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Greetings, and welcome to the AMH Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nick Fromm, Vice President of Investor Relations. Thank you, Nick. You may begin.

Good morning, and thank you for joining us for our Fourth Quarter 2025 Earnings Conference call. With me today are Bryan Smith, Chief Executive Officer; Chris Lau, Chief Financial Officer; and Lincoln Palmer, Chief Operating Officer. Please be advised that this call may include forward-looking statements. All statements other than statements of historical fact included in this conference call are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press releases and in our filings with the SEC. All forward-looking statements speak only as of today, February 20, 2026. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings press release and supplemental information package. As a note, our operating and financial results, including GAAP and non-GAAP measures, are fully detailed in our earnings release and supplemental information package. You can find these documents as well as SEC reports and the audio webcast replay of this conference call on our website at www.amh.com. With that, I will turn the call over to our CEO, Bryan Smith.

Welcome, everyone, and thank you for joining us today. After our team delivered a solid quarter 2025, the new year is off to a busy start. Before we dive into our results and outlook, I would like to address the executive order the administration issued last month, showing its focus on housing affordability and the role that single-family rentals play. We appreciate the attention to this critical issue and continue to emphasize that AMH is part of the solution. Alongside our industry peers and partners, we are actively engaged with government and business leaders in Washington and around the country. These meetings have been encouraging as we continue to work with policymakers on the challenges of affordability, which will require sustained investment and collaboration across both the public and private sectors. Millions of Americans call single-family rentals home. In fact, consistently since 1965, roughly 1/3 of households in the United States are renters. This includes first responders, educators and health care providers who rely on this option to live in the communities they serve. Our homes provide access to the same desirable neighborhoods at a fraction of the estimated monthly cost of homeownership. Further, a single-family rental home often represents an important step in a family's journey towards homeownership. Our surveys show that buying a home is the #1 reason residents move out of our portfolio. Over the course of 2025, we estimate over 5,000 households or approximately 30% of all move-outs left their AMH home to purchase a house. Our strategy has always been centered around providing quality housing and an exceptional resident experience. In our early years, we achieved this by renovating homes and revitalizing neighborhoods across the country. During that time, housing starts slowed dramatically, causing shortages in many of our markets. In 2017, we made the strategic decision focused on ground-up development to meet the growing demand for single-family rentals. Since then, our in-house development program has added over 14,000 newly built homes across the country. For the past few years, AMH has not been materially active buying homes on the MLS, instead, we've been an active seller. In 2025 alone, we sold over 1,800 homes to individual homeowners. In 2026, we expect similar activity. Proceeds from these dispositions continue to provide the necessary capital for our development program. In 2026, we plan to deliver around 1,900 newly constructed homes across the portfolio. And the foundation for our future growth remains centered around adding homes through our in-house development program. Now let's turn to our fourth quarter and full year results. In 2025, we delivered $1.87 of core FFO per share, representing year-over-year growth of 5.4%. Our consistent results not only demonstrate our commitment to operational excellence within the same home portfolio, but also underscores our approach to maximizing value across all areas of the business. Operationally, our teams did a great job navigating a challenging environment in the tail end of 2025, which included seasonal demand moderation and stubborn supply. This put downward pressure on rate and occupancy heading into the beginning of 2026. For the month of January, new, renewal and blended spreads were minus 1%, 3.5% and 2.4%, respectively, while same-home average occupied days was 95%. Throughout the first quarter, our focus will continue to be on occupancy with our outlook for 2026, contemplating a flatter seasonal curve or rate growth occupancy than we would normally expect. Chris will cover guidance in more detail later in the call. As we look ahead, it is clear that there is a growing need for more high-quality housing in America. AMH with its well-located homes, outstanding resident service and new home development program is committed to doing its part. Thank you to the team for your hard work last year and your continued commitment to excellence. With that, I'll turn the call over to Chris.

