Greetings and welcome to the American Homes 4 Rent First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Stephanie Heim. Please go ahead.

Good morning. Thank you for joining us for our first quarter 2017 earnings conference call. I'm here today with Dave Singelyn, Chief Executive Officer; Jack Corrigan, Chief Operating Officer; Diana Laing, Chief Financial Officer; and Chris Lau, Executive Vice President Finance of American Homes 4 Rent. At the outset, I need to advise you that this call may include forward-looking statements. All statements, other than statements of historical fact included in this conference call, are forward-looking statements that are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected in these statements. These risks and other factors that could adversely affect our business and future results are described in our press release and in our filings with the SEC. All forward-looking statements speak only as of today, May 05, 2017. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A reconciliation to GAAP with the non-GAAP financial measures we're providing on this call is included in our earnings press release and supplemental. You can find our press release, supplemental, SEC reports and the audio webcast replay of this conference call on our website at www.americanhomes4rent.com. With that, I will turn the call over to our CEO, David Singelyn.

Thank you, Stephanie. And good morning, and welcome to our first quarter 2017 earnings conference call. I will begin today's call with an update of our business and industry. And Jack Corrigan, our Chief Operator Officer will then review our operating initiatives, our transaction activity and update you on our portfolio performance. Diana Laing, our Chief Financial Officer will provide further detail on our operating and financial results for the quarter and review our balance sheet and recent capital markets activity. In addition as Stephanie indicated, Chris Lau, our Executive President Finance is here with us and also available to answer your question. After our prepared remarks, we'll open the call to your questions. We had an excellent start to the year. During the first quarter of 2017, we continue to execute our strategic initiatives to improve operations through revenue maximization and platform efficiencies and to strengthen our balance sheet. Maintaining a strong capital structure and ample flexibility and liquidity to fund our growth objectives has been up tiller of American Homes 4 Rent since our formation. We are and have been at the forefront of broadening the capital sources for our industry with the ultimate goal of obtaining access to the widest verity of capital options at the lowest possible price. We recently accomplished a key component of this process. Both Moody's and S&P have announced investment grade ratings for the company. We already have evidence of the benefit of these ratings. Last month, the company issued a $150 million of perpetual preferred stock at a rate of 5.875%. This is nearly one half percentage point lower than our last offering despite a significant move up in market rates. With respect to capital raising, we have raised $500 million of new equity since the beginning of the year. During…

Thank you Dave and good morning everyone. I'd like to begin with providing additional details on our transaction activity. During the quarter we acquired 420 homes for a total investment of approximately $80 million. Our pace of acquisition was in the middle of the range that we discussed on last quarter's call. Moving forward we expect to expand our acquisition activity to 500 to 700 homes per quarter through trustee auctions and traditional MLS channels. Our acquisition activity is currently focused primarily in our southeast markets. Newly constructed homes and any bulk transactions will be in addition to this anticipated activity. In April, we took our first delivery of 33 newly constructed homes and we are pleased that we are achieving initial yields that are comparable or better to acquisition yields in the same markets. During the quarter we sold 504 homes for $24 million, 476 of these homes were acquired through the ARP merger. At quarter end we had 704 homes held for sale and look to sell these properties through book sales, as well as individual retail sales. Beyond that we expect to continue to identify homes within our portfolio to prune and recycle capital as a normal practice. Turning to leasing, for the first quarter we signed a total of approximately 4600 new leases, we average leasing spreads of 3.1% on renewals during the first quarter, and 4% on new leases. Leasing spreads began to trend up throughout the quarter as we expected and were within the target range we provided last quarter. Within our same home portfolio reflecting the operational results of 36,813 homes owned and stabilized in both 2016 and 2017 we reported revenue growth of 3.6% in the first quarter. This increase was driven by a 3.6% increase in average rental rates combined with…

