Invitation Homes Inc. (NYSE:INVH) Q3 2018 Earnings Conference Call Transcript
Nov 05, 2018 • 11:00 am ET
Good morning, and welcome to the Invitation Homes Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Greg Van Winkle, Senior Director of Investor Relations. Please go ahead, sir.
Greg Van Winkle
Thank you. Good morning, and thank you for joining us for our third quarter 2018 earnings conference call. On today's call from Invitation Homes are Dallas Tanner, Interim President and CIO; Ernie Freedman, CFO; and Charles Young, COO.
I'd like to point everyone to our third quarter 2018 earnings press release and supplemental information, which we may reference on today's call. This document can be found on the Investor Relations section of our website at www.invh.com.
(Forward-Looking Cautionary Statements)
During this call, we may also discuss certain non-GAAP financial measures. You can find additional information regarding these non-GAAP measures, including reconciliations of these measures with the most comparable GAAP measures, in our earnings release and supplemental information, which are available on the Investor Relations section of our website.
I'll now turn the call over to our Interim President and CIO, Dallas Tanner.
Thank you, Greg. We are pleased to report our seventh consecutive quarter of double-digit core FFO growth with core FFO per share in the third quarter increasing 21% year-over-year. Trailing 12 months' turnover reached its lowest level in our history as a public company at approximately 34% as residents continue to value the high-quality living experience and service we provide. This contributed to a 50 basis point year-over-year increase in same-store occupancy to 95.5% in the third quarter. The favorable supply and demand fundamentals we are experiencing in our market show no signs of abating with renewal rent growth of 4.8% in the third quarter and new lease rent growth consistent with prior year.
We also took a number of steps in the third quarter and October to improve the efficiency of our R&M platform. While we still have fine-tuning to do before next peak 4 quarter season, R&M expenses for the second half of 2018 are tracking in line with our expectations we revised midyear. However, we are experiencing some pressure on real estate taxes that we expect to impact our fourth quarter expenses unfavorably versus our prior expectations. Ernie will talk more about this later.
Before we get into the details of the quarter and expectations for the rest of the year, I want to step back because it's the bigger picture that makes us really excited about this business. We continue to see a multitude of opportunities creating a long runway for growth.
First is simply the fundamentals of supply and demand. In our select high growth markets, household formations in 2019 are forecast to grow at a rate of 1.9%, which is 90% greater than the U.S. average. There remains a shortage of housing supply to meet this demand and