American Homes 4 Rent

Greetings and welcome to the AMH second quarter 2026 earning conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Nick Fromm, Vice President of Investor Relations. Thank you, Nick. You may begin.

Good morning and thank you for joining us for our second quarter 2026 earnings conference call. With me today are Brian Smith, Chief Executive Officer, Chris Lau, Chief Financial Officer, and Lincoln Palmer, Chief Operating Officer. Please be advised that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC. All forward-looking statements speak only as of today, July 31, 2026. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings press release and supplemental information package. As a note, our operating and financial results, including GAAP and non-GAAP measures, are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at www.amh.com. With that, I will turn the call over to our CEO, Brian Smith.

Welcome, everyone, and thank you for joining us today. Before we get into our results, I would like to briefly touch on the Road to Housing Act, which went into law last month following overwhelming bipartisan support. This law reflects a thoughtful approach by policymakers to address housing affordability and allows the industry to move forward with greater certainty. It recognizes the important role that single family rentals play in the broader housing ecosystem and reinforces a number of aspects of our value proposition. First, It recognizes the role of new home construction in helping to address housing affordability. This highlights the importance of our in-house development program that continues to add newly built, high-quality homes across the country. Second, by grandfathering in existing single-family rental homes, the legislation acknowledges that professionally managed rental housing is a critical element of our country's housing landscape. Millions of families will continue to have the opportunity to live in high-quality homes and neighborhoods without the burdens of homeownership. And third, the legislation preserves the ability to consolidate existing rental portfolios, enabling AMH to continue delivering our best-in-class resident experience to additional households across the country. This creates value not only for our residents, but also for our shareholders as additional homes are optimized on the AMH platform. Now to earnings. Demand for high-quality single-family rental housing across our diversified portfolio footprint remains healthy. We delivered a strong first half to the year, highlighted by another great spring leasing season. The team efficiently turned and re-leased a record number of homes through the first six months of the year, while also tightly managing expenses. In addition to these expense controls, we also saw contributions from our development program and capital allocation decisions, leading us to raise the midpoint of our core FFO per share guidance by 3 cents to $1.95, which represents year-over-year growth of 4.3%. Turning to our second quarter same home results, average occupied days came in at 96% and new renewal and blended spreads were 1.4%, 3.2%, and 2.7% respectively, driving core revenue growth of 2.3%. Notably, both new and renewal rate growth accelerated through the quarter, reflecting healthy demand for our homes. This momentum carried into July, with occupancy holding at 96.1% and new renewal and blended spreads of 1.6%, 3.3%, and 2.8% respectively. Looking ahead to the second half of the year, we expect to see the benefits of our lease expiration profile where only one-third of 2026 lease expirations remain. This should translate into a meaningfully flatter occupancy curve and set us up well from an inventory and pricing perspective heading into 2027. Turning to investments, we continue to take a disciplined approach to capital allocation. Our development program remains on track. We are seeing modest improvement in initial yields, supported by our pre-leasing efforts and the team's continued success in keeping vertical construction costs flat. On the disposition front, demand from individual homebuyers on the MLS remains strong. We have taken this opportunity to accelerate our portfolio optimization efforts and are tracking ahead of plan, having sold over 1,300 homes in the first half of the year at cap rates in the 4% area. As a reminder, we are matched funding on balance sheet development this year with proceeds from our disposition program. Looking ahead, as I mentioned before, we are in a great position to capitalize on portfolio consolidation opportunities that arise. AMH has the platform and balance sheet to create meaningful value, but we will only do so when the cost of capital and economics makes sense. In closing, we had a great first half of the year and are optimistic about the future of the industry. I want to thank our teams across the country for their hard work and continued commitment to providing high quality housing and a superior resident experience to the families we serve. With that, I will turn the call over to Chris.

