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Variable Interest Entities | 6 Months Ended
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Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Variable Interest Entities | Note 6 — Variable Interest Entities We evaluate our investments in limited partnerships and similar entities in accordance with applicable consolidation guidance to determine whether each such entity is a VIE. The accounting standards for the consolidation of VIEs require qualitative assessments to determine whether we are the primary beneficiary. The primary beneficiary analysis is based on power and economics. We conclude that we are the primary beneficiary and consolidate the VIE if we have both: (i) the power to direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. Significant judgments and assumptions related to these determinations include, but are not limited to, estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. We consolidate Aimco Operating Partnership, a VIE of which we are the primary beneficiary. Through Aimco Operating Partnership, we consolidate all VIEs for which we are the primary beneficiary. Substantially all of our assets and liabilities are those of Aimco Operating Partnership. Aimco Operating Partnership is the primary beneficiary, and therefore consolidates its five VIEs that own interests in real estate. Assets of our consolidated VIEs must first be used to settle the liabilities of those VIEs. The consolidated VIEs' creditors do not have recourse to the general credit of Aimco Operating Partnership. In addition, we have eight unconsolidated VIEs for which we are not the primary beneficiary because we are not their primary decision maker. The eight unconsolidated VIEs include four unconsolidated real estate partnerships that hold four apartment communities in San Diego, California, the Mezzanine Investment, our passive equity investment in IQHQ, and our two unconsolidated investments in land held for development in Miami, Florida and Bethesda, Maryland. Our maximum exposure to loss because of our involvement with the unconsolidated VIEs is limited to the carrying value of their assets. The details of our consolidated and unconsolidated VIEs, excluding those of Aimco Operating Partnership, are summarized in the table below as of June 30, 2023, and December 31, 2022 (in thousands, except for VIE count):
|  | As of June 30, 2023 |  |  | As of December 31, 2022 |
|  | Consolidated |  |  | Unconsolidated |  |  | Consolidated |  |  | Unconsolidated |
Count of VIEs |  | 5 |  |  | 8 |  |  | 5 |  |  | 8 |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Real estate, net |  | $ | 375,145 |  |  | $ | — |  |  | $ | 258,529 |  |  | $ | — |
Cash and cash equivalents |  |  | 4,541 |  |  |  | — |  |  |  | 5,075 |  |  |  | — |
Restricted Cash |  |  | 7,675 |  |  |  | — |  |  |  | 1,747 |  |  |  | — |
Mezzanine investment |  |  | — |  |  |  | 158,301 |  |  |  | — |  |  |  | 158,558 |
Interest rate options |  |  | 4,887 |  |  |  | — |  |  |  | 3,900 |  |  |  | — |
Right-of-use lease assets |  |  | 109,631 |  |  |  | — |  |  |  | 110,269 |  |  |  | — |
Unconsolidated real estate partnerships |  |  | — |  |  |  | 20,808 |  |  |  | — |  |  |  | 15,789 |
Other assets, net |  |  | 23,027 |  |  |  | 59,883 |  |  |  | 25,623 |  |  |  | 59,823 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Accrued liabilities and other |  |  | 49,373 |  |  |  | — |  |  |  | 26,003 |  |  |  | — |
Non-recourse property debt, net |  |  | 22,779 |  |  |  | — |  |  |  | 22,689 |  |  |  | — |
Construction loans, net |  |  | 102,230 |  |  |  | — |  |  |  | 40,013 |  |  |  | — |
Lease liabilities |  |  | 116,593 |  |  |  | — |  |  |  | 114,625 |  |  |  | — |
Mezzanine investment - participation sold |  |  | — |  |  |  | 33,977 |  |  |  | — |  |  |  | — |

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//810/tableOfContent + Details
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