Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Day (October 2015)
65 slides from Apartment Investment And Management's investor day presentation, Oct 6, 2015
Slide 1: Supplemental Investor Day Materials October 6, 2015
1 SUPPLEMENTAL INVESTOR DAY MATERIALS OCTOBER 6, 2015
Slide 2: Strategic Areas of Focus
2 STRATEGIC AREAS OF FOCUS • Above-average property operating results over cycle • Above-average resident retention • Peer-leading operating cost control • Diversified across markets and price points to reduce volatility in revenue • Disciplined capital recycling to upgrade portfolio • Peer-leading
Slide 3: Aimco's business plan provides significant value creation
3 Aimco’s business plan provides significant value creation AIMCO VALUE CREATION Portfolio Management • Portfolio quality, as measured by average revenue per unit, increasing at a rate significantly higher than peers. • Free cash flow margins increasing at a rate of 2% per year for the last ten year
Slide 4: High customer satisfaction, lower turnover philosophy
4 High customer satisfaction, lower turnover philosophy PROPERTY OPERATIONS Greater NOI contribution: Renewal lease rate increases are generally higher than new lease rate increases; renewals avoid costs associated with turnover: higher vacancy, refurbishment, and marketing More predictable oper
Slide 5: 2015 rental rate growth exceeds 2014
5 2015 rental rate growth exceeds 2014 PROPERTY OPERATIONS Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Same Store Rental Rates Renewals New Leases
Slide 6: Peer-leading operating cost control
6 Centralize – centralizing administrative tasks saves $1.5M per year compared to 2007. Additional opportunities exist to continue to centralize and reduce costs Standardize – reducing maintenance purchasing catalog items to standardize parts and quality saves $90K per year compared to 2013. Pur
Slide 7: Strong operating performance
7 Strong operating performance PROPERTY OPERATIONS 2014 v 2013 2015 v 2014 2014 2015 Target Markets Washington - NoVa - MD 0.6% 1.0% 16.1% 17.0% Los Angeles 4.9% 6.0% 11.4% 12.6% Boston 3.3% 5.2% 9.5% 10.6% Miami 6.7% 6.2% 8.6% 9.5% Chicago 5.6% 4.2% 8.2% 8.9% San Diego 5.5% 5.7% 5.2% 5.8% Bay Area
Slide 8: Redevelopment Strategy
8 REDEVELOPMENT STRATEGY STRATEGY To provide distinctive homes, designed specifically for our target customers in strong markets. BUY RIGHT • Own and operate real estate in special locations • Land value in great locations appreciates faster • Higher growth markets support strategic redevelopment op
Slide 9: Lincoln Place, Venice, CA
9 Lincoln Place, Venice, CA REDEVELOPMENT & DEVELOPMENT Vision Location - Lincoln Place is located near world-famous Venice Beach on the west side of Los Angeles. Venice is home to Silicon Beach and offices for Google, Microsoft, Face book, and You Tube in addition to hundreds of startups including
Slide 10: Pacific Bay Vistas, San Bruno, CA
10 Pacific Bay Vistas, San Bruno, CA REDEVELOPMENT & DEVELOPMENT Vision Location - Pacific Bay Vistas is located at the highly visible intersection of Skyline Boulevard and Sharp Park Road, in the heart of San Bruno, CA. This hilltop location offers spectacular views of both the Pacific Ocean and th
Slide 11: Preserve at Marin, Corte Madera, CA
11 Preserve at Marin, Corte Madera, CA REDEVELOPMENT & DEVELOPMENT Vision Location - Preserve at Marin is located in the heart of South Marin County, which is a quick commute to San Francisco's financial district or a 30 mile drive north to the wine country. The property is situated adjacent to Ring
Slide 12: Vivo (Formerly on Third), Cambridge, MA
12 Vivo (Formerly 270 on Third), Cambridge, MA REDEVELOPMENT & DEVELOPMENT Vision Location - 270 on Third is located in Kendall Square in Cambridge, MA. In the last three decades, Kendall Square has been transformed from a former industrial district to one of the world’s leading centers for biotechn
Slide 13: Ocean House on Prospect, La Jolla, CA
13 Ocean House on Prospect, La Jolla, CA REDEVELOPMENT & DEVELOPMENT Vision Location - Ocean House is located on the prestigious and well-known Prospect Street in La Jolla, CA. Ocean House offers panoramic views of the Pacific Ocean and is a short walk from stunning beaches, tide pools, the Museum o