Thanks, Brian, and good morning, everyone. Like usual, I'll cover three areas in my comments today. First, a review of our quarterly results. Second, an update on our balance sheet and recent capital activity. And third, I'll close with commentary around our increased 2026 guidance. Starting off with our operating results, the teams delivered an outstanding second quarter, generating net income attributable to common shareholders of $113.6 million, or 31 cents per diluted share. On an FFO share and unit basis, we generated 49 cents of core FFO representing 5.2% year-over-year growth and 45 cents of adjusted FFO representing 8.3% year-over-year growth. Notably, this quarter's FFO growth was driven by exceptional execution across all aspects of the AMH business. As two quick examples, within the same home portfolio, the teams did an excellent job capturing the spring leasing season. And on top of that, our teams set new records on the lease-up and pre-leasing of recently constructed AMH development homes driving incremental NOI contribution outside of the same home portfolio. In speaking of development, this quarter we delivered a total of 651 homes to our wholly owned and joint venture portfolios. Of those homes, 542 were delivered to our wholly owned portfolio for a total investment cost of approximately $220 million. Additionally, as Brian mentioned, we saw another quarter of robust disposition activity. On a year-to-date basis, we've now generated approximately $380 million of net proceeds, which is comfortably ahead of our initial timing expectations, which means that on a full-year basis, we are now likely tracking towards the upper half of our $400 to $600 million range that we outlined at the start of the year, reducing some of our planned incremental debt needs. Next, I'd like to quickly turn to our balance sheet and recent capital activity. At the end of the quarter, our net debt, including preferred shares, to adjusted EBITDA was 5.2 times. We had approximately $84 million of cash available on the balance sheet, and we had a $390 million drawn balance on our $1.25 billion revolving credit facility. Additionally, during the quarter, we attractively repurchased 4.1 million common shares for a total of $123 million at an average price of $29.88 per share. And next, I'll cover our updated 2026 earnings guidance, which was positively revised in yesterday's earnings press release. Starting with the same home portfolio, recognizing the team's outstanding cost control execution and modestly favorable property tax news in a few of our smaller states, we've lowered the midpoint of our full-year core expense growth expectations by 75 basis points to 2%. In turn, we have increased the midpoint of our core NOI growth expectations by 40 basis points to 2.4%, and we now expect 2026 same-home core NOI margins to modestly expand compared to 2025. And for the non-same-home portfolio, we also expect incremental core NOI growth from similar expense benefits and additional contribution from our solid AMH development lease-up activity. and when combined with our better than expected disposition activity and incremental share repurchases, we've increased the midpoint of our full year 2026 core FFO per share expectations by a total of three cents. Our new midpoint of $1.95 per share now reflects the high end of our previous range and represents a year over year growth expectation of 4.3%, which continues to position AMH at the top of the residential sector. And before we open the call to your questions, I'd like to close with one final thought. Like Brian mentioned at the start, as our industry begins to emerge from some of the recent uncertainty, AMH's positioning as the largest integrated operator and developer of single-family rental homes will likely be more important than ever. The AMH Development Program gives us the unique ability to both control our external growth while also contributing much-needed housing stock across the country as we continue to create value for our residents, communities, and shareholders. And with that, we'll open the call to your questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press SAR 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. So that we may address questions from as many participants as possible, we ask that you limit yourself to one question. If you have additional questions, you may re-queue and time permitting those questions will be addressed. One moment please while we poll for questions. Thank you. Our first question comes from the line of Juan Sambria with BMO Capital Markets. Please proceed.

Good morning. Congrats on the quarter. Just hoping you could spend a little bit of time on CapEx. Have a nice trend in the quarter and year to date, both in terms of maintenance and R&M and turn costs. Just hoping you could expand on what's driving that. whether it's dispositions and or new developments and kind of the prospects going forward, what's kind of the new normal spend on an annual basis?

