What changed in this filing

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Item 1A. Risk Factors

2026-02-20 compared with 2025-02-21 · 49 added, 61 removed, 338 unchanged (25% of the section changed)

20 unchanged sentences

Property taxes are a significant component of our property operating expenses.

We have faced and expect to continue to face significant increases in property taxes.

If property taxes, over which we have no control, continue to increase at recent rates, and if we are unable to increase rental rates to offset such increased expense, it would adversely affect our operating results, including our net operating income.

If property taxes, over which we have no control, were to increase significantly in the future, and if we are unable to increase rental rates to offset such increased expense, it would adversely affect our operating results, including our net operating income.

The loss of key management and staff could materially and adversely affect us.

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In addition, the costs of retaining skilled management and staff could reduce our profitability.

New and proposed laws and regulations restricting institutional ownership of single-family homes could impede our ability to operate or grow our business.

Various legislative and regulatory bodies, including at the federal, state and local level, have been focused on the shortage of residential housing in the U.S.

and significant increases in the cost of housing.

Some states and local jurisdictions have passed or proposed regulations (i) imposing prohibitions or limitations on corporate entities purchasing and renting single-family homes, (ii) restricting developers from selling single-family homes to corporate entities intending to rent such homes, (iii) imposing tax and financial disincentives on corporate ownership of single-family homes for rent, and (iv) imposing adverse zoning restrictions on corporate ownership of single-family homes for rent.

Similar restrictions are being considered at the federal level.

We expect this trend to continue given the current political climate.

Any such laws or regulations could impose significant costs, could require that we suspend or limit property acquisitions or otherwise modify or cease existing business practices or divest properties, could restrict the locations where we can operate our business, and could adversely impact our tax profile, including our status as a REIT.

Our investments are, and are expected to continue to be, concentrated in single-family properties and we have a significant number of properties in certain geographic markets, which exposes us to significant risks if there are adverse conditions in our sector or our key markets.

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In addition, our strategy is to concentrate our properties in select geographic markets that we believe favor future growth in rents and valuations.

For example, 58.0% of our operating properties are located in Atlanta, GA, Charlotte, NC, Dallas-Fort Worth, TX, Nashville, TN, Phoenix, AZ, Jacksonville, FL, Indianapolis, IN, Tampa, FL, Las Vegas, NV and Houston, TX.

For example, 57.9% of our operating properties are located in Atlanta, GA, Charlotte, NC, Dallas-Fort Worth, TX, Nashville, TN, Jacksonville, FL, Phoenix, AZ, Indianapolis, IN, Tampa, FL, Las Vegas, NV and Houston, TX.

A downturn or slowdown in the rental demand for single-family housing generally, or in our target markets specifically, caused by adverse economic, regulatory or environmental conditions, or other events, would have a greater impact on our operating results than if we had more diversified investments.

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We may not be able to effectively control the timing and costs relating to the renovation of properties, which may adversely affect our operating results and our ability to make distributions.

Nearly all of our properties acquired through traditional channels require some level of renovation immediately upon their acquisition or in the future following expiration of a lease or otherwise.

We may acquire properties that we plan to renovate extensively.

We also may acquire properties that we expect to be in good condition only to discover unforeseen defects that require extensive renovation and capital expenditures.

To the extent properties are leased to existing tenants, renovations may be postponed until the tenant vacates the premises, and we will pay the costs of renovating.

In addition, from time to time, in order to reposition properties in the rental market, we will be required to make ongoing capital improvements and replacements and perform significant renovations and repairs that tenant deposits and insurance may not cover.

From time to time, in order to reposition properties in the rental market, we will be required to make ongoing capital improvements and replacements and perform significant renovations and repairs that tenant deposits and insurance may not cover.

Our properties also have infrastructure and appliances of varying ages and conditions.

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If our assumptions regarding the costs or timing of renovation and maintenance across our properties prove to be materially inaccurate, our operating results may be adversely affected.

We face significant competition for acquisitions of our target properties, which may limit our strategic opportunities and increase the cost to acquire those properties.

