Apartment Income REIT Corp - Ordinary Shares (AIRC) 9 Feb 242023 Q4 Earnings call transcript

Welcome, and thank you for attending today's AIR Communities Third Quarter 2023 Earnings Conference Call. My name is [ Tridhi ], and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to Lisa Cohn, President and General Counsel of AIR Communities.

You may proceed.

Thank you, and good day. Cohn, Communities. am Lisa Counsel and is AIR of name and President I General My

conference the to differ results this risks be management's be These During found call, may are materially and judgment, based make statements today. SEC of discussed including from on uncertainties, are in a what projections which to our may related subject our description expectations. forward-looking XXXX certain statements can we Actual filings.

Josh FFO certain our comparable Investment and the release non-GAAP part These will financial the We and and available will come prepared as reconciled Minix, most Considine, AFFO. Q&A full Other published defined Keith such the CFO. all supplemental be remarks. also which today our website. Comments GAAP are from are and CEO; our earnings discuss Paul AIR's of of the Officer; is Operations; Kimmel, are also Beldin, measures, during Terry of session, in Property President management on members information to that will present our us measures Chief follow of

I will Considine. to call now the Terry? turn Terry

last result of your our minds. the the There's and third fully increase takes the morning. in the There's I be to thank $X.XX quarter call. expected considerable good XXXX expense. you third this about my AIR's disclosed consensus read remarks set and was Good of on quarter on what confusion report. interest $X.XX operations. in And morning this of all I understand aside Lisa, you, and prepared night address first to on refinancing

property rates market REIT This of or the borrowings underwriting. will acceleration occur the as difference of upgrades. and somewhat million reprice. accretive XXXX balance a than in increase share considered our between reflects debts expected sheet the in and year interest reflects every at rate funded $X.XX It the borrowing by fourth to interest reflects rates. in legacy in $X.XX a a current then third impact so quarter quarter higher fund by was repurchases $XX

and cost leverage flow of capital. at leverage underwritten same. cash price accretive and reduce later. that for faster with more is importantly, free in lower have expense but investments would and portfolio the spreads 'XX, past paid substantial is quality We growth future a The interest There XXXX some higher increases in in higher XXXX variability to our suggestion

when even are leverage exposure Financial does changing X% for AIR the well especially rates create use interest introduce fluctuated X.XX% proceeds borrowed bigger and XX-year portfolio the the This value. year, highest the pronounced below returns to the The With of shareholder rates. AIR X%. to to is was to on from upgrade and last example, back the point investment.

look of earning and are We with of a past long-term the interest on focused higher better changes. the power short-term rate noise portfolio values

flow with where leverage There real. costs but higher some financial mortgage second completion cash from about implicit were leverage free the unfunded concerns debt impacts. sheet, remains off lending risk, FFO the Any of owned with the other at Comparison value, loan properties of the stabilized models to consider as needs consider of stabilize safe. development stability to to discussion leverage XX% business the is others needs by to risk. to of AIR with risk AIR paired of balance risk year is and properties leverage senior trades X and much minor

year We're we relatively to with comfortable noise, To creation. value minor X considerable see the concern state answer it. the is if long-term

Schedule path some economics. example, capital. a will shown addressed about There complexity We are to which of by their from ventures. similar were outearn provides for transparency, that of XXXX's IIb, confident joint clear cost is paired The in concerns the trades complexity gap as,

our a sidelined. to higher upgrade others construction discounts the properties, anticipated often and reinvest the shareholders, at to rates, saw benefits and in opportunity the all other an to with the XXXX, while fails costs free which we opportunity are XXXX cash their to proceeds partial in interest sale liquid market flow by growth consider including portfolio otherwise of in to It the

to global predictable. benefits low income income. long-term portfolio that There AIR. The are and some A construction nonrecurring, AIR's declined be co-invest discussion already in alongside choose might agreements Aimco, between reported. investors needs on we cash when continuing reduce it's that benefit shareholders if It's in available, of nonrecurring investors The of just estate the chose of the is reassurance creation free it, stock G&A. and nonrecurring. It AIR's most lowers flow real service additional do, to and will was corollary will be to was the exaggerated sophisticated be it's when long-term we nonrecurring better to as naturally XXXX. that disclosing focus considerably termination and income. AIR off XXXX take real we cash accelerated But

guidance just a to growth. rental XXXX are XXXX view has taken AIR forecast. Finally, rate that conservative of market forecast for

We I to not results that of you also tell the at beginning. its keep possible of and land. encourage Time where upside. at shows score a provided will year, a range guidance end substantial the

bottom My line.

value portfolio the its continuing it seems whose own will AIR Given that considerably. AIR will shareholders on consensus the operations the herein the have of increases growth in quality performance AIR likely the and increased enterprise of an and at rate,

compare oversight advice portfolio I expected creation and largely will both Board The ours diversified of I stable thank appears in supply, insulated friendship and XXXX. that the engaged will for Given their results XXXX be expect our help. from cohesive today's a Directors. work surge and value of team and in that favorably the new our to of is and in

the turn to Keith Kimmel. to like Keith? I'd call that, With

to solid wrapped pleased we with good report Terry, Thanks, a with I'm quarter. XXXX up fourth

well AIR of we our another see and what expectations quarter importantly, Fourth as ahead. results typical More year is were and to good XXXX, begin positioned met reflective seasonality.

