3 unchanged sentences
(In thousands, except share data)
−Removed: June 30, 2023
+Added: September 30, 2023
December 31, 2022
22 unchanged sentences
Commitments and contingencies (Note 3)
−Removed: Equity ( 510,587,500 shares authorized at both June 30, 2023 and December 31, 2022):
−Removed: Common Stock, $ 0.01 par value, 143,733,654 and 146,524,941 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
+Added: Equity ( 510,587,500 shares authorized at both September 30, 2023 and December 31, 2022):
+Added: Common Stock, $ 0.01 par value, 141,994,719 and 146,524,941 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
Additional paid-in capital
8 unchanged sentences
(In thousands, except per share data)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Rental and other property revenues
34 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
−Removed: For the Three Months Ended June 30, 2023 and 2022
+Added: For the Three Months Ended September 30, 2023 and 2022
(In thousands, except per share data)
2 unchanged sentences
Retained Earnings (Accumulated Deficit)
−Removed: Balances at March 31, 2022
+Added: Balances at June 30, 2022
Net income (loss)
1 unchanged sentence
Share-based compensation expense
+Added: Contributions from noncontrolling interests in consolidated real estate partnerships
Distributions to noncontrolling interests in consolidated real estate partnerships
1 unchanged sentence
Common stock repurchased
+Added: Cash dividends
+Added: Balances at September 30, 2022
Balances at June 30, 2023
−Removed: Balances at March 31, 2023
Net income (loss)
4 unchanged sentences
Common stock repurchased
−Removed: Balances at June 30, 2023
+Added: Other common stock issuances
+Added: Balances at September 30, 2023
See notes to condensed consolidated financial statements.
1 unchanged sentence
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
−Removed: For the Six Months Ended June 30, 2023 and 2022
+Added: For the Nine Months Ended September 30, 2023 and 2022
(In thousands, except per share data)
6 unchanged sentences
Share-based compensation expense
−Removed: Distributions to noncontrolling interests in consolidated real estate partnerships
Contributions from noncontrolling interests in consolidated real estate partnerships
+Added: Distributions to noncontrolling interests in consolidated real estate partnerships
Purchase of noncontrolling interests in consolidated real estate partnerships
2 unchanged sentences
Redemption of redeemable noncontrolling interests in consolidated real estate partnerships
−Removed: Balances at June 30, 2022
+Added: Cash dividends
+Added: Balances at September 30, 2022
Balances at December 31, 2022
6 unchanged sentences
Other common stock issuances
−Removed: Balances at June 30, 2023
+Added: Balances at September 30, 2023
See notes to condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:
24 unchanged sentences
Investment in IQHQ
−Removed: Investment in unconsolidated real estate partnerships
+Added: Redemption of IQHQ investment
Distributions received from unconsolidated real estate partnerships
+Added: Investment in unconsolidated real estate partnerships
+Added: Purchase of treasury bill
Other investing activities
6 unchanged sentences
Principal repayments on non-recourse property debt
+Added: Principal repayments on construction loans
Principal repayments on Notes Payable to AIR
−Removed: Proceeds from interest rate option
+Added: Purchase of interest rate options
+Added: Proceeds from interest rate options
Payments on finance leases
1 unchanged sentence
Common stock repurchased
−Removed: Redemption of noncontrolling interest in real estate partnership
+Added: Dividends paid on common stock
+Added: Redemption of redeemable noncontrolling interests
Distributions to redeemable noncontrolling interests
3 unchanged sentences
Redemption of OP units
−Removed: Redemption of redeemable noncontrolling interests
+Added: Redemption of noncontrolling interest in real estate partnership
Other financing activities
6 unchanged sentences
END OF PERIOD
−Removed: (1) Accrued capital expenditures wer e $ 62.8 million and $ 29.1 m illion as of June 30, 2023 and 2022, respectively.
+Added: (1) Accrued capital expenditures wer e $ 54.3 mil lion and $ 31.4 m illion as of September 30, 2023 and 2022, respectively.
See notes to condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: June 30, 2023
+Added: September 30, 2023
December 31, 2022
34 unchanged sentences
(In thousands, except per unit data)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Rental and other property revenues
32 unchanged sentences
CONDENSED CONSOLIDATED S TATEMENTS OF PARTNERS’
−Removed: For the Three Months Ended June 30, 2023 and 2022
+Added: For the Three Months Ended September 30, 2023 and 2022
(In thousands)
8 unchanged sentences
Partners’
−Removed: Balances at March 31, 2022
+Added: Balances at June 30, 2022
Net income (loss)
1 unchanged sentence
Share-based compensation expense
+Added: Contributions from noncontrolling interests in consolidated real estate partnerships
Distributions to noncontrolling interests in consolidated real estate partnerships
1 unchanged sentence
Repurchases of OP Units held by Aimco
+Added: Cash dividends
+Added: Balances at September 30, 2022
Balances at June 30, 2023
−Removed: Balances at March 31, 2023
Net income (loss)
4 unchanged sentences
Repurchases of OP Units held by Aimco
−Removed: Balances at June 30, 2023
+Added: Balances at September 30, 2023
See notes to condensed consolidated financial statements.
1 unchanged sentence
CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’
−Removed: For the Six Months Ended June 30, 2023 and 2022
+Added: For the Nine Months Ended September 30, 2023 and 2022
(In thousands)
12 unchanged sentences
Share-based compensation expense
−Removed: Distributions to noncontrolling interests in consolidated real estate partnerships
Contributions from noncontrolling interests in consolidated real estate partnerships
+Added: Distributions to noncontrolling interests in consolidated real estate partnerships
Purchase of noncontrolling interests in consolidated real estate partnerships
2 unchanged sentences
Redemption of redeemable noncontrolling interests in consolidated real estate partnerships
−Removed: Balances at June 30, 2022
+Added: Cash dividends
+Added: Balances at September 30, 2022
Balances at December 31, 2022
6 unchanged sentences
Other OP Unit issuances
−Removed: Balances at June 30, 2023
+Added: Balances at September 30, 2023
See notes to condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:
24 unchanged sentences
Investment in IQHQ
−Removed: Investment in unconsolidated real estate partnerships
+Added: Redemption of IQHQ investment
Distributions received from unconsolidated real estate partnerships
+Added: Investment in unconsolidated real estate partnerships
+Added: Purchase of treasury bill
Other investing activities
6 unchanged sentences
Principal repayments on non-recourse property debt
+Added: Principal repayments on construction loans
Principal repayments on Notes Payable to AIR
−Removed: Proceeds from interest rate option
+Added: Purchase of interest rate options
+Added: Proceeds from interest rate options
Payments on finance leases
1 unchanged sentence
Common stock repurchased
−Removed: Redemption of noncontrolling interest in real estate partnership
+Added: Dividends paid on common stock
+Added: Redemption of redeemable noncontrolling interests
Distributions to redeemable noncontrolling interests
3 unchanged sentences
Redemption of OP units
−Removed: Redemption of redeemable noncontrolling interests
+Added: Redemption of noncontrolling interest in real estate partnership
Other financing activities
6 unchanged sentences
END OF PERIOD
−Removed: (1) Accrued capital expenditures we re $ 62.8 million and $ 29.1 million as of June 30, 2023 and 2022, respectively .
+Added: (1) Accrued capital expenditures we re $ 54.3 m illion and $ 31.4 million as of September 30, 2023 and 2022, respectively .
See notes to condensed consolidated financial statements.
2 unchanged sentences
NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS
−Removed: June 30, 2023
+Added: September 30, 2023
Note 1 —
9 unchanged sentences
refer to Aimco, Aimco Operating Partnership, and their consolidated subsidiaries, collectively.
−Removed: As of June 30, 2023, Aimco owned 92.5 % of the legal interest in the common partnership units of Aimco Operating Partnership and 94.9 % of the economic interest in Aimco Operating Partnership.
+Added: As of September 30, 2023, Aimco owned 92.4 % of the legal interest in the common partnership units of Aimco Operating Partnership and 94.8 % of the economic interest in Aimco Operating Partnership.
The remaining 7.6 % legal interest is owned by limited partners.
20 unchanged sentences
In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation have been included.
−Removed: Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
+Added: Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
The Condensed Consolidated Balance Sheets of Aimco and Aimco Operating Partnership as of December 31, 2022 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.