We face significant competition for acquisition opportunities in our target markets from other large real estate investors, including developers and private equity firms, some of which may have greater financial resources and a lower cost of capital than we do.

We also compete with private home buyers and small-scale investors.

Several REITs and other funds have deployed, and others may in the future deploy, significant amounts of capital to purchase single-family homes and may have investment objectives that compete with ours, including in our target markets.

This activity has adversely impacted our level of purchases in certain of our target markets.

If more well-capitalized companies pursue our business strategy, competition may intensify and the purchase price of potential acquisitions may be significantly elevated, or we may be unable to acquire properties on desirable terms or at all.

Our success depends on us attracting and retaining quality tenants.

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Our success in expanding our development activities depends in large part on our ability to acquire land in our target markets that is suitable for residential homebuilding and meets our land investment criteria.

There is strong competition among homebuilders for land that is suitable for residential development.

In the past, there has been strong competition among homebuilders for land that is suitable for residential development.

The future availability of finished and partially finished developed lots and undeveloped land that meet our internal criteria depends on a number of factors outside our control, including land availability, competition with other homebuilders and land buyers for desirable property, inflation in land prices, zoning, allowable housing density, and other regulatory requirements.

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These attacks may also originate from persons inside our organization and persons/vendors with access to our systems.

information technology networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations.

Our information technology networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations.

Even the most well-protected information systems remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected, and, in fact, may not be detected.

Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures and thus it is impossible for us to entirely mitigate this risk.

Although we have implemented a variety of security measures intended to protect the confidentiality and security of this information (refer to Item 1C.

Although we have implemented a variety of security measures intended to protect the confidentiality and security of this information (refer to Part I, “Item 1C.

Cybersecurity” in this report for more information about our cybersecurity risk management and governance) and also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches, there can be no assurance that these measures will prevent a cybersecurity incident or that our cyber risk insurance coverage will be sufficient in the event of a cyber-attack.

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Disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our officers and/or trustees from focusing their time and effort on our business.

Consequently, actions by, or disputes with, our partners might result in subjecting properties owned by the partnership or joint venture to additional risk.

addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.

Consequently, actions by, or

disputes with, our partners might result in subjecting properties owned by the partnership or joint venture to additional risk.

In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.

In addition, we may not be able to close joint ventures on the anticipated schedule or at all.

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While we intend to vigorously defend any non-meritorious action or challenge, we cannot assure you that we will not be subject to expenses and losses that may adversely affect our operating results.

New laws and regulations could impede our ability to operate or grow our business.

We may be subject to or impacted by new laws and regulations, including zoning requirements, affordability mandates, tariffs and immigration restrictions, that could impede our ability to operate or grow our business, including by restricting institutional ownership of single-family homes.

Any such laws or regulations could impose significant costs, could require that we modify or cease existing business practices or divest properties, and could restrict the locations where we can operate our business.

Government investigations or legal proceedings brought by governmental authorities may result in significant costs and expenses and reputational harm and may divert resources from our operations.

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Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”

Our revolving credit facility, unsecured senior notes and securitizations contain financial and operating covenants that could restrict our business and investment activities.

Our revolving credit facility, unsecured senior notes and securitizations contain financial and operating covenants, such as debt ratios, minimum liquidity, unencumbered asset value, minimum debt service coverage ratio, and other limitations that may restrict our ability to make distributions or other payments to the Company’s shareholders and the Operating Partnership’s ability to make distributions on its OP units and may restrict our investment activities.

Our securitizations require, among other things, that a cash management account controlled by the lender collect all rents and cash generated by the properties securing the portfolio.

Upon the occurrence of an event of default or failure to satisfy the required minimum debt yield or debt service coverage ratio, the lender may apply any excess cash as the lender elects, including prepayment of principal and amounts due under the loans.

Our revolving credit facility and unsecured senior notes contain financial and operating covenants that could restrict our business and investment activities.

Our revolving credit facility and unsecured senior notes contain financial and operating covenants, such as debt ratios, minimum liquidity, unencumbered asset value, minimum debt service coverage ratio, and other limitations that may restrict our ability to make distributions or other payments to the Company’s shareholders and the Operating Partnership’s ability to make distributions on its OP units and may restrict our investment activities.

