What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-02-25 · 62 added, 56 removed, 198 unchanged (37% of the section changed)

American Homes 4 Rent (“AH4R”) is an internally managed Maryland real estate investment trust (“REIT”) formed on October 19, 2012.

American Homes 4 Rent (“AMH” or the “General Partner”) is an internally managed Maryland real estate investment trust (“REIT”) formed on October 19, 2012.

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.

References to the “Company,” “we,” “our,” and “us” mean collectively, AH4R, the Operating Partnership and those entities/subsidiaries owned or controlled by AH4R and/or the Operating Partnership.

We are focused on acquiring, developing, renovating, leasing and operating single-family homes as rental properties.

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.

AH4R is the general partner of, and as of December 31, 2021 owned approximately 86.8% of the common partnership interest in, the Operating Partnership.

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, AH4R has exclusive control of the Operating Partnership’s day-to-day management.

The Company’s management operates AH4R and the Operating Partnership as one business, and the management of AH4R consists of the same members as the management of the Operating Partnership.

AH4R’s primary function is acting as the general partner of the Operating Partnership.

The only material asset of AH4R is its partnership interest in the Operating Partnership.

As a result, AH4R generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing certain debt of the Operating Partnership.

AH4R itself is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership.

As the sole general partner of the Operating Partnership, AMH has exclusive control of the Operating Partnership’s day-to-day management.

The Company’s management operates AMH and the Operating Partnership as one business, and the management of AMH consists of the same members as the management of the Operating Partnership.

AMH’s primary function is acting as the general partner of the Operating Partnership.

The only material asset of AMH is its partnership interest in the Operating Partnership.

As a result, AMH generally does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing certain debt of the Operating Partnership.

AMH itself is not directly obligated under any indebtedness, but guarantees some of the debt of the Operating Partnership.

The Operating Partnership owns substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures, either directly or through its subsidiaries, conducts the operations of the Company’s business and is structured as a limited partnership with no publicly traded equity.

One difference between the Company and the Operating Partnership is $25.7 million of asset-backed securitization certificates issued by the Operating Partnership and purchased by AH4R.

One difference between the Company and the Operating Partnership is $25.7 million of asset-backed securitization certificates issued by the Operating Partnership and purchased by AMH.

The asset-backed securitization certificates are recorded as an asset-backed securitization certificates receivable by the Company and as an amount due from affiliates by the Operating Partnership.

AH4R contributes all net proceeds from its various equity offerings to the Operating Partnership.

In return for those contributions, AH4R receives Operating Partnership units (“OP units”) equal to the number of shares it has issued in the equity offering.

AMH contributes all net proceeds from its various equity offerings to the Operating Partnership.

In return for those contributions, AMH receives Operating Partnership units (“OP units”) equal to the number of shares it has issued in the equity offering.

Based on the terms of the Agreement of Limited Partnership of the Operating Partnership, as amended, OP units can be exchanged for shares on a one-for-one basis.

Except for net proceeds from equity issuances by AH4R, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness or through the issuance of OP units.

As of December 31, 2021, the Company held 57,024 single-family properties in selected sub-markets of metropolitan statistical areas (“MSAs”) within 22 states, including 659 properties classified as held for sale, and 53,637, or 95.2%, of our total properties (excluding properties held for sale) were occupied.

Except for net proceeds from equity issuances by AMH, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness or through the issuance of OP units.

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.

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 believe we have become a leader in the single-family home rental industry by aggregating a geographically diversified portfolio of high-quality single-family homes and developing “American Homes 4 Rent” into a nationally recognized brand that is well-known for quality, value and tenant satisfaction and is well respected in our communities.

We believe we have become a leader in the single-family home rental industry by aggregating a geographically diversified portfolio of high-quality single-family homes and developing into a nationally recognized brand that is well-known for quality, value and resident satisfaction and is well respected in our communities.

Our goal is to simplify the experience of leasing a home and deliver peace of mind to households across the country.

Our investments may be made directly or through investment vehicles with third-party investors.

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federal income tax on our income.

Instead, each of the Operating Partnership’s partners, including AH4R, is allocated, and may be required to pay tax with respect to, its share of the Operating Partnership’s income.

Instead, each of the Operating Partnership’s partners, including AMH, is allocated, and may be required to pay tax with respect to, its share of the Operating Partnership’s income.

As such, no provision for U.S.

federal income taxes has been included for the Operating Partnership.

Our principal executive office is located at 23975 Park Sorrento, Suite 300, Calabasas, California 91302.

Our principal executive office is located at 280 Pilot Road, Las Vegas, Nevada 89119.

Our main telephone number is (702) 847-7800.

Our website address is www.americanhomes4rent.com.

Our website address is www.amh.com.

The information contained on our website is not part of or incorporated by reference in this report.

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 operating single-family homes as rental properties.

We believe we can achieve this objective by pursuing the following strategies:

• Employ a disciplined property acquisition process.