Thank you, Jack. In my comments today, I'll review our first quarter 2017 financial results and discuss our balance sheet and liquid. Our results are fully detailed in yesterday's press release and in our supplemental information package both of which have been posted on our website in the for investor section. We've made a few changes in our supplemental financial information package this quarter and I'll point out a few of those. On page 7, we disclose and metric that we're calling platform efficiency as Dave mentioned earlier it represents property management leasing and G&A expenses expressed of the percentage of property revenue and our property rental and fee revenue. On Page 8, in the statement of operations where we previously broke out share based compensation expense as a separate line item, those costs are now included in the property management expensive and the general and administrative expense line items. Also, this quarter's G&A expenses included about $700,000 of cost related to our industrial corporate ratings. On Page 11, our reconstituted same home pool now consists of 36,813 properties, which represent 77% of our total properties excluding those held for sale. The same home pool did not include the former ARPI homes as we don't have a full year's prior results for comparison. And finally on Page 15, we're expanding our disclosure of credit metrics. I'll also point out that we showed a detailed calculation of all of our metrics in the defined terms and non-GAAP reconciliation section at the back of the supplemental. For the first quarter of 2017, total revenue is creased approximately 20% to $234 million from $195 million for the first quarter of 2016. Net loss attributable to common shareholders was $1.5million or $0.01 per diluted share compared to net loss attributable to common shareholders a…

Thank you. Ladies and gentlemen, we will now be conducting our question-and-answer session. [Operator Instructions] Our first question comes to line of Juan Sanabria with Bank of America. Please go ahead with your questions.

Hi. Good morning. Thanks for the time. I was just hoping you could give a little bit more color on the acquisition pipeline in terms of yields that you're expecting and give an update on the - for development opportunities that what kind of yields you're getting there and kind of how the initial phases are going between partner and the J.V. you doing it on your own balance sheet and just made this kind of cap rate expectations?

Yeah. In general and there are some markets where we go a little lower cap rate and some a little higher, but in general we're right around in minimum 5.5% yield based on our pro forma expenses and income and we're achieving somewhere right around 6%.

And on the development side, any update in terms of where the current opportunities are?

Yeah, on the development side, again we're primarily in the Southeast, but we've been able to acquire some in markets that had previously been shut off to us. For example, we acquired five houses in April in Seattle which we had not been able to acquire for quite some time. And got again a little lower yield then the 5.5 but right around 5 in Seattle, which is tough to do. And based on what - how fast we rented those houses and we exceeded pro-forma on each of those houses, we probably will achieve greater than 5. So I think it's a good program. It's still in the early stages. We've acquired 33 houses so far through that method. But I would expect somewhere in 150 to 200 homes by the end of the year. And I think we'll in general exceed what we could do just acquiring existing houses in terms of yield.

And are you seeing any portfolio opportunities out there that you seemed a lot more bullish on the acquisition front you have been in last few quarters?

Well, we see it's pretty much similar to every quarter. There's lot of portfolios out there. It's going to be lumpy based on willingness to sell in the agreement on price and we're going to continue to look at both small and large portfolios.

Just one last quick question, there is a bump up in the bad debts in the first quarter same store results, anything there you guys seen more move outs to buy homes maybe in the Southeast where we're seeing a lot of apartment supplying and discounted?

I think it had more to do and I'll let Chris answer if I'm wrong. But I think they had more to do with a lower than normal bad debt expense in last year's first quarter. It's trending about where we expected.

Yeah. No, no, I agree. Juan, this is Chris. Nothing abnormal, both of them were below 1% of rent and fees and I would attribute it just to timing.

Thank you.

Our next question is come from line of Douglas Harter with Credit Suisse. Please go ahead with your questions.

Thanks. Can you talk about your leverage plans and you've gotten the two investment grade ratings, kind of your target leverage levels?

This is Diana. I don't know that it changes our targets much. I think we obviously are very cognizant of credit metrics, credit metrics now and fully and - excuse me - fully intend to maintain a balance sheet that supportive of the investment grade ratings.

Great. And now that you have the two investment grade ratings, when do you think you might start to kind of utilize that maybe issue unsecured debt?

This is Dave. I think we've already utilized it to some extent. We issued a preferred stock immediately after the receipt of the second investment grade. As Diane indicated, we lowered the cost of our funds 50 basis points at the same time; the market had already increased 90 basis points. So we're seeing the benefit of that and we will look at all opportunities in the capital stack as time goes on, and just to reiterate Diana's point I think we're comfortable in the - operating in the area where we are, we may go up a little bit, down a little bit based on the acquisition pipelines and other factors.

Great, thank you.

Our next question is coming from the line of Rich Hill from Morgan Stanley. Please proceed with your questions.

Hey good morning guys. Quick question on maybe the margin expansion and it looks like you had some nice healthy improvement this quarter, how should we think about that going forward maybe in light of you're not increasing guidance or maintaining your guidance on the margin side, so maybe just some thoughts on trajectory going forward and what's going to drive those margins?

