Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (June 2017)
31 slides from Apartment Investment And Management's investor presentation, Jun 5, 2017
Slide 1: Investor Presentation and Revised Guidance June 2017
1 INVESTOR PRESENTATION AND REVISED GUIDANCE JUNE 2017
Slide 2: Aimco Quick Facts
2 12 Primary Markets 141 Apartment Communities AIMCO QUICK FACTS SHAREHOLDER GOAL Aimco seeks to earn long-term returns on equity that are superior to those of the equity REIT and S&P 500 indices, and also those of peer apartment REITs, by investing in a portfolio of high quality multifamily communi
Slide 3: Aimco Quick Facts: Consistent Growth Over Time
3 AIMCO QUICK FACTS Consistent Growth Over Time
Slide 4: Transformational Growth in Quality of Portfolio and Earnings
4 AIMCO QUICK FACTS Transformational Growth in Quality of Portfolio and Earnings • Aimco average monthly revenue per apartment home and AFFO per share have grown steadily over the past five years at CAGRs of 9.0% and 9.6%. • Other Earnings above represent AFFO contribution from affordable communitie
Slide 5: Components of Projected 2017 AFFO Growth
5 • Aimco’s projected 2017 AFFO per share growth of 7.6% is expected from NOI increases of $0.10 per share from its Same Store portfolio and $0.19 per share primarily from its lease-up and redevelopment communities. The lease-up communities are substantially leased and on track to deliver their plan
Slide 6: Leadership Team
6 LEADERSHIP TEAM Terry Considine Chairman & CEO Paul Beldin EVP & Chief Financial Officer Keith Kimmel EVP Property Operations Lisa Cohn EVP & General Counsel Miles Cortez EVP & Chief Administrative Officer Development John Bezzant EVP & Chief Investment Officer Patti Fielding EVP Redevelopment Leg
Slide 7: Multifamily Landscape
7 MULTIFAMILY LANDSCAPE (1) U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey (2) Aimco estimate based on projections made by John Burns Real Estate Consulting and included in the book Big Shifts Ahead: Demographic Clarity for Businesses written by John Burns and Chris Porter, pub
Slide 8: Strategic Objectives
8 STRATEGIC OBJECTIVES Operational Excellence Redevelopment Focus on Total Contribution to AFFO • Lower resident turnover through careful customer selection and emphasis on measured customer satisfaction • Control costs by focusing on productivity while maintaining asset quality and a high level of
Slide 9: Property Operations Strategy
9 PROPERTY OPERATIONS STRATEGY 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 10: Strong Operating Performance
10 STRONG OPERATING PERFORMANCE (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex and UDR. Source for peer information: Bank of America Merrill Lynch, which does not track MAA turnover. Retention is calculated as the difference between 100% and turnover. (2) Volatility as measu
Slide 11: Peer-Leading Expense Control
11 PEER-LEADING EXPENSE CONTROL • Focus on efficient operations: Over the past five years, the compound annual growth rate for Aimco's Controllable Operating Expenses ("COE"), which are property level operating expenses before taxes, insurance, and utilities is 0.3%. Over the past nine years, the co
Slide 12: Same Store Lease Rate Growth
12 SAME STORE LEASE RATE GROWTH • As discussed on our first quarter earnings call, we are seeing lower new lease rate growth and lower expense growth than originally expected. Accordingly, we are lowering our Same Store revenue and expense growth guidance. • Our revised Same Store revenue and expens
Slide 13: 2017 Revised Guidance
13 2017 REVISED GUIDANCE 2Q 2017 REVISED FY 2017 PRIOR FY 2017 Pro forma FFO per share $0.56 to $0.60 $2.40 to $2.48 $2.39 to $2.49 AFFO per share $0.46 to $0.50 $2.08 to $2.16 $2.07 to $2.17 Select Components of FFO Conventional Same Store Operating Measures Revenue change compared to prior year 3.
Slide 14: Redevelopment Strategy
14 REDEVELOPMENT STRATEGY REDEVELOPMENT APPROACH • Own communities where land value as a percentage of total value is high. Lower price-point communities with high land values support redevelopment and entitlement activities. • Provide predictable cash flows through excellence in property operations
Slide 15: Redevelopment Value Creation
15 REDEVELOPMENT VALUE CREATION • The portfolio of Aimco redevelopment and limited development activities predictably results in value creation of 25% to 35%. • During 2016, three Aimco redevelopment properties achieved NOI stabilization creating ~$170M of value, equal to 30% of our investment. • Mu
Slide 16: What's Next for Redevelopment?
