Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (August 2018)
28 slides from Apartment Investment And Management's investor presentation, Aug 14, 2018
Slide 1: Investor Presentation August 2018
777 South Broad Locust on the Park SouthStar Lofts Investor Presentation The Left Bank August 2018 New Aimco Philadelphia Communities SouthStar Lofts Acquired May 1, 2018
Slide 2: Aimco Quick Facts
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 by investing in a portfolio of high quality multifamily communities, DIVERSIFIED by both geography and price point, whose CASH FLOWS are PREDICTABLE an
Slide 3: Aimco Quick Facts: Consistent Growth Over Time; Better Than Peer Average
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 (3) Aimco 2018E AFFO represents the midpoint
Slide 4: Leadership Team
LEADERSHIP TEAM Aimco benefits from a long-tenured team with an average of 16 years of Aimco service. Paul Beldin John Bezzant Lisa Cohn Terry Considine Miles Cortez Steve Crane Matt Eilen EVP & EVP & EVP & Chairman & EVP & Real Estate Tax Property Operations Chief Financial Officer Chief Investment
Slide 5: Strategic Objectives
STRATEGIC OBJECTIVES Operational Excellence Redevelopment Portfolio Management Balance Sheet Focus on Customer Selection and Create Value by Repositioning Enhance Rent Growth and Limit Risk Through Balance Satisfaction to Produce Properties Within Existing Increase Long Term Capital Sheet Structure
Slide 6: Economic Income
ECONOMIC INCOME While Adjusted Funds From Operations (“AFFO”) is Aimco’s primary measure of current financial performance, Aimco’s primary measure of long-term financial performance is Economic Income. • Economic Income reflects shareholder value creation as measured by: (Net Asset Value Δ) + (Cash
Slide 7: Demographic Tailwinds
DEMOGRAPHIC TAILWINDS • The average age of an Aimco resident is 36, with 35% of Aimco residents between 25 and 34 years old and 25% between 35 and 44 years old. • By 2020, census projects the cohort of 25-34 year-olds to increase by almost 1M and the cohort between 35 and 44 to increase by almost 1.
Slide 8: Property Operations Strategy
PROPERTY OPERATIONS STRATEGY Focus on Customer Selection and Satisfaction to Produce Predictable and Growing Returns, as Measured by Free Cash Flow. • Aimco residents have an average credit rating of 710, 60 points or ~10% HIGHER than the national average for renters.(1) • Customer SATISFACTION has
Slide 9: Predictable Revenue Growth
PREDICTABLE REVENUE GROWTH Aimco increased its 2018 Same Store revenue growth guidance to between 2.5% and 3.0%. • Earn-in from 2017 leasing activity contributes 1.2% to 2018 revenue growth. • 2018 blended lease rate increases and changes in occupancy contribute the balance. • YTD results are slight
Slide 10: Innovation & Productivity
INNOVATION & PRODUCTIVITY • Focus on efficient, productive 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 2018, Aimco COE growth is e
Slide 11: Redevelopment Strategy
REDEVELOPMENT STRATEGY Create Value based on Quality of Location and Excellence of Design by Repositioning, Expanding, or Replacing Properties Within the Aimco Portfolio REDEVELOPMENT APPROACH • Own communities where land value is a high percentage of total value. Lower price-point communities with
Slide 12: Redevelopment Value Creation
REDEVELOPMENT VALUE CREATION CONSISTENT VALUE CREATION • Aimco has numerous opportunities within its portfolio for continuing value creation through redevelopment. Aimco also seeks acquisitions with characteristics that lead to opportunities for NAV creation through redevelopment. • Over the five ye
Slide 13: What's Next for Redevelopment?