Hi, Juan. This is Lincoln. Thanks for the question. Good to hear your voice this morning. You know, coming out of last year in the first half, recognize that we had some opportunities to tighten up some of our processes and make some structural adjustments to prepare for 26. We laid that in with the investments that we've been making and some of the technologies and making sure that we have the right teams. And in the back half of 25 showed great improvements. As we came into 26, as you know, we had a little bit heavier lift with the large release expirations in the first and second quarters. The teams did a fantastic job managing through that, probably even a little bit better than we expected. and as we got through what was a little bit of an uncertain period for us, we were able to see that we can handle those types of changes to the lease expiration schedule. So as we move to the back half of the year here, all those improvements remain in place and we expect that we'll continue to see great benefit from the things we've done. I wouldn't expect the and some of the other components that are on the controllable side to remain in negative territory. Back half, I would expect something closer to low single digits or inflation-like.

Thank you. Our next question comes from the line of Jamie Feldman with Wells Fargo. Please proceed.

Hi, thank you. This is Connor on with Jamie. Thinking back to the last earnings call, I believe Atlanta was showing some early green shoots and there's a bit more caution on Texas and Phoenix. Looking at two key results, Houston, Dallas delivered blends over 2% while Phoenix and Tampa blends were a bit weaker. How would you say those markets have performed versus your initial expectations and where do you still need to see some more evidence of a recovery?

Yeah, thanks Connor. We're actually very pleased with what we've seen in the vast majority of our markets from a pickup and occupancy from a rate perspective. You can see that in the May, June and extension into July performance. Especially pleased with some of the pickups and occupancy that we saw in some markets into July. As far as Atlanta specifically goes, we had a pickup into July there. still probably running a little bit less than what we want to be on on total occupancy and rates seem to be you know treading water a little bit so it's not it's not the bright spot of the portfolio but again we're seeing improvements in a lot of places Tampa while you know again kind of flat on occupancy and and need some work on rate we are seeing some green shoots there as well this time of year we We've seen a reduction in supply in the Tampa market for the first time in quite a while. And we expect that that will flow through into results over the next few quarters. Continue to see great strength in the Midwest and some of our Western markets. Seattle continues to be wonderful for us. High occupancy there. Boise, Salt Lake City. Most of these markets are trending in the 96% to 97% range. So very, very happy with the way that things have moved through the season.

Thank you. Our next question comes from the line of Eric Wolf with Citi. Please proceed.

Hey, thanks. I think in the past you said that you only have about 33% of leases expiring in the back half of this year. Correct me if I'm wrong on that. I was curious sort of how that compares to prior years, so last year and the year before that, to sort of understand the expiration risk. Assuming, you know, it's actually less than the last couple years, does that to influence how you think about renewals in the back half. Does that allow you to be a bit more aggressive because you're not risking as much occupancy? Just trying to understand how that sort of impacts your strategy.

Hi, Eric. Thanks for the question. As you know, this lease expiration management initiative of ours has been a multi-year effort. We made the broad brush stroke changes to that in 25 where we saw expirations land kind of in the 50-50 range is what we talked about. It looks much more closer to your observation this year which is two-thirds, one-third. Again, very proud of the way that we managed that for the first part of the year and we're looking forward to the benefit of that in the back half of the year. Part of that benefit will be on the renewal side and that's A natural part of our usual curve where as activity slows down and resident movement slows down we have a little bit more opportunity on the renewal side. We talked about those trending into the three and a half percent range and we should see that student migrate in that direction over the next couple months. The other benefit is that as that activity slows down this year on the backside of leasing season, that's going to match nicely with the expirations. Those will also slow down and we expect to be in a much better inventory position. And as we said in the past, our objective is always to go into the first part of every year in the best position possible from an occupancy standpoint. And we think we have a great shot at that this year given the shape and how we plan for it.

Thank you. Our next question comes from the line of handle Thank Yous with Mizuho Securities. Please proceed.

Hey, good morning out there to you guys. I wanted to talk about development. It sounds like the projects in your pipeline, the projects that are releasing up, seems like they've been a bit better in part of the raise here. So can you talk about what you're seeing in the in the pipeline versus your underwriting on the lease ups and where the yields are coming in versus the five and a quarter, I think you mentioned in prior quarters. And what are you underwriting for projects you're starting today? Thanks.

