Company has Delivered Superior Stockholder
Returns Since Spin-Off in 2020, Materially Outperforming Peer
Group, Real Estate Indices and Broader Market Indices
New Aimco’s Qualified and Experienced Director
Nominees are Best-Suited to Continue Overseeing New Aimco’s
Strategy
Land & Buildings is Fixated on Historical
Issues and Decisions Made Prior to Reconstitution of the Board and
Appointment of New Aimco Leadership Team
Urges Stockholders to Use Universal WHITE Proxy
Card to Vote “FOR ALL” Three of the Company’s Nominees: Jay Paul
Leupp, Michael A. Stein and R. Dary Stone
Apartment Investment and Management Company (NYSE: AIV) (“Aimco”
or the “Company”), today filed an investor presentation with the
U.S. Securities and Exchange Commission in connection with its 2022
Annual Meeting of Stockholders (“Annual Meeting”), which is
scheduled to be held on December 16, 2022. The presentation is
available on the investor relations section of the Company’s
website.
The Company issued the following statement:
Over the past two years, Aimco has put in
place a new, reconstituted Board of Directors with individuals who
have the right skills and expertise to lead the Company forward.
Alongside an all-new executive management team, the Board has
overseen the development and successful execution of Aimco’s
clearly defined value creation strategy following the spin-off of
Apartment Income REIT Corp. (“AIR”) in December 2020.
As a result, during this time Aimco has
delivered outstanding total stockholder returns of 45%1,
significantly outperforming Aimco’s custom developer proxy peer
group2, the FTSE NAREIT Equity Apartments Index, the MSCI US REIT
Index, the S&P 500 Index and the Russell 2000 Index.
In addition, over the past 13 months the
Company has met with stockholders representing more than 80% of
Aimco’s outstanding shares of common stock. Following these
discussions, the Company has implemented several governance
enhancements that demonstrate Aimco’s commitment to stockholder
engagement and value creation. The New Aimco Board is also
overseeing the evaluation of a broad range of options to enhance
stockholder value. The Board is responsive to the feedback of
stockholders and is committed to leaving no stone unturned.
Aimco believes the claims made by Land &
Buildings are largely baseless and about the predecessor company
with an entirely different leadership team and a substantially
different board. The New Aimco Board reviewed the candidates
proposed by Land & Buildings and determined they would not
bring any relevant expertise that is not already well represented
on the New Aimco Board and that election of Land & Buildings’
candidates would remove expertise from the New Aimco Board that is
critical to the Company’s success.
Highlights of the presentation include:
- New Aimco has a track record of successfully executing its
strategic priorities since the December 2020 spin-off
- Tripled its development pipeline in 22 months. The development
pipeline now spans 15 million square feet across high growth U.S.
markets with tremendous value creation potential
- Successfully completed and leased up projects with a total
investment of $570 million3, and on track to complete and lease up
another four projects at a total investment of $469 million
- Delivered strong operating performance, including 17.5% YoY NOI
growth and 96% occupancy as of Q3 2022
- Significantly fortified Aimco’s balance sheet by retiring or
refinancing more than $1 billion of near-term liabilities and
eliminating substantially all of the Company’s floating rate
exposure
- Unlocked almost $1 billion of asset value including the
monetization of $669 million of leasehold development assets4, the
sale of three stabilized multifamily assets for $265 million at a
premium to New Aimco’s internal NAV estimate and the sale of a
partial interest in New Aimco’s minority investment in IQHQ,
generating a greater than 50% IRR
- Eliminated various legacy entanglements with AIR 18 months
sooner than anticipated through the early repayment of the $534
million purchase money note, the reduction of leasehold liabilities
from $475 million down to $6 million and the amendment of key
provisions of the master leasing agreement with AIR
- Entered into a strategic capital partnership with Alaska
Permanent Fund Corporation, providing core equity capital for up to
$1 billion of Aimco-led multifamily development projects and
creating the opportunity to earn third-party management fees and
incentive income
