What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 117 added, 134 removed, 177 unchanged (59% of the section changed)

6 unchanged sentences

The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements regarding:

our future plans and goals, including our pipeline investments and projects, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, projections regarding lease growth, our plans to form joint ventures, our plans for new acquisitions or dispositions, our strategic partnerships and value added therefrom, the potential for adverse economic and geopolitical conditions, which negatively impact our operations, including on our ability to maintain current or meet projected occupancy, rental rate and property operating results;

our future plans and goals, including the timing and amount of capital expected to be returned to our stockholders, our pipeline investments and projects, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, projections regarding revenue and expense growth, our plans to form joint ventures, our plans for new acquisitions or dispositions, our strategic partnerships and value added therefrom, the potential for adverse economic and geopolitical conditions, which negatively impact our operations, including on our ability to maintain current or meet projected occupancy, rental rate and property operating results;

the effect of acquisitions, dispositions, developments, and redevelopments;

3 unchanged sentences

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

We caution investors not to place undue reliance on any such forward-looking statements.

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

the risk that the 2025 plans and goals may not be completed, as expected, in a timely manner or at all;

geopolitical events which may adversely affect the markets in which our securities trade, and other macro-economic conditions, including, among other things, rising interest rates and inflation, which heightens the impact of the other risks and factors described herein;

6 unchanged sentences

supply chain disruptions, particularly with respect to raw materials such as lumber, steel, and concrete;

the impact of tariffs and global trade disruptions on us;

financing risks, including the availability and cost of financing;

19 unchanged sentences

• Platform, consisting of a cohesive, talented, and tenured team with diverse real estate industry experience combined with a disciplined and proven investment process;

• Diversified portfolio, consisting of value-add investments, a pipeline of land held for potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments;

• Diversified portfolio, consisting of value-add investments, a pipeline of land for potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments;

• Capital redeployment plan which includes the prudent recycling of capital, reallocating our equity to higher returning investments, and return of capital to stockholders when appropriate.

8 unchanged sentences

In addition, we currently hold select alternative assets, consisting primarily of indirect, real estate related debt and equity investments.

We have reduced our allocation to these investments and plan to continue to significantly reduce our allocation over time.

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.

We have reduced our allocation to these investments and have no plans to increase our allocation to these investments.

We have policies in place that support our current 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 current strategy, it is expected that at any point in time the value-creation process will be ongoing at numerous of our investments.

Over time, we expect our enterprise to produce superior returns on equity on a risk-adjusted basis and it is our plan to do so by:

1 unchanged sentence

We have corporate headquarters in Denver, Colorado and Washington, D.C.

Our investment platform is managed by experienced professionals based in three regions, where we will focus our new investment activity:

Southeast Florida, the Washington, D.C.

Metro Area and Colorado's Front Range.

By regionalizing this platform, we are able to leverage the in-depth local market knowledge of each regional leader, creating a comparative advantage when sourcing, evaluating, and executing investment opportunities.

Our investment platform is managed by experienced regional professionals who leverage in-depth local market knowledge, creating a comparative advantage when sourcing, evaluating, and executing investment opportunities.

• Owning a portfolio of stabilized core and core plus real estate

Our entire portfolio of operating properties includes 25 apartment communities (21 consolidated properties and four unconsolidated properties) with average rents in line with local market averages (generally defined as B class).

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

The target composition of our stabilized portfolio will continue to include primarily B multifamily assets, spread across a geographically diversified portfolio, with a bias toward long established residential neighborhoods that rank highly in regard to schools, employment fundamentals and state and regional governance.

We own a geographically diversified portfolio of 24 apartment communities (20 consolidated properties and four unconsolidated properties) with average rents in line with local market averages (generally defined as B class).

We also own an apartment building and its adjacent office building, Yacht Club Apartments and 1001 Brickell Bay Drive (together referred to as the “Brickell Assemblage”), in a land assemblage that is under contract to be sold.

The target composition of our stabilized portfolio will continue to include primarily B multifamily assets, spread across geographically diversified markets, with a bias toward long established residential neighborhoods that rank highly in regard to schools, employment fundamentals and state and regional governance.

