Aimco Provides Recent Highlights and Third Quarter Financial Results
Aimco (NYSE: AIV) reported strong third quarter results for 2022, with net income per share of $0.19, a significant rise from $(0.03) in Q3 2021. Revenues increased by 11.0% year-to-date, with net operating income (NOI) up 15.8%. The company maintained a solid balance sheet, holding $375.4 million in liquidity. Aimco's development projects, particularly in Miami, showed promising demand, achieving 35% lease-up ahead of expectations. The company actively repurchased shares, totaling over 1.3 million year-to-date, while successfully closing a $669 million lease termination with AIR, enhancing shareholder value.
- Net income per share increased to $0.19 from $(0.03) YoY.
- Revenue up 11.0% YTD, with NOI rising 15.8%.
- Successfully monetized over $900 million in assets in 2022.
- 37% lease-up at The Hamilton in Miami, exceeding original rental expectations.
- Average daily occupancy decreased to 96.0%, down from 97.9% YoY.
- Average lease retention rate declined to 56.1%, despite higher rents.
"Our active developments and redevelopment projects remain on track. At The
"Our diversified portfolio of stabilized income producing properties continues to yield strong results, with revenues up
"Finally, I am thankful to the Aimco team for their execution and good work, and to the Aimco Board of Directors for their engagement and guidance, as we continue to build, and unlock, 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$0.19 September 30, 2022 , compared to net income per share of for the same period in 2021, due primarily to net gains from real estate transactions in the third quarter, increased tax benefit, and higher net income from property operations.$(0.03) -
As of
October 31, 2022 , total shareholder return ("TSR") since theDecember 15, 2020 separation from AIR was57.9% and year-to-date was3.1% . -
Year-to-date through
October 31, 2022 , Aimco has repurchased more than 1.3 million shares of its common stock at a weighted average price of approximately per share.$6.41 -
Third Quarter 2022 Revenue and NOI from Aimco’s
Stabilized Operating Properties were up11.5% and17.5% , respectively, year over year, with average revenue per apartment home of , up$2,173 year over year.$261 -
Aimco closed the previously announced
lease termination transaction with AIR that returned the four leased properties to AIR in exchange for a payment to Aimco of$669 million thereby eliminating the$200 million obligation related to these leased assets. Aimco's execution in the development and lease-up of these assets resulted in Value Creation, net of costs of approximately$469 million for shareholders.$100 million -
Aimco completed the early repayment of the
of notes due to AIR, originally scheduled to mature in$534 million January 2024 . -
Aimco exited the
Seattle market, closing on the sales of two apartment communities for a total of .$122 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.
As of
-
At The
Hamilton inMiami, Florida , Aimco welcomed the first residents into redesigned and fully renovated units in earlyOctober 2022 . As ofOctober 31, 2022 , 97 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 where 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. Due to the relative size of Aimco’s investment and alternative accretive uses of capital, Aimco initiated a marketing effort in July to explore opportunities to monetize all or a portion of its investment. Increased uncertainty within financial and capital markets led us to extend the timeline related to this process and its execution.$362.8 million
Investment Activity
Aimco is focused on development and redevelopment, funded primarily through joint ventures. Aimco will also consider opportunistic investments in related activities. Updates include:
-
As previously announced, in July and August, Aimco closed on the purchase of two development parcels, completing the assemblage it contracted to acquire, for
, in$100 million February 2022 . The nine-acre assemblage is located in the rapidly growingFlagler Village neighborhood ofFort Lauderdale, Florida , and allows for approximately three million square feet of phased, mixed-use development, which could contain up to 1,500 residential units, more than 300 hotel keys, and more than 100,000 square feet of retail space at full build-out.
