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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 6, 2023

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

AIMCO OP L.P.

(Exact name of registrant as specified in its charter)

 

 

Maryland (Apartment Investment and Management Company)

 

1-13232

 

84-1259577

Delaware (Aimco OP L.P.)

 

 

0-56223

 

 

85-2460835

 

(State or other jurisdiction

 

(Commission

 

(I.R.S. Employer

of incorporation or organization)

 

File Number)

 

Identification No.)

4582 SOUTH ULSTER STREET

SUITE 1450, DENVER, CO 80237

 

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (303) 224-7900

NOT APPLICABLE

(Former name or Former Address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Apartment Investment and Management Company

Class A Common Stock

AIV

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. ☐

 

 


 

ITEM 2.02. Results of Operations and Financial Conditions.

 

On November 6, 2023 Apartment Investment and Management Company and Aimco OP L.P. (the “Company”) issued a press release announcing its results for the period ended September 30, 2023. A copy of the press release is attached as exhibit 99.1 to this report.

 

The information under this Item 2.02 and Exhibit 99.1 is furnished by the Company in accordance with the rules of the Securities and Exchange Commission. This information shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01. Financial Statements and Exhibits.

(d) The following exhibits are filed with this report:

Exhibit No.

Description

99.1

Press release dated November 6, 2023

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 


 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Dated: November 6, 2023

 

 

 

 

 

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

 

 

 

 

 

 

 

/s/ H. Lynn C. Stanfield

 

 

 

H. Lynn C. Stanfield

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

AIMCO OP L.P.

 

 

By: Aimco OP GP, LLC, its general partner

By: Apartment Investment and Management Company, its managing member

 

 

 

/s/ H. Lynn C. Stanfield

 

 

 

H. Lynn C. Stanfield

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 


 

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Table of Contents

 

Page

 

3

Earnings Release

8

2023 Outlook

11

Consolidated Statements of Operations

12

Consolidated Balance Sheets

13

Schedule 1 – EBITDAre and Adjusted EBITDAre

14

Schedule 2 – Aimco Leverage and Maturities

15

Schedule 3 – Aimco Portfolio

16

Schedule 4 – Aimco Capital Additions

17

Schedule 5 – Aimco Development and Redevelopment Project Summaries

19

Schedule 6 – Stabilized Operating Properties

20

Schedule 7 – Acquisitions, Dispositions, and Leased Communities

21

Schedule 8 – Net Asset Value Components

22

Glossary and Reconciliations of Non-GAAP Financial and Operating Measures

 

2


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Aimco Reports Third Quarter Results, Updates 2023 Guidance, and Provides Highlights on Recent and Planned Activities

 

 

Denver, Colorado, November 6, 2023 – Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today third quarter results for 2023, updated guidance, and provided highlights on recent and planned activities.

 

Wes Powell, Aimco President and Chief Executive Officer, comments:

 

“Thank you for your interest in Aimco. The apartment business remains on sound footing and Aimco is well positioned given the composition of our assets and the quality of our investment platform. Our diversified portfolio of apartment communities located within neighborhoods that have largely avoided the pressure of competitive new supply, has continued to generate strong performance and has experienced NOI growth of nearly 20% over the past 18 months. During the third quarter, average monthly revenues per apartment home increased by 7.2% on a year-over-year basis and we have increased our full year NOI guidance by more than 100 basis points at the midpoint.

"Aimco's regional investment teams are successfully advancing our active development projects and are on track to deliver more than 600 of those new units by the end of 2023 and another 700 in 2024. It is projected that this current class of projects will produce more than $55 million of NOI annually when fully stabilized, an amount equal to more than half of the NOI currently produced by Aimco's portfolio of stabilized apartment communities and representing an accretive yield on direct capital investment of 6.8%. While we are advancing plans for a select number of new projects, which offer the prospect of strong risk adjusted returns, we anticipate reducing the amount of Aimco capital that is allocated to development activity over the year ahead given market conditions and the relative attractiveness of other capital allocation opportunities.

 

“We continue to view the repurchase of Aimco common stock as being very attractive. Over the past 22 months, we have opportunistically repurchased 8.8 million shares at an average price of $7.33 per share. The Aimco Board of Directors recently increased our share repurchase authorization to 30 million shares, doubling the size of our previous authorization.

"Aimco’s balance sheet remains rock solid. Our near-term debt maturities are extremely limited with less than 2% of the total coming due over the next 30 months inclusive of extension options. Fixed-rate loans tied to our stabilized portfolio, representing 70% of our total leverage, carry an interest rate of 4.25%, are fully assumable and have a weighted average time to maturity of 7.4 years.

"Consistent with our capital allocation strategy, at times we may choose to monetize certain pipeline assets prior to vertical construction in order to maximize value and risk adjusted returns. As such, we are preparing to market for sale our Brickell Assemblage located in Miami, as well as certain recently completed development projects and select land holdings. In addition, we remain under agreement to sell our 80% stake in the Parkmerced mezzanine loan. We expect these sales to take place during the course of 2024, provided pricing and terms are favorable. The proceeds will be prudently allocated to return capital to stockholders, reduce leverage, and/or accretive new investments.

"Above all else, the Aimco management team and Board remain intently focused on creating and unlocking value for Aimco stockholders.”

Third Quarter 2023 Earnings Release and Supplemental Schedules | 3


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Financial Results and Recent Highlights

Net loss attributable to common stockholders per share, on a fully dilutive basis, was $(0.02) for the quarter ended September 30, 2023, compared to net income per share of $0.19 for the same period in 2022, due primarily to lower real estate transaction proceeds and reduced tax benefit.
Third Quarter 2023 revenue, expenses, and NOI from Aimco’s Stabilized Operating Properties were up 6.4%, 3.5%, and 7.6%, respectively, year-over-year, with average monthly revenue per apartment home increasing by 7.2% to $2,358, while maintaining an average rent to income below 20% for new Aimco residents.
Aimco updated full year 2023 guidance related to Stabilized Property Operations as follows:

 

Full Year 2023 Year-Over-Year Growth Rates

Stabilized Operating Properties

Revised Guidance Range

 

Prior Guidance Range

 

Low

 

High

 

Low

 

High

   Revenue, before utility reimbursements

8.25%

-

8.75%

 

7.75%

-

8.75%

   Expenses, net of utility reimbursements

5.75%

-

6.75%

 

8.00%

-

9.00%

   Net operating income (NOI)

9.00%

-

9.75%

 

7.50%

-

9.00%

As of October 31, 2023, Aimco delivered the 276-apartment home Hamilton in Miami, Florida, the 106-key Benson Hotel and Faculty Club in Aurora, Colorado, and 81 apartment homes at Upton Place in Upper Northwest Washington, D.C. Aimco expects to deliver, before year end, 153 additional apartment homes at Upton Place and the initial homes at Oak Shore in Corte Madera, California.
Aimco remains under contract to sell our remaining 80% stake in the Parkmerced mezzanine loan for $134 million plus accrued interest and is preparing to market additional assets for sale, including the Brickell Assemblage located in Miami, Florida.
Aimco acquired 1.7 million shares of its common stock during the third quarter 2023 at an average cost of $7.52 per share. Year to date, as of October 31, 2023, Aimco acquired more than 5.3 million shares at an average price of $7.40 per share.
Subsequent to quarter end, the Aimco Board of Directors increased the number of shares authorized for repurchase to 30 million, doubling the size of the Board’s previous authorization.
As of November 3, 2023, total shareholder return ("TSR") since the December 15, 2020 spin-off of AIR Communities was 15.9% outperforming the Russell 2000 over the same period by more than 2,300 basis points.

 

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.

Third Quarter 2023 Earnings Release and Supplemental Schedules | 4


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As of September 30, 2023, Aimco had five active development and redevelopment projects located in four U.S. markets, in varying phases of construction and lease-up. These projects remain on track, as measured by construction budget and lease-up metrics. Additionally, Aimco has a pipeline of future value-add opportunities totaling approximately 14 million gross square feet of development in Aimco's target markets of Southeast Florida, the Washington D.C. Metro, and Colorado's Front Range. During the third quarter, Aimco invested $74.4 million in development and redevelopment activities. Updates include:

In Miami, Florida, construction, repositioning, and lease-up of The Hamilton is complete. Demand for rental housing in Southeast Florida remains robust, especially for unique waterfront properties such as The Hamilton. As of October 31, 2023, 96% of the building's 276 units were occupied with in-place leases at rates more than 20% ahead of underwritten rents.
In Bethesda, Maryland, construction is progressing on plan at the first phase of Strathmore Square, which will contain 220 highly tailored apartment homes with initial delivery on track for the second half of 2024. This suburban infill project is located adjacent to the Grosvenor-Strathmore Metro station and the Strathmore Performing Arts Campus, and is 1.5 miles from The National Institutes of Health main campus. Funding for the $164.0 million project is fully secured with Aimco having already funded 100% of its equity commitment.
In Upper Northwest Washington D.C., construction at Upton Place continues on schedule and on budget. The initial delivery of 81 apartment homes occurred, on schedule, in mid-October with the first residents at Upton Place having moved into their new homes on November 1, 2023. As of October 31, 2023, 13 units had been leased or pre-leased, at rates ahead of our initial projections. To date, 80% of the project's 105K square feet of retail space has been leased and Aimco is in final lease negotiations with retailers on another 7%.
In Corte Madera, California, construction is ongoing at Oak Shore where 16 luxury single-family rental homes and eight accessory dwelling units are being developed. Construction has been completed on the initial homes and they will be ready for occupancy in November. As of October 31, 2023, two of the eight accessory dwelling units had been pre-leased at rates ahead of our initial projections.
In the third quarter 2023, Aimco invested $4.8 million into programming, design, documentation, and entitlement efforts related to select pipeline projects located in Southeast Florida, the Washington D.C. Metro, and Colorado’s Front Range.

 

 

Investment & Disposition Activity

Aimco is focused on delivering strong investment returns, through the ownership of apartment properties as well as development and redevelopment activities, funded primarily through third-party capital.

No new investment or disposition activity occurred during the third quarter.
Aimco remains under contract to sell its 80% stake in the Parkmerced mezzanine loan for $134 million plus accrued interest. In June, at the time of closing on the sale of a 20% non-controlling position, the purchaser pre-paid $4 million of interest to Aimco and is expected to pay another $7 million prior to year end.
Subsequent to quarter end, Aimco initiated plans to market for sale the Brickell Assemblage located in Miami, Florida, as well as certain recently completed developments and select land holdings. Aimco expects the sales to occur by the end of 2024, pending favorable pricing and terms. The proceeds will be allocated to return capital to stockholders, reduce leverage, and/or accretive new investments.

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 5


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Operating Property Results

Aimco owns a diversified portfolio of operating apartment communities located in eight major U.S. markets with average rents in line with local market averages.

Aimco’s Stabilized Operating Properties produced solid results for the quarter ended September 30, 2023.

 

Third Quarter

 

Year-to-Date

Stabilized Operating Properties

Year-over-Year

 

Sequential

 

Year-over-Year

($ in millions)

2023

2022

Variance

 

2Q 2023

Variance

 

2023

2022

Variance

   Average Daily Occupancy

95.2%

96.0%

(0.7)%

 

96.2%

(0.9)%

 

96.5%

97.4%

(0.9)%

   Revenue, before utility reimbursements

$37.7

$35.5

6.4%

 

$37.0

1.9%

 

$111.4

$102.2

9.0%

   Expenses, net of utility reimbursements

10.7

10.4

3.5%

 

11.5

(6.5)%

 

33.4

31.3

6.6%

   Net operating income (NOI)

27.0

25.1

7.6%

 

25.5

5.7%

 

78.0

70.9

10.0%

 

Revenue in the third quarter 2023 was $37.7 million, up 6.4% year-over-year, resulting from a 7.2% increase in average monthly revenue per apartment home to $2,358, partially offset by a 75-basis point decrease in Average Daily Occupancy to 95.2%. As of October 31, 2023, occupancy had increased to 97.3%.
New lease rents increased 8.0% and Aimco retained 58.3% of residents whose leases were expiring during the quarter at rents 4.5% higher, on average, than the previous lease.
The median annual household income of new residents was $133,000 in the third quarter 2023, representing a rent to income ratio of 19.5%.
Expenses in the third quarter 2023 were up 3.5% year-over-year primarily from higher insurance costs, during the quarter we received favorable real estate tax valuations in Chicago largely offsetting the impact of the prior unfavorable real estate tax valuation in Miami, which has since been successfully appealed.
NOI in the third quarter 2023 was $27.0 million, up 7.6% year-over-year. Aimco raised full year 2023 NOI guidance by more than 100 basis points at the midpoint, to a range of 9.00% to 9.75%.