Core-Plus opportunities offer the opportunity for incremental capital investment while maintaining stabilized cashflow to accelerate income growth and improve asset values.

13 unchanged sentences

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

The results from the execution of our business plan during the three and nine months ended September 30, 2024 are further described below.

Financial Results and Recent Highlights

• For the three months ended September 30, 2024, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.16), due primarily to higher net contributions from multifamily property operations offset by increases in interest expense and depreciation related to advancing and completing development projects.

For the same period in 2023, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.02).

• For the three months ended September 30, 2024, revenue and net operating income from our Operating segment were up 4.1% and 1.6% respectively, year-over-year, due primarily to higher average monthly revenue per apartment home of $2,415, up $57 year-over-year, and a 160-basis point increase in Average Daily Occupancy to 96.8%.

• During the three months ended September 30, 2024, we substantially completed construction on our Strathmore Square project located in Bethesda, Maryland and began construction on an ultra-luxury residential tower located at 640 34th Street ("34th Street") in the Edgewater neighborhood of Miami, Florida.

Results for the three months ended March 31, 2025

The results from the execution of our business plan during the three months ended March 31, 2025 are described below.

Financial Results and Highlights

• For the three months ended March 31, 2025, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.10).

• For the three months ended March 31, 2025, net operating income from our Operating segment was $25.1 million, up 2.7% year-over-year, due primarily to higher average monthly revenue per apartment home of $2,309, up $60 year-over-year.

• Strathmore Square, Upton Place, and Oak Shore, our Development and Redevelopment segment properties in lease-up, remain on plan to reach stabilized occupancy in 2025.

• In March, the buyer, with whom we are under agreement to sell the Brickell Assemblage for $520.0 million, exercised a contractual closing extension option which required its non-refundable deposit to be increased by $5.0 million, from $38.0 million to $43.0 million.

Closing is subject to terms described later in this document.

• In January, we paid a special cash dividend of $0.60 per share to distribute the net proceeds resulting from our 2024 asset sales to stockholders.

The special cash dividend was declared on December 19, 2024, to stockholders of record on January 14, 2025, and was accrued in Dividends payable in our Condensed Consolidated Balance Sheets as of December 31, 2024.

Operating Property Results

1 unchanged sentence

markets with average rents in line with local market averages (generally defined as B class).

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

Highlights for the three months ended September 30, 2024 include:

• Revenue for our Operating segment was $39.3 million, up 4.1% year-over-year, resulting from a $57 increase in average monthly revenue per apartment home to $2,415 and a 160-basis point increase in Average Daily Occupancy to 96.8%.

• Expenses for our Operating segment were $11.9 million, up 10.6% year-over-year primarily from higher real estate taxes and insurance.

Highlights for the three months ended March 31, 2025 include:

• Revenue for our Operating segment was $35.6 million, up 2.7% year-over-year, resulting from a $60 increase in average monthly revenue per apartment home to $2,309.

• Expenses for our Operating segment were $10.5 million, up 2.7% year-over-year primarily due to higher real estate taxes from 2025 property assessments.

• Net operating income for our Operating segment was $25.1 million, up 2.7% year-over-year.

Value Add, Opportunistic & Alternative Investments

Value Add and Opportunistic Investments

Development and Redevelopment

1 unchanged sentence

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

As of September 30, 2024, we had two multifamily development projects under construction, two multifamily communities that have been substantially completed and are now in lease-up, and a hotel that was completed in 2023 and is being stabilized.

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

Additionally, we have a pipeline of future value-add opportunities in our target markets of Southeast Florida, the Washington, D.C.

As of March 31, 2025, we had one multifamily development project under construction, three multifamily communities that have been substantially completed and are now in lease-up.

In addition to our core multifamily developments, The Benson Hotel was completed in 2023 and remains in the stabilization process.

We have a pipeline of future value-add opportunities totaling approximately 7.7 million gross square feet of development in our target markets of Southeast Florida, the Washington, D.C.

Metro Area, and Colorado's Front Range.

During the three and nine months ended September 30, 2024, $29.6 million and $102.2 million of capital was invested in development and redevelopment activities, respectively, primarily funded through construction loan draws, compared to $74.4 million and $220.4 million, respectively, during the same periods in 2023.

