Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (October 2021)
73 slides from Apartment Investment And Management's investor presentation, Oct 21, 2021
Slide 1: Strategic Overview & Investor Presentation October 2021
STRATEGIC OVERVIEW & INVESTOR PRESENTATION OCTOBER 2021 Oak Shore Corte Madera, CA Exhibit 99.1
Slide 2: Hamilton on the Bay, Miami, FL
2 2 Hamilton on the Bay Miami, FL
Slide 3: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: Aimco’s business strategy, pipeline, and targeted opportunities. Forward-looking statements include all statements
Slide 4: Aimco Overview
AIMCO OVERVIEW Aimco is a diversified real estate investment company with a 27+ year history of growth and innovation in the multifamily sector. Since completing a strategic business separation in late 2020 the Aimco platform has been focused on a total return strategy that includes value add, oppor
Slide 5: Key Takeaways
Key Takeaways: Aimco has a NEW MISSION AND GROWTH STRATEGY following our recent separation from AIRC…remaining focused on MULTIFAMILY HOUSING but with an increased allocation to VALUE-ADD AND OPPORTUNISTIC investments. Aimco has a BEST-IN-CLASS PLATFORM, AN EXISTING PORTFOLIO OF VALUE ADD AND STABLE
Slide 6: Aimco Mission
To make real estate investments, primarily focused on the multifamily sector within the continental United States, where outcomes are enhanced through our human capital and substantial value is created for investors, teammates, and the communities in which we operate. OVERVIEW AIMCO MISSION 6 WHAT W
Slide 7: Why Real Estate? – Relative Valuation
Source: Green Street Real estate is primed for future growth in value. Interest rates have trended downward over the last 3+ decades, and relative spreads for real estate vs. bond alternatives are at or near record levels. OVERVIEW WHY REAL ESTATE? – Relative Valuation 7
Slide 8: Why Multifamily? – Supply & Demand
Source: Green Street, FHFA Apartments are primed to capture future upside. Supply growth in the intermediate-term will be steady. Positive rental market trends should lead to an attractive development market over the next five years. Improvements in the labor market will continue to benefit apartmen
Slide 9: Why Multifamily? – Inflation Hedge
Source: Bureau of Labor Statistics Property values tend to rise with the overall price environment. U.S. apartment rents have increased at rates higher than inflation in 20 of the last 25 years. Shorter lease durations (e.g., annual apartment leases) have the advantage of repricing and responding ra
Slide 10: How Does Aimco Participate?
Aimco couples outsized growth prospects from opportunistic investments with the safety of a stable multifamily portfolio resulting in a nimble platform that can move the needle quickly. OVERVIEW HOW DOES AIMCO PARTICIPATE? 10
Slide 11: Aimco Value Proposition
AIMCO VALUE PROPOSITION 2X0 & TEAM PROCESS ——— ° r- , GB) + 2S = (eal PLATFORM PORTFOLIO & PIPELINE Aimco. CAPITAL UTSIZED REDEPLOYMENT RISK ADJUSTED RETURN
Slide 12: Platform
PLATFORM AIMCO VALUE PROPOSITION 12
Slide 13: Platform Team
Aimco’s greatest asset is its team, the human capital that drives success. Aimco is organized around four regional and two satellite offices providing a national platform with local presence and knowledge. PLATFORM TEAM 13
Slide 14: Platform Team: Experienced and Cohesive
PLATFORM TEAM: EXPERIENCED AND COHESIVE 14 Wes Powell PRESIDENT & CHIEF EXECUTIVE OFFICER Jennifer Johnson EVP, CHIEF ADMINISTRATIVE OFFICER, GENERAL COUNSEL Lynn Stanfield EVP & CHIEF FINANCIAL OFFICER 17 Years with Aimco 20 Years with Aimco 17 Years with Aimco SENIOR VICE PRESIDENT ACCOUNTING, TAX
