Invitation Homes Inc 10-Q for FY2025 Q1
Invitation Homes Inc. (INVH)
10-Q
2025-05-01
For: 2025-03-31
View Original
Added on
April 04, 2026
About this 10-Q
Invitation Homes Inc filed this 10-Q on May 1, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $674.48M
- up 4.4% from $646.04M a year earlier
- Net income
- $165.75M
- up 16.4% from net income of $142.35M a year earlier
- Diluted EPS
- $0.27
- up 17.4% from $0.23 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FORM | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the quarterly period ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the transition period from | to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commission File Number | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Exact name of registrant as specified in its charter) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Registrant’s telephone number, including area code) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
☑ | No | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
☑ | No | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
☑ | Accelerated Filer | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emerging Growth Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yes | ☐ | No | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of April 30, 2025, there were 612,949,348 shares of common stock, par value $0.01 per share, outstanding.
INVITATION HOMES INC.
| Page | |||||||||||
PART I — Financial Information | |||||||||||
| Item | 1. | ||||||||||
| Item | 2. | ||||||||||
| Item | 3. | ||||||||||
| Item | 4. | ||||||||||
PART II — Other Information | |||||||||||
| Item | 1. | ||||||||||
| Item | 1A. | ||||||||||
| Item | 2. | ||||||||||
| Item | 3. | ||||||||||
| Item | 4. | ||||||||||
| Item | 5. | Other Information | |||||||||
| Item | 6. | ||||||||||
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties that may impact our financial condition, results of operations, cash flows, business, associates, and residents, including, among others, risks inherent to the single-family rental industry and our business model, macroeconomic factors beyond our control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association (“HOA”) fees, and insurance costs, poor resident selection and defaults and non-renewals by our residents, our dependence on third parties for key services, risks related to the evaluation of properties, performance of our information technology systems, development and use of artificial intelligence, risks related to our indebtedness, risks related to the potential negative impact of fluctuating global and United States economic conditions (including inflation), uncertainty in financial markets (including as a result of events affecting financial institutions), geopolitical tensions, natural disasters, climate change, and public health crises. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to, those described under Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report on Form 10-K”) as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form 10-Q, in the Annual Report on Form 10-K, and in our other periodic filings. The forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.
3
DEFINED TERMS
Invitation Homes Inc. (“INVH”), a real estate investment trust (“REIT”), conducts its operations through Invitation Homes Operating Partnership LP (“INVH LP”). Through THR Property Management L.P., a wholly owned subsidiary of INVH LP, and its wholly owned subsidiaries (collectively, the “Manager”), we provide all management and other administrative services with respect to the properties we own. The Manager also provides professional property and asset management services to portfolio owners of single-family homes for lease, including our investments in unconsolidated joint ventures. Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to “Invitation Homes,” the “Company,” “we,” “our,” and “us” refer to INVH and its consolidated subsidiaries.
In this Quarterly Report on Form 10-Q:
•“average monthly rent” represents average monthly rental income per home for occupied properties in an identified population of homes over the measurement period and reflects the impact of non-service rent concessions and contractual rent increases amortized over the life of the related lease. We believe average monthly rent reflects pricing trends that significantly impact rental revenues over time, making average monthly rent useful to management and external stakeholders as a means of evaluating changes in rental revenues across periods;
•“average occupancy” for an identified population of homes represents (i) the total number of days that the homes in such population were occupied during the measurement period, divided by (ii) the total number of days that the homes in such population were owned during the measurement period. We believe average occupancy significantly impacts rental revenues in a given period, making comparisons of average occupancy across different periods helpful to management and external stakeholders in evaluating changes in rental revenues across periods;
•“Carolinas” includes Charlotte-Concord-Gastonia, NC-SC, Greensboro-High Point, NC, Raleigh-Cary, NC, Durham-Chapel Hill, NC, and Winston-Salem, NC;
•“core markets” refers to markets where we have meaningful scale and the ability to conduct business using our existing operating platform. Our current 16 core markets are identified on our portfolio table in Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Portfolio;”
•“days to re-resident” for an individual home represents the number of days between (i) the date the prior resident moves out of a home and (ii) the date the next resident is granted access to the same home, which is deemed to be the earlier of the next resident’s contractual lease start date and the next resident’s move-in date. Days to re-resident impacts our average occupancy and thus our rental revenues, making comparisons of days to re-resident helpful to management and external stakeholders in evaluating changes in rental revenues across periods;
•“in-fill” refers to markets, MSAs, submarkets, neighborhoods, or other geographic areas that are typified by significant population densities and low availability of land suitable for development into competitive properties, resulting in limited opportunities for new construction;
•“Metropolitan Statistical Area” or “MSA” is defined by the United States Office of Management and Budget as a region associated with at least one urbanized area that has a population of at least 50,000 and comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county or counties as measured through commuting;
•“net effective rental rate growth” for any home represents the percentage difference between the monthly rent from an expiring lease and the monthly rent from the next lease and, in each case, reflects the impact of non-service rent concessions and contractual rent increases amortized over the life of the related lease. Leases are either renewal leases, where our current resident chooses to stay for a subsequent lease term, or a new lease, where our previous resident moves out and a new resident signs a lease to occupy the same home. Net effective rental rate growth drives changes in our average monthly rent, making net effective rental rate growth useful to management and external stakeholders as a means of evaluating changes in rental revenues across periods;
•“Northern California” includes Sacramento-Roseville-Folsom, CA, San Francisco-Oakland-Berkeley, CA, Stockton, CA, Vallejo, CA, and Yuba City, CA;
4
•“PSF” means per square foot. When comparing homes or cohorts of homes, we believe PSF calculations help management and external stakeholders normalize metrics for differences in property size, enabling more meaningful comparisons based on characteristics other than property size;
•“Same Store” or “Same Store portfolio” includes, for a given reporting period, wholly owned homes that have been stabilized and seasoned, excluding homes that have been sold, homes that have been identified for sale to an owner occupant and have become vacant, homes that have been deemed inoperable or significantly impaired by casualty loss events or force majeure, homes acquired in portfolio transactions that are deemed not to have undergone renovations of sufficiently similar quality and characteristics as the existing Invitation Homes Same Store portfolio, and homes in markets that we have announced an intent to exit where we no longer operate a significant number of homes for the primary purpose of income generation. Homes are considered stabilized if they have (i) completed an initial renovation and (ii) entered into at least one post-initial renovation lease. An acquired portfolio that is both leased and deemed to be of sufficiently similar quality and characteristics as the existing Invitation Homes Same Store portfolio may be considered stabilized at the time of acquisition. Homes are considered to be seasoned once they have been stabilized for at least 15 months prior to January 1st of the year in which the Same Store portfolio was established. We believe information about the portion of our portfolio that has been fully operational for the entirety of a given reporting period and its prior year comparison period provides management and external stakeholders with meaningful information about the performance of our comparable homes across periods and about trends in our organic business;
•“Southeast United States” includes our Atlanta and Carolinas markets;
•“South Florida” includes Miami-Fort Lauderdale-Pompano Beach, FL, and Port St. Lucie, FL;
•“Southern California” includes Los Angeles-Long Beach-Anaheim, CA, Oxnard-Thousand Oaks-Ventura, CA, Riverside-San Bernardino-Ontario, CA, and San Diego-Chula Vista-Carlsbad, CA;
•“total homes” or “total portfolio” refers to the total number of homes we own, whether or not stabilized, and excludes any properties previously acquired in purchases that have been subsequently rescinded or vacated. Unless otherwise indicated, total homes or total portfolio refers to wholly owned homes and excludes homes owned in joint ventures. Additionally, unless the context otherwise requires, all measures in this Quarterly Report on Form 10-Q are presented on a total portfolio basis;
•“turnover rate” represents the number of instances that homes in an identified population become unoccupied in a given period, divided by the number of homes in such population. To the extent the measurement period shown is less than 12 months, the turnover rate may be reflected on an annualized basis. We believe turnover rate impacts average occupancy and thus our rental revenues, making comparisons of turnover rate helpful to management and external stakeholders in evaluating changes in rental revenues across periods. In addition, turnover can impact our cost to maintain homes, making changes in turnover rate useful to management and external stakeholders in evaluating changes in our property operating and maintenance expenses across periods; and
•“Western United States” includes our Southern California, Northern California, Seattle, Phoenix, Las Vegas, and Denver markets.
5
PART I
ITEM 1. FINANCIAL STATEMENTS
INVITATION HOMES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share data)
March 31, 2025 | December 31, 2024 | |||||||||||||
| (unaudited) | ||||||||||||||
| Assets: | ||||||||||||||
| Investments in single-family residential properties: | ||||||||||||||
| Land | $ | $ | ||||||||||||
| Building and improvements | ||||||||||||||
| Less: accumulated depreciation | ( | ( | ||||||||||||
| Investments in single-family residential properties, net | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Goodwill | ||||||||||||||
| Investments in unconsolidated joint ventures | ||||||||||||||
| Other assets, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||
Secured debt, net | $ | $ | ||||||||||||
| Unsecured notes, net | ||||||||||||||
| Term loan facilities, net | ||||||||||||||
| Revolving facility | ||||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||
| Resident security deposits | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||
| Equity: | ||||||||||||||
Stockholders’ equity | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
Total stockholders’ equity | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
INVITATION HOMES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share data)
(unaudited)
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||
| Rental revenues and other property income | $ | $ | ||||||||||||||||||||||||||||||
| Management fee revenues | ||||||||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||
| Property operating and maintenance | ||||||||||||||||||||||||||||||||
| Property management expense | ||||||||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||
Casualty losses, impairment, and other | ||||||||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||||||||
Losses on investments in equity and other securities, net | ( | ( | ||||||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||||||||
| Gain on sale of property, net of tax | ||||||||||||||||||||||||||||||||
| Losses from investments in unconsolidated joint ventures | ( | ( | ||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||
| Net income attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||||||||
| Net income attributable to common stockholders | ||||||||||||||||||||||||||||||||
| Net income available to participating securities | ( | ( | ||||||||||||||||||||||||||||||
| Net income available to common stockholders — basic and diluted (Note 12) | $ | $ | ||||||||||||||||||||||||||||||
| Weighted average common shares outstanding — basic | ||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding — diluted | ||||||||||||||||||||||||||||||||
| Net income per common share — basic | $ | $ | ||||||||||||||||||||||||||||||
| Net income per common share — diluted | $ | $ | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
INVITATION HOMES INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on interest rate swaps | ( | |||||||||||||||||||||||||||||||||||||||||||
Gains from interest rate swaps reclassified into earnings from accumulated other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income attributable to common stockholders | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
INVITATION HOMES INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended March 31, 2025 and 2024
(in thousands, except share and per share data)
(unaudited)
| Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders' Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Capital distributions | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents declared ($ | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock — settlement of RSUs, net of tax | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive loss | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2025 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders' Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Capital distributions | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend equivalents declared ($ | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock — settlement of RSUs, net of tax | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2024 | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
INVITATION HOMES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the Three Months Ended March 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Operating Activities: | ||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Share-based compensation expense | ||||||||||||||||||||
| Amortization of deferred financing costs | ||||||||||||||||||||
| Amortization of debt discounts | ||||||||||||||||||||
| Provisions for impairment | ||||||||||||||||||||
Losses on investments in equity and other securities, net | ||||||||||||||||||||
| Gain on sale of property, net of tax | ( | ( | ||||||||||||||||||
| Change in fair value of derivative instruments | ( | |||||||||||||||||||
Losses from investments in unconsolidated joint ventures, net of operating distributions | ||||||||||||||||||||
| Other non-cash amounts included in net income | ||||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Other assets, net | ( | ( | ||||||||||||||||||
| Accounts payable and accrued expenses | ||||||||||||||||||||
| Resident security deposits | ( | |||||||||||||||||||
| Other liabilities | ( | |||||||||||||||||||
| Net cash provided by operating activities | ||||||||||||||||||||
| Investing Activities: | ||||||||||||||||||||
| Deposits for acquisition of single-family residential properties | ||||||||||||||||||||
| Acquisition of single-family residential properties | ( | ( | ||||||||||||||||||
| Initial renovations to single-family residential properties | ( | ( | ||||||||||||||||||
| Other capital expenditures for single-family residential properties | ( | ( | ||||||||||||||||||
| Proceeds from sale of single-family residential properties | ||||||||||||||||||||
| Repayment proceeds from retained debt securities | ||||||||||||||||||||
| Investments in equity securities | ( | ( | ||||||||||||||||||
| Investments in unconsolidated joint ventures | ( | ( | ||||||||||||||||||
| Non-operating distributions from unconsolidated joint ventures | ||||||||||||||||||||
| Other investing activities | ( | ( | ||||||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||||||||
| Financing Activities: | ||||||||||||||||||||
| Payment of dividends and dividend equivalents | ( | ( | ||||||||||||||||||
| Distributions to non-controlling interests | ( | ( | ||||||||||||||||||
| Payment of taxes related to net share settlement of RSUs | ( | ( | ||||||||||||||||||
Payments on secured debt | ( | ( | ||||||||||||||||||
| Proceeds from revolving facility | ||||||||||||||||||||
| Payments on revolving facility | ( | |||||||||||||||||||
| Deferred financing costs paid | ( | |||||||||||||||||||
| Other financing activities | ( | ( | ||||||||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||||||||
10
INVITATION HOMES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)
For the Three Months Ended March 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Change in cash, cash equivalents, and restricted cash | ( | |||||||||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period (Note 4) | ||||||||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period (Note 4) | $ | $ | ||||||||||||||||||
| Supplemental cash flow disclosures: | ||||||||||||||||||||
| Interest paid, net of amounts capitalized | $ | $ | ||||||||||||||||||
| Interest capitalized as investments in single-family residential properties, net | ||||||||||||||||||||
Cash refund of income taxes | ( | ( | ||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
| Operating cash flows from operating leases | ||||||||||||||||||||
| Financing cash flows from finance leases | ||||||||||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||||||||
| Accrued renovation improvements at period end | $ | $ | ||||||||||||||||||
| Accrued residential property capital improvements at period end | ||||||||||||||||||||
| Transfer of residential property, net to other assets, net for held for sale assets | ||||||||||||||||||||
| Change in other comprehensive income (loss) from cash flow hedges | ( | |||||||||||||||||||
| ROU assets obtained in exchange for operating lease liabilities | ||||||||||||||||||||
| ROU assets obtained in exchange for finance lease liabilities | ||||||||||||||||||||
Dividends declared but not paid | ||||||||||||||||||||
11
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
The accompanying notes are an integral part of these condensed consolidated financial statements.
12
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Note 1—Organization and Formation
Invitation Homes Inc. (“INVH”) is a real estate investment trust (“REIT”) that conducts its operations through Invitation Homes Operating Partnership LP (“INVH LP”). INVH LP was formed for the purpose of owning, renovating, leasing, and operating single-family residential properties. Through THR Property Management L.P., a wholly owned subsidiary of INVH LP, and its wholly owned subsidiaries (collectively, the “Manager”), we provide all management and other administrative services with respect to the properties we own. The Manager also provides professional property and asset management services to portfolio owners of single-family homes for lease, including our investments in unconsolidated joint ventures.
On February 6, 2017, INVH completed an initial public offering (“IPO”), changed its jurisdiction of incorporation to Maryland, and amended its charter to provide for the issuance of up to 9,000,000,000 shares of common stock and 900,000,000 shares of preferred stock, in each case $0.01
On November 16, 2017, INVH and certain of its affiliates entered into a series of transactions with Starwood Waypoint Homes (“SWH”) and certain SWH affiliates which resulted in SWH and its operating partnership being merged into INVH and INVH LP, respectively, with INVH and INVH LP being the surviving entities. These transactions were accounted for as a business combination in accordance with ASC 805, Business Combinations, and INVH was designated as the accounting acquirer.
The limited partnership interests of INVH LP consist of common units and other classes of limited partnership interests that may be issued (the “OP Units”). As of March 31, 2025, INVH owns 99.7 % of the common OP Units and has the full, exclusive, and complete responsibility for and discretion over the day-to-day management and control of INVH LP.
Our organizational structure includes several wholly owned subsidiaries of INVH LP that were formed to facilitate certain of our financing arrangements (the “Borrower Entities”). These Borrower Entities are used to align the ownership of our single-family residential properties with certain of our debt instruments. Collateral for certain of our individual debt instruments may be in the form of equity interests in the Borrower Entities or in pools of single-family residential properties owned either directly by the Borrower Entities or indirectly by their wholly owned subsidiaries (see Note 7).
References to “Invitation Homes,” the “Company,” “we,” “our,” and “us” refer, collectively, to INVH, INVH LP, and the consolidated subsidiaries of INVH LP.
Note 2—Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.
These condensed consolidated financial statements include the accounts of INVH and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. In the opinion of management, all adjustments that are of a normal recurring nature considered necessary for a fair presentation of our interim financial statements have been included in these condensed consolidated financial statements. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.
13
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
We consolidate wholly owned subsidiaries and entities we are otherwise able to control in accordance with GAAP. We evaluate each investment entity that is not wholly owned to determine whether to follow the variable interest entity (“VIE”) or the voting interest entity (“VOE”) model. Once the appropriate consolidation model is identified, we then evaluate whether the entity should be consolidated. Under the VIE model, we consolidate an investment if we have control to direct the activities of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the VOE model, we consolidate an investment if (1) we control the investment through ownership of a majority voting interest if the investment is not a limited partnership or (2) we control the investment through our ability to remove the other partners in the investment, at our discretion, when the investment is a limited partnership.
Based on these evaluations, we account for each of the investments in joint ventures described in Note 5 using the equity method. Our initial investments in the joint ventures are recorded at cost, except for any such interest initially recorded at fair value in connection with a business combination. The investments in these joint ventures are subsequently adjusted for our proportionate share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. Distributions of operating profit from the joint ventures are reported as part of operating activities while distributions related to a capital transaction, such as a refinancing transaction or sale, are reported as investing activities on our condensed consolidated statements of cash flows. When events or circumstances indicate that our investments in unconsolidated joint ventures may not be recoverable, we assess the investments for and recognize other-than-temporary impairment.
Non-controlling interests represent the OP Units not owned by INVH, including any OP Units resulting from vesting and conversion of units granted in connection with certain share-based compensation awards. Non-controlling interests are presented as a separate component of equity on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, and the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 include an allocation of the net income attributable to the non-controlling interest holders. OP Units are redeemable for shares of our common stock on a one -for-one basis or, in our sole discretion, cash, and redemptions of OP Units are accounted for as a reduction in non-controlling interests with an offset to stockholders’ equity based on the pro rata number of OP Units redeemed.
Significant Risks and Uncertainties
Our financial condition and results of operations are subject to risks related to overall fluctuating global and United States economic conditions (including inflation, elevated interest rates, political dissension, and labor shortfalls), uncertainty in financial markets (including as a result of events affecting financial institutions, such as bank failures), ongoing geopolitical tensions, and a general decline in business activity and/or consumer confidence. These factors could adversely affect (i) our occupancy levels, our rental rates, and collections, (ii) our ability to acquire or dispose of properties on economically favorable terms, (iii) our access to financial markets on attractive terms, or at all, and (iv) the value of our homes and our business that could cause us to recognize impairments in value of our tangible assets or goodwill. Inflationary pressures, bank failures, and other fluctuating global and regional economic conditions, as well as geopolitical events, may also negatively impact consumer income, credit availability, interest rates, and spending, among other factors, which may adversely impact our business, financial condition, cash flows, and results of operations, including the ability of our residents to pay rent. These factors, which include labor shortages and inflationary increases in labor and material costs, have impacted and may continue to impact certain aspects of our business. In addition, consumer confidence and spending can be materially adversely affected in response to change in fiscal and monetary policy, declines in income or asset values, and other macroeconomic factors. Imposition or increase of tariffs by the United States on imports from certain countries and counter-tariffs in response could lead to increased costs and supply chain disruptions. If we are not able to navigate any such changes, they could have a material adverse effect on our business and results of operations.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These estimates are inherently subjective in nature and actual results could differ from those estimates.
14
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Reclassifications
As of December 31, 2024, we combined balances of $401,649 and $983,924 from mortgage loans, net and secured term loan, net, respectively, on the condensed consolidated balance sheet to the secured debt, net line item to conform to our current presentation. This reclassification had no effect on the total reported liabilities on the condensed consolidated balance sheet as of December 31, 2024.
We reclassified $5,799 of payments on mortgage loans for the three months ended March 31, 2024 from payments on mortgage loans on the condensed consolidated statement of cash flows to the payments on secured debt cash flow line item to conform to our current presentation. This reclassification had no effect on the total reported financing activities on the condensed consolidated statement of cash flows for the three months ended March 31, 2024.
Accounting Policies
There have been no changes to our significant accounting policies that have had a material impact on our condensed consolidated financial statements and related notes, compared to those policies disclosed in our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recently Adopted Accounting Standards
In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations (Subtopic 805-60): Joint Venture Formations, which clarifies the business combination accounting for joint venture formations. The ASU is intended to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements. The ASU also seeks to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture. The updated standard is effective for all joint venture formations with a formation date on or after January 1, 2025. Retrospective application of the amendments are permitted.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and effectiveness of income tax disclosures. The updated standard is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this ASU on our condensed consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures, which requires public business entities to provide detailed disclosures in the notes to the condensed consolidated financial statements disaggregating specific expense categories, including employee compensation, depreciation, and intangible asset amortization, as well as certain other disclosures to provide enhanced transparency into the nature and function of expenses. This new guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on our condensed consolidated financial statements and disclosures.
15
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Note 3—Investments in Single-Family Residential Properties
The following table sets forth the net carrying amount associated with our properties by component:
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Land | $ | $ | ||||||||||||
| Single-family residential property | ||||||||||||||
| Capital improvements | ||||||||||||||
| Equipment | ||||||||||||||
| Total gross investments in the properties | ||||||||||||||
| Less: accumulated depreciation | ( | ( | ||||||||||||
| Investments in single-family residential properties, net | $ | $ | ||||||||||||
As of March 31, 2025 and December 31, 2024, the carrying amount of the residential properties above includes $141,636 and $140,202 , respectively, of capitalized acquisition costs (excluding purchase price), along with $79,205 and $78,776 , respectively, of capitalized interest, $31,747 and $31,718 , respectively, of capitalized property taxes, $5,204 and $5,202 , respectively, of capitalized insurance, and $3,782 and $3,745 , respectively, capitalized homeowners’ association (“HOA”) fees.