X.X% broad XX.X%, of portfolio to basis lease up new pricing we signed diversification X.X% down building quarter, as of Revenue new markets continues occupancy limited Josh's power. a was benefit prior occupancy with good XXX from the and to push third points from exposure and AIR were to the with up from build leases work, supply.

were increased operating points Edge up up ever best X.X%. of X.X%. Expenses With controllable in basis outperformance. income XX.X%. operating full increased XX year to to AIR XX basis continues The AIR's and only Renewals expenses due net drive part points, retention

Edge from from also in in operating last stack above-market fourth basis margin XX.X% basis the operating model the our XXX net generates efficiencies The AIR's growth, of our and performance acquisition also XXX better same-store particular, than AIR's operating technology the fourth up portfolio. expenses of down year. reached XXXX benefited all-time of and up an high, X.X% quarter points AIR our with classes and XXXX. In income portfolio. points XXXX And from quarter,

was Our quarter now to XXXX revenue of expanded Compared these XXXX, points up just expenses the XX%. Margins transformation. basis XX%. over class today. owned acquisition is have over XX.X% for X at XXX from XX%. of remarkable income have decreased Net fourth communities and Controllable a years undergone up at to has operating XX.X%

seller's At now roll this operating of class balance to entering the that for Southgate, rent are portfolio. and and platform from above-market owned from approximately predictable has growth engine revenue year. the prior year, from growth. XXXX day expected repeatable AIR combination operating income creates same-store year, Our the the now growth X X XX% reliable The twice increased net growth have savings income of expense net of had we've of acquisitions of for the a XX%

year. start the January are the and to well XX.X%. we strong at positioned from results quarter Occupancy have fourth to be strengthened continues

X.X%, up new Our high occupancy X.X% renewals of brings up blended power pricing lease-to-lease signed and leases with X.X%.

pressures, increased the see first the spring have basis excellence. each balance leasing waning XX inflation and shoots of XXXX reflect only but on pockets, with in demand, year-to-date strong typical rents has and premium sequentially leasing pre-pandemic season. Asking We sales grown as week of green will points year a placed we a and the operational volume anticipate supply

Our XX a X.X% in from lease-to-lease and basis they asking XXXX bad pricing, X% from rates and points and between X.X% of community of our now based leasing [ improvement points growth basis points from basis blended grow another X.X% XXXX. peak in is of earn-in on in growth resulting anticipated XXXX debt, XX occupancy, activity revenue contribution current upgrades XX of ] season,

growth be our across to with Diego the markets, growth, the We though strongest for all anticipate markets Florida, positive South Area expected San and continues Austin, optimistic we Bay a D.C. in recovery. while revenue Washington strong remain lag to

a year. great our thanks to My members team for all

ahead. approach dedication AIR's of one years. for the serving innovative and I forward to results made residents, drive look consistent our to our Your to XXXX best year business,

I'll the Investment call to Chief Josh? turn our Joshua now Minix, over Officer,

joint X units the were acquisitions Florida, X Raleigh-Durham, sale properties, operating of funded new where Bethesda, both X a assumption year. AIR our of our X grew we third located partnership ventures, issuance City by XXXX, In last and below-market Keith. New a of the York in added Beach, rate Edge acquisitions, and North debt. the with X in you, Miami Maryland The leverage-neutral in portfolio we Carolina, fixed this manner Thank XXXX in

growth. the any that expanding Edge We not on and were the of classes bodes for The in portfolio to have XX% 'XX did XX% well and which of allocation. allocation NOI XXXX, acquisitions future transaction AIR quarter Edge our accounted and 'XX for expand In our we portfolio of 'XX growth. AIR acquisition our closings of the portfolio 'XX remain and focused our fourth improving XX% the portfolio,

growth continue In of to portfolio AIR that improve allocates The for the work Edge and our store through 'XX. the properties. same to quality class capital activity 'XX joins XXXX, we transaction

transactions and execute replace to 'XX that expect Edge We AIR in to allocation. expand

Sunnybrook to Carolina in close North quarter. off great a are Raleigh, start We this in

maintain these to or JVs leverage-neutral fund property either in to acquisitions, outright sell we position. To expect a

investment the cost great focus created We our by on leveraging on to generate to capital Edge spread his newly Our outsized benefit our assets and as of generating his from team the a AIR expertise. positive improving to Keith portfolio philosophy returns advantage acquired apply and quality, remains same.

