What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 279 added, 133 removed, 503 unchanged (45% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Restricted cash

Interest rate options

Unconsolidated real estate partnerships

Notes receivable

11 unchanged sentences

Commitments and contingencies (Note 3)

Equity ( 510,587,500 shares authorized at both March 31, 2024 and December 31, 2023):

Common Stock, $ 0.01 par value, 140,210,798 and 140,576,102 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Equity ( 510,587,500 shares authorized at both June 30, 2024 and December 31, 2023):

Common Stock, $ 0.01 par value, 137,167,349 and 140,576,102 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

8 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Rental and other property revenues

6 unchanged sentences

Interest expense

Realized and unrealized gains (losses) on interest rate options

Realized and unrealized gains (losses) on interest rate contracts

Realized and unrealized gains (losses) on equity investments

Income from unconsolidated real estate partnerships

Gain on dispositions of real estate

Other income (expense), net

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2024 and 2023

(In thousands, except per share data)

For the Three Months Ended June 30, 2024 and 2023

(In thousands)

Noncontrolling

1 unchanged sentence

Retained Earnings (Accumulated Deficit)

Balances at March 31, 2023

Net income (loss)

Redemption of OP Units held by third parties and reallocation of noncontrolling interests in Aimco OP

Share-based compensation expense

Contributions from noncontrolling interests in consolidated real estate partnerships

Distributions to noncontrolling interests in consolidated real estate partnerships

Common stock repurchased

Balances at June 30, 2023

Balances at March 31, 2024

Net income (loss)

Redemption of OP Units held by third parties and reallocation of noncontrolling interests in Aimco OP

Share-based compensation expense

Contributions from noncontrolling interests in consolidated real estate partnerships

Distributions to noncontrolling interests in consolidated real estate partnerships

Common stock repurchased

Balances at June 30, 2024

See notes to condensed consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Six Months Ended June 30, 2024 and 2023

(In thousands)

Noncontrolling

Retained Earnings (Accumulated Deficit)

Balances at December 31, 2022

Net income (loss)

Redemption of OP Units held by third parties

Redemption of OP Units held by third parties and reallocation of noncontrolling interests in Aimco OP

Share-based compensation expense

3 unchanged sentences

Other common stock issuances

Balances at March 31, 2023

Balances at June 30, 2023

Balances at December 31, 2023

Net income (loss)

Redemption of OP Units held by third parties

Redemption of OP Units held by third parties and reallocation of noncontrolling interests in Aimco OP

Share-based compensation expense

3 unchanged sentences

Other common stock issuances, net of withholding taxes

Balances at March 31, 2024

Balances at June 30, 2024

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:

3 unchanged sentences

Depreciation and amortization

Realized and unrealized (gains) losses on interest rate options

Realized and unrealized (gains) losses on interest rate contracts

Realized and unrealized (gains) losses on equity investments

1 unchanged sentence

Share-based compensation

Loss on extinguishment of debt, net

Gain on dispositions of real estate

Income from unconsolidated real estate partnerships

6 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of real estate

Capital expenditures (1)

Distributions received from unconsolidated real estate partnerships

Other investing activities

3 unchanged sentences

Principal repayments on non-recourse property debt

Proceeds from interest rate options

Payments on finance leases

Proceeds from sale of participation in Mezzanine Investment

Proceeds from interest rate contracts

Common stock repurchased

Payments related to withholding taxes for share-based compensation

Distributions to redeemable noncontrolling interests

11 unchanged sentences

END OF PERIOD

(1) Accrued capital expenditures wer e $ 39.8 mil lion and $ 43.8 m illion as of March 31, 2024 and 2023, respectively.

(1) Accrued capital expenditures wer e $ 34.5 mil lion and $ 62.8 million as of June 30, 2024 and 2023 , respectively.

See notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Restricted cash

Interest rate options

Unconsolidated real estate partnerships

Notes receivable

22 unchanged sentences

(In thousands, except per unit data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Rental and other property revenues

6 unchanged sentences

Interest expense

Realized and unrealized gains (losses) on interest rate options

Realized and unrealized gains (losses) on interest rate contracts

Realized and unrealized gains (losses) on equity investments

Income from unconsolidated real estate partnerships

Gain on dispositions of real estate

Other income (expense), net

16 unchanged sentences

CONDENSED CONSOLIDATED S TATEMENTS OF PARTNERS’ CAPITAL

For the Three Months Ended March 31, 2024 and 2023

For the Three Months Ended June 30, 2024 and 2023

(In thousands)

7 unchanged sentences

Estate Partnerships

Balances at March 31, 2023

Net income (loss)

Redemption of OP Units held by third parties and reallocation of limited partners' interests in Aimco OP

Share-based compensation expense

Contributions from noncontrolling interests in consolidated real estate partnerships

Distributions to noncontrolling interests in consolidated real estate partnerships

Redemption of OP Units held by Aimco

Balances at June 30, 2023

Balances at March 31, 2024

Net income (loss)

Redemption of OP Units held by third parties and reallocation of limited partners' interests in Aimco OP

Share-based compensation expense

Contributions from noncontrolling interests in consolidated real estate partnerships

Distributions to noncontrolling interests in consolidated real estate partnerships

Redemption of OP Units held by Aimco

Balances at June 30, 2024

See notes to condensed consolidated financial statements.

AIMCO OP L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

For the Six Months Ended June 30, 2024 and 2023

(In thousands)

General Partner

Limited Partner

Partners’ Capital

Attributable to

Aimco Operating

Noncontrolling

in Consolidated Real

Estate Partnerships

Balances at December 31, 2022

Net income (loss)

Redemption of OP Units held by third parties

Redemption of OP Units held by third parties and reallocation of limited partners' interests in Aimco OP

Share-based compensation expense

3 unchanged sentences

Other OP Unit issuances

Balances at March 31, 2023

Balances at June 30, 2023

Balances at December 31, 2023

Net income (loss)

Redemption of OP Units held by third parties

Redemption of OP Units held by third parties and reallocation of limited partners' interests in Aimco OP

Share-based compensation expense

3 unchanged sentences

Other OP Unit issuances, net of withholding taxes

Balances at March 31, 2024

Balances at June 30, 2024

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:

3 unchanged sentences

Depreciation and amortization

Realized and unrealized (gains) losses on interest rate options

Realized and unrealized (gains) losses on interest rate contracts

Realized and unrealized (gains) losses on equity investments

1 unchanged sentence

Share-based compensation

Loss on extinguishment of debt, net

Gain on dispositions of real estate

Income from unconsolidated real estate partnerships

6 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of real estate

Capital expenditures(1)

Distributions received from unconsolidated real estate partnerships

Other investing activities

3 unchanged sentences

Principal repayments on non-recourse property debt

Proceeds from interest rate options

Payments on finance leases

Proceeds from sale of participation in Mezzanine Investment

Proceeds from interest rate contracts

Common stock repurchased

Payments related to withholding taxes for share-based compensation

Distributions to redeemable noncontrolling interests

11 unchanged sentences

END OF PERIOD

(1) Accrued capital expenditures w ere $ 39.8 mill ion and $ 43.8 million as of March 31, 2024 and 2023, respectively.

(1) Accrued capital expenditures were $ 34.5 mill ion and $ 62.8 million as of June 30, 2024 and 2023 , respectively.

See notes to condensed consolidated financial statements.

2 unchanged sentences

NOTES TO CONDENSED CONSOLID ATED FINANCIAL STATEMENTS

March 31, 2024

June 30, 2024

Note 1 — Organization

5 unchanged sentences

(“Aimco Operating Partnership”).

As of March 31, 2024, 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.

As of June 30, 2024, Aimco owned 92.3 % of the legal interest in the common partnership units of Aimco Operating Partnership and 94.7 % of the economic interest in Aimco Operating Partnership.

The remaining 7.7 % legal interest is owned by limited partners.

The common partnership units of Aimco Operating Partnership are referred to as "OP Units".

As the sole general partner of Aimco Operating Partnership, Aimco has exclusive control of Aimco Operating Partnership’s day-to-day management.

This filing combines the quarterly reports on Form 10-Q for the quarterly period ended March 31, 2024, of Aimco and Aimco Operating Partnership.

This filing combines the quarterly reports on Form 10-Q for the quarterly period ended June 30, 2024, of Aimco and Aimco Operating Partnership.

Where it is important to distinguish between the two entities, we refer to them specifically.

2 unchanged sentences

multifamily sector.

At March 31, 2024, our entire portfolio of operating residential apartment communities includes 5,600 apartment homes within 21 consolidated stabilized operating properties, a fully renovated waterfront property with 276 units, and four unconsolidated properties.

We also own two multifamily properties that are under construction with 624 of the 909 planned apartment homes delivered, a single family rental community that is under construction with 16 planned homes and eight accessory dwelling units, a 106 -key luxury hotel with event space, one commercial office building that is part of an assemblage with an adjacent apartment building, and land parcels held for development.

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

our investment in IQHQ, Inc.

At June 30, 2024, our entire portfolio of operating residential apartment communit ies includes 5,600 apartment homes within 21 consolidated stabilized operating properties, a fully renovated waterfront property with 276 units, a substantially complete 689 -unit community with 105,000 square feet of retail space, and four unconsolidated properties.

Additionally, we have a residential community under construction with 146 of 220 planned apartment homes constructed and delivered, a single family rental community that is under construction with 16 planned homes and eight accessory dwelling units, a 106 -key luxury hotel with event space, one commercial office b uilding that is part of an assemblage with an adjacent apartment building, and land parcels held for development.

In addition, we hold other alternative investments, including our Mezzanine Investment;

our investment in IQHQ Holdings, LP ("IQHQ");

and our investment in real estate technology funds.

Note 2 — Basis of Presentation and Summary of Significant Accounting Policies

See Note 2 for further information over our Mezzanine Investment and our investment in IQHQ.

Note 2 — Basis of Prese ntation and Summary of Significant Accounting Policies

Basis of Presentation

3 unchanged sentences

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, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The accompanying condensed consolidated financial statements include the accounts of Aimco, Aimco Operating Partnership, and their consolidated subsidiaries.

Aimco Operating Partnership’s condensed consolidated financial statements include the accounts of Aimco Operating Partnership and its consolidated subsidiaries.

Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The accompanying condensed consolidated financial statements include the accounts of Aimco, Aimco Operating Partnership, and their consolidated entities.

Aimco Operating Partnership’s condensed consolidated financial statements include the accounts of Aimco Operating Partnership and its consolidated entities.

All significant intercompany balances and transactions have been eliminated in consolidation.

5 unchanged sentences

Principles of Consolidation

We consolidate a variable interest entity (“VIE”) in which we are considered the primary beneficiary.

We account for joint ventures and other similar entities in which we hold an ownership interest in accordance with the consolidation guidance.

We first evaluate whether each entity is a variable interest entity ("VIE").

Under the VIE model, we consolidate an entity in which we are considered the primary beneficiary.

The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

In addition, when an entity is not a VIE, we consolidate an entity under the voting model when we control the entity through ownership of a majority voting interest.

Refer to Note 6 for further information.

2 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 OP Units held by Aimco) outstanding during the period.

For the periods ended March 31, 2024 and 2023, the holders of OP Units had a weighted-average economic ownership interest in Aimco Operating Partnership of approximately 5.2 % , and 5.1 %, respectively.

For the periods ended June 30, 2024 and 2023, the holders of OP Units had a weighted-average economic ownership interest in Aimco Operating Partnership of approximately 5.2 % , and 5.1 %, respectively.

Substantially all of the assets and liabilities of Aimco are held by Ai mco Operating Partnership.

Redeemable Noncontrolling Interests in Consolidated Real Estate Partnerships

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

Redeemable noncontrolling interests consist of equity interests held by a limited partner in a consolidated real estate partnership that has the right to require such partnership to redeem all or a portion of the noncontrolling interest in accordance with the partnership agreement.

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

Redeemable noncontrolling interests in consolidated real estate partnerships as of March 31, 2024, consists of the following:

(i) a 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 expect to complete the development of residential apartment communities in 2024.

Redeemable noncontrolling interests in consolidated real estate partnerships as of June 30, 2024, consists of the following:

(i) a preferred equity interest in an entity that owns a portfolio of operating apartment communities, and (ii) equity interests in two separate consolidated joint ventures with residential apartment communities under construction and in lease-up.

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.

These interests are presented as Redeemable noncontrolling interests in consolidated real estate partnerships in our Condensed Consolidated Balance Sheets as of March 31, 2024.

These interests are presented as Redeemable noncontrolling interests in consolidated real estate partnerships in our Condensed Consolidated Balance Sheets as of June 30, 2024.

The assets of our consolidated real estate partnerships must first be used to settle the liabilities of the consolidated real estate partnerships.

The consolidated real estate partnership’s creditors do not have recourse to the general credit of Aimco Operating Partnership.

The following table shows changes in our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2023 to March 31, 2024 ( in thousands ):

The following table shows changes in our redeemable noncontrolling interests in consolidated real estate partnerships from December 31, 2023 to June 30, 2024 ( in thousands ):

Balance at Beginning of Period

Contributions

Distributions

Balance at March 31, 2024

Balance at June 30, 2024

Mezzanine Investment

6 unchanged sentences

We have the risks and rewards of ownership of the Mezzanine Investment.

The carrying value of the Mezzanine Investment was zero as of March 31, 2024.

The carrying value of the Mezzanine Investment was zero as of June 30, 2024.

In June 2023, we closed on the sale of a 20 % non-controlling participation in the Mezzanine Investment for $ 33.5 million.

1 unchanged sentence

Additionally, we are responsible for the servicing and administration of the Mezzanine Investment.

Because we receive first priority and a higher return than the purchaser, the partial sale and transfer of the financial interest does not qualify for sale accounting in accordance with GAAP.

Therefore, we recorded the cash received from the purchaser as a liability, which is included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets in accordance with GAAP.

Because we receive first priority and a higher return than the purchaser, the partial sale and transfer of the financial interest did not qualify for sale accounting in accordance with GAAP.

Therefore, we recorded the cash received from the purchaser as a liability, which is included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets .

Although the cash received is accounted for as a liability in accordance with GAAP, no amount is due to the purchaser until after we receive $ 134.0 million plus our annualized return.

1 unchanged sentence

The cash flows associated with this partial Mezzanine Investment sale have been included in Cash Flows from Financing Activities in our Condensed Consolidated Statements of Cash Flows.

Investment in IQHQ

In 2020, Aimco Predecessor made a $ 50.0 million commitment to IQHQ, a privately held life sciences real estate development company.

In 2022, after fully funding our commitment, 22 % of our original investment in IQHQ was redeemed for $ 16.5 million.

Our remaining investment in IQHQ, with a cost basis of $ 39.2 million, was adjusted upward to $ 59.7 million at the same per share value as the cash redemption per share.

We account for our investment in IQHQ using the measurement alternative.

Under the measurement alternative, the investment is measured at cost less impairment if any needed, with subsequent adjustments for observable price changes of identical or similar investments of the same issuer since it does not have a readily determinable fair value.

On a periodic basis, we perform a qualitative impairment assessment on our investment in IQHQ in accordance with GAAP.

During the three months ended June 30, 2024, we determined that our investment in IQHQ was impaired after consideration of factors, including adverse capital market conditions, increased real estate development costs, and IQHQ's financial condition.

As a result, we recorded a non-cash impairment charge of $ 47.0 million to reduce the carrying value of the investment in IQHQ to $ 12.7 million as of June 30, 2024.

The non-cash impairment is reflected in Realized and unrealized gains (losses) on equity investments in our Condensed Consolidated Statements of Operations for the periods ended June 30, 2024, and as a reduction in the carrying value of Other investments included in Other assets, net in our Condensed Consolidated Balance Sheets as of June 30, 2024.

No impairment losses were recognized during the periods ended June 30, 2023.

As of June 30, 2024

As of December 31, 2023

Equity ownership in IQHQ under measurement alternative:

Cumulative upward adjustments

Cumulative impairment

Total carrying value

Income Tax Benefit (Expense)

3 unchanged sentences

Income taxes, as well as changes in valuation allowance and incremental deferred tax items in conjunction with intercompany asset transfers and internal restructurings (if applicable), are included in Income tax benefit (expense) in our Condensed Consolidated Statements of Operations .

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

For the three months ended March 31, 2024, we had consolidated net losses subject to tax of $ 6.6 million, compared to consolidated net losses of $ 4.9 million for the same period in 2023.

For the three months ended March 31, 2024, we recognized an income tax benefit of $ 2.7 million, compared to income tax benefit of $ 4.2 million during the same period in 2023 .

The decrease is due primarily to a reduction to the effective state tax rate expected to apply to the reversal of our existing deferred items recognized during the three months ended March 31, 2023.

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

For the three and six months ended June 30, 2024, we had consolidated net losses subject to tax of $ 5.3 million and $ 11.9 million, respectively.

For the three and six months ended June 30, 2023, we had consolidated net losses subject to income tax of $ 2.5 million and $ 7.4 million, respectively.

For the three months ended June 30, 2024, we recognized an income tax benefit of $ 2.2 million, compared to income tax benefit of $ 0.4 million during the same period in 2023.

The increase is due primarily to the tax effect of fewer gains, increased depreciation, and interest expense associated with properties owned by, and activities of, our TRS entities.

For the six months ended June 30, 2024, we recognized an income tax benefit of $ 4.9 million, compared to income tax benefit of $ 4.6 million during the same period in 2023.

The increase is due primarily to the tax effect of fewer gains, increased depreciation, and interest expense associated with properties owned by, and activities of, our TRS entities.

This increase was partially offset by a reduction to the effective state tax rate expected to apply to the reversal of our existing deferred items recognized during the three months ended March 31, 2023.

