Aimco Provides Recent Highlights and Second Quarter Financial Results
Aimco (NYSE: AIV) reported its Q2 2022 results, achieving a net income of $1.57 per share compared to a loss of $0.13 in Q2 2021, driven by strategic asset sales and lease terminations. The company experienced a 14.9% increase in net operating income (NOI) year-over-year, with revenue rising 11.2% to $33.1 million. Aimco's occupancy rate was 97.7%, up 20 basis points from the previous year. The company has also repurchased nearly 750,000 shares and has announced a plan for an additional 15 million share repurchase authorization. A special dividend of $0.02 per share was declared to be paid on September 30, 2022.
- Net income increased to $1.57 per share vs. $(0.13) in Q2 2021.
- Net operating income rose 14.9% in the first half of 2022.
- Revenue of $33.1 million, up 11.2% year-over-year.
- Occupancy rate at 97.7%, up 20 basis points year-over-year.
- Repurchased nearly 750,000 shares in the first half of the year.
- Declared a special cash dividend of $0.02 per share.
- Aimco shares traded at a sizable discount to NAV.
"Our diversified portfolio of income producing properties continues to yield strong results, with net operating income up
"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
"We have agreements in place that will retire or refinance more than
"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
-
Net income attributable to common stockholders per share, on a fully dilutive basis, was
for the quarter ended$1.57 June 30, 2022 , compared to net income per share of for the same period in 2021, due primarily to the recognition of income resulting from the agreement to terminate the AIR leases and gains related to the sale of$(0.13) Pathfinder Village . -
As of
July 31, 2022 , total shareholder return ("TSR") since theDecember 15, 2020 separation from AIR was65.1% and year-to-date was7.8% . -
Second Quarter 2022 Revenue and NOI from Aimco’s
Stabilized Operating Properties were up11.2% and14.4% , respectively, year over year, with occupancy of97.7% , up 20 basis points year over year. -
Aimco reached an agreement with AIR that will result in more than
of realized Value Creation, net of costs for Aimco shareholders and eliminate the$100 million obligation related to the four leased properties from AIR.$469 million -
Aimco completed the early repayment of the
of notes due to AIR, originally scheduled to mature in$534 million January 2024 and carrying an annual rate of5.2% , with proceeds from property level financings, the sales ofPathfinder Village andCedar Rim , and the placement of preferred equity secured by a portfolio of stabilized properties.
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
-
As previously announced, following the successful development and lease-up of 707 Leahy in
Redwood City, California , Prism inCambridge, Massachusetts ,Flamingo Point North Tower inMiami Beach, Florida , and TheFremont on the Anschutz Medical Campus inAurora, Colorado , Aimco and AIR have agreed to cancel Aimco’s leasehold interest in each property onSeptember 1, 2022 . In return for the termination of the leases, Aimco will receive , resulting in Value Creation, net of costs, of approximately$200 million , which will be realized about 18 months sooner than originally anticipated.$100 million -
At The
Hamilton inMiami, Florida , Aimco now expects to welcome the first residents into redesigned and fully renovated units inAugust 2022 . As ofJuly 31, 2022 , 61 units were leased or pre-leased at rental rates more than20% ahead of underwriting. -
Construction continues on schedule and on budget at
Upton Place inNorthwest Washington, D.C. , theBenson Hotel andFaculty Club on the Anschutz Medical Campus inAurora, Colorado , and at our single-family home development 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 multifamily property with an option to participate in future multifamily development as well as three passive equity investments. Updates include:
-
The borrower on Aimco’s
mezzanine loan, which is secured by the Parkmerced stabilized multifamily property plus phases two through nine of the site's future development opportunity, remains current on its first mortgage obligations. The neighboring$354.4 million San Francisco State University is expected to return to full in-person learning this fall, with hybrid options, increasing the demand for the apartments that serve as collateral for the Aimco loan. Due to the relative size of Aimco’s investment and alternative accretive uses of capital, Aimco recently initiated a marketing effort to explore potential opportunities to monetize all or a portion of its investment. -
Aimco redeemed
22% of its passive equity investment inIQHQ Inc. , a life sciences developer. In July, Aimco received proceeds of from the sale resulting in a greater than$16.5 million 50% internal rate of return over the hold period for this portion of its investment. Aimco retains 2.4 million shares worth and the opportunity to collaborate with IQHQ on future development opportunities that include a multifamily component.$59.7 million
Investment Activity
Aimco is focused on development and redevelopment, funded through joint ventures. Aimco will also consider opportunistic investments in related activities. Updates include:
-
In May, Aimco executed a joint venture agreement to act as a co-GP on the development of a phased multifamily community in
Bethesda, Maryland . The project is fully entitled and includes approvals for over 2,200 units in six phases. Aimco will participate in the first two multifamily phases totaling 574 units with an expected Aimco investment of approximately . Aimco also has rights to increase our investment and to choose to participate in future phases of development.$18 million -
In June, July, and August, Aimco closed on the purchase of three development parcels it contracted to acquire, for
, in$100 million February 2022 . The nine-acre assemblage is located in the rapidly growingFlagler Village neighborhood ofFort Lauderdale, Florida , and allows for approximately three million square feet of phased, mixed-use development, which could contain up to 1,500 residential units, more than 300 hotel keys, and more than 100,000 square feet of retail space at full build-out. Aimco intends to execute the planned development activity through joint venture financing.
