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Other Significant Transactions
6 Months Ended
Jun. 30, 2013
Other Significant Transactions [Abstract]  
Other Significant Transactions
NOTE 4 — Other Significant Transactions
Investments in Real Estate Properties
During the three months ended June 30, 2013, we acquired for $29.0 million a 60-unit property located in La Jolla, California. In connection with this acquisition, we assumed non-recourse property debt with an outstanding principal balance of $12.4 million and a fair value of $14.8 million, resulting in a total fair value of $31.3 million allocated to real estate.
Purchase of West Harlem Property Loans
In 2006, we funded $100.1 million of second mortgage loans related to 84 buildings containing 1,596 residential units and 43 commercial spaces in the West Harlem neighborhood of New York City. We concurrently entered into an agreement with the borrower under which we had the right to purchase the buildings and the borrower had the right to put the buildings to us upon achievement of certain revenue thresholds. At June 30, 2013 and December 31, 2012, the aggregate carrying amount of these second mortgage loans and the purchase option, which are included in notes receivable and other assets in our condensed consolidated balance sheets, totaled $110.2 million and $110.5 million, respectively.
During the three months ended June 30, 2013, we purchased at par first mortgage loans secured by the same 84 buildings for $119.1 million, the majority of which matured on June 1, 2013. The loans bear interest at a weighted average rate of 5.2%. In conjunction with the acquisition of the first mortgage loans, the borrower agreed to repay all loans on or before November 22, 2013 and to pay us the value of our unexercised option to acquire the properties and to terminate its right to put the properties to us.
Acquisitions of Noncontrolling Partnership Interests
During the three months ended June 30, 2013, we acquired for $10.7 million the remaining noncontrolling limited partner interests in one consolidated real estate partnership that owns two properties in which we serve as general partner. The noncontrolling interest balance attributed to these limited partners was in a deficit position at the time of acquisition.The excess of the consideration paid over the carrying amount of the noncontrolling interests we acquired is reflected as an adjustment of additional paid-in capital within Aimco's equity and the Aimco Operating Partnership's partners' capital (see equity and partners' capital reconciliations in Note 2). The estimated fair value of the real estate corresponding to the interests we acquired totaled $21.0 million.
Asset Management Business Disposition
In December 2012, we closed the sale of the Napico portfolio, our legacy asset management business. The transaction was primarily seller-financed, and the associated notes are scheduled to be repaid over six years. The notes will be repaid from the operation and liquidation of the Napico portfolio and are collateralized by the buyer’s interests in the portfolio. 
In accordance with the provisions of GAAP applicable to sales of real estate or interests therein, for accounting purposes, we have not recognized a sale and will account for the transaction under the profit sharing method. Under this method, until full payment has been received for the seller-financed notes, we will continue to recognize the portfolio’s assets and liabilities, each condensed into single line items within other assets and accrued liabilities and other, respectively, in our consolidated balance sheets for all dates following the transaction. Similarly, we will continue to recognize the portfolio’s results of operations, also condensed into a single line item within our consolidated statements of operations, for periods subsequent to the transaction. Any cash payments we receive under the sale and related financing will be reflected as deferred income in our consolidated balance sheets until full payment has been received for the seller-financed notes.
At June 30, 2013, the Napico portfolio consisted of 20 partnerships that held investments in 17 apartment properties that were consolidated and 92 apartment properties that were accounted for under the equity or cost method of accounting. The portfolio’s assets and liabilities included in our condensed consolidated balance sheets are summarized below (in thousands):
 
June 30, 2013
 
December 31, 2012
Real estate, net
$
128,917

 
$
127,025

Cash and cash equivalents and restricted cash
30,092

 
31,560

Investment in unconsolidated real estate partnerships
13,943

 
15,997

Other assets
4,150

 
4,163

Total assets
$
177,102

 
$
178,745

Total indebtedness
$
112,077

 
$
110,737

Accrued and other liabilities
29,646

 
29,435

Total liabilities
$
141,723

 
$
140,172


Summarized information regarding the Napico portfolio's results of operations, including any expense we recognize under the profit sharing method is shown below and is included in loss on dispositions and other in our condensed consolidated statement of operations (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2013
 
June 30, 2013
Revenues
$
7,395

 
$
13,333

Expenses
(5,667
)
 
(11,935
)
Equity in earnings or loss of unconsolidated entities, gains or losses on dispositions and other, net
(2,997
)
 
(4,094
)
Net loss related to legacy asset management business
(1,269
)
 
(2,696
)
Noncontrolling interests in consolidated real estate partnerships
1,623

 
3,410

Net income of legacy asset management business attributable to Aimco and the Aimco Operating Partnership
$
354

 
$
714


Based on our limited historical economic ownership in this portfolio, a significant portion of the assets and liabilities and results of operations shown are attributable to noncontrolling interests and do not significantly affect consolidated equity, partners’ capital and income or loss attributable to Aimco or the Aimco Operating Partnership. At June 30, 2013 and December 31, 2012, noncontrolling interests in consolidated real estate partnerships within our consolidated balance sheet included $52.8 million and $57.2 million, respectively, related to the Napico portfolio. Income or loss attributable to these noncontrolling interests will continue to be recognized commensurate with the recognition of the results of operations of the portfolio. If full payment is received on the notes and we meet the requirements to recognize the sale for accounting purposes, we expect to recognize a gain attributable to Aimco and the Aimco Operating Partnership.