14 unchanged sentences
Aimco Operating Partnership’s income or loss is allocated to the holders of OP Units, other than Aimco, based on the weighted-average number of OP Units (including Aimco) outstanding during the period.
−Removed: For the periods ended June 30, 2023 and 2022 , the holders of OP Units had a weighted-average economic ownership interest in Aimco Operating Partnership of approximately 5.1 % , and 5.0 %, respectively.
+Added: For the periods ended September 30, 2023 and 2022, the holders of OP Units had a weighted-average economic ownership interest in Aimco Operating Partnership of approximately 5.1 % , and 5.0 %, respectively.
Substantially all of the assets and liabilities of Aimco are held by Ai mco Operating Partnership.
2 unchanged sentences
If a consolidated real estate partnership includes redemption rights that are not within our control, the noncontrolling interest is included as temporary equity.
−Removed: Redeemable noncontrolling interests in consolidated real estate partnerships as of June 30, 2023, consists of the following:
+Added: Redeemable noncontrolling interests in consolidated real estate partnerships as of September 30, 2023, consists of the following:
(i) a $ 102.0 million preferred equity interest in an entity that owns a portfolio of operating apartment communities and (ii) equity interests in two separate consolidated joint ventures that are actively developing residential apartment communities.
Capital contributions, distributions, and net income attributable to redeemable noncontrolling interests in consolidated real estate partnerships are determined in accordance with the relevant partnership agreements.
−Removed: These interests are presented as Redeemable noncontrolling interests in consolidated real estate partnerships in our Condensed Consolidated Balance Sheet as of June 30, 2023.
−Removed: The following table shows changes in our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2022 to June 30, 2023 (in thousands):
+Added: These interests are presented as Redeemable noncontrolling interests in consolidated real estate partnerships in our Condensed Consolidated Balance Sheets as of September 30, 2023.
+Added: The following table shows changes in our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2022 to September 30, 2023 (in thousands):
Balance at December 31, 2022
1 unchanged sentence
Distributions
−Removed: Balance at June 30, 2023
+Added: Balance at September 30, 2023
Mezzanine Investment
2 unchanged sentences
The loan bears interest at a 10 % annual rate, accruing if not paid from property operations.
−Removed: Ownership of the subsidiaries that originated and hold the Mezzanine Investment was retained by AIR following the Separation.
−Removed: The Separation Agreement with AIR provides for AIR to transfer ownership of the subsidiaries that originated and hold the Mezzanine Investment, 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.
+Added: Legal ownership of the subsidiaries that originated and hold the Mezzanine Investment was retained by AIR following the Separation.
+Added: The Separation Agreement with AIR provides for AIR to transfer ownership of the subsidiaries that originated and hold the Mezzanine Investment, and a related equity option to acquire a 30 % interest in the partnership owning Parkmerced Apartments.
At the time of Separation and as of the date of this filing, legal title of these subsidiaries had not yet transferred to us.
5 unchanged sentences
An investment is considered impaired if we determine that its fair value is less than the net carrying value of the investment on an other-than-temporary basis.
−Removed: Cash flow projections for the investments consider property level factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.
+Added: Cash flow projections for the investment consider property level factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.
We consider various qualitative factors to determine if a decrease in the value of our investment is other-than-temporary.
5 unchanged sentences
The purchaser pre-paid $ 4 million of interest at the time of closing.
−Removed: So long as the purchaser's option remains unexercised, Aimco receives a first priority return from any payments made to service or pay down the Mezzanine Investment equal to $ 134 million plus no less than a 19 % annualized return as well as 80 % of any residual payments after the purchaser receives a 10 % annualized retu rn on its subordinate investment.
+Added: So long as the purchaser's option remains unexercised, Aimco receives a first priority return from any payments made to service or pay down the Mezzanine Investment equal to $ 134 million plus no less than a 19 % annualized return as well as 80 % of any residual payments after the purchaser receives a 10 % annualized return on its subordinate investment.
Additionally, Aimco is responsible for the servicing and administration of the Mezzanine Investment.
Because Aimco receives first priority and a higher annualized return than the purchaser, the sale and transfer of the financial interest does not qualify for sale accounting in accordance with GAAP.
−Removed: Therefore, the portion of the Mezzanine Investment that was sold, which has a carrying amount of $ 31.5 million, remains in Mezzanine investment in our Condensed Consolidated Balance Sheet .
−Removed: We have also recorded the cash received from the purchaser as a liability, which is included in Mezzanine investment - participation sold in our Condensed Consolidated Balance Sheet .
−Removed: Transaction costs have been deferred and presented as a direct reduction from the related liability in Mezzanine investment - participation sold in our Condensed Consolidated Balance Sheet .
+Added: Therefore, the portion of the Mezzanine Investment that was sold, which has a carrying amount of $ 31.5 million, remains in Mezzanine investment in our Condensed Consolidated Balance Sheets .
+Added: We have also recorded the cash received from the purchaser as a liability, which is included in Mezzanine investment - participation sold in our Condensed Consolidated Balance Sheets .
+Added: Transaction costs have been deferred and presented as a direct reduction from the related liability in Mezzanine investment - participation sold in our Condensed Consolidated Balance Sheets .
The cash flows associated with the Mezzanine investment - participation sold have been included in Cash Flows from Financing Activities in the Condensed Consolidated Statements of Cash Flows.
5 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.
−Removed: For the three and six months ended June 30, 2023, we had consolidated net losses subject to tax of $ 2.5 million and $ 7.4 million, respectively.
−Removed: 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.
−Removed: For the three months ended June 30, 2023, we recognized an income tax benefit of $ 0.4 million, compared to income tax expense of $ 46.0 million during the same period in 2022.
−Removed: The change is due primarily to GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022.
−Removed: For the six months ended June 30, 2023, we recognized an income tax benefit of $ 4.6 million compared to income tax expense of $ 41.9 million during the same period in 2022 .
−Removed: The change is primarily due to GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022, as well as a change in the first quarter of 2023 to the effective state tax rate expected to apply to the reversal of deferred taxes.
+Added: For the three and nine months ended September 30, 2023, we had consolidated net losses subject to tax of $ 5.0 million and $ 12.4 million, respectively.
+Added: For the three and nine months ended September 30, 2022, we had consolidated net losses of $ 75.6 million and net income of $ 91.0 million subject to tax, respectively.
+Added: For the three months ended September 30, 2023, we recognized an income tax benefit of $ 6.2 million, compared to income tax benefit of $ 17.6 million during the same period in 2022.
+Added: The change is due primarily to the income tax benefit associated with the depreciation taken related to the termination of four leases of four properties in the third quarter of 2022, as well as a change in estimate associated with finalizing the 2022 tax return in the third quarter of 2023.
+Added: For the nine months ended September 30, 2023, we recognized an income tax benefit of $ 10.8 million compared to income tax expense of $ 24.3 million during the same period in 2022.
+Added: The change is primarily due to the income tax benefit associated with the lease modification income recognized in the second quarter of 2022, as well as a change in the first quarter of 2023 to the effective state tax rate expected to apply to the reversal of deferred taxes and a change in estimate associated with finalizing the 2022 tax return in the third quarter of 2023.
Use of Estimates
8 unchanged sentences
Other Assets, net
−Removed: Other assets were comprised of the following amounts (in thousands):
−Removed: June 30, 2023
+Added: Other assets were comprised of the following amounts as of September 30, 2023 and December 31, 2022 (in thousands):
+Added: September 30, 2023
December 31, 2022
Other investments
+Added: Treasury bill
Deferred costs, deposits, and other
2 unchanged sentences
Corporate fixed assets
−Removed: Accounts receivable, net of allowances of $ 346 and $ 1,206 as of June 30, 2023 and December 31, 2022, respectively
+Added: Accounts receivable, net of allowances of $ 334 and $ 1,206 as of September 30, 2023 and December 31, 2022, respectively
Deferred tax assets
9 unchanged sentences
Deferral of the Sunset Date of Topic 848" .
−Removed: We are transitioning to the Secured Overnight Financing Rate ("SOFR") effective July 1, 2023.
+Added: We transitioned to the Secured Overnight Financing Rate ("SOFR") effective July 1, 2023.
There is not a material impact on our consolidated financial statements as a result of this transition.