- New Aimco has delivered superior returns since its Board and
management team have been in place, and the New Aimco Board is
committed to realizing the Company’s full value potential
- New Aimco has delivered outstanding total stockholder returns
of 45%5 since the 2020 spin-off of AIR, significantly outperforming
Aimco’s custom developer proxy peer group6, the FTSE NAREIT Equity
Apartments Index, the MSCI US REIT Index, the S&P 500 Index and
the Russell 2000 Index
- New Aimco trades approximately in line with or better than its
peers on a premium / (discount) to NAV basis as of October 31,
2022; however, the Board and management team are not satisfied and
are evaluating various options to accelerate value creation
- In response to perspectives and feedback from stockholders, the
New Aimco Board is evaluating a broad range of options to enhance
stockholder value, including, but not limited to, structural
alternatives for the Company, new capitalization and financing
strategies for our development platform and pipeline, monetization
of certain of the Company’s assets and accelerated share
repurchases
- New Aimco has demonstrated a consistent focus on corporate
governance and stockholder engagement under the reconstituted
Board
- The Board includes fresh perspectives from seven new directors
that are key contributors to the Company’s momentum and direction,
balanced by the retention of three directors with complementary
skillsets and important historical knowledge of Aimco’s business,
structure and operations
- Given the success of Aimco’s strategic plan, the Board is
accelerating the Company’s previously planned transition to annual
elections for all directors for one-year terms beginning at the
2023 Annual Meeting
- The Board will opt out of the provisions of the Maryland
Unsolicited Takeover Act, or MUTA, that allow it to re-classify the
Board without the approval of stockholders
- The Board intends to move the date of the Company’s Annual
Meeting so the 2024 Annual Meeting will be held by the end of the
second quarter of 2024
- New Aimco’s highly qualified director nominees are making
specific contributions to New Aimco’s momentum
- Jay Paul Leupp brings a stockholder’s perspective and deep
experience managing investments in publicly traded REITs. He
currently serves as Managing Partner / Senior Portfolio Manager,
Real Estate Securities at Terra Firma Asset Management and
previously served as Managing Director and Portfolio Manager,
Global Real Estate Securities at Lazard Asset Management. He is
committed to enhancing the Company’s investor relations
program
- Michael A. Stein is a vital member of the New Aimco Board given
his deep experience overseeing strategic corporate transactions
that unlock stockholder value, as evidenced by his roles overseeing
the separation of Marriott International & Host Hotels and the
sale of ICOS to Eli Lilly
- R. Dary Stone brings significant expertise in several areas
which are essential to Aimco’s new business plan, including real
estate development and governance practices, given his experience
and track record at Cousins Properties, Tolleson Wealth Management,
Tolleson Private Bank, Baylor University and the Texas Banking
Commission
- Land & Buildings has proposed two nominees whom the New
Aimco Board unanimously determined would not be additive
- Aimco carefully evaluated Land & Buildings’ candidates,
including against the experience and qualifications of the
Company’s directors who bring collective expertise across real
estate and development either as operators, investors and/or board
members. The Board determined that the election of either candidate
put forth by Land & Buildings would be dilutive to the quality
of the New Aimco Board and remove expertise that is critical to our
success
- Michelle Applebaum’s expertise pertains to the steel industry;
she brings no relevant real estate or REIT experience. Three
previous times she has been nominated by Land & Buildings to
stand for election to the boards of other public traded REITs, but
she has not been elected or appointed in any instance
- While we acknowledge James P. Sullivan has research experience
from his role at Green Street Advisors, Aimco has worked closely
with Mr. Sullivan’s former employer, Green Street Advisors since
September 2021. Due to the Company’s close, ongoing advisory
relationship with the unit within Green Street where Mr. Sullivan
previously worked, Aimco already benefits from the full depth and
breadth of that organization’s expertise. Mr. Sullivan also has