Highlights for the three months ended September 30, 2024 include:

• In the third quarter, construction began in Miami’s Edgewater neighborhood on 34th Street, an ultra-luxury waterfront residential tower that will include a highly tailored amenity package and approximately 7,000 square feet of ground floor retail space.

The rental homes will average more than 2,500 square feet, feature 9 – 10 foot ceilings, oversized private terraces, top-of-the-line finishes, and unobstructed views of Biscayne Bay.

• In Upper Northwest Washington, D.C., construction is substantially complete at Upton Place.

As of September 30, 2024, we have delivered all 689 apartment homes with 284 units leased or pre-leased at rental rates greater than underwriting.

Additionally, as of September 30, 2024, 90% of the project's 105,000 square feet of retail space has been leased.

• In Bethesda, Maryland, construction is substantially complete at the first phase of Strathmore Square.

As of September 30, 2024, we have delivered all 220 highly tailored apartment homes with 64 units leased or preleased with rents ahead of our initial projections, and 46 homes were occupied.

• In Corte Madera, CA, construction is ongoing at Oak Shore where 16 luxury single family rental homes and eight accessory dwelling units are being developed.

As of September 30, 2024, 19 residences had been delivered with 14 leased or pre-leased at rental rates greater than underwriting.

• In the third quarter of 2024, we invested $0.4 million into programming, design, documentation, and entitlement efforts related to select pipeline projects located in South Florida and on the Anschutz Medical Campus in Aurora, Colorado.

During the three months ended March 31, 2025, we invested $20.3 million in development and redevelopment activities compared to $42.8 million during the same period in 2024.

Highlights for the three months ended March 31, 2025 include:

• In Upper Northwest Washington, D.C., all 689 apartment homes at Upton Place were delivered in 2024 and construction is substantially complete.

As of March 31, 2025, 375 units were leased or pre-leased and 331 were occupied.

Additionally, as of March 31, 2025, 92% of the project’s 105,000 square feet of retail space has been leased.

• In Bethesda, Maryland, all 220 of the highly tailored apartment homes at the first phase of Strathmore Square were delivered in 2024 and construction is substantially complete.

As of March 31, 2025, 117 units had been leased and 99 were occupied.

• In Corte Madera, California, construction is complete at Oak Shore with all 16 ultra-luxury single-family rental homes and eight accessory dwelling units delivered.

As of March 31, 2025, the community was 83% leased or pre-leased.

• In Miami’s Edgewater neighborhood, construction remains on schedule and budget at 34th Street, an ultra-luxury waterfront residential tower that will include rental homes averaging more than 2,500 square feet, with oversized private terraces, top-of-the-line finishes, and unobstructed views of Biscayne Bay.

We expect to welcome the first residents in 3Q 2027 and stabilize occupancy in 4Q 2028.

• In the first quarter of 2025, we invested $1.4 million into programming, design, documentation, and entitlement efforts primarily at our 901 North (Flagler Village Phase I) project in Fort Lauderdale, Florida.

Investment and Disposition Activity

1 unchanged sentence

Consistent with our capital allocation philosophy, we monetize the value within our assets when accretive uses of the proceeds are identified and invest when the risk adjusted returns are superior to other uses of capital.

In the three months ended September 30, 2024, no new investment or disposition activity occurred.

• In December 2024, we entered into an agreement to sell, during 2025, the Brickell Assemblage for a gross price of $520.0 million.

o The buyer’s initial non-refundable deposit of $38.0 million was increased in March 2025 to $43.0 million in exchange for the buyer extending closing to August of 2025, as allowed under the terms of the contract.

o The sale, remains subject to certain closing conditions and one remaining extension option which would extend closing at the buyer’s option to the fourth quarter of 2025, with such extension requiring the buyer to further increase its non-refundable deposit.

o Prior to closing, the buyer has the right to exercise an option to finance, for a period of 18 months, up to $115.0 million of the purchase price with a transferable seller financing note from Aimco.

If exercised, the purchase price increases by $20.0 million, to $540.0 million, and the note would carry an annual interest rate of 12%.

o Net proceeds from the transaction, accounting for the associated property-level debt and deferred tax liability, are estimated to range from $300.0 to $320.0 million depending on the buyer’s election regarding seller financing.

