(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, 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

—

—

—

—

—

—

—

—

—

(3,452
)

(3,452
)
Amortization of share-based compensation cost

—

—

—

—

1,890

—

—

1,890

—

860

2,750

Effect of changes in ownership of consolidated entities

—

—

—

—

(2,686
)

—

—

(2,686
)

—

2,686

—

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

4,325

—

4,325

Change in accumulated other comprehensive income

—

—

—

—

—

(783
)

—

(783
)

—

—

(783
)
Net income (loss)

—

—

—

—

—

—

376,178

376,178

(564
)

24,167

399,781

Common Stock dividends

—

—

—

—

—

—

(70,428
)

(70,428
)

—

—

(70,428
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(3,147
)

(4,447
)

(7,594
)
Other, net

(125
)

(129
)

84,456

1

148

—

(48
)

(28
)

112

—

84

Balances at March 31, 2022

20

$
2,000

157,082,823

$
1,571

$
3,762,457

$
(783
)

$
(1,648,077
)

$
2,117,168

$
(70,157
)

$
216,827

$
2,263,838

Balances at December 31, 2022

20

$
2,000

149,086,548

$
1,491

$
3,436,635

$
43,562

$
(1,327,271
)

$
2,156,417

$
(78,785
)

$
241,674

$
2,319,306

Issuance of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

22,383

22,383

Redemption of AIR Operating Partnership units

—

—

—

—

—

—

—

—

—

(10,529
)

(10,529
)
Amortization of share-based compensation cost

—

—

—

—

1,971

—

—

1,971

—

1,155

3,126

Effect of changes in ownership of consolidated entities

—

—

—

—

(6,102
)

—

—

(6,102
)

—

6,102

—

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

—

—

—

—

1,567

—

1,567

Change in accumulated other comprehensive income

—

—

—

—

—

(14,492
)

—

(14,492
)

—

(1,102
)

(15,594
)
Net (loss) income

—

—

—

—

—

—

(11,377
)

(11,377
)

685

(826
)

(11,518
)
Common Stock dividends

—

—

—

—

—

—

(66,939
)

(66,939
)

—

—

(66,939
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(2,485
)

(4,552
)

(7,037
)
Other, net

—

—

113,136

1

69

—

67

137

1

(1
)

137

Balances at March 31, 2023

20

$
2,000

149,199,684

$
1,492

$
3,432,573

$
29,070

$
(1,405,520
)

$
2,059,615

$
(79,017
)

$
254,304

$
2,234,902

(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, 2021

$
2,129

$
1,810,896

$
197,013

$
2,010,038

$
(70,883
)

$
1,939,155

Redemption of common partnership units

—

—

(3,452
)

(3,452
)

—

(3,452
)
Amortization of share-based compensation cost

—

1,890

860

2,750

—

2,750

Effect of changes in ownership of consolidated entities

—

(2,686
)

2,686

—

—

—

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

4,325

4,325

Change in other comprehensive loss

—

(783
)

—

(783
)

—

(783
)
Net income (loss)

—

376,178

24,167

400,345

(564
)

399,781

Distributions to common unitholders

—

(70,428
)

—

(70,428
)

—

(70,428
)
Distributions to noncontrolling interests

—

—

(4,447
)

(4,447
)

(3,147
)

(7,594
)
Other, net

(129
)

101

—

(28
)

112

84

Balances at March 31, 2022

$
2,000

$
2,115,168

$
216,827

$
2,333,995

$
(70,157
)

$
2,263,838

Balances at December 31, 2022

$
2,000

$
2,154,417

$
241,674

$
2,398,091

$
(78,785
)

$
2,319,306

Redemption of common partnership units

—

—

(10,529
)

(10,529
)

—

(10,529
)
Issuance of common partnership units

—

—

22,383

22,383

—

22,383

Amortization of share-based compensation cost

—

1,971

1,155

3,126

—

3,126

Effect of changes in ownership of consolidated entities

—

(6,102
)

6,102

—

—

—

Contributions from noncontrolling interests in consolidated real estate partnerships

—

—

—

—

1,567

1,567

Change in other comprehensive loss

—

(14,492
)

(1,102
)

(15,594
)

—

(15,594
)
Net (loss) income

—

(11,377
)

(826
)

(12,203
)

685

(11,518
)
Distributions to common unitholders

—

(66,939
)

(4,552
)

(71,491
)

—

(71,491
)
Distributions to noncontrolling interests

—

—

—

—

(2,485
)

(2,485
)
Other, net

—

137

(1
)

136

1

137

Balances at March 31, 2023

$
2,000

$
2,057,615

$
254,304

$
2,313,919

$
(79,017
)

$
2,234,902

Table of Contents

AIR

Aimco

Q1 2023

Q4 2019

Change
Residents

Average Household Income

$246,000

$165,000

49%
Median Household Income

$170,000

$116,000

47%
CSAT Score (1)

4.29

4.30

(0.01)
Resident Retention

61.9%

56.8%

5.1%
Portfolio

Properties

75

124

(40%)
Apartment Homes

22,696

32,598

(30%)
Average Revenue per Apartment Home

$2,766

$2,272

22%
Redevelopment and Development ($M)

$—

$230

($230)
Mezzanine Investments ($M)

$—

$280

($280)

~~(1)~~

~~Customer satisfaction (“CSAT”), as graded on a scale from zero to five.~~

~~Over the same period, we have improved AIR’s portfolio by reducing our exposure to regulatory risk. We have achieved this through property sales in the New York City, Chicago, Seattle,~~

at market NOI cap rates and California markets, as well as through a strategic joint venture in California. This has allowed AIR to reallocate capital into states such as Florida, with a more predictable rule of law, and into submarkets such as Miami-Dade and Broward counties with higher growth.

As a paired trade investor, AIR is agnostic to market changes insofar as we buy and sell properties in the same market conditions, with focus on gaining an accretive “spread.” As market conditions change, AIR adjusts target returns and spreads to reflect our changed 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 unlevered IRRs, and to reinvest capital in ~~the long-term.~~

~~As part of our portfolio strategy, we seek~~acquisition properties which generally enjoy accelerated growth in profitability relative to sell communities with lower expected free cash flow internal rates of return and reinvest the proceeds from such sales in accretive uses such as capital enhancements (where we expect sustained incremental NOI as a result of the investment providing investment returns averaging greater than a 10% IRR), share repurchases, and selective acquisitions of stabilized communities with projected free cash flow internal rates of return more than 200-basis points higher than expected from the communities being sold. When the cost of capitalgeneral market rates.

AIR’s business is ~~favorable, we will look~~ to ~~grow through the acquisition of stabilized apartment communities that we believe we can operate more efficiently than their previous owners through application of~~acquire properties, deploy the AIR ~~Edge. Through this disciplined approach to capital allocation, we expect to increase the quality~~Edge, and ~~expected growth rate of our portfolio.~~

~~Transactions~~

~~Acquisitions~~

As previously announced, in January, 2023 AIR acquired for $298 million, Southgate Towers, a 495-unit luxury apartment community with 29,000 square feet of commercial space located in the South Beach neighborhood of Miami Beach. AIR’s presence in South Beach, a submarket with limited competitive supply, now comprises 1,630 apartment homes between Flamingo Towers and Southgate Towers. This transaction demonstrates AIR’s use of distinctive acquisition currencies including the cash proceeds from the fourth quarter 2022 sale of our New England portfolio, the assumption of $101.2 million of property debt maturing in 2036 with interest at 4.15%, and the issuance of $22.4 million of OP Units. The acquisition is expected to provide an unlevered IRRgenerate returns 200-basis points, or higher, than ~~our~~AIR’s cost of capital, ~~driven~~as measured by unlevered IRR. “Paired trades” make agnostic to changes in market conditions insofar as AIR is buying and selling at roughly the ~~implementation~~same time. The benefits – enhanced total NOI growth and higher FFO – are realized primarily in years two through four as it requires more than one turn of the rent roll to implement AIR’s menu of high credit standards, measured customer satisfaction, customer retention, lowered operating costs, and completion of planned capital improvements.

Joint Venture Transactions

As previously announced, AIR ~~Edge.~~

~~Dispositions~~

~~During~~formed two joint ventures in the ~~three months ended March 31,~~quarter, the first of which closed on June 30, 2023 ~~we did not~~through the sale of a 70% interest in Huntington Gateway (the “Value-Add JV”), and the second of which closed on July 17, 2023 through the sale of a 47% interest in eight of ten properties (the “Core JV”). The remaining two properties within the Core JV are expected to close before year-end. AIR now has four separate joint venture partnerships, each (i) with world-class investors interested in doing more with AIR, (ii) paying asset and property management fees, and (iii) providing substantial opportunity to earn “promotes.” For AIR, joint ventures are a strategic source of attractively priced capital, and provide AIR the resources to pursue a broader opportunity set to pursue growth. AIR expects to sell ~~any apartment communities.~~

~~Balance Sheet~~

~~We seek~~further interests of the existing joint ventures to increase expected returns on its retained investment, and to make available additional capital to invest in future AIR Edge properties with higher returns.

