Apartment Income REIT — Investor Presentation (June 2022)
33 slides from Apartment Income REIT's investor presentation, June 2022
Slide 1: Investor Presentation June 2022
The most efficient and most effective way to allocate capital to multi-family real estate Investor Presentation One Canal June 2022 Boston, MA 0
Slide 2: Key Takeaways
The most efficient and most effective way to allocate capital to multi-family real estate Key Takeaways 1 2 3 Multi-family AIR has a high-quality portfolio: AIR’s simple, fundamentals remain - Diversified across eight core markets with transparent business strong, and AIR’s attractive economic growt
Slide 3: Simple, transparent business with a high-quality portfolio driving attractive organic growth
The most efficient and most effective way to allocate capital to multi-family real estate Simple, transparent business with a high-quality portfolio driving attractive organic growth April / May Operating Update Compounded SS Revenue Growth(1) SS Revenue to FCF Conversion (%)(2) Indexed to 2019 17.6
Slide 4: Significant upside potential through disciplined paired trades and deployment of the AIR Edge
The most efficient and most effective way to allocate capital to multi-family real estate Significant upside potential through disciplined paired trades and deployment of the AIR Edge (+) Disciplined • Class of 2021(1) acquisitions represent ~7% of AIR’s total portfolio and is growing at ~2x the rat
Slide 5: Strategy expected to drive significant NOI growth in AIR's initial Class of 2022 acquisitions
The most efficient and most effective way to allocate capital to multi-family real estate Strategy expected to drive significant NOI growth in AIR’s initial Class of 2022 acquisitions The Reserve at Coconut Point • Purchase price: $72M • Newly developed 180 apartment community – Located in Estero, F
Slide 6: Low, fixed cost leverage achieved in 15-months following Separation
The most efficient and most effective way to allocate capital to multi-family real estate Low, fixed cost leverage achieved in 15-months following Separation Balance Sheet Progress Since Separation(1) Key Balance Sheet Metrics (Pro Forma as of 3/31/2022) Floating Rate % No floating rate exposure -%
Slide 7: Full Year 2022 Guidance: Q1 2022 Update
The most efficient and most effective way to allocate capital to multi-family real estate Full Year 2022 Guidance: Q1 2022 Update 2022 Pro Forma Run Rate & 2023 FFO In Context Underwriting Future FFO Growth • Pro Forma Run Rate guidance of $2.19 FFO per share in 2022 as if Q1 2022 announced • Driven
Slide 8: Appendix
The most efficient and most effective way to allocate capital to multi-family real estate Appendix City Center on 7th Pembroke Pines, FL 7
Slide 9: Investment Case for AIR
The Sterling A Investment Case for AIR Philadelphia, PA
Slide 10: 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 the same for external growth; no development Simple, predictable 1 business model • Emphasis on productivi
Slide 11: 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 our AIR Edge Cl
Slide 12: Diversification, and focus on creating stable communities limits operating risk
The most efficient and most effective way to allocate capital to multi-family real estate 2 Diversification, and focus on creating stable communities limits operating risk • Emphasis on “good neighbor” policies at the core of our offerings, which we enhance with excellent amenities • High-quality re
Slide 13: 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 14: AIR Edge emphasis on productivity drives NOI margin performance
The most efficient and most effective way to allocate capital to multi-family real estate 3 AIR Edge emphasis on productivity drives NOI margin performance… Focus creates outperformance in AIR’s Same Store portfolio, while making possible acquisitions with attractive returns on a risk-adjusted basis
Slide 15: NOI margin advantage compounding over time
The most efficient and most effective way to allocate capital to multi-family real estate 3 …with resulting NOI margin advantage compounding over time… Same Store NOI Margin outperformance has resulted in ~550 bps cumulative growth above the peer average since 2016(1) Compounded Same Store NOI Growt
Slide 16: Driving significant flow-through for the benefit of shareholders
The most efficient and most effective way to allocate capital to multi-family real estate 3 …and driving significant flow-through for the benefit of shareholders ~8% and ~13% higher revenue required by Coastal and Sunbelt peers(1), respectively, to equal AIR’s Free Cash Flow conversion margin Same S
Slide 17: We employ 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 • Our weighted average cost of capital (“WACC”) implicit in our internal GAV expressed as an unlevered IRR is ~6% • A substantial spread to our WA
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 demonstrates the value of the AIR Edge • Acquisitions consistently underwritten to drive significant near-term NOI growth – Class of 2021(1) acquisitions outperforming initial underwriting
Slide 19: Our Board has depth in expertise, and reflects a best-in-class approach to 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 strengthened with new talent
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 on an absolute and relative basis
The most efficient and most effective way to allocate capital to multi-family real estate 6 Attractive valuation for AIR on an absolute and relative basis • Common equity not currently an attractive source of capital for near-term growth – Property sales and/or joint ventures expected to provide the
Slide 22: Committed to Corporate Responsibility
Parc Mosaic B Committed to Corporate Responsibility Boulder, CO
Slide 23: Significant progress in building on our longstanding commitment to corporate responsibility
The most efficient and most effective way to allocate capital to multi-family real estate Significant progress in building on our longstanding commitment to corporate responsibility • Board Nominating and Governance Committee reconstituted as the Governance and Corporate Responsibility Committee wit
Slide 24: We invest in our communities to create superior experiences for our 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 • In 2020, AIR
Slide 25: And we are 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 • Smart home technology installed in all properties to manage energy usage, and provide early detection of wasteful use of water leak detection
Slide 26: Additional AIR Background
Bent Tree C Additional AIR Background Centreville, VA
Slide 27: Apartment Income REIT Corp. Company Snapshot
The most efficient and most effective way to allocate capital to multi-family real estate Apartment Income REIT Corp. Company Snapshot 77 25,384 11.7% # of Properties(1) # of Apartment Homes(1) Q1 2022 Same Store NOI Growth $2,482 6.2% 98.1% 72.8% Q1 2022 Same Store Q1 2022 Same Store Q1 2022 Same S
Slide 28: AIR is a focused REIT with one of the largest, highest quality multi-family portfolios
The most efficient and most effective way to allocate capital to multi-family real estate AIR is a focused REIT with one of the largest, highest quality multi-family portfolios in the US • Diversified across eight core markets by type, location, and price point Boston Bay Area # Units @ Share 2,462
Slide 29: Capitalizing on accelerating demand with rents increasing across all markets
The most efficient and most effective way to allocate capital to multi-family real estate Capitalizing on accelerating demand with rents increasing across all markets • Low-teens loss-to-lease provides tailwind for 2022 and 2023 as we work through peak leasing Change In Signed Lease Rates (%) Q2 202
Slide 30: Calculation of Same Store Revenue to Free Cash Flow Conversion
The most efficient and most effective way to allocate capital to multi-family real estate Calculation of Same Store Revenue to Free Cash Flow Conversion(1) ($ in 000s, unless noted) AIR ESS UDR AVB EQR CPT MAA Q1 2022 Actuals Same Store Revenue $138,108 $356,273 $321,514 $546,839 $618,357 $277,838 $
Slide 31: 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(1) • De-leveraging fully achieved at 5.4x Net Leverage to EBITDA BBB/Stable 5.4x $7.9B 19% • 3.6% weighted average cost
Slide 32: AIR and AIV are independent, and operate as such
The most efficient and most effective way to allocate capital to multi-family real estate AIR and AIV are independent, and operate as such • Given the shared history and relationship as described below, great care is taken that any transactions between the two companies are commercially reasonable,
Slide 33: 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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