were just moving so fast. And we’re not talking material days, but it could be instead of, you know, twenty days, it could be thirty days. And it varies by market.

So in those markets that we’re competing, it may take a little bit longer. So we’ve kind of baked that into let’s just go back to what that normal kind of supplydemand metrics. Good news is demand is here. I think what you’re seeing happening early in the year is that when you compare this demand January, February early this year compared to pre COVID, we’re up. It’s good demand metrics.

And so given our occupancy, given where we are, some of our markets are normal, we’re seeing a nice acceleration at the start of the year. We’ll see how long that sustains.

Eric Wolf, Citi Research: Got it. And we have an audience question. I think it’s effectively you’re saying you’re returning to normal, normal seasonality, kind of a more normal type of rent growth. What is normal rent growth? And how should we think about revenue growth over the medium term?

You have the occupancy impact this year, but how should we think about a more normalized level of same store revenue growth?

John Olsen, Chief Financial Officer, Invitation Homes: Sure. I think we think that this business should see renewal rent growth depending on the market, depending on the time of year between 35%. New lease growth, as Charles noted, is going to have a higher degree of variability. I think if you set aside the sort of reset in occupancy and our guide contemplating more openness to stay on the market a little bit longer to go capture rate, I think really the our revenue growth guide is reflective of a reasonable decline year over year in average occupancy. I think absent that fundamental shift in average occupancy year over year, You would expect to see revenue growth that is certainly north of where we’ve guided to.

But as Dallas and Charles have both said, we are trying to take a measured outlook. There is a fair amount of supply in certain of our markets. We feel really good about sort of the reacceleration we’ve seen thus far. We feel good about the demand we are seeing. To be clear, demand is down from what it was during the COVID period.

But relative to 2019, sort of the last pre COVID unaffected year, we are seeing demand is higher today, which we think is a testament to us being in the right markets. I’m not going to really get into what expectations ought to be for revenue growth beyond 2025. We’re focused on this year. There’s a lot of this year left. We’ll talk about the years to come at the appropriate time.

Eric Wolf, Citi Research: I guess if you’re underwriting a portfolio today, what kind of rent growth do you normally assume for the next couple of years?

Dallas Tanner, CEO, Invitation Homes: Well, I think for a base case, like if we’re looking it’s a great question. It depends on the market, to be fair. So if it’s a portfolio if we were in Phoenix, we’d probably write a little less sort of new lease growth. We’d be pretty bullish on our renewals because that’s sort of what we’re seeing in the business. I think a good rule of thumb is that you’re going to have somewhere between 3.54.5% rent growth, right?

Normalized expense assumptions, and you can calculate your NOI from there. I think that’s another point that John sort of scratched at. But we’ve come off of a couple of years of insane property tax growth, which has really been a proxy for home price appreciation and all the value we’ve seen created in our portfolio. It’s nice to see that we’re guiding much closer to what we view as sort of normal, considering tax makes up about 50% of our expenses. So to be with a target of between 56%, it’s not it’s probably still a little bit high.

But we would think that we have pretty good expense tailwinds in the business for this year and hopefully for the years beyond that as well.

Eric Wolf, Citi Research: I guess, when at what point in the year do you know sort of the majority of assessments? I know you’re weighed on sort of the millage rates. Sort of like when do you have a good sense of sort of where assessments have come out relative to your expectations?

Nick Joseph, Citi: Yes.

John Olsen, Chief Financial Officer, Invitation Homes: I mean, it obviously varies by jurisdiction. I think the challenging element of our particular portfolio is that California, Georgia and Florida make up about 70% of our total property tax expense. California is generally very knowable because of Prop 13, which caps the rate at which property taxes can increase. Georgia and Florida, typically, we won’t get our final bills, so assessed value and millage rates, until late in the third quarter, early in the fourth quarter. And so that is fundamentally the challenge.

In Florida, I believe we start getting values over the course of the summer, but we don’t actually get bills until a little bit later. So that has been the sort of sticky wicket for us is for a very sizable chunk of your largest expense component, we don’t know the final answer until pretty late in the year. I think the good news is, as Dallas alluded to, we do feel as though the rate of increase in property tax expenses is moderating to a degree. I think it’s really important to remember that you know, John Q. Homeowner is experiencing the same property tax increases that we are, and and they vote in local elections.

And and their voices, their voices, I I hope, are being heard, because it’s been a painful experience. And I think it’s a not insignificant part of the affordability challenge in U. S. Housing and the reason why, on average, it is $1,100 a month cheaper to lease an Invitation Homes property than it would be to own a similar property oneself.

Eric Wolf, Citi Research: Maybe to that last point about the huge gap between renting and owning. I think, Dallas, when we were talking yesterday, you mentioned you wouldn’t mind seeing interest rates come down a little bit, a little bit more home price appreciation, more movement in the housing market. Can you just explain why that is? Because obviously, the way some investors look at it is that this huge gap between renting and owning is what’s keeping 80% of your tenants in place, allowing you to push through 5.5% renewal increases. And so if interest rates come down and becomes a little bit more affordable, maybe you lose that.

