American Homes 4 Rent (NYSE:AMH) Q4 2023 Earnings Call Transcript

American Homes 4 Rent (NYSE:AMH) Q4 2023 Earnings Call Transcript February 23, 2024

American Homes 4 Rent isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the AMH Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nick Fromm, Director of Investor Relations. Thank you, you may begin.

Nick Fromm: Good morning, thank you for joining us for our Fourth Quarter 2023 Earnings Conference Call. With me today are David Singelyn, Chief Executive Officer; Bryan Smith, Chief Operating Officer; and Chris Lau, Chief Financial Officer. Please be advised that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC.

All forward-looking statements speak only as of today, February 23, 2024. We assume no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings release and supplemental information package. As a note, our operating and financial results including GAAP and non-GAAP measures are fully detailed in our earnings release and supplemental information package. You can find these documents, as well as SEC reports and the audio webcast replay of this conference call on our website at www.amh.com. With that, I will turn the call over to our CEO, David Singelyn.

David Singelyn: Thank you, Nick. Good morning, everyone, and thank you for joining us today. As you may have seen in last night’s press release, I announced my intent to retire at the end of the year. It has been an honor to lead this company over the past 12 years, and I cannot be more proud of the leadership team we have in place, who are ready to take the rein. I want to congratulate Bryan Smith, our Chief Operating Officer, who is named to be our next Chief Executive Officer upon my retirement. Bryan is a talented and experienced executive who has driven our business strategy and operations since the beginning. Additionally, we have elevated Chris Lau, to the role of Senior Executive Vice President and Chief Financial Officer.

I know with this highly talented management team, AMH stands ready to seize the opportunities ahead. Now I will provide some brief comments before I turn the call over to Bryan and Chris. 2023 marked another year of resilient and durable growth at AMH. For the full year, core FFO per share grew nearly 8% driven by sustained long-term rental demand, superior operational execution supported by our strategic initiatives and consistent production out of our development program. The single-family rental sector and the AMH platform continued to benefit from supply-demand imbalances. The national housing shortage, driven by limited homes for purchase in the open market has created challenging home affordability dynamics for home-buyers. AMH is doing its part to solve this housing shortage.

We are adding new supply to the market and operating high-quality assets in desirable family-friendly locations at a significant discount to the cost of ownership. We are well-positioned to deliver consistent results for years to come. On the growth front, our primary growth channel is an internally developed homes that are well-located, high-quality, and have superior maintenance CapEx profiles as compared to our legacy portfolio. Having full control of the growth program allows us to dial up or dial down our delivery phase in certain markets to appropriately manage our capital plan. Our Traditional and National Builder acquisition channels continue to be largely on pause, given our current cost of capital. When these acquisition opportunities become more attractive, we will be ready to quickly capitalize and supplement our in-house development deliveries.

While the acquisition and capital market environments are not conducive to accretive growth from the MLS or National Builder channels, it does continue to be a great time to lean into dispositions. The single-family rental asset class has the unique ability to be managed on an asset-by-asset level, which provides the ability to recycle capital at attractive economics. On a personal note, it is bittersweet leaving AMH where I co-founded the company and had a hand in building the SFR industry and team from top-to-bottom. I am proud that AMH is well-positioned to continue our success in delivering high-quality housing to our residents and superior returns to our investors. I will see many of you over the next 10 months, but I know after I retire, I will miss the people I’ve worked with, within and outside the AMH community.

I’m internally grateful for those relationships that have been created. And now, I will turn the call over to Bryan for an update on our operations.

Bryan Smith: Thank you, Dave. I’m excited to have the opportunity to be the next CEO of AMH. Over the next 10 months, Dave, Chris, and I will work together to ensure a smooth and seamless transition. Our strategy remains the same, with stability, consistency, and predictability at the center. On a personal note, I want to congratulate Dave on his planned retirement. Dave, thank you for your leadership, your mentorship, and your friendship. I’m honored to follow in your footsteps. 2023 was another great year at AMH characterized by strong execution from our teams and the full return to seasonality. Demand remains strong as we approach the spring leasing season. And although some metrics have normalized, we continue to see improvements in key areas such as website traffic, which was up 11% year-over-year in the fourth quarter.

Moving on to fourth quarter operating results, Same-Home average occupied days was 96.2% representing normal seasonal effects and slightly elevated turnover. This modest decline in occupancy was balanced by strong fourth quarter new renewal and blended rate growth of 4.5%. 6.2% and 5.7%, respectively. All of this drove 5.5% Same-Home core revenue growth for the quarter, meeting the midpoint of our full year revenue guide of 6.5%. Turning to expenses, fourth quarter core operating expense growth was 4.5%, primarily driven by negative property tax growth due to a true-up in the same period of last year. For the full-year, core operating expense growth was 9.1% which was slightly below the midpoint of our expectations due to better-than-expected controllable expenses.

All of this resulted in 6% and 5.1% Same-Home core NOI growth for the fourth quarter and full year respectively. Turning to our 2024 outlook, the year is off to a steady start as we head into spring leasing season. For the month of January, Same-Home average occupied days was 96%. And new and renewal spreads were 4.3% and 5.7%, respectively. This resulted in blended rate growth of 5.3% for the month. On a full-year basis, our Same-Home core revenue growth outlook is 4.75% at the midpoint. This was primarily driven by forecasted growth in average monthly realized rent of 5% to 5.5% which breaks down to an earn-in of approximately 3% from last year’s leasing activity and the partial year contribution from expected 2024 spread in the high 4% area.

On the occupancy front, we expect sector demand drivers to continue to fuel sustained occupancy levels in a low 96% area, which continues to be above our long-term average. Looking ahead to core property operating expenses, our 2024 Same-Home expense growth outlook of 6.25% at the midpoint reflects another year of elevated property taxes and inflationary impacts specific to our business. Chris will provide more details on the expense components in a moment. But I want to emphasize that overall expenses continue to moderate and our teams have done a great job keeping controllable expenses in check. Taking the midpoint of our Same-Home revenue and core operating expense guidance, Same-Home core NOI growth is expected to be 4% in 2024. In closing, I’m very pleased with our position as we start the year.

We will continue to focus on operational execution from the core, continued commitment to providing the best possible resident experience, and responsible growth from our investment programs. With that, I will turn the call over to Chris.

Chris Lau: Thanks, Bryan, and good morning, everyone. Before I get into my regular updates, I wanted to say thank you to Dave. Dave, I genuinely appreciate your many years of vision and mentorship and I look forward to helping carry on the AMH legacy. Additionally, I also wanted to say congratulations to Bryan and I look forward to our next chapter. Now turning back to my regular updates, I’ll cover three areas this morning. First, a brief review of our year end results. Second, an update on our balance sheet and recent capital markets activity. And third, I’ll close with an overview of our 2024 guidance. Beginning with our operating results, we closed out 2023 with another quarter of consistent execution, with net income attributable to common shareholders of $76.6 million or $0.21 per diluted share, and $0.43 of core FFO per share and unit, representing 8.8% year-over-year growth.

And for full-year 2023, we generated net income attributable to common shareholders of $366.2 million or $1.01 per diluted share, and $1.66 of core FFO per share and unit, which represents the high-end of our most recent 2023 guidance range. From an investment standpoint, during the quarter, we delivered 503 total homes from our AMH development program. This was comprised of 456 homes and 47 homes delivered to our wholly-owned and joint-venture portfolios respectively. On a full-year basis, we delivered a total of 2,317 AMH development properties, which was modestly better than the midpoint of our expectations. Outside of development, our Traditional and National Builder acquisition programs continued to remain largely on pause as we acquired just 25 homes during the quarter.

On the disposition front, we saw another quarter of solid activity, selling 241 homes at an average disposition cap rate in the mid-3% area, generating $72.5 million of net proceeds. Next, I’d like to turn to our balance sheet and recent capital activity. At the end of the year, our net debt including preferred shares to adjusted EBITDA was 5.4 times. We had $59 million of cash available on the balance sheet and our $1.25 billion revolving credit facility, adding $90 million drawn balance. Additionally, throughout the fourth quarter and beginning of January, we sold approximately $3.7 million Class A common shares under our ATM program, at an average sales price of $36.36. These sales generated total net proceeds of approximately $133 million and will be used to fund a portion of our 2024 capital plan that I will talk more about in a couple of minutes.

Additionally, last month we opportunistically took advantage of an attractive market window and proudly became the first single-family rental REIT to issue unsecured green bonds. In addition to being an important capital raise, our green bond issuance further highlights our commitment to responsible business practices and sustainable building standards. From an execution standpoint, the transaction was meaningfully oversubscribed with investor demand which allowed us to drive attractive pricing, with an all-in interest rate of 5.5% and upsize the transaction to $600 billion, which will be used to fund a portion of our 2024 capital plan. Thank you to the team for making this transaction possible and helping us set another industry milestone.

