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DENVER-Apartment Investment and Management Co., the nation’slargest apartment real estate investment trust by some measures, reported net income of $163.2 million in the third quarter, more than a 300% increase from the $40.6 million profit in the third quarter of 2003. However, the lion’s share of the $122.6 million increase came from the $151.6 million in profits from the sale of multifamily communities.

That was somewhat offset by the $21.4 million in lower operating income in the third quarter compared to the same period in 2003. And earnings per share were $1.48 on a diluted basis, compared with $0.15 in the third quarter 2003, a whopping 886% increase.

Funds from operations, the most important measure of a health of a REIT, however, were not as stellar. Aimco’s was $73.8 million, or $0.78 per share, compared with, or $0.80 per share in the third quarter 2003. And adjusted FFO is $62.2 million, or $0.66 per share, compared with $63.7 million, or $0.66 per share, in the third quarter 2003.

Aimco chairman and chief executive officer Terry Considine says there is much to be proud of during the third quarter. However, Aimco still needs to do some belt tightening, he adds. “While revenues are improving, we have work to do in controlling expenses, which were inflated everywhere by the high number of move-ins and, in Florida andthe Southeast, by hurricanes,” Considine says.

Considine notes that under the company’s chief investment officer, Harry Alcock, the company sold nearly $600 million worth of properties during the third quarter, including three properties to be converted into condos, for cap rates averaging 4.1%. The company used a portion of the sales to buy properties in New York and Miami, where it expects higher returns.

Considine notes Paul McAulifee, the company’s chief financial officer, used the balance of sales proceeds to reduce total debt by $376 million during the quarter. In addition, McAulifee replaced or exchanged $236 million in preferred stock reducing the annual preferred dividends by almost $2 million. He also restructured the company’s corporate line and term debt, reducing interest costs by 120 basis points.

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