Thanks, Bryan, and good morning, everyone. As usual, I'll cover three areas in my comments today. First, a brief review of our year-end results, second, an update on our balance sheet and recent capital markets activity. And third, I'll close with an overview of our 2026 guidance and capital plan. Beginning with our operating results, we closed out 2025 with solid execution, generating quarterly net income attributable to common shareholders of $123.8 million or $0.33 per diluted share and $0.47 of quarterly core FFO per share in unit, representing 4.1% year-over-year growth. And for full year 2025, we generated net income attributable to common shareholders of $439 million or $1.18 per diluted share and $1.87 of core FFO per share in unit, representing 5.4% year-over-year growth, once again leading the residential sector. From an investment standpoint, during the quarter, we delivered 490 total homes from our AMH Development program. This brings our full year deliveries to over 2,300 homes contributing much needed newly constructed housing stock to 14 markets across the country. On the disposition front, we had another active quarter selling 646 properties, generating roughly $190 million of net proceeds. For the full year, we sold 1,827 properties for total net proceeds of approximately $570 million at an average disposition cap rate in the high 3%. As a reminder, our disposition properties are regularly sold to individual homeowners and provide us with a highly attractive form of capital to reinvest back into our AMH Development program. Next, I'd like to turn to our balance sheet and recent capital activity. At the end of the year, our net debt, including preferred shares to adjusted EBITDA was 5.2x, our $1.25 billion revolving credit facility had a $360 million balance, and we had approximately $110 million of cash available on the balance sheet. During the fourth quarter of 2025 and January of '26, we fully utilized our remaining $265 million share repurchase authorization and repurchased a total of 8.4 million common shares representing approximately 2% of total share units outstanding. These shares were repurchased at an attractive price of $31.65 per share representing an attractive capital deployment opportunity complementing the long-term value created by our AMH Development program. Next, I'd like to share an overview of our initial 2026 guidance. For the full year, we expect core FFO per share unit of $1.89 to $1.95, which at the midpoint represents year-over-year growth of 2.7% and for the same home portfolio. At the midpoint, our expectations contemplate core revenues growth of 2.25%, which reflects average monthly realized rent growth and the 2.5% area and a 25 basis point year-over-year occupancy headwind as we expect 2026 average occupied days in the high 95% area. Additionally, our outlook contemplates core property operating expense growth of 2.75% driven by property tax growth in the 3% area, representing another year of below average growth and mid 2% growth on all other expenses, driven by another successful insurance renewal campaign and our continued commitment to efficiently managing controllable expenses. Putting together, our same-home revenue and expense growth expectations, we expect 2026 same-home core NOI growth of 2% at the midpoint. From an investment standpoint, given the current capital market conditions, we have strategically moderated our development plan activities such that we expect to deploy approximately $750 million of total capital, including joint ventures, adding approximately 1,900 new to constructed AMH development homes to our wholly-owned and joint venture portfolios. Specifically, for our wholly-owned portfolio, we expect to invest approximately $550 million of AMH capital, consisting of 1,400 homes added from our development program that we plan to fund entirely to recycled capital from our disposition program. Additionally, our full year outlook only contemplates the $115 million of share repurchases that were already executed in January. While the stock price continues to represent an attractive capital deployment opportunity, given the recent attention on our industry and ongoing capital market uncertainty, we plan to take a patient approach to the timing of any additional repurchases. However, as we continue to monitor the market. As mentioned in yesterday's release, our Board recently approved a new $500 million share repurchase authorization. Additionally, keep in mind that our balance sheet has a couple of hundred million dollars of opportunistic capital capacity given the strategic sizing of this year's development activities. And before we open the call to your questions, I wanted to close with a few final thoughts. 2025 was another great example of the power of the AMH platform, as we delivered another year of residential sector-leading core FFO growth. As we head into 2026, we remain committed to the AMH strategy, which has demonstrated our ability to create differentiated value for our residents, local communities, team members and shareholders. And with that, we'll open the call to your questions. Operator?

We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Eric Wolfe with Citibank.

