Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Nareit REITweek Conference 2019
19 slides from Apartment Investment And Management's conference presentation, Jun 3, 2019
Slide 1: Nareit REITweek Conference Investor Presentation June 2019
SAYBROOK POINTE SAN JOSE, CA Nareit REITweek Conference Investor Presentation June 2019
Slide 2: Creating Value Over Time: The Record
CREATING VALUE OVER TIME: THE RECORD Aimco’s primary measure of long-term financial performance is Economic Income. Measuring Aimco shareholder value creation by the per share change in Net Asset Value (NAV) plus Cash Dividends paid, Aimco Economic Income has compounded: (1) o Since IPO through 1Q 2
Slide 3: Creating Value Over Time: The Promise
CREATING VALUE OVER TIME: THE PROMISE Going forward, Aimco maintains its commitment to excellence in operations, disciplined capital allocation per its paired trade philosophy, and a safe, flexible, and investment grade balance sheet. Through May, Aimco: • Operations are tracking ahead of original e
Slide 4: Aimco's Earnings Quality
AIMCO’S EARNINGS QUALITY • The contribution from real estate operations to Aimco bottom line has increased steadily since the planned exit from the affordable and asset management businesses was announced in 2011, and is expected to be 98% of AFFO in 2019. o Aimco’s 2019 Same Store portfolio is expe
Slide 5: Operations Update: 2019 Same Store Update
OPERATIONS UPDATE 2019 SAME STORE UPDATE Through May, Aimco has: • Completed about 50% of leasing activity expected for the year; • Increased average daily occupancy (“ADO”) year-over-year by 80 bps; and • Improved blended lease rates year-over-year by 3.3%. CHANGES IN SAME STORE 1Q Apr May YTD RENT
Slide 6: Innovation & Productivity
INNOVATION & PRODUCTIVITY • Focus on efficient, productive operations: Aimco uses Controllable Operating Expenses ("COE"), defined as property level expenses before taxes, insurance, and utilities, as one measure of operating efficiency. o 2019 COE growth expected to be 50 bps. (1) o For the five ye
Slide 7: Redevelopment Provides Consistent Value Creation
REDEVELOPMENT REDEVELOPMENT PROVIDES CONSISTENT VALUE CREATION • Over the past five years, Aimco spent $1B on Redevelopment and Development, creating ~$400M of value. • In 2019, Aimco plans to spend $225-$275M on Redevelopment and Development, targeting 40% value creation or $100M. • Of the planned
Slide 8: Redevelopment Cycle
REDEVELOPMENT CYCLE SMALL PHASE REDEVELOPMENTS - INVENTORY MANAGEMENT • When practical, Aimco prefers small phase redevelopments which provide optionality to improve its offering and flexibility to adjust volume to market demand. • Managing inventory to meet demand allows for predictable NOI growth
Slide 9: Portfolio Management: 2018 & 2019 YTD Capital Allocation
PORTFOLIO MANAGEMENT 2018 & 2019 YTD CAPITAL ALLOCATION • Since the beginning of 2018, Aimco has sold ~$1 billion of real estate, these were lower-rated communities in less desirable submarkets. • Aimco reinvested these proceeds in communities located in more attractive submarkets and with higher ex
Slide 10: Portfolio Management: 2019 Capital Plans
PORTFOLIO MANAGEMENT 2019 CAPITAL PLANS Aimco allocates capital in accordance with its FCF IRR paired-trade discipline and on a leverage-neutral basis. Aimco considers unlevered risk- Aimco considers portfolio implications Aimco considers its cost of unlevered adjusted returns from a menu of capital
Slide 11: Portfolio Management: 2019 Capital Plans (cont.)
PORTFOLIO MANAGEMENT 2019 CAPITAL PLANS (cont.) • Aimco continues to be active in the pursuit of value-creating opportunities both inside and outside its portfolio. o Future transactions, while opportunistic, are expected to reflect expectations similar to previous Aimco transactions, such as: Capit
Slide 12: High Quality Balance Sheet
HIGH QUALITY BALANCE SHEET AIMCO LIMITS RISK THROUGH BALANCE SHEET STRUCTURE • Manage refunding risk with low leverage: • 31% LTV at 1Q 2019 • 25% LTV subject to refunding after consideration of annual amortization, funded through retained earnings, and perpetual preferred securities • 2.8% average
Slide 13: High Quality Balance Sheet: Refunding Risk and Debt
HIGH QUALITY BALANCE SHEET Since January 2018, through refinancing activity, Aimco has Refunding risk is lower than total leverage due to principal lowered the weighted average interest rate on its property debt amortization paid from retained earnings. by 52 bps and extended the duration of this de
Slide 14: Team and Culture
TEAM AND CULTURE Focus intentionally on a collaborative and productive culture based on respect for others, personal responsibility, reinforced by a preference for promotion from within based on talent development and succession planning to produce a strong, stable team that is the enduring foundati
Slide 15: Aimco Senior Leadership Team
AIMCO SENIOR LEADERSHIP TEAM Aimco benefits from a long-tenured team with an average of 15 years of Aimco service. Paul Beldin John Bezzant Lisa Cohn Terry Considine Miles Cortez Steve Crane Matt Eilen EVP & EVP & EVP & Chairman & EVP & Real Estate Tax Property Operations Chief Financial Officer Chi
Slide 16: Potential 2019 Risks
POTENTIAL 2019 RISKS Aimco regularly assesses risks that may impact its business and takes prudent precautions to ensure that the company is well-positioned. Mitigating Factors • Aimco maintains a portfolio that is diversified by geography and price point to mitigate the New Supply impact of competi
Slide 17: Exposure to New Supply
EXPOSURE TO NEW SUPPLY • Aimco considers competitive new supply to be significant primarily to “A” price point communities in submarkets with completions projected to be more than 2.0% of existing stock. Based on third-party forecasts of new supply, Aimco properties representing 19% of GAV may be so
Slide 18: Why Invest in Aimco?
WHY INVEST IN AIMCO? • Best-in-Class Operations: Lower resident turnover through intentional focus on customer selection and satisfaction drives peer- leading margins. • Paired-Trade Capital Allocation Discipline: Aimco adheres to a disciplined paired-trade strategy comparing expected unlevered retu
Slide 19: 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 2019 expectations, including but not limited to:
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