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Apartment Income REIT Corp AIRC

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Apartment Income REIT Sees Large Jump in Occupancy in Q3; Announces Several Large Dispositions

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

No-moat Apartment Income REIT reported third-quarter results that were ahead of our expectations, though we don’t anticipate any material changes to our $47.50 fair value estimate. Same-store occupancy improved 120 basis points sequentially, well ahead of our estimate of a 50-basis-point increase over the second quarter. Still, we assume that occupancy will eventually reach 97.4%, so the large occupancy gain probably means higher revenue for 2021 and 2022 but doesn't change our long-term outlook. Same-store rate growth was up 2.2% year over year, slightly ahead of our estimate of 1.1% growth. Combined, AIRC produced same-store revenue growth of 6.0% in the third quarter. Meanwhile, same-store operating expenses fell 0.6% due to lower payroll and advertising costs, leading to same-store net operating income growth of 7.9%, slightly ahead of our estimate of 5.1% growth. As a result, AIRC reported pro forma funds from operations of $0.56 in the third quarter, $0.04 above the second quarter.

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Company Profile

Business Description

Apartment Investment and Management Co. owns a portfolio of 96 apartment communities with over 26,000 units. The company focuses on owning large, high-quality properties in the urban and suburban submarkets of Boston, Denver, Los Angeles, Miami, Philadelphia, San Diego, San Francisco, and Washington, D.C.

Contact
4582 South Ulster Street, Suite 1700
Denver, CO, 80237
T +1 303 757-8101
Sector Real Estate
Industry REIT - Residential
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 950