0 The most efficient and most effective way to allocate capital to multi-family real estate Investor Presentation February 2024 Palazzo West Los Angeles, CA Exhibit 99.1
1 The most efficient and most effective way to allocate capital to multi-family real estate Key takeaways Opportunity is present in today’s markets • Portfolio well positioned, and in excellent shape – Diversified by price and market; average supply exposure – Safe balance sheet with $1.9B of liquidity • Opportunity: increasing allocation to AIR Edge acquisitions – AIR’s growth was enhanced by 2021 and 2022 acquisitions – AIR has been the most active among peers(1) since 2020 – Clear paired trade framework; ample opportunity currently AIR had a solid 2023 • Peer-leading(1) growth in blended lease rate, Same Store Revenue and NOI, Free Cash Flow, and operating margins – Run-Rate FFO and AFFO per share up 7.8% and 7.7% • Paired trades enhanced portfolio and market exposures – Average monthly revenue per home now $2,913 – Exited New York; reinvested in Bethesda and Raleigh-Durham • New JV partners, attracted by AIR’s comparative advantage in operations, look to co-invest with and support AIR’s growth • 8% reduction in shares outstanding since year-end 2021 – $1.1B ($7.15 per share at year-end 2023) returned through dividends and share repurchases (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) Lease rate growth data through February 2024 is preliminary as of 2/25/2024. (3) Class of 2021 acquisitions defined as City Center on 7th, North Park, Huntington Gateway, Vaughan Place, and Residences at Capital Crescent Trail. Class of 2022 acquisitions defined as the Reserve at Coconut Point, Watermarc at Biscayne Bay, Willard Towers, and The District at Flagler Village. Class of 2023 acquisitions defined as Southgate Towers, The Elm, Brizo, and The Villages at Olde Towne. Class of 2024 acquisitions defined as The Villages at Sunnybrook. (4) Class of 2022 expenses increased in the quarter primarily as a result of a tax revaluation in Florida, offset by continued improvement in controllable expenses. The Class of 2022 portfolio continues to perform in line with expectations. % AIR GAV NOI Growth Rate Same Store excl. Class of 2021(3) 75% Peer-leading(1) Acquisitions Class of 2021 / 2022(3) 13% ~1.2x Same Store in Q4 YoY(4) Class of 2023 / 2024 / Other Real Estate(3) 12% YoY variance will be tracked in 2024 2024 guidance indicates solid year ahead • Peer-leading(1) operations expected to: – Support growth in NAV – Generate positive, above-average FFO and AFFO growth • Continued emphasis on renewal business… ~20% more profitable than new leases – Signed blended lease rate growth of 3.2% through February(2) – Flat COE track record extended to 14-years
2 The most efficient and most effective way to allocate capital to multi-family real estate AIR Edge results • AIR customer selection in 2023: – Average / median income: $237K / $170K o Customers are “renters by choice” – Average FICO score: 723 • AIR customer satisfaction: – 4.28 CSAT in 2023 compares to Kingsley peer index of 4.09 – #1 of public operators per Kingsley, and #2 in industry • AIR customer renewal rate: – 62.3% over the TTM o 60.8% at “A” properties, and 63.8% at “B” properties o +550 bps since 2019 (+135 bps average annual improvement) – Renewal leases are 20% more profitable than new leases o 250 bps in higher rent increases in 2023 o Reduced vacancy loss during cleaning and re-leasing o No turn, marketing, or re-leasing expenses o Promote stability within communities, increasing propensity to for others to renew (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) CEL & Associates, Inc. via the National Apartment Association. (3) Senior management includes AIR personnel with title of VP or above. • AIR teammates: – Site team satisfaction: 4.48 for all onsite; 4.52 for Service Managers o Compares to Kingsley index of 4.29 – Site team average tenure: 6.3 years for all onsite (14% turnover in 2023); 8.2 years for Service Managers (4% turnover in 2023) o Compares to average ~34-39% annual turnover for onsite service personnel and ~18-23% for onsite community managers(2) – Senior management has worked together for > 15 years • Recognitions: High-Quality Customers Talented, Long-Tenured AIR Teammates
