Other Significant Transactions

Investment in Apartment Communities

During the three months ended September 30, 2014, we acquired for $118.5 million a 600-apartment home community located in the Denver, Colorado suburb of Aurora. In connection with this acquisition, we preliminarily allocated $1.6 million of the purchase price to in-place lease intangible assets, resulting in a total fair value of $116.9 million allocated to real estate.

Asset Management Business Disposition

In December 2012, we sold the Napico portfolio, our legacy asset management business. The transaction was primarily seller-financed, and the associated notes are scheduled to be repaid over several years. The notes will be repaid from the operation and liquidation of the 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 the sale and are accounting for the transaction under the profit sharing 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. To date we have received all required payments under the seller-financed notes.

At September 30, 2014, the Napico portfolio consisted of 17 partnerships that held investments in 14 apartment communities that were consolidated and 57 apartment communities that were accounted for under the equity or cost methods of accounting. The portfolio’s assets and liabilities included in our condensed consolidated balance sheets are summarized below (in thousands):



	September 30, 2014		December 31, 2013
Real estate, net	$	119,416	$	120,175
Cash and cash equivalents	21,448		22,602
Investment in unconsolidated real estate partnerships	8,065		10,817
Other assets	10,731		10,255
Total assets	$	159,660	$	163,849

Total indebtedness	$	106,642	$	106,032
Accrued and other liabilities	6,135		19,263
Total liabilities	$	112,777	$	125,295

Noncontrolling interests in consolidated real estate partnerships	45,267		35,818
Equity attributable to Aimco and the Aimco Operating Partnership	1,616		2,736
Total liabilities and equity	$	159,660	$	163,849

During the nine months ended September 30, 2014, approximately $9.2 million of non-recourse debt payable to a noncontrolling limited partner was contributed to the partnership's capital, pursuant to the dissolution provisions of the partnership, resulting in an increase in noncontrolling interests.

Summarized information regarding the Napico portfolio’s results of operations, including any expense we recognize under the profit sharing method, is shown below in thousands. The net loss related to Napico (before noncontrolling interests) is included in other, net in our condensed consolidated statements of operations.



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenues	$	9,884		$	5,676		$	21,234		$	18,036
Expenses	(5,114		)	(5,311		)	(15,992		)	(16,107		)
Equity loss of unconsolidated entities, gains or losses on dispositions and other, net	(3,246		)	(2,188		)	(5,198		)	(7,663		)
Net income (loss) related to legacy asset management business	1,524			(1,823		)	44			(5,734		)
Income tax benefit (expense) associated with legacy asset management business	101			8			411			(27		)
(Income) loss allocated to noncontrolling interests in consolidated real estate partnerships	(1,768		)	1,725			(1,580		)	5,976
Net (losses) income of legacy asset management business attributable to Aimco and the Aimco Operating Partnership	$	(143	)	$	(90	)	$	(1,125	)	$	215

The results of operations for the consolidated apartment communities sold by the owner of this portfolio through December 31, 2013, are presented within income from discontinued operations in our consolidated statement of operations for the three and nine months ended September 30, 2013, and are excluded from the summary above. Revenues increased during the three and nine months ended September 30, 2014, as compared to the three and nine months ended September 30, 2013, due to an adjustment to increase subsidized rents to reflect current market rates for one of the apartment communities in this portfolio.

Based on our limited economic ownership in this portfolio, most of the assets and liabilities are allocated to noncontrolling interests and do not significantly affect our consolidated equity and partners’ capital. Additionally, the operating results of this portfolio generally have an insignificant effect on the amounts of income or loss attributable to us. 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.

Equity and Partners’ Capital Transactions

During the nine months ended September 30, 2014, Aimco issued 5,000,000 shares of 6.875% Class A Cumulative Preferred Stock, par value $0.01 per share, in an underwritten public offering, for net proceeds per share of $24.15 (reflecting a public offering price of $25.00 per share, less an underwriting discount and transaction costs of approximately $0.85 per share). The offering generated net proceeds of $120.8 million.

During the nine months ended September 30, 2014, Aimco also issued 117,400 shares of its 7.00% Class Z Cumulative Preferred Stock, par value $0.01 per share, through an at-the-market, or ATM, offering program for net proceeds per share of $25.14 (reflecting an average price to the public of $25.65 per share, less an underwriting discount and transaction costs of approximately $0.51 per share). The ATM offerings generated net proceeds of $3.0 million.

In connection with Aimco's preferred stock issuances, Aimco contributed the net proceeds to the Aimco Operating Partnership in exchange for an equal number of the corresponding class of partnership preferred units.