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
Full Year 2022 Guidance: Q1 2022 Update
2022 Pro Forma Run Rate & 2023 FFO In Context
Pro Forma Run Rate guidance of $2.19 FFO per share in 2022 as if Q1 2022 announced
transactions were executed on 12/31/2021
2H 2022 FFO guidance of $1.16 at the midpoint includes full impact of announced
transaction activity (including $500M of acquisition guidance, which includes $283M
announced herein)
2H 2022 annualized of $2.32 provides framework by which 2023 may be underwritten
2H 2022 SSNOI estimated to be ~$20-25M greater than 1H 2022
•
Incremental SSNOI, at the midpoint, bridges between AIR's guidance on 2022 Pro Forma
Run Rate FFO of $2.19 and 2H 2022 FFO annualized of $2.32
Incremental 2023 SSNOI growth may be derived from:
•
•
Earn in of market rental rates
Embedded within 2022 guidance is an anticipated year-end loss-to-lease of ~7-9%
AIR would expect ~40% of loss-to-lease to earn in to 2023 revenue growth if market
rents are unchanged with the remainder in 2024
Further revenue growth may be achieved through higher occupancy or lower bad debt
Expense growth may somewhat offset the above
Every 100 bps of SSNOI growth increases FFO per share by ~$0.025
Includes $0.14 per
share from expected
Underwriting Future FFO Growth
Same Store
Revenue
Same Store
Operating
Expense
External
Growth
Property
Management
Lease Income
.
$2.41
prepayment penalty
$1.16
$0.57
$0.68
Q1 2022
FFO per Share
(Actual)
Q2 2022
FFO per Share
(Midpoint)
G&A Expense
Interest
Expense
2H 2022
FFO per Share
(Midpoint)
2022 FFO
per Share
(Midpoint)
•
Driven by ability to capture
submarket demand and loss-to-
lease, while mitigating other factors
(such as bad debt)
Capital enhancements drive
additional growth (subject to IRR
hurdles)
Track record of productivity in
maintaining flat to declining
controllable operating expense
historically
External growth subject to disciplined
capital allocation approach
Expected to benefit from the AIR Edge
with NOI growth at ~2-3x market
levels during the first ~2-4 years of
ownership
Net expense expected to decline with
growth
Expected to convert into Same Store
NOI upon leasehold repurchase
Future projects expected to include
similar lease support through
redevelopment period
Growth limited with 15 bps of GAV
cap backstopped by CEO
Expected ~3.6% weighted average
fixed cost from 2H 2022 forward
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