PR Newswire
DENVER, May 8, 2024
DENVER, May 8, 2024 /PRNewswire/ -- Apartment Investment and Management Company ("Aimco") (NYSE: AIV) announced today first quarter results for 2024 and provided highlights on recent and planned activities.
CEO Commentary
Wes Powell, Aimco President and Chief Executive Officer, comments: "Aimco delivered solid first quarter results and made steady progress towards the plans and objectives that we outlined for 2024. Demand for rental housing continues to outpace supply in the vast majority of Aimco's markets, investment activity focused on multifamily assets has accelerated in recent months, and our regional development teams are executing well.
"Net operating income produced by our Stabilized portfolio was $107.4 million over the trailing twelve-month period and continues to grow, up 6.5% year-over-year during the first quarter. We remain on track to complete construction on our current class of development projects by year-end. These projects remain on budget, with total direct costs projected to be $648 million, and are expected to produce $44 million of NOI annually upon their stabilization. While our regional development teams are planning for select new project starts, total Aimco equity allocated to development and related activities is projected to be substantially reduced when compared to prior years.
"Consistent with our overarching goal to create and unlock value for Aimco stockholders, our previously announced plans to sell our 1001 Brickell Bay Drive office building and the adjacent Yacht Club apartment building in Miami, Florida are advancing steadily. As expected, these extraordinary assets have generated broad interest and our broker plans to solicit offers over the coming weeks. In addition, during the second quarter we plan to market for sale The Hamilton, our fully renovated waterfront asset in Miami's Edgewater neighborhood. As sales are closed, and associated liabilities are retired, net proceeds will be prudently allocated with a preference for returning capital to stockholders.
"Aimco continues to benefit from a well-structured balance sheet. Property-level borrowings on our Stabilized portfolio (representing two-thirds of Aimco's total debt) are at favorable fixed-rates, are assumable, and have, on average, seven years of term remaining.
"Finally, I offer my thanks and appreciation to the Aimco team for their dedication and for continuing to produce strong results."
Operating Property Results
Aimco owns a diversified portfolio of operating apartment communities located in eight major U.S. markets with average rents in line with local market averages.
Results at Aimco's Stabilized Operating Properties were as follows:
| First Quarter | |||||
Stabilized Operating Properties | Year-over-Year | | Sequential | |||
($ in millions) | 2024 | 2023 | Variance | | 4Q 2023 | Variance |
Average Daily Occupancy | 97.9 % | 98.0 % | (0.1) % | | 97.5 % | 0.4 % |
Revenue, before utility reimbursements | $38.6 | $36.7 | 5.4 % | | $38.4 | 0.7 % |
Expenses, net of utility reimbursements | 11.5 | 11.2 | 2.8 % | | 10.6 | 8.3 % |
Net operating income (NOI) | 27.1 | 25.5 | 6.5 % | | 27.7 | (2.2) % |
Value Add and Opportunistic 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 March 31, 2024, Aimco had three active development multifamily projects located in two U.S. markets, in varying phases of construction and lease-up. These projects remain on track, as measured by construction budget and lease-up metrics. Additionally, Aimco has a pipeline of future value add opportunities totaling approximately 13 million gross square feet of development in Aimco's target markets of Southeast Florida, the Washington D.C. Metro, and Colorado's Front Range.
During the first quarter, Aimco invested $42.8 million in development and redevelopment activities, inclusive of construction debt and third-party equity. Updates on active development and redevelopment projects include:
Investment & Disposition Activity
Aimco is focused on prudently allocating capital and delivering strong investment returns. Consistent with Aimco's capital allocation philosophy, it monetizes the value within its assets when accretive uses of the proceeds are identified and invests when the risk-adjusted returns are superior to other uses of capital.
Balance Sheet and Financing Activity
Aimco is highly focused on maintaining a strong balance sheet, including ample liquidity at all times. As of March 31, 2024, Aimco had access to $290.4 million, including $121.8 million of cash on hand, $18.6 million of restricted cash, and the capacity to borrow up to $150.0 million on its revolving credit facility.
Aimco's net leverage as of March 31, 2024, was as follows:
| | as of March 31, 2024 | | |||||
Aimco Share, $ in thousands | | Amount | | | Weighted Avg. | | ||
Total non-recourse fixed rate debt | | $ | 775,463 | | | | 7.0 | |
Total non-recourse floating rate debt | | | 89,843 | | | | 1.5 | |
Total non-recourse construction loan debt | | | 313,193 | | | | 1.6 | |
Cash and restricted cash | | | (140,018) | | | | | |
Net Leverage | | $ | 1,038,481 | | | | | |
[1] Weighted average maturities presented exclude contractual extension rights. |
As of March 31, 2024, 100% of Aimco's total debt was either fixed rate or hedged with interest rate cap protection and, including contractual extensions, Aimco has only $8.5 million, or less than 1% of its total debt, maturing prior to May 2026.
Public Market Equity
Common Stock Repurchases
Commitment to Enhance Stockholder Value
The Aimco Board of Directors, in coordination with management, remains intently focused on maximizing and unlocking value for Aimco stockholders and continues to engage regularly with several leading advisory firms, including Morgan Stanley & Co. LLC.
Aimco's announced plans to reduce exposure to development activity and monetize certain assets represent a commitment to simplify the portfolio and unlock embedded value when there are opportunities to do so. These efforts will further improve Aimco's positioning in the market and provide increased flexibility as the Board of Directors continues its review and consideration of broader strategic actions to maximize stockholder value. In addition, in conjunction with our contemplated asset sales, we will prioritize return of capital to our stockholders as a key component of our capital allocation philosophy.
There can be no assurance that the ongoing review will result in any particular transaction or transactions or other strategic changes or outcomes and the timing of any such event is similarly uncertain. The Company does not intend to disclose or comment on developments related to the foregoing unless or until it determines that further disclosure is appropriate or required.
2024 Outlook
| 1Q 2024 | | 2024 | | 2024 | |
$ in millions (except per share amounts), Square Feet in millions Forecast is full year unless otherwise noted | Results | | Forecast | | Prior Forecast | |
Net income (loss) per share – diluted [1] | | $(0.07) | | $(0.50) - $(0.40) | | $(0.50) - $(0.40) |
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