never served on the board of a publicly traded company and has no
public company experience
- Land & Buildings appears to have borrowed shares away
from other Aimco stockholders, removing approximately 2.8% of the
vote
- Land & Buildings’ trading shows a material increase in
beneficial ownership in the days before the record date followed by
a significant decrease immediately following the record date:
- Land & Buildings’ beneficial ownership in Aimco increased
from 7.3 million shares as of the October 20, 2022, proxy statement
to 12.5 million shares as of the October 26, 2022, record date7,
and then quickly dropped back down to 8.8 million shares in the
days immediately following the record date
- The 4.2 million shares borrowed by Land & Buildings in
advance of the record date removed approximately 2.8% of the vote
from long term Aimco investors
- Such efforts to game the vote and disenfranchise other owners
of Aimco stock are not consistent with Land & Buildings’ claims
that it is an advocate for all stockholders
PROTECT THE VALUE OF YOUR INVESTMENT AND
AIMCO’S FUTURE GROWTH PROSPECTS. USE THE UNIVERSAL WHITE PROXY CARD TODAY TO VOTE FOR ALL THREE
OF AIMCO’S QUALIFIED AND EXPERIENCED DIRECTORS
If you have questions or require any assistance
with voting your shares, please contact the Company’s proxy
solicitor listed below:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor New York, New York
10018 Call Collect: (212) 929-5500 or Toll-Free (800)
322-2885 Email: proxy@mackenziepartners.com
_________________________
1 Spin date as of December 14, 2020; TSR calculation as of
October 31, 2022 2 Includes AHH, CLPR, CSR, ELME, FOR, FPH, HHC,
IRT, JBGS, JOE, STRS, TRC, and VRE (per AIV 2021 10-K); represents
simple average 3 $469 million relief of leasehold obligation and
$65 million direct capital 4 Gross transaction price includes $469
million relief of leasehold obligation and $200 million net cash
proceeds 5 Spin date as of December 14, 2020; TSR calculation as of
October 31, 2022 6 Includes AHH, CLPR, CSR, ELME, FOR, FPH, HHC,
IRT, JBGS, JOE, STRS, TRC, and VRE (per AIV 2021 10-K); represents
simple average 7 Per nomination supplement provided to Aimco on
November 1, 2022
Glossary and Reconciliations of Non-GAAP Financial and
Operating Measures
This document includes certain financial and operating measures
used by Aimco management that are not calculated in accordance with
accounting principles generally accepted in the United States, or
GAAP Aimco’s definitions and calculations of these Non-GAAP
financial and operating measures and other terms may differ from
the definitions and methodologies used by other REITs and,
accordingly, may not be comparable. These Non-GAAP financial and
operating measures should not be considered an alternative to GAAP
net income or any other GAAP measurement of performance and should
not be considered an alternative measure of liquidity.
NET OPERATING INCOME (NOI) MARGIN: Represents an apartment
community’s net operating income as a percentage of the apartment
community’s rental and other property revenues.
PROPERTY NET OPERATING INCOME (NOI): NOI is defined by Aimco as
total property rental and other property revenues less direct
property operating expenses, including real estate taxes NOI does
not include property management revenues, primarily from affiliates
casualties property management expenses depreciation or interest
expense NOI is helpful because it helps both investors and
management to understand the operating performance of real estate
excluding costs associated with decisions about acquisition
pricing, overhead allocations, and financing arrangements NOI is
also considered by many in the real estate industry to be a useful
measure for determining the value of real estate Reconciliations of
NOI as presented in this report to Aimco’s consolidated GAAP
amounts are provided below.
STABILIZED OPERATING PROPERTIES Apartment communities that (a.)
are owned and asset managed by Aimco, Aimco,(b.) had reached a
stabilized level of operations as of January 1 2021 and maintained
it throughout the current and the comparable prior periods, and
(c.) are not expected to be sold within 12 months.
VALUE CREATION, NET OF COSTS: Value Creation, net of costs is
defined by Aimco, in particular, as it relates to the termination
of leases with AIR, as the lease termination payment less
development and financing costs, net of operating revenues and
expenses during the leasehold period.