You want to take that?

Yeah, I mean we're going to continue to push on growing our expenses on the operating side, I think we'll continue to get more efficient on property management side as well as pushing down I think to the low 1900s maybe further on expenses we had 4.1% property tax increase and we're projecting 5% to 7% for the quarter other otherwise it might be a little more bullish on pushing the margin guidance for the for the year.

Rich just to reiterate in Jack's prepared comments. For the year we're looking at 63% to 64%. Let me reiterate also the seasonality of this business so that's not going to be consistent quarter-to-quarter, but for the year we believe it'll be in the 63% to 64%. And we did have some very nice margin expansion first quarter compared to prior year and we expect to have margin expansion compared to the comparable quarters for the balance of the year.

Got it. And so if I'm hearing this, a lot of it's still going to be driven by reduction and the expenses, which I think has been obviously a bit focus appears over the past quarter and year - quarters and years?

Yeah, I think we'll continue to get solid rental increases and find that with flat to reduced expenses it should result in margin expansion.

Great, thanks guys. I appreciate it.

Thanks Rich.

Our next question is coming from the line of John Pawlowski with Green Street Advisors. Please go ahead with your questions.

Thanks. I'm curious is why you chose to issue preferred in April, I understand you got a great rate relative to your last preferred issuances, but when your stocks trading at a pretty large premiums NAV in a low 5% implied cap rate and you get the new unsecured rating why not issue equity or put your unsecured rating they used instead of going the preferred route at a high 5% coupon?

Well, during the quarter we did issue a fair amount of common equity, we did take advantage of that opportunity. We issued about three $350 million of common equity. And part of it was there's a number of different variables that we look at when we decide and how to put a little leverage into the company and based on all of those variables we chose to do a small issuance of preferred.

Can you take us through those variables?

It's a function of the long term nature of permanency of your preferred versus the refinancing risk of some of the other securities and the time to get to market as well.

Okay. Jack on hand you have the - would have been the 1Q 2017 revenue expense and NOI growth of the old 25,000 unit same store pool?

I don't, but Chris, do you say anything.

No, I don't.

No, I don't have it. I don't think it would be significantly different. But I'd sure Chris can get back to that.

But I agree, in general John, the old pool and the new pool are pretty similar, there's a little bit of market mix differentiation, but in terms of general trend of performance and profile of the two pools, they're pretty similar in terms of performance.

Okay, great. And then last one from me, I guess what would you pack the odds of you landing a large portfolio in 2017 large being a 1000 homes plus?

I think zero to 100. We don't typically comment on that John and until it's done so.

All right I tried.

Thank you. Your next question is coming from the line of Jade Rahmani with KBW. Please go ahead with your questions.

Thanks. On the M&A side has the dialogue level increased in terms of frequency of conversations?

I would say it's pretty even and it's always been pretty lumpy. We have some portfolios out there, we've had discussions and six months later we have discussions again and then six months later we have discussions again so. If you don't agree on price the first time doesn't mean you can't the second or third time.

What's your appetite or interest in doing something of significant scale and size similar to ARPI?

We have a big appetite for doing something like that. The right deal we would love it.

Okay. And is there any capacity constraint within your existing platform, how many homes you think potentially you could manage?

Oh, I don't think there's a limitation long term, I think that we stress tested our systems to double in size and we don't see any performance issues. And the other benefit of the way we're structured with the significant piece of our management platform being centralized it allows us to scale up and down very, very quickly. And we saw that with American residential 7000 and 8000 homes coming into the platform, and all the properties had our signs in the front yard within a day they were all on our system, and we really didn't have lose a step in marketing those properties or are managing collections and acquiring them. I don't believe there's a portfolio out there that would be concerned about the integration issues coming into our portfolio.

Are there any markets here and currently where you know having had a same store portfolio for some time of scale you've decided the market dynamics are not presently attractive and you couldn't identify a potential exit from an entire market? Example how would you feel about say Chicago?

Chicago we're fine with - we've got I think about 2500 homes in Chicago and that's 5% of our properties and I think that you'll see some years they're going to lag a little bit on rent growth of the year's they're going to go up we saw that in Phoenix and Tampa where we're getting 1% to 2% the rent increases for a while and now we're getting significantly better than that. So it's at any one particular point in time I don't want to - I'd like to see it over the long term before I make that kind of a decision on that market we've invested that much in our people and our properties.

