Greetings, welcome to the Invitation Homes fourth quarter 2018 earnings conference call. All participants are in listen-only mode at this time. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Greg Van Winkle, Senior Director of Investor Relations. Please go ahead, sir.
Thank you. Good morning, thank you for joining us for our fourth quarter 2018 earnings conference call. On today's call from Invitation Homes are Dallas Tanner, President and Chief Executive Officer, Ernie Freedman, Chief Financial Officer, and Charles Young, Chief Operating Officer. I'd like to point everyone to our fourth quarter 2018 earnings press release and supplemental information, which we may reference on today's call. This document can be found on the Investor Relations section of our website at www.invh.com. I'd also like to inform you that certain statements made during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources, and other non-historical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated in any such statements.
We describe some of these risks and uncertainties in our 2017 annual report on Form 10-K and other filings we make with the SEC from time to time. Invitation Homes does not update forward-looking statements and expressly disclaims any obligation to do so. During this call, we may also discuss certain non-GAAP financial measures. You can find additional information regarding these non-GAAP measures, including reconciliations of these measures with the most comparable GAAP measures in our earnings release and supplemental information, which are available on the Investor Relations section of our website. I'll now turn the call over to our President and Chief Executive Officer, Dallas Tanner.
Thank you, Greg. We are excited to report a strong finish to 2018 and favorable momentum into 2019. Our location, scale, and platform continue to create a best-in-class experience for our residents, evidenced by our industry-leading resident turnover rates. Blended rent growth has accelerated for each of the past 3 months to levels significantly higher than last year, and solid occupancy positions us well to continue capturing acceleration in the 2019 peak leasing season. We are also driving better efficiency on the R&M side of our business, which resulted in fourth quarter performance that exceeded our guidance. Our strong finish to the year brought Core FFO per share growth for the full year 2018 to 14%.
Before discussing what this momentum may translate to in 2019, I want to take a moment to review our performance on the 2018 operational priorities that we communicated to you at the beginning of the year. Our first objective was to deliver strong, consistent operational results across our core portfolio. We met our expectations for the top line with 4.5% same-store core revenue growth, which outpaced residential peers. However, we can execute better on the expense side of the business. After identifying opportunities to be more efficient with repairs and maintenance last summer, our teams have done a great job starting to capture some of these opportunities. We have more work to do, but are pleased with how our performance improved in the second half of 2018. Our next objective was to further enhance the quality of service we provide to our residents.
The ultimate scorecard on service comes when it is time for residents to make a renewal decision, and we are thrilled that our turnover rate on a trailing 12-month basis improved each quarter in 2018 to new all-time lows. Our third operational priority was to execute on our integration plan. In addition to finding an incremental $5 million of projected end-state synergies, we also beat expectations for 2018 achievement by capturing $46 million of annualized run rate synergies in the year. With respect to investments, our priority was to continue increasing the quality of our portfolio by recycling capital. In total, in 2018, we sold roughly $500 million of primarily lower rent band homes that no longer fit our long-term strategy. We recycled capital from dispositions into both the purchase of almost $300 million of homes in more attractive submarkets with higher expected total returns and prepayments of debt.
Finally, we made progress on our path to an investment-grade balance sheet. We reduced net debt to adjusted EBITDA to below nine times, compared to approximately 11 times at our IPO in early 2017. We also improved our weighted average maturity and cost of debt. Looking ahead to 2019, we are excited about our opportunity for growth. Let me address these three opportunities in particular: revenue growth, expense controls, and capital allocation. With respect to revenue growth, fundamentals are as strong as they've ever been for single-family rental. In our markets, household formation in 2019 are forecast to grow at almost 2%, or 90% greater than the U.S. average. Construction of new single-family homes is not keeping pace with this demand and has recently slowed further.
In addition, affordability has become a bigger challenge for potential home buyers due to a combination of home price appreciation and higher mortgage rates compared to last year. We are seeing this play out in our portfolio today with same-store move-outs to homeownership down 17% year-over-year in 2018. Leading housing economist, John Burns, estimates that the cost to rent a single-family home is lower than the cost to own a comparable home in 15 of our 17 markets today by an average discount of 16%. We believe our product provides an attractive solution for customers who want to live in a high-quality single-family home without making the financial commitment of homeownership. Furthermore, we believe the location of our homes in attractive neighborhoods, close to jobs and great schools, and the high-touch service we provide differentiate Invitation Homes and make the choice to lease with us even more compelling.
Regardless of what the broader economy may bring in the coming years, we feel that our business is well-positioned. Even if we were to experience a cooling of the economy, our portfolio could continue to benefit from demographics that are shifting more and more in our favor, and from a sticky single-family resident base that would likely find homeownership incrementally less attractive under more challenging economic conditions. We are also excited about our opportunity on the expense side of the business and are focused in 2019 on adding to the progress we made in the second half of 2018. Newly implemented changes to our repairs and maintenance workflow and route optimization systems are paying dividends already. We still have plenty of opportunity to be more efficient. We also believe the integration of our field teams and property management platform in 2019 will be a positive catalyst for expense improvement.
With one team operating on one platform, we will be better positioned to find new ways to refine our business and take resident service to higher levels. With respect to capital allocation, our plan in 2019 remains focused on the dual objective of refining our portfolio and reducing leverage on our balance sheet. The markets we are in remain healthy, providing compelling opportunities on both the acquisition and disposition sides for us to achieve our capital recycling goals. Abundant capital from potential buyers and limited inventory in our markets create an attractive opportunity for us to prune our portfolio. We also have multiple uses for these proceeds, including buying homes in more attractive submarkets, reinvesting in our portfolio through value-enhancing CapEx, and prepaying down debt. Before we move on, I want to say a few quick words about our team.
It is a thrill to have the opportunity to lead the company I founded with my partners, a company that is full of talented people from top to bottom. I'm fortunate to be stepping into the CEO role with the company in an outstanding place, thanks in part to the leadership of Fred Tuomi. Fred helped guide Invitation Homes through what has been a very successful merger and integration. He's positioned us to move forward better than we've ever been before. We thank Fred for his leadership and wish him the absolute best. Moving forward, we will continue to stay true to our DNA and the strategic path we've been on since day one. We will put residents first. We will drive organic growth and an outstanding living experience by leveraging our competitive advantage of location, scale, and high-touch service. We will be opportunistic with respect to external growth.