Can you just talk about why you're expecting a flatter occupancy and rent growth curve than you normally expect? And I guess, specifically what that means for your blended rate growth expectation? And then I guess, lastly, on the occupancy, you said that you're expecting it to be flatter this year as well. But if I look at your fourth quarter, you're down like 30 basis points year-over-year. And I think that's what you're expecting through the full year of 2026. So I guess why -- I guess it seems to me like you're expecting something more sort of seasonal like you saw in 2025. So just help us work through both those elements.

Yes. Thanks, Eric. This is Lincoln. As we come into 2025 or 2026, excuse me, we're seeing the start of leasing season that we would normally see, maybe slightly delayed from where it was in previous years. We also -- as we talked at Dallas NAREIT, we had expected to build a little bit of occupancy coming into the end of 2025 and kind of start the year in a position of strength. Despite some price action, we came in a couple of hundred houses behind just to put some context behind where we sit today. So starting the year, we're highly focused on kind of building occupancy throughout leasing season, supported by some price action and then expect a flatter kind of peak of that occupancy and then holding more into the back of the year. And specifically to your question about fourth quarter and typical trends there, we expect that hold in the back half to be supported by not only the flat new lease rate growth that you're seeing now, but a favorable expiration curve again for 2026.

Yes. And then Eric, it's Chris. Just to make sure I kind of understand some of the numbers behind what Lincoln was talking about. On the full year context, we're thinking about new leases and about the flattish area for full year '26 renewals kind of consistently in the plus or minus 3% area on the full year. That then comes to our full year blended spread expectation in the low 2s. And as you heard us talking about in guidance view around occupancy being in the high 95s, which, to Lincoln's point, the focus right now is on occupancy through the first quarter, building a bit into the middle of the year. And then the objective is to hold and flatten that curve into the back part of the year.

Our next question comes from Jamie Feldman with Wells Fargo.

I appreciate the thoughts on the seasonal curve. Maybe just as you thought about giving your guidance for the year, I mean, there's a lot of moving pieces out there on the political front, on the demand side, on the supply side, where would you say there's the most variability to your numbers? And maybe talk us through the high end, the low end of the range and what gets you to either end across the key line items.

Thanks, Jamie. The other thing that we're looking at this year is we've contemplated the building blocks of the guide is just the environment that we start the year end. Normally, as we kick off the season, the 200, 300 house pickup that we're looking for probably isn't that big of the list. The challenges in the current environment is that supply across all aspects of residential, different housing types seems to be stubbornly elevated. We see that in multifamily. We see that on the first sale side with some of the [indiscernible] rent conversions and then some BTR that's sticky in some of the markets. Again, it's highly -- it's highly market-dependent. And we have markets where supply just is not an issue overall, but some of those markets that we've talked about before that took those high levels of deliveries that outpaced absorption over the last couple of years. Continue to struggle to work through that. On the demand side, we're seeing great demand for AMH products still. The traffic this year is not outside of normal year-over-year fluctuation. But again, set against that backdrop of higher supply levels, it just seems like our prospects have more choice in the marketplace. And that's leading to some slightly extended lease-up times, but any dislocation in those supplies, we view as being temporary related to those suppliers, just in the long-term outlook for demand for AMH homes hasn't changed in most of our markets.

Our next question comes from the line of Steve Sakwa with Evercore ISI.

Just wanted to focus a little bit on the development pipeline. I mean it sounds like you're slowing deliveries a little bit and being a little bit more cautious, I guess, certainly given the capital markets environment. But like where are you seeing development yields for the product you're starting today based on today's rents and today's cost? What can you get? And I guess, how do you weigh deploying capital there against the buybacks? I know you're being probably a little bit cautious given the political environment, but sort of how do you weigh those two things today?

Steve, this is Bryan. Thanks for the question. I'll start with what the pipeline looks like kind of round out how we completed 2025 as well. As we talked about last year or in November, the -- going in delivery development yields and active projects was slightly lower than the 5.5% we thought, we'd get hit at the beginning of the year, really indicative of just general rent pressures across all of residential. So we ended last year somewhere in the 5.3% area ongoing in yields. And we're expecting similar yields in 2026 for the 1,900 homes that we're planning to deliver. Highly dependent on rent movement, but in the current environment, similar to 2025 is what our outlook is. And those are the ones that are in play right now or soon to be actively started.

