What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-09 · 575 added, 338 removed, 757 unchanged (55% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2022

June 30, 2022

December 31, 2021

8 unchanged sentences

Right-of-use lease assets

Receivable from lease termination

Other assets, net

10 unchanged sentences

Commitments and contingencies (Note 4)

Common Stock, $ 0.01 par value, 510,587,500 shares authorized at both March 31, 2022 and December 31, 2021, and 149,689,847 and 149,818,021 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Common Stock, $ 0.01 par value, 510,587,500 shares authorized at both June 30, 2022 and December 31, 2021, and 149,096,590 and 149,818,021 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Retained Earnings (accumulated deficit)

Total Aimco equity

6 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Rental and other property revenues

6 unchanged sentences

Mezzanine investment income, net

Unrealized gains on interest rate options

Realized and unrealized gains (losses) on interest rate options

Realized and unrealized gains (losses) on equity investments

Gains on dispositions of real estate

Lease modification income

Other (expense) income, net

Income before income tax benefit

Income tax benefit

Income (expense) before income tax benefit

Income tax (expense) benefit

Net income (loss)

Net (income) loss attributable to redeemable noncontrolling

interests in consolidated real estate partnerships

Net loss (income) attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

in consolidated real estate partnerships

Net income attributable to common noncontrolling

Net (income) loss attributable to common noncontrolling

interests in Aimco Operating Partnership

Net income attributable to Aimco

Net income attributable to Aimco per common share –

Net income (loss) attributable to Aimco

Net income (loss) attributable to Aimco per common

share –

basic (Note 6)

Net income attributable to Aimco per common share –

Net income (loss) attributable to Aimco per common

share –

diluted (Note 6)

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2022 and 2021

For the Three Months Ended June 30, 2022 and 2021

(In thousands)

1 unchanged sentence

Noncontrolling

Accumulated Deficit

Retained Earnings (accumulated Deficit)

Balances at March 31, 2021

Net loss attributable to Aimco

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Net loss attributable to common noncontrolling interests in Aimco Operating Partnership

Redemption of OP Units

Share-based compensation expense

Distribution to noncontrolling interests in consolidated real estate partnerships

Balances at June 30, 2021

Balances at March 31, 2022

Net income attributable to Aimco

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Net income attributable to common noncontrolling interests in Aimco Operating Partnership

Redemption of OP Units

Share-based compensation expense

Distribution to noncontrolling interests in consolidated real estate partnerships

Purchase of noncontrolling interests in consolidated real estate partnerships

Common stock repurchased

Balances at June 30, 2022

See notes to condensed consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Six Months Ended June 30, 2022 and 2021

(In thousands)

Noncontrolling

Retained Earnings (accumulated Deficit)

Balances at December 31, 2020

6 unchanged sentences

Other common stock issuances

Balances at March 31, 2021

Balances at June 30, 2021

Balances at December 31, 2021

Net income attributable to Aimco

Net loss attributable to noncontrolling interests in consolidated real estate partnerships

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Net income attributable to common noncontrolling interests in Aimco Operating Partnership

3 unchanged sentences

Contributions from noncontrolling interests in consolidated real estate partnerships

Purchase of noncontrolling interests in consolidated real estate partnerships

Common stock repurchased

1 unchanged sentence

Redemption of redeemable noncontrolling interests in consolidated real estate partnerships

Balances at March 31, 2022

Balances at June 30, 2022

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Unrealized gains on interest rate options

Income tax benefit

Income tax expense (benefit)

Amortization of debt issuance costs and other

Mezzanine investment, net

Realized gain on interest rate option

Loss on extinguishment of debt, net

Lease modification income

Gain on equity investment redemption

Gain on disposition of real estate

Share-based compensation

Changes in operating assets and operating liabilities:

Other assets, net

Net cash received from lease incentive

Accrued liabilities and other

4 unchanged sentences

Capital expenditures (1)

Proceeds from disposition of real estate

Investment in IQHQ

Investment in unconsolidated real estate partnerships

Other investing activities

Net cash used in investing activities

See notes to condensed consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In thousands)

Six Months Ended June 30,

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Proceeds from construction loans

Payments of deferred loan costs

Principal repayments on non-recourse property debt

Principal repayments on Notes Payable to AIR

Purchase of interest rate options

Payments on financing leases

Proceeds from interest rate option

Payments on finance leases

Payments of prepayment premiums

Common stock repurchased

Redemption of noncontrolling interest in real estate partnership

Distributions to noncontrolling interests in real estate partnerships

Contributions from noncontrolling interests in consolidated

2 unchanged sentences

real estate partnerships

Redemption of common and preferred OP units

Redemption of redeemable noncontrolling interests in consolidated

8 unchanged sentences

END OF PERIOD

(1) Capital expenditures net of accrued capital costs of $ 40.4 million and $ 16.1 million for the three months ended March 31, 2022 and 2021 , respectively.

(1) Accrued capital expenditures were $ 29.1 mill ion a nd $ 18.7 millio n as of June 30, 2022 and 2021 , respectively.

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

March 31, 2022

June 30, 2022

December 31, 2021

8 unchanged sentences

Right-of-use lease assets

Receivable from lease termination

Other assets, net

22 unchanged sentences

(In thousands, except per unit data)

Three Months Ended March 31,

Three Months Ended

Six Months Ended

Rental and other property revenues

6 unchanged sentences

Mezzanine investment income, net

Unrealized gains on interest rate options

Other expense, net

Income before income tax benefit

Income tax benefit

Realized and unrealized gains (losses) on interest rate options

Realized and unrealized gains (losses) on equity investments

Gains on dispositions of real estate

Lease modification income

Other (expense) income, net

Income (loss) before income tax benefit

Income tax (expense) benefit

Net income (loss)

Net (income) loss attributable to redeemable noncontrolling

interests in consolidated real estate partnerships

Net loss (income) attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

in consolidated real estate partnerships

Net income attributable to the Aimco Operating

Net income (loss) attributable to Aimco Operating

Partnership per common unit –

basic (Note 6)

Net income attributable to the Aimco Operating

Net income (loss) attributable to Aimco Operating

Partnership per common unit –

5 unchanged sentences

CONDENSED CONSOLIDATED STATE MENTS OF PARTNERS’

For the Three Months Ended March 31, 2022 and 2021

For the three months ended June 30, 2022 and 2021

(In thousands)

8 unchanged sentences

Partners’

Balances at March 31, 2021

Net loss attributable to Aimco Operating Partnership

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Redemption of OP Units

Share-based compensation expense

Distribution to noncontrolling interests in consolidated real estate partnerships

Balances at June 30, 2021

Balances at March 31, 2022

Net income attributable to Aimco Operating Partnership

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Redemption of OP Units

Share-based compensation expense

Distribution to noncontrolling interests in consolidated real estate partnerships

Purchase of noncontrolling interests in consolidated real estate partnerships

Repurchases of OP Units held by Aimco

Balances at June 30, 2022

See notes to condensed consolidated financial statements.

AIMCO OP L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’

For the six months ended June 30, 2022 and 2021

(In thousands)

General Partner

Limited Partner

Partners’

Attributable to

Aimco Operating

Noncontrolling

in Consolidated Real

Estate Partnerships

Partners’

Balances at December 31, 2020

2 unchanged sentences

Redemption of OP Units

Other common stock issuances

Share-based compensation expense

Distribution to noncontrolling interests in consolidated real estate partnerships

Balances at March 31, 2021

Balances at June 30, 2021

Balances at December 31, 2021

Net income attributable to Aimco Operating Partnership

Net loss attributable to noncontrolling interests in consolidated real estate partnerships

Net income attributable to noncontrolling interests in consolidated real estate partnerships

Redemption of OP Units

2 unchanged sentences

Contributions from noncontrolling interests in consolidated real estate partnerships

Purchase of noncontrolling interests in consolidated real estate partnerships

Repurchases of OP Units held by Aimco

1 unchanged sentence

Redemption of redeemable noncontrolling interests in consolidated real estate partnerships

Balances at March 31, 2022

Balances at June 30, 2022

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Unrealized gains on interest rate options

Income tax benefit

Income tax expense (benefit)

Amortization of debt issuance costs and other

Mezzanine investment, net

Realized gain on interest rate option

Loss on extinguishment of debt, net

Lease modification income

Gain on equity investment redemption

Gain on disposition of real estate

Share-based compensation

Changes in operating assets and operating liabilities:

Other assets, net

Net cash received from lease incentive

Accrued liabilities and other

4 unchanged sentences

Capital expenditures (1)

Proceeds from disposition of real estate

Investment in IQHQ

Investment in unconsolidated real estate partnerships

Other investing activities

Net cash used in investing activities

See notes to condensed consolidated financial statements.

AIMCO OP L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In thousands)

Six Months Ended June 30,

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Proceeds from construction loans

Payments of deferred loan costs

Principal repayments on non-recourse property debt

Principal repayments on Notes Payable to AIR

Purchase of interest rate options

Payments on financing leases

Common stock repurchased

Proceeds from interest rate option

Payments on finance leases

Payments of prepayment premiums

Redemption of OP Units

Redemption of noncontrolling interest in real estate partnership

Distributions to noncontrolling interests in real estate partnerships

Contributions from noncontrolling interests in consolidated

2 unchanged sentences

real estate partnerships

Redemption of common and preferred OP units

Redemption of redeemable noncontrolling interests in consolidated

8 unchanged sentences

END OF PERIOD

(1) Capital expenditures net of accrued capital costs of $ 40.4 million and $1 6.1 million for the three months ended March 31, 2022 and 2021 , respectively.

See notes to condensed consolidated financial statements.

(1) Accrued capital expenditures were $ 29.1 mill ion a nd $ 18.7 million as of June 30, 2022 and 2021 , respectively.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

1 unchanged sentence

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Note 1 —

9 unchanged sentences

Events noted in this filing as occurring before December 15, 2020, were those entered into by Aimco Predecessor.

As of March 31, 2022, Aimco owned 92.6 % of the legal interest in the common partnership units of Aimco Operating Partnership and 95.0 % of the economic interest in Aimco Operating Partnership.

As of June 30, 2022, Aimco owned 92.6 % of the legal interest in the common partnership units of Aimco Operating Partnership and 95.0 % of the economic interest in Aimco Operating Partnership.

The remaining 7.4 % legal interest is owned by limited partners.

5 unchanged sentences

one commercial office building that is part of a land assemblage;

three residential apartment communities, with 1,331 planned apartment homes, a single family rental community with 16 planned homes plus eight accessory dwelling units, and one hotel, with 106 planned rooms, we are actively developing or redeveloping;

two residential apartment communities, with 965 planned apartment homes, a single family rental community with 16 planned homes plus eight accessory dwelling units, and one hotel, with 106 planned rooms, we are actively developing or redeveloping;

land parcels held for development;

and three residential apartment communities with 499 apartment homes for which we have completed the redevelopment, but have not achieved stabilization.

Our real estate portfolio also includes one land parcel held for sale and an unconsolidated investment in land held for development.

In addition, we hold other opportunistic and alternative investments, including our Mezzanine Investment (as defined and described in Note 2 below);

our IQHQ investment (as defined and described in Note 3 below);

and four residential apartment communities with 865 a partment homes for which we have completed the redevelopment, but have not achieved stabilization.

Our real estate portfolio also includes one land parcel held for sale and two unconsolidated investments in land held for development.

In addition, we hold other opportunistic and alternative investments, including our Mezzanine Investment (see Note 2 for further information);

our IQHQ investment (see Note 3 for further information );

and our investment in real estate technology funds.

3 unchanged sentences

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U.S.

("GAAP") have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading.

In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Operating results for the three and six months ended June 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The Condensed Consolidated Balance Sheets of Aimco and Aimco Operating Partnership as of December 31, 2021 have been derived from their respective audited financial statements at that date, but do not include all of the information and disclosures required by GAAP for complete financial statements.

17 unchanged sentences

Redeemable Noncontrolling Interests in Consolidated Real Estate Partnerships

Redeemable noncontrolling interests consists of equity interests held by a limited partner in a consolidated real estate partnership that has a finite life.

During the first quarter of 2022, we acquired all the outstanding redeemable noncontrolling interests in two consolidated properties for $ 5.1 million.

Redeemable noncontrolling interests consists of equity int erests held by a limited partner in a consolidated real estate partnership that has a finite life.

During the quarter ended March 31, 2022, we acquired all the outstanding redeemable noncontrolling interests in two consolidated properties for $ 5.1 million.

At the time of redemption, the carrying amount of the redeemable non-controlling interests was $ 4.9 million.

Prior to our acquisition during the first quarter of 2022, we attributed to noncontrolling interests their share of income or loss of consolidated partnerships based on their proportionate interest in the results of operations of the partnerships, including their share of losses.