We will progress toward an investment-grade balance sheet. We will do all of this with the best team in the business. I am fortunate to be surrounded by true experts and industry pioneers on our field and corporate teams, as well as in our boardroom. To all of our associates, thank you for a great finish to 2018. Let's continue to build on our momentum in 2019. With that, I'll turn it over to Charles Young, our Chief Operating Officer, to provide more detail on our fourth quarter operating results.
Thank you. As Dallas Tanner said, the fourth quarter of 2018 was a great one for us operationally. Our teams did a fantastic job capturing rent growth and occupancy to put us in a strong position going into 2019. Drove better R&M efficiency, resulting in outperformance of our guidance in the fourth quarter, and most importantly, we continue to provide outstanding resident service. I'll now walk you through our fourth quarter operating results in more detail. Same-store core revenues in the fourth quarter grew 4.6% year-over-year. This increase was driven by average monthly rental rate growth of 3.8% and a 70 basis point increase in average occupancy to 96% for the quarter. Same-store core expense growth in the fourth quarter was better than expected.
Core controllable costs were down slightly year-over-year, even with a tough R&M comparison versus the fourth quarter of 2017 due to that year's hurricanes. Property taxes increased 15.1% year-over-year, in line with our expectations due to the timing items discussed on last quarter's call. As a result, overall same-store expense growth was 7.4% year-over-year. This brought our fourth quarter 2018 same-store NOI growth to 3.2%. For the full year 2018, same-store NOI growth was 4.4%, 65 basis points ahead of the midpoint of guidance provided on our last earnings call. Importantly, we have made steady progress on improving our R&M efficiency by implementing numerous changes to systems and processes after opportunities for improvement were identified.
With these changes, we have improved how work orders are allocated between in-house technicians and third parties, how corresponding service trips are scheduled, and the routes the technicians follow to optimize their time. In the fourth quarter, we also rolled out an important update to our technology platform that enabled all of our internal technicians to perform work on any home in our portfolio, not just the homes associated with their legacy organization. This made a material difference in the productivity of our maintenance technicians in the fourth quarter. We still have work to do, though, and we'll continue implementing process improvements and ProCare enhancements in the months leading up to 2019 peak service season. Next, I'll provide an update on integration of our field teams. After successful results in the testing phase, we began market implementation of our unified operating platform in November.
As of today, we have teams in five markets representing almost 40% of our homes functioning under our go-forward structure and platform. Transitions have been smooth, and feedback from the field teams have been extremely positive. We plan to roll out the platform to our remaining markets in waves over the next several months. This rollout is expected to unlock the remainder of the $50 million-$55 million of total run rate synergies we have guided to by mid-2019. As of year-end 2018, our run rate synergy achievement was $46 million. Next, I'll cover leasing trends in the fourth quarter of 2018 and January 2019. Fundamentals in our markets remain as strong as ever, and we are executing well. Both renewal rent growth and new lease rent growth have increased sequentially in each of the last three months.
Renewals averaged 4.7% in the fourth quarter of 2018, and new leases averaged 2.1%. Notably, new lease rent growth is now exceeding prior year levels and was a full 70 basis points ahead of last year in the fourth quarter of 2018. This resulted in blended rent growth of 3.7% in the fourth quarter 2018, up 20 basis points year-over-year. Same time, resident turnover continued to decrease, driving occupancy to 96% in the fourth quarter 2018, up 70 basis points year-over-year. Each of these leasing metrics improved further in January. Blended rent growth averaged 4.3% in January 2019, up 90 basis points year-over-year, and occupancy averaged 96.2% in January 2019, also up 90 basis points year-over-year. With fundamental tailwinds at our back and occupancy in a strong position, we are confident as we start the new year.
Our field teams are focused on execution and are excited to leverage our integrated platform to deliver even more efficient resident service. With that, I'll turn the call over to our Chief Financial Officer, Ernie Freedman.
Thank you, Charles. Today, I will cover the following topics: balance sheet and capital markets activity, financial results for the fourth quarter, and 2019 guidance. First, I'll cover the balance sheet and capital markets activity, where we had a very active and successful year. Let me start with a few highlights about where we started 2018 versus where we ended it. Net debt, $9.1 billion to start the year, $8.8 billion to end the year. Net debt to EBITDA, 9.5 times to start the year, 8.8 times to end the year, pro forma the conversion of our 2019 convertible notes. Weighted average years to maturity, 4.1 to start the year, 5.5 to end the year. Unencumbered homes, 42% of homes to start the year, 48% to end the year. Weighted average interest rate, 3.4% to start the year, 3.3% to end the year in a rising rate environment.
We accomplished all this by prioritizing free cash flow and bulk disposition proceeds for debt prepayment and by refinancing debt in 2018 with $4.2 billion of proceeds from our four new securitizations. While we remain opportunistic, we anticipate less refinancing activity in 2019, with no secured debt maturing in 2019 or 2020 and only $373 million maturing in 2021. However, we will continue to prioritize debt prepayments as part of our efforts to pursue an investment-grade rating and have made incremental progress already with the prepayment of $70 million of secured debt in January. We will continue our de-leveraging strategy by electing to settle conversions of our $230 million of 2019 convertible notes in common shares. We view this decision as a way to reduce net debt to EBITDA by approximately 0.25 turns while incurring minimal incremental dilution to Core FFO per share.
Our liquidity at quarter end was over $1.1 billion through a combination of unrestricted cash and undrawn capacity on our credit facility. I'll now cover our fourth quarter 2018 financial result.
Around the timing in which we roll it out during the month to make sure that we're not impacting the field teams. We went through multiple rounds of testing to make sure that things were working as expected before we went in. We have great training. We've learned from each of the rollouts to get better in our training, and implementation has been great. The feedback from our field teams have been very positive, and as I said, we expect that we'll be there by mid-year. Bottom line is the teams are really excited to get on one combined platform because they were working in multiple systems before. We see this as a really positive thing.
Thanks. Dallas, congratulations on the promotion. When you took over as interim president in August, the board formed a special committee to work with you and the team during Fred's absence. Is that committee still in place, and what's the board's role today?
Hi. Thanks for the question and, excuse me, the compliment. The board is still functioning in a similar fashion as we were, and that executive committee will stay in place through 2019. As you guys know, we have a very supportive board with a ton of excellent experience behind it, so we'll continue to use that. It's been strategic for us as we vetted out some of these things that Charles just discussed in terms of how we would integrate going forward, and we thought through some of the processes. They've been very supportive in that capacity, and we would anticipate them to continue doing so.
