AIR Communities forms two JVs, totaling $1.2b in value
Apartment Income REIT Corp. has formed joint ventures with two of the world’s largest real estate investors to recapitalize 11 properties valued at an aggregate of $1.2 billion based on a trailing 12-month NOI cap rate of 5.6 percent. AIR will receive $600 million in proceeds (cash and debt relief), as well as asset and property management fees expected to contribute $2.5 million in annual margin. Upon completion of the transactions, AIR total indebtedness to EBITDA will be less than 6:1, providing capacity for accretive acquisitions.
In the first joint venture, AIR will own a 53 percent interest in the partnership and a global institutional investor will own 47 percent. The portfolio comprises 10 properties in AIR’s Same Store portfolio, with 3,093 apartment homes with monthly revenue averaging $2,457, located in Philadelphia, Denver, San Diego, south Florida and Washington (D.C.).
In the second joint venture, AIR will own a 30 percent interest in the partnership and a global asset manager will own 70 percent of Huntington Gateway, a 443-unit property located in Alexandria, Va.
In both ventures, AIR will continue to be responsible for property management and asset management, earning fees and enjoying the opportunity to earn success-based promotes.
Each partner has also committed to investing alongside AIR in future acquisitions, one focusing on core opportunities and the other focusing on value-add opportunities.