Upon receipt, we intend to return the majority of the net proceeds from the transaction to stockholders.

Balance Sheet and Financing Activities

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

As of September 30, 2024, we had access to $260.4 million in liquidity, including $82.6 million of cash on hand, $27.8 million of restricted cash, and the capacity to borrow up to $150.0 million on our revolving credit facility.

As of March 31, 2025, we had access to $225.2 million in liquidity, including $49.1 million of cash on hand, $27.6 million of restricted cash, and the capacity to borrow up to $148.5 million on our revolving credit facility.

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

Financial Results of Operations

We have three segments:

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

Our Development and Redevelopment segment consists of rental communities that are under construction or have not achieved and maintained stabilization throughout the current year and comparable period in the prior year, as well as land assemblages that are being held for future development.

Our Operating segment includes 21 residential apartment communities that have achieved stabilized levels of operations as of January 1, 2023, and maintained it throughout the current year and comparable period in the prior year.

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

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

Results of Operations for the three and nine months ended September 30, 2024 and 2023

Net income attributable to Aimco common stockholders decreased by $19.7 million and $78.0 million, respectively, for the three and nine months ended September 30, 2024, compared to the same periods in 2023, as described more fully below.

Results of Operations for the three months ended March 31, 2025 and 2024

Net income attributable to Aimco common stockholders decreased by $3.7 million, respectively, for the three months ended March 31, 2025, compared to the same period in 2024, as described more fully below.

Property Results

As of September 30, 2024, our Development and Redevelopment segment includes 10 properties, including two of which were under construction and two substantially completed and in lease-up.

Our Operating segment includes 21 residential apartment communities with approximately 5,600 apartment homes, and our Other segment includes 1001 Brickell Bay Drive, our only office building, and The Benson Hotel, our only hotel.

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.

In addition, during the first quarter of 2024, we disposed of St.

George Villas, which was previously reported within our Other segment.

Prior period segment information has been recast based upon our current segment population, and is consistent with how our CODM evaluates the business.

The recast conforms with our reportable segment classification as of September 30, 2024.

We use proportionate property net operating income to assess the operating performance of our segments.

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, 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.

Please refer to Note 8 to the condensed consolidated financial statements in Item 1 for further discussion regarding our segments, including a reconciliation of these proportionate amounts to consolidated rental and other property revenues and property operating expenses.

Proportionate Property Net Operating Income

The results of our segments for the three months ended September 30, 2024 and 2023, as presented below, are based on segment classifications as of September 30, 2024 ( dollars in thousands ).

Three Months Ended September 30,

Rental and other property revenues, before utility reimbursements:

Development and Redevelopment

Property operating expenses, net of utility reimbursements:

Development and Redevelopment

Proportionate property net operating income:

Development and Redevelopment

For the three months ended September 30, 2024, compared to the same period in 2023:

• Development and Redevelopment proportionate property net operating income increased by $0.2 million, or 10.1%, due primarily to the delivery and initial lease-up of Upton Place and Strathmore Square.

• Operating proportionate property net operating income increased by $0.4 million, or 1.6%.

The increase was attributable primarily to a $1.6 million, or 4.1% increase in rental and other property revenues due to a $57 increase in average monthly revenue per apartment home to $2,415, and a 160-basis point increase in Average Daily Occupancy to 96.8%.

• Other proportionate property net operating income decreased by $0.5 million, or 30.0%.

The decrease was due primarily to vacated space at 1001 Brickell Bay Drive.

The results of our segments for the nine months ended September 30, 2024 and 2023, as presented below, are based on segment classifications as of September 30, 2024 ( dollars in thousands ).

Nine Months Ended September 30,

We have three segments:

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

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, 2025, our Development and Redevelopment segment consists of 9 properties, including one under construction and three substantially completed and in lease-up.

Our Operating segment includes 20 residential apartment communities with 5,243 apartment homes that have achieved a stabilized level of operations as of January 1, 2024 and maintained it throughout the current year and comparable period.

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

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

Our Other segment includes The Benson Hotel, our only hotel.

Prior period segment information has been recast based upon our current segment population, and is consistent with how our President and Chief Executive Officer, the chief operating decision maker (“CODM”) evaluates the business.

