Q1 2024 · Earnings Call Transcript

May 3, 2024

Operator

Greetings, and welcome to American Homes 4 Rent First Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

Operator

I would now like to turn the conference over to your host, Nicholas Fromm, Director of Investor Relations. Thank you.

You may begin.

Nicholas Fromm

Good morning. Thank you for joining us for our first quarter 2024 earnings conference call.

With me today are David Singelyn, Chief Executive Officer; Bryan Smith, Chief Operating Officer; and Chris Lau, Chief Financial Officer.

Nicholas Fromm

Please be advised that this call may include forward-looking statements. All statements, other than statements of historical facts, 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.

Nicholas Fromm

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, May 3, 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.

Nicholas Fromm

A reconciliation of GAAP to non-GAAP financial measures is included in our earnings press 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.

Nicholas Fromm

With that, I will turn the call over to our CEO, David Singelyn.

David Singelyn

Welcome, everyone, and thank you for joining us today. 2024 is off to a good start.

Demand for single-family rentals and, more specifically, AMH homes remains healthy. In the first quarter, we delivered $0.43 of core FFO per share, representing 5.8% year-over-year growth.

David Singelyn

As expected, the SFR normal seasonal curve is back, and our property management team is doing a great job capturing the accelerating demand heading into our spring leasing season. More broadly, the ongoing macro drivers, including the national housing shortage, aging millennial demographics and challenging home affordability dynamics suggest steady demand into the foreseeable future for single-family rental homes.

David Singelyn

Additionally, the higher-for-longer interest rate scenario seems to be playing out, which may continue to pressure new housing supply. With that in mind, our focus remains on the Development Program, where we continue to do our part in solving the housing shortage by providing new premium housing options in desirable family-friendly locations across the country.

David Singelyn

Turning to an update on sustainability. We published our sixth annual sustainability report last week, which includes updates on our progress and impact on environmental and social initiatives, such as the expansion of our solar pilot program to residents.

As a reminder, whether solar-enabled or not, our newly constructed homes are designed with sustainability in mind. In fact, our 2023 deliveries on average are 54% more energy-efficient than the typical American home.

David Singelyn

Additionally, our corporate headquarters in Las Vegas was recently awarded LEED Gold Certification for the building green design, construction and use practices. This represents another milestone in the company's sustainability journey, affirming AMH's continued commitment to responsible environmental practices.

David Singelyn

In closing, AMH is in a great position starting out the new year. Long-term business fundamentals are strong.

Leasing momentum continues to build into the second quarter, and our Development Program continues to deliver new high-quality homes into the portfolio.

David Singelyn

Now I'll turn the call over to Bryan for an update on our operations and investment programs.

Bryan Smith

Thank you, and good morning, everyone. As Dave mentioned, 2024 is off to a great start, with demand accelerating into the spring leasing season.

Bryan Smith

Website activity is up double digits year-over-year, and the inbound inquiries saw a strong sequential pickup to support the occupancy levels and leasing spreads that remain well above long-term historical averages. Further, the kickoff of our seasonal curve is evident in our sequential occupancy metrics, with March occupancy increasing over that of January and February.

Bryan Smith

Turning to first quarter same-home results. Rate growth was healthy with new renewal and blended rental rate spreads of 4.8%, 5.9% and 5.6%, respectively.

And with same-home average occupied days of 96.2%, this drove same-home core revenue growth of 5.3%. Core operating expense growth was 5.9%, also in line with our expectations.

All of this resulted in same-home core NOI growth of 4.9% for the quarter.

Bryan Smith

First quarter operating momentum has continued into April, demonstrating the strength of the spring leasing season with same-home average occupied days of 96.6% and new, renewal and blended spreads of 5.1%, 5.2% and 5.2%, respectively. While strong, these results are within our range of expectations, and our guide remains unchanged with the bulk of the prime leasing season still ahead.

