Invitation Homes (INVH) Q2 2026 earnings call transcript

Thank you, operator, and good morning. Joining me today from Invitation Homes are Dallas Tanner, our President and Chief Executive Officer, Tim Lopner, our Chief Operating Officer, John Olson, our Chief Financial Officer, and Scott Eisen, our Chief Investment Officer. Following our prepared remarks, we'll open the line for questions from our covering cell-side analysts.

During today's call, we may reference our second quarter, 2026 earnings release and supplemental information. We issued this document yesterday afternoon after the market closed, and it is available on the Investor Relations section of our website at www. invh. 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, and different materially from those indicated. We describe some of these risks and uncertainties in our 2025 annual report on Form 10K and other filings we make with the SEC from time to time. We set to the extent otherwise required by law, we do not update forward-looking statements and expressly disclaim any obligation to do so. We may also discuss certain non-GAP financial measures during the call.

You can find additional information regarding these non-GAP measures, including reconciliations to the most comparable GAP measures in yesterday's earnings release.

With that, I'll turn the call over to Dallas Tanner. Go ahead, Dallas.

Thanks, Scott. Good morning, everyone. It's been a busy season for us. Before getting into the quarter, I want to thank our residents for the trust they keep placing in us and our field teams for how they've handled the pace. Together, we delivered a strong second quarter. Average occupancy held above 97%. Movies rate growth accelerated for the six month in a row, and we're group core FFO per share by 5%, and FFO per share by just under 6%. Tim and John will get into the details, but it's a great foundation heading into the second half of the year.

I'll take off my comments by talking about the 21st century road to housing act. The law was enacted earlier this month, providing greater clarity for our business and the broader housing industry. On other things, the act includes some meaningful provisions into speeding up and encouraging new construction. That's the goal we fully support, since we've long known that better housing affordability is achieved by increasing new supply.

In fact, that's been precisely our approach at imitation homes, growing through new construction and home-builder partnerships. We're pleased that the law lets us keep doing what we do best, offering a valuable housing solution to the millions of Americans to choose to lease, while helping deliver the new supply this country needs. In that commitment, it goes well beyond supply.

For our residents, that means continuing free, positive credit reporting, helping them build credits simply by paying their rent on time. For policymakers, it means staying closely engaged with Treasury and HUD and others as these new regulatory guidance take further shape. Beyond the legislative backdrop, demand for our homes remains healthy. According to the latest data from John Burns, an average of over $1,000 per month cheaper to lease today and to own a similar house on our markets.

Based on our average resident tenure of just now over 40 months, that adds up to more than $40,000 in total savings for a typical family. That is a compelling value proposition, along with favorable demographics and the convenience of leasing will continue to support our demand.

Turning now to capital allocation, the story during the second quarter was similar to the first quarter. Stock repurchases remained among the most attractive uses of our capital. During the second quarter, we bought back another $100 million of stock, which brings us to $600 million in stock repurchased since December at an average price of a little over $26 per share.

You share repurchases have been funded in large parts by home sales priced well above where the public market is valuing our assets. We are also starting to see early signs of a thaw on the acquisition side. You'll flow that has been relatively stagnant over the first six months of 2026 thanks to the legislative uncertainty. But with the Road to Housing Act now settled, more sellers are coming to market, including some attractive smaller portfolios.

Still early, but encouraging since it gives us another lever for a creative capital deployment. Similarly, we see opportunities in our development and our lending channels. Rescue Bill's pipeline has free accelerated following some disruption earlier this year when the bill was still in flux. And on the lending side, construction loan commitments, including some still in diligence, now total just under $350 million, with about 10% of that funded so far.

As a reminder, these loans typically yield in the high single digits and give us the opportunity to purchase the community once they're built. Zooming out at our investor day last November, we talked about building the best run SFR platform in the country. This discipline costs and capital also focused on a resident experience. That discipline has been on full display in three ways so far this year.