Next, I’d like to share an overview of our initial 2024 guidance. For full year 2024, we expect core FFO per share and unit of $1.70 to $1.76, which at the midpoint represents year-over-year growth of 4.2%. And for the Same-Home portfolio at the midpoint, our expectations contemplate core revenue growth of 4.75% which Bryan discussed a few minutes ago, along with core property operating expense growth of 6.25% driven by property tax growth in the low 7% area, which as expected is beginning to reflect moderation from the past few years, and 5.25% growth on all other expenses reflecting the general inflationary environment and insurance expense growth in the high single digits based on a successful renewal campaign that becomes effective at the end of this month.

In putting together our Same-Home portfolio revenue and expense growth expectations, we expect 2024 Same-Home core NOI growth of 4% at the midpoint. From an investment standpoint, as we shared last quarter, given the nature of the ongoing capital markets environment, responsible and controlled growth remains a top priority in 2024. With that in mind, we have strategically sized our 2024 investment programs to remain consistent with last year and expect to deploy between $1.1 billion and $1.3 billion of total capital in 2024, adding between 2,200 and 2,400 newly constructed AMH development homes through our wholly-owned and joint-venture portfolios. Specifically for our wholly-owned portfolio, at the midpoint of our ranges, we expect to invest approximately $1 billion of AMH capital, consisting of $750 million or 1,900 homes added from our development program along with $250 million combined investments into our wholly-owned development pipeline, pro rata share of JV investments, and property enhancing CapEx programs.

Additionally, as we talked about last year, we have two legacy securitization loans that matured during the fourth quarter of this year. As a reminder, the two securitizations have a combined principal balance of approximately $940 million with an average interest rate of 4.4% and are now freely pre-payable without penalty. After the success of our January green bond offering, we recently gave notice to pay off one of our upcoming maturities by the end of the first quarter. In addition to responsibly addressing a portion of this year’s maturity schedule, the payoff will unencumber approximately 4,500 properties that can now be fully reviewed by our asset management and disposition teams. With respect to our remaining 2024 maturity, we expect to opportunistically monitor the market for refinancing windows and have contemplated a midyear payoff in guidance.

With that said, we have the ability to be patient and if necessary, can comfortably backstop our remaining 2024 maturity using our $1.25 billion revolving credit facility. From an overall capital plan perspective, taking into consideration our investment programs and securitization maturities, we expect total 2024 AMH capital needs to approximate $1.9 billion that we plan to fund through a combination of retained cash-flow, approximately $400 million to $500 million of recycled capital from dispositions, equity capital including approximately $130 million of the ATM equity net proceeds I talked about earlier, $600 million from last month’s green bond issuance and approximately $500 million of additional capital that we plan to raise for the unsecured bond market over the course of 2024 or warehouse on our revolving credit facility if needed.

Finally, as we also announced this week, given the ongoing growth in our business and taxable income, our Board of Trustees recently approved an 18% increase in our quarterly distribution to $0.26 per share. Needless to say, this is yet another testament to the strength and consistency of our platform as we continue to create value for our shareholders into this next chapter for AMH. And with that, thank you again for your time. We’ll open the call to your questions. Operator?

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Q&A Session

Operator: [Operator Instructions] Our first question comes from Juan Sanabria with BMO Capital Markets. Please state your question.

Juan Sanabria: Hi, good morning. Just curious if you could talk a little bit about leasing trend expectations for 2024 assumed in your guidance. If I look historically, the fourth quarter tends to be a bit below the average for the following year given some seasonality. So just curious on some of the puts and takes assumed at the start of the year in your full year guidance for 2024.

Bryan Smith: Hi, Juan, this is Bryan. Thank you for the question. As we talked about before, our objective exiting ’23 was to be in a position of strength on occupancy with good momentum into January to capitalize on that real increase in demand that we typically see at the end of January into February. The beginning of the year is playing out largely as expected. We’ve seen great acceleration into February. And we posted some healthy rate growth numbers in January and expect a little bit of improvement, I think into February. But for the full year, our expectation on new lease rate growth will be in the low 4%s and renewal rate growth to be in the 5% area, blending into a high 4% for 2024.

