Welcome to the Invitation Homes 2nd Quarter 2026 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, Tim Loebner, our Chief Operating Officer, John Olson, our Chief Financial Officer, and Scott Eisen, our Chief Investment 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 second quarter 2026 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. 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 2025 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 GAAP measures in yesterday's earnings release. With that, I'll turn the call over to Dallas Tanner. Go ahead, Dallas. Thanks, Scott.

Good morning, everyone. It's been a busy peak season for us. Before getting into the quarter, I want to thank our residents for the trust they keep placing in us and our field teams for how they've handled the pace. Together, we delivered a strong second quarter. Average occupancy held above 97%. New lease rate growth accelerated for the sixth month in a row, and we grew core FFO per share by 5% and AFFO per share by just under 6%. Tim and John will get into the details, but it's a great foundation heading into the second. I'll kick off my comments by talking about the 21st Century Road to Housing Act. The law was enacted earlier this month, providing greater clarity for our business and the broader housing industry. Among other things, the Act includes some meaningful provisions and is speeding up and encouraging new construction. That's a goal we fully support, since we've long known that better housing affordability is achieved by increasing new supply. In fact, that's been precisely our approach at Invitation Homes, going through new construction and home builder partnerships. We're pleased that the law lets us keep doing what we do best, offering a valuable housing solution to the millions of Americans who choose to lease, while helping deliver the new supply this country needs. And that commitment goes well beyond supply. For our residents, that means continuing free, positive credit reporting, helping them build credit simply by paying their rent on time. For policymakers, it means staying closely engaged with Treasury and HUD and others as these new regulatory guidances take further shape. Beyond the legislative backdrop, demand for our homes remains healthy. According to the latest data from John Burns, on average, it's over a thousand dollars per month cheaper to lease today and to own a similar house in our markets. Based on our average resident tenure of just now over 40 months, that adds up to more than $40,000 in total savings for a typical family. That is a compelling value proposition, along with favorable demographics and the convenience of leasing will continue to support it. Turning now to capital allocation. The story during the second quarter, stock repurchases remained among the most attractive uses of our capital. During the second quarter, we bought back another $100 million of stock, which brings us to $600 million dollars in stock repurchased since December at an average price of a little over $26 per share. These share repurchases have been funded in large part by home sales priced well above where the public market is valuing our assets. We are also starting to see early signs of a thaw on the acquisition side. Deal flow has been relatively stagnant over the first six months of 2026 thanks to the legislative uncertainty but with the road to housing act now settled more sellers are coming to market including some attractive smaller portfolios it's still early but encouraging since it gives us another lever for a creative capital deploy opportunities in our development and our lending channels rescue builds pipeline has re-accelerated following some disruption earlier this year when the bill was still in flux. And on the lending side, construction loan commitments, including some, still in diligence now total just under $350 million, with about 10% of that funded so far. As a reminder, these loans typically yield in the high single digits and give us the opportunity to purchase the community once they're built. Zooming out, at our investor day last November, we talked about building the best-run SFR platform in the country. It's disciplined on cost and capital, also focused on a resident experience. That discipline has been on full display in three ways so far this year. First, capital allocation, selling homes at a premium, redeploying that capital into creative opportunities, formed through the acquisition of Resubilt and the expansion of our construction lending business. And third, in resident satisfaction, reflected in the renewal and retention numbers Tim will walk through shortly. In short, we're doing exactly what we said we were going to do. Combined with what Tim and John are about to cover, our first app performance gave us confidence to raise our full year guidance. I'll let John cover the specifics here. But the takeaway is that Invitation Homes continues to generate strong and stable cash flows. Selling homes at a premium to where the market is valuing our assets and recycling that capital accretively create value for our shareholders. Tim, over to you.

Thanks, Dallas, and good morning, everyone. I'll start with the headline. Accelerated every month of January through June. Capping off peak leasing season on a high note, our second quarter's average length of stay for our residents remained over 40 months. High level of resident satisfaction with both our homes and our service. Turning now to our second quarter same-store results, NOI was sent year-over-year, driven by 1.6% poor revenue growth, and poor operating expense growth of just 1.9%. I'll touch on a few more details behind each of those items. On the revenue side, renewal rent growth rose from just over 3% in April and May to 3.7% in June. Averaging 3.3 percent. Second quarter new lease rent growth was 1.1. Resulted in second quarter blended lease turnover improved 50 basis points year over year to 5.7 percent at 97 upper season. The best news is on the controllables where expenses we manage were down 1 percent year over year. It's a really good reflection how our teams are running the business. Fixed costs including property taxes and insurance, increased by only 3.5% year-over-year. We're pleased to see both controllable and fixed expenses tracking in line with our expectations. Supply backdrop across our markets is telling a similar story. Build-to-rent deliveries have continued to decline, and while SFR listings remain elevated, the pace of new supply growth, In addition, according to John Burns, markets that were the most now seeing the sharpest drops in new homes. There's still a bit of supply to work, but the trend has continued to keep a close eye on this as we move through late summer. And nearer supply growth, the steady demand that Dallas described, and strong execution from our teams, our lease rate growth picked up every month through this year through June, or easing, as we'd expect for late summer. to 1.2% in July. Renewals followed their own path, staying in the low 3% range for April and May, before accelerating to 3%. That brings our preliminary blended at least to 3.4% for July, 96.5%, reflecting normal seasonality from summer move-outs. Taken together, this was a strong operating quarter. We headed into the back half of the year with real momentum on renewals, well-managed expenses, a healthy demand and improving supply backdrop. Proud of how our teams have shown up for our residents this year and how their efforts have made results like these possible. I'll hand it over to you.