First, capital allocation, selling homes at a premium, redeploying that capital into creative opportunities. Second, growth, supporting our platform through the acquisition of Rescue Bill and the expansion of our construction lending business. And third, in resident satisfaction, reflected in the renewal and retention numbers Tim will walk through shortly. In short, we're doing exactly what we said we were going to do.

In mind with what Tim and John are about to cover, our first app performance gave us confidence to raise our full-year guidance. I'll let John cover the specifics here. But the takeaway is that invitation homes continues to generate strong and stable cash flows, selling homes at a premium to where the market is valuing our assets and recycling that capital creatively create value for our shareholders. Tim, over to you.

Thanks, Dallas, and good morning, everyone. I'll start with the headline. Julie's rate growth accelerated every month of January through June, tapping off peak leasing season on a high note. Her second quarter, same store renewal rate, was approximately 77%. An average length of stay for our residents remained over 40 months.

The data points reflect high level of resident satisfaction with both our homes and our service. Turning now to our second quarter, same store results. You know why I grew 1.5% year over year? There's been by 1.6% poor revenue growth, poor operating expense growth of just 1.9%. I'll touch on a few more details behind each of those items.

On the revenue side, renewal rent growth rose through the quarter. From just over 3% in April and May, the 3.7% in June, averaging 3.3% for the second quarter. Second quarter, new lease rent growth was 1.1%. Find that resulted in second quarter blended lease rent growth of 2.7%. Turnover improved 50 basis points year over year to 5.7%. And average occupancy for the quarter landed at 97.1%. Both strong results for the summer season.

On the expense side, the best news is on the controllables where expenses we manage on a day-to-day basis were down 1% year over year. So really give reflection how our teams are running the business. Fixed costs, including property taxes and insurance, increased by only 3.5% year over year. We're pleased to see both controllable and fixed expenses tracking in line with our expectations here to date.

Supply backdrop across our markets is telling a similar story. Build direct deliveries have continued to decline. And while SFR listings remain elevated, the pace of new supply growth has slowed sharply since the start of this year. In addition, according to John Burns, the markets that weren't the most over-supplied are now seeing the sharpest drops in unsold inventory of new homes.

There's still a bit of supply to work through in some markets that the trend has clearly been moving in the right direction. We'll continue to keep a close eye on this as we move through late summer and into the fall. This slower supply growth, the steady demand that Dallas described, and strong execution from our teams are all showing up directly in our numbers.

To lease rate growth picked up every month through this year through June for easing, as we'd expect for late summer, 1.2% in July. Renewals follow their own path, staying in the low 3% range for April and May before accelerating to 3.7% in June and 4.3% in July. That brings our preliminary blended lease rate growth for July to 3.4% while average occupancy for July, 96.5%. Reflecting normal seasonality from summer moveouts. Thinking together, this was a strong operating order. We headed into the back half of the year with real momentum on renewals while managed expenses to help me demand an improving supply backdrop.

Proud of how our teams have shown up for our residents this year and how their efforts have made results like these possible.

John, I'll hand it over to you.

The balance sheet and our updated guidance. Starting with our results, second quarter core FFO per share was 51 cents, up 5% year over year, and FFO per share was 44 cents, up nearly 6% year over year. In capital side, during the second quarter, we sold 657 fully owned homes, primarily to end users, for gross proceeds of about $309 million.

We bought 196 homes, all from our home builder partners, for about $74 million. Combined with our first quarter activity, this pace of dispositions has run well ahead of our original expectations, which is why we increased our full year disposition guidance for wholly owned homes by $300 million at the midpoint to $850 million. Our acquisitions guidance remains unchanged, with midpoints of $250 million for wholly owned homes from our home builder partners, and $100 million through our joint ventures.

