Apartment Income REIT — Investor Presentation (March 2023)
31 slides from Apartment Income REIT's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
The most efficient and most effective way to allocate capital to multi-family real estate Investor Presentation Southgate Towers March 2023 Miami Beach, FL 0
Slide 2: Key Takeaway: The foundation of outperformance is the AIR Edge
The most efficient and most effective way to allocate capital to multi-family real estate Key Takeaway: The foundation of outperformance is the AIR Edge… our comparative advantage… 1 2 3 …in operations(1): …in capital allocation(1)(3): …in implication for 2023 prospects: • Sustained Same Store blend
Slide 3: The AIR Edge drives organic growth and conversion of Same Store Revenue to FCF
The most efficient and most effective way to allocate capital to multi-family real estate 1 The AIR Edge drives attractive organic growth, and conversion of Same Store Revenue to FCF… The AIR Edge is the cumulative result of our focus on resident selection, satisfaction, and retention, as well as re
Slide 4: Making possible the opportunity for accretive growth
The most efficient and most effective way to allocate capital to multi-family real estate 2 …making possible the opportunity for accretive growth • AIR targets ~30% of GAV in properties new to the AIR platform Class of 2021(1) 2022 Change In Transacted Lease Rates (%) $726M acquisition cost; ~8% of
Slide 5: Potential for future growth through paired trades
The most efficient and most effective way to allocate capital to multi-family real estate 2 …with potential for future growth through paired trades… • Source and cost of capital informed by $1.3B of dispositions in 2022 at long-term expected IRRs of <7% • Use of capital to acquire properties with po
Slide 6: Further enhancing AIR's high-quality portfolio
The most efficient and most effective way to allocate capital to multi-family real estate 2 …further enhancing AIR’s high-quality portfolio Additional Q4 2022 Highlights • GAV (A / B) = 55% / 45% • 41% (~$4.1B) of GAV recycled in favorable markets since the Separation • Retention (A / B): 60.1% / 62
Slide 7: Full Year 2023 Guidance
The most efficient and most effective way to allocate capital to multi-family real estate 3 Full Year 2023 Guidance ($ Amounts represent AIR Share) 2023 Range 2022 Additional 2023 Commentary Low High Actual • Same Store Revenue Same Store Operating Components of NAREIT FFO – Earn-In from 2022 leasin
Slide 8: Full Year 2023 Guidance: Change in Pro Forma FFO per Share
The most efficient and most effective way to allocate capital to multi-family real estate 3 Full Year 2023 Guidance: Change in Pro Forma FFO per Share ~10% FFO growth in Same Store portfolio; Expect positive FFO contribution from new acquisitions in 2024+ as AIR Edge is deployed $2.41 $2.41 ($0.02)
Slide 9: Appendix
The most efficient and most effective way to allocate capital to multi-family real estate Appendix Locust on the Park Philadelphia, PA 8
Slide 10: Investment Case for AIR
Island Club A Investment Case for AIR Oceanside, CA
Slide 11: What makes AIR a compelling investment?
The most efficient and most effective way to allocate capital to multi-family real estate What makes AIR a compelling investment? • High-quality, stabilized multi-family portfolio with focus on same for external growth; no development risk Simple, predictable 1 business model • Emphasis on productiv
Slide 12: Simple, predictable business model
The most efficient and most effective way to allocate capital to multi-family real estate 1 Simple, predictable business model… Focus on high-quality, stabilized multi-family properties Eight core, high-quality US markets Organic growth through peer-leading(1) operating efficiency of the AIR Edge Co
Slide 13: Diversification and stability of customer base limit operating risk
The most efficient and most effective way to allocate capital to multi-family real estate 2 Diversification, and stability of customer base limit operating risk… even in recession • “Good neighbor” policies and stable work force promote relationship building and resident satisfaction • Use of techno
Slide 14: The AIR Edge is our ability to provide exceptional service consistently
The most efficient and most effective way to allocate capital to multi-family real estate 3 The AIR Edge is our ability to provide exceptional service consistently due to our focus on culture, resident satisfaction, innovative technology, and continuous process improvement • The AIR Edge is a durabl
Slide 15: AIR Edge emphasis on productivity drives operating margin performance
The most efficient and most effective way to allocate capital to multi-family real estate 3 AIR Edge emphasis on productivity drives operating margin performance… Same Store COE Growth (%)(1) (Indexed to 2009) Indexed to 2009 Negative 10 bps CAGR measured over 13-years(1) 100.0 100.1 100.6 100.6 99.
