Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (June 2016)
29 slides from Apartment Investment And Management's investor presentation, Jun 1, 2016
Slide 1: Investor Presentation June 2016
INVESTOR PRESENTATION JUNE 2016 1
Slide 2: Strategic Areas of Focus
2 STRATEGIC AREAS OF FOCUS REDEVELOPMENT • Redevelopment is a core business activity • Robust pipeline of redevelopment opportunities within existing portfolio • Occasional development when warranted by risk-adjusted returns • Above-average property operating results over cycle • Above-average resid
Slide 3: Aimco Value Creation
3 AIMCO VALUE CREATION ECONOMIC INCOME: year-over-year NAV growth plus annual dividend 2015 Economic Income: $5.28 per share* 14% Return on Beginning-of-Year NAV $3.10 Property Operations Aimco’s 2015 Same Store NOI growth of 5.6% created ~$3.00 of NAV per share. $0.50 Redevelopment Annual investmen
Slide 4: Property Operations Strategy
PROPERTY OPERATIONS STRATEGY 4 STRATEGY PROVIDES FOR • Greater NOI contribution: Renewal lease rate increases are generally higher than new lease rate increases; renewals avoid costs associated with turnover: higher vacancy, refurbishment, and marketing. • More predictable operating results: Renewal
Slide 5: Resident retention and same store rental rates
• Focus on customer satisfaction and resident retention: from 2011 through 2015, Aimco turnover averaged 47% compared to the peer average of 53%(1). • Continued strong demand: Same Store rental rates have increased for 14 of the past 16 months. SAME STORE RENTAL RATES 5 (1) Peer group consists of Av
Slide 6: Demographics Support Strong Demand
6 DEMOGRAPHICS SUPPORT STRONG DEMAND • Historically, 64% of people aged 20 to 34 have opted for rental housing. • If propensity to rent remains, people in this age cohort could add 650k people to the rental population over the next 10 years. • Historically, about 21% of people over the age of 55 hav
Slide 7: Peer-Leading Expense Control
PEER-LEADING EXPENSE CONTROL 7 * Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. Peer 2016E is based on the most recent company guidance as of 5/16/2016. Data Sources: SNL Financial, company reports. • Focus on efficient operations: Over the past th
Slide 8: Property Operations Forecast
Looking ahead: Aimco expects same-store NOI growth above trend due to solid demand for apartments and our continued focus on cost control. Our 2017 Forecast assumes: • Renewal rents increases at 4.5% and New Lease rents increase at 3.9%, the average of submarket growth rates projected by REIS and AX
Slide 9: Lease-Up Communities
• During 2016 and 2017, Aimco expects to lease-up three newly-constructed communities, which communities are projected to make a neutral contribution to NOI in 2016, and to contribute $0.12 per share to 2017 NOI. Sensitivity to assumptions: • If the lease-up of these communities is six months faster
Slide 10: Redevelopment Strategy
REDEVELOPMENT STRATEGY 10 BUY RIGHT • Own and operate real estate in special locations where land value appreciates faster than buildings depreciate • Higher-growth markets support strategic redevelopment opportunities REDEVELOP WITHIN PORTFOLIO • Reposition existing operating properties through pha
Slide 11: Redevelopment Value Creation
11 REDEVELOPMENT VALUE CREATION NOI STABILIZED Communities Net Investment 4 $167M OCCUPANCY STABILIZED Communities Net investment 3 $583M UNDER CONSTRUCTION Communities Estimated net investment 2 $160M TOTAL / WEIGHTED AVERAGE Communities Net Investment Actual / projected value creation as a % of ne
Slide 12: 2016 Redevelopment Focus
12 2016 REDEVELOPMENT FOCUS NOI STABILIZATION OF COMPLETED CALIFORNIA REDEVELOPMENTS BAY AREA Preserve at Marin (126 Apartments) PHILADELPHIA The Sterling (Expanded Scope) Park Towne Place (Expanded Scope) GREATER LA Lincoln Place (795 Apartments) BOSTON One Canal (310 Apartments) SAN DIEGO Ocean Ho
Slide 13: What's Next for Redevelopment?