We also deployed another $100 million for stock repurchases in the second quarter, for a total of $600 million of share repurchases since we started the program late last year. Since that time, we've repurchased approximately 22.8 million shares at an average price of $26.30 per share. For reference, this average repurchase price represents an implied value of just over $270,000 per wholly owned home. That's a significant discount compared to our year to date actual average sale price of $450,000 per home. We use proceeds from this quarter's asset sales, along with free cash flow, to reduce our revolver balance from $560 million as of March 31st to $280 million as of June 30th. As a result, we ended the second quarter with a net debt to trailing 12-month adjusted EBITDA ratio of 5.4 times, or just below our five and a half to six times target range.

Turning to the balance sheet more broadly, it remains in great shape. We ended the quarter with over $1.5 billion of available liquidity.

Substantially, all of our debt is at fixed rates or swap to fixed rates, and approximately 90% of our wholly owned homes were unencumbered. We also took steps to strengthen that balance sheet profile even further, taking advantage of favorable market conditions earlier this month. The issue $500 million of senior notes, maturing in 2032 at a 4.95% coupon. We used the net proceeds to prepay approximately half of our 2017-1 securitization, which had a $988 million balance outstanding as of June 30th. That matures next summer. Because the offering and prepayment both occurred in July, their impact isn't reflected in our June 30th financial statements for supplemental schedules. Now, we've provided the performance impact on certain metrics in a footnote to supplemental schedules to be in QC.

Reflecting on our year-to-date operating results and the benefit of this year's stock buyback activity. We raised full-year core FFO and AFFO per share guidance this quarter. With midpoints of a penny each to $1.95 and $1.65 respectively. Alongside the disposition guidance increased, I mentioned earlier. With the first half of the year now behind this, we also narrowed our same-store core revenue and NOI growth guidance ranges around unchanged midpoints, reflecting improved visibility into the balance of the year.

Also, we have a strong balance sheet, good operating momentum, multiple ways to keep creating value for our shareholders. This concludes our prepared remarks. Operator, please open the line for questions.

Thanks for the question. This is Scott. In terms of the market right now, we're not seeing any large transactions at this point. We've probably seen some smaller portfolios and sub 100 million, maybe slightly bigger than 100 million dollar size range. I think it's too early to really talk about price guidance and returns on it because we really haven't seen a lot of transaction activity. But I would say that, you know, post road to housing act if for the first six months of the year things were really quiet just because people were waiting to see where the legislation turned out. I think now that the act has been passed, I think we're seeing some capital start to, you know, open up again and start to test the waters and see where the market is.

So it's too really, it's too soon to say exactly where we think transactions are going to price. But I would definitely say that that activity is sort of picked up since the legislation got that.

Hey, Connor. Great question. Thank you. This is Tim speaking. You know, as prepared or as discussed in our prepared remarks, let me run through what we had in July. July, our renewals was at 4.3%, really happy with that, that accelerated out of our Q2 number, which was 3.3%. On the new lease side, we were at 1.2%. That's coming off a 1.8% engine. We saw a nice acceleration through Q2.

And then on the blended side, that was 3.4%. And as I shared also in the prepared remarks, we were really pleased with how the year has progressed and continues to progress. Every month on the blended side, we've seen favorable upward movement. And look, as you think about the back half of the year, as we share at several of the investor conferences, there's a regular cadence to how the industry moves, right? You know, let's just start with occupancy, because that also informs us on how we go about our rent rate.

Occupancy, like you start the year and you continue to grow into peak season. During peak season, you see a lot of households move out, typical time for families to move out of houses. So you see occupancy moderate a bit. And then towards the very end of the year, you see it pick up, and then that puts us back into the new year. As it relates to rent growth, let me break it down. Obviously, the blend is really just a reflection, like a 75% reflection of the renewal side of the house and about a 25% reflection of the new lease.

Newly, you know, you saw our numbers from Q1. We started out negative. That kind of picks up as you go through the year.

That positive number held out. We saw it go and actually plateaued in June, which was really strong. It's later in the year than we saw in 2025. And we expect that to moderate through the balance of the year.

