Apartment Income REIT — NAREIT Presentation 2021
22 slides from Apartment Income REIT's conference presentation, November 2021
Slide 1: 2022 Outlook & NAREIT Presentation
2022 Outlook & NAREIT Presentation The most efficient and most effective way to allocate capital to multi-family real estate November 2021 High Growth: Organic Growth due to High Margin and Low G&A External Growth due to Platform Value Creation Low Execution Risk Low Leverage 1
Slide 2: A Breath of Fresh AIR... a differentiated approach to multi-family
The most efficient and most effective way to allocate capital to multi-family real estate A Breath of Fresh AIR... a differentiated approach to multi-family Transparent 97% of 2021 FFO is derived from netting three line-items: Property NOI, G&A, and Interest Expense Efficient Peer-leading(1) cost co
Slide 3: Preliminary 2022 Outlook – Base case up 10%; Up 12% with acquisitions
The most efficient and most effective way to allocate capital to multi-family real estate PRELIMINARY 2022 OUTLOOK – Base case up 10%; Up 12% with acquisitions (1) 2021 Pro Forma FFO $2.14 Same Store Portfolio 0.28 Revenue growth 9.3% (2) Expense growth 2.4% (2)(3) NOI 12.0%(2)(4) Contribution from
Slide 4: Preliminary 2022 Outlook – Basis for Expectations at the midpoint
The most efficient and most effective way to allocate capital to multi-family real estate PRELIMINARY 2022 OUTLOOK – Basis for Expectations at the midpoint (1) This preliminary outlook represents the midpoint of AIR’s current expectations. (2) Please see page 5 for assumptions regarding Same Store r
Slide 5: Preliminary 2022 Outlook: Same Store NOI up 12.0% at the midpoint
The most efficient and most effective way to allocate capital to multi-family real estate PRELIMINARY 2022 OUTLOOK: Same Store NOI UP 12.0% at the midpoint Earn-in of 2021 Lease Rates +2.2% Anticipated Occupancy Uplift +1.0% Earn-in of current Market rates +3.8% Other Factors (1) +0.6% - 4.0% Revenu
Slide 6: Peer-leading cost control: reduced controllable operating expenses
The most efficient and most effective way to allocate capital to multi-family real estate Peer-leading cost control: AIR reduced controllable operating expenses at a 13-year CAGR of 10 basis points (1) AVB - 116 CPT - 111 EQR - 111 MAA - 110 Peer Avg - 109 Coastal Peer Avg - 109 ESS - 106 UDR - 103
Slide 7: Total Same Store Expenses
The most efficient and most effective way to allocate capital to multi-family real estate Total Same Store Expenses (1) UDR - 118 MAA/CPT - 118 Peer Avg - 117 Coastal Peer Avg - 116 EQR/AVB - 116 ESS - 115 AIR - 111 2016 2017 2018 2019 2020 2021 (1) Per SNL Financial for as reported same store reven
Slide 8: Peer-leading property NOI margin for 17 consecutive quarters
The most efficient and most effective way to allocate capital to multi-family real estate peer-leading property NOI margin for 17 consecutive quarters (1) AIR - 72.4% ESS - 68.4% UDR - 68.3% Coastal Peer Avg - 67.3% AVB - 66.7% Peer Avg - 65.7% EQR - 65.7% CPT - 62.9% MAA - 62.1% 2016FY 2017FY 2018F
Slide 9: Margin out-performance translates to NOI growth 500 basis points above peers
The most efficient and most effective way to allocate capital to multi-family real estate AIR’s margin out-performance translates to NOI (1) Growth 500 basis points above peer average MAA - 117 CPT - 115 For the three years ending 12/31/2019 AIR NOI growth outperformed the cumulative peer average by
Slide 10: 2016-2022 Same Store NOI compared to peers
The most efficient and most effective way to allocate capital to multi-family real estate 2016-2022 Same Store NOI compared to peers (1) MAA - 128 CPT- 127 AIR - 122 UDR - 118 Peer Avg - 118 ESS - 117 Coastal Peer Avg - 114 AVB - 111 EQR - 108 2016 2017 2018 2019 2020 2021 2022 (1) Based on reported
Slide 11: Conversion of Same Store Property Revenue to Cash Flow from Operations