Thanks, Sandell. This is Brian. As I mentioned, my prepared remarks, we're really pleased with the lease up of our new deliveries this year. And we've seen a little bit of an improvement in yields coming out of Q1 into Q2. A lot of that's just due to pricing. You're seeing the benefits of some of our pre-leasing initiatives that we started last year and are continuing to refine. If you look at the first half of the year, we leased about what we delivered, which is very healthy when you think about these projects that are still in development. And then a really interesting fact, if you look at the back half of the year, I think we're on schedule to deliver about 700 houses, and of those houses, already 40% are rented. And what that means is it's very healthy for us to be able to do it from a pricing perspective, from a kind of migration through the development process and delivery process. And in the event, this is one of the benefits of owning the entire development cycle in-house, we have the ability to deliver more quickly or slow down those deliveries on a monthly basis as we plan into next year. Those yields, again, are a major function of rents. They look really good coming into Q2. We're optimistic that there's some nice changes going on. And the new deals that we're looking at, really think of it in terms of replenishment of some of the pipeline to maintain good continuity in the development markets that we really like. But the few deals that we've closed this year are looking to yield into the sixes. We're getting there through a couple of different ways. We're seeing some favorable opportunities on the land side. There's been some optimization in the way that we're designing and delivering these houses. And there's just a ton of demand for them, as we talked about in the past. So I would think about the new deals we're looking at that will close a few more in the balance of this year as well are in the sixes. And we're working through kind of the mid to low fives right now.

Thank you. Our next question comes from the line of Steve Sackler with Evercore ISI. Please proceed.

Yeah, thanks. Good morning. Thanks for the comments on July. I was just hoping if you could maybe clarify, you know, what your expectations are as it relates to occupancy and 3Q, 4Q, and just also your expectations about blended spreads. I realize occupancy dropped a lot last year. I'm just trying to figure out kind of the cadence of occupancy and blends in the back half. Thanks.

Hi, Steve. Thanks for the question. This is Lincoln. Yeah, we're aware that the curve looks a little bit differently this year. We expect to hold occupancy in the back half. We talked about that on a full year basis in the high 95 area. We're pleased with the way that July ended again with seeing building occupancy in many of our markets which gives us a great shot at doing this. You know that's supported in part by the lease expiration management program that we talked about a little bit earlier. New lease rate growth is still anticipated to be in the flattish area for the full year and then again the The renewal rates in the 3.5% area would blend from the low 2s.

Thank you. Our next question comes from the line of Jana Gallen with Bank of America. Please proceed.

Thank you and congratulations on a great quarter. Maybe a question going back to capital allocation and if you could talk about how you think through the preferences between share buybacks, the development program, and maybe where today's seller expectations for some smaller portfolio transactions are.

Yeah, morning, Jana. Chris here. You know, why don't I start on, you know, the buyback piece and then between Brian and I, we can talk a little bit about portfolios. On the buyback piece, I would say our view there is really no different than the past couple of quarters, where we continue to very much believe in the business and believe in the stock. And you can see that in how active we've been over the past about nine months or so now, including repurchasing about $123 million just recently in the second quarter. which brings total repurchases over the past nine months to a little over 3% or so of shares and units outstanding at an average price of about $31 per share. Since then, it's been nice to see that the stock has started to move in the right direction. But look, going forward, we continue to watch the stock closely right alongside and just like any other form of capital allocation alternative. If more opportunities look attractive, like we've talked about before, we have more capacity. Leverage ended the quarter in the low fives. That's below our long-term target. I love what you talked about in prepared remarks. Dispositions are tracking better than we were expecting at the beginning of the year. And then we still have about $377 million or so of remaining capacity in our current repurchase authorization.

