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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 157 added, 130 removed, 198 unchanged (59% of the section changed)

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

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

Forward Looking Statements

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

the possibility that Aimco’s stockholders do not approve the Plan of Sale and Liquidation;

changes in the amount and timing of the total liquidating distributions, including as a result of unexpected levels of transaction cost, delayed or terminated closings, liquidation costs or unpaid or additional liabilities and obligations;

the possibility of converting to a liquidating trust or other liquidating entity;

the ability of our Board to terminate the Plan of Sale and Liquidation, whether or not approved by stockholders;

the occurrence of any event, change or other circumstances that could give rise to the termination of the Plan of Sale and Liquidation;

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;

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and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of apartment communities presently owned by us.

In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership.

In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Code and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership.

Readers should carefully review our financial statements and the notes thereto, as well as Item 1A.

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

• 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;

• Diversified portfolio, consisting of value-add investments, a pipeline of land for potential future development, a 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.

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We are focused on providing superior total-return performance to stockholders, primarily through capital appreciation driven by accretive investment and active portfolio management over multi-year periods.

We do not presently intend to pay a regular quarterly cash dividend, but may periodically pay dividends for REIT tax purposes or to return a portion of profits to stockholders.

We do not presently intend to pay a regular quarterly cash dividend, but periodically pay dividends for REIT tax purposes or to return capital to stockholders.

Our financial objectives are to create value and produce superior, asset level, risk-adjusted returns on equity as measured by the investment period Internal Rate of Return (“IRR”) and the project-level Multiple on Invested Capital (“MOIC”).

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Our capital allocation strategy is designed to leverage our investment platform and optimize risk-adjusted returns for our stockholders.

We target a balanced allocation, which includes investments in “Value Add” and “Opportunistic” multifamily real estate, primarily located in Southeast Florida, the Washington, D.C.

Metro Area and Colorado’s Front Range, plus investment in a geographically diversified portfolio of “Core” and “Core-Plus” apartment communities.

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 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.

We have policies in place that support our current strategy, guide our investment allocations, and manage risk, including to hold 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.

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

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), including our suburban Boston portfolio of five consolidated properties under contract to be sold.

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.

We own a geographically diversified portfolio of 19 apartment communities (15 consolidated properties and four unconsolidated properties) with average rents in line with local market averages (generally defined as B class).

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.

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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.

Results for the three and six months ended June 30, 2025

The results from the execution of our business plan during the three and six months ended June 30, 2025 are described below.

Proposed Plan of Sale and Liquidation

Subsequent to quarter end, on November 10, 2025, our Board deemed advisable and approved the Plan of Sale and Liquidation.

The Plan of Sale and Liquidation provides for the Company’s complete liquidation and dissolution in accordance with Section 331, Section 336, and Section 346(a) of the Code and Maryland General Corporation Law.

Effectiveness of the Plan of Sale and Liquidation is subject to approval by the affirmative vote of the holders of Common Stock entitled to cast two-thirds of all votes entitled to be cast on the matter.

Aimco currently anticipates that the Plan of Sale and Liquidation would be submitted for stockholder approval at a special meeting of stockholders, expected to occur in early 2026.

The proposed Plan of Sale and Liquidation presents certain risks, and there can be no assurance that the Plan of Sale and Liquidation will result in any transaction or that the Plan of Sale and Liquidation will be completed.

Risk Factors in Part II of this report.

Results for the three and nine months ended September 30, 2025

The results from the execution of our business plan during the three and nine months ended September 30, 2025 are described below.

Financial Results and Highlights

• For the three and six months ended June 30, 2025, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.14) and $(0.24), respectively.

• For the three and six months ended June 30, 2025, net operating income from our Operating segment was $24.2 million, up 1.1%, and $49.3 million, up 1.9% year-over-year, respectively.

• Subsequent to quarter end, in August, we agreed to sell our suburban Boston portfolio of five properties located in Massachusetts, New Hampshire, and Rhode Island for $740.0 million.

Four of the five asset sales are expected to close during the third quarter of 2025, with the closing of the final asset expected in the fourth quarter 2025.

• Subsequent to quarter end, in July, the buyer with which we are under agreement to sell the Brickell Assemblage for $520.0 million exercised the final contractual closing extension option that required its non-refundable deposit to be increased by $7.0 million, bringing the total non-refundable deposit to $50.0 million.

Closing is now scheduled for the fourth quarter of 2025.