Thanks Tim. Today I'll cover our second quarter financial results, capital allocation activity, the balance sheet, and our updated guidance starting with our results second quarter core ffo per share was 51 cents up five percent year over year and affo per share was 44 cents up nearly six percent year over year the capital side during the second quarter we sold 657 fully owned homes primarily to end users for gross proceeds of about 309 million dollars and we bought 196 homes all from our homebuilder partners for about $74 million. Combined with our first quarter activity, this pace of dispositions has run well ahead of our original expectations, which is why we increased our full-year disposition guidance for wholly owned homes by $300 million at the midpoint to $850 million. Our acquisitions guidance remains unchanged, with midpoints of $250 million for wholly owned homes from our home builder partners, and $100 million through our joint ventures. We also deployed another $100 million for stock repurchases in the second quarter, for a total of $600 million of share repurchases since we started the program late last year. Since that time, we've repurchased approximately 22.8 million shares at an average price of $26.30 cents per share. For reference, this average repurchase price represents an implied value of just over $270,000 per wholly owned home. That's a significant discount compared to our year-to-date actual average sale price of $450,000 per home. We used proceeds from this quarter's asset sales, along with free cash flow, to reduce our revolver balance from $560 million as of March 31st to $280 million as of June 30th. As a result, we ended the second quarter with a net debt to trailing 12-month adjusted EBITDA ratio of 5.4 times, or just below our 5.5 to 6 times target range. Turning to the balance sheet more broadly, it remains in great shape. We ended the quarter with over $1.5 billion of available liquidity. Substantially all of our debt, whether fixed rates or swap to fixed rates, and approximately 90% of our wholly owned homes were unencumbered. We also took steps to strengthen that balance sheet profile even further, taking advantage of favorable market conditions earlier this month to issue $500 million of senior notes maturing in 2032 at a 4.95% coupon. We used the net proceeds to prepay approximately half of our 2017-1 securitization, which had a $988 million balance outstanding as of June 30th that matures next summer. Because the offering and prepayment both occurred in July, their impact isn't reflected in our June 30th financial statements or supplemental schedules. So we've provided the pro forma impact on certain metrics in a footnote to supplemental schedules to be reflecting on our year-to-date operating results and the benefit of this year's stock buyback activity, we raised full-year core FFO and AFFO per share guidance this quarter, with midpoints up a penny each to $1.95 and $1.65, respectively, alongside the disposition guidance increase I mentioned earlier. With the first half of the year now behind us, we also narrowed our same-store core revenue and NOI growth guidance ranges around unchanged midpoints, reflecting improved visibility into the balance of the year. All told, we have a strong balance sheet, good operating momentum, and multiple ways to keep creating value for our shareholders. This concludes our prepared remarks. Operator, please open the line for questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press the star 1 on your telephone keypad. And if you would like to withdraw your question, please press the star 1 again. Just a reminder to limit yourself to one question only. If you have additional questions, please rejoin the queue. Your first question comes from the line of Eric Wolf with Citi. Please go ahead.

Hey, thanks. You mentioned that you were starting to see some smaller portfolios come to market. Could you talk about how you think those portfolios will price from a cap rate and unlovered IR perspective? Assuming you take part in any of these deals, how would you fund them?

Thanks for the question. This is Scott. Yeah, in terms of the market right now, we're not seeing any large transactions at this point. We've probably seen some smaller portfolios and, you know, sub $100 million, maybe slightly bigger than $100 million size range. You know, I think it's too early to really talk about price guidance and returns on it because we really haven't seen a lot of transaction activity. But I would say that, you know, post Road to Housing Act, if for the first six months of the year things were really quiet just because people were waiting to see where the legislation turned out, I think now that the act has been passed, I think we're seeing some capitals start to, you know, open up again and start to test the waters and see where the market is. So it's too really, it's too soon to say exactly where we think transactions are going to price. But I would definitely say that that activity is sort of picked up since the legislation got that.

