81%, with the balance owned by OP unitholders and our select joint venture partners.

management, and IT support across the portfolio.

Excluding the notes receivable from Aimco in our calculation of Net Leverage and the related interest income from our calculation of Adjusted EBITDAre, Net Leverage to EBITDAre was 7.3x as of December 31, 2021 and, Pro forma completion of firstopportunistic fourth quarter 2022 sales, was 6.2x.share repurchases.

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require modification of resident screening requirements, or affect the stability of our communities.

In the energy arena, AIR creates a positive environmental impact though energy management including systematic investmentsgovernance issues most relevant to financial performance in building systems and SmartRent technology, which provides high and low temperature alerts and water leak detection. Utilities for vacant units are managed automatically, saving 1.9 million kWh of energy since 2019. We have incorporated LED lighting, low flow fixtures, and weatherization projects across the portfolio, and invested $19.2 million in conservation over the last 3 years.

AIR’s corporate philosophy is founded upon solid corporate governance, high ethical standards and professional responsibility. We engage annually with nearly three-quarters of stockholders on ESG matters. We have been awarded for the past several years for board composition by the Women’s Forum of New York, the Women’s Leadership Foundation, and Women on Boards. The Board’s Governance and Corporate Responsibility Committee oversees all ESG activities including political and non-profit contributions. AIR conducts regular Board refreshment and has an intentional balance of different backgrounds and experience.

each industry.

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meaningful work of providing homes for others. We see our workforce as a team, and not employees only. Our view is relational, and not transactional, reflecting a longer view of the benefits of a cohesive and caring team.

In 2023, 22% of AIR teammates voluntarily took part in AIR’s leadership training.

We offer benefits reinforcing our value of caring for each other, including an opportunity to manage one’s life through flexible work schedules and “dress for your day,” paid time for parental leave, profit sharing, retirement plans for all, financial support for our teammates who are becoming United States citizens, and a bonus structure at all levels of the organization. We also pay full compensation and benefits for teammates who are actively deployed by the United States military.

Our team is also focused on making a difference in our local communities through our philanthropic endeavor, AIR Gives. For over 15 years, we have provided the flexibility for teammates to support a nonprofit or initiative that means the most to them. Teammates have 15 hours of paid leave toward volunteering with a nonprofit. Every hour volunteered also provides the teammate with charitable dollars to direct to a nonprofit of choice. Also, through AIR Gives, we award college scholarships to children of teammates. AIR Gives has supported over 640 students of our teammates with more than $1.3 million in scholarships since 2006. We raised $0.4 million from the AIR Gives Charity Golf Tournament in 2021 to benefit the Tragedy Assistance Program for Survivors, Project Sanctuary, and scholarships for students in affordable housing in partnership with the National Leased Housing Association. We also provide financial assistance to AIR teammates experiencing a financial emergency or going through crisis.

A critical element of our culture is a relentless focus on efficiency. We continuously seek to reduce costs through process improvement, innovation, and continued technological investment. We expect this focus will make our properties more productive and also enable our general and administrative expenses, broadly defined, to be lower, as a percentage of our investments (measured by gross asset value), than are our peers. As a result, we expect our stockholders will benefit from a higher percentage of rental revenue being available after all costs for reinvestment in our business or dividends paid to our stockholders.

Our focus on our team and our culture is recognized externally. AIR has been recognized nationally as a “National Top Workplace Winner.” In addition to that national recognition, AIR has previously been recognized as a top workplace in Colorado, the Washington, D.C. area, and the San Francisco Bay area. Specifically in 2021, out of hundreds of participating companies, AIR was one of only six recognized by the Denver Post as a “Top Workplace” in Colorado for each of the past nine years. Also in 2021, AIR was recognized by the Washington Post as a “Top Workplace” in the Washington D.C. area. AIR was also recognized in 2021 (and for the second consecutive year) by the Denver Business Journal as one of the Denver Area’s Healthiest Employers.

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COVID-19 and our Team

Impacts of the COVID-19 pandemic and governmental lockdowns continued into 2021. A cross-functional committee continued to lead our efforts to adjust to the changing conditions in order to keep our team and our residents safe.