Use of Estimates

3 unchanged sentences

We classify highly liquid investments with an original maturity of three months or less as cash equivalents.

We maintain cash equivalents in financial institutions in excess of insured limits.

We maintain cash and cash equivalents in financial institutions in excess of insured limits.

We have not experienced any losses in these accounts in the past and believe that we are not exposed to significant credit risk because our accounts are deposited with major financial institutions.

2 unchanged sentences

Other Assets, net

Other assets were comprised of the following amounts as of March 31, 2024 and December 31, 2023 ( in thousands ):

March 31, 2024

Other assets were comprised of the following amounts as of June 30, 2024 and December 31, 2023 ( in thousands ):

June 30, 2024

December 31, 2023

2 unchanged sentences

Prepaid expenses and real estate taxes

Interest rate contracts (1)

Unconsolidated real estate partnerships

Intangible assets, net

Corporate fixed assets

Accounts receivable, net of allowances of $ 164 and $ 373 as of March 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowances of $ 215 and $ 373 as of June 30, 2024 and December 31, 2023, respectively

Deferred tax assets

1 unchanged sentence

Total other assets, net

(1) We account for our Interest rate contracts as non-designated hedges.

Revenue from contracts with customers

We apply ASC 606, Revenue from Contracts with Customers , in recognizing revenue from our operations at The Benson Hotel.

The Benso n Hotel revenues consist of amounts derived from hotel operations, including room sales, food and beverage sales, and other ancillary hotel service revenues.

We recognize revenue from the rental of the hotel rooms and guest services when we satisfy performance obligations as evidenced by the transfer of control when rooms are occupied, and services have been provided.

Food and beverage sales are recognized when the customer has been serviced or at the time the transaction occurs.

Recent Accounting Pronouncements

3 unchanged sentences

The new guidance is effective for the annual period ended December 31, 2024 and interim periods beginning in 2025.

The amendments in the ASU apply retrospectively to all periods presented in the financial statements.

The amendments in ASU 2023-07 apply retrospectively to all periods presented in the financial statements.

The segment expense categories and amounts disclosed in prior periods are based on the significant expense categories identified and disclosed in the period of adoption.

9 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.

As of March 31, 2024, we had remaining commitments for construction-related contracts of $ 42.4 million, with $ 91.7 million undrawn on our non-recourse construction loans.

As of March 31, 2024, we have remaining commitments of $ 3.0 million related to our unconsolidated joint ventures, which we expect to fund over the next twelve months.

As of June 30, 2024, we had remaining commitments for construction-related contracts of $ 17.4 million, with $ 64.2 million undrawn on our non-recourse construction loans.

As of June 30, 2024, we have remaining commitments of $ 3.0 million related to our unconsolidated joint ventures, which we expect to fund over the next twelve months.

In addition, we have remaining commitments of $ 1.7 million related to our investments in property technology funds invested in entities that develop technology related to the real estate industry.

11 unchanged sentences

OP Unit equivalents also include unvested long-term incentive partnership units.

The Common Stock and OP Unit equivalents were not included in the computation of diluted earnings per share and unit for the three months ended March 31, 2024 and 2023, because the effect of their inclusion would have been antidilutive.

As of March 31, 2024, the Common Stock and OP Unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 4.2 million and 8.4 million, respectively.

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, 2024 and 2023, because the effect of their inclusion would have been antidilutive.

As of June 30, 2024, the Common Stock and OP Unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 4.2 million and 8.4 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 ("LTIP Units") receive non-forfeitable distributions based on specified percentages of the distributions paid to OP Units prior to vesting and conversion.

1 unchanged sentence

When applicable, 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 were not included in the computation of diluted earnings per share and unit for the three months ended March 31, 2024 and 2023, because the effect of their inclusion would have been antidilutive.

As of March 31, 2024, participating securities that could potentially dilute basic earnings per share or unit in future periods totaled 2.5 million.

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, 2024 and 2023, are as follows ( in thousands, except per share and per unit data ):

Participating securities were not included in the computation of diluted earnings per share and unit for the three and six months ended June 30, 2024 and 2023, because the effect of their inclusion would have been antidilutive.

As of June 30, 2024, participating securities that could potentially dilute basic earnings per share or unit in future periods totaled 2.4 million.

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, 2024 and 2023, are as follows ( in thousands, except per share and per unit data ):

Three Months Ended

Six Months Ended

Earnings per share

21 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.

These instruments are presented as Interest rate options in our Condensed Consolidated Balance Sheets .

