Apartment Investment and Management Company (“Aimco”) (NYSE:
AIV) announced today third quarter results for 2021.
Wes Powell, Aimco President and Chief Executive Officer,
comments: “The Aimco team is executing well across our various
lines of business. Development and Redevelopment projects currently
in lease-up are tracking ahead of plan, especially in South Florida
where demand for luxury apartment homes continues to far outpace
expectations. Despite supply chain pressures and rising costs,
Aimco projects which are under construction remain on-time and
on-budget thanks to our disciplined process and proactive
management. All the while, the Aimco investment pipeline continues
to expand and top-line growth within our stabilized operating
portfolio is accelerating. These solid results are a testament to
the Aimco platform.”
Financial Results and Recent
Highlights
- Net loss attributable to common stockholders per share, on a
dilutive basis, was $(0.03) for the quarter ended September 30,
2021, compared to net income per share of $0.01 for the same period
in 2020, due primarily to differences from the carve-out of Aimco
predecessor prior year expenses.
- Aimco Total Shareholder Return was 43.6% year-to-date through
October 2021.
- Strong demand for Aimco’s Development and Redevelopment
projects resulted in the execution of approximately 150 net new
leases during the period, at rental rates ahead of target, and
contributed $3.2 million in revenue during the period, up nearly
30% from the second quarter.
- Aimco has re-opened Flamingo Point’s North Tower, welcoming new
residents to the fully renovated waterfront community during the
third quarter as planned.
- Aimco acquired, for $40 million, a collection of 58 luxury
townhomes in Elmhurst, Illinois, and benefits from the community’s
adjacency to an existing Aimco asset.
- Aimco closed $60 million of property financing and ended the
third quarter with $413 million of liquidity, including cash and
capacity on its revolving credit facility.
- Revenue from Aimco’s Operating Properties was up 3.8% from the
second quarter and 6.9% year-over-year, with occupancy of 97.8%, up
280 basis points year-over-year.
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 third quarter, Aimco had eight active development and
redevelopment projects located in five different markets across the
United States. These projects remain on track, as evidenced by
project-level budget and schedule, lease-up metrics, and current
market valuations. In the third quarter, Aimco invested
approximately $42 million at these projects and expects to invest
another $374 million at properties currently in development and
redevelopment.
- At the North Tower of Flamingo Point in Miami Beach, Florida,
the delivery and occupancy of apartment homes began in the third
quarter as planned. Demand has been strong with the property more
than 50% leased or preleased, six months prior to final completion,
at rental rates approximately 25% ahead of underwriting.
- At 707 Leahy in Redwood City, California, stabilized occupancy
was achieved during the third quarter slightly earlier than
planned, with the property 97% leased on September 30, 2021, at
rates meeting underwritten expectations.
- At Prism in Cambridge, Massachusetts, construction was
completed during the first quarter of 2021 and on September 30,
2021, the property was 88% occupied at rents trending in line with
our underwritten targets.
- Construction continues on schedule and on budget at The Benson
Hotel and Faculty Club in Aurora, Colorado, Hamilton on the Bay in
Miami, Florida and Oak Shore (fka. Robin Drive Land) in Corte
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 two passive equity investments.
- In the third quarter, Aimco funded a capital call of $12.1
million associated with the previously announced $50 million total
passive equity commitment to the life sciences developer, IQHQ,
bringing our total investment to $24.6 million.
- The outstanding balance on Aimco’s mezzanine loan to the
partnership that owns Parkmerced Apartments was $330 million,
including accrued interest, at the end of the third quarter.
Property operations remain consistent with previous reports.
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. During
the third quarter:
- Aimco acquired, for $40 million, Eldridge Townhomes, a 58-unit
townhome community located in Elmhurst, Illinois that Aimco
developed between 2018 and 2020. As of September 30, 2021, the
property was 98% occupied with average rents of greater than $4,000
per month. The Eldridge Townhomes are located adjacent to an
existing 400-unit Aimco community and the acquisition provides for
continued operational efficiencies and improved NOI margins. Aimco
plans to hold the Eldridge Townhomes within its portfolio of
stabilized operating properties.
