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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 11. Commitments and Contingencies Construction Contracts. As of June 30, 2020, we estimate the total additional cost to complete the six consolidated projects currently under construction to be approximately $184.7 million. We expect to fund this amount through a combination of one or more of the following: cash and cash equivalents, cash flows generated from operations, draws on our unsecured credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM program, and other unsecured borrowings or secured mortgages. Other Commitments and Contingencies. In the ordinary course of our business we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract. At June 30, 2020, we had approximately $0.6 million in refundable earnest money for potential acquisitions of real property in our condensed consolidated balance sheets. Lease Commitments. Substantially all of our lessee operating leases recorded in our condensed consolidated balance sheets are related to office facility leases. Rental expense totaled approximately $1.0 million and $1.1 million for the three months ended June 30, 2020 and 2019, respectively, and approximately $2.1 million and $2.2 million for the six months ended June 30, 2020 and 2019, respectively. We had no significant changes to our lessee lease commitments for the six months ended June 30, 2020. The following is a summary of our maturities of our lease liabilities as of June 30, 2020:
(in millions) |
Year ended December 31, | Operating Leases |
Remainder of 2020 | $ | 1.7 |
2021 | 3.2 |
2022 | 2.9 |
2023 | 2.7 |
2024 | 2.8 |
Thereafter | 2.2 |
Less: discount for time value | (1.8 | )
Lease liability as of June 30, 2020 | $ | 13.7 |
Investments in Joint Ventures. We have entered into, and may continue in the future to enter into joint ventures, including partnerships and limited liability companies, through which we own an indirect economic interest in less than 100% of the community or land owned directly by the joint venture. Our decision whether to hold the entire interest in an apartment community or land ourselves, or to have an indirect interest in the community or land through a joint venture, is based on a variety of factors and considerations, including: (i) our projection, in some circumstances, that we will achieve higher returns on our invested capital or reduce our risk if a joint venture vehicle is used; (ii) our desire to diversify our portfolio of investments by market; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) the economic and tax terms required by a seller of land or of a community, who may prefer or who may require less payment if the land or community is contributed to a joint venture. Investments in joint ventures are not limited to a specified percentage of our assets. Each joint venture agreement is individually negotiated, and our ability to operate or dispose of land or of a community in our sole discretion may be limited to varying degrees in our existing joint venture agreements and may be limited to varying degrees depending on the terms of future joint venture agreements.

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