AIR Communities Announces two Joint Ventures with a Value of $1.2 Billion; Proceeds to be used to Reduce Indebtedness and Fund Accretive Acquisitions
June 06 2023 - 9:03AM
Business Wire
Apartment Income REIT Corp. (NYSE: AIRC) (“AIR”) announced today
joint ventures, with two of the world’s largest real estate
investors, to recapitalize 11 properties valued at an aggregate of
$1.2 billion based on a trailing twelve-month NOI cap rate of 5.6%.
AIR will receive $600 million in proceeds (cash and debt relief),
as well as asset and property management fees expected to
contribute $2.5 million in annual margin. Upon completion of the
transactions, AIR total indebtedness to ebitda will be less than
6:1, providing capacity for accretive acquisitions.
In the first joint venture, AIR will own a 53% interest in the
partnership and a global institutional investor will own 47%. The
portfolio is comprised of ten properties in AIR’s Same Store
portfolio, with 3,093 apartment homes with monthly revenue
averaging $2,457, located in Philadelphia, Denver, San Diego, South
Florida, and Washington DC.
In the second joint venture, AIR will own a 30% interest in the
partnership and a global asset manager will own 70%, of Huntington
Gateway, a 443-unit property located in Alexandria, Virginia.
In both ventures, AIR will continue to be responsible for
property management and asset management, earning fees and enjoying
the opportunity to earn success-based promotes.
Each partner has also committed to investing alongside AIR in
future acquisitions, one focusing on core opportunities and the
second focusing on value-add opportunities.
Terry Considine, AIR Chief Executive Officer, comments: “I thank
AIR’s new partners for their investments and confidence in AIR. It
is a compliment to the entire AIR team that two of the world’s
largest and most respected real estate investors recognize the
excellence of AIR’s property management and AIR’s ability to source
accretive transactions. We see great opportunity in today’s markets
to make investments accretive to FFO while maintaining total
indebtedness to ebitda at less than 6:1.”
Paul Beldin, Chief Financial Officer of AIR, comments: “AIR’s
total indebtedness to ebitda was temporarily elevated at the end of
our first quarter due to the January 2023 acquisition of Southgate
Towers. These transactions reduce total indebtedness to within our
targeted range and were contemplated in AIR’s full year FFO
guidance. They are therefore neutral to expectations for the
year.”
The joint venture transactions are subject to customary closing
conditions and are expected to close during the second quarter,
with the exception of two properties which require regulatory
approvals, expected before year-end.
Citigroup is the exclusive financial advisor to AIR on the joint
venture with the global institutional investor.
About AIR Communities
Apartment Income REIT Corp. (NYSE: AIRC) is a publicly traded,
self-administered real estate investment trust (“REIT”). AIR’s
portfolio comprises 75 communities totaling 25,795 apartment homes
located in 10 states and the District of Columbia. AIR offers a
simple, predictable business model with focus on what we call the
AIR Edge, the cumulative result of our focus on resident selection,
satisfaction, and retention, as well as relentless innovation in
delivering best-in-class property management. The AIR Edge is a
durable operating advantage in driving organic growth, as well as
making possible the opportunity for excess returns for properties
new to AIR’s platform. For additional information, please visit
aircommunities.com.
Forward Looking Statements
This document contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
include all statements that are not historical statements of fact
and those regarding our intent, belief, or expectations.
Words such as “anticipate(s),” “expect(s),” “intend(s),”
“plan(s),” “believe(s),” “plan(s),” “may,” “will,” “would,”
“could,” “should,” “seek(s),” “forecast(s),” and similar
expressions, or the negative of these terms, are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance, condition or results, and involve
a number of known and unknown risks, uncertainties, assumptions and
other important factors, among others, that may affect actual
results or outcomes include.
Although we believe that the assumptions underlying the
forward-looking statements, which are based on management’s
expectations and estimates, are reasonable, we can give no
assurance that our expectations will be attained. These
forward-looking statements reflect management’s judgment as of this
date, and we assume no obligation to revise or update them to
reflect future events or circumstances. We caution investors not to
place undue reliance on any such forward-looking statements.
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Matthew O’Grady Senior Vice President, Capital Markets (303)
691-4566
Mary Jensen Head of Investor Relations (303) 691-4349
investors@aircommunities.com
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