Apartment Investment and Management : Aimco Provides Recent Highlights and Second Quarter Financial Results - Form 8-K - Marketscreener.com

Aimco Provides Recent Highlights and Second Quarter Financial Results
Denver, Colorado, August 4, 2022 – Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today second quarter results for 2022 and provided highlights on recent activities.
Wes Powell, Aimco President and Chief Executive Officer, comments: “Aimco has accomplished a great deal during 2022 and we are well positioned for continued success. The early monetization of our four development assets leased from AIR Communities (“AIR”) highlights our team’s ability to execute and will lead to $100 million dollars of value creation for Aimco shareholders.
“Our diversified portfolio of income producing properties continues to yield strong results, with net operating income up 14.9% during the first half of 2022.
“During the year we sold two stabilized multifamily assets above the values used in our internal Net Asset Value (“NAV”) estimate and also added multi-phase development opportunities in South Florida and Washington, D.C. Through opportunities directly sourced by the Aimco team, our future development pipeline has nearly tripled since the start of 2021, and now, in total, has the potential for more than 15 million square feet of residential and mixed-use development.
“We have agreements in place that will retire or refinance more than $1.0 billion of near-term liabilities and in doing so improved our balance sheet which is now comprised of primarily fixed-rate debt with an average term to maturity of 8.4 years.”
Mr. Powell continued, “I am pleased with the ongoing value creation being delivered by the Aimco team but also recognize that Aimco shares have traded at sizable discounts to our most recently published NAV. As such, in the first half of the year Aimco repurchased nearly 750,000 shares and, in July, Aimco’s Board of Directors updated the authorization for the purchase of up to 15 million additional shares.
“I am thankful to the Aimco team for their dedication and good work, and to the Aimco Board of Directors for their engagement and guidance, as we execute on our shared commitment to building, and unlocking, value for Aimco shareholders.”
Financial Results and Recent Highlights
Second Quarter 2022 Earnings Release and Supplemental Schedules | 3
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.
As of June 30, 2022, Aimco had eight active development and redevelopment projects located in five U.S. markets, in varying phases of construction and lease-up. These projects remain on track, as measured by budget, lease-up metrics, and current market valuations. During the second quarter, Aimco invested $62.5 million in development and redevelopment activities. Updates include:
Alternative Investments
Aimco makes alternative investments where it has special knowledge or expertise relevant to the venture and opportunity exists for positive asymmetric outcomes. Aimco’s current alternative investments include a mezzanine loan secured by a stabilized multifamily property with an option to participate in future multifamily development as well as three passive equity investments. Updates include:
Second Quarter 2022 Earnings Release and Supplemental Schedules | 4
Investment Activity
Aimco is focused on development and redevelopment, funded through joint ventures. Aimco will also consider opportunistic investments in related activities. Updates include:
Operating Property Results
Aimco owns a diversified portfolio of operating apartment communities located in ten major U.S. markets with average rents in line with local market averages. Aimco also owns one commercial office building that is part of an assemblage with an adjacent apartment building.
Aimco’s operating properties produced solid results for the quarter ended June 30, 2022.
Second Quarter
Year-to-Date
Stabilized Operating Properties
Year-over-Year
Sequential
Year-over-Year
($ in millions)
2022
2021
Variance
1Q 2022
Variance
2022
2021
Variance
Average Daily Occupancy
97.7%
97.5%
0.2%
98.5%
(0.8%)
98.1%
97.6%
0.5%
Revenue, before utility reimbursements
$33.1
$29.8
11.2%
$32.2
2.7%
$65.3
$59.0
10.7%
Expenses, net of utility reimbursements
10.4
9.9
4.8%
10.2
1.7%
20.7
20.1
2.6%
Net operating income (NOI)
22.7
19.8
14.4%
22.0
3.2%
44.7
38.9
14.9%
*Excluded from the table above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share.
1001 Brickell Bay Drive, a waterfront office building in Miami, Florida, is owned as part of a larger assemblage with substantial development potential. In the first half of 2022, Aimco executed leases on over 60,000 square feet of office space, at rates per square foot 20% higher than leases executed in the first half of 2021. At the end of the second quarter 2022, the building was 85% occupied, up from 73% at the same time last year.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 5
Property Dispositions
Balance Sheet and Financing Activity
Aimco is highly focused on maintaining a strong balance sheet, including having at all times ample liquidity. As of June 30, 2022, Aimco had access to $215.5 million, including $81.8 million of cash on hand, $12.5 million of restricted cash, and the capacity to borrow up to $121.2 million on its revolving credit facility.
Aimco’s net leverage as of June 30, 2022, was as follows:
as of June 30, 2022
as of June 30, 2022
(proforma the final payoff of the notes payable to AIR)
Proportionate, $ in thousands
Amount
Weighted Avg.
Maturity (Yrs.)
Amount
Weighted Avg.
Maturity (Yrs.)
Total non-recourse property debt
$
798,492
8.4
$
798,492
8.4
Total non-recourse construction loan debt
203,395
1.9
203,395
1.9
Notes payable to AIR
147,039
1.6

