Apartment Investment and Management pany(AIV) - 2025 Q1 - Quarterly Results

Earnings Release Aimco reported a Q1 2025 net loss of $(0.10) per share while highlighting strong rental demand, progress on developments, a major asset sale, and the exploration of strategic alternatives Financial Results and CEO Commentary The CEO highlighted strong portfolio demand, progress on lease-ups and construction, a flexible balance sheet, and key strategic actions including a special dividend and a major asset sale Q1 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Loss per Share (diluted) | $(0.10) | | Stabilized Properties NOI Growth (YoY) | 2.7% | - Effective rental rate growth at stabilized properties accelerated in April, increasing 5.8% over the prior lease, with average daily occupancy remaining strong at over 97%[7] - The company is progressing with the lease-up of newly constructed communities in Corte Madera, CA, and the Washington, D.C. market, with stabilization expected by year-end 2025[8] - A $520 million contract to sell the Brickell Assemblage in Miami is scheduled to close later in the year, with the buyer increasing its non-refundable deposit to $43 million[11] - In Q1, Aimco returned $0.60 per share to stockholders as a special dividend, representing net proceeds from 2024 asset sales[11] Operating Property Results Stabilized Operating Properties saw year-over-year revenue, expense, and NOI growth of 2.7% each, with effective rents on new and renewal leases rising 5.2% Stabilized Operating Properties Performance (Q1 2025 vs Q1 2024) | Stabilized Operating Properties (Q1 2025 vs Q1 2024) | 2025 | 2024 | Variance | | :--- | :--- | :--- | :--- | | Average Daily Occupancy | 97.9% | 97.9% | — | | Revenue, before utility reimbursements ($M) | $35.6 | $34.6 | 2.7% | | Expenses, net of utility reimbursements ($M) | $10.5 | $10.2 | 2.7% | | Net operating income (NOI) ($M) | $25.1 | $24.4 | 2.7% | - Effective rents in Q1 2025 were 5.2% higher on average than the previous lease (new leases up 4.6%, renewals up 6.6%), a trend that accelerated in April to 5.8%[16] - Sequentially, NOI decreased by 3.4% from Q4 2024, primarily due to a 9.6% increase in expenses from seasonal costs and higher real estate taxes[14][16] Value Add and Opportunistic Investments Aimco invested $20.6 million in development activities, advanced lease-ups at three communities, and progressed on its Miami waterfront tower and a major asset sale - Upton Place (Washington D.C.): 413 of 689 units were leased or pre-leased, and 92% of retail space was leased as of April 30, 2025[20] - Strathmore Square (Bethesda, MD): 132 of 220 units were leased or pre-leased as of April 30, 2025[20] - 34th Street (Miami, FL): The ultra-luxury waterfront tower remains on schedule and budget, with over 97% of the project bought out under a guaranteed maximum price contract[20] - The sale of the Brickell Assemblage for $520 million is proceeding, with the buyer increasing its non-refundable deposit to $43 million to extend the closing to August 2025[19][23] Balance Sheet and Financing Activity Aimco maintained a strong liquidity position of $225.2 million, with net leverage of $1.17 billion and no debt maturities before June 2027, including extensions Net Leverage (as of March 31, 2025) | Aimco Share Leverage (as of March 31, 2025) | Amount ($ thousands) | | :--- | :--- | | Total non-recourse fixed rate debt | $693,506 | | Total non-recourse construction loan debt | $397,573 | | Total property debt secured by assets held for sale | $159,226 | | Cash and restricted cash | $(76,417) | | Net Leverage | $1,173,888 | - Total liquidity as of March 31, 2025, was $225.2 million, comprising cash, restricted cash, and availability on its revolving credit facility[21] - 100% of Aimco's total debt was either fixed rate or hedged; including contractual extensions and pending asset sales, Aimco has no debt maturing before June 2027[22] Public Market Equity and Stockholder Value Aimco is