Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — NAREIT Institutional Investor Forum June 2005
20 slides from Apartment Investment And Management's conference presentation, Jun 8, 2005
Slide 1: NAREIT - June 2005
NAREIT - June 2005
Slide 2: Table of Contents
Table of Contents A. Aimco Overview B. Seven Ways Aimco Makes Money C. 2005 Outlook Assumptions D. Summary Message
Slide 3: A. Aimco Overview
A. Aimco Overview Largest owner/operator of multi-family properties in U.S. Own approximately 214,000 units, 1,000 properties Manage an additional 48,000 units (principally asset managed) Enterprise value more than $10 billion, real estate under Aimco management approximately $13 billion S & P 500 c
Slide 4: A. Aimco Overview: Well diversified asset base
A. Aimco Overview Well diversified asset base A to C properties Focus on B properties in A locations Conventional portfolio includes: Core Property Portfolio with 381 properties having 115,000 units in 38 markets Non-Core Portfolio with 214 properties having 51,000 units in 32 markets (to be sold ov
Slide 5: B. Seven Ways Aimco Makes Money
B. Seven Ways Aimco Makes Money Operating multi-family properties Conventional Affordable University Communities Generating fee income Redeveloping / reinvesting in properties Managing portfolio Increasing land values through entitlements Managing cost of capital Managing G&A / productivity
Slide 6: 1. Operating Multi-family Properties: Conventional Operations
1. Operating Multi-family Properties Conventional Operations: Objective - Drive NOI growth in excess of industry average, returning Aimco to market level performance. Continued improvement in operations remains a key source of upside today Background: In early 2003, operational shortfalls became app
Slide 7: Conventional Operations - Tactics to deliver change
1. Operating Multi-family Properties Conventional Operations - Tactics to deliver change Phase I revenue initiatives largely complete: Processes in place for continued improvement in resident quality, pricing, sales and marketing In 1Q05 achieved: 4.3% YOY increase in revenue, largest in sector near
Slide 8: Conventional Operations - Tactics to deliver change (expense side)
1. Operating Multi-family Properties Conventional Operations - Tactics to deliver change Focus now on initiating Phase I expense-side programs in 2005 including: Local vendor consolidation: pilot program results positive and have begun implementation nationwide eProcurement system: better cost contr
Slide 9: 1. Operating Multi-family Properties: Affordable and University
1. Operating Multi-family Properties Affordable: Maintain stable occupancy while growing rental rates through HUD-subsidized increases University: Maintain academic year occupancy at 93-plus% Increase revenue through offering of additional services such as wireless Internet
Slide 10: 2. Fee Income
2. Fee Income Fee income: Generated from tax credit syndication, dispositions, refinancings Aimco owned properties are a captive pipeline of ongoing activity Strong pipeline increases predictability of income stream Grow the business: David Robertson now focused entirely on growing Aimco Capital as
Slide 11: 3. Redevelopment
3. Redevelopment Current projects: Belmont Place in Marietta, Georgia. Mid- 2005 completion. Total $34 million Flamingo South Beach, a $284 million redevelopment project expected to stabilize in 2Q05. Current occupancy is 87% 21 active conventional moderate-sized projects with total expected expendi
Slide 12: 4. Portfolio Management
4. Portfolio Management Core and non-core portfolios: Target approximately 40 markets total Expect to exit an additional 10-12 markets in 2005 Higher expected growth in core portfolio Palazzo East - Los Angeles, CA Acquired 1Q05
Slide 13: 4. Portfolio Management: Largest conventional markets
4. Portfolio Management Current largest conventional markets: Washington DC - 12,000 units; 11% NOI Los Angeles - 5,000 units; 7% NOI New England - 5,500 units; 6% NOI Philadelphia - 6,000 units; 6% NOI Indianapolis - 13,500 units; 5% NOI Investing in desirable markets yet maintaining investment foc
Slide 14: 4. Portfolio Management: Capital recycling success
4. Portfolio Management Capital recycling success: Los Angeles example Sold Warner Center, Topanga 49 & Villa Azure for $473 mm, $242k per unit, or 4.3% average cap rate and $1,400 average rent Acquired three Park La Brea phases for $417 mm, $302k per unit. These are new, in stronger locations with
Slide 15: 5. Entitlement
5. Entitlement Realize upside in land values through increasing density of use Focus on locations where land is scarce Low density properties
Slide 16: 6. Cost of Capital
6. Cost of Capital Maintain or improve financial ratios through increased profitability of operations Maintain or improve 1.7x debt service coverage In 2005, refinance $102 mm maturing loans with current rate of 7.62% with forecast new rate of 5.75%. Evaluate additional refinancing opportunities Mai
Slide 17: 7. G&A / Productivity
7. G&A / Productivity Objectives for improvement Implementing Quality initiative to drive improved and consistent processes throughout the company Increase the use of technology to increase efficiency Increase use of variable compensation to provide incentive for desired actions and results Implemen
Slide 18: C. 2005 Outlook (Guidance Assumptions)
C. 2005 Outlook (Guidance Assumptions) Aimco expects to achieve stronger Same Store performance: Through earn-in of occupancy levels achieved in the second half of 2004 2005 average occupancy guidance of 91.9% is 100 bps over fourth quarter Moderate rent growth of approximately 1% Palazzo East acqui
Slide 19: D. Summary Message
D. Summary Message Biggest near term drivers of FFO growth: Improve operations A 1% increase in occupancy, annualized = $0.10 FFO per share A 1% increase in rental rate, annualized = $0.10 FFO per share Drive expense savings through scaled purchasing Lease-up Palazzo East and completed redevelopment
Slide 20: This Presentation Contains Forward-looking Statements
This Presentation Contains Forward-looking Statements This presentation contains forward-looking statements, including statements regarding future results. These statements are subject to certain risks and uncertainties, including but not limited to Aimco's ability to maintain occupancy, maintain an
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