Redeemable noncontrolling interests in consolidated real estate partnerships as of March 31, 2022, consists of our institutional partner’s equity interest in our Upton Joint Venture, which provides our partner with an accruing 9.7 % rate of return on their investment.

Prior to our acquisition in the first quarter of 2022, we attributed to noncontrolling interests their share of income or loss of consolidated partnerships based on their proportionate interest in the results of operations of the partnerships, including their share of losses.

Redee mable noncontrolling interests in consolidated real estate partnerships as of June 30, 2022 consists of our institutional partner’s equity interest in our Upton Joint Venture, which provides our partner with an accruing 9.7 % r ate of return on their investment.

If a consolidated real estate partnership includes redemption rights that are not within our control, the noncontrolling interest is included as temporary equity.

2 unchanged sentences

creditors do not have recourse to the general credit of Aimco Operating Partnership.

The following table presents a reconciliation of our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2021 to March 31, 2022 (in thousands):

The following table presents a rollforward of our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2021 to June 30, 2022 (in thousands):

Balance at December 31, 2021

Capital contributions

Balance at March 31, 2022

Balance at June 30, 2022

Mezzanine Investment

1 unchanged sentence

located in southwest San Francisco (the “Mezzanine Investment”).

The loan bears interest at a 10 %

annual rate, accruing if not paid from property operations.

The loan bears interest at a 10 % annual rate, accruing if not paid from property operations.

Ownership of the subsidiaries that originated and hold the mezzanine loan was retained by AIR following the Separation.

The Separation Agreement provides for AIR to transfer ownership of the subsidiaries that originated and hold the mezzanine loan, a related equity option to acquire a 30 % interest in the partnership owning Parkmerced Apartments and the interest rate option, or swaption, that provides partial protection against future refinancing risk through 2024 to Aimco once required third-party consents are received.

The Separation Agreement provides for AIR to transfer ownership of the subsidiaries that originated and hold the mezzanine loan, a related equity option to acquire a 30 % interest in the partnership owning Parkmerced Apartments and the interest rate option, or swaption, that provides partial protection against future refinancing risk to Aimco through 2024 once required third-party consents are received .

At the time of the Separation and as of the date of this filing, legal title of these subsidiaries had not yet transferred to Aimco.

6 unchanged sentences

Income Tax Benefit

Certain of our operations, including our Development and Redevelopment activities, are conducted through taxable REIT subsidiaries, or TRS entities.

Certain aspects of our operations, including our Development and Redevelopment activities, are conducted through taxable REIT subsidiaries, or TRS entities.

Additionally, our TRS entities hold investments in one of our apartment communities and 1001 Brickell Bay Drive.

2 unchanged sentences

Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and gains retained by the REIT.

For the three months ended March 31, 2022 and 2021, we had consolidated net losses subject to tax of $ 14.8 million and $ 9.5 million, respectively.

For the three months ended March 31, 2022 , we recognized income tax benefit of $ 4.1 million, compared to $ 5.1 million during the same period ended 2021.

The change is primarily due to an income tax benefit in 2021 of $ 2.7 million associated with internal restructuring costs and changes to our effective state tax rate, partially offset by higher GAAP losses at our TRS entities in 2022 .

For the three and six months ended June 30, 2022 , we had consolidated net income subject to tax of $ 181.4 million and $ 166.6 million, respectively.

For the three and six months ended June 30, 2021 , we had consolidated net losses subject to tax of $ 9.0 million and $ 18.5 million, respectively.

For the three months ended June 30, 2022, we recognized income tax expense of $ 46.0 million compared to a $ 2.8 million benefit during the same period in 2021.

The change is primarily due to the GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022.

For the six months ended June 30, 2022, we recognized income tax expense of $ 41.9 million compared to a $ 7.9 million benefit during the same period in 2021 .

The change is primarily due to the GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022.

Use of Estimates

9 unchanged sentences

Other assets were comprised of the following amounts (in thousands):

March 31, 2022

June 30, 2022

December 31, 2021

Other investments

Assets held for sale (1)

Notes receivable

Prepaid expenses and real estate taxes

Unconsolidated real estate partnerships

Prepaid expenses and real estate taxes

Deferred costs, deposits, and other

Assets held for sale

Deferred tax assets

Corporate fixed assets

Due from affiliates

Accounts receivable, net of allowances of $ 1,269 and $ 1,285 as of March 31, 2022 and December 31, 2021, respectively

Accounts receivable, net of allowances of $ 1,397 and $ 1,285 as of June 30, 2022 and December 31, 2021, respectively

Intangible assets, net

Due from affiliates

Deferred tax assets

Total other assets, net

Assets held for sale primarily includes a land parcel acquired in the first quarter of 2022 that is described further in Note 3.

(1) In addition to the property we sold during the period, from time to time we may market to sell certain properties that are inconsistent with our long-term investment strategy.

At the end of each reporting period, we evaluate whether such properties meet the criteria to be classified as held for sale.

As of June 30, 2022 , assets held for sale include one land parcel in Fort Lauderdale, Florida and two properties located in the Seattle, Washington area.

Accounting Pronouncements Adopted in the Current Year

During the first quarter of 2022, we adopted ASU 2021-05 establishing Topic 842, Lessors - Certain Leases with Variable Lease Payments in conjunction with our ongoing operations.

ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss, which was effective for us on January 1, 2022.

During the quarter ended March 31, 2022, we adopted ASU 2021-05 establishing Topic 842, Lessors - Certain Leases with Variable Lease Payments in conjunction with our ongoing operations.

ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct finance lease classification would trigger a day-one loss, which was effective for us on January 1, 2022.

The adoption of this standard on January 1, 2022 , did not have a material impact on our condensed consolidated financial statements .

12 unchanged sentences

Acquisitions and Investments

During the first quarter of 2022:

Aimco’s Fort Lauderdale consolidated joint venture closed on the previously announced acquisition of three undeveloped land parcels located in downtown Fort Lauderdale for $ 49.0 million ($ 25.0 million at Aimco's 51 % share), funded primarily by a $ 40.0 million land loan ($ 20.4 million at Aimco's share).

The $ 49.0 million purchase price was allocated among the parcels based on third party appraisals.

At the time of the acquisition, one land parcel was subject to a sales agreement for disposition and closing on or before October 9, 2022.

Based on the facts and circumstances related to the sale, Aimco determined the land parcel meets the criteria for assets held for sale as of March 31, 2022.

Assets held for sale are reported at the carrying value of $ 10.1 million and included within Other assets, net in our condensed consolidated balance sheets.

Liabilities related to assets held for sale of $ 8.0 million are included in Accrued liabilities and other in our condensed consolidated balance sheets.

Aimco entered into a purchase agreement to acquire, for $ 100.0 million, a 9 -acre development site in Fort Lauderdale.

The site is located in the Flagler Village neighborhood with the ability to develop approximately three million square feet of mixed-use development, over time.

Due to certain transaction stipulations predefined in the purchase agreement, we reserved funds for the transaction by placing $ 70.0 million of cash , of which $ 20.0 million is held in escrow in the seller’s name, while $ 50.0 million is held in escrow in our name and included within restricted cash on the balance sheet at March 31, 2022.

Additionally, $ 30.0 million in letters of credit is held in escrow.

See Note 4 for information regarding commitments related to this pending acquisition.

Timing of the transaction closing is uncertain but the purchase agreement provides that it shall occur not later than February 24, 2025.

Concurrent with entering into the purchase agreement, Aimco entered into a short-term cancelable lease with the seller to obtain development rights of the 9-acre development site.

Together, the two contracts are treated as one financing lease as title transfers at the end of the lease arrangement.

Refer to Note 9 for details regarding the finance lease.

During the first quarter of 2022, Aimco funded the remaining $ 14.2 million of a total commitment of a $ 50.0 million passive equity investment in IQHQ Inc., a privately held life sciences real estate development company.

During the quarter ended March 31, 2022, we entered into a short-term cancellable lease of and a purchase agreement to acquire, for $ 100.0 million, a nine -acre development site in the Flagler Village neighborhood of Fort Lauderdale, Florida.

The site has the potential for the development of approximately three million square feet of mixed-use property, which could contain up to 1,500 residential units at full build-out.

On June 2, 2022, we finalized the purchase of part of the site for $ 64.0 million.

Subsequent to the closing, there was $ 7.2 million remaining in escrow in the seller's name and $ 28.8

million in letters of credit held in escrow as reserved funds for the transaction.

During the quarter ended June 30, 2022, we capitalized $ 2.8 million in fees as Land along with the closing.

See Note 9 for further information.

During the quarter ended March 31, 2022, o ur Fort Lauderdale consolidated joint venture closed on the acquisition of three undeveloped land parcels located in downtown Fort Lauderdale for $ 49.0 million ($ 25.0 million at Aimco's 51 % share), funded primarily by a $ 40.0 million land loan ($ 20.4 million at Aimco's share).

The cost was allocated among the parcels based on third-party appraisals.

At the time of acquisition, one land parcel was subject to a sales agreement with closing expected on or before October 9, 2022.

Based on the facts and circumstances related to the sale, we determined the land parcel met the criteria for classification as assets held for sale as of June 30, 2022.

These assets are reported at a carrying value of $ 11.7 million, and are included within Other assets, net in our Condensed Consolidated Balance Sheets .

Liabilities related to these assets held for sale of $ 8.0 million are included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets .

During the quarter ended March 31, 2022, we funded the remaining $ 14.2 million of a total $ 50.0 million commitment of a passive equity investment in IQHQ Inc.

(IQHQ), a privately held life sciences real estate development company.

Based on certain facts and circumstances related to the investment, IQHQ was initially reported at cost.

During the quarter ended June 30, 2022, 22 % of our original investment with a cost basis of $ 10.8 million was redeemed for $ 16.5 million.

The redemption cash was received after quarter end.

Consequently, we recognized a $ 5.7 million gain from this redemption in our Consolidated Statements of Operations for the three and six months ended June 30, 2022, and a $ 16.5 million receivable in our Condensed Consolidated Balance Sheets as of June 30, 2022.

Further, our remaining investment in IQHQ with a cost basis of $ 39.2 million was valued at an estimated fair market value of $ 59.7 million, and a $ 20.5 million unrealized gain was recognized for the quarter ended June 30, 2022.

Joint Venture Transaction

During the first quarter of 2022, Aimco formed a joint venture for the construction of approximately one million square feet of mixed-use development in the Edgewater neighborhood of Miami, Florida.

Aimco has a 20 % share of the joint venture, which includes the initial contribution of an eighth of an acre of land that we purchased for $ 1.7 million in January 2022.

Aimco's total capital commitment to the venture is $ 8.0 million.

Aimco will serve as the development manager for the venture and expects to begin construction in 2023.

In May 2022, we formed two joint ventures for a ground-up project that entails the construction of 574 residential homes and 20,000 square feet of mixed-use retail and cultural space in Bethesda, Maryland.

Aimco holds a 50 % share of the joint ventures (the “DC joint ventures”), with a maximum total capital commitment of $ 18.0 million, of which $ 12.0 million has been funded as of June 30, 2022.

We serve as co-development manager for these ventures, which are expected to begin construction in late 2023.

In March 2022, we formed a joint venture for the construction of approximately one million square feet of mixed-use development in the Edgewater neighborhood of Miami, Florida.

Aimco holds a 20 % share of the joint venture ( the “Edgewater joint venture" ), which includes our initial contribution of an eighth of an acre of land that we purchased for $ 1.7 million in January 2022.

Our total capital commitment for this venture i s $ 8.0 million.

We will serve as the development manager for this venture, which is expected to begin construction in 2023.

In April 2022, we closed on the sale of our Pathfinder Village property located in Fremont, California, for a gross sales price of $ 127.0 million and recognized a gain from the sale of $ 94.6 million.

Pathfinder Village was a stabilized property previously reported within our Operating segment.

Lease Arrangements

In June 2022, we as lessee and AIR as lessor, entered into a lease termination agreement pursuant to which AIR is required to pay us a termination payment on September 1, 2022, and upon receipt of such payment, the existing leases with respect to four properties will terminate.

See Note 9 for further information .

Note 4 —

Commitments and Contingencies

In connection with our development, redevelopment, and other capital additions activities, we have entered into various construction-related contracts and we have made commitments to complete development and redevelopment of certain real estate, pursuant to financing or other arrangements.

As of March 31, 2022 , our commitments related to these capital activities totaled approximately $ 217.9 million, most of which we expect to incur during the next 24 months.

As described in Note 3, Aimco is under contract to acquire, for $ 100.0 million, a nine -acre development site in Fort Lauderdale.

Aimco reserved funds for the transaction by placing $ 70.0 million of cash, of which $ 20.0 million is held in escrow in the seller's name and $ 50.0 million is held in escrow in Aimco's name.

