APARTMENT INVESTMENT & MANAGEMENT CO 10-Q

ITEM 1. FINANCIAL STATEMENTS APARTMENT INVESTMENT AND MANAGEMENT COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) March 31, 2021 December 31, 2020 ASSETS Buildings and improvements $ 1,050,817 $ 995,116 Land 506,968 505,153 Total real estate 1,557,785 1,500,269 Accumulated depreciation ( 511,615 ) ( 495,010 ) Net real estate 1,046,170 1,005,259 Cash and cash equivalents 226,081 289,582 Restricted cash 9,224 9,153 Mezzanine investment 314,829 307,362 Right-of-use lease assets 443,111 98,280 Other assets, net 178,475 130,856 Total assets $ 2,217,890 $ 1,840,492 LIABILITIES AND EQUITY Non-recourse property debt, net $ 429,873 $ 447,967 Notes payable to AIR 534,127 534,127 Total indebtedness 964,000 982,094 Deferred tax liabilities 125,732 131,560 Lease liabilities 446,962 100,496 Accrued liabilities and other 95,733 62,988 Total liabilities 1,632,427 1,277,138 Redeemable noncontrolling interest in consolidated real estate partnership 4,111 4,263 Commitments and contingencies (Note 4) Equity: Common Stock, $ 0.01 par value, 510,587,500 shares authorized, 149,208,479 and 149,036,263 shares issued/outstanding at March 31, 2021 and December 31, 2020, respectively 1,491 1,490 Additional paid-in capital 516,051 515,127 Retained earnings (Accumulated deficit) 3,375 ( 16,839 ) Total Aimco equity 520,917 499,778 Noncontrolling interests in consolidated real estate partnerships 31,884 31,877 Common noncontrolling interests in Aimco Operating Partnership 28,551 27,436 Total equity 581,352 559,091 Total liabilities and equity $ 2,217,890 $ 1,840,492 See notes to condensed consolidated financial statements. 4 Table of Contents APARTMENT INVESTMENT AND MANAGEMENT COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2021 2020 REVENUES Rental and other property revenues $ 39,804 $ 38,309 OPERATING EXPENSES Property operating expenses 16,942 15,349 Depreciation and amortization 20,717 19,347 General and administrative expenses 6,311 1,762 Total operating expenses 43,970 36,458 Interest expense ( 12,677 ) ( 5,651 ) Mezzanine investment income, net 7,467 6,747 Unrealized gains on interest rate options 25,347 — Other expenses, net 363 ( 415 ) Income before income tax benefit 16,334 2,532 Income tax benefit 5,100 2,023 Net income 21,434 4,555 Noncontrolling interests: Net loss attributable to redeemable noncontrolling interest in consolidated real estate partnership 152 103 Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships ( 291 ) 5 Net income attributable to common noncontrolling interests in Aimco Operating Partnership ( 1,081 ) ( 236 ) Net income attributable to Aimco common stockholders $ 20,214 $ 4,427 Net income attributable to Aimco per common share – basic $ 0.14 $ 0.03 Net income attributable to Aimco per common share – diluted $ 0.14 $ 0.03 Weighted average common shares outstanding – basic 148,914 148,549 Weighted average common shares outstanding – diluted 149,046 148,569 See notes to condensed consolidated financial statements. 5 Table of Contents APARTMENT INVESTMENT AND MANAGEMENT COMPANY CONDENSED CONSOLIDATED STATEMENTS OF EQUITY For the Three Months Ended March 31, 2021 and 2020 (In thousands) (Unaudited) Common Stock Noncontrolling Interests in Common Noncontrolling Interests in Shares Issued Amount Additional Paid- in Capital Retained Earnings (Accumulated Deficit) Aimco Predecessor Equity Total Aimco Equity Consolidated Real Estate Partnerships Aimco Operating Partnership Total Equity Balances at December 31, 2019 — $ — $ — $ — $ 513,264 $ 513,264 $ 108 $ 188 $ 513,560 Net income attributable to Aimco Predecessor — — — — 4,427 4,427 — — 4,427 Net loss attributable to noncontrolling interests in consolidated partnerships — — — — — — ( 5 ) — ( 5 ) Net income attributable to common noncontrolling interests in Aimco Operating Partnership — — — — — — — 236 236 Contributions from Aimco Predecessor, net — — — — ( 6,194 ) ( 6,194 ) — — ( 6,194 ) Balances at March 31, 2020 — $ — $ — $ — $ 511,497 $ 511,497 $ 103 $ 424 $ 512,024 Balances at December 31, 2020 149,036 $ 1,490 $ 515,127 $ ( 16,839 ) $ — $ 499,778 $ 31,877 $ 27,436 $ 559,091 Redemption of Aimco Operating Partnership units — — — — — — — ( 36 ) ( 36 ) Issuance of common stock in connection with share-based compensation arrangements 232 2 1,069 — — 1,071 — — 1,071 Share-based compensation expense — — 171 — — 171 — 58 229 Distribution to noncontrolling interests in consolidated real estate partnerships — — — — — — ( 287 ) — ( 287 ) Net income attributable to noncontrolling interests in consolidated partnerships — — — — — — 291 — 291 Net income attributable to common noncontrolling interests in Aimco Operating Partnership — — — — — — — 1,081 1,081 Net income attributable to Aimco common stockholders — — — 20,214 — 20,214 — — 20,214 Other, net ( 60 ) ( 1 ) ( 316 ) — — ( 317 ) 3 12 ( 302 ) Balances at March 31, 2021 149,208 $ 1,491 $ 516,051 $ 3,375 $ — $ 520,917 $ 31,884 $ 28,551 $ 581,352 See notes to condensed consolidated financial statements. 6 Table of Contents APARTMENT INVESTMENT AND MANAGEMENT COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited ) Three Months Ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 21,434 $ 4,555 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,717 19,347 Income from unconsolidated real estate partnerships ( 255 ) ( 182 ) Unrealized (gains) on interest rate options ( 25,347 ) — Income tax benefit ( 5,100 ) ( 2,023 ) Mezzanine investment income, net ( 7,467 ) ( 6,214 ) Share based compensation 704 — Amortization of debt issuance costs and other 238 159 Changes in operating assets and operating liabilities: Other assets, net ( 19,231 ) ( 1,842 ) Accounts payable, accrued liabilities and other 16,631 1,755 Net cash provided by operating activities 2,324 15,555 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of real estate ( 6,230 ) — Capital expenditures (1) ( 31,658 ) ( 6,653 ) Other investing activities ( 49 ) — Net cash used in investing activities ( 37,937 ) ( 6,653 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal repayments on non-recourse property debt ( 18,174 ) ( 2,449 ) Payments on financing leases ( 3,699 ) — Purchase of interest rate option ( 5,590 ) — Change in Aimco Predecessor investment, net — ( 6,407 ) Other financing activities ( 354 ) ( 14 ) Net cash used in financing activities ( 27,817 ) ( 8,870 ) NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 63,430 ) 32 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD 298,735 10,120 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 235,305 $ 10,152 (1) Capital expenditures is net of accrued capital costs of $ 14.5 million and $ 0.9 million for the three months ended March 31, 2021 and 2020, respectively. See notes to condensed consolidated financial statements. 7 Table of Contents AIMCO OP L.P. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 31, 2021 December 31, 2020 ASSETS Buildings and improvements $ 1,050,817 $ 995,116 Land 506,968 505,153 Total real estate 1,557,785 1,500,269 Accumulated depreciation ( 511,615 ) ( 495,010 ) Net real estate 1,046,170 1,005,259 Cash and cash equivalents 226,081 289,582 Restricted cash 9,224 9,153 Mezzanine investment 314,829 307,362 Right-of-use lease assets 443,111 98,280 Other assets, net 178,475 130,856 Total assets $ 2,217,890 $ 1,840,492 LIABILITIES AND EQUITY Non-recourse property debt, net $ 429,873 $ 447,967 Notes payable to AIR 534,127 534,127 Total indebtedness 964,000 982,094 Deferred tax liabilities 125,732 131,560 Lease liabilities 446,962 100,496 Accrued liabilities and other 95,733 62,988 Total liabilities 1,632,427 1,277,138 Redeemable noncontrolling interest in consolidated real estate partnership 4,111 4,263 Commitments and contingencies (Note 4) Partners’ capital: General Partner and Special Limited Partner 520,917 499,778 Limited Partners 28,551 27,436 Partners’ capital attributable to Aimco Operating Partnership 549,468 527,214 Noncontrolling interests in consolidated real estate partnerships 31,884 31,877 Total partners’ capital 581,352 559,091 Total liabilities and partners’ capital $ 2,217,890 $ 1,840,492 See notes to condensed consolidated financial statements. 8 Table of Contents AIMCO OP L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per unit data) (Unaudited) Three Months Ended March 31, 2021 2020 REVENUES Rental and other property revenues $ 39,804 $ 38,309 OPERATING EXPENSES Property operating expenses 16,942 15,349 Depreciation and amortization 20,717 19,347 General and administrative expenses 6,311 1,762 Total operating expenses 43,970 36,458 Interest expense ( 12,677 ) ( 5,651 ) Mezzanine investment income, net 7,467 6,747 Unrealized gains on interest rate options 25,347 — Other expenses, net 363 ( 415 ) Income before income tax benefit 16,334 2,532 Income tax benefit 5,100 2,023 Net income 21,434 4,555 Net loss attributable to redeemable noncontrolling interest in consolidated real estate partnerships 152 103 Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships ( 291 ) 5 Net income attributable to the Aimco Operating Partnership’s common unitholders $ 21,295 $ 4,663 Net income attributable to the Aimco Operating Partnership per common unit – basic $ 0.14 $ 0.03 Net income attributable to the Aimco Operating Partnership per common unit – diluted $ 0.14 $ 0.03 Weighted-average common units outstanding – basic 156,882 156,480 Weighted-average common units outstanding – diluted 157,014 156,500 See notes to condensed consolidated financial statements. 9 Table of Contents AIMCO OP L.P. CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL For the Three Months Ended March 31, 2021 and 2020 (In thousands) (Unaudited) General Partner and Special Limited Partner Limited Partners Partners’ Capital Attributable to the Aimco Operating Partnership Noncontrolling Interests in Consolidated Real Estate Partnerships Aimco Predecessor Capital Total Partners’ Capital Balances at December 31, 2019 $ — $ 188 $ 188 $ 108 $ 513,264 $ 513,560 Net income attributable to Aimco Predecessor — 236 236 — 4,427 4,663 Net loss attributable to noncontrolling interests in consolidated real estate partnerships — — — ( 5 ) — ( 5 ) Contributions from Aimco Predecessor, net — — — — ( 6,194 ) ( 6,194 ) Balances at March 31, 2020 $ — $ 424 $ 424 $ 103 $ 511,497 $ 512,024 Balances at December 31, 2020 $ 499,778 $ 27,436 $ 527,214 $ 31,877 $ — $ 559,091 Redemption of Aimco Operating Partnership units — ( 36 ) ( 36 ) — — ( 36 ) Share-based compensation expense 1,243 58 1,301 1,301 Distribution to noncontrolling interests in consolidated real estate partnerships — — — ( 287 ) — ( 287 ) Net income attributable to noncontrolling interests in consolidated real estate partnerships — — — 291 — 291 Net income 20,214 1,081 21,295 — — 21,295 Other, net ( 318 ) 12 ( 306 ) 3 — ( 303 ) Balances at March 31, 2021 $ 520,917 $ 28,551 $ 549,468 $ 31,884 $ — $ 581,352 See notes to condensed consolidated financial statements. 10 Table of Contents AIMCO OP L.P. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 21,434 $ 4,555 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,717 19,347 Income from unconsolidated real estate partnerships ( 255 ) ( 182 ) Unrealized (gains) on interest rate options ( 25,347 ) — Income tax benefit ( 5,100 ) ( 2,023 ) Mezzanine investment income, net ( 7,467 ) ( 6,214 ) Share based compensation 704 — Amortization of debt issuance costs and other 238 159 Changes in operating assets and operating liabilities: Other assets, net ( 19,231 ) ( 1,842 ) Accounts payable, accrued liabilities and other 16,631 1,755 Net cash provided by operating activities 2,324 15,555 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of real estate ( 6,230 ) — Capital expenditures (1) ( 31,658 ) ( 6,653 ) Other investing activities ( 49 ) — Net cash used in investing activities ( 37,937 ) ( 6,653 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal repayments on non-recourse property debt ( 18,174 ) ( 2,449 ) Payments on financing leases ( 3,699 ) — Purchase of interest rate option ( 5,590 ) — Change in Aimco Predecessor investment, net — ( 6,407 ) Other financing activities ( 354 ) ( 14 ) Net cash used in financing activities ( 27,817 ) ( 8,870 ) NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 63,430 ) 32 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD 298,735 10,120 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 235,305 $ 10,152 (1) Capital expenditures in net of accrued capital costs of $ 14.5 million and $ 0.9 million for the three months ended March 31, 2021 and 2020, respectively. See notes to condensed consolidated financial statements. 11 Table of Contents APARTMENT INVESTMENT AND MANAGEMENT COMPANY AIMCO OP L.P. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2021 (Unaudited) Note 1 — Organization Apartment Investment and Management Company (“Aimco”), a Maryland corporation incorporated on January 10, 1994, is a self-administered and self-managed real estate investment trust (“REIT”). Aimco, through a wholly-owned subsidiary, is the general and special limited partner of Aimco OP L.P. (“Aimco Operating Partnership”). Except as the context otherwise requires, “we,” “our,” and “us” refer to Aimco, Aimco Operating Partnership, and their consolidated subsidiaries, collectively. The Separation On December 15, 2020, Aimco completed the separation of its businesses (the “Separation”), creating two, separate and distinct, publicly traded companies, Aimco and Apartment Income REIT Corp. (“AIR”) (Aimco and AIR together, as they existed prior to the Separation, “Aimco Predecessor”). P rior to the Separation, the condensed consolidated financial statements were prepared on a carve-out basis and reflect significant assumptions and allocations. The condensed consolidated financial statements reflect our historical consolidated