exploring strategic alternatives to address its stock's discount to private market value, paid a special dividend, and repurchased shares in Q1 - The Board of Directors is exploring strategic alternatives to maximize stockholder value, including a sale or merger of the company, sales of business components, or accelerated individual asset sales[25] - A special cash dividend of $0.60 per share was paid on January 31, 2025, distributing net proceeds from 2024 asset sales[23] - In January 2025, Aimco repurchased 29,498 shares of common stock at an average price of $8.66 per share[27] 2025 Outlook Aimco forecasts full-year 2025 diluted net income per share of $1.50 to $1.60, including gains from announced transactions, and NOI growth of 1.0% to 3.0% Full-Year 2025 Forecast | 2025 Forecast | Full Year 2025 | | :--- | :--- | | Net income per share – diluted | $1.50 - $1.60 | | Operating Properties | | | Revenue Growth | 2.5% - 3.5% | | Operating Expense Growth | 5.0% - 6.0% | | Net Operating Income Growth | 1.0% - 3.0% | | Real Estate Transactions | | | Dispositions ($ in millions) | $520 - $540 | - The net income per share forecast includes estimated gains from the announced sale of the Brickell Assemblage[28][30] - Planned direct costs on active developments are projected to be $50 - $60 million, primarily for the 34th Street project, funded through committed construction loan and preferred equity draws[28][29] Consolidated Financial Statements The company reported a Q1 net loss of $11.7 million on total assets of $1.87 billion and total liabilities of $1.57 billion as of March 31, 2025 Consolidated Statements of Operations For Q1 2025, a rise in total revenues to $52.4 million was offset by higher interest expense, resulting in a net loss of $11.7 million, or $(0.10) per share Consolidated Statements of Operations Highlights | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Rental and other property revenues | $52,352 | $50,203 | | Total operating expenses | $47,666 | $49,216 | | Interest expense | $(17,438) | $(13,370) | | Net income (loss) | $(11,712) | $(7,196) | | Net income (loss) per share – diluted | $(0.10) | $(0.07) | Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $1.87 billion and total liabilities fell to $1.57 billion, primarily due to a special dividend payment Consolidated Balance Sheets Highlights | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net real estate | $1,256,355 | $1,247,833 | | Assets held for sale, net | $275,929 | $276,079 | | Cash and cash equivalents | $49,147 | $141,072 | | Total assets | $1,872,765 | $1,956,910 | | Total indebtedness | $1,082,995 | $1,070,660 | | Total liabilities | $1,570,211 | $1,644,613 | | Total Aimco equity | $110,486 | $122,957 | Supplemental Information This section provides detailed schedules on non-GAAP reconciliations, debt, portfolio composition, capital spending, development projects, and Net Asset Value Schedule 1 – EBITDAre and Adjusted EBITDAre For Q1 2025, Aimco's GAAP net loss of $11.7 million reconciled to an EBITDAre of $22.4 million and an Adjusted EBITDAre of $19.7 million Reconciliation to EBITDAre and Adjusted EBITDAre | (in thousands) | Three Months Ended March 31, 2025 | | :--- | :--- | | Net income (loss) | $(11,712) | | Adjustments (Interest, D&A, etc.) | +$34,086 | | EBITDAre | $22,374 | | Further Adjustments | $(2,639) | | Adjusted EBITDAre | $19,735 | Schedule 2 – Aimco Leverage and Maturities Aimco's $1.09 billion in non-recourse debt has a 5.0-year weighted average maturity, and with extensions, the first maturity is not until Q2 2027 Non-Recourse Debt Summary (Aimco Share) | Debt Type (Aimco Share) | Amount ($ thousands) | W.A. Maturity (Yrs) | W.A. Interest Rate | | :--- | :--- | :--- | :--- | | Fixed rate loans | $693,506 | 6.5 | 4.39% | | Construction loan debt | $397,573 | 2.4 | 7.40% | | Total non-recourse debt | $1,091,079 | 5.0 | 5.50% | - Including contractual extension options, the first debt maturity is in Q2 2027, and