Greetings, and welcome to the American Homes 4 Rent Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Nicholas Fromm. Thank you. You may begin.

Good morning. Thank you for joining us for our fourth quarter 2021 earnings conference call. With me today are David Singelyn, Chief Executive Officer; Bryan Smith, Chief Operating Officer; Jack Corrigan, Chief Investment Officer; and Chris Lau, Chief Financial Officer. Please be advised that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC. All forward-looking statements speak only as of today February 25, 2022. We assume no obligation to update or revise any forward-looking statements whether as a result of new information future events or otherwise except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings press release and supplemental information package. As a note, our operating and financial results including GAAP and non-GAAP measures are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at www.americanhomes4rent.com. With that, I will turn the call over to our CEO, David Singelyn.

Thank you, Nick. Good morning, and thank you for joining us today. During 2021, we again delivered consistent outsized earnings growth, resulting in a record year headlined by sector-leading core FFO growth of 17.4% per share. At the onset of the pandemic, it was hard to imagine how dramatic the world would change. The hybrid work model is likely here to stay and millions of people no longer need to live close to the office and now have the ability to relocate to more desirable locations. Our diversified footprint is positioned in high quality of life markets, where long-term demographic shifts and changing preferences have been taking place. Simply put, the AMH portfolio is located where Americans want to live. Considering this and our country's housing shortage, the fundamental backdrop for our portfolio could not have been better. Before we dive into our 2021 results and outlook for 2022, I want to take a moment to point out that this year marks the 10-year anniversary of the first home purchased by American Homes 4 Rent. During the past 10 years, AMH has demonstrated thought leadership that has changed the SFR industry. With us at the forefront, renting has become more desirable and a home is no longer centered around ownership. Over the last decade, our dedicated team has strategically accumulated a portfolio of more than 57,000 homes in 30 plus markets, building a leading operational platform in pioneering an unrivaled growth engine. When you take a step back, the foundation this company has built is nothing short of remarkable. Upon this foundation, the real work now begins. Our focus is on what the next 10 years will look like as we reinforce our position as the market leader in delivering consistent and outsized earnings growth. Strategically, we are focused on three areas that build upon our existing foundation. The first area is technology. As most of you know, we pioneered some of the earliest technology improvements in the single-family rental industry. Solutions such as our proprietary inspection and maintenance apps have allowed us to scale an industry that many thought was unscalable. As we look forward, we will continue to optimize our operational infrastructure by investing in next-generation systems. Second, we remain committed to growth, specifically our internal development program. Our self-developed homes offer the best risk-adjusted returns across the SFR sector and will transform our portfolio over time by improving the quality of our asset base. Additionally, as the 45th largest homebuilder in the country, our internal development program now plays an important role in addressing the nation's housing shortage by contributing new high-quality housing stock. Our last focus area is ESG. This year, we were honored to be named one of America's most responsible companies by Newsweek, and the top ESG performer in the real estate sector by Sustainalytics. Our organization is continually focused on improving how we deliver sustained value to our residents, shareholders, and employees. Another example is that we were recently named a 2022 Great Places to Work Company. This meaningful recognition represents our people-first culture and is instrumental in recruiting and retaining our valued employees. In closing, this is an exciting time at American Homes 4 Rent. As we expect our strong performance to continue in 2022 and beyond, we recently announced an 80% increase in our dividend rate and expect another year of double-digit core FFO growth per share. Through the combined efforts from our technology investments, growth initiatives, and ESG focus, this strong momentum should continue and further strengthen our position as the differentiated market leader in delivering consistent and outsized earnings growth. Now, I'll turn the call over to Bryan Smith for more details on our operations.

