APARTMENT INVESTMENT & MANAGEMENT CO 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Quarterly Report on Form 10-Q contains or may contain information that is forward-looking within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations. Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements regarding: our future plans and goals, including the timing and amount of capital expected to be returned to our stockholders, our pipeline investments and projects, our plans to eliminate certain near term debt maturities, our estimated value creation and potential, our timing, scheduling and budgeting, projections regarding revenue and expense growth, our plans for dispositions, our strategic partnerships and value added therefrom, the potential for adverse economic and geopolitical conditions, which negatively impact our operations, including on our ability to maintain current or meet projected occupancy, rental rate and property operating results; the effect of acquisitions, dispositions, developments; our ability to meet budgeted costs and timelines, and achieve budgeted rental rates related to our development investments; expectations regarding sales of our apartment communities and the use of proceeds thereof; the availability and cost of corporate debt; and our ability to comply with debt covenants, including financial coverage ratios. We caution investors not to place undue reliance on any such forward-looking statements. These forward-looking statements are based on management’s judgment as of this date, which is subject to risks and uncertainties that could cause actual results to differ materially from our expectations, including, but not limited to: our ability to complete the plan of sale and liquidation of Aimco and its subsidiaries, including our ability to successfully market and/or sell the remaining assets, on the terms and timeline anticipated, or at all; our ability to close sales following the execution of purchase and sale agreements on the terms and timeline anticipated, or at all, including the satisfaction or waiver of the conditions to closing the sales transactions currently under contract and any other sales transactions Aimco may undertake (the “Portfolio Sales Transactions”); changes in the amount and timing of the total liquidating distributions resulting from the Plan of Sale and Liquidation and the Portfolio Sales Transactions, including as a result of unexpected levels of transaction costs, delayed or terminated closings, liquidation costs, unpaid or additional liabilities and obligations, changes in the net asset sales proceeds for the sale of the remaining properties from prior estimates or other unanticipated difficulties; the possibility of converting to a liquidating trust or other liquidating entity; the ability of our board of directors to terminate the Plan of Sale and Liquidation; the response of our residents, tenants and business partners to the Plan of Sale and Liquidation and/or Portfolio Sales Transactions; difficulties in employee retention as a result of the ongoing Plan of Sale and Liquidation and/or Portfolio Sales Transactions; the occurrence of any event, change or other circumstances that could give rise to the termination of the Plan of Sale and Liquidation and/or the Portfolio Sales Transactions; the outcome of legal proceedings that may be instituted against Aimco, our subsidiaries, our and their directors and others related to the Plan of Sale and Liquidation and/or Portfolio Sales Transactions; the risk that disruptions caused by or relating to the Plan of Sale and Liquidation and/or Portfolio Sales Transactions will harm our business, including current plans and operations; the possibility that we do not reserve adequate funds to cover expenses and liabilities, and the possibility that our creditors, in that instance, could seek repayment from our stockholders up to the amount of the total liquidating distributions; risks relating to the market value of Aimco’s common stock; risks associated with contracts or other instruments containing consent and/or other provisions that may be triggered by the Plan of Sale and Liquidation and/or Portfolio Sales Transactions; restrictions during the pendency of the Portfolio Sale Transactions that may impact our ability to pursue certain business opportunities or strategic transactions; our ability to remain listed on the NYSE; 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; real estate and operating risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including the pace of job growth and the level of unemployment; the amount, location and quality of competitive new housing supply; the timing and effects of dispositions and developments; expectations regarding sales of apartment communities; insurance risks, including the cost of insurance, and natural disasters and severe weather such as hurricanes; supply chain disruptions, particularly with respect to raw materials such as lumber, steel, and concrete; the impact of tariffs and global trade disruptions on us; financing risks, including the availability and cost of financing; the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; the risk that earnings may not be sufficient to maintain compliance with debt covenants, including financial coverage ratios; legal and regulatory risks, including costs associated with prosecuting or defending claims and any adverse outcomes; the terms of laws and governmental regulations that affect us and interpretations of those laws and regulations; 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 (“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. Risk Factors in Part II of this report. These risk factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. 35 Table of Contents Readers should also carefully review the section entitled “Risk Factors” described in Item 1A of Apartment Investment and Management Company’s and Aimco OP L.P.’s combined Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent documents we file from time to time with the SEC. As used herein and except as the context otherwise requires, “we,” “our,” and “us” refer to Apartment Investment and Management Company (which we refer to as Aimco), Aimco OP L.P. (which we refer to as Aimco Operating Partnership) and their consolidated entities, collectively. Certain financial and operating measures found herein and used by management are not defined under accounting principles generally accepted in the United States (“GAAP”). These measures are defined and reconciled to the most comparable GAAP measures under the Non-GAAP Measures heading. 36 Table of Contents Executive Overview We provide Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations and financial condition. 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. Plan of Sale and Liquidation On November 10, 2025, the Board approved a Plan of Sale and Liquidation, which contemplates the sale or disposition of all the Company’s assets, the wind-down of the Company’s business and affairs and the termination of the Company’s existence by voluntary dissolution in accordance with the MGCL, and directed that the Plan of Sale and Liquidation be submitted for approval to the Company’s stockholders. On February 6, 2026, our stockholders adopted the Plan of Sale and Liquidation. Pursuant to the Plan of Sale and Liquidation and in accordance with the applicable provisions of law, the Company is authorized to do all other things reasonably necessary or desirable to complete the liquidation and dissolution of the Company and its subsidiaries, including Aimco Operating Partnership. In furtherance of the Plan of Sale and Liquidation, on March 6, 2026, the general partner of the Aimco Operating Partnership exercised its authority to elect to dissolve the Aimco Operating Partnership in its sole and absolute discretion, and such dissolution is taking place in accordance with the Plan of Sale and Liquidation and the Aimco Operating Partnership's Partnership Agreement. The Company is not required to obtain any further stockholder approval with respect to the liquidation and dissolution of the Company. Until the filing of the articles of dissolution with the Maryland State Department of Assessments and Taxation, the Board may modify, amend or terminate the Plan of Sale and Liquidation (and authorize us to seek to dispose of all our assets through a merger, business combination or similar transaction) without approval by the stockholders if it determines that such action would be advisable and in the best interests of the Company. The Company has no present plans or intentions to modify, amend or abandon the Plan of Sale and Liquidation. The 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. Refer to the section entitled “Risk Factors” described in Item 1A of Aimco’s and Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2025. Subsequent to the adoption of 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. We will continue to manage each of our properties, together with our property managers, until such time as such property is sold, for purposes of achieving the orderly winding up of the business and affairs of the Company and its subsidiaries in accordance with the Plan of Sale and Liquidation. Additional information regarding the Plan of Sale and Liquidation is available in the Company’s filings with the U.S. Securities and Exchange Commission. Disposition activity for the three months ended March 31, 2026 • In January 2026 we finalized an agreement to monetize a subordinated seller financing note associated with property in La Jolla, California, that had an effective interest rate of 6.0% and a current annual interest rate of 2.9%. The agreement was structured as a modification and repayment of the note in January 2026, when we collected the $18.5 million balance included within Notes receivable within the Condensed Consolidated Balance Sheet included in Item 1 as of December 31, 2025. • 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 March 2026 we sold a portfolio of seven properties in the Chicago market for $455.0 million. 37 Table of Contents Liquidating Distributions In accordance with the Plan of Sale and Liquidation, the Board approved a special liquidating distribution of $1.45 per share to stockholders of record on February 27, 2026. The special liquidating distribution was paid on March 13, 2026. On April 30, 2026, the Board approved its second special liquidating distribution of $1.30 per share to be paid on June 3, 2026, with a record date of May 15, 2026. The distribution is being funded with net proceeds from recently closed asset sales, including $0.90 per share, representing the midpoint of the expected second quarter distribution range as previously publicly disclosed and related to the twelve properties which were under contract as of February 9, 2026, plus an additional $0.40 per share related to the sale of 1045 on the Park in Atlanta, GA, the sale of Aimco's partnership interest in a four asset portfolio known as The Casas, and excess cash on hand. Net Assets in Liquidation As of March 31, 2026, our $705.9 million of Net assets in liquidation, as presented in our condensed consolidated financial statements included in Item 1, included $33.5 million of excess liabilities which we do not believe are represented at their estimated fair value but cannot be derecognized for GAAP at this time. Balance Sheet and Financing Activities We are highly focused on maintaining a strong balance sheet, prudent simplification, and appropriate liquidity while promptly returning capital to stockholders. As of March 31, 2026, we had $216.0 million of cash on hand and $8.3 million of restricted cash. Refer to the Liquidity and Capital Resources section for additional information regarding our leverage. As of March 31, 2026, 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 December 2027. 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, and market for sale, our two recently completed Washington, D.C. Metro Area multifamily communities. We have ceased planning and predevelopment efforts for future projects. During the three months ended March 31, 2026, we invested $22.1 million in development activities compared to $20.3 million during the same period in 2025. 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 third quarter 2026. As of March 31, 2026, 523 (76%) units were leased or pre-leased. Additionally, as of March 31, 2026, 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 third quarter 2026. As of March 31, 2026, 186 (85%) units had been leased or pre-leased. 38 Table of Contents Remaining Assets As of March 31, 2026, our portfolio consisted of the following assets: Property / Investment Property / Investment Type Location Units/Acres 1045 on the Park Apartments Homes (1) Stabilized Atlanta, GA 30 118-122 West 23rd Street (1) Stabilized New York, NY 42 237-239 Ninth Avenue (1) Stabilized New York, NY 36 173 E. 90th Street (2) Stabilized New York, NY 72 Bank Lofts Stabilized Denver, CO 125 Bluffs at Pacifica, The Stabilized Pacifica, CA 64 Oak Shore Stabilizing Corte Madera, CA 24 Upton Place Lease-Up Washington, DC 689 Strathmore Square Phase 1 Lease-Up Bethesda, MD 220 34th Street Active Construction Miami, FL 114 300 Broward Land Fort Lauderdale, FL 2.31 One Edgewater Land Miami, FL 0.5 Fitzsimons 4 Land Aurora, CO 1.77 Flagler Village Land Fort Lauderdale, FL 8.8 Flying Horse Land Colorado Springs, CO 7.45 Strathmore Square Phase 2 Passive Investment in Development JV CU Anschutz Campus Holdings Controlled Options for Development Brickell Assemblage Notes Seller Financing IQHQ Passive Equity Parkmerced Mezzanine Loan RE Tech Funds Passive Equity Casa del Hermosa (3) Partnership Owned Casa del Mar (3) Partnership Owned Casa del Norte (3) Partnership Owned Casa del Sur (3) Partnership Owned (1) Subsequent to quarter end, in April 2026, we sold two properties in New York City and one in Atlanta, Georgia for a combined $56.5 million (2) Subsequent to quarter end, in April 2026, we received a non-refundable deposit and agreed to sell our remaining property in New York City for a sales price of $22.8 million. The sale is scheduled to close in the third quarter of 2026. (3) Subsequent to quarter end, in April 2026, we sold the four properties located in San Diego, California, held by four unconsolidated real estate partnerships, with our share of the net proceeds totaling $41.9 million, net of transaction costs of $0.9 million.. Financial Results of Operations Following the shareholder approval of the Plan of Sale and Liquidation and the adoption of liquidation basis accounting in February 2026, the results for the month ended January 31, 2026 are not comparable to the three months ended March 31, 2025. The following discussion and analysis of the results of our operations and financial condition for the month ended January 31, 2026 should be read in conjunction with the accompanying condensed consolidated financial statements included in Item 1. Results of Operations for the month ended January 31, 2026 Net loss attributable to Aimco common stockholders was $7.7 million for the month ended January 31, 2026, primarily driven by $3.3 million of general and administrative expenses, $3.3 million of depreciation and amortization, and $3.3 million of interest expense, partially offset by $2.8 million of property net operating income contributed by our segments and $0.9 million of income (loss) from discontinued operations, as described further below. Property Results Prior to the adoption of the Plan of Sale and Liquidation, we had three segments: (i) Development, (ii) Operating, and (iii) Other. Our Development segment consisted of rental communities that are under construction or have not achieved stabilization, as well as land held for development. As of January 31, 2026, our Development segment consisted of 9 properties, including one 39 Table of Contents 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 included 8 residential apartment communities with 1,029 apartment homes that have achieved a stabilized level of operations as of January 1, 2025 and maintained it throughout the current year and comparable period. Two of the communities, Hillmeade and Plantation Gardens, met the held for sale criteria in accordance with GAAP as described in Note 3 to the condensed consolidated financial statements in Item 1. We aggregated all our apartment communities that have reached stabilization into our Operating segment. Our Other segment consisted of owned properties that were not included in our Development or Operating segments. Our Other segment included 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”) evaluated the business prior to adoption of the Plan of Sale and Liquidation. During the month ended January 31, 2026, we reclassified and recast as discontinued operations the seven properties within our Chicago Portfolio, which was previously reported within the Operating segment. Prior to the adoption of the Plan of Sale and Liquidation, we used property net operating income (“PNOI”) to assess the operating performance of our segments. PNOI is defined as rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements, for the consolidated communities; but excluding • the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ, the Mezzanine Investment, and investments in real estate technology funds; and • property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance. Please refer to Note 11 to the condensed consolidated financial statements in Item 1 for further discussion regarding our segments, including a reconciliation of these amounts to consolidated rental and other property revenues and property operating expenses. Property Net Operating Income The results of our segments for the month ended January 31, 2026, and three months ended March 31, 2025, as presented below, are based on segment classifications as of January 31, 2026 ( dollars in thousands ). Month Ended January 31, Three Months Ended March 31, 2026 2025 Rental and other property revenues, before utility reimbursements: Development $ 2,838 $ 5,209 Operating 2,476 7,540 Other 428 1,446 Total 5,742 14,195 Property operating expenses, net of utility reimbursements: Development 1,270 3,486 Operating 1,041 2,804 Other 614 2,090 Total 2,925 8,380 Property net operating income: Development 1,568 1,723 Operating 1,435 4,736 Other (186 ) (644 ) Total $ 2,817 $ 5,815 For the month ended January 31, 2026: • Development PNOI was $1.6 million, driven by the continued lease-up of Upton Place and Strathmore Square, and stabilization of operations at Oak Shore. • Operating PNOI was $1.4 million, with average daily occupancy for the portfolio of 95.6%. • Other PNOI was ($0.2) million. We sold our only property in the Other segment, the Benson Hotel and Faculty Club, in February 2026. 40 Table of Contents 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 month ended January 31, 2026, other property operating expenses not allocated to segments were $0.8 million. Please refer to Note 10 to the condensed consolidated financial statements in Item 1 for our Chicago Portfolio and Boston Portfolio performance, which are classified as discontinued operations. 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 month ended January 31, 2026, we recognized income from discontinued operations, net, of $0.9 million primarily from the operations of the Chicago Portfolio. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. Liquidation Basis Real Estate Upon adoption of the liquidation basis of accounting, our investments in real estate were adjusted to their estimated net realizable value. The liquidation value represents the estimated amount of cash that we expect to receive through the disposal of our assets as we carry out the Plan of Sale and Liquidation. We estimated the liquidation value of our real estate investments generally based on either contractual purchase prices or offers received on the properties or, if no contracts or offers had been received yet, on management’s estimate of a property’s liquidation value, taking into account information obtained during the marketing and sale process for the properties, including broker opinions of value. The liquidation values of our investments in real estate are presented on an undiscounted basis and investments in real estate are no longer depreciated. Subsequent to February 1, 2026, all changes in the estimated liquidation value of the investments in real estate are reflected as a change to our net assets in liquidation. Estimated Costs in Excess of Estimated Receipts The liquidation basis of accounting requires us to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the Plan of Sale and Liquidation. As of March 31, 2026, we are estimating that we will have costs in excess of estimated receipts during the liquidation process. These amounts can vary significantly due to, among other things, the timing and estimates for executing and renewing leases, estimates of tenant improvement costs and capital expenditures, the timing and value of property sales, estimates of direct costs incurred to complete the sales, the timing and estimated amounts associated with discharging known and contingent liabilities, and the estimated costs associated with the winding up of operations. These costs are estimated and are anticipated to be paid out over the liquidation period; however, no assurances can be provided that the dates used in estimation will be met. 41 Table of Contents Going Concern Basis Under a going concern basis, the critical accounting estimates that involve our more significant judgments and estimates used in the preparation of our consolidated financial statements are detailed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of Aimco’s and Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2025. There have been no other significant changes in our critical accounting estimates on a going concern basis from those reported in our Form 10-K and we believe that the related judgments and assessments have been consistently applied and