2 unchanged sentences
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.
−Removed: We expect to fund most of these commitments over the next 24 months.
−Removed: As of June 30, 2023, we had entered into construction-related contracts for $ 165.5 million, with $ 229.0 million undrawn on our construction loans.
−Removed: As of June 30, 2023, we have remaining commitments of $ 3.2 million related to our unconsolidated joint ventures, which we expect to fund over the next twelve months.
+Added: We expect to fun d most of these commitments over the next 24 months.
+Added: As of September 30, 2023, we had remaining commitments for construction-related contracts of $ 120.2 million, with $ 173.8 million undrawn on our construction loans.
+Added: As of September 30, 2023, we have remaining commitments of $ 3.1 million related to our unconsolidated joint ventures, which we expect to fund over the next twelve months.
In addition, we have remaining commitments of $ 2.1 million related to our investments in property technology funds invested in entities that develop technology related to the real estate industry.
12 unchanged sentences
OP Unit equivalents also include unvested long-term incentive partnership units.
−Removed: The Common Stock and OP Unit equivalents were included in the computation of diluted earnings per share and unit for the three and six months ended June 30, 2022, because the effect of their inclusion was dilutive.
−Removed: However, the Common Stock and OP Unit equivalents were not included in the computation of diluted earnings per share and unit for the three and six months ended June 30, 2023, because the effect of their inclusion would be antidilutive.
−Removed: As of June 30, 2023, the Common Stock and OP Unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 3.7 million and 7.9 million, respectively.
+Added: The Common Stock and OP Unit equivalents were included in the computation of diluted earnings per share and unit for the three and nine months ended September 30, 2022, because the effect of their inclusion was dilutive.
+Added: However, the Common Stock and OP Unit equivalents were not included in the computation of diluted earnings per share and unit for the three and nine months ended September 30, 2023, because the effect of their inclusion would be antidilutive.
+Added: As of September 30, 2023, the Common Stock and OP Unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 3.7 million and 8.0 million, respectively.
Aimco's time-based restricted stock awards receive non-forfeitable dividends similar to shares of Common Stock and OP Units prior to vesting, and our market-based long-term incentive partnership units receive non-forfeitable distributions based on specified percentages of the distributions paid to OP Units prior to vesting and conversion.
The unvested restricted shares and units related to these awards are participating securities.
−Removed: 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.
−Removed: Participating securities were included in the computation of diluted earnings per share and unit for the three and six months ended June 30, 2022, because the effect of their inclusion was dilutive.
−Removed: However, participating securities are not included in the computation of diluted earnings per share and unit for the three and six months ended June 30, 2023, because the effect of their inclusion would be antidilutive.
−Removed: As of June 30, 2023, participating securities that could potentially dilute basic earnings per share or unit in future periods total ed 2.5 million.
−Removed: 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, 2023 and 2022, are as follows (in thousands, except per share and per unit data):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: We include the effect of participating securities in basic and diluted earnings pe r 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.
+Added: Participating securities were included in the computation of diluted earnings per share and unit for the three and nine months ended September 30, 2022, because the effect of their inclusion was dilutive.
+Added: However, participating securities are not included in the computation of diluted earnings per share and unit for the three and nine months ended September 30, 2023, because the effect of their inclusion would be antidilutive.
+Added: As of September 30, 2023, participating securities that could potentially dilute basic earnings per share or unit in future periods totaled 2.5 million.
+Added: Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings per share and per unit for the three and nine months ended September 30, 2023 and 2022, are as follows (in thousands, except per share and per unit data):
+Added: Three Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Earnings per share
22 unchanged sentences
From time to time we purchase interest rate swaps, caps, and other instruments to provide protection against increases in interest rates on our variable rate debt.
−Removed: As of June 30, 2023, we held interest rate swaps and caps with $ 473.2 million notional value.
+Added: As of September 30, 2023, we held interest rate caps with $ 627.4 million notional value.
These instruments were acquired for $ 5.8 million, and the fair value of these instruments is noted in the table below.
−Removed: During the three months ended June 30, 2023, we monetized the $ 1.5 billion notional amount interest rate swaption, purchased in conjunction with the Mezzanine Investment to protect against future interest rate increases, for gross proceeds o f $ 54.2 million.
−Removed: We invested the $ 53.1 million net proceeds in a three-month treasury instrument, reflected in Cash and cash equivalents in our Condensed Consolidated Balance Sheet, that had a carrying value of $ 53.6 million as of June 30, 2023, which also approximated its fair value.
+Added: During th e nine months ended September 30, 2023, we monetized the $ 1.5 billion notional amount interest rate swaption, purchased in conjunction with the Mezzanine Investment to protect against future interest rate increases, for gross proceeds of $ 54.2 million.
+Added: Proceeds from the monetization are currently invested in a short-term treasury bill, which is included in Other assets, net in our Condensed Consolidated Balance Sheets.
+Added: This instrument has a carrying value and an approximate fair value of $ 54.3 million as of September 30, 2023.
On a recurring basis, we measure at fair value our interest rate options.
2 unchanged sentences
Changes in fair value are reflected as a non-cash transaction in adjustments to arrive at cash flows from operations, any upfront premium is reflected in Purchase of interest rate options , and any proceeds are reflected in Proceeds from interest rate options in our Condensed Consolidated Statements of Cash Flows .
−Removed: As of June 30, 2023 and December 31, 2022, we have an investment in stock of $ 3.4 million and $ 1.2 million, respectively, classified within Level 1 of the GAAP fair value hierarchy.
−Removed: In addition, as of June 30, 2023 and December 31, 2022, we have investments in property technology funds of $ 2.4 million and $ 3.1 million, respectively, in entities that develop technology related to the real estate industry.
+Added: As of September 30, 2023 and December 31, 2022, we have investments in stock of $ 2.3 million and $ 1.2 million, respectively, classified within Level 1 of the GAAP fair value hierarchy.
+Added: In addition, as of September 30, 2023 and December 31, 2022, we have investments in property technology funds of $ 2.5 million and $ 3.1 million, respectively, in entities that develop technology related to the real estate industry.
These investments are measured at net asset value (“NAV”) as a practical expedient.
−Removed: The following table summarizes the fair value for our interest rate options and our investments in real estate technology funds as of June 30, 2023 , and December 31, 2022 (in thousands):
−Removed: As of June 30, 2023
+Added: The following table summarizes the fair value for our interest rate options, investments in stock, our investments in real estate technology funds, and our investment in a treasury bill as of September 30, 2023 and December 31, 2022 (in thousands):
+Added: As of September 30, 2023
As of December 31, 2022
Interest rate options
−Removed: Investment in stock
+Added: Investments in stock
Investments in real estate technology funds (1)
+Added: Investment in treasury bill
(1) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy.
Fair Value Disclosures
−Removed: 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, 2023, and December 31, 2022, due to their relatively short-term nature and high probability of realization.
+Added: 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 September 30, 2023, and December 31, 2022, due to their relatively short-term nature and high probability of realization.
We estimate the fair value of our debt 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 within Level 2 of the GAAP valuation hierarchy based on the significance of certain of the unobservable inputs used to estimate their fair value.
−Removed: The following table summarizes the carrying value and fair value of our non-recourse property debt, and construction loans as of June 30, 2023, and December 31, 2022 (in thousands):
−Removed: As of June 30, 2023
+Added: The following table summarizes the carrying value and fair value of our non-recourse property debt, and construction loans as of September 30, 2023 and December 31, 2022 (in thousands):
+Added: As of September 30, 2023
As of December 31, 2022
14 unchanged sentences
Substantially all of our assets and liabilities are those of Aimco Operating Partnership.
−Removed: Aimco Operating Partnership is the primary beneficiary, and therefore consolidates its five VIEs that own interests in real estate.
+Added: Aimco Operating Partnership is the primary beneficiary of, and therefore consolidates, its five VIEs that own interests in real estate.
Assets of our consolidated VIEs must first be used to settle the liabilities of those VIEs.
3 unchanged sentences
Our maximum exposure to loss because of our involvement with the unconsolidated VIEs is limited to the carrying value of their assets.
−Removed: The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of June 30, 2023, and December 31, 2022 (in thousands, except for VIE count):
−Removed: As of June 30, 2023
+Added: The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of September 30, 2023 and December 31, 2022 (in thousands, except for VIE count):
+Added: As of September 30, 2023
As of December 31, 2022
20 unchanged sentences
We receive variable payments from our residents and commercial tenants primarily for utility reimbursements and other services.
−Removed: For the three and six months ended June 30, 2023 and 2022, our total lease income was comprised of the following amounts for all residential and commercial property leases (in thousands):
+Added: For the three and nine months ended September 30, 2023 and 2022, our total lease income was comprised of the following amounts for all residential and commercial property leases (in thousands):
Aimco as Lessee
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Fixed lease income
3 unchanged sentences
We are lessee to finance leases for the land underlying the development sites at Upton Place, Strathmore Square, and Oak Shore.
−Removed: As of June 30, 2023 and December 31, 2022, our finance leases had weighted-average remaining terms of 93.8 years and 94.2 years, respectively, and weighted-average discount rates of 6.1 % at both period ends.
−Removed: For the three and six months ended June 30, 2023, amortization related to our finance leases was $ 0.0 million for both periods, net of amounts capitalized, compared to $ 3.4 million and $ 6.7 million, respectively, for the three and six months ended June 30, 2022.
−Removed: For the three and six months ended June 30, 2023, we capitalized $ 2.1 million and $ 4.2 million, respectively, of lease costs associated with active development and redevelopment projects on certain of the underlying property and ground lease assets, compared to $ 1.8 million and $ 4.8 million, respectively, for the three and six months ended June 30, 2022 .
+Added: As of September 30, 2023 and December 31, 2022, our finance leases had weighted-average remaining terms of 93.6 years and 94.2 years, respectively, and weighted-average discount rates of 6.1 % at each period end, respectively.
+Added: For the three and nine months ended September 30, 2023, amortization related to our finance leases was $ 0.0 million for each period, respectively, net of amounts capitalized, compared to $ 0.0 million and $ 6.7 million, respectively, for the three and nine months ended September 30, 2022.
+Added: For the three and nine months ended September 30, 2023, we capitalized $ 2.1 million and $ 6.3 million, respectively, of lease costs associated with active development and redevelopment projects on certain of the underlying property and ground lease assets, compared to $ 1.7 million and $ 6.5 million, respectively, for the three and nine months ended September 30, 2022.
Operating Lease Arrangements
1 unchanged sentence
Substantially all of the payments under our office leases are fixed.
−Removed: As of June 30, 2023 and December 31, 2022, our operating leases had weighted-average remaining terms of 5.6 years and 6.3 years, respectively, and weighted-average discount rates of 3.3 % , and 3.4 %, re spectively.
+Added: As of September 30, 2023 and December 31, 2022, our operating leases had weighted-average remaining terms of 5.4 years and 6.3 years, respectively, and weighted-average discount rates of 3.3 % , and 3.4 %, respectively.
We record operating lease expense on a straight-line basis over the lease term.
−Removed: Total operating lease expense for the three and six months ended June 30, 2023 was $ 0.4 million and $ 0.8 million, respectively, compared to $ 0.2 million and $ 0.3 million, respectively, for the three and six months ended June 30, 2022 .
−Removed: As of June 30, 2023 and December 31, 2022, operating lease right-of-use lease assets of $ 6.9 million and $ 6.7 million, respectively, are included in Other assets, net in our Condensed Consolidated Balance Sheets .
−Removed: As of June 30, 2023 and December 31, 2022, operating lease liabilities of $ 12.7 million and $ 12.8 million, respectively, are included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets .
+Added: Total operating lease expense for the three and nine months ended September 30, 2023 was $ 0.4 million and $ 1.1 million, respectively, compared to $ 0.2 million and $ 0.5 million, respectively, for the three and nine months ended September 30, 2022.
+Added: As of September 30, 2023 and December 31, 2022, operating lease right-of-use lease assets of $ 6.6 million and $ 6.7 million, respectively, are included in Other assets, net in our Condensed Consolidated Balance Sheets .
+Added: As of September 30, 2023 and December 31, 2022, operating lease liabilities of $ 12.1 million and $ 12.8 million, respectively, are included in Accrued 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.
5 unchanged sentences
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 .
−Removed: For the three and six months ended June 30, 2023, we recognized sublease income of $ 0.4 million and $ 0.7 million, respectively, compared to $ 0.4 million and $ 0.7 million, respectively, for the three and six months ended June 30, 2022.
+Added: For the three and nine months ended September 30, 2023, we recognized sublease income of $ 0.4 million and $ 1.1 million, respectively, compared to $ 0.4 million and $ 1.1 million, respectively, for the three and nine months ended September 30, 2022.
Annual Future Minimum Lease Payments
12 unchanged sentences
Our Development and Redevelopment segment consists of properties that are under construction or have not achieved stabilization, as well as land held for development.
−Removed: As of June 30, 2023, our Development and Redevelopment segment consists of 12 properties:
+Added: As of September 30, 2023, our Development and Redevelopment segment consists of 12 properties:
three residential apartment communities with 1,185 apartment homes, of which 276 have been completed and an additional 909 are planned, a single family rental community with 16 planned homes plus eight accessory dwelling units, which we are actively developing or redeveloping;
4 unchanged sentences
Prior period segment information has been recast based upon our current segment population, and is consistent with how our chief operating decision maker ("CODM") evaluates the business.
−Removed: The recast conforms with our reportable segment classification as of June 30, 2023.
+Added: The recast conforms with our reportable segment classification as of September 30, 2023.
Our Other segment consists of properties currently owned that are not included in our Development and Redevelopment or Operating segments.
6 unchanged sentences
excluding property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance.
−Removed: 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, 2023 and 2022 (in thousands):
+Added: The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the three months ended September 30, 2023 and 2022 (in thousands):
Development and Redevelopment
2 unchanged sentences
Corporate and Amounts Not Allocated to Segments (2)
−Removed: Three Months Ended June 30, 2023
+Added: Three Months Ended September 30, 2023
Rental and other property revenues
12 unchanged sentences
Corporate and Amounts Not Allocated to Segments (2)
−Removed: Three Months Ended June 30, 2022
+Added: Three Months Ended September 30, 2022
Rental and other property revenues
8 unchanged sentences
Income (loss) before income tax
−Removed: 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, 2023 and 2022 (in thousands):
+Added: The following tables present the results of operations of consolidated properties with our segments reported on a proportionate basis for the nine months ended September 30, 2023 and 2022 (in thousands):
Development and Redevelopment
2 unchanged sentences
Corporate and Amounts Not Allocated to Segments (2)
−Removed: Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2023
Rental and other property revenues
12 unchanged sentences
Corporate and Amounts Not Allocated to Segments (2)
−Removed: Six Months Ended June 30, 2022
+Added: Nine Months Ended September 30, 2022
Rental and other property revenues
14 unchanged sentences
(4) Other items included in Income before income tax benefit consist primarily of lease modification income, gain on dispositions of real estate, interest expense, mezzanine investment income (loss), net realized and unrealized gains (losses) on interest rate options, and realized and unrealized gains (losses) on equity investments.
−Removed: Net real estate and non-recourse property debt, net, of our segments as of June 30, 2023 and December 31, 2022, were as follows (in thousands):
+Added: Net real estate and non-recourse property debt, net, of our segments as of September 30, 2023 and December 31, 2022, were as follows (in thousands):
Development and Redevelopment
−Removed: As of June 30, 2023:
+Added: As of September 30, 2023
Buildings and improvements
10 unchanged sentences
Non-recourse property debt and construction loans, net
−Removed: In addition to the amounts disclosed in the tables above, as of June 30, 2023 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $ 109.6 million and $ 116.6 million, respectively, and as of December 31, 2022, aggregated to $ 110.3 million and $ 114.6 million, respectively.
−Removed: As of June 30, 2023 and December 31, 2022, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.
+Added: In addition to the amounts disclosed in the tables above, as of September 30, 2023 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $ 109.3 million and $ 117.7 million, respectively, and as of December 31, 2022, aggregated to $ 110.3 million and $ 114.6 million, respectively.
+Added: As of September 30, 2023 and December 31, 2022, right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.
MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Platform, consisting of a cohesive, talented, and tenured team with diverse real estate industry experience combined with a disciplined and proven investment process;
−Removed: Diversified portfolio, consisting of in-process value-add investments, a deep pipeline, which includes approximately 14 million square feet of potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments;
+Added: Diversified portfolio, consisting of in-process value-add investments, a pipeline of 14 million square feet of potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments;
Capital redeployment plan of prudent recycling of capital, reallocating our equity to higher returning investments.
11 unchanged sentences
We have reduced our allocation to these investments and plan to continue to significantly reduce our allocation over time.
−Removed: We have policies in place that support our stated strategy, guide our investment allocations, and manage risk, including to hold at all times a sizeable portion of our net equity in stabilized cash-flowing assets and to require cash or committed credit necessary for completion of development and redevelopment projects prior to their commencement.
+Added: We have policies in place that support our stated strategy, guide our investment allocations, and manage risk, including to hold at all times a sizable portion of our net equity in stabilized cash-flowing assets and to require cash or committed credit necessary for completion of development and redevelopment projects prior to their commencement.
Given our stated strategy, it is expected that at any point in time the value-creation process will be ongoing at numerous of our investments.
11 unchanged sentences
Generally, we seek direct investment opportunities in locations where barriers to entry are high, target customers can be clearly defined and where we have a comparative advantage over others in the market.
+Added: From time to time, we may choose to monetize certain pipeline assets prior to vertical construction in an effort to maximize value and risk adjusted returns.
+Added: In any time period, the amount of Aimco capital that is allocated to development activities may vary based on market conditions and other factors.
Owning a portfolio of stabilized core and core plus real estate
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("IQHQ"), a privately-held life sciences real estate development company, and in property technology funds consisting of entities that develop technology related to the real estate industry.
−Removed: In June 2023, we made significant progress on our plan to reduce capital allocated to alternative investments through the partial sale of the Mezzanine Investment, as discussed further below.
+Added: We have made significant progress on our plan to reduce capital allocated to alternative investments through the partial sale of the Mezzanine Investment, as discussed further below.
Maintaining sufficient liquidity and utilizing safe financial leverage
5 unchanged sentences
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.
−Removed: The results from the execution of our business plan during the three and six months ended June 30, 2023 are further described below.
+Added: The results from the execution of our business plan during the three and nine months ended September 30, 2023 are further described below.
Financial Results and Recent Highlights
−Removed: For the three and six months ended June 30, 2023, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.02) and ($0.09), respectively, compared to net income per share of $1.57 and $1.62, respectively, for the same periods in 2022 due primarily to the second quarter 2022 recognition of income resulting from the agreement to terminate the leased property agreements with AIR and gains in the same period related to the sale of an apartment community.
−Removed: For the three months ended June 30, 2023, revenue and net operating income from our Stabilized Operating Properties were up 9.5% and 9.8%, respectively, year over year, with average monthly revenue per apartment home of $2,291, up $230 year over year.
−Removed: For the six months ended June 30, 2023, revenue and net operating income from our Stabilized Operating Properties were up 10.4% and 11.4%, respectively, year over year, with average monthly revenue per apartment home of $2,259, up $234 year over year.
−Removed: During the three months ended June 30, 2023, we closed on the partial sale of the Parkmerced mezzanine loan, making significant progress on our planned reduction of capital allocated to alternative investments.
−Removed: In total, we have monetized $91.5 million of our Parkmerced investments and, subject to closing the remaining investment, may realize additional proceeds of approximately $156 million.
−Removed: During the three months ended June 30, 2023, we repaid a $60 million floating interest rate land loan when it became prepayable at par reducing our weighted average cost of debt for our developments and land holdings, at the time of payoff, by approximately 90 basis points.
+Added: For the three and nine months ended September 30, 2023, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.02) and ($0.10), respectively, compared to net income per share of $0.19 and $1.81, respectively, for the same periods in 2022 due primarily to lower real estate transaction proceeds and reduced tax benefit.
+Added: For the three months ended September 30, 2023, revenue and net operating income from our Stabilized Operating Properties were up 6.4% and 7.6%, respectively, year over year, with average monthly revenue per apartment home of $2,358, up $158 year over year.
+Added: For the nine months ended September 30, 2023, revenue and net operating income from our Stabilized Operating Properties were up 9.0% and 10.0%, respectively, year over year, with average monthly revenue per apartment home of $2,292, up $209 year over year.
+Added: As of September 30, 2023, we had completed construction and delivered The Hamilton, a 276-apartment home property in Miami, Florida, and The Benson Hotel and Faculty Club, a 106-key boutique hotel on the Anschutz Medical Campus in Aurora, Colorado.
+Added: We expect to deliver 234 additional units at Upton Place in Washington, D.C.
+Added: and the initial homes at Oak Shore in Corte Madera, California, by the end of 2023.
+Added: Aimco is under contract to sell our 80% stake in the Parkmerced mezzanine loan for $134.0 million plus accrued interest.
+Added: In June, at the time of closing on the sale of a 20% non-controlling position, the purchaser pre-paid $4.0 million of interest to Aimco and is expected to pay another $7.4 million prior to year end.
Value Add, Opportunistic & Alternative Investments
6 unchanged sentences
markets, in varying phases of construction and lease-up.
−Removed: These projects remain on track, as measured by budget, lease-up metrics, and current market valuations.
+Added: These projects remain on track, as measured by construction budget and lease-up metrics.
Additionally, we have a pipeline of future value-add opportunities totaling approximately 14 million gross square feet of development in our target markets of Southeast Florida, the Washington D.C.
Metro, and Colorado's Front Range.
−Removed: During the three and six months ended June 30, 2023, we invested $81.1 million and $145.9 million, respectively, in development and redevelopment activities.
+Added: During the three and nine months ended September 30, 2023, we invested $74.4 million and $220.4 million, respectively, in development and redevelopment activities.
Updates include:
Construction and repositioning of The Hamilton, a 276-unit bayfront apartment community in Miami, Florida, is now complete.
−Removed: Demand for rental housing in Southeast Florida remains robust, especially for unique waterfront properties, and the property was 95% leased or pre-leased as of June 30, 2023, at rates more than 20% ahead of underwritten rents.
−Removed: Aimco now expects occupancy to stabilize in the third quarter, ahead of prior expectations.
+Added: Demand for rental housing in Southeast Florida remains robust, especially for unique waterfront properties, and the property was 97% leased as of September 30, 2023.
Construction is progressing on plan at the first phase of Strathmore Square in Bethesda, Maryland, which will contain 220 highly tailored apartment homes with initial delivery on track for the second half of 2024.
2 unchanged sentences
Construction continues on schedule and on budget at Upton Place in Northwest Washington, D.C.
−Removed: We plan to start pre-leasing Upton’s 689 apartment homes in July 2023 in anticipation of initial delivery in the fourth quarter of 2023.
−Removed: As of June 30, 2023, 80% of the project's 105,000 square feet of retail space has been leased and Aimco has received letters of intent from, or is in lease negotiations with, retailers on another 18%.
+Added: The initial delivery of 81 of Upton Place’s 689 apartment homes occurred in the fourth quarter of 2023.
+Added: As of September 30, 2023, 80% of the project's 105,000 square feet of retail space has been leased.
Construction is ongoing at Oak Shore, in Corte Madera, California, where 16 luxury single family rental homes and eight accessory dwelling units are being developed.
−Removed: We expect to deliver the first homes in the third quarter with pre-leasing efforts underway.
−Removed: Construction of the Benson Hotel and Faculty Club, a 106-key boutique hotel and event center, with 18,000 square feet of event space, located on the Anschutz Medical Campus in Aurora, Colorado is complete and open to guests.
−Removed: As the only ‘on campus’
−Removed: accommodations, The Benson is garnering strong interest from the many departments and offices located on the surrounding Anschutz Medical Campus, which includes The University of Colorado Medical School, UC Health Hospital, Children’s Hospital Colorado, The Rocky Mountain VA Medical Center and the burgeoning Fitzsimons Innovation Community.
−Removed: In the three months ended June 30, 2023, we invested $4.0 million into our future development pipeline projects located in Southeast Florida, the Washington D.C.
+Added: Construction has been completed on the initial homes and they are expected to be ready for occupancy in November 2023.
+Added: In the three months ended September 30, 2023, we invested $4.8 million into programming, design, documentation, and entitlement efforts related to select pipeline projects located in Southeast Florida, the Washington D.C.