Bryan Smith

Lastly, expanding more on our investment programs, our strategy, driven by prudent decision-making and consistent execution, remains unchanged. Internally developed homes continue to be our primary method of growth.

For the year, we expect the AMH Development Program to deliver between 2,200 and 2,400 homes at average economic yields in the high 5% area after a reserve for CapEx.

Bryan Smith

In closing, operations are off to a strong start as we enter our busiest period of the year, and our investment programs remain in great shape. As I travel to our field offices across the country, I continue to be impressed with the hard work and dedication of our team members in providing the best resident experience in our space.

Thank you for setting us up for another strong year.

Bryan Smith

With that, I will turn the call over to Chris for the financial update.

Christopher Lau

Thanks, Bryan, and good morning, everyone. I'll cover 3 areas in my comments today: first, a review of our solid quarterly results; second, an update on our balance sheet through recent capital activity; and third, I'll close with a brief update around our unchanged 2024 guidance.

Christopher Lau

Starting off with our operating results. We delivered another consistent and solid quarter with net income attributable to common shareholders of $109.3 million or $0.30 per diluted share.

On an FFO share and unit basis, we generated $0.43 of core FFO, representing 5.8% year-over-year growth and $0.40 of adjusted FFO, representing 6.5% year-over-year growth.

Christopher Lau

From an investment standpoint, our Development Program continues to perform right on track and delivered a total of 469 homes to our wholly owned and joint venture portfolios during the quarter. Specifically, for our wholly owned portfolio, we delivered 441 homes for a total investment cost of approximately $171 million.

Additionally, during the quarter, we sold 471 properties, generating approximately $145 million of net proceeds at an average economic disposition yield in the high 3% to 4% area.

Christopher Lau

Next, I'd like to turn to our balance sheet and recent capital activity. At the end of the quarter, our net debt, including preferred shares to adjusted EBITDA, was 5.3x.

We had $125 million of cash available on the balance sheet, and our $1.25 billion revolving credit facility was fully undrawn.

Christopher Lau

Additionally, following the successful green bond offering that we discussed on our last call, we fully repaid our 2014-SFR2 securitization during the quarter. As a reminder, the 2014-SFR2 securitization had an outstanding principal balance of $461 million, with an expiring interest rate of 4.4% and was collateralized by approximately 4,500 properties that can now be freely reviewed by our asset management and disposition programs.

Christopher Lau

And finally, I'm happy to share that AMH was added to the S&P 400 Index on March 1. This created an opportunistic window to sell approximately 3 million Class A common shares under our ATM program at an average sales price of $37.03.

Given the opportunistic nature, these shares were sold on a 100% forward basis and represent future gross proceeds of $110.6 million that will be used to expand our future growth capacity.

Christopher Lau

Lastly, before we open the call to your questions, I wanted to briefly touch on our 2024 guidance. As expected, the year is off to a strong start with robust demand in leasing activity.

However, given that the bulk of the spring leasing season is still ahead of us, we are currently maintaining our previously provided full year 2024 earnings guidance and look forward to providing another update on this front next quarter.

Christopher Lau

And with that, thank you again for your time, and we'll open the call to your questions. Operator?

Operator

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

Juan Sanabria

Just wanted to ask about external growth and opportunities for portfolio acquisitions, if there's anything out there that would be of interest? And if so, where do you think yields are?

And as a subset of that question, could you give us a sense of where your development yields are on a nominal basis pre-CapEx just so we can comp it apples-to-apples with where some of your peers are quoting cap rates at?

David Singelyn

Juan, it's Dave. Let me start with the acquisition landscape as we see it.

We, in the first quarter, underwrote or received tapes. And I'm going to break this down into 2 components, that the national builder and existing homes.

David Singelyn

So starting with the national builder side, we received tapes in the first quarter. It contained more than 35,000 homes, about 15,000 or a little over 15,000 of those are in our markets.

We analyzed those. And we analyze them based on location, quality, what the type of asset is.