to Chief turn Paul Paul? the Beldin, Financial Officer. our With over that, I'll call

discuss strong our expectations brief sheet, is balance with for XXXX Today, sheet to stabilized nonrecourse, conclude a leverage or our positioned. Thank new mezzanine It XXXX exposure will you, low Josh. loan duration, year you The in I and on flexible AIR balance business short-term and X/X AIR's our comment and long has construction to results, loans and value, fixed about is XX% rentals. dividend. on full investment or when grade, rate, no is focused properties consider well

a NAV, significant we part to a proceeds a the company was to repurchases. To anticipate just have comfortable be balance through will fourth above liquidity allocate ending due million authorization. proceeds. The in of to sufficient expectation the this a share the support shares We To growth leverage quarter $XXX repurchase of balanced are of any portion our In allocation have repurchases year strength of result refinance to a accretive used discount leveraged the quarter a granted billion X% available under EBITDA trade maturing to debt raised past repurchase leverage we in to capital of was of anticipated X/XX abundant our extent a opportunistic million leverage Board turn sufficient continue our our in a that substantially we I XXXX that X of to activity of above about changes shares use approximately and XX% of years, all $XX leverage-neutral in capital at EBITDA AIR anticipated Directors the the manner. continue available, Fourth turn reduce $X a program. with is additional us absent new to NAV. the to at X/X discount expectations, XXXX. by sheet, share

have global joint access As we look to to our X fund through investors. Evergreen we powder with future dry company, large excellent to acquisitions grow the ventures

up Run full excludes Turning $X.XX periods XX% equal the which rate share, up of $X.XX from Pro midpoint AFFO share, guidance or X.X% are not Run X.X% cumulatively per of that was costs to equaled share. $X.XX XX% rate per anticipated cumulatively to and income recur the FFO was to XXXX per forma since since results. midpoint up XXXX. XXXX. future at from up XXXX our in and and FFO, year expectations

NOI anticipate Looking free and FFO than rate respectively. forward, cash grow will that and run flow AFFO at rate we a faster

be XXXX, we midpoint run at forward share from will look X.X% XXXX As up to the expect per AFFO XXXX. rate $X.XX, we

$X.XX, to from points expect FFO XX rate 'XX. be We basis run up

a growth per of comprised driven Expense AIR's We midpoint expected share X.X% by expect growth X.X% expense X by and growth operating portfolio the X play. but of CPI. Real estate year incremental values past to by from elevated X%. the are the XX% Real XX-year the increase Keith. trend growth X% of to approximately of $X.XX approximately negative difficult X.X%, expected points, contribution Estate XXXX of the controllable contrasting at rates. of result be NOI of forecast this result to is above taxes between with of at growth years, half rising a result forces about of during XXX previously growth particularly same-store of discussed revenue interest basis declined

While continued mitigated NOI challenging by it this assessments, is provides a positive when growth. argument healthy

exact the While which significantly of are carriers lower X rate properties I'll XX% some able our do of certain in property decade, increased also XXXX. after predict. insurance our losses to growth XXXX, the Despite that for a expenses more during the I subject address be In be growth, appealing costs to to our very uncertainty, by like approximately difficult know amount anticipate being specifically is we'll minimal rate March renewal. to I tendered all in and casualty active past for assessments. Insurance

also this same-store compares of acquired sold trades loss their paired properties to proceeds, be It the Please trades year. our cash we of with to from to $X.XX but anticipate don't, includes the acquisition to repurchases. flow. calculation accretive free of Outside in to to this portfolio, NOI $X.XX January the paired including in anticipated are properties accretive XXXX be the NOI from share XXXX, dilution, result later NOI The benefit Sunnybrook. a

the approximately X.X% increased to $X.XX in expense expense In understand the year-over-year. the the I at of $X.XX a $XX cost year. weighted of was average spend end or anticipated, so more to also details. to interest rates. increase interest is of higher million I interest due the our little at increase the We average from anticipate moment the than XXXX, X.X% beginning weighted by that me let year confusing diving interest increase into approximately

debt interest As the the were was expense, through which extended XX therefore, expected a but interest allocated than we a to be reflect XXXX the otherwise is in remainder our else the third would of earned and that which nor XXXX. result, have and rates rate acceleration be all are increase the was was interest order attributable to the activity, as benefited current from higher an swap The held acceleration swap effective XXXX future to either In income, cost. interest $X.X run rate XXXX interest income and million. quarter periods. Economically, the accelerating higher to market points harmed our fourth which of the offsets interest, of refinancing by to FFO equal, include occurred appropriately result as lower that XXXX, acceleration rates run interest basis expense we offset excluded duration AIR excluded bifurcated to expense quarter otherwise including income amounts result 'XX expense to other which swap from in FFO. The and marked income

are to that results a our our interest expense by $XXX.X annualized XXXX increase the million. expense expense, in need for proxy $XX you you of $X.X as annualizing million interest would an those million. This For reported fourth quarter of

adjustments then expense are There $XXX other for to arrive necessary quarter guide to fourth X at 'XX. million interest