Cash and restricted cash
(94,308
)
(94,308
)
Net Leverage
$
1,054,618
$
907,579
Debt Refinancings
Second Quarter 2022 Earnings Release and Supplemental Schedules | 6
Construction Lending
Private Equity Financing
Public Market Equity
Common Stock Repurchases
Special Dividend
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.
Aimco added a new Supplemental Schedule that presents the components of Aimco’s NAV to its Second Quarter 2022 Earnings Release and Supplemental Information. This information can be found in Supplemental Schedule 8, on page 19 of this release.
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.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 7
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.
Contact
Matt Foster, Sr. Director, Capital Markets and Investor Relations
Investor Relations 303-793-4661, investor@aimco.com
Second Quarter 2022 Earnings Release and Supplemental Schedules | 8
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, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, our plans to form joint ventures, and the return to in-person activities. 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.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 9
Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
REVENUES:
Rental and other property revenues
$
50,697
$
40,418
$
100,691
$
80,222
OPERATING EXPENSES:
Property operating expenses
19,708
16,403
38,929
33,345
Depreciation and amortization [1]
34,863
20,639
57,981
41,356
General and administrative expenses [2][3]
8,961
7,383
18,433
13,694
Total operating expenses
63,532
44,425
115,343
88,395
Interest expense
(41,546
)
(12,638
)
(56,147
)
(25,315
)
Mezzanine investment income, net
8,330
7,551
16,567
15,018
Realized and unrealized gains (losses) on interest rate options
20,017
(16,970
)
38,795
8,377
Realized and unrealized gains (losses) on
equity investments [4]
26,630
875
22,297
875
Gain (Loss) on the disposition of real estate
94,598

94,465

Lease modification income [1]
205,387

205,387

Other income (expenses), net
(1,413
)
2,043
(1,488
)
2,406
Income before income tax benefit
299,168
(23,146
)
305,224
(6,812
)
Income tax benefit (expense)
(45,957
)
2,760
(41,901
)
7,860
Net income
253,211
(20,386
)
263,323
1,048
Net (income) loss attributable to redeemable noncontrolling
interests in consolidated real estate partnerships
(1,069
)
(66
)
(2,539
)
86
Net (income) loss attributable to noncontrolling interests
in consolidated real estate partnerships
(346
)
(275
)
(344
)
(566
)
Net (income) loss attributable to common noncontrolling
interests in Aimco Operating Partnership
(12,659
)
1,037
(13,094
)
(44
)
Net income (loss) attributable to Aimco
$
239,137
$
(19,690
)
$
247,346
$
524
Net income (loss) attributable to common stockholders per
share – basic [5]
$
1.58
$
(0.13
)
$
1.63
$
0.00
Net income (loss) attributable to common stockholders per
share – diluted [5]
$
1.57
$
(0.13
)
$
1.62
$
0.00
Weighted-average common shares outstanding –
basic
149,600
149,166
149,694
149,082
Weighted-average common shares outstanding –
diluted
150,423
149,166
150,660
149,442
[1] In the three months ended June 30, 2022, as a result of the lease termination agreement with AIR Communities (AIR) and in accordance with GAAP, Aimco accelerated $13.9 million of depreciation on the associated leasehold improvements. The remaining $66.1 million of depreciation will be recognized over the remaining lease terms ending September 1, 2022. Also, in accordance with GAAP, Aimco reduced the right-of-use lease assets associated with these properties to zero and recognized lease modification income of $205.4 million. Per the terms of the lease termination agreement, Aimco will receive $200 million of cash payments from AIR in exchange for the return of the properties from Aimco to AIR, in the three months ended June 30, 2022, Aimco received $10 million of these payments in the form of a nonrefundable deposit.
[2] General and administrative expense includes $1.0 million and $2.0 million of expenses to be reimbursed to AIR, per agreement upon separation, for consulting services, with respect to strategic growth, direction, and advice, in the three and six months ended June 30, 2022, respectively. This agreement is expected to conclude at year end.
[3] General and administrative expense for the three months and six months ended June 30, 2021 was prior to the full build out of Aimco’s platform and are not representative of Aimco’s anticipated expenses.
[4] Realized and unrealized gains (losses) on equity investments increased due primarily to the change in the fair market value of Aimco’s investment in IQHQ, a life science real estate developer. In the three months ended June 30, 2022, Aimco realized a gain of $5.7 million in conjunction with the redemption of 22% of its investment in IQHQ.
[5] See Note 6 of Aimco’s Second Quarter 2022 SEC Form 10-Q, filed August 4, 2022, for additional details.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 10
Consolidated Balance Sheets
(in thousands) (unaudited)
June 30,
December 31,
2022
2021
Assets
Buildings and improvements
$
1,269,624
$
1,257,214
Land
601,757
534,285
Total real estate
1,871,381
1,791,499
Accumulated depreciation
(519,868
)
(561,115
)
Net real estate
1,351,513
1,230,384
Cash and cash equivalents
81,799
233,374
Restricted cash
12,510
11,208
Mezzanine investments
354,365
337,797
Interest rate options
51,286
25,657
Right-of-use lease assets
130,532
429,768
Receivable from lease termination
186,318