 

 

Balance Sheet and Financing Activity

Aimco is highly focused on maintaining a strong balance sheet, including ample liquidity at all times. As of September 30, 2023, Aimco had access to $320.2 million, including $95.7 million of cash on hand, $20.2 million of restricted cash, $54.3 million in a short-term treasury investment, and the capacity to borrow up to $150.0 million on its revolving credit facility.

Aimco’s net leverage as of September 30, 2023, was as follows:

 

 

as of September 30, 2023

 

Proportionate, $ in thousands

 

Amount

 

 

Weighted Avg.
Maturity (Yrs.) [1]

 

Total non-recourse fixed rate debt

 

$

777,480

 

 

 

7.4

 

Total non-recourse floating rate debt

 

 

101,154

 

 

 

1.6

 

Total non-recourse construction loan debt

 

 

238,800

 

 

 

2.1

 

Cash and restricted cash [2]

 

 

(114,469

)

 

 

 

  Net Leverage

 

$

1,002,965

 

 

 

 

[1] Weighted average maturities presented exclude contractual extension rights.

[2] On September 30, 2023, Aimco had $54.3 million invested in a four-month treasury bill that was excluded from cash in accordance with U.S. GAAP.

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 6


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As of September 30, 2023, 100% of Aimco's total debt was either fixed rate or hedged with interest rate cap protection and, including contractual extensions, Aimco has only $19.9 million, or less than 2% of its total debt, maturing over the next 30 months.

 

Aimco Credit Facility

In October, subsequent to quarter end, Aimco exercised an option to extend the duration of its revolving credit facility for twelve months. Aimco will now retain the capacity to borrow up to $150.0 million through December 2024 and has one remaining 12-month extension option.

 

 

Public Market Equity

Common Stock Repurchases

In the third quarter, Aimco repurchased 1.7 million shares of its common stock at a weighted average price of $7.52 per share. In 2023, through October 31, Aimco repurchased more than 5.3 million shares of its common stock at a weighted average price of approximately $7.40 per share.
Subsequent to quarter end, the Aimco Board of Directors increased the number of shares authorized for repurchase to 30 million, doubling the size of the Board's previous authorization.

 

Commitment to Enhance Stockholder Value

The Aimco Board of Directors, in coordination with management, remains intently focused on maximizing and unlocking value for Aimco stockholders. During the ongoing review, the Board continues to engage regularly with several leading advisory firms, including Morgan Stanley & Co. LLC, to review current market conditions.

Aimco believes it is well positioned for long term growth given its high-quality development pipeline and investment platform, diversified portfolio of core and opportunistic multifamily assets, and long-duration, low-cost balance sheet. As such, the timing of any broad strategic action to unlock stockholder value will take into consideration a host of factors, including the health and stability of both the financial and capital markets.

There can be no assurance that the ongoing review will result in any particular transaction or transactions or other strategic changes or outcomes and the timing of any such event is similarly uncertain. The Company does not intend to disclose or comment on developments related to the foregoing unless or until it determines that further disclosure is appropriate or required.

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 7


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2023 Outlook

 

 

2023 Outlook

$ in millions (except per share amounts), Square Feet in millions

Third Quarter

2023 YTD

2023 Full Year

Forecast

Prior Full Year

Forecast

Net income (loss) per share – diluted

 

$(0.10)

 

$(0.21) - $(0.11)

 

 

$(0.28) - $(0.18)

 

 

 

 

 

 

 

 

 

 

Active Developments and Redevelopments

 

Total Direct Costs of Projects Underway [1]

 

$814

 

$773

 

 

$773

 

Direct Project Costs [2]

$164.2

$200 - $210

$175 - $185

Other Capitalized Costs

 

$26.8

 

$36 - $38

 

 

$36 - $38

 

Construction Loan Draws [2]

 

$132.5

 

$190 - $200

 

 

$170 - $175

 

JV Partner Equity Funding

 

$0.2

 

$0.4

 

 

$0.4

 

AIV Equity Funding [3]

 

$49.5

 

~$50

 

 

~$50

 

 

 

 

 

 

 

 

 

 

Pipeline Projects

 

 

 

 

 

 

 

 

Pipeline Size Gross Square Feet [4]

 

14.1

 

14.1

 

 

14.1

 

Pipeline Size Multifamily Units [4]

 

6,544

 

6,544

 

 

6,544

 

Pipeline Size Commercial Sq Ft [4]

 

1.7

 

1.7

 

 

1.7

 

