Aimco Announces Fourth Quarter Earnings
Aimco (NYSE: AIV) reported strong fourth quarter results for 2021, with a revenue increase of 9.7% year-over-year and 16.8% growth in Net Operating Income (NOI). The company closed a $52 million preferred equity financing to support the Upton Place project, enhancing its investment capital. Aimco's liquidity stood at $395 million at the quarter's end, with average occupancy rates rising to 98.7%. The Total Shareholder Return was an impressive 46.2% for 2021. Aimco repurchased 202,400 shares at an average price of $6.49, reflecting confidence in its valuation.
- Fourth quarter revenue increased by 9.7% year-over-year.
- Net Operating Income (NOI) rose by 16.8% in the fourth quarter.
- Total Shareholder Return was 46.2% for 2021.
- Aimco closed a $52 million preferred equity financing for development projects.
- Liquidity at $395 million supports future investments.
- Average occupancy increased to 98.7%, a 180 basis point rise year-over-year.
- Net loss attributable to common stockholders was $(0.01) per share.
Financial Results and Recent Highlights
-
Net loss attributable to common stockholders per share, on a dilutive basis, was
for the quarter ended$(0.01) December 31, 2021 , compared to net loss per share of for the same period in 2020, due primarily to the 2020 impairments related to certain corporate assets received in conjunction with the separation from Apartment Income REIT Corporation (“AIR Communities”).$(0.10) -
Aimco Total Shareholder Return was
46.2% for the year of 2021. -
Strong demand for Aimco’s Development and Redevelopment projects resulted in the execution of approximately 140 net new leases during the fourth quarter, with the majority secured for units that were still under construction. The new leases were signed at rental rates ahead of target, and contributed to the
in revenue from these properties during the period, up more than$4.5 million 40% from the third quarter. -
In the fourth quarter 2021, Aimco closed a
preferred equity financing to fund the completion of construction activities at$52 million Upton Place and allow Aimco to allocate capital to additional value-add investments. -
Aimco ended the fourth quarter with
of liquidity, including cash and capacity on its revolving credit facility.$395 million -
Fourth Quarter 2021 Revenue and NOI from Aimco’s
Stabilized Operating Properties was up9.7% and16.8% , respectively, year-over-year, with occupancy of98.7% , up 180 basis points year-over-year. -
Full Year 2021 Revenue and NOI from Aimco’s
Stabilized Operating Properties was up4.1% and4.1% , respectively, year-over-year, with occupancy of97.9% , up 160 basis points year-over-year. -
In early 2022, Aimco repurchased 202,400 shares of Aimco Class A Common Stock at a weighted average price of
.$6.49
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 where 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.
In the fourth quarter, Aimco had eight active development and redevelopment projects located in five different markets across
-
At the
North Tower ofFlamingo Point inMiami Beach, Florida , at year end, Aimco had completed construction on more than half of the units with the remaining units on track to be delivered in early March, on schedule. Demand for these highly tailored apartment homes has been strong. The property was95% pre-leased as ofFebruary 25, 2022 , and we now forecast to reach stabilized occupancy six months ahead of plan and at rental rates approximately25% ahead of underwriting. -
Prism in
Cambridge, Massachusetts , and 707 Leahy inRedwood City, California , reached stabilized occupancy by year end 2021, and TheFremont on the Anschutz Medical Campus inAurora, Colorado is expected to reach stabilized occupancy in the third quarter of 2022. Aimco plans to monetize its investment in accordance with the terms of the lease agreements with AIR Communities. -
Construction continues on schedule and on budget at
The Benson Hotel andFaculty Club inAurora, Colorado , TheHamilton inMiami, Florida and Oak Shore inCorte Madera, California .
Alternative Investments
Aimco uses alternative investment strategies when it has special knowledge or expertise relevant to the venture and when opportunity exists for positive asymmetric outcomes. Aimco’s current investments include a mezzanine loan with an option to participate in future development and three passive equity investments.
