REAL ESTATE ACTIVITY

3 Months Ended

Mar. 31, 2016

Real Estate [Abstract]

REAL ESTATE ACTIVITY

NOTE 2. REAL ESTATE ACTIVITY

Below is a summary of the real estate owned as of March 31, 2016 (dollars in thousands):

Apartments	$	622,761
Apartments under construction		26,625
Commercial properties		215,184
Land held for development		96,978
Land subject to sales contract		49,155
Total real estate	$	1,010,703
Less accumulated depreciation		(155,332	)
Total real estate, net of depreciation	$	855,371

The highlights of our significant real estate transactions for the three months ended March 31, 2016 are listed below:

Purchases

For the three months ended March 31, 2016, the Company did not acquire any income-producing properties.

Sales

For the three months ended March 31, 2016, TCI sold approximately 40.9 acres of land, located in Texas, to independent third parties, for a total sales price of $4.2 million. TCI recorded a gain of approximately $1.7 million from the sales.

In addition, TCI sold one industrial warehouse, located in Texas, consisting of approximately 177,805 square feet. The sale resulted in a loss of approximately $0.2 million.

In November 2015, the Company entered into a sales contract with an unrelated party. The contract was for most of the developable land owned by the Company in the Mercer Crossing Development located in Farmers Branch, Texas. In addition, TCI, IOT and Realty Advisors, Inc. (“RAI”) also sold land in this transaction. Total consideration for the sale was $75 million. The ultimate allocation of sales proceeds to the parties involved is yet to be determined and will be complete when the final use of the land, certain development commitments are completed and the note is collected. The agreement between TCI and the other parties related to this transaction provides for TCI to hold the subordinated note from the buyer in the amount of $50 million. At the closing, the note payable to related parties of $16.1 million was paid off. Due to an inadequate down payment from the buyer and the level of seller financing involved, the transaction is being accounted for under the deposit method. Under the deposit method, no revenue is recognized and the asset sold remains on the books until the criteria for full revenue recognition is met.

As of March 31, 2016, the Company has approximately 91 acres of land, at various locations that were sold to related parties in multiple transactions. These transactions are treated as “subject to sales contract” on the Consolidated Balance Sheets. Due to the related party nature of the transactions TCI has deferred the recording of the sales in accordance with ASC 360-20.

We continue to invest in the development of apartment projects. During the three months ended March 31, 2016, we have expended $8.4 million related to the construction or predevelopment of various apartment complexes and capitalized $0.5 million of interest costs.