Thanks.
The next question will be from Drew Babin of Baird. Please go ahead.
Hey, good morning.
Morning, Drew.
As it pertains to AFFO guidance, I was hoping you could talk about the direction of recurring CapEx per home in 2019, understanding that in 2018 with the Starwood Waypoint merger, there might've been a little bit of noise there. Can you just give us a little more color on the trends in that number as well as how you think about revenue enhancing CapEx this year?
This is Ernie. With regard specifically to our recurring CapEx, we expect overall net cost to maintain, which is both our operating expenses associated with repairs and maintenance, as well as turnover, as well as the capital associated with it, and that would be our recurring CapEx. I think that's going to be up approximately about 3% year-over-year. We definitely have some easier comps to go up against, and we certainly have had some improvements. As we talked about in the prepared remarks, we're not fully optimized today. Of course, we want to be cautious before we get into peak leasing season, before getting too far ahead of ourselves of where things may end up.
Where we sit today and where we're at with the progress we made, and we feel like we're back to a more normal type growth rate with the opportunity maybe to do better as we go forward. I would expect plus or minus in the 3% range for net cost to maintain to grow. Drew, remind me what the second part of your question was.
Just revenue enhancing CapEx, whether we can expect any kind of directional change from last year there.
Hey, Drew, this is Dallas. I'll answer this. Expect our focus to continue to find ways to optimize these assets on a like-for-like basis as they turn. Now, some of that allows us these opportunities with revenue-enhancing CapEx. I would expect that program to continue to develop, if not, maybe be a little bit more active as we spread into some of our West Coast markets. We certainly see a number of different opportunities outside of just the smart home functionality with which we're continually adding into the portfolio today. We're finding that our customers, they're sticky by nature. What's been really interesting over the past year, as we've piloted revenue-enhancing CapEx and gotten better at how we implement that process, is how many times our customers, on a renewal or on a new lease, want to actually pay up to optimize parts or sections of their house.
This is a win for both us and the customer because we're able to harden the asset, in theory, and also get a better risk-adjusted return on the revenue increase. That's outside of the way we would normally underwrite a property. Expect us to do more of it. We're looking and getting smarter. Charles and his team have done a terrific job on the procurement side to find ways that we can continually enhance that experience for the customer.
Thank you. That's helpful. Lastly, just on the guidance expectations. Non-cash interest and share-based comp, I was hoping you'd kind of give us those numbers, just given the accounting, kind of how those play into the Core FFO calculation.
Yeah, Drew, we have not provided guidance for those in the past. Let me think about what we can do and get something out there for folks to help with modeling. Don't have anything I can share with you today.
Okay. Yeah, we can follow up on that. That is all for me. Thank you.
The next question will be from Douglas Harter of Credit Suisse. Please go ahead.
I was hoping you could talk about where you are in the process of optimizing the portfolio and kind of how you think about the home count as we move through 2019.
Yeah. Hi, Doug. This is Dallas. We've been pretty vocal about our desire to continually refine and optimize the portfolio. The nice thing about the merger is we've had enough time and distance. We knew there were some homes initially, both with which we wanted to sell, also some areas where we wanted to scale up, could find and drive greater efficiencies in the portfolio by acquiring. Expect us to do more of the same. We had a pretty busy year in terms of what we were selling, it comes in a variety of shapes and sizes to why we sold. We certainly were active in parts of Florida, where we now, on a combined basis, had over 25,000 homes post-merger.
Expect us to continually look for areas like that where we can continue to refine the portfolio, create efficiencies for the operating teams, build on the scale and density that we have in those markets. In addition, we also have outlier locations or geographies where we'll, at times or seasons, look for ways to refine and improve the way that those parts of the portfolio is behaving. Lastly, I'd just add, there are occasions, we're starting to see this a little bit in some of our West Coast properties, where if a home just becomes too valuable, ultimately, we think it's better suited for an end user, we'll sell that home and take those gains and recycle capital into parts of markets where we see still significant opportunities for good risk-adjusted return.
Dallas, just following up on that. What are the markets where you see the best opportunities to kind of recycle capital into?
Well, funny enough, we were pretty active in 2018 in still a lot of West Coast markets. We've been pretty vocal about the fact that we love Seattle. We love the growth that's going on there. It's evidenced in some of the new lease and renewal rates that we're seeing in the business today. We also still are finding really good opportunities in the Southeast. If we could, we'd buy more in California and markets if those opportunities were available to us. We just see limited supply in today's environment. As we've stated, household formation in our markets today is almost two times that the national average, and we're feeling that in the parts of our business, specifically around new lease growth and renewals.
Generally speaking, you've seen that we've been getting out of parts of the Midwest over time, and we've continued to recycle coastal, where the majority of our footprints are today.
Great. Thank you, Dallas.
The next question will be from Shirley Wu of Bank of America Merrill Lynch. Please go ahead.
Hi, guys. Thanks for taking the questions. In your expense guidance of 4%, do you think you could break out different buckets in terms of growth for personnel or R&M for 2019?
Yeah, Shirley. What we're comfortable providing today, because taxes are almost half of our expense number, I can provide some guidance around what we think would happen with taxes and what's going to happen for everything else, which is really roughly the other half. I think as everyone knows, home price appreciation continues to be pretty strong in our markets, and it has run over.
Across the board on a weighted average basis across our markets. With that, we do expect that property taxes in 2019 will be up somewhere in the fives for us. Of course, Proposition 13 in California helps mute that a little bit for us with having 20% of our portfolio in California. The real estate taxes being up, we think somewhere in the fives, we think everything else will be less than 3% at the midpoint to get to our guidance range of 3.5%-4.5%. As the year plays out and as different things earn in, we'll see some things flow through on those other expense items. From a guidance perspective, we're comfortable providing guidance in that way, Shirley.
Also recently, mortgage rates have really pulled back, especially in the last couple of months. Your move-out to home buying has continued to trend down. Is that something that you're concerned about? Moving forward, how do you think about that?
We're certainly not concerned about it because it's been fairly consistent over the past couple of years. Less than 10% of our overall portfolio on an annual basis moves out of our business to go buy a home. At least that's what we've seen over the first few years as a public company. We look at it a couple of ways. I mentioned it in my earlier comments. We are seeing a real shift in terms of affordability, to your point, and we're picking up some of the net benefit of that, quite frankly, in our business today. As we mentioned before, 15 of our 17 markets, based on the research that we look at and follow, are now more affordable to lease in, call it, an entry-level product, than it is to buy in today's environment.