Timing of the closing and the funding of the remaining $ 30.0 million commitment is uncertain, but the purchase agreement provides that the transaction closing shall occur not later than February 24, 2025.

Also as described in Note 3, we have a commitment to fund a total of $ 8.0 million associated with our Edgewater joint venture formed in the first quarter of 2022.

As of March 31, 2022 , our remaining commitment is $ 6.0 million, all of which we expect to incur over the next twelve months.

As of March 31, 2022 , we also have unfunded commitments in the amount of $ 3.2 million related to four investments in privately held entities that develop technology related to the real estate industry, the timing of which is uncertain.

In connection with our development, redevelopment, and other capital additions activities, we have entered into various construction-related contracts, and have made commitments to complete development and redevelopment of certain real estate, pursuant to financing or other arrangements.

As of June 30, 2022, our commitments related to these capital activities totaled approxima tely $ 188.4 million, most of which we expect to incur during the next 24 months.

As described in Note 3 , we are under contract to acquire, for $ 36.0 million, the two remaining land parcels of a nine -acre development site in Fort Lauderdale.

As of June 30, 2022, we reserved $ 7.2 million which was held in escrow in the seller’s name.

As of June 30, 2022, our remaining commitment is $ 28.8 million, which we expect to incur over the next twelve months.

As described in Note 3 , we have a commitment to fun d a total of $ 26.0 million for our Edgewater joint venture and DC joint ventures formed during 2022.

As of June 30, 2022 , our remaining commitments are $ 12.0 million, which we expect to incur over the next twelve months.

As of June 30, 2022, we have unfunded commitments in the amoun t of $ 2.9 m illion related to four investments in privately held entities that develop technology related to the real estate industry.

The timing of these funding commitments is uncertain.

We enter into certain commitments for future purchases of goods and services in connection with the operations of our apartment communities.

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Master Services Agreement

We and AIR entered into a Master Services Agreement in which AIR will provide us with customary administrative and support services.

We are obligated to pay AIR the fully burdened costs in performing the services.

We entered into a Master Services Agreement with AIR whereby AIR provides us with customary administrative and support services.

We are obligated to pay AIR the fully burdened costs in performing those services.

We may terminate any or all services on 60 days’

prior written notice, and AIR may terminate individual services at any time after December 31, 2023.

During the three months ended March 31, 2022 and 2021 we incurred administrative and support fees o f $ 0.4 million, for both periods, which are included in general and administrative expenses in our condensed consolidated statements of operations.

During the three and six months ended June 30, 2022, we incurred administrative and supp ort fees of $ 0.5 million and $ 0.9 million, respectively, compared to $ 0.4 million and $ 0.8 million during the three and six months ended June 30, 2021, respectively.

These administrative support fees are included in General and administrative expenses in our Condensed Consolidated Statements of Operations .

Property Management Agreements

We entered into several Property Management Agreements with AIR, pursuant to which AIR provides us with certain property management, property accounting and related services for the majority of our operating properties, and we pay AIR a property management fee equal to 3 % of each respective property’s revenue collected and such other fees as may be mutually agreed upon for various other services.

We have entered into several Property Management Agreements with AIR, pursuant to which AIR provides us with certain property management, property accounting and related services for the majority of our operating properties.

We pay AIR a property management fee for these services equal to 3 % of each respective property’s revenue collected and such other fees as may be mutually agreed upon for various other services.

The initial term of each Property Management Agreement is one year, with automatic one-year renewal periods, unless either party elects to terminate upon delivery of 60 days’

prior written notice to the other party before the end of the term.

prior written notice to

the other party before the end of the term.

Neither party is obligated to pay to the other party a termination fee or other penalty upon such termination.

During the three months ended March 31, 2022 and 2021, we recognized property management and property accounting fe es of $ 1.4 mill ion and $ 1.3 million, respectively, which we included in property operating expenses in our condensed consolidated statements of operations.

During the three and six months ended June 30, 2022, we recognized property management and property accounting fe es of $ 1.5 mill ion and $ 2.9 million, respectively, compared to $ 1.3 million and $ 2.6 million during the three and six months ended June 30, 2021, respectively.

These property management and property accounting fees are included in Property operating expenses in our Condensed Consolidated Statements of Operations .

Master Leasing Agreement

The Master Leasing Agreement governs the current and any future leasing arrangements between us, as lessee and AIR, as lessor.

The initial term of the Master Leasing Agreement is 18 months (expiring on or about June 14, 2022), with automatic annual extensions (subject to each party’s right to terminate upon notice prior to the end of any such extension term).

The Master Leasing Agreement provides that each time the parties thereto wish to execute a lease for a particular property, such parties will cause their applicable affiliates to execute a stand-alone lease.

The initial annual rent for any leased property is based on the then-current fair market value of the subject property and market NOI cap rates, subject to certain adjustments, and is further subject to periodic escalation as set forth in the applicable lease, and the other terms thereof, including the initial term and extensions.

We have the right to terminate any such lease prior to the end of its term once the leased property is stabilized.

In connection with such an early termination, AIR will generally have an option (and not an obligation) to pay us an amount equal to the difference between the property’s fair value at stabilization and the initial value of the leasehold interest, at a five percent discount thereto;

if AIR does not exercise such option, we will have the right to cause such property to be sold to a third party, with AIR guaranteed to receive an amount equal to the difference between the property’s fair market value at stabilization and the initial value of the leasehold interest and we will retain any excess proceeds.

In the event of such sale of the property, we may also elect to purchase the property at a purchase price equal to the fair market value as agreed upon at the time of lease inception (and may subsequently sell the property to a third party, subject to AIR’s right of first refusal during the first year following our acquisition).

If AIR elects not to pay the fee for the development or redevelopment-related improvements, and we decline to purchase the property or cause its sale to a third party, we may elect to rescind our termination of the applicable lease and instead continue such lease in effect in accordance with its terms.

Refer to Note 9 for additional information on leases in place as of March 31, 2022.

The Master Leasing Agreement, as amended on June 14, 2022, governs the current and any future leasing arrangements between us, as lessee, and AIR, as lessor.

Under the amendments to the Master Leasing Agreement, AIR's purchase option to acquire completed development and redevelopment properties was replaced with a right of first offer on development and redevelopment assets that have achieved stabilization after our acquisition of the asset and that we choose to bring to market within one year following stabilization.

Additionally, it provides that each time the parties thereto wish to execute a new lease for a particular property, such parties will cause their applicable affiliates to execute a stand-alone lease.

See Note 9 for further information.

Notes Payable to AIR

On December 14, 2020, we entered into $ 534.1 million of Notes Payable to AIR that are secured by a pledge of the equity interest in the entity that holds a portfolio of assets.

In addition, the assets secure certain existing senior loans of $ 241.8 million as of March 31, 2022 .

The notes mature on January 31, 2024 and bear interest at 5.2 %, with accrued interest payable on the first calendar day of each quarter.

For the three months ended March 31, 2022 and 2021, we recognized interest expense related to the Notes Payable to AIR of $ 6.9 mil lion for both periods.

In June 2022, we entered into an agreement providing for early repayment of the Notes Payable to AIR relative to the original maturity date of such notes.

The notes bore interest at 5.2 % with accrued interest payable on the first calendar day of each quarter.

For the three and six months ended June 30, 2022 , we recognized interest expense related to the Notes Payable to AIR of $ 6.4 million and $ 13.3 million, respectively, compared to $ 6.9 million and $ 13.9 million during the three and six months ended June 30, 2021, respectively.

Additionally, d uring the quarter ended June 30, 2022, we made a principal payment of $ 387.1 million, and recognized $ 17.9 million of associated spread maintenance costs, $ 12.9 million of which were paid as of June 30, 2022.

In July 2022, we made the remaining principal and spread maintenance payments.

In June 2022, for $ 7.2 million, we acquired from AIR the common noncontrolling interest in the entity that indirectly holds a portfolio of assets that secured the Notes Payable to AIR.

Due to and from AIR

As of March 31, 2022, we have amounts due to and from AIR of $ 11.1 million and $ 3.7 million , respectively.

As of June 30, 2022, we have amounts due to and from AIR of $ 16.2 million and $ 1.1 million, respectively.

As of December 31, 2021 we had amounts due to and from AIR of $ 15.7 million and $ 4.8 million, respectively.

The amounts due to AIR primarily consist of invoices paid on our behalf and accrued interest on the Notes Payable to AIR.

The amounts due to AIR primarily consist of invoices paid on our behalf and accrued interest on our Notes Payable to AIR.

The amounts due from AIR primarily consist of net cash flows generated by our operating properties.

Terry Considine Service Agreement/AIR Reimbursement

As contemplated by the Separation and by Aimco and AIR, Terry Considine, an Aimco board member and our former Chief Executive Officer, has specific responsibilities to Aimco as a non-executive employee during 2022 to support the establishment and growth of the Aimco business, reporting directly to the board.

As contemplated by the Separation and by Aimco and AIR, Terry Considine, an Aimco board member and our former Chief Executive Officer, has specific responsibilities to us as a non-executive employee during 2022 to support the establishment and growth of our business, reporting directly to our board of directors (the "Board").

These responsibilities, separate from Mr.

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and (iii) advice and consultation with respect to strategic growth and acquisition activities.

The Independent Directors set Mr.

The independent directors of the Board set Mr.

Considine’s 2022 target total compensation (including base compensation, short-term incentive, and long-term incentive) for these responsibilities at $ 1.8 million, to be paid in equity.

Considine does not receive any additional compensation for serving on the Board.

Additionally, Aimco is obligated for all base salary, short-term incentive amounts and long-term incentive amounts payable to Mr.

Additionally, we are obligated for all base salary, short-term incentive amounts and long-term incentive amounts payable to Mr.

Considine for the calendar year 2022 under the terms of his employment agreement with AIR that are in excess of $ 1.0 million, collectively.

We estimate the total 2022 reimbursement to AIR, pursuant to this arrangement, will be $ 4.0 million.

We estimate compensation associated with these arrangements to total $ 5.8 million for 2022.

For the three months ended March 31, 2022 and 2021, we recognized $ 1.4 million and $ 1.5 million of expense related to the arrangements, respectively, which amounts are included in general and administrative expense in our condensed consolidated statements of operations.

As of June 30, 2022, we estimate the total 2022 reimbursement to AIR, pursuant to this arrangement, will be $ 4.0 m illion.

We estimate compensation associated with these arrangements to tota l $ 5.8 million for 2022.

For the three and six months ended June 30, 2022, we recognized $ 1.5 million and $ 2.9 million of expense related to the arrangements, respectively, compared to $ 1.5 million and $ 2.9 million during the three and six months ended June 30, 2021, respectively.

This expense is included in General and administrative expenses in our Condensed Consolidated Statements of Operations .

Note 6 —

Earnings and Dividends per Share and Unit

Earnings and Dividends per Share and per Unit

Aimco and Aimco Operating Partnership calculate basic earnings per share of common stock and basic earnings per common unit based on the weighted-average number of shares of common stock and common partnership units outstanding.

We calculate diluted earnings per share of common stock and diluted earnings per unit taking into consideration dilutive shares of common stock and common partnership unit equivalents and dilutive convertible securities outstanding during the period.

We calculate diluted earnings per share of common stock and diluted earnings per common unit taking into consideration dilutive shares of common stock and common partnership unit equivalents and dilutive convertible securities outstanding during the period.

Each of our executives and AIR’s executives received one share of Aimco stock and one share of AIR stock at the Separation date for unvested shares.

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We include the effect of participating securities in basic and diluted earnings per share and unit computations using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method.

Participating securities are included in the computation of diluted earnings per share for the three months ended March 31, 2022 and 2021, because their effects are dilutive.

Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings per share and per unit for the three months ended March 31, 2022 and 2021, are as follows (in thousands, except per share and per unit data):

Three Months Ended March 31,

Participating securities are included in the computation of diluted earnings per share for the three and six months ended June 30, 2022 and 2021, because their effects are dilutive.

Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings per share and per unit for the three and six months ended June 30, 2022 and 2021, are as follows (in thousands, except per share and per unit data):

Three Months Ended June 30,

Six Months Ended June 30,

Earnings per share

Net income attributable to Aimco

Net income (loss) attributable to Aimco

Net income allocated to Aimco participating securities

Net income attributable to Aimco common stockholders

Net income (loss) attributable to Aimco common stockholders

Denominator - shares:

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Diluted weighted-average common stock outstanding

Earnings per share - basic

Earnings per share - diluted

Earnings (loss) per share - basic

Earnings (loss) per share - diluted

Earnings per unit

Net income attributable to Aimco Operating Partnership

Net income (loss) attributable to Aimco Operating Partnership

Net income allocated to Aimco Operating Partnership participating securities

Net income attributable to Aimco Operating Partnership's common unitholders

Net income (loss) attributable to Aimco Operating Partnership's common unitholders

Denominator - units

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Diluted weighted-average common partnership units outstanding

Earnings per unit - basic

Earnings per unit - diluted

Earnings (loss) per unit - basic

Earnings (loss) per unit - diluted

Note 7 —

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Alternatively, if interest rates were to decrease below the specified strike price, we would not receive a cash settlement, nor would we have any requirement to make a payment.

