Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (June 2013)
26 slides from Apartment Investment And Management's investor presentation, Jun 5, 2013
Slide 1: Investor Presentation June 2013
1 INVESTOR PRESENTATION JUNE 2013
Slide 2: Multifamily Industry Overview
2 MULTIFAMILY INDUSTRY OVERVIEW
Slide 3: Multifamily Fundamentals
3 D e m a n d Age of population: in the U.S., people aged 20 - 34 have the highest propensity to rent apartments and the number of people in this age cohort is increasing at a predictable rate. Job growth: during the economic recovery, people aged 20 - 34 have disproportionately benefited from job g
Slide 4: Demographics support strong apartment demand
4 Demographics support strong apartment demand The children of the Baby Boomers – the Echo Boomers – are entering the rental market. 60% people under the age of 35 opt for rental housing.* Baby Boomers are entering their “downsizing years”. Historically, people aged 55 and over have had a pr
Slide 5: Job growth drives household formations
5 Job growth drives household formations The age cohort with the highest propensity to rent is benefiting most from U.S. job recovery. Nearly 23 million young adults under age 35 are currently classified as “living at home” with parents. This represents 31% of the age cohort compared to the long
Slide 6: Employment picture for college-educated is even brighter
6 Employment picture for college-educated is even brighter 2.5% 2.1% 3.5% 4.5% 6.2% 7.7% 8.3% 12.4% $1,624 $1,735 $1,300 $1,066 $785 $727 $652 $471 Doctoral degree Professional degree Master's degree Bachelor's degree Associate degree Some college, no degree High-school diploma Less than a high scho
Slide 7: Home buying is driven by family status
7 0 10 20 30 40 50 60 70 80 90 100 Provides a good place to raise children Provides a safe place to live Can have more space for family Have control over living space Renting is bad investment Can have a nicer home Provides good financial opportunity Can build up wealth Provides a retirement investm
Slide 8: Aimco Overview
8 AIMCO OVERVIEW
Slide 9: Strategic Areas of Focus
9 STRATEGIC AREAS OF FOCUS Property Operations • Higher income, therefore older, customer • Peer-leading operating cost control • Lower turnover • Above-average property operating results over cycle Portfolio Management • Diversified across markets and price points to reduce volatility • Disciplined
Slide 10: Focus on customer and efficient operations
10 Focus on customer and efficient operations Customer retention is key Greater NOI contribution, more predictable operating results. On average, customers choose to rent an Aimco apartment for 23 months, up 28% from 2007. Aimco’s turnover averages 44% - 46% compared to the peer average of app
Slide 11: Designing portfolio around target customers
11 Designing portfolio around target customers PORTFOLIO MANAGEMENT Lower rate of home ownership Not yet motivated by marriage, children High propensity to rent Predictably increasing number of people Age 25-45 Stronger job and earnings growth Lower unemployment College Educated Single Over time, Ai
Slide 12: Sell lowest rated properties; reinvest in higher-rent properties
12 Sell Lowest Rated Properties 2012 Dispositions Conventional properties 24 Affordable properties 47 Gross proceeds (Aimco share) $598M Net proceeds (Aimco share) $269M Avg revenue per unit $861 FCF IRR 6.0% - 7.0% Reinvest in Higher-Rent Properties 2012 Property Upgrades 2012 Acquisitions Investme
Slide 13: Pipeline of opportunities within existing portfolio
13 Pipeline of opportunities within existing portfolio Redevelopment Phi losophy Land in quality locations appreciates over time. Older assets in quality locations provide opportunity for redevelopment. Redevelopment is a short-cycle business making it lower-risk than ground-up development.
