Commission File Number: ~~1-13232~~1-39686 (Apartment ~~Investment and Management Company)~~Income REIT Corp.)

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

The number of shares of Apartment ~~Investment and Management Company~~Income REIT Corp. Class A Common Stock outstanding as of ~~July 31, 2020: 148,865,047~~April 30, 2021: 156,825,674

On December 15, 2020, Apartment Investment and Management Company (“Aimco”) completed the separation of its business into two, separate and distinct, publicly traded companies, Apartment Income REIT Corp. (“AIR”) and Aimco (the “Separation”).

Notwithstanding the legal form of the Separation, for accounting and financial reporting purposes, Aimco is presented as being spun-off from AIR (as it relates to Aimco subsequent to the Separation, the “Spinnee”). This presentation is in accordance with generally accepted accounting principles in the United States, and is due primarily to the relative significance of AIR’s business, as measured in terms of revenue, net income, assets, and other relevant indicators, as compared to Aimco before the Separation. Therefore, AIR is considered the divesting entity and treated as the accounting spinnor, and Aimco is presented as the predecessor (“AIR’s Predecessor”) for AIR’s financial statements. Unless otherwise stated, financial results prior to the Separation on December 15, 2020, include the financial results of AIR’s Predecessor.

This filing combines the quarterly reports on Form 10-Q for the quarterly period ended ~~June 30, 2020,~~March 31, 2021, of ~~Apartment Investment and Management Company, or Aimco, and~~AIR, AIMCO Properties, L.P. (“AIR Operating Partnership”), orand their consolidated subsidiaries. The AIR Operating Partnership’s condensed consolidated financial statements include the ~~Aimco~~accounts of the AIR Operating ~~Partnership. Where it is important to distinguish between~~Partnership and its consolidated subsidiaries. Except as the ~~two entities, we refer to them specifically. Otherwise, references to~~context otherwise requires, “we,” “us,” or “our” ~~mean, collectively, Aimco,~~refer to AIR, the ~~Aimco~~AIR Operating Partnership, and their consolidated ~~entities.~~subsidiaries, collectively.

~~Aimco,~~AIR, a Maryland corporation, is a self-administered and self-managed real estate investment ~~trust, or REIT. Aimco,~~trust. AIR, through wholly-owned subsidiaries, is the general and special limited partner of the ~~Aimco~~AIR Operating Partnership. As of ~~June 30, 2020, Aimco~~March 31, 2021, AIR owned approximately ~~93.5%~~93.6% of the legal interest in the common partnership units of the ~~Aimco~~AIR Operating Partnership and 94.9% of the economic interest in the ~~Aimco~~AIR Operating Partnership. The remaining ~~6.5%~~6.4% legal ~~interest and 5.1% economic~~ interest is owned by third-party limited partners. As the sole general partner of the ~~Aimco~~AIR Operating Partnership, ~~Aimco~~AIR has exclusive control of the ~~Aimco~~AIR Operating Partnership’s day-to-day management.

The ~~Aimco~~AIR Operating Partnership holds all of ~~Aimco’s~~AIR’s assets and manages the daily operations of ~~Aimco’s~~AIR’s business. Pursuant to the ~~Aimco~~AIR Operating Partnership agreement, ~~Aimco~~AIR is required to contribute to the ~~Aimco~~AIR Operating Partnership all proceeds from the offerings of its securities. In exchange for the contribution of such proceeds, ~~Aimco~~AIR receives additional interests in the ~~Aimco~~AIR Operating Partnership with similar terms (e.g., if ~~Aimco~~AIR contributes proceeds of a stock offering, ~~Aimco~~AIR receives partnership units with terms substantially similar to the stock issued by ~~Aimco)~~AIR).

We believe combining the periodic reports of ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership into this single report provides the following benefits:

We operate ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership as one enterprise, the management of ~~Aimco~~AIR directs the management and operations of the ~~Aimco~~AIR Operating Partnership, and the members of the Board of Directors of ~~Aimco~~AIR are identical to those of the ~~Aimco~~AIR Operating Partnership’s general partner.

We believe it is important to understand the few differences between ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership in the context of how ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership operate as a consolidated company. ~~Aimco~~AIR has no assets or liabilities other than its investment in the ~~Aimco~~AIR Operating ~~Partnership.~~Partnership, which is held directly and indirectly through certain intermediate holding companies (in which all of the common stock is owned by AIR). Also, ~~Aimco~~AIR is a corporation that issues publicly traded equity from time to time, whereas the ~~Aimco~~AIR Operating Partnership is a partnership that has no publicly traded equity. Except for the net proceeds from stock offerings by ~~Aimco,~~AIR, which are contributed to the ~~Aimco~~AIR Operating Partnership in exchange for additional limited partnership interests (of a similar type and in an amount equal to the shares of stock sold in the offering), the ~~Aimco~~AIR Operating Partnership generates all remaining capital required by its business. These sources include the ~~Aimco~~AIR Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facility, the issuance of debt and equity securities, including additional partnership units, and proceeds received from the sale of apartment communities.

Equity, partners’ capital, and noncontrolling interests are the main areas of difference between the condensed consolidated financial statements of ~~Aimco~~AIR and those of the ~~Aimco~~AIR Operating Partnership. Interests in the ~~Aimco~~AIR Operating Partnership held by

entities other than ~~Aimco,~~AIR, which we refer to as OP Units, are classified within partners’ capital in the ~~Aimco~~AIR Operating Partnership’s financial statements and as noncontrolling interests in ~~Aimco’s~~AIR’s financial statements.

To help investors understand the differences between ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership, this report provides: separate condensed consolidated financial statements for ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership; a single set of condensed consolidated notes to such financial statements that includes separate discussions of each entity’s stockholders’ equity or partners’ capital, and earnings per share or earnings per unit, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity, where appropriate.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership in order to establish that the requisite certifications have been made and that ~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership are both compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.

							March 31,			December 31,
	June 30, 2020			December 31, 2019			2021			2020
ASSETS
Buildings and improvements	$	6,928,584		$	6,868,543		$	5,712,264		$	6,127,249
Land		1,866,009			1,869,048			1,299,272			1,341,615
Total real estate		8,794,593			8,737,591			7,011,536			7,468,864
Accumulated depreciation		(2,786,104	)		(2,718,284	)		(2,437,147	)		(2,455,505	)
Net real estate		6,008,489			6,019,307			4,574,389			5,013,359
Cash and cash equivalents		398,408			142,902			47,723			44,214
Restricted cash		44,100			34,800			28,023			29,266
Mezzanine investment		293,427			280,258
Notes receivable from Aimco								534,127			534,127
Leased real estate assets								467,013			—
Goodwill								32,286			32,286
Other assets		376,723			351,472			637,943			576,026
Total assets	$	7,121,147		$	6,828,739		$	6,321,504		$	6,229,278

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	4,543,743		$	4,230,590		$	3,568,815		$	3,628,236
Term loan, net		348,440			—			349,827			349,164
Revolving credit facility borrowings		—			275,000			394,550			265,600
Total indebtedness		4,892,183			4,505,590			4,313,192			4,243,000
Accrued liabilities and other		353,787			360,574			606,767			598,736
Total liabilities		5,245,970			4,866,164			4,919,959			4,841,736

Redeemable preferred OP Units		96,449			97,064
Redeemable noncontrolling interests in consolidated real estate partnership		4,492			4,716
Preferred noncontrolling interests in AIR Operating Partnership								79,449			79,449
Commitments and contingencies (Note 4)
Equity:
Common Stock, $0.01 par value, 510,587,500 shares authorized, 148,865,047 and 148,885,197 shares issued/outstanding at June 30, 2020 and December 31, 2019, respectively		1,489			1,489
Perpetual preferred stock								2,000			2,000
Common Stock, $0.01 par value, 1,021,175,000 shares authorized at March 31, 2021 and December 31, 2020, respectively, and 148,974,839 and 148,861,036 shares issued/outstanding at March 31, 2021 and December 31, 2020, respectively								1,490			1,489
Additional paid-in capital		3,491,277			3,497,367			3,430,694			3,432,121
Accumulated other comprehensive income		3,807			4,195			1,100			3,039
Distributions in excess of earnings		(1,798,561	)		(1,722,402	)		(2,112,381	)		(2,131,798	)
Total Aimco equity		1,698,012			1,780,649
Total AIR equity								1,322,903			1,306,851
Noncontrolling interests in consolidated real estate partnerships		(3,190	)		(3,296	)		(64,619	)		(61,943	)
Common noncontrolling interests in Aimco Operating Partnership		79,414			83,442
Common noncontrolling interests in AIR Operating Partnership								63,812			63,185
Total equity		1,774,236			1,860,795			1,322,096			1,308,093
Total liabilities and equity	$	7,121,147		$	6,828,739		$	6,321,504		$	6,229,278

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

REVENUES

Rental and other property revenues

$
218,808

$
224,200

$
443,360

$
454,435

OPERATING EXPENSES

Property operating expenses

74,123

75,647

149,603

154,606

Depreciation and amortization

97,689

91,924

198,165

185,489

General and administrative expenses

9,696

11,498

19,804

21,327

Investment management expenses

1,121

1,406

2,305

2,738

Other expenses, net

4,239

3,621

5,881

8,757

   Total operating expenses

186,868

184,096

375,758

372,917

Interest income

2,843

3,065

7,366

5,791

Interest expense

(48,802
)

(39,541
)

(90,138
)

(80,950
)
Gain on dispositions of real estate

47,238

64,310

47,204

355,783

Mezzanine investment income, net

6,936

—

13,683

—

Income from unconsolidated real estate partnerships

170

231

352

303

   Income before income tax benefit (expense)

40,325

68,169

46,069

362,445

Income tax benefit (expense)

2,879

1,827

6,112

(1,154
)
   Net income

43,204

69,996

52,181

361,291

Noncontrolling interests:

      Net loss (income) attributable to noncontrolling interests in
         consolidated real estate partnerships

17

(70
)

(1
)

(161
)
      Net income attributable to preferred noncontrolling interests
         in Aimco Operating Partnership

(1,859
)

(1,933
)

(3,728
)

(3,867
)
      Net income attributable to common noncontrolling interests
         in Aimco Operating Partnership

(2,107
)

(3,534
)

(2,475
)

(18,671
)
   Net income attributable to noncontrolling interests

(3,949
)

(5,537
)

(6,204
)

(22,699
)
      Net income attributable to Aimco

39,255

64,459

45,977

338,592

      Net income attributable to Aimco preferred stockholders

—

(5,187
)

—

(7,335
)
      Net income attributable to participating securities

(43
)

(38
)

(86
)

(455
)
   Net income attributable to Aimco common stockholders

$
39,212

$
59,234

$
45,891

$
330,802

   Net income attributable to Aimco per common share –
      basic and diluted

$
0.26

$
0.40

$
0.31

$
2.25

   Weighted average common shares outstanding – basic

148,535

148,367

148,527

146,994

   Weighted average common shares outstanding – diluted

148,553

148,599

148,670

147,220

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 (Loss)

Distributions
in Excess
of Earnings

Total Aimco
Equity

Consolidated
Real Estate
Partnerships

Aimco
Operating
Partnership

Total
Equity

Balances at March 31, 2019

5,000

$
125,000

148,758

$
1,488

$
3,495,295

$
4,851

$
(1,742,998
)

$
1,883,636

$
(2,857
)

$
79,493

$
1,960,272

Redemption of Preferred Stock

(5,000
)

(125,000
)

—

—

4,089

—

(4,089
)

(125,000
)

—

—

(125,000
)
Issuance of Aimco Operating Partnership units

—

—

—

—

—

—

—

—

—

3,034

3,034

Redemption of Aimco Operating Partnership units

—

—

70

1

3,422

—

—

3,423

—

(4,998
)

(1,575
)
Amortization of share-based compensation cost

—

—

—

—

1,190

—

—

1,190

—

796

1,986

Effect of changes in ownership for consolidated entities

—

—

—

—

(4,851
)

—

—

(4,851
)

1,042

3,809

—

Purchase of noncontrolling interest in consolidated real estate partnerships

—

—

—

—

—

—

—

—

(917
)

—

(917
)
Change in accumulated other comprehensive income

—

—

—

—

—

15

—

15

—

1

16

Net income

—

—

—

—

—

—

64,459

64,459

70

3,534

68,063

Common Stock dividends

—

—

—

—

—

—

(58,039
)

(58,039
)

—

(58,039
)
Common Stock issued to Common Stockholders in special dividend

—

—

—

—

(516
)

—

—

(516
)

—

—

(516
)
Preferred Stock dividends

—

—

—

—

—

—

(1,098
)

(1,098
)

—

—

(1,098
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(56
)

(3,303
)

(3,359
)
Other, net

—

—

(1
)

(1
)

—

—

—

(1
)

—

—

(1
)
Balances at June 30, 2019

—

$
—

148,827

$
1,488

$
3,498,629

$
4,866

$
(1,741,765
)

$
1,763,218

$
(2,718
)

$
82,366

$
1,842,866

Balances at March 31, 2020

—

$
—

148,700

$
1,487

$
3,488,611

$
4,139

$
(1,776,782
)

$
1,717,455

$
(3,409
)

$
81,502

$
1,795,548

Redemption of Aimco Operating Partnership units

—

—

159

2

5,135

—

—

5,137

—

(5,423
)

(286
)
Amortization of share-based compensation cost

—

—

5

—

1,080

—

—

1,080

—

1,051

2,131

Effect of changes in ownership of consolidated entities

—

—

—

—

(3,579
)

—

—

(3,579
)

36

3,543

—

Change in accumulated other comprehensive income

—

—

—

—

—

(332
)

—

(332
)

—

(23
)

(355
)
Net income

—

—

—

—

—

—

39,255

39,255

107

2,107

41,469

Common Stock dividends

—

—

—

—

—

—

(61,034
)

(61,034
)

—

—

(61,034
)
Distributions to noncontrolling interests

—

—

—

—

—

—

—

—

(35
)

(3,343
)

(3,378
)
Other, net

—

—

1

—

30

—

—

30

111

—

141

Balances at June 30, 2020

—

$
—

148,865

$
1,489

$
3,491,277

$
3,807

$
(1,798,561
)

$
1,698,012

$
(3,190
)

$
79,414

$
1,774,236

	Three Months Ended March 31,
	2021			2020
Net income	$	89,115		$	8,977
Unrealized losses on available for sale debt securities		(2,071	)		(60	)
Comprehensive income		87,044			8,917
Comprehensive income attributable to noncontrolling interests		(5,673	)		(2,251	)
Comprehensive income attributable to AIR	$	81,371		$	6,666

For the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~

	Preferred Stock						Common Stock									Accumulated									Noncontrolling Interests in			Common Noncontrolling Interests in						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 (Loss)			Distributions in Excess of Earnings			Total Aimco Equity			Consolidated Real Estate Partnerships			Aimco Operating Partnership			Total Equity
Balances at December 31, 2018		5,000		$	125,000			144,623		$	1,446		$	3,515,686		$	4,794		$	(1,947,507	)	$	1,699,419		$	(2,967	)	$	67,189		$	1,763,641
Repurchases of Common Stock		—			—			(461	)		(5	)		(20,677	)		—			—			(20,682	)		—			—			(20,682	)
Redemption of Preferred Stock		(5,000	)		(125,000	)		—			—			4,089			—			(4,089	)		(125,000	)		—			—			(125,000	)
Issuance of Aimco Operating Partnership units		—			—			—			—			—			—			—			—			—			3,034			3,034
Redemption of Aimco Operating Partnership units		—			—			70			1			3,422			—			—			3,423			—			(7,555	)		(4,132	)
Amortization of share-based compensation cost		—			—			22			—			3,632			—			—			3,632			—			1,592			5,224
Effect of changes in ownership for consolidated entities		—			—			—			—			(7,019	)		—			—			(7,019	)		1,042			5,977			—
Purchase of noncontrolling interest in consolidated real estate partnerships		—			—			—			—			—			—			—			—			(917	)		—			(917	)
Change in accumulated other comprehensive income		—			—			—			—			—			72			—			72			—			5			77
Net income		—			—			—			—			—			—			338,592			338,592			161			18,671			357,424
Common Stock dividends		—			—			—			—			—			—			(125,514	)		(125,514	)		—			—			(125,514	)
Common Stock issued to Common Stockholders in special dividend		—			—			4,492			45			(561	)		—			—			(516	)		—			—			(516	)
Preferred Stock dividends		—			—			—			—			—			—			(3,247	)		(3,247	)		—			—			(3,247	)
Distributions to noncontrolling interests		—			—			—			—			—			—			—			—			(56	)		(6,547	)		(6,603	)
Other, net		—			—			81			1			57			—			—			58			19			—			77
Balances at June 30, 2019		—		$	—			148,827		$	1,488		$	3,498,629		$	4,866		$	(1,741,765	)	$	1,763,218		$	(2,718	)	$	82,366		$	1,842,866
																																		Shares Issued		Amount		Shares Issued			Amount			Additional Paid- in Capital			Other Comprehensive Income (Loss)			Distributions in Excess of Earnings		��	Total AIR's Predecessor Equity			Consolidated Real Estate Partnerships			AIR Operating Partnership			Total Equity
Balances at December 31, 2019		—		$	—			148,885		$	1,489		$	3,497,367		$	4,195		$	(1,722,402	)	$	1,780,649		$	(3,296	)	$	83,442		$	1,860,795			—	$	—		120,242		$	1,202		$	3,497,654		$	4,195		$	(1,722,402	)	$	1,780,649		$	(3,296	)	$	83,442		$	1,860,795
Repurchases of Common Stock		—			—			(234	)		(2	)		(10,002	)		—			—			(10,004	)		—			—			(10,004	)		—		—		(189	)		(2	)		(10,002	)		—			—			(10,004	)		—			—			(10,004	)
Redemption of Aimco Operating Partnership units		—			—			159			2			5,135			—			—			5,137			—			(6,392	)		(1,255	)
Redemption of AIR Operating Partnership units																																			—		—		—			—			—			—			—			—			—			(969	)		(969	)
Amortization of share-based compensation cost		—			—			25			—			3,009			—			—			3,009			—			2,102			5,111			—		—		16			—			1,929			—			—			1,929			—			1,051			2,980
Effect of changes in ownership of consolidated entities		—			—			—			—			(4,348	)		—			—			(4,348	)		36			4,312			—
Effect of changes in ownership for consolidated entities																																			—		—		—			—			(769	)		—			—			(769	)		—			769			0
Cumulative effect of a change in accounting principle		—			—			—			—			—			—			(277	)		(277	)		—			—			(277	)		—		—		—			—			—			—			(277	)		(277	)		—			—			(277	)
Change in accumulated other comprehensive income		—			—			—			—			—			(388	)		—			(388	)		—			(27	)		(415	)		—		—		—			—			—			(56	)		—			(56	)		—			(4	)		(60	)
Net income		—			—			—			—			—			—			45,977			45,977			225			2,475			48,677			—		—		—			—			—			—			6,722			6,722			118			368			7,208
Common Stock dividends		—			—			—			—			—			—			(121,859	)		(121,859	)		—			—			(121,859	)		—		—		—			—			—			—			(60,825	)		(60,825	)		—			—			(60,825	)
Distributions to noncontrolling interests		—			—			—			—			—			—			—			—			(108	)		(6,498	)		(6,606	)		—		—		—			—			—			—			—			—			(73	)		(3,155	)		(3,228	)
Other, net		—			—			30			—			116			—			—			116			(47	)		—			69			—		—		23			—			86			—			0			86			(158	)		—			(72	)
Balances at June 30, 2020		—		$	—			148,865		$	1,489		$	3,491,277		$	3,807		$	(1,798,561	)	$	1,698,012		$	(3,190	)	$	79,414		$	1,774,236
Balances at March 31, 2020																																			0	$	0		120,092		$	1,200		$	3,488,898		$	4,139		$	(1,776,782	)	$	1,717,455		$	(3,409	)	$	81,502		$	1,795,548

Balances at December 31, 2020																																			20	$	2,000		148,861		$	1,489		$	3,432,121		$	3,039		$	(2,131,798	)	$	1,306,851		$	(61,943	)	$	63,185		$	1,308,093
Redemption of AIR Operating Partnership units																																			—		—		—			—			—			—			—			—			—			(3,223	)		(3,223	)
Amortization of share-based compensation cost																																			—		—		33			—			1,915			—			—			1,915			—			723			2,638
Effect of changes in ownership of consolidated entities																																			—		—		—			—			(2,590	)		—			—			(2,590	)		—			2,590			0
Change in accumulated other comprehensive income																																			—		—		—			—			—			(1,939	)		—			(1,939	)		—			(132	)		(2,071	)
Net income (loss)																																			—		—		—			—			—			—			83,310			83,310			(235	)		4,436			87,511
Common Stock dividends																																			—		—		—			—			—			—			(63,858	)		(63,858	)		—			—			(63,858	)
Preferred Stock dividends																																			—		—		—			—			—			—			(50	)		(50	)		—			—			(50	)
Distributions to noncontrolling interests																																			—		—		—			—			—			—			—			—			(1,402	)		(3,767	)		(5,169	)
Other, net																																			—		—		81			1			(752	)		—			15			(736	)		(1,039	)		—			(1,775	)
Balances at March 31, 2021																																			20	$	2,000		148,975		$	1,490		$	3,430,694		$	1,100		$	(2,112,381	)	$	1,322,903		$	(64,619	)	$	63,812		$	1,322,096