During the year ended December 31, 2021, we paid upfront a premium of $ 5.6 million (including transaction costs) for the option to enter into a $ 500.0 million notional amount interest rate swap at a future date.

This interest rate option, or swaption, provides partial protection against our refinancing interest rate risk relative to our Notes Payable to AIR and is intended to mitigate interest rate increases between now and January 2024.

We receive a cash settlement in the future if the prevailing interest rate is higher than the 3 % strike price on the five-year swap rate.

Alternatively, if interest rates were to decrease below the specified strike price, we would not receive a cash settlement, nor would we have any requirement to make a payment.

In 2021, we paid an upfront premium of $ 5.5 million for the option to enter into a $ 500.0 million notional amount interest rate swap at a future date.

During the six months ended June 30, 2022, w e monetized our $ 500.0 million notional amount swaption for $ 13.7 million, and recognized a gain of $ 8.0 m illion, net of transaction costs.

From time to time we purchase interest rate swaps, caps, and other instruments to provide protection against increases in interest rates on our floating rate debt.

The fair value of these instruments are included in the fair value table below.

We measure at fair value on a recurring basis our interest rate options, which are presented in other assets in our condensed consolidated balance sheets.

The fair value of these instruments are noted in the table below.

On a recurring basis, we measure at fair value our interest rate options, which are presented in Other assets, net in our Condensed Consolidated Balance Sheets .

Our interest rate options are classified within Level 2 of the GAAP fair value hierarchy, and we estimate their fair value using pricing models that rely on observable market information, including contractual terms, market prices, and interest rate yield curves.

The fair value adjustment is included in earnings in Unrealized gains on interest rate options in our Condensed Consolidated Statements of Operations .

Changes in fair value are reflected as a non-cash transaction in adjustments to arrive at cash flows from operations, and the upfront premium is reflected in purchase of interest rate option in our condensed consolidated statements of cash flows.

We have investments of $ 5.1 million in property technology funds consisting of privately held entities that develop technology related to the real estate industry.

Changes in fair value are reflected as a non-cash transaction in adjustments to arrive at cash flows from operations, and any upfront premium is reflected in Purchase of interest rate options in our Condensed Consolidated Statements of Cash Flows .

As of June 30, 2022, we have investments of $ 5.9 million in property technology funds consisting of entities that develop technology related to the real estate industry.

These investments are measured at net asset value (“NAV”) as a practical expedient.

Refer to Note 4 for further details of unfunded commitments.

The following table summarizes fair value for our interest rate options and our investments in real estate technology funds as of March 31, 2022, and December 31, 2021, (in thousands):

As of March 31, 2022

See Note 4 for further information.

The following table summarizes fair value for our interest rate options and our investments in real estate technology funds as of June 30, 2022, and December 31, 2021, (in thousands):

As of June 30, 2022

As of December 31, 2021

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(1) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.

Nonrecurring Fair Value Measurements

As of June 30, 2022, assets measured at fair value on a nonrecurring basis in our Condensed Consolidated Balance Sheets consisted of our investment in IQHQ.

IQHQ was initially reported at cost.

During the quarter ended June 30, 2022, 22 % of our original investment with a cost basis of $ 10.8 million was redeemed for $ 16.5 million .

As a result, our remaining shares in IQHQ after the partial redemption were re-valued on a stepped up basis to fair value at the same per share value as the cash redemption per share value.

These observable inputs are classified as Level 1 within the GAAP fair value hierarchy.

As of June 30, 2022, the fair value of our investment in IQHQ measured on a nonrecurring basis was $ 59.7 million.

Fair Value Disclosures

We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable and payables approximated their fair value as of March 31, 2022, and December 31, 2021, due to their relatively short-term nature and high probability of realization.

We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable and payables approximated their fair value as of June 30, 2022, and December 31, 2021, due to their relatively short-term nature and high probability of realization.

We estimate the fair value of our non-recourse property debt, construction loans, and Notes Payable to AIR using an income and market approach, including comparison of the contractual terms to observable and unobservable inputs such as market interest rate risk spreads, contractual interest rates, remaining periods to maturity, debt service coverage ratios, and loan to value ratios.

We classify the fair value of our non-recourse property debt and construction loans debt within Level 2 of the GAAP fair value hierarchy based on the significance of certain of the unobservable inputs used to estimate its fair value.

The carrying amount of the Notes Payable to AIR approximated their fair value at both March 31, 2022 and December 31, 2021.

The following table summarizes the carrying value and fair value of our non-recourse property debt and construction loans (in thousands):

As of March 31, 2022

December 31, 2021

We classify the fair value of our non-recourse property debt and construction loans within Level 2 of the GAAP fair value hierarchy based on the significance of certain of the unobservable inputs used to estimate their fair value.

The following table summarizes the carrying value and fair value of our non-recourse property debt, construction loans, and Notes Payable to AIR as of June 30, 2022, and December 31, 2021, (in thousands):

As of June 30, 2022

As of December 31, 2021

Carrying Value

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Construction loans

Notes Payable to AIR

Note 8 —

Variable Interest Entities

We evaluate our investments in limited partnerships and similar entities in accordance with the consolidation guidance to determine whether each such entity is a VIE.

The accounting standards related to the consolidation of VIEs require qualitative assessments to determine whether we are the primary beneficiary.

We evaluate our investments in limited partnerships and similar entities in accordance with applicable consolidation guidance to determine whether each such entity is a VIE.

The accounting standards for the consolidation of VIEs require qualitative assessments to determine whether we are the primary beneficiary.

The primary beneficiary analysis is based on power and economics.

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(i) the power to direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

Significant judgments and assumptions related to the determinations include, but are not limited to, estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.

Aimco consolidates Aimco Operating Partnership, a VIE of which Aimco is the primary beneficiary.

Significant judgments and assumptions related to these determinations include, but are not limited to, estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.

We consolidate Aimco Operating Partnership, a VIE of which Aimco is the primary beneficiary.

Aimco, through Aimco Operating Partnership, consolidates all VIEs for which it is the primary beneficiary.

Substantially all of the assets and liabilities of Aimco are that of Aimco Operating Partnership.

The VIEs that Aimco Operating Partnership consolidates own interests in real estate.

We are the primary beneficiary of the VIEs because we have the power to direct the activities that most significantly impact the entities’

economic performance and have a substantial economic interest.

We have seven unconsolidated VIEs for which we are not the primary beneficiary because we are not the decision maker.

The seven unconsolidated VIEs include four unconsolidated real estate partnerships that hold four apartment communities in San Diego, California, the Mezzanine Investment, our passive equity investment in IQHQ, and our investment in the Edgewater joint venture, formed in the first quarter of 2022 to develop a 2.8 -acre site in Miami's Edgewater neighborhood .

The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below (in thousands, except for VIE count):

March 31, 2022

Aimco Operating Partnership is the primary beneficiary, and therefore consolidates our eight VIEs that own interests in real estate.

In addition, we hav e nine unc onsolidated VIEs for which we are not the primary beneficiary because we are not their primary decision maker.

The nine unconsolidated VIEs include four unconsolidated real estate partnerships that hold four apartment communities in San Diego, California, the Mezzanine Investment, our passive equity investment in IQHQ, our investment in the Edgewater joint venture, and our investments in the DC joint ventures.

Details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of June 30, 2022, and December 31, 2021, (in thousands, except for VIE count):

June 30, 2022

December 31, 2021

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Right-of-use lease assets

Receivable from lease termination

Unconsolidated real estate partnerships

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Lease liabilities

During the three months ended March 31, 2022, Aimco acquired all of the outstanding redeemable non-controlling interests in an entity classified as a consolidated VIE as of December 31, 2021.

The changes in consolidated VIE assets and liabilities from December 31, 2021 to March 31, 2022 in the table above are primarily due to the impact of declassification of the entity as a VIE.

As of March 31, 2022, one of our consolidated VIEs had an outstanding construction loan.

Consolidated Real Estate Partnerships

As of June 30, 2022, we acquired all of the outstanding redeemable non-controlling interests in an entity reported as a consolidated VIE as of December 31, 2021.

The changes in consolidated VIE assets and liabilities from December 31, 2021 to June 30, 2022 in the table above are primarily due to the impact of:

(i) the declassification of the entity described above as a VIE;

(ii) the recognition of a receivable from lease termination of $ 186.3 million due to lease modifications;

and (iii) the derecognition of right-of-use lease assets and lease liabilities of $ 326.1 million and $ 337.3 million, respectively, due to the lease modifications described in Note 3.

As of June 30, 2022, one of our consolidated VIEs had an outstanding construction loan.

In conjunction with this loan, we made customary guarantees.

In certain situations, the lenders may have recourse to our general credit.

As of March 31, 2022, we estimate the maximum exposure equals the $ 129.6 million outstanding loan balance.

In certain situations, the loan's lenders may have recourse to our general credit.

As of June 30, 2022, we estimate our maximum exposure equals the $ 134.0 million outstanding loan balance.

Other consolidated VIEs' creditors do not have recourse to our general credit.

Unconsolidated Real Estate Partnerships

We own an interest in four apartment communities in San Diego, California of which we are not the primary beneficiary.

We also own a joint venture interest in a 2.8-acre development site in Miami’s Edgewater neighborhood.

Our investment balance of $ 15.1 million and $ 13.0 million as of March 31, 2022 and December 31, 2021, respectively, represents our maximum exposure to loss in these VIEs.

We own an interest in four unconsolidated real estate partnerships that hold four apartment communities in San Diego, California.

We also own investments in the Edgewater joint venture to develop a 2.8-acre site in Miami's Edgewater neighborhood, and the DC joint ventures to develop a groun d-up and mixed-use retail and cultural space in Bethesda, Maryland.

The joint ventures were formed during the six months ended June 30, 2022.

See Note 3 for further information.

Our investment balances of $ 27.1 million and $ 13.0 million as of June 30, 2022 and December 31, 2021, respectively, represented our maximum exposure to loss in these unconsolidated VIEs.

Mezzanine Investment

AIR owns an interest in a partnership that owns Parkmerced Apartments, of which it is not the primary beneficiary, and under the terms of the Separation Agreement, AIR is obligated to transfer ownership of the subsidiaries that hold this interest to us upon receipt of required third-party consents.

Our investment balance of $ 346.0 million and $ 337.8 million as of March 31, 2022 and December 31, 2021 , respectively, represents our indirect interest in notes receivable through our agreement with AIR and our maximum exposure to loss in this VIE.

Our investment balances of $ 354.4 million an d $ 337.8 million as of June 30, 2022 and December 31, 2021 , respectively, represent our indirect interest in notes receivable through our agreement with AIR and our maximum exposure to loss in this VIE.

Note 9 —

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We receive variable payments from our residents and commercial tenants primarily for utility reimbursements and other services.

For the three months ended March 31, 2022 and 2021 , our total lease income was comprised of the following amounts for all residential and commercial property leases (in thousands):

Three Months Ended March 31,

For the three and six months ended June 30, 2022 and 2021, our total lease income was comprised of the following amounts for all residential and commercial property leases (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Fixed lease income

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Lease Arrangements with AIR

We, as lessee, and AIR, as lessor, have entered into leases on five properties currently under construction or in lease-up.

The lease arrangements are governed by the Master Leasing Agreement described in Note 5 and are classified as financing leases.

We have provided AIR with residual value guarantees aggregating to $ 250.8 million, which provide that if the residual value of the leased assets is less than the specified residual value guarantees at the earlier of lease expiration or termination, we are required to pay the difference.

We, as lessee, and AIR, as lessor, have entered into leases on properties currently under construction or in lease-up.

These lease arrangements are governed by separate Master Lease Agreements and the Master Leasing Agreement.

In June 2022, we as lessee and AIR as lessor, entered into a lease termination agreement with respect to the four leases entered into on January 1, 2021.

This agreement terminates the four finance leases on September 1, 2022.

Upon termination, both parties shall be released of any and all liabilities and obligations under each respective lease other than those liabilities and obligations, if any, that expressly survive termination.

On September 1, 2022 we will relinquish control of the leasehold improvements on these four leased properties as well as the underlying land.

In exchange, AIR will transfer a total of $ 200.0 million in consideration to us as termination payments.

On June 28, 2022, AIR made a $ 10.0 million non-refundable termination deposit with the remaining $ 190.0 million to be paid by AIR on September 1, 2022, both termination payments are accounted for as lease incentives.

Based on the present value of the termination payments, net of remaining lease payments, we reduced the lease liability to zero and recorded a receivable from lease termination of $ 186.3 million in our Condensed Consolidated Balance Sheets at June 30, 2022.

Because the termination agreement modified the expiration date of each lease to September 1, 2022, we accelerated depreciation on the associated leasehold improvements using lease terms ending September 1, 2022.

We recorded $ 13.9 million of additional depreciation expense in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022.

The remaining $ 66.1 million of depreciation expense will be recognized in the third quarter.

In addition, we reduced the associated right-of-use lease assets to zero and recognized lease modification income of $ 205.4 million, which is included in our Condensed Consolidated Statements of Operations for the periods ended June 30, 2022.

Ground Leases

During the year ended December 31, 2020, we entered into two 99-year ground leases for the land underlying the development site at Upton Place, a mixed-use development project which will create 689 apartment homes and approximately 100,000 square feet of commercial space in upper-northwest Washington, D.C.

These ground leases are classified as financing leases.

We are lessee to two 99-year ground leases for the land underlying the development site at Upton Place, a mixed-use development project which will create 689 apartment homes and approximately 100,000 square feet of commercial space in upper-northwest Washington, D.C.

These ground leases are classified as finance leases.

Other Finance Lease Arrangements

As described in Note 3, during the quarter ended March 31, 2022 , we entered into certain financing lease arrangements concurrent with a contract to acquire a development site in Fort Lauderdale.

At lease inception, $ 20.0 million in deposits were placed in the seller’s name, which subsequently reduced the financing lease right-of-use liability.

The related interest is capitalized as part of the financing right-of-use asset.

As of March 31, 2022 , the associated financing right-of-use assets and liabilities totaled $ 97.3 million and $ 75.1 million, respectively.

Together, as of March 31, 2022 and December 31, 2021, these financing leases had weighted-average remaining terms of 33.2 years and 38.5 years, respectively, and weighted-average discount rates of 5.0 % and 5.4 %, respectively.

As of March 31, 2022 , financing r ight-of-use assets and liabilities totaled $ 522.9 and $ 509.2 , respectively.

As of December 31, 2021 , financing lease right-of-use assets and liabilitie s totaled $ 429.8 and $ 435.1 , r espectively.

For the three months ended March 31, 2022, amortization related to finance leases was $ 3.2 million, net of amounts capitalized and, for the three months ended March 31, 2021, was $ 2.1 million, also net of amounts capitalized.

For the three months ended March 31, 2022 and 2021, we capitalized $ 2.8 million and $ 6.9 million of lease costs, respectively, associated with active development and redevelopment projects on certain of the underlying property and ground lease assets.

As described in Note 3 , during the quarter ended March 31, 2022, we, as lessee, entered into certain finance lease arrangements concurrent with a contract to acquire a development site in Fort Lauderdale.

At lease inception, $ 20.0 million in deposits were placed in the seller’s name, which subsequently reduced the finance lease liability.

The related interest is capitalized as part of the finance right-of-use lease assets.

In June 2022, we purchased a part of the aforementioned development site in Fort Lauderdale for $ 64.0 million.

As a result of the purchase, we derecognized the associated right-of-use lease assets and lease liabilities, and recorded the difference to land .

As of June 30, 2022 , the remaining right-of-use lease assets and lease liabilities associated with the other parts totaled $ 34.8 million and $ 26.3 million, respectively.

See Note 3 for further information.

Together, as of June 30, 2022 and December 31, 2021, these finance leases had weighted-average remaining terms of 74.8 years and 38.5 years, respectively, and weighted-average discount rates of 5.5 % and 5.4 %, respectively.

As of June 30, 2022 , finance lease right-of-use lease assets and liabilities totaled $ 130.5 million and $ 123.8 million, respectively.

As of December 31, 2021 , finance right-of-use lease assets and liabilitie s totaled $ 429.8 million and $ 435.1 million, r espectively.

For the three and six months ended June 30, 2022, amortization related to finance leases was $ 3.4 million and $ 6.7 million, respectively, net of amounts capitalized, compared to $ 2.1 million and $ 3.4 million for the three and six months ended June 30, 2021, respectively.

For the three and six months ended June 30, 2022, we capitalized $ 1.8 million and $ 4.8 mil lion, respectively, of lease costs associated with active development and redevelopment projects on certain of the underlying property and ground lease assets, compared to $ 5.8 million and $ 12.7 million, respectively, for three and six months ended June 30, 2021.

Operating Lease Arrangements

Aimco has operating leases primarily for corporate office space.

As of March 31, 2022 and December 31, 2021, Aimco's operating leases had weighted-average remaining terms of 7.1 years and 7.4 years, respectively.

As of both March 31, 2022 and December 31, 2021,the leases had weighted-average discount rates of 3.1 % .

We have operating leases primarily for corporate office space.

As of June 30, 2022 and December 31, 2021, our operating leases had weighted-average remaining terms of 7.1 years and 7.4 years, respectively.

As of June 30, 2022 and December 31, 2021, the leases had weighted-average discount rates of 3.1 % , a nd 3.1 %, re spectively.

We record operating lease expense on a straight-line basis over the lease term.

Total operating lease cost for three months ended March 31, 2022 and 2021 w as $ 0.4 m illion and $ 0.3 million, respectively.

As of March 31, 2022 and December 31, 2021,

operating lease right-of-use assets of $ 4.9 million and $ 5.1 m illion, respectively, are included in other assets in the consolidated balance sheets.

As of March 31, 2022 and December 31, 2021, operating lease liabilities of $ 12.3 million and $ 12.7 m illion, respectively, are included in accrued liabilities othe r in the consolidated balance sheets.

Total operating lease expense for the three and six months ended June 30, 2022 wa s $ 0.2 million and $ 0.3 million, re spectively, compared to $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022 and December 31, 2021, operating lease right-of-use lease assets of $ 4.7 million and $ 5.1 million, respectively, are included in O ther assets, net in our Condensed Consolidated Balance Sheets .

As of June 30, 2022 and December 31, 2021, operating lease liabilities of $ 12.0 million and $ 12.7 m illion, respectively, are included in A ccrued liabilities and other in our Condensed Consolidated Balance Sheets .

For finance and operating leases, when the rate implicit in the lease cannot be determined, we estimate the value of our lease liabilities using discount rates equivalent to the rates we would pay on a secured borrowing with terms similar to the leases.

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We have lease agreements with lease and non-lease components, and have elected to not separate these components for all classes of underlying assets.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

Leases with an initial term of 12 months or less are not recorded in our Condensed Consolidated Balance Sheets .

Office Space Sublease

We have a sublease arrangement to provide space within our corporate office for fixed rents which commenced on January 1, 2021 and expire on May 31, 2029 .

We have a sublease arrangement to provide space within our corporate office for fixed rents, which commenced on January 1, 2021 and expires on May 31, 2029 .

Annual Future Minimum Lease Payments

Combined minimum annual lease payments under operating and financing leases, a nd sublease income that offsets Aimco's operating lease rent, are as follows (in thousands):

Sublease Income

C ombined minimum annual lease payments under operating and finance leases, a nd sublease income that offsets our operating lease rent, are as follows (in thousands):

Sublease Income and Lease Modification Income

Operating Lease Future Minimum Rent

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We have three segments:

(i) Development and Redevelopment, (ii) Operating, and (iii) Other.

Our Development and Redevelopment segment consists of properties that are under construction or have not achieved stabilization, as well as land assemblages that are being held for development adjacent to The Hamilton community and other land purchases.

(i) Development and Redevelopment;

(ii) Operating;

and (iii) Other.

Our Development and Redevelopment segment consists of properties that are under construction or have not achieved stabilization, as well as land held for development.

Our Operating segment includes 21 residential apartment communities that have achieved stabilized level of operations as of January 1, 2021 and maintained it throughout the current year and comparable period.

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In our Condensed Consolidated Statements of Operations , utility reimbursements are included in Rental and other property revenues , in accordance with GAAP.

As of March 31, 2022, our Development and Redevelopment segment consists of 13 properties:

three residential apartment communities with 1,331 planned apartment homes, a single family rental community with 16 planned homes plus eight accessory dwelling units, and one hotel, with 106 planned rooms, we are actively developing or redeveloping;

three residential apartment communities with 499 apartment homes for which we have completed the redevelopment, but have not achieved stabilization;

As of June 30, 2022, our Development and Redevelopment segment consists of 14 properties:

two residential apartment communities with 965 planned apartment homes, a single family rental community with 16 pla nned homes plus eight accessory dwelling units, and one hotel, with 106 planned rooms, we are actively developing or redeveloping;

four residential apartment communities with 865 apartment homes for which we have completed the redevelopment, but have not achieved stabilization;

and, land parcels held for development.

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Our Other segment includes our recent Eldridge Townhomes acquisition, stabilized but not owned for the comparable reporting period, and 1001 Brickell Bay Drive, our only office building.

The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the three months ended March 31, 2022 and 2021 (in thousands):

The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the three months ended June 30, 2022 and 2021 (in thousands):

Development and Redevelopment

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Corporate and Amounts Not Allocated to Segments

Three Months Ended March 31, 2022:

Three Months Ended June 30, 2022:

Rental and other property revenues

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Other items included in income before

income tax benefit (3)

Income (loss) before income tax benefit

income tax (3)

Income (loss) before income tax

Development and Redevelopment

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Corporate and Amounts Not Allocated to Segments

Three Months Ended March 31, 2021:

Three Months Ended June 30, 2021:

Rental and other property revenues

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Other items included in income before

income tax benefit (3)

Income (loss) before income tax benefit

income tax (3)

Income (loss) before income tax

The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the six months ended June 30, 2022 and 2021 (in thousands):

Development and Redevelopment

Proportionate and Other Adjustments (1)

Corporate and

Six Months Ended June 30, 2022:

Rental and other property revenues

Property operating expenses

Other operating expenses not allocated

to segments (2)

Total operating expenses

Proportionate property net operating

income (loss)

Other items included in income before

income tax (3)

Income (loss) before income tax

Development and Redevelopment

Proportionate and Other Adjustments (1)

Corporate and

Six Months Ended June 30, 2021:

Rental and other property revenues

Property operating expenses

Other operating expenses not allocated

to segments (2)

Total operating expenses

Proportionate property net operating

income (loss)

Other items included in income before

income tax (3)

Income (loss) before income tax

(1) Represents adjustments for redeemable noncontrolling interests in consolidated real estate partnerships' share of the results of consolidated communities in our segments, which are included in the related consolidated amounts, but excluded from proportionate property net operating income for our segment evaluation.

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Utility reimbursements are included in Rental and other property revenues in our Condensed Consolidated Statements of Operations prepared in accordance with GAAP.

(2) Other operating expenses not allocated to segments consists of depreciation and amortization, general and administrative expense, and miscellaneous other expenses.

(3) Other items included in income before income tax benefit consists primarily of interest expense, unrealized gain on our interest rate options and mezzanine investment income, net.

Net real estate and non-recourse property debt, net, of our segments were as follows (in thousands):

(2) Other operating expenses not allocated to segments consist of depreciation and amortization, general and administrative expense, and miscellaneous other expenses.

(3) Other items included in Income before income tax benefit consist primarily of interest expense, gain on our interest rate options, gain on sale of Real Estate, lease modification income and mezzanine investment income, net.

Net real estate and non-recourse property debt, net, of our segments as of June 30, 2022 and December 31, 2021, were as follows (in thousands):

Development and Redevelopment

As of March 31, 2022:

Corporate (1)

As of June 30, 2022:

Buildings and improvements

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Development and Redevelopment

Corporate (1)

As of December 31, 2021:

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Non-recourse property debt, net

In addition to the amounts disclosed in the tables above, the Development and Redevelopment segment right-of-use assets and lease liabilities as of March 31, 2022 aggregated to $ 522.9 million and $ 509.2 million, respectively, and as of December 31, 2021, aggregated to $ 429.8 million and $ 435.1 million, respectively.

As of March 31, 2022 , right-of-use assets and lease liabilities primarily relate to our investments in Upton Place, North Tower of Flamingo Point, 707 Leahy, The Fremont, Prism, Oak Shore, and Flagler Village.

(1) During the six months ended June 30, 2022, certain properties were sold or reclassified as Held for Sale, and therefore are not included in our segment balance sheets, as of June 30, 2022.

We added a new Corporate segment to this table for presentation purposes to display these assets and the associated debt as of December 31, 2021.

In addition to the amounts disclosed in the tables above, as of June 30, 2022 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $ 130.5 million and $ 123.8 million, respectively, and as of December 31, 2021, aggregated to $ 429.8 million and $ 435.1 million, respectively.