We're looking for detached homes, and then, obviously, get down to price and yield.

David Singelyn

What we were seeing in the national builder side is those that would be in the location and quality that we desire. They're in the high 4s, maybe some in the low 5s on an economic yield.

On a nominal accounting yield, probably add 10, 20 basis points to it. We would need 15%, plus or minus, decline in the transaction price at the current landscape of rents, et cetera, to make those deals work.

David Singelyn

Moving over to the acquisition. We are seeing a significant reduction in the supply of new homes in our markets.

This is not a new story. This is a story that's really been playing out since COVID started.

So we're about half -- in our top 20 markets, we see about half of the number of homes that we saw pre-pandemic.

David Singelyn

Pricing. We haven't seen any significant reduction in pricing, a little bit in a couple of our markets, mainly Midwest.

And again, the way we underwrite on economic yield, those are in the high 4s, low 5s. We might have ability to sharp shoot a property here and there.

we're seeing a little bit of opportunity coming into the 5. So we'll see how that plays out.

David Singelyn

Portfolios. Again, on the portfolio side, it's kind of the same as the acquisition of the existing homes.

On development, high 5s on economic yields, add 10, 20 basis points, gets you around 6% in that area on a nominal NOI basis.

Operator

Our next question is from Eric Wolfe with Citi.

Eric Wolfe

It looks like the reduced bad debt and higher fees added 50 bps to your same-store revenue this quarter. So I was just curious whether you think that's sustainable going forward and whether you've seen a step down in bad debt recently.

Christopher Lau

Yes. Eric, Chris here.

Look, on bad debt, why don't we just kind of take a step back a little bit and talk about collections more broadly. Look, like we talked about on our last call, coming into 2024, collections and bad debt really continued to run, pretty consistent with what we were seeing last year in the low 1% bad debt area.

Christopher Lau

And then as we got into March, we saw some really great execution from our teams across a number of our markets that brought overall first quarter bad debt just under 1% that you pointed out. And while we're optimistic, we know that there are still -- as we're talking or thinking about local municipal and court system processing times that we've been talking about over the course of the last year, not a lot has really changed there yet.

Christopher Lau

So until we see more data or tangible evidence of things improving at the municipal and court system level. It still feels a little bit too premature to change our outlook on a full year basis.

But again -- but March is a good data point, and as I mentioned, we're optimistic.

Operator

Our next question is from Jamie Feldman with Wells Fargo.

James Feldman

Great. So maybe just shifting over to the expense side.

As you -- I know you maintained your guidance. But as you think about some of the moving pieces, anything you think that may be trending higher or lower than your original expectations?

And then I know we're a ways out from November, but as you think about property taxes, millage rates, any early thoughts you can provide on how this year may play out based on conversations with your team?

Christopher Lau

Sure. Jamie, Chris here.

On expenses overall, yes, really no different from the start of the year. Recall that overall expense growth outlook is 6.25% at the midpoint for this year.

Major components being property taxes in the low 7% area, which, as expected, is beginning to show some moderation compared to the last couple of years.

Christopher Lau

We talked about this on our last call, but insurance growth, we're expecting to be in the high single digits. That's based on our renewal that is done at this point.

And then about 5% inflationary growth on our controllables. So as I mentioned, outlook on all of that is unchanged from the start of the year.

Christopher Lau

And then just on property taxes. I think you hit it on the head.

We're early in the property tax year, just as a reminder for folks in terms of how things play out over the course of the year. Keep in mind, majority of property tax values are received over the summer months.

That then kicks off appeals season, which typically runs until the fall or so.

Christopher Lau

And then as you pointed out, tax rates and actual property tax bills are received typically out in the fourth quarter. So we're still early.

But to answer your question specifically, at this point, our full year outlook of property tax growth in the low 7s still feels good, and it's unchanged.

James Feldman

Okay. And I guess, along those lines, I mean, it sounds like your development yields have remained relatively sticky in the high 5%, low 6% range.

