APARTMENT INVESTMENT & MANAGEMENT CO, 424B2, 1997-10-23

APARTMENT INVESTMENT & MANAGEMENT CO
424B2, 1997-10-23
REAL ESTATE INVESTMENT TRUSTS

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<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 22, 1997)

7,000,000 SHARES

[LOGO]

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CLASS A COMMON STOCK
-------------

Apartment Investment and Management Company, a Maryland corporation
("AIMCO"), is a self-administered and self-managed real estate investment trust
("REIT"). All of the shares of Class A Common Stock, par value $.01 per share
(the "Class A Common Stock"), of AIMCO offered hereby (the "Offering") are being
sold by AIMCO. The Class A Common Stock is listed on the New York Stock Exchange
(the "NYSE") under the symbol "AIV." On October 21, 1997, the last reported sale
price of the Class A Common Stock on the NYSE was $36 9/16 per share. For a
description of AIMCO's Common Stock, see "Description of Common Stock" in the
accompanying Prospectus.

------------------

SEE "RISK FACTORS" BEGINNING ON PAGE S-13 FOR CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF 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 SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS AND PROCEEDS TO
PRICE TO PUBLIC COMMISSIONS (1) AIMCO (2)
<S> <C> <C> <C>
Per Share $36.50 $1.86 $34.64
Total (3) $255,500,000 $13,020,000 $242,480,000
</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."

(2) Before deducting estimated expenses of $1,000,000 payable by AIMCO.

(3) AIMCO has granted the Underwriters a 30-day option to purchase up to
1,050,000 additional shares of Class A Common Stock, solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to Public, Underwriting Discounts and Commissions and Proceeds to
AIMCO will be $293,825,000, $14,973,000 and $278,852,000, respectively. See
"Underwriting."

------------------

The shares of Class A Common Stock are being offered by the several
Underwriters named herein, subject to prior sale, when, as and if accepted by
them and subject to certain conditions. It is expected that certificates for the
Class A Common Stock offered hereby will be available for delivery on or about
October 27, 1997, at the offices of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001.
------------------

SMITH BARNEY INC.
BT ALEX. BROWN
LEHMAN BROTHERS
MERRILL LYNCH & CO.
RAYMOND JAMES & ASSOCIATES, INC.
THE ROBINSON-HUMPHREY COMPANY

October 22, 1997
<PAGE>
NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION BY AIMCO OR BY THE
UNDERWRITERS THAT WOULD PERMIT A PUBLIC OFFERING OF THE CLASS A COMMON STOCK OR
POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT IN ANY JURISDICTION
WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED STATES.
PERSONS WHO COME INTO POSSESSION OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS ARE REQUIRED BY AIMCO AND THE UNDERWRITERS TO INFORM
THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THE OFFERING OF THE CLASS
A COMMON STOCK AND THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS.
------------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK, INCLUDING OVER-ALLOTMENT, ENTERING STABILIZING BIDS, EFFECTING SYNDICATE
COVERING TRANSACTIONS, AND IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING" ELSEWHERE HEREIN AND "PLAN OF DISTRIBUTION" IN
THE ACCOMPANYING PROSPECTUS.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements in certain circumstances. Certain
statements in the Prospectus Supplement Summary, under the caption "Risk
Factors" and elsewhere in this Prospectus Supplement and the documents
incorporated by reference herein contain or may contain information that is
forward looking, including, without limitation, statements regarding
acquisitions, AIMCO's future financial performance and the effect of government
regulations. Actual results may differ materially from those described in the
forward-looking statements and will be affected by a variety of risks and
factors including, without limitation: the risk that AIMCO will not be able to
complete its proposed merger with NHP Incorporated ("NHP"); national and local
economic conditions; the general level of interest rates; terms of governmental
regulations that affect AIMCO and interpretations of those regulations; the
competitive environment in which AIMCO operates; the risks related to
integrating NHP and other acquired businesses; financing risks, including the
risk that AIMCO's cash flow from operations may be insufficient to meet required
payments of principal and interest; real estate risks, including variations of
real estate values and the general economic climate in local markets and
competition for tenants in such markets; acquisition and development risks,
including the failure of acquisitions to perform in accordance with projections;
and possible environmental liabilities, including costs which may be incurred
due to necessary remediation of contamination of properties owned, acquired or
previously owned by AIMCO. In addition, AIMCO's continued qualification as a
REIT involves the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the "Code"). Readers should carefully
review AIMCO's financial statements and the notes thereto, as well as the risk
factors described herein and in the documents incorporated by reference herein.

S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS
PROSPECTUS SUPPLEMENT ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS
NOT EXERCISED.

THE COMPANY

GENERAL

Apartment Investment and Management Company (together with its
majority-owned subsidiaries and controlled entities, the "Company") is the
second largest owner and manager of multifamily apartment properties in the
United States, based on apartment unit data compiled by the National Multi
Housing Council as of January 1, 1997, with 186,993 apartment units owned or
under management as of September 30, 1997. As of September 30, 1997, the Company
owned or controlled a total of 28,773 units in 109 apartment properties (the
"Owned Properties"), had an equity interest in 87,182 units in 526 apartment
properties (the "Equity Properties"), and managed 71,038 units in 394 apartment
properties (the "Managed Properties," and, together with the Owned Properties
and the Equity Properties, the "AIMCO Properties"). In addition to the Managed
Properties, the Company manages all of the Owned Properties and a majority of
the Equity Properties. The AIMCO Properties are located in 42 states, the
District of Columbia and Puerto Rico. The Company conducts its operations
primarily through AIMCO Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"), and its subsidiaries. As of September 30, 1997, AIMCO
held approximately an 85% interest in the Operating Partnership. AIMCO has
elected to be taxed as a REIT for Federal income tax purposes.

RECENT DEVELOPMENTS

NHP ACQUISITION

Pursuant to a Stock Purchase Agreement, dated as of April 16, 1997 (the
"Stock Purchase Agreement"), AIMCO and its unconsolidated subsidiary, AIMCO/NHP
Holdings, Inc., a Delaware corporation ("ANHI"), have acquired an aggregate of
6,930,122 shares of common stock, par value $.01 per share ("NHP Common Stock"),
of NHP Incorporated, a Delaware corporation ("NHP"), representing approximately
53.4% of the shares of NHP Common Stock outstanding as of September 30, 1997
(the "NHP Stock Purchase"). NHP provides a broad array of real estate services
nationwide including property management and asset management. NHP also conducts
mortgage banking services through The WMF Group, Ltd., a Delaware corporation
and a wholly owned subsidiary of NHP ("WMF"). As of September 30, 1997, NHP's
management portfolio (which is included in the AIMCO Properties) included 732
properties containing 79,208 conventional units and 55,102 "affordable" units
(units benefiting from some form of interest rate or rental subsidy or otherwise
subject to governmental programs aimed at providing low and moderate income
housing) located in 38 states, the District of Columbia and Puerto Rico. Among
the properties it manages, NHP owns 12 properties containing 2,905 apartment
units.

AIMCO is seeking to acquire the remaining outstanding shares of NHP Common
Stock pursuant to a proposed merger (the "NHP Merger") of AIMCO/NHP Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of AIMCO ("Merger
Sub"), with and into NHP, with NHP being the surviving corporation after the
Merger and becoming a wholly owned subsidiary of AIMCO. The NHP Merger would be
effected pursuant to an Agreement and Plan of Merger, dated as of April 21, 1997
(the "Merger Agreement"), by and among AIMCO, NHP and Merger Sub. The NHP Merger
is subject to a number of conditions, including the approval of the stockholders
of both NHP and AIMCO. Accordingly, there can be no assurance that the proposed
NHP Merger will be completed. If completed, the NHP Merger is subject to a
number of risks. See "Risk Factors--Risks Associated with the NHP Acquisition"
and "Business and Growth Strategies--The NHP Acquisition."

S-3
<PAGE>
As soon as practicable following the NHP Merger, AIMCO will reorganize the
assets and operations of NHP (the "NHP Reorganization") which will result in
NHP's operations primarily being conducted through ANHI and/or one or more other
unconsolidated subsidiaries of AIMCO (together with ANHI, the "Unconsolidated
Subsidiaries").

Pursuant to rights distributed to NHP stockholders in May 1997, subject to
certain conditions, on the earlier of the effective time of the NHP Merger or
December 1, 1997, all of the outstanding shares of WMF common stock will be
distributed to NHP stockholders (the "WMF Spin-Off"). Shares of WMF common stock
issued to AIMCO and ANHI in the WMF Spin-Off will be transferred to the former
NHP stockholders from whom shares of NHP Common Stock were acquired pursuant to
the Stock Purchase Agreement.

NHP REAL ESTATE ACQUISITION

In June 1997, the Company acquired a group of companies (the "NHP Real
Estate Companies") previously owned by NHP that hold general and limited
partnership interests in partnerships that own 534 conventional and affordable
multifamily apartment properties (the "NHP Properties") containing 87,659 units,
a captive insurance subsidiary and certain related assets (the "NHP Real Estate
Acquisition"). The Company paid aggregate consideration of $54.8 million in cash
and warrants to purchase 399,999 shares of Class A Common Stock at an exercise
price of $36 per share.

The NHP Real Estate Acquisition involved three distinct investments in real
estate:

- The Company acquired general and certain limited partnership interests in
various partnerships that own 11,078 apartment units in 34 conventional
"Class A" properties (properties that management believes are in the top
10% in market rents and generally in a superior location, in each case,
when compared to competing properties) and "Class B" properties
(generally, properties between 3 and 15 years old, which management
believes are achieving rents 5% to 10% in excess of the average market
rents when compared to competing properties). AIMCO is presently in the
process of making tender offers to the limited partners of 26 of such
partnerships to acquire their partnership interests for an aggregate
amount of approximately $79 million. See "Business and Growth
Strategies--Growth Strategies--Acquisition Strategies--Increasing its
Interest in Partnerships."

- The Company acquired general and certain limited partnership interests in
various partnerships that own 9,996 apartment units in 44 "Class C"
apartment properties (properties that management estimates have a
remaining useful life of less than 20 years and will have a residual value
equal to the value of the underlying land).

- The Company also acquired general and certain limited partnership
interests in various partnerships that own 50,309 affordable housing units
and 15,004 Class C apartment units in 462 affordable and conventional
apartment properties. The Company's long-term strategy for the affordable
portfolio is to take advantage of potential opportunities from the
potential restructuring of U.S. Department of Housing and Urban
Development ("HUD") assistance or insurance programs, or to liquidate such
properties while continuing to realize management fees from the portfolio.
In addition, the Company believes that it may be able to significantly
increase its return from its affordable portfolio by improving operations
at some properties or by converting some properties to conventional
properties. See "Business and Growth Strategies--Growth
Strategies--Internal Growth Strategies--Conversion of Affordable
Properties; Improvement of Performance."

The Company is currently engaged in a reorganization (the "NHP Real Estate
Reorganization") of its interests in the NHP Real Estate Companies, which will
result in the vast majority of the NHP Properties being owned by a limited
partnership (the "Unconsolidated Partnership") in which the Company has a 99%
limited partnership interest and certain officers and directors of AIMCO have a
controlling 1% general partnership interest. Upon completion of the NHP Real
Estate Reorganization, the results of these NHP Properties will not be
consolidated with AIMCO's results.

S-4
<PAGE>
OTHER 1997 ACQUISITIONS

WINDWARD AT THE VILLAGES. In October, the Company purchased Windward at the
Villages Apartments ("Windward"), a 196-unit apartment community built in 1988,
located in West Palm Beach, Florida, for approximately $10.8 million. Windward
is adjacent to the Bear Lakes Country Club and Golf Course in the Villages of
Palm Beach Lakes master planned golf course community.

MORTON TOWERS. In September, the Company, through two subsidiary limited
partnerships in which the Company is the sole general partner and has an
aggregate interest of approximately 77%, acquired the Morton Towers apartments,
a 1,277-unit, twin tower high rise apartment complex built in 1960, located in
Miami Beach, Florida, for $63 million, including approximately 1.4 million
Partnership Common Units of the Operating Partnership ("OP Units") valued at $42
million. The Company expects to undertake a major renovation of the complex at
an estimated total cost of $35 million.

LOS ARBOLES. In September, the Company acquired Los Arboles Apartments, a
232-unit apartment community built in 1985, located in Chandler, Arizona, for
approximately $11.3 million. Los Arboles is adjacent to Vista del Lagos, a
200-unit apartment community in which the Company has an equity interest.

SAWGRASS. In July, the Company purchased Sawgrass Apartments, a 208-unit
apartment community built in 1989, located in Orlando, Florida, for
approximately $9.6 million. Sawgrass was formerly a Managed Property.

TUSTIN EAST VILLAGE/THE CALIFORNIAN. In June, the Company acquired Tustin
East Village and The Californian, two garden-style apartment communities
consisting of 292 units built in 1970, and Red Hill Plaza, an adjacent shopping
plaza built in 1970, located in Tustin, California, for $21.4 million, including
approximately 500,000 OP Units valued at $13.9 million. These properties are
contiguous to Brookside Apartments, another Owned Property, consisting of 336
units, purchased in April 1996 from the same seller, and are operated with
Brookside as one property.

THE VININGS. In June, the Company acquired The Vinings at the Waterways, a
180-unit luxury garden-style apartment community built in 1991, located in
Aventura, Florida, for approximately $16.4 million. The Vinings is located by a
yacht basin and marina directly accessing the Intracoastal Waterway and is also
adjacent to a commercial center.

STONEBROOK. In May, the Company acquired the Stonebrook Apartments, a
244-unit apartment community built in 1991, located in Orlando, Florida, for
approximately $11 million. Stonebrook is less than a mile from the location of a
proposed interchange on a beltway around Orlando and is near a regional airport
being expanded for commercial aviation.

BAY CLUB. In April, the Company acquired The Bay Club at Aventura, a
702-unit luxury high rise apartment complex, consisting of two towers built in
1990, located in Aventura, Florida, for approximately $71 million. The property
includes approximately 3.5 acres of land with permits to construct a third tower
consisting of 225 units. Aventura is a coastal city located near North Miami
Beach.

ADDITIONAL FINANCINGS

In August 1997, AIMCO sold 750,000 shares of newly issued Class B Cumulative
Preferred Stock, par value $.01 per share (the "Class B Preferred Stock"), to an
institutional investor for $75 million in cash in a private transaction. Holders
of the Class B Preferred Stock are entitled to receive, when, as and if declared
by AIMCO's Board of Directors, quarterly cash dividends per share equal to the
greater of (i) $1.78125 or (ii) the cash dividends declared on the number of
shares of Class A Common Stock into which one share of Class B Preferred Stock
is convertible. The Class B Preferred Stock is convertible at a conversion ratio
of 3.28407 shares of Class A Common Stock for each share of Class B Preferred
Stock (subject to anti-dilution adjustments). The Class B Preferred Stock is
senior to Class A Common Stock as to dividends and upon liquidation. The
proceeds from the sale of the Class B Preferred Stock were used to repay
outstanding indebtedness under the Company's

S-5
<PAGE>
revolving credit facility (the "Credit Facility") with Bank of America National
Trust and Savings Association ("Bank of America"), as agent for the banks
parties thereto, and for general business purposes.

Since August 1997, AIMCO has issued an aggregate of 5,052,418 shares of
Class A Common Stock to institutional investors for aggregate net proceeds of
approximately $157 million. Of the net proceeds of such offerings, AIMCO used
$114.3 million to purchase 5,717,000 shares of NHP Common Stock from ANHI, used
$7.0 million to purchase 351,975 additional shares of NHP Common Stock from a
third party pursuant to the Stock Purchase Agreement and contributed the
remaining $35.5 million to the Operating Partnership. ANHI used $74.3 million of
proceeds from its sale of NHP Common Stock to repay in full outstanding
borrowings (including accrued interest) under a short-term credit facility (the
"ANHI Credit Facility") that were incurred to acquire shares of NHP Common Stock
pursuant to the Stock Purchase Agreement, and distributed $40.0 million of such
proceeds to the Operating Partnership and its other shareholders. The Operating
Partnership used the amounts distributed to it by ANHI and contributed to it by
AIMCO to repay outstanding indebtedness under the Credit Facility and for
general business purposes.

WINTHROP PORTFOLIO ACQUISITION

On August 22, 1997, the Operating Partnership entered into a Purchase and
Sale Agreement (the "Purchase Agreement") with 27 limited partnerships
affiliated with Winthrop Financial Associates for the purchase of a portfolio of
35 multifamily residential properties (collectively, the "Winthrop Portfolio").
The Purchase Agreement provided the Operating Partnership with a "due diligence"
period to inspect the Winthrop Portfolio. On October 15, 1997, the Company
determined not to exercise its option to terminate the Purchase Agreement and,
as of such date, became committed, subject to the terms and conditions of the
Purchase Agreement, to purchase the Winthrop Portfolio.

The 35 garden-style apartment communities comprising the Winthrop Portfolio
are located in seven states, have an average age of 17 years and contain a total
of 8,175 apartment units. Fifteen of the apartment communities are located in
Arizona, with 2,602 units in Phoenix and 816 units in Tucson; eleven apartment
communities with 2,075 units are located throughout Texas; two apartment
communities with 1,223 units are located in Florida; two apartment communities
with 494 units are located in Michigan; three apartment communities with 536
units are located in Georgia; one apartment community with 293 units is located
in Illinois; and one apartment community with 136 units is located in North
Carolina.

The closing of the acquisition of the Winthrop Portfolio is expected to
occur on October 31, 1997, subject to customary closing conditions. The
aggregate purchase price for the Winthrop Portfolio, including estimated
transaction costs, is approximately $262 million. The Company will pay aggregate
consideration of $245.2 million in cash to the partnerships affiliated with
Winthrop Financial Associates, and assume $8.3 million in mortgage indebtedness,
to complete the purchase. The Company has also budgeted an additional $16
million in initial capital expenditures which will be incurred subsequent to the
acquisition of the Winthrop Portfolio.

S-6
<PAGE>
BUSINESS AND GROWTH STRATEGIES

OPERATING AND FINANCIAL STRATEGIES

The Company's operating and financing strategies to attempt to meet its
objective of providing long-term, predictable funds from operations ("FFO") per
share include the following:

- ACQUISITION OF PROPERTIES AT LESS THAN REPLACEMENT COST. The Company
attempts to acquire properties at a significant discount to their
replacement cost.

- GEOGRAPHIC DIVERSIFICATION. The Company operates in 42 states, the
District of Columbia and Puerto Rico. This geographic diversification
insulates AIMCO, to some degree, from inevitable downturns in any one
market.

- PRODUCT DIVERSIFICATION. The Company's portfolio of apartment properties
spans a wide range of apartment community types, both within and among
markets.

- CAPITAL REPLACEMENT. The Company believes that the physical condition and
amenities of its apartment communities are important factors in its
ability to maintain and increase rental rates. The Company allocates
approximately $300 annually per owned apartment unit for capital
replacements ("Capital Replacements") and reserves unexpended amounts for
future capital replacements.

- DEBT FINANCING. The Company's strategy is generally to incur debt to
increase its return on equity while maintaining acceptable interest
coverage ratios. The Company uses predominantly long-term, fixed-rate and
self-amortizing debt in order to avoid the refunding or repricing risks of
short-term borrowings.

- DISPOSITIONS. From time to time, the Company sells properties that do not
meet its return on investment criteria or that are located in areas where
the Company does not believe that the long-term neighborhood values
justify the continued investment in the properties.

- DIVIDEND POLICY. AIMCO pays dividends to share its profitability with its
stockholders. For the years ended December 31, 1996 and 1995 and the six
months ended June 30, 1997, AIMCO distributed 72.3%, 75.1% and 70.1%,
respectively, of FFO to its stockholders. It is the present policy of
AIMCO's Board of Directors to increase the dividend annually in an amount
equal to one-half the projected increase in FFO, adjusted for Capital
Replacements.

S-7
<PAGE>
GROWTH STRATEGIES

The Company seeks growth through two primary sources--acquisition and
internal expansion.

ACQUISITION STRATEGIES. The Company believes its acquisition strategies will
increase profitability and predictability of earnings by increasing its
geographic diversification, economies of scale and opportunities to provide
ancillary services to tenants at the AIMCO Properties. Since AIMCO's initial
public offering in July 1994 (the "IPO") through September 30, 1997, excluding
the NHP Real Estate Acquisition and the NHP Stock Purchase, the Company has
completed 25 acquisition transactions involving a total of 68 properties for an
aggregate purchase price of $714 million, including the assumption of $397
million of indebtedness. The Company acquires additional properties primarily in
three ways:

- DIRECT ACQUISITIONS. The Company may directly acquire individual
properties or portfolios and controlling interests in entities that own or
control such properties or portfolios. During the nine months ended
September 30, 1997, in addition to the NHP Real Estate Acquisition and the
NHP Stock Purchase, the Company has directly acquired seven apartment
properties for a total consideration of $185 million, consisting of $56
million in cash, approximately 1.9 million OP Units valued at $56 million,
and the assumption of $73 million of indebtedness.

- ACQUISITION OF MANAGED PROPERTIES. The Company believes that its property
management operations support its acquisition activities. Since the IPO,
the Company has acquired from its managed portfolio 12 properties
comprising 3,530 units for $129 million.

- INCREASING ITS INTEREST IN PARTNERSHIPS. For properties where the Company
owns a general partnership interest in the property-owning partnership,
AIMCO may seek to acquire, subject to its fiduciary duties to the
partnership, the outstanding limited partnership interests for cash or, in
some cases, in exchange for OP Units. The Company has completed tender
offers with respect to 25 partnerships and purchased additional limited
partnership interests in the partnerships for a combination of cash and OP
Units.

INTERNAL GROWTH STRATEGIES. The Company pursues internal growth primarily
through the following strategies:

- REVENUE INCREASES. The Company increases rents where feasible and seeks to
improve occupancy rates. AIMCO's "same store" revenues from the Owned
Properties (based on properties owned from period to period) have grown by
2.8% and 3.5%, respectively, for the three months and six months ended
June 30, 1997, as compared to the three months and the six months ended
June 30, 1996.

- EXPANSION OF PROPERTIES. The Company believes that expansion within or
adjacent to existing AIMCO Properties also provides growth opportunities
at lower risk than new development. Such expansion can offer cost
advantages to the extent common area amenities and on-site management
personnel can service the property expansions.

PROPERTY MANAGEMENT STRATEGIES

AIMCO seeks to improve the operating results from its property management
business by, among other methods, combining centralized financial control and
uniform operating procedures with localized property management decision-making
and market knowledge. AIMCO's management operations are organized into 13
regional hubs, each supervised by a Regional Vice President, who has, on
average, 17 years of experience in apartment management.

S-8
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock offered hereby... 7,000,000 shares

Class A Common Stock to be outstanding
after the offering (1).............. 35,274,739 shares

Use of proceeds....................... AIMCO will use approximately $23 million of net
proceeds from the Offering to repay an intercompany
loan from the Operating Partnership, and will
contribute all of the remaining approximately $218.5
million of net proceeds to the Operating
Partnership. The Operating Partnership will use such
net proceeds (together with the proceeds from the
repayment of the intercompany loan and any net
proceeds of any exercise of the over-allotment
option) for the repayment of outstanding
indebtedness and for general business purposes. See
"Use of Proceeds."

New York Stock Exchange symbol........ "AIV"
</TABLE>

- ---------

(1) Excludes (i) 4,936,232 shares of Class A Common Stock which may be issued in
exchange for 4,936,232 OP Units which may be tendered for redemption; (ii)
325,000 shares of Class A Common Stock issuable upon conversion of 325,000
shares of AIMCO's Class B Common Stock, $.01 par value per share ("Class B
Common Stock"), the holders of which are all members of the Company's senior
management, if certain performance criteria are met; (iii) 953,645 shares of
Class A Common Stock issuable upon exercise of outstanding options and
warrants; (iv) 2,463,053 shares of Class A Common Stock which may be issued
upon conversion of 750,000 shares of Class B Preferred Stock; and (v) up to
5,466,975 shares of Class A Common Stock issuable in connection with the NHP
Merger (assuming the issuance of 619,623 shares of Class A Common Stock as a
result of the exercise of options to purchase NHP Common Stock). See
"Business and Growth Strategies--The NHP Acquisition."

S-9
<PAGE>
SUMMARY PRO FORMA AND HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table sets forth summary pro forma and historical financial
and operating information for AIMCO. The Pre-Merger pro forma financial and
operating information gives effect to the NHP Stock Purchase, the NHP Real
Estate Acquisition and a number of other transactions completed by AIMCO prior
to the NHP Merger (collectively, the "Pre-Merger Pro Forma Transactions"). The
Merger pro forma financial and operating information gives effect to the
Pre-Merger Pro Forma Transactions, the NHP Merger, the WMF Spin-Off and the NHP
Reorganization, assuming that ANHI elects to receive 0.37383 shares of Class A
Common Stock and $10 in cash (the "Mixed Consideration") for each share of NHP
Common Stock and all other NHP stockholders elect to receive 0.74766 shares of
Class A Common Stock (the "Stock Consideration") for each share of NHP Common
Stock in the NHP Merger (collectively, the "Merger Pro Forma Transactions"). The
pro forma financial and operating information set forth below should be read in
conjunction with, and is qualified in its entirety by, the historical and pro
forma financial statements and notes thereto of AIMCO, NHP, the NHP Real Estate
Companies, NHP Southwest Partners, L.P., the NHP New LP Entities (as defined in
Note 1 of such financial statements included in AIMCO's Current Report on Form
8-K dated June 3, 1997, as amended), the NHP Borrower Entities (as defined in
Note 1 of such financial statements included in AIMCO's Current Report on Form
8-K dated June 3, 1997, as amended), The Bay Club at Aventura, the Morton Towers
apartments and the Thirty-five Acquisition Properties (which represent the
Winthrop Portfolio), all of which are incorporated by reference herein. The
summary historical financial information for the years ended December 31, 1996
and 1995 is based on the audited financial statements of AIMCO incorporated by
reference herein. The summary historical financial information for AIMCO for the
six months ended June 30, 1997 and 1996 has been prepared from unaudited
historical financial data incorporated by reference herein. In the opinion of
the management of AIMCO, the operating data for the six months ended June 30,
1997 and 1996 include all adjustments (consisting only of normally recurring
adjustments) necessary to present fairly the information set forth therein. The
results for the six months ended June 30, 1997 are not necessarily indicative of
the results to be obtained for the year ending December 31, 1997. The following
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the historical
financial statements of AIMCO and notes thereto incorporated by reference
herein.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
FOR THE SIX MONTHS ENDED JUNE 30, DECEMBER 31,
------------------------------------------------------------- --------------------------
1997 1996
---------------------------------------------- -----------
PRO FORMA
----------------------------------
PRE-
1996 HISTORICAL MERGER MERGER 1995 HISTORICAL
------------- ---------- ---------------- ---------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
(RESTATED)(A) (RESTATED)(A)
OPERATING DATA:
Income from rental property
operations.......................... $ 17,700 $ 30,779 $ 44,454 $ 44,344 $ 27,483 $ 39,814
Income from service company
business............................ 641 2,031 1,173 535 1,973 1,717
Income (loss) before minority interest
in Operating Partnership,
extraordinary item and gain on sale
of property ........................ 7,078 11,733 10,455 12,994 14,988 15,629
Net income (loss)..................... $ 5,955 $ 9,848 $ 8,750(h) $ 11,302(i)(j) $ 13,375 $ 12,984

PER SHARE DATA:
Net income per common share and common
share equivalents................... $ 0.49 $ 0.53 $ 0.21(h) $ 0.26(i)(j) $ 0.86 $ 1.04
Dividends paid per common share....... $ 0.85 $ 0.925 $ 0.925 $ 0.925 $ 1.66 $ 1.70
Weighted average number of common
shares and common share equivalents
outstanding......................... 12,039 18,559 28,281 33,307 9,579 12,427

PRO FORMA
--------------------------------
PRE-
MERGER MERGER
--------------- ---------------
<S> <C> <C>

OPERATING DATA:
Income from rental property
operations.......................... $ 74,241 $ 72,275
Income from service company
business............................ 2,134 856
Income (loss) before minority interest
in Operating Partnership,
extraordinary item and gain on sale
of property ........................ 14,284 16,570
Net income (loss)..................... $ 12,231(k) $ 14,002(i)(l)
PER SHARE DATA:
Net income per common share and common
share equivalents................... $ 0.26(k) $ 0.27(i)(l)
Dividends paid per common share....... $ 1.70 $ 1.70
Weighted average number of common
shares and common share equivalents
outstanding......................... 26,592 31,638
</TABLE>

S-10
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
FOR THE SIX MONTHS ENDED JUNE 30, DECEMBER 31,
------------------------------------------------------------- --------------------------
1997 1996
---------------------------------------------- -----------
PRO FORMA
----------------------------------
PRE-
1996 HISTORICAL MERGER MERGER 1995 HISTORICAL
------------- ---------- ---------------- ---------------- ------------- -----------
(RESTATED)(A) (RESTATED)(A)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (END OF PERIOD):
Real estate, before accumulated
depreciation........................ $ 551,826 $1,102,073 $1,460,289 $1,370,933 $ 477,162 $ 865,222
Cash and cash equivalents............. 2,328 21,521 21,521 21,521 2,379 13,170
Total assets.......................... 540,117 1,272,890 1,742,971 1,730,506 480,361 834,813
Total mortgages and notes payable..... 307,612 644,457 836,405 794,796 268,692 522,146
Minority interest in other
partnerships........................ -- 6,625 19,351 19,166 -- 10,386
Minority interest in Operating
Partnership......................... 41,525 63,366 105,396 105,396 30,376 58,777
Stockholders' equity(b)............... 178,059 388,477 618,395 750,839 169,032 222,889
CASH FLOW DATA:
Cash provided by operating
activities(c)....................... $ 25,209 $ 25,035 $ 38,786 $ 40,161 $ 25,911 $ 38,806 $ 62,235
Cash used in investing
activities(d)....................... (18,074) (108,134) (5,423) (5,291) (60,821) (88,144) (10,847)
Cash provided by (used in) financing
activities(e)....................... (7,186) 91,450 (33,209) (37,619) 30,145 60,129 (61,362)
OTHER DATA:
Funds from Operations(f).............. $ 16,368 $ 28,441 $ 37,182 $ 49,763(i) $ 25,285 $ 35,185 $ 67,948
Weighted average number of common
shares and OP Units
outstanding(g)...................... 14,303 21,590 35,591 40,616 11,461 14,994 34,435

PRO FORMA
--------------------------------
PRE-
MERGER MERGER
--------------- ---------------

<S> <C>
BALANCE SHEET DATA (END OF PERIOD):
Real estate, before accumulated
depreciation........................
Cash and cash equivalents.............
Total assets..........................
Total mortgages and notes payable.....
Minority interest in other
partnerships........................
Minority interest in Operating
Partnership.........................
Stockholders' equity(b)...............
CASH FLOW DATA:
Cash provided by operating
activities(c)....................... $ 60,878
Cash used in investing
activities(d)....................... (10,582)
Cash provided by (used in) financing
activities(e)....................... (69,466)
OTHER DATA:
Funds from Operations(f).............. $ 89,050(i)
Weighted average number of common
shares and OP Units
outstanding(g)...................... 39,480
</TABLE>

- -------------

(a) In the second quarter of 1996, AIMCO reorganized the ownership of its
subsidiary service company, whereby the Operating Partnership (i) owns all
of the non-voting preferred stock of the service company, Property Asset
Management Services, Inc., a Delaware corporation ("PAMS Inc."),
representing a 95% economic interest, and (ii) owns the 1% general
partnership interest in Property Asset Management Services, L.P., a Delaware
limited partnership ("PAMS LP"). PAMS Inc. owns the 99% limited partnership
interest in PAMS LP. Substantially all the activity of PAMS Inc. is
conducted by PAMS LP. Because the Operating Partnership owns 95% of the
economic value of PAMS Inc. and also controls the general partnership
interest in PAMS LP, thereby controlling the activity of the partnership,
the service company is consolidated. Prior to the reorganization, AIMCO
reported the service company business on the equity method. The restatement
has no impact on net income, but does increase third party and affiliate
management and other income, management and other expenses, amortization of
management company goodwill and depreciation of non-real estate assets.
AIMCO has restated the balance sheet as of December 31, 1995, and the
statements of income and statements of cash flows for the year ended
December 31, 1995 to reflect the change.