WHAT'S NEXT FOR REDEVELOPMENT? REDEVELOPMENT PIPELINE • Aimco plans future starts to backfill its redevelopment pipeline. • In 2018, Aimco expects to spend $160M to $200M on redevelopment and development activities. DENVER MINNEAPOLIS Meadow Creek Calhoun Beach Club 21 Fitzsimons (Expanded Scope) (A
Slide 14: Portfolio Management
PORTFOLIO MANAGEMENT Enhance rent growth and increase long term capital values through portfolio design emphasizing land value as well as location and submarket selection while reducing revenue volatility by geographic and price point diversification. • Aimco portfolio design includes: o DIVERSIFICA
Slide 15: Aimco's Portfolio Transformation
AIMCO’S PORTFOLIO TRANSFORMATION • On July 25th, 2018, Aimco closed the $590 million sale of its Asset Management business and Hunters Point affordable communities, the capstone to a multi-year strategy to exit the affordable housing business and concentrate capital investment into high quality, mar
Slide 16: 2018 Paired Trades
2018 PAIRED TRADES In 2018, Aimco continued its portfolio enhancement by acquiring Bent Tree Apartments in Fairfax County, VA for $160M and agreeing to purchase an “A” quality portfolio of six Philadelphia area apartment communities for $445M. Aimco closed on the acquisition of four of the six prope
Slide 17: Philadelphia Market Profile
PHILADELPHIA MARKET PROFILE Center City, Philadelphia is a market that Aimco knows well, and we have a positive view on its long-term prospects. • It is the fifth largest city in the United States by population and the Philadelphia MSA is also eighth largest in the nation in terms of GDP. • The educ
Slide 18: Center City Demographics
CENTER CITY DEMOGRAPHICS Center City’s Population is Highly Educated Educational attainment levels for Center City residents rival that of Palo Alto, CA and Cambridge, MA Looking at the prime renter cohort of 25 to 34-year-olds, the educational attainment levels are even better. Source: Census, The
Slide 19: Center City Rent Growth
CENTER CITY RENT GROWTH • Center City has achieved a 15-year compound annual rent growth of 3.3%, placing it number four among Aimco’s 12 target markets, while current cap rates for Class A assets remain higher. • Its 10-year compound annual rent growth is 2.9% consistent with Boston, Chicago, and M
Slide 20: Portfolio Diversification
PORTFOLIO DIVERSIFICATION • The benefit of a diversified portfolio is that some markets accelerate while other markets decelerate. These offsetting results mute the volatility of local building cycles. • Aimco has a concentration of communities in the coastal, gateway markets, with 57% of its asset
Slide 21: Portfolio Diversification
PORTFOLIO DIVERSIFICATION • Price point diversification and submarket location provide insulation from local new supply and contribute to stable revenue growth. • Aimco analyzes and grades its portfolio of communities based on rents earned as a percentage of local market rent. Aimco further refines
Slide 22: Aimco Exposure to New Supply
AIMCO EXPOSURE TO NEW SUPPLY • As a result of diversification, Aimco 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 23% of Aimco GAV. • This exposure
Slide 23: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET Aimco limits risk through balance sheet structure, employing low leverage, primarily non-recourse and long-dated property debt, and builds financial flexibility by maintaining ample unused and available credit as well as a pool of properties with substantial value unencumb
Slide 24: Team and Culture
TEAM AND CULTURE Focus intentionally on a collaborative and productive culture based on respect for others and personal responsibility, reinforced by a preference for promotion from within based on talent development and succession planning to produce a strong, stable team that is the enduring found
Slide 25: ESG Stockholder Outreach
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (“ESG”) STOCKHOLDER OUTREACH • We regularly engage on ESG matters with stockholders holding approximately 2/3 of our outstanding shares. • In response to input gathered through this engagement, Aimco has: o Enhanced its ESG Disclosure o Included a Matrix of Dire
Slide 26: ESG Commitment to Community and Conservation
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (“ESG”) COMMITMENT TO COMMUNITY COMMITMENT TO CONSERVATION Team members turn their passion for community In 2017, Aimco invested strategically $4.5M in energy service into action through Aimco Cares, which gives conservation. Over the last ten years, Aimco has t
Slide 27: Why Invest in Aimco?
WHY INVEST IN AIMCO? • Best-in-Class Operations: Driving lower resident turnover and revenue growth through intentional focus on customer selection and satisfaction. • Paired Trade Capital Allocation Discipline: Through acquisitions, redevelopment, and development, Aimco adheres to a disciplined cap
Slide 28: Forward Looking Statements & Other Information
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 2018 results, including but not limited to: Pro
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