California JV

Washington, D.C. JV

Core JV

Value-Add JV

September 2020

October 2021

July 2023

June 2023

Gross Asset Value @ 100%

$2.4B

$0.5B

$1.1B

$0.1B

AIR / JV Partner Ownership

61% / 39%

20% / 80%

53% / 47%

30% / 70% (1)

Number of Properties

Units

4,051

1,748

3,093

443

Average Revenue per Unit

$3,389

$2,070

$2,534

$2,307

(1)Legal ownership sold is 70%, while AIR will receive 50% of JV cash flow during the hold period.

Dispositions

AIR is nearing completion of its strategic exit from New York City through:

•The sale of two properties with 62 apartment homes to a developer for gross proceeds of $33.2 million and a non-cash GAAP loss of $8.2 million; and

•Signing a contract to sell its remaining New York City property, at a price which resulted in a non-cash GAAP write-down of $15.4 million.

In aggregate since the Separation, AIR has recognized non-cash GAAP gains of $1.5 billion on $2.2 billion of dispositions.

Balance Sheet and Liquidity

To lower its cost of capital and enhance 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~~AIR targets Net Leverage to ~~Adjusted~~ EBITDAre ~~ratio~~ between 5.0x ~~and~~to 6.0x ~~but anticipate the actual ratio will vary based~~with focus on ~~the timing of transactions.~~fixed-rate, long-term debt with well laddered maturities. We maintain ~~financial~~ flexibility through (i) ample unused and available credit, (ii) holding properties with substantial value unencumbered by property debt, and (iii) maintaining an investment grade ~~rating,~~rating.

Balance sheet highlights, pro forma for the announced joint ventures, include:

•Reduction in Net Leverage to EBITDAre to 5.9x, within AIR’s targeted range, and extension of its weighted-average maturities by more than seven months;

•

~~Table of Contents~~

~~using partners’ capital when it enhances financial returns or reduces investment risk. We seek to minimize refunding and~~96% fixed-rate leverage with limited repricing ~~risk.~~

~~Components of Leverage~~

Our leverage includes AIR’s share of long-term, non-recourse property debt secured by our apartment communities, together with outstanding borrowings under our revolving credit facility, term loans, unsecured notes payable, and preferred equity.

During the three months ended March 31, 2023, and on a leverage neutral basis, AIR borrowed $320 million using 10-year fixed rate financing, bearing interest at 4.9%. We used the proceeds to refinance a floating-rate loan and to reduce by $230 million borrowings on our revolving credit facility. This transaction reduced floating-rate debt not subject to interest rate caps or swaps to $120 million, 4% of outstanding leverage, net of cash on-hand, and increased our weighted-average maturity by nine months. As a result of these transactions, AIR has no debt maturingrisk before the second quarter of ~~2025.~~2025;

•Available liquidity of $2.3 billion and access to more potentially secured by $5.8 billion in unencumbered property value; and

~~Please see~~•Limited refunding risk with the ~~Liquidity~~ability to fund all maturities through 2027 from cash on hand, 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 and other short-term purposes, and~~a 10-year commitment to secure letters of credit. As of March 31, 2023, our share of cash and restricted cash, excluding amounts related to tenant security deposits, was $97.5 million (invested in interests in federal government obligations) and we had the capacity to borrow up to $750.7 million on our $1 billion revolving credit facility.

~~In April 2023, we established a secured credit facility with Fannie Mae that provides for up to~~make $1 billion of ~~committed~~ property ~~level financing, on an as needed basis. This facility has minimal upfront costs, a~~loans with up to 10-year ~~duration, allows for the removal and substitution~~maturities.

Table of properties, and is priced based on the Fannie Mae grid, which usually and today is lower than public and private bond pricing. After consideration of the secured facility, total liquidity is approximately $1.8 billion.Contents

We manage our financial flexibility by maintaining investment grade ratings that enhance access to debt capital markets, and holding communities unencumbered by property debt that provide access to secured lenders and, in particular, the attractive availability and pricing of Fannie Mae and Freddy Mac. As of March 31, 2023, we held apartment communities unencumbered by debt with an estimated fair market value of approximately $7.1 billion.

Dividend and Equity Capital Markets

On ~~April~~July 25, 2023, ~~our~~the AIR Board of Directors declared a quarterly cash dividend of $0.45 per share of Common ~~Stock. This amount is~~Stock, payable on ~~May 30,~~August 29, 2023 to shareholders of record on ~~May 19,~~August 18, 2023. ~~In setting AIR’s 2023 dividend, our~~The Board of Directors targeted a 75% payout ratio on Pro forma FFO in setting the dividend ~~level of approximately 75% of full year FFO per share.~~

We expect that the after-tax dividend will benefit from AIR's refreshed tax basis. In 2022, approximately 86% of our dividend was taxable at capital gain rates, with the remainder taxable at ordinary income rates. We believe thefor 2023, which is also expected to have favorable tax characteristics due to AIR’s tax basis refreshed at the time of our dividend makes our stock more attractive to taxable investors, such as foreign investors, taxable individuals, and corporations, than dividends paid by peer REITs whose dividends are taxed at higher rates. For example, AIR’s dividend characteristics in 2022 compare favorably to a peer average of approximately 19% at capital gains rates (versus AIR at 86%); 71% at ordinary income rates (versus AIR at 14%), and 10% treated as return of capital. As a result, an investor in AIR common shares would retain after tax approximately 39% more of its dividend than would be retained after tax by an investor in the ~~average of peer shares.~~

Separation from Aimco.

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.

~~Table of Contents~~

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. 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 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~~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 Built in 2023 Best Places to Work in Colorado, Los Angeles, Miami, and Washington, ~~DC.~~D.C. We take seriously our responsibility to care for our customers, our neighbors, and each other as teammates. We are grateful for these recognitions and consider them confirmation of our success.

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.

Financial Highlights

Net ~~(loss) income~~loss attributable to common stockholders per common share, on a dilutive basis ~~decreased $2.47~~was $0.01 and $0.09 for the three and six months ended ~~March 31,~~June 30, 2023, respectively, compared to net income attributable to common stockholders per common share on a diluted basis of $1.26 and $3.66 for the three and six months ended June 30, 2022, respectively, due primarily toto:

•Impairments recorded in the current year as discussed below as well as lower ~~gain~~gains on dispositions of real estate,

•Lower interest income from the note receivable from Aimco, which was repaid in the second and third quarters of 2022, and the associated $12.9 million prepayment penalty received from Aimco in connection with its partial repayment during the second quarter of 2022, and

•Higher interest expense due to higher interest rates and higher leverage; offset partially by ~~increased~~

Table of Contents

•Increased contribution from property ~~operations.~~operations, and

•Lower loss on extinguishment of debt.

Pro forma FFO per share was ~~$0.55~~$0.58 and $1.12 for the three and six months ended ~~March 31,~~June 30, 2023, respectively, compared to ~~$0.57~~$0.66 and $1.23 for the three and six months ended June 30, 2022, respectively, due primarily to anthe below factors. Before consideration of the impact from the Aimco note receivable contribution of $0.15 and $0.19 per share for the three and six months ended June 30, 2022, Pro forma FFO per share was $0.51 and $1.04, respectively.

• A decrease in interest income as noted above,

•An increase in interest expense ~~and a decrease in interest income,~~as noted above; offset partially by ~~increased~~

•Increased contribution in property operations.

Results of Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2023, Compared to 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 have reached a stabilized level of operations. Our Other Real Estate segment includes four properties acquired in 2022, four properties previously leased to Aimco, one property acquired in 2023, and ~~three communities~~one community that ~~do not meet the criteria~~is expected to be ~~classified as Same Store.~~

sold.

As of ~~March 31,~~June 30, 2023, our Same Store segment included 63 apartment communities with 22,794 apartment homes and our Other Real Estate segment included 1210 apartment communities with ~~3,003~~2,945 apartment homes.

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.

~~Table of Contents~~

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.