During the three months ended March 31, 2025 and 2024, we recognized $179,063 , and $171,918 , respectively, of depreciation expense related to the components of the properties, and $4,083 , and $3,395 , respectively, of depreciation and amortization related to corporate furniture and equipment. These amounts are included in depreciation and amortization in the condensed consolidated statements of operations. Further, during the three months ended March 31, 2025 and 2024, impairments totaling $63 , and $60 , respectively, have been recognized and are included in casualty losses, impairment, and other in the condensed consolidated statements of operations. See Note 11 for additional information regarding these impairments.
Note 4—Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of such amounts shown in the condensed consolidated statements of cash flows:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ | ||||||||||||||||||||||||
Pursuant to the terms of the Secured Debt loans (as defined in Note 7), we are required to establish, maintain, and fund from time to time (generally, either monthly or at the time borrowings are funded) certain specified reserve accounts. These reserve accounts include, but are not limited to, the following types of accounts: (i) property tax reserves; (ii) insurance reserves; (iii) capital expenditure reserves; and (iv) HOA reserves. The reserve accounts associated with our Secured Debt loans are under the sole control of the loan servicer. Additionally, we hold security deposits pursuant to resident lease agreements that we are required to segregate. We also hold deposits for certain tax deferred property exchange transactions and letters of credit required by certain of our insurance policies, for which the use of each are restricted. Accordingly, amounts funded to these reserve accounts, security deposit accounts, and other restricted accounts have been classified on our condensed consolidated balance sheets as restricted cash.
The amounts funded, and to be funded, to the reserve accounts are subject to formulae included in the Secured Debt loan agreements and are to be released to us subject to certain conditions specified in the loan agreements being met. To the extent
16
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
that an event of default were to occur, the loan servicer has discretion to use such funds to either settle the applicable operating expenses to which such reserves relate or reduce the allocated loan amount associated with a residential property of ours.
The balances of our restricted cash accounts are set forth in the table below. As of March 31, 2025 and December 31, 2024, no amounts were funded to the insurance accounts as the conditions specified in the Secured Debt loan agreements that require such funding did not exist.
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Resident security deposits | $ | $ | ||||||||||||
Tax deferred property exchange deposits | ||||||||||||||
| Property taxes | ||||||||||||||
| Collections | ||||||||||||||
| Letters of credit | ||||||||||||||
| Capital expenditures | ||||||||||||||
| Special and other reserves | ||||||||||||||
| Total | $ | $ | ||||||||||||
Note 5—Investments In Unconsolidated Joint Ventures
The following table summarizes our investments in unconsolidated joint ventures, which are accounted for using the equity method model of accounting, as of March 31, 2025 and December 31, 2024:
| Number of Properties Owned | Carrying Value | |||||||||||||||||||||||||||||||
| Ownership Percentage | March 31, 2025 | December 31, 2024 | March 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
Pathway Property Company(1) | $ | $ | ||||||||||||||||||||||||||||||
2020 Rockpoint JV(1) | ||||||||||||||||||||||||||||||||
Upward America JV(2) | ||||||||||||||||||||||||||||||||
FNMA(3) | ||||||||||||||||||||||||||||||||
Pathway Operating Company(4) | N/A | N/A | ||||||||||||||||||||||||||||||
2022 Rockpoint JV(1) | ||||||||||||||||||||||||||||||||
2024 Peregrine JV(5) | N/A | N/A | ||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||
(1)Owns homes in markets within the Western United States, Southeast United States, Florida, and Texas.
(2)Owns homes in markets within the Southeast United States, Florida, Minnesota, Tennessee, and Texas.
(3)Owns homes within the Western United States.
(4)Represents an investment in an operating company that provides a technology platform and asset management services.
(5)Represents an investment in a joint venture that will invest in newly-constructed homes and communities.
Each joint venture was initially capitalized with equity investments. Certain of the joint ventures subsequently entered into financing arrangements, and we have guaranteed the funding of certain, tax, insurance, and non-conforming property reserves related to the financing of one of the joint ventures. Total remaining equity commitments for our investments in unconsolidated joint ventures are $166,950 as of March 31, 2025.
In some cases, responsibility for management and operations of the individual joint venture is vested with our joint venture partner or their affiliates. For other joint ventures, a wholly owned subsidiary of INVH LP functions as an administrative member responsible for management and operations of the individual joint venture, subject to the joint venture
17
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
partner’s approval of major decisions. Accordingly, we do not have a controlling interest in any of our joint ventures, and they are accounted for using the equity method of accounting.
We recorded net losses from these investments for the three months ended March 31, 2025 and 2024, totaling $5,218 , and $5,138 , respectively, which are included in losses from investments in unconsolidated joint ventures in the condensed consolidated statements of operations.
We earn property and/or asset management fees from each of the joint ventures (except the Pathway Operating Company investment), and these fees are related party transactions. For the three months ended March 31, 2025 and 2024, we earned $6,162 and $3,512 , respectively, of management fees from these related parties which are included in management fee revenues in the condensed consolidated statements of operations. As of March 31, 2025 and December 31, 2024, management fee receivables from our related parties totaled $2,007 and $1,952 , respectively. (See Note 6 for additional information regarding total management fee revenues.)
Note 6—Other Assets
As of March 31, 2025 and December 31, 2024, the balances in other assets, net are as follows:
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Amounts deposited and held by others | $ | $ | ||||||||||||
| Prepaid expenses | ||||||||||||||
| Rent and other receivables, net | ||||||||||||||
| Investments in equity and other securities | ||||||||||||||
| Investments in debt securities, net | ||||||||||||||
| Corporate fixed assets, net | ||||||||||||||
Held for sale assets(1) | ||||||||||||||
| Derivative instruments (Note 8) | ||||||||||||||
| ROU lease assets — operating and finance, net | ||||||||||||||
| Deferred financing costs, net | ||||||||||||||
| Other | ||||||||||||||
| Total | $ | $ | ||||||||||||
(1)As of March 31, 2025 and December 31, 2024, 187 and 237 properties, respectively, are classified as held for sale.
Rent and Other Receivables, net
We lease our properties to residents pursuant to leases that generally have an initial contractual term of at least 12 months, provide for monthly payments, and are cancelable by the resident and us under certain conditions specified in the related lease agreements. Rental revenues and other property income and the corresponding rent and other receivables are recorded net of any concessions and bad debt (including actual write-offs, credit reserves, and uncollectible amounts) for all periods presented.
Variable lease payments consist of resident reimbursements for utilities, and various other fees, including late fees and lease termination fees, among others. Variable lease payments are charged based on the terms and conditions included in the resident leases. For the three months ended March 31, 2025 and 2024, rental revenues and other property income includes $43,680 and $41,845 of variable lease payments, respectively.
18
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Future minimum rental revenues and other property income under leases on our single-family residential properties in place as of March 31, 2025 are as follows:
| Year | Lease Payments to be Received | |||||||
| Remainder of 2025 | $ | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
2029 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
Management fee revenues and the corresponding receivables are related to property and asset management services provided to portfolio owners of single-family homes for lease, including investments in our unconsolidated joint ventures (see Note 5). Our services include resident support, maintenance, marketing, and administrative functions. As of March 31, 2025 and 2024, we provided property and asset management services for 24,996 and 18,122 homes, respectively, of which 7,660 and 3,844 homes, respectively, were owned by our unconsolidated joint ventures. For the three months ended March 31, 2025 and 2024, we earned management fees totaling $21,408 and $13,942 , respectively. These revenues are included in management fee revenues in the condensed consolidated statements of operations.
Investments in Equity and Other Securities
We hold investments in equity and other securities both with and without a readily determinable fair value. Investments with a readily determinable fair value are measured at fair value, and those without a readily determinable fair value are measured at cost, less any impairment, plus or minus changes resulting from observable price changes for identical or similar investments in the same issuer. As of March 31, 2025 and December 31, 2024, the values of our investments in equity and other securities are as follows:
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Investments without a readily determinable fair value | $ | $ | ||||||||||||
| Investments with a readily determinable fair value | ||||||||||||||
| Total | $ | $ | ||||||||||||
The components of losses on investments in equity and other securities, net for the three months ended March 31, 2025 and 2024 are as follows:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||
Net unrealized losses on investments still held at the reporting date — with a readily determinable fair value | $ | ( | $ | ( | ||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Investments in Debt Securities, net
In connection with certain of our Securitizations (as defined in Note 7), we have retained and purchased certificates totaling $54,707 , net of unamortized discounts of $792 as of March 31, 2025. These investments in debt securities are classified as held to maturity investments. As of March 31, 2025, we have not recognized any credit losses with respect to these investments in debt securities, and our retained certificates are scheduled to mature in two years .
19
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Right-of-Use (“ROU”) Lease Assets — Operating and Finance, net
The following table presents supplemental information related to leases into which we have entered as a lessee as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Operating Leases | Finance Leases | Operating Leases | Finance Leases | |||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| Weighted average remaining lease term | ||||||||||||||||||||||||||
| Weighted average discount rate | ||||||||||||||||||||||||||
Deferred Financing Costs, net
In connection with the Revolving Facility (as defined in Note 7), we incurred $25,626 of financing costs, which have been deferred as other assets, net on our condensed consolidated balance sheets. We amortize deferred financing costs as interest expense on a straight-line basis over the term of the Revolving Facility and accelerate amortization if debt is retired before the maturity date, as appropriate. As of March 31, 2025 and December 31, 2024, the unamortized balances of these deferred financing costs are $22,036 and $23,579 , respectively.
Other
Other is primarily comprised of deferred costs related to property and asset management contracts that are being amortized over the estimated lives of the underlying contracts and other deferred costs, including those that will be capitalized as corporate fixed assets upon deployment of the software.
Note 7—Debt
Secured Debt
The following table sets forth a summary of our secured debt as of March 31, 2025 and December 31, 2024:
Outstanding Principal Balance(1) | ||||||||||||||||||||||||||||||||||||||||||||
| Origination Date | Maturity Date | Interest Rate | March 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
IH 2017-1(2)(3) | April 28, 2017 | June 9, 2027 | $ | $ | ||||||||||||||||||||||||||||||||||||||||
IH 2019-1(4) | June 7, 2019 | June 9, 2031 | ||||||||||||||||||||||||||||||||||||||||||
Total Secured Debt | ||||||||||||||||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
(1)Outstanding principal balance is net of discounts and does not include deferred financing costs, net.
(2)IH 2017-1 is comprised of two components, and Component A benefits from the Federal National Mortgage Association’s guaranty of timely payment of principal and interest. IH1 2017-1 bears interest at a fixed rate of 4.23 % per annum, equal to the market determined pass-through rate payable on the certificates including applicable servicing fees. Interest payments are made monthly.
(3)Net of unamortized discount of $792 and $880 as of March 31, 2025 and December 31, 2024, respectively.
20
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
(4)IH 2019-1 bears interest at a fixed rate of 3.59 % per annum including applicable servicing fees for the first 11 years and for the twelfth year bears interest at a floating rate based on a spread of 147 bps over a comparable or successor rate to the one month London Interbank Offer Rate as provided for in the loan agreement, including applicable servicing fees, subject to certain adjustments as outlined in the loan agreement. Interest payments are made monthly.
IH 2017-1 and IH 2019-1 (collectively, the “Secured Debt”) are secured by first priority mortgages on the underlying properties as well as first priority pledges of the equity in the assets of the respective Borrower Entities. IH 2017-1 is further secured by a grant of security interests in all the related personal property. We utilized the proceeds from our Secured Debt to fund: (i) repayments of then-outstanding indebtedness; (ii) initial deposits into Secured Debt reserve accounts; (iii) transaction costs in connection with the Secured Debt; and (iv) general costs associated with our operations.
As of March 31, 2025 and December 31, 2024, a total of 8,897 and 8,923 homes, respectively, with a gross book value of $1,902,325 and $1,900,818 , respectively, and a net book value of $1,336,270 and $1,350,641 , respectively, are pledged pursuant to the Secured Debt. Each Borrower Entity has the right, subject to certain requirements and limitations outlined in the respective loan agreements, to substitute properties. In addition, four times after the first anniversary of the closing date, the IH 2019-1 Borrower Entity has the right, subject to certain requirements and limitations outlined in the loan agreement, to execute a special release of collateral representing up to 15 % of the then-outstanding principal balance of the loan in order to bring the loan-to-value ratio back in line with the loan’s loan-to-value ratio as of the closing date. Any such special release of collateral would not change the then-outstanding principal balance of the loan, but rather would reduce the number of single-family rental homes included in the collateral pool.
Transaction with Trust
Concurrent with the execution of the IH 2017-1 loan agreement, the respective third-party lender sold the loan it originated to an individual depositor entity, which is a wholly owned subsidiary, who subsequently transferred the loan to a securitization-specific trust entity (the “Trust”). We accounted for the transfer of IH 2017-1 as a sale under ASC 860, Transfers and Servicing, with no resulting gain or loss as the securitization was both originated by the lender and immediately transferred at the same fair market value. This transaction had no effect on our condensed consolidated financial statements other than with respect to certificates issued by the Trust (the “Certificates”) that we retained in connection with securitization or purchased at a later date.
The Trust is structured as a pass-through entity that receives interest payments from the securitization and distributes those payments to the holders of the Certificates. The assets held by the Trust are restricted and can only be used to fulfill the obligations of that entity. The obligations of the Trust do not have any recourse to the general credit of any entities in these condensed consolidated financial statements. We have evaluated our interests in certain certificates of the Trust held by us and determined that they do not create a more than insignificant variable interest in the Trust.
As the Trust made Certificates available for sale to both domestic and foreign investors, sponsors of the IH 2017-1 loan are required to retain a portion of the risk that represents a material net economic interest in the loan pursuant to Regulation RR (the “Risk Retention Rules”) under the Securities Exchange Act of 1934, as amended. As loan sponsors, we are thus required to retain a portion of the credit risk that represents not less than 5 % of the aggregate fair value of the loan as of the closing date. Accordingly, we have retained the restricted Class B Certificates issued by IH 2017-1, which bear a stated annual interest rate of 4.23 % (including applicable servicing fees), that were made available exclusively to INVH LP to comply with the Risk Retention Rules.
The retained certificates, net of discount, total $54,707 and $54,619 as of March 31, 2025 and December 31, 2024, respectively, and are classified as held to maturity investments and recorded in other assets, net on the condensed consolidated balance sheets (see Note 6).
21
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Loan Covenants
The general terms that apply to the Secured Debt loan agreements require each Borrower Entity to maintain compliance with certain affirmative and negative covenants. Affirmative covenants include each Borrower Entity’s, and certain of their respective affiliates’, compliance with (i) licensing, permitting, and legal requirements specified in the Secured Debt loan agreements, (ii) organizational requirements of the jurisdictions in which they are organized, (iii) federal and state tax laws, and (iv) books and records requirements specified in the respective Secured Debt loan agreements. Negative covenants include each Borrower Entity’s, and certain of their affiliates’, compliance with limitations surrounding (i) the amount of each Borrower Entity’s indebtedness and the nature of their investments, (ii) the execution of transactions with affiliates, (iii) the Manager, (iv) the nature of each Borrower Entity’s business activities, and (v) the required maintenance of specified cash reserves.
Prepayments
Prepayments of Secured Debt are generally not permitted under the terms of the respective loan agreements unless such prepayments are made pursuant to the voluntary election or mandatory provisions specified in such agreements. The specified mandatory provisions become effective to the extent that a property becomes characterized as a disqualified property, a property is sold, and/or upon the occurrence of a condemnation or casualty event associated with a property. To the extent either a voluntary election is made, or a mandatory prepayment condition exists, in addition to paying all interest and principal, we must also pay certain breakage costs as determined by the loan servicer and a yield maintenance premium if prepayment occurs before specified dates. For IH 2017-1 and IH 2019-1, prepayments on or before December 2026 or June 2030, respectively, will require a yield maintenance premium. For the three months ended March 31, 2025 and 2024, we made voluntary and mandatory prepayments of $2,787 , and $5,799 , respectively, under the terms of the loan agreements.
Unsecured Notes
Our unsecured notes are issued in connection with either an underwritten public offering pursuant to our shelf registration statement or in connection with a private placement transaction with certain institutional investors (collectively, the “Unsecured Notes”). Our current shelf registration statement automatically became effective upon filing with the SEC in June 2024 and expires in June 2027. We utilize proceeds from the Unsecured Notes to fund: (i) repayments of then-outstanding indebtedness, including the Securitizations; (ii) closing costs in connection with the Unsecured Notes; and (iii) general costs associated with our operations and other corporate purposes, including acquisitions. Interest on the Unsecured Notes is payable semi-annually in arrears.
The following table sets forth a summary of our Unsecured Notes as of March 31, 2025 and December 31, 2024:
Interest Rate(1) | March 31, 2025 | December 31, 2024 | ||||||||||||||||||
Total Unsecured Notes, net(2) | $ | $ | ||||||||||||||||||
Deferred financing costs, net | ( | ( | ||||||||||||||||||
Total | $ | $ | ||||||||||||||||||
(1)Represents the range of contractual rates in place as of March 31, 2025.
(2)Net of unamortized discount of $22,763 and $23,456 as of March 31, 2025 and December 31, 2024, respectively. Maturity dates for the Unsecured Notes range from May 2028 through May 2036 (see “Debt Maturities Schedule” for additional information).
Debt Issuances
During the three months ended March 31, 2025 and 2024, no
Prepayments
The Unsecured Notes are redeemable in whole at any time or in part from time to time, at our option, at a redemption price equal to (i) 100 % of the principal amount to be redeemed plus accrued and unpaid interest and (ii) a make-whole
22
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
premium calculated in accordance with the respective loan agreements if the redemption occurs in certain amounts or in certain periods that range from one to three months prior to the maturity date. The privately placed Unsecured Notes require any prepayment to be an amount not less than 5 % of the aggregate principal amount then outstanding.
Guarantees
The Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, by INVH and two of its wholly owned subsidiaries, the General Partner, and IH Merger Sub, LLC (“IH Merger Sub”).
Loan Covenants
The Unsecured Notes issued publicly under our registration statement contain customary covenants, including, among others, limitations on the incurrence of debt; and they include the following financial covenants related to the incurrence of debt: (i) an aggregate debt test; (ii) a debt service test; (iii) a maintenance of total unencumbered assets; and (iv) a secured debt test.
The privately placed Unsecured Notes contain customary covenants, including, among others, limitations on distributions, fundamental changes, and transactions with affiliates; and they include the following financial covenants, subject to certain qualifications: (i) a maximum total leverage ratio; (ii) a maximum secured leverage ratio; (iii) a maximum unencumbered leverage ratio; (iv) a minimum fixed charge coverage ratio; and (v) a minimum unsecured interest coverage ratio.
The Unsecured Notes contain customary events of default (subject in certain cases to specified cure periods), the occurrence of which would allow the holders of notes to take various actions, including the acceleration of amounts due under the Unsecured Notes.
Term Loan Facilities and Revolving Facility
On September 9, 2024, we entered into the Second Amended and Restated Revolving Credit and Term Loan Agreement with a syndicate of banks, financial institutions, and institutional lenders for a new credit facility (the “Credit Facility”). The Credit Facility provides $3,500,000 of borrowing capacity and consists of a $1,750,000 revolving facility (the “Revolving Facility”) and a $1,750,000 term loan facility (the “2024 Term Loan Facility”), both of which mature on September 9, 2028, with two six month extension options available. The Revolving Facility also includes borrowing capacity for letters of credit. The Credit Facility provides us with the option to enter into additional incremental credit facilities (including an uncommitted incremental facility that provides us with the option to increase the size of the Revolving Facility and/or the 2024 Term Loan Facility such that the aggregate amount does not exceed $4,000,000 at any time), subject to certain limitations.
The Credit Facility replaced a credit facility that consisted of a $1,000,000 revolving credit facility (the “2020 Revolving Facility”) and a $2,500,000 term loan facility (the “2020 Term Loan Facility,” and together with the 2020 Revolving Facility, the “2020 Credit Facility”). The terms and conditions of the Credit Facility are consistent with those of the 2020 Credit Facility except as otherwise noted below.
Proceeds from the 2024 Term Loan Facility, a $750,000 borrowing on the Revolving Facility on the date of effectiveness of the Credit Facility, and excess cash on hand were used to fully repay the 2020 Term Loan Facility and to pay costs associated with the transaction. Future proceeds from the Revolving Facility are expected to be used for general corporate purposes.
23
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
On June 22, 2022, we entered into a Term Loan Agreement with a syndicate of banks for new senior unsecured term loans (as amended on September 9, 2024 and April 28, 2025 (see below), the “2022 Term Loan Facility,” and together with the 2024 Term Loan Facility and the 2020 Term Loan Facility, the “Term Loan Facilities”). The 2022 Term Loan Facility provided $725,000 of borrowing capacity, consisting of a $150,000 initial term loan (the “Initial Term Loan”) and delayed draw term loans totaling $575,000 (the “Delayed Draw Term Loans”) which were fully drawn on December 8, 2022. The Initial Term Loan and the Delayed Draw Term Loans (together, the “2022 Term Loans”) originally matured on June 22, 2029. The 2022 Term Loan Facility also includes an accordion feature providing the option to increase the size of the 2022 Term Loans or enter into additional incremental 2022 Term Loans, such that the aggregate amount of all 2022 Term Loans does not exceed $950,000 at any time, subject to certain limitations. On April 28, 2025, we entered into an amendment to the 2022 Term Loan Facility that (1) amends the initial maturity date from June 22, 2029 to April 28, 2028, with two , one year extension options at our election, provided we are in compliance with the loan agreement and pay a 12.5 bps extension fee and (2) adjusts the margin applicable to borrowings as more fully described below (see Note 16).
The following table sets forth a summary of the outstanding principal amounts under the Term Loan Facilities and the Revolving Facility, as of March 31, 2025 and December 31, 2024:
| Maturity Date | Interest Rate | March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
2024 Term Loan Facility(1)(2) | September 9, 2028 | $ | $ | |||||||||||||||||||||||
2022 Term Loan Facility(3)(4) | June 22, 2029 | |||||||||||||||||||||||||
| Total Term Loan Facilities | ||||||||||||||||||||||||||
| Less: deferred financing costs, net | ( | ( | ||||||||||||||||||||||||
| Term Loan Facilities, net | $ | $ | ||||||||||||||||||||||||
Revolving Facility(1)(2)(5) | September 9, 2028 | $ | $ | |||||||||||||||||||||||
(1)Interest rates for the 2024 Term Loan Facility and the Revolving Facility are based on the weighted average spread over a published forward-looking Secured Overnight Financing Rate (“SOFR”) for the interest period relevant to such borrower (“Term SOFR”) adjusted for a 0.10 % credit spread adjustment, plus an applicable margin. As of March 31, 2025, the applicable margins were 0.85 % and 0.78 % for the 2024 Term Loan Facility and the Revolving Facility, respectively, and Term SOFR was 4.32 %.
