American Homes 4 Rent · NYSE:AMH
American Homes 4 Rent — ABS East September 2014
34 slides from American Homes 4 Rent's conference presentation, Sep 22, 2014
Slide 1: ABS East September 2014
ABS East September 2014
Slide 2: Disclaimer
1 Disclaimer The information in this presentation has been prepared solely for informational purposes. “We,” “AMH,” “AH4R,” “the Company,” “the REIT,” “our” and “us” refer to American Homes 4 Rent, a Maryland real estate investment trust, and its subsidiaries taken as a whole. “AH LLC” refers to Ame
Slide 3: Securitization – Funding Tool
Securitization – Funding Tool 2
Slide 4: Securitization as a Funding Tool
Securitization as a Funding Tool Overall Strategy American Homes 4 Rent (“AMH”) uses a variety of tools to diversify its capital structure: Equity Preferred equity Warehouse line of credit Securitization Structure AMH is focused on creating a cost efficient liability structure that allows the compan
Slide 5: Securitization: AH4R 2014-SFR2
Securitization: AH4R 2014-SFR2 4
Slide 6: 2014-SFR2 $487,650,000 Single-Family Rental Securitization Transaction Overview
5 American Homes 4 Rent 2014-SFR2 $487,650,000 Single-Family Rental Securitization Transaction Overview AH4R 2014-SFR2, AH4R’s second securitization, is the single family rental industry’s first fixed rate deal. The 10 year securitization priced at a blended coupon of 4.42% on September 11, 2014. Bo
Slide 7: 2014-SFR2 Capital Structure
6 American Homes 4 Rent 2014-SFR2 $487,650,000 Single-Family Rental Securitization; Lead Underwriters: GS, JPM, WF Capital Structure Offered Class Rating (Md/Kr/Mr) Approximate Initial Certificate Balance ($mm) Balance to BPO1 (%) Approximate Initial CE (%) Coupon UW NCF Debt Yield2 Maturity Date WA
Slide 8: 2014-SFR2 Collateral Attributes
7 American Homes 4 Rent 2014-SFR2 Collateral Attributes Lease Expiration1 Average Age of Property (Years)1 Contractual Monthly Rent2 BPO Values2 Percentages are determined based on number of properties Percentages are determined based on aggregate BPO value 10.3% 21.1% 24.3% 18.7% 11.2% 14.3% $62,00
Slide 9: 10-Year Fixed Rate vs. 5-Year Floating Rate
8 10-Year Fixed Rate vs. 5-Year Floating Rate Loan Attributes Structural Considerations 10-Year Fixed (AH4R 2014-SFR2) Recent 5-Year Floating SFR Transactions 5-Year Floater (AH4R 2014-SFR1) Amortization 1% per year Loan will de-lever 10% over the life None 1% per year Interest Rate Cap None; the co
Slide 10: Single-Family Rental Transaction Comparison
9 Single-Family Rental Transaction Comparison Collateral Characteristics and Loan Structure Page Source: Rating Agency Presale Reports Includes IH 2013-SFR1, CAH 2014-1, IH 2014-SFR1, CAH 2014-2, SBY 2014-1, IH 2014-SFR2 and ARP 2014-SFR1 Number of MSAs is based on the MSA count printed in the Presa
Slide 11: Geographic Diversity AH4R 2014-SFR2 vs AH4R 2014-SFR1
10 Geographic Diversity AH4R 2014-SFR2 vs AH4R 2014-SFR1 (1) Number of MSAs sums to 34 rather than 33 due to overlap Page Source: Rating Agency Presale Reports SC OR NV AZ TX IL IN OH GA FL TN NC States only in AH4R 2014-SFR2 States in AH4R 2014-SFR1 and AH4R 2014-SFR2 Geographic Characteristic AH4R
Slide 12: Securitization: AH4R 2014-SFR1
Securitization: AH4R 2014-SFR1 11
Slide 13: 2014-SFR1 $480,970,000 Single-Family Rental Securitization Transaction Overview
12 American Homes 4 Rent 2014-SFR1 $480,970,000 Single-Family Rental Securitization Transaction Overview AH4R 2014-SFR1 was AH4R’s inaugural securitization of approximately $481 million first lien, floating rate loan secured by 3,852 single-family rental homes. The transaction priced on May 13, 2014
Slide 14: 2014-SFR1 Capital Structure
13 American Homes 4 Rent 2014-SFR1 $480,970,000 Single-Family Rental Securitization; Lead Underwriters: GS, JPM, WF Capital Structure Class Rating (Md/Kr/Mr) Approximate Initial Certificate Balance ($mm) Balance to BPO1 (%) Approximate Initial CE (%) Coupon UW NCF Debt Yield WAL (years) (Maturity Da
Slide 15: Corporate Overview
Corporate Overview 14
Slide 16: Large, Diversified Portfolio; Strong Balance Sheet; Differentiated Access to Capital
15 Large, Diversified Portfolio 27,173 high quality homes as of June 30, 2014 (over 29,200 as of July 2014) 23,364 homes leased as of June 30, 2014 (approximately 25,500 as of July 2014) Properties in 22 states / 42 markets Strong Balance Sheet Strong balance sheet with conservative approach to leve
Slide 17: AMH Business Strengths
AMH Business Strengths Tenant Driven Business AMH targets properties that fit the following: Traditional middle class neighborhoods in growing markets Minimum 3 bedrooms, 2 bathrooms, two car garage Newer properties in attractive neighborhoods Significant Scale Advantage Well developed national oper
Slide 18: Investment Philosophy