As of March 31, 2024, we held interest rate caps with a $ 627.4 million notional value.

These instruments were acquired for $ 5.8 million, and the fair value of these instruments is $ 5.1 million as noted in the table below.

On a recurring basis, we measure at fair value our interest rate options.

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 Realized and unrealized gains (losses) 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, 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 .

As of March 31, 2024 and December 31, 2023, we had investments in stock of $ 2.4 million and $ 2.9 million, respectively, classified within Level 1 of the GAAP fair value hierarchy.

In addition, as of March 31, 2024 and December 31, 2023, we have investments in property technology funds of $ 2.8 million and $ 2.5 million, respectively, in entities that develop technology related to the real estate industry.

These instruments are presented as Interest rate contracts in Other assets, net in our Condensed Consolidated Balance Sheets .

As of June 30, 2024, we held interest rate caps with a $ 627.4 million notional value.

These instruments were acquired for $ 5.7 million, and the fair value of these instruments as of June 30, 2024 and December 31, 2023 is $ 3.7 million and $ 5.2 million, respectively.

On a recurring basis, we measure at fair value our interest rate contracts.

Our interest rate contracts 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 Realized and unrealized gains (losses) on interest rate contracts 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, any upfront premium is reflected in Purchase of interest rate contracts , and any proceeds are reflected in Proceeds from interest rate contracts in our Condensed Consolidated Statements of Cash Flows .

As of June 30, 2024 and December 31, 2023, we had investments in stock of $ 2.1 million and $ 2.9 million, respectively, classified within Level 1 of the GAAP fair value hierarchy.

In addition, as of June 30, 2024 and December 31, 2023, we have investments in property technology funds of $ 3.0 million and $ 2.5 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.

See Note 3 for further information regarding unfunded commitments related to these investments.

The following table summarizes the fair value for our interest rate options, investments in stock, and our investments in real estate technology funds as of March 31, 2024 and December 31, 2023 ( in thousands ):

As of March 31, 2024

The following table summarizes the fair value for our interest rate contracts, investments in stock, and our investments in real estate technology funds as of June 30, 2024 and December 31, 2023 ( in thousands ):

As of June 30, 2024

As of December 31, 2023

Interest rate options

Interest rate contracts

Investments in stock

1 unchanged sentence

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

Nonrecurring Fair Value Measurements

During the three and six months ended June 30, 2024, we recorded a non-cash impairment charge of $ 47.0 million related to our passive equity investment in IQHQ.

This impairment charge was derived using a third-party valuation of IQHQ, which incorporated fair value estimates of properties owned by IQHQ.

The fair value estimates of the properties owned by IQHQ were determined by discounted cash flow analyses and references to market comparable data.

The cash flows utilized in such discounted cash flow analyses are comprised of projected operating results, which are based upon market conditions and future expectations.

The most significant unobservable inputs utilized in determining the fair value of these assets are capitalization rates and discount rates, which ranged from 6.00 % to 7.00 % and 7.25 % to 10.25 %, respectively.

Because of these inputs, we have determined that the fair value of these properties are classified within Level 3 of the fair value hierarchy.

Market comparable data utilizes comparable sales, which are subject to judgment as to comparability to the valued properties.

Because these inputs are derived from observable market data, we have determined that the fair values of these properties are classified within Level 2 of the fair value hierarchy.

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, 2024, and December 31, 2023, 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 and restricted cash approximated their fair value as of June 30, 2024, and December 31, 2023 and are categorized within Level 1 of the GAAP fair value hierarchy.

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 non-recourse 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.

The following table summarizes the carrying value and fair value of our non-recourse property debt and non-recourse construction loans as of March 31, 2024 and December 31, 2023 ( in thousands ):

As of March 31, 2024

The following table summarizes the carrying value and fair value of our non-recourse property debt, and non-recourse construction loans as of June 30, 2024 and December 31, 2023 ( in thousands ):

As of June 30, 2024

As of December 31, 2023

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In addition, we have eight unconsolidated VIEs for which we are not the primary beneficiary because we are not their primary decision maker.

The eight 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 two unconsolidated investments in land held for development in Miami, Florida and Bethesda, Maryland.

The eight 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 two unconsolidated investments in land held for development in Miami, Florida and Bethesda, Maryland.

Our maximum exposure to loss because of our involvement with the unconsolidated VIEs is limited to the carrying value of their assets.