Operating Property Results
Aimco owns a diversified portfolio of operating apartment communities located in eight major
Aimco’s operating properties produced solid results for the quarter ended
|
Third Quarter |
|
Year-to-Date |
|||||||
|
Year-over-Year |
|
Sequential |
|
Year-over-Year |
|||||
($ in millions) |
2022 |
2021 |
Variance |
|
2Q 2022 |
Variance |
|
2022 |
2021 |
Variance |
Average Daily Occupancy |
|
|
(1.9)% |
|
|
( |
|
|
|
( |
Revenue, before utility reimbursements |
|
|
|
|
|
|
|
|
|
|
Expenses, net of utility reimbursements |
10.2 |
10.3 |
( |
|
10.4 |
( |
|
30.9 |
30.4 |
|
Net operating income (NOI) |
24.5 |
20.8 |
|
|
22.7 |
|
|
69.1 |
59.7 |
|
*Excluded from the table above is one, 40-unit apartment community that Aimco’s ownership includes a partnership share.
-
Revenue in the third quarter 2022 was
, up$34.7 million 11.5% year-over-year, resulting from a increase in average monthly revenue per apartment home to$261 , offset with a 190-basis point decrease in Average Daily Occupancy to$2,173 96.0% . In October, Average Daily Occupancy increased to96.9% . -
New lease rents increased
15.8% and Aimco retained56.1% of residents whose leases were expiring during the quarter at rents15.1% higher, on average, than the previous lease. -
The median annual household income of new residents was more than
in the third quarter 2022, representing a rent to income ratio of$136,300 21.6% . -
Expenses in the third quarter 2022 were down
0.7% due to a favorable nonrecurring 2022 real estate tax adjustments made within the quarter. Before real estate taxes, expenses, net of utility reimbursements were up5.3% . -
Net operating income in the third quarter 2022 was
, up$24.5 million 17.5% year-over-year.
In addition, strong leasing momentum continued at
Property Dispositions
Year to date, Aimco has sold three stabilized properties at values exceeding those used in Aimco's internal NAV estimate. Net proceeds from the sales were primarily used to reduce leverage. In the third quarter, Aimco completed the sale of two of the three properties sold:
-
In July, Aimco sold
Cedar Rim , a 104-unit apartment community located inRenton, Washington , for .$53.0 million -
In August, Aimco sold 2900 on First, a 135-unit apartment community with 14,000 square feet of retail located in
Seattle, Washington for .$69.0 million -
As previously announced, in September Aimco closed the
lease termination transaction with AIR that returned the four leased properties to AIR in exchange for a payment to Aimco of$669 million thereby eliminating the$200 million obligation related to these leased assets. Aimco's execution in the development and lease-up of these assets resulted in Value Creation, net of costs, of approximately$469 million for shareholders.$100 million
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.
|
|
||
Total non-recourse fixed rate debt |
|
$ |
781,296 |
|
|
|
8.4 |
|
Total non-recourse floating rate debt |
|
|
79,712 |
|
|
|
1.7 |
|
Total non-recourse construction loan debt |
|
|
85,470 |
|
|
|
1.9 |
|
Cash and restricted cash |
|
|
(225,441 |
) |
|
|
|
|
Net Leverage |
|
$ |
721,037 |
|
|
|
|
As of
Debt Repayments
-
Aimco completed 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.$17.4 million -
In September, Aimco retired the
construction loan concurrent with the cancellation of the leasehold at$138.4 million Flamingo Point .
Property Financing
-
In August, Aimco closed a
land loan secured by the three$60 million Flagler Village parcels. The loan has an initial term of 24 months with an option to extend for one additional 12-month period and has a floating interest rate equal to one-month Term SOFR plus a spread of 675 basis points with a floor of8.00% . -
In October, Aimco placed a non-recourse,
property loan on its commercial office building,$81.3 million 1001 Brickell Bay Drive . The loan has an initial term of 36 months with options to extend for two additional 12-month periods and has a floating interest rate equal to one-month Term SOFR plus a spread of 450 basis points with a floor of6.00% .