And then with regards to portfolios and what we're seeing out there, as most everyone knows, the consolidation environment this year was really on pause with all the legislation and the attention from Washington. There were a couple of deals that closed in January, and then it really was a little bit of a wait and see. Post-legislation, we've seen a little bit more activity. There are some deals that are coming. We're talking to some owners. And what's interesting for us is this legislation preserved our two major growth channels, our outlook for growth in the future due to our in-house development program and then the opportunity to consolidate portfolios. On the other hand, it affects the growth opportunities for some of the other smaller companies who are relying on MLS purchases. And these additional regulations, I think, are going to make that more difficult. Not impossible. There are exceptions. The rules are still being written. but it will make it more difficult and potentially less attractive. As a result of that, you couple that with the importance of an optimized and efficient operating platform and that puts us in a really good position to add a lot of value to the portfolios and provide a complete solution to sellers who might find the space less attractive in light of the recent changes. Our expectations are that this will play out over the next 12 to 18 months as people really look to the long-term plans. But we are seeing uptick in activity. In terms of seller expectations and pricing, we haven't seen anything trade. It's a little bit early to nail those numbers down, but we would expect the sellers to become realistic with what we can offer them over time.

Thank you. Our next question comes from the line of Adam Kramer. with Morgan Stanley. Please proceed.

Hey, guys. Thanks for the time. Just wanted to talk about sort of the sequential improvement to new lease from, I guess, from the quarter to July. Just sort of what's driving that overall? Is it sort of feeling better about where I can see it as concessions, just general sort of simple pricing? and then I guess more broadly if you think about sort of the the trajectory of this peak leasing season how would you sort of frame the way it played out I guess relative expectations or you know relative to quote unquote normal year relative to last year just sort of wondering how seasonality ended up playing out because I think there were some concerns to start the year given sort of what transpired a year ago yeah thanks thanks Adam appreciate the question

I think the shape of the season played out largely like we expected from the standpoint that we saw a healthy level of demand that continues for SFR much like we've seen in previous years. I think the thing that made this year a little bit different was a couple of things. One was we're seeing this demand set against a modestly improving supply picture. And that's encouraging given what we were hoping for at the beginning of the year. The second thing that's really moving, you know, the length of the season into July and the performance you saw there was just a strong seasonal execution by our teams. We had our field teams were able to, despite having the largest number of expirations for the year in June, turn homes quickly, get them back to market, deliver them to our leasing teams, have them lease them quickly and take advantage of the demand that existed in the peak season. and I think that's the thing that we've done differently this year as we've really tried to match our activity, our expirations and other business operations to the demand that exists in the season. So largely playing out like we've expected and planned for and we're looking forward to continuing to seeing benefits from that plan in the back half of the year.

Thank you. Our next question comes from the line of David Siegel with Green Street Divisors. Please proceed.

Thank you. Given guidance in the year-to-date performance, it seems to imply a slowdown in revenue growth in the second half versus the first half.

I appreciate all the cover on the leasing building blocks, but I just want to try to understand what's really driving that expectation for a decelerating revenue growth trend.

Yeah, morning, David. Chris here. A couple things there. One, the main thing that I would point out is keep in mind the timing of earn in rolling from last year into this year. And that's one of the things that we talked about at the beginning of 2026. And if you think about blended spreads in 2025 being in the mid threes plus, you know that's a contributor to this year's overall revenues growth but obviously earn in from last year is going to contribute into the first six months of this year and you can see that being a little bit of a factor in terms of first half versus second half of 2026 revenue growth but more broadly you know I would say things in general are playing out pretty similar to what our range of expectations were at the start of the year and I know Lincoln walks through the pieces but you know the pieces that he walked through occupancy so far very similar to what we were expecting. New lease performance almost dead on top of what we were contemplating at the beginning of the year and then renewals you know like Lincoln was talking about running in the low threes you know touch better than what we were expecting at the start of the year but you know keep in mind we're talking about tens of basis points on a portion of our leases and we still have a lot of work left to do but nonetheless We're very optimistic that our teams will continue to execute at the highest level. And, you know, if you think about the year that the setup is playing out really, really nicely. And, you know, especially on that renewal side, it's not totally out of the question that we could land at the full year a touch above the mid.

Thank you. Our next question comes from a line of Jesse Letterman with Zellman and Associates. Please proceed.