Table of Contents

Please see Note 11 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 March 31,

Historical Change

Change Attributable to Changes in Ownership

Change Excluding Changes in Ownership

(dollars in thousands)
2023

2022

$

%

$

%

$

%

Rental and other property revenues, before utility reimbursements:

Same Store
$
157,902

$
143,330

$
14,572

10.2
%

$
121

0.1
%

$
14,451

10.1
%
Other Real Estate

30,075

1,436

28,639

nm

—

—
%

28,639

nm

Total

187,977

144,766

43,211

29.8
%

121

0.1
%

43,090

29.7
%
Property operating expenses, net of utility reimbursements:

Same Store

41,247

39,887

1,360

3.4
%

39

0.1
%

1,321

3.3
%
Other Real Estate

11,457

1,113

10,344

nm

—

—
%

10,344

nm

Total

52,704

41,000

11,704

28.5
%

39

0.1
%

11,665

28.4
%
Proportionate property net operating income:

Same Store

116,655

103,443

13,212

12.8
%

82

0.1
%

13,130

12.7
%
Other Real Estate

18,618

323

18,295

nm

—

—
%

18,295

nm

Total
$
135,273

$
103,766

$
31,507

30.4
%

$
82

0.1
%

$
31,425

30.3
%


	Three Months Ended				Historical Change				Change Attributable to Changes in Ownership				Change Excluding Changes in Ownership
(dollars in thousands)	June 30, 2023		June 30, 2022		$		%		$		%		$		%
Rental and other property revenues, before utility reimbursements:
Same Store	$	160,180	$	147,075	$	13,105	8.9	%	$	233	0.1	%	$	12,872	8.8	%
Other Real Estate	29,684		3,718		25,966		nm		—		—	%	25,966		nm
Total	189,864		150,793		39,071		25.9	%	233		0.1	%	38,838		25.8	%
Property operating expenses, net of utility reimbursements:
Same Store	41,330		39,667		1,663		4.2	%	65		0.1	%	1,598		4.1	%
Other Real Estate	10,640		1,989		8,651		nm		—		—	%	8,651		nm
Total	51,970		41,656		10,314		24.8	%	65		0.1	%	10,249		24.7	%
Proportionate property net operating income:
Same Store	118,850		107,408		11,442		10.7	%	168		0.1	%	11,274		10.6	%
Other Real Estate	19,044		1,729		17,315		nm		—		—	%	17,315		nm
Total	$	137,894	$	109,137	$	28,757	26.3	%	$	168	0.1	%	$	28,589	26.2	%

For the three months ended ~~March 31,~~June 30, 2023, compared to 2022, excluding changes attributable to changes in ownership, our Same Store proportionate property NOI increased by ~~$13.1 million, or 12.7%~~10.6%. This increase was attributable primarily to a ~~$14.5~~$12.9 million, or ~~10.1%~~8.8%, increase in rental and other property revenues due to ~~a 10.0%~~an 8.8% increase in residential rental ~~rates.~~

rates, and a 1.0% increase in late fees and other, partially offset by a 1.1% decrease in ADO.

Other Real Estate proportionate property NOI for the three months ended ~~March 31,~~June 30, 2023, compared to 2022, increased by ~~$18.3~~$17.3 million, due primarily to contribution from one property acquired in 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.


	Six Months Ended		Historical Change			Change Attributable to Changes in Ownership				Change Excluding Changes in Ownership
(dollars in thousands)	June 30, 2023	June 30, 2022	$	%		$		%		$		%
Rental and other property revenues, before utility reimbursements:
Same Store	$318,082	$290,405	$27,677	9.5	%	$	460	0.1	%	$	27,217	9.4	%
Other Real Estate	59,501	4,952	54,549	nm		—		—	%	54,549		nm
Total	377,583	295,357	82,226	27.8	%	460		0.1	%	81,766		27.7	%
Property operating expenses, net of utility reimbursements:
Same Store	82,577	79,553	3,024	3.8	%	95		0.1	%	2,929		3.7	%
Other Real Estate	21,911	2,928	18,983	nm		—		—	%	18,983		nm
Total	104,488	82,481	22,007	26.7	%	95		0.1	%	21,912		26.6	%
Proportionate property net operating income:
Same Store	235,505	210,852	24,653	11.7	%	365		0.1	%	24,288		11.6	%
Other Real Estate	37,590	2,024	35,566	nm		—		—	%	35,566		nm
Total	$273,095	$212,876	$60,219	28.3	%	$	365	0.1	%	$	59,854	28.2	%

For the six months ended June 30, 2023, compared to 2022, excluding changes attributable to changes in ownership, our Same Store proportionate property NOI increased by 11.6%. This increase was attributable primarily to a $27.2 million, or 9.4%, increase in rental and other property revenues due to a 9.4% increase in residential rental rates, and a 0.6% increase in late fees and other, partially offset by a 0.7% decrease in ADO.

Other Real Estate proportionate property NOI for the six months ended June 30, 2023, compared to 2022, increased by $35.6 million, due primarily to contribution from one property acquired in 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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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 ~~March 31,~~June 30, 2023, compared to 2022, non-segment real estate operations decreased by ~~$14.1~~$6.6 million due primarily to ~~$9.8~~$6.7 million of lower NOI attributable to sold properties.

For the six months ended June 30, 2023, compared to 2022, non-segment real estate operations decreased by $20.6 million, due primarily to $16.4 million of lower NOI attributable to sold properties, a ~~$3.5~~$2.6 million increase in casualty losses, and a ~~$0.9~~$1.6 million increase in property management expenses, net.

Depreciation and Amortization

For the three and six months ended ~~March 31,~~June 30, 2023, compared to 2022, depreciation and amortization expense increased ~~$11.1~~$10.6 million, or ~~13.1%~~13.5%, and $21.7 million, or 13.3%, respectively, due primarily to properties acquired subsequent to ~~March 31,~~June 30, 2022, offset partially by the reduction in depreciation associated with properties sold.

~~General and Administrative Expenses~~

~~For the three months ended March 31, 2023, compared to 2022, general and administrative~~

Other expenses ~~increased $0.6 million due primarily to higher personnel costs.~~

~~Other Expenses, Net~~

(income), net

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

~~For~~

Other expenses (income), net, decreased $5.6 million, from income of $3.1 million for the three months ended ~~March 31,~~June 30, 2022, to expense of $2.5 million for the three months ended June 30, 2023, due primarily to fees earned in connection with the closing of the Value-Add JV, and services provided under the transition services agreement for the 2022 sale of the New England portfolio, offset partially by the 2022 gain on the sale of a cost basis investment in the prior year.

For the six months ended June 30, 2023, compared to 2022, other ~~expenses,~~expense, net, increased ~~$1.8~~$5.2 million, due primarily to ~~ground lease expense at~~services provided under the transition services agreement for the 2022 sale of the New England portfolio, offset partially by the 2022 gain on the sale of a ~~property acquired~~cost basis investment in ~~2022.~~

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the prior year.

Interest Income

For the three and six months ended ~~March 31,~~June 30, 2023, compared to 2022, interest income decreased by ~~$12.0~~$24.1 million, or, 94.1%, and $36.1 million, or 92.3%, respectively, due primarily to lower interest income associated with our note receivable from Aimco, which was repaid in the second and third quarters of 2022, the $12.9 million prepayment penalty received from Aimco in connection with its partial repayment during the ~~third~~second quarter of 2022, and 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 from the New England portfolio seller financing note.~~

Interest Expense

For the three and six months ended ~~March 31,~~June 30, 2023, compared to 2022, interest expense increased ~~$14.1~~$11.5 million, or 44.3%, and $25.6 million, or 53.2%, respectively, due primarily to higher rates on our term loans and revolving credit facility, interest expense associated with our senior unsecured notes issued in the second quarter of 2022, and higher outstanding property debt balances.

Loss on Extinguishment of Debt

~~For~~

During the three months ended ~~March 31,~~June 30, 2023 or 2022, we did not incur a loss on extinguishment of debt.

For the six months ended June 30, 2023, compared to 2022, loss on extinguishment of debt decreased by $21.6 million, due to prepayment penalties incurred from the early payment of property debt in 2022.