Other assets, net
251,089
165,913
Total assets
$
2,419,412
$
2,434,101
Liabilities and Equity
Non-recourse property debt, net
$
801,434
$
483,137
Construction loans, net
199,715
163,570
Notes payable to AIR
147,039
534,127
Total indebtedness
1,148,188
1,180,834
Deferred tax liabilities
136,950
124,747
Lease liabilities
123,785
435,093
Accrued liabilities and other
133,653
97,400
Total liabilities
1,542,576
1,838,074
Redeemable noncontrolling interests in consolidated real estate partnership
51,814
33,794
Equity:
Common Stock
1,492
1,498
Additional paid-in capital
515,065
521,842
Retained earnings (accumulated deficit)
224,567
(22,775
)
Total Aimco equity
741,124
500,565
Noncontrolling interests in consolidated real estate partnerships
44,665
35,213
Common noncontrolling interests in Aimco Operating Partnership
39,233
26,455
Total equity
825,022
562,233
Total liabilities and equity
$
2,419,412
$
2,434,101
Second Quarter 2022 Earnings Release and Supplemental Schedules | 11
Supplemental Schedule 1
EBITDAre and Adjusted EBITDAre
(in thousands) (unaudited)
Three Months Ended
June 30, 2022
Trailing 12 Months Ended
June 30, 2022
Net Income
$
253,211
$
255,393
Adjustments:
Interest expense
41,546
83,734
Income tax benefit
45,957
36,191
Gain/Loss on Sale of Real Estate
(94,598
)
(94,465
)
Lease modification income
(205,387
)
(205,387
)
Depreciation and amortization
34,863
101,338
Adjustment related to EBITDAre of unconsolidated partnerships
259
922
EBITDAre
$
75,851
$
177,725
Net Income attributable to redeemable noncontrolling Interests consolidated real estate partnership
(1,069
)
(2,716
)
Net Income attributable to noncontrolling Interests consolidated real estate partnership
(346
)
(915
)
EBITDAre adjustments attributable to noncontrolling interests
(221
)
(320
)
Mezzanine investment income, net accrued
(8,330
)
(31,984
)
Unrealized gains (losses) on interest rate options
(20,017
)
(36,927
)
Unrealized gains (losses) on IQHQ investment
(20,501
)
(20,501
)
Adjusted EBITDAre [1]
$
25,367
$
84,361
[1] Adjusted EBITDAre increased in the second quarter due primarily to the realized gain on the redemption of 22% of Aimco’s investment in IQHQ, a life science real estate developer.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 12
Supplemental Schedule 2
Aimco Leverage and Maturities
(dollars in thousands) (unaudited)
Debt
Consolidated
Aimco Share of Unconsolidated
Partnerships
Noncontrolling
Interests
Total
Aimco
Share
Weighted
Average
Maturity
(Years)
Weighted
Average
Stated
Interest Rate
Fixed rate loans payable
$
777,150
$
5,242
$
(171
)
$
782,221
8.7
4.24
%
Floating rate loans payable
31,904

(15,633
)
16,271
1.5
7.50
%
Total non-recourse property debt [1]
$
809,054
$
5,242
$
(15,804
)
$
798,492
8.4
4.37
%
Construction loan debt [1] [2]
203,395


203,395
1.9
4.53
%
Notes payable to AIR [3]
147,039


147,039
1.6
5.20
%
Cash and restricted cash
(94,308
)


(94,308
)
Net Leverage
$
1,065,179
$
5,242
$
(15,804
)
$
1,054,618
Aimco Share Non-Recourse Property and Construction Loan Debt
Amortization
Maturities [4]
Total
Maturities as a
Percent of Total
Average Rate on
Maturing Debt
2022 Q3
$
927