Planning Costs

 

$13.7

 

$16 - $18

 

 

$20 - $25

 

 

 

 

 

 

 

 

 

 

Real Estate Transactions

 

 

 

 

 

 

 

 

Acquisitions

None

None

None

Dispositions [5]

$91.5

$98.5

$98.5

 

Operating Properties

 

Revenue Growth, before utility reimbursements

9.0%

8.25% - 8.75%

7.75% - 8.75%

Operating Expense Growth, net of utility reimbursements [6]

6.6%

5.75% - 6.75%

8.0% - 9.0%

Net Operating Income Growth

10.0%

9.00% - 9.75%

7.5% - 9.0%

Recurring Capital Expenditures

$9.2

$12 - $13

 $11 - $13

 

 

 

 

 

 

 

 

 

General and Administrative

$24.5

$33 - $34

$33 - $34

 

 

 

 

 

 

 

 

 

Leverage

 

 

 

 

 

 

 

 

Interest Expense, net of capitalization [7]

 

$19.2

 

$28 - $30

 

 

$33 - $35

 

[1] Includes land or leasehold value, calculated as the quarterly average and is reduced from prior guidance due to the accelerated stabilization of The Hamilton in 3Q 2023 and its corresponding removal from projects underway in 4Q 2023.

[2] Direct project costs and construction loan draws increased due primarily to timing and an acceleration of investment to optimize construction activities ahead of winter.

[3] AIV equity funding at the end of the third quarter 2023 was ahead of the full year target due to the timing of partnership reimbursements.

[4] Includes pipeline projects as presented on Supplemental Schedule 5b, calculated as the quarterly average.

[5] Dispositions include the gross proceeds from the partial sale of the Parkmerced mezzanine investment and the monetization of the related swaption. Full year guidance includes the additional $7 million payment expected by the end of the year. Aimco may receive additional proceeds if the buyer chooses to exercise its option to purchase the remaining Aimco interest in 2023.

[6] Full year operating expense guidance decreased by 225 basis points at the midpoint from prior guidance due to favorable tax bills in Chicago, Illinois and a successful real estate tax appeal in Miami, Florida.

[7] Includes contractual interest expense, exclusive of the amortization of deferred financing costs, and reduced by interest rate option payments which are included in the Realized and unrealized gains (losses) on interest rate options line on Aimco's income statement.

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 8


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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 and opportunistic 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 Washington, D.C. Our investment platform is managed by experienced professionals based in three regions, where it will focus its new investment activity: Southeast Florida, the Washington D.C. Metro Area and Colorado's Front Range. By regionalizing this platform, Aimco can leverage the in-depth local market knowledge of each regional leader, creating a comparative advantage when sourcing, evaluating, and executing investment opportunities.

Above all else, Aimco is committed to a culture of integrity, respect, and collaboration.

 

Contact

Matt Foster, Sr. Director, Capital Markets and Investor Relations

Investor Relations 303-793-4661, investor@aimco.com

 

 

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 9


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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 future plans and goals, including our pipeline investments and projects, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, projections regarding lease growth, our plans to form joint ventures, our plans for new acquisitions or dispositions, our strategic partnerships and value added therefrom, and changes to our corporate governance. 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 2023 and 2024 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 other force-majeure events. 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, 2022, 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.

 

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Consolidated Statements of Operations

(in thousands, except per share data) (unaudited)

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

  Rental and other property revenues

 

$

47,701

 

 

$

47,683

 

 

$

137,643

 

 

$

148,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

    Property operating expenses

 

 

18,328

 

 

 

17,455

 

 

 

54,648

 

 

 

56,384

 

    Depreciation and amortization

 

 

17,804

 

 

 

85,438

 

 

 

51,106

 

 

 

143,420

 

    General and administrative expenses [1]

 

 

8,198

 

 

 

10,809

 

 

 

24,487

 

 

 

29,243

 

  Total operating expenses

 

 

44,330

 

 

 

113,702

 

 

 

130,241

 

 

 

229,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest income [2]

 

 

2,486

 

 

 

915

 

 

 

7,022

 

 

 

2,036

 

    Interest expense [3]

 

 

(8,252

)

 

 

(9,719

)

 

 

(27,633

)

 

 

(65,865

)

    Mezzanine investment income (loss), net

 

 

(757

)

 

 

8,423

 

 

 

(1,013

)

 

 