Metro, and Colorado’s Front Range.
−Removed: Programming, design, documentation and entitlement efforts continue with projected unit counts and rentable square footage on track to meet or exceed initial projections.
−Removed: As part of our capital allocation strategy, we may choose to monetize certain of our pipeline assets prior to vertical construction in an effort to maximize value add and risk adjusted returns.
Alternative Investments
2 unchanged sentences
Updates for our alternative investments include:
−Removed: In June, Aimco made significant progress on its plan to reduce capital allocated to alternative investments through the partial sale of the Parkmerced mezzanine loan.
−Removed: Aimco closed a 20% non-controlling position for $33.5 million with the purchaser having the option to acquire the remaining 80% for an additional $134 million plus interest accruing at no less than 19% annually through May 2024.
−Removed: At the time of closing the purchaser pre-paid $4 million of interest to Aimco and is expected to pay another $7 million prior to year end.
−Removed: Investment Activity
−Removed: We are focused on growing the business, and delivering strong investment returns, through development and redevelopment activities, funded primarily through third-party capital.
−Removed: In the three months ended June 30, 2023, no new investments were made.
+Added: Aimco is under contract to sell our 80% stake in the Parkmerced mezzanine loan for $134.0 million plus accrued interest.
+Added: In June, at the time of closing on the sale of a 20% non-controlling position, the purchaser pre-paid $4.0 million of interest to Aimco and is expected to pay another $7.4 million prior to year end.
+Added: Investment and Disposition Activity
+Added: We are focused on growing the business and delivering strong investment returns, through the ownership of apartment properties as well as development and redevelopment activities, funded primarily through third-party capital.
+Added: In the three months ended September 30, 2023, no new investment or disposition activity occurred.
Operating Property Results
2 unchanged sentences
We also own a commercial office building that is part of an assemblage with an adjacent apartment building.
−Removed: Highlights for the three months ended June 30, 2023 include:
−Removed: Revenue for our Operating segment for the three months ended June 30, 2023, was $37.0 million, up 9.5% year over year, resulting from a $230 increase in average monthly revenue per apartment home to $2,291, partially offset with a 140-basis point decrease in Average Daily Occupancy to 96.2%.
−Removed: Expenses for our Operating segment for the three months ended June 30, 2023, were $11.5 million, up 8.8% year-over-year due primarily to higher real estate taxes and insurance.
−Removed: Net operating income for our Operating segment for the three months ended June 30, 2023 was $25.5 million, up 9.8% year-over-year.
−Removed: 1001 Brickell Bay Drive, a waterfront office building in Miami, Florida, is owned as part of a larger assemblage with substantial development potential.
−Removed: Following first quarter lease expirations, as of June 30, 2023, the building was 77% occupied.
+Added: Highlights for the three months ended September 30, 2023 include:
+Added: Revenue for our Operating segment for the three months ended September 30, 2023, was $37.7 million, up 6.4% year over year, resulting from a $158 increase in average monthly revenue per apartment home to $2,358, partially offset with a 75-basis point decrease in Average Daily Occupancy to 95.2%.
+Added: Expenses for our Operating segment for the three months ended September 30, 2023, were $10.7 million, up 3.5% year-over-year due primarily to higher insurance costs, during the quarter we received favorable real estate tax valuations in Chicago largely offsetting the impact of the prior unfavorable real estate tax valuation in Miami, which has been successfully appealed.
+Added: Net operating income for our Operating segment for the three months ended September 30, 2023 was $27.0 million, up 7.6% year-over-year.
Balance Sheet and Financing Activity
We are highly focused on maintaining a strong balance sheet, including having at all times ample liquidity.
−Removed: As of June 30, 2023, we had access to $342.4 million in liquidity, including $165.0 million of cash on hand, $27.4 million of restricted cash, and the capacity to borrow up to $150.0 million on our revolving credit facility.
+Added: As of September 30, 2023, we had access to $320.2 million in liquidity, including $95.7 million of cash on hand, a $54.3 million short term investment in a treasury bill, $20.2 million of restricted cash, and the capacity to borrow up to $150.0 million on our revolving credit facility.
Refer to the Liquidity and Capital Resources section for additional information regarding our leverage.
7 unchanged sentences
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 in Item 1.
−Removed: Results of Operations for the three and six months ended June 30, 2023 and 2022
−Removed: Net income attributable to Aimco common stockholders decreased by $242.7 million and $259.8 million, respectively, for the three and six months ended June 30, 2023, compared to the same period in 2022, as described more fully below.
+Added: Results of Operations for the three and nine months ended September 30, 2023 and 2022
+Added: Net income attributable to Aimco common stockholders decreased by $31.7 million and $291.5 million, respectively, for the three and nine months ended September 30, 2023, compared to the same period in 2022, as described more fully below.
Property Results
−Removed: As of June 30, 2023, our Development and Redevelopment segment included 12 properties, three of which were properties that were under construction and two of which were recently completed, while the remaining were land held for development.
+Added: As of September 30, 2023, our Development and Redevelopment segment included 12 properties, three of which were properties that were under construction and two of which were recently completed, while the remaining were land held for development.
Our Operating segment included 21 communities with 5,600 apartment homes, and our Other segment included 1001 Brickell Bay Drive, our only office building, and St.
2 unchanged sentences
Prior period segment information has been recast based upon our current segment population, and is consistent with how our CODM evaluates the business.
−Removed: The recast conforms with our reportable segment classification as of June 30, 2023.
+Added: The recast conforms with our reportable segment classification as of September 30, 2023.
We use proportionate property net operating income to assess the operating performance of our segments.
4 unchanged sentences
Proportionate Property Net Operating Income
−Removed: The results of our segments for the three months ended June 30, 2023 and 2022, as presented below, are based on segment classifications as of June 30, 2023:
+Added: The results of our segments for the three months ended September 30, 2023 and 2022, as presented below, are based on segment classifications as of September 30, 2023:
Three Months Ended
+Added: September 30,
(in thousands)
5 unchanged sentences
Development and Redevelopment
−Removed: For the three months ended June 30, 2023, compared to the same period in 2022:
−Removed: Development and Redevelopment proportionate property net operating income increased by $1.3 million due to the lease up of apartment homes at The Hamilton.
+Added: For the three months ended September 30, 2023, compared to the same period in 2022:
+Added: Development and Redevelopment proportionate property net operating income increased by $2.3 million due primarily to the lease up of apartment homes at The Hamilton.
Operating proportionate property net operating income increased by $1.9 million, or 7.6%.
1 unchanged sentence
Other proportionate property net operating income decreased by $0.4 million, or 14.8%, primarily at our commercial office building in Miami, Florida from lower occupancy following lease expirations earlier in 2023.
−Removed: The results of our segments for the six months ended June 30, 2023 and 2022, as presented below, are based on segment classifications as of June 30, 2023:
−Removed: Six Months Ended
+Added: The results of our segments for the nine months ended September 30, 2023 and 2022, as presented below, are based on segment classifications as of September 30, 2023:
+Added: Nine Months Ended
+Added: September 30,
(in thousands)
5 unchanged sentences
Development and Redevelopment
−Removed: For the six months ended June 30, 2023, compared to the same period in 2022:
−Removed: Development and Redevelopment proportionate property net operating income increased by $1.6 million due to the lease up of apartment homes at The Hamilton.
+Added: For the nine months ended September 30, 2023, compared to the same period in 2022:
+Added: Development and Redevelopment proportionate property net operating income increased by $3.9 million due primarily to the lease up of apartment homes at The Hamilton.
Operating proportionate property net operating income increased by $7.1 million, or 10.0%.
4 unchanged sentences
Depreciation and Amortization
−Removed: For the three and six months ended June 30, 2023, compared to the same periods in 2022, Depreciation and amortization decreased by $17.8 million, or 51.1%, and $24.7 million, or 42.6%, respectively, due primarily to the disposition of three properties and the termination of leases of four properties and related relinquishment of the associated leasehold improvements during the year ended December 31, 2022.
+Added: For the three and nine months ended September 30, 2023, compared to the same periods in 2022, Depreciation and amortization decreased by $67.6 million, or 79.2%, and $92.3 million, or 64.4%, respectively, due primarily to the disposition of three properties and the termination of leases of four properties and related relinquishment of the associated leasehold improvements during the year ended December 31, 2022.
