Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Merger or Acquisition (September 2020)
32 slides from Apartment Investment And Management's merger presentation, Sep 14, 2020
Slide 1: Strategic Transformation Investor Presentation
Strategic Transformation Investor Presentation July 2020 | Strictly Private & Confidential September 14, 2020 | Strictly Private & Confidential One Canal Boston, MA Exhibit 99.2
Slide 2: Forward Looking Statements / Non-GAAP Measures
FORWARD LOOKING STATEMENTS / NON-GAAP MEASURES This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations, in
Slide 3: Table of Contents
TABLE OF CONTENTS Page Number I. Proposed Transaction Overview and Rationale 1 II. AIR: Stabilized Multi-family REIT Overview 6 III. Post-Separation Aimco Overview 15 Appendix 18
Slide 4: I. Proposed Transaction Overview and Rationale
I. Proposed Transaction Overview and Rationale 707 Leahy Redwood City, CA
Slide 5: Executive Summary
EXECUTIVE SUMMARY Aimco’s (“AIV”) current business plan comprises three primary activities: (i) investment in a portfolio of multi-family properties diversified by geography and price point; (ii) development and redevelopment of properties where land value comprises a significant percentage of the t
Slide 6: Rationale for the separation: simplicity, transparency, predictability
Simplicity: A simplified business focused solely on the ownership and active management of a diversified portfolio of stabilized apartment communities; Transparency: A business that is more readily understood by investors; Predictability: A business that is more predictable due to best-in-class oper
Slide 7: GAV and NAV of Aimco, AIR and Aimco post-separation
GAV is calculated using the valuations published as of March 31, 2020 adjusted for subsequent population changes, primarily the California Joint Venture (see following page for details) and the Separate Portfolio securing note to AIR. Opportunistic and development investments includes investment in
Slide 8: California Joint Venture
On September 8, as part of its longer-term strategy to reduce financial leverage and to rebalance its capital allocation among target markets, Aimco entered into a ten-year joint venture (“the JV”) with a passive institutional investor to own jointly 12 multi-family properties with 4,051 apartment h
Slide 9: Illustrative Business Separation Timeline
ILLUSTRATIVE BUSINESS SEPARATION TIMELINE AIR and Aimco are expected to trade as separate and distinct public companies in December 2020 dependent on SEC review process. August 2020 September 2020 October 2020 November 2020 December 2020 August Confidentially Submitted Form 10 Late November Expect t
Slide 10: II. AIR: Stabilized Multi-family REIT Overview
II. AIR: Stabilized Multi-family REIT Overview The Sterling Philadelphia, PA
Slide 11: Key Highlights
KEY HIGHLIGHTS AIR, a newly-formed, self-managed real estate investment trust will provide a simple and transparent way to invest in the multi-family sector: ownership with public market liquidity of a diversified portfolio of apartment communities, with low financial leverage, limited execution ris
Slide 12: Diversified Geographic Footprint
Boston Greater Washington 12.4% Los Angeles 21.5% Denver 7.1% Miami 9.6% San Diego 7.2% Philadelphia 12.0% Boston 9.9% DIVERSIFIED GEOGRAPHIC FOOTPRINT AIR expects to own a portfolio of stabilized apartment properties in top U.S. markets focusing on properties with high land value located in submark
Slide 13: Diversified by Price Point
DIVERSIFIED BY PRICE POINT AIR expects to maintain a balanced multi-family portfolio consisting of approximately ½ Class A and ½ Class B/C+ communities, allowing it to reap the benefits of price-point diversification over various economic and housing cycles. Total Portfolio Overview(1)(2)(3) Portfol
Slide 14: High Quality Portfolio
HIGH QUALITY PORTFOLIO Lincoln Place Venice, CA Avery Row Arlington, VA 21 Fitzsimons Aurora, CO 777 South Broad Philadelphia, PA Axiom Apartments Cambridge, MA Park Towne Place Philadelphia, PA Bay Parc Apartment Homes Miami, FL Preserve at Marin Corte Madera, CA AIR apartment communities are equip
Slide 15: Best-in-Class Property Management Operations
Source: Company filings representing quarter ending June 30, 2020. Average growth is calculated as simple average of growth rates from 2010 to 2Q 2020 as disclosed in company filings. BEST-IN-CLASS PROPERTY MANAGEMENT OPERATIONS Peer Leading Operating Cost Control Average Same-Store Operating Expens
Slide 16: Key Benchmarking Relative to Peers