	Six Months Ended June 30,						Three Months Ended March 31,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	52,181		$	361,291		$	89,115		$	8,977
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		198,165			185,489			75,280			81,446
Gain on dispositions of real estate		(47,204	)		(355,783	)
Income tax (benefit) expense		(6,112	)		1,154
Gain on derecognition of leased properties and dispositions of real estate								(84,032	)		(13	)
Income tax expense (benefit)								3,080			(1,314	)
Other adjustments		7,411			6,443			3,194			3,022
Discontinued operations:
Depreciation and amortization								0			19,030
Income tax benefit								0			(1,919	)
Other non-cash adjustments, net								0			182
Net changes in operating assets and operating liabilities		(20,084	)		(28,555	)		(37,467	)		(31,995	)
Net cash provided by operating activities		184,357			170,039			49,170			77,416
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate and deposits related to purchases of real estate		(7,794	)		(43,743	)		0			(2,733	)
Capital expenditures		(182,348	)		(176,488	)		(39,075	)		(88,189	)
Proceeds from dispositions of real estate		36,869			422,456
Purchases of corporate assets		(8,743	)		(7,186	)		(784	)		(5,104	)
Other investing activities		1,946			2,486			(483	)		4,665
Net cash (used in) provided by investing activities		(160,070	)		197,525
Capital expenditures of discontinued operations								0			(6,653	)
Net cash used in investing activities								(40,342	)		(98,014	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from non-recourse property debt		608,756			—
Principal repayments on non-recourse property debt		(274,347	)		(207,790	)
Proceeds from term loan		350,000			—
Net (repayments of) borrowings on revolving credit facility		(275,000	)		134,600
Principal repayments on non-recourse property debt of continuing operations								(60,467	)		(20,173	)
Net borrowings on revolving credit facility								128,950			318,845
Payment of debt issuance costs								(121	)		0
Payment of debt extinguishment costs								(519	)		0
Repurchases of Common Stock		(10,004	)		(20,682	)		0			(10,004	)
Repurchases of Preferred Stock		—			(125,000	)
Payment of dividends to holders of Common Stock		(122,058	)		(125,350	)		(64,314	)		(61,116	)
Payment of dividends to holders of Preferred Stock		—			(3,247	)		(50	)		0
Payment of distributions to noncontrolling interests		(10,639	)		(10,937	)		(6,835	)		(5,442	)
Redemptions of noncontrolling interests in the Aimco Operating Partnership		(1,870	)		(4,244	)
Purchases of noncontrolling interests in consolidated real estate partnerships		—			(917	)
Redemptions of noncontrolling interests in the AIR Operating Partnership								(3,223	)		(1,584	)
Principal repayments on non-recourse property debt of discontinued operations								0			(2,449	)
Other financing activities		(24,319	)		(10,685	)		17			(365	)
Net cash provided by (used in) financing activities		240,519			(374,252	)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		264,806			(6,688	)
Net cash (used in) provided by financing activities								(6,562	)		217,712
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH								2,266			197,114
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH OF DISCONTINUED OPERATIONS								0			1,009
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH OF CONTINUING OPERATIONS								2,266			198,123
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD		177,702			72,595			73,480			166,541
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	442,508		$	65,907		$	75,746		$	364,664

							March 31,			December 31,
	June 30, 2020			December 31, 2019			2021			2020
ASSETS
Buildings and improvements	$	6,928,584		$	6,868,543		$	5,712,264		$	6,127,249
Land		1,866,009			1,869,048			1,299,272			1,341,615
Total real estate		8,794,593			8,737,591			7,011,536			7,468,864
Accumulated depreciation		(2,786,104	)		(2,718,284	)		(2,437,147	)		(2,455,505	)
Net real estate		6,008,489			6,019,307			4,574,389			5,013,359
Cash and cash equivalents		398,408			142,902			47,723			44,214
Restricted cash		44,100			34,800			28,023			29,266
Mezzanine investment		293,427			280,258
Notes receivable from Aimco								534,127			534,127
Leased real estate assets								467,013			—
Goodwill								32,286			32,286
Other assets		376,723			351,472			637,943			576,026
Total assets	$	7,121,147		$	6,828,739		$	6,321,504		$	6,229,278

LIABILITIES AND EQUITY
Non-recourse property debt, net	$	4,543,743		$	4,230,590		$	3,568,815		$	3,628,236
Term loan, net		348,440			—			349,827			349,164
Revolving credit facility borrowings		—			275,000			394,550			265,600
Total indebtedness		4,892,183			4,505,590			4,313,192			4,243,000
Accrued liabilities and other		353,787			360,574			606,767			598,736
Total liabilities		5,245,970			4,866,164			4,919,959			4,841,736

Redeemable preferred OP Units		96,449			97,064
Redeemable noncontrolling interests in consolidated real estate partnership		4,492			4,716
Redeemable preferred units								79,449			79,449
Commitments and contingencies (Note 4)
Partners’ capital:
Preferred units								2,000			2,000
General Partner and Special Limited Partner		1,698,012			1,780,649			1,320,903			1,304,851
Limited Partners		79,414			83,442			63,812			63,185
Partners’ capital attributable to the Aimco Operating Partnership		1,777,426			1,864,091
Partners’ capital attributable to the AIR Operating Partnership								1,386,715			1,370,036
Noncontrolling interests in consolidated real estate partnerships		(3,190	)		(3,296	)		(64,619	)		(61,943	)
Total partners’ capital		1,774,236			1,860,795			1,322,096			1,308,093
Total liabilities and partners’ capital	$	7,121,147		$	6,828,739		$	6,321,504		$	6,229,278

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020
REVENUES
Rental and other property revenues	$	218,808		$	224,200		$	443,360		$	454,435		$	174,730		$	186,043
Other revenues														1,683			—
Total revenues														176,413			186,043

OPERATING EXPENSES
Property operating expenses		74,123			75,647			149,603			154,606			64,617			65,962
Depreciation and amortization		97,689			91,924			198,165			185,489			75,280			81,446
General and administrative expenses		9,696			11,498			19,804			21,327			4,414			7,489
Investment management expenses		1,121			1,406			2,305			2,738
Other expenses, net		4,239			3,621			5,881			8,757			2,876			1,491
Total operating expenses		186,868			184,096			375,758			372,917			147,187			156,388

Interest income		2,843			3,065			7,366			5,791			15,972			3,989
Interest expense		(48,802	)		(39,541	)		(90,138	)		(80,950	)		(37,035	)		(36,806	)
Gain on dispositions of real estate		47,238			64,310			47,204			355,783
Gain on derecognition of leased properties and dispositions of real estate														84,032			13
Mezzanine investment income, net		6,936			—			13,683			—			0			6,747
Income from unconsolidated real estate partnerships		170			231			352			303
Income before income tax benefit (expense)		40,325			68,169			46,069			362,445
Income tax benefit (expense)		2,879			1,827			6,112			(1,154	)
Income from continuing operations before income tax (expense) benefit and discontinued operations														92,195			3,598
Income tax (expense) benefit														(3,080	)		1,314
Income from continuing operations														89,115			4,912
Income from discontinued operations, net of tax														—			4,065
Net income		43,204			69,996			52,181			361,291			89,115			8,977
Net loss (income) attributable to noncontrolling interests in consolidated real estate partnerships		17			(70	)		(1	)		(161	)		235			(18	)
Net income attributable to the Aimco Operating Partnership		43,221			69,926			52,180			361,130
Net income attributable to the Aimco Operating Partnership’s preferred unitholders		(1,859	)		(7,120	)		(3,728	)		(11,202	)
Net income attributable to the AIR Operating Partnership														89,350			8,959
Net income attributable to the AIR Operating Partnership’s preferred unitholders														(1,654	)		(1,869	)
Net income attributable to participating securities		(43	)		11			(86	)		(472	)		(64	)		(43	)
Net income attributable to the Aimco Operating Partnership’s common unitholders	$	41,319		$	62,817		$	48,366		$	349,456
Net income attributable to the Aimco Operating Partnership per common unit – basic and diluted	$	0.26		$	0.40		$	0.31		$	2.25
Net income attributable to the AIR Operating Partnership’s common unitholders													$	87,632		$	7,047

Earnings per common unit – basic and diluted:
Income from continuing operations attributable to the AIR Operating Partnership per common unit													$	0.56		$	0.03
Income from discontinued operations attributable to the AIR Operating Partnership per common unit														—			0.03
Net income attributable to the AIR Operating Partnership per common unit – basic and diluted													$	0.56		$	0.06

Weighted-average common units outstanding – basic		156,509			156,637			156,584			155,158			156,527			126,521
Weighted-average common units outstanding – diluted		156,527			157,018			156,802			155,517			156,746			126,798

	Preferred Units			General Partner and Special Limited Partner			Limited Partners			Partners’ Capital Attributable to the Aimco Operating Partnership			Noncontrolling Interests in Consolidated Real Estate Partnerships			Total Partners’ Capital			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, 2019	$	125,000		$	1,758,636		$	79,493		$	1,963,129		$	(2,857	)	$	1,960,272
Redemption of preferred units		(125,000	)		—			—			(125,000	)		—			(125,000	)
Issuance of Aimco Operating Partnership units		—			—			3,034			3,034			—			3,034
Redemption of Aimco Operating Partnership units		—			3,423			(4,998	)		(1,575	)		—			(1,575	)
Balances at December 31, 2019																			$	—	$	1,780,649		$	83,442		$	1,864,091		$	(3,296	)	$	1,860,795
Repurchases of common partnership units held by AIR's Predecessor																				—		(10,004	)		—			(10,004	)		—			(10,004	)
Redemption of common partnership units																				—		—			(969	)		(969	)		—			(969	)
Amortization of share-based compensation cost		—			1,190			796			1,986			—			1,986			—		1,929			1,051			2,980			—			2,980
Effect of changes in ownership of consolidated entities		—			(4,851	)		3,809			(1,042	)		1,042			—			—		(769	)		769			—			—			—
Purchase of noncontrolling interest in consolidated real estate partnerships		—			—			—			—			(917	)		(917	)
Change in accumulated other comprehensive income		—			15			1			16			—			16
Net income		—			64,459			3,534			67,993			70			68,063
Distributions to common unitholders		—			(58,039	)		(3,303	)		(61,342	)		—			(61,342	)
Common partnership units issued to common unitholders in special distribution		—			(516	)		—			(516	)		—			(516	)
Distributions to preferred unitholders		—			(1,098	)		—			(1,098	)		—			(1,098	)
Distributions paid to noncontrolling interests in consolidated real estate partnerships		—			—			—			—			(56	)		(56	)
Other, net		—			(1	)		—			(1	)		—			(1	)
Balances at June 30, 2019	$	—		$	1,763,218		$	82,366		$	1,845,584		$	(2,718	)	$	1,842,866

Balances at March 31, 2020	$	—		$	1,717,455		$	81,502		$	1,798,957		$	(3,409	)	$	1,795,548
Redemption of Aimco Operating Partnership units		—			5,137			(5,423	)		(286	)		—			(286	)
Amortization of share-based compensation cost		—			1,080			1,051			2,131			—			2,131
Effect of changes in ownership of consolidated entities		—			(3,579	)		3,543			(36	)		36			—
Cumulative effect of a change in accounting principle																				—		(277	)		—			(277	)		—			(277	)
Change in accumulated other comprehensive income		—			(332	)		(23	)		(355	)		—			(355	)		—		(56	)		(4	)		(60	)		—			(60	)
Net income		—			39,255			2,107			41,362			107			41,469			—		6,722			368			7,090			118			7,208
Distributions to common unitholders		—			(61,034	)		(3,343	)		(64,377	)		—			(64,377	)		—		(60,825	)		(3,155	)		(63,980	)		—			(63,980	)
Distributions to noncontrolling interests		—			—			—			—			(35	)		(35	)		—		—			—			—			(73	)		(73	)
Other, net		—			30			—			30			111			141			—		86			—			86			(158	)		(72	)
Balances at June 30, 2020	$	—		$	1,698,012		$	79,414		$	1,777,426		$	(3,190	)	$	1,774,236
Balances at March 31, 2020																			$	—	$	1,717,455		$	81,502		$	1,798,957		$	(3,409	)	$	1,795,548

Balances at December 31, 2020																			$	2,000	$	1,304,851		$	63,185		$	1,370,036		$	(61,943	)	$	1,308,093
Redemption of AIR Operating Partnership units																				—		—			(3,223	)		(3,223	)		—			(3,223	)
Amortization of share-based compensation cost																				—		1,915			723			2,638			—			2,638
Effect of changes in ownership of consolidated entities																				—		(2,590	)		2,590			—			—			—
Change in accumulated other comprehensive income																				—		(1,939	)		(132	)		(2,071	)		—			(2,071	)
Net income (loss)																				—		83,310			4,436			87,746			(235	)		87,511
Distributions to common unitholders																				—		(63,858	)		(3,767	)		(67,625	)		—			(67,625	)
Distributions to preferred unitholders																				—		(50	)		—			(50	)		—			(50	)
Distributions to noncontrolling interests																				—		—			—			—			(1,402	)		(1,402	)
Other, net																				—		(736	)		—			(736	)		(1,039	)		(1,775	)
Balances at March 31, 2021																			$	2,000	$	1,320,903		$	63,812		$	1,386,715		$	(64,619	)	$	1,322,096

Preferred Units

General Partner
and Special
Limited Partner

Limited Partners

Partners’ Capital
Attributable to
the Aimco
Operating
Partnership

Noncontrolling
Interests in
Consolidated
Real Estate
Partnerships

Total Partners’
Capital

Balances at December 31, 2018

$
125,000

$
1,574,419

$
67,189

$
1,766,608

$
(2,967
)

$
1,763,641

Repurchases of common partnership units

—

(20,682
)

—

(20,682
)

—

(20,682
)
Redemption of preferred units

(125,000
)

—

—

(125,000
)

—

(125,000
)
Issuance of Aimco Operating Partnership units

—

—

3,034

3,034

—

3,034

Redemption of Aimco Operating Partnership units

—

3,423

(7,555
)

(4,132
)

—

(4,132
)
Amortization of share-based compensation cost

—

3,632

1,592

5,224

—

5,224

Effect of changes in ownership of consolidated entities

—

(7,019
)

5,977

(1,042
)

1,042

—

Purchase of noncontrolling interest in consolidated
   real estate partnerships

—

—

—

—

(917
)

(917
)
Change in accumulated other comprehensive income

—

72

5

77

—

77

Net income

—

338,592

18,671

357,263

161

357,424

Distributions to common unitholders

—

(125,514
)

—

(125,514
)

—

(125,514
)
Common partnership units issued to common unitholders
   in special distribution

—

(516
)

—

(516
)

—

(516
)
Distributions to preferred unitholders

—

(3,247
)

—

(3,247
)

—

(3,247
)
Distributions paid to noncontrolling interests in
   consolidated real estate partnerships

—

—

(6,547
)

(6,547
)

(56
)

(6,603
)
Other, net

—

58

—

58

19

77

Balances at June 30, 2019

$
—

$
1,763,218

$
82,366

$
1,845,584

$
(2,718
)

$
1,842,866

Balances at December 31, 2019

$
—

$
1,780,649

$
83,442

$
1,864,091

$
(3,296
)

$
1,860,795

Repurchases of common partnership units

—

(10,004
)

—

(10,004
)

—

(10,004
)
Redemption of Aimco Operating Partnership units

—

5,137

(6,392
)

(1,255
)

—

(1,255
)
Amortization of share-based compensation cost

—

3,009

2,102

5,111

—

5,111

Effect of changes in ownership of consolidated entities

—

(4,348
)

4,312

(36
)

36

—

Cumulative effect of a change in accounting principle

—

(277
)

—

(277
)

—

(277
)
Change in accumulated other comprehensive income

—

(388
)

(27
)

(415
)

—

(415
)
Net income

—

45,977

2,475

48,452

225

48,677

Distributions to common unitholders

—

(121,859
)

(6,498
)

(128,357
)

—

(128,357
)
Distributions to noncontrolling interests

—

—

—

—

(108
)

(108
)
Other, net

—

116

—

116

(47
)

69

Balances at June 30, 2020

$
—

$
1,698,012

$
79,414

$
1,777,426

$
(3,190
)

$
1,774,236

	Three Months Ended March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	89,115		$	8,977
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		75,280			81,446
Gain on derecognition of leased properties and dispositions of real estate		(84,032	)		(13	)
Income tax expense (benefit)		3,080			(1,314	)
Other adjustments		3,194			3,022
Discontinued operations:
Depreciation and amortization		0			19,030
Income tax benefit		0			(1,919	)
Other non-cash adjustments, net		0			182
Net changes in operating assets and operating liabilities		(37,467	)		(31,995	)
Net cash provided by operating activities		49,170			77,416
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate and deposits related to purchases of real estate		0			(2,733	)
Capital expenditures		(39,075	)		(88,189	)
Purchases of corporate assets		(784	)		(5,104	)
Other investing activities		(483	)		4,665
Capital expenditures of discontinued operations		0			(6,653	)
Net cash used in investing activities		(40,342	)		(98,014	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on non-recourse property debt of continuing operations		(60,467	)		(20,173	)
Net borrowings on revolving credit facility		128,950			318,845
Payment of debt issuance costs		(121	)		0
Payment of debt extinguishment costs		(519	)		0
Repurchases of common partnership units held by General Partner and Special Limited Partner		0			(10,004	)
Payment of distributions to General Partner and Special Limited Partner		(64,314	)		(61,116	)
Payment of distributions to Limited Partners		(3,830	)		(3,492	)
Payment of distributions to preferred units		(1,654	)		(1,869	)
Payment of distributions to noncontrolling interests		(1,401	)		(81	)
Redemption of common and preferred units		(3,223	)		(1,584	)
Principal repayments on non-recourse property debt of discontinued operations		0			(2,449	)
Other financing activities		17			(365	)
Net cash (used in) provided by financing activities		(6,562	)		217,712
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		2,266			197,114
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH OF DISCONTINUED OPERATIONS		0			1,009
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH OF CONTINUING OPERATIONS		2,266			198,123
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD		73,480			166,541
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	75,746		$	364,664

The accompanying condensed consolidated financial statements include the accounts of Apartment ~~Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. Aimco is a self-administered and self-managed real estate investment trust, or REIT.~~Income REIT Corp. (“AIR”), AIMCO Properties, L.P. (“AIR Operating Partnership”), orand their consolidated subsidiaries. The AIR Operating Partnership’s condensed consolidated financial statements include the Aimco Operating Partnership, is a Delaware limited partnership formed on May 16, 1994, to conduct our business, which is focused on the ownership, management, redevelopment, and some development of quality apartment communities located in severalaccounts of the ~~largest markets in the United States.~~

Aimco, through its wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, holds a majority of the ownership interests in the Aimco Operating Partnership. Aimco conducts all of its business and owns all of its assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as OP Units. OP Units include common partnership units, which we refer to as common OP Units, as well as preferred partnership units, which we refer to as preferred OP Units. As of June 30, 2020, after elimination of units held by consolidated subsidiaries, the Aimco Operating Partnership had 159,195,031 common OP Units outstanding. As of June 30, 2020, Aimco owned 148,865,047 of the common OP Units of the AimcoAIR Operating Partnership and ~~Aimco had an equal number of shares of~~ its ~~Class A Common Stock outstanding, which we refer to as Common Stock. Aimco’s ownership of the total common OP units outstanding represents a 93.5% legal interest~~consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in ~~the Aimco Operating Partnership and a 94.9% economic interest.~~consolidation.

Except as the context otherwise requires, “we,” “our,” and “us” refer to ~~Aimco,~~AIR, the ~~Aimco~~AIR Operating Partnership, and their consolidated subsidiaries, collectively.

We own and operate a portfolio of apartment communities, diversified by both geography and price point, in 17 states and the District of Columbia. As of June 30, 2020, our portfolio included 125 apartment communities with 32,938 apartment homes in which we held an average ownership of approximately 99%. We consolidated 121 of these apartment communities with 32,796 apartment homes.

