Invitation Homes Inc. Q3 FY2025 earnings call

• Dallas Tanner recognized the exceptional teams and the value proposition of choice, flexibility, and high-quality single-family living. He discussed housing dynamics supporting steady demand for SFR, with renewal performance outstanding (same-store renewal rate growth of 4.5%) and average resident tenure at 41 months. Mentioned growth channels: homebuilder partnerships, homebuilder month-end inventory, construction lending program, and third-party management. - Tim Lobner highlighted third quarter operating results, including average occupancy of 96.5%, strong renewal business (over 75% of book), renewal rent growth of 4.5%, new lease rent growth slightly negative, other property income growth of 7.7%, bad debt improvement by 20 basis points, core revenue growth of 2.3%, same-store core expenses up 4.9%, and same-store NOI growth of 1.1%. Also discussed October performance with occupancy average of ~96%, renewal spreads at 4.3%, and blended rent growth of 2.3%. - Jon Olsen provided an update on strong balance sheet (total available liquidity $1.9 billion, net debt-to-EBITDA ratio 5.2x at quarter end), successful $600 million bond offering in August, and revised full year 2025 guidance: increased core FFO per share midpoint to $1.92, AFFO per share midpoint to $1.62, and same-store NOI growth midpoint to 2.25% with adjusted core revenue and expense guidance ranges.

In the third quarter, Invitation Homes achieved an average occupancy of 96.5%. Renewal rent growth was 4.5% in the third quarter, with same-store renewal rate growth of 4.5% (30 basis points higher than the third quarter of 2024). New lease rent growth was slightly negative due to elevated supply in select markets. Blended rent growth for the quarter was 3%. Core revenue grew 2.3%, and same-store NOI grew 1.1%. October had a preliminary same-store occupancy average of approximately 96%, with renewal spreads at 4.3% and blended rent growth of 2.3% for the month.

• Raised full year 2025 core FFO per share midpoint to $1.92. - Raised full year 2025 AFFO per share midpoint to $1.62. - Raised same-store NOI growth midpoint to 2.25%, with core revenue guidance in the range of 2% to 3% and core expense guidance in the range of 2% to 3.5%.

Q: Jana Galan asked about supply outlook for 2026 with BTR deliveries and shadow supply.

A: Dallas Tanner responded that supply fits into categories like BTR deliveries, for-sale product converting to rental, and supply from professional operators, nuanced by market, with some markets like Florida and Atlanta showing positive signs but unknowns remaining.

Q: Eric Wolfe asked about fourth quarter numbers and hitting guidance.

A: Tim Lobner responded that occupancy dip was expected, renewal book of business is healthy, Q3 renewal rates grew, October renewal rate was 4.3%, and the year is progressing as expected.

Q: Michael Goldsmith asked about tenant negotiations in BTR communities.

A: Tim Lobner responded that consumers do negotiate on renewal, seeing the open market, and they negotiate as needed to maintain occupancy targets, with no difference between build-to-rent and scattered site portfolios.

Q: Steve Sakwa asked about impacts of Washington rhetoric on business with homebuilders.

A: Dallas Tanner responded that homebuilders are seeing softening demand, managing inventory, with for-sale listings up, and the total cost to own vs. lease still wide, leading to pickup in renewals business.

Q: Haendel St. Juste asked about capital allocation, acquisition guide, and stock buybacks.

A: Dallas Tanner responded that capital allocation includes opportunistic buying and stock buyback as an added tool, with Scott Eisen mentioning about 70% of acquisitions were forward purchase deliveries and 30% opportunistic buying.

Q: Austin Wurschmidt asked about tightening revenue range and specials.

A: Jonathan Olsen responded that they tightened the revenue range due to dynamic environment, and Tim Lobner mentioned targeted specials in October and November to boost traffic and generate leasing momentum.

Q: Brad Heffern asked about stock repurchase attractiveness and governor.

A: Dallas Tanner responded that stock buyback is an added tool, subject to blackout periods, and used judiciously with Board discussion.

Q: Jamie Feldman asked about impacts of immigration policy changes.

A: Dallas Tanner and Scott Eisen responded that no impact on occupancy, FICO scores, labor and land costs moderating generally.

Q: Jesse Lederman asked about front-end demand and pricing power.

A: Tim Lobner responded that demand is healthy, website traffic consistent, and Invitation Homes captures fair share with ProCare and value-add services.

Q: Juan Sanabria asked about loss to lease and turnover.

A: Jonathan Olsen responded that loss to lease is low to mid-single digits, turnover is seasonal, and expect turnover to return to long-term average with high renewal propensity.

Q: Adam Kramer asked about demand drivers and job growth.

A: Dallas Tanner responded that renewals are healthy, no degradation in customer profile, new lease supply issue is main variable, and transaction volume is a proxy for rent growth.

Q: John Pawlowski asked about performance in non-same-store pool.

A: Dallas Tanner and Jon Olsen responded that earlier acquisitions may need to catch up, but confident in product and investment approach.

Q: Julien Blouin asked about public vs. private market valuation disconnect and capital allocation.

A: Dallas Tanner responded that disposition strategy is accretive, and share buyback is a tool to create shareholder value.

Q: Richard Hightower asked about competitive supply buckets.

A: Dallas Tanner responded that supply buckets are nuanced by market, with some markets showing positive signs, and need to be aggressive in filling vacancies in competitive markets.

Q: Jade Rahmani asked about surprising markets.

A: Dallas Tanner responded that Florida markets strong on renewals, Atlanta generally strong, and Chicago, Minneapolis outperforming recently.