Apartment Income REIT Corp. (NYSE:AIRC) Q4 2023 Earnings Call Transcript

John Pawlowski: Okay. Thanks. One more, Terry, on the balance sheet. So I know when you initially did the spin, you had a mid-five times leverage target, and there’s been some good resistance around the six times mark the last few years. I’m not worried about balance sheet risk, but there is a missed opportunities, inability to play offense if opportunities come up. So I guess what I struggle with is not ripping off the band-aid and getting a lower leverage because it has prompted you guys scrambling a little bit to do all this derivative activity to fix the debt. And so why not keep life — maybe I’m old-fashioned, but why not keep life much simpler and just reduce the absolute level of leverage versus having to go out and do all this derivative activity to fix the debt? Any comments there will be really appreciated.

Terry Considine: Sure, John. First, as you know, our debt is much of it — two-thirds of it or more is non-recourse, and one of my favorite analysts gives us a 10% discount in the burden of that debt just for that put. Second that the question of having an opportunity is a good thing, but it’s a good thing when you use it. Having it by itself is sterile, so the time to use it is when there’s blood in the streets, when prices are low. And so waiting to do this at another time, when everything’s harmonious, is to say to miss the opportunity. So we embrace the opportunity to buy now, and the fact that we’ve been able to do that and stay within low leverage by — certainly by comparison to the asset class, and I think compared to our business model, is something that take advantage of what’s a structural advantage for apartments generally, is something that we’re paid to do because it creates value for shareholders.

John Pawlowski: All right. Thanks for the time.

Operator: Thank you. And there are no further questions at this time. I would like to turn it back to Terry Considine, CEO, for closing remarks.

Terry Considine: Well, thank you very much, and thanks, all of you still on the call. I appreciate your interest in AIR. I am excited about the future. If you have questions, please feel free to call any of us and look forward to seeing you soon at a long lumber of conferences. Be well. Bye.

Operator: Thank you, presenters, and ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.