(b) Subsequent to June 30, 1997, AIMCO issued 750,000 shares of Class B
Preferred Stock and 5,052,418 shares of Class A Common Stock for aggregate
net proceeds of approximately $231 million. See "Business and Growth
Strategies--Recent Financings."

(c) Pro forma cash provided by operating activities represents income before
income allocable to minority interests, plus depreciation and amortization
less the non-cash portion of AIMCO's equity in earnings of unconsolidated
subsidiaries. The pro forma amounts do not include adjustments for changes
in working capital resulting from changes in current assets and current
liabilities as there is no historical data available as of both the
beginning and end of each period presented.

(d) On a pro forma basis, cash used in investing activities represents the
minimum annual provision for capital replacements of $300 per owned
apartment unit.

(e) Pro forma cash used in financing activities represents estimated dividends
and distributions to be paid based on AIMCO's historical dividend rate of
$1.70 and $0.925 per share for the year ended December 31, 1996 and the six
months ended June 30, 1997, respectively, and outstanding shares of Class A
Common Stock and OP Units, as well as estimated dividends to be paid based
on the rate of $7.125 and $3.5625 per share for the year ended December 31,
1996 and the six months ended June 30, 1997, respectively, and on
outstanding shares of Class B Preferred Stock.

(f) The Company's management believes that the presentation of FFO, when
considered with the financial data determined in accordance with generally
accepted accounting principles ("GAAP"), provides useful measures of AIMCO's
performance. However, FFO does not represent cash flow and is not
necessarily indicative of cash flow or liquidity available to AIMCO, nor
should it be considered as an alternative to net income as an indicator of
operating performance. The Board of Governors of the National Association of
Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss),
computed in accordance with GAAP, excluding gains and losses from debt
restructuring and sales of property, plus real estate related depreciation
and amortization (excluding amortization of financing costs), and after
adjustments for unconsolidated partnerships and joint ventures. In addition,
AIMCO adjusts FFO for minority interest in the Operating Partnership,
amortization of management company goodwill, the non-cash deferred portion
of the income tax provision for unconsolidated subsidiaries and the payment
of dividends on preferred stock. AIMCO's management believes that
presentation of FFO provides investors with an industry accepted measurement
which helps facilitate an understanding of AIMCO's ability to meet required
dividend payments, capital expenditures and principal payments on its debt.
There can be no assurance that AIMCO's basis of computing FFO is comparable
with that of other REITs.

S-11
<PAGE>
The following is a reconciliation of Income before minority interest in
Operating Partnership to FFO:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------- -------------------------------------
1997 1996
------------------------------------- ------------------------
PRO FORMA PRO FORMA
------------------------ -----------
PRE- PRE-
1996 HISTORICAL MERGER MERGER 1995 HISTORICAL MERGER
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(RESTATED) (RESTATED)

OPERATING ACTIVITIES
Income before minority interest in
Operating Partnership............. $ 7,078 $ 11,464 $ 10,455 $ 12,994 $ 14,988 $ 15,673 $ 14,284
Gain on disposition of property..... -- -- -- -- -- (44) --
Extraordinary item.................. -- 269 -- -- -- -- --
Real estate depreciation, net of
minority interest in other
partnerships...................... 9,060 13,250 21,385 19,881 15,038 19,056 41,621
Amortization of management company
goodwill.......................... 230 474 1,164 598 428 500 3,180
Equity in earnings of Unconsolidated
Subsidiaries:
Real estate depreciation............ -- 1,263 803 2,307 -- -- 1,606
Amortization of recoverable amount
of management contracts........... -- 150 83 3,630 -- -- 261
Amortization of goodwill related to
service provider business......... -- -- -- 950 -- -- --
Deferred income taxes............... -- 874 57 600 -- -- 376
Real estate depreciation from
investments in partnerships....... -- 697 5,907 11,475 -- -- 11,964
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net funds provided by operating
activities........................ 16,368 28,441 39,854 52,435 30,454 35,185 73,292
----------- ----------- ----------- ----------- ----------- ----------- -----------

FINANCING ACTIVITIES
Payment of dividend on Preferred
Stock............................. -- -- (2,672) (2,672) (5,169) -- (5,344)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net funds used in financing
activities........................ -- -- (2,672) (2,672) (5,169) -- (5,344)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Funds from Operations............... $ 16,368 $ 28,441 $ 37,182 $ 49,763 $ 25,285 $ 35,185 $ 67,948
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------

MERGER
-----------
<S> <C>

OPERATING ACTIVITIES
Income before minority interest in
Operating Partnership............. $ 16,570
Gain on disposition of property..... --
Extraordinary item.................. --
Real estate depreciation, net of
minority interest in other
partnerships...................... 38,533
Amortization of management company
goodwill.......................... 1,256
Equity in earnings of Unconsolidated
Subsidiaries:
Real estate depreciation............ 4,694
Amortization of recoverable amount
of management contracts........... 7,261
Amortization of goodwill related to
service provider business......... 1,900
Deferred income taxes............... 3,600
Real estate depreciation from
investments in partnerships....... 20,580
-----------
Net funds provided by operating
activities........................ 94,394
-----------
FINANCING ACTIVITIES
Payment of dividend on Preferred
Stock............................. (5,344)
-----------
Net funds used in financing
activities........................ (5,344)
-----------
Funds from Operations............... $ 89,050
-----------
-----------
</TABLE>

(g) After a one year holding period, OP Units may be tendered for redemption at
the option of the holder and, upon tender, may be acquired by AIMCO 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 adjustment).

(h) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Pre-Merger Pro Forma Transactions,
net income would be $16,906, or $0.40 per common share.

(i) AIMCO has amortized goodwill associated with the NHP Merger using the
straight line method over 20 years. In connection with a review of the proxy
material relating to the NHP Merger, the Securities and Exchange Commission
(the "SEC") has issued to AIMCO a comment letter that suggests a five year
life for management company goodwill, rather than the 20 year life utilized
by AIMCO. If the life of the management company goodwill were changed to
five years, for the six months ended June 30, 1997, net income (loss) and
net income (loss) per common share and common share equivalent on a pro
forma (Merger) basis would have been $1,491 and $0.04, respectively ($9,648
and $0.24, respectively, on a pro forma (Merger) basis giving effect to the
Offering and the application of the proceeds thereof); and for the year
ended December 31, 1996, net income (loss) and net income (loss) per common
share and common share equivalent on a pro forma (Merger) basis would have
been $(5,361) and $(0.17), respectively ($9,993 and $0.26, respectively, on
a pro forma (Merger) basis giving effect to the Offering and the application
of net proceeds thereof). Since AIMCO's policy is to adjust FFO for
amortization of goodwill, the change in life of such goodwill would not have
any material impact on FFO for the periods presented.

(j) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Merger Pro Forma Transactions, net
income would be $19,578, or $0.42 per common share. If all the NHP
stockholders (excluding ANHI) elect Mixed Consideration in connection with
the Merger, on a pro forma basis, giving effect to the Offering and the
application of the net proceeds thereof, as well as the Merger Pro Forma
Transactions, net income would be $17,825, or $0.40 per common share.

(k) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Pre-Merger Pro Forma Transactions,
net income would be $27,430, or $0.66 per common share.

(l) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Merger Pro Forma Transactions, net
income would be $29,621, or $0.63 per common share. If all the NHP
stockholders (excluding ANHI) elect Mixed Consideration in connection with
the NHP Merger, on a pro forma basis, giving effect to the Offering and the
application of the net proceeds thereof, as well as the Merger Pro Forma
Transactions, net income would be $26,128, or $0.57 per common share.

S-12
<PAGE>
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 or
incorporated by reference in this Prospectus Supplement, potential investors
should consider, among other things, the following factors:

RISKS ASSOCIATED WITH THE NHP ACQUISITION

The NHP Stock Purchase, the NHP Merger and the NHP Real Estate Acquisition
(collectively, the "NHP Acquisition") constitute the largest acquisition ever
undertaken by the Company, involving an aggregate purchase price in excess of
$450 million. In addition to the risks typically associated with acquisitions
generally (see "--Risks of Acquisition and Development Activities"), the NHP
Acquisition involves the following risks and uncertainties:

RISKS OF AIMCO'S INABILITY TO EFFECT CERTAIN BUSINESS COMBINATIONS AND OTHER
TRANSACTIONS. As a result of the NHP Stock Purchase, AIMCO is an "interested
stockholder" of NHP for the purpose of Section 203 of the Delaware General
Corporation Law (the "DGCL"). Accordingly, if the Merger Agreement is not
adopted and authorized at a special meeting of NHP stockholders by the required
vote, AIMCO may not, prior to February 13, 2000, enter into any "business
combination" transaction with NHP, unless the transaction is approved by holders
of at least 66 2/3% of the outstanding shares of NHP Common Stock, excluding
shares deemed to be owned by AIMCO or its affiliates. For these purposes, a
"business combination" includes any merger or consolidation of NHP or its
subsidiaries with AIMCO or its affiliates; any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of assets of NHP or its subsidiaries to
AIMCO with a value of 10% or more of the total assets of NHP; transfers or
issuances of stock of NHP or its subsidiaries to AIMCO; and certain other
transactions that may provide financial benefits to AIMCO.

If the NHP Merger is not approved, the prohibition on business combinations
contained in Section 203 may prevent AIMCO from taking a variety of actions that
may be necessary to optimize AIMCO's corporate structure for operating reasons,
tax reasons and for purposes of complying with the REIT rules following the NHP
Stock Purchase and the NHP Real Estate Acquisition. Such actions may include,
for example, certain aspects of the NHP Reorganization, a liquidation of NHP, a
merger of NHP with another AIMCO subsidiary, a transfer of assets from NHP or
its subsidiaries to AIMCO or its subsidiaries or guarantees by NHP or its
subsidiaries of loans made to AIMCO or its subsidiaries. The inability of AIMCO
to engage in such transactions could have a material adverse effect on AIMCO's
results of operations and its ability to realize the potential benefits of the
NHP Acquisition.

RISKS ASSOCIATED WITH INTEGRATING NHP AND OTHER ACQUIRED BUSINESSES. The
integration of NHP's business with AIMCO's may place a significant burden on
AIMCO's management. Such integration is subject to risks commonly encountered in
making such acquisitions, including, among others, loss of key personnel of NHP,
the difficulty associated with assimilating the personnel and operations of NHP,
the disruption of AIMCO's ongoing business and acquisition strategy, the
difficulty in maintaining uniform standards, controls, procedures and policies,
and the impairment of AIMCO's reputation. No assurance can be given that the
anticipated benefits from the NHP Merger will be realized or that AIMCO will be
able to integrate the two businesses successfully. Failure of AIMCO to integrate
the two businesses successfully could have a material adverse effect on AIMCO's
results of operations. Substantial growth in AIMCO's portfolio as a result of
recent and possible future acquisitions of businesses may involve similar
burdens and risks.

RISK OF TERMINATION OF OXFORD CONTRACTS. Pursuant to contracts among
certain entities and individuals associated with Oxford Realty Financial Group,
Inc. and Oxford Holdings Corporation (collectively "Oxford") and NHP, NHP
manages a portfolio of properties (the "Oxford Properties") controlled by
Oxford. The management contracts for individual properties (the "Oxford
Management Contracts") have terms of one year and provide for management fees
ranging from 3.25% to 9% of each property's rental revenue. Unless 30 days'
notice of non-renewal is provided by Oxford to NHP, the Oxford Management
Contracts automatically renew for additional one year periods. Such contracts
are terminable for failure by NHP to meet certain financial

S-13
<PAGE>
performance standards with respect to the management of individual properties,
and for cause in certain circumstances, including material breaches of NHP's
obligations under the contracts. However, NHP possesses voting rights with
respect to certain Oxford entities that NHP believes prevent Oxford from
terminating or failing to renew the Oxford Management Contracts without NHP's
consent, except in the event of a sale of the managed Oxford Property. In
connection with the NHP Acquisition, Oxford has indicated that it believes it
has the right not to renew the Oxford Management Contracts without NHP's
consent. AIMCO and NHP believe these assertions are without merit. Although
AIMCO and NHP intend to vigorously oppose any attempt by Oxford to terminate or
not to renew the Oxford Management Contracts, there can be no assurance that
Oxford will not prevail in any such attempt.

NHP received $12.9 million of management fees from management of the Oxford
Properties in 1996 and $6.5 million in the first six months of 1997. The Stock
Purchase Agreement provides that the sellers thereunder will indemnify AIMCO
against certain losses in excess of $3 million arising from the termination,
cancellation or non-renewal of any property management contract, including
losses related to the Oxford Management Contracts. This indemnification
obligation is subject to a number of exceptions and qualifications. Termination
of the Oxford Management Contracts could have a material adverse effect on NHP's
results of operations.

POSSIBLE CONFLICT OF INTERESTS; TRANSACTIONS WITH AFFILIATES.

The Company presently manages the Managed Properties through the Management
Subsidiaries and NHP. In order to satisfy certain REIT requirements, the
ownership of PAMS Inc. consists of the Operating Partnership holding non-voting
preferred stock that represents a 95% economic interest, and certain officers
and/or directors of the Company holding, directly or indirectly, all of the
voting common stock, representing a 5% economic interest. In addition, PAMS LP
provides property management services with respect to certain Managed Properties
in which certain officers and/or directors of the Company 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
arms'-length basis, AIMCO 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.

In order to satisfy certain requirements of the Code with respect to AIMCO's
continued qualification as a REIT, ANHI, which is the holder of 779,073 shares
of NHP Common Stock, representing approximately 6.0% of the shares outstanding
as of August 31, 1997, has an ownership structure that is similar to that of
PAMS Inc. described above. Upon completion of the NHP Real Estate
Reorganization, the vast majority of the assets of the NHP Real Estate Companies
will be owned by the Unconsolidated Partnership, in which certain officers
and/or directors of AIMCO will have a controlling interest (with a 1% economic
interest). Following consummation of the NHP Merger and the NHP Reorganization,
the operations of NHP will be conducted by ANHI and/or other Unconsolidated
Subsidiaries, in which certain officers and/or directors of AIMCO will have a
controlling interest (with an economic interest of between 1% and 5%). As a
result of the ownership interest held by certain officers and/or directors of
AIMCO in PAMS Inc., the Unconsolidated Partnership, ANHI and the other
Unconsolidated Subsidiaries, certain conflicts of interest may arise with
respect to such persons in transactions involving such entities or the assets
held by such entities. For example, in order to acquire an interest in such
entities, such persons are required to contribute assets to such entities in
exchange therefor. Although AIMCO believes that such contributions, and any
additional contributions that have been made to maintain a particular percentage
interest, have been made on terms that were fair to AIMCO and such entities,
such transactions were not made at arms'-length, AIMCO in some instances did not
obtain independent valuations of such entities and there can be no assurance
that contributions by such individuals to such entities were made in amounts
which reflected the market value of the associated economic interest. In
addition, because AIMCO does not have voting control over PAMS Inc., the
Unconsolidated Partnership, ANHI or the other Unconsolidated Subsidiaries, AIMCO
may not be able to cause such entities to take actions that would be in the
interest of AIMCO and its stockholders or prevent other actions that are not in
the interest of AIMCO and its stockholders.

S-14
<PAGE>
SIGNIFICANT INDEBTEDNESS; REFINANCING RISKS.

The Company has significant amounts of debt outstanding and, accordingly, 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, may not be refinanced or that the terms of any
refinancing will not be as favorable as the terms of existing indebtedness. As
of June 30, 1997, 97% of the Company's Owned Properties, and 88% of its total
assets, were encumbered by debt, and the Company (excluding ANHI) had total
outstanding indebtedness of $644.5 million, $611.5 million of which was secured
by Owned Properties and other assets, including $70.9 million of outstanding
borrowings under the Credit Facility and $33.0 million of outstanding unsecured
borrowings. The Credit Facility restricts AIMCO's ability to effect certain
mergers, business consolidations and asset sales, imposes minimum net worth
requirements, and requires AIMCO to maintain a ratio of debt to gross asset
value of no more than 0.6 to 1, an interest coverage ratio of at least 2.0 to 1
and a debt service coverage ratio of at least 1.8 to 1. Additionally, the Credit
Facility limits AIMCO from distributing more than 80% of funds from operations
to AIMCO stockholders. Failure by AIMCO to make payments exceeding $2.0 million
under any other debt agreement (except intracompany agreements), failure to
perform or observe covenants or conditions under an intracompany subordination
agreement entered into in connection with the Credit Facility and events of
default resulting in acceleration under AIMCO's other credit agreements, among
other events, are considered defaults under the Credit Facility. General Motors
Acceptance Corporation has made 35 loans (the "GMAC Loans"), with an aggregate
outstanding principal balance of $217.4 million at June 30, 1997, to 35 property
owning partnerships of the Company, each of which is secured by the underlying
Owned Property of such partnership. Each GMAC Loan is cross-collateralized with
certain other GMAC Loans. Other than the GMAC Loans, none of the Company's debt
is subject to cross-collateralization provisions. AIMCO's Amended and Restated
Articles of Incorporation (the "AIMCO Charter") does not limit the amount of
indebtedness which may be incurred by AIMCO and its subsidiaries. At June 30,
1997, ANHI had outstanding indebtedness totaling $214.7 million, consisting of
$72.6 million of indebtedness outstanding under the ANHI Credit Facility (which
has been repaid), $71.1 million of unsecured indebtedness (including $65.0
million outstanding under NHP's credit facility) and $71.0 million of
indebtedness secured by real estate wholly owned by NHP. 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 any such 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 or
other assets on disadvantageous terms, potentially resulting in losses and
adverse effects on cash flow from operating activities. 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 the Credit Facility, bear
interest at a variable rate. In addition, as of June 30, 1997, the Company
(excluding NHP) had approximately $122.9 million of other indebtedness that
bears interest at a variable rate. As of June 30, 1997, approximately 81% of the
Company's total indebtedness (excluding NHP) was subject to fixed interest rates
and 19% was subject to variable interest rates. Although, as described below,
the Company has certain hedging arrangements in place, increases in interest
rates could increase the Company's interest expense and adversely affect cash
flow. As of June 30, 1997, NHP had approximately $65.0 million of variable rate
indebtedness, representing 45.7% of NHP's outstanding indebtedness. No hedging
arrangements are in place with respect to NHP's variable rate indebtedness,
although NHP has purchased a nominal interest rate cap agreement protecting it
from interest rate fluctuations above 13.25%. Increases in interest rates would
increase NHP's interest expense and adversely affect NHP's cash flow.

S-15
<PAGE>
RISKS RELATED TO INTEREST RATE HEDGING ARRANGEMENTS.

From time to time, the Company enters into agreements to reduce the risks
associated with increases in interest rates. Although these agreements provide
the Company with some protection against rising interest rates, these agreements
also reduce the benefits to the Company when interest rates decline. In March
1997, the Company entered into an interest rate hedging agreement (the "Hedge")
with an investment banking company in anticipation of refinancing certain
indebtedness. The Hedge, which was extended to mature on December 3, 1997, has a
notional amount of $100 million and fixes the interest rate of the anticipated
refinancing at 7.019%. Based on the fair value of the Hedge at September 24,
1997, the Company has an unrealized loss of approximately $7.6 million, which,
when amortized, will result in an effective interest rate of approximately 7.80%
over the life of the refinanced debt. In addition, in September 1997, AIMCO
entered into a second interest rate agreement (the "September Hedge"), with the
same investment banking company, having a notional amount of $75 million, in
anticipation of refinancing certain indebtedness. The September Hedge matures on
December 4, 1997, and fixes the interest rate of the anticipated refinancing at
6.179%. There can be no assurance that the above described indebtedness will be
refinanced or that the Company will be able to enter into other hedging
arrangements to replace the Hedge or the September Hedge.

Interest rate hedging arrangements, including the Hedge and the September
Hedge, may expose the Company to certain risks. Interest rate movements during
the term of interest rate hedging arrangements may result in a gain or loss on
the Company's investment in the hedging arrangement. In addition, if a hedging
arrangement is not indexed to the same rate as the indebtedness that is hedged,
the Company may be exposed to losses to the extent that the rate governing the
indebtedness and the rate governing the hedging arrangement change independently
of each other. Finally, nonperformance by the other party to the hedging
arrangement may result in credit risks to the Company. In order to minimize
counterparty credit risk, the Company's policy is to enter into hedging
arrangements only with large financial institutions that maintain an investment
grade credit rating.

RISKS RELATED TO INVESTMENT IN AND MANAGEMENT OF REAL ESTATE.

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 and Equity 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 and Equity Properties would also be adversely affected if a
significant number of tenants were unable to meet their rent payment obligations
when due or if apartments could not be rented on favorable terms. Certain
significant expenditures associated with real property investments (such as debt
service, 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 and Equity
Properties do not generate income sufficient to meet operating expenses,
including debt service and capital expenditures, the Company's income, and
AIMCO's 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 and Equity Properties could also
adversely affect the Company's income from its Managed Properties by reducing
gross receipts for such properties.

ILLIQUIDITY OF REAL ESTATE. Investments in real estate or partnerships
which own real estate may be illiquid. As a result, the Company may be unable to
vary its portfolio promptly in response to changes in economic or other
conditions. In addition, the Code limits the ability of AIMCO, as a REIT, to
sell properties held for fewer than four years.

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OPERATING RISKS. The AIMCO 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 the AIMCO 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 also limit the extent to
which rents may be increased without decreasing occupancy rates.

COMPETITION. There are numerous housing alternatives that compete with the
AIMCO Properties in attracting residents. Such properties compete directly with
other multifamily rental apartments and single family homes that are available
for rent in the markets in which such properties are located. Such properties
also compete for residents with new and existing homes and condominiums. The
ability of the Company to lease apartment units and the level of rents charged
is determined in large part by the number of competitive properties in the local
market. Numerous real estate companies compete with the Company in each of its
market areas in acquiring, developing and managing multifamily apartment
properties and seeking tenants to occupy their properties and the Company's
market share is small in each of its market areas. In addition, numerous
property management companies compete with the Company in the markets where the
Managed Properties are located.

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, or
limit the ability of the Company to increase, rental revenue or increase
operating costs in particular markets.

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 or management of the AIMCO Properties, the Company
could be potentially liable for environmental liabilities or costs associated
with its properties or properties it may in the future acquire or manage.

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 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 the ownership,
operation or 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 other AIMCO Properties. AIMCO has developed and
implemented operations and maintenance programs, as appropriate, that establish
operating procedures with respect to the ACMs at most of the Owned Properties,
and intends to develop and implement, as appropriate, such programs at AIMCO
Properties that do not have such programs.

Certain of the Owned Properties, and some of the other AIMCO Properties, are
located on or near properties that contain or 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 AIMCO Properties. Such
hazardous substances have been released at certain Owned

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Properties and, in at least one case, have migrated from an off-site location
onto the Company's property. 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 City of Austin (the "City"), the former landfill
operator, has assumed responsibility for conducting all investigation and
remedial activities to date associated with the methane and other landfill gas.
The remediation of the landfill gas is now substantially complete, and the Texas
Natural Resources Conservation Commission (the "TNRCC") has 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 contingency plan of
passive methane gas venting may be implemented by the City. The City has also
conducted testing on the Company's Montecito property to determine whether, and
to what extent, groundwater has been impacted. Based on test reports received to
date by the Company, the groundwater does not appear to be contaminated at
actionable levels. The Company has not incurred and does not expect to incur
liability for the landfill investigation and remediation; however, AIMCO has
relocated some of its tenants and has installed a venting system according to
the TNRCC's specifications under the building slabs, in connection with its
present raising of four of its buildings, in order to install stabilizing piers
thereunder, at an estimated total cost of approximately $573,000, which cost is
primarily for the restabilization. The Company anticipates that the construction
in process will be completed in January 1998. The City will be responsible for
monitoring the conditions at the Montecito property.

All of the Owned Properties were subject to Phase I or similar environmental
audits by independent environmental consultants prior to acquisition. The audits
did not reveal, nor is the Company aware of, any environmental liability
relating to such properties that the Company believes would have a material
adverse effect on the Company's business, assets or results of operations.
However, such audits involve a number of judgments and it is possible that such
audits did not reveal all environmental liabilities or that there are material
environmental liabilities of which the Company is unaware. In addition, the
Managed Properties may not have been, and certain of the NHP Properties have not
been, subject to Phase I or similar environmental audits by independent
environmental consultants. While the Company is not aware of any environmental
liability that it believes would have a material adverse effect on its business,
financial condition or results of operations relating to either the Managed
Properties or the NHP Properties for which audits are not available, there can
be no assurance that material environmental liabilities of which the Company is
unaware do not exist at such properties.

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 AIMCO 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.

