Our portfolio management strategy includes property dispositions and acquisitions aimed at concentrating our portfolio in our target markets, which are the largest 20 U.S. markets as measured by the total market value of institutional-grade apartment properties in a particular market (total market capitalization). We continue to increase our allocation of capital to well located properties within our target markets and are currently marketing for sale approximately $2.0 billion of conventional and affordable assets located primarily outside these target markets.
We also continue to focus on maintaining a sound balance sheet with balanced sources and uses of cash, ample liquidity and coverage ratios adequate to satisfy bank debt covenants. We are financed primarily with long-term, non-recourse property debt, which represented 84% of our leverage at March 31, 2009, with a weighted average maturity of 9.6 years. Approximately 11% of our leverage at March 31, 2009, is perpetual preferred equity. In order to limit refunding risk, during 2009 we intend to refinance 26 property loans totaling $434.2 million that mature during the balance of 2009 through 2011. The remaining balance of property debt maturities through 2011 totals $99.9 million and is related to four loans, all of which mature in 2011. In addition, net cash proceeds from asset sales are expected to be used first to reduce our $350.0 million bank term debt that matures in the first quarter 2011 and to increase cash reserves.
We expect the financial and economic conditions for the remainder of 2009 to continue to be very difficult and we will continue to evaluate our activities and organizational structure, and intend to adjust as necessary. The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying condensed consolidated financial statements in Item 1. Results of Operations
Overview
Three months ended March 31, 2009 compared to March 31, 2008 We reported net loss attributable to Aimco of $24.5 million and net loss attributable to Aimco common stockholders of $37.7 million for the three months ended March 31, 2009, compared to net loss attributable to Aimco of $24.6 million and net loss attributable to Aimco common stockholders of $38.9 million for the three months ended March 31, 2008, decreases of $0.1 million and $1.2 million, respectively. These decreases were principally due to the following items, all of which are discussed in further detail below:
• an increase in gain on dispositions of unconsolidated real estate and other, primarily related to additional proceeds received in 2009 related to our disposition during 2008 of an interest in an unconsolidated real estate partnership;

• a favorable change in the effect on our earnings of noncontrolling interests in consolidated real estate partnerships; and

• an increase in net operating income associated with property operations, primarily related to completed redevelopments and a decrease in casualty losses relative to 2008.

The effects of these items on our operating results were substantially offset by:
• a decrease in income from discontinued operations, primarily related to the volume of sales in 2008 and the related number of properties included in discontinued operations in 2008 relative to 2009;

• an increase in depreciation and amortization expense, primarily related to completed redevelopments and capital expenditures; and

• a decrease in interest income, primarily related to lower cash balances and interest rates.

The following paragraphs discuss these and other items affecting the results of our operations in more detail.
Business Segment Operating Results
We have two reportable segments: real estate (owning, operating and redeveloping apartments) and investment management (portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities). Several members of our executive management team comprise our chief operating decision maker, as defined in FASB Statement of Financial Accounting Standards No. 131, Disclosures About Segments of an Enterprise and Related Information, and use various generally accepted industry financial measures to assess the performance and financial condition of the business, including: NAV; FFO; AFFO; same store property operating results; net operating income; Free Cash Flow; Economic Income; financial coverage ratios; and leverage as shown on our balance sheet. Our chief operating decision maker emphasizes net operating income as a key measurement of segment profit or loss. Segment net operating income is generally defined as segment revenues less direct segment operating expenses.

Real Estate Segment
Our real estate segment involves the ownership and operation of properties that
generate rental and other property-related income through the leasing of
apartment units. Our real estate segment's net operating income also includes
income from property management services performed for unconsolidated
partnerships and unrelated parties.
The following table summarizes our real estate segment's net operating income
for the three months ended March 31, 2009 and 2008 (in thousands):

                                                              Three Months Ended
                                                                   March 31,
                                                              2009          2008
  Real estate segment revenues:
  Rental and other property revenues                        $ 338,093     $ 332,892
  Property management revenues, primarily from affiliates       1,644         2,104

                                                              339,737       334,996

  Real estate segment expenses:
  Property operating expenses                                 156,489       161,764
  Property management expenses                                  1,433         1,335

                                                              157,922       163,099

  Real estate segment net operating income                  $ 181,815     $ 171,897

Consolidated Conventional Same Store Property Operating Results Same store operating results is a key indicator we use to assess the performance of our property operations and to understand the period over period operations of a consistent portfolio of properties. We define "consolidated same store" properties as our conventional properties (i) that we manage, (ii) in which our ownership interest exceeds 10%, (iii) the operations of which have been stabilized, and (iv) that have not been sold or classified as held for sale, in each case, throughout all periods presented. The following tables summarize the operations of our consolidated conventional rental property operations:

