--- ticker: INVH company: INVH filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 1 risks_removed: 1 risks_modified: 13 risks_unchanged: 55 source: SEC EDGAR url: https://riskdiff.com/invh/2025-vs-2024/ markdown_url: https://riskdiff.com/invh/2025-vs-2024/index.md generated: 2026-06-01 --- # INVH: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 1 | | Risks removed | 1 | | Risks modified | 13 | | Unchanged | 55 | --- ## New in Current Filing: We may face risks in connection with Section 1031 exchanges. We may dispose of real property in a transaction intended to qualify as a like-kind exchange under Section 1031 of the Code ("Section 1031 Exchange"). As a result, we may not have immediate access to the cash proceeds that are required to be held by an intermediary. In addition, if a transaction intended to qualify as a Section 1031 Exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of real property on a tax-deferred basis. --- ## No Match in Current: We are employing a business model with a limited track record, which may make our business difficult to evaluate. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Until recently, the single-family rental business was comprised primarily of private and individual investors in local markets and was managed individually or by small, non-institutional owners and property managers. Our business strategy involves purchasing, renovating, maintaining, and managing a large number of residential properties and leasing them to qualified residents. Entry into this market by large, well-capitalized investors is a relatively recent trend, so few peer companies exist and none have yet established long-term track records that might assist us in predicting whether our business model and investment strategy can be implemented and sustained over an extended period of time. It may be difficult to evaluate our potential future performance without the benefit of established long-term track records from companies implementing a similar business model. We may encounter unanticipated problems as we continue to refine our business model, which may adversely affect our results of operations and ability to make distributions to our stockholders and cause our stock price to decline significantly. --- ## Modified: We may not be able to effectively manage our growth, and any failure to do so may have an adverse effect on our business and operating results. **Key changes:** - Reworded sentence: "Since commencing operations in 2012, we have grown rapidly, assembling a portfolio of 85,138 owned homes as of December 31, 2024 and providing property and asset management services to portfolio owners of single-family residential 22 22 22 22 22 22 properties." **Prior (2024):** Since commencing operations in 2012, we have grown rapidly, assembling a portfolio of approximately 85,000 owned homes as of December 31, 2023 and providing property and asset management services to portfolio owners of single-family residential properties. Our future operating results may depend on our ability to effectively manage our growth, which is dependent, in part, upon our ability to: •stabilize and manage an increasing number of properties and resident relationships across our geographically dispersed portfolio while maintaining a high level of resident satisfaction and building and enhancing our brand; •identify and supervise a number of suitable third parties on which we rely to provide certain services outside of property management to our properties; •attract, integrate, and retain new management and operations associates; and •continue to improve our operational and financial controls and reporting procedures and systems. We can provide no assurance that we will be able to manage our properties or grow our business efficiently or effectively, or without incurring significant additional expenses. Any failure to do so may have an adverse effect on our business and operating results. **Current (2025):** Since commencing operations in 2012, we have grown rapidly, assembling a portfolio of 85,138 owned homes as of December 31, 2024 and providing property and asset management services to portfolio owners of single-family residential 22 22 22 22 22 22 properties. Our future operating results may depend on our ability to effectively manage our growth, which is dependent, in part, upon our ability to: •stabilize and manage an increasing number of properties and resident relationships across our geographically dispersed portfolio while maintaining a high level of resident satisfaction and building and enhancing our brand; •identify and supervise a number of suitable third parties on which we rely to provide certain services outside of property management to our properties; •attract, integrate, and retain new management and operations associates; and •continue to improve our operational and financial controls and reporting procedures and systems. We can provide no assurance that we will be able to manage our properties or grow our business efficiently or effectively, or without incurring significant additional expenses. Any failure to do so may have an adverse effect on our business and operating results. --- ## Modified: Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing. **Key changes:** - Reworded sentence: "These risks include: (1) our cash flow may not be sufficient to satisfy required payments of principal and interest; (2) we may not be able to refinance existing indebtedness or 40 40 40 40 40 40 the terms of any refinancing may be less favorable to us than the terms of existing debt; (3) required debt payments are not reduced if the economic performance of any property declines; (4) debt service obligations could reduce funds available for distribution to our stockholders and funds available for capital investment; (5) any default on our indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure; (6) the risk that necessary capital expenditures cannot be financed on favorable terms; and (7) the value of the collateral securing our indebtedness may fluctuate and fall below the amount of indebtedness it secures." **Prior (2024):** We are generally subject to risks associated with debt financing. These risks include: (1) our cash flow may not be sufficient to satisfy required payments of principal and interest; (2) we may not be able to refinance existing indebtedness or the terms of any refinancing may be less favorable to us than the terms of existing debt; (3) required debt payments are not reduced if the economic performance of any property declines; (4) debt service obligations could reduce funds available for distribution to our stockholders and funds available for capital investment; (5) any default on our indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure; (6) the risk that necessary capital expenditures 41 41 41 41 41 41 cannot be financed on favorable terms; and (7) the value of the collateral securing our indebtedness may fluctuate and fall below the amount of indebtedness it secures. If the income from a property is pledged to secure payment of indebtedness and we cannot make the applicable debt payments, we may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property. Any of these risks could place strains on our cash flows, reduce our ability to grow, and adversely affect our results of operations. Natural disasters, geopolitical turmoil, medical epidemics and pandemics, economic instability, or other causes could have material and adverse effect on our residents' ability to meet their lease obligations and our ability to collect rent or enforce remedies for failure to pay rent thereby reducing our cash flows, and the resulting impact on rental and other property income could impact our ability to make all required debt service payments and to continue paying dividends to our stockholders at expected levels or at all. See "Risks Related to Our Business Environment and Industry - Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease." **Current (2025):** We are generally subject to risks associated with debt financing. These risks include: (1) our cash flow may not be sufficient to satisfy required payments of principal and interest; (2) we may not be able to refinance existing indebtedness or 40 40 40 40 40 40 the terms of any refinancing may be less favorable to us than the terms of existing debt; (3) required debt payments are not reduced if the economic performance of any property declines; (4) debt service obligations could reduce funds available for distribution to our stockholders and funds available for capital investment; (5) any default on our indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure; (6) the risk that necessary capital expenditures cannot be financed on favorable terms; and (7) the value of the collateral securing our indebtedness may fluctuate and fall below the amount of indebtedness it secures. If the income from a property is pledged to