(2)If we exercise the two six month extension options, the maturity date will be September 9, 2029.
(3)Interest rate for the 2022 Term Loan Facility is based on Term SOFR adjusted for a 0.10 % credit spread adjustment, plus the applicable margin. As of March 31, 2025, the applicable margin was 1.15 % and Term SOFR was 4.32 %.
(4)On April 28, 2025, we entered into an amendment to the 2022 Term Loan Facility that (1) amends the initial maturity date from June 22, 2029 to April 28, 2028, with two , one year extension options at our election, provided we are in compliance with the loan agreement and pay a 12.5 bps extension fee and (2) adjusts the margin applicable to borrowings (see Note 16).
(5)As of March 31, 2025, $1,280,000 of our Revolving Facility is undrawn, and there are no restrictions on our ability to draw funds thereunder provided we remain in compliance with all covenants.
Interest Rate and Fees
Borrowings under the Credit Facility bear interest, at our option, at a rate equal to a margin over either (a) Term SOFR for the interest period relevant to such borrowing, (b) a daily SOFR rate calculated without considering accrued interest, or (c) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 0.50 %, (3) the Term SOFR rate that would be payable on such day for a Term SOFR loan with a one-month interest period plus 1.00 %, and (4) 1.00 %.
24
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
As a result of an April 18, 2023 amendment to the 2020 Credit Facility, borrowings thereunder bore interest, at our option, at a rate equal to (a) a Term SOFR rate determined by reference to the forward-looking SOFR rate published by Reuters (or a comparable or successor rate as provided for in our loan agreement) for the interest period relevant to such borrowing plus 0.10 % credit spread adjustment or (b) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 0.50 %, (3) the Term SOFR rate that would be payable on such day for a Term SOFR rate loan with a one month interest period plus 1.00 %, and (4) 1.00 %.
Borrowings under the 2022 Term Loan Facility bear interest, at our option, at a rate equal to a margin over either (a) Term SOFR adjusted for an applicable credit spread adjustment (“Adjusted SOFR”) for the interest period relevant to such borrowing or (b) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 0.50 %, and (3) Adjusted SOFR for a one month interest period plus 1.00 %.
The margins for the Term Loan Facilities, the Revolving Facility, and the 2020 Revolving Facility are as follows:
| Base Rate Loans | Adjusted SOFR Rate Loans | |||||||||||||||||||||||||||||||||||||
| 2024 Term Loan Facility | — | — | ||||||||||||||||||||||||||||||||||||
| 2020 Term Loan Facility | — | — | ||||||||||||||||||||||||||||||||||||
| 2022 Term Loan Facility | — | — | ||||||||||||||||||||||||||||||||||||
2022 Term Loan Facility, as amended (see Note 16) | — | — | ||||||||||||||||||||||||||||||||||||
| Revolving Facility | — | — | ||||||||||||||||||||||||||||||||||||
| 2020 Revolving Facility | — | — | ||||||||||||||||||||||||||||||||||||
In addition to paying interest on outstanding principal, we are required to pay certain facility and unused commitment fees. Under the Credit Facility, we are required to pay a facility fee ranging from 0.10 % to 0.30 %. We are also required to pay customary letter of credit fees.
Prepayments and Amortization
No principal reductions are required under the Credit Facility or the 2022 Term Loan Facility. We are permitted to voluntarily repay amounts outstanding under the 2024 Term Loan Facility at any time without premium or penalty, subject to certain minimum amounts and the payment of customary “breakage” costs with respect to Term SOFR loans. After June 22, 2024, we are also permitted to voluntarily repay amounts outstanding under the 2022 Term Loan Facility without premium or penalty. Once repaid, no further borrowings will be permitted under the Term Loan Facilities.
Loan Covenants
The Credit Facility and the 2022 Term Loan Facility contain certain customary affirmative and negative covenants and events of default. Such covenants will, among other things, restrict, subject to certain exceptions, our ability and that of our subsidiaries to (i) engage in certain mergers, consolidations, or liquidations, (ii) sell, lease, or transfer all or substantially all of our respective assets, (iii) engage in certain transactions with affiliates, (iv) make changes to our fiscal year, (v) make changes in the nature of our business and our subsidiaries, and (vi) enter into certain burdensome agreements.
The Credit Facility and the 2022 Term Loan Facility also require us, on a consolidated basis with our subsidiaries, to maintain a (i) maximum total leverage ratio, (ii) maximum secured leverage ratio, (iii) maximum unencumbered leverage ratio, (iv) minimum fixed charge coverage ratio, and (v) minimum unsecured interest coverage ratio. If an event of default occurs, the lenders under the Credit Facility and the 2022 Term Loan Facility are entitled to take various actions, including the acceleration of amounts due thereunder. On September 9, 2024, we amended the 2022 Term Loan Facility to change the definition of “Total Asset Value” to conform with the new Credit Facility and to remove the “Maximum Secured Leverage Ratio” financial covenant.
Guarantees
The obligations under the Credit Facility and the 2022 Term Loan Facility are guaranteed on a joint and several basis by INVH and two of its wholly owned subsidiaries, the General Partner, and IH Merger Sub. On September 17, 2021, the obligations under the 2020 Credit Facility became guaranteed pursuant to a similar parent guaranty agreement with INVH, the General Partner, and IH Merger Sub.
25
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Debt Maturities Schedule
The following table summarizes the contractual maturities of our debt as of March 31, 2025:
| Year | Secured Debt | Unsecured Notes | Term Loan Facilities(1)(2) | Revolving Facility(1)(3) | Total | |||||||||||||||||||||||||||||||||||||||
| 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||||||||||||||||||||
2029 | ||||||||||||||||||||||||||||||||||||||||||||
| Thereafter | ||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||
| Less: deferred financing costs, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Less: unamortized debt discount | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1)If we exercise the two six month extension options, the maturity date for the 2024 Term Loan Facility and the Revolving Facility will be September 9, 2029.
(2)On April 28, 2025, we entered into an amendment to the 2022 Term Loan Facility that (1) amends the initial maturity date from June 22, 2029 to April 28, 2028, with two , one year extension options at our election, provided we are in compliance with the loan agreement and pay a 12.5 bps extension fee and (2) adjusts the margin applicable to borrowings (see Note 16).
(3)Deferred financing costs related to the Revolving Facility are classified in other assets, net (see Note 6).
Note 8—Derivative Instruments
From time to time, we enter into derivative instruments to manage the economic risk of changes in interest rates. We do not enter into derivative transactions for speculative or trading purposes. Designated hedges are derivatives that meet the criteria for hedge accounting and that we have elected to designate as hedges. Non-designated hedges are derivatives that do not meet the criteria for hedge accounting or that we did not elect to designate as hedges.
Designated Hedges
We have entered into various interest rate swap agreements, which are used to hedge the variable cash flows associated with variable-rate interest payments. Each of our swap agreements is designated for hedge accounting purposes and is currently indexed to one month Term SOFR. Changes in the fair value of these swaps are recorded in other comprehensive income and are subsequently reclassified into earnings in the period in which the hedged forecasted transactions affect earnings.
26
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
The table below summarizes our interest rate swap instruments as of March 31, 2025:
| Agreement Date | Forward Effective Date | Maturity Date | Strike Rate | Index | Notional Amount | |||||||||||||||||||||||||||
| April 18, 2023 | April 15, 2023 | June 9, 2025 | One month Term SOFR | $ | ||||||||||||||||||||||||||||
| April 18, 2023 | April 15, 2023 | July 31, 2025 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 20, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 20, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 23, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 24, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 24, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 25, 2024 | December 31, 2024 | May 31, 2028 | One month Term SOFR | |||||||||||||||||||||||||||||
| September 25, 2024 | December 31, 2024 | May 31, 2029 | One month Term SOFR | |||||||||||||||||||||||||||||
| March 22, 2023 | July 9, 2025 | May 31, 2029 | One month Term SOFR | |||||||||||||||||||||||||||||
During the three months ended March 31, 2025 and 2024, interest rate swap instruments were used to hedge the variable cash flows associated with existing variable-rate interest payments. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next 12 months, we estimate that $17,285
Non-Designated Hedges
Historically, we have entered into and maintained interest rate cap agreements in connection with certain loan agreements. As of March 31, 2025 and December 31, 2024, we did not have any interest rate caps.
Fair Values of Derivative Instruments on the Condensed Consolidated Balance Sheets
The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024:
| Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||
| Fair Value as of | Fair Value as of | |||||||||||||||||||||||||||||||||||||
| Balance Sheet Location | March 31, 2025 | December 31, 2024 | Balance Sheet Location | March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
| Interest rate caps | Other assets | Other liabilities | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
27
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Offsetting Derivatives
We enter into master netting arrangements, which reduce risk by permitting net settlement of transactions with the same counterparty. The tables below present a gross presentation, the effects of offsetting, and a net presentation of our derivatives as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Assets/ Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets/ Liabilities Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||||||||||
| Offsetting assets: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Offsetting liabilities: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset in the Statement of Financial Position | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Assets/ Liabilities | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets/ Liabilities Presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | |||||||||||||||||||||||||||||||||
| Offsetting assets: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Offsetting liabilities: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
28
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Effect of Derivative Instruments on the Condensed Consolidated Statements of Comprehensive Income (Loss) and the Condensed Consolidated Statements of Operations
The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income (loss) and the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Net Income | Amount of Gain Reclassified from Accumulated OCI into Net Income | Total Amount of Interest Expense Presented in the Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three months Ended March 31, | For the Three Months Ended March 31, | For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives in cash flow hedging relationships: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | ( | $ | Interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Location of Loss Recognized in Net Income on Derivative | Amount of Loss Recognized in Net Income on Derivative | |||||||||||||||||||||||||
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||
| Interest rate caps | Interest expense | $ | $ | ( | ||||||||||||||||||||||
Credit-Risk-Related Contingent Features
The agreements with our derivative counterparties which govern our interest rate swap agreements contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness.
As of March 31, 2025, we were not in a net liability position with any of our derivative counterparties.
Note 9—Stockholders’ Equity
As of March 31, 2025, we have issued 612,883,911 shares of common stock. In addition, we issue OP Units from time to time which, upon vesting, are redeemable for shares of our common stock on a one -for-one basis or, in our sole discretion, cash and are reflected as non-controlling interests on our condensed consolidated balance sheets and statements of equity. As of March 31, 2025, 1,979,009 outstanding OP Units are redeemable.
During the three months ended March 31, 2025 and 2024, we issued 278,433 and 526,859 , shares of common stock, respectively.
At the Market Equity Program
On December 20, 2021, we entered into distribution agreements with a syndicate of banks (the “Agents” and the “Forward Sellers”), and on June 14, 2024, we entered into distribution agreements with additional Agents and Forward Sellers. Pursuant to these agreements, we may sell, from time to time, up to an aggregate sales price of $1,250,000 of our common stock through the Agents and the Forward Sellers (the “ATM Equity Program”). In addition to the issuance of shares of our common stock, the distribution agreements permit us to enter into separate forward sale transactions with certain forward purchasers who may borrow shares from third parties and, through affiliated Forward Sellers, offer a number
29
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
of shares of our common stock equal to the number of shares of our common stock underlying the particular forward transaction. During the three months ended March 31, 2025 and 2024, we did not 1,150,000 remains available for future offerings under the ATM Equity Program.
Dividends
To qualify as a REIT, we are required to distribute annually to our stockholders at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. We intend to pay quarterly dividends to our stockholders that in the aggregate are approximately equal to or exceed our net taxable income in the relevant year. The timing, form, and amount of distributions, if any, to our stockholders, will be at the sole discretion of our board of directors.
The following table summarizes our dividends paid from January 1, 2024 through March 31, 2025:
| Record Date | Amount per Share | Pay Date | Total Amount Paid | |||||||||||||||||||||||
| Q1-2025 | December 26, 2024 | $ | January 17, 2025 | $ | ||||||||||||||||||||||
Q4-2024 | September 26, 2024 | October 18, 2024 | ||||||||||||||||||||||||
| Q3-2024 | June 27, 2024 | July 19, 2024 | ||||||||||||||||||||||||
| Q2-2024 | March 28, 2024 | April 19, 2024 | ||||||||||||||||||||||||
| Q1-2024 | December 27, 2023 | January 19, 2024 | ||||||||||||||||||||||||
On March 13, 2025, our board of directors declared a dividend of $0.29 (actual $) per share to stockholders of record on March 27, 2025, resulting in a $177,963 dividend payment on April 17, 2025 (see Note 16). This dividend payment is accrued in other liabilities on our March 31, 2025 condensed consolidated balance sheet.
Note 10—Share-Based Compensation
Our board of directors adopted, and our stockholders approved, the Invitation Homes Inc. 2017 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) to provide a means through which to attract and retain key associates and to provide a means whereby our directors, officers, associates, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, and to align their interests with those of our stockholders. Under the Omnibus Incentive Plan, we may issue up to 16,000,000 shares of common stock.
Share-based awards in connection with our annual long term incentive plan (“LTIP”) may be issued in the form of time vesting, performance based vesting, and/or market based vesting restricted stock units (“RSUs”) or, in certain cases, partnership ownership units (“LTIP OP Units”). Historically, we also issued Outperformance Awards (defined below). Time-vesting RSUs and LTIP OP Units are participating securities for earnings (loss) per share (“EPS”) purposes, and performance and/or market based RSUs and LTIP OP Units (“PRSUs”) and Outperformance Awards are not. For a detailed discussion of share-based awards issued prior to January 1, 2025, refer to our Annual Report on Form 10-K for the year ended December 31, 2024.
Share-Based Awards
The following summarizes our share-based award activity during the three months ended March 31, 2025.
LTIP Awards:
•Annual LTIP Awards Granted: During the three months ended March 31, 2025, we granted 865,182 RSUs and 207,173 LTIP OP Units pursuant to LTIP awards. Each award includes components which vest based on time-vesting conditions, market-based vesting conditions, and/or performance-based vesting conditions, each of which is subject to continued employment through the applicable vesting date.
Time-vesting RSUs and LTIP OP Units vest in three equal annual installments based on an anniversary date of March 1st. LTIP PRSUs may be earned based on the achievement of certain measures over a three year performance
30
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
period. The number of PRSUs earned will be determined based on performance achieved during the performance period for each measure at certain threshold, target, or maximum levels and corresponding payout ranges. In general, the LTIP PRSUs are earned after the end of the performance period on the date on which the performance results are certified by our compensation and management development committee (the “Compensation Committee”).
All of the LTIP awards are subject to certain change in control and retirement eligibility provisions that may impact these vesting schedules.
•PRSU Results: During the three months ended March 31, 2025, certain PRSUs did not achieve performance criteria, resulting in the cancellation of 281,588 awards. Such awards are reflected as an increase in the number of awards forfeited/canceled in the table below.
Other Award Activity: During the three months ended March 31, 2025, we granted 73,508 employment awards in the form of time-vesting RSUs that vest in two equal installments based on the third and fourth anniversary of the grant date.
Outperformance Awards
On April 1, 2022, the Compensation Committee granted equity based awards with market based vesting conditions in the form of PRSUs (the “2022 Outperformance Awards” and together with the 2019 outperformance program, the “Outperformance Awards”). The 2022 Outperformance Awards included market based vesting conditions related to rigorous absolute and relative total shareholder returns (“TSRs”) over a three year performance period that ended March 31, 2025. The 2022 Outperformance Awards provided that upon completion of 75 % of the performance period, or June 30, 2024 (the “Interim Measurement Date”), performance achieved as of the Interim Measurement Date was calculated consistent with the award terms. To the extent performance through the Interim Measurement Date resulted in a payout if the performance period had ended on that date, a minimum of 50 % of such hypothetical payout amount is guaranteed as a minimum level payout for the full performance period, so long as certain minimum levels of relative TSR are achieved for the full performance period. As of the Interim Measurement Date, the relative TSR component of the 2022 Outperformance Awards was calculated at maximum achievement, while the absolute TSR component was below threshold. As such, overall performance as of the Interim Measurement Date resulted in a 50 % payout of the 2022 Outperformance Awards, or a guaranteed minimum payout of 25 %, provided that certain minimum levels of relative TSR were achieved for the full performance period. The final award achievement is equal to the greater of the payouts determined based on the Interim Measurement Date and actual performance through March 31, 2025.
In April 2025, upon completion of the performance period, the absolute and relative TSR components were separately calculated, and the Compensation Committee certified achievement of the absolute TSR at 0 % and the relative TSR at 50 % based on achievement as of the Interim Measurement Date, as compared to actual achievement of 42 %. The number of earned 2022 Outperformance Awards was then determined based on the earned dollar value of the awards (overall 25 % achievement) and the closing stock price on the performance certification date, resulting in 177,336 earned RSUs and 256,858 earned LTIP OP Units. Earned awards vested 50 % on the certification date in April 2025, and the remaining 50 % will vest on March 31, 2026, subject to continued employment. The estimated fair values of 2022 Outperformance Awards that fully vested at the certification date were an aggregate $8,500 . The aggregate $17,100 grant-date fair value of the 2022 Outperformance Awards that were earned was determined based on a Monte-Carlo option pricing model which estimated the probability of achievement of the TSR thresholds, and it is amortized ratably over each vesting period.
31
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Summary of Total Share-Based Awards
The following table summarizes activity related to share-based awards, other than Outperformance Awards, during the three months ended March 31, 2025:
| Time-Vesting Awards | Performance and/or Market Vesting Awards | Total Share-Based Awards(1) | ||||||||||||||||||||||||||||||||||||
| Number | Weighted Average Grant Date Fair Value (Actual $) | Number | Weighted Average Grant Date Fair Value (Actual $) | Number | Weighted Average Grant Date Fair Value (Actual $) | |||||||||||||||||||||||||||||||||
Balance, December 31, 2024 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||||||||||||||
Vested(2) | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Forfeited / canceled | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
(1)Total share-based awards excludes Outperformance Awards.
(2)Vested share-based awards issued in shares of common stock are included in basic EPS for the periods after each award’s vesting date, and vested share-based awards issued in the form LTIP OP Units are included as a component of non-controlling interest for the periods after each award’s vesting date. The estimated aggregate fair value of share-based awards that fully vested during the three months ended March 31, 2025 was $13,383 . During the three months ended March 31, 2025, 11,106 awards were accelerated pursuant to the terms and conditions of the Omnibus Incentive Plan and related award agreements.
Grant-Date Fair Values
The grant-date fair values of the time-vesting RSUs and PRSUs with performance condition vesting criteria are generally based on the closing price of our common stock on the grant date. However, the grant-date fair values for share-based awards with market condition vesting criteria are based on Monte-Carlo option pricing models. The following table summarizes the significant inputs utilized in these models for such awards granted or modified during the three months ended March 31, 2025:
| For the Three Months Ended March 31, 2025 | ||||||||||||||||||||
Expected volatility(1) | ||||||||||||||||||||
| Risk-free rate | ||||||||||||||||||||
| Expected holding period (years) | ||||||||||||||||||||
(1)Expected volatility was estimated based on the historical volatility of INVH’s realized returns and of the applicable index.
32
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Summary of Total Share-Based Compensation Expense
During the three months ended March 31, 2025 and 2024, we recognized share-based compensation expense as follows:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| General and administrative | $ | $ | ||||||||||||||||||||||||||||||
| Property management expense | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||
As of March 31, 2025, there is $60,473 of unrecognized share-based compensation expense related to non-vested share-based awards which is expected to be recognized over a weighted average period of 2.26 years.
Note 11—Fair Value Measurements
The carrying amounts of restricted cash, certain components of other assets, accounts payable and accrued expenses, resident security deposits, and certain components of other liabilities approximate fair value due to the short maturity of these amounts. Our interest rate swap agreements, interest rate cap agreements, if any, and investments in equity securities with a readily determinable fair value are recorded at fair value on a recurring basis within our condensed consolidated financial statements. The fair values of interest rate swaps, which are classified as Level 2 in the fair value hierarchy, are estimated using market values of instruments with similar attributes and maturities. See Note 8 for the details of the condensed consolidated balance sheet classification and the fair values for the interest rate swaps. The fair values of our investments in equity securities with a readily determinable fair value are classified as Level 1 in the fair value hierarchy. For additional information related to our investments in equity and other securities as of March 31, 2025 and December 31, 2024, refer to Note 6.
Financial Instrument Fair Value Disclosures
The following table displays the carrying values and fair values of financial instruments as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||||||||
Assets carried at historical cost on the condensed consolidated balance sheets: | ||||||||||||||||||||||||||||||||
Investments in debt securities(1) | Level 2 | $ | $ | $ | $ | |||||||||||||||||||||||||||
Liabilities carried at historical cost on the condensed consolidated balance sheets: | ||||||||||||||||||||||||||||||||
Unsecured Notes — public offering(2) | Level 1 | $ | $ | $ | $ | |||||||||||||||||||||||||||
IH 2017-1(3) | Level 2 | |||||||||||||||||||||||||||||||
Unsecured Notes — private placement(4) | Level 2 | |||||||||||||||||||||||||||||||
IH 2019-1(5) | Level 3 | |||||||||||||||||||||||||||||||
Term Loan Facilities(6) | Level 3 | |||||||||||||||||||||||||||||||
Revolving Facility(7) | Level 3 | |||||||||||||||||||||||||||||||
(1)The carrying values of investments in debt securities are shown net of discount.
(2)The carrying value of the Unsecured Notes — public offering includes $22,763 and $23,456 of unamortized discount and excludes $23,937 and $24,847 of deferred financing costs as of March 31, 2025 and December 31, 2024, respectively.
33
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
(3)The carrying values of IH 2017-1 includes $792 and $880 of unamortized discount and excludes $3,892 and $4,347 of deferred financing costs as of March 31, 2025 and December 31, 2024, respectively.
(4)The carrying value of the Unsecured Notes — private placement excludes $967 and $1,009 of deferred financing costs as of March 31, 2025 and December 31, 2024, respectively.
(5)The carrying value of the IH 2019-1 excludes $1,343 and $1,397 of deferred financing costs as of March 31, 2025 and December 31, 2024, respectively.
(6)The carrying values of the Term Loan Facilities exclude $27,236 and $28,959 of deferred financing costs as of March 31, 2025 and December 31, 2024, respectively.
