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Aimco's (AIV) Q2 FFO Surpasses, Revenues Miss Estimates

Apartment Investment and Management Company AIV, better known as Aimco, reported second-quarter 2020 pro-forma funds from operations (FFO) of 63 cents per share, surpassing the Zacks Consensus Estimate of 61 cents. Also, the figure improved 5% from the year-ago quarter’s 60 cents.

Quarterly results benefited from solid liquidity position and substantial rent collections. However, declining occupancy and same-store revenues remain headwinds.

Notably, rental and other property revenues of $218.8 million in the reported quarter missed the Zacks Consensus Estimate of $219.8 million. Further, the revenue figure comes in 2.4% lower than the prior-year quarter’s $224.2 million.

In the second quarter, the company collected 97.2% of its total residential rents. Moreover, in July, the company collected 95.8% of its total residential rents.

Quarter in Detail

Same-store revenues (before utility reimbursements) slid 1.1% year over year to $180.8 million, while expenses (net of utility reimbursements) edged down 0.4% to $48.7 million. Consequently, same-store NOI declined 1.4% year over year to $132.1 million.

Same-store average daily occupancy declined 140 basis points (bps) year over year to 95.5%. Rental rates on new leases decreased 4.7%, whereas renewal rental rates dropped 0.1%.

Portfolio Activity

Aimco invested $62 million in five redevelopment and development activities during the June-end quarter. These five apartment communities, under development or redevelopment, have an estimated remaining cost of completion of around $213 million. The company projects nearly $151 million to be spent on these projects this year. Aimco also leased 59 redeveloped or newly-developed apartment homes.

During the reported quarter, the company sold one apartment community located in Annandale, VA, for $59 million. Net proceeds from the sale were $37 million.

Liquidity

As of Jun 30, 2020, Aimco’s total liquidity of $1.2 billion consisted of cash and restricted cash of $428 million, as well as a borrowing capacity of $793 million under its revolving credit facility.

Further, the company is making efforts to increase available credit by placing $609 million of new property loans (that will generate incremental proceeds of $371 million) and a $350-million bank term loan, in a bid to in bolster its liquidity position. In addition, the company closed the refinancing of another $80 million in July.

Furthermore, Aimco has now eliminated loan maturities for 2020 and will have average annual maturities of $262 million between 2021 and 2024.

Dividend Update

On Jul 28, the company announced a quarterly cash dividend of 41 cents per common share, sequentially flat and up 5% year on year. This dividend will be paid on Aug 28 to shareholders of record as of Aug 14, 2020.

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apartment Investment and Management Company Price, Consensus and EPS Surprise

Apartment Investment and Management Company Price, Consensus and EPS Surprise

Apartment Investment and Management Company price-consensus-eps-surprise-chart | Apartment Investment and Management Company Quote

Other REIT Performances

SL Green Realty Corp. SLG reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compared unfavorably with the year-ago quarter’s $1.82.

CBRE Group Inc. CBRE delivered adjusted earnings per share of 35 cents, beating the Zacks Consensus Estimate of 30 cents in the April-June quarter. However, the figure plummeted 57.1% year over year.

Duke Realty Corporation’s DRE second-quarter core FFO per share of 38 cents surpassed the Zacks Consensus Estimate of 37 cents. The figure also increased from the year-ago tally of 36 cents.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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