DENVER-Locally based Apartment Investment and Management Co., one of the largest apartment real estate investment trusts in the nation by some measures, has reported an 83.8% drop in net income in the third quarter, compared with the same period in 2004.

The company, in a Securities and Exchange Commission 8K filing, reported net income of $26.4 million compared with $163.2 million a year earlier. The $136.8-million decrease was due to lower gains on the sales of real estate and $27.7 million higher depreciation expenses, partially offset by a $23.3-million improvement in property netincome. Earnings per share in the third quarter were 5 cents per diluted share, compared with $1.48 per share in the third quarter of 2004, a 96.6% drop.

In the third quarter of 2004, the company had about $600 million in real estate sales, according to SEC documents filed a year ago and examined by GlobeSt.com. The bulk of the sales were to condo developers in key markets. Those properties sold at an average cap rate of 4.1%.

The company also reports that FFO, before impairment and preferred redemption charges, were $61.9 million or 65 cents per share. FFO includes a charge of 2 cents per share related to damage caused by hurricanes Katrina and Rita. Excluding this charge, the FFO met the low end of Aimco's guidance range. FFO dropped 25% to $55.2 million from $73.8 million a year earlier. That equates to 58 cents per share, a 25.6% drop fromthe 78 cents per share FFO in the third quarter of 2004.

Terry Considine, CEO and chairman of the company, wasn't disappointed. "Aimco had a solid third quarter; increased occupancies position the portfolio for significant increases in fourth quarter and profitability," Considine says. "Redevelopment is ramping up, and progress on entitlements offer the potential for substantial increases to net assetvalue."

Aimco, through its subsidiaries, operates approximately 1,425 properties, including approximately 250,000 apartment units. The company serves nearly one million residents annually. Aimco's properties are in 47 states, the District of Columbia and Puerto Rico.