Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Nareit REITweek June 2016
29 slides from Apartment Investment And Management's conference presentation, Jun 7, 2016
Slide 1: Nareit REITweek June 2016
NAREIT REITWEEK JUNE 2016 1
Slide 2: Aimco Value Creation: Economic Income
2 AIMCO VALUE CREATION ECONOMIC INCOME: year-over-year NAV growth plus annual dividend 2015 Economic Income: $5.28 per share* 14% Return on Beginning-of-Year NAV $3.10 Property Operations Aimco's 2015 Same Store NOI growth of 5.6% created ~$3.00 of NAV per share. $0.50 Redevelopment Annual investmen
Slide 3: Strategic Areas of Focus
3 STRATEGIC AREAS OF FOCUS REDEVELOPMENT • Redevelopment is a core business activity • Robust pipeline of redevelopment opportunities within existing portfolio • Occasional development when warranted by risk-adjusted returns • Above-average property operating results over cycle • Above-average resid
Slide 4: Property Operations Strategy
PROPERTY OPERATIONS STRATEGY 4 STRATEGY PROVIDES FOR • 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 operating results: Renewal
Slide 5: Customer satisfaction and resident retention
• Focus on customer satisfaction and resident retention: from 2011 through 2015, Aimco turnover averaged 47% compared to the peer average of 53%(1). • Aimco receives ~100,000 customer surveys received every year: Customer satisfaction has averaged more than 4.0 (on a 1 to 5 scale) for the past ten q
Slide 6: Same Store Rental Rates
SAME STORE RENTAL RATES 6 Results are for Aimco's 1Q 2016 Same Store portfolio. • Aimco diversification by market and price point continues to provide balanced rent growth. As stated on our 1Q 2016 earnings call, 2Q and 3Q new lease pricing are adversely affected by the relocation of lease expiratio
Slide 7: Demographics Support Strong Demand
7 DEMOGRAPHICS SUPPORT STRONG DEMAND • Historically, 64% of people aged 20 to 34 have opted for rental housing. • If propensity to rent remains, people in this age cohort could add 650k people to the rental population over the next 10 years. • Historically, about 21% of people over the age of 55 hav
Slide 8: Peer-Leading Expense Control
PEER-LEADING EXPENSE CONTROL 8 * Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. Peer 2016E is based on the most recent company guidance as of 5/16/2016. Data Sources: SNL Financial, company reports. • Focus on efficient operations: Over the past th
Slide 9: Property Operations Forecast
Looking ahead: Aimco expects 2016 same-store NOI growth above trend due to solid demand for apartments and our continued focus on cost control. Our 2017 Forecast assumes: • Renewal rents increase at 4.5% and New Lease rents increase at 3.9%, the average of submarket growth rates projected by REIS an
Slide 10: Lease-Up Communities
• During 2016 and 2017, Aimco expects to lease-up three newly-constructed communities, which communities are projected to make a neutral contribution to NOI in 2016, and to contribute $0.12 per share to 2017 NOI. Sensitivity to assumptions: • If the lease-up of these communities is six months faster
Slide 11: Redevelopment Strategy
REDEVELOPMENT STRATEGY 11 BUY RIGHT • Own and operate real estate in special locations where land value appreciates faster than buildings depreciate • Higher-growth markets support strategic redevelopment opportunities REDEVELOP WITHIN PORTFOLIO • Reposition existing operating properties through pha
Slide 12: Redevelopment Value Creation
12 REDEVELOPMENT VALUE CREATION NOI STABILIZED Communities Net Investment 4 $167M OCCUPANCY STABILIZED Communities Net investment 3 $583M UNDER CONSTRUCTION Communities Estimated net investment 2 $160M TOTAL / WEIGHTED AVERAGE Communities Net Investment Actual / projected value creation as a % of ne
Slide 13: 2016 Redevelopment Focus
13 2016 REDEVELOPMENT FOCUS NOI STABILIZATION OF COMPLETED CALIFORNIA REDEVELOPMENTS BAY AREA Preserve at Marin (126 Apartments) PHILADELPHIA The Sterling (Expanded Scope) Park Towne Place (Expanded Scope) GREATER LA Lincoln Place (795 Apartments) BOSTON One Canal (310 Apartments) SAN DIEGO Ocean Ho
Slide 14: What's Next for Redevelopment?