16 BAY AREA 707 Leahy Preserve At Marin (Expansion) CHICAGO 100 Forest Place Evanston Place Yorktown Apartments (Expansion) MIAMI Bay Parc Plaza (Expanded Scope) Flamingo South Beach Yacht Club at Brickell PHILADELPHIA Park Towne Place (Expanded Scope) Chestnut Hall DENVER 21 Fitzsimons Eastpointe T
Slide 17: Select Value Creation Opportunities
17 SELECT VALUE CREATION OPPORTUNITIES Eastpointe (Boulder, CO) Creekside (Denver, CO) Foxchase (Alexandria, VA) Yacht Club at Brickell (Miami, FL) Scotchollow (Redwood City, CA) Yorktown Apartments (Lombard, IL) Preserve at Marin (Corte Madera, CA) Merrill House (Falls Church, VA) Royal Crest Estat
Slide 18: Portfolio Strategy
18 PORTFOLIO STRATEGY To upgrade our portfolio through redevelopment, property upgrades, acquisitions, and limited development activity. We do this through a strict paired-trade discipline with: • DISPOSITION of up to 10% of our portfolio annually, primarily from submarkets with lower revenue growth
Slide 19: Portfolio Diversification
19 PORTFOLIO DIVERSIFICATION Aimco defines apartment community quality as follows: "A" quality communities are those earning rents greater than 125% of local market average; "B" quality communities are those earning rents 90% to 125% of local market average; "C+" quality communities are those earnin
Slide 20: Aimco Exposure to New Supply
20 AIMCO EXPOSURE TO NEW SUPPLY • New supply generally impacts rent growth when completions are greater than 2% of existing inventory. Nationwide, 2017 completions as a percentage of existing inventory are projected to be 2.3%. This compares to 1.9% for 2016, and 1.6% for 2015*. • However, building
Slide 21: Aimco Exposure to New Supply
21 AIMCO EXPOSURE TO NEW SUPPLY • Where there is new supply, it is typically delivered at the highest rents in the market, putting competitive pressure primarily on existing high-rent "A" communities. • Aimco emphasizes price point and submarket diversification to mitigate the impact of new supply.
Slide 22: Aimco Exposure to New Supply
22 AIMCO EXPOSURE TO NEW SUPPLY • As a result of diversification, Aimco's exposure to competitive new supply is primarily limited to its "A" price point communities in submarkets with projected completions of more than 2% of existing stock during the next twelve months…or approximately 33% of Aimco
Slide 23: High Quality Balance Sheet
23 HIGH QUALITY BALANCE SHEET • Aimco has a safe, flexible balance sheet with abundant liquidity. • Aimco leverage consists primarily of non-recourse, amortizing, fixed-rate property debt and perpetual preferred equity. • Annualized 4Q 2017 debt and preferred equity to EBITDA ratio is expected to be
Slide 24: High Quality Balance Sheet
24 • Aimco Debt and Preferred Equity to EBITDA of 6.7x reflects outstanding balances at March 31, 2017, but overstates the refunding risk of our leverage. • Our property debt balances at maturity are more than $700 million lower than 1Q 2017 balances due to principal amortization paid from retained
Slide 25: Team and Culture
25 TEAM AND CULTURE TEAM ENGAGEMENT • Out of hundreds of companies participating in the competition, Aimco is one of only a dozen in the entire state recognized as a "Top Place to Work" in Colorado for the past five consecutive years. • For the past four years, Aimco team engagement scores measured
Slide 26: Aimco Commitment
26 AIMCO COMMITMENT COMMITMENT TO CONSERVATION In 2016, Aimco strategically invested $3.5M in energy conservation. Over the last ten years, Aimco has achieved the following: COMMITMENT TO COMMUNITY Team members turn their passion for community service into action through Aimco Cares, which gives tea
Slide 27: Aimco Senior Leadership Team
27 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 almost 50 years, serving four REITs as CEO. Through the Considine Companies, Terry has invested in real estate, television broadcasting, conve
Slide 28: Aimco Senior Leadership Team
28 AIMCO SENIOR LEADERSHIP TEAM John was appointed Executive Vice President and Chief Investment Officer in August 2013. Prior to that, he served as Executive Vice President, Transactions beginning in January 2011. He joined Aimco as Senior Vice President-Development in June 2006. John serves as cha
Slide 29: Aimco Senior Leadership Team
29 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, special projects, and chairs the Senior Leadership Team. Miles joined Aimco in August 2001 as
Slide 30: Aimco Senior Leadership Team
30 AIMCO SENIOR LEADERSHIP TEAM Keith was born in Pittsburgh, Pennsylvania and is a diehard 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
Slide 31: Forward Looking Statements & Other Information
31 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 2017 results, including but not limited to: P
Apartment Investment & Management — Investor Presentation (June 2017) on 6ix