Real Estate and Tangible Water Assets, Net

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

Real Estate and Tangible Water Assets, Net

REAL ESTATE AND TANGIBLE WATER ASSETS, NET

The cost assigned to the various components of real estate and tangible water assets is as follows (in thousands):

	December 31,
	2014		2013
Real estate and improvements held and used, net of accumulated amortization of $10.9 million in 2014 and $10 million in 2013	$	16,463	$	14,790
Residential real estate and home construction inventories	322,938		177,314
Other real estate inventories completed or under development	10,308		16,402
Tangible water assets	42,530		45,702
Total real estate and tangible water assets	$	392,239	$	254,208

Amortization of real estate improvements was approximately $879,000 in each of the three years ended December 31, 2014.

Impairment Losses during 2014:

In November 2014, certain water rights applications were denied by the New Mexico State Engineer and as a result, the Company recorded an impairment loss of $3.5 million by writing down the project’s capitalized costs to zero. The loss was reported in the consolidated statement of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the water resource and water storage operations segment.

During 2014, the Company decided to sell a property “as-is” as opposed to performing development activities as originally planned and has therefore written down the carrying value of the asset to the estimated fair value. The Company has reduced the carrying value of the real estate balance to $1.4 million by recording an impairment loss of $2.9 million. The loss was reported in the consolidated statement of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate operations segment. The real estate is not part of UCP’s results of operations, nor is it included in UCP’s inventory of lots.

Impairment Losses during 2013:

The Company recorded an impairment loss of $417,000 during 2013 after receiving an unsolicited offer from a third-party and obtaining an appraisal of the property that were both lower than the recorded cost. The property is located near Fresno, California, and was purchased by the Company prior to its acquisition of UCP. Consequently, the real estate is not part of UCP’s results of operations, nor is it included in UCP’s inventory of lots. The loss was reported in the consolidated statement of operations and comprehensive income or loss within impairment loss on real estate and water assets and was included in the results of operations of the real estate operations segment.