Welcome to the Invitation Homes 4th Quarter 2025 Earnings Conference Call. All participants are in listen-only mode at this time. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Scott McLaughlin, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good morning. Joining me today from Invitation Homes are Dallas Tanner, our President and Chief Executive Officer, Scott Eisen, our Chief Investment Officer, Tim Loebner, our Chief Operating Officer, and John Olson, our Chief Financial Officer. Following our prepared remarks, we'll open the line for questions from our covering sell-side analysts. During today's call, we may reference our fourth quarter 2025 earnings release and supplemental information. We issued this document yesterday afternoon after the market closed, and it is available on the Investor Relations section of our website at www.invh.com. Certain statements we make during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources, and other non-historical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated. We described some of these risks and uncertainties in our 2024 annual report on Form 10-K and other filings we make with the SEC from time to time. Except to the extent otherwise required by law, we do not update forward-looking statements and expressly disclaim any obligation to do so. We may also discuss certain non-GAAP financial measures during the call. You can find additional information regarding these non-GAAP measures. including reconciliations to the most comparable gap measures in yesterday's earnings release.

With that, I now turn the call over to Dallas Tanner. Go ahead, Dallas. Good morning, everyone, and thanks for joining us today. I want to start by thanking our residents for the trust they place in us. That trust is central to our business, and we work every day to earn it through strong service, clear communication, and a better resident experience. This morning, I'd like to spend a few minutes on three areas. First, housing affordability. Second, our recent acquisition of Resi-Built Homes, which gives us in-house development capability. And third, our long-term objectives, as we head further into 2026. Let me begin with housing affordability, an issue that continues to draw significant attention and represents a significant challenge for many Americans. Renting provides an attractive alternative for many households, which is why, since 1965, five, about one-third of all Americans have rented their home. Yet, with only 10% of multifamily apartments offering three bedrooms or more, there is a clear gap in family-oriented rental options. This is where we're proud to lead, providing homes for growing families seeking value, services, and convenience in the neighborhoods they care about. As a result of this focus, we have a clear view of the needs of our customer base including many first responders health care workers teachers veterans and other vital community members we are committed to providing them with well-maintained high quality homes and that commitment matters even more today as higher home prices elevated interest rates and large upfront costs have put buying a home out of reach for many households. According to data from John Burns, residents in our market save nearly $12,000 a year on average by renting their homes, helping families manage their budgets, build savings, and access schools and neighborhoods that might otherwise be out of reach. And for residents ready to take the next step, we help them prepare for it. Historically, more than 20% of our moveouts have been residents who purchased their own home. One way we support that journey is by offering a free, company-funded, credit-building program that reports positive rent payments to the credit bureaus. This allows our residents to build credit from the rent they already pay with us. A benefit most smaller landlords don't or can't offer. We have more than 160,000 residents today currently enrolled, with residents having seen an average credit score increase of 50 points this strengthens their financial foundation lowers borrowing costs and improves their ability to qualify for a mortgage when the time is right of course housing affordability is fundamentally a supply issue which brings me to my second point one of the most constructive ways we can help is by adding more homes to the markets we serve While our home builder partnerships have supported that effort for years, our acquisition of ResiBuilt expands it even further and improves our control over cost, product quality, and delivery pace. ResiBuilt is already delivering homes at a pace of over 1,000 homes per year in its fee-build business. We expect to grow on that foundation over time to add even more high-quality homes for Americans where demand remains strong. And that leads me to the third topic I outlined this morning, which is our long-term objectives. We laid these out at our November Investor Day, and they continue to guide how we're going to operate in the future. They include, first, delivering attractive same-store NOI growth. Second, allocating capital thoughtfully across accretive growth opportunities and share repurchases. Third, using our scale and technology to drive efficiencies and elevate the resident experience. and fourth maintaining a strong balance sheet looking back over the past year we made meaningful progress on each of these priorities we continued to strengthen our platform and improve the resident experience we took an important step toward expanding future housing options with the resi build acquisition as we move further into 2026 we are reaffirming these objectives with a focus on controlling what we can control. That discipline will continue to guide our decisions as we work to deliver value for residents and shareholders, while expanding housing choice and flexibility in our communities. At the center of our work is a commitment to the people we serve and the people who make our progress possible. To our residents, associates, and shareholders, thank you for your continued trust and partnership. Now, before we turn the call over to Tim to discuss our operating results, I've asked Scott Eisen to share a few more details on the ResiBuilt acquisition. Scott?