~~Note 2 — Basis of Presentation and Summary of Significant Accounting Policies~~

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with ~~GAAP~~generally accepted accounting principles in the U.S. (“GAAP”), have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation have been included. Operating results for the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020.~~2021.

The condensed consolidated balance sheets of ~~Aimco~~AIR, the AIR Operating Partnership, and ~~the Aimco Operating Partnership~~their consolidated subsidiaries as of December 31, ~~2019,~~2020, have been derived from their respective audited financial statements at that date, but do not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in ~~Aimco’s~~AIR’s and the ~~Aimco~~AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. Except where indicated, the footnotes refer to ~~both Aimco and~~AIR, the ~~Aimco Operating Partnership.~~

~~Aimco’s accompanying condensed consolidated financial statements include the accounts of Aimco, the Aimco~~AIR Operating Partnership and their consolidated ~~subsidiaries.~~ subsidiaries, collectively.

On December 15, 2020, Apartment Investment and Management Company (“Aimco”) completed the separation of its business into two, separate and distinct, publicly traded companies, AIR and Aimco ~~Operating Partnership’s~~(the “Separation”).

Notwithstanding the legal form of the Separation, for accounting and financial reporting purposes, Aimco is presented as being spun-off from AIR (as it relates to Aimco subsequent to the Separation, the “Spinnee”). This presentation is in accordance with GAAP, and is due primarily to the relative significance of AIR’s business, as measured in terms of revenues, net income, assets, and other relevant indicators, as compared to Aimco before the Separation. Therefore, AIR is considered the divesting entity and treated as the accounting spinnor, and Aimco is presented as the predecessor (“AIR’s Predecessor”) for AIR’s financial statements. Unless otherwise stated, financial results prior to the Separation on December 15, 2020 include the financial results of AIR’s Predecessor.

The financial results attributable to the apartment communities retained by Aimco in the Separation are presented as discontinued operations. Unless otherwise noted, all disclosures in the notes accompanying the condensed consolidated financial statements ~~include the accounts~~reflect only continuing operations. Please see Note 9 for further details regarding our discontinued operations.

AIR is a self-administered and self-managed real estate investment trust (“REIT”). AIR owns, through its wholly-owned subsidiaries, all of the ~~Aimco~~common equity, the general partner interest, and special limited partner interest in AIR Operating Partnership, ~~and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated~~a Delaware limited partnership originally incorporated on May 16, 1994. AIR Operating Partnership conducts all of the business of AIR, which is focused on the ownership of stabilized multi-family properties located in ~~consolidation.~~top markets

including eight important geographic concentrations: Boston; Philadelphia; Greater Washington D.C.; Miami; Denver; the San Francisco Bay Area; Los Angeles; and San Diego.

Interests in the AIR Operating Partnership that are held by limited partners other than AIR are referred to as OP Units. OP Units include common partnership units, which we refer to as common OP Units, as well as preferred partnership units, which we refer to as preferred OP Units. As of March 31, 2021, after elimination of units held by consolidated subsidiaries, the AIR Operating Partnership had 159,101,296 common OP Units outstanding. As of March 31, 2021, AIR owned 148,974,839 of the common OP Units of the AIR Operating Partnership and AIR had an equal number of shares of its Class A Common Stock outstanding, which we refer to as Common Stock. AIR’s ownership of the total common OP Units outstanding represents a 93.6% legal interest in the AIR Operating Partnership and a 94.9% economic interest.

We own and operate a portfolio of apartment communities, diversified by both geography and price point, in 12 states and the District of Columbia. As of March 31, 2021, our portfolio included 95 apartment communities with 25,722 apartment homes in which we held an average ownership of approximately 93%. We also have 4 properties that we leased to Aimco for redevelopment and development.

We consolidate a variable interest entity ~~or VIE,~~(“VIE”), in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.~~As of June 30, 2020, and December 31, 2019, Aimco consolidated 5 and 6 VIEs, respectively, in addition to the Aimco Operating Partnership.~~

As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a partner in a limited partnership or a member of a limited liability company. Interests in the ~~Aimco~~AIR Operating Partnership that are held by limited partners other than ~~Aimco~~AIR are reflected in ~~Aimco’s~~AIR’s accompanying condensed consolidated balance sheets as noncontrolling interests in the ~~Aimco~~AIR Operating Partnership. Interests in partnerships consolidated by the ~~Aimco~~AIR Operating Partnership that are held by third parties are reflected in ~~our~~AIR’s accompanying condensed consolidated balance sheets as noncontrolling interests in consolidated real estate partnerships.

We have an interest in a partnership that owns Parkmerced Apartments, which meets the definition of a VIE. However, we are not the primary beneficiary and do not consolidate this partnership. We loaned $275.0 million to the partnership, which accrues interest at 10% per annum with a ~~five-year~~ ~~term and the right to extend for a second~~ ~~five-year~~ term. Our investment balance of $293.4 million, reflected in mezzanine investment in our condensed consolidated balance sheets, consists primarily of notes receivable and represents our maximum exposure to loss in this VIE.

As described in Note 5, the preferred OP Units may be redeemed at the holder’s option and are therefore presented within temporary equity in ~~Aimco’s~~AIR’s condensed consolidated balance sheets and within temporary capital in the ~~Aimco~~AIR Operating Partnership’s condensed consolidated balance sheets. The following table presents a ~~reconciliation~~rollforward of the ~~Aimco~~AIR Operating Partnership’s preferred OP Units from December 31, ~~2019,~~2020, to ~~June 30, 2020~~March 31, 2021 (in thousands):

The ~~Aimco~~AIR Operating Partnership has outstanding various classes of redeemable preferred OP Units. As of ~~June 30,~~March 31, 2021 and December 31, 2020, the ~~Aimco~~AIR Operating Partnership had ~~3,618,802~~2,938,802 redeemable preferred OP Units issued and ~~outstanding with a total redemption value of $96.4 million.~~outstanding. Distributions per annum range from 1.92% to 8.75% per class and $0.48 to $8.00 per unit.

The majority of lease payments we receive from our residents and tenants are fixed. We receive variable payments from our residents and ~~commercial~~ tenants primarily for utility reimbursements. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ our total lease income, included in continuing operations, was comprised of the following amounts for all operating leases (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,					Three Months Ended March 31,
	2020			2019		2020			2019		2021		2020
Fixed lease income	$	205,736		$	209,890	$	419,152		$	425,471	$	163,968	$	178,027
Variable lease income		12,649			13,608		26,264			27,752		10,459		10,554
Straight-line rent write-off (1)		(19	)		—		(2,927	)		—		—		(2,850	)
Total lease income	$	218,366		$	223,498	$	442,489		$	453,223	$	174,427	$	185,731

~~In response~~On January 1, 2021, we leased 4 redevelopment and development properties to the ~~economic effects of the COVID-19 pandemic, some jurisdictions where our communities~~Spinnee. The leases are ~~located, such~~being accounted for as ~~Los Angeles, Philadelphia, and New York City, have enacted protections~~sales-type leases. Please see Note 9 for residents and commercial tenants, including government mandated rent deferrals, rent freezes, repayment extensions, fee abatement measures or concessions, and prohibitions on lease terminations or evictions for tenants. Some states and municipalities are also implementing rental assistance programs and encouraging landlord-tenant negotiations.

On April 10, 2020, the Financial Accounting Standards Board, or FASB, issued a Staff Q&A to respond to some frequently asked questions about accounting for lease concessions, including deferrals or reductions of future lease payments.

Consequently, in accordance with the Staff Q&A issued by the FASB, we may elect to record rent relief when granted rather than over the remaining term of the lease. Our commercial tenants represent 3.1% of revenue for the three months ended June 30, 2020. For the three and six months ended June 30, 2020, we granted to commercial tenants $0.4 million in rent relief and elected to record this as a reduction of variable lease income in the table above.further discussion.

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates.

~~For~~On November 30, 2020, AIR’s Predecessor and the ~~2020 presentation~~Aimco Operating Partnership effected a reverse split of ~~our condensed consolidated statements~~Common Stock and common partnership units, respectively, at a ratio of ~~operations, we have added a caption~~one share or unit for investment management expenses. We have reclassified certain items from property operating expenses, general and administrative expenses, and other expenses, net, in our 2019 presentation to conform to the current presentation.

~~On January 1, 2020, we adopted ASC 326,~~ ~~Financial Instruments – Credit Losses, issued by the FASB which changes the method and timing of the recognition of credit losses~~every 1.23821 shares or units outstanding on financial assets. The standard requires us to estimate and record credit losses over the life of a financial instrument, including receivables, at its inception. Our notes receivable and investments in available for sale, or AFS, debt securities are subject to the new standard. For AFS debt securities, the new standard requires us to estimate a credit loss if the fair value of the instruments is less than the carrying value of the instruments.

We adopted the credit loss standard using the modified-retrospective approach. We recorded a cumulative-effect adjustment for the estimated credit loss associated with our notes receivable of $0.3 million in distributions in excess of earnings and partners’ capital in our condensed consolidated balance sheets as of January 1, 2020. As of the date of ~~adoption,~~effectiveness. The accounting guidance for recapitalization events requires that we revise AIR’s equity and the ~~fair value~~AIR Operating Partnership’s partners’ capital as if the reverse split had occurred at the beginning of ~~our AFS debt securities exceeded their carrying value~~the earliest period presented. As such, we have revised the outstanding share and ~~0 estimate~~unit counts, presentation of ~~credit loss was required~~share and unit activity, and earnings per share and unit, as if the reverse split had occurred on January 1, 2020.

As previously stated in Note 1, the financial results for ~~these instruments.~~the three months ended March 31, 2020, include the financial results of AIR’s Predecessor, and the financial results attributable to the apartment communities retained by Aimco in the Separation are presented as discontinued operations.

On April ~~20, 2020,~~14, 2021, we ~~secured~~closed a ~~$350.0~~new $1.4 billion credit facility, providing four-to-five-year money at a current all-in cost of 1.6%. The facility is comprised of a $600 million revolving credit facility and $800 million of variable rate term loans. Term loan proceeds are being used to extend the maturity of our current $350 million term loan and are expected to repay future debt maturities.

The $800 million of term loans are priced at a LIBOR spread of 100 basis points, with a LIBOR floor of 0.00%, 98 basis points lower than our previous term loan. Borrowing costs under the new revolving credit facility are 10 basis points lower than under our previous facility. The ~~loan matures on April 20, 2021, includes a~~ ~~one-year~~ ~~extension option, and~~revolving credit facility currently bears interest at a 30-day LIBOR plus ~~1.85%,~~0.90%. The facility allows for an additional one basis point margin reduction if certain environmental, social, and governance targets are achieved. The term of the revolver ends April 14, 2025, with two six-month extension options.

• $150 million maturing on December 15, 2023, with two one-year extension options;

• $300 million maturing on December 15, 2024, with a ~~50-basis point LIBOR floor. Proceeds from the loan were used primarily~~one-year extension option;

On April 23, 2021, we issued and sold 7.825 million shares of our Class A Common Stock for $43.766 per share in a private placement to ~~repay borrowings on our revolving credit facility.~~

~~During the three and six months ended June 30, 2020, we sold 1 apartment community with 219 apartment homes~~a large global real estate-focused investment firm for a ~~gain on disposition~~cash purchase price of ~~$47.2~~$342 million. ~~The apartment community sold in 2020 was in a lower-rated location within our primary markets and had average revenues per apartment home significantly below those of our retained portfolio.~~

During the three months ended June 30, 2019, we sold 1 apartment community with 399 apartment homes for a gain on disposition of $64.3 million. During the six months ended June 30, 2019, we sold 8 apartment communities with 2,605 apartment homes for a gain on dispositions of $355.8 million.

From time to time we may be marketing for sale certain apartment communities that are inconsistent with our long-term investment strategy. At the end of each reporting period we evaluate whether such communities meet the criteria to be classified as held for sale. As of June 30, 2020, 0 apartment communities were classified as held for sale. Subsequent to June 30, 2020, we received a $5.0 million non-refundable deposit on a community to be sold for approximately $126 million later in 2020.

In connection with our redevelopment, development, and other capital additions activities, we have entered into various construction-related contracts and we have made commitments to complete redevelopment and development of certain apartment communities, pursuant to financing or other arrangements. As of June 30, 2020, our commitments related to these capital activities totaled approximately $179 million, most of which we expect to incur during the next 12 months.

We enter into certain commitments for future purchases of goods and services in connection with the operations of our apartment communities. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by our general liability insurance program, and none of which we expect to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

The Spinnee is responsible for the first $17.5 million of legal and environmental liabilities related to occurrences prior to the Separation. The AIR Operating Partnership is responsible for any such liabilities in excess of $17.5 million.

Various federal, state and local laws subject apartment community owners or operators to liability for management and the costs of removal or remediation of certain potentially hazardous materials that may be present in the land or buildings of an apartment community. Such laws often impose liability without regard to fault or whether the owner or operator knew of, or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities. In addition, governmental agencies may bring claims for costs associated with investigation and remediation actions. Moreover, private plaintiffs may potentially make claims for investigation and remediation costs they incur or for personal injury, disease, disability or other infirmities related to the alleged presence of hazardous materials. In addition to potential environmental liabilities or costs associated with our current apartment communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future or apartment communities we no longer own or operate.

We are engaged in discussions with the Environmental Protection Agency, or EPA, regarding contaminated groundwater near an Indiana apartment community that has not been owned by us since 2008. The contamination allegedly derives from a dry cleaner that operated on our former property, prior to our ownership. We undertook a voluntary remediation of the dry cleaner contamination under state oversight. In 2016, EPA listed our former community and a number of residential communities in the vicinity on the National Priorities List, or NPL (i.e., as a Superfund site). In May 2018, we prevailed on our federal judicial appeal vacating the Superfund listing. We continue to work with EPA to formulate a scope of work and agreed order to finish clean up of the site outside the Superfund program. Although the outcome of this process is uncertain, we do not expect the resolution to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

We also have a contingent environmental liability related to a property in Lake Tahoe, California. An entity owned by us was the former general partner of a now-dissolved partnership that previously owned a site where a laundromat, with a self-service dry-cleaning machine, operated. That entity and the current property owner have been remediating the site since 2009, under the oversight of the Lahontan Regional Water Quality Control Board, or Lahontan. In May 2017, Lahontan issued a final cleanup and abatement order that names 4 potentially-responsible parties, acknowledges that there may be additional responsible parties, and requires the named parties to perform additional groundwater investigation and corrective actions with respect to onsite and offsite contamination. We appealed the final order, and on June 1, 2020, the court vacated the Order against us. However, there are still civil suits pending related to this contingent liability. Although the outcome of this process is uncertain, we do not expect the resolution to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

We have determined that our legal obligations to remove or remediate certain potentially hazardous materials may be conditional asset retirement obligations, as defined by GAAP. Except in limited circumstances where the asset retirement activities are expected to be performed in connection with a planned construction project or apartment community casualty, we believe that the fair value of our asset retirement obligations cannot be reasonably estimated due to significant uncertainties in the timing and manner of settlement of those obligations. Asset retirement obligations that are reasonably estimable as of ~~June 30, 2020,~~March 31, 2021, are immaterial to our condensed consolidated financial ~~condition, results of operations, and cash flows.~~statements.

~~Aimco~~AIR and the ~~Aimco~~AIR Operating Partnership calculate basic earnings per common share and basic earnings per common unit based on the weighted-average number of shares of Common Stock and common partnership units outstanding. We calculate diluted earnings per share and diluted earnings per unit taking into consideration dilutive common stock and common partnership unit equivalents and dilutive convertible securities outstanding during the period.

Our common stock and common partnership unit equivalents include options to purchase shares of Common Stock, which, if exercised, would result in ~~Aimco’s~~AIR’s issuance of additional shares and the ~~Aimco~~AIR Operating Partnership’s issuance to ~~Aimco~~AIR of additional common partnership units equal to the number of shares purchased under the options. These equivalents also include

unvested total shareholder return ~~or TSR,~~(“TSR”) restricted stock awards that do not meet the definition of participating securities, which would result in an increase in the number of shares of Common Stock and common partnership units outstanding equal to the number of the shares that vest. Common partnership unit equivalents also include unvested long-term incentive partnership units. We include in the denominator securities with dilutive effect in calculating diluted earnings per share and per unit during these periods.

Our restricted stock awards that are subject to time-based vesting receive non-forfeitable dividends similar to shares of Common Stock and common partnership units prior to vesting, and our TSR long-term incentive partnership units receive non-forfeitable distributions based on specified percentages of the distributions paid to common partnership units prior to vesting and conversion. The unvested restricted shares and units related to these awards are participating securities. We include the effect of participating securities in basic and diluted earnings per share and unit computations using the two-class method of allocating distributed and undistributed earnings when the two-class method is more dilutive than the treasury stock method.

In our condensed consolidated statement of operations, noncontrolling interest in consolidated real estate partnerships is related to both continuing and discontinued operations. For purposes of our earnings per share calculation, we have appropriately allocated the noncontrolling interest in consolidated real estate partnerships for the three months ended March 31, 2020. Please see Note 9 for detail of noncontrolling interest in consolidated real estate partnerships associated with discontinued operations.

Reconciliations of the numerator and denominator in the calculations of basic and diluted earnings per share and per unit for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are as follows (in thousands, except per share and per unit data):

Three Months Ended June 30,

Six Months Ended June 30,

2020

2019

2020

2019

Earnings per share

Numerator:

Basic and dilutive net income attributable to Aimco common
   stockholders
$
39,212

$
59,234

$
45,891

$
330,802

Denominator – shares:

   Basic weighted-average Common Stock outstanding

148,535

148,367

148,527

146,994

   Dilutive share equivalents outstanding

18

232

143

226

Dilutive weighted-average Common Stock outstanding

148,553

148,599

148,670

147,220

Earnings per share – basic and diluted
$
0.26

$
0.40

$
0.31

$
2.25

Non-dilutive share equivalents outstanding

8,929

—

8,260

—

Earnings per unit

Numerator:

Basic and dilutive net income attributable to the Aimco Operating
   Partnership's common unitholders
$
41,319

$
62,817

$
48,366

$
349,456

Denominator – units

   Basic weighted-average common partnership units outstanding

156,509

156,637

156,584

155,158

   Dilutive partnership unit equivalents outstanding

18

381

218

359

Dilutive weighted-average common partnership units
   outstanding

156,527

157,018

156,802

155,517

Earnings per unit – basic and diluted
$
0.26

$
0.40

$
0.31

$
2.25

Non-dilutive partnership unit equivalents outstanding

2,081

—

1,214

—

	Three Months Ended March 31, 2021
	Income (Numerator)		Shares (Denominator)		Per Share Amount
Basic Earnings per Share:
Net income attributable to AIR common stockholders	$	83,196		148,611	$	0.56
Diluted Earnings per Share:
Effect of dilutive securities		—		219		—
Net income attributable to AIR common stockholders	$	83,196		148,830	$	0.56

Non-dilutive share equivalents outstanding				7,878

	Three Months Ended March 31, 2020
	Income (Numerator)		Shares (Denominator)		Per Share Amount
Basic Earnings per Share:
Income from continuing operations attributable to AIR	$	2,511		119,946	$	0.02
Income from discontinued operations attributable to AIR		4,168		119,946		0.04
Net income attributable to AIR common stockholders	$	6,679		119,946	$	0.06
Diluted Earnings per Share:
Effect of dilutive securities		—		216		—
Net income attributable to AIR common stockholders	$	6,679		120,162	$	0.06

Non-dilutive share equivalents outstanding				97

	Three Months Ended March 31, 2021
	Income (Numerator)		Shares (Denominator)		Per Unit Amount
Basic Earnings per unit:
Net income attributable to the AIR Operating Partnership's common unitholders	$	87,632		156,527	$	0.56
Diluted Earnings per unit:
Effect of dilutive securities		—		219		—
Net income attributable to the AIR Operating Partnership's common unitholders	$	87,632		156,746	$	0.56

Non-dilutive partnership unit equivalents outstanding				1,144

	Three Months Ended March 31, 2020
	Income (Numerator)		Shares (Denominator)		Per Unit Amount
Basic Earnings per unit:
Income from continuing operations attributable to the AIR Operating Partnership	$	2,879		126,521	$	0.03
Income from discontinued operations attributable to the AIR Operating Partnership		4,168		126,521		0.03
Net income attributable to the AIR Operating Partnership's common unitholders	$	7,047		126,521	$	0.06
Diluted Earnings per unit:
Effect of dilutive securities		—		277		—
Net income attributable to the AIR Operating Partnership's common unitholders	$	7,047		126,798	$	0.06

Non-dilutive partnership unit equivalents outstanding				1,847

The ~~Aimco~~AIR Operating Partnership has various classes of preferred OP Units, which may be redeemed at the holders’ option. The ~~Aimco~~AIR Operating Partnership may redeem these units for cash, or at its option, shares of Common Stock. As of ~~June 30, 2020,~~March 31, 2021, these preferred OP Units were potentially redeemable for approximately ~~2.6~~1.9 million shares of Common Stock (based on the period end market price), or cash. The ~~Aimco~~AIR Operating Partnership has a redemption policy that requires cash settlement of redemption requests for the preferred OP Units, subject to limited exceptions. Accordingly, we have excluded these securities from earnings per share and unit computations for the periods presented ~~above, and we expect to exclude them in future periods.~~above.