financial position, results of operations, and cash flows in conformity with U.S. GAAP. The historical financial statements of Aimco do not represent the financial position and results of operations of one legal entity, but r ather a combination of entities under common control that have been “carved out” from Aimco Predecessor’s financial statements. All significant intercompany balances have been eliminated in consolidation. All separation related transactions between Aimco and Aimco Predecessor are considered effectively settled through partners’ capital in our condensed consolidated financial statements, other than the Notes Payable to AIR as discussed in Note 3. The settlement of these transactions is reflected as contributions from Aimco Predecessor, net in our condensed consolidated statements of equity and partners’ capital and net change in Aimco Predecessor investment in our condensed consolidated statements of cash flows as financing activities. Business As of March 31, 2021, Aimco owned approximately 93.3 % of the legal interest in the common partnership units of Aimco Operating Partnership and 94.9 % of the economic interest in Aimco Operating Partnership. The remaining 6.7 % legal interest is owned by limited partners. As the sole general partner of Aimco Operating Partnership, Aimco has exclusive control of Aimco Operating Partnership’s day-to-day management. We own or lease a portfolio of real estate investments focused primarily on the U.S. multifamily sector. These real estate investments include a portfolio of 24 operating apartment communities with 6,067 apartment homes, diversified by both geography and price point, in 12 states; one commercial office building owned as part of a land assemblage; two residential apartment communities, with 1,055 planned apartment homes, and one hotel, with 106 planned rooms, that we are actively developing and redeveloping; one residential apartment community, currently with 275 apartment homes, in redevelopment planning; and three residential apartment communities, with 499 apartment homes, for which we have completed the redevelopment and are in lease-up, but have not achieved stabilization. Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being 12 Table of Contents misleading. In the opinion of management, all adjustments , consisting of normal recurring items , considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 . The condensed consolidated balance sheets of Aimco and Aimco Operating Partnership as of December 31, 2020, have been derived from their respective audited financial statements at that date, but do not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in Aimco’s and Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2020. Except where indicated, the footnotes refer to both Aimco and Aimco Operating Partnership. Principles of Consolidation Aimco’s accompanying condensed consolidated financial statements include the accounts of Aimco, Aimco Operating Partnership, and their consolidated subsidiaries. Aimco Operating Partnership’s condensed consolidated financial statements include the accounts of Aimco Operating Partnership and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. We consolidate a variable interest entity, or VIE, in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a partner in a limited partnership or a member of a limited liability company. Certain reclassifications have been made to prior period amounts to conform to the current period condensed consolidated financial statement presentation with no effect on the Company’s previously reported results of operations, financial position, or cash flows. Allocations The 2020 condensed consolidated statements of operations include allocations of general and administrative expenses from Aimco Predecessor. We consider the basis on which expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. However, the allocations may not include all of the actual expenses that we would have incurred and may not reflect our consolidated results of operations, financial position, and cash flows had it been a stand-alone company during the periods presented. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions we might have performed ourselves or outsourced, and strategic decisions we might have made in areas such as information technology and infrastructure. Following the Separation, AIR, through its subsidiaries, provides Aimco with certain property management and other services, and we perform certain functions using our own resources or purchase services from third parties. Common Noncontrolling Interests in Aimco Operating Partnership Common noncontrolling interests in Aimco Operating Partnership consist of common OP Units and are reflected in Aimco’s accompanying condensed consolidated balance sheets as common noncontrolling interests in Aimco Operating Partnership. Aimco Operating Partnership’s income or loss is allocated to the holders of common OP Units, other than Aimco, based on the weighted-average number of common OP Units (including Aimco) outstanding during the period. For the three months ended March 31, 2021 and 2020, the holders of common OP Units had a weighted-average economic ownership interest in Aimco Operating Partnership of 5.1 % . Substantially all of the assets and liabilities of Aimco are held by Aimco Operating Partnership. Redeemable Noncontrolling Interest in Consolidated Real Estate Partnership Redeemable noncontrolling interest consists of equity interests held by a limited partner in a consolidated real estate partnership that has a finite life. We generally attribute to noncontrolling interests their share of income or loss of consolidated partnerships based on their proportionate interest in the results of operations of the partnerships, including their share of losses even if such attribution results in a deficit noncontrolling interest balance within our equity accounts. If a real estate partnership includes redemption rights that are not within our control, the noncontrolling interest is included as temporary equity. If the redemption right is not currently redeemable but probable of being redeemable in the future, changes in redemption value are recognized each quarter with the change in value being reflected in additional paid-in-capital. 