24,990

 

    Realized and unrealized gains (losses) on interest rate options

 

 

955

 

 

 

9,209

 

 

 

3,280

 

 

 

48,005

 

    Realized and unrealized gains (losses) on
       equity investments

 

 

(1,066

)

 

 

(2,145

)

 

 

165

 

 

 

20,152

 

    Gains on dispositions of real estate

 

 

-

 

 

 

75,539

 

 

 

1,878

 

 

 

170,004

 

Lease modification income

 

 

-

 

 

 

1,577

 

 

 

-

 

 

 

206,963

 

Income from unconsolidated real estate partnerships

 

 

320

 

 

 

159

 

 

 

614

 

 

 

459

 

Other income (expense), net

 

 

(1,593

)

 

 

(1,329

)

 

 

(6,490

)

 

 

(4,238

)

Income (loss) before income tax benefit

 

 

(4,536

)

 

 

16,610

 

 

 

(14,775

)

 

 

321,834

 

    Income tax benefit (expense)

 

 

6,210

 

 

 

17,563

 

 

 

10,823

 

 

 

(24,338

)

Net income (loss)

 

 

1,674

 

 

 

34,173

 

 

 

(3,952

)

 

 

297,496

 

Net (income) loss attributable to redeemable noncontrolling
     interests in consolidated real estate partnerships

 

 

(3,610

)

 

 

(2,907

)

 

 

(10,460

)

 

 

(5,446

)

Net (income) loss attributable to noncontrolling interests
     in consolidated real estate partnerships

 

 

(447

)

 

 

(240

)

 

 

(1,060

)

 

 

(585

)

Net (income) loss attributable to common noncontrolling
     interests in Aimco Operating Partnership

 

 

123

 

 

 

(1,554

)

 

 

775

 

 

 

(14,648

)

   Net income (loss) attributable to Aimco

 

$

(2,260

)

 

$

29,472

 

 

$

(14,697

)

 

$

276,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders per
share – basic

 

$

(0.02

)

 

$

0.19

 

 

$

(0.10

)

 

$

1.82

 

Net income (loss) attributable to common stockholders per
share – diluted

 

$

(0.02

)

 

$

0.19

 

 

$

(0.10

)

 

$

1.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding –
basic

 

 

143,299

 

 

 

149,611

 

 

 

144,431

 

 

 

149,706

 

Weighted-average common shares outstanding –
diluted

 

 

143,299

 

 

 

151,197

 

 

 

144,431

 

 

 

151,076

 

 

[1] General and administrative expenses decreased in the three and nine months ended September 30, 2023 from the same periods ending September 30, 2022, due primarily to a decrease in expenses for consulting services paid to AIR Communities; this service agreement concluded on December 31, 2022.

[2] Interest income increased in the three and nine months ended September 30, 2023 from the same periods ending September 30, 2022, due primarily to increased interest earned on greater amounts of invested cash at higher rates in the current year versus the prior year.

[3] Interest expense decreased in the three and nine months ended September 30, 2023 from the same periods ending September 30, 2022, due primarily to the prepayment of debt during 2022.

See Item 2 of Aimco's Third Quarter 2023 SEC Form 10-Q, filed November 6, 2023, for additional discussion and analysis of Aimco's operations.

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 11


img255192919_2.jpg 

Consolidated Balance Sheets

(in thousands) (unaudited)

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Buildings and improvements

 

$

1,546,503

 

 

$

1,322,381

 

Land

 

 

638,007

 

 

 

641,102

 

   Total real estate

 

 

2,184,510

 

 

 

1,963,483

 

Accumulated depreciation

 

 

(564,686

)

 

 

(530,722

)

   Net real estate

 

 

1,619,824

 

 

 

1,432,761

 

Cash and cash equivalents

 

 

95,680

 

 

 

206,460

 

Restricted cash

 

 

20,205

 

 

 

23,306

 

Mezzanine investments

 

 

158,173

 

 

 

158,558

 

Interest rate options

 

 

9,161

 

 

 

62,387

 

Unconsolidated real estate partnerships

 

 

22,667

 

 

 

15,789

 

Notes receivable

 

 

39,802

 

 

 

39,014

 

Right-of-use lease assets - finance leases

 

 

109,311

 

 

 

110,269

 

Other assets, net

 

 

176,043

 

 

 

132,679

 

   Total assets

 

$

2,250,866

 