• 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 May, we purchased our development partner's interest in the first phase of development at Strathmore Square.

We also borrowed on our revolving credit facility to pay off a higher interest rate mezzanine loan used to fund construction of Strathmore Square.

• For the three and nine months ended September 30, 2025, net income attributable to Aimco common stockholders per share, on a fully dilutive basis, was $2.04 and $1.80, respectively.

• For the three and nine months ended September 30, 2025, property net operating income from our Operating segment was $11.6 million, down 3.4%, and $35.3 million, down 1.9% year-over-year, respectively.

• In September, we sold four suburban Boston properties for $490.0 million.

We retired the associated debt and distributed $2.23 per share to stockholders by way of a special cash dividend paid subsequent to quarter end, on October 15, 2025.

The fifth and final suburban Boston asset sold subsequent to quarter end, in October, for $250.0 million.

Operating Property Results

We own a diversified portfolio of stabilized apartment communities located in eight major U.S.

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

Highlights for the three months ended June 30, 2025 include:

We own a diversified portfolio of stabilized operating properties which now includes 15 apartment communities with average rents in line with local market averages (generally defined as B class).

Highlights for the three months ended September 30, 2025 include:

• Revenue for our Operating segment was $18.2 million, up 1.2% year-over-year, resulting from a $74 increase in average monthly revenue per apartment home to $2,531 and occupancy of 94.8%, down 180 basis points year-over-year.

Revenue was negatively impacted by approximately 35 bps in the quarter due to a commercial tenant vacancy in New York City.

• Expenses for our Operating segment were $11.2 million, up 3.9% year-over-year primarily due to higher real estate taxes from a multi-year property assessment at our Nashville property, which assessment is being appealed.

• Net operating income for our Operating segment was $24.2 million, up 1.1% year-over-year.

• Expenses for our Operating segment were $6.6 million, up 10.5% year-over-year primarily related to the net impact of real estate tax assessments and appeals.

• Property net operating income for our Operating segment was $11.6 million, down 3.4% year-over-year.

Value Add and Opportunistic Investments

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

As of June 30, 2025, we had one multifamily development project under construction, two multifamily communities that have been substantially completed and are now in lease-up, and one that completed lease-up and is stabilizing operations.

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 six months ended June 30, 2025, we invested $22.1 million and $42.4 million, respectively, in development and redevelopment activities, primarily funded through construction loan and preferred equity, compared to $29.8 million and $72.6 million, respectively, during the same period in 2024.

Highlights for the three months ended June 30, 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 June 30, 2025, 473 (69%) units were leased or pre-leased and 386 (56%) were occupied.

Additionally, as of June 30, 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 June 30, 2025, 164 (75%) units had been leased and 139 (63%) were occupied.

• In Corte Madera, California, construction is complete at Oak Shore.

As of June 30, 2025, the ultra-luxury single-family rental community was 96% leased with 23 (96%) of the 24 homes occupied.

• 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 second quarter of 2025, we invested $2.5 million into programming, design, documentation, and entitlement efforts primarily at our 901 North development site, located in Fort Lauderdale, Florida.

As of September 30, 2025, we had one multifamily development project under construction, two multifamily communities that have been completed and are now in lease-up, and one that completed lease-up and is stabilizing operations.

During the three and nine months ended September 30, 2025, we invested $25.8 million and $68.2 million, respectively, in development and redevelopment activities, primarily funded through construction loan and preferred equity draws, compared to $29.8 million and $102.3 million, respectively, during the same period in 2024.

Highlights for the three months ended September 30, 2025 include:

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

As of September 30, 2025, 521 (76%) units were leased or pre-leased and 496 (72%) were occupied.

The pace of absorption slowed during the third quarter and we now expect the property to reach stabilization in the first quarter 2026.

Additionally, as of September 30, 2025, 97% 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 complete.

As of September 30, 2025, 185 (84%) units had been leased and 169 (77%) were occupied.

We now expect the property to reach occupancy stabilization in the first quarter 2026.

• In Miami, Florida, construction remains on schedule and budget at 34th Street, an ultra-luxury waterfront residential tower.

Initial occupancy is scheduled for 3Q 2027 with stabilized occupancy in 4Q 2028.

• In the third quarter of 2025, we invested $1.7 million into programming, design, documentation, and entitlement efforts primarily at our 901 North development site, located in Fort Lauderdale, Florida.

Investment and Disposition Activity

We are focused on prudently allocating capital and delivering strong investment returns.