(7)The carrying value of the Revolving Facility excludes deferred financing costs which are classified in other assets, net (see Note 6).
We value our Unsecured Notes — public offering using quoted market prices for each underlying issuance, a Level 1 price within the fair value hierarchy. The fair values of our investments in debt securities, Unsecured Notes — private placement, and the IH 2017-1 secured loan, which are classified as Level 2 in the fair value hierarchy, are estimated based on market bid prices of comparable instruments at period end.
We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. Availability of secondary market activity and consistency of pricing from third-party sources impacts our ability to classify securities as Level 2 or Level 3.
The following table displays the significant unobservable inputs used to develop our Level 3 fair value measurements as of March 31, 2025:
Quantitative Information about Level 3 Fair Value Measurement(1) | ||||||||||||||||||||||||||||||||
| Fair Value | Valuation Technique | Unobservable Input | Rate | |||||||||||||||||||||||||||||
Secured Debt — IH 2019-1 | $ | Discounted Cash Flow | Effective Rate | |||||||||||||||||||||||||||||
| Term Loan Facilities | Discounted Cash Flow | Effective Rate | — | |||||||||||||||||||||||||||||
| Revolving Facility | Discounted Cash Flow | Effective Rate | — | |||||||||||||||||||||||||||||
(1)Our Level 3 fair value instruments require interest only payments.
34
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Nonrecurring Fair Value Measurements
Our assets measured at fair value on a nonrecurring basis are those assets for which we have recorded impairments.
Single-Family Residential Properties
The single-family residential properties for which we have recorded impairments, measured at fair value on a nonrecurring basis, are summarized below:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in single-family residential properties, net held for sale (Level 3): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-impairment amount | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total impairments | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
We did not record any impairments for our investments in single-family residential properties, net held for use during the three months ended March 31, 2025 and 2024. For additional information related to our single-family residential properties as of March 31, 2025 and December 31, 2024, refer to Note 3.
Note 12—Earnings per Share
Basic and diluted EPS are calculated as follows:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders — basic and diluted | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding — basic | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Incremental shares attributed to non-vested share-based awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding — diluted | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per common share — basic | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income per common share — diluted | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incremental shares attributed to non-vested share-based awards are excluded from the computation of diluted EPS when they are anti-dilutive. Because their inclusion would have been anti-dilutive, incremental shares attributed to non-vested share-based awards are excluded from the denominator. For the three months ended March 31, 2025 and 2024, 471,310 and 113,454 incremental shares attributed to non-vested share-based awards, respectively, are excluded from the denominator because they are anti-dilutive.
For the three months ended March 31, 2025 and 2024, vested OP Units have been excluded from the computation of EPS because all income attributable to such vested OP Units has been recorded as non-controlling interest and thus excluded from net income available to common stockholders.
35
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Note 13—Income Tax
We account for income taxes under the asset and liability method. For our taxable REIT subsidiaries, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. We provide a valuation allowance, from time to time, for deferred tax assets for which we do not consider realization of such assets to be more likely than not. As of March 31, 2025 and December 31, 2024, we have not recorded any deferred tax assets and liabilities or unrecognized tax benefits. We do not anticipate a significant change in unrecognized tax benefits within the next 12 months.
Note 14—Commitments and Contingencies
Lease Commitments
The following table sets forth our fixed lease payment commitments as a lessee as of March 31, 2025, for the periods below:
| Year | Operating Leases | Finance Leases | ||||||||||||
Remainder of 2025 | $ | $ | ||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
2028 | ||||||||||||||
2029 | ||||||||||||||
| Thereafter | ||||||||||||||
| Total lease payments | ||||||||||||||
| Less: imputed interest | ( | ( | ||||||||||||
| Total lease liability | $ | $ | ||||||||||||
The components of lease expense for the three months ended March 31, 2025 and 2024 are as follows:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating lease cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed lease cost | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable lease cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total operating lease cost | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of ROU assets | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest on lease liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total finance lease cost | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New-Build Commitments
We have entered into binding purchase agreements with certain homebuilders for the purchase of 1,801 homes over the next three years . Remaining commitments under these agreements total approximately $510,000 as of March 31, 2025.
36
INVITATION HOMES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in thousands)
(unaudited)
Insurance Policies
Pursuant to the terms of certain of our loan agreements (see Note 7), laws and regulations of the jurisdictions in which our properties are located, and general business practices, we are required to procure insurance on our properties. As of March 31, 2025, there are no material contingent liabilities related to uninsured losses with respect to our properties, except as noted below.
Hurricane-Related Losses
During the third and fourth quarter of 2024, Hurricanes Milton and Helene damaged certain of our properties in Texas, Florida, Atlanta, and the Carolinas. Remaining unpaid estimated costs totaling approximately $19,600 are reflected in accounts payable and accrued expenses on our condensed consolidated balance sheet as of March 31, 2025. As of March 31, 2025, we have recorded $8,000 of estimated receivables for the portion of the related damages from Hurricanes Milton, Helene, Beryl, and Debbie that we believe will be recoverable through our property and casualty insurance policies. These policies provide coverage for wind and flood damage, as well as business interruption costs during the period of remediation and repairs, subject to specified deductibles and limits.
Legal and Other Matters
We are subject to various legal proceedings and claims that arise in the ordinary course of our business as well as congressional and regulatory inquiries and engagements. We accrue a liability when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We do not believe that the final outcome of these proceedings or matters will have a material adverse effect on our condensed consolidated financial statements.
Note 15—Segment Reporting
Our principal business is investment in and management of single-family residential properties for lease. As of March 31, 2025, we wholly own 85,261 homes for lease, jointly own 7,660 homes for lease, and provide professional third-party property and asset management services for an additional 17,336 homes, all of which are primarily located in 16 core markets across the country. We have determined that these properties are managed on a consolidated basis and represent one reportable segment.
Our Chief Executive Officer is our chief operating decision maker (“CODM”). We concluded that we have one reportable segment based on the way our CODM regularly reviews internally reported financial information to evaluate performance, make operating decisions, and allocate resources at a consolidated level. Net income as reported on our condensed consolidated statements of operations is a primary metric utilized by the CODM to analyze the performance of the segment, including budget versus actual performance, and to allocate resources. The assets of our single reportable segment are reported as total assets on our condensed consolidated balance sheets as our CODM does not use this measure to assess segment performance or to make resource allocation decisions. The accounting policies for the reportable segment are the same as those described in our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
37
Significant Segment Expenses
Our operating expenses are regularly reviewed by our CODM. All expenses are reviewed, but our CODM is regularly provided additional detail regarding the direct costs of operating our properties included in property operating and maintenance expense on our condensed consolidated statements of operations. Other expense categories such as property management expense, general and administrative, depreciation and amortization, and interest expense are included on our condensed consolidated statements of operations. The following table sets forth the significant expenses that comprise property operating and maintenance expense on our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
Fixed expenses(1) | $ | $ | ||||||||||||||||||||||||
Controllable expenses(2) | ||||||||||||||||||||||||||
| Total property operating and maintenance | $ | $ | ||||||||||||||||||||||||
(1)Fixed expenses include the following: property taxes; insurance expense; and HOA expenses.
(2)Controllable expenses include the following: repairs and maintenance; personnel, leasing, and marketing; turnover; and utilities and property administrative.
Note 16—Subsequent Events
In connection with the preparation of the accompanying condensed consolidated financial statements, we have evaluated events and transactions occurring after March 31, 2025, for potential recognition or disclosure.
Amendment of 2022 Term Loan Facility
On April 28, 2025, we entered into an amendment to the 2022 Term Loan Facility that (1) amends the initial maturity date from June 22, 2029 to April 28, 2028, with two , one year extension options at our election, provided we are in compliance with the loan agreement and pay a 12.5 bps extension fee and (2) adjusts the margin applicable to borrowings.
Dividend Payment
On March 13, 2025, our board of directors declared a dividend of $0.29 (actual $) per share to stockholders of record on March 27, 2025, resulting in a $177,963 dividend payment on April 17, 2025 (see Note 9).
38
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I. Item 1A. “Risk Factors” of our Annual Report on Form 10-K.
Capitalized terms used without definition have the meaning provided elsewhere in this Quarterly Report on Form 10-Q.
Overview
Invitation Homes is a leading owner and operator of single-family homes for lease, offering residents high-quality homes in sought-after neighborhoods across the United States. As of March 31, 2025, we wholly own 85,261 homes for lease, jointly own 7,660 homes for lease, and provide professional third-party property and asset management services for an additional 17,336 homes, all of which are primarily located in 16 core markets across the country. These homes help meet the needs of a growing share of Americans who prefer the ease of a leasing lifestyle over the burden of owning a home. We provide our residents access to updated homes with features they value, as well as close proximity to jobs and access to good schools. The continued demand for our product proves that the choice and flexibility we offer are attractive to many people.
We operate in markets with strong demand drivers, high barriers to entry, and high rent growth potential, primarily in the Western United States, Florida, and the Southeast United States. Through disciplined market and asset selection, as well as through strategic mergers and acquisitions, we designed our wholly and jointly owned portfolios to capture the operating benefits of local density as well as economies of scale that we believe cannot be readily replicated. Since our founding in 2012, we have built a proven, vertically integrated operating platform that enables us to effectively and efficiently acquire, renovate, lease, maintain, and manage both the homes we own and those we manage on behalf of others.
The portfolio of homes we own average approximately 1,880 square feet with three to four bedrooms and two bathrooms, appealing to a resident base that we believe is less transitory than a typical multifamily resident. We invest in the upfront renovation of homes in our portfolio in order to address capital needs, reduce ongoing maintenance costs, and drive resident demand.
At Invitation Homes, we are committed to creating a better way to live and to being a force for positive change, while at the same time advancing efforts that make our company more innovative and our processes more sustainable. Sustainability is an important part of our strategic business objectives and is critical to our long-term success.
Our commitment to high-touch customer service continuously enhances residents’ living experiences and provides homes where individuals and families can thrive. Each aspect of our operations — whether in our corporate headquarters or field offices located in our 16 core markets — is driven by a resident-centric model. Our associates take our values seriously and work hard every day to honor the trust our residents have placed in us to provide clean, safe, and functional homes for them and their loved ones. In turn, we focus on ensuring that our associates are fairly compensated and that we provide a culture that values respect, opportunity, and belonging. We also place a strong emphasis on the impact we have in our communities and to the environment in general, and we continue to develop programs that demonstrate those commitments. In addition, we ensure that we operate under strong, well-defined governance practices and adhere to the highest ethical standards at all times.
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Impact of Macroeconomic Trends
General economic conditions in the United States have fluctuated in recent quarters, and concerns persist regarding adverse macroeconomic conditions, such as inflation, elevated interest rates, political dissension, and labor shortfalls. Such macroeconomic factors coupled with uncertainty in financial markets, and a general decline in business activity and/or consumer confidence could adversely affect (i) our occupancy levels, our rental rates, and collections, (ii) our ability to acquire or dispose of properties on economically favorable terms, (iii) our access to financial markets on attractive terms, or at all, and (iv) the value of our homes and our business that could cause us to recognize impairments in value of our tangible assets or goodwill. Inflationary pressures, bank failures, and other fluctuating global and regional economic conditions, as well as geopolitical events, may also negatively impact consumer income, credit availability, interest rates, and spending, among other factors, which may adversely impact our business, financial condition, cash flows, and results of operations, including the ability of our residents to pay rent. These factors, which include labor shortages and inflationary increases in labor and material costs, have impacted and may continue to impact certain aspects of our business. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, declines in income or asset values, and other macroeconomic factors.
Mandated and proposed tariffs to be imposed by the United States on imports from certain countries and potential counter-tariffs in response could lead to increased costs and supply chain disruptions. If we are not able to navigate any such changes, they could have a material adverse effect on our business and results of operations, as well as on the price of our common stock.
While the degree to which we may continue to be affected by these macroeconomic challenges largely depends on the nature and duration of uncertain and unpredictable events, we believe that we are well suited to endure a shifting macroeconomic environment due to our diversification and resiliency. For further discussion of risks related to general economic conditions, see Part I. Item 1A. “Risk Factors — Risks Related to Our Business Environment and Industry — Our operating results are subject to general economic conditions and risks associated with our real estate assets” of our Annual Report on Form 10-K.
Climate Change
Potential consequences of global climate change may range from more frequent extreme weather events to governmental policy developments and shifts in consumer preferences, which have the potential individually or collectively to disrupt our business as well as negatively affect our suppliers, contractors, and residents. Experiencing or addressing the various physical, regulatory, and transition risks from climate change may significantly reduce our revenues and profitability or cause us to generate losses. We are subject to evolving laws and regulations relating to climate change, promulgated by governmental and regulatory organizations, including regulations aimed at drastically increasing reporting and governance related to climate change as well as focused on limiting greenhouse gas emissions and the implementation of “green” building codes.
Evolving laws and regulations or any changed interpretation of such laws and regulations may require us to make costly improvements to our existing properties beyond our current plans to decrease the impact of our homes on the environment, resulting in increased operating costs and compliance burdens. Incorporating greater resource efficiency into our homes, whether to comply with upgraded building codes or recommended practices given a region’s particular exposure to climate conditions or undertaken to satisfy demand from increasingly environmentally conscious residents and investors or to meet our own sustainability goals, could raise our costs to maintain our homes. In evaluating whether to implement voluntary improvements, we also consider that choosing not to enhance our homes’ resource efficiency can make them less attractive to municipalities and increase the vulnerability of residents in our communities to rising energy and water expenses and use restrictions. Choosing not to enhance our homes’ resource efficiency could make our portfolio less attractive to residents and investors. Additionally, disclosure obligations relating to sustainability matters are complex and not always consistent, making compliance difficult and uncertain. If we fail to manage transition risks effectively, our profitability and cash flow could suffer.
We intend to continue to research, evaluate, and utilize new or improved products and business practices consistent with our sustainability commitment. We believe our initiatives in this area can help put us in a better position to comply with evolving regulations directed at addressing climate change and similar environmental concerns and to meet growing resident demand for resource-efficient homes, as further discussed in Part I. Item 1. “Business — Sustainability and Corporate Responsibility” of our Annual Report on Form 10-K.
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We recognize that climate change could have a significant impact on our portfolio of homes located in a variety of markets across the United States and that an increase in the number of acute weather events, natural disasters, and other climate-related events could significantly impact our business, operations, and homes. We actively consider physical risks such as the potential for natural disasters such as hurricanes, floods, droughts, and wildfires when assessing our portfolio of homes and our business processes. Such extreme climate related events are driving changes in market dynamics and stakeholder expectations and could result in disruptions to us, our suppliers, vendors, and residents. We recognize that we must continue to adapt our policies, objectives, and processes to prepare for such events and improve the resiliency of our physical properties and our business.
Our management and the board of directors are focused on managing our business risks, including climate change-related risks. The process to identify, manage, and integrate climate-change risk is part of our comprehensive enterprise risk management program. Our board of directors, through its Audit Committee and Nominating and Corporate Governance Committee, is responsible for oversight of our management of risks related to environmental issues, climate related risks, and social issues. For more information on risks related to climate change, see Part I. Item 1A. “Risk Factors — Risks Related to Sustainability, Corporate Responsibility, and Governance — Climate change and related environmental issues, related legislative and regulatory responses to climate change, and the transition to a lower-carbon economy may adversely affect our business, — We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather, and — We are subject to increasing scrutiny from investors and others regarding our sustainability responsibilities, which could result in additional costs or risks and adversely impact our reputation, associate attraction and retention, and ability to raise capital” of our Annual Report on Form 10-K.
Other Matters
In January 2023, we received an inquiry from the staff of the SEC requesting information relating to our compliance with building codes and permitting requirements, related policies and procedures, and other matters. We are in the process of responding to, and cooperating with, this request. We cannot currently predict the timing, outcome, or scope of this inquiry.
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Our Portfolio
The following table provides summary information regarding our total and Same Store portfolios as of and for the three months ended March 31, 2025 as noted below:
| Market | Number of Homes(1) | Average Occupancy(2) | Average Monthly Rent(3) | Average Monthly Rent PSF(3) | % of Revenue(4) | ||||||||||||||||||||||||||||||
Western United States: | |||||||||||||||||||||||||||||||||||
Southern California | 7,234 | 96.1% | $3,151 | $1.85 | 11.0 | % | |||||||||||||||||||||||||||||
Northern California | 4,086 | 97.6% | 2,769 | 1.75 | 5.6 | % | |||||||||||||||||||||||||||||
Seattle | 3,944 | 97.3% | 2,923 | 1.52 | 5.7 | % | |||||||||||||||||||||||||||||
Phoenix | 9,223 | 97.1% | 2,070 | 1.22 | 9.6 | % | |||||||||||||||||||||||||||||
Las Vegas | 3,400 | 97.3% | 2,230 | 1.13 | 3.8 | % | |||||||||||||||||||||||||||||
Denver | 2,832 | 95.1% | 2,614 | 1.42 | 3.5 | % | |||||||||||||||||||||||||||||
Western United States Subtotal | 30,719 | 96.8% | 2,595 | 1.48 | 39.2 | % | |||||||||||||||||||||||||||||
Florida: | |||||||||||||||||||||||||||||||||||
South Florida | 8,138 | 96.3% | 3,086 | 1.65 | 12.0 | % | |||||||||||||||||||||||||||||
Tampa | 9,555 | 91.8% | 2,302 | 1.22 | 10.5 | % | |||||||||||||||||||||||||||||
Orlando | 6,825 | 96.7% | 2,257 | 1.20 | 7.7 | % | |||||||||||||||||||||||||||||
Jacksonville | 2,042 | 96.9% | 2,183 | 1.10 | 2.2 | % | |||||||||||||||||||||||||||||
Florida Subtotal | 26,560 | 94.7% | 2,529 | 1.34 | 32.4 | % | |||||||||||||||||||||||||||||
Southeast United States: | |||||||||||||||||||||||||||||||||||
Atlanta | 12,598 | 95.5% | 2,075 | 1.00 | 12.6 | % | |||||||||||||||||||||||||||||
Carolinas | 6,066 | 92.5% | 2,083 | 0.99 | 6.0 | % | |||||||||||||||||||||||||||||
Southeast United States Subtotal | 18,664 | 94.5% | 2,077 | 1.00 | 18.6 | % | |||||||||||||||||||||||||||||
Texas: | |||||||||||||||||||||||||||||||||||
Houston | 2,398 | 93.1% | 1,946 | 0.98 | 2.2 | % | |||||||||||||||||||||||||||||
Dallas | 3,217 | 91.9% | 2,268 | 1.10 | 3.5 | % | |||||||||||||||||||||||||||||
Texas Subtotal | 5,615 | 92.1% | 2,137 | 1.05 | 5.7 | % | |||||||||||||||||||||||||||||
Midwest United States: | |||||||||||||||||||||||||||||||||||
Chicago | 2,461 | 96.2% | 2,443 | 1.52 | 2.8 | % | |||||||||||||||||||||||||||||
Minneapolis | 1,052 | 94.0% | 2,363 | 1.21 | 1.2 | % | |||||||||||||||||||||||||||||
Midwest United States Subtotal | 3,513 | 95.6% | 2,420 | 1.42 | 4.0 | % | |||||||||||||||||||||||||||||
Other(5): | 190 | 43.7% | 2,195 | 1.17 | 0.1 | % | |||||||||||||||||||||||||||||
Total / Average | 85,261 | 95.2% | $2,424 | $1.29 | 100.0 | % | |||||||||||||||||||||||||||||
Same Store Total / Average | 78,078 | 97.2% | $2,431 | $1.30 | 93.7 | % | |||||||||||||||||||||||||||||
(1)As of March 31, 2025.
(2)Represents average occupancy for the three months ended March 31, 2025.
(3)Represents average monthly rent for the three months ended March 31, 2025.
(4)Represents the percentage of rental revenues and other property income generated in each market for the three months ended March 31, 2025.
(5)Represents homes located outside of our 16 core markets as of March 31, 2025, including 180 homes located in Nashville and 10 homes located in other markets that are generally being held for sale.
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Factors That Affect Our Results of Operations and Financial Condition
Our results of operations and financial condition are affected by numerous factors, many of which are beyond our control. See Part I. Item 1A. “Risk Factors” of our Annual Report on Form 10-K for more information regarding factors that could materially adversely affect our results of operations and financial condition. Key factors that impact our results of operations and financial condition include market fundamentals, rental rates and occupancy levels, collection rates, turnover rates and days to re-resident homes, property improvements and maintenance, property acquisitions and renovations, and financing arrangements. Sensitivity to many of these factors has been heightened as a result of current macroeconomic conditions, including elevated interest rates, political dissension, and labor shortfalls. Additionally, each of these factors may also impact the results of operations and financial condition of our joint venture investments and those of third parties for whom we perform property and asset management services, which would impact the amount of management fee revenues and income (loss) from investments in unconsolidated joint ventures that we earn.
Market Fundamentals: Our results are impacted by housing market fundamentals and supply and demand conditions in our markets, particularly in the Western United States and Florida, which represented 71.6% of our rental revenues and other property income during the three months ended March 31, 2025. We actively monitor the impact of macroeconomic conditions on market fundamentals and quickly implement changes in pricing as market fundamentals shift.
Rental Rates and Occupancy Levels: Rental rates and occupancy levels are primary drivers of rental revenues and other property income. Our rental rates and occupancy levels are affected by macroeconomic factors and local and property-level factors, including market conditions, seasonality, resident defaults, and the amount of time it takes to prepare a home for its next resident and re-lease homes when residents vacate. An important driver of rental rate growth is our ability to increase monthly rents from expiring leases, which typically have a term of one to two years.
Collection Rates: Our rental revenues and other property income are impacted by the rate at which we collect such revenues from our residents. Despite our efforts to assist residents facing financial hardships who need flexibility to fulfill their lease obligations, a portion of amounts receivable may not ultimately be collected. We may also be constrained in our ability to collect resident receivables due to local ordinances restricting residential lease compliance options. Any amounts billed to residents that have been deemed uncollectible along with our estimate of amounts that may ultimately be uncollectible decrease our rental revenues and other property income.
Turnover Rates and Days to Re-Resident: Other drivers of rental revenues and property operating and maintenance expense include the length of stay of our residents, resident turnover rates, and the number of days a home is unoccupied between residents. Our operating results are also impacted by the amount of time it takes to market and lease a property, which is a component of the number of days a home is unoccupied between residents. The period of time to market and lease a property can vary greatly and is impacted by local demand, our marketing techniques, the size of our available inventory, the ability of our suppliers and other business partners to carry out their assigned tasks and/or source labor or supply materials at ordinary levels of performance relative to the conduct of our business, and both current economic conditions and future economic outlook, including the impact of elevated interest rates, political dissension, and labor shortfalls which could adversely affect demand for our properties.