We think interest rates there actually maybe push people into a longer-term lease with us or maybe offer an opportunity for consideration to choose a leasing lifestyle. There's some markets, to your point, that are a bit more dislocated. In Seattle, Washington, for example, that differential can be as high as 30%. We look at that as also an opportunity to make sure that we're providing a best-in-class service and an experience that people are willing to pay for. We look at that as an opportunity.
Got it. Thanks for the color, guys.
The next question will be from Derek Johnston of Deutsche Bank. Please go ahead.
Hi, everybody. Can you discuss how turn times trended in 4Q, and where you'd like to see them in 2019? Really if the new R&M platform drives any benefit there?
This is Charles. Turn times have been kind of mid-teens for us, and we'd like to bring that down. Again, we've been consolidating the teams, the offices, and the platforms. As we get all into one platform, as we talked about, and finalize that integration at the first half of the year here, I think we'll be in a much better shape to bring those times down. As we think around turn, it really is the kind of quality and location of our homes, and we make sure that we are delivering a high-quality product. That delivery of product will relate to the R&M in terms of any work orders that may come afterwards. Part of what we want to implement in 2018 that's important is our ProCare service.
That's the follow-on after the turn when the resident moves in to make sure that they understand their responsibility, but also we bundle some of those work orders to a 45-day visit that will allow us to kind of manage that process with the resident on the R&M side. That's where the overlap and the transition happens. Ultimately, they're two separate portions of the business. As I said, we'd like to bring those turn times down, and we expect that we'll start getting into the low teens as we get consolidated.
Great. Last one from me. How many customers are now subscribed to the Smart Tech technology? What other ancillary income drivers have you guys identified?
Yeah. Right now, we have about a third of our homes have the smart home installed, so a little over 30,000. About half of those are paying customers. That builds every time that we move a resident in. 70%-80% of those residents are opting into the service, which is great adoption rate. In terms of other ancillary, with the integration, we've really been focused in on finalizing that. Once we get through the integration, we see there's opportunities, whether it's in moving services or pet services, pest control items that we can think around, filters. There are a number of items that we want to attack, but right now we're focused in on making sure that we finalize the integration.
Good stuff. Thanks.
The next question will be from Richard Hill of Morgan Stanley. Please go ahead.
Hey, guys. Wanted to just ask maybe a couple questions about how you think about 2019, where you didn't give guidance. You've had some success with bulk sales. Dallas, I'm wondering if you can give us any sort of color around those bulk sales, cap rates, breadth of buyers. Do you think that's going to continue in 2019? How are we supposed to think about that going forward?
Sure. Thanks, Rich. A number of things. As I mentioned earlier in my comments, we still see quite a bit of demand in the marketplace for stabilized product being sold from an institutional operator like ourselves. I would expect that we'll still explore some bulk opportunities this year and really, quite frankly, any year where our scale and density allow us to facilitate those types of transactions. In terms of what we did in 2018, we sold homes on average that were much cheaper than the homes that we were acquiring. I think if you look at the fourth quarter as an example, in the 1,600-plus homes we sold in Q4, we had, call it, an average price per home around $175,000. We were recycling that money into homes that were well north of $300,000 on a per-property basis.
What those cap rates are. Certainly, when you're selling cheaper product, generally on a pro forma basis, you're going to see cap rates that are a little bit higher, just because your denominator being so low in terms of your asset pricing. What we sold over the majority of 2018 were homes that were closer to a six cap, and recycling the homes that were well within the mid-fives. That doesn't tell you the whole story. As you think about the way we've recycled in terms of what we bought and what we sold, on average, we're buying homes that we're renting for about $500 more or less more than the homes that we were selling. That additional $6,000 in revenue is a really smart way to operate on the long term when you think about all the incremental costs that can go into this business.
That's great detail. Hey, guys. You guys put up a really impressive margin number this quarter. How are we thinking about that sort of near term and long term? I guess the question is that 65% plus margin, is that sustainable near term, and do you think you can still get that into the high 60s? I'm going to push you to 70 area. What are you thinking about there?
Rich, I think the answer is, it really all depends on how things move forward with some capital allocation and other things. As you know, fourth quarter and first quarter typically are our highest margin quarters. For the entire year of 2018, in a year where we certainly had some challenges, we put up a 64.5% margin, which we're pleased to do even with the challenges that we had. As we continue to refine the portfolio from a capital allocation perspective, and importantly, as Charles continues to refine what he's doing on an operating standpoint, our guidance implies that margins will be pretty similar from 2018 to 2019 based on what we put out there for the midpoint of revenue expense and NOI guidance. We think there's opportunity for that to continue to increase, to somewhere certainly in the higher 60s.
We do have, I think, a half dozen markets today that are in the 70s. Certainly as Dallas looks to do some things on the capital allocation part, and especially the homes we're selling out of and some of the markets where we've been disproportionately selling, those markets do have lower margins. You could certainly see, you could force your way to a 70% type margin. I think for where we're at, where we want to have our homes in the portfolio, I think increasing it by a few hundred basis points from where it is now into the higher 60s is certainly a very achievable goal over the next period of time.
Great. Thank you. Just one final question. Dallas, going back to your prepared remarks on affordability. When you think about affordability, are you sort of doing apples to apples rent to mortgage payment, or do you guys think about affordability relative to the cost of owning a home differently?
I think we like to look at it a couple different ways. I think the way to really look at it is so that you keep everything constant, is you got to think about housing costs as not only your mortgage, but also some ongoing maintenance expense that a normal homeowner would incur over ordinary course. That's the way Burns and a number of other economists tend to look at it. We've looked at a couple of different pieces. We've done some of our own research, obviously, with the data that we have. You're certainly seeing that dislocation we talked about earlier. There's a time and season where that's your friend, and there's a time and season where maybe it isn't.
Right now, it certainly feels like we're positioned to capture some of that affordability demand, that people are looking for some relief, specifically in the West Coast, where we're seeing rising home prices as well as the rising rate environment not helping the home ownership story.
Perfect. Thanks, guys. That's it.
Thanks, Richard.
The next question will be from Jason Green of Evercore. Please go ahead.
Good morning. On the deceleration in same-store revenue growth that your guidance implies, is that kind of due to conservatism on occupancy, slowing rent growth, or a combination of the two?
