Invitation Homes Inc (INVH) Q3 2024 Earnings Call Highlights: Strong Financial Performance Amid ...

GuruFocus News
4 min read

In This Article:

  • Core FFO per Share: Increased 6.8% year over year to $0.47.

  • AFFO per Share: Increased 7.2% year over year to $0.38.

  • Same-Store NOI Growth: Increased 3.9% year over year.

  • Same-Store Core Revenues: Grew 3.6% year over year.

  • Same-Store Core Expenses: Increased 3.1% year over year.

  • Renewal Rent Growth: 4.2% in the third quarter.

  • New Lease Rent Growth: 1.7% in the third quarter.

  • Blended Rent Growth: 3.6% in the third quarter.

  • Occupancy Rate: Averaged 97% during the third quarter.

  • Net Debt to Adjusted EBITDA: 5.4 times.

  • Available Liquidity: Over $2 billion.

  • Revised Full Year Core FFO Guidance: Raised midpoint to $1.88 per share.

  • Revised Full Year AFFO Guidance: Raised midpoint to $1.59 per share.

  • Property Tax Growth Guidance: Revised to 5% to 6.5% year over year.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Invitation Homes Inc (NYSE:INVH) reported a penny raise at the midpoint for both core FFO and AFFO per share, indicating strong financial performance.

  • The company has maintained a high occupancy rate of 97% during the third quarter, showcasing effective property management.

  • INVH's strategic expansion into third-party management and joint ventures has reached over 25,000 homes, enhancing growth potential.

  • The company has successfully controlled costs, with same-store core expenses increasing only 3.1% year over year.

  • INVH has a strong investment-grade balance sheet with over $2 billion in available liquidity and a favorable debt structure.

Negative Points

  • There is some moderation in same-store revenue growth due to supply and absorption pressures in key markets like Phoenix, Tampa, Orlando, and Dallas.

  • New lease rent growth was only 1.7%, indicating challenges in achieving higher rental rates in certain markets.

  • The company is experiencing supply pressures from new build-to-rent (BTR) listings, impacting pricing power.

  • INVH has revised its expectations for more moderate same-store revenue growth in the second half of the year.

  • The company faces ongoing challenges from natural disasters, such as hurricanes, which have impacted operations and incurred costs.

Q & A Highlights

Q: Can you explain the factors affecting renewal and new lease spreads, especially in markets facing build pressure? A: Charles Young, President and COO, explained that supply pressure in markets like Tampa, Orlando, Phoenix, and Dallas is causing competition on price, affecting new lease spreads. However, turnover remains low, and renewal rates are healthy at around 80%. The company expects to absorb the supply over the next few quarters as demand remains strong.

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