Applying mix our effective the changes average increased quarter levels interest additional this $X.X basis points the XXXX our or of XX/XX rate First, by increases borrowings. by driven to interest increased the debt fourth our balance, by due million X debt to $X.XX. of in expense during increase

borrowings ROI capitalized $X.XX. is in improvements we of interest In whose of impact to approximately fund Second, consideration is after and included million $XX our property million upgrades $X interest to or anticipate any incremental expense guidance. other

other quick notes guidance. Few on

$X.XX anticipated the of run midpoint $X.XX is included pro results, of XXXX the are below per FFO be per above rate share at nonrecurring. of earnings $X.XX net FFO rate $X.XX our run XXXX share First, forma to which that

currently that third-party in income, asset remaining agreements. XXXX execution short $X.XX of income service is similar will earned and be of $X.XX the is anticipated an Second, duration about achieved property amount per to service be through to X The and earned anticipated that our is share, from be to which XXXX. in-place management

Third, as paired with partnership market being we indicates, our in the venture active partners. in guidance trades and through anticipate joint transaction our

the of and we're not providing these timing, synergies activities given volume operating impact to on However, guidance surrounding plans of our XXXX capital, results. cost transactions, of the additional

Fourth, quarterly anticipated leveraged year EBITDA approximately at based timing EBITDA X:X. will and likely transactions during of changes fluctuate the XXXX in on is the in that

share. current the now call dividend Please X to $X.XX will Directors the annualized of X.X% cash Board [indiscernible] for quarterly basis, questions your per that, limit on based AIR an the dividend total the we share of a Finally, declared reflects open yield price. With On questions. of a

turn question. to you it I'll for over Operator, the first

from your of And Instructions] comes Citi. from Wolfe question the [Operator first line Eric

did was your sort that on refinancing you amounts? was? exactly of sort due to the the was to mentioned the Where of increase to go $X.XX What interest from just that activity. backing million of detail if you to just like in give You get how from? $X increase just $X.XX. I'm the And XQ were kind rates wondering and I extra could that what that more expense.

look is this Eric, be And to, direct X I'd there'll you Yes, at to that. ways Paul.

the the the average interest rate the compare first in second would weighted be interest As to easiest and the to as quarter. and and quarters average rate Schedule probably our quickest way fourth disclosed X first, in for weighted

do basis points. If an increase see that, XX about you you'll of

debt $X that's the about that balance at If year-end, to And to $X.X you $X.XX. our you XX apply million. get basis points million

something it's the I'm increase. what quarter. did you what XX guess the drove Meaning like like sounds that increase. asking, I third It drove Sure. basis but in

basis it So drove increase. point that third in quarter the what that XX was

$XXX were million We interest average was million had were about an XXXX extension loans that refinance X.X%, Yes. X previously with that X%, rate that of and and coming X.X%. $XXX due X-year XXXX otherwise term of X.X%. and duration The of that about rate There before consideration to on in items. debt effective refinanced options extend debt X-year of

balance on for cost one interest, joint rate second you and that partner, of rates, a average we venture our of debt focus in joint interest The we removing solely that the transaction. was did that -- thing in of inflated portfolio. the of to our so impact just lower lower-than-market at if paid the reduced venture were the But transactions, the which result debt assumed

just question. last then And Okay.

Your XQ bridge higher show the impact didn't any guidance sort interest of expense. from

something this the think that because is through there's the first would second fourth Now just it normal seems to but -- trying would in kicking in ends offsetting year, a adjustment it later level in XXXX. like up go I the understand in made XXXX, more I of quarter understand you to quarter? quarter Just that the

don't and walking the results the you it match on better our Supplemental in bit maturities $X.XXX quarter Eric, And a in loans. a of our the top about to about talked a of you XQ little first give first in to of is quarter. of see term our we our so question. reason the fixing revolver that results hedges interest good X, the us adjusting or that's that pop also our to $X.XX, was effect The noted rates bridge Schedule probably net

see and a on QX the in why beyond. and consistent you'll basis, then versus XQ XQ So that's increase we're

Capital Kim And your Markets. BMO from the from of John next line question comes

of takeaways you've same-store your that quarter last than the the growing was it pool. rest platform, your of faster significantly once on the be would it's recent from One acquisitions had,