We continued our commitment to our teammates by allowing flexible work arrangements, undertook to pay all costs associated with COVID-19 testing and treatment, and continued clear and frequent communication. Any teammate diagnosed with COVID-19 or placed into quarantine by doctor’s orders receives paid time off during the quarantine period.

Using our previous investment in technology and artificial intelligence, paired with policies providing flexibility, our team continued to lease apartments and fulfill service requests in a safe environment for both the team and our residents. Our top priority is the health and safety of our residents and teammates. Accordingly, we maintain enhanced cleaning procedures as well as physical distancing and remote working guidelines at our communities and corporate offices. Additionally, seeing residents as individuals, each impacted differently by the pandemic and lockdowns, our teammates have undertaken to speak to every resident in need, to listen, and to help each to solve his or her problems. We also seek to assist the broader communities where our residents and teammates live and work.

2022.

the general economic climate, including the impact of international hostilities and unrest;

Our ability to make payments to our investors depends on our ability to generate net operating income in excess of required debt payments and capital expenditure requirements. Our net operating income and liquidity may be adversely affected by events or conditions beyond our control, including:

Competition could limit our ability to lease apartment homes or increase or maintain rents.

Because real estate investments are relatively illiquid, we may

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apartment community may be diminished if obsolescence or neighborhood changes occur before we are able to sell the apartment community. Additionally, occupancy rates and rents at these properties could fail to meet our expectations or we may underestimate the costs necessary to operate an acquired property to the standards established for its intended market position. This could have an adverse effect on our financial condition or results of operations.

Potential liability

reassessment for a considerable amount of time following a particular transaction. Therefore, the property taxes we are required to pay could increase substantially from the prior or current years, including on a retroactive basis. Additionally, the base tax rate of 1% for all taxing authorities guaranteed under Prop 13 does not include additional property tax levies for approved voter indebtedness or non-ad valorem tax increases. Various initiatives to repeal or amend Prop 13, to eliminate its application to commercial and residential property, to increase the permitted annual real estate tax increases, and/or to introduce split tax roll legislation could increase the assessed value and/or tax rates applicable to commercial property in California. Further, changes in U.S. federal tax law could cause state and local laws subject apartment community owners or operatorsgovernments to liability for management, and the costsalter their taxation of removal or remediation, of certain potentially hazardous materials that may be present in the land or buildings of an apartment community. Potentially hazardous materials may include polychlorinated biphenyls, petroleum-based fuels, lead-based paint, or asbestos, among other materials. Such laws often impose liability without regard to fault or whether the owner or operator knew of, or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities. In addition, governmental agencies may bring claims for costs associated with investigation and remediation actions, damages to natural resources, and for potential fines or penalties in connection with such damage or with respect to the improper management of hazardous materials. Moreover, private plaintiffs may potentially make claims for investigation and remediation costs they incur or personal injury, disease, disability, or other infirmities related to the alleged presence of hazardous materials at an apartment community. In addition to potential environmental liabilities or costs associated with our current apartment communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future, or apartment communities we no longer own or operate.

real property.

Laws benefiting disabled persons may result in In addition, resident selection is a key component of our incurrenceoperating model – selecting for residents who pay rent and rent increases, stay with us longer, and make good neighbors. Certain jurisdictions limit our ability to consider the rental history, credit history, eviction history, and criminal backgrounds of unanticipated expenses.

Under the Americans with Disabilities Act of 1990 (“ADA”), all places intended to be used by the public are required to meet certain federal requirements related to access and use by disabled persons. The Fair Housing Amendments Act of 1988 (“FHAA”) requires apartment communities first occupied after March 13, 1991,potential residents.We intend to comply with design and construction requirements for disabled access. For those apartment communities receiving federal funds, the Rehabilitation Act of 1973 also has requirements regarding disabled access. These and other federal, state, and localresident screening laws may require structural modificationsthat apply to our apartment communities, or changes in policy/practice or affect renovations of the communities. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although we believe that our apartment communities are substantially in compliance with present requirements, we may incur unanticipated expensesfailure to comply with the ADA, the FHAA, and the Rehabilitation Act of 1973 in connection with the ongoing operation ofcould harm our apartment communities and the apartment communities we manage.