As of June 30, 2022, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place and Oak Shore.

As described in Note 9, we entered into termination agreements to cancel our leases on North Tower of Flamingo Point, 707 Leahy, The Fremont, and Prism on September 1, 2022.

Consequently, during the period ended June 30, 2022 , we wrote off $ 326.1 million and $ 337.3 million right-of-use lease assets and lease liability, respectively.

Additionally, we purchased a land parcel for $ 64.0 million and terminated the certain lease component on Flagler Village and derecognized associated right-of-use lease assets and lease liabilities of $ 60.5 million and $ 46.7 million, respectively.

Note 11 –

Financing Activities

In May 2022, we entered into 14 long term, fixed rate, non-recourse property loans that totaled $ 574.7 million.

This non-recourse debt has a weighted-average term of 9.4 years and a weighted-average interest rate of 4.63 %.

Total debt issuance costs of approximately $ 5.4 million have been deferred.

In addition, we incurred $ 7.4 million in prepayment costs associated with the extinguishment of six loans.

In June 2022, we entered into a construction loan for up to $ 23.0 million in financing to fund the Oak Shore project.

The loan has a term of 36 months with an option to extend for two additional one year periods, and an interest rate based on the One-Month Term SOFR plus a spread of 4.41 %, subject to a minimum all-in interest rate of 5.56 %.

In June 2022, we entered into an agreement for the modification and early repayment of our Notes Payable to AIR.

During the quarter ended June 30, 2022, we made a principal payment of $ 387.1 million, and recognized $ 17.9 million of associated spread maintenance costs, $ 12.9 million of which were paid as of June 30, 2022.

See Note 5 for further information.

During the six months ended June 30, 2022 , we monetized our $ 500.0 million notional amount interest rate swaption for $ 13.7 million and recognized a gain of $ 8.0 million, which is included in Realized and unrealized gains (losses) on interest rate options in our Condensed Consolidated Statements of Operations for the periods ended June 30, 2022.

Note 12 –

Subsequent Events

On May 3, 2022, we closed on the sale of our Pathfinder Village property located in Fremont, California, for $ 127.0 million.

Pathfinder Village was a stabilized property and included within our Operating segment.

Proceeds were used to repay existing debt obligations.

Subsequent to quarter-end, we monetized the $ 500.0 million notional amount swaption described in Note 7 for $ 13.7 million and recognized a gain of $ 7.1 million.

Subsequent to June 30, 2022, we purchased the remaining two land parcels of our Flagler Village neighborhood development site in Fort Lauderdale, Florida for $ 20.0 and $ 16.0 million.

In July 2022, we sold our Cedar Rim Apartments property located in King County, Washington for $ 53.0 million.

Cedar Rim was classified as a held for sale asset in the second quarter of 2022.

In July 2022, we closed a preferred equity financing arrangement with an institutional equity investor for $ 102.0 million, accruing at a fixed 8.0 % interest rate, related to a portfolio of stabilized assets.

In July 2022, we made the remaining principal and spread maintenance payments on our Notes Payable to AIR of $ 147.0 and $ 5.0 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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and our ability to comply with debt covenants, including financial coverage ratios.

These forward-looking statements are based on management’s judgment as of this date, which is subject to risks and uncertainties.

Risks and uncertainties that could cause actual results to differ materially from our expectations include, but are not limited to:

These forward-looking statements are based on management’s judgment as of this date, which is subject to risks and uncertainties that could cause actual results to differ materially from our expectations, including, but not limited to:

the effects of the coronavirus pandemic on Aimco’s business and on the global and U.S.

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the ability and willingness of the Separate Entities and their subsidiaries to meet and/or perform their obligations under the contractual arrangements that were entered into among the parties in connection with the Separation and any of their obligations to indemnify, defend and hold the other party harmless from and against various claims, litigation and liabilities;

the ability to achieve some or all the benefits that we expect to achieve from the Separation;

and the ability to achieve some or all the benefits that we expect to achieve from the Separation;

and such other risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission (“SEC”).

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(which we refer to as Aimco Operating Partnership) and their consolidated subsidiaries, collectively.

Certain financial and operating measures found herein and used by management are not defined under accounting principles generally accepted in the United States, or GAAP.

Certain financial and operating measures found herein and used by management are not defined under accounting principles generally accepted in the United States ("GAAP").

These measures are defined and reconciled to the most comparable GAAP measures under the Non-GAAP Measures heading.

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a diversified portfolio, consisting of high-performing in-process value-add investments, a deep and growing pipeline, alternative investments, and stabilized assets;

and our capital redeployment plan of reallocating Aimco equity to higher returning investments and prudent recycling of capital.

Our primary goal is outsized risk adjusted returns and accelerating growth for Aimco shareholders.

and our capital redeployment plan of reallocating our equity to higher returning investments and prudent recycling of capital.

Our primary goal is outsized risk adjusted returns and accelerating growth for our shareholders.

We have a talented leadership team with an average Aimco tenure of over 10 years and nearly 20 years of diverse real estate industry experience combined with a disciplined and proven investment process.

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From time-to-time, we will allocate capital to financial assets designed to mitigate risks elsewhere in the Aimco enterprise.

Existing examples include our option to acquire an interest rate swap designed to protect against repricing risk on maturing Aimco liabilities and the use of rate caps to provide protection against increases in interest rates on in-place loans.

Existing examples include our option to acquire an interest rate swap designed to protect against repricing risk on our maturing liabilities and the use of interest rate caps to provide protection against increases in interest rates on in-place loans.

We expect to capitalize our activities through a combination of non-recourse property debt, construction loans, third-party equity, and the recycling of Aimco equity, including retained earnings.

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When warranted, we plan to seek equity capital from joint venture partners to improve our cost of capital, further leverage Aimco equity, reduce exposure to a single investment and, in certain cases, for strategic benefits.

Results for the Three Months Ended March 31, 2022

The results from the execution of our business plan during the three months ended March 31, 2022 are described below.

The results from the execution of our business plan during the three and six months ended June 30, 2022 are further described below.

Financial Results and Recent Highlights

Net income attributable to Aimco common stockholders per share, on a fully dilutive basis, was $0.05 for the three months ended March 31, 2022, compared to net income per share of $0.14 for the three months ended March 31, 2021, due primarily to the change in fair market valuation of Aimco's interest rate options and entity investments.

The North Tower at Flamingo Point in Miami Beach, Florida reached stabilized occupancy in April, more than six months ahead of schedule and at rental rates more than 25% ahead of underwriting.

Demand for apartment homes at The Hamilton in the Edgewater neighborhood of Miami, Florida is strong.

Aimco has pre-leased 17 homes in anticipation of our initial apartment home deliveries scheduled to occur in the coming months, at rental rates ahead of underwriting.

Aimco secured two new development pipeline assets in South Florida with the potential to construct approximately four million square feet of phased, mixed-use developments.

For the three months ended March 31, 2022, revenue and net operating income from our Operating Properties were up 9.4% and 14.3%, respectively, year over year, with occupancy of 98.5%, up 90 basis points year over year.

Aimco ended the first quarter with $298.0 million of liquidity, including cash and capacity on its revolving credit facility, net of letters of credit outstanding.

Net income per share attributable to Aimco, on a fully dilutive basis, was $1.57 for the three months ended June 30, 2022, compared to a loss of ($0.13) for the three months ended June 30, 2021, due primarily to the recognition of income resulting from the agreement to terminate the AIR leases and gains related to the sale of Pathfinder Village.

Net income per share attributable to Aimco, on a fully dilutive basis was $1.65 for the six months ended June 30, 2022, compared to net income per share of $0.00 for the six months ended June 30, 2021.

For the three months ended June 30, 2022, revenue and net operating income from our Operating Properties were up 11.2% and 14.4%, respectively, year over year, with occupancy of 97.7%, up 20 basis points year over year.

We reached an agreement with AIR to terminate four leases on September 1, 2022 that will result in more than $100 million of realized value creation (net of costs) for Aimco shareholders and eliminate $469 million of obligations related to the four leased properties.

In July 2022, we completed the early repayment of the $534 million of Notes Payable to AIR, originally scheduled to mature in January 2024 and carrying an annual rate of 5.2% with proceeds from property level financings, the sale of Pathfinder Village, and the placement of preferred equity secured by a portfolio of stabilized properties.

Value Add, Opportunistic & Alternative Investments

Development and Redevelopment

Aimco generally seeks development and redevelopment opportunities where barriers to entry are high, target customers can be clearly defined, and where Aimco has a comparative advantage over others in the market.

Aimco’s Value Add and Opportunistic investments may also target portfolio acquisitions, operational turnarounds, and re-entitlements.

Aimco currently has eight active development and redevelopment projects, located across five U.S.

We generally seek development and redevelopment opportunities where barriers to entry are high, target customers can be clearly defined, and where we have a comparative advantage over others in the market.

Our Value Add and Opportunistic investments may also target portfolio acquisitions, operational turnarounds, and re-entitlements.

We currently have eight active development and redevelopment projects, located across five U.S.

markets, in varying phases of construction and lease-up.

These projects remain on track, as measured by project-level budget and schedule, lease-up metrics, and current market valuations.

During the three months ended March 31, 2022, we invested $65.7 million in development and redevelopment activities.

These projects remain on track, as measured by budget, lease-up metrics, and current market valuations.

During the three and six months ended June 30, 2022, we invested $62.5 million and $128.2 million respectively, in development and redevelopment activities.

Updates include:

At the North Tower of Flamingo Point in Miami Beach, Florida, construction is largely complete and the property is 98% occupied.

The property reached stabilized occupancy in April, more than six months ahead of plan and at rental rates more than 25% ahead of underwriting.

The Fremont on the Anschutz Medical Campus in Aurora, Colorado was 92% leased or pre-leased as of April 30, 2022, and is expected to reach stabilized occupancy in the third quarter of 2022.

Prism in Cambridge, Massachusetts, and 707 Leahy in Redwood City, California, reached stabilized occupancy in the second half of 2021.

Pre-leasing began at The Hamilton in Miami, Florida in anticipation of initial apartment home deliveries scheduled to occur in the coming months.

As of April 30, 2022, 17 units has been pre-leased at rental rates ahead of underwriting.

At Upton Place in Northwest Washington, D.C., construction remains on schedule and on budget.

As of April 30, 2022, more than 80% of the 106,000 square feet of planned retail space has been leased to two anchor tenants, more than 18 months ahead of delivery and at terms ahead of underwriting.

Construction continues on schedule and on budget at The Benson Hotel and Faculty Club in Aurora, Colorado and at our single-family rental project, Oak Shore, in Corte Madera, California.

As previously announced, following the successful development and lease-up of 707 Leahy in Redwood City, California, Prism in Cambridge, Massachusetts, Flamingo Point North Tower in Miami Beach, Florida, and The Fremont on the Anschutz Medical Campus in Aurora, Colorado, Aimco and AIR have agreed to cancel our leasehold interest in each property on or before September 1, 2022.

In return for the termination of the leases, we will receive $200 million, resulting in value creation, net of costs, of approximately $100 million, which will be realized about 18 months sooner than originally anticipated.

At The Hamilton in Miami, Florida, we now expect to welcome the first residents into redesigned and fully renovated units in August, 2022.

As of July 31, 2022, 61 units were leased or pre-leased at rental rates more than 20% ahead of underwriting.

Construction continues on schedule and on budget at Upton Place in Northwest Washington, D.C., the Benson Hotel and Faculty Club on the Anschutz Medical Campus in Aurora, Colorado and at our single-family home development project, Oak Shore, in Corte Madera, California.

Alternative Investments

Aimco makes alternative investments where it has special knowledge or expertise relevant to the venture and opportunity exists for positive asymmetric outcomes.

Aimco’s current alternative investments include a mezzanine loan secured by a stabilized multi-family property with an option to participate in future multi-family development as well as three passive equity investments.

Aimco's current alternative investments include a mezzanine loan secured by a stabilized multifamily property with an option to participate in future multi-family development as well as three passive equity investments.

Updates include:

Aimco’s $346.0 million mezzanine loan is secured by the Parkmerced stabilized multi-family property plus phases two through nine of the site's future development opportunity.

Members of Aimco's borrower also own phase one and recently recapitalized it with an alternative investment firm with $57 billion under management.

The recapitalization provides the borrower with additional liquidity and added capacity to advance capital and service the first priority debt that is senior to the Aimco loan.

It is now expected that the neighboring San Francisco State University will return to full in-person learning this fall, increasing the demand for the apartments that serve as collateral for our loan.

Aimco funded the remaining $14.2 million of a total commitment of a $50.0 million passive equity investment in IQHQ Inc., a life sciences developer.

