Aimco Provides Recent Highlights and First Quarter Financial Results
Aimco (NYSE: AIV) released its first quarter results for 2022, reporting a net income of $0.05 per share. Year-over-year revenue rose by 9.4% to $35.8 million, with a net operating income increase of 14.3%, reaching $24.6 million. Occupancy rates improved to 98.5%, a 90 basis point increase. Aimco continued to enhance its development pipeline, adding 4 million square feet of mixed-use projects in South Florida. The firm is actively restructuring nearly $1 billion in debt to mitigate refinancing risks. Overall, Aimco remains well-positioned for long-term success despite economic uncertainties.
- Revenue increased by 9.4% year-over-year to $35.8 million.
- Net operating income rose 14.3% to $24.6 million.
- Occupancy increased to 98.5%, up 90 basis points year-over-year.
- Successful recapitalization of developments boosting confidence in future cash flows.
- Aimco maintains $298 million in liquidity and a healthy balance sheet.
- Net income per share decreased from $0.14 in Q1 2021 to $0.05 in Q1 2022 due to changes in fair market valuation.
Financial Results and Recent Highlights
-
Net income attributable to common stockholders per share, on a fully dilutive basis, was
for the quarter ended$0.05 March 31, 2022 , compared to net income per share of for the same period in 2021, due primarily to the change in fair market valuation of Aimco's interest rate options and entity investments.$0.14 -
The North Tower atFlamingo Point inMiami Beach, Florida reached stabilized occupancy in April, more than six months ahead of schedule and at rental rates more than25% ahead of underwriting. -
Initial demand for fully renovated apartment homes at The
Hamilton inMiami, Florida has been strong. Aimco has pre-leased 17 homes in anticipation of initial apartment home deliveries scheduled to occur in the coming months, at rental rates ahead of underwriting. -
Aimco secured two new development pipeline assets in
South Florida with the potential to construct approximately four million square feet of phased, mixed-use developments. -
First Quarter 2022 Revenue and NOI from Aimco’s
Stabilized Operating Properties were up9.4% and14.3% , respectively, year over year, with occupancy of98.5% , up 90 basis points year over year. -
Aimco ended the first quarter with
of liquidity, including cash and capacity on its revolving credit facility, net of letters of credit outstanding.$298 million -
Aimco plans to restructure nearly
of debt, including$1 billion of notes payable to AIR, funded with proceeds from (i) long-dated, fixed-rate, non-recourse financing, (ii) the disposition of one stabilized asset, and (iii) the unwind of the initial AIR leases by early 2023.$534 million
Value Add, Opportunistic & Alternative Investments:
Development and Redevelopment
Aimco generally seeks development and redevelopment opportunities where barriers to entry are high, target customers can be clearly defined, and Aimco has a comparative advantage over others in the market. Aimco’s Value Add and Opportunistic investments may also target portfolio acquisitions, operational turnarounds, and re-entitlements.
Aimco currently has eight active development and redevelopment projects, located across five
-
At the
North Tower ofFlamingo Point inMiami Beach, Florida , construction is largely complete and the property is98% occupied. The property reached stabilized occupancy in April, more than six months ahead of plan and at rental rates more than25% ahead of underwriting. -
The
Fremont on the Anschutz Medical Campus inAurora, Colorado was92% leased as ofApril 30, 2022 , and is expected to reach stabilized occupancy in the third quarter of 2022. -
Prism in
Cambridge, Massachusetts , and 707 Leahy inRedwood City, California , reached stabilized occupancy in the second half of 2021. -
Pre-leasing began at The
Hamilton inMiami, Florida in anticipation of initial apartment home deliveries scheduled to occur in the coming months. As ofApril 30, 2022 , 17 units had been pre-leased at rental rates ahead of underwriting. -
At
Upton Place inNorthwest Washington, D.C. , construction remains on schedule and on budget. As ofApril 30, 2022 , more than80% of the 106,000 square feet of planned retail space has been leased to two anchor tenants, more than 18 months ahead of delivery and at terms ahead of underwriting. -
Construction continues on schedule and on budget at
The Benson Hotel andFaculty Club inAurora, Colorado and at our single-family rental project, Oak Shore, inCorte Madera, California .