XXXX estate. There's of you're class real only remainder the slowed I as comment assets. what some that the focus in XXXX, some realize your that, of on last -- it's and just X the you well on for I year? growth wanted The that to quarter. considerably volatility class probably -- since but other So can of as the expecting portfolio slowdown

add if and wants start see I'll Keith anything. to John,

revaluation what a of of Class tax -- fourth 'XX, impact was that the on XXXX. the in occurred seeing Specifically you're is that of quarter

you'd is what's that's, that NOI add tax driving in incremental expense slowdown side. on growth. so revenue Keith, the the anything And

other that about John, of the portfolio thing just NOI that -- Class the 'XX growth basically seeing going the I is we're look we to that think to, double point be can same-store I of forward. in that would is -- what as our we we see

we repositioning things whole things transition, combination early a it's that the we how some getting degree, year the a in communities, into repopulating a there that So residents then our start go hold. And the the through. in in AIR and of days and different so, of about are or we of some could staff of volatility parts we year stabilization those or the of for early Edge taking be series

if see what's those us remind you estate you real growth group. from can other assets? at And in this the double-digit bucket X And

the interest the that that included John, the Aimco of separation X assets are upon completion redevelopment out held estate value bought improvements. real their completed are that it, of the and we the on properties in and the leasehold redevelopment X work, a Aimco we from

And of in so the that XXXX. occurred summer

those will pool in included so that in assets XXXX. our same-store And be

As team the same-store properties that were lease-up the expected anticipate the the relative growth those and to to portfolio Keith and involved have rate far population because a fairly from whole, population great with his X. rate same-store day similar be as operating legacy in we'd been to growth as

second be peers. How -- on that. mentioned that My And remarks, you're clarify AIR Great. versus your wanted this how is I your you you is performing confident Okay. for opening perform? favorably Terry. question will to just you On year define

the most the sheet thank forth. credit a retention, customers, the higher bigger very is would course, the things off-balance rents, higher It's question, is look And happening higher faster of a average very are at quality my That of I in are rates, so and workforce. margins, increased what that greater addressed have growth prepared which big stable portfolio, asset, AIR productive remarks, margins, you at important that is good picture, much. to Well, John.

Aimco. considerable will number, acceleration the in cash the that, had which free continues in on look degree. it'll focus things But up income XXXX, show are so see In greater and of it, up would XXXX XXXX, of when those grow and flow at growth called at we comfortably. out, end from to we it nonrecurring we FFO the AFFO divorce the recurring show a because market of back the and So

I think I by again, capital. We we venture scale, were kindness growth our our thing in to paralyzed reward users everything XXXX, us were real low were in -- at our volume that, assets see very to In future. that estate to transactions to is capital want continues. discounts going emphasize with a and of and be lost. gets also to one standoff in pricing of participate, markets largely we successful between increased to of the management. because are of using the that way in the the joint properties under partners do that able that considerable And providers buy

lower already G&A, is effective still. net gets low, our which So

cost proceeds, the think I of the on we going when satisfied outcome. to of just focus with the just proceeds So we're use not and be

think mentioned was that. of part you I FFO

Just clarify. wanted to

and would to direct also FFO people I course, of think I, AFFO.

to think and discount values, growth consider I net it's important rates. both which asset

their growth the a we'll both [indiscernible] to than favorably will the measure higher exposures value will think have 'XX do other compare I enterprise, loan different today, of rate which supply, is and different fine. to be going different exposures have to will are exposures that new and we're net-net, in development our predict to wonderful very activities. portfolios, peers companies who the think of significantly have foreclosures such I different And in it and face mezzanine I challenges to but

from Rob comes Janney. of question the line next your And from Stevenson

there, just from you systems what between growth piggybacking comments and you Terry, about new of rent guess of of I terms peers. here. off telling lease Can talk terms your goes difference you in your are in

for magnitude be you're short back and now in very signed given peers going on And it able Are than at period time to all does today? to any 'XX, it's first on of much you in lease what point January. leases by negative positive almost were You and smaller new a turn of positive rates in stay quarter? your negative seeing a

optimistic get occupancy we're as point just us setting you not as feeling up very at it's and The today here, go thanks. It Rob, a out for facts into we look, a are Look, guidance. the strong our to puts our optimism. in our into XX.X% would is blend implied new The us X% year, XX, a and X% revenue acceleration that renewal. X.X X.X% lease spring season.

that's in. So have we what essentially

today, When we it, back, is a pre-pandemic kind seen. out -- We it, get known that today have acceleration. a more the to more look April seeing already starting the have we're are of volumes X% and market will we're seeing season into, let's call but be and would growth say pandemic. we This is we're peak acceleration prior increasing is what coming of the and realize of into when will already in call being XXXX, we happen between type holidays winter to months. XXXX July what I this from that And so the probably but will next, important of

work be but good where feeling more to so we're about we're And done, at.

then, from helpful. be damage would the something it Southern Or flood? Paul, extreme That's recent has are And had any your Okay. if that material specifically portfolio self-insured. your incurred that weather California insured California and is assets for

of the dive it part and the first particular who over the runs details. to program Patti our of some handle into question insurance Shwayder, I'll turn Rob, to

no, damage, any nothing material material. As as far

today. but spots, roofs would we seen expect, less have some leaky what what of upon you which intrusion, water We the are than costs in $X.X know based million

flood for country. the these we're perils And other all in and yes, insured around in properties,

the from question line next your comes Haendel And of St.