The borrower on our $354.4 million mezzanine loan, which is secured by the Parkmerced stabilized multifamily property plus phases two through nine of the site's future development opportunity, remains current on its first mortgage obligations.

The neighboring San Francisco State University is expected to return to full in-person learning this fall, with hybrid options, increasing the demand for the apartments that serve as collateral for the Aimco loan.

Due to the relative size of our investment and alternative accretive uses of capital, we recently initiated a marketing effort to explore potential opportunities to monetize all or a portion of our investment.

We redeemed 22% of our passive equity investment in IQHQ Inc., a life sciences developer.

In July, we received proceeds of $16.5 million from the sale resulting in a greater than 50% internal rate of return over the hold period for this portion of our investment.

Aimco retained 2.4 million shares worth $59.7 million and the opportunity to collaborate with IQHQ on future development opportunities that include a multifamily component.

Investment Activity

Aimco is focused on development and redevelopment, funded through joint ventures.

Aimco is focused on development and redevelopment, funded through our joint ventures.

Aimco will also consider opportunistic investments in related activities.

In the first quarter of 2022:

Aimco’s joint venture with The Kushner Companies closed on the previously announced acquisition of three undeveloped land parcels located in downtown Fort Lauderdale, Florida.

The total purchase price for the land was $49.0 million ($25.0 million at Aimco’s 51.0% share) and current zoning allows for the development of approximately three million square feet of multifamily homes and commercial space.

The venture is under contract to sell one of the parcels and expects to close this sale in the third quarter of 2022.

Aimco formed a joint venture for the construction of approximately one million square feet of mixed-use development in the Edgewater neighborhood of Miami, Florida.

Aimco has a 20.0% share of the joint venture, which includes the initial contribution of an eighth of an acre of land that we purchased for $1.7 million in January 2022.

The development site is situated as the gateway to our Edgewater land assemblage and our redevelopment of The Hamilton.

Aimco will serve as the development manager for the venture and expects to begin construction in 2023.

Aimco entered into a contract to acquire, for $100.0 million, a nine-acre development site in Fort Lauderdale, Florida.

The site is located in the rapidly growing Flagler Village neighborhood and allows for approximately three million square feet of phased, mixed-use development, which could contain up to 1,500 residential units at full build-out.

Pursuant to the agreement, Aimco reserved funds for the transaction by placing $70.0 million of cash and $30.0 million in letters of credit into escrow.

In conjunction with the purchase, we entered into a financing lease with the seller to obtain the development rights.

Aimco plans to form a joint venture or joint ventures to execute the planned development activity.

Updates include:

In May, we executed joint venture agreements to act as a co-GP on the development of a phased multifamily community in Bethesda, Maryland.

The project is fully entitled and includes approvals for over 2,200 units in six phases.

We plan to participate in the first two multifamily phases totaling 574 units with an expected Aimco investment of $18.3 million, we also have rights to increase our investment and to choose to participate in future phases of development.

In June, July, and August, we closed on the purchase of three development parcels we contracted to acquire, for $100 million, in February 2022.

The nine-acre site is located in the rapidly growing Flagler Village neighborhood of Fort Lauderdale, Florida, and allows for approximately three million square feet of phased, mixed-use development, which could contain up to 1,500 residential units, more than 300 hotel keys, and more than 100,000 square feet of retail space at full build-out.

We intend to execute the planned development activity through joint venture financing.

Operating Property Results

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markets with average rents in line with local market averages.

Aimco also owns one commercial office building that is part of an assemblage with an adjacent apartment building.

Highlights for the three months ended March 31, 2022 include:

Revenue in the first quarter of 2022 was $35.8 million, up 9.4% year over year, resulting from a $155 increase in average monthly revenue per apartment home to more than $2,000, and a 90-basis point increase in Average Daily Occupancy to 98.5%.

Expense in the first quarter of 2022 was $11.2 million, up 0.2% year over year.

We also own a commercial office building that is part of an assemblage with an adjacent apartment building.

Highlights for the three months ended June 30, 2022 include:

Revenue in the second quarter of 2022 was $33.1 million, up 11.2% year over year, resulting from a $203 increase in average monthly revenue per apartment home to $2,039, and a 20-basis point increase in Average Daily Occupancy to 97.7%.

Expenses the second quarter of 2022 were $10.4 million, up 4.8% year over year.

Net operating income in the second quarter of 2022 was $22.7 million, up 14.4% year-over-year.

1001 Brickell Bay Drive, a waterfront office building in Miami, Florida, is owned as part of a larger assemblage with substantial development potential.

At the end of the first quarter 2022, the building was 83% occupied, up from 72% at the same time last year.

In the first half of 2022, we executed leases on over 60,000 square feet of office space, at rates per square foot 20% higher than leases executed in the first half of 2021.

At the end of the second quarter 2022, the building was 85% occupied, up from 73% at the same time last year.

Balance Sheet and Financing Activity

Aimco is highly focused on maintaining a strong balance sheet, including having at all times ample liquidity.

As of March 31, 2022, Aimco had access to $297.5 million, including $109.0 million of cash on hand, $68.6 million of restricted cash, and the capacity to borrow up to $120.0 million on our revolving credit facility.

We are highly focused on maintaining a strong balance sheet, including having at all times ample liquidity.

As of June 30, 2022, we had access to $215.5 million in liquidity, including $81.8 million of cash on hand, $12.5 million of restricted cash, and the capacity to borrow up to $121.2 million on our revolving credit facility.

Refer to the Liquidity and Capital Resources section for additional information regarding our leverage.

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We aggregate all our apartment communities that have reached stabilization into our Operating segment.

We aggregate all our

apartment communities that have reached stabilization into our Operating segment.

Our Other segment consists of properties that are not included in our Development and Redevelopment or Operating segments.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying condensed consolidated financial statements included i n Item 1.

Three Months Ended March 31, 2022 compared with the Three Months Ended March 31, 2021

Net income decreased by $12.0 million, or 59.4% during the three months ended March 31, 2022, compared to the same periods in 2021, as described more fully below.

Three and Six Months Ended June 30, 2022 compared with the Three and Six Months Ended June 30, 2021

Net income increased by $258.8 million and by $246.8 million during the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, as described more fully below.

Property Results

As of March 31, 2022, our Development and Redevelopment segment included five properties that were under construction and three properties in lease-up.

As of June 30, 2022, our Development and Redevelopment segment included four properties that were under construction and four properties in lease-up.

Our Operating segment included 21 communities with 5,582 apartment homes, and our Other segment included our recent Eldridge Townhomes acquisition, and one office building.

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Proportionate Property Net Operating Income

The results of our segments for the three months ended March 31, 2022 and 2021, as presented below, are based on segment classifications as of March 31, 2022:

Three Months Ended March 31,

The results of our segments for the three months ended June 30, 2022 and 2021, as presented below, are based on segment classifications as of June 30, 2022:

Three Months Ended June 30,

(in thousands)

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Development and Redevelopment

For the three months ended March 31, 2022, compared to the same period in 2021:

For the three months ended June 30, 2022, compared to the same period in 2021:

Development and Redevelopment proportionate property net operating income increased by $5.3 million due primarily to the delivery and lease up of units at newly constructed or redeveloped apartment communities.

Development and Redevelopment proportionate property net operating income will decrease in the third quarter due to the termination of the four leases.

Operating proportionate property net operating income increased by $2.9 million, or 14.4%.

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Other proportionate property net operating income increased by $1.0 million, or 49.7%.

The results of our segments for the six months ended June 30, 2022 and 2021, as presented below, are based on segment classifications as of June 30, 2022:

Six Months Ended June 30,

Historical Change

(in thousands)

Rental and other property revenues, before utility reimbursements:

Development and Redevelopment

Property operating expenses, net of utility reimbursements:

Development and Redevelopment

Proportionate property net operating income:

Development and Redevelopment

For the six months ended June 30, 2022, compared to the same period in 2021:

Development and Redevelopment proportionate property net operating income increased by $9.3 million, due primarily to the delivery and lease up of units at newly constructed or redeveloped apartment communities.

Development and Redevelopment proportionate property net operating income will decrease in the third quarter due to the termination of the four leases.

Operating proportionate property net operating income increased by $5.8 million, or 14.8%.

The increase was attributable primarily to a $6.3 million, or 10.7% increase in rental and other property revenues due to higher average rental rates of $185 per apartment home, and a 50-basis point increase in occupancy.

Other proportionate property net operating income increased by $2.4 million, or 56.2%.

Non-Segment Real Estate Operations

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Depreciation and Amortization

For the three months ended March 31, 2022, depreciation and amortization expense increased by $2.4 million, or 11.6% when compared to the same period in 2021, primarily due to additional assets being placed into service.

For the three and six months ended June 30, 2022, depreciation and amortization expense increased by $14.2 million, or 68.9%, and $16.6 million, or 40.2%, respectively, when compared to the same periods in 2021, primarily due to additional assets being placed into service.

General and Administrative Expenses

For the three months ended March 31, 2022, compared to the same period in 2021, general and administrative expenses increased by $3.2 million, or 50.1%.

General and administrative expense for the three months ended March 31, 2021 was prior to the full build out of Aimco’s platform and are not representative of Aimco’s anticipated expenses.

Additionally, General and administrative expense includes $1.0 million of expenses to be reimbursed to AIR, per agreement upon separation, for consulting services, with respect to strategic growth, direction, and advice, in the three months ended March 31, 2022 and 2021.

This agreement is expected to conclude at year end.

For the three months ended June 30, 2022, general and administrative expenses increased by $1.6 million, or 21.4% compared to the three months ended June 30, 2021.

For the six months ended June 30, 2022, general and administrative expenses increased by $4.7 million, or 34.6% compared to the six months ended June 30, 2021.

General and administrative expenses incurred for the three and six months ended June 30, 2021 were prior to the full build out of our platform and are not representative of what we believe our anticipated expenses will be going forward.

Additionally, for the three and six months ended June 30, 2022 and 2021, general and administrative expenses included $1.0 million and $2.0 million of expenses, respectively, to be reimbursed to AIR, per agreement upon separation, for consulting services with respect to strategic growth, direction, and advice.

This agreement will conclude at year end.

Interest Expense

For the three months ended March 31, 2022, compared to the same period in 2021, interest expense increased by $1.9 million, or 15.2%, mainly due to increased borrowings of property debt and construction loans to support our expanding property development and redevelopment activities.

For the three and six months ended June 30, 2022, compared to the same periods in 2021, interest expense increased by $28.9 million, or 228.7%, and increased by $30.8 million, or 121.8%, respectively, due primarily to $26.4 million of spread maintenance costs related to early payoff of the Notes Payable to AIR and refinance of certain property debt.

Mezzanine Investment Income, Net

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Until legal title of the subsidiaries is transferred, AIR is obligated to pass payments on the mezzanine loan to us.

As of March 31, 2022, the total receivable including accrued and unpaid interest was $346.0 million.

During the three months ended March 31, 2022, we recognized $8.2 million of income in connection with the mezzanine loan, compared to $7.5 million during the three months ended March 31, 2021.

As of June 30, 2022 and December 31, 2021, the total receivable, including accrued and unpaid interest, was $354.4 million and $337.8 million, respectively.

During the three and six months ended June 30, 2022, we recognized $8.3 million and $16.6 million, respectively, of income in connection with the mezzanine loan, compared to $7.6 million and $15.0 million during the three and six months ended June 30, 2021, respectively.

The loan is subject to certain risks, including, but not limited to, those resulting from the lingering disruption due to the COVID-19 pandemic and associated response, and any similar events that might occur in the future, which may result in all or a portion of the loan not being repaid.

In the event we determine that a portion of the related Mezzanine Investment is not recoverable, we will recognize an impairment.

Unrealized Gains on Interest Rate Options

With the neighboring San Francisco State University returning to full in-person learning this fall, we now expect increasing demand for the local apartments that serve as collateral for our loan.

Realized and Unrealized Gains (Losses) on Interest Rate Options

During the six months ended June 30, 2022, we monetized our $500.0 million notional amount interest rate swaption for $13.7 million and recognized a realized a gain of $8.0 million.

We adjust our interest rate options to fair value on a quarterly basis.

As a result of the mark to market adjustment, we recognized unrealized gains of $18.8 million and $25.3 million during the three months ended March 31, 2022 and 2021, respectively.

As a result of the mark-to-market adjustment, we recorded unrealized gains of $11.9 million and $30.7 million, respectively, during the three and six months ended June 30, 2022, compared to an unrealized loss of $17.0 million and an unrealized gain of $8.4 million during the three and six months ended June 30, 2021, respectively.

Realized and Unrealized Gains (Losses) on Equity Investments

During the three and six months ended June 30, 2022, 22% of our original investment in IQHQ was redeemed for $16.5 million and we recognized a realized gain of $5.7 million.