~~During the three and six months ended June 30, 2020, we paid $0.41 and $0.82, respectively, in dividends~~Dividends and distributions paid per share and per unit. During the three and six months ended June 30, 2019, we paid $0.39 and $2.41, respectively, in dividends and distributions per share and per unit. Of the $2.41 paid in dividends and distributions in 2019, $2.02 represents the per share and per unit value of the special dividend and special distribution authorized by the Board of Directors in the first quarter of 2019. The special dividend consisted of $67.1 million in cash, 4.5 million shares of Common Stock and $0.4 million of cash paid in lieu of issuing fractional shares. The special distribution consisted of $72.7 million in cash, 4.8 million common partnership units, and $0.4 million of cash paid in lieu of issuing fractional units.

~~In connection with the special dividend and distribution, the Board of Directors authorized a reverse stock split~~ during the three months ended March 31, ~~2019. The reverse split combined every 1.03119 common shares~~2021 and common partnership units into one common share or common partnership unit and was intended to neutralize the dilutive impact of the shares and units issued in the special dividend and distribution. As a result, the number of shares and units outstanding after the dividend/distribution and reverse split was unchanged from the number outstanding immediately prior to the two actions.2020, were as follows:

We measure at fair value on a recurring basis our investments in the securitization trust that holds certain of our property debt, which we classify as ~~AFS~~available for sale (“AFS”) debt securities. These investments are presented within other assets in the condensed consolidated balance sheets. We hold several positions in the securitization trust that pay interest currently and we also hold the first loss position in the securitization trust, which accrues interest over the term of the investment. These investments were acquired at a discount to face value and we are accreting the discount to the $100.9 million face value of the investments through interest income using the effective interest method over the remaining expected term of the investments, which as of ~~June 30, 2020,~~March 31, 2021, was approximately ~~1.1~~0.25 years. Our amortized cost basis for these investments, which represents the original cost adjusted for interest accretion less interest payments received, was ~~$93.5~~$99.0 million and ~~$90.0~~$97.1 million as of ~~June 30, 2020,~~March 31, 2021, and December 31, ~~2019,~~2020, respectively.

Our investments in AFS debt securities are classified within Level 2 of the GAAP fair value hierarchy. We estimate the fair value of these investments using an income and market approach with primarily observable inputs, including yields and other information regarding similar types of investments, and adjusted for certain unobservable inputs specific to these investments. The fair value of the positions that pay interest currently typically moves in an inverse relationship with movements in interest rates. The fair value of the first loss position is primarily correlated to collateral quality and demand for similar subordinate commercial mortgage-backed securities.

During the ~~three months~~year ended ~~June 30,~~December 31, 2020, we paid an upfront premium of $12.1 million for the option to enter into an interest rate swap at a future date. This interest rate option, or swaption, provides partial protection against our refinancing interest rate risk and is intended to mitigate interest rate increases between now and 2024. We receive a cash settlement in the future if the prevailing interest rate is higher than the 1.68% strike price. The amount of future cash settlement is limited if the prevailing interest rate exceeds 2.78%. Alternatively, if interest rates were to decrease below the specified strike price, we would not receive a cash settlement. In connection with the Separation, AIR assigned all of the risks and rewards of ownership to Aimco, with an offsetting and equal asset or liability recognized for the amount of gain or loss recognized.

We measure at fair value on a recurring basis our interest rate option, which is presented in other assets in our condensed consolidated balance sheets. Our interest rate option is classified within Level 2 of the GAAP fair value hierarchy, and we estimate its fair value using pricing models that rely on observable market information, including contractual terms, market prices, and interest rate yield curves. The fair value adjustment is included in earnings in other expense, net, in our condensed consolidated statements of operations. Changes in fair value are reflected as a non-cash transaction in adjustments to arrive at cash flows from operations, and the upfront premium is reflected in other financing in our condensed consolidated statements of cash flows.

The following table summarizes fair value for our AFS debt securities and our interest rate option (in thousands):

	As of June 30, 2020								As of December 31, 2019								As of March 31, 2021								As of December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3
AFS debt securities	$	97,311	$	—	$	97,311	$	—	$	94,251	$	—	$	94,251	$	—	$	99,983	$	0	$	99,983	$	0	$	100,151	$	0	$	100,151	$	0
Interest rate option	$	11,008	$	—	$	11,008	$	—	$	—	$	—	$	—	$	—	$	37,368	$	0	$	37,368	$	0	$	13,177	$	0	$	13,177	$	0

There were 0 assets measured at fair value on a nonrecurring basis as of March 31, 2021. As of December 31, 2020, assets measured at fair value on a nonrecurring basis in our condensed consolidated balance sheets consist of a real estate asset that was written down to its estimated fair value for impairment purposes during the year ended December 31, 2020. Our estimate of fair value was determined using valuations performed by third-party specialists, as well as various estimates and assumptions, the most significant being market rental rates, operating expense assumptions, and capitalization rate. These unobservable inputs are classified as Level 3 within the GAAP fair value hierarchy. As of December 31, 2020, the fair value of the real estate asset measured on a nonrecurring basis was $34.4 million.

We believe that the carrying value of the consolidated amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximated their fair value as of ~~June 30, 2020,~~March 31, 2021, and December 31, ~~2019,~~2020, due to their relatively short-term nature and high probability of realization. The carrying amounts of notes receivable from Aimco, the term loan, and the revolving credit facility also approximated their estimated fair value as of ~~June 30, 2020,~~March 31, 2021, and December 31, ~~2019.~~2020. We estimate the fair value of our non-recourse property debt using an income and market approach, including comparison of the contractual terms to observable and unobservable inputs such as market interest rate risk spreads, contractual interest rates, remaining periods to maturity, collateral quality, and loan to value ratios on similarly encumbered apartment communities within our portfolio. We classify the fair value of our non-recourse property debt within Level 2 of the GAAP fair value hierarchy based on the significance of certain of the unobservable inputs used to estimate its fair value.

The following table summarizes carrying value and fair value for our non-recourse property debt (in thousands):

AIR consolidates the AIR Operating Partnership, a variable interest entity (“VIE”) of which AIR is the primary beneficiary. AIR, through the AIR Operating Partnership, consolidates all VIEs for which it is the primary beneficiary.Substantially all of the assets and liabilities of AIR are that of the AIR Operating Partnership.

The AIR Operating Partnership consolidates (i) five VIEs that own interest in one or more apartment communities and are typically structured to generate a return for their partners through the operation and ultimate sale of the communities and (ii) four VIEs related to lessor entities that own interest in the properties leased to Aimco. The assets and liabilities of the VIEs associated with the leased properties consists of our net investment in the leases. The AIR Operating Partnership is the primary beneficiary in the limited partnerships in which it is the sole decision maker and has a substantial economic interest. The table below summarizes apartment community information regarding VIEs consolidated by the AIR Operating Partnership:

Assets of the AIR Operating Partnership’s consolidated VIEs must first be used to settle the liabilities of such consolidated VIEs. These consolidated VIEs’ creditors do not have recourse to the general credit of the AIR Operating Partnership. Assets and liabilities of VIEs, excluding those of the AIR Operating Partnership, are summarized in the table below (in thousands):

We have an interest in a partnership that owns Parkmerced Apartments, which meets the definition of a VIE. However, we are not the primary beneficiary and do not consolidate this partnership. In connection with the Separation, Aimco was allocated economic ownership of the $275.0 million mezzanine loan investment and option to acquire a 30% equity interest in the partnership. The investment accrues interest at 10% per annum with a five-year term and the right to extend for a second five-year term. Subsequent to the Separation, all risks and rewards of ownership are Aimco’s. As of March 31, 2021, and December 31, 2020, the investment balance of $315.1 million and $307.4 million, respectively, primarily consisting of notes receivable, is included in other assets in AIR’s condensed consolidated balance sheets, as legal transfer is not complete. Since AIR has legally assigned all risks and rewards of ownership to Aimco, there is an equal and offsetting liability included in accrued liabilities and other in AIR’s condensed consolidated balance sheets. Accordingly, there is no net effect on AIR’s shareholders’ equity. During the three months ended March 31, 2020, we recognized $6.7 million of income in connection with the mezzanine loan. The mezzanine investment income was offset by an expense to recognize the requirement that this income be contributed to Aimco.

We have 32 segments: ~~(i)~~ Same Store ~~(ii) Redevelopment and Development, and (iii) Acquisition~~ and Other Real Estate.

Our Same Store segment includes communities ~~that have~~that: (i) are owned and managed by AIR and (ii) had reached a stabilized level of ~~operations as of the beginning of a two-year comparable period and maintained it throughout the current and comparable prior year and are not expected to be sold within 12 months.~~operations. Our Redevelopment and Development segment includes apartment communities that are currently under construction, and those that have been completed in recent years that have not achieved and maintained stabilized operations for both the current and comparable prior year. Our Acquisition and Other Real Estate segment ~~includes: (i)~~includes communities that ~~we have acquired since the beginning of a two-year comparable period; (ii) communities that are subject to limitations on rent increases; (iii) communities that we expect to sell within 12 months but~~ do not ~~yet~~ meet the criteria to be classified as ~~held for sale; (iv) communities that we expect to redevelop; and (v) certain commercial spaces.~~

~~Our~~ Same Store. Communities included in discontinued operations are excluded from our evaluation of segment performance, as they are no longer included in information used by our chief operating decision maker (“CODM”).

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

As of ~~June 30, 2020,~~March 31, 2021, our Same Store segment included ~~94 consolidated~~93 apartment communities with ~~27,876~~25,485 apartment ~~homes; our Redevelopment and Development segment included 8 consolidated communities with 2,521 homes;~~homes, and our ~~Acquisition and~~ Other Real Estate segment included 192 apartment communities with ~~2,399 homes and 1 office building.~~237 homes.

The following tables present the ~~rental and other property~~total revenues, property operating expenses, proportionate property net operating income (loss), and income (loss) from continuing operations before income tax benefit (expense) of our segments on a proportionate basis, excluding amounts related to communities sold or communities ~~and our proportionate share of 4 apartment communities with 142 apartment homes that we neither manage nor consolidate,~~included in discontinued operations, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):

	Same Store		Redevelopment and Development		Acquisition and Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated		Same Store		Other Real Estate			Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Three months ended June 30, 2019:
Rental and other property revenues	$	182,816	$	12,695	$	14,097	$	7,905	$	6,687		$	224,200
Three months ended March 31, 2021:
Total revenues														$	153,652	$	1,056		$	20,018	$	1,687		$	176,413
Property operating expenses		48,893		4,990		5,431		7,378		8,955			75,647		44,097		1,067			10,559		8,894			64,617
Other operating expenses not allocated to segments (3)		—		—		—		—		108,449			108,449		—		—			—		82,570			82,570
Total operating expenses		48,893		4,990		5,431		7,378		117,404			184,096		44,097		1,067			10,559		91,464			147,187
Proportionate property net operating income (loss)		133,923		7,705		8,666		527		(110,717	)		40,104		109,555		(11	)		9,459		(89,777	)		29,226
Other items included in income before income tax benefit (4)		—		—		—		—		28,065			28,065
Income before income tax benefit	$	133,923	$	7,705	$	8,666	$	527	$	(82,652	)	$	68,169
Other items included in income before income tax expense (4)															—		—			—		62,969			62,969
Income (loss) from continuing operations before income tax expense														$	109,555	$	(11	)	$	9,459	$	(26,808	)	$	92,195

	Same Store		Redevelopment and Development		Acquisition and Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated			Same Store		Other Real Estate		Proportionate and Other Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Six months ended June 30, 2020:
Rental and other property revenues	$	367,564	$	23,502	$	36,174	$	17,215	$	(1,095	)	$	443,360
Three months ended March 31, 2020:
Total revenues															$	176,757	$	1,715	$	6,973	$	598		$	186,043
Property operating expenses		97,154		9,599		13,061		15,989		13,800			149,603			46,049		1,093		6,474		12,346			65,962
Other operating expenses not allocated to segments (3)		—		—		—		—		226,155			226,155			—		—		—		90,426			90,426
Total operating expenses		97,154		9,599		13,061		15,989		239,955			375,758			46,049		1,093		6,474		102,772			156,388
Proportionate property net operating income (loss)		270,410		13,903		23,113		1,226		(241,050	)		67,602			130,708		622		499		(102,174	)		29,655
Other items included in income before income tax benefit (4)		—		—		—		—		(21,533	)		(21,533	)		—		—		—		(26,057	)		(26,057	)
Income before income tax benefit	$	270,410	$	13,903	$	23,113	$	1,226	$	(262,583	)	$	46,069
Income (loss) from continuing operations before income tax benefit															$	130,708	$	622	$	499	$	(128,231	)	$	3,598

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

	June 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Same Store	$	4,592,960	$	4,669,022	$	4,666,856	$	4,697,969
Redevelopment and Development		826,200		716,750
Acquisition and Other Real Estate		795,039		803,777
Other Real Estate						89,325		97,248
Corporate and other assets (1)		906,948		639,190		1,565,323		1,434,061
Total consolidated assets	$	7,121,147	$	6,828,739	$	6,321,504	$	6,229,278

For the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ capital additions related to our segments were as follows (in thousands):

	2020		2019		2021		2020
Same Store	$	51,608	$	85,280	$	22,354	$	43,351
Redevelopment and Development		115,140		78,089
Acquisition and Other Real Estate		12,376		14,433
Other Real Estate						818		44,689
Total capital additions	$	179,124	$	177,802	$	23,172	$	88,040

The financial results attributable to apartment communities retained by the Spinnee for the prior year comparative period have been classified as discontinued operations within the condensed consolidated financial statements.

During the three months ended March 31, 2021, we recognized $3.9 million of additional costs related to Separation, consisting of $1.8 million of incremental tax expense and $2.1 million of costs incurred as a direct result of the Separation.

We entered into various separation and transition services agreements with the Spinnee that provide for a framework of our relationship with the Spinnee after the Separation, including: (i) a separation agreement setting forth the mechanics of the Separation, the key provisions relating to the Separation of our assets and liabilities from those of the Spinnee, and certain organizational matters and conditions; (ii) an employee matters agreement to allocate liabilities and responsibilities relating to employment matters, teammate compensation, and benefits plans and programs, and other related matters; (iii) Property Management Agreements pursuant to which we provide property management and related services at a majority of the properties owned or leased by the Spinnee in exchange for a fee based on an agreed percentage of revenue collected; (iv) Master Services Agreement pursuant to which we provide the Spinnee with customary administrative and support services on an ongoing basis in exchange for payment for the fully-burdened costs (including internal allocated costs); and (v) a Master Leasing Agreement pursuant to which the Spinnee may enter into leases with us pursuant to which the Spinnee, at its option, may redevelop, develop, or lease-up apartment communities. The Property Management Agreement, the Master Services Agreement, and the Master Leasing Agreement may be terminated in accordance with the respective agreements.

During the three months ended March 31, 2021, we recognized revenue of $1.7 million from the Property Management Agreements and Master Services Agreement, all of which is reflected in other revenue in our condensed consolidated statement of operations.

The Master Leasing Agreement governs any future leasing arrangements between us and the Spinnee. The initial term of the Master Leasing Agreement is 18 months, with automatic annual extensions (subject to each party’s right to terminate upon notice prior to the end of any such extension term). Each leased property has a separate lease agreement with specified terms. The initial annual rent for any leased property is based on a calculation derived from the then-current fair market value of the subject property and market net operating income cap rates, subject to certain adjustments, and is further subject to periodic escalation as set forth in the applicable lease, and the other terms thereof, including the initial term and extensions on an arm’s-length basis, as determined by and pursuant to the Master Leasing Agreement. The Spinnee has the right to terminate any such lease prior to the end of its term once the leased property is stabilized. In connection with an early termination, we have an option to pay the Spinnee an amount equal to the difference between the then-current fair market value of such property and the initial fair market value of such property at the time of the lease inception, at a small discount. If we do not exercise an option, the Spinnee will have the right to sell the property to a third party with us guaranteed to receive an amount equal to the fair market value of the property at the time of the lease inception, or the Spinnee may elect to purchase the property at a purchase price equal to the fair market value thereof at the time of lease inception (and may subsequently sell the property to a third party, subject to our right of first refusal during the first year following the Spinnee’s acquisition).

On January 1, 2021, we leased 4 redevelopment and development properties to the Spinnee. In accordance with ASC 842, these leases were accounted for as sales-type leases and we recorded a net investment in the leases, equal to the sum of the lease receivable and residual asset, discounted at the rate implicit to the leases. Commensurate with the commencement of each of the leases on January 1, 2021, we also recognized a net gain of $83.7 million, which is equal to the difference in the net investment values and their carrying values immediately prior to the commencement of the leases. During the three months ended March 31, 2021, we recognized income of $6.4 million on an effective interest basis at a constant rate of return over the term of the applicable leases, which is reflected in interest income in our condensed consolidated statement of operations. Cash income from the leasing agreements was $6.6 million during the three months ended March 31, 2021.

The initial term of each of the leases range from 10 to 25 years. All of the leases payments are triple net basis to the tenant and we have rights in accordance with the individual lease agreements to protect the value of our leased properties. As of March 31, 2021, the aggregate minimum lease payments owed to us for each of the five succeeding years under the sales-type leases is as follows:

In connection with the Separation, we acquired $534 million in notes receivable pledged by a subsidiary of the Spinnee that has an interest in a portfolio of assets. Our notes receivable are subordinate to the existing debt of $215.4 million as of December 31, 2020, on the portfolio of assets. The notes receivable mature on January 31, 2024, and bear interest at a rate of 5.2% per annum, payable quarterly on January 1, April 1, July 1, and October 1, commencing on April 1, 2021. The notes receivable contain certain representations, warranties, covenants, and events of default and are secured by a pool of properties owned by Aimco. Notes receivable are reported in our condensed consolidated balance sheet at the outstanding principal balance. Interest receivable related to the unpaid principal is recorded separately from the outstanding balance in other assets in our condensed consolidated balance sheets.During the three months ended March 31, 2021, we recognized interest income of $6.9 million associated with the notes receivable, which is reflected in interest income in our condensed consolidated statement of operations.

As of March 31, 2021, we have a receivable from Aimco in the amount of approximately $14 million, which is recognized in other assets, and a payable to Aimco in the amount of approximately $23 million, which is recognized in accrued liabilities and other in our condensed consolidated balance sheets. The amount payable to Aimco is due primarily to treasury management services and is in a payable position because cash receipts exceeded cash paid. We expect the amounts due to and from Aimco to be settled in the second quarter of 2021.

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

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Quarterly Report on Form 10-Q contains or may contain information that is forward-looking, within the meaning of the federal securities laws, including, without limitation, statements regarding: the ongoing relationship between AIR and Aimco (the “Separate Entities”) following the Separation; the payment of dividends and distributions in the future; the impact of the COVID-19 pandemic, including on our ability to maintain current or meet projected occupancy, rental rate and property operating results; the effect of acquisitions ~~dispositions, redevelopments,~~ and ~~developments; our ability to meet budgeted costs and timelines, and achieve budgeted rental rates related to our redevelopment and development investments;~~dispositions; expectations regarding sales of our apartment communities and the use of proceeds thereof; the availability and cost of corporate debt; ~~and~~ our ability to comply with debt covenants, including financial coverage ~~ratios.~~ratios; risks related to the provision of property management services to Aimco and our ability to collect property management related fees; and risks related to the inability to fully collect the notes receivable due from Aimco.