RISK OF LOSS OF REVENUE DUE TO TERMINATION OR OTHER LOSS OF PROPERTY
MANAGEMENT AGREEMENTS. The Company is dependent upon revenue received for
services performed under property management agreements relating to properties
owned by third parties. For the year ended December 31, 1996, AIMCO and NHP
derived approximately 7.1% and 26.8%, respectively, of their gross revenues from
management of properties owned by third parties, excluding, in the case of NHP,
reimbursements from property owners for on-site personnel and general and
administrative costs. Risks associated with the management of properties owned
by third parties

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include risks that management contracts will be terminated by the property owner
or will be lost in connection with a sale of the property, contracts may not be
renewed upon expiration or may not be renewed on terms consistent with current
terms, and 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 management fees. If significant numbers of contracts are terminated
or are not renewed, net income from fee management operations could be adversely
affected. Contracts with unaffiliated third parties are for terms ranging from
30 days to 5 years, with most contracts being terminable within one year or
less. In general, management contracts may be terminated or otherwise lost as a
result of a number of factors, many of which are beyond the control of the
Company, including: (i) disposition of the property by the owner in the ordinary
course or as a result of financial distress of the property owner; (ii) the
property owner's determination that the Company's management of the property is
unsatisfactory; (iii) willful misconduct, gross negligence or other conduct by
the manager that constitutes grounds for termination under such contracts; and
(iv) with respect to certain affordable properties, termination of such
contracts by HUD or state housing finance agencies, generally at their
discretion.

On July 29, 1997, the NHP Real Estate Companies elected to sell their
interests in 32 multifamily properties (collectively, the "Hall Portfolio") to
other unaffiliated joint venture partners. The sale is subject to the approval
of certain third parties and there is no assurance that the sale will occur. NHP
recognized approximately $1.8 million and $0.9 million in property management
revenues associated with management of the Hall Portfolio for the year ended
December 31, 1996, and the six months ended June 30, 1997, respectively. If the
sale occurs, NHP will no longer provide property management services to the 32
properties which comprise the Hall Portfolio.

RISKS RELATING TO REGULATION OF AFFORDABLE HOUSING. As of September 30,
1997, the Managed Properties included 60,171 affordable units in 474 properties.
In addition, the NHP Real Estate Companies own interests in approximately 50,000
affordable units (a substantial majority of which are managed by NHP). A
substantial portion of the affordable properties, and some conventional
properties in which the NHP Real Estate Companies own interests, were built or
acquired by the owners with the assistance of programs administered by HUD that
provide mortgage insurance, favorable financing terms, or rental assistance
payments to the owners. As a condition to the receipt of assistance under these
and other HUD programs, the properties must comply with various HUD
requirements, which typically include limits on rents to amounts approved by
HUD. HUD approval is required before the Company may be appointed as manager of
additional HUD-assisted properties. There can be no assurance that HUD approval
will be received with respect to any particular action for which it is required.
In addition to the effects of HUD regulation on the Company as a manager of
affordable properties, the business of the Company may be indirectly affected by
regulations generally applicable to the entities owning affordable properties.
In particular, HUD limits the rents that may be charged on certain HUD-assisted
properties to approved amounts. If permitted rents on a property are
insufficient to cover costs, a sale of the property may become necessary, which
would result in a loss of management fee revenue. As of September 30, 1997, in
addition to the 422 HUD-assisted properties, the Company managed 52 properties
that receive assistance from agencies other than HUD or are subject to
regulation by agencies other than HUD. The Company estimates that it receives
less than 9% of its revenues from affordable units.

RISKS RELATED TO HUD ENFORCEMENT AND LIMITED DENIALS. Under its
regulations, HUD has the authority to suspend or deny participation in HUD
programs within a geographic region or nationwide where a manager has committed
criminal acts or evidenced a pattern of consistently violating its contractual
and regulatory responsibilities to HUD. HUD has recently issued limited denials
of participation to NHP as a result of physical inspections and mortgage
defaults at four properties owned by the NHP Real Estate Companies (two of which
properties are managed by NHP). The limited denials of participation, unless
lifted, suspend the Company's ability to manage or acquire additional
HUD-assisted properties in Florida (until April 4, 1998), western Missouri and
Kansas (until June 5, 1998) and eastern Missouri (until June 24, 1998). In 1996,
NHP obtained approximately $1.4 million in management revenues from affordable
properties in the affected regions. The Company is in the process of requesting
that HUD lift the denials of participation, but HUD has so far refused to do so,
and the Company cannot determine whether HUD will reverse that decision with
respect to

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any of the affected regions. Because the limited denials of participation are
prospective, existing HUD agreements are not affected, so the limited denials
are not expected to result in the loss of management service revenue from or
otherwise to affect properties that the Company currently manages in the subject
regions. If HUD were to disapprove the Company as property manager for one or
more affordable properties, the Company's ability to obtain property management
revenues from new affordable properties may be impaired.

HUD monitors the performance of properties with HUD-insured mortgage loans.
HUD also monitors compliance with applicable regulations, and takes performance
and compliance into account in approving management of HUD-assisted properties.
In this regard, 29 HUD-assisted properties owned or managed by NHP Real Estate
Companies or NHP have defaulted on non-recourse HUD-insured mortgage loans.
Eight of these 29 properties are currently managed by NHP. An additional six
properties owned or managed by the NHP Real Estate Companies or NHP have
received unsatisfactory performance ratings. As a result of the defaults and
unsatisfactory ratings, a national HUD office must review any field office
approval of the Company to act as property manager for a HUD-assisted property.
The national HUD office has consistently approved NHP's applications to manage
new properties, and the Company has received HUD clearance to acquire its
interests in NHP and the NHP Real Estate Companies. The Company believes that
it, including NHP, enjoys a good working relationship with HUD and that the
national office will continue to apply the clearance process to large management
portfolios such as the Company's, including NHP's, with discretion and
flexibility. While there can be no assurance, the Company believes that the
unsatisfactory reviews and the mortgage defaults will not have a material impact
on its results of operations or financial condition.

In October 1997, NHP received a subpoena from the Inspector General of HUD
requesting documents relating to any arrangement whereby NHP or any of its
affiliates provides or has provided compensation to owners of HUD multifamily
projects in exchange for or in connection with management of a HUD project. NHP
believes that other owners and managers of HUD projects have received similar
subpoenas. Documents relating to certain of NHP's acquisitions of management
rights for HUD projects, including its acquisition of management rights from
Oxford, may be responsive to the subpoena. NHP intends to comply with the
subpoena and believes that its operations are in compliance, in all material
respects, with all laws, rules and regulations relating to HUD-assisted or
HUD-insured properties. Although the Inspector General has not initiated any
action against NHP or the Company or, to NHP's or the Company's knowledge, any
owner of a HUD property managed by NHP or the Company, if any such action is
taken in the future, it could ultimately affect existing arrangements with
respect to HUD projects or otherwise have a material adverse effect on the
results of operations of the Company.

RISKS RELATING TO UNCERTAINTY REGARDING STATUS OF FEDERAL SUBSIDIES. The
Company manages approximately 44,000 units (including approximately 37,900 units
included in the NHP Properties) that are subsidized under Section 8 of the
United States Housing Act of 1937, as amended ("Section 8"). These subsidies are
generally provided pursuant to project-based contracts with the owners of the
properties or, with respect to a limited number of units managed by the Company,
pursuant to vouchers received by tenants. A substantial number of the Section 8
subsidies are scheduled to expire prior to 2005, unless renewed. For the past
several years, various proposals have been advanced by HUD, Congress and others
proposing the restructuring of Section 8. Four such proposals are now pending
before Congress. These proposals generally seek to lower subsidized rents to
market levels, thereby reducing rent subsidies, and to lower required debt
service costs as needed to ensure financial viability at the reduced rents and
rent subsidies, but vary greatly as to how that result is to be achieved. Some
proposals include a phase-out of project-based subsidies on a
property-by-property basis upon expiration of a property's Housing Assistance
Payments Contract ("HAP Contract"), with a conversion to a tenant-based subsidy.
Under a tenant-based system, rent vouchers would be issued to qualified tenants
who then could elect to reside at a property of their choice, provided the
tenant has the financial ability to pay the difference between the selected
property's monthly rent and the value of the voucher, which would be established
based on HUD's regulated fair market rent for that geographic area. Congress has
not yet accepted any of these restructuring proposals. With respect to HAP
Contracts expiring on or before September 30, 1997, Congress has elected to
renew expiring HAP Contracts for one year terms, generally at existing rents.
Congress

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is now considering what action to take with respect to HAP Contracts expiring
October 1, 1997 through September 30, 1998. There can be no assurance that the
proposed changes would not significantly affect the Company's management
portfolio and the NHP Properties. Furthermore, there can be no assurance that
changes in Federal subsidies will not be more restrictive than those currently
proposed or that other changes in policy will not occur. Any such changes could
have a material adverse effect on the Company's property management revenues and
the NHP Properties.

RISKS OF ACQUISITION AND DEVELOPMENT ACTIVITIES.

The Company has engaged in, and intends to continue to engage in, the
selective acquisition, development and expansion of multifamily apartment
properties. In the ordinary course of business, the Company engages in
discussions and negotiations regarding the acquisition of apartment properties
or interests in apartment properties. The Company frequently enters into
contracts and nonbinding letters of intent with respect to the purchase of
properties. These contracts are typically subject to certain conditions and
permit the Company to terminate the contract in its sole and absolute discretion
if it is not satisfied with the results of its due diligence investigation of
the properties. The Company believes that such contracts essentially result in
the creation of an option on the subject properties and give the Company greater
flexibility in seeking to acquire properties. As of September 30, 1997, the
Company had under contract or letter of intent an aggregate of 26 multi-family
apartment properties (exclusive of the Winthrop Portfolio and Windward) with a
maximum aggregate purchase price of $315 million, which, in some cases, may be
paid in the form of assumption of existing debt. All such contracts are subject
to termination by the Company as described above. In addition, on October 15,
1997, the Company's due diligence period expired with respect to the Winthrop
Portfolio, and the Company became obligated, subject to certain conditions, to
acquire the Winthrop Portfolio. See "Business and Growth Strategies--Properties
Subject to Letter of Intent or Contract." No assurance can be given that any of
these possible acquisitions will be completed or, if completed, that they will
be accretive on a per share basis.

In addition to general investment risks associated with any new investment,
acquisitions entail risks that such investments will fail to perform in
accordance with expectations, including projected occupancy and rental rates,
management fees and the costs of property improvements, along with integration
related risks. 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. See also "--Risks Associated with the
NHP Acquisition." The Company also has engaged in, and intends to continue to
engage in the selective acquisition of, or investment in, companies that own or
manage multifamily apartment properties or own general or limited partnership or
other interests therein, including tender offers for limited partnership
interests. Risks associated with the Company's past and future acquisitions of
general partnership interests, and tender offers for outstanding limited
partnership interests, include the risks that the general partner will be
subject to allegations (including legal actions) of, or will be otherwise 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. See also "--Risks Relating
to English Litigation."

RISKS RELATING TO ENGLISH LITIGATION.

In November 1996, the Company acquired (the "English Acquisition") certain
partnership interests, real estate and related assets owned by J.W. English, a
Houston, Texas-based real estate syndicator and developer, and certain
affiliated entities (collectively, the "J.W. English Companies"). In the English
Acquisition, the Company purchased all of the general and limited partnership
interests in 22 limited partnerships which act as

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the general partner to 31 limited partnerships (the "English Partnerships") that
own 22 multifamily apartment properties and other assets and interests related
to the J.W. English Companies, and assumed management of the properties owned by
the English Partnerships. The Company made separate tender offers (the "English
Tender Offers") to the limited partners of 25 of the English Partnerships (the
"Tender Offer English Partnerships").

In November 1996, purported limited partners of certain of the Tender Offer
English Partnerships filed a purported class action lawsuit against the Company
and J.W. English in the U.S. District Court for the Northern District of
California (the "Federal Action"), alleging, among other things, that the
Company conspired with J.W. English to breach his fiduciary duty to the
plaintiffs, and that the offering materials used by the Company in connection
with the English Tender Offers contained misleading statements or omissions. The
plaintiffs in the Federal Action have filed a motion to voluntarily dismiss the
Federal Action, without prejudice, in favor of another purported class action.
In May 1997, limited partners of certain of the Tender Offer English
Partnerships and six additional English Partnerships filed two complaints in
Superior Court of the State of California (the "California Actions") against the
Company and the J.W. English Companies, alleging, among other things, that the
consideration the Company offered in the English Tender Offers was inadequate
and designed to benefit the J.W. English Companies at the expense of the limited
partners, that certain misrepresentations and omissions were made in connection
with the English Tender Offers, that the Company receives excessive fees in
connection with its management of the properties owned by the English
Partnerships, that the Company continues to refuse to liquidate the English
Partnerships and that the English Acquisition violated the partnership
agreements governing the English Partnerships and constituted a breach of
fiduciary duty.

In addition to unspecified compensation and exemplary damages, the
complaints in the California Actions seek an accounting, a constructive trust on
the assets and monies acquired by the English defendants in connection with the
English Acquisition, a court order removing the Company from management of the
English Partnerships and/or ordering disposition of the properties and attorneys
fees, expert fees and other costs. The Company intends to vigorously defend
itself in connection with these actions. The Company believes it is entitled to
indemnity from the J.W. English Companies, subject to certain exceptions.
Failure by the Company to prevail in the California Actions or to receive
indemnification could have a material adverse effect on the Company's financial
condition and results of operations. On August 4, 1997, the Company filed
demurrers to both complaints in the California Actions. Hearing on the demurrers
is scheduled for November 7, 1997.

DEPENDENCE ON CERTAIN EXECUTIVE OFFICERS.

Although each of Terry Considine, Peter K. Kompaniez and Steven D. Ira,
officers and/or directors of the Company, has entered into an employment
agreement with the Company, the loss of any of their services could have an
adverse effect on the operations of the Company.

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 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 July 29, 1994, the date of its initial public 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.

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In September 1997, AIMCO received an opinion of Skadden, Arps, Slate,
Meagher & 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, ANHI and the other Unconsolidated 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 the 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").

AIMCO believes that the partnerships and limited liability companies in
which the Company has ownership interests (the "Subsidiary Partnerships") are
properly treated as partnerships for Federal income tax purposes. 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 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."

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, the Company might need to
borrow funds or liquidate certain investments on terms that may be
disadvantageous to the Company 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
"--Significant Indebtedness; Refinancing Risks," "--Risks Related to Investment
in and Management of Real Estate" and "Certain Federal Income Tax
Considerations."

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, ANHI and NHP following the NHP Merger
without jeopardizing AIMCO's qualification as a REIT. See "Certain Federal
Income Tax Considerations."

In addition, if AIMCO fails to qualify as a REIT, the agreement pursuant to
which AIMCO issued its Class B Preferred Stock provides that the original
purchaser may require AIMCO to repurchase such investor's Class B Preferred
Stock, in whole or in part, at a price of $105 per share, plus accrued and
unpaid dividends to the date of repurchase. Such investor acquired and currently
owns 750,000 shares of Class B Preferred Stock.

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). The AIMCO Charter prohibits 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 or 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 and Class
B Common Stock owned directly or constructively

S-23
<PAGE>
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.

SHARES AVAILABLE FOR FUTURE SALE.

As of September 30, 1997, there are outstanding options and warrants to
purchase Class A Common Stock, and shares of Class B Preferred Stock and Class B
Common Stock convertible into Class A Common Stock, that, if exercised or
converted, would result in the issuance of approximately 3.7 million shares of
Class A Common Stock. In addition, as of September 30, 1997, there were
outstanding 4.7 million OP Units which, upon tender for redemption by the
holders, may be acquired by AIMCO in exchange for an equal number of shares of
Class A Common Stock. Consummation of the NHP Merger will increase the amount of
outstanding shares of Class A Common Stock by between approximately 2.2 million
shares and 4.5 million shares (excluding any shares issued to ANHI), depending
upon the type of consideration elected by NHP stockholders in the NHP Merger,
and will increase the number of shares of Class A Common Stock issuable upon
exercise of options by approximately 0.7 million shares. All of the shares of
Class A Common Stock issued to NHP stockholders as consideration in the NHP
Merger will be immediately available for sale in the public markets, and the
other shares of Class A Common Stock described above will be available for sale
in the public markets from time to time pursuant to exemptions from registration
or upon registration. In addition, since receipt of consideration in the NHP
Merger may cause NHP stockholders to recognize capital gain or loss, NHP
stockholders (particularly those stockholders who elect to receive entirely
Class A Common Stock as consideration in the NHP Merger) may sell their shares
of Class A Common Stock to pay any taxes due upon receipt of the consideration
in the NHP Merger. Sales of substantial amounts of shares of Class A Common
Stock, or the perception that such sales could occur, could adversely affect the
prevailing market price for shares of Class A Common Stock. No prediction can be
made, however, as to the effect, if any, of future sales of such shares, or the
availability of such shares for future sale, on the market price of Class A
Common Stock prevailing from time to time.

USE OF PROCEEDS

AIMCO will use approximately $23 million of net proceeds from the Offering
to repay an intercompany loan from the Operating Partnership, and will
contribute all of the remaining $218.5 million of net proceeds to the Operating
Partnership. The Operating Partnership will use such net proceeds (together with
any net proceeds of any exercise of the over-allotment option) as follows: (i)
approximately $74 million for the repayment of outstanding indebtedness under
the Credit Facility, which indebtedness bears interest at a rate of LIBOR plus
1.70% (7.36% at September 30, 1997) and matures in August 1998 (unless otherwise
extended); (ii) approximately $57 million for the repayment of outstanding
indebtedness under NHP's credit facility, which indebtedness bears interest at a
rate of 6.66% and matures in August 1998; (iii) approximately $54 million for
the repayment of outstanding long-term indebtedness, secured by individual Owned
Properties, having, as of September 30, 1997, a weighted average interest rate
of approximately 8.56% and a weighted average remaining term to maturity of
approximately 12 years; and (iv) the remainder of $33.5 million, together with
the $23 million in proceeds from the repayment of the intercompany loan, for
general business purposes. In connection with the repayment of outstanding
indebtedness under NHP's credit facility (which indebtedness does not appear on
the Company's balance sheet since NHP is not a consolidated subsidiary of the
Company), the Company will loan to NHP funds sufficient to repay such credit
facility at the same interest rate as borrowings under such credit facility. In
connection with the repayment of indebtedness secured by individual Owned
Properties, the Company will loan to the property owning partnerships funds
sufficient to make such repayments at an interest rate and with other terms and
conditions that are in accordance with the requirements of the applicable
partnership agreements. As a result of the contribution of the net proceeds
AIMCO will own approximately 88% of the Operating Partnership.

S-24
<PAGE>
CAPITALIZATION

The following table sets forth the short-term debt and capitalization of
AIMCO at June 30, 1997 (i) on a historical basis; (ii) on a pro forma basis to
reflect the Pre-Merger Pro Forma Transactions (including the NHP Stock Purchase
and the NHP Real Estate Acquisition); (iii) on a pro forma basis to reflect the
Merger Pro Forma Transactions (including the Pre-Merger Pro Forma Transactions,
the NHP Merger, the WMF Spin-Off and the NHP Reorganization); and (iv) on a pro
forma basis to reflect the Merger Pro Forma Transactions, as adjusted to reflect
the Offering and the use of net proceeds therefrom. The information set forth in
the following table should be read in connection with the financial statements
and notes thereto and the pro forma financial information and notes thereto
incorporated by reference herein.

<TABLE>
<CAPTION>
PRO FORMA
----------------------------------------
MERGER
HISTORICAL PRE-MERGER MERGER (1) AS ADJUSTED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Credit Facility (2)....................................... $ 70,900 $ 37,303 $ 44,694 $ --
Secured short-term financing.............................. -- 254,421 254,421 176,166
Long-term debt:
Secured tax-exempt bond financing....................... 74,799 74,799 74,799 74,799
Secured notes payable................................... 465,758 436,882 387,882 334,351
Unsecured notes payable................................. 33,000 33,000 33,000 33,000
Minority interests in other partnerships.................. 6,625 19,351 19,166 19,166
Minority interests in Operating Partnership............... 63,366 105,396 105,396 105,396

Stockholders' equity:
Class B Cumulative Convertible Preferred Stock, $.01 par
value, 750,000 authorized, none issued and outstanding
on a historical basis; 750,000 issued and outstanding
on a pro forma basis (3).............................. -- 75,000 75,000 75,000
Class A Common Stock, $.01 par value, 150,000,000
authorized, 22,042,809 issued and outstanding on a
historical basis; 28,256,591 issued and outstanding on
a pro forma basis (Pre-Merger); 33,023,933 issued and
outstanding on a pro forma basis (Merger); and
40,023,933 issued and outstanding as adjusted (4)..... 221 283 331 401
Class B Common Stock, $.01 par value, 425,000
authorized, 325,000 issued and outstanding (5)........ 3 3 3 3
Preferred Stock, $.01 par value, 9,250,000 authorized,
none issued or outstanding............................ -- -- -- --
Additional paid-in capital.............................. 417,487 608,008 740,404 981,814
Notes due on common stock purchases (6)................. (7,603) (40,603) (40,603) (40,603)
Retained earnings (distributions in excess of
earnings)............................................. (21,631) (24,296) (24,296) (25,211)
------------ ------------ ------------ ------------
Total stockholders' equity................................ 388,477 618,395 750,839 991,404
------------ ------------ ------------ ------------
Total capitalization...................................... $ 1,102,925 $ 1,579,547 $ 1,670,197 $ 1,734,282
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>

- ----------

(1) The pro forma capitalization information is presented as if the transactions
detailed above occurred on June 30, 1997.

(2) As of September 30, 1997, the borrowings under the Credit Facility were
$74.0 million.

(3) Convertible into 3.28407 shares of Class A Common Stock per share, or a
total of 2,463,053 shares at the option of the holder on or after August 4,
1998, subject to certain anti-dilution adjustments.

(4) Excludes (i) 4,936,232 shares of Class A Common Stock which may be issued in
exchange for 4,936,232 OP Units which may be tendered for redemption; (ii)
325,000 shares of Class A Common Stock issuable upon conversion of 325,000
shares Class B Common Stock; (iii) 953,645 shares of Class A Common Stock
issuable upon exercise of outstanding options and warrants; and (iv)
2,463,053 shares of Class A Common Stock which may be issued upon conversion
of 750,000 shares of Class B Preferred Stock.

(5) Convertible into 325,000 shares of Class A Common Stock if certain
performance standards are achieved, including 8.5% annual increases in both
AIMCO's FFO per share and the market price of Class A Common Stock. See
"Description of Common Stock--Class B Common Stock" in the accompanying
Prospectus.

(6) As of September 30, 1997, the amount outstanding on notes due on common
stock purchases was $30.5 million.

S-25
<PAGE>
PRICE RANGE OF AND DIVIDENDS ON COMMON STOCK

The Class A Common Stock has been listed and traded on the NYSE under the
symbol "AIV" since July 22, 1994. The following table sets forth the quarterly
high and low sales prices of the Class A Common Stock as reported on the NYSE
and the dividends declared by AIMCO with respect to the periods indicated.

<TABLE>
<CAPTION>
DIVIDENDS
(PER
QUARTER ENDED HIGH LOW SHARE)
- ----------------------------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
1995
March 31......................................................................... $ 18 3/4 $ 17 1/8 $ 0.415
June 30.......................................................................... 20 1/4 17 7/8 0.415
September 30..................................................................... 21 1/4 19 1/2 0.415
December 31...................................................................... 20 7/8 18 0.425
1996
March 31......................................................................... 21 1/8 19 3/8 0.425
June 30.......................................................................... 21 18 3/8 0.425
September 30..................................................................... 22 18 3/8 0.425
December 31...................................................................... 28 3/8 21 1/8 0.4625
1997
March 31......................................................................... 30 1/2 25 1/2 0.4625
June 30.......................................................................... 29 3/4 26 0.4625
September 30..................................................................... 36 3/16 28 1/8 --
December 31 (through October 21)................................................. 38 35 3/8 --
</TABLE>

On October 21, 1997, the closing sales price of the Class A Common Stock on
the NYSE was $36 9/16 per share. As of September 30, 1997, there were 305 record
holders of the Class A Common Stock.

AIMCO, as a REIT, is required to distribute annually to holders of Class A
Common Stock at least 95% of its "real estate investment trust taxable income,"
which, as defined by the Code and Treasury regulations, is generally equivalent
to net taxable ordinary income. See "Certain Federal Income Tax Considerations
- -- Taxation of the Company" in the accompanying Prospectus. AIMCO intends to pay
regular quarterly dividends to its stockholders. However, the future payment of
dividends by AIMCO will be at the discretion of the Board of Directors and will
depend on numerous factors including AIMCO's financial condition, its capital
requirements, the annual distribution requirements under the provisions of the
Code applicable to REITs and such other factors as the Board of Directors deems
relevant.

On October 8, 1997, the Company announced that its management had
recommended to the Board of Directors that it increase the annual dividend rate
on the Class A Common Stock to $2.15 per share. If adopted by AIMCO's Board of
Directors, such dividend increase would be effective commencing with the
February 1998 dividend payment and is subject to the factors described above,
including AIMCO's future results of operations from its recently completed
acquisitions.

