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DENVER-Apartment Investment and Management Co. has sold a minority stake in three of its West Los Angeles assets to a fund managed by JP Morgan Asset Management. The fund paid $202 million for a 47% stake in the 1,382-unit portfolio.

The properties involved in the transaction are Palazzo at Park La Brea, Palazzo East at Park La Brea and the Villas at Park La Brea. The combined value of the properties is $726 million. After deducting $296 million of debt on the properties the implied equity value is $430 million.

In addition to receiving $202 million, Apartment Investment Management also will operate the properties in exchange for a property management fee and certain other fees over the term of the JV.

Prior to the transaction, Apartment Investment Management considered itself over-allocated in the West Los Angeles market. The company's chief executive David Robertson says the JV allows the company to "re-balance efficiently our geographic allocation of capital."

Apartment Investment Management intends to use the proceeds from this transaction for general corporate purposes, including the repurchase of common stock under its approved share repurchase program. Using the proceeds to buy back shares at current market prices "is accretive to Aimco's shareholders," says company CFO Tom Herzog.

Instant Insights /

47% Stake in 1,381 Apartments Fetches $202M

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