Alternative Investments
Aimco makes alternative investments where it has special knowledge or expertise relevant to the venture and opportunity exists for positive asymmetric outcomes. Aimco’s current alternative investments include a mezzanine loan secured by a stabilized multi-family property with an option to participate in future multi-family development as well as three passive equity investments. Updates include:
-
Aimco’s
mezzanine loan is secured by the Parkmerced stabilized multi-family property plus phases two through nine of the site's future development opportunity. Members of Aimco's borrower also own phase one, which was recently recapitalized by an alternative investment firm with$346 million under management. The recapitalization provides the borrower with additional liquidity and added capacity to advance capital and service the first priority debt that is senior to the Aimco loan. It is now expected that the neighboring$57 billion San Francisco State University will return to full in-person learning this fall, increasing the demand for the apartments that serve as collateral for our loan. -
Aimco funded the remaining
of a total commitment of a$14.2 million passive equity investment in$50.0 million IQHQ Inc. , a life sciences developer.
Investment Activity
Aimco is focused on development and redevelopment, funded through joint ventures. Aimco will also consider opportunistic investments in related activities. In the first quarter 2022:
-
Aimco’s joint venture with
The Kushner Companies closed on the previously announced acquisition of three undeveloped land parcels located in downtownFort Lauderdale, Florida . The total purchase price for the land was ($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. The venture is under contract to sell one of the parcels for , nearly double its allocation of the purchase price. The venture expects to close this sale in the third quarter of 2022.$18.3 million -
Aimco formed a joint venture for the construction of approximately one million square feet of mixed-use development in the
Edgewater neighborhood ofMiami, Florida . Aimco has a20% share of the joint venture, which includes the initial contribution of an eighth of an acre of land that Aimco purchased for in$1.7 million January 2022 . The development site is situated as the gateway to Aimco’sEdgewater land assemblage and its redevelopment of TheHamilton . Aimco will serve as the development manager for the venture and expects to begin construction in 2023. -
Aimco entered into a contract to acquire, for
, a nine-acre development site in$100 million Fort Lauderdale, Florida . The site is located in the rapidly growingFlagler Village neighborhood and allows for approximately three million square feet of phased, mixed-use development, which could contain up to 1,500 residential units at full build-out. Pursuant to the agreement, Aimco reserved funds for the transaction by placing of cash and$70 million in letters of credit into escrow. In conjunction with the purchase, Aimco entered into a short-term cancelable operating lease with the seller to obtain the development rights. Aimco plans to form a joint venture or joint ventures to execute the planned development activity.$30 million
Operating Property Results
Aimco owns a diversified portfolio of stabilized apartment communities located in ten major
Aimco’s operating properties produced solid results for the quarter ended
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First Quarter |
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Year-over-Year |
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Sequential |
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($ in millions) |
2022 |
2021 |
Variance |
|
4Q 2021 |
Variance |
|||
Average Daily Occupancy |
|
|
|
|
|
( |
|||
Revenue, before utility reimbursements |
|
|
|
|
|
|
|||
Expenses, net of utility reimbursements |
11.2 |
11.2 |
|
|
10.1 |
|
|||
Net operating income (NOI) |
|
|
|
|
|
( |
|||
*Excluded from the table above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share. |
-
Revenue in the first quarter 2022 was
, up$35.8 million 9.4% year-over-year, resulting from a increase in average monthly revenue per apartment home to more than$155 , and a 90-basis point increase in Average Daily Occupancy to$2,000 98.5% . -
New lease rents increased
15.4% and the median annual income of new residents was more than in the first quarter 2022.$110,000 -
Renewal lease rents increased
14.7% in the first quarter and62.0% of residents were retained over the past twelve months. -
Net operating income in the first quarter 2022 was
, up$24.6 million 14.3% year-over-year.
