What happened

Shares of real estate investment trust (REIT) Apartment and Investment Management (NYSE: AIV) fell a huge 86% at the open of trading on Dec. 15 to a bit under $6 a share. The thing is, investors shouldn't get too caught up in the decline because it's just a function of a key business makeover that was completed today.

So what

Apartment and Investment Management (AIMCO) essentially split its business into two parts. One, which retained the Apartment and Investment Management name, is focused on the development and redevelopment of apartment properties. The other, called Apartment Income REIT (NYSE: AIR), owns a collection of operating apartment assets that use to be a part of AIMCO's business.

It's a logical breakup -- putting mature income-producing assets into one company and construction and development oriented assets into another. That, theoretically, will allow both to shine in their own way.

Image source: Getty Images.

Shareholders of the old AIMCO received one share of Apartment Income REIT for each share of AIMCO stock they owned as of Dec. 5. Fractional shares will be paid in cash.

Apartment Income REIT started the day trading at a little under $40 a share. That's roughly what AIMCO closed at the day before, so investors are actually up on the day when you add the value of the two stocks together.

Now what

At this point, investors have to make a choice, including the choice to do nothing. AIMCO is a development-focused company; Apartment Income REIT is a more traditional property-owning REIT. You can own both, effectively retaining what existed before, or pick one of the two based on your investment preferences. Either way, that big drop in Apartment and Investment Management stock is not what it seems at first.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.