Slide 14: One Canal Street, Boston, MA
14 One Canal Street, Boston, MA REDEVELOPMENT & DEVELOPMENT Vision Location - One Canal is located in the historic Bullfinch Triangle neighborhood of Boston’s West End. The prominent site sits within walking distance of TD Garden Arena and has excellent access to the North End as well as the central
Slide 15: Park Towne Place, Philadelphia, PA
15 Park Towne Place, Philadelphia, PA REDEVELOPMENT & DEVELOPMENT Vision Location - Park Towne is located along the Benjamin Franklin Parkway, in the heart of Philadelphia's world-renowned museum district. The park- like setting offers relief from the congestion of urban living but is within walking
Slide 16: The Sterling, Philadelphia, PA
16 The Sterling, Philadelphia, PA REDEVELOPMENT & DEVELOPMENT Vision Location - Located in the heart of Philadelphia's growing Market West District, and directly adjacent to the expanding Comcast Corporation headquarters, The Sterling offers exceptional access to the central business district, Ritte
Slide 17: Redevelopment opportunities support $200-$300M annual investment
17 REDEVELOPMENT Opportunities within existing portfolio support $200-$300M investment annually Chicago Yorktown Apartments (364 Apartments) Philadelphia The Sterling (Expanded Scope) Park Towne Place (Expanded Scope) Washington DC Merrill House (159 Apartments) Miami Yacht Club at Brickell (357 Apa
Slide 18: Portfolio strategy seeks revenue growth with lower volatility
18 Portfolio strategy seeks revenue growth with lower volatility PORTFOLIO MANAGEMENT Geographic diversification reduces concentration risk. • Invest in large, liquid markets whose real estate cycles are asynchronous and not closely correlated • Allocate 95% of our total investment to our target m
Slide 19: Geographic and Price Point Diversification
19 Geographic Diversification (% Conv. NOI) Price Point Diversification (% Conv. GAV) Maintaining diversification while moving to higher average price point Los Angeles expected to outperform in 2015, helping to offset slower Mid Atlantic Avoid concentration risk by maintaining allocation to Mid
Slide 20: Methodical approach to investment selection
20 Methodical approach to investment selection Portfolio strategy executed through leverage-neutral, tax-efficient paired trades where the projected Free Cash Flow IRR of an investment is greater than the projected Free Cash Flow IRR of the property sold; and portfolio quality is enhanced Select
Slide 21: Significant portfolio upgrade achieved through paired trade activity
21 Significant portfolio upgrade achieved through paired trade activity PORTFOLIO MANAGEMENT Conventional Portfolio Metrics 2011 2012 2013 2014 2Q 2015 Cumulative Number of Conventional communities 198 175 162 144 143 -28% Number of Conventional apartment homes 62,834 55,879 50,486 43,348 41,425 -34
Slide 22: Aimco's balance sheet is the safest in the sector
22 0% 5% 10% 15% 20% 25% 30% 35% 2015 2015 - 2017 Aimco Peer Wt. Avg. 0% 10% 20% 30% 40% 50% 60% 70% 2015 2016 2017 2018 Aimco Peer Wt. Avg. 20% 40% 60% 80% 100% Aimco Peer Wt. Avg. % Non-Recourse % Recourse Aimco’s balance sheet is the safest in the sector Limit entity risk by avoiding recourse d
Slide 23: Quantity of leverage is in line with peers, and declining
23 6.1x 7.0x 5.0x Peer Wt. Avg. AIV AIV Adj for Refunding Risk Quantity of leverage is in line with peers, and declining We achieved our target for lower leverage two years ahead of plan Aimco Debt and Preferred Equity to EBITDA of 7.0x reflects outstanding balances at 6/30/2015, but overstates
Slide 24: We live our values, foster a culture of success
24 We live our values, foster a culture of success and work collaboratively BUSINESS & CULTURE 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 outstanding corporate citizen
Slide 25: Aimco Cares
25 AIMCO CARES AIMCO CARES, our philanthropic arm, was created to assist team members, contribute to charitable organizations, and have a positive impact on the communities where we do business. Our goals are to take care of the Aimco family and the communities in which we live and work. Aimco has b