And your next question comes from the line of Jamie Feldman with Wells Fargo. Please go ahead.

Hi, thank you. You've got Connor on with Jamie.

Could you provide an update on July new renewal and blended lease rate growth and as we think about the second half of this year what are you assuming for those metrics and especially with the seasonal moderation and new lease particularly given the easier comps and more first half weighted expiration schedule hey connor a great question thank you this is tim speaking um you know as prepared or as discussed in our prepared remarks um let me run through what we had in july july our renewals was at 4.3 percent really happy with that that accelerated out of our q2 number which was 3.3 percent on the newly side we are at 1.2 percent that's coming off a 1.8 percent in june we saw a nice acceleration through uh through q2 and then on the blended side that was 3.4 percent and as i shared also in the prepared remarks we were really pleased with um how uh the year has progressed and continues to progress every month on the blended side we've seen favorable upward movement and look as you think about the back half of the year as we share at several investor conferences there's a regular cadence to how the industry moves right you know let's just talk start with occupancy because that also informs us on how we go about our rent rate occupancy like you start the year and you continue to grow into peak season during peak season you see a lot of households move out typical time for families to move out of houses so you see you see occupancy moderate a bit and then towards the very end of the year you see it pick up and then that puts us back into into the new year as it relates to rent growth let me break it down obviously the blend is is really just a reflection, like a 75% reflection of the renewal side of the house and about a 25% reflection of the new lease. New lease, you saw our numbers from Q1. We started out negative. That kind of picks up as you go through the year. That positive number held out. We saw it go and actually plateaued in June, which was really strong. It's later in the year than we saw in 2025. And we expect that to moderate through the balance of the year. On the renewal side, that's probably the most consistent part of our business. We typically see over the course of the year, it varies between three and a half to four and a half percent, which again is really important because that's 75 to 80 percent of the book of business. So that's how we expect to see it for the balance of the year. And we're really liking how we've seen the year shape up so far. And as for August, obviously, We don't know what new lease growth will be for August, but renewals in August are shaping up much like July. So we're really happy with how the portfolio is performing and how the teams are executing.

Thank you. Your next question comes from the line of Steve Zaqua with Evercore ISI. Please go ahead.

Yeah, thanks. I appreciate all the comments on the revenue side. Maybe just touching on expenses, which I think, you know, moderated a bit, Q1 to Q2. maybe just, you know, what are some of the puts and takes as you look in the back half of the year? And if you think about kind of your overall 26 number, and we sort of start to think about next year, I guess, what are the puts and takes we should be thinking about to next year's expense growth?

Yeah, Steve, I think the big one is obviously always property tax. You know, we have probably three, four weeks before we start to get preliminary views on value, and then maybe another 30 days, month and a half before we start to get actual bills in the door. So that's always a big consideration. But I think what's really striking to me is how effective the focus on cost controls around the controllable side of the house has been. I think the team has been making really thoughtful decisions about how they approach the service side of the house. I think we're really pleased that total turn costs are looking quite favorable. So as I think about puts and takes, I mean, to me, the big question mark at this point in the year is always property tax. I think vis-a-vis the rest of the expense line items, we are really happy with what we're seeing, and we're really pleased with where we are in the year, recognizing there's still a good bit of the year yet to go.

Thank you. Your next question comes from Jana Galan with Bank of America. Please go ahead.

Thank you. Good morning. And John, on the guidance increase, can you speak to any one-timers that may have benefited the second quarter or any offsets you expect in the second half of the year that caused the FFO run rate to come down?

I think with respect to the guide, I guess I'd point out a couple of things. As I just said, firstly, we have half a year to go, and the second half of the year presents potentially a higher degree of execution risk just based on the fact that, as Tim outlined, this is normally the seasonal period where you see turnover tick up a little bit, the quantum of homes that we're taking back that we need to get turned and back out into the market and released is something we're going to be really focused on as we think about defending occupancy in the second half of the year. Secondly, as we've talked about, you know, a lot of times higher turnover in the second half of the year has the potential to impact both the revenue and expense side of the P&L. And, you know, obviously any turnover we experience in the second half does create some degree of execution risk, given that the supply backdrop, while improving, remains elevated. So we want to be mindful of that. Thirdly, as I just outlined with Steve, you know, at this point near property taxes are still largely unknown. As a reminder, the three largest states are California, Georgia, and Florida. California and Georgia are both around 14% of total property tax. Florida is about 41%. So those three states are 70% of a line item that represents about 55% of our total OPEC. So that is always going to be a consideration when that's still kind of waiting for further clarity. Lastly, and I think what's maybe most notable, is given the disruption that some of the earlier versions of the Road to Housing Act cause, we do expect the RESI-built contribution to 26 earnings is going to come in a bit behind our original expectations. Projects that were in flight continued, but there were a number of projects that were scheduled to start in the first half that were delayed, and in some cases even canceled. So we're going to have a little bit of a shortfall that we want to try to overcome there. I think the good news is the team is doing a really great job of refilling that pipeline now that the uncertainty overhang has been removed, But it remains to be seen how much of that benefit can be recouped in the second half of 26 versus rolling into 27. So, you know, when we put all those considerations together, we think our guidance continues to reflect cautious optimism, while at the same time acknowledging that there are some unknowns and some execution risks and a decent chunk of the year yet to go.