                                                   Three Months Ended
                                                        March 31,
                                                   2009          2008        Change
      Consolidated same store revenues           $ 212,093     $ 213,761        -0.8 %
      Consolidated same store expenses              83,890        85,556        -1.9 %

      Same store net operating income              128,203       128,205           -
      Reconciling items (1)                         53,612        43,692        22.7 %

      Real estate segment net operating income   $ 181,815     $ 171,897         5.8 %


      Same store operating statistics:
      Properties                                       225           225           -
      Apartment units                               71,198        71,198           -
      Average physical occupancy                      93.6 %        94.9 %      -1.4 %
      Average rent/unit/month                    $     968     $     967         0.1 %

(1) Reflects property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition, redevelopment and newly consolidated properties) and casualty gains and losses.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, consolidated same store net operating income was comparable. Revenues decreased $1.7 million, or 0.8%, primarily due to a decrease in average physical occupancy partially offset by higher utility billings. Expenses decreased by $1.7 million, or 1.9%, primarily due to decreases of $1.2 million in marketing expense, $0.6 million in employee compensation and related expenses and $0.5 million in contract services expense, partially offset by an increase of $0.8 million in property tax expense.
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, consolidated real estate segment net operating income related to consolidated properties other than same store properties increased by $9.9 million, or 22.7%. This increase was primarily attributable to higher net operating income of $3.5 million for redevelopment properties based on more units in service at these properties in 2009, and a $3.6 million decrease in casualty losses relative to 2008. The remainder of the increase in net operating income was attributed to properties acquired subsequent to March 31, 2008 and affordable properties.

Investment Management Segment
Our investment management segment includes activities and services related to our owned portfolio of properties as well as services provided to affiliated partnerships. Activities and services that fall within investment management include portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities. Within our owned portfolio, we refer to these activities as "Portfolio Management," and their benefit is seen in property operating results and in investment gains. For affiliated partnerships, we refer to these activities as "Asset Management," for which we are separately compensated through fees paid by third party investors. The expenses of this segment consist primarily of the costs of departments that perform these activities. These activities are conducted in part by our taxable subsidiaries, and the related net operating income may be subject to income taxes.
Transactions occur on varying timetables; thus, the income varies from period to period. We have affiliated real estate partnerships for which we have identified a pipeline of transactional opportunities. As a result, we view asset management fees as a predictable part of our core business strategy. Asset management revenue includes certain fees that were earned in a prior period, but not recognized at that time because collectibility was not reasonably assured. Those fees may be recognized in a subsequent period upon occurrence of a transaction or a high level of the probability of occurrence of a transaction within twelve months, or improvement in operations that generates sufficient cash to pay the fees.
The following table summarizes the net operating income from our investment management segment for the three months ended March 31, 2009 and 2008 (in thousands):

                                                        Three Months Ended
                                                             March 31,
                                                        2009           2008
        Asset management and tax credit revenues      $   9,539      $ 12,852
        Investment management expenses                    3,789         4,387

        Investment segment net operating income (1)   $   5,750      $  8,465

(1) Excludes certain items of income and expense, which are included in our consolidated statements of income in:
other
expenses, net;
interest
expense;
interest
income;
gain (loss) on
dispositions
of
unconsolidated
real estate
and other; and
noncontrolling
interests in
consolidated
real estate
partnerships.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, net operating income from investment management decreased $2.7 million, or 32.1%. This decrease is primarily attributable to a $4.2 million decrease in promote income, which is income earned in connection with the disposition of properties owned by our consolidated joint ventures, partially offset by a $1.2 million increase in revenues associated with our affordable housing tax credit syndication business, including syndication fees and other revenue earned in connection with these arrangements, and a $0.6 million decrease in investment management expenses. Other Operating Expenses (Income)
Depreciation and Amortization
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, depreciation and amortization increased $19.7 million, or 19.0%. This increase primarily relates to depreciation for properties acquired subsequent to March 31, 2008, completed redevelopments and other capital projects recently placed in service.
General and Administrative Expenses
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, general and administrative expenses decreased $1.3 million, or 6.1%. This decrease is primarily attributable to reductions of $0.9 million in personnel and related expenses, attributed partially to our organizational restructuring initiated during the fourth quarter 2008 (see Note 4 of the condensed consolidated financial statements in Item 1 for additional information).

