Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (November 2017)
24 slides from Apartment Investment And Management's investor presentation, Nov 13, 2017
Slide 1: Investor Presentation November 2017
1 INVESTOR PRESENTATION NOVEMBER 2017 Pacific Bay Vistas San Bruno, CA
Slide 2: Aimco Quick Facts
2 12 Primary Markets 141 Apartment Communities AIMCO QUICK FACTS Aimco seeks to earn long-term returns on equity that are superior to those of the equity REIT and S&P 500 indices by investing in a portfolio of high quality multifamily communities, diversified by both geography and price point, whose
Slide 3: Aimco Quick Facts: Consistent Growth Over Time
3 AIMCO QUICK FACTS Consistent Growth Over Time; Better Than Peer Average (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA and UDR. Source for peer simple average: SNL Financial. (2) Source for peer average: Company financials. (3) Source for peer simple average: KeyBanc
Slide 4: Leadership Team
4 LEADERSHIP TEAM Paul Beldin EVP & Chief Financial Officer 9 Years John Bezzant EVP & Chief Investment Officer 11 Years Lisa Cohn EVP & General Counsel 15 Years Miles Cortez EVP & Chief Administrative Officer 16 Years Steve Crane Real Estate Tax 14 Years Matt Eilen Property Operations Finance 7 Yea
Slide 5: Strategic Objectives
5 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 6: Economic Income
6 ECONOMIC INCOME (1) Represents the compounded annual return assuming a) IPO share price, b) quarterly cash dividends when paid, c) stock dividends declared in 2007-2008 as though sold for cash, and d) NAV as of September 30, 2017. Economic Income is Aimco’s primary measure of performance. • Econom
Slide 7: Property Operations Strategy
7 PROPERTY OPERATIONS STRATEGY Customer Selection Customer Satisfaction Resident Retention Centralizing and Standardizing Activities Investing in longer-lived materials Superior Cost Control Focus on Innovation and Efficiency Greater NOI Contribution Predictable Operating Results Selecting and Retai
Slide 8: Predictable Revenue Growth
8 PREDICTABLE REVENUE GROWTH (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) Aimco measures changes
Slide 9: Peer-Leading Expense Control
9 PEER-LEADING EXPENSE CONTROL • Focus on efficient operations: Aimco uses Controllable Operating Expenses ("COE"), which are property level operating expenses before taxes, insurance, and utilities, as a measure of operating efficiency. o For the five years ending 2017, Aimco COE growth is 0.9%. o
Slide 10: Redevelopment Strategy
10 REDEVELOPMENT STRATEGY REDEVELOPMENT APPROACH • Own communities where land value is a high percentage of total value. Lower price-point communities with high land values support redevelopment and entitlement activities. • Provide predictable cash flows through excellence in property operations an
Slide 11: Redevelopment Value Creation: Park Towne Place
11 Park Towne Place (Expected) PROJECT SCOPE Net investment $176M Total apartment homes 943 VALUE CREATION Redevelopment value creation ($M) $72M As a % of investment 41% Estimated Margin Expansion 2,000bps Stabilized NOI yield 6.3% REVENUE PER APARTMENT HOME At Stabilization $2,640 REDEVELOPMENT VA
Slide 12: What's Next for Redevelopment? Redevelopment Pipeline
12 BAY AREA 707 Leahy Preserve At Marin (Expansion) CHICAGO 100 Forest Place Evanston Place Yorktown Apartments (Expansion) MIAMI Flamingo South Beach (Expanded Scope) Yacht Club at Brickell PHILADELPHIA Chestnut Hall Blossom Row DENVER 21 Fitzsimons Township at Highlands GREATER LA 3400 Avenue of t
Slide 13: Portfolio Strategy
13 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 prospects; and •
Slide 14: Portfolio Strategy - Capital Allocation
14 PORTFOLIO STRATEGY - CAPITAL ALLOCATION Aimco has a demonstrated history of enhancing portfolio quality through its portfolio strategy and disciplined capital allocation. • For the three years ended 2016, Aimco invested $1.6B in redevelopment, development, property upgrades, and acquisitions. • A
Slide 15: Portfolio Strategy - Capital Allocation 2017 Plans
15 PORTFOLIO STRATEGY - CAPITAL ALLOCATION In 2017, consistent with our portfolio strategy, Aimco plans to sell communities approximating 5% of GAV, with proceeds invested in redevelopment, property upgrades, and the acquisition of our partner’s 47% interest in the Palazzo communities, located in th
Slide 16: Portfolio Diversification
16 PORTFOLIO DIVERSIFICATION (1) 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 ea
Slide 17: Aimco Exposure to New Supply
17 AIMCO EXPOSURE TO NEW SUPPLY • Absent above-average demand, new supply generally impacts rent growth only when completions are greater than 2% of existing inventory. Nationwide, 2017 completions as a percentage of existing inventory are projected to be 2.5%; 2018 is projected to be similar. This
Slide 18: Aimco Exposure to New Supply: Submarket Profile
18 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 19: Aimco Exposure to New Supply: A Communities
19 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 2018…or approximately 36% of Aimco GAV. The exposure
Slide 20: High Quality Balance Sheet
20 HIGH QUALITY BALANCE SHEET • Aimco has a safe, flexible balance sheet with abundant liquidity. • Aimco leverage target is $3.8B consisting primarily of non-recourse, amortizing, fixed-rate property debt and perpetual preferred equity. Aimco leverage is temporarily increased by borrowing to fund t
Slide 21: Team and Culture
21 TEAM AND CULTURE TEAM ENGAGEMENT • Out of hundreds of participating companies, Aimco is one of only a dozen recognized as a "Top Place to Work" in Colorado for the past five consecutive years. • For five years, Aimco team engagement scores, on a 1 to 5 scale, have averaged better than 4. TALENT A
Slide 22: Aimco Commitment
22 AIMCO COMMITMENT COMMITMENT TO CONSERVATION In 2016, Aimco invested strategically $3.5M in energy conservation. Over the last ten years, Aimco has achieved: COMMITMENT TO COMMUNITY Team members turn their passion for community service into action through Aimco Cares, which gives teammates 15 paid
Slide 23: Appendix: Multifamily Landscape
23 APPENDIX: MULTIFAMILY LANDSCAPE (1) Green Street Advisors, 2017 U.S. Apartment Outlook, January 2017 (2) Bureau of Labor Statistics (3) Moody’s Economy.com (4) U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey HOUSING DEMAND IS HEALTHY New Households Job Growth Income Growth(1)
Slide 24: Forward Looking Statements & Other Information
24 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
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