Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Merger or Acquisition (December 2019)
9 slides from Apartment Investment And Management's merger presentation, December 2019
Slide 1: December 2019 Investor Meetings: Parkmerced Loan & Option Summary
December 2019 Investor Meetings Parkmerced Loan & Option Summary
Slide 2: Parkmerced
PARKMERCED • Parkmerced is a 3,221-apartment home community located on a 152-acre site in southwest San Francisco. • Metropolitan Life developed the property during the time before and after World War II, together with such other landmark multifamily developments as Parkchester, Riverton Houses, and
Slide 3: Parkmerced
PARKMERCED • There are 3,221 existing apartment homes at Parkmerced that are subject to City of San Francisco rent control, limiting annual rental rate increases to 60% of CPI for continuing occupancy. o Upon vacancy, the rents are reset to market. o By reason of a Development Agreement with the Cit
Slide 4: The Loan
THE LOAN • The $275M loan has a five-year primary term and accrues interest at 10% per annum. o Aimco’s loan is structurally subordinate to a five-year, $1.5B property loan that is secured by the Property and non-recourse to Aimco and the Partnership; the two loans combined total $1.775B of debt: 85
Slide 5: The Loan (cont.)
THE LOAN (CONT.) • Given the ~$325M of equity in the Partnership, the Aimco loan is well collateralized with cash flow from the property and the valuable vested rights to develop 4,093 new market rate apartment homes. • The rent controlled apartment homes provide collateral value sufficient to repay
Slide 6: The Option
THE OPTION • Aimco acquired an option, not an obligation, to acquire a 30% interest in the Partnership at an exercise price of $1M. • Given the previously mentioned ~$325M of equity in the Partnership, the option is ‘in the money’ today. • The future value of the option will come from: o The growth
Slide 7: The Option (cont.)
THE OPTION (CONT.) • The option, whether through exercise and liquidation, or exercise and participation; makes less likely that there will be a dilutive earnings “cliff” in five years upon maturity of the loan. o Based on historical revenue growth in San Francisco and the potential for better perfo
Slide 8: Summary
SUMMARY • At 10% interest, the well-secured Aimco loan to the Parkmerced partnership provides an attractive current return. • Aimco expects the loan will result in more value than the continued ownership of the properties we plan to sell to fund the loan. • Aimco believes the option to be ‘in the mo
Slide 9: 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 future expectations, including but not limited t
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