Investments in Real Estate

9 Months Ended

Sep. 30, 2015

NOTE 4: Investments in Real Estate

As of September 30, 2015, our investments in real estate consisted of 50 apartment properties with 14,044 units (unaudited). The table below summarizes our investments in real estate:

	As of September 30, 2015			As of December 31, 2014			Depreciable Lives (In years)
Land (1)	$	199,488		$	112,600			—
Building		1,190,856			570,475			40
Furniture, fixtures and equipment		10,548			6,037		5-10
Total investment in real estate	$	1,400,892		$	689,112
Accumulated depreciation		(35,304	)		(23,376	)
Investments in real estate, net	$	1,365,588		$	665,736

(1)

As of September 30, 2015, includes a parcel of land acquired with the TSRE merger that is held-for-sale and has a carrying amount of $3,283 and a fair value of $3,350.

Acquisitions

On May 1, 2015, we acquired a 236-unit (unaudited) apartment residential community located in Indianapolis, Indiana. We acquired the property for an aggregate purchase price of $25,250 exclusive of closing costs. Upon acquisition, we recorded the investment in real estate, including any related working capital and intangible assets, at fair value of $25,250 and did not record a gain.

As previously discussed, we completed the TSRE merger on September 17, 2015. As part of the TSRE merger we acquired 19 properties containing 4,989 units (unaudited). See Note 3: TSRE Merger for details on the assets acquired, liabilities assumed and consideration paid as part of the TSRE merger.

The following table summarizes the aggregate fair value of the assets and liabilities associated with all of the properties acquired during the nine-month period ended September 30, 2015, on the date of each acquisition, for the real estate accounted for under FASB ASC Topic 805.

Description	Fair Value of Assets Acquired During the Nine-Month Period Ended September 30, 2015
Assets acquired:
Investments in real estate	$	707,268
Cash and cash equivalents		2,685
Accounts receivable and other assets		6,210
Intangible assets		7,690
Total assets acquired	$	723,853
Liabilities assumed:
Indebtedness	$	359,495
Accounts payable and accrued expenses		8,069
Accrued interest payable		130
Other liabilities		3,764
Total liabilities assumed	$	371,458
Estimated fair value of net assets acquired	$	352,395

The table below presents the revenue and net income (loss) for the properties acquired during the nine-month period ended September 30, 2015 as reported in our consolidated financial statements.

	For the Three-Month Period Ended September 30, 2015					For the Nine-Month Period Ended September 30, 2015
Property	Total revenue		Net income (loss) allocable to common shares			Total revenue		Net income (loss) allocable to common shares
TSRE portfolio	$	2,668	$	1,539		$	2,668	$	1,539
Bayview Club		546		(175	)		1,143		53
Total	$	3,214	$	1,364		$	3,811	$	1,592

The table below presents the revenue, net income and earnings per share effect of the acquired properties on a pro forma basis as if the acquisitions occurred on January 1, 2014. 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 Three-Month Period Ended September 30, 2015		For the Three-Month Period Ended September 30, 2014
Pro forma total revenue (unaudited)		16,735		15,033
Pro forma net income (loss) allocable to common shares (unaudited)		4,702		2,961
Earnings (loss) per share attributable to common shareholders:
Basic-pro forma (unaudited)		0.14		0.12
Diluted-pro forma (unaudited)		0.13		0.12

Description	For the Nine-Month Period Ended September 30, 2015		For the Nine-Month Period Ended September 30, 2014
Pro forma total revenue (unaudited)		50,653		45,098
Pro forma net income (loss) allocable to common shares (unaudited)		13,237		8,882
Earnings (loss) per share attributable to common shareholders:
Basic-pro forma (unaudited)	$	0.41	$	0.47
Diluted-pro forma (unaudited)	$	0.39	$	0.47

Dispositions

On October 15, 2015, we sold a parcel of land acquired in the TSRE merger for $3,350.

- Definition

The entire disclosure for real estate owned (as defined). Generally, the largest component of real estate owned by lenders is assets taken in settlement of troubled loans through surrender or foreclosure. Real estate investments, real estate loans that qualify as investments in real estate, and premises that are no longer used in operations may also be included in real estate owned.

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