And then, Steve, Chris here, just from a capital perspective, I think the key to all of this is appropriate sizing of capital. Everyone saw that we made a pretty quick pivot in terms of sizing of capital towards the end of 2025. And you can see that we pivoted further heading into 2026 sizing the on-balance sheet portion of development capital deployment to essentially be match funded with disposition proceeds for this year. On top of sizing to the development program, that then frees up incremental capital capacity for buybacks that can function as a nice complement to the development program and the long-term value creation there. You saw that we were active on that already, repurchasing in about 2% of shares and units outstanding towards the end of '25 and beginning of '26, and we have capacity on the balance sheet for about a couple of hundred million dollars of incremental opportunistic capital deployment. But as I mentioned in prepared remarks, and [indiscernible] actually mentioned in your question, there's a lot of different moving pieces out there right now. And so we're going to make sure that we remain prudent and if we be patient in terms of how quickly we're moving on additional repurchases at this point.

Our next question comes from the line of Haendel St. Juste with Mizuho Securities.

Maybe some color on OpEx. You outlined expectation for tax, I think going to be up 3%, 4 to 5 -- sort of the 4% to 5% long-term average we've seen. Is there anything unique worth highlighting? Do you think this is a sustainable level near term? And maybe some color on turnover, what you're expecting in your recent insurance renewals.

Sure, Haendel, Chris here. Yes, look, on property taxes, overall, I think it's probably helpful to point out the fact that 2025 actually ended up being one of our lowest property tax growth years in company history, down in the 2.5% area. And as we move into 2026, we're expecting another year of what I would call moderate property tax growth in the plus or minus 3% area. A touch above 25%, but still well below long-term average, long-term average for us is 4% to 5%. Recall one of the things that drove our property tax growth of 2.5% last year is that it was actually one of our best years ever in terms of appealed outcomes. And at least at the start of '26, probably not totally prudent to expect that we'll have two record back-to-back years on appeals. But nonetheless, 3% is something that I would still call very much in the maybe cooperative areas, the right characterization. And in terms of other components of expense growth for this year, our outlook also contemplates about a double-digit decrease in year-over-year insurance costs. That is based off of our successful renewal campaign that becomes effective at the end of this month. And then for remaining expenses, controllables in particular, we are expecting growth in, call this, 3-ish area or so that I think represents another year of tight expense controls.

Our next question comes from the line of Jeff Spector with Bank of America.

Great. If you could talk a little bit more about the supply pressure you saw in '25, what surprised you, would be a little bit more specific in terms of markets. And how that may impact your strategy going forward on markets? Again, Midwest continues to outperform. Do you want to try to lean in more there? given the pressure you're seeing, let's say, in the Sunbelt and your thoughts on that supply pressure in '26.

Thanks, Jeff. This is Lincoln again. When I look at the individual markets, you can see the performance of most of those in the fourth quarter in the supplemental. If you just walk down across, you can see the footprints of the supply impact in those numbers. And again, I would just anchor back to the idea that the build in inventory and the standing accumulation of availability across all of the different product types is the result of those deliveries heavily outpacing in some markets. The absorption. I think all of us are relieved to see the starts and deliveries have slowed. Those are on the downswing, but we also understand that there is still some of the outstanding inventory that needs to be consumed. When I look across those markets, those that are heavily impacted, and they're impacted for different reasons. San Antonio, as an example, took heavy deliveries of multifamily. And so there's a lot of standing inventory there, and you can see that in the results. Phoenix is probably one of the epicenters for build-to-rent. And there's still some, albeit different product than ours, but still some levels of inventory on the build-to-rent side there. And then Las Vegas is one where we've probably seen a little bit more of for sale to for rent conversions and more competition from traditional landlords. So when it comes to the Midwest, we talked about this quite a bit. The underlying fundamentals there are still strong. We don't anticipate those changing in the short term. They did not take some of those high levels of deliveries of different types of product over the years. So there's still supply constrained to some extent, still relatively affordable, still a great place to live. And in the short term, that's not going to change. So we're watching the markets carefully and committed to most of them for the long term.