Moisture infiltration and resulting mold remediation may be costly.

Although we are proactively engaged in managing moisture intrusion and preventing the presence of mold atbusiness or our apartment communities, it is not unusual for periodic moisture intrusion to cause mold in isolated locations within an apartment community. We have implemented policies, procedures, and training, and include a detailed moisture intrusion and mold assessment during acquisition due diligence. We believe these measures will manage mold exposure at our apartment communities and will minimize the effects that mold may have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. We have only limited insurance coverage for property damage claims arising from the presence of mold and for personal injury claims related to mold exposure.

reputation.

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parties, we establish reserves at levels that reflect our known and estimated losses. The ultimate cost of losses and the impact of unforeseen events may vary materially from recorded reserves, and variances may adversely affect our operating results and financial condition. We purchase insurance to reduce our exposure to losses and limit our financial losses on large individual risks. The availability and cost of insurance are determined by market conditions outside our control. Current market conditions are challenging with respect to capacity and price. No assurance can be made that we will be able to obtain and maintain insurance at the same levels and on the same terms as we do today. If we are not able to obtain or maintain insurance in amounts we consider appropriate for our business, or if the cost of obtaining such insurance increases materially, we may have to retain a larger portion of the potential loss associated with our exposures to risks.

Natural disasters and severe weather may affect our financial condition and results of operations.

Natural disasters such as earthquakes and severe weather such as hurricanes may result in significant damage to our apartment communities. The extent of our casualty losses and loss in operating income in connection with such events is a function of the severity of the event and the total amount of exposure in the affected area. When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather event (such as a hurricane) affecting a region may have a significant adverse effect on our financial condition and results of operations. We cannot accurately predict natural disasters or severe weather, or the number and type of such events that will affect us. As a result, our operating and financial results may vary significantly from one period to the next. Although we anticipate and plan for losses, there can be no assurance that our financial results will not be adversely affected by our exposure to losses arising from natural disasters or severe weather in the future that exceed our previous experience and assumptions.

We depend on our senior management.

Our success and our ability to implement and manage anticipated future growth depend, in large part, upon the efforts of our senior management team, who have extensive market knowledge and relationships, and exercise substantial influence over our operational, financing, acquisition, and disposition activity. Members of our senior management team have national or regional industry reputations that attract business and investment opportunities and assist us in negotiations with lenders, existing and potential tenants, and other industry participants. The loss of services of one or more members of our senior management team, or our inability to attract and retain similarly qualified personnel, could adversely affect our business, diminish our investment opportunities, and weaken our relationships with lenders, business partners, existing and prospective tenants, and industry participants, which could adversely affect our financial condition, results of operations, cash flow, per share trading price of AIR Common Stock, and ability to make distributions to our stockholders.

Our business and operations would suffer in the event of significant disruptions or cyberattacks of our information technology systems or our failure to comply with laws, rules and regulations related to privacy and data protection.

Information technology, communication networks, and related systems are essential to the operation of our business. We use these systems to manage our resident and vendor relationships, internal communications, accounting and record-keeping systems, and many other key aspects of our business. Our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks, which also depend on the strength of our procedures and the effectiveness of our internal controls. Information security risks have generally increased in recent years due to the rise in new technologies and the increased sophistication and activities of perpetrators of cyberattacks.

Despite system redundancy, risk transfer, insurance, indemnification, the implementation of security measures, our required teammate awareness training, and the existence of a disaster recovery plan for our internal information technology systems, our systems, and systems maintained by third-party vendors with which we do business, are vulnerable to damage from any number of sources. We face risks associated with energy blackouts, natural disasters, terrorism, war, telecommunication failures, and cyberattacks and intrusions, such as computer viruses, malware, attachments to emails, intrusion, and unauthorized access, including from persons inside our organization or from persons outside our organization with access to our systems. We may also incur additional costs to remedy damages caused by such disruptions. Although we make efforts to maintain the security and integrity of our systems and have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Any compromise of our security could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information (which may be confidential, proprietary, or commercially sensitive in nature), and a loss of confidence in our security measures, which could harm our business.