Thanks Dallas. We're excited to welcome the ResiBuilt team to Invitation Homes. This acquisition accelerates our in-house development capabilities while keeping our upfront approach asset and capital light. ResiBuilt is a best-in-class builder of single-family rental homes, having delivered over 4,000 homes since 2018 in Georgia, Florida, and the Carolinas. Around 70 ResiBuild employees have joined us, and the team will continue operating under the award-winning ResiBuild brand. Leading the platform is Jay Bice, a highly respected leader in the Build to Rent development space. Jay will continue serving as president of ResiBuild and report directly to me. Today, ResiBuild has 23 active fee-build contracts with over 2 000 home starts planned for 2026 and beyond we expect nearly all near-term activity to remain third-party fee-based generating capital light earnings and providing modest accretion to 2026 affo beyond this currently contracted work resi-built offers opportunities to develop around 1500 lots in atlanta charlotte and orlando over time we expect to selectively develop homes for the Invitation Homes balance sheet and for our JV partners. Together, ResiBuild's capabilities elevate our long-term supply strategy by giving us greater command over product, location, and timing. We expect to unlock new operational efficiencies, achieve more seamless integration, and gain stronger control and foresight across our growth pipeline. These capabilities also provide additional flexibility while complementing the strong relationships we maintain with our national home builder and joint venture partners in short resi built strengthens our foundation for future growth and expands the housing options available to families across our markets with that I'll turn it over to Tim to walk through our fourth quarter and full year operating results thank you Scott and good morning everyone our fourth quarter and full year operating results highlight the strength of our platform the dedication of our associates, and the trust our residents place in us.

For the full year 2025, we delivered solid same-store performance, with same-store NOI growth of 2.3%, finishing above the midpoint of our guidance range. This was driven by 2.4% core revenue growth and 2.6% core expense growth. In the fourth quarter, Same-Store NOI grew 0.7% year-over-year, supported by 1.7% growth in core revenues and a 4% increase in core expenses. Resident satisfaction continues to be a central focus and a differentiator for invitation homes. Turnover remained low during 2025 at 22.8%, consistent with the prior year, and average length of stay remained well over three years. In addition, same-store average occupancy for the year was 96.8%, landing at the high end of our 2025 guidance. These metrics all underscore the stability of our resident base and the quality of the service we provide turning now the same store leasing performance fourth quarter blended rent growth was 1.8 percent this reflected strong renewal rent growth of 4.2 percent which more than offset a 4.1 percent decline in new lease rates given that renewals account for about 75 5% of our total lease book. In January, occupancy held just under 96% and blended lease rate growth improved by 30 basis points from the prior month to 1.5%. Renewal growth was roughly flat with December at about 4% while new lease rates were down 4.2%. Performance over the past few winter months was broadly in line with our expectations for this time of year and reflects the effect of targeted specials in some of our slower markets where supply has exceeded near-term demand these concessions helped support steadier occupancy through the softer seasonal period which should better position us as we move into the spring leasing season looking ahead we remain fully committed to achieving the $0.14 to $0.20 of incremental AFFO per share growth over the next three years that we expect on top of our baseline growth as we outlined at our investor day. Operational enhancements are expected to provide roughly half of the projected AFFO growth, and our team remains focused on executing the initiatives to unlock this incremental value in the meantime our mission of elevating the customer experience continues to guide our decisions and our daily execution we are making steady progress modernizing our service model expanding the use of centralized functions where they can improve speed consistency and quality and giving our teams better tools to serve our residents more effectively these efforts also tied directly into how we control the controllables across the business. There's still more work to do, but we continue to believe our initiatives will drive higher satisfaction and stronger long-term operating performance over the next few years. I'd like to thank all of our teams for their commitment to this work and for the progress they're delivering. With that, I'll turn the call over to John.