13 Table of Contents The assets of our consolidated real estate partnership s must first be used to settle the liabilities of the consolidated real estate partnership s . The consolidated real estate partnerships ’ creditors do not have recourse to the general credit of Aimco Operating Partnership. The following table presents a reconciliation of our redeemable noncontrolling interest in consolidated real estate partnership from December 31, 2020, to March 31, 2021 (in thousands): Balance at December 31, 2020 $ 4,263 Net loss ( 152 ) Balance at March 31, 2021 $ 4,111 Revenue from Leases The majority of lease payments we receive from our residents and tenants are fixed. We receive variable payments from our residents and commercial tenants primarily for utility reimbursements and other services. For the three months ended March 31, 2021 and 2020, our total lease income was comprised of the following amounts for all operating leases (in thousands): Three Months Ended March 31, 2021 2020 Fixed lease income $ 36,789 $ 35,388 Variable lease income 2,954 2,859 Total lease income $ 39,743 $ 38,247 Lessee Arrangements During the three months ended March 31, 2021, we, as lessee, and AIR, as lessor, entered into finance leases on four properties currently under construction or in lease-up. The life of three of the leases is 25 years and one lease is for 10 years. Each lease commenced January 1, 2021 and two of the leases have rent escalations which start at the point the property reaches stabilization. We have provided AIR with residual value guarantees aggregating to $ 244.7 which provide that if the residual value of the leased assets are less than the specified residual value guarantees at the earlier of lease expiration or termination, we are required to pay the difference. See Note 3 for further details. As of March 31, 2021, operating and financing right-of-use lease assets of $ 5.4 million and $ 437.7 million, respectively, are included in the condensed consolidated balance sheets. For the three months ended March 31, 2021, amortization expense and interest expense related to our finance leases was $ 1.3 million and $ 1.7 million, respectively, net of capitalized costs. As of March 31, 2021, Aimco’s operating leases and financing leases have weighted-average remaining terms of 8.2 years, and 38.7 years, respectively, and weighted-average discount rates of 3.2 % and 5.4 %, respectively. Combined minimum annual lease payments, under operating and financing leases, reconciled to the lease liabilities in our condensed consolidated balance sheets, are as follows (in thousands): Sublease Income Operating Lease Future Minimum Rent Financing Leases Future Minimum Payments Remainder of 2021 $ 1,038 $ 1,083 $ 19,747 2022 1,393 1,841 26,862 2023 1,403 1,871 27,262 2024 1,413 1,900 28,262 2025 1,423 1,930 28,873 Thereafter 4,959 6,806 1,637,303 Total $ 11,629 $ 15,431 $ 1,768,309 Less: Discount ( 2,006 ) ( 1,334,772 ) Total lease liabilities $ 13,425 $ 433,537 14 Table of Contents For the three months ended March 31, 2021 , we capitalized $ 6.9 million of lease costs associated with active development and redevelopment projects on certain of the underlying property and ground lease assets. No lease costs were capitalized on leased assets for the three months ended March 31, 2020. Mezzanine Investment On November 26, 2019, Aimco Predecessor made a five-year , $ 275.0 million mezzanine loan to Maximus PM Mezzanine A LLC, the partnership owning the “Parkmerced Apartments”, located in southwest San Francisco (the “Mezzanine Investment”). The loan bears interest at a 10 % annual rate, accruing if not paid from property operations. The Separation Agreement provides for AIR to transfer ownership of the subsidiaries that originated and hold the mezzanine loan, a related equity option to acquire a 30 % interest in the partnership owning Parkmerced Apartments and the interest rate option, or swaption, that provides partial protection against future refinancing risk through 2024 to Aimco. At the time of the Separation and as of May 17, 2021 , legal title of these subsidiaries had not yet transferred to Aimco. Until legal title of the subsidiaries is transferred, AIR is obligated to pass payments on such loan to us, and we are obligated to indemnify AIR against any costs and expenses related thereto. We have the risks and rewards of ownership of the Mezzanine Investment and have recognized an asset related to our right to receive the Mezzanine Investment from AIR. We recognize as income the net amounts recognized by AIR on its equity investment that are due to be paid to us when collected, which primarily represent the interest accrued under the terms of the underlying mezzanine loan. As of March 31, 2021 , the Mezzanine Investment in our condensed consolidated balance sheets represents the assets associated with our indirect interest in the subsidiary that owns Parkmerced Apartments, which we do not consolidate. The loan is subject to certain risks, including, but not limited to, those resulting from the severe downturn in San Francisco rents, the ongoing disruption due to the COVID-19 pandemic and associated governmental response, and the current economic situation, which may result in all or a portion of the loan not being repaid. In the event we determine that a portion of the Mezzanine Investment is not recoverable, we will recognize an impairment, if appropriate. Income Tax Benefit For the three months ended March 31, 2021, $ 2.7 million of the income tax benefit is related to internal restructuring completed in the first quarter and changes to our effective state rate expected to apply to the reversal of our existing deferred items. Use of Estimates The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates. Cash Equivalents We classify highly liquid investments with an original maturity of three months or less as cash equivalents. We maintain cash equivalents in financial institutions in excess of insured limits. We have not experienced any losses in these accounts in the past and believe that we are not exposed to significant credit risk because our accounts are deposited with major financial institutions. Restricted Cash Restricted cash consists of tenant security deposits, capital replacement reserves, insurance reserves, and cash restricted as required by our debt agreements. Other Assets, net Other assets were comprised of the following amounts (in thousands): 15 Table of Contents March 31, 2021 December 31, 2020 Notes receivable $ 37,424 $ 37,045 Deferred costs, deposits, and other 17,284 17,557 Interest rate options 44,241 13,315 Corporate fixed assets 11,986 12,860 Unconsolidated real estate partnerships 12,927 12,829 Investment in IQHQ 12,500 12,500 Prepaid expenses and other 9,331 10,493 Intangible lease assets, net 5,745 7,264 Due from affiliates 23,959 4,333 Accounts receivable, net of allowances of $ 1,693 and $ 1,467 as of March 31, 2021 and December 31, 2020, respectively 3,078 2,660 Total other assets, net $ 178,475 $ 130,856 Note 3 — Transactions with AIR In conjunction with the Separation, we entered into various separation and transition services agreements with AIR that provide for a framework of our relationship with AIR after the Separation, including: (i) a Separation Agreement setting forth the mechanics of the Separation, the key provisions relating to the separation of our assets and liabilities from those of AIR, and certain organizational matters and conditions; (ii) an Employee Matters Agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation, benefits plans and programs, and other related matters; (iii) agreements pursuant to which AIR will provide property management and related services to us (collectively, the “Property Management Agreements”); (iv) an agreement pursuant to which AIR will provide us with customary administrative and support services on an ongoing basis (the “Master Services Agreement”); and (v) a master leasing agreement where we may enter into leases with AIR with the option to redevelop, develop, or lease-up the subject leased properties, and under which we will have certain lease termination rights (the “Master Leasing Agreement”). Master Services Agreement We and AIR entered into a Master Services Agreement, in which AIR will provide us with customary administrative and support services. We are obligated to pay AIR the fully burdened costs in performing the services. We may terminate any or all services on 60 days’ prior written notice, and AIR may terminate individual services, at any time after December 31, 2023. During the three months ended March 31, 2021, we incurred administrative and support fees of $ 0.4 million, which is included in general and administrative expenses in our condensed consolidated statements of operations. We did no t incur any fees for the three months ended March 31, 2020. Property Management Agreements We entered into several Property Management Agreements with AIR, pursuant to which AIR will provide us with certain property management, property accounting and related services for the majority of our operating properties, and we will pay AIR a property management fee equal to 3 % of each respective property’s revenue collected and such other fees as may be mutually agreed upon for various other services. The initial term of each Property Management Agreement is one-year, with automatic one-year renewal periods, unless either party elects to terminate upon delivery of 60 days’ prior written notice to the other party before the end of the term. Neither party is obligated to pay to the other party a termination fee or other penalty upon such termination. During the three months ended March 31, 2021, we recorded property management and property accounting fees of $ 1.3 million, which is included in property operating expenses in our condensed consolidated statements of operations. We did no t incur any fees for the three months ended March 31, 2020. Notes Payable to AIR On December 14, 2020, we entered into $ 534.1 million of notes payable to AIR that are secured by a pledge of the equity interest in the entity that holds a portfolio of assets, however, the assets secure existing senior loans of $ 198.3 million as of March 31, 2021. The notes mature on January 31, 2024 and bear interest at 5.2 %, with accrued interest payable quarterly on January 1, April 1, July 1 and October 1, commencing on April 1, 2021. For the three months ended March 31, 2021, we recognized interest expense of $ 6.9 million associated with the notes payable to AIR. 16 Table of Contents Master Leasing Agreement The Master Leasing Agreement governs the current and any future leasing arrangements between us, as lessee and AIR, as lessor. The initial term of the Master Leasing Agreement is 18 months (expiring on or about June 14, 2022), with automatic annual extensions (subject to each party’s right to terminate upon notice prior to the end of any such extension term). The Master Leasing Agreement provides that each time the parties thereto wish to execute a lease for a particular property, such parties will cause their applicable affiliates to execute a stand-alone lease. The initial annual rent for any leased property is based on the then-current fair market value of the subject property and market NOI cap rates, subject to certain adjustments, and is further subject to periodic escalation as set forth in the applicable lease, and the other terms thereof, including the initial term and extensions. We have the right to terminate any such lease prior to the end of its term once the leased property is stabilized. In connection with such an early termination, AIR will generally have an option (and not an obligation) to pay us an amount equal to the difference between the property’s fair value at stabilization and the initial value of the leasehold interest, at a five percent discount thereto; if AIR does not exercise such option, we will have the right to cause such property to be sold to a third party, with AIR guaranteed to receive an amount equal to the difference between the property’s fair market value at stabilization and the initial value of the leasehold interest and we will retain any excess proceeds. In the event of such sale of the property, we may also elect to purchase the property at a purchase price equal to the fair market value as agreed upon at the time of lease inception (and may subsequently sell the property to a third party, subject to AIR’s right of first refusal during the first year following our acquisition). If AIR elects not to pay the fee for the development or redevelopment-related improvements, and we decline to purchase the property or cause its sale to a third party, we may elect to rescind our termination of the applicable lease and instead continue such lease in effect in accordance with its terms. We, as lessee, and AIR, as lessor, entered into leases of four properties currently under construction or in lease-up. The four properties include (i) North Tower at Flamingo Point in Miami Beach, Florida, (ii) The Fremont Residences on the Anschutz Medical Campus in Aurora, Colorado, (iii) Prism in Cambridge, Massachusetts, and (iv) 707 Leahy Apartments in Redwood City, California. According to the terms of the lease agreements, we had the option to complete the on-going development and redevelopment of such properties and their lease-ups, which we elected on January 1, 2021. 