We use property net operating income (“PNOI”) to assess the operating performance of our segments.

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

but 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;

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

Please refer to Note 8 to the condensed consolidated financial statements in Item 1 for further discussion regarding our segments, including a reconciliation of these amounts to consolidated rental and other property revenues and property operating expenses.

Property Net Operating Income

The results of our segments for the three months ended March 31, 2025 and 2024, as presented below, are based on segment classifications as of March 31, 2025 ( dollars in thousands ).

Three Months Ended March 31,

Rental and other property revenues, before utility reimbursements:

2 unchanged sentences

Development and Redevelopment

Proportionate property net operating income:

Property net operating income:

Development and Redevelopment

For the nine months ended September 30, 2024, compared to the same period in 2023:

• Development and Redevelopment proportionate property net operating income increased by $2.0 million, or 38.8%, due primarily to the lease up of delivered apartment homes.

• Operating proportionate property net operating income increased by $3.1 million, or 4.0%.

For the three months ended March 31, 2025, compared to the same period in 2024:

• Development and Redevelopment property net operating income increased by $2.3 million, due primarily to the lease-up of Upton Place, Strathmore Square, and Oak Shore.

• Operating property net operating income increased by $0.7 million, or 2.7%.

The increase was attributable primarily to a $0.9 million, or 2.7% increase in rental and other property revenues due to a $60 increase in average monthly revenue per apartment home to $2,309.

• Other proportionate property net operating income increased by $0.2 million, or 3.9%.

The increase was due primarily to additional revenue in 2024 at The Benson Hotel partially offset by lower revenue at 1001 Brickell Bay Drive.

• Other property net operating income decreased by $0.1 million, or 11.8% primarily due to higher real estate taxes.

Non-Segment Real Estate Operations

Operating income amounts not attributed to our segments include property management costs, casualty losses, and, if applicable, the results of apartment communities sold or held for sale, reported in consolidated amounts, which we do not allocate to our segments for purposes of evaluating segment performance.

For the three months ended March 31, 2025 and 2024, other property operating expenses not allocated to segments were $1.5 million and $1.9 million, respectively.

For the three months ended March 31, 2025 and 2024, properties that were sold or classified as held for sale generated property net operating income of $4.6 million and $7.7 million, respectively.

Depreciation and Amortization

For the three months ended September 30, 2024, compared to the same period in 2023, Depreciation and amortization expense increased by $5.7 million, or 32.2% due primarily to the substantial completion of Upton Place and Strathmore Square in 2024.

For the nine months ended September 30, 2024, compared to the same period in 2023, Depreciation and amortization expense increased $14.0 million, or 27.4% due primarily to the substantial completion of Upton Place and Strathmore Square, as well as the completion of The Benson Hotel during the second quarter of 2023.

For the three months ended March 31, 2025, compared to the same period in 2024, Depreciation and amortization expense decreased by $3.0 million, or 15.7% due primarily to the disposition of The Hamilton and the classification of the Brickell Assemblage as held for sale in December 2024, partially offset by the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024.

General and Administrative Expenses

For the three and nine months ended September 30, 2024, compared to the same periods in 2023, General and administrative expenses decreased by $0.4 million, or 5.5%, and $0.6 million, or 2.5%, respectively, due primarily to a decrease in expenses for consulting services per the Master Services Agreement with AIR, which concluded at December 31, 2023.

For the three months ended March 31, 2025, compared to the same periods in 2024, General and administrative expenses decreased by $0.4 million, or 4.3%.

Interest Income

For the three months ended September 30, 2024, compared to the same period in 2023, Interest income decreased by $0.2 million, or 7.5%.

For the nine months ended September 30, 2024, compared to the same period in 2023, Interest income increased by $0.5 million, or 6.6%.

These changes were primarily due to interest earned on seller financing provided in connection with the sale of a land parcel in December 2023, partially offset by a reduction in invested cash.

For the three months ended March 31, 2025, compared to the same period in 2024, Interest income decreased by $0.6 million, or 21.0%, due primarily to a decrease earned on amounts of invested cash.

