Apartment Income REIT Corp (AIRC) Reports Q3 2023 Earnings: Pro forma FFO Up 10.3%, Net Income Rises 18.2% Year-to-Date

Accretive Investments and Strong Same Store Revenue Growth Drive Performance

Nov 02, 2023

Summary

Apartment Income REIT Corp (AIRC) reports a 10.3% increase in Pro forma FFO for Q3 2023, beating guidance by $0.01.
Same Store Revenue and NOI growth are up by 6.8% and 6.3% respectively.
Net income per share increased by 18.2% year-to-date, reaching $4.35.
AIRC made accretive investments of $644 million, funding property purchases and debt repayment.

Apartment Income REIT Corp (AIRC, Financial) released its Q3 2023 earnings report on November 2, 2023. The company reported a 10.3% increase in Pro forma FFO, beating its guidance by $0.01. This growth was driven by a 6.8% increase in Same Store Revenue and a 6.3% growth in Same Store NOI. The company's net income per share also increased by 18.2% year-to-date, reaching $4.35.

Financial Highlights

AIRC's financial performance for Q3 2023 was marked by strong growth in key areas. The company's Pro forma FFO per share increased by 10.3% compared to the same period in 2022, reaching $0.64. Year-to-date, the company's Run-Rate FFO per share increased by 8.2%, reaching $1.72. The company's net income per share also saw significant growth, increasing by 18.2% year-to-date to reach $4.35.

Accretive Investments

AIRC made accretive investments totaling $644 million during the quarter. These investments were funded through a combination of joint venture funding and property sales. The capital was used to purchase two properties, fund an additional Core JV property, repurchase AIRC shares, and repay debt. These investments are expected to be neutral to NOI in 2024 and accretive to recurring free cash flow.

Same Store Performance

AIRC's Same Store portfolio, comprising 63 properties, provided 86% of year-to-date rental revenue. The Same Store NOI increased by 6.3% in Q3 and 9.7% year-to-date. The company also reported a 6.8% increase in revenue, before utility reimbursements, for the third quarter.

Balance Sheet & Liquidity

AIRC refinanced $479 million of borrowings during the quarter. The company currently has available liquidity of $2.1 billion and no debt maturities until the second quarter of 2025. At year-end, AIRC anticipates Net Leverage to Adjusted EBITDAre to be below 6.0x, consistent with its target range of 5.0x to 6.0x.

Outlook for 2023

AIRC has narrowed its 2023 Pro forma FFO per share expectations, maintaining the $2.41 midpoint. The company anticipates Pro forma FFO between $0.63 and $0.67 per share for the fourth quarter of 2023.

Explore the complete 8-K earnings release (here) from Apartment Income REIT Corp for further details.

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