Property Improvements and Maintenance: Property improvements and maintenance impact capital expenditures, property operating and maintenance expense, and rental revenues. We actively manage our homes on a total portfolio basis to determine what capital and maintenance needs may be required and what opportunities we may have to generate additional revenues or expense savings from such expenditures. As a result of recent inflationary trends, we have experienced, and expect to continue to incur, increased costs for certain materials and services necessary to improve and maintain our homes. We continue to actively manage the impact of inflation on these costs, and we believe we are able to purchase goods and services at favorable prices compared to other purchasers due to our size and scale both nationally and locally.
Property Acquisitions and Renovations: Future growth in rental revenues and other property income may be impacted by our ability to identify and acquire homes, our pace of property acquisitions, and the time and cost required to renovate and lease a newly acquired home. Our ability to identify and acquire single-family homes that meet our investment criteria is impacted by home prices in targeted acquisition locations, the inventory of homes available for sale through our acquisition channels, and competition for our target assets. All of these factors may be negatively impacted by current inflationary trends and elevated interest rates, potentially reducing the number of homes we acquire.
The acquisition of homes involves expenditures in addition to payment of the purchase price, including payments for acquisition fees, property inspections, closing costs, title insurance, transfer taxes, recording fees, broker commissions, property taxes, and HOA fees (when applicable). Additionally, we incur costs to renovate a home to prepare it for rental. The
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scope of renovation work varies, but may include paint, flooring, carpeting, cabinetry, appliances, plumbing hardware, roof replacement, HVAC replacement, and other items required to prepare the home for rental. The time and cost involved in accessing our homes and preparing them for rental can significantly impact our financial performance. The time to renovate a newly acquired property can vary significantly among homes for several reasons, including the property’s acquisition channel, the condition of the property, whether the property was vacant when acquired, and whether there are any state or local restrictions on our ability to complete renovations as an essential business function. Additionally, the ability of our suppliers and other business partners to carry out their assigned tasks and/or source labor or supply materials at ordinary levels of performance relative to the conduct of our business have increased the time required to renovate our homes. As a result of recent inflationary trends, we have experienced, and expect to continue to incur, increased costs for certain materials and services necessary to renovate our homes. We continue to actively manage the impact of inflation on the cost of renovations, and we believe we are able to purchase goods and services at favorable prices compared to other purchasers due to our size and scale both nationally and locally.
Financing Arrangements: Financing arrangements directly impact our interest expense, our various debt instruments, and our ability to acquire and renovate homes. We have historically utilized indebtedness to fund the acquisition and renovation of new homes. Our current financing arrangements contain financial covenants and other terms and conditions, including variable interest rates in some cases, that are impacted by market conditions. Current macroeconomic conditions may continue to negatively affect volatility, availability of funds, and transaction costs (including interest rates) within financial markets. These factors may also negatively affect our ability to access financial markets as well as our business, results of operations, and financial condition. See Part I. Item 3. “Quantitative and Qualitative Disclosures about Market Risk” for further discussion regarding interest rate risk. Our future financing arrangements may not have similar terms with respect to amounts, interest rates, financial covenants, and durations.
Macroeconomics Conditions: Inflation, elevated interest rates, political dissension, and adverse global economic conditions could negatively affect our business and financial condition. Imposition of, and changing policies around, tariffs by the United States on imports from certain countries and potential counter-tariffs in response could lead to increased costs and supply chain disruptions. If we are not able to navigate any such changes, they could have a material adverse effect on our business and results of operations, as well as on the price of our common stock.
Components of Revenues and Expenses
The following is a description of the components of our revenues and expenses.
Revenues
Rental Revenues and Other Property Income
Rental revenues, net of any concessions and bad debt (including write-offs, credit reserves, and uncollectible amounts), consist of rents collected under lease agreements related to our single-family homes for lease. We enter into leases directly with our residents, and the leases typically have a term of one to two years.
Other property income is comprised of: (i) resident reimbursements for utilities, HOA fines, and other charge-backs; (ii) rent and non-refundable deposits associated with pets; (iii) revenues from value-add services such as smart homes, internet and media packages, home liability insurance, and HVAC replacement filters; and (iv) various other fees, including late fees and lease termination fees, among others.
Management Fee Revenues
Management fee revenues consist of fees from property and asset management services provided to portfolio owners of single-family homes for lease, including investments in our unconsolidated joint ventures.
Expenses
Property Operating and Maintenance
Once a property is available for its initial lease, which we refer to as “rent-ready,” we incur ongoing property-related expenses, which consist primarily of property taxes, insurance, HOA fees (when applicable), market-level personnel expenses, utility expenses, repairs and maintenance, and property administration. Prior to a property being “rent-ready,” certain of these expenses are capitalized as building and improvements. Once a property is “rent-ready,” expenditures for
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ordinary repairs and maintenance thereafter are expensed as incurred, and we capitalize expenditures that improve or extend the life of a home.
Property Management Expense
Property management expense represents personnel and other costs associated with the oversight and management of our portfolio of homes, including those for which we provide property and asset management services on behalf of others through our internal property manager.
General and Administrative
General and administrative expense represents personnel costs, professional fees, and other costs associated with our day-to-day activities. General and administrative expense may also include expenses that are of a non-recurring nature, such as severance.
Share-Based Compensation Expense
We issue share-based awards to align the interests of our associates with those of our investors, and all share-based compensation expense is recognized in our condensed consolidated statements of operations as components of general and administrative expense and property management expense.
Interest Expense
Interest expense includes interest payable on our debt instruments, payments and receipts related to our interest rate swap agreements, amortization of discounts and deferred financing costs, unrealized gains (losses) on non-designated hedging instruments, and non-cash interest expense related to our interest rate swap agreements.
Depreciation and Amortization
We recognize depreciation and amortization expense associated with our homes and other capital expenditures over the expected useful lives of the assets.
Casualty Losses, Impairment, and Other
Casualty losses, impairment, and other represents provisions for impairment when the carrying amount of our single-family residential properties is not recoverable and casualty (gains) losses, net of any insurance recoveries.
Gains (Losses) on Investments in Equity and Other Securities, net
Gains (losses) on investments in equity and other securities, net includes unrealized gains and losses resulting from mark to market adjustments and realized gains and losses recognized upon the sale or settlement of certain investments in equity securities and warrants.
Other, net
Other, net includes settlement and other costs related to certain litigation and regulatory matters, interest income, and other miscellaneous income and expenses.
Gain on Sale of Property, net of tax
Gain on sale of property, net of tax consists of net gains and losses resulting from sales of our homes.
Income (Losses) from Investments in Unconsolidated Joint Ventures
Income (losses) from investments in unconsolidated joint ventures consists of our share of net earnings and losses from investments in unconsolidated joint ventures accounted for using the equity method.
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Results of Operations
Portfolio Information
As of March 31, 2025 and 2024, we owned 85,261 and 84,445 single-family rental homes, respectively, in our total portfolio. During the three months ended March 31, 2025 and 2024, we acquired 577 and 257 homes, respectively, and sold 454 and 379 homes, respectively. During the three months ended March 31, 2025 and 2024, we owned an average of 85,189 and 84,486 single-family rental homes, respectively. As of March 31, 2025 and 2024, we provided property and asset management services for an average of 25,161 and 18,129 homes, respectively, of which an average of 7,621 and 3,847 homes, respectively, were owned by our unconsolidated joint ventures.
We believe presenting information about the portion of our total portfolio that has been fully operational for the entirety of both a given reporting period and its prior year comparison period provides investors with meaningful information about the performance of our comparable homes across periods and about trends in our organic business. To do so, we provide information regarding the performance of our Same Store portfolio.
As of March 31, 2025, our Same Store portfolio consisted of 78,078 single-family rental homes.
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
The following table sets forth a comparison of the results of operations for the three months ended March 31, 2025 and 2024:
For the Three Months Ended March 31, | |||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
| Rental revenues and other property income | $ | 653,071 | $ | 632,097 | $ | 20,974 | 3.3 | % | |||||||||||||||||||||
| Management fee revenues | 21,408 | 13,942 | 7,466 | 53.6 | % | ||||||||||||||||||||||||
| Total revenues | 674,479 | 646,039 | 28,440 | 4.4 | % | ||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||
| Property operating and maintenance | 237,449 | 230,397 | 7,052 | 3.1 | % | ||||||||||||||||||||||||
| Property management expense | 36,739 | 31,237 | 5,502 | 17.6 | % | ||||||||||||||||||||||||
| General and administrative | 29,518 | 23,448 | 6,070 | 25.9 | % | ||||||||||||||||||||||||
| Interest expense | 84,254 | 89,845 | (5,591) | (6.2) | % | ||||||||||||||||||||||||
| Depreciation and amortization | 183,146 | 175,313 | 7,833 | 4.5 | % | ||||||||||||||||||||||||
Casualty losses, impairment, and other | 4,683 | 4,137 | 546 | 13.2 | % | ||||||||||||||||||||||||
| Total expenses | 575,789 | 554,377 | 21,412 | 3.9 | % | ||||||||||||||||||||||||
Losses on investments in equity and other securities, net | (221) | (209) | (12) | (5.7) | % | ||||||||||||||||||||||||
| Other, net | 1,365 | 5,973 | (4,608) | (77.1) | % | ||||||||||||||||||||||||
| Gain on sale of property, net of tax | 71,666 | 50,498 | 21,168 | 41.9 | % | ||||||||||||||||||||||||
| Losses from investments in unconsolidated joint ventures | (5,218) | (5,138) | (80) | (1.6) | % | ||||||||||||||||||||||||
| Net income | $ | 166,282 | $ | 142,786 | $ | 23,496 | 16.5 | % | |||||||||||||||||||||
Revenues
For the three months ended March 31, 2025 and 2024, total revenues were $674.5 million and $646.0 million, respectively. Set forth below is a discussion of changes in the individual components of total revenues.
For the three months ended March 31, 2025 and 2024, total portfolio rental revenues and other property income totaled $653.1 million and $632.1 million, respectively, an increase of 3.3%, driven by an increase in average monthly rent per occupied home and a 703 home increase between periods in the average number of homes owned, partially offset by a 140 bps reduction in average occupancy.
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Average occupancy for the three months ended March 31, 2025 and 2024 for the total portfolio was 95.2% and 96.7%, respectively. Average monthly rent per occupied home for the total portfolio for the three months ended March 31, 2025 and 2024 was $2,424 and $2,358, respectively, a 2.8% increase. For our Same Store portfolio, average occupancy was 97.2% and 97.8% for the three months ended March 31, 2025 and 2024, respectively, and average monthly rent per occupied home for the three months ended March 31, 2025 and 2024 was $2,431 and $2,359, respectively, a 3.1% increase.
The annualized turnover rate for the Same Store portfolio for the three months ended March 31, 2025 and 2024 was 20.1% and 21.0%, respectively. For the Same Store portfolio, a home remained unoccupied on average for 48 and 38 days between residents for the three months ended March 31, 2025 and 2024, respectively.
To monitor prospective changes in average monthly rent per occupied home, we compare the monthly rent from an expiring lease to the monthly rent from the next lease for the same home, in each case, net of any amortized non-service concessions, to calculate net effective rental rate growth. Leases are either renewal leases, where our current resident stays for a subsequent lease term, or new leases, where our previous resident moves out and a new resident signs a lease to occupy the same home.
Renewal lease net effective rental rate growth for the total portfolio averaged 5.1% and 5.7% for the three months ended March 31, 2025 and 2024, respectively, and new lease net effective rental rate growth for the total portfolio averaged (0.2)% and 0.8% for the three months ended March 31, 2025 and 2024, respectively. For our Same Store portfolio, renewal lease net effective rental rate growth averaged 5.2% and 5.7% for the three months ended March 31, 2025 and 2024, respectively, and new lease net effective rental rate growth averaged (0.1)% and 0.7% for the three months ended March 31, 2025 and 2024, respectively.
Other property income for the three months ended March 31, 2025 increased compared to March 31, 2024, primarily due to enhanced value-add revenue programs and increased utility billbacks as new leases are entered into, among other things.
For the three months ended March 31, 2025 and 2024, management fee revenues totaled $21.4 million and $13.9 million, respectively. The 53.6% increase is primarily due to an increase in the average number of homes for which we provide property and asset management services from 18,129 homes for the three months ended March 31, 2024 to 25,161 homes for the three months ended March 31, 2025.
Expenses
For the three months ended March 31, 2025 and 2024, total expenses were $575.8 million and $554.4 million, respectively. Set forth below is a discussion of changes in the individual components of total expenses.
For the three months ended March 31, 2025, property operating and maintenance expense increased to $237.4 million from $230.4 million for the three months ended March 31, 2024. The 3.1% increase in property operating and maintenance expense is primarily attributable to a 703 home increase in the average number of homes owned between periods, as well as increases in utilities and property taxes.
Property management expense and general and administrative expense increased to $66.3 million from $54.7 million for the three months ended March 31, 2025 and 2024, respectively, primarily due to increased personnel costs related to our property and asset management platform, including costs to manage a 38.8% increase in the average number of managed homes between periods. Additionally, share-based compensation expense increased $2.3 million, and severance costs increased $2.2 million period over period.
Interest expense decreased to $84.3 million for the three months ended March 31, 2025 from $89.8 million for the three months ended March 31, 2024. The decrease in interest expense was partially due to a decrease in the balance of gross debt outstanding, partially offset by a 16 bps increase in our weighted average interest rate, in each case, as of March 31, 2025 as compared to March 31, 2024. Additionally, the amendment of certain of our interest rate swap agreements during 2024 reduced related non-cash fair value amortization by $6.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Depreciation and amortization expense increased to $183.1 million for the three months ended March 31, 2025 from $175.3 million for the three months ended March 31, 2024 due to an increase in cumulative capital expenditures and a 703 home increase in the average number of homes owned during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
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Casualty losses, impairment, and other expenses were $4.7 million and $4.1 million for the three months ended March 31, 2025 and 2024, respectively. Expense during both periods is primarily comprised of casualty and other insurance losses.
Losses on Investments in Equity and Other Securities, net
For the three months ended March 31, 2025 and 2024, losses on investments in equity securities, net remained consistent at $0.2 million and is comprised of net unrealized gains recognized on investments held as of each period end.
Other, net
Other, net decreased to $1.4 million of income for the three months ended March 31, 2025 from $6.0 million of income for the three months ended March 31, 2024, primarily due to a decrease in interest income on cash balances held between periods.
Gain on Sale of Property, net of tax
Gain on sale of property, net of tax was $71.7 million and $50.5 million for the three months ended March 31, 2025 and 2024, respectively. Both the number of homes sold and net proceeds per home sold increased from the three months ended March 31, 2024 to the three months ended March 31, 2025.
Losses from Investments in Unconsolidated Joint Ventures
Our share of losses from unconsolidated joint ventures was $5.2 million and $5.1 million for the three months ended March 31, 2025 and 2024, respectively, with no significant fluctuations between periods.
Liquidity and Capital Resources
Our liquidity and capital resources as of March 31, 2025 and December 31, 2024 include unrestricted cash and cash equivalents of $84.4 million and $174.5 million, respectively, a 51.6% decrease primarily due to a $102.8 million net decrease in outstanding indebtedness between periods.
As of March 31, 2025, $1,280.0 million of our Revolving Facility is undrawn, and there are no restrictions on our ability to draw funds thereunder provided we remain in compliance with all covenants. We have no debt reaching final maturity until June 2027.
Our ability to access capital as well as to use cash from operations to continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted, could be affected by various risks and uncertainties, including, but not limited to, the effects of general economic conditions, including inflation and interest rates, as detailed in Part I. Item 1A. “Risk Factors” of our Annual Report on Form 10-K.
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Long-Term Debt Strategy
The following table summarizes certain information about our debt obligations as of March 31, 2025 ($ in thousands):
Debt Instruments(1) | Balance (Gross of Retained Certificates and Unamortized Discounts) | Balance (Net of Retained Certificates) | Weighted Average Interest Rate(2) | Weighted Average Years to Maturity(3) | Amount Freely Prepayable (Gross) | |||||||||||||||||||||||||||
| Secured: | ||||||||||||||||||||||||||||||||
IH 2017-1(4) | $ | 989,024 | $ | 933,525 | 4.23% | 2.2 | $ | — | ||||||||||||||||||||||||
IH 2019-1(5) | 400,386 | 400,386 | 3.59% | 6.2 | — | |||||||||||||||||||||||||||
Total secured | 1,389,410 | $ | 1,333,911 | 4.04% | 3.3 | — | ||||||||||||||||||||||||||
| Unsecured: | ||||||||||||||||||||||||||||||||
2024 Term Loan Facility(6) | $ | 1,750,000 | S +85 bps | 4.4 | $ | 1,750,000 | ||||||||||||||||||||||||||
2022 Term Loan Facility(6)(7) | 725,000 | S + 115 bps | 4.2 | 725,000 | ||||||||||||||||||||||||||||
Revolving Facility(6) | 470,000 | S + 78 bps | 4.4 | 470,000 | ||||||||||||||||||||||||||||
Unsecured Notes — May 2028 | 150,000 | 2.46% | 3.2 | — | ||||||||||||||||||||||||||||
Unsecured Notes — November 2028 | 600,000 | 2.30% | 3.6 | — | ||||||||||||||||||||||||||||
| Unsecured Notes — August 2030 | 450,000 | 5.45% | 5.4 | — | ||||||||||||||||||||||||||||
Unsecured Notes — August 2031 | 650,000 | 2.00% | 6.4 | — | ||||||||||||||||||||||||||||
| Unsecured Notes — April 2032 | 600,000 | 4.15% | 7.0 | — | ||||||||||||||||||||||||||||
| Unsecured Notes — August 2033 | 350,000 | 5.50% | 8.4 | — | ||||||||||||||||||||||||||||
Unsecured Notes — January 2034 | 400,000 | 2.70% | 8.8 | — | ||||||||||||||||||||||||||||
Unsecured Notes — February 2035 | 500,000 | 4.88% | 9.8 | |||||||||||||||||||||||||||||
Unsecured Notes — May 2036 | 150,000 | 3.18% | 11.2 | — | ||||||||||||||||||||||||||||
Total unsecured(8) | 6,795,000 | 3.97% | 5.8 | 2,945,000 | ||||||||||||||||||||||||||||
Total debt(8) | 8,184,410 | 3.98% | 5.4 | $ | 2,945,000 | |||||||||||||||||||||||||||
| Unamortized discounts | (23,555) | |||||||||||||||||||||||||||||||
| Deferred financing costs, net | (57,375) | |||||||||||||||||||||||||||||||
| Total debt per balance sheet | 8,103,480 | |||||||||||||||||||||||||||||||
| Retained certificates | (55,499) | |||||||||||||||||||||||||||||||
Cash and restricted cash, excluding security deposits and letters of credit | (132,044) | |||||||||||||||||||||||||||||||
| Deferred financing costs, net | 57,375 | |||||||||||||||||||||||||||||||
| Unamortized discounts | 23,555 | |||||||||||||||||||||||||||||||
| Net debt | $ | 7,996,867 | ||||||||||||||||||||||||||||||
(1)For detailed information about and definition of each of our financing arrangements, see Part I. Item 1. “Financial Statements — Note 7 of Notes to Condensed Consolidated Financial Statements.” For information about our derivative instruments that hedge floating rate debt, see Part I. Item 1. “Financial Statements — Note 8 of Notes to Condensed Consolidated Financial Statements.”
(2)Variable interest rate loans are indexed to a Secured Overnight Financing Rate (“SOFR”) index rate determined by reference to a published forward-looking SOFR rate for the interest period relevant to such borrowing (“Term SOFR”), including any credit spread adjustments provided for in the terms of the underlying agreement (“Adjusted SOFR”), reflected as “S” in the table above.
(3)Weighted average years to maturity assumes all extension options are exercised, which are subject to certain conditions being met.
(4)IH 2017-1 bears interest at a fixed rate of 4.23% per annum, equal to the market determined pass-through rate payable on the certificates including applicable servicing fees.
(5)IH 2019-1 bears interest at a fixed rate of 3.59% per annum including applicable servicing fees for the first 11 years and for the twelfth year bears interest at a floating rate based on a spread of 147 bps over a comparable or successor rate to
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the one month London Interbank Offer Rate as provided for in the loan agreement, including applicable servicing fees, subject to certain adjustments as outlined in the loan agreement.
(6)As of March 31, 2025, interest rate is based on Term SOFR of 4.32% plus the applicable margin and a 0.10% credit spread adjustment.
(7)On April 28, 2025, we entered into an amendment to the 2022 Term Loan Facility that (1) amends the initial maturity date from June 22, 2029 to April 28, 2028, with two, one year extension options at our election, provided we are in compliance with the loan agreement and pay a 12.5 bps extension fee and (2) adjusts the margin applicable to borrowings.
(8)For unsecured debt and total debt, the weighted average interest rate is calculated based on March 31, 2025 Term SOFR of 4.32% adjusted for a 0.10% credit spread adjustment (Adjusted SOFR), as appropriate, and includes the impact of interest rate swap agreements effective as of that date.
As part of our long-term debt strategy, our goal is to maintain or improve our credit ratings, and, over time, we generally intend to be a predominantly unsecured borrower with a target net debt of approximately 5.5 to 6.0 times trailing twelve months Adjusted EBITDAre (see “— Non-GAAP Measures — EBITDA, EBITDAre, and Adjusted EBITDAre”). To facilitate our long-term debt strategy we expect to seek to, among other things, (a) refinance a significant portion of our secured debt maturing in 2027 with unsecured debt, including potential unsecured bond issuances and/or (b) repay a portion of such debt. There can be no assurance that we will be successful in implementing our long-term debt strategy, improving our credit ratings, or adhering to our targets in the short or medium term or at all, or that we will not change our strategy or targets in the future. We may from time to time fall outside of our target ranges. In addition, we cannot assure you that we will be able to access the capital and credit markets to obtain additional unsecured debt financing or that we will be able to obtain financing on terms favorable to us. For further discussion of risks related to our indebtedness, see Part I. Item 1A. “Risk Factors — Risks Related to Our Indebtedness,” including “Risk Factors — Risks Related to Our Indebtedness — We may be unable to obtain financing through the debt and equity markets, which would have a material adverse effect on our growth strategy and our financial condition and results of operations” of our Annual Report on Form 10-K.
