U.S. Markets open in 6 hrs 19 mins

Edited Transcript of AMH earnings conference call or presentation 24-Feb-17 4:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 American Homes 4 Rent Earnings Call

AGOURA HILLS Feb 24, 2017 (Thomson StreetEvents) -- Edited Transcript of American Homes 4 Rent earnings conference call or presentation Friday, February 24, 2017 at 4:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Stephanie Heim

American Homes 4 Rent - EVP, Counsel, and Assistant Secretary

* Dave Singelyn

American Homes 4 Rent - CEO

* Jack Corrigan

American Homes 4 Rent - COO

* Diana Laing

American Homes 4 Rent - CFO

================================================================================

Conference Call Participants

================================================================================

* Juan Sanabria

BofA Merrill Lynch - Analyst

* Anthony Paolone

JPMorgan - Analyst

* Jade Rahmani

Keefe, Bruyette & Woods - Analyst

* John Pawlowski

Green Street Advisors - Analyst

* David Corak

FBR Capital Markets - Analyst

* Rich Hill

Morgan Stanley - Analyst

* Dennis McGill

Zelman & Associates - Analyst

* Haendel St. Juste

Mizuho Securities - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Greetings and welcome to the American Homes 4 Rent fourth-quarter and full-year 2016 earnings conference call.

(Operator Instructions)

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Stephanie Heim. Please go ahead.

--------------------------------------------------------------------------------

Stephanie Heim, American Homes 4 Rent - EVP, Counsel, and Assistant Secretary [2]

--------------------------------------------------------------------------------

Good morning. Thank you for joining us for our fourth quarter and full year 2016 earnings conference call. I'm here today with Dave Singelyn, Chief Executive Officer; Jack Corrigan, Chief Operating Officer; and Diana Laing, Chief Financial Officer of American Homes 4 Rent.

At the outset, I need to advise you that this call may include forward-looking statements. All statements, other than statements of historical fact included 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 24, 2017. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

A reconciliation to GAAP with the non-GAAP financial measures we are providing on this call is included in our earnings press release. You can find our press release, SEC reports and the audio webcast replay of this conference call on our website at www.americanhomes4rent.com. With that, I will turn the call over to our CEO, David Singelyn.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [3]

--------------------------------------------------------------------------------

Thank you, Stephanie. And welcome to our fourth (Technical Difficulties). Jack Corrigan, our Chief Operating Officer, will then review our 2016 key operating initiatives, our transaction activity, update you on our portfolio performance and review our 2017 key initiatives.

Following Jack, Diana Laing, our Chief Financial Officer, will provide further detail on our operating and financial results for the year and quarter, and review our balance sheet and recent capital market activities. After our prepared remarks, we will open the call to your questions.

I'm extremely pleased with our accomplishments on all fronts for 2016. Following years of raising capital, aggressively growing our portfolio to scale and building a national platform, 2016 continued to validate single-family rental homes as an institutional real estate asset class. Demand for single-family rental homes remains solid, driving strong occupancies and rental rate growth.

Likewise, our investment in our processes, systems, and people have resulted in faster execution and improved customer service, while better controlling operating expenses. During 2016, we experienced improvement in all our key operating metrics. Also, we strengthened our balance sheet in 2016 by reducing our debt to less than 30% of capitalization while significantly lowering refinancing and interest-rate risk.

To begin with the numbers. For 2016, we reported core funds from operations of $282 million, or $0.97 per FFO share, up 36% compared to the $0.72 per FFO share we reported last year in 2015. Adjusted funds from operations, or AFFO, for the year was $243 million, or $0.84 per FFO share, an increase of 49% from the prior year.

Our portfolio continues to produce exceptional results. During 2016, we ended the year at 95% leased across our portfolio, excluding homes held for sale. Our Same-Home Core NOI operating income after capital expenditures increased 12% year over year. And we achieved a 62.5% Same-Home Core NOI margin for the year.

These results are a testament to the quality of the portfolio and our platforms, which continue to generate strong top and bottom line performance. Our Same-Home revenue increased 5.6% during the year, while expenses were relatively flat. Our results reflect our ongoing focus to unlock the power of scale and controlled expenses through the implementation of innovation, leasing -- innovative leasing and property management best practices.

In 2016, we were able to reduce overall repair, maintenance, and turnover costs, including expensed and capitalized costs to $2, 034 per home for the year, a 14% improvement over the prior year. As a note, these numbers include repairs incurred as a result of damage during Hurricane Andrew of about $900,000, of which approximately $515,000 was incurred within the Same-Home portfolio.

The size and quality of our portfolio, combined with our systems and processes, have resulted in the most efficient platform in the single-family rental space. As a measure of efficiencies, our total combined property management G&A and leasing expenses were 13.3% of total portfolio rents and fees in 2016, an improvement of 150 basis points from 14.8% in 2015.

And at the bottom line, we reported adjusted EBITDA of $454 million for the year, up 47% from $310 million in 2015. As a result, our adjusted EBITDA margin increased to 58% for 2016 compared to 54% for 2015. We acquired over 10,000 homes during the year, growing our portfolio by more than 24%.

On December 31, 2016, we owned 47,303 homes plus an additional 1,119 homes held for sale. Highlighting this growth was our acquisition of American Residential Properties, completed last February, which was our largest portfolio acquisition to date. As a testament to the quality of our operating systems and platform, the ARP homes were seamlessly and efficiently integrated into our platform without missing a beat.

In addition, we improved the operating margin of these properties, from 50.8% for the nine months ended September 2015, which represents the period prior to acquisition to 61.6% for the 10 months ended December 2016 under our platform.

