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American Homes 4 Rent

American Homes 4 RentAMHEarnings & Financial Report

NYSE · real estate investment trust

American Homes 4 Rent, doing business as AMH, is a real estate investment trust based in Las Vegas, Nevada, that invests in single-family rental homes. As of December 31, 2019, the company owned 52,552 homes in 22 states. Its largest concentrations are in Atlanta, Dallas-Fort Worth, and Charlotte, North Carolina.

What changed in American Homes 4 Rent's 10-K — 2022 vs 2023

Top changes in American Homes 4 Rent's 2023 10-K

245 paragraphs added · 248 removed · 209 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Eviction is a last resort, and the eviction process is managed in compliance with local and state regulations. The eviction process is documented through a property management system with all correspondence and documentation stored electronically. • Tenant Relations and Property Maintenance. We also are responsible for most property repairs and maintenance and tenant relations.
Eviction is a last resort, and the eviction process is managed in compliance with local and state regulations. The eviction process is documented through a property management system with all correspondence and documentation stored electronically. • Tenant Relations and Property Maintenance. We are also responsible for most property repairs and maintenance and tenant relations.
Our “built-for-rental” homes will leverage our existing property management platform and are built with the long-term renter in mind, including maintenance resilient features, as well as floor plans, finishes and other features known to be desirable to our residents.
Our “built-for-rental” homes leverage our existing property management platform and are built with the long-term renter in mind, including maintenance resilient features, as well as floor plans, finishes and other features known to be desirable to our residents.
We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program and acquiring newly constructed homes from third-party developers through our National Builder Program in target markets in select submarkets of MSAs.
We are focused on developing “built-for-rental” homes through our internal AMH Development Program and acquiring newly constructed homes from third-party developers through our National Builder Program in target markets in select submarkets of MSAs.
We believe our primary competitors in acquiring our target properties through individual acquisitions are individual investors, small private investment partnerships looking for one-off acquisitions of investment properties that can either be rented or restored and sold, and larger investors, including private equity funds and other REITs, that are seeking to capitalize on the same market opportunity that we have identified.
We believe our primary competitors in acquiring our target properties through individual acquisitions are private home buyers, individual investors, small private investment partnerships looking for one-off acquisitions of investment properties that can either be rented or restored and sold, and larger investors, including private equity funds and other REITs, that are seeking to capitalize on the same market opportunity that we have identified.
References to the “Company,” “we,” “our,” and “us” mean collectively AMH, the Operating Partnership and those entities/subsidiaries owned or controlled by AMH and/or the Operating Partnership. We are focused on acquiring, developing, renovating, leasing and managing single-family homes as rental properties. We commenced operations in November 2012.
References to the “Company,” “we,” “our” and “us” mean collectively AMH, the Operating Partnership and those entities/subsidiaries owned or controlled by AMH and/or the Operating Partnership. We are focused on acquiring, developing, renovating, leasing and managing single-family homes as rental properties. We commenced operations in November 2012.
We believe that we have been organized and operate in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws for each of our taxable years commencing with our taxable year ended December 31, 2012 through the current taxable year ended December 31, 2022.
We believe that we have been organized and operate in conformity with the requirements for qualification and taxation as a REIT under U.S. federal income tax laws for each of our taxable years commencing with our taxable year ended December 31, 2012 through the current taxable year ended December 31, 2023.
American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the “Operating Partnership,” our “operating partnership” or the “OP”) is the entity through which the Company conducts substantially all of our business and owns, directly or through subsidiaries, substantially all of our assets.
American Homes 4 Rent, L.P., a Delaware limited partnership formed on October 22, 2012, and its consolidated subsidiaries (collectively, the “Operating Partnership” or the “OP”) is the entity through which the Company conducts substantially all of its business and owns, directly or through subsidiaries, substantially all of its assets.
We expect to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for our taxable year ending December 31, 2023 and subsequent taxable years. We believe that the Operating Partnership is properly treated as a partnership for federal income tax purposes.
We expect to satisfy the requirements for qualification and taxation as a REIT under the U.S. federal income tax laws for our taxable year ending December 31, 2024 and subsequent taxable years. We believe that the Operating Partnership is properly treated as a partnership for federal income tax purposes.
On average, it takes approximately 10 to 30 days to lease a property after its development. We also utilize land banking arrangements as a method of acquiring land to help us manage the financial and market risk associated with land holdings.
On average, it takes approximately 10 to 50 days to lease a property after its development. We also utilize land banking arrangements as a method of acquiring land to help us manage the financial and market risk associated with land holdings.
AMH is the general partner of, and as of December 31, 2022 owned approximately 87.3% of the common partnership interest in, the Operating Partnership. The remaining 12.7% of the common partnership interest was owned by limited partners. As the sole general partner of the Operating Partnership, AMH has exclusive control of the Operating Partnership’s day-to-day management.
AMH is the general partner of, and as of December 31, 2023 owned approximately 87.7% of the common partnership interest in, the Operating Partnership. The remaining 12.3% of the common partnership interest was owned by limited partners. As the sole general partner of the Operating Partnership, AMH has exclusive control of the Operating Partnership’s day-to-day management.
We have made significant investments in our lease management, accounting and asset management systems. They are designed to be scalable to accommodate continued growth in our portfolio of homes. Our website is fully integrated into the tenant accounting and leasing system.
We have made significant investments in our operating, accounting and asset management systems. They are designed to be scalable to accommodate continued growth in our portfolio of homes. Our website is fully integrated into the tenant accounting and leasing system.
We have an integrated operating platform that consists of 1,794 personnel dedicated to property management, acquisitions, development, marketing, leasing, financial and administrative functions.
We have an integrated operating platform that consists of 1,725 personnel dedicated to property management, acquisitions, development, marketing, leasing, financial and administrative functions.
Not all of the homes we acquire through traditional channels meet all of these criteria, especially if acquired as part of a bulk purchase. In addition to our traditional MLS acquisition channel, we continue to acquire newly constructed homes from third-party developers through our National Builder Program. • Expand our one-of-a-kind internal development program.
Not all of the homes we acquire through traditional channels meet all of these criteria, especially if acquired as part of a bulk purchase. In addition to our traditional MLS acquisition channel, we continue to acquire newly constructed homes from third-party developers through our National Builder Program. • Maintain a geographically diversified portfolio.
Our property management functions are 100% internalized, which we believe provides us with consistency of service, control and branding in the operation of our properties. • Establish a nationally recognized brand. We recently unveiled a new corporate brand identity in January 2023.
Our property management functions are 100% internalized, which we believe provides us with consistency of service, control and branding in the operation of our properties. • Establish a nationally recognized brand.
In addition to these recent trends, we also believe the persistent national housing shortage and the progression of the millennial demographic into “family formation” years will continue to drive long-term demand for our single-family rental homes.
However, if these trends diminish or mortgage rates decline, demand for our single-family rental homes may be impacted. In addition to these recent trends, we also believe the persistent national housing shortage and the progression of the millennial demographic into “family formation” years will continue to drive long-term demand for our single-family rental homes.
Our Business and Growth Strategies Our primary objective is to generate attractive risk-adjusted returns for our shareholders through dividends and capital appreciation by acquiring, developing, renovating, leasing and managing single-family homes as rental properties. We believe we can achieve this objective by pursuing the following strategies: • Employ a disciplined property acquisition process.
Our Business and Growth Strategies Our primary objective is to generate attractive risk-adjusted returns for our shareholders through dividends and capital appreciation by acquiring, developing, renovating, leasing and managing single-family homes as rental properties. We believe we can achieve this objective by pursuing the following strategies: • Grow through our one-of-a-kind internal development program.
As of December 31, 2022, the Company held 58,993 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) within 21 states, including 1,115 properties classified as held for sale, and 55,605 of our total properties (excluding properties held for sale) were occupied. The Company also held an additional 2,540 properties in unconsolidated joint ventures as of December 31, 2022.
As of December 31, 2023, the Company held 59,332 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) within 21 states, including 862 properties classified as held for sale, and 55,768 of our total properties (excluding properties held for sale) were occupied. The Company also held an additional 2,978 properties in unconsolidated joint ventures as of December 31, 2023.
Even if AMH qualifies as a REIT, we may still be subject to certain U.S. federal, state and local taxes on our income and assets and to U.S. federal income and excise taxes on our undistributed income. Human Capital Management As of December 31, 2022, we had 1,794 dedicated personnel.
Even if AMH qualifies as a REIT, we may still be subject to certain U.S. federal, state and local taxes on our income and assets and to U.S. federal income and excise taxes on our undistributed income.
All full-time employees are eligible for our benefits package including healthcare insurance, a 401(k) retirement plan, an employee stock purchase plan, a tuition reimbursement plan, paid time off and our employee wellness programs.
All full-time employees are eligible for our comprehensive benefits package, which includes robust healthcare and life insurance options, a 401(k) retirement plan with company contributions that vest immediately, an employee stock purchase plan, a tuition reimbursement plan, paid time off and our employee wellness programs.
We also participate in investment vehicles with third-party investors as an alternative source of equity to grow our business. Our executive officers have substantial experience organizing and managing investment vehicles with third-party investors. Our Business Activities Property Development, Acquisition, Renovation, Leasing and Property Management • Property Development.
Our executive officers have substantial experience organizing and managing investment vehicles with third-party investors. Our Business Activities Property Development, Acquisition, Renovation, Leasing and Property Management • Property Development.
We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program, which we believe represents one of the best available investments on a risk-adjusted return basis.
We have created a fully integrated internal development program, known as AMH Development, that constructs “built-for-rental” homes, which we believe represents one of the best available investments on a risk-adjusted return basis.
We have established a toll-free number serviced by our call center and a website to provide a 2 direct portal to reach potential residents and to drive our brand presence. We believe our brand has gained recognition within a number of our markets. • Optimize capital structure.
We believe that creating brand awareness will facilitate the growth and success of our company. We have established a toll-free number serviced by our call center and a website to provide a 2 direct portal to reach potential residents and to drive our brand presence.
We continue to strive toward establishing “AMH” as a nationally recognized brand because we believe that establishing a brand well-known for quality, value and resident satisfaction will help attract and retain residents and qualified personnel, as well as support higher rental rates. We believe that creating brand awareness will facilitate the growth and success of our company.
This branding leverages the company’s rich heritage, people-first employer culture and an industry leading sustainability program. We continue to strive toward establishing “AMH” as a nationally recognized brand because we believe that establishing a brand well-known for quality, value and resident satisfaction will help attract and retain residents and qualified personnel, as well as support higher rental rates.
Additionally, our single-family properties are at greater risk in certain markets for adverse weather conditions such as hurricanes in the late summer months and extreme cold weather in the winter months. Available Information Our website address is www.amh.com.
Our property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season. Additionally, our single-family properties are at greater risk in certain markets for adverse weather conditions such as hurricanes in the late summer months and extreme cold weather in the winter months.
The Human Capital and Compensation Committee of the board of trustees oversees our company’s human capital programs and policies, including with respect to employee retention and development, and regularly meets with senior management to discuss these issues. Employee Engagement We recognize employee engagement as a critical factor to our success.
Our commitment to human capital development is a focus of not just our executive leadership, but also our board of trustees. The Human Capital and Compensation Committee of the board of trustees oversees the Company’s human capital programs and policies, such as employee retention and development, and regularly meets with executive leadership to discuss these issues.
Training and Development We provide training designed to meet the business and technical skills necessary for our employees to succeed in their roles and to advance their careers in our company. We provide leadership development training to support our managers and executives and to complement our succession planning efforts.
Training and Development We provide training designed to meet the business and technical skills necessary for our employees to succeed in their roles and advance their careers at the Company. From their first day with us, we aim to provide our team members with the tools and training necessary to succeed.
Historically, we have experienced higher levels of tenant move-outs and move-ins during the late spring and summer months, which impacts both our rental revenues and related turnover costs. Our property operating costs are seasonally impacted in certain markets for expenses such as HVAC repairs, turn costs and landscaping expenses during the summer season.
Seasonality We believe that our business and related operating results will be impacted by seasonal factors throughout the year. Historically, we have experienced higher levels of tenant move-outs and move-ins during the late spring and summer months, which impacts both our rental revenues and related turnover costs.
Our experienced land acquisition team and our proprietary data analytics enables us to strategically identify ideal land opportunities that are within our existing footprint in our high-growth markets. Our inventory of land holdings and future acquisitions will allow us to sustain our projected stabilized level of development over the next several years. • Maintain a geographically diversified portfolio.
Our experienced land acquisition team and our proprietary data analytics enables us to strategically identify ideal land opportunities that are within our existing footprint in our high-growth markets. • Employ a disciplined property acquisition process.
The simplified name of “AMH” and reimagined look and feel represent a commitment to continued innovation, as well as to the company’s original purpose and leadership in powering a better future for American housing. This branding leverages the company’s rich heritage, people-first employer culture and an industry leading sustainability program.
Our corporate brand identity, which was updated to the simplified name of “AMH” with a reimagined look and feel in January 2023, represents a commitment to continued innovation, as well as to the company’s original purpose and leadership in powering a better future for American housing.
We may use leverage to increase potential returns to our shareholders, but we will seek to maintain a conservative and flexible balance sheet. We have obtained capital through the issuance of equity securities, the use of unsecured credit facilities, the issuance of unsecured senior notes, preferred shares, and through asset-backed securitization transactions completed during 2014 and 2015.
We have obtained capital through the issuance of equity securities, the use of unsecured credit facilities, the issuance of unsecured senior notes, preferred shares, and through asset-backed securitization transactions completed during 2014 and 2015. We also participate in investment vehicles with third-party investors as an alternative source of equity to grow our business.
We are committed to creating and maintaining a great place to work with an inclusive culture, competitive benefits, and opportunities for training and growth. Our commitment to human capital development is a focus of not just our senior management, but also our board of trustees.
Human Capital Management Our success depends on our ability to attract, retain and grow a skilled and diverse workforce to care for our residents and our portfolio of high-quality homes. We are committed to creating and maintaining a great place to work with an inclusive culture, competitive benefits and opportunities for training and growth.
The work-from-home proliferation has continued to drive further demand for larger living spaces and the increase in mortgage rates has made renting a single-family home more attractive and we expect these trends to continue into 2023.
