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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-24 · 159 added, 142 removed, 119 unchanged (72% of the section changed)

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Executive Overview

Our mission is to make real estate investments, primarily focused on the multifamily sector within targeted U.S.

markets, where outcomes are enhanced through our human capital and substantial value is created for investors, teammates, and the communities in which we operate.

Subsequent to December 31, 2025, on February 6, 2026, Common Stockholders adopted the Plan of Sale and Liquidation.

Prior to the adoption of the Plan of Sale and Liquidation, our mission was to make real estate investments, primarily focused on the multifamily sector within targeted U.S.

markets, where outcomes were enhanced through our human capital and substantial value was created for investors, teammates, and the communities in which we operated.

Subsequent to the Plan of Sale and Liquidation, we plan to sell our assets in an orderly fashion and return net proceeds from asset sales and cash on hand to our stockholders, subject to payment of our liabilities and obligations.

Please refer to “Item 1.

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Financial Results and Highlights

• For the year ended December 31, 2024, net loss attributable to common stockholders per share, on a fully dilutive basis, was a net loss per share of $0.75.

• For the year ended December 31, 2024, NOI from our Operating segment was $99.0 million, up 4.5% year-over-year, with average monthly revenue per apartment home increase by 3.8% to $2,290.

• For the year ended December 31, 2024, we substantially completed construction at Upton Place in Washington, D.C., Strathmore Square in Bethesda, Maryland, and Oak Shore in Corte Madera, California and advanced the lease-up of our recently completed developments.

• During the fourth quarter, we increased our ownership in Upton Place as our development partner exercised the option to sell their 10% interest in the asset.

Also, Aimco secured a bridge loan to replace the higher cost construction loan, and partially paydown a project-level preferred equity investor.

• During the third quarter, we began construction on an ultra-luxury residential tower located at 640 NE 34th Street ("34th Street") in the Edgewater neighborhood of Miami, Florida.

Total direct project costs for the 34th Street development are expected to be $240.0 million with initial occupancy scheduled in mid-2027.

• During the fourth quarter, we sold, for a total price at Aimco's share of $203.8 million, our interests in two investments in Miami, Florida:

The Hamilton, a recently completed redevelopment of a 276-unit apartment building, and a 2.8-acre development site at 3333 Biscayne Boulevard.

On December 19, 2024, Aimco's Board of Directors declared a $0.60 per share special cash dividend to distribute the net proceeds from these transactions to stockholders of record on January 14, 2025.

• During the fourth quarter, we reached an agreement to sell, in 2025, the Brickell Assemblage for $520.0 million, and the buyer's deposit of $38.0 million is non-refundable.

• For the year ended December 31, 2025, net income attributable to common stockholders per share, on a fully dilutive basis, was net income per share of $3.87.

• For the year ended December 31, 2025, property net operating income from our Operating segment was $47.6 million, down 2.0% year-over-year.

• In the fourth quarter of 2025, we sold our final suburban Boston property for $250 million and our Brickell Assemblage which included The Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building located in Miami, Florida for $520 million.

In total, we sold $1.26 billion of real estate assets in 2025.

• We distributed $2.23 per share to stockholders by way of a special cash dividend paid on October 15, 2025, bringing total 2025 dividends to $2.83 per share.

• In December, we agreed to sell our portfolio of seven apartment communities in the Chicago area for $455 million with the full $20 million deposit becoming non-refundable in January 2026.

Additionally, subsequent to year end, in the first quarter 2026, we received non-refundable deposits and agreed to sell two properties in New York City and one property in Atlanta, Georgia for a combined $56.5 million.

• Subsequent to year end, in February 2026, we sold three properties, Hillmeade in Nashville, Tennessee, Plantation Gardens in Plantation, Florida, and the Benson Hotel and Faculty Club in Aurora, Colorado for a combined $177.5 million.

• Our high-rise development project, 34th Street, located in Miami, Florida remains on schedule and on budget.

