Real Estate Held for Sale in Consolidated VIEs

9 Months Ended

Sep. 30, 2017

Real Estate Held for Sale in Consolidated VIEs

On March 31, 2017, the Company determined that it became the primary beneficiary of Riverchase Landing and The Clusters, two variable interest entities that each own a multi-family apartment community and in which the Company holds preferred equity investments. Accordingly, on this date, the Company consolidated both Riverchase Landing and The Clusters into its condensed consolidated financial statements (see Note 10).

During the second quarter of 2017, Riverchase Landing determined to actively market its multifamily apartment community for sale. The Company anticipates completing a sale to a third party buyer in 2018. Accordingly, the Company classified the real estate assets in Riverchase Landing as held for sale as of September 30, 2017 in the accompanying condensed consolidated balance sheets. The Company also ceased depreciation of the operating real estate assets and amortization of the related lease intangible asset in Riverchase Landing as of June 5, 2017.

During the third quarter of 2017, The Clusters determined to actively market its multifamily apartment community for sale. The Company anticipates completing a sale to a third party buyer in 2018. Accordingly, the Company classified the real estate assets in The Clusters as held for sale as of September 30, 2017 in the accompanying condensed consolidated balance sheets. The Company also ceased depreciation of the operating real estate assets and amortization of the related lease intangible asset in The Clusters as of September 1, 2017.

The following is a provisional summary of the real estate held for sale in both Riverchase Landing and The Clusters as of September 30, 2017 (dollar amounts in thousands):



Land	$	7,000
Building and improvements	53,435
Furniture, fixtures and equipment	2,078
Lease intangible	5,340
Real estate held for sale before accumulated depreciation and amortization	67,853
Accumulated depreciation⁽¹⁾	(647		)
Accumulated amortization of lease intangible ⁽¹⁾	(3,109		)
Real estate held for sale in consolidated variable interest entities	$	64,097


⁽¹⁾	Depreciation and amortization expenses for the three months ended September 30, 2017 totaled $0.2 million and $0.9 million, respectively. Depreciation and amortization expenses for the nine months ended September 30, 2017 totaled $0.6 million and $3.1 million, respectively.

No gain or loss was recognized by the Company or allocated to non-controlling interests related to the classification of the real estate assets as held for sale.