Juan Sanabria: Great, Thank you. And then maybe just if you could talk a little bit about that, how much should be kind of COVID non-compliant is still left? And what was the prior run rate pre-COVID, just to get a sense of any maybe potential conservativism in the bad debt assumptions assumed or built into the guidance for ’24?

ChrisLau: Yes, sure. Good morning, Juan. Chris, here. Why don’t I start, and then Bryan can fill in some other details if helpful? But taking a step back, I would say that bad debt is really continuing to play-out pretty consistent with our expectations. Fourth quarter is a good example landing once again in the low 1% area. And as we’ve shared on prior calls, collections and our collection processes are essentially back to normal at this point. Except that, we have a number of municipalities and court systems across the country that are still moving a little bit slower than historic norms. And that is the piece that continues to really hold bad debt modestly above our long-term run-rate of 80 basis points to 100 basis-points or so.

And then you look at this point, we really haven’t seen much change from a local court system perspective since our last update. And since that is completely out of our control, we really just can’t count on it in guidance yet. And so as a result, our outlook contemplates that bad debt remains in the low 1% area or so over the course of this year. But look, I think we would love to be wrong on that assumption and potentially see some bad debt tailwind over the course of this year. We just can’t count on it. And then, if you’d like some mathematical context here, hypothetically, if our bad debt returned to normal on a full-year calendar basis, that would translate into about, call it, 30 basis points to 40 basis points of additional Same-Home revenue contribution.

Bryan Smith: Yes. And then Juan, specifically in the answer to your question on COVID residents that are still in the houses. We’ve made really good progress on that delinquency resolution. There is a little bit last — I think it’s isolated to a couple of different areas. Seattle comes to mind and as well as parts of the Atlanta. But again, it really is tied to the local municipalities and court systems.

Operator: Thank you. Our next question comes from Jeff Spector with Bank of America.

Jeff Spector: Great, thank you. And first, congratulations to Dave and Bryan. My first question, if we can focus on the January new, comparing to your peer, your new rate in January came in much stronger. Can you talk about that a little bit more, is it specific markets like what do you see and what could you share with us? Thanks.

Bryan Smith: Sure, thank you, Jeff, this is Bryan. We’re taking a very balanced approach to our pricing and the way that we’re managing the entire revenue line. We’re very pleased with our January results. As I said, we were expecting really strong return in demand. Some of the seasonality that we saw in Q4 continued into the beginning of January. But we are still able to post some really good new lease rate growth. And it’s not isolated to any specific markets. A little bit of it is a testament to our diversified portfolio. But it shows pretty good strength relative to I think some of the other numbers from other residential peers. Shows pretty good strength across the board.

Jeff Spector: Thank you. Maybe one for Dave. Dave, if you’re — if you could talk about maybe an initiative or something you’re most proud of and looking forward to really focusing on over the coming months until you officially retire maybe investors are not fully appreciating. Thank you.

David Singelyn: Well, first of all, Jeff, thanks for your kind words at the beginning. But when I look over the last 10 years, it’s been very, very rewarding to look back and see the accomplishments of building a company, building an industry. But I think at the end of the day, probably the biggest accomplishment and the biggest reward is the team that you build, the people that are around you, having time and watching their growth and being able to mentor them and see them succeed. And it’s not an easy thing to step down, it is — and I don’t know if there’s a right time. You always want to stay doing what you’re doing. You can’t really step down when things aren’t going well, but this just seems to be the right time. We’ve spent a lot of time making sure we get the right people in the right seats.

We’ve talked about a lot more internally than externally probably, our succession programs, and that really is leadership training at all levels throughout the company. And today seems to be the right time. We are well, well positioned. I mean, our growth prospects going forward or the stability of this company, everything is working very, very well. And the team is — I mean, Bryan is ready and Chris is ready. It’s just the right time. And so, look, I’ve been doing what I’ve been doing for a really long period of time. 12 years, 13 years here I — before this ran was the CEO of a publicly traded company up in Canada for 10 years. So it’s just the right time, Jeff. So thank you for your words.

Operator: Our next question comes from Steve Sakwa with Evercore ISI. Please go ahead.

