Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — BMO North American Real Estate Conference 2010
30 slides from Apartment Investment And Management's conference presentation, Sep 16, 2010
Slide 1: Apartment Investment and Management Company - BMO North American Real Estate Conference
1 AIMCO Apartment Investment and Management Company BMO North American Real Estate Conference September 2010
Slide 2: Forward-looking statements
2 This presentation contains forward-looking statements within the meaning of the federal securities laws, including statements regarding projected results and specifically forecasts of 2010 financial results. These forward-looking statements are based on management's judgment as of this date and in
Slide 3: Aimco Overview
3 Aimco Overview Flamingo South Beach Miami, FL 2900 on 1st Seattle, WA Palazzo East at Park La Brea Los Angeles, CA Aimco is a multifamily REIT focused on owning, managing and redeveloping properties in the 20 largest markets in the United States Initial Public Offering completed in 1994 with $315
Slide 4: Investing in Aimco: Simple Business Strategy
4 Investing in Aimco Aimco Has a Simple Business Strategy Own and operate 100,000 B/B+ quality apartments Well located in 20 largest U.S. markets Opportunistic redevelopment Finance with property-level, non-recourse, long-dated, fixed-rate and amortizing debt
Slide 5: Aimco Management Team
5 Aimco Management Team Terry Considine Chairman & CEO Ernie Freedman EVP & CFO Tim Beaudin President & COO Lisa Cohn EVP & General Counsel Miles Cortez EVP & CAO Property Operations Asset Management Redevelopment Acquisitions/Dispositions Legal Human Resources Risk Finance Accounting Investor Relat
Slide 6: Aimco Key Valuation Factors
6 Aimco Key Valuation Factors Aimco's shares are priced at a discount to the shares of apartment REIT peers. Aimco has the opportunity to grow through internal and external resources. Aimco holds high quality assets. Aimco is a reliable operator. Aimco has limited balance sheet risk. Aimco has high
Slide 7: Aimco Equity Valuation
Aimco Equity Valuation 7 Aimco's shares are priced at a discount to the shares of apartment REIT peers * Green Street Advisors, Residential REITs August '10 Update, August 20, 2010. Aimco does not endorse or affirm the estimate of net asset value by Green Street Advisors. This third party estimate i
Slide 8: Aimco Growth Drivers
8 Aimco Growth Drivers Internal: Rent growth - Aimco's diversified portfolio provides for projected revenue growth that is consistent with peers and is less volatile. Redevelopment - Aimco has a pipeline of assets that have the potential to generate redevelopment yields at a premium to acquisitions.
Slide 9: Projected Revenue Growth in Aimco's Markets
9 Projected Revenue Growth in Aimco's Markets * Represents the average of 2Q 2010 projections published by REIS, PPR and AXIOMetrics, which have been weighted by Aimco based on Aimco's revenue allocation on a market-by-market basis. Aimco does not endorse or affirm the projected revenue growth publi
Slide 10: Growth Projections Comparable to Peer Group
10 Growth Projections Comparable to Peer Group * Represents revenue growth projections published by AXIOMetrics as of 2Q 2010. Note that AXIOMetrics' market weighting methodology differs from Aimco's methodology and, as such, the growth figures in the above table differ slightly from those on the pr
Slide 11: Growth Projections Comparable to Peer Group
11 * Represents average revenue growth computed by Aimco based on 1) the average of revenue growth projections published by REIS, PPR and AXIOMetrics as of 2Q 2010, and 2) peer market allocation based on 2Q 2010 company reports. Aimco does not endorse or affirm the projected revenue growth published
Slide 12: Aimco Holds High Quality Assets
12 Aimco Holds High Quality Assets Focus on B/B+ quality apartments Concentrate capital in 20 target markets (with a limited allocation to affordable apartments) Continually improve portfolio through capital recycling
Slide 13: Aimco Asset Quality
13 Aimco Asset Quality We define quality by comparing rents to local market averages: A-quality: rents greater than 125% of market average B-quality: rents 90% - 125% of market average C-quality: rents less than 90% of the market average We prefer B/B+ quality apartments because: Rents are less vola
Slide 14: Asset Quality in Aimco's Markets
14 Average 2Q 2010 rents for all conventional properties held at quarter-end, including same store properties, redevelopment properties and other conventional properties. See Supplemental Schedule 7(a) to Aimco's 2Q 2010 earnings release for additional information. 2Q 2010 REIS Asset Quality in Aimc
Slide 15: Aimco Asset Quality Compared to Peers
15 * 2Q 2010 Average Rents as % of Market in Aimco Target Markets for peer companies has been computed based on 1) local average market rents as reported by REIS as of 2Q 2010 and 2) 2Q 2010 average rents by market as reported by peer companies, which Aimco has weighted by revenue in each of Aimco's
Slide 16: Capital Allocation
16 Capital Allocation 88% of total capital is invested in conventional real estate. 88% of conventional property capital is concentrated in Aimco's 20 target markets. Quality portfolio concentrated in 20 target markets
Slide 17: Capital Recycling
17 Capital Recycling Reinvestment: Increase investment in conventional assets located in priority markets. Redevelopment and enhancement of existing assets. Acquisition of B/B+ quality assets. Continually improve portfolio through capital recycling Objectives: Increase Aimco rents compared to local
Slide 18: Conventional Portfolio Transformation
18 Conventional Portfolio Transformation Excludes casualties and property management expenses. NOI less assumed capital replacement expenditures of $850 per unit. More than $8 billion of sales of lower-rated assets from 2004 through 2009 have improved overall portfolio quality. Average rents ? 41% N
Slide 19: Consistent Investment in Physical Assets
19 Consistent Investment in Physical Assets Sustained rate of reinvestment in asset quality, notwithstanding the economy. Invested approximately $2.2 billion in the portfolio since 2005. Continued investment in properties through: Planned Replacement Program Energy investments Redevelopment where ap
Slide 20: Aimco Operating Results
20 Aimco Operating Results Operating performance exceeds peer average year-to-date and over the last one, three and five years. * Represents the average of results reported by AvalonBay, Camden, Equity Residential, Essex, Home Properties and UDR. Aimco is a reliable operator
Slide 21: 2010 Property Operations Objectives
21 2010 Property Operations Objectives Maximize revenues while reducing costs Average Daily Occupancy (ADO) - Maintain ADO above 95% with continued high resident quality standards. Year-to-date 2010 ADO was 95.8%. Rates - Take advantage of higher demand markets with higher occupancies to increase ra
Slide 22: Diversified Portfolio Reduces Volatility
22 Diversified Portfolio Reduces Volatility During 2009, NOI was essentially flat across our diversified portfolio. Expect 2010 total portfolio NOI to be -0.5% to 0.5% compared to 2009. Stability of Affordable NOI provides offset to volatility in Conventional Same Store NOI. Lease-up of short cycle
Slide 23: 2010 Same-Store Portfolio Performance
23 2010 Same-Store Portfolio Performance Year-to-date, Aimco's revenue and NOI performance is second only to Home Properties. Expect 2010 Same-Store NOI to be -2.0% to -1.0% compared to 2009 with revenue -1.0% to -0.5% and expenses flat to up 1.0%.
Slide 24: August 2010 Property Operations Update
24 August 2010 Property Operations Update Rental rates for renewals have been positive since February. Strong Average Daily Occupancy provides support for rental rates. Rental rates for new leases remain negative compared to rental rates on expiring leases, but the rate of decline has eased and is p
Slide 25: Aimco Balance Sheet Safety
25 Aimco Balance Sheet Safety Aimco has limited balance sheet risk Property debt and perpetual preferred securities provide balance sheet safety. Non-recourse property debt ? limited entity risk. Single-property loans with 60% initial LTV. Discipline of amortization to <50% LTV at maturity. Long-dat
Slide 26: Aimco Financing Strategy
26 Aimco Financing Strategy For purposes of this analysis, peer group is comprised of Camden, Equity Residential, Essex, Home Properties, UDR. Data as of 6/30/2010 as reported by SNL Financial. Represents balances as of June 30, 2010 adjusted for July 2010 repayment of remaining balance of $25 milli
Slide 27: Improving Coverage to Target
27 Improving Coverage to Target Target leverage: EBITDA coverage of interest: 2.25x EBITDA coverage of interest and preferred dividends: 1.80x Current leverage: EBITDA coverage of interest: 2.04x EBITDA coverage of interest and preferred dividends: 1.67x Improve coverage, primarily through cyclical
Slide 28: 2010 Balance Sheet & Liquidity
28 2010 Balance Sheet & Liquidity Uses largely balanced with internal sources of cash. No debt maturities in 2010. Limited 2011 maturities ($105 million with $80 million currently rate- locked). Continue to focus on loans maturing in 2012 to 2014 to lock in current low interest rates. Line of credit
Slide 29: G&A Expenses
G&A Expenses 29 G&A expense reductions have "right-sized" Aimco's overhead * Represents annualized YTD 2Q 2010 G&A expenses as a percentage of annualized YTD 2Q 2010 property revenues. YTD 2Q 2010 data as reported by SNL Financial.
Slide 30: 2010 Guidance
2010 Guidance Y2010 Guidance FFO Total Portfolio NOT sss NOI growth YOY Revenue growth YOY Expense growth YOY Occupancy Original $25 - $1.35 1.0% to -3.0% -2.0% to -5.0% -0.5% to -2.0% 1.5% to 2.5% 94.5% to 95.5% -0.5% to 0.5% =1.0% to -2.0% -0.5% to -1.0% 0.0% to 1.0% 95.0% to 95.5%
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