Mizuho. Juste from

have think certainly position at the I mentioned transact, but you earlier to able you be current to. in plans that moment to don't a Terry, you're that

IRRs out like there maybe Sunbelt, in get active and more rate market where coastal, you we be see for they cap your any what terms where you seeing today potentially I'm So particular to more curious get to need you'd And of highlight? could to active?

much. you Thank very

about people have we talking more and much the at very to alternatives. like to and capital to time make That see pointing something what few I -- you're when opportunities is real. a is very have sellers benefit access today that it worth who think I that we can have

specific he's turn and Josh and eager head nodding Josh? For to his you like over what there. to tell it details, I'd go he's seeing to out because

you, in Yes. sellers Haendel. evaluating Terry. Thank terms in active our and Thank markets. market in very of potential stocking opportunities you, We're with the

for might among we sellers activities We transaction are in off-market and seeing likely see measured transactions. good chatter by broker in to our a what approaches a as proxy typical pickup listings

terms our I sellers X. our cap then basis Most bit to outsized cost capital cost rate on Edge a returns, X that of X to where a seeing of with We be buyers apply or to capital. for high points of to at top our are establishing have spread we of generate and and are transactions we'll returns, the low a executing growth assets of quality opportunity improve the ultimately XXX more by to for portfolio and of would the spread. very generate both end AIR still and be certainly want opportunity buying most the In to and something shooting of we're rate, think focused shooting a

for Got it. guess it. you. maybe one Keith, Got I

growth all I about concerned flat, might you're for I situation in think next plus I'm rate lease impact that and in renewals a to to effectively think, X%. portfolio you year kind the curious I your ability of of think, kind outlined, with year? market at that creating next renewals guide year, push the game how if this for

clarification, that's between guidance. in for and we the market season have growth So now peak Haendel, just implied X%

are have see optimism some that. those January around clear be have -- lease any or always and get numbers. a start that worse that . I concern we day, in know I because it than time. But end already put about to at So seeing the we to better that, just condition. we do don't off it terminologies will about bit a could I we're little -- in there particular the points seeing our of that, gain be

that earn-in our deletes up that change -- attention And today, apartments more to we the beyond. point XX -- All and blend have that will those and rent to really, with earned gain 'XX things your then leases. would X.X% loss, our X.X% put is we the in the XXXX. if realities, so into which where and -- will importantly, that become I'd plan through down And and anticipate, we those us have

maybe Got mentioned it. improvement, talk Expectations it. sure outlined for number in debt expenses Got into lastly, think outlook as And well. about it, I the And you the okay. how year, I'm is, turnover that's that sure for not reflected not how the you this if your plays but what the guide. bad then

out I percent Haendel, the debt this debt. is Paul. as I'll think X%. a start pandemic. in of coming to record of X.X%. then a it track with bad XX back actually was I XXXX, had to If basis we've our XXXX, bad In In good improved bad it very debt, points. And to revenues go improved XXXX,

we think improvement. in But improvement XXXX. Keith bps continued bank as basis improvement. expect a mentioned another can XX remarks, expect XX don't his do on I about we point in we So

a pieces. couple of just add I'll Haendel,

a of retention. First your add circle to And the question things couple second debt. from inside off, about on I'll back bad I'll piece, then the

of one our I characteristic things is unique sort bad our debt think just is in being the that process. of

and the short-term we time. put that to that went of selection those over but renters, of stay with us folks that long around people we resident some are importantly, process And more periods emphasis not our

that But about your retention. that a the get resident then our question centrally. of rent will collect secondarily, is into and This dovetail process we selection right through

so over done individuals, lease they're trying experts, rent decades And here of here professionals manage a person collection managers But about just you're this multiple talked doing all work, we collecting [ in had and have them it have rent out if had a centralized And that team. XX coach what bill we've before. community know you for have we this. them of if is and up ], typically, figure would Denver, has doing to that's might don't -- about who's XXX something you I XXX and and what

courts get And through up XX and when bad we to X.X% has as lot bit the sort ], a is The at of where that 'XX, abatement bps one a of out at of tell just bad very we in flying do. debt [ things been you debt to number to is, so slower look specific the went Paul have X% little the you there's this how would walk coming improved I pandemic.