Interest Expense

For the three and nine months ended September 30, 2024, compared to the same periods in 2023, Interest expense increased by $10.8 million and $21.6 million, respectively, due primarily to increased non-recourse construction loan draws and reduced capitalization as development projects are advanced and completed, partially offset by the repayment of certain non-recourse property debt in 2023 .

For the three months ended March 31, 2025, compared to the same periods in 2024, Interest expense increased by $4.1 million, or 30.4%, due primarily to increased non-recourse construction loan draws and reduced capitalization as development projects are advanced and completed, partially offset by the repayment of certain non-recourse construction loans in December 2024 .

Realized and Unrealized Gains (Losses) on Interest Rate Contracts

We are required to adjust our interest rate contracts to fair value on a quarterly basis.

As a result of the mark-to-market adjustments, we recorded unrealized losses of $2.6 million and $4.1 million, respectively, for the three and nine months ended September 30, 2024, compared to unrealized losses of $0.5 million and unrealized gains of $0.1 million, respectively, for the same periods in 2023.

In addition, we realized gains of $1.5 million and $5.3 million for the three and nine months ended September 30, 2024, respectively, compared to realized gains of $1.5 million and $3.2 million, respectively, for the same periods in 2023.

As a result of the mark-to-market adjustments, we recorded unrealized losses of $0.6 million for the three months ended March 31, 2025, compared to unrealized losses of $0.2 million for the same period in 2024.

In addition, we realized gains of $0.3 million for the three months ended March 31, 2025, compared to realized gains of $1.9 million, respectively, for the same periods in 2024.

Realized and Unrealized Gains (Losses) on Equity Investments

1 unchanged sentence

In addition, we measure our investment in IQHQ 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.

As a result of changes in the values of these investments, we recorded unrealized losses of $0.6 million and $48.1 million, respectively, for the three and nine months ended September 30, 2024.

During the second

quarter of 2024, we recognized a $47.0 million non-cash impairment on our investment in IQHQ.

For the same periods in 2023, we recorded unrealized losses of $1.1 million and unrealized gains of $0.2 million, respectively.

As a result of changes in the values of these investments, we recorded unrealized losses of $0.4 million for the three months ended March 31, 2025.

For the same period in 2024, we recorded unrealized losses of $0.3 million.

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, as well as activity related to our Mezzanine Investment and unconsolidated real estate partnerships.

For the three months ended September 30, 2024, compared to the same period in 2023, Other income (expense), net changed by $1.9 million, or 95.0%, primarily due to a non-cash other than temporary impairment recognized on our investment in an unconsolidated investment in land held for development in the current period.

For the nine months ended September 30, 2024, compared to the same period in 2023, Other income (expense), net changed by $0.1 million, or 0.8%, 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 in the prior period, partially offset by a non-cash other than temporary impairment recognized on our investment in an unconsolidated investment in land held for development in the current period.

For the three months ended March 31, 2025, compared to the same period in 2024, Other income (expense), net changed by $1.1 million, or 69.9%, primarily due to the cessation of amortization of transaction costs associated with the partial sale of the Mezzanine Investment.

Income Tax Benefit (Expense)

Certain aspects of our operations, including our development and redevelopment activities, are conducted through TRS entities.

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

Additionally, our TRS entities hold our investment in 1001 Brickell Bay Drive.

Our income tax benefit (expense) calculated in accordance with GAAP includes income taxes associated with the income or loss of our TRS entities.

1 unchanged sentence

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 and nine months ended September 30, 2024, we had consolidated net losses subject to tax of $9.7 million and $21.6 million, respectively, compared to consolidated net losses subject to tax of $5.0 million and $12.4 million, respectively, for the same periods in 2023.

For the three months ended September 30, 2024, we recognized an income tax benefit of $3.8 million, compared to an income tax benefit of $6.2 million for the same period in 2023.

The decrease is due primarily to a change in estimate associated with finalizing the 2022 tax returns in the third quarter of 2023.

For the nine months ended September 30, 2024, we recognized an income tax benefit of $8.7 million, compared to an income tax benefit of $10.8 million for the same period in 2023.

The decrease is due primarily to a change in estimate associated with finalizing the 2022 tax returns in third quarter of 2023, partially offset by the tax effect of fewer gains, increased depreciation, and interest expense associated with properties owned by, and activities of, our TRS entities.