Thank you, Dave. 2021 was an excellent year for American Homes 4 Rent. Occupancy gains and record rate growth drove Same-Home core revenue growth of 7.3% and core NOI growth of 8.7% for the year, which was above the high end of our most recent guidance. Demand remained high, and solid execution drove strong leasing results across our entire portfolio. For the year, distinct shoppers per rent-ready homes were up over 60%. Cash-to-cash turn-times improved by 10 days, and new lease rate growth was 13%, up nearly 800 basis points from 2020. Fundamentally, the American Homes 4 Rent diversified portfolio is well-positioned to continue delivering consistent outsized earnings growth. And our vertically integrated platform provides the foundation to create even more value over the coming years. Turning to the fourth quarter, we delivered a strong close to the year. Same-Home core NOI growth was 9.8% driven by solid Same-Home core revenue growth of 8.9%. On the expense side, Same-Home core operating expenses were up 7.4% during the quarter, despite elevated costs from COVID-related move-outs and general inflation. Our full year 2021 Same-Home core operating expense growth came in as expected at 4.7%. Chris will lay out formal guidance shortly. But before that, I want to share operational updates for January and provide commentary on several drivers underlying our full year outlook. As expected, average occupancy for the Same-Home portfolio came in at 97.5% during January and new renewal and blended rate growth was 12.4%, 6.9% and 8.3% respectively. On a full year basis, we expect our 2022 Same-Home core revenue growth to accelerate by nearly 100 basis points to 8.25% at the midpoint. Underlying expected growth next year is Same-Home average occupancy in the low 97% range and blended rate growth in the high 7% area. For Same-Home core operating expenses, we expect 5.75% growth at the midpoint. Growth drivers include higher property taxes, inflation, and modestly elevated COVID-related move-outs. Finally, please note that because of timing with prior year comps, Same-Home expense growth will not be linear, and we expect to see a higher percentage increase during the first half of the year. Looking forward to 2023, one of our key areas of focus is on modernizing the resident experience through the expanded use of technology. Innovation has always been at the center of our strategy. And our next generation services platform will drive additional efficiencies. This system will improve the logistics, scheduling and communication functions of our maintenance platform. More importantly, it will provide our residents with a 360 degree view of their account and give them access to multi-channel real-time communications. As an example, for a resident to connect with our maintenance diagnostics team or any of the 4,000-plus service providers across our internal and external networks, it will be as simple as using your favorite ridesharing app. We look forward to updating you on these innovations as we continue their development throughout 2022 and start to see the related benefits in 2023 and beyond. Overall, I'm proud of what we've been able to accomplish at American Homes 4 Rent. I would like to thank our team for continuing to do a great job, delivering consistent outsized earnings growth. I can't wait to see what the next 10 years will bring. Now I will turn the call over to Jack.

Thank you, Bryan and good morning, everyone. Consistent growth remains a strategic priority for us. And I am happy to report that 2021 was another strong year for American Homes 4 Rent. We added approximately 4,600 homes to our wholly owned and joint venture portfolios during the year, which was made possible by our three-pronged growth program and diversified footprint that enables us to capture a wider net than other single-family rental platforms. Including homes under construction and land purchases, we deployed an impressive $2 billion of total capital in 2021. As we've discussed many times before, one of the major benefits of our three-pronged approach to growth is that we have the ability to nimbly adjust our channels due to changes in the housing market. As an example, we finished the year with robust activity through our traditional acquisition channel. While competition is elevated, our platform gives us the ability to integrate homes onto our platform and capture efficiencies that many cannot, driving incremental value for shareholders, even at today's prices. On the other hand, due to elevated prices and other market dynamics, we have scaled back commitment to the national builder pipeline. During 2021, we acquired 2,553 homes between our traditional and national builder channels for approximately $900 million. And we are targeting a similar capital investment through these acquisition channels in 2022. From a timing perspective, we expect our acquisition activity to be generally balanced throughout the year. Also, please keep in mind that average renovation times commonly run 90 days or longer on our platforms acquiring homes at these elevated volumes may be subject to additional supply chain delays. Now turning to our one-of-a-kind internal AMH Development Program. Despite broad market challenges surrounding labor and supply chains, the team did a tremendous job meeting the expectations outlined at the start of the year and delivered 2,054 homes. While our commitment to scale this program remains unchanged, our deliveries in 2022 are likely to be impacted by inspection, supply chain and labor delays. However, despite these broad market challenges, we expect to grow our annual deliveries by approximately 10% at the midpoint in 2022, delivering 2,100 to 2,400 homes. More importantly, future growth in our AMH Development Program will be made possible by continued investment in our high-quality land pipeline, consisting of Class A locations within our existing footprint. On that front, I'm happy to report that we successfully increased our land pipeline to approximately 18,000 lots owned or controlled via option or escrow contracts at the end of 2021. In summary, we remain in a great position to capitalize on growth opportunities. American Homes 4 Rent has the unique ability to create consistent shareholder value in both open market acquisitions and through our one-of-a-kind development program. Our team executed at a high level in 2021 and we will keep our foot on the gas moving forward. Now I will turn the call over to Chris.