Our next question comes from the line of David Segall with Green Street.

Recognizing that you're going to take a more patient approach to additional buybacks this year. Would you need additional sales activity dispositions in order to fund any additional buybacks? And I recall that you had 20,000 homes that were released from collateral from being securitized, it's collateral last year. Would we see that as a source of additional funding this year?

Sure. David, Chris here. We're thinking about sizing of buybacks in general. I think one of the most important things to remember is the importance of balance in our approach, right, where we are balancing the importance of keeping the development program in motion, which is mission-critical, especially for long-term value creation. We're balancing that with maintaining our commitment to the balance sheet and targeted leverage levels, balanced with a, what I would call, a robust, but also responsible level of dispositions. . And so as we think about incremental buybacks from here, as I mentioned in prepared remarks, today and over the course of the year, there is, I would call it, a couple of hundred million dollars of incremental capital capacity already on the balance sheet in the form of leverage capacity. And then beyond that would be the opportunity to recycle additional capital through the disposition program. You are exactly correct in that we are of the view that there's a pretty good healthy runway of disposition opportunity ahead of us, especially given the fact that we recently freed up 20,000 homes that were previously encumbered by our securitizations that were paid off over the last couple of years. But the natural governor there, like we've talked about plenty of times, is just how quickly those homes that are being identified out of those previously collateralized homes can actually be sold. And the governor there is the fact that we are selling homes in our disposition program ultimately to home buyers via the MLS and to sell a home to a home buyer via the MLS it needs to be vacant as we all know. And as we also know, 95% of the portfolio is not vacant. We take our responsibility as a housing provider, extremely serious and we will never take housing away from an existing resident to sell a home, which means we need to let leases roll, tenants moved out, and then we can prep the home for sale, which creates a little bit of a governor in terms of how many homes can actually be sold in one given year.

Our next question comes from the line of Buck Horne with Raymond James.

I was curious if you could comment a little bit about the news from the White House last night about potentially capping the single-family or the investor band at about 100 homes per organization. So if that's a much lower cap than previously contemplated, just going through a thought exercise of how do you think that plays out in the industry? Does that potentially force a lot of subscale operators to either pull rental inventory out of the market or sell inventory quickly. What do you think those other smaller tier operators are going to do if that type of cap is in place?

Buck, this is Bryan. Thanks for your question. There's obviously been a lot of attention on this issue this year. We've been actively engaged with policymakers at the state, local and Federal level. If you go back to the executive order, there was -- the first part was defining the size and definition of institutional investor, which was -- the treasury was tasked with 30 days. And I think the 30 days is up today. So whether that ends up being a 100 or some other number remains to be seen. There's a lot still moving in the definitions and just on how this is all going to ultimately shake out. But as you know, we've been investing heavily into our government affairs efforts for years. Active engagement allows us to be at the center of a lot of these discussions and really get our message across that we are a key part of the housing solution, especially as we're addressing the supply shortage with our in-house development program. And the mechanics of how it affects smaller operators versus larger build-to-rent versus, versus scattered side are still unclear. But the good news is from these meetings, there's a clear understanding that supply has not kept up with demand and supply solutions are continuing to be sought. The other key piece that we're as an industry with our partners are trying to make sure realizes the importance of single-family rentals in the full housing ecosystem. So those are the types of messages that we're working on, as I mentioned in my prepared remarks, but how it shakes out still remains to be seen.

Our next question comes from the line of Brad Heffern with RBC Capital Markets.

Yes. Obviously, I appreciate all the color on the supply impacts. When do you think we're going to be in a more normal environment just from a supply-demand balance standpoint? .

