(3) Co-investments

The Company has co-investments, which are accounted for under the equity method. The co-investments own, operate and develop apartment communities. The following table details the Company's co-investments (dollars in thousands):

	June 30,		December 31,
	2013		2012

Membership interest in Wesco I	$	142,704	$	143,874
Membership interest in Wesco III		37,917		9,941
Partnership interest in Fund II		23,945		53,601
Membership interest in a limited liability company that owns Expo		18,989		18,752
Total operating co-investments		223,555		226,168

Membership interests in limited liability companies that own and are developing Epic, Connolly Station, Mosso I & II and Elkhorn		229,095		186,362
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan		17,381		16,552
Membership interest in a limited liability company that owns and is developing One South Market		16,908		-
Total development co-investments		263,384		202,914

Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1%		93,273		91,843
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of 9.5%		15,493		14,438
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 13%		13,536		13,175
Preferred interest in related party limited liability company that owns an apartment development in Redwood City with a preferred return of 9.5%		9,018		-
Preferred interests in limited liability companies that own apartment communities in downtown Los Angeles with preferred returns of 9% and 10% repaid in 2013		-		22,807
Total preferred interest investments		131,320		142,263

Total co-investments	$	618,259	$	571,345

In January 2013, the Company invested $8.6 million as a preferred equity interest investment in an apartment development in Redwood City, California. The investment has a preferred return of 9.5% and matures in January 2016.

In March 2013, the Company received the redemption of $9.7 million of preferred equity related to two properties located in downtown Los Angeles. The Company recorded $0.4 million in redemption penalties due to the early redemption of these preferred equity investments.

In June 2013, the Company received the redemption of $13.1 million of preferred equity related to a property located in downtown Los Angeles. The Company recorded $0.5 million in redemption penalties due to the early redemption of these preferred equity investments.

The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands).

	June 30,		December 31,
	2013		2012
Balance sheets:
Rental properties and real estate under development	$	1,769,246	$	1,745,147
Other assets		65,238		168,061

Total assets	$	1,834,484	$	1,913,208

Debt	$	663,830	$	820,895
Other liabilities		147,356		91,922
Equity		1,023,298		1,000,391

Total liabilities and equity	$	1,834,484	$	1,913,208

Company's share of equity	$	618,259	$	571,345

`	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Statements of operations:
Property revenues	$	26,258		$	28,233		$	54,117		$	62,556
Property operating expenses		(9,874	)		(10,029	)		(19,702	)		(23,166	)
Net property operating income		16,384			18,204			34,415			39,390

Interest expense		(6,094	)		(7,792	)		(12,872	)		(16,337	)
General and administrative		(1,539	)		(920	)		(3,053	)		(1,716	)
Depreciation and amortization		(9,577	)		(8,876	)		(20,596	)		(22,772	)

Net (loss) income	$	(826	)	$	616		$	(2,106	)	$	(1,435	)

Company's share of net income	$	7,282		$	3,111		$	11,493		$	5,451