Slide 16: Producing an efficient business model for public multi-family ownership
The most efficient and most effective way to allocate capital to multi-family real estate 3 …producing an efficient business model for public multi-family ownership Same Store Revenue Growth (%)(1) Same Store NOI Growth (%)(1) Free Cash Flow Growth (%)(1)(2) Diversification, and emphasis on stabilit
Slide 17: A highly disciplined approach to capital allocation
The most efficient and most effective way to allocate capital to multi-family real estate 4 We employ a highly disciplined approach to capital allocation • View of AIR’s WACC, expressed as an unlevered IRR, is a range of ~7-8% informed by current markets • A substantial spread to our WACC, generally
Slide 18: Investment results demonstrate the value of the AIR Edge
The most efficient and most effective way to allocate capital to multi-family real estate 4 Investment results demonstrate the value of the AIR Edge • Class of 2021(1) trending at low double-digit IRRs (vs. underwriting at ~9%) • Execution of business plans driven by the AIR Edge expected to generat
Slide 19: Board with depth in expertise and best-in-class governance
The most efficient and most effective way to allocate capital to multi-family real estate 5 Our Board has depth in expertise, and reflects a best-in-class approach to governance Governance Highlights Experienced Board of Directors ✓ Refreshed Board with five new Terry Considine Margarita Paláu-Herná
Slide 20: Exceptional, long-tenured Management team
The most efficient and most effective way to allocate capital to multi-family real estate 5 Exceptional, long-tenured Management team strengthened with new talent Strong Management Alignment Director & President & President, Executive Vice President Chief Executive Officer General Counsel Property O
Slide 21: Attractive valuation for AIR in current market environment
The most efficient and most effective way to allocate capital to multi-family real estate 6 Attractive valuation for AIR in current market environment • Common equity not currently an attractive source of capital for near-term growth – Paired trades through property sales and/or joint ventures expec
Slide 22: Attractive dividend characteristics for tax sensitive investors
The most efficient and most effective way to allocate capital to multi-family real estate 6 Attractive dividend characteristics for tax sensitive investors • Target payout ratio for 2023 at ~75% of FFO – Currently project a majority of the dividend will be taxed at capital gain rates, with remainder
Slide 23: Committed to Corporate Responsibility
Township Residences B Committed to Corporate Responsibility Centennial, CO
Slide 24: Commitment to corporate responsibility
The most efficient and most effective way to allocate capital to multi-family real estate Commitment to corporate responsibility • AIR’s 2021-2022 Corporate Responsibility Report is posted to our updated corporate responsibility site AIR ESG Highlights Recent Awards / Updates GRESB score of 78 Envir
Slide 25: We invest in our communities to create superior experiences for residents
The most efficient and most effective way to allocate capital to multi-family real estate We invest in our communities to create superior experiences for our residents… CSAT Scores(1) AIR CSAT Score Kingsley Index 4.33 • AIR is home to 55K+ residents across the US 4.30 4.30 4.27 4.27 4.26 • In 2020,
Slide 26: Committed to making our environmental impacts positive
The most efficient and most effective way to allocate capital to multi-family real estate And we are committed to making our environmental impacts positive • AIR has always operated our communities with a focus on cost optimization, efficiency, and customer experience • 100% of all AIR apartment hom
Slide 27: Additional AIR Background
Avery Row C Additional AIR Background Arlington, VA
Slide 28: AIR perspective on macroeconomic factors
The most efficient and most effective way to allocate capital to multi-family real estate AIR perspective on macroeconomic factors • 2022 has shown the ability of apartment owners (including AIR) to reprice rents in a high inflationary environment • AIR’s focus on efficiency expected to maintain sta
Slide 29: Calculation of Same Store Revenue to Free Cash Flow Conversion
The most efficient and most effective way to allocate capital to multi-family real estate Calculation of Same Store Revenue to Free Cash Flow Conversion %(1) ($ in 000s, unless noted) AIR ESS UDR EQR AVB CPT MAA 2022 Actuals Same Store Revenue (GAAP) $544,538 $1,479,975 $1,330,981 $2,533,577 $2,224,
Slide 30: Financial risk reduced by a flexible, low leverage balance sheet
The most efficient and most effective way to allocate capital to multi-family real estate Financial risk reduced by a flexible, low leverage balance sheet Balance Sheet Highlights AIR Debt Profile ($M)(1) • De-leveraging fully achieved Repricing Schedule • Wtd. avg. repricing duration of 6.8 years a
Slide 31: 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 projec
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