Could you talk about the asset management process you go through to identifying underperforming homes and how you decide about whether to add improvements or dispose of the homes.

We regularly go through anything that ages and doesn't rent and determine whether it's property pricing whether we just didn't do a good job of turning the house, we don't have a lot of those houses fortunately today, I think we have about 100 that are 90 days or more and then we also take a look at values versus current rent so to see if it makes sense the yield based on current values makes sense to hold them those are the couple of the metrics that we look at.

And is it typically determined from a bottom up local basis that feeds up through the infrastructure or are you having data analytics identify using statistics.

Both.

And just finally, can you comment on the turnover ratio, which was a bit higher than what we expected, and I think yourself and peers overall I feel like we've seen a bit of an uptick in turnover, you're seeing an increased number of move out to purchase homes?

Yeah, I think last year we had about 8.8% of our houses turn in the first quarter of this year was 9.1%. My expectation I mean we had last - a year ago when we looked at how many were moving out to buy new homes it was in the 30% range last time we looked at it was in the 40% range so that probably accounts for most of that increase if not all of it.

And is this something you're worried about or you feel like it's a manageable trend because demand remains strong.

I think it's a manageable trend demand remains strong and as interest rates go up there's probably going to be less people moving out to buy houses.

Thanks very much.

Our next question is coming from line of Haendel St. Juste with Mizuho Securities USA Inc. Please go ahead with your questions.

Hey good morning. So I guess just a question on the acquisition yield in Seattle, so you're buying there at about a five, and it's sounds like a comment you expect greater growth from those assets overtime, so I guess help me understand the math there, you're buying there to five you mentioned that your overall portfolio and acquisition yield is about six, so I'm playing that which is think in the southeast is north of the six, so help me understand why it makes more sense to buy in Seattle at those levels versus what you're seeing in the southeast given your higher yield and already established platform there?

The houses that we bought in Seattle through home builder, we were offered a portfolio of houses and we chose certain houses in each of their developments that were in our markets and the blended of all the markets was right around six, and but somewhere north of six and in Seattle obviously was lower than that. So we were fine with taking the whole thing and adding a little bit growth Seattle portfolio with really no additional management costs.

Okay. And assume that that's a market where you want to establish a presence, similar to some of you are the larger markets or you're just going to be opportunistic and see what comes along?

We have five - a little over 500 houses in Seattle, and we also have a presence in Portland and they managed basically together, so I think - we'd love to buy more if it's economically feasible.

Okay. And have you talked about the turn time is during the first quarter?

I didn't catch it, I don't know if could run that for me please.

Yeah the turn times, I think I talked a little bit about this last quarter, the fourth quarter and particularly the first quarter will be seasonally long because from November through about Martin Luther King Day leasing is a little slower than other times, so you end up leasing the aged homes not aged because anything wrong with them just aged because of demand in the first quarter and it extends the marketing period in the turn times, and if you remember there's really three components to turn times it's what happens between move out and rent ready and we continue to see compression on that our guys are getting really efficient at that in the six to seven day range and then there's a marketing time that expands in the first quarter and will contract in the second and third quarters. And that I think was approximately 47 days the marketing period, but again that skewed upwards by the fourth quarter. And then there's the leas sign to the lease start date and that that typically is anywhere in the eight to 10 day range and it was nine days in the first quarter.

Got it, got it, okay. And then kind of alluded to in an earlier question, but just curious on the near term trajectory for same home expenses, the first quarter obviously you guys are doing a lot of things in terms of increasing overall efficiencies bringing certain things in house, but also help by a pretty against easy comp in the first quarter of last year where you had expense growth over 9%, the next couple quarters are much more difficult flattish to minus 2%, so curious how we can expect to see that line item fluctuate the next couple quarters against not only what are tougher comps, but balanced a bit by can be efficiencies in improvements you've been not seeing in the upside?

Yeah, I think we gave guidance to the low 1900s for all that I think I would stand by that and if not achieve a little better than that, but I'll the guidance where it is. Insurance expenses I think are going to be relatively flat -

Will be flat slightly down from where they are.

Yeah, and then property management costs we're going to - we're not - I think we're going to get more and more efficient as time goes on whether that results in 10% reduction I haven't done that calculation, I just focus on getting better and better.

Appreciate that, thank you.

Our next question is coming from line of David Corak with FBR. Please proceed with your questions.

Good morning. The move out to home ownership stats, remind me how that is - how that data has collected, and then that the percentage of departing tenants that you actually get an answer from?

Yeah, we get an answer from 10% to 15% we do a survey, when everybody moves out and we get 10% to 15% in that - it's as reliable as 10% to 15% can be.

Right, right, it's just for us you know there's obviously some sampling error there, so it's how much do we actually rely on that number some. And then moving on kind of bigger picture question, I hoping you guys can give us some color on your strategy on increasing renewal rates at this point, just again bigger picture you have a fairly long average duration of your stack compared to other types of residential properties does that mean your customers are actually stickier, but and so release is have kind of exceeded renewals several of the last quarters, so I'm just curious on how we're supposed to view this going forward, maybe just some color on that strategy and is there a point where you guys feel comfortable pushing renewals more aggressively?

You know 3% to 4% is pretty healthy growth on the renewals, but I think that on the margin, we can increase it through improving our customer service, I think we're taken some large steps towards improving customer service through our in-house maintenance rollout and continue to work on that aspect, we also get surveys whenever we do a maintenance call on any of the occupied homes, and the surveys seem to be improving. So people don't always move out because of price or service, but you we can certainly help change that and the best way I think is through customer service.

Okay, would you mind sharing what those numbers are the growth rates are - what they were in April? Renewals in the releases.

The growth rate continued increase, they continue to increase through the first quarter, I think it was on releasing, I would say they're about the same on renewals, but one releasing it went from 2.7% in January to 3.7% in February to 5% in March and if history is any indicator it will continue to increase through probably July.

Okay. And then just lastly, can you give us an update on the in-house maintenance platform, you said 90% of markets, but still helpful but just some of the metrics that you've quoted in the past like the work order project and maybe what percentage of actual eligible orders have gone in-house and how is that changed since you have imitated the program?

Sorry, Dave, something in the face and I could read it. But yeah, our work order protect is getting, we haven't cross the five protect yet but we're right up there if I think if I rounded I could say give. But we were for one last year. I think we were at 4.9 last month that I looked at. So we're getting better and better at that throughout optimization and number of other technologies. There are about - they get approximately 20% to 30% of our current work orders for occupied houses.

In those 90% of markets?

Yes.

Okay. Thank you.

Our next questions come from line of Dennis McGill with Zelman & Associates. Please go ahead with your questions.

Hi. Thank you, guys. Just going back to raising common there, I think I heard you say early that the leasing trends improved in the quarter and was consistent with your expectations, but I think quarter end occupancy was below the average for the quarter. So can you just maybe clarify that?

Well leasing that - the leasing season is also the move out season. So your move outs - your biggest move outs are going to be May and June and those are going to be biggest leasing months. And you really have very few move outs in November and December. And then so kind of matches up the timing of various move outs. Some markets for example Las Vegas, you've one big move out month then the next month, you're going to have one big leasing month. And so doesn't always match up at month end.

Well, I guess I'm just thinking there should be seasonal improvement in occupancy through the first quarter and we don't know it's sure with the date imply the other the month other way.

Yeah. I wouldn't infer that there is negative trend in leasing. I think you'll see in the second quarter that the leasing season will be very, very strong, it appears to be starting in our way.

Okay. That's helpful. Coming back to proffered ,as you think about the go forward capital structure, do you have a bias to having preferred as a percentage of that stack stay relatively constant, is that sort of part of the thought process or is that open ended as far as how much of the capital stack will be preferred?

At this point, I would say it's open ended. I think we'll look at all of the different components and make a decision each and every time we need to access the market. The ability to reset the coupons of our preferred as well as the just the strength of that market at the time we were looking to act or looking to issue capital, the preferred market was very, very strong, so we took advantage of it.

Okay. And then, Dave, I wanted to clarify the comments you made on the new construction yield as well, I think you said there's only 30 houses right now that you have purchased a new set of small sample, but what is the actual yields you are achieving today and can you clarify whether that's or what's inclusive in that and the CapEx side, is that steel today or is there are some sort of longer term underwritten CapEx that you are assuming there.

The yield is right around 6 and we're assuming what we're doing with the new build homes is making them more rental friendly, we're putting in resilient flooring throughout, so you're not changing carpet. We think we'll get a little lower CapEx and maintenance over time. And especially in the first year where you're under warranty it will be zero. But we're writing in slightly less than we're writing in for our existing homes, I think we're in the $1,200 to $1,500 range for all in CapEx, CapEx maintenance and turn on the new houses versus the 1,900 range on existing houses.

Okay. And I doubt that there is a larger the structural piece that is essentially zero for the first handful of years?

That in the fact that we're building home and specking home for less maintenance.

It's actually less on the turns?

And also realize that property management costs per home are virtually nonexistent as far as increasing that cost items on these new homes.

Okay. And then just last question on the retention rate for the quarter, I didn't see it in the supplemental, do you have that for the first quarter?

We've really moved to the convention that multifamily follows in using turnover and so we are doing turnover, we used for a transitional year last year, we had both, but we've moved to the turnover metric.

Are there any material change or any change relative to a year ago?

No. It correlates to the change from the 30 basis points change in turnover.

Okay. Carry on.

They are really the same metric looked at in inverse way.

Okay. Thank you, guys.

Thank you. Our next question comes from the line of Buck Horne with Raymond James. Please go ahead with your questions.

Hey, thanks. Good morning. I was wanted to follow-up on the built to rent strategy here a little bit. So in terms of operations, maybe - which types of markets do you think that this strategy would best in, are you looking to acquire clusters of homes in certain neighborhoods or do you want them to be spaced out fairly, evenly or how do you think about managing the homes that you're buying and also gets the last piece that just, how do you see the rent growth potential for newly built homes relative to retail homes?

I think it will be market by market and submarket but submarket on rental growth. But right now, we've only done it in kind of spaced out in various subdivisions where the builder is building. That doesn't mean that's where we'll stay, but that's what we're doing right now.

Okay. In terms of the rent growth potential you say you are comparable to?

Yeah. It's very comparable. We're buying in extensions of communities that we've already bought in for the most parts. So I don't see that it be significantly different.

And with your expected savings on R&M and CapEx, you think the yields are comparable to what you can find in the resale market or slightly under the resale acquisitions?

I would say comparable or slightly better.

Okay, okay. And did you mention in terms of renewal offers or on renewal leases, what you've set those out in terms of the upcoming months for call it May, June, July, if you got any data on the renewal offers out there?

No. I don't have that data in front of me.

So, I'll follow-up later. Appreciate it. Thank you, guys.

Our next question comes from the line of Anthony Paolone with JPMorgan. Please go ahead with your questions.

Thanks. You may have touched on this but you're working through your held for sale pretty quickly here and I think those were largely from the ARPI deal. When you're done, is there another round that you can still bring into the mix now that you've ramped up the investment side of things?

Not a wholesale disposition last week prior portfolio like ARP have homes that are non-core. But if we do add homes periodically as we go through and review homes, but there are typically one offs or maybe a neighborhood of four or five, but nothing wholesale like he saw when we acquired ARP and added about 1,400-1,500 homes at one time to held for sale.

Okay. And then a big part of the pitch used to be on the acquisition side the discount to replacement cost, can you talk about where that is now when you're out there either on the courthouse steps to off the MLS, because you're also making acquisitions basically at re placement cost I guess on builder rent sides, just try to wonder what that spread looks like even that the yields of kind of comparable?

I think the acquisitions - in the traditional acquisition channels, the acquisition price to discount significantly narrowed, we're buying instead of in double digit discounts in that 0% to 5%, 0% to 8% range. But our acquisitions of the - from the builders are had a small discount as well. We are negotiating volume discounts there. So it's a little bit less than retail on that side as well. But your statement is correct the prices have come up significantly and we work volume closer to retail or closer to replacement cost. But at the same time, we've seen some significant increases over the last two years and rental rates we've seen cost of capital change as I was mention, the yield on a comments in four, so acquisitions today, even though the prices are gone up are still very accretive.

Okay. Go ahead. Thank you.

Thank you, Tony.

Thank you. This concludes our question-and-answer session. I would like to hand the call back to David Singelyn for closing comments.

Thank you everybody. And thank you for joining us today. And we'll look forward to speaking with you on next quarterly conference call. Have a good day.

Ladies and gentlemen, this concludes today's teleconference. You may now disconnect your lines at this time and thank you for your participation.