$

$
927

%

%
2022 Q4
942


942


Total 2022
1,869

1,868


2023 Q1
957

957


2023 Q2
953

953


2023 Q3
962

962


2023 Q4
977

977


Total 2023
3,850

3,850


2024
3,993
219,666
223,659
21.93
%
4.75
%
2025
4,144

4,144


2026
2,822
75,519
78,341
7.54
%
3.10
%
2027
2,122

2,122


2028
2,201

2,201


2029
2,284
179,646
181,930
17.93
%
4.66
%
2030
2,370

2,370


2031
1,702
104,508
106,210
10.43
%
3.20
%
Thereafter
118
395,074
395,192
39.43
%
4.61
%
Total Aimco Share
$
27,475
$
974,413
$
1,001,887
[1] Consolidated total non-recourse property debt and construction loan debt excludes $11.3 million of deferred financing costs.
[2] Aimco’s construction loan debt consists of non-recourse, floating rate loans.
[3] The notes payable to AIR were repaid in full subsequent to quarter end.
[4] Debt maturities are presented with the earliest maturity date and do not include contractual extension options. Aimco construction and land loans have extension options of one to two years.
Common Stock, Partnership Units, and Equivalents
(in thousands) (unaudited)
June 30, 2022
Class A Common Stock Outstanding
149,166
Participating unvested restricted stock
2,161
Dilutive options, share equivalents, and non-participating unvested restricted stock
946
Total shares and dilutive share equivalents
152,273
Common Partnership Units and equivalents outstanding
7,994
Total shares, units and dilutive share equivalents
160,267
Second Quarter 2022 Earnings Release and Supplemental Schedules | 13
Supplemental Schedule 3
Aimco Portfolio
(unaudited)
Number of Properties
Number of Apartment Homes [4]
Aimco Share of Apartment Homes
Consolidated
Stabilized Operating Properties
21
5,582
5,553
Other Real Estate [1]
2
58
58
Development and Redevelopment – Owned
3
965
896
Development and Redevelopment – Land [2]
6
26
26
Development and Redevelopment – Leased
5
889
889
Assets Held for Sale [3]
3
239
239
Total Consolidated
40
7,759
7,661
Unconsolidated
6
142
72
Total Portfolio
46
7,901
7,734
[1] Other Real Estate includes:
[2] Development and Redevelopment – Land includes:
[3] As of June 30, 2022, Aimco was under contract to sell two apartment communities in the Seattle market and one of the three land parcels acquired in January by its Fort Lauderdale joint venture with The Kushner Companies. Aimco closed the sale of one of the Seattle properties in July with the remaining apartment community and land sales expected to close in the third quarter of 2022.
[4] Number of apartment homes includes all current apartments and those authorized for development, it does not include office, retail, or hotel units.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 14
Supplemental Schedule 4
Aimco Capital Additions
(consolidated amounts in thousands) (unaudited)
Three Months Ended
Six Months Ended
June 30, 2022
June 30, 2022
Capital Replacements and Casualty
$
4,029
$
6,856
Property Upgrades
613
800
Development and Redevelopment [1]
62,489
128,247
Total Capital Additions
$
67,132
$
135,902
[1] Second quarter 2022 total capital additions include $50 million of Direct Capital Investment, $46 million on active projects and $4 million on projects in planning, and certain other costs capitalized in accordance with GAAP.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 15
Supplemental Schedule 5
Aimco Active Development and Redevelopment Project Summaries
(dollars in millions) (unaudited)
Direct Capital Investment
Location
Number of units approved for development or redevelopment
Leased or Pre-Leased
Leasehold Value
Planned
To-Date
Remaining
Expected / Actual
Initial
Occupancy
[6]
Expected / Actual
Stabilized
Occupancy
[6]
Expected / Actual
NOI
Stabilization
[6][7]
Aimco Owned
The Benson Hotel and Faculty Club
Aurora, CO
106


$
70.0
$
46.9
$
23.1
1Q 2023
2Q 2025
4Q 2026
Upton Place [1]
Washington, D.C.
689


260.0
107.9
152.1
4Q 2023
4Q 2025
4Q 2026
The Hamilton [2]
Miami, FL
276
15%

95.0
77.8
17.3
3Q 2022
2Q 2023
3Q 2024
Subtotal
1,071
$

$
425.0
$
232.6
$
192.5
Leased Properties [3]
Flamingo Point North Tower
Miami Beach, FL
366
99%
$
240.0
$
60.0
$
55.7
$
4.3
3Q 2021
2Q 2022
4Q 2023
707 Leahy
Redwood City, CA
110
95%
79.1