On the renewal side, that's probably the most consistent part of our business. We typically see over the course of the year, it varies between 3.5% to 4.5%, which, again, is really important because that's 75% to 80% of the book of business. So that's how we expect to see it for the balance of the year. And we're really liking how we've seen the year shape up so far. And as for August, obviously, we don't know what new lease growth will be for August, but renewals in August are shaping up much like July. So we're really happy with how the portfolio is performing and how the teams are executing.

Yes, Steve. I think the big one is obviously always property tax. You know, we have probably three, four weeks before we start to get preliminary views on value, and then maybe another 30 days, month and a half before we start to get actual bills in the door. So that's always a big consideration. But, you know, I think what's really striking to me is how effective the focus on cost controls around the controllable side of the house has been. I think the team has been making really thoughtful decisions about how they approach the service side of the house.

I think, you know, we're really pleased that total turn costs are looking quite favorable. So as I think about puts and takes, I mean, to me, the big question mark at this point in the year is always property tax. I think vis-a-vis the rest of the expense line items. We are really happy with what we're seeing, and we're really pleased with where we are in the year, recognizing there's still a good bit of the year yet to go.

I think with respect to the to the guide, I guess I'd point out a couple of things. As I just said, you know, firstly, we have half a year to go, and the second half of the year, you know, presents a potentially a higher degree of execution risk just based on the year. And the fact that is Tim outlined, this is normally, you know, the seasonal period where you see turnover tick up a little bit.

The quantum of homes that we're taking back that we need to get turned and back out under the market and released is something we're going to be really focused on as we think about defending occupancy in the second half of the year. Secondly, as we've talked about, you know, a lot of times, higher turnover in the second half of the year has the potential to impact both the revenue and expense side of the year. And, you know, obviously any turnover we experience in the second half does create some degree of execution risk given that the supply backdrop while improving remains elevated.

So we want to be mindful of that. Thirdly, as I just outlined with Steve, you know, at this point near property taxes are still largely unknown. As a reminder, the three largest states are California, Georgia and Florida. California and Georgia are both around 14% of total property tax. Florida is about 41%. So those three states are 70% of a line item that represents about 55% of our total objects. So that is always going to be a consideration when that's still kind of waiting for further clarity.

Lastly, and I think what's maybe most notable is given the disruption that some of the earlier versions of the Road to Housing Act cause. We do expect the Rezi built contribution to 26 earnings is going to come in a bit behind our original expectations. Projects that were in flight continued, but there were a number of projects that were scheduled to start in the first half that were delayed.

And in some cases, even canceled. So we're going to have a little bit of a shortfall that we want to try to overcome there. I think the good news is the team is doing a really great job of refilling that pipeline now that the uncertainty overhang has been removed. But it remains to be seen how much of that benefit can be recouped in the second half of 26 versus rolling into 27. So, you know, when we put all those considerations together, we think our guidance continues to reflect cautious optimism.

While at the same time acknowledging that there are some unknowns and some execution risks and a decent chunk of the year yet to go.

In cycle question, Buck, this is Dallas and if Tim, if you have anything to add, feel free to add in. You know, it's interesting. We survey going in and going out and in our second quarter surveys, you know, roughly 85% of our movements were in state movements in the second quarter based on that survey data. So it's not like we're seeing any major dislocation or out of state folks coming in. It's usually about 50% of those, by the way, are moving sort of city to city, so they're trying out a new area. They want to be close to job, you know, corridors, transportation, quarters of testing out a neighborhood before they buy. So we haven't seen anything that's sort of dramatic in terms of call it net migration shifts.

Tim, would you add anything to that? I wouldn't add anything specific to our survey data as it relates to our residents, but I think there is a good story here that we see in third party data regarding migratory patterns. And if you look at about 65, 70% of our markets, we are seeing projected net favorable migration into our markets. And those are primarily Sunbelt markets, which I think is favorable for the long term prospects of our portfolio. So, you know, I think you touched on the IH decision making that goes into where people are living, but I think the broader macroeconomic migratory patterns are favorable as well.