Consistent with our capital allocation philosophy, we aim to 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.

• Subsequent to quarter end, in August 2025, we entered into a definitive agreement to sell our portfolio of five apartment properties, including 2,719 units, located in suburban Boston for $740.0 million.

The buyer has completed

due diligence and made a $20.0 million non-refundable deposit.

Four of the five asset sales are expected to close during the third quarter of this year, with closing of the final asset expected in the fourth quarter of 2025 to accommodate the assumption of the property loan.

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

Subsequent to quarter end, in July 2025, the buyer exercised its final closing extension option and increased its non-refundable deposit by $7.0 million, bringing the total non-refundable deposit to $50.0 million.

Closing is now scheduled for the fourth quarter of 2025.

• In May, we purchased, for $2.1 million, our development partner's 5% common equity interest in Strathmore Square.

In addition, we purchased the same development partner's subordinated interest for $2.9 million, a value representing approximately 60% of its expected future obligation.

We currently anticipate that the Plan of Sale and Liquidation would be submitted for stockholder approval at a special stockholder meeting, expected to occur in early 2026.

Additional information regarding the Plan of Sale and Liquidation will be made available in the Company’s filings with the U.S.

Securities and Exchange Commission.

We do not intend to disclose or comment on the sales and marketing of individual assets, or any other strategic transactions, until we determine that further disclosure is appropriate or required.

• In August 2025, we entered into a definitive agreement to sell our portfolio of five apartment properties, including 2,719 units, located in suburban Boston for $740.0 million.

o In September 2025, we completed the sale of four suburban Boston properties for $490.0 million with proceeds primarily used to retire associated mortgage loans, pay off in full the balance drawn on our revolving credit facility, and fund a $2.23 per share special dividend distribution to stockholders paid on October 15, 2025.

o Subsequent to quarter end, in October 2025, we completed the sale of our last remaining apartment community located in suburban Boston for $250.0 million.

In connection with the sale, $173.4 million of non-recourse property debt was assumed by the buyer.

We plan to use net proceeds from the sale to reduce leverage and for general corporate purposes.

• The Brickell Assemblage remains under contract to be sold for $520 million.

o During the third quarter, the buyer notified us that it intended to exercise its option, as permitted in the December 30, 2024 agreement, to finance up to $115 million of the purchase price with transferable seller financing from Aimco.

o Subsequent to quarter end, on November 8, 2025, the purchase and sale agreement was amended such that closing is now scheduled for December of 2025 and the buyer will finance $70 million of the $520 million purchase price with transferable seller financing notes from Aimco.

The seller financing notes will have a term of 24 months with compounding interest rate that increases from 12% to 22% over the duration of the loan as well as exit fees ranging from 1% to 4%.

o In addition, on November 10, 2025, $15 million of the $50 million non-refundable deposit has been released to Aimco with the remainder being held in escrow, $20 million is to be released to Aimco on the original closing date, November 18, 2025, and $15 million will be applied at closing.

o Net proceeds, when accounting for associated property-level debt, the monetization of the seller financing note, the deferred tax liability, and transaction costs, are expected to be approximately $300 million.

• Subsequent to quarter end, in October, we completed a transfer of ownership interests with our joint venture partner at the development land sites along Broward Avenue in Fort Lauderdale, Florida.

We exchanged our joint venture ownership in the non-performing seller financing note secured by 200 Broward Avenue along with $7.5 million of cash, for full ownership of 300 Broward Avenue.

Balance Sheet and Financing Activities

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

As of June 30, 2025, we had access to $173.5 million in liquidity, including $41.4 million of cash on hand, $26.4 million of restricted cash, and the capacity to borrow up to $105.7 million on our $150.0 million revolving credit facility.

We are highly focused on maintaining a strong balance sheet, including ample liquidity.

As of September 30, 2025, we had access to $425.1 million in liquidity, including $404.4 million of cash on hand ($327.3 million of which funded the special dividend paid on October 15, 2025) and $20.7 million of restricted cash.

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

• In May 2025, we borrowed $42.8 million on our revolving credit facility to pay off the mezzanine loan used to fund the construction of the first phase of Strathmore Square.

The mezzanine loan carried an interest rate of 13.0%, approximately 650 basis points higher than the average rate on the revolving credit facility borrowings during the second quarter 2025.

• Our Boston portfolio, which is under contract to sell, serves as collateral for our revolving credit facility.

As such, at the sale closing, the balance borrowed in May 2025 will be repaid and the facility will be retired.