secure payment of indebtedness and we cannot make the applicable debt payments, we may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property. Any of these risks could place strains on our cash flows, reduce our ability to grow, and adversely affect our results of operations. Natural disasters, geopolitical turmoil, medical epidemics and pandemics, economic instability, or other causes could have material and adverse effect on our residents' ability to meet their lease obligations and our ability to collect rent or enforce remedies for failure to pay rent thereby reducing our cash flows, and the resulting impact on rental and other property income could impact our ability to make all required debt service payments and to continue paying dividends to our stockholders at expected levels or at all. See "Risks Related to Our Business Environment and Industry - Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease." --- ## Modified: We may be unable to obtain financing through the debt and equity markets, which would have a material adverse effect on our growth strategy and our financial condition and results of operations. **Key changes:** - Reworded sentence: "41 41 41 41 41 41 Our access to additional third-party sources of financing will depend, in part, on: •fluctuating global and United States economic conditions, uncertainty in financial markets (including due to bank failures), and geopolitical tensions; •the market's perception of our growth potential; •with respect to acquisition financing, the market's perception of the value of the homes to be acquired; •our current debt levels; •our current and expected future earnings; •our cash flow and cash distributions; and •the market price of our common stock." - Reworded sentence: "Consequently, there is uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms." **Prior (2024):** We cannot assure you that we will be able to access the capital and credit markets to obtain additional debt or equity financing or that we will be able to obtain financing on terms favorable to us. Our inability to obtain financing could have negative effects on our business. Among other things, we could have difficulty acquiring, re-developing or maintaining, our properties, which would materially and adversely affect our business strategy and portfolio, and may result in our: (1) liquidity being adversely affected; (2) inability to repay or refinance our indebtedness on or before its maturity; (3) making higher interest and principal payments or selling some of our assets on terms unfavorable to us to service our indebtedness; or (4) issuing additional capital stock, which could further dilute the ownership of our existing stockholders. Our access to additional third-party sources of financing will depend, in part, on: •unfavorable global and United States economic conditions (including inflation and interest rates), uncertainty in financial markets (including due to bank failures), and geopolitical tensions; •the market's perception of our growth potential; •with respect to acquisition financing, the market's perception of the value of the homes to be acquired; •our current debt levels; •our current and expected future earnings; •our cash flow and cash distributions; and •the market price of our common stock. Potential lenders may be unwilling or unable to provide us with financing that is attractive to us or may charge us prohibitively high fees in order to obtain financing. Consequently, there is uncertainty regarding our ability to access the 42 42 42 42 42 42 credit markets in order to attract financing on reasonable terms. Investment returns on our assets and our ability to make acquisitions could be adversely affected by our inability to secure financing on reasonable terms, if at all. **Current (2025):** We cannot assure you that we will be able to access the capital and credit markets to obtain additional debt or equity financing or that we will be able to obtain financing on terms favorable to us. Our inability to obtain financing could have negative effects on our business. Among other things, we could have difficulty acquiring, re-developing or maintaining, our properties, which would materially and adversely affect our business strategy and portfolio, and may result in our: (1) liquidity being adversely affected; (2) inability to repay or refinance our indebtedness on or before its maturity; (3) making higher interest and principal payments or selling some of our assets on terms unfavorable to us to service our indebtedness; or (4) issuing additional capital stock, which could further dilute the ownership of our existing stockholders. 41 41 41 41 41 41 Our access to additional third-party sources of financing will depend, in part, on: •fluctuating global and United States economic conditions, uncertainty in financial markets (including due to bank failures), and geopolitical tensions; •the market's perception of our growth potential; •with respect to acquisition financing, the market's perception of the value of the homes to be acquired; •our current debt levels; •our current and expected future earnings; •our cash flow and cash distributions; and •the market price of our common stock. Potential lenders may be unwilling or unable to provide us with financing that is attractive to us or may charge us prohibitively high fees in order to obtain financing. Consequently, there is uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable terms. Investment returns on our assets and our ability to make acquisitions could be adversely affected by our inability to secure financing on reasonable terms, if at all. --- ## Modified: We may not be able to operate our business successfully or generate sufficient cash flows to make or sustain distributions to our stockholders. **Key changes:** - Removed sentence: "We have a limited operating history." - Removed sentence: "As a result, an investment in our common stock may entail more risk than an investment in the common stock of a real estate company with a substantial operating history." **Prior (2024):** We have a limited operating history. As a result, an investment in our common stock may entail more risk than an investment in the common stock of a real estate company with a substantial operating history. If we are unable to operate our business successfully, we would not be able to generate sufficient cash flow to make or sustain distributions to our stockholders, and stockholders could lose all or a portion of the value of their ownership in our common stock. Our ability to successfully operate our business and implement our operating policies and investment strategy depends on many factors, including: •our ability to effectively manage renovation, maintenance, marketing, and other operating costs for our properties; •economic conditions in our markets, including changes in employment and household earnings and expenses, as well as the condition of the financial and real estate markets and the economy, in general; •our ability to maintain high occupancy rates and target rent levels; •the availability of, and our ability to identify, attractive acquisition opportunities consistent with our investment strategy; •our ability to compete with other investors entering the single-family rental industry; •costs that are beyond our control, including title litigation, litigation with residents or tenant organizations, legal compliance, property taxes, insurance, and HOA fees; •judicial and regulatory developments affecting landlord-tenant relations that may affect or delay our ability to dispossess or evict occupants or increase rental rates; •reversal of population, employment, or homeownership trends in our markets; and •interest rate levels and volatility, which may affect the accessibility of short-term and long-term financing on desirable terms. In addition, we face significant competition in acquiring attractive properties on advantageous terms, and the value of the properties that we acquire may decline substantially after we purchase them. **Current (2025):** If we are unable to operate our business successfully, we would not be able to generate sufficient cash flow to make or sustain distributions to our stockholders, and stockholders could lose all or a portion of the value of their ownership in our common stock. Our ability to successfully operate our business and implement our operating policies and investment strategy depends on many factors, including: •our ability to effectively manage renovation, maintenance, marketing, and other operating costs for our properties; •economic conditions in our markets, including changes in employment and household earnings and expenses, as well as the condition of the financial and real estate markets and the economy, in general; •our ability to maintain high occupancy rates and target rent levels; •the availability of, and our ability to identify, attractive acquisition opportunities