For the three months ended March 31, 2025, we had consolidated net losses subject to tax of $2.3 million compared to consolidated net losses subject to tax of $6.6 million, for the same period in 2024.

For the three months ended March 31, 2025, we recognized an income tax benefit of $0.1 million, compared to an income tax benefit of $2.7 million for the same period in 2024.

The decrease is due primarily to the tax effect of reduced depreciation in 2025 associated with properties owned by, and activities of, our TRS entities.

Critical Accounting Estimates

1 unchanged sentence

Our critical accounting estimates that involve our more significant judgments and estimates used in the preparation of our consolidated financial statements are detailed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of Aimco’s and Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no significant changes in our critical accounting estimates from those reported in our Form 10-K, other than as noted in our Form 10-Q for the period ended June 30, 2024, and we believe that the related judgments and assessments have been consistently applied and produce financial information that fairly depicts the financial condition, results of operations, and cash flows for all periods presented.

There have been no significant changes in our critical accounting estimates from those reported in our Form 10-K and we believe that the related judgments and assessments have been consistently applied and produce financial information that fairly depicts the financial condition, results of operations, and cash flows for all periods presented.

Non-GAAP Measures

3 unchanged sentences

Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)

EBITDAre and Adjusted EBITDAre are non-GAAP measures, which we believe are useful to investors, creditors, and rating agencies as a supplemental measure of our ability to incur and service debt because they are recognized measures of performance by the real estate industry and allow for comparison of our credit strength to different companies.

EBITDAre and Adjusted EBITDAre are non-GAAP measures, which we believe are useful to investors, creditors, and rating agencies as a supplemental measure of our ability to incur and service debt because they are recognized measures of performance by the real estate industry and facilitates comparison of our credit strength to other companies.

EBITDAre and Adjusted EBITDAre should not be considered alternatives to net income (loss) as determined in accordance with GAAP as indicators of liquidity.

10 unchanged sentences

• the non-cash (income) loss recognized on our Mezzanine Investment;

• the non-cash (income) loss recognized on a passive equity investment.

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2024 and 2023, is as follows ( in thousands ):

Three Months Ended September 30,

Nine Months Ended September 30,

• the unrealized (gains) losses recognized on our passive equity investments.

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three months ended March 31, 2025 and 2024, is as follows ( in thousands ):

Three Months Ended March 31,

Net income (loss)

1 unchanged sentence

Income tax (benefit) expense

Gain on disposition of real estate

Unrealized (gains) losses from investment in unconsolidated partnerships

Depreciation and amortization

5 unchanged sentences

Realized and unrealized (gains) losses on interest rate contracts

Unrealized (gains) losses on a passive equity investment

Unrealized (gains) losses on passive equity investments

Adjusted EBITDAre

2 unchanged sentences

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

As of September 30, 2024, our available liquidity was $260.4 million, which consisted of:

As of March 31, 2025, our available liquidity was $225.2 million, which consisted of:

• $49.1 million in cash and cash equivalents;

1 unchanged sentence

• $148.5 million of available capacity to borrow under our revolving secured credit facility.

As of September 30, 2024, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $163.7 million.

We also have unfunded commitments in the amount of $1.5 million related to four investments in entities that develop technology related to the real estate industry.

As of March 31, 2025, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $138.0 million.

We also have unfunded commitments in the amount of $1.2 million related to our investments in entities that develop technology related to the real estate industry.

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

4 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.

Our revolving secured credit facility matures in December 2024, prior to consideration of its one-year extension option that we intend to exercise.

Our revolving secured credit facility matures in December 2025.

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.

As of September 30, 2024, approximately 90% of our outstanding non-recourse property debt had a fixed interest rate and approximately 10% had a variable interest rate, all of which was hedged.

In addition, the weighted-average contractual rate on our non-recourse debt was 4.8% and 4.6% inclusive of interest rate caps, and the average remaining term to maturity was 5.9 years.

As of March 31, 2025, all of our outstanding non-recourse property debt had a fixed interest rate.

In addition, the weighted-average contractual rate on our non-recourse debt was 4.4%, and the average remaining term to maturity was 6.5 years.

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 sources of leverage are property-level debt and non-recourse construction loans, we also have a secured $150.0 million credit facility with a syndicate of financial institutions.