 

$

2,181,223

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Non-recourse property debt, net

 

$

869,586

 

 

$

929,501

 

Construction loans, net

 

 

250,630

 

 

 

118,698

 

   Total indebtedness

 

 

1,120,216

 

 

 

1,048,199

 

Deferred tax liabilities

 

 

112,068

 

 

 

119,615

 

Lease liabilities - finance leases

 

 

117,666

 

 

 

114,625

 

Mezzanine investment - participation sold

 

 

34,402

 

 

 

 

Accrued liabilities and other

 

 

111,049

 

 

 

106,600

 

   Total liabilities

 

 

1,495,401

 

 

 

1,389,039

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests in consolidated real estate partnerships

 

 

170,201

 

 

 

166,826

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common Stock

 

 

1,420

 

 

 

1,466

 

Additional paid-in capital

 

 

472,261

 

 

 

496,482

 

Retained earnings

 

 

35,207

 

 

 

49,904

 

   Total Aimco equity

 

 

508,888

 

 

 

547,852

 

Noncontrolling interests in consolidated real estate partnerships

 

 

48,703

 

 

 

48,294

 

Common noncontrolling interests in Aimco Operating Partnership

 

 

27,673

 

 

 

29,212

 

   Total equity

 

 

585,264

 

 

 

625,358

 

   Total liabilities and equity

 

$

2,250,866

 

 

$

2,181,223

 

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 12


img255192919_2.jpg 

Supplemental Schedule 1

 

EBITDAre and Adjusted EBITDAre

(in thousands) (unaudited)

 

 

Three Months Ended
September 30, 2023

 

 

Twelve Months Ended
September 30, 2023

 

Net Income (loss)

$

1,674

 

 

$

(209,274

)

Adjustments:

 

 

 

 

 

Interest expense

 

8,252

 

 

 

35,610

 

Income tax (benefit) expense

 

(6,210

)

 

 

(17,896

)

Gains on dispositions of real estate

 

-

 

 

 

(7,738

)

Lease modification income

 

-

 

 

 

-

 

Depreciation and amortization

 

17,804

 

 

 

66,654

 

Adjustment related to EBITDAre of unconsolidated partnerships

 

25

 

 

 

825

 

EBITDAre

$

21,545

 

 

$

(131,819

)

Net (Income) loss attributable to redeemable noncontrolling Interests consolidated real estate partnerships

 

(3,610

)

 

 

(13,843

)

Net (Income) loss attributable to noncontrolling interests consolidated real estate partnerships

 

(447

)

 

 

(4,146

)

EBITDAre adjustments attributable to noncontrolling interests

 

22

 

 

 

(156

)

Mezzanine investment (income) loss, net

 

757

 

 

 

205,242

 

Realized and unrealized (gains) losses on interest rate options

 

(955

)

 

 

(3,481

)

Adjusted EBITDAre

$

17,312

 

 

$

51,798

 

 

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 13


img255192919_2.jpg 

Supplemental Schedule 2

 

Aimco Leverage and Maturities

(dollars in thousands) (unaudited)

 

 

 

 

 

Aimco Share of

 

 

 

 

 

Total

 

 

Weighted
Average

 

 

Weighted Average Interest Rate

 

Debt

 

Consolidated

 

 

Unconsolidated
Partnerships

 

 

Noncontrolling
Interests

 

 

Aimco
Share

 

 

Maturity
(Years)

 

 

Stated

 

 

Capped

 

Fixed rate loans payable

 

$

772,940

 

 

$

4,690

 

 

$

(151

)

 

$

777,480

 

 

 

7.4

 

 

 

4.25

%

 

 

4.25

%

Floating rate loans payable

 

 

104,183

 

 

 

8,183

 

 

 

(11,213

)

 

 

101,154

 

 

 

1.6

 

 

 

10.26

%

 

 

8.43

%

Construction loan debt [1]

 

 

258,433

 

 

 

 

 

 

(19,633

)

 

 

238,800

 

 

 

2.1

 

 

 

9.56

%

 

 

7.82

%

   Total non-recourse debt [2]

 

$

1,135,557

 

 

$

12,874

 

 

$

(30,997

)

 

$

1,117,434

 

 

 

5.7

 

 

 

6.01

%

 

 

5.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving Credit Facility

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and restricted cash [3]

 

 

(115,885

)

 

 

 

 

 

1,416

 

