AIV- Apartment Investment and Management Company

[thepupil]

that's fine, but you know that REITs can't retain earnings and that the vast majority issue shares or have done so in the past, right?

 

just because i've got my fancy data service handy

 

AMT, best performing REIT, printed shares  2020, 2016, and 2015.

DLR: 2019, 2018, 2016, 2015, 2012, 2011, 2010,

SPG, best mall REIT, printed shares in 2020, 2012, 2009

BXP, best office REIT, turned the printer on in 2020, 2017, 2014, 2009

KRC: 2020, 2018, 2018, 2017, 2014, 2013, 2012, 2012, 2011, 2010

EQR: 2019, 2013, 2012

AVB: 2018, 2015, 2014, 2013, 2012, 2011,

 

all reits "print" shares. you are right that management isn't great and potentially unfriendly (there are several activists and short term oriented funds in this for a reason), but you are right for the wrong reasons, and since you are a learning machine, you should learn that how REITs interact with capital markets is not a rules based "if they issue shares its bad...if they don't it's good"

 

I don’t think any one would regard the above REITs as having bad or unfriendly management. They’re the blue chips.

 

 

 

 

 

 

[Gregmal]

Yea, SPG funding TCO with shares at $72....rub it in...yuck.

[LearningMachine]

that's fine, but you know that REITs can't retain earnings and that the vast majority issue shares or have done so in the past, right?

 

just because i've got my fancy data service handy

 

AMT, best performing REIT, printed shares  2020, 2016, and 2015.

DLR: 2019, 2018, 2016, 2015, 2012, 2011, 2010,

SPG, best mall REIT, printed shares in 2020, 2012, 2009

BXP, best office REIT, turned the printer on in 2020, 2017, 2014, 2009

KRC: 2020, 2018, 2018, 2017, 2014, 2013, 2012, 2012, 2011, 2010

EQR: 2019, 2013, 2012

AVB: 2018, 2015, 2014, 2013, 2012, 2011,

 

all reits "print" shares. you are right that management isn't great and potentially unfriendly (there are several activists and short term oriented funds in this for a reason), but you are right for the wrong reasons, and since you are a learning machine, you should learn that how REITs interact with capital markets is not a rules based "if they issue shares its bad...if they don't it's good"

 

I don’t think any one would regard the above REITs as having bad or unfriendly management. They’re the blue chips.

 

Thanks Pupil for pulling this data so quickly and sharing.  I agree with you things are more complex than following a simple rule that "if they issue shares its bad...if they don't it's good".  I agree we need to look at each share issuance to see how it served the shareholders.  However, every time I look at each issuance, I find that management can usually provide some sort of reasoning for each time printing press is run.  Despite that reasoning, every issuance does not end up serving the shareholders well.  All it takes is some issuances to not work well for shareholders for a holding to not be great.  So, a trigger-happy management ends up making more mistakes. Somehow, I have managed to avoid all the stocks you have listed above.  Maybe you consider them best run REITs, but I'm hoping you won't consider them best run companies for shareholders.  I haven't yet compared how they have done in serving shareholders over multiple decades to something like BRK, but probably not as well.

[thepupil]

Since 2004 (longest time frame I had for a bunch of tickets I put in) AMT and DLR are 15-22 baggers (18-22%/yr), so ya I’d consider them well run for shareholders.

 

Good management and the right sector (towers and data centers) is powerful. Their  share issuance is a part of the value growth that occurred

 

Since 2004, SPG, BXP and KRC returned about 5%/yr to BRK’s 8% (it’s a tough endpoint, given what’s happens to office and malls not great place to be right now). AIV returned 6%/yr Over the time frame.

 

I think if you’re thinking in decades and looking for very high management quality AIV definitely not a  stock for you.

 

 

 

[LearningMachine]

Since 2004 (longest time frame I had for a bunch of tickets I put in) AMT and DLR are 15-22 baggers (18-22%/yr), so ya I’d consider them well run for shareholders.

 

Good management and the right sector (towers and data centers) is powerful. Their  share issuance is a part of the value growth that occurred

 

Since 2004, SPG, BXP and KRC returned about 5%/yr to BRK’s 8% (it’s a tough endpoint, given what’s happens to office and malls not great place to be right now). AIV returned 6%/yr Over the time frame.

 

I think if you’re thinking in decades and looking for very high management quality AIV definitely not a  stock for you.

 

I understand your point better now. 

 

Looks like in case of AMT, they must have benefited from also building an oligopoly position through acquisitions.  So, even if they printed shares for buying a location at a market price, that location becomes worth more as part of their portfolio as it makes their oligopoly position stronger and gives them better pricing power in the area.

[thepupil]

For sure, the best issue shares (AMT) the worst issue shares (look at any RMR managed REIT) and everyone else in between. My point is that if issuance = unfriendly then you shouldn’t buy any REIT, MLP, BDC, etc (pass through vehicles that can’t retain)...which there are obviously plenty of normal companies out there such that you never have to invest in those.