Thank you. Your next question comes from Buckhorn with Raymond James. Please go ahead.

Hey, thanks. Good morning. Congrats, guys. I just got a question from a higher level. One of your multifamily peers, Sunbelt, highlighted that in quarter over quarter, they saw a big in-migration of new leases coming from out of market. I was wondering if you guys might have detected or tracked anything similar in terms of new lease demand kind of migrating into some of your Sunbelt markets from out of market.

Insightful question, Buck. This is to Allison. Tim, if you have anything to add, feel free to add in. And, you know, it's interesting. We survey going in and going out. And in our second quarter surveys, you know, roughly 85 percent of our move ins were in state move ins in the second quarter based on that survey data. So it's not like we're seeing any major dislocation or out of state folks coming in. It's usually about 50 percent of those, by the way, are moving sort of city to city. So they're trying out a new area. They want to be close to job, you know, corridors, transportation quarters are testing out a neighborhood before they buy. So we haven't seen anything that's sort of dramatic in terms of, call it, net migration shifts. Tim, would you add anything to that?

I wouldn't add anything specific to our survey data as it relates to our residents. But I think there is a good story here that we see in third-party data regarding migratory patterns. And if you look at about 65-70% of our markets, we are seeing projected net favorable migration into our markets, and those are primarily sunbelt markets, which I think is favorable for the long-term prospects of our portfolio. So, yeah, I think you touched on the IH decision-making that goes into where people are living, but I think the broader macroeconomic migratory patterns are favorable as well.

Thank you. Your next question comes from the line of Amy Provent with UBS. Please go ahead.

Hi, thanks. Other core revenue declined in the quarter after being up over 10% in the last quarter. So I was wondering, what are the moving pieces within this line item, and how do you expect it to trend for the remainder of the year?

Hey, it's John. Thanks for the question. I think it's important to remember that other property income is comprised of both lease fees and value-add service revenue. So the decrease this quarter was driven primarily by lowered lease fees, including lowered late fees and other administrative charges. Value-add service income was actually up about 9% year-over-year, and we continue to see that as an area of growth for us. So year-to-date, other property income has increased almost 5%, and we do expect to continue to see strong growth from that line item the rest of the year.

Thank you. And the next question comes from Brad Hepburn with RBC. Please go ahead.

Yeah. Hey, everybody. Just a follow-up question on the blends. You almost always see third quarter lower than second quarter, just given new lease pricing falls off. This year, the July blends are obviously up. It sounds like renewals will continue to be strong and above second quarter level. So just wondering if we should expect blends to buck the normal seasonal trend and increase in the third quarter.

Yeah. Look, we generally don't give too much of our projection numbers before it happens, right? But as I mentioned earlier, our renewal numbers that we're seeing in August look much like our July numbers. So we're really happy with the strength of what we're seeing in the marketplace. Typically, you do see the blended rate come down in Q4. You see that kind of taper off. But that's a function also of filling the portfolio. So again, we're really happy with how the market is continuing to find its footing. I think the year's shaping up as we expected, and to be honest with you, we're liking how it's gonna set up for 2027.

Thank you. And the next question comes from John Polosky with Green Street, please go ahead.

Hey, good morning. John, can you speak to the third-party management business as well as construction lending? Are those business lines and the contribution earnings trending better or worse than you expected? and any color the drivers would be appreciated?

Sure. Yeah, that's a good question, John. I think they're trending generally in line with our expectations. You know, we are seeing, I think, year-to-date, about $4 million lower on 3 p.m. fee income. That's driven primarily by the fact that we sold a number of homes on behalf of Starwood. And so it's really just a function of a lower average home count, as well as the fact that we had about $2.8 million of non-recurring disposition fees in 2025. And so that is also coloring kind of the year-over-year comp. As far as the lending business goes, and Scott should chime in with anything he thinks I've overlooked, we're actually really pleased with how that is going. Things got pretty quiet while the Road to Housing Act was underway. But, you know, similar to what we're seeing on the acquisition side, since clarity has been sort of realized, I think there's a lot more interest in inbound activity. The team continues to originate what we think are really interesting deals on real estate that we have a degree of conviction around. So, you know, it continues to be, I think, a really compelling area of growth for us. and we're actually a little bit ahead of where we thought we would be at this point in the year, which is great considering that we had about six months of kind of dislocation in the marketplace.