Thanks, Jack and good morning, everyone. I'll cover three areas in my comments today. First a quick review of our year-end results. Second, an update on our balance sheet and recent capital markets activity. And third, I'll close with an overview of our 2022 guidance. Starting off with our operating results, we delivered another quarter of consistent and outsized earnings growth with net income attributable to common shareholders of $48.1 million or $0.14 per diluted share. On an FFO share and unit basis, we generated $0.37 of core FFO representing 20.4% year-over-year growth and $0.34 of adjusted FFO representing 20.9% year-over-year growth. And for full year 2021, we generated net income attributable to common shareholders of $135.3 million or $0.41 per diluted share and $1.36 of core FFO per share in unit, which was in line with our expectations, representing industry-leading earnings growth of 17.4%. Next, I'd like to turn to our balance sheet and share a few updates around our recent capital markets activity as we continue to fuel our robust external growth programs. During the quarter, we settled the remaining 1.8 million common equity forward shares from our May 2021 offering for net proceeds of approximately $65 million. And we also issued approximately 1.7 million shares under our ATM Program raising over $70 million of net proceeds. At the end of the year, our net debt including preferred shares to adjusted EBITDA was 6.2 times, which is roughly in line with our targeted leverage level. We had $48 million of cash on the balance sheet and $1.25 billion revolving credit facility had a $350 million drawn balance. Subsequent to year-end and as we prepare to fund another year of outsized external growth, we raised $864 million of net proceeds in an oversubscribed common equity offering. Of the total net proceeds, $376 million was received during the first quarter with the remaining $488 million being issued on a forward basis to minimize dilution as we match fund against capital deployment throughout the remainder of 2022. Next, I’d like to share an overview of our initial 2022 guidance, which reflects our expectation for another year of consistent and outsized earnings growth. For full year 2022, we expect core FFO per share and unit of $1.53 to $1.59, which at the midpoint represents year-over-year growth of 14.7%. Our expectations contemplate the following assumptions. For Same-Home pool, which will include between 48,000 and 49,000 properties at the midpoint of our ranges, we expect core revenue growth of 8.25%, which reflects the strong occupancy and rate growth environment that Bryan discussed a few minutes ago, along with our expectation that the bad debt continues its gradual return to normal over the course of 2022. On the expense side, we expect Same-Home core property operating expense growth of 5.75% driven by property tax growth in the 5% area, which reflects our expectation for higher valuation increases compared to 2021, and a 6% to 7% combined increase on all other expense line items, which reflects Bryan's earlier commentary surrounding the current inflationary environment and modestly elevated COVID-related move-outs. Into the bottom line, we expect 2022 Same-Home core NOI growth of 9.5%. It reflects an acceleration of our 2021 growth rate, as well as continued core NOI margin expansion. From an investment standpoint, we expect to deploy $1.7 billion to $2.2 billion of total capital into our combined growth programs this year, adding over 4,400 homes for our wholly owned and joint venture portfolios. Specifically for our wholly owned portfolio, at the midpoint of our ranges, we expect to invest approximately $1.8 billion of AMH Capital, consisting of $1.35 billion or 3,600 homes added through our acquisition and development channels, along with $350 million of continued investment activity into our wholly owned development pipeline and $100 million of pro rata investment into our JVs and property enhancing CapEx programs. In addition to our external growth programs, we expect to redeem $270 million of preferred shares that become callable during the second and third quarters. This brings our total 2022 AMH Capital means to approximately $2.1 billion, which we expect to fund through a combination of retained cash flow, approximately $100 million of recycled capital from dispositions, $864 million of attractive equity capital already raised earlier this year, and leverage capacity from our balance sheet. And that brings us to the end of our prepared remarks. But before we open the call to your questions, I'd like to reiterate that 2021 was undoubtedly a record-breaking year. More importantly, it represented another year of consistent and outsized earnings growth from the AMH platform. As we look forward to 2022, we expect the consistent AMH outperformance to continue with another year of double-digit core FFO growth, accelerating core NOI growth from our Same-Home portfolio, continued expansion in AMH development deliveries, and an 80% increase in our distribution. And with that, thank you for your time and we'll open the call to your questions.

