3.	INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Apartment LLCs

At December 31, 2011, the Company held investments in various individual limited liability companies (the "Apartment LLCs") with institutional investors that own five apartment communities, including four communities located in Atlanta, Georgia and one community located in Washington, D.C. The Company has a 25% to 35% equity interest in these Apartment LLCs.

The Company accounts for its investments in the Apartment LLCs using the equity method of accounting. At December 31, 2011 and 2010, the Company's investment in the 35% owned Apartment LLCs totaled $7,344 and $7,671, respectively, excluding the credit investments discussed below. The excess of the Company's investment over its equity in the underlying net assets of these Apartment LLCs was approximately $4,617 at December 31, 2011. The excess investment related to these Apartment LLCs is being amortized as a reduction to earnings on a straight-line basis over the lives of the related assets. The Company's investment in the 25% owned Apartment LLCs at December 31, 2011 and 2010 reflects a credit investment of $15,945 and $15,384, respectively. These credit balances resulted from distribution of financing proceeds in excess of the Company's historical cost upon the formation of the Apartment LLCs and are reflected in consolidated liabilities on the Company's consolidated balance sheet. The operating results of the Company include its allocable share of net income from the investments in the Apartment LLCs. The Company provides property and asset management services to the Apartment LLCs for which it earns fees.

A summary of financial information for the Apartment LLCs in the aggregate is as follows:


	December 31,
Apartment LLCs - Balance Sheet Data	2011			2010
Real estate assets, net of accumulated depreciation of $32,780 and $26,987 at December 31, 2011 and 2010, respectively	$	217,443		$	221,343
Assets held for sale, net		28,846			29,308
Cash and other		6,526			6,518

Total assets	$	252,815		$	257,169

Mortgage notes payable	$	206,495		$	206,495
Other liabilities		2,737			2,460

Total liabilities		209,232			208,955
Members' equity		43,583			48,214

Total liabilities and members' equity	$	252,815		$	257,169

Company's equity investment in Apartment LLCs (1)	$	(8,601	)	$	(7,713	)

(1)	At December 31, 2011 and 2010, the Company's equity investment includes its credit investments of $15,945 and $15,384, respectively, discussed above.


	Year ended December 31,
Apartment LLCs - Income Statement Data	2011			2010			2009
Revenues
Rental	$	23,504		$	22,444		$	22,436
Other property revenues		1,823			1,718			1,686

Total revenues		25,327			24,162			24,122

Expenses
Property operating and maintenance		9,896			9,945			9,827
Depreciation and amortization		5,934			5,836			5,722
Interest		10,247			10,247			10,247

Total expenses		26,077			26,028			25,796

Net loss from continuing operations		(750	)		(1,866	)		(1,674	)
Loss from discontinued operations		(151	)		(254	)		(333	)

Net loss	$	(901	)	$	(2,120	)	$	(2,007	)

Company's share of net income in Apartment LLCs	$	1,001		$	635		$	532

At December 31, 2011, mortgage notes payable included five mortgage notes. The first $50,500 mortgage note bears interest at 5.82%, requires monthly interest only payments and matures in 2013. In January 2012, this mortgage note was refinanced with a $51,000 mortgage note that bears interest at 3.50%, requires interest only payments and matures in 2019. The second mortgage note payable totals $29,272, bears interest at 5.83%, requires monthly interest only payments and matures in 2013. The note is currently prepayable without penalty, and is secured by an apartment community which is currently held for sale. The third and fourth mortgage notes total $85,724, bear interest at 5.63%, require interest only payments and mature in 2017. The fifth mortgage note totals $41,000, bears interest at 5.71%, requires interest only payments, and matures in January 2018 with a one-year automatic extension at a variable interest rate.

In accordance with the special sale rights provisions of the applicable Apartment LLC operating agreement, the 35% owned Apartment LLC that owns an apartment community in Atlanta, Georgia initiated a marketing process in the fourth quarter of 2011 that could result in the sale of the community. As a result, the apartment community was classified as held for sale at December 31, 2011 in the financial data listed above. There can be no assurance that the process will result in the sale of the community.