Other than a low-cost basis on land, are there any expense drivers that could take those yields even higher? Or it's pretty much just focused on the revenue side?

David Singelyn

Yes. No, I think that there's a couple of things.

One is, as you point out, the land. The other is we are seeing the income side accelerating or growing a little bit faster than the input side.

We've seen -- other than land. Land has been going up over the past year, but a lot of the input costs have been relatively flat in aggregate.

So some up, some down, but in aggregate, it's kind of flat. So I think we can grow into some better yields later in the next couple of years.

Operator

Our next question comes from Keegan Carl with Wolfe Research.

Keegan Carl

Maybe first, this seems a little technical, but I saw you reclassified 139 homes from the Seattle market to the Portland market. I guess, just given the cities over 3 hours apart, what drove that?

And should we be aware of any other markets where the MSAs they're classified at is a bit of a stretch?

Bryan Smith

Yes. Keegan, this is Bryan.

I think the easiest way to look at it is we have some homes that are in the Portland MSA, but are actually in Vancouver, Washington. And there's just a movement of those.

But we're still managing that entire area with the same group. There's really, really no change, nothing to note.

Keegan Carl

Got it. And then just maybe on renewal spreads.

Just curious if you guys would have sent out for May and June?

Bryan Smith

Yes. So we mailed in the 5 to 6 range, similar to what I talked about on the last call for April.

We saw nice pickup at 5.2% for April. And I would expect May and June to be similar for around 5% for the quarter.

Operator

Our next question comes from Adam Kramer with Morgan Stanley.

Adam Kramer

Wanted to ask about your views on new and renewal growth for the full year. I think you guys provided a really helpful kind of full year outlook last quarter.

I think it was renewal in the 5% area and new in the low 4s%. Just kind of given the results year-to-date, I think especially on the new size trending a little bit better, even some of the seasonally softer periods.

Just wondering if there's any change in the full year outlook that you could share?

Bryan Smith

Yes. Thanks, Adam.

This is Bryan. Our expectations for the full year are pretty similar.

We're really pleased with how new lease rate growth has played out. Demand is fantastic.

April was strong at 5.1%, and we're expecting pickup into May, at least the early indications show that.

Bryan Smith

So the team is going to try and capture as much of that growth as we possibly can. We are mindful of the seasonality that we saw last year, and that's kind of factored into the -- so no major change in the full year expectation yet.

We still have the bulk of our expirations to come, and we're managing those as well.

Bryan Smith

On the renewal side, the renewals tend to be more tightly banded. We started the year in the high 5s.

Now we're around 5%, and our expectation for the full year remains in the 5% area.

Christopher Lau

Adam, it's Chris here. And if I could just hop in a little bit more to your question around kind of changing of the outlook.

As we're thinking about the outlook and the guide, I would just remind, look, it's early, right? We just initiated the guide 2 months ago, as Bryan pointed out.

We still have a lot of work to do, right? The belly of the leasing season is still ahead of us.

Christopher Lau

But with that said, as we've been talking about and mentioned in prepared remarks, we really like what we're seeing.

Christopher Lau

In particular, if you recall some of my comments from the start of the year, two of the main areas that we're really focused on when it comes to the shape of the guide over the course of the year come down to, one, newbie spreads heading into the front end of the seasonal curve. And as you just heard from Bryan, those are tracking really nicely through March and April, and with the opportunity that he was talking about to push even further into the 5s for the balance of the second quarter.

Christopher Lau

And then the other area that we're very focused on in the context of the guide is bad debt. And like we were just talking about, we're not out of the woods there yet, but we did see a nice data point in March.

So again, we really like what we're seeing. It's early.

And the right time for us to be talking about recalibration of the guide is at the second quarter after we're through peak leasing season.

Adam Kramer

Great. Chris, Bryan, maybe just a quick follow-up, if I could, and a little bit more of a higher level industry question.

