I Used AI 🧪

In today's edition:

• Negative ‘growth’ for new rent
• Inflation hotter than expected
• AI adoption in property management

Join me in a movement. Starting today, we will no longer say 'I used AI' to put something together. Let's collectively assume that is the case from now on. If you put a report or analysis together at work and you didn't use AI in some capacity, that is now the outlier. I like to imagine when Excel first came out in 1985 accountants were talking to each other: "Have you seen what this can do?? Magic!"... but I imagine that after a short time they stopped announcing they used Excel to put together their analysis.

So let's embrace this new world, and don't feel the need to caveat your next project with the tools you used.

🎯 What’s Stirring

Q1 Earnings for SFR REITs

Invitation Homes (INVH) and American Homes 4 Rent (AMH) - the two largest single-family rental REITs - both reported Q1 2026 results in the last two weeks, and both beat estimates. INVH posted revenue of $734M (up 8.8% YoY) and EPS of $0.26 versus the $0.18 consensus. AMH posted revenue of $472M (up 2.8%) and EPS of $0.35 versus $0.18 expected.

Underneath the headline numbers, the lease-rate breakdown looks similar at both companies. Renewals are carrying most of the rent growth - INVH at +3.7%, AMH at +3.2% - while new lease rents came in negative: INVH at -3.0% and AMH at -0.8%. New lease growth has been on a downward trajectory at both companies since mid-2023 (see nearby chart).

April Inflation Comes In at 3.8%

Headline inflation reported by the Bureau of Labor Statistics rose 0.6% month-over-month and 3.8% year-over-year - the highest annual reading since May 2023. Core CPI (excluding food and energy) rose 0.4% MoM and 2.8% YoY. Energy was the biggest contributor, climbing 3.8% for the month and 17.9% YoY (gasoline up 28.4% YoY), as the war with Iran continued to push oil prices higher.

Shelter, which carries the heaviest weighting in the CPI basket, rose 0.6% MoM and 3.3% YoY - roughly double March's monthly pace. That figure carries a methodology footnote caused by the October 2025 government shutdown, so some analysts are saying this number appears higher than reality.

On the rate path: per Chandan Economics, the CME FedWatch tool showed the implied probability of an FOMC rate hike by year-end rising from 1.6% on April 10 to 30.4% following the May 12 release.

Buildiums's 2026 Industry Report: AI Adoption Triples

Buildium released its annual State of the Property Management Industry Report this month, based on a survey of more than 3,200 property managers, rental owners, and renters. The headline finding: the share of property management companies using AI tools jumped from 20% to 58% in a single year.

But adoption is still shallow. Just 8% of survey respondents reported having fully automated any workflow. Most current use is centered on large language models like ChatGPT applied to specific tasks - drafting property descriptions (30%), resident communications (29%), owner communications (24%), and marketing copy (23%). Buildium describes the current state of AI usage as "still nascent" and points to AI agents - software that operates proactively rather than reactively - as the next phase.

One related note from the same report: tenant quality remains property managers' #1 operating challenge, with 75% of businesses reporting increased fraud over the past year. Buildium and Celeri (a screening vendor) flag that the same generative AI tools driving efficiency gains are now being used to produce fraudulent paystubs and bank statements at scale. Celeri's research suggests approximately 1 in 10 rental applicants submits fraudulent documents, and more than half of eviction cases involve tenants who were approved on fraudulent documents.

🧑‍🔬 Lab Notes

A short, recurring section featuring one operational change from a real operator, plus the impact it had.

Randy Cox from Hearthside Management (Greenville, NC)

About a year ago, Hearthside Management added anti-discrimination coverage to their insurance policy. A tenant later filed a frivolous fair housing claim against one of Hearthside's properties involving an unauthorized emotional support animal. The coverage paid for an attorney response letter that would have cost Hearthside thousands, the complaint was dropped, and the out-of-pocket cost was zero.

As Randy framed it: “I don't think a lot of property managers know that this coverage exists… and now I shout it from the rooftops.”

📊 The Metric

-3% and -0.8%

That’s the new lease rent ‘growth’ for INVH and AMH respectively. This is a dramatic decline from 2-3 years ago when it was consistently above 5% quarter after quarter.

One More Thing

Allbirds - the eco-friendly footwear company that built its brand on recycled wool and sustainable manufacturing - is rebranding as "NewBird AI" and dropping its environmental mission to position itself as an AI company. Just a fascinating story.

The Beaker is a bi-weekly briefing from PlanOmatic on the economy, housing, and the forces shaping both. Have something we should cover? Reply to this email.

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