Apartment Investment and Management Company (“Aimco”) (NYSE:
AIV) announced today first quarter results for 2022 and provided
highlights on recent activities.
Wes Powell, Aimco President and Chief Executive Officer,
comments: “Aimco had a solid first quarter and I offer my sincere
thanks to our dedicated team for delivering strong results across
each of our business segments. Our development planning and
construction activities remain on track, and newly delivered
apartment homes are leasing more quickly and at higher rental rates
than originally planned. Our acquisitions team added four million
square feet of phased development opportunities to an already deep
pipeline, and our national portfolio of stabilized apartment
properties remains highly occupied and is realizing strong revenue
growth."
Mr. Powell continued, "At Aimco, our experienced local
professionals and our disciplined development process have led to
more predictable outcomes. We maintain a healthy balance sheet and
have plans in place to smooth our debt maturity ladder, and reduce
near-term repricing and refunding risk. Our allocation to
stabilized apartment properties allows for the relatively frequent
repricing of rents, a valuable tool during inflationary periods.
Most importantly, while the near-term economic outlook is far from
certain, the fundamentals of the country’s housing market put the
Aimco platform and strategy in excellent position for long-term
success.”
Lynn Stanfield, Aimco Chief Financial Officer, adds: “During the
first quarter Aimco’s stabilized properties produced solid
year-over-year growth with occupancy at 98.5%, up 90 bps, and net
operating income of $24.6 million, up 14.3%. These communities,
where approximately 50% of Aimco capital is currently invested,
plus the strong Aimco balance sheet, provide stability and support
to the investment platform."
Mrs. Stanfield continued, “Also in the first quarter, the
successful recapitalization of the initial phase of development at
Parkmerced gives us increased confidence that our mezzanine loan,
secured by later phases of development at Parkmerced, is adequately
collateralized. In April, Aimco made significant progress on its
plan to refinance nearly $1 billion of debt, the majority of which
comes due in the next two years, and reducing future refinancing
risk.”
Financial Results and Recent
Highlights
- Net income attributable to common stockholders per share, on a
fully dilutive basis, was $0.05 for the quarter ended March 31,
2022, compared to net income per share of $0.14 for the same period
in 2021, due primarily to the change in fair market valuation of
Aimco's interest rate options and entity investments.
- The North Tower at Flamingo Point in Miami Beach, Florida
reached stabilized occupancy in April, more than six months ahead
of schedule and at rental rates more than 25% ahead of
underwriting.
- Initial demand for fully renovated apartment homes at The
Hamilton in Miami, Florida has been strong. Aimco has pre-leased 17
homes in anticipation of initial apartment home deliveries
scheduled to occur in the coming months, at rental rates ahead of
underwriting.
- Aimco secured two new development pipeline assets in South
Florida with the potential to construct approximately four million
square feet of phased, mixed-use developments.
- First Quarter 2022 Revenue and NOI from Aimco’s Stabilized
Operating Properties were up 9.4% and 14.3%, respectively, year
over year, with occupancy of 98.5%, up 90 basis points year over
year.
- Aimco ended the first quarter with $298 million of liquidity,
including cash and capacity on its revolving credit facility, net
of letters of credit outstanding.
- Aimco plans to restructure nearly $1 billion of debt, including
$534 million of notes payable to AIR, funded with proceeds from (i)
long-dated, fixed-rate, non-recourse financing, (ii) the
disposition of one stabilized asset, and (iii) the unwind of the
initial AIR leases by early 2023.
Value Add, Opportunistic &
Alternative Investments:
Development and Redevelopment
Aimco generally seeks development and redevelopment
opportunities where barriers to entry are high, target customers
can be clearly defined, and Aimco has a comparative advantage over
others in the market. Aimco’s Value Add and Opportunistic
investments may also target portfolio acquisitions, operational
turnarounds, and re-entitlements.
Aimco currently has eight active development and redevelopment
projects, located across five U.S. markets, in varying phases of
construction and lease-up. These projects remain on track, as
measured by project-level budget and schedule, lease-up metrics,
and current market valuations. During the first quarter, Aimco
invested $65.7 million in development and redevelopment activities.
Updates include:
- At the North Tower of Flamingo Point in Miami Beach, Florida,
construction is largely complete and the property is 98% occupied.
The property reached stabilized occupancy in April, more than six
months ahead of plan and at rental rates more than 25% ahead of
underwriting.
- The Fremont on the Anschutz Medical Campus in Aurora, Colorado
was 92% leased as of April 30, 2022, and is expected to reach
stabilized occupancy in the third quarter of 2022.
- Prism in Cambridge, Massachusetts, and 707 Leahy in Redwood
City, California, reached stabilized occupancy in the second half
of 2021.