3 The most efficient and most effective way to allocate capital to multi-family real estate 2022 2023 % Δ 2024 Guidance (Midpoint) % Δ AIR Reported / Initial Pro forma FFO per Share $2.41 $2.41 -% $2.38 (1.2%) Less: Contribution of Aimco Note Prepayment(1) (0.22) - - - - Less: 2023 Non-Recurring FFO Impacts - (0.05) - - - AIR Run-Rate FFO per Share $2.19 $2.36 7.8% $2.38 0.8% AIR Run-Rate AFFO per Share $1.94 $2.09 7.7% $2.12 1.4% Attractive recurring FFO profile (1) Aimco note receivable had accelerated repayment with support of shareholders to further disentangle the relationship with Aimco. Original maturity date was 1/31/2024. (2) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. • Recurring operations have generated Run-Rate FFO and AFFO per share CAGRs of 9.5% and 10.7% since 2021 – 6.5% and 7.6% when rolled forward at the $2.38 FFO and $2.12 AFFO per share midpoints • At +0.8% FFO and +1.4% AFFO per share in 2024, AIR is one of three peers(2) with positive guidance • 2024 interest expense in context: – $0.07 of incremental interest neutralized by $0.08 of swap income in 2023 (called out as nonrecurring) – Debt refinanced in Q3 2023 would have matured in 2025 and 2026
4 The most efficient and most effective way to allocate capital to multi-family real estate • $1.9B of liquidity (3x peer-average(1)) • No debt maturing until Q2 2025 – 6.5 year weighted-average maturity • Sufficient committed liquidity to repay all maturities through 2027 • Net Leverage to EBITDAre of ~6.0x expected at year-end – Elevated leverage in Q1 expected due to Sunnybrook acquisition • 4.3% weighted-average interest cost – No floating rate exposure pro forma for February hedging activity AIR Refunding Schedule ($M) $- $561 $414 $228 $534 $141 $342 $137 $267 $320 $57 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034+ Ample Liquidity & Limited Financial Risk Safe, highly liquid balance sheet 6.1x Net Leverage to EBITDAre BBB / Baa2 S&P / Moody’s Ratings $4.9B Unencumbered Property Pool 33% / 31% Net Leverage to GAV / Adjusted for Debt M2M (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. • Per share bridge to $145-150M of interest expense in 2024 – Starting point of $136M interest expense in 2023: – ~$0.04 from ~21 bps higher rates – ~$0.01 from change in debt mix at year-end – ~$0.02 from borrowings in support of property upgrades $201M Debt Mark-to-Market • 2025 maturities ($561M): – May 2025: $71M at 3.7% – July 2025: $122M at 3.3% – November 2024: $23M at 4.0% – December 2025: $345M at 4.0% • ~$0.02 FFO impact if refinanced at current GSE cost of ~T+125 bps (~5.5%)
5 The most efficient and most effective way to allocate capital to multi-family real estate Full year 2024 guidance Other Components Change in Run-Rate FFO per Share Same Store Portfolio Lease Rate Growth(2) Signed Transacted January February January February Renewals 5.4% 4.7% 4.8% 4.9% New leases 1.1% 0.8% (1.1%) 0.8% Weighted-average 3.4% 3.1% (0.2%) 1.9% ADO % 97.6% 97.6% $2.41 $2.36 $2.38 ($0.05) $0.11 ($0.01) ($0.07) ($0.01) 2023A Pro Forma FFO per Share Nonrecurring Contributions in 2023 2023A Run-Rate FFO per Share Same Store Portfolio NOI Growth 2023 Paired Trade Transactions Incremental Interest Expense Other Items 2024E Pro Forma FFO per Share (Midpoint) • Earn-in from 2023 Leasing Activity • Average Daily Occupancy Growth • Return in 2024 on Capital Enhancements • Contribution from Class of 2022 • Change in Net Bad Debt • Contribution from 0% / 1% / 3% Rent Growth Guided 2024 Same Store Revenue Growth • Same Store Expense Growth Guided 2024 Same Store NOI Growth 2.4% 2.4% 2.4% Low Mid High 0.2% 0.4% 0.8% 0.2% 0.5% 0.5% 0.1% 0.1% 0.1% (0.3%) 0.1% 0.2% -% 0.3% 1.0% +2.6% +3.8% +5.0% 4.8% to 2.8% +2.0% to +5.6% • Other Real Estate • Third-Party Service Income (includes ~$0.05 of short duration income) • Interest Expense • Capital Enhancements (down ~$16M YoY, offset by increased ICE investment) • Year-end Net Leverage (with fluctuation for intra-quarter activity) $50M to $54M ~$0.11 per Share $145M to $150M $50M to $60M ~6.0x 2024E FFO per Share Guidance in Context: • +0.8% (at the midpoint) one of three peers(1) with positive FFO guidance • “Noise” in short-term dilution vs. long-term benefit – Accelerated mark-to-market on debt offset by income from swaps – Positive Same Store impact expected in 2025+ ~3.5% blended lease rate for 2024 would achieve mid-point of Same Store Revenue guidance; AIR on track through the end of February (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) Lease rate growth data through February 2024 is preliminary as of 2/25/2024. Data presented reflects Same Store population in 2024, which includes seven additional properties in comparison to data presented in AIR’s Q4 earnings release.