Look, I think we, and I'm sure others out there have a little bit of a hard time finding data or seeing data on what the mom-and-pops in the industry are up to in terms of pricing, in terms of supply.

Adam Kramer

And look, we're a number of years out of COVID already, and I think, certainly, this industry has changed through COVID and coming out of COVID. And so I'm just wondering, from a supply perspective, from a pricing perspective, maybe just what's the latest view on kind of how pricing shapes up relative to the mom-and-pop kind of competitors of yours who, of course, make up the vast majority of this industry?

Bryan Smith

Yes, taking that. This is Bryan.

That's a very good question in that, early on, we had -- when we started this business, we saw some resistance because mom-and-pops traditionally hadn't raised rents, as an example, or weren't out kind of pricing directly to market. Over time, I think they've migrated into a strategy that's closer to ours.

The main difference, though, that I see is the value proposition that the institutional managers provide in terms of a really good underlying services platform, a lot of investment into the homes, both aesthetically and functionally with flooring and upgraded appliances and so forth has been recognized, and we do have some pricing power on that side.

Bryan Smith

Data is difficult with single-family rentals as compared to other asset classes like multifamily, but it has gotten better. And there's a lot of transparency around sites like Zillow, and the mom-and-pops are really following suit.

So the gap isn't as great as it was before, but it does allow the institutions to kind of lead that charge.

Operator

Our next question is from Brad Heffern with RBC Capital Markets.

Brad Heffern

Bryan, occupancy spiked quite a bit in March. It looks like it stayed there in April.

Was that an intentional decision to try and gain some occupancy, where you gave back something on the pricing side? And then are you expecting to get back some of that occupancy as peak leasing season picks up?

Bryan Smith

Thank you, Brad. We were really pleased with how the first quarter played out.

I've talked about it in the past, our expectation of a really nice spike in demand in January. That demand starts electronically on the website, and then in the tours.

And there's a timing effect before we start to pick up occupancy.

Bryan Smith

You can see that we'll pick up into March. We're very pleased with that because we did it in the context of really strong new and renewal rate growth, all the while not offering concessions either on our lease-up in our new communities or in our scattered sites.

So there's a lot of strength coming into March and into April. We're hopeful that, that demand continues to look really good into May, strong occupancy through the second quarter.

Bryan Smith

But as Chris mentioned, as we've talked about, we do have a lot of expirations towards the second part of the year. And with the seasonality that we saw last year are still kind of waiting to see exactly what the shape of occupancy looks like for the year, but we're in a great place right now.

Brad Heffern

Okay. And then I noticed in the release, there were some properties that were classified as newly constructed homes to be disposed.

Presumably, you're not trying to do for-sale homebuilding, so I'm just curious what those are.

David Singelyn

Yes. I think we addressed this already, but it's just an extension of what we do in our asset management function, no different than an existing home.

We look at the markets and in all of our homes in each of the markets. It's a very small number, I think it's 20.

We delivered about 10,000 homes. We are not changing course in any way.

We are not building for sale. We are selling these like we do any disposition through our disposition program.

So we'll sell them on the MLS. So there's no change.

No, there's nothing that's changed from last quarter to this quarter.

Operator

Our next question is from Jesse Lederman with Zelman & Associates.

Jesse Lederman

First one is on the renewal side, renewal rent growth. I saw a little bit of a step lower in April, still at a really healthy level.

But just curious, did that have anything to do with increased pushback or negotiation from tenants on renewals? Is that something you may quantify?

Or is there anything you could point to that drove that step lower from a rent or health perspective or affordability perspective?

Bryan Smith

Thank you, Jesse. This is Bryan.

No, that's not the case at all. In fact, we talked on the last call about where we're mailing April, and you can kind of carry that consistency forward into May and June.

Healthy renewal rates are around 5% into the time of the year where we see a peak in expirations. Some of the seasonality that we saw from last year, we felt those were steady, consistent and appropriate increases.