We also are subject to laws, rules, and regulations in the United States, such as the California Consumer Protection Act, or CCPA (which became effective on January 1, 2020), relating to the collection, use, and security of employee and other data. Evolving compliance and operational requirements under the CCPA and the privacy and data security laws of other jurisdictions

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in which we operate impose significant costs that are likely to increase over time. Our failure to comply with laws, rules, and regulations related to privacy and data protection could harm our business or reputation.

Contracts for redevelopment and development services create risk for non-performance.

From time to time, we may choose to contract with Aimco or another qualified party to develop or redevelop properties. If Aimco or such another qualified party is unsuccessful in redeveloping or developing properties and fails to perform under our agreements with it, it could have an impact on our ability to grow our portfolio and to acquire stabilized properties at prices favorable to us, which could have a material adverse effect on our financial condition and results of operations.

“Sale

Uponinability to collect payments from residents.

The Separation was designed to minimize conflicts of interest between AIR and Aimco. Additionally, to provide direct oversight, AIR's board of directors has formed the AIR-AIV Transactions Committee to oversee prospective transactions between the two companies to ensure they are on arm’s length terms. The Aimco Board of Directors has formed a similar committee.

Although AIR and Aimco each have an independent board of directors and independent management and are incentivized to make decisions that arepresent in the best interestsland or buildings of its respective business, Mr. Considine serves on both AIR’s and Aimco’s boardsan apartment community. Potentially hazardous materials may include polychlorinated biphenyls, petroleum-based fuels, lead-based paint, or asbestos, among other materials. Such laws often impose liability without regard to fault or whether the owner or operator knew of, directors.or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities. In addition, as part of the Separation, AIRgovernmental agencies may bring claims for costs associated with investigation and Aimco entered into the Employee Matters Agreement, which provides that Mr. Considine will continueremediation actions, damages to serve Aimconatural resources, and for potential fines or penalties in connection with specific responsibilities through the balance of 2022 to support the establishment and growth of the Aimco business, reporting directlysuch damage or with respect to the Aimco boardimproper management of directors. Mr. Considine does not serve onhazardous materials. Moreover, private plaintiffs may potentially make claims for investigation and remediation costs they incur, or personal injury, disease, disability, or other infirmities related to the AIR-AIV Transactions Committee and will recuse himself from voting as a memberalleged presence of either board of directors during the approvalhazardous materials at an apartment community. In addition to potential environmental liabilities or disapproval of any transactions between the two companies.

Aimco and AIR have chosen different lines of business, but the agreements between Aimco and AIR generally do not limitcosts associated with our current apartment communities, we may also be responsible for such liabilities or restrict Aimcocosts associated with communities we acquire or its affiliates from engaging in any business or managing other entities that engage in business of the type conducted by us. Although AIR and Aimco do not generally engage in the same business, Aimco and its affiliates maymanage in the future, determine to manageor apartment communities we no longer own or operate.

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certainconnection with the ongoing operation of our apartment communities or increase its ownershipand the apartment communities we manage.

Increases

Asresponse to changes in economic or other market conditions. Our ability to dispose of December 31, 2021, we had approximately $1.5 billion of variable-rate indebtedness outstanding. We estimate that an increase in 30-day LIBOR of 100 basis points with constant credit risk spreads would increase interest expense by $15.1 million on an annual basis. We estimate that a decrease in 30-day LIBOR of 100 basis points with constant credit risk spreads would reduce interest expense by, a lesser amount, $4.8 million on an annual basis, due to the existence of LIBOR floors in certain of our floating rate debt agreements.

As of December 31, 2021, we had $92.7 million in cash and cash equivalents and restricted cash, a portion of which bears interest at variable rates, which may partially mitigate the effect of an increase in variable rates on our variable-rate indebtedness discussed above.

The phasing out of LIBOR could adversely affect our business, operating results, and financial condition.