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(Loss) Gain on Dispositions and Impairments of Real Estate

D~~uring~~

During the three and six months ended ~~March 31,~~June 30, 2023, ~~no apartment communities were sold. The table below summarizes~~we recognized $17.5 million of loss (gain) on dispositions and impairments of ~~apartment communities from~~real estate due primarily to:

•A non-cash impairment loss on real estate due to the evaluation of the expected hold period of two real estate assets in our ~~portfolio~~Other Real Estate reporting segment. Given management's assessment of the likelihood of the sale of these assets, which occurred during the three months ended ~~March 31, 2022 (dollars~~June 30, 2023, we reduced the carrying value to their estimated fair value and recognized a non-cash impairment loss on real estate of $8.2 million;

•A non-cash impairment loss on real estate due to the evaluation of the expected hold period of one additional real estate asset in ~~millions):~~

2022

Number of apartment communities sold

8

Number of apartment homes sold

1,332

Gain on apartment community sales

$
412.0

~~Loss from Unconsolidated~~our Other Real Estate ~~Partnership~~reporting segment. Given management’s assessment of the likelihood of its pending sale, which is expected to occur by year end, we reduced the carrying value to its estimated fair value and recognized a non-cash impairment loss on real estate of $15.4 million; offset partially by

•A $6.4 million gain in connection with the formation of the Value-Add JV.

During the three and six months ended ~~March 31, 2023, compared to~~June 30, 2022, ~~loss from unconsolidated~~we recognized $175.6 million and $587.6 million, respectively, of gain on dispositions of real estate ~~partnerships decreased by $1.0~~related to the sale of four and 12 apartment communities, respectively, and we did not recognize any real estate impairment losses.

Gain on Derivative Instruments

During the three and six months ended June 30, 2023, we recognized $11.4 million ~~due primarily to lower depreciation~~ and ~~amortization expense at properties included in unconsolidated joint ventures.~~

$9.3 million, respectively, of gains on derivative instruments that are not designated as cash flow hedges. Of the $11.4 million, $5.3 million represents cash gains and $6.1 million represents non-cash gains. Of the $9.3 million, $5.3 million represents cash gains and $4.0 million represents non-cash gains, net.

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 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, 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

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 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

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by recognizing that real estate assets generally appreciate over time or maintain residual value to

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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; and adjustments for our share of FFO of unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are 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 and preferred units and amounts allocated from NAREIT FFO to participating securities.

In addition to NAREIT FFO, we use Pro forma FFO to measure short-term performance. Pro forma FFO represents NAREIT FFO as defined above, excluding certain amounts that are unique or occur infrequently.

NAREIT FFO and Pro forma FFO 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.

NAREIT FFO and Pro forma FFO are calculated as follows (in thousands, except per share data):

Three Months Ended March 31,

2023

2022

Net (loss) income attributable to AIR common stockholders

$
(11,457
)

$
375,881

Adjustments:

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

90,012

81,457

Gain on dispositions of real estate, net of noncontrolling partners’ interest

—

(412,003
)
Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities

(5,922
)

20,249

NAREIT FFO attributable to AIR common stockholders

$
72,633

$
65,584

Adjustments:

Non-cash straight-line rent (1)

3,090

642

Loss on derivative instruments (2)

2,144

—

Loss on extinguishment of debt (3)

2,008

23,636

Business transformation and transition related costs (4)

213

869

Casualty losses and other (5)

1,846

356

Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities

(626
)

(1,578
)
Pro forma FFO attributable to AIR common stockholders

$
81,308

$
89,509

Weighted-average common shares outstanding – basic

148,810

156,736

Dilutive common share equivalents

74

352

Total shares and dilutive share equivalents

148,884

157,088

Net (loss) income attributable to AIR per share – diluted

$
(0.08
)

$
2.39

NAREIT FFO per share – diluted

$
0.49

$
0.42

Pro forma FFO per share – diluted

$
0.55

$
0.57


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net (loss) income attributable to AIR common stockholders	$	(1,439)	$	196,722	$	(12,896)	$572,603
Adjustments:
Real estate depreciation and amortization, net of noncontrolling partners’ interest	83,749		73,922		173,761		155,379
Loss (gain) on dispositions and impairments of real estate, net of noncontrolling partners’ interest	17,472		(175,450)		17,472		(587,453)

Income tax adjustments related to gain on dispositions and other tax-related items	—		(1,100)		—		(1,100)
Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities	(6,889)		6,328		(12,811)		26,577
NAREIT FFO attributable to AIR common stockholders	$	92,893	$	100,422	$	165,526	$	166,006
Adjustments:
Gain on derivative instruments (1)	(11,390)		—		(9,246)		—
Non-cash straight-line rent (2)	3,090		642		6,180		1,284
Business transformation and transition related costs (3)	310		1,593		523		2,462
Loss on extinguishment of debt (4)	—		—		2,008		23,636
Casualty losses and other	281		322		2,127		678
Common noncontrolling interests in AIR OP’s share of above adjustments and amounts allocable to participating securities	533		(160)		(93)		(1,738)
Pro forma FFO attributable to AIR common stockholders	$	85,717	$	102,819	$	167,025	$	192,328

Weighted-average common shares outstanding – basic	148,832		155,927		148,821		156,327
Dilutive common share equivalents	55		209		65		280
Total shares and dilutive share equivalents	148,887		156,136		148,886		156,607

Net income attributable to AIR per share – diluted	$	(0.01)	$	1.26	$	(0.09)	$	3.66
NAREIT FFO per share – diluted	$	0.62	$	0.64	$	1.11	$	1.06
Pro forma FFO per share – diluted	$	0.58	$	0.66	$	1.12	$	1.23

(1)During 2023, in anticipation of future financing transactions, we 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 (loss) income attributable to AIR common stockholders. Any non-cash changes in fair value is excluded in the determination of Pro forma FFO.

(2)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 these ground leases in Pro forma FFO

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but exclude the incremental straight-line non-cash rent expense. The rent expense for these leases is included in other expenses, net, in our condensed consolidated statements of operations.

~~(2)~~

During 2023, we entered into certain treasury locks in anticipation of future financing transactions that do not meet GAAP requirements for hedge accounting treatment. As such, we are required to mark-to-market the fair value of these derivatives quarterly through net income. We have excluded the fair value adjustment from Pro forma FFO as the loss is non-cash and currently unrealized.

(3)

During 2023 and 2022, we incurred debt extinguishment costs related to the prepayment of debt. In 2023, these costs are related to the prepayment of high-cost, floating-rate debt. We excluded these costs from Pro forma FFO because we believe they are not representative of future cash flows.

~~(4)~~

During 2023 and 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. As we engage in and finalize our finance transformation initiative that modernizes our systems and processes, including a 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.

~~(5)~~(4)

During 2023 and 2022, we incurred casualty losses related to fire damage at our Palazzo East at Park La Brea apartment community. During 2021, we incurred casualty losses due to Hurricane Ida-induced flooding in downtown Philadelphia causing damage to our Park Towne Place apartment community, and

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~~continued to incur incremental~~debt extinguishment costs related to ~~its cleanup in 2022.~~the prepayment of debt. In 2023, these costs are related to the prepayment of high-cost, floating-rate debt. We excluded these costs from Pro forma FFO because we believe they are not representative of ~~the unusual nature of the weather events.~~future cash flows.

Please see the Results of Operations section for discussion of the factors affecting our Pro forma FFO for 2023.

Leverage Ratios

We target Net Leverage to Adjusted EBITDAre between 5.0x and 6.0x. We also focus on Proportionate Debt to Adjusted EBITDAre. We believe these ratios, which are based in part on non-GAAP financial information, are commonly used by investors and analysts to assess the relative financial risk associated with balance sheets of companies within the same industry, and they are believed to be similar to measures used by rating agencies to assess entity credit quality.

Our leverage ratios for the three months ended ~~March 31,~~June 30, 2023, are presented below:

Annualized Current Quarter

Annualized Current Quarter Pro forma for the Core Joint Venture Transaction

Proportionate Debt to Adjusted EBITDAre

6.3x

~~6.6x~~5.7x

Net Leverage to Adjusted EBITDAre

6.5x

~~6.8x~~5.9x

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, 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.

We believe Proportionate Debt is useful to investors as it is a measure of our net exposure to debt obligations. Proportionate Debt, as used in our leverage ratios, is calculated as set forth in the table below.

Preferred equity represents the redemption amounts for AIR’s Preferred Stock and the AIR Operating Partnership’s Preferred Partnership Units and, although perpetual in nature, are another component of our overall leverage.