So about we'll in the see future, but our how process. that optimistic plays out we're

not same. guidance we reported would I retention, XX.X%, which of be if to creating not avoiding if of we've and when more We we XX similar, bottom costs the day, our single line. something a essentially strong number to every in have the Going emphasis implied And we that just around better, less that contribution the were the longer-staying total ever better. our is turnover, anticipate what residents, marked. at very I would best say, have

the in, our I X Keith of -- points. I want it's if Terry. on emphasize could A Part customer. that of Haendel, creditworthiness join just it is part to touched

And a people have paying so of we track debt their we're bills. just less exposed record have because bad to who

The second Paul. so good don't operating optimism have accounting make reverse want bouquet those accruals. the on our is were in where based is news. I any to a did and pandemic. not accruals disciplined very We we -- don't we Because anything we're basically to throw news to -- during We

fourth And for so quarter debt our bad all flat, the was X.

out future. to trying say X in recoveries, AIR those to I'm cash. for second, more that likely not about the likely bad the thinking is not want One the X is going that then have accounting And the can you to be customer of to year. use much much is net-net debt. things its But connected less to So point we're to just AIR I that. say

line your And Rich Wedbush. from of question from comes Anderson next the

help, but real above lease is of new can't way operators your I X.X% your really So good I'm growth These peers. above all are estate. right? multifamily a peers, earn-in cynic, X% is

it need particularly and is a you luck element getting But believer place is an lot here, headwinds of so in but from of supply not where the a way. just Sun course, derogatory of positioned mind, in everybody's on is Are there others Belt. be a in yourselves finding to -- -- a are And I I supply. new don't that mean

causing all you're besides what relative is else that from that outsized the of to of of level -- fact at growth What sort job same-store and good sort for your everybody stuff, a this perspective? relative you guys

my X really it. and are you'd X Rich, they're I different, things. out. but dear very headline got the questions. great friend, as to -- measurable to call really can But look usual, attach and and it's you There And forward you've they're them

is first The one operations.

to residents. behave We more have so as it's be that, a customer we likely to better more a likely other I said, neighbor expect, the credit, to way has the just good

We renewal of lower have advantages. business that's -- at more our business new are pricing. those lease just do and result, at as our we of a And higher less structural pricing --

We have that great to that a we give of and control is record for cost superior, credit Keith.

have the hundreds have just and done teammates are around that's of and who's highly to a productive I in job stable. But that here Matt and highly country and good Holmes, Keith really that, room the say

see They're stability. job and compensated. high turnover of they what the important the well and satisfaction, do and is good operations teammate of -- and one tenant the is job teammates our better engagement a you than So great metrics stickiness high most They've about peers.

So that's one.

we're go forth. but to very with That is concentration times moment. it's XX difficult [ the California that that top XX ]. outperformance a did great at goes back and composition. which one, and is portfolio political see when pays of investor by you'll That levered for a was concentrated in off, years, a there wins And or XX in intentional, second it The economic exercise subject also because changes terrific

pandemic. in Belt migration. great concentrated did the markets can this see investors in during influx you had When of You Sun

We're more to those risks. benefits to to against we'd Eddie. love want we that, avoid balanced of to the but those want say have We Steady -- be

And than which Philadelphia different so lower decisions -- but made of from we've risk. made decisions minuses, about ends peers, independent than that pluses were were which provides a diversification, or that's peers. They part different with both which about Florida have up differentiation decisions. We made that results

there. we how get that's so And

right. All

a rate a unrelated, FFO a have like entirely is there and been question a but about just you Why core rate run your hole in same swap since of for but run FFO two, people. rid less thinking why the hear Is another misunderstanding core in on and I'd It's of that speaking you as to get it we it's about how gain XXXX, people were comments I way? little then lot didn't growing didn't FFO put there XXXX. handle there Second those structural a reason just -- definition thing And too. head, -- lot self-serving, to in is now FFO. this the can FFO need would love

And one -- we the that were we in certainly, Rich, transparent. run I in the let it my not income, are which communicate, I a can receiving we think and AIR to cash lot following separation be 'XX real to completely XXXX, was rate income FFO, wanted event. that's you know. To 'XX values know originated that onetime original -- was the in culture the was Aimco what what best I -- of money that a was

been swaps call ask but to knew part going were of recurring, either we concern, that third out. had wanted We need to year a were market a want them these to market or the didn't take of but isn't. of did -- the the profitability, market we definition had the one We lesser we -- again thinking nonrecurring. We're that we just see it one with And is confuse we confused but burden we to -- these had part let accelerated. last to confused, the

life that. do the of what And I are we think transparent and just find that's people so upsetting. completely in sometimes used do. And volatility we that why to aren't we But

right, that they as think exposure, have nonrecurring every you're XXXX, will year. I have that but be likely income expenses we and Hopefully, are won't it's that increasingly unpredictable in material. we won't