1Q 2020
3Q 2021
4Q 2022
The Fremont
Aurora, CO
253
97%
89.0
0.3
0.3

2Q 2020
2Q 2022
4Q 2023
Prism
Cambridge, MA
136
99%
60.9
4.2
4.2

1Q 2021
4Q 2021
4Q 2022
Oak Shore
Corte Madera, CA
24

6.1
47.1
11.8
35.3
3Q 2023
2Q 2024
2Q 2025
Subtotal
889
$
475.1
$
111.6
$
72.0
$
39.6
Total [4]
1,960
$
475.1
$
536.6
$
304.6
$
232.1
Estimated Size of Portfolio in Active Development and Redevelopment [5]
$
1,011.7
[1] Planned Direct Capital Investment for Upton Place at Aimco’s 90% share is $234 million.
[2] Initial occupancy at The Hamilton is now expected in 3Q 2022 with stabilized occupancy now expected in 2Q 2023.
[3] In June, Aimco and AIR agreed to the early termination of the leases at Flamingo Point North Tower, 707 Leahy, The Fremont, and Prism in exchange for a payment of $200 million to Aimco from AIR. The leases will terminate on or before September 1, 2022 at which time Aimco will have one leased property from AIR, Oak Shore with an annualized lease payment of $0.3 million.
[4] The annualized NOI contribution from Aimco’s Development and Redevelopment properties for the three months ended June 30, 2022 was $22.7 million.
[5] Estimated size of portfolio in active development and redevelopment represents the property valuation for leasehold and the planned Direct Capital Investment.
[6] Occupancy timing and stabilization are estimates subject to change.
[7] The weighted average expected stabilized NOI yield on total expected Direct Capital Investment plus Leasehold Value (when applicable) for the developments and redevelopments presented is expected to be 6.3%.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 16
Supplemental Schedule 6
Stabilized Operating Results
(amounts in thousands, except community, home and per home data) (unaudited)
2Q 2022 v. 2Q 2021
Revenues, Before Utility
Reimbursements
Expenses, Net of Utility
Reimbursements
Net Operating Income
Net Operating
Income
Margin
Average Daily
Occupancy
During Period
Average
Revenue per
Aimco Apartment
Home
Apartment
Communities
Apartment
Homes
2Q 2022
2Q 2021
Growth
2Q 2022
2Q 2021
Growth
2Q 2022
2Q 2021
Growth
2Q 2022
2Q 2022
2Q 2021
2Q 2022
2Q 2021
Boston
5
2,719
$
14,599
$
13,301
9.8
%
$
4,270
$
3,988
7.1
%
$
10,329
$
9,313
10.9
%
70.8%
97.4%
97.9%
$
1,838
$
1,666
Chicago
6
1,437
8,520
7,840
8.7
%
2,975
2,701
10.1
%
5,545
5,139
7.9
%
65.1%
97.8%
97.4%
2,022
1,868
New York City
3
150
1,758
1,496
17.5
%
839
847
(0.9
%)
919
649
41.6
%
52.3%
98.5%
92.1%
3,965
3,610
SE Florida
2
729
5,254
4,483
17.2
%
1,468
1,443
1.7
%
3,786
3,040
24.5
%
72.1%
98.5%
98.6%
2,440
2,079
Other Markets
4
507
2,973
2,645
12.4
%
868
964
(10.0
%)
2,105
1,681
25.2
%
70.8%
97.5%
95.6%
2,004
1,819
Total
20
5,542
$
33,104
$
29,765
11.2
%
$
10,420
$
9,943
4.8
%
$
22,684
$
19,822
14.4
%
68.5%
97.7%
97.5%
$
2,039
$
1,836
2Q 2022 v. 1Q 2022
Revenues, Before Utility
Reimbursements
Expenses, Net of Utility
Reimbursements
Net Operating Income
Net Operating
Income
Margin
Average Daily
Occupancy
During Period
Average
Revenue per
Aimco Apartment
Home
Apartment
Communities
Apartment
Homes
2Q 2022
1Q 2022
Growth
2Q 2022
1Q 2022
Growth
2Q 2022
1Q 2022
Growth
2Q 2022
2Q 2022
1Q 2022
2Q 2022
1Q 2022
Boston
5
2,719
$
14,599
$
14,281
2.2
%
$
4,270
$
4,283
(0.3
%)
$
10,329
$
9,998
3.3
%
70.8%
97.4%
98.6%
$
1,838
$
1,777
Chicago
6
1,437
8,520
8,308
2.6
%
2,975
2,843
4.6
%
5,545
5,465
1.5
%
65.1%
97.8%
98.0%
2,022
1,966
New York City
3
150
1,758
1,725
1.9
%
839
879
(4.6
%)
919
846
8.6
%
52.3%
98.5%
99.1%
3,965
3,869
SE Florida
2
729
5,254
4,965
5.8
%
1,468
1,397
5.1
%
3,786
3,568
6.1
%
72.1%
98.5%
99.3%
2,440
2,287
Other Markets
4
507
2,973
2,944
1.0
%
868
845
2.7
%
2,105
2,099
0.3
%
70.8%
97.5%
98.4%
2,004
1,967
Total
20
5,542
$
33,104
$
32,223
2.7
%
$
10,420
$
10,247
1.7