- Aimco acquired two properties adjacent to its Hamilton on the
Bay apartment community in Miami’s Edgewater neighborhood, for $7
million. Combined with the six properties purchased in the second
quarter and land purchased as part of the initial acquisition of
Hamilton on the Bay, Aimco can, in total, now construct more than
1.1M square feet of new development in this rapidly growing
submarket.
- Aimco entered into a joint venture with Kushner Companies to
purchase three undeveloped land parcels located in downtown Fort
Lauderdale, Florida. The total contract price for the land is $49
million ($25 million at Aimco’s 51% share), and current zoning
allows for the development of approximately three million square
feet of multifamily homes and commercial space. The land purchase
is expected to close in January 2022.
- Aimco purchased seven acres of developable land in Colorado
Springs, Colorado with a contract price of $4 million that allows
for the construction of 119 apartment homes and townhomes.
Operating Property
Results
Aimco’s Operating Portfolio produced solid results for the
quarter ended September 30, 2021, showing continued improvement as
our business recovers from the pandemic related impacts of
2020.
Third Quarter
Year-to-Date
Year-over-Year
Sequential
Year-over-Year
($ in millions)
2021
2020
Variance
2Q 2021
Variance
2021
2020
Variance
Average Daily Occupancy
97.8
%
95.0
%
2.8
%
97.3
%
0.5
%
97.6
%
96.2
%
1.4
%
Revenue, before utility reimbursements
$
34.6
$
32.4
6.9
%
$
33.3
3.8
%
$
100.6
$
98.3
2.3
%
Expenses, net of utility reimbursements
[1]
11.2
10.2
10.6
%
11.0
2.7
%
33.4
31.1
7.4
%
Net operating income (NOI)[2]
23.3
22.2
5.1
%
22.4
4.3
%
67.2
67.2
—
*Excluded from the table above is one, 40-unit apartment
community that Aimco’s ownership includes a partnership share.
[1] The year over year increase in expenses, net of utility
reimbursements is due primarily to higher real estate taxes and
insurance. [2] See “Glossary and Reconciliations of Non-GAAP
Financial and Operating Measures” for a reconciliation of this
measure.
- In the third quarter, Aimco collected 98.2% of all amounts owed
by residents and recognized 99.2% of contractual revenue, reserving
80 basis points as bad debt.
- 1001 Brickell Bay Drive, a waterfront office building in Miami,
Florida, is owned as part of a larger assemblage containing
substantial excess development rights. At the end of the third
quarter, the building was 73% occupied, and as of October 31, 2021,
the building was 80% leased with additional leases being
negotiated. Through October 31, 2021, 99% of third quarter rents
due have been collected.
Balance Sheet and Financing
Activity
Aimco is highly focused on maintaining ample liquidity. As of
September 30, 2021, Aimco had access to $413 million, including
$253 million of cash on hand, $10 million of restricted cash, and
the capacity to borrow up to $150 million on our revolving credit
facility.
Aimco’s net leverage as of September 30, 2021 was as
follows:
as of September 30,
2021
Proportionate, $ in thousands
Amount
Weighted Avg.
Maturity (Yrs.)
Total non-recourse property debt
$
493,958
5.7
Total non-recourse construction loan
debt
142,974
2.6
Notes payable to AIR
534,127
2.3
Cash and restricted cash
(262,760
)
Net Leverage
$
908,299
- In the third quarter, Aimco closed two non-recourse property
loans with proceeds of $60 million. The loans have 10-year terms
and a weighted average fixed interest rate of 3.09%. Proceeds from
the loans were used to fund the acquisition of Eldridge Townhomes
and other investment activity.
Dividend
Aimco plans to reinvest earnings to facilitate growth and,
therefore, does not presently intend to pay a regular 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 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.
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.