Well, if you look on page 23 of our earnings release, Jason, I think it'll help guide what happened at 2018 and give you a sense for what we think is going to happen with regards to 2019. You'll see in 2018, our revenue growth of 4.5% was made up of 3.9% in rental rate growth, 50 basis points increase in occupancy, and then other income was a little bit better than those. That's how you get to a 4.5%. To get to the midpoint of our 4.1% revenue growth, we think we're going to have similar rental type growth, maybe a tick lower than that at the midpoint, but very similar. As you recall, we have accelerating rent growth here starting in the fourth quarter of 2018, and we saw that in January, as Charles talked about.
For the first three quarters of 2018, it was a deceleration year-over-year. We need to earn that in. On occupancy growth, we do expect occupancy to be better than it was in 2019 versus 2018, but not necessarily 50 basis points better. Now, that said, Charles is off to a really good start in January, up 90 basis points, and we're off to a good start on rental rate as well. When you factor that in, that's why we don't think we quite get to 4.5% with regards to the midpoint of our guidance. There's certainly a path for us to do better than that, certainly seeing how well we started off the year with January.
Got it. The synergies that you guys had mentioned from the merger, are those factored into same-store guidance, or do those represent additional upside?
No, those are factored into our guidance. About 90% of the synergies that hit the field hit same-store, the rest hit the total portfolio because we've got 90% of our homes in same-store. Those are factored in. In regards to getting to numbers we expect to from an expense perspective, it's taking into account the synergies that we earned in 2018 as well as what we anticipate the timing on those synergies. To be clear, those synergies aren't all going to earn in on January 1st. As Charles talked about, it's going to be until mid-year, and we got the whole portfolio rolled out. As we do that, it's about 60 days after that where we get to that final number. We want to have some overlap period to make sure things are working right in the field.
Those take a little while to earn here in 2019, but that's all factored into our guidance.
Got it. Last one from me. Total cost to maintain came in for the year at about $3,200 per home. You're talking about that increasing potentially around 3% in 2019. Previously, you'd said the long-term rate is probably somewhere between $2,600 and $2,800. I guess first, is that still the long-term rate that you guys feel will be necessary for total cost to maintain the homes? How long does it take for you guys to get there?
We came in, I think, closer to $3,100 and $3,200. I think it was $3,109 for the year. Notwithstanding, when we first came out with our IPO way back a couple of years ago, we did say, adjusting for inflation, we expect to be at $2,600-$2,800. Those numbers are going to move on us, those guideposts, if there's inflation in the R&M world. We've actually seen probably more inflation in that than in other areas, just on what's been going on with broader products and services. You always need to reset that. That said, we're not quite where we think we're going to be in getting back on that track. As we further optimize and get things rolled out on the R&M side, and we've talked about in the prepared remarks that we had a good fourth quarter.
It came in stronger than we thought. We're excited about that with regards to what happened with R&M to bring us down to that $3,100 number that we came in for the year. We want to be cautious as we come out this year to make sure things are going as we expect and move forward. I think once we're fully optimized, everyone's working on the same platform, that's when we have the real opportunity to get back to numbers that were more like where we thought we would end up, with regards to the longer term, growing for inflation, where we thought cost to maintain would be.
Got it. Thank you.
All right. Thanks.
The next question will be from Jade Rahmani of KBW. Please go ahead.
Thanks very much. Are you seeing a pickup in interest from home builders in partnering with you?
Hi, Jade, this is Dallas. It's interesting. We've certainly had a number of discussions around opportunities, and we're looking at a couple of different things. As I've mentioned before, we really are channel agnostic, and we just want to make sure that we're focused on the right locations. We're interested. We like the fact that I think home builders are getting more and more comfortable with the idea of single-family owners being in their neighborhoods and buying product. I certainly could see it becoming more and more of an opportunity for us going forward. I don't think we have to take on any of that development risk ourselves. We've been pretty clear about that. We certainly want to look for strategic partners that we can then be a potential buyer for. We think that there's definitely opportunity for us there to grow.
What's your view toward master-planned communities that feature apartments and standalone single-family rental communities with high amenities targeted toward millennials?
Well, it's an interesting concept that continues to evolve. We certainly know some of the operators and the owners that are building that product today. I think it's kind of a shift, quite frankly. I think it plays into some of the same demographics that we've been talking about. There's this 65 million person cohort between the ages of 20 and 35 that are coming our way that want quality of choice, and it's no different than the business we run today. I think where you got to be careful, though, Jade, in some of those opportunities, is you got to still stay location specific in terms of where you want to invest capital. Now, if it's a small boutique opportunity in an infill location with really good rents and that the square footages are similar to what we would normally own, it'd be something we look at.
What I've seen across a broad spectrum of some of that product is it's typically been much smaller footprints, between 800 and 1,300 sq ft, that's not really our sweet spot, more or less. If we saw an opportunity that was infill that made sense, we'd certainly want to look at it. We're encouraged by the fact that people are recognizing that leasing is a real choice right now for people.
Just on the influence of iBuyers on the market, are you competing directly with them with respect to acquisitions? Are they distorting pricing or impacting the market in any way? Is there a potential opportunity to enter into joint ventures to provide centralized property management services since they are active in many of your markets?
Let me answer kind of those in part. I think you're thinking about the world the right way, Jade, in terms of you being an entrepreneur. This is an interesting moment in time with these iBuyers. It certainly feels like there's a new company popping up every day. Who knows what will actually stick or last, or who will be the kingpins in the long term. But this is public record. We've been supportive of companies like Opendoor and Offerpad and Zillow that are out there making the home buying and selling experience much easier for the customer. Now, five and a half million transactions in the U.S. occur every year. As you think about that, there's plenty of space for both brokers, iBuyers, and individual investors to be buying and selling homes in the U.S.
We certainly want to look for strategic partners that we can partner with to help grow our footprint and our portfolio. We get the question a lot about would you want to do third-party management. You could certainly see a day where that could be interesting. Now, for us, it's just not really our focus. Our focus is on growing our own footprint. We see plenty of opportunity within our own book of business where we can continue to grow the Invitation Homes product along with the Invitation Homes fit and finish standards, as well as the service levels that our customers are wanting to expect. It's not in our near-term horizon by any stretch.
Thanks so much.
Thanks, Jade.
The next question will be from Wes Golladay of RBC Capital Markets. Please go ahead.