So maybe just talk about the interplay between that and why you might actually be comfortable with seeing interest rates decline and that gap closing a bit.

Dallas Tanner, CEO, Invitation Homes: Yeah. Great question. So from 2012 to 2022, we built the business in a very low interest rate environment, right? So we’re used to dealing with low interest rates as an operator. That doesn’t seem to sort of move our needle one way or the other.

I mean, somewhere between 1627% of our move outs every year are because of a decision to go purchase a home. Right now, that number is sort of in the high teens in terms of our surveys on people on the way out. I think for a healthy housing market, which I would argue that we’re not seeing the transaction volume right now, but you’re in a pretty healthy housing market. You have 68 plus or minus homeownership, it feels like, based on some of the different data that’s out there. And you have a customer that’s sort of locked in on a pretty good mortgage rate at the time.

So I think we’d be supportive, I guess I should say, of little bit cheaper mortgage rates because it would create good transaction volume, which we view as net positive for the whole housing ecosystem overall. Second, I think the more we have transaction volume, the more you naturally get appreciation in your own property prices. And for us, you know, home price appreciation has generally been a pretty good proxy for where rents are going. You think about what happens with homeowners insurance and property tax rates and all these things. As as rates go up sorry.

As values go up into the right, that has an impact on what it costs to rent in those neighborhoods as well. And so, for us, we’re we’re uniquely positioned. It’d be very hard to recreate the portfolio that we have today in terms of markets, footprints, bulk, scattered portfolios, BTR, you know, pick any sort of piece of our portfolio, and we’re we’re sort of properly hedged. We’ve got a really good view of what sort of the customer wants by being infill and having these locations. As values go up, we’re sort of insulated on that to a degree.

We can sell homes at lower cap rates and reinvest in new development either on balance sheet or off. And certainly, if we saw a little bit more transaction volume, it would just lend itself to probably cheaper commercial borrowing rates as well. And we could be more active in some of our own growth that we want to pursue.

Eric Wolf, Citi Research: Got it. And then one other question I get asked all the time is really just on the impact of supply. I think it’s really hard to sort of measure it. But if you kind of think about the pitch, the story that the Sunbelt multifamily guys have, it’s that things are a little bit weaker today, but look where supply is going next year. Things are going to dramatically accelerate because it’s quite easy to measure supply.

I mean, as you guys think about supply, is there any way to think through what 2026 supply would look like if you’re thinking about the combination of multifamily impact, BTR impact, just any way to sort of gauge how supply might change over time?

Dallas Tanner, CEO, Invitation Homes: I think for us and for SFR specifically, it’s not as black and white as it is for multifamily. It’s sort of easy to track multifamily permits and have a sense of which markets and why. You could argue that BTR permitting, while it’s getting better at being tracked, could also compete with multifamily to some degree. From our vantage point and from the data that we’ve shared in the past, we shared it at the conference last June, you know, we expect BTR deliveries to sort of be down 50% to 65% this year in terms of where they are. Now starts are slightly up, but there’s obviously production time to some of this.

So if you really take a step back, you know, what’s happened? In 2019, ’20 ’20 ’1, as BTR was starting developing its own narrative, you had cheap access to capital and a lot of opportunity. Right? And companies like us were putting up pretty amazing metrics in terms of rent growth and occupancy. And so I think you had a lot of acquisition or beginnings of development to happen in BTR in ’twenty and ’twenty one.

You you started getting to ’twenty two, ’twenty three. That that number tended to sort of slow down when you look at starts. And so we knew that this was sort of coming late spring last year. We had a chart that we used from John Burns that sort of showed his view on deliveries in a few of our key markets. And I think they do as good a job as anyone at tracking sort of BTR deliveries.

The one nuance with SFR, which I think you’re all aware of, is we it’s really hard to handicap our people moving in and out of the for sale housing environment into the, you know, releasing environment. Somebody making a decision not to sell their home, list it with a property management company so they rent. It happens all the time. It’s happened for decades. I I think what we pay attention to, though, with Zillow data and and other MLS supportive data is, like, where are homes for lease in terms of overall listing?

And look, in the markets that Charles talked about, we see that up a little bit, you know, call it in the low signals to maybe 10% in terms of listing volume. That doesn’t mean it’s the product type that you may want to lease per se. Right? So we differentiate ourselves through a number of ways beyond just location. It can be services.

It can be finished standards. It could be smart technology. You need bundled Internet. You name it. I think for us, we have a view that this year moderates and is a little easier to manage going into summer, but we have to prove that out.