Thank you. At this time, we will be conducting a question-and-answer session. Our first question is from Nicholas Joseph of Citi. Please proceed with your question.

Thank you. I think you mentioned high 7% blended rent growth embedded in guidance. How does that break down between your assumptions around new and renewal lease rate growth, and then maybe in the first half of the year versus the second half of the year?

Hi, Nick. Good morning. It's Bryan. Yeah. Good question. We saw that the increases that we got in January were consistent with Q4. We're feeling really good about the demand backdrop, the metrics that I spoke about in the prepared remarks continued to hold very strong. So, we're seeing excellent demand that gives us confidence that we're going to continue to be able to push new lease rate growth. The breakout for the year, think about it in the high 9% for re-leasing growth. And then on the renewal side, somewhere in the sevens. If you look back at the history, we had continued improvement in renewal rates over the past six quarters. A couple of that's really good turnover rates, reduction there of nearly 10 percentage points over the past four years. So everything is lending up very nicely to continue this really nice momentum that we have on the rate side.

Thank you. And then just, I guess a follow-up, maybe just on the regulatory environment overall. It seems like there is increased scrutiny on single-family rentals broadly. So is there anything you're doing differently or that we should be mindful of, just given the overall environment?

Yes, Nick, this is Dave. I want to begin by emphasizing that our mission is to provide safe, quality housing in desirable school districts, and we focus on offering that housing in areas where people want to live. As we've noted before, we are part of an industry experiencing significant growth in housing. As you pointed out, we're attracting increased regulatory attention in this sector. Additionally, we've discussed in previous federal hearings, both in the Senate and the House, how we've been highlighted as a model single-family rental company that adheres to best practices. While I can't comment on other companies specifically, I can say that we are not facing any regulatory issues that differ from others in the industry.

Our next question is from Joshua Dennerlein of Bank of America. Please proceed with your question.

Yeah. Hey, everyone. Hope everyone is doing well. Kind of wanted to touch base on that modernizing of the user experience. What kind of benefits should we expect to kind of see over the long term? Would it be better expense control from you guys or maybe higher revenue growth or just a combination of both?

Yeah. Thanks, Josh. It's a very good question. The modernizing of the resident experience has benefits really across our entire business. We're very focused on that experience contributing to extend today's improvements on retention. Our ability to continue to push renewal rates because of a very strong value proposition that people are realizing. So from the residents perspective, it's going to change the way that they communicate with us. By modernizing I'm talking about, putting a premium on mobile having all the information really available at their fingertips. What's the status of my maintenance request, what's the status of the technician, when are they going to arrive? So more things that you'd see with a lot of the other minor companies. And then the other thing that we're doing too from the resident perspective is we're working backwards from all the data and information that we have on the customer service side. What are they calling in and asking about and how can we provide that information to them, kind of ready, real-time, so they don't have to make a phone call or they need to do is open up their app to see exactly where that particular issue stands? From our perspective, the efficiencies that we'll gain outside of better retention and better customer service to the resident. There'll be improvements in our inventory management system, our scheduling system, the way that we communicate with our vendors, the way that we communicate with our residents. We're adding some pretty robust video diagnostics tools to the maintenance request side, which allows our internal teams to properly diagnose maintenance issues as an example, hence a single track with the right equipment out to remediate that particular issue. So there are a lot of benefits. What we're really excited about is this platform will be able to build on it in perpetuity. It gives us great flexibility. But again benefits to both the revenue side and to the cost control side as well.

