Apartment Income REIT (AIRC) Shows Strong Performance and Growth

By Tamara Parker • Wednesday, February 28 10:26 • Permanent Link

In February 2024, Air presented its investor presentation, highlighting its performance and future outlook. The company reported a solid 2023 with peer-leading growth in blended lease rate, same store revenue, NOI, free cash flow, and operating margins. The average monthly revenue per home increased to $2,913, and the company exited New York, reinvesting in Bethesda and Raleigh-Durham. Air also reduced its shares outstanding by 8% since year-end 2021, returning $1.1 billion through dividends and share repurchases.

The company’s run-rate FFO and AFFO per share increased by 7.8% and 7.7% respectively. Furthermore, Air achieved a 20% increase in renewal business profitability compared to new leases. The company reported a 62.3% customer renewal rate over the trailing twelve months, marking a 550 bps improvement since 2019.

In terms of financials, Air reported a run-rate FFO per share of $2.36 in 2023, indicating a 7.8% increase compared to the previous period. The run-rate AFFO per share also increased by 7.7% to $2.09. The company’s 2024 guidance suggests a positive outlook, with peer-leading operations expected to support growth in NAV and generate positive, above-average FFO and AFFO growth.

Air also emphasized its liquidity position, reporting $1.9 billion in liquidity, which is three times the peer-average. The company has no debt maturing until Q2 2025, with a 6.5-year weighted-average maturity and sufficient committed liquidity to repay all maturities through 2027. The net leverage to EBITDARE is expected to be around 6.0x at year-end.

Moreover, the company highlighted its active capital allocation, with over $700 million acquired annually since 2021. Air has recycled approximately $4.6 billion of capital since 2020, which is approximately 38% higher than the peer average. The increased allocation to acquisitions has accelerated Air’s rate of NOI growth and FFO accretion.

Air also presented a case study on the Elm acquisition, showcasing its investment and underwritten NOI growth. Additionally, the company highlighted its corporate responsibility initiatives, including achievements in social governance and environmental performance.

In conclusion, Air's investor presentation outlined its strong performance in 2023 and provided optimistic guidance for 2024, supported by robust financials, active capital allocation, and a focus on corporate responsibility.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.