Bryan Smith

Our revenue management team has gotten very sophisticated and is managing the seasonality of return last year very well. In terms of pushback from the residents, no change.

Obviously, it's playing out nicely with the strong occupancy that we're seeing and the good retention into 2Q.

Jesse Lederman

Great. That's great to hear.

Last question, but with more homes unencumbered, would it be fair to expect an increase year-over-year in '24 for disposed units and maybe even into '25 as well?

Christopher Lau

Jesse, Chris here. Good question, and it ties back to some of the aspects of the disposition program and strategy we've been talking about the last couple of quarters.

Look, we think that we've got tremendous opportunity to really lean into the disposition program, which is exactly what we've been doing. We've been seeing great traction.

Christopher Lau

As a reminder, this quarter, we sold 471 homes. And on a full year basis, we could see ourselves selling and recycling, call it, $400 million to $500 million of capital on a full year basis.

I think it's really just a reflection of the fact that our country has a major lack of housing. Our disposition supply is moving really quickly, and we're achieving sales prices that are at or near asking prices, right?

Christopher Lau

And so I think that there's a great opportunity there. That's a big part of the strategy to our thought process behind paying off the 2014-2 securitization in the first quarter that unencumbered about 4,500 units.

Christopher Lau

And then as our second securitization maturing this year is paid off, that will unencumber another 4,000 to 4,500 as well. So both of those will unlock opportunities for further asset management review and potential disposition.

But also, as we think about the timing on that, we should keep in mind that that's not going to an immediately -- being immediate overnight disposition opportunity.

Christopher Lau

The way that we are exiting through these homes is via the MLS, which means you need to have vacant units. Keep in mind, 96% plus of our homes are not vacant.

We need to let leases roll, tenants move out, and then that gives us the opportunity to work those homes through our disposition program.

Operator

Our next question comes from Michael Goldsmith with UBS.

Michael Goldsmith

It seems like demand is really good right now, but wondering if there's any indications of increasing price sensitivity or indications that you won't be able to keep pushing rates at similar levels to what you did in the first quarter?

Bryan Smith

Michael, this is Bryan. I'm sorry.

I had a hard time. We might have a bad connection.

David Singelyn

You're coming in very muted, and we could not understand the questions. Can you repeat it, please?

Michael Goldsmith

Sorry. Yes, absolutely.

It seems that demand is very good, but wondering if there's any indications of increasing price sensitivity or indications you will be able to keep pushing rate at similar levels to what you did in the first quarter?

Bryan Smith

Okay. Yes, thank you, Michael.

I got it this time. No, demand has been fantastic.

As I said, it kind of peaked or started to peak -- accelerate as we expected in the first quarter. It continues to be very strong into Q2.

Retention is good, the feedback from our residents on renewal offers is strong, really no change from our expectations and where we ended Q1. Everything is pointing in the right direction, and we really like what we're seeing from the demand side.

David Singelyn

Yes, Michael, it's Dave. Let me just add a couple of items that will support that.

I mean, we are, today, in a country that lacks adequate housing. And the demand for our housing is significantly greater than what we can provide to residents.

So we are seeing many, many qualified applications for every available house.

David Singelyn

With that said, there is -- there are limits on rate increases. The other thing to keep in mind, that also gives you comfort of the longevity of it is that we are in markets throughout the country, where we see population in employment growth greater than the national average.

So not only do we have a housing shortage today in the markets that we're in, that shortage is building.

Michael Goldsmith

And my follow-up question is the turnover has been trending upwards modestly. Is this still part of the post-COVID normalization?

And how might a pickup in home sales impact the portfolio?

Bryan Smith

Yes. I think it's just a natural course of events.

With some of the seasonality that we saw continuing, we're posting really nice renewal rate growth. The pickup in the trend of increased move-outs, I don't see it as a permanent thing.

We're looking strong into Q2. There's nothing there that is any cause for alarm.

Operator

Our next question comes from [ Ann Zhang ] with Green Street.