These covenants may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders.

Further, such restrictions could adversely impact our ability to maintain our qualification as a REIT for tax purposes.

Failure to meet our financial covenants could result from, among other things, changes in our results of operations, the incurrence of additional debt, substantial impairments in the

value of our properties or changes in general economic conditions.

Failure to meet our financial covenants could result from, among other things, changes in our results of operations, the incurrence of additional debt, substantial impairments in the value of our properties or changes in general economic conditions.

If we violate covenants in our financing arrangements, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms or at all.

Pandemics and other public health emergencies could have a material adverse effect on our business, results of operations, cash flows, and financial condition.

A pandemic, such as the COVID-19 pandemic, or similar public health emergencies could negatively impact the global economy, disrupt financial markets and international trade, and result in varying unemployment levels, all of which could negatively impact our business, results of operations, cash flows, and financial condition.

These types of events could lead governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to mitigate the issue, including restrictions on freedom of movement and business operations such as issuing guidelines, travel bans, border closings, business closures, quarantine orders, and orders not allowing the collection of rents, rent increases, or eviction of non-paying tenants.

A pandemic and other public health emergencies could negatively impact the global economy, disrupt financial markets and international trade, and result in varying unemployment levels, all of which could negatively impact our business, results of operations, cash flows, and financial condition.

These types of events could lead governments and other authorities around the world,

including federal, state and local authorities in the United States, to impose measures intended to mitigate the issue, including restrictions on freedom of movement and business operations such as issuing guidelines, travel bans, border closings, business closures, quarantine orders, and orders not allowing the collection of rents, rent increases, or eviction of non-paying tenants.

Our use of artificial intelligence could expose us to various risks.

We have begun to utilize AI technologies in various aspects of our business.

AI technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks.

In addition, we may be subject to increasing regulations related to our use of AI, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.

We have begun to utilize AI technologies in various aspects of our business, including applications for data analysis, software development, customer communication, employee productivity and cybersecurity monitoring.

Prior to our deployment of AI technologies, such technologies are subject to an AI governance framework requiring the identification of risks associated with each use of each AI application.

Based on an initial risk classification of an AI use case, a committee is convened comprising members from the business, legal, IT and cybersecurity teams, which assesses the risks and benefits of the use case and approves or disapproves the application for use within the business.

Once approved, use cases are inventoried and periodically reviewed for productivity and compliance purposes.

Even with this governance framework, AI technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks.

In addition, we may be subject to increased regulations related to our use of AI, including regulations related to privacy, data security and intellectual property rights, which could expose us to legal risks.

Risks Related to the Real Estate Industry

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A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties.

In connection with the acquisition, development and ownership of our properties, we may be exposed to such costs.

In connection with the development, acquisition and ownership of our properties, we may be exposed to such costs.

The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially adversely affect our business, financial condition, results of operations and, consequently, amounts available for distribution to shareholders and unitholders.

9 unchanged sentences

Additionally, landlord-tenant laws may impose legal duties to assist tenants in relocating to new housing, or restrict the landlord’s ability to recover certain costs or charge tenants for damage caused by them.

Because such laws vary by state and locality, we and any regional and local property managers we hire will need to take all appropriate steps to comply with

all applicable landlord tenant laws, and we will need to incur supervisory and legal expenses to ensure such compliance.

Because such laws vary by state and locality, we and any regional and local property managers we hire will need to take all appropriate steps to comply with all applicable landlord tenant laws, and we will need to incur supervisory and legal expenses to ensure such compliance.

To the extent that we do not comply with state or local laws, we may be subjected to civil litigation filed by individuals, in class actions or by state or local law enforcement.

1 unchanged sentence

Furthermore, rent control laws or other regulations that may limit our ability to increase rental rates may affect our rental income.

If rent controls unexpectedly became applicable to certain of our properties, our revenue from and the value of such properties could be adversely affected.

If rent controls unexpectedly became applicable to certain of our properties, our revenue

from and the value of such properties could be adversely affected.