Slide 26: Aimco Cares Charity Golf Classic
26 AIMCO CARES AIMCO CARES CHARITY GOLF CLASSIC: Since the tournament began in 2004, we have raised nearly $3 million for charitable causes. Beneficiaries have included the Tragedy Assistance Program for Survivors (TAPS), Project Sanctuary, and the Aimco Opportunity Scholarship Fund. TAPS is the fro
Slide 27: Shareholder Engagement
27 SHAREHOLDER ENGAGEMENT Routinely engage with shareholders about Aimco’s business Over the last couple of proxy seasons, we have expanded that engagement to include compensation and governance issues to ensure that Aimco is an industry leader in compensation, governance and disclosure Engage
Slide 28: Aimco Leadership
mi iw me | ma Os AIMCO LEADERSHIP
Slide 29: Board of Directors
29 BOARD OF DIRECTORS Terry, 64, is a life-long entrepreneur focused on business, politics and family. Terry has worked in REITs for more than 40 years, serving four as CEO. Through the Considine Companies, Terry has invested in real estate, television broadcasting, convenience stores, environmental
Slide 30: Board of Directors
30 BOARD OF DIRECTORS Mr. Bailey was first elected as a Director of the Company in June 2000 and is currently Chairman of the Nominating and Corporate Governance Committee and a member of the Audit and Compensation and Human Resources Committees. Mr. Bailey co-founded Cambridge Associates, LLC, an i
Slide 31: Board of Directors
31 BOARD OF DIRECTORS Mr. Keltner was first elected as a Director of the Company in April 2007 and is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Keltner served as Executive Vice President and Chief Executive Officer — Am
Slide 32: Board of Directors
32 BOARD OF DIRECTORS Mr. Martin was first elected as a Director of the Company in July 1994 and is currently Chairman of the Compensation and Human Resources Committee. Mr. Martin is also a member of the Audit and Nominating and Corporate Governance Committees and serves as the Lead Independent Dir
Slide 33: Board of Directors
33 BOARD OF DIRECTORS Mr. Miller was first elected as a Director of the Company in April 2007 and is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Miller has served as the President of Marriott Leisure since 1997. Prior to
Slide 34: Board of Directors
34 BOARD OF DIRECTORS Ms. Nelson was first elected as a Director of the Company in April 2010, Ms. Nelson serves on the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Ms. Nelson has an extensive background in commercial real estate and financial services
Slide 35: Board of Directors
35 BOARD OF DIRECTORS Mr. Stein was first elected as a Director of the Company in October 2004 and is currently the Chairman of the Audit Committee. Mr. Stein is also a member of the Compensation and Human Resources and Nominating and Corporate Governance Committees. From January 2001 until its acqu
Slide 36: Board of Directors
36 BOARD OF DIRECTORS Mr. Bailey was first elected as a Director of the Company in June 2000 and is currently Chairman of the Nominating and Corporate Governance Committee. He is also a member of the Audit, Compensation and Human Resources, and Redevelopment and Construction Committees. Mr. Bailey c
Slide 37: Board of Directors
37 BOARD OF DIRECTORS Mr. Keltner was first elected as a Director of the Company in April 2007 and is currently chairman of the Compensation and Human Resources Committee. He is also a member of the Audit, Nominating and Corporate Governance, and Redevelopment and Construction Committees. Mr. Keltne
Slide 38: Board of Directors
38 BOARD OF DIRECTORS Mr. Martin was first elected as a Director of the Company in July 1994 and serves as the Lead Independent Director. Mr. Martin is also a member of the Audit, Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees. He
Slide 39: Board of Directors
39 BOARD OF DIRECTORS Mr. Miller was first elected as a Director of the Company in April 2007 and is currently Chairman of the Redevelopment and Construction Committee. Mr. Miller is also a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr.