Slide 15: Platform Investment Process
15 PLATFORM INVESTMENT PROCESS Aimco invests where and when we have a Comparative Advantage over others in the market. That advantage can be realized during the acquisition, the execution of a unique value-add strategy, or both. Oak Shore Corte Madera, CA
Slide 16: Platform Investment Process: Monetization
16 PLATFORM INVESTMENT PROCESS Aimco will look to monetize investments during various points in their life-cycle with the goal of producing the Highest Risk Adjusted Returns. STABILIZED OPS
Slide 17: Investment Process: The Acquisition
INVESTMENT PROCESS THE ACQUISITION 17 Sourcing and Structuring Prowess Aimco has executed $7 billion of real estate transactions, including $2.4 billion of acquisitions over the past decade and places a high priority on opportunities where: 1001 Brickell Aimco has a Comparative Advantage over others
Slide 18: Recent Examples: Acquisitions
HAMILTON on the BAY MIAMI, FLORIDA 275 apartment homes and an adjacent land parcel Acquired in 2020 Purchased for $90 million Aimco’s local team kept a close eye on the deal even after it was first awarded to another buyer Relationship and certainty of close returned the opportunity to Aimco when th
Slide 19: Investment Process: Value Creation
INVESTMENT PROCESS VALUE CREATION 19 Aimco has successfully executed value-add strategies on $4.5 billion of real estate over the past decade. Those strategies are grounded in Aimco’s focus on customer selection and are realized through a combination of: Enhanced Operations Property Development and
Slide 20: Investment Process: Customer Selection
INVESTMENT PROCESS CUSTOMER SELECTION AN AIMCO DIFFERENTIATOR Aimco’s intensely customer-focused process results in unique design and product offerings better meeting our target customers’ needs, translating to improved investment profitability, and increased value creation. INCREASED VALUE CREATION
Slide 21: Recent Examples: Development
PARC MOSAIC BOULDER, COLORADO 226 Apartment Homes Completed in 2020 Investment of $125 million LEED Gold Certification Secured entitlements increasing density from 140 to 226 units ONE CANAL BOSTON, MASSACHUSETTS 310 Apartment Homes Completed in 2017 Investment of $195 million Collaboration with cit
Slide 22: Recent Examples: Redevelopment
SAYBROOK POINTE SAN JOSE, CALIFORNIA 324 Apartment Homes Investment of $18.8 million Targeted tech industry workers Common area/amenity upgrades and unit level renovations on all homes Phased, building-by-building redevelopment, completing units in blocks of 12 PARK TOWNE PLACE PHILADELPHIA, PENNSYL
Slide 23: Recent Example: Enhanced Operations
RECENT EXAMPLE ENHANCED OPERATIONS 23 Aimco Ownership Impacts To Bottomline In approximately two years of ownership, through operational and physical upgrades, Aimco: Invested ~$19M in property upgrades Increased NOI margin from 55% to 71% Increased Revenue by 12% Decreased Operating Expenses by 30%
Slide 24: Portfolio & Pipeline
PORTFOLIO & PIPELINE AIMCO VALUE PROPOSITION 24
Slide 25: Aimco Portfolio
25 PORTFOLIO AIMCO PORTFOLIO The Aimco portfolio can be broadly grouped in three distinct categories. Value Add & Opportunistic Real Estate Alternative Investments Core & Core Plus Real Estate Upton Place Eldridge Townhomes Parkmerced
Slide 26: Value Add & Opportunistic Real Estate
3. 2. 1. 26 PORTFOLIO VALUE ADD & OPPORTUNISTIC REAL ESTATE Aimco generally seeks Development and Redevelopment opportunities where: Barriers to entry are high Target customers can be clearly defined Aimco has a comparative advantage over others in the market Aimco’s Value Add and Opportunistic inve
