Strategies for Multi-Family Real Estate Capital Allocation
AIR
COMMUNITIES
The most efficient and most effective way to allocate capital to multi-family real estate
4 Investment results demonstrates the value of the AIR Edge
Acquisitions consistently underwritten to drive significant near-term NOI growth
•
-
Class of 2021 (1) acquisitions outperforming initial underwriting
Execution of business plans driven by the AIR Edge can generate a ~30% uplift in property value (2)
Acquisition Underwriting: Class of 2021(1)(3)
Acquisition Underwriting: Class of 2022(1)(3)
5.6%
5.5%
5.5%
5.2%
4.2%
4.1%
4.1%
3.8%
.
Key Growth Drivers:
• Bringing rents in line with
submarket demand
Implementation of "good
neighbor" policies and improved
resident selection
.
Physical upgrades and
Year 1
Year 3
Year 1
Year 3
City Center
DC Portfolio
Year 1 Year 3
Coconut Point
Year 1 Year 3
+22%
+37%
+44%
NOI Growth (%)
Underwritten
Unlevered IRR(4)
9%
9%
8%
Q1 2022 blended lease growth of 24.0% for
the Class of 2021 acquisitions compares to
14.4% for AIR's Same Store portfolio
introduction of new amenities
• AIR platform onboarding
• Culture
.
Year 1
Biscayne Bay
Year 3
Staffing model and work flow
both onsite and corporate HQ
• Deployment of technology suite
+34%
8%
(1)
Class of 2021 acquisitions defined as City Center on 7th, North Park, Huntington Gateway, Vaughn Place, and Residences at Capital Crescent Trail. Class of 2022 acquisitions defined as the Reserve at
Coconut Point and Watermarc at Biscayne Bay.
(2) Property value assumed at Year 1 NOI cap rate based on Year 3 NOI, net of capital.
(3)
(4)
Reflects underwritten Year 1 and Year 3 normalized NOI yield for each respective acquisition inclusive of incremental capital enhancement spend.
Underwritten IRR assumes a 10-year hold period.
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