[CorpRaider]

Yeah, if they are admitting something is "dilutive" on the front end, as part of their strategy, you can be pretty sure they are talking about short term earnings/AFFO (rather than their stated view of long term value).  I think they mean "we can put stuff in development co that we are being penalized for in yield-co." 

 

I think the whole thing is kind of stupid.  Like run the payout down to the tax minimum, maybe with optional stock dividends for the hodlrs and/or a DRIP program, and do buybacks if you really think the stock is cheap.

 

I wonder if Zell likes/tolerates Litt.  Could be EQC part 2? (these guys aren't nearly as bad as RMR)

 

I'd probably rather just sell to Blackstone or BAM (at the end of a bidding war).

 

I'm down to help vote the board out.

[thepupil]

the special dividend / reverse split has officially happened.  gave me quite a start because Fidelity chose to value the position at the nice price of $0.00 today, causing me to wonder where my HSA (which is oddly and randomly concentrated in AIV) went.

 

Interactive Brokers on the other hand, has accounted for the upcoming stock dividend in my liquidation value for like a month.

 

in more important news, the company is moving ahead with the spin.

 

I probably won't get to reading this in full for a while, but one thing I did notice is that AIR is opting out of MUTA (Maryland Unsolicited Takeover Act), whereas New Aimco (CrapCo) is opting in and staggering the board.

 

CrapCo is really setting itself up to trade like hell.

 

https://www.bamsec.com/filing/119312520305789?cik=922864

 

 

[thepupil]

Can't you feel them circling, honey?

Can't you feel them swimming around?

You got fins to the left, fins to the right

And you're the only bait in town

Oh-oh-woah, oh-oh-woah

You got fins to the left, fins to the right

And you're the only girl in town

 

 

 

Westdale Is Said to Approach Aimco With Takeover Proposal

  By Scott Deveau

 

  (Bloomberg) -- Westdale Real Estate Investment and Management has

  approached Apartment Investment & Management Co. with an all-cash takeover

  proposal, people familiar with the matter said.

  The unsolicited offer for Aimco is at a premium to the real estate investment

  trust’s current market value of about $4.7 billion, the people said, asking not

  to be identified as the matter is private. The target has not yet responded to

  the proposal, which was made last week, the people said.

  Westdale’s proposal comes as the Denver-based company faces an activist

  investor opposing Aimco’s plans to split into two public entities. Jonathan Litt

  has called for a special meeting for shareholders to vote on the move. The

  company has acknowledged that Litt has enough support to request the

  meeting, but has said the meeting will likely come after the split, which is

  slated for Dec 5.

  It’s unclear whether the overture will lead to a transaction, the people said. A

  representative for Westdale declined to comment. A representative for Aimco

  wasn’t immediately available to comment.

  Aimco has said the split would provide investors with a simple and transparent

  way to invest in the multifamily properties sector through the newly created

  Apartment Income REIT. About 90% of the company’s apartments would be spun

  off in the REIT in the form of a taxable dividend under the plan.

  Litt’s firm, Land & Buildings Investment Management, which has said it owns

  1.4% of Aimco, published a letter in September criticizing the plan, saying the

  two companies would not trade anywhere near the underlying value of their

assets.

 

Founded in 1991, Westdale is a private real estate investment and management company headquartered in Dallas, according to its website. Its 1,200 member team controls about 200 commercial and multifamily properties valued at more than $5 billion, the site shows.

[thepupil]

i think there's a chance management will jam the transaction through and that will potentially be their undoing.

 

it's go time baby. private market meet public market*.

 

 

*(pupil may or may not use this as an opportunity to wussy trim given the ~40% move since purchase)

[CorpRaider]

I mean, if you're going to hit everyone with a tax bill anyways, might as well cashier yo' ass.

 

Man, I didn't get my full position in yet.  Oh well, it is really hard to dislodge mgmt under Maryland law, so maybe there will at least be some scary headlines.

 

MGMT seems quite egregious/entrenched if they are rolling with the transaction despite acknowledging Litt has proxies to call special meeting.

[thepupil]

Company spurning/resisting the offer, no word on price. been halted for a while.

 

Aimco Confirms It Received a Conditional Non-Binding Indication of Interest That is Grossly Inadequate and Will Proceed with the Separation of AIR and Aimco

Business Wire

DENVER -- December 2, 2020

Apartment Investment and Management Company (NYSE: AIV) (“Aimco”) confirmed that it received a conditional non-binding indication of interest to purchase Aimco. Aimco announced that its board of directors unanimously determined the proposal is grossly inadequate and not in the best interest of Aimco and its stockholders, and that Aimco will proceed with the previously announced separation of Aimco and Apartment Income REIT Corp. (“AIR”). Aimco further stated that it does not intend to make any additional comments on this matter unless and until it deems further disclosure is required.

As previously announced, the expected separation of AIR from Aimco through a pro rata distribution (the “REIT Distribution”) of one share of Class A common stock of AIR for every one share of Class A common stock of Aimco is expected to be completed prior to trading hours on December 15, 2020. Aimco noted that its stockholders prior to the REIT Distribution will own both Aimco and AIR after the REIT Distribution, that the REIT Distribution is expected to unlock significant shareholder value, and that each of Aimco and AIR will be able to pursue additional opportunities after the REIT Distribution to further increase shareholder value.