-
In 2021, operations at Parkmerced were stressed due to reduced in-person learning at the neighboring
San Francisco State University and lower demand as the region navigated the pandemic and related restrictions. Through this, the borrower on Aimco’s mezzanine loan has performed, including by advancing capital to service its first mortgage debt, and has reported that it expects to do the same in 2022.$338 million -
In the fourth quarter, Aimco funded a capital call of
associated with the previously announced$11.2 million total passive equity commitment to the life sciences developer, IQHQ, bringing our total investment to$50 million . In early 2022, Aimco funded the remaining balance on the commitment to IQHQ.$35.8 million
Investment Activity
Aimco expects to have a broad set of investment opportunities, including, but not limited to, development, redevelopment, portfolio acquisitions, programmatic joint ventures, debt placements, operational turnarounds, and re-entitlements.
-
Subsequent to quarter end, in January, Aimco’s joint venture with
The Kushner Companies closed on the previously announced acquisition of three undeveloped land parcels located in downtownFort Lauderdale, Florida . The total purchase price for the land is ($49 million at Aimco’s$25 million 51% share) and current zoning allows for the development of approximately three million square feet of multifamily homes and commercial space. -
Also in
January 2022 , Aimco purchased a strategic land parcel for adding to its land assemblage in Miami’s$1.7 million Edgewater neighborhood where it is redeveloping itsHamilton apartment community and has the ability to construct more than 1.1 million square feet of new development in this rapidly growing submarket. -
In
February 2022 , Aimco entered into a contract to acquire, for , a 9-acre development site in$100 million Fort Lauderdale . The site is located in the rapidly growingFlagler Village neighborhood and allows for approximately three million square feet of phased, mixed-use, development.
Operating Property Results
Aimco’s operating properties produced solid results for the quarter ended
|
Fourth Quarter |
|
|
FULL YEAR |
|
||||||||||||||||||||||||||
|
Year-over-Year |
|
|
Sequential |
|
|
Year-over-Year |
|
|||||||||||||||||||||||
($ in millions) |
2021 |
|
|
2020 |
|
|
Variance |
|
|
3Q 2021 |
|
|
Variance |
|
|
2021 |
|
|
2020 |
|
|
Variance |
|
||||||||
Average Daily Occupancy |
|
98.7 |
% |
|
|
96.9 |
% |
|
|
1.8 |
% |
|
|
97.8 |
% |
|
|
0.9 |
% |
|
|
97.9 |
% |
|
|
96.3 |
% |
|
|
1.6 |
% |
Revenue, before utility reimbursements |
$ |
35.6 |
|
|
$ |
32.5 |
|
|
|
9.7 |
% |
|
$ |
34.6 |
|
|
|
3.0 |
% |
|
$ |
136.2 |
|
|
$ |
130.8 |
|
|
|
4.1 |
% |
Expenses, net of utility reimbursements |
|
10.1 |
|
|
|
10.6 |
|
|
|
(5.0 |
%) |
|
|
11.2 |
|
|
|
(10.4 |
%) |
|
|
43.4 |
|
|
|
41.7 |
|
|
|
4.2 |
% |
Net operating income (NOI) |
|
25.5 |
|
|
|
21.9 |
|
|
|
16.8 |
% |
|
|
23.3 |
|
|
|
9.5 |
% |
|
|
92.8 |
|
|
|
89.1 |
|
|
|
4.1 |
% |
*Excluded from the table above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share. |
-
Revenue in the fourth quarter was
, up$35.6 million 9.7% year-over-year, due primarily to a increase in average rent per unit and a 180-basis point increase in Average Daily Occupancy, ending the year at$115 98.7% . -
Expense in the fourth quarter was
, down$10.1 million 5.0% year-over-year, due primarily to non-recurring adjustments in real estate taxes and insurance. -
1001 Brickell Bay Drive , a waterfront office building inMiami, Florida , is owned as part of a larger assemblage containing substantial excess development rights. At the end of the fourth quarter, the building was80% occupied, up 700 basis points from the end of the third quarter.