17 Table of Contents The life of each lease is 25 years except for Prism, which has a lease term of 10 years . Each l ease commenc e d on January 1, 2021 . Initial monthly lease payments approximate $ 2.1 million with aggregate total lease payments of approximately $ 611.9 million. The initial fair market values of the leased assets at the time of lease inception was determined to be $ 469.0 million in the aggregate. In connection with the commencement of the leases, we assume d $ 70.8 million of estimated obligations pursuant to certain construction contracts . Acquisitions In February 2021, we acquired The Benson Hotel and Faculty Club (“Benson Hotel”) development property for $ 6.2 million, net of outstanding construction liabilities of $ 0.9 million. The development property consists of land and initial construction costs. The project is expected to be completed in the first quarter of 2023. Due to and from AIR As of March 31, 2021, we have amounts due to and due from AIR of $ 23.9 million and $ 24.0 million, respectively. The amounts due to AIR primarily consist of invoices paid on our behalf and accrued interest on the notes payable to AIR. The amounts due from AIR primarily consists of net cash flows generated by our operating properties. Terry Considine Service Arrangement In conjunction with the Separation, the Company entered into an arrangement with AIR with respect to the services of Terry Considine, an Aimco board member and our former Chief Executive Officer, for services to be rendered by Mr. Considine separate from his services as a board member, including, but not limited to (i) short and long term strategic direction and advice; (ii) transition and executive support to officers and; (iii) advice and consultation with respect to strategic growth and acquisition activities. The Company is obligated to reimburse AIR for all base salary, short-term incentive amounts and long-term incentive amounts payable by AIR to Mr. Considine for the calendar year 2021under the terms of his employment agreement with AIR that are in excess of $ 1 million, collectively. For the three months ended March 31, 2021, we have recorded $ 1.45 million in associated service fees in general and administrative expenses in our condensed consolidated statements of operations. As of March 31, 2021, accrued service fees of $ 1.45 million are included in accrued liabilities and other and in our condensed consolidated balance sheets. Guarantee Liability Legal liabilities that relate to occurrences prior to the Separation, including environmental liabilities related to properties that were no longer owned by Aimco or AIR at the time of the Separation, pursuant to the terms of the Separation Agreement, are borne by Aimco Operating Partnership up to the first $ 17.5 million of such liabilities, in the aggregate, and borne by AIR Operating Partnership for any such liabilities in excess of $17.5 million. On the date of Separation, we recognized a guarantee liability of $ 16.4 million based on an estimate of the expected future cash flows required to settle the legal liabilities, including, but not limited to, remediation, settlement and legal costs, discounted by an estimated market discount rate of 4.25 %. The guarantee liability is systematically reduced as costs related to the legal liabilities are incurred, which we estimate will occur through 2023. For the three months ended March 31, 2021, the guarantee liability was reduced by $ 1.3 million. As of March 31, 2021, the guarantee liability of $ 15.1 million is included in accrued liabilities and other in our condensed consolidated balance sheets. Note 4 — Commitments and Contingencies Commitments In connection with our development, redevelopment, and other capital additions activities, we have entered into various construction-related contracts and we have made commitments to complete development and redevelopment of certain real estate, pursuant to financing or other arrangements. As of March 31, 2021, our commitments related to these capital activities totaled approximately $ 266.4 million most of which we expect to incur during the next 12 months. We enter into certain commitments for future purchases of goods and services in connection with the operations of our apartment communities. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures. We have a commitment to fund an additional $ 37.5 million to IQHQ and currently expect to incur this investment over the next two years. We also have unfunded commitments related to three investments in privately held entities that develop technology related to the real estate industry (“RETV”) in the amount of $ 1.1 million, the timing of which is uncertain. 18 Table of Contents Legal Matters From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of business. While the outcome of the legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon our financial condition or results of operations. Note 5 — Earnings and Dividends per Share and Unit Aimco and Aimco Operating Partnership calculate basic earnings per common share and basic earnings per common unit based on the weighted-average number of shares of common stock and common partnership units outstanding. We calculate diluted earnings per share and diluted earnings per unit taking into consideration dilutive common stock and common partnership unit equivalents and dilutive convertible securities outstanding during the period. The common shares and common partnership units outstanding at the Separation date are reflected as outstanding for all periods prior to the Separation for purposes of determining earnings per share and per unit. Our common stock and common partnership unit equivalents include options to purchase shares of Common Stock, which, if exercised, would result in Aimco’s issuance of additional shares and Aimco Operating Partnership’s issuance to Aimco of additional common partnership units equal to the number of shares purchased under the options. These equivalents also include unvested TSR Restricted Stock awards that do not meet the definition of participating securities, which would result in an increase in the number of shares of Common Stock and common partnership units outstanding equal to the number of the shares that vest. Common partnership unit equivalents also include unvested long-term incentive partnership units. We include in the denominator securities with dilutive effect in calculating diluted earnings per share and per unit during these periods. Our Time-Based Restricted Stock awards receive non-forfeitable dividends similar to shares of common stock and common partnership units prior to vesting, and our TSR LTIP I units and TSR LTIP II units receive non-forfeitable distributions based on specified percentages of the distributions paid to common partnership units prior to vesting and conversion. The unvested restricted shares and units related to these awards are participating securities. We include the effect of participating securities in basic and diluted earnings per share and unit computations using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method. Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings per share and per unit for the three months ended March 31, 2021 and 2020, are as follows (in thousands, except per share and per unit data): Three Months Ended March 31, 2021 2020 Earnings per share Numerator: Net income attributable to Aimco common stockholders $ 20,214 $ 4,427 Denominator – shares: Basic weighted-average Common Stock outstanding 148,914 148,549 Diluted share equivalents outstanding 132 20 Diluted weighted-average Common Stock outstanding 149,046 148,569 Earnings per share – basic $ 0.14 $ 0.03 Earnings per share – diluted $ 0.14 $ 0.03 Earnings per unit Numerator: Net income attributable to Aimco Operating Partnership's common unitholders $ 21,295 $ 4,663 Denominator – units Basic weighted-average common partnership units outstanding 156,882 156,480 Diluted partnership unit equivalents outstanding 132 20 Diluted weighted-average common partnership units outstanding 157,014 156,500 Earnings per unit – basic 0.14 $ 0.03 Earnings per unit – diluted 0.14 $ 0.03 19 Table of Contents Note 6 — Fair Value Measurements Recurring Fair Value Measurements In 2020, we paid an upfront premium of $ 12.1 million for the option to enter into an interest rate swap at a future date. This interest rate option, or swaption, provides partial protection against our refinancing interest rate risk and is intended to mitigate interest rate increases between now and October 2024. We receive a cash settlement in the future if the prevailing interest rate is higher than the 1.68 % five year swap strike price. The amount of future cash settlement is capped if the prevailing interest rate exceeds 2.78 %. Alternatively, if interest rates were to decrease below the specified strike price, we would not receive a cash settlement. During the three months ended March 31, 2021, we paid an upfront premium of $ 5.6 million (including transaction costs) for the option to enter into an interest rate swap at a future date. This interest rate option, or swaption, provides partial protection against our refinancing interest rate risk relative to our notes payable to AIR and is intended to mitigate interest rate increases between now and January 2024. We receive a cash settlement in the future if the prevailing interest rate is higher than the 3 % strike price on the five year swap rate. Alternatively, if interest rates were to decrease below the specified strike price, we would not receive a cash settlement. We measure at fair value on a recurring basis our interest rate options, which are presented in other assets in our condensed consolidated balance sheets. Our interest rate options are classified within Level 2 of the GAAP fair value hierarchy, and we estimate their fair value using pricing models that rely on observable market information, including contractual terms, market prices, and interest rate yield curves. The fair value adjustment is included in earnings in Unrealized gains on interest rate options in our condensed consolidated statements of operations. Changes in fair value are reflected as a non-cash transaction in adjustments to arrive at cash flows from operations, and the upfront premium is reflected in Purchase of interest rate option in our condensed consolidated statements of cash flows. We have investments of $ 2.3 million in RETV consisting of three privately held entities that develop technology related to the real estate industry. These investments are measured at net asset value (“NAV”) as a practical expedient. The following table summarizes fair value for our interest rate options and our investment in RETV (in thousands): As of March 31, 2021 As of December 31, 2020 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Interest rate options $ 44,241 $ — $ 44,241 $ — $ 13,315 $ — $ 13,315 $ — Investment in RETV (1) 2,342 — — — 2,293 — — — (1) Investments measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy. Fair Value Disclosures We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable and payables approximated their fair value as of March 31, 2021, and December 31, 2020, due to their relatively short-term nature and high probability of realization. We estimate the fair value of our non-recourse property debt and notes payable to AIR using an income and market approach, including comparison of the contractual terms to observable and unobservable inputs such as market interest rate risk spreads, contractual interest rates, remaining periods to maturity, debt service coverage ratios, and loan to value ratios. We classify the fair value of our non-recourse property debt within Level 2 of the GAAP fair value hierarchy based on the significance of certain of the unobservable inputs used to estimate its fair value. The carrying amount of the notes payable to AIR approximated their fair value at both March 31, 2021 and December 31, 2020. The following table summarizes carrying value and fair value for our non-recourse property debt (in thousands): As of March 31, 2021 As of December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value Non-recourse property debt $ 431,336 $ 451,675 $ 449,510 $ 467,010 20 Table of Contents Note 7 — Variable Interest Entities Consolidated Entities Aimco consolidates Aimco Operating Partnership, a variable interest entity (“VIE”) of which Aimco is the primary beneficiary. Aimco, through Aimco Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Substantially all of the assets and liabilities of Aimco are that of Aimco Operating Partnership. The VIEs that Aimco Operating Partnership consolidates owns interests in real estate. We are the primary beneficiary of the VIEs because we have the power to direct the activities that most significantly impact the entities’ economic performance and have a substantial economic interest. We have six unconsolidated VIEs for which we are not the primary beneficiary because we are not the decision maker. The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of March 31, 2021 and December 31, 2020 (in thousands, except for VIE count): March 31, 2021 December 31, 2020 Consolidated Unconsolidated Consolidated Unconsolidated Count of VIEs 6 6 2 6 Assets Real estate, net $ 439,513 $ — $ 310,552 $ — Mezzanine investment — 314,829 — 307,362 Right-of-use lease assets 437,697 — 92,709 — Other assets, net 15,850 25,427 16,949 25,329 Liabilities Deferred tax liabilities 129,729 — 133,842 — Accrued liabilities and other 18,700 — 7,106 — Lease liabilities 433,537 — 86,781 — Assets of our consolidated VIEs must first be used to settle the liabilities of the VIE. The consolidated VIEs’ creditors do not have recourse to our general credit. Unconsolidated Real Estate Partnerships We own an interest in four apartment communities in San Diego, California, of which we are not the primary beneficiary. Our investment balance of $ 12.9 million and $ 12.8 million as of March 31, 2021 and December 31, 2020, respectively, represents our maximum exposure to loss in these VIEs. Our other unconsolidated VIE is insignificant to our condensed consolidated balance sheets for both periods presented. Under the terms of the Separation Agreement, AIR has legally assigned all risks and rewards of ownership in its interest in a partnership that owns Parkmerced Apartments, of which it is not the primary beneficiary. Our investment balance of $ 314.8 million as of March 31, 2021, reflected in Mezzanine Investment in our condensed consolidated balance sheets, represents our indirect interest in Parkmerced Apartments notes receivable through our agreement with AIR and represents our maximum exposure to loss in this VIE. Note 8 — Business Segments We have three segments: (i) Development and Redevelopment, (ii) Operating Portfolio, and (iii) Other. Our Development and Redevelopment segment includes residential apartment communities, including associated commercial space, that are under construction or have not achieved stabilization. Our Operating Portfolio segment includes majority owned residential communities that have achieved stabilized level of operations as of January 1, 2020 and maintained it throughout the current year and comparable period. We aggregate all our apartment communities that have reached stabilization into our Operating Portfolio. Our Other segment consists of 1001 Brickell Bay Drive, our only commercial real estate property. We realigned our segments during the fourth quarter 2020 and have restated historical periods to conform with current segment presentation. 