Slide 27: Value Add & Opportunistic Real Estate Projects
27 PORTFOLIO VALUE ADD & OPPORTUNISTIC REAL ESTATE PRISM CAMBRIDGE, MA OAK SHORE CORTE MADERA, CA FLAMINGO POINT NORTH TOWER MIAMI BEACH, FL UPTON PLACE WASHINGTON, D.C. THE BENSON HOTEL & FACULTY CLUB AURORA, CO HAMILTON on the BAY REDEVELOPMENT MIAMI, FL
Slide 28: Value Add & Opportunistic: Active Projects
28 PORTFOLIO VALUE ADD & OPPORTUNISTIC REAL ESTATE Over $1 billion of active projects expected to produce >$60 million of annual NOI when stabilized resulting in significant value creation at monetization given a current weighted average market cap rate of 4.3%.[1]
Slide 29: Pipeline Assets
29 Anschutz Medical Campus Fort Lauderdale Land 29 PORTFOLIO PIPELINE ASSETS Pathfinder Village >$2bn OF PIPELINE INVESTMENTS UNDER AIMCO CONTROL Hamilton on The Bay Land Brickell Assemblage Flying Horse
Slide 30: Pipeline Asset: Hamilton on the Bay Land
Local Color The booming Edgewater / A&E submarket of Miami has seen explosive growth over the past 20 years. Edgewater / A&E population grew 120% from 10,273 to 22,603 between 2000 and 2020. North Edgewater boasts tremendous access to downtown with adjacency to Miami’s most up and coming neighborhoo
Slide 31: Pipeline Asset: Anschutz Options
Local Color The Fitzsimons Innovation Community and the adjacent $5.8 billion Anschutz Medical Campus are one of the largest bioscience developments in the nation, representing the second-largest economic engine in Colorado behind Denver International Airport The Anschutz Medical Campus brings over
Slide 32: Strategic Partnerships
STRATEGIC PARTNERSHIPS NATIONAL & LOCAL RELATIONSHIPS ENTITY INVESTMENTS DEVELOPMENT & REDEV MEZZANINE DEBT LAND DEALS OPERATIONAL TURNAROUNDS ASSEMBLAGES PORTFOLIOS PIPELINE PURSUIT OF NEW OPPORTUNITIES 32
Slide 33: Pipeline Target Regions
Aimco generally seeks to make new investments that are physically located no more than 300 miles or 2.5 hours travel time from a regional Aimco office. CHARACTERISTICS: High barriers to entry (supply constrained markets) Value-add through physical improvements (development or redevelopment) and enha
Slide 34: Pipeline New Business Sources
Aimco leverages its longstanding reputation in the industry, regional investment teams, and strategic relationships to source new investment opportunities where it has a comparative advantage. Strategic Relationships: 34 PIPELINE NEW BUSINESS SOURCES Aimco expects AIRC to remain a source for new bus
Slide 35: Alternative Investments
PORTFOLIO ALTERNATIVE INVESTMENTS Asymmetric Upside with Downside Protection Aimco explores alternative investment strategies when it has special knowledge or expertise relevant to the venture and when the opportunity exists for positive asymmetric outcomes. Aimco’s Current Alternative Investments:
Slide 36: Alternative Investments: Parkmerced Mezzanine Loan
36 PORTFOLIO ALTERNATIVE INVESTMENTS Parkmerced Mezzanine Loan1 For additional information on Parkmerced and Aimco’s mezzanine loan investment please reference the additional slide located in the Appendix of this presentation. Aimco’s mezzanine loan is to the partnership that controls phases 2-9 of
Slide 37: Parkmerced Mezzanine Loan Valuation
37 PORTFOLIO ALTERNATIVE INVESTMENTS Parkmerced Mezzanine Loan Occupancy is expected to return to pre-covid levels from two factors: Neighboring university returning to full in-person learning San Francisco workforce returns to the office Senior Loan AIV Loan *Valuation presented is based on stabili
Slide 38: IQHQ Private Placement