Steve Sakwa: Yes, thanks. Congrats again, Dave and Bryan. I just wanted to see maybe could you provide any February stats? I realize the month is not over here, but just trying to sort of frame out the new and the renewals. I think Bryan, you said 5% or so on renewals for the year. Obviously, the first quarter is off to a good start, and I don’t know what that implies as an exit rate. I’m just trying to kind of figure out kind of your level of conservatism on the pricing side. Thanks.

Bryan Smith: Sure, yes. Thank you, Steve. As I talked about earlier, we saw a really nice acceleration of demand at the tail end of January continuing into February. There’s a little bit of a lag before that translates into new leases, but February is off to a fantastic start. I would expect new and renewal leases to be a tick better in terms of rate growth over January, and the effect of that improvement in demand will probably be more obvious into the March occupancy numbers as an example. But we’re off to a great start. Rate growth is steady and improving slightly. On the renewal side, there’s going to be an expectation that it returns to kind of normal seasonality where the renewal strength is relative to news is strong in Q1 and Q4, with news outpacing renewals during the spring leasing season. And that’s our expectation for this year.

Steve Sakwa: Okay. And then maybe turning to development. Dave, I was just wondering if you could sort of frame out the ’23 development and the expected yields on the ’23 deliveries. And then I know those had some challenges with supply chain and maybe the cost structures weren’t the best on those homes, but what are you expecting for ’24? And how are you thinking about new development yields moving forward, just in light of kind of the higher rate environment and given where your stock is trading?

David Singelyn: Yes. Well, first of all, let’s just look at the development program in totality. If you go back three, four, five years ago, when we first started development, one of the things we said is that it allows us to control our own destiny and we can grow in all economic cycles. And that has really proved out today where our other growth channels — our acquisition growth channels, National Builder, MLS, are essentially closed because of the opportunity set that’s out there. When you look at 2023, and the first thing I think we all have to remember is that these homes that we are delivering today, the land was acquired four or five years ago, maybe six years ago in some cases, and that’s when they were underwritten.

And all the yields that we are delivering are significantly greater than what we underwrote when we acquired them. In the last couple of years, you’re — Steve, you’re 100% right. It’s been challenging. We have seen the input cost of home building across all home builders. It’s grown more than we’ve really seen historically ever before. With that, we’ve been very fortunate. We’ve had very strong rental rate growth alongside it, and our yields are actually, as I said, significantly greater. 2023, we talked about the hope of having a little bit of benefit tailwind as we got to the back half of the year, maybe a 5% reduction in some of the input costs. We saw a little bit of it, but not to the extent we thought we would. Home building at the beginning of 2023, coming out of 2022 was pretty slow, but the home builders did catch some wind through incentives and otherwise/ And the demand for supplies, demand for labor went back to normal, and the benefits didn’t materialize to the extent we thought they would.

The biggest benefit still happened, and that was in lumber. So today we — last year, we delivered in the high 5%s as we underwrite. That’s still 100 basis points higher than anything that we are seeing today from National Builders or MLS in our consistent underwriting between the two channels. And as we go into 2024, again, keep in mind that many of these were underwritten and acquired many years ago. Much of the product is in place, land and land improvements, and so they will be still very accretive. And I’m very, very pleased that we have them in our portfolio. But we’ll be looking to — directly to your question. Probably high 5%s, maybe a little bit at 6%, but let’s keep ourselves in the high 5%s at this point for deliveries in 2024.

Operator: Your next question comes from Keegan Carl with Wolfe Research. Please go ahead.

Keegan Carl: Yes, thanks for the time, guys. I guess maybe first just on your property enhancing CapEx, it was down materially both year over year and sequentially. Just wondering if any of this is related to the Resident 360 program or something else drove it? And then what would be a good run rate going forward?

Bryan Smith: Thank you, Keegan. This is Bryan. I think what you’re seeing on the property enhancing CapEx is the results of our continued LVP hard surface flooring program where we’re replacing carpet. We’ve made significant progress on that, and now homes are going into turns that have the hard surface flooring. So you’re going to see a little bit of a reduction on that. The other component of that is what we call revenue-enhancing CapEx, which are specific upgrade projects that we’re evaluating on a unit-by-unit basis. They’re not nearly as significant, but they provide good returns on a project basis. So yes, we’ve seen a reduction, I think that probably will hold. But we’re going to continue that program until we’re completely out of the carpet business.

Keegan Carl: Got it. And then shifting gears, maybe one for Chris here, just focusing on your real estate tax growth. I guess, are you doing anything differently from a forecasting perspective, just given what happened the last two years and obviously given legislation in Texas, just curious there, what sort of benefit you’d be expecting?

