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Investments in Real Estate
 9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Investments in Real Estate

NOTE 3:    Investments in Real Estate

As of September 30, 2013, our investments in real estate consisted of nine apartment properties with 2,358 units. The table below summarizes our investments in real estate as of September 30, 2013 and December 31, 2012:

 

     As of
September 30,
2013		     As of
December 31,
2012		  

Land

    $ 32,624      $ 30,168   

Building

      131,215        121,390   

Furniture, fixtures and equipment

      2,826        2,007   
  

 

 

    

 

 

  

Total investment in real estate

      166,665        153,565   

Accumulated depreciation

      (14,805 )      (12,283 ) 
  

 

 

    

 

 

  

Investments in real estate, net

    $ 151,860      $ 141,282   
  

 

 

    

 

 

  

On October 11, 2012, we acquired a fee simple interest in a 192-unit multifamily residential community located in Indianapolis, Indiana, known as Runaway Bay Apartments. We acquired the property through a wholly owned subsidiary of our operating partnership, from an unaffiliated third party. We acquired the property for an aggregate purchase price of $15,750 exclusive of closing costs. We paid the purchase price with a combination of a $10,238 first mortgage loan and $5,512 in cash.

On September 19, 2013, we acquired a fee simple interest in a 354-unit multifamily residential community located in Indianapolis, Indiana, known as Berkshire Square Apartments. We acquired the property through a wholly owned subsidiary of our operating partnership, from an unaffiliated third party. We acquired the property for an aggregate purchase price of $13,250 exclusive of closing costs.

The following table summarizes the aggregate carrying value of the assets and liabilities associated with the properties acquired during the year ended December 31, 2012 and the three-month period ended September 30, 2013, on the respective date of each acquisition, for the real estate accounted for under FASB ASC Topic 805.

 

Description

    Carrying Amount
of Assets Acquired
During the
Year Ended
December 31,
2012		     Carrying Amount
of Assets Acquired
During the three-
months Ended
September 30,
2013		  

Assets acquired:

     

Investments in real estate

    $ 15,397      $ 12,281   

Intangible asset

      353        969   

Liabilities assumed:

     

Mortgage indebtedness

      (10,238 )      —   
  

 

 

    

 

 

  

Carrying amount of net assets acquired

    $ 5,512      $ 13,250   
  

 

 

    

 

 

  

 

Our consolidated unaudited pro forma information, after including the acquisition of real estate properties, is presented below as if the acquisitions occurred on January 1, 2012. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods:

 

Description

    For the
Nine-Month
Period Ended
September 30, 2013		      For the
Nine-Month
Period Ended
September 30, 2012		  

Total revenue, as reported

    $ 14,175       $ 12,117   

Pro forma revenue

      16,017         15,290   

Net income (loss) allocable to common shares, as reported

      307         (68 ) 

Pro forma net income (loss) allocable to common shares

      836         (1 ) 

We have not yet completed the process of estimating the fair value of assets acquired and liabilities assumed. Accordingly, our preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as we complete the process. In accordance with FASB ASC Topic 805, changes, if any, to the preliminary estimates and allocation will be reported in our financial statements retrospectively.

NOTE 3:    Investments in Real Estate

As of December 31, 2012, our investments in real estate consisted of eight apartment real estate properties with 2,004 units. The table below summarizes our investments in real estate:

 

     2012     2011  

Land

    $ 30,168        27,089   

Building

      121,390        109,072   

Furniture, fixtures and equipment

      2,007        1,267   
  

 

 

    

 

 

  

Total investment in real estate

      153,565        137,428   

Accumulated depreciation

      (12,283 )      (9,304 ) 
  

 

 

    

 

 

  

Investments in real estate, net

    $ 141,282        128,124   
  

 

 

    

 

 

  

 

Acquisitions

On April 29, 2011, we, through our operating partnership, acquired six apartment properties, which we refer to as the initial portfolio, from six wholly-owned subsidiaries of our sponsor. The contribution value of the initial portfolio was $103,790. In connection with the acquisition of the initial portfolio, our operating partnership assumed $64,575 of mortgage indebtedness and issued $39,215 of limited partnership interests, or 3,921,500 limited partner units, to our sponsor. In addition, our sponsor purchased an additional 125,000 limited partner units for $1,250 in cash on April 29, 2011. Because we were wholly owned by our sponsor and under common control as of the date of purchase, the assets and liabilities of the initial portfolio were recorded at our sponsor’s carrying amount, or book value, at the time of contribution, pursuant to Staff Accounting Bulletin Topic 5G and ASC 805-50-30-5.

On December 16, 2011, we entered into a purchase and sale agreement with a wholly owned subsidiary of our sponsor, pursuant to which we purchased a 320-unit multi-family property, which we refer to as Centrepoint Apartments, located in Tucson, Arizona from our sponsor for a purchase price of $29,500. We obtained a $17,600 first mortgage on Centrepoint Apartments and issued $12,282 of limited partnership interests, or 12,282,000 limited partnership units, in our operating partnership. Because we were wholly owned by our sponsor as of the date of purchase, the assets and liabilities of the property were recorded at our sponsor’s carrying amount at the time of acquisition, pursuant to Staff Accounting Bulletin Topic 5G and ASC 805-50-30-5.

On October 11, 2012, we acquired a fee simple interest in a 192-unit apartment residential community located in Indianapolis, Indiana, known as Runaway Bay Apartments. We acquired the property through a wholly owned subsidiary of our operating partnership, from an unaffiliated third party, 2030 Runaway Bay Drive Holdings, LLC. We acquired the property for an aggregate purchase price of $15,750 exclusive of closing costs. We paid the purchase price with a combination of a $10,238 first mortgage loan and $5,512 in cash.

The following table summarizes the aggregate carrying value of the assets and liabilities associated with the properties acquired during the year ended December 31, 2012, on the respective date of each acquisition, for the real estate accounted for under FASB ASC Topic 805.

 

Description

    Carrying Amount  

Assets acquired:

   

Investments in real estate

    $ 15,397   

Intangible asset

      353   

Liabilities assumed:

   

Mortgage indebtedness

      (10,238 ) 
  

 

 

  

Carrying amount of net assets acquired

    $ 5,512   
  

 

 

  

Our consolidated unaudited pro forma information, after including the acquisition of real estate properties, is presented below as if the acquisitions occurred on January 1, 2011. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods:

 

Description

    For the
Year Ended
December 31, 2012		     For the
Year Ended
December 31, 2011		  

Total revenue, as reported

    $ 16,629      $ 8,668   

Pro forma revenue

      18,308        17,675   

Net income (loss) allocable to common shares, as reported

      (123 )      (112 ) 

Pro forma net income (loss) allocable to common shares

      (66 )      (55 )