Condominium LLCs

In periods prior to September 2010, the Company and its partner held an approximate pro-rata 49% interest in a limited partnership (the "Mixed-Use LP") that was constructing a mixed-use development, consisting of the Atlanta Condominium Project and Class A office space, sponsored by two additional independent investors. Prior to September 2010, the Company accounted for its investment in the Mixed-Use LP using the equity method of accounting.

In 2009, the Company recognized equity in losses from the Mixed-Use LP resulting from the recognition of aggregate non-cash impairment losses totaling $74,733, or $68,219 net of the noncontrolling interest, relating to the write-off of the Company's investment in the Mixed-Use LP as well as the recognition of the Company's maximum potential limited recourse obligations under related construction loan guarantees and a licensing and branding arrangement. The impairment charge to write-down the asset in the Mixed-Use LP to its estimated fair value resulted from a determination that the estimated undiscounted cash flows related to the condominium asset under construction were not sufficient to recover the carrying value of the asset. The impairment charge was reflective of deteriorating market conditions for luxury condominiums in the Atlanta market, including weakening economic conditions, price discounting for competitive products and more restrictive mortgage lending conditions in 2009. In addition, the Company recognized additional equity losses of $246 in 2009.

In September 2010, the Atlanta Condominium Project and associated liabilities (including construction indebtedness) were conveyed to a majority owned subsidiary of the Company in full redemption of the subsidiary's equity investment in the Mixed-Use LP. The net condominium assets and associated construction indebtedness were distributed at their fair values. As part of the transaction, a separate wholly owned subsidiary of the Company acquired the lenders' interest in the construction indebtedness of the Atlanta Condominium Project and a related land entity (which owned related land and infrastructure that was previously impaired in 2009) for aggregate consideration of $49,793, effectively extinguishing the indebtedness. As a result of this distribution, equity in income of unconsolidated real estate entities includes a gain of $23,596, net of transaction expenses and income taxes, related to the construction indebtedness, partially offset by an impairment loss of $5,492 related to the condominium assets. The Company also recognized a debt extinguishment gain of $2,845 on the related debt retirement associated with the related land entity. Subsequent to the purchase of the construction indebtedness, and in exchange for the release of the guarantors of the indebtedness, the Company acquired the remaining noncontrolling interest in the majority owned subsidiary that owned the community and the related land entity. As a result of these transactions, the Company wholly owned and consolidated the Atlanta Condominium Project for financial reporting purposes as of September 2010.

As part of the conveyance of the condominium assets and liabilities to the Company in 2010, the Company also modified its licensing and branding arrangement with the third party licensor for the Atlanta Condominium Project. This modified arrangement provides for the payment of a licensing fee based on a percentage of actual sales prices for condominium units sold through September 2013 (previously September 2012), at which point, subject to a potential further extension, the remaining fee is payable as a lump sum calculated on all unsold units at a minimum assumed sales price. The licensing fee is expected to be paid from the proceeds of condominium sales of the Atlanta Condominium Project. In exchange for the extension of the outside payment date and the removal of a transfer fee that would have been payable upon the resale of every condominium unit, the Company increased its guaranty to 100% from 50% of the payment of the licensing fee, and guaranteed any unfunded condominium assessments on Company-owned units. As a result, the contractual obligation related to the licensing fee arrangement was recorded as an other asset and an accrued liability at its estimated fair value (see note 14).

A summary of results of operations for the Mixed-Use LP through September 2010 was as follows:


	Period ended September 24, 2010		Year ended December 31, 2009
Mixed-Use LP - Income Statement Data	Period ended September 24, 2010		Year ended December 31, 2009
Rental and other revenues	$	90	$	-

Expenses
Property operating and maintenance		402		653
Depreciation and amortization		1,071		-
Interest		175		-
Impairment charges		-		71,679

Total expenses		1,648		72,332

Gain on distribution of assets / liabilities at fair value		20,049		-

Net income (loss)	$	18,491	$	(72,332	)

Company's share of net income (loss) in Mixed-Use LP	$	18,104	$	(74,979	)