Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (August 2010)
31 slides from Apartment Investment And Management's investor presentation, Aug 30, 2010
Slide 1: Aimco Apartment Investment and Management Company, August 2010
1 Riverside Park - Alexandria, VA Park Towne Place - Philadelphia, PA Monterey Grove - San Jose, CA River Club - Edgewater, NJ Palazzo West at Park LaBrea - Los Angeles, CA 3400 Avenue of the Arts - Orange County, CA AIMCO Apartment Investment and Management Company August 2010
Slide 2: Forward-looking statements
2 This presentation contains forward-looking statements within the meaning of the federal securities laws, including statements regarding projected results and specifically forecasts of 2010 financial results. These forward-looking statements are based on management's judgment as of this date and in
Slide 3: Aimco Overview
3 Aimco Overview Flamingo South Beach Miami, FL 2900 on 1st Seattle, WA Palazzo East at Park La Brea Los Angeles, CA Aimco is a multifamily REIT focused on owning, managing and redeveloping properties in the 20 largest markets in the United States Initial Public Offering completed in 1994 with $315
Slide 4: Investing in Aimco: A Simple Business Strategy
4 Investing in Aimco Aimco Has a Simple Business Strategy Own and operate 100,000 B/B+ quality apartments Well located in 20 largest U.S. markets Opportunistic redevelopment Finance with property-level, non-recourse, long-dated, fixed-rate and amortizing debt
Slide 5: Aimco Management Team
5 Aimco Management Team Terry Considine Chairman & CEO Ernie Freedman EVP & CFO Tim Beaudin President & COO Lisa Cohn EVP & General Counsel Miles Cortez EVP & CAO Property Operations Asset Management Redevelopment Acquisitions/Dispositions Legal Human Resources Risk Finance Accounting Investor Relat
Slide 6: Aimco Key Valuation Factors
6 Aimco Key Valuation Factors Aimco holds high quality assets. Aimco has the opportunity to grow through internal and external resources. Aimco's shares are priced at a discount to the shares of apartment REIT peers. Aimco is a reliable operator. Aimco has limited balance sheet risk. Aimco has high
Slide 7: Portfolio Strategy
7 Portfolio Strategy Focus on B/B+ quality apartments Concentrate capital in 20 target markets (with a limited allocation to affordable apartments) Continually improve portfolio through capital recycling
Slide 8: Asset Quality
8 Asset Quality We define quality by comparing rents to local market averages: A-quality: rents greater than 125% of market average B-quality: rents 90% - 125% of market average C-quality: rents less than 90% of the market average We prefer B/B+ quality apartments because: Rents are less volatile th
Slide 9: Asset Quality in Aimco's Markets
9 Average 2Q 2010 rents for all conventional properties held at quarter-end, including same store properties, redevelopment properties and other conventional properties. See Supplemental Schedule 7(a) to Aimco's 2Q 2010 earnings release for additional information. 2Q 2010 REIS Asset Quality in Aimco
Slide 10: Aimco Asset Quality vs Peers
10 * 2Q 2010 Average Rents as % of Market in Aimco Target Markets for peer companies has been computed based on 1) local average market rents as reported by REIS as of 2Q 2010 and 2) 2Q 2010 average rents by market as reported by peer companies, which Aimco has weighted by revenue in each of Aimco's
Slide 11: Conventional Revenue Growth Projections
11 Conventional Revenue Growth Projections * Represents the average of 2Q 2010 projections published by REIS, PPR and AXIOMetrics, which have been weighted by Aimco based on Aimco's revenue allocation on a market-by-market basis. Aimco does not endorse or affirm the projected revenue growth publishe
Slide 12: Growth Projections Comparable to Peer Group
12 Growth Projections Comparable to Peer Group * Represents revenue growth projections published by AXIOMetrics as of 2Q 2010. Note that AXIOMetrics' market weighting methodology differs from Aimco's methodology and, as such, the growth figures in the above table differ slightly from those on the pr
Slide 13: Growth Projections Comparable to Peer Group
13 Growth Projections Comparable to Peer Group * Represents average revenue growth computed by Aimco based on 1) the average of revenue growth projections published by REIS, PPR and AXIOMetrics as of 2Q 2010, and 2) peer market allocation based on 2Q 2010 company reports. Aimco does not endorse or a
Slide 14: Target Market Characteristics
14 Target Market Characteristics High concentration of population, apartment units & apartment market capitalization. Geographic and employment diversification. Historically strong returns with reduced volatility as part of a market-cap weighted portfolio. Atlanta Boston Chicago Dallas-Fort Worth De
Slide 15: Capital Allocation
15 Capital Allocation 88% of total capital is invested in conventional real estate. 88% of conventional property capital is concentrated in Aimco's 20 target markets.
