Buyers emerge for Silver Bay Realty after earnings


Revenue gained 40% Q/Q to $10.7M as 1,197 previously vacant homes were leased. Net operating income of $3.1M up 79% from Q1. GAAP income remains negative ($6.8M or $0.18 per share) as many homes still in renovation or leasing stage.

Company owns 5,571 single family homes, up 21% Q/Q. 985 additional properties acquired in Q2.

New metric introduced: Estimated net asset value per share of $18.95 based on estimated fair value of properties. Book value - which contains no estimate of property price appreciation - is $17.30 per share.

Occupancy rate for stabilized properties of 94% up 200 bps from Q1. Rate for properties owned 6 months or more of 87% up 600 bps. Rate for entire portfolio of 65% up 1200 bps. Average monthly rent of $1,148 down $8. (PR)

Notes from earnings call (transcript):

Pace of property purchases has slowed in Q3 as company focuses on getting the ones they already own up to snuff and rented out.

The company has not yet repurchased any stock (buyback authorization of 2.5M shares came on July 1).

JPMorgan's Anthony Paolone tries to draw management out on if repair and maintenance costs are going according to plan, and CFO Christine Battist allows that they're a bit higher than anticipated. COO Pat Freydberg says there's not a material difference from expectations, though he'd like to see a higher volume of data before drawing conclusions.

SBY +3.5%. Other single family names: American Homes 4 Rent (AMH +2.4%), American Residential Properties (ARPI +2%).

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