S-26
<PAGE>
SELECTED PRO FORMA AND HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following table sets forth summary pro forma historical financial and
operating information for AIMCO. The Pre-Merger pro forma financial and
operating information gives effect to the Pre-Merger Pro Forma Transactions
(including the NHP Stock Purchase and the NHP Real Estate Acquisition). The
Merger pro forma financial and operating information gives effect to the Merger
Pro Forma Transactions (including the Pre-Merger Pro Forma Transactions, the NHP
Merger, the WMF Spin-Off and the NHP Reorganization). The pro forma financial
and operating information set forth below should be read in conjunction with,
and is qualified in its entirety by, the historical and pro forma financial
statements and notes thereto of AIMCO, NHP, the NHP Real Estate Companies, NHP
Southwest Partners, L.P., the NHP New LP Entities, the NHP Borrower Entities,
The Bay Club at Aventura, the Morton Towers apartments and the Thirty-five
Acquisition Properties (which represent the Winthrop Portfolio), which are
incorporated by reference herein. The summary historical financial information
for the years ended December 31, 1996 and 1995 is based on the audited financial
statements of AIMCO incorporated by reference herein. The summary historical
financial information for AIMCO for the six months ended June 30, 1997 and 1996
has been prepared from unaudited historical financial data incorporated by
reference herein. In the opinion of the management of AIMCO, the operating data
for the six months ended June 30, 1997 and 1996 include all adjustments
(consisting only of normally recurring adjustments) necessary to present fairly
the information set forth therein. The results for the six months ended June 30,
1997 are not necessarily indicative of the results to be obtained for the year
ending December 31, 1997. The following information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the historical financial statements of AIMCO and
notes thereto incorporated by reference herein.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
-----------------------------------------------------------
1997
-------------------------------------------
PRO FORMA
-------------------------------
PRE-
1996 HISTORICAL MERGER MERGER
------------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
(RESTATED)(A)
OPERATING DATA:
Income from rental property
operations...................... $ 17,700 $ 30,779 $ 44,454 $ 44,344
Income from service company
business........................ 641 2,031 1,173 535
General and administrative
expenses........................ (549) (784) (784) (406)
Interest expense.................. (10,925) (20,604) (33,811)(g) (30,946)(i)
Interest income................... 211 1,341 2,980 3,239
Income before minority interests
and equity in losses of
unconsolidated entities......... 7,078 12,763 14,012 16,766
Minority interest in other
partnerships.................... -- (565) (788) (791)
Equity in losses of unconsolidated
partnerships.................... -- (379) (3,380) (6,922)
Equity in losses of unconsolidated
subsidiary...................... -- (86) 611 3,941
Income before minority interest in
Operating Partnership,
extraordinary item and gain on
sale of property................ 7,078 11,733 10,455 12,994
Income before extraordinary item.. 5,955 10,117 8,750 11,302
Net income (loss)................. $ 5,955 $ 9,848 $ 8,750(g) $ 11,302(h)(i)
PER SHARE DATA:
Net income per common share and
common share equivalents........ $ 0.49 $ 0.53 $ 0.21(g) $ 0.26(h)(i)
Dividends paid per common share... $ 0.85 $ 0.925 $ 0.925 $ 0.925
Weighted average number of common
shares and common share
equivalents outstanding......... 12,039 18,559 28,281 33,307
BALANCE SHEET DATA (END OF PERIOD):
Real estate, before accumulated
depreciation.................... $ 551,826 $1,102,073 $1,460,289 $1,370,933
Cash and cash equivalents......... 2,328 21,521 21,521 21,521
Total assets...................... 540,117 1,272,890 1,742,971 1,730,506
Total mortgages and notes
payable......................... 307,612 644,457 836,405 794,796
Minority Interest in other
Partnerships.................... -- 6,625 19,351 19,166
Minority interest in Operating
Partnership..................... 41,525 63,366 105,396 105,396
Stockholders' equity(b)........... 178,059 388,477 618,395 750,839

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1996
----------------------------------------
PRO FORMA
---------------------------
PRE-
1995 HISTORICAL MERGER MERGER
------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
(RESTATED)(A)
OPERATING DATA:
Income from rental property
operations...................... $ 27,483 $ 39,814 $ 74,241 $ 72,275
Income from service company
business........................ 1,973 1,717 2,134 856
General and administrative
expenses........................ (1,804) (1,512) (1,512) (756)
Interest expense.................. (13,322) (24,802) (65,476)(j) (62,025)(k)
Interest income................... 658 523 4,722 5,241
Income before minority interests
and equity in losses of
unconsolidated entities......... 14,988 15,740 14,109 15,591
Minority interest in other
partnerships.................... -- (111) 2,666 2,665
Equity in losses of unconsolidated
partnerships.................... -- -- (7,830) (13,838)
Equity in losses of unconsolidated
subsidiary...................... -- -- 5,339 12,152
Income before minority interest in
Operating Partnership,
extraordinary item and gain on
sale of property................ 14,988 15,629 14,284 16,570
Income before extraordinary item.. 13,375 12,984 12,231 14,002
Net income (loss)................. $ 13,375 $ 12,984 $ 12,231(j) $ 14,002(h)(k)
PER SHARE DATA:
Net income per common share and
common share equivalents........ $ 0.86 $ 1.04 $ 0.26(j) $ 0.27(h)(k)
Dividends paid per common share... $ 1.66 $ 1.70 $ 1.70 $ 1.70
Weighted average number of common
shares and common share
equivalents outstanding......... 9,579 12,427 26,592 31,638
BALANCE SHEET DATA (END OF PERIOD):
Real estate, before accumulated
depreciation.................... $477,162 $865,222
Cash and cash equivalents......... 2,379 13,170
Total assets...................... 480,361 834,813
Total mortgages and notes
payable......................... 268,692 522,146
Minority Interest in other
Partnerships.................... -- 10,386
Minority interest in Operating
Partnership..................... 30,376 58,777
Stockholders' equity(b)........... 169,032 222,889
</TABLE>

S-27
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
-----------------------------------------------
1997
-------------------------------
PRO FORMA
------------------
PRE-
1996 HISTORICAL MERGER MERGER
------------- ---------- -------- --------
<S> <C> <C> <C> <C>
(RESTATED)(A)

CASH FLOW DATA:
Cash provided by operating
activities(c)........................ $ 25,209 $ 25,035 $ 38,786 $ 40,161
Cash used in investing activities(d)... (18,074) (108,134) (5,423) (5,291)
Cash provided by (used in) financing
activities(e)........................ (7,186) 91,450 (33,209) (37,619)
OTHER DATA:
Funds from Operations(f)............... $ 16,368 $ 28,441 $ 37,182 $ 49,763(h)
Weighted average number of common
shares and OP Units outstanding(g)... 14,303 21,590 35,591 40,616

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------------
1996
-------------------------------
PRO FORMA
------------------
PRE-
1995 HISTORICAL MERGER MERGER
------------- ---------- -------- --------
<S> <C> <C> <C> <C>
(RESTATED)(A)
CASH FLOW DATA:
Cash provided by operating
activities(c)........................ $ 25,911 $ 38,806 $ 62,235 $ 60,878
Cash used in investing activities(d)... (60,821) (88,144) (10,847) (10,582)
Cash provided by (used in) financing
activities(e)........................ 30,145 60,129 (61,362) (69,466)
OTHER DATA:
Funds from Operations(f)............... $ 25,285 $ 35,185 $ 67,948 $ 89,050(h)
Weighted average number of common
shares and OP Units outstanding(g)... 11,461 14,994 34,435 39,480
</TABLE>

- ------------

(a) In the second quarter of 1996, AIMCO reorganized the ownership of its
subsidiary service company, whereby the Operating Partnership (i) owns all
of the non-voting preferred stock of the service company, PAMS Inc.,
representing a 95% economic interest, and (ii) owns the 1% general
partnership interest in PAMS LP. PAMS Inc. owns the 99% limited partnership
interest in PAMS LP. Substantially all the activity of PAMS Inc. is
conducted by PAMS LP. Because the Operating Partnership owns 95% of the
economic value of PAMS Inc. and also controls the general partnership
interest in PAMS LP, thereby controlling the activity of the partnership,
the service company is consolidated. Prior to the reorganization, AIMCO
reported the service company business on the equity method. The restatement
has no impact on net income, but does increase third party and affiliate
management and other income, management and other expenses, amortization of
management company goodwill and depreciation of non-real estate assets.
AIMCO has restated the balance sheet as of December 31, 1995, and the
statements of income and statements of cash flows for the year ended
December 31, 1995 to reflect the change.

(d) On a pro forma basis, cash used in investing activities represents the
minimum annual provision for capital replacements of $300 per owned
apartment unit.

(f) The Company's management believes that the presentation of FFO, when
considered with the financial data determined in accordance with GAAP,
provides useful measures of AIMCO's performance. However, FFO does not
represent cash flow and is not necessarily indicative of cash flow or
liquidity available to AIMCO, nor should it be considered as alternatives to
net income as an indicator of operating performance. The Board of Governors
of NAREIT defines FFO as net income (loss), computed in accordance with
GAAP, excluding gains and losses from debt restructuring and sales of
property, plus real estate related depreciation and amortization (excluding
amortization of financing costs), and after adjustments for unconsolidated
partnerships and joint ventures. In addition, AIMCO adjusts FFO for minority
interest in the Operating Partnership, amortization of management company
goodwill, the non-cash deferred portion of the income tax provision for
unconsolidated subsidiaries and the payment of dividends on preferred stock.
AIMCO's management believes that presentation of FFO provides investors with
an industry accepted measurement which helps facilitate an understanding of
AIMCO's ability to meet required dividend payments, capital expenditures and
principal payments on its debt. There can be no assurance that AIMCO's basis
of computing FFO is comparable with that of other REITs.

S-28
<PAGE>
The following is a reconciliation of Income before minority interest in
Operating Partnership to FFO:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,
------------------------------------------
1997
-----------------------------
PRO FORMA
----------------
PRE-
1996 HISTORICAL MERGER MERGER
---------- ---------- ------- -------
<S> <C> <C> <C> <C>
(RESTATED)
OPERATING ACTIVITIES
Income before minority interest in
Operating Partnership............... $ 7,078 $11,464 $10,455 $12,994
Gain on disposition of property....... -- -- -- --
Extraordinary item.................... -- 269 -- --
Real estate depreciation, net of
minority interest in other
partnerships........................ 9,060 13,250 21,385 19,881
Amortization of management company
goodwill............................ 230 474 1,164 598
Equity in earnings of Unconsolidated
Subsidiaries:
Real estate depreciation.............. -- 1,263 803 2,307
Amortization of recoverable amount of
management contracts................ -- 150 83 3,630
Amortization of goodwill related to
service provider business........... -- -- -- 950
Deferred income taxes................. -- 874 57 600
Real estate depreciation from
investments in partnerships......... -- 697 5,907 11,475
---------- ---------- ------- -------
Net funds provided by operating
activities.......................... 16,368 28,441 39,854 52,435
---------- ---------- ------- -------

FINANCING ACTIVITIES
Payment of dividend on Preferred
Stock............................... -- -- (2,672 ) (2,672)
---------- ---------- ------- -------
Net funds used in financing
activities.......................... -- -- (2,672 ) (2,672)
---------- ---------- ------- -------
Funds from Operations................. $16,368 $28,441 $37,182 $49,763
---------- ---------- ------- -------
---------- ---------- ------- -------

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------
1996
-----------------------------
PRO FORMA
----------------
PRE-
1995 HISTORICAL MERGER MERGER
---------- ---------- ------- -------
<S> <C> <C> <C> <C>
(RESTATED)
OPERATING ACTIVITIES
Income before minority interest in
Operating Partnership............... $14,988 $15,673 $14,284 $16,570
Gain on disposition of property....... -- (44) -- --
Extraordinary item.................... -- -- -- --
Real estate depreciation, net of
minority interest in other
partnerships........................ 15,038 19,056 41,621 38,533
Amortization of management company
goodwill............................ 428 500 3,180 1,256
Equity in earnings of Unconsolidated
Subsidiaries:
Real estate depreciation.............. -- -- 1,606 4,694
Amortization of recoverable amount of
management contracts................ -- -- 261 7,261
Amortization of goodwill related to
service provider business........... -- -- -- 1,900
Deferred income taxes................. -- -- 376 3,600
Real estate depreciation from
investments in partnerships......... -- -- 11,964 20,580
---------- ---------- ------- -------
Net funds provided by operating
activities.......................... 30,454 35,185 73,292 94,394
---------- ---------- ------- -------
FINANCING ACTIVITIES
Payment of dividend on Preferred
Stock............................... (5,169) -- (5,344 ) (5,344 )
---------- ---------- ------- -------
Net funds used in financing
activities.......................... (5,169) -- (5,344 ) (5,344 )
---------- ---------- ------- -------
Funds from Operations................. $25,285 $35,185 $67,948 $89,050
---------- ---------- ------- -------
---------- ---------- ------- -------
</TABLE>

(g) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Pre-Merger Pro Forma Transactions,
interest expense would be $27,032 and net income would be $16,906, or $0.40
per common share.

(h) AIMCO has amortized goodwill associated with the NHP Merger using the
straight line method over 20 years. In connection with a review of the proxy
material relating to the NHP Merger, the SEC has issued to AIMCO a comment
letter that suggests a five year life for management company goodwill,
rather than the 20 year life utilized by AIMCO. If the life of the
management company goodwill were changed to five years, for the six months
ended June 30, 1997, net income (loss) and net income (loss) per common
share and common share equivalent on a pro forma (Merger) basis would have
been $1,491 and $0.04, respectively ($9,648 and $0.24, respectively, on a
pro forma (Merger) basis giving effect to the Offering and the application
of the proceeds thereof); and for the year ended December 31, 1996, net
income (loss) and net income (loss) per common share and common share
equivalent on a pro forma (Merger) basis would have been $(5,361) and
$(0.17), respectively ($9,993 and $0.26, respectively, on a pro forma
(Merger) basis giving effect to the Offering and the application of net
proceeds thereof). Since AIMCO's policy is to adjust FFO for amortization of
goodwill, the change in life of such goodwill would not have any material
impact on FFO for the periods presented.

(i) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Merger Pro Forma Transactions,
interest expense would be $24,215 and net income would be $19,578, or $0.42
per common share. If all the NHP stockholders (excluding ANHI) elect Mixed
Consideration in connection with the NHP Merger, on a pro forma basis,
giving effect to the Offering and the application of the net proceeds
thereof, as well as the Merger Pro Forma Transactions, interest expense
would be $26,175 and net income would be $17,825, or $0.40 per common share.

(j) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Pre-Merger Pro Forma Transactions,
interest expense would be $51,827 and net income would be $27,430, or $0.66
per common share.

(k) On a pro forma basis, giving effect to the Offering and the application of
the net proceeds thereof, as well as the Merger Pro Forma Transactions,
interest expense would be $48,468 and net income would be $29,621, or $0.63
per common share. If all NHP stockholders (excluding ANHI) elect Mixed
Consideration in connection with the NHP Merger, on a pro forma basis,
giving effect to the Offering and the application of the net proceeds
thereof, as well as the Merger Pro Forma Transactions, interest expense
would be $52,435 and net income would be $26,128, or $0.57 per common share.

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<PAGE>
BUSINESS AND GROWTH STRATEGIES

The Company, including NHP, is the second largest owner and manager of
multifamily apartment properties in the United States, based on apartment unit
data compiled by the National Multi Housing Council, with 186,993 apartment
units owned or under management. As of September 30, 1997, the Company owned or
controlled a total of 28,773 units in 109 apartment properties, had an equity
interest in non-consolidated partnerships that owned 87,182 units in 526
apartment properties and managed 71,038 units in 394 apartment properties for
third parties and affiliates. In addition to the Managed Properties, the Company
manages all of the Owned Properties and a majority of the Equity Properties. The
AIMCO Properties are located in 42 states, the District of Columbia and Puerto
Rico. Properties owned or managed by the Company had annualized gross rental
revenues of approximately $1.3 billion, based on revenues for the month ended
June 30, 1997. AIMCO has elected to be taxed as a REIT for Federal income tax
purposes. The Company conducts substantially all of its operations through the
Operating Partnership and its subsidiaries. As of September 30, 1997, AIMCO held
approximately an 85% interest in the Operating Partnership. Certain terms used
herein are defined below in "--Accounting Policies and Definitions."

OPERATING AND FINANCIAL STRATEGIES

The Company uses the following operating and financing strategies to attempt
to meet its objective of providing long-term, predictable FFO per share:

- ACQUISITION OF PROPERTIES AT LESS THAN REPLACEMENT COST. The Company
attempts to acquire properties at a significant discount to their
replacement cost, which AIMCO believes will provide it with a competitive
cost advantage in comparison to newly constructed properties.

- GEOGRAPHIC DIVERSIFICATION. The Company operates in 42 states, the
District of Columbia and Puerto Rico. This geographic diversification
insulates the Company, to some degree, from inevitable downturns in any
one market. Among Owned Properties and Equity Properties, Houston, Texas,
the Company's largest single regional market, and Dallas, Texas, the
Company's second largest regional market, accounted for approximately
13.9% and 8.0%, respectively, of the properties in which the Company has
an ownership interest, on a pro rata basis.

- MARKET GROWTH. The Company seeks to operate in markets where population
and employment growth are expected to exceed the national average and
where it believes it can become a regionally significant owner or manager
of properties. The average annual population and employment growth rates
from 1990 to 1995 in the Company's five largest regional markets were 2.3%
and 2.6%, respectively, compared to national averages of 1.1% and 1.7%,
respectively. For the 1996 to 1999 period, annual population and
employment growth rates in the Company's five largest regional markets are
forecasted to be 2.2% and 3.6%, respectively, compared with projected
national averages of 0.9% and 2.0%, respectively.

- PRODUCT DIVERSIFICATION. The Company's portfolio of apartment properties
also span a range of apartment community types, both within and among
markets. AIMCO's properties are located in both urban and suburban areas
and range from garden apartments to high rises and from luxury townhomes
to affordable properties.

- CAPITAL REPLACEMENT. The Company believes that the physical condition and
amenities of its apartment communities are important factors in its
ability to maintain and increase rental rates. AIMCO also believes that a
program of regular maintenance of the quality of its apartments, rather
than episodic renovation, contributes to the reliability of earnings per
share. The Company presently allocates approximately $300 annually per
owned apartment unit for Capital Replacements and reserves unexpended
amounts for future capital replacements. From time to time the Company
reevaluates its Capital Replacement requirements and updates the amount of
its budgeted Capital Replacements per owned apartment unit accordingly.
For the six months ended June 30, 1997, the Company charged approximately
$3.4 million for Capital Replacements to its reserve, of which
approximately $2.9 million was

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<PAGE>
spent, and had aggregate unexpended Capital Replacement reserves of
approximately $0.8 million at June 30, 1997. In addition to the Capital
Replacement expenditures, the Company spent $3.3 million for repairs and
maintenance, or a weighted average of approximately $135 per apartment
unit, for the six months ended June 30, 1997. In addition to its Capital
Replacement expenditures, the Company spent $4.3 million for repairs and
maintenance, or a weighted average of approximately $286 per apartment
unit for the year ended December 31, 1996.

- DEBT FINANCING. The Company's strategy is generally to incur debt to
increase its return on equity while maintaining acceptable interest
coverage ratios. AIMCO seeks to match debt maturities to the character of
the assets financed. Accordingly, AIMCO uses predominantly long-term,
fixed-rate and self-amortizing debt in order to avoid the refunding or
repricing risks of short-term borrowings. The Company also uses short-term
debt financing to fund acquisitions and generally expects to refinance
such borrowings with proceeds from equity offerings or long-term debt
financings. As of June 30, 1997, approximately 16% of the Company's
outstanding debt was short-term debt and 84% was long-term debt.

- DIVIDEND POLICY. AIMCO pays dividends to share its profitability with
AIMCO's stockholders. For the years ended December 31, 1996 and 1995 and
the six months ended June 30, 1997, AIMCO distributed 72.3%, 75.1% and
70.1%, respectively, of FFO to its stockholders. Amounts not distributed
are available for reinvestment, stock repurchases, amortization of debt
and provide a margin to insulate annual dividends from fluctuations in the
Company's business. AIMCO's dividend for the first nine months of 1997 was
$1.3875 per share, equivalent to an annualized dividend of $1.85 per
share. It is the present policy of AIMCO's Board of Directors to increase
the dividend annually in an amount equal to one-half the projected
increase in FFO, adjusted for Capital Replacements. The minimum annual
distribution requirement for REITs, which require the distribution of
approximately 95% of "REIT taxable income" (see "Certain Federal Income
Tax Considerations"), may result in dividends increasing at a greater rate
in the future.

GROWTH STRATEGIES

The Company seeks growth through two primary sources--acquisition and
internal expansion.

ACQUISITION STRATEGIES. The Company believes its acquisition strategies will
increase profitability and predictability of earnings by increasing its
geographic diversification, economies of scale and opportunities to provide
ancillary services to tenants at the AIMCO Properties. Since its IPO in July
1994, excluding the NHP Real Estate Acquisition and the NHP Stock Purchase, the
Company has completed 25 acquisition transactions involving a total of 68
properties for an aggregate purchase price of $714 million, including the
assumption of $397 million of indebtedness, through September 30, 1997.

The Company believes that its demonstrated ability to evaluate and complete
acquisitions, its property management record and its scale economies, to the
extent that the Company can operate a property more efficiently than the
existing owner or some competing purchasers, all provide credibility and
advantage in negotiating acquisitions. In addition, the ability to issue OP
Units to sellers of properties may provide tax deferral opportunities to sellers
and could give the Company an advantage over competing buyers that cannot offer
such tax deferral opportunities. The Company acquires additional properties
primarily in three ways:

- DIRECT ACQUISITIONS. The Company may directly acquire individual
properties or portfolios and controlling interests in entities that own or
control such properties or portfolios. During the nine months ended
September 30, 1997, in addition to the NHP Real Estate Acquisition and
acquisitions through the NHP Stock Purchase, the Company has directly
acquired seven apartment properties for a total consideration

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<PAGE>
of $185 million, consisting of $56 million in cash, approximately 1.9
million OP Units valued at $56 million, and the assumption of $73 million
of indebtedness. See "--Other Recent Acquisitions."

- ACQUISITION OF MANAGED PROPERTIES. The Company believes that its property
management operations support its acquisition activities. Its
relationships with owners of the Managed Properties may provide it with a
means of learning of acquisition opportunities at an early stage of the
sale process. In addition, its familiarity with the property and its
ability to quickly evaluate the property give it an advantage in pursuing
and completing any such acquisition in a timely fashion. Since its IPO,
AIMCO has acquired 12 properties comprising 3,530 units from its managed
portfolio for $129.0 million.

- INCREASING ITS INTEREST IN PARTNERSHIPS. For properties where the Company
owns a general partnership interest in the property-owning partnership,
the Company may seek to acquire, subject to its fiduciary duties to the
partnership, the outstanding limited partnership interests for cash or, in
some cases, in exchange for OP Units.

- In November 1996, the Company acquired the English Partnerships, which
owned 22 apartment properties. The Company subsequently purchased
pursuant to tender offers to acquire all of the outstanding limited
partnership interests of 25 of the English Partnerships, approximately
43%, in the aggregate, of the outstanding limited partnership interests
in such partnerships for $15.2 million in cash and approximately 71,500
OP Units valued at $1.7 million.

- As of September 30, 1997, the Company has also commenced tender offers
to acquire all of the outstanding limited partnership interests in 26
partnerships owning 25 NHP Properties for an aggregate amount of
approximately $79.0 million. Through September 30, 1997, pursuant to
such tender offers, the Company has purchased approximately 20.2%, in
the aggregate, of the outstanding limited partnership interests for
$16.0 million in cash. In addition, as of September 30, 1997, the
Company has received tenders representing approximately an additional
18.8%, in the aggregate, of the outstanding limited partnership
interests.

INTERNAL GROWTH STRATEGIES. The Company pursues internal growth through the
following strategies:

- REVENUE INCREASES. The Company increases rents where feasible and seeks to
improve occupancy rates. The Company believes that its policy of capital
improvements, amenities and customer service allows it to maintain demand
and to increase its rents above the rate of inflation in the local market.
AIMCO's "same store" revenues from the Owned Properties (based on
properties owned from period to period) have grown by 3.3% from the fiscal
year ended December 31, 1995 to that ended December 31, 1996, and by 3.5%
from the six months ended June 30, 1996 to that ended June 30, 1997,
compared to an urban consumer price inflation rate of 2.8% and 2.3% over
the same periods.

- REDEVELOPMENT OF PROPERTIES. The Company believes redevelopment of
selected properties in superior locations provides advantages over
development of new properties, because, compared with new development,
redevelopment generally can be accomplished with relatively lower
financial risk, in less time and with reduced delays attributable to
governmental regulation. Recently the Company acquired and redeveloped Sun
Katcher, a 360-unit property in Jacksonville, Florida, at a cost of $8.9
million, which included $4.9 million in redevelopment costs. The Company
also recently commenced the renovation of Bay West, a 376-unit property in
Tampa, Florida, for a projected cost of $4.8 million, to reposition the
property in the marketplace. In addition, the Company expects to undertake
a major renovation of the Morton Towers apartments, a 1,277 unit property
located in Miami Beach, Florida, at an estimated cost of $35 million. The
Company generally finances redevelopment initially with borrowings from
the Credit Facility, and subsequently arranges permanent financing.

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<PAGE>
Phoenix, Arizona, at a cost of $6.5 million. The Company is planning the
construction of 42 additional units at Township, in Littleton, Colorado,
for a projected cost of more than $3.0 million. In addition, the Company
owns or controls approximately 115 acres of vacant land, adjacent to
existing Owned Properties or Equity Properties, which the Company believes
is suitable for the development of approximately 1,300 apartment units.
The Company generally finances expansions initially with borrowings from
the Credit Facility, and subsequently arranges permanent financing.

- CONVERSION OF AFFORDABLE PROPERTIES; IMPROVEMENT OF PERFORMANCE. The
Company believes that it may be able to significantly increase its return
from its portfolio of affordable properties by improving operations at
some of its properties or by converting some of its properties to
conventional properties. While management of the Company has commenced
review of the affordable properties, it has not yet made any determination
as to the conversion of any affordable property.

- ANCILLARY SERVICES. The Company's management believes that its ownership
and management of the AIMCO Properties provides it with unique access to a
customer base for the sale of additional services which generate
incremental revenues. The Company currently provides cable television,
telephone services, appliance rental, renters' insurance and carport,
garage and storage space rental at certain AIMCO Properties. For example,
as of September 30, 1997, the Company has installed cable television
service to approximately 8,000 units and has more than 5,000 subscribers.

- CONTROLLING EXPENSES. Cost reductions are accomplished by exploiting
economies of scale. As a result of the size of its portfolio and its
creation of regional concentrations of properties, the Company has the
ability to leverage fixed costs for general and administrative
expenditures and certain operating functions, such as insurance,
information technology and training, over a larger property base. For
example, the Company's insurance subsidiary provides workers' compensation
and employer liability insurance company-wide, without incurring material
incremental costs as the Company's property assets grow. Consequently, the
Company estimates that it will achieve annual recurring savings exceeding
$1.2 million by combining the insurance programs of NHP and the Company.
Management of the Company also expects cost savings of approximately $13.3
million from staffing reductions associated with the NHP Acquisition, and
additional savings from elimination of redundant expenses such as public
reporting costs. There can be no assurance, however, that all of such cost
reductions will be achieved.

The Company also instills cost discipline in its property managers by
benchmarking their operations against the local market and other AIMCO
Properties.

S-33
<PAGE>
PROPERTY MANAGEMENT STRATEGIES

REGIONAL HUBS. The Company's property management strategy is to achieve
improvements in operating results by combining centralized financial control and
uniform operating procedures with localized property management decision-making
and market knowledge. The Company's management operations are organized into 13
regional hubs, each supervised by a Regional Vice President, who have on average
17 years of experience in apartment management.

<TABLE>
<CAPTION>
APARTMENT UNITS APARTMENT COMMUNITIES
REGIONAL HUBS MANAGED(1) MANAGED(1)
- ------------------------------------------------------------------------- --------------- -------------------------
<S> <C> <C>
Florida.................................................................. 17,061 63
East (DE, NJ, PA)........................................................ 18,488 83
Mid-Atlantic (DC, MD, VA)................................................ 14,315 72
Midwest (IN, OH, TN, WV)................................................. 8,245 43
North Midwest (IL, MI, MO, MN, WI)....................................... 8,767 60
North Texas (AR, LA, OK, TX)............................................. 14,900 77
Northeast (CT, MA, NH, NY, RI)........................................... 8,482 60
Rocky Mountain (CO, KS, SD, UT).......................................... 7,574 68
South-Atlantic (KY, NC, SC).............................................. 3,758 27
South Texas (TX)......................................................... 13,911 69
Southeast (AL, GA, MS, PR)............................................... 8,071 52
Southwest (AZ, NM, NV)................................................... 7,766 35
West (AK, CA, HI, OR, WA)................................................ 5,682 55
------- ---
Total.................................................................. 137,020 764
</TABLE>

- ---------

(1) Includes only units and apartment communities managed by the Company. Does
not include (i) 13,307 units in 97 apartment communities in which the
Company has an ownership interest but does not manage and (ii) 34,334 units
in the Oxford portfolio, including 2,332 senior living units, all of which
are managed as a separate portfolio.

CUSTOMER SERVICE. The Company believes that resident satisfaction is
directly related to the experience and training of on-site management personnel.
The Company provides on-site management trained to respond promptly to
residents' needs. To improve customer service, the Company conducts annual
resident satisfaction surveys, guarantees that material defects will be
corrected in 24 hours and refunds related rent if that commitment is not met.

PERSONNEL POLICIES. The Company has attempted to reduce turnover and retain
experienced personnel by establishing an employee mentoring program and
providing managers with incentive-based compensation. In addition, managing
properties for third parties, the Company believes, improves performance at
Managed Properties and Owned Properties alike by subjecting property managers to
market-based pricing and service standards.

START. Properties that are behind budget or face other significant
operating difficulties receive direct supervision and intervention from START, a
team of professionals, led by Executive Vice President Steven Ira, a Founder of
AIMCO. Members of START focus on not more than 10 to 15 properties at any one
time, which allows them to focus sharply on the subject properties. START also
oversees due diligence on acquisitions and major construction activities.

MANAGEMENT INCENTIVES. AIMCO believes that equity ownership by management
and equity- and incentive-based compensation are important factors in
attracting, retaining and motivating the most qualified and

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<PAGE>
experienced personnel and directors. AIMCO's goal is to align management's
interests with those of stockholders through the use of equity-based
compensation plans to direct management's efforts towards enhancing shareholder
value.

The following table reflects the ownership of Class A Common Stock and OP
Units by senior management of the Company, which, as of September 30, 1997
(assuming full conversion of OP Units), represented approximately 10.3% of the
outstanding Class A Common Stock.

<TABLE>
<CAPTION>
TOTAL SHARES OF CLASS A
COMMON STOCK AND OP UNITS OWNED PERCENTAGE
BY MANAGEMENT OWNED INVESTMENT VALUE(1)
------------------------------- ---------- -------------------
<S> <C> <C> <C>
Initial Public Offering........ 926,000 8.6% $ 17 million
December 31, 1995.............. 1,067,000 7.7% $ 21 million
December 31, 1996.............. 2,303,000 12.5% $ 65 million
September 30, 1997............. 3,411,000 10.3% $123 million
</TABLE>

-------------

(1) Encumbered by outstanding secured partially recourse notes in the amount
of $30.5 million as of September 30, 1997.

- On July 25, 1997, eleven senior managers of the Company purchased 1.1
million shares of Class A Common Stock at a price of $30 per share in
exchange for promissory notes secured by such stock, which notes are
recourse as to 25% of the principal owed. See "--Recent Financings."

- AIMCO pays a majority of the compensation to its outside directors in
Class A Common Stock.

- AIMCO issues all stock options at the then-current market price, and
requires that employees own Class A Common Stock before receiving their
options. As of September 30, 1997, the number of outstanding options was
553,646.

THE NHP ACQUISITION

Pursuant to the Stock Purchase Agreement, AIMCO and ANHI have acquired an
aggregate of 6,930,122 shares of NHP Common Stock, representing approximately
53.4% of the shares of NHP Common Stock outstanding as of September 30, 1997.
NHP provides a broad array of real estate services nationwide including property
management and asset management, as well as a group of related services
including equity investments, purchasing, risk management and home health care.
As of September 30, 1997, NHP's management portfolio included 732 properties
containing 79,208 conventional units and 55,102 affordable units located in 38
states, the District of Columbia and Puerto Rico. Among the properties it
manages, NHP owns 12 properties containing 2,905 apartment units. NHP also
conducts mortgage banking services through WMF.

In June 1997, the Company acquired the NHP Real Estate Companies, which hold
interests in partnerships that own 534 conventional and affordable multifamily
apartment properties containing 87,659 units, a captive insurance subsidiary and
certain related assets. The Company paid aggregate consideration of $54.8
million in cash and warrants to purchase 399,999 shares of Class A Common Stock
at an exercise price of $36 per share. A substantial majority of the NHP
Properties are currently managed by NHP pursuant to the Master Property
Management Agreement. The Company is currently engaged in the NHP Real Estate
Reorganization, which will result in the vast majority of the assets of the NHP
Real Estate Companies being owned by the Unconsolidated Partnership.

The NHP Real Estate Acquisition involved three distinct investments in real
estate:

- The Company acquired general and certain limited partnership interests in
various partnerships that own 11,078 apartment units in 34 conventional
Class A and Class B apartment properties. AIMCO is presently in the
process of making tender offers to the limited partners of 26 of such
partnerships to

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<PAGE>
acquire their partnership interests for an aggregate amount of
approximately $79 million. See "--Growth Strategies--Acquisition
Strategies--Increasing its Interest in Partnerships."

- The Company acquired general and certain limited partnership interests in
various partnerships that own 9,996 apartment units in 44 Class C
apartment properties.

- The Company also acquired general and certain limited partnership
interests in various partnerships that own 50,309 affordable housing units
and 15,004 Class C apartment units in 462 affordable and conventional
apartment properties. The Company's long-term strategy for the affordable
portfolio is to take advantage of potential opportunities from the
potential restructuring of HUD assistance or insurance programs, or to
liquidate such properties while continuing to realize management fees from
the portfolio. In addition, the Company believes that it may be able to
significantly increase its return from its affordable portfolio by
improving operations at some properties or by converting some properties
to conventional properties. See "--Growth Strategies--Internal Growth
Strategies--Conversion of Affordable Properties; Improvement of
Performance."

AIMCO is seeking to acquire the remaining outstanding shares of NHP Common
Stock pursuant to the NHP Merger in which Merger Sub will be merged with and
into NHP, with NHP being the surviving corporation after the Merger and becoming
a wholly owned subsidiary of AIMCO. The NHP Merger would be effected pursuant to
the Merger Agreement, which provides that, upon consummation of the NHP Merger,
each outstanding share of NHP Common Stock, other than NHP Common Stock held by
NHP, AIMCO or Merger Sub, will be converted (subject to certain exceptions) into
the right to receive: (i) 0.74766 shares of Class A Common Stock, or (ii) at the
election of the holder, 0.37383 shares of Class A Common Stock and $10.00 in
cash. As of September 30, 1997, there were 12,981,939 shares of NHP Common Stock
outstanding, including 6,151,049 shares owned by AIMCO and 779,073 shares owned
by ANHI, and 826,250 outstanding options to purchase NHP Common Stock. In the
NHP Merger, outstanding options to purchase shares of NHP Common Stock will be
converted into options to purchase shares of Class A Common Stock. The NHP
Merger is subject to a number of conditions, including the approval of the
stockholders of both NHP and AIMCO. Accordingly, there can be no assurance that
the proposed NHP Merger will be completed. If completed, the NHP Merger is
subject to a number of risks. See "Risk Factors--Risks Associated with the NHP
Acquisition."

In the NHP Merger, NHP will become a wholly owned subsidiary of AIMCO.
However, immediately following the NHP Merger, AIMCO intends to engage in the
NHP Reorganization that will result in the Master Property Management Agreement
being terminated and NHP's operations being conducted through the Unconsolidated
Subsidiaries. It is expected that the Unconsolidated Subsidiaries will have an
ownership structure similar to ANHI, in which AIMCO holds a 95% economic
interest through ownership of shares of non-voting preferred stock, and certain
directors and officers of AIMCO hold a 5% economic interest through direct or
indirect ownership of all of the outstanding shares of common stock. As a result
of the controlling ownership interest in the Unconsolidated Subsidiaries held by
such directors and officers, AIMCO will account for its interest in the
Unconsolidated Subsidiaries on the equity method.

Pursuant to rights distributed to NHP stockholders in May 1997, subject to
certain conditions, on the earlier of the effective time of the NHP Merger or
December 1, 1997, all of the outstanding shares of WMF common stock will be
distributed to NHP stockholders. Shares of WMF common stock issued to AIMCO and
ANHI in the WMF Spin-Off will be transferred to the sellers of NHP Common Stock
under the Stock Purchase Agreement.

OTHER RECENT ACQUISITIONS

The Company has during the past two years increased substantially the number
of properties owned or managed by it from 33,271 units in 185 properties at
December 31, 1994, to 186,993 units in 1,029 properties at September 30, 1997.
In addition to the NHP Stock Purchase and the NHP Real Estate Acquisition, AIMCO
completed the following acquisitions (among others) during the nine months ended
September 30, 1997:

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<PAGE>
WINDWARD AT THE VILLAGES. In October, the Company purchased Windward, a
196-unit apartment community built in 1988, located in West Palm Beach, Florida,
for approximately $10.8 million. Windward is adjacent to the Bear Lakes Country
Club and Golf Course in the Villages of Palm Beach Lakes master planned golf
course community.

MORTON TOWERS. In September, the Company, through two subsidiary limited
partnerships in which the Company is the sole general partner and has an
aggregate interest of approximately 77%, acquired the Morton Towers apartments,
a 1,277-unit, twin tower high rise apartment complex built in 1960, located in
Miami Beach, Florida, for $63 million, including approximately 1.4 million OP
Units valued at $42 million. The Company expects to undertake a major renovation
of the complex at a total cost of $35 million.

THE VININGS. In June, the Company acquired The Vinings at the Waterways, a
180-unit luxury garden-style apartment communities built in 1991, located in
Aventura, Florida, for approximately $16.4 million. The Vinings is located by a
yacht basin and marina directly accessing the Intracoastal Waterway and is also
adjacent to a commercial center.

PROPERTIES SUBJECT TO LETTER OF INTENT OR CONTRACT

In the ordinary course of the Company's business, the Company is engaged in
discussions and negotiations with property owners regarding the purchase of
apartment properties or interests in apartment properties. The Company
frequently enters into letters of intent, which may be binding or nonbinding,
and contracts with respect to the purchase of real property which are subject to
certain conditions and which permit the Company to terminate the contract in its
sole and absolute discretion if it is not satisfied with the results of its due
diligence investigation of the properties under contract. The Company's
management believes that such contracts essentially result in the creation of an
option on the property subject to the contract and give the Company greater
flexibility in seeking to acquire properties. As of September 30, 1997, the
Company had under letter of intent or contract an aggregate of 26 multi-family
apartment properties (exclusive of the Winthrop Portfolio and Windward) with a
maximum aggregate purchase price of $315 million, which, in some cases, may be
paid in the form of assumption of existing debt. All such contracts are subject
to termination by the Company as described

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<PAGE>
above. Due diligence with respect to these properties is generally not completed
and there is no assurance that any transaction will occur or that they will
occur on the terms currently contemplated.

On August 22, 1997, the Operating Partnership entered into the Purchase
Agreement with 27 limited partnerships affiliated with Winthrop Financial
Associates for the purchase of the Winthrop Portfolio. The Purchase Agreement
provided the Operating Partnership with a "due diligence" period to inspect the
Winthrop Portfolio. On October 15, 1997, the Company determined not to exercise
its option to terminate the Purchase Agreement and, as of such date, became
committed, subject to the terms and conditions of the Purchase Agreement, to
purchase the Winthrop Portfolio.

RECENT INVESTMENT

AMBASSADOR APARTMENTS. In September the Company filed a Schedule 13D with
the Securities and Exchange Commission stating that it acquired 886,600 shares
of common stock of Ambassador Apartments, Inc., a publicly traded REIT
("Ambassador"), representing 8.45% of the shares outstanding as reported in
Ambassador's Form 10-Q for the quarter ended June 30, 1997.

RECENT FINANCINGS

In July 1997, the Company agreed to sell 1.1 million newly issued shares of
Class A Common Stock at a price of $30 per share, the closing price of the stock
on the date of purchase, to certain members of senior management of AIMCO. In
payment for the stock, such members of senior management executed notes payable
to AIMCO totalling $33.0 million (of which $9.8 million has been repaid),
bearing interest at 7.25% per annum, payable quarterly, and due in ten years.
The stock purchase notes are secured by the stock purchased and are recourse as
to 25% of the principal owed.

In August 1997, AIMCO sold 750,000 shares of newly issued Class B Preferred
Stock for gross proceeds of $75 million in cash to an institutional investor in
a private transaction. Holders of the Class B Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors, quarterly cash
dividends per share equal to the greater of (i) $1.78125 and (ii) the cash
dividends declared on the number of shares of Class A Common Stock into which
one share of Class B Preferred Stock is convertible. On or after August 4, 1998,
each share of Class B Preferred Stock is convertible at the option of the holder
into 3.28407 shares of Class A Common Stock, subject to certain anti-dilution
adjustments. The Class B Preferred Stock is senior to the Class A Common Stock
as to dividends and liquidation. The proceeds from the sale of the Class B
Preferred Stock were used to repay borrowings outstanding under the Credit
Facility and to provide working capital.

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<PAGE>
351,795 additional shares of NHP Common Stock from a third party pursuant to the
Stock Purchase Agreement and contributed the remaining $35.5 million to the
Operating Partnership. ANHI used $74.3 million of proceeds from its sale of NHP
Common Stock to AIMCO to repay in full outstanding borrowings under the ANHI
Credit Facility, including accrued interest, and terminated the ANHI Credit
Facility. Borrowings under the ANHI Credit Facility were incurred to purchase
NHP Common Stock in the NHP Stock Purchase. ANHI also distributed $40.0 million
of proceeds from the sale of shares of NHP Common Stock to the Operating
Partnership, which holds a 95% interest in ANHI, and Messrs. Considine and
Kompaniez, who hold in the aggregate a 5% interest in ANHI. Messrs. Considine
and Kompaniez received a distribution of $2.0 million in connection with such
sale and used such proceeds to repay in part outstanding promissory notes
payable by them to ANHI in an aggregate principal amount of $3.2 million. The
loans were incurred by them to acquire their interest in ANHI.

ACCOUNTING POLICIES AND DEFINITIONS

AIMCO has the following accounting policies and definitions:

FFO is defined as income (loss) before minority interest in Operating
Partnership, computed in accordance with GAAP, excluding gains and losses from
debt restructuring and sales of property, plus real estate related depreciation
and amortization (excluding amortization of financing costs), and after
adjustments for unconsolidated partnerships and joint ventures. In addition,
AIMCO adjusts FFO for minority interest in the Operating Partnership,
amortization of management company goodwill, the non-cash deferred portion of
the income tax provision for unconsolidated subsidiaries and the payment of
dividends on preferred stock. AIMCO's management believes that presentation of
FFO provides investors with an industry accepted measurement which helps
facilitate understanding of AIMCO's ability to meet required dividend payments,
capital expenditures, and principal payments on its debt. There can be no
assurance that AIMCO's basis of computing FFO is comparable with that of other
REITs.

AIMCO capitalizes spending for items which generally cost more than $250 and
have a useful life of more than one year, such as carpet replacement, new
appliances, new roofs or parking lot repaving. Capitalized spending which
maintains a property is termed a "Capital Replacement." In the experience of
AIMCO's management, this spending is better considered a recurring cost of
preserving an asset rather than as an additional investment.

Capital spending which adds a material new feature or revenue source is
called a "Capital Enhancement" and is capitalized as part of AIMCO's investment.
Common examples are construction of new garages, storage areas and cable
television installation.

For financial reporting purposes, AIMCO consolidates entities in which it
owns both a general partnership interest and controls investment decisions with
respect to the underlying assets. AIMCO generally has a 30% to 51% economic
interest in such entities. Entities in which AIMCO has less than a 30% economic
interest or limited control are accounted for on the equity method.

AIMCO policy is generally to hold Class C properties and affordable
properties (substantially all of which are Class C properties) in unconsolidated
partnerships. AIMCO accounts for these properties on the equity method in
accordance with GAAP.

EXECUTIVE OFFICES

The Company's principal executive offices are located at 1873 South Bellaire
Street, 17th Floor, Denver, Colorado 80222, and its telephone number is (303)
757-8101.

S-39
<PAGE>
BOARD OF DIRECTORS AND OFFICERS

The directors and executive officers of AIMCO, their ages, dates they were
first elected and their positions with AIMCO or on the Board of Directors are
set forth below.

<TABLE>
<CAPTION>
NAME AGE FIRST ELECTED POSITION
- ------------------------------ --- ------------------ -------------------------------------------------------
<S> <C> <C> <C>
Terry Considine............... 50 July 1994 Chairman of the Board of Directors and Chief Executive
Officer
Peter K. Kompaniez............ 52 July 1994 President and Vice Chairman
Steven D. Ira................. 47 July 1994 Executive Vice President--START
Thomas W. Toomey.............. 37 January 1996 Executive Vice President--Finance and Administration
David L. Williams............. 52 January 1997 Executive Vice President--Property Operations
Joseph DeTuno................. 52 September 1997 Senior Vice President--Property Redevelopment
Jack W. Marquardt............. 41 September 1997 Senior Vice President--Accounting
Leeann Morein................. 43 July 1994 Senior Vice President, Chief Financial Officer and
Secretary
R. Scott Wesson............... 34 July 1997 Senior Vice President--Chief Information Officer
Harry G. Alcock............... 33 July 1996 Vice President--Acquisitions
Patti K. Fielding............. 34 February 1997 Vice President--Asset Management
Dora E. Chi................... 37 July 1997 Vice President--Asset Management
Patricia K. Heath............. 43 July 1994 Vice President and Chief Accounting Officer
Carla Stoner.................. 35 July 1997 Vice President--Finance and Administration
James Wallace................. 45 October 1997 Vice President--Tax
Richard S. Ellwood............ 65 July 1994 Director; Chairman, Audit Committee
J. Landis Martin.............. 51 July 1994 Director
Thomas L. Rhodes.............. 57 July 1994 Director; Chairman, Compensation Committee
John D. Smith................. 69 November 1994 Director
</TABLE>

The following is a biographical summary of the experience of the current
directors and executive officers of AIMCO for the past five years or more.

TERRY CONSIDINE. Mr. Considine has been Chairman of the Board of Directors
and Chief Executive Officer of AIMCO since July 1994. He is the sole owner of
Considine Investment Co. and prior to July 1994 was owner of approximately 75%
of Property Asset Management, L.L.C., Limited Liability Company, a Colorado
limited liability company, and its related entities (collectively, "PAM"), one
of AIMCO's predecessors. On October 1, 1996, Mr. Considine was appointed
Co-Chairman and director of Asset Investors Corp. and Commercial Asset
Investors, Inc., two other public real estate investment trusts, and appointed
as a director of Financial Assets Management, LLC, a real estate investment
trust manager. Mr. Considine has been involved as a principal in a variety of
real estate activities, including the acquisition, renovation, development and
disposition of properties. Mr. Considine has also controlled entities engaged in
other businesses such as television broadcasting, gasoline distribution and
environmental laboratories. Mr. Considine received a B.A. from Harvard College,
a J.D. from Harvard Law School and is admitted as a member of the Massachusetts
Bar. He served as a Colorado State Senator from 1987-1992 and in 1992 was the
Republican nominee for election to the United States Senate from Colorado.

Mr. Considine has had substantial multifamily real estate experience. 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. 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.

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<PAGE>
PETER K. KOMPANIEZ. Mr. Kompaniez has been Vice Chairman and a director of
AIMCO since July 1994, and was appointed President in July 1997. Mr. Kompaniez
has also served as Chief Operating Officer of NHP and President of NHP Partners
since June 1997. Since September 1993, Mr. Kompaniez has owned 75% of PDI Realty
Enterprises, Inc., a Delaware corporation ("PDI"), one of AIMCO's predecessors,
and serves as its President and Chief Executive Officer. From 1986 to 1993, he
served as President and Chief Executive Officer of Heron Financial Corporation
("HFC"), a United States holding company for Heron International, N.V.'s real
estate and related assets. While at HFC, Mr. Kompaniez administered the
acquisition, development and disposition of approximately 8,150 apartment units
(including 6,217 units that have been acquired by AIMCO) and 3.1 million square
feet of commercial real estate. Prior to joining HFC, Mr. Kompaniez was a senior
partner with the law firm of Loeb and Loeb where he had extensive real estate
and REIT experience. Mr. Kompaniez received a B.A. from Yale College and a J.D.
from the University of California (Boalt Hall).

The downturn in the real estate markets in the late 1980s and early 1990s
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 transactions effected at the time of the
initial public offering of Class A Common Stock, Mr. Kompaniez was appointed
Vice Chairman of AIMCO and substantially all of the property management assets
of PDI were transferred or assigned to AIMCO.

STEVEN D. IRA. Mr. Ira has served as Executive Vice President of AIMCO
since July 1994. From 1987 until July 1994, he served as President of PAM. Prior
to merging his firm with PAM in 1987, Mr. Ira acquired extensive experience in
property management. Between 1977 and 1981 he supervised the property management
of over 3,000 apartment and mobile home units in Colorado, Michigan,
Pennsylvania and Florida, and in 1981 he joined with others to form the property
management firm of McDermott, Stein and Ira. Mr. Ira served for several years on
the National Apartment Manager Accreditation Board and is a former president of
both the National Apartment Association and the Colorado Apartment Association.
Mr. Ira is the sixth individual elected to the Hall of Fame of the National
Apartment Association in its 54-year history. He holds a Certified Apartment
Property Supervisor (CAPS) and a Certified Apartment Manager designation from
the National Apartment Association, a Certified Property Manager (CPM)
designation from the National Institute of Real Estate Management (IREM) and he
is a member of the Boards of Directors of the National Multi-Housing Council,
the National Apartment Association and the Apartment Association of Metro
Denver. Mr. Ira received a B.S. from Metropolitan State College in 1975.

Although Mr. Ira has had substantial multifamily real estate experience, 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.

S-41
<PAGE>
THOMAS W. TOOMEY. Mr. Toomey has served as Senior Vice President--Finance
and Administration of AIMCO since January 1996 and was promoted to Executive
Vice President--Finance and Administration in March 1997. From 1990 until 1995,
Mr. Toomey served in a similar capacity with Lincoln Property Company ("LPC") as
Vice President/Senior Controller and Director of Administrative Services of
Lincoln Property Services where he was responsible for LPC's computer systems,
accounting, tax, treasury services and benefits administration. From 1984 to
1990, he was an audit manager with Arthur Andersen & Co. where he served real
estate and banking clients. From 1981 to 1983, Mr. Toomey was on the audit staff
of Kenneth Leventhal & Company. Mr. Toomey received a B.S. in Business
Administration/Finance from Oregon State University and is a Certified Public
Accountant.

DAVID L. WILLIAMS. Mr. Williams has been Executive Vice
President--Operations of AIMCO since January 1997. Prior to joining AIMCO, Mr.
Williams was Senior Vice President of Operations at Evans Withycombe
Residential, Inc. from January 1996 to January 1997. Previously, he was
Executive Vice President at Equity Residential Properties Trust from October
1989 to December 1995. He has served on National Multi-Housing Council Boards
and NAREIT committees. M. Williams also served as Senior Vice President of
Operations and Acquisitions of US Shelter Corporation from 1983 to 1989. Mr.
Williams has been involved in the property management, development and
acquisition of real estate properties since 1973. Mr. Williams received his B.A.
in education and administration from the University of Washington in 1967.

JOSEPH DETUNO. Mr. DeTuno has been Senior Vice President--Property
Redevelopment of AIMCO since September 1997. Mr. DeTuno was president and
founder of JD Associates, his own full service real estate consulting, advisory
and project management company which he founded in 1990. JD Associates provided
development management, financial analysis, business plan preparation and
implementation services. Previously, Mr. DeTuno served as President/Partner of
Gulfstream Commercial Properties, President and Co-managing Partner of Criswell
Development Company, Vice President of Crow Hotel and Company and Project
Director with Perkins & Will Architects and Planners. Mr. DeTuno received his
B.A. in architecture and is a registered architect in Illinois and Texas.

JACK W. MARQUARDT. Mr. Marquardt has been Senior Vice President--Accounting
of AIMCO since September 1997. Mr. Marquardt brings over 17 years of real estate
accounting experience to AIMCO. From October 1992 through August 1997, Mr.
Marquardt served as Vice President/Corporate Controller and Manager of Data
Processing for Transwestern Property Company, where he was responsible for
corporate accounting, tax, treasury services and computer systems. From August
1986 through September 1992, Mr. Marquardt worked in the real estate accounting
area of Aetna Realty Investors, Inc. serving as Regional Controller from April
1990 through September 1992. Mr. Marquardt received a B.S. in Business
Administration/Finance from Ohio State University.

LEEANN MOREIN. Ms. Morein has served as Senior Vice President, Chief
Financial Officer and Secretary of AIMCO since July 1994. From September 1990 to
March 1994, Ms. Morein served as Chief Financial Officer of the real estate
subsidiaries of California Federal Bank, including the general partner of CF
Income Partners, L.P., a publicly-traded master limited partnership. Ms. Morein
joined California Federal in September 1988 as Director of Real Estate
Syndications Accounting and became Vice President--Financial Administration in
January 1990. From 1983 to 1988, Ms. Morein was Controller of Storage Equities,
Inc., a real estate investment trust, and from 1981 to 1983, she was Director of
Corporate Accounting for Angeles Corporation, a real estate syndication firm.
Ms. Morein worked on the audit staff of Price Waterhouse from 1979 to 1981. Ms.
Morein received a B.A. from Pomona College and is a Certified Public Accountant.

S-42
<PAGE>
R. SCOTT WESSON. Mr. Wesson has been Senior Vice President--Chief
Information Officer of AIMCO since July 1997. From 1994 until 1997, Mr. Wesson
served as Vice President of Information Services at Lincoln Property Company,
where he was responsible for information systems infrastructure, technology
planning and business process re-engineering. From 1992 to 1994, Mr. Wesson
served in the role of Director of Network Services for Lincoln Property Company,
where he was responsible for the design and deployment of the company's Wide
Area Network and Local Area Networks, comprising over 2,500 workstations in over
40 locations nationwide. From 1988 to 1992, he was a systems consultant with
Automatic Data Processing involved in design, planning and deployment of
financial and human resources systems for several major, multi-national
organizations. From 1984 to 1987, he was a Senior Analyst with Federated
Department Stores, Inc. involved in planning and distribution. Mr. Wesson
received his B.S. from the University of Texas in 1984.

HARRY G. ALCOCK. Mr. Alcock has served as Vice President since July 1996,
with responsibility for acquisition and financing activities since July 1994.
From June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst
for PDI and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development
Corp., a Los Angeles based real estate developer, with responsibility for
raising debt and joint venture equity to fund land acquisitions and development.
From 1987 to 1988, Mr. Alcock worked for Ford Aerospace Corp. He received his
B.S. from San Jose State University.

DORA E. CHI. Ms. Chi has served as Vice President of Finance of AIMCO since
July 1997, with responsibility for limited partnership activities, including
tender offers and refinancings. From January 1996 to July 1997, Ms. Chi served
as Underwriting Manager for Flatiron Credit Co., LLC. From September 1989 to
December 1995, she was the Administrator/Corporate Secretary-Treasurer at The
Law Firm of JPG, PC., and from April 1986 to July 1989 served as Vice President
at Cairn Housing Investments. She brings over fifteen years of experience in
finance and accounting and attended the University of Arizona.

PATTI K. FIELDING. Ms. Fielding has served as a Vice President--Asset
Management since February 1997, concentrating in the area of limited partnership
acquisitions. From February 1996 until February 1997, Ms. Fielding served as a
Vice President with Hanover Capital Corp., headquartered in New York where she
was responsible for the commercial underwriting and CMBS efforts of the firm.
From February 1994 to November 1996 she was Vice Chairman and Principal of
CapSource Funding Corp., which was purchased by MIG Financial Group in 1996.
From 1987 to February 1994, Ms. Fielding was with Duff & Phelps ("D&P") rating
agency in the Commercial Real Estate Structured Finance Group. Her last position
held at D&P was Group Vice President. Prior to D&P, Ms. Fielding was a
Commercial Real Estate Appraiser with American Appraisal Associates. Ms.
Fielding has a B.S. in Business from Cardinal Stritch College.

PATRICIA K. HEATH. Ms. Heath has served as Vice President and Chief
Accounting Officer of AIMCO since July 1994. From 1992 until July 1994, Ms.
Heath served as Manager of Accounting, then Chief Financial Officer of HFC and,
effective September 1993, as Chief Financial Officer of PDI. She had
responsibility for all internal and external financial reporting, cash
management and budgeting for HFC, its subsidiaries, related joint ventures and
partnerships and for PDI. Ms. Heath brings 15 years of real estate accounting
experience to AIMCO, having served as Controller for the real estate investment,
development and syndication firms of Guilford Glazer & Associates from 1990 to
1992, Ginarra Holdings, Inc. from 1984 to 1990, and Fox & Carskadon Financial
Corporation from 1980 to 1983. Ms. Heath worked from 1978 to 1980 as an auditor
with Deloitte, Haskins and Sells. She received her B.S. in Business from
California State University at Chico and is a Certified Public Accountant.

CARLA STONER. Ms. Stoner has been Vice President--Finance and
Administration of AIMCO since July 1997. Ms. Stoner served as Vice President of
NHP Management Company since January 1992. She has also served as Chief
Information Officer for NHP since June 1996. From January 1992 through June
1996, Ms. Stoner was Vice President of Finance for NHP Management Company,
responsible for general ledger accounting, financial analysis and third party
reporting for all properties owned and managed by NHP. Ms. Stoner joined NHP in
December 1988 as Director of Finance for Property Accounting. From July 1984
through December 1988, Ms. Stoner was a Senior Auditor with the public
accounting firm of Touche Ross, serving primarily the real estate industry. Ms.
Stoner received her B.S. in accounting from Virginia Tech.

S-43
<PAGE>
JAMES WALLACE. Mr. Wallace has been Vice President of Tax for AIMCO since
October 1997. From 1995 to September 1997, Mr. Wallace served as the Assistant
Corporate Controller/Assistant Secretary for Fleming Companies, Inc. in Oklahoma
City. From 1980 to 1995, Mr. Wallace was the Director of Corporate Taxation/
Assistant Secretary for that organization. From 1978 to 1980, Mr. Wallace served
as a Senior Tax Consultant with Deloitte & Touche, and from 1973 to 1977 he was
the Managing Partner at Nelon & Wallace, CPAs. Mr. Wallace received a B.S. in
Business Administration from Oklahoma State University and has been a Certified
Public Accountant since 1975.

RICHARD S. ELLWOOD. Mr. Ellwood was appointed a director of AIMCO in July
1994 and is currently Chairman of the Audit Committee. Mr. Ellwood is the
founder and President of R.S. Ellwood & Co., Incorporated, a real estate
investment banking firm. Prior to forming R.S. Ellwood & Co., Incorporated in
1987, Mr. Ellwood had 31 years experience as an investment banker, serving as:
Managing Director and senior banker at Merrill Lynch Capital Markets from 1984
to 1987; Managing Director at Warburg Paribas Becker from 1978 to 1984; general
partner and then Senior Vice President and a director at White, Weld & Co. from
1968 to 1978; and in various capacities at J.P. Morgan & Co. from 1955 to 1968.
Mr. Ellwood currently serves as a director of Corporate Realty Income Trust and
FelCor Suite Hotels, Inc. He is a registered investment advisor.

