Apartment Income REIT — Investor Presentation (December 2023)
21 slides from Apartment Income REIT's investor presentation, Dec 4, 2023
Slide 1: Investor Presentation December 2023
0 The most efficient and most effective way to allocate capital to multi-family real estate Investor Presentation December 2023 The Elm Bethesda, MD Ocean House, 707 Leahy, and One Ardmore Place were recognized in Q1 2023 as Top 100 Multifamily Properties as part of the Kingsley Excellence Awards Ex
Slide 2: The AIR Edge
1 The most efficient and most effective way to allocate capital to multi-family real estate The AIR Edge • Our ideal is a culture of collaboration to serve others, nurture relationships, and build safe, stable communities. We seek teams that are more cohesive, better compensated, and more productive
Slide 3: The AIR Edge (cont'd)
2 The most efficient and most effective way to allocate capital to multi-family real estate The AIR Edge (cont’d) • AIR customer selection: – Average income in Q3 2023 (“renters by choice”): $241K – Average FICO score: ~725 • AIR customer satisfaction: – > 4.25 CSAT compares to Kingsley peer index o
Slide 4: Capital allocation: invest to improve results and return on capital
3 The most efficient and most effective way to allocate capital to multi-family real estate Capital allocation: invest to improve results and return on capital • Organic: upgrade properties with retained free cash flow – ~$85M of capital enhancements annually since 2021 with underwritten returns > 1
Slide 5: Acquisition case studies
4 The most efficient and most effective way to allocate capital to multi-family real estate Acquisition case studies Transaction Background • 2021 paired trade of (i) property sales and (ii) issuance of ~2.4M OP units at ~$50 per share (~4.3% implied cap rate when issued) • Q3 2023 paired trade of J
Slide 6: Balance sheet
5 The most efficient and most effective way to allocate capital to multi-family real estate • Net Leverage to EBITDAre on track for < 6.0x at year-end – Temporarily elevated in Q3 at 6.3x due to the timing of Q3 acquisitions – Expected EBITDA growth supports additional investment within policy or de
Slide 7: Access to capital
6 The most efficient and most effective way to allocate capital to multi-family real estate Access to capital • Debt – Corporate debt o Investment grade ratings (Moody’s / S&P): BBB / Baa2 o Estimated interest rate(1) for new issuance (5-year / 10-year): ~5.8% / ~6.1% – Property debt o Estimated int
Slide 8: The AIR Edge framework
7 The most efficient and most effective way to allocate capital to multi-family real estate The AIR Edge framework • Redesigned staffing and workflows allow for: – Fewer, more highly paid AIR teammates onsite – Supported offsite, with work increasingly done by scalable robotics • “High-quality” info
Slide 9: Resident selection and customer service drive financial performance
8 The most efficient and most effective way to allocate capital to multi-family real estate • AIR’s average resident has a ~725 FICO score, significantly higher than the national renter average of 638 • FICO, most importantly, a proxy for character • AIR’s residents < 20% rent-to- income ratios, ind
Slide 10: Enhanced NOI contribution / return on capital: resident selection (cont'd)
9 The most efficient and most effective way to allocate capital to multi-family real estate Enhanced NOI contribution / return on capital: resident selection (cont’d) • Results are predictable, and replicable Higher occupancy resulting from AIR’s increased retention Above market growth due to improv
Slide 11: AIR has smart home technology installed in every unit of its portfolio
10 The most efficient and most effective way to allocate capital to multi-family real estate AIR has smart home technology installed in every unit of its portfolio Smart Locks Thermostats Water Sensors • Valued by residents at a premium of ~$25+ per unit • Eliminates need for keys and costs associat
Slide 12: The results: peer-leading Same Store performance
11 The most efficient and most effective way to allocate capital to multi-family real estate The results: peer-leading(1) Same Store performance Same Store NOI Growth (%)(1)(2) Property EBITDA Growth (%)(1)(2)(3)Same Store Revenue Growth (%)(1)(2) 122.1 113.8 126.8 2019 2020 2021 2022 2023 Midpoint
Slide 13: The results: acquisitions underwritten to grow faster than Same Store
12 The most efficient and most effective way to allocate capital to multi-family real estate (1) Class of 2021 acquisitions defined as City Center on 7th, North Park, Huntington Gateway, Vaughan Place, and Residences at Capital Crescent Trail. Class of 2022 acquisitions defined as the Reserve at Coc
Slide 14: Case study: DC portfolio paired trade
13 The most efficient and most effective way to allocate capital to multi-family real estate Case study: DC portfolio paired trade 182.6 128.5 TTM Year 1 Actual Year 2 Actual Year 3 Projected DC Portfolio Paired Trade in Q3 2021 • Acquisition: $510M portfolio of four properties with 1,400 apartment
Slide 15: Looking forward: paired trades will continue to enhance portfolio and growth
14 The most efficient and most effective way to allocate capital to multi-family real estate (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) Reflects aggregate acquisition and dispo
Slide 16: Appendix
15 The most efficient and most effective way to allocate capital to multi-family real estate The Elm Bethesda, MD Appendix
Slide 17: The Residences at Capital Crescent Trail
16 The most efficient and most effective way to allocate capital to multi-family real estate ($ in 000s) Seller T12 FY 2023E % Change Revenue Metrics Occupancy 80% 95% 15% Parking $102 $256 151% Bad Debt (229) (168) 27% Revenue $4,600 $7,200 57% Controllable Expense Metrics Personnel ($356) ($204) 4
Slide 18: Vaughan Place
17 The most efficient and most effective way to allocate capital to multi-family real estate Vaughan Place • 382-units located in Washington, DC; constructed in 1988 • AIR Edge initiatives completed: – Initial K&B upgrades (full completion by July 2025) – Installation of smart homes and access contr
Slide 19: The Elm
18 The most efficient and most effective way to allocate capital to multi-family real estate The Elm • GSA ranking: A++ • The Elm is at the center of a master plan with direct access to Red and Purple metro transit lines – Direct access to Capital Crescent Trail • Largest employers: US government, N
Slide 20: The Elm (cont'd)
19 The most efficient and most effective way to allocate capital to multi-family real estate The Elm (cont’d) • $132.5M investment at AIR share; first investment by AIR’s Core JV – ~$548K per unit acquisition cost compares to estimated ~$600-700K replacement cost • Underwritten to generate $6.2M in
Slide 21: Forward-Looking Statements / Non-GAAP Measures
20 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 pro
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