6 The most efficient and most effective way to allocate capital to multi-family real estate (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) Reflects aggregate acquisition and disposition activity since 2020 divided by Total Assets per GSA as of 2/23/2024. Excludes any (re-)development spend of peers with focus on transaction activity. (3) Class of 2022 expenses increased in the quarter primarily as a result of a tax revaluation in Florida, offset by continued improvement in controllable expenses. The Class of 2022 portfolio continues to perform in line with expectations. AIR is the most active in capital allocation among peers(1) • > $700M acquired annually since 2021; platform capacity to acquire and manage substantially more properties Sunbelt PeersAIR Communities Coastal Peers 22% 6% 7% 25% 7% 3% Acq. Disp. Acq. Disp. Acq. Disp. ~$4.6B of capital recycled by AIR since 2020, or ~38% higher than the peer average Increasing the allocation of capital to acquisitions has accelerated AIR’s rate of NOI growth and FFO accretion % AIR GAV NOI Growth Rate Same Store (excl. Class of 2021) 75% Peer-leading(1) Acquisitions (Class of 2021 / 2022) 13% ~1.2x Same Store in Q4 YoY(3) Class of 2023 / Other Real Estate 12% YoY variance will be tracked in 2024 2020-2023 Acquisition / Disposition Activity as % of GAV(1)(2) Acquisitions Enhance AIR’s Portfolio Growth
7 The most efficient and most effective way to allocate capital to multi-family real estate (1) Reflects aggregate underwritten NOI growth between Year 1 and Year 5 for each of the 14 acquisitions by AIR since 2021, inclusive of benefit of incremental capital spend. Of the 14 acquisitions, only two were in lease up at the time of acquisition (Flagler at ~80% occupancy and Sunnybrook at ~75% occupancy). (2) Property value uplift assumes that Year 1 NOI cap rate is used for valuation based on Year 3 NOI, net of capital. Opportunity: ~30% uplift in NOI expected from AIR Edge implementation Timing of AIR Edge Impact Align Rent with Submarket AIR Onboarding Rent Roll Optimization Initial Capital Enhancements Capital Enhancements 19.1% 11.2% 5.9% 3.0% Year 1 Year 2 Year 3 Year 4 Year 5 Acquisition Portfolio NOI Growth(1) Regress to market growth in Year 5+ Cumulative performance results in ~30%+ uplift in value by Year 4(2) Year 1 may be high or low due to (i) lack of comparability with seller financials and (ii) impact of AIR’s change in community standards Other acquisition considerations: • 200+ bps spread to AIR’s cost of capital • Liquidity / estate planning motivations of seller • Acquisition basis vs. replacement cost Target acquisitions where a 5-6% NOI cap rate to the seller is a 6-7% NOI cap rate to AIR
8 The most efficient and most effective way to allocate capital to multi-family real estate Case study: The Elm acquisition • $132.5M investment at AIR share; first investment by AIR’s Core JV – ~$548K per unit acquisition cost compares to estimated $650K replacement cost • Underwritten to generate $6.2M in NOI growth by Year 3 and an unlevered IRR of 11.5% – Year 1 NOI yield of 5.4% increasing to 6.9% by Year 3 $4.8 $1.4 $11.0 $17.2 In-Place NOI Revenue Growth Expense Reduction Year 3 NOI Revenue Initiatives • Align with market rents • Unit premiums • Upgrade resident mix • Parking optimization • Increased storage Underwritten NOI Growth ($M) AIR Edge Impact 63.0% 76.6% NOI Margin % +1,360 bps Expense Initiatives • Redesigned staffing • Centralized support • Turnover Capital Projects • Convert leasing offices to rent-earning space
