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. 32 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. 33 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 June 30, 2026 • In April 2026, we sold two properties in New York City and one in Atlanta, Georgia for a combined $56.5 million, as well as 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. • In June 2026, we sold our remaining property in New York City for a sales price of $22.9 million. Liquidating Distributions In accordance with the Plan of Sale and Liquidation, the Board approved special liquidating distributions of $1.45 and $1.30 per share and unit paid on March 13, 2026 and June 3, 2026, respectively. Net Assets in Liquidation As of June 30, 2026, our $514.6 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 under GAAP at this time. 34 Table of Contents 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 June 30, 2026, we had $69.8 million of cash on hand and $8.9 million of restricted cash. Refer to the Liquidity and Capital Resources section for additional information regarding our leverage. As of June 30, 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 and six months ended June 30, 2026, we invested $17.0 million and $39.1 million, respectively, in development activities compared to $22.1 million and $42.4 million, respectively, 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 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 June 30, 2026, 197 (90%) units had been leased or pre-leased. The property is currently being broadly marketed for sale. • In Upper Northwest Washington, D.C., we expect to complete the lease up of 689 apartment homes at Upton Place during the fourth quarter 2026. As of June 30, 2026, 578 (84%) units were leased or pre-leased. Additionally, as of June 30, 2026, 97% of the project's 105,000 square feet of retail space has been leased. The property is scheduled to be broadly marketed for sale in the third quarter. Remaining Assets As of June 30, 2026, we continue to pursue an orderly liquidation of our remaining assets: Property / Investment Property / Investment Type Location Units/Acres 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 35 Table of Contents Financial Results of Operations In light of the adoption of liquidation basis accounting as of February 1, 2026 and our liquidation pursuant to the Plan of Sale and Liquidation, the results of operations for the current year period are not comparable to the prior year period. The sale of assets under the Plan of Sale and Liquidation will have a significant impact on our operations. See “— Executive Overview — Plan of Sale and Liquidation”. Changes in Net Assets in Liquidation Period from February 1, 2026, through June 30, 2026 Net assets in liquidation decreased by $406.6 million during the period from February 1, 2026, to June 30, 2026, primarily due to Aimco's declaration and payment of $1.45 and $1.30 per share and per unit liquidating distributions totaling $408.8 million. This is partially offset by a net increase of $1.5 million related to the remeasurement of net realizable value of real estate and estimated costs in excess of estimated receipts. Critical Accounting Estimates We prepare o ur 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 estimated liquidation value of properties without contractual purchase prices or offers received require considerable management judgment and are sensitive to changes in underlying assumptions and market factors, the most significant being projected operational cash flow and capitalization rates. We determine capitalization rates using third-party market research analytics. Property operational cash flows are based on historical, current, and expected future operating results and take into consideration our intended operational strategies. No assurances can be provided that the estimated liquidation value of our properties will be met. 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 June 30, 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. 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. 36 Table of Contents 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. Property net operating income is presented solely as the ASC 280 segment measure for prior periods. Liquidity and Capital Resources Liquidity Liquidity is the ability to meet present and future financial obligations. As of June 30, 2026, our available liquidity was $78.7 million, which consisted of: • $69.8 million in cash and cash equivalents; and • $8.9 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 June 30, 2026, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on our multifamily development project of approximately $57.4 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 of Sale and Liquidation 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 June 30, 2026, our outstanding non-recourse property debt had a fixed interest rate. In addition, the rate on our non-recourse debt was 4.6%, and the remaining term to maturity was 5.9 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, non-recourse construction loans, and bridge financing. As of June 30, 2026, we have unused outstanding capacity on our construction loans of $75.9 million. 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. 37 Table of Contents 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 June 30, 2026, on a consolidated basis, we had no variable-rate property-level debt outstanding and $190.1 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 June 30, 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 June 30, 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 June 30, 2026, we held interest rate caps with a maximum notional value of $266.0 million. These instruments were acquired for $0.3 million and at June 30, 2026, were valued at $0.1 million. As of June 30, 2026, we had $78.7 million in cash and cash equivalents and restricted cash, a portion of which earns interest at variable rates.