Sumit Sharma's questions to APARTMENT INVESTMENT & MANAGEMENT (AIV) leadership • Q4 2020
Question
Sumit Sharma asked about the drivers behind the high sequential expense growth in Los Angeles and questioned the strategy in the Bay Area, where AIR maintained higher average rents and saw lower declines than peers despite having lower occupancy.
Answer
CFO Paul Beldin attributed the L.A. expense increase to higher bad debt and costs associated with a long-standing property tax appeal. Keith Kimmel, President of Property Operations, explained the Bay Area strategy involves segmenting the portfolio, with San Jose and Marin County remaining stable. In the more stressed Peninsula market, the focus has been on resident retention, as renewals provide a significant premium over new leases. He affirmed that the company solves for total revenue, not just occupancy, balancing rates and resident retention.