U.S. Single Family Rental REITs "Escaping House Arrest?" Goldsmith

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U.S. Single Family Rental REITs "Escaping House Arrest?" Goldsmith

capital allocation toward share repurchases. INVH noted that it continues to

evaluate homes to sell, but the low tax basis and high renewal rate somewhat

limits the opportunities. Additionally, those more positive on the shares appreciate

the asset light Resibuilt investment. The company delivered 300 homes in 1Q'26

with a positive earnings contribution.

Those with a more negative view point to INVH's deceleration in renewal lease

spreads as an indication that softer new lease growth is starting to impact

renewals. On the new lease side, spreads were down -3.0% which compounds on

1Q'25 of down -0.1%. Despite softer comparisons through the year, they think

that INVH may have challenges meeting its FY blends of mid 2's which imply an

acceleration in 2Q-4Q'25 of ~130 bps vs. 1Q'26. Finally, bears recognise that

occupancy is normalizing, but point out that it is now below the pre-COVID levels.

Within capital allocation, they appreciate accretive share repurchases but think

that slower forward purchase agreements from developers at mid-5% to 6%

yields are a material offset. At the peak in 2024, there were 2,700 homes in

forward purchase agreements vs. 550 as of 1Q'26. Overall, bears see uncertainty

around the outlook as justifying a discount valuation to its 5-yr average. INVH

trades at a NTM multiple of 14.5x, which is below the 5-yr average by -5 turns.

What is the bull/bear case on AMH?

We think AMH bulls remain focused on the company's stable growth trajectory

with results so far in 2026 trending in-line with expectations. While seasonal

demand was slow to start the year, AMH noted a strong pick up late in 1Q and into

April. Weather and macro uncertainty were likely factors in the slow start.