(Unaudited)

Perpetual Preferred Stock

Common Stock

Accumulated

Noncontrolling
Interests in

Common
Noncontrolling
Interests in

Shares
Issued

Amount

Shares
Issued

Amount

Additional
Paid-
in Capital

Other
Comprehensive
Income

Distributions
in Excess
of Earnings

Total AIR
Equity

Consolidated
Real Estate
Partnerships

AIR
Operating
Partnership

Total
Equity

Balances at June 30, 2021

20

$
2,000

156,856,952

$
1,569

$
3,773,173

$
—

$
(2,197,843
)

$
1,578,899

$
(67,531
)

$
60,388

$
1,571,756

Issuance costs

—

—

—

—

(31
)

—

—

(31
)

—

—

(31
)
Redemption of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

(425
)

(425
)
Conversion of AIR Operating Partnership units

—

—

125,621

1

6,282

—

—

6,283

—

(6,283
)

—

Amortization of share-based compensation cost

—

—

—

—

409

—

—

409

—

992

1,401

Effect of changes in ownership of consolidated entities

—

—

—

—

(5,423
)

—

—

(5,423
)

—

5,653

230

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

4,128

—

4,128

Net income (loss)

—

—

—

—

—

—

9,378

9,378

(785
)

475

9,068

Common Stock dividends

—

—

—

—

—

—

(69,051
)

(69,051
)

—

—

(69,051
)
Preferred Stock dividends

—

—

—

—

—

—

(43
)

(43
)

—

—

(43
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(3,910
)

(3,481
)

(7,391
)
Other, net

—

—

969

—

(474
)

—

(3
)

(477
)

—

(230
)

(707
)
Balances at September 30, 2021

20

$
2,000

156,983,542

$
1,570

$
3,773,936

$
—

$
(2,257,562
)

$
1,519,944

$
(68,098
)

$
57,089

$
1,508,935

Balances at June 30, 2022

20

$
2,000

154,187,241

$
1,542

$
3,636,906

$
13,750

$
(1,521,749
)

$
2,132,449

$
(70,609
)

$
226,985

$
2,288,825

Redemption of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

(3,178
)

(3,178
)
Repurchase of Common Stock, net

—

—

(1,195,690
)

(12
)

(46,699
)

—

—

(46,711
)

—

—

(46,711
)
Amortization of share-based compensation cost

—

—

—

—

878

—

—

878

—

943

1,821

Effect of changes in ownership of consolidated entities

—

—

—

—

(2,140
)

—

—

(2,140
)

—

2,140

—

Purchase of noncontrolling interests in consolidated real estate partnerships

—

—

—

—

(5,529
)

—

—

(5,529
)

120

—

(5,409
)
Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

529

—

529

Change in accumulated other comprehensive income

—

—

—

—

—

32,198

—

32,198

—

2,742

34,940

Net income (loss)

—

—

—

—

—

—

1,759

1,759

(102
)

137

1,794

Common Stock dividends

—

—

—

—

—

—

(69,377
)

(69,377
)

—

—

(69,377
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(6,226
)

(4,472
)

(10,698
)
Other, net

—

—

1,897

(305
)

—

(42
)

(347
)

88

(235
)

(494
)
Balances at September 30, 2022

20

$
2,000

152,993,448

$
1,530

$
3,583,111

$
45,948

$
(1,589,409
)

$
2,043,180

$
(76,200
)

$
225,062

$
2,192,042

~~(Unaudited)~~

Perpetual Preferred Stock

Common Stock

Accumulated

Noncontrolling
Interests in

Common
Noncontrolling
Interests in

Shares
Issued

Amount

Shares
Issued

Amount

Additional
Paid-
in Capital

Other
Comprehensive
Income

Distributions
in Excess
of Earnings

Total AIR
Equity

Consolidated
Real Estate
Partnerships

AIR
Operating
Partnership

Total
Equity

Balances at December 31, 2020

20

$
2,000

148,861,036

$
1,489

$
3,432,121

$
3,039

$
(2,131,798
)

$
1,306,851

$
(61,943
)

$
63,185

$
1,308,093

Issuance of Common Stock

—

—

7,825,000

79

342,390

—

—

342,469

—

—

342,469

Issuance costs

—

—

—

—

(337
)

—

—

(337
)

—

—

(337
)
Redemption of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

(3,975
)

(3,975
)
Conversion of AIR Operating Partnership units

—

—

168,940

1

8,239

—

—

8,240

—

(8,242
)

(2
)
Amortization of share-based compensation cost

—

—

33,000

—

2,953

—

—

2,953

—

2,975

5,928

Effect of changes in ownership of consolidated entities

—

—

—

—

(9,846
)

—

—

(9,846
)

—

10,076

230

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

6,126

—

6,126

Change in accumulated other comprehensive income (loss)

—

—

—

—

—

(3,039
)

—

(3,039
)

—

(212
)

(3,251
)
Net income (loss)

—

—

—

—

—

—

74,740

74,740

(3,417
)

3,966

75,289

Common Stock dividends

—

—

—

—

—

—

(200,327
)

(200,327
)

—

—

(200,327
)
Preferred Stock dividends

—

—

—

—

—

—

(136
)

(136
)

—

—

(136
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(8,744
)

(10,684
)

(19,428
)
Other, net

—

—

95,566

1

(1,584
)

—

(41
)

(1,624
)

(120
)

—

(1,744
)
Balances at September 30, 2021

20

$
2,000

156,983,542

$
1,570

$
3,773,936

$
—

$
(2,257,562
)

$
1,519,944

$
(68,098
)

$
57,089

$
1,508,935

Balances at December 31, 2021

145

$
2,129

156,998,367

$
1,570

$
3,763,105

$
—

$
(1,953,779
)

$
1,813,025

$
(70,883
)

$
197,013

$
1,939,155

Redemption of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

(7,423
)

(7,423
)
Repurchase of Common Stock, net

—

—

(4,107,451
)

(41
)

(171,670
)

—

—

(171,711
)

—

—

(171,711
)
Amortization of share-based compensation cost

—

—

—

—

3,519

—

—

3,519

—

2,753

6,272

Effect of changes in ownership of consolidated entities

—

—

—

—

(5,404
)

—

—

(5,404
)

—

5,404

—

Purchase of noncontrolling interests in consolidated real estate partnerships

—

—

—

—

(5,529
)

—

—

(5,529
)

120

—

(5,409
)
Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

8,337

—

8,337

Change in accumulated other comprehensive income

—

—

—

—

—

45,948

—

45,948

—

3,913

49,861

Net income (loss)

—

—

—

—

—

—

574,864

574,864

(285
)

37,053

611,632

Common Stock dividends

—

—

—

—

—

—

(210,361
)

(210,361
)

—

—

(210,361
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(13,561
)

(13,408
)

(26,969
)
Other, net

(125
)

(129
)

102,532

1

(910
)

—

(133
)

(1,171
)

72

(243
)

(1,342
)
Balances at September 30, 2022

20

$
2,000

152,993,448

$
1,530

$
3,583,111

$
45,948

$
(1,589,409
)

$
2,043,180

$
(76,200
)

$
225,062

$
2,192,042

~~(Unaudited)~~

Preferred
Units

General Partner
and Special
Limited Partner

Limited
Partners

Partners’ Capital
Attributable to the
AIR Operating
Partnership

Noncontrolling
Interests
in Consolidated Real
Estate Partnerships

Total
Partners’
Capital

Balances at December 31, 2020

$
2,000

$
1,304,851

$
63,185

$
1,370,036

$
(61,943
)

$
1,308,093

Issuance of common partnership units to AIR, net

—

342,469

—

342,469

—

342,469

Issuance costs

—

(337
)

—

(337
)

—

(337
)
Redemption of common partnership units

—

—

(3,975
)

(3,975
)

—

(3,975
)
Conversion of common partnership units

—

8,240

(8,242
)

(2
)

—

(2
)
Amortization of share-based compensation cost

—

2,953

2,975

5,928

—

5,928

Effect of changes in ownership of consolidated entities

—

(9,846
)

10,076

230

—

230

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

6,126

6,126

Change in accumulated other comprehensive income (loss)

—

(3,039
)

(212
)

(3,251
)

—

(3,251
)
Net income (loss)

—

74,740

3,966

78,706

(3,417
)

75,289

Distributions to common unitholders

—

(200,327
)

(10,684
)

(211,011
)

—

(211,011
)
Distributions to preferred unitholders

—

(136
)

—

(136
)

—

(136
)
Distributions to noncontrolling interests

—

—

—

—

(8,744
)

(8,744
)
Other, net

—

(1,624
)

—

(1,624
)

(120
)

(1,744
)
Balances at September 30, 2021

$
2,000

$
1,517,944

$
57,089

$
1,577,033

$
(68,098
)

$
1,508,935

Balances at December 31, 2021

$
2,129

$
1,810,896

$
197,013

$
2,010,038

$
(70,883
)

$
1,939,155

Redemption of common partnership units

—

—

(7,423
)

(7,423
)

—

(7,423
)
Repurchase of common partnership units

—

(171,711
)

—

(171,711
)

—

(171,711
)
Amortization of share-based compensation cost

—

3,519

2,753

6,272

—

6,272

Effect of changes in ownership of consolidated entities

—

(5,404
)

5,404

—

—

—

Purchase of noncontrolling interests in consolidated real estate partnerships

—

(5,529
)

—

(5,529
)

120

(5,409
)
Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

8,337

8,337

Change in accumulated other comprehensive income

—

45,948

3,913

49,861

—

49,861

Net income (loss)

—

574,864

37,053

611,917

(285
)

611,632

Distributions to common unitholders

—

(210,361
)

(13,408
)

(223,769
)

—

(223,769
)
Distributions to noncontrolling interests

—

—

—

—

(13,561
)

(13,561
)
Other, net

(129
)

(1,042
)

(243
)

(1,414
)

72

(1,342
)
Balances at September 30, 2022

$
2,000

$
2,041,180

$
225,062

$
2,268,242

$
(76,200
)

$
2,192,042

~~Under our unsecured notes~~ payable, ~~and revolving credit facility,~~ we have agreed to maintain certain financial covenants, as well as other covenants customary for similar credit arrangements. The financial covenants we are required to maintain include a ~~Maximum Leverage~~maximum leverage ratio of no greater than 0.60 to ~~1.00~~;1.00; a ~~Fixed Charge Coverage Ratio~~fixed charge coverage ratio of ~~greater~~no less than ~~1.5~~x,1.50 to 1.00, a ~~Maximum Secured Indebtedness~~maximum secured indebtedness to ~~Total Assets~~total assets ratio of no greater than ~~0.45~~0.40 to 1.00, ~~through March 31, 2023, and~~ ~~0.40~~ to ~~1.00~~ ~~thereafter,~~ a ~~Maximum Unsecured Leverage~~maximum unsecured leverage ratio no greater than 0.60 to 1.00,, and a ~~Minimum Unsecured Interest Coverage Ratio~~minimum unsecured interest coverage ratio no less than 1.50 to ~~1.00~~.1.00.

(1)

~~The following table summarizes fair value for our~~During the second quarter of 2023, the interest rate swap option asset and ~~swaps (in thousands):~~offsetting liability associated with the Parkmerced mezzanine investment was settled, resulting in equal decreases in other assets, net and accrued liabilities and other in the condensed consolidated balance sheets.

As of September 30, 2022

As of December 31, 2021

Total Fair Value

Level 1

Level 2

Level 3

Total Fair Value

Level 1

Level 2

Level 3

Interest rate option

$
53,989

$
—

$
53,989

$
—

$
21,699

$
—

$
21,699

$
—

Interest rate swap asset

$
34,543

$
—

$
34,543

$
—

$
—

$
—

$
—

$
—

Financial Assets and Liabilities Not Measured at Fair Value

We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximated their estimated fair value as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, due to their relatively short-term nature and high probability of realization. The carrying value of our ~~unsecured notes payable,~~ revolving credit facility and term loans, which we classify as Level 2 in the GAAP fair value hierarchy, approximated their estimated fair value as of September 30, ~~2022~~2023 and December 31, ~~2021.~~

2022, as they bear interest at floating rates which approximate market rates.

We classify the fair value of our non-recourse property debt, unsecured notes payable, seller financing notes receivable, and preferred equity investment within Level 2 of the GAAP fair value ~~hierarchy.~~ hierarchy, as summarized in the following table (in thousands):


	As of September 30, 2023				As of December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-recourse property debt	$	2,244,776	$	1,938,885	$	1,994,651	$	1,753,222
Unsecured notes payable	$	400,000	$	363,609	$	400,000	$	371,368
Seller financing note receivable, net (1)	$	32,246	$	30,723	$	31,611	$	32,286
Preferred equity investment (2)	$	22,398	$	22,486	$	—	$	—

(1)During the year ended December 31, 2022, we provided $40.0 million of seller financing as partial consideration for the sale of our New England portfolio. The contractual interest rate on the note is 4.5%. The difference between the stated rate and the market interest rate as of

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the date of sale resulted in a discount recorded of $8.5 million. The seller financing note and related discount are included in other assets, net in our condensed consolidated balance sheets.

(2)In conjunction with the Value-Add JV transaction, AIR received a preferred equity investment within the joint venture. The contractual interest rate on the preferred equity investment is 7.25%. The difference between the stated rate and the effective interest rate as of the date of the transaction resulted in a discount recorded of $5.9 million. The preferred equity investment and related discount are included in investment in unconsolidated real estate partnerships in our condensed consolidated balance sheets.

Note 10 — Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivatives

Our objectives in using interest rate derivatives are to add predictability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps and treasury locks as part of our interest rate management strategy. Interest rate swaps primarily involve the receipt of variable-rate and fixed-rate amounts from a counterparty in exchange for us making fixed-rate or variable-rate payments over the life of the agreements without exchange of the underlying notional amounts.

Changes in fair value of derivatives designated as cash flow hedges are recognized in accumulated other comprehensive income and subsequently reclassified into earnings as an increase or decrease to interest expense. During the three and nine months ended September 30, 2023, we reclassified gains of $14.2 million and $23.7 million out of accumulated other comprehensive income into interest expense, respectively, inclusive of the Company's acceleration of the reclassification of amounts in accumulated other comprehensive income given that certain hedged forecasted transactions are not expected to occur. During the third quarter of 2023, the Company accelerated a gain of $11.5 million into earnings due to the early payoff of the hedged term loans previously designated. During the three and nine months ended September 30, 2022, we reclassified losses of $0.7 million and $2.7 million out of accumulated other comprehensive income, net into interest expense, respectively. As of September 30, 2023, we estimate that during the next 12 months, we will reclassify into earnings approximately $7.4 million of the unrealized gain in accumulated other comprehensive income.

Changes in fair value of derivatives not designated in a hedge relationship, or economic hedges, are recognized in gain on derivative instruments, net, in our condensed consolidated statements of operations once realized. During the three and nine months ended September 30, 2023, we recorded gains of $14.1 million and $23.3 million, respectively. During the three and nine months ended September 30, 2022, no amounts were recognized related to derivatives not designated in a hedge relationship.

During the second quarter of 2023, we de-designated $830 million of notional value pay-fixed, receive-floating interest rate swaps. As a result, the accumulated unrealized gains at time of de-designation of $29.5 million was expected to be reclassified into earnings over the remaining term of the forecasted transactions. During the three months ended September 30, 2023, $2.6 million of this balance was reclassified out of accumulated other comprehensive income into interest expense, and $11.5 million was accelerated into gain on derivative instruments, net, as described above. The remaining balance of $15.4 million is included within accumulated other comprehensive income as of September 30, 2023 and will be reclassified into earnings over the remaining term of the forecasted transaction.

During the three months ended September 30, 2023, we terminated six interest rate swap positions not designated as hedging instruments. Three of the terminated instruments were pay-floating, receive-fixed interest rate swaps with a notional value of $230 million, and three were offsetting pay-fixed, receive-floating interest rate swaps with a notional value of $230 million. Upon termination, AIR received $11.1 million in cash.

As of September 30, 2023, AIR had a notional value of $600 million of pay-fixed, receive-floating interest rate swaps that are not designated as hedging instruments, and a notional value of $50 million of forward starting interest rate swaps that are not designated as hedging instruments. These derivative instruments are partially offset by a notional value of $250 million of pay-floating, receive-fixed interest rate swaps that are not designated as hedging instruments. Accordingly, the changes in the fair value of these derivatives are recognized in gain on derivative instruments, net, in our condensed consolidated statements of operations. As a result of the $250 million of pay-floating, receive-fixed interest rate swaps that are not designated as hedging instruments, we expect to receive monthly fixed interest income representing the spread between the offsetting pay-fixed and receive-fixed legs of our interest rate swap positions over a weighted-average term of 2.6 years.

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Subsequent to September 30, 2023, AIR entered into a notional value $125 million pay-fixed, receive-floating interest rate swap, which economically hedges the remaining $125 million of variable-rate term loans, which results in the $475 million in term loans having an effective interest rate of 4.3%.

