DENVER--(BUSINESS WIRE)--
Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) and
Related Companies, today announced that the two companies have entered
into a binding agreement in which Aimco will sell its Asset Management
portfolio and four affordable real estate communities to Related’s
affordable division for $590 million. Closing of this transaction, which
is anticipated to occur in the third quarter of 2018, will complete
Aimco’s planned exit from its affordable housing line of business.
The Asset Management portfolio is a fee-based business in which Aimco is
the general partner in partnerships owning interests in low-income
housing tax credit apartment communities. As general partner, Aimco
provides asset management and other services to these partnerships and
receives fees and other payments in return. The sale also includes the
Hunters Point communities, four affordable, garden style communities,
with 604 apartment homes located in San Francisco, CA.
“This transaction simplifies the Aimco business and completes the
planned exit from the affordable housing business that we announced in
2011,” said Aimco Chairman/CEO Terry Considine. “The completion of this
transaction will be accretive to Aimco’s Net Asset Value by $126 million
while preserving affordable housing through its transfer to a long-term,
high quality operator of affordable assets.”
Drawing on their extensive experience in the affordable housing sector,
Related plans to preserve the long-term affordability of all 51
properties. “The development and preservation of affordable housing has
been a cornerstone of Related’s business for more than 40 years,” said
Matthew Finkle, President of Related Affordable, a division of Related
Companies. “We have preserved tens of thousands of affordable housing
units across the country and have never converted a single unit to
market rate – a legacy we intend to extend to all of the 7,837
apartments in this portfolio. At Related, we believe affordable housing
is a priority for building strong communities and we look forward to
working with other property owners and managers like Aimco, as well as
local and state governments throughout the country, to continually
expand our preservation efforts so we can continue to provide affordable
housing to the thousands of Americans who call our properties home.”
After closing costs and repayment of the Hunters Point property debt,
the net proceeds to Aimco are expected to be approximately $512 million,
which the company plans to use to partially fund the
previously-announced acquisitions of Bent Tree in Fairfax County, VA and
a portfolio of six communities in Philadelphia, PA, and to reduce
leverage, including the redemption of Class A preferred stock callable
in 2Q 2019. Taken together, these transactions are expected to reduce
Aimco’s Adjusted Funds From Operations (“AFFO”) by $0.03 per share in
2018 and $0.04 per share in 2019, before becoming accretive in 2021.
“This transaction redeploys the value of the depleting cash flows of our
Asset Management business into high quality operating communities with
durable cash flows and promising future growth. Related’s ongoing
affordable business allows them to maximize the intrinsic value of
Aimco’s partnership interests while protecting and enhancing affordable
housing going forward. We believe they will be a good steward for these
communities and I appreciate our work together on this transaction,”
said John Bezzant, Aimco’s Chief Investment Officer, who negotiated the
transaction with Related.
Aimco CFO Paul Beldin added, “This transaction improves the quality of
Aimco’s earnings and provides a modest reduction in total leverage to
6.7x on a Proportionate Debt and Preferred Equity to Adjusted EBITDA
basis by the end of 2018.”
As previously announced, Aimco still expects to sell Chestnut Hill
Village, a 704-home community in northeast Philadelphia. Additional
pending asset sales will be evaluated based on Aimco’s 2019 investment
priorities.
Following the sale of its Asset Management business, Aimco will continue
to own and operate a portfolio of market rate multifamily communities,
diversified by price point and geography, in attractive and growing
submarkets across the United States.
About Aimco
Aimco is a real estate investment trust focused on the ownership and
management of quality apartment communities located in select markets in
the United States. Aimco is one of the country’s largest owners and
operators of apartments, with ownership interests in 180 communities in
22 states and the District of Columbia. Aimco common shares are traded
on the New York Stock Exchange under the ticker symbol AIV, and are
included in the S&P 500. For more information about Aimco, please visit
our website at www.aimco.com.
About Related Companies
Related Companies is the most prominent privately owned real estate firm
in the United States and one of the largest owners of affordable
housing. Formed over 40 years ago, Related is a fully integrated, highly
diversified industry leader with experience in virtually every aspect of
development, acquisitions, management, finance, marketing and sales.
Headquartered in New York City, Related has offices and major
developments in Boston, Chicago, Los Angeles, San Francisco, South
Florida, Washington, D.C., Abu Dhabi, and London, and boasts a team of
more than 3,500 professionals. The Company’s portfolio of over $50
billion in real estate assets owned or under development is made up of
best-in-class mixed-use, residential, retail, office and affordable
properties in premier high-barrier-to-entry markets. Related Affordable
is the division of Related Companies that acquires and preserves
affordable housing throughout the nation. Related owns and operates a
portfolio of more than 45,000 affordable and workforce housing units.
For more information about Related and Related Affordable, please visit www.related.com.
Forward-Looking Statements
This Release contains forward-looking statements within the meaning of
the federal securities laws, including, without limitation, statements
regarding projected results, including but not limited to: AFFO; Aimco
investments and timelines, expectations regarding sales of Aimco
apartment communities and the use of proceeds thereof; and Aimco
liquidity and leverage. These forward-looking statements are based on
management’s judgment as of this date, which is subject to risks and
uncertainties. Actual results may differ materially from those described
in these forward-looking statements and, in addition, will be affected
by a variety of risks and factors, some of which are beyond Aimco’s
control.
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,
2017, and the other documents Aimco files from time to time with the
Securities and Exchange Commission.
These forward-looking statements reflect management’s judgment as of
this date, and Aimco assumes no obligation to revise or update them to
reflect future events or circumstances. This press release does not
constitute an offer of securities for sale.
Non-GAAP Measures
Financial and operating measures found in this Release include certain
financial measures used by Aimco management that are not defined under
accounting principles generally accepted in the United States (“GAAP”).
Net Asset Value, or NAV, and AFFO are non-GAAP measures that are defined
and reconciled to the most comparable GAAP measures in the section
entitled “Non-GAAP Measures” in Item 7 of Aimco’s Annual Report on Form
10-K for the year ended December 31, 2017.
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Aimco Investor Relations
Suzanne Sorkin, 303-793-4661
Vice
President, Investor Relations/FP&A
Investor@aimco.com
or
Related
Companies
Jessica Scaperotti, 212-801-3528
Vice President,
Communications
Communications@Related.com
Source: Apartment Investment and Management Company