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Aimco Acquires 100% Ownership of Palazzo Properties

Sale Values LA Properties at $695,107/Unit
July 6, 2017
Apartment Investment and Management Company (Aimco) (NYSE:AIV) acquired the 47% interest in the Palazzo joint venture owned by institutional investors advised by J.P. Morgan Asset Management for $451.5 million.

Aimco now owns 100% of the three Palazzo communities totaling 1,382 units: Palazzo at Park La Brea, a 521-apartment home community; Palazzo East, a 611-apartment home community; and Villas at Park La Brea, a 250-apartment home community. Aimco’s price paid for the 47% interest values the properties at about $960.65 million or about $695,107/unit.

The communities are in the Mid-Wilshire district of Los Angeles two miles from Beverly Hills, Hollywood and Century City, and six miles in opposite directions from both Downtown LA and Santa Monica.

“We appreciate the Mid-Wilshire submarket with its highly educated and high-income customers who value the proximity to transportation, job centers, and upscale retail, including The Grove, literally across the street…and where we can see clearly that future development is increasingly difficult,” said Aimco chairman Terry Considine. “We expect to continue the operation of the properties and to redevelop each, over time and at the right time, to serve different and distinctive market segments.”

The acquisition was funded by taking title subject to existing allocable debt of $140.5 million and by payment of $311 million in cash proceeds funded with bank borrowings. In addition, Aimco will use proceeds from the sale of properties pending in Rhode Island, Virginia, Maryland, and New Jersey.

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