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The reconciliation of total indebtedness to Proportionate Debt and Preferred Equity, as used in our leverage ratios, is as follows (in thousands):

March 31, 2023

Total indebtedness

$
3,738,808

Adjustments:

Debt issuance costs related to non-recourse property debt and term loans

18,388

Proportionate share adjustments related to debt obligations

(388,748
)
Cash and restricted cash

(115,086
)
Tenant security deposits included in restricted cash

10,895

Proportionate share adjustments related to cash and restricted cash

6,703

Proportionate Debt

$
3,270,960

Perpetual Preferred Stock

2,000

Preferred noncontrolling interests in AIR Operating Partnership

77,143

Net Leverage

$
3,350,103


	June 30, 2023
Total indebtedness	$	3,684,577
Adjustments:
Debt issuance costs related to non-recourse property debt and term loans	18,425

Proportionate share adjustments related to debt obligations	(360,696)
Cash and restricted cash	(129,913)
Tenant security deposits included in restricted cash	11,633
Proportionate share adjustments related to cash and restricted cash	9,082

Proportionate Debt	$	3,233,108
Perpetual Preferred Stock	2,000
Preferred noncontrolling interests in AIR Operating Partnership	77,143
Net Leverage	$	3,312,251
Leverage reduction funded by Core Joint Venture transaction	(451,904)
Net Leverage, Pro forma for Core Joint Venture transaction	$	2,860,347

We calculated Adjusted EBITDAre used in our leverage ratios based on annualized current quarter amounts. EBITDAre and Adjusted EBITDAre are non-GAAP measures, which we believe are useful to investors, creditors, and rating agencies as a supplemental measure of our ability to incur and service debt because they are recognized measures of performance by the real estate industry and facilitate comparison of credit strength between AIR and other companies. EBITDAre and Adjusted EBITDAre should not be considered alternatives to net income as determined in accordance with GAAP as indicators of liquidity. There can be no assurance that our method of calculating EBITDAre and Adjusted EBITDAre is comparable with that of other real estate investment trusts. NAREIT defines EBITDAre as net income computed in accordance with GAAP, before interest expense, income taxes, and depreciation and amortization expense, which we have further adjusted for:

•

gains and losses on dispositions of depreciated property;

•

impairment write-downs of depreciated property; and

•

adjustments to reflect our share of EBITDAre of investments in unconsolidated entities and consolidated entities with non-controlling interests.

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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:

•

the amount by which GAAP rent expense exceeds cash rent payments for two long-term ground leases until 2076 and 2079 is excluded. The excess of GAAP rent expense over the cash payments for 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 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.

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

Three Months Ended

March 31, 2023

Net loss

$
(9,948
)
Adjustments:

Interest expense

36,187

Loss on extinguishment of debt

2,008

Income tax expense

139

Depreciation and amortization

95,666

Net income attributable to noncontrolling interests in consolidated real estate partnerships

(685
)
EBITDAre adjustments attributable to noncontrolling interests and unconsolidated real estate partnerships

(7,083
)
EBITDAre

$
116,284

Pro forma FFO and other adjustments, net (1)

7,019

Quarterly Adjusted EBITDAre

$
123,303

Adjusted EBITDAre

$
493,212


	Three Months Ended June 30, 2023
Net income	$	598
Adjustments:
Interest expense	37,554

Income tax expense	1,177
Depreciation and amortization	89,260
Loss on dispositions and impairments of real estate	17,472


Net income attributable to noncontrolling interests in consolidated real estate partnerships	(684)
EBITDAre adjustments attributable to noncontrolling interests and unconsolidated real estate partnerships	(6,765)
EBITDAre	$	138,612
Pro forma FFO and other adjustments, net (1)	(8,554)
Quarterly Adjusted EBITDAre	$	130,058
Adjusted EBITDAre, before removal of annualization impact for non-recurring items	$	520,232

Removal of annualization impact for non-recurring items (2)	(7,218)
Adjusted EBITDAre	$	513,014
Core Joint Venture transaction, annualized	(27,410)
Pro forma Adjusted EBITDAre	$	485,604

(1)

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. EBITDAre has also been adjusted by ~~$0.1~~$0.8 million to reflect the ~~acquisition~~disposition of ~~one property,~~two properties and the Value-Add Joint Venture, as if the ~~transaction~~transactions closed on ~~January~~April 1, 2023.

(2)Second quarter 2023 EBITDAre benefits from $2.4 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 ~~March 31,~~June 30, 2023, our available liquidity was ~~$848.2 million,~~$1.8 billion, which consisted of:

•

$~~83.6~~96.7 million of our share of cash and cash equivalents;

•

$~~13.9~~12.5 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~~

•

$~~750.7~~703.7 million of available capacity to borrow under our revolving credit facility after consideration of letters of ~~credit.~~credit; and

~~In April 2023, we established a secured credit facility with Fannie Mae that provides for up to $1~~•$1.0 billion of committed property level financing ~~on an as needed basis.~~ through our secured credit facility with Fannie Mae.

After consideration of the ~~secured facility,~~completion of the Core JV, total liquidity is approximately ~~$1.8~~$2.3 billion.

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. 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

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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

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unsecured borrowings, the issuance of equity securities (including OP Units), the sale of apartment 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, 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.

During the three months ended March 31, 2023, and on a leverage neutral basis, AIR borrowed $320 million using 10-year fixed rate financing, bearing interest at 4.9%. Proceeds were used to refinance a floating rate loan and reduce borrowings by $230 million on our revolving credit facility. This transaction reduced floating rate debt not subject to interest rate caps to $120 million, 4% of outstanding leverage, net of cash on-hand, and increased our weighted-average maturity by nine months. As a result of these transactions, AIR has no debt maturing before the second quarter of 2025.

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 ~~6.9~~6.6 years as of ~~March 31,~~June 30, 2023, inclusive of extension options, with a weighted-average interest rate of ~~4.1%~~4.3%. ~~As of March 31, 2023,~~Subsequent to the Core JV transaction, the weighted-average interest rate ~~on our fixed rate loans~~for total leverage is 4.0% and ~~floating rate loans~~the average remaining term to maturity is ~~3.6% and 5.4%, respectively~~

7.2 years, inclusive of extension options. We have sufficient committed credit to repay all debt coming due through 2027.

Under our credit agreement and unsecured notes payable, 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 ratio of no greater than 0.60 to 1.00; a fixed charge coverage ratio of no less than 1.50 to 1.00, a maximum secured indebtedness to 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 ratio no greater than 0.60 to 1.00, and a minimum unsecured interest coverage ratio no less than 1.50 to 1.00. We believe we were in compliance with these covenants as of ~~March 31,~~June 30, 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 ~~three~~six months ended ~~March 31,~~June 30, 2023, net cash provided by operating activities was ~~$88.9~~$182.7 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 ~~three~~six months ended ~~March 31,~~June 30, 2023, ~~increased~~decreased by ~~$16.2~~$18.8 million compared to the same period in 2022, due primarily to ~~higher contribution from our Same Store portfolio and increased~~lower net operating income associated with apartment communities sold, partially offset by an increase contribution from properties recently acquired.

Investing Activities

For the ~~three~~six months ended ~~March 31,~~June 30, 2023, our net ~~cash~~ used in investing activities of ~~$191.3~~$228.4 million consisted primarily of purchases of real estate and capital expenditures. Net cash provided by investing activities of ~~$513.3~~$574.7 million for the same period in 2022 consisted primarily of proceeds from dispositions of real estate and proceeds from the partial repayment of the 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.

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Capital additions ~~totaled $37.0~~totaled $88.0 million and ~~$36.1 million~~$86.4 million during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 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 six 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 to replace the portion of acquired apartment communities consumed prior to our period of ownership;

•

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;

•

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;

•

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

•

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.

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):

Three Months Ended March 31,

2023

2022

Capital replacements

$
6,752

$
5,308

Capital improvements

3,532

1,788

Capital enhancements

16,341

13,380

Initial capital expenditures

7,054

5,660

Casualty

2,922

9,283

Entitlement and planning

390

634

Total capital additions

$
36,991

$
36,053

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

—

1,108

Consolidated capital additions

$
36,991

$
37,161

Plus: net change in accrued capital spending

(2,713
)

141

Total capital expenditures per condensed consolidated statements of cash flows

$
34,278

$
37,302


	Six Months Ended
	June 30, 2023		June 30, 2022
Capital replacements	$	17,372	$	12,916
Capital improvements	5,880		6,855
Capital enhancements	44,756		41,920
Initial capital expenditures	15,250		12,807
Casualty	4,646		10,828
Entitlement and planning	133		1,027
Total capital additions	$	88,037	$	86,353
Plus: additions related to apartment communities sold and held for sale	3,307		3,446
Consolidated capital additions	$	91,344	$	89,799
Plus: net change in accrued capital spending	(1,956)		800
Total capital expenditures per condensed consolidated statements of cash flows	$	89,388	$	90,599

For the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, we capitalized ~~$0.4~~$0.7 million and ~~$0.3~~$0.7 million of interest costs, respectively, and ~~$4.0~~$8.3 million and ~~$3.7~~$7.7 million of indirect costs, respectively.

