American Homes 4 Rent Q4 FY2025 earnings call

• Bryan Smith addressed the executive order on housing affordability and AMH's role in the solution, noting over 5,000 households left AMH homes to purchase a house in 2025. - AMH has a development program that added over 14,000 newly built homes since 2017 and plans to deliver ~1,900 new homes in 2026. - Chris Lau reviewed year-end results, balance sheet, and 2026 guidance, including share repurchases and capital deployment for development. - Lincoln Palmer discussed occupancy trends, seasonal leasing, and market supply impacts.

In 2025, core FFO per share was $1.87, representing 5.4% year-over-year growth. For the fourth quarter, net income attributable to common shareholders was $123.8 million or $0.33 per diluted share and $0.47 of quarterly core FFO per share in unit, with full year 2025 net income attributable to common shareholders at $439 million or $1.18 per diluted share and $1.87 of core FFO per share in unit. In 2025, AMH Development delivered 490 total homes, with full year deliveries over 2,300 homes. Disposition activity saw 646 properties sold in the fourth quarter, with full year 2025 sales at 1,827 properties generating net proceeds of approximately $570 million. For 2026, core FFO per share unit is expected to be $1.89 to $1.95 at midpoint, with same-home core NOI growth expected at 2% midpoint, and development plan to deploy ~$750 million of total capital adding ~1,900 new constructed homes.

• Full year 2026 core FFO per share unit expected at $1.89 to $1.95, midpoint 2.7% year-over-year growth. - Core revenues growth expected at midpoint 2.25%, occupancy in high 95% area. - Core property operating expense growth expected at 2.75%, with property tax growth ~3% and other expenses mid 2% growth. - Development plan to deploy ~$750 million of total capital, ~$550 million for wholly-owned portfolio adding 1,400 homes funded by recycled capital. - Board approved new $500 million share repurchase authorization, with patient approach to additional repurchases given market conditions.

• Uncertainty around the executive order's impact on the single-family rental industry, including potential caps on institutional investors and how it may affect smaller operators. - Supply pressure in some markets leading to extended lease-up times and challenges in working through standing inventory. - Capital market uncertainty affecting development and share repurchase plans. - Political and regulatory changes that could impact housing affordability and AMH's operations.

Q: Can you just talk about why you're expecting a flatter occupancy and rent growth curve than you normally expect? And I guess, specifically what that means for your blended rate growth expectation? And then I guess, lastly, on the occupancy, you said that you're expecting it to be flatter this year as well. But if I look at your fourth quarter, you're down like 30 basis points year-over-year. And I think that's what you're expecting through the full year of 2026. So I guess why -- I guess it seems to me like你're expecting something more sort of seasonal like you saw in 2025. So just help us work through both those elements.

A: Lincoln Palmer and Christopher Lau discussed delayed leasing season start, supply pressure, and flat new lease and renewal rates contributing to flatter occupancy and rent growth curve.

Q: Maybe just as you thought about giving your guidance for the year, I mean, there's a lot of moving pieces out there on the political front, on the demand side, on the supply side, where would you say there's the most variability to your numbers? And maybe talk us through the high end, the low end of the range and what gets you to either end across the key line items.

A: Bryan Smith talked about supply variability in some markets, demand still strong but with higher supply levels leading to extended lease-up times affecting numbers.

Q: Just wanted to focus a little bit on the development pipeline. I mean it sounds like you're slowing deliveries a little bit and being a little bit more cautious, I guess, certainly given the capital markets environment. But like where are you seeing development yields for the product you're starting today based on today's rents and today's cost? What can you get? And I guess, how do you weigh deploying capital there against the buybacks? I know you're being probably a little bit cautious given the political environment, but sort of how do you weigh those two things today?

A: Bryan Smith and Christopher Lau discussed development yields in the 5.3% area in 2025, similar expectations for 2026, and prudent sizing of capital for development and balanced approach with buybacks.

Q: Maybe some color on OpEx. You outlined expectation for tax, I think going to be up 3%, 4 to 5 -- sort of the 4% to 5% long-term average we've seen. Is there anything unique worth highlighting? Do you think this is a sustainable level near term? And maybe some color on turnover, what you're expecting in your recent insurance renewals.

A: Christopher Lau discussed moderate property tax growth in 3% area, successful insurance renewal campaign leading to double-digit decrease in insurance costs, and tight expense controls on remaining expenses.

Q: If you could talk a little bit more about the supply pressure you saw in '25, what surprised you, would be a little bit more specific in terms of markets. And how that may impact your strategy going forward on markets? Again, Midwest continues to outperform. Do you want to try to lean in more there? given the pressure你're seeing, let's say, in the Sunbelt and your thoughts on that supply pressure in '26.

A: Lincoln Palmer discussed supply impact in markets like San Antonio, Phoenix, Las Vegas, and highlighted Midwest markets with strong fundamentals and potential to lean in more.

Q: Recognizing that you're going to take a more patient approach to additional buybacks this year. Would you need additional sales activity dispositions in order to fund any additional buybacks? And I recall that you had 20,000 homes that were released from collateral from being securitized, it's collateral last year. Would we see that as a source of additional funding this year?