~~Actual~~These forward-looking statements are based on management’s judgment as of this date, which is subject to risks and uncertainties. Risks and uncertainties that could cause actual results ~~may~~to differ materially from ~~those described in these forward-looking statements~~our expectations include, but are not limited to: the effects of the coronavirus pandemic on AIR’s business and ~~in addition, will be affected by a variety~~on the global and U.S. economies generally, and the ongoing, dynamic and uncertain nature and duration of the pandemic, all of which heightens the impact of the other risks and factors described herein, and the impact on entities in which AIR holds a partial interest, and the impact of governmental lockdowns on AIR’s residents, commercial tenants, and operations; real estate and operating risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including the pace of job growth and the level of unemployment; the amount, location and quality of competitive new housing supply; the timing and effects of acquisitions and dispositions; changes in operating costs, including energy costs; negative economic conditions in our geographies of operation; loss of key personnel; AIR’s ability to maintain current or meet projected occupancy, rental rate and property operating results; expectations regarding sales of apartment communities and the use of proceeds thereof; insurance risks, including the cost of insurance, and natural disasters and severe weather such as hurricanes; financing risks, including the availability and cost of financing; the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; the risk that earnings may not be sufficient to maintain compliance with debt covenants, including financial coverage ratios; legal and regulatory risks, including costs associated with prosecuting or defending claims and any adverse outcomes; the terms of laws and governmental regulations that affect us and interpretations of those laws and regulations; possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of apartment communities presently or previously owned by Aimco; the relationship between the Separate Entities after the Separation; the ability and willingness of the Separate Entities and their subsidiaries to meet and/or perform their obligations under any contractual arrangements that are entered into among the parties in connection with the Separation and any of their obligations to indemnify, defend and hold the other party harmless from and against various claims, litigation and liabilities; and the ability to achieve some ~~of which are beyond our control, including, without limitation:~~or all the benefits that we expect to achieve from the Separation; and such other risks and uncertainties described from time to time in filings by the Separate Entities with the Securities and Exchange Commission (“SEC”).

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

Readers should carefully review ~~our~~AIR’s financial statements and the notes thereto, as well as ~~Item 1A. Risk Factors in Part II of this report,~~ the section entitled “Risk Factors” described in Item 1A of ~~Apartment Investment~~AIR’s and ~~Management Company’s and AIMCO Properties, L.P.’s~~AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, and ~~the other~~subsequent documents we file from time to time with the ~~Securities~~SEC. These factors should not be construed as exhaustive and ~~Exchange Commission.~~should be read in conjunction with the other cautionary statements that are included elsewhere in this Quarterly Report on Form 10-Q. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

As used herein and except as the context otherwise requires, “we,” “our,” and “us” refer to Apartment ~~Investment and Management Company (which we refer to as Aimco)~~Income REIT Corp. (“AIR”), AIMCO Properties, L.P. ~~(which we refer to as the Aimco~~(“AIR Operating ~~Partnership)~~Partnership”) and their consolidated ~~entities,~~subsidiaries, collectively.

Certain financial and operating measures found herein and used by management are not defined under accounting principles generally accepted in the United States ~~or GAAP.~~(“GAAP”). These measures are defined and reconciled to the most comparable GAAP measures under the Non-GAAP Measures heading and include: ~~Nareit~~NAREIT Funds from Operations, Pro forma Funds from Operations, ~~Adjusted Funds from Operations, Free Cash Flow, Net Asset Value, Economic Income,~~ and the measures used to compute our leverage ratios.

~~We are focused on~~AIR provides investors with a simple and transparent way to invest in the ~~ownership, management, redevelopment, and some development~~multi-family sector with public market liquidity, the safety of ~~quality~~a diversified portfolio of apartment communities ~~located in several of the largest markets in the United States.~~with low financial leverage, best-in-class operations, and sector low general and administrative costs.

Our principal financial objective is to ~~provide predictable~~be a low-cost and ~~attractive returns~~efficient way to ~~our equity holders. We measure our long-term total return using Economic Income, defined as changes~~invest in ~~the per share Net Asset Value, or NAV, growth plus dividends. NAV is used by many investors because the value~~U.S. multi-family real estate. Many of company assets can be readily estimated, even for non-earning assets such as land or properties under development. NAV has the advantage of incorporating the investment decisions of thousands of real estate investors, enhancing comparability among companies that have differences in their accounting and avoiding disparity that can result from application of GAAP to investment properties and various ownership structures. NAV also provides real estate investors a basis for the perceived quality and predictability of future cash flows as well as their expected growth. Someour investors focus on multiples of ~~Adjusted~~ Funds ~~from~~From Operations ~~or AFFO, and Funds from Operations~~(“FFO”) as defined by the National Association of Real Estate Investment Trusts ~~or Nareit~~(“NAREIT”), referred to herein as “NAREIT FFO. ~~Our disclosure of AFFO, a measure of current return, complements our~~” These investors also focus on ~~Economic Income.~~NAREIT FFO, as adjusted for non-cash, unusual or non-recurring items. We ~~also use~~refer to this metric as Pro forma ~~FFO~~Funds From Operations (“Pro forma FFO”) and use it as a secondary measure of operational performance.

Our ~~Economic Income~~business is ~~the result~~organized around four areas of ~~performance in five key business areas:~~

~~Over our first 25 years as a public company, our Economic Income compounded at an annual rate of 14%.~~

The impact of the COVID-19 pandemic and Government Lockdown continued into the second quarter of 2020. As discussed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2020, we formed a cross-functional committee that meets weekly to adjust to the changing conditions in order to keep our team and our residents safe. We continued our commitment to employees by allowing flexible work arrangements, undertook to pay all costs associated with COVID-19 testing and treatment, kept our team intact without layoffs or pay cuts, and continued clear and frequent communication. Utilizing our previous investment in technology and artificial intelligence, paired with policies providing flexibility, our team continued to lease apartments and fulfill service requests in a safe environment for both the team and our residents.

~~We also implemented enhanced cleaning procedures and physical distancing measures during the second quarter.~~

Seeing residents as individuals, each impacted differently by the pandemic and lockdown, our teammates have undertaken to speak to every resident in need, to listen, and to help each solve his or her problems.

We also seek to assist the communities where our residents and employees live and work. Since March, we have provided free temporary furnished housing for healthcare providers at 21 Fitzsimons on the Anschutz Medical Campus, Parc Mosaic near Boulder Community Health, and River Club near Newark University Hospital.

During the three months ended June 30, 2020, we estimate that we incurred $8.0 million of incremental costs related to additional interest costs resulting from our increased liquidity; incremental bad debt expense; lower commercial revenue; local restrictions on our ability to charge late fees; and enhanced cleaning and safety procedures and other COVID-19 related items.

Since the outbreak of the COVID-19 pandemic and government lockdown, we have sold one community and entered into a contract to sell another, both at values greater than their respective gross asset value one year ago. We continue to monitor economic and market conditions and can provide no assurance that a prolonged recession will not result in lower property values and non-cash impairment losses.

~~As of June 30, 2020, we had $1.2 billion of cash and available credit, providing increased liquidity and financial flexibility.~~

In response to the economic effects of the COVID-19 pandemic and government lockdown, some jurisdictions where our communities are located, including Los Angeles, Philadelphia, and New York City, have enacted laws seeking to suspend contractual obligations of residents, including government-mandated deferrals, rent freezes, repayment extensions, fee abatement measures or concessions, and prohibitions on lease terminations or evictions for tenants. Some states and municipalities are also implementing rental assistance programs and encouraging landlord-tenant negotiations.

We measure residential rent collection as the amount of payments received as a percentage of all residential amounts billed. The table below represents the percentage of residential billed amounts for the three months ended June 30, 2020, and the month ended July 31, 2020.

During the three months ended June 30, 2020, we recognized 98.4% of all residential revenue, treating the balance of 1.6% as bad debt. Of the 98.4% of residential revenue recognized, we collected in cash all but 120 basis points. The amounts uncollected and not reserved as bad debt include balances collateralized by security deposits of approximately 70 basis points, or those considered collectable based on our review of individual customers’ credit of approximately 50 basis points, or $1.0 million.

In July, we recognized 98.4% of all residential revenue, treating the balance of 1.6% as bad debt. Of the 98.4% of residential revenue recognized, we collected 95.8% in cash, 30 basis points is collateralized by security deposits, and $1.6 million, or 2.3%, is expected to be collected in future periods, half of which is expected to be collected in August.

culture. The results from the execution of our business plan ~~during the three months ended June 30, 2020,~~ are further described ~~below.~~in the sections that follow.

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

We own and operate a portfolio of stabilized apartment communities, diversified by both geography and price point. As of ~~June 30, 2020,~~March 31, 2021, our portfolio included ~~125~~95 apartment communities with ~~32,938~~25,722 apartment homes in which we held an average ownership of approximately ~~99%~~93%.

~~Our property operations team, adapting to changing guidelines and regulations due to COVID-19, produced solid results for our portfolio~~Same Store highlights for the ~~three months ended June 30, 2020. Same Store highlights~~first quarter include:

Our focus on efficient operations through productivity initiatives such as centralization of administrative tasks, optimization of economies of scale at the corporate level, and increased automation has helped us control operating expenses. These and other innovations contributed to a growth rate in Same Store ~~controllable operating expense, which we define as property expenses less taxes, insurance, and utility expenses, compounding for the 12 years ended December 31, 2019, at an annual rate~~

of negative 0.2%. During the three months ended June 30, 2020, Same Store controllable operating expenses decreased 6.3% compared to the three months ended June 30, 2019, due primarily to the timing of repairs, which were slowed during the lockdown.

Our ~~second line~~portfolio is diversified by price point and geography, and with a mix of ~~business is the redevelopment~~urban and some development of apartment communities. Through redevelopment activities, we expect to create value by repositioning communities within our portfolio. We undertake ground-up development when warranted by risk-adjusted investment returns, either directly or in connection with the redevelopment of an existing apartment community. When warranted, we rely on the expertise and credit of a third-party developer familiar with the local market to limit our exposure to construction risk. We invest to earn risk-adjusted returns in excess of those expected from the apartment communities sold in “paired trades” to fund the redevelopment or development. Of these two activities, we generally favor redevelopment because it permits adjustment of the scope and timing of spending to align with changing market conditions and customer preferences.

We execute redevelopments using a range of approaches. We prefer to limit risk by executing redevelopments using a short-cycle approach, in which we renovate an apartment community in stages. These short-cycle redevelopments can be completed one apartment home at a time, when that home is vacated and available for renovation, or one floor at a time, thereby limiting the number of down homes and lease-up risk. As a result, short-cycle redevelopments provide us the flexibility to maintain current earnings while aligning the timing of the completed apartment homes with market demand. When short-cycle redevelopments are not possible, we may engage in redevelopment activities where an entire building or community is vacated. We refer to these as long-cycle redevelopments. Redevelopment work may include seeking entitlements from local governments, which enhance the value of our existing portfolio by increasing density; that is, the right to add apartment homes to a site.

During the three months ended June 30, 2020, we invested $62.3 million in redevelopment and development. We continued five long-cycle redevelopment and development projects already under construction, including the full redevelopment of the North Tower at Flamingo Point and 707 Leahy; and ground-up construction at The Fremont on the Anschutz Medical Campus; Eldridge Townhomes; and Prism. Our estimated cost to complete these projects is $151.0 million, an amount readily funded from our liquidity.

suburban submarkets. In the first quarter ~~we announced plans to pause~~of 2021, our ~~short-cycle redevelopments in response to COVID-19~~five healthiest markets were San Diego, Denver, Miami, Boston and ~~the government lockdown,~~Washington, DC. These markets, which represent half of our total portfolio, together posted signed new lease rent increases of 1.8%, signed renewal rent increases of 3.9%, signed blended lease rent increases of 2.9%, and average daily occupancy of 96.9%. In these markets our asking effective rents are above their potential economic ramifications. In June, with the economy beginning to reopen, we resumed short-cycle redevelopments at Bay Parc and the Center Tower at Flamingo Point. Our estimated cost to complete these projects is $13.4 million.pre-COVID peak.

The ~~following table summarizes our significant redevelopment~~positive momentum for the first quarter has carried over to April 2021, with leasing pace and ~~development communities~~rates continuing to trend higher. Although occupancy growth will begin to moderate as we experience greater frictional vacancy during peak leasing season, the fundamentals point towards a continued recovery in average daily occupancy through the balance of ~~June 30, 2020 (dollars in millions):~~the year.

As of June 30, 2020, our total estimated net investment at redevelopment and development communities is $559.6 million, of which we have funded $394.2 million. We expect to fund the remaining estimated net investment of $165.4 million on these communities in 2020 and future years, on a leverage-neutral basis, with proceeds from sales of apartment communities with lower forecasted free cash flow, or FCF, internal rates of return.

During the three months ended June 30, 2020, we leased 59 redeveloped or newly developed apartment homes. As of June 30, 2020, our exposure to lease-up at long-cycle redevelopment and development communities was 809 apartment homes; 44 homes where construction is complete, 289 homes expected to be delivered during the remainder of 2020, and 476 homes expected to be delivered in 2021.

Our portfolio of apartment communities is diversified across “A,” “B,” and “C+” price points, averaging “B/B+” in quality, and is also diversified across several of the largest markets in the United States. We measure the quality of apartment communities in our portfolio based on average rents of our apartment homes compared to local market average rents as reported by a third-party provider of commercial real estate performance data and analysis. Under this rating system, we classify as “A” quality apartment communities those earning rents greater than 125% of local market average; as “B” quality apartment communities those earning rents between 90% and 125% of local market average; as “C+” quality apartment communities those earning rents greater than $1,100 per month, but lower than 90% of local market average; and as “C” quality apartment communities those earning rents less than $1,100 per month and lower than 90% of local market average. We classify as “B/B+” quality a portfolio that on average earns rents between 100% and 125% of local market average rents. Although some companies and analysts within the ~~multifamily~~multi-family real estate industry use apartment community quality ratings of “A,” “B,” and “C,” some of which are tied to local market rent averages, the metrics used to classify apartment community quality as well as the period for which local market rents are calculated may vary from company to company. Accordingly, our rating system for measuring apartment community quality is neither broadly nor consistently used in the ~~multifamily~~multi-family real estate industry.

The following table summarizes information about our portfolio relative to the market for the three months ended ~~June 30, 2020:~~March 31, 2021:

Our average monthly revenue per apartment home was ~~$2,254~~$2,233 for the three months ended ~~June 30, 2020,~~March 31, 2021, representing ~~an increase~~a decrease of approximately 2%5% compared to the same period in ~~2019. This~~2020.

Commencing on January 1, 2021, we leased four properties to Aimco for redevelopment and development with an initial value of $467.0 million and quarterly cash lease income of $6.6 million. Aimco has the right to terminate any such lease prior to the end of its term once the leased property is stabilized. In connection with an early termination, AIR has the option to purchase the improved assets at a discount to their fair value, when property operations are stabilized, currently expected between January 1, 2024 and January 1, 2025.

We also expect to improve the quality of our portfolio by allocating investment capital to enhance rent growth and increase ~~is due primarily to growth~~long-term capital values through routine investments in Same Store rent, lease-up of redeveloped apartment homes, and the sale of communities with average monthly rent per apartment home lower than those of the retained portfolio, offset partially by lower average feesproperty upgrades (such as upgrading kitchens, bathrooms and other ~~revenue per home.~~interior design aspects) and through portfolio design, emphasizing land value as well as location and submarket.

~~We follow a disciplined paired trade policy in making investments.~~ As part of our portfolio strategy, we seek to sell ~~up to 10%~~communities with lower expected free cash flow internal rates of ~~our portfolio annually~~return and to reinvest the proceeds from such sales in accretive uses such as capital enhancements, ~~redevelopments, some developments,~~share repurchases, and selective acquisitions of stabilized communities with projected ~~FCF~~free cash flow internal rates of return higher than expected from the communities being sold. ~~We prefer well-located real estate where land~~When the cost of capital is ~~a significant percentage~~favorable, we will look to grow through the acquisition of ~~total value and provides potential upside from development or redevelopment.~~stabilized apartment communities that we believe we can operate better than their previous owners. Through this disciplined approach to capital ~~recycling,~~allocation, we expect to increase the quality and expected growth rate of our portfolio.

As we execute our portfolio strategy, we expect to increase average revenue per Aimco apartment home at a rate greater than market rent growth, increase FCF margins, and maintain sufficient geographic and price point diversification to limit volatility and concentration risk.

~~During~~We did not acquire or dispose of any apartment communities during the three months ended ~~June 30, 2020, we made no acquisitions.~~March 31, 2021.

During the three months ended June 30, 2020, we sold one apartment community located in Annandale, Virginia with 219 homes at a price of $58.9 million, 3% better than its estimated gross asset value one year prior. Net sales proceeds from this transaction were $36.9 million.

In July, we accepted a non-refundable deposit on a community to be sold later in 2020, and agreed to sell this community at a price of approximately $126 million, 3% better than its estimated gross asset value as of December 31, 2019. Proceeds from this transaction are expected to be used to reduce leverage.Balance Sheet

~~Our leverage strategy seeks~~We seek to increase financial returns by using leverage with appropriate caution. We limit risk through our balance sheet structure, employing low leverage, primarily ~~non-recourse~~long-dated debt; and ~~long-dated property debt;~~we build financial flexibility by maintaining ample unused and available credit; holding properties with substantial value unencumbered by property debt; maintaining an investment grade rating; and using partners’ capital when it enhances financial returns or reduces investment risk.

Our leverage includes our share of long-term, non-recourse property debt encumbering our apartment communities, together with outstanding borrowings ~~on the~~under our revolving credit facility, our term ~~loan,~~loans, and ~~other leverage.~~ our preferred equity. We have notes receivable from Aimco with an aggregate principal amount of $534 million. The notes will mature on January 31, 2024 and are secured by a pool of properties owned by Aimco. We consider the notes a reduction of leverage as we expect proceeds to be used to repay current amounts outstanding. Please ~~refer to~~see the Liquidity and Capital Resources section for additional information regarding our leverage. ~~Other leverage includes mezzanine equity instruments, including preferred OP Units~~

On April 14, we closed a new $1.4 billion credit facility, providing four-to-five-year money at a current all-in cost of 1.6%. The facility is comprised of a $600 million revolving credit facility and ~~redeemable noncontrolling interests~~$800 million of variable rate term loans. Term loan proceeds are being used to extend the maturity of our current $350 million term loan; to repay $213 million of property debt; and to reduce borrowings on our revolving credit facility. The $213 million property debt repayment increases by over $530 million our pool of properties unencumbered by debt. The reduction of property level debt and the increase in unencumbered properties strengthen our investment grade balance sheet and enhances our ability to access the public bond market.

The $800 million of term loans are priced at a LIBOR spread of 100 basis points, with a LIBOR floor of 0.00%, 98 basis points lower than our previous term loan. Borrowing costs under the new revolving credit facility are 10 basis points lower than under our previous facility. To further our environmental, social, and governance (“ESG”) initiatives, the facility allows for an additional one basis point margin reduction if certain ESG targets are achieved. The term of the revolver ends April 14, 2025, with two six-month extension options.

The term loans were structured to maintain our balanced maturity ladder, and to also maximize flexibility through the ability to prepay freely and extend the maturity date of shorter duration loans.

On April 23, 2021, we issued and sold 7.825 million shares of our Class A Common Stock in a ~~consolidated~~private placement to a large global real ~~estate partnership.~~estate-focused investment firm for a cash purchase price of $342 million. We expect to use the proceeds to repay property debt with a weighted-average interest rate of 4.6%.

~~Our~~As a “new issuer”, we are not yet eligible to file a “shelf” registration statement. Until we have 12 months of post-Separation filings, the registration process will result in a longer SEC clearance process and a longer marketing period, which could introduce greater volatility and uncertainty in pricing and execution.

We target ~~leverage ratios are~~ Net Leverage to Adjusted EBITDAre below ~~7.0x~~6.0x and Adjusted EBITDAre to Adjusted Interest Expense and Preferred ~~Distributions greater than~~Dividends above 2.5x. ~~We calculate Adjusted EBITDAre and Adjusted Interest Expense used in our leverage ratios based on the most recent three-month amounts, annualized.~~ Our leverage ratios for the three months ended ~~June 30, 2020,~~March 31, 2021 are presented below:

Net Leverage to Adjusted EBITDAre increased by 0.4x from March 31, 2020, due primarily to a $6.1 million reduction in quarterly Adjusted EBITDAre primarily as a result of COVID-19 and the government lockdown.

We expect to ~~meet~~achieve our ~~leverage~~ target by year-end 2021 through a combination of property net operating income growth, including the $30 million of incremental net operating income we expect to receive from our long-cycle redevelopment communities now underway, and through approximately $350 million of property sales, including the previously mentioned under-contract community, expected to close in 2020. Depending upon the communities sold and the timing of sales, taxable gains may exceed our regular quarterly dividend. If so, our Board of Directors may declare a taxable stock dividend.a:

Under our revolving credit facility and term loan, we have agreed to maintain a fixed charge coverage ratio of 1.40x, as well as other covenants customary for similar revolving credit arrangements. For the trailing twelve months ended June 30, 2020, our fixed charge coverage ratio was 2.02x. We expect to remain in compliance with these covenants.

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

~~Our $1.2 billion liquidity consists~~We use our revolving credit facility primarily for working capital and other short-term purposes and to secure letters of credit. As of March 31, 2021, pro forma the closing of the new credit facility, but excluding proceeds received from the equity issuance, our share of cash and restricted cash ~~balances~~was $59.1 million and ~~available capacity on our revolving credit facility. As of June 30, 2020,~~ we ~~had cash and restricted cash, excluding amounts related to tenant security deposits, of $428.4 million and~~ had the capacity to borrow up to ~~$793.5~~$459.7 million onunder our new revolving credit facility, ~~after consideration of $6.5 million of letters of credit backed by the facility.~~bringing total pro forma liquidity to $518.8 million.