Thanks for that color. Kind of on a related topic, I guess how should we think about potential margin improvements in the years ahead? We've had some impressive margin growth in the past.

Sure. Good morning, Josh. It's Chris here. I think our view on margin potential, quite frankly remains exactly the same. We see nice potential with an extended runway on it. We've been capturing a portion of that in '21. And as I mentioned in my prepared remarks, we're expecting to see more of that captured in '22 as well, as we're really thinking about the drivers of it. Candidly, a lot of it is coming from the top line, we see a lot of opportunity from an outsized rate growth perspective for an extended runway, think of everything that's Bryan is talking about from a strength of demand standpoint. That will contribute nicely. We see nice potential from ongoing fee and ancillary income programs for 2022 that would be contributing called about 20 basis points or so to same-store revenues. For this year in particular, as I mentioned in my prepared remarks, we're expecting to see a gradual return to normal on bad debt that will contribute back into margins as well. And then longer term, the investments that we're making now from a technology standpoint. Everything Bryan just walked through will help us to become more and more efficient on the expense side especially as the portfolio continues to grow and leverage those costs over a larger asset base also contributing to margins.

Thank you.

Thanks, Josh.

Our next question is from Richard Hill of Morgan Stanley. Please proceed with your question.

Good morning, everyone. This is Adam Kramer speaking for Rich. Congratulations on a strong quarter and impressive guidance relative to Morgan Stanley's estimates. I would like more details on the 12.2% growth in new lease rates this quarter compared to 59% in Q3, especially in light of what you disclosed for January. Can you provide insights on how much further you can drive new lease rate growth, considering the current occupancy levels? More information on this would be greatly appreciated.

Yeah. Thanks, Adam. This is Bryan. We're looking just going to step back for a second. And just remind you that of our revenue optimization strategy. We're looking at all the different components. New lease rate growth is one of them. Occupancy obviously is another. And when we go into the fourth quarter, we saw a little bit of seasonality that we have traditionally. The difference now is all of the seasons are good, but there is a difference that we saw coming in the fourth quarter, a little bit of a slowdown of 15.9%. The other thing to consider too is, look at the fantastic rate growth that we had in 2021, 13% new lease growth for the year. And then think forward to this, so this year and we're in a position now where because of the fantastic growth last year, we're not assuming that we're going to have 15% over 15%. What we're talking about now is still really strong growth that's made possible by this fantastic demand backdrop that we spoke of. But I don't see 12% as being anything other than positive.

And Adam, this is Chris. If I could just punctuate one point that Bryan made, which is a really good one in terms of the holistic approach that we take to revenue optimization. But the discussion around rate growth is a good one and very important, but that's only one variable. And we manage all the variables to what translates into the best outcome overall for the revenue line. And I would just remind you and everyone of what I and all those mentioned in our prepared remarks. When you look at holistically, the decisions we're making to the top line, we are expecting to accelerate revenue growth by nearly 100 basis points off of what was already a really, really strong year in 2021.

That's really helpful. Thank you, guys for the color. And maybe just kind of similar question, we're kind of shifting to renewals. Are you able to give any further disclosure on whether it's February renewals or kind of the renewals we're sending out for March or April?

Yeah. In our prepared remarks, I talked about the January results. February is not done yet. But again, what I was talking about before you’ve seen six quarters of consecutive renewal rate growth of renewal rate growth acceleration. And we expect that to continue through the first quarter and even in the second quarter of '22.