38 IQHQ Private Placement Aimco has committed to invest $50M in IQHQ, a premier life sciences owner and developer, and simultaneously entered into a strategic partnership whereby Aimco would have the first right to pursue multifamily development opportunities associated with IQHQ life science commun
Slide 39: RETV – Real Estate Technology Fund
39 PORTFOLIO ALTERNATIVE INVESTMENTS RETV – Partnership investment in a real estate technology fund Investment has upside to grow as the venture grows and provides early access to technology to improve real estate operations and property values. The Aimco portfolio benefits today from technology fun
Slide 40: Core and Core Plus Real Estate
PLANTATION GARDENS PLANTATION, FL ELM CREEK ELMHURST, IL HYDE PARK TOWER CHICAGO, IL HILLMEADE NASHVILLE, TN YACHT CLUB MIAMI, FL THE BLUFFS AT PACIFICA PACIFICA, CA ROYAL CREST ESTATES NASHUA, NH ROYAL CREST ESTATES WARWICK, RI EVANSTON PLACE EVANSTON, IL 2900 ON FIRST SEATTLE, WA THE MILAN NEW YOR
Slide 41: Core and Core Plus Real Estate: Target Allocation
Balancing Aimco’s Value Add, Opportunistic, and Alternative Investments is a diversified portfolio of stabilized real estate providing cash flow sufficient to cover core overhead. We plan to reallocate excess equity currently held in stabilized properties into higher returning investments over the c
Slide 42: Core and Core Plus Real Estate
[1] Stats presented at Aimco share and excluded from the results above is one, 40-unit apartment community and four unconsolidated properties that Aimco’s ownership includes a partnership share. 42 Eldridge Townhomes Plantation Gardens 2900 on First PORTFOLIO CORE AND CORE PLUS REAL ESTATE
Slide 43: Portfolio Stable Through the Pandemic
Aimco’s Portfolio Proved to be Stable Through the Pandemic Property Results and Comparisons 43 PORTFOLIO CORE AND CORE PLUS REAL ESTATE * Aimco’s portfolio metrics presented exclude four unconsolidated properties and one, 40-unit apartment community that Aimco’s ownership includes a partnership shar
Slide 44: Capital Redeployment & Growth
CAPITAL REDEPLOYMENT & GROWTH AIMCO VALUE PROPOSITION 44
Slide 45: Target Allocation by Segment & Sector
AIMCO TARGET ALLOCATION BY SEGMENT & SECTOR CAPITAL REDEPLOYMENT & GROWTH STRATEGY CURRENT & TARGET ALLOCATION 45
Slide 46: Investment Cycle
Aimco has over $500M of equity targeted for redeployment into higher returning (value-add) activities over the next 4-5 years (our growth is not contingent on new equity issuance). When coupled with 3rd party capital (60% debt and 50% of total equity) the total investment capitalization equals $2.5B
Slide 47: Diverse Capital Sourcing
Aimco plans to improve risk adjusted returns on shareholder equity by diversifying capital sources. HAMILTON ON THE BAY MIAMI, FLORIDA Construction Loan Financing UPTON PLACE WASHINGTON, D.C. Land Lease Construction Loan Financing JV Partnership Preferred Equity PRISM CAMBRIDGE, MASSACHUSETTS Leaseh
Slide 48: Value Add & Opportunistic Real Estate: Expected Profit
As of today, Aimco has made valuable investments or commitments totaling over $800M. These ‘seeds’ are expected to grow substantially in value over the next five-year period and create substantial value for shareholders. Over the coming years, additional seeds will be planted that will mature and cr
Slide 49: Future Growth Targets
49 Expected Sustained Annual Growth of 12%-16% POST 2025 CAPITAL REDEPLOYMENT & GROWTH STRATEGY FUTURE GROWTH TARGETS Aimco’s target growth plan is not reliant on accessing public equity markets. Target NAV Growth Assumes: Stable cap rates Stable interest rates Optimal capital allocation by end of 2
Slide 50: Future Growth Targets: NAV Growth Components
