Apartment Investment and Management Company (Aimco) — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This combined filing covers Aimco and Aimco OP L.P.; Aimco conducts its business through the Operating Partnership. Aimco is a multifamily-focused REIT pursuing value-add and development investments alongside stabilized properties.
Business context and portfolio
- At year-end, the operating portfolio comprised 26 apartment communities: 22 consolidated and four unconsolidated. The company also owned one commercial office building.
- The development and redevelopment segment included 11 properties and land opportunities. Aimco reported a pipeline of approximately 13 million gross square feet in Southeast Florida, the Washington, D.C. area, and Colorado’s Front Range.
- Aimco owned 92.4% of the Operating Partnership’s legal common-unit interest and 94.8% of its economic interest.
Financial and operating performance
| Metric | FY 2023 | FY 2022 |
|---|---|---|
| Rental and other property revenue | $187.0 million | $190.3 million |
| Net income (loss) | $(157.3) million | $92.2 million |
| Net income (loss) attributable to Aimco common stockholders | $(166.2) million | $75.7 million |
| Diluted earnings (loss) per share | $(1.16) | $0.49 |
| Net cash provided by operating activities | $50.5 million | $204.2 million |
| Net cash used in investing activities | $(260.4) million | $(120.8) million |
| Net cash provided by (used in) financing activities | $119.4 million | $(98.3) million |
- Stabilized Operating segment revenue was $149.8 million, up 8.4%; proportionate NOI was $105.7 million, up 9.3%. Average monthly revenue per apartment home rose $194 to $2,305, while average daily occupancy fell 70 basis points to 96.7%. Management reported NOI margin expansion of 80 basis points for 2023.
- Adjusted EBITDAre, a company-defined non-GAAP measure, was $65.8 million versus $58.0 million. EBITDAre was negative $70.7 million versus negative $39.6 million.
- Year-end total indebtedness was $1.148 billion: $852.5 million of non-recourse property debt and $309.5 million of construction loans. Cash and cash equivalents were $122.6 million; restricted cash was $16.7 million. Including $150 million available under the revolver, reported liquidity was $289.3 million.
Material changes and unusual items
- The net loss included a $158.0 million non-cash impairment that reduced the Parkmerced mezzanine investment’s carrying value to zero. Aimco said repayment remains uncertain; the related purchaser’s option to acquire the remaining 80% expired in fourth-quarter 2023.
- FY 2022 results included $207.0 million of lease-modification income and $175.9 million of real-estate disposition gains. FY 2023 included $8.0 million of disposition gains and no lease-modification income; these differences materially affected the year-over-year earnings comparison.
- Operating cash flow fell $153.8 million year over year, mainly because 2022 included lease-termination cash proceeds, alongside lower NOI from properties sold and timing effects. Capital expenditures were $272.5 million in 2023.
- Aimco repurchased approximately 6.2 million shares during 2023 for about $45.3 million at a weighted-average $7.33 per share. It paid no common dividend in 2023 and says it does not presently intend to pay a regular quarterly cash dividend, while retaining the ability to make REIT-related or other distributions.
Outlook, management commentary, and risks
- Management said liquidity was sufficient for operating needs over the next 12 months. The $150 million secured revolving credit facility matures in December 2024, before a one-year extension option. Aimco reported no revolver borrowings at year-end and compliance with its covenants.
- Approximately 90% of non-recourse property debt was fixed-rate; the remaining variable-rate property debt was hedged. Construction loans totaled $309.5 million, with scheduled maturities of $100.7 million in 2024 and $202.3 million in 2025, before extension options. Management reported $124.2 million undrawn on construction loans against $63.8 million of remaining construction-related commitments.
- Management reported four active development and redevelopment projects on track for budget, lease-up metrics, and current market valuations. Projects include Strathmore Square, Upton Place, Oak Shore, The Hamilton, and the completed Benson Hotel and Faculty Club. The filing describes roughly $580 million of projects as on track for construction completion in 2024.
- Material risks include refinancing and interest-rate exposure; construction cost, timing, entitlement, and lease-up risks; economic, inflation, insurance, and regional real-estate conditions; climate and natural disasters; environmental liabilities; cybersecurity and privacy; and implementation of a new ERP system, which is continuing through 2024. Management reported that no known cybersecurity threat had materially affected the company.
- Ernst & Young issued unqualified opinions on the financial statements and internal control over financial reporting. Management also concluded disclosure controls and internal controls were effective at year-end.
Most important facts for investors to verify
- Parkmerced loan recovery prospects, the zero-carrying-value impairment, and the accounting treatment of the $31.0 million participation liability.
- Debt maturity and extension terms, especially the December 2024 revolver and 2024–2025 construction-loan maturities, plus covenant headroom and refinancing availability.
- Whether development budgets, delivery schedules, occupancy, and rents meet underwriting, and whether committed financing covers remaining project costs.
- The sustainability of operating cash flow relative to substantial capital spending, share repurchases, and any future distributions.
- The assumptions underlying non-GAAP Adjusted EBITDAre and reported portfolio NOI and margin growth, including their reconciliations to GAAP results.