%
$
22,684
$
21,976
3.2
%
68.5%
97.7%
98.5%
$
2,039
$
1,967
2Q 2022 YTD v. 2Q 2021 YTD
Revenues, Before Utility
Reimbursements
Expenses, Net of Utility
Reimbursements
Net Operating Income
Net Operating
Income
Margin
Average Daily
Occupancy
During Period
Average
Revenue per
Aimco Apartment
Home
Apartment
Communities
Apartment
Homes
2Q 2022 YTD
2Q 2021 YTD
Growth
2Q 2022 YTD
2Q 2021 YTD
Growth
2Q 2022 YTD
2Q 2021 YTD
Growth
2Q 2022 YTD
2Q 2022 YTD
2Q 2021 YTD
2Q 2022 YTD
2Q 2021 YTD
Boston
5
2,719
$
28,880
$
26,394
9.4
%
$
8,553
$
8,211
4.2
%
$
20,327
$
18,183
11.8
%
70.4%
98.0%
98.1%
$
1,807
$
1,648
Chicago
6
1,437
16,828
15,574
8.1
%
5,818
5,469
6.4
%
11,010
10,105
9.0
%
65.4%
97.9%
97.5%
1,994
1,853
New York City
3
150
3,483
2,940
18.5
%
1,718
1,746
(1.6
%)
1,765
1,194
47.8
%
50.7%
98.8%
90.0%
3,917
3,629
SE Florida
2
729
10,219
8,854
15.4
%
2,865
2,821
1.6
%
7,354
6,033
21.9
%
72.0%
98.9%
98.4%
2,363
2,056
Other Markets
4
507
5,917
5,256
12.6
%
1,713
1,892
(9.5
%)
4,204
3,364
25.0
%
71.0%
98.0%
96.1%
1,985
1,798
Total
20
5,542
$
65,327
$
59,018
10.7
%
$
20,667
$
20,139
2.6
%
$
44,660
$
38,879
14.9
%
68.4%
98.1%
97.6%
$
2,003
$
1,818
Excluded from the tables above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share.
Other Markets includes markets where Aimco owns a single Stabilized Operating Property: Denver, Colorado; Nashville, Tennessee; Atlanta, Georgia; and San Francisco, California.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 17
Supplemental Schedule 7
Acquisitions, Dispositions, and Leased Communities
(dollars in millions) (unaudited)
As of June 30, 2022
2022 Acquisitions
Land Acquisitions
Location
Closing Date
Purchase Price
Acres
Broward Land
Fort Lauderdale, FL
January 2022
$
49.0
4.2
34th and Biscayne Blvd
Miami, FL
January 2022
1.7
0.1
Flagler Village [1]
Fort Lauderdale, FL
June 2022
64.0
5.7
Total Land Acquisitions
$
114.7
10.0
2022 Dispositions
Apartment Dispositions
Location
Closing Date
Sales Price
Units
NOI
Cap Rate [2]
Property
Debt
Net Sales
Proceeds [3]
Pathfinder Village
Fremont, CA
May 2022
$
127.0
246
4.1
%
$
55.0
$
71.8
Total Dispositions [4]
$
127.0
246
4.1
%
$
55.0
$
71.8
[1] In June, Aimco closed on one of the three parcels at this site in Fort Lauderdale, Florida. In July, Aimco closed on the purchase of the second parcel at this site and expects to close on the third, and final, parcel in the third quarter of 2022.
[2] NOI Cap Rate is calculated based on the NOI (inclusive of property management fees) for the most recent quarter prior to the sale of asset, divided by the sales price.
[3] Net Sales Proceeds are after the repayment of debt, if any, net working capital settlements, payment of transaction costs and debt prepayment penalties, if applicable.
[4] Total Dispositions does not include the sale of Cedar Rim which closed in July.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 18
Supplemental Schedule 8
Net Asset Value Components
(dollars in millions) (unaudited)
2Q 2022
NOI [1]
Annualized
NOI
Operating Properties
Boston
$
10.3
$
41.3
Chicago
5.5
22.2
New York City
0.9
3.7
SE Florida
3.8
15.1
Other Markets
2.1
8.4
Total Stabilized Operating Properties
22.7
90.7
Other Real Estate [2]
3.1
12.3
Assets Held for Sale
1.2
4.9
Active Developments and Redevelopments (est. stabilized NOI) [3][4]
63.7
Total Stabilized and Other Real Estate
$
171.6
Value as of
June 30, 2022
Land and Alternative Investments
Land inventory at cost [5]
$
138.1
Mezzanine loan in Parkmerced Apartments [6]
354.4
Fair value of equity investment in IQHQ
59.7
Fair value of equity investments in RE Tech Funds
5.9
Cash and cash equivalents
Cash and cash equivalents
$
81.8
Restricted cash
12.5
Indebtedness
Amounts drawn on Aimco’s revolving secured credit facility
$