We have an established acquisition and renovation platform to source properties through a variety of traditional acquisition channels, including broker sales (primarily multiple listing service (“MLS”)) and bulk portfolio sales.

We have an established acquisition and renovation platform to source properties through a variety of traditional acquisition channels, including broker sales via the multiple listing service (“MLS”) and bulk portfolio sales.

We focus on homes with a number of key property characteristics, including:

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We monitor and manage the diversification of our portfolio in order to reduce the risks associated with adverse developments affecting a particular market.

We currently are focusing on developing and acquiring single-family homes in selected sub-markets of MSAs.

We currently are focusing on developing and acquiring single-family homes in select submarkets of MSAs.

We continually evaluate potential new markets where we may invest and establish operations as opportunities emerge.

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• Establish a nationally recognized brand.

We continue to strive toward establishing “American Homes 4 Rent” as a nationally recognized brand because we believe that establishing a brand well-known for quality, value and tenant satisfaction will help attract and retain tenants and qualified personnel, as well as support higher rental rates.

We recently unveiled a new corporate brand identity in January 2023.

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.

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.

We have established a toll-free number serviced by our call center and a website to provide a direct portal to reach potential tenants and to drive our brand presence.

We have established a toll-free number serviced by our call center and a website to provide a

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.

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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 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.

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• Property Development.

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 selected sub-markets of MSAs.

Rental homes developed through our AMH Development Program involve substantial up-front costs, time to acquire and develop land, time to build the rental home, and time to lease the rental home before the home generates income.

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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.

These land banking arrangements generally require us to pay non-refundable deposits, which can vary by transaction, and provide us the option to acquire the land or finished lots, typically at pre-determined prices.

In certain arrangements, we make improvements to the underlying land during the option period.

• Property Acquisition.

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Target markets are selected based on steady population growth and strong rental demand, providing for attractive potential yields and potential capital appreciation.

Our target markets currently include selected sub-markets of MSAs.

Within our target markets, our system allows us to screen broadly and rapidly for potential acquisitions and is designed to identify highly targeted sub-markets at the neighborhood and street levels.

Our target markets currently include select submarkets of MSAs.

Within our target markets, our system allows us to screen broadly and rapidly for potential acquisitions and is designed to identify highly targeted submarkets at the neighborhood and street levels.

We have and will continue to source property acquisition opportunities through traditional channels, including broker sales (including traditional MLS sales) and portfolio (or bulk) sales.

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Any resulting work is presented for bid to approved contractors, which we maintain in each of our markets.

We have negotiated substantial quantity discounts in each of our markets for products that we regularly use during the renovation process, such as paint, window blinds and flooring.

We have negotiated quantity discounts in each of our markets for products that we regularly use during the renovation process, such as paint, window blinds and flooring.

By establishing and enforcing best practices and quality consistency, we believe that we are able to reduce the costs of both materials and labor.

We have found that a rapid response to renovating our homes improves our relationship with the local communities and homeowners’ associations (“HOAs”), enhancing the “American Homes 4 Rent” brand recognition and loyalty.

On average, it has taken approximately 20 to 90 days to complete the renovation process, which will fluctuate based on our overall acquisition volume as well as availability of construction labor and materials.

We have found that a rapid response to renovating our homes improves our relationship with the local communities and homeowners’ associations (“HOAs”), enhancing the “AMH” brand recognition and loyalty.

On average, it has taken

approximately 20 to 90 days to complete the renovation process, which will fluctuate based on our overall acquisition volume as well as availability of construction labor and materials.

Properties are typically leased approximately 20 to 40 days after completing the renovation process.

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• Property Management.

We have developed an extensive in-house property management infrastructure, with modern systems, dedicated personnel and local offices.

We directly manage all of our properties without the engagement of a third-party manager.

We have developed an extensive internal property management infrastructure, with modern systems, dedicated personnel and local offices.

We directly manage all of our properties, including those held in our unconsolidated joint ventures, without the engagement of a third-party manager.

• Marketing and Leasing.

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Substantially all of our homes are shown using technology-driven “self-guided” showings.

Prospective tenants may submit an application through our website or in person.

We evaluate prospective tenants in a standardized manner.

Prospective tenants are evaluated in a standardized manner.

Our application and evaluation process includes obtaining appropriate identification, a thorough evaluation of credit and household income and a review of the applicant’s rental history.

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On average, household credit scores and income to rent ratios of approved applicants are significantly in excess of our minimum requirements.

We are generally able to complete our application and evaluation process the same day the prospective tenant submits a complete rental application.

We collect the majority of rent electronically via Automated Clearing House transfer or direct debit to the tenant’s checking account via a secure tenant portal on our website.

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However, our insurance coverage is subject to substantial deductibles and carve-outs, and we will be self-insured up to the amount of such deductibles and carve-outs.

In 2021, we formed a wholly owned captive insurance company, American Dream Insurance, LLC, which provides general liability insurance coverage for losses below the deductible under our third-party liability insurance policy.

