Invitation Homes Inc.

Greetings and welcome to the Invitation Homes 3rd Quarter 2024 Earnings Conference Call. All participants are in listen-only mode at this time. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Scott McLaughlin, Senior Vice President of Investor Relations. Please go ahead.

Good afternoon and welcome. I'm here today from Invitation Homes with Dallas Tanner, Chief Executive Officer, Charles Young, President and Chief Operating Officer, John Olson, Chief Financial Officer, and Scott Isen, Chief Investment Officer. Following our prepared remarks, we'll conduct a question and answer session with our covering sell side analysts. In the interest of time, we ask that you please limit yourselves to one question. and then re-queue if you'd like to ask a follow-up question. During today's call, we may reference our third quarter 2024 earnings release and supplemental information. This document was issued yesterday after the market closed and is available on the investor relations section of our website at www.indh.com. Certain statements we make during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources, and other non-historical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated. We describe some of these risks and uncertainties in our 2023 Annual Report on Form 10-K and other filings we make with the SEC from time to time. Except to the extent otherwise required by law, Invitation Homes does not update forward-looking statements. and expressly disclaims any obligation to do so. We may also discuss certain non-GAAP financial measures during the call. You can find additional information regarding these non-GAAP measures, including reconciliations to the most comparable GAAP measures in yesterday's earnings release. With that, I'll now turn the call over to Dallas Tanner, our Chief Executive Officer.

Thanks, Scott, and good afternoon, everyone. Our third quarter results reflect the hard work of our teams to maintain high occupancy, control costs, and continue to provide an outstanding experience for our residents, who are now staying with us nearly 38 months on average. I'm particularly thankful for the work our associates have done to demonstrate our trademark genuine care to residents impacted by the recent hurricanes. When we started this business a dozen years ago or so, what was clear to us then remains clear to us now. there is a strong need and a desire for choice and flexibility when it comes to leasing a home. This is evident by not only the 14 million Americans who choose to lease a home today, but also by the 110,000 households that choose to lease with us. We are very proud of being the premier single family home leasing and management company that is committed to remaining the most transparent and offering the highest service while providing the best overall resident experience of any other provider. Our goal, is to make leasing a home as easy, convenient, and carefree as leasing a car or renting a vacation home. Thanks to the hard work of our teams, our external growth initiatives, and our investments in technology, I'm pleased with how far we've come and where we still aim to go. This includes our rapid expansion into third-party management, which together with our joint venture business has now reached over 25,000 homes. It also includes our strategic home builder relationships that we continue to deepen and grow and the expansion of our value-add services like smart home and bundled internet. Our value-add services are on track to achieve our target of over $60 million in gross revenues this year, and we continue to explore additional ways we can offer convenient and desirable amenities for our residents. Returning to our current results, last night's earnings release contained our latest expectations for the full year of 2024. These reflect our penny raise at the midpoints for both core FFO and AFFO per share, along with very favorable same-store expense updates that John will discuss in detail in a moment. In addition, our revised guidance includes some moderation in same-store revenue growth during the second half of the year. As we've pointed out previously, this is due in part to our return to a healthier, more sustainable cycle following the significant market rent growth we experienced during the past three years. In addition, as we noted on our July call, it's also being driven by some supply and absorption pressures, including from new BTR listings and motivated for-lease pricing in a few of our markets, primarily Phoenix, Tampa, Orlando, and Dallas. With peak BTR deliveries already behind us and with a large drop-off in new starts that began in 2023, it's expected that new BTR deliveries could fall as much as 65% next year. Based on this, we believe the current supply pressures are temporary in nature and that our team's focus on absorption over the next few quarters will help us to work through this period. Outside of the near-term noise, we believe these markets remain attractive for long-term risk-adjusted returns with strong population, job, and future rent growth. In that regard, our investment thesis remains supported by the demographics, which remain very exciting for our business. John Burns research expects the number of renter households to grow by nearly a half a million people per year for the next four years. And to continue growing strong beyond that through 2033. It's been over 10 years since we've seen a renter expansion of that magnitude. We believe our portfolio of homes is uniquely positioned to benefit from that long term demand growth. Burns also notes that there will be over 13,000 people turning 35 years old in this country every day. for at least the next 10 years, which is right in the ballpark of our average new resident age of approximately 38 years old. With that macro picture intact and fundamentals remaining strong, we continue to be as bullish as we've been in our business and its future prospects. In closing, I'd like to once again thank all of our teams for their hard work, their dedication, as well as our investors for their continued trust and support. We remain excited about the opportunities that lie ahead for us, and we expect to continue achieving solid growth that remain among the strongest in the residential sector. With that, I'll now pass the call on to Charles Young, our President and Chief Operating Officer.