Moving onto the balance sheet. We continued our efforts to maintain a strong and flexible balance sheet. Early in 2016, we took on $792 million of debt in connection with the ARP merger, resulting in our debt to capitalization, exceeding 40% at that time.

Throughout the year, we rightsized our balance sheet and at year end, our debt represents approximately 29% over capitalization, and net debt to adjusted EBITDA is less than 6.5 times. During the year, we expanded and broadened our institutional equity shareholder base, by issuing 36.5 million shares through our merger with ARP and facilitated a secondary offering of 43.5 million shares that were held by a legacy investor.

We also put in place an at the market, or ATM equity program and raised more than $100 million in net proceeds from the issuance of common stock. Additionally, we raised approximately $500 million of perpetual preferred stock during the year.

And finally, we negotiated a new industry-leading $1 billion credit facility that increased our borrowing capacity, lowered our interest cost, and greatly enhanced our financial and operational flexibility as we evolve our capital structure to focus on unsecured borrowings.

Going into 2017, we have positioned ourselves to further grow our portfolio and to continue generating strong revenue growth while controlling expenses. While we continue to acquire properties through our traditional acquisition channels, our strong balance sheet uniquely positions us to take advantage of portfolio transactions.

In addition, we are adding a new portfolio growth channel with our first delivery of newly constructed homes in early April. We are working with well-respected developers to build new homes to our specifications and standards in desirable locations and expect this acquisition channel will become an attractive means to grow our portfolio throughout the year. We also expect the initiatives that have resulted in expense reductions in 2016 will continue to improve as we move into 2017.

Yes, it was a busy year and a very rewarding one, as AMH shares produced a total return of approximately 27% during 2017. We are focused on making 2017 just as productive and rewarding. And now I'll turn the call over to Jack Corrigan, our Chief Operating Officer.

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [4]

--------------------------------------------------------------------------------

Thank you, Dave. And good morning, everyone. I'd like to begin with providing additional details on our transaction activity. During the quarter, we acquired 398 homes for a total investment of approximately $85 million. Our pace of acquisitions was slower in the fourth quarter due to traditionally slower activity at trustee auctions during the holiday period.

Moving forward, we expect to acquire 300 to 500 homes through trustee auctions and traditional MLS channels. Newly constructed homes and any bulk transactions will be in addition to this anticipated activity.

During the quarter, we also sold 127 homes, generating $16.7 million in net proceeds and a $1.3 million gain. 78 of these homes are included in the number that were acquired through the ARP merger. At year end, we had 1, 119 homes held for sale and looked to sell these properties through bulk sales as well as individual retail sales.

We expect the majority of the sales to occur over the next 12 months. Beyond that, we expect to continue to identify homes within our portfolio to prune and recycle capital as a normal practice. Since January 1, 2017, we have sold an additional 420 homes, generating approximately $15 million in net proceeds.

Turning to leasing, during 2016, we executed 19,429. New leases for the fourth quarter, we signed a total of approximately 4, 025 new leases. While overall activity was down from the prior quarter, due to typical seasonality, traffic -- seasonality traffic volumes, including call activity into our call center were as expected and in line with the normalized pace.

Total turn days for the year averaged 53 days, which represents time from prior tenant move out to new tenant lease start. For 2016, this measurement ranged from a seasonal low of 43 days, in the third quarter to a seasonal high of 63 days in the first quarter.

We achieved average leasing spreads of 3.3% on renewals during the fourth quarter and 2.7% on new leases. Leasing spreads trended down as we expected and were within the target range we provided last quarter.

Within our Same-Home portfolio, reflecting the operational results of 25,270 homes, owned and stabilized in both 2015 and 2016, we reported revenue growth of 4.8% in the fourth quarter. This increase was driven by a 70 basis point increase in average occupancy to 94.8% and a 3.7% increase in average contractual rental rates.

Same-Home expenses for the fourth quarter decreased 3.5%, driven primarily by a 9.7% reduction in repairs and maintenance and turnover costs, including in-house maintenance net of tenant chargebacks; a 7.4% decrease in property management costs; and a 18.4% decrease in insurance expenses.

After several quarters of outsized increases, property taxes were up just 2.4% in the fourth quarter compared to last year, resulting, in part, for many successful property tax appeals. As a result of these factors for the fourth quarter, Same-Home Core NOI increased 10% and our Same-Home Core NOI after deducting capital expenditures increased 11.4%.

This marks the sixth consecutive quarter of double-digit growth in cash flow generated by our Same-Home portfolio. Our Same-Home Core net operating income margin was 64.4% for the quarter, up 310 basis points from the fourth quarter of 2015. As Dave noted, our full-year Same-Home Core NOI margin was 62.5%, which was at the high end of the target range we had provided earlier in the year.

Moving on, I'd like to update you on our expenditure efficiency initiatives. In the fourth quarter, we continued to drive our overall repair, maintenance, and turnover costs, including expensed and capitalized costs lower. On a Same-Home basis, these costs totaled $446 per home compared to $495 per home in the fourth quarter of 2015, a decrease of almost 10%.

For all of 2016, these costs totaled $2, 034 per home compared to $2, 378 for 2015, reflecting a decrease of 14.5%. Again, these expenditures in the fourth quarter and full year include the costs related to damages incurred during Hurricane Matthew. As we have stated in the past, lower costs are being driven by several factors, including the underlying quality of our homes and the powerful benefits of scale that accrue to a large and growing platform.

But equally important is our maturing operational expertise. Four-plus years of operating experience, implementing and improving processes and procedures, subject matter experts ensuring consistent application of national standards on maintenance and replacements, and improved experience of training continue to yield benefits across our operating platform.