Due to the diversity of its economic ownership interests in its
apartment communities in the periods presented, Aimco evaluates the
performance of the apartment communities in its segments using
Property NOI, which represents the NOI for the apartment
communities that Aimco consolidates and excludes apartment
communities that it does not consolidate. Property NOI is defined
as rental and other property revenue less property operating
expenses. In its evaluation of community results, Aimco excludes
utility cost reimbursement from rental and other property revenues
and reflects such amount as a reduction of the related utility
expense within property operating expenses. The following table
presents the reconciliation of GAAP rental and other property
revenue to the revenues before utility reimbursements and GAAP
property operating expenses to expenses, net of utility
reimbursements as presented on Supplemental Schedule 6 of Aimco’s
Third Quarter 2022 Earnings Release and Supplemental Schedules.
Segment NOI Reconciliation
Three Months Ended (in
thousands)
September 30, 2022
September 30, 2021
Total Real Estate Operations
Revenues, Before Utility
Reimbursements [1]
Expenses, Net of Utility
Reimbursements
Revenues, Before Utility
Reimbursements [1]
Expenses, Net of Utility
Reimbursements
Total (per consolidated statements of
operations)
$
47,683
$
17,455
$
42,893
$
18,155
Adjustment: Utilities reimbursement
(1,318
)
(1,318
)
(1,246
)
(1,246
)
Adjustment: Other Real Estate
(4,263
)
1,286
(3,472
)
1,136
Adjustment: Non-stabilized and other
amounts not allocated [2]
(7,428
)
(7,213
)
(7,066
)
(7,759
)
Total Stabilized Operating (per
Schedule 6)
$
34,674
$
10,210
$
31,110
$
10,287
[1] Approximately two-thirds of Aimco’s
utility costs are reimbursed by residents. These reimbursements are
included in rental and other property revenues on Aimco’s
consolidated statements of operations prepared in accordance with
GAAP. This adjustment represents the reclassification of utility
reimbursements from revenues to property operating expenses for the
purpose of evaluating segment results and as presented on
Supplemental Schedule 6. Aimco also excludes the reimbursement
amounts from the calculation of Average Revenue per Apartment Home
throughout this Earnings Release and Supplemental Schedules.
[2] Properties not included in the Stabilized
Operating Portfolio and other amounts not allocated includes
operating results of properties not presented in the Stabilized
Operation Portfolio as presented on Supplemental Schedule 6 during
the periods shown, as well as property management and casualty
expense, which are not included in property operating expenses, net
of utility reimbursements in the Supplemental Schedule 6
presentation.
About Aimco
Aimco is a diversified real estate company primarily focused on
value add, opportunistic, and alternative investments, targeting
the U.S. multifamily sector. Aimco’s mission is to make real estate
investments where outcomes are enhanced through its human capital
so that substantial value is created for investors, teammates, and
the communities in which we operate. Aimco is traded on the New
York Stock Exchange as AIV. For more information about Aimco,
please visit its website www.aimco.com.
Forward-Looking Statements
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, including,
but not limited to, the statements in this document regarding
future financing plans, including the Company’s expected leverage
and capital structure; business strategies, prospects, and
projected operating and financial results (including earnings),
including facts related thereto, such as expected costs; future
share repurchases; expected investment opportunities; and our 2022
pipeline investments and projects. We caution investors not to
place undue reliance on any such forward-looking statements.
Words such as “anticipate(s),” “expect(s),” “intend(s),”
“plan(s),” “believe(s),” “plan(s),” “may,” “will,” “would,”
“could,” “should,” “seek(s),” “forecast(s),” and similar
expressions, or the negative of these terms, are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance, condition or results, and involve
a number of known and unknown risks, uncertainties, assumptions and
other important factors, among others, that may affect actual
results or outcomes include, but are not limited to: (i) the risk
that the 2023 preliminary plans and goals may not be completed in a
timely manner or at all, (ii) the inability to recognize the
anticipated benefits of pipeline investments and projects, (iii)
changes in general economic conditions, including as a result of
the COVID-19 pandemic. Although we believe that the assumptions
underlying the forward-looking statements, which are based on
management’s expectations and estimates, are reasonable, we can
give no assurance that our expectations will be attained.