Non-recourse property debt, net
801.4
Construction loans, net
199.7
Preferred equity interests
51.8
Notes payable to AIR
147.0
Leaseholds [3][4]
475.1
Other
Investment remaining to complete active developments
and redevelopments [3]
232.1
Other liabilities, net
3.2
Common Stock, Partnership Units and Equivalents (in millions)
Total shares, units and dilutive share equivalents
160.3
[1] NOI at Aimco share, does not include property management fees of 3% of revenue
[2] Other Real Estate includes 1001 Brickell Bay Drive, Aimco’s class A office building located in the Brickell neighborhood of Miami, Florida and Eldridge Townhomes located in Elmhurst, Illinois.
[3] See Supplemental Schedule 5 for additional details
[4] In June, Aimco entered into an agreement with AIR Communities for the return of the four initial leased properties, and collapse of the corresponding leases, in exchange for a payment of $200 million due on or before September 1, 2022. Upon receipt of payment, Aimco estimates that it will earn a net profit of approximately $100 million for this transaction.
[5] Includes land purchased for development or redevelopment
[6] Includes the principal loan amount of $275 million plus accrued interest.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 19
Glossary and Reconciliations of Non-GAAP Financial and Operating Measures
This Earnings Release and Supplemental Information include certain financial and operating measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP. Aimco’s definitions and calculations of these Non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These Non-GAAP financial and operating measures should not be considered an alternative to GAAP net income or any other GAAP measurement of performance and should not be considered an alternative measure of liquidity.
AIMCO OP: AIMCO OP, L.P., a Delaware limited partnership, is the operating partnership in Aimco’s UPREIT structure. Aimco owns approximately 92.6% of the legal interest in the common partnership units of the Aimco OP and 95.0% of the economic interest in the common partnership units of the Aimco OP.
AVERAGE REVENUE PER APARTMENT HOME: Represents Aimco average monthly rental and other property revenues, excluding utility cost reimbursements, divided by the number of occupied apartment homes as of the end of the period.
DIRECT CAPITAL INVESTMENT: Represents all items related to the planning, construction, and management of development and redevelopment projects paid to third party providers. Direct Capital Investment does not include real estate taxes, insurance, right of use lease payments, and certain costs capitalized in accordance with GAAP, such as financing costs and internal team time.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION FOR REAL ESTATE (“EBITDAre”): Nareit defines EBITDAre as net income computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, further adjusted for:
Aimco believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of Aimco’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry and facilitates comparison of credit strength between Aimco and other companies.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 20
ADJUSTED EBITDAre: Adjusted EBITDAre is defined by Aimco as EBITDAre adjusted to exclude the effect of the following items for the reasons set forth below:
FREE CASH FLOW: Free Cash Flow, as calculated for Aimco’s retained portfolio, represents an apartment community’s property net operating income, less spending for Capital Replacements. Capital Replacement spending is a measure of the cost of capital asset used during the period. Aimco believes that Free Cash Flow is useful to investors as a supplemental measure of apartment community performance because it takes into consideration costs incurred during the period to replace capital assets that have been consumed during Aimco’s ownership.
MEZZANINE INVESTMENTS: Aimco’s Mezzanine Investments includes the $275 million mezzanine loan, and associated accrued interest, made by Aimco to a partnership owning Parkmerced Apartments, located in southwest San Francisco, California. For more information regarding this investment see Aimco’s SEC Form 10-K filed for the period ended December 31, 2021.
NET ASSET VALUE: Net Asset Value is calculated as the market value of a company’s assets less its liabilities and obligations. Aimco estimates the value of its portfolio using methods management believes to be appropriate based on the characteristics of the item being valued.
NET OPERATING INCOME (NOI) MARGIN: Represents an apartment community’s net operating income as a percentage of the apartment community’s rental and other property revenues.
OTHER EXPENSES, NET: Other expenses, net, generally consists of risk management activities related to Aimco’s unconsolidated partnerships and certain other corporate expenses.
OTHER LIABILITIES, NET: Other liabilities, net, as presented on Supplemental Schedule 8, Net Asset Value Components, generally consists of the land lease for Aimco’s Upton Place development, accrued expenses, resident security deposits, accounts payable, and other general liabilities, net of interest rate options and other assets, excluding the fair value of Aimco’s investments in IQHQ and real estate technology funds.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 21
Other liabilities, net as of June 30, 2022, as presented in Supplemental Schedule 8, Net Asset Value Components, is calculated as follows (in thousands):
Accrued Liabilities and Other (per Consolidated Balance Sheet)
134
Other assets, net (per Consolidated Balance Sheet)
(251)
Interest Rate Options (per Consolidated Balance Sheet)
(51)
Adjustments
Fair value of equity investment in IQHQ
60
Fair value of equity investments in RE Tech Funds
6
Land Lease on Upton Place
106
Other liabilities, net (per Schedule 8)
3
PREFERRED EQUITY INTERESTS: Preferred equity interests includes the redeemable non-controlling interests, as presented on Aimco’s Balance Sheet in accordance with GAAP, related to third party financing for Aimco’s Upton Place development.