In March 2021, the Financial Conduct Authority, which regulates LIBOR, announced that all LIBOR settings will either cease to be provided or no longer be representative (i) immediately after December 31, 2021,apartment communities in the casefuture will depend on prevailing economic and market conditions, including the cost and availability of the one-week and two-month U.S. dollar LIBOR terms and all sterling, euro, Swiss franc, and Japanese yen settings, and (ii) immediately after June 30, 2023, in the case of the overnight, one-, three-, six-, and 12-month U.S. dollar LIBOR terms. In 2018, the Alternative Reference Rates Committee identified the Secured Overnight Financing Rate (“SOFR”) as the alternative to LIBOR. However, uncertainty exists in the markets as to the adoption and implementation of alternative reference rates, and whether or not SOFR attains market traction as a LIBOR replacement remains a question. At this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference rates or any other regulatory reforms that may be enacted in the United Kingdom or elsewhere. Due to the broad use of LIBOR as a reference rate, all financial market participants, including us, are impacted by the risks associated with this transition. Certain of our debt agreements, including or revolving credit facility and two term loan credit facilities, bear interest at rates that are calculated based, in part, on LIBOR. Accordingly, the phase-out of LIBOR and any other related changes or reformsfinancing. This could have a material adverse effect on our financing costs, and as a result, our financial condition operatingor results of operations.

therefore could adversely affect our results of operations.

Risks Related to the Separation

We may be unable to achieve some or all of the benefits that we expect to achieve from the Separation.

Following the Separation, we and Aimco are two focused and independent companies. We may not be able to achieve some or all of the benefits that we expect to achieve as a company independent from Aimco in the time we expect, if at all. For instance,

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it may take longer than anticipated for us to, or we may never, succeed in growing our business through the acquisition of stabilized apartment communities or through our active management strategies.

The Separation could give rise to disputes or other unfavorable effects, which could materially and adversely affect our business, financial position, or results of operations.

In connection with the Separation, we entered into a Separation and Distribution Agreement with Aimco, effective as of December 15, 2020 (the “Separation Agreement”), which, among other things, contains the agreements among the parties regarding the principal transactions that were necessary to effect the Separation. It also sets forth other agreements that govern certain aspects of the parties’ ongoing relationship after the Separation. The Separation may lead to increased operating and other expenses, of both a nonrecurring and a recurring nature, and to changes to certain operations, which expenses or changes could arise pursuant to arrangements made between Aimco and us or could trigger contractual rights of, and obligations to, third parties. Disputes with third parties could also arise out of these transactions, and we could experience unfavorable reactions to the Separation from our teammates, lenders, ratings agencies, regulators, or other interested parties. These increased expenses, changes to operations, disputes with third parties, or other effects could materially and adversely affect our business, financial position, or results of operations. In addition, disputes with Aimco could arise in connection with each of the Separation Agreement, the Employee Matters Agreement, the Property Management Agreements, the Master Services Agreement, the Master Leasing Agreement, or other agreements.

Although we have endeavored to enter into agreements on market terms, our Separation-related agreements with Aimco may not reflect terms that would have resulted from arm’s-length negotiations with unaffiliated third parties.

The agreements related to the Separation, including the Separation Agreement, the Employee Matters Agreement, the Property Management Agreements, the Master Services Agreement, the Master Leasing Agreement, and certain other agreements were entered into in the context of the Separation while we were still controlled by Aimco. As a result, although we endeavored to enter into these agreements on market terms, they may not reflect terms that would have resulted from arm’s-length negotiations between unaffiliated third parties. The terms of the agreements entered into in the context of the Separation concern, among other things, allocation of assets and liabilities attributable to periods prior to the Separation and the rights and obligations, including certain indemnification obligations, of Aimco and us after the Separation, certain services provided by us to Aimco and by Aimco to us after the Separation, and Aimco’s lease from us of certain properties.

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affect AIR and AIR’s stockholders. Revisions in federal tax laws and interpretations thereof could significantly and negatively affect AIRAIR's ability to qualify as a REIT and the tax considerations relevant to an investment in AIR Common Stock, or could cause AIR to change its investments and commitments.

