Core Insights - The single-family rental market is evolving as major landlords shift from purchasing individual homes to developing build-to-rent communities, driven by the need for cost-effective operations and changing market dynamics [1][4][6]. Single-Family Rental Market - The top six single-family rental landlords own a total of 422,000 properties, while mom-and-pop landlords control approximately 11 million single-family rentals out of nearly 50 million total rental units in the US [1][5]. - Since 2022, major single-family rental landlords have been selling individual homes acquired during the Housing Bust, which began in 2012 when home prices were low [2][11]. - These landlords are increasingly focusing on new construction of entire for-rent developments, which are more efficient to manage compared to scattered older homes [3][4]. Major Players in Single-Family Rentals - Progress Residential, the largest single-family rental landlord, owns 94,000 properties and has shifted to acquiring build-to-rent developments, totaling 7,500 rentals [7][8]. - Invitation Homes, with 93,603 single-family rentals, has also transitioned to purchasing new construction developments, selling off individual homes since 2022 [10][11]. - American Homes 4 Rent owns 60,596 single-family rentals and has completed its 10,000th home in build-to-rent developments, planning to deliver 1,800 to 2,000 homes in 2025 [13][15]. Multifamily Rental Market - The largest multifamily landlord, Greystar, has expanded its portfolio to 122,545 units, reflecting a significant growth of 53% over four years [20]. - The multifamily sector has seen a historic boom with over 4 million units started between 2015 and 2024, but is now facing challenges with a delinquency rate for multifamily mortgages rising to 6.9% [20][25]. - The top 50 multifamily landlords collectively own 2.50 million rental apartments, marking a 10% increase over the past five years [22].

Financial Data and Key Metrics Changes - The company's core FFO was negative $7,200,000, and overall net operating income decreased to $9,800,000 from $11,800,000 in the prior quarter [12][21] - The overall segment NOI was $9,800,000 in Q2 2025, compared to $16,200,000 in the prior year, a decrease of $6,400,000 [21] - FFO was negative $7,900,000 or negative $10.42 per diluted share compared to negative $3,300,000 or negative $33.46 per diluted share in the prior year [23] Business Line Data and Key Metrics Changes - The office segment NOI for Q2 2025 was $5,500,000, down from $8,900,000 in Q2 2024, primarily due to decreased rental revenue and occupancy [21][22] - Multifamily segment NOI was $189,000 in Q2 2025, compared to $2,300,000 in the prior year, driven by unrealized losses and decreased revenues [22] - Hotel segment NOI for Q2 2025 was $4,200,000, slightly down from $4,300,000 in the prior year, attributed to decreased food and beverage sales [22] Market Data and Key Metrics Changes - The company executed approximately 140,000 square feet of leases through July 2025, representing over a 55% increase from the prior year [5][6] - The office lease percentage was approximately 70% at the end of Q2 2025, and approximately 80% when excluding the Oakland office building [18] Company Strategy and Development Direction - The company is focused on improving its balance sheet and liquidity, enhancing property-level performance, and evaluating asset sales as part of its broader strategic plan [7][9] - Key areas of focus include growing the multifamily portion of the portfolio and executing renovations to improve asset performance [10][19] Management's Comments on Operating Environment and Future Outlook - Management believes there is a meaningful opportunity to grow NOI in 2026, supported by improved office leasing activity and completed renovations [14] - The company is encouraged by market improvements in the adjacent San Francisco market, which historically influences Oakland [6][11] Other Important Information - The company has successfully secured property-level financing on seven assets, allowing for the repayment of a recourse credit facility with a balance of approximately $169,000,000 at the end of 2024 [7][8] - A $20,000,000 revolving credit facility was closed to support lending division originations [8] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded without any inquiries [26]