Short-Term and Long-Term Liquidity Needs
Liquidity is a measure of our ability to meet potential cash requirements, maintain our assets, fund our operations, make dividend payments to our stockholders, and meet other general requirements of our business. Our liquidity, to a certain extent, is subject to general economic, financial, competitive, and other factors beyond our control. Our near-term liquidity requirements consist primarily of:
•acquisition of homes currently under contract, including commitments to homebuilders;
•renovation of newly-acquired homes;
•HOA fees (as applicable), property taxes, insurance premiums, and the ongoing maintenance of our homes;
•property management, general and administrative, and other entity-level commitments and expenses;
•interest expense;
•dividend payments to our stockholders; and
•required contributions to our joint ventures.
We believe our rental income, net of total expenses, will generally provide cash flow sufficient to fund operations and dividend payments on a near-term basis. Additionally, we have guaranteed the funding of certain tax, insurance, and non-conforming property reserves related to the financing of one of our joint ventures. We do not expect these guarantees to have a material current or future effect on our liquidity. See Part I. Item 1. “Financial Statements — Note 5 of Notes to Condensed Consolidated Financial Statements” for additional information about our investments in unconsolidated joint ventures.
General economic conditions in the United States have fluctuated in recent quarters, and concerns persist regarding adverse macroeconomic conditions, such as inflation, elevated interest rates, political dissension, and labor shortfalls. Fluctuating economic conditions and uncertainty in financial markets may negatively impact our operating cash flow such that we are unable to make required debt service payments, which would result in an event of default for any debt instrument under whose loan agreement such payments were not made. Specifically, the collateral within individual borrower entities may underperform, resulting in cash flow shortfalls for debt service while consolidated cash flows are sufficient to fund our operations. If an event of default occurs for our secured debt, our loan agreements provide certain remedies, including our
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ability to fund shortfalls from consolidated cash flow; and such an event of default would not result in an immediate acceleration of the loan.
Our real estate assets are illiquid in nature. A timely liquidation of assets may not be a viable source of short-term liquidity should a cash flow shortfall arise, and we may need to source liquidity from other financing sources, such as the Revolving Facility which had an undrawn balance of $1,280.0 million as of March 31, 2025.
Our long-term liquidity requirements consist primarily of funds necessary to pay for the acquisition of, and non-recurring capital expenditures for, our homes, and principal and interest payments of our indebtedness. We intend to satisfy our long-term liquidity needs through cash provided by operations, long-term secured and unsecured borrowings, the issuance of debt and equity securities, and property dispositions. As a REIT, we are required to distribute to our stockholders at least 90% of our taxable income, excluding net capital gain, on an annual basis. Therefore, as a general matter, it is unlikely that we will be able to retain substantial cash balances from our annual taxable income that could be used to meet our liquidity needs. Instead, we will need to meet these needs from external sources of capital and amounts, if any, by which our cash flow generated from operations exceeds taxable income.
Cash Flows
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 300,516 | $ | 265,585 | $ | 34,931 | 13.2 | % | ||||||||||||||||||
| Net cash used in investing activities | (114,224) | (24,896) | (89,328) | (358.8) | % | |||||||||||||||||||||
Net cash used in financing activities | (287,355) | (190,767) | (96,588) | (50.6) | % | |||||||||||||||||||||
| Change in cash, cash equivalents, and restricted cash | $ | (101,063) | $ | 49,922 | $ | (150,985) | (302.4) | % | ||||||||||||||||||
Operating Activities
Our cash flows provided by operating activities depend on numerous factors, including the occupancy level of our homes, the rental rates achieved on our leases, the collection of rent from our residents, and the amount of our operating and other expenses. Net cash provided by operating activities was $300.5 million and $265.6 million for the three months ended March 31, 2025 and 2024, respectively, an increase of 13.2%. The increase in cash provided by operating activities is primarily due to improved operational profitability, including a $28.4 million increase in total revenues and changes in operating assets and liabilities from period to period.
Investing Activities
Net cash used in investing activities consists primarily of the acquisition costs of homes, capital improvements, proceeds from property sales, and investments in unconsolidated joint ventures. Net cash used in investing activities was $114.2 million and $24.9 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $89.3 million. The increase in net cash used in investing activities resulted primarily from the combined effect of the following significant changes in cash flows during the three months ended March 31, 2025 compared to the three months ended March 31, 2024: (1) an increase in cash used for the acquisition of homes; (2) an increase in cash proceeds received from the sale of single-family homes; (3) an increase in cash used for other investing activities; and (4) an increase in cash used for investments in joint ventures. Acquisition spend increased by $80.9 million from period to period due to an increase in the number of homes acquired from 257 during the three months ended March 31, 2024 to 577 homes acquired during the three months ended March 31, 2025. Proceeds from the sale of single-family homes increased $30.7 million due to an increase in the number of homes sold from 379 during the three months ended March 31, 2024 to 454 homes sold during the three months ended March 31, 2025 and an increase in average net proceeds per home. Cash used in other investing activities increased $24.0 million from period to period primarily due to an increase in capital expenditures to repair hurricane damage to homes from 2024 storms. Cash invested in joint ventures increased $9.7 million from period to period as a result of increased contributions to certain of the joint ventures during the three months ended March 31, 2025.
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Financing Activities
Net cash used in financing activities was $287.4 million for the three months ended March 31, 2025 compared to net cash used in financing activities of $190.8 million for the three months ended March 31, 2024. The change between periods is primarily due to the following financing transactions. We made $100.0 million of net payments on the Revolving Facility during the three months ended March 31, 2025, and no such net reductions in outstanding indebtedness occurred during the three months ended March 31, 2024. We also made dividend and distribution payments totaling $178.8 million during the three months ended March 31, 2025 compared to $173.8 million during the three months ended March 31, 2024, which were funded by cash flows from operations.
Contractual Obligations
Our contractual obligations as of March 31, 2025, consist of the following:
| ($ in thousands) | Total | 2025(1) | 2026-2027 | 2028-2029 | Thereafter | |||||||||||||||||||||||||||
Secured Debt(2)(3) | $ | 1,569,864 | $ | 42,139 | $ | 1,077,908 | $ | 28,769 | $ | 421,048 | ||||||||||||||||||||||
Unsecured Notes(2)(3) | 4,851,138 | 104,333 | 278,220 | 1,007,148 | 3,461,437 | |||||||||||||||||||||||||||
Term Loan Facilities(2)(3)(4)(5) | 3,063,907 | 101,285 | 268,867 | 2,693,755 | — | |||||||||||||||||||||||||||
Revolving Facility(2)(3)(4)(5)(6) | 591,898 | 20,654 | 54,828 | 516,416 | — | |||||||||||||||||||||||||||
Derivative instruments(2)(7) | (81,759) | (18,347) | (47,118) | (16,294) | — | |||||||||||||||||||||||||||
Purchase commitments(8) | 545,017 | 378,486 | 166,531 | — | — | |||||||||||||||||||||||||||
| Operating leases | 30,947 | 3,519 | 8,432 | 6,434 | 12,562 | |||||||||||||||||||||||||||
| Finance leases | 8,854 | 2,383 | 5,709 | 762 | — | |||||||||||||||||||||||||||
| Total | $ | 10,579,866 | $ | 634,452 | $ | 1,813,377 | $ | 4,236,990 | $ | 3,895,047 | ||||||||||||||||||||||
(1)Includes estimated payments for the remaining nine months of 2025.
(2)For detailed information about each of our financing arrangements and derivative instruments see Part I. Item 1. “Financial Statements — Note 7 of Notes to Condensed Consolidated Financial Statements” and “— Note 8 of Notes to Condensed Consolidated Financial Statements.”
(3)Includes estimated interest payments through the extended maturity date, as applicable, based on the principal amount outstanding as of March 31, 2025.
(4)Interest is calculated at rates in effect as of March 31, 2025, including the indexed rate, any credit spread adjustment, and any applicable margin, and that rate is held constant until the maturity date. As of March 31, 2025, Term SOFR was 4.32%.
(5)Calculated based on the maturity date if we exercise each of the remaining extension options available, which are subject to certain conditions being met. See Part I. Item 1. “Financial Statements — Note 7 of Notes to Condensed Consolidated Financial Statements” for a description of maturity dates without consideration of extension options.
(6)Includes the related unused commitment fee, as applicable.
(7)Includes payments (receipts) related to interest rate swap obligations calculated using Term SOFR. As of March 31, 2025, Term SOFR was 4.32%.
(8)Represents commitments, net of previously funded deposits, to acquire 1,899 homes, including commitments totaling $510.0 million to acquire 1,801 homes pursuant to binding purchase agreements with certain homebuilders as of March 31, 2025.
Additionally, we have commitments, which are not reflected in the table above, to make additional capital contributions to our joint ventures. As of March 31, 2025, our remaining equity commitments to our joint ventures total $167.0 million.
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Supplemental Guarantor Information
In March 2020, the SEC adopted amendments to Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain registered securities. The amendments became effective on January 4, 2021. INVH, INVH LP, the General Partner, and IH Merger Sub, LLC (“IH Merger Sub”) have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of INVH LP, fully and unconditionally guaranteed, on a joint and several basis, by INVH, the General Partner, and/or IH Merger Sub. As a result of the amendments to Rule 3-10 of Regulation S-X, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company’s consolidated financial statements, the parent guarantee is “full and unconditional” and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of INVH LP, the General Partner, and IH Merger Sub have not been presented.
Furthermore, as permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded the summarized financial information for the INVH LP, the General Partner, and IH Merger Sub, because the combined assets, liabilities, and results of operations of INVH, INVH LP, the General Partner, and IH Merger Sub are not materially different than the corresponding amounts in our condensed consolidated financial statements, and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.
Purchase of Outstanding Debt Securities or Loans
As market conditions warrant, we may from time to time seek to purchase our outstanding debt or debt securities that we may issue in the future, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our condensed consolidated balance sheet or the incurrence of new secured or unsecured debt, including borrowings under our Credit Facility. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series. In addition, any such purchases made at prices below the “adjusted issue price” (as defined for United States federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which amounts may be material, and in related adverse tax consequences to us.
Critical Accounting Policies and Estimates
Critical accounting policies are those accounting policies that management believes are important to the portrayal of our financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We believe that our critical accounting policies pertain to our investments in single-family residential properties, including acquisition of real estate assets, related cost capitalization, provisions for impairment, and single-family residential properties held for sale. These critical policies and estimates are summarized in Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K. There were no material changes to our critical accounting policies during the three months ended March 31, 2025.
For a discussion of recently adopted accounting standards, if any, see Part I. Item 1. “Financial Statements — Note 2 of Notes to Condensed Consolidated Financial Statements.”
Segment Reporting
Our principal business is acquiring, renovating, leasing, operating, and managing single-family residential properties. Under the provisions of ASC 280, Segment Reporting, we have determined that we currently operate in one reportable segment.
Our Chief Executive Officer is our chief operating decision maker (“CODM”). We concluded that we have one reportable segment based on the way our CODM regularly reviews internally reported financial information to evaluate performance, make operating decisions, and allocate resources at a consolidated level. Net income as reported on our condensed consolidated statements of operations is a primary metric utilized by the CODM to analyze the performance of the segment, including budget versus actual performance, and to allocate resources.
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Non-GAAP Measures
EBITDA, EBITDAre, and Adjusted EBITDAre
EBITDA, EBITDAre, and Adjusted EBITDAre are supplemental, non-GAAP measures often utilized to evaluate the performance of real estate companies. We define EBITDA as net income or loss computed in accordance with GAAP before the following items: interest expense; income tax expense; depreciation and amortization; and adjustments for unconsolidated joint ventures. The National Association of Real Estate Investment Trusts (“Nareit”) recommends as a best practice that REITs that report an EBITDA performance measure also report EBITDAre. Consistent with the Nareit definition, we define EBITDAre as EBITDA, further adjusted for the following: gain on sale of property, net of tax; and impairment on depreciated real estate investments. Adjusted EBITDAre is defined as EBITDAre before the following items: share-based compensation expense; severance; casualty (gains) losses and reserves, net; (gains) losses on investments in equity securities, net; and other income and expenses. Where appropriate, EBITDA, EBITDAre, and Adjusted EBITDA are adjusted for our share of investments in unconsolidated subsidiaries.
EBITDA, EBITDAre, and Adjusted EBITDAre are used as supplemental financial performance measures by management and by external users of our financial statements, such as investors and commercial banks. Set forth below is additional detail on how management uses EBITDA, EBITDAre, and Adjusted EBITDAre as measures of performance.
Our management uses EBITDA, EBITDAre, and Adjusted EBITDAre in a number of ways to assess our condensed consolidated financial and operating performance, and we believe these measures are helpful to management and external users in identifying trends in our performance. EBITDA, EBITDAre, and Adjusted EBITDAre help management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance, while neutralizing the impact of capital structure on results. Accordingly, we believe these metrics measure our financial performance based on operational factors that management can impact in the short-term, namely our cost structure and expenses.
We believe that the presentation of EBITDA, EBITDAre, and Adjusted EBITDAre provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to EBITDA, EBITDAre, and Adjusted EBITDAre is net income or loss. EBITDA, EBITDAre, and Adjusted EBITDAre are not used as measures of our liquidity and should not be considered alternatives to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our EBITDA, EBITDAre, and Adjusted EBITDAre may not be comparable to the EBITDA, EBITDAre, and Adjusted EBITDAre of other companies due to the fact that not all companies use the same definitions of EBITDA, EBITDAre, and Adjusted EBITDAre. Accordingly, there can be no assurance that our basis for computing these non-GAAP measures is comparable with that of other companies.
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The following table presents a reconciliation of net income (as determined in accordance with GAAP) to EBITDA, EBITDAre, and Adjusted EBITDAre for each of the periods indicated:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | 165,517 | $ | 142,158 | ||||||||||||||||||||||||||||||||||
| Net income available to participating securities | 228 | 192 | ||||||||||||||||||||||||||||||||||||
| Non-controlling interests | 537 | 436 | ||||||||||||||||||||||||||||||||||||
| Interest expense | 84,254 | 89,845 | ||||||||||||||||||||||||||||||||||||
| Interest expense in unconsolidated joint ventures | 5,626 | 5,235 | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 183,146 | 175,313 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization of investments in unconsolidated joint ventures | 3,662 | 2,927 | ||||||||||||||||||||||||||||||||||||
| EBITDA | 442,970 | 416,106 | ||||||||||||||||||||||||||||||||||||
| Gain on sale of property, net of tax | (71,666) | (50,498) | ||||||||||||||||||||||||||||||||||||
| Impairment on depreciated real estate investments | 63 | 60 | ||||||||||||||||||||||||||||||||||||
Net gain on sale of investments in unconsolidated joint ventures | (145) | (381) | ||||||||||||||||||||||||||||||||||||
EBITDAre | 371,222 | 365,287 | ||||||||||||||||||||||||||||||||||||
Share-based compensation expense(1) | 10,157 | 7,900 | ||||||||||||||||||||||||||||||||||||
Severance expense | 2,385 | 90 | ||||||||||||||||||||||||||||||||||||
Casualty losses and reserves, net(2) | 4,683 | 4,082 | ||||||||||||||||||||||||||||||||||||
Losses on investments in equity and other securities, net | 221 | 209 | ||||||||||||||||||||||||||||||||||||
Other, net(3) | (1,365) | (5,973) | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDAre | $ | 387,303 | $ | 371,595 | ||||||||||||||||||||||||||||||||||
(1)For the three months ended March 31, 2025 and 2024, $1,651 and $1,598, was recorded in property management expense, respectively, and $8,506 and $6,302, was recorded in general and administrative expense, respectively.
(2)Includes our share from unconsolidated joint ventures.
(3)Includes costs related to certain litigation and regulatory matters, interest income, and other miscellaneous income and expenses.
Net Operating Income
NOI is a non-GAAP measure often used to evaluate the performance of real estate companies. We define NOI for an identified population of homes as rental revenues and other property income less property operating and maintenance expense (which consists primarily of property taxes, insurance, HOA fees (when applicable), market-level personnel expenses, utility expenses, repairs and maintenance, and property administration). NOI excludes: interest expense; depreciation and amortization; property management expense; general and administrative expense; casualty losses, impairment, and other; gain on sale of property, net of tax; (gains) losses on investments in equity securities, net; other income and expenses; management fee revenues; and income (losses) from investments in unconsolidated joint ventures.
We consider NOI to be a meaningful supplemental financial measure of our performance when considered with the financial statements determined in accordance with GAAP. We believe NOI is helpful to investors in understanding the core performance of our real estate operations. The GAAP measure most directly comparable to NOI is net income or loss. NOI is not used as a measure of liquidity and should not be considered as an alternative to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our NOI may not be comparable to the NOI of other companies due to the fact that not all companies use the same definition of NOI. Accordingly, there can be no assurance that our basis for computing this non-GAAP measure is comparable with that of other companies.
We believe that Same Store NOI is also a meaningful supplemental measure of our operating performance for the same reasons as NOI and is further helpful to investors as it provides a more consistent measurement of our performance across reporting periods by reflecting NOI for homes in our Same Store portfolio.
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The following table presents a reconciliation of net income (as determined in accordance with GAAP) to NOI for our total portfolio and NOI for our Same Store portfolio for each of the periods indicated:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
($ in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | 165,517 | $ | 142,158 | ||||||||||||||||||||||||||||
| Net income available to participating securities | 228 | 192 | ||||||||||||||||||||||||||||||
| Non-controlling interests | 537 | 436 | ||||||||||||||||||||||||||||||
| Interest expense | 84,254 | 89,845 | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 183,146 | 175,313 | ||||||||||||||||||||||||||||||
Property management expense(1) | 36,739 | 31,237 | ||||||||||||||||||||||||||||||
General and administrative(2) | 29,518 | 23,448 | ||||||||||||||||||||||||||||||
Casualty losses, impairment, and other(3) | 4,683 | 4,137 | ||||||||||||||||||||||||||||||
| Gain on sale of property, net of tax | (71,666) | (50,498) | ||||||||||||||||||||||||||||||
Losses on investments in equity and other securities, net | 221 | 209 | ||||||||||||||||||||||||||||||
Other, net(4) | (1,365) | (5,973) | ||||||||||||||||||||||||||||||
| Management fee revenues | (21,408) | (13,942) | ||||||||||||||||||||||||||||||
Losses from investments in unconsolidated joint ventures | 5,218 | 5,138 | ||||||||||||||||||||||||||||||
NOI (total portfolio) | 415,622 | 401,700 | ||||||||||||||||||||||||||||||
| Non-Same Store NOI | (20,971) | (20,954) | ||||||||||||||||||||||||||||||
NOI (Same Store portfolio)(5) | $ | 394,651 | $ | 380,746 | ||||||||||||||||||||||||||||
(1)Includes $1,651 and $1,598 of share-based compensation expense for the three months ended March 31, 2025 and 2024, respectively.
(2)Includes $8,506 and $6,302 of share-based compensation expense for the three months ended March 31, 2025 and 2024, respectively.
(3)Includes our share from unconsolidated joint ventures.
(4)Includes costs related to certain litigation and regulatory matters, interest income, and other miscellaneous income and expenses.
(5)The Same Store portfolio totaled 78,078 homes for the three months ended March 31, 2025 and 2024.
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Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations
Funds From Operations (“FFO”), Core FFO, and Adjusted FFO are supplemental, non-GAAP measures often utilized to evaluate the performance of real estate companies. FFO is defined by Nareit as net income or loss (computed in accordance with GAAP) excluding gains or losses from sales of previously depreciated real estate assets, plus depreciation, amortization and impairment of real estate assets, and adjustments for unconsolidated joint ventures.
We believe that FFO is a meaningful supplemental measure of the operating performance of our business because historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization. Because real estate values have historically risen or fallen with market conditions, management considers FFO an appropriate supplemental performance measure as it excludes historical cost depreciation and amortization, impairment on depreciated real estate investments, gains or losses related to sales of previously depreciated homes, as well non-controlling interests, from net income or loss (computed in accordance with GAAP). By excluding depreciation and amortization and gains or losses on sales of real estate, management uses FFO to measure returns on its investments in homes. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the homes that result from use or market conditions nor the level of capital expenditures to maintain the operating performance of the homes, all of which have real economic effect and could materially affect our results from operations, the utility of FFO as a measure of our performance is limited.
Management also believes that FFO, combined with the required GAAP presentations, is useful to investors in providing more meaningful comparisons of the operating performance of a company’s real estate between periods or as compared to other companies. The GAAP measure most directly comparable to FFO is net income or loss. FFO is not used as a measure of our liquidity and should not be considered an alternative to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our FFO may not be comparable to the FFO of other companies due to the fact that not all companies use the same definition of FFO. Accordingly, there can be no assurance that our basis for computing this non-GAAP measures is comparable with that of other companies.
We believe that Core FFO and Adjusted FFO are also meaningful supplemental measures of our operating performance for the same reasons as FFO and are further helpful to investors as they provide a more consistent measurement of our performance across reporting periods by removing the impact of certain items that are not comparable from period to period. We define Core FFO as FFO adjusted for the following (including adjustments for unconsolidated joint ventures, as applicable): non-cash interest expense related to amortization of deferred financing costs, loan discounts, and non-cash interest expense from derivatives; share-based compensation expense; legal settlements; severance expense; casualty (gains) losses and reserves, net; and (gains) losses on investments in equity and other securities, net, as applicable. We define Adjusted FFO as Core FFO less recurring capital expenditures, including adjustments for unconsolidated joint ventures, that are necessary to help preserve the value, and maintain the functionality, of our homes. The GAAP measure most directly comparable to Core FFO and Adjusted FFO is net income or loss. Core FFO and Adjusted FFO are not used as measures of our liquidity and should not be considered alternatives to net income or loss or any other measure of financial performance presented in accordance with GAAP. Our Core FFO and Adjusted FFO may not be comparable to the Core FFO and Adjusted FFO of other companies due to the fact that not all companies use the same definition of Core FFO and Adjusted FFO. Accordingly, there can be no assurance that our basis for computing this non-GAAP measures is comparable with that of other companies.
