With a large affordable portfolio, a series of joint ventures, and a different financing strategy, AIMCO has always had a slightly different story than its apartment REIT brethren. On Friday’s first quarter earnings call CEO Terry Considine took steps to outline how the Denver-based company plans to simplify its story.
While the company will continue to reduce leverage, sell its asset management group, and accelerate its dispositions, the biggest news may have come with its affordable portfolio. The company intends to sell off about 60 properties this year, but could increase that number by 20 or 25. However, instead of keeping it at about 10-percent of its portfolio as affordable, Considine now says he’s open to selling all of those assets.
“Driving the change is the fiscal budget pressure that the government faces,” Considine said.
AIMCO isn’t a ground-up developer, but it maintains a robust redevelopment pipeline. This year it plans to renovate 10 properties for a cost of about $480 million.
Driving the renovation process is, of course, strong fundamentals. Like its peers AIMCO posted strong numbers with its biggest improvements in Phoenix, Orange County, and Miami. The company posted a same store revenue increase of 4.2 percent, boosted by improving rental rates (renewals came in at 5.1 percent) and higher occupancies. Unlike some of its peers, who let occupancy slide in the quarter, AIMCO kept its occupancy at almost 96 percent. One segment of its portfolio has shown a noticeable improvement.
“We’re starting to see some acceleration with C’s,” said Keith M. Kimmel
executive vice president of property operations. “That’s one of the advantages of having a blended portfolio.”