13 WHAT’S NEXT FOR REDEVELOPMENT? REDEVELOPMENT PIPELINE BAY AREA 707 Leahy (110 Apartments) CHICAGO Yorktown Apartments (364 Apartments) Yorktown Apartments Expansion (~100 Apartments) MIAMI Yacht Club at Brickell (357 Apartments) PHILADELPHIA Park Towne Place (Expanded Scope) DENVER Eastpointe (14
Slide 14: Portfolio Strategy
14 PORTFOLIO STRATEGY To continuously upgrade our portfolio through redevelopment, property upgrades, acquisitions, and limited development activity. • We do this through a strict paired-trade discipline with: • DISPOSITION of 5-10% of our portfolio annually, primarily from submarkets with lower rev
Slide 15: Portfolio Strategy Execution
PORTFOLIO STRATEGY EXECUTION 15 • Aimco targets the disposition of 5-10% of our portfolio annually. On average, during the last three years, we have disposed of 5% of our portfolio annually. • We fund redevelopment, development and property upgrades from the sale of 2-3% of assets each year (~$200-$
Slide 16: Portfolio Transformation
• Aimco’s portfolio management activities have resulted in a significant improvement in portfolio quality. • Over the last three years, Aimco has exited: Dallas; Daytona Beach; Detroit; Fort Wayne, IN; Grand Rapids, MI; Houston; Jacksonville; Lexington, MD; Naples, FL; Orlando; Palm Beach, FL; Phoen
Slide 17: Portfolio Management Focus
PORTFOLIO MANAGEMENT FOCUS 17 Acquisition Avg. of Sold to Fund Acquisition Acquisition vs. Sold QUALITY COMPARISON Age Stabilized revenue per apartment home (1) Median home values (2) Newly constructed $4,130 $765,000 36 years $1,459 $344,000 - 36 + $2,671 + 421,000 FINANCIAL COMPARISON 10-Year FCF
Slide 18: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET • During the last three years, Aimco has reduced leverage and added financial flexibility by creating an unencumbered pool of assets. Both S&P and Fitch rate the Aimco balance sheet “investment grade.” • Aimco Debt and Preferred Equity to EBITDA of 6.8x reflects outstandin
Slide 19: High Quality Balance Sheet: peer leverage comparison
5.4x 6.8x 4.9x Peer Wt. Avg. Aimco Aimco Based on Balances Due at Maturity HIGH QUALITY BALANCE SHEET (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. Peer weighted average computed by Aimco based on 3/31/2016 debt and preferred equity balances,
Slide 20: Leverage forecast and exposure to interest rates
Year-End 2015 Year-End 2017 Forecast % Change DEBT TO EBITDA 6.4x ~ 5.9x - 8% DEBT AND PREFERRED EQUITY TO EBITDA 6.8x ~ 6.3x - 7% VALUE OF UNENCUMBERED ASSETS $1.8B $2.1B + 17% • Looking ahead: We expect the quantum of leverage to remain fairly constant over the next several years and that our leve
Slide 21: We Live Our Values
Integrity Respect Collaboration Customer Focus Performance Our Vision To be the best owner and operator of apartment communities, inspired by a talented team committed to exceptional customer service, strong financial performance, and outstanding corporate citizenship. Aimco Cares In 2014, we celebr
Slide 22: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Terry is a life-long entrepreneur focused on business, politics and family. Terry has been an active real estate investor for more than 45 years, serving four REITs as CEO. Through the Considine Companies, Terry has invested in real estate, television broadcasting, conve
Slide 23: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Paul was promoted to Executive Vice President and Chief Financial Officer in September 2015. He joined Aimco in 2008 as Senior Vice President and Chief Accounting Officer. Prior to joining Aimco, from October 2007 to March 2008, Paul served as Chief Financial Officer of
Slide 24: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM John was appointed Executive Vice President and Chief Investment Officer in July 2013. He joined Aimco as Senior Vice President - Development in June 2006. John is responsible for portfolio management, including dispositions, acquisitions and capital investments. Prior t
Slide 25: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Lisa has served as Aimco’s Executive Vice President, General Counsel and Secretary since 2007. Lisa is responsible for Aimco’s legal, insurance and risk management functions and has executive responsibility for human resources, compliance, commercial and ancillary income
Slide 26: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Miles was promoted to Executive Vice President and Chief Administrative Officer in December 2007. He is responsible for administration, government relations, communications, and special projects, and chairs the Senior Leadership Team. Miles joined Aimco in August 2001 as
Slide 27: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Patti was promoted to Executive Vice President — Securities and Debt in February 2003 and Treasurer in January 2005 and assumed responsibility for Redevelopment activities in November 2014. She is responsible for debt financing activities, including property debt and cor
Slide 28: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Keith was born in Pittsburgh, Pennsylvania and is a die hard Steelers fan. In 1976 his family moved to Southern California where he quickly acclimated to the beautiful beaches and took up his passion for surfing. Keith is married to his wonderful wife Leyla, and they hav
Slide 29: Forward Looking Statements & Other Information
29 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and specifically forecasts of: selected components of Pro forma FFO and AFF
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