Thanks, Tim. This morning, I'll cover three topics. First, our balance sheet and liquidity position. Second, our fourth quarter and full-year financial performance, and third, our 2026 guidance. Starting with the balance sheet, we continue to maintain a conservative leverage profile that supports our investment-grade ratings. We ended the year with $1.7 billion in total liquidity, including unrestricted cash and undrawn capacity on our revolving credit facility. In addition, our year-end net debt to adjusted EBITDA ratio remained at 5.3 times, approximately 94% of our total debt was either fixed rate or swapped to fixed rate and approximately 90% of our wholly owned homes were unencumbered we have no debt reaching final maturity before June 2027 as previously announced in October our board of directors authorized a 500 million dollar share repurchase program since that time we've repurchased 3.6 million shares totaling approximately $100 million. We see meaningful value in our shares and expect to continue repurchasing as opportunities permit. Turning now to our financial results, core FFO for the fourth quarter increased 1.3% year-over-year to $0.48 per share, while core FFO for the full year was up 1.7% to $1.91 per share, primarily due to NOI growth. AFFO for the fourth quarter was generally flat year-over-year at $0.41 per share, while AFFO for the full year grew by 1.8% to $1.63 per share. The last thing I'll discuss is our full year 2026 guidance. This includes our expectation for same-store NOI growth in a range between 0.3% and 2%, driven by expected same-store core revenue growth in a range between 1.3% and 2.5%, and same-store core expense growth in the range between 3% and 4%. Our same-store core revenue growth guidance assumes average occupancy of 96.3% at the midpoint, while we expect same-store blended rent growth in the mid 2% range. In addition, our outlook incorporates approximately 550 million dollars of dispositions at the midpoint, which we expect to serve as the primary funding source for additional share repurchases and 250 million dollars of anticipated wholly owned new home deliveries at the midpoint. Together, these assumptions result in full year 2026 core FFO guidance of $1.90 to $1.98 per share and AFFO of $1.60 to $1.68 per share. For complete details of our 2026 guidance assumptions, including a bridge from 2025 core FFO to our 2026 guidance midpoint please refer to last night's earnings release as we embark further into the new year we believe our operating discipline capital allocation strategy and strengthened development capabilities support our ability to remain nimble and focused while continuing to serve residents with quality and genuine care combined with a solid balance sheet clear priorities and steady progress across the business we believe we are well positioned to deliver long-term value for our shareholders and the families who call our homes their own. That concludes our prepared remarks. Operator, please open the line for questions.

At this time, if you would like to ask a question, press star, sending number one on your telephone keypad. To withdraw your question, simply press star one again. We kindly ask that you limit yourself to one question for today's call and return to the queue for any additional. We will I'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Yana Gallen with Bank of America. Please go ahead.

Yana Gallen Thank you. Good morning. Thinking about your expectations for same-store blended rent growth in the mid-2% range, just curious kind of the kind of quarter to date. It sounded like you said 1.5% so far for blended lease growth. Just how does that track, and then how are you kind of anticipating the peak leasing season to play out this year?

Hey, Yana, it's John. I'll take the first part and then see if Tim wants to add any color. You know, I think the mid-2% blend aligns with, you know, where our guidance is coming out. I think, you know, six, seven weeks into the year, we've only just gotten into peak leasing season. So I think it's a little bit premature to draw any conclusions based on what we've seen thus far. I would note that, you know, in terms of top of funnel demand, you know, lead volume feels very healthy compared to last year. I think the challenge for us at the moment, and, you know, this was true in the fourth quarter as well, was just the amount of available inventory. on our book and in some of the markets where we operate. So I think time will tell. We'll know a lot more about how peak season shapes up the next time we get together. But I would note that each of the last few years, the nature, timing, and kind of shape of the demand curve in peak season has changed. So we just want to be judicious in terms of the assumptions we make about the blend.

Thanks, John. And I'll add, look, supply and demand dictates our pricing. Supply, we talked about this on past calls, has been slightly elevated in a few of our core markets, namely Florida, Texas, and Arizona. But we are seeing those supply levels come down. And as John mentioned, our peak season really starts right after Super Bowl, goes into midsummer. We're at that through a variety of different metrics, but, you know, our lead volume remains strong, clearly a strong indicator that there is demand for single-family housing. We will continue to see over the next couple months our spreads between renewal growth and new lease growth narrow as our new lease growth expands. Right now, I'll add that we don't have any concessions on our scatter site product. We use that tool, as we have in years past, to incentivize residents during our slower season. Right now, the only specials that we have going are on our build-to-rent communities, and that's pretty customary for developers and investors during lease-up to achieve stabilization. So we're really happy with the supply and demand fundamentals as they're heading into peak season right now.

Your next question comes from the line of Eric Wolf with Citi. Please go ahead.

