Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Citi Global Property CEO Conference 2019
18 slides from Apartment Investment And Management's conference presentation, Mar 1, 2019
Slide 1: Citi Global Property CEO Conference Investor Presentation March 2019
LATROBE Washington D.C. FOXCHASE Alexandria, VA AVERY ROW Arlington, VA Aimco Portfolio within 8 miles of Amazon’s planned HQ2 site MERRILL HOUSE in Arlington, VA Falls Church, VA 5 Properties 2,654 Apartment Homes 5% of Aimco GAV Citi Global Property CEO Conference Investor Presentation March 2019
Slide 2: Creating Value Over Time: The Record
CREATING VALUE OVER TIME: THE RECORD Aimco’s primary measure of long-term financial performance is Economic Income. Measuring Aimco shareholder value creation by the per share change in Net Asset Value (NAV) plus Cash Dividends paid, Aimco Economic Income has compounded: (1) o Since IPO through 3Q 2
Slide 3: Creating Value Over Time: The Promise
CREATING VALUE OVER TIME: THE PROMISE Going forward, Aimco maintains its commitment to excellence in operations, disciplined capital allocation via its paired trade philosophy, and guarding its safe and flexible balance sheet. • At the midpoint, 2019 Same Store revenue guidance is 30 bps above peer
Slide 4: Aimco's Earnings Quality
AIMCO’S EARNINGS QUALITY • Aimco’s earnings contribution from real estate operations has steadily increased since the planned exit from the affordable and asset management businesses was announced in 2011, and is expected to be 98% of AFFO in 2019. o Aimco’s 2019 Same Store portfolio is expected to
Slide 5: Operations Update: 2019 Same Store Outlook
OPERATIONS UPDATE 2019 SAME STORE OUTLOOK • Aimco anticipates market rental rate growth to be SIMILAR to 2018, with EARN-IN from Aimco’s year-end 2018 rent roll contributing 150 bps to 2019 Same Store revenue growth, 30 bps greater than for 2018. • Aimco started 2019 with January Same Store average
Slide 6: Innovation & Productivity
INNOVATION & PRODUCTIVITY • Focus on efficient, productive operations: Aimco uses Controllable Operating Expenses ("COE"), defined as property level expenses before taxes, insurance, and utilities, as a measure of operating efficiency. o 2019 expected COE growth of 50 bps. o For the five years ended
Slide 7: Redevelopment Provides Consistent Value Creation
REDEVELOPMENT REDEVELOPMENT PROVIDES CONSISTENT VALUE CREATION • Over the past five years, Aimco spent $1B on Redevelopment and Development, creating ~$400M of value. • In 2019, Aimco plans to spend $225-$275M on Redevelopment and Development, targeting 40% value creation. • Of the planned spending
Slide 8: Redevelopment Cycle
REDEVELOPMENT CYCLE SMALL PHASE REDEVELOPMENTS - INVENTORY MANAGEMENT • When practical, Aimco prefers small phase redevelopments which provide optionality and flexibility to meet market demand. • Managing inventory to meet demand allows for steady and predictable NOI growth proportionate and in sync
Slide 9: Portfolio Management: Capital Allocation Decisions
PORTFOLIO MANAGEMENT CAPITAL ALLOCATION DECISIONS • Aimco sold ~$1.0B of lower-rated properties in 2018 and January 2019, with another $0.3B expected to close in March 2019. Aimco also issued $65M of OP units in 2018 at NAV of $53 per share(1) for a total $1.3B in sources of capital. • Aimco reinves
Slide 10: Portfolio Management: 2019 Capital Plans
PORTFOLIO MANAGEMENT 2019 CAPITAL PLANS Aimco allocates capital in accordance with its FCF IRR paired trade discipline and on a leverage-neutral basis. Aimco considers unlevered risk- Aimco considers portfolio implications Aimco considers its cost of unlevered adjusted returns from a menu of capital
Slide 11: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET AIMCO LIMITS RISK THROUGH BALANCE SHEET STRUCTURE • Employ low leverage: 33% loan-to-value at 4Q 2018 • Finance primarily with non-recourse property debt and preferred equity: 91% and 5%, respectively, of Aimco total leverage at 4Q 2018 • Maintain financial flexibility: •
Slide 12: High Quality Balance Sheet: Refunding Risk
HIGH QUALITY BALANCE SHEET Refunding risk is lower than total leverage due to principal At 4Q 2018 Aimco had property debt at 33% loan-to-portfolio amortization paid from retained earnings, and because Aimco’s value, refinancing activity in 2018 provides a prospective perpetual preferred equity is n
Slide 13: Team and Culture
TEAM AND CULTURE Focus intentionally on a collaborative and productive culture based on respect for others, 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 foundati
Slide 14: Aimco Senior Leadership Team
AIMCO SENIOR 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 Chi
Slide 15: Potential 2019 Risks
POTENTIAL 2019 RISKS Aimco regularly assesses risks that may impact its business and takes prudent precautions to ensure that the company is well-positioned. Mitigating Factors • Aimco maintains a portfolio that is diversified by geography and price point to mitigate the New Supply impact of competi
Slide 16: Exposure to New Supply
EXPOSURE TO NEW SUPPLY • Aimco considers competitive new supply to be significant primarily to “A” price point communities in submarkets with projected completions of more than 2.0% of existing stock. Based on third-party forecasts of new supply, Aimco properties representing 19% of GAV may be so af
Slide 17: Why Invest in Aimco?
WHY INVEST IN AIMCO? • Best-in-Class Operations: Lower resident turnover through intentional focus on customer selection and satisfaction drives peer- leading margins. • Paired-Trade Capital Allocation Discipline: Aimco adheres to a disciplined paired-trade strategy comparing expected unlevered retu
Slide 18: 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 2019 expectations, including but not limited to:
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