DENVER, Feb. 17 /PRNewswire-FirstCall/ -- Apartment Investment and Management Company ("Aimco") announced today that the company has entered into a purchase and sale agreement with MCZ/Centrum Florida XVI, LLC to sell a portion of the Flamingo South Beach property known as the South Tower. The South Tower sale price is $163.5 million and includes 562 residential units and Aimco's rights to the property's marina. Aimco owns 99.1% of the Flamingo South Beach property. The agreement also provides the buyer with the option to purchase the North and Central Towers at later dates.
The buyer paid $5 million to Aimco, non-refundable, for the option to purchase the 614-unit North Tower for $169 million between September 1, 2006 and February 28, 2007, and the option to purchase the 513-unit Central Tower, along with the remainder of improvements on the property, for $267.5 million between December 1, 2007 and May 31, 2008. The buyer may extend these periods under certain conditions.
"Flamingo South Beach is an extraordinary property. We are pleased to close this transaction. By converting the property to for-sale use, Aimco achieves an excellent return on its investment," comments Harry Alcock, Aimco's chief investment officer.
The agreement also provides Aimco with a profit participation if certain thresholds are met. Aimco will receive the first $19.8 million in proceeds in the proposed condominium conversion after certain development fees and certain returns on the buyer's equity have been achieved, plus 20% of the buyer's net profits thereafter. The agreement also provides Aimco with $600 per unit per year for the use of the health club, if and when each tower is sold. Aimco will continue to operate the South Tower for up to one month and will continue to operate the remainder of the property if and until the subsequent options are exercised.
Due to the staggered timing of the proposed sale of all three towers and improvements, Aimco projects the effect of the sale of the South Tower on 2006 FFO to be a benefit of approximately $0.02 per share, assuming net proceeds are used to pay down corporate debt. Existing debt on the South Tower was $76 million.
Aimco is a real estate investment trust headquartered in Denver, Colorado that owns and operates a geographically diversified portfolio of apartment communities through 21 regional operating centers. Aimco, through its subsidiaries, operates 1,370 properties, including approximately 240,000 apartment units, and serves approximately one million residents each year. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. Aimco common shares are included in the S&P 500.
