Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today it has closed on the sale of a 20%, non-controlling position in its Parkmerced mezzanine loan investment for $33.5 million.
Pursuant to the terms of the amended agreement, the purchaser will have the option to acquire the remaining 80% for an additional $134 million plus interest accruing at no less than 19% annually through May 2024. The purchaser pre-paid $4 million of interest at the time of closing.
So long as the purchaser’s option remains unexercised, Aimco will receive a first priority return from any payments made to service or pay down the mezzanine loan equal to $134 million plus no less than a 19% annualized return as well as 80% of any residual payments after the purchaser receives a 10% annualized return on its subordinate investment.
Separately, Aimco monetized its associated interest rate swaption for $54 million and invested the proceeds in a short-term treasury instrument as an ongoing hedge of the Parkmerced mezzanine loan investment.
In total, Aimco has monetized $91.5 million of its Parkmerced mezzanine investments and, subject to the purchaser’s exercise of its option, would realize gross proceeds of approximately $248 million, to be adjusted for timing of the transaction.
“This partial sale and amended agreement represent significant progress towards Aimco’s goals to reduce exposure to west coast markets and passive investments. I am thankful to the Aimco team for their work and creativity in the face of challenging market conditions,” commented Wes Powell, Aimco Chief Executive Officer.
Aimco is a diversified real estate company primarily focused on value add, opportunistic, and alternative investments, targeting the U.S. multifamily sector. Aimco’s mission is to make real estate investments where outcomes are enhanced through its human capital so that substantial value is created for investors, teammates, and the communities in which we operate. Aimco is traded on the New York Stock Exchange as AIV. For more information about Aimco, please visit its website www.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 forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Aimco that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statement. Important factors, among others, that may affect actual results or outcomes include, but are not limited to: (i) the risk that the expectations may not be completed, as expected, in a timely manner or at all and (ii) changes in general economic conditions, including, increases in interest rates and as a result of the COVID-19 pandemic. 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, 2022, and subsequent Quarterly Reports on Form 10-Q and 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.
Matt Foster, Sr. Director, Capital Markets and Investor Relations
Investor Relations 303-793-4661, firstname.lastname@example.org