A: Christopher Lau discussed need for balance in capital deployment, natural timing governor in dispositions due to leases rolling and homes being vacant, and potential source of funding from released collateral but with governor on sale volume.

Q: I was curious if you could comment a little bit about the news from the White House last night about potentially capping the single-family or the investor band at about 100 homes per organization. So if that's a much lower cap than previously contemplated, just going through a thought exercise of how do you think that plays out in the industry? Does that potentially force a lot of subscale operators to either pull rental inventory out of the market or sell inventory quickly. What do you think those other smaller tier operators are going to do if that type of cap is in place?

A: Bryan Smith discussed active engagement with policymakers, unclear impact on industry, and importance of single-family rentals in housing solution.

Q: Yes. Obviously, I appreciate all the color on the supply impacts. When do you think we're going to be in a more normal environment just from a supply-demand balance standpoint?

A: Lincoln Palmer discussed dependence on consumption of standing inventory and watching leading indicators for improvement.

Q: When you spoke in late October, you noted your internal dashboards were indicating some inflection point in seasonal leasing activity. But it looks like in November versus December, occupancy was lower sequentially and that's continued here in January. So what changed over the subsequent few months relative to your expectations in October? And if you could just talk through the renewal rent growth falling roughly that 70 basis points [ sequentially ] into January. That would be great as well.

A: Bryan Smith discussed moderation in seasonal leasing activity, adjustments in pricing strategy, and support for occupancy and renewal rates.

Q: Can you talk a little bit about pricing trends at the build to rent versus the scatter site product? And are you offering concessions at either or both of those segments in your portfolio?

A: Bryan Smith discussed favorable demand for communities and scattered site with no concessions, and expectation of pricing power return as supply pressure alleviates.

Q: This is Jason Sabshon on for Jade. So homebuilders have leaned in or rate buydowns and incentives lately. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing that aggressiveness from builders drive any increase in move-outs to buy.

A: Bryan Smith discussed move-outs to buy remaining steady, anecdotes of builders' incentives, and watching for impact on market share and inventory.

Q: Looking at the development pipeline, you have some lots in some markets outside of the Sunbelt, like the Midwest and in the West Coast -- just wondering where the delivery this year located and where you'd have the preference for starting new developments.

A: Bryan Smith discussed focus on Columbus, Carolinas, Seattle in Midwest and West Coast, and preference for high-demand markets.

Q: Thanks for taking the follow-up. Looking at the changes in your same-store pool, your third quarter occupancy was 95%, like as reported last quarter, and now it's 96.4%. So there's a similar like a 50 basis point change based on what you sold. I guess what is the reason for that? I mean is it -- are you selling more vacant homes than normal? Why was there such a sort of jump in the occupancy based on the new same-store pool? Because obviously, it creates a little bit of a more difficult comp for you.

A: Christopher Lau discussed smart asset management decisions identifying underperforming properties for disposition, leading to upward lift in same-store pool occupancy.

Q: And then last question. You normally have a pretty good idea, not perfect, but good idea of sort of what forward occupancy looks like and I know it can miss based on various factors. But I guess, as you look at things 30, 60 days out based on your revenue management system, are you seeing that typical lift in occupancy that you normally see at this time of year, especially since you've throttled baked down a bit. Just curious if you can give us a perspective on sort of where you expect to go over the next couple of months?

A: Lincoln Palmer discussed slower start to leasing season but seeing normal upward trend in activity, expecting occupancy to move into 96s and hold into back of year.

Q: Great. Beyond the supply challenge markets that you've discussed, is the moderation you're assuming in guidance around lease rate growth or that flatter seasonal curve that you described. Is it broad-based? Are you seeing it more pronounced than either the Sunbelt or Midwest markets? And then on top of that, just curious how much that's playing into your development decisions.

A: Lincoln Palmer and Christopher Lau discussed broad-based supply impact, market-specific effects, and development sizing based on relative returns, yields, and capital market conditions.

Q: Thanks for the followup. Appreciate the time. Wanted to talk about the dispositions that were executed in not only the fourth quarter just year-to-date? Just thinking through the -- what you've been able to sell with the, it looks like net proceeds were just a shade under $300,000 per house. Most of your markets median resale prices are probably closer to $400,000, how would you characterize kind of the tier of the dispositions that you're selling? Are these houses typically lower quartile or the middle of the road? Or are they fairly representative of the value of the homes in the portfolio? How should investors think about that?

A: Bryan Smith discussed noncore assets, lower sales price cohort compared to typical homes, and reason for disposition being location.

Q: Thanks for taking the followup. Chris, just given all the political noise, do you have an elevated level of advocacy costs or anything like that, that are in G&A and that are having an impact on the guide?

A: Christopher Lau discussed structural component of government affairs costs in G&A, under $0.01 per year regularly, with potential changes to be called out separately.

Q: I just wanted to follow up on the dispositions. What constraints, I guess, outside of tax issues that you have around dispositions, meaning你want certain size of homes or certain scale in the market. So to what extent are your dispositions limited by you wanting to have a good footprint in each market as you think about kind of the disconnect between kind of the sales values and kind of where the stocks trading.

A: Christopher Lau and Bryan Smith discussed tax planning, natural timing governor in dispositions due to leases rolling, and consideration of market footprint and home characteristics in dispositions.