On February 6, 2026, Aimco stockholders adopted the Plan of Sale and Liquidation proposed by Aimco's Board of Directors.

Pursuant to this plan, Aimco expects to continue to monetize its assets and return proceeds to stockholders through liquidating distributions.

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

Securities and Exchange Commission.

• In October, we completed the monetization of its suburban Boston portfolio with the sale of an apartment property located in Nashua, New Hampshire for $250 million.

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

• 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.

• In December, we sold the Brickell Assemblage which included The Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building located in Miami, Florida for $520 million.

o The sale included $85 million of transferable and cross-collateralized seller financing notes we provided to the buyer at closing.

Each note has a two-year term and two one-year extension options with an average interest rate over the full duration of 18%.

As previously announced, we plan to monetize the seller financing notes.

o Initial net proceeds, after taking into account the associated property-level debt, the tax liability, transaction costs, and excluding the seller financing notes, were more than $220 million.

• Subsequent to year end, in January 2026 we monetized the subordinated seller financing note associated with property in La Jolla, California for $18.5 million.

The note had approximately seven years of term remaining at an average interest rate of approximately 5.5%.

• Subsequent to year end, in February 2026 we sold three properties, Hillmeade in Nashville, Tennessee, Plantation Gardens in Plantation, Florida, and The Benson Hotel and Faculty Club in Aurora, Colorado, for a combined $177.5 million.

• In December 2025, we agreed to sell our portfolio of seven apartment communities in the Chicago area for $455 million with a $20 million deposit becoming non-refundable in January 2026.

Closing is scheduled for the first quarter 2026.

• In the first quarter 2026, we agreed to sell two properties in New York City and one in Atlanta, Georgia for a combined $56.5 million with non-refundable deposits of $5.1 million.

Closings are scheduled for the second quarter 2026.

Operating Property Results

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

As of the year ended December 31, 2025, we own a diversified portfolio of 15 stabilized apartment communities, including two held for sale, located in U.S.

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

Highlights for the year ended December 31, 2025 include:

• Revenue for our Operating segment was $140.1 million, up 4.5% year over year, resulting from an $85 increase in average monthly revenue per apartment home to $2,290 and an increase in Average Daily Occupancy of 60-basis points to 97.2%.

• Expenses for our Operating segment were $41.1 million, up 4.4% year over year, due primarily to higher real estate taxes and insurance costs.

• Net operating income for our Operating segment was $99.0 million, up 4.5% year over year.

Value Add and Opportunistic Investments

Development and Redevelopment

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

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

As of December 31, 2024, we had one multifamily development project under construction and three multifamily communities that have been substantially completed and are now in lease-up.

In addition to Aimco's 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 year ended December 31, 2024, we invested $126.1 million in development and redevelopment activities compared to $274.9 million in the year ended December 31, 2023.

Highlights for the year ended December 31, 2024, include:

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

As of December 31, 2024, 314 homes were leased or pre-leased at rental rates greater than underwriting and 90% 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 have been delivered.

As of December 31, 2024, 84 homes were leased or preleased with rents in line with our initial projections, and 75 homes were occupied.

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

As of December 31, 2024, 16 homes were leased or pre-leased at rental rates greater than underwriting.

• During the third quarter, construction began in Miami's Edgewater neighborhood on 34th Street, an ultra-luxury waterfront residential tower that will include 7,000 square feet of retail and 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 at this $240.0 million project in 3Q 2027 and stabilize occupancy in 4Q 2028 .

• We invested $3.9 million into programming, design, documentation, and entitlement efforts primarily at our 901 North project in Fort Lauderdale, Florida.

Consistent with our capital allocation strategy, we may choose to monetize certain pipeline assets prior to vertical construction in an effort to maximize value add and risk-adjusted returns.

Investment and Disposition Activity

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

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.

Highlights for the year ended December 31, 2024 include:

• In the fourth quarter, Aimco increased its ownership interest in its Upton Place property by $19.1 million, as its development partner exercised the option to sell the entirety of their 10% interest in the asset.

• In the fourth quarter, we sold, for $203.8 million, our interests in two real estate investments in the Edgewater neighborhood of Miami, Florida, retired $110.1 million of associated liabilities, and, in December, declared a divided to return approximately $90.0 million of capital to stockholders in January 2025.

o The Hamilton, our recently completed major redevelopment was sold for $190.0 million.

o Our interest in 3333 Biscayne Boulevard, a 2.8-acre development site, was purchased by our joint venture partner at a gross valuation of $66.5 million or $13.8 million at our share of the venture.

• In the fourth quarter, we entered into an agreement to sell the Brickell Assemblage for a gross price of $520.0 million.

o The buyer’s initial deposit of $38.0 million is now non-refundable, and due diligence has been completed.

o The buyer can exercise an option to finance up to $115.0 million of the purchase price with a transferable seller financing note from Aimco for a period of 18 months at a rate of 12%.

If exercised, the purchase price increases by $20.0 million, to $540.0 million.

o The sale, which is subject to certain closing conditions and extension options, is scheduled to occur as early as March 2025 but may be extended at the buyer’s option to the fourth quarter of 2025, with such extensions requiring the buyer to increase its non-refundable deposit.

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.

We intend to return the majority of the net proceeds from the transaction upon receipt to stockholders.

• Revenue for our Operating segment was $72.5 million, up 1.2% year over year, resulting from a $56 increase in average monthly revenue per apartment home to $2,495 offset by a decrease in Average Daily Occupancy of 100-basis points to 96.0%.

• Expenses for our Operating segment were $24.9 million, up 7.9% year over year, due primarily to a multi-year property assessment at our Chicago properties, which assessments are being appealed.

• Net operating income for our Operating segment was $47.6 million, down 2.0% year over year.

Active Construction and Lease-up Assets

We plan to fulfill our contractual obligations and maximize value at our one multifamily development project under construction in Miami, Florida and complete the lease-up of our two recently completed Washington, D.C.

Metro Area multifamily communities.

We have ceased planning and predevelopment efforts for future projects.

During the year ended December 31, 2025, we invested $93.6 million in development activities compared to $126.1 million in the year ended December 31, 2024.

Updates on our one active development project and two lease-ups include:

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

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

• In Upper Northwest Washington, D.C., we expect to complete the lease up of 689 apartment homes at Upton Place during the second quarter 2026.

As of December 31, 2025, 527 (76%) were units were leased or pre-leased.

Additionally, as of December 31, 2025, 97% of the project's 105,000 square feet of retail space has been leased.

• In Bethesda, Maryland, we expect to complete the lease up of 220 of the highly tailored apartment homes at the first phase of Strathmore Square in the second quarter 2026.

As of December 31, 2025, 178 (81%) units had been leased or pre-leased.

Balance Sheet and Financing Activities

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

As of December 31, 2024, we had access to $321.0 million in liquidity, including $141.1 million of cash on hand, $31.4 million of restricted cash, and the capacity to borrow up to $148.5 million on our revolving credit facility.

In the fourth quarter, we refinanced our Upton Place asset with a $215.0 million bridge loan.

The three year loan, which has a fixed interest rate of 6.39% and is prepayable at par after 18 months, replaced the construction loan and funded the partial paydown of a project-level preferred equity investor, which together had a weighted average interest rate of 9.22% at the time of payoff.

We are highly focused on maintaining a strong balance sheet, prudent simplification, and appropriate liquidity while promptly returning capital to stockholders.

As of December 31, 2025, we had $394.9 million of cash on hand and $11.7 million of restricted cash.

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

Subsequent to year end, we announced the following sources and uses of cash:

• Approximately $80 million of net proceeds from assets monetized or sold in 2026 as of filing.

• The pay down, in full, of the preferred equity borrowings collateralized by certain stabilized properties and the remaining preferred equity borrowings that funded the development of Upton Place, totaling approximately $135 million.