Government housing regulations may limit the opportunities at some of our apartment communities and failure to comply with resident qualification requirements may result in financial penalties or loss of benefits, such as rental revenues paid by government agencies. Additionally, the government may cease to operate or reduce funding for government housing programs, which would result in a loss of benefits from those programs.

We may own equity interests in entities that own certain apartment communities that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by the United States Department of Housing and Urban Development (“HUD”), or state housing finance agencies, typically provide one or more of the following: mortgage insurance, favorable financing terms, tax-exempt interest, historic or low-income housing tax credits, or rental assistance payments to the apartment community owners. As a condition of the receipt of assistance under these programs, the apartment communities must comply with various requirements, which typically limit rents to pre-approved amounts and limit our choice of residents to those with incomes at or below certain levels. Failure to comply with these requirements may result in financial penalties or loss of benefits. We will likely be required to obtain the approval of HUD in order to acquire or dispose of a significant interest in or manage a HUD-assisted apartment community. We may not always receive such approval.

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assets upon their liquidation or reorganization are effectively subordinated to the claims of their creditors and any holders of preferred equity senior to our equity investments. To the extent that we are recognized as

AIR stockholder

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determination, AIR’s Board of Directors considers a variety of factors, including: REIT distribution requirements, current market conditions, liquidity needs, and other uses of cash, such as for deleveraging and accretive investment activities.

From January 1, 2022 through February 24, 2022, AIR's TSR has outperformed the MSCI US REIT index, the NAREIT Equity Apartments Index, and the S&P MidCap 400 Index, by 540 bps, 230 bps, and 330 bps respectively.

approximately 81%.

The Separation

For financial reporting purposes, GAAP requires that Aimco be presented as the predecessor for AIR’s financial statements. As a result, unless otherwise stated, financial results prior to the Separation on December 15, 2020 include the financial results of Aimco. The financial results prior to the Separation attributable to the apartment communities retained by Aimco are presented as discontinued operations and are excluded from our property net operating income.

Consistent with our expectations, full year ADO trended upwards from 94.8% in 2020 to 96.3% in 2021, with January 2022 ADO reaching a record high of 98.4%.

Portfolio Management and Quality

Our2023, AIR improved its portfolio of apartment communities is diversified across primarily “A” and “B” price points, averaging “B/B+” in quality, and is also diversified across several of the largest markets in the United States. During 2021, we exited the Chicago and New York markets and, subsequent to year-end, reduced our exposure to California. We added to our portfolio in Florida through a $223 million acquisition, and improved the quality and location of our Washington, D.C. portfolio through selling some properties and partial interests in others while acquiring four properties, whose NOI growth we expect will exceed market NOI growth by more than 10% during each of the next two years and will exceed that of the properties we sold. Our 2021 portfolio management activities increased our average rents by approximately $150 per home and reduced the portfolio's average age by one year. Our current portfolio is of a higher quality and is expected to require lower recurring capital replacement spending.

We measure the quality of apartment communities in our portfolio based on average rents of our apartment homes compared to local market average rents as reported by a third-party provider of commercial real estate performance data and analysis. Under this rating system, we classify as “A” quality apartment communities those earning rents greater than 125% of local market average; and as “B” quality apartment communities those earning rents between 90% and 125% of local market average. We classify as “B/B+” quality a portfolio that on average earns rents between 100% and 125% of local market average rents. Although some companies and analysts within the multi-family real estate industry use apartment community quality ratings of “A” and “B” , some of which are tied to local market rent averages, the metrics used to classify apartment community quality as well as the period for which local market rents are calculated may vary from company to company. Accordingly, our rating system for measuring apartment community quality is neither broadly nor consistently used in the multi-family real estate industry. As of December 31, 2021, our portfolio was allocated about one-half to “A” rated properties, and about one-half to “B” rated properties.

We expect to improve the quality of our portfolio by allocating investment capital to enhance rent growth and increase long-term capital values through routine investments in property upgrades (such as upgrading kitchens, bathrooms, and other interior design aspects) and through portfolio design, emphasizing land value as well as location and submarket. We plan to maintain a dynamic capital allocation and market selection process, expecting over time to reallocate our investment to locations with lower public tax burdens, including the southeastern United States and the Mountain West. We target geographic diversification in our portfolio to reduce the volatility of our rental revenue by avoiding undue concentration in any particular market.