We also manage our financial flexibility by maintaining an investment grade rating and holding apartment communities that are unencumbered by property debt. AsAIR has been rated BBB by Standard & Poor’s. Pro forma the closing of ~~June 30, 2020,~~the new credit facility and the expected use of proceeds from the equity issuance, we ~~held~~expect to hold communities unencumbered ~~communities~~by property debt with an estimated fair market value of approximately ~~$2.3~~$4.0 billion.

Two credit rating agencies rate our creditworthiness, using different methodologies and ratios for assessing our credit, and both have rated our credit and outlook as BBB- (stable), an investment grade rating. Although some of the ratios they use are similar to those we use to measure our leverage, there are differences in our methods of calculation and therefore our leverage ratios disclosed above are not indicative of the ratios that may be calculated by these agencies.Dividend

During the three months ended June 30, 2020, we placed $608.8 million of new property debt, generating incremental proceeds of $370.6 million, and closed the refinancing of another $79.9 million in July 2020. The loans have a weighted-average term to maturity of 9.3 years and a weighted-average interest rate of 2.9%, lowering our weighted-average borrowing cost of leverage to 3.69%. We addressed all of our 2020 loan maturities and reducedOn April 26, 2021, ~~to 2024 maturities by 18%, resulting in average annual maturities of $262 million remaining for the four years.~~

Also during the three months ended June 30, 2020, we secured a $350.0 million term loan. Proceeds from the loan were primarily used to repay borrowings on our $800.0 million revolving credit facility. Please refer to the Leverage and Capital Resources section for further information about the terms of our term loan.

~~On July 28, 2020,~~ our Board of Directors declared a quarterly cash ~~dividend~~dividends of ~~$0.41~~$0.43 per share of AIR Common ~~Stock, an increase of 5% compared to the regular quarterly dividends paid in 2019.~~Stock. This amount is payable on ~~August~~May 28, ~~2020,~~2021, to stockholders of record on ~~August~~May 14, ~~2020.~~2021. The safety and simplicity of our business model, combined with the predictability of our cash flows, allows us to distribute a greater percentage of income, leading to an improved dividend payout ratio after the Separation. Our refreshed tax basis allows our dividend to also be tax efficient. Before the consideration of any property sales, approximately 60% of AIR’s 2021 dividend is expected to be taxable, with approximately 40% of AIR’s dividend expected to be a tax-free return of capital. Actual results could differ materially.

Our team and culture are keys to our success. 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. We offer benefits reinforcing our value of caring for each other, including an opportunity to manage one’s life through flexible work schedules and “dress for your day,” paid time for parental leave, ~~paid time annually to volunteer in local communities, college scholarships~~profit sharing, retirement plans for ~~the children of team members, an emergency fund to help team members in crisis,~~all, financial support for our ~~team members~~teammates who are becoming United States citizens, and a bonus structure at all levels of the organization. WeConsistent with the duration of our other leave policies, we also pay full compensation and benefits for ~~team members~~teammates who are actively deployed by the United States military.

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

Our focus on our team and our culture is recognized externally, as well. Out of hundreds of participating companies in 2020, ~~we were~~AIR’s Predecessor was one of only six recognized as a “Top Workplace” in Colorado for each of the past eight years, and ~~were~~was one of only two real estate companies to receive a BEST award from the Association for Talent Development in

recognition of our company-wide success in talent development, marking ~~our~~its third consecutive year receiving this award.

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 ~~redevelop,~~ acquire and dispose of our apartment communities ~~affect~~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.

Net income from continuing operations attributable to common stockholders per common share, on a dilutive basis ~~decreased by $0.14 during~~was $0.56 for the three months ended June 30, 2020, compared to 2019, due primarily to fewer gains from dispositions and more prepayment penalties incurred during second quarter refinancing activity undertaken to increase liquidity and to benefit from current interest rates.March 31, 2021.

Pro forma FFO per share increased $0.03 during the three months ended June 30, 2020, compared to 2019, due primarily to the contribution from communities in lease-up, the net contribution from the Parkmerced mezzanine loan, and lower general and administrative expenses; offset partially by impacts of the pandemic and government lockdown mentioned previously and by “drag”, or lower contribution, from Redevelopment communities under construction.

We have not excluded from Pro forma FFO and AFFO $8.0 million, or $0.05 per share, for the following COVID-19 related impacts: $2.6 million of net incremental interest expense primarily on our $350.0 million term loan, which we secured to increase liquidity; $2.5 million of incremental bad debt expense; $1.5 million of lower commercial revenue; $0.6 million of lower other income, resulting from local restrictions on our contractual right to charge late fees; and $0.8 million of other amounts resulting from COVID-19. Additionally, we have not excluded from Pro forma FFO and AFFO for the six months ended June 30, 2020, the write-off of $2.9 million of our straight-line rent receivables for certain commercial tenants for which collectability of future rent is uncertain and $2.2 million of deferred broker commissions related to the same commercial tenants.

~~AFFO per share increased $0.04~~was $0.50 for the three months ended ~~June 30, 2020, compared~~March 31, 2021.

We measure residential rent collection as the amount of payments received as a percentage of all residential amounts owed on a proportionate basis. In the first quarter, we recognized 98.0% of all residential revenue billed during the quarter, treating the balance of 2.0% as bad debt. Of the 98.0% of residential revenue recognized, as of quarter-end, we collected in cash all but 90 basis points, with 97.1% of the residential rents collected.

As of March 31, 2021, our proportionate share of the amount of uncollected and unreserved residential accounts receivable, not offset by tenant security deposits totaled $1.2 million. Most of this balance is expected to ~~2019,~~be collected during the second quarter of 2021.

77% of our uncollected accounts receivable relate to California residents. The state of California has recently implemented the SB-91 rent relief program, where the state has agreed to pay 80% of a resident’s past due ~~primarily~~rent in exchange for the landlord forgiving the remaining 20%. We are cautiously optimistic that this program will be helpful to restoration of access to collection remedies; however, it is premature to estimate the ~~$0.03 increase in Pro forma FFO per share~~amount of potential recovery.

Looking forward, we expect bad debt expense to decline, but the timing and ~~$0.01 due~~pace will depend on unwinding the emergency ordinances that currently allow residents to ~~lower capital replacement spending.~~live rent free, so that we are again able to collect rent or to re-rent these apartments to new residents who pay the rent that is owed.

Detailed Results of Operations for the Three ~~and Six~~ Months Ended ~~June 30, 2020,~~March 31, 2021, Compared to ~~June 30, 2019~~2020

Net income ~~decreased~~from continuing operations increased by ~~$26.8 million and $309.1~~$84.2 million during the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019, respectively, as described more fully below.~~2020, due primarily to an $83.7 million gain on derecognition of leased properties.

We have ~~three~~two segments: ~~(i)~~ Same Store ~~(ii) Redevelopment and Development, and (iii) Acquisition~~ and Other Real Estate. Our Same Store segment includes communities ~~that have~~that: (i) are owned and managed by AIR and (ii) had reached a stabilized level of ~~operations as of the beginning of a two-year comparable period and maintained it throughout the current and comparable prior year and are not expected to be sold within 12 months.~~operations. Our ~~Redevelopment and Development~~Other Real Estate segment includes communities that are currently under construction, and those that have been completed in recent years that have not achieved and maintained stabilized operations for both the current and comparable prior year. Our Acquisition and Other Real Estate segment includes: (i) communities that we have acquired since the beginning of a two-year comparable period; (ii) communities that are subject to limitations on rent increases; (iii) communities that we expect to sell within 12 months but do not ~~yet~~ meet the criteria to be classified as ~~held for sale; (iv) communities that we expect to redevelop; and (v) certain commercial spaces.~~Same Store.

As of ~~June 30, 2020,~~March 31, 2021, our Same Store segment included 9493 apartment communities with ~~27,876 apartment homes.~~

~~From December 31, 2019, to June 30, 2020, on a net basis, our Same Store segment increased by three apartment communities and 1,227 apartment homes. These changes consisted of:~~

~~As of June 30, 2020, our Redevelopment and Development segment included eight apartment communities with 2,521~~25,485 apartment homes and our ~~Acquisition and~~ Other Real Estate segment included 19two apartment communities with ~~2,399~~237 apartment ~~homes and one office building.~~homes.

We use proportionate property net operating income to assess the operating performance of our ~~communities.~~communities, which excludes the results of properties retained by the Spinnee in connection with the Separation, which are included in discontinued operations. Proportionate property net operating income reflects our share of rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements, for consolidated communities. Accordingly, the results of operations of our segments discussed below are presented on a proportionate ~~basis and exclude~~basis. In September 2020, we formed a joint venture with a passive institutional investor to own a portfolio of 12 multi-family communities in California. In order for both periods to be comparable, we have presented, in addition to the actual historical changes in results of ~~four apartment communities with 142 apartment homes that we do not consolidate.~~operations of our segments, the property operating results as if the California joint venture had closed on January 1, 2020.

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, or retained by the Spinnee in the Separation, which are included in discontinued operations, reported in consolidated amounts, in our assessment of segment performance. Accordingly, these items are not allocated to our segment results discussed below.

Please ~~refer to~~see Note 78 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.

~~The results of our segments for the three months ended June 30, 2020 and 2019, as presented below, are based on segment classifications as of June 30, 2020.~~

	Three Months Ended June 30,										Three Months Ended March 31,					Historical Change						Ownership-Effected Change (1)
(in thousands)	2020		2019		$ Change			% Change			2021			2020		$			%			$			%
Rental and other property revenues, before utility reimbursements:
Same Store	$	180,779	$	182,816	$	(2,037	)		(1.1	%)	$	153,652		$	176,757	$	(23,105	)		(13.1	%)	$	(9,238	)		(5.7	%)
Redevelopment and Development		11,589		12,695		(1,106	)		(8.7	%)
Acquisition and Other Real Estate		17,415		14,097		3,318			23.5	%
Other Real Estate												1,056			1,715		(659	)		(38.4	%)		(659	)		(38.4	%)
Total		209,783		209,608		175			0.1	%		154,708			178,472		(23,764	)		(13.3	%)		(9,897	)		(6.0	%)
Property operating expenses, net of utility reimbursements:
Same Store		48,720		48,893		(173	)		(0.4	%)		44,097			46,049		(1,952	)		(4.2	%)		1,351			3.2	%
Redevelopment and Development		4,912		4,990		(78	)		(1.6	%)
Acquisition and Other Real Estate		6,485		5,431		1,054			19.4	%
Other Real Estate												1,067			1,093		(26	)		(2.4	%)		(26	)		(2.4	%)
Total		60,117		59,314		803			1.4	%		45,164			47,142		(1,978	)		(4.2	%)		1,325			3.0	%
Proportionate property net operating income:
Same Store		132,059		133,923		(1,864	)		(1.4	%)		109,555			130,708		(21,153	)		(16.2	%)		(10,589	)		(8.8	%)
Redevelopment and Development		6,677		7,705		(1,028	)		(13.3	%)
Acquisition and Other Real Estate		10,930		8,666		2,264			26.1	%
Other Real Estate												(11	)		622		(633	)		(101.8	%)		(633	)		(101.8	%)
Total	$	149,666	$	150,294	$	(628	)		(0.4	%)	$	109,544		$	131,330	$	(21,786	)		(16.6	%)	$	(11,222	)		(9.3	%)

For the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, after giving effect to the sale of partial interest in certain Same Store communities in the California joint venture, our Same Store proportionate property net operating income decreased by ~~$1.9~~$10.6 million, or ~~1.4%~~8.8%. This decrease was attributable primarily to a ~~$2.0~~$9.2 million, or ~~1.1%~~5.7%, decrease in rental and other property revenues due primarily to ~~$2.1 million, or 120~~160 basis point increase in bad debt and $1.1 million, or 70 basis point, reduction in other rental income due to local restrictions on our contractual right to charge late fees, and an approximately 140-basis point decreasedecreases in average daily ~~occupancy. This~~occupancy and also in residential rental rates. Rental and other property revenues declined an additional 60 basis points due to lower rents from commercial tenants due primarily to the economic impacts of COVID-19.

The decrease in proportionate property net operating income was ~~offset partially by a 250 basis point increase in average residential rents.~~also attributable to higher Same Store property operating expenses ~~decreased $0.2~~of $1.4 million. Controllable operating expenses were up $0.1 million ~~for~~compared to the three months ended ~~June 30,~~March 31, 2020, ~~compared to 2019, due primarily to a $1.6, or 6.3%, decrease in controllable operating expenses, which exclude utility costs,~~while real estate taxes and ~~insurance.~~insurance costs increased by $0.9 million and $0.3 million, respectively.

Redevelopment and Development proportionate property net operating income decreased by $1.0 million, or 13.3%, for the three months ended June 30, 2020, compared to 2019. This decrease was attributable primarily to de-leasing in 2019 at Flamingo Point and 707 Leahy in preparation for redevelopment, offset partially by increased occupancy driven by the lease-up at Parc Mosaic.

~~Acquisition and~~ Other Real Estate proportionate property net operating income ~~increased by $2.3 million, or 26.1%,~~ for the three months ended ~~June 30, 2020,~~March 31, 2021, compared to 2019, due to the lease-up of One Ardmore acquired in April 2019 and the acquisition of 1001 Brickell Bay Drive in July 2019, offset partially by a decrease in revenues related to commercial tenants due to the economic impacts of COVID-19 and the government lockdown.

~~The results of our segments for the six months ended June 30,~~ 2020, ~~and 2019, as presented below, are based on segment classifications as of June 30, 2020.~~

~~For the six months ended June 30, 2020, compared to 2019, our Same Store proportionate property net operating income increased by $4.7 million, or 1.8%. This increase~~ was attributable primarily to a $4.4 million, or 1.2%, increase in rental and other property revenues due primarily to a 270 basis point increase in average residential rents, offset partially by a 60 basis point increase in bad debt and a 40 basis point reduction in other rental income due to local restrictions on our contractual right to charge late fees. Same Store property operating expenses decreased by $0.4 million, contributing to the proportionate property net operating income growth, driven by a $2.4 million, or 4.9%, decrease in controllable operating expenses, offset primarily by an increase in real estate taxes and insurance.

Redevelopment and Development proportionate property net operating income decreased by $2.6 million, or 15.6%, for the six months ended June 30, 2020, compared to 2019. This decrease was attributable primarily to de-leasing in 2019 at Flamingo Point and 707 Leahy in preparation for redevelopment, offset partially by increased occupancy driven by the lease-up at Parc Mosaic.

Acquisition and Other Real Estate proportionate property net operating income increased by $5.5 million, or 30.9%, for the six months ended June 30, 2020, compared to 2019, due to the lease-up of One Ardmore acquired in April 2019 and the acquisition of 1001 Brickell Bay Drive in July 2019, offset partially by a decrease in revenues related to commercial tenants due to the economic impacts of COVID-19 and government lockdown.relatively flat.

Operating income amounts not attributed to our segments include revenues and offsite costs associated with property management, casualty losses, write-off of straight-line rent receivables, and the results of apartment communities sold or held for sale, reported in consolidated amounts, which we do not allocate to our segments for purposes of evaluating segment performance.

~~During~~ For the ~~six~~three months ended June 30, 2020, we recognized a $2.9 million write-off of straight-line rent receivables due to the impact of COVID-19 and government lockdown, and the resulting economic impact on our commercial tenants. No similar write-off was recognized in 2019.

~~Net operating income decreased for the three and six months ended June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, non-segment real estate operations increased by ~~$4.0~~$4.1 million, ~~and $11.7 million, respectively,~~or 36.0%, due ~~to the sale of apartment communities in 2020 and 2019.~~primarily to:

For the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, depreciation and amortization expense ~~increased by $5.8 million, or 6.3%, and $12.7 million, or 6.8%, respectively, due primarily to communities acquired in 2019, redeveloped apartment homes placed in service after completion~~was relatively flat.

For the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, general and administrative expenses decreased by ~~$1.8~~$3.1 million, or ~~15.7%~~41.1%, ~~and $1.5 million, or 7.1%, respectively,~~ due primarily to ~~a decrease in personnel costs.~~lower incentive compensation and structural changes made to reflect AIR’s more focused business model.

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

For the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, other expenses, net ~~were~~was relatively flat.

Interest income for three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019, other expenses, net decreased by $2.9~~2020, increased $12.0 million ~~or 32.8%,~~ due primarily to ~~a favorable incremental cash receipt in~~$6.9 million of income associated from our notes receivable from Aimco and $6.4 million of interest income associated with the four properties leased to Aimco recognized during the first quarter of ~~2020 related to a previous settlement and lower ground lease expense, offset partially by unrealized losses on our interest rate derivative.~~

~~Interest income for the three months ended June 30, 2020, compared to 2019, was relatively flat.~~

~~Interest income for six months ended June 30, 2020, compared to 2019, increased $1.6 million, or 27.2%, due primarily to a gain recognized on the early payoff of a seller financing note.~~2021.

For the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~2019,~~2020, interest expense increased by $9.3 million, or 23.4%, due primarily to refinancing activity and interest expense related to our term loan. As a result of our refinancing activity, we incurred prepayment penalties, offset partially by more favorable interest rates on refinanced fixed rate debt.

For the six months ended June 30, 2020, compared to 2019, interest expense increased by $9.2 million, or 11.4%, due primarily to refinancing activity and interest expense related to our term loan, offset partially by an increase in capitalized interest related to our active redevelopments and developments. As a result of our refinancing activity, we incurred prepayment penalties, offset partially by more favorable interest rates on refinanced fixed rate debt.was relatively flat.

During the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, we ~~sold one apartment community~~recognized an $83.7 million gain associated with ~~219 apartment homes~~the derecognition of the net book value of the four properties leased to Aimco for ~~a gain~~redevelopment and development commencing on ~~disposition of $47.2 million and net proceeds of $36.9 million.~~

During the three months ended June 30, 2019, we sold one apartment community with 399 apartment homes for a gain on disposition of $64.3 million and net proceeds of $78.1 million. During the six months ended June 30, 2019, we sold eight apartment communities with 2,605 apartment homes for a gain on dispositions of $355.8 million and net proceeds of $418.3 million.

~~The apartment community sold in 2020 was in a lower-rated location within our primary markets and had average revenues per apartment home significantly below those of our retained portfolio.~~January 1, 2021.

~~On November 26, 2019, we loaned $275.0 million~~In connection with the Separation, Aimco was allocated economic ownership of the mezzanine loan investment and option to acquire a 30% equity interest in the partnership. Subsequent to the ~~partnership owning Parkmerced Apartments.~~Separation, all risks and rewards of ownership are Aimco’s, but legal transfer is not complete. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2020, we recognized ~~$6.9~~$6.7 million ~~and $13.7 million, respectively,~~ of income in connection with the mezzanine loan. ~~For~~The mezzanine investment income was offset by an expense to recognize the ~~six months ended June 30, 2020, we have received a cash payment of $0.6 million.~~

~~We have accrued all interest amounts due as required by GAAP. Our loan is secured by approximately $300 million of borrower equity junior~~requirement that this income be contributed to ~~our loan. In the event we determine that a portion of the loan or accrued interest is not collectable, we will cease income recognition and, if appropriate, recognize an impairment.~~Aimco.

Certain of our operations, including property management, ~~and risk management,~~ are conducted through taxable REIT subsidiaries or (“TRS ~~entities. Additionally, some of our apartment communities and 1001 Brickell Bay Drive are owned through TRS entities.~~entities”).

Our income tax (expense) benefit calculated in accordance with GAAP ~~includes: (a)~~includes income taxes associated with the income or loss of our TRS entities ~~including tax on gains on dispositions,~~ for which the tax consequences have been realized or will be realized in future periods; (b) low income housing tax credits generated prior to the sale of our Asset Management business that offset REIT taxable income, primarily from retained capital gains; and (c) historic tax credits that offset income tax obligations of our TRS entities.periods. Income taxes related to these items, as well as changes in valuation allowance, ~~and the establishment of incremental deferred tax items in conjunction with intercompany asset transfers (if applicable),~~ are included in income tax (expense) benefit in our condensed consolidated statements of operations.

For the three months ended ~~June 30, 2020,~~March 31, 2021, we recognized income tax ~~benefit~~expense of ~~$2.9~~$3.1 million, compared to a $1.8 million benefit during the same period in 2019. The change is due primarily to income tax benefit associated with 1001 Brickell Bay Drive, offset partially by decreased benefit due to lower net operating losses at communities held by TRS entities.