The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of March 31, 2024 and December 31, 2023 ( in thousands, except for VIE count ):

As of March 31, 2024

The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of June 30, 2024 and December 31, 2023 ( in thousands, except for VIE count ):

As of June 30, 2024

As of December 31, 2023

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Cash and cash equivalents

Interest rate options

Unconsolidated real estate partnerships

Notes receivable

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Aimco as Lessor

Our apartment homes and commercial spaces are leased to tenants under operating leases.

As of June 30, 2024 , our apartment home leases generally have initial terms of 24 months or less.

As of June 30, 2024, our commercial space leases have initial terms betwee n 5 and 15 y ears and represent approximately 8 % to 9 % of our total revenue.

Our apartment home leases are generally renewable at the end of the lease term, subject to potential changes in rental rates, and our commercial space leases generally have renewal options, subject to associated increases in rental rates due to market based or fixed price renewal options and other certain conditions.

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

For the three and six months ended June 30, 2024 , 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 months and six months ended June 30, 2023.

The majority of lease payments we receive from our residents and tenants are fixed.

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

For the three months ended March 31, 2024 and 2023, 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, 2024 and 2023, 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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Total lease income

Future minimum lease payments that are contractually due us from our office space sublease and commercial space leases, excluding extension options, as of June 30, 2024, are as follows (in thousands) :

Corporate Office Sublease

Commercial Leases

Remainder of 2024

Aimco as Lessee

Finance Lease Arrangements

We are lessee to finance leases for the land underlying the development sites at Upton Place, Strathmore Square, and Oak Shore.

As of March 31, 2024 and December 31, 2023, our finance leases had weighted-average remaining terms of 93.1 years and 93.4 years, respectively, and weighted-average discount rates of 6.1 % and 6.1 %, respectively.

For the three months ended March 31, 2024, amortization related to finance leases was $ 0.2 million, net of amounts capitalized, compared to zero , net of amounts capitalized, for the three months ended March 31, 2023.

In addition, for the three months ended March 31, 2024, we capitalized $ 0.9 million of lease costs associated with active development and redevelopment projects on certain of the underlying property and ground lease assets, compared to $ 2.1 million for the same period in 2023.

Operating Lease Arrangements

Lease Arrangements

We are lessee to finance leases for the land underlying our development sites at Upton Place, Strathmore Square, and Oak Shore.

We have operating leases primarily for corporate office space.

Substantially all of the payments under our office leases are fixed.

As of March 31, 2024 and December 31, 2023, our operating leases had weighted-average remaining terms of 4.9 years and 5.2 years, respectively, and weighted-average discount rates of 3.4 % , and 3.3 %, respectively.

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

For each of the three month periods ended March 31, 2024 and 2023, we recognized total operating lease expense of $ 0.4 million.

As of March 31, 2024 and December 31, 2023, operating lease right-of-use lease assets of $ 5.8 million and $ 6.2 million, respectively, are included in Other assets, net in our Condensed Consolidated Balance Sheets .

As of March 31, 2024 and December 31, 2023, operating lease liabilities of $ 10.9 million and $ 11.5 million, respectively, are included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets .

Substantially all of our office lease payments are fixed.

See the table below for lease costs, net of capitalized finance lease costs, for the three and six months ended June 30, 2024 and 2023 ( in thousands ):

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease costs

Finance lease costs:

Amortization of right-of-use assets, net of capitalized amounts

Interest on lease liabilities, net of capitalized amounts

Total lease costs, net of capitalized amounts

The weighted-average remaining terms and discount rates for our operating and finance leases are summarized in the table below as of June 30, 2024, and December 31, 2023:

June 30, 2024

December 31, 2023

Weighted average remaining lease term (years):

Operating leases

Finance leases

Weighted-average discount rate:

Operating leases

Finance leases

As of June 30, 2024 and December 31, 2023, operating lease right-of-use lease assets of $ 5.5 million and $ 6.2 million, respectively, are included in Other assets, net in our Condensed Consolidated Balance Sheets .

As of June 30, 2024 and December 31, 2023, operating lease liabilities of $ 10.4 million and $ 11.5 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.

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

Leases with initial terms greater than 12 months are recorded as operating or finance leases 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 expires on May 31, 2029 .

For each of the three month periods ended March 31, 2024 and 2023, we recognized sublease income of $ 0.4 million.

Leases with an initial term greater than 12 months are recorded as operating or finance leases in our Condensed Consolidated Balance Sheets .

