DENVER-Chris Pike, an analyst with UBS Investment Research in New York City, is projecting that locally based Apartment Investment and Management Co., the nation’s largest apartment real estate investment trust by some measures, will increase its funds from operations per share by $0.14 and $0.07, respectively, in 2004 and 2005. FFO is considered one of the most important measures of a health of a REIT.

“The basis of this upward revision is mainly due to a series of one-time items recognized in the third quarter,” according to Pike’s report. “In addition, ancillary income remains variable; therefore we remain conservative in these assumptions leaving room for potential upside.”

Pike points out that while occupancy was flat year over year, a sequential improvement of 500 basis points to 92.9% “deserves recognition.” On the other hand, now the real work begins. “We are concerned the upside associated with easy comps and the realization of a more normalized operating environment may limit further fundamental improvement, especially during the seasonally weaker fourth quarter and first quarter periods,” according to Pike.

And although Aimco posted a $0.08 “surprise” to Pike’s third-quarter estimate, “we believe by removing one-time items, third-quarter results met AIV’s expectations due to lower than anticipated interest rates and variable ancillary income, not necessarily improving fundamentals.”

Pike is maintaining his $31 price target for Aimco. “While we reduced our discount rate by 20 basis points per share to 6.5%, we also reduced our dividend growth forecast to 3%,” according to his report. “We still remain concerned regarding leverage and dividend payout.”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.