American Homes 4 Rent(AMH)2024-08-02 20:38Financial Data and Key Metrics Changes - The company reported a core FFO per share growth of 8.5% year-over-year, with a new midpoint guidance of 92.1 million, or 0.39, representing a 9.4% year-over-year growth [14] Business Line Data and Key Metrics Changes - Same-Home core revenue growth was 5.5%, driven by renewal increases of 5.2% and blended spreads of 5.3% [9][10] - Same-Home core NOI growth was 5.9% for the quarter, with an updated full-year guidance increase to 4.5% [10][11] - The company maintained a Same-Home average occupied days of 96.6% [9] Market Data and Key Metrics Changes - The company noted strong demand for rental homes due to a national housing shortage and elevated home prices, which continues to drive the single-family rental market [7] - The Midwest markets showed particularly strong performance, with high-quality homes in good locations attracting in-migration [36] Company Strategy and Development Direction - The company is focused on consistent and predictable growth through disciplined capital allocation and operational execution [6][7] - The development program aims to deliver between 2,200 and 2,400 newly developed homes this year, with a controlled land pipeline of over 11,000 lots [11][12] - The company is strategically positioned to capitalize on the growing demand for high-quality single-family rental housing [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of housing fundamentals and the company's ability to meet growing demand [6][7] - The CEO transition is reported to be smooth, with a talented team in place to drive future growth [8] - Management remains cautious about potential impacts from new supply in certain markets but believes their product quality will maintain strong occupancy rates [24][25] Other Important Information - The company successfully issued a 700 million available on the balance sheet [16] Q&A Session Summary Question: July trends and renewal rates - Management reported strong July performance with new lease rate growth of 6.2% and renewals at 5%, with expectations for renewal rates in the high 4% range for the second half of the year [21][22] Question: Impact of new supply in certain regions - Management acknowledged some pressure from new supply in Phoenix but emphasized that their product remains in high demand, with occupancy rates above 97% [24][25] Question: Bad debt expectations - Management expects bad debt to average around 1% for the full year, with strong collection trends observed across the portfolio [27][29] Question: Property tax guidance - Management indicated a positive outlook for property taxes, with a reduction in guidance reflecting favorable assessments in certain states [32][34] Question: Development pipeline concerns - Management expressed confidence in their development strategy, noting that their built-to-rent product is distinct from other new supply and remains in high demand [71][74] Question: Cost of capital considerations - Management discussed the importance of opportunistic capital use, emphasizing that their development program is structured to minimize reliance on equity [78][79] Question: Renewal rate expectations - Management targets a 70% retention rate for renewals, reflecting improvements in their service offerings and market conditions [80][81]