As of September 30, 2024, we had no outstanding borrowings under our revolving secured credit facility, which requires that we 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.

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

Our primary sources of leverage are non-recourse property-level debt and non-recourse construction loans.

We also have a secured $150.0 million credit facility with a syndicate of financial institutions with $148.5 million of available capacity at March 31, 2025.

Our revolving secured credit facility requires that we 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.

We are currently in compliance and expect to remain in compliance with these covenants through the credit facility's maturity.

Changes in Cash, Cash Equivalents, and Restricted Cash

1 unchanged sentence

Operating Activities

For the nine months ended September 30, 2024, net cash provided by operating activities was $46.2 million.

For the three months ended March 31, 2025, net cash provided by operating activities was $3.8 million.

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

Cash provided by operating activities for the nine months ended September 30, 2024, increased by $3.6 million compared to the same period in 2023, due primarily to increased net operating income driven by higher rents and the timing of balance sheet position changes, partially offset by increased interest expense.

Cash provided by operating activities for the three months ended March 31, 2025, decreased by $17.9 million compared to the same period in 2024, due primarily to the timing of balance sheet position changes and increased interest expense, partially offset by increased net operating income driven by higher rents.

Investing Activities

For the nine months ended September 30, 2024, net cash used in investing activities of $114.4 million consisted primarily of capital expenditures.

Net cash used in investing activities for the nine months ended September 30, 2024, decreased by $149.8 million compared to the same period in 2023, due primarily to decreased capital expenditures and the purchase of a short-term treasury bill in the prior period.

For the three months ended March 31, 2025, net cash used in investing activities of $19.7 million consisted primarily of capital expenditures.

Net cash used in investing activities for the three months ended March 31, 2025, decreased by $21.3 million compared to the same period in 2024, due primarily to decreased capital expenditures.

Financing Activities

For the nine months ended September 30, 2024, net cash provided by financing activities of $39.3 million consisted primarily of proceeds from non-recourse construction loans, offset by common stock repurchases and distributions to redeemable noncontrolling interests.

Net cash provided by financing activities for the nine months ended September 30, 2024, decreased by $68.3 million compared to the same period in 2023, due primarily to decreased proceeds from non-recourse construction loans, the sale of a participation in the Mezzanine Investment and the monetization of interest rate options in the prior period, offset by decreased principal repayments on non-recourse property debt.

For the three months ended March 31, 2025, net cash used in financing activities of $79.8 million consisted primarily of the payment of dividends on common stock and OP Units, offset by proceeds from non-recourse construction loans and contributions from redeemable noncontrolling interests.

Net cash used in financing activities for the three months ended March 31, 2025, changed by $100.3 million compared to the same period in 2024, due primarily to the payment of dividends and decreased proceeds from non-recourse construction loans, partially offset by increased contributions from redeemable noncontrolling interests.

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.

As of September 30, 2024, on a consolidated basis, we had approximately $81.3 million of variable-rate property-level debt outstanding and $365.1 million of variable-rate construction loans.

The impact of rising interest rates in recent history has been mitigated by our use of interest rate caps, which as of September 30, 2024, provided protection for our variable interest rate debt.

As of March 31, 2025, on a consolidated basis, we had no variable-rate property-level debt outstanding and $142.3 million of variable-rate construction loans outstanding.

The impact of rising interest rates is mitigated by our use of interest rate caps, which as of March 31, 2025, 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.

As of September 30, 2024, we estimate an increase or decrease in our variable rate indices of 100 basis points with constant credit risk spreads, would have no material impact on interest expense.

As of September 30, 2024, we held interest rate caps with $799.4 million notional value.

These instruments were acquired for $6.3 million and at September 30, 2024, were valued at $1.7 million.

As of September 30, 2024, we had $110.4 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.

As of March 31, 2025, we estimate an increase or decrease in our variable rate indices of 100 basis points with constant credit risk spreads, would have no material impact on interest expense.

As of March 31, 2025, we held interest rate caps with a maximum notional value of $370.3 million.

These instruments were acquired for $3.8 million and at March 31, 2025, were valued at $0.6 million.

As of March 31, 2025, we had $76.7 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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis