Operating Performance Expectations Increase

The August 10th earnings report from small-cap REIT, Tricon Residential (TCN) completed earnings season for the single-family rental triumvirate, which is anchored by industry leaders, Invitation Homes (INVH) and American Homes 4Rent (AMH). The earnings period was accentuated by strong portfolio operating metrics across the board which led to companies also increasing operating performance expectations for the balance of the year. This performance was driven by rising portfolio rents, low resident turnover and greater affordability from renting compared to purchasing a home. Companies held back from raising guidance expectations for full year earnings, or funds from operations (FFO) as they moderated external growth plans associated with purchasing large quantities of homes directly from the multiple listing services (MLS) due to low inventory levels and a belief that pricing will improve later in the year as home values moderate and market rents move higher.

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