As Aimco monetizes the seeds it is currently planting, growth, lumpy at times, will follow as proceeds are reinvested. The periodic harvesting of opportunistic value add investments, combined with the steady growth of core and core plus real estate, results in an anticipated 12-16% total portfolio g
Slide 51: Balance Sheet & Finances
Yacht Club 1001 Brickell Liquidity Aimco is highly focused on maintaining ample liquidity. As of June 30, 2021, Aimco had access to $445 million, including $286 million of cash on hand, $9 million of restricted cash, and the capacity to borrow up to $150 million on our revolving credit facility. *Va
Slide 52: Keeping Score & Establishing Guardrails
Growing Net Asset Value (NAV) Increase allocation to Value Add and Opportunistic Investments while maintaining a Core and Core Plus Allocation Tracking Project-level IRR and Multiple on Invested Capital Maintaining flexibility in our capital structure to allow pursuit of opportunities throughout the
Slide 53: Environmental, Social, & Governance
ENVIRONMENTAL, SOCIAL, & GOVERNANCE 53
Slide 54: ESG Highlights: Governance
1001 Brickell Commitment to Strong Governance We seek investor input and have engaged with stockholders holding at least 2/3 of our outstanding shares each of the past 5 years. Separate Chairman and CEO Aimco has a highly regarded and refreshed Board including six new independent directors. Aimco ha
Slide 55: Board of Directors
ESG HIGHLIGHTS GOVERNANCE BOARD OF DIRECTORS 55 Michael A. Stein FORMER CFO ICOS CORPORATION, NORDSTROM, INC., & MARRIOTT INTERNATIONAL, INC. Appointed 2004 Robert A. Miller CHAIRMAN OF THE BOARD SINCE 2020 Appointed 2007 Terry Considine CEO, APARTMENT INCOME REIT CORP. CHAIRMAN AND CEO, AIMCO 1994-
Slide 56: ESG Highlights: Environmental
LED lighting Keyless Entry Smart Thermostats Water sensors Resident recycling Yacht Club 1001 Brickell Commitment to Conservation ESG HIGHLIGHTS ENVIRONMENTAL 56 Parc Mosaic LEED Gold Certified Oak Shore Currently building to LEED Gold standards Upton Place Currently building to LEED Silver standard
Slide 57: ESG Highlights: Social
Yacht Club 1001 Brickell Aimco is Committed to Community Aimco Cares gives team members 15 paid hours each year to apply to volunteer activities of their choosing In 2021, raised over $400k in the Aimco Cares/AIR Gives Charity Golf Classic benefitting military veterans and providing scholarships for
Slide 58: Appendix
APPENDIX 58 AIMCO HISTORY EXECUTIVE & SENIOR LEADERSHIP TEAM BIOS RECENT BUSINESS SEPARATION POST SEPARATION RELATIONSHIP DETAIL LEASE EXIT SCENARIOS LEASE EXIT EXAMPLE PROPERTY LIST NET ASSET VALUE SELECT INVESTMENT SUMMARIES BRICKELL ASSEMBLAGE FORT LAUDERDALE LAND UPTON PLACE PARKMERCED INVESTMEN
Slide 59: Aimco History
A 27+ year proven track record as a publicly traded Real Estate Investment Trust. Well- regarded throughout the industry and known for solutions-oriented deal making. MILESTONES 1994 IPO 1997 NHP Acquisition 1998 Insignia Portfolio Acquisition 2000 Oxford Portfolio Acquisition 2002 Casden & Flatley
Slide 60: Executive Leaders
EXECUTIVE LEADERS COHESIVE EXECUTIVE MANAGEMENT TEAM 60
Slide 61: Senior Leaders
Elizabeth (Tizzie) Likovich CENTRAL Lee Hodges SOUTHEAST Matt Konrad NORTHEAST Derek Ullian WESTERN SENIOR LEADERS EXPERIENCED SENIOR LEADERS Senior Vice President of the Central Region, responsible for overseeing development, construction, and acquisition activities within the Central U.S. Began he
Slide 62: Recent Business Separation
After thoroughly reviewing the company, Aimco leadership determined that a corporate business separation would allow the company to optimize the inherent value of AIV’s existing platform and portfolio, and that separating the stabilized assets from the development and redevelopment platform would be