Equity Financing
-
In July, Aimco closed a
,$102 million 8% preferred equity financing on a portfolio of stabilized assets with an equity partner. The financing has a seven-year term but is fully pre-payable after 48 months. -
In August, Aimco entered into an agreement with the
Alaska Permanent Fund Corporation (APFC) to fund up to of future Aimco-led multifamily developments. Pursuant to the agreement, APFC will fund up to$1 billion of limited partner equity into projects meeting specific criteria, including, among other items, return thresholds and minimum project size. Aimco will act as the general partner and developer, committing to at least$360 million through funding or the contribution of assets, while earning customary fees and the opportunity for performance-based incentive fees.$40 million
Public Market Equity
Common Stock Repurchases
-
In the third quarter, Aimco repurchased 73,444 shares of its common stock at a weighted average price of
per share. Aimco repurchased an additional 492,445 shares in October at a weighted average price of$7.14 per share. Year to date, as of$7.01 October 31, 2022 , Aimco repurchased 1,308,053 shares of its common stock at a weighted average price of per share.$6.41 -
As of
October 31, 2022 , Aimco had the authorization remaining to purchase approximately 14.4 million additional shares of its common stock.
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 future plans and goals, including our pipeline investments and projects, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, and our plans to form joint ventures. 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
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental and other property revenues |
|
$ |
47,683 |
|
|
$ |
42,893 |
|
|
$ |
148,375 |
|
|
$ |
123,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property operating expenses |
|
|
17,455 |
|
|
|
18,155 |
|
|
|
56,384 |
|
|
|
51,500 |
|
Depreciation and amortization [1] |
|
|
85,438 |
|
|
|
21,709 |
|
|
|
143,420 |
|
|
|
63,065 |
|
General and administrative expenses [2] |
|
|
10,809 |
|
|
|
8,868 |
|
|
|
29,243 |
|
|
|
22,562 |
|
Total operating expenses |
|
|
113,702 |
|
|
|
48,732 |
|
|
|
229,047 |
|
|
|
137,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
(9,719 |
) |
|
|
(12,680 |
) |
|
|
(65,865 |
) |
|
|
(37,995 |
) |
Mezzanine investment income, net |
|
|
8,423 |
|
|
|
7,636 |
|
|
|
24,990 |
|
|
|
22,654 |
|
Realized and unrealized gains (losses) on interest rate options |
|
|
9,209 |
|
|
|
2,231 |
|
|
|
48,005 |
|
|
|
10,608 |
|
Realized and unrealized gains (losses) on
|
|
|
(2,145 |
) |
|
|
1,233 |
|
|
|
20,152 |
|
|
|
2,107 |
|
Gains on dispositions of real estate |
|
|
75,539 |
|
|
|
- |
|
|
|
170,004 |
|
|
|
- |
|
Lease modification income [1] |
|
|
1,577 |
|
|
|
- |
|
|
|
206,963 |
|
|
|
- |
|
Other income (expense), net |
|
|
(255 |
) |
|
|
552 |
|
|
|
(1,743 |
) |
|
|
2,959 |
|
Income (loss) before income tax benefit |
|
|
16,610 |
|
|
|
(6,867 |
) |
|
|
321,834 |
|
|
|
(13,679 |
) |
Income tax benefit (expense) |
|
|
17,563 |
|
|
|
2,021 |
|
|
|
(24,338 |
) |
|
|
9,881 |
|
Net income (loss) |
|
|
34,173 |
|
|
|
(4,846 |
) |
|
|
297,496 |
|
|
|
(3,798 |
) |