We plan to maintain prudent liquidity following the facility's retirement.

As of September 30, 2025, 100% of our total debt was either fixed rate or hedged with interest rate cap protection.

Considering investments under contract to sell and including contractual extensions, we have no debt maturing prior to June 2027.

• In September, we used proceeds from the sale of four suburban Boston properties to pay down in full the borrowings on our revolving credit facility.

Certain of the properties sold served as collateral for the credit facility, which was retired upon completion of the sales.

Financial Results of Operations

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 six months ended June 30, 2025 and 2024

Net loss attributable to Aimco common stockholders decreased by $41.2 million and $37.5 million, respectively, for the three and six months ended June 30, 2025, compared to the same period in 2024, as described more fully below.

Results of Operations for the three and nine months ended September 30, 2025 and 2024

Net income (loss) attributable to Aimco common stockholders changed by $308.6 million and $346.1 million, respectively, for the three and nine months ended September 30, 2025, compared to the same period in 2024, as described more fully below.

Property Results

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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 June 30, 2025, our Development and Redevelopment segment consists of 9 properties, including one under construction, two substantially completed and in lease-up, and one that has completed lease-up and is stabilizing operations.

As of September 30, 2025, our Development and Redevelopment segment consists of 9 properties, including one under construction, two completed and in lease-up, and one that has completed lease-up and is stabilizing operations.

Our Operating segment includes 15 residential apartment communities with 2,524 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.

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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.

During the three months ended September 30, 2025, we reclassified as discontinued operations the five properties within our Boston portfolio, which was previously reported within the Operating segment.

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

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Property Net Operating Income

The results of our segments for the three months ended June 30, 2025 and 2024, as presented below, are based on segment classifications as of June 30, 2025 ( dollars in thousands ).

Three Months Ended June 30,

The results of our segments for the three months ended September 30, 2025 and 2024, as presented below, are based on segment classifications as of September 30, 2025 ( dollars in thousands ).

Three Months Ended September 30,

Rental and other property revenues, before utility reimbursements:

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Development and Redevelopment

For the three months ended June 30, 2025, compared to the same period in 2024:

For the three months ended September 30, 2025, compared to the same period in 2024:

• Development and Redevelopment property net operating income increased by $3.8 million, due primarily to the lease-up of Upton Place, Strathmore Square, and Oak Shore.

• Operating property net operating income increased by $0.3 million, or 1.1%.

The increase was attributable primarily to a $0.7 million, or 1.9% increase in rental and other property revenues due to a $57 increase in average monthly revenue per apartment home to $2,349, offset by higher real estate taxes, primarily due to a multi-year property assessment at our Nashville property, which assessment is being appealed.

• Other property net operating income decreased by $0.5 million, due primarily to higher real estate taxes from a 2025 property assessment, which assessment is being appealed.

The results of our segments for the six months ended June 30, 2025 and 2024, as presented below, are based on segment classifications as of June 30, 2025 ( dollars in thousands ).

Six Months Ended June 30,

• Operating property net operating income decreased by $0.4 million, or 3.4%.

The decrease was attributable primarily to an increase in real estate taxes at our Chicago properties, which assessment is being appealed, offset by an increase in rental and other property revenues due to a $74 increase in average monthly revenue per apartment home to $2,531.

• Other property net operating income increased by $0.7 million, due primarily to an increase in food and beverage sales and a decrease in real estate taxes due to the successful appeal in the third quarter of 2025.

The results of our segments for the nine months ended September 30, 2025 and 2024, as presented below, are based on segment classifications as of September 30, 2025 ( dollars in thousands ).

Nine Months Ended September 30,

Rental and other property revenues, before utility reimbursements:

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Development and Redevelopment

Proportionate property net operating income:

Property net operating income:

Development and Redevelopment

For the six months ended June 30, 2025, compared to the same period in 2024:

For the nine months ended September 30, 2025, compared to the same period in 2024:

• Development and Redevelopment property net operating income increased by $9.3 million, due primarily to the lease-up of Upton Place, Strathmore Square, and Oak Shore.

• Operating property net operating income increased by $0.9 million, or 1.9%.

The increase was attributable primarily to a $1.6 million, or 2.3% increase in rental and other property revenues due to a $59 increase in average monthly revenue per apartment home to $2,329, offset by higher real estate taxes, primarily due to a multi-year property assessment at our Nashville property, which assessment is being appealed.