• The initial liquidating distribution of $1.45 per share to be paid on March 13, 2026, to stockholders of record on February 27, 2026, totaling approximately $220 million.

• The payment of approximately $52 million of income taxes related to 2025 dispositions, which is presented within Accrued liabilities and other in our Consolidated Balance Sheets in Item 8 of this report .

As of December 31, 2025, 100% of our 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 the third quarter, 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 consolidated financial statements in Item 8.

Results of Operations for the Year Ended December 31, 2025, Compared to the same period in 2024

Net income attributable to Aimco common stockholders changed by $656.5 million for the year ended December 31, 2025 compared to the same period in 2024, as described more fully below.

Property Results

We have three segments:

(i) Development and Redevelopment;

(i) Development;

(ii) Operating;

and (iii) Other.

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

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

As of December 31, 2025, our Development and segment consists of 9 properties, including one under construction, two completed and in lease-up, one that has completed lease-up and is stabilizing operations, and five undeveloped land parcels.

Our Operating segment includes 15 residential apartment communities that have achieved stabilized levels of operations as of January 1, 2024, and maintained it throughout the current year and comparable period.

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 consolidated financial statements in Item 8.

Results of Operations for the Year Ended December 31, 2024, Compared to the same period in 2023

Net income attributable to Aimco common stockholders increased by $63.7 million for the year ended December 31, 2024 compared to the same period in 2023, as described more fully below.

Property Results

As of December 31, 2024, our Development and Redevelopment segment included 9 rental communities, including one under construction and three substantially completed and in lease-up.

Our Operating segment included 20 communities with 5,243 apartment homes, and our Other segment includes The Benson Hotel, our only hotel.

During the first quarter of 2024, we revised the information regularly reviewed by our President and Chief Executive Officer, the 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 year ended December 31, 2024, we disposed of a majority of our partnership interest in St.

George Villas, which was previously reported within the Other segment, and The Hamilton, which was previously reported within the Development and Redevelopment segment.

We also reclassified as held for sale 1001 Brickell Bay Drive, which was previously reported within the Other segment, and Yacht Club Apartments, which was previously reported in our Operating segment.

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

Two of the communities, Hillmeade and Plantation Gardens, meet the held for sale criteria in accordance with GAAP as described in Note 2 to the consolidated financial statements in Item 8.

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

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

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.

During the year ended December 31, 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.

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

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

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Rental and other property revenues, before utility reimbursements:

Development and Redevelopment

Property operating expenses, net of utility reimbursements:

Development and Redevelopment

Property net operating income:

Development and Redevelopment

For the year ended December 31, 2025, compared to the same period in 2024:

• Development and Redevelopment property net operating income increased by $1.2 million primarily due to the lease up of apartment homes at Upton Place and Strathmore Square.

• Operating property net operating income increased by $4.3 million, or 4.5%.

The increase was attributable primarily to a $6.0 million, or 4.5% increase in rental and other property revenues due to higher average revenues of $85 per apartment home and 60-basis points increase in occupancy.

• Other property net operating income increased by $1.0 million, or 49.4%, primarily due to a full year of The Benson Hotel operations in 2024 whereas operations commenced in the second quarter of 2023.

• Development property net operating income increased by $13.9 million due primarily to the lease up of apartment homes at Upton Place, Strathmore Square, and Oak Shore.

• Operating property net operating income decreased by $1.0 million, or 2.0%.

The decrease was attributable to a $1.8 million, or 7.9% increase in property operating expenses due primarily to higher real estate taxes, offset partially by a $0.8 million, or 1.2% increase in rental and other property revenues.

• Other property net operating income slightly decreased by 1.1%, due primarily to an increase in food and beverage operating expenses, offset partially by an increase in food and beverage sales.

The results of our segments for the years ended December 31, 2024 and 2023, as presented below, are based on segment classifications as of December 31, 2025.

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Rental and other property revenues, before utility reimbursements:

Development and Redevelopment

Property operating expenses, net of utility reimbursements:

Development and Redevelopment

Property net operating income:

Development and Redevelopment

For the year ended December 31, 2024, compared to the same period in 2023:

• Development and redevelopment property net operating income decreased by $0.7 million due to increases in property operating expenses due to the completion of Upton Place in the fourth quarter of 2023.

• Development property net operating income increased by $1.2 million due primarily to the lease-up of Upton Place, Strathmore Square, and Oak Shore.

• Operating property net operating income increased by $1.0 million, or 2.0% for the year ended December 31, 2024, compared to 2023.

The increase was attributable to a $9.6 million, or 7.7% increase in rental and other property revenues, offset partially by a $1.6 million, or 4.1% increase in property operating expenses due primarily to higher real estate taxes and insurance.

• Other property net operating income decreased by $1.6 million for the year ended December 31, 2023, compared to 2022, due primarily to the commencement of The Benson Hotel operations in the second quarter of 2023.

The increase was attributable to a $2.4 million, or 3.5% increase in rental and other property revenues, offset partially by a $1.5 million, or 6.8% increase in property operating expenses due primarily to higher real estate taxes.

• Other property net operating income increased by $1.0 million for the year ended December 31, 2024, compared to 2023, due primarily to a full year of The Benson Hotel operations in 2024 whereas operations commenced in the second quarter of 2023.

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.

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

For the year ended December 31, 2025 and 2024, other property operating expenses not allocated to segments were $4.1 million and $5.4 million, respectively.

For the year ended December 31, 2025 and 2024, properties that were sold generated property net operating income of $13.3 million and $27.0 million, respectively.

Please refer to Note 14 to the consolidated financial statements in Item 8 for our Boston portfolio performance, which includes five apartment communities classified as discontinued operations.

Depreciation and Amortization

For the year ended December 31, 2024, compared to the same period in 2023, Depreciation and amortization expense increased by $17.5 million, or 25.5%, due primarily to the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024.

For the year ended December 31, 2025, compared to the same period in 2024, Depreciation and amortization expense decreased by $18.9 million, or 24.4% due primarily to the classification of the Brickell Assemblage as held for sale the disposition of The Hamilton 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 year ended December 31, 2024, compared to the same period in 2023, General and administrative expenses were relatively flat.

For the year ended December 31, 2025, compared to the same period in 2024, General and administrative expenses increased by $1.2 million due primarily to increased short term incentive compensation expense and reduced capitalization payroll costs as development projects were advanced and substantially completed in 2024.

Impairment of Real Estate

Based on periodic tests of recoverability of long-lived assets, during the year ended December 31, 2025, we recognized impairment losses totaling $147.5 million.

No impairment losses were recognized in 2024.

The impairment losses were recognized primarily due to the reductions in the estimated period over which we expect to hold the properties, and, for certain development pipeline properties, the decision not to pursue development given the Plan of Sale and Liquidation.

Approximately $87.3 million of the non-cash impairment charge relates to the write-off of planning costs and amounts capitalized for GAAP, such as team time and interest expense for development pipeline assets for which development will not be pursued by us given our Plan of Sale and Liquidation.

Interest Income

For the year ended December 31, 2025, compared to the same period in 2024, Interest income decreased by $1.0 million, or 10.3%.

The decrease is due primarily to higher rates of interest earned on excess cash invested in treasury bill investments and money market funds in 2023, partially offset by interest earned on seller financing provided in connection with the sale of a land parcel in December 2023.

The decrease is due primarily to ceasing recognition of interest income in the second quarter of 2025 on the seller financing provided in connection with the sale of 200 Broward Avenue in 2023, as well as a decrease in amounts earned on invested cash.

Interest Expense

For the year ended December 31, 2024, compared to the same period in 2023, Interest expense increased by $32.3 million, or 85.7% 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 nonrecourse property debt in 2023.

For the year ended December 31, 2025, compared to the same period in 2024, Interest expense increased by $0.1 million, or 0.1% 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 for a portion of the year before its retirement 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.

Mezzanine Investment Income (Loss), Net

For the years ended December 31, 2024, compared to the same period in 2023, Mezzanine Investment Income (Loss), Net decreased $153.4 million due primarily to a non-cash impairment charge of $158.0 million in the year ended December 31, 2023, partially offset by the recognition in income of the $4.0 million non-refundable option payment upon expiration of the option to acquire the remaining 80% in the Mezzanine Investment.

For the years ended December 31, 2025, compared to the same period in 2024, Mezzanine Investment Income (Loss), Net changed by $3.3 million due primarily to incremental income earned in 2025 and the cessation of amortization costs associated with the partial sale of the Mezzanine investment in 2024.

Realized and Unrealized Gains (Losses) on Interest Rate Contracts

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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.

In addition, we measure our investment in IQHQ using the measurement alternative.

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

As a result of changes in the values of these investments, we recorded unrealized losses of $49.5 million during the year ended December 31, 2024, compared to unrealized gains of $0.7 million for the same period in 2023, due primarily to a $48.6 million non-cash impairment recognized on our investment in IQHQ.

There were no impairments or observable price changes in 2023.

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 year ended December 31, 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 net losses of $5.8 million and $49.5 million, respectively, for the years ended December 31, 2025 and 2024.

During the year ended December 31, 2025 we recorded a $6.6 million non-cash impairment recognized on our investment in IQHQ compared to $48.6 million during the year ended December 31, 2024.

During the years ended December 31, 2025 and 2024, we recognized net losses on our investment in stock of $0.3 million and $1.3 million, respectively.

During the years ended December 31, 2025 and 2024, we recognized unrealized gains on our investments in property technology funds of $1.1 million and $0.4 million, respectively

Gain on Dispositions of Real Estate

During the year ended December 31, 2024, we recognized gains on the disposition of real estate of $10.6 million due primarily due to the sale of The Hamilton compared to gains of $8.0 million recognized for the same period in 2023 that resulted from the sale of one land parcel and the contribution of real estate to an unconsolidated joint venture.

During the year ended December 31, 2025, we recognized gains on the disposition of real estate of $237.1 million due primarily to the sale of the Brickell Assemblage in December 2025, compared to gains of $10.6 million recognized for the same period in 2024 that resulted primarily from the sale of The Hamilton in December 2024.

Credit Loss Expense

During the year ended December 31, 2025, we recognized $22.9 million of credit loss expense to reduce the amortized cost basis of one of our seller financing notes receivable from $41.4 million to $18.5 million.

An agreement to monetize the seller financing notes receivable for $18.5 million was finalized subsequent to year end and structured as a modification and repayment of the note, in January 2026.

Other Income (Expense), Net

Other income (expense), net , includes costs associated with our risk management activities, partnership administration expenses, fee income, certain non-recurring items, and activity related to our unconsolidated real estate partnerships.

For the year ended December 31, 2024, compared to the same period in 2023, Other income (expense), net decreased by $2.1 million, or 27.1%, due primarily 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.

Other income (expense), net , includes costs associated with our risk management activities, fee income, certain non-recurring items, and activity related to our unconsolidated real estate partnerships.

For the year ended December 31, 2025, compared to the same period in 2024, Other income (expense), net changed by $1.4 million primarily due to a non-cash other than temporary impairment recognized on our investment in unconsolidated investment in the third quarter of 2024, partially offset by incremental expenses incurred in 2025 associated with the exploration of the Plan of Sale and Liquidation.

Income Tax Benefit (Expense)

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

Additionally, our TRS entities hold 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.

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 C onsolidated Statements of Operations.

Taxable income from activities performed through our TRS entities is subject to federal, state and local income taxes.

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 year ended December 31, 2024, we had consolidated net losses subject to tax of $28.2 million, compared to consolidated net losses subject to tax of $15.2 million for the same period in 2023.

For the years ended December 31, 2025, and 2024, we had consolidated net losses subject to tax of $33.1 million and $28.2 million, respectively.

For the year ended December 31, 2025, we recognized income tax benefit of $57.6 million, compared to income tax benefit of $11.1 million for the same period in 2024.

The year-over-year decrease is due primarily to changes in 2023 to the effective tax rate expected to apply to the reversal of our existing deferred items, partially offset by increased tax benefit from higher losses in 2024 at our TRS entities.

The year-to-year change is due primarily to the removal of the deferred tax liability that arose in the original acquisition of 1001 Brickell offset by the income taxes associated with the gain on sale, both triggered by the sale of the Brickell Assemblage.

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 years ended December 31, 2025 and 2024, we recognized income from discontinued operations, net, of $551.2 million and $28.2 million, respectively.

The change in income from discontinued operations, net, is due primarily to the recognition of a gain on disposal of $545.9 million related to the sale of five properties in our suburban Boston portfolio.

Please refer to Note 14 to the consolidated financial statements in Item 8 for our Boston portfolio performance, which includes five apartment communities classified as discontinued operations.

Liquidity and Capital Resources

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

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

Liquidity is the ability to meet present and future financial obligations either through operating cash flows, sales of properties, and/or the issuance of debt.

Our primary source of liquidity is current cash on hand and future sales of properties.

As of December 31, 2025, our available liquidity was $406.6 million, which consisted of:

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• $11.7 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance;

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

As of December 31, 2024, we had sufficient capacity on our construction loans to cover our remaining commitments on development and redevelopment projects of approximately $146.9 million.

We also have unfunded commitments in the amount of $1.4 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.

Our principal uses for liquidity include operating activities, payments of principal and interest on outstanding debt, ground lease payments, and capital expenditures.

As of December 31, 2025, we had sufficient capacity on our construction loans and preferred equity to cover our remaining commitments on our development project of approximately $87.5 million.

Additionally, our third-party property managers may enter into commitments on our behalf to purchase goods and services in connection with the operation of our apartment communities and our office building.

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, that we have sufficient cash on hand and access to additional sources of liquidity to meet our operational needs for the next twelve months.

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

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

Our revolving secured credit facility matures in December 2025.

Subsequent to year end, in February 2026, stockholders adopted the Plan of Sale and Liquidation.

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 and debt maturities and remaining commitments on development projects through the liquidation of the company's assets pursuant to the Plan of Sale and Liquidation.

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.

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.

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.

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

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

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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.

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 with $148.5 million of available capacity at December 31, 2024.

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% 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.

In the third quarter, 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.

Subsequent to year end, we used proceeds from our property sales to redeem, at our sole discretion, preferred equity interests for aggregate cash redemption prices of $137.6 million.

Changes in Cash, Cash Equivalents, and Restricted Cash

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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 year ended December 31, 2024, decreased by $3.5 million compared to the same period in 2023, due primarily to the timing of balance sheet position changes, increased interest expense primarily driven by the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024, offset by increased net operating income driven by higher rents and occupancy.

Cash provided by operating activities for the year ended December 31, 2025, decreased by $38.9 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 year ended December 31, 2024, net cash provided by investing activities of $30.6 million consisted primarily of $186.2 million of proceeds from dispositions of real estate and $5.8 million of proceeds from dispositions of unconsolidated real estate partnerships, offset by capital expenditures of $160.0 million.

Net cash provided by investing activities for the year ended December 31, 2024, increased by $291.0 million compared to the same period in 2023, due primarily to greater proceeds from dispositions of real estate and unconsolidated real estate partnerships and decreased capital expenditures.

For the year ended December 31, 2025, net cash provided by investing activities of $875.0 million consisted primarily of $973.5 million of proceeds from dispositions of real estate, offset by capital expenditures of $99.6 million.

Net cash provided by investing activities for the year ended December 31, 2025, increased by $844.4 million compared to the same period in 2024, due primarily to greater proceeds from dispositions of real estate and decreased capital expenditures.

Financing Activities

For the year ended December 31, 2024, net cash used in financing activities of $43.9 million consisted primarily of principal repayments of non-recourse construction loans, the redemption and purchase of noncontrolling interests, and common stock repurchases, offset by proceeds from non-recourse construction loans and proceeds from interest rate contracts.

Net cash used in financing activities for the year ended December 31, 2024, changed by $163.3 million compared to the same period ended in 2023, due primarily to current year repayments of non-recourse construction loans, the redemption and purchase of noncontrolling interests, and decreased proceeds from interest rate contracts, partially offset by increased proceeds from non-recourse construction loans and contributions from noncontrolling interests.

For the year ended December 31, 2025, net cash used in financing activities was $648.8 million.

Net cash used in financing activities for the year ended December 31, 2025, increased by $604.9 million compared to the same period in 2024, due primarily to the payment of dividends and distributions, increased principal repayments on non-recourse property debt associated with properties sold during the current year, decreased proceeds of non-recourse construction loans and bridge financing, partially offset by increased contributions from noncontrolling interests and decreased repayments of non-recourse construction loans and bridge financing.

Non-GAAP Measures

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• realized and unrealized (gains) losses on interest rate contracts, which we believe allow investors to compare a measure of our earnings before the effects of our capital structure and indebtedness with that of other companies in the real estate industry;

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

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

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

• the non-cash (income) loss recognized on passive equity investments;

• credit losses on our notes receivable;

• other non-cash (income) loss.

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

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Income tax (benefit) expense

Gain on dispositions of real estate

Unrealized (gains) losses from investment in unconsolidated partnerships

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

Net (income) loss attributable to redeemable noncontrolling

interests in consolidated real estate partnerships

Net (income) loss attributable to noncontrolling interests

in consolidated real estate partnerships

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

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

EBITDAre adjustments attributable to noncontrolling interests

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Realized and unrealized (gains) losses on interest rate contracts

Unrealized (gains) losses on a passive equity investment

Realized and unrealized (gains) losses on passive equity investments

Credit loss expense

Other non-cash (income) loss

Adjusted EBITDAre

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

We determined during the year ended December 31, 2024 that our investment in IQHQ was impaired after consideration of factors, including adverse capital market conditions, increased real estate development costs, and IQHQ's financial condition.

We determined during the year ended December 31, 2025 that our investment in IQHQ was impaired after consideration of factors, such as continued adverse capital market conditions, IQHQ's financial condition, and capital raising activities that further diluted our investment.

As a result, we recognized a $6.6 million non-cash impairment to reduce the carrying value of the investment in IQHQ to $4.5 million as of December 31, 2025.

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Impairment of Real Estate and Other Long-Lived Assets

Quarterly, or when changes in circumstances warrant, we will assess our real estate properties and other long-lived assets for indicators of impairment.

The judgments regarding the existence of impairment indicators are based on certain factors.

Such factors include, among other things, operational performance, market conditions, our intent and ability to hold the related asset, as well as any significant cost overruns on development projects.

If a real estate property or other long-lived asset has an indicator of impairment, we assess its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the asset.

If the carrying amount exceeds the estimated aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the asset.

Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable.

If events or circumstances indicate that the carrying amount of an asset may not be recoverable, we assess its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the asset.

If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the asset.

The future cash

flows utilized in the evaluation of recoverability and the measurement of fair value are highly subjective and are based on assumptions, such as anticipated hold periods, future occupancy, future rental or room rates, discount rates, capitalization rates, and recent sales data for comparable properties.

In the year ended December 31, 2025, we assessed our properties for impairment as a result of a change in estimated hold period, and, for certain development pipeline properties, the decision not to pursue development given the Plan of Sale and Liquidation.

Our assessment resulted in $147.5 million of impairment recognized on certain properties located within Colorado's Front Range and Southeast Florida for the year ended December 31, 2025.

The properties are presented within the Development and Other segments within Note 15 .

There were no such impairments for the years ended December 31, 2024 and 2023.

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-K

Item 7. Management’s Discussion and Analysis