produce financial information that fairly depicts the financial condition, results of operations, and cash flows for all periods presented. Non-GAAP Measures Due to the adoption of the Plan of Sale and Liquidation, we are no longer reporting EBITDAre, Adjusted EBITDAre, or other non-GAAP measures as we no longer consider these to be key financial indicators. Liquidity and Capital Resources Liquidity Liquidity is the ability to meet present and future financial obligations. As of March 31, 2026, our available liquidity was $224.3 million, which consisted of: • $216.0 million in cash and cash equivalents; and • $8.3 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance. As of March 31, 2026, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on our multifamily development project of approximately $70.9 million. We also have unfunded commitments in the amount of $0.9 million related to our investments in entities that develop technology related to the real estate industry. Our principal uses for liquidity include operating activities, payments of principal and interest on outstanding debt, ground lease payments, and capital expenditures. 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 information available at this time, cash and cash equivalents, cash generated from operations, and proceeds from sales of property pursuant to the Plan are sufficient sources of liquidity for the next twelve months and through liquidation to meet operational needs as well as remaining commitments on our one remaining development project. We also have limited debt maturities over the next two years. After giving effect to available extension options, we have no scheduled maturities until December 2027. Our use of low‑leverage, property‑level financing provides flexibility to refinance existing debt, if necessary. Liquidating Distributions Pursuant to the Plan of Sale and Liquidation, Aimco intends to return net proceeds from asset sales and cash on hand to our stockholders, subject to the payment of our liabilities and obligations and estimated reserves based on the best available information regarding operational needs as well as projected transaction and wind-down costs. 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, declines in our share price, and the effects of the announced Plan of Sale and Liquidation could negatively affect our liquidity. As of March 31, 2026, 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 4.6%, and the average remaining term to maturity was 6.2 years. Our use of interest rate caps may vary from quarter to quarter depending on lender requirements, recycling of interest rate caps between projects, and our view on forecasted interest rates. Our primary sources of leverage are non-recourse property-level debt and non-recourse construction loans. As of March 31, 2026, we have unused outstanding capacity on our construction loans of $88.0 million. 42 Table of Contents Changes in Cash, Cash Equivalents, and Restricted Cash The following discussion relates to changes in consolidated cash, cash equivalents, and restricted cash due to operating, investing and financing activities, which are presented in our Condensed Consolidated Statements of Cash Flows in Item 1 of this report. Operating Activities For the month ended January 31, 2026, net cash used in operating activities was $39.3 million, primarily related to income tax payments associated with the sale of 1001 Brickell in the fourth quarter of 2025. 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. Investing Activities For the month ended January 31, 2026, net cash provided by investing activities was $10.4 million, primarily related to the modification and repayment of our seller financing receivable, offset by capital expenditures. Financing Activities For the month ended January 31, 2026, net cash used in financing activities was $45.7 million, primarily due to the redemption of 50% of the outstanding redeemable noncontrolling interest in a portfolio of operating apartment communities, offset by proceeds from non-recourse construction loans and contributions from redeemable noncontrolling interests. ITEM 3. QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK Our chief market risks are refunding risk, that is the availability of property debt or other cash sources to refund maturing property debt, and repricing risk, that is the possibility of increases in base interest rates and credit risk spreads. We primarily use long-dated, fixed-rate, non-recourse property debt on stabilized properties in order to manage the refunding and repricing risks of short-term borrowings. We use working capital primarily to fund short-term uses. We use derivative financial instruments as a risk management tool and do not use them for trading or other speculative purposes. Market Risk As of March 31, 2026, on a consolidated basis, we had no variable-rate property-level debt outstanding and $178.0 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 March 31, 2026, 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 March 31, 2026, we estimate an increase or decrease in our variable rate indices of 100 basis points with constant credit risk spreads, would have no material impact on interest expense. As of March 31, 2026, we held interest rate caps with a maximum notional value of $266.0 million. These instruments were acquired for $0.4 million and at March 31, 2026, were valued at $0.1 million. As of March 31, 2026, we had $224.3 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.