The following table summarizes ~~carrying value and fair value of~~ our ~~non-recourse property debt, excluding debt issuance costs (in~~derivative financial instruments (dollars in thousands):

As of September 30, 2022

As of December 31, 2021

Carrying Value

Fair Value

Carrying Value

Fair Value

Non-recourse property debt

$
2,028,658

$
1,785,851

$
2,305,756

$
2,367,713


	As of September 30, 2023
	Number of	Aggregate Notional		Derivative Assets (included in Other Assets, net)		Derivative Liabilities (included in Accrued Liabilities and Other)
	Instruments	Amount		Fair Value


Derivatives not designated as hedging instruments:
Interest rate swap, floating to fixed	7	$	600,000	$	29,898	$	—
Interest rate swap, fixed to floating	3	$	250,000	$	—	$	(3,035)
Interest rate swap, forward starting	1	$	50,000	$	3,333	$	—


	As of December 31, 2022
	Number of	Aggregate Notional		Derivative Assets (included in Other Assets, net)		Derivative Liabilities (included in Accrued Liabilities and Other)
	Instruments	Amount		Fair Value
Derivatives designated as hedging instruments:
Treasury rate locks	1	$	100,000	$	319	$	—
Interest rate swaps, floating to fixed	10	$	830,000	$	32,222	$	—

Note 911 — Variable Interest Entities

Consolidated Entities

AIR consolidates the AIR Operating Partnership, a VIE of which AIR is the primary beneficiary. AIR, through the AIR Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Substantially all of the assets and liabilities of AIR are ~~that~~those of the AIR Operating Partnership.

The AIR Operating Partnership consolidates (i) ~~five~~three VIEs that own interests in one or more apartment communities and are typically structured to generate a return for their partners through the operation and ultimate sale of the communities and (ii) one VIE related to a lessor entity that owns an interest in a property leased to a third party. The AIR Operating Partnership is the primary beneficiary in the limited partnerships in which it is the sole decision maker and has a substantial economic interest.

~~Table of Contents~~

The table below summarizes apartment community information regarding VIEs consolidated by the AIR Operating Partnership:


	September 30, 2023 (1)	December 31, 2022
VIEs with interests in apartment communities	3	5
Apartment communities owned by VIEs	14	16
Apartment homes in communities owned by VIEs	4,866	5,369

(1)

September 30, 2022

December 31, 2021

VIEs with interests in apartment communities

5

5

Apartment communities owned by VIEs

16

16

Apartment homes in communities owned by VIEs

5,369

5,369

During the nine months ended September 30, 2023, the number of our VIEs with interests in apartment communities decreased due to our Core JV partner's acquisition of an indirect 47% interest through the Core JV in one consolidated limited partnership with 175 apartment homes, and our purchase of the remaining non-controlling interest in a consolidated limited partnership with 328 apartment homes, which was subsequently contributed to the Core JV during the third quarter.

Assets of the AIR Operating Partnership’s consolidated VIEs must first be used to settle the liabilities of such consolidated VIEs. These consolidated VIEs’ creditors do not have recourse to the general credit of the AIR Operating

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Partnership. Assets and liabilities of VIEs, excluding those of the AIR Operating Partnership, are summarized in the table below (in thousands):

September 30, 2022

December 31, 2021

ASSETS:

Net real estate

$
1,075,327

$
1,096,039

Cash and cash equivalents

51,199

29,863

Restricted cash

2,329

2,380

Other assets, net

21,873

21,745

LIABILITIES:

Non-recourse property debt

$
1,215,933

$
1,227,345

Accrued liabilities and other

40,814

34,659


	September 30, 2023		December 31, 2022
ASSETS:
Net real estate	$	1,024,555	$	1,066,482
Cash and cash equivalents	$	42,133	$	54,319
Restricted cash	$	1,970	$	2,378
Other assets, net	$	21,216	$	20,944
LIABILITIES:
Non-recourse property debt, net	$	1,200,279	$	1,212,065
Accrued liabilities and other	$	40,007	$	35,365

Unconsolidated Entities

~~During 2021, we formed a joint venture with an affiliate of Blackstone by selling an~~ 80~~% interest in three multi-family properties with~~ ~~1,748~~ ~~units located in Virginia. Our~~ 20% interest in the venture meets the definition of a VIE, however, we are not the primary beneficiary and do not consolidate these communities. As of September 30, 2022 and December 31, 2021, the carrying value of the investment of $~~21.3~~ ~~million and $26.0~~ million, respectively, is included in other assets, net, in our condensed consolidated balance sheets. AIR’s exposure to the obligations of the VIE is limited to the carrying value of the limited partnership interests and 20~~% of Blackstone's guarantor liabilities, which were $79.0~~ ~~million as of September 30, 2022.~~

We have an interest in a partnership that owns Parkmerced Apartments, which meets the definition of a VIE. However, we are not the primary beneficiary and do not consolidate this partnership. As of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, the investment balance of $~~362.8~~$158.3 million and $~~337.8~~$158.7 million, respectively, is included in other assets, net, in our condensed consolidated balance sheets. Subsequent to the ~~Separation,~~December 2020 separation, all risks and rewards of ownership are ~~Aimco’s,~~retained by the third party; however, as legal transfer has not occurred, there is an equal and offsetting liability included in accrued liabilities and other in our condensed consolidated balance sheets. Accordingly, there is no net effect on AIR’s stockholders’ equity or the AIR Operating ~~Partnership's partners'~~Partnership’s partners’ capital.

Please see Note 106 for further discussion regarding our unconsolidated joint ventures.

Note 12 — Business Segments

We have two segments: Same Store and Other Real Estate. Our Same Store segment includes communities that are owned and managed by AIR and ~~had~~have reached a stabilized level of operations. Our Other Real Estate segment includes ~~five~~ ~~properties acquired in 2021,~~ four properties acquired in 2022, four properties previously leased to Aimco, and ~~three communities we expect to sell or lease to a third party, but do not yet meet the criteria to be classified as held for sale~~

four properties acquired in 2023.

Our chief operating decision maker (“CODM”) uses proportionate property net operating income (“NOI”) to assess the operating performance of our communities. Proportionate property NOI reflects our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements. In our condensed consolidated statements of operations, utility reimbursements are included in rental and other property revenues in accordance with GAAP.

As of September 30, ~~2022,~~2023, our Same Store segment included 5863 apartment communities with ~~20,730~~22,794 apartment homes and our Other Real Estate segment included 1612 apartment communities with ~~4,556~~3,829 apartment homes. ~~As of September 30, 2022, we had~~ ~~six~~ ~~apartment communities with~~ ~~1,314~~ ~~homes that were classified as held for sale.~~

The following tables present the total revenues, property operating expenses, proportionate property net operating income (loss), and income (loss) before income tax ~~(expense) benefit~~expense of our segments on a proportionate ~~basis.~~ basis, excluding amounts related to communities sold. To reflect how the CODM evaluates the

~~Table of Contents~~

business, prior period segment information has been recast to conform with our reportable segment composition as of September 30, ~~2022~~2023 (in thousands):


	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)		Consolidated
Three months ended September 30, 2023:
Total revenues	$	151,619	$	29,543	$	11,981	$	4,164	$	197,307
Property operating expenses	40,353		8,158		9,076		489		58,076
Other operating expenses not allocated to segments (3)	—		—		—		100,695		100,695
Total operating expenses	40,353		8,158		9,076		101,184		158,771
Proportionate property net operating income (loss)	111,266		21,385		2,905		(97,020)		38,536
Other items included in income before income tax expense (4)	—		—		—		676,571		676,571
Income before income tax expense	$	111,266	$	21,385	$	2,905	$	579,551	$	715,107

Same
Store

Other
Real Estate

Proportionate
and Other
Adjustments (1)

Corporate and
Amounts Not
Allocated to
Segments (2)

Consolidated

Three months ended September 30, 2022:

Total revenues
$
139,107

$
30,258

$
20,725

$
10,781

$
200,871

Property operating expenses

35,632

10,606

10,562

14,450

71,250

Other operating expenses not allocated to segments (3)

—

—

—

103,049

103,049

Total operating expenses

35,632

10,606

10,562

117,499

174,299

Proportionate property net operating income (loss)

103,475

19,652

10,163

(106,718
)

26,572

Other items included in income before income tax expense (4)

—

—

—

(23,130
)

(23,130
)
Income (loss) before income tax expense
$
103,475

$
19,652

$
10,163

$
(129,848
)

$
3,442

Table of Contents

Same
Store

Other
Real Estate

Proportionate
and Other
Adjustments (1)

Corporate and
Amounts Not
Allocated to
Segments (2)

Consolidated

Nine months ended September 30, 2022:

Total revenues
$
402,756

$
62,371

$
60,153

$
40,569

$
565,849

Property operating expenses

105,570

23,486

30,064

39,153

198,273

Other operating expenses not allocated to segments (3)

—

—

—

279,126

279,126

Total operating expenses

105,570

23,486

30,064

318,279

477,399

Proportionate property net operating income (loss)

297,186

38,885

30,089

(277,710
)

88,450

Other items included in income before income tax
expense (4)

—

—

—

528,955

528,955

Income before income tax expense
$
297,186

$
38,885

$
30,089

$
251,245

$
617,405

Same
Store

Other
Real Estate

Proportionate
and Other
Adjustments (1)

Corporate and
Amounts Not
Allocated to
Segments (2)

Consolidated

Three months ended September 30, 2021:

Total revenues
$
134,102

$
5,558

$
20,608

$
31,509

$
191,777

Property operating expenses

36,883

2,963

10,604

23,475

73,925

Other operating expenses not allocated to segments (3)

—

—

—

90,812

90,812

Total operating expenses

36,883

2,963

10,604

114,287

164,737

Proportionate property net operating income (loss)

97,219

2,595

10,004

(82,778
)

27,040

Other items included in income (loss) before income tax benefit (4)

—

—

—

(16,644
)

(16,644
)
Income (loss) before income tax benefit
$
97,219

$
2,595

$
10,004

$
(99,422
)

$
10,396

Same
Store

Other
Real Estate

Proportionate
and Other
Adjustments (1)

Corporate and
Amounts Not
Allocated to
Segments (2)

Consolidated

Nine months ended September 30, 2021:

Total revenues
$
386,998

$
8,562

$
58,904

$
92,059

$
546,523

Property operating expenses

109,299

5,351

30,091

58,559

203,300

Other operating expenses not allocated to segments (3)

—

—

—

256,909

256,909

Total operating expenses

109,299

5,351

30,091

315,468

460,209

Proportionate property net operating income (loss)

277,699

3,211

28,813

(223,409
)

86,314

Other items included in income (loss) before income tax expense (4)

—

—

—

(5,445
)

(5,445
)
Income (loss) before income tax expense
$
277,699

$
3,211

$
28,813

$
(228,854
)

$
80,869


	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)		Consolidated
Nine months ended September 30, 2023:
Total revenues	$	445,881	$	86,104	$	80,124	$	11,568	$	623,677
Property operating expenses	117,014		28,010		37,850		7,248		190,122
Other operating expenses not allocated to segments (3)	—		—		—		320,567		320,567
Total operating expenses	117,014		28,010		37,850		327,815		510,689
Proportionate property net operating income (loss)	328,867		58,094		42,274		(316,247)		112,988
Other items included in income before income tax expense (4)	—		—		—		594,085		594,085
Income before income tax expense	$	328,867	$	58,094	$	42,274	$	277,838	$	707,073


	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)		Consolidated
Three months ended September 30, 2022:
Total revenues	$	142,009	$	14,025	$	32,402	$	12,435	$	200,871
Property operating expenses	37,349		4,783		13,468		8,409		64,009
Other operating expenses not allocated to segments (3)	—		—		—		110,290		110,290
Total operating expenses	37,349		4,783		13,468		118,699		174,299
Proportionate property net operating income (loss)	104,660		9,242		18,934		(106,264)		26,572
Other items included in income before income tax expense (4)	—		—		—		(23,130)		(23,130)
Income (loss) before income tax expense	$	104,660	$	9,242	$	18,934	$	(129,394)	$	3,442


	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)		Consolidated
Nine months ended September 30, 2022:
Total revenues	$	411,052	$	16,437	$	93,187	$	45,173	$	565,849
Property operating expenses	111,316		5,799		38,559		21,005		176,679
Other operating expenses not allocated to segments (3)	—		—		—		300,720		300,720
Total operating expenses	111,316		5,799		38,559		321,725		477,399
Proportionate property net operating income (loss)	299,736		10,638		54,628		(276,552)		88,450
Other items included in income before income tax expense (4)	—		—		—		528,955		528,955
Income from before income tax expense	$	299,736	$	10,638	$	54,628	$	252,403	$	617,405

(1)

Represents adjustments ~~for third-party~~to: (i) include AIR’s proportionate share of the results of unconsolidated apartment communities, which is excluded in the related consolidated amounts, and (ii) exclude the noncontrolling interests in consolidated real estate partnerships’ proportionate share of the results of communities, ~~in our segments,~~ which ~~are~~is included in the related consolidated ~~amounts but excluded from proportionate property NOI for our segment evaluation.~~amounts. 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. ~~Effective in 2022, corporate and amounts not allocated to segments includes the depreciation of capitalized costs of non-real estate assets.~~

(2)

~~Includes~~Includes: (i) the operating results of apartment communities sold during the periods shown or held for sale at the end of the period, if ~~any. Also includes~~any, (ii) property management revenues, which are not part of our segment performance measure, ~~and~~ property management expenses and casualty gains and losses, which are included in consolidated property operating expenses and are not part of our segment performance ~~measure.~~

measure, and (iii) the depreciation of capitalized costs of non-real estate assets.

(3)

Includes depreciation and amortization, general and administrative expenses, and other expenses, net, and may also include ~~provision for real estate impairment loss and~~ write-offs of deferred leasing commissions, which are not included in our measure of segment performance.

~~Table of Contents~~

(4)

Includes interest income, interest expense, loss on extinguishment of debt, gain on dispositions of real estate, provision for impairment loss, and ~~derecognition of leased properties, interest income, interest expense,~~ loss from unconsolidated real estate ~~partnerships, and loss on extinguishment~~partnerships.

Table of ~~debt.~~

Contents

The assets of our segments and the consolidated assets not allocated to our segments were as follows (in thousands):

September 30, 2022

December 31, 2021

Same Store

$
3,861,337

$
3,824,277

Other Real Estate

2,077,214

787,534

Corporate and other assets (1)

783,902

1,828,549

Total consolidated assets

$
6,722,453

$
6,440,360


	September 30, 2023		December 31, 2022
Same Store	$	4,119,544	$	4,610,356
Other Real Estate	1,575,415		1,211,136
Corporate and other assets (1)	704,290		730,391
Total consolidated assets	$	6,399,249	$	6,551,883

(1)

Includes the assets not allocated to our segments including: (i) corporate assets; (ii) the mezzanine loan investment where the rights and obligations of ownership have been assigned to Aimco; and (iii) properties sold ~~properties,~~ or ~~properties~~ classified as held for sale as of September 30, 2022. Corporate and other assets as of December 31, 2021, also includes the note receivable from Aimco, which was repaid in 2022, and the lease receivable related to properties leased to Aimco, which was canceled during the third quarter of 2022.sale.

For the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, capital additions related to our segments were as follows (in thousands):


	2023		2022
Same Store	$	114,844	$	109,768
Other Real Estate	13,530		1,422
Total capital additions	$	128,374	$	111,190

2022

2021

Same Store

$
114,679

$
97,294

Other Real Estate

30,459

13,588

Total capital additions

$
145,138

$
110,882

29

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. This Quarterly Report on Form 10-Q contains information that is forward-looking within the meaning of the federal securities laws, including, without limitation, statements regarding: the payment of dividends and distributions in the future; ~~the impact of the COVID-19 pandemic, including~~ our ability to maintain current or meet projected occupancy, rental rate and property operating results; expectations regarding consumer demand, growth in revenue and strength of other performance metrics and models; the effect of acquisitions and dispositions; expectations regarding acquisitions as well as sales and the formation of joint ventures and the use of proceeds thereof; the availability and cost of corporate debt; our ability to comply with debt covenants; and risks related to the provision of property management services to ~~Aimco~~third parties and our ability to collect property management and asset management related fees.

These forward-looking statements are based on management’s current expectations, estimates and assumptions and subject to risks and uncertainties, that could cause actual results to differ materially from such forward-looking statements, including, but not limited to: real estate and operating risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including inflation, the pace of job growth, ~~and~~ the level of ~~unemployment; the effects of the COVID-19 pandemic on AIR’s business~~unemployment, and on the global and U.S. economies generally, and the ongoing, dynamic and uncertain nature and duration of the pandemic, all of which heightens the impact of the other risks and factors described herein;recession; the amount, location, and quality of competitive new housing supply, which may be impacted by global supply chain disruptions; the timing and effects of acquisitions and dispositions; changes in operating costs, including energy costs; negative economic conditions in our geographies of operation; loss of key personnel; AIR’s ability to maintain current or meet projected occupancy, rental rate and property operating results; expectations regarding sales of apartment communities and the use of proceeds thereof; insurance risks, including the cost of insurance, and natural disasters and severe weather such as hurricanes; financing risks, including interest rate changes and the availability and cost of financing; the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; the risk that earnings may not be sufficient to maintain compliance with debt covenants, including financial coverage ratios; legal and regulatory risks, including costs associated with prosecuting or defending claims and any adverse outcomes; the terms of laws and governmental regulations that affect us and interpretations of those laws and regulations; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of apartment communities presently or previously owned by AIR. Other risks and uncertainties are described in this Quarterly Report on Form 10-Q, as well as the section entitled “Risk Factors” in Item 1A of AIR’s and AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, and subsequent filings with the SEC.