The most efficient and most effective way to allocate capital to multi-family real estate Same store NOI margins less G&A costs = Conversion of Same Store Property Revenue to Cash Flow from Operations 65.0% 63.3% 60.6% 58.5% 58.1% 55.6% 54.8% AIR ESS UDR EQR AVB MAA CPT Peers on average need 11% hig
Slide 12: AIR Platform Value Creation results when properties are first added
The most efficient and most effective way to allocate capital to multi-family real estate AIR Platform Value Creation results when properties are first added to the AIR Platform NOI growth rates exceed market growth rates by 10% to 15% during the first two to four years, before reversion to long-ter
Slide 13: Platform Value results when NOI growth exceeds market growth
The most efficient and most effective way to allocate capital to multi-family real estate Platform Value results when property NOI growth rates exceed the market growth rates when added to the AIR property management platform (1) Market Growth AIR Platform Value Creation, averaging 14% compounded an
Slide 14: External growth funded through capital recycling
The most efficient and most effective way to allocate capital to multi-family real estate External growth funded through capital recycling Ten-Year NOI % of Portfolio (1) Growth CAGR Ten-Year IRR Stabilized Communities 85% 3.2% 6.0% Platform Value Creation 15% 6.6% 10.0% Portfolio Total Portfolio 10
Slide 15: AIR leverage will be below peer average
The most efficient and most effective way to allocate capital to multi-family real estate AIR leverage will be below peer average Leverage to EBITDA (1) 7.1x 6.4x 5.6x 5.4x 5.3x 4.6x 4.4x UDR ESS EQR AVB AIR Expected MAA CPT Year-End (1) As of 3Q 2021 per company filings. 15
Slide 16: AIR's net cost of debt is peer-leading
The most efficient and most effective way to allocate capital to multi-family real estate AIR’s net cost of debt is peer-leading Cost of Debt (1) 3.6% 3.4% 3.3% 3.1% 3.1% 2.8% 1.7% CPT MAA EQR AVB ESS UDR AIR Expected (2) Year-End (1) Peer data per company filings. AIR net cost of debt adjusted for
Slide 17: Interest Expense % of Same Store NOI
The most efficient and most effective way to allocate capital to multi-family real estate Interest Expense % of Same Store NOI (1)(2) 25.1% 21.9% 18.8% 18.1% 17.7% 14.9% 9.7% (3) ESS UDR CPT AVB EQR MAA AIR Expected Year-End There are certain limitations when comparing the percentage of interest exp
Slide 18: AIR's efficient G&A structure increases shareholder returns
The most efficient and most effective way to allocate capital to multi-family real estate Air’s efficient G&A structure Increases shareholder returns AIR measures G&A efficiency by dividing G&A costs by Gross Asset Value (“GAV”). AIR’s target is 15 basis points or below. Compensation earned by the C
Slide 19: Definitions and Supporting Calculations
The most efficient and most effective way to allocate capital to multi-family real estate Definitions and Supporting Calculations 19
Slide 20: Calculation of Same Store Revenue Conversion to Cash Flow
The most efficient and most effective way to allocate capital to multi-family real estate Calculation of Same Store Revenue Conversion to Cash Flow (1) AIR ESS UDR AVB EQR MAA CPT Same Store Revenue 469,682 957,908 847,552 1,520,420 1,758,176 1,258,355 733,785 Same Store NOI 335,694 661,106 580,472
Slide 21: AIR definition of G&A and GAV
The most efficient and most effective way to allocate capital to multi-family real estate AIR definition of G&A and GAV Comparison to Green Street • Green Street also regularly tracks and reports on this metric. Using GSA’s methodology, AIR’s G&A as percentage of assets is One of AIR’s strategic obj
Slide 22: Forward-looking Statements/ Non-GAAP Measures
The most efficient and most effective way to allocate capital to multi-family real estate Forward-looking Statements/ Non-GAAP Measures This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding project