REAL ESTATE OWNED

Real estate assets owned by the Company consist of income producing operating properties, properties under development, land held for future development, and sold or held for sale properties. As of December 31, 2015, the Company owned and consolidated 133 communities in 10 states plus the District of Columbia totaling 40,728 apartment homes. The following table summarizes the carrying amounts for our real estate owned (at cost) as of December 31, 2015 and 2014 (dollars in thousands):



	December 31, 2015			December 31, 2014
Land	$	1,833,156		$	1,790,281
Depreciable property — held and used:
Land improvements	173,821			189,940
Building, improvements, and furniture, fixtures and equipment	7,046,622			6,225,406
Under development:
Land	78,085			24,584
Building, improvements, and furniture, fixtures and equipment	45,987			153,048
Real estate held for disposition:
Land	9,963			—
Building, improvements, and furniture, fixtures and equipment	2,642			—
Real estate owned	9,190,276			8,383,259
Accumulated depreciation	(2,646,874		)	(2,434,772		)
Real estate owned, net	$	6,543,402		$	5,948,487

Acquisitions

In October 2015, the Company completed the acquisition of six Washington, D.C. area properties from Home Properties, L.P., a New York limited partnership (“Home OP”), for a total contractual purchase price of $900.6 million, which was comprised of $564.8 million of newly issued units of limited partnership interest (“DownREIT Units”) in the newly formed DownREIT Partnership issued at $35 per unit (a total of 16.1 million units), the assumption of $89.3 million of debt, $221.0 million of reverse tax-deferred like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986 (“Section 1031 exchanges”), and $25.5 million of cash. In addition, the Company issued approximately 14.0 million shares of its Series F Preferred Stock to former limited partners of Home OP, which had the right to subscribe for one share of Series F Preferred Stock for each DownREIT Unit issued in connection with the acquisitions.

The Company holds a 50.1% controlling ownership interest in, and consolidates, the DownREIT Partnership. See Note 11, Noncontrolling Interests, for additional information regarding the DownREIT Partnership formation and the Company’s controlling rights in the partnership.

Of the six properties acquired from Home OP, four were acquired through the DownREIT Partnership, one was acquired by the Company through a reverse Section 1031 exchange and one was acquired by the Operating Partnership through a reverse Section 1031 exchange, as reflected in the following table:



Property		Location
Eleven55 Ripley^(a)		Silver Spring, MD
Arbor Park of Alexandria^(a)		Alexandria, VA
Newport Village^(a)		Alexandria, VA
The Courts at Dulles^(a)		Herndon, VA
1200 East West^(b)		Silver Spring, MD
Courts at Huntington Station^(c)		Alexandria, VA

(a) Acquired through the DownREIT Partnership.
(b) Acquired by the Company through a reverse Section 1031 exchange.
(c) Acquired by the Operating Partnership through a reverse Section 1031 exchange.

The Company has performed a valuation analysis of the fair market value of the assets and liabilities of the properties acquired from Home OP. The following table summarizes the allocation of the purchase price as of the acquisition date (in thousands):



Assets:
Land	$	173,924
Buildings	708,455
Intangible assets	25,455
Total assets	907,834
Liabilities:
Secured debt	(96,486		)
Below-market in-place leases	(542		)
Total liabilities	(97,028		)
Total assets acquired less liabilities assumed	$	810,806

Substantially all acquired intangible assets will be amortized in 2016 based on the average term of acquired leases of 14 months or less.

The Company’s results of operations include operating revenues of $15.6 million and net loss from continuing operations of $9.2 million related to the six Washington, D.C. area properties acquired from Home OP from the acquisition date to December 31, 2015.

The unaudited pro forma information below summarizes the Company’s combined results of operations for the years ended December 31, 2015 and 2014 as though the above acquisition was completed on January 1, 2014. The information for the year ended December 31, 2015 includes pro forma results for the portion of the period prior to the acquisition date and actual results from the date of acquisition through the end of the period. The supplemental pro forma operating data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor does it purport to represent the Company’s results of operations for future periods (in thousands):



	Year Ended December 31,
	2015		2014
Pro forma revenues	$	943,421	$	877,287
Pro forma net income/(loss) attributable to common stockholders	$	319,385	$	105,875

In February 2015, the Company acquired an office building in Highlands Ranch, Colorado, for total consideration of approximately $24.0 million, which was comprised of assumed debt. The Company’s corporate offices, as well as other leased office space, are located in the acquired building. The building consists of approximately 120,000 square feet. All existing leases were assumed by the Company at the time of the acquisition.

In 2014, the Company acquired a fully-entitled land parcel for future development located in Huntington Beach, California for $77.8 million, two communities, located in Seattle, Washington and Kirkland, Washington, with a total of 358 apartment homes for $45.5 million and $75.2 million, respectively, and a land parcel for future development located in Boston, Massachusetts for $32.2 million. The four acquisitions during the year ended December 31, 2014 were accomplished through tax-deferred Section 1031 exchanges.

The Company incurred $2.1 million, $0.4 million and $0.1 million of acquisition-related costs during the years ended December 31, 2015, 2014, and 2013, respectively. These expenses are reported within the line item General and Administrative on the Consolidated Statements of Operations.

Dispositions

During the year ended December 31, 2015, the Company sold 12 communities with a total of 2,735 apartment homes for gross proceeds of $408.7 million, resulting in net proceeds of $387.7 million and a total gain of $251.7 million. A portion of the sale proceeds was designated for tax-deferred Section 1031 exchanges for a 2014 acquisition and the October 2015 acquisitions.

During the year ended December 31, 2014, the Company sold nine communities consisting of a total of 2,500 apartment homes, an adjacent parcel of land, and one operating property for gross proceeds of $328.4 million, resulting in net proceeds of $324.4 million and a total gain, net of tax, of $138.6 million. A portion of the sale proceeds was designated for tax-deferred Section 1031 exchanges that was used to fund acquisitions of real estate as discussed above.

In December 2014, the Company sold a 49% interest in 13th and Market and a 50% interest in 3033 Wilshire to MetLife for approximately $54.2 million and $8.3 million, respectively, and recognized, net of tax, a gain of $7.2 million and a loss of $2.2 million, respectively. Subsequent to the sale, the two communities 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. See further discussion of this transaction in Note 5, Joint Ventures and Partnerships. The activity of the two communities prior to sale is classified as a component of continuing operations on the Consolidated Statements of Operations.

In February 2016, the Company sold a parcel of land located in Santa Monica, California for net proceeds of approximately $9.6 million and a net gain of approximately $2.1 million.

In December 2015, the Company received a nonrefundable deposit on the pending sale of a parcel of land located in Santa Monica, California. The asset is included in Real estate held for disposition on the Consolidated Balance Sheets as of December 31, 2015. The sale is expected to close in March 2016 at a gross sales price of $13.5 million.