<PAGE>
As filed with the Securities and Exchange Commission on December 6, 1996
Registration No. _______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND 84-1259577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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1873 SOUTH BELLAIRE STREET, 17TH FLOOR TERRY CONSIDINE
DENVER, COLORADO 80222 CHAIRMAN OF THE BOARD OF DIRECTORS
(303) 757-81011873 SOUTH BELLAIRE STREET, 17TH FLOOR
(Address, including zip code, and DENVER, COLORADO 80222
telephone number, including area code, of (303) 757-8101
registrant's principal executive offices) (Name, address, including zip code,
and telephone number, including area
code, of agent for service)
COPY TO:
ROD A. GUERRA, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum Amount of
Title of Shares Amount to be Aggregate Price per Aggregate Offering Registration
to be Registered Registered Unit (1) Price (1) Fee
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<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 per share 1,010,598 $24.875 $25,138,625 $7,618
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</TABLE>
(1) Calculated pursuant to Rule 457(c) of the rules and regulations under the
Securities Act of 1933, based on the average of the high and low prices on
December 4, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
PROSPECTUS
1,010,598 Shares
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS A COMMON STOCK
This Prospectus relates to the offer and sale from time to time by certain
selling stockholders (the "Selling Stockholders") of up to 1,010,598 shares of
Class A Common Stock, par value $.01 per share (the "Class A Common Stock" or
the "Securities"), of Apartment Investment and Management Company, a Maryland
corporation ("AIMCO"), as described herein under "Selling Stockholders." AIMCO
will not receive any proceeds from the sale of such shares of Class A Common
Stock.
The Class A Common Stock is listed and traded on the New York Stock
Exchange (the "NYSE") under the symbol "AIV". On December 5, 1996, the last
reported sale price of the Class A Common Stock on the NYSE was $24.875 per
share.
The Selling Stockholders may sell the Class A Common Stock offered hereby
from time to time on the NYSE or such other national securities exchange or
automated interdealer quotation system on which shares of Class A Common Stock
are then listed, through negotiated transactions or otherwise at market prices
prevailing at the time of the sale or at negotiated prices. See "Plan of
Distribution."
_______
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS
RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
_______
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_______
The date of this Prospectus is December 6, 1996
<PAGE>
AVAILABLE INFORMATION
AIMCO is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 7
World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center,
Room 3190, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained at prescribed rates from the Public Reference Room of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material
can also be inspected at the New York Stock Exchange, 20 Broad Street, New York,
New York 10005. The Commission also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
AIMCO has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto. Such additional information is available for inspection
and copying at the offices of the Commission. Statements contained in this
Prospectus, in any Prospectus Supplement or in any document incorporated by
reference herein or therein as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated by reference in, the Registration Statement, each
such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by AIMCO with the Commission
pursuant to the Exchange Act (File No. 1-13232), are incorporated herein by
reference:
(i) Annual Report on Form 10-K for the year ended December 31, 1995;
(ii) Quarterly Reports on Form 10-Q for each of the quarterly periods ended
March 31, 1996, June 30, 1996 and September 30, 1996;
(iii) Current Reports on Form 8-K dated December 29, 1995 (and
Amendment No. 1 thereto), January 1, 1996 and November 21, 1996; and
(iv) the description of the Class A Common Stock which is contained in a
Registration Statement on Form 8-A filed July 19, 1994, including any amendment
or reports filed for the purpose of updating such description.
All documents filed by AIMCO pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the
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offering of the Securities shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document that is or is deemed to be incorporated by reference herein modifies or
supersedes such previous statement. Any statement so modified or superseded
shall not be deemed to constitute a part of this Prospectus, except as so
modified or superseded.
Copies of all documents which are incorporated herein by reference (other
than the exhibits to such documents, unless such exhibits are specifically
incorporated by reference herein), will be provided without charge to any person
to whom this Prospectus has been delivered, upon request. Requests for such
copies should be directed to Apartment Investment and Management Company, 1873
South Bellaire Street, 17th Floor, Denver, Colorado 80222, Attention: Corporate
Secretary, telephone number (303) 757-8101.
_______
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
any Prospectus Supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by AIMCO or any
underwriter or agent. This Prospectus and any Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction where, or to any person to whom,
it is unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus or any Prospectus Supplement nor any sale made hereunder or
thereunder shall, under any circumstances, create any implication that the
information herein or therein is correct as of any time subsequent to their
respective dates.
TABLE OF CONTENTS
Page
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . . . . . 2
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Certain Federal Income Tax Considerations. . . . . . . . . . . . . . . . . . .15
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
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THE COMPANY
Apartment Investment and Management Company, a Maryland corporation
("AIMCO" and, together with its subsidiaries and other controlled entities, the
"Company"), is a self-administered and self-managed real estate investment trust
(a "REIT") engaged in the ownership, acquisition, development, expansion and
management of multifamily apartment properties. AIMCO Properties, L.P., a
Delaware limited partnership (the "Operating Partnership"), and its subsidiaries
conduct substantially all of the operations of AIMCO. As of December 5, 1996,
AIMCO held approximately an 80% interest in the Operating Partnership. Through
its controlling interests in the Operating Partnership and other limited
partnerships and limited liability companies (collectively, the "Subsidiary
Partnerships"), the Company owns or controls multifamily apartment properties
(the "Owned Properties") and manages other multifamily apartment properties (the
"Managed Properties").
As of December 5, 1996, the Company had 91 Owned Properties containing
22,850 units and 156 Managed Properties, including 2,815 apartment units managed
for affiliates and 19,599 apartment units managed for over 100 third parties.
The Company's third-party property and asset management business is principally
conducted by Property Asset Management Services, L.P., a Delaware limited
partnership ("PAMS LP"). The Operating Partnership owns a 1% interest in, and is
the general partner of, PAMS LP. The sole limited partner of PAMS LP is Property
Asset Management Services, Inc., a Delaware corporation ("PAMS Inc." and,
together with PAMS LP, the "Management Subsidiaries"), which owns a 99% interest
in PAMS LP. AIMCO's headquarters are located at 1873 South Bellaire Street, 17th
Floor, Denver, Colorado 80222, and its telephone number is (303) 757-8101.
RISK FACTORS
An investment in shares of Class A Common Stock involves various risks. In
addition to general investment risks and those factors set forth elsewhere in
this Prospectus, potential investors should consider, among other things, the
following factors.
FINANCING RISKS
DEBT FINANCING AND EXISTING DEBT MATURITIES. The Company is subject to the
risks normally associated with debt financing, including the risk that its cash
flow from operations will be insufficient to make required payments of principal
and interest, the risk that existing indebtedness, including secured
indebtedness, will not be able to be refinanced or that the terms of any
refinancing will not be as favorable as the terms of existing indebtedness. The
Company has significant outstanding indebtedness, substantially all of which is
secured by Owned Properties and other assets of the Company, including
borrowings outstanding from time to time under the Company's credit facility
with Bank of America National Trust and Savings Association (the "Credit
Facility"). If the Company does not have sufficient funds to repay its
indebtedness at maturity, it may be necessary to refinance such indebtedness
through additional debt financing, private or public offerings of debt
securities or additional equity offerings. If, at the time of refinancing,
prevailing interest rates or other factors result in higher interest rates on
refinancings, increases in interest expense could adversely affect cash flow.
If the Company is unable to refinance its indebtedness on acceptable terms, it
might be forced to dispose of properties on disadvantageous terms, potentially
resulting in losses and adverse effects on cash flow from operating activities.
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In addition, if the Company is unable to make required payments of principal and
interest on indebtedness secured by Owned Properties, such properties could be
foreclosed upon by the lender with a consequent loss of income and asset value
to the Company.
RISK OF RISING INTEREST RATES. Certain of the Company's borrowings,
including borrowings under its Credit Facility, bear interest at a variable
rate. Increases in interest rates could increase the Company's interest expense
and adversely affect cash flow.
POSSIBLE CONFLICT OF INTERESTS; TRANSACTIONS WITH AFFILIATES
Prior to February 1996, in order to accommodate the qualification of AIMCO
as a REIT, four of AIMCO's executive officers, Terry Considine, Peter Kompaniez,
Steven Ira and Robert Lacy, collectively, held a 5% beneficial interest in each
of four regional business trusts (the "Service Trusts"). The Service Trusts
owned four corresponding regional limited liability companies (the "Service
LLCs") through which the Company's third-party property and asset management
business was then principally conducted. In February 1996, the Operating
Partnership and Messrs. Considine, Kompaniez, Ira and Lacy contributed their
respective interests in the Service Trusts to PAMS Inc. in exchange for 950,000
shares of non-voting preferred stock of PAMS Inc., in the case of the Operating
Partnership, and 50,000 shares of common stock of PAMS Inc., in the case of
Messrs. Considine, Kompaniez, Ira and Lacy. In April 1996, the Service Trusts
were dissolved and their interests in the Service LLCs were distributed to PAMS
Inc. In May 1996, the four Service LLCs were merged into PAMS LP, with PAMS LP
as the surviving entity. Consequently, the Company's property management and
asset management business is now conducted principally through PAMS Inc. and
PAMS LP. The four officers' aggregate share of income in the four Service Trusts
was a loss of less than $5,000 for the period from AIMCO's initial public
offering on July 29, 1994 (the "Initial Offering") to December 31, 1994 and such
income did not exceed $2,000 for the 1995 fiscal year. However, because Messrs.
Considine and Kompaniez are officers and directors of AIMCO, and because Messrs.
Ira and Lacy are officers of AIMCO, conflicts of interest may arise for such
persons in transactions involving PAMS Inc. or PAMS LP. For example, in
connection with the Company's September 1995 restructuring of ownership
interests in certain of its subsidiaries (including the Service Trusts and the
Service LLCs), Messrs. Considine, Kompaniez, Ira and Lacy made additional
contributions to the Service Trusts to maintain their 5% aggregate interests in
the Service Trusts. Although the Company believes such additional contributions
were made on terms that were fair to the Company and the Service Trusts, the
Company did not obtain independent valuations of the Service Trusts and there
can be no assurance that the contributions to the Service Trusts by Messrs.
Considine, Kompaniez, Ira and Lacy were made in amounts which reflected the
market value of their interests.
In addition, PAMS LP provides property management services with respect to
certain Managed Properties in which Messrs. Considine and Ira and other officers
of AIMCO have separate ownership interests. The fees for these services have
been negotiated on an individual basis and typically range from 3% to 6% of
gross receipts for the particular property. Although these arrangements were not
negotiated on an arm's-length basis, the Company believes, based on comparisons
to the fees charged by other real estate companies and by PAMS LP with respect
to unaffiliated Managed Properties in comparable locations, that the terms of
such arrangements are fair to the Company.
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REAL ESTATE RISKS
GENERAL. Real property investments are subject to varying degrees of
risk. The yields available from equity investments in real estate depend on the
amount of income generated and expenses incurred. The Company's income from its
Owned Properties may be adversely affected by the general economic climate,
local conditions such as oversupply of apartments or a reduction in demand for
apartments in the area, the attractiveness of the properties to tenants,
competition from other available apartments, the ability of the Company to
provide adequate maintenance and insurance, and increases in operating costs
(including real estate taxes). The Company's income from its Owned Properties
would also be adversely affected if a significant number of tenants were unable
to pay rent or apartments could not be rented on favorable terms. Certain
significant expenditures associated with real property investments (such as
mortgage payments, real estate taxes and maintenance costs) generally are not
reduced when circumstances cause a reduction in income from the investments. In
addition, income from properties and real estate values are also affected by
such factors as applicable laws, including tax laws, interest rate levels and
the availability of financing. If the Company's Owned Properties do not generate
income sufficient to meet operating expenses, including debt service and capital
expenditures, the Company's income and its ability to make distributions to
holders of Class A Common Stock will be adversely affected. Many of the factors
that could adversely affect the Company's income from its Owned Properties could
also adversely affect the Company's income from its Managed Properties by
reducing gross receipts for such properties.
ILLIQUIDITY OF REAL ESTATE. Real estate investments may be illiquid and,
therefore, could tend to limit the ability of the Company to vary its portfolio
promptly in response to changes in economic or other conditions. In addition,
the Internal Revenue Code of 1986, as amended (the "Code"), limits the ability
of AIMCO, as a REIT, to sell properties held for fewer than four years.
OPERATING RISKS. The Company's Owned Properties and Managed Properties
are subject to operating risks common to multifamily apartment properties in
general. These risks may adversely affect the Company's cash flow from
operations. For example, increases in unemployment in the areas in which Owned
Properties or Managed Properties are located may adversely affect multifamily
apartment occupancy or rental rates and it may not be possible to offset
increases in operating costs due to inflation and other factors by increased
rents. Local rental market characteristics may also limit the extent to which
rents may be increased without decreasing occupancy rates.
COMPETITION. There are numerous housing alternatives that compete with
the Company's Owned Properties and Managed Properties in attracting residents.
The Company's properties compete directly with other multifamily rental
apartments and single family homes that are available for rent in the markets in
which the Company's properties are located. The Company's properties also
compete for residents with new and existing homes and condominiums. The number
of competitive properties in a particular area could have a material effect on
the Company's ability to lease apartment units at its properties and on the
rents charged. Numerous real estate companies compete with the Company in
acquiring, developing and managing multifamily apartment properties and seeking
tenants to occupy their properties. In addition, numerous property management
companies compete with the Company in the markets where the Managed Properties
are located.
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CHANGE IN LAWS. Changes in laws increasing the potential liability for
environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions, as well as changes in laws affecting
development, construction and safety requirements, may result in significant
unanticipated expenditures, which would adversely affect the Company's cash flow
from operating activities. In addition, future enactment of rent control or rent
stabilization laws or other laws regulating multifamily housing may reduce
rental revenue or increase operating costs in particular markets.
RESTRICTIONS IMPOSED BY LAWS BENEFITING DISABLED PERSONS. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all places of public
accommodation are required to meet certain Federal requirements related to
access and use by disabled persons. These requirements became effective in 1992.
A number of additional Federal, state and local laws exist which also may
require modifications to the Owned Properties, or restrict certain further
renovations thereof, with respect to access thereto by disabled persons. For
example, the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment
properties first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with the ADA or the FHAA could result in the
imposition of fines or an award of damages to private litigants and also could
result in an order to correct any non-complying feature, which could result in
substantial capital expenditures. Although management of the Company believes
that the Owned Properties are substantially in compliance with present
requirements, if the Owned Properties are not in compliance, the Company is
likely to incur additional costs to comply with the ADA and FHAA.
ACQUISITION AND DEVELOPMENT RISKS
The Company has engaged in, and intends to continue to engage in, selective
acquisition, development and expansion of multifamily apartment properties. In
addition to general investment risks associated with any new real estate
investment, acquisitions entail risks that such investments will fail to perform
in accordance with expectations, including projected occupancy and rental rates,
and that the costs of improvements for that property will exceed previous
expectations. Risks associated with the Company's past and future acquisitions
of general partnership interests include the risks that the general partner will
be liable for breaches of fiduciary duty to the limited partners of such
partnership and that the assets of the general partner may be subject to claims
by creditors of the partnership if the partnership becomes insolvent. Risks
associated with redevelopment and expansion of properties include the risks that
development opportunities may be abandoned; that construction costs of a
property may exceed original estimates, possibly making the property
uneconomical; that occupancy rates and rents at a newly completed property may
not be sufficient to make the property profitable; that construction and
permanent financing may not be available on favorable terms; and that
construction and lease-up may not be completed on schedule, resulting in
increased debt service expense and construction costs. Development activities
are also subject to risks relating to any inability to obtain, or delays in
obtaining, necessary zoning, land-use, building, occupancy, and other
governmental permits and authorizations.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
Qualification as a REIT involves the application of highly technical and
complex provisions of the Code, for which there are only limited judicial or
administrative interpretations, and the determination of various factual matters
and circumstances not entirely within AIMCO's
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control. For example, in order to qualify as a REIT, at least 95% of AIMCO's
gross income in any year must be derived from qualifying sources and AIMCO must
make distributions to stockholders aggregating annually at least 95% of its REIT
taxable income (excluding net capital gains). Although AIMCO believes that it
has operated since the Initial Offering in a manner so as to qualify as a REIT,
no assurance can be given that AIMCO is or will remain so qualified. See
"Certain Federal Income Tax Considerations." Although AIMCO is not aware of any
pending tax legislation that would adversely affect AIMCO's ability to operate
as a REIT, no assurance can be given that new legislation, regulations,
administrative interpretations or court decisions will not change the tax laws
with respect to qualification as a REIT or the Federal income tax consequences
of such qualification.
AIMCO has received an opinion of Skadden, Arps, Slate, Meagher and Flom
LLP, tax counsel to AIMCO, concerning the qualification of AIMCO as a REIT. In
rendering this opinion, Skadden, Arps, Slate, Meagher & Flom LLP relied on
certain assumptions and representations by AIMCO (including the value of the
Management Subsidiaries and of the Operating Partnership's ownership interests
therein and other items regarding AIMCO's ability to meet the various
requirements for qualification as a REIT) and on opinions of local counsel with
respect to matters of local law. The opinion is expressed based upon facts,
representations and assumptions as of its date and Skadden, Arps, Slate,
Meagher & Flom LLP has no obligation to advise holders of Class A Common Stock
of any subsequent change in the matters stated, represented or assumed or any
subsequent change in applicable law. No assurance can be given that AIMCO will
meet these requirements in the future, and a legal opinion is not binding on the
Internal Revenue Service (the "IRS").
If in any taxable year AIMCO fails to qualify as a REIT, AIMCO would not be
allowed a deduction for dividends to stockholders in computing taxable income
and would be subject to Federal income tax on its taxable income at corporate
rates. As a result of the additional tax liability, AIMCO might need to borrow
funds or liquidate certain investments in order to pay the applicable tax and
AIMCO would not be compelled to make distributions under the Code. Unless
entitled to relief under certain statutory provisions, AIMCO would also be
disqualified from treatment as a REIT for the four taxable years following the
year during which qualification is lost. Although AIMCO currently intends to
operate in a manner designed to qualify as a REIT, it is possible that future
economic, market, legal, tax or other considerations may cause AIMCO to fail to
qualify as a REIT or may cause the Board of Directors of AIMCO to revoke the
REIT election. See "Certain Federal Income Tax Considerations."
AIMCO has also received an opinion of Skadden, Arps, Slate, Meagher & Flom
LLP stating that the Subsidiary Partnerships in which AIMCO has ownership
interests are properly treated as partnerships for Federal income tax purposes.
The opinion is expressed based upon facts, representations and assumptions as of
its date and, with respect to certain matters of local law, relies on opinions
of local counsel. Skadden, Arps, Slate, Meagher & Flom LLP is under no
obligation to advise holders of Class A Common Stock of any subsequent change in
the matters stated, represented or assumed or any subsequent change in
applicable law. If the IRS were to challenge successfully the tax status of any
of the Subsidiary Partnerships as partnerships for Federal income tax purposes,
such Subsidiary Partnerships would be treated as associations taxable as
corporations. As a consequence, the character of AIMCO's assets and items of
gross income would change and thereby preclude AIMCO from qualifying as a REIT.
In addition, the imposition of a corporate tax on the Subsidiary Partnerships
would reduce the amounts that the
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Subsidiary Partnerships could distribute to the Operating Partnership and AIMCO,
and that AIMCO could then distribute to the holders of Class A Common Stock.
See "Certain Federal Income Tax Considerations."
In addition, certain requirements for REIT qualification may in the future
limit AIMCO's ability to conduct or increase the property management and asset
management operations of the Management Subsidiaries without jeopardizing
AIMCO's qualification as a REIT. See "Certain Federal Income Tax
Considerations."
OWNERSHIP LIMIT
In order for AIMCO to maintain its qualification as a REIT, not more than
50% of the value of its outstanding stock may be owned, directly or
constructively, by five or fewer individuals or entities (as set forth in the
Code). AIMCO's Articles of Incorporation prohibit direct or constructive
ownership of shares of Class A Common Stock representing more than 8.7% (or 15%
in the case of certain pension trusts, registered investment companies and
Mr. Considine) of the combined total of outstanding shares of AIMCO's Class A
Common Stock and Class B Common Stock by any person (the "Ownership Limit"). The
constructive ownership rules are complex and may cause shares of AIMCO's Class A
Common Stock or Class B Common Stock owned directly or constructively by a group
of related individuals or entities to be constructively owned by one individual
or entity. AIMCO's Board of Directors may permit ownership of up to 9.8% of the
combined total of outstanding shares of AIMCO's Class A Common Stock and Class B
Common Stock by a particular stockholder if it is satisfied, based upon the
advice of tax counsel or other evidence or undertaking acceptable to it, that
ownership in excess of the limit will not jeopardize AIMCO's status as a REIT. A
transfer of shares to a person who, as a result of the transfer, violates the
Ownership Limit may be void under some circumstances or may be transferred to a
trust, for the benefit of one or more qualified charitable organizations
designated by AIMCO, with the intended transferee having only a right to share
(to the extent of the transferee's original purchase price for such shares) in
proceeds from the trust's sale of such shares.
RISKS OF THIRD-PARTY MANAGEMENT BUSINESS AND OWNERSHIP STRUCTURE
Risks associated with the management of properties owned by third parties
include risks that management contracts (which are generally cancelable upon 30
days' notice or upon certain events, including the sale of the property) will be
terminated by the property owner or will be lost in connection with a sale of
the property; that contracts may not be renewed upon expiration or may not be
renewed on terms consistent with current terms; and that the rental revenues
upon which management fees are based will decline as a result of general real
estate market conditions or other factors and result in decreases in the
Company's management fees. If significant numbers of contracts are terminated
or are not renewed, the Company's net income from fee management operations
could be adversely affected. The owner of substantially all of the commercial
properties that are managed by the Company has indicated that it intends to
dispose of such properties over a period of time. Upon any such disposition, it
is not likely that the Company would continue to manage these properties. The
loss of management fee revenues from such properties would adversely affect the
Company's income from its third-party property management business.
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PAMS Inc. and the Operating Partnership own 99% and 1%, respectively, of
PAMS LP, through which the Company's property management business is principally
conducted. PAMS Inc. also owns 100% of PAM Consolidated Assurance Company,
Ltd., a Bermuda insurance company ("PCA"). The Operating Partnership is the
general partner of PAMS LP and is therefore responsible for the management of
PAMS LP. However, all of the voting stock of PAMS Inc. is owned by
Messrs. Considine, Kompaniez, Ira and Lacy. Consequently, the Company does not
have the ability to elect any directors of PAMS Inc. (or the board of directors
or officers of PCA) or to influence the day-to-day decisions and other actions
of PAMS Inc. or PCA, and Messrs. Considine, Kompaniez, Ira and Lacy could cause
PAMS Inc. or PCA to take actions that are adverse to the Company's interests.
See "Risk Factors--Possible Conflict of Interests; Transactions with Affiliates"
and "Certain Federal Income Tax Considerations."
DEPENDENCE ON CERTAIN EXECUTIVE OFFICERS
Although each of Messrs. Considine, Kompaniez, Ira and Lacy has entered
into employment agreements with the Company, the loss of any of their services
could have an adverse effect on the operations of the Company. In addition,
although Messrs. Considine, Kompaniez, Ira and Lacy have had substantial
multifamily real estate experience over the past 20 years, during the real
estate recession of the late 1980's and early 1990's, a number of real estate
investments in which they were involved produced unfavorable results. From 1975
through July 1994, partnerships or other entities in which Mr. Considine had
controlling interests invested in approximately 35 multifamily apartment
properties and commercial real estate properties and six of these real estate
assets (four of which were multifamily apartment properties and two of which
were office properties) did not generate sufficient cash flow to service their
related indebtedness and were foreclosed upon by their lenders, causing pre-tax
losses of approximately $11.9 million to investors and losses of approximately
$2.7 million to Mr. Considine. In addition, in the late 1980s and early 1990s,
three multifamily apartment properties located in Colorado that were owned by
partnerships in which Mr. Ira had a general partnership interest could not meet
their debt payments, and were foreclosed upon by their respective lenders,
causing a pre-tax loss of approximately $3.2 million to investors. Mr. Ira was
not the managing general partner of two of these partnerships.
The downturn in the real estate markets in the late 1980s and early 1990s
also adversely affected the United States real estate operations of Heron
International N.V. and its subsidiaries and affiliates (the "Heron Group").
During this period from 1986 to 1993, Mr. Kompaniez served as President and
Chief Executive Officer of Heron Financial Corporation ("HFC"), and as a
director or officer of certain other Heron Group entities. In 1993, HFC, its
parent Heron International and certain other members of the Heron Group
voluntarily entered into restructuring agreements with separate groups of their
United States and international creditors. The restructuring agreement for the
United States members of the Heron Group generally provided for the joint
assumption of certain liabilities and the pledge of unencumbered assets in
support of such liabilities for the benefit of their United States creditors. As
a result of the restructuring, the operations and assets of the United States
members of the Heron Group were generally separated from those of Heron
International and its non-United States subsidiaries. At the conclusion of the
restructuring, Mr. Kompaniez commenced the operations of PDI Realty Enterprises,
Inc., a Delaware corporation ("PDI"), which was engaged to act as asset and
corporate manager of the continuing United States operations of HFC and the
other United States Heron Group members for the benefit of the United States
creditors. In connection with certain
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transactions effected at the time of the Initial Offering, Mr. Kompaniez was
appointed Vice Chairman of AIMCO and substantially all of the property
management assets of PDI were transferred or assigned to the Company.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under Federal, state and local environmental laws and regulations, a
current or previous owner or operator of real property may be required to
investigate and clean up a release of hazardous substances at such property, and
may, under such laws and common law, be held liable for property damage and
other costs incurred by third parties in connection with such releases. The
liability under certain of these laws has been interpreted to be joint and
several unless the harm is divisible or there is a reasonable basis for
allocation of responsibility. The failure to remediate the property properly may
also adversely affect the owner's ability to sell or rent the property or to
borrow using the property as collateral. In connection with its ownership,
operation and management of the Owned Properties and other real properties,
including the Managed Properties, the Company could be potentially liable for
such costs.
Certain Federal, state and local laws and regulations govern the removal,
encapsulation or disturbance of asbestos-containing materials ("ACMs") when
those materials are in poor condition or in the event of building remodeling,
renovation or demolition, impose certain worker protection and notification
requirements and govern emissions of and exposure to asbestos fibers in the air.
These laws may also impose liability for a release of ACMs and may enable third
parties to seek recovery from owners or operators of real properties for
personal injury associated with ACMs. In connection with its ownership,
operation and management of properties, the Company could be potentially liable
for those costs. There are ACMs at certain of the Owned Properties and there may
be ACMs at certain of the Managed Properties. The Company has developed and
implemented operations and maintenance programs that establish operating
procedures with respect to the ACMs at the Owned Properties.
Certain of the Owned Properties are, and some of the Managed Properties may
be, located on or near properties that have contained underground storage tanks
or on which activities have occurred which could have released hazardous
substances into the soil or groundwater. There can be no assurances that such
hazardous substances have not been released or have not migrated, or in the
future will not be released or will not migrate onto the Owned Properties and
Managed Properties. In addition, the Company's Montecito property in Austin,
Texas, is located adjacent to, and may be partially on, land that was used as a
landfill. Low levels of methane and other landfill gas have been detected at
Montecito. The remediation of the landfill gas is now substantially complete.
The environmental authorities have preliminarily approved the methane gas
remediation efforts. Final approval of the site and the remediation process is
contingent upon the results of continued methane gas monitors to confirm the
effectiveness of the remediation efforts. Should further actionable levels of
methane gas be detected, a proposed contingent plan of passive methane gas
venting may be implemented. The Company believes the costs of such further
limited action, if any, will not be material. Testing has also been conducted on
Montecito to determine whether, and to what extent, groundwater has been
impacted. Test reports have indicated that the groundwater is not contaminated
at actionable levels.
All of the Owned Properties were subject to Phase I or similar
environmental audits by independent environmental consultants. The audits did
not reveal, nor is the Company aware of,
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any environmental liability relating to such properties that the Company
believes would have material adverse effect on the Company's business, assets or
results of operations. Nevertheless, it is possible that the Company's audits
did not reveal all environmental liabilities or that there are material
environmental liabilities of which the Company is unaware. Although the Managed
Properties may not have been subject to Phase I or similar environmental audits
by independent environmental consultants, the Company is not aware of any
environmental liability relating to the Managed Properties that it believes
would have a material adverse effect on its business, assets or results of
operations.
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USE OF PROCEEDS
The Selling Stockholders (as defined below) will receive all of the net
proceeds from the sale of shares of Class A Common Stock offered hereby. The
Company will not receive any proceeds from the sale of such shares.
SELLING STOCKHOLDERS
This Prospectus relates to periodic offers and sales of up to 1,010,598
shares of Class A Common Stock by the selling stockholders named below and
pledgees, donees, transferees and other successors in interest (collectively,
the "Selling Stockholders"). The shares of Class A Common Stock that may be
offered and sold by the Selling Stockholders include shares that may be issued
in exchange for units ("OP Units") of limited partnership interest in the
Operating Partnership. The holders of OP Units have the right, subject to the
terms of the agreement of limited partnership of the Operating Partnership (the
"Limited Partnership Agreement"), to have some or all of their OP Units redeemed
by the Operating Partnership. AIMCO has the right, under the Limited
Partnership Agreement and subject to the Ownership Limit, to acquire such OP
Units in exchange for shares of Class A Common Stock at an exchange ratio of one
share of Class A Common Stock for each OP Unit (subject to certain specified
adjustments).
Pursuant to certain registration rights agreements, AIMCO is obligated to
register under the Securities Act shares of Class A Common Stock held by the
Selling Stockholders and shares of Class A Common Stock issuable in exchange for
OP Units held by the Selling Stockholders. As of the date of this Prospectus,
783,803 OP Units are held by the Selling Stockholders named below, all of which
OP Units may be acquired from time to time by AIMCO in exchange for 783,803
shares of Class A Common Stock (subject to adjustment).
The following table sets forth certain information with respect to the
Selling Stockholders and their beneficial ownership of shares of Class A Common
Stock (and OP Units) as of the date hereof. All of the shares of Class A Common
Stock owned by the Selling Stockholders (and all shares that they may receive in
exchange for OP Units), as set forth below, may be offered hereby. Except as
indicated below, none of the Selling Stockholders holds any position, office or
has had any other material relationship with the Company, or any of its
predecessors or affiliates, during the past three years. All of the shares
owned by the Selling Stockholders, as set forth below, may be offered hereby.
SHARES OWNED
SELLING STOCKHOLDER PRIOR TO OFFERING(1)
- --------------------- ---------------------
Terry Considine(2) 556,754
Betsy Considine(3) 157,698
Peachtree Park 94, L.P.(4) 86,977
Cairn Master Partnership(5) 62,843
Considine Investment Co.(6) 140,826
TEBET LLC(7) 5,500
-----------
TOTAL 1,010,598
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(1) Unless otherwise indicated, the number of shares owned prior to this
offering reflects the number of OP Units owned by the Selling Stockholder,
each of which may be acquired from time to time by AIMCO in exchange for
one share of Class A Common Stock (subject to adjustment) upon the tender
of such OP Unit for redemption by the Selling Stockholder.
(2) Terry Considine is the Chairman of the Board of Directors, President and
Chief Executive Officer of AIMCO. The number of shares shown as owned by
Terry Considine prior to this offering includes 436,397 shares of Class A
Common Stock issuable by the Company in exchange for an equal number of OP
Units; and 120,357 shares of Class A Common Stock. Colorado National Bank,
a national banking association ("CNB"), currently holds 422,092 of such OP
Units and 37,371 of such shares of Class A Common Stock as collateral
security for certain loans. Such shares and the shares issuable in
exchange for such OP Units may be sold hereunder by CNB in the event of a
default on such loans.
(3) Betsy Considine is the spouse of Terry Considine, Chairman of the Board,
President and Chief Executive Officer of AIMCO. CNB currently hold 101,282
of such OP Units as collateral security for certain loans. The shares
issuable in exchange for such OP Units may be sold hereunder by CNB in the
event of a default on such loans.
(4) The President of the general partner of Peachtree Park 94, L.P. is Terry
Considine, Chairman of the Board, President and Chief Executive Officer of
AIMCO.
(5) The number of shares shown as owned by Cairn Master Partnership, L.P. prior
to this offering includes 10,555 shares of Class A Common Stock issuable by
the Company in exchange for an equal number of OP Units; and 52,288 shares
of Class A Common Stock. The President of each of the general partners
of Cairn Master Partnership, L.P. is Terry Considine, Chairman of the
Board, President and Chief Executive Officer of AIMCO. CNB currently holds
all 10,555 of such OP Units as collateral security for certain loans. The
shares issuable in exchange for such OP Units may be sold hereunder by CNB
in the event of a default on such loans.
(6) The number of shares shown as owned by Considine Investment Co. prior to
this offering includes 86,676 shares of Class A Common Stock issuable by
the Company in exchange for an equal number of OP Units; and 54,150 shares
of Class A Common Stock. The President of Considine Investment Co. is
Terry Considine, Chairman of the Board, President and Chief Executive
Officer of AIMCO. CNB currently holds all 86,676 of such OP Units and all
54,150 of such shares of Class A Common Stock as collateral security for
certain loans. Such shares and the shares issuable in exchange for such OP
Units may be sold hereunder by CNB in the event of a default on such loans.
(7) The Managing Member of TEBET, LLC is Terry Considine, Chairman of the
Board, President and Chief Executive Officer of AIMCO. CNB currently holds
all 5,500 of such OP Units as collateral security for certain loans. The
shares issuable in exchange for such OP Units may be sold hereunder by CNB
in the event of a default on such loans.
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There are currently no agreements, arrangements or understandings
with respect to the sale of any of the shares of Class A Common Stock that may
be offered hereby, and the Selling Stockholders have no present intention of
selling such shares. However, because the Selling Stockholders may, in the
future, sell some or all of the shares of Class A Common Stock offered hereby,
no estimate can be given as to the number of shares of Class A Common Stock
that will be held by any Selling Stockholder upon termination of any offering
made hereby. If all of the shares offered hereby are sold, none of the Selling
Stockholders will own more than 1% of the outstanding shares of Class A Common
Stock.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time by the
Selling Stockholders of up to 1,010,598 shares of Class A Common Stock. The
Class A Common Stock may be sold from time to time by the Selling Stockholders.
Such sales may be made in underwritten offerings or in open market or block
transactions or otherwise on the NYSE, or such other national securities
exchange or automated interdealer quotation system on which shares of Class A
Common Stock are then listed, in the over-the-counter market, in private
transactions or otherwise at prices related to prevailing market prices at the
time of the sale or at negotiated prices. Some or all of the shares of Class A
Common Stock may be sold through brokers acting on behalf of the Selling
Stockholders or to dealers for resale by such dealers. In connection with such
sales, such brokers and dealers may receive compensation in the form of
discounts or commissions from the Selling Stockholders and may receive
commissions from the purchasers of such shares for whom they act as broker or
agent (which discounts and commissions are not anticipated to exceed those
customary in the types of transactions involved). If necessary, a supplemental
Prospectus will describe the method of sale in greater detail. In effecting
sales, brokers or dealers engaged by the Selling Stockholders and/or purchasers
of the Class A Common Stock may arrange for other brokers or dealers to
participate. In addition, any of the Class A Common Stock covered by this
Prospectus which qualifies for sale pursuant to Rule 144 under the Securities
Act may be sold under Rule 144 rather than pursuant to this Prospectus.
If shares of Class A Common Stock are sold in an underwritten offering,
the shares will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or prices, at prices related to
prevailing market prices at the time of the sale or at negotiated prices. Any
initial public offering price and any discounts or commissions allowed or
reallowed or paid to dealers may be changed from time to time. Underwriters
may sell shares to or through brokers or dealers, and such brokers and dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and may receive commissions from the purchasers of such
shares for whom they act as broker or agent (which discounts, concessions and
commissions are not anticipated to exceed those customary in the types of
transactions involved).
The Selling Stockholders have agreed to pay all expenses in connection
with the registration and sale of the Class A Common Stock being offered
hereby, including discounts, concessions and commissions payable to brokers or
dealers, the fees and expenses of counsel or other advisors to the Selling
Stockholders, and other selling expenses.
The Selling Stockholders and any underwriter, broker or dealer who acts in
connection with the sale of the Class A Common Stock hereunder may be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any compensation received by
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them and any profit on any resale of the Class A Common Stock as principals may
be deemed to be underwriting discounts and commissions under the Securities Act.
In order to comply with the securities laws of certain jurisdictions, the
securities offered hereby will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities offered hereby may not be offered or sold unless
they have been registered or qualified for sale in such jurisdictions or an
exemption from registration or qualification is available and is complied with.
CNB currently holds 626,105 OP Units and 143,809 shares of Class A Common
Stock as collateral security for certain loans. Such shares and the shares
issuable in exchange for such OP Units may be sold hereunder by CNB in the
event of a default on such loans. Upon repayment of such loans, or under
certain other circumstances, such OP Units and shares of Class A Common Stock
may be released by CNB and may then be sold hereunder by the owner thereof or
by a subsequent pledgee, donee or transferee.
Pursuant to certain registration rights agreements between the Company and
the Selling Stockholders, the Company has agreed to indemnify the Selling
Stockholders, each of their respective officers and directors and any person who
controls such Selling Stockholders, against certain liabilities and expenses
arising out of or based upon the information set forth or incorporated by
reference in this Prospectus, and the Registration Statement of which this
Prospectus is a part, including liabilities under the Securities Act.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of material Federal income tax considerations
regarding an investment in Securities of the Company is based on current law, is
for general information only and is not tax advice. This discussion does not
purport to deal with all aspects of taxation that may be relevant to particular
investors in light of their personal investment or tax circumstances, or, except
to the extent discussed under the headings "Taxation of Tax-Exempt Stockholders"
and "Taxation of Non-U.S. Stockholders," to certain types of investors
(including insurance companies, tax-exempt organizations, financial institutions
or broker-dealers, foreign corporations and persons who are not citizens or
residents of the United States) that are subject to special treatment under the
Federal income tax laws.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP AND
SALE OF THE SECURITIES AND OF THE COMPANY'S ELECTION TO BE TAXED AS A REAL
ESTATE INVESTMENT TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, AND FOREIGN INCOME
AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION, AND
OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
TAXATION OF AIMCO
GENERAL. The REIT provisions of the Code are highly technical and complex.
The following sets forth the material aspects of the provisions of the Code that
govern the Federal income tax treatment of a REIT and its stockholders. This
summary is qualified in its entirety by
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the applicable Code provisions, rules and regulations promulgated thereunder,
and administrative and judicial interpretations thereof, all of which are
subject to change which may apply retroactively.
AIMCO has elected to be taxed as a REIT under the Code commencing with its
taxable year ending December 31, 1994, and AIMCO intends to continue to operate
in such a manner. In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
commencing with AIMCO's taxable year ending December 31, 1994, AIMCO was
organized in conformity with the requirements for qualification as a REIT, and
its proposed method of operation, and its actual method of operation since
formation, will enable it to meet the requirements for qualification and
taxation as a REIT under the Code. It must be emphasized that this opinion is
based and conditioned upon certain assumptions and representations made by AIMCO
as to factual matters (including representations of AIMCO concerning its
business and properties as set forth in this Prospectus). The opinion is
expressed as of its date, and Skadden, Arps, Slate, Meagher & Flom LLP has no
obligation to advise holders of Securities of any subsequent change in the
matters stated, represented or assumed or any subsequent change in the
applicable law. Moreover, such qualification and taxation as a REIT depends upon
AIMCO's ability to meet, through actual annual operating results, distribution
levels and diversity of stock ownership, the various qualification tests imposed
under the Code as discussed below, the results of which will not be reviewed by
Skadden, Arps, Slate, Meagher & Flom LLP. Accordingly, no assurance can be
given that the actual results of AIMCO's operation for any one taxable year will
satisfy such requirements. See "-- Failure to Qualify." An opinion of counsel is
not binding on the IRS, and no assurance can be given that the IRS will not
challenge AIMCO's eligibility for taxation as a REIT.
If AIMCO qualifies for taxation as a REIT, it generally will not be subject
to Federal corporate income tax on its net income that is currently distributed
to stockholders. This treatment substantially eliminates the "double taxation"
(at the corporate and stockholder levels) that generally results from investment
in a corporation. However, AIMCO will be subject to Federal income tax as
follows: First, AIMCO will be taxed at regular corporate rates on any
undistributed REIT taxable income, including undistributed net capital gains.
Second, under certain circumstances, AIMCO may be subject to the "alternative
minimum tax" on its items of tax preference. Third, if AIMCO has net income from
prohibited transactions (which are, in general, certain sales or other
dispositions of property held primarily for sale to customers in the ordinary
course of business other than foreclosure property), such income will be subject
to a 100% tax. Fourth, if AIMCO should fail to satisfy the 75% gross income test
or the 95% gross income test (as discussed below), but has nonetheless
maintained its qualification as a REIT because certain other requirements have
been met, it will be subject to a 100% tax on an amount equal to (a) the gross
income attributable to the greater of the amount by which AIMCO fails the 75% or
95% test multiplied by (b) a fraction intended to reflect AIMCO's profitability.
Fifth, if AIMCO should fail to distribute during each calendar year at least the
sum of (i) 85% of its REIT ordinary income for such year, (ii) 95% of its REIT
capital gain net income for such year, and (iii) any undistributed taxable
income from prior periods, AIMCO would be subjected to a 4% excise tax on the
excess of such required distribution over the amounts actually distributed. In
addition, AIMCO could also be subject to tax in certain situations and on
certain transactions not presently contemplated.
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REQUIREMENTS FOR QUALIFICATION. The Code defines a REIT as a corporation,
trust or association (1) that is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest; (3) which would be taxable as
a domestic corporation, but for the special Code provisions applicable to REITs;
(4) that is neither a financial institution nor an insurance company subject to
certain provisions of the Code; (5) the beneficial ownership of which is held by
100 or more persons; (6) in which, during the last half of each taxable year,
not more than 50% in value of the outstanding stock is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities); and (7) which meets certain other tests described below
(including with respect to the nature of its income and assets). The Code
provides that conditions (1) through (4) must be met during the entire taxable
year, and that condition (5) must be met during at least 335 days of a taxable
year of 12 months, or during a proportionate part of a taxable year of less than
12 months. AIMCO's Articles of Incorporation provide certain restrictions
regarding transfers of its shares, which provisions are intended to assist AIMCO
in continuing to satisfy the share ownership requirements described in
conditions (5) and (6) above.
To monitor AIMCO's compliance with the share ownership requirements, AIMCO
is required to maintain records regarding the actual ownership of its shares. To
do so, AIMCO must demand written statements each year from the record holders of
certain percentages of its stock in which the record holders are to disclose the
actual owners of the shares (I.E., the persons required to include in gross
income the REIT dividends). A list of those persons failing or refusing to
comply with this demand must be maintained as part of AIMCO's records. A
stockholder who fails or refuses to comply with the demand must submit a
statement with its tax return disclosing the actual ownership of the shares and
certain other information.
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. AIMCO satisfies this requirement.
OWNERSHIP OF PARTNERSHIP INTERESTS. In the case of a REIT that is a
partner in a partnership, regulations provide that the REIT is deemed to own its
proportionate share of the partnership's assets and to earn its proportionate
share of the partnership's income. In addition, the assets and gross income of
the partnership retain the same character in the hands of the REIT for purposes
of the gross income and asset tests applicable to REITs as described below.
Thus, AIMCO's proportionate share of the assets, liabilities and items of income
of the Subsidiary Partnerships will be treated as assets, liabilities and items
of income of AIMCO for purposes of applying the REIT requirements described
herein. A summary of certain rules governing the Federal income taxation of
partnerships and their partners is provided below in "Tax Aspects of AIMCO's
Investments in Partnerships."
INCOME TESTS. In order to maintain qualification as a REIT, AIMCO annually
must satisfy three gross income requirements. First, at least 75% of AIMCO's
gross income (excluding gross income from "prohibited transactions," i.e.,
certain sales of property held primarily for sale to customers in the ordinary
course of business) for each taxable year must be derived directly or indirectly
from investments relating to real property or mortgages on real property
(including "rents from real property" and, in certain circumstances, interest)
or from certain types of temporary investments. Second, at least 95% of AIMCO's
gross income (excluding gross income from prohibited transactions) for each
taxable year must be derived from such real property investments, and from other
dividends, interest and gain from the sale or disposition of stock or
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securities (or from any combination of the foregoing). Third, short-term gain
from the sale or other disposition of stock or securities, gain from certain
sales of property held primarily for sale, and gain on the sale or other
disposition of real property held for less than four years (apart from
involuntary conversions and sales of foreclosure property) must, in the
aggregate, represent less than 30% of AIMCO's gross income for each taxable
year.
Rents received by the AIMCO through the Subsidiary Partnerships will
qualify as "rents from real property" in satisfying the gross income
requirements described above, only if several conditions are met, including the
following. If rent attributable to personal property leased in connection with a
lease of real property is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to such personal property will not
qualify as "rents from real property." Moreover, for rents received to qualify
as "rents from real property," the REIT generally must not operate or manage the
property or furnish or render services to the tenants of such property, other
than through an "independent contractor" from which the REIT derives no revenue.
However, AIMCO (or its affiliates) are permitted to, and do directly perform
services that are "usually or customarily rendered" in connection with the
rental of space for occupancy only and are not otherwise considered rendered to
the occupant of the property.
The Management Subsidiaries will receive management fees and other income.
A portion of such fees and other income will accrue to AIMCO through the
Operating Partnership's general partnership interest in PAMS LP. Such fee and
other income generally will not qualify under the 95% gross income test. AIMCO
also expects to indirectly receive distributions from the Management
Subsidiaries through PAMS Inc. that will be classified as dividend income to the
extent of the earnings and profits of PAMS Inc. Such distributions will qualify
under the 95% gross income test but not under the 75% gross income test.
If AIMCO fails to satisfy one or both of the 75% or 95% gross income tests
(though not the 30% gross income test) for any taxable year, it may nevertheless
qualify as a REIT for such year if it is entitled to relief under certain
provisions of the Code. These relief provisions will be generally available if
AIMCO's failure to meet such tests was due to reasonable cause and not due to
willful neglect, AIMCO attaches a schedule of the sources of its income to its
return, and any incorrect information on the schedule was not due to fraud with
intent to evade tax. It is not possible, however, to state whether in all
circumstances AIMCO would be entitled to the benefit of these relief provisions.
If these relief provisions are inapplicable to a particular set of circumstances
involving AIMCO, AIMCO will not qualify as a REIT. As discussed above in "--
General," even where these relief provisions apply, a tax is imposed with
respect to the excess net income.
ASSET TESTS. AIMCO, at the close of each quarter of its taxable year, must
also satisfy three tests relating to the nature of its assets. First, at least
75% of the value of AIMCO's total assets must be represented by real estate
assets (including its allocable share of real estate assets held by the
Subsidiary Partnerships), stock or debt instruments held for not more than one
year purchased with the proceeds of a stock offering or long-term (at least five
years) debt offering of AIMCO, cash, cash items and U.S. government securities.
Second, not more than 25% of AIMCO's total assets may be represented by
securities other than those in the 75% asset class. Third, of the investments
included in the 25% asset class, the value of any one issuer's securities owned
by AIMCO may not exceed 5% of the value of AIMCO's total assets, and AIMCO may
not own more than 10% of any one issuer's outstanding voting securities.
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AIMCO indirectly owns interests in the Management Subsidiaries. As set
forth above, the ownership of more than 10% of the voting securities of any one
issuer by a REIT is prohibited by the asset tests. AIMCO believes that its
indirect ownership interest in PAMS Inc. qualifies under these rules. Skadden,
Arps, Slate, Meagher & Flom LLP, in rendering its opinion as to the
qualification of AIMCO as a REIT, has relied on representations of AIMCO as to
the value of the Operating Partnership's total assets and the value of the
Operating Partnership's interest in PAMS Inc. No independent appraisals have
been obtained to support AIMCO's conclusions as to the value of the Operating
Partnership's interest in PAMS Inc., and this value is subject to change in the
future. Accordingly, there can be no assurance that the IRS will not contend
that the Operating Partnership's ownership interest in PAMS Inc. disqualifies
AIMCO from treatment as a REIT.
AIMCO's indirect interests in the Operating Partnership and other
Subsidiary Partnerships are held through wholly owned corporate subsidiaries of
AIMCO organized and operated as "qualified REIT subsidiaries" within the meaning
of the Code. Qualified REIT subsidiaries are not treated as separate entities
from their parent REIT for Federal income tax purposes. Instead, all assets,
liabilities and items of income, deduction and credit of each qualified REIT
subsidiary are treated as assets, liabilities and items of AIMCO. Each qualified
REIT subsidiary therefore will not be subject to Federal corporate income
taxation, although it may be subject to state or local taxation. In addition,
AIMCO's ownership of the voting stock of each qualified REIT subsidiary does not
violate the general restriction against ownership of more than 10% of the voting
securities of any issuer.
ANNUAL DISTRIBUTION REQUIREMENTS. AIMCO, in order to qualify as a REIT, is
required to distribute dividends (other than capital gain dividends) to its
stockholders in an amount at least equal to (A) the sum of (i) 95% of AIMCO's
"REIT taxable income" (computed without regard to the dividends paid deduction
and AIMCO's net capital gain) and (ii) 95% of the net income (after tax), if
any, from foreclosure property, minus (B) the sum of certain items of noncash
income. Such distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before AIMCO timely files
its tax return for such year and if paid with or before the first regular
dividend payment after such declaration. To the extent that AIMCO does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "REIT taxable income," as adjusted, it will be subject to tax
thereon at the capital gains or ordinary corporate tax rates, as the case may
be. Furthermore, if AIMCO should fail to distribute during each calendar year at
least the sum of (i) 85% of its REIT ordinary income for such year, (ii) 95% of
its REIT capital gain income for such year, and (iii) any undistributed taxable
income from prior periods, AIMCO would be subject to a 4% excise tax on the
excess of such required distribution over the amounts actually distributed.
AIMCO believes that it has made, and intends to make, timely distributions
sufficient to satisfy this annual distribution requirement.
It is possible that AIMCO, from time to time, may not have sufficient cash
or other liquid assets to meet the 95% distribution requirement due to timing
differences between (i) the actual receipt of income (including receipt of
distributions from the Operating Partnership) and actual payment of deductible
expenses and (ii) the inclusion of such income and deduction of such expenses in
arriving at taxable income of AIMCO. In the event that such timing differences
occur, in order to meet the 95% distribution requirement, AIMCO may find it
necessary to
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arrange for short-term, or possibly long-term, borrowings or to pay dividends in
the form of taxable distributions of property.
Under certain circumstances, AIMCO may be able to rectify a failure to meet
the distribution requirement for a year by paying "deficiency dividends" to
stockholders in a later year, which may be included in AIMCO's deduction for
dividends paid for the earlier year. Thus, AIMCO may be able to avoid being
taxed on amounts distributed as deficiency dividends; however, AIMCO will be
required to pay interest based on the amount of any deduction taken for
deficiency dividends.
FAILURE TO QUALIFY. If AIMCO fails to qualify for taxation as a REIT in
any taxable year, and the relief provisions do not apply, AIMCO will be subject
to tax (including any applicable alternative minimum tax) on its taxable income
at regular corporate rates. Distributions to stockholders in any year in which
AIMCO fails to qualify will not be deductible by AIMCO nor will they be required
to be made. In such event, to the extent of current and accumulated earnings and
profits, all distributions to stockholders will be taxable as ordinary income,
and, subject to certain limitations of the Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled to relief under
specific statutory provisions, AIMCO will also be disqualified from taxation as
a REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether in all circumstances AIMCO would
be entitled to such statutory relief.
TAX ASPECTS OF AIMCO'S INVESTMENTS IN PARTNERSHIPS
GENERAL. Substantially all of AIMCO's investments are held indirectly
through the Operating Partnership. In general, partnerships are "pass-through"
entities that are not subject to Federal income tax. Rather, partners are
allocated their proportionate shares of the items of income, gain, loss,
deduction and credit of a partnership, and are potentially subject to tax
thereon, without regard to whether the partners receive a distribution from the
partnership. AIMCO will include in its income its proportionate share of the
foregoing partnership items for purposes of the various REIT income tests and in
the computation of its REIT taxable income. Moreover, for purposes of the REIT
asset tests, AIMCO will include its proportionate share of assets held by the
Subsidiary Partnerships. See "-- Taxation of AIMCO -- Ownership of Partnership
Interests."
ENTITY CLASSIFICATION. AIMCO's direct and indirect investment in
partnerships involves special tax considerations, including the possibility of a
challenge by the IRS of the status of any of the Subsidiary Partnerships as a
partnership (as opposed to an association taxable as a corporation) for Federal
income tax purposes. If any of these entities were treated as an association for
Federal income tax purposes, it would be taxable as a corporation and therefore
subject to an entity-level tax on its income. In such a situation, the character
of AIMCO's assets and items of gross income would change and could preclude
AIMCO from satisfying the asset tests and the income tests (see "-- Taxation of
AIMCO -- Asset Tests" and "-- Taxation of AIMCO -- Income Tests"), and in turn
could prevent AIMCO from qualifying as a REIT. See "-- Taxation of AIMCO --
Failure to Qualify" above for a discussion of the effect of AIMCO's failure to
meet such tests for a taxable year. In addition, any change in the status of any
of the Subsidiary Partnerships for tax purposes might be treated as a taxable
event, in which case AIMCO might incur a tax liability without any related cash
distributions.
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In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, which opinion
is based upon certain assumptions and representations by AIMCO and on opinions
of local counsel with respect to matters of local law, each of the Subsidiary
Partnerships will be treated as a partnership for Federal income tax purposes.
The opinion is expressed as of its date and Skadden, Arps, Slate, Meagher & Flom
LLP has no obligation to advise holders of Class A Common Stock of any
subsequent change in the matters stated, represented or assumed or any
subsequent change in the applicable law. An opinion of counsel, however, is not
binding on the IRS, and no assurance can be given that the IRS will not
challenge the status of these entities as partnerships for Federal income tax
purposes.
TAX ALLOCATIONS WITH RESPECT TO THE PROPERTIES. Pursuant to the Code and
the regulations thereunder, income, gain, loss and deduction attributable to
appreciated or depreciated property that is contributed to a partnership in
exchange for an interest in the partnership must be allocated in a manner such
that the contributing partner is charged with, or benefits from, respectively,
the unrealized gain or unrealized loss associated with the property at the time
of the contribution. The amount of such unrealized gain or unrealized loss is
generally equal to the difference between the fair market value of contributed
property at the time of contribution, and the adjusted tax basis of such
property at the time of contribution (a "Book-Tax Difference"). Such allocations
are solely for Federal income tax purposes and do not affect the book capital
accounts or other economic or legal arrangements among the partners. The
Operating Partnership was formed by way of contributions of appreciated property
(including certain of the Owned Properties). Consequently, allocations must be
made in a manner consistent with these requirements. Where a partner contributes
cash to a partnership that holds appreciated property, the Treasury regulations
provide for a similar allocation of such items to the other partners. These
rules apply to the contribution by AIMCO to the Operating Partnership of the
cash proceeds received in any offerings of its stock.
In general, certain holders of OP Units will be allocated lower amounts of
depreciation deductions for tax purposes and increased taxable income and gain
on sale by the Operating Partnership or the Subsidiary Partnerships of the
contributed Owned Properties. This will tend to eliminate the Book-Tax
Difference over the life of these partnerships. However, the special allocations
do not always entirely rectify the Book-Tax Difference on an annual basis or
with respect to a specific taxable transaction such as a sale. Thus, the
carryover basis of the contributed Owned Properties in the hands of the
Subsidiary Partnerships may cause AIMCO to be allocated lower depreciation and
other deductions, and possibly greater amounts of taxable income in the event of
a sale of such contributed assets in excess of the economic or book income
allocated to it as a result of such sale. This may cause AIMCO to recognize
taxable income in excess of cash proceeds, which might adversely affect AIMCO's
ability to comply with the REIT distribution requirements. See "-- Taxation of
AIMCO -- Annual Distribution Requirements."
With respect to any property purchased or to be purchased by any of the
Subsidiary Partnerships (other than through the issuance of OP Units) subsequent
to the formation of AIMCO, such property will initially have a tax basis equal
to its fair market value and the special allocation provisions described above
will not apply.
SALE OF THE PROPERTIES. AIMCO's share of any gain realized by the
Operating Partnership or a Property Partnership on the sale of any property held
as inventory or primarily for sale to customers in the ordinary course of
business will be treated as income from a prohibited
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transaction that is subject to a 100% penalty tax. See "-- Requirements for
Qualification -- Income Tests." Under existing law, whether property is held as
inventory or primarily for sale to customers in the ordinary course of a
partnership's trade or business is a question of fact that depends on all the
facts and circumstances with respect to the particular transaction. The
Operating Partnership and the Subsidiary Partnerships intend to hold the Owned
Properties for investment with a view to long-term appreciation, to engage in
the business of acquiring, developing, owning, and operating the Owned
Properties (and other apartment properties) and to make such occasional sales of
the Owned Properties, including peripheral land, as are consistent with AIMCO's
investment objectives.
TAXATION OF MANAGEMENT SUBSIDIARIES
A portion of the amounts to be used to fund distributions to stockholders
is expected to come from the Management Subsidiaries, through dividends paid on
the non-voting preferred stock of PAMS Inc. held by the Operating Partnership,
distributions paid to the Operating Partnership as the general partner of PAMS
LP and interest paid by PAMS Inc. on certain installment notes held by the
Operating Partnership. PAMS Inc. will not qualify as a REIT and will pay
Federal, state and local income taxes on its taxable income at normal corporate
rates. The Management Subsidiaries intend to claim annual deductions for
interest and amortization. No assurance can be given that the IRS will not
challenge such deductions. Any Federal, state or local income taxes that PAMS
Inc. is required to pay will reduce AIMCO's cash flow from operating activities
and its ability to make payments to holders of its securities.
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS
GENERAL. As long as AIMCO qualifies as a REIT, distributions made to
AIMCO's taxable domestic stockholders out of current or accumulated earnings and
profits (and not designated as capital gain dividends) will be taken into
account by them as ordinary income and will not be eligible for the dividends
received deduction for corporations. Distributions that are designated as
capital gain dividends will be taxed as long-term capital gains (to the extent
that they do not exceed AIMCO's actual net capital gain for the taxable year)
without regard to the period for which the stockholder has held its stock.
However, corporate stockholders may be required to treat up to 20% of certain
capital gain dividends as ordinary income.
Distributions in excess of current and accumulated earnings and profits
will not be taxable to a stockholder to the extent that they do not exceed the
adjusted basis of the stockholder's shares, but rather will reduce the adjusted
basis of such shares. To the extent that such distributions exceed the adjusted
basis of a stockholder's shares, they will be included in income as long-term
capital gain (or short-term capital gain if the shares have been held for one
year or less) provided that the shares are a capital asset in the hands of the
stockholder. In addition, any dividend declared by AIMCO in October, November or
December of any year and payable to a stockholder of record on a specified date
in any such month shall be treated as both paid by AIMCO and received by the
stockholder on December 31 of such year, provided that the dividend is actually
paid by AIMCO during January of the following calendar year. Stockholders may
not include in their individual income tax returns any net operating losses or
capital losses of AIMCO.
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In general, any loss upon a sale or exchange of shares by a stockholder who
has held such shares for six months or less (after applying certain holding
period rules) will be treated as a long-term capital loss to the extent of
distributions from AIMCO required to be treated by such stockholder as long-term
capital gain.
TAXATION OF TAX-EXEMPT STOCKHOLDERS
Based upon a published ruling by the IRS, distributions by AIMCO to a
stockholder that is a tax-exempt entity will not constitute "unrelated business
taxable income" ("UBTI"), provided that the tax-exempt entity has not financed
the acquisition of its shares with "acquisition indebtedness" within the meaning
of the Code and the shares are not otherwise used in an unrelated trade or
business of the tax-exempt entity.
Notwithstanding the preceding paragraph, however, a portion of the
dividends paid by AIMCO may be treated as UBTI to certain domestic private
pension trusts if AIMCO is treated as a "pension-held REIT." AIMCO believes that
it is not, and does not expect to become, a "pension-held REIT." If AIMCO were
to become a pension-held REIT, these rules generally would only apply to certain
pension trusts that hold more than 10% of AIMCO's stock.
TAXATION OF FOREIGN STOCKHOLDERS
The following is a discussion of certain anticipated U.S. Federal income
and estate tax consequences of the ownership and disposition of AIMCO's stock
applicable to Non-U.S. Holders of such stock. A "Non-U.S. Holder" is any person
other than (i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in the United States or under the laws of the
United States or of any state thereof, or (iii) an estate or trust whose income
is includable in gross income for U.S. Federal income tax purposes regardless of
its source. The discussion is based on current law and is for general
information only. The discussion addresses only certain and not all aspects of
U.S. Federal income and estate taxation.
ORDINARY DIVIDENDS. The portion of dividends received by Non-U.S. Holders
payable out of AIMCO's earnings and profits which are not attributable to
capital gains of AIMCO and which are not effectively connected with a U.S. trade
or business of the Non-U.S. Holder will be subject to U.S. withholding tax at
the rate of 30% (unless reduced by treaty). In general, Non-U.S. Holders will
not be considered engaged in a U.S. trade or business solely as a result of
their ownership of stock of AIMCO. In cases where the dividend income from a
Non-U.S. Holder's investment in stock of AIMCO is (or is treated as) effectively
connected with the Non-U.S. Holder's conduct of a U.S. trade or business, the
Non-U.S. Holder generally will be subject to U.S. tax at graduated rates, in the
same manner as U.S. stockholders are taxed with respect to such dividends (and
may also be subject to the 30% branch profits tax in the case of a Non-U.S.
Holder that is a foreign corporation).
NON-DIVIDEND DISTRIBUTIONS. Unless AIMCO stock constitutes a United
States Real Property Interest (a "USRPI"), distributions by AIMCO which are not
dividends out of the earnings and profits of AIMCO will not be subject to U.S.
income or withholding tax. If it cannot be determined at the time a
distribution is made whether or not such distribution will be in excess of
current and accumulated earnings and profits, the distribution will be subject
to withholding at the rate applicable to dividends. However, the Non-U.S.
Holder may seek a
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refund of such amounts from the IRS if it is subsequently determined that such
distribution was, in fact, in excess of current and accumulated earnings and
profits of AIMCO. If AIMCO stock constitutes a USRPI, such distributions will
be subject to 10% withholding and, to the extent such distributions exceed a
stockholder's basis in his or her AMICO stock, such distributions will be taxed
pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA")
at a rate of 35%.
CAPITAL GAIN DIVIDENDS. Under FIRPTA, a distribution made by AIMCO to a
Non-U.S. Holder, to the extent attributable to gains from dispositions of
USRPIs, such as the properties beneficially owned by AIMCO ("USRPI Capital
Gains"), will be considered effectively connected with a U.S. trade or business
of the Non-U.S. Holder and subject to U.S. income tax at the rate applicable to
U.S. individuals or corporations, without regard to whether such distribution
is designated as a capital gain dividend. In addition, AIMCO will be required
to withhold tax equal to 35% of the amount of dividends to the extent such
dividends constitute USRPI Capital Gains. Distributions subject to FIRPTA may
also be subject to a 30% branch profits tax in the hands of a foreign corporate
stockholder that is not entitled to treaty exemption.
DISPOSITION OF STOCK OF AIMCO. Unless AIMCO's stock constitutes a USRPI, a
sale of such stock by a Non-U.S. Holder generally will not be subject to U.S.
taxation under FIRPTA. The stock will not constitute a USRPI if AIMCO is a
"domestically controlled REIT." A domestically controlled REIT is a REIT in
which, at all times during a specified testing period, less than 50% in value of
its shares is held directly or indirectly by Non-U.S. Holders. AIMCO believes
that it is, and it expects to continue to be a domestically controlled REIT, and
therefore that the sale of AIMCO's stock will not be subject to taxation under
FIRPTA. Because AIMCO's stock will be publicly traded, however, no assurance can
be given that AIMCO will continue to be a domestically controlled REIT.
If AIMCO does not constitute a domestically controlled REIT, a Non-U.S.
Holder's sale of stock generally will still not be subject to tax under FIRPTA
as a sale of a USRPI provided that (i) the stock is "regularly traded" (as
defined by applicable Treasury regulations) on an established securities market
(e.g., the NYSE, on which AIMCO's Class A Common Stock is listed) and (ii) the
selling Non-U.S. Holder held 5% or less of AIMCO's outstanding stock at all
times during a specified testing period.
If gain on the sale of stock of AIMCO were subject to taxation under
FIRPTA, the Non-U.S. Holder would be subject to the same treatment as a U.S.
stockholder with respect to such gain (subject to applicable alternative minimum
tax and a special alternative minimum tax in the case of nonresident alien
individuals) and the purchaser of the stock could be required to withhold 10% of
the purchase price and remit such amount to the IRS.
Capital gains not subject to FIRPTA will nonetheless be taxable in the
United States to a Non-U.S. Holder in two cases: (i) if the Non-U.S. Holder's
investment in the stock of AIMCO is effectively connected with a U.S. trade or
business conducted by such Non-U.S. holder, the Non-U.S. Holder will be subject
to the same treatment as a U.S. stockholder with respect to such gain, or
(ii) if the Non-U.S. Holder is a nonresident alien individual who was present in
the United States for 183 days or more during the taxable year and has a "tax
home" in the United States, the nonresident alien individual will be subject to
a 30% tax on the individual's capital gain.
ESTATE TAX. Stock of AIMCO owned or treated as owned by an individual who
is not a citizen or resident (as specially defined for U.S. Federal estate tax
purposes) of the United States
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at the time of death will be includable in the individual's gross estate for
U.S. Federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise. Such individual's estate may be subject to U.S. Federal
estate tax on the property includable in the estate for U.S. Federal estate tax
purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING. AIMCO must report annually
to the IRS and to each Non-U.S. Holder the amount of dividends (including any
capital gain dividends) paid to, and the tax withheld with respect to, each
Non-U.S. Holder. These reporting requirements apply regardless of whether
withholding was reduced or eliminated by an applicable tax treaty. Copies of
these returns may also be made available under the provisions of a specific
treaty or agreement with the tax authorities in the country in which the
Non-U.S. Holder resides.
U.S. backup withholding (which generally is imposed at the rate of 31% on
certain payments to persons that fail to furnish the information required under
the U.S. information reporting requirements) and information reporting will
generally not apply to dividends (including any capital gain dividends) paid on
stock of AIMCO to a Non-U.S. Holder at an address outside the United States.
The payment of the proceeds from the disposition of stock of AIMCO to or
through a U.S. office of a broker will be subject to information reporting and
backup withholding unless the owner, under penalties of perjury, certifies,
among other things, its status as a Non-U.S. Holder, or otherwise establishes an
exemption. The payment of the proceeds from the disposition of stock to or
through a non-U.S. office of a non-U.S. broker generally will not be subject to
backup withholding and information reporting.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be refunded or credited against the Non-United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the IRS.
These information reporting and backup withholding rules are under review
by the U.S. Treasury and their application to the Class A Common Stock could be
changed by future regulations. On April 15, 1996, the IRS issued proposed
Treasury Regulations concerning the withholding of tax and reporting for certain
amounts paid to non-resident individuals and foreign corporations. The proposed
Treasury Regulations, if adopted in their present form, would be effective for
payments made after December 31, 1997. Prospective purchasers should consult
their tax advisors concerning the potential adoption of such proposed Treasury
Regulations and the potential effect on their ownership of Class A Common Stock.
OTHER TAX CONSEQUENCES
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSEQUENCES.
Prospective investors should recognize that the present Federal income tax
treatment of an investment in AIMCO may be modified by legislative, judicial or
administrative action at any time, and that any such action may affect
investments and commitments previously made. The rules dealing with Federal
income taxation are constantly under review by persons involved in the
legislative process and by the IRS and the U.S. Treasury Department, resulting
in revisions of regulations and revised interpretations of established concepts
as well as statutory changes. Revisions in Federal tax laws
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and interpretations thereof could adversely affect the tax consequences of an
investment in AIMCO.
STATE AND LOCAL TAXES. AIMCO and its stockholders may be subject to state
or local taxation in various state or local jurisdictions, including those in
which it or they transact business or reside. The state and local tax treatment
of AIMCO and its stockholders may not conform to the Federal income tax
consequences discussed above. Consequently, prospective stockholders should
consult their own tax advisors regarding the effect of state and local tax laws
on an investment in AIMCO.
LEGAL MATTERS
Certain tax matters will be passed upon for AIMCO by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California. The validity of the Class A Common
Stock offered hereby will be passed upon for AIMCO by Piper & Marbury L.L.P.,
Baltimore, Maryland. Certain matters as to Maryland law will be passed upon for
AIMCO by Piper & Marbury L.L.P. Certain matters as to Florida law will be passed
upon for AIMCO by Shumaker, Loop & Kendrick, Tampa, Florida.
EXPERTS
The consolidated financial statements of Apartment Investment and
Management Company and the combined financial statements of the AIMCO
Predecessors included in Apartment Investment and Management Company's Annual
Report on Form 10-K for the year ended December 31, 1995 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and combined financial statements are incorporated herein
by reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
The Historical Summaries of Gross Income and Direct Operating Expenses of
Somerset Village for the years ended December 31, 1995 and 1994 and the period
from June 10, 1993 through December 31, 1993, and the Combined Historical
Summary of Gross Income and Direct Operating Expenses of Sycamore Creek
Apartments and Tustin Woods Apartments for the year ended December 31, 1995,
included in Apartment Investment and Management Company's Current Report on
Form 8-K, dated November 21, 1996, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included therein
and incorporated herein by reference. Such Historical Summaries are included
therein and incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
The combined statement of revenues and certain expenses of the GECC
Properties (as defined in the notes thereto) included in Apartment Investment
and Management Company's Current Report on Form 8-K dated December 29, 1995 (as
amended), has been audited by Arthur Andersen LLP,
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independent public accountants, as indicated in their report thereon included
therein and incorporated herein by reference. The statement of revenues and
certain expenses of the Peachtree Park Apartments included in Apartment
Investment and Management Company's Current Report on Form 8-K dated January 1,
1996, has been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report thereon included therein and incorporated herein by
reference. Such statements have been incorporated herein by reference in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
Any financial statements and schedules hereafter filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and
incorporated by reference in this Prospectus that have been examined and are the
subject of a report by independent accountants will be so incorporated herein by
reference in reliance upon such reports given and upon the authority of such
firms as experts in accounting and auditing to the extent covered by consents
filed with the Commission.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONS.
The estimated expenses (all of which are to be paid by the Company), other
than underwriting discounts and commissions, in connection with the offering of
the Class A Common Stock, are as follows:
Registration Fee -- Securities and Exchange Commission . . . . $ 7,618
Printing and Engraving Expenses . . . . . . . . . . . . . . . . $ 1,000
Legal Fees and Expenses (other than Blue Sky) . . . . . . . . . $ 7,000
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . $ 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 0
--------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,618
--------
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter limits the liability of the Company's directors and
officers to the Company and its stockholders to the fullest extent permitted
from time to time by Maryland law. Maryland law presently permits the liability
of directors and officers to a corporation or its stockholders for money damages
to be limited, except (i) to the extent that it is proved that the director or
officer actually received an improper benefit or profit in money, property or
services for the amount of the benefit or profit in money, property or services
actually received, or (ii) if a judgment or other final adjudication is entered
in a proceeding based on a finding that the director's or officer's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. This provision
does not limit the ability of the Company or its stockholders to obtain other
relief, such as an injunction or rescission.
The Company's Charter and Bylaws require the Company to indemnify its
directors, officers and certain other parties to the fullest extent permitted
from time to time by Maryland law. The MGCL permits a corporation to indemnify
its directors, officers and certain other parties against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service to or at the request of the corporation, unless it is established
that (i) the act or omission of the indemnified party was material to the matter
giving rise to the proceeding and (x) was committed in bad faith or (y) was the
result of active and deliberate dishonesty, (ii) the indemnified party actually
received an improper personal benefit in money, property or services or (iii) in
the case of any criminal proceeding, the indemnified party had reasonable cause
to believe that the act or omission was unlawful. Indemnification may be made
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by the director or officer in connection with the proceeding;
PROVIDED, HOWEVER, that if the proceeding is one by or in the right of the
corporation, indemnification may not be made with respect to any proceeding in
which the director or officer has been adjudged to be liable to the corporation.
In addition, a director or officer may not be indemnified with respect to any
proceeding charging improper personal benefit to the director or officer in
which the director or officer was adjudged to be
II-1
<PAGE>
liable on the basis that personal benefit was improperly received. The
termination of any proceeding by conviction, or upon a plea of nolo contendere
or its equivalent, or an entry of any order of probation prior to judgment,
creates a rebuttable presumption that the director or officer did not meet the
requisite standard of conduct required for indemnification to be permitted. It
is the position of the Securities and Exchange Commission that indemnification
of directors and officers for liabilities arising under the Securities Act is
against public policy and is unenforceable pursuant to Section 14 of the
Securities Act.
The Company has entered into agreements with certain of its executive
officers (Messrs. Considine, Kompaniez, Ira and Lacy, and Ms. Morein and Ms.
Heath), pursuant to which the Company has agreed to indemnify such executive
officers to the fullest extent permitted by applicable law.
The Agreement of Limited Partnership (the "Operating Partnership
Agreement") of AIMCO Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"), also provides for indemnification of the Company, or
any director or officer of the Company, in its capacity as the previous general
partner of the Partnership, from and against all losses, claims, damages,
liabilities, joint or several, expenses (including legal fees), fines,
settlements and other amounts incurred in connection with any actions relating
to the operations of the Operating Partnership, as set forth in the Operating
Partnership Agreement.