General and Administrative Expenses
−Removed: For the three and six months ended June 30, 2023, compared to the same periods in 2022, General and administrative expenses decreased by $1.1 million, or 12.0%, and $2.1 million, or 11.6%, respectively, due primarily to a decrease in expenses for consulting services per the Separation Agreement with AIR, which concluded at December 31, 2022.
+Added: For the three and nine months ended September 30, 2023, compared to the same periods in 2022, General and administrative expenses decreased by $2.6 million, or 24.2%, and $4.8 million, or 16.3%, respectively, due primarily to a decrease in expenses for consulting services per the Separation Agreement with AIR, which concluded at December 31, 2022.
Interest Income
−Removed: For the three and six months ended June 30, 2023, compared to the same periods in 2022, interest income increased by $1.9 million, or 100.0%, and $3.4 million, or 100.0%, respectively, due primarily to increased interest earned on greater amounts of invested cash at higher rates in the current year versus the prior year.
+Added: For the three and nine months ended September 30, 2023, compared to the same periods in 2022, interest income increased by $1.6 million, or 100.0%, and $5.0 million, or 100.0%, respectively, due primarily to increased interest earned on greater amounts of invested cash at higher rates in the current year versus the prior year.
Interest Expense
−Removed: For the three and six months ended June 30, 2023, compared to the same periods in 2022, interest expense decreased by $31.9 million, or 76.8%, and $36.8 million, or 65.5%, respectively, due primarily to the prepayment of the notes payable due to AIR and other property debt, partially offset by an increase related to the placement of certain property debt during the year ended December 31, 2022.
+Added: For the three and nine months ended September 30, 2023, compared to the same periods in 2022, interest expense decreased by $1.5 million, or 15.1%, and $38.2 million, or 58.0%, respectively, due primarily to the prepayment of the notes payable due to AIR and other property debt, partially offset by an increase related to the placement of certain property debt during the year ended December 31, 2022.
Mezzanine Investment Income (Loss), Net
−Removed: For the three and six months ended June 30, 2023, compared to the same periods in 2022, Mezzanine Investment income decreased by $8.5 million, or 100%, and $16.8 million or 100.0%, respectively, due primarily to our cessation of income recognition after the non-cash impairment recorded during the year ended December 31, 2022.
+Added: For the three and nine months ended September 30, 2023, compared to the same periods in 2022, Mezzanine Investment income decreased by $9.2 million, or 100%, and $26.0 million or 100.0%, respectively, due primarily to our cessation of income recognition after the non-cash impairment recorded during the year ended December 31, 2022.
Realized and Unrealized Gains (Losses) on Interest Rate Options
We are required to adjust our interest rate options to fair value on a quarterly basis.
−Removed: As a result of the mark-to-market adjustments, we recorded unrealized gains of $2.5 million and $0.6 million, respectively, for the three and six months ended June 30, 2023, compared to unrealized gains of $11.9 million and $30.7 million, respectively, for the three and six months ended June 30, 2022.
−Removed: In addition, we recorded realized gains of $0.9 million and $1.7 million, respectively, for the three and six months ended June 30, 2023, compared to realized gains of $8.0 million in both the three and six months ended June 30, 2022.
+Added: As a result of the mark-to-market adjustments, we recorded unrealized losses of $0.5 million and unrealized gains of $0.1 million, respectively, for the three and nine months ended September 30, 2023, compared to unrealized gains of $7.5 million and $38.3 million, respectively, for the three and nine months ended September 30, 2022.
+Added: In addition, we recorded realized gains of $1.5 million and $3.2 million, respectively, for the three and nine months ended September 30, 2023, compared to realized gains of $1.7 million and $9.7 million, respectively, for the three and nine months ended September 30, 2022.
Realized and Unrealized Gains (Losses) on Equity Investments
−Removed: We measure our investment in stock based on its market price at period end and our investments in property technology funds at NAV as a practical expedient.
−Removed: As a result of changes in the values of these investments, we recorded unrealized gains of $1.1 million and $1.2 million, respectively, for the three and six months ended June 30, 2023, compared to unrealized gains of $0.5 million and unrealized losses of $3.9 million, respectively, for the three and six months ended June 30, 2022.
−Removed: During the three and six months ended June 30, 2022, we recognized realized and unrealized gains on our investment in IQHQ totaling $26.2 million resulting from a partial redemption of our investment during that period.
+Added: We measure our investments in stock based on market prices at period end and our investments in property technology funds at NAV as a practical expedient.
+Added: As a result of changes in the values of these investments, we recorded unrealized losses of $1.1 million and unrealized gains of $0.2 million, respectively, for the three and nine months ended September 30, 2023, compared to unrealized losses of $2.2 million and $6.0 million, respectively, for the three and nine months ended September 30, 2022.
+Added: During the three and nine months ended September 30, 2022, we recognized realized and unrealized gains on our investment in IQHQ totaling $0.0 million and $26.2 million, respectively, resulting from a partial redemption of our investment during June 2022.
Gain on Dispositions of Real Estate
−Removed: During the three and six months ended June 30, 2023, we recognized a gain on disposition of $1.9 million for the contribution of real estate to an unconsolidated joint venture compared to $94.6 million for the three and six months ended June 30, 2022 related to the sale of an apartment community.
+Added: During the three months ended September 30, 2023, we had no gain on dispositions compared to a gain of $75.5 million for the three months ended September 30, 2022 related to the sale of two apartment communities.
+Added: During the nine months ended September 30, 2023, we recognized a gain on disposition of $1.9 million for the contribution of real estate to an unconsolidated joint venture compared to gains of $170.0 million for the nine months ended September 30, 2022 related to the sale of three apartment communities.
Lease Modification Income
−Removed: During the three and six months ended June 30, 2022, we recognized $205.4 million of lease modification income related to the agreement entered into with AIR for the termination of the leases of four properties.
+Added: During the three and nine months ended September 30, 2022, we recognized $1.6 million and $207.0 million, respectively, of lease modification income related to the agreement entered into with AIR for the termination of the leases of four properties.
Other Income (Expense), Net
Other income (expense), net , includes costs associated with our risk management activities, partnership administration expenses, fee income, and certain non-recurring items.
−Removed: For the three months ended June 30, 2023, compared to the same period in 2022, other expenses, net decreased by $0.6 million, or 30.2%.
−Removed: For the six months ended June 30, 2023, compared to the same period in 2022, other expenses, net increased by $2.0 million, or 68.8%, primarily due to the incremental expense associated with pre-existing long-term incentive partnership units recorded upon the resignation of one of our board members during the first quarter of 2023.
+Added: For the three months ended September 30, 2023, compared to the same period in 2022, other expenses, net increased by $0.3 million, or 19.9%.
+Added: For the nine months ended September 30, 2023, compared to the same period in 2022, other expenses, net increased by $2.3 million, or 53.1%, primarily due to the incremental expense associated with pre-existing long-term incentive partnership units recorded upon the resignation of one of our board members during the first quarter of 2023.
Income Tax Benefit (Expense)
4 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.
−Removed: For the three and six months ended June 30, 2023, we had a consolidated net losses subject to tax of $2.5 million and $7.4 million, respectively, compared to consolidated net income subject to tax of $181.4 million and $166.6 million, respectively, for the same periods in 2022.
−Removed: For the three months ended June 30, 2023, we recognized an income tax benefit of $0.4 million, compared to income tax expense of $46.0 million for the same period in 2022.
−Removed: The change is due primarily to GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022.
−Removed: For the six months ended June 30, 2023, we recognized an income tax benefit of $4.6 million, compared to income tax expense of $41.9 million for the same period in 2022.
−Removed: The change is primarily due to a change in the first quarter of 2023 to the effective state tax rate expected to apply to the reversal of deferred taxes, as well as the GAAP income taxes associated with the lease modification income recognized in the second quarter of 2022.
+Added: For the three and nine months ended September 30, 2023, we had consolidated net losses subject to tax of $5.0 million and $12.4 million, respectively, compared to consolidated net losses of $75.6 million and net income of $91.0 million subject to tax, respectively, for the same periods in 2022.
+Added: For the three months ended September 30, 2023, we recognized an income tax benefit of $6.2 million, compared to an income tax benefit of $17.6 million for the same period in 2022.