And that’s why we’ve taken, basically, a measured approach to the year as we talk about new lease. I think we have a lot of conviction around renewals, and it feels like the customer’s really sticky, happy. And every metric that we sort of track based on surveys, maintenance techs going in and out of homes, we’re not seeing anything different there. So we have conviction that the customer is gonna sort of behave like we think they would in terms of preference of choice. I think new lease, there’s, you know, there’s still a little bit of BTR out there.

Let’s see how much we’re competing with the multifamily story that’s in that market. I don’t think we cross those crossover necessarily a ton, but I’m sure there’s a little bit. And I think we’ll have a better view by summer of of how things are going to shape up for the back half of the year. And if we we continue to see that acceleration, I would say there’s nothing that we can see in the foreseeable future that would suggest, you know, we have big shadow supply coming into SFR. I think if anything, if you listen to the narrative around builders, what they’re talking about in terms of production, what we’re seeing in spec inventory, My instincts are that that some of that market could slow a little, which will actually put additional pressure on demand.

I think I think we’ll have plenty of healthy demand.

Eric Wolf, Citi Research: And you said before that HPA home price appreciation is kind of a good leading indicator for for rent growth. I was just curious, if you look at home price appreciation from, say, 2020, right around COVID, to today, I guess, how much more has that been than the rent growth in your markets? Or maybe it’s been less, but I would assume HPA has been more. Just curious if there’s a gap that needs to be sort of made up.

Dallas Tanner, CEO, Invitation Homes: I have to come back to you on that question because I have to look at it by market by market. But we had years, I think it was like October of ’twenty two, where we were peaking on blended rate. Full disclaimer, this number could be wrong, but it’s pretty close. It was either 14% or 16, I want to say, on blend. That was sort of where we peaked.

And I bet if you had a look back basis, home prices rubbed 10% to 20% probably. So it’s probably a fairly good proxy. I wouldn’t say it’s an exact science, and it varies by market.

Eric Wolf, Citi Research: Got it. And then in thinking about the impact of weather events, whether it’s hurricanes, wildfires, can you maybe just talk about sort of how you’re trying to structure your insurance? You had some payments, I think, associated with Hurricane Milton in the third and fourth quarter. So could you just talk about how you’re structuring your insurance and whether any of these sort of devastating sort of events that have happened, more impactful weather events that have happened, have made you rethink how you’re going to do that going forward?

John Olsen, Chief Financial Officer, Invitation Homes: Yes. I would say that we haven’t made any material changes or really materially changed the way we think about the structure of our insurance program. We have a master all risk policy. I think we benefit from a few things. One, the geographic dispersion of our assets.

Two, the fact that we’re not coastal. We’re not in these heavily wooded canyons of Southern California, the fact that we can asset manage on a house by house basis and basically identify individual assets that represent outsized risk relative to the portfolio overall and we can just prune those assets out of the portfolio over time. So for example, let’s say we bought 123 Main Street at the time that we underwrote that acquisition, the home was not mapped to a special flood hazard zone. Flood maps do get redrawn from time to time. And if today the the, the maps are redrawn so that 123 Main Street is now in an SFHA, Well, that can automatically trigger a flag and does on an asset management dashboard for Scott’s team.

And when the in place resident moves out, that home will go through an asset review and we will, you know, sort of identify whether that is a home that we want to continue to own or whether that’s a home we want to divest and recycle the capital into another asset in a location with a better sort of risk adjusted total return profile. We’ve done a fair bit of that. If you look at our disposition activity last year, call it 70% of the homes we sold were in places like Southern California, Florida, Houston. You know, some of that was due to regular way asset management decision making. Some of that was due to you know, a recognition that places like LA County, you know, represent outsized sort of political and regulatory risk, and we want to lighten the footprint there.

Some of that is down to the fact that those markets have, you know, kind of a higher risk of catastrophic loss, whether it be, named windstorm or potentially earthquake. So I think, you know, you have to think about our approach to insurance in totality. It has certainly served us in good stead up until now. We have a very favorable loss history, And we’re going to keep doing what we’re doing, which is thinking about our portfolio from a risk adjusted total return perspective, because I think that is how you sort of ultimately make the right decision for your shareholders.

Eric Wolf, Citi Research: By the

Dallas Tanner, CEO, Invitation Homes: way, Eric, it was 17% in July of ’twenty two, new lease. I got the number. I got the month wrong. That’s pretty close.

Nick Joseph, Citi: Rapid Fire? Rapid Fire. Same store NOI growth for the single family rental sector overall next year in 2026?

Dallas Tanner, CEO, Invitation Homes: I think there are two guides, and they were sort of between two and three ish some odd percent, so I’d say in that ZIP code.

Nick Joseph, Citi: In that ZIP code. And then same thing, more fewer, the same number of public single family rental companies a year from now?

Dallas Tanner, CEO, Invitation Homes: I’m about the same.

Nick Joseph, Citi: Great. Thank you very much.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.