As part of our portfolio strategy, we seek to sell communities with lower expected FCF internal rates of return and reinvest the proceeds from such sales in accretive uses such as capital enhancements, share repurchases, and selective acquisitions of stabilized communities with projected FCF internal rates of return higher than expected from the communities being sold. When the cost of capital is favorable, we will look to grow through the acquisition of stabilizedthree properties with 1,115 apartment communities that we believe we can operate better than their previous owners. Through this disciplined approach to capital allocation, we expect to increase the quality and expected growth rate of our portfolio.

Transactions

Acquisitions

In 2021, we acquired five propertieshomes for approximately $730$459.2 million, including four propertiesone property in the Washington D.C. areaMiami Beach, Florida, one in Raleigh, North Carolina, and one in Pembroke Pines, Florida,Durham, North Carolina. The acquisitions are expected to be accretive to FCF in both 2024 and thereafter.

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Dispositions

During 2021, we sold 16 apartment communities located in New York City, Washington, D.C.,net cash flows from operations, and Chicago with 1,395 apartment homes for gross proceeds of $512 million. Net sales proceeds from these transactions were $472 million.

Also during 2021, we formed a joint venture with an affiliate of Blackstone by selling for $408 million an 80% interest in three multi-family properties with 1,748 units located in Virginia. AIR is the general partner with 20% ownership and earns various fees for providing property management, construction, and corporate services.

After year end, we sold an additional seven apartment communities located in San Diego, Los Angeles, andservices to the Bay Area for gross proceeds of $507 million. We are under contract to sell an additional $267 million ofjoint venture.

0.5 million OP Units at an average price of $35.05 for $18.5 million.

We seek to minimize refunding and repricing risk.

Leverage Targets

We target Net Leverage to Adjusted EBITDAre at 5.5x, with a range between 5.0xleverage and 6.0x. Our leverage ratios for the three months ended December 31, 2021 are presented below:

Excluding the notes receivable from Aimco in our calculation of Net Leverage and including the related interest income in our calculation of Adjusted EBITDAre, Net Leverage to EBITDAre was 7.3x as of December 31, 2021 and, Pro forma completion of first quarter 2022 sales, was 6.2x.

Under our revolving credit facility and term loans, we have agreed to maintain a fixed charge coverage ratio of 1.50x. For the year ended December 31, 2021, our Fixed Charge Coverage ratio was 2.60x.

Please see the Leverage Ratios subsection of the Non-GAAP Measures section for further information about the calculation of our leverage ratios.

of just under $2 billion.

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properties sold or expected to be sold during the first quarter of 2022,2023, we held unencumbered apartment communities with an estimated fair market value of approximately $8.4 billion, triple the amount from December 31, 2020.

We anticipate seeking an$4.9 billion. AIR’s two investment grade credit rating from Moody’s. In assigning ratings Moody’s places significant emphasis onprovide the amount of non-recourse propertycompany access to all debt as percentage ofcapital market sources.

Dividend

As planned, AIR’s refreshed tax basis resulted in a tax efficient dividend paid to stockholders. In 2021, AIR's dividend of $1.74 per share was one-third taxable as capital gains, and two-thirds tax-free return of capital, increasing its after-tax yield to taxable investors.

On February 1, 2022, ourAIR Board of Directors declared a quarterly cash dividend of $0.45 per share of AIR Common Stock. This amount is payable on February 25, 2022,27, 2024, to stockholdersshareholders of record on February 17, 2022.

16, 2024.

peer average.

In the energy arena, AIR creates a positive environmental impact though energy management including systematic investmentsgovernance issues most relevant to financial performance in building systems and SmartRent technology, which provides high and low temperature alerts and water leak detection. Utilities for vacant units are managed automatically, saving 1.9 million kWh of energy since 2019. We have incorporated LED lighting, low flow fixtures, and weatherization projects across the portfolio, and invested $19.2 million in conservation over the last 3 years.