Finally, I would like to provide color on some of our expectations for 2017. Our in-house maintenance program is now rolled out to markets, covering 90% of our homes. During 2016, we incurred approximately $6.5 million of expenditures to structure, rollout, and operate this program.

2017, we expect to incur a full year's cost to operate this program. But we believe the benefit and continued reduction in maintenance, turn times, and turn costs should more than offset these costs. In addition, we expect that the enhanced customer service and care for the homes will provide long-term benefits.

In 2017, we anticipate further margin expansion across our Same-Home portfolio into the 63% to 64% range, with quarterly amounts being affected by seasonality. Rent growth in the 3.5 % to 4% range, as rent growth from improvements in occupancy and bad debt reductions level off. Overall repair, maintenance and turnover cost, including those expensed and capitalized, to decrease by an additional 5% to the low $1,900 per home range.

And property tax expenses are estimated by our consultants to increase 6% to 8% ; however, it is early in the year to have a complete picture. Our remaining operating expenses are expected to be relatively flat to down slightly. Now I'll turn the call over to Diana Laing, our Chief Financial Officer.

--------------------------------------------------------------------------------

Diana Laing, American Homes 4 Rent - CFO [5]

--------------------------------------------------------------------------------

Thank you, Jack. In my comments today, I'll review our fourth-quarter and full-year 2016 financial results and discuss our balance sheet and liquidity. As a note, our results are fully detailed in yesterday's press release and our supplemental information package, both of which have been posted on our website in the For Investors section.

To begin with our financial results, for the fourth quarter of 2016, total revenues increased 32% to $228 million from $173 million in the fourth quarter of 2015. Net income attributable to common shareholders, totaled $2.4 million, or a $0.01 loss per diluted share compared to net loss attributable to common shareholders of $21 million, or $0.10 loss per diluted share for the same period last year.

Core FFO was $76 million, or $0.26 per FFO share for the fourth quarter of 2016, compared to $54 million, or $0.21 per FFO share for the fourth quarter of 2015. Adjusted funds from operations, or AFFO, was $68 million, or $0.23 per FFO share compared to $46 million or $0.18 per FFO share for the same period last year.

For the full year of 2016, total revenues increased 39% to $879 million from $631 million in 2015. Net loss attributable to common shareholders was $34 million, or $0.14 per share compared to $85 million, or $0.40 per diluted share for 2015.

Core FFO for the full year of 2016 was $282 million, or $0.97 per FFO share, a 34% increase over $0.72 per share for 2015. AFFO for 2016 was $243 million, or $0.84 per FFO share, a 50% increase over $0.56 per share for 2015.

As a note, our 2016 other revenue and other expense line items include the contribution from our nonperforming loan program which was wound down last year. Going forward, these two line items should be immaterial and generally offsetting. Also, I'd like to remind you that in calculating AFFO, we deduct current or recurring capital expenditures and capitalized leasing costs from Core FFO.

Also, both Core FFO and AFFO are supplemental non-GAAP financial measures and reconciliations to GAAP measures are provided in the schedule accompanying the earnings release that we issued yesterday.

As we move forward in 2017, our balance sheet and liquidity remain extremely strong and supportive of our operational and growth objectives. We had $119 million of unrestricted cash and cash equivalents at year end. And we retain approximately $50 million per quarter after all expenditures, including dividends.

We had total debt of approximately $3 billion, which represented 29% of our total market cap and we have no balloon maturities until 2018. 26% of our debt is floating rate and it includes a balance of $325 million outstanding on the term loan portion of our credit facility.

Subsequent to year end, we've drawn the remaining $25 million on the term loan and we have capacity on our revolving credit facility for $650 million. Our fixed-rate debt of $2.2 billion had a weighted average interest rate of 4.26% and a weighted average term to maturity of 17 years.

In terms of our current leverage, net debt to adjusted EBITDA was 6.3 times for the year and the benefit of a full year's results from the ARPI portfolio, combined with our portfolio's improving operating metrics should produce improvements in net debt to adjusted EBITDA throughout 2017.

Our goal is to continue to unencumber assets, to increase our portfolio flexibility, and to enhance our ability to access attractively priced capital.

During the first four months of 2016, through our common share repurchase plan, we spent $96 million to repurchase 6.2 million shares of our common stock at an average price per share of $15.44. And during the fourth quarter, we established a $400 million ATM program, under which we issued approximately 4.9 million shares at an average price of $21.13 per share for gross proceeds of $104 million. I will now turn the call back to Dave.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [6]

--------------------------------------------------------------------------------

Thank you, Diana. And before we open the call to your questions I would like to announce that two individuals have been added to our executive officer ranks. Chris Lau has been named Executive Vice President of Finance, and Stephanie Heim has been named Executive Vice President, Counsel, and Assistant Secretary.

Both Chris and Stephanie have been with the Company since our IPO and have been key contributors to our growth and execution. I congratulate both Chris and Stephanie on these much deserved promotions. With that, we will open the call to your questions. Operator.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions)

Juan Sanabria Bank of America Merrill Lynch.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [2]

--------------------------------------------------------------------------------

I was just hoping you could give a little bit more color. I think you said you're expecting 3.5% to 4.5 % revenue growth; not sure if that's a same-store number or not, but if you look at your new and renewal spreads, they are running a little bit lower than that. So just hoping you could give more color as to what's driving that seeming acceleration into 2017?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [3]

--------------------------------------------------------------------------------

Yes, that is the Same-Home number I was giving and it was lower in the fourth quarter and if you look at historically, we've had lower, especially on re-leasing spreads, we've had lower re-leasing spreads in the fourth quarter because we tried to capture -- there's less activity as we try to capture as much of it as possible and aren't as aggressive in pushing rates.