Slide 16: Capital Recycling Strategy
16 Capital Recycling Strategy Reinvestment: Increase investment in conventional assets located in priority markets. Redevelopment and enhancement of existing assets. Acquisition of B/B+ quality assets. Continually improve portfolio through capital recycling Objectives: Increase Aimco rents compared
Slide 17: Conventional Portfolio Transformation
17 Conventional Portfolio Transformation Excludes casualties and property management expenses. NOI less assumed capital replacement expenditures of $850 per unit. Sale of lower-rated assets have improved overall portfolio quality. Further asset sales will be pursued only if accretive investment oppo
Slide 18: Aimco Growth Drivers
18 Aimco Growth Drivers Aimco has the opportunity to grow through internal and external resources Internal: Rent growth - Aimco projected revenue growth is consistent with peers. Redevelopment - Aimco has a pipeline of assets that have the potential to generate yields at a premium to acquisitions. F
Slide 19: Aimco Equity Valuation
Aimco Equity Valuation 19 Aimco's shares are priced at a discount to the shares of apartment REIT peers * Green Street Advisors, Residential REITs August '10 Update, August 20, 2010. Aimco does not endorse or affirm the estimate of net asset value by Green Street Advisors. This third party estimate
Slide 20: 2010 Property Operations Objectives
20 2010 Property Operations Objectives Maximize revenues while reducing costs Average Daily Occupancy (ADO) - Maintain ADO above 95% with continued high resident quality standards. Year-to-date 2010 ADO was 95.8%. Rates - Take advantage of higher demand markets with higher occupancies to increase ra
Slide 21: Diversified Portfolio Reduces Volatility
21 Diversified Portfolio Reduces Volatility During 2009, NOI was essentially flat across our diversified portfolio. Expect 2010 total portfolio NOI to be -0.5% to 0.5% compared to 2009. Stability of Affordable NOI provides offset to volatility in Conventional Same Store NOI. Lease-up of short cycle
Slide 22: 2010 Same-Store Portfolio Performance
22 2010 Same-Store Portfolio Performance
Slide 23: History of Competitive Operating Results
23 History of Competitive Operating Results Operating performance exceeds peer average on a year-to-date basis and over the last one, three and five years. * * Represents the average of results reported by AvalonBay, Camden, Equity Residential, Essex, Home Properties and UDR.
Slide 24: Property Operations Update
24 Property Operations Update Rental rates for renewals have been positive since February. Strong Average Daily Occupancy provides support for rental rates. August 2010 ADO was 96.2%. Rental rates for new leases remain negative compared to rental rates on expiring leases, but the rate of decline has
Slide 25: Consistent Investment in Physical Assets
25 Consistent Investment in Physical Assets Sustained rate of reinvestment in asset quality, notwithstanding the economy. Invested approximately $2.2 billion in the portfolio since 2005. Continued investment in properties through: Planned Replacement Program Energy investments Redevelopment where ap
Slide 26: Aimco Balance Sheet
26 Aimco Balance Sheet Non-recourse debt ? limited entity risk. Single-property loans with 60% initial LTV. Discipline of amortization to <50% LTV at maturity. Long-dated, laddered maturities. Primarily fixed interest rates. Assumable by buyers. Perpetual preferred securities ? no refunding and very
Slide 27: Aimco Financing Strategy
27 Aimco Financing Strategy For purposes of this analysis, peer group is comprised of Camden, Equity Residential, Essex, Home Properties, UDR. Data as of 6/30/2010 as reported by SNL Financial. Represents balances as of June 30, 2010 adjusted for July 2010 repayment of remaining balance of $25 milli
Slide 28: Improving Coverage to Target
28 Improving Coverage to Target Target leverage: EBITDA coverage of interest: 2.25x EBITDA coverage of interest and preferred dividends: 1.80x Current leverage: EBITDA coverage of interest: 2.04x EBITDA coverage of interest and preferred dividends: 1.67x Improve coverage, primarily through cyclical
Slide 29: 2010 Balance Sheet & Liquidity
29 2010 Balance Sheet & Liquidity Uses largely balanced with internal sources of cash. No debt maturities in 2010. Limited 2011 maturities ($105 million). 2010 property debt activity will focus on loans maturing in 2012 to 2014 to lock in current low interest rates. Line of credit is unused and avai
Slide 30: G&A Expenses
G&A Expenses 30 G&A expense reductions have "right-sized" Aimco's overhead * Represents annualized YTD 2Q 2010 G&A expenses as a percentage of annualized YTD 2Q 2010 property revenues. YTD 2Q 2010 data as reported by SNL Financial.
Slide 31: 2010 Guidance
2010 Guidance Y2010 Guidance FFO Total Portfolio NOT sss NOI growth YOY Revenue growth YOY Expense growth YOY Occupancy Original 125 -$1.35 1.0% to -3.0% -2.0% to -5.0% -0.5% to -2.0% 1.5% to 2.5% 94.5% to 95.5% -0.5% to 0.5% =1.0% to -2.0% -0.5% to -1.0% 0.0% to 1.0% 95.0% to 95.5%
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