Balance Sheet and Financing Activity
Aimco is highly focused on maintaining a strong balance sheet, including having at all times ample liquidity. As of
Aimco’s net leverage as of
|
|
as of |
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Proportionate, $ in thousands |
|
Amount |
|
Weighted Avg. Maturity (Yrs.) |
||||
Total non-recourse property debt |
|
$ |
505,684 |
|
|
|
5.1 |
|
Total non-recourse construction loan debt |
|
|
184,788 |
|
|
|
2.1 |
|
Notes payable to AIR |
|
|
534,127 |
|
|
|
1.8 |
|
Cash and restricted cash |
|
|
(177,623 |
) |
|
|
|
|
Net Leverage |
|
$ |
1,046,976 |
|
|
|
|
-
Aimco made significant progress on a plan to restructure nearly
of debt, the majority of which comes due in the next two years, mitigating future refinancing risk. Once complete, Aimco expects its leverage to be primarily non-recourse property level debt either in fixed rate loans or floating with interest rate caps. Components of the plan include:$1 billion -
Aimco has rate-locked
of property level loans with a weighted average term of 9.4 years and a weighted average fixed interest rate, net of monetized swaption proceeds, of$555 million 4.37% . Aimco estimates of proceeds, net of the repayment of existing property debt balances and prepayment penalties.$320 million -
In early May, Aimco sold
Pathfinder Village inFremont, California for , ~$127 million 8% more than in Aimco's estimated Net Asset Value calculation published inOctober 2021 . Proceeds, net of the repayment of the existing property debt and transaction related costs, were .$70 million -
Aimco reached agreement with AIR for the accelerated repayment of
in notes, which carry a rate of$534 million 5.2% , prior to their maturity inJanuary 2024 . The early payoff is expected to be completed during the third quarter 2022. Aimco expects to incur approximately in associated spread maintenance costs.$24 million -
Finally,
Flamingo Point North Tower reached stabilized occupancy in April, allowing for lease termination and satisfaction of the construction loan by early 2023.$150 million
-
Aimco has rate-locked
-
In the first quarter 2022, 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
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 our intent, belief, or expectations, including, but not limited to, the statements in this document regarding our 2022 plans and goals, including our 2022 pipeline investments and projects, and our plans to eliminate certain near term debt maturities. We caution investors not to place undue reliance on any such forward-looking statements.
Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Aimco that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statement. Important factors, among others, that may affect actual results or outcomes include, but are not limited to: (i) the risk that the 2022 plans and goals may not be completed, as expected, in a timely manner or at all, (ii) the inability to recognize the anticipated benefits of the pipeline investments and projects, and (iii) changes in general economic conditions, including, increases in interest rates and as a result of the COVID-19 pandemic. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained.
Readers should carefully review Aimco’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Aimco’s Annual Report on Form 10-K for the year ended
These forward-looking statements reflect management’s judgment and expectations as of this date, and Aimco assumes no (and disclaims any) obligation to revise or update them to reflect future events or circumstances.
Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
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Three Months Ended
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2022 |
|
2021 |
||||
REVENUES: |
|
|
|
|
||||
Rental and other property revenues |
|
$ |
49,994 |
|
|
$ |
39,804 |
|
|
|
|
|
|
||||
OPERATING EXPENSES: |
|
|
|
|
||||
Property operating expenses |