Further, we have benefited from increases in long-term demand due to population growth in households desiring detached single-family homes, the surge in demand for larger living spaces driven by the proliferation of work-from-home arrangements, and increases in mortgage rates which have made home ownership more expensive. We expect these trends to continue into 2024.
There has been vigorous and continuing political debate and discussion, which we participate in, with respect to 5 residential housing laws and regulations. We cannot be certain if or when any specific proposal or policy might be announced or adopted by governmental authorities, and, if so, what the effects on us may be.
We are currently monitoring proposals on 5 property tax relief, rent pricing methods and fee disclosures. We cannot be certain if or when any specific proposal or policy might be announced or adopted by governmental authorities, and, if so, what the effects on us may be.
We provided approximately 92,000 hours of training to employees, an average of 51 hours per employee, during the year ended December 31, 2022. Meetings with our District and Regional Managers held throughout the year are intentional opportunities to focus on our employee’s leadership and development. Workplace Safety The health and safety of our employees is a top priority.
We provided approximately 92,500 hours of training to employees, an average of 54 hours per employee, during the year ended December 31, 2023. Workplace Safety The health and safety of our employees is a top priority. We have implemented company-wide policies that address occupational health and safety concerns and offer programs that address these topics.
Our OSHA Recordable Incident Rate for 2022 was 2.4, which continues to be below the national average rate and in line with our historical average rate and demonstrates our commitment to maintaining a safe and healthy environment. Seasonality We believe that our business and related operating results will be impacted by seasonal factors throughout the year.
We provide annual safety training for all employees, and every employee in a safety-sensitive position is required to complete additional relevant training. Our OSHA Recordable Incident Rate for 2023 was 1.7, which is below both the historical national average rate and our historical average rate and demonstrates our commitment to maintaining a safe and healthy environment.
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Further, we have benefited from increases in long-term demand primarily due to households accelerating decisions to leave city centers and apartments for suburban, detached single-family homes as well as recent increases in mortgage rates which has made home ownership more expensive.
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We believe our brand has gained recognition within a number of our markets. • Optimize capital structure. We may use leverage to increase potential returns to our shareholders, but we will seek to maintain a conservative and flexible balance sheet.
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However, if more companies begin to require a return to in-person or hybrid work arrangements or mortgage rates decline, demand for our single-family rental homes may be impacted.
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Some states and local jurisdictions continue to propose and pass regulations restricting landlords’ ability to screen applicants, raise rents, process evictions and terminate tenancies. There has been vigorous and continuing political debate and discussion, which we participate in, with respect to residential housing laws and regulations.
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None of our personnel are covered by a collective bargaining agreement. Our success depends on our employees providing quality service to our residents. This requires us to attract, retain and grow a skilled and diverse workforce to design and maintain high quality homes.
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As of December 31, 2023, we had 1,725 dedicated employees. None of our employees are covered by a collective bargaining agreement. Employee Engagement To index employee satisfaction and maintain a pulse on how our employees are doing, we use a survey platform that invites dialogue and feedback on a voluntary, confidential and anonymous basis.
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We have developed programs designed to attract and retain our talent, and to identify ways to increase employee engagement and satisfaction across the organization. To help build a positive culture and employee experience, each year we appoint members to our company’s Employee Council.
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To ensure ongoing monitoring of trends, we regularly conduct pulse surveys of all employees. During the year ended December 31, 2023, we maintained a healthy 72% participation rate, with over 11,000 comments received.
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This council, led by members of senior management, provides participants with a unique forum to provide feedback from all levels in the organization. In 2022, we launched six Employee Resource Groups (“ERGs”). These ERGs represent safe spaces designed to provide networking opportunities, raise cultural awareness, promote trust, support development, and foster allyship across our organization.
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Results are then aggregated via a secure third-party platform for analysis, and a summary dashboard is presented quarterly to the board’s Human Capital and Compensation Committee to maintain awareness of employee sentiment. Senior leadership then reviews and acts on this feedback as appropriate.
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Partnering with a third-party engagement survey company, we also periodically survey all employees to measure and assess employee satisfaction. All feedback is anonymous and aggregated in a secure system for analysis. Another important part of engagement is compensating our employees competitively and providing an attractive benefits package.
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Enterprise-level and regional Town Halls, Employee Council meetings, biweekly field representative calls, information technology sessions and company-wide emails are examples of additional ways through which we deliver announcements, promote transparency and engage with our workforce. As a result of feedback delivered in these forums, our employees have played an instrumental role in shaping and advancing the implementation of workplace initiatives.
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During the year ended December 31, 2022, employee turnover was 33.5%. 6 Diversity, Equity and Inclusion We champion inclusion and diversity and embrace Valuing Differences as one of our company’s core philosophies. A two-part “Valuing Differences” training series is mandatory for all employees, the first part to be completed within an employee’s first six months of service.
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Another form of employee engagement we’ve adopted is our social impact program, in which we provide company-sponsored volunteer opportunities, volunteer grants and an employee match program to enable employees to give back to their communities and support their favorite causes at work.
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In 2022, our employees participated in 2,210 hours of total diversity, equity and inclusion training. Our Human Resources department routinely monitors diversity in all employment decisions, including but not limited to hiring and promotions. The data in the table below reflects our employee diversity as of December 31, 2022.
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We recognize that people thrive when they have the means to meet their needs and goals, both in and out of the workplace. To support our employees in living more fulfilled lives, we maintain a broad range of benefits that promote their physical, emotional and financial wellness.
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We believe that women and minority representation is enhanced through our ongoing human capital programs.
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During the year ended December 31, 2023, employee turnover was 27.9%. 6 Diversity, Equity and Inclusion We believe that teams comprised of individuals with diverse identities, backgrounds, experiences, perspectives and viewpoints improve dialogue and decision-making in both the workplace and the boardroom, contributing to overall organizational effectiveness.
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Women Minorities (1) Undeclared Race Employees 43% 41% 12% Management positions 41% 29% 16% Senior leadership of VP or above 25% 30% 8% (1) Minorities percentage is calculated as the number of employees that declared a minority race divided by total employees (which includes employees who did not declare any race) as of December 31, 2022.
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Our diversity, equity and inclusion principles are – embrace individual differences, treat people fairly and create a sense of community and belonging. These principles guide how we engage one another in the workplace. We promote a sense of belonging and encourage an environment of respect through two flagship programs.
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We have implemented company-wide policies that address occupational health and safety concerns, and offer programs that address these topics. We provide annual safety training for all employees and every employee in a safety-sensitive position is required to complete additional relevant training.
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First, our “Valuing Differences” learning series provides a foundation for creating awareness and understanding for all team members – 2023 marked the fourth year of this program, and the training is offered to all new employees within their first six months of employment.
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Rooted in our core competency of “Values Differences,” the program helps employees develop greater awareness about personal biases and learn tools for effective communication to strengthen working relationships.
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The program also helps employees learn about the policies and initiatives developed by AMH to promote a fair and inclusive workplace and actionable ways to translate these insights into tools to become more equitable leaders.
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We also have an Employee Resource Group program that is designed to foster an environment of acceptance and inclusion, enhance social and professional networking among employees, raise cultural awareness, and assist AMH in connecting with the communities in which we operate—all ultimately to strengthen our business, promote innovation, develop talent, and build a great workplace.
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Employees are guided through their professional journey by a development toolkit that identifies activities, experiences and milestones for their growth. This systematic review of skills and strengths facilitates a continuous process of leadership development, pipeline development and succession planning.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Building rental homes and rental communities also involves significant risks to our business, such as delays or cost increases due to changes in or failure to meet regulatory requirements, including permitting and zoning regulations, 9 failure of lease rentals on newly-constructed properties to achieve anticipated investment returns, inclement weather, adverse site selection, unforeseen site conditions or shortages of suitable land, construction materials and labor and other risks described below.
Building rental homes and rental communities also involves significant risks to our business, such as delays or cost increases due to changes in or failure to meet regulatory requirements, including permitting and zoning regulations, failure of lease rentals on newly-constructed properties to achieve anticipated investment returns, inclement weather, adverse site selection, unforeseen site conditions or shortages of suitable land, construction materials and labor and other risks described below.
In order to satisfy these distribution requirements to maintain our REIT status and avoid the payment of income and excise taxes, we may need to take certain actions to raise funds if we have 18 insufficient cash flow, such as borrowing funds, raising additional equity capital, selling a portion of our assets or finding another alternative to make distributions to our stockholders.
In order to satisfy these distribution requirements to maintain our REIT status and avoid the payment of income and excise taxes, we may need to take certain actions to raise funds if we have insufficient cash flow, such as borrowing funds, raising additional equity capital, selling a portion of our assets or finding another alternative to make distributions to our stockholders.
While 12 we intend to vigorously defend any non-meritorious action or challenge, we cannot assure you that we will not be subject to expenses and losses that may adversely affect our operating results. Government investigations or legal proceedings brought by governmental authorities may result in significant costs and expenses and reputational harm and may divert resources from our operations.
While we intend to vigorously defend any non-meritorious action or challenge, we cannot assure you that we will not be subject to expenses and losses that may adversely affect our operating results. Government investigations or legal proceedings brought by governmental authorities may result in significant costs and expenses and reputational harm and may divert resources from our operations.
Although a safe harbor is available, for which certain sales of property by a REIT are not subject to the 100% prohibited transaction tax, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.
Although a safe harbor is available, for which certain sales of property by a REIT are not subject to the 100% prohibited transaction tax, we 17 cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business.
Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other 16 requirements on a continuing basis.
Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis.
If they are successful in any such endeavors, they could 14 directly limit and constrain our operations, adversely impact our business and may impose on us significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions. The direct and indirect impacts of climate change may adversely affect our business.
If they are successful in any such endeavors, they could directly limit and constrain our operations, adversely impact our business and may impose on us significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions. The direct and indirect impacts of climate change may adversely affect our business.
Their interest in such matters may differ from other shareholders and may also make it more difficult for another party to acquire or control the Company with their votes. 15 Provisions of the Company’s declaration of trust may limit the ability of a third-party to acquire control of the Company by authorizing the Company’s board of trustees to issue additional securities.
Their interest in such matters may differ from other shareholders and may also make it more difficult for another party to acquire or control the Company with their votes. Provisions of the Company’s declaration of trust may limit the ability of a third-party to acquire control of the Company by authorizing the Company’s board of trustees to issue additional securities.
If we conclude that certain properties purchased in bulk portfolios do not fit our target investment criteria, we may decide to sell, rather than renovate and rent, these properties, which could take an extended period of time and may not result in a sale at an attractive price.
If we conclude that certain properties purchased in bulk portfolios do not fit our target investment criteria, we may decide to sell, rather than renovate and rent, these properties, which could take an extended 9 period of time and may not result in a sale at an attractive price.
Members of the Company’s senior management, trustees and their affiliates collectively hold significant amounts of the Company’s Class A common shares, entitled to one vote each, and Class B common shares, entitled to 50 votes each and which convert into Class A common shares on a one for one basis for every 49 partnership units converted, and Class A units in the Operating Partnership, which are nonvoting.
Members of the Company’s senior management, trustees and their affiliates collectively hold significant amounts of the Company’s Class A common shares, entitled to one vote each, and Class B common shares, entitled to 50 votes each and which convert into Class 15 A common shares on a one for one basis for every 49 partnership units converted, and Class A units in the Operating Partnership, which are nonvoting.
If we issue preferred shares in a reopening at a price that exceeds the redemption price of such preferred shares by more than a de minimis amount, those shares could be considered to be “fast-pay stock” under Treasury Regulations promulgated under Section 7701(l) of the Code (the “Fast-Pay Stock Regulations”).
If we issue preferred shares in a reopening at a price that exceeds the redemption price of such preferred shares by more than a de minimis amount, those shares could be considered to be “fast- 19 pay stock” under Treasury Regulations promulgated under Section 7701(l) of the Code (the “Fast-Pay Stock Regulations”).
In addition, in order to avoid the prohibited transactions 17 tax, we may be required to limit the structures we utilize for our securitization transactions, even though the sales or structures might otherwise be beneficial to us. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
In addition, in order to avoid the prohibited transactions tax, we may be required to limit the structures we utilize for our securitization transactions, even though the sales or structures might otherwise be beneficial to us. Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
We have been and will in the future be subject to third party attempts to gain unauthorized access to our systems in order to disrupt operations, corrupt data or steal confidential information, including information regarding our residents, prospective tenants, and employees.
We have been and we expect we will in the future be subject to third party attempts to gain unauthorized access to our systems in order to disrupt operations, corrupt data or steal confidential information, including information regarding our residents, prospective tenants, and employees.
Similarly, given our geographic concentrations, a natural disaster, such as an earthquake, tornado, hurricane, flood or wildfire in one of our key markets could have a significant negative effect on our financial condition and results of operations.
Similarly, given our 8 geographic concentrations, a natural disaster, such as an earthquake, tornado, hurricane, flood or wildfire in one of our key markets could have a significant negative effect on our financial condition and results of operations.
If we violate covenants in our financing arrangements, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms or at all.
If we violate covenants in our financing arrangements, we could be 13 required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms or at all.
These restrictions on ownership and transfer will not apply, however, if the Company’s board of trustees determines that it is no longer in our best interest to continue to qualify as a REIT.
These restrictions on ownership and transfer will not apply, however, if the Company’s board of trustees determines that it is no longer in our best interest to continue to qualify as 18 a REIT.
Joint venture partners may have economic or other business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives.
Joint venture partners may have economic or other business interests or goals that are inconsistent with our 12 business interests or goals and may be in a position to take actions contrary to our policies or objectives.
We may acquire properties that we plan to renovate extensively. We also 8 may acquire properties that we expect to be in good condition only to discover unforeseen defects that require extensive renovation and capital expenditures.
We may acquire properties that we plan to renovate extensively. We also may acquire properties that we expect to be in good condition only to discover unforeseen defects that require extensive renovation and capital expenditures.
In addition, our strategy is to concentrate our properties in select geographic markets that we believe favor future growth in rents and valuations. For example, 58.7% of our properties are located in Atlanta, GA, Dallas-Fort Worth, TX, Charlotte, NC, Phoenix, AZ, Nashville, TN, Indianapolis, IN, Houston, TX, Jacksonville, FL, Tampa, FL and Raleigh, NC.