J. LANDIS MARTIN. Mr. Martin was appointed a director of AIMCO in July
1994. Mr. Martin has served as President, Chief Executive Officer and a director
of NL Industries, Inc., a manufacturer of specialty chemicals, since 1987. Since
1988, he has served as the President and Chief Executive Officer of Tremont
Corporation, an integrated producer of titanium metals. Mr. Martin has also
served as a director and the Chairman of the Board of Directors of Tremont
Corporation since August 1990. From December 1988 until January 1994, he served
as Chairman of the Board of Directors of Baroid Corporation, an oilfield
services company. In January 1994, Baroid Corporation became a wholly owned
subsidiary of Dresser Industries, Inc. and Mr. Martin currently serves as a
director of Dresser Industries, Inc. Mr. Martin also serves as Chairman of the
Board and Chief Executive Officer of Titanium Metals Corporation, an integrated
producer of titanium.

THOMAS L. RHODES. Mr. Rhodes was appointed a director of AIMCO in July 1994
and is currently Chairman of the Compensation Committee. Mr. Rhodes has served
as the President and a director of NATIONAL REVIEW since 1992. From 1976 to
1992, he held various positions at Goldman, Sachs & Co. and was elected a
General Partner in 1986. He also served as a director of Underwriters
Reinsurance Company from 1987 to 1993 and was a member of the Advisory Board of
TransTerra Co. during 1993. He currently serves as Co-Chairman and director of
Financial Assets Management, LLC and its subsidiaries, and as a director of
Delphi Financial Group, Inc. and its subsidiaries, The Lynde and Harry Bradley
Foundation, and the Reserve Special Portfolio Trusts. Mr. Rhodes is Chairman of
the Empire Foundation for Policy Research, a Trustee of The Heritage Foundation,
a Trustee of The Manhattan Institute, a Board Member of the National Center for
Neighborhood Enterprise and a Member of the Council on Foreign Relations.

JOHN D. SMITH. Mr. Smith was appointed a director of AIMCO in November
1994. Mr. Smith is Principal and President of John D. Smith Developments. Mr.
Smith has been a shopping center developer, owner and consultant for over 8.6
million square feet of shopping center projects including Lenox Square in
Atlanta, Georgia. Mr. Smith is a Trustee and former President of the
International Council of Shopping Centers and was selected to be a member of the
American Society of Real Estate Counselors. Mr. Smith served as a director for
Pan-American Properties, Inc. (National Coal Board of Great Britain) formerly
known as Continental Illinois Properties. He also serves as a director of
American Fidelity Assurance Companies and is retained as an advisor by Shop
System Study Society, Tokyo, Japan.

S-44
<PAGE>
UNDERWRITING

Upon the terms and subject to the conditions stated in the underwriting
agreement, dated the date hereof (the "Underwriting Agreement"), each
Underwriter named below has severally agreed to purchase, and AIMCO has agreed
to sell to such Underwriter, the number of shares of Class A Common Stock set
forth opposite the name of such Underwriter.

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- ------- ----------
<S> <C>
Smith Barney Inc............................................................................ 1,166,700
BT Alex. Brown Incorporated................................................................. 1,166,660
Lehman Brothers Inc......................................................................... 1,166,660
Merrill Lynch, Pierce, Fenner & Smith 1,166,660
Incorporated..............................................................................
Raymond James & Associates, Inc............................................................. 1,166,660
The Robinson-Humphrey Company, LLC.......................................................... 1,166,660
----------
Total..................................................................................... 7,000,000
----------
----------
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares is subject to approval
of certain legal matters by their counsel and to certain other conditions. The
Underwriters are obligated to take and pay for all the shares of Class A Common
Stock offered hereby (other than those covered by the over-allotment option
described below) if any such shares are taken.

The Underwriters listed above propose to offer part of the shares directly
to the public at the public offering price set forth on the cover of this
Prospectus Supplement and part of the shares to certain dealers at a price which
represents a concession not in excess of $1.12 per share under the public
offering price. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $0.10 per share to certain other dealers. After the
initial offering of the shares to the public, the public offering price and
other selling terms may be changed by the Underwriters.

AIMCO has granted to the Underwriters an option, exercisable for thirty days
from the date of this Prospectus Supplement, to purchase up to 1,050,000
additional shares of Class A Common Stock from AIMCO at the price to the public
set forth on the cover page of this Prospectus Supplement minus the underwriting
discounts and commissions. The Underwriters may exercise such option solely for
the purpose of covering over-allotments, if any, in connection with the offering
of the shares offered hereby. To the extent that such option is exercised, each
Underwriter will be obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number of
shares set forth opposite each Underwriter's name in the preceding table bears
to the total number of shares listed in such table.

In connection with this offering and in compliance with applicable law, the
Underwriters may overallot (i.e., sell more Class A Common Stock than the total
amount shown on the list of Underwriters and participations which appears above)
and may effect transactions which stabilize, maintain or otherwise affect the
market price of the Class A Common Stock at levels above those which might
otherwise prevail in the open market. Such transactions may include placing bids
for the Class A Common Stock or effecting purchases of the Class A Common Stock
for the purpose of pegging, fixing or maintaining the price of the Class A
Common Stock or for the purpose of reducing a syndicate short position created
in connection with the offering. A syndicate short position may be covered by
exercise of the option described above in lieu of or in addition to open market
purchases. In addition, the contractual arrangements among the Underwriters
include a provision whereby, if Smith Barney Inc. purchases Class A Common Stock
in the open market for the account of the underwriting syndicate and the
securities purchased can be traced to an Underwriter or member of the selling
group, the underwriting syndicate may require the Underwriter or selling group
member in question to purchase the Class A Common Stock in question at the cost
price to the syndicate or may recover from (or decline to pay to) the
Underwriter or selling group member in question the selling concession
applicable to the securities in

S-45
<PAGE>
question. The Underwriters are not required to engage in any of these activities
and any such activities, if commenced, may be discontinued at any time.

AIMCO and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.

Smith Barney Inc. and its affiliates have acted as financial advisor and
lender to AIMCO and may in the future from time to time in the ordinary course
of business act as financial advisor or lender to the Company.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

TAXATION OF FOREIGN SHAREHOLDERS

The following discussion of recently enacted legislation, affecting the
ownership and disposition of the Class A Common Stock by a Non-U.S. Holder (as
defined below), supplements the discussion set forth in the accompanying
Prospectus under the heading "Certain Federal Income Tax Considerations." 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 any state thereof, (iii)
an estate whose income is includable in gross income for U.S. Federal income tax
purposes regardless of its source, or (iv) a trust the income of which is
includible in gross income for U.S. Federal income tax purposes, regardless of
its source or, for tax years beginning after December 31, 1996 (and, if a
trustee so elects, for tax years after August 20, 1996), a trust if a United
States court is able to exercise primary supervision over the administration of
such trust and one or more United States fiduciaries have the authority to
control all substantial decisions of such trust. This discussion is based on
current law and is for general information only.

Unless the Class A Common Stock constitutes a United States real property
interest ("USRPI") within the meaning of the Foreign Investment in Real Property
Tax Act of 1980 ("FIRPTA"), distributions by AIMCO which are not dividends out
of the current and accumulated 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 the
current and accumulated earnings and profits, the distribution will be subject
to withholding tax at the rate applicable to dividends. A Non-U.S. Holder may
seek a 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 the Company.

Notwithstanding the discussion in the preceding paragraph, if the Class A
Common Stock constitutes a USRPI, under recently enacted legislation which
became effective in August 1996, such distribution will be subject to 10 percent
withholding and may also be subject to tax under FIRPTA. The Class A Common
Stock will not constitute a USRPI so long as AIMCO is a "domestically controlled
REIT." AIMCO believes that it currently is a domestically controlled REIT.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Recently proposed United States Treasury Department regulations (the
"Proposed Regulations") could affect the procedures to be followed by holders of
Class A Common Stock in complying with United States Federal withholding, backup
withholding and information reporting rules. The Proposed Regulations are not
currently effective but, if finalized in their current form, would be effective
for payments made after December 31, 1997. Holders are urged to consult their
tax advisors regarding the tax consequences, if any, of the Proposed
Regulations, on the purchase, ownership and sale of the Class A Common Stock.

RECENT LEGISLATION APPLICABLE TO REITS

The Taxpayer Relief Act of 1997 enacted on August 5, 1997 (the "Act") made
various changes to the Code, including to the provisions that govern the Federal
income tax treatment of REITs. These changes to the REIT provisions are
generally effective for taxable years beginning after the date of the enactment
of the Act. For most REITs, including AIMCO, these changes to the REIT
provisions are therefore not effective until taxable years

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beginning on January 1, 1998. The discussion of the Federal income tax treatment
of a REIT in the Prospectus under the heading "Certain Federal Income Tax
Considerations" does not reflect the changes made by the Act to the REIT
provisions of the Code.

The Act makes a number of changes relating to the qualification and taxation
of REITs including the following. First, a REIT will be able to provide certain
services directly without disqualifying all of the rent from the property where
the services are provided if the payment for such services does not exceed 1% of
the gross income from the property. Second, a REIT's wholly-owned subsidiary
will be treated as a "qualified REIT subsidiary" even where the REIT had not
always owned such corporation. Third, the Act repeals the requirement that a
REIT must derive less than 30% of its gross income from the sale of stock or
securities held for less than one year, real property held less than four years,
and property sold or disposed of in a "prohibited transaction." Finally, a REIT
will be able to elect to retain and pay income tax on net long-term capital
gains. REIT shareholders would include in income their share of the long-term
capital gains retained by the REIT and would receive a credit for their share of
the taxes paid by the REIT.

As a result of other changes made by the Act to the Code, capital gains of
individuals derived in respect of capital assets held for at least one year are
eligible for reduced rates of taxation depending upon the holding period of such
capital assets. Each prospective investor should consult his own tax advisor
regarding the tax consequences to him of the changes made by the Act.

EXPERTS

The consolidated financial statements of AIMCO and the combined financial
statements of the AIMCO Predecessors appearing in AIMCO's Annual Report on Form
10-K for the year ended December 31, 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 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.

This Historical Summary of Gross Income and Direct Operating Expenses of
Morton Towers for the year ended December 31, 1996 appearing in AIMCO's Current
Report on Form 8-K, dated September 19, 1997, has been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such Historical Summary is incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.

The Historical Summary of Gross Income and Certain Expenses of The Bay Club
at Aventura for the year ended December 31, 1996 appearing in Amendment No. 1 to
AIMCO's Current Report on Form 8-K, dated June 3, 1997, has been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such Historical Summary
is incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

The Historical Summary of Gross Income and Direct Operating Expenses of
Villa Ladera Apartments for the year ended December 31, 1995 appearing in
AIMCO's Current Report on Form 8-K, dated December 19, 1996, has been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such Historical Summary
is incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

The consolidated financial statements of NHP for the years ended December
31, 1996, 1995 and 1994 included in Amendment No. 3 to AIMCO's Current Report on
Form 8-K, dated April 16, 1997, have been audited by Arthur Andersen LLP,
independent public accountants, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein

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by reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.

As noted in their report, Arthur Andersen LLP did not audit the 1994
financial statements of certain real estate partnerships whose operating results
are included in "income (loss) from discontinued real estate operations, net of
income taxes" in the 1994 consolidated financial statements of NHP. The
financial statements of these real estate partnerships were audited by other
auditors, whose reports are incorporated herein by reference to Amendments No. 1
and 2 to AIMCO's Current Report on Form 8-K, dated April 16, 1997, and Arthur
Andersen LLP's opinion, insofar as it relates to the amounts included in the
consolidated financial statements for these real estate partnerships, is based
solely on the reports of those auditors included therein and incorporated herein
by reference. The auditors on whose reports Arthur Andersen LLP relied are:
Anders, Minkler & Diehl LLP; Dauby O'Connor & Zaleski, LLC; Deloitte & Touche
LLP; Edwards Leap & Sauer; George A. Hieronymous & Company, LLC; Goldenberg
Rosenthal Friedlander, LLP; Hansen, Hunter & Kibbee, P.C.; J.H. Cohn LLP; J.A.
Plumer & Co., P.A.; Marks Shron & Company, LLP; Reznick Fedder & Silverman; and
Russell Thompson Butler & Houston.

The combined financial statements of NHP Real Estate Companies (as defined
in Note 1 of such financial statements) for the years ended December 31, 1996,
1995 and 1994 included in Amendment No. 5 to AIMCO's Current Report on Form 8-K
dated June 3, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such 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.

As noted in their report, Arthur Andersen LLP did not audit the 1996, 1995
and 1994 financial statements of certain real estate partnerships accounted for
under the equity method by the NHP Real Estate Companies. The financial
statements of these real estate partnerships were audited by other auditors,
whose reports are filed as exhibits to Amendments No. 1 and 3 to AIMCO's Current
Report on Form 8-K, dated June 3, 1997, and Arthur Andersen LLP's opinion,
insofar as it relates to the amounts included in the combined financial
statements for these real estate partnerships, is based solely on the reports of
those auditors included therein and incorporated herein by reference. The
auditors on whose reports Arthur Andersen LLP relied are: Anders, Minkler &
Diehl LLP; Dauby O'Connor & Zaleski, LLC; Deloitte & Touche LLP; Edwards Leap &
Sauer; Fishbein & Company, P.C.; Freeman and Vessillo; Friduss, Lukee, Schiff &
Co., PC; George A. Heironymous & Company, LLC; Goldenberg Rosenthal Friedlander,
LLP; Hansen, Hunter & Kibbee, P.C.; J.H. Cohn LLP; J.A. Plumer & Co., P.A.;
Prague & Company, P.C.; Robert Ercolini & Company; Marks Shron & Company, LLP;
Reznick Fedder & Silverman; Russell Thompson Butler & Houston; Sciarabba Walker
& Co., LLP; Wallace Sanders & Company; Warady and Davis; Ziner and Company, PC;
and Zinner & Co.

The financial statements of NHP Southwest Partners, LP for the year ended
December 31, 1996 and for the period from January 20, 1995 through December 31,
1995 included in Amendment No. 5 to AIMCO's Current Report on Form 8-K, dated
June 3, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such 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 combined financial statements of NHP New LP Entities (as defined in Note
1 of such financial statements) for the year ended December 31, 1996 and for the
period from January 20, 1995 through December 31, 1995 included in Amendment No.
1 to AIMCO's Current Report on Form 8-K, dated June 3, 1997, have been audited
by Arthur Andersen LLP, independent public accountants, as set forth in their
report thereon included therein and incorporated herein by reference. Such
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.

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<PAGE>
The combined financial statements of NHP Borrower Entities (as defined in
Note 1 of such financial statements) for the year ended December 31, 1996 and
for the period from January 20, 1995 through December 31, 1995 included in
Amendment No. 1 to AIMCO's Current Report on Form 8-K, dated June 3, 1997, have
been audited by Arthur Andersen LLP, independent public accountants, as set
forth in their report thereon included therein and incorporated herein by
reference. Such 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 Combined Statement of Revenues and Certain Expenses of the Thirty-five
Acquisition Properties (as defined in Note 1 of such financial statements (which
represents the Winthrop Portfolio)) for the year ended December 31, 1996,
included in AIMCO's Current Report on Form 8-K, dated October 15, 1997, have
been audited by Deloitte & Touche LLP, independent public accountants, as set
forth in their report thereon included therein and incorporated herein by
reference. Such 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.

LEGAL MATTERS

Certain legal matters will be passed upon for AIMCO by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California and for the Underwriters by Davis
Polk & Wardwell, New York, New York. The legality of the Class A Common Stock
offered hereby will be passed upon for AIMCO by Piper & Marbury L.L.P.,
Baltimore, Maryland. Skadden, Arps, Slate, Meagher & Flom LLP and Davis Polk &
Wardwell will rely on Piper & Marbury L.L.P. as to certain matters of Maryland
law. Certain present and former partners of Davis Polk & Wardwell hold OP Units
that were obtained in exchange for the transfer of certain real estate interests
to the Operating Partnership in connection with AIMCO's IPO.

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<PAGE>
PROSPECTUS

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

$1,000,000,000
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
WARRANTS

Apartment Investment and Management Company (the "Company") may offer from
time to time (i) senior, senior subordinated or subordinated debt securities
(the "Debt Securities") consisting of debentures, notes and/or other unsecured
evidences of indebtedness, (ii) shares of preferred stock, par value $.01 per
share (the "Preferred Stock"), (iii) shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock"), and (iv) warrants to purchase Debt
Securities, Preferred Stock or Class A Common Stock, as shall be designated by
the Company at the time of the offering (the "Warrants"). The Debt Securities,
the Preferred Stock, the Class A Common Stock and the Warrants are collectively
referred to as the "Securities" and will have an aggregate initial offering
price of up to $1,000,000,000. The Securities may be offered separately or
together (in any combination) and as separate series, in any case, in amounts,
at prices and on terms to be determined at the time of sale.

The form in which the Securities are to be issued, and the terms of such
Securities, including without limitation, their specific designation, aggregate
principal amount or aggregate initial offering price, maturity, if any, rate and
times of payment of interest or dividends, if any, redemption, conversion,
exchange and sinking fund terms, if any, voting or other rights, if any,
exercise price and detachability, if any, and other specific terms will be set
forth in a Prospectus Supplement (the "Prospectus Supplement"), together with
the terms of offering of such Securities. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities. The
Prospectus Supplement will also contain information, as applicable, about
certain material United States Federal income tax considerations relating to the
particular Securities offered thereby. The Prospectus Supplement will also
contain information, where applicable, as to any listing on a national
securities exchange of the Securities covered by such Prospectus Supplement.

The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
Securities.

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER
"RISK FACTORS" SET FORTH IN THE APPLICABLE PROSPECTUS SUPPLEMENT.
------------------------

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.
------------------------

May 22, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY OR BY ANY PROSPECTUS SUPPLEMENT OR OTHER SECURITIES OF THE
COMPANY. SUCH TRANSACTIONS MAY BE EFFECTED THROUGH THE NEW YORK STOCK EXCHANGE
OR OTHERWISE. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION"
INCLUDED ELSEWHERE HEREIN AND IN THE ACCOMPANYING PROSPECTUS SUPPLEMENT.

AVAILABLE INFORMATION

The Company 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,
Suite 1400, 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.

The Company 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 the Company 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, 1996;

(ii) Quarterly Report on Form 10-Q/A for the quarter ended September 30,
1996;

(iii) Current Reports on Form 8-K dated December 19, 1996, February 19,
1997, April 16, 1997 and May 5, 1997 (and all amendments thereto); and

(iv) the description of the Class A Common Stock which is contained in a
Registration Statement on Form 8-A (File No. 1-13232) filed July 19, 1994,
including any amendment or reports filed for the purpose of updating such
description.

All documents filed by the Company 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 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.

2
<PAGE>
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 the Company
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.

3
<PAGE>
THE COMPANY

Apartment Investment and Management Company, a Maryland corporation
(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 the Company. As of March 31, 1997, the
Company held approximately an 86.0% 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 March 31, 1997, the Company had 94 Owned Properties containing 23,764
units and 131 Managed Properties, including 17,731 apartment units managed for
third parties and affiliates. 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.

The Owned Properties are located in the Sunbelt regions of the United
States. The distribution of the Owned Properties reflects the Company's focus on
growth markets and its belief that geographic diversification will help to
insulate the portfolio from regional and economic fluctuations. The Company also
seeks to create concentrations of properties within each of its markets in order
to achieve economies of scale in management and operation.

In April 1997, the Company entered into agreements to acquire NHP
Incorporated, a Delaware corporation ("NHP"). NHP provides a broad array of real
estate services nationwide including property management, and asset management,
as well as a group of related services including equity investments, purchasing,
risk management and home health care. According to 1995 year-end data published
by the National Multi Housing Council and April 1994 data published by the
United States Department of Housing and Urban Development, NHP is the nation's
second largest property manager of multifamily properties, based on the number
of units managed. As of December 31, 1996, NHP's management portfolio includes
457 affordable properties and 260 conventional properties containing 58,504
affordable units and 74,540 conventional units located in 38 states, the
District of Columbia and Puerto Rico.

The Company is also continuing to negotiate the terms of a definitive
agreement with Demeter Holdings Corporation, a Massachusetts corporation, and
Capricorn Investors, L.P., a Delaware limited partnership, Phemus Corporation, a
Massachusetts corporation and an affiliate of Demeter, and J. Roderick Heller,
III, relating to the acquisition of certain entities formerly owned by NHP that
own direct and indirect interests in partnerships that own conventional and
affordable multifamily apartment properties managed primarily by NHP, along with
a captive insurance subsidiary and certain related assets (collectively, the
"NHP Real Estate Companies"). The proposed acquisitions of NHP and the NHP Real
Estate Companies are subject to a number of contingencies, including, in some
cases, obtaining approvals of governmental authorities (including HUD),
shareholders of the Company and NHP, and other third parties. Accordingly, there
can be no assurance that either of such transactions will be completed. If
completed, the NHP Acquisition is subject to a number of risks.

The Company's headquarters are located at 1873 South Bellaire Street, 17th
Floor, Denver, Colorado 80222 and its telephone number is (303) 757-8101.

4
<PAGE>
USE OF PROCEEDS

Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
working capital and general corporate purposes, which may include the repayment
of outstanding indebtedness, the financing of future acquisitions (which may
include real properties, interests therein or real estate-related securities)
and the improvement of the Owned Properties. Pending the use thereof, the
Company intends to invest any net proceeds in short-term, interest-bearing
securities. The Company will not receive any proceeds from the registered resale
of any Securities pursuant to this Prospectus.

RATIO OF EARNINGS TO FIXED CHARGES

The Company's ratio of earnings to fixed charges for the quarters ended
March 31, 1997 and March 31, 1996 was 1.5:1 and 1.5:1 respectively and for the
years ended December 31, 1996 and December 31, 1995 and the period from January
10, 1994 (the date of formation) to December 31, 1994 was 1.6:1, 2.1:1 and
5.8:1, respectively. Prior to the completion of the initial public offering (the
"Initial Offering"), the ratio of earnings to fixed charges of the AIMCO
Predecessors for the years ended December 31, 1993 and 1992 was 1.2:1 and 1.0:1,
respectively. The earnings of the AIMCO Predecessors for the period from January
1, 1994 to July 28, 1994 were inadequate to cover fixed charges by $1,463,000.

The Company's ratio of earnings to combined fixed charges and preferred
stock dividends for the quarters ended March 31, 1997 and March 31, 1996 was
1.5:1 and 1.5:1 respectively and for the years ended December 31, 1996 and
December 31, 1995 and the period from January 10, 1994 to December 31, 1994 was
1.6:1, 1.5:1 and 2.0:1, respectively. The AIMCO Predecessors did not have any
shares of Preferred Stock outstanding during the period from January 1, 1992
through July 28, 1994.

The ratio of earnings to fixed charges for the Company was computed by
dividing earnings by fixed charges. For this purpose, "earnings" consists of
income before minority interest plus fixed charges (other than any interest
which has been capitalized); and "fixed charges" consists of interest expense
(including amortization of loan costs) and interest which has been capitalized.

The ratio of earnings to combined fixed charges and preferred stock
dividends for the Company was computed by dividing earnings by the total of
fixed charges and preferred stock dividends. For this purpose, "earnings"
consists of income before minority interest plus fixed charges (other than any
interest which has been capitalized); "fixed charges" consists of interest
expense (including amortization of loan costs) and interest which has been
capitalized; and "preferred stock dividends" consists of the amount of pre-tax
earnings that would be required to cover preferred stock dividend requirements.

The ratio of earnings to fixed charges for the AIMCO Predecessors was
computed by dividing earnings by fixed charges. For this purpose, "earnings"
consists of income (loss) before extraordinary items and income taxes plus fixed
charges; and "fixed charges" consists of interest expense (including
amortization of loan costs). No preferred stock was issued by the AIMCO
Predecessors.

DESCRIPTION OF DEBT SECURITIES

GENERAL

The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.

5
<PAGE>
The Debt Securities may be issued, from time to time, in one or more series,
and will constitute either senior Debt Securities ("Senior Debt Securities"),
senior subordinated Debt Securities ("Senior Subordinated Debt Securities") or
subordinated Debt Securities ("Subordinated Debt Securities"). Senior Debt
Securities may be issued under an Indenture (the "Senior Debt Securities
Indenture") to be entered into between the Company and a trustee to be named in
the applicable Prospectus Supplement (the "Senior Debt Securities Trustee"). The
Senior Subordinated Debt Securities may be issued from time to time under an
Indenture (the "Senior Subordinated Debt Securities Indenture") to be entered
into between the Company and a trustee to be named in the applicable Prospectus
Supplement (the "Senior Subordinated Debt Securities Trustee"). The Subordinated
Debt Securities may be issued from time to time under an Indenture (the
"Subordinated Debt Securities Indenture") to be entered into between the Company
and a trustee to be named in the applicable Prospectus Supplement (the
"Subordinated Debt Securities Trustee").

The Senior Debt Securities Indenture, the Senior Subordinated Debt
Securities Indenture, and the Subordinated Debt Securities Indenture are
referred to herein individually as an "Indenture" and, collectively, as the
"Indentures." The Senior Debt Securities Trustee, the Senior Subordinated Debt
Securities Trustee and the Subordinated Debt Securities Trustee are referred to
herein individually as a "Trustee" and collectively as the "Trustees." Forms of
the Indentures are filed as exhibits to the Registration Statement of which this
Prospectus is a part. The Indentures will be subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). Capitalized terms used in
this section which are not otherwise defined in this Prospectus shall have the
meanings set forth in the Indenture to which they relate. The statements made
under this heading relating to the Debt Securities and the Indentures are
summaries of the anticipated provisions of the Debt Securities and the
Indentures, do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Indentures and the
Debt Securities, including the definitions therein of certain terms.

The Debt Securities will be direct, unsecured obligations of the Company.
The Indentures do not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and provide that Debt Securities may be issued
thereunder from time to time in one or more series. Under the Indentures, the
Company will have the ability to issue Debt Securities with terms different from
those of Debt Securities previously issued, without the consent of the holders
of previously issued series of Debt Securities, in an aggregate principal amount
determined by the Company.

The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities or Subordinated Debt Securities will set
forth the aggregate amount of outstanding indebtedness, as of the most recent
practicable date, that by the terms of such Debt Securities would be senior to
such Debt Securities and any limitation on the issuance of additional senior
indebtedness.

Debt Securities may be issued and sold at a discount below their principal
amount ("Discount Securities"). Special United States Federal income tax
considerations applicable to Debt Securities issued with original issue
discount, including Discount Securities, will be described in more detail in any
applicable Prospectus Supplement. Even if Debt Securities are not issued at a
discount below their principal amount, such Debt Securities may, for United
States Federal income tax purposes, be deemed to have been issued with "original
issue discount" ("OID") because of certain interest payment characteristics. In
addition, special United States Federal tax considerations or other restrictions
or terms applicable to any Debt Securities offered exclusively to United States
Aliens or denominated in a currency other than United States dollars will be set
forth in a Prospectus Supplement relating thereto.