Balance Sheet and Financing Activity
Aimco is highly focused on maintaining a strong balance sheet, including having at all times ample liquidity. As of
Aimco’s net leverage as of
|
|
as of |
|
|||||
Proportionate, $ in thousands |
|
Amount |
|
|
Weighted Avg. Maturity (Yrs.) |
|
||
Total non-recourse property debt |
|
$ |
491,699 |
|
|
|
5.4 |
|
Total non-recourse construction loan debt |
|
|
167,678 |
|
|
|
2.4 |
|
Notes payable to AIR |
|
|
534,127 |
|
|
|
2.1 |
|
Cash and restricted cash |
|
|
(244,582 |
) |
|
|
|
|
Net Leverage |
|
$ |
948,922 |
|
|
|
|
|
-
In December, Aimco closed a preferred equity financing arrangement for
, accruing at a$52 million 9.7% interest rate, related to the completion of construction activities atUpton Place . -
Subsequent to quarter end, Aimco’s joint venture in
Fort Lauderdale, Florida secured a loan ($40 million Aimco share) to facilitate the previously announced purchase of three land parcels for$20.4 million ($49 million Aimco share).$25 million
Equity Capital Activities
Subsequent to quarter end, in January, Aimco repurchased 202,400 shares of Aimco Class A Common Stock at a weighted average price of
Dividend
Aimco plans to reinvest earnings to facilitate growth and, therefore, does not presently intend to pay a regular quarterly cash 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.
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
About Aimco
Aimco is a diversified real estate company primarily focused on value add, opportunistic, and alternative investments, targeting the
Team and Culture
Aimco has a national presence with corporate headquarters in
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 its intent, belief, or expectations, including, but not limited to, the statements in this document regarding our expected investment opportunities and our 2022 pipeline investments and projects. 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),” “forecast(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 preliminary plans and goals may not be completed 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 as a result of the COVID-19 pandemic. Although we believe that the assumptions underlying the forward-looking statements, which are based on management’s expectations and estimates, 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
These forward-looking statements reflect management’s judgment as of this date, and Aimco assumes no (and disclaims any) obligation to revise or update them to reflect future events or circumstances.
2022 Plans and Goals:
Aimco’s 2022 plan is an extension of its work in 2021 and supportive of its long-term growth strategy. Aimco intends to continue to focus on actively managing its development, redevelopment, and lease-up projects; growing its pipeline of accretive real estate investments; and maintaining a sizeable allocation to stabilized operating properties as needed to balance Aimco’s risk profile and provide stable cash flow.
Opportunistic and Value Add Investments
In 2022, Aimco plans to:
-
Complete the construction of Flamingo Point’s
North Tower inMiami Beach, Florida and reach stabilized occupancy six months ahead of plan. The building is95% leased as ofFebruary 25, 2022 , with average monthly rental rates more than ahead of target;$900 -
Reach stabilized occupancy at The
Fremont on the Anschutz Medical Campus inAurora, Colorado (85% leased as ofFebruary 25, 2022 ) and monetize its investments in 707 Leahy inRedwood City, California and Prism inCambridge, Massachusetts under the terms of the Master Leasing Agreement with AIR Communities; -
Begin the phased delivery of fully renovated waterfront apartment homes and commence the lease-up of
Hamilton on theBay inMiami, Florida . Average rental rates in the submarket have increased more than20% since Aimco acquired the property in Q3 of 2020; and -
Progress the development of
Upton Place inWashington, DC ,The Benson Hotel andFaculty Club on the Anschutz Medical Campus inColorado , and Oak Shore inCorte Madera, California , which are currently on time and on budget.
