Apartment Income REIT Corp.

Good day and welcome to the Air Community's third quarter 2021 earnings conference call. We will have a question and answer session following the speaker's remarks. To register a question, please press star, then one on your telephone keypad. Please note, today's event is being recorded. I would now like to turn the conference over to Lisa Cone. Please go ahead, ma'am.

Thank you and good day. During this conference call, the forward-looking statements we make are based on management's judgment, including projections related to 2021 expectations. These statements are subject to certain risks and uncertainties, a description of which can be found in our SEC filings. Actual results may differ materially from what may be discussed today. We'll also discuss certain non-GAAP financial measures, such as funds from operations. These are defined and are reconciled to the most comparable gap measures in the supplemental information that is part of the full earnings release published on AIR's website. Prepared remarks today come from Terry Considine, our CEO, Keith Kimmel, President and Charge of Property Operations, and Paul Belden, AIR's CFO. Other members of management are present and will be available during our question and answer session as we follow our prepared remarks. I would now like to turn the call to Terry Considine. Terry?

Thank you, Lisa, and thanks to all of you for your interest in AIR. This is a great time to be in the multifamily business. Across the country, the economy is healthy and customer demand is strong. There are lingering governmental restrictions in a few markets, but the multifamily business has largely recovered from the damage to the economy caused by last year's lockdown. Rents are above their 2019 peaks and above their long-term trend line, too. Investor demand fueled by low interest rates has driven asset prices to levels above their pre-COVID pricing. It's also been a great time for AIR. Keith and his operating team continue to excel, increasing occupancies, raising rents, and amazingly lowering costs, notwithstanding the inflationary environment. John McGrath, about whom more will be said later, took advantage of asset pricing 15% above pre-COVID 2020 and is on track to improve the AIR portfolio by selective sales and at the same time raise $1.7 billion. Paul expects to use a billion dollars or so of those proceeds to repay debt so that year-end leverage to EBITDA will be 5.3 to 1, with a weighted average interest rate of 2.4%, or 1.7% net of interest income. 380 million of those proceeds, plus $130 million of OP units, was used to buy four properties in Washington, DC, in the area, for $510 million in a paired trade that maintains current income and increases expected future by 50%. With our year-end leverage better than our target of 5.5 to 1, we have capacity to invest almost $400 million without raising equity. When we do so, we will have delevered substantially with essentially no dilution to earnings. Because five properties already acquired this year are more productive when managed by Keith and his team, those investments increase the growth rate we expect for AIR, NOI, and FFO per share. As always, what is most important is our people. The AIR team has worked hard and done well, and I thank them. I also thank and welcome home John McGrath, an AIMCO alumnus who returned after a decade away as a successful entrepreneur to become our EVP strategy and capital allocation. I thank and welcome Joshua Minix from Partners Group, who joins AIR as an EVP. John and Joshua will work together as Co-Chief Investment Officers. In particular, I'd also like to thank Bob Miller, Kathleen Nelson, and Mike Stein, long-serving directors, excellent stewards of the AIR business, great contributors, dear friends, who chose not to seek reelection, and who leave Ayer well-positioned for the future. And I look forward to welcoming to the board Tom Bojalian, Kristen Finney-Cook, and Maggie Hernandez. Their considerable accomplishments are detailed in the proxy for their election that was mailed earlier this week. And I'm grateful to Chairman Tom Keltner and Kathleen Nelson, chair of the nominating committee, for their good work in making such excellent selections. With no more ado, I turn the call over to Keith Kimmel, head of property operations, Keith. Thanks, Terry.