In addition, our strategy is to concentrate our properties in select geographic markets that we believe favor future growth in rents and valuations. For example, 58.4% of our properties are located in Atlanta, GA, Dallas-Fort Worth, TX, Charlotte, NC, Phoenix, AZ, Nashville, TN, Jacksonville, FL, Indianapolis, IN, Tampa, FL, Houston, TX and Raleigh, NC.
Inflation has significantly increased since the start of 2021 and continues to remain at elevated levels compared to recent years. Inflationary pressures have increased our direct and indirect operating and development costs, including for labor at the corporate, property management and development levels, third-party contractors and vendors, building materials, insurance, transportation and taxes.
Inflation has significantly increased since the start of 2021 and continues to remain at elevated levels compared to years prior to 2021. Inflationary pressures have increased our direct and indirect operating and development costs, including for labor at the corporate, property management and development levels, third-party contractors and vendors, building materials, insurance, transportation and taxes.
We and certain of our advisors could decide to file disclosure statements with the IRS on a protective basis to avoid the risk of penalties, even if it is uncertain that our preferred shares are in fact Fast-Pay Stock or that such advisor is a “material advisor.” Prospective shareholders should consult their own tax advisors as to the application of these rules to their individual circumstances. 20 ITEM 1B.
We and certain of our advisors could decide to file disclosure statements with the IRS on a protective basis to avoid the risk of penalties, even if it is uncertain that our preferred shares are in fact Fast-Pay Stock or that such advisor is a “material advisor.” Prospective shareholders should consult their own tax advisors as to the application of these rules to their individual circumstances.
If our confidential information is compromised or corrupted, including as a result of a cybersecurity breach, our business operations and reputation could be damaged, which could adversely affect our financial condition and operating results.
If our confidential information is compromised or corrupted, including as a result of a cybersecurity incident, our business operations and reputation could be damaged, which could adversely affect our financial condition and operating results.
The Hughes Family and affiliates own all of the Class B common shares and, together with the Class A common shares they own, hold 19.9% of the voting power of the Company.
The Hughes Family and affiliates own all of the Class B common shares and, together with the Class A common shares they own, hold 19.3% of the voting power of the Company.
If we incur a casualty loss that is not fully covered by insurance, the value of our assets will be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenues in these properties and could potentially remain obligated under any recourse debt associated with the property.
If we incur a casualty loss that is not fully covered by third-party insurance, the value of our assets will be reduced by the amount of any such uninsured or self-insured loss, and we could experience a significant loss of capital invested and potential revenues in these properties and could potentially remain obligated under any recourse debt associated with the property.
Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
Any such cybersecurity incident could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
We routinely retain independent contractors and trade professionals to perform repair work and are exposed to all risks inherent in property renovation and maintenance, including potential cost overruns, increases in labor and materials costs, delays by contractors, delays in receiving work permits, certificates of occupancy and poor workmanship.
We routinely retain independent contractors and trade professionals to perform repair work and are exposed to all risks inherent in property renovation and maintenance, including potential cost overruns, increases in labor and materials costs, delays by contractors, delays in receiving work permits, certificates of occupancy and poor workmanship. Supply chain issues and labor force issues have increased these risks.
In addition, changes in the cost or availability of insurance could expose us to uninsured casualty losses.
In addition, changes in the cost or availability of insurance could expose us to greater uninsured or self-insured casualty losses.
In addition, for taxable years beginning after December 31, 2017, taxpayers, including TRS, are subject to a limitation on their ability to deduct net business interest generally equal to 30% of adjusted taxable income, subject to certain exceptions. This provision may limit the ability of our TRS to deduct interest, which could increase its taxable income.
In addition, taxpayers, including TRS, are subject to a limitation on their ability to deduct net business interest generally equal to 30% of adjusted taxable income, subject to certain exceptions. This provision may limit the ability of our TRS to deduct interest, which could increase its taxable income.
In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future. 10 Contingent or unknown liabilities could adversely affect our financial condition, cash flows and operating results.
Any such losses could adversely affect our financial condition, operating results, cash flows and ability to make distributions. In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future.
All members of the Company’s senior management, trustees and their affiliates collectively hold Class A common shares or Class B common shares that represent approximately 20.1% of the current voting power of the Company as of December 31, 2022.
All members of the Company’s senior management, trustees and their affiliates collectively hold Class A common shares or Class B common shares that represent approximately 19.5% of the current voting power of the Company as of December 31, 2023.
Assuming the conversion of all of the Class A units held by these individuals into Class A common shares, they would own approximately 29.4% of the voting power of the Company based on the Company’s outstanding common shares as of December 31, 2022.
Assuming the conversion of all of the Class A units held by these individuals into Class A common shares, they would own approximately 28.6% of the voting power of the Company based on the Company’s outstanding common shares as of December 31, 2023.
Any of these taxes would decrease cash available for distribution to our shareholders.
Any of these taxes or interest charges would decrease cash available for distribution to our shareholders.
A pandemic, such as the ongoing COVID-19 pandemic, and emergence of new variants could negatively impact the global economy, disrupt financial markets and international trade, and result in varying unemployment levels, all of which could negatively impact our business, results of operations, cash flows, and financial condition.
A pandemic, such as the COVID-19 pandemic, or similar public health emergencies could negatively impact the global economy, disrupt financial markets and international trade, and result in varying unemployment levels, all of which could negatively impact our business, results of operations, cash flows, and financial condition.
We rely on our key management and staff to carry out our business and to execute on our strategic plan. We face intense competition for retaining and hiring skilled employees, particularly with respect to our development activities.
The loss of key management and staff could materially and adversely affect us. We rely on our key management and staff to carry out our business and to execute on our strategic plan. We face intense competition for retaining and hiring skilled employees, particularly with respect to our development activities.
We also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches. However, there can be no assurance that these measures will prevent a cyber incident or that our cyber risk insurance coverage will be sufficient in the event of a cyber-attack.
“Cybersecurity” in this report for more information about our cybersecurity risk management and governance) and also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches, there can be no assurance that these measures will prevent a cybersecurity incident or that our cyber risk insurance coverage will be sufficient in the event of a cyber-attack.
Our success depends on us attracting and retaining quality tenants. We depend on rental income for substantially all of our revenues, and to succeed we must attract and retain qualified tenants.
We depend on rental income for substantially all of our revenues, and to succeed we must attract and retain qualified tenants.
Should suitable lots or land become less available, the number of homes we could build and lease could be reduced, and the cost of land could increase, perhaps substantially, which could adversely impact our growth and results of operations.
Should suitable lots or land become less available in our target markets, the number of homes we could build and lease could be reduced or we may need to expand to potentially less desirable areas, and the cost of land could increase, perhaps substantially, which could adversely impact our growth and results of operations.
Furthermore, rent control laws or other regulations that may limit our ability to increase rental rates may affect our rental income. If rent controls unexpectedly became applicable to certain of our properties, our revenue from and the value of such properties could be adversely affected.
Furthermore, rent control laws or other regulations that may limit our ability to increase rental rates may affect our rental income. If rent controls unexpectedly became 14 applicable to certain of our properties, our revenue from and the value of such properties could be adversely affected. We believe these types of measures will continue given increasing political support.
We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, ransomware and other forms of malware, computer viruses, attachment to emails, phishing attempts or other scams. These attacks may also originate from persons inside our organization and persons/vendors with access to our systems.
We face cybersecurity threats, including system, network or Internet failures, cyber-attacks, ransomware and other forms of malware, computer viruses, attachment to emails, phishing attempts or other scams. These attacks may also originate from persons inside our organization and persons/vendors with access to our systems.
We also compete with private home buyers and small-scale investors. Several REITs and other funds have deployed, and others may in the future deploy, significant amounts of capital to purchase single-family homes and may have investment objectives that compete with ours, including in our target markets.
Several REITs and other funds have deployed, and others may in the future deploy, significant amounts of capital to purchase single-family homes and may have investment objectives that compete with ours, including in our target markets. This activity has adversely impacted our level of purchases in certain of our target markets.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures and thus it is impossible for us to entirely mitigate this risk.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures and thus it is impossible for us to entirely mitigate this risk. Although we have implemented a variety of security measures intended to protect the confidentiality and security of this information (refer to Item 1C.
For any transactions that are not sales, but that affect any of our shares that are not Fast-Pay Stock, the parties to the transaction must make appropriate adjustments to properly take into account the Fast-Pay Stock arrangement. 19 While the character of the deemed payments and deemed financing instruments (for example, stock or debt) described above are determined under general U.S. federal income tax principles and depend on all the facts and circumstances, there is a lack of meaningful guidance regarding the consequences to us, the FP Shareholders and NFP Shareholders of the payments deemed made and received.
While the character of the deemed payments and deemed financing instruments (for example, stock or debt) described above are determined under general U.S. federal income tax principles and depend on all the facts and circumstances, there is a lack of meaningful guidance regarding the consequences to us, the FP Shareholders and NFP Shareholders of the payments deemed made and received.
This activity has adversely impacted our level of purchases in certain of our target markets. As more well-capitalized companies pursue our business strategy, we expect competition will continue to intensify. As a result, the purchase price of potential acquisitions may be significantly elevated, or we may be unable to acquire properties on desirable terms or at all.
As more well-capitalized companies pursue our business strategy, we expect competition will continue to intensify. As a result, the purchase price of potential acquisitions may be significantly elevated, or we may be unable to acquire properties on desirable terms or at all. Our success depends on us attracting and retaining quality tenants.
We may acquire properties that are subject to contingent or unknown liabilities for which we may have limited or no recourse against the sellers.
Contingent or unknown liabilities could adversely affect our financial condition, cash flows and operating results. We may acquire properties that are subject to contingent or unknown liabilities for which we may have limited or no recourse against the sellers.
Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property.
Risks Related to the Real Estate Industry Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results. Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property.
Our residents may also be adversely impacted by higher cost of living expenses, including food, energy and transportation, which may increase our rate of tenant defaults and harm our operating results. The loss of key management and staff could materially and adversely affect us.
Our residents may also be adversely impacted by higher cost of living expenses, including food, energy and transportation, which may increase our rate of tenant defaults and harm our operating results. Significant increases in property taxes could adversely affect our operating results. Property taxes are a significant component of our property operating expenses.
We face significant competition for acquisitions of our target properties, which may limit our strategic opportunities and increase the cost to acquire those properties. We face significant competition for acquisition opportunities in our target markets from other large real estate investors, including developers, some of which may have greater financial resources and a lower cost of capital than we do.
We face significant competition for acquisition opportunities in our target markets from other large real estate investors, including developers and private equity firms, some of which may have greater financial resources and a lower cost of capital than we do. We also compete with private home buyers and small-scale investors.
Pandemic outbreaks could lead (and the current outbreak of COVID-19 has led) governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to mitigate its spread, including restrictions on freedom of movement and business operations such as issuing guidelines, travel bans, border closings, business closures, quarantine orders, and orders not allowing the collection of rents, rent increases, or eviction of non-paying tenants. 13 Risks Related to the Real Estate Industry Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results.
These types of events could lead governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to mitigate the issue, including restrictions on freedom of movement and business operations such as issuing guidelines, travel bans, border closings, business closures, quarantine orders, and orders not allowing the collection of rents, rent increases, or eviction of non-paying tenants.
In addition, pursuant to a provision in the Company’s bylaws, we have opted out of the MGCL’s control share provisions of the MGCL. However, the Company’s board of trustees may by resolution opt into the business combination provisions and we may, by amending the Company’s bylaws, opt into the control share provisions of the MGCL in the future.
In addition, pursuant to a provision in the Company’s bylaws, we have opted out of the MGCL’s control share provisions of the MGCL.
In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under the Code, and we could, in certain circumstances, be required to pay an excise or penalty tax (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT.
In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our shareholders in a calendar year is less than a minimum amount specified under the Code.
These increases have significantly increased our cost of new debt or preferred capital, increased the borrowing costs under our credit facility, and have adversely impacted the relative attractiveness of the dividend yield on our common shares.
Since 2022, interest rates have been at relatively high levels compared to recent years. This has increased our cost of new debt or preferred capital, increased the borrowing costs under our credit facility, and has impacted the relative attractiveness of the dividend yield on our common shares.
Risks Related to Qualification and Operation as a REIT Failure to qualify as a REIT, or failure to remain qualified as a REIT, would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distribution to our shareholders.
However, the Company’s board of trustees may by resolution opt into the business combination provisions and we may, by amending the Company’s bylaws, opt into the control share provisions of the MGCL in the future. 16 Risks Related to Qualification and Operation as a REIT Failure to qualify as a REIT, or failure to remain qualified as a REIT, would cause us to be taxed as a regular corporation, which would substantially reduce funds available for distribution to our shareholders.
We may be unable to achieve building new rental homes and rental communities that generate acceptable returns and, as a result, our growth and results of operations may be adversely impacted. Our success in expanding our development activities depends in large part on our ability to acquire land that is suitable for residential homebuilding and meets our land investment criteria.
We may be unable to achieve building new rental homes and rental communities that generate acceptable returns and, as a result, our growth and results of operations may be adversely impacted.
A pandemic, including the ongoing COVID-19 pandemic, and measures intended to prevent its spread, could have a material adverse effect on our business, results of operations, cash flows, and financial condition.
Pandemics and other public health emergencies could have a material adverse effect on our business, results of operations, cash flows, and financial condition.
As of December 31, 2022, we have not had any material incidences involving cybersecurity attacks. HOA rules and restrictions subject us to increased costs and restrict our business operations. A significant number of our properties are part of HOAs, which are private entities that regulate the activities of, and levy assessments on properties in, a residential subdivision.
A significant number of our properties are part of HOAs, which are private entities that regulate the activities of, and levy assessments on properties in, a residential subdivision.
Despite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan for our internal information technology systems, our systems and systems maintained by third-party vendors with which we do business are vulnerable to damage from any number of sources.
Notwithstanding our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. 11 Despite protective measures we have taken, our systems and systems maintained by third-party vendors with which we do business are vulnerable to damage from any number of sources.
The current supply chain issues and labor force issues in the U.S. has increased these risks. If our assumptions regarding the costs or timing of renovation and maintenance across our properties prove to be materially inaccurate, our operating results may be adversely affected.
If our assumptions regarding the costs or timing of renovation and maintenance across our properties prove to be materially inaccurate, our operating results may be adversely affected. We face significant competition for acquisitions of our target properties, which may limit our strategic opportunities and increase the cost to acquire those properties.
The secure processing and maintenance of this information is critical to our operations and business strategy. Notwithstanding our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.
The secure processing and maintenance of this information is critical to our operations and business strategy.
There is strong competition among homebuilders for land that is suitable for residential development.
Our success in expanding our development activities depends in large part on our ability to acquire land in our target markets that is suitable for residential homebuilding and meets our land investment criteria. There is strong competition among homebuilders for land that is suitable for residential development.
Removed
Any such losses could adversely affect our financial condition, operating results, cash flows and ability to make distributions.
Added
We have faced and expect to continue to face significant increases in property taxes. If property taxes, over which we have no control, continue to increase at recent rates, and if we are unable to increase rental rates to offset such increased expense, it would adversely affect our operating results, including our net operating income.
Removed
We address potential breaches or disclosure of this confidential personally identifiable information by implementing a variety of security measures intended to protect the confidentiality and security of this information including, among others: (a) engaging 11 reputable, recognized firms to help us design and maintain our information technology and data security stems; (b) conducting periodic testing and verification of information and data security systems, including performing ethical hacks of our systems to discover where any vulnerabilities may exist; and (c) providing periodic employee awareness training around phishing and other scams, malware and other cyber risks.
Added
Our wholly-owned captive insurance company, American Dream Insurance, LLC, provides general liability insurance coverage for losses below the deductible under our third-party liability insurance policy, and we may increase our utilization of our captive insurance company for additional insurance coverage over time.
Removed
In response to high inflation the Federal Reserve significantly increased the benchmark federal funds rate during 2022 and has signaled its intention to continue with additional increases in 2023. These actions have significantly increased interest rates.
Added
If we experience a loss and our captive insurance company is required to pay under its insurance policies, we would ultimately record the loss to the extent of the required payment. Therefore, 10 insurance coverage provided by our captive insurance company should not be considered the equivalent of third-party insurance, but rather as a modified form of self-insurance.
Removed
Since the onset of the COVID-19 pandemic, there have been increases in restrictions and other regulations on evictions and rent increases and we believe these increases will continue given increasing political support for these types of regulations.
Added
Furthermore, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm us.
Added
Although none of the cyber-attacks and incidents we have identified to date has had a material impact on our business or operations, we expect to continue to identify cyber-attacks and cybersecurity incidents on our systems and those of third parties, and we cannot predict the potential impact of future cyber-attacks and cybersecurity incidents on our business.
Added
The occurrence of any substantial future cyber-attacks and cybersecurity incidents could materially impact our business, which could adversely affect our financial condition and operating results. HOA rules and restrictions subject us to increased costs and restrict our business operations.
Added
Finally, we could, in certain circumstances, be required to pay an excise or penalty tax or interest charge (which could be significant in amount) in order to utilize one or more relief provisions under the Code to maintain our qualification as a REIT and to avoid the imposition of an entity-level tax.
Added
If a transaction intended to qualify as a Section 1031 tax-deferred exchange is later determined to be taxable or if we are unable to identify and complete the acquisition of a suitable replacement property to effect such a Section 1031 exchange, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of real properties on a tax-deferred basis.
Added
From time to time we may dispose of real properties in transactions that are intended to qualify as tax-deferred exchanges under Section 1031 of the Code (“Section 1031 Exchanges”). It is possible that the qualification of a transaction as a Section 1031 Exchange could be successfully challenged and determined to be currently taxable.
Added
In such cases, our taxable income would increase as would the amount of distributions we are required to make to satisfy our REIT distribution requirements and to avoid the imposition of an entity-level tax. This could increase the dividend income to our stockholders by reducing any return of capital they receive.
Added
In some circumstances, we may be required to pay additional dividends or, in lieu of that, corporate income tax, possibly including interest and penalties. As a result, we may be required to borrow in order to pay additional dividends or taxes, and the payment of such taxes could cause us to have less cash available to distribute to our shareholders.
Added
If a Section 1031 Exchange were later to be determined to be taxable, we may be required to amend our tax returns for the applicable year in question, including any reports we distributed to our shareholders.
Added
It is possible that legislation could be enacted that could modify or repeal the laws with respect to Section 1031 Exchanges, which could make it more difficult or not possible for us to dispose of real properties on a tax-deferred basis.
Added
For any transactions that are not sales, but that affect any of our shares that are not Fast-Pay Stock, the parties to the transaction must make appropriate adjustments to properly take into account the Fast-Pay Stock arrangement.

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES The following table summarizes certain key single-family properties metrics as of December 31, 2022: Market Number of Single-Family Properties (1) % of Total Single-Family Properties Gross Book Value (millions) % of Gross Book Value Total Avg. Gross Book Value per Property Avg. Sq. Ft. Avg. Property Age (years) Avg.
ITEM 2. PROPERTIES The following table summarizes certain key single-family properties metrics as of December 31, 2023: Market Number of Single-Family Properties (1) % of Total Single-Family Properties Gross Book Value (millions) % of Gross Book Value Total Avg. Gross Book Value per Property Avg. Sq. Ft. Avg. Property Age (years) Avg.
We also lease commercial office space in Calabasas, California, where certain corporate functions are located, as well as an additional 27 locations in 16 states for other operational and development personnel.
We also lease commercial office space in Calabasas, California, where certain corporate functions are located, as well as an additional 26 locations in 16 states for other operational and development personnel.
Year Purchased or Delivered Atlanta, GA 5,805 10.0 % $ 1,256.1 10.2 % $ 216,381 2,167 17.1 2016 Dallas-Fort Worth, TX 4,224 7.3 % 735.7 6.0 % 174,165 2,108 18.5 2014 Charlotte, NC 3,962 6.8 % 837.2 6.8 % 211,311 2,105 17.5 2015 Phoenix, AZ 3,405 5.9 % 711.9 5.8 % 209,085 1,838 18.6 2015 Nashville, TN 3,238 5.6 % 775.8 6.3 % 239,592 2,110 15.7 2016 Indianapolis, IN 2,910 5.0 % 499.4 4.1 % 171,612 1,930 19.9 2014 Houston, TX 2,642 4.6 % 465.1 3.8 % 176,023 2,095 17.0 2014 Jacksonville, FL 2,891 5.0 % 602.9 4.9 % 208,527 1,931 14.5 2016 Tampa, FL 2,729 4.7 % 602.7 4.9 % 220,833 1,939 15.5 2016 Raleigh, NC 2,177 3.8 % 429.2 3.5 % 197,136 1,889 16.9 2015 Columbus, OH 2,110 3.6 % 397.3 3.2 % 188,290 1,869 20.6 2015 Cincinnati, OH 2,131 3.7 % 414.1 3.4 % 194,337 1,844 20.0 2014 Orlando, FL 1,867 3.2 % 379.1 3.1 % 203,033 1,897 19.3 2015 Salt Lake City, UT 1,908 3.3 % 575.9 4.7 % 301,837 2,242 16.3 2016 Greater Chicago area, IL and IN 1,611 2.8 % 304.3 2.5 % 188,859 1,869 21.3 2013 Las Vegas, NV 1,854 3.2 % 493.2 4.0 % 266,016 1,908 13.0 2016 Charleston, SC 1,524 2.6 % 345.7 2.8 % 226,808 1,963 12.1 2017 San Antonio, TX 1,325 2.3 % 258.1 2.1 % 194,760 1,933 14.2 2015 Seattle, WA 1,141 2.0 % 369.9 3.0 % 324,227 1,996 13.0 2017 Savannah/Hilton Head, SC 1,042 1.8 % 216.6 1.8 % 207,830 1,889 14.2 2016 All Other (2) 7,382 12.8 % 1,654.9 13.1 % 224,184 1,902 17.1 2015 Total/Average 57,878 100.0 % $ 12,325.1 100.0 % $ 212,950 1,989 17.1 2015 (1) Excludes 1,115 single-family properties held for sale as of December 31, 2022.
Year Purchased or Delivered Atlanta, GA 5,853 10.0 % $ 1,311.0 10.2 % $ 223,985 2,174 17.3 2016 Dallas-Fort Worth, TX 4,055 6.9 % 711.5 5.5 % 175,469 2,095 19.5 2014 Charlotte, NC 4,089 7.0 % 899.9 7.0 % 220,086 2,110 17.7 2015 Phoenix, AZ 3,364 5.8 % 718.5 5.6 % 213,588 1,841 19.2 2016 Nashville, TN 3,319 5.7 % 823.0 6.4 % 247,960 2,117 16.1 2016 Jacksonville, FL 3,101 5.3 % 676.1 5.2 % 218,020 1,928 14.4 2016 Indianapolis, IN 2,848 4.9 % 495.1 3.8 % 173,841 1,927 20.9 2014 Tampa, FL 2,901 5.0 % 673.6 5.2 % 232,187 1,948 15.2 2016 Houston, TX 2,402 4.1 % 427.5 3.3 % 177,995 2,082 18.1 2014 Raleigh, NC 2,179 3.7 % 434.3 3.4 % 199,320 1,889 17.7 2015 Cincinnati, OH 2,127 3.6 % 418.9 3.3 % 196,952 1,842 21.0 2014 Columbus, OH 2,154 3.7 % 421.5 3.3 % 195,675 1,880 21.0 2015 Las Vegas, NV 2,169 3.7 % 618.8 4.8 % 285,270 1,937 11.7 2017 Salt Lake City, UT 1,901 3.3 % 579.1 4.5 % 304,605 2,245 17.2 2016 Orlando, FL 1,999 3.4 % 437.6 3.4 % 218,923 1,911 18.3 2016 Greater Chicago area, IL and IN 1,541 2.6 % 294.5 2.3 % 191,105 1,865 22.3 2013 Charleston, SC 1,535 2.6 % 352.2 2.7 % 229,471 1,962 13.0 2017 San Antonio, TX 1,263 2.2 % 249.2 1.9 % 197,277 1,919 14.9 2015 Seattle, WA 1,161 2.0 % 383.8 3.0 % 330,534 2,006 13.6 2017 Savannah/Hilton Head, SC 1,051 1.8 % 222.0 1.7 % 211,204 1,887 15.2 2016 All Other (2) 7,458 12.7 % 1,737.6 13.5 % 232,983 1,912 17.8 2015 Total/Average 58,470 100.0 % $ 12,885.7 100.0 % $ 220,381 1,992 17.5 2015 (1) Excludes 862 single-family properties held for sale as of December 31, 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS For a description of the Company’s legal proceedings, see “Note 14. Commitments and Contingencies” to our consolidated financial statements included as a separate section in Part IV, “Item 15. Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 21 PART II
ITEM 3. LEGAL PROCEEDINGS For a description of the Company’s legal proceedings, see “Note 14. Commitments and Contingencies” to our consolidated financial statements included as a separate section in Part IV, “Item 15. Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+1 added−1 removed7 unchanged
The graph assumes the investment of $100 in our Class A common shares and each of the indices on December 31, 2017, and the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance. Comparison of Cumulative Total Return Among AMH, the S&P 500 Index and the MSCI U.S.
The graph assumes the investment of $100 in our Class A common shares and each of the indices on December 31, 2018, and the reinvestment of all dividends. The return shown on the graph is not necessarily indicative of future performance. Comparison of Cumulative Total Return Among AMH, the S&P 500 Index and the MSCI U.S.
IRC Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” The “One Year Amounts” and “Three Year Amounts” required to be disclosed are both zero with respect to the 2022 and 2021 distributions, since all capital gain distributions relate to IRC Section 1231 gains.
IRC Section 1061 is generally applicable to direct and indirect holders of “applicable partnership interests.” The “One Year Amounts” and “Three Year Amounts” required to be disclosed are both zero with respect to the 2023 and 2022 distributions, since all capital gain distributions relate to IRC Section 1231 gains.
Shareholders / Unitholders As of the close of business on February 22, 2023, there were 26 holders of record of the Company’s Class A common shares (excludes beneficial owners whose shares are held in street name by brokers and other nominees), one shareholder of record of the Company’s Class B common shares and 11 holders of record of the Operating Partnership’s Class A units (including AMH’s general partnership interest).
Shareholders / Unitholders As of the close of business on February 21, 2024, there were 26 holders of record of the Company’s Class A common shares (excludes beneficial owners whose shares are held in street name by brokers and other nominees), one shareholder of record of the Company’s Class B common shares and 11 holders of record of the Operating Partnership’s Class A units (including AMH’s general partnership interest).
Future distributions on our Class A and Class B common shares will be determined by and at the sole discretion of the Company’s board of trustees and will be based on a variety of factors, which may include among others: our actual and projected results of operations; our liquidity, cash flows and financial condition; revenue from our properties; our operating expenses; economic conditions; debt service requirements; limitations under our financing arrangements; applicable law; capital requirements; the REIT requirements of the Code; utilization of AMH’s net operating loss (“NOL”) carryforwards; and such other factors as the Company’s board of trustees deems relevant.
Future distributions on our Class A and Class B common shares will be determined by and at the sole discretion of the Company’s board of trustees and will be based on a variety of factors, which may include among others: our actual and projected results of operations; our liquidity, cash flows and financial condition; revenue from our properties; our operating expenses; economic conditions; debt service requirements; limitations under our financing arrangements; applicable law; capital requirements; the REIT requirements of the Code; and such other factors as the Company’s board of trustees deems relevant.
The following graph compares the cumulative total return on our Class A common shares from December 31, 2017 to the NYSE closing price per share on December 31, 2022, with the cumulative total returns on the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500”) and the MSCI U.S. REIT Index.
The following graph compares the cumulative total return on our Class A common shares from December 31, 2018 to the NYSE closing price per share on December 31, 2023, with the cumulative total returns on the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500”) and the MSCI U.S. REIT Index.
Distributions The Company’s board of trustees declared total distributions of $0.72 and $0.40 per Class A and Class B common share during the years ended December 31, 2022 and 2021, respectively. The Operating Partnership funds the payment of distributions, and an equivalent amount of distributions were declared on the corresponding Operating Partnership units.