• Other property net operating income decreased by $0.6 million, due primarily to higher real estate taxes from a 2025 property assessments, which assessment is being appealed.

• Operating property net operating income decreased by $0.7 million, or 1.9%.

The decrease was attributable primarily to a multi-year property assessment at our Chicago properties, which assessment is being appealed, offset by an increase in rental and other property revenues due to a $53 increase in average monthly revenue per apartment home to $2,489.

Our Nashville property successfully appealed its multi-year property assessment in the third quarter of 2025.

• Other property net operating income increased by $0.1 million, due primarily to an increase in food and beverage sales offset by an increase in related operating expenses.

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 June 30, 2025 and 2024, other property operating expenses not allocated to segments were $1.8 million and $2.0 million, respectively.

For the three months ended June 30, 2025 and 2024, properties that were sold or classified as held for sale generated property net operating income of $4.5 million and $6.6 million, respectively.

For the six months ended June 30, 2025 and 2024, other property operating expenses not allocated to segments were $3.3 million and $3.9 million, respectively.

For the six months ended June 30, 2025 and 2024, properties that were sold or classified as held for sale generated property net operating income of $9.1 million and $14.3 million, respectively.

For the three months ended September 30, 2025 and 2024, other property operating expenses not allocated to segments were $0.9 million and $0.9 million, respectively.

For the three months ended September 30, 2025 and 2024, properties that were sold or classified as held for sale generated property net operating income of $3.1 million and $6.6 million, respectively.

For the nine months ended September 30, 2025 and 2024, other property operating expenses not allocated to segments were $3.0 million and $3.6 million, respectively.

For the nine months ended September 30, 2025 and 2024, properties that were sold or classified as held for sale generated property net operating income of $12.1 million and $20.9 million, respectively.

Please refer to Note 8 to the condensed consolidated financial statements in Item 1 for our Boston portfolio performance, which includes five apartment communities classified as discontinued operations.

Depreciation and Amortization

For the three and six months ended June 30, 2025, compared to the same periods in 2024, Depreciation and amortization expense decreased by $5.7 million, or 26.0%, and $8.8 million, or 21.2%, respectively, 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.

For the three and nine months ended September 30, 2025, compared to the same periods in 2024, Depreciation and amortization expense decreased by $5.2 million, or 24.1%, and $13.0 million, or 22.4%, respectively, 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 months ended June 30, 2025, compared to the same period in 2024, General and administrative expenses increased by $0.2 million, or 2.9%.

For the six months ended June 30, 2025, compared to the same period in 2024, General and administrative expenses decreased by $0.1 million, or 0.9%.

For the three months ended September 30, 2025, compared to the same period in 2024, General and administrative expenses decreased by $0.2 million, or 2.9%.

For the nine months ended September 30, 2025, compared to the same period in 2024, General and administrative expenses decreased by $0.4 million, or 1.6%.

Impairment of Real Estate

Based on periodic tests of recoverability of long-lived assets, during the three and nine months ended September 30, 2025, we recognized impairment losses totaling $57.4 million.

No impairment losses were recognized in the same periods in 2024.

The impairment losses were recognized primarily due to the reductions in the estimated period over which we expect to hold the properties, coupled with reductions in the estimated fair values of the assets as compared to their carrying amounts.

Interest Income

For the three and six months ended June 30, 2025, compared to the same periods in 2024, Interest income decreased by $1.0 million, or 39.0%, and $1.5 million, or 29.8%, respectively, due primarily to a decrease earned on amounts of invested cash.

For the three and nine months ended September 30, 2025, compared to the same periods in 2024, Interest income decreased by $0.8 million, or 33.3%, and $2.3 million, or 30.8%, respectively, due primarily to a decrease earned on amounts of invested cash.

Interest Expense

For the three and six months ended June 30, 2025, compared to the same periods in 2024, Interest expense increased by $1.2 million, or 7.0%, and $5.3 million, or 17.4%, respectively, due primarily to increased non-recourse construction loan draws and reduced capitalization due to the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024, partially offset by the repayment of certain non-recourse construction loans in December 2024 and use of the revolving credit facility to pay off a higher interest rate non-recourse construction loan in May 2025.

For the three months ended September 30, 2025, compared to the same period in 2024, Interest expense decreased by $2.3 million, or 14.0%, due primarily to the repayment of certain non-recourse construction loans in December 2024 and use of the revolving credit facility to pay off a higher interest rate non-recourse construction loan in May 2025.

For the nine months ended September 30, 2025, compared to the same period in 2024, Interest expense increased by $3.0 million, or 7.3%, due primarily to increased non-recourse construction loan draws and reduced capitalization due to the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024, partially offset by the repayment and refinancing of certain non-recourse construction loans in December 2024 and use of the revolving credit facility to pay off a higher interest rate non-recourse construction loan in May 2025.

In September 2025, we used proceeds from the sale of four Boston properties to paydown in full the borrowings and retire the revolving credit facility.

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 $0.3 million for the three months ended June 30, 2025, and unrealized losses of $0.8 million for the six months ended June 30, 2025.

As a result of the mark-to-market adjustments, we recorded unrealized losses of $0.4 million for the three months ended September 30, 2025, and unrealized losses of $1.2 million for the nine months ended September 30, 2025.

We recorded unrealized losses of $2.6 million and $4.1 million, respectively, for the same periods in 2024.

In addition, we realized gains of $0.2 million for the three months ended June 30, 2025, and realized gains of $0.5 million for the six months ended June 30, 2025, respectively, compared to realized gains of $1.9 million and $3.8 million, respectively, for the same periods in 2024.

In addition, we realized gains of $0.3 million for the three months ended September 30, 2025, and realized gains of $0.8 million for the nine months ended September 30, 2025, respectively, compared to realized gains of $1.5 million and $5.3 million, respectively, for the same periods in 2024.

Realized and Unrealized Gains (Losses) on Equity Investments

We measure our investments in stock based on its market price at period end and our investments in property technology funds at NAV as a practical expedient.

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

Prior to the sale of our investment in stock during the three months ended September 30, 2025, we measured our investments in stock based on its market price at period end.

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 $0.2 million and $0.6 million, respectively, for the three and six months ended June 30, 2025.

For the same periods in 2024, we recorded unrealized losses of $47.3 million and $47.5 million, respectively, primarily due to a $47.0 million non-cash impairment recognized on our investment in IQHQ.

As a result of changes in the values of these investments, we recorded net losses of $4.9 million and $5.5 million, respectively, for the three and nine months ended September 30, 2025.

For the same periods in 2024, we recorded net losses of $0.6 million and $48.1 million, respectively.

During the three and nine months ended September 30, 2025, we recorded a $6.2 million non-cash impairment recognized on our investment in IQHQ compared to $47.0 million recorded in the second quarter of 2024.

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 and six months ended June 30, 2025, compared to the same periods in 2024, Other income (expense), net changed by $1.2 million, or 94.4%, and by $2.3 million, or 80.8%, respectively, primarily due to an increase in income related to our Mezzanine Investment, offset by costs associated with our ongoing strategic review.

For the three and nine months ended September 30, 2025 compared to the same periods in 2024 Other income (expense), net changed by $4.9 million and $7.2 million, respectively, primarily due to an increase in income related to our Mezzanine Investment and the non-cash other than temporary impairment recognized on our investment in an unconsolidated investment in the third quarter of 2024.

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 our investment in 1001 Brickell Bay Drive.

Certain aspects of our operations are conducted through taxable REIT subsidiaries, or “TRS entities”.

Additionally, our TRS entities hold an investment in 1001 Brickell Bay Drive and Oak Shore.

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

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 and six months ended June 30, 2025, we had consolidated net losses subject to tax of $0.9 million and $3.2 million, respectively, compared to consolidated net losses subject to tax of $5.3 million and $11.9 million, respectively, for the same period in 2024.

For the three and six months ended June 30, 2025, we recognized income tax expense of $5.6 million and $5.5 million, respectively, compared to an income tax benefit of $2.2 and $4.9 million, respectively, during the same periods in 2024.

The change in income tax expense is due primarily to the recognition of a non-cash partial valuation allowance against the deferred tax assets of our TRS entities and the tax effect of reduced depreciation in 2025 associated with properties owned by, and activities of, our TRS entities.

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 nine months ended September 30, 2025, we had consolidated net losses subject to tax of $2.7 million and $5.9 million, respectively.

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.

For the three months ended September 30, 2025, we recognized income tax benefit attributable to continuing operations of $0.1 million compared to $3.8 million during the same period in 2024.

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

For the nine months ended September 30, 2025, we recognized income tax expense attributable to continuing operations of $5.4 million, compared to an income tax benefit of $8.7 million during the same period in 2024.