So you'll see more rate pushing starting really from March through about July, it will start going down a little bit in August as we start trying to capture. I kind of look at it as like the Christmas season. You have a time when you have a lot of activity and it captures much of your rate increases as possible and then when Christmas is over, you kind of have a little bit of a sale and so the fourth quarter is really the sale.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [4]

--------------------------------------------------------------------------------

Okay so that number is not being skewed by like ancillary fees or anything like that?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [5]

--------------------------------------------------------------------------------

No.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [6]

--------------------------------------------------------------------------------

Okay great. And then maybe a question for Diana, on the balance sheet. You've got some preferreds you can call, just curious on the plans there and if you're thinking about refinancing with new preferreds and if the rates are favorable to do that? If you're thinking about maybe taking it out with unsecured debt? And how you kind of think about preferred versus debt in your overall leverage calculation? And how the rating agencies look at that as well?

--------------------------------------------------------------------------------

Diana Laing, American Homes 4 Rent - CFO [7]

--------------------------------------------------------------------------------

Well, first of all, the two series of the participating preferreds will become callable by us after September 30 of this year. And it will entirely depend on what the capital markets look like and what the -- what's going on with our balance sheet and growth opportunities as to what we will do.

I think it's safe to say that it may be attractive for us to call those but how we take them out will depend on conditions at the time. And then as far as the issuance of preferred stock and perpetual preferred versus debt, preferred stock is forever capital; it never has to be paid back but at our option, it can be called and replaced with something else so we like that as a source of capital.

We think it has a place on the balance sheet so it's not -- I'm not making any predictions about what capital we will access over the next year, but it is something that is somewhat attractive to us from time to time. Rating agencies consider it leverage and for fixed charge coverage type ratios. But different agencies look at it differently in some of the other debt metrics.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [8]

--------------------------------------------------------------------------------

Okay, great and then just on the acquisition side. I think you said 400 to 500 homes. I'm not sure if that's a per quarter number. I think part of that now includes the -- buying new assets for developers. So is that new strategy around buying from developers, is that focused on buying new product or taking out existing homes with their built-in sort of planned communities? Is this something you could give a little bit more detail on how exactly that strategy is being thought up going forward?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [9]

--------------------------------------------------------------------------------

Sure. What I had said in my remarks was 300 to 500 through our traditional methods at auction and MLS purchases, and then the new homes would be additive to that. On -- we're really looking at this in two ways of buying new homes. We bought -- and this is really in the very early stages of what were doing.

We bought several lots and are -- we have local contractors building homes for us on those lots. We think we can get somewhere in the neighborhood of 50 to 75 basis points higher on those properties in yield than we do in our existing channels. And -- but we're really still in the see if it works phase of this and then we're also partnering with a national developer and buying a percentage, a small percentage of their homes in multiple developments. So those are the two tracks we are taking right now in that regard.

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [10]

--------------------------------------------------------------------------------

And yes those numbers are per quarter.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [11]

--------------------------------------------------------------------------------

Okay. And then are you warehousing the land on your own balance sheet?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [12]

--------------------------------------------------------------------------------

Yes. Well in the first one I described, we're buying the lots that they would be warehoused on our balance sheet. In the second one, where we're going with the national developer, that would be on their balance sheet.

--------------------------------------------------------------------------------

Juan Sanabria, BofA Merrill Lynch - Analyst [13]

--------------------------------------------------------------------------------

Thank you.

--------------------------------------------------------------------------------

Operator [14]

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [15]

--------------------------------------------------------------------------------

In the 2017 outlook, do you have any occupancy pick-up expected?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [16]

--------------------------------------------------------------------------------

No. I think it's going to be relatively stable.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [17]

--------------------------------------------------------------------------------

Okay. And then when I look at the R&M in turn and CapEx, the $2,034, how much was charged back to residents? Like how is --

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [18]

--------------------------------------------------------------------------------

That is net of the chargebacks.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [19]

--------------------------------------------------------------------------------

Right, so how much are you guys charging back?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [20]

--------------------------------------------------------------------------------

I don't have that --

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [21]

--------------------------------------------------------------------------------

One second; I have it.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [22]

--------------------------------------------------------------------------------

Handy but I have people looking for it for you. $582 per home.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [23]

--------------------------------------------------------------------------------

Okay. And is there an expectation that, that also improves to kind of help with that down 5% in 2017 or is that kind of probably where it's going to be?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [24]

--------------------------------------------------------------------------------

It's probably where it's going to be and obviously, the less we spend on certain things, the less we would chargeback so it could go lower but it's probably not materially lower.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [25]

--------------------------------------------------------------------------------

Okay and then in terms of the acquisition side, where are yields right now when you think about that 300 to 500 pace with -- where are those yields?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [26]

--------------------------------------------------------------------------------

Right around 6%.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [27]

--------------------------------------------------------------------------------

Okay. And you mentioned like a 63% to 64% margin in 2017. When, to get to like the 6%, what's the incremental margin? Like, I would imagine you're pretty stabilized from like a property management point of view, just trying to think about how you get to the six

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [28]

--------------------------------------------------------------------------------

Yes, we look at that are -- and it's probably lower than this but we estimate our incremental cost of management at about 5% of revenues.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [29]

--------------------------------------------------------------------------------

Okay, so that's in that 6% already?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [30]

--------------------------------------------------------------------------------

Correct.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [31]

--------------------------------------------------------------------------------

And then as you look across your market mix, and -- where do you think you are biased toward investing more or any new markets and conversely, any places you want to get out of in the next 12 months?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [32]

--------------------------------------------------------------------------------

We haven't identified any place that we're getting out of other than we have a handful of holes homes in the Coachella Valley of California that, really, are just difficult to manage because there are so few of them and so far outside of our normal thing that we would probably get rid of. But that's not really exiting the market because it's included in our Inland Empire.