Hey, good morning, guys. I can appreciate that there's a lot of moving parts last year on the expense side, volatility to the upside and the downside. This year, you have a 1% range on your same-store expenses. Should we take that as a sense that all the moving parts are behind us and it'd be more of a normal environment this year?
Yeah, Wes, we certainly think so. We want to be cautious, we want to set a range that we thought was appropriate. At the end of the day, we feel a lot better sitting today with the lessons learned over the last 12 months. You recall, last year at this time, when we provided guidance, the merger had just closed about 60 days ahead of that, actually closed ahead of schedule. We all thought that it would actually close in early January, but fortunately, we were able to get it done quicker. We are bringing two companies together. We weren't on the same platform. We are learning how each of the companies were doing things. In hindsight, we got a lot of things right, but a couple of things we didn't, unfortunately, and that caused some noise. We definitely feel much more confident.
Again, we're not 100% of the way there, as we've talked about on a couple other things. We're certainly so much further along than we were. We are feeling sure, than we were last year and certainly as the year progressed.
Okay. You made the comment about the earn-in being a little bit lower from the leasing from early last year. Looking at this year, what are your expectations for blended rent growth for each of the quarters? Not by quarter, but just in general, do you expect to continue to modestly accelerate throughout the year based on the supply and demand you're seeing?
Yeah, we want to be careful with that. I did mention it in the prepared remarks. The occupancy comp does get harder throughout the year, I just want to make sure people realize that. That means you're likely to see higher revenue growth earlier in the year, because we won't have as easy an occupancy comp later in the year. We'll just have to see how it plays out. It's January. It's early in the year. We make our hay starting in mid-March. That's kind of when peak season starts for us and goes through end of July or early August. Certainly, when we're talking to you guys in about 90 days about first quarter results, we'll have a much better feel for whether we've seen that acceleration continue at the pace it did in January or not.
Okay. That's all for me. Thanks for taking the questions.
Thanks.
The next question will be from Hardik Goel of Zelman & Associates. Please go ahead.
Hey, guys. Thanks for taking my question. As I look across the guidance range, my first question is, would you consider the low end of guidance to be as likely as the high end of guidance? As a follow-up to that, what are the components of guidance that you look to as being drivers of potential downside to guidance to the midpoint and drivers of potential upside as well?
Sure. Hardik, I think by definition, we think it's equally likely, as we put out our guidance, that the low side could be hit as well as the high side. We'll certainly be optimistic that we think we can do better, that's the point of the range is we think that they're kind of equal weighted. We certainly are excited about how January came out, and we'll do our best to get more toward the high end of those ranges. In terms of what could influence our ability to have upside to that or not, again, peak leasing season on the revenue side will be the key. We're real pleased with how January came out, for sure. So I think that's going to be what will swing us in terms of rental rate achievement.
We're always rate-focused first, we've been able to have been successful, especially with lower turnover. We saw the lowest we've ever seen as we looked at the fourth quarter. That certainly helped on the occupant side. On the expense side, I think it's probably the obvious, it's just we know that we had some struggles last year with repairs and maintenance and net cost to maintain. We were feeling better about it than we have, but we're not 100% there in terms of having everything optimized and running. The proof will be in the pudding, just like it is on the revenue side for peak leasing season, will become the summertime, when we hit the majority of our work orders that have to do around the HVAC season. We'll be better prepared for that this year by leaps and bounds than we were last year.
I think that will be the true test for us on the expense side as we get into peak work order season. How are we doing? Are the teams optimized? Is everything working the way we expect it to? We're pleased with the path we're on right now. By midway through the year, come that August call, the late July, August call, we'll have a pretty good sense, I think, of how the year is playing out on the expense side.
Thanks. Just one quick one, if you'll indulge me. The move-outs to buy, were they a big driver of turnover being lower? Did you see them trend lower year-over-year, or what was the trend there?
Year-over-year, they trended slightly lower. They've actually been a little bit more lower in the previous quarters, for the year, they were definitely lower. I think it's more broadly that people are pleased with the service that they're getting and are staying a little bit longer. Fourth quarter is not as much activity as you know, Hardik.
Right.
I don't know if we can draw a lot of conclusions from fourth quarter, but we did see it lower quarter-over-quarter like we did every other quarter this year. That certainly did help with the turnover number.
Thanks, Ernie.
Yeah.
The next question will be from Alan Wai of Goldman Sachs. Please go ahead.
Good morning. I had a question on G&A. Is your full team number a good run rate? How should we think about incremental synergy savings realized mid-quarters as well as potential seasonality?
Sure. We provided a walk in our earnings release that showed how you get from where we ended up for 2018 for Core FFO and then to the midpoint of our guidance for 2019. Within that walk, we did call out the fact that for both property management expense and G&A combined, we expect to be about $0.01 better. It's not quite $0.01. It rounds up to $0.01. We are going to do a little bit better, more so in G&A than in property management expense, but both numbers should be down year-over-year from where they were in 2018. That's mainly from the earn-in of the synergy that's still to go, as well as the ones that happened in 2018. There's not much to go still on the G&A and PMA numbers. It's mainly the earn-in from 2018.
Understand there's some cost inflation baked into there, too. Costs don't remain static in terms of what's happening with compensation costs for the organization and other costs. You have a synergy good guy that more than offsets an inflationary increase in those costs for 2019.
That's helpful. I was wondering in terms of seasonality and G&A, how should I think of that?
There's really not a lot of seasonality in G&A. The only thing that potentially would do that would be around our bonus accruals, but we try to do a good job throughout the year anticipating where those will come out. You should see that be pretty steady each quarter throughout the year.
Thank you very much.
Welcome.
The next question will be from John Pawlowski of Green Street Advisors. Please go ahead.
Thanks. Dallas or Ernie, could you provide the acquisition and disposition volume targets for this year?
Yeah. Hi, John. We're going to give early guidance around numbers that feel pretty similar to last year. We think we'll buy somewhere between $300 million and $500 million of assets on our base case scenario, and we'll probably sell somewhere between $300 million and $500 million in assets.
Okay. Ernie, I understand you're not giving repair and maintenance expenses. I guess I'm still having trouble understanding where the easy comps are going. In the middle of the year, you guys increased expense guidance, pretty meaningfully that implied over $10 million of what was described as transitory costs. I know you're not completely refined, but it still seems like a very, very easy comp that doesn't seem to be baked in the guidance. I'm hoping you can provide a little bit more of a walk.