The change in income tax benefit (expense) is due primarily to the tax effect of reduced depreciation in 2025 associated with properties owned by, and activities of, our TRS entities, partially offset by the recognition of a non-cash partial valuation allowance against the deferred tax assets of our TRS entities in 2025.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

Significant provisions of the OBBBA include the permanent extension of certain provisions of the 2017 Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business provisions.

We are currently evaluating the tax consequences of the OBBBA.

The changes introduced by the OBBBA are not expected to have a material impact on our annual effective tax rate for 2025.

Income (loss) from Discontinued Operations, Net

The results of operations for consolidated properties that met the criteria required to be recognized within discontinued operations, whether sold during the period or designated as held for sale at the end of the period, are required to be classified as discontinued operations for all periods presented.

The components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, and property-specific interest expense.

In addition, the net gain or loss on the eventual disposal of properties are reported in discontinued operations, along with any related tax effects or allocation of income to noncontrolling interests in the results of the discontinued operations.

For the three and nine months ended September 30, 2025, we recognized income from discontinued operations, net, of $382.3 million and $397.4 million, respectively, compared to income from discontinued operations, net, of $7.3 million and $20.2 million, respectively, during the same periods in 2024.

The change in income from discontinued operations, net, is due primarily to the recognition of a gain on disposal of $377.1 million related to the sale of four properties in our suburban Boston portfolio.

Critical Accounting Estimates

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

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2025 and 2024, is as follows ( in thousands ):

Three Months Ended June 30,

Six Months Ended June 30,

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2025 and 2024, is as follows ( in thousands ):

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss)

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Depreciation and amortization

Impairment on real estate

Interest expense, depreciation, amortization, and income taxes related to discontinued operations

Gains on dispositions of real estate, including discontinued operations

Unrealized (gains) losses from investments in unconsolidated partnerships

Adjustment related to EBITDAre of unconsolidated partnerships

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Liquidity is the ability to meet present and future financial obligations.

As of June 30, 2025, our available liquidity was $173.5 million, which consisted of:

• $41.4 million in cash and cash equivalents;

As of September 30, 2025, our available liquidity was $425.1 million, which consisted of:

• $404.4 million in cash and cash equivalents ($327.3 million of which funded the special dividend paid on October 15, 2025);

• $20.7 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance.

• $105.7 million of available capacity to borrow under our revolving secured credit facility, after the consideration of outstanding borrowings of $42.8 million and $1.5 million of letters of credit backed by the facility.

As of June 30, 2025, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $125.1 million.

As of September 30, 2025, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $107.6 million.

We also have unfunded commitments in the amount of $1.1 million related to our investments in entities that develop technology related to the real estate industry.

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Those commitments generally have terms of one year or less and reflect expenditure levels comparable to historical levels.

We believe, based on the information available at this time, cash and cash equivalents, cash generated from operations, proceeds from planned dispositions, and borrowing capacity are sufficient sources of liquidity to meet our operational needs for the next twelve months.

Subsequent to quarter end, in November 2025, our Board deemed advisable and approved the Plan of Sale and Liquidation.

If the Plan of Sale and Liquidation is approved by our stockholders, we expect it will materially impact our short and long-term capital needs and liquidity requirements, and our plan to meet those needs.

As of September 30, 2025, whether the Plan of Sale and Liquidation is approved by our stockholders, we believe, based on the information available at this time, cash and cash equivalents, cash generated from operations, and proceeds from planned dispositions are sufficient sources of liquidity to meet our operational needs for the next twelve months.

In the event that these sources of liquidity are not sufficient to cover our liquidity needs, we have the means to generate additional liquidity, such as from additional property financing activity and proceeds from apartment community sales.

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

Our revolving secured credit facility, which matures in December 2025, will be retired upon the sale of the Boston portfolio.

Please refer to Note 9 to the condensed consolidated financial statements in Item 1 for further information.

Leverage and Capital Resources

The availability and cost of credit and its related effect on the overall economy may affect our liquidity and future financing activities, both through changes in interest rates and access to financing.

Any adverse changes in the lending environment could negatively affect our liquidity.

Any adverse changes in the lending environment, declines in our share price, and the effects of the announced Plan of Sale and Liquidation could negatively affect our liquidity.

We have taken steps to mitigate a portion of our short-term refunding risk.

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 June 30, 2025, all of our outstanding non-recourse property debt had a fixed interest rate.

As of September 30, 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 5.4 years.

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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.

As of June 30, 2025, we had $42.8 million of outstanding borrowing under our revolving loan commitments, as well as $1.5 million in letters of credit backed by the facility.