9 The most efficient and most effective way to allocate capital to multi-family real estate Corporate responsibility highlights Social GovernanceEnvironmental • Kingsley Elite Five winner – 2nd consecutive year – #1 REIT operator; #2 of all operators • 4.42 / 5 in team engagement – Record participation at 79% • Consecutive Top Workplace awards across several regions • Emphasis on Patriotic causes – Full pay and benefits to teammates deployed overseas – >$4.8M in donations in last 10- years, including >$2.7M to Veteran nonprofits • Governance and Corporate Responsibility Committee Charter amended to include oversight of climate-related risks and opportunities • Eliminated supermajority voting to amend AIR's Charter and Bylaws • ~80% of shareholders directly engaged in 2023 • Achieved GHG emissions goals 2- years early – GHG emissions down 17% over 2019 baseline – Energy usage down 10% over 2019 baseline – Waste diversion up 16% over 2019 baseline • 75% of AIR’s properties certified as sustainable – Goal of 95% by year-end 2024 Recent Awards GRESB score of 82 • 100% in leadership and reporting • “A” in public disclosure (#2 among peers • Perfect score in social responsibility; near-perfect score in governance • 12.5% improvement in environmental performance 2023 Elite Five Multifamily Company; 2nd consecutive year 2023 National Top Workplace Award • 2nd consecutive year • 10th consecutive award in Denver Regional Top Workplace Award • Philly, Denver, South Florida 2023 Best Places to Work Award • LA, Denver, D.C., and Miami 2023 Healthiest Employer • Colorado and South Florida IREM® Certified Sustainable • 50 properties now certified Goal of certifying 95% of portfolio (by IREM or otherwise) by year-end 2024 – 75% complete today 2023 • MHN Excellence Award for Best ESG Program Committed to transparency and disclosure AIR reports and validates progress with industry-recognized benchmarks, and verification methods • GRESB: Provides validated ESG performance data and peer benchmarking • Sustainability Accounting Standards Board: Framework for disclosure on energy management, water management, tenant sustainability, and climate change adaptation • Task Force on Climate-related Financial Disclosure: Framework for disclosure on governance, strategy, risk management, and climate-related metrics and targets • United Nations Sustainable Development Goals: 17 topical goals toward global sustainability • Independent Verification: Third-party, independent assurances of goals and metrics
10 The most efficient and most effective way to allocate capital to multi-family real estate The Villages at Sunnybrook Raleigh, NC Appendix
11 The most efficient and most effective way to allocate capital to multi-family real estate The AIR Edge: overview • Our ideal is a culture of collaboration to serve others, nurture relationships, and build safe, stable communities. We seek teams that are more cohesive, better compensated, and more productive. We seek customers that make better neighbors and stay longer. The AIR Edge is the result: – Predictably higher renewal rates. – Consistently lower bad debt levels and operating expenses. – Higher NOI and FCF margins. – Greater opportunity for financial outperformance, less dependent on external factors. • We begin with seeking, attracting, and selecting high credit customers, using credit scores as a proxy for character. • We add a Good Neighbor Commitment to each lease: what we expect of our residents and what they can expect of us. • We hold ourselves accountable, and after each interaction provide our customers with the opportunity to grade our performance. We publish the unvarnished results online, increasing their importance… and their discipline on team behavior. • We avoid apparent opportunities that in practice undermine the long-term safety, stability, and enjoyability of our communities: no short-term leases, no corporate leases, no subletting or “Airbnb,” no self-guided tours, no entry of strangers to deliver packages. We enforce rules on behaviors that are inconsiderate of neighbors: for example, our properties are all “non-smoking.” • We are an early adopter of various technologies including SmartRent, robotics, and artificial intelligence... but we always balance “high tech” with “high touch.” • We re-structure work onsite to focus on customer relationships and property conditions, and provide support offsite for marketing, credit approval, financial control including purchasing and collecting rent, and compliance with local laws and regulations. The result is stronger customer relationships, greater productivity, and scalable cost efficiencies.