Slide 40: Board of Directors
40 BOARD OF DIRECTORS Ms. Nelson was first elected as a Director of the Company in April 2010 and is currently a member of the Audit, Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees. Ms. Nelson has an extensive background in commer
Slide 41: Board of Directors
41 BOARD OF DIRECTORS Mr. Stein was first elected as a Director of the Company in October 2004 and is currently the Chairman of the Audit Committee. Mr. Stein is also a member of the Compensation and Human Resources, Nominating and Corporate Governance, and Redevelopment and Construction Committees.
Slide 42: Executive Team: Paul Beldin
42 Paul was promoted to Executive Vice President and Chief Financial Officer in September 2015. He joined Aimco in 2008 as Senior Vice President and Chief Accounting Officer. Prior to joining Aimco, from October 2007 to March 2008, Paul served as Chief Financial Officer of APRO Residential Fund. Pri
Slide 43: Executive Team: John E. Bezzant
43 EXECUTIVE TEAM John was appointed Executive Vice President and Chief Investment Officer in July 2013. He joined Aimco as Senior Vice President - Development in June 2006. John is responsible for portfolio management, including dispositions, acquisitions and capital investments. Prior to joining t
Slide 44: Executive Team
44 EXECUTIVE TEAM Lisa was promoted to Aimco’s Executive Vice President, General Counsel and Secretary in December 2007. Lisa is responsible for Aimco’s legal, insurance and risk management functions and has executive responsibility for human resources, compliance and asset management. Lisa was also
Slide 45: Executive Team
45 EXECUTIVE TEAM Miles was promoted to Executive Vice President and Chief Administrative Officer in December 2007. He is responsible for administration, government relations, communications, and special projects, and chairs the Senior Leadership Team. Miles joined Aimco in August 2001 as Executive
Slide 46: Executive Team
46 EXECUTIVE TEAM Patti was promoted to Executive Vice President — Securities and Debt in February 2003 and Treasurer in January 2005 and assumed responsibility for Redevelopment activities in November 2014. She is responsible for debt financing activities, including property debt and corporate fina
Slide 47: Executive Team
47 EXECUTIVE TEAM Keith was born in Pittsburgh, Pennsylvania and is a die hard Steelers fan. In 1976 his family moved to Southern California where he quickly acclimated to the beautiful beaches and took up his passion for surfing. Keith is married to his wonderful wife Leyla, and they have two beaut
Slide 48: Senior Leadership Team: Elizabeth Coalson
48 SENIOR LEADERSHIP TEAM Elizabeth joined Aimco in 2005 as a Director of Accounting and was promoted to Vice President – Investor Relations in January 2007. Prior to joining Aimco, Elizabeth spent six years with AngloGold North America, during which time she held several positions including Assista
Slide 49: Senior Leadership Team: Steve Cordes
49 SENIOR LEADERSHIP TEAM Since August 2013, Steve has been responsible for redevelopment activities on the West Coast. Prior to leading West Coast Redevelopment, Steve held several roles within Aimco. He joined Aimco in January 2001 as Vice President-Finance and was promoted to Senior Vice Presiden
Slide 50: Senior Leadership Team
50 SENIOR LEADERSHIP TEAM Steve joined Aimco as Senior Vice President of Property Taxes in March 2003. Steve is responsible for all aspects of real estate tax, including appeals, acquisition and disposition analysis, and accruals/budgeting. Prior to joining Aimco, Steve was the National Director and
Slide 51: Senior Leadership Team: Mike DiFranco
51 SENIOR LEADERSHIP TEAM Mike is a native New Yorker blended with a little Texas two-step as a result of having attended Texas A&M University as an undergraduate and then The University of Texas School of Business. Mike joined Aimco in 2005 as an analyst and is currently a Senior Vice President of
Slide 52: Senior Leadership Team
52 SENIOR LEADERSHIP TEAM Michael has been a leader in the construction and redevelopment arena since 1994, when he started as a Project Manager for HBI Construction in California, heading the redevelopment of California’s Costco stores. He was hired by Catellus in 2002 to lead its construction grou
Slide 53: Senior Leadership Team
