Podcast Summary: The Rent Roll with Jay Parsons

Episode #73: Rich Hill | 7 Takeaways From SFR REIT Calls + Finding Opportunities in Rental Housing
Date: February 26, 2026
Host: Jay Parsons
Guest: Rich Hill, Principal Asset Management

Episode Overview

In this episode, host Jay Parsons reviews the top seven takeaways from the recent Q4 2025 earnings calls of single-family rental (SFR) REITs, particularly AMH and Invitation Homes. The episode also features a deep-dive interview with Rich Hill, Global Head of Real Estate Research and Strategy at Principal Asset Management. Topics span SFR policy, the impact of proposed legislative bans, supply and demand pressures, investment strategies, and broader rental housing opportunities—including apartments, build-to-rent (BTR), student housing, and private credit.

Key Discussion Points & Insights

1. SFR REITs’ Response to Proposed Investor Bans

Timestamps: 02:20–11:15

• Context: President Trump’s proposed ban on large investors purchasing single-family homes is central, with both AMH and Invitation Homes breaking their public silence on the issue during their Q4 calls.

• Measured Tone: REITs adopt a cautious, non-aggressive public stance, emphasizing "wait and see" rather than public confrontation.

  • Quote (Invitation Homes, Dallas Tanner, 05:00):
    “I think it's a little too early to speculate on what we do or don't want to see from legislation … the industry is hoping for clarity.”

• Industry Advocacy: Behind-the-scenes engagement with policymakers is active; REITs highlight the need for supply and the role of SFR in housing diversity.

  • Quote (AMH, Brian Smith, 06:00):
    "We've been actively engaged with policymakers at the state, local and federal level... supply is not kept up with demand and supply solutions are continuing to be sought."

2. Heightened Emphasis on Selling Existing & Building New Homes

Timestamps: 11:20–16:00

• Strategic Shift: Both REITs highlight their strategies of being net sellers of existing homes and investing heavily in new development.

  • AMH Focus: Ground-up development over acquisitions—expecting 1,900 new homes delivered in 2026, with proceeds from dispositions to fund growth.
  • Invitation Homes: Acquisition of ResiBuilt, aiming for 1,000+ homes annually; expansion of in-house building capacity, especially in the Southeast.

• Favorable Math: Selling existing at low cap rates, redeploying capital for higher-yield new development.

  • Quote (AMH, Brian Smith, 13:30):
    "Selling homes at a cap rate in the high threes and redeploying into new development at yields in the fives... Not just PR, it's a win-win."

3. Emphasizing SFR’s Social Role & Busting Policy Myths

Timestamps: 16:05–19:45

• Counter to Narrative: Both firms challenge the idea that SFR is blocking homeownership, emphasizing affordability and access to quality neighborhoods.

  • Quote (AMH, Brian Smith, 17:00):
    “Our homes provide access to the same desirable neighborhoods and at a fraction of the estimated monthly cost of homeownership.”
  • Quote (Invitation Homes, Dallas Tanner, 18:00):
    “We are committed to providing well maintained, high quality homes... higher home prices and large upfront costs have put buying out of reach for many households.”

• Credit Building: Rent reporting programs help renters raise credit, facilitating future homeownership.

4. Slower Leasing & Supply Competition Impacting Rents

Timestamps: 19:50–25:50

• Winter Leasing: Q4 and early 2026 show slower-than-hoped leasing, even accounting for seasonal trends.
• Supply Pressures: Competition from new multifamily, BTR supply, and increased scattered-site rentals from accidental “mom and pop” landlords.
  • Quote (AMH, Brian Smith, 20:50):
    “Our prospects have more choice in the marketplace.”
  • Notable Markets: San Antonio (multifamily), Phoenix (BTR), Las Vegas (mom & pop).
  • Regional Strength: Midwest markets remain stronger due to less new supply.

5. Retention Remains High

Timestamps: 25:55–27:00

• Low Turnover: Cost of owning is much higher than renting; move-outs to homeownership are slow.
  • Turnover Statistics:
    • Invitation Homes: 22.8% turnover, >3 years average stay
    • AMH: 26.3% turnover (down 1.5 ppt YoY), 96.8% same-store occupancy

6. Measured Expectations for 2026

Timestamps: 27:05–29:45

• Muted Growth: Both REITs project lower revenue and NOI growth in 2026 compared to 2025, due mainly to supply pressures.

  • Invitation: Revenue growth 1.9% midpoint (vs. 4% actual in 2025); NOI growth down to 1.15%
  • AMH: Rev growth 2.25%; NOI growth 2%

• Jay’s Take:
  “The key storyline here is just the continued impact of supply of all types on rents.”

7. SFR REITs Buying Back Stock

Timestamps: 29:50–32:00

• Discount Opportunity: Shares trade at large discounts to net asset value (NAV).

  • Invitation Homes: 3.6M shares repurchased for $100M, more planned.

  • AMH: 8.4M shares repurchased (~2% of shares), will time repurchases patient with capital market uncertainty.

  • Quote (AMH, Chris Lau, 31:30):
    “While the stock price represents an attractive capital deployment opportunity ... we plan to take a patient approach to the timing of additional repurchases.”

Interview with Rich Hill: Rental Housing Investment Strategies

Timestamps: 34:39–65:21

Rich Hill’s Background

Timestamps: 34:39–36:19

• Grew up in a real estate family; roles in debt capital markets, research (debt, macro, equity), now overseeing research for Principal Asset Management ($100B platform).
  • Quote (Rich Hill, 35:10):
    “I tell people that I've had a little bit of a wandering but intentional path across commercial real estate ... now I'm responsible for overseeing research for public and private equity and debt.”

Macro View: 2026 Outlook—Why Rental Housing?