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. 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
statements are based on management’s current expectations and
beliefs and are subject to a number of risks and uncertainties that
could lead to actual results differing materially from those
projected, forecasted or expected. 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, 2020, 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
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
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
REVENUES:
Rental and other property revenues
$
42,893
$
37,328
$
123,115
$
112,802
OPERATING EXPENSES:
Property operating expenses
18,155
15,151
51,500
45,822
Depreciation and amortization
21,709
19,296
63,065
57,673
General and administrative expenses
[1]
8,868
1,552
22,562
4,939
Total operating expenses
48,732
35,999
137,127
108,434
Interest expense
(12,680
)
(7,103
)
(37,995
)
(18,563
)
Mezzanine investment income, net
7,636
6,870
22,654
20,553
Unrealized gains (losses) on interest rate
options [2]
2,231
(998
)
10,608
(2,078
)
Other expenses, net
1,785
(775
)
5,066
(1,344
)
(Loss) income before income
taxes
(6,867
)
(677
)
(13,679
)
2,936
Income tax benefit (expense)
2,021
2,673
9,881
6,728
Net (loss) income
(4,846
)
1,996
(3,798
)
9,664
Net income attributable to redeemable
noncontrolling interests in consolidated real estate
partnership
(127
)
121
(41
)
349
Net loss (income) attributable to
noncontrolling interests in consolidated real estate
partnership
(296
)
1
(862
)
(4
)
Net loss (income) attributable to common
noncontrolling interests in Aimco Operating Partnership
253
(107
)
209
(507
)
Net (loss) income attributable to Aimco
common
stockholders
$
(5,016
)
$
2,011
$
(4,492
)
$
9,502
Net (loss) income attributable to common
stockholders per share – basic
$
(0.03
)
$
0.01
$
(0.03
)
$
0.06
Net (loss) income attributable to common
stockholders per share – diluted
$
(0.03
)
$
0.01
$
(0.03
)
$
0.06
Weighted-average common shares outstanding
– basic
149,762
148,549
149,517
148,549
Weighted-average common shares outstanding
– diluted
149,762
148,569
149,517
148,569
[1] General and administrative expense in the three and nine
months ended September 30, 2020 are represented as a carve-out of
Aimco predecessor expenses and are not representative of Aimco’s
anticipated expenses. [2] 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.
Consolidated Balance
Sheets
(in thousands) (unaudited)
September 30,
December 31,
2021
2020
Assets
Buildings and improvements
$
1,202,279
$
995,116
Land
534,092
505,153
Total real estate
1,736,371
1,500,269
Accumulated depreciation
(545,499
)
(495,010
)
Net real estate
1,190,872
1,005,259
Cash and cash equivalents
253,138
289,582
Restricted cash
9,623
9,153
Mezzanine investments
330,016
307,362
Right-of-use lease assets
439,229
98,280
Other assets, net
171,317
130,856
Total assets
$
2,394,195
$
1,840,492
Liabilities and Equity
Non-recourse property debt, net
$
485,116
$
447,967
Construction loans, net
138,439
—
Notes payable to AIR
534,127
534,127
Total indebtedness
1,157,682
982,094
Deferred tax liabilities
126,851
131,560
Lease liabilities
448,886
100,496
Accrued liabilities and other
95,943
62,988
Total liabilities
1,829,362
1,277,138
Redeemable noncontrolling interests in
consolidated real estate partnership
4,304
4,263
Equity:
Common Stock
1,498
1,490
Additional paid-in capital
518,913
515,127
Retained earnings (accumulated
deficit)
(21,377
)
(16,839
)
Total Aimco equity
499,034
499,778
Noncontrolling interests in consolidated
real estate partnerships
35,014
31,877
Common noncontrolling interests in Aimco
Operating Partnership
26,481
27,436
Total equity
560,529
559,091
Total liabilities and equity
$
2,394,195
$
1,840,492
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006572/en/
Matt Foster, Director, Capital Markets and Investor Relations
Investor Relations 303-793-4661, investor@aimco.com
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