In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and depends on our ability to meet the various requirements imposed by the Code, through actual operating results, distribution levels and diversity of stock ownership.

These forward-looking statements reflect management’s judgment as of this date, and we assume no obligation to revise or update them to reflect future events or circumstances.

Certain financial and operating measures found herein and used by management are not defined under GAAP. These measures are defined and reconciled to the most directly comparable GAAP measures under the Non-GAAP Measures heading and include: NAREIT Funds from Operations, Pro forma Funds from Operations, Run-Rate Funds from Operations, Run-Rate Adjusted Funds from Operations, and the measures used to compute our leverage ratios.

~~Table of Contents~~

Executive Overview

We created AIR to be the most efficient and effective way to invest in U.S. multi-family real estate, due to our simplified business model, diversified portfolio of stabilized apartment communities, and low leverage. The Board of Directors has set the following strategic objectives:

•

Pursue a simple, efficient, and predictable business model with a low-risk premium.

•

Maintain a high quality and diversified portfolio of stabilized multi-family properties.

•

~~Improve~~Continuously improve our best-in-class property operations platform, the “AIR Edge,” to generate above-market organic growth.

•

Maintain an efficient cost structure ~~with~~to keep net general and administrative expenses less than or equal to ~~15 basis~~15-basis points of gross asset value.

•

Maintain a flexible, low levered balance sheet with access to public debt markets.

•

Enhance portfolio quality through a disciplined approach to capital allocation, targeting accretive opportunities on a leverage neutral basis.

Table of Contents

•

~~Develop~~Form private capital partnerships as a source of equity capital for accretive growth.

•

Continue our commitment to corporate responsibility with transparent and measurable goals.

We own and operate a portfolio of stabilized apartment communities, diversified by both geography and price ~~point.~~point, in 10 states and the District of Columbia. As of September 30, ~~2022,~~2023, our portfolio included 8075 apartment communities with ~~26,600~~26,623 apartment homes, in which we held an average ownership of approximately ~~88%~~81%.

We also have one land parcel and one indirect land interest that we lease to third parties.

Our business is organized around four areas of strategic focus: operational excellence; portfolio management; balance sheet; and team and culture. The results from the execution of our ~~business plan~~strategy are further described in the sections that follow.

Operational Excellence

~~Same Store highlights for~~

In the third quarter of ~~2022 include:~~

2023, Pro forma FFO increased 10.3% year-over-year as a result of same store revenue growth of 6.8% which drove higher net operating income of 6.3%, primarily driven by an increase of 5.6% in residential rents.

Portfolio Performance

Approximately 20% of AIR’s capital is invested in acquisitions made since 2021. Acquisition properties experience a rate of NOI growth during the first few years of AIR management that is much higher than the same store portfolio rate. Two-thirds of these investments were made prior to July 2022; therefore, comparative information is available. These properties' year-over-year NOI growth was up 17.4%, increasing year-over-year NOI growth rate of the total Acquisition and Same Store portfolios by 170 basis points to 7.2%.

Third Quarter 2023 Paired Trades

As previously announced, AIR contributed 10 properties to the Core JV, retaining a 53% interest. In exchange for the 47% interest sold, AIR received $505 million of gross consideration. AIR also completed its strategic exit from New York City through the sale of a property for $21 million in gross proceeds.

In turn, AIR improved its portfolio through reinvesting $287 million in three new properties. In comparison to the property interests sold, the acquired properties:

•have 11% higher average rents at $2,751 per month;

~~Revenue increased~~•were constructed in the last two years (in contrast to 26 years for the interests sold); and

•require annual capital replacement spending that is $2,600 per unit lower than the interests sold.

AIR used the remaining proceeds to:

•repurchase 2.2 million shares for $77.8 million (reflecting an average price of $34.57 per share, and a forward NOI yield of approximately 6.3%).

•reduce leverage, with an average interest cost of 6.1%, by ~~9.6%~~approximately $161 million.

Balance Sheet and ~~NOI increased by 13.3%, compared to~~Liquidity

During the third quarter of ~~2021;~~2023, AIR refinanced $154 million of borrowings on AIR's revolving credit facility and $325 million of term loans maturing in 2023 and 2024, with new fixed rate property debt. The new debt has a weighted-average life of 5.3 years and a weighted-average interest rate of 5.2%; 30-basis points greater than the short-term debt repaid.

Today, AIR has:

•

~~NOI margins were 74.3%, an all-time high for the third quarter and up 240 basis points compared~~Near-term exposure to ~~2021; and~~

rising interest rates limited to:

•

~~For transacted leases becoming effective during the quarter, new lease rents increased by 17.1% and renewal rents increased by 11.1%, for a weighted-average increase of 14.0%;~~

~~Same Store Markets~~▪

Consumer demand remained strong through the quarter, with signed new lease rates up 17.0% from the prior leases and renewals up 11.8%, resulting in a weighted-average increase of 14.5%. We saw a sequential decline in ADO of 90 basis points to 95.9%, reflecting the frictional vacancy consistent with the higher move out volume that is typical during the summer leasing season. Year-to-date ADO of 96.9% was 120 bps higher than in the prior year. We anticipate continued occupancy gains throughout the fourth quarter.

~~Acquisition Portfolio~~

The acquisition portfolio is currently comprised of five properties acquired in 2021, four acquired in 2022, and represents 14% of AIR GAV. At those properties acquired in 2021, leasing continues to exceed expectations. Signed new lease rates were up 25.1% in the third quarter, with renewals up 23.2%, resulting in a weighted-average increase of 24.1%. Fourth quarter revenue growth for the 2021 acquisitions, the first reporting period with a year-over-year comparison, is anticipated to be 50% above the Same Store portfolio. At properties we acquired in 2022, performance is consistent with our expectations, and rental rate achievement is ahead of our initial projections. We will provide year-over-year comparable data as it becomes available.

~~Portfolio Management~~

Our portfolio of apartment communities is diversified across primarily “A” and “B” price points, averaging “B/B+” in quality, and also across eight core markets in the United States. In the past two years, AIR has recycled approximately $5.4 billion, or 40%, of its gross asset value as part of and since the Separation, property sales, and joint ventures, all during a period of attractive pricing for

~~Table of Contents~~

~~multi-family properties, using the proceeds to simplify its business, reduce leverage, and improve the quality and expected profitability of its real estate portfolio.~~

We have improved AIR's portfolio through reducing our allocation to New York City and Chicago markets with regulatory risk, and reallocating capital into higher growth submarkets, such as Miami-Dade and Broward counties, now 19% of AIR GAV, in markets with limited REIT competition.

Aimco

AIR

Q4 2019 or 2019A

Q3 2022

Change
Residents

Average Household Income

$165,000

$251,000

52%
Median Household Income

$116,000

$170,000

47%
CSAT Score (out of 5)

4.30

4.33 (2021)

0.03
Kingsley Index (1)

4.09

4.05

(0.04)
Portfolio

Properties

124

80

(35%)
Apartment Homes

32,598

23,499

(28%)
Average Revenue per Apartment Home

$2,272

$2,711

19%
Redevelopment and Development ($M)

$230

$–

($230)
Mezzanine Investments ($M)

$280

$–

($280)
Low G&A

Net G&A as % of GAV

36 bps (per GSA)

<15 bps (at AIR Target)

-21 bps
Balance Sheet

Net Leverage / EBITDAre

7.6x

5.9x

(1.7x)
Refunding: Next 3-Years (% Total Debt)

23%

10%

(13%)
Repricing: Next 3-Years (% Total Debt)

23%

10%

(13%)
Unencumbered Properties ($B)

$2.4

$8.3

$5.9

~~(1)~~

~~AIR named Kingsley Elite Five in 2022, #2 among all operators and #1 for public REITs~~

~~We measure the quality of apartment communities in our portfolio based~~$79 million 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.

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.

AIR uses “paired trades” to fund acquisitions, basing our cost of capital on the anticipated unlevered internal rates of return (“IRR”) of the communities or joint venture interests sold. We require a "spread" or accretion of an unlevered IRR at least 200 basis points higher on the communities purchased. This excess return is driven in part by what we call the AIR Edge, the cumulative result of our focus on resident selection, satisfaction, and retention, as well as relentless innovation in delivering best-in-class property management. We seek to sell communities with lower expected free cash flow (“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 stabilized 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.

In the past two years, we have acquired $1.4 billion, or 14% of GAV, of properties new to the AIR operating platform. New purchases will increase to 17% of GAV with the anticipated acquisition in early next year of Southgate Towers in Miami Beach. (Please see below for further information regarding this acquisition.)

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We estimate real estate values declined by approximately 10% during 2022, the result of approximately 85 basis points of NOI cap rate expansion, about half offset by strong NOI growth. As a paired trade investor, AIR is agnostic as to market changes insofar as it buys and sells properties in the same market conditions, and is focused on gaining an accretive “spread”. As market conditions change, AIR adjusts its target returns and spreads to reflect its new cost of capital. Our “paired trade” approach is intended to ensure that new acquisitions are accretive to earnings in the near-term, and will generate attractive spreads to IRRs in the long-term.

~~Transactions~~

~~Acquisitions~~

As previously announced, we acquired The District at Flagler Village in Fort Lauderdale, FL for $173 million in the third quarter. The property has 350 apartment homes and was newly constructed in 2021. It sits in the affluent and growing Flagler Village neighborhood with access to the Brightline train station. Year-to-date, we have acquired $640 million of properties new to the AIR platform.

Additionally, and as previously announced, we canceled existing master leases at four properties owned by AIR and previously leased to Aimco for purpose of their development. As part of the cancellation, AIR paid $200 million to Aimco for the added improvements. The four properties include 865 apartment homes with average revenue per apartment home of $3,669 and are located in the South Beach neighborhood of Miami Beach, FL, Kendall Square in Cambridge, MA, the Anschutz Medical Campus in Aurora, CO, and Redwood City, CA.

~~In aggregate, we expect a NOI yield in 2023 of mid 4%s and a long-term unlevered IRR of approximately 9%.~~

During the quarter, we also went under contract with a non-refundable deposit to acquire Southgate Towers, located in the South Beach neighborhood of Miami Beach with 495 apartment homes for $298 million. The acquisition is expected to close in early January 2023. We expect unlevered IRRs greater than 10% and at a spread of more than 200 basis points to the properties sold to fund its acquisition.

~~Dispositions~~

We had no dispositions in the third quarter. We anticipate selling six properties located in the New England area in November for a gross sales price of approximately $500 million, representing a trailing twelve-month NOI cap rate of 4.4%. These have been classified as held for sale as of September 30, 2022.

~~Capital Allocation – Share Repurchases~~

During the three months ended September 30, 2022, AIR repurchased 1.2 million shares for $47 million, at an average price of $39.07 per share. Subsequent to quarter end and through November 2, 2022 we have purchased an additional 3.1 million shares for $115 million. In aggregate, we have repurchased 7.2 million shares during 2022 at an average price of $39.96. We are authorized by the AIR Board of Directors to repurchase an additional $213 million of shares. We consider share buybacks as part of a balanced investment program.

~~Balance Sheet~~

We seek to increase financial returns by using leverage with appropriate caution. We limit risk through our balance sheet structure, employing low leverage and primarily long-dated debt. We target a Net Leverage to EBITDAre ratio between 5.0x and 6.0x and anticipate the actual ratio will vary based on the timing of transactions. We maintain financial flexibility through ample unused and available credit, holding properties with substantial value unencumbered by property debt, maintaining an investment grade rating, and using partners’ capital when it enhances financial returns or reduces investment risk. We seek to minimize refunding and repricing risk.

~~Components of Leverage~~

~~Our leverage includes~~ our share of ~~long-term, non-recourse property~~the Virginia JV debt ~~encumbering our apartment communities, together with outstanding borrowings under~~due to the maturity in January 2024 of the in-place interest rate cap; plus

▪$26 million on our revolving credit facility ~~our term~~

•No debt maturities until the second quarter of 2025;

•Available liquidity of $2.1 billion;

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•$5.3 billion of properties unencumbered by non-recourse debt; and

•Limited refunding risk with the ability to fund all maturities through 2027 from cash on hand, and a 10-year commitment to make $1 billion of property loans ~~unsecured notes payable, and preferred equity.~~with up to 10-year maturities.

At year-end, AIR anticipates Net Leverage to Adjusted EBITDAre to be below 6.0x; consistent with its target range of 5.0x to 6.0x. As of September 30, ~~2022, about $170 million~~2023, AIR's leverage is temporarily elevated due to the timing of AIR’s debt matures before 2025 and it is expected to be refunded before year end with $55 million at 4.9%, $14 million repaid and the remainder at a fixed rate to be determined. Once completed, AIR will have no debt maturing before the secondthird quarter ~~of 2025.~~

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~~AIR anticipates using the net proceeds from the November property sales discussed above to reduce borrowings on its revolving credit facility.~~

Pro forma the completion of these refinancing activities, and exclusive of any remaining borrowings under its revolving credit facility, AIR’s floating rate debt exposure is anticipated to be $79 million. This debt is subject to an interest rate cap at an effective rate of 5.35%.

Please see the Liquidity and Capital Resources section for additional information regarding our leverage and the Leverage Ratios subsection of the Non-GAAP Measures section for further information about the calculation of our leverage ratios.

~~Liquidity~~

We use our revolving credit facility for working capital, other short-term purposes, and to secure letters of credit. As of September 30, 2022, our share of cash and restricted cash, excluding amounts related to tenant security deposits, was $99.6 million and we had the capacity to borrow up to $509.9 million under our revolving credit facility, bringing total liquidity to $609.5 million. Liquidity is expected to increase by approximately $460 million with the closing of the November property sales.

We manage our financial flexibility by maintaining an investment grade rating from S&P and holding communities that are unencumbered by property debt. As of September 30, 2022, we held unencumbered apartment communities with an estimated fair market value of approximately $8.3 billion, almost triple the amount from December 31, 2020.

~~As previously announced, AIR is seeking an investment-grade Issuer Credit Rating from Moody’s and we anticipate receiving our rating during the fourth quarter.~~

acquisitions.

Dividend and Equity Capital Markets

On ~~November 1, 2022, our~~October 30, 2023, the AIR Board of Directors declared a quarterly cash dividend of $0.45 per share of Common ~~Stock. This amount is~~Stock, payable on November 30, ~~2022,~~2023 to ~~stockholders~~shareholders of record on November ~~18, 2022. On an annualized basis, the dividend represents $1.80 per share, reflecting a dividend yield of approximately 4.7% based on AIR's closing share price on Tuesday, November 1, 2022.~~17, 2023. In setting ~~AIR's 2022~~the 2023 dividend ~~our~~rate, the Board of Directors targeted a ~~dividend level~~75% payout ratio of Pro forma FFO, in 2023 equivalent to approximately ~~75%~~86% of ~~full year FFO per share.~~Run-Rate AFFO.

The after-tax dividend will benefit from AIR's refreshed tax basis. Two-thirds of the 2021 dividend was a tax-free return of capital while the remaining one-third was taxable at capital gain rates. In the same year, approximately 60% of peer dividends were taxed at ordinary income rates, with the remaining 40% taxed at capital gain rates.

In 2022, we currently project a majority of our dividend will be taxable at capital gain rates, with the remainder taxable at ordinary income rates. We believe the tax characteristics of our dividend makes our stock more attractive to taxable investors, such as foreign investors, taxable individuals, and corporations by comparison to peer shares whose dividends are taxed at higher rates. For example, if AIR's 2022 dividend is characterized as 50% capital gains and 50% as ordinary income and peer 2022 dividends are characterized consistently with 2021, AIR's estimated after tax dividend would be approximately 35% higher than peer average.

Team and Culture

Our team and culture are keys to our success. We have a relentless focus on productivity and innovation. We continuously seek to reduce costs through the use of additional automation and continued technological investment, and by avoiding costs, for example by retention of residents. We apply this same focus to our general and administrative expenses, expecting these costs to be lower, as a percentage of the gross asset value of our investments, than are our peers.

We are defined by a commitment to our mission, vision, and values. We strive to provide an exceptional living experience for residents and a great place to work for teammates, to be a good neighbor in the communities we serve, and a good steward for our investors. We are accountable to teammates in return for their hard and 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.

Our intentional focus on a collaborative and productive culture based on respect for others and personal responsibility is reinforced by a preference for promotion from within. We focus on succession planning and talent development to produce a strong, stable team that is the enduring foundation of our success. The Compensation and Human Resources Committee of the Board of Directors is responsible for succession planning in all leadership positions, both in the short-term and the long-term, with particular focus on CEO succession.

Our focus on our team and culture is widely recognized. In 2023, AIR was named a Kingsley Excellence Elite Five multifamily company and a winner of the 2023 Kingsley Excellence Awards for customer service for the second year in a row. Of the winners, AIR ranked second among all operators, and first among publicly traded REITs. AIR is committed to world-class customer service, which we deliver through listening to, learning from, and responding to our residents every day. We ~~offer benefits reinforcing~~also benefit from the support of great leadership, contributions from exceptional teammates, and a strong culture. These strengths are confirmed by such awards as AIR's 2023 Top Workplaces USA Award (the second consecutive year), a 10-time winner of Top Workplace in Colorado (by the Denver Post), Top Workplace in Philadelphia (by The Philadelphia Inquirer), and in South Florida (by the Sun Sentinel) as well as two time winner of Built in 2023 Best Places to Work in Colorado, Los Angeles, Miami, and Washington, D.C., and the Denver Business Journal Healthiest Employer in Colorado for the third year in a row. We take seriously our ~~value of caring~~responsibility to care for our customers, our neighbors, and each other ~~including an opportunity to manage one’s life through flexible work schedules~~as teammates. We are grateful for these recognitions 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. Consistent with the durationconsider them confirmation of our ~~other leave policies, we also pay full compensation and benefits for teammates who are actively deployed by the United States military.~~

A critical element of our culture is a relentless focus on efficiency. We continuously seek to reduce costs through the use of additional automation and continued technological investment. We expect this focus will enable our general and administrative expenses to be lower, as a percentage of gross asset value, than our peers.