Distributions The Company’s board of trustees declared total distributions of $0.88 and $0.72 per Class A and Class B common share during the years ended December 31, 2023 and 2022, respectively. The Operating Partnership funds the payment of distributions, and an equivalent amount of distributions were declared on the corresponding Operating Partnership units.
AMH intends to use its NOL (to the extent available) to reduce AMH’s REIT taxable income and to pay quarterly distributions to our shareholders, and the Operating Partnership intends to pay quarterly distributions to the Operating Partnership’s unitholders, including AMH, which distributions, in the aggregate, approximately equal or exceed AMH’s net taxable income in the relevant year.
AMH intends to pay quarterly distributions to its shareholders, and the Operating Partnership intends to pay quarterly distributions to the Operating Partnership’s unitholders, including AMH, which distributions, in the aggregate, approximately equal or exceed AMH’s net taxable income in the relevant year.
On February 22, 2023, the last reported sales price per share of our Class A common shares was $32.86. The Company’s Class B common shares and the Operating Partnership’s Class A units are not publicly traded.
On February 21, 2024, the last reported sales price per share of our Class A common shares was $34.73. The Company’s Class B common shares and the Operating Partnership’s Class A units are not publicly traded.
The following table displays the estimated income tax treatment of distributions on our Class A and Class B common shares and Series D, Series E, Series F, Series G and Series H perpetual preferred shares for the years ended December 31, 2022 and 2021: 2022 2021 Ordinary dividend income (1) Qualified dividend income Capital gains (2)(3)(4) Total Ordinary dividend income (1) Qualified dividend income Capital gains (2)(3)(4) Total Common Shares 52.6 % — % 47.4 % 100.0 % 73.1 % 0.7 % 26.2 % 100.0 % Perpetual Preferred Shares: Series D — % — % — % — % 73.1 % 0.7 % 26.2 % 100.0 % Series E — % — % — % — % 73.1 % 0.7 % 26.2 % 100.0 % Series F 52.6 % — % 47.4 % 100.0 % 73.1 % 0.7 % 26.2 % 100.0 % Series G 52.6 % — % 47.4 % 100.0 % 73.1 % 0.7 % 26.2 % 100.0 % Series H 52.6 % — % 47.4 % 100.0 % 73.1 % 0.7 % 26.2 % 100.0 % (1) 100.0% of the ordinary dividend income is treated as Internal Revenue Code (“IRC”) Section 199A qualified REIT dividend income.
The following table displays the estimated income tax treatment of our quarterly distributions on our Class A and Class B common shares and Series F, Series G and Series H perpetual preferred shares for the years ended December 31, 2023 and 2022: 2023 2022 Classification 3/31/2023 6/30/2023 9/29/2023 12/29/2023 3/31/2022 6/30/2022 (5) 9/30/2022 12/30/2022 Ordinary Dividend Income (1) 76.3 % 25.4 % 25.4 % 25.4 % 52.6 % 52.6 % 52.6 % 52.6 % Capital Gain Distributions (2)(3)(4) 23.7 % 74.6 % 74.6 % 74.6 % 47.4 % 47.4 % 47.4 % 47.4 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % (1) 100.0% of the ordinary dividend income is treated as Internal Revenue Code (“IRC”) Section 199A qualified REIT dividend income.
(4) 100.0% of the capital gain distributions represent gain from dispositions of U.S. real property interests pursuant to IRC Section 897 for foreign shareholders. 22 Stock Performance Graph This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be incorporated by reference into any filing by us under the Securities Act except as expressly set forth in such filing.
(5) The 5.875% Series F perpetual preferred shares were redeemed on May 5, 2022. 24 Stock Performance Graph This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be incorporated by reference into any filing by us under the Securities Act except as expressly set forth in such filing.
Shareholders should consult with their tax advisors to determine whether IRC Section 1061 applies to their capital gain distributions.
Shareholders should consult with their tax advisors to determine whether IRC Section 1061 applies to their capital gain distributions. (4) 100.0% of the capital gain distributions represent gain from dispositions of U.S. real property interests pursuant to IRC Section 897 for foreign shareholders.
REIT Index The following table provides the same information in tabular form: 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 AMH $ 100.00 $ 91.77 $ 122.16 $ 140.83 $ 206.89 $ 145.98 S&P 500 $ 100.00 $ 95.61 $ 125.70 $ 148.81 $ 191.48 $ 156.77 MSCI U.S.
REIT Index The following table provides the same information in tabular form: 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 AMH $ 100.00 $ 133.12 $ 153.46 $ 225.44 $ 159.07 $ 194.71 S&P 500 $ 100.00 $ 131.47 $ 155.65 $ 200.28 $ 163.98 $ 207.04 MSCI U.S.
Removed
REIT $ 100.00 $ 95.49 $ 120.21 $ 111.18 $ 159.08 $ 120.09 ITEM 6. [RESERVED] 23
Added
REIT $ 100.00 $ 125.89 $ 116.43 $ 166.59 $ 125.76 $ 143.04 ITEM 6. [RESERVED] 25

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+4 added−23 removed77 unchanged
As a portion of our homes are recently developed, acquired and/or renovated, we estimate Recurring Capital Expenditures for our entire portfolio by multiplying (a) current period actual Recurring Capital Expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.
As a portion of our homes are recently developed, acquired and/or renovated, we estimate Recurring Capital Expenditures for our entire portfolio by multiplying (a) current period actual Recurring Capital Expenditures per Same-Home Property by (b) our total number of properties, excluding newly acquired non-stabilized properties and properties classified as held for sale.
Additional Non-GAAP Measures Funds from Operations (“FFO”) / Core FFO / Adjusted FFO attributable to common share and unit holders FFO attributable to common share and unit holders is a non-GAAP financial measure that we calculate in accordance with the definition approved by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income or loss calculated in accordance with GAAP, excluding gains and losses from sales or impairment of real estate, plus real estate-related 37 depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.
Additional Non-GAAP Measures Funds from Operations (“FFO”) / Core FFO / Adjusted FFO attributable to common share and unit holders FFO attributable to common share and unit holders is a non-GAAP financial measure that we calculate in accordance with the definition approved by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income or loss calculated in accordance with GAAP, excluding gains and losses from sales or impairment of real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.
Typically, our incoming residents have household incomes ranging from $80,000 to $140,000 and primarily consist of families with approximately two adults and one or more children. Our rents and other single-family property revenues are comprised of rental revenue from single-family properties, fees from our single-family property rentals and “tenant charge-backs,” which are primarily related to cost recoveries on utilities.
Typically, our incoming residents have household incomes ranging from $80,000 to $140,000 and primarily consist of families with approximately two adults and one or more children. 28 Our rents and other single-family property revenues are comprised of rental revenue from single-family properties, fees from our single-family property rentals and “tenant charge-backs,” which are primarily related to cost recoveries on utilities.
For our acquisition and development expenditures, we expect to supplement these sources through the issuance of equity securities, including under our At-the-Market Program described below, borrowings under our credit facility, issuances of unsecured senior notes and proceeds from sales of single-family properties. However, our real estate assets are illiquid in nature.
For our acquisition and development expenditures, we expect to supplement these sources through the issuance of equity securities, including under our 2023 At-the-Market Program described below, borrowings under our credit facility, issuances of unsecured senior notes and proceeds from sales of single-family properties. However, our real estate assets are illiquid in nature.
See Note 9. Shareholders’ Equity / Partners’ Capital to our consolidated financial statements included as a separate section in Part IV, “Item 15. Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K. 38 EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
See Note 9. Shareholders’ Equity / Partners’ Capital to our consolidated financial statements included as a separate section in Part IV, “Item 15. Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K. EBITDA / EBITDAre / Adjusted EBITDAre / Fully Adjusted EBITDAre EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
Our rental rates and occupancy levels are affected by macroeconomic factors and local and property-level factors, including market conditions, seasonality and tenant defaults, and the amount of time it takes to turn properties when tenants vacate. Additionally, our ability to collect revenues and related operating results are impacted by the credit worthiness and 26 quality of our tenants.
Our rental rates and occupancy levels are affected by macroeconomic factors and local and property-level factors, including market conditions, seasonality and tenant defaults, and the amount of time it takes to turn properties when tenants vacate. Additionally, our ability to collect revenues and related operating results are impacted by the credit worthiness and quality of our tenants.
Class A Common Share Offerings During the first quarter of 2022, the Company completed an underwritten public offering for 23,000,000 of its Class A common shares of beneficial interest, $0.01 par value per share, of which 10,000,000 shares were issued directly by the Company and 13,000,000 shares were offered on a forward basis at the request of the Company by the forward sellers.
Class A Common Share Offering During the first quarter of 2022, the Company completed an underwritten public offering for 23,000,000 of its Class A common shares of beneficial interest, $0.01 par value per share, of which 10,000,000 shares were issued directly by the Company and 13,000,000 shares were offered on a forward basis at the request of the Company by the forward sellers.
Because cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether an asset has been impaired, our established strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss.
Because cash flows on properties considered to be long-lived assets to be held and used are considered on an undiscounted basis to determine whether an asset has been impaired, our established strategy of holding properties 34 over the long term directly decreases the likelihood of recording an impairment loss.
FFO, Core FFO and Adjusted FFO attributable to common share and unit holders are not a substitute for net income or net cash provided by operating activities, each as determined in accordance with GAAP, as a measure of our operating performance, liquidity or ability to pay dividends.
FFO, Core FFO and Adjusted FFO attributable to common share and unit holders are not a substitute for net income or net cash provided by operating activities, each as determined in accordance with GAAP, as a measure of our operating performance, liquidity 39 or ability to pay dividends.
The At-the-Market Program also provides that we may enter into forward contracts for our Class A common shares with forward sellers and forward purchasers.
The 2023 At-the-Market Program also provides that we may enter into forward contracts for our Class A common shares with forward sellers and forward purchasers.
This section of this Form 10-K generally discusses the years ended December 31, 2022 and 2021. A discussion of the year ended December 31, 2020 is available at Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021.
This section of this Form 10-K generally discusses the years ended December 31, 2023 and 2022. A discussion of the year ended December 31, 2021 is available at Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.
(3) For the year ended December 31, 2022, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months.
(3) For the year ended December 31, 2023, Average Monthly Realized Rent is calculated as the lease component of rents and other single-family property revenues (i.e., rents from single-family properties) divided by the product of (a) number of properties and (b) Average Occupied Days Percentage, divided by the number of months.
(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the year ended December 31, 2022, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property. (6) Represents 15 markets in 13 states.
(5) Represents the percentage change in rent on all non-month-to-month lease renewals and re-leases during the year ended December 31, 2023, compared to the annual rent of the previously expired non-month-to-month comparable long-term lease for each property. (6) Represents 15 markets in 13 states.
We are increasingly focused on developing “built-for-rental” homes through our internal AMH Development Program. In addition, we also 25 acquire newly constructed homes from third-party developers through our National Builder Program. Opportunities from these new construction channels are impacted by the availability of vacant developed lots, development land assets and inventory of homes currently under construction or newly developed.
We are also focused on developing “built-for-rental” homes through our internal AMH Development Program. In addition, we also acquire newly 27 constructed homes from third-party developers through our National Builder Program. Opportunities from these new construction channels are impacted by the availability of vacant developed lots, development land assets and inventory of homes currently under construction or newly developed.
Key Single-Family Property and Leasing Metrics The following table summarizes certain key single-family properties metrics as of December 31, 2022: Total Single-Family Properties (1) Market Number of Single-Family Properties % of Total Single-Family Properties Gross Book Value (millions) % of Gross Book Value Total Avg. Gross Book Value per Property Avg. Sq. Ft. Avg. Property Age (years) Avg.
Key Single-Family Property and Leasing Metrics The following table summarizes certain key single-family properties metrics as of December 31, 2023: Total Single-Family Properties (1) Market Number of Single-Family Properties % of Total Single-Family Properties Gross Book Value (millions) % of Gross Book Value Total Avg. Gross Book Value per Property Avg. Sq. Ft. Avg. Property Age (years) Avg.
(2) For the year ended December 31, 2022, Average Occupied Days Percentage represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period after initially being placed in-service.
(2) For the year ended December 31, 2023, Average Occupied Days Percentage represents the number of days a property is occupied in the period divided by the total number of days the property is owned during the same period after initially being placed in-service.
We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest 27 period presented under comparison and if it has not been classified as held for sale, identified for future sale, or experienced a casualty loss, which allows the performance of these properties to be compared between periods.
We classify a property as Same-Home if it has been stabilized longer than 90 days prior to the beginning of the earliest period presented under comparison and if it has not been classified as held for sale or experienced a casualty loss, which allows the performance of these properties to be compared between periods.
Typically, it takes approximately 10 to 30 days to lease a property after acquiring or developing a new property through our new construction channels and 20 to 40 days after completing the renovation process for a traditionally acquired property.
Typically, it takes approximately 10 to 50 days to lease a property after acquiring or developing a new property through our new construction channels and 20 to 40 days after completing the renovation process for a traditionally acquired property.
As of December 31, 2022, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.
As of December 31, 2023, we had a remaining repurchase authorization of up to $265.1 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares under the program.
The Company intends to use any net proceeds from the At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with its business strategy and (iv) for working capital and general corporate purposes, including repurchases of the Company’s securities, acquisitions of additional properties, capital expenditures and the expansion, redevelopment and/or improvement of properties in the Company’s portfolio.
The Company intends to use any net proceeds from the 2023 At-the-Market Program (i) to repay indebtedness the Company has incurred or expects to incur under its revolving credit facility or other debt obligations under its securitizations, (ii) to develop new single-family properties and communities, (iii) to acquire and renovate single-family properties and for related activities in accordance with the Company’s business strategy and (iv) for working capital and general corporate purposes, including repurchases of the Company’s securities, acquisitions of additional properties, capital expenditures and the expansion, redevelopment and/or improvement of properties in the Company’s portfolio.
In connection with this offering, the Company entered into forward sale agreements with the forward purchasers (the “2022 Forward Sale Agreements”) for these 13,000,000 shares which are accounted for in equity.
In connection with this offering, the Company entered into forward sale agreements with the forward purchasers (the “2022 Forward Sale Agreements”) for these 13,000,000 shares which were accounted for in equity.
During the years ended December 31, 2022 and 2021, we did not repurchase and retire any of our Class A common shares or preferred shares.
During the years ended December 31, 2023 and 2022, we did not repurchase and retire any of our Class A common shares or preferred shares.
Acquisition and Other Transaction Costs Acquisition and other transaction costs consist primarily of costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, the development of single-family properties, or the disposal of certain properties or portfolios of properties which do not qualify for capitalization.
Acquisition and Other Transaction Costs Acquisition and other transaction costs consist primarily of personnel and platform costs associated with purchases of single-family properties, including newly constructed properties from third-party builders, or the disposal of certain properties or portfolios of properties which do not qualify for capitalization.
Key factors that impact our results of operations and financial condition include the pace at which we identify and acquire suitable land and properties, the time and cost required to renovate the acquired properties, the pace and cost of our property developments, the time to lease newly acquired or developed properties at acceptable rental rates, occupancy levels, rates of tenant turnover, the length of vacancy in properties between tenant leases, our expense ratios, our ability to raise capital and our capital structure.
Key factors that impact our results of operations and financial condition include the pace at which we identify and acquire suitable land and properties, the time and cost required to renovate the acquired properties, the pace and cost of our property developments, the time to lease newly acquired or developed properties at acceptable rental rates, occupancy levels, rates of tenant turnover, the length of vacancy in properties between tenant leases, our expense ratios, property taxes including changes in rates and valuation assessments of our properties, our ability to raise capital and our capital structure.
(2) Represents 15 markets in 13 states. 24 The following table summarizes certain key leasing metrics as of December 31, 2022: Total Single-Family Properties (1) Market Avg. Occupied Days Percentage (2) Avg. Monthly Realized Rent per property (3) Avg. Original Lease Term (months) (4) Avg. Remaining Lease Term (months) (4) Avg.
(2) Represents 15 markets in 13 states. 26 The following table summarizes certain key leasing metrics as of December 31, 2023: Total Single-Family Properties (1) Market Avg. Occupied Days Percentage (2) Avg. Monthly Realized Rent per property (3) Avg. Original Lease Term (months) (4) Avg. Remaining Lease Term (months) (4) Avg.
The At-the-Market Program may be suspended or terminated by the Company at any time. During the year ended December 31, 2022, no shares were issued under the At-the-Market Program.
The 2023 At-the-Market Program may be suspended or terminated by the Company at any time. During the year ended December 31, 2022, no shares were issued under its previous program.
As of December 31, 2022 and 2021, there were 1,115 and 659 properties, respectively, classified as held for sale. We will continue to evaluate our properties for potential disposition going forward as a normal course of business.
As of December 31, 2023 and 2022, there were 862 and 1,115 properties, respectively, classified as held for sale. We will continue to evaluate our properties for potential disposition going forward as a normal course of business.
The timing of these obligations due within one year may be extended beyond December 31, 2023.
The timing of these obligations due within one year may be extended beyond December 31, 2024.
Also, as of December 31, 2022, the Company had an additional 2,540 properties held in unconsolidated joint ventures, compared to 1,942 properties held in unconsolidated joint ventures as of December 31, 2021. Our portfolio of single-family properties, including those held in our unconsolidated joint ventures, is internally managed through our proprietary property management platform.
Also, as of December 31, 2023, the Company had an additional 2,978 properties held in unconsolidated joint ventures, compared to 2,540 properties held in unconsolidated joint ventures as of December 31, 2022. Our portfolio of single-family properties, including those held in our unconsolidated joint ventures, is internally managed through our proprietary property management platform.
Other Income and Expense, net Other income and expense, net for the years ended December 31, 2022 and 2021 was $6.9 million and $4.0 million, respectively, which primarily related to interest income, fees from unconsolidated joint ventures and equity in income (losses) from unconsolidated joint ventures, partially offset by expenses related to unconsolidated joint ventures and other nonrecurring expenses.
Other Income and Expense, net Other income and expense, net for the years ended December 31, 2023 and 2022 was $9.8 million and $6.9 million, respectively, which primarily related to interest income, fees from unconsolidated joint ventures and equity in income (losses) from unconsolidated joint ventures, partially offset by expenses related to unconsolidated joint ventures and other nonrecurring expenses.
A timely liquidation of assets might not be a viable source of short-term liquidity should a cash flow shortfall arise, and we may need to source liquidity from other financing alternatives including drawing on our revolving credit facility. Our liquidity and capital resources as of December 31, 2022 included cash and cash equivalents of $69.2 million.
A timely liquidation of assets might not be a viable source of short-term liquidity should a cash flow shortfall arise, and we may need to source liquidity from other financing alternatives including drawing on our revolving credit facility. Our liquidity and capital resources as of December 31, 2023 included cash and cash equivalents of $59.4 million.
During the year ended December 31, 2022, we also developed an additional 863 newly constructed properties which were delivered to our unconsolidated joint ventures, aggregating to 2,183 total program deliveries through our AMH Development Program. Our properties held for sale were identified based on submarket analysis, as well as individual property-level operational review.
During the year ended December 31, 2023, we also developed an additional 479 newly constructed homes which were delivered to our unconsolidated joint ventures, aggregating to 2,317 total program deliveries through our AMH Development Program. Our properties held for sale were identified based on submarket analysis, as well as individual property-level operational review.
(2) Represents estimated future interest payments on our debt instruments based on applicable interest rates as of December 31, 2022 and assumes the repayment of the AMH 2015-1 and 2015-2 securitizations on their anticipated repayment dates in 2025.
(2) Represents estimated future interest payments on our debt instruments based on applicable interest rates as of December 31, 2023 and assumes the repayment of the AMH 2015-SFR1 and AMH 2015-SFR2 securitizations on their anticipated repayment dates in 2025.
The fully extended maturity dates for the AMH 2015-1 and 2015-2 securitizations are in 2045 and the interest rates increase on the anticipated repayment dates in 2025. If the AMH 2015-1 and 2015-2 securitizations are not repaid on the anticipated repayment dates in 2025, our interest on debt obligations above would increase.
The fully extended maturity dates for the AMH 2015-SFR1 and AMH 2015-SFR2 securitizations are in 2045 and the interest rates increase on the anticipated repayment dates in 2025. If the AMH 2015-SFR1 and AMH 2015-SF2 securitizations are not repaid on the anticipated repayment dates in 2025, our interest on debt obligations above would increase.
The increase in general and administrative expense was primarily related to an increase in noncash share-based compensation expense, as well as the timing of increased personnel and information technology costs to support growth in our business.
The increase in general and administrative expense was primarily related to increased personnel and information technology costs to support growth in our business as well as other inflationary increases and an increase in noncash share-based compensation expense.
Cash outflows for the addition of single-family properties to our portfolio through these channels decreased $211.2 million during the year ended December 31, 2022 primarily due to a strategic scale back in the acquisition of single-family properties through our National Builder Program and traditional acquisition channel during the second half of the year ended December 31, 2022 as the housing market adjusts to the current macroeconomic environment.
Cash outflows for the addition of single-family properties to our portfolio through these channels decreased $521.9 million during the year ended December 31, 2023 primarily due to a strategic scale back in the acquisition of single-family properties through our National Builder Program and traditional acquisition channel during the year ended December 31, 2023 as the housing market adjusts to the current macroeconomic environment.
For the year ended December 31, 2022, the Company purchased 1,605 single-family properties treated as asset acquisitions for accounting purposes for a total purchase price of $571.8 million, net of holding costs, which was included in cash paid for single-family properties within the consolidated statement of cash flows.
For the year ended December 31, 2023, the Company purchased 47 single-family properties treated as asset acquisitions for accounting purposes for a total purchase price of $12.8 million, net of holding costs, which was included in cash paid for single-family properties within the consolidated statement of cash flows.
Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 8.0% for the year ended December 31, 2022 and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 27.7% and 29.6% during the years ended December 31, 2022 and 2021, respectively.
Based on our Same-Home population of properties (defined below), the year-over-year increase in Average Monthly Realized Rent per property was 7.1% for the year ended December 31, 2023 and we experienced turnover rates, which represents the number of tenant move-outs during the period divided by the total number of properties, of 29.2% and 28.1% during the years ended December 31, 2023 and 2022, respectively.
No significant impairments on operating properties were recorded during the years ended December 31, 2022, 2021 and 2020. 32 Recent Accounting Pronouncements See Note 2. Significant Accounting Policies to our consolidated financial statements included as a separate section in Part IV, “Item 15.
Excluding the effects of casualty losses, no impairments on operating properties were recorded during the years ended December 31, 2023, 2022 and 2021. Recent Accounting Pronouncements See Note 2. Significant Accounting Policies to our consolidated financial statements included as a separate section in Part IV, “Item 15.
With respect to our contractually obligated expenditures, our cash requirements within the next twelve months include accounts payable and accrued expenses, interest payments on debt obligations, principal amortization on our asset-backed securitizations, operating lease obligations and purchase commitments to acquire single-family properties and land for our AMH Development Program. See Note 7. Debt, Note 8.
With respect to our contractually obligated expenditures, our cash requirements within the next twelve months include accounts payable and accrued expenses, interest payments on debt obligations, principal amortization on our asset-backed securitizations, the repayment of our AMH 2014-SFR2 and AMH 2014-SFR3 asset-backed securitizations, operating lease obligations and purchase commitments to acquire single-family properties and land for our AMH Development Program.
General and administrative expense for the years ended December 31, 2022 and 2021 was $68.1 million and $56.4 million, respectively, which included $15.3 million and $9.4 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.
General and administrative expense for the years ended December 31, 2023 and 2022 was $74.6 million and $68.1 million, respectively, which included $16.4 million and $15.3 million, respectively, of noncash share-based compensation expense in each period related to corporate administrative employees.
Homes acquired through our traditional acquisition channel require additional expenditures to prepare them for rental, and cash outflows for renovations to single-family properties increased $50.3 million primarily as a result of an increased volume of properties that underwent initial or property-enhancing renovations during the year ended December 31, 2022.
Homes acquired through our traditional acquisition channel require additional expenditures to prepare them for rental, and cash outflows for renovations to single-family properties decreased $57.9 million primarily as a result of a decreased volume of properties that underwent initial or property-enhancing renovations during the year ended December 31, 2023.
Our investing activities are most significantly impacted by the strategic expansion of our portfolio through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program and the acquisition of newly built properties through our National Builder Program.
Our investing activities are most significantly impacted by the level of investment activity through traditional acquisition channels, the development of “built-for-rental” homes through our AMH Development Program and the acquisition of newly built properties through our National Builder Program.
Additionally, recent supply chain disruptions, inflationary increases in labor and material costs and labor shortages have impacted and may continue to impact certain aspects of our business, including our AMH Development Program, our renovation program associated with recently acquired properties and our maintenance program.
Additionally, further supply chain disruptions, inflationary increases in labor and material costs and labor shortages may have the potential to impact certain aspects of our business, including our AMH Development Program, our renovation program associated with acquired properties and our maintenance program.
Acquisition and other transaction costs for the years ended December 31, 2022 and 2021 were $23.5 million and $15.7 million, respectively, which included $8.1 million and $5.4 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.
Acquisition and other transaction costs for the years ended December 31, 2023 and 2022 were $16.9 million and $23.5 million, respectively, which included $5.0 million and $8.1 million, respectively, of noncash share-based compensation expense in each period related to employees in these functions.
Future interest payments on debt obligations would also be impacted by the level of borrowing on our revolving credit facility in the future. (3) Represents commitments to acquire 52 single-family properties for an aggregate purchase price of $12.3 million and land relating to our AMH Development Program for an aggregate purchase price of $228.9 million.
Future interest payments on debt obligations will also be impacted by the level of borrowing on our revolving credit facility in the future. (3) Represents commitments to acquire 29 single-family properties for an aggregate purchase price of $6.6 million and land relating to our AMH Development Program for an aggregate purchase price of $75.6 million.
During the years ended December 31, 2022 and 2021, the Company distributed an aggregate $306.4 million and $207.3 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.
During the years ended December 31, 2023 and 2022, the Company distributed an aggregate $378.5 million and $306.4 million, respectively, to common shareholders, preferred shareholders and noncontrolling interests on a cash basis.
Listed below are those policies that management believes involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or our results of operations.
Actual results could ultimately differ from these estimates. Listed below are those policies that management believes involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or our results of operations.
This increase was primarily due to additional interest from the issuances of the 2031 and 2051 unsecured senior notes in July 2021 and the 2032 and 2052 unsecured senior notes in April 2022, partially offset by additional capitalized interest during the year ended December 31, 2022 related to an increase in development activities under our AMH Development Program and an increase in properties that underwent renovation during the year ended December 31, 2022.
This increase was primarily due to additional interest from the issuances of the 2032 and 2052 unsecured senior notes in April 2022, partially offset by additional capitalized interest during the year ended December 31, 2023 related to an increase in development activities under our AMH Development Program.
Gain on Sale and Impairment of Single-Family Properties and Other, net Gain on sale and impairment of single-family properties and other, net for the years ended December 31, 2022 and 2021 was $136.5 million and $49.7 million, respectively, which included $2.5 million and $0.2 million, respectively, of impairment charges related to homes classified as held for sale during each period.
Gain on Sale and Impairment of Single-Family Properties and Other, net Gain on sale and impairment of single-family properties and other, net for the years ended December 31, 2023 and 2022 was $209.8 million and $136.5 million, respectively, which included $1.9 million and $2.5 million, respectively, of impairment charges related to homes classified as held for sale during each period.
As of December 31, 2022, 55,605 of our total properties (excluding properties held for sale) were occupied, compared to 53,637 of our total properties (excluding properties held for sale) as of December 31, 2021.
As of December 31, 2023, 55,768 of our total properties (excluding properties held for sale) were occupied, compared to 55,605 of our total properties (excluding properties held for sale) as of December 31, 2022.
As of December 31, 2022, we owned 58,993 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 1,115 properties held for sale, compared to 57,024 single-family properties in 22 states, including 659 properties held for sale, as of December 31, 2021.