PROPERTY NET OPERATING INCOME (NOI): NOI is defined by Aimco as total property rental and other property revenues less direct property operating expenses, including real estate taxes. NOI does not include: property management revenues, primarily from affiliates; casualties; property management expenses; depreciation; or interest expense. NOI is helpful because it helps both investors and management to understand the operating performance of real estate excluding costs associated with decisions about acquisition pricing, overhead allocations, and financing arrangements. NOI is also considered by many in the real estate industry to be a useful measure for determining the value of real estate. Reconciliations of NOI as presented in this Earnings Release and Supplemental Information to Aimco’s consolidated GAAP amounts are provided below.
Due to the diversity of its economic ownership interests in its apartment communities in the periods presented, Aimco evaluates the performance of the apartment communities in its segments using Property NOI, which represents the NOI for the apartment communities that Aimco consolidates and excludes apartment communities that it does not consolidate. Property NOI is defined as rental and other property revenue less property operating expenses. In its evaluation of community results, Aimco excludes utility cost reimbursement from rental and other property revenues and reflects such amount as a reduction of the related utility expense within property operating expenses. The following table presents the reconciliation of GAAP rental and other property revenue to the revenues before utility reimbursements and GAAP property operating expenses to expenses, net of utility reimbursements as presented on Supplemental Schedule 6.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 22
Segment NOI Reconciliation
Three Months Ended (in thousands)
June 30, 2022
June 30, 2021
Total Real Estate Operations
Revenues,
Before Utility
Reimbursements [1]
Expenses,
Net of Utility
Reimbursements
Revenues,
Before Utility
Reimbursements [1]
Expenses,
Net of Utility
Reimbursements
Total (per consolidated statements of operations)
$
50,697
$
19,708
$
40,418
$
16,403
Adjustment: Utilities reimbursement
(1,347
)
(1,347
)
(1,128
)
(1,128
)
Adjustment: Assets Held for Sale
(1,823
)
$
568
(1,798
)
634
Adjustment: Other Real Estate
(4,383
)
$
1,317
(3,138
)
1,090
Adjustment: Non-stabilized and other amounts not allocated [2]
(10,040
)
(9,825
)
(4,589
)
(7,056
)
Total Stabilized Operating (per Schedule 6)
$
33,104
$
10,420
$
29,765
$
9,943
Segment NOI Reconciliation
Six Months Ended (in thousands)
June 30, 2022
June 30, 2021
Total Real Estate Operations
Revenues,
Before Utility
Reimbursements [1]
Expenses,
Net of Utility
Reimbursements
Revenues,
Before Utility
Reimbursements [1]
Expenses,
Net of Utility
Reimbursements
Total (per consolidated statements of operations)
$100,691
$38,929
$80,222
$33,345
Adjustment: Utilities reimbursement
(2,903)
(2,903)
(2,473)
(2,473)
Adjustment: Assets Held for Sale
(3,628)
1,159
(3,503)
1,265
Adjustment: Other Real Estate
(9,378)
(2,822)
(6,324)
(2,127)
Adjustment: Non-stabilized and other amounts not allocated [2]
(19,455)
(13,696)
(8,903)
(9,871)
Total Stabilized Operating (per Schedule 6)
$65,327
$20,667
$59,018
$20,139
[1] Approximately two-thirds of Aimco’s utility costs are reimbursed by residents. These reimbursements are included in rental and other property revenues on Aimco’s consolidated statements of operations prepared in accordance with GAAP. This adjustment represents the reclassification of utility reimbursements from revenues to property operating expenses for the purpose of evaluating segment results and as presented on Supplemental Schedule 6. Aimco also excludes the reimbursement amounts from the calculation of Average Revenue per Apartment Home throughout this Earnings Release and Supplemental Schedules.
[2] Properties not included in the Stabilized Operating Portfolio and other amounts not allocated includes operating results of properties not presented in the Stabilized Operation Portfolio as presented on Supplemental Schedule 6 during the periods shown, as well as property management and casualty expense, which are not included in property operating expenses, net of utility reimbursements in the Supplemental Schedule 6 presentation.
REAL ESTATE CLASSIFICATIONS:Aimco’s real estate portfolio is diversified by price point, geography, and opportunity. Aimco’s consolidated portfolio is classified into the following groups:
DEVELOPMENT and REDEVELOPMENT – OWNED: Includes apartment communities currently under construction or in pre-construction that have not achieved a stabilized level of operations and communities that have been completed in recent years that had not achieved and maintained stabilized operations for both the current and the comparable prior periods.
DEVELOPMENT and REDEVELOPMENT – LAND: Includes land parcels being held for potential future construction of real estate.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 23
DEVELOPMENT and REDEVELOPMENT – LEASED: Includes communities leased from a third party currently under construction or in pre-construction that have not achieved a stabilized level of operations and communities that have been completed in recent years that had not achieved and maintained stabilized operations for both the current and the comparable prior periods.
STABILIZED OPERATING PROPERTIES: Apartment communities that (a) are owned and asset managed by Aimco, (b) had reached a stabilized level of operations as of January 1, 2021 and maintained it throughout the current and the comparable prior periods, and (c) are not expected to be sold within 12 months.
OTHER REAL ESTATE: Includes Aimco’s commercial office building and an apartment community acquired after January 1, 2021 which therefore does not have operational data for comparable prior periods.
ASSETS HELD FOR SALE: Includes those assets, that as of June 30, 2022, were under contract, with non-refundable deposits.
VALUE CREATION, NET OF COSTS: Value Creation, net of costs is defined by Aimco, in particular, as it relates to the termination of leases with AIR, as the lease termination payment less development and financing costs, net of operating revenues and expenses during the leasehold period.
Second Quarter 2022 Earnings Release and Supplemental Schedules | 24
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AIMCO – Apartment Investment & Management Company published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 21:38:07 UTC.

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