~~For the six months ended June 30, 2020, we recognized~~Aimco’s income tax benefit of ~~$6.1 million, compared to income tax provision of $1.2~~$1.3 million during the same period in ~~2019. The change is due primarily to income tax provision on~~2020.

On December 15, 2020, we completed the ~~gain on dispositions of real estate~~Separation, which resulted in ~~2019 and an income tax benefit associated with 1001 Brickell Bay Drive, offset partially by decreased benefit~~Aimco being presented as the predecessor for AIR’s financial statements due to ~~lower~~the relative significance of AIR’s business as compared to Aimco before the Separation. The results of operations for consolidated apartment communities that were retained by Aimco are classified as discontinued operations for all periods presented.

For the three months ended March 31, 2020, apartment communities that were included in discontinued operations generated net ~~operating losses at communities held by TRS entities.~~

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 long-lived assets and capitalized costs.

Our critical accounting policies are described in more detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of ~~Aimco’s~~AIR’s and the ~~Aimco~~AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no significant changes in our critical accounting policies 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.

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 comparable financial measure computed in accordance with GAAP.

We measure our long-term total return using Economic Income, which is a non-GAAP financial measure. Economic Income represents stockholder value creation as measured by the per share change in estimated NAV plus cash dividends. We believe Economic Income is important to investors as it represents a measure of total return earned by our stockholders. We report and reconcile Economic Income annually. Please refer to the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019, for more information about Economic Income.

Free Cash Flow, as calculated for our retained portfolio, represents property net operating income, less spending for Capital Replacements, which represents our estimation of the capital additions made to replace capital assets consumed during our ownership period (further discussed under the NareitNAREIT Funds From Operations and Pro forma Funds From Operations and Adjusted Funds From Operations heading and the Liquidity and Capital Resources heading). FCF margin as calculated for apartment communities sold represents the sold apartment community’s net operating income less $1,200 per apartment home of assumed annual capital replacement spending, as a percentage of the apartment community’s rental and other property revenues. Capital replacement spending represents a measure of capital asset usage during the period; therefore, we believe that FCF is useful to investors as a supplemental measure of apartment community performance because it takes into consideration costs incurred during the period to replace capital assets that have been consumed during our ownership.

~~Nareit Funds From Operations, Pro forma Funds From Operations, and Adjusted Funds From Operations~~

~~Nareit~~NAREIT FFO is a non-GAAP ~~financial~~ measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate assets generally ~~appreciates~~appreciate over time or ~~maintains~~maintain residual value to a much greater extent than do other depreciable assets such as machinery, computers, or other personal property. ~~Nareit~~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 including (iv) our share of the FFO of unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated on the same basis to determine ~~Nareit~~NAREIT FFO. We calculate ~~Nareit~~NAREIT FFO attributable to ~~Aimco~~AIR common stockholders (diluted) by subtracting dividends on preferred stock and preferred units and amounts allocated from ~~Nareit~~NAREIT FFO to participating securities.

In addition to ~~Nareit~~NAREIT FFO, we ~~compute~~use Pro forma FFO ~~and AFFO, which are also non-GAAP financial measures that we believe are helpful~~ to ~~investors in understanding our~~measure short-term performance. Pro forma FFO represents ~~Nareit~~NAREIT FFO ~~attributable to~~as defined above, excluding the results of operations of properties retained by Aimco ~~common stockholders (diluted), excluding~~in the Separation and certain amounts that are unique or occur infrequently.

In computing ~~2020~~ Pro forma FFO, we made the following adjustments to ~~Nareit~~NAREIT FFO:

~~In computing 2019 Pro forma FFO, we made the following adjustments to Nareit FFO:~~

~~AFFO represents~~NAREIT FFO and Pro forma FFO reduced by Capital Replacements, which represent our estimation of the actual capital additions made to replace capital assets consumed during our ownership period. When we make capital additions at an apartment community, we evaluate whether the additions extend the useful life of an asset as compared to its condition at the time we purchased the apartment community. We classify as Capital Improvements those capital additions that meet this criterion, and we classify as Capital Replacements those that do not. AFFO is a key financial indicator we use to evaluate our short-term operational performance and is one of the factors that we use to determine the amounts of our dividend payments.

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

For the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 NAREIT FFO and ~~2019, Aimco’s Nareit FFO,~~ Pro forma FFO ~~and AFFO~~ are calculated as follows (in thousands, except per share data):

Please ~~refer to Financial Highlights above~~see the Results of Operations section for discussion of the factors affecting our Pro forma FFO ~~and AFFO growth~~ for ~~2020, as compared to 2019.~~2021.

The ~~Aimco~~AIR Operating Partnership does not separately compute or report ~~Nareit~~NAREIT FFO or Pro forma ~~FFO, or AFFO.~~FFO. However, based on ~~Aimco’s~~AIR’s method for allocation of such amounts to noncontrolling interests in the ~~Aimco~~AIR Operating Partnership, as well as limited differences between the amounts of net income attributable to ~~Aimco’s~~AIR’s common stockholders and the ~~Aimco~~AIR Operating Partnership’s ~~unit holders~~unitholders during the periods presented, ~~Nareit~~NAREIT FFO and Pro forma FFO ~~and AFFO~~ amounts on a per unit basis for the ~~Aimco~~AIR Operating Partnership would be expected to be substantially the same as the corresponding per share amounts for ~~Aimco.~~AIR.

As discussed under the Balance Sheet heading, ~~our leverage strategy targets the ratio of~~we target Net Leverage to Adjusted EBITDAre ~~to be~~ below ~~7.0x~~6.0x and ~~the ratio of~~ Adjusted EBITDAre to ~~Adjusted~~ Interest Expense and Preferred ~~Distributions~~Dividends above 2.5x. We also focus on the ratios of Proportionate Debt to ~~be greater than 2.5x.~~Adjusted EBITDAre and Adjusted EBITDAre Coverage of Adjusted Interest. 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.

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, and our term loan. Proportionate Debt excludes unamortized debt issuance costs because these amounts represent cash expended in earlier periods and do not reduce our contractual obligations. We reduce our recorded debt by the amounts of cash and restricted cash on-hand (which are primarily restricted under the terms of our property debt agreements), excluding tenant security deposits included in restricted cash, assuming the remaining amounts of cash and restricted cash would be used to reduce our outstanding leverage. We further reduce our recorded debt by the value of our investment in a securitization trust that holds certain of our property debt, as our payments of principal and interest associated with such property debt will ultimately repay our investments in the ~~trust.~~trust, and our notes receivable from Aimco, the proceeds from which we expect will be used to pay down property debt.

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 ~~OP Units, as used in our leverage ratios,~~equity represents the redemption ~~amount~~amounts for AIR’s Preferred Stock and the ~~Aimco~~AIR Operating Partnership’s ~~preferred OP~~Preferred Partnership Units and, although perpetual in nature, isare another component of our overall leverage.

The reconciliation of total indebtedness to Proportionate Debt and ~~Net Leverage,~~Preferred Equity, as used in our leverage ratios as of ~~June 30, 2020,~~March 31, 2021, is as follows (in thousands):

	June 30, 2020			March 31, 2021
Total indebtedness	$	4,892,183		$	4,313,192
Adjustments:
Debt issuance costs related to non-recourse property debt and term loan		23,490			16,987
Proportionate share adjustments related to debt obligations of consolidated and unconsolidated partnerships		(7,639	)
Proportionate share adjustments related to debt obligations					(484,290	)
Cash and restricted cash		(442,508	)		(75,746	)
Tenant security deposits included in restricted cash		14,074			9,514
Proportionate share adjustments related to cash and restricted cash held by consolidated and unconsolidated partnerships		874
Securitization trust investment and other		(97,311	)
Proportionate share adjustments related to cash and restricted cash					7,167
Notes receivable from Aimco					(534,127	)
Securitization trust investment					(99,983	)
Proportionate Debt	$	4,383,163		$	3,152,714
Perpetual preferred stock					2,000
Preferred OP Units		96,449			79,449
Redeemable noncontrolling interests in consolidated real estate partnership		4,492
Net Leverage	$	4,484,104		$	3,234,163

We calculated Adjusted EBITDAre used in our leverage ratios based on ~~the most recent three-month amounts, annualized.~~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 ~~allow for~~facilitate comparison of ~~our~~ credit strength ~~to different~~between AIR and other companies. EBITDAre and Adjusted EBITDAre should not be considered alternatives to net income ~~(loss)~~ 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~~NAREIT defines EBITDAre as net income computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, which we have further adjusted for:

EBITDAre is defined by ~~Nareit~~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 to exclude the effect of the following items for the reasons set forth below:

The reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three months ended ~~June 30, 2020,~~March 31, 2021, as used in our leverage ratios, is as follows (in thousands):

	Three Months Ended			Three Months Ended
	June 30, 2020			March 31, 2021
Net income	$	43,204		$	89,115
Adjustments:
Interest expense		48,802			37,035
Income tax benefit		(2,879	)
Income tax expense					3,080
Depreciation and amortization		97,689			75,280
Gain on dispositions of real estate		(47,238	)
Adjustment related to EBITDAre of unconsolidated partnerships		212
Gain on derecognition of leased properties and dispositions of real estate					(84,032	)
EBITDAre	$	139,790		$	120,478
Net loss attributable to noncontrolling interests in consolidated real estate partnerships		17
Net loss from continuing operations attributable to noncontrolling interests in consolidated real estate partnerships					235
EBITDAre adjustments attributable to noncontrolling interests		(513	)		(9,197	)
Interest income received on securitization investment		(2,216	)
Interest income on securitization investment and notes receivable from Aimco					(9,300	)
Non-cash straight-line rent		633			669
Pro forma adjustments, net (1)		1,491
Incremental cash received from leased properties					162
Pro forma FFO adjustments, net (1)					1,165
Adjusted EBITDAre	$	139,202		$	104,212
Annualized Adjusted EBITDAre	$	556,808		$	416,848

We calculated Adjusted Interest Expense, as used in our leverage ratios, based on the most recent three-month amounts annualized. Adjusted Interest Expense is a non-GAAP measure that we believe is meaningful for investors and analysts as it presents our share of current recurring interest requirements associated with leverage. Adjusted Interest Expense represents our proportionate share of interest expense on non-recourse property debt and interest expense on our revolving credit facility borrowings and term loan. We exclude from our calculation of Adjusted Interest Expense:

Preferred ~~Distributions represents~~Dividends include dividends paid with respect to AIR’s Preferred Stock and the ~~distributions paid on the Aimco~~AIR Operating Partnership’s Preferred Partnership Units, exclusive of preferred ~~OP Units.~~equity redemption related amounts. We add Preferred ~~Distributions~~Dividends to Adjusted Interest Expense for a more complete picture of the interest and dividend requirements of our leverage.

The reconciliation of interest expense to Adjusted Interest Expense and Preferred ~~Distributions~~Dividends for the three months ended ~~June 30, 2020,~~March 31, 2021, as used in our leverage ratios, is as follows (in thousands):

	Three Months Ended			Three Months Ended
	June 30, 2020			March 31, 2021
Interest expense	$	48,802		$	37,035
Adjustments:
Proportionate share adjustments related to interest of consolidated and unconsolidated partnerships		(84	)
Adjustments related to interest of consolidated partnerships					(3,914	)
Debt prepayment penalties		(6,537	)		(1,016	)
Interest income earned on securitization trust investment		(2,216	)
Interest income on securitization investment and notes receivable from Aimco					(9,300	)
Adjusted Interest Expense	$	39,965		$	22,805
Preferred distributions		1,859
Adjusted Interest Expense and Preferred Distributions	$	41,824
Preferred Dividends					1,654
Adjusted Interest Expense and Preferred Dividends				$	24,459
Annualized Adjusted Interest Expense	$	159,860		$	91,220
Annualized Adjusted Interest Expense and Preferred Distributions	$	167,296
Annualized Adjusted Interest Expense and Preferred Dividends				$	97,836

Liquidity is the ability to meet present and future financial obligations. Our primary source of liquidity is cash ~~flow~~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 ~~revolving~~new $1.4 billion credit facility, proceeds from our notes receivable from Aimco, and proceeds from equity offerings.

As of ~~June 30, 2020,~~March 31, 2021, our available liquidity was ~~approximately $1.2 billion. We have commitments for, and expect to spend, $151~~$248.1 million, ~~on long-cycle redevelopment and development projects underway.~~

Pro forma the closing of our new credit facility, as of March 31, 2021, we had the capacity to borrow up to $459.7 million, bringing total pro forma liquidity to $525.9 million. In addition, our previously announced private placement generated approximately $342.5 million in proceeds.

Additional liquidity may also be provided through property debt financing at properties unencumbered by ~~debt.~~debt and proceeds from our notes receivable from Aimco. As of ~~June 30, 2020,~~March 31, 2021, we held unencumbered communities with an estimated fair market value of approximately ~~$2.3~~$2.5 billion. Pro forma the closing of the new credit facility and the expected use of proceeds from the equity issuance, we expect to hold communities unencumbered by property debt with an estimated fair market value of approximately $4.0 billion.

Uses for liquidity include normal operating activities, payments of principal and interest on outstanding property 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 our cash provided by operating activities to meet short-term liquidity needs. In the event that our cash and cash equivalents and cash provided by operating activities are not sufficient to ~~cover~~meet our short-term liquidity needs, we have additional means, such as short-term borrowing availability and proceeds from apartment community sales and refinancings. 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 ~~redevelopment spending and~~ apartment community acquisitions, through primarily non-recourse, long-term 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. ~~Our revolving credit facility matures on~~

The following table summarizes the payments due under our non-recourse property debt commitments, excluding debt issuance costs, as of ~~June 30, 2020~~March 31, 2021 (in thousands):

~~During the six months ended June 30, 2020, we placed~~ ~~$608.8~~ ~~million of new property debt and~~ ~~refinanced another $79.9 million in July. These financings generated incremental proceeds of $370.6 million~~.

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. Currently, interest rates are low compared to historical ~~levels. Recent events have increased volatility in interest rates, resulting in substantial movements, both up~~levels and ~~down, in short periods of time. Capital~~financing is ~~still available, but with fewer sources than in past periods.~~readily available. 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 ~~fixed-rate property~~ debt. However, if ~~property~~ 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.

~~Two credit rating agencies rate~~Historically, our ~~creditworthiness and both have rated our credit and outlook as BBB- (stable), an investment grade rating. Our investment grade rating would be useful in accessing capital through the sale~~primary source of ~~bonds in private or public transactions. However, our intention and historical practice has been to raise debt capital in the form of~~leverage is property-level, non-recourse, long-dated, fixed-rate, amortizing ~~debt, the cost of which is generally less than that of recourse debt and the terms of which also provide for greater balance sheet safety.~~

debt. As of ~~June 30, 2020,~~March 31, 2021, approximately ~~91%~~79.0% of our total leverage consisted of property-level, non-recourse, long-dated, amortizing debt. ~~Approximately 99%~~As of March 31, 2021, approximately 99.5% of our property-level debt is fixed-rate, which provides a hedge against increases in interest rates, capitalization rates, and inflation. The weighted-average remaining term to maturity of our property-level debt was ~~7.7~~8.2 years. On average, ~~6.2%~~3.6% of our unpaid principal balances will mature each year from 2021 through 2023.

~~While our primary source of leverage is property-level, non-recourse, long-dated, fixed-rate, amortizing debt, we also have a credit facility with a syndicate of financial institutions.~~ As of ~~June 30, 2020,~~March 31, 2021, we had no$394.6 million outstanding borrowings under our revolving credit facility and ~~had capacity to borrow up to $793.5 million after consideration of $6.5 million of letters of credit backed by the facility.~~

~~During the three months ended June 30, 2020, we amended our Second Amended and Restated Senior Secured Credit Agreement to include a~~ $350.0 million ~~term loan. The~~borrowed under our term loan ~~represents approximately 7% of our total leverage, includes a one-year extension option, and bears interest at 30-day LIBOR plus 185-basis points with a 50-basis point LIBOR floor.~~agreement.

As of ~~June 30, 2020,~~March 31, 2021, our preferred equity, which includes outstanding preferred OP Units and outstanding perpetual preferred stock, represented approximately 2%2.1% of our total leverage. Preferred OP Units are redeemable at the holder’s ~~option; however, for~~option and our preferred stock is redeemable by AIR on or after December 15, 2025. For illustrative purposes, we compute the weighted-average maturity of our ~~total leverage~~preferred OP Units assuming a 10-year maturity onand our preferred stock assuming it is called at the ~~units.~~expiration of the no-call period.

The combination of non-recourse property-level debt, borrowings under our revolving credit facility, our term loan, our preferred OP Units, and our redeemable noncontrolling interests in a consolidated real estate partnership comprise our total leverage.

On April 14, 2021, we closed a new credit facility. The term loan proceeds from the new facility are being used to extend the maturity of our current $350 million term loan; to repay $213 million of property debt; and to reduce borrowings on our revolving credit facility. Pro forma for the new revolving credit facility and term loans, the weighted-average remaining term to maturity for our total leverage described above was ~~7.3~~8.1 years as of ~~June 30, 2020.~~March 31, 2021.

Under ~~the revolving~~our new credit facility ~~and term loan,~~agreement entered into on April 14, 2021, we have agreed to maintain ~~a Fixed Charge Coverage ratio of 1.40x,~~certain financial covenants, as well as other covenants customary for similar ~~revolving~~ credit arrangements. ~~For the trailing 12-month period ended June 30, 2020, our~~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 greater than 1.5x, a Maximum Secured Indebtedness to Total Assets ratio ~~was 2.02x.~~of no greater than 0.45 to 1.00 through March 31, 2023, and 0.40 to 1.00 thereafter, and a Maximum Unsecured Leverage ratio no greater than 0.60 to 1.00. We expect to remain in compliance with ~~this covenant~~these covenants during the next 12 months.

We like the discipline of financing a portion of our ~~investments in~~ real estate investments through the use of fixed-rate, amortizing, non-recourse property debt, as the amortization gradually reduces our leverage and reduces our refunding risk, and the fixed-rate provides a hedge against increases in interest rates, and the non-recourse feature avoids entity risk.

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.

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, net cash provided by operating activities was ~~$184.4~~$49.2 million. Our operating cash flow is affected primarily by rental rates, occupancy levels, and operating expenses related to our portfolio of apartment communities. Cash provided by operating activities for the ~~six~~three months ended ~~June 30, 2020, increased~~March 31, 2021, decreased by ~~$14.3~~$28.2 million

compared to ~~2019,~~the same period in 2020. The decrease was due primarily to ~~higher~~lower contribution from our ~~Same Store, Acquisition, and Other Real Estate~~apartment communities, ~~offset partially~~which were negatively impacted by lower ~~net operating income associated with communities sold.~~residential rental rates, lower average daily occupancy, increased bad debt expense, and waived late fees.

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, our net cash used in investing activities of ~~$160.1~~$40.3 million consisted primarily of capital ~~expenditures, partially offset by proceeds from the disposition of one apartment community.~~expenditures.

~~Total capital~~Capital additions ~~at apartment communities~~ totaled ~~$177.5~~$23.2 million and ~~$177.7~~$88.0 million during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. We generally fund capital additions with cash provided by operating activities and cash proceeds from sales of apartment communities.

We categorize capital spending for communities in our portfolio broadly into ~~seven~~four primary categories:

We exclude the amounts of capital spending related ~~to commercial spaces and~~ to apartment communities sold or classified as held for sale at the end of the period from the foregoing measures. We have also excluded from these measures indirect capitalized costs, which are not yet allocated to communities with capital additions, and their related capital spending categories.

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 for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are presented below (in thousands):

For the six months ended June 30, 2020 and 2019, we capitalized $7.1 million and $4.5 million of interest costs, respectively, and $18.1 million and $17.6 million of other direct and indirect costs, respectively.

We invested $16.7 million in capital enhancements and $129.7 million in redevelopment and development during the six months ended June 30, 2020. Capital enhancement spend decreased $24.4 million for the six months ended June 30, 2020, compared to 2019, due primarily to the delay of certain capital projects in response to the potential economic impacts of COVID-19 and the government lockdown. The increase in redevelopment spending is driven by the full redevelopments of Flamingo Point North Tower and 707 Leahy. Further details regarding our redevelopment and development activities, including apartment communities constructed and delivered as of June 30, 2020, is discussed in the Executive Overview section above.