Yeah, and the only thing I'd add to that is, look, the program is going according to plan, right? And as Dallas said at its introduction, we're on track for, you know, based upon what's either closed or under commitment right now, call it approximately $350 million alone. And again, first principles are still the same. We want strong sponsors with BTR development in communities where we have boots on the ground, we have local market knowledge of those, you know, areas and communities that, you know, potentially we could purchase upon stabilization. So nothing has changed in terms of the design of the program. Nothing's changed in terms of the buy box. We're going to do the right deals in the right markets. We're being measured in our pace. And we're going to, you know, do the right loans with the right counterparties when the time is right. but we're on track and we're pleased with the program.

Thank you. Your next question comes from Handel St. Charles with Missouri Securities. Please go ahead.

Hey, guys. Good morning, and thanks for taking the question. I wanted to go back to Eric's earlier question about portfolios. I know that you're not seeing any larger portfolios out there today just yet, but I'm curious how you were kind of weighing those opportunities potentially against other capital allocation options on the menu today. Where would pricing for some of these portfolios need to be for you to be interested. I think a few years back, you know, pricing for larger portfolios were in kind of low to mid five. I think you did your last larger portfolio deal back in 2023 with Starwood. So, curious overall how, you know, kind of thinking, assessing the opportunity, and where it kind of stacks up versus the other options. Thanks.

Yeah, good question, Handel. And this is something that we debate internally and with our board as we think about capital allocation sources and uses. And if you look at the first part of the year, and we've been pretty clear about the fact that we saw, you know, highest and best use of capital really in the share of purchase programming. If these discounts continue to proceed, we're not going to be afraid to continue to purchase shares. That being said, you know, Scott is starting to see, you know, unique opportunities where, you know, maybe going in cap rates are sort of similar or in the same zip code of where we may have a view on where share prices could be trading. So it is an ongoing discussion, something that we'll evaluate. It has to be accretive is sort of the simple answer at the end of the day, right? If we're not looking to grow for the sake of growing, we certainly want to grow. We're doing a really nice job of harvesting gains off of assets that we don't view as maybe core to our portfolio over a long period of time. We can continue to do some of that in the foreseeable future if needed. And I think that we'll just balance it out in terms of sort of growth opportunities, things Scott's seeing on the development side. You know, we are starting to see some things that could make sense there that can compete with sort of a share repurchase, sort of cost of capital. We're also seeing, you know, and I think Scott was really smart to say this, like it's really early. Like we don't want to say that we're seeing big opportunities in M&A or any of these other sort of scenarios, But you're starting to see, you know, sellers poke their eyes up from above the 21st Century Road to Housing Act and sort of say, you know, what should I be doing here? You know, is my cost of capital changed? Are my opportunities for growth a little bit different than maybe they were? And I think Scott's taking some of those calls. So, look, I think we'll keep you guys posted. There's nothing to talk about yet. And my guess is this will drip out, you know, pretty slowly throughout the year.

Thank you. Your next question comes from the line at Austin Werschmidt with KeyBank Capital Markets. Please go ahead.

Yeah, thanks. John, Tim, you know, just curious. So lease rate growth is tracking, you know, low to mid single digit range for the first half of the year, I think around 2.3%. The start of the year, you were targeting around a mid single digit growth. Any changes to the composition of same store revenue growth? And if so, just how are you thinking about that balance between occupancy and rate growth?

Yeah, it's a good question. I would say, you know, no real change. You know, we continue to be focused on the tradeoff between rate and occupancy. I think what's been really striking to me and something that I feel really good about is I do think that the operations team is striking a better balance between how much occupancy we give up in the course of going out to capture rate. I think the execution continues to improve, and I think it's reflected in kind of the reacceleration we've seen in renewal rate growth, which has been really strong these last couple months and, you know, as Tim mentioned, is trending favorably as we look forward to August. So, you know, we are continuing to focus on making sure we drive to, you know, sort of an optimized balance between rate and occupancy, recognizing that at this point in the year, you know, the occupancy impact is likely to swamp the impact of, you know, blended rate growth. But, you know, that does not change the fact that we are focused on trying to capture as much rate as is available in the market while sort of defending occupancy by making thoughtful decisions on how we negotiate on renewals. The good news is, despite, you know, kind of striking those tradeoffs, we continue to see really strong renewal rate growth, which is obviously the primary driver of revenue for us.

Thank you. Your next question comes from Peter Abramowitz with Deutsche Bank. Please go ahead.