Got it. Congrats again on the great results, guys. Thank you.

Thanks, Adam.

Our next question is from Brian Spahn at Evercore ISI. Please proceed with your question.

Hey. Thank you. Chris, you talked about capital allocation a bit and recent equity raise as well as the forward component. But could you talk a bit about the debt market and any appetite there to issue debt near term to keep that leverage ratio where it is now around that 6.2 that you've talked about?

Yeah. Good morning. Great question. Appreciate that. The simple answer is, yes. There is definitely debt needs as we think about capital plan for full year 2022. And just to walk through the components, just so everyone has all of them, you're exactly right for capital plan of a total of $2.1 billion for this year. The equity component has been raised that was at $864 million from the first quarter, a little over half of which was placed on a forward. So we can be very efficient with those proceeds and draw them down over the course of the year, matching that funding against the deployment into our investment programs. And then the balance of this year will come from a combination of retained cash flow, somewhere in the $250 million to $300 million range and that's even after our 80% increase to the distribution this year. You can find this on the balance sheet. We're coming into the year with about $50 million of cash on the balance sheet for this year will probably recycle about another $100 million of proceeds from our disposition program that will be reinvested. And then the balance of this year will come from leverage capacity off of the balance sheet, which would be in the $800 million area or so. No different than in the past couple of years, we'll look to fund into the unsecured bond market over the course of the year.

Got it. And you've got a couple of preferred that are callable this year. Could you maybe talk about your plans there and this guidance currently assume any redemption of those?

Yes, it does. Great question. And I mentioned that in my prepared remarks as well. But the components of that $2.1 billion of total capital uses for the year is $1.8 billion of growth, and then just about $300 million actual dollar amounts to $270 million of preferred redemptions where we've got a great opportunity there to refinance those, which become due or callable in April and July. And just as a reminder, coupons on those are five and seven-eighths which create a nice and attractive refinancing opportunity relative to the current cost of capital and that's included in our guidance and capital plan.

Great. Okay. Thanks for the clarity there.

Thanks, Brian.

Our next question is from Haendel St. Juste of Mizuho. Please proceed with your question.

Hey, good morning out there. Chris, appreciate the detail on sources and uses. And how you're thinking about capital this year? I guess I'm curious what's the capacity or equity left in your existing JVs and what's your view on using JVs versus on balance sheet here as you grow the development platform and pursue acquisitions?

The best way to look at this is that our joint ventures still have a significant amount of potential ahead of them. We have two joint ventures focused on properties we've developed internally. Combined, they have just under 50% of their pipelines already deployed or developed, so there’s still plenty of room for growth. It will likely take another year or two for them to be fully deployed. Overall, we have two excellent joint venture partners who have contributed substantial capital, which has allowed us to expand our program further. In the long run, this could lead to interesting economic benefits, especially as we enter periods where we can earn promoted interests. Additionally, given the current volatility in the public markets, having access to reliable, long-term capital through our joint ventures is very reassuring and valuable. Currently, as we’ve discussed in recent quarters, our plan is to utilize our balance sheet to deploy additional capital on a wholly owned basis.

Great. Thank you for that. Quick follow-up I guess on the development side, maybe for Jack. Can you talk more about the cost inflation you're seeing in the development pipeline? I think you mentioned in the last quarter that there is some degradation in development yields down the road. I think is in '23. But curious, if the timing review there has changed at all. Are you still expecting rents to outpace cost near term and any incremental pressure on this yield, and then maybe how much of this year's development costs are locked in at this point? Thanks.

Thank you for your question, Haendel. Regarding inflation, we have observed spikes followed by declines, with lumber serving as a notable example. Lumber prices rose to $1,200 per 1,000 linear board feet, fell to $650 in the third quarter, and are currently back up to $1,200, mainly due to the Canadian trucker event. Experts anticipate that prices will likely decrease back to the $600 range. We can expect fluctuations throughout the year, but we haven't experienced a decline in yields largely because of strong demand for our new product and the increased rent we've achieved compared to previous performance.