Aimco will also focus on expanding the opportunities in its pipeline by advancing entitlement and planning for previously identified projects located in
Additionally, Aimco plans to grow its investment pipeline by sourcing value-add opportunities from within its existing portfolio, through strategic partnerships, and local contacts. Aimco teams are in active discussions and negotiations on prospective opportunities across the country, including:
-
A 9-acre development site (now under contract) located in a high-growth
South Florida submarket that could accommodate nearly 1,500 units (or 3 million GSF) at full build out, for a price of approximately ;$100 million -
Joint venture development opportunities in
South Florida ,San Diego , andWashington, DC submarkets that together could accommodate as many as 2,700 units (or 3 million GSF) at full build out; -
The lease of a property located in Manhattan’s Upper
East Side neighborhood from AIR Communities to develop 41 luxury apartment homes; and - The acquisition of just over two acres of land contiguous to an existing Aimco property located in Chicago’s western suburbs.
Stabilized Operating Portfolio
Aimco forecasts to build upon solid 2021 operating results and maintain sufficient cash flow to cover all core overhead.
Financing Activity
In 2022, Aimco plans to remain pre-funded for all investment commitments by utilizing its broad range of available financing options and eliminating the need to issue additional public market equity. Aimco has no debt maturing in 2022 and will start preparations for 2023 and 2024 debt maturities.
Team and Community
Aimco will continue to foster a healthy environment of respect and innovation, empowering Aimco human capital to create value and maintain its commitment to the communities in which we work, live, and invest by building apartment communities with conservation and sustainability in mind and giving back by way of Aimco Cares, both in monetary support and through volunteerism.
Shareholder Value
At year end 2022, Aimco estimates its NAV will be approximately
*2022 Plans and Goals as previously disclosed and updated with leasing data through
Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other property revenues |
|
$ |
46,722 |
|
|
$ |
38,649 |
|
|
$ |
169,836 |
|
|
$ |
151,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses |
|
|
16,113 |
|
|
|
15,692 |
|
|
|
67,613 |
|
|
|
61,514 |
|
Depreciation and amortization |
|
|
21,648 |
|
|
|
20,292 |
|
|
|
84,712 |
|
|
|
77,965 |
|
Impairment |
|
|
- |
|
|
|
15,860 |
|
|
|
- |
|
|
|
15,860 |
|
General and administrative expenses [1] [2] |
|
|
10,588 |
|
|
|
5,530 |
|
|
|
33,151 |
|
|
|
10,469 |
|
Total operating expenses |
|
|
48,349 |
|
|
|
57,374 |
|
|
|
185,476 |
|
|
|
165,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(14,908 |
) |
|
|
(8,949 |
) |
|
|
(52,902 |
) |
|
|
(27,512 |
) |
Mezzanine investment income, net |
|
|
7,781 |
|
|
|
7,023 |
|
|
|
30,436 |
|
|
|
27,576 |
|
Unrealized gains (losses) on interest rate options [3] |
|
|
(4,099 |
) |
|
|
3,136 |
|
|
|
6,509 |
|
|
|
1,058 |
|
Other expenses, net [4] |
|
|
7,982 |
|
|
|
(1,341 |
) |
|
|
13,047 |
|
|
|
(2,685 |
) |
(Loss) income before income taxes |
|
|
(4,871 |
) |
|
|
(18,856 |
) |
|
|
(18,550 |
) |
|
|
(15,920 |
) |
Income tax benefit (expense) |
|
|
3,689 |
|
|
|
3,421 |
|
|
|
13,570 |
|
|
|
10,149 |
|
Net (loss) income |
|
|
(1,182 |
) |
|
|
(15,435 |
) |
|
|
(4,980 |
) |
|
|
(5,771 |
) |