Yes, thank you for taking the question. I just wanted to ask about Northern California in general. Bay Area has kind of been on fire from a multifamily standpoint, but it's actually lagging Southern California in your portfolio from a revenue growth standpoint. So just kind of curious, could you talk through trends you're seeing there, how AI tailwinds and job formation are kind of impacting renter dynamics, and is it maybe a different demographic that's causing lower growth there versus some of the multifamily peers?

Hey, great question, and really an important differentiator between us and when I think multifamily talk about Bay Area demographics or performance trends. Remember, our Northern California portfolio is largely Sacramento and some of those bedroom communities that sit outside of Sacramento. So the Vallejos, you know, some of those sort of burbs that are kind of as you move towards the Bay. We do not have a Bay Area presence. We have a Sacramento presence. And so Sacramento, I think even for multifamily, behaves very different than, say, Bay Area sort of performance. And so our Northern California book is operating, you know, as we would sort of expect it, very strong renewals. I would tell you that on the new lease side, it tends to be a bit trickier than maybe our Southern California business, but very steady nonetheless. It's a good customer. It's a great book of business. When we go to sell homes in that part of the country, they sell very quickly. But just please don't confuse that with Bay Area multifamily. They're very different portfolios.

Thank you. Your next question comes from Adam Kramer with Morgan Stanley.

Please go ahead. great thanks when you look at um some of the softer new lease markets taking some of the florida markets phoenix texas um are there sort of unifying themes uh factors sort of across these markets you know sort of driving a little bit of a softer performance relative to maybe the midwest right is it elevated supply still is it consumer uncertainty maybe some of the migration stats that you guys walked through earlier but just sort of wondering what you know there's a unifying theme across these softer new lease markets This is Tim.

Good question. We track this topic closely, right? Pricing always is a function of supply and demand. And on the supply side, the recovery that Dallas talked about, the moderating higher supply levels year over year, you know, it hits markets, different markets in different ways. And there are certain markets that are recovering faster. We're seeing some really nice supply reduction in markets like Tampa, Orlando, Phoenix. There are other markets that are a bit slower. And, you know, the market's not perfectly efficient in terms of how you capture that rent growth as that supply eases. But we are taking advantage of that when we can. You know, the good news is that demand stays, has stayed in really healthy shape this year. If you look at the overall gross number of leads, we're seeing really healthy volume. If you look at, you know, the external funnel, we use, you know, use Google Analytics. We use Google search terms like houses for lease. That's actually up a hair year over year. So we know that there's a lot of people that are still looking for single family rental homes, especially in our markets. One of the things that we're happy about on the internal side is that we're able to convert a lot of these people. We're seeing better conversion rates year over year. And I think that's in large part due to two things. One, our teams are, I think, better equipped with technology that we're providing. We're launching right now and have launched in a couple of our markets a new customer relationship management platform. It's allowing us to really provide better service on the front end of the business as people are searching. And then we're also making some really nice enhancements to our digital shopping experience, and it's allowing people to self-select, and we're getting higher quality leads that we can work more effectively. So we like what we're seeing on the demand side. We like what we're seeing on the supply side. Cautiously optimistic that we continue to see the supply levels moderate over the course of the year. And you're going to see the variability across markets as it shows up in the form of new lease and renewal lease rent growth. So appreciate the question. We're deadly focused on it.

Thank you. Your next question comes from Julian Lewin with Goldman Sachs. Please go ahead.

Yeah, thank you. Maybe digging into that last answer a little bit more and specifically looking at your Florida markets, it really looks like from some of the data we look at that the headwind from rental home listings has eased meaningfully over recent months, which I think you referenced. And it does look like market rent growth has started to inflect in your Florida markets. I guess, can you dig into the drivers of that? How much of that is driven by, you know, home builders pulling back on deliveries versus how much of it is demand on the for lease or the for sale side starting to clear the available product? And then how sustainable do you think that sort of rent growth improvement we started to see will end up being?

Look, it's a number of different factors. There's no single driver of it. It's a good question. I think if you look at some of the migration data, we use Oxford Economics as our source, but you look at some of the projections from 2026 and, you know, you take it, for example, like a market like Orlando, really nice numbers there. You take a look at Tampa, another market with really nice numbers there, projected for 2026. You look at John Byrne's data that we reference frequently. Most recently, the June numbers show that, you know, continue to validate that build-to-rent deliveries are in the rearview mirror. So you look at those factors along with, you know, the various components of what constitutes supply in the market. And what you'll see in our data shows. It's third-party data showing what are the listings of homes for lease. We're seeing the mom-and-pop number, again, non-institutional, which drove the big buildup in supply over the last, call it, 24 months. That's also where we're seeing the supply easing if you were to assign or ascribe value to certain cohorts. We're continuing to watch that. We don't have a projection for the future, so I can't tell you exactly where we think supply goes over the next six months. You know, all the drivers of the market, our operating fundamentals are looking pretty strong. We like it. Again, cautiously optimistic as we navigate the back half of the year.