Our next question is from Jade Rahmani of KBW. Please proceed with your question.

Yeah. Thank you very much. Could you provide an update on 4Q collections?

Sure. Good morning, Jade. Chris here. I would say that we continue to see overall improvements in our collections. In terms of bad debt, the highest point for us during the pandemic was around the mid-twos percentage. We began to see improvements starting in the third quarter, where it dropped to approximately 1.6%. In the fourth quarter, it decreased further to 1.3%, and we expect this trend to continue into 2022, gradually returning to normal levels throughout the year. Typically, our pre-pandemic bad debt is around 1% or sometimes slightly less of our revenues.

Okay. Thanks very much. Just secondly on land, have you looked at how your land underwriting compares with that of homebuilders? Specifically, are you underwriting land with a developers cost of capital in mind, or are you underwriting to a single-family rental stabilized cap rate? Because that potentially implies significant differences and the value of land to new versus to a developer, which could cause differences in the way real estate assets are valued. So curious if you could provide some color on that land underwriting?

Thank you, Jade, for that question. We consider it from both perspectives. Our primary approach is analyzing the yield of a property. Additionally, we evaluate the implied developer profit if we were building for sale as a way to validate our position. I believe we align closely with the national builders regarding their profit underwriting.

Hey. Jade, this is Dave. Let me add just a couple of things. You bring up that there are differences between us and national homebuilders. And I totally agree with that. And it's in a number of different areas. Our risk profile is very different than a national homebuilder. We don't have the market risk that national homebuilder will have at the time the project is complete. We also have the ability to develop in a different way; we deliver to a cadence that we want to absorb homes. And lastly, the fact that we are building homes for ourselves, and we're not building homes for sale where there is an owner that is going to make selections late in the development timeline or lifecycle allows us a very, very different ability to manage the supply chain. Jack mentioned this. I just want to reiterate, I mean, we started 2022 or 2021 with an expectation of delivering 2,050 homes. We ended up delivering 2,054 homes in a very difficult supply chain environment and that's just a testament to one the team, but also the fact that we do have a different product that we built.

Thank you. And just a last clarification would be in your underwriting since you're paying today's prices for land. Are you underwriting these deals based on in-place rents or are you underwriting some inflation in the rents?

Yeah. We start with today's rents and then we inflate the rents through the first delivery and then we don't inflate after that and we inflate the operating costs as well. So far, we've been doing better on the rate than what we projected even with inflating it and the costs are coming in about where we expected.

Thank you very much.

Thanks, Jade.

Our next question is from John Pawlowski of Green Street. Please proceed with your question.

Thanks very much for your time. About 10 years from acquired homes. Just curious, Bryan, for homes or you have a very long vintage curve on CapEx. How much higher is the CapEx burden as a percentage of rents or percentage of NOI? You pick a metric, but how much higher is the CapEx burden versus that kind of portfolio average on those long-held homes?

Thanks, John. I don't have exact details on that. What I can tell you, rather than the age. What's really important is what level of renovation went into these homes and at what time. So the older homes that were completely renovated might have a different profile than ones that we bought. More recently, they didn't have such a high level of renovation because they were in good shape. I don't have a breakdown obviously age in terms of roofs some other mechanicals plays in effect on the CapEx expense. But we've been continually investing in our homes throughout the entire ownership cycle and have made replacements where necessary. So the average age of those homes even though we've owned for 10 years might be very different.

Okay. Last one from me. Just curious, if you could give us some type of quantification for the knock-on benefits of the build to rent communities on the margins of the stabilized basic stabilized portfolio. So you're in a lot of markets and you're dumping a lot of homes into each market, it's a meaningful expansion of the footprint within like Vegas and Phoenix. So just curious, we're going to knock-on benefit you have on margins for your standard homes would be helpful?