12 The most efficient and most effective way to allocate capital to multi-family real estate AIR is focused on recurring and growing NOI and FCF, and FFO and AFFO The AIR business model is distinctive: • AIR emphasizes customer selection with focus on stability (measured by high FICO scores) to attract “good neighbors.” At 62%, the AIR retention rate is 550 bps higher than in 2019. – As in most business, continuing customers are more profitable than new ones. In apartments, renewals are ~20% more profitable than new leases: ~50% because renewals average ~330 bps higher rent increases than new leases and ~50% because expenses such as cleaning costs, vacancy loss, and re-leasing expenses are avoided. – Also, AIR has used technology to restructure onsite work to increase productivity. The result is fewer onsite workers and a lower total labor cost… even as individual teammates are more highly paid. For example, AIR’s service managers make six- figure incomes and have been employed at AIR for an average of almost ten years. – AIR’s cost control has kept controllable operating expenses flat for 14 years. • AIR’s NOI margins exceed the peer-average,(1) as do AIR’s FCF margins. – FCF is calculated after capital replacements (“CR”) and so avoids differences based on accounting, rather than cash costs. • AIR’s selection of higher income residents means that customers can afford to pay more for property upgrades, making K&B and other such short-cycle investments profitable with low execution and inventory risks. Investing $50M of AFFO (retained after dividends) at low double-digit IRRs adds ~60 bps to the NOI growth rate, and ~$0.02 per share to 2024 FFO and AFFO. • AIR has greater flexibility than peers(1) in reallocating capital because AIR re-set its income tax basis in 2020, and so has a reduced tax “lock-up.” AIR has been more active than peers(1) with the result of a larger % of capital allocated to new acquisitions with a higher rate of NOI and FCF growth. (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA.
13 The most efficient and most effective way to allocate capital to multi-family real estate AIR’s distinctive business model provides for peer-leading(1) results Same Store NOI Growth (%)(1) Property EBITDA Growth (%)(1)(2)Same Store Revenue Growth (%)(1) 122.5 113.4 128.3 2019 2020 2021 2022 2023 2024 Midpoint Guidance (1) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (2) Property EBITDA defined as Same Store NOI less Net Property Management and G&A Expense and divided by Same Store Revenue. This metric is tracked internally by AIR as a key measure of efficiency with respect to its Same Store Portfolio. Comparison with peers is made difficult by differences in business models and accounting, and exact numbers are false precision. 126.4 109.6 128.2 2019 2020 2021 2022 2023 2024 Midpoint Guidance 135.1 105.9 129.9 2019 2020 2021 2022 2023 Sunbelt PeersAIR Communities Coastal Peers
14 The most efficient and most effective way to allocate capital to multi-family real estate ($ in 000s, unless noted) AIR ESS UDR AVB EQR CPT MAA 2023 Actuals Same Store Revenue (GAAP) $600,142 $1,579,890 $1,492,428 $2,514,272 $2,754,711 $1,238,564 $2,024,751 YoY Growth 7.9% 4.6% 6.2% 6.3% 5.6% 5.1% 6.2% Same Store NOI (GAAP) $447,244 $1,116,606 $1,039,284 $1,732,422 $1,881,263 $804,175 $1,306,939 NOI Margin 74.5% 70.7% 69.6% 68.9% 68.3% 64.9% 64.5% YoY Growth 9.3% 4.7% 6.8% 6.2% 6.2% 4.3% 6.0% Net Property Management (21,592) (34,741) (45,828) (121,711) (119,804) (31,972) (67,784) G&A Expense (21,162) (63,474) (69,929) (76,534) (60,716) (62,506) (58,578) Property EBITDA (1) $404,490 $1,018,391 $923,527 $1,534,177 $1,700,743 $709,697 $1,180,577 Property EBITDA Margin 67.4% 64.5% 61.9% 61.0% 61.7% 57.3% 58.3% YoY Growth 11.4% 3.9% 6.8% 6.3% 6.1% 3.7% 6.5% Capital Replacements (30,517) (126,718) (80,728) (123,849) (203,554) (77,952) (106,882) Per Unit (2) $1,690 $2,531 $1,572 $1,657 $2,668 $1,644 $1,122 Free Cash Flow (2) $373,973 $891,673 $842,799 $1,410,328 $1,497,189 $631,745 $1,073,695 Free Cash Flow Margin 62.3% 56.4% 56.5% 56.1% 54.4% 51.0% 53.0% YoY Growth 12.4% 5.0% 5.5% 5.7% 3.2% 3.5% 6.0% Average Average SSNOI Margin % 74.5% 70.7% 69.6% 68.9% 68.3% 69.4% 64.9% 64.5% 64.7% Property EBITDA % 67.4% 64.5% 61.9% 61.0% 61.7% 62.3% 57.3% 58.3% 57.8% Free Cash Flow % 62.3% 56.4% 56.5% 56.1% 54.4% 55.8% 51.0% 53.0% 52.0% Implied Revenue % Increase for Breakeven with AIR 11.6% 19.8% (1) Property EBITDA defined as Same Store NOI less Net