Hey, it's John. Thanks for the question. I think it's important to remember that other property income is comprised of both lease fees and value ad service revenue. So the decrease this quarter was driven primarily by lower lease fees, including lower late fees and other administrative charges. Value ad service income was actually up about 9% year over year, and we continue to see that as an area of growth for us. So year to date, other property income has increased almost 5%. And we do expect to continue to see strong growth from that line item the rest of the year.

Yeah, look, we don't, we generally don't give too much of our projection numbers before it happens, right? But, you know, as I mentioned earlier, our renewal numbers that we're seeing in August look much like our July numbers. So we're really happy with the strength of what we're seeing in the marketplace.

You know, typically you do see the blended rate come down in Q4. You see that kind of taper off. But that's a function also of filling the portfolio. So again, we're really happy with how the market is continuing to find its footing. I think the year shaping up as we expected. And to be honest, we're liking how it's going to set up for 2027.

Sure. Yeah, that's a good question, John. I think they're trending generally in line with our expectations. You know, we are seeing, I think, year to date about $4 million lower on 3pm fee income. That's driven primarily by the fact that we sold a number of homes on behalf of Starwood. And so it's really just a function of a lower average home count as well as the fact that we had about $2.8 million of non-recurring disposition fees in 2025. And so that is also coloring kind of the year over year comp.

As far as the lending business goes, you know, and Scott should chime in with anything he thinks of overlooked, we're actually really pleased with how that is going. Things got pretty quiet while the Road to Housing Act was under way. But, you know, similar to what we're seeing on the acquisition side, since clarity has been sort of realized, I think there's a lot more interest and inbound activity. The team continues to originate what we think are really interesting deals on real estate that we have, I'd agree, a conviction around. So, you know, it continues to be, I think, a really compelling area of growth for us.

And we're actually a little bit ahead of where we thought we would be at this point in the year, which is great considering that we had about six months of kind of dislocation in the marketplace.

And the only thing I'd add to that is, look, the program is going according to plan, right? And as Dallas said, it is introduction. We're on track for, you know, based upon what's either closed or under commitment right now, called approximately 350 million loans. And again, first principles are still distinct. We want strong sponsors with ETR development in communities where we have boots on the ground. We have local market knowledge of those, you know, areas and communities that, you know, potentially we could purchase upon stabilization. So, nothing has changed in terms of the design of the program, nothing's changed in terms of the buy box. We're going to do the right deals in the right markets.

We're being measured in our pace. And we're going to, you know, do the right loans where the right counterpart is when the time is right. But we're on track and we're pleased with the program.

Yeah. Good question, Handel. And this is something that we debate internally and with our board as we think about capital allocation sources and uses. And if you look at the first part of the year and we've been pretty clear about the fact that we saw, you know, these discounts continue to proceed, we're not going to be afraid to continue to purchase shares.

That being said, you know, Scott is starting to see, you know, unique opportunities where, you know, maybe going in cap rates are sort of similar or in the same zip code of where we may have a view on where, you know, share prices could be trading. So it is an ongoing discussion, something that will evaluate. It has to be a creative, is sort of the simple answer at the end of the day, right? If we're not looking to grow for the sake of growing, we certainly want to grow.

We're doing a really nice job of harvesting gains off of assets that we don't view as maybe core to our portfolio over a long period of time. We can continue to do some of that in the foreseeable future if needed. And I think that we'll just balance it out in terms of sort of growth opportunities. I think Scott's seeing on the development side, you know, we are starting to see some things that could make sense there that can compete with sort of a share of purchase, sort of cost of capital. We're also seeing, you know, and I think Scott was really smart to say this. Like, it's really early. Like, we don't want to say that we're seeing big opportunities in M&A or any of these other sort of scenarios, but we're starting to see, you know, sellers poke their eyes up from above the, you know, 20% rewrote a housing act and sort of say, you know, what should I be doing here?