We believe these types of measures will continue given increasing political support.

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If they are successful in any such endeavors, they could directly limit and constrain our operations, adversely impact our business and may impose on us significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions.

The direct and indirect impacts of climate change may adversely affect our business.

We have been and may continue to be adversely impacted by the direct consequences of climate change, such as property damage due to increases in the frequency, duration and severity of extreme weather events, such as hurricanes and floods.

Similarly, changes in precipitation levels could lead to increases in droughts or wildfires that could adversely impact demand for our communities.

The increases in property damage due to these events have also contributed to the increases in costs we have faced in property insurance.

The ongoing transition to non-carbon based energy also presents certain risks for us and our tenants, including macroeconomic risks related to high energy costs and energy shortages, among other things.

In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could result in delays and increased costs to complete our development projects and increased capital expenditures on our existing properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, and, as a result, adversely impact our financial results and operations.

We also face investor-related climate risks.

Investors are increasingly taking into account environmental, social, and governance factors, including climate risks, in determining whether to invest in companies.

Our reputation and investor relationships could be damaged as a result of our involvement with activities perceived to be causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.

Extreme weather events can adversely affect our business.

We have been and may continue to be adversely impacted by extreme weather events, such as hurricanes, floods, droughts and wildfires.

In addition to direct costs relating to these events, including property damage and delays in leasing or development projects, the increases in property damage due to these events have also contributed to the increases in costs we have faced in property insurance.

It would be difficult for us to quickly generate cash from sales of our properties.

9 unchanged sentences

Assuming the conversion of all of the Class A units held by these individuals into Class A common shares, they would own approximately 24.9% of the voting power of the Company based on the Company’s outstanding common shares as of December 31, 2025.

The Hughes Family and affiliates own all of the Class B common shares and,

together with the Class A common shares they own, hold 19.1% of the voting power of the Company.

The Hughes Family and affiliates own all of the Class B common shares and, together with the Class A common shares they own, hold 15.4% of the voting power of the Company.

Our senior management, trustees and affiliates have and are expected to continue to have the ability to significantly influence all matters submitted to a vote of the Company’s shareholders, including electing trustees, changing the Company’s charter documents and approving extraordinary transactions, such as mergers.

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The Company’s board of trustees may, without shareholder approval, amend its declaration of trust to increase or decrease the aggregate number of the Company’s shares or the number of shares of any class or series that the Company has the authority to issue and to classify or reclassify any unissued common or preferred shares, and set the preferences, rights and other terms of the classified or reclassified shares.

As a result, the Company’s board of trustees may authorize the issuance of additional shares or establish a series of common or preferred shares that may delay or prevent a change in control of the Company, including transactions at a premium over the market price of the Company’s shares, even if the Company’s shareholders believe that a change in control is in their interest.

over the market price of the Company’s shares, even if the Company’s shareholders believe that a change in control is in their interest.

These provisions, along with the restrictions on ownership and transfer contained in the Company’s declaration of trust and certain provisions of Maryland law, could discourage unsolicited acquisition proposals or make it more difficult for a third-party to gain control of the Company, which could adversely affect the market price of the Company’s securities.

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We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT and that our current organization and proposed method of operation will enable us to continue to qualify as a REIT.

we have not requested and do not intend to request a ruling from the Internal Revenue Service (the “IRS”) that we qualify as a REIT.

However, we have not requested and do not intend to request a ruling from the Internal Revenue Service (the “IRS”) that we qualify as a REIT.

As a result, we cannot assure you that we qualify or that we will remain qualified as a REIT.

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In addition, we may have to sell numerous properties to a single or a few purchasers, which could cause us to be less profitable than would be the case if we sold properties on a property-by-property basis.

For example, if we decide to acquire properties

opportunistically to renovate in anticipation of immediate resale, we will need to conduct that activity through our TRS to avoid the 100% prohibited transactions tax.

For example, if we decide to acquire properties opportunistically to renovate in anticipation of immediate resale, we will need to conduct that activity through our TRS to avoid the 100% prohibited transactions tax.

The 100% tax described above may limit our ability to enter into transactions that would otherwise be beneficial to us.

For example, if circumstances make it not profitable or otherwise uneconomical for us to remain in certain states or geographical markets, the 100% tax could delay our ability to exit those states or markets by selling our assets in those states or markets other than through a TRS, which could harm our operating profits and the trading price of our shares.

In addition, in order to avoid the prohibited transactions tax, we may be required to limit the structures we utilize for our securitization transactions, even though the sales or structures might otherwise be beneficial to us.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

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As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous or implement those hedges through a TRS.

This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear.

This could increase the cost of our hedging activities

because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear.

In addition, losses in our TRS may only be carried forward and may only be deducted against 80% of future taxable income in the TRS.

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To satisfy the REIT distribution requirements, we may be forced to take certain actions to raise funds if we have insufficient cash flow which could materially and adversely affect us and the trading price of our common or preferred shares.

To qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, computed without regard to the dividends paid deduction and any net capital gains, and we will be subject to corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income each year, computed without regard to the dividends paid deduction.

To qualify as a REIT, we generally must distribute to our shareholders at least 90% of our REIT taxable income each year, computed without regard to the dividends paid deduction and any net capital gains, and we will be subject to corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income each year, computed without regard to the dividends paid deduction.

In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

In order to satisfy these distribution requirements to maintain our REIT status and avoid the payment of income and excise taxes, we may need to take certain actions to raise funds if we have insufficient cash flow, such as borrowing funds, raising additional equity capital, selling a portion of our assets or finding another alternative to make distributions to our stockholders.

We may be forced to take those actions even if the then-prevailing market conditions are not favorable for those actions.

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Our access to third-party sources of capital depends on a number of factors, including the market’s perception of our growth potential, our current debt levels, the market price of our common or preferred shares, and our current and potential future earnings.

We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could materially and adversely affect us and the trading price of our common or preferred shares.

We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may

cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could materially and adversely affect us and the trading price of our common or preferred shares.

If a transaction intended to qualify as a Section 1031 tax-deferred exchange is later determined to be taxable or if we are unable to identify and complete the acquisition of a suitable replacement property to effect such a Section 1031 exchange, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of real properties on a tax-deferred basis.

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In such cases, our taxable income would increase as would the amount of distributions we are required to make to satisfy our REIT distribution requirements and to avoid the imposition of an entity-level tax.

This could increase the dividend income to our stockholders by reducing any return of capital they receive.

This could increase the dividend income to our shareholders by reducing any return of capital they receive.

In some circumstances, we may be required to pay additional dividends or, in lieu of that, corporate income tax, possibly including interest and penalties.

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Any legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect our taxation or our shareholders.

We urge you to consult with your tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our stock.

Although REITs generally receive certain tax advantages compared to entities taxed as “C” corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S.

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If we issue preferred shares in a reopening at a price that exceeds the redemption price of such preferred shares by more than a de minimis amount, those shares could be considered to be “fast-pay stock” under Treasury Regulations promulgated under Section 7701(l) of the Code (the “Fast-Pay Stock Regulations”).

Under the Fast-Pay Stock Regulations, if stock of a REIT is structured so that dividends paid with respect to the stock are economically (in

whole or in part) a return of the stockholder’s investment (rather than a return on the stockholder’s investment), the stock is characterized as “fast-pay stock,” resulting in the adverse tax consequences described below.

Under the Fast-Pay Stock Regulations, if stock of a REIT is structured so that dividends paid with respect to the stock are economically (in whole or in part) a return of the shareholder’s investment (rather than a return on the shareholder’s investment), the stock is characterized as “fast-pay stock,” resulting in the adverse tax consequences described below.

Under the Fast-Pay Stock Regulations, unless clearly demonstrated otherwise, our preferred shares are presumed to be fast-pay stock if they are issued for an amount that exceeds (by more than a de minimis amount, as determined under certain other Treasury Regulations) the amount at which the shareholder can be compelled to dispose of the shares (“Fast-Pay Stock”).

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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 1A. Risk Factors