Yeah, John, I know I saw what you had published back in December where you broke things out a little more specifically about expectations from sort of different of the expense line items. As I mentioned earlier, for net cost to maintain overall, we do expect to be up about 3%. I know you had a number out there that I think was down 4%. Of course, with our better fourth quarter performance, I think that number adjusts to something that's probably closer to down 2%. There's certainly a disconnect from what you thought we would be with what was happening in the repairs and maintenance world versus where our guidance has come out. It might be best for us just to try to talk offline to give you more information to help you try to bridge the gap between the two.
At the end of the day, we had some good guides, we had some tough items that should help us from a comparable perspective. We also have to take into account where we think cost inflation is going on a year-over-year basis, if none of that was happening. We don't need to get a discussion on it now as to what your assumption was there versus what ours was. Overall, we think we've set ourselves up for the number that is achievable on all the expenses, where we can get there. Of course, we're going to do our best to try to do better. With some areas where we had some negative one-timers last year, hopefully that sets us up to do a little bit better.
Also lesson learned from last year, we want to go out and make sure we put out numbers that are achievable, that we feel good about, and that we're confident in.
Okay. A follow-up on Wes's question around expense variability. I'm less concerned about what happened in 2018 and 2019, but just trying to figure out this business over the next 3-5 years. Using Q4 2018 as a case study to do that, full year 2018 expenses come in well below the revised guidance range, and 50% of your expenses actually hit your expectation. With two months left of the year, that implies huge variability for the rest of the line items. I know I've asked this question in the past, but it seems that this business model is going to have a lot more variability on expenses versus multifamily. Do you believe that to be the case? A little bit of color there would be great.
Yeah. No, John, what I would tell you is. I can speak for us. I don't want to speak broadly for the business. There's two companies that are public companies. The other company does a great job with what they do, and they certainly speak to their strengths and what they do well. Just talk about Invitation Homes. Went through a big merger in 2018. It was a little bit of where so many things went well for us, it was a little bit of surprise and caught us off guard about having some issues on the R&M side. As we were wrapping up the third quarter and preparing for the third quarter call and felt that it was appropriate to revise our guidance, we wanted to do it in a way that we were confident we wouldn't miss. In hindsight, we overshot.
I would have rather have done that than not. It turns out that the work that's being led by Charles and Tim Lobner and all our folks in the field, they did even better than our wildest expectations in moving some of these things forward. There are still more to go. I don't want to draw too much conclusion, John, just from one quarter. You said the right thing. Let's look over the long term. Over the long term, some of these companies have been in this public for a long time, and certainly Invitation Homes was before our merger, you didn't see that variability.
I think the majority of the variability is specific to some of the things that pop up when you bring two very large companies together that were doing things a little bit differently and how to get it all on, still not completely all on one platform. The proof will be in the pudding over the next couple of years. Will this business be a little bit more variable than multifamily? I guess I'd ask you to look back in the 1990s when the multifamily companies were doing mergers, when you saw that kind of activity, and go back and see what the variability was in their expenses when they were putting much smaller companies together. I suspect that they had similar variability. I think over time, it's a residential business that should be more predictable than other businesses.
I don't know comparable to multifamily, but certainly to other businesses. I know it's tough when we're in the moment, John, but we're looking at it long term, and we feel a lot better where we are today than we were a year ago for sure. We're all hoping. We want to see less variability as expenses are going on, and we think we're going to continue to earn into that less variability as we continue to move forward.
All right. That's fair. Thanks, Ernie.
Got it.
The next question will be from Ryan Gilbert of BTIG. Please go ahead.
Hi. Thanks, guys. Understand that the demand for a single-family rental product looks strong on an overall basis, but are there any markets in particular where you're seeing elevated move-outs to buy or maybe just lower than expected traffic from potential renters?
No, this is Charles. We really haven't seen it. Demand, as we said, has really been strong across the board. Our turnover has been low, which has been great. Affordability is working in our favor. You can see our occupancy grow in Q4 and continue into January. In addition to our rent growth in January was up across almost all of our markets on a blended basis. We're optimistic on how we're going into the year. There's always a few markets that we can see improvement, and we've already started to see that in January. Clearly, we're being led with a lot of the West Coast markets and the demand that's out there.
Okay, good. Thanks. How does the labor market feel for your field on repairs and maintenance property technicians? I understand it was pretty tight last year. Has there been any change in your ability to source labor, either positively or negatively?
Yeah. The markets are tight, but we haven't seen any impact to our business on that perspective. I think we have a couple of real positive structural advantages as you think around how long our leadership has been here, our scale that we have. If we do lose somebody, we have a deep bench of talent that we can pull from. Ultimately, our employees enjoy our high dynamic environment and our mission of serving our residents. We know that's been a conversation over the summer, and we're watching it closely, but we haven't seen any material impact to our techs.
Okay, great. Thanks very much.
The next question will be from Haendel St. Juste of Mizuho. Please go ahead.
Hey. I guess good morning out there.
Hey, Haendel. Good morning.
First, Dallas, I guess, congratulations. I'm curious if there is perhaps anything where your view may differ at all from your predecessor. Like, say perhaps, doing single-family rental development in-house, maybe more meaningful changes on the geographic footprint, target leverage, or anything else of that nature.
That's a good question. Fair question. Thank you for the congratulations. Look, I think if Fred were here, I were here, quite frankly, any of the other leadership that have been a part of Invitation Homes, our mission's been pretty consistent in terms of making sure that we had scale density and high touch, high-quality service, and good location. I think what Fred, my predecessor, brought to the table was this eye single towards some of the tech enhancements that were available to us. Charles and Fred were cutting edge in terms of smart home capabilities, some of those things that they're doing really well. We've obviously adopted that. I think as you think through what we believe kind of butters the bread, so to speak, is just that consistent, pragmatic approach to how you run your business. That won't change.
What I talked earlier in my prepared remarks about staying true to our DNA, and our DNA, you guys probably get sick of hearing it, but I would rather pay for the right locations and make sure that we have infill dynamics happening around our portfolio than look for scale and growth opportunities where I've got to be outside of, call it infill locations. I think, we don't differ all that much. The good news is we've taken the best from both organizations on the path forward. Charles and I work very well together. Ernie and I have worked together now for 3+ years. We've got a nice energy amongst the management team, we're excited to really push forward.