Financing Activities

Net cash used in financing activities of ~~$84.0~~$125.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023 consisted primarily of net repayments on our revolving credit facility and the payment of dividends, partially offset by net proceeds from non-recourse property debt. Net cash used in financing activities of ~~$574.8~~$768.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2022 consisted primarily of repayments on non-recourse debt and ~~net repayments on our revolving credit facility.~~term loans, payment of dividends, and repurchases of common stock, offset partially by proceeds from the issuance of unsecured notes payable.

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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 (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 2023 and beyond.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our chief market risks are refunding risk, that is the availability of property debt or other cash sources to refund maturing property debt, and repricing risk, that is the possibility of increases in base interest rates and credit risk spreads. We use short-term debt financing

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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 ~~March 31,~~June 30, 2023, on a consolidated basis, we had $800.0 million of outstanding borrowings on our term loans, and ~~$245.0~~$292.0 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 points with constant credit risk spreads would increase or decrease interest expense by ~~$2.2~~$7.4 million, net, on an annual ~~basis,~~basis. Subsequent to the Core JV close, our floating rate debt, after consideration of our interest rate ~~swaps.~~

swaps, is $125 million, or 4% of total leverage; 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 $1.3 million, net, on an annual basis.

As of ~~March 31,~~June 30, 2023, we had ~~$115.1~~$129.9 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 March 31, 2023, we had $391.0 million of treasury rate locks not designated as hedging instruments. We estimate that a change in the floating rate of 100-basis points would increase or decrease other expense, net by $3.9 million on an annual basis.

We estimate the fair value of debt instruments as described in Note 5 to the condensed consolidated financial statements in Item 1. The estimated fair value of total indebtedness, including our term loans, revolving credit facility, and unsecured notes payable, was approximately ~~$3.5~~$3.4 billion as of ~~March 31,~~June 30, 2023, inclusive of a ~~$217.1~~$270.8 million mark-to-market asset, of which the amount attributable to AIR common stockholders is ~~$178.3~~$219.0 million.

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 ~~first~~second quarter of 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

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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, 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.

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 ~~first~~second quarter of 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, 2022.

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

AIR

Unregistered Sales of Equity Securities

From time to time, we may issue shares of Common Stock in exchange for OP 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 ~~March 31,~~June 30, 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

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 ~~March 31,~~June 30, 2023, there was $183.3 million remaining available for future share repurchases under this authorization. There were no share repurchases during the three months ended ~~March 31,~~June 30, 2023.

The AIR Operating Partnership

Unregistered Sales of Equity Securities

~~During~~

The AIR Operating Partnership did not issue nor repurchase any unregistered OP Units during the three months ended March 31, 2023, the AIR Operating Partnership issued 653,820 common OP Units as partial consideration for the acquisition of one apartment community located in the South Beach neighborhood of Miami Beach. To neutralize the issuance of OP Units, in November and December 2022, AIR repurchased an equal number of shares of Common Stock. The common OP Units were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.

June 30, 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 ~~March 31,~~June 30, 2023, no common OP Units were redeemed in exchange for Common Stock.

The following table summarizes the AIR Operating Partnership’s repurchases or redemptions of common OP Units in exchange for cash during the three months ended ~~March 31,~~June 30, 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)
January 1 - January 31, 2023

294,635

$
35.14

N/A

N/A
February 1 - February 28, 2023

3,683

$
36.93

N/A

N/A
March 1 - March 31, 2023

1,102

$
37.24

N/A

N/A
Total

299,420

$
35.17


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)
April 1 – April 30, 2023	110,316	$	35.78	N/A	N/A
May 1 – May 31, 2023	35,624	$	35.20	N/A	N/A
June 1 – June 30, 2023	2,144	$	35.42	N/A	N/A
Total	148,084	$	35.63

(1)

The terms of the AIR Operating Partnership’s Partnership Agreement do not provide for a maximum number of 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.

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 agreement includes customary covenants, including a restriction on dividends and distributions and other restricted payments, but permits dividends and distributions during any

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four consecutive fiscal quarters in an aggregate amount of

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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.

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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, 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 ~~March 31,~~June 30, 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: July 28, 2023

~~Date: May 2, 2023~~


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	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) ~~Income~~	6
	Condensed Consolidated Statements of Equity	7
	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) ~~Income~~	1112
	Condensed Consolidated Statements of Partners’ Capital	1213
	Condensed Consolidated Statements of Cash Flows	1315
	Notes to the Condensed Consolidated Financial Statements of Apartment Income REIT Corp. and Apartment Income REIT, L.P.:	1416
	Note 1 — Basis of Presentation and Organization	1416
	Note 2 — Summary of Significant Accounting Policies	1517
	Note 3 — Significant Transactions	1618
	Note 4 — Leases	1619
	Note 5 — Debt	1720
	Note 6 — Commitments and Contingencies	1720
	Note 7 — Earnings and Dividends per Share and per Unit	1821
	Note 8 — Fair Value Measurements	1822
	Note 9 — Derivative Financial Instruments and Hedging Activities	1923
	Note 10 — Variable Interest Entities	2024
	Note 11 — Business Segments	2125

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2328
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3542
ITEM 4.	CONTROLS AND PROCEDURES	3642
	PART II. OTHER INFORMATION
ITEM 1A.	RISK FACTORS	3744
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3744
ITEM 6.	EXHIBITS	3946
Signatures		4047


	March 31,			December 31,
	2023			2022
ASSETS
Buildings and improvements	$	7,019,993		$	6,784,965
Land		1,395,140			1,291,429
Total real estate		8,415,133			8,076,394
Accumulated depreciation		(2,534,976	)		(2,449,883	)
Net real estate		5,880,157			5,626,511
Cash and cash equivalents		90,214			95,797
Restricted cash		24,872			205,608
Goodwill		32,286			32,286
Other assets, net		544,818			591,681
Total assets	$	6,572,347		$	6,551,883

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	2,299,139		$	1,985,430
Term loans, net		797,092			796,713
Revolving credit facility borrowings		245,000			462,000
Unsecured notes payable, net		397,577			397,486
Total indebtedness		3,738,808			3,641,629
Accrued liabilities and other		521,494			513,805
Total liabilities		4,260,302			4,155,434

Commitments and contingencies (Note 6)

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

Equity:
Perpetual Preferred Stock		2,000			2,000
Common Stock, $0.01 par value, 1,021,175,000 shares authorized at March 31, 2023 and December 31, 2022, and 149,199,684 and 149,086,548 shares issued/outstanding at March 31, 2023 and December 31, 2022, respectively		1,492			1,491
Additional paid-in capital		3,432,573			3,436,635
Accumulated other comprehensive income		29,070			43,562
Distributions in excess of earnings		(1,405,520	)		(1,327,271	)
Total AIR equity		2,059,615			2,156,417
Noncontrolling interests in consolidated real estate partnerships		(79,017	)		(78,785	)
Common noncontrolling interests in AIR Operating Partnership		254,304			241,674
Total equity		2,234,902			2,319,306
Total liabilities, preferred noncontrolling interests in AIR Operating Partnership, and equity	$	6,572,347		$	6,551,883


	June 30, 2023		December 31, 2022
ASSETS
Buildings and improvements	$	6,888,234	$	6,784,965
Land	1,345,086		1,291,429
Total real estate	8,233,320		8,076,394
Accumulated depreciation	(2,562,252)		(2,449,883)
Net real estate	5,671,068		5,626,511
Cash and cash equivalents	106,349		95,797
Restricted cash	23,564		205,608
Goodwill	32,286		32,286
Other assets, net	573,743		591,681
Total assets	$	6,407,010	$	6,551,883

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	2,197,437	$	1,985,430
Term loans, net	797,471		796,713
Revolving credit facility borrowings	292,000		462,000
Unsecured notes payable, net	397,669		397,486
Total indebtedness	3,684,577		3,641,629
Accrued liabilities and other	476,400		513,805
Total liabilities	4,160,977		4,155,434

Commitments and contingencies (Note 6)

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

Equity:
Perpetual Preferred Stock	2,000		2,000
Common Stock, $0.01 par value, 1,021,175,000 shares authorized at June 30, 2023 and December 31, 2022, and 149,223,526 and 149,086,548 shares issued/outstanding at June 30, 2023 and December 31, 2022, respectively	1,492		1,491
Additional paid-in capital	3,430,731		3,436,635
Accumulated other comprehensive income	39,343		43,562
Distributions in excess of earnings	(1,474,101)		(1,327,271)
Total AIR equity	1,999,465		2,156,417
Noncontrolling interests in consolidated real estate partnerships	(80,087)		(78,785)
Common noncontrolling interests in AIR Operating Partnership	249,512		241,674
Total equity	2,168,890		2,319,306
Total liabilities, preferred noncontrolling interests in AIR Operating Partnership, and equity	$	6,407,010	$	6,551,883


