3. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

At June 30, 2013, the Company held investments in two individual limited liability companies (the “Apartment LLCs”) with institutional investors that own four apartment communities, including three communities located in Atlanta, Georgia and one community located in Washington, D.C. The Company has a 25% and 35% equity interest in these Apartment LLCs.

The Company accounts for its investments in the Apartment LLCs using the equity method of accounting. At June 30, 2013 and December 31, 2012, the Company’s investment in the 35% owned Apartment LLC totaled $4,458 and $4,533, 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 $2,784 at June 30, 2013. 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 LLC at June 30, 2013 and December 31, 2012 reflects a credit investment of $16,518 and $16,297, respectively. These credit balances resulted from distribution of financing proceeds in excess of the Company’s historical cost upon the formation of the Apartment LLC 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:


	June 30,			December 31,
Apartment LLCs - Balance Sheet Data	2013			2012
Real estate assets, net of accumulated depreciation of $40,971 and $38,332 at June 30, 2013 and December 31, 2012, respectively	$	210,948		$	212,877
Cash and other		6,589			5,103

Total assets	$	217,537		$	217,980

Mortgage notes payable	$	177,723		$	177,723
Other liabilities		3,743			2,588

Total liabilities		181,466			180,311
Members’ equity		36,071			37,669

Total liabilities and members’ equity	$	217,537		$	217,980

Company’s equity investment in Apartment LLCs (1)	$	(12,060	)	$	(11,764	)

(1)	At June 30, 2013 and December 31, 2012, the Company’s equity investment includes its credit investments of $16,518 and $16,297, respectively, discussed above.


	Three months ended				Six months ended
	June 30,				June 30,
Apartment LLCs - Income Statement Data	2013		2012		2013		2012
Revenues
Rental	$	6,350	$	6,152	$	12,635	$	12,194
Other property revenues		515		501		961		937

Total revenues		6,865		6,653		13,596		13,131

Expenses
Property operating and maintenance		2,738		2,555		5,389		5,082
Depreciation and amortization		1,350		1,428		2,690		3,033
Interest		2,258		2,258		4,496		4,625

Total expenses		6,346		6,241		12,575		12,740

Net loss from continuing operations		519		412		1,021		391
Gain from discontinued operations		—		—		—		21,607

Net income	$	519	$	412	$	1,021	$	21,998

Company’s share of net income in Apartment LLCs	$	477	$	495	$	955	$	6,941

In February 2012, a 35% owned Apartment LLC sold an apartment community located in Atlanta, Georgia. The net cash proceeds from the sale of approximately $50,500 were used to retire the Apartment LLC’s outstanding mortgage note payable of $29,272 and to make distributions to its members. The results of operations and the gain on sale of the apartment community from this Apartment LLC are included in discontinued operations in 2012. The Company’s equity in income of unconsolidated entities for the six months ended June 30, 2012 includes a net gain of $6,055 resulting from this transaction.

At June 30, 2013, mortgage notes payable included four mortgage notes. The first $51,000 mortgage note bears interest at 3.50%, requires monthly interest only payments and matures in 2019. The second and third mortgage notes total $85,724, bear interest at 5.63%, require interest only payments and mature in 2017. The fourth 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.