Yeah. Thanks for that question. We have a couple of benefits. One is that obviously, the maintenance costs on a brand new home is going to be lower. Our underwriting in general will range based on where we're building because property taxes is a big factor in determining the margin. But in general, we're running in the mid-'70s for margin on the new build.

John, to connect the questions you asked, when we construct homes, we consider long-term maintenance. You'll notice we use higher quality plumbing fixtures and slightly adjust the construction methods, such as installing hard surface flooring, all aimed at enhancing long-term maintenance. This approach helps improve our margins on new homes significantly, and there are many advantages to it. When you build and manage the home yourself, you create a beneficial feedback loop. I believe we are unique in being able to offer this feedback loop.

Our next question is from Chandni Luthra of Goldman Sachs. Please proceed with your question.

Hi. Good morning, guys. Good afternoon, everyone wherever you are. Thank you for taking my question. So on the 3Q call, you guys talked about looking into the Zillow portfolio, evaluating it. Could you perhaps give us more color in terms of what you found out and where you are? With that, what are your thoughts, not just from a portfolio standpoint, but also from an employee base standpoint?

Yeah. With respect to Zillow, as we indicated on our prior earnings call, we were in discussions with them and we remain in discussions with them today. The number of homes that we've actually or will actually acquire is far less than the number of homes that we had an interest in. And while that process is still going on, we will not get a material number of homes out. Where the real benefit has been is, we've been able to acquire or hire some of their personnel, their field personnel. And that's a big benefit in a tight labor market when we are trying to grow our operations. So we talked about labor a little bit earlier and the need to focus on labor in a tight market and we've been able to hire people, and that's going to allow us to continue to grow both in the renovation process when we acquire through the MLS, as well as in our everyday ongoing maintenance program.

And just to follow up on that. So what sort of changed, I mean was it in terms of valuation or was it in terms of portfolio overlap and kind of the geographic placement of this homes or strategically, they were not fit say from a CapEx standpoint, what changed?

Nothing has really changed. We are in a competitive environment and we made bids at prices that we found reasonable. We believe we are very aggressive considering our opportunities in other areas. Several of those homes went to other bidders who are offering cap rates significantly lower than what we would consider when purchasing homes. This situation does not reflect a change in our strategy. We would love to acquire many of those homes, and our outlook on markets remains the same. It ultimately comes down to the competitive market dynamics and the willingness to accept yields that are lower than our preferred levels.

Our next question is from Sam Choe of Credit Suisse. Please proceed with your question.

Hi, guys. Congrats on the great quarter. Just wanted to start with your non-stabilized properties. I'm just looking at average occupied days of 80% as a year ago and you had 90%. Not saying it is low. But I guess I just wanted to make sure that I'm reading this correctly. Is it because you've been active with the acquisition volumes as less to that decline as opposed to there being any changes in the current time and is there leading up your new property adds?

Thanks, Sam. This is Bryan. As I mentioned earlier, the number of unique shoppers looking at indirect ready homes increased by 60% year-over-year. The demand has been excellent and is continuing to grow. There are a few key points to highlight. We've discussed before how interstate migration, particularly from California and the East Coast into our markets, has impacted demand. The strength and consistency of this trend have not only remained robust but have actually intensified from Q4 last year to this year. When we compare Q4 2021 to Q4 2020, applications from individuals relocating from California have risen by nearly 40%. Additionally, applications from New York and New Jersey have grown by over 33%. A significant point to note overall is that applications from people moving from states that are not AMH into our portfolio increased by over 12% from Q4 to Q4.

Thank you.

Thanks, Nick.

We have reached the end of the question-and-answer session. I will now turn the call back over to management for closing remarks.

Thank you, operator and thank you to all of you for your time today. As I indicated previously, we're really excited about our strong performance in 2021. But we are even more excited about the foundation we have built, and the prospects for strong operational and growth performance in 2022, as well as our future years. Talk again with all of you next quarter. Have a great day.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.