57
The following table presents a reconciliation of net income (as determined in accordance with GAAP) to FFO, Core FFO, and Adjusted FFO for each of the periods indicated:
For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
(in thousands, except shares and per share data) | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | 165,517 | $ | 142,158 | ||||||||||||||||||||||||||||
| Add (deduct) adjustments from net income to derive FFO: | ||||||||||||||||||||||||||||||||
Net income available to participating securities | 228 | 192 | ||||||||||||||||||||||||||||||
Non-controlling interests | 537 | 436 | ||||||||||||||||||||||||||||||
Depreciation and amortization on real estate assets | 179,063 | 171,918 | ||||||||||||||||||||||||||||||
Impairment on depreciated real estate investments | 63 | 60 | ||||||||||||||||||||||||||||||
| Net gain on sale of previously depreciated investments in real estate | (71,666) | (50,498) | ||||||||||||||||||||||||||||||
| Depreciation and net gain on sale of investments in unconsolidated joint ventures | 3,498 | 2,519 | ||||||||||||||||||||||||||||||
FFO | 277,240 | 266,785 | ||||||||||||||||||||||||||||||
Non-cash interest expense related to amortization of deferred financing costs, loan discounts, and non-cash interest expense from derivatives(1) | 3,634 | 9,217 | ||||||||||||||||||||||||||||||
Share-based compensation expense(2) | 10,157 | 7,900 | ||||||||||||||||||||||||||||||
| Severance expense | 2,385 | 90 | ||||||||||||||||||||||||||||||
Casualty losses and reserves, net(1) | 4,683 | 4,082 | ||||||||||||||||||||||||||||||
Losses on investments in equity and other securities, net | 221 | 209 | ||||||||||||||||||||||||||||||
Core FFO | 298,320 | 288,283 | ||||||||||||||||||||||||||||||
Recurring capital expenditures(1) | (37,347) | (37,122) | ||||||||||||||||||||||||||||||
Adjusted FFO | $ | 260,973 | $ | 251,161 | ||||||||||||||||||||||||||||
| Net income available to common stockholders | ||||||||||||||||||||||||||||||||
Weighted average common shares outstanding — diluted(3)(4) | 613,361,880 | 613,807,166 | ||||||||||||||||||||||||||||||
Net income per common share — diluted(3)(4) | $ | 0.27 | $ | 0.23 | ||||||||||||||||||||||||||||
| FFO, Core FFO, and Adjusted FFO | ||||||||||||||||||||||||||||||||
Weighted average common shares and OP Units outstanding — diluted(3)(4) | 615,645,848 | 615,987,206 | ||||||||||||||||||||||||||||||
FFO per common share — diluted(3)(4) | $ | 0.45 | $ | 0.43 | ||||||||||||||||||||||||||||
Core FFO per common share — diluted(3)(4) | $ | 0.48 | $ | 0.47 | ||||||||||||||||||||||||||||
AFFO per common share — diluted(3)(4) | $ | 0.42 | $ | 0.41 | ||||||||||||||||||||||||||||
(1)Includes our share from unconsolidated joint ventures.
(2)For the three months ended March 31, 2025 and 2024, $1,651 and $1,598, was recorded in property management expense, respectively, and $8,506 and $6,302 was recorded in general and administrative expense, respectively.
(3)Incremental shares attributed to non-vested share-based awards totaling 584,274 and 1,587,646 for the three months ended March 31, 2025 and 2024, respectively, are included in weighted average common shares outstanding in the calculation of net income per common share — diluted. For the computations of FFO, Core FFO, and AFFO per common share — diluted, common share equivalents of 889,233 and 1,894,345 for the three months ended March 31, 2025 and 2024, respectively, related to incremental shares attributed to non-vested share-based awards are included in the denominator.
(4)Vested units of partnership interests in INVH LP (“OP Units”) have been excluded from the computation of net income per common share — diluted for the periods above because all net income attributable to the vested OP Units has been recorded as non-controlling interest and thus excluded from net income available to common stockholders. Weighted average vested OP Units of 1,979,009 and 1,873,341 for the three months ended March 31, 2025 and 2024, respectively, are included in the denominator for the computations of FFO, Core FFO, and AFFO per common share — diluted.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our future income, cash flows, and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in interest rates, seasonality, market prices, commodity prices, and inflation. The primary market risks to which we are exposed are interest rate risk and seasonality. We may in the future use derivative financial instruments to manage, or hedge, interest rate risks related to any borrowings we may have. We may enter into such contracts only with major financial institutions based on their credit ratings and other factors.
Interest Rate Risk
A primary market risk to which we believe we are exposed is interest rate risk, which may result from many factors, including government monetary and tax policies, fluctuating global and United States economic conditions (including inflation, elevated interest rates, and bank failures), geopolitical tensions, and other factors that are beyond our control. We may incur additional variable rate debt in the future, including additional amounts that we may borrow under the Credit Facility. In addition, decreases in interest rates may lead to additional competition for the acquisition of single-family homes, which may lead to future acquisitions being more costly and resulting in lower yields on single-family homes targeted for acquisition. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to increase rents on expired leases or acquire single-family homes with rental rates high enough to offset the increase in interest rates on our borrowings.
As of March 31, 2025, our $2,945.0 million of outstanding variable-rate debt was comprised of the $470.0 million Revolving Facility and $2,475.0 million of Term Loan Facilities. As of March 31, 2025, we had effectively converted 65.4% of these borrowings to a fixed rate through interest rate swap agreements. Our variable-rate borrowings bear interest at SOFR, as adjusted if appropriate, plus the applicable spread. Assuming no change in the outstanding balance of our existing debt, the projected effect of a 100 bps increase or decrease in SOFR, collectively, on our annual interest expense would be an estimated increase or decrease of $10.2 million. This estimate considers the impact of our interest rate swap agreements and any Term SOFR floors or minimum interest rates stated in the agreements of the respective borrowings.
This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we may consider taking actions to further mitigate our exposure to the change. However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
Inflation
Inflation primarily impacts our results of operations as a result of increased repair and maintenance and other costs and wage pressures. Inflation could also impact our cost of capital as a result of changing interest rates on variable rate debt that is not hedged or if our debt instruments are refinanced in a high-inflation environment. Our resident leases typically have a term of one to two years, which generally enables us to compensate for inflationary effects by increasing rents on our homes to current market rates. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this had a material impact on our results of operations for the three months ended March 31, 2025.
Seasonality
Our business and related operating results have been, and we believe will continue to be, impacted by seasonal factors throughout the year. In particular, we have experienced higher levels of resident move-outs during the summer months, which impacts both our rental revenues and related turnover costs. Further, our property operating costs are seasonally impacted in certain markets by increases in expenses such as HVAC repairs and costs to re-resident during the summer season.
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PART II
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain a set of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.
Changes in Internal Control
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 1. LEGAL PROCEEDINGS
We are not subject to any material litigation nor, to management’s knowledge, is any material litigation currently threatened against us other than routine litigation and administrative proceedings arising in the ordinary course of business.
ITEM 1A. RISK FACTORS
For a discussion of our potential risks or uncertainties, you should carefully read and consider risk factors previously disclosed under Part I. Item 1A. “Risk Factors” of our Annual Report on Form 10-K. There have been no material changes to the risk factors disclosed in Part I. Item 1A. of the Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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EXHIBIT INDEX
Exhibit number | Description | |||||||||||||
| 3.1 | ||||||||||||||
| 3.2 | ||||||||||||||
| 10.1 | Form of Award Notice and Restricted Stock Unit Agreement (LTIP RSU Award Agreement) under the Invitation Homes Inc. 2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 25, 2025).† | |||||||||||||
| 10.2 | ||||||||||||||
| 10.3 | ||||||||||||||
| 10.4 | Second Amendment to Term Loan Agreement, dated as of April 28, 2025, by and among Invitation Homes Operating Partnership LP, as borrower, the lenders party thereto, Capital One, National Association, as administrative agent and the other parties party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on April 30, 2025). | |||||||||||||
22.1 | ||||||||||||||
| 31.1 | ||||||||||||||
| 31.2 | ||||||||||||||
| 32.1 | ||||||||||||||
| 32.2 | ||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||||||
| 104 | Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||||||||
62
† Management contract or compensatory plan
Certain agreements and other documents filed as exhibits to this Quarterly Report on Form 10-Q contain representations and warranties that the parties thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such agreements and other documents and that may not be reflected in such agreements and other documents. In addition, these representations and warranties may be intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such representations and warranties may have changed since the date of such agreements or other documents.
63
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Invitation Homes Inc. | |||||
| By: | /s/ Jonathan S. Olsen | ||||
| Name: Jonathan S. Olsen | |||||
| Title: Executive Vice President and Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
| Date: May 1, 2025 | |||||
| By: | /s/ Kimberly K. Norrell | ||||
| Name: Kimberly K. Norrell | |||||
| Title: Executive Vice President and Chief Accounting Officer | |||||
| (Principal Accounting Officer) | |||||
| Date: May 1, 2025 | |||||
| INVITATION HOMES INC. | ||
| EXECUTIVE SEVERANCE PLAN | ||
| (for Senior Vice Presidents and above) | ||
| Plan Document/Summary Plan Description | ||
Invitation Homes Inc. (the “Company”) has adopted this Executive Severance Plan (the “Plan”) for the benefit of certain management employees of the Company and its subsidiaries (hereinafter referred to as the “Company Group”), on the terms and conditions hereinafter stated. Participation in this Plan is generally intended to be limited to those management employees designated as eligible for the Plan by the Committee who receive and return a Participation Notice and Agreement in the form attached hereto as Exhibit A.
The Plan shall be effective on the Effective Date. This Plan supersedes, solely for the Participant, any prior plans, policies, guidelines, arrangements, agreements, letters and/or other communication, whether formal or informal, written or oral sponsored by any member of the Company Group and/or entered into by any representative of the Company Group that might otherwise provide severance benefits (collectively, all of those “Other Severance Arrangements”). As such, this Plan represents the exclusive severance benefit provided to Participants and such individuals shall not be eligible for any other severance benefits provided in Other Severance Arrangements.
The Plan is not intended to be an “employee pension benefit plan” or “pension plan” within the meaning of Section 3(2) of ERISA. Rather, this Plan is intended to be a “welfare benefit plan” within the meaning of Section 3(1) of ERISA and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, Section 2510.3-2(b). Accordingly, any benefits paid pursuant to the terms of the Plan are not deferred compensation for purposes of ERISA and no Participant shall have a vested right to such benefits. To the extent applicable, it is intended that portions of this Plan either comply with or be exempt from the provisions of Code Section 409A. This Plan shall be administered in a manner consistent with this intent and any provision that would cause this Plan to fail to either constitute a welfare benefit plan under ERISA or comply with or be exempt from Code Section 409A, as the case may be, shall have no force and effect.
1.Definitions.
(a)“Accrued Obligations” means (i) all accrued but unpaid Base Salary through the date of Termination (ii) any unpaid or unreimbursed expenses incurred in accordance with the policies of the Employer, and (iii) any benefits provided under the employee benefit plans and programs of the Company Group upon a Termination, including rights with respect to Company equity (or equity derivatives) or equity-based incentive awards, but excluding any Other Severance Arrangements, in accordance with the terms contained therein.
(b)“Affiliate” means any Person that directly or indirectly controls, is controlled by or is under common control with the Company. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.
(c)“Annual Bonus Program” means the annual cash incentive bonus program in which the Participant participates as of the date of a Qualifying Termination.
(d)“Asset Sale” means a Change in Control resulting from the sale, transfer or other disposition of all or substantially all of the assets of the Company to any Person that is not an Affiliate of the Company.
(e)“Base Salary” means a Participant’s then current annual base salary rate immediately prior to his or her Termination (or, if higher, the annual base salary immediately prior to an event that constitutes a Constructive Termination hereunder) exclusive of any bonus payments or additional payments, unpaid or unreimbursed expenses, under any benefit plan sponsored by the Company Group, including but not limited to, any ERISA plans, stock plans, incentive and deferred compensation plans, insurance coverage or medical benefits and without regard to any salary deferrals under the benefit or deferred compensation plans or programs of the Company Group.
(f)“Board” means the Board of Directors of the Company.
(g)“Cause” means, as to any Participant, the Participant’s (A) willful neglect in the performance of the Participant’s duties to the Company Group or willful or repeated failure or refusal to perform such duties; (B) engagement in conduct in connection with the Participant’s employment or service with the Company Group, which results in, or could reasonably be expected to result in, material harm to the business or reputation of the Company or any other member of the Company Group; (C) conviction of, or plea of guilty or no contest to, (I) any felony; or (II) any other crime that results in, or could reasonably be expected to result in, material harm to the business or reputation of the Company or any other member of the Company Group; (D) material violation of the written policies of any member of the Company Group, including, but not limited to, those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Company Group; (E) fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company or any other member of the Company Group; or (F) act of personal dishonesty that involves personal profit in connection with the Participant’s employment or service to any member of the Company Group.
(h)“Change in Control” has the meaning set forth in the Company’s Omnibus Incentive Plan, as amended from time to time (or the most recent successor plan thereto adopted by the Company for the purpose of providing equity and other incentive compensation to the employees and other service providers of the Company Group, if any).
(i)“Claims Administrator” means the Committee or such other individual or group of individuals as may be appointed as the claims administrator under the Plan by the Committee from time to time.
(j)“Code” means the Internal Revenue Code of 1986, as amended, and the rules, regulations or other interpretative guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(k)“Committee” means the Compensation and Management Development Committee of the Board.
(l)“Constructive Termination” means (i) a material reduction in the Participant’s total compensation opportunity (measured as base salary, target annual bonus opportunity, and target long-term cash incentive opportunity in the aggregate) other than in connection with an across-the-board reduction of compensation which does not exceed 10% of the Participant’s base salary and that is applied to all senior executives of the Company); (ii) the failure of the Company to pay a Participant’s base salary or earned annual bonus payment when due; (iii) a material and sustained diminution in the Participant’s authority and duties; (iv) a relocation of the Participant’s principal place of employment by more than 50 miles, or (v) if the Participant’s principal place of employment is at the corporate headquarters of the Company in the Dallas metropolitan area, the relocation of the corporate headquarters of the Company by more than 50 miles; provided that any event described in clauses (i) through (v) shall not constitute a Constructive Termination unless the Company fails to cure such event within 10 days after receipt from the Participant of written notice of the event which otherwise would constitute Constructive Termination; and provided, further, that a “Constructive Termination” shall cease to exist for an event on the 90th day following the Participant’s knowledge thereof, unless the Participant has given the Committee written notice thereof prior to such date.
(m)“Disability” shall have the meaning set forth in the Omnibus Incentive Plan.
(n)“Effective Date” means November 16, 2017.
(o)“Employer” means, with respect to any Participant, (i) prior to a Change in Control, the member of the Company Group at which such Participant is employed, and (ii) following a Change in Control, the entity that the Participant is employed by immediately after such Change in Control.
(p)“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations or other interpretive guidance promulgated thereunder, as well as any successor laws in replacement thereof.
(q)“Omnibus Incentive Plan” means the Company’s 2017 Omnibus Incentive Plan, as amended from time to time.
(r)“Participant” means any management employee designated as eligible for the Plan by the Committee who is selected by the Committee to participate in the Plan and returns to the Company an executed Participation Notice and Agreement.
(s)“Participation Notice and Agreement” means the form of participation notice and agreement to the terms of the Plan, substantially in the form set forth in Exhibit A hereto.
(t) “Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, and any successor thereto).
(u)“Qualifying Change in Control Termination” means a Participant’s Termination by the Employer without Cause (and other than as a result of the Participant’s death or during the Participant’s Disability) or by the Participant as a result of a Constructive Termination during the two-year period beginning on the date of a Change in Control; provided, however, it shall not be considered a Qualifying Termination if:
(i) such Participant’s employment with the Employer is terminated upon the expiration of a leave of absence by reason of his or her failure to return to work at such time or the absence at such time of an available position for which such Participant is qualified;
(ii)
(iii) such Participant’s employment with the Employer is terminated in connection with an Asset Sale, but only if the Committee determines in its sole discretion that, in connection with such Change in Control, either (A) such Participant was offered employment with the purchaser (or Affiliate thereof) (x) in a position of comparable authority and duties, (y) at the same or greater Base Salary and Target Bonus opportunity, and (z) employee benefits that are substantially similar in the aggregate, in each case, to those as in effect immediately prior such Asset Sale, or (B) such Participant voluntarily elected not to participate in the purchaser’s selection process for employment with the purchaser (or Affiliate thereof) following such Asset Sale; or
(iv) prior to the Participant’s Termination, the Participant has delivered written notice of the Participant’s intent to voluntarily resign under circumstances which constitute a “Retirement” for purposes of any incentive award granted under the Omnibus Incentive Plan.
(v) “Qualifying Termination” means a Participant’s Termination by the Employer without Cause (and other than as a result of the Participant’s death or during the Participant’s Disability) or by the Participant as a result of a Constructive Termination; provided, however, it shall not be considered a Qualifying Termination if such Participant’s employment with the Employer is terminated upon the expiration of a leave of absence by reason of the Participant’s failure to return to work at such time.
(w)“Release Agreement” means a release of claims in the form customarily provided by the Company Group to terminated Employees, pursuant to which an Participant may be required to (i) acknowledge the receipt of the severance payment and other benefits and (ii) release the Company and its Affiliates (including the Employer) and other persons and entities designated by the Company from any liability arising from his or her employment or termination (other than with respect to the Participant’s rights under the Plan).
(x)“Release Effectiveness Date” means the date the Release Agreement becomes effective and irrevocable.
(y)“Severance Multiple” means, as to any Participant, the Severance Multiple set forth in Exhibit B applicable to the Participant’s position as of the date of Termination with respect to a Qualifying Termination or a Qualifying Change in Control Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participation Notice and Agreement.
(z)“Severance Payment Period” means, as to any Participant, the Severance Payment Period set forth in Exhibit B applicable to the Participant’s position as of the date of Termination with respect to a Qualifying Termination or a Qualifying Change in Control Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participation Notice and Agreement.
(aa)“Target Bonus Amount” means a Participant’s target annual bonus under the Annual Bonus Program.
(ab)“Termination” means the termination of a Participant’s employment or service, as applicable, with all members of the Company Group for any reason (including death), other than any termination of a Participant’s employment with the Employer by reason of a transfer to the employ of another member of the Company Group.
(ac)“Welfare Continuation Period” means, as to any Participant the Welfare Continuation Period set forth in Exhibit B applicable to the Participant’s position as of the date of Termination with respect to a Qualifying Termination or a Qualifying Change in Control Termination (but disregarding any diminution in position that has given rise to a Constructive Termination), unless otherwise set forth in the Participation Notice and Agreement; provided, however, that the Welfare Continuation Period shall terminate earlier as of the date the Participant becomes eligible to receive any health benefits as a result of subsequent employment or service.
2.Eligibility. Eligibility to participate in the Plan shall be limited to any employee of the Company Group that designated as a Participant by the Committee; provided that, as a condition of participation in the Plan, the Participant must execute and submit a Participation Notice, and following the Participant’s Termination, a Release Agreement.
3.Termination of Employment.
(a)Payments on Specified Terminations. If a Participant’s Termination is a Qualifying Termination or Qualifying Change in Control Termination, in addition to any Accrued Obligations, subject to such Participant’s execution and delivery, and non-revocation of the Release Agreement, as contemplated in subsection (c) below, the Participant shall be entitled to the following payments and benefits:
(i)Pro-Rated/Prior Year Bonuses. (A) The bonus amount otherwise payable under the Annual Bonus Program for the year in which the Participant’s Termination occurred, pro-rated for the days of service up to and including the date of termination and based on actual performance for the year, payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan (but in all events prior to March 15 of the calendar year immediately following the calendar year in which such Termination occurs) and (B) to the extent not previously paid, the bonus amount otherwise payable under the Annual Bonus Program for the year immediately preceding the year in which the Participant’s Termination occurred, based on actual performance for the year, payable concurrently with cash bonus payments to other employees under the applicable cash bonus plan;
(ii)Cash Severance. An amount equal to such Participant’s applicable Severance Multiple, as applicable, multiplied by the sum of such Participant’s Base Salary and Target Bonus Amount, such amount to be paid (A) in the case of a Qualifying Termination, in equal installments no less frequently than monthly over the applicable Severance Payment Period beginning with the first payroll period after the Release Effectiveness Date or (B) in the case of a Qualifying Change in Control Termination, paid in a lump sum no later than the 60th day following the Termination Date;
(iii)COBRA Continuation Payment. A cash payment in an amount equal to the total amount of the monthly COBRA insurance premiums for participation in the welfare benefit programs of the Company in which the Participant participated as of the date of Termination, payable monthly for each month of the Welfare Continuation Period in accordance with the Company’s payroll practices, with the first such payment in respect of any completed months prior to the Release Effectiveness Date to occur as soon as practicable after the Release Effectiveness Date; and
(iv) RSU Vesting. If the Termination is a Qualifying Change in Control Termination, any unvested restricted stock units outstanding under the Omnibus Incentive Plan which were granted on or prior to February 6, 2017 shall become vested on the Release Effectiveness Date, and settled in accordance with the terms of the applicable award agreement entered into under Omnibus Incentive Plan.
(b)Other Termination Events. If a Participant experiences a termination of employment or services with the Company or any of its Affiliates which does not constitute a Qualifying Termination or Qualifying Change in Control Termination, the Participant shall not be entitled to the payment of any severance or other benefits under the Plan.
(c)Release Agreement. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to subsection (a) above (other than the Accrued Obligations) shall be conditioned upon a Participant’s execution, delivery to the Company, and non-revocation of the Release Agreement and the expiration of any revocation period contained in such Release Agreement within sixty (60) days following the date of Termination. If a Participant fails to execute the Release Agreement in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes his or her acceptance of such release following its execution, such Participant shall not be entitled to payment of any severance and other benefits under the Plan. Further, to the extent that any of the payments hereunder constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of such Termination, but for the condition on executing the Release Agreement as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day, after which any remaining payments shall thereafter be provided to the Participant according to the applicable schedule set forth herein.
4.Additional Terms.
(a)Taxes. Severance and other payments and benefits under the Plan will be subject to all required federal, state and local taxes and may be affected by any legally required withholdings.
(b)Other Benefit Plans. Payments under the Plan are not deemed “compensation” for purposes of calculating any contributions or accruals under the retirement plans, savings plans, and incentive plans of the Company Group. Accordingly, no contributions to the retirement and savings plans of the Company will be made from the severance payments and other payments and benefits under the Plan, and such plans will not accrue any benefits attributable to payments under the Plan.