Unknown Analyst

Just a question on how bad debt as a percent of revenues has trended in recent quarters in Atlanta. And are you anticipating pressure on rents or occupancy in that market this year as other SFR and apartment operators work through elevated levels of eviction?

Bryan Smith

Ann, this is Bryan. Atlanta is a key market for us.

And as we've talked about in prior calls, it's one that we're really following closely from a delinquency resolution perspective. It's one that -- we've had some delays, both in the court systems and municipal level, with this resolution.

Bryan Smith

It's important that the -- as a result of those delays and those slowdowns, we have seen elevated bad debt relative to the rest of the portfolio. But we think that's going to be temporary in nature.

And once those delays get worked through the system, we expect it to fall back in line with the rest of the markets.

Unknown Analyst

Great. And a follow-up question on, if any markets have seen a deterioration in bad debt in the recent went?

Bryan Smith

No, I think the further -- or back to Chris' earlier remarks, we had some really fantastic collection efforts in March and some of the markets that were not affected by the municipal slowdowns that I'm referencing. So nothing negative on the bad debt side other than kind of continued things that we saw last year and some of the ones that are a little slower than historical averages.

Operator

Our next question is from Tayo Okusanya with Deutsche Bank.

Omotayo Okusanya

Congrats on paying down the securitization. I'm curious, if we look out 12 months from now, could you give us a better picture of what your capital stack would likely look like?

Christopher Lau

Sure. Great question, Tayo.

Chris here. Look, the best way to think about it is we have one more securitization maturity this year.

That technically matures in the fourth quarter. General game plan, like we talked about last quarter, is that we would see that being refinanced out into the unsecured bond market.

Keep in mind that -- depending on interest rate and capital markets environment, we have the ability where we could refinance and warehouse that via a combination of retained cash flow from disposition proceeds and then capacity comfortably off of our credit facility.

Christopher Lau

And then we have 2 more securitizations that are technically 30-year maturities that have anticipated repayment date opportunities in 2025. If they're not repaid, they'll reprice to market pricing, but we're able to repay those next year with the general game plan, again, like we've been talking about, to get those refinanced into the unsecured bond market, which would move the balance sheet to a 100% unencumbered balance sheet by the end of 2025.

Omotayo Okusanya

Got you. That's helpful.

And then from an [ excellent growth ] perspective, we get everything you're talking about on the MLS side. I know in the past, we've always asked you guys, if you would be interested in doing things with developers.

And I'm just kind of thinking if your thoughts around any of that has changed, and also how you also kind of feel about third-party asset management.

David Singelyn

Yes. Tayo, it's Dave.

Let me take the first being the third-party developers. You may recall, going back a number of years ago, that we have been historically active in using third-party developers.

That's how we started our development program working into the program that we have today.

David Singelyn

What we see today is two things. And the way we look at development and growth programs overall, is, first, our development program provides us assets and new homes that are better located and better built than we can get from national homebuilders.

We are buying land that is contiguous to national homebuilders', but it's the national homebuilders' lots that they are using for retail sale.

David Singelyn

So it gives us just a better product, and the yields are better, but we're not paying any development fees. We have the economies today because of the size of our program.

We're in the top 40 developers in the United States. So we're getting the efficiencies and the economies of scale that national homebuilders get.

So we're not paying a development profit. Therefore, the investment side is much less for the same product that we would be able to buy from the national homebuilders.

David Singelyn

We don't -- we continue -- and let me say it this way, we continue to look at the national homebuilders. They provide additional incremental product to us when the time is right.

We can be patient and disciplined in acquiring assets. I previously indicated that, during the first quarter, we actually looked at 35,000 homes.

That's what we received from all the national homebuilders, from the Lennars and the D.R. Hortons, Pultes and all of the others.

David Singelyn

15,000 of those were in our markets. About half of those, we've actually seen before on tapes.

So they're kind of [ refits ]. 7,500, 8,000 were new offerings to us.

