Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Nareit REITweek: REITworld 2016
30 slides from Apartment Investment And Management's conference presentation, Nov 15, 2016
Slide 1: Nareit REITworld November 2016
1 NAREIT REITWORLD NOVEMBER 2016 Preserve at Marin, Corte Madera, CA DRAFT 11/8/16 4:20 P.M. One Canal, Boston
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 1994 IPO - 3Q 2016 Economic Income: 14.3% compounded annually** $3.10 Property Operations Aimco's 2015 Same Store NOI growth of 5.6% creat
Slide 3: Strategic Objectives
STRATEGIC OBJECTIVES Operational Excellence Redevelopment Focus on Total Contribution to AFFO • Lower resident turnover through careful customer selection and emphasis on measured customer satisfaction • Control costs by focusing on productivity while maintaining asset quality and a high level of cu
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 (1) Peer group consists of AvalonBay, Camden, Equity Residential, Essex, Post Properties and UDR. Source for peer information: Bank of America Merrill Lynch. (2) Aimco measures changes in Same Store rental rates by comparing, on a lease-by-lease basis, the rate on a ne
Slide 6: Strong Operating Performance
6 (1) Source: SNL Financial. Peer group consists of AvalonBay, Camden, Equity Residential, Essex, MAA, Post Properties and UDR. (2) Source: Company reports. Individual market peers vary based on geographic exposure. Solid NOI performance: For the ten years ended 2015, the compound annual growth rate
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 Controllable Operating Expenses ("COE"), which are property level operating expenses before taxes, insurance, and utilities is 0.8% and over the last nine years, the
Slide 8: Lease-Up Communities
8 • Aimco began 2016 with ~1,300 units of lease-up exposure, which is expected to be reduced to ~150 units by year's end. • Entering 2017, Aimco lease-up exposure is projected to total ~450 units, which consists of the 150 units carried over from the beginning of 2016, and 300 units associated with
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 communities throug
Slide 10: Embedded Value Creation Opportunities
10 EMBEDDED VALUE CREATION OPPORTUNITIES Own communities where land value as a percentage of total value is high. Lower price-point communities with high land values support redevelopment and entitlement activities. Provide predictable cash flows through excellence in property operations and incubat
Slide 11: Case Study - Yacht Club at Brickell Redevelopment and Expansion
11 CASE STUDY - YACHT CLUB AT BRICKELL REDEVELOPMENT AND EXPANSION REDEVELOPMENT OPPORTUNITY • 357-unit high rise built in 1998; acquired in 2003 • Located directly on the water with unobstructed views of Brickell Key and South Beach • Focus on repositioning amenities and interiors EXPANSION OPPORTU
Slide 12: Redevelopment Value Creation
12 REDEVELOPMENT VALUE CREATION • During the last three years, Aimco completed seven redevelopments in high-quality locations including: the Bay Area; La Jolla, CA; west Los Angeles; downtown Seattle; and suburban Chicago. Aimco currently has redevelopment projects in process in Chicago, Los Angeles
Slide 13: 2016-2017 Redevelopment Focus
13 2016 - 2017 REDEVELOPMENT FOCUS NOI Stabilization of Completed California Redevelopment Projects BAY AREA Preserve at Marin (126 Apartment Homes) Stabilized 3Q 2016 Saybrook Point (324 Apartment Homes) Stabilization 2Q 2020 PHILADELPHIA The Sterling (534 Apartment Homes) Stabilization 4Q 2018 Par
Slide 14: What's Next for Redevelopment? Redevelopment Menu
14 BAY AREA 707 Leahy Preserve At Marin (Expansion) CHICAGO 100 Forest Place Evanston Place Yorktown Apartments (Expansion) MIAMI Bay Parc Plaza Flamingo South Beach Yacht Club at Brickell PHILADELPHIA Park Towne Place (Expanded Scope) Chestnut Hall DENVER 21 Fitzsimons Boston Lofts Eastpointe Towns
Slide 15: Portfolio Strategy
15 PORTFOLIO STRATEGY To 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 revenue growth pro
Slide 16: Portfolio Strategy Execution
16 PORTFOLIO STRATEGY EXECUTION • On average, during the last three years, we have sold 5% of our portfolio annually and expect a similar level of activity in 2016. • We fund redevelopment, development and property upgrades from the sale of 2-3% of assets each year (~$250-$350M) and fund selective a
Slide 17: Portfolio Diversification
17 PORTFOLIO DIVERSIFICATION Aimco defines apartment community quality as follows: "A" quality communities are those with rents greater than 125% of local market average; "B" quality communities are those with rents 90% to 125% of local market average; "C+" quality communities are those with rents l
Slide 18: Aimco Exposure to New Supply
18 AIMCO EXPOSURE TO NEW SUPPLY • New supply generally impacts rent growth when completions are greater than 2% of existing inventory. Nationwide, completions as a percentage of existing inventory in the next twelve months are projected to be 2.3%. This compares to 1.6% for the two previous twelve m
Slide 19: Aimco Exposure to New Supply
19 AIMCO EXPOSURE TO NEW SUPPLY • As a result of diversification, Aimco’s exposure to competitive new supply is primarily limited to its "A" price point communities in submarkets with more than 2% supply growth(1) …or approximately 26% of Aimco GAV. • This exposure is mitigated in those submarkets w
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". Aimco has access to the corporate debt market if that market becomes
Slide 21: High Quality Balance Sheet
21 • Aimco Debt and Preferred Equity to EBITDA of 6.9x reflects outstanding balances at 09/30/2016, but overstates the refunding risk of our leverage. • Our property debt balances at maturity are more than $800 million lower than 3Q 2016 balances due to principal amortization paid from retained earn
Slide 22: We Live Our Values
22 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 23: Aimco Senior Leadership Team
23 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 24: Aimco Senior Leadership Team
24 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 25: Aimco Senior Leadership Team
25 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 26: Aimco Senior Leadership Team
26 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 27: Aimco Senior Leadership Team
27 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 28: Aimco Senior Leadership Team
28 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 29: Aimco Senior Leadership Team
29 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 30: Forward Looking Statements & Other Information
30 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: 4Q and full year 2016 results, including but
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