As of December 31, 2023, we owned 59,332 single-family properties in select submarkets of metropolitan statistical areas (“MSAs”) in 21 states, including 862 properties held for sale, compared to 58,993 single-family properties in 21 states, including 1,115 properties held for sale, as of December 31, 2022.
During the year ended December 31, 2022, the Company recognized $8.9 million in gross charges 31 primarily related to an estimated accrual for minor repair and remediation costs, partially offset by an estimated $2.8 million of related insurance claims that we believe is probable we will recover.
During the year ended December 31, 2022, the Company recognized $8.9 million in gross charges primarily related to minor repair and remediation costs, partially offset by $2.8 million of related insurance claims.
Properties acquired through a bulk purchase are first considered non-stabilized, as an entire group, until (1) we have owned them for an adequate period of time to allow for complete on-boarding to our operating platform, and (2) a substantial portion of the properties have experienced tenant turnover at least once under our ownership, providing the opportunity for renovations and improvements to meet our property standards.
A property is classified as stabilized once it has been renovated by the Company or newly constructed and then initially leased or available for rent for a period greater than 90 days. 29 Properties acquired through a bulk purchase are first considered non-stabilized, as an entire group, until (1) we have owned them for an adequate period of time to allow for complete on-boarding to our operating platform, and (2) a substantial portion of the properties have experienced tenant turnover at least once under our ownership, providing the opportunity for renovations and improvements to meet our property standards.
The following is a reconciliation of the Company’s net income attributable to common shareholders, determined in accordance with GAAP, to FFO attributable to common share and unit holders, Core FFO attributable to common share and unit holders and Adjusted FFO attributable to common share and unit holders for the years ended December 31, 2022 and 2021 (amounts in thousands): For the Years Ended December 31, 2022 2021 Net income attributable to common shareholders $ 250,781 $ 135,290 Adjustments: Noncontrolling interests in the Operating Partnership 36,887 21,467 Gain on sale and impairment of single-family properties and other, net (136,459) (49,696) Adjustments for unconsolidated joint ventures 344 1,873 Depreciation and amortization 426,531 372,848 Less: depreciation and amortization of non-real estate assets (13,358) (11,151) FFO attributable to common share and unit holders (1) $ 564,726 $ 470,631 Adjustments: Acquisition, other transaction costs and other 23,452 15,749 Noncash share-based compensation - general and administrative 15,318 9,361 Noncash share-based compensation - property management 3,861 3,004 Hurricane-related charges, net 6,133 — Redemption of perpetual preferred shares 5,276 15,879 Core FFO attributable to common share and unit holders (1) $ 618,766 $ 514,624 Recurring Capital Expenditures (65,636) (52,134) Leasing costs (2,586) (3,422) Adjusted FFO attributable to common share and unit holders (1) $ 550,544 $ 459,068 (1) Unit holders include former AH LLC members and other non-affiliates that own Class A units in the Operating Partnership and their OP units are reflected as noncontrolling interests in the Company’s consolidated financial statements.
The following is a reconciliation of the Company’s net income attributable to common shareholders, determined in accordance with GAAP, to FFO attributable to common share and unit holders, Core FFO attributable to common share and unit holders and Adjusted FFO attributable to common share and unit holders for the years ended December 31, 2023 and 2022 (amounts in thousands): For the Years Ended December 31, 2023 2022 Net income attributable to common shareholders $ 366,224 $ 250,781 Adjustments: Noncontrolling interests in the Operating Partnership 51,974 36,887 Gain on sale and impairment of single-family properties and other, net (209,834) (136,459) Adjustments for unconsolidated joint ventures 3,711 344 Depreciation and amortization 456,550 426,531 Less: depreciation and amortization of non-real estate assets (17,417) (13,358) FFO attributable to common share and unit holders (1) $ 651,208 $ 564,726 Adjustments: Acquisition, other transaction costs and other 16,910 23,452 Noncash share-based compensation - general and administrative 16,379 15,318 Noncash share-based compensation - property management 4,030 3,861 Hurricane-related charges, net — 6,133 Redemption of perpetual preferred shares — 5,276 Core FFO attributable to common share and unit holders (1) $ 688,527 $ 618,766 Recurring Capital Expenditures (76,098) (65,636) Leasing costs (3,113) (2,586) Adjusted FFO attributable to common share and unit holders (1) $ 609,316 $ 550,544 (1) Unit holders include former AH LLC members and other non-affiliates that own Class A units in the Operating Partnership and their OP units are reflected as noncontrolling interests in the Company’s consolidated financial statements.
Revenue growth was driven by an increase in our average occupied portfolio which grew to 54,847 homes for the year ended December 31, 2022, compared to 52,542 homes for the year ended December 31, 2021, as well as higher rental rates and lower uncollectible rents.
Revenue growth was primarily driven by higher rental rates and an increase in our average occupied portfolio which grew to 55,874 homes for the year ended December 31, 2023, compared to 54,847 homes for the year ended December 31, 2022.
This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 8.0% to $1,920 per month for the year ended December 31, 2022 compared to $1,777 per month for the year ended December 31, 2021, and lower uncollectible rents, partially offset by a decrease in Average Occupied Days Percentage, which was 97.3% for the year ended December 31, 2022 compared to 97.6% for the year ended December 31, 2021.
This increase was primarily attributable to higher Average Monthly Realized Rent per property, which increased 7.1% to $2,065 per month for the year ended December 31, 2023 compared to $1,929 per month for the year ended December 31, 2022, partially offset by a decrease in Average Occupied Days Percentage, which was 96.8% for the year ended December 31, 2023 compared to 97.2% for the year ended December 31, 2022.
Significant Accounting Policies). Debt As of December 31, 2022, the Company had outstanding asset-backed securitizations with varying maturities starting in 2024 with an aggregate principal amount of $1.9 billion and outstanding unsecured senior notes with varying maturities starting in 2028 with an 35 aggregate principal amount of $2.6 billion.
Debt As of December 31, 2023, the Company had outstanding asset-backed securitizations with varying maturities starting in 2024 with an aggregate principal amount of $1.9 billion, which includes $938.6 million maturing within the next twelve months, and outstanding unsecured senior notes with varying maturities starting in 2028 with an aggregate principal amount of $2.6 billion.
At-the-Market Common Share Offering Program During the second quarter of 2020, the Company extended its at-the-market common share offering program under which it can issue Class A common shares from time to time through various sales agents up to an aggregate gross sales offering price of $500.0 million (the “At-the-Market Program”).
At-the-Market Common Share Offering Program During the second quarter of 2023, the Company entered into a new at-the-market common share offering program, replacing the previously expiring program, under which it can issue Class A common shares from time to time through various sales agents up to an aggregate gross sales offering price of $1.0 billion (the “2023 At-the-Market Program”).
Cash Flows The following table summarizes the Company’s and the Operating Partnership’s cash flows for the years ended December 31, 2022 and 2021 (amounts in thousands): For the Years Ended December 31, 2022 2021 Change Net cash provided by operating activities $ 665,518 $ 595,200 $ 70,318 Net cash used for investing activities (1,425,502) (1,733,465) 307,963 Net cash provided by financing activities 786,177 1,064,955 (278,778) Net increase (decrease) in cash, cash equivalents and restricted cash $ 26,193 $ (73,310) $ 99,503 Operating Activities Our cash flows provided by operating activities, which is our principal source of cash flows, depend on numerous factors, including the occupancy level of our properties, the rental rates achieved on our leases, the collection of rent from our tenants and the level of property operating expenses, property management expenses and general and administrative expenses.
Cash Flows The following table summarizes the Company’s and the Operating Partnership’s cash flows for the years ended December 31, 2023 and 2022 (amounts in thousands): For the Years Ended December 31, 2023 2022 Change Net cash provided by operating activities $ 738,689 $ 665,518 $ 73,171 Net cash used for investing activities (692,578) (1,425,502) 732,924 Net cash (used for) provided by financing activities (42,210) 786,177 (828,387) Net increase in cash, cash equivalents and restricted cash $ 3,901 $ 26,193 $ (22,292) Operating Activities Our cash flows provided by operating activities, which is our principal source of cash flows, depend on numerous factors, including the occupancy level of our properties, the rental rates achieved on our leases, the collection of rent from our tenants and the level of property operating expenses, property management expenses and general and administrative expenses.
Interest Expense Interest expense increased 17.4% to $134.9 million for the year ended December 31, 2022 from $114.9 million for the year ended December 31, 2021.
Interest Expense Interest expense increased 3.9% to $140.2 million for the year ended December 31, 2023 from $134.9 million for the year ended December 31, 2022.
When the Company issues common shares, the Operating Partnership issues an equivalent number of units of partnership interest of a corresponding class to AMH, with the Operating Partnership receiving the net proceeds from the share issuances.
The Company used these net proceeds to repay indebtedness under its revolving credit facility and for general corporate purposes. When the Company issues common shares, the Operating Partnership issues an equivalent number of units of partnership interest of a corresponding class to AMH, with the Operating Partnership receiving the net proceeds from the share issuances.
As of December 31, 2022, the Company had $130.0 million of outstanding borrowings under its revolving credit facility. During the year ended December 31, 2022, the Company issued $900.0 million of unsecured senior notes, receiving $876.8 million in proceeds, net of discount, and paid $8.2 million in deferred financing costs.
During the year ended December 31, 2022, the Company issued $900.0 million of unsecured senior notes, receiving $876.8 million in proceeds, net of discount, and paid $8.2 million in deferred financing costs. The Company also borrowed $620.0 million and paid down $840.0 million on its revolving credit facility, and the Company repaid $22.6 million on its asset-backed securitizations.
The increase was primarily related to an increase in properties sold as well as higher net gains from property sales, partially offset by higher impairment charges.
The increase was primarily related to higher net gains on property sales resulting from an increase in properties sold.
Blended Change in Rent (5) Atlanta, GA 96.0 % $ 2,014 12.0 6.1 9.7 % Dallas-Fort Worth, TX 96.7 % 2,069 12.0 6.2 7.4 % Charlotte, NC 96.6 % 1,930 12.2 6.3 8.3 % Phoenix, AZ 94.9 % 1,938 12.0 6.1 9.6 % Nashville, TN 95.8 % 2,104 12.0 6.4 8.9 % Indianapolis, IN 95.0 % 1,714 12.1 6.2 5.4 % Houston, TX 96.7 % 1,883 12.0 6.3 5.5 % Jacksonville, FL 95.8 % 1,981 12.0 6.6 8.2 % Tampa, FL 97.3 % 2,122 12.0 6.3 10.3 % Raleigh, NC 96.4 % 1,827 12.1 5.9 9.1 % Columbus, OH 96.2 % 1,962 12.0 6.1 6.9 % Cincinnati, OH 96.0 % 1,918 12.0 6.3 6.8 % Orlando, FL 96.2 % 2,053 12.0 6.3 9.9 % Salt Lake City, UT 95.8 % 2,247 12.0 5.9 8.2 % Greater Chicago area, IL and IN 97.9 % 2,201 12.2 6.2 7.3 % Las Vegas, NV 91.5 % 2,070 12.0 6.4 7.4 % Charleston, SC 97.0 % 2,062 12.0 6.2 7.8 % San Antonio, TX 94.0 % 1,859 12.0 6.0 5.3 % Seattle, WA 93.8 % 2,496 12.0 5.5 7.8 % Savannah/Hilton Head, SC 96.9 % 1,935 12.0 6.5 9.3 % All Other (6) 94.7 % 1,988 12.0 6.3 7.9 % Total/Average 95.8 % $ 2,001 12.0 6.2 8.1 % (1) Excludes 1,115 single-family properties held for sale as of December 31, 2022.
Blended Change in Rent (5) Atlanta, GA 94.8 % $ 2,153 12.0 6.8 5.8 % Dallas-Fort Worth, TX 95.1 % 2,203 12.1 6.0 6.1 % Charlotte, NC 95.3 % 2,077 12.0 6.1 6.1 % Phoenix, AZ 94.2 % 2,047 12.0 5.7 5.7 % Nashville, TN 95.6 % 2,248 12.0 6.1 5.3 % Jacksonville, FL 93.3 % 2,081 12.0 6.2 5.0 % Indianapolis, IN 96.6 % 1,797 12.1 6.1 5.3 % Tampa, FL 93.7 % 2,313 12.0 6.6 6.1 % Houston, TX 96.9 % 1,981 12.0 6.3 5.5 % Raleigh, NC 96.3 % 1,951 12.0 5.8 5.1 % Cincinnati, OH 96.4 % 2,042 12.0 6.3 5.5 % Columbus, OH 95.7 % 2,084 12.0 6.1 5.5 % Las Vegas, NV 91.9 % 2,194 12.0 6.3 3.9 % Salt Lake City, UT 96.4 % 2,365 12.0 5.9 3.7 % Orlando, FL 93.8 % 2,258 12.0 6.2 6.6 % Greater Chicago area, IL and IN 96.6 % 2,327 12.0 6.5 5.4 % Charleston, SC 95.9 % 2,207 12.0 6.3 5.0 % San Antonio, TX 94.3 % 1,915 12.0 5.6 3.3 % Seattle, WA 95.4 % 2,653 11.7 5.6 7.0 % Savannah/Hilton Head, SC 97.0 % 2,108 12.0 6.4 7.8 % All Other (6) 94.5 % 2,108 12.0 6.1 5.3 % Total/Average 95.0 % $ 2,132 12.0 6.2 5.5 % (1) Excludes 862 single-family properties held for sale as of December 31, 2023.
Share Repurchase Program The Company’s board of trustees authorized the establishment of our share repurchase program for the repurchase of up to $300.0 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares from time to time in the open market or in privately negotiated transactions.
Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K for further information on share issuances under the 2023 At-the-Market Program in January 2024. 38 Share Repurchase Program The Company’s board of trustees authorized the establishment of our share repurchase program for the repurchase of up to $300.0 million of our outstanding Class A common shares and up to $250.0 million of our outstanding preferred shares from time to time in the open market or in privately negotiated transactions.
Property Management Expenses Property management expenses for the years ended December 31, 2022 and 2021 were $112.7 million and $96.9 million, respectively, which included $3.9 million and $3.0 million, respectively, of noncash share-based compensation expense in each period related to centralized and field property management employees.
