APARTMENT INVESTMENT & MANAGEMENT CO

Previous wording

Diversified portfolio, consisting of $0.6 billion in-process value-add investments, a pipeline of approximately 13 million gross square feet of potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments; and

Current wording

Diversified portfolio, consisting of value-add investments, a pipeline of land held for potential future development, a national portfolio of stabilized multifamily real estate and limited indirect and passive investments; and

Previous wording

Our dedicated team will source and execute development and redevelopment projects, and various other direct investment strategies. Our development and redevelopment portfolio currently includes projects in construction and lease-up. In addition, our team has secured significant, high-quality, future development opportunities, including total potential of more than 13 million gross square feet, located in high-growth markets. Generally, we seek direct investment opportunities in locations where barriers to entry are high, target customers can be clearly defined and where we have a comparative advantage over others in the market. From time to time, we may choose to monetize certain pipeline assets prior to vertical construction in an effort to maximize value and risk adjusted returns. In any time period, the amount of our capital that is allocated to development activities may vary based on market conditions and other factors.

Current wording

Our dedicated team will source and execute development and redevelopment projects, and various other direct investment strategies. Our development and redevelopment portfolio currently includes projects in construction and lease-up. In addition, our team has secured significant, high-quality, future development opportunities, including total potential of more than 11 million gross square feet, located in high-growth markets. Generally, we seek direct investment opportunities in locations where barriers to entry are high, target customers can be clearly defined and where we have a comparative advantage over others in the market. From time to time, we may choose to monetize certain pipeline assets prior to vertical construction in an effort to maximize value and risk adjusted returns. In any time period, the amount of our capital that is allocated to development activities may vary based on market conditions and other factors.

Previous wording

The results from the execution of our business plan during the three and six months ended June 30, 2024 are further described below.

Current wording

The results from the execution of our business plan during the three and nine months ended September 30, 2024 are further described below.

Previous wording

For the three and six months ended June 30, 2024, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.43) and ($0.50), respectively, due primarily to a non-cash impairment charge related to our passive equity investment in IQHQ. For the same periods in 2023, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.02) and ($0.09), respectively.

Current wording

For the three months ended September 30, 2024, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.16), due primarily to higher net contributions from multifamily property operations offset by increases in interest expense and depreciation related to advancing and completing development projects. For the same period in 2023, net loss attributable to Aimco common stockholders per share, on a fully dilutive basis, was ($0.02).

Previous wording

For the three months ended June 30, 2024, revenue and net operating income from our Operating segment were up 4.6% and 4.1% respectively, year-over-year, due primarily to higher average monthly revenue per apartment home of $2,392, up $101 year-over-year. For the six months ended June 30, 2024, revenue and net operating income from our Operating segment were up 5.0% and 5.3%, respectively, year over year, with average monthly revenue per apartment home of $2,370, up $111 year over year.

Current wording

For the three months ended September 30, 2024, revenue and net operating income from our Operating segment were up 4.1% and 1.6% respectively, year-over-year, due primarily to higher average monthly revenue per apartment home of $2,415, up $57 year-over-year, and a 160-basis point increase in Average Daily Occupancy to 96.8%.

Previous wording

Revenue for our Operating segment was $38.7 million, up 4.6% year-over-year, resulting from a $101 increase in average monthly revenue per apartment home to $2,392 and a 10-basis point increase in Average Daily Occupancy to 96.3%.

Current wording

Revenue for our Operating segment was $39.3 million, up 4.1% year-over-year, resulting from a $57 increase in average monthly revenue per apartment home to $2,415 and a 160-basis point increase in Average Daily Occupancy to 96.8%.

Previous wording

Expenses for our Operating segment were $12.2 million, up 5.7% year-over-year primarily from higher real estate taxes and insurance.

Current wording

Expenses for our Operating segment were $11.9 million, up 10.6% year-over-year primarily from higher real estate taxes and insurance.

Previous wording

Net operating income for our Operating segment was $26.5 million, up 4.1% year-over-year.

Current wording

Net operating income for our Operating segment was $27.4 million, up 1.6% year-over-year.

Previous wording

As of June 30, 2024, we had two multifamily development projects under construction, a multifamily community that has been substantially completed and is now in lease-up, and a hotel that was completed in 2023 and is being stabilized. These projects remain on track, as measured by construction budget and lease-up metrics. Additionally, we have a pipeline of future value-add opportunities totaling approximately 13 million gross square feet of development in our target markets of Southeast Florida, the Washington, D.C. Metro Area, and Colorado's Front Range.

Current wording

As of September 30, 2024, we had two multifamily development projects under construction, two multifamily communities that have been substantially completed and are now in lease-up, and a hotel that was completed in 2023 and is being stabilized. These projects remain on track, as measured by construction budget and lease-up metrics. Additionally, we have a pipeline of future value-add opportunities in our target markets of Southeast Florida, the Washington, D.C. Metro Area, and Colorado's Front Range.

Previous wording

During the three and six months ended June 30, 2024, $29.8 million and $72.6 million of capital was invested in development and redevelopment activities, respectively, primarily funded through construction loan draws, compared to $81.1 million and $145.9 million, respectively, during the same periods in 2023.

Current wording

During the three and nine months ended September 30, 2024, $29.6 million and $102.2 million of capital was invested in development and redevelopment activities, respectively, primarily funded through construction loan draws, compared to $74.4 million and $220.4 million, respectively, during the same periods in 2023.

Previous wording

In Upper Northwest Washington, D.C., construction is substantially complete at Upton Place. As of June 30, 2024, we have delivered all 689 apartment homes with 193 units leased or pre-leased at rental rates greater than underwriting. Additionally, as of June 30, 2024, more than 82% of the project's 105,000 square feet of retail space has been leased.

Current wording

In Upper Northwest Washington, D.C., construction is substantially complete at Upton Place. As of September 30, 2024, we have delivered all 689 apartment homes with 284 units leased or pre-leased at rental rates greater than underwriting. Additionally, as of September 30, 2024, 90% of the project's 105,000 square feet of retail space has been leased.

Previous wording

In Corte Madera, CA, construction is ongoing at Oak Shore where 16 luxury single family rental homes and eight accessory dwelling units are being developed. As of June 30, 2024, ten residences had been delivered with nine leased or pre-leased at rental rates greater than underwriting.

Current wording

In Corte Madera, CA, construction is ongoing at Oak Shore where 16 luxury single family rental homes and eight accessory dwelling units are being developed. As of September 30, 2024, 19 residences had been delivered with 14 leased or pre-leased at rental rates greater than underwriting.

Previous wording

In the second quarter of 2024, we invested $3.3 million into programming, design, documentation, and entitlement efforts related to select pipeline projects located in South Florida and on the Anschutz Medical Campus in Aurora, Colorado.

Current wording

In the third quarter of 2024, we invested $0.4 million into programming, design, documentation, and entitlement efforts related to select pipeline projects located in South Florida and on the Anschutz Medical Campus in Aurora, Colorado.

Previous wording

We are highly focused on maintaining a strong balance sheet, including having at all times ample liquidity. As of June 30, 2024, we had access to $259.4 million in liquidity, including $88.5 million of cash on hand, $20.9 million of restricted cash, and the capacity to borrow up to $150.0 million on our revolving credit facility. Refer to the Liquidity and Capital Resources section for additional information regarding our leverage.

Current wording

We are highly focused on maintaining a strong balance sheet, including having at all times ample liquidity. As of September 30, 2024, we had access to $260.4 million in liquidity, including $82.6 million of cash on hand, $27.8 million of restricted cash, and the capacity to borrow up to $150.0 million on our revolving credit facility. Refer to the Liquidity and Capital Resources section for additional information regarding our leverage.

Previous wording

Results of Operations for the three and six months ended June 30, 2024 and 2023

Current wording

Results of Operations for the three and nine months ended September 30, 2024 and 2023

Previous wording

Net income attributable to Aimco common stockholders decreased by $56.9 million and $58.3 million, respectively, for the three and six months ended June 30, 2024, compared to the same period in 2023, as described more fully below.

Current wording

Net income attributable to Aimco common stockholders decreased by $19.7 million and $78.0 million, respectively, for the three and nine months ended September 30, 2024, compared to the same periods in 2023, as described more fully below.

Previous wording

As of June 30, 2024, our Development and Redevelopment segment includes 10 rental communities, two of which were under construction. Our Operating segment includes 21 residential apartment communities with approximately 5,600 apartment homes, and our Other segment includes 1001 Brickell Bay Drive, our only office building, and The Benson Hotel, our only hotel.

