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  "docId": "019dd923-622b-71dc-a6dd-a1a10a3d7134",
  "docSlug": "8cb827ce81b1",
  "documentTitle": "Apartment Investment and Management Company (AIV)",
  "authorId": "26_Land_and_Buildings",
  "authorName": "Jonathan Litt",
  "documentKindSlug": "shareholder-letter",
  "documentKindLabel": "Shareholder letter",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2020-09-22 00:00:00",
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  "notes": "This is a page from an activist investor letter (likely Land & Buildings) criticizing Apartment Investment and Management Company (AIV).",
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      "kind": "callout",
      "text": "We therefore call on the Board to immediately put the proposed spin-off to a shareholder vote.",
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      "text": "Total Shareholder Returns: -914%",
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      "kind": "paragraph",
      "text": "Although the Company's September 14th announcement caused AIV's stock to inflect higher, we believe that is due to the disclosed sale of an interest in a $2.4 billion California apartment portfolio at a ~4.0% cap rate as the sale corroborated the Company's stated NAV of $58 per share. Shareholder and analysts have raised serious concerns regarding the proposed spin-off. The Board's troubling track record further causes us to seriously question whether the proposed transaction was devised with the best interests of shareholders in mind. In fact, the Company has now underperformed its Proxy Apartment Peers since the announcement through September 21, 2020 as investors further analyzed the proposed restructuring.",
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      "kind": "paragraph",
      "text": "Historically, the Company has been a significant underperformer relative to its Proxy Apartment Peers since its IPO. Terry Considine has been the Company's Chairman and CEO since its IPO.",
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      "kind": "paragraph",
      "text": "We believe that shareholders deserve the right to express their views on such a material and potentially value-destroying plan. The proposed spin-off is far too important for the future value of AIV to be rushed through without shareholder support. We therefore call on the Board to immediately put the proposed spin-off to a shareholder vote.",
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      "kind": "paragraph",
      "text": "quality apartments. Completing a spin-off without fully and objectively evaluating all opportunities for the Company's real estate could result in material shareholder value destruction.",
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      "kind": "paragraph",
      "text": "AIV has persistently traded at a substantial discount to its own NAV estimate as well as sell-side estimates of NAV. This historical discount, an estimated 18% over the trailing five years, is likely due to a poor capital allocation strategy and mixed operating performance over an extended period.",
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      "kind": "paragraph",
      "text": "Perhaps even more concerning, the Board and management appear to be rushing completion of the spin-off before shareholders would have the opportunity to express their views on this issue or elect Board members to better represent shareholder interests. As currently conceived, the proposed spin-off would be completed prior to the Company's 2021 Annual Meeting of Shareholders and without requiring a shareholder vote. By structuring the transaction as a taxable spin-off, the Board and management team have conveniently ducked shareholder approval of the transaction.",
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      "kind": "paragraph",
      "text": "We also call on the Board to provide a fulsome explanation as to whether it fully explored all available strategic opportunities to maximize value for AIV, including a sale of the Company. Did the Board seek and/or receive any offers for the Company given the current discounted share price and robust private institutional demand for apartment assets? Is the proposed spin-off truly the most value-maximizing opportunity available or are the Board and management team attempting to jettison their lousy track records and avoid accountability at all costs? Shareholders deserve answers.",
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      "kind": "source-note",
      "text": "Source: Bloomberg. Note: Data is July 22, 1994 through September 18, 2020; Proxy Apartment Peers defined as AvalonBay Communities, Inc. (AVB), Camden Property Trust (CPT), Essex Property Trust (ESS), Equity Residential (EQR), Mid-America Apartment Communities, Inc. (MAA), and UDR, Inc. (UDR) as disclosed the Company's Proxy Statement filed March 11, 2020.",
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      "text": "Total Shareholder Returns (Since IPO July 1994): AIV 1032%, Peer Avg 1946%, Underperformance -914%",
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