Dive Brief:
- The board of directors for Aimco has decided to explore alternatives to “unlock and maximize shareholder value” for the Denver-based REIT, which could include a sale or merger of the company, according to a press release.
- Aimco’s board also discussed the possibility of selling the major components of the business in one or a series of transactions and accelerating individual asset sales. The REIT is reducing its exposure to development activity and monetizing certain assets.
- In a move to simplify its holdings, Aimco agreed to sell its properties at 1001 Brickell Bay Drive and 1111 Brickell Bay Drive in Miami on Dec. 30 for a gross price of $520 million.
Dive Insight:
After closing the Brickell transactions, Aimco's portfolio sits at 5,200 units, an additional 1,000 newly constructed apartments that are expected to be stabilized within the next 12 months, an active development project on Miami's waterfront and a pipeline with more than 7.7 million square feet of developable sites.
Aimco spun off from Denver-based Apartment Income REIT Corp. in December 2020. Since then, the REIT has generated a net operating income of more than 7.6%, completed more than $1.3 billion of development projects and closed more than $1.7 billion of asset sales, among other accomplishments.
“However, our shares continue to trade at a meaningful discount to our estimate of the private market value of our assets and investment platform, which we believe has limited our ability to fund new investment opportunities and accelerate growth, " Aimco said in the press release.
If Aimco were to be sold, it would follow the path taken by its larger sibling, AIR, last year.
Last April, AIR and New York City-based investment manager Blackstone announced they had entered into an agreement where Blackstone Real Estate Partners X had acquired all outstanding common shares of AIR for approximately $10 billion, including the assumption of debt.
Blackstone bought AIR for $39.12 per share, a 25% premium on its closing price on the New York Stock Exchange on April 5, 2024, the last trading day before the transaction’s announcement.
At the time, AIR owned 27,010 units across 76 rental housing communities, concentrated primarily in coastal markets including Miami, Los Angeles, Boston and Washington, D.C.
Despite the price fetched by AIR, Aimco’s board came short of committing to a sale.
“There can be no assurance that this expanded strategic process will result in any transaction or transactions or other strategic changes or outcomes, and the timing or outcome of any such event is similarly uncertain,” the REIT said in the press release.
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