[thepupil]

As previously announced on November 16, Tesla Inc. (NASD:TSLA) will be added to the S&P 500. Tesla will replace Apartment Investment and Management Co. (NYSE:AIV)

 

Free press for AIV!

 

 

[fareastwarriors]

As previously announced on November 16, Tesla Inc. (NASD:TSLA) will be added to the S&P 500. Tesla will replace Apartment Investment and Management Co. (NYSE:AIV)

 

Free press for AIV!

 

Will there be selling pressure?

 

[Gregmal]

I very badly want/wanted to grab some AH at 39 and maybe below, but I've been dabbling with MAA recently, and compared to AIV, MAA just looks so much sexier. FL, GA, TX, AZ NC, Nashville, etc...thats exactly where I want to be. Dont have the retards running the ship issue either. I wish Litt luck here. The more I looked at it, the more appalling their behavior became. But entrenched management and REITs is a dangerous game.

[thepupil]

As previously announced on November 16, Tesla Inc. (NASD:TSLA) will be added to the S&P 500. Tesla will replace Apartment Investment and Management Co. (NYSE:AIV)

 

Free press for AIV!

 

Will there be selling pressure?

 

Your guess is as good as mine

 

More accurately: I’m sure some index will funds will sell, but who knows what the net result will be.

 

It is down 4% AH

[thepupil]

I woke up and was shocked to see RemainCo bid at $11-$12 in the pre-market. I have no idea why it's trading there. Per the company, NAV is $8 / share. this is a staggered board, MUTA elected hodge podge of non income producing assets. I was expecting a big discount to NAV.

 

i sold RemainCo.

 

having paid low $30's for the combo, this leaves me long AIR at a basis of $21-$22, which creates a 5.5x levered apartment co at a 7-8% dividend yield. (1.72 / 22 = 7.8%).

 

I get a little scared around corporate actions because one always feels there are more intelligent or diligent people in the room potentially, but i can see the AIR when issued in my IBKR account so I know I own that, and the volume of shares in AIV convinced me this was an inefficiency (or just someone really wants remainco) rather than a misunderstanding on my part. 

 

we will see.

 

EBIT: now at <$6. I didn't have the clarity of mind to think I should short it, but nevertheless good execution on the RemainCo sale

[CorpRaider]

I snooze. I lose.

[thepupil]

i have substantially reduced this position overall through a sale of 100% of AIV pre-market and subsequent sales of AIRC, though I continue to own some AIRC.

 

Initiated a very small position in AIV at $5.50 (RemainCo/CrapCo) after selling $11-$12.

 

fun morning, had to enable pre-market trading in my HSA (never envisioned using that) and call IBKR to trade the AIRC as it was showing up as the WI shares rather than regular way in my account (fidelity doesn't show the AIRC at all because they are always slow on corporate actions). this was some work, but the hourly rate was satisfactory!

 

now time to get some real work done.

[Gregmal]

Was anyone, including Pupil watching pre market? From some trade data I saw, looked like this was trading even higher than $12, like $14-$20 right out of the gate. Can anyone confirm?

 

I do know, almost every time I can think of, on big corporate actions like this, shares typically start off trading higher than they finish trading, especially pre market. But perhaps thats just my individual observation.

 

I hate these guys but decided to pick up a swing position at $4.95

[thepupil]

I woke up and it was at $12.50, got the IBKR off at $12 And Fido off at $11. Don’t know where it was befor that. I think we have TSLA to thank because the robinhoodies thought this was trading down 80% from the index boot and we’re buying. They were aware of AIV because of TSLA. This is speculation based on some Twitter stuff.

[Gregmal]

Must be the gift of capitalism...Those Tesla traders are so rich they've got spare money to give to us poor value guys...

[thepupil]

Yep, here I am celebrating the 15% of prior package inefficiency ($6/$40) when the TSLA longs make that every week

[Foreign Tuffett]

Very nice work thepupil. You definitely did your part to improve the efficiency of the capital markets today.

[Brett]

I woke up and was shocked to see RemainCo bid at $11-$12 in the pre-market. I have no idea why it's trading there. Per the company, NAV is $8 / share. this is a staggered board, MUTA elected hodge podge of non income producing assets. I was expecting a big discount to NAV.

 

i sold RemainCo.

 

having paid low $30's for the combo, this leaves me long AIR at a basis of $21-$22, which creates a 5.5x levered apartment co at a 7-8% dividend yield. (1.72 / 22 = 7.8%).

 

I get a little scared around corporate actions because one always feels there are more intelligent or diligent people in the room potentially, but i can see the AIR when issued in my IBKR account so I know I own that, and the volume of shares in AIV convinced me this was an inefficiency (or just someone really wants remainco) rather than a misunderstanding on my part. 

 

we will see.

 

EBIT: now at <$6. I didn't have the clarity of mind to think I should short it, but nevertheless good execution on the RemainCo sale

 

Do you have the source on where AIV said RemainCo's NAV is $8 a share? I think I saw it somewhere but I couldn't find it in the docs.