14 WHAT'S NEXT FOR REDEVELOPMENT? REDEVELOPMENT PIPELINE BAY AREA 707 Leahy (110 Apartments) CHICAGO Yorktown Apartments (364 Apartments) Yorktown Apartments Expansion (~100 Apartments) MIAMI Yacht Club at Brickell (357 Apartments) PHILADELPHIA Park Towne Place (Expanded Scope) DENVER Eastpointe (14
Slide 15: Portfolio Strategy
15 PORTFOLIO STRATEGY To continuously upgrade our portfolio through redevelopment, property upgrades, acquisitions, and limited development activity. • We do this through a strict paired-trade discipline with: • DISPOSITION of 5-10% of our portfolio annually, primarily from submarkets with lower rev
Slide 16: Portfolio Strategy Execution
PORTFOLIO STRATEGY EXECUTION 16 • Aimco targets the disposition of 5-10% of our portfolio annually. On average, during the last three years, we have disposed of 5% of our portfolio annually. • We fund redevelopment, development and property upgrades from the sale of 2-3% of assets each year (~$200-$
Slide 17: Portfolio Transformation
• Aimco's portfolio management activities have resulted in a significant improvement in portfolio quality. • Over the last three years, Aimco has exited: Dallas; Daytona Beach; Detroit; Fort Wayne, IN; Grand Rapids, MI; Houston; Jacksonville; Lexington, MD; Naples, FL; Orlando; Palm Beach, FL; Phoen
Slide 18: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET • During the last three years, Aimco has reduced leverage and added financial flexibility by creating an unencumbered pool of assets. Both S&P and Fitch rate the Aimco balance sheet "investment grade." • Aimco leverage is primarily ten year property debt that prices today
Slide 19: High Quality Balance Sheet: Leverage at Maturity
• Aimco Debt and Preferred Equity to EBITDA of 6.8x reflects outstanding balances at 3/31/2016, but overstates the refunding risk of our leverage. • Our property debt balances at maturity are more than $700 million lower than quarter-end 2016 balances as principal amortization is paid from retained
Slide 20: Leverage outlook and exposure to rates and capital markets
• Looking ahead: We expect the quantum of leverage to remain fairly constant over the next several years and that our leverage ratios will improve due to NOI growth in our same store portfolio and the earn-in from stabilization of redevelopments and lease-up properties. • Exposure to interest rates:
Slide 21: We Live Our Values
Integrity Respect Collaboration Customer Focus Performance 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 citizenship. Aimco Cares In 2014, we celebr
Slide 22: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Terry is a life-long entrepreneur focused on business, politics and family. Terry has been an active real estate investor for more than 45 years, serving four REITs as CEO. Through the Considine Companies, Terry has invested in real estate, television broadcasting, conve
Slide 23: Aimco Senior Leadership Team: Paul Beldin
AIMCO SENIOR LEADERSHIP TEAM 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
Slide 24: Aimco Senior Leadership Team: John E. Bezzant
AIMCO SENIOR LEADERSHIP 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 t
Slide 25: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Lisa has served as Aimco's Executive Vice President, General Counsel and Secretary since 2007. Lisa is responsible for Aimco's legal, insurance and risk management functions and has executive responsibility for human resources, compliance, commercial and ancillary income
Slide 26: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP 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
Slide 27: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP 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 cor
Slide 28: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP 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 hav
Slide 29: Forward Looking Statements & Other Information
29 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: selected components of Pro forma FFO and AFF
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