Apartment Income REIT Corp.

Welcome and thank you for attending today's Air Communities 3rd Quarter 2023 Earnings Conference Call. My name is John and I will be your moderator for today's call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. Thank you. I would now like to pass the conference over to Lisa Cohn, President and General Counsel of Air Communities. You may proceed.

Thank you, John, and good day, everyone. My name is Lisa Cohn, and I am President and General Counsel of Air Communities. During this conference call, the forward-looking statements we make are based on management's judgment, including projections related to 2023 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 will also discuss certain non-GAAP financial measures such as FFO. These are defined and are reconciled to the most comparable GAAP 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 of Property Operations, Josh Minix, our Chief Investment Officer, and Paul Belden, our CFO. Other members of management are also present, and all of us will be available during the question and answer session to follow our prepared remarks. I will now turn the call to Terry Considine. Terry?

Thank you, Lisa, and my thanks to everyone on this call for your interest in AIR. AIR had a solid third quarter, and business is good. I start with three observations. The first, operations matter. Keith and his talented team continue to outperform. Second, portfolio composition matters. At a national level, there's a tremendous amount of competitive new supply, but there is no national market for apartment renters, only local markets, submarkets, and neighborhoods. AIR is diversified by markets and price points, and as we look to 2024, our regular review of new supply, property by property, shows a range that's been typical over the past several years. Third, interest rates matter. The increase in the 10-year rate has disrupted property pricing and created opportunities for profitable acquisitions. In the third quarter, AIR made successful pair trades that upgraded our portfolio and increased its expected growth rate in recurring cash flow. In the quarter, Keith and his team again confirmed our decision to organize AIR around comparative advantage in operations. In the third quarter, AIR enjoyed the highest customer retention, lease rate growth, same-store net operating income growth, free cash flow growth, and operating margins. AIR's emphasis on customer selection results in more stable communities with residents who are more financially capable and stay with us longer. Air Operations, the deep pockets of our venture partners, make possible accretive acquisitions. Over the past three years, we've invested more than $2 billion of Air capital in properties whose financial results are improving at rates well above Air's peer-leading same-store portfolio. Speaking of transactions, I want to introduce Joshua Minix, our Chief Investment Officer to the call. many of you will have met josh who had been co-cio at air for more than two decades his transition to cio was seamless and i also want to tip my hat to john mcgrath a dear friend for his many contributions to air and wish him well in his entrepreneurial pursuits through joint ventures and a property sale air raised more than 600 million dollars of new capital And as Josh will report, reinvested the proceeds in property purchases, share buybacks, and debt reduction, both accretive to FFO and AFFO, and improving the quality and growth rate of the portfolio. Paul kept the balance sheet bulletproof. AIR will end the year with leverage below six times EBITDA, abundant liquidity, and limited exposure to higher interest rates. We prized the AIR culture. It's the foundation for all we do, and it's well described in the Corporate Responsibility Report published last month by our colleague Patty Schwader and posted on our website. Now I'll turn the call to Keith Kimmel, President of Property Operations. Keith.