Thank you. Your next question comes from the line of Jesse Letterman with Zellman and Southeast. Please go ahead.

Hey, thanks for taking the question. A question here for Scott. Looks like there's only about 100 homes left in the forward purchase pipeline for 27, so I'd love to get your thoughts on, maybe discussions you're having with builders, either on forward purchase agreements or what you're seeing on builder tapes and what we should expect in terms of the composition of your external growth moving forward from your various end channels, and also like a slight two-parter, slightly related, any timing on self-performance from ResiBuilt?

Great question, Jesse. In terms of what we're seeing from the builders, obviously, you know, you've seen, I think at its peak, our builder backlog on forward purchases was at about 2,700 homes, and that's down now to about 300 for, you know, what's in the backlog. And again, those are forward purchase commitments that we had done over the last two to three years that have taken time to essentially be delivered where the pace was 10 a month. We obviously haven't made any new commitments year to date, which is why that backlog has declined as quickly and meaningfully as it has. I think where we're seeing the most interesting opportunity is we talked about this on our investor day in November where, you know, we continue to get monthly tapes from the builders on standing inventory of homes that can be delivered in a 60-90 day timeframe instead of a 12 to 18 month timeframe. We're still seeing opportunities that, you know, we talked about previously that, you know, are super interesting to us in the, you know, call it 20% discount, 6% cap rate range. You know, we've not, you know, meaningfully leaned into that, but we're starting to see some interesting opportunities that we're evaluating again. But I think in terms of that near-term composition, you'll probably more likely see us do short-term acquisitions from builder tapes in the short run as opposed to the long-term forward commitments. We still see forwards. I think the valuation and pricing just hasn't been as attractive and we're more attracted to the short-term builder tape stuff. In addition on ResiBuilt, it's now been about six months since the integration. They're out in the market looking for new opportunities for us. As Dallas said earlier, we're evaluating some things as we speak. We're not really ready to sort of talk about where we are in that process, but I think generally speaking, we've seen some great opportunities. You know, their market presence, as you probably know and we've discussed previously, is in Georgia, North Carolina, and Florida. I think we've seen some interesting opportunities that we're evaluating in the Carolinas and Atlanta.

And, you know, when we look at these investments with ResiBuilt, you know, we would be doing them both for ourselves and for our joint venture partners of which we have two today and they are in constant dialogue with us on opportunities so we're still looking at opportunities evaluating it and we're trying to figure out what makes most sense thanks jesse thank you your next question comes from the line of bridge high tower with barclays please go ahead hey good morning everybody um thanks for all the details so far back to sort of the um the fallout or the pro forma coming out of road to housing, you've got a lot of these sort of in-betweener, you know, more than the 350 threshold, but, you know, people that don't own tens of thousands of homes along the scale of invitation and the largest players in the sector. So just, you know, broadly speaking, what's your outlook for those in-betweeners and, you know, in terms of competition, you know, lacking the scale that you do operationally, you know, as it's been referenced, you know, does it eventually become more of a consolidation opportunity, in your opinion? Just what are your general thoughts there?

Yeah, Rich, Dallas here. Look, generally, we line up with what you said there at the very end, like we just believe there'll be, you know, sort of an evolution here where you'll see more consolidation. And particularly, I think you'll see a lot more of it around BTR. BTR had sort of a healthy pipeline of new entrants and capital formation kind of going into it pre the Road to Housing Act. I think, you know, we mentioned it in our remarks, like it definitely froze capital. And I don't want to give the impression that capital is thawed, but it's starting to poke its eyes up and sort of say, okay, how can we participate in this sector? How could we be, you know, meaningfully committed to creating new supply, which all lines up with our business plan of what we laid out in November at our investor day. Like We definitely want to be, if not the largest, the best operator of built-to-rent communities in the country. That's definitely a goal of ours. We now, I think, between what we operate and own and NJVs are probably getting close to almost 100 communities. We have, you know, expertise here in a similar way that we're doing it on the scattered side. So I think, you know, as these smaller operators, these small portfolios, smaller pools of capital are looking for sort of a way to either enhance returns through third-party management or look for an exit partner, I think Invitation Homes could fit that bill nicely. It'll still come down to cost of capital and where we think our cost of capital is. Scott talked about being active with JVs and in partnerships. That's easier for us in this environment right now. It requires less out-of-pocket costs, and we make actually a better ROI for our shareholders. when you consider the fees and the structures that are in place in those agreements. I think as it relates to the balance sheet, we'll weigh it out relative to share of purchase and other things that we're looking at. The lending business has been really a creative. We're pleased with what that's doing. It's also a conduit for new activity for the company, both in the build-to-rent space and in the 3PM sort of what I would say ecosphere. And so Scott and the team are doing a really good job of just balancing it. I think if there's anything we want people to take away from the call is our approach on capital allocation, how we think about growth, the word is balance, like just having really sophisticated balance and how we think about both deploying capital, whether it was through M&A or growth in lending or in share repurchase. We're just going to be really disciplined capital allocators. And I think, you know, I think the streets sort of respected what we've done over the last six, seven, eight months. We've been smart about when to do it and why. And our approach and our conversations, both in our management investment committees and with our board, will continue to be the same.