Hey, thanks. Good morning. I think some drafts of the institutional investor ban have been circulating um through congress i was just curious if you could comment on sort of what you would like to to not see in that bill versus what you're advocating for sort of how you hope um the legislation ultimately looks hi eric this is dallas thanks for your question um we're certainly all over it as you'd expect um and i just at a high level say that we've been encouraged by the discussions with policymakers on both sides of the aisle through this process.

Obviously, the EO, well, the tweet, I should say, and then the EO was something that I think the industry really expected. That being said, we have a sensitivity and an appreciative nature of the focus being on this issue around affordability. I believe through the trade association, also the work that we've been doing with the companies in the NRHC, I believe we've been able to highlight appropriately where SFR and more importantly professionally operated single family rental lives in the broader ecosystem. That being said, I think it's a little too early to speculate on what we do or don't want to see. In some regards, I think the industry is hoping for clarity. I think we like the idea of having some clarity of what you're able to do versus maybe what you're not able to do. It certainly feels like BTR and the production of new product is something that feels pretty favorable based on the conversations we've been having. So we do that as a positive. We're excited about that and what it means for both the way we work with our current builder partners and also what we can do now with our own platform and ResiBuilt. During these conversations, the focus has certainly just been on affordability, path to homeownership and to create sort of lanes for folks that want to transition into homeownership over time. And as you guys are well aware, we've been hyper-focused on that ladder point really for a couple of years now and making sure that we have positive credit reporting. We have currently about 160,000 residents enrolled in positive credit reporting. We've seen credit scores go up by 50 basis points. So I think all these facts have also been very helpful as we've been talking with policymakers around how SFR can fit into the broader ecosystem. And I think, you know, the important part here is that we want to meet customers where they are. And there's certainly a number of customers we see in our business day in and day out that transition from rental to home ownership. I think in the last quarter is around 16 or 17 percent. Traditionally, it's been between 20 and 25 percent. We do that as normal. But with the differential in costs being about a thousand dollars a month cheaper to rent than to own, not including the down payment burden, and then the other things that go into homeownership, we know we offer a pretty attractive value to customers. And they continue to tell us that both in our surveys and as we work for ways to refine and improve our processes. So I think that's all I can say from a legislative perspective. We're certainly engaged.

We're having great discussions and i feel like it's been uh candidly pretty pretty collaborative your next question comes from the line of austin werschmidt with key bank capital markets please go ahead great thanks good morning everyone so appreciate kind of the decision to to step in and buy your shares here and and you know comments around being a net seller and using some of those proceeds to buy back shares but i guess dallas giving your comments about you know being encouraged with what's happening on the regulatory front. Tim mentioned you're starting to see supply moderate. What would it take for you to really ramp up the buyback even further, given that meaningful value that you referenced you see in shares today? Thanks.

Thanks for the question, Austin. I want to echo what John said in his preparative marks. I mean, we see real value there in terms of where the shares are currently trading. We are clear about that at NARIT at the end of the year. Now, We certainly have limited windows where you can sort of operate. And then at the end of the day, and I think you guys know this about us, from a capital allocation perspective, we also want to be moderate. We know that we have opportunities on the horizon, both with external growth and some of the opportunities that we'll look at over the coming year. But I think for us, it'll be about when the opportunities are available to us, as John said, with always thinking about where our current cost of capital is highest best use on a risk adjusted basis for economic returns that make sense for our shareholders so you can certainly argue that if the shares continue to trade in this range that on a risk adjusted basis it can make it can make sense to continue to be active there your next question comes from the line of steve sakwa with evercore isi please go ahead yeah thanks good morning um i was wondering if you could provide a little more commentary around your expense growth assumptions i know that you guys did a very good job containing expenses and i think handily beat

your um initial expense outlook for 25. um i know you put a few assumptions around uh taxes and insurance for 26 but you know maybe just speak to some of those numbers and and they seem a little bit elevated but maybe there's some tough comps going on so any clarity around expense growth would be helpful thanks yeah steve thanks i think a couple things going on there you know with with With property taxes, obviously the outcome in 2025 was pretty favorable relative to our guidance.