Annual Future Minimum Lease Payments

Combined minimum annual lease payments under operating and finance leases, a nd sublease income that offsets our operating lease rent, are as follows as of March 31, 2024 ( in thousands ):

Sublease Income

Operating Lease Future Minimum Rent

Finance Leases Future Minimum Payments

Combined annual future minimum lease payments under our operating and finance leases are as follows as of June 30, 2024 ( in thousands ):

Operating Leases

Finance Leases

Remainder of 2024

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

As of March 31, 2024 , our Development and Redevelopment segment consists of 10 rental communities, three of which were under construction.

Our Operating segment includes 21 residential apartment communities with 5,600 apartment homes that have achieved a stabilized level of operations as of January 1, 2023 and maintained it throughout the current year and comparable period.

As of June 30, 2024 , our Development and Redevelopment segment consists of 10 rental communities, two of which were under construction.

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

During the three months ended March 31, 2024, we revised the information regularly reviewed by our chief operating decision maker ("CODM") to assess our operating performance.

During the first quarter of 2024, we revised the information regularly reviewed by our chief operating decision maker ("CODM") to assess our operating performance.

As a result, we reclassified The Benson Hotel from the Development and Redevelopment segment to the Other segment.

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Proportionate property net operating income is defined as our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements, for the consolidated communities;

• excluding the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ and the Mezzanine Investment, and investments in real estate technology funds;

• excluding the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ, the Mezzanine Investment, and investments in real estate technology funds;

• excluding property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance.

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, 2024 and 2023 ( 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, 2024 and 2023 ( in thousands ):

Development and Redevelopment

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Corporate and Amounts Not Allocated to Segments (2)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Rental and other property revenues

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Corporate and Amounts Not Allocated to Segments (2)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Rental and other property revenues

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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, 2024 and 2023 ( in thousands ):

Development and Redevelopment

Proportionate

and Other Adjustments (1)

Corporate and Amounts Not Allocated to Segments (2)

Six Months Ended June 30, 2024

Rental and other property revenues

Property operating expenses

Other operating expenses not allocated

to segments (3)

Total operating expenses

Proportionate property net operating

income (loss)

Other items included in income before

income tax (4)

Income (loss) before income tax

Development and Redevelopment

Proportionate

and Other Adjustments (1)

Corporate and Amounts Not Allocated to Segments (2)

Six Months Ended June 30, 2023

Rental and other property revenues

Property operating expenses

Other operating expenses not allocated

to segments (3)

Total operating expenses

Proportionate property net operating

income (loss)

Other items included in income before

income tax (4)

Income (loss) before income tax

(1) Represents adjustments for 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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(3) Other operating expenses not allocated to segments consist of depreciation and amortization and general and administrative expenses.

(4) Other items included in Income before income tax benefit (expense) consist primarily of 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.

Net real estate and non-recourse property debt, net, of our segments as of March 31, 2024 and December 31, 2023, were as follows ( in thousands ):

(4) Other items included in Income before income tax benefit (expense) consist primarily of interest income, interest expense, realized and unrealized gains (losses) on interest rate contracts, realized and unrealized gains (losses) on equity investments, and gain on dispositions of real estate.

Net real estate and non-recourse property debt, net, of our segments as of June 30, 2024 and December 31, 2023, were as follows ( in thousands ):

Development and Redevelopment

Corporate and Amounts Not Allocated to Segments (1)

As of March 31, 2024

As of June 30, 2024

Buildings and improvements

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Non-recourse property debt and construction loans, net

(1) During the quarter ended March 31, 2024, we disposed of St.

George Villas, and therefore it is not included in our segment balance sheets at March 31, 2024.

We added a Corporate segment to the tables above for presentation purposes to display these assets and the associated debt as of March 31, 2024 and December 31, 2023 , respectively.

In addition to the amounts disclosed in the tables above, as of March 31, 2024 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $ 108.7 million and $ 119.3 million, respectively, and as of December 31, 2023 , aggregated to $ 109.0 million and $ 118.7 million, respectively.

As of March 31, 2024 , right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.

(1) During the first quarter of 2024, we disposed of St.

George Villas, and therefore it is not included in our segment balance sheets at June 30, 2024.

We added a column to the tables above for presentation purposes to display these assets and the associated debt as of June 30, 2024 and December 31, 2023 , respectively.

In addition to the amounts disclosed in the tables above, as of June 30, 2024 the Development and Redevelopment segment right-of-use lease assets and lease liabilities aggregated to $ 108.4 million and $ 120.4 million, respectively, and as of December 31, 2023 , aggregated to $ 109.0 million and $ 118.7 million, respectively.

As of June 30, 2024 , right-of-use lease assets and lease liabilities primarily relate to our investments in Upton Place, Strathmore, and Oak Shore.

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