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Joint Ventures | 12 Months Ended
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Dec. 31, 2015
Equity Method Investments and Joint Ventures [Abstract] |
JOINT VENTURES | JOINT VENTURES AND PARTNERSHIPS UDR has entered into joint ventures and partnerships with unrelated third parties to acquire real estate assets that are either consolidated and included in Real Estate Owned on the Consolidated Balance Sheets or are accounted for under the equity method of accounting, and are included in Investment in and Advances to Unconsolidated Joint Ventures, Net on the Consolidated Balance Sheets. The Company consolidates the entities that we control as well as any variable interest entity where we are the primary beneficiary. In addition, the Company consolidates any joint venture or partnership in which we are the general partner or managing partner and the third party does not have the ability to substantively participate in the decision-making process nor the ability to remove us as general partner or managing partner without cause. UDR’s joint ventures and partnerships are funded with a combination of debt and equity. Our losses are limited to our investment and except as noted below, the Company does not guarantee any debt, capital payout or other obligations associated with our joint ventures and partnerships. The Company recognizes earnings or losses from our investments in unconsolidated joint ventures and partnerships consisting of our proportionate share of the net earnings or losses of the joint ventures and partnerships. In addition, we may earn fees for providing management services to the unconsolidated joint ventures and partnerships. The following table summarizes the Company’s investment in and advances to unconsolidated joint ventures and partnerships, net, which are accounted for under the equity method of accounting as of December 31, 2015 and 2014 (dollars in thousands):
Joint Venture |  | Location of Properties |  | Number of Properties |  | Number of Apartment Homes |  | Investment at |  | UDR’s Ownership Interest
|  | December 31, 2015 |  | December 31, 2015 |  | December 31, 2015 |  | December 31, 2014 |  | December 31, 2015 |  | December 31, 2014
Operating and development: |  |  |  |  |  |  |  |  |  |  |  |  |  |
UDR/MetLife I |  | Various |  | 4 land parcels |  | — |  | $ | 15,894 |  |  | $ | 13,306 |  |  | 17.2 | % |  | 15.7 | %
UDR/MetLife II (a) |  | Various |  | 21 operating communities |  | 4,642 |  | 425,230 |  |  | 431,277 |  |  | 50.0 | % |  | 50.0 | %
Other UDR/MetLife Development Joint Ventures |  |  |  | 1 operating community; |  |  |  |  |  |  |  |  |  |
|  |  | 4 development communities (b); |  |  |  |  |  |  |  |  |  |
| Various |  | 1 land parcels |  | 1,437 |  | 171,659 |  |  | 134,939 |  |  | 50.6 | % |  | 50.6 | %
UDR/MetLife Vitruvian Park® |  | Addison, TX |  | 3 operating communities; |  |  |  |  |  |  |  |  |  |
|  | 6 land parcels |  | 1,130 |  | 73,469 |  |  | 80,302 |  |  | 50.0 | % |  | 50.0 | %
UDR/KFH |  | Washington, D.C. |  | 3 operating communities |  | 660 |  | 17,211 |  |  | 21,596 |  |  | 30.0 | % |  | 30.0 | %
Texas (c) |  | Texas |  | — |  |  | — |  | — |  |  | (25,901 | ) |  | — | % |  | 20.0 | %
Investment in and advances to unconsolidated joint ventures, net, before participating loan investment and preferred equity investment |  |  |  | 703,463 |  |  | 655,519 |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Investment at |  | Income from investments for the years ending December 31,
|  | Location |  | Rate |  | Years To Maturity |  | December 31, 2015 |  | December 31, 2014 |  | 2015 | 2014 | 2013
Participating loan investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Steele Creek |  | Denver, CO |  | 6.5% |  | 1.6 |  | 90,747 |  |  | 62,707 |  |  | $ | 5,453 |  | $ | 2,350 |  | $ | 156 |
Preferred equity investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |
West Coast Development Joint Venture (d) |  | Various |  | 6.5% |  | — |  | 144,696 |  |  | — |  |  | $ | 3,692 |  | $ | — |  | $ | — |
Total investment in and advances to unconsolidated joint ventures, net |  | $ | 938,906 |  |  | $ | 718,226 |  |  |  |  |  |  |
(a) | In September 2015, the 717 Olympic community, which is held by the UDR/MetLife II joint venture, experienced extensive water damage due a ruptured water pipe. For the year ended December 31, 2015, the Company recorded losses of $2.5 million, its proportionate share of the total losses incurred.
(b) The number of apartment homes for the communities under development presented in the table above is based on the projected number of total homes. As of December 31, 2015, no apartment homes had been completed in Other UDR/MetLife Development Joint Ventures.
(c) | In January 2015, the eight communities held by the Texas joint venture were sold, generating net proceeds to UDR of $44.2 million. The Company recorded promote and fee income of $10.0 million and a gain of $59.4 million (including $24.2 million of previously deferred gains) in connection with the sale.
(d) | In May 2015, the Company entered into a joint venture agreement with real estate private equity firm, The Wolff Company (“Wolff”), and agreed to pay $136.3 million for a 48 percent ownership interest in a portfolio of five communities that are currently under construction (the "West Coast Development Joint Venture"). The communities are located in three of the Company’s core, coastal markets: Metro Seattle, Los Angeles and Orange County, CA. UDR earns a 6.5 percent preferred return on its investment through each individual community’s date of stabilization, defined as when a community reaches 80 percent occupancy for ninety consecutive days, while Wolff is allocated all operating income and expense during the pre-stabilization period. Upon stabilization, income and expense will be shared based on each partner’s ownership percentage. The Company will serve as property manager and be paid a management fee during the lease-up phase and subsequent operation of each of the communities. Wolff is the general partner of the joint venture and the developer of the communities.
The Company has a fixed price option to acquire Wolff’s remaining interest in each community beginning one year after completion. If the options are exercised for all five communities, the Company’s total price will be $597.4 million. In the event the Company does not exercise its options to purchase at least two communities, Wolff will be entitled to earn a contingent disposition fee equal to 6.5 percent return on its implied equity in the communities not acquired. Wolff is providing certain guaranties and there are construction loans on all five communities. Once completed, the five communities will contain 1,533 homes. The Company has concluded it does not control the joint venture and accounts for it under the equity method of accounting. The Company's recorded equity investment in the West Coast Development Joint Venture at December 31, 2015 of $144.7 million is inclusive of outside basis costs and our accrued but unpaid preferred return. During the year ended December 31, 2015, the Company earned a preferred return of $5.2 million, offset by its share of the West Coast Development Joint Venture transaction expenses of $1.5 million. As of December 31, 2015 and 2014, the Company had deferred fees and deferred profit of $6.8 million and $24.7 million, respectively, which will be recognized through earnings over the weighted average life of the related properties, upon the disposition of the properties to a third party, or upon completion of certain development obligations. The Company recognized $11.3 million, $11.3 million, and $11.2 million of management fees during the years ended December 31, 2015, 2014, and 2013, respectively, for our management of the joint ventures and partnerships. The management fees are included in Joint venture management and other fees on the Consolidated Statements of Operations. The Company may, in the future, make additional capital contributions to certain of our joint ventures and partnerships should additional capital contributions be necessary to fund development, acquisitions or operations. We evaluate our investments in unconsolidated joint ventures and partnerships when events or changes in circumstances indicate that there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-temporary. The Company did not recognize any other-than-temporary decrease in the value of its other investments in unconsolidated joint ventures or partnerships during the years ended December 31, 2015, 2014, and 2013. Combined summary financial information relating to all of the unconsolidated joint ventures and partnerships operations (not just our proportionate share), is presented below for the years ended December 31, 2015, 2014, and 2013 (dollars in thousands):
As of and For the Year Ended December 31, 2015 |  | UDR/MetLife I |  | UDR/MetLife II |  | Other UDR/MetLife Development Joint Ventures |  | UDR/MetLife Vitruvian Park® |  | UDR/KFH |  | Texas |  | Total
Condensed Statements of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 541 |  |  | $ | 170,062 |  |  | $ | 7,634 |  |  | $ | 22,139 |  |  | $ | 19,338 |  |  | $ | — |  |  | $ | 219,714 |
Property operating expenses |  | (906 | ) |  | (63,516 | ) |  | (3,826 | ) |  | (11,519 | ) |  | (7,733 | ) |  | — |  |  | (87,500 | )
Real estate depreciation and amortization |  | (818 | ) |  | (46,616 | ) |  | (6,897 | ) |  | (6,639 | ) |  | (14,522 | ) |  | — |  |  | (75,492 | )
Operating income/(loss) |  | (1,183 | ) |  | 59,930 |  |  | (3,089 | ) |  | 3,981 |  |  | (2,917 | ) |  | — |  |  | 56,722 |
Interest expense |  | — |  |  | (52,037 | ) |  | (2,566 | ) |  | (4,848 | ) |  | (5,539 | ) |  | — |  |  | (64,990 | )
Income/(loss) from discontinued operations |  | (20 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | 184,138 |  |  | 184,118 |
Net income/(loss) |  | $ | (1,203 | ) |  | $ | 7,893 |  |  | $ | (5,655 | ) |  | $ | (867 | ) |  | $ | (8,456 | ) |  | $ | 184,138 |  |  | $ | 175,850 |
UDR recorded income (loss) from unconsolidated entities |  | $ | (513 | ) |  | $ | 3,578 |  |  | $ | 6,088 |  |  | $ | (3,711 | ) |  | $ | (2,537 | ) |  | $ | 59,424 |  |  | $ | 62,329 |
Condensed Balance Sheets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total real estate, net |  | $ | 92,915 |  |  | $ | 1,942,630 |  |  | $ | 604,611 |  |  | $ | 273,897 |  |  | $ | 221,704 |  |  | $ | — |  |  | $ | 3,135,757 |
Cash and cash equivalents |  | 1,202 |  |  | 20,767 |  |  | 5,996 |  |  | 7,185 |  |  | 1,320 |  |  | 10 |  |  | 36,480 |
Other assets |  | 174 |  |  | 24,914 |  |  | 1,921 |  |  | 2,317 |  |  | 565 |  |  | — |  |  | 29,891 |
Total assets |  | 94,291 |  |  | 1,988,311 |  |  | 612,528 |  |  | 283,399 |  |  | 223,589 |  |  | 10 |  |  | 3,202,128 |
Amount due to/(from) UDR |  | 2 |  |  | — |  |  | 5,929 |  |  | 908 |  |  | 427 |  |  | — |  |  | 7,266 |
Third party debt |  | — |  |  | 1,122,662 |  |  | 201,114 |  |  | 126,388 |  |  | 164,299 |  |  | — |  |  | 1,614,463 |
Accounts payable and accrued liabilities |  | 395 |  |  | 24,244 |  |  | 62,267 |  |  | 7,137 |  |  | 1,480 |  |  | — |  |  | 95,523 |
Total liabilities |  | 397 |  |  | 1,146,906 |  |  | 269,310 |  |  | 134,433 |  |  | 166,206 |  |  | — |  |  | 1,717,252 |
Total equity |  | $ | 93,894 |  |  | $ | 841,405 |  |  | $ | 343,218 |  |  | $ | 148,966 |  |  | $ | 57,383 |  |  | $ | 10 |  |  | $ | 1,484,876 |
UDR’s investment in and advances to unconsolidated joint ventures |  | $ | 15,894 |  |  | $ | 425,230 |  |  | $ | 407,102 |  |  | $ | 73,469 |  |  | $ | 17,211 |  |  | $ | — |  |  | $ | 938,906 |
As of and For the Year Ended December 31, 2014 |  | UDR/MetLife I |  | UDR/MetLife II |  | Other UDR/MetLife Development Joint Ventures |  | UDR/MetLife Vitruvian Park® |  | UDR/KFH |  | Texas |  | Total
Condensed Statements of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 727 |  |  | $ | 152,047 |  |  | $ | 1,579 |  |  | $ | 19,376 |  |  | $ | 19,724 |  |  | $ | — |  |  | $ | 193,453 |
Property operating expenses |  | 618 |  |  | 52,150 |  |  | 1,122 |  |  | 10,711 |  |  | 7,498 |  |  | — |  |  | 72,099 |
Real estate depreciation and amortization |  | 2,130 |  |  | 41,504 |  |  | 3,959 |  |  | 7,380 |  |  | 14,426 |  |  | — |  |  | 69,399 |
Operating income/(loss) |  | (2,021 | ) |  | 58,393 |  |  | (3,502 | ) |  | 1,285 |  |  | (2,200 | ) |  | — |  |  | 51,955 |
Interest expense |  | — |  |  | (48,493 | ) |  | (94 | ) |  | (4,131 | ) |  | (5,873 | ) |  | — |  |  | (58,591 | )
Income/(loss) from discontinued operations |  | (31,802 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,229 | ) |  | (36,031 | )
Net income/(loss) |  | $ | (33,823 | ) |  | $ | 9,900 |  |  | $ | (3,596 | ) |  | $ | (2,846 | ) |  | $ | (8,073 | ) |  | $ | (4,229 | ) |  | $ | (42,667 | )
UDR recorded income/(loss) from unconsolidated entities |  | $ | (2,955 | ) |  | $ | 2,814 |  |  | $ | 576 |  |  | $ | (4,068 | ) |  | $ | (2,601 | ) |  | $ | (772 | ) |  | $ | (7,006 | )
Condensed Balance Sheets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total real estate, net |  | $ | 89,482 |  |  | $ | 1,986,237 |  |  | $ | 351,861 |  |  | $ | 278,600 |  |  | $ | 235,623 |  |  | $ | — |  |  | $ | 2,941,803 |
Assets held for sale |  | 1,978 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 214,218 |  |  | 216,196 |
Cash and cash equivalents |  | 1,983 |  |  | 15,245 |  |  | 6,239 |  |  | 6,570 |  |  | 2,507 |  |  | — |  |  | 32,544 |
Other assets (a) |  | (146 | ) |  | 12,938 |  |  | 1,101 |  |  | 3,248 |  |  | 708 |  |  | — |  |  | 17,849 |
Total assets (a) |  | 93,297 |  |  | 2,014,420 |  |  | 359,201 |  |  | 288,418 |  |  | 238,838 |  |  | 214,218 |  |  | 3,208,392 |
Amount due to/(from) UDR |  | 107 |  |  | (444 | ) |  | 843 |  |  | 1,960 |  |  | 531 |  |  | — |  |  | 2,997 |
Third party debt (a) |  | — |  |  | 1,140,458 |  |  | 65,408 |  |  | 122,964 |  |  | 164,789 |  |  | — |  |  | 1,493,619 |
Liabilities held for sale |  | 5,110 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 224,596 |  |  | 229,706 |
Accounts payable and accrued liabilities (a) |  | 749 |  |  | 17,573 |  |  | 17,851 |  |  | 6,766 |  |  | 1,396 |  |  | — |  |  | 44,335 |
Total liabilities (a) |  | 5,966 |  |  | 1,157,587 |  |  | 84,102 |  |  | 131,690 |  |  | 166,716 |  |  | 224,596 |  |  | 1,770,657 |
Total equity |  | $ | 87,331 |  |  | $ | 856,833 |  |  | $ | 275,099 |  |  | $ | 156,728 |  |  | $ | 72,122 |  |  | $ | (10,378 | ) |  | $ | 1,437,735 |
UDR’s investment in and advances to unconsolidated joint ventures |  | $ | 13,306 |  |  | $ | 431,277 |  |  | $ | 197,646 |  |  | $ | 80,302 |  |  | $ | 21,596 |  |  | $ | (25,901 | ) |  | $ | 718,226 |
(a) The Company elected to early adopt FASB ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, during the fourth quarter of 2015. See Note 2, Significant Accounting Policies, for a complete description of the ASUs and their impact. Under the ASUs, deferred financing costs related to debt are treated as offsets to the debt instead of assets. As a result of adopting the ASUs, the following retrospective changes were made to the above table:
For the Year Ended December 31, 2014 | UDR/MetLife I |  | UDR/MetLife II |  | Other UDR/MetLife Development Joint Ventures |  | UDR/MetLife Vitruvian Park® |  | UDR/KFH |  | Texas |  | Total
Other assets - as previously reported | $ | (146 | ) |  | $ | 19,589 |  |  | $ | 4,203 |  |  | $ | 3,933 |  |  | $ | 1,128 |  |  | $ | — |  |  | $ | 28,707 |
Deferred financing costs | — |  |  | (6,651 | ) |  | (3,102 | ) |  | (685 | ) |  | (420 | ) |  | — |  |  | (10,858 | )
Other assets - as presented above | $ | (146 | ) |  | $ | 12,938 |  |  | $ | 1,101 |  |  | $ | 3,248 |  |  | $ | 708 |  |  | $ | — |  |  | $ | 17,849 |
Total assets - as previously reported | $ | 93,297 |  |  | $ | 2,021,071 |  |  | $ | 362,303 |  |  | $ | 289,103 |  |  | $ | 239,258 |  |  | $ | 214,218 |  |  | $ | 3,219,250 |
Deferred financing costs | — |  |  | (6,651 | ) |  | (3,102 | ) |  | (685 | ) |  | (420 | ) |  | — |  |  | (10,858 | )
Total assets - as presented above | $ | 93,297 |  |  | $ | 2,014,420 |  |  | $ | 359,201 |  |  | $ | 288,418 |  |  | $ | 238,838 |  |  | $ | 214,218 |  |  | $ | 3,208,392 |
Third party debt - as previously reported | $ | — |  |  | $ | 1,147,109 |  |  | $ | 68,510 |  |  | $ | 123,649 |  |  | $ | 165,209 |  |  | $ | — |  |  | $ | 1,504,477 |
Deferred financing costs | — |  |  | (6,651 | ) |  | (3,102 | ) |  | (685 | ) |  | (420 | ) |  | — |  |  | (10,858 | )
Third party debt - as presented above | $ | — |  |  | $ | 1,140,458 |  |  | $ | 65,408 |  |  | $ | 122,964 |  |  | $ | 164,789 |  |  | $ | — |  |  | $ | 1,493,619 |
Accounts payable and accrued liabilities - as previously reported | $ | 749 |  |  | $ | 17,573 |  |  | $ | 17,851 |  |  | $ | 6,766 |  |  | $ | 1,396 |  |  | $ | — |  |  | $ | 44,335 |
Deferred financing costs | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Accounts payable and accrued liabilities - as presented above | $ | 749 |  |  | $ | 17,573 |  |  | $ | 17,851 |  |  | $ | 6,766 |  |  | $ | 1,396 |  |  | $ | — |  |  | $ | 44,335 |
Total liabilities - as previously reported | $ | 5,966 |  |  | $ | 1,164,238 |  |  | $ | 87,204 |  |  | $ | 132,375 |  |  | $ | 167,136 |  |  | $ | 224,596 |  |  | $ | 1,781,515 |
Deferred financing costs | — |  |  | (6,651 | ) |  | (3,102 | ) |  | (685 | ) |  | (420 | ) |  | — |  |  | (10,858 | )
Total liabilities - as presented above | $ | 5,966 |  |  | $ | 1,157,587 |  |  | $ | 84,102 |  |  | $ | 131,690 |  |  | $ | 166,716 |  |  | $ | 224,596 |  |  | $ | 1,770,657 |
For the Year Ended December 31, 2013 |  | UDR/MetLife I |  | UDR/MetLife II |  | Other UDR/MetLife Development Joint Ventures |  | UDR/MetLife Vitruvian Park® |  | UDR/KFH |  | Texas |  | Total
Condensed Statements of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total revenues |  | $ | 691 |  |  | $ | 109,926 |  |  | $ | 5,324 |  |  | $ | 7,680 |  |  | $ | 19,221 |  |  | $ | — |  |  | $ | 142,842 |
Property operating expenses |  | 621 |  |  | 33,809 |  |  | 3,292 |  |  | 4,633 |  |  | 7,035 |  |  | — |  |  | 49,390 |
Real estate depreciation and amortization |  | 115 |  |  | 30,122 |  |  | 3,564 |  |  | 3,830 |  |  | 14,199 |  |  | — |  |  | 51,830 |
Operating income/(loss) |  | (45 | ) |  | 45,995 |  |  | (1,532 | ) |  | (783 | ) |  | (2,013 | ) |  | — |  |  | 41,622 |
Interest expense |  | — |  |  | (37,055 | ) |  | (913 | ) |  | (1,886 | ) |  | (5,872 | ) |  | — |  |  | (45,726 | )
Other income/(expense) |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |
Income/(loss) from discontinued operations |  | (22,388 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (9,584 | ) |  | (31,972 | )
Net income/(loss) |  | $ | (22,433 | ) |  | $ | 8,941 |  |  | $ | (2,445 | ) |  | $ | (2,669 | ) |  | $ | (7,885 | ) |  | $ | (9,584 | ) |  | $ | (36,075 | )
UDR recorded income/(loss) from unconsolidated entities |  | $ | (4,675 | ) |  | $ | 4,471 |  |  | $ | 6,224 |  |  | $ | (2,851 | ) |  | $ | (2,366 | ) |  | $ | (1,218 | ) |  | $ | (415 | )

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32847-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=35687916&loc=d3e32787-111569 + Details
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