~~For the six months ended June 30, 2020, our net cash provided by financing activities of $240.5 million was attributed to the items discussed below:~~

~~Proceeds from non-recourse property debt during the period consisted of the closing of nine fixed-rate, amortizing, non-recourse property loans totaling $608.8 million.~~

~~Principal payments on non-recourse property debt during the period totaled $274.3 million, consisting of $45.1 million of scheduled principal amortization and $229.2 million of repayments.~~

~~Proceeds of $350.0 million from the term loan that closed during the three months ended June 30, 2020.~~

~~Net repayments on our revolving credit facility of $275.0 million are due primarily to proceeds from our term loan and property debt financing activities.~~

~~Aimco common share repurchases during the six months ended June 30, 2020, totaled $10.0 million.~~

~~Net cash provided by financing activities also includes $132.7 million of payments to equity holders, as further detailed in the tables below.~~

For the three months ended March 31, 2021 and 2020, we capitalized $0.7 million and $3.4 million of interest costs, respectively, and $4.1 million and $9.9 million of other direct and indirect costs, respectively.

Other capital expenditures decreased by $67.8 million for the three months ended March 31, 2021, compared to 2020, due primarily to increased spend incurred in 2020 related to the redevelopment and development of properties that have subsequently been leased to Aimco effective January 1, 2021.

Net cash used in financing activities for the three months ended March 31, 2021 increased by $224.3 million compared to the three months ended March 31, 2020. The change was due primarily to lower net borrowings on our revolving credit facility and higher principal repayments on non-recourse debt, offset partially by no repurchases of common stock in the period compared to repurchases of $10.0 million in the prior year period.

The following table presents the ~~Aimco~~AIR Operating Partnership’s distribution activity (including distributions paid to ~~Aimco)~~AIR) during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 (in thousands):

The following table presents ~~Aimco’s~~AIR’s dividend and distribution activity during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 (in thousands):

Cash distributions paid to holders of OP Units	$	10,521	$	5,434
Cash distributions paid to holders of noncontrolling interests in consolidated real estate partnerships		118		1,401
Cash dividends paid by Aimco to common stockholders		122,058
Total cash dividends and distributions paid by Aimco	$	132,697
Cash dividends paid by AIR to preferred stockholders				50
Cash dividends paid by AIR to common stockholders				64,314
Total cash dividends and distributions paid by AIR			$	71,199

We expect to fund any future acquisitions ~~redevelopment, development,~~ and other capital spending principally with proceeds from apartment community sales, short-term borrowings, debt and equity financing, and operating cash flows. ~~Our near-term business plan does not contemplate the issuance of equity.~~ 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 ~~2020~~2021 and beyond.

As of ~~June 30, 2020,~~March 31, 2021, on a consolidated basis, we had approximately ~~$69.5~~$14.5 million of variable-rate property-level debt outstanding in addition to our $350.0 million term ~~loan.~~loan and $394.6 million of variable-rate borrowings under our revolving credit facility. We estimate that a change in 30-day LIBOR of 100 basis points with constant credit risk spreads would reduce or increase interest expense by approximately ~~$4.2~~$4.1 million and $6.2 million, respectively, on an annual basis.

As of ~~June 30, 2020,~~March 31, 2021, we had approximately ~~$442.5~~$75.7 million of cash and cash equivalents and restricted cash, a portion of which bears interest at variable rates, which may offset somewhat a change in rates on our variable-rate debt discussed above.

~~Aimco’s~~AIR’s management, with the participation of ~~Aimco’s~~AIR’s chief executive officer and chief financial officer, has evaluated the effectiveness of ~~Aimco’s~~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, ~~Aimco’s~~AIR’s chief executive officer and chief financial officer have concluded that, as of the end of such period, ~~Aimco’s~~AIR’s disclosure controls and procedures are effective.

There has been no change in ~~Aimco’s~~AIR’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~second~~first quarter of ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, ~~Aimco’s~~AIR’s internal control over financial reporting.

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

financial officer of ~~AIMCO-GP, Inc.~~AIR have concluded that, as of the end of such period, the ~~Aimco~~AIR Operating Partnership’s disclosure controls and procedures are effective.

There has been no change in the ~~Aimco~~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 ~~second~~first quarter of ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, the ~~Aimco~~AIR Operating Partnership’s internal control over financial reporting.

As of the date of this report, ~~we are updating~~there have been no material changes from the risk factors in ~~Aimco’s~~AIR’s and the ~~Aimco~~AIR Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, ~~2019, to include the following risk factor. The risk factors as-filed remain unchanged.~~2020.

A local, regional, national or international outbreak of a contagious disease, such as COVID-19, could negatively impact our tenants and our operations. The World Health Organization declared COVID-19 to be a pandemic on March 11, 2020. The outbreak of the COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting a wide variety of measures including states of emergency, mandatory quarantines, required business and school closures, implementing “shelter in place” orders and restricting travel. In addition, many cities and states have enacted, or are considering enacting, exceptions to contractual obligations for residents and commercial tenants, including government mandated rent delays or other abatement measures or concessions or prohibitions on lease terminations or evictions. Many experts predict that the outbreak will trigger a period of material global economic slowdown or a global recession.

Factors that have negatively impacted, or would negatively impact, our operations or those of entities in which we hold a partial interest (including our interest in the partnership that owns Parkmerced Apartments), during the COVID-19 pandemic or another pandemic include:

Given the ongoing and dynamic nature of the circumstances surrounding the COVID-19 pandemic, it is difficult to predict how significant the impact of this outbreak will be on the global economy, our residents and commercial tenants, our communities, and the operations of entities in which we hold a partial interest (including our interest in the partnership that owns Parkmerced Apartments), or for how long disruptions are likely to continue. The extent of such impact will depend on developments, which are highly uncertain, rapidly evolving and cannot be predicted, including the ability to contain the virus, the duration of measures implemented and the overall impact of these measures. Such developments, depending on their nature, duration, and intensity, could have a material adverse effect on our operating results and financial condition. The COVID-19 pandemic also may have the effect of heightening many of the other risks described in our combined Annual Report on Form 10-K for the year ended December 31, 2019.

From time to time, ~~Aimco~~we may issue shares of Common Stock in exchange for OP Units, defined under The ~~Aimco~~AIR Operating Partnership heading below. Such shares are issued based on an exchange ratio of one share for each common OP Unit. ~~Aimco~~We may also issue shares of Common Stock in exchange for limited partnership interests in consolidated real estate partnerships. During the three months ended ~~June 30, 2020, Aimco issued 158,938~~March 31, 2021, we did not issue any shares of Common Stock in exchange for OP Units or limited partnership interests in ~~these transactions.~~

There were no repurchases by Aimco of its common equity securities during the three months ended June 30, 2020. Aimco’s Board of Directors has, from time to time, authorized Aimco to repurchase shares of its outstanding Common Stock. As of June 30, 2020, Aimco was authorized to repurchase approximately 10.4 million shares. This authorization has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions.consolidated real estate partnerships.

The ~~Aimco~~AIR Operating Partnership did not issue any unregistered OP ~~units~~ Units during the three months ended ~~June 30, 2020~~March 31, 2021.

The ~~Aimco~~AIR Operating Partnership’s Partnership Agreement generally provides that after holding common OP Units for one year, limited partners other than ~~Aimco~~AIR have the right to redeem their common OP Units for cash or, at our election, shares of ~~Aimco~~AIR Common Stock on a one-for-one basis (subject to customary antidilution adjustments). ~~During the three months ended June 30, 2020, approximately 158,938 common~~No OP Units were redeemed in exchange for shares of Common ~~Stock.~~Stock during the three months ended March 31, 2021.

The following table summarizes the ~~Aimco~~AIR Operating Partnership’s repurchases, or redemptions in exchange for cash, of common OP Units for the three months ended ~~June 30, 2020.~~March 31, 2021.

As a REIT, ~~Aimco~~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 ~~revolving~~ credit ~~facility~~agreement includes customary covenants, including a restriction on dividends and distributions and other restricted payments, but permits dividends and distributions during any four consecutive fiscal quarters in an aggregate amount of up to 95% of ~~Aimco’s~~AIR’s FFO for such period, subject to certain non-cash adjustments, or such amount as may be necessary to maintain ~~Aimco’s~~AIR’s REIT ~~status and avoid the payment of federal income or excise tax. Aimco’s Board of Directors targets a dividend payout ratio between 65% and 70% of AFFO.~~status.

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

Maryland (Apartment ~~Investment and Management Company)~~Income REIT Corp.)		~~84-1259577~~84-1299717
Delaware (AIMCO Properties, L.P.)		84-1275621
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

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

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Class A Common Stock ~~(Aimco Investment and Management Company)~~(Apartment Income REIT Corp.)		~~AIV~~AIRC		New York Stock Exchange

Large accelerated filer	☒☐	Accelerated filer	☐
Non-accelerated filer	☐☒	Smaller reporting company	☐
		Emerging growth company	☐

Large accelerated filer	☐	Accelerated filer	☒☐
Non-accelerated filer	☐☒	Smaller reporting company	☐
		Emerging growth company	☐

		Page
	PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Apartment ~~Investment and Management Company:~~Income REIT Corp.:
	Condensed Consolidated Balance Sheets (Unaudited)	34
	Condensed Consolidated Statements of Operations (Unaudited)	45
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	56
	Condensed Consolidated Statements of Equity (Unaudited)	67
	Condensed Consolidated Statements of Cash Flows (Unaudited)	8
	AIMCO Properties, L.P.:
	Condensed Consolidated Balance Sheets (Unaudited)	9
	Condensed Consolidated Statements of Operations (Unaudited)	10
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	11
	Condensed Consolidated Statements of Partners’ Capital (Unaudited)	12
	Condensed Consolidated Statements of Cash Flows (Unaudited)	1413
	Notes to the Condensed Consolidated Financial Statements of Apartment ~~Investment and Management Company~~Income REIT Corp. and AIMCO Properties, L.P. (Unaudited)	1514
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2325
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4340
ITEM 4.	CONTROLS AND PROCEDURES	4340
	PART II. OTHER INFORMATION
ITEM 1A.	RISK FACTORS	4542
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4542
ITEM 6.	EXHIBITS	4743
Signatures		4844

Balance at December 31, 2019	$	97,064
Preferred distributions		(3,728	)
Redemption of preferred units		(615	)
Net income		3,728
Balance at June 30, 2020	$	96,449

Balance at December 31, 2020	$	79,449
Preferred distributions		(1,604	)
Net income		1,604
Balance at March 31, 2021	$	79,449

	As of June 30, 2020				As of December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-recourse property debt	$	4,565,673	$	4,656,612	$	4,251,339	$	4,298,630

	March 31, 2021		December 31, 2020
VIEs with interests in apartment communities		5		5
Apartment communities owned by VIEs		16		16
Apartment homes in communities owned by VIEs		5,369		5,369

	March 31, 2021		December 31, 2020
ASSETS:
Net real estate	$	1,114,993	$	1,125,315
Cash and cash equivalents		16,345		10,548
Restricted cash		8,450		8,818
Other assets		28,456		23,870
LIABILITIES:
Non-recourse property debt secured by AIR communities, net	$	1,274,457	$	1,278,318
Accrued liabilities and other		35,206		34,038

	Three Months Ended
	March 31, 2020
REVENUES:
Rental and other property revenues	$	38,509
OPERATING EXPENSES:
Property operating expenses		13,321
Depreciation and amortization		19,030
Other expenses, net		198
Total operating expenses		32,549

Interest income		534
Interest expense		(4,530	)
Income from unconsolidated real estate partnerships		182
Income before income tax benefit		2,146
Income tax benefit		1,919
Income from discontinued operations, net of tax		4,065
Net loss attributable to noncontrolling interests in consolidated real estate partnerships		103
Net income from discontinued operations attributable to Spinnee	$	4,168

2021 (remaining)	$	18,947
2022		25,262
2023		25,262
2024		25,262
2025		25,373
Thereafter		730,446
Lease payments plus guaranteed residual value (1) (2)	$	850,552
Add: Unguaranteed residual value		131,580
Less: Discount		(515,119	)
Total leased real estate assets	$	467,013

	Location	Homes Approved for Redevelopment		Homes Completed		Homes Leased		Total Planned Investment (1)		Investment to Date		Expected Initial Occupancy (2)	Expected NOI Stabilization (3)
Short-cycle redevelopments:
Bay Parc	Miami, FL		90		75		67	$	27.7	$	26.4	N/A	N/A
Flamingo Point Center Tower	Miami Beach, FL		58		18		13		16.0		3.9	N/A	N/A
Long-cycle redevelopments:
707 Leahy (4)	Redwood City, CA		110		12		41		25.0		21.7	1Q 2020	2Q 2022
Eldridge Townhomes (5)	Elmhurst, IL		58		18		29		35.1		31.0	2Q 2020	4Q 2022
Flamingo Point North Tower	Miami Beach, FL		366		—		—		171.0		64.4	4Q 2021	2Q 2024
The Fremont (6)	Denver, CO (MSA)		253		21		37		87.0		81.1	3Q 2020	1Q 2023
Parc Mosaic (7)	Boulder, CO		226		226		175		124.6		123.6	3Q 2019	1Q 2022
Prism (8)	Cambridge, MA		136		—		1		73.2		42.1	1Q 2021	3Q 2023
Total			1,297		370		363	$	559.6	$	394.2

Average revenue per Aimco apartment home (1)	$	2,254
Portfolio average rents as a percentage of local market average rents		112	%
Percentage A (average revenue per Aimco apartment home $2,942)		53	%
Percentage B (average revenue per Aimco apartment home $1,987)		29	%
Percentage C+ (average revenue per Aimco apartment home $1,758)		18	%

Average revenue per apartment home (1)		$2,233
Percentage A (average revenue per apartment home $2,809)		57%
Percentage B (average revenue per apartment home $1,979)		26%
Percentage C+ (average revenue per apartment home $1,764)		17%

		Annualized Current Quarter
Proportionate Debt to Adjusted EBITDAre		~~7.9x~~7.6x
Net Leverage to Adjusted EBITDAre		~~8.1x~~7.8x
Adjusted EBITDAre to Adjusted Interest Expense		~~3.5x~~4.6x
Adjusted EBITDAre to Adjusted Interest Expense and Preferred ~~Distributions~~Dividends		~~3.3x~~4.3x

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net income attributable to Aimco common stockholders (1)	$	39,212		$	59,234		$	45,891		$	330,802
Adjustments:
Real estate depreciation and amortization, net of noncontrolling partners’ interest		95,109			89,780			192,901			181,154
Gain on dispositions and other, net of noncontrolling partners’ interest		(47,238	)		(64,310	)		(47,204	)		(355,783	)
Income tax adjustments related to gain on dispositions and other tax-related items		152			210			378			6,736
Common noncontrolling interests in Aimco Operating Partnership’s share of above adjustments		(2,446	)		(1,356	)		(7,542	)		8,893
Amounts allocable to participating securities		(15	)		(73	)		(54	)		243
Nareit FFO attributable to Aimco common stockholders	$	84,774		$	83,485		$	184,370		$	172,045
Adjustments, all net of common noncontrolling interests in Aimco Operating Partnership and participating securities:
Prepayment penalties		6,203			—			6,203			—
Straight-line rent		633			634			1,268			2,946
Preferred equity redemption related amounts		—			3,864			—			3,864
Severance costs, litigation, and other, net		1,731			595			1,731			620
Pro forma FFO attributable to Aimco common stockholders	$	93,341		$	88,578		$	193,572		$	179,475
Capital Replacements, net of common noncontrolling interests in Aimco Operating Partnership and participating securities		(11,403	)		(13,134	)		(23,008	)		(22,845	)
AFFO attributable to Aimco common stockholders	$	81,938		$	75,444		$	170,564		$	156,630

Total share and dilutive share equivalents used to calculate Net income and Nareit FFO per share (2)		148,553			148,599			148,670			147,220
Adjustment to weight reverse stock split (3)		—			—			—			1,242
Pro forma shares and dilutive share equivalents used to calculate Pro forma FFO and AFFO per share		148,553			148,599			148,670			148,462

Net income attributable to Aimco per common share – diluted	$	0.26		$	0.40		$	0.31		$	2.25
Nareit FFO per share – diluted	$	0.57		$	0.56		$	1.24		$	1.17
Pro forma FFO per share – diluted	$	0.63		$	0.60		$	1.30		$	1.21
AFFO per share – diluted	$	0.55		$	0.51		$	1.15		$	1.06

	Three Months Ended March 31,
	2021
Net income attributable to AIR common stockholders	$	83,196
Adjustments:
Real estate depreciation and amortization, net of noncontrolling partners’ interest		69,495
Gain on derecognition of leased properties and dispositions of real estate		(84,032	)
Income tax adjustments related to gain on dispositions and other tax-related items		1,800
Common noncontrolling interests in AIR OP’s share of above Adjustments		644
Amounts allocable to participating securities		7
NAREIT FFO attributable to AIR common stockholders	$	71,110
Adjustments, all net of common noncontrolling interests in AIR Operating Partnership and participating securities:
Separation costs		2,057
Prepayment penalties		943
Non-cash straight line rent		635
Incremental cash received from leased properties		154
Pro forma FFO	$	74,899

Pro forma shares and dilutive share equivalents used to calculate Pro forma FFO per share		148,830

Net income attributable to AIR per common share – diluted	$	0.56
NAREIT FFO per share – diluted	$	0.48
Pro forma FFO per share – diluted	$	0.50

Cash distributions paid by the Aimco Operating Partnership to preferred unitholders	$	3,728
Cash distributions paid by the Aimco Operating Partnership to common unitholders (1)		128,851
Cash distributions paid to holders of noncontrolling interests in consolidated real estate partnerships		118
Total cash distributions paid by the Aimco Operating Partnership	$	132,697

Cash distributions paid by the AIR Operating Partnership to preferred unitholders	$	1,654
Cash distributions paid by the AIR Operating Partnership to common unitholders (1)		68,144
Cash distributions paid to holders of noncontrolling interests in consolidated real estate partnerships		1,401
Total cash distributions paid by the AIR Operating Partnership	$	71,199

Fiscal period	Total Number of Units Purchased		Average Price Paid per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Units that May Yet Be Purchased Under the Plans or Programs (1)
April 1, 2020 ‒ April 30, 2020		24	$	43.59	N/A	N/A
May 1, 2020 ‒ May 31, 2020		7,407		36.52	N/A	N/A
June 1, 2020 ‒ June 30, 2020		19		38.56	N/A	N/A
Total		7,450	$	36.55


EXHIBIT NO. ~~(1)~~		DESCRIPTION

3.1		Amended and Restated Charter ~~– Articles~~ of ~~Restatement~~Apartment Income REIT Corp. (Exhibit 3.1 to ~~Aimco’s Annual~~AIR’s Current Report on Form ~~10-K~~8-K dated ~~February 24,~~December 15, 2020, is incorporated herein by this reference)

3.2		Amended and Restated Bylaws of Apartment Income REIT Corp. (Exhibit ~~3.1~~3.4 to ~~Aimco’s~~AIR’s Current Report on Form 8-K dated ~~January 26, 2016,~~December 15, 2020, is incorporated herein by this reference)

4.1		Description of ~~Aimco’s~~AIR’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of ~~1934.~~1934 (Exhibit 4.1 to ~~Aimco’s~~AIR’s Annual Report on Form 10-K dated ~~February 24, 2020,~~March 12, 2021, is incorporated herein by this reference)

10.1		Sixth~~Fifth~~ Amended and Restated Agreement of Limited Partnership of ~~the Aimco Operating Partnership,~~AIMCO Properties, L.P., effective as of December 14, 2020 (Exhibit 10.1 to AIR’s Current Report on Form 8-K dated December 15, 2020, is incorporated herein by this reference)

10.2		Credit Agreement, dated as of ~~July 29, 1994,~~April 14, 2021, by and among Apartment Income REIT Corp., AIR REIT Sub 1, LLC, AIR REIT Sub 2, LLC, AIMCO SUBSIDIARY REIT I, LLC, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., the lenders party thereto and PNC Bank, National Association, as ~~amended and restated as of April 8, 2019~~administrative agent (Exhibit 10.1 to ~~Aimco’s~~AIR’s Current Report on Form 8-K dated April ~~5, 2019,~~14, 2021, 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 – ~~Aimco~~AIR

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 – ~~Aimco~~AIR

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 ~~Aimco~~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 ~~Aimco~~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 – ~~Aimco~~AIR

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 ~~Aimco~~AIR Operating Partnership

101		The following materials from ~~Aimco’s~~AIR’s and the ~~Aimco~~AIR Operating Partnership’s combined Quarterly Report on Form 10-Q for the quarterly period ended ~~June 30, 2020,~~March 31, 2021, 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).

	APARTMENT ~~INVESTMENT AND~~ ~~MANAGEMENT COMPANY~~INCOME REIT CORP.

	By:	/s/ Paul Beldin
		Paul Beldin
		Executive Vice President and Chief Financial Officer
		(duly authorized officer and principal financial officer)

	AIMCO PROPERTIES, L.P.

	By:	AIMCO-GP, Inc., its ~~general partner~~General Partner

	By:	/s/ Paul Beldin
		Paul Beldin
		Executive Vice President and Chief Financial Officer
		(duly authorized officer and principal financial officer)