the weighted average maturity extends to 5.3 years[51] Schedule 3 – Aimco Portfolio Aimco's consolidated portfolio consists of 37 properties, including 20 stabilized operating properties with 5,243 apartment homes and multiple development projects Consolidated Portfolio Summary | Portfolio Category | Number of Properties | Apartment Homes | | :--- | :--- | :--- | | Stabilized Operating Properties | 20 | 5,243 | | Development and Redevelopment - Owned | 3 | 1,023 | | Development and Redevelopment - Land | 5 | - | | Held for Sale | 2 | 357 | | Total Consolidated | 32 | 6,647 | Schedule 4 – Aimco Capital Additions Aimco's total capital additions for Q1 2025 were $23.4 million, with the majority ($20.6 million) allocated to development and redevelopment projects Capital Additions (Q1 2025) | (in thousands) | Three Months Ended March 31, 2025 | | :--- | :--- | | Capital Replacements and Casualty | $2,738 | | Development and Redevelopment | $20,609 | | Other | $100 | | Total Capital Additions | $23,447 | Schedule 5 – Aimco Development and Redevelopment Project Summaries Aimco's active development pipeline includes three projects in lease-up and one under construction, with a future pipeline of over 3,700 multifamily units Active Development and Redevelopment Projects | Active Project | Location | Units | Status | Planned Capital ($M) | To-Date ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | Upton Place | Washington, D.C. | 689 | Lease-up | $242.0 | $241.0 | | Strathmore Square | Bethesda, MD | 220 | Lease-up | $156.5 | $156.0 | | 34th Street | Miami, FL | 114 | Active Construction | $211.7 | $46.3 | | Oak Shore | Corte Madera, CA | 24 | Lease-up | $47.5 | $47.5 | - Aimco's future development pipeline includes projects with the potential for approximately 3,708 multifamily units and over 1 million square feet of commercial space[65] Schedule 6 – Stabilized Operating Properties The 20 stabilized properties saw total NOI grow 2.7% year-over-year, led by Boston, while maintaining a high average occupancy of 97.9% Stabilized Properties Performance by Market (YoY) | Market (Q1 2025 vs Q1 2024) | Revenue Growth | Expense Growth | NOI Growth | Occupancy | | :--- | :--- | :--- | :--- | :--- | | Boston | 3.9% | 2.9% | 4.3% | 98.3% | | Chicago | 2.3% | 2.5% | 2.2% | 97.8% | | New York City | 4.7% | 9.4% | 0.6% | 99.7% | | Total | 2.7% | 2.7% | 2.7% | 97.9% | Schedule 7 – Acquisitions, Dispositions, and Leased Communities Aimco did not complete any acquisition or disposition transactions during the first quarter of 2025 - No acquisition or disposition transactions were completed during the first quarter of 2025[70] Schedule 8 – Net Asset Value Components Aimco's pre-tax NAV components include $100.3 million in annualized NOI from stabilized properties and over $1.09 billion in property and construction debt Key Net Asset Value (NAV) Components | Key NAV Components (in millions) | 1Q 2025 Value | | :--- | :--- | | Assets | | | Annualized NOI for Stabilized Properties | $100.3 | | Projected Annual NOI for Development Projects | $61.6 | | Expected proceeds from assets held for sale | $520.0 | | Liabilities | | | Non-recourse property debt, net | $689.5 | | Non-recourse construction loans, net | $405.1 | | Liabilities associated with assets held for sale | $220.0 | Glossary and Reconciliations of Non-GAAP Financial and Operating Measures This section defines non-GAAP measures like EBITDAre and NOI, explains real estate classifications, and provides reconciliations to comparable GAAP figures - Defines key non-GAAP measures used by management, including EBITDAre, Adjusted EBITDAre, and Property Net Operating Income (NOI)[77][81][88] - Provides reconciliations for non-GAAP measures to their nearest GAAP equivalents, such as the reconciliation of GAAP rental revenues to NOI[91][92] - Explains Aimco's real estate classifications, including Stabilized Operating Properties, Development and Redevelopment, and Assets Held for Sale[95][98][99]