Brad, this is Lincoln. I appreciate that question. I think it's one that's been asked quite a bit over the last year or two. It's really going to depend on how quickly we can consume through -- as a housing industry we consume through that standing inventory. That's going to depend on demand. Like I mentioned before, the demand is still there for our product, but it's going to take some time to work through the inventory. So I'm not ready to call that yet. I think we don't have a view necessarily on when that's going to turn around. What I will tell you is we have better data and insight into that than we ever have. And we're watching it extremely closely, and we're ready to adjust as soon as we see some leading indicators that tell us that it's improving.

Our next question comes from the line of Jesse Lederman with

When you spoke in late October, you noted your internal dashboards were indicating some inflection point in seasonal leasing activity. But it looks like in November versus December, occupancy was lower sequentially and that's continued here in January. So what changed over the subsequent few months relative to your expectations in October? And if you could just talk through the renewal rent growth falling roughly that 70 basis points [ sequentially ] into January. That would be great as well.

Yes. Thanks, Jesse. Yes, fourth quarter was a little bit of a tough time from a visibility standpoint. We did start to see some moderation as we saw across the housing landscape in general, I think -- there were some fits and starts, where we saw in November as an example, we started to see a pickup in activity. As we talked through that, our expectation was that we would build occupancy through the end of the year, and again, come into the first of the year like we normally do it in a good occupancy position, that wasn't sustained. We adjusted our pricing strategy and some other things that led to that slightly negative new lease rate growth in the fourth quarter, but it didn't quite turn out the way that we thought it would. So -- we're pulling out all the stops at the first of the year here to support occupancy. Our goal is again to build through peak season and focus highly on making sure that we have occupied homes. That is supported by the new lease rate growth that you've seen, but -- to your other question, a slight moderation in renewals, just recognizing the fact that we -- the components of building that occupancy or new leasing and retention inside the portfolio. So we wanted to support the retention a little bit. We're setting those renewal rates out well in advance. So those went out for January and February, right about that same time, we were contemplating some of those other changes in the marketplace. So overall, I think we're in the right place on the renewals as well, slight moderation, but full year around the 3% area should go to where we need to be on the occupancy.

Our next question comes from the line of Michael Goldsmith with UBS.

Can you talk a little bit about pricing trends at the build to rent versus the scatter site product? And are you offering concessions at either or both of those segments in your portfolio?

Michael, this is Bryan. Thanks for the question. Pricing trends, it's interesting. We talked -- or I talked earlier in the call about where the 2025 yields settled is really a function of the rate environment. But if you were to compare our community leasing with scattered site. We've seen pretty favorable demand for our communities. We've been leasing them up without concessions, no concessions on the scattered site and really no concessions on the lease-up of the new development communities as they're being delivered. It's really interesting, too, because as we talked about in the past, these are homes that are being delivered into active construction sites, and we're still supporting good rent without having to do a lot on the concession side. And to kind of add on to a little bit of what Lincoln has been talking about with supply and demand, when that supply pressure starts to be alleviated and hopefully, in the near term, we're going to see the benefit on our new development product. It's a superior product. The rents at a premium. There's a lot of demand for it and the pricing power will return there, and you'll see yields migrate north on our development new deliveries as well.

Our next question comes from the line of Jade Rahmani with KBW.

This is Jason Sabshon on for Jade. So homebuilders have leaned in or rate buydowns and incentives lately. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing that aggressiveness from builders drive any increase in move-outs to buy.

Yes. Thanks for the question, Jason. Again, it's the for-sale markets, one portion of the supply that we watched very carefully. Our moved out to buy has remained pretty steady in the high 20s to 30% area. So we haven't seen a major shift. There are some anecdotes in some of the markets about incentives outside of rate buydowns. As an example, some of the the builders in our Florida markets got pretty aggressive, and we're willing to buy out some of our leases for our residents who were interested in buying homes. We're watching that very carefully. It's happening on the fringe, again, not affecting the overall trend. And then, of course, I think everybody is also interested in how many of the those for-sale homes are coming back into the portfolio or into the overall inventory. And we're watching that carefully as well. So not a huge impact so far, just small anecdotes of builders trying to respond to do their part to give some market share.