I think it's worth pointing out that we had a fairly sizable good guy in Texas last year and absent that, property tax growth would have been closer to the mid fours. So the range we've articulated in our guidance, I think is generally consistent year over year. With respect to insurance, a couple things going on there. 2025 was a very favorable year for us. It creates a bit of a tougher comp. I think if you look at the property market, we think that that is going to be a very constructive renewal. It's in the general liability, excess casualty, and auto market that has become materially harder and where we think we'll see some outsized increases year over year. So when you put it together, you know, that's the driver around the insurance expense growth. Now, our policy year runs from March 1st to March 1st, so we'll be buttoning that up in the next week and a half, and we'll have more information that we can share. You know, certainly looking at all the levers we can fold to try to drive a better outcome, but, you know, we're not going to change the way our program is constructed. We want to make sure that we are well insured, and, you know, the insurance market has sort of ebbs and flows similar to other markets. If you look at, you know, what that implies for overall controllable expense growth or all other expense growth, I guess I should say, you know, it's really in the range of one to two percent. So we think our cost controls continue to be effective. We continue to be laser focused on trying to make sure that we are being as efficient as we can be. I think the other thing I would call out with respect to expenses is something that we included in our earnings bridge. I think several of you noted it, but I would just point out that we have incorporated in our bridge an estimate of two pennies per share related to advocacy and other costs. You know, want to be clear that that is an estimate. You know, we've incurred some limited cost to date and the timing and magnitude of any additional costs we incur is a bit of an open question, but we wanted to include something there in the bridge just to be transparent about the likelihood that there will be costs associated with navigating the current regulatory backdrop.

Your next question comes from the line of Brad Hepburn with RBC. Please go ahead.

Yeah. On the repurchase, I was wondering if you could talk about what the rough maximum amount is that you can accomplish in any given year without running into tax issues or needing to issue a special. I know it varies based on what exactly you're selling, what the gains on sale are, et cetera, but I'm kind of wondering if the guidance assumes a number that's sort of close to what the annual maximum might be or if there's upside to that.

Thanks. I would just point out that, you know, we're not going to get into any specifics about, you know, the quantum of share repurchase embedded in guidance, but I would say that as Dallas noted and as I think I touched on in my prepared remarks, you know, when we see a material disconnect between where our shares are trading and what that implies as far as the value of our portfolio and what we view the actual value of our assets to be, you know, we have to evaluate that as an opportunity for capital deployment, right? And if we look at the relative risk-adjusted returns of the various alternatives available to us. It is hard to conclude that share repurchases aren't a very, very compelling use of funds. So I think, you know, what we've outlined in our guidance in terms of capital allocation activity sort of suggests that there will be excess disposition proceeds that, you know, should the shares continue to trade at a level that is meaningfully dislocated from the value of our assets, suggests that we'll be active in the market buying back shares.

Your next question comes from the line of Hindle St. Just with Mizuho. Please go ahead.

Hey, guys. Thanks for taking the question. I wanted to follow up on Yana's question on blend. I appreciate the color, John, but I'm still having trouble getting to the mid 2% that you mentioned, so maybe some more color on what you're implicitly expecting for turnover, renewal, new lease rates, and then while you're at it, maybe some color on bad debt and ancillary as well. Thank you.

Sure. Thanks, Handel. We are assuming turnover at the midpoint that is slightly higher than last year. We expect our renewal rate will remain healthy, given the favorable value proposition that we talked about in our prepared remarks. But I think the guide also acknowledges that there is a larger volume of rental product competing on the basis of price, and we anticipate that will lead to slightly higher turnover year over year. As far as days to re-resident, I would note, again, the supply pressures we're facing in certain of our markets, you know, are likely to have a flow-through occupancy impact, primarily through longer days on market. You know, we have done a very good job, I think, and tip of the cap to Tim's team in keeping days in turn pretty consistent. But the days in market number has certainly elongated. I think we did about 48 days to re-resident in 25, and my expectation is that in 2026, it'll take us a few days longer on average over the course of the year to get new residents into homes and getting them cash flowing. You know, with respect to sort of the components of the revenue growth guide, I would just point out that I think the earning from 25 will represent about 105 basis points. Blended rent growth this year is about another 105 basis points, and then the increase in other income contributes about 20 basis points. And so then if you net against that about a 40 basis point deduct for lower occupancy year over year, that's how you get to the 190 basis points at the midpoint.

Your next question comes from the line of Juan Sanabria with BMO Capital Markets. Please go ahead. Juan, your line is open.

Hi, this is Emily on behalf of Juan. Thank you for taking my question. I wanted to ask you if you could talk about what you've seen so far in January across the new lease renewal and blended rates as well as occupancy.

Yeah, this is Tim. That's a great question. Yeah, we've seen what we would expect to see in early February heading into the new year. Typically, you start to see a higher demand, higher lead volume across the assets, and so we're seeing that materialize in a stronger new lease rent growth. On the renewal side, look, the renewal side of the business is a very consistent part of our business. It represents 75% of the book. The renewal rates continue to remain very firm, and I think residents are generally very satisfied with what they're experiencing. We do expect to see, as I mentioned earlier on the call, we do expect to see our spreads start to narrow as we get deeper into spring, and we expect to see that continue until mid-summer. So you can expect to see that blend continue to pick up in these next couple months.

Your next question comes from the line of John Poloski with Green Street. Please go ahead.

Thanks, John. A follow-up question on property taxes. Just given a lot of markets are seeing flat and declining home prices now, Now, outside of the Texas kind of tough comps associated with Texas, are you seeing signs where municipalities are assessing property taxes more aggressively on investor-owned homes versus owner-occupied? Because I still think the 4% to 5% guide strikes us as really high, given home prices are declining, not really rising that fast.

Yeah, John, it's the right question. And thankfully, we are not seeing a differential treatment of investor-owned homes versus owner-occupant-owned homes. I think any approach to, quote-unquote, property tax relief that benefits owner-occupants at the expense of SFR operators effectively transfers costs from the families that own their homes to families that choose to rent. You know, our hope is that the folks making those decisions recognize that renters are voters, too. I think with property tax overall, John, you know, we just want to be cautious. I think, as we've talked about at length, you know, Florida and Georgia are two of our three biggest markets, and we have seen a continuing catch-up in terms of assessed values relative to what we view true market value to be. You know, just as a reminder, from 22 to 25 in Florida, we saw over 22% home price appreciation. And in Georgia, over that same period, it's over 23%. And so, you know, the ability of assessed values to catch up to that market value when it has expanded as rapidly as it has is somewhat limited. You know, in Florida, in particular, a portion of property tax bills are capped such that assessed values on a percentage of the total tax bill can only go up 10%. So, structurally, it sets up a multi-year catch-up. And so, I think as I take it all together and we look at property taxes, you know, certainly we're hopeful that we will do better than that. I think, as you know, we've had some nasty surprises if you go back enough years, and that's something that we want make sure we avoid by um uh just being thoughtful about um you know what is likely to happen at that line item your next question comes from the line of jamie feldman with wells fargo please go ahead great uh thanks for taking the call um you know i guess first thinking about development uh with the resi build platform you know do you think you'll need to buy more platforms if you're going to grow your development platform across the country?

Or do you think ResiBuilt, you'll stay within the ResiBuilt platform to expand into other markets and maybe a little bit more color on where you think you can be building going forward?

Jamie, thanks for the question. This is Dallas. And I'll also let Scott add anything he wants to add to this. I think at a high level, we feel really comfortable about the capability we just brought in-house. Jay is a seasoned operator in space. We've known them for over a decade. We've been impressed with the work they've done. They've built out a really remarkable platform in terms of both capability and scale. Scott talked about the 20 plus existing projects they have ongoing, which by the way, we didn't underwrite this initially, but has led to a lot of great synergies with our lending efforts in terms of opportunity sets and things we're getting an opportunity to look at on that perspective. I don't know that you necessarily have to go out and acquire other platforms to try and grow your development business. I think we've got the capability in-house. It's just a question around which markets do we want to be in and why. And we have a ton of experience prior to the ResiBuild acquisition of understanding sort of what our costs are in particular parts of the country as we build with partners and the like. And so I think for us, we feel pretty confident that we don't really need to do much outside of manage the mature organization we've just brought on. uh and find ways to sort of blend and extend in the right parts of the country over time and over distance the nice thing about this is this is really creative uh in terms of how we think about it they have a um you know a cash flow positive business that does great work in the marketplace with multiple parties um and we can start to look at opportunities as scott mentioned in his earlier remarks that are already sort of in front of us and we can also you know sit on the sidelines if we want to until we decide that a particular opportunity makes sense. Scott, anything you want to add to that?

No, thanks, Dallas. Thanks, Jamie. This is Scott. I think at our Investor Day in November, we shared our long-term vision to create value through our BTR growth strategy that combines construction, lending, and development. And our announcement of buying the ResiBuilt platform was months of thoughtful planning to advance that vision. The acquisition of Resi is a great step forward for us. They're a best-in-class developer that enhances our execution capabilities, expands our capacity to address the nation's most pressing challenges on housing affordability. You know, we're focused on adding supply in desirable markets and creating communities that families are proud to call home. They're currently focused in the Carolinas and Florida and Georgia, and we're going to continue to leverage their capabilities and boots on the ground in those markets. And that's really where our efforts are going to be focused for the foreseeable future.

Your next question comes from the line of Michael Goldsmith with UBS. Please go ahead.

Hi, this is Amy. I'm with Michael. The home builder partnership pipeline has been moderating and cap rates on acquisitions have also been slowly ticking down. So I was wondering how have your relationships with the home builders evolved and what factors are leading to the slower pipeline and potentially maybe a little bit lower growth from this avenue?

Thanks. Great question. You know, as far as the home builder dialogue continues very strong, right? We have great relationships with both the national builders and the regional builders, but given our cost of capital, we have been less aggressive in terms of, you know, committing to future transactions with the builders, mainly as a signal because of our cost of capital. I will tell you, we continue to receive substantial opportunities, in particular, the end-of-month tapes from the builders. You know, for the first two months of this year, we've received a lot of deal flow from So there's still opportunities out there, but we're trying to be a little less aggressive and obviously, you know, listening to the signal in terms of our cost of capital and the balancing act between acquisitions and share repurchases. And so I think, you know, but that being said, I think our relationship continues to be strong. We obviously purchased more than 2,000 homes last year from the home builders. We continue to have a daily dialogue. We're very selective. We are looking at opportunities for our joint venture partners. But again, given our cost of capital right now, I think we've just been less aggressive in terms of acquiring from that pipeline.

Your next question comes from the line of Jason Wayne with Barclays. Please go ahead.

Hi, good morning. The release mentioned that resi built can serve as an in-house development contractor uh can you just give some more color around how their team will assist in the process as you're growing out the build to run platform and then just the longer term growth profile of the resi built uh fee-based business specifically sure this is scott a great question look this platform um the resi but we've known these guys for a long time um they commenced operations six or seven years ago in terms of building up their platform.

And they're essentially a general contractor that has the capabilities to source land and do construction management oversight of projects. They have a business that, you know, historically had built for one particular institutional partner where they acted as a GP, but they also have acted as a fee builder on behalf of other third parties where they've done general contracting work and received payment for performing services on behalf of other equity investors and developers. We will continue to have them, you know, work in that business and generate revenue by working with third parties. And over time, they're going to explore opportunities to also perform work both for our joint venture partners and eventually for ourselves when our cost of capital improves. And so I think that they're a full service, you know, GC developer, and they're going to continue to do what they've been doing.

Your next question comes from the line. I'm Linda Tsai with Jeffries. Please go ahead.

Hi, thanks for taking my question. Just on ResiBuilt delivering 1,000 homes per year, and I know you're going to grow that more over time, but how long would it take to say doubling it to maybe like 2,000 homes per year?

I think it's too soon really for us to be speculating on that. These guys have a platform in boots on the ground in place that gives them the ability to perform at least a thousand home starts a year on behalf of their joint venture partners and customers. And over time, we'll kind of see where the business goes. But I think it's just too, you know, we closed on this acquisition five weeks ago. We're still working on integration of them into the platform. I think it's too soon for us to be speculating on things like that.

Your next question comes from the line of Jade Romani with KBW. Please go ahead.

This is Jason. I'm for Jade. Thanks for taking my question. So, home builders are offering rates below 4% in markets such as Phoenix. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing an increase in move-outs to buy? Thank you.

Jason, thanks for the question. This is Dallas. As I mentioned earlier, we're only seeing about somewhere between 16% and 17% of our move-outs say that the reason they're doing so is because of home ownership opportunity. Now that being said, and we're not mortgage experts, we clearly follow it, there's plenty of supply on the market for sale today. There certainly feels like there's a bid-ask spread between where homes are selling, where a home can be financed at, and you're certainly right in highlighting that builders have had an opportunity to buy down a rate, which has helped, candidly, probably keep home prices somewhat stable over the last couple of years. That being said, on a seasonally adjusted rate, we're still seeing somewhere, I think, just less than 4 million total transactions in a given year, that's really low. Like most economists would tell you that we should probably see somewhere between five, five and a half million transactions. The amount of inventory in the MLS is almost 2x this year of what it was last year. So all of these fundamentals sort of suggest a couple of things to us as we look at the macros. One, there is just a cost to ownership that is pretty egregious at the moment when you consider all things being loaded in. We pick on mortgage quite a bit, but I think we need to be honest about property tax and insurance. John just talked about it. Property tax has been egregious in most states over the last four or five years as it's caught up with the inflationary pressures put on housing prices. And then on the insurance side of the equation, it's been equally as tough, I think, as people think about that fully loaded cost. So that probably has something to do that. And then you, you know, the fourth multiplier here is at what price can you finance this? And so you're right in the highlight that the builders have an advantage in terms of how they're buying down rate. But it feels like with, you know, the 30-year being around six or low sixes, it's got some room to go probably to pique enough curiosity. But let's see how the spring and summer play out.