~~Corporate responsibility is a longstanding AIR priority and a key part of our culture.~~ success.

We are committed to transparency, and continuous improvement, as measured by GRESB. Based on UN Sustainable Development Goals, we have set targets for energy, water, and greenhouse gas reductions. We contracted for expert review of the environmental impacts of our properties, and we are considering various ways to improve portfolio resilience.

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~~During the quarter,~~Global Real Estate Sustainability Benchmark (“GRESB”). Strong progress was made by AIR ~~engaged with holders of approximately 70% of outstanding common shares, which included the participation of multiple Board members alongside senior management,~~ in a series of lunches, dinners, video meetings, and calls. Numerous topics were discussed such as governance, investment strategy, operations, and corporate responsibility, including CEO succession planning and matters related to Environmental, Social, and Governance ("ESG"). Board members have also participated2023 in several industry conferences and private meetings throughout the year. AIR's Board is highly proactive and welcomes investor feedback to ensure stockholder perspectives are well heard in Board deliberations.

~~AIR launched new corporate responsibility webpages during the quarter to highlight our~~advancing its commitments to ~~ESG, and~~responsibility beyond governance, achieving a GRESB score of 82 out of 100, placing AIR in the top 20% of residential companies in the Americas. We also published corporate responsibility goals consistent with the United Nations Sustainable Development Goals. AIR also launched an inaugural materiality assessment and surveyed investors, its Board of Directors, teammates, vendors, and community partners to identify which topics they consider most material to the Company. Subsequent to quarter end, AIR published its 2021-2022our 2022-2023 Corporate Responsibility Report ~~which demonstrates AIR's~~highlighting our commitment to ~~being an outstanding corporate citizen,~~community and ~~reinforces its dedication to ESG goal setting and reporting on progress through transparent, data-driven disclosures consistent with the Sustainability Accounting and Standards Board (“SASB”).~~

~~AIR has made~~continued progress on its goals to reduce the Company's environmental impact by 2025, which include a 15% energy use reduction, 10% water usage reduction, and 15% greenhouse gas reduction, all by 2025. This is in addition to more than a decade of investment in clean energy, energy efficiency and water conservation, including $7.9 million invested in energy conservation between 2019 and 2021.

AIR recently received its first public GRESB score of 78, which included an “A” grade for both ESG public disclosure and alignment with the Task Force for Climate-Related Financial Disclosures (“TCFD”). AIR received a “Green Star” from GRESB for overall Management and Performance in 2021, a perfect social responsibility score, and a near-perfect corporate governance score.

~~In partnership with the National Leased Housing Association, we continue~~ our ~~longstanding commitment to offer AIR Gives Opportunity Scholarships to students living in affordable housing. During 2022, we awarded 14 scholarships to students living in affordable housing.~~

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 recognized by the Denver Business Journal as one of the Denver Area's Healthiest Employers in 2022 for the third consecutive year.

goals.

Results of Operations

Because our operating results depend primarily on income from our apartment communities, the supply of and demand for apartments influences our operating results. Additionally, the level of expenses required to operate and maintain our apartment communities and the pace and price at which we acquire and dispose of our apartment communities affects our operating results.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying condensed consolidated financial statements included in Item 1.

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Financial Highlights

Net income attributable to common stockholders per common share, on a dilutive basis ~~decreased $0.05~~was $4.43 and $4.35 for the three and nine months ended September 30, 2023, respectively, compared to $0.01 and $3.68 for the three and nine months ended September 30, 2022, respectively, due primarily to:

•Same Store revenue growth of 6.8% which resulted in higher net operating income ("NOI") of 6.3%, primarily driven by an increase of 5.6% in residential rents for the three months ended September 30, ~~2022,~~2023 compared to ~~2021, due primarily to~~2022. Additionally, acquisitions are growing faster than Same Store. For example, the Class of 2022 had revenue growth of 9.9%, which resulted in higher ~~depreciation and amortization expense due to properties acquired and lower gain on dispositions~~NOI of ~~real estate, offset partially by increased contribution from property operations. Net income attributable to common stockholders per common share, on a dilutive basis, increased $3.20~~20.1% for the ~~nine~~three months ended September 30, ~~2022,~~2023 compared to ~~2021, respectively, due primarily to~~2022,

•Higher gains on dispositions of real estate,

•Gains on derivative instruments, and ~~lower prepayment penalties,~~

•Lower loss on extinguishment of debt, offset partially by ~~higher depreciation~~

•Lower interest income from the note receivable from Aimco, which was repaid in the second and ~~amortization~~third quarters of 2022, and the $17.4 million prepayment penalty received from Aimco in connection with these repayments, and

•Higher interest expense due to higher interest rates and higher outstanding property ~~acquisitions.~~debt balances.

Pro forma FFO per share was $0.64 and $1.76 for the three and nine months ended September 30, 2023, respectively, compared to $0.58 and $1.81 for the three and nine months ended September 30, 2022, respectively, ~~compared to $0.56 and $1.58, respectively, for 2021,~~ due primarily to ~~increased contribution~~the below factors.

•Same Store revenue growth of 6.8% which resulted in ~~property operations~~higher NOI of 6.3% primarily driven by an increase of 5.6% in residential rents for the three months ended September 30, 2023 compared to 2022. Additionally, acquisitions are growing faster than Same Store. For example, the Class of 2022 had revenue growth of 9.9% which resulted in higher NOI of 20.1% for the three month ended September 30, 2023 compared to 2022, and a

•Gains on derivative instruments as noted above, offset partially by

•A decrease in interest ~~expense.~~income as noted above, and

•An increase in interest expense as noted above.

For the three and nine months ended September 30,

~~Table~~ 2023, Pro forma FFO includes $0.05 per share of ~~Contents~~

non-recurring items including derivative gains that were accelerated through the repayment of certain previously hedged term loans, partially offset by higher than anticipated casualty and legal costs. After consideration of these non-recurring items Run-Rate FFO per share was $0.59 and $1.72 for the three and nine months ended September 30, 2023, respectively.

For the three and nine months ended September 30, 2022, Pro forma FFO includes $0.03 and $0.22 per share, respectively, of non-recurring items including the impact from the Aimco note receivable prepayment. After consideration of these non-recurring items Run-Rate FFO per share was $0.55 and $1.59 for three and nine months ended September 30, 2022, respectively.

Additionally, Run-Rate AFFO per share was $0.52 and $1.51 for three and nine months ended September 30, 2023, respectively, compared to $0.50 and $1.42 for three and nine months ended September 30, 2022, respectively. Our 2023 capital allocation decisions have resulted in paired trades in which we have purchased apartment communities with an anticipated higher rate of NOI growth and lower recurring capital needs and sold partial interests in apartment communities with lower anticipated rates of NOI growth and higher capital needs.

Results of Operations for the Three and Nine Months Ended September 30, ~~2022,~~2023, Compared to ~~2021~~

2022

Property Operations

We have two segments: Same Store and Other Real Estate. Our Same Store segment includes communities that are owned and managed by AIR and ~~had~~have reached a stabilized level of operations. Our Other Real Estate segment includes ~~five properties acquired in 2021,~~ four properties acquired in 2022, four properties previously leased to Aimco, and ~~three communities we expect to sell or lease to a third party, but do not yet meet the criteria to be classified as held for sale~~

four properties acquired in 2023.

Table of ~~September 30, 2022, we had six apartment communities with 1,314 homes that were classified as held for sale.~~Contents

Proportionate Property Net Operating Income

Our proportionate share of financial information includes our share of unconsolidated real estate partnerships and excludes the noncontrolling interest partners’ share of consolidated real estate partnerships. We believe proportionate information benefits the users of our financial information by providing the amount of revenues, expenses, assets, liabilities, and other items attributable to our stockholders.

We use proportionate property NOI to assess the operating performance of our communities. Proportionate property NOI reflects our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements. In our condensed consolidated statements of operations, utility reimbursements are included in rental and other property revenues in accordance with GAAP.

We do not include offsite costs associated with property management, casualty gains or losses, or the results of apartment communities sold or held for sale in our assessment of segment performance. Accordingly, these items are not allocated to our segment results discussed below.

Please see Note 1012 to the condensed consolidated financial statements in Item 1 for further discussion regarding our segments, including a reconciliation of these proportionate amounts to consolidated rental and other property revenues and property operating expenses.

Three Months Ended September 30,

Historical Change

Change Attributable to Changes in Ownership

Change Excluding Changes in Ownership

(in thousands, except percentages)
2022

2021

$

%

$

%

$

%

Rental and other property revenues, before utility reimbursements:

Same Store
$
139,107

$
134,102

$
5,005

3.7
%

$
(7,157
)

(5.9
%)

$
12,162

9.6
%
Other Real Estate

30,258

5,558

24,700

nm

—

—
%

24,700

nm

Total

169,365

139,660

29,705

21.3
%

(7,157
)

(5.9
%)

36,862

27.2
%
Property operating expenses, net of utility reimbursements:

Same Store

35,632

36,883

(1,251
)

(3.4
%)

(1,286
)

(3.5
%)

35

0.1
%
Other Real Estate

10,606

2,963

7,643

nm

—

—
%

7,643

nm

Total

46,238

39,846

6,392

16.0
%

(1,286
)

(3.5
%)

7,678

19.5
%
Proportionate property net operating income:

Same Store

103,475

97,219

6,256

6.4
%

(5,871
)

(6.9
%)

12,127

13.3
%
Other Real Estate

19,652

2,595

17,057

nm

—

—
%

17,057

nm

Total
$
123,127

$
99,814

$
23,313

23.4
%

$
(5,871
)

(6.9
%)

$
29,184

30.3
%


	Three Months Ended September 30,				Historical Change
(dollars in thousands)	2023		2022		$		%
Rental and other property revenues, before utility reimbursements:
Same Store	$	151,619	$	142,009	$	9,610	6.8	%
Other Real Estate	29,543		14,025		15,518		nm
Total	181,162		156,034		25,128		16.1	%
Property operating expenses, net of utility reimbursements:
Same Store	40,353		37,349		3,004		8.0	%
Other Real Estate	8,158		4,783		3,375		nm
Total	48,511		42,132		6,379		15.1	%
Proportionate property net operating income:
Same Store	111,266		104,660		6,606		6.3	%
Other Real Estate	21,385		9,242		12,143		nm
Total	$	132,651	$	113,902	$	18,749	16.5	%

For the three months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, excluding changes attributable to changes in ownership, our Same Store proportionate property NOI increased by ~~$12.1 million, or 13.3%~~6.3%. This increase was attributable primarily to a ~~$12.2~~$9.6 million, or ~~9.6%~~6.8%, increase in rental and other property revenues due to a ~~10.4%~~5.6% increase in residential rental rates, and a ~~30 basis point~~1.2% increase in other rental income, partially offset by a 0.6% decrease in ~~net bad debt.~~

~~Other~~ ADO.

Other Real Estate proportionate property NOI for the three months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, increased by ~~$17.1~~$12.1 million, due primarily to contribution from four properties acquired in ~~2021,~~2023, four properties acquired in 2022, and NOI contribution from the four properties acquired on September 1, 2022, when their respective master leases were canceled.

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Nine Months Ended September 30,

Historical Change

Change Attributable to Changes in Ownership

Change Excluding Changes in Ownership

(in thousands, except percentages)
2022

2021

$

%

$

%

$

%

Rental and other property revenues, before utility reimbursements:

Same Store
$
402,756

$
386,998

$
15,758

4.1
%

$
(21,473
)

(6.1
%)

$
37,231

10.2
%
Other Real Estate

62,371

8,562

53,809

nm

—

—
%

53,809

nm

Total

465,127

395,560

69,567

17.6
%

(21,473
)

(6.1
%)

91,040

23.7
%
Property operating expenses, net of utility reimbursements:

Same Store

105,570

109,299

(3,729
)

(3.4
%)

(4,341
)

(4.0
%)

612

0.6
%
Other Real Estate

23,486

5,351

18,135

nm

—

—
%

18,135

nm

Total

129,056

114,650

14,406

12.6
%

(4,341
)

(4.0
%)

18,747

16.6
%
Proportionate property net operating income:

Same Store

297,186

277,699

19,487

7.0
%

(17,132
)

(7.1
%)

36,619

14.1
%
Other Real Estate

38,885

3,211

35,674

nm

—

—
%

35,674

nm

Total
$
336,071

$
280,910

$
55,161

19.6
%

$
(17,132
)

(7.1
%)

$
72,293

26.7
%


	Nine Months Ended September 30,				Historical Change
(dollars in thousands)	2023		2022		$		%
Rental and other property revenues, before utility reimbursements:
Same Store	$	445,881	$	411,052	$	34,829	8.5	%
Other Real Estate	86,104		16,437		69,667		nm
Total	531,985		427,489		104,496		24.4	%
Property operating expenses, net of utility reimbursements:
Same Store	117,014		111,316		5,698		5.1	%
Other Real Estate	28,010		5,799		22,211		nm
Total	145,024		117,115		27,909		23.8	%
Proportionate property net operating income:
Same Store	328,867		299,736		29,131		9.7	%
Other Real Estate	58,094		10,638		47,456		nm
Total	$	386,961	$	310,374	$	76,587	24.7	%

For the nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, excluding changes attributable to changes in ownership, our Same Store ~~proportionate~~proportionate property NOI increased by ~~$36.6 million, or 14.1%~~9.7%. This increase was attributable primarily to a ~~$37.2~~$34.8 million, or ~~10.2%~~8.5%, increase in rental and other property revenues due to ~~a 7.6%~~an 8.1% increase in residential rental rates, ~~a 120 basis point~~and an 0.8% increase in ~~ADO to 96.9%, and~~other residential income, partially offset by a ~~100 basis point~~0.7% decrease in ~~net bad debt.~~ADO.

Other Real Estate proportionate property NOI for the nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~ 2022, increased by ~~$35.7~~$47.5 million, due primarily to contribution from four properties acquired in ~~2021,~~2023, four properties acquired in 2022, and NOI contribution from the four properties acquired on September 1, 2022, when their respective master leases were canceled.

Non-Segment Real Estate Operations

Operating income amounts not attributed to our segments include offsite costs associated with property management, casualty losses, and the results of apartment communities sold or held for sale, which we do not allocate to our segments for purposes of evaluating segment performance.

For the three months ended September 30, 2022, compared to 2021, non-segment real estate operations decreased by $11.7 million, due primarily to $15.1 million of lower NOI attributable to sold properties, offset partially by a $1.9 million decrease in casualty losses and a $1.5 million increase in property management revenues.

For the nine months ended September 30, 2022, compared to 2021, non-segment real estate operations decreased by $32.1 million, due primarily to $37.1 million of lower NOI attributable to sold properties, offset partially by a $3.4 million increase in property management revenues and $1.6 million decrease in casualty losses.

~~Depreciation and Amortization~~

For the three and nine months ended September 30, 2023, compared to 2022, non-segment real estate operations decreased by $1.2 million and $21.8 million, respectively, due primarily to $5.9 million and $22.1 million of lower NOI attributable to sold properties due to decreased disposition activity, with dispositions of nine additional properties during 2022 compared to ~~2021,~~2023.

Additionally, for the three months ended September 30, 2023, the decrease in non-segment real estate operations was offset partially by $4.7 million of lower casualty losses due to receipt of third-party casualty recoveries in 2023.

Depreciation and Amortization

For the three months ended September 30, 2023, compared to 2022, depreciation and amortization expense decreased $11.4 million, or 12.6%, due primarily to the reduction in depreciation associated with sold properties, offset partially by properties acquired subsequent to September 30, 2022.

For the nine months ended September 30, 2023, compared to 2022, depreciation and amortization expense increased ~~$9.3~~$10.3 million, or ~~11.5%~~4.1%, ~~and $21.5 million, or 9.2%, respectively,~~ due primarily to properties acquired subsequent to September 30, ~~2021,~~2022, offset partially by the reduction in depreciation associated with ~~properties sold.~~

sold properties.

General and ~~Administrative Expenses~~

administrative expenses

For the three months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, general and administrative ~~(“G&A”)~~ expenses ~~increased $1.8~~decreased $2.0 million, or ~~30.4%~~26.1%, due primarily to ~~the timing of incentive compensation accruals.~~

lower personnel costs.

For the nine months ended September 30, ~~2022,~~2023, compared to ~~2021, G&A~~2022, general and administrative expenses ~~increased by $4.1 million, or 26.3%, due primarily to higher personnel costs and timing~~were relatively flat.

Table of ~~incentive compensation accruals.~~Contents

Other ~~Expenses, Net~~

expenses, net

Other expenses, net, includes costs associated with our risk management activities, partnership administration expenses, and certain non-recurring items.