Property Management and G&A Expense and divided by Same Store Revenue. This metric is tracked internally by AIR as a key measure of efficiency with respect to its Same Store Portfolio. Comparison with peers is made difficult by differences in business models and accounting, and exact numbers are false precision. (2) Free Cash Flow defined as Property EBITDA less Capital Replacements. For peers that report Capital Replacements (or an equivalent) on a consolidated basis, the implied per unit amount over the total portfolio is applied to the Same Store units outstanding in the measurement period. Comparison of Same Store NOI, Property EBITDA, and Free Cash Flow margins
15 The most efficient and most effective way to allocate capital to multi-family real estate Turn costs and annual capital replacement(1) in line with peers(2) • Expectation that recurring capital needs will continue to improve as paired trades reduce average age of AIR portfolio (1) Capital Replacement for AIR is defined as capital that does not increase the useful life of properties from acquisition (i.e., an offset of depreciation). (2) Per company filings. Peers defined as AVB, CPT, EQR, ESS, MAA, and UDR. Coastal peers defined as AVB, EQR, ESS, and UDR. Sunbelt peers defined as CPT and MAA. (3) Repairs & Maintenance (“R&M”) reflects Same Store expense, per filings, divided by Same Store units or Same Store NOI. Capital Replacement for peers defined as asset preservation, recurring capex, building improvements, or equivalent, and divided by Same Store units or Same Store NOI, respectively, unless reported on a consolidated basis and then divided by total units or total NOI, respectively. Sunbelt PeersAIR Communities Coastal Peers 1, 36 7 1, 50 5 1, 65 8 1, 73 5 1, 67 5 1, 33 3 1, 42 7 1, 53 8 1, 64 8 1, 56 2 75 6 77 8 87 6 98 0 1, 07 5 1, 43 4 1, 40 4 1, 67 3 1, 72 0 1, 69 0 1, 54 8 1, 29 6 1, 54 9 1, 92 8 2, 10 1 1, 11 0 1, 19 4 1, 13 9 1, 30 0 1, 38 3 $2,801 $2,909 $3,331 $3,455 $3,365 $2,882 $2,724 $3,087 $3,576 $3,663 $1,867 $1,971 $2,014 $2,280 $2,458 R&M Expense + Capital Replacements Per Unit(2)(3) R&M Expense + Capital Replacements as % of NOI(2)(3) 7. 5% 7. 4% 8. 4% 7. 5% 6. 8% 7. 6% 6. 9% 8. 6% 9. 3% 9. 5% 10 .3 % 10 .8 % 9. 7% 10 .0 % 10 .3 % 7. 1% 7. 9% 8. 3% 7. 6% 6. 8% 6. 3% 7. 1% 8. 1% 7. 6% 7. 0% 6. 5% 6. 6% 7. 0% 6. 7% 7. 0% 14.6% 15.3% 16.6% 15.0% 13.6% 13.9% 14.1% 16.7% 16.9% 16.4% 16.8% 17.3% 16.8% 16.7% 17.3% Capital Replacements R&M Expense 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
16 The most efficient and most effective way to allocate capital to multi-family real estate Programmatic property upgrades drive long-term value and FFO accretion • Invest only where expected NOI enhancement generates long-term IRR of > 10% (generally ~10% yield in Year 1) • Funded by retained earnings • Immediate benefit to NAV; lagged, but sustained benefit to FFO (1) Capital enhancements (“CE”) includes kitchen and bath remodeling, energy conservation projects, and investments in longer-lived materials designed to reduce costs. CE does not significantly disrupt property operations. 2024 Capital Enhancement(1) Guidance: ~$50-60M • K&B projects target ~1,600 apartment homes annually – Transacted new lease rent growth of ~5.6% in 2023 includes ~100 bps benefit from K&B activity – Affluent residents finance upgrades through higher rents • ~50% of Same Store units currently eligible for K&B upgrades – Embedded pipeline potential of ~6 years • Increasing % being invested in efficiency projects – In-unit LED, smart lighting, greater security at access points, parking, etc. increase customer satisfaction and reduce costs – Investments into customer safety and monitoring (e.g., for water leaks, temperature, and humidity) also lowers insurance premiums • Relative contribution to NOI growth expected to be more pronounced as rent growth returns to long-term trend A sustained, annual CE investment program of ~$80M (±) can enhance AIR’s NAV by > 10% on a NPV basis 82% 81% 74% 50% 1% 4% 5% 14% 17% 14% 21% 36% 2021 2022 2023 2024E Other CEK&Bs Efficiency Projects $80M $88M $71M Programmatic use of capital that can be adjusted subject to market conditions ~$50-60M
