NOTE 4 — Other Significant Transactions

Investments in Real Estate Properties

During the periods presented, we acquired conventional properties as set forth in the table below (dollars in thousands):



	Three Months Ended
	June 30, 2013		September 30, 2013
Property location	La Jolla, CA		Atlanta, GA		Boston, MA
Number of apartment homes	60		30		44
Acquisition price	$	29,000	$	9,450	$	15,125
Non-recourse property debt assumed (outstanding principal balance)	$	12,446	$	—	$	—
Non-recourse property debt assumed (fair value)	$	14,767	$	—	$	—
Total fair value allocated to real estate	$	31,321	$	9,450	$	15,125

Purchase of West Harlem Property Loans

In 2006, we funded $100.1 million of second mortgage loans related to 84 buildings containing 1,596 apartment homes 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 require us to purchase the buildings upon achievement of certain revenue thresholds. At September 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 nine months ended September 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, pay us the value of our unexercised option to acquire the properties and terminate its right to require us to purchase the properties.

Acquisitions of Noncontrolling Partnership Interests

During the nine months ended September 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 September 30, 2013, the Napico portfolio consisted of 19 partnerships that held investments in 16 apartment properties that were consolidated and 77 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 (exclusive of amounts related to properties sold by the owner of this portfolio through September 30, 2013, which are classified within assets held for sale or liabilities related to assets held for sale) are summarized below (in thousands):



	September 30, 2013		December 31, 2012
Real estate, net	$	126,085	$	125,715
Cash and cash equivalents and restricted cash	30,402		31,558
Investment in unconsolidated real estate partnerships	12,755		15,987
Other assets	4,073		4,163
Total assets	$	173,315	$	177,423
Total indebtedness	$	109,512	$	108,540
Accrued and other liabilities	29,224		29,427
Total liabilities	$	138,736	$	137,967

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			Nine Months Ended
	September 30, 2013			September 30, 2013
Revenues	$	6,059		$	19,028
Expenses	(5,773		)	(17,418		)
Equity in earnings or loss of unconsolidated entities, gains or losses on dispositions and other, net	(2,173		)	(6,180		)
Net loss related to legacy asset management business	(1,887		)	(4,570		)
Noncontrolling interests in consolidated real estate partnerships	1,770			5,167
Net (losses) income of legacy asset management business attributable to Aimco and the Aimco Operating Partnership	$	(117	)	$	597

The results of any properties sold by the owner of the portfolio through September 30, 2013 are presented within discontinued operations in our condensed consolidated statements of operations and are excluded from the presentation above. 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 and partners’ capital and income or loss attributable to Aimco or the Aimco Operating Partnership. At September 30, 2013 and December 31, 2012, noncontrolling interests in consolidated real estate partnerships within our consolidated balance sheet included $51.9 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.