21 Table of Contents Our chief operating decision maker (“CODM”) uses cash flow, construction timeline to completion and actual versus budgeted results to evaluate our properties in our Development and R edevelopment segment. Our CODM uses proportionate property net operating income to assess the operating performance of our Operating Portfolio. Proportionate property net operating income is defined as our share of rental and other property revenues, excluding reimbursements, less direct property operating expenses, net of utility reimbursements, for consolidated communities. In our condensed consolidated statements of operations, utility reimbursements are included in rental and other property revenues, in accordance with GAAP. As of March 31, 2021, our Development and Redevelopment segment includes three real estate investments: Upton Place, Hamilton on the Bay and The Benson Hotel. The Development and Redevelopment segment also includes our four leased properties of which, one is under construction and three are in lease-up, but have not achieved stabilization. Our Operating Portfolio segment includes 24 consolidated apartment communities with 6,067 apartment homes. Our Other segment includes one office building. The following tables present the revenues, proportionate property net operating income, and income before income tax benefit of our segments on a proportionate basis, excluding amounts related to our proportionate share of four apartment communities with apartment homes that we neither manage nor consolidate, for the three months ended March 31, 2021 and 2020 (in thousands): Development and Redevelopment Operating Portfolio Other Proportionate and Other Adjustments (1) Corporate and Amounts Not Allocated to Segments Consolidated Three months ended March 31, 2021: Rental and other property revenues $ 2,257 $ 32,689 $ 3,027 $ 1,830 $ 1 $ 39,804 Property operating expenses 1,867 11,170 985 1,706 1,214 16,942 Other operating expenses not allocated to segments (2) — — — — 27,028 27,028 Total operating expenses 1,867 11,170 985 1,706 28,242 43,970 Proportionate property net operating income 390 21,519 2,042 124 ( 28,241 ) ( 4,166 ) Other items included in income before income tax benefit (3) — — — — 20,500 20,500 Income before income tax benefit $ 390 $ 21,519 $ 2,042 $ 124 $ ( 7,741 ) $ 16,334 Development and Redevelopment Operating Portfolio Other Proportionate and Other Adjustments (1) Corporate and Amounts Not Allocated to Segments Consolidated Three months ended March 31, 2020: Rental and other property revenues $ — $ 33,361 $ 3,277 $ 1,671 $ — $ 38,309 Property operating expenses — 10,510 990 1,547 2,302 15,349 Other operating expenses not allocated to segments (2) — — — — 21,109 21,109 Total operating expenses — 10,510 990 1,547 23,411 36,458 Proportionate property net operating income — 22,851 2,287 124 ( 23,411 ) 1,851 Other items included in income before income tax benefit (3) — — — — 681 681 Income before income tax benefit $ — $ 22,851 $ 2,287 $ 124 $ ( 22,730 ) $ 2,532 (1) Represents adjustments for the redeemable noncontrolling interest in consolidated real estate partnership’s share of the results of consolidated communities in our segments, which are included in the related consolidated amounts, but excluded from proportionate property net operating income for our segment evaluation. Also includes the reclassification of utility reimbursements from revenues to property operating expenses for the purpose of evaluating segment results. Utility reimbursements are included in rental and other property revenues in our condensed consolidated statements of operations prepared in accordance with GAAP. (2) Other operating expenses not allocated to segments consists of depreciation and amortization, general and administrative expense, and other operating expenses which are not included in our measure of segment performance. (3) Other items included in income before income tax benefit consists primarily of interest expense, unrealized gain on our interest rate options and mezzanine investment income, net. 22 Table of Contents Net real estate and non-recourse property debt, net, of our segments were as follows (in thousands): Development and Redevelopment Operating Portfolio Other Total As of March 31, 2021: Buildings and improvements $ 114,950 $ 775,140 $ 160,727 $ 1,050,817 Land 58,491 298,459 150,018 506,968 Total real estate 173,441 1,073,599 310,745 1,557,785 Accumulated depreciation ( 772 ) ( 482,026 ) ( 28,817 ) ( 511,615 ) Net real estate $ 172,669 $ 591,573 $ 281,928 $ 1,046,170 Non-recourse property debt, net $ — $ 429,873 $ — $ 429,873 Development and Redevelopment Operating Portfolio Other Total As of December 31, 2020: Buildings and improvements $ 61,813 $ 772,786 $ 160,517 $ 995,116 Land 56,676 298,459 150,018 505,153 Total real estate 118,489 1,071,245 310,535 1,500,269 Accumulated depreciation ( 447 ) ( 469,873 ) ( 24,690 ) ( 495,010 ) Net real estate $ 118,042 $ 601,372 $ 285,845 $ 1,005,259 Non-recourse property debt, net $ — $ 447,967 $ — $ 447,967 In addition to the amounts disclosed in the tables above, the Development and Redevelopment segment right-of-use lease assets and lease liabilities as of March 31, 2021 aggregated to $ 437.7 million and $ 433.5 million, respectively, related to our investments in Upton Place, North Tower of Flamingo Point, 707 Leahy, The Fremont, and Prism. As of December 31, 2020, the Development and Redevelopment segment right-of-use lease assets and lease liabilities totaled $ 92.7 million and $ 86.8 million, respectively, related to our investment in Upton Place. Note 9 – Subsequent Events On April 15, 2021, the Company entered into a $ 150 million variable-rate non-recourse construction loan collateralized by our leasehold interest and AIR’s fee ownership interest in Flamingo North Tower. The initial term of the loan is three years and bears interest at LIBOR plus 360 basis points subject to a minimum all-in per annum interest rate of 3.85 %. Certain consolidated subsidiaries have indemnified AIR for any losses it incurs as a result of a default on the loan by Aimco. 23 Table of Contents