And we're looking at other markets where we have just a handful of homes that we might sell out of but nothing in any of our significant markets and then the other question where we're buying. We're not opening any new markets but we're buying primarily in the Southeast Florida, the Carolinas, Atlanta, Tennessee and then one market in the Midwest Columbus.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [33]

--------------------------------------------------------------------------------

Okay and then just last question on the newly constructed house side and that initiatives. Just what do you think dollar magnitude is in that business over the next year and how much land are we talking about that you would be getting here?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [34]

--------------------------------------------------------------------------------

I doubt that it will be material to 2017 if it the program works, it could be material in 2018.

--------------------------------------------------------------------------------

Anthony Paolone, JPMorgan - Analyst [35]

--------------------------------------------------------------------------------

Okay. Great. Thank you.

--------------------------------------------------------------------------------

Operator [36]

--------------------------------------------------------------------------------

Jade Rahmani, KBW.

--------------------------------------------------------------------------------

Jade Rahmani, Keefe, Bruyette & Woods - Analyst [37]

--------------------------------------------------------------------------------

Thanks very much with valuations having improved in the single-family rental sector, is the pace of that dialogue, the level of dialogue increasing what respect to combinations of M&A opportunities?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [38]

--------------------------------------------------------------------------------

Yes I mean -- we don't really comment on any transactions that are in place. There's always discussions on M&A transactions. There was last year when our stock was lower, there's discussions now. And so when there's something to be announced, we will announce it.

--------------------------------------------------------------------------------

Jade Rahmani, Keefe, Bruyette & Woods - Analyst [39]

--------------------------------------------------------------------------------

Okay. The -- have you gotten any inbound calls from multifamily investors, whether it be in garden-style apartment or other just being interested in the space whether through joint venture or other types of constructs?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [40]

--------------------------------------------------------------------------------

In order to do like joint ventures? No. Obviously, there's crossover on investors on the stock, but no, not on joint ventures.

--------------------------------------------------------------------------------

Jade Rahmani, Keefe, Bruyette & Woods - Analyst [41]

--------------------------------------------------------------------------------

Okay. Thanks very much for taking the questions.

--------------------------------------------------------------------------------

Operator [42]

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors.

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [43]

--------------------------------------------------------------------------------

Jack, could you please quantify the initial upside you're generally able to achieve on an average existing occupied acquisition if you're acquiring at a net yield of roughly 6% on average? What does that net yield look like in a year?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [44]

--------------------------------------------------------------------------------

If rents are -- it really depends on if the prior owner is charging market rents or below market rents or above market rents. Typically, we don't see above market when we acquire them and usually, we think that we can push above what they are but assuming there's a charging market rent and probably you're still in the 3.5% to 4.5 % rate growth overall and then we estimate our pro forma expenses at what we think they're going to be the following year. So I think that should give you approximately what it would be.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [45]

--------------------------------------------------------------------------------

John, I think two ways to look at this. If you look at the portfolios that we've acquired which is a simple occupied homes. We gave some statistics on what was -- what we accomplished on ARP. We were able to improve the margins there, about 900 basis points. And so there -- that's really the benefit of our systems and a lot of that is on the expense side of the transaction. Single occupied homes, we typically underwrite that home using our cost structures.

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [46]

--------------------------------------------------------------------------------

Okay and in your experience acquiring the one-offs from mom-and-pops on average how far below rent -- how far below market are rents?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [47]

--------------------------------------------------------------------------------

I wouldn't give an average. And we don't buy a lot from mom-and-pop. They are usually small institutional holdings but we don't buy a lot of 10-home portfolios. We buy a couple hundred here and although, we did close on a small 28 home portfolio in Atlanta, recently. And we think there's some upside on the rents there but it's all over the board so we're not pushing rents and some more.

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [48]

--------------------------------------------------------------------------------

Okay. Understood. And then Dave, given your improved cost of capital on the equity side, how does your acquisition criteria change from a quality standpoint or a geographic footprint standpoint?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [49]

--------------------------------------------------------------------------------

I don't think it does. It doesn't mean that we won't acquire a portfolio that may have some homes in it -- that or not inside our footprint or quality of homes. Jack mentioned a couple of homes in Coachella that we'll be disposing of. It's in our held for sale. Those were acquired in connection with a portfolio that, for the most part, that portfolio is going to need to match our acquisition criteria. And those homes that are on the fringe or outside our criteria, we will evaluate for disposal and basically maintain the quality of our portfolio.

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [50]

--------------------------------------------------------------------------------

Okay. Thank you.

--------------------------------------------------------------------------------

Operator [51]

--------------------------------------------------------------------------------

David Corak, FBR.

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [52]

--------------------------------------------------------------------------------

Just -- can you just kind of walk through the primary drivers of expenses next year? You mentioned, I think, lower insurance on the last call and obviously, the 6% to 8% property tax but what are the primary drivers beyond that, that are kind of flat to down and then should we assume the 6% to 8% property tax increase is kind of in line with your home price appreciation in 2016? And how do we think about that for 2017?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [53]

--------------------------------------------------------------------------------

Property taxes are tied to home price appreciation. It's going to be a market by market whether it's 16% or 15%. The assessments on value roughly correlate to appreciation. When you look at the expenses I think Jack gave a little bit of guidance on that. The property taxes are going to be the ones that are going to increase. The other line items we've seen improvements in our insurance we've seen, part of that, that was renewed recently.