You know, it's my cost of capital change. There are my opportunities for growth a little bit different than maybe they were. And, excuse me, I think Scott's taking some of those calls. So, look, I think we'll keep you guys posted. There's nothing to talk about yet.

And my guess is this will drip out, you know, pretty slowly throughout the year.

Yeah, it's a good question. I would say, you know, no real change. You know, we continue to be focused on the trade-off between rate and occupancy. I think what's been really striking to me and something that I feel really good about is I do think that the operations team is striking a better balance between how much occupancy we give up in the course of going out to capture rate. I think the execution continues to improve, and I think it's reflected in kind of the re-acceleration we've seen in Renewal Rate Growth, which has been really strong these last couple of months. And, you know, as Tim mentioned, is trending favorably as we look forward to August.

So, you know, we are continuing to focus on making sure we drive to, you know, sort of an optimized balance between rate and occupancy.

Recognizing that at this point in the year, you know, the occupancy impact is likely to swamp the impact of, you know, blended rate growth, but, you know, that does not change the fact that we are focused on trying to capture as much rate as is available in the market. While sort of defending occupancy by making thoughtful decisions on how we negotiate on Renewals, the good news is, despite, you know, kind of striking those trade-offs, we continue to see really strong Renewal Rate Growth, which is obviously the primary driver of revenue for us.

Hey, great question, and really an important differentiator between us and when I think multifamily talk about Bay Area demographics or performance trends. Remember, our Northern California portfolio is largely Sacramento in some of those bedroom communities that sit outside of Sacramento. So the belajos, you know, some of those sort of burbs that are kind of as you move towards the Bay. We do not have a Bay Area presence. We have a Sacramento presence. And so Sacramento, I think even for multifamily behaves very different than say Bay Area sort of performance. And so our Northern California book is operating, you know, as we would sort of expect it, very strong renewals. I would tell you that on the newly side, it tends to be a bit trickier than maybe our Southern California business, but very steady nonetheless, a good customer.

It's a great book of business. When we go to sell homes in that part of the country, they sell very quickly. So, but just please don't confuse that with Bay Area multifamily. They're very different portfolios.

It's just Tim, good question. We track this topic closely, right? Pricing always is a function of supply and demand. And on the supply side, the recovery that Dallas talked about, the moderating higher supply levels, year over year, you know, it hits markets, different markets in different ways. And there are certain markets that are recovering faster. We're seeing some really nice supply reduction in markets like Tampa or Lando, Phoenix.

There are other markets that are a bit slower. And, you know, the market's not perfectly efficient in terms of how you capture that rent growth as that supply eases, but we are taking advantage of that when we can. You know, the good news is that demand stays, has stayed in really healthy shape this year. If you look at the overall gross number of leads, we're seeing really healthy volume.

If you look at, you know, the external funnel, we use, you know, use Google Analytics. We use Google search terms like houses for lease. It's actually up a hair year over year. So we know that there's a lot of people that are still looking for single family rental homes, especially in our markets. One of the things that we're happy about on the internal side is that we're able to convert a lot of these people. We're seeing better conversion rates year over year. And I think that's in large part due to two things. One, our teams are, I think, better equipped with technology that we're providing. We're launching right now and have launched in a couple of our markets, a new customer relationship management platform.

It's allowing us to really provide better service on the front end of the business as people are searching. And then we're also making some really nice enhancements to our digital shopping experience. And it's allowing people to self-select, and we're getting higher quality leads that we can work more effectively. So we like what we're seeing on the demand side. We like what we're seeing on the supply side, cautiously optimistic that we continue to see the supply levels moderate over the course of the year. And you're going to see the variability across markets as it shows up in the form of new lease and renewal lease rent growth. So appreciate the question. We're deadly focused on it.