Your next question comes from the line of Jesse Letterman with Zellman.

Please go ahead hey thanks for taking the question can you talk through what you're seeing on the supply side of things um now of course new move in rent growth negative four percent during the quarter coupled with a sequential decline in occupancy um so we know development starts for bfr down multi-families also come down what are you seeing from a supply perspective in terms of those pressures alleviating Thanks.

Yeah, this is Tim. Great question. Look, supply in a lot of markets is higher than we've seen in the history of this industry. And there's a couple of different factors, right? And you mentioned some of them, right? There's build a rent product that has come online. Most of the peak deliveries in our markets are in the rear view mirror. And so it's a matter of time before the demand kind of eats that up. You're also seeing scatter site SFR, both institutionally owned and mom and pop SFR that's out there. We're seeing slightly higher levels of mom and pop SFR as people choose not to sell. They enter that product into the rental market. And there also is, as Dow talked about earlier, there's the market for newly built products. So there is a supply, a slight oversupply right now. We're not seeing that grow right now. What we are seeing is that kind of chip away based upon the demand. You know, everybody talks about, you know, homeownership as being kind of the end goal. There's a lot of people, and we see this in our data with our residents, they choose to rent. And so we believe that there is a long-term healthy demand for our product across our markets. And again, we talked earlier about the specific markets where we do see higher supply, namely the Sunbelt, you've got Florida, you've got the Texas markets in Arizona, and we do see that in our numbers. But at the same time, lead volume is still there. A lot of people entering that age, our average age of resident is about 38, 39 years old. So there is just a wave of demand for our product. And when you look at our renewal rates, you know, 75% of our renewal rate of 75% roughly of our book of business, it's pretty obvious that people who are renting want to continue to rent. And so does the supply backdrop concern us? Well, it's there, and I think it's a little bit of a cycle. It's transitory in nature, and we're going to let demand continue to gobble that up over the coming months and quarters.

Your final question comes from the line of John Peloski with Green Street. Please go ahead.

Hey, thanks for taking the follow-up. I have a two-parter. Forgive the two-part question. Tim, your comments that there are zero concessions on your scattered site portfolio, does that represent a meaningful improvement from this time last year? And then secondly, for renewals that have already gone out for, I guess, March and April, are we expecting the achieved renewal rate to still hover in this 4% plus or minus range, or should it be worse or better?

John, great questions. I'll tackle each of them. The first question on concessions, look, we offer specials through the winter months historically, and that ranges depending on kind of what we're seeing in the marketplace in terms of the supply and demand fundamentals. We're very nimble. Our pricing structure allows us to do that, to target those specials. And our specials are not significant. They're really around, you know, historically, this cycle we've offered $500 off. and then for a two-year lease we've thrown an extra $250 those specials are off we are seeing demand kick up and so there's there's not the reason to deploy tools like that right now but again we've offered them in years past and then on your second question can you remind me the second question yeah they get clarification on the first one again a concession is a lot lower than this time last year across your platform the second question is on achieved renewals that for renewals that become effective in March and April?

Do we expect effective renewal increases still in the 4% range, or should it be better or worse?

I think it will hover around the 4% range in answer to your renewal question. It could go a little bit low, it could go high, but 4% has been very consistent for us, and we continue to see about 75% of the book, maybe a little bit more renew. And getting back to your concession question, And, look, it's not any more or less than last year. This is typical for what we do, and we take it off this time of year as we see the market return into our peak leasing season.

That concludes our question-and-answer session. I will now turn the call back over to Dallas Tanner for closing remarks.

We want to thank everyone for their participation today, and we look forward to seeing everyone at the upcoming investor conference. Talk soon.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. you may now disconnect.