Invitation Homes Projects Lower Annual FFO Amid Rising Costs
U.S.-based Invitation Homes, a leading real estate investment trust (REIT), has forecast annual funds from operations (FFO) below Wall Street estimates on Wednesday. The company, which owns, leases, and operates single-family residential properties, is facing significant challenges due to rising operating and maintenance costs in an inflationary environment.
The REIT continues to see a significant impact from these increasing costs on its topline. CEO Dallas Tanner acknowledged the company's efforts to address these challenges, stating, “We will continue working constructively with policymakers to support broader housing affordability and availability.”
Invitation Homes, the largest U.S. landlord for single-family homes, expects core 2026 adjusted FFO per share to range from $1.60 to $1.68. The midpoint of this range, $1.64, is below analysts' average estimate of $1.97, according to data compiled by LSEG.
In the quarter ended December 31, same-store renewal rent grew 4.2% from the previous year. Blended rental growth, which combines both new lease and renewal rates, increased by 1.8%. These figures reflect the ongoing pressure on rental income due to higher operational costs.
Quarterly revenue for Invitation Homes increased by 4% from the previous year, reaching $685.3 million. However, the fourth-quarter adjusted FFO stood at 41 cents per share, falling short of analysts' estimates of 48 cents per share.
Despite these challenges, Invitation Homes remains committed to navigating the current economic landscape and continues to explore strategies to enhance its financial performance and support housing affordability. The company's proactive approach to policy engagement and operational efficiency will be crucial in mitigating the impact of rising costs and maintaining its position as a leading REIT in the U.S. single-family rental market.