We made bids on them, but we have to make bids to get to the yields that we are looking at, being in the mid- to high 5s of a 15-plus-or-minus-percent discount to what they're asking. At asking price, they're in the upper 4s, some may be 5 or low 5s, but generally in the upper 4s.

David Singelyn

So today, we are not acquiring many homes from the national builders. I think there's a couple of small ones that we were able to put under contract in prior quarters that did close this quarter that met our requirements.

But it's a very, very material number that we're acquiring. I think your last question, if I recall correctly, Tayo, was regarding third-party management.

We did look at this. You may recall, we spent 2 years evaluating it.

We did that a couple of years ago.

David Singelyn

And just reiterating comments from when we did that test and we concluded that this is a low- to very low-margin business with a lot of distractions for our program. We decided that it's not -- the incremental revenue was not beneficial in relationship to the distraction to our operations.

So we see more opportunities in our development program and our core business, and that's what we're focused on. And so I hope that answers that.

Operator

Our next question comes from Anthony Powell with Barclays.

Anthony Powell

I guess a question on home prices in certain markets like Tampa, Florida or whatnot. We're seeing, I guess, reports at home values falling with making housing maybe more affordable in those markets.

Are you seeing any changes in your move-outs to home ownership by market as kind of this trend overall?

Bryan Smith

Yes. Thank you, Anthony.

We track move-out reasons very closely. And Q1 represented our lowest proportion of move-out to buy that we've seen.

It's about 27%. For context, from a historic perspective, it was in the mid-30s.

It does vary region to region. But we didn't see any regions that had anything that would have surprised you.

We have a lower percentage moving out in some of the areas like Las Vegas and Seattle, where there's just a huge gap between the cost of ownership and the cost of renting comparable home. Nothing of note in Tampa lately.

We have seen, in a couple of markets Dave mentioned earlier, some prices coming down, but it hasn't been anything dramatic worthy of note.

Anthony Powell

Great. And maybe one broad one.

I mean, I think you touched on this earlier, but there's been more media around this institutional private equity or hedge fund or institutional also of homes. As a leader in the industry, how do you kind of responded to this?

How are you talking to your commerce people? How are you lobbying?

How are you responding to kind of the overall media? Intention being paid to, I guess, your business now?

David Singelyn

Yes. Anthony, it's Dave.

Yes, you're right. There's been a lot of press around a number of bills, predominantly 3 bills, the ones that you mentioned, Stop Predatory Investing Act, and the End Hedge Fund Control, and there's the American Neighborhoods Act.

It's interesting. All of these have been introduced by individuals that are up for reelection.

I look at them as campaign bills or messaging bills. These bills have not even -- they don't -- they haven't received votes even in committee.

David Singelyn

They're not moving through the committee. And I don't see any movement on these bills, considering that this is an election year.

And Congress, at the federal level, really needs to address some must-pass legislation around funding bills, et cetera.

David Singelyn

Contrast that to what actually has been accomplished, and that's at the state level. And there's been some successful legislation passed over the last 3 to 6 months promoting housing, there are pro housing bills, both from an operational standpoint, like dealing with squatters, also with respect to growth, dealing with zoning and those type of items, to construction to address the housing availability.

David Singelyn

And this isn't just 1 bill out there. This is many, many bills in many states.

I'm just looking for the list of states, but it's about 6 or 8 states, Georgia, Florida, Washington and others that have passed very pro housing bills in the last 6 to -- 6 or so months.

David Singelyn

And so we see the fact that the states recognize that there is a housing shortage, and that housing shortage is creating affordability issues, and it's trying to be addressed. But it's being addressed at the state level, which is where it should be addressed.

Operator

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to management for closing comments.

David Singelyn

Thank you, operator, and thank you to all of you for attending today's call. We're grateful for your participation and interest in AMH.

I look forward to seeing many of you at NAREIT in June. So thank you for your time today.

Goodbye.

Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

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