Look, it's a number of different factors. There's no single driver of it. It's a good question. I think if you look at some of the migration data, we use Oxford economics as our source, but you look at some of the projections from 2026 and you take it, for example, like a market like Orlando, really nice numbers there. You take a look at Tampa, another market with really nice numbers there, projected for 2026. You look at John Burns data that we referenced frequently. Most recently, the June numbers show that continue to validate, that build to rent deliveries are in the rear view mirror. So you look at those factors along with the various components of what constitutes supply in the market.

And what you'll see in our data shows is this third party data showing what are the listings of homes for lease. We're seeing the mom and pop number, again non-institutional, which drove the big buildup in supply over the last call at 24 months. That's also where we're seeing the supply easing. If you were to assign or ascribe value to certain cohorts, we're continuing to watch that. We don't have a projection for the future. So I can't tell you exactly where we think supply goes over the next six months. But, you know, all the drivers of the market are operating fundamentals are looking pretty strong. We like it again, cautiously optimistic as we navigate the back half of the year.

Sure. Great question, Jesse. Thank you. In terms of what we're seeing from the builders, obviously, you know, you've seen, I think at its peak, our builder backlog on forward purchases was at about 2,700 homes. And that's down now to about 300 for, you know, what's in the backlog. And again, those are forward purchase commitments that we had done over the last two to three years that have taken time to essentially be delivered where the pace was 10 a month.

We obviously haven't made any new commitments year to date, which is why that backlog has declined as quickly and meaningfully as it has. I think where we're seeing the most interesting opportunity is we talked about this on our investor day in November where, you know, we continue to get monthly tapes from the builders on standing inventory of homes that can be delivered in a 60, 90 day time frame instead of a 12 to 18 month time frame.

We're still seeing opportunities that, you know, we talked about previously that, you know, are super interesting to us in the, you know, call a 20% discount, 6% cap rate range. You know, we've not, you know, meaningfully leaned into that, but we're starting to see some interesting opportunities that we're evaluating again. But I think in terms of that near term composition, you'll probably more likely see us do short term acquisitions from builder tapes in the short run as opposed to the long term forward commitments. We still see forwards. I think the valuation and pricing just hasn't been as attractive and we're more attracted to the short term builder tapes.

In addition on Rezi built, it's now been about six months since the integration. They're out in the market looking for new opportunities for us. As Dallas said earlier, we're evaluating some things as we speak. We're not really ready to sort of talk about where we are in that process, but I think generally speaking, we've seen some great opportunities.

You know, their market presence, as you probably know, we've discussed previously is in Georgia, North Carolina, Florida. I think we've seen some interesting opportunities that we're evaluating in the Carolinas in Atlanta. And, you know, when we look at these investments with Rezi built, you know, we would be doing them both for ourselves and for our joint venture partners of which we have to today and they are in constant dialogue with us on opportunities. So we're still looking at opportunities, evaluating it, and we're trying to figure out what makes most sense. Thanks, Jesse.

Yeah, Rich Dallas here. Look, generally, we line up with what you said there at the very end, like we just believe there'll be, you know, sort of an evolution here where you'll see more consolidation.

And particularly, I think you'll see a lot more that around BTR. BTR had sort of a healthy pipeline of new entrants and capital formation, kind of going into a pre the Road to Housing Act. I think, you know, we mentioned it in our remarks, like it definitely froze capital. And I don't want to give the impression that capital is thought, but it's starting to poke its eyes up and sort of say, okay, how can we participate in this sector? How could we be, you know, meaningfully committed to creating new supply, which all lines up with our business plan of what we laid out in November in our investor day? Like, we definitely want to be, if not the largest, the best operator of built-to-rent communities in the country.

That's definitely a goal of ours. We're now, I think, between what we operate and own, and NJVs are probably getting close to almost 100 communities. We have, you know, expertise here in a similar way that we're doing it on the scattered side. So I think, you know, as these smaller operators, these small portfolios, smaller pools of capital are looking for sort of a way to either enhance returns through third-party management or look for an exit partner.