Operating Property Results
Aimco owns a diversified portfolio of operating apartment communities located in ten major
Aimco’s operating properties produced solid results for the quarter ended
|
Second Quarter |
|
Year-to-Date |
|||||||
|
Year-over-Year |
|
Sequential |
|
Year-over-Year |
|||||
($ in millions) |
2022 |
2021 |
Variance |
|
1Q 2022 |
Variance |
|
2022 |
2021 |
Variance |
Average Daily Occupancy |
|
|
|
|
|
( |
|
|
|
|
Revenue, before utility reimbursements |
|
|
|
|
|
|
|
|
|
|
Expenses, net of utility reimbursements |
10.4 |
9.9 |
|
|
10.2 |
|
|
20.7 |
20.1 |
|
Net operating income (NOI) |
22.7 |
19.8 |
|
|
22.0 |
|
|
44.7 |
38.9 |
|
*Excluded from the table above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share.
-
Revenue in the second quarter 2022 was
, up$33.1 million 11.2% year-over-year, resulting from a increase in average monthly revenue per apartment home to$203 , and a 20-basis point increase in Average Daily Occupancy to$2,039 97.7% . -
New lease rents increased
17.4% and renewal lease rents increased16.8% in the second quarter and62.4% of residents were retained over the past twelve months. -
The median annual household income of new residents was more than
in the second quarter 2022, representing a rent to income ratio of$115,000 20.2% . -
Net operating income in the second quarter 2022 was
, up$22.7 million 14.4% year-over-year.
Property Dispositions
-
In May, Aimco sold
Pathfinder Village , a 246-unit apartment community located inFremont, California , for . Proceeds, net of the repayment of the existing property debt and transaction related costs, were$127.0 million .$71.8 million -
In July, subsequent to quarter end, Aimco sold
Cedar Rim , a 104-unit apartment community located inRenton, Washington , for . The property was owned free and clear of debt prior to the sale.$53.0 million -
Aimco is under contract to sell 2900 on First, a 135-unit apartment community with 14,000 square feet of retail located in
Seattle, Washington for . This sale of this property is expected to close in August.$69.0 million - These properties sold, or are under contract to sell, for more than the values used in Aimco's internal NAV estimate.
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 |
|
|
as of |
|
||||||||||
Proportionate, $ in thousands |
|
Amount |
|
|
Weighted Avg.
|
|
|
Amount |
|
|
Weighted Avg.
|
|
||||
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
-
Aimco reached agreement with AIR for the accelerated repayment of
in notes, which carried a rate of$534 million 5.2% , prior to their maturity inJanuary 2024 . The early payoff, including of spread maintenance costs, was completed in July with proceeds generated from:$17 million -
The financing of
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$575 million 4.37% . Aimco received of proceeds, net of the repayment of existing property debt balances and prepayment penalties;$337 million -
The sale of
Pathfinder Village inFremont, California for in May, and$127 million Cedar Rim inRenton, Washington for in July. Proceeds, net of the repayment of the existing property debt and transaction related costs, were$53 million ; and$122 million -
A
,$102 million 8% preferred equity financing placement on a portfolio of stabilized assets with an institutional equity partner.
-
The financing of
Construction Lending
-
In the second quarter 2022, Aimco secured a
non-recourse construction loan to fund the development of Oak Shore in$23 million Corte Madera, California .
Private Equity Financing
-
In July, Aimco closed a
,$102 million 8% preferred equity financing on a portfolio of 14 stabilized assets with an institutional equity partner. The financing has a seven-year term but is fully pre-payable after 48 months.
Public Market Equity
Common Stock Repurchases
-
In the second quarter, Aimco repurchased 539,764 shares of its common stock at a weighted average price of
per share, an approximate$5.73 45% discount to its most recently published estimated NAV. Year to date, Aimco has repurchased 742,164 shares of its common stock at a weighted average price of per share.$5.93 - In July, Aimco's Board of Directors updated the authorization to repurchase up to 15 million additional shares.
Special Dividend
-
On
July 27, 2022 , Aimco's Board of Directors declared a special cash dividend of per share payable on$0.02 September 30, 2022 , to Aimco shareholders of record onSeptember 14, 2022 .
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
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, 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
These forward-looking statements reflect management’s judgment and expectations as of this date, and Aimco assumes no (and disclaims any) obligation to revise or update them to reflect future events or circumstances.
Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
|
|
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
|
|
|
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
|
|
|
(1,069 |
) |
|
|
(66 |
) |
|
|
(2,539 |
) |
|
|
86 |
|
Net (income) loss attributable to noncontrolling interests
|
|
|
(346 |
) |
|
|
(275 |
) |
|
|
(344 |
) |
|
|
(566 |
) |
Net (income) loss attributable to common noncontrolling
|
|
|
(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
|
|
$ |
1.58 |
|
|
$ |
(0.13 |
) |
|
$ |
1.63 |
|
|
$ |
0.00 |
|
Net income (loss) attributable to common stockholders per
|
|
$ |
1.57 |
|
|
$ |
(0.13 |
) |
|
$ |
1.62 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding –
|
|
|
149,600 |
|
|
|
149,166 |
|
|
|
149,694 |
|
|
|
149,082 |
|
Weighted-average common shares outstanding –
|
|
|
150,423 |
|
|
|
149,166 |
|
|
|
150,660 |
|
|
|
149,442 |
|
[1] In the three months ended
[2] General and administrative expense includes
[3] General and administrative expense for the three months and six months ended
[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
[5] See Note 6 of Aimco's Second Quarter 2022 SEC Form 10-Q, filed
Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
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 |
|
|
39,233 |
|
|
|
26,455 |
|
Total equity |
|
|
825,022 |
|
|
|
562,233 |
|
Total liabilities and equity |
|
$ |
2,419,412 |
|
|
$ |
2,434,101 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005935/en/
Investor Relations 303-793-4661, investor@aimco.com
Source:
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