And I say that in the plural sense in a way that it is a very commercial relationship over time and distance where we are a small part of what they do, but we do it in such a meaningful way and try to be a great partner that it’s a no-brainer that we should try to do as much as we can together.
Scott Eisen: And hey, Conor it’s Scott. The only other thing I would add here is look a builder it gives them confidence to take on a larger project and create more homes when they know that Invitation Homes is going to be buying a portion of that project. And so as a result maybe they might only start a 200-home community, but with us as their partner, they might start a 300-home community. Also as you asked about the relative pricing, remember they’re saving on things like sales and marketing costs when they work with us because they’re not actually having to go out in the market and market those homes themselves. And then lastly, I think I would add that in terms of when we get deliveries, we get deliveries on average between eight and 10 homes a month from a builder when normally they might maybe be selling three to five homes a month from through the retail market.
So, you put all those three things together, it’s a reason why what we’re doing is accretive to the builders and frankly supplement what they try to do in terms of selling to individual retail customers.
Operator: Our last question today will come from Buck Horne from Raymond James. Please go ahead, your line is open.
Buck Horne: Yes, thanks. I just want to follow up on that a little bit here because I guess the question from my mind on this topic is that you’re not the only one in the market trying to negotiate deals with builders and it’s obviously really hot topic. And so there’s a lot of capital chasing deals with builders. But I guess you’re talking about still being able to negotiate those 6% yield on cost numbers, when everyone else is kind of saying maybe those numbers are in the 4s. I guess, what’s the secret sauce or is there a secret sauce, other than, what you guys have described so far to achieving those kinds of numbers?
Dallas Tanner: Really good question. And I appreciate you following up back, because maybe I didn’t answer this very well in the question before. It centers around predictability. We have predictability in our operating margins. We have predictability in showing up and closing. We have a really great track record in the market, with M&A and with the ability to close when asked to. Our operating margins, which by the way I think would add to a lot of the inbound interest we’ve had in 3 p.m. are an attractive thing for investors, and I think they’re an attractive thing for operators in the marketplace. We see very quickly, in just some of the transactions we’ve looked at and are doing in 3 p.m. immediate margin pickup for our partners, just by doing a couple of things differently.
And so — and a lot of that, as you know, Buck has to do a scale. When you have a business that’s 97.5% occupied, growing revenue in the mid-5s and we’re now in a decelerating cost environment as we view property tax and cost of goods sold and all these things, like we could not have better blue sky situation for our business, as we think about the next couple of years. We’re positioned very nicely. We’re just getting started in our access to these homebuilder relationships like anything professionally that we’ve done in the first 12 years, these things develop over time and as you build trust. And I think for us, it’s the same way we approach our opportunities with the homebuilding industry. It’s the same way, we’re going to approach risk in 3:00 p.m. We want to work with the best and the most professional capital that’s out there, because those expectations we have of each other matter, and that will show up and do the things that we said we’ll do equally matter.
I think that’s going to lend itself to conditional outperformance, as you look at that Buck to your question, specifically, relative to maybe other operators that are in the space that don’t have the scale or the capacity or the ability to close on this kind of scale, and to seamlessly integrate it. So, I give Charles in the field, and Jon in the back office, all the kudos as Scott and his team, are out there developing these relationships and trying to build, what will be the next decade of growth for Invitation Homes. The SFR industry is going to be about bringing new housing supply, into the marketplace. That is the narrative, as I see it for the next several years. It’s going to be about creating new product, bringing new product into these markets and doing it at yields.
But to your point, that makes sense, and on a risk-adjusted basis, a total return profile that makes sense for us and our shareholders.
Operator: This completes our question-answer session. I would now like to turn the conference back over to Dallas Tanner for any closing remarks.
Dallas Tanner: We thank everyone for attending our call. We’re grateful for your participation. We look forward to seeing everybody at NAREIT in June. Thank you for your time today.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