Hey, thanks for taking the question. Question on the development platform trajectory. So you framed keeping it in motion in your highest conviction markets as being really mission critical. But even though you've had a disposition run rate that's tracking ahead of plan, like you discussed, you've left the full year guide unchanged, which implies the second half deliveries are going to be among the lowest for any half since the program really began to ramp. And so given your match funding, It seems like you do have capacity to do more. So the question is why hold the delivery guide flat rather than rather than raise it? Is it kind of deliberately throttling capital elsewhere or conservatism? Any info on that would be great. Thank you.

Thanks, Jesse. This is Brian. Development is a little bit different than some of the other acquisition channels in the past. If you go back to kind of the history of the company, we had the ability to almost and so forth. But development requires a plan and a strategy and it's a little bit less nimble in the short term. We put together a strong plan this year for 1,900 deliveries, keeping all of the markets in a healthy position with land replenishments that allowed us to retain that optionality as the cost of capital environment improves at some point or There are other factors that make the development yields more attractive. So we really like the level that we're delivering at this year. The back half of the year being a little bit less than the first half of the year is indicative of the strategy of delivering homes into stronger demand environments. And you can see that playing out in the success that we've had in lease up on new deliveries into this year. So we're pleased with our strategy and we're going to continue to implement it with a little bit more of a balance of deliveries to the first half.

Thank you. Our next question comes from the line of Michael Goldsmith with UBS.

Please proceed. Good afternoon. Thanks a lot for taking my question. I'm here with Amy Proband. The peak leasing season got off to a slow start, but it seems to have been extended into early July. Is there anything to point to in terms of Customer Behavior, which you think has led to this shift?

Thanks for the question. Appreciate it. This is Lincoln. There's nothing to point to in terms of customer behavior necessarily. I think, as I mentioned before, the peak season had more to do with, again, the slightly improving supply environment. and just execution by the teams and the setup of our plan for the year. So we plan to capture as much as demand as we could while the season lasted. That's reflected in the higher number of expirations in the first part of the year. As that played out this year, we saw the same trajectory that we would normally see in most years with the peak of demand occurring in May and June. And then as we moved into July, we just saw a very nice extension of the results, given that we were able to turn those homes quickly, lease the homes quickly, giving us a nice extension of that performance and a setup into the back half that's going to be beneficial from an occupancy and rate standpoint. So I wouldn't say anything large on the consumer side. Again, just a little bit better supply and the same foot traffic competing for lower inventory.

Thank you. Our next question comes from the line of Brad Hefner with RBC Capital Markets. Please proceed.

Yeah, thanks everybody. Lots for future delivery have obviously been declining for some time. I know part of that was The relative attractiveness of the yields versus the repurchase, and I'm sure the regulatory uncertainty had you pausing on additions as well. You did mention the yields looking better and maybe seeing some loosening on the land side. So I'm wondering, should we see those lots sort of stabilize now that the regulatory stuff is out of the way? Should they go up? Will they continue to drift lower? What's the right sizing for that program?

Yeah, thanks, Brad. This is Brian. You're exactly right. We're expecting to replenish land through the balance of the year. I think it was really quiet on the land acquisition side at the first half. And then the question too is what size pipeline do you want relative to your future deliveries? And is it three years, three and a half years of supply? Part of that has to do with the type of land that you're buying. One of the nice things that we've seen of late is VDL opportunities, opportunities to purchase land that's further down the line on development, which would allow us to effectively shorten the pipeline and deliver into vertical and deliver finished homes more quickly. So there's a little bit of a different mix going forward. But no, you're exactly right. We plan to add some land and the pipeline has been reduced and rebalanced in some ways. to kind of reflect the current environment. But going forward, we're seeing some really good deals and we'll be adding to that to the balance of the year.

Thank you. Our next question comes from the line of Peter Ambrowitz with Deutsche Bank. Please proceed.

Yeah, thanks for the time. I just wanted to go back to the non-same store NOI contribution of the guidance raised and specifically the lease up. Could you talk about maybe some of the markets where lease up is exceeding your expectations on development and kind of the delta versus what you're expecting for the year? Has there been a unifying theme in terms of whether it feels like the upside to your expectations has been more supplier demand driven? Thanks.

