Invitation Homes Agrees to Acquire Approximately 500 Additional Newly Built Homes

Rhea-AI Summary

Invitation Homes Inc. (NYSE: INVH) announces a $140 million investment to acquire 500 newly built homes in Charlotte, Jacksonville, and Nashville through partnerships with three top-tier homebuilders. The company aims to address housing supply issues and provide affordable housing options, emphasizing its commitment to shareholder returns and strategic growth.

Insights

Real Estate Market Analyst

The announcement by Invitation Homes Inc. of its $140 million investment in acquiring approximately 500 newly built homes is a strategic move in the real estate market, particularly within the single-family home leasing sector. This investment not only indicates the company's commitment to expanding its portfolio but also reflects the broader industry trend towards institutional investment in residential real estate. The locations chosen—Charlotte, Jacksonville and Nashville—are notable for their growing populations and economic development, which could potentially lead to an increased demand for rental properties.

By establishing new relationships with three top-tier homebuilders, Invitation Homes is diversifying its acquisition channels and potentially securing a pipeline for future property acquisitions. This could enhance the company's ability to maintain a consistent supply of new homes for lease, in the face of a national housing shortage that has been driving up home prices and rents. The strategy might offer attractive risk-adjusted returns for stockholders as it could lead to stable cash flows from long-term leases and appreciation in property values over time.

Financial Analyst

From a financial perspective, Invitation Homes' investment represents a significant capital allocation that could have notable implications for its balance sheet and cash flow statements. A $140 million investment in real estate assets requires careful consideration of financing methods, whether through debt, equity, or a combination of both. Investors should monitor the company's debt-to-equity ratio and interest coverage metrics closely, as these will be indicators of the financial health and leverage of the company post-acquisition.

The anticipated deliveries of homes in both 2023 and 2024 suggest a forward-looking growth plan that may appeal to investors seeking growth in the real estate sector. However, it is important to consider the cyclical nature of real estate and the potential impact of economic downturns on the company's performance. Additionally, the company's stock performance may be influenced by its ability to integrate these new assets and manage them efficiently, maintaining occupancy rates and rental income.

Construction Industry Analyst

The collaboration between Invitation Homes and top-tier homebuilders is a reflection of the evolving dynamics in the construction industry. The partnership approach allows homebuilders to mitigate the risks associated with speculative building, as they have a committed buyer in place. For Invitation Homes, this means access to a supply of homes tailored to their specifications and potentially quicker delivery times.

The focus on new construction also aligns with consumer preferences for modern amenities and energy-efficient homes, which can be more attractive to potential tenants and command higher rents. However, the reliance on new construction comes with risks, such as potential delays due to supply chain disruptions or labor shortages that have been prevalent in the construction industry in recent years. These factors could affect the timeline for property deliveries and, consequently, the projected revenue growth from these investments.

Company’s investment helps address needed home supply while adding three new top-tier homebuilder relationships

DALLAS--(BUSINESS WIRE)-- Invitation Homes Inc. (NYSE: INVH) (“Invitation Homes” or the “Company”), the nation’s premier single-family home leasing and management company, announced today that it is under contract to acquire approximately 500 additional newly built homes for a total investment of approximately $140 million. The homes will be located in Charlotte, Jacksonville, and Nashville, and are being acquired through new relationships with three top-tier homebuilders, with deliveries expected to begin later this year.

“As lack of supply continues to be a primary culprit in the high cost of housing, we are proud to further broaden our strong homebuilder partnerships to create additional housing,” said Scott Eisen, the Company’s Chief Investment Officer. “At the same time, we believe our strategy of partnering with the largest and best homebuilders to grow our footprint across the country offers the best risk-adjusted returns to our stockholders.”

“Our homes provide a choice for individuals and families to live in a great neighborhood that might not otherwise be accessible to them and create a chance for those same households to save money toward their goals,” Mr. Eisen continued.

The Company received deliveries of 648 newly built homes in 2023 and currently anticipates deliveries of approximately 1,000 new homes from its new product pipeline in 2024.

About Invitation Homes

Invitation Homes, an S&P 500 company, is the nation's premier single-family home leasing and management company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools. The Company's mission, "Together with you, we make a house a home," reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to the Company's expectations regarding the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association and insurance costs, poor resident selection and defaults and non-renewals by the Company's residents, the Company's dependence on third parties for key services, risks related to the evaluation of properties, performance of the Company's information technology systems, risks related to the Company's indebtedness, and risks related to the potential negative impact of unfavorable global and United States economic conditions (including inflation and rising interest rates), uncertainty in financial markets (including as a result of events affecting financial institutions), geopolitical tensions, natural disasters, climate change, and public health crises, on the Company’s financial condition, results of operations, cash flows, business, associates, and residents. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes these factors include, but are not limited to, those described under Part I. Item 1A. “Risk Factors” of its Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”), as such factors may be updated from time to time in the Company's periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release, in the Annual Report, and in the Company's other periodic filings. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240403162683/en/

Investor Relations Contact:

Scott McLaughlin

844.456.INVH (4684)

IR@InvitationHomes.com

Media Relations Contact:

Kristi DesJarlais

972.421.3587

Media@InvitationHomes.com

Source: Invitation Homes Inc.

FAQ

How many newly built homes is Invitation Homes Inc. acquiring through its recent investment?

Invitation Homes Inc. is under contract to acquire approximately 500 newly built homes.

What is the total investment amount for the acquisition of the new homes by Invitation Homes Inc.?

The total investment for the acquisition of the new homes amounts to approximately $140 million.

In which locations will the newly acquired homes by Invitation Homes Inc. be situated?

The newly acquired homes will be located in Charlotte, Jacksonville, and Nashville.

How many new homes is Invitation Homes Inc. expecting deliveries of from its new product pipeline in 2024?

Invitation Homes Inc. anticipates deliveries of approximately 1,000 new homes from its new product pipeline in 2024.

What is the strategic focus of Invitation Homes Inc. in partnering with top-tier homebuilders?

Invitation Homes Inc. aims to partner with the largest and best homebuilders to expand its footprint across the country, providing the best risk-adjusted returns to its stockholders.