Current wording

As of September 30, 2024, our Development and Redevelopment segment includes 10 properties, including two of which were under construction and two substantially completed and in lease-up. Our Operating segment includes 21 residential apartment communities with approximately 5,600 apartment homes, and our Other segment includes 1001 Brickell Bay Drive, our only office building, and The Benson Hotel, our only hotel.

Previous wording

Development and Redevelopment proportionate property net operating income increased by $0.2 million due primarily to the lease up of apartment homes at The Hamilton and delivery and initial lease-up of Upton Place.

Current wording

Development and Redevelopment proportionate property net operating income increased by $0.2 million, or 10.1%, due primarily to the delivery and initial lease-up of Upton Place and Strathmore Square.

Previous wording

Operating proportionate property net operating income increased by $1.0 million, or 4.1%. The increase was attributable primarily to a $1.7 million, or 4.6% increase in rental and other property revenues due to a$101 increase in average monthly revenue per apartment home to $2,392, and a 10-basis point increase in Average Daily Occupancy to 96.3%.

Current wording

Operating proportionate property net operating income increased by $0.4 million, or 1.6%. The increase was attributable primarily to a $1.6 million, or 4.1% increase in rental and other property revenues due to a $57 increase in average monthly revenue per apartment home to $2,415, and a 160-basis point increase in Average Daily Occupancy to 96.8%.

Previous wording

The results of our segments for the six months ended June 30, 2024 and 2023, as presented below, are based on segment classifications as of June 30, 2024 (dollars in thousands).

Current wording

The results of our segments for the nine months ended September 30, 2024 and 2023, as presented below, are based on segment classifications as of September 30, 2024 (dollars in thousands).

Previous wording

Development and Redevelopment proportionate property net operating income increased by $1.7 million due primarily to the lease up of apartment homes at The Hamilton.

Current wording

Development and Redevelopment proportionate property net operating income increased by $2.0 million, or 38.8%, due primarily to the lease up of delivered apartment homes.

Previous wording

Operating proportionate property net operating income increased by $2.7 million, or 5.3% The increase was attributable primarily to a $3.7 million, or 5.0% increase in rental and other property revenues due to a$111 increase in average monthly revenue per apartment home to $2,370.

Current wording

Operating proportionate property net operating income increased by $3.1 million, or 4.0%. The increase was attributable primarily to a $5.2 million, or 4.7% increase in rental and other property revenues due to a $93 increase in average monthly revenue per apartment home to $2,385.

Previous wording

Other proportionate property net operating income increased by $1.0 million, or 100.0%. The increase was due primarily to The Benson Hotel commencing operations during the second quarter of 2023.

Current wording

Other proportionate property net operating income increased by $0.2 million, or 3.9%. The increase was due primarily to additional revenue in 2024 at The Benson Hotel partially offset by lower revenue at 1001 Brickell Bay Drive.

Previous wording

For the three and six months ended June 30, 2024, compared to the same periods in 2023, Depreciation and amortization expense increased by $5.1 million, or 29.8%, and $8.3 million, or 24.9%, respectively, due primarily to substantial completion of Upton Place and the completion of The Benson Hotel during the second quarter of 2023.

Current wording

For the three months ended September 30, 2024, compared to the same period in 2023, Depreciation and amortization expense increased by $5.7 million, or 32.2% due primarily to the substantial completion of Upton Place and Strathmore Square in 2024. For the nine months ended September 30, 2024, compared to the same period in 2023, Depreciation and amortization expense increased $14.0 million, or 27.4% due primarily to the substantial completion of Upton Place and Strathmore Square, as well as the completion of The Benson Hotel during the second quarter of 2023.

Previous wording

For the three and six months ended June 30, 2024, compared to the same periods in 2023, General and administrative expenses decreased by $0.3 million, or 4.0%, and $0.2 million, or 1.0%, respectively, due primarily to a decrease in expenses for consulting services per the Master Services Agreement with AIR, which concluded at December 31, 2023.

Current wording

For the three and nine months ended September 30, 2024, compared to the same periods in 2023, General and administrative expenses decreased by $0.4 million, or 5.5%, and $0.6 million, or 2.5%, respectively, due primarily to a decrease in expenses for consulting services per the Master Services Agreement with AIR, which concluded at December 31, 2023.

Previous wording

For the three and six months ended June 30, 2024, compared to the same periods in 2023, Interest income increased by $0.1 million, or 2.3%, and $0.6 million, or 14.3%, respectively, due primarily to interest earned on seller financing provided in connection with the sale of a land parcel in December 2023, offset by a decrease earned on invested cash.