consistent with our investment strategy; •our ability to compete with other investors entering the single-family rental industry; •costs that are beyond our control, including title litigation, litigation with residents or tenant organizations, legal compliance, property taxes, insurance, and HOA fees; •judicial and regulatory developments affecting landlord-tenant relations that may affect or delay our ability to dispossess or evict occupants or increase rental rates; •reversal of population, employment, or homeownership trends in our markets; and •interest rate levels and volatility, which may affect the accessibility of short-term and long-term financing on desirable terms. In addition, we face significant competition in acquiring attractive properties on advantageous terms, and the value of the properties that we acquire may decline substantially after we purchase them. --- ## Modified: We may suffer losses that are not covered by insurance. **Key changes:** - Added sentence: "For example, in 2024, various parts of the United States and our properties in Texas, Florida, Atlanta, and the Carolinas were impacted by Hurricanes Beryl, Debby, Helene, and Milton, as well as by wildfires in California and other geographies." - Reworded sentence: "See "Risks Related to Sustainability, Corporate Responsibility, and Governance - We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather." While we have annual policies for earthquakes, hurricane, and/or flood risk, our properties may nonetheless incur casualty losses that are not fully covered by insurance." **Prior (2024):** We attempt to ensure that our properties are adequately insured to cover casualty losses. However, there are certain losses, including losses from floods, fires, earthquakes, wind, hail, pollution, acts of war, acts of terrorism or riots, certain environmental hazards, and security breaches for which we may self-insure or which may not always or generally be insured against because it may not be deemed economically feasible or prudent to do so. Changes in the cost or availability of insurance could expose us to uninsured casualty losses. In particular, a number of our properties are located in areas that are known to be subject to increased earthquake activity, fires, or wind and/or flood risk. Any and all such severe weather events may be exacerbated by global climate change, resulting in increased insurance premiums and deductibles, or a decrease in the availability of coverage. See "Risks Related to Environmental, Social, and Governance Issues - We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather." While we have annual policies for earthquakes, hurricane, and/or flood risk, our properties may nonetheless incur casualty losses that are not fully covered by insurance. In such an event, the value of the affected properties would be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenues in such properties and could potentially remain obligated under any recourse debt associated with such properties. Inflation, changes in building codes and ordinances, environmental considerations, and other factors might also keep us from using insurance proceeds to replace or renovate a 31 31 31 31 31 31 particular property after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position in the damaged or destroyed property. Any such losses could adversely affect us and cause the value of our common stock to decline. There can be no assurance that we are adequately insured to protect against potential casualty losses and liabilities, and we may elect to self-insure against certain potential losses, accept higher deductibles, utilize an insurance captive, or reduce the amount of coverage in response to excessive insurance premium increases. In addition, we may have no source of funding to repair or reconstruct the damaged home, and we cannot assure that any such sources of funding will be available to us for such purposes in the future. **Current (2025):** We attempt to ensure that our properties are adequately insured to cover casualty losses. However, there are certain losses, including losses from floods, fires, earthquakes, wind, hail, pollution, acts of war, acts of terrorism or riots, certain environmental hazards, and security breaches for which we may self-insure or which may not always or generally be insured against because it may not be deemed economically feasible or prudent to do so. Changes in the cost or availability of insurance could expose us to uninsured casualty losses. In particular, a number of our properties are located in areas that are known to be subject to increased earthquake activity, fires, or wind and/or flood risk. For example, in 2024, various parts of the United States and our properties in Texas, Florida, Atlanta, and the Carolinas were impacted by Hurricanes Beryl, Debby, Helene, and Milton, as well as by wildfires in California and other geographies. Any and all such severe weather events may be exacerbated by global climate change, resulting in increased insurance premiums and deductibles, or a decrease in the availability of coverage. See "Risks Related to Sustainability, Corporate Responsibility, and Governance - We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather." While we have annual policies for earthquakes, hurricane, and/or flood risk, our properties may nonetheless incur casualty losses that are not fully covered by insurance. In such an event, the value of the affected properties would be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenues in such properties and could potentially 30 30 30 30 30 30 remain obligated under any recourse debt associated with such properties. Inflation, changes in building codes and ordinances, environmental considerations, and other factors might also keep us from using insurance proceeds to replace or renovate a particular property after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position in the damaged or destroyed property. Any such losses could adversely affect us and cause the value of our common stock to decline. There can be no assurance that we are adequately insured to protect against potential casualty losses and liabilities, and we may elect to self-insure against certain potential losses, accept higher deductibles, utilize an insurance captive, or reduce the amount of coverage in response to excessive insurance premium increases. In addition, we may have no source of funding to repair or reconstruct the damaged home, and we cannot assure that any such sources of funding will be available to us for such purposes in the future. --- ## Modified: Our operating results are subject to general economic conditions and risks associated with our real estate assets. **Key changes:** - Reworded sentence: "Our operating results are subject to risks generally incident to the ownership and rental of residential real estate, many of which are beyond our control, including, without limitation: •fluctuating global and United States economic conditions, uncertainty in financial markets, and geopolitical tensions; •bank failures or other liquidity constraints affecting financial institutions; •changes in national, regional, or local economic, demographic, or real estate market conditions; •changes in job markets and employment levels on a national, regional, and local basis; •declines in the value of residential real estate; 19 19 19 19 19 19 •overall conditions in the housing market, including: •macroeconomic shifts in demand for rental homes; •inability to lease or re-lease homes to residents on a timely basis, on attractive terms or at all; •failure of residents to pay rent when due or otherwise perform their lease obligations; •unanticipated repairs, capital expenditures, weather related damages, or other costs; •uninsured damages; and •increases in property taxes, HOA fees, and insurance costs; •level of competition for suitable rental homes; •terms and conditions of purchase contracts; •costs and time period required to convert acquisitions to rental homes; •changes in the terms or availability of financing that may render the acquisition of any homes difficult or unattractive; •the liquidity of real estate investments, generally; •the short-term nature of most residential leases and the costs and potential delays in re-leasing; •changes in laws and regulations, including those that increase operating expenses or limit our ability to increase rental rates." **Prior (2024):** Our operating results are subject to risks generally incident to the ownership and rental of residential real estate, many of which are beyond our control, including, without limitation: •unfavorable global and United States economic conditions (including inflation and interest rates), uncertainty in financial markets, and geopolitical tensions; •bank failures or other liquidity constraints affecting financial institutions; •changes in national, regional, or local economic, demographic, or