AIMCO (AIV) announces corporate restructuring and spin-off.

Apartment Investment and Management Company (AIMCO or AIV) announced today that it intends to separate its current apartment business into two entities, both of which will be publicly traded.

The first step in this process will be the spin-off of a $10 billion portfolio of stabilized apartment communities to be called Apartment Income REIT (AIR), which is intended to benefit from lower leverage, reduced overhead costs, and avoidance of development activity.  The residual business, which will retain the AIMCO name, intends to focus on value-add real estate opportunities including development.  Based on NAV, approximately 86% of AIMCO's current equity value will be transferred into the income REIT with the residual 14% represented by the development company.  AIMCO also said that shareholders are expected to receive an annual dividend of $1.72/share in 2021, representing an approximate 5% increase from current levels.

As a prelude to the restructuring, AIMCO also announced that it has completed a $2.4 billion joint venture where AIV contributed 12 properties in California valued at an implied NOI cap rate of 4.2%.  AIMCO has retained a 39% interest in the JV, which is levered approximately 50%.  The reduction in consolidated debt leverage is intended to provide Apartment Income REIT with access to the corporate bond market based on expected post-spin leverage of approximately 5.9x.

AIMCO is a national owner / operator of apartment properties with a current portfolio of 125 properties in 17 states and the District of Columbia. The company is a member of the S&P 500 and has a current market capitalization of approximately $10.9 billion.