Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (September 2016)
31 slides from Apartment Investment And Management's investor presentation, Sep 8, 2016
Slide 1: Investor Presentation September 2016
1 INVESTOR PRESENTATION SEPTEMBER 2016 Preserve at Marin, Corte Madera, CA
Slide 2: Aimco Value Creation
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
4 PROPERTY OPERATIONS STRATEGY 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: Strong Operating Performance
5 STRONG OPERATING PERFORMANCE Revenue Growth Guidance: We remain on track to achieve our 2016 revenue growth guidance of 4.5% to 5.0%. • With strong rent growth already embedded in our transacted leases, approximately 75% of the revenue growth for the balance of the year is locked in based on Augus
Slide 6: Operating results versus peers
6 (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. Source for peer information: Bank of America Merrill Lynch. (2) Source: SNL Financial. Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. (3) Sourc
Slide 7: Peer-Leading Expense Control
7 PEER-LEADING EXPENSE CONTROL • Focus on efficient operations: Over the past three years, the compound annual growth rate for Aimco's property operating expenses before taxes, insurance, and utilities ("COE") is 0.8% and over the last nine years, the compound annual growth rate for Aimco's COE is n
Slide 8: Lease-Up Communities
8 • The 2016 and 2017 Aimco plan includes the lease-up of 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. • The lease-up at Vivo, located in Cambridge, MA, was completed in 2Q 2016, two
Slide 9: Redevelopment Strategy
9 REDEVELOPMENT STRATEGY BUY RIGHT • Own and operate real estate in special locations where land value appreciates faster than buildings depreciate • Higher rent growth markets support strategic redevelopment opportunities REDEVELOP WITHIN PORTFOLIO • Reposition existing operating properties through
Slide 10: Redevelopment Value Creation
10 REDEVELOPMENT VALUE CREATION NOI STABILIZED Redevelopment projects(1) Net investment 5 $612M OCCUPANCY STABILIZED Redevelopment projects Net investment 2 $138M UNDER CONSTRUCTION Redevelopment projects Estimated net investment 3 $236M TOTAL / WEIGHTED AVERAGE Communities Net investment Actual / p
Slide 11: 2016 Redevelopment Focus
11 2016 REDEVELOPMENT FOCUS NOI Stabilization of Completed California Redevelopment Projects BAY AREA Preserve at Marin (126 Apartments) Stabilization 3Q16 PHILADELPHIA The Sterling (Expanded Scope) Park Towne Place (Expanded Scope) GREATER LA Lincoln Place (795 Apartments) Stabilization 2Q16 The Pa
Slide 12: What's Next for Redevelopment? Redevelopment Menu
12 BAY AREA 707 Leahy Preserve At Marin Saybrook Pointe CHICAGO 100 Forest Place Evanston Place Yorktown Apartments MIAMI Bay Parc Plaza Flamingo South Beach Yacht Club at Brickell PHILADELPHIA Park Towne Place (Expanded Scope) DENVER 21 Fitzsimons Boston Lofts Eastpointe Township at Highlands GREAT
Slide 13: Portfolio Strategy
13 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 14: Portfolio Strategy Execution
14 PORTFOLIO STRATEGY EXECUTION • 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 (~$250-$
Slide 15: Portfolio Transformation
15 • 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, Orlando, Palm Beach, Tampa, FL;
Slide 16: Today's Portfolio
16 TODAY'S PORTFOLIO • Aimco emphasizes diversification by geography and by price point. • The nature of a diversified portfolio is that generally some markets accelerate while other markets decelerate. • Using blended lease rate growth for Q2 2016, roughly 45% of our target markets accelerated, 45%
Slide 17: Demand for Rentals
17 DEMAND FOR RENTALS The structure of the U.S. population supports continued strong demand for apartments. • Historically, 64% of people aged 20 to 34 have opted for rental housing(1). • If this propensity to rent continues, this age cohort would add 650k people to the rental population over the ne
Slide 18: Demand for Rentals (Cont.)
18 DEMAND FOR RENTALS (CONT.) Source: AxioMetrics. Market level data as of 2Q 2016. • Job growth also contributes to the predictable demand for apartment homes. • Forecasted 2017 job growth in Aimco markets generally outpaces supply growth. 2017 Supply and Jobs Supply Growth Job Growth Variance Miam
Slide 19: Aimco Exposure to New Supply
19 AIMCO EXPOSURE TO NEW SUPPLY (1) Source: MPF Research. Data as of 2Q 2016. (2) Based on submarket data for deliveries in the next twelve months as a percentage of existing stock, available from MPF Research. This research covers 95% of Aimco conventional apartment homes . The balance of Aimco con
Slide 20: High Quality Balance Sheet
20 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.” • In 3Q 2016, Aimco closed two fixed rate, amortizing, non-recourse
Slide 21: High Quality Balance Sheet
21 • Aimco Debt and Preferred Equity to EBITDA of 6.8x reflects outstanding balances at 06/30/2016, but overstates the refunding risk of our leverage. • Our property debt balances at maturity are more than $800 million lower than 2Q 2016 balances due to principal amortization paid from retained earn
Slide 22: Leverage outlook and capital markets exposure
22 • 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 rat
Slide 23: We Live Our Values
23 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 Through the Aim
Slide 24: Aimco Senior Leadership Team
24 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, co
Slide 25: Aimco Senior Leadership Team
25 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
Slide 26: Aimco Senior Leadership Team
26 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. Prio
Slide 27: Aimco Senior Leadership Team
27 AIMCO SENIOR LEADERSHIP TEAM Lisa has served as Executive Vice President, General Counsel and Secretary since 2007. Lisa is responsible for Aimco's legal functions and has executive responsibility for insurance and risk management, human resources, regulatory compliance, commercial and ancillary
Slide 28: Aimco Senior Leadership Team
28 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
Slide 29: Aimco Senior Leadership Team
29 AIMCO SENIOR LEADERSHIP TEAM Patti was promoted to Executive Vice President - Securities and Debt in February 2003 and added Treasurer in January 2005. Patti assumed responsibility for Redevelopment activities in November 2014. She is responsible for debt financing activities, including property
Slide 30: Aimco Senior Leadership Team
30 AIMCO SENIOR LEADERSHIP TEAM Keith was born in Pittsburgh, Pennsylvania and is a diehard 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
Slide 31: Forward Looking Statements & Other Information
31 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: 3Q and full year 2016 results, including but
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