+Added: The change is due primarily to GAAP income tax benefit associated with the depreciation taken related to the termination of four leases of four properties in the third quarter of 2022, as well as a change in estimate associated with finalizing the 2022 tax return in the third quarter of 2023.
+Added: For the nine months ended September 30, 2023, we recognized an income tax benefit of $10.8 million, compared to income tax expense of $24.3 million for the same period in 2022.
+Added: The change is primarily due to GAAP income tax benefit associated with the lease modification income recognized in the second quarter of 2022, as well as a change in the first quarter of 2023 to the effective state tax rate expected to apply to the reversal of deferred taxes and a change in estimate associated with finalizing the 2022 tax return in the third quarter of 2023.
Critical Accounting Policies and Estimates
19 unchanged sentences
Additionally, we exclude the (income) loss recognized on our Mezzanine Investment.
−Removed: The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2023 and 2022, is as follows (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2023 and 2022, is as follows (in thousands):
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Net income (loss)
1 unchanged sentence
Income tax (benefit) expense
−Removed: Gain on disposition of real estate
+Added: Gain on dispositions of real estate
Lease modification income
13 unchanged sentences
Our primary sources of liquidity are cash flows from operations and borrowing capacity under our loan agreements.
−Removed: As of June 30, 2023, our available liquidity was $342.4 million, which consisted of:
+Added: As of September 30, 2023, our available liquidity was $320.2 million, which consisted of:
$95.7 million in cash and cash equivalents;
$20.2 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance;
+Added: $54.3 million short-term investment in a treasury bill;
$150.0 million of available capacity to borrow under our revolving secured credit facility.
−Removed: As of June 30, 2023, we had sufficient capacity on our construction loans to cover our commitments of approximately $165.5 million.
−Removed: The initial allocation to our joint ventures have remaining unfunded commitments of $3.2 million.
+Added: As of September 30, 2023, we had sufficient capacity on our construction loans to cover our commitments of approximately $120.2 million.
+Added: The initial allocations to our joint ventures have remaining unfunded commitments of $3.1 million.
We also have unfunded commitments in the amount of $2.1 million related to four investments in entities that develop technology related to the real estate industry.
5 unchanged sentences
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 our equity.
−Removed: Our revolving secured credit facility matures in December 2023, prior to consideration of its two one-year extension options.
+Added: Our revolving secured credit facility matures in December 2024, prior to consideration of its one-year extension option.
Leverage and Capital Resources
3 unchanged sentences
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.
−Removed: As of June 30, 2023, approximately 88% of our outstanding non-recourse property debt had a fixed interest rate and approximately 12% had a variable interest rate.
+Added: As of September 30, 2023, approximately 88% of our outstanding non-recourse property debt had a fixed interest rate and approximately 12% had a variable interest rate.
In addition, the weighted-average contractual rate on our non-recourse debt was 5.0% and 4.7% inclusive of interest rate caps, and the average remaining term to maturity was 6.8 years.
−Removed: At June 30, 2023, all of our outstanding non-recourse property debt was either fixed or hedged.
+Added: At September 30, 2023, all of our outstanding non-recourse property debt was either fixed or hedged.
Our use of interest rate caps may vary from quarter to quarter depending on lender requirements, recycling of interest rate caps between projects, and our view on forecasted interest rates.
While our primary source of leverage is property-level debt and construction loans, we also have a secured $150.0 million credit facility with a syndicate of financial institutions.
−Removed: As of June 30, 2023, we had no outstanding borrowings under our revolving secured credit facility.
+Added: As of September 30, 2023, we had no outstanding borrowings under our revolving secured credit facility.
Under our revolving secured credit facility, we have agreed to maintain a fixed charge coverage ratio of 1.25X minimum tangible net worth of $625.0 million, and maximum leverage of 60.0% as defined in the credit agreement.
3 unchanged sentences
Operating Activities
−Removed: For the six months ended June 30, 2023, net cash provided by operating activities was $17.7 million.
+Added: For the nine months ended September 30, 2023, net cash provided by operating activities was $42.6 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.
−Removed: Cash provided by operating activities for the six months ended June 30, 2023, decreased by $7.7 million compared to the same period ended in 2022, due primarily to lower net cash received from lease incentive, lower net operating income associated with apartment communities sold in the latter part of 2022, and timing of balance sheet position changes, partially offset by decreased interest payments.
+Added: Cash provided by operating activities for the nine months ended September 30, 2023, decreased by $185.7 million compared to the same period ended in 2022, due primarily to lower net cash received from lease incentive, lower net operating income associated with apartment communities sold in the latter part of 2022, and timing of balance sheet position changes, partially offset by decreased interest payments.
Investing Activities
−Removed: For the six months ended June 30, 2023, net cash used in investing activities of $126.5 million consisted primarily of capital expenditures of $129.9 million.
−Removed: Net cash used in investing activities for the six months ended June 30, 2023, increased by $1.2 million compared to the same period ended in 2022, due primarily to increased capital expenditures offset by decreased funding for net real estate and investment transactions.
+Added: For the nine months ended September 30, 2023, net cash used in investing activities of $264.1 million consisted primarily of capital expenditures of $212.2 million and the purchase of a short-term treasury bill for $53.8 million.
+Added: Net cash used in investing activities for the nine months ended September 30, 2023, increased by $181.2 million compared to the same period ended in 2022, due primarily to increased capital expenditures and the purchase of a short-term treasury bill offset by decreased funding for net real estate and investment transactions.
We have generally funded capital additions with available cash and cash provided by operating activities and construction loans.
Financing Activities
−Removed: For the six months ended June 30, 2023, net cash provided by financing activities of $71.5 million consisted primarily of proceeds from construction loans, the sale of a participation in the Mezzanine Investment, and the monetization of interest rate options, partially offset by repayments on non-recourse property debt and common stock repurchases.
−Removed: Net cash provided by financing activities for the six months ended June 30, 2023, increased by $121.8 million compared to the same period ended in 2022, due primarily to prior year repayment and borrowing activity, offset by current year activity, including the sale of a participation in the Mezzanine Investment and the monetization of interest rate options.
+Added: For the nine months ended September 30, 2023, net cash provided by financing activities of $107.7 million consisted primarily of proceeds from construction loans, the sale of a participation in the Mezzanine Investment, and the monetization of interest rate options, partially offset by repayments on non-recourse property debt and common stock repurchases.
+Added: Net cash provided by financing activities for the nine months ended September 30, 2023, increased by $272.1 million compared to the same period ended in 2022, due primarily to prior year repayment and borrowing activity, offset by current year activity, including increased proceeds from construction loans, the sale of a participation in the Mezzanine Investment and the monetization of interest rate options.
Future Capital Needs
7 unchanged sentences
We use derivative financial instruments as a risk management tool and do not use them for trading or other speculative purposes.
−Removed: As of June 30, 2023, on a consolidated basis, we had approximately $104.2 million of variable-rate property-level debt outstanding and $172.9 million of variable rate construction loans.
−Removed: The impact of rising interest rates is mitigated by our use of interest rate caps, which as of June 30, 2023, provided protection for our variable interest rate debt.
+Added: As of September 30, 2023, on a consolidated basis, we had approximately $104.2 million of variable-rate property-level debt outstanding and $218.1 million of variable rate construction loans.
+Added: The impact of rising interest rates is mitigated by our use of interest rate caps, which as of September 30, 2023, provided protection for our variable interest rate debt.
Our use of interest rate caps may vary from quarter to quarter depending on lender requirements, recycling of interest rate caps between projects, and our view on forecasted interest rates.
We estimate that an increase or decrease in our variable rate indices of 100 basis points with constant credit risk spreads, would have no impact on interest expense on an annual basis.
−Removed: As of June 30, 2023, we held interest rate caps with $473.2 million notional value.
−Removed: These instruments were acquired for $5.1 million and at June 30, 2023 were valued at $9.0 million.
−Removed: As of June 30, 2023, we had $192.4 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.
+Added: As of September 30, 2023, we held interest rate caps with $627.4 million notional value.
+Added: These instruments were acquired for $5.8 million and at September 30, 2023, were valued at $9.1 million.
+Added: As of September 30, 2023, we had $115.9 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.
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.