Partners' Capital

12 Months Ended

Dec. 31, 2023

Partners’ Capital

Partnership Preferred Units Owned by AIR

At December 31, 2023 and 2022, the AIR Operating Partnership had Class A outstanding preferred units similar to AIR’s Preferred Stock discussed in Note 8. All Class A Partnership Preferred Units are senior to the AIR Operating Partnership common partnership units. Distributions on all Partnership Preferred Units are subject to being declared by the General Partner. The Partnership Preferred Units are redeemable by the AIR Operating Partnership only in connection with a concurrent redemption by AIR of the corresponding AIR Preferred Stock held by unrelated parties.

Redeemable Preferred OP Units

The AIR Operating Partnership has outstanding various classes of redeemable preferred OP Units. As of December 31, 2023 and 2022, the AIR Operating Partnership had the following classes of preferred OP Units (stated at their redemption values, in thousands, except unit and per unit data):


	Distributions per Annum				Units Issued and Outstanding		Redemption Values
Class of Preferred Units	Percent		Per Unit		2023	2022	2023		2022
Class One	8.75	%	$	8.00	90,000	90,000	$	8,229	$	8,229
Class Two	1.92	%	$	0.48	5,368	5,418	132		135
Class Three	7.88	%	$	1.97	1,310,902	1,310,902	32,772		32,772
Class Four	8.00	%	$	2.00	644,954	644,954	16,124		16,124
Class Six	8.50	%	$	2.13	769,585	769,585	19,240		19,240
Class Seven	7.87	%	$	1.97	25,715	25,715	643		643
Total					2,846,524	2,846,574	$	77,140	$	77,143

Each class of preferred OP Units is currently redeemable at the holders’ option. The AIR Operating Partnership, at its sole discretion, may settle such redemption requests in cash or cause AIR to issue shares of its Common Stock with a value equal to the redemption price. In the event the AIR Operating Partnership requires AIR to issue shares of Common Stock to settle a redemption request, the AIR Operating Partnership would issue to AIR a corresponding number of common OP Units. The AIR Operating Partnership has a redemption policy that requires cash settlement of redemption requests for the preferred OP Units, subject to limited exceptions. Subject to certain conditions, the Class Four and Class Six preferred OP Units may be converted into common OP Units.

These redeemable preferred units are classified within temporary equity in AIR’s consolidated balance sheets and within temporary capital in the AIR Operating Partnership’s consolidated balance sheets.

During the years ended December 31, 2023, 2022, and 2021, approximately 50, 89,000, and 3,000 preferred OP Units, respectively, were redeemed in exchange for cash, and no preferred OP Units were redeemed in exchange for shares of AIR Common Stock or common OP Units.

The following table presents a rollforward of the AIR Operating Partnership’s preferred OP Units’ redemption value (in thousands):


Balance at January 1, 2023	$	77,143
Preferred distributions	(6,280)
Redemption of preferred units and other	(3)
Net income allocated to preferred units	6,280
Balance at December 31, 2023	$	77,140

AIR Operating Partnership Partners’ Capital

Common Partnership Units

The common partnership units held by AIR are classified within Partners’ Capital as General Partner and Special Limited Partner capital and the common OP Units are classified within Limited Partners’ capital in the AIR Operating Partnership’s consolidated balance sheets. The common OP Units are classified within permanent equity as common noncontrolling interests in the AIR Operating Partnership in AIR’s consolidated balance sheets.

Common partnership units held by AIR are not redeemable whereas common OP Units are redeemable at the holders’ option, subject to certain restrictions, on the basis of one common OP Unit for either one share of Common Stock or cash equal to the fair value of a share of Common Stock at the time of redemption, in AIR Operating Partnership's sole discretion. AIR has the option to deliver shares of Common Stock in exchange for all or any portion of the common OP Units tendered for redemption. When a limited partner redeems a common OP Unit for Common Stock, Limited Partners’ capital is reduced and the General Partner and Special Limited Partners’ capital is increased.

During the years ended December 31, 2023, 2022, and 2021, approximately 528,000, 251,000 and 356,000 common OP Units, respectively, were redeemed in exchange for cash. During the year ended December 31, 2023 no common OP Units were redeemed for shares of Common Stock. During the years ended December 31, 2022 and 2021, approximately 3,000 and 171,000 common OP Units, respectively, were redeemed in exchange for shares of Common Stock.

The holders of the common OP Units receive distributions, prorated from the date of issuance, in an amount equivalent to the dividends paid to holders of Common Stock. During the years ended December 31, 2023, 2022, and 2021, the AIR Operating Partnership declared regular, recurring distributions per common unit of $1.80, $1.80, and $1.74, respectively.