The Denver Business Journal recently reported that the Apartment Investors & Management Co. (AIMCO) reached a settlement ($4.2 million) with the U.S. Department of Housing and Urban Development (HUD) for alleged mismanagement of HUD-assisted or insured apartment properties.
The Denver-based REIT holds a geographically diversified portfolio of apartment communities operated through 25 regional operating centers. Through its subsidiaries, they operate 1,720 properties, including 326,289 apartment units, serving approximately one million residents. Their properties are located in 47 states, the District of Columbia and Puerto Rico.
AIMCO paid the settlement on behalf of its National Housing Partnership subsidiary (acquired in 1997) and its Buyers Access group purchasing program practices, which were investigated by a grand jury. AIMCO has been absolved of any wrongdoing by the settlement.
AIMCO is a publicly traded real estate investment trust (REIT), successor to The Considine Company, Inc. founded by Terry Considine, former Colorado state senator in May 1975. Considine organized a real estate investment trust (REIT) in 1994 and AIMCO became a public company through an Initial Public Offering in July 1994. Initial assets included properties controlled by Terry Considine, PDI, Inc. properties and the property management business of Property Asset Management.
The National Association of Real Estate Investment Trusts' web site explains that a REIT is "essentially a corporation or business trust that combines the capital of many investors to acquire or provide financing for all forms of real estate. A REIT serves much like a mutual fund for real estate in that retail investors obtain the benefit of a diversified portfolio under professional management. Its shares are freely traded, often on a major stock exchange.
Congress created REITs in 1960 to enable small investors to make investments in large-scale, income-producing real estate. Congress decided that the only way for the average investor to access investments in significant commercial properties was through pooling arrangements. As a result, Congress designed REITs to unite the capital of many into a single economic enterprise. That enterprise is geared to the production of income through commercial real estate ownership and finance."
Pat Rioux