Thank you. Your next question comes from Jade Romani with KBW. Please go ahead.

Hi. Thanks for taking the question. This is Jason Satchel. I'm from Jade. So just out of curiosity, how much of the new lease rate growth do you think is seasonal versus improvement in underlying conditions? Because the typical cadence is for there to be an uplift from 1Q to 2Q. Thanks.

Yeah, hey, great question. You know, our perspective is that we are seeing improving market conditions. Obviously, we know that there's a degree of seasonality to new lease growth, and we talked about that at investor conferences and on past calls. But if you look at the supply data, again, the unique listings in each market of four at least properties that numbers coming down and and remember pricing is a direct reflection of supply and demand demand remaining healthy supply coming down uh so we believe that the fundamentals are are actually in our favor right now again we're cautiously optimistic about um how the rest of the year proceeds but again it's uh it is panning out as we expected um and as i mentioned earlier. We're liking the setup for 2027.

Thank you. We do have a follow-up question. I'm from Amy Brobent with UBS East Gohead.

Hi, thanks for the follow-up. Following the resolution on the road to housing, do you think that your scatter site infill portfolio becomes relatively more valuable given that it can't really be replicated at this point? And if so, does that change your view on capital recycling from those scatter site homes?

Look, I think our view on all of the grandfathered assets as it relates to the new legislation obviously have sort of a premium valuation tied to it in the sense that you're an operator operating those assets. I wouldn't say it's absolute in terms of how you think about your asset management strategies, what you want to sell versus what you want to hold, what you want to reinvest in, but there certainly is value to it. I think it's smart to recognize that, you know, there are a number of operators that are going to have a grandfathered sort of edge, right, to the portfolios. And look, taking another step back, you know, the bill certainly, in our understanding, allows for growth in a scattered sense, so long as you're doing it with builders going forward, and it's new product or newer product, as it's called in the bill. Now, there's still rulemaking and things like that. But what Scott's doing right now in participating in these communities with a number of both, you know, private, regional, and public builders, is another way that we'll enhance our scattered footprint. We're huge believers in the scattered footprint thesis in terms of both how it works for the families and the residents that live there. They love being in communities where their neighbors are homeowners and their stability and kids are growing up in similar neighborhoods with other families. And we also like it from an operational perspective because it's part of our edge. We're really good at operating a scattered site.

And so I think both the value of our legacy portfolio portfolios we'll look at in the future and how we will design our aggregation of capital and how we will invest capital you know in the foreseeable future scatter will be a large part of it thank you our last question comes from brad heffern with rbc please go ahead hey yeah thanks appreciate the follow-up um can you talk about on resi bill what sort of noi we can expect that to generate looks like it was about 12 million in the first half i'm sure it'll bounce around just given the nature of the business, but is that a good run rate or is there a different way we should think about it as it potentially transitions to more development specifically for invitation?

Yeah, I mean, it's a good question. I think it's a little early to answer. As I mentioned, you know, earlier in some of my Q&A responses, you know, the disruption in the market, sort of the chilling effect on capital formation that we saw for about, five of the first six months of the year is going to cause us to have to overcome a little bit of a gap in terms of what we expected to come off ResiBuilt. As we look to the future, look, to be clear, we view that as a strategic acquisition that provides us a lever to continue to grow via a channel and a capability that we didn't possess previously. So I'm not prepared to say what I think the earnings contribution may be over time, but I would say that we are really excited about what we're seeing. Fee building is going to continue to be a big part of our strategy going forward. That is a very accretive, profitable business, and the ResiBuilt team is exceptionally good at that. And then, as Dallas mentioned earlier, we are looking at more opportunities. Scott's seeing more things with the ResiBuilt team that, you know, may eventually make sense to do either on balance sheet or with joint venture partners. But our expectation is that, you know, this is going to be a growth engine for our business over time and distance.

Thank you. And that concludes our question and answer session. I would like to hand it back to the president and CEO, Dallas Tanner, for closing remarks.

We want to thank everyone for participating today. We look forward to seeing everybody this fall. Thank you.

Thank you, presenters and ladies and gentlemen. This concludes today's conference call. Thank you all for joining. You may now...