Net (income) loss attributable to redeemable noncontrolling
|
|
|
(2,907 |
) |
|
|
(127 |
) |
|
|
(5,446 |
) |
|
|
(41 |
) |
Net (income) loss attributable to noncontrolling interests
|
|
|
(240 |
) |
|
|
(296 |
) |
|
|
(585 |
) |
|
|
(862 |
) |
Net (income) loss attributable to common noncontrolling
|
|
|
(1,554 |
) |
|
|
253 |
|
|
|
(14,648 |
) |
|
|
209 |
|
Net income (loss) attributable to Aimco |
|
$ |
29,472 |
|
|
$ |
(5,016 |
) |
|
$ |
276,817 |
|
|
$ |
(4,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common stockholders per
|
|
$ |
0.19 |
|
|
$ |
(0.03 |
) |
|
$ |
1.82 |
|
|
$ |
(0.03 |
) |
Net income (loss) attributable to common stockholders per
|
|
$ |
0.19 |
|
|
$ |
(0.03 |
) |
|
$ |
1.81 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding –
|
|
|
149,611 |
|
|
|
149,762 |
|
|
|
149,706 |
|
|
|
149,517 |
|
Weighted-average common shares outstanding –
|
|
|
151,197 |
|
|
|
149,762 |
|
|
|
151,076 |
|
|
|
149,517 |
|
[1] In the three months ended
[2] General and administrative expense includes
[3] See Note 6 of Aimco's Third Quarter 2022 SEC Form 10-Q, filed
Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
2022 |
|
|
2021 |
|
||
Assets |
|
|
|
|
|
|
||
Buildings and improvements |
|
$ |
1,248,005 |
|
|
$ |
1,257,214 |
|
Land |
|
|
639,272 |
|
|
|
534,285 |
|
Total real estate |
|
|
1,887,277 |
|
|
|
1,791,499 |
|
Accumulated depreciation |
|
|
(516,857 |
) |
|
|
(561,115 |
) |
Net real estate |
|
|
1,370,420 |
|
|
|
1,230,384 |
|
Cash and cash equivalents |
|
|
206,366 |
|
|
|
233,374 |
|
Restricted cash |
|
|
19,075 |
|
|
|
11,208 |
|
Mezzanine investments |
|
|
362,788 |
|
|
|
337,797 |
|
Interest rate options |
|
|
61,448 |
|
|
|
25,657 |
|
Right-of-use lease assets |
|
|
95,506 |
|
|
|
429,768 |
|
Other assets, net |
|
|
180,641 |
|
|
|
165,913 |
|
Total assets |
|
$ |
2,296,244 |
|
|
$ |
2,434,101 |
|
|
|
|
|
|
|
|
||
Liabilities and Equity |
|
|
|
|
|
|
||
Non-recourse property debt, net |
|
$ |
859,593 |
|
|
$ |
483,137 |
|
Construction loans, net |
|
|
80,816 |
|
|
|
163,570 |
|
Notes payable to AIR |
|
|
— |
|
|
|
534,127 |
|
Total indebtedness |
|
|
940,409 |
|
|
|
1,180,834 |
|
Deferred tax liabilities |
|
|
121,344 |
|
|
|
124,747 |
|
Lease liabilities |
|
|
98,467 |
|
|
|
435,093 |
|
Accrued liabilities and other |
|
|
125,132 |
|
|
|
97,400 |
|
Total liabilities |
|
|
1,285,352 |
|
|
|
1,838,074 |
|
|
|
|
|
|
|
|
||
Redeemable noncontrolling interests in consolidated real estate partnerships |
|
|
158,135 |
|
|
|
33,794 |
|
|
|
|
|
|
|
|
||
Equity: |
|
|
|
|
|
|
||
Common Stock |
|
|
1,492 |
|
|
|
1,498 |
|
Additional paid-in capital |
|
|
514,341 |
|
|
|
521,842 |
|
Retained earnings (accumulated deficit) |
|
|
250,996 |
|
|
|
(22,775 |
) |
Total Aimco equity |
|
|
766,829 |
|
|
|
500,565 |
|
Noncontrolling interests in consolidated real estate partnerships |
|
|
45,517 |
|
|
|
35,213 |
|
Common noncontrolling interests in |
|
|
40,411 |
|
|
|
26,455 |
|
Total equity |
|
|
852,757 |
|
|
|
562,233 |
|
Total liabilities and equity |
|
$ |
2,296,244 |
|
|
$ |
2,434,101 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006037/en/
Investor Relations 303-793-4661, investor@aimco.com
Source:
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