Variable Interest Entities

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Note 5 — 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 of, and therefore consolidates, six 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 seven unconsolidated VIEs for which we are not the primary beneficiary because we are not their primary decision maker. The seven 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 an unconsolidated investment in land held for development in 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 December 31, 2024 and 2023 (in thousands, except for Count of VIEs):


	As of December 31, 2024				As of December 31, 2023
	Consolidated		Unconsolidated		Consolidated		Unconsolidated
Count of VIEs	6		7		5		8
Assets
Net real estate	$	593,837	$	—	$	466,719	$	—
Cash and cash equivalents		4,625		—		3,940		—
Restricted cash		14,913		—		—		—
Notes receivable		18,571		—		17,432		—
Right-of-use lease assets - finance leases		107,714		—		108,992		—
Other assets, net		26,028		26,226		19,393		82,948
Liabilities
Non-recourse construction loans, net		385,240		—		201,103		—
Lease liabilities - finance leases		121,845		—		118,697		—
Accrued liabilities and other		14,518		33,500		35,881		31,018

In September 2024, we secured a $55.5 million preferred equity commitment from a third-party for the development of a luxury water-front rental development, located at 640 NE 34th Street in Miami, Florida. In addition, we secured a non-recourse construction loan commitment for up to $172.0 million that has a maturity date of October 1, 2028, prior to the consideration of a one year extension option. As a result, we performed a reassessment of the entity that owns the property located at 640 NE 34th Street, concluding that it became a VIE and that we are the primary beneficiary. While the consolidation status did not change as it was already consolidated prior to the VIE assessment, its assets and liabilities as of December 31, 2024 are incorporated in the table above.

In December 2024, we closed on the sale of our ownership interest in an unconsolidated investment in land held for development in the Edgewater neighborhood of Miami, Florida. Refer to Note 2 for additional discussion of the OTTI recognized in connection with this transaction.