Variable Interest Entities

Aimco consolidates the Aimco Operating Partnership, which is a variable interest entity, or VIE, for which Aimco is the primary beneficiary. Aimco, through the Aimco Operating Partnership, consolidates all VIEs for which we are the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.

All of the VIEs we consolidate own interests in one or more apartment communities. VIEs that own apartment communities we classify as part of our Real Estate segment are typically structured to generate a return for their partners through the operation and ultimate sale of the communities. We are the primary beneficiary in the limited partnerships in which we are the sole decision maker and have a substantial economic interest.

All of the partnerships served by our Asset Management business own interests in low-income housing tax credit apartment communities that are structured to provide for the pass-through of tax credits and tax deductions to their partners and are VIEs. We hold a nominal ownership position in these partnerships, generally one percent or less. As general partner in these partnerships, we are the sole decision maker and we receive fees and other payments in return for the asset management and other services we provide and thus share in the economics of the partnerships, and as such, we are the primary beneficiary of these partnerships. The table below summarizes information regarding VIEs consolidated by the Aimco Operating Partnership:



	March 31, 2017	December 31, 2016
Real Estate portfolio:
VIEs with interests in apartment communities	13	13
Apartment communities held by VIEs	19	19
Apartment homes in communities held by VIEs	6,110	6,110
Consolidated partnerships served by the Asset Management business:
VIEs with interests in apartment communities	54	54
Apartment communities held by VIEs	38	38
Apartment homes in communities held by VIEs	6,093	6,093

Assets of the Aimco Operating Partnership’s consolidated VIEs must first be used to settle the liabilities of such consolidated VIEs. These consolidated VIEs’ creditors do not have recourse to the general credit of the Aimco Operating Partnership. Assets and liabilities of consolidated VIEs are summarized in the table below (in thousands):



	March 31, 2017		December 31, 2016
Real Estate portfolio:
Assets
Net real estate	$	898,849	$	897,510
Cash and cash equivalents	17,977		15,877
Restricted cash	10,356		7,981
Liabilities
Non-recourse property debt secured by Real Estate communities, net	722,036		725,061
Accrued liabilities and other	15,824		14,270
Consolidated partnerships served by the Asset Management business:
Assets
Real estate, net	225,994		235,920
Cash and cash equivalents	17,564		14,926
Restricted cash	28,869		32,542
Liabilities
Non-recourse property debt	223,998		229,509
Accrued liabilities and other	15,139		16,934