	Three Months Ended March 31,
	2023			2022
REVENUES
Rental and other property revenues	$	209,923		$	179,261
Other revenues		2,070			2,217
Total revenues		211,993			181,478

EXPENSES
Property operating expenses		75,453			63,236
Depreciation and amortization		95,666			84,549
General and administrative expenses		7,180			6,597
Other expenses, net		5,798			4,018
		184,097			158,400

Interest income		1,525			13,481
Interest expense		(36,187	)		(22,107	)
Loss on extinguishment of debt		(2,008	)		(23,636	)
Gain on dispositions of real estate		—			412,003
Loss from unconsolidated real estate partnerships		(1,035	)		(2,014	)
(Loss) income before income tax (expense) benefit		(9,809	)		400,805
Income tax (expense) benefit		(139	)		579
Net (loss) income		(9,948	)		401,384

Noncontrolling interests:
Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships		(685	)		564
Net income attributable to preferred noncontrolling interests in AIR Operating Partnership		(1,570	)		(1,603	)
Net loss (income) attributable to common noncontrolling interests in AIR Operating Partnership		826			(24,167	)
Net income attributable to noncontrolling interests		(1,429	)		(25,206	)
Net (loss) income attributable to AIR		(11,377	)		376,178
Net income attributable to AIR preferred stockholders		(43	)		(42	)
Net income attributable to participating securities		(37	)		(255	)
Net (loss) income attributable to AIR common stockholders	$	(11,457	)	$	375,881

Net (loss) income attributable to AIR common stockholders per share – basic	$	(0.08	)	$	2.40
Net (loss) income attributable to AIR common stockholders per share – diluted	$	(0.08	)	$	2.39

Weighted-average common shares outstanding – basic		148,810			156,736
Weighted-average common shares outstanding – diluted		148,810			157,088


☒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 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		—			—			—		—		—			—			—			—			—			(3,452	)		(3,452	)
Amortization of share-based compensation cost		—			—			—		—		1,890			—			—			1,890			—			860			2,750
Effect of changes in ownership of consolidated entities		—			—			—		—		(2,686	)		—			—			(2,686	)		—			2,686			—
Contributions from noncontrolling interests in consolidated real estate partnerships		—			—			—		—		—			—			—			—			4,325			—			4,325
Change in accumulated other comprehensive income		—			—			—		—		—			(783	)		—			(783	)		—			—			(783	)
Net income (loss)		—			—			—		—		—			—			376,178			376,178			(564	)		24,167			399,781
Common Stock dividends		—			—			—		—		—			—			(70,428	)		(70,428	)		—			—			(70,428	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(3,147	)		(4,447	)		(7,594	)
Other, net		(125	)		(129	)		84,456		1		148			—			(48	)		(28	)		112			—			84
Balances at March 31, 2022		20		$	2,000			157,082,823	$	1,571	$	3,762,457		$	(783	)	$	(1,648,077	)	$	2,117,168		$	(70,157	)	$	216,827		$	2,263,838

Balances at December 31, 2022		20		$	2,000			149,086,548	$	1,491	$	3,436,635		$	43,562		$	(1,327,271	)	$	2,156,417		$	(78,785	)	$	241,674		$	2,319,306
Issuance of AIR Operating Partnership units		—			—			—		—		—			—			—			—			—			22,383			22,383
Redemption of AIR Operating Partnership units		—			—			—		—		—			—			—			—			—			(10,529	)		(10,529	)
Amortization of share-based compensation cost		—			—			—		—		1,971			—			—			1,971			—			1,155			3,126
Effect of changes in ownership of consolidated entities		—			—			—		—		(6,102	)		—			—			(6,102	)		—			6,102			—
Contributions from noncontrolling interests in consolidated real estate partnerships		—			—			—		—		—			—			—			—			1,567			—			1,567
Change in accumulated other comprehensive income		—			—			—		—		—			(14,492	)		—			(14,492	)		—			(1,102	)		(15,594	)
Net (loss) income		—			—			—		—		—			—			(11,377	)		(11,377	)		685			(826	)		(11,518	)
Common Stock dividends		—			—			—		—		—			—			(66,939	)		(66,939	)		—			—			(66,939	)
Distributions to noncontrolling interests		—			—			—		—		—			—			—			—			(2,485	)		(4,552	)		(7,037	)
Other, net		—			—			113,136		1		69			—			67			137			1			(1	)		137
Balances at March 31, 2023		20		$	2,000			149,199,684	$	1,492	$	3,432,573		$	29,070		$	(1,405,520	)	$	2,059,615		$	(79,017	)	$	254,304		$	2,234,902


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(9,350)	$	613,043
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	184,926		163,205
Loss (gain) on dispositions and impairments of real estate	17,472		(587,609)
Loss on extinguishment of debt	2,008		23,636


Income tax expense	1,316		920
Other, net	624		2,939
Net changes in operating assets and operating liabilities	(14,334)		(14,638)
Net cash provided by operating activities	182,662		201,496
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate	(182,459)		(472,317)
Capital expenditures	(89,388)		(90,599)
Proceeds from dispositions of real estate	33,633		759,344



Proceeds from repayment of note receivable	—		387,088

Other investing activities, net	9,804		(8,849)
Net cash (used in) provided by investing activities	(228,410)		574,667
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on non-recourse property debt	(103,964)		(353,770)
Proceeds from non-recourse property debt	320,000		—

Repayment of term loan	—		(350,000)
Net (repayments of) borrowings on revolving credit facility	(170,000)		(154,795)


Proceeds from the issuance of unsecured notes payable	—		400,000
Repurchases of Common Stock	—		(125,000)


Payment of dividends to holders of Common Stock	(134,135)		(141,104)
Payment of distributions to common noncontrolling interests	(14,159)		(16,306)

Redemptions of noncontrolling interests in the AIR Operating Partnership	(15,814)		(4,269)


Other financing activities, net	(7,672)		(22,789)
Net cash used in financing activities	(125,744)		(768,033)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(171,492)		8,130
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	301,405		92,761
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	129,913	$	100,891


	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, 2021	$	2,129		$	1,810,896		$	197,013		$	2,010,038		$	(70,883	)	$	1,939,155
Redemption of common partnership units		—			—			(3,452	)		(3,452	)		—			(3,452	)
Amortization of share-based compensation cost		—			1,890			860			2,750			—			2,750
Effect of changes in ownership of consolidated entities		—			(2,686	)		2,686			—			—			—
Contributions from noncontrolling interests in consolidated real estate partnerships		—			—			—			—			4,325			4,325
Change in other comprehensive loss		—			(783	)		—			(783	)		—			(783	)
Net income (loss)		—			376,178			24,167			400,345			(564	)		399,781
Distributions to common unitholders		—			(70,428	)		—			(70,428	)		—			(70,428	)
Distributions to noncontrolling interests		—			—			(4,447	)		(4,447	)		(3,147	)		(7,594	)
Other, net		(129	)		101			—			(28	)		112			84
Balances at March 31, 2022	$	2,000		$	2,115,168		$	216,827		$	2,333,995		$	(70,157	)	$	2,263,838

Balances at December 31, 2022	$	2,000		$	2,154,417		$	241,674		$	2,398,091		$	(78,785	)	$	2,319,306
Redemption of common partnership units		—			—			(10,529	)		(10,529	)		—			(10,529	)
Issuance of common partnership units		—			—			22,383			22,383			—			22,383
Amortization of share-based compensation cost		—			1,971			1,155			3,126			—			3,126
Effect of changes in ownership of consolidated entities		—			(6,102	)		6,102			—			—			—
Contributions from noncontrolling interests in consolidated real estate partnerships		—			—			—			—			1,567			1,567
Change in other comprehensive loss		—			(14,492	)		(1,102	)		(15,594	)		—			(15,594	)
Net (loss) income		—			(11,377	)		(826	)		(12,203	)		685			(11,518	)
Distributions to common unitholders		—			(66,939	)		(4,552	)		(71,491	)		—			(71,491	)
Distributions to noncontrolling interests		—			—			—			—			(2,485	)		(2,485	)
Other, net		—			137			(1	)		136			1			137
Balances at March 31, 2023	$	2,000		$	2,057,615		$	254,304		$	2,313,919		$	(79,017	)	$	2,234,902