For the three and nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, other expenses, net, increased ~~$1.1~~by $3.2 million ~~or 29.5%,~~and $8.6 million, respectively, due primarily to ~~the ground lease expense at a property acquired in 2022, offset partially by the favorable settlement of litigation.~~

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~~For~~higher legal expenses, and one-time severance payments. Additionally, for the nine months ended September 30, ~~2022, compared to 2021,~~2023, other expenses, net ~~decreased by $3.3 million, or 36.1%,~~further increased due ~~primarily~~ to ~~a gain on the sale of a cost basis investment, offset partially by the~~incremental ground lease expense ~~at a property~~associated with an acquired ~~in 2022 and higher legal expenses.~~

property.

Interest Income

For the three and nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, interest income decreased by ~~$3.8~~$6.7 million, or, ~~28.4%~~69.6%, and $42.6 million, or 87.4%, respectively, due primarily to $17.4 million of lower interest income associated with the 2022 prepayment of our ~~note~~notes receivable from ~~Aimco, which was repaid during the third quarter of 2022, and~~Aimco. Interest income decreased further due to lower interest income associated with properties leased to Aimco through September 1, 2022, when the leases were canceled. ~~The decrease was offset partially by~~

Interest Expense

For the ~~receipt~~three months ended September 30, 2023, compared to 2022, interest expense decreased $9.8 million, or 29.9%, due primarily to the the impact of a ~~$4.5~~ ~~million prepayment penalty associated with the final $147 million~~hedged derivative activity on interest expense, lower balances on our revolving credit facility, and repayment of ~~the note receivable from Aimco.~~

$325 million of term loans.

For the nine months ended September 30, ~~2022,~~2023, compared to ~~2021, interest income was relatively flat.~~

~~Interest Expense~~

~~For the three months ended September 30,~~ 2022, ~~compared to 2021,~~ interest expense ~~was relatively flat.~~

~~For the nine months ended September 30, 2022, compared to 2021, interest expense decreased by $19.4~~increased $15.8 million, or ~~19.4%~~19.6%, due primarily to ~~lower average property debt balances, offset partially by~~ higher rates on our term loans and revolving credit facility, ~~and~~ interest expense associated with our senior unsecured notes issued in the second quarter of 2022, and higher outstanding property debt balances; offset partially by the impact of hedged derivative activity on interest ~~rate swaps entered into in 2022.~~

expense, lower balances on our revolving credit facility, and repayment of $325 million of term loans.

Loss on Extinguishment of Debt

~~For~~

During the three months ended September 30, 2023 and 2022, we did not incur a loss on extinguishment of debt.

For the nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, loss on extinguishment of debt decreased by ~~$6.7~~$21.6 million, ~~and $21.2 million, respectively,~~ due to higher prepayment penalties incurred from the early payment of property debt in ~~2021 associated with the deleveraging of AIR’s balance sheet and the write-off of deferred financing costs associated with our previous revolving credit facility in 2021.~~

~~Gain~~2022.

Gains on Dispositions and Impairments of Real Estate ~~and Derecognition of Leased Properties~~

~~There were no apartment communities sold during~~

During the three months ended September 30, ~~2022.~~2023, we recognized a $692.9 million gain on dispositions of real estate and impairments of real estate due primarily to the gain associated with sale of a partial interest in 10 properties in connection with the Core JV.

During the nine months ended September 30, 2023, we recognized a $675.5 million gain on dispositions and impairments of real estate due primarily to:

•$698.8 million of gain on dispositions of real estate from the sale of 10 properties in connection with the Core JV;

•$0.5 million of gain in connection with the formation of the Value-Add JV; offset partially by

•A non-cash impairment loss on real estate of $23.6 million due to the evaluation of the expected hold period of three apartment communities included in our Other Real Estate reporting segment, which are now sold.

During the three months ended September 30, 2022, there were no apartment communities sold. During the nine months ended September 30, 2022, we recognized $587.6 million of gain on dispositions of real ~~estate.~~

~~Apartment communities sold are summarized below (dollars in millions):~~

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Number of apartment communities sold

—

1

12

1

Gross proceeds
$
—

$
40.0

$
781.1

$
40.0

Net proceeds (1)
$
—

$
39.9

$
646.8

$
39.9

~~(1)~~

~~Net proceeds are after repayment~~estate related to the sale of ~~$114.0 million of property debt, net working capital settlements, payment of transaction costs, and debt prepayment penalties, if applicable.~~

12 apartment communities. During the three and nine months ended September 30, ~~2021,~~2022, we did not recognize any real estate impairment losses.

Gain on Derivative Instruments

During the three and nine months ended September 30, 2023, we recognized ~~$7.1~~$14.1 million and $23.3 million, respectively, of ~~gain associated with~~gains on derivative instruments that are not designated as cash flow hedges primarily related to mark-to-

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market valuation changes and cancellation of certain interest swaps and treasury locks during the ~~sale of one apartment community~~period. During the three and ~~$87.4~~nine months ended September 30, 2022, we did not recognize any gains on derivative instruments.

Loss from Unconsolidated Real Estate Partnerships

For the three and nine months ended September 30, 2023, compared to 2022, loss from unconsolidated real estate partnerships increased $10.3 million ~~of gain associated with the derecognition of the net book value of the properties leased to Aimco for redevelopment~~ and ~~development. The associated leases were canceled during~~$9.3 million, respectively. During the third quarter of ~~2022, as~~2023, our unconsolidated joint ventures generated NOI of $11.1 million. This incremental NOI was offset by higher depreciation expense due to valuing the ~~developments were complete.~~

properties in the Core and Value-Add JV's at fair market value.

Income Tax ~~(Expense) Benefit~~

Expense

Certain of our operations, including property management, are conducted through taxable REIT subsidiaries (“TRS entities”).

Our income tax ~~(expense) benefit~~expense calculated in accordance with GAAP includes income taxes associated with the income or loss of our TRS entities for which the tax consequences have been realized or will be realized in future periods. Income taxes related to these items, as well as changes in valuation allowance, are included in income tax ~~(expense) benefit~~expense in our condensed consolidated statements of operations.

For the three and nine months ended September 30, ~~2022,~~2023, compared to ~~2021,~~2022, income tax ~~(expense) benefit was relatively flat.~~

~~Table~~expense increased $4.5 million and $4.9 million, respectively, due primarily to the recognition of ~~Contents~~

an income tax liability resulting from the formation of the Core JV.

Critical Accounting Estimates

We prepare our condensed consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. We believe that the critical accounting policies that involve our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements relate to ~~capitalized costs and~~ the impairment of our long-lived assets.

Our critical accounting estimates are described in more detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of AIR’s and the AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no other significant changes in our critical accounting estimates from those reported in our Form 10-K and we believe that the related judgments and assessments have been consistently applied and produce financial information that fairly depicts the financial condition, results of operations, and cash flows for all periods presented.

Non-GAAP Measures

Certain key financial indicators we use in managing our business and in evaluating our financial condition and operating performance are non-GAAP measures. Key non-GAAP measures we use are defined and described below, and for those non-GAAP measures used or disclosed within this quarterly report, we provide reconciliations of the non-GAAP measures to the most directly comparable financial measure computed in accordance with GAAP.

NAREIT Funds From Operations, ~~and~~ Pro forma Funds From Operations,

Run-Rate FFO and Run-Rate Adjusted Funds From Operations

Many of our investors focus on multiples of Funds From Operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), referred to herein as “NAREIT FFO.” These investors also focus on NAREIT FFO, as adjusted for non-cash, unusual, or non-recurring items. We refer to this metric as Pro forma Funds From Operations (“Pro forma FFO”) and use it as a ~~secondary~~ measure of operational performance.

NAREIT FFO is a non-GAAP measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate assets generally appreciate over time or maintain residual value to a much greater extent than do other depreciable assets such as machinery, computers, or other personal property. NAREIT defines FFO as net income computed in accordance with GAAP, excluding: (i) depreciation and amortization related to real estate; (ii) gains and losses from sales and impairment of depreciable assets and land used in our primary business; and (iii) income taxes directly associated with a gain or loss on the sale of real ~~estate,~~estate; and ~~including (iv)~~adjustments for our share of ~~the~~ FFO of unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are

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calculated on the same basis to determine NAREIT FFO. We calculate NAREIT FFO attributable to AIR common stockholders (diluted) by subtracting dividends on ~~preferred stock~~Preferred Stock and preferred units and amounts allocated from NAREIT FFO to participating securities.

In addition to NAREIT FFO, we use Pro forma FFO, Run-Rate FFO and Run-Rate Adjusted Funds From Operations (“AFFO”) to measure short-term and current period performance. Pro forma FFO represents NAREIT FFO as defined above, excluding certain amounts that are unique or occur infrequently.

~~NAREIT~~ Run-Rate FFO ~~and~~represents Pro forma FFO as defined above, excluding certain amounts that are unique or occur infrequently. Run-Rate AFFO represents Pro forma FFO as defined above, reduced by Capital Replacements, and is a measure of current period performance.

NAREIT FFO, Pro forma FFO, Run-Rate FFO and Run-Rate AFFO should not be considered alternatives to net income determined in accordance with GAAP, as indications of our performance. Although we use these non-GAAP measures for comparability in assessing our performance compared to other REITs, not all REITs compute these same measures and those who do may not compute them in the same manner. Accordingly, there can be no assurance that our basis for computing these non-GAAP measures is comparable with that of other REITs.

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NAREIT FFO, ~~and~~ Pro forma FFO, Run-Rate FFO, and Run-Rate AFFO are calculated as follows (in thousands, except per share data):

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Net income attributable to AIR common stockholders

$
1,760

$
9,289

$
574,363

$
74,455

Adjustments:

Real estate depreciation and amortization, net of noncontrolling partners’ interest

85,057

74,864

240,436

213,947

Gain on dispositions of real estate and derecognition of leased properties, net of noncontrolling partners' interest

—

(7,127
)

(587,453
)

(94,512
)
Income tax adjustments related to gain on dispositions and other tax-related items

(348
)

(122
)

(1,448
)

150

Common noncontrolling interests in AIR OP’s share of above adjustments

(5,198
)

(3,269
)

21,083

(5,842
)
Amounts allocable to participating securities

(52
)

—

244

—

NAREIT FFO attributable to AIR common stockholders

$
81,219

$
73,635

$
247,225

$
188,198

Adjustments:

Loss on extinguishment of debt (1)

—

6,673

23,636

44,833

Separation, business transformation, and transition related costs (2)

1,419

1,393

3,881

3,858

Non-cash straight-line rent (3)

3,660

642

4,944

1,979

Incremental cash received from leased properties (4)

109

191

432

500

Casualty and other (5)

4,280

5,364

4,635

6,144

Common noncontrolling interests in AIR OP’s share of above adjustments

(581
)

(690
)

(2,300
)

(2,829
)
Amounts allocable to participating securities

—

(13
)

(19
)

(29
)
Pro forma FFO attributable to AIR common stockholders

$
90,106

$
87,195

$
282,434

$
242,654

Weighted-average common shares outstanding – basic

153,811

156,646

155,488

153,289

Dilutive common share equivalents (6)

246

396

269

361

Total shares and dilutive share equivalents

154,057

157,042

155,757

153,650

Net income attributable to AIR per share – diluted

$
0.01

$
0.06

$
3.68

$
0.48

NAREIT FFO per share – diluted

$
0.53

$
0.47

$
1.59

$
1.22

Pro forma FFO per share – diluted

$
0.58

$
0.56

$
1.81

$
1.58


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net income attributable to AIR common stockholders	$	663,596	$	1,760	$	650,700	$	574,363
Adjustments:
Real estate depreciation and amortization, net of noncontrolling partners’ interest	87,169		85,057		260,930		240,436
Gain on dispositions and impairments of real estate, net of noncontrolling partners’ interest	(690,992)		—		(673,520)		(587,453)

Income tax adjustments related to gain on dispositions and other tax-related items	4,400		(348)		4,400		(1,448)
Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities	38,773		(5,250)		25,962		21,327
NAREIT FFO attributable to AIR common stockholders	$	102,946	$	81,219	$	268,472	$	247,225
Adjustments:
Gain on derivative instruments (1)	(12,436)		—		(21,688)		—
Non-cash straight-line rent (2)	3,068		3,660		9,248		4,944
Business transformation and transition related costs (3)	897		1,419		1,420		3,881
Loss on extinguishment of debt (4)	—		—		2,008		23,636
Casualty losses and other (5)	(272)		4,389		1,855		4,635
Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities	541		(581)		454		(1,887)
Pro forma FFO attributable to AIR common stockholders	$	94,744	$	90,106	$	261,769	$	282,434
Cash swap acceleration income, net of common noncontrolling interests in AIR OP and participating securities	(10,854)		—		(10,854)		—
Aimco note prepayment, net of common noncontrolling interests in AIR OP and participating securities	—		(4,673)		—		(34,456)
Casualty and Legal expense in excess of run-rate, net of common noncontrolling interests in AIR OP and participating securities	2,665		—		4,628		—
Run Rate FFO attributable to AIR common stockholders	$	86,555	$	85,433	$	255,543	$	247,978
Capital Replacements, net of common noncontrolling interests in AIR OP and participating securities	(7,476)		(6,706)		(26,449)		(22,912)
Leasing Commissions, net of common noncontrolling interests in AIR OP and participating securities	(1,712)		(1,632)		(5,029)		(4,227)
Run-Rate AFFO attributable to AIR common stockholders	$	77,367	$	77,095	$	224,065	$	220,839

Weighted-average common shares outstanding – basic	147,474		153,811		148,372		155,488
Dilutive common share equivalents	299		246		143		269
Total shares and dilutive share equivalents	147,773		154,057		148,515		155,757

Net income attributable to AIR per share – diluted	$	4.43	$	0.01	$	4.35	$	3.68
NAREIT FFO per share – diluted	$	0.70	$	0.53	$	1.81	$	1.59
Pro forma FFO per share – diluted	$	0.64	$	0.58	$	1.76	$	1.81
Run-Rate FFO per share - diluted	$	0.59	$	0.55	$	1.72	$	1.59
Run-Rate AFFO per share - diluted	$	0.52	$	0.50	$	1.51	$	1.42

(1)

During ~~2022 and 2021,~~2023, in anticipation of future financing transactions, we ~~incurred debt extinguishment costs related~~entered into treasury locks that did not qualify for hedge accounting under GAAP. Changes in the fair value of these instruments are included in net income attributable to AIR common stockholders. Any non-cash changes in fair value are excluded in the ~~prepayment~~determination of ~~debt. We excluded these costs from~~ Pro forma ~~FFO because we believe they are not representative of future cash flows.~~

FFO.

(2)

During 2022, we incurred consulting, placement, legal, and other transformation related costs as we fully implement AIR’s business model, including projects intended to increase efficiency and reduce costs in future periods. During 2021, we incurred tax, legal and other costs in connection with the Separation. We excluded these costs from Pro forma FFO because we believe they are not related to ongoing operating performance.

~~(3)~~

In 2018 and 2022, we assumed 99-year ground leases with scheduled rent increases. Due to the terms of the leases, GAAP rent expense will exceed cash rent payments until 2076 and 2079, respectively. We include the cash rent payments for ~~this~~these ground ~~lease~~leases in Pro forma FFO but exclude the incremental straight-line non-cash rent expense. The rent expense for ~~this lease~~these leases is included in other ~~expense,~~expenses, net, in our condensed consolidated statements of operations.

~~(4)~~(3)

During ~~2021~~2023 and 2022, we ~~had certain properties leased~~incurred consulting, placement, legal, and other transformation related costs as we fully implement AIR’s business model, including projects intended to increase efficiency and reduce costs in future periods. As we engage in and finalize our

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finance transformation initiative that modernizes our systems and processes, including a ~~third party. Due~~new ERP system, we expect to continue to incur these costs throughout 2023. We excluded these costs from Pro forma FFO because we believe they are not related to ongoing operating performance.

(4)During 2023 and 2022, we incurred debt extinguishment costs related to the ~~terms~~prepayment of debt. In 2023, these ~~leases, cash received exceeded GAAP income.~~costs are related to the prepayment of high-cost, floating-rate debt. We ~~included the cash lease income in~~excluded these costs from Pro forma ~~FFO. These leases were canceled during the third quarter~~FFO because we believe they are not representative of ~~2022.~~

future cash flows.

(5)

~~In the third quarter of 2022,~~During 2023, we incurred significant casualty losses related to fire damage at our Palazzo East at Park La Brea apartment community. During 2021, we incurred significant casualty losses due to Hurricane Ian-related wind damage, primarily at one of our communities in South Florida, and flooding at one of our communities in Boston. In the third quarter of 2021, we incurred casualty losses due to Hurricane Ida-relatedIda-induced flooding in downtown Philadelphia causing damage to our Park Towne Place apartment community, whose clean-up costs extended into 2022. During the third quarter of 2023, we recorded a net gain upon receipt of third-party funds, upon closing the 2021 Park Towne Place claim. AIR excludes individually significant casualty losses from the computation of FFO when the expected gains or losses are atypical and ~~continued to incur incremental~~ costs ~~related to its cleanup in 2022, net of third party reimbursements received. We excluded these costs and reimbursements from Pro forma FFO because of the unusual nature of the weather events.~~

~~(6)~~

~~Certain common share equivalents that~~are greater than $1 million. Individual casualty losses less than $1 million are included in FFO. In 2023, these "normal" casualty losses are expected to exceed historical averages and AIR's expectation entering the year by $1.7 million. AIR has excluded casualty losses that exceeded our ~~calculation~~beginning of ~~net income attributable to AIR per share, diluted are excluded from our calculation of NAREIT FFO per share and Pro forma FFO per share as they are anti-dilutive.~~

During the nine months ended September 30, 2022, we sold our 2% cost basis investment in the portfolio serving as collateral for the note receivable from Aimco. We recognized $7.2 million of gain on dispositions of unconsolidated real estate partnerships in connection with the sale, or $5.4 million, net of tax. Consistent with prior treatment of gains on cost basis investments, this gain has been includedyear expectations in the determination of FFO given we consider the investment to be incidental to our main business as a REIT. Specifically, we only held the 2% interest in order to provide additional collateral for our short-term loan to Aimco and for tax planningRun-Rate FFO.