Section 2.8 of the Apartment Investment and Management Company Non-
Qualified Employee Stock Option Plan (the "Plan"), Section 2.8 of the Apartment
Investment and Management Company 1996 Stock Award and Incentive Plan (the "1996
Plan"), and Section 6.7 of The 1994 Stock Option Plan of Apartment Investment
and Management Company and Affiliates (the "1994 Plan"), specifically provide
that, to the fullest extent permitted by law, each of the members of the Board
of Directors of the Company (the "Board"), the Compensation Committee of the
Board and each of the directors, officers and employees of the Company, any
Company subsidiary, the Operating Partnership and any subsidiary of the
Operating Partnership shall be held harmless and indemnified by the Company for
any liability, loss (including amounts paid in settlement), damages or expenses
(including reasonable attorneys' fees) suffered by virtue of any determinations,
acts or failures to act, or alleged acts or failures to act, in connection with
the administration of the Plan, the 1996 Plan or the 1994 Plan, as the case may
be, so long as such person is not determined by a final adjudication to be
guilty of willful misconduct with respect to such determination, action or
failure to act.
ITEM 16. EXHIBITS.
5.1 Opinion of Piper & Marbury L.L.P. regarding the validity of the Class
A Common Stock offered hereby.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding tax
matters.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Piper & Marbury L.L.P. (included in their opinion filed as
Exhibit 5.1).
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in their
opinion filed as Exhibit 8.1).
23.5 Consent of Shumaker, Loop & Kendrick.
24 Power of Attorney (included on the signature page hereof).
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
II-3
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Terry
Considine and Peter Kompaniez his or her true and lawful attorney-in-fact and
agents, each acting alone, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 6th day of
December, 1996.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ TERRY CONSIDINE
---------------------------
Terry Considine,
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -----
<S> <C> <C>
/s/ TERRY CONSIDINE
- ------------------------------- Chairman of the Board, President and Chief Executive December 6, 1996
Terry Considine Officer (Principal Executive Officer)
/s/ LEEANN MOREIN
- ------------------------------- Senior Vice President, Chief Financial Officer December 6, 1996
Leeann Morein and Secretary (Principal Financial Officer)
/s/ PATRICIA HEATH
- ------------------------------- Vice President and Chief Accounting Officer December 6, 1996
Patricia Heath (Principal Accounting Officer)
/s/ PETER K. KOMPANIEZ
- ------------------------------- Vice Chairman and Director December 6, 1996
Peter K. Kompaniez
/s/ RICHARD S. ELLWOOD
- ------------------------------- Director December 6, 1996
Richard S. Ellwood
- ------------------------------- Director December _, 1996
J. Landis Martin
/s/ THOMAS L. RHODES
- ------------------------------- Director December 6, 1996
Thomas L. Rhodes
/s/ JOHN D. SMITH
- ------------------------------- Director December 6, 1996
John D. Smith
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
5.1 Opinion of Piper & Marbury L.L.P. regarding the validity
of the Class A Common Stock offered hereby.
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding tax matters.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Piper & Marbury L.L.P. (included in their
opinion filed as Exhibit 5.1).
23.4 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in their opinion filed as Exhibit 8.1).
23.5 Consent of Shumaker, Loop & Kendrick.
24 Power of Attorney (included on the signature page hereof).
<PAGE>
EXHIBIT 5.1
[PIPER & MARBURY LETTERHEAD]
December 6, 1996
Apartment Investment and Management Company
1873 South Bellaire Street, Suite 1700
Denver, Colorado 80222
REGISTRATION STATEMENT OF FORM S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special Maryland counsel to Apartment Investment and
Management Company, a Maryland corporation (the "Company"), in connection with
the Company's registration statement on Form S-3 filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Registration Statement") relating to the public offer and sale from time to
time of up to 1,010,598 shares (the "Shares") of the Company's Class A Common
Stock, par value $.01 per share. The Shares may be offered and sold by
certain selling stockholders named in the Registration Statement (the "Selling
Stockholders"), including Shares that may be issued in exchange for units
("OP Units") of limited partnership in AIMCO Properties, L.P., a Delaware
limited partnership (the "Operating Partnership"), through which
substantially all of the Company's operations are conducted. The holders of
OP Units have the right, subject to the terms of the agreement of limited
partnership of the Operating Partnership (the "Limited Partnership
Agreement"), to have some or all of their OP Units redeemed by the Operating
Partnership. The Company has the right, under the Limited Partnership
Agreement and subject to the Ownership Limit (as defined in the Charter of
the Company) to acquire such OP Units in exchange for shares of Class A
Common Stock.
In our capacity as special Maryland counsel, we have reviewed the
following documents:
(a) the Charter and By-Laws of the Company,
<PAGE>
Apartment Investment and Management Company
December 6, 1996
Page 2
(b) the Registration Statement,
(c) the Limited Partnership Agreement,
(d) the proceedings of the Board of Directors of the Company
relating to the issuance of the Shares issued (and to be issued) to the
Selling Stockholders,
(e) a Good Standing Certificate of the Company, dated a recent
date, issued by the Maryland State Department of Assessments and
Taxation,
(f) a Certificate of the Secretary of the Company dated December 6,
1996, and
(g) Such other documents as we have considered necessary to the
rendering of the opinion expressed below.
In such examination, we have assumed, without independent investigation,
the genuineness of all signatures, the legal capacity of all individuals who
have executed any of the aforesaid documents, the authenticity of all
documents submitted to us as originals, the conformity with originals of all
documents submitted to us as copies (and the authenticity of the originals of
such copies), and that all public records reviewed are accurate and complete.
As to factual matters, we have relied on the Certificate of the Secretary and
have not independently verified the matters stated therein. We assume that
the Company will have available at the time of issuance of any of the Shares
not now issued at least that number of authorized but unissued shares of Class
A Common Stock of the Company equal to the number of shares then being issued.
Based upon the foregoing and having regard for such legal considerations
as we deem relevant, we are of the opinion and advise you that the Shares
issued by the Company (or to be issued by the Company in exchange for OP
Units) have been duly and validly authorized and are (or, when issued and
delivered by the Company in exchange for OP Units in accordance with the
Limited Partnership Agreement, will be) validly issued, fully paid, and
non-assessable.
The opinion expressed above is limited to the law of Maryland. Such
opinion is rendered as of the date hereof. We assume no obligation to update
such opinion to reflect any facts or circumstances which may hereafter come
to our attention or any changes in the law which may hereafter occur.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm and to our opinion in
the Registration Statement.
Very truly yours,
/s/ PIPER & MARBURY L.L.P.
<PAGE>
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 Third Avenue
New York, NY 10022-3897
(212)735-3000
December 6, 1996
Apartment Investment and
Management Company
1873 South Bellaire Street
Suite 1700
Denver, Colorado 80222
Re: Certain Federal Income Tax Considerations
-----------------------------------------
Dear Sirs:
You have requested our opinion concerning certain Federal income tax
considerations in connection with an offering for sale, from time to time, of
Class A Common Stock (the "Offering") of Apartment Investment and Management
Company, a Maryland corporation ("AIMCO"), by certain stockholders pursuant to
the Registration Statement on Form S-3 filed with the Securities and Exchange
Commission on December 6, 1996 (the "Registration Statement"). Unless otherwise
specifically defined herein, all capitalized terms have the meanings assigned to
them in the Registration Statement, as amended to date.
In connection with the Offering and with a previous offering of Class
A Common Stock by AIMCO that was completed on December 19, 1995 (including the
exercise of the over allotment option related thereto on December 29, 1995), we
have acted as counsel to AIMCO, and we have assisted in the preparation of the
Registration Statement and certain other documents. In formulating our opinion,
we have reviewed the Registration Statement, the partnership agreements or
organizational documents (including any amendments thereof) for each of the
partnerships and limited liability companies indicated on Exhibit A attached
hereto in which AIMCO holds a direct or indirect interest (the "Partner-
<PAGE>
Apartment Investment and
Management Company
December 6, 1996
Page 2
ships"), and such other documentation and information provided by you as is
relevant to the Offering and necessary to prepare the Registration Statement.
In addition, you have provided us with certain representations of officers of
AIMCO relating to, among other things, the actual and proposed operation of
AIMCO. For purposes of our opinion, we have not made an independent
investigation of the facts set forth in such representations, the partnership
agreements and organizational documents for the Partnerships, the
Registration Statement or any other document. We have, consequently, relied
on your representations that the information presented in such documents or
otherwise furnished to us accurately and completely describes all material
facts relevant to our opinion. No facts have come to our attention, however,
that would cause us to question the accuracy and completeness of such facts
or documents in a material way. We have also relied upon the opinion of
Piper & Marbury L.L.P. dated December 6, 1996 with respect to certain matters
of Maryland law, and the opinion of Shumaker, Loop & Kendrick dated October 18,
1995 with respect to certain matters of Florida law.
In rendering our opinion, we have assumed that the transactions
contemplated by the foregoing documents have been consummated in accordance with
the operative documents, and that such documents accurately reflect the material
facts of such transactions. In addition, our opinion is based on the
correctness of the following specific assumptions: (i) each of AIMCO, the
Partnerships, Property Asset Management Services, Inc., and any "qualified REIT
subsidiary" of AIMCO (within the meaning of section 856(i)(2) of the Internal
Revenue Code of 1986, as amended (the "Code")), has been and will continue to be
operated in accordance with the laws of the jurisdiction in which it was formed
and in the manner described in the relevant partnership agreement or other
organizational documents and in the Registration Statement; and (ii) there have
been no changes in the applicable laws of the State of Maryland or any other
state under the laws of which any of the Partnerships have been formed. In
rendering our opinion, we have also considered and relied upon the Code, the
regulations promulgated thereunder by the Treasury Department (the
"Regulations"), administrative rulings and the other interpretations of the Code
and the Regulations by the courts and the Internal Revenue Service, all as they
exist at the date of this letter. With respect to the latter assumption, it
should be noted that statutes, regulations, judicial decisions, and
administrative interpretations are subject to change at any time and, in some
circumstances, with retroactive effect.
<PAGE>
Apartment Investment and
Management Company
December 6, 1996
Page 3
Of course, a material change which is made after the date hereof in any of the
foregoing bases for our opinion could affect our conclusions.
We express no opinion as to the laws of any jurisdiction other than
the Federal laws of the United States of America to the extent specifically
referred to herein.
Based on the foregoing, we are of the opinion that:
1. Commencing with AIMCO's initial taxable year ended December 31,
1994, AIMCO was organized in conformity with the requirements for qualification
as a real estate investment trust ("REIT") under the Code, and AIMCO's proposed
method of operation, and its actual method of operation since its formation,
will enable it to meet the requirements for qualification and taxation as a
REIT. As noted in the Registration Statement, the qualification and taxation as
a REIT depends upon AIMCO's ability to meet, through actual annual operating
results, certain requirements, including requirements relating to distribution
levels and diversity of stock ownership, and the various qualification tests
imposed under the Code, the results of which will not be reviewed by us.
Accordingly, no assurance can be given that the actual results of AIMCO's
operation for any one taxable year will satisfy such requirements.
2. Each of the Partnerships (i) will be treated as a partnership for
Federal income tax purposes and not as an association taxable as a corporation,
and (ii) will not be a "publicly traded partnership" within the meaning of
Section 7704(b) of the Code.
3. Although the discussion in the Registration Statement under the
heading "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" does not purport to discuss
all possible Federal income tax consequences of the purchase, ownership, and
disposition of the Class A Common Stock, such discussion, to the extent that it
relates to matters of law or legal conclusions, constitutes in all material
respects a fair and accurate summary of the Federal income tax consequences of
the purchase, ownership, and disposition of the Class A Common Stock under
current law.
<PAGE>
Apartment Investment and
Management Company
December 6, 1996
Page 4
Other than as expressly stated above, we express no opinion on any
issue relating to AIMCO, the Partnerships, or to any investment therein.