	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 March 31, 2022	$	2,000	$	2,115,168	$	216,827	$	2,333,995	$	(70,157)	$	2,263,838
Redemption of common partnership units	—		—		(793)		(793)		—		(793)
Repurchase of common partnership units	—		(125,000)		—		(125,000)		—		(125,000)
Amortization of share-based compensation cost	—		751		950		1,701		—		1,701
Effect of changes in ownership of consolidated entities	—		(578)		578		—		—		—
Contributions from noncontrolling interests in consolidated real estate partnerships	—		—		—		—		3,483		3,483
Change in accumulated other comprehensive income (loss)	—		14,533		1,171		15,704		—		15,704
Net income	—		196,927		12,749		209,676		381		210,057
Distributions to common unitholders	—		(70,556)		—		(70,556)		—		(70,556)
Distributions to noncontrolling interests	—		—		(4,489)		(4,489)		(4,188)		(8,677)
Other, net	—		(796)		(8)		(804)		(128)		(932)
Balances at June 30, 2022	$	2,000	$	2,130,449	$	226,985	$	2,359,434	$	(70,609)	$	2,288,825

Balances at March 31, 2023	$	2,000	$	2,057,615	$	254,304	$	2,313,919	$	(79,017)	$	2,234,902
Redemption of common partnership units	—		—		(5,285)		(5,285)		—		(5,285)

Amortization of share-based compensation cost	—		820		1,155		1,975		—		1,975
Effect of changes in ownership of consolidated entities	—		(3,184)		3,184		—		—		—
Purchase of noncontrolling interests in consolidated real estate partnerships	—		479		—		479		(1,996)		(1,517)
Contributions from noncontrolling interests in consolidated real estate partnerships	—		—		—		—		2,950		2,950
Change in accumulated other comprehensive income (loss)	—		10,273		994		11,267		—		11,267
Net (loss) income	—		(1,341)		(315)		(1,656)		684		(972)
Distributions to common unitholders	—		(67,201)		(4,526)		(71,727)		—		(71,727)
Distributions to noncontrolling interests	—		—		—		—		(2,572)		(2,572)
Other, net	—		4		1		5		(136)		(131)
Balances at June 30, 2023	$	2,000	$	1,997,465	$	249,512	$	2,248,977	$	(80,087)	$	2,168,890


Balance at January 1, 2023	$	77,143
Preferred distributions		(1,570	)
Net income allocated to preferred units		1,570
Balance at March 31, 2023	$	77,143


Purchase price	$	298,000
Capitalized transaction costs		5,469
Total consideration (1)	$	303,469

Land	$	99,338
Building and improvements		187,427
Intangible assets (2)		12,077
Mark-to-market on debt assumed		7,370
Below-market lease liabilities (2)		(2,743	)
Total consideration (1)	$	303,469


2023 (remaining)	$	262,306
2024	258,690
2025	41,745
2026	11,214
2027	9,701
Thereafter	34,712
Total	$	618,368


2023 (remaining)	$	356,956
2024		152,226
2025		21,602
2026		11,215
2027		9,928
Thereafter		37,332
Total	$	589,259



	March 31, 2023			December 31, 2022
Secured debt:
Fixed-rate property debt due May 2025 to January 2055 (1)	$	2,312,196		$	1,906,151
Variable-rate property debt		—			88,500
Total non-recourse property debt		2,312,196			1,994,651
Debt issuance costs, net of accumulated amortization		(13,057	)		(9,221	)
Total non-recourse property debt, net	$	2,299,139		$	1,985,430

Unsecured debt:
Term loans due December 2023 to April 2026 (2) (3)		800,000			800,000
Revolving credit facility borrowings due April 2025 (2) (4)		245,000			462,000
4.58% Notes payable due June 2027		100,000			100,000
4.77% Notes payable due June 2029		100,000			100,000
4.84% Notes payable due June 2032		200,000			200,000
Total unsecured debt		1,445,000			1,662,000
Debt issuance costs, net of accumulated amortization		(5,331	)		(5,801	)
Total unsecured debt, net	$	1,439,669		$	1,656,199
Total indebtedness	$	3,738,808		$	3,641,629


	As of June 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	$	35,395	$	—	$	35,395	$	—	$	32,222	$	—	$	32,222	$	—
Interest rate swaps - pay-floating, receive fixed	$	(1,959)	$	—	$	(1,959)	$	—	$	—	$	—	$	—	$	—
Treasury rate lock	$	2,236	$	—	$	2,236	$	—	$	319	$	—	$	319	$	—


	As of March 31, 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	$	53,304		$	—	$	53,304		$	—	$	53,481	$	—	$	53,481	$	—
Interest rate swaps	$	19,386		$	—	$	19,386		$	—	$	32,222	$	—	$	32,222	$	—
Treasury rate locks	$	(1,908	)	$	—	$	(1,908	)	$	—	$	319	$	—	$	319	$	—


	As of March 31, 2023				As of December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-recourse property debt	$	2,312,196	$	2,121,819	$	1,994,651	$	1,753,222
Unsecured notes payable	$	400,000	$	373,290	$	400,000	$	371,368
Seller financing note receivable, net (1)	$	31,820	$	33,370	$	31,611	$	32,286


	Number of	Aggregate Notional		Derivative Assets (included in Other Assets, net)				Derivative Liabilities (included in Accrued Liabilities and Other)
	Instruments	Amount		Fair Value				Fair Value
	March 31, 2023	March 31, 2023		March 31, 2023		December 31, 2022		March 31, 2023			December 31, 2022
Derivatives designated as hedging instruments:
Interest rate swaps	10	$	830,000	$	19,624	$	32,222	$	(238	)	$	—
Treasury rate locks	1		220,000		236		319		—			—
Derivatives not designated as hedging instruments:
Treasury rate locks	4	$	391,000	$	—	$	—	$	(2,144	)	$	—


	June 30, 2023 (1)	December 31, 2022
VIEs with interests in apartment communities	4	5
Apartment communities owned by VIEs	15	16
Apartment homes in communities owned by VIEs	5,041	5,369


	March 31, 2023		December 31, 2022
ASSETS:
Net real estate	$	1,056,591	$	1,066,482
Cash and cash equivalents		63,330		54,319
Restricted cash		1,886		2,378
Other assets, net		25,685		20,944
LIABILITIES:
Non-recourse property debt, net	$	1,208,171	$	1,212,065
Accrued liabilities and other		36,603		35,365


	Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three months ended March 31, 2023:
Total revenues	$	157,902	$	30,075	$	21,943	$	2,073		$	211,993
Property operating expenses		41,247		11,457		11,366		11,383			75,453
Other operating expenses not allocated to segments (3)		—		—		—		108,644			108,644
Total operating expenses		41,247		11,457		11,366		120,027			184,097
Proportionate property net operating income (loss)		116,655		18,618		10,577		(117,954	)		27,896
Other items included in (loss) income before income tax (expense) benefit (4)		—		—		—		(37,705	)		(37,705	)
(Loss) income before income tax (expense) benefit	$	116,655	$	18,618	$	10,577	$	(155,659	)	$	(9,809	)


			Sequential Variance (3)
Year	Apartment Communities	% of Gross Asset Value	NOI
Class of 2021 (2)	5	8.0%	4.9%
Class of 2022 and 2023 (4)	5	9.0%	3.4%
Acquisition Portfolio	10	17.0%	4.1%

Total Portfolio	73	100.0%	1.7%


	AIR	Aimco
	Q1 2023	Q4 2019	Change
Residents
Average Household Income	$246,000	$165,000	49%
Median Household Income	$170,000	$116,000	47%
CSAT Score (1)	4.29	4.30	(0.01)
Resident Retention	61.9%	56.8%	5.1%
Portfolio
Properties	75	124	(40%)
Apartment Homes	22,696	32,598	(30%)
Average Revenue per Apartment Home	$2,766	$2,272	22%
Redevelopment and Development ($M)	$—	$230	($230)
Mezzanine Investments ($M)	$—	$280	($280)


	2022
Number of apartment communities sold		8
Number of apartment homes sold		1,332
Gain on apartment community sales	$	412.0


	Three Months Ended
	March 31, 2023
Net loss	$	(9,948	)
Adjustments:
Interest expense		36,187
Loss on extinguishment of debt		2,008
Income tax expense		139
Depreciation and amortization		95,666
Net income attributable to noncontrolling interests in consolidated real estate partnerships		(685	)
EBITDAre adjustments attributable to noncontrolling interests and unconsolidated real estate partnerships		(7,083	)
EBITDAre	$	116,284
Pro forma FFO and other adjustments, net (1)		7,019
Quarterly Adjusted EBITDAre	$	123,303
Adjusted EBITDAre	$	493,212