The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities offered
thereby (the "Offered Debt Securities"): (i) the title of the Offered Debt
Securities; (ii) any limit on the aggregate principal amount of the Offered Debt
Securities; (iii) whether the Offered Debt Securities may be represented
initially by a

6
<PAGE>
Debt Security in temporary or permanent global form, and if so, the initial
Depositary with respect to such temporary or permanent global Debt Security and
whether and the circumstances under which beneficial owners of interests in any
such temporary or permanent global Debt Security may exchange such interests for
Debt Securities of such series and of like tenor of any authorized form and
denomination; (iv) the price or prices at which the Offered Debt Securities will
be issued; (v) the date or dates on which the principal of the Offered Debt
Securities is payable or the method of determination thereof; (vi) the place or
places where and the manner in which the principal of and premium, if any, and
interest, if any, on such Offered Debt Securities will be payable and the place
or places where such Offered Debt Securities may be presented for transfer and,
if applicable, conversion or exchange; (vii) the rate or rates at which the
Offered Debt Securities will bear interest, or the method of calculating such
rate or rates, if any, and the date or dates from which such interest, if any,
will accrue; (viii) the dates (the "Interest Payment Dates"), if any, on which
any interest on the Offered Debt Securities will be payable, and the regular
record date (the "Regular Record Date") for any interest payable on any Offered
Debt Securities; (ix) the right or obligation, if any, of the Company to redeem
or purchase Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof, the conditions, if
any, giving rise to such right or obligation, and the period or periods within
which, and the price or prices at which and the terms and conditions upon which
Debt Securities of the series shall be redeemed or purchased, in whole or part,
and any provisions for the remarketing of such Debt Securities; (x) whether such
Offered Debt Securities are convertible or exchangeable into other debt or
equity securities of the Company, and, if so, the terms and conditions upon
which such conversion or exchange will be effected including the initial
conversion or exchange price or rate and any adjustments thereto, the conversion
or exchange period and other conversion or exchange provisions; (xi) any terms
applicable to such Offered Debt Securities issued at original issue discount
below their stated principal amount, including the issue price thereof and the
rate or rates at which such original issue discount will accrue; (xii) if other
than the principal amount thereof, the portion of the principal amount of the
Offered Debt Securities which will be payable upon declaration or acceleration
of the maturity thereof pursuant to an Event of Default; (xiii) any deletions
from, modifications of or additions to the Events of Default or covenants of the
Company with respect to such Offered Debt Securities, whether or not such Events
of Default or covenants are consistent with the Events of Default or covenants
set forth herein; (xiv) any special United States Federal income tax
considerations applicable to the Offered Debt Securities; and (xv) any other
terms of the Offered Debt Securities not inconsistent with the provisions of the
Indenture. The applicable Prospectus Supplement will also describe the following
terms of any series of Senior Subordinated Debt Securities or Subordinated Debt
Securities offered hereby in respect of which this Prospectus is being
delivered: (a) the rights, if any, to defer payments of interest on the Senior
Subordinated Debt Securities or Subordinated Debt Securities of such series by
extending the interest payment period, and the duration of such extensions, and
(b) the subordination terms of the Senior Subordinated Debt Securities or
Subordinated Debt Securities of such series. The foregoing is not intended to be
an exclusive list of the terms that may be applicable to any Offered Debt
Securities and shall not limit in any respect the ability of the Company to
issue Debt Securities with terms different from or in addition to those
described above or elsewhere in this Prospectus provided that such terms are not
inconsistent with the applicable Indenture. Any such Prospectus Supplement will
also describe any special provisions for the payment of additional amounts with
respect to the Offered Debt Securities.

Since the operations of the Company are currently conducted principally
through subsidiaries, the Company's cash flow and its consequent ability to
service debt, including the Debt Securities, are dependent, in large part, upon
the earnings of its subsidiaries and the distribution of those earnings to the
Company, whether by dividends, loans or otherwise. The payment of dividends and
the making of loans and advances to the Company by its subsidiaries may be
subject to statutory or contractual restrictions, are contingent upon the
earnings of those subsidiaries and are subject to various business
considerations. Any right of the Company to receive assets of any of its
subsidiaries upon their liquidation or reorganization (and the consequent right
of the holders of the Debt Securities to

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participate in those assets) will be effectively subordinated to the claims of
that subsidiary's creditors (including trade creditors), except to the extent
that the Company is itself recognized as a creditor of such subsidiary, in which
case the claims of the Company would still be subordinate to any security
interests in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by the Company.

FORM, EXCHANGE, REGISTRATION AND TRANSFER

The Debt Securities of a series may be issued solely as registered Debt
Securities. Debt Securities of a series may be issuable in whole or in part in
the form of one or more global Debt Securities, as described below under "Global
Debt Securities." Unless otherwise indicated in an applicable Prospectus
Supplement, Debt Securities will be issuable in denominations of $1,000 and
integral multiples thereof. Debt Securities of any series will be exchangeable
for other Debt Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor.

Debt Securities may be presented for exchange as provided above and, unless
otherwise indicated in an applicable Prospectus Supplement, may be presented for
registration of transfer, at the office or agency of the Company designated as
registrar or co-registrar with respect to such series of Debt Securities,
without service charge and upon payment of any taxes, assessments or other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected on the books of the registrar or any other transfer agent
appointed by the Company upon such registrar or transfer agent, as the case may
be, being satisfied with the documents of title and identity of the person
making the request. The Company intends to initially appoint the Trustee for the
Offered Debt Securities as the registrar for such Offered Debt Securities and
the name of any different or additional registrar designated by the Company with
respect to the Offered Debt Securities will be included in the Prospectus
Supplement relating thereto. If a Prospectus Supplement refers to any transfer
agents (in addition to the registrar) designated by the Company with respect to
any series of Debt Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in the Borough of Manhattan, The City of
New York. The Company may at any time designate additional transfer agents with
respect to any series of Debt Securities.

In the event of any partial redemption of Debt Securities of any series, the
Company will not be required to (i) issue, register the transfer of or exchange
Debt Securities of that series during a period beginning at the opening of
business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption; or (ii) register the transfer of or exchange any
Debt Security, or portion thereof, called for redemption, except the unredeemed
portion of any Debt Security being redeemed in part.

PAYMENT AND PAYING AGENTS

Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, and interest, if any, on, Debt Securities will be made at the
office of such paying agent or paying agents as the Company may designate from
time to time, except that, at the option of the Company, payment of principal or
interest may be made by check or by wire transfer to an account maintained by
the payee. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on Debt Securities will be made to the
person in whose name such Debt Security is registered at the close of business
on the Regular Record Date for such interest.

Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee for the Offered Debt Securities will be designated as the Company's sole
paying agent for payments with respect to the Offered Debt Securities. Any other
paying agents initially designated by the Company for the Offered Debt
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts, except that the Company will be required to maintain a paying agent in the
Borough of Manhattan, The City of New York.

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All moneys paid by the Company to a paying agent for the payment of
principal of, or interest, if any, on, any Debt Security which remains unclaimed
at the end of two years after such principal or interest shall have become due
and payable will be repaid to the Company, and the holder of such Debt Security
or any coupon will thereafter look only to the Company for payment thereof.

GLOBAL DEBT SECURITIES

The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
depositary, which will be identified in the applicable Prospectus Supplement. A
global Debt Security may be issued only in registered form and in either
temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole to the depositary for such Debt Security or to a
nominee or successor of such depositary. If any Debt Securities of a series are
issuable in global form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
global Debt Security may exchange such interests for definitive Debt Securities
of such series and of like tenor and principal amount in any authorized form and
denomination, the manner of payment of principal of and interest, if any, on any
such global Debt Security and the specific terms of the depositary arrangement
with respect to any such global Debt Security.

MERGERS AND SALES OF ASSETS

The Company may not consolidate with or merge into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to another person, unless, among other things, (i) the resulting, surviving or
transferee person (if other than the Company) is organized and existing under
the laws of the United States, any state thereof or the District of Columbia and
such person expressly assumes all obligations of the Company under the Debt
Securities and the Indenture, and (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred or be continuing
under the Indenture. Upon the assumption of the Company's obligations by a
person to whom such properties or assets are conveyed, transferred or leased,
subject to certain exceptions, the Company shall be discharged from all
obligations under the Debt Securities and the Indenture.

EVENTS OF DEFAULT

Each Indenture provides that, if an Event of Default specified therein shall
have occurred and be continuing, with respect to each series of the Debt
Securities outstanding thereunder individually, the Trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding Debt
Securities of such series may declare the principal amount (or, if any of the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Debt Securities as may be specified by the terms
thereof) of the Debt Securities of such series to be immediately due and
payable. Under certain circumstances, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may rescind
such a declaration.

Under each Indenture, an Event of Default is defined as, with respect to
each series of Debt Securities outstanding thereunder individually, any of the
following: (i) default in payment of the principal of any Debt Securities of
such series; (ii) default in payment of any interest on any Debt Securities of
such series when due, continuing for 30 days (or 60 days, in the case of Senior
Subordinated Debt Securities or Subordinated Debt Securities); (iii) default by
the Company in compliance with its other agreements in the Debt Securities of
such series or the Indenture relating to the Debt Securities of such series upon
the receipt by the Company of notice of such default given by the Trustee for
such Debt Securities or the holders of at least 25% in aggregate principal
amount of the outstanding Debt Securities of such series and the Company's
failure to cure such default within 60 days after receipt by the Company of such
notice; (iv) certain events of bankruptcy or insolvency; and (v) any other Event
of Default set forth in an applicable Prospectus Supplement with respect to the
Debt Securities of such series.

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The Trustee shall give notice to holders of the Debt Securities of any
continuing default known to the Trustee within 90 days after the occurrence
thereof; PROVIDED, that the Trustee may withhold such notice, as to any default
other than a payment default, if it determines in good faith that withholding
the notice is in the interests of the holders.

The holders of a majority in principal amount of the outstanding Debt
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series; PROVIDED that such direction shall not be in conflict with any law or
the Indenture and subject to certain other limitations. Before proceeding to
exercise any right or power under the Indenture at the direction of such
holders, the Trustee shall be entitled to receive from such holders reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with any such direction.
With respect to each series of Debt Securities, no holder will have any right to
pursue any remedy with respect to the Indenture or such Debt Securities, unless
(i) such holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of such series;
(ii) the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series shall have made a written request to
the Trustee to pursue such remedy; (iii) such holder or holders have offered to
the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the holders
of a majority in aggregate principal amount of the outstanding Debt Securities
of such series have not given the Trustee a direction inconsistent with such
request within 60 days after receipt of such request; and (v) the Trustee shall
have failed to comply with the request within such 60-day period.

Notwithstanding the foregoing, the right of any holder of any Debt
Securities to receive payment of the principal of and interest in respect of
such Debt Securities on the date specified in such Debt Securities as the fixed
date on which an amount equal to the principal of such Debt Securities or an
installment of principal thereof or interest thereon is due and payable (the
"Stated Maturity" or "Stated Maturities") or to institute suit for the
enforcement of any such payments shall not be impaired or adversely affected
without such holder's consent. The holders of at least a majority in aggregate
principal amount of the outstanding Debt Securities of any series may waive an
existing default with respect to such series and its consequences, other than
(i) any default in any payment of the principal of, or interest on, any Debt
Securities of such series or (ii) any default in respect of certain covenants or
provisions in the Indenture which may not be modified without the consent of the
holder of each of the outstanding Debt Securities of such series affected as
described in "Modification and Waiver," below.

Each Indenture provides that the Company shall deliver to the Trustee within
120 days after the end of each fiscal year of the Company an officers'
certificate stating whether or not the signers know of any default that occurred
during such period.

MODIFICATION AND WAIVER

The Company and the Trustee may execute a supplemental indenture without the
consent of the holders of the Debt Securities (i) to add to the covenants,
agreements and obligations of the Company for the benefit of the holders of all
the Debt Securities of any series or to surrender any right or power conferred
in the Indenture upon the Company; (ii) to evidence the succession of another
corporation to the Company and the assumption by it of the obligations of the
Company under the Indenture and the Debt Securities; (iii) to establish the form
or terms of Debt Securities of any series as permitted by the Indenture; (iv) to
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the Debt Securities of one or more series and to add to
or change any provisions of the Indenture as shall be necessary to provide for
or facilitate the administration of the trusts by more than one Trustee; (v) to
cure any ambiguity, defect or inconsistency; (vi) to add to, change or eliminate
any provisions (which addition, change or elimination may apply to one or more
series of Debt Securities), PROVIDED that any such addition, change or
elimination does not (a) apply to any Debt Securities of any series created
prior to the execution of such supplemental indenture that is

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entitled to the benefit of such provision or (b) modify the rights of the holder
of any such Debt Securities with respect to such provision; (vii) to secure the
Debt Securities; or (viii) to make any other change that does not adversely
affect the rights of any holder of Debt Securities.

Each Indenture provides that, with the consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Debt Securities
of the series affected by such supplemental indenture, the Company and the
Trustee may also execute a supplemental indenture to add provisions to, or
change in any manner or eliminate any provisions of, the Indenture with respect
to such series of Debt Securities or modify in any manner the rights of the
holders of the Debt Securities of such series; PROVIDED that no such
supplemental indenture will, without the consent of the holder of each such
outstanding Debt Security affected thereby (i) change the stated maturity of the
principal of, or any installment of principal or interest on, any such Debt
Security or any premium payable upon redemption or repurchase thereof, or reduce
the amount of principal of any Debt Security that is a Discount Security and
that would be due and payable upon declaration of acceleration of maturity
thereof; (ii) reduce the principal amount of, or the rate of interest on, any
such Debt Security; (iii) change the place or currency of payment of principal
or interest, if any, on any such Debt Security; (iv) impair the right to
institute suit for the enforcement of any payment on or with respect to any such
Debt Security; (v) reduce the above-stated percentage of holders of Debt
Securities of any series necessary to modify or amend the Indenture for such
Debt Securities; (vi) modify the foregoing requirements or reduce the percentage
in principal amount of outstanding Debt Securities of any series necessary to
waive any covenant or past default; or (vii) in the case of Senior Subordinated
Debt Securities or Subordinated Debt Securities, amend or modify any of the
provisions of such Indenture relating to subordination of the Debt Securities in
any manner adverse to the holders of such Debt Securities. Holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series may waive certain past defaults and may waive compliance by the Company
with certain of the restrictive covenants described above with respect to the
Debt Securities of such series.

DISCHARGE AND DEFEASANCE

Unless otherwise indicated in an applicable Prospectus Supplement, each
Indenture provides that the Company may satisfy and discharge obligations
thereunder with respect to the Debt Securities of any series by delivering to
the Trustee for cancellation all outstanding Debt Securities of such series or
depositing with the Trustee, after such outstanding Debt Securities have become
due and payable, cash sufficient to pay at Stated Maturity all of the
outstanding Debt Securities of such series and paying all other sums payable
under the Indenture with respect to such series.

In addition, unless otherwise indicated in an applicable Prospectus
Supplement, each Indenture provides that: the Company (a) shall be discharged
from its obligations in respect of the Debt Securities of such series
("defeasance and discharge"), or (b) may cease to comply with certain
restrictive covenants ("covenant defeasance"), including those described under
"Mergers and Sales of Assets," and any such omission shall not be an Event of
Default with respect to the Debt Securities of such series, in each case, at any
time prior to the Stated Maturity or redemption thereof, when the Company has
irrevocably deposited with the Trustee, in trust, (i) sufficient funds to pay
the principal of and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series, or (ii) such amount of direct obligations of, or
obligations the principal of (and premium, if any) and interest on which are
fully guaranteed by, the government of the United States and which are not
subject to prepayment, redemption or call, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay when due the principal of (and
premium, if any) and interest to Stated Maturity (or redemption) on, the Debt
Securities of such series. Upon such defeasance and discharge, the holders of
the Debt Securities of such series shall no longer be entitled to the benefits
of the Indenture, except for the purposes of registration of transfer and
exchange of the Debt Securities of such series and replacement of lost, stolen
or mutilated Debt Securities and shall look only to such deposited funds or
obligations for payment.

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THE TRUSTEES

The Senior Debt Securities Trustee, the Senior Subordinated Debt Securities
Trustee and the Subordinated Debt Securities Trustee will be named in the
applicable Prospectus Supplement. Each Trustee will be permitted to engage in
other transactions with the Company and each of its subsidiaries; HOWEVER, if a
Trustee acquires any conflicting interest, it must eliminate such conflict or
resign.

DESCRIPTION OF PREFERRED STOCK

GENERAL

The Company may issue, from time to time, shares of one or more series or
classes of Preferred Stock. The following description sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The particular terms of any series of Preferred Stock and the
extent, if any, to which such general provisions may apply to the series of
Preferred Stock so offered will be described in the Prospectus Supplement
relating to such Preferred Stock. The following summary of certain provisions of
the Preferred Stock do not purport to be complete and is subject to, and is
qualified in its entirety by express reference to, the provisions of the
Company's Charter (the "Charter") relating to a specific series of the Preferred
Stock, which will be in the form filed as an exhibit to or incorporated by
reference in the Registration Statement of which this Prospectus is a part at or
prior to the time of issuance of such series of Preferred Stock.

Under the Charter, the Company has the authority to issue up to 10,000,000
shares of Preferred Stock. The Board of Directors of the Company is authorized
to issue shares of Preferred Stock, in one or more classes or subclasses, and
may classify or reclassify any unissued shares of Preferred Stock by setting or
changing in any one or more respects the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
or terms or conditions of redemption of such shares of Preferred Stock
including, but not limited to, ownership restrictions consistent with the
Ownership Limit (defined below) with respect to each class or subclass of
Preferred Stock, and the number of shares constituting each class or subclass,
and to increase or decrease the number of shares of any such class or subclass,
to the extent permitted by the Maryland General Corporation Law (the "MGCL").

The Board of Directors of the Company shall be authorized to determine for
each series of Preferred Stock, and the Prospectus Supplement shall set forth
with respect to such series: (i) the designation of such shares and the number
of shares that constitute such series, (ii) the dividend rate (or the method of
calculation thereof), if any, on the shares of such series and the priority as
to payment of dividends with respect to other classes or series of capital stock
of the Company, (iii) the dividend periods (or the method of calculation
thereof), (iv) the voting rights of the shares, (v) the liquidation preference
and the priority as to payment of such liquidation preference with respect to
other classes or series of capital stock of the Company and any other rights of
the shares of such series upon any liquidation or winding-up of the Company,
(vi) whether or not and on what terms the shares of such series will be subject
to redemption or repurchase at the option of the Company, (vii) whether and on
what terms the shares of such series will be convertible into or exchangeable
for other debt or equity securities of the Company, (viii) whether the shares of
such series of Preferred Stock will be listed on a securities exchange, (x) any
special United States Federal income tax considerations applicable to such
series, and (ix) the other rights and privileges and any qualifications,
limitations or restrictions of such rights or privileges of such series not
inconsistent with the Charter and the MGCL.

DIVIDENDS

Holders of shares of Preferred Stock shall be entitled to receive, when and
as declared by the applicable Board of Directors out of funds of the Company
legally available therefor, an annual cash dividend payable at such dates and at
such rates, if any, per share per annum as set forth in the applicable
Prospectus Supplement.

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Unless otherwise set forth in the applicable Prospectus Supplement, each
series of Preferred Stock will rank junior as to dividends to any Preferred
Stock that may be issued in the future that is expressly senior as to dividends
to the Preferred Stock. If at any time the Company has failed to pay accrued
dividends on any such senior shares at the time such dividends are payable, the
Company may not pay any dividend on the Preferred Stock or redeem or otherwise
repurchase shares of Preferred Stock until such accumulated but unpaid dividends
on such senior shares have been paid or set aside for payment in full by the
Company.

Unless otherwise set forth in the applicable Prospectus Supplement, no
dividends (other than in common stock or other capital stock ranking junior to
the Preferred Stock of any series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment, nor shall any other distribution be
declared or made upon the common stock, or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such series
as to dividends, nor shall any common stock or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such series
as to dividends or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Company (except
by conversion into or exchange for other capital stock of the Company ranking
junior to the Preferred Stock of such series as to dividends and upon
liquidation) unless (i) if such series of Preferred Stock has a cumulative
dividend, full cumulative dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for all past dividend periods and the then
current dividend period and (ii) if such series of Preferred Stock does not have
a cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment for the then current dividend
period; PROVIDED, HOWEVER, that any monies theretofore deposited in any sinking
fund with respect to any preferred stock in compliance with the provisions of
such sinking fund may thereafter be applied to the purchase or redemption of
such preferred stock in accordance with the terms of such sinking fund,
regardless of whether at the time of such application full cumulative dividends
upon shares of the Preferred Stock outstanding on the last dividend payment date
shall have been paid or declared and set apart for payment; and provided,
further, that any such junior or parity preferred stock or common stock may be
converted into or exchanged for stock of the Company ranking junior to the
Preferred Stock as to dividends.

The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period shall be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.

CONVERTIBILITY

No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the applicable Prospectus
Supplement, which will set forth the terms and conditions upon which such
conversion or exchange may be effected, including the initial conversion or
exchange rate and any adjustments thereto, the conversion or exchange period and
any other conversion or exchange provisions.

REDEMPTION AND SINKING FUND

No series of Preferred Stock will be redeemable or be entitled to receive
the benefit of a sinking fund except as set forth in the applicable Prospectus
Supplement, which will set forth the terms and conditions therof, including the
dates and redemption prices of any such redemption, any conditions thereto, and
any other redemption or sinking fund provisions.

LIQUIDATION RIGHTS

Unless otherwise set forth in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution or winding up of the Company, the holders
of shares of each series of Preferred Stock are entitled to receive out of
assets of the Company available for distribution to stockholders, before any
distribution of assets is made to holders of: (i) any other shares of preferred
stock ranking junior

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to such series of Preferred Stock as to rights upon liquidation, dissolution or
winding up; and (ii) shares of common stock, liquidating distributions per share
in the amount of the liquidation preference specified in the applicable
Prospectus Supplement for such series of Preferred Stock plus any dividends
accrued and accumulated but unpaid to the date of final distribution; but the
holders of each series of Preferred Stock will not be entitled to receive the
liquidating distribution of, plus such dividends on, such shares until the
liquidation preference of any shares of the Company's capital stock ranking
senior to such series of the Preferred Stock as to the rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. If upon any liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Preferred
Stock, and any other Preferred Stock ranking as to any such distribution on a
parity with the Preferred Stock are not paid in full, the holders of the
preferred stock and such other parity preferred stock will share ratably in any
such distribution of assets in proportion to the full respective preferential
amount to which they are entitled. Unless otherwise specified in a Prospectus
Supplement for a series of Preferred Stock, after payment of the full amount of
the liquidating distribution to which they are entitled, the holders of shares
of Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Company. Neither a consolidation or merger of the
Company with another corporation nor a sale of securities shall be considered a
liquidation, dissolution or winding up of the Company.

VOTING RIGHTS

Holders of Preferred Stock will not have any voting right except as set
forth below or in the applicable Prospectus Supplement or as otherwise from time
to time required by law. Whenever dividends on any applicable series of
Preferred Stock or any other class or series of stock ranking on a parity with
the applicable series of Preferred Stock with respect to the payment of
dividends shall be in arrears for the equivalent of six quarterly dividend
periods, whether or not consecutive, the holders of shares of such series of
Preferred Stock (voting separately as a class with all other series of Preferred
Stock then entitled to such voting rights) will be entitled to vote for the
election of two of the authorized number of directors of the Company at the next
annual meeting of stockholders and at each subsequent meeting until all
dividends accumulated on such series of Preferred Stock shall have been fully
paid or set apart for payment. The term of office of all directors elected by
the holders of such Preferred Stock shall terminate immediately upon the
termination of the right of the holders of such Preferred Stock to vote for
directors. Unless otherwise set forth in the applicable Prospectus Supplement,
holders of shares of Preferred Stock will have one vote for each share held.

So long as any shares of any series of Preferred Stock remain outstanding,
the Company shall not, without the consent of holders of at least two-thirds of
the shares of such series of Preferred Stock outstanding at the time, voting
separately as a class with all other series of Preferred Stock of the Company
upon which like voting rights have been conferred and are exercisable, (i) issue
or increase the authorized amount of any class or series of stock ranking prior
to the outstanding Preferred Stock as to dividends or upon liquidation or (ii)
amend, alter or repeal the provisions of the Company's Charter relating to such
series of Preferred Stock, whether by merger, consolidation or otherwise, so as
to materially adversely affect any power, preference or special right of such
series of Preferred Stock or the holders thereof; PROVIDED, HOWEVER, that any
increase in the amount of the authorized common stock or authorized preferred
stock or any increase or decrease in the number of shares of any series of
preferred stock or the creation and issuance of other series of common stock or
preferred stock ranking on a parity with or junior to Preferred Stock as to
dividends and upon liquidation, dissolution or winding up shall not be deemed to
materially adversely affect such powers, preferences or special rights.

MISCELLANEOUS

The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by the Company shall resume the status of authorized and unissued
shares of Preferred Stock undesignated as to series, and shall be available

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<PAGE>
for subsequent issuance. There are no restrictions on repurchase or redemption
of the Preferred Stock while there is any arrearage on sinking fund installments
except as may be set forth in an applicable Prospectus Supplement. Payment of
dividends on, and the redemption or repurchase of, any series of Preferred Stock
may be restricted by loan agreements, indentures and other agreements entered
into by the Company. The accompanying Prospectus Supplement will describe any
material contractual restrictions on such dividend payments.

NO OTHER RIGHTS

The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable Prospectus Supplement or the
Charter or as otherwise required by law.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for each series of Preferred Stock will be
designated in the applicable Prospectus Supplement.

DESCRIPTION OF COMMON STOCK

GENERAL

The Charter authorizes the issuance of up to 150,000,000 shares of Class A
Common Stock with a par value of $.01 per share. As of March 31, 1997, there
were 17,587,036 shares of Class A Common Stock issued and outstanding.
Subsequent to that date, the Company issued an aggregate of 2,300,000 shares of
Class A Common Stock in separate public offerings. In addition, at such date,
the Company had entered into agreements to acquire NHP which, if completed,
would result in the issuance of up to 7,570,000 additional shares of Class A
Common Stock. In addition, up to 150,000, 500,000 and 500,000 shares of Class A
Common Stock have been reserved for issuance under the Company's 1994 Stock
Option Plan (the "1994 Plan"), the 1996 Stock Award and Incentive Plan (the
"1996 Plan") and the Non-Qualified Employee Stock Option Plan (the
"Non-Qualified Plan"), respectively. The 1997 Stock Award and Incentive Plan
(the "1997 Plan") covers 10% of the shares of the Company's Common Stock
outstanding as of the first day of the fisal year during which any award is made
but in no event more than 20,000,000 shares of Common Stock. The Class A Common
Stock is traded on the NYSE under the symbol "AIV." ChaseMellon Shareholder
Services, L.L.C. serves as transfer agent and registrar of the Class A Common
Stock. In addition, the Charter originally authorized 750,000 shares of Class B
Common Stock with a par value of $.01 per share (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Common Stock"), which number of
authorized shares is subject to automatic reduction by the number of shares of
Class B Common Stock that have been converted into Class A Common Stock. As of
March 31, 1997, 325,000 shares of Class B Common Stock had been so converted,
leaving a total of 425,000 shares of Class B Common Stock authorized. (See "--
Class B Common Stock" below.)

Holders of the Class A Common Stock are entitled to receive dividends, when
and as declared by the Board of Directors, out of funds legally available
therefor. The holders of shares of Class A Common Stock, upon any liquidation,
dissolution or winding-up of the Company, are entitled to receive ratably any
assets remaining after payment in full of all liabilities of the Company and the
liquidation preferences of preferred stock. The shares of Class A Common Stock
possess ordinary voting rights for the election of Directors and in respect of
other corporate matters, each share entitling the holder thereof to one vote.
Holders of shares of Class A Common Stock do not have cumulative voting rights
in the election of Directors, which means that holders of more than 50% of the
shares of Class A Common Stock voting for the election of Directors can elect
all of the Directors if they choose to do so and the holders of the remaining
shares cannot elect any Directors. Holders of shares of Class A Common Stock do
not have preemptive rights, which means they have no right to acquire any
additional shares of Class A Common Stock that may be issued by the Company at a
subsequent date.

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<PAGE>
RESTRICTIONS ON TRANSFER

For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year and the shares of common stock must be beneficially owned by 100 or
more persons during at least 335 days of a taxable year of 12 months or during a
proportionate part of a shorter taxable year (see "Certain Federal Income Tax
Considerations -- Taxation of the Company -- Income Tests"). Because the Board
of Directors believes that it is essential for the Company to continue to
qualify as a REIT, the Board of Directors has adopted, and the shareholders have
approved, provisions of the Company's Charter restricting the acquisition of
shares of Common Stock.