- Pre-leasing began at The Hamilton in Miami, Florida in
anticipation of initial apartment home deliveries scheduled to
occur in the coming months. As of April 30, 2022, 17 units had been
pre-leased at rental rates ahead of underwriting.
- At Upton Place in Northwest Washington, D.C., construction
remains on schedule and on budget. As of April 30, 2022, more than
80% of the 106,000 square feet of planned retail space has been
leased to two anchor tenants, more than 18 months ahead of delivery
and at terms ahead of underwriting.
- Construction continues on schedule and on budget at The Benson
Hotel and Faculty Club in Aurora, Colorado and at our single-family
rental project, Oak Shore, in Corte Madera, California.
Alternative Investments
Aimco makes alternative investments where it has special
knowledge or expertise relevant to the venture and opportunity
exists for positive asymmetric outcomes. Aimco’s current
alternative investments include a mezzanine loan secured by a
stabilized multi-family property with an option to participate in
future multi-family development as well as three passive equity
investments. Updates include:
- Aimco’s $346 million mezzanine loan is secured by the
Parkmerced stabilized multi-family property plus phases two through
nine of the site's future development opportunity. Members of
Aimco's borrower also own phase one, which was recently
recapitalized by an alternative investment firm with $57 billion
under management. The recapitalization provides the borrower with
additional liquidity and added capacity to advance capital and
service the first priority debt that is senior to the Aimco loan.
It is now expected that the neighboring San Francisco State
University will return to full in-person learning this fall,
increasing the demand for the apartments that serve as collateral
for our loan.
- Aimco funded the remaining $14.2 million of a total commitment
of a $50.0 million passive equity investment in IQHQ Inc., a life
sciences developer.
Investment Activity
Aimco is focused on development and redevelopment, funded
through joint ventures. Aimco will also consider opportunistic
investments in related activities. In the first quarter 2022:
- Aimco’s joint venture with The Kushner Companies closed on the
previously announced acquisition of three undeveloped land parcels
located in downtown Fort Lauderdale, Florida. The total purchase
price for the land was $49 million ($25 million at Aimco’s 51%
share) and current zoning allows for the development of
approximately three million square feet of multifamily homes and
commercial space. The venture is under contract to sell one of the
parcels for $18.3 million, nearly double its allocation of the
purchase price. The venture expects to close this sale in the third
quarter of 2022.
- Aimco formed a joint venture for the construction of
approximately one million square feet of mixed-use development in
the Edgewater neighborhood of Miami, Florida. Aimco has a 20% share
of the joint venture, which includes the initial contribution of an
eighth of an acre of land that Aimco purchased for $1.7 million in
January 2022. The development site is situated as the gateway to
Aimco’s Edgewater land assemblage and its redevelopment of The
Hamilton. Aimco will serve as the development manager for the
venture and expects to begin construction in 2023.
- Aimco entered into a contract to acquire, for $100 million, a
nine-acre development site in Fort Lauderdale, Florida. The site is
located in the rapidly growing Flagler Village neighborhood and
allows for approximately three million square feet of phased,
mixed-use development, which could contain up to 1,500 residential
units at full build-out. Pursuant to the agreement, Aimco reserved
funds for the transaction by placing $70 million of cash and $30
million in letters of credit into escrow. In conjunction with the
purchase, Aimco entered into a short-term cancelable operating
lease with the seller to obtain the development rights. Aimco plans
to form a joint venture or joint ventures to execute the planned
development activity.
Operating Property
Results
Aimco owns a diversified portfolio of stabilized apartment
communities located in ten major U.S. markets with average rents in
line with local market averages. Aimco also owns one commercial
office building that is part of an assemblage with an adjacent
apartment building.
Aimco’s operating properties produced solid results for the
quarter ended March 31, 2022.
First Quarter
Stabilized Operating Properties
Year-over-Year
Sequential
($ in millions)
2022
2021
Variance
4Q 2021
Variance
Average Daily Occupancy
98.5%
97.6%
0.9%
98.7%
(0.2%)
Revenue, before utility reimbursements
$35.8
$32.7
9.4%
$35.6
0.4%
Expenses, net of utility
reimbursements
11.2
11.2
0.1%
10.1
10.9%
Net operating income (NOI)
$24.6
$21.5
14.3%
$25.5
(3.8%)
*Excluded from the table above is one,
40-unit apartment community that Aimco’s ownership includes a
partnership share.
- Revenue in the first quarter 2022 was $35.8 million, up 9.4%
year-over-year, resulting from a $155 increase in average monthly
revenue per apartment home to more than $2,000, and a 90-basis
point increase in Average Daily Occupancy to 98.5%.
- New lease rents increased 15.4% and the median annual income of
new residents was more than $110,000 in the first quarter
2022.
