AIV – Market expectations are for Uniform ROA expansion, but management is concerned about debt maturities, resident retention, and prelease rates

• Apartment Investment and Management Company (AIV:USA) currently trades at historical highs relative to Uniform Assets, with a 1.7x Uniform P/B. At these levels, markets are pricing in bullish expectations for the firm, while management is concerned about 2019 debt maturities, their ability to retain their residents, and the sustainability of elevated prelease sales
• Specifically, they may be exaggerating their focus on profitability in their property operations and may lack confidence in their ability to invest in properties with higher rates of return. Additionally, they may be concerned about refinancing their 2019 debt maturities, and may lack confidence in their ability to meet asset management income expectations. Furthermore, they may lack confidence in their ability to improve average daily occupancy rates, and may be concerned about the seasonality of lease rates. Moreover, management may lack confidence in their ability to retain their residents to avoid turn costs and frictional vacancy, and to maintain robust prelease rates