Apartment Investment and Management Co (AIV.N), one of the largest U.S. apartment landlords, said third-quarter funds from operations fell 69.5 percent on impairments and lower rents.

FFO, a performance metric for real estate investment trusts, dropped to $22.3 million, or 19 cents per share, from $73 million, or 60 cents per share, a year earlier.

FFO excludes the profit-reducing effect of depreciation.

Excluding one-time items, FFO was 41 cents per share. On that basis, analysts on average had expected 39 cents, according Thomson Reuters I/B/E/S.

For more than a year, apartment landlords have been grappling with declining rents and occupancies due to rising U.S. unemployment, which crimps demand for apartments. To retain tenants, landlords have been reducing rent and offering months of free rent and other concessions.

Aimco said third-quarter net operating income, or NOI, on properties owned at least a year fell 5.4 percent -- within the range of 5 percent to 6 percent the company had forecast. Revenue fell 2.9 percent and expenses rose 1.1 percent. Average occupancy fell to 94.8 percent from 95 percent.

For the fourth quarter, the company expects comparable NOI to decline 7 percent to 8 percent from a year earlier. For the full year, it sees NOI down by 4 percent to 5 percent, within the range of its prior forecast.

Aimco expects fourth-quarter FFO of 32 cents to 40 cents per share. It narrowed its full-year FFO forecast to a range of $1.61 to $1.69, from a previous forecast of $1.55 to $1.75. The full-year forecast includes a loss of 15 cents per share from asset sales. Sale proceeds are being used in part to pay off debt.

Analysts expected full-year FFO of $1.54 per share.

The Denver-based company also said it had reduced its balance on term debt due 2011 to $210 million, including a $50 million reduction made after the quarter's end. At the end of the quarter, Aimco's property debt balance maturing through 2011 was $184.5 million.

Aimco shares closed on Thursday at $13.18 on the New York Stock Exchange and were inactive in premarket trade Friday.

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