- Renewal lease rents increased 14.7% in the first quarter and
62.0% of residents were retained over the past twelve months.
- Net operating income in the first quarter 2022 was $24.6
million, up 14.3% year-over-year.
1001 Brickell Bay Drive, a waterfront office building in Miami,
Florida, is owned as part of a larger assemblage with substantial
development potential. At the end of the first quarter 2022, the
building was 83% occupied, up from 72% at the same time last
year.
Balance Sheet and Financing
Activity
Aimco is highly focused on maintaining a strong balance sheet,
including having at all times ample liquidity. As of March 31,
2022, Aimco had access to $298 million, including $109 million of
cash on hand, $69 million of restricted cash, and the capacity to
borrow up to $120 million on our revolving credit facility.
Aimco’s net leverage as of March 31, 2022, was as follows:
as of March 31, 2022
Proportionate, $ in thousands
Amount
Weighted Avg.
Maturity (Yrs.)
Total non-recourse property debt
$
505,684
5.1
Total non-recourse construction loan
debt
184,788
2.1
Notes payable to AIR
534,127
1.8
Cash and restricted cash
(177,623
)
Net Leverage
$
1,046,976
- Aimco made significant progress on a plan to restructure nearly
$1 billion of debt, the majority of which comes due in the next two
years, mitigating future refinancing risk. Once complete, Aimco
expects its leverage to be primarily non-recourse property level
debt either in fixed rate loans or floating with interest rate
caps. Components of the plan include:
- Aimco has rate-locked $555 million of property level loans with
a weighted average term of 9.4 years and a weighted average fixed
interest rate, net of monetized swaption proceeds, of 4.37%. Aimco
estimates $320 million of proceeds, net of the repayment of
existing property debt balances and prepayment penalties.
- In early May, Aimco sold Pathfinder Village in Fremont,
California for $127 million, ~8% more than in Aimco's estimated Net
Asset Value calculation published in October 2021. Proceeds, net of
the repayment of the existing property debt and transaction related
costs, were $70 million.
- Aimco reached agreement with AIR for the accelerated repayment
of $534 million in notes, which carry a rate of 5.2%, prior to
their maturity in January 2024. The early payoff is expected to be
completed during the third quarter 2022. Aimco expects to incur
approximately $24 million in associated spread maintenance
costs.
- Finally, Flamingo Point North Tower reached stabilized
occupancy in April, allowing for lease termination and satisfaction
of the $150 million construction loan by early 2023.
- In the first quarter 2022, Aimco’s joint venture in Fort
Lauderdale, Florida secured a $40 million loan ($20.4 million Aimco
share) to facilitate the previously announced purchase of three
land parcels for $49 million ($25 million Aimco share).
Supplemental Information
The full text of this Earnings Release and the Supplemental
Information referenced in this release are available on Aimco’s
website at investors.aimco.com.
Glossary & Reconciliations of
Non-GAAP Financial and Operating Measures
Financial and operating measures found in this Earnings Release
and the Supplemental Information include certain financial measures
used by Aimco management that are measures not defined under
accounting principles generally accepted in the United States, or
GAAP. Certain Aimco terms and Non-GAAP measures are defined in the
Glossary in the Supplemental Information and Non-GAAP measures
reconciled to the most comparable GAAP measures.
About Aimco
Aimco is a diversified real estate company primarily focused on
value add, opportunistic, and alternative investments, targeting
the U.S. multifamily sector. Aimco’s mission is to make real estate
investments where outcomes are enhanced through our human capital
so that substantial value is created for investors, teammates, and
the communities in which we operate. Aimco is traded on the New
York Stock Exchange as AIV. For more information about Aimco,
please visit our website www.aimco.com.
Team and Culture
Aimco has a national presence with corporate headquarters in
Denver, Colorado, and Bethesda, Maryland. Our investment platform
is managed by experienced real estate professionals based in four
regions of the United States: West Coast, Central and Mountain
West, Mid-Atlantic and Northeast, and Southeast. The experience and
in-depth local market knowledge of the Aimco team is essential to
the execution of our mission and realization of our vision.
Above all else, Aimco is committed to a culture of integrity,
respect, and collaboration.
Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
include all statements that are not historical statements of fact
and those regarding our intent, belief, or expectations, including,
but not limited to, the statements in this document regarding our
2022 plans and goals, including our 2022 pipeline investments and
projects, and our plans to eliminate certain near term debt
maturities. We caution investors not to place undue reliance on any
such forward-looking statements.
Words such as “anticipate(s),” “expect(s),” “intend(s),”
“plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,”
“seek(s)” and similar expressions, or the negative of these terms,
are intended to identify such forward-looking statements. These
forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the control of Aimco that could
cause actual results or outcomes to differ materially from those
discussed in the forward-looking statement. Important factors,
among others, that may affect actual results or outcomes include,
but are not limited to: (i) the risk that the 2022 plans and goals
may not be completed, as expected, in a timely manner or at all,
(ii) the inability to recognize the anticipated benefits of the
pipeline investments and projects, and (iii) changes in general
economic conditions, including, increases in interest rates and as
a result of the COVID-19 pandemic. Although we believe that the
assumptions underlying the forward-looking statements are
reasonable, we can give no assurance that our expectations will be
attained.
Readers should carefully review Aimco’s financial statements and
the notes thereto, as well as the section entitled “Risk Factors”
in Item 1A of Aimco’s Annual Report on Form 10-K for the year ended
December 31, 2021, and subsequent Quarterly Reports on Form 10-Q
and other documents Aimco files from time to time with the SEC.
These filings identify and address important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking
statements.
These forward-looking statements reflect management’s judgment
and expectations as of this date, and Aimco assumes no (and
disclaims any) obligation to revise or update them to reflect
future events or circumstances.
Consolidated
Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2022
2021
REVENUES:
Rental and other property revenues
$
49,994
$
39,804
OPERATING EXPENSES:
Property operating expenses
19,221
16,942
Depreciation and amortization
23,118
20,717
General and administrative expenses
[1][2]
9,472
6,311
Total operating expenses
51,811
43,970
Interest expense
(14,601
)
(12,677
)
Mezzanine investment income, net
8,237
7,467
Unrealized gains (losses) on interest rate
options
18,778
25,347
Other expenses, net [3]
(4,541
)
363
Income before income taxes
6,056
16,334
Income tax benefit (expense)
4,056
5,100
Net income
10,112
21,434
Net loss (income) attributable to
redeemable noncontrolling interests in consolidated real estate
partnership
(1,470
)
152
Net loss (income) attributable to
noncontrolling interests in consolidated real estate
partnership
2
(291
)
Net loss (income) attributable to common
noncontrolling interests in Aimco Operating Partnership
(435
)
(1,081
)
Net income attributable to Aimco common
stockholders
$
8,209
$
20,214
Net income attributable to common
stockholders per share – basic
$
0.05
$
0.14
Net income attributable to common
stockholders per share – diluted
$
0.05
$
0.14
Weighted-average common shares outstanding
– basic
149,790
148,914
Weighted-average common shares outstanding
– diluted
150,348
149,046
[1] General and administrative expense
includes $1.0 million of expenses to be reimbursed to AIR
Communities, per agreement upon separation, for consulting
services, with respect to strategic growth, direction, and advice,
in the three months ended March 31, 2022 and 2021. This agreement
is expected to conclude at year end.
[2] General and administrative expense for
the three months ended March 31, 2021 was prior to the full build
out of Aimco’s platform and are not representative of Aimco’s
anticipated expenses.
[3] The increase in Other expenses, net
variance is primarily due to the valuation change at our closely
held technology investments funds.
Consolidated
Balance Sheets
(in thousands) (unaudited)
March 31,
December 31,
2022
2021
Assets
Buildings and improvements
$
1,323,647
$
1,257,214
Land
574,434
534,285
Total real estate
1,898,081
1,791,499
Accumulated depreciation
(576,243
)
(561,115
)
Net real estate
1,321,838
1,230,384
Cash and cash equivalents
109,011
233,374
Restricted cash
68,612
11,208
Mezzanine investments
346,034
337,797
Interest rate options
44,414
25,657
Right-of-use lease assets
522,874
429,768
Other assets, net
181,061
165,913
Total assets
$
2,593,844
$
2,434,101
Liabilities and Equity
Non-recourse property debt, net
$
512,301
$
483,137
Construction loans, net
180,562
163,570
Notes payable to AIR
534,127
534,127
Total indebtedness
1,226,990
1,180,834
Deferred tax liabilities
123,641
124,747
Lease liabilities
509,235
435,093
Accrued liabilities and other
114,761
97,400
Total liabilities
1,974,627
1,838,074
Redeemable noncontrolling interests in
consolidated real estate partnership
37,232
33,794
Equity:
Common Stock
1,497
1,498
Additional paid-in capital
523,455
521,842
Retained earnings (accumulated
deficit)
(14,571
)
(22,775
)
Total Aimco equity
510,381
500,565
Noncontrolling interests in consolidated
real estate partnerships
44,629
35,213
Common noncontrolling interests in Aimco
Operating Partnership
26,975
26,455
Total equity
581,985
562,233
Total liabilities and equity
$
2,593,844
$
2,434,101
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220509006078/en/
Matt Foster, Director, Capital Markets and Investor Relations
Investor Relations 303-793-4661, investor@aimco.com
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