Net income attributable to redeemable noncontrolling interests in consolidated real estate partnership |
|
|
(50 |
) |
|
|
108 |
|
|
|
(91 |
) |
|
|
457 |
|
Net loss (income) attributable to noncontrolling interests in consolidated real estate partnership |
|
|
(274 |
) |
|
|
8 |
|
|
|
(1,136 |
) |
|
|
4 |
|
Net loss (income) attributable to common noncontrolling interests in |
|
|
88 |
|
|
|
776 |
|
|
|
297 |
|
|
|
269 |
|
Net (loss) income attributable to Aimco common stockholders |
|
$ |
(1,418 |
) |
|
$ |
(14,543 |
) |
|
$ |
(5,910 |
) |
|
$ |
(5,041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common stockholders per share – basic |
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
Net (loss) income attributable to common stockholders per share – diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – basic |
|
|
149,480 |
|
|
|
148,549 |
|
|
|
149,480 |
|
|
|
148,549 |
|
Weighted-average common shares outstanding – diluted |
|
|
149,480 |
|
|
|
148,569 |
|
|
|
149,480 |
|
|
|
148,569 |
|
[1] General and administrative expense includes |
||||||||||||||||
[2] General and administrative expense in the three and twelve months ended |
||||||||||||||||
[3] Unrealized gains (losses) on interest rate options are primarily the quarterly market-to-market adjustment required to mark to fair value Aimco’s interest rate options. |
||||||||||||||||
[4] In the three months and twelve months ended |
Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2021 |
|
|
2020 |
|
||
Assets |
|
|
|
|
|
|
|
|
Buildings and improvements |
|
$ |
1,257,214 |
|
|
$ |
995,116 |
|
Land |
|
|
534,285 |
|
|
|
505,153 |
|
Total real estate |
|
|
1,791,499 |
|
|
|
1,500,269 |
|
Accumulated depreciation |
|
|
(561,115 |
) |
|
|
(495,010 |
) |
Net real estate |
|
|
1,230,384 |
|
|
|
1,005,259 |
|
Cash and cash equivalents |
|
|
233,374 |
|
|
|
289,582 |
|
Restricted cash |
|
|
11,208 |
|
|
|
9,153 |
|
Mezzanine investments |
|
|
337,797 |
|
|
|
307,362 |
|
Right-of-use lease assets |
|
|
429,768 |
|
|
|
92,709 |
|
Other assets, net |
|
|
191,570 |
|
|
|
136,427 |
|
Total assets |
|
$ |
2,434,101 |
|
|
$ |
1,840,492 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
Non-recourse property debt, net |
|
$ |
483,137 |
|
|
$ |
447,967 |
|
Construction loans, net |
|
|
163,570 |
|
|
|
— |
|
Notes payable to AIR |
|
|
534,127 |
|
|
|
534,127 |
|
Total indebtedness |
|
|
1,180,834 |
|
|
|
982,094 |
|
Deferred tax liabilities |
|
|
124,747 |
|
|
|
131,560 |
|
Lease liabilities |
|
|
435,093 |
|
|
|
86,781 |
|
Accrued liabilities and other |
|
|
97,400 |
|
|
|
76,703 |
|
Total liabilities |
|
|
1,838,074 |
|
|
|
1,277,138 |
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests in consolidated real estate partnership |
|
|
33,794 |
|
|
|
4,263 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Common Stock |
|
|
1,498 |
|
|
|
1,490 |
|
Additional paid-in capital |
|
|
521,842 |
|
|
|
515,127 |
|
Retained earnings (accumulated deficit) |
|
|
(22,775 |
) |
|
|
(16,839 |
) |
Total Aimco equity |
|
|
500,565 |
|
|
|
499,778 |
|
Noncontrolling interests in consolidated real estate partnerships |
|
|
35,213 |
|
|
|
31,877 |
|
Common noncontrolling interests in |
|
|
26,455 |
|
|
|
27,436 |
|
Total equity |
|
|
562,233 |
|
|
|
559,091 |
|
Total liabilities and equity |
|
$ |
2,434,101 |
|
|
$ |
1,840,492 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220301006097/en/
Investor Relations 303-793-4661, investor@aimco.com
Source:
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