Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — 2010 NAREIT REITweek
24 slides from Apartment Investment And Management's conference presentation, Jun 9, 2010
Slide 1: Aimco - 2010 NAREIT REITweek
1 Riverside Park - Alexandria, VA Farmingdale Apartments - Darien, IL River Club - Edgewater, NJ AIMCO Apartment Investment and Management Company Willow Bend Apartments - Rolling Meadows, IL Park Towne Place - Philadelphia, PA Yorktown Apartments - Lombard, IL 2010 NAREIT REITWeek(r)
Slide 2: Forward-looking statements
2 This presentation contains forward-looking statements within the meaning of the federal securities laws, including statements regarding projected results and specifically forecasts of 2010 financial results. These forward-looking statements are based on management's judgment as of this date and in
Slide 3: Investing in Aimco
3 Investing in Aimco Aimco Has a Simple Business Strategy Own and operate 100,000 B/B+ quality apartments Well located in 20 largest U.S. markets Opportunistic redevelopment Finance with property-level, non-recourse, long-dated, fixed-rate and amortizing debt
Slide 4: Aimco Key Valuation Factors
4 Aimco Key Valuation Factors Aimco holds high quality assets. Aimco is a reliable operator. Aimco has limited balance sheet risk. Aimco has high quality of earnings. Aimco's shares are priced at a discount to the shares of apartment REIT peers. The financial leverage of Aimco's low risk non-recours
Slide 5: Portfolio Strategy
5 Portfolio Strategy Focus on B/B+ quality apartments Concentrate capital in 20 target markets (with a limited allocation to affordable apartments) Continually improve portfolio through capital recycling
Slide 6: Asset Quality
6 Asset Quality We define quality by comparing rents to local market averages: A-quality: rents greater than 125% of market average B-quality: rents 90% - 125% of market average C-quality: rents less than 90% of the market average We prefer B/B+ quality apartments because: Rents are less volatile th
Slide 7: Asset Quality in Aimco's 20 Markets
7 Represent average 1Q 2010 rents for all conventional properties held at March 31, 2010, including same store properties, redevelopment properties and other conventional properties. 1Q 2010 REIS. For purposes of portfolio allocation tracking, Jacksonville, Tampa and Orlando are combined as "Other T
Slide 8: Aimco Asset Quality vs Peers
8 * 1Q 2010 Average Rents as % of Market in Aimco Target Markets for peer companies has been computed based on 1) local average market rents as reported by REIS as of 1Q 2010 and 2) average rents by market as reported by peer companies, weighted by peer units in each of Aimco's Target Markets. Aimco
Slide 9: Capital Allocation Strategy: Target Market Characteristics
9 Target Market Characteristics High concentration of population, apartment units & apartment market capitalization. Geographic and employment diversification. Historically strong returns with reduced volatility as part of a market-cap weighted portfolio. Atlanta Boston Chicago Dallas-Fort Worth Den
Slide 10: Capital Allocation as of 12/31/2009
10 Capital Allocation as of 12/31/2009 87% of total capital is invested in conventional real estate. 88% of capital invested in conventional real estate is concentrated in Aimco's 20 target markets.
Slide 11: Capital Recycling Strategy
11 Capital Recycling Strategy Reinvestment: Increase investment in conventional assets located in priority markets. Redevelopment and enhancement of existing assets. Acquisition of B/B+ quality assets. Continually improve portfolio through capital recycling Objectives: Increase Aimco rents compared
Slide 12: Conventional Portfolio Transformation
12 Conventional Portfolio Transformation Excludes casualties and property management expenses. NOI less assumed capital expenditures of $850 per door of CR. Aimco 1Q 2010 rents compared to 1Q 2010 market rents published by REIS. Average of 1Q 2010 projections published by REIS, PPR and Axiometrics.
Slide 13: Diversified Portfolio
13 Diversified Portfolio During 2009, NOI was essentially flat across our diversified portfolio. Stability of Affordable NOI provided offset to volatility in Conventional Same Store NOI. Guidance provided in February was that total portfolio NOI decrease in 2010 was expected to be between one and th
Slide 14: Property Operations Update
14 Property Operations Update Rental rates for renewals have been positive since February. Strong Average Daily Occupancy provides support for rental rates going into peak leasing season. Rental rates for new leases remain negative compared to rental rates on expiring leases, but the rate of decline
Slide 15: Competitive Same-Store Operating Results
15 Competitive Same-Store Operating Results * Represents the average of results reported by AvalonBay, Camden, Equity Residential, Essex, Home Properties and UDR. Operating performance exceeds peer average YTD and over last one and five years. *
Slide 16: Consistent Investment in Physical Assets
16 Consistent Investment in Physical Assets Sustained rate of reinvestment in asset quality, notwithstanding the economy. Invested approximately $2.2 billion in the portfolio since 2005. Continued investment in properties through: Planned Replacement Program Energy investments Redevelopment where ap
Slide 17: Financing Strategy
17 Financing Strategy Non-recourse debt ? limited entity risk. Single-property loans with 60% initial LTV. Discipline of amortization to <50% LTV at maturity. Long-dated, laddered maturities. Primarily fixed interest rates. Assumable by buyers. Perpetual preferred securities ? no refunding and very
Slide 18: Aimco Debt Structure
18 Aimco Debt Structure Weighted-average maturity of enterprise-wide debt of approximately 8.1 years, more than 30% longer than Aimco's apartment peer average(2). Represents balances as of March 31, 2010 adjusted for a $10 million repayment of the term debt in April 2010 and a $10 million repayment
Slide 19: Reducing Leverage to Target
19 Reducing Leverage to Target Target leverage: EBITDA coverage of interest: 2.25x EBITDA coverage of interest and preferred dividends: 1.80x Current leverage: EBITDA coverage of interest: 2.02x EBITDA coverage of interest and preferred dividends: 1.67x Reduce leverage through cyclical NOI recovery
Slide 20: Amortization Reduces Leverage
20 Amortization Reduces Leverage Computed based on leverage as of March 31, 2010 and Aimco's estimate of Gross Asset Value as of December 31, 2009, adjusted for 1Q 2010 asset sales. Aimco's estimated Net Asset Value at December 31, 2009 was $20/share, which is not impacted by 1Q 2010 asset sales. NA
Slide 21: Amortization Plus Revenue Growth Improves Coverages
21 Amortization Plus Revenue Growth Improves Coverages Represents average of REIS, PPR and Axiometrics projections as of 1Q 2010 and should not be interpreted as Aimco guidance. Scheduled property debt amortization through 2013 and projected revenue growth increase EBITDA coverage of interest to 2.3
Slide 22: 2010 Balance Sheet & Liquidity
22 2010 Balance Sheet & Liquidity Uses largely balanced with internal sources of cash. No debt maturities in 2010. Limited 2011 maturities ($105 million). 2010 property debt activity will focus on loans maturing in 2012 to 2014 to lock in current low interest rates. Line of credit is unused and avai
Slide 23: G&A Expenses
23 G&A Expenses G&A expense reductions have "right-sized" Aimco's overhead
Slide 24: 2010 Guidance
2010 Guidance 2010 FO $125 - $1.35 Total Portfolio NOI -1.0% to -3.0% sss NOI growth YOY -2.0% to -5.0% Revenue growth YOY 0.5% to -2.0% Expense growth YOY 1.5% to 2.5% ‘Occupancy 94.5% to 95.5% Recurring Investment Management Revenue $34M Expense $10M Taxes $13M Net $11M Non-Recurring Investment Ma
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