~~Table of Contents~~

~~associated with the Separation.~~

Proportionate Debt, as used in our leverage ratios, is a non-GAAP measure and includes our share of the long-term, non-recourse property debt, outstanding borrowings under our revolving credit facility, term loans, and unsecured notes. Proportionate Debt excludes unamortized debt issuance costs because these amounts represent cash expended in earlier periods and do not reduce our contractual obligations. We reduce our recorded debt by the amounts of cash and restricted cash on-hand, ~~(which are primarily restricted under the terms of our property debt agreements),~~ excluding tenant security deposits included in restricted cash, assuming the remaining amounts of cash and restricted cash would be used to reduce our outstanding leverage.

EBITDAre is defined by NAREIT and provides for an additional performance measure independent of capital structure for greater comparability between real estate investment trusts. We define Adjusted EBITDAre as EBITDAre adjusted for the effect of the following items for the reasons set forth below:

•

net income attributable to noncontrolling interests in consolidated real estate partnerships and EBITDAre adjustments attributable to noncontrolling interests are excluded to allow investors to compare a measure of our earnings before the effects of our capital structure and indebtedness with that of other companies in the real estate industry;

•

~~the income recognized related to our note receivable from Aimco, which was repaid during the third quarter of 2022, is excluded, as proceeds were used to repay current amounts outstanding;~~

•

the amount by which GAAP rent expense exceeds cash ~~rents~~rent payments for two long-term ground leases ~~for which expense exceeds cash payments~~ until 2076 and 2079 ~~respectively,~~ is excluded. The excess of GAAP rent expense over the cash payments for ~~this lease~~these leases does not reflect a current obligation that affects our ability to service debt; and

•

applicable Pro forma FFO adjustments to NAREIT FFO under the ~~amount by which cash received exceeds GAAP lease income for the leased properties, four~~heading “NAREIT Funds From Operations and Pro forma Funds From Operations,” excluding items that are not included in EBITDAre, to exclude certain amounts that are unique or occur infrequently.

Table of ~~which were canceled on September 1, 2022, is included.~~Contents

The reconciliation of net income to EBITDAre and Adjusted EBITDAre, as used in our leverage ratios, is as follows (in thousands):

Three Months Ended

September 30, 2022

Net income

$
3,396

Adjustments:

Interest expense

32,656

Income tax expense

46

Depreciation and amortization

90,445

EBITDAre

$
126,543

Net income attributable to noncontrolling interests in consolidated real estate partnerships

102

EBITDAre adjustments attributable to noncontrolling interests and unconsolidated real estate partnerships

(7,463
)
Interest income and prepayment penalties on note receivable from Aimco

(5,209
)
Pro forma FFO adjustments, net (1)

11,293

Adjusted EBITDAre

$
125,266

Annualized Adjusted EBITDAre

$
501,064

Anticipated November 2022 property sales, annualized

(21,775
)
Annualized Adjusted EBITDAre, Pro forma for anticipated November 2022 property sales

$
479,289


	Three Months Ended September 30, 2023
Net income	$	710,512
Adjustments:
Interest expense	22,888
Income tax expense	4,595
Depreciation and amortization	79,023
Gain on dispositions of real estate	(692,861)


Net income attributable to noncontrolling interests in consolidated real estate partnerships	(2,525)
EBITDAre adjustments attributable to noncontrolling interests and unconsolidated real estate partnerships	13,437
EBITDAre	$	135,069
Pro forma FFO and other adjustments, net (1)	177
Quarterly Adjusted EBITDAre	$	135,246
Adjusted EBITDAre, before removal of annualization impact for non-recurring items	$	540,984
Removal of annualization impact for non-recurring items (2)	(38,313)
Adjusted EBITDAre	$	502,671

(1)

~~Pro forma FFO adjustments, net, includes~~Includes pro forma adjustments to NAREIT FFO under the heading NAREIT Funds From Operations and Pro forma Funds From Operations, excluding items that are not included in EBITDAre such as prepayment penalties, ~~net, and amounts attributable to noncontrolling interest share.~~net. EBITDAre has also been adjusted by ~~(i) $1.0~~$0.9 million to reflect the ~~cancellation~~disposition of ~~the four leased~~two properties and ~~(ii) $0.4 million to reflect~~ the ~~acquisition of one property,~~Core Joint Venture, as if ~~both of~~ the transactions closed on July 1, ~~2022.~~2023, and an adjustment of $11.5 million non-cash gain on derivative instruments.

(2)Third quarter 2023 EBITDAre benefits from $12.8 million of items that are not expected to recur in the future. As such, they were not annualized in the computation of Adjusted EBITDAre.

Liquidity and Capital Resources

Liquidity

Liquidity is the ability to meet present and future financial obligations. Our primary source of liquidity is cash flows from operations. Additional sources are proceeds from dispositions of apartment communities, proceeds from refinancing existing property debt, borrowings under new property debt, borrowings under our credit facilities, and proceeds from equity offerings.

As of September 30, ~~2022,~~2023, our available liquidity was ~~$609.5 million,~~$2.1 billion, which consisted of:

•

$~~83.1~~95.7 million inof our share of cash and cash equivalents;

•

$~~16.5~~15.8 million of our share of restricted cash, excluding amounts related to tenant security deposits, which consists primarily of escrows held by lenders for capital additions, property taxes, and insurance; ~~and~~

•

$~~509.9~~970.0 million of available capacity to borrow under our revolving credit facility after consideration of letters of ~~credit.~~credit; and

37•

~~Table~~$1.0 billion of ~~Contents~~committed property level financing through our secured credit facility with Fannie Mae.

Additional liquidity may also be provided through future secured and unsecured financings.

Uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, dividends paid to stockholders, distributions paid to noncontrolling interest partners, ~~and~~ acquisitions of apartment ~~communities.~~communities, and repurchases of equity securities. We use our cash and cash equivalents and cash provided by operating activities to meet short-term liquidity needs. In the event that our cash and cash equivalents and cash provided by operating activities are not sufficient to meet our short-term liquidity needs, we have additional means, such as short-term borrowing availability and proceeds from apartment community sales and debt ~~refinancings.~~refinancing. We may use our revolving credit facility for working capital and other short-term purposes, such as funding investments on an interim basis. We expect to meet our long-term liquidity requirements, including apartment community acquisitions, primarily through secured and unsecured borrowings, the issuance of equity securities (including OP Units), the sale of apartment

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communities, and cash generated from operations. Additionally, we expect to meet our liquidity requirements associated with our debt maturities.

There have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of AIR’s and the AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2021, with the exception of the issuance of $400 million of senior unsecured notes, which were used to repay borrowings on our revolving credit facility, and the hedging of $830 million of our floating rate debt through placement of floating to fixed rate swaps, which were designated as cash flow hedges.2022.

Leverage and Capital Resources

The availability of credit and its related effect on the overall economy may affect our liquidity and future financing activities, both through changes in interest rates and access to financing. Any adverse changes in the lending environment could negatively affect our liquidity. We believe we have mitigated much of this exposure by reducing our short and intermediate-term maturity risk through refinancing such loans with long-dated debt. Additionally, during the second quarter of 2022, we entered into floating to fixed interest rate swaps for $830 million notional principal value of debt, further reducing our exposure to increasing interest rates. However, if

If financing options become unavailable for our future debt needs, we may consider alternative sources of liquidity, such as reductions in capital spending, or proceeds from apartment community dispositions.

The combination of secured and unsecured debt, preferred OP Units, and redeemable noncontrolling interests in a consolidated real estate partnership comprise our total leverage. The weighted-average remaining term to maturity for our total leverage was ~~6.4~~6.9 years as of September 30, ~~2022~~2023, inclusive of extension options, with a weighted-average interest rate of ~~3.9%~~4.3%. As of September 30, 2022, the interest rate on our fixed rate loans and floating rate loans is 3.3% and 5.1%, respectively, and we face refunding and repricing risk in the next three years of only 10% of total debt.

We have sufficient committed credit to repay all debt coming due through 2027.

Under our credit agreement and unsecured notes payable, ~~and revolving credit facility,~~ we have agreed to maintain certain financial covenants, as well as other covenants customary for similar credit arrangements. The financial covenants we are required to maintain include a ~~Maximum Leverage~~maximum leverage ratio of no greater than 0.60 to 1.00; a ~~Fixed Charge Coverage Ratio~~fixed charge coverage ratio of ~~greater~~no less than ~~1.5x,~~1.50 to 1.00, a ~~Maximum Secured Indebtedness~~maximum secured indebtedness to ~~Total Assets~~total assets ratio of no greater than ~~0.45 to 1.00 through March 31, 2023, and~~ 0.40 to 1.00, ~~thereafter,~~ a ~~Maximum Unsecured Leverage~~maximum unsecured leverage ratio no greater than 0.60 to 1.00, and a ~~Minimum Unsecured Interest Coverage Ratio~~minimum unsecured interest coverage ratio no less than 1.50 to 1.00. We believe we were in compliance with these covenants as of September 30, ~~2022~~2023 and expect to remain in compliance during the next 12 months.

Changes in Cash, Cash Equivalents, and Restricted Cash

The following discussion relates to changes in consolidated cash, cash equivalents, and restricted cash due to operating, investing, and financing activities, which are presented in our condensed consolidated statements of cash flows in Item 1 of this report.

Operating Activities

For the nine months ended September 30, ~~2022,~~2023, net cash provided by operating activities was ~~$351.5~~$301.7 million. Our operating cash flow is affected primarily by rental rates, occupancy levels, operating expenses related to our portfolio of apartment communities, and changes in working capital items. Cash provided by operating activities for the nine months ended September 30, ~~2022, increased~~2023, decreased by ~~$118.7~~$49.7 million compared to the same period in ~~2021,~~2022, due primarily to ~~higher contribution from our Same Store portfolio and~~lower net operating income associated with sold apartment communities, partially offset by increased contribution from properties recently acquired.

Investing Activities

For the nine months ended September 30, ~~2022,~~2023, our net cash used in investing activities of $270.0 million consisted primarily of purchases of real estate and capital expenditures, offset partially by proceeds from dispositions of real estate and distributions from unconsolidated real estate partnerships. Net cash provided by investing activities of $252.9 million for the same period in 2022 consisted primarily of proceeds from dispositions of real estate and proceeds from the partial repayment of the ~~note~~notes receivable from Aimco, which was repaid in the second and third quarters of 2022, offset partially by purchases of real estate and capital expenditures. ~~Net cash used in investing activities of $250.6 million for the same period in 2021~~

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~~consisted primarily of purchases of real estate and capital expenditures, offset partially by the cash received from debt investment maturities.~~

Capital additions ~~totaled $145.1~~totaled $128.4 million and ~~$110.9~~$111.2 million during the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. We generally fund capital additions with cash provided by operating activities and cash proceeds from sales of apartment communities.

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We categorize capital spending for communities in our portfolio broadly into five primary categories:

•

capital replacements, which do not increase the useful life of an asset from its original purchase condition. Capital replacements represent capital additions made to replace the portion of our investment in acquired apartment communities consumed during our period of ownership;

•

capital ~~improvements, which represent capital additions made~~replacements, expenditures that are necessary to ~~replace~~help preserve the ~~portion~~value of ~~acquired apartment communities consumed prior to our period of ownership;~~

and maintain functionality at the communities;

•

capital enhancements, which may include kitchen and bath remodeling, energy conservation projects, and investments in more durable, longer-lived materials designed to ~~reduce costs, and do not significantly disrupt property operations;~~

position assets for higher rental levels in their respective markets;

•

initial capital expenditures, which represent capital additions contemplated in the underwriting at our recently acquired communities. These amounts are considered in the underwriting of the acquisition and are therefore included with the purchase price when determining expected returns; ~~and~~

•

casualty, which represents capitalized costs incurred in connection with the restoration
of an apartment community after a casualty ~~event.~~event; and

•other, which represents capitalized costs in connection with tenant improvements, entitlement, and planning.

We exclude the amounts of capital spending related to apartment communities sold or classified as held for sale at the end of the period from the foregoing ~~measures.~~

measures in order to view the spend for the continuing portfolio.

A summary of the capital spending for these categories, along with a reconciliation of the total for these categories to the capital expenditures reported in the accompanying condensed consolidated statements of cash flows, are presented below (in thousands):

Nine Months Ended September 30,

2022

2021

Capital replacements

$
20,820

$
20,377

Capital improvements

10,037

5,989

Capital enhancements

75,606

71,806

Initial capital expenditures

24,156

3,851

Casualty

12,348

2,565

Entitlement and planning

2,171

6,294

Total capital additions

$
145,138

$
110,882

Plus: additions related to apartment communities sold and held for sale

4,014

17,482

Consolidated capital additions

$
149,152

$
128,364

Plus: net change in accrued capital spending

1,963

2,513

Total capital expenditures per condensed consolidated statements of cash flows

$
151,115

$
130,877


	Nine Months Ended
	September 30, 2023		September 30, 2022
Capital Replacements	$	24,605	$	19,965
Capital Enhancements	65,244		61,795
Initial Capital Expenditures	32,620		22,157
Casualty	5,036		3,649
Other	869		3,624
Total capital additions	$	128,374	$	111,190
Plus: additions related to apartment communities sold and held for sale	12,674		37,962
Consolidated capital additions	$	141,048	$	149,152
Plus: net change in accrued capital spending	(193)		1,963
Total capital expenditures per condensed consolidated statements of cash flows	$	140,855	$	151,115

For the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, we capitalized ~~$1.1~~$1.0 million and ~~$1.8~~$1.1 million of interest costs, respectively, and ~~$12.6~~$12.7 million and ~~$12.3~~$12.6 million of indirect costs, respectively.

Financing Activities

Net cash used in financing activities of $199.0 million for the nine months ended September 30, 2023 consisted primarily of net repayments on our revolving credit facility, the repayment of term loans, payment of dividends, and repurchases of Common Stock and OP Units, offset partially by net proceeds from non-recourse property debt. Net cash used in financing activities of $582.5 million for the nine months ended September 30, 2022 consisted primarily of repayments of non-recourse ~~property~~ debt and term loans, payment of dividends and distributions, and repurchases of Common Stock and OP Units, offset partially by proceeds from the issuance of unsecured notes payable. Net cash provided by financing activities of $41.5 million for the same period in 2021 consisted primarily of proceeds from term loans and the issuance of Common Stock, offset partially by repayments of non-recourse property debt and term loans.

Future Capital Needs

We expect to fund any future acquisitions, debt maturities, and other capital spending principally with proceeds from apartment community sales (including the formation of joint ventures), secured and unsecured borrowings, the issuance of equity securities

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~~(including~~ (including OP Units), and operating cash flows. We believe, based on the information available at this time, that we have sufficient cash on hand and access to additional sources of liquidity to meet our operational needs for ~~2022~~2023 and beyond.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our chief market risks are refunding risk, that is the availability of property debt, corporate debt, or other cash sources to refund maturing debt, and repricing risk, that is the possibility of increases in base interest rates and credit risk spreads. We use short-term debt financing and working capital primarily to fund short-term uses and generally expect to refinance such borrowings with cash from operating activities, proceeds from apartment community sales, long-term debt, or equity financings. Our objective in managing these risks is to reduce fluctuations in earnings and cash flows associated with changes in interest rate movements. We use derivative financial instruments, principally interest rate swaps and treasury rate locks, to reduce our exposure to interest rate risk. We do not hold or issue derivatives for speculative purposes and closely monitor the credit quality of the institutions with which we transact.

As of September 30, ~~2022,~~2023, on a consolidated basis, we had ~~approximately $800.0~~$475.0 million of outstanding borrowings on our term loans, ~~$88.5 million of variable-rate property-level debt outstanding,~~ and ~~$479.0~~$25.8 million of variable-rate borrowings under our revolving credit facility. WeAfter consideration of our interest rate swap derivatives, which reduce our total variable rate exposure by $350 million, we estimate that a change in the floating rate of ~~100 basis~~100-basis points with constant credit risk spreads would increase or decrease interest expense by ~~$5.4~~$1.5 million, net, on an annual ~~basis, after consideration of our interest rate swaps.~~

basis.

As of September 30, ~~2022,~~2023, we had ~~$114.6~~$134.2 million of 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 debt discussed above.

As of September 30, 2023, we had one undesignated forward starting interest rate swap with a notional value of $50.0 million that was entered into in anticipation of future debt. We estimate that a change in the floating rate of 100-basis points with constant credit risk spreads would increase or decrease interest expense by $0.5 million, net, on an annual basis.

