INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

9 Months Ended

Sep. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

3. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

At September 30, 2014, 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 September 30, 2014 and December 31, 2013, the Company’s investment in the 35% owned Apartment LLC totaled $4,095 and $4,056, respectively, excluding the credit investments discussed below. The Company’s investment in the 25% owned Apartment LLC at September 30, 2014 and December 31, 2013 reflects a credit investment of $16,654 and $16,687, 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:

Apartment LLCs - Balance Sheet Data	September 30, 2014			December 31, 2013
Real estate assets, net of accumulated depreciation of $47,748 and $43,649 at September 30, 2014 and December 31, 2013, respectively	$	208,009		$	209,132
Cash and other		6,296			4,978
Total assets	$	214,305		$	214,110
Mortgage notes payable	$	177,723		$	177,723
Other liabilities		3,483			2,673
Total liabilities		181,206			180,396
Members’ equity		33,099			33,714
Total liabilities and members’ equity	$	214,305		$	214,110
Company’s equity investment in Apartment LLCs (1)	$	(12,559	)	$	(12,631	)

(1) At September 30, 2014 and December 31, 2013, the Company’s equity investment includes its credit investments of $16,654 and $16,687, respectively, discussed above.

	Three months ended September 30,				Nine months ended September 30,
Apartment LLCs - Income Statement Data	2014		2013		2014		2013
Revenues
Rental	$	6,701	$	6,505	$	19,821	$	19,141
Other property revenues		481		475		1,410		1,435
Total revenues		7,182		6,980		21,231		20,576
Expenses
Property operating and maintenance		3,167		2,550		8,749		7,939
Depreciation and amortization		1,412		1,362		4,175		4,052
Interest		2,278		2,278		6,774		6,774
Total expenses		6,857		6,190		19,698		18,765
Net income	$	325	$	790	$	1,533	$	1,811
Company’s share of net income in Apartment LLCs	$	422	$	656	$	1,408	$	1,611

At September 30, 2014, 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.