2016 Management Internalization	12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]
2016 Management Internalization	NOTE 8: 2016 Management Internalization On December 20, 2016, we completed our management internalization, which consisted of two parts: (i) our acquisition of our external advisor, which was a subsidiary of RAIT, and (ii) our acquisition of substantially all of its assets and the assumption of certain liabilities relating to the multifamily property management business of RAIT, including property management contracts relating to apartment properties owned by us, RAIT and third parties. In accounting for the management internalization transaction, we first evaluated the net assets that were acquired. We also considered pre-existing relationships that were settled as part of the transaction, which included the advisory agreement and our properties’ property management agreements. In evaluating the amount by which these contracts were favorable or unfavorable to us, we compared the actual amounts historically paid and that would be owed under these agreements to a range of potential market arrangements and then applying a discount rate to the two sets of cash flows. The most significant difference between our agreements and the potential markets arrangements observed was our inability to terminate the advisory agreement until October 1, 2020 as well as the advisory agreement’s termination fee. The impact of this difference led to the conclusion that these agreements were unfavorable to us, on a present value basis, by more than $43,000, which was the purchase price for the management internalization. Accordingly, the difference between estimated fair value of the net assets acquired of $143 and the consideration transferred of $43,000 represents the settlement of pre-existing relationships between us and RAIT. Accordingly, the difference of $42,857 was recognized as a loss in our income statement as management internalization expense. As part of our management internalization, we incurred $2,119 of acquisition-related expenses. These acquisition-related expenses were recognized in earnings immediately and are included within management internalization expense.

2016 Management Internalization

12 Months Ended

Dec. 31, 2018

2016 Management Internalization

NOTE 8: 2016 Management Internalization

On December 20, 2016, we completed our management internalization, which consisted of two parts: (i) our acquisition of our external advisor, which was a subsidiary of RAIT, and (ii) our acquisition of substantially all of its assets and the assumption of certain liabilities relating to the multifamily property management business of RAIT, including property management contracts relating to apartment properties owned by us, RAIT and third parties.

In accounting for the management internalization transaction, we first evaluated the net assets that were acquired. We also considered pre-existing relationships that were settled as part of the transaction, which included the advisory agreement and our properties’ property management agreements. In evaluating the amount by which these contracts were favorable or unfavorable to us, we compared the actual amounts historically paid and that would be owed under these agreements to a range of potential market arrangements and then applying a discount rate to the two sets of cash flows. The most significant difference between our agreements and the potential markets arrangements observed was our inability to terminate the advisory agreement until October 1, 2020 as well as the advisory agreement’s termination fee. The impact of this difference led to the conclusion that these agreements were unfavorable to us, on a present value basis, by more than $43,000, which was the purchase price for the management internalization.

Accordingly, the difference between estimated fair value of the net assets acquired of $143 and the consideration transferred of $43,000 represents the settlement of pre-existing relationships between us and RAIT. Accordingly, the difference of $42,857 was recognized as a loss in our income statement as management internalization expense.

As part of our management internalization, we incurred $2,119 of acquisition-related expenses. These acquisition-related expenses were recognized in earnings immediately and are included within management internalization expense.