I think invitation homes could fit that bill nicely. It'll still come down to cost the capital. And where we think our cost of capital is. Scott talked about being active with JVs and partnerships. That's easier for us in this environment right now. It requires less out-of-pocket costs. We make actually a better ROI for our shareholders when you consider the fees and the structures that are in place in those agreements.

I think, as it relates to the balance sheet, we'll weigh it out, you know, relative to share of purchase and other things that we're looking at. The lending business has been really accretive. We're pleased with what that's doing. It's also a conduit for new activity for the company, both in the built-to-rent space. And then the three PMs sort of, you know, what I would say, EcoSphere. And so Scott and the team are doing a really good job of just balancing it. I think, you know, if there's anything we want people to take away from the call, is our approach on capital allocation, how we think about growth, the word is balanced. Like just having really sophisticated balance and how we think about both deploying capital, whether it was through M&A or growth in lending or in share of purchase.

We're just going to be really disciplined capital allocators. And I think, you know, I think the streets sort of respected what we've done over the last six, seven, eight months. We've been smart about when to do it and why in order that our approach and our conversations, both in our management investment committees and with our board will continue to be the same.

Yeah. Great question. You know, our perspective is that we are seeing improving market conditions. Obviously, we know that there's a degree of seasonality to new lease growth. And we talked about that at investor conferences and on past calls. But if you look at the supply data, again, the unique listings in each market of four lease properties, that number is coming down. And remember, pricing is a direct reflection of supply and demand. Demand remaining healthy supply coming down.

So we believe that the fundamentals are actually in our favor right now. Again, we're cautiously optimistic about how the rest of the year proceeds. But again, it's it is panning out as we expected. And as I mentioned earlier, we're like in the setup for 2027.

Look, I think our view on all of the grandfather assets as it relates to the new legislation obviously have sort of a premium valuation type to it in the sense that you're an operator operating those assets. I wouldn't say it's absolute in terms of how you think about your asset management strategies, what you want to sell versus what you want to hold, what you want to reinvest in. But there certainly is value to it. I think it's smart to recognize that, you know, there are a number of operators that are going to have a grandfather sort of edge right to the portfolios. And look, taking another step back, you know, the bill, certainly in our understanding, allows for growth in a scattered sense, so long as you're doing it with builders going forward.

And it's new product or newer product, as it's called in the bill. Now, there's still rulemaking and things like that. But what Scott's doing right now in participating in these communities with a number of both, you know, private, regional and public builders is another way that will enhance our scattered footprint. We're huge believers in the scattered footprint thesis in terms of both how it works for the families and the residents that live there. They love being in communities where their neighbors are homeowners and their stability, and kids are growing up in similar neighborhoods with other families.

And we also like it from an operational perspective because it's part of our edge. We're really good at operating a scattered site.

We're really good at that.

Yeah, I mean, it's a good question. I think it's a little early to answer as I mentioned earlier in some of my Q&A responses. You know, the disruption in the market, sort of the chilling effect on capital formation that we saw for about, you know, five of the first six months of the year. You know, is going to cause us to have to overcome a little bit of a gap in terms of what we expected to come off resy belt. As we look to the future, but to be clear, we view that as a strategic acquisition that provides us a lever to continue to grow via a channel and a capability that we didn't possess previously.

So, you know, I'm not, I'm not prepared to say what I think the earnings contribution may be over time, but I would say that we are really excited about what we're seeing. You know, fee building is going to continue to be a big part of our strategy going forward. That is a very accretive, profitable business and the resy belt team is exceptionally good at that.

And then as Dallas mentioned earlier, you know, we are looking at more opportunities, Scott seeing more things with the resy belt team that, you know, may eventually make sense to do either on balance sheet or with joint venture partners. But our expectation is that, you know, this is going to be a growth engine for our business over time and distance.

We want to thank everyone for participating today. We look forward to seeing everybody this fall. Thank you.