Our next question comes from the line of [ Jason Wayne ] with Barclays.

Thanks for the question. Looking at the development pipeline, you have some lots in some markets outside of the Sunbelt, like the Midwest and in the West Coast -- just wondering where the delivery this year located and where you'd have the preference for starting new developments. .

Yes, thank you. This is Bryan. In our development program in the Midwest, it's focused on Columbus. And if you look at our supplemental, you can see what the lot pipeline is behind that. We really like the Columbus market. We really like a number of the markets in the Carolinas. Seattle has been strong as well. So you can see the pipeline there, and we're looking forward to delivering really good product into those high-demand markets. And then some of the other markets where we have a significant development presence, we feel very good about those markets over the long term, but there may be some short-term pressures referring more towards the lot pipeline that we have in places like Arizona and Las Vegas.

Our next question comes from the line of Eric Wolfe with Citibank.

Thanks for taking the follow-up. Looking at the changes in your same-store pool, your third quarter occupancy was 95%, like as reported last quarter, and now it's 96.4%. So there's a similar like a 50 basis point change based on what you sold. I guess what is the reason for that? I mean is it -- are you selling more vacant homes than normal? Why was there such a sort of jump in the occupancy based on the new same-store pool? Because obviously, it creates a little bit of a more difficult comp for you.

Eric, Chris here. Essentially, what you're seeing is the result of smart asset management decisions where we are identifying some of the outlier and/or underperforming properties through our asset management process for disposition. And so over time, as we are identifying those underperformers, they're moving their way into the disposition program and ultimately being sold. Obviously, that has an upward improving lift to the remainder of the same-store pool. There's always a little bit of movement from one quarter to the next usually not terribly large, but it's a function of making smart asset management decisions at the unit level.

Okay. And then last question. You normally have a pretty good idea, not perfect, but good idea of sort of what forward occupancy looks like and I know it can miss based on various factors. But I guess, as you look at things 30, 60 days out based on your revenue management system, are you seeing that typical lift in occupancy that you normally see at this time of year, especially since you've throttled baked down a bit. Just curious if you can give us a perspective on sort of where you expect to go over the next couple of months?

Yes. Thanks. This is Lincoln again. As I mentioned before, a little bit slower start to the leasing season than we would have preferred. However, we are seeing the normal trend in activity that's moving upwards. So again, with the focus on building occupancy, we'd expect to move into the 96s of the peak of season and then again, hold some of that into the back of the year. So -- over the next couple of months, we would expect if we execute well, that we'll see the occupancy goal.

Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets.

Great. Beyond the supply challenge markets that you've discussed, is the moderation you're assuming in guidance around lease rate growth or that flatter seasonal curve that you described. Is it broad-based? Are you seeing it more pronounced than either the Sunbelt or Midwest markets? And then on top of that, just curious how much that's playing into your development decisions.

Maybe I'll just give some commentary on the overall market and then Bryan or Chris want to comment on the development they can. Yes. Look, again, I think that what we're seeing is the effect of broad-based supply across all housing types. It is very market specific, and I wouldn't want to point to one factor that would look like it's affecting all of our markets, especially equally. Like I said earlier, we have many markets that are not supply pressure at all. Take a Seattle and Salt Lake City as an example, where not only they have not had heavy deliveries over the last couple of years, but they're also significantly geographically constrained. It's difficult to build inventory into those markets. So it's not equal across all of them, and we evaluate each of them individually.

Yes. And then Austin, Chris here. On your -- the second part of your question around development. Look, the development program sizing is a function of relative returns, yields coming out of the development program compared to capital market conditions and cost of capital currently. As Bryan was talking about, right now, one of the larger drivers to the current yield profile is market rent growth. The other side of the equation in terms of construction. The teams have done a fantastic job controlling costs throughout the development program. I forget if we mentioned this data already. But if you look at the hard vertical construction costs to develop a home in 2026, they're essentially flat to even modestly down 2020 -- sorry, 2025 compared to 2024, which is fantastic, right? But ultimately, sizing in the development program is a function of relative returns and yields compared to capital market conditions and cost of capital and alternative uses of that capital and freeing up some extra capacity for repurchases like you've already seen us be active on.