53 SENIOR LEADERSHIP TEAM Andrew was promoted to Senior Vice President and Chief Accounting Officer in September 2015. Andrew joined Aimco in 2007 as a Director of Accounting and was promoted to Vice President - SEC Reporting, later that year. In 2014, Mr. Higdon’s responsibilities expanded to inclu
Slide 54: Senior Leadership Team: Evan Hoffmann
54 SENIOR LEADERSHIP TEAM Evan was promoted to SVP in September of 2015 and leads the Revenue Management and Marketing Teams. He moved to Colorado in 2008 to join Aimco, as he expanded his expertise in the Revenue Management discipline to the multi-family sector. Evan came to Aimco with over 15 year
Slide 55: Senior Leadership Team: Kristina Howe
55 SENIOR LEADERSHIP TEAM Kristina is a Senior Vice President of Operations and leads the Procurement, Shared Services and Process Improvement teams. Over her 13 years at Aimco, she has also worked in Redevelopment and Asset Management. Prior to joining the team at Aimco, Kristina was a management c
Slide 56: Senior Leadership Team
56 SENIOR LEADERSHIP TEAM Jennifer was promoted to Senior Vice President, Human Resources, in August 2009 and leads Aimco’s Human Resources department. She joined Aimco in August 2004 as Senior Counsel responsible for labor and employment law matters, and was promoted to Vice President and Assistant
Slide 57: Senior Leadership Team: Stephanie Lambert
57 SENIOR LEADERSHIP TEAM Stephanie joined Aimco in 2001 and was named Senior Vice President in 2013. She has held a number of positions while at Aimco, including Assistant Controller, Controller, Vice President of Financial Reporting and Vice President of Finance. She led the Financial Planning & A
Slide 58: Senior Leadership Team: Didi Meredith
58 SENIOR LEADERSHIP TEAM Didi is a Southern California native and began her career in multifamily real estate in 1994. She joined Aimco in June 2006 as a Regional Property Manager for the San Diego portfolio. Didi transitioned into overseeing the Orange County and Los Angeles portfolios and in 2012
Slide 59: Senior Leadership Team: Leeann Morein
59 SENIOR LEADERSHIP TEAM Leeann, a Colorado native, returned home after a 20 year “hiatus” in California to join Aimco as its first Chief Financial Officer in 1994 and to marry her husband, Neil. As an Aimco veteran, Leeann is currently responsible for compliance, regulatory affairs and revenue man
Slide 60: Senior Leadership Team
60 SENIOR LEADERSHIP TEAM Kevin joined Aimco in 2007 as a Regional Property Manager for the South Florida region. In 2009, Kevin was promoted to Director of Operations for the Phoenix portfolio. In 2010 Kevin relocated again to San Francisco overseeing the Northern California portfolio and in less t
Slide 61: Senior Leadership Team: Susan Pickens
61 SENIOR LEADERSHIP TEAM Susan started her multifamily career with Insignia Financial Group in 1994 as the Corporate Accounts Receivable Supervisor. She found her passion for defining and designing automated business processes through multiple system implementations for Aimco over the years, includ
Slide 62: Senior Leadership Team: Wes Powell
62 SENIOR LEADERSHIP TEAM Wes was appointed Senior Vice President – Redevelopment East in August of 2013. Wes is responsible for all redevelopment and capital enhancement projects located within the eastern half of the country. Wes joined Aimco in January of 2004 and has held numerous positions duri
Slide 63: Senior Leadership Team
63 SENIOR LEADERSHIP TEAM Patti Shwayder joined Aimco as Senior Vice President for Government Relations and Communications in October 2002 with 25 years of experience in federal, state and local government and non-profit management. Patti spearheads the company’s work with elected officials and gove
Slide 64: Senior Leadership Team: Lynn Stanfield
64 SENIOR LEADERSHIP TEAM Lynn has over nineteen years of experience in the real estate industry, primarily with Aimco. Lynn joined Aimco as a Tax Manager in March of 1999, was promoted to Vice President - Tax Planning and Compliance in April of 2003 and then to Senior Vice President in January of 2
Slide 65: Forward-looking statements
65 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 2015 financial and operating results; Aimco's development and redevelopment project investm
Apartment Investment & Management — Investor Day (October 2015) on 6ix