We estimate the fair value of debt instruments as described in Note 59 to the condensed consolidated financial statements in Item 1. The estimated fair value of total indebtedness, including our non-recourse property debt, term loans, revolving credit facility, and unsecured notes payable, was ~~$3.5~~approximately $2.8 billion as of September 30, ~~2022, inclusive of a $242.8 million mark-to-market asset, of which the amount attributable to AIR common shareholders is $189.4 million, or $1.13 per share.~~2023.

ITEM 4. CONTROLS AND PROCEDURES

AIR

Disclosure Controls and Procedures

AIR’s management, with the participation of AIR’s chief executive officer and chief financial officer, has evaluated the effectiveness of AIR’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, AIR’s chief executive officer and chief financial officer have concluded that, as of the end of such period, AIR’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There has been no change in AIR’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third quarter of ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, AIR’s internal control over financial reporting.

The AIR Operating Partnership

Disclosure Controls and Procedures

The AIR Operating Partnership’s management, with the participation of the chief executive officer and chief financial officer of AIR, who are the equivalent of the AIR Operating Partnership’s chief executive officer and chief financial officer, respectively, has evaluated the effectiveness of the AIR Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the ~~Exchange)~~Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the chief executive officer and chief financial officer of AIR have concluded that, as of the end of such period, the AIR Operating Partnership’s disclosure controls and procedures are effective.

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Changes in Internal Control Over Financial Reporting

There has been no change in the AIR Operating Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third quarter of ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, the AIR Operating Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

As of the date of this report, there have been no material changes from the risk factors in AIR’s and the AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2021.~~

2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS,

AND ISSUER PURCHASES OF EQUITY SECURITIES

AIR

Unregistered Sales of Equity Securities

From time to time, we may issue shares of Common Stock in exchange for OP ~~Units, defined under The AIR Operating Partnership heading below.~~Units. Such shares are issued based on an exchange ratio of one share for each common OP Unit. We may also issue shares of Common Stock in exchange for limited partnership interests in consolidated real estate partnerships. During the three months ended September 30, ~~2022,~~2023, we did not issue any shares of Common Stock in exchange for OP Units or limited partnership interests in consolidated real estate partnerships.

Repurchases of Equity Securities

~~The following table summarizes AIR's share repurchases during the three months ended September 30, 2022:~~

Fiscal period

Total
Number of
Shares
Repurchased

Average
Price Paid
per Unit

Total Number of
Shares Repurchased as Part
of Publicly Announced
Plans or Programs

Maximum Dollar Value
of Shares that May Yet
Be Repurchased Under
Plans or Programs
(in thousands) (1)

July 1 - July 31, 2022

—

$
—

—

$
375,000

August 1 - August 30, 2022

—

$
—

—

$
375,000

September 1 - September 30, 2022

1,195,690

$
39.07

1,195,690

$
328,289

Total

1,195,690

$
39.07

1,195,690

~~(1)~~

~~AIR's~~AIR’s Board of Directors has authorized a share repurchase program of its outstanding capital stock for $500 million. This authorization has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions. As of September 30, 2023, there was $105.5 million remaining available for future share repurchases under this authorization.


Fiscal period	Total Number of Shares Repurchased	Average Price Paid per Unit		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Repurchased Under Plans or Programs (in thousands) (1)
July 1 – July 31, 2023	—	$	—	—	$	183,290
August 1 – August 31, 2023	2,249,800	$	34.57	2,249,800	$	105,507
September 1 – September 30, 2023	—	$	—	—	$	105,507
Total	2,249,800	$	34.57	2,249,800

The AIR Operating Partnership

Unregistered Sales of Equity Securities

The AIR Operating Partnership did not issue nor repurchase any unregistered OP Units during the three months ended September 30, ~~2022.~~

2023.

Repurchases of Equity Securities

The AIR Operating Partnership’s Partnership Agreement generally provides that after holding common OP Units for one year, limited partners other than AIR have the right to redeem their common OP Units for cash or, at our election, shares of AIR Common Stock on a one-for-one basis (subject to customary antidilution adjustments). During the three months ended September 30, ~~2022,~~2023, no common OP Units were redeemed in exchange for Common Stock.

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The following table summarizes the AIR Operating Partnership’s repurchases or redemptions of common OP Units in exchange for cash ~~of common OP Units~~ during the three months ended September 30, ~~2022:~~

Fiscal period

Total
Number of
Units
Repurchased

Average
Price Paid
per Unit

Total Number of
Units Repurchased as Part
of Publicly Announced
Plans or Programs

Maximum Number
of Units that May Yet
Be Repurchased Under
Plans or Programs (1)
July 1 - July 31, 2022

23,205

$
41.00

N/A

N/A
August 1 - August 30, 2022

12,578

$
43.28

N/A

N/A
September 1 - September 30, 2022

37,911

$
44.38

N/A

N/A
Total

73,694

$
43.13

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2023:


Fiscal period	Total Number of Units Repurchased	Average Price Paid per Unit		Total Number of Units Repurchased as Part of Publicly Announced Plans or Programs	Maximum Number of Units that May Yet Be Repurchased Under Plans or Programs (1)
July 1 – July 31, 2023	12,505	$	35.52	N/A	N/A
August 1 – August 31, 2023	26,289	$	34.99	N/A	N/A
September 1 – September 30, 2023	11,926	$	33.77	N/A	N/A
Total	50,720	$	34.83

(1)

The terms of the AIR Operating Partnership’s Partnership Agreement do not provide for a maximum number of ~~units~~OP Units that may be repurchased, and other than the express terms of its Partnership Agreement, the AIR Operating Partnership has no publicly announced plans or programs of repurchase. However, for AIR to repurchase shares of its Common Stock, the AIR Operating Partnership must make a concurrent repurchase of its OP Units held by AIR at a price per unit that is equal to the price per share AIR pays for its Common Stock.

Dividend and Distribution Payments

As a REIT, AIR is required to distribute annually to holders of its Common Stock at least 90% of its “real estate investment trust taxable income,” which, as defined by the Code and United States Department of Treasury regulations, is generally equivalent to net taxable ordinary income. Our credit ~~agreements~~agreement includes customary covenants, including a restriction on dividends and distributions and other restricted payments, but permits dividends and distributions during any four consecutive fiscal quarters in an aggregate amount of up to 95% of AIR’s FFO for such period, subject to certain non-cash adjustments, or such amount as may be necessary to maintain AIR’s REIT status.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following exhibits are filed with this report:


EXHIBIT NO.						DESCRIPTION

3.1						Amended and Restated Charter of Apartment Income REIT Corp. (Exhibit 3.1 to AIR’s Current Report on Form 8-K dated ~~December 15, 2020,~~September 22, 2023, is incorporated herein by this reference)

3.2						Amended and Restated Bylaws of Apartment Income REIT Corp. (Exhibit ~~3.4~~3.1 to AIR’s Current Report on Form 8-K dated ~~December 15, 2020,~~May 22, 2023, is incorporated herein by this reference)

10.1						Seventh Amended and Restated Partnership Agreement of Apartment Income REIT, L.P. (Exhibit 10.1 to AIR’s Quarterly Report on Form 10-Q dated May 4, 2022, is incorporated herein by this reference)

31.1						Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Apartment Income REIT Corp.

31.2						Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Apartment Income REIT Corp.

31.3						Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – the AIR Operating Partnership

31.4						Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – the AIR Operating Partnership

32.1						Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Apartment Income REIT Corp.

32.2						Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – the AIR Operating Partnership

101						The following materials from AIR’s and the AIR Operating Partnership’s combined Quarterly Report on Form 10-Q for the quarterly period ended September 30, ~~2022,~~2023, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) condensed consolidated balance sheets; (ii) condensed consolidated statements of operations; (iii) condensed consolidated statements of comprehensive income; (iv) condensed consolidated statements of equity and partners’ capital; (v) condensed consolidated statements of cash flows; and (vi) notes to condensed consolidated financial statements.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	APARTMENT INCOME REIT CORP.

	~~APARTMENT INCOME REIT CORP.~~By:	/s/ Molly H.N. Syke
		Molly H.N. Syke
	~~By:~~	~~/s/ Paul Beldin~~
~~Paul Beldin~~
~~Executive~~ Vice President and Chief ~~Financial~~Accounting Officer
~~(principal financial and accounting officer)~~




	APARTMENT INCOME REIT, L.P.

	By:	AIR-GP, Inc., its General Partner

	By:	/s/ ~~Paul Beldin~~Molly H.N. Syke
		~~Paul Beldin~~Molly H.N. Syke
		~~Executive~~ Vice President and Chief ~~Financial~~Accounting Officer
		~~(principal financial and accounting officer)~~
Date: November 3, 2023

~~Date: November 4, 2022~~


Maryland (Apartment Income REIT Corp.)		84-1299717
Delaware (Apartment Income REIT, L.P.)		84-1275621
(State or other jurisdiction of	~~(I.R.S. Employer~~
incorporation or organization)	(I.R.S. Employer Identification No.)

4582 South Ulster Street,, Suite 1700
Denver,, Colorado		80237
(Address of principal executive offices)		(Zip Code)


	PART I. FINANCIAL INFORMATION	Page
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)
	Apartment Income REIT Corp.:
	Condensed Consolidated Balance Sheets	34
	Condensed Consolidated Statements of Operations	45
	Condensed Consolidated Statements of Comprehensive Income (Loss)	56
	Condensed Consolidated Statements of Equity	67
	Condensed Consolidated Statements of Cash Flows	89
	Apartment Income REIT, L.P.:
	Condensed Consolidated Balance Sheets	910
	Condensed Consolidated Statements of Operations	1011
	Condensed Consolidated Statements of Comprehensive Income (Loss)	1112
	Condensed Consolidated Statements of Partners’ Capital	1213
	Condensed Consolidated Statements of Cash Flows	1415
	Notes to the Condensed Consolidated Financial Statements of Apartment Income REIT Corp. and Apartment Income REIT, L.P.:	1516
	Note 1 — Basis of Presentation and Organization	1516
	Note 2 — Summary of Significant Accounting Policies	1617
	Note 3 — Significant Transactions	17
	Note 4 — Leases	1819
	Note 5 — Debt	1920
	Note 6 — Investment in Joint Ventures	22
	Note 7 — Commitments and Contingencies	1923
	Note 78 — Earnings and Dividends per Share and per Unit	2024
	Note 89 — Fair Value Measurements	2125
	Note 910 — Derivative Financial Instruments and Hedging Activities	26
	Note 11 — Variable Interest Entities	21
	Note 1012 — Business Segments	2227

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2530
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4045
ITEM 4.	CONTROLS AND PROCEDURES	4045
	PART II. OTHER INFORMATION
ITEM 1A.	RISK FACTORS	4147
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES	4147
ITEM 6.5.	~~EXHIBITS~~OTHER INFORMATION	4347
~~Signatures~~ITEM 6.	EXHIBITS	4448
Signatures		50


	September 30,			December 31,
	2022			2021
ASSETS
Buildings and improvements	$	6,742,347		$	5,720,267
Land		1,296,223			1,164,814
Total real estate		8,038,570			6,885,081
Accumulated depreciation		(2,370,792	)		(2,284,793	)
Net real estate		5,667,778			4,600,288
Cash and cash equivalents		87,732			67,320
Restricted cash		26,914			25,441
Note receivable from Aimco		—			534,127
Leased real estate assets		—			466,355
Goodwill		32,286			32,286
Other assets, net		779,205			568,051
Assets held for sale		128,538			146,492
Total assets	$	6,722,453		$	6,440,360

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	2,019,417		$	2,294,739
Term loans, net		796,334			1,144,547
Revolving credit facility borrowings		479,000			304,000
Unsecured notes payable, net		397,417			—
Total indebtedness		3,692,168			3,743,286
Accrued liabilities and other		758,441			592,774
Liabilities related to assets held for sale		472			85,775
Total liabilities		4,451,081			4,421,835

Commitments and contingencies (Note 6)

Preferred noncontrolling interests in AIR Operating Partnership		79,330			79,370

Equity:
Perpetual preferred stock		2,000			2,129
Common Stock, $0.01 par value, 1,021,175,000 shares authorized at September 30, 2022 and December 31, 2021, and 152,993,448 and 156,998,367 shares issued/outstanding at September 30, 2022 and December 31, 2021, respectively		1,530			1,570
Additional paid-in capital		3,583,111			3,763,105
Accumulated other comprehensive income		45,948			—
Distributions in excess of earnings		(1,589,409	)		(1,953,779	)
Total AIR equity		2,043,180			1,813,025
Noncontrolling interests in consolidated real estate partnerships		(76,200	)		(70,883	)
Common noncontrolling interests in AIR Operating Partnership		225,062			197,013
Total equity		2,192,042			1,939,155
Total liabilities, preferred noncontrolling interests in AIR Operating Partnership, and equity	$	6,722,453		$	6,440,360


	September 30, 2023		December 31, 2022
ASSETS
Buildings and improvements	$	6,290,960	$	6,784,965
Land	1,285,398		1,291,429
Total real estate	7,576,358		8,076,394
Accumulated depreciation	(2,173,273)		(2,449,883)
Net real estate	5,403,085		5,626,511
Cash and cash equivalents	106,630		95,797
Restricted cash	27,540		205,608
Goodwill	32,286		32,286
Investment in unconsolidated real estate partnerships	352,096		41,860
Other assets, net	477,612		549,821
Total assets	$	6,399,249	$	6,551,883

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	2,231,238	$	1,985,430
Term loans, net	473,486		796,713
Revolving credit facility borrowings	25,750		462,000
Unsecured notes payable, net	397,760		397,486
Total indebtedness	3,128,234		3,641,629
Accrued liabilities and other	483,147		513,805
Total liabilities	3,611,381		4,155,434

Commitments and contingencies (Note 7)

Preferred noncontrolling interests in AIR Operating Partnership	77,140		77,143

Equity:
Perpetual Preferred Stock	2,000		2,000
Common Stock, $0.01 par value, 1,021,175,000 shares authorized at September 30, 2023 and December 31, 2022, and 146,973,055 and 149,086,548 shares issued/outstanding at September 30, 2023 and December 31, 2022, respectively	1,470		1,491
Additional paid-in capital	3,355,316		3,436,635
Accumulated other comprehensive income	24,794		43,562
Distributions in excess of earnings	(876,116)		(1,327,271)
Total AIR equity	2,507,464		2,156,417
Noncontrolling interests in consolidated real estate partnerships	(83,110)		(78,785)
Common noncontrolling interests in AIR Operating Partnership	286,374		241,674
Total equity	2,710,728		2,319,306
Total liabilities, preferred noncontrolling interests in AIR Operating Partnership, and equity	$	6,399,249	$	6,551,883


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
REVENUES
Rental and other property revenues	$	194,244	$	198,413	$	616,659	$	558,686
Other revenues	3,063		2,458		7,018		7,163
Total revenues	197,307		200,871		623,677		565,849

EXPENSES
Property operating expenses	58,076		64,009		190,122		176,679
Property management expenses	7,899		7,241		23,318		21,594
Depreciation and amortization	79,023		90,445		263,949		253,650
General and administrative expenses	5,663		7,663		18,866		19,593

Other expenses, net	8,110		4,941		14,434		5,883
	158,771		174,299		510,689		477,399

Interest income	2,918		9,613		6,133		48,746
Interest expense	(22,888)		(32,656)		(96,629)		(80,790)
Loss on extinguishment of debt	—		—		(2,008)		(23,636)
Gain on dispositions and impairments of real estate	692,861		—		675,534		587,609
Gain on derivative instruments, net	14,070		—		23,322		—

Loss from unconsolidated real estate partnerships	(10,390)		(87)		(12,267)		(2,974)
Income before income tax expense	715,107		3,442		707,073		617,405
Income tax expense	(4,595)		(46)		(5,911)		(966)
Net income	710,512		3,396		701,162		616,439

Noncontrolling interests:
Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships	(2,525)		102		(3,894)		285
Net income attributable to preferred noncontrolling interests in AIR Operating Partnership	(1,570)		(1,602)		(4,710)		(4,807)
Net income attributable to common noncontrolling interests in AIR Operating Partnership	(42,386)		(137)		(41,245)		(37,053)
Net income attributable to noncontrolling interests	(46,481)		(1,637)		(49,849)		(41,575)
Net income attributable to AIR	664,031		1,759		651,313		574,864
Net income attributable to AIR preferred stockholders	(44)		(43)		(129)		(128)
Net (income) loss attributable to participating securities	(391)		44		(484)		(373)
Net income attributable to AIR common stockholders	$	663,596	$	1,760	$	650,700	$	574,363

Net income attributable to AIR common stockholders per share – basic	$	4.50	$	0.01	$	4.39	$	3.69
Net income attributable to AIR common stockholders per share – diluted	$	4.43	$	0.01	$	4.35	$	3.68

Weighted-average common shares outstanding – basic	147,474		153,811		148,372		155,488
Weighted-average common shares outstanding – diluted	150,045		154,057		150,692		157,440


☒x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Apartment Income REIT Corp.: Yes ~~Yes~~x ☒ No ☐ o						Apartment Income REIT, L.P.: Yes ~~Yes~~x ☒ No ☐ o


Apartment Income REIT Corp.: Yes ☐o No ☒ x						Apartment Income REIT, L.P.: Yes ☐o No ☒ x