Your Instructions] comes [Operator next Advisors. the from of question Green Pawlowski John line from Street

is I expecting just One, year process. the growth per I X think have this single-digit underwriting year. last Raleigh annum I questions few and so Josh, market, understand the quarters, high acquisitions the next supply on recent in

than up. So it more are going to rents be down feels like likely

do pushing So Raleigh? in you how chips get comfortable

really be would high. months the door, per acquisition. $X,XXX really, ago, it's on Bethesda rents, question $XXX,XXX Second Several

do comfortable longer IRRs how pushing rents you're over to you get sitting? a so these double-digit to And time of get period

to really Thank love order. a have that in The and market long-term the cost. good there. across replacement favorable are long-term you, to looking has And Both part balance intentional the Taking a of questions. we a been at this outlook taking our law Raleigh, portfolio rule John. factors With reasons We're to them discounts diversification the portfolio, probably obvious. of for and us attractive for of all strategy. plan

in were to We and the think us this did underwriting purchase that relying benefited Edge, opportunity we're anyone, a timing secret that to as the execution on generate well generate took time the in Keith, work not we market returns, an but properties, into growth quite we're to age supply. not will That's the we think which where we generate a that on supply. buyers by to the those income basis on had will We all underwrite returns. to allow properties. the attractive was the account those relying the And unusually really well with aware. AIR and And greatly get internal particular

extensive at. D.C. greater replacement costs believe aware the very we're the expensive space. purchases both Following that And there, buy to It's asset advantage I'm a of in to and under up a It the building that, strategic also Metro. be it on we in and bought building development will with and highest excited that quality an beyond building Bethesda, an is about. the live long-term

And I'll Josh's John, just to add add, comments. I might, if

exactly cost and it. great buying as filing, show a at of a which we'll underwrote to miss had SEC on you in how this to Bethesda, the replacement. And don't Raleigh, tell we've through discount we to as detail, walk show Just basis

on one follow-up Raleigh. the Maybe Okay.

pickup. [ going It to where want rents So cap be a you what's a a massive in over from frame however growth assumption], exit the cap a long-term stagnant XX% rate IRR. to seems market are get like to NOI to rate assumption, it, mid-X%

market question. Yes. No, that's his and driven just Keith not team, is good really It pickup, riding by the wave. and a massive by

provides a you've increase And at where level of yield. the the nuances roughly expect that and looking same-store in-place here. rate significant Keith in is of that seen And when really then at taking happens operates, usual previous have in its we're it what looking our we're So cap the portfolios property, double the at growth. we that acquisition efficiency. we And the

That's And market-driven Keith driven growth. and AIR growth. that isn't

So that's driver. the biggest

cap exit of rates, In cap today. we're terms exiting are generally roughly where rates

we're rates not So cap not compress time. assuming -- we're the over counting

Terry, sheet. the more, One Okay. on balance

target. to few So years. there's if had Xx worried the opportunities been a opportunities, I know risk, up. when leverage good play I'm around mid-Xx you spin, come initially a missed some And you offense, resistance did there mark last is but sheet the about inability not balance

the Band-Aid what off all prompted with little guess bit this debt. to to ripping guys activity not because scrambling I has you a getting is, to I it lower and So fix derivative the struggle leverage

do maybe simpler this why so just appreciated. to would absolute life activity comments and debt. much keep of fix And having fashioned? all reduce and Any to keep versus Well, out not level old not why go derivative leverage really life the the there be

gives discount us it you more the one -- of my analysts Sure, John. for I of that of in -- just or our . much first, that is debt mean, as X/X debt XX% know, put. nonrecourse. burden And favorite is a

it having an question thing is thing, by it. when you Having that opportunity a is itself good sterile. of it's a but Second, use good the

time there's in prices blood is the it are when when low. So streets, to use the

And when this time, to to the so opportunity. say, do at everything miss another harmonious to waiting is is

because that our generally advantage leverage we So the of the and something to that stay value now. we're something that opportunity is take to to what's business apartments for for compared that think the the class -- comparison can low do to asset able paid do been it to by structural creates by buy we've a shareholders. fact is embrace I advantage And within and certainly model

remarks. turn at And there it questions further back are time. Considine, to CEO, closing for Terry like this would to I no

I and Well, on about much, of your in AIR. all the future. thank to appreciate call. excited you I'm very the interest thanks still you

You forward to have questions, any number at us. please seeing you well. Bye. long conferences. And Be of to a of look feel free call soon

ladies today's And presenters. call. this gentlemen, you, Thank you concludes Thank conference and for participating.

You may disconnect. now