Aimco Reports Year End 2020 Results
March 12, 2021 at 06:15 AM EST
Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) today filed with the United States Securities and Exchange Commission (“SEC”) its 2020 Annual Report on Form 10-K containing financial performance results and management discussion. A copy of the filing can be found on the SEC’s EDGAR online database and in the SEC Filings section on Aimco’s website: investors.aimco.com.
As previously announced, on December 15, 2020, Aimco completed the separation of Apartment Income REIT Corp. (“AIR”) from Aimco, creating two distinct, independent businesses.
President and Chief Executive Officer Wes Powell comments: “Aimco is off to a solid start. Teams across the country are advancing development projects that were in process prior to the separation from AIR and have been successful in securing new investment opportunities that will bear fruit in the years to come. Operating metrics for our portfolio of apartment properties trended in a positive direction during the fourth quarter and investor demand remains strong, reflecting the relative health and resilience of the U.S. multifamily sector. I am most thankful for the good work and dedication of my teammates, for it is the strength of our human capital that will lead to Aimco’s continued success and future growth.”
The following are highlights from Aimco’s 2020 10-K disclosure and additional forward-looking disclosure:
Aimco benefits from its ownership of a diversified portfolio of stabilized multi-family properties, a safe balance sheet with limited use of corporate credit, access to substantial liquidity, and an embedded pipeline of future investment opportunities.
We rely on the skills and experience of our team in building a broad portfolio of value-add real estate investments, primarily focused on the multifamily sector and located within the continental United States. Individual investment strategies include property development, redevelopment, and a wide array of other opportunistic ventures. We plan to fund our investment activities through the redeployment of Aimco equity in combination with debt and third-party equity in order to improve our returns on invested capital and to grow Assets Under Management (“AUM”).
Given our stated strategy, it is expected that at any point in time the value-creation process will be ongoing at numerous of our investments and will therefore be difficult to value. Over time, we expect the Aimco enterprise to produce superior returns on equity on a risk-adjusted basis and it is our plan to do so by:
We expect to capitalize our activities through a combination of non-recourse property debt, construction loans, third-party equity, and the recycling of Aimco equity, including through retained earnings. We plan to limit the use of recourse leverage, with a strong preference towards property-level debt in order to limit risk to the Aimco enterprise. When warranted, we plan to seek equity capital from joint venture partners to improve our cost of capital, further leverage Aimco equity, reduce exposure to a single investment and, in certain cases, for strategic benefits.
Net income attributable to common stockholders per common share, on a dilutive basis, decreased by $0.03 during the year ending December 31, 2020, compared to 2019, due primarily to non-cash charges resulting from the separation of AIR.
Our business is organized around five areas of strategic focus: development and redevelopment; operating properties; investment and portfolio; balance sheet; and team and culture.
Development and Redevelopment
During the year ended December 31, 2020, capital additions at properties retained by Aimco totaled approximately $20 million.
At two of the communities, 707 Leahy in Redwood City, California, and The Fremont on the Anschutz Medical Campus in Aurora, Colorado, Aimco completed construction and is in the process of lease-up, with the properties approximately 65% and 50% leased, respectively. Construction is substantially complete at Prism in Cambridge, Massachusetts, with initial move-ins expected this month. At the North Tower of Flamingo Point in Miami Beach, Florida, the major redevelopment continues with a target to complete construction in 2022 and to reach stabilization in 2023.
Our operating properties produced solid results for the year ended December 31, 2020. The table below includes Aimco’s proportionate share of operating results for consolidated residential communities for the periods ending December 31, 2020, excluding the August 2020 acquisition of Hamilton on the Bay.
Highlights include the following:
Office operations at 1001 Brickell Bay Drive, while facing headwinds due to the pandemic, remain steady with occupancy on December 31, 2020 of 77%. In November and December, we collected 100% of rents owed, and we collected an average of 96% of rents owed since April.
Investment and Portfolio
We seek to increase financial returns and reduce investment risk by using leverage and partners’ capital with appropriate caution.
Our liquidity consists of cash balances and available capacity on our revolving secured credit facility. As of December 31, 2020, we had $299 million of cash on hand, including $9 million of restricted cash, and had the capacity to borrow up to $150 million on our revolving credit facility.
We do not presently intend to pay a regular cash dividend.
Team and Culture
Our team is our most important asset and our culture is key to our success. In connection with the separation, we retained approximately 50 Aimco employees, including: Wes Powell, Chief Executive Officer; Lynn Stanfield, Chief Financial Officer; and Jennifer Johnson, Chief Administrative Officer and General Counsel; each of whom has more than 16 years of Aimco experience. In addition, former Aimco Chairman and CEO Terry Considine will be actively engaged during a transition period with a particular focus on strategic guidance and new business.
Aimco benefits from having experienced leaders located in each of four regional hubs where they utilize their local knowledge and connections to source and execute on exceptional investment opportunities. We believe the talent of our team, and our ability to retain that talent through a rewarding and balanced work-life culture, will result in superior outcomes and is key to our long-term success. We offer benefits reflecting this belief, including paid time for parental leave, paid time annually to volunteer in local communities, a bonus structure at all levels of the organization, and flexibility in work locations and schedules.
Out of hundreds of participating companies in 2020, we were one of only six recognized as a “Top Workplace” in Colorado for each of the past eight years, and were one of only two real estate companies to receive a BEST award from the Association for Talent Development in recognition of our company-wide success in talent development, marking our third consecutive year receiving this award.
Aimco is a Real Estate Investment Trust focused on property development, redevelopment, and various other value-creating investment strategies, targeting the U.S. multifamily market. Aimco is traded on the New York Stock Exchange as AIV. For more information about Aimco, please visit our website www.aimco.com.
This document contains non-GAAP measures which are reconciled to their nearest GAAP measure in Aimco’s 2020 Annual Report on Form 10-K found on the SEC’s EDGAR online database and in the SEC Filings section on Aimco’s website: investors.aimco.com.
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. 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),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained.
Readers should carefully review Aimco’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Aimco’s Annual Report on Form 10-K for the year ended December 31, 2020, and in Item 1A of Aimco’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020, June 30, 2020, and September 30, 2020, and the other documents Aimco 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 Aimco assumes no (and disclaims any) obligation to revise or update them to reflect future events or circumstances.