Timestamps: 36:58–39:45

• High Conviction Sectors: Housing (specifically rental) and data centers only sectors ranked “high conviction.”
• Key Framework: Real estate in a “K-shaped” recovery—top quartile assets doing well; bottom quartile struggling; need property-level selectivity.
• Mismatch, Not Undersupply: US housing problem is more about type/location mismatch than overall undersupply.

Buy Box Deep Dive:

Apartments

Timestamps: 40:03–43:25

• Selective on Class A: Concerned about oversupply in high-growth markets; prefers below-replacement cost assets where rent growth potential exists (e.g., Seattle).
• Bullish on Class B (Light Value-Add): Better locations, not oldest assets, income growth as primary driver.
  • Quote (Rich Hill, 42:43):
    “Net operating income growth matters because income is generally the primary driver of total returns across cycles.”

Single-Family Rental / Build-to-Rent

Timestamps: 43:30–45:35

• SFR by Choice: SFR is increasingly about lifestyle, not just necessity; institutionalization has legitimized the asset class.

  • Quote (Rich Hill, 44:28):
    “You don't necessarily have to own a home to have that American dream of a house, a yard, a picket fence… you can rent it and you've always been able to rent it.”

• Build-to-Rent is the Future: Institutional players moving toward BTR for efficiency and returns.

• Geographic Focus: Expanding beyond Sunbelt, Midwest and Northeast offering unexpected strength in rent growth.

Student Housing

Timestamps: 46:41–48:11

• Selective Amid Headwinds: Headline declines in enrollments/college numbers; but opportunity exists at growth schools and well-positioned, close-to-campus assets.
  • Quote (Rich Hill, 47:30):
    "The headlines with student housing are not very favorable ... But that does not mean every college is facing those pressures."

SFR Policy & Institutional Ownership

Timestamps: 48:54–51:13

• Institutional Share is Small: Only about 2–5% of the SFR market is institutionally owned.
• BTR over Scattered Site: Policy risk and operational complexity makes scattered site less attractive; BTR seen as sustainable future for institutional capital.
• Emotional vs Economic Buyers: Institutions act as sellers when math favors it; individuals buy for utility/family reasons.

REITs and Public vs Private Valuations

Timestamps: 51:44–56:22

• Persistent NAV Discounts: Growth (not discounts) is what public markets reward; NAV discounts may persist until growth expectations inflect.
  • Quote (Rich Hill, 51:44):
    “Public markets reward companies for their growth … discounts to NAV can persist for a long period of time.”
• Private vs Public Values: Private market can price future growth into current valuations more so than public markets, hence dislocation.

Private Credit’s Growing Appeal

Timestamps: 57:02–61:27

• Risk-Adjusted Returns: Private CRE credit attractive due to conservative LTVs and income-heavy returns, especially as capital values have reset.
• Loan Origination Outlook: 2026 expected to see higher volume; standards to loosen slightly from a high base.
• Even With Spread Compression, Returns Attractive: Income remains stable and “double-digit returns” possible in the right funds.

When Does LP Equity Return?

Timestamps: 61:27–63:21

• Equity Flowing Selectively: Starting to see LP equity interest return as fund selection becomes more nuanced. Top-quartile funds outperform even in mediocre headline years.
  • Example: 2025 Odyssey Index top quartile: 6% returns; bottom: negative.

Beyond Conventional Wisdom: The Power of Income in CRE

Timestamps: 63:51–65:21

• Duration of Cycles: CRE cycles (including income) last about 18 years; income return “smooths out” total return volatility and matters more than many investors appreciate.
  • Quote (Rich Hill, 64:30):
    “Not factoring in the coupon of a bond is like not counting income in commercial real estate.”

Notable Quotes & Memorable Moments

• Jay Parsons (On Policy Irony, 03:05):
  "It's uniting some unlikely bedfellows, the populist wings of both parties: the MAGA Republicans and progressive Democrats ... the intellectual hypocrisy of both sides."
• Rich Hill (On SFR Policy, 49:15):
  “Most single family rentals are owned by mom and pops ... it's your rich uncle in Kentucky that owns three homes and rents them out as an investment.”
• Rich Hill (On Investment Opportunity, 64:40):
  “I think we have just now entered into the recovery stage for private commercial real estate.”
• Jay Parsons (On Austin Rental Market, 1:06:47):
  “One in four Austin apartment units were built just in the last five years. That supply impact has yet to really mitigate.”

Timestamps for Major Segments

• Top 7 SFR REIT Takeaways: 02:20–32:00
• Rich Hill Interview: 34:39–65:21
• SFR Policy & REITs Discussion: 48:54–56:22
• Private Credit & Investment Flows: 57:02–63:21

Additional Charts and Trivia (Quick Hits)

• SFR REIT Market Share Trivia (41:30):
  SFR REITs own only about 0.16% (137,000 homes) out of 87.5 million US single-family homes.
• Good News Segment: Community Dad Partners use telehealth services—33% resident adoption, improving access for low-income renters.

Tone & Language

Jay Parsons maintains an analytical yet conversational tone, mixing economic insights with plain language, commentary, and data-driven myth-busting. Rich Hill brings a research-driven, nuanced analysis, occasionally getting “nerdy” in the details and modeling a pragmatic, “pick-your-spots” approach to rental housing investment.

Overall Takeaway

Rental housing (across SFR, BTR, apartments, and other sectors) continues to offer relative strength amid policy, supply, and macroeconomic uncertainty. Both REITs and institutional investors are doubling down on new development and selectivity, while emphasizing the unique structural role that rentals play for American households. Growth will be measured in the near term, but strategic investors can position to benefit as the next phase of the cycle plays out.