Our remaining investment in IQHQ was valued at a stepped up basis at the same per share value as the cash redemption, and we recognized a $20.5 million unrealized gain.

We measure our investments in property technology funds at NAV as a practical expedient.

As a result of changes in NAV, we recorded an unrealized gain of $0.5 million and an unrealized loss of $3.9 million, respectively, during the three and six months ended June 30, 2022, compared to unrealized gains of $0.9 million during the three and six months ended June 30, 2021.

Gains on Dispositions of Real Estate

During the three and six months ended June 30, 2022, we sold our Pathfinder Village property located in Fremont, California, for a gross sales price of $127.0 million and recognized a gain from the sale of $94.6 million.

Lease Modification Income

For the three and six months ended June 30, 2022, we as lessee and AIR as lessor, entered into a lease termination agreement pursuant to which AIR is required to pay us a termination payment on September 1, 2022, and upon receipt of such payment, the existing leases with respect to four properties will terminate.

The total lease modification income recognized in the quarter was $205.4 million.

Other Income (Expense), Net

Other income, net, includes costs associated with our risk management activities, partnership administration expenses, valuation changes associated with equity investments, fee income, and certain non-recurring items.

For the three months ended March 31, 2022, compared to 2021, other expenses, net increased by $4.9 million, or 1351.0%, due primarily to valuation changes in our investments in property technology funds consisting of privately held entities that develop technology related to the real estate industry.

Other income (expense), net, includes costs associated with our risk management activities, partnership administration expenses, valuation changes associated with equity investments, fee income, and certain non-recurring items.

Other income (expense), net, for the three months ended June 30, 2022 decreased by $3.5 million, or 169.2%, compared to the three months ended June 30, 2021.

For the six months ended June 30, 2022 decreased by $3.9 million, or 161.8%.

Income Tax Benefit

Certain of our operations, including our Development and Redevelopment activities, are conducted through taxable REIT subsidiaries, or TRS entities.

Certain aspects of our operations, including our Development and Redevelopment activities, are conducted through taxable REIT subsidiaries, or TRS entities.

Additionally, our TRS entities hold investments in one of our apartment communities and 1001 Brickell Bay Drive.

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Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and gains retained by the REIT.

For the three months ended March 31, 2022 and 2021, we had consolidated net losses subject to tax of $14.8 million and $9.5 million, respectively.

For the three months ended March 31, 2022, we recognized income tax benefit of $4.1 million compared to $5.1 million during the same period in 2021.

The change is primarily due to an income tax benefit of $2.7 million in 2021 associated with internal restructuring and changes to our effective state tax rate, partially offset by higher GAAP losses at our TRS entities in 2022.

For the three and six months ended June 30, 2022, we had consolidated net income subject to tax of $181.4 million and $166.6 million, respectively.

For the three and six months ended June 30, 2021, we had consolidated net losses subject to tax of $9.0 million and $18.5 million, respectively.

For the three months ended June 30, 2022, we recognized income tax expense of $46.0 million compared to an income tax benefit $2.8 million during the same period in 2021.

The change is primarily due to the GAAP income taxes associated with the lease termination income recognized in the second quarter of 2022.

For the six months ended June 30, 2022, we recognized income tax expense of $41.9 million compared to a $7.9 million benefit during the same period in 2021.

The change is primarily due to the GAAP income taxes associated with the lease termination income recognized in the second quarter of 2022.

Critical Accounting Policies and Estimates

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Additionally, we exclude interest income recognized on our Mezzanine Investment that was accrued but not paid.

The reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three months ended March 31, 2022 and 2021, is as follows (in thousands):

Three Months Ended March 31,

The reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2022 and 2021, is as follows (in thousands):

Three Months Ended

Six Months Ended

Net income (loss) attributable to Aimco

Interest expense

Income tax benefit

Income tax expense (benefit)

Gain on dispositions of real estate

Lease modification income

Depreciation and amortization

Adjustment related to EBITDAre of unconsolidated partnerships

Net (income) loss attributable to redeemable noncontrolling interests

in consolidated real estate partnerships

Net (income) loss attributable to noncontrolling interests

in consolidated real estate partnerships

Net (income) loss attributable to redeemable noncontrolling interests in consolidated real estate partnerships

Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships

EBITDAre adjustments attributable to noncontrolling interests

Mezzanine investment income, net (1)

Unrealized gains on interest rate options

Unrealized (gains) losses on interest rate options

Unrealized (gains) losses on IQHQ investment

Adjusted EBITDAre

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Our primary sources of liquidity are cash flows from operations and borrowing capacity under our loan agreements.

As of March 31, 2022, our available liquidity was $297.5 million, which consisted of:

As of June 30, 2022, our available liquidity was $215.5 million, which consisted of:

$81.8 million in cash and cash equivalents;

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$121.2 million of available capacity to borrow under our revolving secured credit facility.

We have commitments for, and expect to spend, approximately $217.9 million on development and redevelopment projects underway, with $240.1 million undrawn on our construction loans as of March 31, 2022 and limited partner equity commitments of $15.8 million.

We have commitments for, and expect to spend, approximately $188.4 million on development and redevelopment projects underway, with $231.3 million undrawn on our construction loans as of June 30, 2022 and limited partner equity commitments of $2.3 million.

We are under contract to acquire, for $36.0 million, the two remaining land parcels of the nine-acre development site in Fort Lauderdale.

Our Edgewater joint venture and DC joint ventures have remaining commitments of $12.0 million and we also have unfunded commitments in the amount of $2.9 million related to four investments in entities that develop technology related to the real estate industry.

Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, and future investments.

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In the event that our cash and cash equivalents, revolving secured credit facility, and cash provided by operating activities are not sufficient to cover our liquidity needs, we have the means to generate additional liquidity, such as from additional property financing activity and proceeds from apartment community sales.

We expect to meet our long-term liquidity requirements, including debt maturities, development and redevelopment spending, and future investment activity, primarily through property financing activity, cash generated from operations, and the recycling of Aimco equity.

Our revolving secured credit facility matures in December 2023, prior to consideration of its two one-year extension options.

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However, if property or development financing options become unavailable, we may consider alternative sources of liquidity, such as reductions in capital spending or apartment community dispositions.

As of March 31, 2022, 42% of our leverage consisted of property-level, non-recourse, amortizing debt.

As of June 30, 2022, 70% of our leverage consisted of property-level, non-recourse debt.

Approximately 96% of our property-level debt is fixed-rate, which provides a hedge against increases in interest rates, capitalization rates, and inflation.

As of March 31, 2022, the weighted-average interest rate on our property-level debt was 3.2%, and the remaining term to maturity was 5.1 years.

As of June 30, 2022, the weighted-average interest rate on our property-level debt was 4.4%, and the remaining term to maturity was 8.4 years.

While our primary source of leverage is property-level debt, we also have a secured $150.0 million credit facility with a syndicate of financial institutions, the Notes Payable to AIR, and construction loans.

As of March 31, 2022, we had no outstanding borrowings under our revolving secured credit facility.

We had a $30.0 million letter of credit outstanding related to a contract to purchase a 9-acre development site in Fort Lauderdale;

As of June 30, 2022, we had no outstanding borrowings under our revolving secured credit facility.

We had a $28.8 million letter of credit outstanding related to a contract to purchase a nine-acre development site in Fort Lauderdale;

consequently, we had capacity to borrow up to $121.2 million under our secured credit facility.

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We are currently in compliance and expect to remain in compliance with these covenants during the next twelve months.

As of March 31, 2022, 44% of our leverage consisted of the Notes Payable to AIR, with a fixed interest rate of 5.2% and a term to maturity of 1.8 years, and 15% consisted of our variable-rate non-recourse construction loans.

As of June 30, 2022, 13% of our leverage consisted of the Notes Payable to AIR, with a fixed interest rate of 5.2% and a term to maturity of 1.6 years.

An additional 18% consisted of our variable-rate non-recourse construction loans.

As previously disclosed, in July 2022, we paid off the Notes Payable to AIR in full.

Changes in Cash, Cash Equivalents, and Restricted Cash

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Operating Activities

For the three months ended March 31, 2022, net cash provided by operating activities was $6.5 million.

For the six months ended June 30, 2022, net cash provided by operating activities was $25.4 million.

Our operating cash flow is primarily affected by rental rates, occupancy levels, and operating expenses related to our portfolio of apartment communities and general and administrative costs.

Cash provided by operating activities for the three months ended March 31, 2022 increased by $4.2 million compared to the same period ended in 2021 due to timing of balance sheet position changes.

Cash provided by operating activities for the six months ended June 30, 2022 increased by $8.9 million compared to the same period ended in 2021 due to timing of balance sheet position changes.

Investing Activities

For the three months ended March 31, 2022, our net cash used in investing activities of $111.4 million consisted primarily of capital expenditures and cash used in the $49.0 million purchase of undeveloped land parcels in Fort Lauderdale and construction costs on our development properties.

Total capital additions totaled $49.7 million and $31.7 million during the three months ended March 31, 2022 and 2021, respectively.

For the six months ended June 30, 2022, our net cash used in investing activities of $125.4 million consisted primarily of capital expenditures and $100.8 million of cash used to acquire undeveloped land parcels in Fort Lauderdale, Florida, offset by $126.8 million of proceeds received from the disposition of our property located in Freemont, California.

Total capital additions were $124.8 million and $100.2 million during the six months ended June 30, 2022 and 2021, respectively, primarily used for construction costs on our development properties.

We have generally funded capital additions with available cash and cash provided by operating activities and construction loans.

We also funded the remaining $14.2 million of our total commitment of $50.0 million passive equity investment in IQHQ, a life sciences developer.

Also, during the six months ended June 30, 2022, we funded the remaining $14.2 million of our total commitment of $50.0 of a passive equity investment in IQHQ, a life sciences developer.

We exclude the amounts of capital spending related to commercial spaces and to apartment communities sold or classified as held for sale at the end of the period from the foregoing measures.

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Financing Activities

Net cash from financing activities for the three months ended March 31, 2022 increased by $65.8 million compared to the three months ended March 31, 2021, due primarily to draws on construction loans, and proceeds from non-recourse property loans totaling $55.6 million.

In addition, we received $17.6 million of contributions to our consolidated real estate partnerships.

Using available cash, we made payments of $24.5 million on our finance leases, which primarily consist of $22.2 million of payments for our finance lease arrangements relating to our development site in Fort Lauderdale.

Net cash used by financing activities for the six months ended June 30, 2022 increased by $132.3 million compared to the six months ended June 30, 2021 due primarily to $283.8 million in payoffs of non-recourse property debt, a $387.1 million paydown of Notes Payable to AIR, and a reduction in construction loan proceeds of $86.5 million year over year offset by a $614.7 million increase in proceeds received from non-recourse property debt issuances.

Future Capital Needs

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We make limited use of derivative financial instruments and we do not use them for trading or other speculative purposes.

As of March 31, 2022, on a consolidated basis, we had approximately $86.9 million of variable-rate property-level debt outstanding in addition to two variable rate construction loans that totaled $184.8 million.

We estimate that a change in 30-day LIBOR of 100 basis points with constant credit risk spreads would reduce or increase interest expense by approximately $2.7 million.

As of June 30, 2022, on a consolidated basis, we had approximately $31.9 million of variable-rate property-level debt outstanding in addition to two variable rate construction loans that totaled $203.4 million.

We estimate that a change in floating rates of 100 basis points with constant credit risk spreads would reduce or increase interest expense by approximately $2.4 million.

In 2020, we paid an upfront premium of $12.1 million for the option to enter into a $1.5 billion notional amount interest rate swap at a future date.

This interest rate option, or swaption, provides partial protection against exposure to rising interest rates between now and October 2024.

During the first quarter of 2021, we paid an upfront premium of $5.6 million (including transaction costs) for the option to enter into a $500.0 million notional amount interest rate swap at a future date.

This interest rate option, or swaption, provides partial protection against our refinancing interest rate risk relative to our Notes Payable to AIR, and is intended to mitigate interest rate increases between now and January 2024.

Also during the first quarter of 2021, we paid an upfront premium of $0.3 million for interest rate caps for the entire amounts on our Flamingo and The Hamilton construction loans.

During the quarter ended March 31, 2021, we paid an upfront premium of $0.3 million for interest rate caps for the entire amounts on our Flamingo and The Hamilton construction loans.

These interest rate caps provide protection if one month LIBOR exceeds 3.0% during the initial term of the loans.

During the quarter ended June 30, 2022, we paid an upfront premium of $0.4 million for an interest rate cap on our Oak Shore construction loan.

The interest rate cap provides protection if one month term SOFR exceeds 3.5% during the initial term of the loan.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements