AMH Reports Third Quarter 2024 Financial and Operating Results
Acquires High-Quality Portfolio of Nearly 1,700 Single-Family Rental Homes
Raises Full Year 2024 Guidance
LAS VEGAS, Oct. 29, 2024 /PRNewswire/ -- AMH (NYSE:AMH) (the "Company"), a leading large-scale integrated owner, operator and developer of single-family rental homes, today announced its financial and operating results for the quarter ended September 30, 2024.
Additionally, AMH today announced that in October 2024, the Company acquired a portfolio of nearly 1,700 single-family rental homes for approximately $480 million. The acquisition of the well-located, detached, high-quality homes across 13 markets reflects the Company's disciplined and responsible approach to growth as well as the Company's ability to create value by integrating homes onto the AMH platform. The Company funded the transaction through a combination of cash on hand and its previously undrawn revolving credit facility.
Highlights
Rents and other single-family property revenues increased 5.5% year-over-year to $445.1 million for the third quarter of 2024.
Net income attributable to common shareholders totaled $73.8 million, or $0.20 per diluted share, for the third quarter of 2024, compared to $74.1 million, or $0.20 per diluted share, for the third quarter of 2023.
Core Funds from Operations ("Core FFO") attributable to common share and unit holders increased 6.3% year-over-year to $0.44 per FFO share and unit for the third quarter of 2024 and Adjusted Funds from Operations ("Adjusted FFO") attributable to common share and unit holders increased 8.0% year-over-year to $0.38 per FFO share and unit for the third quarter of 2024.
Core Net Operating Income ("Core NOI") from Same-Home properties increased by 5.4% year-over-year for the third quarter of 2024.
Achieved Same-Home Average Occupied Days Percentage of 95.9% in the third quarter of 2024, while generating 5.3% rate growth on new leases and 5.2% rate growth on renewals, resulting in 5.2% blended rate growth.
Delivered a total of 753 high-quality and energy-efficient newly constructed homes from our AMH Development Program to our wholly-owned portfolio and unconsolidated joint ventures in the third quarter of 2024.
Raised Full Year 2024 Core FFO attributable to common share and unit holders guidance midpoint by $0.01 per share and unit to $1.77, representing anticipated full year growth of 6.6% over prior year.
"We founded this Company to provide high-quality housing for Americans. Reflecting on the last 12 years at AMH, we accomplished more than I ever imagined and I am grateful to pass the baton to our long-term Chief Operating Officer Bryan Smith at the end of the year," stated David Singelyn, Chief Executive Officer of AMH.
"AMH is at the forefront of the increasingly important single-family rental industry because of the quality of our rental homes, our diversified footprint, strength of our operating platform, and seamless execution from our teams. Long-term business fundamentals remain strong and AMH's history of delivering consistent and predictable operating results and growing responsibly will continue to drive shareholder returns for years to come."
Third Quarter 2024 Financial Results
Net income attributable to common shareholders totaled $73.8 million, or $0.20 per diluted share, for the third quarter of 2024, compared to $74.1 million, or $0.20 per diluted share, for the third quarter of 2023. The decrease was primarily due to a $5.3 million loss on early extinguishment of debt and $3.9 million of hurricane-related charges, net in the third quarter of 2024, partially offset by an increase in other income and expense, net as a result of higher interest income as well as increases in rents and other single-family property revenues exceeding increases in total expenses excluding hurricane-related charges, net.
Rents and other single-family property revenues increased 5.5% to $445.1 million for the third quarter of 2024, compared to $421.7 million for the third quarter of 2023. Revenue growth was primarily driven by higher rental rates.
Core NOI from our total portfolio increased 7.7% to $242.1 million for the third quarter of 2024, compared to $224.8 million for the third quarter of 2023. This growth was driven by a 6.1% increase in core revenues resulting primarily from higher rental rates, partially offset by a 3.3% increase in core property operating expenses.
For the Company's Same-Home portfolio, core revenues increased 4.4% to $335.6 million for the third quarter of 2024, compared to $321.6 million for the third quarter of 2023, which was driven by a 5.1% increase in Average Monthly Realized Rent per property, partially offset by a 60 basis point decrease in Average Occupied Days Percentage. Core property operating expenses from Same-Home properties increased 2.6% to $118.5 million for the third quarter of 2024, compared to $115.5 million for the third quarter of 2023, primarily driven by annual increases in property tax expense and partially offset by lower repairs and maintenance and turnover costs, net. As a result, Core NOI from Same-Home properties increased 5.4% to $217.1 million for the third quarter of 2024, compared to $206.1 million for the third quarter of 2023.
Core FFO attributable to common share and unit holders was $183.8 million, or $0.44 per FFO share and unit, for the third quarter of 2024, compared to $171.0 million, or $0.41 per FFO share and unit, for the third quarter of 2023. Adjusted FFO attributable to common share and unit holders was $159.7 million, or $0.38 per FFO share and unit, for the third quarter of 2024, compared to $146.2 million, or $0.35 per FFO share and unit, for the third quarter of 2023. These improvements were primarily attributable to increases in rents and other single-family property revenues as a result of higher rental rates exceeding increases in expenses.
Year-to-Date 2024 Financial Results
Net income attributable to common shareholders totaled $275.3 million, or $0.75 per diluted share, for the nine-month period ended September 30, 2024, compared to $289.6 million, or $0.80 per diluted share, for the nine-month period ended September 30, 2023. The decrease was primarily due to lower net gains on property sales as well as a $6.3 million loss on early extinguishment of debt and $3.9 million of hurricane-related charges, net in the nine-month period ended September 30, 2024, partially offset by increases in rents and other single-family property revenues exceeding increases in total expenses excluding hurricane-related charges, net.
Rents and other single-family property revenues increased 6.4% to $1.3 billion for the nine-month period ended September 30, 2024, compared to $1.2 billion for the nine-month period ended September 30, 2023. Revenue growth was primarily driven by higher rental rates.
Core NOI from our total portfolio increased 8.0% to $722.7 million for the nine-month period ended September 30, 2024, compared to $669.2 million for the nine-month period ended September 30, 2023. This growth was driven by a 6.9% increase in core revenues resulting primarily from higher rental rates, partially offset by a 4.8% increase in core property operating expenses.
For the Company's Same-Home portfolio, core revenues increased 5.2% to $1.0 billion for the nine-month period ended September 30, 2024, compared to $950.8 million for the nine-month period ended September 30, 2023, which was driven by a 5.6% increase in Average Monthly Realized Rent per property as well as higher fees and lower uncollectible rents, partially offset by a 60 basis point decrease in Average Occupied Days Percentage. Core property operating expenses from Same-Home properties increased 4.3% to $347.7 million for the nine-month period ended September 30, 2024, compared to $333.4 million for the nine-month period ended September 30, 2023, primarily driven by annual increases in property tax expense. As a result, Core NOI from Same-Home properties increased 5.7% to $652.5 million for the nine-month period ended September 30, 2024, compared to $617.4 million for the nine-month period ended September 30, 2023.
Core FFO attributable to common share and unit holders was $551.8 million, or $1.32 per FFO share and unit, for the nine-month period ended September 30, 2024, compared to $509.9 million, or $1.23 per FFO share and unit, for the nine-month period ended September 30, 2023. Adjusted FFO attributable to common share and unit holders was $490.4 million, or $1.17 per FFO share and unit, for the nine-month period ended September 30, 2024, compared to $448.5 million, or $1.08 per FFO share and unit, for the nine-month period ended September 30, 2023. These improvements were primarily attributable to increases in rents and other single-family property revenues as a result of higher rental rates exceeding increases in expenses.
Portfolio
Average Occupied Days Percentage was 95.1% for the third quarter of 2024, compared to 95.8% for the second quarter of 2024.
Investments
As of September 30, 2024, the Company's total single-family properties, excluding properties held for sale, consisted of 58,899 homes, compared to 58,860 homes as of June 30, 2024, an increase of 39 homes during the third quarter of 2024, which included 640 newly constructed homes delivered to our operating portfolio through our AMH Development Program and 16 homes acquired through our traditional acquisition channel, partially offset by 617 homes identified for sale. During the third quarter of 2024, we also developed an additional 113 newly constructed homes which were delivered to our unconsolidated joint ventures, aggregating to 753 total home deliveries through our AMH Development Program. As of September 30, 2024, the Company had 1,003 properties held for sale and 3,271 properties held in unconsolidated joint ventures.
Capital Activities, Balance Sheet and Liquidity
During the third quarter of 2024, the Company paid off the outstanding principal on the AMH 2014-SFR3 asset-backed securitization of approximately $471.8 million.
During the third quarter of 2024, the Company entered into a new credit agreement with a $1.25 billion sustainability-linked revolving credit facility, replacing its previous $1.25 billion revolving credit facility. The interest rate on the new revolving credit facility is at either a daily or Term Secured Overnight Financing Rate ("SOFR") plus a 0.10% spread adjustment and a margin ranging from 0.725% to 1.40% or a base rate (determined according to the greater of a prime rate, federal funds rate plus 0.5% or the daily SOFR plus 1.10%) plus a margin ranging from 0.00% to 0.40%. In each case, the actual margin is determined based on the Company's credit ratings in effect from time to time. The new revolving credit facility matures on July 16, 2028, with two six-month extension options at the Company's election if certain conditions are met.
As of September 30, 2024, the Company had cash and cash equivalents of $162.5 million and had total outstanding debt of $4.6 billion, excluding unamortized discounts and unamortized deferred financing costs, with a weighted-average interest rate of 4.3% and a weighted-average term to maturity of 12.5 years. The Company had no outstanding borrowings on its $1.25 billion revolving credit facility and had estimated net proceeds of $109.5 million available from future settlement under its At-the-Market Program forward sale agreements at the end of the quarter. During the third quarter of 2024, the Company generated $50.6 million of Retained Cash Flow (defined below) and sold 256 properties generating $81.0 million of net proceeds.
In October 2024, the Company issued and physically settled 2,987,024 Class A common shares under its At-the-Market Program forward sale agreements, receiving net proceeds of $109.8 million. The Company intends to use these net proceeds to repay indebtedness under its revolving credit facility it may incur and for general corporate purposes.
Hurricane Beryl, Debby, Helene and Milton Update
During the third quarter of 2024, Hurricanes Beryl, Debby and Helene impacted certain properties in our Texas, Florida, Georgia and Carolinas markets for minor repair and remediation costs that were not subject to the Company's property and casualty insurance policies. The Company recorded a $3.9 million hurricane-related charge which has been excluded from Core FFO attributable to common share and unit holders, Adjusted FFO attributable to common share and unit holders and our total and Same-Home Core NOI results.
In October 2024, Hurricane Milton impacted certain properties in our Florida market for minor repair and remediation costs that were not subject to the Company's property and casualty insurance policies. The Company is still assessing damages but preliminarily we expect to record a hurricane-related charge in the range of $3 million to $4 million in the fourth quarter of 2024.
2024 Guidance
Set forth below are the Company's current expectations with respect to full year 2024 Core FFO attributable to common share and unit holders and our underlying assumptions. In reliance on the exception provided by applicable SEC rules, the Company does not provide guidance for GAAP net income, the most comparable GAAP financial measure, or a reconciliation of 2024 Core FFO guidance to GAAP net income because we are unable to reasonably predict the following items which are included in GAAP net income: (i) gain on sale and impairment of single-family properties and other, net for consolidated properties and unconsolidated joint ventures, (ii) acquisition and other transaction costs and (iii) hurricane-related charges, net. The actual amounts for any and all of these items could significantly impact our 2024 GAAP net income and, as disclosed in our historical financial results, have significantly impacted GAAP net income in prior periods.
Guidance Summary
Full Year 2024
Previous Guidance
Current Guidance
Core FFO attributable to common share and unit holders
$1.74 - $1.78
$1.76 - $1.78
Core FFO attributable to common share and unit holders growth
4.8% - 7.2%
6.0% - 7.2%
Same-Home
Core revenues growth
4.25% - 5.75%
4.50% - 5.50%
Core property operating expenses growth
5.25% - 6.75%
4.50% - 5.50%
Core NOI growth
3.50% - 5.50%
4.50% - 5.50%
Full Year 2024
Previous Guidance
Current Guidance
Investment Program
Properties
Investment
Properties
Investment
Wholly owned acquisitions
—
—
1,700 - 1,750
$490 - $500 million
Wholly owned development deliveries
1,825 - 1,975
$700 - $800 million
1,825 - 1,975
$700 - $800 million
Wholly owned land and development pipeline
—
$100 - $150 million
—
$100 - $150 million
Pro rata share of JV and Property Enhancing Capex
—
$100 - $150 million
—
$100 - $150 million
Total capital investment (wholly owned and pro rata JV)
1,825 - 1,975
$0.9 - $1.1 billion
3,525 - 3,725
$1.4 - $1.6 billion
Total gross capital investment (JVs at 100%)
2,200 - 2,400
$1.1 - $1.3 billion
3,900 - 4,150
$1.6 - $1.8 billion
Changes to Full Year 2024 guidance:
Raised Core FFO guidance midpoint by $0.01 per share primarily related to increased Core NOI growth from the Same-Home portfolio driven by both better than expected property tax expense outlook and cost controls on controllable expenses.
Revised Wholly owned acquisitions guidance includes bulk portfolio acquired during the fourth quarter as well as a small volume of individual property acquisitions.
Additional Information
A copy of the Company's Third Quarter 2024 Earnings Release and Supplemental Information Package and this press release are available on our website at www.amh.com, under "Investor relations." This information has also been furnished to the SEC in a current report on Form 8-K.
Conference Call
A conference call is scheduled on Wednesday, October 30, 2024 at 12:00 p.m. Eastern Time to discuss the Company's financial results for the quarter ended September 30, 2024 and to provide an update on its business. The domestic dial-in number is (877) 451-6152 (U.S. and Canada) and the international dial-in number is (201) 389-0879 (passcode not required). A simultaneous audio webcast may be accessed by using the link at www.amh.com, under "Investor relations." A replay of the conference call may be accessed through Wednesday, November 13, 2024 by calling (844) 512-2921 (U.S. and Canada) or (412) 317-6671 (international), replay passcode number 13748660#, or by using the link at www.amh.com, under "Investor relations."
About AMH
AMH (NYSE:AMH) is a leading large-scale integrated owner, operator and developer of single-family rental homes. We're an internally managed Maryland real estate investment trust (REIT) focused on acquiring, developing, renovating, leasing and managing homes as rental properties. Our goal is to simplify the experience of leasing a home and deliver peace of mind to households across the country.
In recent years, we've been named one of Fortune's 2023 Best Workplaces in Real Estate™, a 2024 Great Place to Work®, a 2024 Most Loved Workplace®, a 2024 Top U.S. Homebuilder by Builder100, and one of America's Most Responsible Companies 2024 and Most Trustworthy Companies in America 2024 by Newsweek and Statista Inc. As of September 30, 2024, we owned nearly 60,000 single-family properties in the Southeast, Midwest, Southwest and Mountain West regions of the United States. Additional information about AMH is available on our website at www.amh.com.
AMH refers to one or more of American Homes 4 Rent, American Homes 4 Rent, L.P. and their subsidiaries and joint ventures. In certain states, we operate under AMH Living or American Homes 4 Rent. Please see www.amh.com/dba to learn more.
Cautionary Note Regarding Forward-Looking Statements
This press release and the accompanying Supplemental Information Package contain "forward-looking statements." These forward-looking statements relate to beliefs, expectations or intentions and similar statements concerning matters that are not of historical fact and are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "intend," "potential," "plan," "goal," "outlook," "guidance" or other words that convey the uncertainty of future events or outcomes. Examples of forward-looking statements contained in this press release and the Supplemental Information Package include, among others, our 2024 Guidance, our belief that our acquisition and homebuilding programs will result in continued growth and the estimated timing of our development deliveries set forth in the Supplemental Information Package. The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company's management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control and could cause actual results to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update any forward-looking statements to conform to actual results or changes in its expectations, unless required by applicable law. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the Company in general, see the "Risk Factors" disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and in the Company's subsequent filings with the SEC.
AMH
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share data)
September 30, 2024
December 31, 2023
(Unaudited)
Assets
Single-family properties:
Land
$ 2,279,188
$ 2,234,301
Buildings and improvements
11,081,984
10,651,388
Single-family properties in operation
13,361,172
12,885,689
Less: accumulated depreciation
(2,962,482)
(2,719,970)
Single-family properties in operation, net
10,398,690
10,165,719
Single-family properties under development and development land
1,205,372
1,409,424
Single-family properties and land held for sale, net
218,969
182,082
Total real estate assets, net
11,823,031
11,757,225
Cash and cash equivalents
162,477