Some of that is -- or that benefit came through in the fourth quarter; it was about 10% or 11% as I recall. And property maintenance is the other major item in the expenses. It was about $2, 030, $2, 034. We expect that to be in that $1,900 range or just slightly above $1,900, or about a 4% or 5%, 6% decline.

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [54]

--------------------------------------------------------------------------------

That number includes capital.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [55]

--------------------------------------------------------------------------------

That's capitalized cost, not strictly stuff hitting the NOI.

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [56]

--------------------------------------------------------------------------------

But those are the main expense lines, those lines.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [57]

--------------------------------------------------------------------------------

Property management is also in there and we talked that we're comfortable with where those numbers are. Don't expect to see any increase in those numbers next year.

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [58]

--------------------------------------------------------------------------------

Okay, great. And then the rent growth numbers you guys gave, 3.5% to 4.5% this year. mean you guys -- I think on the last call, had said with renewals and release 3% to 4% on renewals and 4% to 5% re-leased. DO you guys still feel comfortable about those ranges and then along those same lines, what are the catalysts that can kind of move that up and down within the portfolio?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [59]

--------------------------------------------------------------------------------

Yes. I feel comfortable with my prior estimates and as far as catalysts, if we -- the one metric that we have seen and it's based on limited response in our surveys but we've seen the number of people leaving our homes to buy houses has moved up. So if we end up with less demand than that would affect what you know, whether those prices continue to -- or the rates continue to go up.

We see no signs of that. It seems to be following seasonal patterns, which November and December you see fewer calls and fewer showings and then starting really right around after Martin Luther King Day, you really see activity pick up and then as you get into the spring season, it really picks up. So the more demand we have, the more we're going to push rates.

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [60]

--------------------------------------------------------------------------------

Okay and is there any material difference between kind of the 2016 Same-Home portfolio and your 2017 Same-Home portfolio in terms of your assumptions?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [61]

--------------------------------------------------------------------------------

Not in terms of our assumptions. We do -- we will have a slightly different mix. I looked at the 2017 Same-Home pool; it's pretty comparable in terms of rental rate and occupancy be slightly lower in some of the slightly higher property tax as a percentage of the portfolio areas and slightly higher in some of the lower property tax areas. SO I would expect that, that will help with margins on a Same-Home basis but I don't think it will be material.

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [62]

--------------------------------------------------------------------------------

Okay, great. But those numbers that you gave are on the 2016 portfolio same-store?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [63]

--------------------------------------------------------------------------------

The numbers that I gave --

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [64]

--------------------------------------------------------------------------------

For 3.5% to 4.5%.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [65]

--------------------------------------------------------------------------------

It's on the Same-Home for 2017.

--------------------------------------------------------------------------------

David Corak, FBR Capital Markets - Analyst [66]

--------------------------------------------------------------------------------

Okay. All right. Thanks guys.

--------------------------------------------------------------------------------

Operator [67]

--------------------------------------------------------------------------------

Rich Hill, Morgan Stanley.

--------------------------------------------------------------------------------

Rich Hill, Morgan Stanley - Analyst [68]

--------------------------------------------------------------------------------

I have a question, going back to your comments about growing your portfolio and doing it on one-off transactions versus larger scale transactions. You've obviously had some success with integrating some large-scale transactions. So I'm curious, how big and ideal sort of state do you -- would you like to grow given the success of the single-family rental platform, both with yourself and as an industry and what's your appetite for sort of another larger scale transaction?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [69]

--------------------------------------------------------------------------------

I don't think we have any firm numbers. We don't have a goal that we need to be X number of homes on any given day. We look at every opportunity that is out there to determine the benefits and the accretion to the Company of entering into that transaction.

We are positioned very, very well, both from a balance sheet standpoint as well as a platform standpoint to be able to acquire portfolios, any portfolio that's really out there as long as it's going to be accretive, I think we're in a position to entertain it. But there is no target number out there that we want to grow to a certain number and then stop. We look at it each transaction on its own merits.

--------------------------------------------------------------------------------

Rich Hill, Morgan Stanley - Analyst [70]

--------------------------------------------------------------------------------

Got it. And so maybe just a follow-up question. I'm trying to get a better sense for this. As you're thinking about the growth opportunity going forward, do you think it's more on the operating leverage side of the business or do you think it's more on the external growth side of the business? How would you sort of prioritize those two things?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [71]

--------------------------------------------------------------------------------

I think you look at both of them and you -- the operating group is definitely focused on the operating leverage side and improving the organic growth of this Company. We are also very focused on external growth are balance wide. One of the parts -- one of the reasons our balance sheet -- we've got our balance sheet where it is to take advantage of those opportunities.

But those opportunities need to be cultivated and they just don't happen and so we're going to look at both. We're not going to make any statements onto what we are going to be able to acquire in portfolios but we continue to talk to operators and evaluate various potential transactions.

--------------------------------------------------------------------------------

Rich Hill, Morgan Stanley - Analyst [72]

--------------------------------------------------------------------------------

Great. Great. I'll follow up with any other questions off-line. Thanks for your time.

