Aimco (AIV) Acquires Bent Tree Apartment Community For $160M
Zacks Investment Research | Feb 22, 2018 09:24PM ET
Apartment Investment and Management Company (NYSE:AIV) – better known as Aimco – announced the acquisition of Bent Tree apartment community in Fairfax County, VA. In the first 12 months of ownership, this $160-million deal is likely to benefit the company's adjusted funds from operations per share by about a cent.
Situated in suburban Fairfax County, the Bent Tree apartment community consists of 748-apartment homes. It is located beside two other communities owned by Aimco, having 1000-apartment homes. Bent Tree is a B-quality community with the average rent of approximately $1500 per unit. The acquisition is a strategic fit for the company, as with some capital investments, the units have the capability to generate higher than market rate revenue growth.
The transaction is in line with Aimco’s strategy of revamping its portfolio through property sales and reinvesting the proceeds in select apartment homes with higher rents, superior margins and higher-than-expected growth.
As this community is located a few minutes away from the Dulles International Airport and within traveling distance from downtown D.C., the residents are provided with opportune access to employment. In fact, onsite amenities and comfortable homes will likely hold significance for educated and high-income customers.
Aimco plans to put up for sale the same value of communities that have the probability of lower rental growth and lower expected free cash flow internal rates of return (FCF IRR), in sync with its paired trade discipline. The company expects Bent Tree’s FCF IRR to surpass the FCF IRR of the properties that will be vended to support the acquisition by minimum 300 basis points.
This acquisition was financed with bank borrowings awaiting the anticipated third-quarter sales to complete the paired trade funding.
Shares of Aimco have lost 16.5% in the past six months, compared with the decline of 15.5% recorded by the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.