17 The most efficient and most effective way to allocate capital to multi-family real estate Supply impacts in line with historical experience • Competitive new supply is familiar to AIR; historical experience of ~20-30% of NOI impacted by new supply • Supply and demand are highly local; analysis below considers addresses, as well as submarkets Units % AIR NOI % AIR NOI w/Supply Impact(1) @ Share @ Share “A” “B” Total Market / Supply Commentary California 6,400 36% -% 4% 4% + Supply growth across California remains at < 1% of inventory + Continued strength in San Diego and LA; LA COVID bad debt impacts moving to rear view ~Leasing sluggish in the Bay Area in the Peninsula / San Jose; NO properties in the City of San Francisco South Florida 3,812 19% 5% -% 5% + 50%+ in rent increases since 2021 still being absorbed / earned-in; rent growth is positive but slowing + Long-term attractiveness of South Florida (e.g., weather, taxes, and rule of law) is unchanged ~Insurance a challenge; but, recently built / renovated properties (Watermarc / Southgate / Flagler) achieved favorable premiums due to superior construction and AIR operating processes ~Supply in Edgewater (Watermarc and Bay Parc); supply in Fort Lauderdale (Flagler); 2023 deliveries largely absorbed Washington, DC 4,524 17% 1% 1% 3% + Seasonally adjusted market rents continue to increase YoY; market remains attractive (e.g., Elm acquisition) + Moderate supply in pockets; properties not impacted on account of location and/or positioning + Opportunity if federal employees return to office Philadelphia 2,070 9% 6% -% 6% + University City properties well positioned on UPenn campus; Center City properties will benefit from Comcast’s new RTO mandate in 9/2023 ~New supply plunging after pull forward from 1/1/2022 reduction in Philadelphia Tax Abatement Program value and increase in construction sales tax Denver 1,976 7% 1% 2% 3% + No supply risk in Boulder + Price points in suburban properties well below those of new supply ~Elevated supply around Anschutz Medical Campus, but AIR properties “on campus,” while new supply is not Boston 1,284 7% 2% -% 2% + Market screens for elevated supply; however, three AIR properties in Kendall Square insulated by proximity to MIT and suburban properties are at price points below those of new supply ~One Canal (North Station) will be subject to increased competitive supply in the future, though not 2024 Other 1,608 5% 1% 2% 3% ~Elevated supply in Atlanta (West Midtown), Minneapolis (Uptown), and Raleigh (Research Triangle); recent entry into the Raleigh submarket done so at an attractive basis Total 21,674 100% 17% 10% 27% (1) Supply Impact defined as % of NOI at AIR properties where either submarket supply inventory levels are > 2% or impacts of competitive lease up activity are present.
18 The most efficient and most effective way to allocate capital to multi-family real estate Forward-Looking Statements / Non-GAAP Measures This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and specifically forecasts of 2024 results, including but not limited to: Pro forma FFO, Run-Rate FFO, and selected components thereof; AIR’s ability to maintain current or meet projected occupancy, rental rate, and property operating results; operating performance of acquisition communities; expectations regarding dispositions and the use of proceeds thereof; expectations regarding acquisitions; and, liquidity and leverage metrics. We caution investors not to place undue reliance on any such forward-looking statements. These forward-looking statements are based on management’s judgment as of this date, which is subject to risks and uncertainties. Risks and uncertainties that could cause actual results to differ materially from our expectations include, but are not limited to, real estate and operating risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including inflation, the pace of job growth and the level of unemployment; the timing and effects of acquisitions and dispositions; changes in operating costs, insurance risks, including the cost of insurance, and those described from time to time in filings by AIR with the Securities and Exchange Commission (“SEC”), including in the section entitled “Risk Factors” in Item 1A of AIR’s Annual Report on Form 10-K for the year ended December 31, 2023, and the “Risk Factors” section of registration statements filed with the Securities and Exchange Commission. Readers should carefully review AIR’s financial statements and the notes thereto, as well as the documents AIR files from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. These forward-looking statements reflect management’s judgment as of this date, and AIR assumes no obligation to revise or update them to reflect future events or circumstances.