Real Estate Dispositions

9 Months Ended

Sep. 30, 2011

Real Estate Dispositions [Abstract]

Real Estate Dispositions

NOTE 3 — Real Estate Dispositions

Real Estate Dispositions (Discontinued Operations)

We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy. At the end of each reporting period, we evaluate whether such properties meet the criteria to be classified as held for sale, including whether such properties are expected to be sold within 12 months. Additionally, certain properties that do not meet all of the criteria to be classified as held for sale at the balance sheet date may nevertheless be sold in the subsequent 12 months; thus, the number of properties that may be sold during the subsequent 12 months could exceed the number classified as held for sale at the particular balance sheet date. At September 30, 2011 we had no properties classified as held for sale. At December 31, 2010, we had 39 properties with an aggregate of 6,701 units classified as held for sale. Amounts classified as held for sale in the accompanying condensed consolidated balance sheets are as follows (in thousands):

	December 31,
	2010
Real estate, net	$	235,674
Other assets		3,046
Assets held for sale	$	238,720
Property debt	$	166,171
Other liabilities		1,858
Liabilities related to assets held for sale	$	168,029

During the nine months ended September 30, 2011 and 2010, we sold or disposed of 39 properties and 31 properties with an aggregate of 6,701 units and 5,048 units, respectively. During the year ended December 31, 2010, we disposed of 51 consolidated properties with an aggregate of 8,189 units. Discontinued operations for all periods presented includes the results of operations for the periods prior to the date of disposition for all properties disposed on or before September 30, 2011.

The following is a summary of the components of income from discontinued operations and the related amounts of income from discontinued operations attributable to Aimco and to noncontrolling interests for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Rental and other property revenues	$	3,428		$	21,202		$	23,917		$	77,596
Property operating expenses		(2,816	)		(12,489	)		(13,355	)		(42,761	)
Depreciation and amortization		(931	)		(6,340	)		(7,695	)		(21,909	)
Provision for operating real estate impairment losses		(5,522	)		(1,429	)		(11,829	)		(9,550	)
Operating (loss) income		(5,841	)		944			(8,962	)		3,376
Interest income		44			111			361			298
Interest expense		(862	)		(4,082	)		(5,252	)		(14,209	)
Loss before gain on dispositions of real estate and income tax		(6,659	)		(3,027	)		(13,853	)		(10,535	)
Gain on dispositions of real estate		37,467			21,084			64,901			74,406
Income tax benefit (expense)		160			453			(89	)		2,010
Income from discontinued operations, net	$	30,968		$	18,510		$	50,959		$	65,881
Income from discontinued operations attributable to:
Noncontrolling interests in consolidated real estate partnerships	$	(12,734	)	$	(5,205	)	$	(18,689	)	$	(21,372	)
Noncontrolling interests in Aimco Operating Partnership		(1,274	)		(890	)		(2,211	)		(2,983	)
Total noncontrolling interests		(14,008	)		(6,095	)		(20,900	)		(24,355	)
Income from discontinued operations attributable to Aimco	$	16,960		$	12,415		$	30,059		$	41,526

Gain on dispositions of real estate is reported net of incremental direct costs incurred in connection with the transactions, including any prepayment penalties incurred upon repayment of property loans collateralized by the properties being sold. Such prepayment penalties totaled $2.6 million and $7.6 million for the three and nine months ended September 30, 2011, respectively, and $0.6 million and $3.8 million for the three and nine months ended September 30, 2010, respectively. We classify interest expense related to property debt within discontinued operations when the related real estate asset is sold or classified as held for sale.

In connection with properties sold or classified as held for sale during the three and nine months ended September 30, 2011, we allocated $1.0 million and $2.7 million, respectively, of goodwill related to our conventional and affordable segments to the carrying amounts of the properties sold or classified as held for sale. Of these amounts, $0.9 million and $2.2 million, respectively, were recognized as a reduction of gain on dispositions of real estate and $0.1 million and $0.5 million, respectively, were recognized as an adjustment of impairment losses during the three and nine months ended September 30, 2011. In connection with properties sold or classified as held for sale during the three and nine months ended September 30, 2010, we allocated $0.5 million and $3.3 million, respectively, of goodwill related to our conventional and affordable segments to the carrying amounts of the properties sold or classified as held for sale. Of these amounts, $0.3 million and $2.9 million, respectively, were treated as a reduction of gain on dispositions of real estate and $0.2 million and $0.4 million, respectively, were treated as an adjustment of impairment losses during the three and nine months ended September 30, 2010. The amounts of goodwill allocated to these properties were based on the relative fair values of the properties sold or classified as held for sale and the retained portions of the reporting units to which the goodwill was allocated.

In connection with our real estate dispositions during the nine months ended September 30, 2011 and 2010, the purchasers assumed approximately $95.4 million and $120.9 million, respectively, of non-recourse property debt.