Source: Green Street Advisors (“GSA”), Wall Street research and company filings as of September 12, 2020. Per Wall Street research. Debt balance is as of June 30, 2020 adjusted for subsequent events. EBITDA is as of March 31, 2020 which was unaffected by the current economic slowdown. Per GSA. Lower
Slide 17: Strong & Flexible Balance Sheet
5.9x PF Leverage (Based Upon 1Q20 Normalized EBITDA) (2) STRONG & FLEXIBLE BALANCE SHEET Note: EBITDA is calculated as of March 31, 2020, which was unaffected by the current economic slowdown. Reflects subsequent events inclusive of asset acquisitions, dispositions, investments and spin related tran
Slide 18: Opportunities to transact with Aimco
AIR expects to benefit from a series of valuable opportunities to transact with Aimco to enhance the quality and resilience of its portfolio, while sidestepping the risks, earnings drag and leverage of development activities. AIR will not engage in development or redevelopment, reducing execution ri
Slide 19: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM AIR is expected to have management and governance independent of Aimco and will be a self-managed real estate investment trust in all respects. The existing Aimco board of directors will become the directors of AIR and new directors will replace them as Aimco directors. T
Slide 20: III. Post-Separation Aimco Overview
III. Post-Separation Aimco Overview
Slide 21: Going Forward Aimco Strategy
GOING FORWARD AIMCO STRATEGY Going forward, Aimco is expected to focus on development and redevelopment and value-creating transactions. Sources of Capital: Non-recourse property debt Construction loans Third-party equity capital Retained earnings Aimco well capitalized: $1.3 billion of owned assets
Slide 22: Aimco Veterans to Lead Management Team
AIMCO VETERANS TO LEAD MANAGEMENT TEAM Aimco’s senior management team is expected to include Aimco veterans with Terry Considine serving as Chief Executive Officer while a search is conducted for a seasoned real estate developer to work with Mr. Powell to build a national footprint. Five to six new
Slide 23: Future Relationship Between AIR and Aimco
FUTURE RELATIONSHIP BETWEEN AIR AND AIMCO As two separate and distinct companies, AIR and Aimco will each have a board of directors comprised primarily of independent directors AIR and Aimco will have separate management teams located in separate offices. AIR will be headquartered in Denver, Colorad
Slide 24: Appendix
Appendix Palazzo West Los Angeles, CA
Slide 25: AIR Portfolio Overview Upon Completion of the Transaction
AIR PORTFOLIO OVERVIEW UPON COMPLETION OF THE TRANSACTION (INCLUDING PROPERTIES IN THE CALIFORNIA JV) NAV Build 18
Slide 26: AIR Portfolio Overview (cont'd)
NAV Build AIR PORTFOLIO OVERVIEW UPON COMPLETION OF THE TRANSACTION (INCLUDING PROPERTIES IN THE CALIFORNIA JV) (CONT’D) 19
Slide 27: California Joint Venture Portfolio
CALIFORNIA JOINT VENTURE PORTFOLIO 20
Slide 28: AIR Portfolio Overview: NAV per share
AIR PORTFOLIO OVERVIEW UPON COMPLETION OF THE TRANSACTION (CONT’D) ($ in millions except for per share data) AIR is expected to have a NAV per share of approximately $50(1)(2)(3). Real Estate GAV as of March 31, 2020; pro forma adjusted to include subsequent events. Balance sheet items as of June 30
Slide 29: Aimco Portfolio Overview Upon Completion of the Transaction
AIMCO PORTFOLIO OVERVIEW UPON COMPLETION OF THE TRANSACTION Leased from AIR NAV Build Separate Portfolio Assets Owned Assets Partially owned assets managed by a third-party operator. 22
Slide 30: Aimco Portfolio Overview: NAV per share
AIMCO PORTFOLIO OVERVIEW UPON COMPLETION OF THE TRANSACTION (CONT’D) ($ in millions except for per share data) Aimco is expected to have a NAV per share of approximately $8(1)(2)(3). Real Estate GAV as of March 31, 2020; pro forma adjusted to include subsequent events. Balance sheet items as of June
Slide 31: Exhibit A: Non-GAAP EBITDA Reconciliation
Transx. Adj. EXHIBIT A: NON-GAAP EBITDA RECONCILIATION Reflects the pro forma impact related to properties sold, or expected to be sold during 2020, and the joint venture transaction completed on September 8, 2020, including: the removal interest expense due to planned delevering with proceeds recei
Slide 32: Exhibit B: Non-GAAP FFO / AFFO Reconciliation
EXHIBIT B: NON-GAAP FFO / AFFO RECONCILIATION Pro Forma FFO and AFFO for Apartment Income REIT Transx. Adj. Aimco Historical PF AIR AIV Hist. Transx. Adj. PF Funds From Operations PF Adjusted Funds From Operations FFO and AFFO per diluted share Reflects the pro forma impact related to properties sol
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