Aimco Sues IQHQ, Claiming 'False Promises' Induced Failed $50M Investment
Multifamily REIT Apartment Investment and Management Co. — in the midst of liquidating its portfolio and closing shop — launched a lawsuit against IQHQ, a struggling life sciences developer, seeking to claw back a $50M investment that Aimco’s attorneys say has been "eroded to near worthlessness."
Denver-based Aimco is suing IQHQ over a 2020 investment in which the REIT provided $50M “based on repeated and false promises” that it would be IQHQ’s partner for the multifamily component of new developments.
After securing the capital, the publicly traded REIT alleges that IQHQ excluded it from multifamily opportunities, “diluted and subordinated” Aimco's investment “through conflicted financings and insider transactions, charged and reimbursed excessive and self-interested management expenses, and withheld timely, complete, and accurate information from” Aimco.
The heavily redacted public filing in the Delaware Court of Chancery alleges that IQHQ executives engaged in a five-year-long effort to string Aimco along while failing to present the multifamily REIT “with a single qualifying multifamily opportunity” and that the life sciences developer excluded it from at least one project.
"The company believes the allegations in the complaint to be baseless and wholly without merit and intends to defend itself vigorously," Chris Brewer, IQHQ's general counsel, said in an email.
Aimco didn’t respond to Bisnow’s requests for comment Tuesday evening. The suit was posted online by banking intelligence platform AtriumData.ai.
Aimco's attorneys say the REIT had the opportunity to divest some or all of its shares in IQHQ when it restructured in 2022 but was successfully enticed to recapitalize its investment through misrepresentations by IQHQ about the partnership.
IQHQ allegedly presented Aimco with written material describing its “live-work-play” life sciences projects and represented “that certain identified opportunities involved substantial multifamily residential components,” according to the suit, filed by attorneys from Delaware-based Heyman Enerio Gattuso & Hirzel LLP.
IQHQ is accused of misrepresenting its financial position, but many of the details of the allegations are redacted in the public filing. The civil suit says San Diego-based IQHQ’s negligent misconduct included misleading statements about existing deal pursuits, the failure to disclose “material facts concerning IQHQ REIT’s financial capacity,” and inaccurately representing the extent to which investor funds would go toward management fees.
Had the REIT “known the truth and been provided all material facts and timely, accurate financial information, [it] would have exited when it had the chance,” attorneys for Aimco wrote. Instead, IQHQ's “post-investment lies and omissions kept [Aimco] invested while its position was diluted and eroded to near worthlessness.”
Aimco took a $47M impairment charge on the investment in August 2024, when it told investors it had “determined that our investment in IQHQ was impaired after consideration of factors, including adverse capital market conditions, increased real estate development costs, and IQHQ's financial condition.”
Aimco is asking a judge to order IQHQ to provide restitution based on IQHQ’s "fraudulent inducement,” including the return of the REIT’s invested capital, restitution for “improper insider benefits” including fees and reimbursements, and compensatory damages to be proven at trial.
Aimco announced plans to liquidate when it reported third-quarter earnings in November, and the plan was promptly approved by shareholders.
The REIT had already been shedding assets, and has continued trading off the 15 properties in its portfolio, when it announced plans to close. In February, it sold a 372-unit apartment complex in South Florida for $69M to Harbor Group International.
IQHQ is one of the largest privately held lab developers in the country with a 3.6M SF operational portfolio, and it’s been weighed down by the sector’s lagging performance in recent years.
Six registered funds with $707M allocated to the developer marked down their positions in the second half of 2025, an indicator of sliding asset values in the sector.
New York-based Bluerock is IQHQ’s largest shareholder, with more than $700M in exposure as part of a $3.6B fund that was marked down by 4.4% in the back half of last year. Another Bluerock fund that launched in 2012 went public in December after three years of negative returns and saw its shares crater.
The asset manager said the Bluerock Total Income+ Real Estate Fund net asset value was $25.52 per share, but investors priced shares around $15 in the day’s trading, a 38% discount. The fund, which trades under the ticker BPRE, was trading above $16 per share early Wednesday.
UPDATE, APRIL 1, 1:45 P.M. ET: This story has been updated to include comment from IQHQ's general counsel.