Slide 14: 2012 Starts create ~$2 of NAV per share
14 2012 Starts create ~$2 of NAV per share (1) REDEVELOPMENT ( 1 ) Based on CBRE February 2013 Cap Rate Survey . (2) Amounts in graph ic represent to ta l es t imated redeve lopment inves tment , exc lud ing bas i s in p roper ty pr io r to redeve lopment . (3) 2900 on F i r s t , Park Towne P lace
Slide 15: Safety first
15 Safety first BALANCE SHEET ( 1 ) Peer we ighted average represents the we ighted average of Ava lonBay , BRE, Camden, Colon ia l Proper t ies , Equ i ty Res ident ia l , Essex , Home Proper t ies , MAA, Post Proper t ies and UDR. Data as o f 3 /31 /2013 . Source : SNL F inanc ia l , company repor
Slide 16: Strategy allows for flexibility and low costs
16 Strategy allows for flexibility and low costs Using multiple sources of non-recourse property debt, including insurance companies, savings banks, pension funds, other balance sheet lenders, as well as GSEs. $500M revolving line of credit, $49M drawn at 3/31/2013, $405M of available capacity.
Slide 17: Leverage in-line with peers and declining to lower targets
17 Leverage in-line with peers and declining to lower targets Net Debt + Preferred + Remaining Development Spend/4Q 2012 Annualized EBITDA* * S o u r c e s : S N L , C i t i I n v e s t m e n t B a n k i n g , C o m p a n y f i l i n g s . R e f l e c t s 4 Q 2 0 1 2 d e b t b a l a n c e a n d p r
Slide 18: Increasing earnings, higher dividend
18 Increasing earnings, higher dividend EARNINGS & DIVIDEND Above Average FFO Growth Lower Capital Replacements as a % of NOI Outsized AFFO Growth Above Average Dividend Growth Steady revenue growth Peer-leading cost control Offsite cost savings Interest expense savings from property debt act
Slide 19: Five core values are the foundation of Aimco
19 Five core values are the foundation of Aimco AIMCO CORE VALUES Aimco ranked #19 in the mid-size company category 2013 Our Vision To be the best owner and operator of apartment communities, inspired by a talented team committed to exceptional customer service, strong financial performance, and out
Slide 20: Redevelopment Update
20 REDEVELOPMENT UPDATE
Slide 21: Elm Creek Townhomes, Elmhurst, Illinois
21 First units leased during 1Q 2013 at rental rates 3% above underwriting Project Summary: − Construction of five new buildings containing 28 townhome-style units, ad jacent to existing 372 unit community owned and operated by Aimco. − Interiors include high-end finishes such as granite countertops
Slide 22: The Palazzo at Park La Brea, Los Angeles
22 High demand for luxury apartments in West Los Angeles THE PALAZZO AT PARK LA BREA LOS ANGELES, CALIFORNIA Project Summary: − Upgrading 115 penthouse units and areas common to the penthouse units. − New rooftop deck for exclusive use by penthouse residents completed in 3Q 2012. − Upgraded fitness
Slide 23: Lincoln Place Apartments, Venice, California
23 Pre-leasing market-rate units began in 2Q 2013 LINCOLN PLACE APARTMENTS VENICE, CALIFORNIA Project Summary: − Total of 795 units (696 existing and 99 to be built). − Complete exterior and interior redevelopment in three phases: − Phase I complete (returning 50 residents), comprised of 4 buildings
Slide 24: Pacific Bay Vistas, San Bruno, California
24 Leasing center & clubhouse complete, pre-leasing underway PACIFIC BAY VISTAS SAN BRUNO, CALIFORNIA Project Summary: − Complete interior and exterior redevelopment of al l 14 existing three-story buildings. − Units wil l feature high-end interior f inishes including granite countertops, vinyl wood
Slide 25: The Preserve at Marin, Corte Madera, California
25 Construction progressing, expect initial occupancy in 3Q 2013 THE PRESERVE AT MARIN CORTE MADERA, CALIFORNIA Project Summary: − Comprehensive interior and exterior redevelopment of all seven three-story buildings − Redesign of all apartment units to feature large bay windows, modern kitchens, and
Slide 26: Forward-looking statements
26 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 2013 financial and operating results, asset sales and redevelopment investment; projected r
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