Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Citi 2016 Global Property CEO Conference
22 slides from Apartment Investment And Management's conference presentation, March 2016
Slide 1: Citi 2016 Global Property CEO Conference
CITI 2016 GLOBAL PROPERTY CEO CONFERENCE
Slide 2: Strategic Areas of Focus
STRATEGIC AREAS OF FOCUS • Above-average property operating results over cycle PROPERTY • Above-average resident retention OPERATIONS • Peer-leading expense control • Redevelopment is a core business activity REDEVELOPMENT • Robust pipeline of redevelopment opportunities within existing portfolio •
Slide 3: Aimco Value Creation
AIMCO VALUE CREATION ECONOMIC INCOME: year-over-year NAV growth plus annual dividend 2015 Economic Income: $5.28 per share* 14% Return on Beginning-of-Year NAV $3.10 $0.50 $0.50 $1.18 Property Operations Redevelopment Balance Sheet Annual Dividend Aimco’s 2015 Same Store Annual investment Each year,
Slide 4: Property Operations Strategy
PROPERTY OPERATIONS STRATEGY PRODUCE ABOVE- AVERAGE OPERATING RESULTS • Focus on customer satisfaction, resident retention, and superior cost control STRATEGY PROVIDES FOR • Greater NOI contribution: Renewal lease rate increases are generally higher than new lease rate increases; renewals avoid cost
Slide 5: Same Store Rental Rates
SAME STORE RENTAL RATES • Focus on customer satisfaction and resident retention: from 2011 through 2015, Aimco turnover averaged 47% compared to the peer average of 53%*. • Continued strong demand: Aimco lease rate increases in 2015 were greater than in 2014, and to date, 2016 lease rate increases h
Slide 6: Peer-Leading Expense Control
PEER-LEADING EXPENSE CONTROL • Focus on efficient operations: Over the past three years, the compound annual growth rate for Aimco’s property operating expenses before taxes, insurance, and utilities (“COE”) is 0.8%. In 2016, Aimco expects COE to be up approximately 1.5%. • Centralize: moving admini
Slide 7: Property Operations Forecast
PROPERTY OPERATIONS FORECAST Looking ahead: Aimco expects same-store NOI growth above trend due to solid demand for apartments and our continued focus on cost control. Projected Same Store Growth Rates 2016 Outlook 2017 Forecast 7.0% 6.0% 5.75% 5.0% 4.75% 4.75% 4.0% 4.25% 3.0% 2.75% 2.75% 2.0% 1.0%
Slide 8: Lease-Up Communities
LEASE-UP COMMUNITIES • During 2016 and 2017, Aimco expects to lease-up three newly-constructed communities, which communities are projected to make a neutral contribution to NOI in 2016, and to contribute $0.12 per share to 2017 NOI. Schedule Apt. Homes Stabilized Total Apt. Leased as of Initial Sta
Slide 9: Redevelopment Strategy
REDEVELOPMENT STRATEGY BUY RIGHT • Own and operate real estate in special locations where land value appreciates faster than buildings depreciate • Higher-growth markets support strategic redevelopment opportunities REDEVELOP WITHIN PORTFOLIO • Reposition existing operating properties through phased
Slide 10: Redevelopment Value Creation
REDEVELOPMENT VALUE CREATION • During the last three years, Aimco completed seven redevelopments located in high-quality locations in: the Bay Area; La Jolla, CA; west Los Angeles; downtown Seattle; and suburban Chicago. Communities 4 NOI STABILIZED Net Investment $167M OCCUPANCY Communities 3 STABI
Slide 11: 2016 Redevelopment Focus
2016 REDEVELOPMENT FOCUS NOI STABILIZATION OF COMPLETION OF CONSTRUCTION OF COMPLETED CALIFORNIA APPROVED REDEVELOPMENTS AND REDEVELOPMENTS DEVELOPMENT PROJECTS IN PHILADELPHIA AND BOSTON BOSTON One Canal (310 Apartments) BAY AREA Preserve at Marin PHILADELPHIA (126 Apartments) The Sterling (Expande
Slide 12: What's Next for Redevelopment?
WHAT’S NEXT FOR REDEVELOPMENT? REDEVELOPMENT PIPELINE DENVER CHICAGO Eastpointe Yorktown Apartments (140 Apartments) (364 Apartments) Yorktown Apartments Expansion (~100 Apartments) BAY AREA 707 Leahy PHILADELPHIA (110 Apartments) The Sterling (Expanded Scope) Park Towne Place (Expanded Scope) GREAT
Slide 13: Portfolio Strategy
PORTFOLIO STRATEGY To continuously upgrade our portfolio through redevelopment, property upgrades, acquisitions, and limited development activity. • We do this through a strict paired-trade discipline with: • DISPOSITION of 5-10% of our portfolio annually, primarily from submarkets with lower revenu
Slide 14: Portfolio Strategy Execution
PORTFOLIO STRATEGY EXECUTION • Aimco targets the disposition of 5-10% of our portfolio annually. On average, during the last three years, we have disposed of 5% of our portfolio annually. • We fund redevelopment, development and property upgrades from the sale of 2-3% of assets each year (~$200-$300
Slide 15: Portfolio Transformation
PORTFOLIO TRANSFORMATION • Aimco’s portfolio management activities have resulted in a significant improvement in portfolio quality. • Over the last three years, Aimco has exited: Dallas; Daytona Beach; Detroit; Fort Wayne, IN; Grand Rapids, MI; Houston; Jacksonville; Lexington, MD; Naples, FL; Orlan
Slide 16: Portfolio Management Focus
PORTFOLIO MANAGEMENT FOCUS • Through market rent growth and disciplined capital recycling, we expect revenue per apartment home to approximate $1,950 at 2016 year-end and $2,050 at 2017 year-end. • We anticipate closing the acquisition of a newly constructed apartment community located in the Bay Ar
Slide 17: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET • During the last three years, Aimco has reduced leverage and added financial flexibility by creating an unencumbered pool of assets. In 2015, both S&P and Fitch rated the Aimco balance sheet “investment grade.” Year-End Year-End % 2012 2015 Change DEBT TO EBITDA 7.5x 6.4x
Slide 18: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET (1) Total Leverage / LTM EBITDA as of December 31, 2015 (2) Refunding Risk Property debt amortization, Perpetual Preferred Equity (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. Peer weighted average computed by Aimco
Slide 19: Focus on Reducing Leverage
FOCUS ON REDUCING LEVERAGE • Looking ahead: We expect the quantum of leverage to remain fairly constant over the next several years and that our leverage ratios will improve due to NOI growth in our same store portfolio and the earn-in from stabilization of redevelopments and lease-up properties. Ye
Slide 20: We Live Our Values
WE LIVE OUR VALUES Our Vision Top Work Place To be the best owner and operator In 2015, Aimco was of apartment communities, again recognized by inspired by a talented team the Denver Post as a 2013 2014 2015 committed to exceptional customer Top Work Place service, strong financial based on independ
Slide 21: Summary Expectations for 2016 & 2017
SUMMARY EXPECTATIONS FOR 2016 & 2017 • Aimco's expectations for the 2016 and 2017 reflect continuation of the strategy Aimco has executed over the last several years. Consistent execution of that strategy has produced: • Improved operating results; • An improved portfolio; • A simpler business with
Slide 22: 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: selected components of Pro forma FFO and AFFO p