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 date in December 2025 or its retirement upon the sale of the Boston portfolio.

Please refer to Note 9 to the condensed consolidated financial statements in Item 1 for further information.

In September, we used proceeds from the sale of four suburban Boston properties to paydown in full $43.8 million of borrowings on our revolving credit facility.

Certain properties sold served as collateral for the credit facility, which was retired upon completion of the sales.

Changes in Cash, Cash Equivalents, and Restricted Cash

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Operating Activities

For the six months ended June 30, 2025, net cash provided by operating activities was $13.5 million.

For the nine months ended September 30, 2025, net cash provided by operating activities was $22.4 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 six months ended June 30, 2025, decreased by $16.2 million compared to the same period in 2024, due primarily to the timing of changes in operating assets and operating liabilities and increased interest expense, partially offset by increased net operating income driven by higher rents.

Net cash provided by operating activities for the nine months ended September 30, 2025, decreased by $23.7 million compared to the same period in 2024, due primarily to the timing of changes in operating assets and operating liabilities, decreased cash flows provided by operating activities from discontinued operations, and increased interest expense.

Investing Activities

For the six months ended June 30, 2025, net cash used in investing activities of $45.7 million consisted primarily of capital expenditures.

Net cash used in investing activities for the six months ended June 30, 2025, decreased by $31.7 million compared to the same period in 2024, due primarily to decreased capital expenditures.

For the nine months ended September 30, 2025, net cash provided by investing activities was $401.8 million.

Net cash provided by investing activities for the nine months ended September 30, 2025, changed by $516.2 million compared to the same period in 2024, due primarily to the sale of four real estate assets within our Boston portfolio and decreased capital expenditures.

Financing Activities

For the six months ended June 30, 2025, net cash used in financing activities of $72.4 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.

Proceeds from our revolving credit facility offset the payoff of a non-recourse construction loan.

Net cash used in financing activities for the six months ended June 30, 2025, changed by $90.3 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.

For the nine months ended September 30, 2025, net cash used in financing activities of $171.8 million.

Net cash used in financing activities for the nine months ended September 30, 2025, changed by $211.2 million compared to the same period in 2024, due primarily to the payment of dividends and distributions, principal repayments on non-recourse property debt associated with the four real estate assets within the Boston portfolio sold during the period, principal repayment on non-recourse construction loans and bridge financing, and decreased proceeds from non-recourse construction loans and bridge financing, partially offset by increased contributions from redeemable noncontrolling interests.

Future Capital Needs

We expect to fund any future acquisitions, development and redevelopment, and other capital spending principally with operating cash flows, short-term borrowings, and debt and equity financing.

Subsequent to quarter end, in November 2025, our Board deemed advisable and approved the Plan of Sale and Liquidation.

If the Plan of Sale and Liquidation is approved by our stockholders, we expect it will materially impact our short and long-term capital needs and our plan to meet those needs.

As of September 30, 2025, whether the Plan of Sale and Liquidation is approved by our stockholders, we believe, based on the information available at this time, that we have sufficient cash on hand and access to additional sources of liquidity to meet our operational needs for the next twelve months.

We expect to fund any future development and redevelopment, and other capital spending principally with operating cash flows, short-term borrowings, and debt and equity financing.

Our near-term business plan does not contemplate the issuance of equity.

We believe, based on the information available at this time, that we have sufficient cash on hand and access to additional sources of liquidity to meet our operational needs for the next twelve months.

QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK

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We use derivative financial instruments as a risk management tool and do not use them for trading or other speculative purposes.

As of June 30, 2025, on a consolidated basis, we had no variable-rate property-level debt outstanding and $155.8 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 June 30, 2025, provided protection for our variable interest rate debt.

As of September 30, 2025, on a consolidated basis, we had no variable-rate property-level debt outstanding and $168.3 million of variable-rate construction loans outstanding.

The impact of elevated interest rates is mitigated by our use of interest rate caps, which as of September 30, 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 June 30, 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 June 30, 2025, we held interest rate caps with a maximum notional value of $464.3 million.

These instruments were acquired for $3.6 million and at June 30, 2025, were valued at $0.5 million.

As of June 30, 2025, we had $67.8 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.

As of September 30, 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 September 30, 2025, we held interest rate caps with a maximum notional value of $370.3 million.

These instruments were acquired for $2.8 million and at September 30, 2025, were valued at $0.2 million.

As of September 30, 2025, we had $425.1 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