 

 

(114,469

)

 

 

 

 

 

 

 

 

 

   Net Leverage

 

$

1,019,672

 

 

$

12,874

 

 

$

(29,581

)

 

$

1,002,965

 

 

 

 

 

 

 

 

 

 

 

Aimco Share Non-Recourse Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rate on Maturing Debt

 

 

 

Amortization

 

 

Maturities [4]

 

 

Total

 

 

Maturities as a
Percent of Total

 

 

Stated

 

 

Capped

 

2023 Q4

 

$

977

 

 

$

 

 

$

977

 

 

 

%

 

 

%

 

 

%

Total 2023

 

 

977

 

 

 

 

 

 

977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024 Q1

 

 

987

 

 

 

11,670

 

 

 

12,658

 

 

 

1.04

%

 

 

11.78

%

 

 

9.95

%

2024 Q2

 

 

991

 

 

 

8,183

 

 

 

9,174

 

 

 

0.73

%

 

 

12.75

%

 

 

11.67

%

2024 Q3

 

 

1,000

 

 

 

100,700

 

 

 

101,700

 

 

 

9.01

%

 

 

8.64

%

 

 

6.31

%

2024 Q4

 

 

1,015

 

 

 

 

 

 

1,015

 

 

 

 

 

 

 

 

 

 

Total 2024

 

 

3,993

 

 

 

120,553

 

 

 

124,546

 

 

 

10.79

%

 

 

9.23

%

 

 

7.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

4,144

 

 

 

214,297

 

 

 

218,441

 

 

 

19.18

%

 

 

10.18

%

 

 

8.59

%

2026

 

 

2,822

 

 

 

75,519

 

 

 

78,341

 

 

 

6.76

%

 

 

3.10

%

 

 

3.10

%

2027

 

 

2,122

 

 

 

 

 

 

2,122

 

 

 

 

 

 

 

 

 

 

2028

 

 

2,201

 

 

 

 

 

 

2,201

 

 

 

 

 

 

 

 

 

 

2029

 

 

2,284

 

 

 

179,646

 

 

 

181,930

 

 

 

16.08

%

 

 

4.66

%

 

 

4.66

%

2030

 

 

2,370

 

 

 

 

 

 

2,370

 

 

 

 

 

 

 

 

 

 

2031

 

 

1,702

 

 

 

104,508

 

 

 

106,210

 

 

 

9.35

%

 

 

3.20

%

 

 

3.20

%

2032

 

 

118

 

 

 

221,639

 

 

 

221,757

 

 

 

19.83

%

 

 

4.62

%

 

 

4.62

%

Thereafter

 

 

 

 

 

178,539

 

 

 

178,539

 

 

 

15.98

%

 

 

4.56

%

 

 

4.56

%

   Total Aimco Share

 

$

22,733

 

 

$

1,094,701

 

 

$

1,117,433

 

 

 

 

 

 

 

 

 

 

[1] Aimco’s construction loan debt consists primarily of non-recourse, floating rate loans.

[2] Consolidated total non-recourse debt excludes $15.3 million of deferred financing costs.

[3] On September 30, 2023, Aimco had $54.3 million invested in a four-month treasury bill that was excluded from cash in accordance with U.S. GAAP.

[4] Debt maturities are presented with the earliest maturity date and do not include contractual extension options. Including extensions, the weighted average maturity is 6.3 years and Aimco has only $19.9 million of loans, at Aimco share, maturing over the next 30 months.

 

Common Stock, Partnership Units, and Equivalents

(in thousands) (unaudited)

 

September 30, 2023

 

Class A Common Stock Outstanding

 

141,995

 

Participating unvested restricted stock

 

2,485

 

Dilutive options, share equivalents, and non-participating unvested restricted stock

 

1,499

 

Total shares and dilutive share equivalents

 

145,979

 

Common Partnership Units and equivalents outstanding

 

8,704

 

Total shares, units and dilutive share equivalents

 

154,683

 

 

Third Quarter 2023 Earnings Release and Supplemental Schedules | 14


img255192919_2.jpg 

Supplemental Schedule 3

 

Aimco Portfolio

(square feet in thousands) (land in acres) (unaudited)

 

 

Number of Properties

 

 

Number of Apartment
Homes [3]

 

 

Office and Retail Sq Ft

 

 

Hotel Keys

 

 

Development Land [4]

 

Consolidated