real estate market conditions; •changes in job markets and employment levels on a national, regional, and local basis; •declines in the value of residential real estate; •overall conditions in the housing market, including: •macroeconomic shifts in demand for rental homes; •inability to lease or re-lease homes to residents on a timely basis, on attractive terms or at all; •failure of residents to pay rent when due or otherwise perform their lease obligations; •unanticipated repairs, capital expenditures, weather related damages, or other costs; •uninsured damages; and •increases in property taxes, HOA fees, and insurance costs; •level of competition for suitable rental homes; •terms and conditions of purchase contracts; •costs and time period required to convert acquisitions to rental homes; •changes in the terms or availability of financing that may render the acquisition of any homes difficult or unattractive; •the liquidity of real estate investments, generally; •the short-term nature of most residential leases and the costs and potential delays in re-leasing; •changes in laws, including those that increase operating expenses or limit our ability to increase rental rates. See "Legal and Regulatory Related Risks - Eviction, tenant rights, rent control, and rent stabilization laws, and other similar laws and/or regulations that limit our ability to collect rent, enforce remedies for failure to pay rent, or increase rental rates may negatively impact our rental income and profitability;" •the impact of potential reforms relating to government-sponsored enterprises involved in the home finance and mortgage markets; 21 21 21 21 21 21 •rules, regulations and/or policy initiatives by government and private actors, including HOAs, to discourage or restrict the purchase or operation of single-family properties by entities owned or controlled by institutional investors; •the potential effects of climate change, related regulatory policies, legislation, and/or investor responses and expectations, and the transition to a lower-carbon economy; •disputes and potential negative publicity in connection with eviction proceedings; •construction of new supply; •costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems, such as indoor mold; •fraud by borrowers, originators, and/or sellers of mortgage loans; •undetected deficiencies and/or inaccuracies in underlying mortgage loan documentation and calculations; •casualty or condemnation losses; •the geographic mix of our properties; •the cost, quality, and condition of the properties we are able to acquire; and •our ability to provide adequate management, maintenance, and insurance. Any one or more of these factors could adversely affect our business, financial condition, and results of operations. **Current (2025):** Our operating results are subject to risks generally incident to the ownership and rental of residential real estate, many of which are beyond our control, including, without limitation: •fluctuating global and United States economic conditions, uncertainty in financial markets, and geopolitical tensions; •bank failures or other liquidity constraints affecting financial institutions; •changes in national, regional, or local economic, demographic, or real estate market conditions; •changes in job markets and employment levels on a national, regional, and local basis; •declines in the value of residential real estate; 19 19 19 19 19 19 •overall conditions in the housing market, including: •macroeconomic shifts in demand for rental homes; •inability to lease or re-lease homes to residents on a timely basis, on attractive terms or at all; •failure of residents to pay rent when due or otherwise perform their lease obligations; •unanticipated repairs, capital expenditures, weather related damages, or other costs; •uninsured damages; and •increases in property taxes, HOA fees, and insurance costs; •level of competition for suitable rental homes; •terms and conditions of purchase contracts; •costs and time period required to convert acquisitions to rental homes; •changes in the terms or availability of financing that may render the acquisition of any homes difficult or unattractive; •the liquidity of real estate investments, generally; •the short-term nature of most residential leases and the costs and potential delays in re-leasing; •changes in laws and regulations, including those that increase operating expenses or limit our ability to increase rental rates. See "Legal and Regulatory Related Risks - Eviction, tenant rights, rent control, and rent stabilization laws, and other similar laws and/or regulations that limit our ability to collect rent, enforce remedies for failure to pay rent, or increase rental rates may negatively impact our rental income and profitability;" •the impact of potential reforms relating to government-sponsored enterprises involved in the home finance and mortgage markets; •rules, regulations and/or policy initiatives by government and private actors, including HOAs, to discourage or restrict the purchase or operation of single-family properties by entities owned or controlled by institutional investors; •the potential effects of climate change, related regulatory policies, legislation, and/or investor responses and expectations, and the transition to a lower-carbon economy; •disputes and potential negative publicity in connection with eviction proceedings; •construction of new supply; •costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems, such as indoor mold; •fraud by borrowers, originators, and/or sellers of mortgage loans; •undetected deficiencies and/or inaccuracies in underlying mortgage loan documentation and calculations; •casualty or condemnation losses; •the geographic mix of our properties; •the cost, quality, and condition of the properties we are able to acquire; and •our ability to provide adequate management, maintenance, and insurance. Any one or more of these factors could adversely affect our business, financial condition, and results of operations. 20 20 20 20 20 20 --- ## Modified: Failure to hedge effectively against interest rate increases may adversely affect our results of operations and our ability to make distributions to our stockholders. **Key changes:** - Reworded sentence: "Borrowings under our debt instruments totaling $3,045.0 million as of December 31, 2024, bear interest at variable rates and expose us to interest rate risk." - Reworded sentence: ""Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and 43 43 43 43 43 43 Capital Resources" for more information), each 100 bps increase or decrease on our floating rate indebtedness would result in an estimated increase or decrease of $7.2 million in annual interest expense." - Reworded sentence: "See "Risks Related to our REIT Status and Certain Other Tax Items - Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities."" **Prior (2024):** Borrowings under our debt instruments totaling $3,868.0 million as of December 31, 2023, bear interest at variable rates and expose us to interest rate risk. In response to increasing inflation, the United States Federal Reserve began to raise short-term interest rates in March 2022 for the first time in over three years and continued raising rates throughout the first half of 2023. Recently, the Federal Reserve has signaled it expects to hold rates steady. Rising interest rates could lead to the increases in debt service obligations on our variable rate indebtedness even though the amount borrowed remained the same, and our earnings and cash flows could correspondingly decrease. After giving effect to our interest rate swap agreements (see Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" for more information), each 100 bps increase or decrease on our floating rate indebtedness would result in an estimated increase or decrease of $0.5 million in annual interest expense. In connection with our debt instruments, we have obtained interest rate caps and swaps, and subject to complying with the requirements for REIT qualification, we may obtain in the future one or more additional forms of interest rate protection (in the form of swap agreements, interest rate cap contracts, or similar agreements) to hedge against the possible negative effects of interest rate fluctuations. However, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder. In addition, we may be subject to risks of default by hedging counterparties. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable. We could be required to liquidate one or more of our investments at times which may not permit us to receive an attractive return on our investments in order to meet our debt service obligations. The REIT provisions of the Code may also limit our ability to hedge effectively. See "Risks Related to our REIT Status and Certain Other Tax Items - Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities." 44 44 44 44 44 44 **Current (2025):** Borrowings under our debt instruments totaling $3,045.0 million as of December 31, 2024, bear interest at variable rates and expose us to interest rate risk. Following a series of increases to combat inflation beginning in March 2022, the United States Federal Reserve began reducing short-term interest rates in September 2024. However, despite these reductions, long-term interest rates have remained elevated, driven by broader market factors. Elevated interest rates could lead to the increases in debt service obligations on our variable rate indebtedness even though the amount borrowed remained the same, and our earnings and cash flows could correspondingly decrease. After giving effect to our interest rate swap agreements (see Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and 43 43 43 43 43 43 Capital Resources" for more information), each 100 bps increase or decrease on our floating rate indebtedness would result in an estimated increase or decrease of $7.2 million in annual interest expense. In connection with our debt instruments, we have obtained interest rate caps and swaps, and subject to complying with the requirements for REIT qualification, we may obtain in the future one or more additional forms of interest rate protection (in the form of swap agreements, interest rate cap contracts, or similar agreements) to hedge against the possible negative effects of interest rate fluctuations. However, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder. In addition, we may be subject to risks of default by hedging counterparties. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable. We could be required to liquidate one or more of our investments at times which may not permit us to receive an attractive return on our investments in order to meet our debt service obligations. The REIT provisions of the Code may also limit our ability to hedge effectively. See "Risks Related to our REIT Status and Certain Other Tax Items - Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities." --- ## Modified: Our strategy to acquire homes from third-party homebuilders could subject us to significant risks that could adversely affect our financial condition, cash flows, and operating results, and the strategy may be restricted by governmental regulations and zoning requirements. **Key changes:** - Reworded sentence: "We rely on builder counterparties to acquire land suitable for residential building in our markets and to deliver quality homes at reasonable prices in a timely manner, in accordance with agreed to specifications." - Reworded sentence: "Governmental laws, regulations, and zoning requirements may be imposed that restrict our ability to purchase homes from third-party homebuilders that are intended for rental purposes in areas where we would like to invest." **Prior (2024):** We expect to continue entering into contracts with homebuilder counterparties for the acquisition of new homes. Pursuant to these contracts, homes will be delivered to us pursuant to a negotiated delivery schedule. We have made commitments for future fundings, and there can be no assurance that funding will be available to us for such purposes. Additionally, if home values decline subsequent to when we entered into contracts with homebuilder counterparties, we may not be able to adjust our contractual acquisition prices to reflect the decreased home values. This strategy depends on the performance of our counterparties and the ability of homebuilders to develop new homes specifically for our purchase. We rely on builder counterparties to acquire land suitable for residential building in our markets, and to deliver quality homes at reasonable prices in a timely manner, in accordance with agreed to specifications. A failure of builder counterparties to perform in accordance with the terms of our agreements, could have a material adverse effect on our business. Further, poor performance by homebuilder counterparties may reflect poorly on us and could damage our reputation. Additionally, governmental laws, regulations, and zoning requirements may be imposed that restrict our ability to purchase homes from third-party homebuilders that are intended for rental purposes in areas where we would like to invest. 29 29 29 29 29 29 **Current (2025):** We expect to continue entering into contracts with homebuilder counterparties for the acquisition of new homes. Pursuant to these contracts, homes will be delivered to us pursuant to a negotiated delivery schedule. We have made commitments for future fundings, and there can be no assurance that funding will be available to us for such purposes. Additionally, if home values decline subsequent to when we entered into contracts with homebuilder counterparties, we may not be able to adjust our contractual acquisition prices to reflect the decreased home values. This strategy depends on the performance of our counterparties and the ability of homebuilders to develop new homes specifically for our purchase. We rely on builder counterparties to acquire land suitable for residential building in our markets and to deliver quality homes at reasonable prices in a timely manner, in accordance with agreed to specifications. A failure of builder counterparties to perform in accordance with the terms of our agreements, could have a material adverse effect on our business. Further, poor performance by homebuilder counterparties may reflect poorly on us and could damage our reputation. Governmental laws, regulations, and zoning requirements may be imposed that restrict our ability to purchase homes from third-party homebuilders that are intended for rental purposes in areas where we would like to invest. Managing newly constructed communities presents specific risks to our business, such as the inability to lease newly-constructed rental homes at anticipated rates, resulting in underperformance of investment returns. Factors such as adverse site selection, inclement weather delaying construction or occupancy, and other risks can exacerbate these challenges. Failure to achieve occupancy or rental income targets for newly constructed communities may adversely impact our growth and results of operations. 28 28 28 28 28 28 --- ## Modified: Increasing property taxes, insurance costs, and HOA fees may negatively affect our financial results. **Key changes:** - Added sentence: "Current and potential impacts of climate change along with the increased risk of extreme weather events and natural disasters have caused significant increases in our property insurance premiums and may adversely affect the availability and terms of coverage in the future." - Added sentence: "See "Risks Related to our Business and Operations - We may suffer losses that are not covered by insurance." Additionally, "social inflation" caused the cost of general liability claims to rise at a rate above general economic inflation, primarily due to a trend in increasing litigation costs related to unpredictable jury verdicts for plaintiffs seeking large monetary relief for their injuries." - Added sentence: "In general, these factors have put pressure on insurance premiums 21 21 21 21 21 21 and made it more challenging to obtain appropriate insurance coverage at reasonable rates without the assumption of increasingly higher levels of self-retained risk." **Prior (2024):** As a result of our substantial real estate holdings, the cost of property taxes and insuring our properties is a significant component of our expenses. Our properties are subject to real and personal property taxes that may increase as tax rates change and as the real properties are assessed or reassessed by taxing authorities. As the owner of our properties, we are responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, our expenses will increase. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale. In addition, a significant portion of our properties are located within HOAs, and we are subject to HOA rules and regulations. HOAs have the power to increase monthly charges and make assessments for capital improvements and common area repairs and maintenance. Property taxes, insurance costs, and HOA fees may be subject to significant increases, which can be outside of our control. If the costs associated with property taxes, insurance, or HOA fees and assessments rise significantly and we are unable to increase rental rates due to current market conditions, rent control laws, or other regulations to offset such increases, our results of operations would be negatively affected. **Current (2025):** As a result of our substantial real estate holdings, the cost of property taxes and insuring our properties is a significant component of our expenses. Our properties are subject to real and personal property taxes that may increase as tax rates change and as the real properties are assessed or reassessed by taxing authorities. As the owner of our properties, we are responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, our expenses will increase. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale. Current and potential impacts of climate change along with the increased risk of extreme weather events and natural disasters have caused significant increases in our property insurance premiums and may adversely affect the availability and terms of coverage in the future. See "Risks Related to our Business and Operations - We may suffer losses that are not covered by insurance." Additionally, "social inflation" caused the cost of general liability claims to rise at a rate above general economic inflation, primarily due to a trend in increasing litigation costs related to unpredictable jury verdicts for plaintiffs seeking large monetary relief for their injuries. In general, these factors have put pressure on insurance premiums 21 21 21 21 21 21 and made it more challenging to obtain appropriate insurance coverage at reasonable rates without the assumption of increasingly higher levels of self-retained risk. In addition, a significant portion of our properties are located within HOAs, and we are subject to HOA rules and regulations. HOAs have the power to increase monthly charges and make assessments for capital improvements and common area repairs and maintenance. Property taxes, insurance costs, and HOA fees may be subject to significant increases, which can be outside of our control. If the costs associated with property taxes, insurance, or HOA fees and assessments rise significantly and we are unable to increase rental rates due to current market conditions, rent control laws, or other regulations to offset such increases, our results of operations would be negatively affected. --- ## Modified: Compliance with existing governmental laws, regulations, and covenants (or those that may be enacted in the future) that are applicable to the properties we own and manage on behalf of others, including affordability covenants, permit, license, and zoning requirements, may adversely affect our ability to make future acquisitions, renovations, or dispositions, result in significant costs, delays, or losses, and adversely affect our growth strategy. **Key changes:** - Reworded sentence: "Rental homes are subject to various federal, state, and local laws and regulatory requirements, including permitting, licensing, and zoning requirements, some of which may conflict with one another or have limited judicial or regulatory interpretations." - Reworded sentence: "Local regulations, including municipal or local ordinances, restrictions, and restrictive covenants imposed by community developers may restrict our or the use of our properties and may require us to obtain approval from local officials or community standards 32 32 32 32 32 32 organizations at any time with respect to our properties, including prior to acquiring any of our properties or when undertaking renovations of any of our existing properties." **Prior (2024):** Rental homes are subject to various federal, state, and local laws and regulatory requirements, including permitting, licensing, and zoning requirements. Brokerage of real estate leasing transactions and the provision of property management services require us and our associates to maintain applicable licenses in each state in which we perform these services. If we and our associates fail to maintain our licenses, conduct these activities without a license, or violate any of the regulations covering our licenses, we may be required to pay fines or return commissions received or have our licenses suspended or revoked. Local regulations, including municipal or local ordinances, restrictions, and restrictive covenants imposed by community developers may restrict our or the use of our properties and may require us to obtain approval from local officials or community standards organizations at any time with respect to our properties, including prior to acquiring any of our properties or when undertaking renovations of any of our existing properties. Among other things, these restrictions may relate to fire and safety, seismic, asbestos-cleanup, or hazardous material abatement requirements. Such local regulations may cause us to incur additional costs to renovate or maintain our properties in accordance with the particular rules and regulations. Additionally, state and local agencies may place affordability covenants on certain properties to ensure that they are used to provide affordable housing for persons or families of lower income. If any of our properties contain affordability covenants recorded in their chains of title, we will be forced to sell such properties at a maximum price limit as calculated per the applicable affordable housing covenant, which will likely result in us having to sell such properties below their market values. Our properties are also subject to federal, state, and local accessibility requirements, including and in addition to those imposed by the Americans with Disabilities Act and the Fair Housing Act. Any violation by us of the laws and regulations we are subject to could lead to significant fines or penalties and could limit our ability to conduct business. We cannot assure you that existing regulatory policies will not adversely affect us or the timing or cost of any future acquisitions, renovations, or dispositions, or that additional regulations will not be adopted that would increase such delays or result in additional costs or losses. Our business and growth strategies may be materially and adversely affected by our ability to obtain permits, licenses, and approvals. Our failure to obtain such permits, licenses, and approvals could have a material adverse effect on us and cause the value of our common stock to decline. **Current (2025):** Rental homes are subject to various federal, state, and local laws and regulatory requirements, including permitting, licensing, and zoning requirements, some of which may conflict with one another or have limited judicial or regulatory interpretations. In light of the recent change in administration in the United States, there is considerable uncertainty and potential conflict regarding and among existing laws, judicial orders and bans, new presidential executive orders, regulatory frameworks, leadership changes, and enforcement priorities and strategies, further complicating regulatory compliance. A disparity between federal and state regulations increases the likelihood of heightened state regulatory risk, as compliance with federal standards may not fully align with more stringent or divergent state-level requirements. Brokerage of real estate leasing transactions and the provision of property management services require us and our associates to maintain applicable licenses in each state in which we perform these services. If we and our associates fail to maintain our licenses, conduct these activities without a license, or violate any of the regulations covering our licenses, we may be required to pay fines or return commissions received or have our licenses suspended or revoked. Local regulations, including municipal or local ordinances, restrictions, and restrictive covenants imposed by community developers may restrict our or the use of our properties and may require us to obtain approval from local officials or community standards 32 32 32 32 32 32 organizations at any time with respect to our properties, including prior to acquiring any of our properties or when undertaking renovations of any of our existing properties. Among other things, these restrictions may relate to fire and safety, seismic, asbestos-cleanup, or hazardous material abatement requirements. Such local regulations may cause us to incur additional costs to renovate or maintain our properties in accordance with the particular rules and regulations. Additionally, state and local agencies may place affordability covenants on certain properties to ensure that they are used to provide affordable housing for persons or families of lower income. If any of our properties contain affordability covenants recorded in their chains of title, we will be forced to sell such properties at a maximum price limit as calculated per the applicable affordable housing covenant, which will likely result in us having to sell such properties below their market values. Our properties are also subject to federal, state, and local accessibility requirements, including and in addition to those imposed by the Americans with Disabilities Act and the Fair Housing Act. Any violation by us of the laws and regulations we are subject to could lead to significant fines or penalties and could limit our ability to conduct business. We cannot assure you that existing regulatory policies will not adversely affect us or the timing or cost of any future acquisitions, renovations, or dispositions, or that additional regulations will not be adopted that would increase such delays or result in additional costs or losses. Our business and growth strategies may be materially and adversely affected by our ability to obtain permits, licenses, and approvals. Our failure to obtain such permits, licenses, and approvals could have a material adverse effect on us and cause the value of our common stock to decline. --- ## Modified: We are subject to increasing scrutiny from investors and others regarding our sustainability responsibilities, which could result in additional costs or risks and adversely impact our reputation, associate attraction and retention, and ability to raise capital. **Key changes:** - Reworded sentence: "Investor advocacy groups, certain institutional investors, investment funds, other market participants, and stakeholders have focused increasingly on sustainability practices of companies, including those associated with climate change." - Reworded sentence: "If our sustainability practices do not meet investor or other industry stakeholder expectations and standards (including any third-party ratings used by stakeholders), which continue to evolve, our reputation, our ability to attract or retain associates, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected." - Reworded sentence: "For example, boycott bills in certain states target financial institutions that are perceived as "boycotting" or "discriminating against" companies in certain industries and prohibit state entities from doing business with such institutions and/or investing the state's assets (including pension plan assets) through such institutions." **Prior (2024):** Investor advocacy groups, certain institutional investors, investment funds, other market participants, and stakeholders have focused increasingly on the ESG or "sustainability" practices of companies, including those associated with climate change. These parties have placed increased importance on the implications of the social cost of their investments. If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our reputation and associate retention may be negatively impacted based on an assessment of our ESG practices. Any sustainability disclosures we make may include our policies and practices on a variety of social and ethical matters, including corporate governance, environmental compliance, associate health and safety practices, human capital management, product quality, supply chain management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption. We could also incur additional costs and require additional resources to monitor, report, and comply with various ESG practices. In addition, investors may decide to refrain from investing in us as a result of their assessment of our approach to and consideration of the ESG factors. Conversely, anti-ESG sentiment has gained some momentum across the United States. ESG detractors may criticize our sustainability initiatives or take actions against us like boycotts or adverse media campaigns. Moreover, several states have enacted or proposed "anti-ESG" policies or legislation. For example, (i) boycott bills in certain states target financial institutions that are perceived as "boycotting" or "discriminating against" companies in certain industries and prohibit state entities from doing business with such institutions and/or investing the state's assets (including pension plan assets) through such institutions; and (ii) ESG investment prohibitions in certain states require that relevant state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of ESG factors. Failure to successfully manage divergent ESG-related expectations across stakeholders could erode stakeholder trust, impact our reputation, and adversely affect our business. **Current (2025):** Investor advocacy groups, certain institutional investors, investment funds, other market participants, and stakeholders have focused increasingly on sustainability practices of companies, including those associated with climate change. These parties have placed increased importance on the implications of the social cost of their investments. If our sustainability practices do not meet investor or other industry stakeholder expectations and standards (including any third-party ratings used by stakeholders), which continue to evolve, our reputation, our ability to attract or retain associates, our ability to access capital, and our attractiveness as an investment or business partner could be negatively affected. Any sustainability disclosures we make may include our policies and practices on a variety of social and ethical matters, including corporate governance, environmental initiatives, associate health and safety practices, human capital management, product quality, and supply chain management. If our sustainability practices do not meet investor or other stakeholder expectations and standards, we could also incur additional costs and require additional resources to monitor, report, and comply with various sustainability practices. Conversely, "anti-ESG" sentiment has gained momentum across the United States. We could be criticized by "anti-ESG" stakeholders for our sustainability initiatives or become the subject of adverse media campaigns. Moreover, several states have enacted or proposed "anti-ESG" policies or legislation. For example, boycott bills in certain states target financial institutions that are perceived as "boycotting" or "discriminating against" companies in certain industries and prohibit state entities from doing business with such institutions and/or investing the state's assets (including pension plan assets) through such institutions. In addition, certain states now require that relevant state entities or managers/administrators of state investments make investments based solely on pecuniary factors without consideration of environmental, social, and governance factors. Failure to successfully manage divergent expectations across stakeholders could erode stakeholder trust, impact our reputation, and adversely affect our business. --- ## Modified: Climate change and related environmental issues, related legislative and regulatory responses to climate change, and the transition to a lower-carbon economy may adversely affect our business. **Key changes:** - Reworded sentence: "Policy changes and changes in federal, state, and local legislation and regulation based on concerns about climate change, including regulations aimed at limiting GHG emissions and the implementation of "green" building codes, could result in increased capital expenditures on our existing 38 38 38 38 38 38 properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our results of operations." **Prior (2024):** There is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases ("GHG") in the atmosphere will cause significant changes in weather patterns around the globe, an increase in the frequency, severity, and duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality. These events could also compound adverse economic conditions. To the extent that significant changes in the climate occur in areas where our properties are located, we may experience extreme weather and/or changes in precipitation and temperature, all of which may result in physical damage to, or a decrease in demand for, properties located in these areas or affected by these conditions and our financial condition or results of operations may be adversely affected. See " - We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather." Growing public concern about climate change has resulted in the increased focus of local, state, regional, national, and international regulatory bodies on GHG emissions and climate change issues. Policy changes and changes in federal, state, and local legislation and regulation based on concerns about climate change, including regulations aimed at limiting GHG emissions and the implementation of "green" building codes, could result in increased capital expenditures on our existing 39 39 39 39 39 39 properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our results of operations. In October 2023, California enacted the Climate Corporate Data Accountability Act and the Climate Related Financial Risk Act that will require large public and private companies that do business within the state to disclose their Scopes 1, 2, and 3 GHG emissions, with third-party assurance of GHG emissions information for certain entities, and issue public reports on their climate-related financial risk and related mitigation measures. Unless modified prior to the effective date, both California laws require initial disclosures in 2026. In 2023, California also enacted the Voluntary Carbon Market Disclosures Act, which requires companies that operate within the state and make certain climate-related claims to provide enhanced disclosures around the achievement of such claims, starting in 2024. In March 2022, the SEC issued proposed rules on climate change disclosure requirements that, if adopted as proposed, will require disclosure of extensive and detailed climate-related information, by all registrants, including us. The final rules have not yet been adopted, and the ultimate scope and impact of the proposed rules on our business remain uncertain. To the extent new rules, if finalized, impose additional reporting obligations on us, we could face substantial increased costs. Separately, the SEC has also announced that it is scrutinizing climate-change related disclosures in public filings, increasing the potential for enforcement if the SEC were to allege that our existing climate disclosures are misleading or deficient. We expect regulatory disclosure requirements related to ESG matters to continue to expand, which has increased, and may continue to increase, our cost and burden of compliance and subject us to increased legal and reputational risk. Any assessment of the potential impact of future climate change legislation, regulations, or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change. **Current (2025):** There is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases ("GHG") in the atmosphere will cause significant changes in weather patterns around the globe, an increase in the frequency, severity, and duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality. These events could also compound adverse economic conditions. To the extent that significant changes in the climate occur in areas where our properties are located, we may experience extreme weather and/or changes in precipitation and temperature, all of which may result in physical damage to, or a decrease in demand for, properties located in these areas or affected by these conditions and our financial condition or results of operations may be adversely affected. See " - We are subject to risks from natural disasters such as earthquakes, wildfires, and severe weather." Growing public concern about climate change has resulted in the increased focus of local, state, regional, national, and international regulatory bodies on GHG emissions and climate change issues. Policy changes and changes in federal, state, and local legislation and regulation based on concerns about climate change, including regulations aimed at limiting GHG emissions and the implementation of "green" building codes, could result in increased capital expenditures on our existing 38 38 38 38 38 38 properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our results of operations. Experiencing or addressing the various physical, regulatory, and transition risks from climate change may significantly reduce our revenues and profitability or cause us to generate losses. We are subject to evolving, complex, and sometimes, inconsistent disclosure obligations promulgated by governmental and regulatory organizations relating to sustainability. In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. In April 2024, the SEC issued an order voluntarily staying the effectiveness of the new rules pending the completion of judicial review of certain legal challenges to their validity. On February 11, 2025, SEC Acting Chairman Mark T. Uyeda released a public statement and notified the United States Court of Appeals for the Eighth Circuit (where the challenges are consolidated) to hold off scheduling the case for argument to provide time for the SEC to further deliberate and determine next steps. Therefore, the timing of the effectiveness of these disclosure requirements is uncertain. We are currently assessing the effect of new rules on our consolidated financial statements and related disclosures. Additionally, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026, though the Governor of California has directed further consideration of the implementation deadlines for each of the laws. Both laws have been challenged in federal court. Unless legal challenges to the foregoing new rules prevail or they are otherwise modified prior to effective dates or the effective dates are delayed, we will become subject to the rules as adopted, and they could significantly increase compliance burdens and associated regulatory costs and complexity. Regulatory requirements related to sustainability matters continue to evolve and any assessment of the potential impact of future climate change legislation, regulations, or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change. --- ## Modified: Inflation and other macroeconomic factors could adversely affect our business and financial results. **Key changes:** - Reworded sentence: "General economic conditions in the United States have fluctuated in recent quarters, and concerns persist regarding adverse macroeconomic conditions, such as fluctuating global and United States economic conditions (including elevated interest rates, political dissension, and labor shortfalls)." - Added sentence: "Additionally, volatility in the financial markets and elevated interest rates could affect our ability to access the capital markets at a time when we desire, or need, to do so which could have an impact on our flexibility to pursue additional growth opportunities and maintain our desired level of revenue growth in the future." - Added sentence: "Mandated and proposed tariffs to be imposed by the United States on imports from certain countries and potential counter-tariffs in response could lead to increased costs and supply chain disruptions." - Added sentence: "If we are not able to navigate any such changes, they could have a material adverse effect on our business and results of operations, as well as on the price of our common stock." **Prior (2024):** Inflation, which continued to increase during 2023, has adversely affected us by increasing the costs of products, materials, and labor needed to operate our business and could continue to adversely affect us in future periods. The effects of inflation on our financial condition and results of operations over the past few years are primarily related to increased operating costs for the procurement of goods and service, compensation of our associates, including benefits, and financing costs in the form of interest expense. Continued inflationary pressures could have a material impact on our results of operations in the future. In an inflationary environment, we may not be able to raise rents sufficiently to keep up with the rate of inflation. High levels of inflation may also negatively impact consumer income and spending, among other factors, which may adversely impact our business, financial condition, cash flows, and results of operations. Actions by the government to stimulate the economy may increase the risk of significant inflation, which may also have an adverse impact on our business or financial results. 22 22 22 22 22 22 **Current (2025):** General economic conditions in the United States have fluctuated in recent quarters, and concerns persist regarding adverse macroeconomic conditions, such as fluctuating global and United States economic conditions (including elevated interest rates, political dissension, and labor shortfalls). Persistent inflation has adversely affected us by increasing the costs of products, materials, and labor needed to operate our business and could continue to adversely affect us in future periods. The effects of inflation on our financial condition and results of operations over the past few years are primarily related to increased operating costs for the procurement of goods and service, compensation of our associates, including benefits, and financing costs in the form of interest expense. Continued inflationary pressures could have a material impact on our results of operations in the future. In an inflationary environment, we may not be able to raise rents sufficiently to keep up with the rate of inflation. High levels of inflation may also negatively impact consumer income and spending, among other factors, which may adversely impact our business, financial condition, cash flows, and results of operations. Actions by the government to stimulate the economy may increase the risk of significant inflation, which may also have an adverse impact on our business or financial results. Additionally, volatility in the financial markets and elevated interest rates could affect our ability to access the capital markets at a time when we desire, or need, to do so which could have an impact on our flexibility to pursue additional growth opportunities and maintain our desired level of revenue growth in the future. Mandated and proposed tariffs to be imposed by the United States on imports from certain countries and potential counter-tariffs in response could lead to increased costs and supply chain disruptions. If we are not able to navigate any such changes, they could have a material adverse effect on our business and results of operations, as well as on the price of our common stock. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*