Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

The following table summarizes our total consolidated indebtedness as of December 31, 2023 and 2022 (in thousands):

	2023		2022
Secured debt:
Fixed-rate property debt due May 2025 to January 2055 (1)	$	2,236,975	$	1,906,151
Variable-rate property debt	—		88,500
Total non-recourse property debt	2,236,975		1,994,651
Debt issuance costs, net of accumulated amortization	(13,184)		(9,221)
Total non-recourse property debt, net	$	2,223,791	$	1,985,430
Unsecured debt:
Term loans due December 2024 to April 2026 (2)	475,000		800,000
Revolving credit facility borrowings due April 2025 (3)	115,000		462,000
4.58% Notes payable due June 2027	100,000		100,000
4.77% Notes payable due June 2029	100,000		100,000
4.84% Notes payable due June 2032	200,000		200,000
Total unsecured debt	990,000		1,662,000
Debt issuance costs, net of accumulated amortization	(3,447)		(5,801)
Total unsecured debt, net	986,553		1,656,199
Total indebtedness	$	3,210,344	$	3,641,629

(1)In the first quarter of 2023, AIR borrowed $320 million using 10-year fixed rate financing, bearing interest at 4.9%. Proceeds were used to refinance a floating rate loan and reduce borrowings by $230 million on our revolving credit facility. The stated rates on our fixed-rate property debt are between 2.7% to 5.7%.

(2)The term loans bear interest at a one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.00% and a SOFR adjustment of 10-basis points, based on our current credit rating. As of December 31, 2023, the weighted-average interest rate for our term loans before consideration of in place interest rate swaps was 6.5%. As of December 31, 2023, our entire $475 million term loan balance is fixed via interest rate swaps at a weighted-average interest rate of 4.3%. The term loans mature on the following schedule: $125 million matures on December 15, 2024, with a one-year extension option; $150 million matures on December 15, 2025; and $200 million matures on April 14, 2026. As of December 31, 2023, the weighted-average remaining term of the term loans was 2.1 years. Subsequent to the year ended December 31, 2023, we restructured interest rate swaps, economically hedging the balance of our term loans at 3.9% for the balance of the year.

(3)As of December 31, 2023, we had capacity to borrow up to $880.7 million under our revolving credit facility after consideration of undrawn letters of credit. The revolving credit facility bears interest at a one-month Term SOFR plus 0.89%, based on our current credit rating, and a SOFR adjustment of 10-basis points. As of December 31, 2023, the weighted-average interest rate for our revolving credit facility was 6.3%. Subsequent to the year ended December 31, 2023, we entered into interest rate swaps economically hedging $200 million of our revolving credit facility borrowings at 4.9%.

In April 2023, we established a secured credit facility that provides for up to $1 billion of committed property level financing, on an as needed basis. The facility has a 15-year term, and provides AIR the opportunity to place up to 10-year non-recourse property debt financing. Pricing can be fixed rate or variable rate at AIR's choice and is based on the Fannie Mae grid.

During the third quarter of 2023, AIR placed $611.4 million in new fixed-rate property debt related to nine properties, which was subsequently contributed to the Core JV. Additionally, one property with $33.0 million in fixed-rate property debt was also contributed to the Core JV, for a total of $644.4 million of debt contributed. As the Core JV is unconsolidated, this fixed-rate property debt is excluded from our consolidated balance sheet as of December 31, 2023.

During the third quarter of 2023, AIR refinanced $325 million of term loans with fixed rate property debt to lock in rates for debt with longer maturities. The amount included full repayment of $150 million of our term loans with a maturity of December 15, 2023 and partial repayment of $175 million of term loans with a maturity of December 15, 2024. In conjunction with the prepayment, AIR accelerated recognition of $0.8 million of associated debt issuance costs, which is included in interest expense in our consolidated statements of operations. As of December 31, 2023, and after consideration of the secured credit facility, total liquidity is approximately $1.9 billion.

As of December 31, 2023, our fixed-rate property debt was secured by 26 apartment communities that had an aggregate net book value of $2.5 billion. AIR did not have any consolidated variable-rate property debt as of December 31, 2023. Principal and interest on fixed-rate property debt are generally payable monthly or in monthly interest-only payments with balloon payments due at maturity.

As of December 31, 2023, the scheduled principal amortization and maturity payments for our outstanding debt balances were as follows (in thousands):

	Amortization		Maturities		Total
2024 (1)	$	31,823	$	—	$	31,823
2025 (1) (2)	29,146		646,323		675,469
2026 (1)	23,625		361,950		385,575
2027	21,071		163,098		184,169
2028	15,537		189,652		205,189
Thereafter	189,352		1,440,398		1,629,750
Total	$	310,554	$	2,801,421	$	3,111,975

(1)Amounts presented above are inclusive of extension options on our terms loans, as outlined above.

(2)The table above excludes our revolving credit facility due April 2025, which had an outstanding balance of $115.0 million as of December 31, 2023.

Under our credit agreement and unsecured notes payable, we have agreed to maintain certain financial covenants, as well as other covenants customary for similar credit arrangements. The financial covenants we are required to maintain include a maximum leverage ratio of no greater than 0.60 to 1.00; a fixed charge coverage ratio of no less than 1.50 to 1.00, a maximum secured indebtedness to total assets ratio of no greater than 0.40 to 1.00, a maximum unsecured leverage ratio no greater than 0.60 to 1.00, and a minimum unsecured interest coverage ratio no less than 1.50 to 1.00.