This opinion is intended for the exclusive use of the person to whom
it is addressed, except as set forth herein, and it may not be used, circulated,
quoted or relied upon for any other purpose without our prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the references to Skadden, Arps, Slate, Meagher & Flom in the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules or regulations of the
Securities and Exchange Commission thereunder. This opinion is expressed as of
the date hereof, and we disclaim any undertaking to advise you of any subsequent
changes of the matters stated, represented, or assumed herein or any subsequent
changes in applicable law.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
Exhibit A
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
SUBSIDIARY PARTNERSHIPS
- --------------------------------------------------------------------------------
Subsidiary Partnerships and Limited General Partner or Managing Member
Liability Companies
- --------------------------------------------------------------------------------
AIMCO/Bluffs, L.L.C., a Delaware AIMCO Holdings, L.P., a Delaware
limited liability company limited partnership
- --------------------------------------------------------------------------------
AIMCO/Boardwalk, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Boardwalk Finance, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Brandywine, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/HIL, L.L.C., a Delaware limited AIMCO Holdings, L.P., a Delaware
liability company limited partnership
- --------------------------------------------------------------------------------
AIMCO Holdings, L.P., a Delaware AIMCO Holdings QRS, Inc., a Delaware
limited partnership corporation
- --------------------------------------------------------------------------------
AIMCO/Montecito, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO LT, L.P., a Delaware limited AIMCO Holdings, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/OTC L.L.C., a Delaware limited AIMCO Holdings, L.P., a Delaware
liability company limited partnership
- --------------------------------------------------------------------------------
AIMCO/OTC, L.P., a Delaware limited AIMCO Holdings, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/PAM Properties, L.P., a Delaware AIMCO Properties, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
<PAGE>
P-------------------------------------------------------------------------------
AIMCO/Penn Square, L.L.C., a Delaware AIMCO Holdings, L.P., a Delaware
limited liability company limited partnership
- --------------------------------------------------------------------------------
AIMCO Properties, L.P., a Delaware AIMCO-GP, Inc., a Delaware corporation
limited partnership
- --------------------------------------------------------------------------------
AIMCO Properties Finance Partnership, AIMCO Properties Finance, Corp., a
L.P., a Delaware limited partnership Delaware corporation
- --------------------------------------------------------------------------------
AIMCO/RALS, L.P., a Delaware limited AIMCO Holdings, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/SA, L.L.C., a Delaware limited AIMCO Holdings, L.P., a Delaware
liability company limited partnership
- --------------------------------------------------------------------------------
AIMCO/Stonegate, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Teal Pointe, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO UT, L.P., a Delaware limited AIMCO Holdings, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Villa Ladera, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Williams Cove, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO/Woodlands-Tyler, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
Everest Investors 5, LLC, a California Everest Properties, LLC, a California
limited liability company limited liability company
- --------------------------------------------------------------------------------
HomeCorp Investments, Ltd., an Alabama AIMCO/HIL, L.L.C., a Delaware limited
limited partnership liability company
AIMCO Holdings, L.P., a Delaware
limited partnership
- --------------------------------------------------------------------------------
<PAGE>
OTC Apartments Limited Partnership, a AIMCO/OTC, L.L.C., a Delaware limited
Florida limited partnership liability company
- --------------------------------------------------------------------------------
Property Asset Management Services, AIMCO Properties, L.P., a Delaware
L.P., a Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
Property Asset Management Services- Property Asset Management Services of
California, L.L.C., a California the Southwest, L.L.C., a Delaware
limited liability company limited liability company
- --------------------------------------------------------------------------------
S.A. Apartments Ltd., an Alabama AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Seasons Apartments, L.L.C., a Texas AIMCO Holdings, L.P., a Delaware
limited liability company limited partnership
Subsidiary Partnerships and Limited General Partner or Managing Member
Liability Companies
- --------------------------------------------------------------------------------
Seasons Apartments, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Somerset Utah L.P., a Colorado limited AIMCO Somerset, Inc. a Delaware
partnership corporation
- --------------------------------------------------------------------------------
Anchorage Partners, a Texas limited AIMCO Anchorage, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
Coventry Square Partners, a Texas AIMCO Group, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Fisherman's Wharf Partners, a Texas AIMCO Group, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
J.W. English Swiss Village Partners, a AIMCO Group, L.P., a Delaware limited
Texas limited partnership partnership
- --------------------------------------------------------------------------------
8503 Westheimer Partners, Ltd., a AIMCO Group, L.P., a Delaware limited
Texas limited partnership partnership
- --------------------------------------------------------------------------------
J.W. English Camelot Apartments, a AIMCO Group, L.P., a Delaware limited
Texas limited partnership partnership
- --------------------------------------------------------------------------------
English Manor Partners, a Texas AIMCO Group, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
CRA Investors, Ltd., a Texas limited AIMCO Group, L.P., a Delaware limited
partnership partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Gulfgate Partners, Ltd., a Texas AIMCO Hampton Hill, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Hampton Hill Partners, a Texas limited AIMCO Hampton Hill, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
Hastings Place Partners, a Texas AIMCO Hastings Place, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Oak Falls Partners, a Texas limited AIMCO Oak Falls, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
Peppermill Place Partners, a Texas AIMCO Peppermill Place, L.P., a
limited partnership Delaware limited partnership
- --------------------------------------------------------------------------------
Houston Recovery Fund, a Texas limited AIMCO Recovery Fund, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
Stirling Court Partners, a Texas AIMCO Stirling Court, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Bridgewater Partners, Ltd., a Texas AIMCO Bridgewater, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Copperfield Partners, Ltd., a Texas AIMCO Copperfield, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Crows Nest Partners, Ltd., a Texas AIMCO Crows Nest, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
J.W. English Fondren Court Partners, a AIMCO Fondren Court, L.P., a Delaware
Texas limited partnership limited partnership
- --------------------------------------------------------------------------------
Fondren Court, Ltd., a Texas limited AIMCO Fondren Court, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
Galleria Office Partners, Ltd., a AIMCO Galleria Office, L.P., a
Texas limited partnership Delaware limited partnership
- --------------------------------------------------------------------------------
Hastings Green Partners, Ltd., a Texas AIMCO Hastings Green, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
The Park at Cedar Lawn, Ltd., a Texas AIMCO Park at Cedar Lawn, L.P., a
limited partnership Delaware limited partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Seaside Point Partners, Ltd., a Texas AIMCO Seaside Point, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Clear Lake Land Partners, Ltd., a AIMCO Signature Point, L.P., a
Texas limited partnerships Delaware limited partnership
- --------------------------------------------------------------------------------
Signature Point Partners, Ltd., a AIMCO Signature Point, L.P., a
Texas limited partnerships Delaware limited partnership
- --------------------------------------------------------------------------------
Sunbury Partners, Ltd., a Texas AIMCO Sunbury, L.P., a Delaware
limited partnerships limited partnership
- --------------------------------------------------------------------------------
Township at Highlands Partners, Ltd., AIMCO Township at Highlands, L.P., a
a Delaware limited partnerships Delaware limited partnership
- --------------------------------------------------------------------------------
Westchase Midrise Office Partners, AIMCO Westchase Midrise, L.P., a
Ltd., a Texas limited partnerships Delaware limited partnership
- --------------------------------------------------------------------------------
West Trails Partners, Ltd., a Texas AIMCO West Trails, L.P., a Delaware
limited partnerships limited partnership
- --------------------------------------------------------------------------------
Woodway Office Partners, Ltd., a Texas AIMCO Woodbury Office, L.P., a
limited partnerships Delaware limited partnership
- --------------------------------------------------------------------------------
AIMCO Anchorage, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Group, L.P., a Delaware limited AIMCO Holdings, L.P., a Delaware
partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Hampton Hill, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Hastings Place, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Oak Falls, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Peppermill Place, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Recovery Fund, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
AIMCO Stirling Court, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Bridgewater, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Copperfield, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Crows Nest, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Fondren Court, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Galleria Office, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Hastings Green, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Park at Cedar Lawn, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Seaside Point, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Signature Point, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Sunbury, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Township at Highlands, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Westchase Midrise, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO West Trails, L.P., a Delaware AIMCO Holdings, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
AIMCO Woodbury Office, L.P., a AIMCO Holdings, L.P., a Delaware
Delaware limited partnership limited partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
English Manor Joint Venture, a Texas J.W. English Camelot Apartments, a
joint venture Texas limited partnership
English Manor Partners, a Texas
limited partnership
- --------------------------------------------------------------------------------
Castlerock Joint Venture, a Texas English Manor Joint Venture, a Texas
joint venture joint venture
CRA Investors, Ltd., a Texas limited
partnership
- --------------------------------------------------------------------------------
The Fondren Court Joint Venture, a J.W. English Fondren Court Partners, a
Texas joint venture Texas limited partnership
Fondren Court Partners, Ltd., a Texas
limited partnership
- --------------------------------------------------------------------------------
Signature Point Joint Venture, a Texas Clear Lake Land Partners, Ltd., a
joint venture Texas limited partnership
Signature Point Partners, Ltd., a
Texas limited partnership
- --------------------------------------------------------------------------------
RC Associates, an Illinois limited AIMCO LT, L.P., a Delaware limited
partnership partnership
- --------------------------------------------------------------------------------
Ridgecrest Associates, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Highland Park Partners, an Illinois AIMCO LT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
AIMCO/Easton Falls, L.P., a Delaware AIMCO Properties, L.P., a Delaware
limited partnership limited partnership
- --------------------------------------------------------------------------------
Cypress Landing Limited Partnership, AIMCO LT, L.P., a Delaware limited
an Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Meadows Limited Partnership, an AIMCO LT, L.P., a Delaware limited
Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Greentree Associates, an Illinois AIMCO LT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Copper Chase Partners Limited AIMCO LT, L.P., a Delaware limited
Partnership, an Illinois limited partnership
partnership
- --------------------------------------------------------------------------------
Heather Associates, an Illinois Balcor/Sportvest-II, an Illinois
limited partnership limited partnership
- --------------------------------------------------------------------------------
Southridge Associates, an Illinois AIMCO LT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Walnut Springs Limited Partnership, an AIMCO LT, L.P., a Delaware limited
Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Woodhill Associates, an Illinois AIMCO LT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Woodland Ridge II Partners, an AIMCO LT, L.P., a Delaware limited
Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Meadowbrook Drive Limited Partnership, AIMCO LT, L.P., a Delaware limited
an Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Cypress Landing Associates, an AIMCO UT, L.P., a Delaware limited
Illinois limited partnership partnership
- --------------------------------------------------------------------------------
Anderson Mill Associates, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Copper Chase Associates, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Balcor/Sportvest-II, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Southridge Investors, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Walnut Springs Associates, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Woodland Ridge Associates, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Randol Crossing Partners, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Randol Crossing Investors, an Illinois AIMCO UT, L.P., a Delaware limited
limited partnership partnership
- --------------------------------------------------------------------------------
Walters/Property Asset Management Property Asset Management Services,
Services, L.P., a Delaware limited L.P., a Delaware limited partnership
partnership
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Apartment
Investment and Management Company for the registration of 1,010,598 shares of
its common stock and to the incorporation by reference therein of (i) our
report dated January 26, 1996, except for Note 17, as to which the date is
January 31, 1996, with respect to the consolidated financial statements and
schedule of Apartment Investment and Management Company included in its
Annual Report on Form 10-K for the year ended December 31, 1995, filed with
the Securities and Exchange Commission (the "Annual Report"), (ii) our report
dated January 20, 1995, with respect to the combined financial statements and
schedule of the AIMCO Predecessors (as defined in the notes thereto) included
in the Annual Report, (iii) our report dated April 2, 1996, with respect to
the Historical Summaries of Gross Income and Direct Operating Expenses of
Somerset Village for the years ended December 31, 1995 and 1994 and for the
period from June 10, 1993 to December 31, 1993 included in Apartment
Investment and Management Company's Current Report on Form 8-K, dated
November 21, 1996, filed with the Securities and Exchange Commission, and
(iv) our report dated November 19, 1996 with respect to the Combined
Historical Summary of Gross Income and Direct Operating Expenses of Sycamore
Creek Apartments and Tustin Woods Apartments for the year ended December 31,
1995 included in Apartment Investment and Management Company's Current Report
on Form 8-K, dated November 21, 1996, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Dallas, Texas
December 4, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and all references to our Firm) included in or made a part of this
Registration Statement on Form S-3 and the related Prospectus of Apartment
Investment and Management Company (the "Company") and to the incorporation by
reference therein of (i) our report dated November 21, 1995, with respect to the
combined statement of revenues and certain expenses of the GECC Properties (as
defined in the notes thereto) included in the Company's Current Report on
Form 8-K dated December 29, 1995 (as amended), filed with the Securities and
Exchange Commission and (ii) our report dated January 2, 1996 with respect to
the statement of revenues and certain expenses of the Peachtree Park Apartments
included in the Company's Current Report on Form 8-K dated January 1, 1996,
filed with the Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
Denver, Colorado
December 6, 1996
<PAGE>
EXHIBIT 23.5
CONSENT OF SHUMAKER, LOOP & KENDRICK
We consent to the reference to our firm under the caption "Legal Matters"
in the Registration Statement on Form S-3 filed with the Securities and Exchange
Commission as of the date hereof and the related Prospectus of Apartment
Investment and Management Company.
SHUMAKER, LOOP & KENDRICK
By: /s/ John S. Inglis
------------------
John S. Inglis
Managing Partner
Tampa, Florida
December 6, 1996
