NOTE 5: INVESTMENTS IN REAL ESTATE

The table below summarizes our investments in real estate:


	As of March 31, 2014					As of December 31, 2013
	Book Value			Number of Properties		Book Value			Number of Properties
Multi-family real estate properties	$	914,330			45	$	716,708			37
Office real estate properties		294,091			12		282,371			11
Retail real estate properties		83,767			4		83,653			4
Parcels of land		49,683			10		49,199			10

Subtotal		1,341,871			71		1,131,931			62
Less: Accumulated depreciation and amortization		(135,876	)				(127,745	)

Investments in real estate	$	1,205,995				$	1,004,186

As of March 31, 2014, our investments in real estate of $1,205,995 are financed through $297,082 of mortgages held by third parties and $891,314 of mortgages held by our RAIT I and RAIT II CDO securitizations. As of December 31, 2013, our investments in real estate of $1,004,186 are financed through $171,223 of mortgages held by third parties and $864,689 of mortgages held by our RAIT I and RAIT II CDO securitizations. Together, along with commercial real estate loans held by RAIT I and RAIT II, these mortgages serve as collateral for the CDO notes payable issued by the RAIT I and RAIT II CDO securitizations. All intercompany balances and interest charges are eliminated in consolidation.

Acquisitions:

During the three-month period ended March 31, 2014, we acquired nine multi-family properties and one office property with a combined purchase price of $211,942, which we assumed first mortgages on some of these properties. Upon acquisition, we recorded the investment in real estate, including any related working capital and intangible assets, at fair value of $217,481 and recorded a gain on asset of $5,539. Of these acquisitions, our subsidiary, Independence Realty Trust, Inc., acquired seven properties at a fair value of $132,131.

The following table summarizes the aggregate estimated fair value of the assets and liabilities associated with the ten properties acquired during the three-month period ended March 31, 2014, on the respective date of each acquisition, for the real estate accounted for under FASB ASC Topic 805.


Description	Estimated Fair Value
Assets acquired:
Investments in real estate	$	213,703
Cash and cash equivalents		283
Restricted cash		1,436
Other assets		1,457
Deferred financing costs		702
Intangible assets		3,778

Total assets acquired		221,359
Liabilities assumed:
Loans payable on real estate		110,255
Accounts payable and accrued expenses		3,049
Other liabilities		2,481

Total liabilities assumed		115,785
Noncontrolling interests assumed:		3,000

Estimated fair value of net assets acquired	$	102,574

The following table summarizes the consideration transferred to acquire the real estate properties and the amounts of identified assets acquired and liabilities assumed at the respective conversion date:


Description	Estimated Fair Value
Fair value of consideration transferred:
Commercial real estate loans and cash	$	97,680
Other considerations		4,894

Total fair value of consideration transferred	$	102,574

During the three-month period ended March 31, 2014, these investments contributed revenue of $3,933 and a net income allocable to common shares of $209. During the three-month period ended March 31, 2014, we incurred $317 of third-party acquisition-related costs, which is included in general and administrative expense in the accompanying consolidated statements of operations.

The table below presents the revenue, net income and earnings per share effect of the acquired properties, as reported in our consolidated financial statements and on a pro forma basis as if the acquisitions occurred on January 1, 2013. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods.


Description	For the Three-Month Period Ended March 31, 2014		For the Three-Month Period Ended March 31, 2013
Total revenue of real estate properties acquired, as reported	$	3,933	$	0
Pro forma revenue of real estate properties acquired		7,017		6,733
Net income (loss) allocable to common shares of real estate properties acquired, as reported		209		0
Pro forma net income (loss) allocable to common shares of real estate properties acquired		759		1,274
Earnings (loss) per share attributable to common shareholders of real estate properties acquired
Basic and diluted—as reported		0.00		0.00
Basic and diluted—as pro forma		0.01		0.02

We have not yet completed the process of estimating the fair value of assets acquired and liabilities assumed. Accordingly, our preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as we complete the process. In accordance with FASB ASC Topic 805, changes, if any, to the preliminary estimates and allocation will be reported in our financial statements retrospectively. During the three-month period ended March 31, 2014, we have not recorded any adjustments for prior period real estate acquisitions.

Subsequent to March 31, 2014, we acquired one office real estate property with a purchase price of $26,085, which consisted of the assumption of one commercial real estate loan. We are completing the process of estimating the fair value of the assets acquired.

Dispositions:

During the three-month period ended March 31, 2014, we disposed of one multi-family real estate property for a total sale price of $4,250. We recorded losses on the sale of this asset of $2,528, of which $321 is included in the accompanying consolidated statements of operations during the three-month period ended March 31, 2014.