(c)Specified Employees. Notwithstanding anything herein to the contrary, (i) if, at the time of a Participant’s Termination such Participant is a “specified employee” as defined in Code Section 409A and regulations thereunder, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent the imposition of any accelerated or additional tax under Code Section 409A, then the commencement of the payment of any such payments or benefits hereunder will be deferred (without any reduction or increase in such payments or benefits ultimately paid or provided to the Participant) until the date that is six (6) months following such Participant’s Termination (or the earliest date that is permitted under Code Section 409A); and (ii) if any other payments of money or other benefits due to the Participant hereunder would cause the application of an accelerated or additional tax under Code Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by or at the direction of the Committee, that does not cause such an accelerated or additional tax or result in additional cost to the Company. The Company shall consult with its legal counsel and tax advisors in good faith regarding the implementation of this Section 4(c); provided, however, that none of the Company any other member of the Company Group, or any of their respective employees or representatives, shall have any liability to the Participant with respect thereto.
5.Termination or Amendment of the Plan.
Except as otherwise set forth in a Participation Notice and Agreement, the Plan may be amended, terminated or discontinued in whole or in part, at any time and from time to time at the discretion of the Board or the Committee; provided, however that the Plan may not be amended, terminated or discontinued during the two-year period beginning on a Change in Control (except for an amendment to the administrative provisions of the Plan that is considered by counsel to be required pursuant to applicable law), and provided, further, that no amendment, termination, or discontinuance of either the Plan or any provision of the Plan that has the effect of reducing or diminishing the potential benefits a Participant may receive under the Plan, shall be effective with respect to the Participant until the first anniversary of such amendment, termination, or discontinuance, except for an amendment to the administrative provisions of the Plan that is considered by counsel to be required pursuant to applicable law. The Plan shall automatically terminate on the second anniversary of a Change in Control; provided, however, that if prior to such termination date a Participant has undergone a Qualifying Termination (or such Participant has delivered notice of a Constructive Termination), then the Plan shall remain in effect with respect to such Participant in accordance with its terms.
6. Limitation Of Certain Payments. In the event that any payments and/or benefits due to a Participant under the Plan and/or any other arrangements are determined by us to constitute “excess parachute payments” as defined under Code Section 280G, any cash severance payable under the Plan shall be reduced by the minimum amount necessary, subject to the last sentence of this paragraph, such that the present value of such parachute payments is below 300% of such Participant’s “base amount” (as defined under Code Section 280G), and by accepting participation in the Plan, each Participant agrees to waive his or her rights to any “parachute payments” (as defined under Section 280G of the Code) sufficient to reduce such parachute payments to below such threshold; provided, however, in no event shall such cash severance be reduced below zero (0). Notwithstanding the foregoing, no payments or benefits shall be reduced under this Section 6 unless (a) the net amount of such payments and benefits, as so reduced (and after subtracting the net amount of federal, state and
local income taxes on such reduced payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced payments and benefits) is greater than or equal to (b) the net amount of such payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such payments and benefits and the amount of excise tax imposed under Code Section 4999 as to which such Participant would be subject in respect of such unreduced payments and benefits and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced payments). For purposes hereof, (i) the order in which any amounts are deemed to be reduced, if applciable, is (A) cash payments; (B) other non-cash forms of benefits; and (C) equity-based payments and acceleration of vesting, and (ii) within any such category of payments and benefits (that is, (i)(A), (i)(B) or (i)(C) above), (A) a reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Code Section 409A and then with respect to amounts that are, and (B) to the extent that any such amounts are to be made over time (e.g., in installments, etc.), then the amounts shall be reduced in reverse chronological order.
7. Claims Procedure.
(a) Processing Claims. The processing of claims for benefits and payments under the Plan will be carried out as quickly as possible. If an individual is not selected for participation in the Plan or does not satisfy the conditions for eligibility in the Plan, he or she is not entitled to benefits and/or payments under this Plan.
(b) Decision. If an individual’s claim for benefits under this Plan is denied, the individual will receive a written notice within ninety (90) days (in special cases, more than 90 days may be needed and such individual will be notified in this case):
(i) requesting additional material or information to further support the claim, and the reasons why these are necessary,
(ii) setting forth specific reasons as to why the claim was denied,
(iii) setting forth clear reference to the Plan provisions upon which the denial is based, and
(iv) providing notice of the individual’s right to have the denial reviewed as explained below.
(c) Request for Review of Denial of Benefits. The individual or his or her authorized representative may request a review of his or her claim by giving written notice to the Claims Administrator. Each individual has the right to have representation, review pertinent documents, and present written issues and comments. An individual’s request must be made not later than 60 days after he or she receives the notice of denial. If an individual fails to act within the 60-day limit, the individual loses the right to have his or her claim reviewed.
(d) Decision on Review. Upon receipt of a request for review from an individual, the Claims Administrator shall make a full and fair evaluation and may require additional documents necessary for such a review. The Claims Administrator shall make a decision within 60 days from receipt of the individual’s request. In the event of special circumstances, a decision will be given to the employee as
soon as possible, but not later than 120 days after receipt of the individual’s request for review. The decision on the review shall be in writing and shall include specific reasons for the decision. The final decision of the Claims Administrator shall be conclusive and binding upon all parties having or claiming to have an interest in the matter being reviewed.
(e) In Case of Clerical Error. If any information regarding an individual is incorrect, and the error affects his or her benefits, the correct information will determine the extent, if any, of the individual’s benefits under the Plan.
(f) No Limitation of Rights. Nothing in this Section 7 shall limit the Participant’s ability to file or bring a claim, proceeding, or legal action for relief with respect to any right or claim for payments or benefits under this Plan.
8. General Information.
(a) No Right to Continued Employment. Nothing contained in this Plan shall confer upon any Participant any right to continue in the employ of any member of the Company Group nor interfere in any way with the right of the Company to terminate his or her employment, with or without cause.
(b) Plan Not Funded. Amounts payable under this Plan shall be payable from the general assets of the Company, and no special or separate reserve, fund or deposit shall be made to assure payment of such amounts. No Participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset of the Company by reason of participation hereunder. Neither the provisions of this Plan, nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant, beneficiary or other person. To the extent that a Participant, beneficiary or other person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company's creditors or otherwise, to discharge its obligations under the Plan.
(c) Non-Transferability of Benefits and Interests. All amounts payable under this Plan are non-transferable, and no amount payable under this Plan shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. This Section 8(c) shall not apply to an assignment of a contingency or payment due: (1) after the death of a Participant to the deceased Participant's legal representative or beneficiary; or (2) after the disability of a Participant to the disabled Participant's personal representative.
(d) Discretion of Company, Board and Committee. Any decision made or action taken by, or inaction of, the Company, the Board, the Committee or the Claims Administrator arising out of or in connection with the creation, amendment, construction, administration, interpretation and effect of this Plan that is within its authority hereunder or applicable law shall be within the absolute discretion of such entity and shall be conclusive and binding upon all persons. In the case of any conflict, the decision made or action taken by, or inaction of, the Claims Administrator will control. However, with respect to the authorized officers and senior executives, as designated by the Board in its resolutions, any decision made or action taken by, or inaction of, the Committee controls.
(e) Indemnification. Neither the Board nor the Committee, any employee of the Company, nor any Person acting at the direction thereof (each such Person an “Affected Person”), shall have any liability to any person (including without limitation, any Participant), for any act, omission, interpretation, construction or determination made in connection with this Plan (or any payment made under this Plan). Each Affected Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense (including attorneys' fees) that may be imposed upon or incurred by such Affected Person in connection with or resulting from any action, suit or proceeding to which such Affected Person may be a party or in which such Affected Person may be involved by reason of any action taken or omitted to be taken under the Plan and against and from any and all amounts paid by such Affected Person, with the Company’s approval, in settlement thereof, or paid by such Affected Person in satisfaction of any judgment in any such action, suit or proceeding against such Affected Person; provided that, the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company's choice. The foregoing right of indemnification shall not be available to an Affected Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further appeal, determines that the acts or omissions of such Affected Person giving rise to the indemnification claim resulted from such Affected Person's bad faith, fraud or willful wrongful act or omission. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Affected Persons may be entitled under the Company’s organizational documents, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such person or hold them harmless.
(f) Section 409A. Notwithstanding any provision of the Plan to the contrary, if any benefit provided under this Plan is subject to the provisions of Code Section 409A and the regulations issued thereunder, the provisions of the Plan will be administered, interpreted and construed in a manner necessary to comply with Section 409A or an exception thereto. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company (or its employees, officers or directors) have any liability to any Participant (or any other person) due to the failure of the Plan to satisfy the requirements of Code Section 409A or any other applicable law.
(g) No Duplication. The benefits under this Plan replace and supersede any severance benefits payable upon a Termination previously established under Other Severance Arrangements. In no event shall any Participant receive more than the severance benefits provided for herein, and any severance benefits provided under any Other Severance Arrangement or otherwise, to the extent paid, shall reduce the amounts to be paid hereunder.
(h) Governing Law. All questions pertaining to the construction, regulation, validity and effect of the provisions of this Plan shall be determined in accordance with the laws of Texas (other than to the extent set forth in the Participation Notice).
(i) Notice. Any notice or other communication required or which may be given pursuant to this Plan shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or two days after it has been mailed by United States express or registered mail, return receipt requested, postage prepaid, addressed to the Company, at Invitation Homes Inc., 1717
Main Street, Suite 2000, Dallas, TX 75201, Attention: Chief Legal Officer; or to the Participant at the Participant’s most recent address on file with the Company
(j) Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.
(k) Successors. The Plan shall inure to the benefit of and be binding upon the Company and its successors.
Exhibit A
INVITATION HOMES INC.
EXECUTIVE SEVERANCE PLAN
Participation Notice and Agreement
Participant: X
| Qualifying Termination | ||||||||
| Severance Multiple: | X | |||||||
| Welfare Continuation Period: | X months | |||||||
| Severance Payment Period | X months | |||||||
| Qualifying Change in Control Termination | ||||||||
| Severance Multiple: | X | |||||||
| Welfare Continuation Period: | X months | |||||||
| Severance Payment Period | X months | |||||||
I hereby agree to the terms and conditions of the Invitation Homes Inc. Executive Severance Plan (the “Plan”), including the terms set forth in this Participation Notice and Agreement and the Restrictive Covenants (as defined below) incorporated hereto.
I understand that as a Participant under the Plan (a “Participant”), the terms of the Plan will exclusively govern all subject matters addressed by the Plan and I understand that, except as expressly provided in the Plan, the Plan supersedes and replaces, as applicable, any and all agreements (including any prior employment agreement), plans, policies, guidelines or other arrangements, including Other Severance Arrangements (as defined in the Plan), with respect to all subject matters covered under the Plan and my rights to severance upon any Covered or Qualifying Termination (as defined in the Plan).
I acknowledge and recognizes the highly competitive nature of the businesses of the Company Group, and that I will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients and partners involved in those businesses, and the goodwill associated with the Company Group.
Accordingly, I agree to be bound by the provisions of Appendix A to this Participation Notice (the “Restrictive Covenants”), which are incorporated into this Participation Notice and Agreement and made a part hereof.
Dated: X
Participant Name
_____________________________
APPENDIX A
Restrictive Covenants
The Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company and its Affiliates, that the Participant will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about those businesses, as well as access to the prospective and actual customers, suppliers, investors, clients and partners involved in those businesses, and the goodwill associated with the Company and its Affiliates. Participant accordingly agrees to the provisions of Appendix A to this Agreement (the “Restrictive Covenants”). For the avoidance of doubt, the Restrictive Covenants contained in this Agreement are in addition to, and not in lieu of, any other restrictive covenants or similar covenants or agreements between the Participant and the Company or any of its Affiliates.
1.Non-Competition; Nonsolicitation.
(a)The Participant acknowledges and recognizes the highly competitive nature of the businesses of the Restricted Group (as defined below) and accordingly agrees as follows:
(i)During the Restricted Period, the Participant will not, without the prior written consent from the Company regarding the specific solicitations, engagements, or actions proposed, and such consent to be delivered in its sole, good faith discretion, whether on the Participant’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with the Restricted Group in the Business the business of any then current or prospective client or customer with whom the Participant (or the Participant’s direct reports) had personal contact or dealings on behalf of the Company and its Subsidiaries during the one-year period preceding the Participant’s termination of employment or service, as applicable.
(ii)During the Restricted Period, the Participant will not, without prior written consent from the Company regarding the specific engagement, employment, or investment proposed, and such consent to be delivered in its sole, good faith discretion, directly or indirectly:
(A) engage in the Business in any geographical area that is within 20 miles of any geographical area where the Restricted Group engages in the Business (or has plans to plans to engage in the Business during the Restricted Period);
(B) enter the employ of, or render any services to, a Competitor, except where such employment or services do not relate to the Business; or
(C) acquire a 10% or greater financial interest in a Competitor, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant.
(iii) Notwithstanding anything to the contrary in this Appendix A, the provisions of this Section 1 shall not restrict ownership of any number of single-family homes for personal use by the Participant or up to five additional single-family homes as personal investments.
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(iv)During the Restricted Period, the Participant will not, whether on the Participant’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:
(A) solicit or encourage any employee of the Restricted Group to leave the employment of the Restricted Group; or
(B) hire any employee who provided services to the Restricted Group as of the date of the Participant’s termination of employment or service, as applicable, or terminated employment within one year prior to the termination of the Participant’s employment or service, as applicable.
(v)For purposes of this Appendix A:
(A) “Business” shall mean the business of acquiring controlling investments in, owning, developing, leasing, operating or managing one to four unit residential real properties, including single-family homes in planned unit developments and individual single family townhomes and individual residential condominium units in a low-rise or high-rise condominium project, where such properties are located in the United States but excluding, for the avoidance of doubt, (1) any activities undertaken with the prior written consent of the Board sought in accordance with sub-sections (a)(i) or (a)(ii), and (2) acting as a broker with respect to leasing and sale transactions.
(B) “Competitor” shall mean any Person engaged in the Business in direct competition with the Company and its Subsidiaries, but excluding any Person for which less than 10% of its revenue during its most recent fiscal year is derived from activities similar to the Business.
(C) “Restricted Group” shall mean, collectively, the Company and its Subsidiaries and Affiliates.
(D) “Restricted Period” shall mean the Participant’s employment or service, as applicable, and the period equal to one year following the date the Participant ceases employment or service, as applicable, for any reason.
(b)It is expressly understood and agreed that although the Participant and the Restricted Group consider the restrictions contained in this Section 1 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Appendix A is an unenforceable restriction against the Participant, the provisions of this Appendix A shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Appendix A is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. Notwithstanding anything herein to the contrary, Section 1(a)(i) shall not apply to the Participant if the Participant’s principal place of employment or the state in which the Participant provides services, in each case on the Date of Grant, is located in the State of California.
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(c)The period of time during which the provisions of this Section 1 shall be in effect shall be extended by the length of time during which the Participant is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company’s application for injunctive relief.
(d)The provisions of this Section 1 shall survive the termination of the Participant’s employment or service for any reason
2. Confidentiality; Intellectual Property.
(a) Confidentiality.
(i)The Participant will not at any time (whether during or after the Participant’s employment or engagement, as applicable) (x) retain or use for the benefit, purposes or account of the Participant or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company and its Affiliates (other than its professional advisers who are bound by confidentiality obligations, lenders and partners or otherwise in performance of the Participant’s employment or engagement duties), any proprietary and non-public/confidential information (including without limitation trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals) concerning the past, current or future business, activities and operations of the Restricted Group (“Confidential Information”) without the prior written authorization of the board of directors of the Company; provided, however, that the conscious awareness of any Confidential Information (as opposed to the physical possession of documentary Confidential Information) by the Participant, and the Participant’s consideration of such information in connection with the Participant’s pursuit or evaluation of, involvement with or participation in, any project or activity that is not prohibited by this Appendix A shall be deemed not to constitute a breach of Section 2(a)(i)(x) or Section 2(a)(iv)(x) in any manner whatsoever, unless such Participant’s use of such Confidential Information has an objective and detrimental impact on the business of the Company and its Subsidiaries.
(ii)“Confidential Information” shall not include any information that is (x) generally known to the industry or the public other than as a result of the Participant’s breach of this covenant; (y) made legitimately available to the Participant by a third party without breach of any confidentiality obligation of which the Participant has knowledge (it being understood that any information made available by an employee, officer or director of the Company Group shall not be protected by this exclusion); or (z) required by law to be disclosed; provided, that with respect to subsection (z) the Participant shall give prompt written notice to the Company of such requirement and reasonably cooperate with any attempts by the Company to obtain a protective order or similar treatment.
(iii)Except as required by law, the Participant will not disclose to anyone, other than the Participant’s family (it being understood that, in this Appendix A, the term “family” refers to the Participant, the Participant’s spouse, minor children, parents and spouse’s parents) and
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legal or financial advisors, the existence or contents of this Agreement; provided, that the Participant may disclose to any prospective future employer the provisions of Sections 1 and 2 of this Appendix A; provided, further, that any such employer agrees to maintain the confidentiality of such terms. This Section 2(a)(iii) shall terminate if any member of the Company Group publicly discloses a copy of the Restricted Stock Unit Agreement or this Appendix A (or, if any member of the Company Group publicly discloses summaries or excerpts of the Subscription Agreement or this Appendix A, to the extent so disclosed).
(iv)Upon termination of the Participant’s employment or service for any reason, the Participant shall (x) except as otherwise provided herein, cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by any member of the Restricted Group; (y) immediately destroy, delete, or return to the Company, at the Company’s option and expense, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in the Participant’s possession or control (including any of the foregoing stored or located in the Participant’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information, except that the Participant may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and reasonably cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which the Participant is or becomes aware.
(b) Intellectual Property.
(i) If the Participant creates, invents, designs, develops, contributes to or improves any works of authorship, inventions, intellectual property, materials, documents or other work product (including, without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials), either alone or with third parties, at any time during the Participant’s employment or engagement and within the scope of such employment or engagement and with the use of any the Company’s resources (the “Company Works”), the Participant shall promptly and fully disclose the same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.
(ii) The Participant shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Company Works. If the Company is unable for any other reason, to secure the Participant’s signature on any document for this purpose, then the Participant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Participant’s agent and attorney in fact, to act for and in the Participant’s behalf and stead
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to execute any documents and to do all other lawfully permitted acts required in connection with the foregoing.
(iii) The provisions of Section 2 hereof shall survive the termination of the Participant’s employment or engagement, in either case, for any reason.
(c) Protected Rights. Nothing contained in this Agreement or any other plan, policy, agreement, or code of conduct or similar arrangement of the Company Group, limits Participant’s ability to (i) disclose any information to governmental agencies or commissions as may be required by law, (ii) file a charge or complaint with, or communicate or cooperate with, any U.S. federal, state, or local governmental agency or commission (a “Governmental Entity”), or otherwise participate in any investigation or proceeding that may be conducted by a Governmental Entity with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise make disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation, provided that in each case all such charges, complaints, communications and disclosures are consistent with applicable law, or (iii) receive an award from a Governmental Entity for information provided under any whistleblower program, including the Participant’s right to seek and obtain a whistleblower award for providing information relating to a possible securities law violation to the Securities and Exchange Commission.
3. Specific Performance. The Participant acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of Section 1 or 2 of this Appendix A may be inadequate and the Company may suffer irreparable damages as a result of such breach. In recognition of this fact, the Participant agrees that, in the event of a Restrictive Covenant Violation, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to seek equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.
A-5
Exhibit B
Benefit Tiers
With respect to any Participant, unless otherwise set forth in a Participation Notice and Agreement, the following Severance Multiples, Welfare Continuation Periods, and Severance Payment Periods shall apply.
Benefit Tier | Eligible Positions, Titles | ||||
Tier A | Chief Executive Officer | ||||
Tier B | President Chief Financial Officer Chief Operating Officer | ||||
Tier C | Executive Vice President not covered under Tier A, Tier B, or Tier D | ||||
Tier D | Senior Vice President | ||||
Tier A | Tier B | Tier C | Tier D | |||||||||||
Qualifying Termination | ||||||||||||||
Severance Multiple: | 2.00x | 1.50x | 1.00x | 0.5x | ||||||||||
Welfare Continuation Period (months): | 12 | 12 | 12 | 6 | ||||||||||
Severance Payment Period (months): | 24 | 18 | 12 | 6 | ||||||||||
Qualifying Change in Control Termination | ||||||||||||||
Severance Multiple: | 3.00x | 2.25x | 1.50x | 1.00x | ||||||||||
Welfare Continuation Period (months): | 18 | 18 | 12 | 9 | ||||||||||
Severance Payment Period (months): | 36 | 27 | 18 | 12 | ||||||||||
Exhibit 22.1
Subsidiary Issuer and Guarantors of Guaranteed Securities
As of March 31, 2025, Invitation Homes Operating Partnership LP (the “Issuer”), the principal operating subsidiary of Invitation Homes Inc. (the “Company”), has issued the following debt securities under a registration statement on Form S-3, filed with the Securities and Exchange Commission, which securities are fully and unconditionally guaranteed by the Company, Invitation Homes OP GP LLC, the sole general partner of the Issuer and a wholly-owned subsidiary of the Company, and IH Merger Sub, LLC, a wholly-owned subsidiary of the Company.
| Issuer | Notes | Guarantors | ||||||
| Invitation Homes Operating Partnership LP | 2.000% Senior Notes due 2031 | Invitation Homes Inc. | ||||||
| 2.300% Senior Notes due 2028 | Invitation Homes OP GP LLC | |||||||
| 2.700% Senior Notes due 2034 | IH Merger Sub, LLC | |||||||
| 4.150% Senior Notes due 2032 | ||||||||
| 5.450% Senior Notes due 2030 | ||||||||
| 5.500% Senior Notes due 2033 | ||||||||
| 4.875% Senior Notes due 2035 | ||||||||
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Dallas B. Tanner, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Invitation Homes Inc. for the quarterly period ended March 31, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: | /s/ Dallas B. Tanner | ||||
| Dallas B. Tanner | |||||
| Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
| May 1, 2025 | |||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Jonathan S. Olsen, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Invitation Homes Inc. for the quarterly period ended March 31, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: | /s/ Jonathan S. Olsen | ||||
| Jonathan S. Olsen | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
| May 1, 2025 | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Invitation Homes Inc. (the “Company”) for the quarterly period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dallas B. Tanner, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Dallas B. Tanner | ||||
| Dallas B. Tanner | |||||
| Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
| May 1, 2025 | |||||
A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Invitation Homes Inc. (the “Company”) for the quarterly period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan S. Olsen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Jonathan S. Olsen | ||||
| Jonathan S. Olsen | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
| May 1, 2025 | |||||
A signed original of this certification required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.