Subject to certain exceptions specified in the Company's Charter, no holder
may own, or be deemed to own by virtue of various attribution and constructive
ownership provisions of the Code and Rule 13d-3 under the Exchange Act, more
than 8.7% (or 15% in the case of certain pension trusts described in the Code,
investment companies registered under the Investment Company Act of 1940 and Mr.
Considine) of the outstanding shares of Common Stock (the "Ownership Limit").
The Board of Directors may waive the Ownership Limit if evidence satisfactory to
the Board of Directors and the Company's tax counsel is presented that such
ownership will not then or in the future jeopardize the Company's status as a
REIT. However, in no event may such holder's direct or indirect ownership of
Common Stock exceed 9.8% of the total outstanding shares of Common Stock. As a
condition of such waiver, the Board of Directors may require opinions of counsel
satisfactory to it and/or an undertaking from the applicant with respect to
preserving the REIT status of the Company. The foregoing restrictions on
transferability and ownership will not apply if the Board of Directors
determines that it is no longer in the best interests of the Company to attempt
to qualify, or to continue to qualify, as a REIT and a resolution terminating
the Company's status as a REIT and amending the Company's Charter to remove the
foregoing restrictions is duly adopted by the Board of Directors and a majority
of the Company's shareholders. If shares of Common Stock in excess of the
Ownership Limit, or shares of Common Stock which would cause the REIT to be
beneficially owned by less than 100 persons, or which would result in the
Company being "closely held," within the meaning of Section 856(h) of the Code,
or which would otherwise result in the Company failing to qualify as a REIT, are
issued or transferred to any person, such issuance or transfer shall be null and
void to the intended transferee, and the intended transferee would acquire no
rights to the stock. Shares of Common Stock transferred in excess of the
Ownership Limit or other applicable limitations will automatically be
transferred to a trust for the exclusive benefit of one or more qualifying
charitable organizations to be designated by the Company. Shares transferred to
such trust will remain outstanding, and the trustee of the trust will have all
voting and dividend rights pertaining to such shares. The trustee of such trust
may transfer such shares to a person whose ownership of such shares does not
violate the Ownership Limit or other applicable limitation. Upon a sale of such
shares by the trustee, the interest of the charitable beneficiary will
terminate, and the sales proceeds would be paid, first, to the original intended
transferee, to the extent of the lesser of (a) such transferee's original
purchase price (or the original market value of such shares if purportedly
acquired by gift or devise) and (b) the price received by the trustee, and,
second, any remainder to the charitable beneficiary. In addition, shares of
stock held in such trust are purchasable by the Company for a 90-day period at a
price equal to the lesser of the price paid for the stock by the original
intended transferee (or the original market value of such shares if purportedly
acquired by gift or devise) and the market price for the stock on the date that
the Company determines to purchase the stock. The 90-day period commences on the
date of the violation transfer or the date that the Board of Directors
determines in good faith that a violative transfer has occurred, whichever is
later. All certificates representing shares of Common Stock bear a legend
referring to the restrictions described above.

All persons who own, directly or by virtue of the attribution provisions of
the Code and Rule 13d-3 under the Exchange Act, more than a specified percentage
of the outstanding shares of Common Stock must file an affidavit with the
Company containing the information specified in the Company's Charter within 30
days after January 1 of each year. In addition, each stockholder shall upon
demand

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<PAGE>
be required to disclose to the Company in writing such information with respect
to the direct, indirect and constructive ownership of shares as the Board of
Directors deems necessary to comply with the provisions of the Code applicable
to a REIT or to comply with the requirements of any taxing authority or
governmental agency.

The ownership limitations may have the effect of precluding acquisition of
control of the Company by certain third parties unless the Board of Directors
determines that maintenance of REIT status is no longer in the best interests of
the Company.

CLASS B COMMON STOCK

The Class B Common Stock does not have voting or dividend rights and, unless
converted into Class A Common Stock, as described below, is subject to
repurchase by the Company as described below. As of December 31 of each of the
years 1994 through 1998 (each, a "Year-End Testing Date"), a number of the
shares of Class B Common Stock outstanding as of such date (the "Eligible Class
B Shares") become eligible for automatic conversion (subject to the Ownership
Limit) into an equal number of shares of Class A Common Stock (subject to
adjustment upon the occurrence of certain events in respect of the Class A
Common Stock, including stock dividends, subdivisions, combinations and
reclassifications). Once converted or forfeited, the Class B Common Stock may
not be reissued by the Company.

The Eligible Class B Shares convert to Class A Common Stock if (i) the
Company's Funds from Operations Per Share (as defined below) reaches certain
annual and cumulative growth targets and (ii) the average market price for a
share of Class A Common Stock for a 90-calendar day period beginning on any day
on or after the October 1 immediately preceding the relevant Year-End Testing
Date equals or exceeds a specified target price. "Funds from Operations Per
Share" or "FFO Per Share" means, for any period, (i) net income (loss), computed
in accordance with generally accepted accounting principles, excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures, less any preferred stock dividend payments, divided by (ii) the sum of
(a) the number of shares of the Class A Common Stock outstanding on the last day
of such period (excluding any shares of the Class A Common Stock into which
shares of the Class B Common Stock shall have been converted as a result of the
conversion of shares of the Class B Common Stock on the last day of such period)
and (b) the number of shares of the Class A Common Stock issuable to acquire
units of limited partnership that (x) may be tendered for redemption in any
limited partnership in which the Company serves as general partner and (y) are
outstanding on the last day of such period.

Set forth below for each of the remaining Year-End Testing Dates is (i) the
number of shares of Class B Common Stock that become Eligible Class B Shares as
of such date, (ii) the annual FFO Per Share growth target (as a percentage
increase in FFO Per Share from the prior year), (iii) the cumulative FFO Per
Share growth target (in FFO Per Share) and (iv) the average market price target:

<TABLE>
<CAPTION>
ELIGIBLE CLASS CUMULATIVE FFO
YEAR-END TESTING B ANNUAL FFO PER PER SHARE AVERAGE MARKET
DATE SHARES (1) SHARE GROWTH TARGET GROWTH TARGET PRICE TARGET
- ----------------------------------------- --------------- ----------------------- --------------- --------------
<S> <C> <C> <C> <C>
December 31, 1997........................ 162,500 8.5% $ 2.544 $ 24.307
December 31, 1998........................ 162,500 8.5% $ 2.760 $ 26.373
</TABLE>

- ------------------------
(1) Assumes that only the shares of Class B Common Stock outstanding as of
December 31, 1996 remain outstanding until converted into shares of Class A
Common Stock.

If the annual growth target is not met for a particular Year-End Testing
Date, the Eligible Class B Shares for that date may be converted as of a
subsequent Year-End Testing Date if all of the targets are met for that
subsequent Year-End Testing Date. Any Class B Common Stock that has not been
converted into Class A Common Stock following December 31, 1998 will be subject
to repurchase by the Company at a price of $0.10 per share. Class B Common Stock
is also subject to automatic conversion upon the occurrence of certain events,
including a change of control (as defined in the

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<PAGE>
Company's Charter). The Board of Directors may increase the number of shares
which are eligible for conversion as of any Year-End Testing Date and may, under
certain circumstances, accelerate the conversion of outstanding Class B Common
Stock at such time and in such amount as it may determine appropriate.

BUSINESS COMBINATIONS

Under the MGCL certain "business combinations" (including a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns 10% or more of the voting power
of the corporation's shares or an affiliate of the corporation who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then-outstanding voting stock of
the corporation (an "Interested Stockholder") or an affiliate thereof are
prohibited for five years after the most recent date on which the Interested
Stockholder became an Interested Stockholder. Thereafter, any such business
combination must be recommended by the board of directors of the corporation and
approved by the affirmative vote of at least (a) 80% of the votes entitled to be
cast by holders of outstanding voting shares of the corporation, voting together
as a single voting group, and (b) two-thirds of the votes entitled to be cast by
holders of outstanding voting shares of the corporation other than shares held
by the Interested Stockholder with whom the business combination is to be
effected, unless, among other conditions, the corporation's shareholders receive
a minimum price (as defined in the MGCL) for their shares and the consideration
is received in cash or in the same form as previously paid by the Interested
Stockholder for its shares. The business combination statute could have the
effect of discouraging offers to acquire the Company and of increasing the
difficulty of consummating any such offer. These provisions of the MGCL do not
apply, however, to business combinations that are approved or exempted by the
board of directors of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder.

CONTROL SHARE ACQUISITIONS

The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquiror or by officers or directors who
are employees of the corporation. "Control shares" are voting shares of stock
that, if aggregated with all other shares of stock previously acquired by that
person, would entitle the acquiror to exercise voting power in electing
directors within one of the following ranges of voting power: (i) one-fifth or
more but less than one-third, (ii) one-third or more but less than a majority,
or (iii) a majority or more of all voting power. Control shares do not include
shares the acquiring person is then entitled to vote as a result of having
previously obtained stockholder approval.

A "control share acquisition" means the acquisition of control shares,
subject to certain exceptions. A person who has made or proposes to make a
control share acquisition, upon satisfaction of certain conditions (including an
undertaking to pay expenses), may compel the corporation's board of directors to
call a special meeting of shareholders, to be held within 50 days of demand, to
consider the voting rights of the shares. If no request for a meeting is made,
the corporation may itself present the question at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring person
does not deliver an "acquiring person statement" as required by the statute,
then, subject to certain conditions and limitations, the corporation may redeem
any or all of the control shares (except those for which voting rights have
previously been approved) for fair value determined, without regard to voting
rights, as of the date of the last control share acquisition or of any meeting
of shareholders at which the voting rights of such shares were considered and
not approved. If voting rights for control shares are approved at a shareholders
meeting and the acquiror becomes entitled to vote a majority of the shares
entitled to vote, all other shareholders may exercise appraisal rights. The fair
value of the shares as

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<PAGE>
determined for purposes of the appraisal rights may not be less than the highest
price per share paid in the control share acquisition, and certain limitations
and restrictions otherwise applicable to the exercise of dissenters' rights do
not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the corporation's
articles of incorporation or bylaws prior to the control share acquisition. The
control share acquisition statute could have the effect of discouraging offers
to acquire the Company and of increasing the difficulty of consummating any such
offer.

DESCRIPTION OF WARRANTS

GENERAL

The Company may issue, together with other Securities or separately,
warrants for the purchase of Debt Securities, Preferred Stock or Class A Common
Stock (the "Warrants"). The Warrants may be issued under a Warrant Agreement
(each, a "Warrant Agreement") to be entered into between the Company and a bank
or trust company, as warrant agent (the "Warrant Agent"), as set forth in the
applicable Prospectus Supplement relating to any or all Warrants in respect of
which this Prospectus is being delivered. The Warrant Agent will act solely as
an agent of the Company in connection with the Warrants of a particular series
and will not assume any obligation or relationship of agency or trust for or
with any holders or beneficial owners of Warrants. The Warrant Agreement for
each Warrant, including the forms of certificates representing the Warrants
("Warrant Certificates"), will be filed as an exhibit to, or incorporated by
reference in, the Registration Statement of which this Prospectus forms a part
at or prior to the time of the issuance of such Warrants.

The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular terms
of the Warrants to which any Prospectus Supplement may relate and the extent, if
any, to which such general provisions may apply to the Warrants so offered will
be described in the applicable Prospectus Supplement. Capitalized terms used in
this section which are not otherwise defined in this Prospectus shall have the
meanings set forth in the Warrant Agreement and Warrant Certificate. The
following summary of certain provisions of the Warrants, Warrant Agreement and
Warrant Certificate does not purport to be complete and is subject to, and is
qualified in its entirety by express reference to, all the provisions of the
Warrant Agreement and Warrant Certificate, including the definitions therein of
certain terms.

Reference is made to the applicable Prospectus Supplement for the terms of
Warrants in respect of which this Prospectus is being delivered, the Warrant
Agreement relating to such Warrants and the Warrant Certificates representing
such Warrants, including the following: (i) the designation, aggregate principal
amount and terms of the Debt Securities or the designation and terms of the
Preferred Stock, if any, purchasable upon exercise of such Warrants; (ii) the
procedures and conditions relating to the exercise of such Warrants; (iii) the
designation and terms of any related Securities with which such Warrants are
issued and the number of such Warrants issued with each such Security; (iv) the
date, if any, on and after which such Warrants and the related Securities will
be separately transferable; (v) the offering price of the Warrants, if any; (vi)
the principal amount of Debt Securities or the number of shares of Preferred
Stock or Common Stock purchasable upon exercise of each Warrant and the price at
which such principal amount of Debt Securities or shares of Preferred Stock or
Class A Common Stock may be purchased upon such exercise, or the method of
determining such number and price; (vii) the date on which the right to exercise
such Warrants shall commence and the date on which such right shall expire;
(viii) a discussion of United States Federal income tax considerations
applicable to the ownership or exercise of such Warrants; (ix) whether the
Warrants represented by the Warrant Certificates will be issued in registered or
bearer form, and, if registered, where they may be transferred and registered;
(x) call provisions of such Warrants, if any; and (xi) any other terms of the
Warrants.

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<PAGE>
Warrant Certificates will be exchangeable for new Warrant Certificates of
different denominations and Warrants may be exercised at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement. Prior to the exercise of their Warrants, holders of
Warrants will not have any of the rights of holders of the Securities
purchasable upon such exercise and will not be entitled to payments of principal
of (or premium, if any) or interest, if any, on the Debt Securities purchasable
upon such exercise or to any dividend payments or voting rights that holders of
the Preferred Stock or Common Stock purchasable upon such exercise may be
entitled to.

Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities, or such number of shares of Preferred Stock or Class
A Common Stock, at such exercise price as shall, in each case, be set forth in,
or be determinable as set forth in, the applicable Prospectus Supplement
relating to the Warrants offered thereby. Unless otherwise specified in the
applicable Prospectus Supplement, Warrants may be exercised at any time up to
5:00 p.m. New York City time on the expiration date set forth in the applicable
Prospectus Supplement. After 5:00 p.m. New York City time on the expiration
date, unexercised Warrants will become void.

Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Warrants. Upon receipt of payment and the Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent on any other office indicated in the applicable Prospectus
Supplement, the Company will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants represented by
such Warrant Certificate are exercised, a new Warrant Certificate will be issued
for the remaining amount of Warrants.

PLAN OF DISTRIBUTION

The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in the
offer and sale of the Securities will be named in the applicable Prospectus
Supplement.

Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to the prevailing market prices at the time of
sale or at negotiated prices. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Securities
upon the terms and conditions set forth in the applicable Prospectus Supplement.
In connection with the sale of Securities, underwriters may be deemed to have
received compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Securities for
whom they may act as agent. Underwriters may sell Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions (which may be changed from time to time) from the
underwriters and/or commissions from the purchasers for whom they may act as
agent.

Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters under the Securities Act, and any discounts and commissions
received by them and any profit realized by them on resale of the Securities may
be deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act.

20
<PAGE>
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.

If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Securities sold pursuant to
Contracts shall not be less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but will, in all cases, be subject to the
approval of the Company. The terms and conditions of any Contracts will be set
forth in any Prospectus Supplement relating to the Securities being offered.
Agents and underwriters will have no responsibility in respect of the delivery
or performance of Contracts.

Until the distribution of the Securities offered pursuant to any Prospectus
Supplement is completed, the Commission's rules may limit the ability of any
underwriter participating in such distribution to bid for and purchase the
Securities offered thereby and other securities of the Company. As an exception
to these rules, the underwriters are permitted to engage in certain transactions
that stabilize or maintain the price of such securities. Such transactions
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of such securities. If any such underwriter creates a short position
in such securities in connection with the offering, such underwriter may reduce
such short position by purchasing securities.

In general, bids for or purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security to be higher than it might otherwise be in the absence of such bids or
purchases.

Neither the Company nor any underwriter participating in any distribution
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the
offered Securities or other securities of the Company. In addition, neither the
Company nor any such underwriter makes any representation that such underwriter
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.

Certain of the underwriters, if any, and their affiliates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.

The Securities may or may not be listed on a national securities exchange.
No assurances can be given that there will be a market for any of the
Securities.

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.

21
<PAGE>
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER 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, FOREIGN INCOME AND
OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION, AND OF
POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

TAXATION OF THE COMPANY

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 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.

The Company has elected to be taxed as a REIT under the Code commencing with
its taxable year ending December 31, 1994, and the Company intends to continue
to operate in such a manner. In the opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, commencing with the Company's taxable year ending December 31, 1994,
the Company 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 the Company as to factual matters (including
representations of the Company 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 the Company'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 the Company's operation for any one taxable year will satisfy
such requirements. See "-- Failure to Qualify." An opinion of counsel is not
binding on the Internal Revenue Service (the "Service"), and no assurance can be
given that the Service will not challenge the Company's eligibility for taxation
as a REIT.

If the Company 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, the Company will be subject to Federal
income tax as follows: First, the Company will be taxed at regular corporate
rates on any undistributed REIT taxable income, including undistributed net
capital gains. Second, under certain circumstances, the Company may be subject
to the "alternative minimum tax" on its items of tax preference. Third, if the
Company 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 the Company 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 the Company fails the 75% or 95% test multiplied by (b) a fraction
intended to reflect the Company's profitability. Fifth, if the Company 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

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periods, the Company would be subjected to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. In addition, the
Company could also be subject to tax in certain situations and on certain
transactions not presently contemplated.

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. The Company's Charter provides for restrictions regarding transfer of
its shares, which provisions are intended to assist the Company in continuing to
satisfy the share ownership requirements described in conditions (5) and (6)
above. Such transfer restrictions are described in "Description of Common Stock
- -- Restrictions on Transfer."

To monitor the Company's compliance with the share ownership requirements,
the Company is required to maintain records regarding the actual ownership of
its shares. To do so, the Company 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 the
Company'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. The Company 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, the Company'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 the Company for purposes of applying the REIT requirements
described herein. A summary of the rules governing the Federal income taxation
of partnerships and their partners is provided below in "Tax Aspects of the
Company's Investments in Partnerships."

INCOME TESTS. In order to maintain qualification as a REIT, the Company
annually must satisfy three gross income requirements. First, at least 75% of
the Company'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 the Company'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 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

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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 the Company's gross income for each
taxable year.

Rents received by the Company 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. 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, the Company (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 the Company through the
Operating Partnership's interest in PAMS LP. Such fee and other income generally
will not qualify under the 95% gross income test. The Company also expects to
receive distributions indirectly 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 the Company 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 the Company's failure to meet such tests was due to reasonable
cause and not due to willful neglect, the Company 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 the Company would be entitled to
the benefit of these relief provisions. If these relief provisions are
inapplicable to a particular set of circumstances involving the Company, the
Company 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. The Company, 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 the Company'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 the Company, cash, cash items and government securities.
Second, not more than 25% of the Company'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 the Company may not exceed 5% of the value of the Company's total assets, and
the Company may not own more than 10% of any one issuer's outstanding voting
securities.

The Company 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. The Company 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 the Company as a REIT, has relied on representations of the
Company 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 the Company's conclusions as to the
values of the Operating Partnership's interest in PAMS Inc., and this value is
subject to change in

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the future. Accordingly, there can be no assurance that the Service will not
contend that the Operating Partnership's ownership interests in the PAMS Inc.
disqualifies the Company from treatment as a REIT.

The Company's indirect interests in the Operating Partnership and other
Subsidiary Partnerships are held through wholly owned corporate subsidiaries of
the Company 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 the Company.
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, the Company'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. The Company, in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends) to
its shareholders in an amount at least equal to (A) the sum of (i) 95% of the
Company's "REIT taxable income" (computed without regard to the dividends paid
deduction and the Company'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 the
Company 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 the
Company 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 the Company 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, the Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. The Company believes that it has made, and intends to
make, timely distributions sufficient to satisfy this annual distribution
requirement.

It is possible that the Company, 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 the Company. In the event that such
timing differences occur, in order to meet the 95% distribution requirement, the
Company may find it necessary to arrange for short-term, or possibly long-term,
borrowings or to pay dividends in the form of taxable distributions of property.

Under certain circumstances, the Company may be able to rectify a failure to
meet the distribution requirement for a year by paying "deficiency dividends" to
shareholders in a later year, which may be included in the Company's deduction
for dividends paid for the earlier year. Thus, the Company may be able to avoid
being taxed on amounts distributed as deficiency dividends; however, the Company
will be required to pay interest based on the amount of any deduction taken for
deficiency dividends.

FAILURE TO QUALIFY. If the Company fails to qualify for taxation as a REIT
in any taxable year, and the relief provisions do not apply, the Company 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 the Company fails to qualify will not be deductible by the Company nor
will they be required to be made. In such event, to the extent of current and
accumulated earnings and profits, all distributions to shareholders will be
taxable as ordinary income, and, subject to certain limitations of the Code,
corporate distributees may be eligible for the dividends received deduction.

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<PAGE>
Unless entitled to relief under specific statutory provisions, the Company 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 the Company would be entitled to such
statutory relief.

TAX ASPECTS OF THE COMPANY'S INVESTMENTS IN PARTNERSHIPS

GENERAL. Substantially all of the Company'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. The Company 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, the Company will include its proportionate share of assets
held by the Partnerships. See "-- Taxation of the Company -- Ownership of
Partnership Interests."

ENTITY CLASSIFICATION. The Company's direct and indirect investment in
partnerships involves special tax considerations, including the possibility of a
challenge by the Service of the status of any of the 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 the Company's assets and items of gross income would change and could
preclude the Company from satisfying the asset tests and the income tests (see
"-- Taxation of the Company -- Asset Tests" and "-- Taxation of the Company --
Income Tests"), and in turn could prevent the Company from qualifying as a REIT.
See "-- Taxation of the Company -- Failure to Qualify" above for a discussion of
the effect of the Company'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 the Company might
incur a tax liability without any related cash distributions.

In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, which opinion is
based upon certain assumptions and representations by the Company 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 Securities 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 Service, and no assurance can be given that the Service 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 the Company to the Operating Partnership of
the cash proceeds received in any offerings of its stock.

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In general, certain holders of partnership interests in the Operating
Partnership ("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 Property 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 Partnerships may cause the Company 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 the Company to recognize taxable income in excess of cash proceeds, which
might adversely affect the Company's ability to comply with the REIT
distribution requirements. See "-- Taxation of the Company -- Annual
Distribution Requirements."

With respect to any property purchased or to be purchased by any of the
Partnerships (other than through the issuance of OP Units) subsequent to the
formation of the Company, 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. The Company'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 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 Property
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 the Company'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 their 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 Service will
not challenge such deductions. Any Federal, state or local income taxes that
PAMS Inc. is required to pay will reduce the Company'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 the Company qualifies as a REIT, distributions made to
the Company'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 the Company's actual net capital gain for the
taxable year) without regard to the period for which the stockholder has held
its stock. However, corporate shareholders 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

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<PAGE>
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 the Company 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 the
Company and received by the stockholder on December 31 of such year, provided
that the dividend is actually paid by the Company 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 the Company.

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 the Company required to be treated by such stockholder as
long-term capital gain.

TAXATION OF TAX-EXEMPT STOCKHOLDERS

Based upon a published ruling by the Service, distributions by the Company
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 the Company may be treated as UBTI to certain domestic private pension
trusts if the Company is treated as a "pension-held REIT." The Company believes
that it is not, and does not expect to become, a "pension-held REIT." If the
Company were to become a pension-held REIT, these rules generally would only
apply to certain pension trusts that hold more than 10% of the Company'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 the Company'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 the Company's earnings and profits which are not attributable to
capital gains of the Company and which are not effec-tively 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 the Company. In cases where
the dividend income from a Non-U.S. Holder's investment in stock of the Company
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 DISTRIBUTION. Unless the Class A Common Stock constitutes a
United States Real Property Interest (a "USRPI"), distributions by the Company
which are not dividends out of the earnings and profits of the Company 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 refund of such amounts from the IRS if it is
subsequently determined that such distribution was, in fact, in excess of
current and

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accumulated earnings and profits of the Company. If the Class A Common Stock
constitutes a USRPI, such distributions will be subject to 10% withholding and
taxed pursuant to the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA") at a rate of 35% to the extent such distributions exceed a
stockholder's basis in his or her Class A Common Stock.

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 THE COMPANY. Unless the Company'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 the
Company 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. The
Company believes that it is, and it expects to continue to be a domestically
controlled REIT, and therefore that the sale of the Company's stock will not be
subject to taxation under FIRPTA. Because the Company's stock will be publicly
traded, however, no assurance can be given the Company will continue to be a
domestically controlled REIT.

If the Company 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 the Company's Class A Common Stock is listed)
and (ii) the selling Non-U.S. Holder held 5% or less of the Company's
out-standing stock at all times during a specified testing period.

If gain on the sale of stock of the Company 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 pur-chaser of the stock could be required to withhold 10%
of the purchase price and remit such amount to the Service.

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 the Company 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 the Company 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 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. The Company must report
annually to the Service 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

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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 the Company to a Non-U.S. Holder at an address outside the United
States.

The payment of the proceeds from the disposition of stock of the Company 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 Service.

These information reporting and backup withholding rules are under review by
the U.S. Treasury and their application to the Securities could be changed by
future regulations. On April 15, 1996, the Service 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 Securities.

OTHER TAX CONSEQUENCES

POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX
CONSEQUENCES. Prospective investors in the Securities should recognize that the
present Federal income tax treatment of an investment in the Operating
Partnership or the Company 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 Service 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 and
interpretations thereof could adversely affect the tax consequences of an
investment in the Operating Partnership or the Company. For example, a recent
Federal budget proposal contains language which, if enacted in its present form,
would result in the immediate taxation of all gain inherent in a corporation's
assets upon an election by the corporation to become a REIT, and thus would
effectively preclude the Company from re-electing REIT status following a
termination of its REIT qualification.

STATE AND LOCAL TAXES. The Company and its shareholders 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 the Company and its shareholders may not conform to the federal
income tax consequences discussed above. Consequently, prospective shareholders
should consult their own tax advisors regarding the effect of state and local
tax laws on an investment in the Company.

LEGAL MATTERS

Certain tax matters will be passed upon for the Company by Skadden, Arps,
Slate, Meagher & Flom LLP, Los Angeles, California. The validity of the
Securities offered hereby will be passed upon for

30
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the Company by Piper & Marbury L.L.P., Baltimore, Maryland. Certain matters as
to Maryland law will be passed upon for the Company by Piper & Marbury L.L.P.
Certain matters as to Florida law will be passed upon for the Company 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, 1996 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 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 consolidated financial statements of NHP Incorporated for the years
ended December 31, 1996, 1995 and 1994 included in the Company's Current Report
on Form 8-K dated April 16, 1997, have been audited by Arthur Andersen LLP,
independent public accountants, as set forth in their report thereon included
therein and incorporated by reference herein. Such consolidated 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.

As noted in their report, Arthur Andersen LLP did not audit the 1994
financial statements of certain real estate partnerships whose operating results
are included in "income (loss) from discontinued real estate operations, net of
income taxes" in the 1994 consolidated financial statements. The financial
statements of these real estate partnerships were audited by other auditors,
whose reports are filed as exhibits to the Company's Current Report on Form 8-K,
dated April 16, 1997, and Arthur Andersen LLP's opinion, insofar as it relates
to the amounts included in the consolidated financial statements for these real
estate partnerships, is based solely on the reports of those auditors included
therein and incorporated herein by reference. The auditors on whose reports
Arthur Andersen LLP relied are: Anders, Minkler & Diehl LLP; Dauby O'Connor &
Zaleski, LLC; Deloitte & Touche LLP; Edwards Leap & Sauer; George A. Hieronymous
& Company, LLC; Goldenberg Rosenthal Friedlander, LLP; Hansen, Hunter & Kibbee,
P.C.; J.H. Cohn LLP; J.A. Plumer & Co., P.A.; Marks Shron & Company, LLP;
Reznick Fedder & Silverman; and Russell Thompson Butler & Houston.

The Historical Summary of Gross Income and Direct Operating Expenses of
Villa Ladera Apartments for the year ended December 31, 1995 included in the
Company's Current Report on Form 8-K, dated December 19, 1996, has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such Historical Summary
is incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

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.

31
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS
SUPPLEMENT. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY AIMCO OR THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, ANY OF THE SECURITIES COVERED BY THIS PROSPECTUS SUPPLEMENT 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 SUPPLEMENT NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS
SUPPLEMENT OR IN THE AFFAIRS OF AIMCO SINCE THE DATE HEREOF.
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT

Prospectus Supplement Summary............... S- 3
Risk Factors................................ S-13
Use of Proceeds............................. S-24
Capitalization.............................. S-25
Price Range of and Dividends on Common
Stock..................................... S-26
Selected Pro Forma and Historical Financial
Information............................... S-27
Business and Growth Strategies.............. S-30
Board of Directors and Officers............. S-40
Underwriting................................ S-45
Certain Federal Income Tax Considerations... S-46
Experts..................................... S-47
Legal Matters............................... S-49

PROSPECTUS
Available Information....................... 2
Incorporation of Certain Documents by
Reference................................. 2
The Company................................. 4
Use of Proceeds............................. 5
Ratio of Earnings to Fixed Charges.......... 5
Description of Debt Securities.............. 5
Description of Preferred Stock.............. 12
Description of Common Stock................. 15
Description of Warrants..................... 19
Plan of Distribution........................ 20
Certain Federal Income Tax Considerations... 21
Legal Matters............................... 30
Experts..................................... 31
</TABLE>

7,000,000 SHARES

[LOGO]

APARTMENT
INVESTMENT AND
MANAGEMENT COMPANY

CLASS A COMMON STOCK

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PROSPECTUS SUPPLEMENT
OCTOBER 22, 1997

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SMITH BARNEY INC.
BT ALEX. BROWN
LEHMAN BROTHERS
MERRILL LYNCH & CO.
RAYMOND JAMES & ASSOCIATES, INC.
THE ROBINSON-HUMPHREY COMPANY

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