--------------------------------------------------------------------------------

Operator [73]

--------------------------------------------------------------------------------

(Operator Instructions)

Dennis McGill, Zelman & Associates.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [74]

--------------------------------------------------------------------------------

First question, just on the ATM program, can you maybe just talk you're thinking about that program on a go forward basis? And how you might match that against debt issuance as well as? Is it something that you'd expect similar to the fourth quarter, some almost indifferent to the market as long as you're near these levels and accessing growth capital as you move forward consistently?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [75]

--------------------------------------------------------------------------------

Yes, I think the ATM is just a tool in the toolbox. It allowed us to do some rightsizing of our balance sheet. We're going to hopefully be able to use that rightsizing to drive down borrowing costs and then the borrowings will look more attractive. So I think it's a little bit of a give-and-take both ways. We've utilized all forms of capital in our life -- short life here.

And the ATM was just one of them that we did throughout the year. On the other side of the coin, earlier in the year, we actually did stock repurchases I think Diana went through that as well. We're looking at both sides as to what we think the best opportunity is on a given day.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [76]

--------------------------------------------------------------------------------

That was a good trade through the year, obviously. But I guess when you talk about the comfort level on a leverage or clean up the balance sheet, however you just phrased it, and then also I think the deleveraging, you said, through the year, it sounded like the deleveraging was more just through growth in the earnings side as opposed to the actual debt side of it.

So are you looking at the ratio today as comfortable from a leverage standpoint or do you feel you still have to drive that lower to get to the ratings agency achievements you want?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [77]

--------------------------------------------------------------------------------

No, I think it was both sides. I mean we did pay off some debt. We issued some capital underneath the debt. Those -- and we also had significant growth in our earnings.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [78]

--------------------------------------------------------------------------------

No, not this year. I'm saying on a forward basis for 2017.

--------------------------------------------------------------------------------

Diana Laing, American Homes 4 Rent - CFO [79]

--------------------------------------------------------------------------------

I would say we're really comfortable with where we are right now from a debt metrics standpoint. And I mentioned that we're very -- we're focused on unencumbering assets to give us flexibility and hopefully access to unsecured debt in the future. But I think where we are now is great. I mean we're very happy.

We think the metrics are right in line with where the rating agencies would expect to see it and we continue to have conversations with the rating agencies about investment grade.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [80]

--------------------------------------------------------------------------------

Okay. On the margin improvement side, it seems a big chunk of this is being driven by the production repair and maintenance turn over type cost, both expense and capitalized. How much of that reduction you spoke to, Dave, a little over $2,000 and $1,900 is related to the initiative that you've already implemented or were implementing throughout 2016? And just sort of rolling forward to more markets or more of the portfolio versus new idea that you guys might have around expense control?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [81]

--------------------------------------------------------------------------------

I think we're just -- we're getting better every day. One of the things we did in 2016 was rollout the in-house maintenance program and some of the costs involved in that were start-up costs that won't be incurred in 2017. Also that whole department is getting better and better at their efficiency so we're seeing a number of work orders handled per day per tick moving up. We have just, I think the improvement s, will just get us there and if we do anything where we make other improvements, then we'll drive it even lower.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [82]

--------------------------------------------------------------------------------

The in-house program, Dennis, was rolling out all of 2016 but really was in full rollout, really, towards the end of the year. But in the full rollout period, it was, as Jack said, we were incurring costs that we are expensing to roll it out so there's some benefit just in the fact that you were going to match up better throughout the year which in periods that we didn't have it fully rolled out or even rolled out at all in many of our markets. (multiple speakers)

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [83]

--------------------------------------------------------------------------------

Sorry and if you look at all of 2016 as far as on average, how much of your market footprint was covered by in-house taxes? Is that a 30% to 40% number ; is there some way to frame it to understand how much you still have to pull out?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [84]

--------------------------------------------------------------------------------

I don't and I haven't looked at that number but if I just did, what I think it is off the top of my head, it's probably in the 40% to 50% range.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [85]

--------------------------------------------------------------------------------

And then just last question I had. Houston, and I guess secondarily, Indianapolis, are two markets where maybe are outliers from a pricing power standpoint. Can you just maybe tell us a little bit about what's going on in the ground in those markets?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [86]

--------------------------------------------------------------------------------

Yes. Houston, particularly in the energy corridor, has had some early terminations and some vacancy that we don't like to have vacant homes so we try to bring them in with reducing the price a little bit. So we've done that. We've seen some improvement in Houston and expect that throughout the year, it will continue to improve.

Indianapolis is a solid market. It's just not an area where you get outsized rent growth or that we've seen it anyway. But our occupancy has moved up I think pretty solidly in Indianapolis over the years.

--------------------------------------------------------------------------------

Dennis McGill, Zelman & Associates - Analyst [87]

--------------------------------------------------------------------------------

Okay. Appreciate it. Thanks guys. Good luck.

--------------------------------------------------------------------------------

Operator [88]

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities.

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [89]

--------------------------------------------------------------------------------

I guess a couple questions. First, on the operations side. WIth occupancy here in these low 94% range and your projection for it to be flat to up for this year, should we read into it that the portfolio is at max or peak occupancy to where you think you can optimize revenue in the current environment? And if that's the case, then perhaps can you get a little bit more aggressive on the rent growth side? I think you outlined 3.5% to 4.5% expectation for this year.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [90]

--------------------------------------------------------------------------------

Yes. The 94.2% or low 94% is for the whole portfolio and it includes homes we just bought without tenants in it. So I -- so that's not a maximum thing. I think in our Same-Home, we're high 94% or close to 95%, which is more reflective of where we think it will stabilize out at somewhere in the 95% to 96% range. And a lot of that depends on how quickly we can -- how much more we can drive down our turn times and get houses leased and we're always focused on that.