|
|
19,221 |
|
|
|
16,942 |
|
Depreciation and amortization |
|
|
23,118 |
|
|
|
20,717 |
|
General and administrative expenses [1][2] |
|
|
9,472 |
|
|
|
6,311 |
|
Total operating expenses |
|
|
51,811 |
|
|
|
43,970 |
|
|
|
|
|
|
||||
Interest expense |
|
|
(14,601 |
) |
|
|
(12,677 |
) |
Mezzanine investment income, net |
|
|
8,237 |
|
|
|
7,467 |
|
Unrealized gains (losses) on interest rate options |
|
|
18,778 |
|
|
|
25,347 |
|
Other expenses, net [3] |
|
|
(4,541 |
) |
|
|
363 |
|
Income before income taxes |
|
|
6,056 |
|
|
|
16,334 |
|
Income tax benefit (expense) |
|
|
4,056 |
|
|
|
5,100 |
|
Net income |
|
|
10,112 |
|
|
|
21,434 |
|
Net loss (income) attributable to redeemable noncontrolling interests in consolidated real estate partnership |
|
|
(1,470 |
) |
|
|
152 |
|
Net loss (income) attributable to noncontrolling interests in consolidated real estate partnership |
|
|
2 |
|
|
|
(291 |
) |
Net loss (income) attributable to common noncontrolling interests in |
|
|
(435 |
) |
|
|
(1,081 |
) |
Net income attributable to Aimco common stockholders |
|
$ |
8,209 |
|
|
$ |
20,214 |
|
|
|
|
|
|
||||
Net income attributable to common stockholders per share – basic |
|
$ |
0.05 |
|
|
$ |
0.14 |
|
Net income attributable to common stockholders per share – diluted |
|
$ |
0.05 |
|
|
$ |
0.14 |
|
|
|
|
|
|
||||
Weighted-average common shares outstanding – basic |
|
|
149,790 |
|
|
|
148,914 |
|
Weighted-average common shares outstanding – diluted |
|
|
150,348 |
|
|
|
149,046 |
|
[1] General and administrative expense includes |
||||||||
[2] General and administrative expense for the three months ended |
||||||||
[3] The increase in Other expenses, net variance is primarily due to the valuation change at our closely held technology investments funds. |
Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
2022 |
|
2021 |
||||
Assets |
|
|
|
|
||||
Buildings and improvements |
|
$ |
1,323,647 |
|
|
$ |
1,257,214 |
|
Land |
|
|
574,434 |
|
|
|
534,285 |
|
Total real estate |
|
|
1,898,081 |
|
|
|
1,791,499 |
|
Accumulated depreciation |
|
|
(576,243 |
) |
|
|
(561,115 |
) |
Net real estate |
|
|
1,321,838 |
|
|
|
1,230,384 |
|
Cash and cash equivalents |
|
|
109,011 |
|
|
|
233,374 |
|
Restricted cash |
|
|
68,612 |
|
|
|
11,208 |
|
Mezzanine investments |
|
|
346,034 |
|
|
|
337,797 |
|
Interest rate options |
|
|
44,414 |
|
|
|
25,657 |
|
Right-of-use lease assets |
|
|
522,874 |
|
|
|
429,768 |
|
Other assets, net |
|
|
181,061 |
|
|
|
165,913 |
|
Total assets |
|
$ |
2,593,844 |
|
|
$ |
2,434,101 |
|
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
|
||||
Non-recourse property debt, net |
|
$ |
512,301 |
|
|
$ |
483,137 |
|
Construction loans, net |
|
|
180,562 |
|
|
|
163,570 |
|
Notes payable to AIR |
|
|
534,127 |
|
|
|
534,127 |
|
Total indebtedness |
|
|
1,226,990 |
|
|
|
1,180,834 |
|
Deferred tax liabilities |
|
|
123,641 |
|
|
|
124,747 |
|
Lease liabilities |
|
|
509,235 |
|
|
|
435,093 |
|
Accrued liabilities and other |
|
|
114,761 |
|
|
|
97,400 |
|
Total liabilities |
|
|
1,974,627 |
|
|
|
1,838,074 |
|
|
|
|
|
|
||||
Redeemable noncontrolling interests in consolidated real estate partnership |
|
|
37,232 |
|
|
|
33,794 |
|
|
|
|
|
|
||||
Equity: |
|
|
|
|
||||
Common Stock |
|
|
1,497 |
|
|
|
1,498 |
|
Additional paid-in capital |
|
|
523,455 |
|
|
|
521,842 |
|
Retained earnings (accumulated deficit) |
|
|
(14,571 |
) |
|
|
(22,775 |
) |
Total Aimco equity |
|
|
510,381 |
|
|
|
500,565 |
|
Noncontrolling interests in consolidated real estate partnerships |
|
|
44,629 |
|
|
|
35,213 |
|
Common noncontrolling interests in |
|
|
26,975 |
|
|
|
26,455 |
|
Total equity |
|
|
581,985 |
|
|
|
562,233 |
|
Total liabilities and equity |
|
$ |
2,593,844 |
|
|
$ |
2,434,101 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220509006078/en/
Investor Relations 303-793-4661, investor@aimco.com
Source:
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