Aii is analytical and factual in underwriting rent increases. We take market data on rents for competing properties and create a detailed plan to move a property from the lower to the higher end of the range. Aii's acquire-transform-realize investment process is well defined, and we execute with meticulous precision.
Step one is to acquire the right properties at the right price. A classic Aii acquisition is an apartment building with "good bones" suffering from neglect due to mismanagement or complacency. We look for properties in the path of progress experiencing upward demographic and social trends. Our network of industry contacts provides a steady source of acquisition opportunities. Sometimes we also see off-market transactions and special situations—motivated sellers, for example, or lenders who are confident that Aii can turn around an underperforming property.
Upon acquisition, we transform every property across four dimensions: physical, operational, environmental and social. Physical renovation is step one in achieving full potential in terms of rental income and long-term value realization. Operational improvements increase occupancy by raising the marketing and community profile and reduce costs through efficient building management. Diverse environmental initiatives conserve resources and improve energy efficiency. And social initiatives improve the tenant experience through special facilities and social programs for adults and children.
Successful acquisition and transformation set the stage to realize value for our investors. The purpose of the exit is to realize the full current value of the asset based on improved rental income and property value appreciation. Exit opportunities include public and private real estate investors and core and income-oriented funds. Sometimes we list a property with brokers; sometimes we sell strategically to buyers who make an unsolicited offer.