17 Investment Philosophy Focus on Tenant Value created by finding the right tenant Target tenants are families with children as this creates ties to the property given proximity to strong schools Stronger schools are generally in newer neighborhoods Long term price appreciation Tenants likely to sta
Slide 19: History of AMH
History of American Homes 4 Rent Q3 2014 29,2001 Completed first fixed rate securitization transaction in September 2014, a $487.6 million 10 year deal at 4.42% Completed merger with Beazer Pre-Owned Homes, a $263 million acquisition Completed public offering with total expected gross proceeds of $2
Slide 20: 2014 Second Quarter Operational Update
19 2014 Second Quarter Operational Update Quarterly Occupancy, Revenue and NOI Increases Q2 Overview Continued strong growth in occupancy and cash flow from operations Note: April 30, 2014 results reflect preliminary estimates. ($ Millions) Page Source: SEC Filings, Form 8-K, August 5, 2014 (1) Stab
Slide 21: Second Quarter 2014 YTD Performance Highlights
20 Second Quarter 2014 YTD Performance Highlights Revenues of $171.6 million Net Operating Income (NOI) from leased properties of $104.9 million Acquired 3,905 properties during first half 2014, increasing total portfolio to 27,173 homes at June 30, 2014 Properties rent-ready for more than 90 days w
Slide 22: National High Quality Portfolio in Attractive Markets
21 National High Quality Portfolio in Attractive Markets As of June 30, 2014 For illustrative purposes, approximate cost per home includes acquisition costs, renovation fees and other costs incurred by the REIT for purchase and renovation Based on number of properties as of June 30, 2014 Page Source
Slide 23: Favorable Operational Comparison to Multi-Family
22 Favorable Operational Comparison to Multi-Family NOI Margin Comparison1 Occupancy Comparison1 Renting primarily to families who desire high quality neighborhoods and school systems 72% renewal rate for Q2 2014 Current AMH average rental rate of $0.71 per square foot provides superior value to ren
Slide 24: Property Life Cycle
23 Property Life Cycle Page Source: SEC Filings, Form 8-K, May 6, 2014
Slide 25: Acquisition, Renovation and Leasing Rates
24 Acquisition, Renovation and Leasing Rates “Rent Ready” includes properties for which initial construction has been completed during each quarter. “Leases Signed” includes the number of initial leases signed each quarter (includes Pre-Existing Leases). Page Source: SEC Filings, Form 8-K, August 5,
Slide 26: Acquisition of Beazer Pre-Owned Rental Homes
25 Acquisition of Beazer Pre-Owned Rental Homes Closed July 1, 2014 Acquisition Price Class A Common: 8.2 mm shares $146 mm1 Debt assumed $113 mm Escrow account $5 mm Total: $263 mm Page Source: SEC Filings, Form 8-K, August 5, 2014 Based on $17.75 AMH common stock closing price on July 1, 2014 Port
Slide 27: Appendix
Appendix 26
Slide 28: Proven Acquisition Platform
27 Proven Acquisition Platform Property Screening and Underwriting Process Acquisitions by Channel 2012 In a typical month AMH underwrites approximately 30,000 homes and acquires 2% of homes underwritten Key Underwriting Criteria 1) Location 2) Physical criteria 3) Financial criteria 2013 2014 Page
Slide 29: Market Leading Renovation Capabilities
28 Market Leading Renovation Capabilities Standardized Renovation Process Homes Delivered Rent Ready per Quarter Before and After Comprehensive inspection and renovation budgeting Utilize over 3,000 preferred contractors nationwide Achieve substantial discounts through scale-enabled bargaining power
Slide 30: Successful Marketing and Leasing Process
29 Successful Marketing and Leasing Process Tenant Underwriting1 Lease Execution 96.2% Leasing Channels Initial Leases Signed per Quarter Designed to minimize potential tenant defaults Multiple Listing Service Referral Rental History Credit History Criminal Records Average Income: $85,000 4.95x Inco
Slide 31: NOI and Core NOI Reconciliation
30 NOI and Core NOI Reconciliation NOI is a supplemental non-GAAP financial measure that we define as rents and fees from single-family properties and tenant charge-backs, less property operating expenses for leased single-family properties. Core NOI is also a supplemental non-GAAP financial measure
Slide 32: NOI and Core NOI Reconciliation (continued)
31 NOI and Core NOI Reconciliation (continued) The following is a reconciliation of NOI and Core NOI to net income / (loss) determined in accordance with GAAP: Page Source: SEC Filing, Form 8-K, August 5, 2014 Jun 30, 2013 Sep 30, 2013 Dec 31, 2013 Mar 31, 2014 Jun 30, 2014 Net income / (loss) 1,123
Slide 33: FFO and Core FFO Reconciliation
32 FFO and Core FFO Reconciliation The following is a reconciliation of net loss attributable to common shareholders to FFO and Core FFO for three months ended September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 (amounts in thousands, except share and per share information): We
Slide 34: MERICAN ==="
MERICAN ===" fiomes