ChrisLau: Sure. Good morning, Keegan. Thanks. Look, I would just remind for 2023, our expectations were pretty much right on and even 2022 outside of the Texas curveball. Look, overall, no different than we talked about last year, property taxes continue to play out pretty consistent with what we’ve been expecting. 2023 was in that 9% area that we started the year with in terms of our expectations and then trend line and expectations into this year, again, very similar to some of the preliminary thoughts that we were outlining last year. Expectation is that we’re going to begin to see some level of moderation as rate of home price appreciation has come off the historic highs of the past couple of years. But with that said, we shared this view last year also.

We’re not expecting property taxes to snap back to long term average overnight. As we know, property taxes are inherently backwards looking. And although things have cooled, there are good portions of the housing market that have remained really resilient, right? Places like Florida and Georgia continue to remain strong, where we could still see property tax growth in those states in the high single digit to low double digit area. All of which has translated into this year’s view in the low 7%s, which again reflects moderation from the past couple of years, but will still likely run above our long term run rate of 4% to 5%. But I would finish it off by saying things are very much playing out as we’ve been expecting.

Operator: Thank you. And our next question comes from Jamie Feldman with Wells Fargo. Please state your question.

Cooper Clark: Great. Thank you. This is our Cooper Clark on from Jamie. Just wondering, we’ve heard from your peers that BTR supply has been increasing in cities like Las Vegas and Phoenix. We appreciate the quicker absorption here when you do see pockets of supply, but wondering what markets in 2024 you would call out as higher supply, where you may see slight weakness in a given quarter?

David Singelyn: Yes, this is Dave. Let me take a piece of this, and then maybe Bryan can add. I would actually disagree with a little bit of that sentiment. We are seeing some more build to rent, but it’s not necessarily in the core part of the city. It’s much farther out in secondary and tertiary market areas. The build to rent, there is a lot of build-to-rent that came into the marketplace three, four years ago. Whether it’s from the National Builders or from some type of equity, many of those projects have been on the market. We have seen many of them for us to take them over midstream, but the location and the quality of where they are, we have decided to pass on. Likewise, there is a lot of build-to-rent projects that is being shopped to parties like ourselves.

And the majority of build to rent, the idea was to build it, rent it, stabilize it, and sell it, and monetize it. Again, these assets are — there’s a number of them that are out there and they are looking to trade. But when you look at the pricing of those, they are in the 4%s. Over the last quarter — over the last year, really, we have seen every quarter thousands and thousands of properties on tapes. Not thousands of tapes, but thousands of properties on tapes from national and local builders. And when you look at them as to the quality and you look at them to the pricing, they’re in the 4%s and our underwriting, and they’re just not an attractive opportunity. The national home builders, what you see the trend today is a lot of these homes that are, “built to rent” or were identified as build to rent are now being reclassified by the national home builders as for sale or for retail sale.

And that’s just a statement of the evidence that it’s very, very difficult to move these homes unless they are well-located or they take a deep discount on them. And that’s sometimes what they need to do on secondary and tertiary markets. So I don’t see as much build-to-rent actually trading as people may be talking about. Do you want to add anything to that, Bryan?

Bryan Smith: Yes. Cooper, specifically looking at supply in certain markets, you’re correct. Phoenix is one of the markets that’s seen some additional supply, not only in build to rent, but also in just a regular way, scattered site. It’s evident, I think you can see in the performance from an occupancy perspective. Phoenix has been a top-performing market for the past five years, both in rate and in occupancy. But we are seeing a little bit more supply. John Burns estimates that supply is up about 25% year over year in Q1. The good news for us is that we believe that’ll be absorbed relatively quickly. We have a fantastically well-located portfolio in Phoenix, and we see this as a temporary supply. We expect the Phoenix to return to kind of historical performance pretty quickly.

Las Vegas, there has been an increase in supply in Las Vegas, specifically from build to rent, but our portfolio is performing very well there, and we’re still seeing occupancy into the 96s. Now, the other market really comes to note for me is San Antonio, where we’ve seen some increased supply as well. But as we talked about earlier, this is part of the benefit of having the well-diversified portfolio, in that we do have markets that have seen a decrease in supply, specifically in the Midwest. So we’re really happy with the position that we’re in now.