Our next question comes from the line of Buck Horne with Raymond James.

Thanks for the followup. Appreciate the time. Wanted to talk about the dispositions that were executed in not only the fourth quarter just year-to-date? Just thinking through the -- what you've been able to sell with the, it looks like net proceeds were just a shade under $300,000 per house. Most of your markets median resale prices are probably closer to $400,000, how would you characterize kind of the tier of the dispositions that you're selling? Are these houses typically lower quartile or the middle of the road? Or are they fairly representative of the value of the homes in the portfolio? How should investors think about that?

Yes. Thanks, Buck. This is Bryan. The typical property that we're disposing of that we're selling really is a noncore asset. And in many cases, it's maybe not the location that we want or there are other characteristics that, that just make it have a different growth profile to the rest of the assets. So I think it's fair to say that this average sales price would be lower for that cohort than the rest of our -- of our homes, especially the new homes that we're delivering on the development side, which are superior quality and location. But the #1 reason for disposition for us is location. A lot of it is the fact that we finally getting access to homes that we acquired via consolidation in the past, many of which were subsequently securitized. So we're getting access to some product that might be a little bit -- maybe a lower level than what's typical across our portfolio.

Our next question comes from the line of Brad Heffern with RBC Capital Markets.

Thanks for taking the followup. Chris, just given all the political noise, do you have an elevated level of advocacy costs or anything like that, that are in G&A and that are having an impact on the guide? .

Yes. Good question. I appreciate you asking. As everyone knows, we started investing into our own government affairs teams, department, resources and initiatives years ago at this point. And so there's already just a structural component of our cost structure represented by government affairs and advocacy-related costs. . Again, we're expecting to incur those in 2026. Each year, those dollars and resources are directed a little bit differently. Obviously, this year, those will be directed towards the current matter at hand. The right way to think about it is a little bit under $0.01 or so is what just regularly run through our numbers each year. And then as we progress throughout the course of this year to the extent that those numbers change, we need more or what not difficult to crystal ball that at this point. But to the extent that those numbers change, we will make sure that we call them out separately. So everyone can clearly understand those dollars separate and apart from the run rate cost structure of the business.

Our next question comes from the line of Steve Sakwa with Evercore ISI.

I just wanted to follow up on the dispositions. What constraints, I guess, outside of tax issues that you have around dispositions, meaning you want certain size of homes or certain scale in the market. So to what extent are your dispositions limited by you wanting to have a good footprint in each market as you think about kind of the disconnect between kind of the sales values and kind of where the stocks trading.

Yes, Steve, Chris here. I can start that one. Look, there's a number of different perspectives that we need to think about dispositions through tax planning is definitely one of them. The other piece, like I was talking about earlier is just the natural timing governor in terms of how many homes can be sold in any one given year. . Considering how much collateral has been freed up from our securitizations like we were talking about. We are of the view that there's a pretty good runway of disposition candidates ahead of us. But the natural governor there will be the sheer volume of those that can be sold in any one given year, given the fact that we need to let leases roll, residents moved out, then homes can go into the market. At that point, they move quickly. But obviously, leases need to roll first. That's the main governor in consideration. We're thinking about the amount of volume that can be done in any one given year.

Steve, this is Bryan. Further to your question on market sizing, our operating platform has proven to be very efficient at different sizes. What we're doing is we're looking at these houses at an individual level and finding the ones that are noncore, have different growth prospects than then we could find on the development program as an example. We're able to strategically prune these houses and then reinvest them in areas with better long-term growth.

There are no further questions. I'd like to pass the call back over to management for any closing remarks.

I'd like to thank everyone for your time today. We appreciate the continued interest in AMH and look forward to speaking with you next quarter.