	Perpetual Preferred Stock				Common Stock									Accumulated								Noncontrolling Interests in			Common Noncontrolling Interests in
	Shares Issued		Amount		Shares Issued			Amount			Additional Paid- in Capital			Other Comprehensive Income		Distributions in Excess of Earnings			Total AIR Equity			Consolidated Real Estate Partnerships			AIR Operating Partnership			Total Equity
Balances at June 30, 2021		20	$	2,000		156,856,952		$	1,569		$	3,773,173		$	—	$	(2,197,843	)	$	1,578,899		$	(67,531	)	$	60,388		$	1,571,756
Issuance costs		—		—		—			—			(31	)		—		—			(31	)		—			—			(31	)
Redemption of AIR Operating Partnership units		—		—		—			—			—			—		—			—			—			(425	)		(425	)
Conversion of AIR Operating Partnership units		—		—		125,621			1			6,282			—		—			6,283			—			(6,283	)		—
Amortization of share-based compensation cost		—		—		—			—			409			—		—			409			—			992			1,401
Effect of changes in ownership of consolidated entities		—		—		—			—			(5,423	)		—		—			(5,423	)		—			5,653			230
Contributions from noncontrolling interests in consolidated real estate partnerships		—		—		—			—			—			—		—			—			4,128			—			4,128
Net income (loss)		—		—		—			—			—			—		9,378			9,378			(785	)		475			9,068
Common Stock dividends		—		—		—			—			—			—		(69,051	)		(69,051	)		—			—			(69,051	)
Preferred Stock dividends		—		—		—			—			—			—		(43	)		(43	)		—			—			(43	)
Distributions to noncontrolling interests		—		—		—			—			—			—		—			—			(3,910	)		(3,481	)		(7,391	)
Other, net		—		—		969			—			(474	)		—		(3	)		(477	)		—			(230	)		(707	)
Balances at September 30, 2021		20	$	2,000		156,983,542		$	1,570		$	3,773,936		$	—	$	(2,257,562	)	$	1,519,944		$	(68,098	)	$	57,089		$	1,508,935

Balances at June 30, 2022		20	$	2,000		154,187,241		$	1,542		$	3,636,906		$	13,750	$	(1,521,749	)	$	2,132,449		$	(70,609	)	$	226,985		$	2,288,825
Redemption of AIR Operating Partnership units		—		—		—			—			—			—		—			—			—			(3,178	)		(3,178	)
Repurchase of Common Stock, net		—		—		(1,195,690	)		(12	)		(46,699	)		—		—			(46,711	)		—			—			(46,711	)
Amortization of share-based compensation cost		—		—		—			—			878			—		—			878			—			943			1,821
Effect of changes in ownership of consolidated entities		—		—		—			—			(2,140	)		—		—			(2,140	)		—			2,140			—
Purchase of noncontrolling interests in consolidated real estate partnerships		—		—		—			—			(5,529	)		—		—			(5,529	)		120			—			(5,409	)
Contributions from noncontrolling interests in consolidated real estate partnerships		—		—		—			—			—			—		—			—			529			—			529
Change in accumulated other comprehensive income		—		—		—			—			—			32,198		—			32,198			—			2,742			34,940
Net income (loss)		—		—		—			—			—			—		1,759			1,759			(102	)		137			1,794
Common Stock dividends		—		—		—			—			—			—		(69,377	)		(69,377	)		—			—			(69,377	)
Distributions to noncontrolling interests		—		—		—			—			—			—		—			—			(6,226	)		(4,472	)		(10,698	)
Other, net		—		—		1,897						(305	)		—		(42	)		(347	)		88			(235	)		(494	)
Balances at September 30, 2022		20	$	2,000		152,993,448		$	1,530		$	3,583,111		$	45,948	$	(1,589,409	)	$	2,043,180		$	(76,200	)	$	225,062		$	2,192,042


	Nine Months Ended September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	701,162	$	616,439
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	263,949		253,650
Gain on dispositions and impairments of real estate	(675,534)		(587,609)
Loss on extinguishment of debt	2,008		23,636


Income tax expense	5,911		966
Other, net	4,308		6,890
Net changes in operating assets and operating liabilities	(55)		37,484
Net cash provided by operating activities	301,749		351,456
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate	(339,696)		(858,815)
Capital expenditures	(140,855)		(151,115)
Contribution to unconsolidated joint ventures	(51,836)		—
Proceeds from dispositions of real estate	52,066		759,227

Distributions from unconsolidated joint ventures	207,137		—

Proceeds from repayment of note receivable	—		534,127

Other investing activities, net	3,194		(30,500)
Net cash (used in) provided by investing activities	(269,990)		252,924
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on non-recourse property debt	(111,699)		(361,056)
Proceeds from non-recourse property debt	1,005,920		—

Repayment of term loan	(325,000)		(350,000)
Net (repayments of) borrowings on revolving credit facility	(436,250)		176,205
Proceeds from the issuance of unsecured notes payable	—		400,000
Repurchases of Common Stock	(77,782)		(171,711)


Payment of dividends to holders of Common Stock	(200,137)		(210,377)
Payment of distributions to noncontrolling interests	(23,524)		(18,262)




Other financing activities, net	(30,522)		(47,294)
Net cash used in financing activities	(198,994)		(582,495)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(167,235)		21,885
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	301,405		92,761
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	134,170	$	114,646


	Preferred Units		General Partner and Special Limited Partner			Limited Partners			Partners’ Capital Attributable to the AIR Operating Partnership			Noncontrolling Interests in Consolidated Real Estate Partnerships			Total Partners’ Capital
Balances at June 30, 2021	$	2,000	$	1,576,899		$	60,388		$	1,639,287		$	(67,531	)	$	1,571,756
Issuance costs		—		(31	)		—			(31	)		—			(31	)
Redemption of common partnership units		—		—			(425	)		(425	)		—			(425	)
Conversion of common partnership units		—		6,283			(6,283	)		—			—			—
Amortization of share-based compensation cost		—		409			992			1,401			—			1,401
Effect of changes in ownership of consolidated entities		—		(5,423	)		5,653			230			—			230
Contributions from noncontrolling interests in consolidated real estate partnerships		—		—			—			—			4,128			4,128
Net income (loss)		—		9,378			475			9,853			(785	)		9,068
Distributions to common unitholders		—		(69,051	)		(3,481	)		(72,532	)		—			(72,532	)
Distributions to preferred unitholders		—		(43	)		—			(43	)		—			(43	)
Distributions to noncontrolling interests		—		—			—			—			(3,910	)		(3,910	)
Other, net		—		(477	)		(230	)		(707	)		—			(707	)
Balances at September 30, 2021	$	2,000	$	1,517,944		$	57,089		$	1,577,033		$	(68,098	)	$	1,508,935

Balances at June 30, 2022	$	2,000	$	2,130,449		$	226,985		$	2,359,434		$	(70,609	)	$	2,288,825
Redemption of common partnership units		—		—			(3,178	)		(3,178	)		—			(3,178	)
Repurchase of common partnership units		—		(46,711	)		—			(46,711	)		—			(46,711	)
Amortization of share-based compensation cost		—		878			943			1,821			—			1,821
Effect of changes in ownership of consolidated entities		—		(2,140	)		2,140			—			—			—
Purchase of noncontrolling interests in consolidated real estate partnerships		—		(5,529	)		—			(5,529	)		120			(5,409	)
Contributions from noncontrolling interests in consolidated real estate partnerships		—		—			—			—			529			529
Change in accumulated other comprehensive income (loss)		—		32,198			2,742			34,940			—			34,940
Net income (loss)		—		1,759			137			1,896			(102	)		1,794
Distributions to common unitholders		—		(69,377	)		(4,472	)		(73,849	)		—			(73,849	)
Distributions to noncontrolling interests		—		—			—			—			(6,226	)		(6,226	)
Other, net		—		(347	)		(235	)		(582	)		88			(494	)
Balances at September 30, 2022	$	2,000	$	2,041,180		$	225,062		$	2,268,242		$	(76,200	)	$	2,192,042


	Preferred Units		General Partner and Special Limited Partner		Limited Partners		Partners' Capital Attributable to the AIR Operating Partnership		Noncontrolling Interests in Consolidated Real Estate Partnerships		Total Partners' Capital
Balances at June 30, 2022	$	2,000	$	2,130,449	$	226,985	$	2,359,434	$	(70,609)	$	2,288,825
Redemption of common partnership units	—		—		(3,178)		(3,178)		—		(3,178)
Repurchase of common partnership units	—		(46,711)		—		(46,711)		—		(46,711)
Amortization of share-based compensation cost	—		878		943		1,821		—		1,821
Effect of changes in ownership of consolidated entities	—		(2,140)		2,140		—		—		—
Purchase of noncontrolling interests in consolidated real estate partnerships	—		(5,529)		—		(5,529)		120		(5,409)
Contributions from noncontrolling interests in consolidated real estate partnerships	—		—		—		—		529		529
Change in accumulated other comprehensive income	—		32,198		2,742		34,940		—		34,940
Net income (loss)	—		1,759		137		1,896		(102)		1,794
Distributions to common unitholders	—		(69,377)		(4,472)		(73,849)		—		(73,849)
Distributions to noncontrolling interests	—		—		—		—		(6,226)		(6,226)
Other, net	—		(347)		(235)		(582)		88		(494)
Balances at September 30, 2022	$	2,000	$	2,041,180	$	225,062	$	2,268,242	$	(76,200)	$	2,192,042

Balances at June 30, 2023	$	2,000	$	1,997,465	$	249,512	$	2,248,977	$	(80,087)	$	2,168,890
Redemption of common partnership units	—		—		(1,745)		(1,745)		—		(1,745)
Repurchase of common partnership units	—		(77,782)		—		(77,782)		—		(77,782)

Amortization of share-based compensation cost	—		816		1,155		1,971		—		1,971
Effect of changes in ownership of consolidated entities	—		1,446		1,070		2,516		(1,397)		1,119

Contributions from noncontrolling interests in consolidated real estate partnerships	—		—		—		—		718		718
Change in accumulated other comprehensive loss	—		(14,549)		(1,873)		(16,422)		—		(16,422)
Net income	—		664,031		42,386		706,417		2,525		708,942
Distributions to common unitholders	—		(66,002)		(4,134)		(70,136)		—		(70,136)
Distributions to noncontrolling interests	—		—		—		—		(4,851)		(4,851)
Other, net	—		39		3		42		(18)		24
Balances at September 30, 2023	$	2,000	$	2,505,464	$	286,374	$	2,793,838	$	(83,110)	$	2,710,728


Balance at January 1, 2022	$	79,370
Preferred distributions		(4,823	)
Redemption of preferred units and other		(24	)
Net income allocated to preferred units		4,807
Balance at September 30, 2022	$	79,330


Balance at January 1, 2023	$	77,143
Preferred distributions	(4,710)
Redemption of preferred units and other	(3)
Net income allocated to preferred units	4,710
Balance at September 30, 2023	$	77,140


	Three Months Ended September 30, 2022			Nine Months Ended September 30, 2022				Three Months Ended September 30, 2023			Nine Months Ended September 30, 2023
Number of apartment communities		1			4		Number of apartment communities	2			3
Number of apartment homes		350			1,351		Number of apartment homes	620			1,115

Purchase price	$	173,000		$	640,067		Purchase price	$	154,500		$	452,500
Capitalized transaction costs		1,551			7,325		Capitalized transaction costs	1,270			6,739
Total consideration	$	174,551		$	647,392
Total consideration (1)							Total consideration (1)	$	155,770		$	459,239

Land	$	14,480		$	54,918		Land	$	19,226		$	118,564
Building and improvements		156,980			577,712		Building and improvements	130,937			318,364
Right-of-use lease asset		—			80,651
Intangible assets ~~(1)~~(2)		3,465			17,203		5,768			17,845
Lease liability		—			(80,651	)
Mark-to-market on debt assumed							Mark-to-market on debt assumed	—			7,370
Below-market lease liabilities ~~(1)~~(2)		(103	)		(613	)	(161)			(2,904)
Real estate tax liability assumed		(271	)		(1,828	)
Total consideration	$	174,551		$	647,392
Total consideration (1)							Total consideration (1)	$	155,770		$	459,239


2023 (remaining)	$	164,948
2024	379,399
2025	69,870
2026	11,740
2027	10,218
Thereafter	36,463
Total	$	672,638


2022 (remaining)	$	184,873
2023		440,389
2024		85,643
2025		11,264
2026		9,572
Thereafter		42,923
Total	$	774,664


	Outstanding Balance
	September 30, 2022			December 31, 2021
Secured debt:
Fixed-rate property debt due December 2022 to June 2032 (1)	$	1,940,158		$	2,217,256
Variable-rate property debt due October 2024 (2)		88,500			88,500
Total non-recourse property debt		2,028,658			2,305,756
Debt issuance costs, net of accumulated amortization		(9,241	)		(11,017	)
Total non-recourse property debt, net	$	2,019,417		$	2,294,739

Unsecured debt:
Term loans due December 2023 to April 2026 (2) (3)		800,000			1,150,000
Revolving credit facility borrowings due April 2025 (4)		479,000			304,000
4.58% Notes payable due June 2027 (5)		100,000			—
4.77% Notes payable due June 2029 (5)		100,000			—
4.84% Notes payable due June 2032 (5)		200,000			—
Total unsecured debt		1,679,000			1,454,000
Debt issuance costs, net of accumulated amortization		(6,249	)		(5,453	)
Total unsecured debt, net	$	1,672,751		$	1,448,547
Total indebtedness	$	3,692,168		$	3,743,286


	Virginia JV	Value-Add JV (1)	Core JV
Initial formation date	October 2021	June 2023	July 2023
AIR Ownership	20%	30%	53%
Outside Entities Ownership	80%	70%	47%
Number of Apartment Communities	3	1	11
Apartment Units	1,748	443	3,549


	September 30, 2023
	Virginia JV		Value-Add JV		Core JV
Total Third-Party Debt	$	395,000	$	94,105	$	799,164
AIR's Investment In Balance (1)	$	18,198	$	29,341	$	272,957


	As of September 30, 2023								As of December 31, 2022
	Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3
Interest rate option (1)	$	—	$	—	$	—	$	—	$	53,481	$	—	$	53,481	$	—
Interest rate swaps - pay-fixed, receive floating	$	29,898	$	—	$	29,898	$	—	$	32,222	$	—	$	32,222	$	—
Interest rate swaps - pay-floating, receive fixed	$	(3,035)	$	—	$	(3,035)	$	—	$	—	$	—	$	—	$	—
Interest rate swaps - forward starting	$	3,333	$	—	$	3,333	$	—	$	—	$	—	$	—	$	—
Treasury rate locks	$	—	$	—	$	—	$	—	$	319	$	—	$	319	$	—


	As of September 30, 2022								As of December 31, 2021
	Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3
Interest rate option	$	53,989	$	—	$	53,989	$	—	$	21,699	$	—	$	21,699	$	—
Interest rate swap asset	$	34,543	$	—	$	34,543	$	—	$	—	$	—	$	—	$	—


	Aimco	AIR
	Q4 2019 or 2019A	Q3 2022	Change
Residents
Average Household Income	$165,000	$251,000	52%
Median Household Income	$116,000	$170,000	47%
CSAT Score (out of 5)	4.30	4.33 (2021)	0.03
Kingsley Index (1)	4.09	4.05	(0.04)
Portfolio
Properties	124	80	(35%)
Apartment Homes	32,598	23,499	(28%)
Average Revenue per Apartment Home	$2,272	$2,711	19%
Redevelopment and Development ($M)	$230	$–	($230)
Mezzanine Investments ($M)	$280	$–	($280)
Low G&A
Net G&A as % of GAV	36 bps (per GSA)	<15 bps (at AIR Target)	-21 bps
Balance Sheet
Net Leverage / EBITDAre	7.6x	5.9x	(1.7x)
Refunding: Next 3-Years (% Total Debt)	23%	10%	(13%)
Repricing: Next 3-Years (% Total Debt)	23%	10%	(13%)
Unencumbered Properties ($B)	$2.4	$8.3	$5.9


	Three Months Ended September 30,				Historical Change						Change Attributable to Changes in Ownership						Change Excluding Changes in Ownership
(in thousands, except percentages)	2022		2021		$			%			$			%			$		%
Rental and other property revenues, before utility reimbursements:
Same Store	$	139,107	$	134,102	$	5,005			3.7	%	$	(7,157	)		(5.9	%)	$	12,162		9.6	%
Other Real Estate		30,258		5,558		24,700		nm				—			—	%		24,700	nm
Total		169,365		139,660		29,705			21.3	%		(7,157	)		(5.9	%)		36,862		27.2	%
Property operating expenses, net of utility reimbursements:
Same Store		35,632		36,883		(1,251	)		(3.4	%)		(1,286	)		(3.5	%)		35		0.1	%
Other Real Estate		10,606		2,963		7,643		nm				—			—	%		7,643	nm
Total		46,238		39,846		6,392			16.0	%		(1,286	)		(3.5	%)		7,678		19.5	%
Proportionate property net operating income:
Same Store		103,475		97,219		6,256			6.4	%		(5,871	)		(6.9	%)		12,127		13.3	%
Other Real Estate		19,652		2,595		17,057		nm				—			—	%		17,057	nm
Total	$	123,127	$	99,814	$	23,313			23.4	%	$	(5,871	)		(6.9	%)	$	29,184		30.3	%