Risks and uncertainties that could cause actual results to
differ materially from our expectations include, but are not
limited to: the effects of the coronavirus pandemic on the
Company’s business and on the global and U.S. economies generally;
real estate and operating risks, including fluctuations in real
estate values and the general economic climate in the markets in
which we operate and competition for residents in such markets;
national and local economic conditions, including the pace of job
growth and the level of unemployment; the amount, location and
quality of competitive new housing supply; the timing and effects
of acquisitions, dispositions, redevelopments and developments;
changes in operating costs, including energy costs; negative
economic conditions in our geographies of operation; loss of key
personnel; the Company’s ability to maintain current or meet
projected occupancy, rental rate and property operating results;
the Company’s ability to meet budgeted costs and timelines, and, if
applicable, achieve budgeted rental rates related to redevelopment
and development investments; expectations regarding sales of
apartment communities and the use of proceeds thereof; insurance
risks, including the cost of insurance, and natural disasters and
severe weather such as hurricanes; financing risks, including the
availability and cost of financing; the risk that cash flows from
operations may be insufficient to meet required payments of
principal and interest; the risk that earnings may not be
sufficient to maintain compliance with debt covenants, including
financial coverage ratios; legal and regulatory risks, including
costs associated with prosecuting or defending claims and any
adverse outcomes; the terms of laws and governmental regulations
that affect us and interpretations of those laws and regulations;
possible environmental liabilities, including costs, fines or
penalties that may be incurred due to necessary remediation of
contamination of apartment communities presently or previously
owned by the Company; activities by stockholder activists,
including a proxy contest; the risk of the timing of our
stockholder value enhancement review and the risk that we will not
identify any value enhancing options or that we will not
successfully execute or achieve the potential benefits of any such
options.
In addition, the Company’s current and continuing qualification
as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue
Code and depends on the Company’s ability to meet the various
requirements imposed by the Internal Revenue Code, through actual
operating results, distribution levels and diversity of stock
ownership. Readers should carefully review the Company’s financial
statements and the notes thereto, as well as the section entitled
“Risk Factors” in Item 1A of the Company’s Annual Report on Form
10-K for the year ended December 31, 2021 and in Item 1A of the
Company’s Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 2022, June 30, 2022, and September 30, 2022, and
the other documents the Company files from time to time with the
SEC. These filings identify and address important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking
statements.
These forward-looking statements reflect management’s judgment
as of this date, and the Company assumes no (and disclaims any)
obligation to revise or update them to reflect future events or
circumstances.
We make no representations or warranties as to the accuracy of
any projections, estimates, targets, statements or information
contained in this document. It is understood and agreed that any
such projections, estimates, targets, statements and information
are not to be viewed as facts and are subject to significant
business, financial, economic, operating, competitive and other
risks, uncertainties and contingencies many of which are beyond our
control, that no assurance can be given that any particular
financial projections or targets will be realized, that actual
results may differ from projected results and that such differences
may be material. While all financial projections, estimates and
targets are necessarily speculative, we believe that the
preparation of prospective financial information involves
increasingly higher levels of uncertainty the further out the
projection, estimate or target extends from the date of
preparation. The assumptions and estimates underlying the
projected, expected or target results are inherently uncertain and
are subject to a wide variety of significant business, economic and
competitive risks and uncertainties that could cause actual results
to differ materially from those contained in the financial
projections, estimates and targets. The inclusion of financial
projections, estimates and targets in this presentation should not
be regarded as an indication that we or our representatives,
considered or consider the financial projections, estimates and
targets to be a reliable prediction of future events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221121005312/en/
Matt Foster Sr. Director, Capital Markets and Investor Relations
(303) 793-4661 investor@aimco.com
MacKenzie Partners, Inc. Dan Burch (212) 929-5748
Dburch@mackenziepartners.com
Andrew Siegel / Greg Klassen / Adam Pollack Joele Frank,
Wilkinson Brimmer Katcher (212) 355-4449
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