Other Expenses, Net
Other expenses, net includes franchise taxes, risk management activities, partnership administration expenses and certain non-recurring items. For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, other expenses, net decreased by $3.5 million. The net decrease is primarily attributed to a $4.5 million reduction in expenses of our self insurance activities, related to a decrease in casualty losses on less than wholly owned properties from 2008 to 2009. Interest Income
Interest income consists primarily of interest on notes receivable from non-affiliates and unconsolidated real estate partnerships, interest on cash and restricted cash accounts, and accretion of discounts on certain notes receivable from unconsolidated real estate partnerships. Transactions that result in accretion occur infrequently and thus accretion income may vary from period to period.
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, interest income decreased $4.8 million, or 58.8%. The decrease is primarily attributable to a decrease of $3.2 million due to lower interest rates on notes receivable, cash and restricted cash balances and lower average balances, and a $1.5 million reduction in accretion income. Interest Expense
Interest expense, which includes the amortization of deferred financing costs, was comparable for the three months ended March 31, 2009 and 2008. Interest expense increased by $0.4 million on property loans payable due to higher balances resulting primarily from refinancing activities, offset by lower average interest rates, and by $5.0 million due to decreases in capitalized interest related to redevelopment activities. These increases were substantially offset by a decrease of $5.4 million in corporate interest expense primarily due to lower average interest rates and balances. Provision for Operating Real Estate Impairment Losses Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the estimated aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.
During the three months ended March 31, 2009, we recognized impairment losses of $1.8 million. We recognized no such impairment losses during the three months ended March 31, 2008.
Gain on Dispositions of Unconsolidated Real Estate and Other Gain on dispositions of unconsolidated real estate and other includes our share of gains related to dispositions of real estate by unconsolidated real estate partnerships, gains on disposition of interests in unconsolidated real estate partnerships, gains on dispositions of land and other non-depreciable assets and costs related to asset disposal activities. Changes in the level of gains recognized from period to period reflect the changing level of disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period.
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, gain on dispositions of unconsolidated real estate and other increased $11.0 million. This increase is primarily attributable to an $8.6 million gain on the disposition of an interest in an unconsolidated real estate partnership. During the three months ended March 31, 2009, we received additional proceeds related to our disposition during 2008 of an interest in an unconsolidated real estate partnership and recognized an additional gain on such disposition during the three months ended March 31, 2009. The increase in gains during 2009 is also attributable to $1.6 million of gains on properties sold by unconsolidated real estate partnerships and a $0.7 million gain on the sale of an undeveloped land parcel during the three months ended March 31, 2009.

Income Tax Benefit
Certain of our operations, such as property management, asset management and risk management, are conducted through, and certain of our properties are owned by, taxable REIT subsidiaries, each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and, as such, is subject to United States Federal corporate income tax. We use TRS entities to facilitate our ability to offer certain services and activities to our residents and investment partners, as these services and activities generally cannot be offered directly by the REIT. We also use TRS entities to hold investments in certain properties. Income taxes related to the results of continuing operations of our TRS entities are included in income tax benefit in our consolidated statements of income.
For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, income tax benefit increased by $1.2 million. This increase was primarily attributed to an increase in losses of our TRS entities. Income from Discontinued Operations
The results of operations for properties sold during the period or designated as held for sale at the end of the period are generally required to be classified as discontinued operations for all periods presented. The components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale and property-specific interest expense and debt extinguishment gains and losses to the extent there is secured debt on the property. In addition, any impairment losses on assets held for sale and the net gain or loss on the eventual disposal of properties held for sale are reported in discontinued operations.
For the three months ended March 31, 2009 and 2008, income from discontinued operations totaled $3.7 million and $8.2 million, respectively. The $4.5 million decrease in income from discontinued operations was principally due to a $23.7 million decrease in operating income, offset by a $15.6 million decrease in interest expense, both of which were attributable to fewer properties included in discontinued operations in 2009 relative to 2008. The decrease in discontinued operations is partially offset by $4.6 million of real estate impairment recoveries in 2009.
During the three months ended March 31, 2009, we sold 10 consolidated properties, resulting in a net gain on sale of approximately $4.3 million (which includes $0.2 million of related income taxes). During the three months ended March 31, 2008, we sold four consolidated properties, resulting in a gain on sale of approximately $4.3 million (which includes $0.1 million of related income tax benefit). For the three months ended March 31, 2009 and 2008, income from discontinued operations includes the operating results of the properties sold or classified as held for sale as of March 31, 2009.
Changes in the level of gains recognized from period to period reflect the changing level of our disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period (see Note 3 of the condensed consolidated financial statements in Item 1 for additional information on discontinued operations).
Noncontrolling Interests in Consolidated Real Estate Partnerships Noncontrolling interests in consolidated real estate partnerships reflects noncontrolling partners' share of operating results of consolidated real estate partnerships. This generally includes the noncontrolling partners' share of property management fees, interest on notes and other amounts eliminated in consolidation that we charge to such partnerships. As discussed in Note 2 to the condensed consolidated financial statements in Item 1, we adopted SFAS 160 effective January 1, 2009. Prior to our adoption of SFAS 160, we generally did . . .