Slide 63: Post Separation Relationship Detail
Services Financial [See the next slide for lease termination scenarios] POST SEPARATION RELATIONSHIP DETAIL Note: North Tower at Flamingo Point in Miami Beach, Florida, The Fremont on the Anschutz Medical Campus in Aurora, Colorado, Prism in Cambridge, Massachusetts, and 707 Leahy in Redwood City, C
Slide 64: Lease Exit Scenarios
Note: FMV = Fair Market Value; LV = Initial leasehold Value Leased from AIR Owned Assets Stabilization (12 months of 95% occupancy) AIR Communities Decision Aimco Decision Aimco Results1 Aimco triggers the lease termination and sends notice to AIR Communities Aimco receives: (FMV less LV) x 95% Exam
Slide 65: Lease Exit Example
Owned Assets HYPOTHETICAL LEASE EXAMPLE Aimco receives all economic benefits and carries all burdens of the project while paying AIRC a market return for use of the existing asset. LEASE EXIT EXAMPLE 65 Note: Assumes Aimco holds asset for four years and NOI earned in Year 4 offsets half of the annua
Slide 66: Portfolio Detail
Note: Partially owned assets managed by a third-party operator Aimco acquired Eldridge Townhomes in the third quarter for $40 million. Aimco closed the previously announced land purchase in the third quarter for $4 million. Leased from AIR Owned Assets PORTFOLIO DETAIL 66
Slide 67: Net Asset Value
Aimco 2Q 2021 NAV per share is estimated at $10 to $11. NET ASSET VALUE 67
Slide 68: Net Asset Value: Methodology and Notes
NET ASSET VALUE Valuation Methodology and Other Notes Aimco estimated the value of its investments using methods management believes to be appropriate based on the characteristics of the associated assets and liabilities. Value Add & Opportunistic Real Estate – includes eight projects currently in c
Slide 69: Investment Summary: Brickell Assemblage
Local Color Brickell has experienced unprecedented growth over the past decade, having become the densest urban core outside of Manhattan. 45% of greater Downtown Miami's population resides in Brickell and the neighborhood receives 15 million visitors each year. Scarcity of land is expected to build
Slide 70: Investment Summary: Fort Lauderdale Land
Local Color The Fort Lauderdale market dynamics are appealing due to: 5-year rental growth rate for multifamily properties in downtown Fort Lauderdale exceeding 23%. Fort Lauderdale recognition as the seventh most livable downtown in the country, by Livability.com. Project Plan Aimco entered into a
Slide 71: Investment Summary: Upton Place
Structure 90 / 10 joint Venture with The Donohoe Companies, an experienced Washington, DC builder and developer who has controlled the Upton site for the past 30 years Project is meaningfully de-risked through the construction and delivery guarantees being provided New Build Class A+ Asset is an A+
Slide 72: Investment Summary: Parkmerced Investment
Investment in One of the Most Dynamic Multifamily Development Opportunities in the U.S. Yacht Club 1001 Brickell Current Parkmerced Site (3,221 Existing Rent Stabilized Units1) Fall 2021 Update Parkmerced at Full Buildout Description In 2019, Aimco made a $275mm loan to the partnership that owns Par
Slide 73: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 73 PROPERTY NET OPERATING INCOME (NOI): NOI is defined by Aimco as total property rental and other property revenues less direct property operating expenses, including real estate taxes. NOI does not include: property management revenues, primarily from affiliates; casualtie
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