As far as pushing rates, we push them when we think we can and it's -- if you look across the portfolio, we might push. We push rates harder in areas where we think we'd have more demand and less in areas that we don't. So in the Midwest, for the most part, once it starts snowing, the demand kind of dries up and then once it starts thawing out, it comes back up again so it's -- so I think that will post the better rent growth in the spring and summer months then we will in the winter months.

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [91]

--------------------------------------------------------------------------------

Got you. And maybe another one on operations. You guys talked about core margin outlook this year in the 63%, 64% range, up from 62% last year. I guess I'm curious. How much better do you think that number can get as you implement your in-house maintenance program, as you enhance your operational acumen.

I think maybe we previously saw 65% as a high watermark. Can you hit 70%? And then in terms of the turn times, you mentioned 53 days for last year. What do you think that number can improve to by year-end?

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [92]

--------------------------------------------------------------------------------

I think that number can improve to by year-end or the average for 2017 are really two different numbers but --

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [93]

--------------------------------------------------------------------------------

I understand. Maybe a comment on both sides.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [94]

--------------------------------------------------------------------------------

Yes, I think the average we'll get into the mid-40%s is my guess, Mid-40%s in turn times for the year. The end of the year is slower so will be -- the end of next year could be low 50%s to mid-50%s. Some of that is dependent on how hard we push rates. So if we really push rates, then kind of our methodology is to push it hard early and then if it leases, we get the rent increase and if we don't see much activity at that price, then we move it back down.

But that necessarily takes some time. So the real days were we can have an impact with that affecting rate is how long it takes us from the move-out to getting it rent ready again and that's what we've been really focused on. I think we've pushed it from the beginning of the year from about 18 days to 20 days down to -- we're currently at about somewhere in the 6 days to 8 days.

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [95]

--------------------------------------------------------------------------------

Got it. Okay. Another question, I guess this one may be for you, Diana. I noticed one of your peers in the process of accessing GSE backed debt, which would be the first for an institutional on a single-family rental homes. I'm assuming you guys are looking at that as well.

Perhaps you could give us some sense of the market, maybe a level of interest and maybe some broad terms on what's on offer -- maybe in terms of turn, the pricing, the size of the market and the benefits you see there overall?

--------------------------------------------------------------------------------

Diana Laing, American Homes 4 Rent - CFO [96]

--------------------------------------------------------------------------------

We -- there's not a lot we know about the potential Fannie Mae deals since it hasn't closed. So there's -- I really can't comment on that specifically. As far as our own cost to capital, I think our strategy of maintaining a conservative balance sheet with flexibility in the portfolio and potentially a rating is our best road to efficient cost of capital.

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [97]

--------------------------------------------------------------------------------

Okay, that's fair enough. And then last one may be for you, Dave. I know you've answered and addressed the question but I'm going to try in a slightly different twist. I'm curious on the tenor of the conversations that you potentially are having with small and mid-cap private portfolio owners. With your clear cost of capital and operating advantage along with facing higher interest rates, slowing HPA, are you sensing any change in their willingness to engage and pursue possible combinations?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [98]

--------------------------------------------------------------------------------

Well, I don't know of a transaction that we've actually probably completed on the first discussion with an institutional buyer. It has always been a give-and-take. There's a number of little small portfolios, I think we did a 20-home portfolio this last quarter. Those are a little different and those do close little bit faster.

But the increase in the stock price and all of that is a very, very recent event. It's all happened in the last couple of weeks and I would not -- I wouldn't say there's been a lot of inbound on the last couple of weeks but really, the -- a lot of the drivers for the inbounds are conferences and other events and it's -- none of those have occurred in the last couple of weeks.

But with all of that said, it should be noted that it is -- there is opportunities out there. So it's just getting to a meeting of the minds and that what is attractive and accretive transaction for us also works for the seller. We're not going to close on transactions that are out there just because they're there unless it's accretive for us or meaningful in one way or another for us to do it.

--------------------------------------------------------------------------------

Haendel St. Juste, Mizuho Securities - Analyst [99]

--------------------------------------------------------------------------------

Okay. Thank you.

--------------------------------------------------------------------------------

Operator [100]

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors.

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [101]

--------------------------------------------------------------------------------

Jack, could you quickly share January and February leasing trends, renewal growth, new leasing occupancy what you're sending out renewals at today?

--------------------------------------------------------------------------------

Jack Corrigan, American Homes 4 Rent - COO [102]

--------------------------------------------------------------------------------

We've been pretty consistent on renewals in the 3% to 4% range on re-leasing. We are beginning to push rates and so you'll see something similar to what we have in the fourth quarter in January, bumping up in February. And my guess is it will bump up some more in March and average out to something in the range that I gave you in the 3.5% to 4.5%

--------------------------------------------------------------------------------

John Pawlowski, Green Street Advisors - Analyst [103]

--------------------------------------------------------------------------------

Thanks.

--------------------------------------------------------------------------------

Operator [104]

--------------------------------------------------------------------------------

Thank you. That does conclude our question-and-answer session. At this time, I will turn it back to management for closing remarks.

--------------------------------------------------------------------------------

Dave Singelyn, American Homes 4 Rent - CEO [105]

--------------------------------------------------------------------------------

Well, thank you again for joining us today. We are excited about the year ahead in 2017 and look forward to speaking with you again on our next earnings call. Have a wonderful weekend. Thank you.

--------------------------------------------------------------------------------

Operator [106]

--------------------------------------------------------------------------------

This ends today's conference. Thank you for your participation. You may disconnect your lines at this time.