Current wording

For the three months ended September 30, 2024, compared to the same period in 2023, Interest income decreased by $0.2 million, or 7.5%. For the nine months ended September 30, 2024, compared to the same period in 2023, Interest income increased by $0.5 million, or 6.6%. These changes were primarily due to interest earned on seller financing provided in connection with the sale of a land parcel in December 2023, partially offset by a reduction in invested cash.

Previous wording

For the three and six months ended June 30, 2024, compared to the same periods in 2023, Interest expense increased by $7.2 million, or 74.2%, and $10.8 million, or 55.8%, respectively, due primarily to increased non-recourse construction loan draws and reduced capitalization as development projects are advanced and completed.

Current wording

For the three and nine months ended September 30, 2024, compared to the same periods in 2023, Interest expense increased by $10.8 million and $21.6 million, respectively, due primarily to increased non-recourse construction loan draws and reduced capitalization as development projects are advanced and completed, partially offset by the repayment of certain non-recourse property debt in 2023.

Previous wording

We are required to adjust our interest rate contracts to fair value on a quarterly basis. As a result of the mark-to-market adjustments, we recorded unrealized losses of $1.3 million and $1.5 million, respectively, for the three and six months ended June 30, 2024, compared to unrealized gains of $2.5 million and $0.6 million, respectively, for the same periods in 2023. In addition, we realized gains of $1.9 million and $3.8 million for the three and six months ended June 30, 2024, respectively, compared to realized gains of $0.9 million and $1.7 million, respectively, for the same periods in 2023.

Current wording

We are required to adjust our interest rate contracts to fair value on a quarterly basis. As a result of the mark-to-market adjustments, we recorded unrealized losses of $2.6 million and $4.1 million, respectively, for the three and nine months ended September 30, 2024, compared to unrealized losses of $0.5 million and unrealized gains of $0.1 million, respectively, for the same periods in 2023. In addition, we realized gains of $1.5 million and $5.3 million for the three and nine months ended September 30, 2024, respectively, compared to realized gains of $1.5 million and $3.2 million, respectively, for the same periods in 2023.

Previous wording

We measure our investments in stock based on its market price at period end and our investments in property technology funds at NAV as a practical expedient. In addition, we measure our investment in IQHQ at cost, less impairment if any needed, with subsequent adjustments for observable price changes of identical or similar investments of the same issuer since it does not have a readily determinable fair value. As a result of changes in the values of these investments, we recorded unrealized losses of $47.3 million and $47.5 million, respectively, for the three and six months ended June 30, 2024, primarily due to a $47.0 million non-cash impairment recognized on our investment in IQHQ. For the same periods in 2023, we recorded unrealized gains of $1.1 million $1.2 million, respectively.

Current wording

We measure our investments in stock based on its market price at period end and our investments in property technology funds at NAV as a practical expedient. In addition, we measure our investment in IQHQ at cost, less impairment if any needed, with subsequent adjustments for observable price changes of identical or similar investments of the same issuer since it does not have a readily determinable fair value. As a result of changes in the values of these investments, we recorded unrealized losses of $0.6 million and $48.1 million, respectively, for the three and nine months ended September 30, 2024. During the second quarter of 2024, we recognized a $47.0 million non-cash impairment on our investment in IQHQ. For the same periods in 2023, we recorded unrealized losses of $1.1 million and unrealized gains of $0.2 million, respectively.

Previous wording

Other income (expense), net, includes costs associated with our risk management activities, partnership administration expenses, fee income, and certain non-recurring items, as well as activity related to our Mezzanine Investment. For the three months ended June 30, 2024, compared to the same period in 2023, Other income (expense), netdecreased by $0.1 million, or 9.4%. For the six months ended June 30, 2024, compared to the same period in 2023, Other income (expense), net decreased by $2.0 million, or 41.0%, primarily due to the incremental expense associated with pre-existing long-term incentive partnership units recorded upon the resignation of one of our board members in the prior period.