This increase was primarily attributable to increased property tax expense as well as inflationary increases in R&M and turnover costs. 32 Property Management Expenses Property management expenses for the years ended December 31, 2023 and 2022 were $123.4 million and $112.7 million, respectively, which included $4.0 million and $3.9 million, respectively, of noncash share-based compensation expense in each period related to centralized and field property management employees.
During the year ended December 31, 2022, we developed or acquired 2,958 homes, including 1,320 newly constructed homes delivered through our AMH Development Program, 1,438 homes acquired through our National Builder Program and traditional acquisition channel and 200 homes acquired in a bulk transaction from an unconsolidated joint venture, partially offset by 989 homes sold to third parties or contributed to an unconsolidated joint venture.
During the year ended December 31, 2023, we developed or acquired 1,885 homes, including 1,838 newly constructed homes delivered through our AMH Development Program and 47 homes acquired through our National Builder Program and traditional acquisition channel, partially offset by 1,546 homes sold to third parties.
As of December 31, 2022, 8,000,000 Class A common shares remained available for future settlement under the 2022 Forward Sale Agreements. In January 2023, the Company issued and physically settled the remaining 8,000,000 Class A common shares, receiving net proceeds of $298.4 million.
During the third quarter of 2022, the Company issued and physically settled 5,000,000 Class A common shares under the 2022 Forward Sale Agreements, receiving net proceeds of $185.6 million. During the first quarter of 2023, the Company issued and physically settled the remaining 8,000,000 Class A common shares under the 2022 Forward Sale Agreements, receiving net proceeds of $298.4 million.
We use cash generated from operating and financing activities and by recycling capital through the sale of single-family properties to invest in the strategic expansion of our single-family property portfolio.
The development of “built-for-rental” homes and our property-enhancing capital expenditures may reduce recurring and other capital expenditures on an average per-home basis in the future. We use cash generated from operating and financing activities and by recycling capital through the sale of single-family properties to invest in the strategic expansion of our single-family property portfolio.
During the year ended December 31, 2021, the Company issued 1,749,286 Class A common shares under the At-the-Market Program, raising $72.3 million in gross proceeds before commissions and other expenses of approximately $1.1 million. As of December 31, 2022, 1,835,416 shares have been issued under the At-the-Market Program and $425.2 million remained available for future share issuances.
During the fourth quarter of 2023, the Company issued 2,799,683 Class A common shares under its 2023 At-the-Market Program, raising $102.0 million in gross proceeds before commissions and other expenses of approximately $1.7 million. As of December 31, 2023, 2,799,683 shares have been issued under the 2023 At-the-Market Program and $898.0 million remained available for future issuances. See Note 15.
Accounts Payable and Accrued Expenses and Note 14. Commitments and Contingencies to our consolidated financial statements included as a separate section in Part IV, “Item 15.
Subsequent Events to our consolidated financial statements included as a separate section in Part IV, “Item 15.
Additionally, as of December 31, 2022, we had $130.0 million of outstanding borrowings and $4.0 million committed to outstanding letters of credit under our $1.25 billion revolving credit facility, leaving $1.1 billion of remaining borrowing capacity.
Additionally, as of December 31, 2023, we had $90.0 million of outstanding borrowings and $2.7 million committed to outstanding letters of credit under our $1.25 billion revolving credit facility, leaving $1.16 billion of remaining borrowing capacity. Under our 2023 At-the-Market Program described below, we also had $898.0 million remaining available for future share issuances as of December 31, 2023.
Net proceeds received from the sale of single-family properties and other increased $160.4 million as a result of an increased volume of properties sold and a higher average realized sales price per property during the year ended December 31, 2022 and proceeds from notes receivable related to the sale of properties increased $32.8 million year-over-year.
Net proceeds received from the sale of single-family properties and other increased $177.0 million as a result of an increased volume of properties sold during the year ended December 31, 2023.
The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the years ended December 31, 2022 and 2021 (amounts in thousands): For the Years Ended December 31, 2022 2021 Net income $ 310,025 $ 210,559 Interest expense 134,871 114,893 Depreciation and amortization 426,531 372,848 EBITDA $ 871,427 $ 698,300 Gain on sale and impairment of single-family properties and other, net (136,459) (49,696) Adjustments for unconsolidated joint ventures 344 1,873 EBITDAre $ 735,312 $ 650,477 Noncash share-based compensation - general and administrative 15,318 9,361 Noncash share-based compensation - property management 3,861 3,004 Acquisition, other transaction costs and other 23,452 15,749 Hurricane-related charges, net 6,133 — Adjusted EBITDAre $ 784,076 $ 678,591 Recurring Capital Expenditures (65,636) (52,134) Leasing costs (2,586) (3,422) Fully Adjusted EBITDAre $ 715,854 $ 623,035 39
We believe these metrics provide useful information to investors because they exclude the impact of various income and expense items that are not indicative of operating performance. 40 The following is a reconciliation of net income, as determined in accordance with GAAP, to EBITDA, EBITDAre, Adjusted EBITDAre and Fully Adjusted EBITDAre for the years ended December 31, 2023 and 2022 (amounts in thousands): For the Years Ended December 31, 2023 2022 Net income $ 432,142 $ 310,025 Interest expense 140,198 134,871 Depreciation and amortization 456,550 426,531 EBITDA $ 1,028,890 $ 871,427 Gain on sale and impairment of single-family properties and other, net (209,834) (136,459) Adjustments for unconsolidated joint ventures 3,711 344 EBITDAre $ 822,767 $ 735,312 Noncash share-based compensation - general and administrative 16,379 15,318 Noncash share-based compensation - property management 4,030 3,861 Acquisition, other transaction costs and other 16,910 23,452 Hurricane-related charges, net — 6,133 Adjusted EBITDAre $ 860,086 $ 784,076 Recurring Capital Expenditures (76,098) (65,636) Leasing costs (3,113) (2,586) Fully Adjusted EBITDAre $ 780,875 $ 715,854 41
Critical Accounting Estimates Our discussion and analysis of our historical financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Critical Accounting Estimates Our discussion and analysis of our historical financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Net cash provided by operating activities increased $70.3 million, or 11.8%, from $595.2 million during the year ended December 31, 2021 to $665.5 million during the year ended December 31, 2022, primarily as a result of increased cash flows generated from a larger number of occupied properties, higher rental rates and lower uncollectible rents, partially offset by higher cash outflows for property related expenses as a result of inflationary increases and growth in our portfolio. 34 Investing Activities For the Years Ended December 31, Change (Amounts in thousands) 2022 2021 Sources of cash from investing activities: Net proceeds received from sales of single-family properties and other $ 292,509 $ 132,072 $ 160,437 Distributions from joint ventures 68,310 57,550 10,760 Proceeds from notes receivable related to the sale of properties 34,090 1,253 32,837 Change in escrow deposits for purchase of single-family properties 20,431 (33,005) 53,436 Proceeds received from storm-related insurance claims 1,981 4,842 (2,861) $ 417,321 $ 162,712 $ 254,609 Uses of cash for investing activities: Cash paid for development activity $ (921,423) $ (824,247) $ (97,176) Cash paid for single-family properties (595,171) (850,071) 254,900 Recurring and other capital expenditures for single-family properties (138,779) (122,551) (16,228) Renovations to single-family properties (98,019) (47,681) (50,338) Investment in unconsolidated joint ventures (25,313) (29,260) 3,947 Other investing activities (49,570) (22,367) (27,203) Cash paid for deposits on land option contracts (14,548) — (14,548) $ (1,842,823) $ (1,896,177) $ 53,354 Net cash used for investing activities $ (1,425,502) $ (1,733,465) $ 307,963 Net cash used for investing activities decreased $308.0 million, or 17.8%, from $1.7 billion during the year ended December 31, 2021 to $1.4 billion during the year ended December 31, 2022.
Net cash provided by operating activities increased $73.2 million, or 11.0%, from $665.5 million during the year ended December 31, 2022 to $738.7 million during the year ended December 31, 2023, primarily due to increased cash inflows generated from higher rental rates and a larger number of occupied properties, partially offset by higher cash outflows for property related expenses as a result of inflationary increases. 36 Investing Activities For the Years Ended December 31, Change (Amounts in thousands) 2023 2022 Sources of cash from investing activities: Net proceeds received from sales of single-family properties and other $ 469,463 $ 292,509 $ 176,954 Distributions from joint ventures 47,736 68,310 (20,574) Change in escrow deposits for purchase of single-family properties 4,928 20,431 (15,503) Proceeds received from storm-related insurance claims 4,050 1,981 2,069 Proceeds from notes receivable related to the sale of properties 698 34,090 (33,392) $ 526,875 $ 417,321 $ 109,554 Uses of cash for investing activities: Cash paid for development activity $ (979,848) $ (921,423) $ (58,425) Recurring and other capital expenditures for single-family properties (134,176) (138,779) 4,603 Renovations to single-family properties (40,137) (98,019) 57,882 Cash paid for single-family properties (12,784) (595,171) 582,387 Investment in unconsolidated joint ventures (12,614) (25,313) 12,699 Cash paid for deposits on land option contracts (1,142) (14,548) 13,406 Other investing activities (38,752) (49,570) 10,818 $ (1,219,453) $ (1,842,823) $ 623,370 Net cash used for investing activities $ (692,578) $ (1,425,502) $ 732,924 Net cash used for investing activities decreased $732.9 million, or 51.4%, from $1.4 billion during the year ended December 31, 2022 to $692.6 million during the year ended December 31, 2023.
The Company also borrowed $620.0 million and paid down $840.0 million on its revolving credit facility and repaid $22.6 million on its asset-backed securitizations.
During the year ended December 31, 2023, the Company borrowed $200.0 million and paid down $240.0 million on its revolving credit facility, and the Company repaid $24.5 million on its asset-backed securitizations.
Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K for a discussion of our material short-term and long-term cash requirements. 33 A summary of our contractual obligations as of December 31, 2022 is presented below (amounts in thousands): Payments by Period Total Less than 1 year Thereafter Debt maturities (1) $ 4,581,628 $ 20,714 $ 4,560,914 Interest on debt obligations (2) 1,379,937 181,928 1,198,009 Operating lease obligations 22,764 3,917 18,847 Purchase obligations (3) 241,151 226,404 14,747 Total $ 6,225,480 $ 432,963 $ 5,792,517 (1) Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.
Exhibit and Financial Statement Schedules” of this Annual Report on Form 10-K for a discussion of our material short-term and long-term cash requirements. 35 A summary of our contractual obligations as of December 31, 2023 is presented below (amounts in thousands): Payments by Period Total Less than 1 year Thereafter Debt maturities (1) $ 4,517,158 $ 948,864 $ 3,568,294 Interest on debt obligations (2) 1,211,481 182,993 1,028,488 Operating lease obligations 19,968 4,080 15,888 Purchase obligations (3) 82,170 66,300 15,870 Total $ 5,830,777 $ 1,202,237 $ 4,628,540 (1) Amounts represent principal amounts due and exclude unamortized discounts and deferred financing costs.
Financing Activities Net cash provided by financing activities decreased $278.8 million from $1.1 billion during the year ended December 31, 2021 to $786.2 million during the year ended December 31, 2022 primarily due to the debt and equity activity described below, partially offset by $60.2 million of proceeds from liabilities related to consolidated land not owned during the year ended December 31, 2022 (see Land Option Contracts in Note 2.
This change was primarily due to the debt and equity activity described below as well as $60.2 million of proceeds from liabilities related to consolidated land not owned during the year ended December 31, 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The following table presents principal cash flows by scheduled maturity, weighted-average interest rates and the estimated fair value of our fixed rate debt as of December 31, 2022 (amounts in thousands): Expected Maturity Date 2023 2024 2025 2026 2027 Thereafter Total Estimated Fair Value Fixed rate debt $ 20,714 $ 950,992 $ 10,302 $ 10,302 $ 10,302 $ 3,449,016 $ 4,451,628 $ 4,010,351 Weighted-average interest rate 4.04 % 4.07 % 4.33 % 4.73 % 4.72 % 5.34 % 4.98 % Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the possible issuance of fixed rate debt.
The following table presents principal cash flows by scheduled maturity, weighted-average interest rates and the estimated fair value of our fixed rate debt as of December 31, 2023 (amounts in thousands): Expected Maturity Date 2024 2025 2026 2027 2028 Thereafter Total Estimated Fair Value Fixed rate debt $ 948,864 $ 10,302 $ 10,302 $ 10,302 $ 510,302 $ 2,937,086 $ 4,427,158 $ 4,129,737 Weighted-average interest rate 4.07 % 4.33 % 4.73 % 4.72 % 4.78 % 5.40 % 5.06 % Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the possible issuance of fixed rate debt.
All borrowings under our revolving credit facility bear interest at LIBOR plus a margin of 0.90% until the fully extended maturity date of April 2026 and are subject to a zero percent LIBOR floor. As of December 31, 2022, the Company had $130.0 million of outstanding variable rate debt under its revolving credit facility.
All borrowings under our revolving credit facility bear interest at SOFR, as adjusted for the Company’s SOFR spread, plus a margin of 0.90% until the fully extended maturity date of April 2026 and are subject to a zero percent SOFR floor.
However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure. As of December 31, 2022, the Company had approximately $4.5 billion of fixed rate debt and therefore the fair value of these instruments is affected by changes in market interest rates.
As of December 31, 2023, the Company had approximately $4.4 billion of fixed rate debt and therefore the fair value of these instruments is affected by changes in market interest rates.
We may incur additional variable rate debt in the future, including additional amounts that we may borrow under our revolving credit facility. Assuming no change in the outstanding balance of our existing variable rate debt, a hypothetical 100 basis point increase or decrease in LIBOR would increase or decrease our projected annual interest expense by approximately $1.3 million.
Assuming no change in the outstanding balance of our existing variable rate debt, a hypothetical 100 basis point increase or decrease in SOFR would increase or decrease our projected annual interest expense by approximately $0.9 million. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment.
This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change.
Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change. However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
Added
During the second quarter of 2023, the Company amended its revolving credit facility in connection with the transition from the London Inter-Bank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”).
Added
As of December 31, 2023, the Company had $90.0 million of outstanding variable rate debt under its revolving credit facility. We may incur additional variable rate debt in the future, including additional amounts that we may borrow under our revolving credit facility.

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