Hey, Peter. Appreciate the question. Chris here and then I'll start and Lincoln can fill in if helpful. You know, actually, as we think about that That initial lease up of recently delivered homes outside of the same home pool, you know, the really encouraging part there is that there isn't a single market that stands out. They really all stand out. And that is a reflection of the team's level of execution across the board. And, you know, there is a, you use the term unifying theme. The one unifying theme across the board is our ability and the team's ability to actually pre-lease homes before they're actually finished from a construction standpoint, which accelerates obviously the lease up timing. And if you want an interesting statistic that really kind of demonstrates it across the board, in the first six months of this year, we actually executed more initial leases than actual homes that were delivered. And that really underscores the point on pre-leasing, which means, I think Brian mentioned this a couple of minutes ago, a meaningful portion of our deliveries for the back half of the year have already committed leases on them at this point. And while we are expecting the teams to do a good job this year, to your point in terms of upside to the guide or upside to our expectations at the start of the year, The team definitely exceeded what we were expecting at the beginning of the year, which has driven some of the upside and a portion of the guidance increase.

And then this is Lincoln. It's hard to overstate the importance of this program from our perspective in that it has benefits to the company that Chris laid out and then benefits to the resident as well. If you imagine the ability of a resident who's typically locked into a 30-day timeline, to find a home, being able to find a home 90 or 120 days out, especially if they're migrating to a new market, taking a new job in a different place. They have the ability to go and find that home on their own timeline, which matches our deliveries. They have the ability to lease a brand new home that they may not otherwise have access to in great areas with great schools. They have the excitement of watching that home be built. and moving into a brand new home with that new home smell and the other things that would be part of the new build process at a 25% discount to what it would cost if they purchased it today. So we're really proud of what we're offering and we're committed to finding things that are both a benefit to the company and to our residents.

Thank you. Our next question comes from the line of Jade Romney with KBW. Please proceed.

Thank you. Are you seeing any opportunities to increase third-party property management? And also, are there any AI use cases you've found in the area of property management to make it more efficient and perhaps maintenance more preventative or even self-performing on the part of tenants?

Yeah, thanks, Jay. This is Brian. Our views on third-party management really haven't changed as we've gone through this year. We went out and tested it, as you know, a few years back and decided that we were better on focusing on some of the opportunities we had with development and whatnot. But we do have the platform set up and our perspective this year, especially in light of some of the issues on the regulatory side, is that it'll be a nice tool to allow us to be a full solutions provider to any owner, any portfolio owner who may want us to run through a disposition process on a portion of homes that we didn't want. So the example that I gave a couple of times ago was that if an owner has 1,000 houses, if 500 fit our buy box, we can take those 500 on balance sheet if the economics work and then use third-party management to manage the additional homes as appropriate through the disposition process or whatever solution fits that particular seller. We think it gives us a competitive advantage on the portfolio and consolidation front.

Thank you. Our last question comes to the line of Jesse Lederman with Zellman and Associates. Please proceed.

Hey, thanks for taking the follow-up. I'm kind of on the similar vein in terms of potential opportunities that may arise from the legislation. Seems to be an increased reliance on new construction for rental stock. So I'm curious, have you ever thought of or would you consider potentially expanding the development platform to perform for others so you can generate additional revenue and also increase your capacity, which may lead to some more operating leverage on your own developments. Thank you again.

Yeah, thanks, Jesse. This is Brian. Yeah, exactly. We're an entrepreneurial group. We've been in discussions for fee-building opportunities that could lead to third-party management in the interim to ultimately acquisition opportunities. We're open to that. We don't have any deals to announce today. But it's an interesting option for us for the exact reasons that you detailed.

Thank you. There are no further questions at this time. I'd like to pass it back to management for any closing remarks.

Thank you for your time today. We really appreciate the continued interest in AMH and look forward to speaking with you next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.