Current wording

Other income (expense), net, includes costs associated with our risk management activities, partnership administration expenses, fee income, and certain non-recurring items, as well as activity related to our Mezzanine Investment and Unconsolidated real estate partnerships. For the three months ended September 30, 2024, compared to the same period in 2023, Other income (expense), netchanged by $1.9 million, or 95.0%, primarily due to a non-cash other than temporary impairment recognized on our investment in an unconsolidated investment in land held for development in the current period. For the nine months ended September 30, 2024, compared to the same period in 2023, Other income (expense), netchanged by $0.1 million, or 0.8%, primarily due to the incremental expense associated with pre-existing long-term incentive partnership units recorded upon the resignation of one of our board members in the prior period, partially offset by a non-cash other than temporary impairment recognized on our investment in an unconsolidated investment in land held for development in the current period.

Previous wording

Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and income and gains retained by the REIT. For the three and six months ended June 30, 2024, we had consolidated net losses subject to tax of $5.3 million and $11.9 million, respectively, compared to consolidated net losses subject to tax of $2.5 million and $7.4 million, respectively, for the same periods in 2023.

Current wording

Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and income and gains retained by the REIT. For the three and nine months ended September 30, 2024, we had consolidated net losses subject to tax of $9.7 million and $21.6 million, respectively, compared to consolidated net losses subject to tax of $5.0 million and $12.4 million, respectively, for the same periods in 2023.

Previous wording

For the three months ended June 30, 2024, we recognized an income tax benefit of $2.2 million, compared to an income tax benefit of $0.4 million for the same period in 2023. The increase is due primarily to the tax effect of fewer gains, increased depreciation, and interest expense associated with properties owned by, and activities of, our TRS entities.

Current wording

For the nine months ended September 30, 2024, we recognized an income tax benefit of $8.7 million, compared to an income tax benefit of $10.8 million for the same period in 2023. The decrease is due primarily to a change in estimate associated with finalizing the 2022 tax returns in third quarter of 2023, partially offset by the tax effect of fewer gains, increased depreciation, and interest expense associated with properties owned by, and activities of, our TRS entities.

Previous wording

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. Our 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, 2023. There have been no significant changes in our critical accounting estimates from those reported in our Form 10-K, other than as noted below, 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.

Current wording

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. Our 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, 2023. There have been no significant changes in our critical accounting estimates from those reported in our Form 10-K, other than as noted in our Form 10-Q for the period ended June 30, 2024, 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.

Previous wording

the non-cash (income) loss recognized on our investment in IQHQ.

Current wording

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

Previous wording

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and six months ended June 30, 2024 and 2023, is as follows (in thousands):

Current wording

The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2024 and 2023, is as follows (in thousands):

Previous wording

As of June 30, 2024, our available liquidity was $259.4 million, which consisted of:

Current wording

As of September 30, 2024, our available liquidity was $260.4 million, which consisted of:

Previous wording

$88.5 million in cash and cash equivalents;

Current wording

$82.6 million in cash and cash equivalents;

Previous wording

$20.9 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance; and

Current wording

$27.8 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance; and

Previous wording

As of June 30, 2024, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $17.4 million. The initial allocations to our joint ventures have remaining unfunded commitments of $3.0 million. We also have unfunded commitments in the amount of $1.7 million related to four investments in entities that develop technology related to the real estate industry. Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, and future investments. 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.

Current wording

As of September 30, 2024, we had sufficient capacity on our non-recourse construction loans to cover our remaining commitments on development and redevelopment projects of approximately $163.7 million. We also have unfunded commitments in the amount of $1.5 million related to four investments in entities that develop technology related to the real estate industry. Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, and future investments. 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.

Previous wording

In the event that our cash and cash equivalents, revolving secured credit facility, and cash provided by operating activities are not sufficient to cover our liquidity needs, we have the means to generate additional liquidity, such as from additional property financing activity and proceeds from apartment community sales. We expect to meet our long-term liquidity requirements, including debt maturities, development and redevelopment spending, and future investment activity, primarily through property financing activity, cash generated from operations, and the recycling of our equity. Our revolving secured credit facility matures in December 2024, prior to consideration of its one-year extension option.

Current wording

In the event that our cash and cash equivalents, revolving secured credit facility, and cash provided by operating activities are not sufficient to cover our liquidity needs, we have the means to generate additional liquidity, such as from additional property financing activity and proceeds from apartment community sales. We expect to meet our long-term liquidity requirements, including debt maturities, development and redevelopment spending, and future investment activity, primarily through property financing activity, cash generated from operations, and the recycling of our equity. Our revolving secured credit facility matures in December 2024, prior to consideration of its one-year extension option that we intend to exercise.