I think to some of the earlier questions around what are the opportunities for growth, we certainly see quite a bit of organic growth inside of our portfolio today that we can still go capture. Charles was right when he said that we want to focus on making sure we finish the integration, but we've got a playbook of things that we're thinking about that we want to try to roll out over the next couple of years that we think will not only enhance the value of the real estate and the rents but make the customer stickier. I think if we get really good at that piece of our business, we're not going to be talking about the history of Invitation Homes. It's about where are we going.
Helpful. Thank you. Another question, I guess, on the same-store expense outlook. I'm curious how much asset sales might be helping that line item, and then if you'd confirm if the assets that you're contemplating selling are included in the same-store pool and in that same-store expense guide.
I would say the assets that we have sold over the last period of time has been kind of neutral to our results. As things came out from the bulk dispositions, we saw what the numbers looked like before and after. It really didn't have a material impact with regards to what our numbers would've been for 2018. For 2019, Haendel, there's homes that we've identified for sale, and we vacated them. That's when we take them out of same-store because those would specifically be homes we're trying to sell to end users, not through a bulk disposition.
If there's homes that were identified for sale that we think might go through a bulk disposition and they remain occupied, those we will keep in same-store until we get to the point where we have them under contract, we have a hard deposit, and it's highly certain that the transaction's going to happen. What will happen is, throughout the year, you will see some homes move out of same-store as they kind of go through the process and are identified for sale. The answer's a little bit of both. Some of them are out of same-store today, but there will be some that we sell today that are currently in same-store.
Okay. Thanks. Last one from me. You've mentioned Seattle and California being some of your better markets. I'm curious, what are the more challenging markets, and then what type of delta are you projecting in terms of revenue between the upper and lower end of your portfolio in terms of revenue?
This is Charles. I'll jump in on the markets where we see opportunity. If you look in the results we put out, Dallas, Denver, Houston, occupancy was below where we wanted. We've seen a really nice trajectory in all three markets. Dallas has moved up into the 95s, and we've seen really good blended rent growth increase in January as well. We've sustained that occupancy. Denver's on a really nice move. We finished January above 95.2, and February continues to rise with blended rent growth also going. Houston, we've maintained our occupancy up to 95. Rent growth kind of flat. We see those as markets that will continue to get better throughout the year. If you look back over 2018, we made really good progress on our Florida markets, and with such a large presence there.
Orlando's been strong for us all year, but Tampa and South Florida have really come along. We're excited about getting the whole portfolio balanced and operating similar to what we've seen out in the West Coast and our Atlanta markets.
Quickly on Tampa, I recall there being the issue last year with some of the personnel. Can you quickly update us on that, where that stands? Personnel back in place, regional or local property management teams fully operating, and everything is, I guess, back to where you want it there? Can you maybe give some color on that?
Yeah, we're in really good shape in Tampa. A lot of the noise you just discussed was early in the year. We were able to address it quickly as we talked about, and part of that is showing up in our results in Q4, on both the top line and the bottom line. We feel really good around where Tampa stands for us.
Thank you.
Thanks, Haendel.
The final question today will be from Anthony Paolone of J.P. Morgan. Please go ahead.
Thanks. Headliner. Thanks for the disposition and acquisition guidance nets to zero. How'd you think about that versus maybe just reducing leverage a little bit faster?
Well, it's a great question. We have to have a base case scenario, and we feel very comfortable. To Ernie's earlier points on guidance, with the guidance we're putting out, we think we can acquire accretively somewhere between $3 million and $500 million. We think we can also recycle easily between $3 million and $500 million on the sales side. Certainly, if there's something opportunistic where we look at a situation that it might make sense, we could look at selling or buying more. I would say the base case scenario that we laid out will help us achieve our goals.
We want to make sure that we have kind of an eye focus single to getting to investment grade. We know that by culling and selling the parts of the portfolio where we're seeing underperformance, either recycling that capital or prepaying debt will put us on that path to that investment-grade balance sheet that we ultimately want. Ernie, I don't know if you want to add anything to that.
That's good
I think that's generally how we feel about it, Anthony.
Okay, thanks. You talked a lot about rate and occupancy, and those drivers to the same-store revenue picture. Is there anything appreciable to think about through either revenue management or other income that might contribute or not in 2019?
Yeah. We think other income will probably grow at a little bit less of a pace than it did in 2018, but not significantly so. Again, that's our base case to get to our midpoint of our guidance. From a revenue management perspective overall, the team's doing a great job under Dallas and Charles's leadership to continue trying to optimize. What we've seen, especially where we talked about it going into the fourth quarter, we felt really good going into the off-season being highly occupied. Charles talked about where the January numbers are. It's really putting us in a position to be more offensive than we've been in the last couple of years as we get into peak leasing season. Hopefully, that's not the wrong way to say it, more offensive. We're just really pleased with where we're at basically, and we can optimize.
The team's doing a nice job there, and again, it's just another year of knowledge of both portfolios and teams working together. That sets us up. We're set up well for what we need to start accomplishing as we get to March, April, and May.
You think that the revenue management's actually been part of the driver to kind of the strong occupancy and some of this rate growth?
Yeah, this is Charles. Absolutely. That was one of the first parts of the combined company that we put together, and once we got under the hood, we were able to take best practices of both, and it showed up early in the year, but by the second half of the year, we really hit our stride, and it's showing up well in Q4 and continues into 2019.
Okay, thanks. Then last question, just on G&A, you kind of talked about that. Just on non-cash comp, any appreciable difference in 2019 versus 2018 on that front?
Yeah, there will be because a lot of that non-cash comp that came from the IPO finished its vesting in early part of 2019. The majority of that expense was recognized in 2017 and 2018. The non-cash comp around share-based comp does come down materially. We had a question about that earlier, too, Tony. Let me just think about how we can get something out there so folks can get more comfortable about modeling that. It doesn't come into our core EPS phone number because it's been so volatile. Going forward, it'll be much less volatile, but now that we're past the two-year point, and there was a vesting period on the equity grants associated with the IPO for those folks at Invitation Homes who were here for that. We'll get to much more of what I call a normalized run rate of share-based comp.
Greg and I put our heads together, and we'll try to figure out a way that we can provide some more help there for folks.
Okay, great. Thank you.
Ladies and gentlemen, this will conclude our question and answer session. I would like to hand the conference back over to Dallas Tanner for his closing remarks.
Thank you again for joining us today. We appreciate your interest, and the team looks forward to seeing many of you in March. Operator, this concludes our call.
Thank you, sir. Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. At this time, you may disconnect your lines.