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Aimco Spins Off Multifamily Portfolio Into $8B New REIT

777 South Broad St. in South Philadelphia

Apartment Investment & Management Co. is undergoing a major restructuring to focus more on being a developer.

Aimco announced the formation of a new, publicly traded real estate investment trust named Apartment Income REIT through a Securities and Exchange filing on Monday. AIR, as it was called in the filing, will focus on acquiring and managing stabilized multifamily assets without much debt, starting with a $10.4B portfolio of former Aimco properties.

AIR's starting portfolio consists of 98 properties totaling 26,599 apartments, of which its ownership stake is 93.5%. Five of those properties are still under construction, so AIR is leasing them back to Aimco until its development and lease-up are complete. Including debt and expenses, AIR has an estimated net asset value of $7.8B with each share initially priced at $50, Aimco said in the filing.

For future development opportunities in AIR's portfolio, Aimco will have first right of refusal to engage in further net lease deals. AIR and Aimco will operate independently from each other and have different offices, with AIR based in Denver and Aimco based in Denver and Bethesda, Maryland.

Following its logic of owning the most reliable income generators, AIR's portfolio will contain almost exclusively of Class-A and Class-B properties in major metropolitan areas. Of its initial portfolio, 22% are in the Los Angeles market, with Philadelphia, Miami, Denver, San Diego, Boston, Washington, D.C., and the San Francisco Bay Area each accounting for between 7% and 12% of the REIT's holdings.

Aimco will retain ownership of several commercial properties as well, including 1001 Brickell Bay Tower, a 350K SF office building in Downtown Miami, and an adjacent yacht club.

Longtime Aimco Executive Chairman and CEO Terry Considine will retain both titles at each company, with a plan to step down as Aimco CEO once a suitable replacement is found. Aimco's board of directors will become AIR's board, and new board members will be selected for Aimco.