We created American Dream Insurance, LLC as part of our overall risk management program and to stabilize our insurance costs, manage exposure and recoup expenses through the functions of the captive program.

We have a wholly owned captive insurance company, American Dream Insurance, LLC, which provides general liability insurance coverage for losses below the deductible under our third-party liability insurance policy.

American Dream Insurance, LLC as part of our overall risk management program and to stabilize our insurance costs, manage exposure and recoup expenses through the functions of the captive program.

See “Risk Factors—Risks Related to Our Business—We are self-insured against many potential losses, and uninsured or underinsured losses relating to properties may adversely affect our financial condition, operating results, cash flows and ability to make distributions” and “Risk Factors—Risks Related to the Real Estate Industry—Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results.”

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However, we believe that our acquisition platform, our extensive in-house property management infrastructure and market knowledge in markets that meet our selection criteria provide us with competitive advantages.

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 a result of the COVID-19 pandemic, the work-from-home proliferation has driven further demand as employees have less need to live near city centers and also desire larger living spaces to accommodate working from home.

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.

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.

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.

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 properties are subject to various covenants, laws and ordinances, and certain of our properties are also subject to the rules of the various HOAs where such properties are located.

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Our properties are in substantial compliance with the FHA and other regulations.

Eviction Moratoria

In response to the COVID-19 pandemic, federal and state governmental authorities, including the Centers for Disease Control and Prevention implemented eviction moratoria that temporarily halted residential evictions of qualifying tenants for nonpayment of rent and restricted certain rent collection practices during parts of 2020 and 2021.

These restrictions have generally been lifted or expired and we believe that, while in effect, we were in compliance with all applicable restrictions.

However, similar restrictions may be imposed in the future in response to COVID-19, a different pandemic or for other reasons such as a natural disaster.

Environmental Matters

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See “Risk Factors—Risks Related to Our Business—Contingent or unknown liabilities could adversely affect our financial condition, cash flows and operating results” and “Risk Factors—Risks Related to the Real Estate Industry—Environmentally hazardous conditions may adversely affect our financial condition, cash flows and operating results.”

Residential Housing Legislation and Regulations

Various legislative and regulatory bodies have been focused on the shortage of residential housing in the U.S.

and significant increases in the cost of housing.

We expect vigorous and continuing political debate and discussion, which we intend to participate in, with respect to residential housing laws and regulations.

There has been vigorous and continuing political debate and discussion, which we participate in, with respect to

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.

REIT Qualification

AH4R has elected to be taxed as a REIT commencing with our first taxable year ended December 31, 2012.

AMH has elected to be taxed as a REIT commencing with our first taxable year ended December 31, 2012.

Our qualification as a REIT, and maintenance of such qualification, depends upon our ability to meet, on a continuing basis, various complex requirements under the Internal Revenue Code of 1986, as amended (the “Code”), relating to, among other things, the sources of our gross income, the composition and values of our assets, our distributions to our shareholders and the concentration of ownership of our equity shares.

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Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they generally distribute annually at least 90% of their REIT taxable income, determined without regard to the dividends paid deduction and any net capital gains to their shareholders.

If AH4R fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, our income would be subject to U.S.

If AMH fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, our income would be subject to U.S.

federal income tax, and we would likely be precluded from qualifying for treatment as a REIT until the fifth calendar year following the year in which we fail to qualify.

Even if AH4R qualifies as a REIT, we may still be subject to certain U.S.

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.

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Human Capital Management

As of December 31, 2021, we have 1,538 dedicated personnel.

As of December 31, 2022, we had 1,794 dedicated personnel.

None of our personnel are covered by a collective bargaining agreement.

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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.

Partnering with a third-party engagement survey company, we also periodically survey all employees to measure and assess employee satisfaction.

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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 90 days of service.

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.

In 2022, our employees participated in 2,210 hours of total diversity, equity and inclusion training.

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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.

In response to the COVID-19 pandemic, we established protocols to keep our residents, employees and third-party contractors safe.

Our maintenance team has a process to ensure a property is safe to enter, and we also ensure our employees have appropriate personal protective equipment.

All field employees are outfitted with safety gloves, masks and sanitizer to ensure there is no cross-contamination between properties.

We believe that our business and related operating results will be impacted by seasonal factors throughout the year.

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Available Information

Our website address is www.americanhomes4rent.com.

Our website address is www.amh.com.

We make available free of charge on or through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file the report with or furnish it to the Securities and Exchange Commission (“SEC”).

This information is also available in print to any shareholder who requests it, with any such requests addressed to Investor Relations, American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302.

This information is also available in print to any shareholder who requests it, with any such requests addressed to Investor Relations, AMH, 280 Pilot Road, Las Vegas, Nevada 89119.

We also make available free of charge on our website our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and the charters of the Audit Committee, Human Capital and Compensation Committee and Nominating and Corporate Governance Committee of the Company’s board of trustees.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business